Midwest Lenders Conference Acting Director, Office of MF Production September 5, 2018 Patricia Burke Acting Director, Office of MF Production

Basic FHA Multifamily Programs Endorsements (Closings) Actual FY 2017 and Projected Fiscal Year 2018 Annualized data as of 8/25/2018

221d4 New Construction/Sub Rehab – Endorsements (Annualized 2018 based on data to 8/25/18)

223f & A7s Refinancings – Endorsements (Annualized 2018 based on data to 8/25/18)

% change in $ volume from FY2017 Basic FHA Multifamily Programs Firm Commitments Projected for Fiscal Year 2018 Annualized data as of 8/25/2018 Program # of loans Volume ($ Millions) % change in $ volume from FY2017 New Constr/Sub Rehab 272 $6,687 320% 223(f) 504 $7,588 -7% 223(a)(7) 64 $870 -60% TOTAL 840 $15,712 -1% This slide demonstrates the previous point, with overall steady volume, a decrease in 223(a)(7) volume and an increase in our Section 221(d)(4) and other New Construction / Sub Rehab programs.

PRE-DECISIONAL, PROPRIETARY, and CONFIDENTIAL LIHTC – FHA Production 221d4, 223f, A7, 241a and Other & Risk Share (excl. Health Care) Firm Commitments Tax Credit Production – MF FHA Basic and Risk Share FY16 FY17 FY18 (annualized based on YTD 8/25/18) # of Projects 322 372 335 $ Volume $3.1 Billion $3.8 Billion $4.1 Billion # of Units 45,565 53,445 49,305 4/15/2015 PRE-DECISIONAL, PROPRIETARY, and CONFIDENTIAL

Incoming Pipeline Basic MF FHA programs – FY 2016 to 8/25/18 Here are the numbers in terms of incoming pipeline. 4/15/2015 PRE-DECISIONAL, PROPRIETARY, and CONFIDENTIAL

Incoming Pipeline Basic MF FHA programs – FY 2016 to 8/25/18 Here are the numbers in terms of incoming pipeline. 4/15/2015 PRE-DECISIONAL, PROPRIETARY, and CONFIDENTIAL

Hit Ratio – how likely to get approved (note: Some deals get Final Reject, then are reworked and resubmitted as new applications and ultimately do get approved – thus, HUD and Lender get to work on it twice. This is obviously inefficient.) Program / Stage # of decisions made - FY16, during the MF Transformation % approved (the rest were either rejected or owner withdrew) # of decisions made - FY17, Post-MF Transformation 223(a)(7) - FIRM 177 95% 93% 223(f) - FIRM 453 89% 595 92% NewC/Sub Rehab PREAPP 223 48% 356 42% FIRM 230 88% 247 91% This slide shows “Hit Ratios” – the % that are not rejected or withdrawn. Firm Commitments show a steady improvement, Preapps show a deterioration. The lesson learned is that we have tightened up on Environmental compliance, and are concerned about excess supply. Lenders should think about this.