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Judson Brown, City of Santa Ana <br />EXHIBIT 2 <br />May 22, 2019 <br />1126-46 E. Washington Ave: Preliminary Financial Gap Analysis Page 2 <br />2. A loan of HOME Program (HOME) funds allocated to the City by the United <br />States Department of Housing and Urban Development (HUD); and <br />3. A loan of Neighborhood Stabilization Program (NSP) funds allocated to the City <br />by HUD. <br />The purpose of KMA analysis is to evaluate the Developer's assistance request. <br />Estimated Financial Gap <br />The results of the KMA financial gap analysis are compared to the Developer's financial <br />proposal in the following table: <br />KMA <br />Developer <br />Difference <br />Total Development Costs $38,688,000 <br />$38,734,000 <br />($46,000) <br />Outside Funding Sources 34,746,000 <br />34,762,000 <br />(16,000) <br />Financial Gap $3,942,000 <br />$3,972,000 <br />($30,000) <br />As shown in the preceding table, KMA estimates the Project's financial gap at $3.94 <br />million. Comparatively, the Developer is requesting $3.97 million in financial assistance <br />from the City. This represents a less than 1% differential, which can be considered <br />inconsequential. However, it is important to note that the KMA and Developer <br />estimates differ on a line item by line item basis. <br />Proposed Funding Sources <br />The following summarizes the proposed funding sources for the Project: <br />1. It is estimated that the Project will receive forty-three (43) Section 8 Project <br />Based Vouchers (PBVs) that are allocated to the County by HUD. <br />2. The Project's stabilized net operating income (NOI) supports $2.90 million in <br />permanent financing. <br />The Developer is proposing to apply for 9% Federal Low Income Housing Tax <br />Credits (Federal Tax Credits) that are competitively awarded by the California Tax <br />1905019:SA:TRB <br />19090.017.019 <br />FO W <br />