Item 62 - Pre-Commitment of Affordable Housing Funds for Jamboree Housing Corporation and WISEPlace

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P a g e | 5 local residents from the City of Santa Ana based on the City’s local residency screening criteria. o An absolute preference shall be for current WISEPlace residents who are unable to be relocated prior to the start of construction and who qualify for relocation assistance paid for by the Inclusionary Loan and the Owner until the completion of the project. The “absolute” nature of this preference means that these current WISEPlace shelter residents will be selected if determined eligible for occupancy at the project before any other applicants are to be determined eligible. CDBG Loan Forgiveness: In 1996, the City provided the Owner a $900,000 loan of Community Development Block Grant (“CDBG”) funds (“CDBG Loan”) to finance the rehabilitation of the site for the purposes of providing permanent affordable rental housing. The CDBG Loan was structured with a 55-year term and a 1% simple interest rate. The loan repayments were to be made from 50% of the project’s residual receipts. In 2001, the City amended the terms of the CDBG Loan. At that time, the outstanding principal balance of the loan was set at $916,265, which consisted of t wo components: (1) a $250,000 component, and (2) a $666,616 component. The amended promissory note set the loan term at 55 years – starting in 2002 and ending in 2056. The current outstanding CDBG Loan balance is currently $723,446.41. Per the terms of the amended promissory note, the Owner is required to continue paying annual interest only payments until the end of the loan term in 2056. The entire balance of the CDBG Loan ($723,446.41 plus interest) will become due and payable at that time. Following the fulfillment of the conditions provided herein, the entirety of the CDBG Loan will be forgiven by the City, including any interest that may have accrued since the date of this letter. General Provisions: The City's obligation to provide the City Assistance and CDBG Loan Forgiveness to the Project is subject to each of the following conditions:  Developer must provide proof that it has secured all of its remaining financing for the development of the Project in the form of enforceable fund ing commitments, 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 Housing Authority, or any other funding source needed in the Project’s capital stack to develop the Project before staff will return to the City Council for consideration of the HOME-ARP Loan Agreement and Inclusionary Loan Agreement. EXHIBIT 2