80A - HOUSING AND SUBORDINATION LOANS

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Approve Affordable Housing Loans for the Rehabilitation of Cornerstone Apartments September 17, 2019 Page 4 market activities upon which the City has no control, the amount of their loan repayment would have to be reduced accordingly. After receiving Jamboree's request, staff requested Keyser Marston Associates (KMA) to perform an analysis of Jamboree's revised proposal (Exhibit 2). Their analysis concluded that subordinating to the increased senior loan amount of $11,100,000 resulted in a greater benefit for the City and Housing Authority as well as continued to prioritize the rehabilitation needs of the Project. In this scenario, the City would benefit from both a larger loan pay down at closing as well as a higher repayment out of the Project's cash flow as a result of the lower deferred developer paid fee paid out ahead of the City's Loan. Following their analysis, KMA recommends that the City and Housing Authority agree to the revised deal terms. Amended and Restated Affordable Housing Loans As previously mentioned, staff consolidated the forty-three (43) existing affordable housing loans by the source of funds that had been provided by the City and Housing Authority to the Project (Exhibit 7). The ten (10) HOME Loans were consolidated into one set of Amended and Restated HOME Loan Documents and the thirty-three (33) Housing Successor Agency Loans were consolidated into one set of Amended and Restated Housing Successor Agency Loan Documents. Both sets of Loan Documents for each source of funds includes an Amended and Restated: • Loan Agreement • Affordability Restrictions on Transfer or Property • Deed of Trust • Promissory Note As a result, there are now two Loan Agreements for the Project: one Amended and Restated HOME Loan Agreement for $5,128,152 in HOME Program funds and one Amended and Restated Housing Successor Agency Loan Agreement for $2,054,327 in Housing Successor Agency funds. No new funds are being provided to the Project. The Amended and Restated HOME Loan Agreement is attached as Exhibit 3 and the Amended and Restated Housing Successor Agency Loan Agreement is attached as Exhibit 4. Both Loan Agreements have the following basic terms: • $7,182,479 combined principal amount: o $5,128,152 in HOME Program funds (not new funds) o $2,054,327 in Housing Successor Agency funds (not new funds) • 5% simple interest per annum; Repayment from 50% of Residual Receipts (pro-rata with payments due in connection with other financing provided by the City/Housing Authority) (after payment of operating expenses, debt service, any deferred developer fee, and partnership fees to be described in the Agreement) with the remaining 50% to be disbursed to the Developer;