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Judson Brown, City of Santa Ana <br />May 12, 2017 <br />First Street Apartments Financial Feasibility <br />Pace 2 of 7 <br />Eight units will be the recipients of a project -based Section 8 contract awarded through the City of Santa <br />Ana. <br />The Project would contain affordable units as indicated in Table 1, below. <br />Table 1: Proposed Units and Affordability <br />Restriction (AMI) 2 -Bedroom 3 -Bedroom 4 -Bedroom Total <br />30%AMI 29* 4* 1 34 <br />500/.AMI 4 17 21 <br />60%AMI 1 7 5 13 <br />Manager's Unit <br />Total 35 28 6 69 <br />* four 2-bdm 30%AMI unis and 4 3-bdm 30% AMI units will be subject to a Section 8 HAP contract. <br />Table 2: Units Rents <br />Bedroom Size <br />AMI <br />Restriction <br />2017 CTCAC <br />Rent <br />Utility <br />Allowance <br />Net Rent <br />Section 8 <br />Contract <br />Rent <br />2 Bedrooms <br />30% <br />$704 <br />$55 <br />$649 <br />$1,685 <br />2 Bedrooms <br />50% <br />$1,173 <br />$55 <br />$1,118 <br />2 Bedrooms <br />60% <br />$1,408 <br />$55 <br />$1,353 <br />3 Bedrooms <br />30% <br />$813 <br />$63 <br />$750 <br />$2,367 <br />3 Bedrooms <br />50% <br />$1,356 <br />$63 <br />$1,293 <br />3 Bedrooms <br />60% <br />$1,627 <br />$63 <br />$1,564 <br />_ <br />4 Bedrooms <br />30% <br />$907 <br />$71 <br />$836 <br />4 Bedrooms <br />60% <br />$1,815 <br />$71 <br />$1,744 <br />Request for Funds <br />On January 18, 2017, the City notified the Developer that the City had provided a "pre -commitment" for <br />a subordinate loan in the amount $2,600,000. The City's obligation to fund the loan in respect of its pre - <br />commitment is subject to certain conditions, including receipt by the City of a certain In -Lieu Fee <br />payment necessary to fund the loan. <br />The City, through the Housing Authority of the City of Santa Ana, acting as successor agency to the <br />Redevelopment Agency of the City of Santa Ana, has also provided a pre -commitment for a subordinate <br />loan up to the amount of $6,195,000 <br />Financial Plan Analysis <br />We have focused our analysis on a review of the Project's sources and uses in the context of the Project's <br />proposed 9% tax credit financing. In most cases, subordinate financing from public agencies finances the <br />"affordability gap" i.e., the financial gap resulting from the addition of affordable units. In the case of <br />First Street Apartments, the subordinate financing, arguably, is not necessary to close an affordability gap <br />but, rather, it is necessary to finance the financial gap necessitated by the completion for 9% tax credits. <br />CSGIadvisorS SAN FRANCISCO 80AA662 • LOS ANGELES NEW YORK <br />