1. RAY LANDRY DAVIS-PENN MORTGAGE CO. What’s New with HUD Processing

2. Transformation Transformation of the Ft. Worth HUB is complete  Houston and San Antonio Production Offices were eliminated Single Underwriter Model now in place for all loan programs Processing times greatly reduced  221(d)4 New Construction or Substantial Rehabilitation – 54 days  223(f) LIHTC Pilot – 38 days  Rehabs up to $40,000/unit for 90%+ HAP Properties and Year-15 LIHTC Re-syndications  New Construction deals to be added to the Pilot in the near future

3. 2015 MAP Guide More lenient underwriting requirements  221(d)4 – 1.15:1 Debt Coverage Ratio and 87% of Mortgagable Costs  1.11:1 Debt Coverage Ratio for 90%+ HAP Properties  223(f) LIHTC Pilot – 1.15:1 Debt Coverage Ratio and 87% of Appraised Value

4. Affordable Housing Real World Affordable Housing  A LIHTC 4% Tax-exempt Bond transaction does not work in any Texas market without some type of subsidy, grant or tax abatement What can the HFC or HA do to eliminate or reduce that gap  By becoming a member of the General Partner entity, the development Partnership is exempt from sales taxes on construction materials  150 units X $125,000/unit Construction Cost= $18,750,000 X 65% Materials Cost X 8.25% Sales Tax = $1,005,469  By owning the development site and leasing it to the Partnership, the property is exempt from property taxes

5. Property Tax Exemptions Austin - $800/unit  150 Units X $800 / 5.502642% = $2,180,771 in additional mortgage proceeds Brownsville - $680/unit - $2,029,277 additional mortgage proceeds Dallas - $720/unit - $1,962,694 additional mortgage proceeds Houston - $1,030/unit - $2,807,742 additional mortgage proceeds Laredo - $935/unit - $2,548,776 additional mortgage proceeds Tyler - $535/unit - $1,458,390 additional mortgage proceeds

6. Questions Ray Landry Davis-Penn Mortgage Co. 12650 N. Featherwood, Suite 120 Houston, Texas 77034 (281) 481-2400 rayl@davispenn.com