Laserfiche WebLink
Judson Brown, City of Santa Ana December 10, 2024 <br />Habitat Alton – Preliminary Financial Gap Analysis Page 6 <br /> <br /> 2412001v2.SA.TRB <br /> 19090.018.038 <br /> <br />KMA estimates the total indirect costs at $4.61 million. <br />Financing Costs <br />1. The interest costs to be incurred during the construction period are estimated at <br />$489,000. This cost estimate is based on the following: <br />a. KMA assumes that Habitat will obtain a construction loan from a third party <br />lender for the Project. KMA estimates the construction loan amount at $7.52 <br />million, which is calculated based on the total development costs less the <br />purchase price, Habitat fundraising assistance, Developer Fee, homebuyer <br />closing costs, HOA reserves and warranty costs. <br />b. Habitat assumes the construction loan will carry the following terms: <br />i. A 6.5% interest rate; <br />ii. A 24-month construction period; and <br />iii. A 50% average outstanding balance. <br />2. The financing fees for the construction loan are estimated at 1.0 point, or $75,000. <br />3. The closing costs related to the sale of each affordable unit are set at $3,000 per unit, or <br />$120,000. <br />4. Habitat proposes to fund a $24,000 reserve for the Homeowners Association. <br />5. The warranty costs are estimated at $140,000, which equates to $3,500 per unit. <br />KMA estimates the total financing costs at $848,000. <br />TOTAL DEVELOPMENT COSTS <br />As shown in Table 1, KMA estimates the total development costs at $27.28 million. In <br />comparison, Habitat estimates the total development costs at $27.25 million. This represents a <br />$34,000 differential, which equates to less than 1% of the total development costs. <br />EXHIBIT 3