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Judson Brown, City of Santa Ana
<br />May 12, 2017
<br />First Street Apartments Financial Feasibility
<br />Pace 5 of 7
<br />• Permanent Origination Fee, The Chase commitment letter does not indicate a permanent
<br />origination fee.
<br />The "Sources" portion of the table illustrates proposed corrections to certain of the sources.
<br />• Chase: We have evaluated the interest rate and terms contained in the Chase commitment letter
<br />(also taking into account the Developer's indication that the California Community Reinvestment
<br />Corporation (CCRC) may provide the permanent loan) with recent proposals from CCRC as well as
<br />published rates from Citibank. Recent indications from CCRC have been in the 5.65% range
<br />(including for the Santa Ana Arts Collective). Citibank, in its "Citi Community Capital's Multifamily
<br />Housing Indicative Rates and Terms" publication (May 10, 2017) indicates, for a forward commitment
<br />loan for 9% LIHTC project (18yr term, 30-35yr amortization), all -in rates of 5.41% — 5.91 %. We have,
<br />therefore lowered the underwriting rate from 6.5% to 6.0%. The calculation of the permanent loans
<br />is as indicated below:
<br />• City of Santa Ana Inclusionary Funds and Low Income Housing Tax Credit Equity: these two entries
<br />are "toggles" to eliminate the financing gap and maintain the targeted CTCAC tie-breaker.
<br />CSG Base -Budget with Deferred Developer Fee
<br />For this scenario, we have adjusted the sources of the CSG Base Budget to reflect the addition of
<br />deferred Developer Fee. The amount of deferred fee was calculated as the sum of all cashflows in years
<br />1-12. The amount of City loan and Low Income Housing Tax Credit Equity were "toggles" to maintain
<br />the 44.7% tie-breaker target and eliminate financing deficits. A summary of the Scenario follows in Table
<br />4 below.
<br />Table 4: CSG Base -Budget with Deferred Developer Fee
<br />USES
<br />Budget Item Developer CSG Variance Explanation of Variance
<br />Total Development Costs $30,199,000 $29,735,354 ($463,646)
<br />PERMANENT SOURCES
<br />JPMorgan Chase -Perm Loan
<br />Tax Credit Rents
<br />Section 8 Increment
<br />Effective Gross Rents
<br />$806,573 per Developer units In and 5%
<br />$120,977
<br />vacancy)
<br />City ofSanta Ana -Inclusionary Funds
<br />Operating Expenses and Reserves
<br />$38( 0,617)
<br />$0
<br />Net Cash Flow
<br />$425,955
<br />$120,977
<br />DSCR
<br />1.15 (per CHASE commitment letter)
<br />1.15 (per CHASE commitment letter)
<br />Cash Flow Available to Support Debt
<br />$370,369
<br />$105,197
<br />Interest rate/Amortization Term
<br />6.U05yrs
<br />6.0%/35yrs
<br />Loan Amount
<br />$5,413,350
<br />$1,537,459
<br />• City of Santa Ana Inclusionary Funds and Low Income Housing Tax Credit Equity: these two entries
<br />are "toggles" to eliminate the financing gap and maintain the targeted CTCAC tie-breaker.
<br />CSG Base -Budget with Deferred Developer Fee
<br />For this scenario, we have adjusted the sources of the CSG Base Budget to reflect the addition of
<br />deferred Developer Fee. The amount of deferred fee was calculated as the sum of all cashflows in years
<br />1-12. The amount of City loan and Low Income Housing Tax Credit Equity were "toggles" to maintain
<br />the 44.7% tie-breaker target and eliminate financing deficits. A summary of the Scenario follows in Table
<br />4 below.
<br />Table 4: CSG Base -Budget with Deferred Developer Fee
<br />USES
<br />Budget Item Developer CSG Variance Explanation of Variance
<br />Total Development Costs $30,199,000 $29,735,354 ($463,646)
<br />PERMANENT SOURCES
<br />JPMorgan Chase -Perm Loan
<br />$5,109,022 $5,413,350 $304,328 Per above
<br />JPMorgan Chase -Section 8 Loan
<br />$1,451,023 $1,537,459 $86,436 Per above
<br />Reduction to balance budget while
<br />maintaining same approximate CTCAC tie -
<br />City ofSanta Ana -Inclusionary Funds
<br />$2,600,000 $1,986,876 ($613,124) breaker
<br />CSGJadvisors SAN FRANCISCO .6t -t" LOS ANGELES NEW YORK
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