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Judson Brown, City of Santa Ana February 10, 2025 <br />Habitat Wellington – Preliminary Financial Gap Analysis Page 12 <br /> <br /> 2412002v3.SA.TRB <br /> 19090.018.035 <br /> <br />However, this calculation is provided for illustrative purposes only at this time. The calculation <br />will need to be conducted at the time of sale of each unit and must be based on the actual <br />appraised value and affordable sales prices at the time of sale. <br />Affordable Sales Price Differential <br />Furthermore, it is important to note that there typically needs to be a sales price differential <br />between the market rate sales price and the affordable sales price in order to entice <br />homebuyers to accept an affordability covenant. <br />The following illustrates the price differential based on the currently estimated market rate <br />sales affordable sales prices: <br /> Moderate Income Units <br /> One-Bedroom <br />Units <br /> Two-Bedroom <br />Unit <br />Market Rate Sales Price $345,600 $389,700 <br />(Less) Affordable Sales Price (310,400) (350,500) <br /> Price Differential $35,200 $39,200 <br />% of Market Rate Sales Price 10% 10% <br /> <br />Ultimately, the silent second mortgage and sales price differential calculations will occur once <br />sales of the units commence. At that point, the appraised market values of the homes and the <br />defined Affordable Sales Prices will be utilized to determine the silent second mortgage <br />amounts and any possible affordable sales price reductions that are necessary to entice <br />affordable homebuyers. <br />CONCLUSIONS / RECOMMENDATIONS <br />The following summarizes the conclusions of the KMA analysis: <br />1. City Financial Assistance: <br />a. Down Payment Assistance Program Allocation: <br />EXHIBIT 3 <br />  <br />  <br />City Council 9 – 24 7/1/2025