25B - AGMT - AMEND LOAN AGMT SA VETS

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is estimated to have a $609,000 outstanding balance in Year 15, which will be repaid through resyndication. ii. SNHP Loan: $2,912,000 loan will be repaid with 25% of the residual receipts net of the OCCF loan payment. This loan will have a 3% simple interest rate and a 55-year term. The loan is estimated to be repaid in year 52. iii. City HOME Loan: $477,000 will be repaid with 3% of the residual receipts net of the OCCF and SNHP loan payments. This loan will have a 3% simple interest rate and a 55-year term. The loan is estimated to have a $470,000 outstanding loan balance in Year 55. The City HOME Loan will be secured with a fourth trust deed. h. The City HOME Loan is estimated to generate the following in nominal terms and present value terms, assumption a 6.0% discount rate, as follows: The NOI is projected to be positive through Year 55 and the HOME loan not anticipated to be repaid until Year 55. Therefore, it is concluded that the Project will have a positive cash flow during the term of the HOME affordability and loan terms. E. Profit and Returns The following analyzes the anticipated profit to the Developer/Owner. Developer Fees $2,200,000, which is the maximum allowed per TCAC. Cash Flow Residual receipts after payment on the soft loan will go to Developer, which is estimated to total $29 million over 55 years, or a net present value of $3.58 million. This equates to an estimated 21% IRR based on the $615,000 deferred fee provided by the Developer. Tax Benefits The Project will generate $12.65 million in federal tax credits that will be sold to Union Bank and the cash will be used as equity in the Project. Equity Appreciation The equity appreciation is not expected to be significant until year 56 when the units are converted to market rate units. City of Santa Ana Underwriting & Subsidy Layering Review: Veteran's Village Page 112 25B-46