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Judson Brown, City of Santa Ana June 28, 2021 <br />Housing Opportunity Ordinance: Updated In-Lieu Fee Analysis Page 13 <br /> <br /> 2106011.SA:KHH <br /> 19090.017.021 <br /> <br />3. The household incomes used in the Affordable Sales Price calculations are set at <br />110% of AMI.4 <br />4. Thirty-five percent (35%) of the benchmark household incomes are allotted to <br />housing expenses. <br />5. Housing expenses are comprised of the following: <br />a. Household utilities costs, which are based on allowances that were <br />published by the Orange County Housing Authority on December 1, 2020; <br />b. Homeowners association dues and homeowners insurance premiums; <br />c. Maintenance costs; <br />d. Property taxes; and <br />e. Mortgage debt service. <br />The supportable mortgage amount is estimated based on the following: <br />1. The amount of income available for mortgage debt service after the payment of <br />all the other housing expenses; <br />2. The application of typical lender underwriting standards; and <br />3. The current market interest rate plus an upward adjustment to reflect the <br />potential for interest rates to increase between the commencement of <br />construction and the ultimate sale of the affordable unit. <br />The Affordable Sales Price is equal to the supportable mortgage plus a benchmark down <br />payment. The benchmark down payment is only used for the purpose setting the <br />Affordable Sales Price.5 <br /> <br />4 The percentages of the AMI used in the Affordable Rent calculations are benchmarks established by <br />H&SC 50052.5. The incomes limit used to qualify households to occupy moderate income units is defined <br />in H&SC 50093. <br />5 The actual down payment amount can vary widely, but it does not impact the Affordable Sales Price. <br />Instead, the actual down payment contributed by a home buyer is subtracted from the defined Affordable <br />Sales Price to establish the allowable first trust deed mortgage amount.