Request for Proposals Syndication of Berkley Court Apartments and Pretlow Old Town Apartments RFP# SYN

Transcription

1 Franklin Redevelopment and Housing Authority Dear Syndicators: Request for Proposals Syndication of Berkley Court Apartments and Pretlow Old Town Apartments RFP# SYN Franklin Redevelopment and Housing Authority ( FRHA ) hereby requests proposals from qualified firms to provide syndication services for two (2) multifamily projects, each totaling 75 units. Both projects will receive a 2013 allocation of 9% Low Income Housing Tax Credits from VHDA. The Request for Proposals ( RFP ) documents will be available beginning September 13, 2013 at the Franklin Redevelopment and Housing Authority Administration Building, located at 601 Campbell Avenue, Franklin, VA or online at Respondents proposals should be prepared in accordance with the instructions in Section VI below. Questions regarding this RFP should be directed in writing to 601 Campbell Avenue, Franklin, VA or via to franklinrha@live.com. All questions must be received no later than Friday, September 20, Respondents proposals must be received by FRHA in sealed envelopes at 601 Campbell Avenue, Franklin, VA. by 5:00 PM ET, Friday, September 27, Proposals will be held in confidence by FRHA and not released in any manner until after the completion of negotiations with the successful respondent. Enclosed for your review is a summary of the Berkley Court Apartments and Pretlow-Old Town Apartments. The attached information for both projects includes: 1) Preliminary Cash Flow Analysis 2) Location Map 3) Project Budget 4) Sources and Uses Statement 5) Operating Proforma 6) Anticipated Lease-up Schedule 7) Anticipated Equity Schedule 8) Market Study Sincerely, Philip Page, Jr Executive Director Franklin Redevelopment and Housing Authority RFP# SYN Syndication Services Page 1 of 24

2 I. DEVELOPMENT TEAM FINANCIAL CONSULTANT Hudson Real Estate Advisory Group, LLC Glenn Hudson has over 20 years in housing finance, previously serving as a Senior Program Officer for Local Initiative Support Corporation (Parent Company of the National Equity Fund) in which he was responsible for financing and structuring tax credit deals. Mr. Hudson is the owner of Hudson Real Estate Advisory Group and has structured and prepared applications for the Berkley Court and Pretlow-Old Town apartments developments. Hudson Real Estate Advisory Group, LLC specializes in assisting local governments, Public Housing Authorities, Faith-Based Institutions, Historically Black Colleges and Universities, non-profit/for-profit entities successfully carry out development opportunities. Hudson Real Estate Advisory Group, LLC is experienced in real estate development training, neighborhood and community planning, building developer capacity, defining developer s role and responsibility in project development, structuring joint venture partnerships, guiding development team selection, real estate finance, community development finance, loan underwriting/deal structuring, commercial development, financial modeling, and financial packaging. Hudson Real Estate Advisory Group, LLC has a unique understanding of affordable housing delivery systems, mixed-use development and preservation throughout the country. DEVELOPER Franklin Redevelopment and Housing Authority (FRHA) Philip Page, Jr. has served as the Executive Director of FRHA since 2011 and has drastically increased its scope of development projects becoming the only Public Housing Authority in the Commonwealth of Virginia to be awarded a reservation of tax credits for two development projects in He also oversees the Authority s subsidized and market rate housing activities, its 315 Housing Choice Vouchers and other grant programs and direct services. Mr. Page previously served as Director of Development for Hampton Redevelopment and Housing Authority for nine years in which he was responsible for overseeing the acquisition, development and financing of tax credit units and mixed-finance units. He has worked with architects, lenders, syndicators, VHDA, DHCD, FHLB, local government and other financial partners in structuring and packaging financial and project information for review by funders. FINANCIAL MANAGEMENT Franklin Redevelopment and Housing Authority (FRHA) Adria Lindquist holds Bachelors and Masters degrees in Accounting and is a licensed CPA who has worked in public practice since Ms. Lindquist specializes in offering financial services to purpose driven companies and nonprofits. She also worked with small companies on regulatory compliance and financial implementation systems. Ms. Lindquist has been the Finance Manager with FRHA since 2012 and will head the accounting staff to oversee transaction processing and payments for FRHA LIHTC projects. PROPERTY MANAGEMENT Franklin Redevelopment and Housing Authority (FRHA) Sheila Parker has been responsible for property management functions for over 20 years as a property manager or regional property manager of tax credit properties in Virginia (Chester, Richmond, Franklin, Hampton and Front Royal), Washington D.C. and Pennsylvania (Wilkes Barre, Bethlehem). She is a member of IREM, Board Member and Member of the Richmond Apartment & Management Association (RAMA) and Board Member and Member of the Virginia Apartment & Management Association. Mrs. Parker has been the Director of Housing Management with FRHA since the beginning of RFP# SYN Syndication Services Page 2 of 24

3 Loretta Batten has been a tax credit property manager in southwest Tidewater for almost 15 years. She has obtained Public Housing and Tax Credit designations including Capital Fund, Financial Management, Rent Calculation and Occupancy certifications. M. Batten has been a Property Manager and Financial Analyst with FRHA since 1999 and currently manages resident relationships and compliance for 150 multifamily units. FINANCE AND COMPLIANCE REVIEW A. B. Kramer Group, LLC Audrey Kramer has over 24 years of experience in Section 42 LIHTC compliance and monitoring, asset management, developing and implementing office and financial systems, strategies, processes and controls. She is one of the foundational employees responsible for developing an award winning nonprofit housing organization with $120 million in assets, 24 legal entities and 1,500 units. She also began the A. B. Kramer Group, LLC where she offers her accounting, human resources and compliance expertise to housing organizations such as FRHA. Mrs. Kramer will be responsible for compliance review, monitoring and financial reporting to investors. OWNERS REPRESENTATIVE - Matthew Burton Architect (MBA) Matthew Burton is an accomplished and award-winning architect with more than 20 years professional experience who has earned a Bachelor of Architecture degree from California Polytechnic State University, San Luis Obispo and is an NCARB Certificate holder. Mr. Burton is a LEED Accredited Professional, an Earth Craft Virginia Multifamily Design Professional and is currently licensed to practice architecture in Virginia, North Carolina, New York, Florida, Arizona, and California. Mr. Burton currently serves as the principal architect for MBA using his extensive experience in the design of government, university and medical housing facilities, focusing on single and multi-family residential projects. His recent project experience includes modernization projects, additions, alterations and new construction projects with construction values ranging from under $25,000 to over $25 million. As a seasoned project manager, Mr. Burton will represent FRHA with its project architects and contractors. ARCHITECT CHP Design Studio, LLC (CHP) Colin Arnold is the Vice President of Architecture for Community Housing Partners Corporation which was established in 1975 to serve the housing needs in the Southeastern United States through sustainable development, architectural design and energy services. Mr. Arnold holds a Bachelor's degree in Environmental Design from Texas A&M, a Master s degree in Architecture from Virginia Tech and is a LEED 2.0 Accredited Professional. Under his leadership, Community Design Studio has completed the design of over 40 projects to create more than 2,800 units of affordable housing in Virginia, North Carolina, West Virginia, and Kentucky. TAX COUNSEL Crenshaw Ware & Martin, PLC Delphine G. Carnes is a partner with Crenshaw Ware & Martin which has been a top Virginia law firm in Norfolk since In addition to FRHA, CWM also represents the Norfolk and Suffolk Redevelopment and Housing Authorities utilizing their substantial experience in project finance, real estate acquisitions and dispositions, rehabilitation loans and grants, and mixed finance transactions in connection with LIHTC and both HUD's HOPE VI program and public housing reinvention initiatives. Over the past ten years, Mrs. Carnes has closed multiple mixed finance transactions involving the acquisition, disposition and/or demolition of property and the development/redevelopment of housing units using funding from HUD, HOME, LIHTC, tax-exempt bonds, Capital Fund Program Grant funds, Replacement Housing Factor Funds, conventional loans and subordinated debt. Mrs. Carnes has been involved in several projects involving VHDA Multifamily loans and LIHTC. She also has extensive experience in connection with the New Markets Tax Credit ("NMTC") program. Ms. Carnes has been selected as a "Rising Star" by Virginia Super Lawyers every year since 2007 and was included in Best Lawyers of America in Project Finance Law and Public Finance Law for RFP# SYN Syndication Services Page 3 of 24

4 II. BERKLEY COURT PROJECT SUMMARY Franklin Redevelopment and Housing Authority has received a 2013 Low-Income Housing Tax Credit Reservation for Berkley Court Apartments in the amount of $400,162. Berkley Court Apartments is an existing 75 unit (Garden and Townhome apartments-25 buildings) Public housing development that will be rehabbed and converted to project based rental assistance under the HUD Rental Demonstration Program (RAD). The apartments will be targeted to families at or below 50% AMI. A community room will be developed that will provide meeting space and community labs for its residents. The exterior finish of the buildings will be brick and fiber cement board. The interior heating/ac system will be heat pumps and the architectural style is 1970 Traditional American. The buildings construction will satisfy Earth Craft certification for energy efficiency. The Total floor area of the entire development is 77, sq. ft. The total Net Rentable Square Feet is 67, Franklin Redevelopment and Housing Authority will form Berkley Court Apartments G.P, LLC to serve as General Partner of the Berkley Court Apartments Limited Partnership. The development is located in the City of Franklin. The property is located north of Armory Drive - a major eastwest route through the area. The site is conveniently located with respect to Armory Drive - which is the area s major commercial thoroughfare - and the location of several shopping centers. The site is, for example, is within a mile of a shopping center which is anchored by a Wal-Mart. Additionally, the site is within one half-mile of two drugstores located at the intersection of Armory Drive and North College Drive. The site is within one fourth of one mile of the government, shopping and other services located in the downtown business district. The site is within one-half mile of the King Middle School and is within one and one-half mile to two miles of the elementary school RFP# SYN Syndication Services Page 4 of 24

5 and high school. The site is also within one and one-half miles of the Southampton Memorial Hospital and associated medical services, to the north. RFP# SYN Syndication Services Page 5 of 24

6 III. BERKLEY COURT FINANCIALS FINANCING SOURCES Construction Sources Conventional Construction Loan up to $3,600,000 FRHA Loan up to $562,000 FRHA Loan (Capital Funds) up to $526,000 Permanent Sources First Mortgage Loan up to $590,227; 20-year term; 25-year amortization FRHA Loan up to $562,000 FRHA Loan (Capital Fund Grant) up to $526,000 Low-Income Housing Tax Credit Equity $3,761,147 PROJECT SCHEDULE SUMMARY Construction, Closing, and Lease Schedules Construction Bidding Award Construction Contract Closing Construction Start Certificate of Occupancy/Placed In Service Construction Completion % Lease Lease-up Equity Pay-in Schedule Closing Developer Fee Equity (50% of Developer Fee) 100% Construction Completion and Certificate of Occupancy Non-Developer Fee Equity (100% of total Equity less Developer Fee) Developer Fee Equity (25% of Developer Fee) Permanent Loan Closing and 100% LIHTC Unit Lease-up Developer Fee Equity (15% of Developer Fee) 8609 and Tax Filing Developer Fee Equity (10% of Developer Fee) RFP# SYN Syndication Services Page 6 of 24

7 CASHFLOW ANALYSIS Permanent Financing: List individually the sources of all permanent financing in order of lien position: (Whole Numbers only) Interest Amortization Term Date of Date of Amount of Annual Debt Rate of Period of Source of Funds Application Commitment Funds Service Cost Loan IN YEARS Loan (years) 1. Capital Funds 3/14/2013 $526, % Bank Loan $590,227 $50, % FRHA 3/14/2013 $562,000 $0 2.66% Equity $3,761,147 $0 5. Totals: $5,439,374 $50,059 NOTE: Equity based on $400,162 annual *10*.94=$3,761,147 The project has received an annual reservation of $400,162 from Virginia Housing Development Authority UNIT MIX GRID In the following grid, add a mix value for each unique unit type planned within the development. Monthly Rent Per Unit Total Monthly Rent Unit Type (Select One) Rent Target (Select One) Number of Units Net Rentable Square Feet Mix 1 1 Bedroom 40% AMI $ $3,072 Mix 2 1 Bedroom 50% AMI $ $982 Mix 3 1 Bedroom 50% AMI $ $1,964 Mix 4 2 Bedroom 50% AMI $ $8,576 Mix 5 2 Bedroom 50% AMI $ $2,144 Mix 6 3 Bedroom 50% AMI $ $6,876 Mix 7 3 Bedroom 50% AMI $ $4,584 Mix 8 3 Bedroom 50% AMI $ $4,584 Mix 9 4 Bedroom 50% AMI $ $6,110 Mix 10 4 Bedroom 50% AMI $ $611 Mix 11 4 Bedroom 50% AMI $ $1,222 Mix 12 $0 Mix 13 5,990 $40,725 RFP# SYN Syndication Services Page 7 of 24

8 Operating Expenses Administrative: 1. Advertising/Marketing $0 2. Office Salaries $34, Office Supplies $3, Office/Model Apartment (type ) $0 5. Management Fee $22, % of EGI $ Per Unit 6. Manager Salaries $15, Staff Unit (s) (type ) $0 8. Legal $3, Auditing $3, Bookkeeping/Accounting Fees $6, Telephone & Answering Service $2, Tax Credit Monitoring Fee $1, Miscellaneous Administrative $14,407 Total Administrative $107,881 Utilities 14. Fuel Oil $0 15. Electricity $10, Water $21, Gas $37, Sewer $21,861 Total Utility $91,219 Operating: 19. Janitor/Cleaning Payroll $53, Janitor/Cleaning Supplies $0 21. Janitor/Cleaning Contract $0 22. Exterminating $4, Trash Removal $5, Security Payroll/Contract $4, Grounds Payroll $0 26. Grounds Supplies $0 27. Grounds Contract $3, Maintenance/Repairs Payroll $0 29. Repairs/Material $33, Repairs Contract $0 31. Elevator Maintenance/Contract $0 32. Heating/Cooling Repairs & Maintenance $4, Pool Maintenance/Contract/Staff $0 34. Snow Removal $0 35. Decorating/Payroll/Contract $0 36. Decorating Supplies $0 37. Miscellaneous $20,145 Operating & Maintenance Totals $128,853 RFP# SYN Syndication Services Page 8 of 24

9 Taxes & Insurance 38. Real Estate Taxes $3, Payroll Taxes $0 40. Miscellaneous Taxes/Licenses/Permits $0 41. Property & Liability Insurance $4, Fidelity Bond $0 43. Workman's Compensation $0 44. Health Insurance & Employee Benefits $2, Other Insurance $0 Total Taxes & Insurance $9, Total Operating Expense $337,453 D1. Total Operating Expenses Per Unit $4,499 D2. Total Operating Ex. As % EGI (from E3) 74.25% Replacement Reserves (Total # Units X $300 or $250 New Const. Elderly Minimum) $22,500 Total Expenses $359,953 Revenue Total Monthly Rental Income for LIHTC Units $40,725 Plus Other Income Source (list): $0 Equals Total Monthly Income: $40,725 Twelve Months x12 Equals Annual Gross Potential Income $488,700 Less Vacancy Allowance 7.0% $34,209 Equals Annual Effective Gross Income (EGI) - Low Income Units $454,491 Revenue Total Monthly Rental Income for LIHTC Units $40,725 Plus Other Income Source (list): $0 Equals Total Monthly Income: $40,725 Twelve Months x12 Equals Annual Gross Potential Income $488,700 Less Vacancy Allowance 7.0% ) $34,209 Equals Annual Effective Gross Income (EGI) - Low Income Units $454,491 RFP# SYN Syndication Services Page 9 of 24

10 Projections for Financial Feasibility - 15 Year Projections of Cash Flow Stabilized Year 1 Year 2 Year 3 Year 4 Year 5 Eff. Gross Income 454, , , , ,956 Less Operating Expenses 359, , , , ,130 Net Income 94,538 92,829 90,978 88,979 86,825 Less Debt Service 50,059 50,059 50,059 50,059 50,059 Cash Flow 44,479 42,770 40,919 38,920 36,766 Debt Coverage Ratio Year 6 Year 7 Year 8 Year 9 Year 10 Eff. Gross Income 501, , , , ,159 Less Operating Expenses 417, , , , ,657 Net Income 84,511 82,028 79,371 76,531 73,502 Less Debt Service 50,059 50,059 50,059 50,059 50,059 Cash Flow 34,452 31,969 29,312 26,472 23,443 Debt Coverage Ratio Year 11 Year 12 Year 13 Year 14 Year 15 Eff. Gross Income 554, , , , ,691 Less Operating Expenses 483, , , , ,461 Net Income 70,275 66,843 63,198 59,329 55,230 Less Debt Service 50,059 50,059 50,059 50,059 50,059 Cash Flow 20,216 16,784 13,139 9,270 5,171 Debt Coverage Ratio RFP# SYN Syndication Services Page 10 of 24

11 Item 1. Contractor Cost (A) Cost Amount of Cost up to 100% Includable in Eligible Basis--Use Applicable Column(s): "30% Present Value Credit" (D) (B) Acquisition (C) Rehab/ New Construction "70 % Present Value Credit" A. Off-Site Improvements B. Site Work 50, ,000 C. Geothermal System D. Unit Structures (New) E. Unit Structures (Rehab) 3,150, ,150,000 F. Solar Electric System G. Asbestos Removal H. Demolition I. Commercial Space Costs J. Structured Parking Garage K. Subtotal A: (Sum 1A..1J) 3,200, ,200,000 L. General Requirements 144, ,000 M. Builder's Overhead 57, ,600 ( 1.8% Contract) N. Builder's Profit 144, ,000 ( 4.5% Contract) O. Bonding Fee P. Other: Q. Contractor Cost Subtotal (Sum 1K..1P) $3,545,600 $0 $0 $3,545, Owner Costs A. Building Permit 13, ,000 B. Arch./Engin. Design Fee 108, ,374 ( 1,445 /Unit) C. Arch. Supervision Fee 35, ,000 ( 467 /Unit) D. Tap Fees E. Soil Borings RFP# SYN Syndication Services Page 11 of 24

12 Item (A) Cost Amount of Cost up to 100% Includable in Eligible Basis--Use Applicable Column(s): "30% Present Value Credit" (D) (B) (C) "70 % Acquisition Rehab/ Present New Value Construction Credit" 2. Owner Costs Continued F. Construction Loan 16, ,200 Origination Fee G. Construction Interest 90, ,000 ( 5.5% for 12 months) H. Taxes During Construction I. Insurance During Construction 20, ,000 J. Cost Certification Fee 30, ,000 K. Title and Recording 15, ,000 L. Legal Fees for Closing 25, ,000 M. Permanent Loan Fee 9,00 ( 1.0% ) N. Other Permanent Loan Fees O. Credit Enhancement P. Mortgage Banker Q. Environmental Study 5, ,000 R. Structural/Mechanical Study S. Appraisal Fee 4, ,500 T. Market Study 3, ,500 U. Operating Reserve 213, V. Tax Credit Fee 29,098 W. OTHER $225,000 $0 $0 $210,000 (SEE BELOW) X. Owner Cost Subtotal (Sum 2A..2W) $841,774 $0 $0 $575,574 Subtotal $4,387,374 $0 $0 $4,121,174 (Owner + Contractor Costs) 3. Developer's Fees 490, , Owner's Acquisition Costs Land 100, Existing Improvements 462, Subtotal 4: $562,000 $0 5. Total Development Costs Subtotal : $5,439,374 $0 $0 $4,611,174 RFP# SYN Syndication Services Page 12 of 24

13 OTHER OWNER COSTS Item W. OTHER OWNER COSTS (A) Cost Amount of Cost up to 100% Includable in Eligible Basis--Use Applicable Column(s): "30% Present Value Credit" (D) (B) Acquisition (C) Rehab/ New Construction "70 % Present Value Credit" Contingency Reserve 70, ,000 (Rehab or Adaptive Reuse only) LIST ADDITIONAL ITEMS Relocation 70, ,000 Earthcraft 20, ,000 Construction Management 20, ,000 Survey 18, ,000 Legal Syndication 15,00 Inspections 12, ,000 Mortgage Broker Fee Subtotal (Other Owner Costs) $225,000 $0 $0 $210,000 RFP# SYN Syndication Services Page 13 of 24

14 IV. PRETLOW-OLD TOWN APARTMENTS PROJECT SUMMARY Franklin Redevelopment and Housing Authority has received a 2013 Low-Income Housing Tax Credit Reservation for Pretlow-Old Town Apartments in the amount of $404,491. Pretlow-Old Town Apartments consists of the rehabilitation of two existing scattered site public housing units totaling seventy-five units ( Pretlow Gardens has a total of forty garden and townhouse units and Old Town Terrace apartments consist of thirty-five garden and townhome units). The Public housing development will be rehabbed and converted to project based rental assistance under the HUD Rental Demonstration Program (RAD). The apartments will be targeted to families at or below 50% AMI. A community room currently exists on the site. The exterior finish of the buildings will be brick and fiber cement board. The interior heating/ac system will be heat pumps and the architectural style is 1970 Traditional American. The buildings construction will satisfy Earthcraft certification for energy efficiency. The Total floor area of the entire development is 70, sq. ft. The total Net Rentable Square Feet is 60, Franklin Redevelopment and Housing Authority will form Pretlow-Old Town Apartments G.P, LLC to serve as General Partner of the Pretlow-Old Town Apartments Limited Partnership. The development is located in the City of Franklin. The property is located north of Armory Drive - a major eastwest route through the area. Access from the two sites to major thoroughfares, schools, shopping, health, and other local services, is quite good. The properties are located off South Street (US 258) - a major east-west route through the area. The sites are within two- to three miles or so of the concentration of shopping and other services located on Armory Drive, to the west. Armory Drive is the area s major commercial thoroughfare - and the location of several shopping centers. The sites are, for example, within two and one-half miles of a shopping center which is RFP# SYN Syndication Services Page 14 of 24

15 anchored by a Wal-Mart. Additionally, the sites are within two miles of two drug stores located at the intersection of Armory Drive and North College Drive. The sites are within one mile of the government, shopping and other services located in the downtown business district. The site is within three miles of the various schools which serve Franklin. In particular, Pretlow Gardens is within one-fourth of one mile of the Morton Elementary School. The site is within two and one-half miles of the Southampton Memorial Hospital and associated medical services, to the north. RFP# SYN Syndication Services Page 15 of 24

16 V. PRETLOW-OLD TOWN FINANCIALS FINANCING SOURCES Construction Sources Conventional Construction Loan up to $4,000,000 FRHA Loan up to $1,180,000 Permanent Sources First Mortgage Loan up to $945,553/ 20-year term; 25-year amortization FRHA Loan up to $1,180,000 Low-Income Housing Tax Credit Equity $3,801,835 PROJECT SCHEDULE SUMMARY Construction, Closing, and Lease Schedules Construction Bidding Award Construction Contract Closing Construction Start Certificate of Occupancy/Placed In Service Construction Completion % Lease Lease-up Equity Pay-in Schedule Closing Developer Fee Equity (50% of Developer Fee) 100% Construction Completion and Certificate of Occupancy Non-Developer Fee Equity (100% of total Equity less Developer Fee) Developer Fee Equity (25% of Developer Fee) Permanent Loan Closing and 100% LIHTC Unit Lease-up Developer Fee Equity (15% of Developer Fee) 8609 and Tax Filing Developer Fee Equity (10% of Developer Fee) RFP# SYN Syndication Services Page 16 of 24

17 CASHFLOW ANALYSIS Permanent Financing: List individually the sources of all permanent financing in order of lien position: (Whole Numbers only) Interest Amortization Term Date of Date of Amount of Annual Debt Rate of Period of Source of Funds Application Commitment Funds Service Cost Loan IN YEARS Loan (years) 1. Bank Loan 6/1/2013 6/15/2013 $945,553 $80, % FRHA 3/14/2013 $1,180,000 $0 2.66% Equity $3,801,835 $0 0.00% 15 Totals $5,927,388 $80,196 NOTE: Equity based on $404,491 annual *10*.94=$3,801,385 The project has received an annual reservation of $404,491 from Virginia Housing Development Authority UNIT MIX GRID Unit Type (Select One) Rent Target (Select One) Number of Units Net Rentable Square Feet Monthly Rent Per Unit Total Monthly Rent Mix 1 1 Bedroom 40% AMI $ $2,808 Mix 2 1 Bedroom 50% AMI $ $3,664 Mix 3 1 Bedroom 50% AMI $ $1,832 Mix 4 2 Bedroom 50% AMI $ $8,704 Mix 5 2 Bedroom 50% AMI $ $2,176 Mix 6 3 Bedroom 50% AMI $ $22,505 Mix 7 $0 Mix 8 $0 Mix 9 $0 Mix 10 $0 Mix 11 $0 Mix 12 $2, $41,689 RFP# SYN Syndication Services Page 17 of 24

18 Operating Expenses Administrative: 1. Advertising/Marketing $0 2. Office Salaries $29, Office Supplies $5, Office/Model Apartment (type ) $0 5. Management Fee $23, % of EGI $ Per Unit 6. Manager Salaries $0 7. Staff Unit (s) (type ) $0 8. Legal $11, Auditing $3, Bookkeeping/Accounting Fees $6, Telephone & Answering Service $3, Tax Credit Monitoring Fee $2, Miscellaneous Administrative $14,407 Total Administrative $100,390 Utilities 14. Fuel Oil $0 15. Electricity $23, Water $51, Gas $0 18. Sewer $0 Total Utility $74,496 Operating: 19. Janitor/Cleaning Payroll $58, Janitor/Cleaning Supplies $15, Janitor/Cleaning Contract $0 22. Exterminating $3, Trash Removal $6, Security Payroll/Contract $5, Grounds Payroll $0 26. Grounds Supplies $0 27. Grounds Contract $2, Maintenance/Repairs Payroll $4, Repairs/Material $21, Repairs Contract $24, Elevator Maintenance/Contract $0 32. Heating/Cooling Repairs & Maintenance $6, Pool Maintenance/Contract/Staff $0 34. Snow Removal $0 35. Decorating/Payroll/Contract $0 36. Decorating Supplies $0 37. Miscellaneous $0 Operating & Maintenance Totals $149,573 RFP# SYN Syndication Services Page 18 of 24

19 Taxes & Insurance 38. Real Estate Taxes $3, Payroll Taxes $0 40. Miscellaneous Taxes/Licenses/Permits $0 41. Property & Liability Insurance $1, Fidelity Bond $0 43. Workman's Compensation $0 44. Health Insurance & Employee Benefits $0 45. Other Insurance $0 Total Taxes & Insurance $5,525 Total Operating Expense $329, D1. Total Operating Expenses Per Unit $4,400 D2. Total Operating Expenses As % EGI (from E3) 70.93% Replacement Reserves (Total # Units X $300 or $250 New Const. Elderly Minimum) $22,500 Total Expenses $352,484 Revenue 1. Indicate the estimated monthly income for the Low-Income Units: ** Total Monthly Rental Income for LIHTC Units $41,689 Plus Other Income Source (list): $0 Equals Total Monthly Income: $41,689 Twelve Months x12 Equals Annual Gross Potential Income $500,268 Less Vacancy Allowance 7.0% ) $35,019 Equals Annual Effective Gross Income (EGI) - Low Income Units $465,249 RFP# SYN Syndication Services Page 19 of 24

20 Projections for Financial Feasibility - 15 Year Projections of Cash Flow Stabilized Year 1 Year 2 Year 3 Year 4 Year 5 Eff.Gross Income 465, , , , ,601 Less Operating Expenses 352, , , , ,724 Net Income 112, , , , ,877 Less Debt Service 80,196 80,196 80,196 80,196 80,196 Cash Flow 32,569 31,300 29,899 28,361 26,681 Debt Coverage Ratio Year 6 Year 7 Year 8 Year 9 Year 10 Eff. Gross Income 513, , , , ,016 Less Operating Expenses 408, , , , ,912 Net Income 105, , ,914 98,597 96,104 Less Debt Service 80,196 80,196 80,196 80,196 80,196 Cash Flow 24,851 22,866 20,718 18,401 15,908 Debt Coverage Ratio Year 11 Year 12 Year 13 Year 14 Year 15 Eff. Gross Income 567, , , , ,886 Less Operating Expenses 473, , , , ,164 Net Income 93,427 90,559 87,491 84,215 80,723 Less Debt Service 80,196 80,196 80,196 80,196 80,196 Cash Flow 13,231 10,363 7,295 4, Debt Coverage Ratio RFP# SYN Syndication Services Page 20 of 24

21 Item 1. Contractor Cost (A) Cost Amount of Cost up to 100% Includable in Eligible Basis--Use Applicable Column(s): "30% Present Value Credit" (D) (B) Acquisition (C) Rehab/ New Construction "70 % Present Value Credit" A. Off-Site Improvements B. Site Work 57, ,000 C. Geothermal System D. Unit Structures (New) E. Unit Structures (Rehab) 3,093, ,093,000 F. Solar Electric System G. Asbestos Removal H. Demolition I. Commercial Space Costs J. Structured Parking Garage K. Subtotal A: (Sum 1A..1J) 3,150, ,150,000 L. General Requirements 141, ,750 M. Builder's Overhead 56, ,700 ( 1.8% Contract) N. Builder's Profit 141, ,750 ( 4.5% Contract) O. Bonding Fee P. Other: Q. Contractor Cost Subtotal (Sum 1K..1P) $3,490,200 $0 $0 $3,490, Owner Costs A. Building Permit 13, ,000 B. Arch./Engin. Design Fee 108, ,374 ( 1,445 /Unit) C. Arch. Supervision Fee 35, ,000 ( 467 /Unit) D. Tap Fees E. Soil Borings RFP# SYN Syndication Services Page 21 of 24

22 Item 2. Owner Costs Continued (A) Cost Amount of Cost up to 100% Includable in Eligible Basis--Use Applicable Column(s): "30% Present Value Credit" (D) (B) "70 % Acquisition (C) Rehab/ Present New Value Construction Credit" F. Construction Loan 20, ,000 Origination Fee G. Construction Interest 90, ,000 ( 5.5% for 12 months) H. Taxes During Construction I. Insurance During Construction 20, ,000 J. Cost Certification Fee 30, ,000 K. Title and Recording 15, ,000 L. Legal Fees for Closing 25, ,000 M. Permanent Loan Fee 8,75 ( 0.0% ) N. Other Permanent Loan Fees O. Credit Enhancement P. Mortgage Banker Q. Environmental Study 5, ,000 R. Structural/Mechanical Study S. Appraisal Fee 6, ,000 T. Market Study 3, ,000 U. Operating Reserve 202,00 V. Tax Credit Fee 29,064 W. OTHER $197,000 $0 $0 $197,000 (SEE PAGE 19A) X. Owner Cost Subtotal (Sum 2A..2W) $807,188 $0 $0 $567,374 Subtotal $4,297,388 $0 $0 $4,057,574 (Owner + Contractor Costs) 3. Developer's Fees 450, , Owner's Acquisition Costs Land 230, Existing Improvements 950, Subtotal 4: $1,180,000 $0 5. Total Development Costs Subtotal : $5,927,388 $0 $0 $4,507,574 RFP# SYN Syndication Services Page 22 of 24

23 OTHER OWNER COSTS Item W. OTHER OWNER COSTS (A) Cost Amount of Cost up to 100% Includable in Eligible Basis--Use Applicable Column(s): "30% Present Value Credit" (D) (B) Acquisition (C) Rehab/ "70 % Present New Construction Value Credit" Contingency Reserve 50, ,000 (Rehab or Adaptive Reuse only) LIST ADDITIONAL ITEMS Relocation 50, ,000 Earth Craft 20, ,000 Construction Management 40, ,000 Survey 25, ,000 Legal Syndication Inspections 12, ,000 Subtotal (Other Owner Costs) $197,000 $0 $0 $197,000 RFP# SYN Syndication Services Page 23 of 24

24 VI. PROPOSAL INSTRUCTIONS Respondents proposals must be received by FRHA in sealed envelopes at 601 Campbell Avenue, Franklin, VA by 5:00 PM ET, Friday, September 27, Firms should submit separate proposals for each project but deliver both proposals together. Proposals will be held in confidence by FRHA and not released in any manner until after the completion of negotiations with the successful respondent. It is the goal of FRHA to negotiate agreements for both projects with one firm. Proposals will be reviewed based on the firm that offers the best value and terms to FRHA on both projects. Proposals should include and address all of the items listed below. 1. Capital Contributions - The price and the schedule and criteria of installments including developer fee payment schedule; 2. Allocations and Cash Flow Distributions - Use, allocation, and distribution of cash flow 3. Sale Provisions - Criteria for sale, use, and distribution of after-sale proceeds 4. Credit Adjustments - Criteria and factor(s) of credit adjustments 5. Guarantee Provisions - Type and criteria of required guarantees 6. Reserve Requirements - Type and amount of required reserve accounts 7. Insurance Requirements - Type and amount of required insurance coverage 8. Reporting Requirements - Type and frequency of required reports 9. Section 3 - Status as a Section 3 firm or efforts to support economic opportunities for low income households VII. TERMS AND CONDITIONS FRHA reserves the right to reject any and all proposals submitted, to award portions of this contract in whole or in part, to not award contract, and to waive any informalities in the submission of proposals. FRHA does not discriminate against faith-based organizations or any person on the basis of race, color, genetic information, sex, religion, national origin, age, familial status, or handicap. If you have any questions or concerns regarding this policy, please contact FRHA at RFP# SYN Syndication Services Page 24 of 24