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Meta Housing Corporation Santa Ana Arts Collective November 3, 2015 Page 4 8. The City's obligation to provide the HOME Loan and additional local assistance to the Project are and shall remain subject to all covenants, conditions, and restrictions set forth in the HOME Loan Agreement, and in particular City's analysis of the available funding sources and development and operating costs of the Project and the overall economic feasibility of the Project. In addition to the foregoing, notwithstanding any statement set forth in this letter or provisions of the HOME Loan Agreement, the Developer and the City agree and acknowledge that the HOME Loan Agreement will not constitute a commitment of federal funds, and that such commitment of funds may occur only upon satisfactory completion of environmental review and receipt by City, as applicable, for a release of funds from the U.S. Department of Housing and Urban Development under 24 CFR Part 58, The Developer and the City will further agree in the HOME Loan Agreement that the provision of any federal funds to the Project is and shall be conditioned on Santa Ana's determination to proceed with, modify or cancel the Santa Ana Assistance based on the results of a subsequent NEPA environmental review and the outcome of the Subsidy Layering Review. In addition to the HOME Loan, the City Council approved a pre -loan commitment to provide the following additional assistance to the Project: • Inclusionary Housing Funds Loan in the amount of $1,875,000. • Community Development Block Grant (CDBG) Loan in the amount of $500,000 for the rehabilitation of the property. The Developer will also have to comply with all rules and regulations that pertain to the CDBG Program and the City's Inclusionary Housing Fund Program for those funds. Loan agreements for these funds will require City Council approval prior to the execution of the documents. The Developer and the City are further prohibited from undertaking or committing any federal funds to physical or choice -limiting actions, including property acquisition, demolition, movement, rehabilitation, conversion, repair or construction prior to the environmental clearance. The Developer and the City understand that the violation of this provision may result in the denial of any federal funds under the HOME Loan Agreement. If you have any questions or require additional information regarding this letter, please contact Natalie Verlinich, Housing Programs Analyst, at (7 t4) 667-2267 or by email at NVerlinichRsanta-ana.org. Sincerely, Judson Brown Housing Division Manager cc: Kelly Reenders, Community Development Executive Director Natalie Verlinich, Housing Programs Analyst 29A-12