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EXHIBIT 2 <br />C. The general operating expenses and social services are increased at 3.0% per <br />year. <br />d. The property taxes are increased at 2.0% per year. <br />e. Replacement reserves and the HCD mandatory payment will remain flat for 55 <br />years. <br />f. The priority distributions are categorized as follows: <br />L An annual debt service payment of $616,353; <br />ii. Repayment of the deferred Developer fee; and <br />iii. The Owner Partnership Management and Asset Management Fees are <br />not to exceed 5% of gross rents. <br />g. The annual residual receipts payments to the soft lenders will be se as follows: <br />L OCCF Loan: $1,500,000 will be repaid with 75% of the residual receipts. <br />This loan will have a 3% simple interest rate and a 15 year term. At the <br />end of the term, the outstanding loan balance will be $1,418,000 to be <br />paid off through a resyndication in year 16. <br />ii. SNHP Loan: $2,912,000 loan will be repaid with 50% of the residual <br />receipts net of the OCCF loan payment. This loan will have a 3% simple <br />interest rate and a 55 -year term. The loan is estimated to be repaid in <br />year 44. <br />iii. City HOME Loan: $352,963 will be repaid with 50% of the residual <br />receipts net of the OCCF and SNHP loan payments. This loan will have a <br />3% simple interest rate and a 55 -year term. The loan is estimated to be <br />repaid in year 23. The City HOME Loan will be secured with a fourth trust <br />deed. <br />h. The City HOME Loan is estimated to generate the following in nominal terms and <br />present value terms, assumption a 6.0% discount rate, as follows: <br />3. The NOI is projected to be positive through Year 55 and the HOME loan is anticipated to <br />be repaid in year 23. <br />City of Santa Ana Underwriting & Subsidy Layering Review: Veteran's Village Page 111 <br />25L-21 <br />