Adding Value to New Orleans East Old Morrison Homes Adding Value to New Orleans East

Old Morrison Homes Old Morrison Homes Overview Earning Equity Tax Credit Overview Benefits of Development VOB Tax Credit Experience Community Partner Commitment

Old Morrison Homes Overview 36 Single Family Homes 21 3br ($800/mo) & 17 4br ($900/mo) Homes 1675 Average Sq Ft $180,000 Cost/Home, ~$200k Average Retail Value Lease-Purchase Program (65% minimum of payments will go toward purchase of home after 15 years) Professional property management onsite, no absentee landlord All tenants must meet strict criteria and be screened 3,000 sf Community Center will be constructed Developers are responsible for all maintenance, taxes & property insurance over 15 year compliance period.

Earning Equity Assume 2/3 (66%) of monthly payments will applied to the purchase price. Assume monthly payments total $150K over the 15 year leasing period and price of home is $200,000. Thus, in year 16 $100K (that is, 2/3 * $150K  $100K) is applied to mortgage principal of $200K. Also after 15 years, only $100K remains to be owed on the home. After 15 years, at an average increase of 2.5% in the valuation of the home (i.e. increased equity), the $200K home would be worth $289,000K. Therefore, the resident with only $100,000 remaining on the mortgage principal would realize an equity in excess of $189K in year 16.(SEE TABLE)

Earning Equity (EXAMPLE) Year Value of Home (Assumption of 2.5% increase in value) 1 $200,000 2 $208,000 ……… 15 $264,000 16 $289,000 In Year 16, resident owes ONLY $100,000 on home worth $289,000 Thus, resident earns $189,000 in equity in Year 16.

Old Morrison Homes Overview

Tax Credit Overview Purpose Process Income Requirements of Tenants Property Management Guidelines Onsite Management Resident Acceptance Criteria Community Development Opportunity

Resident Profile = Working Class Occupation Average Salary Teacher $31,000 Police $35,500 Paralegals $28,000 Retiree $24,000 Fireman $30,000 Office Workers $25,000

VOB Tax Credit Experience 6 Tax Credit developments completed and under management in MS and TN 4 Tax Credit developments 90% complete in LA, MS and TN 4 Tax Credit developments under construction 4 Tax Credit developments in pre-development phase in LA and MS

VOB Tax Credit Experience All existing properties are positive influences on neighborhoods Example: Riverbend – uptown area of Memphis Tax Credit program was a component of huge economic growth As residents moved in, New Markets Tax Credits and other revitalization investments were made

VOB Development properties Chattanooga, TN Memphis TN Canton, MS Jackson, MS Baton Rouge, LA

Benefits of Development New Development in N.O. East Increased population to benefit retail revitalization Lease-Purchase incentive program to spur home ownership Lease-Purchase is great alternative tool given current economic conditions Maintain/Increased value of avg home in area Spurring economic development/jobs in area

Community Partner Commitment Tenant Selection & Screening Process Onsite Management – No Absentee Landlord Home Ownership Education Program Home Owners Association Partnership VOB will continue reinvest in the New Orleans area Core Old Morrison team is from N.O. East and is committed to its recovery

Adding Value to New Orleans East Old Morrison Homes Adding Value to New Orleans East