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Loan Agreements with Townsend & Raitt, LLC and Authorization of Relocation Plans December 3, 2007 Page 4 2006 the median household income in this area was $33,304, while it was $54,000 for the City as a whole and $78,300 for Orange County. Townsend & Raitt, LLC is comprised of Orange Housing Development Corporation, a non-profit 501(c)(3) (OHDC), and C & C Development Co., LLC. They are currently in escrow to purchase and rehabilitate four 10 unit and one 11 unit apartment buildings in this area. These units are located at 701, 709, 817 and 821 S. Townsend Street and 834 S. Raitt Street (Exhibit 1) . Both OHDC and C & C Development have many years of successful experience owning and operating apartment buildings in other areas facing similar challenges. In Santa Ana they own and operate twenty buildings in the Cornerstone Village project area and recently acquired seventeen buildings in the Wilshire -Minnie area. Part of their success stems from their practice of hands-on management with an emphasis on fair and consistent enforcement of lease agreement conditions. Fifty of the fifty-one total units will be restricted to occupancy by fifty percent (very low-income) of the Area Median Income (AMI). One unit will be reserved for the manager. Rents for one -bedroom units will be $781 and $935 for two -bedroom units. Current residents whose incomes exceed eighty percent of the AMI will be allowed to remain. Rents for these households will be increased to either thirty percent of their monthly household income or market rent for the neighborhood, whichever is lower. The total cost to acquire and rehabilitate the five buildings is $11,008,813. In addition to the City and Agency loans, funding sources include below market rate community investment loans in a total amount of $2,017,391 from Washington Mutual Bank. Exhibit 2 includes a summary of the sources and uses. Other funding sources were evaluated by CSG Advisors, the Agency's financial advisor, to determine if the City and Agency resources could be further leveraged. These sources included tax-exempt mortgage revenue bonds and Low -Income Housing Tax Credits (LIHTC). The difference between the interest rates available through tax exempt bonds and the Washington Mutual loan offered through its Community Lending Division was negligible due to the nominal amount of supportable first trust deed and the high cost of issuance of tax exempt bonds. In regard to the LIHTCs, there would be an exit tax liability of approximately $1 million to the tax credit partners. This liability occurs because the financial benefit received by the tax credit partners exceeds the initial investment. As a result of the very low-income rents, it is not �L;ll