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W01006 Judson Brown, City of Santa Ana May 12, 2017 First Street Apartments Financial Feasibility Page 2 of 7 Eight units will be the recipients of a project -based Section 8 contract awarded through the City of Santa Ana. The Project would contain affordable units as indicated in Table 1, below. Table 1: Proposed Units and Affordability Restrict_,_�___fotrL{AM 11. 11edroom &aedroom $_Badroem law 30%AMI 29* 4* 1 34 50°%AMI 4 17 21 60%AMI 1 7 5 13 Manager's Unit 1 1 Total 35 2B 6 69 "four 2•bdm 30%AMI unls and 4 3-bdm 30% AMI units will be subject to a Section 8 HAP contract Table 2: Units Rents section 8 AMI 2017 CTCAC Utility Contract 46adrooms 604E $1,815 $71 $1,744 Request for Funds On January 18, 2017, the City notified the Developer that the City had provided a "pre -commitment" for a subordinate loan In the amount $2,600,000, The City's obligation to fund the loan In respect of its pre - commitment is subject to certain conditions, including receipt bythe City of a certain In -Lieu Fee payment necessary to fund the loan. The City, through the Housing Authority of the City of Santa Ana, acting as successor agency to the Redevelopment Agency of the City of Santa Ana, has also provided a pre -commitment for a subordinate loan up to the amount of $6,195,000 Financial Plan Analysis We have focused our analysis on a review of the Project's sources and uses In the context of the Project's proposed 9% tax credit financing. In most cases, subordinate financing from public agencies finances the "affordability gap" i.e., the financial gap resulting from the addition of affordable units. In the case of First Street Apartments, the subordinate financing, arguably, is not necessary to close an affordability gap but, rather, his necessary to finance the financial gap necessitated by the completion for 9% tax credits. csaladvlsors SAN FRANCISCO LOS ANGELES I NEW YORK