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Judson Brown, City of Santa Ana December 10, 2024 <br />Habitat Alton – Preliminary Financial Gap Analysis Page 10 <br /> <br /> 2412001v2.SA.TRB <br /> 19090.018.038 <br /> <br />Market Rate Sales Prices <br />Habitat provided sales comparables for the Project’s nearby market area for the purpose of <br />estimating the current silent second mortgage amount. Based on these comparables, KMA <br />estimates the market rate sales price for an attached three-bedroom unit at $750,000. <br />In addition, the HOME Program establishes a maximum sales price for the HOME units. <br />Ultimately, the market rate sales price will be set at the lesser of the appraised fair market <br />value of the unit or the maximum HOME sales price in effect at the time of sale. <br />Available Silent Second Mortgage Revenue <br />Based on the estimated market rate sales prices, the available silent second mortgage revenue <br />is estimated at as follows: <br /> Three-Bedroom Units <br /> Low Income <br />Units <br /> Moderate <br />Income Units <br />Market Rate Sales Price $750,000 $750,000 <br />(Less) Affordable Sales Price (300,200) (389,500) <br /> Silent Second Mortgage Amounts (Per Unit) $449,800 $360,500 <br /> <br />It is important to note that this calculation will need to be revisited once sales of the units <br />commence. At that point, the appraised market values of the homes, maximum HOME sales <br />prices, and the defined Affordable Sales Prices will be utilized to determine the silent second <br />mortgage amounts. <br />PRELIMINARY HOME COST ALLOCATION (TABLE 5) <br />KMA completed a preliminary HOME cost allocation for the Project. The HOME cost allocation <br />analysis is based in part on the 2024 maximum HOME subsidy limits of $327,293 for three- <br />bedroom units. The provision of $9.81 million in HOME funds to the Project requires that at <br />least 30 units be designated as HOME units. All of the HOME units will be restricted to Low <br />Income households. <br />EXHIBIT 3