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EXHIBIT 3 Judson Brown, City of Santa Ana January 9, 2019 Francis Xavier Residence: Preliminary Financial Gap Analysis Page 10 Deferred Developer Fee The Developer is proposing to defer $365,000, or 73% of the Developer Fee that is included in the Project's construction costs. The deferred amount will be repaid from the cash flow generated by the Project over time. Total Available Outside Funding Sources As shown in Table 3, the outside funding sources available to the Project are estimated at $3.16 million. Financial Gap Calculation Based on the preceding analysis, KMA estimates the Project's financial gap as follows: Total Construction Costs $4,195,000 (Less) Total Available Funding Sources (3,164,000) Financial Gap $1,031,000 Per Unit $85,900 As shown in the preceding analysis, KMA estimates that the Project exhibits a $1.03 million financial gap. In contrast, the Developer is requesting $1.07 million in financial assistance from the Authority. This represents a $39,000 differential, which is an approximately 1% difference. It is the KMA opinion that a difference of this magnitude can be considered insignificant. CONCLUSIONS / ISSUES FOR CONSIDERATION The following summarizes the conclusions of the KMA analysis: 1. Based on the currently available information, it is KMA's conclusion that the Project exhibits a $1.03 million financial gap, which is approximately equal to the Developer's $1.07 million financial assistance request. As such, KMA concludes that the Developer's request is warranted by the Project's economics. 1901007:SA:TRB 19090.017.010 3-27