1. National Housing Trust Fund (NHTF) Capital Magnet Fund (CMF) CARH 2015 Annual Meeting & Legislative Conference Offering Financial Advice and Solutions to Health Care, Senior Living, and Housing Providers. June 15, 2015

2. Financing Progress National Housing Trust Fund -Created as part of the Housing and Economic Recovery Act of 2008 (HERA) -On 12/11/14 the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to begin allocating funds equal to 4.2bps of their business volume. 48.75% goes to NHTF and 26.25% to the Capital Magnet Fund. These are dedicated funds, not subject to appropriations -States are expected to receive the NHTF allocations in the summer of 2016. Distributed as block grants by formula -NHTF will use the HUD HOME regulations where the NHTF statute does not prescribe specific features -Program targets ELI renters (greater of 30% AMI or the federal poverty level) 2

3. Financing Progress National Housing Trust Fund -In years where < $1B states must use 80% of their allocation on ELI renters with no more than 10% going toward home ownership. Up to 10% may be used for a state’s administration and planning costs. -In years where > $1B states must use at least 75% on ELI rental; no more than 25% VLI rental with no more than 10% ELI going toward home ownership. -States must select a state agency that will receive and administer the funds. Each state must prepare a Consolidated Plan of which the NHTF Allocation Plan is a part of. “Subgrantees are allowed. 21 states have designated an administering agency 3

4. Financing Progress National Housing Trust Fund -States to “commit” (expected to begin construction or rehab with one year) funds within 2 years. Uncommitted funds are recaptured by HUD and reallocated to other states. Funds must be spent in 5 years. -Affordability is 30 years with the states having the option to extend that term -States can use 1/3 of their annual allocation to be used for operating cost assistance. Allows for upfront funding for financial feasibility for the entire affordability period. -Unofficially HUD has indicated NHTF does not trigger Davis-Bacon -NHTF may be loans, grants, interest subsidy, equity investments, other 4

5. Financing Progress National Housing Trust Fund – Key Differences from HOME -Income Targeting: -NHTF: 75% of funds must benefit ELI renters (30% AMI) -HOME: 90% of rental units must benefit at incomes at or below 60% AMI -Eligible Activites: -NHTF: 90% of funds directed at rental housing; 10% to home ownership -HOME: wider range of uses and no limits on how much can be used for home ownership versus rental -Funding: -NHTF: dedicated source of funding on the mandatory side of the federal budget and is not subject to annual appropriations -HOME: receives funding through annual appropriations 5

6. Financing Progress National Housing Trust Fund – What Can We Do -Contact governors as to which state agency should administer -Comment on the Allocation Plan before it is finalized -Make sure ELI and VLI people are aware of the Allocation Plan process -Make sure rural areas are considered as well as those of metro areas -Advocate at the national level for dedicated funding -www.nhtf.org 6

7. Financing Progress Capital Magnet Fund -Created as part of the Housing and Economic Recovery Act of 2008 (HERA) -On 12/11/14 the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to begin allocating funds equal to 4.2bps of their business volume. 48.75% goes to NHTF and 26.25% to the Capital Magnet Fund. These are dedicated funds, not subject to appropriations -Administered by the Treasury Department’s Community Development Financial Institutions (CDFI) Fund as opposed to HUD -Grants to CDFI’s and nonprofit housing organizations through a competitive process. 7

8. Financing Progress Capital Magnet Fund -Used for affordable housing as well as related economic development and community service facilities (day care centers, workforce development center, health care clinics, etc -Has only had one round of funding and that was in 2010 for $80M (legislation creating the CMF allowed it to be capitalized through regular appropriations) -In that round there were 230 applicants. 13 non-profit housing developers, 9 CDFI’s and on tribal housing authority were awarded -Each dollar of CMF attracted over $12 in other capital 8

9. Financing Progress Capital Magnet Fund -70% of CMF must be used for housing. If CMF finances rental housing then at least 20% of the units at or below 80% AMI with the rest at or below 120% AMI -Affordability requirement is 10 years -Like HOME the CMF has a wider range of uses and has no limits on how much can be used for home ownership versus rental -www.cdfifund.com 9