25L - AGMT VETERANS VILLAGE PROJ

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EXHIBIT 2 3. The miscellaneous income is estimated at $9 per unit per month. 4. A vacancy and collection allowance equal to 10% of gross income is deducted, which is standard for a special needs project. The residential operating expenses are estimated at $595,942 based on the following assumptions: 1. The general operating expenses are estimated at $5,802 per unit per year. It should be noted that the property management expenses are estimated at $60 per unit per month and limited to 8% of gross rental income in the HOME Agreement. 2. KMA assumes Developer will apply for the property tax abatement that is accorded to non-profit housing organizations that own income -restricted apartments. Developer estimated the property tax assessment overrides at $5,016 per year. 3. The social services budget is estimated at $112,000, or $1,474 per unit. 4. The mandatory HCD debt services payment for the SNHP loan is equal to $12,230. 5. The annual capital replacement reserve deposits are estimated at $500 per unit. The Project's EGI is estimated at $1,309,543 and the operating expenses are estimated at $595,942. This results in an estimated stabilized NOI of $713,601. C. Financial Gap Analysis (Table 3) Avallable Funding Sources. The following summarizes the available funding sources: Conventional Loan Union Bank provided the Developer with an executed term sheet, dated June 6, 2018, for a $23,000,000 construction loan and a $9,790,000 permanent loan. The following summarizes the associated loan terms: 1. Construction Loan: An interest rate based on the 30 -day LIBOR rate plus a 1.60% loan spread, which is currently estimated to total 3.62%; b. A 24 month term; C. The loan will be secured with a first trust deed during the construction period; and City of Santa Ana Underwriting & Subsidy Layering Review: Veteran's Village Page 18 25L-18