3 - PRE-LOAN_COMMITMENT_2019-01-15

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EXHIBIT 2 Pagp 12 - A 99 -year ground lease for the property located at 801, 809, and 809'/2 East Santa Ana Boulevard (APNs: 398-303-04, 398-303-05, 398-303-06, and 398-303-07, with a combined appraised value of $788,000.00 as of October 25, 2018); to be used for development of affordable housing at 801, 809, and 809'/2 East Santa Ana Boulevard, Santa Ana, CA 92701 ("Ground Lease"); and, Three (3) U.S. Department of Housing and Urban Development -Veterans Affairs Supportive Housing ("HUD-VASH") Project -Based Vouchers ("PBV") for Permanent Supportive Housing for the Project. This letter shall evidence the Agency's pre -commitment of the Agency Assistance to the Developer for the Project subject to the conditions described below. Agency Loan: The amount of the proposed Agency Loan has been determined based upon the Agency's review of the Developer's request for the receipt of the Agency Assistance and the development proforma and projected cash flows for the Project submitted by the Developer to the Agency ("Proforma"). The Housing Authority Executive Director has authority to approve revised development proformas and projected cash flows for the Project; provided, however, that the Agency Assistance is not increased or extended. The Agency Loan shall include the following terms: $1,069,947.00 maximum principal amount, or as much thereof as is disbursed for hard and soft costs in constructing the Project, provided from Santa Ana Housing Successor Agency Low and Moderate Income Housing Asset Funds. • 3% simple interest per annum. Repayment from 50% of Residual Receipts (pro -rata with payments due in connection with other financing provided by other public agencies) (after payment of operating expenses, debt service, any deferred developer fee, and partnership fees to be described in the Agreement) with the remaining 50% to be disbursed to the Developer. Remaining principal and accrued interest due upon the 55th anniversary of the issuance of Certificate of Occupancy and/or final building permits or earlier upon sale, refinancing or default. On that date, the City/Agency agrees to review the performance of the property and consider in good faith any reasonable request by Developer to modify the terms or extend the term of the Agency Promissory Notes. Additionally, the Agency will receive a pro rata share of 50% of the net proceeds received from any sale or refinancing of the Project, after payment of outstanding debt and payment in full of any deferred developer fee and establishment of any reserves and transaction costs. 3-14