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EXHIBIT 1 <br />The requested City loan for a project shall not exceed the total amount of the gap between the <br />maximum affordable mortgage amount available from non -City sources plus funds available <br />from other sources of public subsidy, and the total development costs plus any on-going annuity <br />necessary to maintain affordable rent levels as defined in the Proposal. <br />All assisted units must maintain rents that do not exceed the Maximum Affordable Rent, as <br />defined in the Loan Documents, for the life of the loan in accordance with the terms of the loan <br />or other recorded Covenants. Syndicated projects must be structured such that ownership can <br />feasibly be acquired by the nonprofit General Partner at the end of the term of the limited <br />partnership agreement, when appropriate. When determining the maximum City loan, the real <br />estate advisor will review the rent schedule and annual cash flows to determine whether long- <br />term affordability is maintained. In cases where a rent subsidy program is used and the <br />mortgage is calculated on the basis of the subsidized rents, an "affordability reserve" may be <br />required, where the amount of the reserve shall be sufficient to cover the difference between <br />affordable rents and the subsidized rents. <br />Developer Fee <br />For new construction, acquisition and rehabilitation projects utilizing Low -Income Housing Tax <br />Credits, the developer fee shall not exceed the maximum fee allowed by the California Tax <br />Credit Allocation Committee. The Housing Division Manager may require the developer to <br />defer a portion of their developer fee, based upon an analysis by the real estate advisor, to make <br />the project feasible, reduce the amount of Program funds being requested for the project, or both. <br />Developer Capacity <br />Applicants must demonstrate the capacity to successfully develop the proposed project. The City <br />shall evaluate capacity on the basis of the Applicant's track record in developing and managing <br />affordable housing, or inclusion of development team members with a successful record in <br />developing such housing. In addition, Applicants must demonstrate the financial and legal <br />capacity to undertake the proposed project. <br />Clear Title <br />The Applicant shall have the responsibility to obtain clear title to the property. As soon as <br />feasible, the Applicant will submit a preliminary title report for City review and written approval. <br />Staff shall review the state of title, including the conditions, covenants, restrictions, and legal <br />description of the property. In the case of title issues, the Applicant shall correct the state of title <br />and remove all exceptions to the title not consented to by the City before the City closes the loan. <br />Senior Financing <br />The Applicant shall secure other resources such as equity from syndication proceeds, tax exempt <br />financing, federal and state housing rental and development subsidies and available private <br />financing to minimize the amount of the City loan. The Applicant will submit to the City the <br />terms and conditions of all non -City financing as well as equity contributions for review. The <br />Affordable Housing Funds Policies and Procedures Page 14 <br />FOODINFOO <br />