Laserfiche WebLink
Judson Brown, City of Santa Ana October 27, 2022 <br />Habitat Washington Avenue – Preliminary Financial Gap Analysis Page 5 <br /> <br /> 2208010v2:SA:TRB <br /> 19090.018.026 <br /> <br />i. A 7.0% interest rate; <br />ii. A 12-month construction period; and <br />iii. A 60% average outstanding balance. <br />2. The financing fees for the construction loan are estimated at 1.0 point, or <br />$8,000. <br />3. The closing costs are set at 2% of affordable sales revenue, or $21,000. <br />4. The warranty costs are estimated at $43,000, or approximately $7,200 per unit. <br />KMA estimates the total financing costs at $104,000. <br />TOTAL DEVELOPMENT COSTS <br />As shown in Table 1, KMA estimates the total development costs at $4.29 million, which <br />equates to a $21,000, or less than 1%, differential from Habitat’s estimated <br />development costs. <br />It is important to note that the construction industry is currently experiencing extreme <br />volatility with substantially high inflation. This analysis may need to be revised if the <br />construction costs vary from the estimates utilized in the analysis. <br />Estimated Available Revenue (Table 2) <br />The revenue available to the Project is estimated as follows: <br />AFFORDABLE SALES PRICE CALCULATIONS <br />Habitat is proposing to sell all six units to Low Income households. KMA estimates the <br />Affordable Sales Price based on the H&SC Section 50052.5 calculation methodology and <br />the following assumptions (Table 5): <br />1. The household income used in the calculations is based on the 2022 Orange <br />County median incomes distributed by the California Department of Housing and <br />Community Development (HCD). <br />EXHIBIT 3