1. SHARK TANK – 9% DEVELOPMENT PRESENTATION HARBOUR NORTH APARTMENTS – CHESAPEAKE, VA The Lawson Companies 373 Edwin Drive Virginia Beach, Virginia 23462 Strictly Private and Confidential

2. A GENDA Agenda  The Lawson Companies’ Experience  Site Location & Photos  Property Summary  Financing Pro Forma  Issues – The Good, The Bad, & The Hairy

3. E XPERIENCE The Lawson Companies’ Experience  Established in 1972  Full-service real estate firm  Manages over 5,000 apartments from Virginia to South Carolina  Developed one of the first LIHTC communities in the State of Virginia in 1988  Received allocation of tax credits for 18 communities  In-house Tax Credit Compliance Department

4. SITE LOCATION & PHOTOGRAPHS

5. Arial Photograph

6. S ITE L OCATION & P HOTOGRAPHS Arial Photograph – Proposed Site

7. S ITE L OCATION & P HOTOGRAPHS Harbour North Apartments – Pre-rehab

8. S ITE L OCATION & P HOTOGRAPHS Harbour North Apartments – Pre-rehab

9. S ITE L OCATION & P HOTOGRAPHS Harbour North Apartments – Pre-rehab

10. PROPERTY SUMMARY

11. Harbour North Apartments Development Proposal  Acquisition/rehab of two 120-unit existing Rural Development communities built in 1978 and 1979 in Chesapeake, Virginia.  Utilize 9% Low-Income Housing Tax Credits  Refinance and re-amortize existing RD debt  Add new VHDA debt  Physical Features  Thirty buildings, two stories in height, eight units in each building  192 - 1BR apartments  48 - 2BR apartments  Rental office, laundry room, maintenance shop  Add new community center including a computer learning office  ADA - convert 24 apartments to fully-accessible units with universal design features  EarthCraft  In a Revitalization Area, not a QCT

12. FINANCING PRO FORMA

13. Financial Information  Rents  40% of AMI  24 – 1BR (553 SF) - $410  50% of AMI  24 – 1BR (600 SF) - $525  96 – 2BR (698 SF) - $645  96 – 2BR (745 SF) - $645  Operating Expenses  $5,000 per unit per annum  Security budget $115,000 (almost 10% of annual OPEX budget)  Insurance – Excess and Surplus Mkt + Flood Insurance  Loans – 25-year amortization  Refinanced RD Debt - $1,985,744 (Rate – 1%)  New SPARC/REACH Loan - $1,000,000 (Rate – 2.95%)  New VHDA Taxable Bond - $3,100,000 (Rate – 6.92%)  Cash Flow After Debt Service - $75,102

14. F INANCING P RO F ORMA Sources and Uses Total Per Unit SOURCES OF FUNDS First Mortgage $3,100,000$12,917 SPARC Mortgage $1,000,000 $4,167 Assume RD Mortgage $1,985,744 $8,274 Deferred Dev Note $909,410 $3,789 Return from Sale of Investor Tax Credits $9,091,419$37,881 TOTAL SOURCES OF FUNDS $16,086,573$67,027 USES OF FUNDS Total Purchase of Land or Building $5,400,000$22,500 Total New Construction / Rehabilitation $7,524,000$31,350 Total Professional Fees $128,350 $535 Total Interim Costs $94,050 $392 Total Financing Fees & Expenses $225,563 $940 RD Debt Service $153,286 $639 Total Soft Costs $240,616 $1,003 Total Developer Fees $1,500,000 $6,250 Total Reserves $820,708 $3,420 TOTAL USES OF FUNDS $16,086,573 $67,027 REMAINDER (SHORTAGE) OF FUNDS - -

15. ISSUES

16. The Good  Occupancy averages above 98%  Many long-term residents TC eligible  Located on an existing bus line  Adding resident requested computer learning center  EarthCraft design will lower resident utility expenses  Post-rehab rents not substantially higher than pre-rehab rents The Bad  Aluminum wiring throughout apartments  Located in a flood zone, has flooded to front steps several times  Only 70% RA  Some current residents exceed income limits – incentivize  Adjacent to tough townhouse community  Requesting to close side entrance on Channel Place The Hairy  Timing of refinancing of two Rural Development loans to coincide with tax credit timelines  Renting accessible units slow without subsidy  Cannot afford 24-hour security  Development deferral is large (over 12 years)  City wants non-residents to be able to use computer learning center

17. T HE R EAL P ROJECT The Rivers Apartments – Post-rehab

18. T HE R EAL P ROJECT The Rivers Apartments – Post-rehab

19. T HE R EAL P ROJECT The Rivers Apartments – Post-rehab

20. T HE R EAL P ROJECT The Rivers Apartments – Post-rehab

21. T HE R EAL P ROJECT The Rivers Apartments – Post-rehab