80A - AFFORDABLE HOUSING POLICIES

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EXHIBIT 1 HOME Investment Partnerships Program Source of Funds Funding for this Program is provided through the U.S. Department of Housing and Urban Development (HUD) HOME Program (including program income and residual receipts), and therefore is subject to the federal rules and regulations found in 24 CFR Part 92, as amended from time to time. Eligible Borrowers/Grantees Eligible borrowers are nonprofit Housing Development Corporations (HDC's) duly organized to promote and undertake community development activities on a not-for-profit basis, and which have a valid 501(c)(3) or (4) designation from the IRS, or for-profit housing developers or development corporations, with proven capacities to develop, own, and operate affordable housing. Limited partnerships whose general partners are otherwise eligible under the above are also eligible to borrow Program funds. Eligible Proiects Projects eligible for HOME funding shall: (1) be rental projects located in the City of Santa Ana; (2) contribute to the achievement of the City's Strategic Plan and fair housing goals; (3) involve 4 or more apartments which will be rented to eligible lower income households at rents that do not exceed rents as defined by 24 CFR 92.252, as amended from time to time. Projects serving persons with special needs, or where the City Manager finds that the project will provide a substantial public benefit, may have fewer than four units. Transitional or permanent supportive housing may be provided (but not temporary shelters). (4) have at least 20% of the HOME -assisted units rented to very low-income families (50% of median income) under the terms and conditions set forth in 24 CFR 92.252 (2)(b); (5) demonstrate financial feasibility -- including the ability to maintain rents for the subsidized units at affordable levels for the periods specified in 24 CFR 92.252; (6) be free of significant adverse environmental impacts, except those that can be mitigated through the project itself; (7) minimize tenant displacement; (8) comply with all local building and zoning codes and standards, including energy efficiency and water conservation standards, and meet housing quality standards in Section 882.109 of Title 24. Newly constructed housing must meet the current edition Model Energy Code of the Council of American Building Officials; (9) make efficient use of public funds and avoid "layering" of subsidies beyond those necessary to achieve a financially feasible project; and, (10) have at least 51 % of the project space be residential, if in a mixed use project. Eligible Uses and Activities HOME funds may only be used to finance new construction or acquisition and/or rehabilitation of rental housing which is affordable to very low and low-income households as defined by 24 Affordable Housing Funds Policies and Procedures 80A-32 Page 28