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Judson Brown, City of Santa Ana <br />Westview House: Financial Gap Analysis <br />March 19, 2020 <br />Page 8 <br />Bond totaling $13.16 million must be obtained. The sum of the Series A and Series B <br />Bonds totals $27.14 million <br />The financing costs for the Project are estimated as follows: <br />1. The Developer will obtain a short-term acquisition loan to acquire the property <br />at the close of escrow. The acquisition loan interest is estimated at $254,000 <br />based on the following: <br />a. A 95% loan -to -value ratio; <br />b. A 4% interest rate; and <br />C. A 12-month term. <br />2. The construction period interest costs incurred on the Bonds are estimated at <br />$1.10 million based on the following: <br />a. A 3.25% interest rate; <br />b. An 18-month construction period with a 50%average outstanding <br />balance; and <br />C. A 6-month absorption period with a 100% average outstanding balance. <br />3. The bond costs/financing fees are estimated at 1.75 points, or $475,000. <br />4. A $331,000 capitalized operating reserve is provided. This equates to three <br />months of operating expenses and debt service payments. <br />5. A $250,000 capitalized transition reserve is provided, which is required by the <br />NPLH Program. <br />6. The Tax Credit fees are estimated at $49,000 based on the following <br />assumptions: <br />a. A $2,000 application fee; <br />b. A $410 per unit monitoring fee; and <br />2003012:SA:TRB <br />60 B 19090.017.022 <br />