Laserfiche WebLink
EXHIBIT 3 <br /> Judson Brown, City of Santa Ana February 10, 2025 <br /> Habitat Wellington — Preliminary Financial Gap Analysis Page 10 <br /> concluded that the proposed Down Payment Assistance Program Allocation is warranted by the <br /> project economics. <br /> However, KMA estimates that the Project exhibits an unfunded financial gap of$27,800. <br /> Habitat will need to secure funding sources for any unfunded financial gap in order for the <br /> Project to be financially feasible. The City should confirm that Habitat has secured all necessary <br /> funding sources before formally disbursing any City funds. <br /> SILENT SECOND MORTGAGE REVENUE CALCULATION (TABLE 4) <br /> As a basic premise, it must be assumed that the total of the liens accepted by a homebuyer <br /> cannot exceed the unrestricted market value of the home. Furthermore, based on previous City <br /> homeownership projects, the City will record a second trust deed equal to the difference <br /> between the Affordable Sales Price and the estimated market value of the home. <br /> KMA assumes that the City's second trust deed will be structured as deferred payment loans <br /> which are commonly known as silent second mortgages. These loans typically become due and <br /> payable when the home is resold to a non-affordable home buyer. KMA assumes that the City's <br /> silent second trust deed will fall second in the lien hierarchy behind the conventional first trust <br /> deed mortgage. <br /> The calculations used to estimate the supportable silent mortgages are presented in the <br /> following sections of this analysis. <br /> Md(Kel KaLe :�oaies rriLes <br /> KMA researched sales comparables for similar units in the market area for the purpose of <br /> estimating the current silent second mortgage amount. The appraisal provided by Habitat <br /> included additional sales comparable data. Based on this information, KMA estimates the <br /> market rate sales price for the units as follows: <br /> 1. One-Bedroom Units: $345,600 <br /> 2. Two-Bedroom Unit: $389,700 <br /> 2412002v3.SA.TRB <br /> 19090.018.035 <br />