2 Community Development Financial Institution – Loan Fund – Credit Union Community Development Intermediary Policy Center – Started in 1994 – 120,000 individuals assisted – $1.6 billion in financing -Arkansas, Louisiana, Mississippi and Tennessee HOPE Overview

Program Impact Summary Commercial Lending 67% of loans made to companies located in economically distressed areas Nearly half (47%) of all loans were made to women or minority owned businesses Mortgage Lending 91% of the mortgages closed were made to borrowers who are minorities, women, low- income or located in an economically distressed community 63% of mortgages were made to borrowers with incomes < 80% of the state AMI 71% of mortgages went to ethnic minority owners 80% of mortgages were for first-time home owners Consumer Lending 59% of direct loans were payday alternative or credit builder loans 56% of direct lending occurred in economically distressed communities

RAD Development Local HA owns the current property and units 85 Unit Rehab built in 1960 Total Units owned by HA is 150 Partnership with a for-profit development group – HA will become 51% GP in new LLC HA will manage the property after rehab Regional HA will provide the vouchers

Development Budget Sources – First Mortgage$ 900,000 – Housing Tax Credits$ 6,000,000 – HA soft loan$ 850,000 – HOME funds$ 750,000 – FHLB AHP Grant$ 500,000 – Total Sources$ 9,000,000

Total Uses Land$ 166,500 Building Acquisition$ 1,523,500 Construction Hard Cost$ 4,600,000 Construction Insurance$ 230,000 Construction soft costs$ 130,000 Architect/Design$ 260,000 Construction Interest$ 130,000 Construction loan fee$ 60,000 Legal Fees (owner)$ 190,000

Total Uses Operating Reserves$ 250,000 HTC Reservation and fees$ 280,000 Other Legal$ 80,000 Other Contingency$ 60,000 Accounting$ 20,000 Marketing/lease up$ 20,000 Developer’s Fee $ 1,000,000 Total$ 9,000,000

Construction Soft Costs Bond$ 46,000 Survey$ 15,000 Market Study$ 20,000 Appraisal$ 5,000 Engineering$ 15,000 Relocation$ 15,000 Misc. Professional$ 10,000

Cash Flow Income Rental Revenue$ 460,000 Misc. Revenue$ 15,000 Vacancy $ (24,000) Rental Revenue$ 451,000

Cash Flow Expenses Salaries$ 95,000 Management Fee$ 27,500 Office Supplies$ 1,000 Professional Fees$ 10,000 Telephone$ 2,000 Administrative Expenses$ 5,000 Repairs and Maintenance$ 100,000 Utilities$ 6,500

Cash Flow Expenses Taxes$ 23,000 Insurance$ 49,000 Total$ 319,000 Income from Operations $ 132,000 Debt Service$ 70,000 Excess Cash$ 62,000 Debt Service Coverage1.8

Things to note and pay attention to HA’s own land and property HA’s typically have good management already in place Through RAD, HA’s have access to vouchers All of these are valuable to HTC developers Obviously can be done as straight rehab without HTCs also, with or without an outside developer.

What Hope Can Offer Permanent Financing – Relatively small, under $2 million, perm loans – 30 year amortization/15 year balloon notes – Fixed rates for 15 year term – Relatively easy application and closing process