3 - LOAN AGREEMENT FOR AMCAL_2018-01-16 (2)

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EXHIBIT 2 AMCAL 1440 Santa Ana Fund, L.P. Tune 20, 2017 Page 3 Cost savings from the Project, if any, will be applied first to pay down the Agency Loan, subject to compliance with the Tax Credit Allocation Committee ("TCAC") Regulations and California Health and Safety Code. The Agency's obligation to provide the Agency Loan to the Project are subject to each of the following conditions: Review and approval of the documents evidencing the Agency Loan by the Housing Authority of the City of Santa Ana acting as the Housing Successor Agency. 2. Compliance with California Health and Safety Code and applicable regulations set forth in Section 34176. 3. Compliance with and completion of an environmental review of the Project pursuant to the California Environmental Quality Act ("CEQA") and approval thereof. 4. The fivading of $8,522,740 is from the Low and Moderate Income Housing Asset Fund which requires legal restrictions which the Agency cannot amend or repeal. 68 of the 69 "Housing Units" at the Project shall and will be restricted to "Affordable Rents" as defined by the TCAC Regulations for a period not less than 55 years pursuant to conditions, covenants and restrictions recorded against the Project in the Official Records, County of Orange, California. 34 of the 68 Housing Units at the Project shall and will be restricted to households earning 30% or less of the AMI. One (1) Housing Unit will be rented to an on-site property manager; the manager's unit will not be rent -restricted. 5. The Agency Loan Agreement shall provide that each of the following conditions shall be met prior to the disbursement of any portion of the Agency Loan: a. All grading permits shall have been issued and the City shall have issued a letter stating that building permits are ready to issue, subject only to payment of fees and the completion of grading of the Project site. b. Developer shall have secured all necessary financing and funding for the construction and operation of the Project. Such financing and funding shall be sufficient to pay all Project development costs, through lease -up, as set forth in a final budget consistent with the approved Proforma (or as otherwise approved by the Agency). C. The Developer shall have provided evidence to the Agency that the Developer has obtained insurance policies and certificates or endorsements acceptable to the Agency, as described in the Agency Loan Agreement. d. The Developer shall have provided construction security in favor of the Agency, which may include a completion guarantee from AMCAL Multi -Housing, Inc. and/or a letter of credit and/or performance & payment bonds from the general contractor for the Project (or some combination of these), in an amount sufficient to ensure the Project will be completed and 3-9