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Judson Brown, City of Santa Ana October 27, 2022 <br />Habitat Washington Avenue – Preliminary Financial Gap Analysis Page 6 <br /> <br /> 2208010v2:SA:TRB <br /> 19090.018.026 <br /> <br />2. Since the Project consists of more than four units, the Project is required to have <br />a homeowner’s association (HOA). Based on a similar project recently developed <br />by Habitat, the HOA dues are estimated at $425 per month, or $5,100 per year. <br />3. KMA estimates the homeowner’s insurance costs at 0.35% of the direct costs per <br />unit, or $1,400 per year. <br />4. KMA estimates the monthly utilities costs at $227 per month for a three- <br />bedroom unit based on the 2022-2023 Utility Allowance Schedule published by <br />the Santa Ana Housing Authority on October 1, 2022. <br />5. The property tax cost estimate is based on 1.25% of the estimated Affordable <br />Sales Price. <br />6. The mortgage interest rate is set at 7.22%. The mortgage is assumed to be fully <br />amortizing over 30-years and provided by a conventional lender. <br />7. The home buyer down payment is set at 5% of the Affordable Sales Price. <br />Based on the assumptions outlined above, KMA estimates the Low Income Affordable <br />Sales Price at $175,500. The resulting affordable sales revenue is estimated at $1.05 <br />million for the six Low Income units. <br />In comparison, Habitat estimates the affordable sales price at $185,000. Additionally, it <br />is important to note that affordable sales price information that Habitat provided did <br />not entirely follow the H&SC Section 50052.5 affordable sales price calculation <br />methodology for calculating the estimated affordable sales prices. As such, the KMA <br />and Habitat affordable sales price calculations may differ more materially in the future. <br />However, the affordable sales prices will ultimately be determined immediately prior to <br />the sale of each unit. This analysis may need to be revised if the affordable sales prices <br />differ from the sales prices utilized in this analysis. <br />ADDITIONAL REVENUE <br />Habitat proposes to utilize fundraising contributions to off-set a portion of the <br />construction costs. As such, Habitat estimates the financial assistance that they can <br />provide to the Project at $1.0 million, or $167,000 per unit. <br />EXHIBIT 3