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Judson Brown, City of Santa Ana Santa Ana United Methodist Church: Financial Gap Analysis EXHIBIT 3 January 3, 2019 Page 2 KMA Developer Difference Total Development Costs $469,000 ,74 $46,729,000 $20,000 Outside Funding Sources 43,550,000 43,558,000 (8,000) Financial Gap $3,199,000- $3,171,000 $28,000 As shown in the preceding table, KMA estimates the Project's financial gap at $3.20 million. Comparatively, the Developer is requesting $3.17 million in financial assistance from the City. This differential can be considered inconsequential. However, it is important to note that the KMA and Developer estimates differ on a line item by line item basis. Proposed Funding Sources The following summarizes the proposed funding sources for the Project: 1. KMA estimates that the Project's stabilized net operating income (NOI) supports $1.13 million in Tax -Exempt Multifamily Bonds (Bonds), which are allocated by the California Debt Limit Allocation Committee (CDLAC). The NOI includes the rental subsidy generated by eight Section 8 Project -Based Vouchers (PBVs) 4. awarded to the Project by the Authority. The Developer is proposing to utilize 4% Federal Low Income Housing Tax Credits (Tax Credits) that are automatically awarded to projects that receive a Bond allocation from CDLAC. The net Tax Credit proceeds are estimated at $16.12 million. The Developer is proposing to apply for a $20.0 million loan of Affordable Housing and Sustainable Communities (AHSC) funds managed by the California Department of Housing and Community Development (HCD). The Developer is proposing to apply for $2.36 million in Orange County Housing and Community Development & Homeless Prevention (OC HCD/HP) funds managed by the County of Orange. 80A-22 1812009:SA:TRB 19090.017.008