1. Historical Production 221(d)(4) 1960s - 2007 221(d)(4) 1960s - 2007 9,099 loans 1,107,865 units $42.6 billion insurance written $15.9 billion insurance in force $15.9 billion insurance in force

2. Current production 221(d)(4) – FY 2006 221(d)(4) – FY 2006 92 loans 14,996 units $885 million insurance written

3. 221(D)(4) PROGRAM BASICS NEW CONSTRUCTION AND SUBSTANTIAL REHABILIATION NEW CONSTRUCTION AND SUBSTANTIAL REHABILIATION INSURES BOTH CONSTRUCTION AND PERMANENT LOANS INSURES BOTH CONSTRUCTION AND PERMANENT LOANS 40 YEAR MORTGAGE TERM 40 YEAR MORTGAGE TERM FINANCED WITH GNMA MORTGAGED-BACKED SECURITIES FINANCED WITH GNMA MORTGAGED-BACKED SECURITIES

4. Builder/Sponsor Profit and Risk Allowance (BSPRA). History. Identity of interest with General Contractor. 10% of all costs except land. Effect on borrower equity

5. Mortgage Limitations 90% of Replacement Cost(New Construction)) 90% of Replacement Cost(New Construction)) 90% of Rehab cost plus As-Is Value(Sub Rehab) 90% of Rehab cost plus As-Is Value(Sub Rehab) Debt Service Limit(90% of Net Income) Debt Service Limit(90% of Net Income) Statutory Per Unit Limits Statutory Per Unit Limits

6. Cost Certifcation. History. Borrower in all cases. General Contractor in identity of interest (e.g., BSPRA) cases

7. Ground Leases Term Term - 99 year renewable - 99 year renewable - 10 years beyond maturity date - 10 years beyond maturity date Limit on Value Limit on Value FHA right to purchase Fee title FHA right to purchase Fee title Limit on Ground Rent Limit on Ground Rent