Rental Assistance Demonstration (RAD) Overview Moderator: Terri Anderson, Anderson Development & Construction, LLC Panelists: Don Bernards, Baker Tilly Virchow Krause, LLP William Lavy, HUD Catalina Vielma, National Equity Fund, Inc. Mark Ragsdale, PNC Real Estate Jeff Weiss, Alden Torch Financial LLC

Background The Solution The Problem Deferred public housing capital repair needs. 2010 estimate in excess of $25.6B across the portfolio (>$23k per unit) Public housing platform creates barriers to accessing private capital 10,000-15,000 public housing units lost each year Multifamily “legacy” program properties at risk of loss of affordability The Solution RAD created in FY2012, expanded in FY2015 & FY 2017 Allows public housing and at-risk legacy properties to convert to long-term Section 8 Housing Assistance Payment (HAP) contracts HAP contracts facilitate new financing and preserve affordability Background

RAD Program Structure Rent Supplement Rental Assistance Payment Public Housing Section 8 Moderate Rehabilitation McKinney Vento Single Room Occupancy (SRO) RAD Conversion PBRA (Section 8 Project-Based Rental Assistance) PBV (Section 8 Project Based Voucher) Program rules set forth in PIH Notice 2012-32 Rev 3

Status: Public Housing Conversions 63,765 public housing units converted from Public Housing to Section 8 $4.07 Billion (>$60k per unit) in construction investment PHAs would have needed 46 years to accumulate enough public housing Capital Funds to complete a similar amount of construction. 39,000 Construction Trade Jobs generated and an additional 36,000 indirect jobs induced in the surrounding local economies. 225,000 Units awarded/reserved under the existing cap (recently increased by 40,000 units in FY 17 Approps Act) 29,000 units on the waiting list

Financing Public Housing Conversions 44% of transactions involve significant work – from $25K to new construction 42% of transactions involve either 4% LIHTC or 9% LIHTC A major driver of the deeper-investment transactions, particularly those using 4% LIHTC, is accessing the value of the existing real estate (most significantly, by tapping into acquisition credits). * Data through June 16, 2017. PH RAD Status

Status: Legacy Program Conversions Conversions & Outstanding Pipeline Rent Supp/RAP Transactions: 33 properties remaining in portfolio 21 active transactions in the RAD 2 Pipeline 17 properties have contracts that expire in 2017 We hope to wind down the Rent Supp & RAP programs in the next few years Mod Rehab Transactions: 9 active transactions in the RAD 2 Pipeline 3 applications in process Substantial opportunities for Mod Rehab properties NOTE: Data derived from RAD 2 closed transactions only through June 15, 2017. Legacy Program Conversions

FY 18 Budget Proposals Eliminate the cap on the public housing units that can convert at no cost and eliminate application deadline Allow Section 202 Project Rental Assistance Contracts (PRACs) to convert under 2nd Component at no cost Authorize a tenant’s right to continued occupancy under the 2nd component Align ownership and control requirements in tax credit partnerships and in the event of foreclosure, bankruptcy, or default with baseline standard