Item 21 - Amendment to the Affordable Housing Funds Policies and Procedures

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Affordable Housing Funds Policies and Procedures Page 13 6. ANTICIPATED CASH FLOWS (Max. 15 Points) Project's proposed development costs are reasonable and comparable 3 Project's proposed rents are realistic 3 Project's operating costs are realistic and reasonable 3 Project has sufficient operating and replacement reserves 3 Project is projecting a positive cash flow through affordability period 3 Sub-total 15 7. PROJECT LOCATION (Max. 5 Points) Project is located in an area currently underserved by affordable housing 5 Sub-total 5 TOTAL ELIGIBLE POINTS 100 Developer Input on In-Lieu Fee Payments to the Inclusionary Housing Fund Under Section 41-1904(c)(3) of the Housing Opportunity Ordinance, a “Developer may provide input regarding what project the in lieu fees should be applied towards, but such input shall not be dispositive. The in-lieu fees collected by the City are City funds over which the City has complete and absolute discretion”. If a Developer chooses to provide input on the allocation of their in-lieu fees, input must be submitted in writing within no more than 90 calendar days from the date payment of the in-lieu fees are deposited with the City. The Developer’s request will be worth up to five (5) bonus points awarded to the applicant within the RFP Process through the Competitive Selection Criteria provided above. The bonus points do not guarantee that the project will be funded with the in-lieu fees paid by the Developer that provided the input. Determination of Reasonable Costs and Financial Feasibility A real estate advisor shall review the Applicant's estimates and projections of rents, expenses, reserves and development costs in accordance with industry-standard underwriting guidelines. The Applicant shall provide a proforma and background documentation on all costs for the analysis, as requested by the City. The City may recommend adjustments to cost and expense amounts as appropriate to conform to current market and industry standards. The total amount of the Program loan and all private loans shall not exceed the total development costs approved by the City. The maximum allowable purchase price shall not exceed the appraised value as evidenced by an appraisal prepared by a California State Certified General Appraiser and approved by the Housing Division, which is dated not more than six (6) months prior to the date of the proposal. The appraisal may not determine property value based solely on sales of properties financed by public agencies. The maximum affordable mortgage amount shall be calculated using the rent schedule proposed by the Applicant as approved by the City, the proposed interest rate and terms of the primary loan(s), and reasonable operating allowances and reserves, including a reserve to amortize a mortgage, as needed. Exhibit 1