1. NCSHA Annual Conference Miami, Florida September 26, 2016

2. AGENDA 1.FFB: Background and Program Requirements 2.542c Rule Status 3. FY 2015 and 2016 542c/FFB Loan Volume 4. Examples of Properties Financed through FFB I 2 I

3. Background As a result of stressed capital market conditions and illiquidity during the recession, HFA tax exempt rates and GNMA taxable rates inverted HFA risk share loan volume dropped precipitously Loan volume recovered briefly due to the New Issue Bond Program when Treasury bought HFA issued bonds at a pre-set fixed rate Since that period, standard FHA MAP lending volume on LIHTC properties has increased dramatically I 2 I

4. Under the Federal Financing Bank (FFB) program, Treasury will again fund tax exempt or taxable loans insured under the risk share program, with pricing based on equivalent GNMA rates FFB participation limited to Level I HFAs with an “A” or better rating; HFAs must be in good standing with HUD FFB financing is accessed through the existing 542(c) regulatory framework: – HFAs will use current risk share underwriting standards and processing procedures – HFAs will process environmental reviews – FFB program will be implemented through amendments to existing Risk Share Agreements – In lieu of existing insurance termination provision, HFAs must reimburse FHA for 100% of claim due to fraud or material misrepresentation I 8 I Program Requirements

5. Amendments to existing Risk Share Agreements will define terms of business for mortgage side of FFB program FHA understands that HFAs have periodically requested program waivers; that process will continue under the FFB program FHA will consider regulatory waivers on a case by case basis; interested HFAs should initiate the process as early as possible during loan application processing I 9 I Program Requirements

6. Key points for waiver requests: – ID section(s) of regulation to be waived – Provide reason for waiver – emphasize public benefit and measures to mitigate any increased risk – Include anticipated funding date of loan that’s the subject of the waiver request – Include list of all projects and projected loan dollar volume Refer to FFB Risk Sharing Initiative Program Opening and Participation Criteria at: http://portal.hud.gov/hudportal/documents/huddoc ?id=FFB_Risk_Share_HFA_Letter.pdf http://portal.hud.gov/hudportal/documents/huddoc ?id=FFB_Risk_Share_HFA_Letter.pdf I 10 I Program Requirements

7. FHA is working though the comments received through the Federal Register Notice Finale Notice expected to be issued early next year I 10 I 542c Rule: Current Status

8. I 10 I FY 2015 and FY 2016 542c/FFB Loan Volume Fiscal YearTotal # of Initial Endorsed Loans Total Final Endorsed Loan Amt. In Millions Initial Endorsed Rental Units Total # of Commitments Committed Rental Units Total Committed Loan Amt. In Millions FY 2015 28$111.32,268626,537$487.7 FY 2016 70$778.08,7209311,023$1,104.2

9. 1.IL Housing Dev Authority - Garden House of River Oaks II: 145 unit TE bond/4% LIHTC property in Calumet City, IL; $11,300,000 mortgage funded on 6/22/16 2.NYC Housing Development Company - Sons of Italy: 105 unit TE bond/4% LIHTC property in Brooklyn, NY; $8,295,000 mortgage funded on 6/27/16 3.CA HFA - Park Place Apartments: 142 unit TE bond/4% LIHTC property in Los Angeles, CA; $10,450,000 mortgage funded on 7/2/15 4.CO HFA – Island Grove Village: 108 unit 9% LIHTC property in Greeley, CO; $2,260,000 mortgage funded on 7/2/15 I 10 I Examples of Properties Financed through 542c and FFB