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EXHIBIT 2 <br />At City of Santa Ana's (City) request, Keyser Marston Associates, Inc. (KMA) prepared a HOME <br />Underwriting & Subsidy Layering Review for the 76 -unit apartment project (Project) located at <br />3312 West First Street (Site) being proposed by Jamboree Housing Corporation (Developer). <br />The City plans to provide financial assistance to the project using HOME Program (HOME) funds <br />that are allocated to the City by the United States Department of Housing and Urban <br />Development (HUD). This analysis is prepared in compliance with the requirements imposed by <br />HOME and the City's HOME Project Underwriting and Subsidy Layering Review Guidelines. <br />The KMA analysis includes the following components: <br />1. An underwriting review to determine the feasibility and to ensure that no more than the <br />necessary amount of HOME funds, in combination with other governmental assistance, <br />is invested by the City in order to provide affordable housing. This section also provides <br />an assessment of the reasonableness of the Developer Fee, cash flow, equity <br />appreciation and profit anticipated to be generated by the Project. <br />2. An evaluation of the Developer's capacity to develop and operate the Project. <br />3. A review and summary of the residential rental market for the Project. <br />4. An assessment of other HOME requirements and deadlines, including the financial <br />commitment documentation submitted by the Developer. <br />I. EXECUTIVE SUMMARY <br />The Developer proposes to develop the 76 -unit Project on the 1.54 -acre Site, currently owned <br />by the Developer. The Project will be financed with the following funding sources: <br />Funding <br />Conventional Loan <br />Provided by Union Bank <br />9% Tax Credits <br />Allocated by TCAC, Provided by Union Bank as Investor <br />HOME Loan <br />Provided by City <br />OCCF Loan <br />Provided by Orange County Community Foundation <br />Home Depot Grant <br />Provided by Home Depot <br />SNHP Loan <br />Allocated by CaIHFA and Orange County <br />AHP Loan <br />Allocated by Federal Home Loan Bank <br />Deferred Developer Fee <br />Provided by Developer <br />VASH Vouchers <br />I Allocated by Santa Ana Housing Authority <br />The KMA analysis concluded the following: <br />1. Underwriting Analysis: <br />a. The Project costs are estimated at $29,355,000 and the available funding sources <br />are estimated at $29,002,000, resulting in a financial gap of approximately <br />$353,000. The financial gap is equal to Developer's request of HOME funds from <br />City of Santa Ana Underwriting & Subsidy Layering Review: Veteran's Village Page 11 <br />25L-11 <br />