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02/02/1994 17:38 612-336-4565 MSP PAGE 04 <br /> The majority of funding for this property will come in the form of <br /> conventional mortgage loan financing. We anticipate being able to <br /> raise approximately $2,920,000 in long term mortgage loan financing <br /> (63% of costs) . <br /> The remaining funding for this property will come from an equity <br /> investor who will acquire housing tax credits and fund equity <br /> dollars. The federal government provides these tax credits to <br /> investors based on project costs and the number of units that will <br /> be set aside for residents who earn at or below 60% of county <br /> median income ($20,800/year for 1-person households and <br /> $23,800/year for 2-person households) . In order to receive the tax <br /> credits, we must provide a deed restriction stating_ that these <br /> units will remain affordable for 15 years, which we will extend for <br /> an additional 15 years. We anticipate being able to raise <br /> approximately $1,750,000 in equity from the sale of tax credits to <br /> an investor. <br /> In the state of Minnesota, housing tax credits are allocated to <br /> projects based on a competitive application process administered by <br /> the Minnesota Housing Finance Agency (MHFA) . Without the City's <br /> TIF assistance, we would be unable to access tax credit financing, <br /> thus making this project infeasible. In other words, the City's <br /> TIF assistance allows us to leverage approximately $1, 750, 000 in <br /> equity financing that might otherwise not be available. <br /> SIF` CALCD,T Q f <br /> Our preliminary discussions with the Ramsey County Assessor <br /> indicate that the property will generate the following real estate <br /> tax levels, and thus the following tax increment: <br /> Value 80 units X $43 ,000/unit $3,440, 000 <br /> Title II taxes = $320,000 land X 3.4% X 1.4487 = $ 15, 761 <br /> - $3,120,000 building X 2 . 3% X 1.4487 = $ 103. 958 <br /> Total Annual Tax = S 119,719 <br /> SAY S ,..120.000 <br /> let full year tax increment = $ 120. 040 <br /> Current Land Tax (7.628) <br /> Total increment generated = 112, 372 <br /> Requested 1st year TIF assistance = $101 134 <br /> r'. {{t' , PW . , A I f •? „ l R``_` ^Y ::J, , <br />