1. Turning Your Tax Credits into Cash Iped Tax Credits 101, October 16, 2008 Presenter: Gayle Manganello Ellis, PNC MultiFamily Capital

2. Turning your Tax Credits into Cash, Gayle Manganello Ellis, PNC MultiFamily Capital 2 Receive annual reservation of tax credits from the state, either through 9% or 4% application process Look to Syndicator/Investor to purchase the credits for cash Initial Steps

3. Turning your Tax Credits into Cash, Gayle Manganello Ellis, PNC MultiFamily Capital 3 Syndicator/Investor Process Forecast of Yield to investor based on Equity Price and Timing of Equity Pay-Ins Issuance of Letter of Intent outlining Pricing and Terms Underwriting of Proposed Investment by Syndicator/Investor Third party market study, environmental review, expense analysis, insurance coverage and construction analysis Review of experience, financials and previous performance of development team Finalization of financing terms Review of legal documents such as zoning, title, partnership formation, etc. Execution of Partnership Agreement

4. Turning your Tax Credits into Cash, Gayle Manganello Ellis, PNC MultiFamily Capital 4 Syndicator/Investor Process (contd) Closing/Admission of Syndicator/Investor Commonly at construction start and simultaneously with construction loan closing

5. Turning your Tax Credits into Cash, Gayle Manganello Ellis, PNC MultiFamily Capital 5 What to Expect From Your Partner Assumptions Assumptions for Timing of Closing, Construction Start, Construction Completion, Lease-up and Delivery of Benefits Pricing Will be paid in installments Each installment will have its own conditions Payment of Developer Fee When and how much Distribution of Cash Flow and Sales/Refinance Proceeds Investor service fees Deferred development fee Incentive management fee/partnership management fee Cash split The Syndicator/Investor and the Letter of Intent

6. Turning your Tax Credits into Cash, Gayle Manganello Ellis, PNC MultiFamily Capital 6 What to Expect From Your Partner (contd) Sale Refinance After Year 15 Syndicator/Investor will want to have its interest sold or to have the partnership sold General Obligations Construction completion/stabilization Operating deficits Appropriations/retenanting risk Tax credit adjusters Repurchase Reporting The Syndicator/Investor and the Letter of Intent

7. Turning your Tax Credits into Cash, Gayle Manganello Ellis, PNC MultiFamily Capital 7 CONCLUSION It is never too early to begin discussing intended developments with a Syndicator/Investor Be sure your assumptions are in line with those of the Syndicator/Investors Be aware of your obligations Maintain good communication with your Syndicator/Investor