1. Midwest Lenders Association Conference Federal and State Tax Credit Programs October 13, 2015

2. Federal and State Tax Credit Programs  Low-income housing tax credits  Historic rehabilitation tax credits  New markets tax credits 2

3.  Equity market is robust – equity is in excess of available credits  Type of investors  Financial insititutions  Syndicators  Financial institutions  Insurance companies  Other widely-held C corporations  CRA vs. Non-CRA market Low-Income Housing Tax Credits 3

4. 4 First Mortgage Debt (Lender) Sample Project, LLC (Landlord) Managing Member.01% Federal Investor 99.99% Debt Repayment Debt $0 Equity $0 Equity $0

5.  IRS Safe Harbor (Rev. Proc. 2014-12)  Type of investors  Financial insititutions  Other widely-held C corporations  Syndicators  Financial institutions  Other widely-held C corporations Historic Rehabilitation Tax Credits 5

6.  Tax Structures  Single tier structure  Master lease structure  IRC Section 50(D) income Historic Rehabilitation Tax Credits 6

7. 7 Sample Project, LLC (Landlord) First Mortgage Debt (Lender) Managing Member 1% Federal Investor 99% Debt Repayment Debt $0 Equity $0 Equity $0

8. Historic Rehabilitation Tax Credits 8 Sample Project, LLC (Landlord) Sample Project Master Tenant, LLC (Master Tenant) 1% First Mortgage Debt (Lender) Federal LIHTC Member 97.99% Managing Member.01% Managing Member.01% Federal Historic Investor 99.99% State Historic entity 1% Debt Repayment Debt $0 Equity $0 Equity $0 Equity $0

9.  Statutorily expired after 2014 – part of “extenders package” currently in Congress  Leverage lender concept  Complex structure  Expensive capital  Non-profits are the best sponsors/owners New Markets Tax Credits 9

10. 10 Investment Fund (99.99%) Federal New Markets Investor (100%) ABC Bank Leveraged Loan CDE Managing Member.01% ABC Project (Fee owner - Landlord) (QALICB) XYZ Sub-CDE (100%) XYZ MM, LLC (99%) ABC Member (1%) Debt $8,400,000 Debt Services Debt $4,488,145 Equity $2,788,500 Debt Services Put Option $1,000 NMTC’s $4,290,000 Sub-allocatee Fee $188,500 CDE Fees $471,500 QEI $11,000,000 Debt – A Piece $8,400,000 Debt – B Piece $2,128,500 Debt Services Equity $100 Equity $192,659

11. Dave Herdlick 314-290-3383 dave.herdlick@rubinbrown.com Midwest Lenders Association Conference 11