80B - JOINT - AFFORDABLE HOUSING FUNDS AMCAL

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AMCAL 1440 Santa Ana Fund, L.P. December 20, 2016 Page 2 development to be located at 2001 East Dyer Road, Santa Ana, California (the "In -Lieu Fee"). The Developer and the City agree that this pre -commitment from the Agency for a loan of up to $6,195,000 from the LMIHAF held by the Housing Successor Agency releases the City of its commitment of the same amount in the conditional, pre-cormniarrent loan approved by City Council on April 19, 2016 from funds to be received by the City from the In -Lieu Fee at a fature date. As such, the conditional, pre -commitment loan of up to $8,795,000 approved by City Council on April 19, 2016 will be reduced to a conditional, pre -commitment loan of $2,600,000, subject to the conditions described in the conditional, pre-cotmnitment letter issued to the Developer on May 31, 2016. The Developer's Project is intended to serve, in part, a target population of Very -Low and Extremely -Low Income persons using LMIHAF from the Agency, pursuant to California Health and Safety Code Section 34176.1. Section 34176.1(a)(3)(B) requires that the Agency must require at least 30% of the LMIHAF to be expended for development of rental housing affordable to and occupied by households earning 30% or less of the, Area Median Income ("AMI"). If the Agency fails to comply with the Extremely -Low Income :requirement in any; five-year report, then the Agency must ensure that at least 50% of the funds remaining in the LMIIIAF be expended in each fiscal year following the latest fiscal year following the report on households earning 30% or less of the AMI until the Agency demonstrates compliance with the Extremely -Low Income requirement. In order for the Agency to meet this five-year Extremely Low Income Test, the, Agency and the Developer have mutually agreed that at least 50% of the units in the project will be affordable to and occupied by households earning 30% or less of the AMI. The Agency Loan, should it be issued, will have the following terms: • $6,195,000 principal; amount, oras much thereof as is disbursed for acquisition costs and hard and soft costs in constructing the Project;' • 3% simple interest per annum; • Repayment from 50% of Residual Receipts (pro -rata with payments due in connection with other financing provided by the City) (after payment of operating expenses, debt service, any deferred developer fee, and partnership fees to be described in the Agreement) with the remaining 50% to be disbursed to the Developer; • Remaining, principal and accrued interest due upon the 55th anniversary of the issuance of Certificate of Occupancy and/or final building permits or earlier upon sale, refinancing or default. Additionally, the Agency will receive 50% of the net proceeds received from any sale or refinancing of the Project, after payment of outstanding debt and payment in full of any deferred developer fee and establishment of any reserves and transaction costs; and • Cost savings from the Project, if any, will be applied first to pay down the Loan, subject to compliance with the Tax Credit Allocation Committee ("TCAC") Regulations and California Health and Safety Code.