25L - AGMT VETERANS VILLAGE PROJ

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EXHIBIT 2 VASH Vouchers The Santa Ana Housing Authority committed to provide 75 VASH vouchers to the Project for a 15 -year term in a May 4, 2017 letter. AHP Grant The Federal Home Loan Bank agreed to provide the Project with $750,000, dated June 18, 2018. Payment on the loan will only be required if the Project is not in compliance with the regulatory agreement. Home Depot Grant On May 1, 2018, Home Depot committed to provide the Project with a $500,000 grant. Deferred Developer Fee The Developer will defer $650,000 of the $2,200,000 developer fee to be paid from cash flow. It is estimated that the deferred fee will be paid to the Developer within six years. Total Available Funding Sources As shown in Table 3, the available funding sources total $29,002,000. Rhanclal Gap Calculatlon Based on the assumptions outlined in this analysis, the financial gap is calculated as follows: Total Development Costs $29,355,000 (Less) Available Funding Sources (29,002,000) Financial Gap $353,000 Per Affordable Unit 547.700 The City proposes to fund the financial gap with $352,963 of HOME Program funds. Based on the KMA analysis, it is concluded that the $352,963 in HOME assistance to the Project is warranted. D. Cash Flow Over Affordability Term (Table 4) KMA also conducted a cash flow analysis to estimate the present value of the debt service payments to the City. The following describes the basic cash flow assumptions: 1. Year 1 is based on the pro forma rent and expense assumptions presented in the stabilized analysis (Table 2). Additional revenue and expense assumptions are as follows: a. The projected residential income and miscellaneous income are estimated to increase at 2.0% per year. b. A 10.0% vacancy and collection allowance. City of Santa Ana Underwriting & Subsidy Layering Review: Veteran's Village Page 110 25L-20