1. Financing Solutions for the Illinois Housing Market
Andrew DeCoux
Director, Multifamily Financing
October 17, 2017

2. Resources Lender with a strong “social purpose” to meet IHDA’s mission
Gap Financing
First Mortgage Lending
“One-Stop Shop” Approach
Shift from 9% LIHTC to 4% Bond Deals
$65 million per year (average)
2015 $305 million
2016 $205 million
2017 $200+ million (pipeline)
Primary administrator of regulated affordable housing in IL
Illinois Affordable Housing Trust Fund
HOME Investment Partnership Program
Illinois Affordable Housing Tax Credits
Federal Low Income Housing Tax Credits

3. Current Market Challenges
Limited subordinate resources to fill gaps
More than 40% reduction in HOME funds to IHDA
Anticipated rise in interest rates
Permanent rates tied to 10-Year Treasury rate
Rates are up ~56bps from a year ago (2.33% vs 1.77%)
Construction rates tied to 1-Month LIBOR
Rates are up ~68bps from a year ago (1.23% vs 0.53%)
Higher construction costs
Materials and labor costs have been increasing 10%+
Tax reform uncertainty & LIHTC pricing
Rule of Thumb: for every 1% reduction in tax rates, LIHTC pricing is reduced by $0.01/credit.

4. First Mortgage Lending
Construction to permanent loan for 4%, 9%, acquisition, and refinancing of affordable housing developments.
Loans are credit enhanced w/ HUD Risk-Sharing (Section 542(c)).
Federal Financing Bank (FFB) Mortgage:
Partnership between U.S. Treasury, HUD & eligible HFAs
Terms up to 40-years (fully-amortizing)
DSC as low as 1.11 & LTV as high as 90%
IHDA rate as of 10/12/17 (35-year): 4.08% (all-in, immediate)
Credit Advantage & Affordable Advantage Mortgages:
Provide construction and permanent loan financing for LIHTC projects, stabilized new construction, refinance, or acq/rehab
Maximum loan amount of $10 million
Rates as of 10/12/17 (35-year): 5.20% (immediate) 5.75% (24-month forward)

5. IHDA One Stop PLUS GOAL – MAXIMIZE PERM LOAN PROCEEDS
Fixed rate terms with a long-term, fully-amortizing loan
FFB permanent loan funds at initial closing while simultaneously closing on a short-term Credit Advantage tax-exempt loan
Underwriting Terms:
Non-recourse
DSC as low as 1.11 & LTV as high as 90%
Hard costs up to $40,500/unit w/ one major system replacement
35-year term and amortization
10-year lockout, then fully pre-payable
Must meet minimum LIHTC restrictions for duration of loan term:
20% of units at 50% of AMI, or
40% of units at 60% of AMI

6. IHDA One Stop PLUS

7. Additional Information
IHDA Loan Products & Rates:
IHDA Bond Programs:
LIHTC:
IHDA Subordinate Resources:
IHDA Developer Resource Center:

8. Financing Solutions for the Illinois Housing Market
Andrew DeCoux
Director, Multifamily Financing
October 17, 2017