August 18, Londontowne Lane (PLP) Dear Mr. Dearduff:

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Roy Robinson
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Mr. Robert Dearduff Special Programs Administration Florida Housing Finance Corporation City Centre Building 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 Re: Londontowne Lane

1 Mr. Robert Dearduff Special Programs Administration Florida Housing Finance Corporation City Centre Building 227 North Bronough Street, Suite 5000 Tallahassee, Florida Re: Londontowne Lane (PLP) Dear Mr. Dearduff: Londontowne Lane ( Development ) is a proposed 80 unit affordable housing rental development to be constructed on a /- acre site located at 6549 Londontowne Lane, Jacksonville, Duval County, Florida Ability Housing, Inc. ( Applicant ) applied for a $750,000 Florida Housing Finance Corporation ( FHFC or Florida Housing ) Pre-Development Loan Program ( PLP ) loan on May 10, The assigned Technical Assistance Provider ( TAP ) recommended a PLP loan in the amount of $750,000 of which $450,000 is requested for site acquisition. The remaining $300,000 in requested PLP funds will be used for eligible predevelopment costs. On June 16, 2017, the FHFC Board of Directors approved the recommended loan amount subject to review of the requested acquisition portion by the assigned Credit Underwriter. First Housing Development Corporation ( First Housing, Credit Underwriter, or Servicer ) is recommending approval of the acquisition portion of the request. The PLP Loan will bear an interest rate of 1% per annum. The PLP Loan is non-amortizing, with principal and interest deferred until loan maturity. The PLP loan shall mature on the earlier of (a) the date of closing on the permanent or construction loan for the Development; or (b) three years from the date of execution of the loan documents by Florida Housing or other such extended loan maturity date approved by the FHFC Board. If the Development does not obtain construction or permanent financing from Florida Housing and no Florida Housing funds remain in the Development, the compliance period shall be 15 years from the date the PLP loan is paid off. If the Development obtains construction and permanent financing from other Florida Housing programs, then the most restrictive compliance requirement shall be in effect and compliance monitoring shall be performed through those programs. Florida Housing may extend the term of

2 the PLP loan for an additional period if circumstances exist and if such extension would not jeopardize Florida Housing s security interest. The Applicant has committed to set aside a minimum of 50% of total units (40 units) set aside for Homeless individuals or families as Permanent Supportive Housing and 50% of the total units (40 units) set aside for Persons with a Disabling Condition as Permanent Supportive Housing. In addition, 20% of the units set aside for Persons with Disabling Conditions (8 units) will be set aside for those who are either (i) in institutions or community residential care, or (ii) Chronically Homeless and are assessed as vulnerable by the community s homeless lead agency standards, and identified as high utilizers of public resources due to their homelessness. Eight (8) units will also be set aside for households with an income at or below 22% of the Area Medium Income ( AMI ) and who are (a) Homeless, (b) Persons with a Disabling Condition, and/or (c) Persons with Disabling Conditions who are either (i) or (ii) as noted above. The minimum AMI set asides chosen by the Applicant are as follows: 20% of the units (16 units) set aside for persons at 50% or less of the AMI, as determined by HUD, with adjustments for family size. 100% of the units (80 units) set aside for persons at 60% or less of the AMI, as determined by HUD, with adjustments for family size. 10% of the units (8 units) set aside for persons at 33% or less of the AMI, (ELI for Duval County) as determined by HUD, with adjustments for family size. Within the FHFC RFA application the Applicant selected the following three subpopulations: Adult persons requiring independent living services in order to maintain housing or develop independent living skills and who have a Disabling Condition that currently impairs, or is likely to impair, their physical mobility. Adult persons requiring independent living services in order to maintain housing or develop independent living skills and who have a Disabling Condition that neither currently impairs, nor is likely to impair, their physical mobility, such as persons with a mental illness. Persons receiving benefits under the Social Security Disability Insurance (SSDI) program or the Supplemental Security Income (SSI) program or from Veterans disability benefits. The Applicant proposes to utilize PLP funds to finance the acquisition of the site and certain other pre-development activities. It is anticipated that the construction and permanent financing will be provided primarily through a construction loan, State Apartment Incentive Loan ( SAIL ), LONDONTOWNE LANE Page 2

3 National Housing Trust Funds ( NHTF ), 9% Housing Credits ( 9% HC ), and deferred developer fees. For the Applicant to utilize PLP funds for the purchase of land, a Preliminary Assessment must be performed. The Preliminary Assessment is primarily limited to a review of the Application and Project Development Plan, an analytical review of the Development s sources and uses of funds, a determination that PLP funds drawn for acquisition costs are adequately collateralized, and the performance of limited due diligence relating to the Applicant. The Project Development Plan has been separately reviewed and approved by Mrs. Gladys Cook, TAP with the Florida Housing Coalition. The results of First Housing s findings are presented below. Borrower Information The Applicant is a 501 ( c ) (3) Not-for-Profit Corporation organized on October 9, 1991 under the laws of the State of Florida. The Articles of Incorporation state that their mission is to develop, own, and operate affordable housing; to address the redevelopment of disadvantaged communities; to support and coordinate programs for adults with disabilities and homeless persons; to facilitate the development of independent living skills and community inclusion of adults with disabilities; to solicit, receive, and disburse funds in support of its own and similar programs and organizations. The Applicant currently administers four (4) US HUD Continuum of Care funded Permanent Supportive Housing Developments, consisting of 104 units of scattered site and site based housing for persons who were chronically homeless. In addition, they operate two housing developments funded by Lutheran Services Florida. Ability Housing has worked in the Jacksonville community for over twenty-five (25) years, and has partnerships with other local community organizations serving low-income and special needs populations. First Housing reviewed a satisfactory Credit History for the Applicant through a Dun and Bradstreet Report. First Housing has reviewed, December 31, 2015, and December 31, 2016, audited year-end financial statements and found them to be satisfactory. Development Cost The Applicant s budgeted Total Development Costs ( TDC ) totals $18,164,819 ( $227,060 per unit). Development costs include land, infrastructure, site-work, construction, pre-development, general development costs, impact/permit fees, developer fee, hard & soft contingencies and an LONDONTOWNE LANE Page 3

4 anticipated $1,560,000 required Operating Deficit Reserve. The Credit Underwriter has made minor adjustments to these anticipated costs based upon rule requirements for hard and soft costs contingencies, maximum general contractor fees and developer fees. A summary of the TDC is presented in. First Housing has been provided with an executed Purchase and Sale Agreement ( PSA ) dated April 18, 2017, between FEIGA II Londontowne Land, LP ( Seller ) and Ability Londontowne, LLC ( Purchaser ). The PSA is for $450,000 and calls for closing within thirty (30) days after Purchaser receives notice of FHFC s Board approval of the financing commitment, which Board approval shall not occur prior to August 31, The PLP application was submitted under the Applicant, Ability Housing, Inc. The SAIL and 9% Housing Credit Application has been submitted under the name of a Limited Liability Company, Ability Londontowne, LLC. Closing of the land acquisition will be conditioned upon a satisfactory assignment of the contract to the Applicant. Hard construction costs, exclusive of contingency but including infrastructure, site work, recreational facilities, and Payment and Performance Bond totals approximately $10,877,418 or $135,968 per unit. The Applicant notes that the plans and specifications have not been finalized at this time. The construction design phase will be completed once the Applicant has acquired the property; therefore, the amount included in the budget is an estimate of construction costs. Appraisal An appraisal dated July 19, 2017, completed by Meridian Appraisal Group, Inc. ( Meridian ) indicates an As Is market value of the fee simple interest in the site of $680,000. The site is square in shape and contains /- acres. The Development will have frontage of 500' along the north side of Londontowne Lane and 500' along the south side of Watergate Lane. The site will have one access pointe along the north side of Londontowne Lane. A portion of the site appears to be located within Zone AE with the balance in Zone X. Zone X is an area outside the 100 year flood plain and Zone AE is an area within the 100 year flood plain; mandatory flood insurance purchase requirements might apply. It is zoned RMD-D, Residential Medium Density, by the City of Jacksonville. The future land use designation is Medium Density Residential ( MDR ). Based on this information, we are of the opinion that the Development site is suitable for multifamily development. The surrounding neighborhood has a significant number of multifamily residential properties. The majority of the apartment units are located in nearby Orange Park, south of the subject neighborhood, with the older developments located primarily along Park Avenue and Blanding Blvd. Surrounding uses include a few offices, retail stores, light industrial, and churches. The Development is located in a well-established residential area with access to shopping, employment and other commercial services. All necessary commercial services are available to LONDONTOWNE LANE Page 4

5 support the site and transportation linkages serve the neighborhood and connect the Development to the region. The appraiser has concluded that the highest and best use of the property as vacant is for future multifamily development. A Phase I Environmental Site Assessment ( ESA ) and a Geotechnical Report have not been engaged by the Applicant. The Applicant intends to utilize PLP funding to satisfy these requirements. Proposed Financing Sources The Applicant anticipates receiving a short term first mortgage construction loan of $6,353,000, $4,000,000 in SAIL, $1,414,400 in NHTF, approximately $4,780,000 in 9% Housing Credits, and deferred developer fees for construction period financing. The permanent period financing would consist of $4,000,000 in SAIL, $1,414,400 in NHTF and approximately $12,750,419 in 9% HC. There would also be approximately $2,200,000 in available developer fee to fill any potential gap in permanent financing. PLP Budget The TAP has provided an approved PLP budget, as of May 23, 2017, totaling $750,000 which is presented in Exhibit A. Total acquisition costs are $450,000 and will be funded from FHFC PLP funds. The non-acquisition portion of the PLP loan totaling $300,000 will be used for eligible predevelopment activities. Requested amounts for non-acquisition pre-development activities appear reasonable and are reimbursable under the PLP program. Conclusion and Recommendation First Housing s review of the development costs indicate that the assumptions utilized appear reasonable and consistent. Further, the Applicant has sufficient experience and financial strength for this type of Development. First Housing recommends approval of the PLP loan in the amount of $750,000, subject to the following conditions: 1. Satisfactory review of an executed assignment of the land PSA from Buyer to Applicant. LONDONTOWNE LANE Page 5

6 2. Satisfactory resolution of any outstanding past due and/or noncompliance issues by the closing of the PLP loan. 3. Payment of any outstanding arrearages to the Corporation, its legal counsel, Servicer or any agent or assignee of the Corporation for past due issues applicable to the development team (Applicant or Developer or Principal, Affiliate or Financial Beneficiary). 4. Any other reasonable requests by FHFC, its counsel, or the Servicer. LONDONTOWNE LANE Page 6

7 Exhibit A PLP Loan Budget PLP Sources FHFC PLP Loan $750,000 PLP Uses: Acquisition $450,000 Architect/Engineer $215,461 Appraisal $5,000 Environmental Review $3,200 FHFC Application Fee $3,000 FHFC Underwriting $17,431 Green Building Certification $6,500 Insurance $3,000 Legal $3,000 Market Study $5,400 Marketing and Advertising $500 Plan and Cost Review $3,025 Real Estate Taxes $3,500 Soil Test $10,000 Survey $7,500 Title Search/ Title Insurance $4,850 PLP Soft Cost Contingency $8,633 Total $750,000 LONDONTOWNE LANE Page 7

8 Total Development Budget Sources: FHFC SAIL $4,000,000 FHFC NHTF $1,414,400 9% Housing Credits $12,750,419 Total $18,164,819 Uses: Hard Constructiuon Costs $9,541,595 GC Fee $1,335,823 Acquisition Land Costs $450,000 Architect/Engineer $290,500 Accounting Fees $16,500 Appraisal $12,800 Construction Closing Costs $50,000 Construction Loan Origination Fee $63,524 Hard Cost Contingency $543,870 Developer Fee $2,805,998 Environmental $3,200 FHFC Application Fee $3,000 FHFC Underwriting $24,764 FHFC Compliance Fee $533,028 SAIL Loan Fees $31,695 PLP Loan ands Costs $12,266 Green Building Certification $30,000 Housing Credit Syndicator Fees $55,000 Impact Fees $42,353 Inspection Fees $24,052 Insurance $7,000 Interest Expense $145,434 Legal $95,000 Market Study $5,400 Marketing and Advertising $2,500 Operating Deficit Reserves $1,560,000 Permanent Loan Origination Fee $40,000 Permanent Loan Closing Costs $13,000 Permits $8,370 Plan and Costs Review $3,025 Real Estate Taxes $11,780 Soft Cost Contingency $72,842 Soil Test $10,000 Survey $12,500 Title Insurance $133,000 Utility Connection Fee $75,000 Furniture, Fixtures and Equipment $100,000 Total $18,164,819 LONDONTOWNE LANE Page 8

Boulevard Art Lofts Page 1

Boulevard Art Lofts Page 1 March 2, 2015 Mr. Robert Dearduff, Special Programs Administration Florida Housing Finance Corporation City Centre Building 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 Re: Boulevard