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Loan Agreements with Orange Housing Development Corporation and Authorization of Relocation Plan December 20, 2004 Page 3 Housing Set-Aside funds to acquire and rehabilitate these buildings. The City and Agency will be providing all funding. The Agency's first trust deed will have an interest rate of six percent. The Agency and City will also have a residual receipts second trust deed with an interest rate of zero percent. All units will be affordable to very low-income households. The rehabilitation of the buildings will consist of repair and/or replacement of kitchen and bathroom fixtures and flooring, and reconfiguration of the buildings to create larger units to help alleviate some of the overcrowding in the area. The reconfiguration will change each of the buildings from ten, one-bedroom units into four, one-bedroom units; two, two-bedroom units; and two, three-bedroom units. Based on California Redevelopment Law, when a Redevelopment Agency enters into an agreement for the acquisition or disposition and development of property which agreement would lead to displacement of people from their homes, the legislative body must adopt, by resolution, a relocation plan. The OHDC Minnie Project Relocation Plan (Exhibit 2) has been prepared in conformance with applicable provisions of California Relocation Assistance Law and Relocation Guidelines as well as United States Department of Housing and Urban Development (HUD) regulations. This plan is required due to the temporary displacement of 38 households as a result of the project. There are currently two vacancies in the proposed project, and OHDC has six vacancies in their other units on Minnie Street. Therefore, there will be no permanent relocation of any households. All households will be accommodated within the project. The estimated cost for temporary relocation, including a contingency, is $87,500. 250-3