Item 68 - Crossroads at Washington Affordable Housing Project at 1126, 1136, & 1146 East Washigton Ave.

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Agreements for the Development of the Crossroads at Washington June 21, 2022 Page 5 2 7 6 6 Disbursement Schedule/Budget: 90 percent of the funds will be disbursed upfront for the construction, with a 10 percent contingency. Selection of Tenants: Except for the permanent supportive housing units covered by the 43 project-based vouchers provided by the Orange County Housing Authority, a local preference shall be given to residents that live and/or work in the City of Santa Ana. [On February 18, 2020, the City Council adopted a resolution granting consent to the Orange County Housing Authority to administer project - based vouchers in the City of Santa Ana for the development of the Project.] The HOME Loan Agreement has been pre-signed by Related to acknowledge their acceptance of the terms. Loan Agreement – Neighborhood Stabilization Program Funds The Neighborhood Stabilization Program Loan Agreement is attached as Exhibit 6. All of the loan terms are the same as the HOME Loan Agreement above except for the Loan Amount below: Loan Amount: $1,637,420 principal amount from the Neighborhood Stabilization Program Disbursement Procedures: 100% of the NSP Loan will be disbursed by the City after the Agreement is recorded This Loan Amount includes $339,727 in additional NSP funds to pay for an unanticipated increase in development costs. On August 17, 2021, the City Council authorized the City Manager to execute a first amended and restated pre-commitment letter for an additional $333,742 in NSP funds to pay for an unanticipated increase in development costs. Since that date, the Developer’s costs have continued to increase due to an increase in the interest rate on the permanent loan and increase in construction costs. The increase in construction costs is primarily due to inflation and the increase in construction labor and materials. With City Council’s approval of the NSP Loan Agreement, the new combined total amount of NSP funds for the Project is $1,637,420. The origin of the City’s NSP funds is from the American Recovery and Reinvestment Act of 2009 and HUD will rescind these funds if the City does not use them. The NSP Loan Agreement has been pre-signed by Related to acknowledge their acceptance of the terms. Subordination Agreements Regarding the Subordination Agreement with U.S. Bank, National Association (“U.S. Bank”) the City’s total loans for this Project is equal to $4,644,909 compared to U.S. Bank’s larger loan for over $33.8 million. As a subordinate loan for a large affordable housing project such as this, it is standard practice for a private market senior lender to