1. Virginia Housing Development Authority Micro-Boards and Housing Virginia Microboard Association General Membership Meeting Virginia Beach, VA 18 November 2015

2. 1 vhda.com | 800-227-VHDA About VHDA VHDA is a self-supporting, not-for-profit organization created by the Commonwealth of Virginia in 1972, to help Virginians attain quality, affordable housing. VHDA provides mortgages, primarily for first-time homebuyers and developers of quality rental housing. We use no state taxpayer dollars, but raise money in the capital markets to fund our loans. We also teach free homeownership classes, and help people with disabilities and the elderly make their homes more livable. VHDA works with lenders, developers, local governments, community service organizations and others to help put quality housing within the reach of every Virginian.

3. 2 vhda.com | 800-227-VHDA Micro-boards + VHDA = ? VHDA has a pilot program that allows a micro-board legally incorporated in Virginia to act as the mortgagor for a 25 or 30-year VHDA multifamily loan to finance the acquisition of a single family house to be the residence of disabled person for whom the micro-board was created.

4. 3 vhda.com | 800-227-VHDA A multifamily loan for a single- family home? YES – also known as a square peg in a round hole trick! VHDA’s charter and IRS regulations do not allow VHDA to finance micro-boards under single-family mortgage rules. Therefore, this is a multifamily loan. Forget what you remember when you bought your home. This is different!

5. 4 vhda.com | 800-227-VHDA Are VHDA multifamily loans complicated? Yes! Must comply with VHDA’s: Minimum Design and Construction Requirements; and Minimum Cabinet Requirements (http://www.vhda.com/BusinessPartners/MFDevelopers/ MF-LoanApplication-Guides/Pages/MF- LoanApplication-Guides.aspx)http://www.vhda.com/BusinessPartners/MFDevelopers/ MF-LoanApplication-Guides/Pages/MF- LoanApplication-Guides.aspx These are for MF projects, and so subject to interpretation. Avoid condos. De minimus PUDs OK.

6. 5 vhda.com | 800-227-VHDA Are there sales price and loan limits? Yes! $375,000 sales price for the Norfolk- VA Beach-Newport News MSA. VHDA will loan the lesser of 100% of appraised value or approved cost as determined by VHDA. (more on this in a bit)

7. 6 vhda.com | 800-227-VHDA What are the housing and total expense ratios? There are none! Welcome to debt service coverage… For every $1.00 of routine housing expenses including principal and interest, you will need to document at least $1.10 of income. (more on this in a bit)

8. 7 vhda.com | 800-227-VHDA What expenses? *Principal and Interest*Taxes *Insurance, including Liability *Utilities *Accounting Fees *Trash *Pest Inspections and Treatments *Snow Removal *Maintenance *Lawn Care*Repairs *Legal *HOA Fees*OTHERS??

9. 8 vhda.com | 800-227-VHDA What income to support the housing (only)? If SSI, 30% of $733/mo. = $219 may be counted toward income to pay the mortgage. Other sources? Special needs trust Annuity Housing Choice Voucher Live-in aid paying rent Roommate(s) ??

10. 9 vhda.com | 800-227-VHDA The micro-board borrower…? Is a business entity organized as a not for profit, non-stock Virginia corporation for the sole purpose of providing support of an individual with a disability. Despite organizing as a non-profit corporation, it is unlikely that the IRS will grant non-profit status. And so – the micro-board will be a “C-Corp”, will need to file tax returns and pay taxes on income that exceeds housing (and services) expenses. VHDA will review the articles of incorporation, bylaws, board of directors’ info, and succession and sustainability plans indicating how the corporation will continue after the passing of the parents or guardians, and also pay both the mortgage and supportive services for the 25 or 30-year mortgage term.

11. Virginia Housing Development Authority Thank You. Questions? Bruce DeSimone 804.343.5656, bruce.desimone@vhda.combruce.desimone@vhda.com Walter “Wally” Robinson 804.343.5590, wally.robinson@vhda.comwally.robinson@vhda.com