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Judson Brown, City of Santa Ana May 12, 2017 First Street Apartments Financial Feasibility Pace 5 of 7 • Permanent Origination Fee. The Chase commitment letter does not indicate a permanent origination fee. The "Sources" portion of the table illustrates proposed corrections to certain of the sources. • Chase: We have evaluated the interest rate and terms contained in the Chase commitment letter (also taking into account the Developer's indication that the California Community Reinvestment Corporation (CCRC) may provide the permanent loan) with recent proposals from CCRC as well as published rates from Citibank. Recent indications from CCRC have been in the 5.65% range (including for the Santa Ana Arts Collective). Citibank, in its "Citi Community Capital's Multifamily Housing Indicative Rates and Terms" publication (May 10, 2017) indicates, for a forward commitment loan for 9% LIHTC project (18yr term, 30-35yr amortization), all -in rates of 5.41% — 5.91%. We have, therefore lowered the underwriting rate from 6.5% to 6.0%. The calculation of the permanent loans is as indicated below: Tax Credit Rents Section 8 Increment Effective Gross Rents $806,573 per Developer units mix and 5% $120,977 and Reserves commitment letter) 1.15 $1 Cash Flow Available to Support Debt $370,369 $105.197 Interest rate/Amortization Term 6.0%/35yrs 6.0%/35yrs Loan Amount $5,413,350 $1,537,459 City of Santa Ana Inclusionary Funds and Low Income Housing Tax Credit Equity: these two entries are "toggles" to eliminate the financing gap and maintain the targeted CTCAC tie-breaker. CSG Base -Budget with Deferred Developer Fee. For this scenario, we have adjusted the sources of the CSG Base Budget to reflect the addition of deferred Developer Fee. The amount of deferred fee was calculated as the sum of all cashflows in years 1-12. The amount of City loan and Low Income Housing Tax Credit Equity were "toggles" to maintain the 44.7% tie-breaker target and eliminate financing deficits. A summary of the Scenario follows in Table 4 below. USES Table 4: CSG Base -Budget with Deferred Developer Fee Budaet Item Developer CSG Variance Explanation of Variance Total Development Costs $30,199,000 $29,735,354 ($463,646) PERMANENT SOURCES JPMorgan Chase -Perm Loan $5,109,022 $5,413,350 $304,328 Per above i JPMorgan Chase -Section 8 Loan $1,451,023 $1,537,459 $86,436 Per above Reduction to balance budget while maintaining same approximate CTCAC tie - City of Santa Ana -Inclusionary Funds $2,600,000 $1,986,876 ($613,124) breaker CSG Iadvisors SAN FRANCISCO-80A7S66 LOS ANGELES NEW YORK