Villa Santa Fe Santa Barbara, CA LIHTC PILOT SAMPLE TRANSACTION

Transaction Overview 167 Elderly Age Restricted Units, Age Units (63%) of 15YR S8 Project Based Vouchers; Units restricted at 50% & 60% of AMI Two separate locations (106 & 61 Units) ~ 8 miles apart $18.0 Million FHA Insured Mortgage 4% LIHTCs & TEBs $5.6 Million of Repairs or $33,605 p/unit 3.15% Interest Rate 35 Year Fully Amortizing Loan ~ 55% LTV

Waivers Approved by HUD Waiver of IPA or CPA reviewed financials at project level, since the Sponsor’s financials were Audited Modification of Ground Lease Addendum, eliminating HUD purchase option, mutually aligned interests, e.g. Affordable Housing Goals Waiver of 20% Repair Escrow, large contingency & PP&B Waiver of Real Estate Taxes, e.g. Ground Lease & LIHTCs

Deal Specific Challenges Scattered Sites Abandoned Oil Wells Technically did not meet all the requirements of one of LIHTC Pilot Criterion, but met portions, e.g. S8, Affordable, New LIHTC Reservation, previously a 221(d)(3) Deduction of Land Value due to Ground Lease, a market value “balancing act” Historical NOI lower than Underwritten NOI, due to recent increase in the S8 Rent

Timing Application Submittal – 12/14/2012 Firm Commitment Issuance – 03/12/2013 Closing – 06/10/2013* Delays were due to a change in the LIHTC Investor post commitment issuance and an significant increases in the total transaction costs.