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Pre-Commitment of $920,000 in Affordable Housing Funds for Habitat for Humanity of Orange County July 1, 2025 Page 3 5 1 5 7 conditions and requirements that must be met before a full commitment can be issued in the form of a Memorandum of Understanding (MOU). The purpose of the pre- commitment letter is to award these program funds to the developer in compliance with the City’s adopted Affordable Housing Funds Policies and Procedures last amended by City Council on August 18, 2020. The letter states the maximum amount of program funds reserved for the project and lists all of the additional conditions, documents, and steps that must be taken before staff will return to City Council with the MOU. Specifically, this project involves the conversion of an existing nine-unit apartment building into condominiums, which will be made available for homeownership to Low and Moderate-Income households earning less than 120% of the AMI. Habitat for Humanity currently owns the apartment building and purchased it after the building was rehabilitated in May 2024. The building includes one two-bedroom unit and eight one- bedroom units, each with a single bathroom. Unit sizes range from 420 to 846 square feet and are move-in ready. The building recently underwent over $1 million in renovations, which included new flooring, electrical upgrades (new outlets and fixtures), updated kitchen cabinets, and complete bathroom remodels. Doors, windows, shutters, garage doors, stairways, and railings were restored or replaced as needed to meet code compliance. Current residents of the property with household incomes of less than 120% AMI and that qualify to purchase a unit within the Property will be given the right of first refusal to purchase a unit at an affordable purchase price (eight of the nine units are currently occupied). KMA estimates the moderate income affordable sales prices at $310,400 for the eight (8) one-bedroom units and $350,500 for the one (1) two-bedroom unit. The allocation of $720,000 to the City’s Down Payment Assistance Program will be available for down payment assistance to individual households to purchase a unit, structured as a silent mortgage based on homebuyer eligibility. Homebuyers must meet the eligibility requirements for Habitat for Humanity’s Affordable Homeownership Program with a residency preference for local workers and residents of Santa Ana in accordance with Santa Ana Municipal Code Section 8-3500. The conditional award of up to $200,000 for eligible relocation costs will be available upon a determination by the City that the Project is subject to relocation benefits under California Government Code §§7260 or 66300.6. The specific amounts utilized for relocation benefits will be based on actual amounts determined immediately prior to the relocation of existing tenants. The City and Habitat for Humanity will enter into a Memorandum of Understanding ("MOU") that sets forth the terms under which the City will provide the homebuyer Down Payment Assistance and conditional relocation award. The MOU will specify that the project is not undertaken by the City and is not in furtherance of a City program. Rather, the MOU is a response to Habitat for Humanity’s request for financial assistance to enhance affordability for qualified homebuyers by providing homebuyer Down Payment Assistance through an existing City program. The MOU will require that Habitat for Humanity execute an affordable housing covenant to offer the nine (9) affordable units City Council 9 – 3 7/1/2025