60B - AFFORDABLE HOUSING FUND FOR MERCY HOUSE

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Pre -Commitment of Affordable Housing Funds to Community Development Partners April 7, 2020 Page 3 Based on the scores above and the deliberative selection and review process followed by the City, the Review Panel recommends the following award for this project: Developer: Community Development Partners and Mercy House CHDO Project Name: Westview House Award Recommendation: Inclusionary Housing funds $1,514,113 HOME Investment Partnerships Program $1,412,643 (HOME) funds HOME Community Housing Development $591,062 Organization (CHDO) funds Rental Rehabilitation Program funds $386,523 Total Financial Award $3,904,341 The pre -commitment letter for Community Development Partners and Mercy House CHDO as the service provider provides the enforceable funding commitment from the City (Exhibit 1) for $3,904,341 in affordable housing funds consisting of $1,514,113 in Inclusionary Housing funds, $2,003,705 in HOME Investment Partnerships Program funds and $386,523 in Rental Rehabilitation Program funds, for the development of the Westview House affordable housing project located at 2530 and 2534 Westminster Avenue, Santa Ana, CA 92706, (APNs 198-132- 21 and 198-132-23). Among various other conditions in the pre -commitment letter, one of the primary conditions is that the developer must provide verification that it has secured all of its remaining financing for the development of the Project in the form of the other enforceable funding commitments in the Project's capital stack, which may include 9% or 4% Federal Low Income Housing Tax Credits, State Housing Tax Credits, a commitment of affordable housing funds from the County of Orange or State of California, Section 8 project -based vouchers from the Orange County or Santa Ana Housing Authority, or any other funding source needed in the Project's capital stack to develop the Project and close on the financing, before staff will return to the City Council for consideration of the Loan Agreements for this Project. The pre -commitment letter is also conditional on the developer securing any and all permits and discretionary approvals that may be required for the Project by the City. The pre -commitment does not obligate the City or any department thereof to approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the construction of the project. In compliance with the City's Affordable Housing Funds Policies and Procedures, KMA has conducted a preliminary financial gap analysis to confirm the Project's underwriting, the financial gap, and other programmatic requirements related to the funding sources (Exhibit 2). KMA reviewed the developer's estimates and projections of rents, expenses, reserves and