SR 05:219 - Laserfiche WebLink

part of the annual financial audit of the money available for the Affordability Reserve, 80% will go to the Reserve and 20% will go to BRIDGE as operational incentive. . The developer will be responsible for conducting income certifications consistent with project affordability requirements. Applicant income will be based on current tenant income including wages, pension, and interest income. In the event an applicant owns residential real estate at the time of application, a portion of this asset will be applied to income. The procedural details for determining income will be developed by the developer and the City prior to lease-up. . The developer will use its sole discretion to set service charges for the market units. . The City, the developer and the Management Agent will meet quarterly for the purpose of reviewing project operations and finances. City Loan Ae:reement The City will provide a $2.49 million loan from the Lower Income Housing Fund to the project to meet construction/development costs. The City previously provided a $949,80S Predevelopment Loan that was used to meet a portion of project predevelopment costs including the preparation of construction drawings. As a result, a balance of $1 ,S40, 19S will be paid to the project during the construction period. The Predevelopment Loan anticipates that the $949,80S already paid will be "converted" to the Loan Agreement and as a result, the Predevelopment Loan will be cancelled in favor of the Loan Agreement. The Loan Agreement requires an annual interest only payment of 10% ($249,000) on the $2.49 million loaned for SS years. These payments will be placed in the Lower Income Housing Fund. Loan payments will be made from project surplus cash that is defined as the difference between gross revenues and all operating costs including payments of the COP's. Prior to payments on the City loan, surplus cash will be used to pay the HELP loan, the BRIDGE deferred development fee of $300,000 and operating reserves that are subject to the terms of the COP documents. For the first five years of the project, if there is insufficient cash flow to make the loan payment, the loan payment will be waived. After the initial five years, any unpaid portion will be deferred to subsequent years with no compounding of principal or interest. For example, if there were no loan payments made in year four of the project, the total obligation due in year five would be $249,000. If in year six, the total paid is $149,000 the total due in year seven would be $349,000. However, even though the project's current financial cash flow shows surplus cash available beginning in year one to make the loan payments, because loan payments are dependent upon available surplus cash--which is in turn dependent on vacancy rates and operating expenses--there is the potential that the annual payments will not be paid in full, or at all. SR:05:219 Page 9