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EXHIBIT 2 <br />Judson Brown, City of Santa Ana January 18, 2019 <br />Lacy Street Project: Preliminary Financial Gap Analysis Page 5 <br />Indirect Costs <br />KMA utilized the following assumptions in estimating the indirect costs: <br />1. The architecture, engineering and consulting costs are estimated at $153,000, <br />which equates to an average of $76,500 per unit or 20% of direct costs. <br />2. Habitat estimated the public permits and fees costs at $52,000, or approximately <br />$26,000 per unit. City staff should verify the accuracy of this estimate. <br />3. The taxes, insurance, legal and accounting costs are estimated at 2% of direct <br />costs. <br />4. Habitat will select the home buyer of each unit and provide home buyer <br />education and training. Habitat estimates the cost of these services at $12,000 <br />per unit, or $24,000. <br />5. Habitat set the Developer Fee at $98,000, which is equal to 13% of direct costs. <br />6. An indirect cost contingency allowance equal to 5% of other indirect costs is <br />provided. <br />KMA estimates the total indirect costs at $359,000. <br />Financing Costs <br />The financing costs for the Project are estimated as follows: <br />1. The interest costs to be incurred during the construction period are estimated at <br />$20,000. These costs are based on the following assumptions: <br />a. Habitat stated that they will obtain a construction loan from a 3rd party <br />lender for the Project. KMA estimates the construction loan amount at <br />$998,000, which is calculated based on the total construction costs less <br />the In -Kind Contributions, Developer Fee, closing costs, and warranty <br />costs. <br />1901009:SA:TRB <br />80A-17 19090.017.011 <br />