Section 5, Line 8 Please attach required documentation verifying this value (e.g. appraisal).

Transcription

1 Section 5, Line 8 Please attach required documentation verifying this value (e.g. appraisal). Please find attached Summary Narrative Appraisals of the 13 BHA public housing properties prepared by Certified General Appraisal Consultant Services, dated November The total appraisal value of the 13 properties is $9,615,000 as follows: Address # of Appraised Value Units Francisco St. 9 $1,150, Francisco St. 7 $952, Channing Way/2374 West St. 2 $460, Dwight Way 2 $440, Dwight Way/2450 Valley St. 2 $440, Rose St. * 2 $463, Martin L. King Jr. Way * 4 $1,061, Jones St * 2 $355, th St. * 3 $444, Ward St. 12 $1,420, Virginia St. 7 $1,300, Sojourner Truth Ct. * 7 $875, A & 2798 B Sacramento St. * 2 $252,676 Total 61 $9,615,000 * Three of the BHA properties (Rose/MLK, Jones/7 th, and Sojourner Truth/Sacramento) are split into two separate addresses in the PIC system. However, the properties sit on one parcel and were appraised as one property. For the purposes of matching the appraisals with the PIC inventory, we have pro-rated the value of those combined parcels by unit square footage.

2 File No NF FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $ 1,150,000 or 127,745/Unit : Driveby Appraisal Form Subject Photos: Front, Rear and Street... 5 Comparable Photos Description of Building and Property Improvements... 7 Subject Plat Map... 8 Surplus Land Addendum... 9 Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Location Map for Subject and Comps Scope of Work for this Assignment Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

3 Desktop Underwriter Quantitative Analysis Appraisal Report File No NF 1 THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY FRANCISCO STREET City BERKELEY State CA Zip Code Legal Description SEE LEGAL ADDENDUM (THIS IS A USPAP SUMMARY REPORT PER DRIVEBY SCOPE OCounty ALAMEDA Assessor's Parcel No Tax Year R.E. Taxes $ EXEMPT PUBSpecial Assessments $ Borrower Current Owner BERKELEY UNIFIED SCHOOL DIST Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (9 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 626 E1 Census Tract /3 Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 749 Low 29 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 1,510 High 99 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 2.5.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED. 1, Dimensions 75FT X FT Site area 14,946 Shape RECTANGULAR Specific zoning classification and description R 2 RESTRICTED TWO FAMILY RESIDENTIAL. SEE GR LEASE DISCUSSION IN IMP. DESCRIP Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$31 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 1,429,750 to $ 1,505,000. My research revealed a total of 3 listings ranging in list price from $ 752,745 to $ 1,520,050. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE FRANCISCO STR 1335 SHATTUCK AVENUE 2716 WEBSTER STREET nd Street Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 1.43 miles 2.50 miles 2.15 miles Sales Price $ MKT VALUE $ 1,505,000 $ 1,100,000 $ 749,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources DEED DOC # DEED DOC # MLS# (ACT. LISTING) VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 14,946 2 STO AP BLDG 29 AVERAGE BANK LOAN 74 2/1/08 EQUAL STO AP BD/EQ 99 EQUAL 109,300 +8, ,000 BANK LOAN 40 7/17/08 INFERIOR STO AP BD/EQ 49 EQUAL 59, ,000 +9, ,000 SALE/LIST=99% 44 10/14/09 INFERIOR STO AP BD/EQ 94 EQUAL 7,500 3, , , ,500 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,500 Gross Living Area 10,740 Sq. Ft. 8,399 Sq. Ft. +35,115 5,053 Sq. Ft. +85,305 6,022 Sq. Ft. +70,770 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 9 YES YES 30 52,500 YES YES 18 22,500 YES YES 6 +7,500 NO. OF UNITS PRICE/UNIT $ N/A 115, , ,000 Net Adj. (total) + $ 90,815 + $ 75,355 + $ 136,660 Adjusted Sales Price Net 6.0 % Net 6.9 % Net 18.2 % of Comparables Gross 15.5 % $ 1,414,185 Gross 21.8 % $ 1,175,355 Gross 21.2 % $ 885,660 Date of Prior Sale 3/1/1986 7/2/1990 6/14/04 2/2/1986 Price of Prior Sale $ 99 YR LEASE $ UNKN NO PUBLIC DATA $ 980,000 $ UNKN NO PUBLIC DATA Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: BERKELEY UNIFIED SCHOOL DISTRICT HAS OWNED THIS PROPERTY SINCE MARCH 1, 1986 PER ALAMEDA CO. RECORDS. Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. SALE #1SALE #2SALE #3 REQUIRED SURPLUS LAND ADJUSTMENTS DUE TO SITE SIZE DIFFERENCES. SEE SURPLUS LAND ADDENDUM. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ ,BASED ON CONSIDERING RELEVANT MARKET DATA. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 1,150,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No NF 1 Page #2 Fannie Mae Form

4 File No NF 1 Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No NF 1 Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

5 File No NF 1 Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No NF 1 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: November 28, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: FRANCISCO STREET BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 BERKELEY HOUSING AUTHORITY MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

6 Subject Photos: Front, Rear and Street FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code File No NF 1 Page #5 Subject Front FRANCISCO STREET Sales Price MKT VALUE G.B.A. Age/Yr.Blt. 29 Subject Side View (Driveby Appraisal) Subject Street Form PICPIX.SC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

7 Comparable Photo Page FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code File No NF 1 Page #6 Comparable SHATTUCK AVENUE Prox. to Subject 1.43 miles Sale Price 1,505,000 Gross Living Area 8,399 Total Rooms 38 Total Bedrooms 13 Total Bathrooms 13 Location EQUAL View Site 8765 Quality Age 99 Comparable WEBSTER STREET Prox. to Subject 2.50 miles Sale Price 1,100,000 Gross Living Area 5,053 Total Rooms 15 Total Bedrooms 10 Total Bathrooms 5 Location INFERIOR View Site 6800 Quality Age 49 Comparable nd Street Prox. to Subject 2.15 miles Sale Price 749,000 Gross Living Area 6,022 Total Rooms 21 Total Bedrooms 9 Total Bathrooms 7 Location INFERIOR View Site 2835 Quality Age 94 Form PICPIX.CR "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

8 on of Building and Property Impr File No NF 1 Page #7 File No NF FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 10,470 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. Ownership History The subject property is under a 99 year ground lease to the Berkeley Housing Authority (BHA) from the Berkeley Unified School District (BUSD). This appraisal derived the market value of the subject property based on a unencumber "Fee Simple" interest and not on the "Leasehold" interest. Because a current sale of the leasehold interest would carry with it the existing lease and since the lease is for a term of 99 years with 76 years remaining (lease began 1986), and at the end of the lease reversion of buildings and improvements go back to the Berkeley Unified School District, a Fee Simple interest value would be the most probable selling price set by the BHA and around that same value would be the most likely price a potential buyer would be willing to pay for the right to own the leasehold interest in the property. The present value of the ground lease is minor compared to the value of the present value of the buildings with their earnings potential over time. And there are 76 years left on the ground lease. Therefore, it would makes sense for the lessee to sell its interest based on the full value of the building and land due to the long term nature of the existing ground lease. There were an adequate number of multi family sales to establish the present market value of the subject property based solely on the sales comparison method. Traditionally, the income method is employed. However, due to the number of verifiable multi family sales, the value produced by the sales comparison method is judged to be accurate, reliable and credible. The subject has the following unit breakdown per Berkeley Housing Authority: LIPH / RHC P Prop. # Unit # # BR # Bath Type Approx. Sq. Footage APN # Building Type LIPH Francisco St. 4 2 B townhouse 1, LIPH Francisco St. 3 2 A townhouse 1, LIPH Francisco St. 3 2 A townhouse 1, LIPH Francisco St. 3 2 A townhouse 1, LIPH Francisco St. 4 2 B townhouse 1, LIPH Francisco St. 4 2 B townhouse 1, LIPH Francisco St. 3 2 A townhouse 1, LIPH Francisco St. 3 2 A townhouse 1, LIPH Francisco St. 4 2 B townhouse Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

9 Subject Plat Map File No NF 1 Page # FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

10 Surplus Land Addendum File No NF 1 Page #9 File No NF FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

11 for Market Conditions Adjustmen File No NF 1 Page #10 File No NF FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

12 Berkeley Rent Control Addendum File No NF 1 Page #11 File No NF FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

13 Berkeley Rent Control Addendum File No NF 1 Page #12 File No NF FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

14 Location Map for Subject and Comps File No NF 1 Page # FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

15 Scope of Work for this Assignmen File No NF 1 Page #14 File No NF FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

16 File No NF 1 Page #15 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

17 File No NF 1 Page #16 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: FRANCISCO STREET, BERKELEY, CA INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: November 28, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

18 File No RB/RB FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $ 952,000 or $135,949/Unit : Driveby Appraisal Form Subject Photos: Front, Rear and Street... 5 Description of Building and Property Improvements... 6 Comparable Photos Surplus Land Addendum... 8 Support for Market Conditions Adjustment (Time)... 9 Berkeley Rent Control Addendum Scope of Work for this Assignment Location Map Plat Map Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

19 Desktop Underwriter Quantitative Analysis Appraisal Report File No RB/RB THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY FRANCISCO STREET City BERKELEY State CA Zip Code Legal Description SEE LEGAL ADDENDUM (THIS IS A USPAP SUMMARY REPORT PER DRIVEBY SCOPE OCounty ALAMEDA Assessor's Parcel No Tax Year R.E. Taxes $ EXEMPT PUBSpecial Assessments $ Borrower Current Owner BERKELEY UNIFIED SCHOOL DIST Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (7 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 626 E1 Census Tract /3 Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 729 Low 49 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 1,510 High 99 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 2.41.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED. 1, Dimensions 75FT X 220FT Site area 16,500 Shape RECTANGULAR Specific zoning classification and description R 2 RESTRICTED TWO FAMILY RESIDENTIAL SEE GR LEASE DISCUSSION IN IMP. DESCRIP Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$23 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 1,429,750 to $ 1,505,000. My research revealed a total of 3 listings ranging in list price from $ 732,645 to $ 1,520,050. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE FRANCISCO STR 1335 SHATTUCK AVENUE 2716 WEBSTER STREET 1523 FAIRVIEW STREET Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 1.32 miles 2.41 miles 1.75 miles Sales Price $ MKT VALUE $ 1,505,000 $ 1,100,000 $ 729,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources DEED DOC # DEED DOC # DEED DOC# VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 16,500 2 STO AP BLDG 49 AVERAGE BANK LOAN 74 2/1/08 EQUAL STO AP BD/EQ 99 EQUAL 109,300 +9, ,000 BANK LOAN 40 7/17/08 INFERIOR STO AP BD/EQ 49 EQUAL 59, , , BANK LOAN 88 07/29/08 INFERIOR STO AP BD/EQ 63 EQUAL 38, , , ,400 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,000 Gross Living Area 8,000 Sq. Ft. 8,399 Sq. Ft. 5,985 5,053 Sq. Ft. +44,205 4,396 Sq. Ft. +54,060 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 7 YES YES 1 +15,000 YES YES 5 +5,000 YES YES 5 +5,000 NO. OF UNITS PRICE/UNIT $ N/A 115, , ,500 Net Adj. (total) + $ 77,855 + $ 52,305 + $ 75,030 Adjusted Sales Price Net 5.2 % Net 4.8 % Net 10.3 % of Comparables Gross 10.1 % $ 1,427,145 Gross 15.6 % $ 1,152,305 Gross 20.9 % $ 804,030 Date of Prior Sale 3/1/1986 7/2/1990 6/14/04 5/27/2004 Price of Prior Sale $ 99 YR LEASE $ UNKN NO PUBLIC DATA $ 980,000 $ $725,000 Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: BERKELEY UNIFIED SCHOOL DISTRICT HAS OWNED THIS PROPERTY SINCE MARCH 1, 1986 PER ALAMEDA CO. RECORDS. Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. SALE #1SALE #2SALE #3 REQUIRED SURPLUS LAND ADJUSTMENTS DUE TO SITE SIZE DIFFERENCES. SEE SURPLUS LAND ADDENDUM. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ ,BASED ON CONSIDERING RELEVANT MARKET DATA. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 952,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No RB/RB Page #2 Fannie Mae Form

20 File No RB/RB Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No RB/RB Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

21 File No RB/RB Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No RB/RB 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 02, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: FRANCISCO STREET BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

22 Subject Photos: Front, Rear and Street FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code File No RB/RB Page #5 Subject Front FRANCISCO STREET Sales Price MKT VALUE G.B.A. Age/Yr.Blt. 49 Subject Side View (Driveby Appraisal) Subject Street Form PICPIX.SC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

23 on of Building and Property Impr File No RB/RB Page #6 File No RB/RB FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 8,000 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. Ownership History The subject property is under a 99 year ground lease to the Berkeley Housing Authority (BHA) from the Berkeley Unified School District (BUSD). This appraisal derived the market value of the subject property based on a unencumber "Fee Simple" interest and not on the "Leasehold" interest. Because a current sale of the leasehold interest would carry with it the existing lease and since the lease is for a term of 99 years with 76 years remaining (lease began 1986), and at the end of the lease reversion of buildings and improvements go back to the Berkeley Unified School District, a Fee Simple interest value would be the most probable selling price set by the BHA and around that same value would be the most likely price a potential buyer would be willing to pay for the right to own the leasehold interest in the property. The present value of the ground lease is minor compared to the value of the present value of the buildings with their earnings potential over time. And there are 76 years left on the ground lease. Therefore, it would makes sense for the lessee to sell its interest based on the full value of the building and land due to the long term nature of the existing ground lease. There were an adequate number of multi family sales to establish the present market value of the subject property based solely on the sales comparison method. Traditionally, the income method is employed. However, due to the number of verifiable multi family sales, the value produced by the sales comparison method is judged to be accurate, reliable and credible. The subject has the following unit breakdown per Berkeley Housing Authority: LIP H/ RHC P Pro p. # Unit # # BR # Bath Typ e Approx. Sq. Footage APN # Building Type LIPH Francisco St. 3 2 H single level 1, LIPH Francisco St. 3 2 C townhouse 1, LIPH Francisco St. 4 2 D townhouse 1, LIPH Francisco St. 3 2 C townhouse 1, LIPH Francisco St. 4 2 D townhouse 1, LIPH Francisco St. 3 2 C townhouse 1, LIPH Francisco St. 4 2 D4 1, townhouse Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

24 Comparable Photos FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code File No RB/RB Page #7 Comparable SHATTUCK AVENUE Sales Price 1,505,000 G.B.A. Age/Yr. Blt. 99 Comparable WEBSTER STREET Sales Price 1,100,000 G.B.A. Age/Yr. Blt. 49 Comparable FAIRVIEW STREET Sales Price 729,000 G.B.A. Age/Yr. Blt. 63 Form PICPIX.CC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

25 Surplus Land Addendum File No RB/RB Page #8 File No RB/RB FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

26 for Market Conditions Adjustmen File No RB/RB Page #9 File No RB/RB FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

27 Berkeley Rent Control Addendum File No RB/RB Page #10 File No RB/RB FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

28 Berkeley Rent Control Addendum File No RB/RB Page #11 File No RB/RB FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

29 Scope of Work for this Assignmen File No RB/RB Page #12 File No RB/RB FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

30 Location Map File No RB/RB Page # FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

31 Plat Map File No RB/RB Page # FRANCISCO STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

32 File No RB/RB Page #15 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

33 File No RB/RB Page #16 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: FRANCISCO STREET, BERKELEY, CA INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: December 02, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

34 File No GS/GS 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $440,000 or $220,000 /Unit : Driveby Appraisal Form Subject Photos: Front, and Street... 5 Description of Building and Property Improvements... 6 Comparable Photos Location Map... 8 Plat Map... 9 Surplus Land Addendum Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Scope of Work for this Assignment Subject Legal Description Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

35 Desktop Underwriter Quantitative Analysis Appraisal Report File No GS/GS THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY. 1360, 1370 DWIGHT WAY City BERKELEY State CA Zip Code Legal Description SEE LEGAL DESCRIPTION AND SCOPE OF WORK ATTACHED County ALAMEDA Assessor's Parcel No Tax Year R.E. Taxes $ EXEMPT PUBSpecial Assessments $ Borrower Current Owner BERKELEY HOUSING AUTHORITY Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (2 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 629 F3 Census Tract Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 346 Low 29 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 520 High 109 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 1.17.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED Dimensions IRREGULAR, SEE PLAT MAP ATTACH. Site area 5,603 Shape IRREGULAR Specific zoning classification and description R 2 RESTRICTED TWO FAMILY RESIDENTIAL Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$31 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 494,000 to $ 520,000. My research revealed a total of 3 listings ranging in list price from $ 347,730 to $ 525,200. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE , 1370 DWIGHT WAY TH ST 1893 ALCATRAZ AVE 1821 FAIRVIEW ST Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 0.68 miles 1.17 miles 1.00 miles Sales Price $ MKT VALUE $ 520,000 $ 346,000 $ 430,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources MLS# DEED DOC # MLS# VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 5,603 2 STO AP BLDG 29 AVERAGE BANK LOAN 56 12/3/09 EQUAL 5000 VICTORIAN APTS 105 INFERIOR , , ,000 BANK LOAN 12 7/30/09 EQUAL STO AP BD/EQ 61 EQUAL 4,500 4, ,200 BANK LOAN 175 6/09/09 EQUAL STO AP BD/EQ 109 EQUAL 8,000 +2, ,000 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,500 Gross Living Area 2,351 Sq. Ft. 1,822 Sq. Ft. +7,935 2,318 Sq. Ft. 2,588 Sq. Ft. 3,555 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 3 YES YES 2 +2,500 YES NO 3 YES NO 2 +2,500 NO. OF UNITS PRICE/UNIT $ N/A 260, , ,330 Net Adj. (total) + $ 50,945 + $ 2,590 + $ 3,855 Adjusted Sales Price of Comparables Net Gross % % $ 570,945 Net Gross % % $ 343,410 Net Gross % % $ 433,855 Date of Prior Sale 11/4/1986 UNKN NO PUBLIC DATA UNKN NO PUBLIC DATA UNKN NO PUBLIC DATA Price of Prior Sale $ UNKNOWN $ UNKN NO PUBLIC DATA $ UNKN NO PUBLIC DATA $ UNKN NO PUBLIC DATA Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: CITY OF BERKELEY AND NOW BERKELEY HSE AUTH. HAS OWNED PROP. SINCE 11/04/86 (1360 DWIGHT WY). Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ BASED ON CONSIDERING RELEVANT MARKET DATA INCLUDING ADJ. GRID. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 440,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No GS/GS Page #2 Fannie Mae Form

36 File No GS/GS Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No GS/GS Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

37 File No GS/GS Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No GS/GS 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 08, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: 1360, 1370 DWIGHT WAY BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 BERKELEY HOUSING AUTHORITY MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

38 Subject Photos: Front, and Street 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code File No GS/GS Page #5 Subject Front 1360, 1370 DWIGHT WAY Sales Price MKT VALUE Gross Living Area 2,351 Total Rooms 11 Total Bedrooms 7 Total Bathrooms 4 Location AVERAGE View Site 5,603 Quality Age 29 Rear DRIVEBY APPRAISAL Subject Street Form PICPIX.SR "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

39 on of Building and Property Impr File No GS/GS Page #6 File No GS/GS 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 2351 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. The subject has the following unit breakdown per Berkeley Housing Authority: Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

40 Comparable Photos , 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code File No GS/GS Page # TH ST Sales Price G.B.A. Age/Yr. Blt. Comparable 1 520, Comparable ALCATRAZ AVE Sales Price 346,000 G.B.A. Age/Yr. Blt. 61 Comparable FAIRVIEW ST Sales Price 430,000 G.B.A. Age/Yr. Blt. 109 Form PICPIX.CC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

41 Location Map File No GS/GS Page #8 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

42 Plat Map File No GS/GS Page #9 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

43 Surplus Land Addendum File No GS/GS Page #10 File No GS/GS 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

44 for Market Conditions Adjustmen File No GS/GS Page #11 File No GS/GS 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

45 Berkeley Rent Control Addendum File No GS/GS Page #12 File No GS/GS 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

46 Berkeley Rent Control Addendum File No GS/GS Page #13 File No GS/GS 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

47 Scope of Work for this Assignmen File No GS/GS Page #14 File No GS/GS 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

48 Subject Legal Description File No GS/GS Page #15 File No GS/GS 1360, 1370 DWIGHT WAY City BERKELEY County ALAMEDA State CA Zip Code SUBJECT LEGAL DESCRIPTION Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

49 File No GS/GS Page #16 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

50 File No GS/GS Page #17 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: 1360, 1370 DWIGHT WAY, BERKELEY, CA INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: December 08, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

51 File No NF/NF 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $440,000 or $220,000 /Unit : Driveby Appraisal Form Description of Building and Property Improvements... 5 Subject Photos: Front, and Street... 6 Comparable Photos Location Map... 8 Plat Map... 9 Surplus Land Addendum Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Scope of Work for this Assignment Subject Legal Description Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

52 Desktop Underwriter Quantitative Analysis Appraisal Report File No NF/NF THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY State CA Zip Code Legal Description SEE LEGAL DESCRIPTION AND SCOPE OF WORK ATTACHED County ALAMEDA Assessor's Parcel No Tax Year R.E. Taxes $ EXEMPT PUBSpecial Assessments $ Borrower Current Owner BERKELEY HOUSING AUTHORITY Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (2 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 629 F3 Census Tract Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 346 Low 29 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 520 High 109 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 1.17.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED Dimensions IRREGULAR, SEE PLAT MAP ATTACH. Site area 5,261 Shape IRREGULAR Specific zoning classification and description R 2 RESTRICTED TWO FAMILY RESIDENTIAL Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$33 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 494,000 to $ 520,000. My research revealed a total of 3 listings ranging in list price from $ 347,730 to $ 525,200. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE DWIGHT WAY AND TH ST 1893 ALCATRAZ AVE 1821 FAIRVIEW ST Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 0.69 miles 1.17 miles 1.00 miles Sales Price $ MKT VALUE $ 520,000 $ 346,000 $ 430,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources MLS# DEED DOC # MLS# VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 5,261 2 STO AP BLDG 29 AVERAGE BANK LOAN 56 12/3/09 EQUAL 5000 VICTORIAN APTS 105 INFERIOR , , ,000 BANK LOAN 12 7/30/09 EQUAL STO AP BD/EQ 61 EQUAL 4,500 2, ,200 BANK LOAN 175 6/09/09 EQUAL STO AP BD/EQ 109 EQUAL 8,000 +1, ,000 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,500 Gross Living Area 2,309 Sq. Ft. 1,822 Sq. Ft. +7,305 2,318 Sq. Ft. 2,588 Sq. Ft. 4,185 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 3 YES YES 2 +2,500 YES NO 3 YES NO 2 +2,500 NO. OF UNITS PRICE/UNIT $ N/A 260, , ,330 Net Adj. (total) + $ 48,945 + $ $ 1,855 Adjusted Sales Price of Comparables Net Gross % % $ 568,945 Net Gross % % $ 345,350 Net Gross % % $ 431,855 Date of Prior Sale 4/4/87 UNKN NO PUBLIC DATA UNKN NO PUBLIC DATA UNKN NO PUBLIC DATA Price of Prior Sale $ UNKNOWN $ UNKN NO PUBLIC DATA $ UNKN NO PUBLIC DATA $ UNKN NO PUBLIC DATA Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: CITY OF BERKELEY AND NOW BERKELEY HSE AUTH. HAS OWNED PROP. SINCE 2/4/87 (1371 DWIGHT WY & 2450 VALLEY ST). Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. SALE #2 REQUIRED SURPLUS LAND ADJUSTMENTS DUE TO SITE SIZE DIFFERENCES. SEE SURPLUS LAND ADDENDUM. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ BASED ON CONSIDERING RELEVANT MARKET DATA INCLUDING ADJ. GRID. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 440,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No NF/NF Page #2 Fannie Mae Form

53 File No NF/NF Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No NF/NF Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

54 File No NF/NF Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No NF/NF 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 08, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: 1371 DWIGHT WAY AND 2450 VALLEY STREET BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 BERKELEY HOUSING AUTHORITY MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

55 on of Building and Property Impr File No NF/NF Page #5 File No NF/NF 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 2309 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. The subject has the following unit breakdown per Berkeley Housing Authority: Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

56 Subject Photos: Front, and Street 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code File No NF/NF Page #6 Subject Front 1371 DWIGHT WAY AND 2450 VALLEY STREE Sales Price MKT VALUE Gross Living Area 2,309 Total Rooms 11 Total Bedrooms 7 Total Bathrooms 4 Location AVERAGE View Site 5,261 Quality Age 29 Rear DRIVEBY APPRAISAL Subject Street Form PICPIX.SR "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

57 Comparable Photos DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code File No NF/NF Page # TH ST Sales Price G.B.A. Age/Yr. Blt. Comparable 1 520, Comparable ALCATRAZ AVE Sales Price 346,000 G.B.A. Age/Yr. Blt. 61 Comparable FAIRVIEW ST Sales Price 430,000 G.B.A. Age/Yr. Blt. 109 Form PICPIX.CC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

58 Location Map File No NF/NF Page # DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

59 Plat Map File No NF/NF Page # DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

60 Surplus Land Addendum File No NF/NF Page #10 File No NF/NF 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

61 for Market Conditions Adjustmen File No NF/NF Page #11 File No NF/NF 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

62 Berkeley Rent Control Addendum File No NF/NF Page #12 File No NF/NF 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

63 Berkeley Rent Control Addendum File No NF/NF Page #13 File No NF/NF 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

64 Scope of Work for this Assignmen File No NF/NF Page #14 File No NF/NF 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

65 Subject Legal Description File No NF/NF Page #15 File No NF/NF 1371 DWIGHT WAY AND 2450 VALLEY STREET City BERKELEY County ALAMEDA State CA Zip Code SUBJECT LEGAL DESCRIPTION Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

66 File No NF/NF Page #16 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

67 File No NF/NF Page #17 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: 1371 DWIGHT WAY AND 2450 VALLEY STREET, BERKELEY, CA INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: December 08, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

68 File No KF 1323 CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $460,000 or $230,000/Unit : 2 Units Driveby Appraisal Form Subject Photos: Front, Rear and Street... 5 Description of Building and Property Improvements... 6 Comparable Photos Location Map for Subject and Comps... 8 Subject Plat Map... 9 Surplus Land Addendum Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Scope of Work for this Assignment Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

69 Desktop Underwriter Quantitative Analysis Appraisal Report File No KF THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY CHANNING WAY & 2374 WEST STREET City BERKELEY State CA Zip Code Legal Description PARCEL MAPS 4717 LOT A (SEE SCOPE OF WORK ATTACHED) County ALAMEDA Assessor's Parcel No Tax Year EXEMPT R.E. Taxes $ EXEMPT Special Assessments $ Borrower Current Owner BERKELEY HOUSING AUTHORITY Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (2 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 626 E1 Census Tract /3 Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 349 Low 20 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 460 High 97 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 1.02.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED Dimensions 49.48FT X 100FT Site area 4,948 Shape RECTANGULAR Specific zoning classification and description R 2 RESTRICTED TWO FAMILY RESIDENTIAL Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$37 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 437,000 to $ 460,000. My research revealed a total of 3 listings ranging in list price from $ 350,745 to $ 464,600. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE 3 File No KF Page # CHANNING WAY & SACRAMENTO ST 1214 BURNETT ST TH ST Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 1.02 miles 0.74 miles 0.97 miles Sales Price $ MKT VALUE $ 396,800 $ 460,000 $ 349,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources MLS# MLS # MLS# (PENDING) VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 4,948 2 STO AP BLDG 20 AVERAGE BANK LOAN 82 9/22/09 EQUAL STO AP BD/EQ 61 EQUAL 2, ,100 BANK LOAN 125 8/21/09 EQUAL STO AP BD/EQ 97 EQUAL 4,800 +1, ,700 SALE/LIST=97% 90 10/6/09 EQUAL STO AP BD/EQ 94 INFERIOR 10,000 1, , ,920 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,500 Gross Living Area 2,374 Sq. Ft. 1,844 Sq. Ft. +7,950 2,228 Sq. Ft. +2,190 2,125 Sq. Ft. +3,735 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 0 YES YES 2 5,000 YES YES 1 2,500 YES YES 0 NO. OF UNITS PRICE/UNIT $ N/A 198, , ,500 Net Adj. (total) + $ 6,020 + $ 7,180 + $ 29,655 Adjusted Sales Price Net 1.5 % Net 1.6 % Net 8.5 % of Comparables Gross 5.8 % $ 402,820 Gross 4.7 % $ 467,180 Gross 15.3 % $ 378,655 Date of Prior Sale 3/1/1986 3/24/95 3/27/06 10/21/97 Price of Prior Sale $ UNKNOWN $ 175,000 $ 620,000 $ UNKN NO PUBLIC DATA Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: CITY OF BERKELEY AND NOW BERKELEY HSE AUTH. HAS OWNED THIS PROP. SINCE FEB 20,1987 PER ALAMEDA CO. RECORDS. Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ ,BASED ON CONSIDERING RELEVANT MARKET DATA. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 460,000, AS OF 11/25/2009. PAGE 1 OF 3 Fannie Mae Form Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

70 File No KF Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No KF Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

71 File No KF Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No KF 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 04, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: 1323 CHANNING WAY & 2374 WEST STREET BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

72 Subject Photos: Front, Rear and Street 1323 CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code File No KF Page #5 Subject Front 1323 CHANNING WAY & 2374 WEST STREET Sales Price MKT VALUE G.B.A. Age/Yr.Blt. 20 Subject Side View 2374 WEST STREET NEXT DOOR (DRIVEBY APPRAISAL) Subject Street Form PICPIX.SC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

73 on of Building and Property Impr File No KF Page #6 File No KF 1323 CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 2375 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. The subject has the following unit breakdown per Berkeley Housing Authority: Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

74 Comparable Photos CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code File No KF Page #7 Comparable SACRAMENTO ST Sales Price 396,800 G.B.A. Age/Yr. Blt. 61 Comparable BURNETT ST Sales Price 460,000 G.B.A. Age/Yr. Blt TH ST Sales Price G.B.A. Age/Yr. Blt. Comparable 3 349, Form PICPIX.CC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

75 Location Map File No KF Page # CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

76 Plat Map File No KF Page # CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

77 Surplus Land Addendum File No KF Page #10 File No KF 1323 CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

78 for Market Conditions Adjustmen File No KF Page #11 File No KF 1323 CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

79 Berkeley Rent Control Addendum File No KF Page #12 File No KF 1323 CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

80 Berkeley Rent Control Addendum File No KF Page #13 File No KF 1323 CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

81 Scope of Work for this Assignmen File No KF Page #14 File No KF 1323 CHANNING WAY & 2374 WEST STREET City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

82 File No KF Page #15 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

83 File No KF Page #16 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: 1323 CHANNING WAY & 2374 WEST STREET, BERKELEY, CA INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: December 04, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

84 File No KF/NF C TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $800,000 OR $160,000/Unit : 5 Units Driveby Appraisal Form Subject Photos: Units at th Street... 5 Subject Photos: Units at Jones Street... 6 Description of Building and Property Improvements... 7 Comparable Photos Location Map for Subject and Comps... 9 Subject Plat Map Surplus Land Addendum Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Scope of Work for this Assignment Subject Legal Description Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

85 Desktop Underwriter Quantitative Analysis Appraisal Report File No KF/NF C THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY TH STREET AND JONES STREETCity BERKELEY State CA Zip Code Legal Description SEE LEGAL DESCRIPTION AND SCOPE OF WORK ATTACHED) County ALAMEDA Assessor's Parcel No Tax Year EXEMPT R.E. Taxes $ EXEMPT PUBSpecial Assessments $ Borrower Current Owner HOUSING AUTHORITY OF THE CIT Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (5 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 629 D1 Census Tract /1 Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 789 Low 29 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 1,100 High 49 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 2.9.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED Dimensions 120 FT X 100FT Site area 12,000 Shape RECTANGULAR Specific zoning classification and description R 1A LIMITED TWO FAMILY RESIDENTIAL Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$27 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 1,045,000 to $ 1,100,000. My research revealed a total of 3 listings ranging in list price from $ 792,945 to $ 1,111,000. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE TH STREET AND TH ST 2716 WEBSTER STREET 1600 TYLER STREET Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 0.38 miles 2.90 miles 2.00 miles Sales Price $ MKT VALUE $ 795,000 $ 1,100,000 $ 789,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources MLS# DEED DOC # MLS# VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 12,000 2 STO AP BLDG 29 AVERAGE BANK LOAN /17/09 EQUAL STO AP BD/EQ 43 EQUAL , ,400 BANK LOAN 40 7/17/08 SUPERIOR STO AP BD/EQ 49 EQUAL 59,800 66,000 +6, ,000 BANK LOAN /13/09 EQUAL STO AP BD/EQ 49 EQUAL 1,000 +6, ,000 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,000 Gross Living Area 5,768 Sq. Ft. 4,937 Sq. Ft. +12,465 5,053 Sq. Ft. +10,725 5,750 Sq. Ft. Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 0 YES YES 6 15,000 YES YES 5 12,500 YES YES 5 12,500 NO. OF UNITS PRICE/UNIT $ N/A 132, ,000 98,630 Net Adj. (total) + $ 12,105 + $ 109,175 + $ 2,440 Adjusted Sales Price Net 1.5 % Net 9.9 % Net 0.3 % of Comparables Gross 5.5 % $ 807,105 Gross 15.2 % $ 990,825 Gross 3.7 % $ 791,440 Date of Prior Sale 11/21/86 11/15/09 4/25/88 1/8/96 Price of Prior Sale $ UNKNOWN $ 249,000 $ UNKN NO PUBLIC DATA $ 115,000 Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: CITY OF BERKELEY NOW BHA HAS OWNED THIS PROPERTY SINCE NOVEMBER 21, 1986 PER ALAMEDA CO. RECORDS. Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. SALE #1SALE #2SALE #3 REQUIRED SURPLUS LAND ADJUSTMENTS DUE TO SITE SIZE DIFFERENCES. SEE SURPLUS LAND ADDENDUM. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ ,BASED ON CONSIDERING RELEVANT MARKET DATA. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 800,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No KF/NF C Page #2 Fannie Mae Form

86 File No KF/NF C Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No KF/NF C Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

87 File No KF/NF C Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No KF/NF C 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 04, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: TH STREET AND JONES STREET BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

88 Subject Photos: Units at th Street File No KF/NF C Page # TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code Subject Front TH STREET AND JONES Sales Price MKT VALUE Gross Living Area 5,768 Total Rooms 27 Total Bedrooms 17 Total Bathrooms 10 Location AVERAGE View Site 12,000 Quality Age 29 UNITS AT TH Subject Rear (NO REAR DRIVEBY) Subject Street UNITS AT TH Form PICPIX.SR "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

89 Subject Photos: Units at Jones Street File No KF/NF C Page # TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code Subject Front TH STREET AND JONES Sales Price MKT VALUE Gross Living Area 5,768 Total Rooms 27 Total Bedrooms 17 Total Bathrooms 10 Location AVERAGE View Site 12,000 Quality Age 29 UNITS AT JONES Subject Rear (NO REAR DRIVEBY) Subject Street UNITS AT JONES Form PICPIX.SR "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

90 on of Building and Property Impr File No KF/NF C Page #7 File No KF/NF C TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 5769 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. The subject has the following unit breakdown per Berkeley Housing Authority: Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

91 Comparable Photos 1 3 File No KF/NF C Page # TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code TH ST Sales Price G.B.A. Age/Yr. Blt. Comparable 1 795, Comparable WEBSTER STREET Sales Price 1,100,000 G.B.A. Age/Yr. Blt. 49 Comparable TYLER STREET Sales Price 789,000 G.B.A. Age/Yr. Blt. 49 Form PICPIX.CC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

92 Location Map File No KF/NF C Page # TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

93 Plat Map File No KF/NF C Page # TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

94 Surplus Land Addendum File No KF/NF C Page #11 File No KF/NF C TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

95 for Market Conditions Adjustmen File No KF/NF C Page #12 File No KF/NF C TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

96 Berkeley Rent Control Addendum File No KF/NF C Page #13 File No KF/NF C TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

97 Berkeley Rent Control Addendum File No KF/NF C Page #14 File No KF/NF C TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

98 Scope of Work for this Assignmen File No KF/NF C Page #15 File No KF/NF C TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

99 Subject Legal Description File No KF/NF C Page #16 File No KF/NF C TH STREET AND JONES STREET City BERKELEY County ALAMEDA State CA Zip Code SUBJECT LEGAL DESCRIPTION Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

100 File No KF/NF C Page #17 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

101 File No KF/NF C Page #18 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: TH STREET AND JONES STREET, BERKELEY, CA INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: December 04, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

102 File No GS/GS MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $ 1,525,000 or $254,000/Unit : Driveby Appraisal Form Subject Photos: Front and Street... 5 Comparable Photos Subject Plat Map... 7 Description of Building and Property Improvements... 8 Surplus Land Addendum... 9 Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Location Map For Subject and Comps Scope of Work for this Assignment Subject Legal Description per Prelim Title Report Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

103 Desktop Underwriter Quantitative Analysis Appraisal Report File No GS/GS THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY MARTIN LUTHER KING JR WAY AND City BERKELEY State CA Zip Code Legal Description SEE ATTACHED LEGEL DESCRIPTION AND SCOPE OF WORK ATTACHED County ALAMEDA Assessor's Parcel No Tax Year R.E. Taxes $ EXEMPT PUBSpecial Assessments $ Borrower Current Owner BERKELEY HOUSING AUTHORITY Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (6 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 609 G7 Census Tract Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 855 Low 29 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 1,830 High 104 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 1.2.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED. 1, Dimensions X FT X 135 FT Site area 17,100 Shape RECTANGULAR Specific zoning classification and description R 2A RESTRICTED MULTI FAMILY RESIDENTIAL Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$36 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 1,733,750 to $ 1,825,000. My research revealed a total of 3 listings ranging in list price from $ 859,275 to $ 1,843,250. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE MARTIN LUTHER 1428 BONITA AVE 2015 HEARST AVE 2137 HASTE ST Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 0.08 miles 0.54 miles 1.20 miles Sales Price $ MKT VALUE $ 855,000 $ 1,825,000 $ 1,525,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources LISTING MLS# DEED DOC # (sale) PENDING SALE MLS# VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 17,100 2 STO AP BLDG 29 AVERAGE SALE/LIST=99% 81 9/18/09 EQUAL STO AP BD/EQ 102 EQUAL 8,500 6, , ,300 BANK LOAN 54 9/18/09 EQUAL STO AP BD/EQ 46 EQUAL 13, , ,700 SALE/LIST=99% 31 10/12/09 EQUAL STO AP BD/EQ 104 EQUAL 15,000 7, , ,500 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,000 Gross Living Area 6,944 Sq. Ft. 3,129 Sq. Ft. +57,225 5,760 Sq. Ft. +17,760 9,055 Sq. Ft. 31,665 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=NO SECURITY=YES 3 NO NO 3 NO NO 7 10,000 NO NO 8 12,500 NO. OF UNITS PRICE/UNIT $ N/A 285, , ,630 Net Adj. (total) + $ 80,655 + $ 18,590 + $ 34,755 Adjusted Sales Price Net 9.4 % Net 1.0 % Net 2.3 % of Comparables Gross 12.9 % $ 935,655 Gross 3.6 % $ 1,843,590 Gross 6.5 % $ 1,490,245 Date of Prior Sale 3/1/1986 5/20/2008 9/29/2009 3/14/2007 Price of Prior Sale $ UNKNOWN $ UNKN NO PUBLIC DATA $ UNKN NO PUBLIC DATA $ 1,435,000 Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: CITY OF BERKELEY AND NOW BERKELEY HSE AUTH. HAS OWNED THIS PROP. SINCE SEPT 2, 1987 PER ALAMEDA CO. RECORDS. Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. SALE #1SALE #2SALE #3 REQUIRED SURPLUS LAND ADJUSTMENTS DUE TO SITE SIZE DIFFERENCES. SEE SURPLUS LAND ADDENDUM. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ ,BASED ON CONSIDERING RELEVANT MARKET DATA. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 1,525,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No GS/GS Page #2 Fannie Mae Form

104 File No GS/GS Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No GS/GS Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

105 File No GS/GS Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No GS/GS 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 07, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: MARTIN LUTHER KING JR WAY AND ROSE S BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 BERKELEY HOUSING AUTHORITY MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

106 Subject Photos: Front and Street MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code File No GS/GS Page #5 Subject Front MARTIN LUTHER KING JR WAY AN Sales Price MKT VALUE Gross Living Area 6,944 Total Rooms 33 Total Bedrooms 21 Total Bathrooms 12 Location AVERAGE View Site 17,100 Quality Age 29 SUBJECT REAR (NO REAR DRIVEBY) Subject Street Form PICPIX.SR "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

107 Comparable Photos MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code File No GS/GS Page #6 Comparable BONITA AVE Sales Price 855,000 G.B.A. Age/Yr. Blt. 102 Comparable HEARST AVE Sales Price 1,825,000 G.B.A. Age/Yr. Blt. 46 Comparable HASTE ST Sales Price 1,525,000 G.B.A. Age/Yr. Blt. 104 Form PICPIX.CC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

108 Subject Plat Map File No GS/GS Page # MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

109 on of Building and Property Impr File No GS/GS Page #8 File No GS/GS MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 6,944 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. The subject has the following unit breakdown per Berkeley Housing Authority: Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

110 Surplus Land Addendum File No GS/GS Page #9 File No GS/GS MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

111 for Market Conditions Adjustmen File No GS/GS Page #10 File No GS/GS MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

112 Berkeley Rent Control Addendum File No GS/GS Page #11 File No GS/GS MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

113 Berkeley Rent Control Addendum File No GS/GS Page #12 File No GS/GS MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

114 Location Map For Subject and Comps File No GS/GS Page # MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

115 Scope of Work for this Assignmen File No GS/GS Page #14 File No GS/GS MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

116 Legal Description per Prelim Title File No GS/GS Page #15 File No GS/GS MARTIN LUTHER KING JR WAY AND ROSE ST, BERKELEY City BERKELEY County ALAMEDA State CA Zip Code SUBJECT LEGAL DESCRIPTION Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

117 File No GS/GS Page #16 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

118 File No GS/GS Page #17 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: MARTIN LUTHER KING JR WAY AND ROSE ST, BERKE INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: December 07, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

119 File No RB/RB SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $1,128,000 or $ 125,000/Unit : 9 Units: Driveby Appraisal Form Subject Photos: Front, Rear and Street... 5 Comparable Photos... 6 Location Map... 7 Plat Map... 8 Description of Building and Property Improvements... 9 Surplus Land Addendum Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Scope of Work for this Assignment Subject Legal Description per Prelim Title Report Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

120 Desktop Underwriter Quantitative Analysis Appraisal Report File No RB/RB THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY SOJOURNER TRUTH CT., AND 2798 A B SACity BERKELEY State CA Zip Code Legal Description SEE LEGAL DESCRIPTION AND SCOPE OF WORK ATTACHED County ALAMEDA Assessor's Parcel No Tax Year 9 10 R.E. Taxes $ EXEMPT Special Assessments $ Borrower Current Owner BERKELEY HOUSING AUTHORITY Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (9 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 629 F3 Census Tract /2 Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 729 Low 49 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 1,510 High 99 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 1.54.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED. 1, Dimensions 30FT x 151FT x 31FT x 179FT x 105FT x 170 FT Site area 16,562 Shape IRREGULAR Specific zoning classification and description R 3 MULTI FAMILY RESIDENTIAL Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$27 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 1,429,750 to $ 1,505,000. My research revealed a total of 3 listings ranging in list price from $ 732,645 to $ 1,520,050. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE SOJOURNER TRU 1335 SHATTUCK AVENUE 2716 WEBSTER STREET 1523 FAIRVIEW STREET Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 1.54 miles 1.52 miles 0.50 miles Sales Price $ MKT VALUE $ 1,505,000 $ 1,100,000 $ 729,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources DEED DOC # DEED DOC # DEED DOC# VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 16,562 2 STO AP BLDG 49 AVERAGE BANK LOAN 74 2/1/08 SUPERIOR STO AP BD/EQ 99 EQUAL 109,300 45,150 +9, ,000 BANK LOAN 40 7/17/08 EQUAL STO AP BD/EQ 49 EQUAL 59, , BANK LOAN 88 07/29/08 EQUAL STO AP BD/EQ 63 EQUAL 38, , ,400 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,000 Gross Living Area 10,390 Sq. Ft. 8,399 Sq. Ft. +29,865 5,053 Sq. Ft. +80,055 4,396 Sq. Ft. +89,910 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 9 YES YES 1 +20,000 YES YES 5 +10,000 YES YES 5 +10,000 NO. OF UNITS PRICE/UNIT $ N/A 115, , ,500 Net Adj. (total) + $ 73,095 + $ 69,215 + $ 103,070 Adjusted Sales Price Net 4.9 % Net 6.3 % Net 14.1 % of Comparables Gross 15.7 % $ 1,431,905 Gross 17.2 % $ 1,169,215 Gross 24.8 % $ 832,070 Date of Prior Sale 7/25/1986 7/2/1990 6/14/04 5/27/2004 Price of Prior Sale $ UNKNOWN $ UNKN NO PUBLIC DATA $ 980,000 $ $725,000 Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: CITY OF BERKELEY HOUSING AUTHORITY HAS OWNED THIS PROPERTY SINCE JULY 25, 1986 PER ALAMEDA CO. RECORDS. Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. SALE #1SALE #2SALE #3 REQUIRED SURPLUS LAND ADJUSTMENTS DUE TO SITE SIZE DIFFERENCES. SEE SURPLUS LAND ADDENDUM. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ ,BASED ON CONSIDERING RELEVANT MARKET DATA. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 1,128,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No RB/RB Page #2 Fannie Mae Form

121 File No RB/RB Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No RB/RB Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

122 File No RB/RB Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No RB/RB 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 04, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

123 Subject Photos: Front, Rear and Street SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code File No RB/RB Page #5 Subject Front SOJOURNER TRUTH CT., AND 279 Sales Price MKT VALUE G.B.A. Age/Yr.Blt. 49 Subject Rear View (Driveby Appraisal) Subject Street Form PICPIX.SC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

124 Comparable Photo Page SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code File No RB/RB Page #6 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age Comparable 1 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age Comparable 2 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age Comparable 3 Form PICPIX.CR "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

125 Location Map File No RB/RB Page # SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

126 Plat Map File No RB/RB Page # SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

127 on of Building and Property Impr File No RB/RB Page #9 File No RB/RB SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject buildings was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 10,309 sq. ft. gross buildings are a typical walkup multifamily dwelling built around 's. There are (9) 2 story units. 2 units at 2798 Sacramento Street and 7 units at Sojourner Truth Court. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. The subject has the following unit breakdown per Berkeley Housing Authority: Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

128 Surplus Land Addendum File No RB/RB Page #10 File No RB/RB SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

129 for Market Conditions Adjustmen File No RB/RB Page #11 File No RB/RB SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

130 Berkeley Rent Control Addendum File No RB/RB Page #12 File No RB/RB SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

131 Berkeley Rent Control Addendum File No RB/RB Page #13 File No RB/RB SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

132 Scope of Work for this Assignmen File No RB/RB Page #14 File No RB/RB SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

133 Legal Description per Prelim Title File No RB/RB Page #15 File No RB/RB SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET City BERKELEY County ALAMEDA State CA Zip Code SUBJECT LEGAL DESCRIPTION Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

134 File No RB/RB Page #16 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

135 File No RB/RB Page #17 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: SOJOURNER TRUTH CT., AND 2798 A B SACRAMENTO STREET, INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: December 04, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

136 File No KF 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $1,300,000 or $185,653/Unit : 7 Unit Driveby Appraisal Form Subject Photos: Front, Rear and Street... 5 Subject Photos: Additional Views... 6 Comparable Photos Location Map... 8 Subject Plat Map... 9 Description of Building and Property Improvements Surplus Land Addendum Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Scope of Work for this Assignment Subject Legal Description Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

137 Desktop Underwriter Quantitative Analysis Appraisal Report File No KF THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY. 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY State CA Zip Code Legal Description SEE LEGAL DESCRIPTION AND SCOPE OF WORK ATTACHED County ALAMEDA Assessor's Parcel No Tax Year EXEMPT R.E. Taxes $ EXEMPT Special Assessments $ Borrower Current Owner BERKELEY HOUSING AUTHORITY Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (7 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 629 G1 Census Tract /3 Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 789 Low 20 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 1,230 High 49 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 2.2.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED Dimensions 135 FT X 100FT Site area 13,500 Shape RECTANGULAR Specific zoning classification and description R 2A RESTRICTED MULTI FAMILY RESIDENTIAL Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$39 No. of Stories 2 Type (Det./Att.) DET Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 1,163,750 to $ 1,225,000. My research revealed a total of 3 listings ranging in list price from $ 792,945 to $ 1,311,000. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE ,2026,2028,2030,2032, TH ST 2015 HEARST AVE 1600 TYLER STREET Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 2.20 miles 0.74 miles 2.04 miles Sales Price $ MKT VALUE $ 795,000 $ 1,225,000 $ 789,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources MLS# MLS# MLS# VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View Design (Style) Actual Age (Yrs.) Condition AVERAGE 13,500 2 STO AP BLDG 20 AVERAGE BANK LOAN /17/09 INFERIOR STO AP BD/EQ 43 EQUAL ,850 +8, ,300 BANK LOAN 114 9/2/09 EQUAL STO AP BD/EQ 46 EQUAL 11,300 +9, ,600 BANK LOAN /13/09 INFERIOR STO AP BD/EQ 49 EQUAL 1, ,670 +8, ,900 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,000 Gross Living Area 7,099 Sq. Ft. 4,937 Sq. Ft. +32,430 4,725 Sq. Ft. +35,610 5,750 Sq. Ft. +20,235 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 7 YES YES 6 +2,500 YES YES 0 +17,500 YES YES 5 +5,000 NO. OF UNITS PRICE/UNIT $ N/A 132, ,000 98,630 Net Adj. (total) + $ 84,820 + $ 67,090 + $ 75,245 Adjusted Sales Price of Comparables Net Gross 10.7 % 10.8 % $ 879,820 Net Gross % % $ 1,292,090 Net Gross % % $ 864,245 Date of Prior Sale 9/18/96 8/25/09 9/29/06 5/24/05 Price of Prior Sale $ UNKNOWN $ 785,000 $ UNKN NO PUBLIC DATA $ UNKN NO PUBLIC DATA Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: CITY OF BERKELEY AND NOW BERKELEY HSE AUTH. HAS OWNED THIS PROP. SINCE SEPT 18, 1973 PER ALAMEDA CO. RECORDS. Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. SALE #1SALE #2SALE #3 REQUIRED SURPLUS LAND ADJUSTMENTS DUE TO SITE SIZE DIFFERENCES. SEE SURPLUS LAND ADDENDUM. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ ,BASED ON CONSIDERING RELEVANT MARKET DATA. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 1,300,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No KF Page #2 Fannie Mae Form

138 File No KF Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No KF Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

139 File No KF Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No KF 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 04, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 BERKELEY HOUSING AUTHORITY MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

140 Subject Photos: Front, Rear and Street 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code File No KF Page #5 Subject Front 2024,2026,2028,2030,2032,2034,2036 VIRGINIA Sales Price MKT VALUE G.B.A. Age/Yr.Blt. 20 ADDITIONAL UNITS (7) (Driveby Appraisal) Subject Street Form PICPIX.SC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

141 Subject Photos: Additional Views 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code File No KF Page #6 VIEW OF SUBJECT UNITS 2024,2026,2028,2030,2032,2034,2036 VIRGINIA Sales Price MKT VALUE Gross Living Area 7,099 Total Rooms 35 Total Bedrooms 24 Total Bathrooms 14 Location AVERAGE View Site 13,500 Quality Age 20 VIEW OF SUBJECT UNITS VIEW OF SUBJECT UNITS Form PICPIX.SR "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

142 Comparable Photos ,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code File No KF Page # TH ST Sales Price G.B.A. Age/Yr. Blt. Comparable 1 795, Comparable HEARST AVE Sales Price 1,225,000 G.B.A. Age/Yr. Blt. 46 Comparable TYLER STREET Sales Price 789,000 G.B.A. Age/Yr. Blt. 49 Form PICPIX.CC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

143 Location Map File No KF Page #8 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

144 Plat Map File No KF Page #9 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code Form MAP.PLAT "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

145 on of Building and Property Impr File No KF Page #10 File No KF 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 7,100 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. The subject has the following unit breakdown per Berkeley Housing Authority: Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

146 Surplus Land Addendum File No KF Page #11 File No KF 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES#1, #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

147 for Market Conditions Adjustmen File No KF Page #12 File No KF 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

148 Berkeley Rent Control Addendum File No KF Page #13 File No KF 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

149 Berkeley Rent Control Addendum File No KF Page #14 File No KF 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

150 Scope of Work for this Assignmen File No KF Page #15 File No KF 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

151 Subject Legal Description File No KF Page #16 File No KF 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST City BERKELEY County ALAMEDA State CA Zip Code SUBJECT LEGAL DESCRIPTION Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

152 File No KF Page #17 DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutiona lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The inspector's certification that appears in the appraisal report is subject to the following conditions: 1. The inspector will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership. 2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The inspector has made no survey of the property. 3. The inspector will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 5. The inspector has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The inspector will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. 6. The inspector obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The inspector does not assume responsibility for the accuracy of such items that were furnished by other parties. 7. The inspector will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 8. The inspector has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 9. The inspector must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the inspector's identity and professional designations, and references to any professional appraisal organizations or the firm with which the inspector is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the inspector's prior written consent. The inspector's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 10. The inspector is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting form the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan. Page 1 of 2 Certified General Appraisals(510) Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

153 File No KF Page #18 CERTIFICATION: The inspector certifies and agrees that: 1. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 2. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 3. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this analysis is contingent on the appraised value of the property. 4. I performed this analysis in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal. 5. I have personally inspected the exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. To the best of my knowledge and belief, all statements and information in this report are true and correct, and I have not knowingly withheld any significant information. 6. I personally prepared all conclusions and opinions about the real estate that were set forth in the inspection. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. ADDRESS OF PROPERTY ANALYZED: 2024,2026,2028,2030,2032,2034,2036 VIRGINIA ST, BERKELEY, CA INSPECTOR: Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Date Signed: December 04, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Page 2 of 2 Form DLC_DEFD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

154 File No RB/RB WARD STREET City BERKELEY County ALAMEDA State CA Zip Code TABLE OF CONTENTS Invoice... 1 Opinion of Value: $ 1,420,000 or $118,333/Unit : Driveby Appraisal Form Description of Building and Property Improvements... 5 Subject Photos: Front, Rear and Street... 6 Comparable Photos Location Map... 8 Plat Map... 9 Surplus Land Addendum Support for Market Conditions Adjustment (Time) Berkeley Rent Control Addendum Scope of Work for this Assignment Subject Legal Description Statement of Limiting Conditions for Driveby Appraisal Form TOCPPIX "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

155 Desktop Underwriter Quantitative Analysis Appraisal Report File No RB/RB THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER/CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY WARD STREET City BERKELEY State CA Zip Code Legal Description SEE LEGAL DESCRIPTION AND SCOPE OF WORK ATTACHED County ALAMEDA Assessor's Parcel No Tax Year R.E. Taxes $ EXEMPT PUBSpecial Assessments $ Borrower Current Owner BERKELEY UNIFIED SCHOOL DIST Occupant Owner Tenant Vacant Neighborhood or Project Name BERKELEY (12 UNIT APT BUILDING) Project Type PUD Condominium HOA $ /Mo. Sales Price $ MKT VALUE Date of Sale 11/25/2009 Description / $ amount of loan charges/concessions to be paid by seller Property rights appraised Fee Simple Leasehold Map Reference 629 G3 Census Tract /2 Note: Race and the racial composition of the neighborhood are not appraisal factors. Location Urban Suburban Rural Property values Increasing Stable Declining Single family housing Condominium housing PRICE AGE PRICE (if applic.) AGE Built up Over 75% 25 75% Under 25% Demand/supply Shortage In balance Over supply $(000) (yrs) $(000) (yrs) Growth rate Rapid Stable Slow Marketing time Under 3 mos. 3 6 mos. Over 6 mos. 1,390.5Low 49 NA Low NA Neighborhood boundaries SEE LOCATION MAP FOR GENERAL BOUNDARIES. NEIGHBORHOOD HAS 1,570 High 66 NA High NA HOMOGENEOUS MARKET VALUES. RADUIS OF VALUE = 0 mi to 1.4.SINGLE FAMILY PRICE Predominant Predominant RANGE HEADING = MULTI FAMILY PRICE RANGES AS FORM HAS BEEN MODIFIED. 1, Dimensions 75 FT X 218 FT Site area 16,350 Shape RECTANGULAR Specific zoning classification and description R 2 RESTRICTED TWO FAMILY RESIDENTIAL SEE GR LEASE DISCUSSION IN IMP. DESCRIP Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): Present use Other use, attach description. Utilities Public Other Public Other Off site Improvements Type Public Private Electricity Water Street ASPHALT Gas Sanitary sewer Alley YEAR BUILT EST Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner Other (Describe): LAND VALUE= ,PRICE/SF=$35 No. of Stories 2 Type (Det./Att.) ATT Exterior Walls STUCCO Roof Surface COMPOSITION Manufactured Housing Yes No Does the property generally conform to the neighborhood in terms of style, condition and construction materials? Yes No If No, attach description. Are there any apparent physical deficiencies or conditions that would affect the soundness or structural integrity of the improvements or the livability of the property? Yes No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Yes No If Yes, attach description. SUBJECT NEIGHBORHOOD SITE IMPROVEMENTS QUANTITATIVE SALES COMPARISON ANALYSIS Certified General Appraisals(510) I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 3 sales ranging in sales price from $ 1,487,000 to $ 1,565,000. My research revealed a total of 3 listings ranging in list price from $ 1,397,000 to $ 1,581,000. The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. FEATURE SUBJECT SALE 1 SALE 2 SALE WARD STREET 968 ADDISON STREET 3380 ADELINE STREET 2112 ROOSEVELT AVE Address BERKELEY BERKELEY BERKELEY BERKELEY Proximity to Subject 1.40 miles 0.83 miles 0.79 miles Sales Price $ MKT VALUE $ 1,565,000 $ 1,390,500 $ 1,450,000 Price/Gross Living Area $ N/A / $ / $ / $ / Data & Verification Sources DEED DOC # DEED DOC # MLS# VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. DESCRIPTION +( )$ Adjust. Sales or Financing Concessions Date of Sale/Time Location Site View AVERAGE 16,350 BANK LOAN 180 1/30/09 EQUAL ,300 14,600 0 BANK LOAN 560 7/17/09 EQUAL 10,300 20,000 +8,630 0 BANK LOAN 19 11/17/09 EQUAL 7,800 1, ,500 0 Design (Style) Actual Age (Yrs.) Condition 2 STO AP BLDG 49 AVERAGE 2 STO AP BD/EQ 66 EQUAL 0 +1,700 2 STO AP BD/EQ 0 52 EQUAL 2 STO AP BD/EQ 49 EQUAL 0 Above Grade Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Room Count , , ,500 Gross Living Area 13,690 Sq. Ft. 11,672 Sq. Ft. +30,270 9,408 Sq. Ft. +64,230 7,800 Sq. Ft. +88,350 Basement & Finished Rooms Below Grade Garage/Carport STORAGE=YES SECURITY=YES 12 YES YES 18 15,000 YES YES 16 10,000 YES YES 10 +5,000 NO. OF UNITS PRICE/UNIT $ N/A 86,940 99, ,000 Net Adj. (total) + $ 23,930 + $ 61,860 + $ 131,050 Adjusted Sales Price of Comparables Net 1.5 Gross 8.8 % % $ 1,541,070 Net 4.4 Gross 8.8 % % $ 1,452,360 Net 9.0 Gross 9.2 % % $ 1,581,050 Date of Prior Sale 2/29/1968 UNK 06/2/ /06/2007 Price of Prior Sale $ 99 YR LEASE $ NO PRIOR SALE ON RECORD $ 1,850,000 $ INTERSPOUSAL DEED Analysis of any current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: OWNERSHIP HISTORY: BERKELEY UNIFIED SCHOOL DISTRICT HAS OWNED THIS PROPERTY SINCE MARCH 1, 1986 PER ALAMEDA CO. RECORDS. Summary of sales comparison and value conclusion: MOST WEIGHT WAS GIVEN TO COMPS # 1 & #2 DUE TO UNIT COUNT, GLA, PROXIMITY, RECENT SALE, AND MOST SIMILAR FEATURES. COMP # 3 PROVIDES SUPPORT FOR THE VALUE ESTIMATE. COMPS USED WERE THE BEST CLOSED AND LISTED SALES AT TIME OF INSPECTION. ADEQUATE WEIGHT IS GIVEN TO THE ACTIVE LISTINGS AS THEY INDICATE THE HIGHEST "ASKING PRICES" IN A DECLINING MARKET. SALE #2SALE #3 REQUIRED SURPLUS LAND ADJUSTMENTS DUE TO SITE SIZE DIFFERENCES. SEE SURPLUS LAND ADDENDUM. TYPICAL APT. BUYERS WOULD MOST LIKELY MAKE THEIR FINAL OFFER/BUY DECISION BY APPLYING A REASONABLE PRICE/UNIT COMPARISON WHICH THE DATA SHOWED AVG. P/U OF $ APPRAISER ASSIGNED A PRICE/ UNIT OF $ BASED ON CONSIDERING RELEVANT MARKET DATA. This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or subject to the following repairs, alterations or conditions. EXTERIOR INSPECTION REVEALED NO VISIBLE EXTERIOR DEFECTS. BASED ON AN EXTERIOR INSPECTION FROM THE STREET OR AN INTERIOR AND EXTERIOR INSPECTION, I ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT TO BE $ 1,420,000, AS OF 11/25/2009. PAGE 1 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE File No RB/RB Page #2 Fannie Mae Form

156 File No RB/RB Page #3 PUD Desktop Underwriter Quantitative Analysis Appraisal Report File No RB/RB Project Information for PUDs (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases NOT APPLICABLE Total number of units NOT APPLICABLE Total number of units sold NOT APPLICABLE Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a PUD? Yes No If yes, date of conversion: Does the project contain any multi dwelling units? Yes No Data Source: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: CONDOMINIUM Project Information for Condominiums (If applicable) Is the developer/builder in control of the Home Owners' Association (HOA)? Yes No Provide the following information for all Condominium Projects: Total number of phases NOT APPLICABLE Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes No If yes, date of conversion: Project Type: Primary Residence Second Home or Recreational Row or Townhouse Garden Midrise Highrise Condition of the project, quality of construction, unit mix, etc.: Are the common elements completed? Yes No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Yes No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 5. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. PAGE 2 OF 3 Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

157 File No RB/RB Page #4 Desktop Underwriter Quantitative Analysis Appraisal Report APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No RB/RB 1. I performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subject property); (2) collecting, confirming, and analyzing data from reliable public and/or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characteristics of the subject property and the comparable sales to develop this appraisal. 2. I have researched and analyzed the comparable sales and offerings/listings in the subject market area and have reported the comparable sales in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. I estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. I further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. I performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER: NAPOLEON FORTE, ASA. MANAGING APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: NAPOLEON FORTE, ASA.MANAGING APPRAISER Company Name: CERTIFIED GENERAL APPRAISAL SERVICES Company Address: 306 PENDLETON WAY OAKLAND, CA Date of Report/Signature: December 03, 2009 State Certification #: AG or State License #: CERTIFIED GENERAL APPRAISER State: CA Expiration Date of Certification or License: 10/13/10 Signature: Name: Company Name: Company Address: Date of Report/Signature: State Certification #: or State License #: State: Expiration Date of Certification or License: ADDRESS OF PROPERTY APPRAISED: WARD STREET BERKELEY, CA APPRAISED VALUE OF SUBJECT PROPERTY $ EFFECTIVE DATE OF APPRAISAL/INSPECTION LENDER/CLIENT: Name: Company Name: Company Address: /25/2009 MS. TIA M. INGRAM, EXECUTIVE DIRECTOR BERKELEY HOUSING AUTHORITY 1901 FAIRVIEW STREET, BERKELEY, CA SUPERVISORY APPRAISER: PAGE 3 OF 3 SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Did inspect interior and exterior of subject property COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Form 205 "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE Fannie Mae Form

158 on of Building and Property Impr File No RB/RB Page #5 File No RB/RB WARD STREET City BERKELEY County ALAMEDA State CA Zip Code DESCRIPTION OF PROPERTY IMPROVEMENTS The subject building was inspected from the exterior only as this was a drive by appraisal per client's instructions. The 13,690 sq. ft. gross building is a typical walkup multifamily dwelling built around 's. Upkeep by regularly scheduled maintenance has been adequate as the building is in average condition. Exterior painting is adequate. Street visibility, access, and setbacks are adequate. The design and curb appeal is typical for the Berkeley market area. The site is located within close proximity to the University of California Berkeley campus which gives it added locational value to potential tenants. Landscaping is adequate with native plants and trees. The construction is wood frame with painted stucco siding. Driveways and parking is judged to be adequate. All utilities are connected to the site and appear to be operating properly. The roof appears to be water tight with no evidence of leaks and appears to have a remaining economic life of at least years. No visible exterior defects or deferred maintenance were observed during my exterior inspection. The subject property should compete well for all tenant types within the Berkeley market area and beyond. It should command competitve market rents based on its present condition. Ownership History The subject property is under a 99 year ground lease to the Berkeley Housing Authority (BHA) from the Berkeley Unified School District (BUSD). This appraisal derived the market value of the subject property based on a unencumber "Fee Simple" interest and not on the "Leasehold" interest. Because a current sale of the leasehold interest would carry with it the existing lease and since the lease is for a term of 99 years with 76 years remaining (lease began 1986), and at the end of the lease reversion of buildings and improvements go back to the Berkeley Unified School District, a Fee Simple interest value would be the most probable selling price set by the BHA and around that same value would be the most likely price a potential buyer would be willing to pay for the right to own the leasehold interest in the property. The present value of the ground lease is minor compared to the value of the present value of the buildings with their earnings potential over time. And there are 76 years left on the ground lease. Therefore, it would makes sense for the lessee to sell its interest based on the full value of the building and land due to the long term nature of the existing ground lease. There were an adequate number of multi family sales to establish the present market value of the subject property based solely on the sales comparison method. Traditionally, the income method is employed. However, due to the number of verifiable multi family sales, the value produced by the sales comparison method is judged to be accurate, reliable and credible. The subject has the following unit breakdown per Berkeley Housing Authority: Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

159 Subject Photos: Front, Rear and Street WARD STREET City BERKELEY County ALAMEDA State CA Zip Code File No RB/RB Page #6 Subject Front WARD STREET Sales Price MKT VALUE G.B.A. Age/Yr.Blt. 49 Subject Rear View (Driveby Appraisal) Subject Street Form PICPIX.SC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

160 Comparable Photos WARD STREET City BERKELEY County ALAMEDA State CA Zip Code File No RB/RB Page #7 Comparable ADDISON STREET Sales Price 1,565,000 G.B.A. Age/Yr. Blt. 66 Comparable ADELINE STREET Sales Price 1,390,500 G.B.A. Age/Yr. Blt. 52 Comparable ROOSEVELT AVE Sales Price 1,450,000 G.B.A. Age/Yr. Blt. 49 Form PICPIX.CC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

161 Location Map File No RB/RB Page # WARD STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

162 Location Map File No RB/RB Page # WARD STREET City BERKELEY County ALAMEDA State CA Zip Code Form MAP.LOC "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

163 Surplus Land Addendum File No RB/RB Page #10 File No RB/RB WARD STREET City BERKELEY County ALAMEDA State CA Zip Code SURPLUS LAND ADDENDUM ****************************************************************************************** COMPARABLES #2 & #3 WERE ADJUSTED FOR SURPLUS LAND. SURPLUS LAND IS THE DIFFERENCE OF AT LEAST 25% OF ADDITIONAL SF OF ONE PROPERTY VS. ANOTHER. THE SQUARE FOOTAGE UP TO 25% IS VALUED AT $2 PER SQUARE BEYOND 25%, THE SQUARE FOOTAGE IS VALUED AT $1 PER SQUARE FOOT. THE ACTUAL SURPLUS LAND ADJUSTMENTS ARE SHOWN IN THE REPORT. THE SAMPLE BELOW EXPLAINS THIS CALCULATIONS. SURPLUS LAND CALULATION EXAMPLE **************************************************** SUBJECT SITE SIZE 5,000 SF COMP SITE SIZE 8,500 SF CALCULATE WHAT POINT IS CONSIDERED EXCESS LAND? SUBECT(SMALLEST SIZE) SURPLUS POINT 5,000 SF X1.25 6,250 SF HOW SURPLUS LAND IS VALUED? SURPLUS LAND POINT 6,250 SF ( LESS ) SUBJECT SITE 8,500 SF ACTUAL EXCESS 2,250 SF X $1/SF = $2,500 CALCULATE NORMAL LAND VALUE: SURPLUS LAND POINT 6250 SF (LESS) SUBJECT SITE 5000 SF NORMAL LAND VALUE 1250 SF X $2/SF = $2,500 TOTAL ADJUSTMENTS FOR EXCESS LAND : NORMAL LAND VALUE $2,500 SURPLUS LAND VALUE $2,250 TOTAL ADJUSTMENT $4,750 QUESTIONS AND ANSWERS: IS THIS SITE SIZE TYPICAL FOR THIS MARKET AREA? YES X NO ARE EASEMENTS ON PROPERTY S PLAT MAP? YES_X NO CAN THE EXCESS LAND BE SUBDIVIDED? YES_X NO PROBABILITY OF OWNE SUBDIVIDING? GOOD X NOT GOOD EFFECTS ONE MARKETABILITY OF THIS PROPERTY? SIGNIFICANT X NOT SIGNIFICANT Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

164 for Market Conditions Adjustmen File No RB/RB Page #11 File No RB/RB WARD STREET City BERKELEY County ALAMEDA State CA Zip Code The market data collected by Zillow is judged to be reliable based on price change only. The market data below is for single family homes in Berkeley. However, the multifamily prices tend to lag and match the same trends as the single family market based on discussions with market participants and appraiser's own knowledge. No appraiser adjustments have been made to the Zillow price data. The data confirms what is already known by the buyers and sellers in the Berkeley market and that is prices have been in declined since late The data also show how Berkeley's residential housing trends compare with the entire US housing market. We have made a 3.5 %/year depreciation adjustment to the comparables to show market decline from the date a comp was sold to the date of inspection by the appraiser. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

165 Berkeley Rent Control Addendum File No RB/RB Page #12 File No RB/RB WARD STREET City BERKELEY County ALAMEDA State CA Zip Code RENT BOARD ALLOWABLE INCREASE RENT STABILIZATION BOARD PUBLIC NOTICE 2010 ANNUAL GENERAL ADJUSTMENT ADOPTED At i t s regular meeting on October 19, 2009, the Berkeley Rent Stabilization Board adopted the Annual General Adjustment (AGA) Order for Year 2010 which will allow eligible landlords to increase the 2009 permanent rent ceilings by 0.1%. The 2010 AGA of 0.1% represents 65% of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the Bay Area during the 2008 fiscal year, which was % as posted by the Bureau of Labor Statistics in July The 65% of CPI formula was approved by the voters in the November 2004 general municipal election. The 2010 AGA may not be charged to tenants whose tenancy began on or after January 1, 2009, and who had their rents set pursuant to the Costa Hawkins Rental Housing Act. The Order also sets forth the conditions for qualifying for this rent increase and the notice that must be given to tenants in order to raise the rent. The full text of the regulation and order may be viewed in the Rent Board office at 2125 Milvia Street or at If you have any questions, you may contact Jay Kelekian at 981 RENT ( ). Jay Kelekian Executive Director October 23, 2009 Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

166 Berkeley Rent Control Addendum File No RB/RB Page #13 File No RB/RB WARD STREET City BERKELEY County ALAMEDA State CA Zip Code Overview 2. Registration Requirement to register Exemptions Consequences of failing to register Guide to Berkeley's Rent Stabilization Program Rent Control & Eviction Protection (updated for January 2008) Other city of Berkeley requirements for landlords 3. Rent levels Calculating the lawful rent ceiling Rent ceiling increases Rent ceiling decreases Hearings Certification of rent ceilings 4. Subletting and replacing roommates Subletting generally Replacement tenants Chapters 1 3 Chapters 4 6 Table of Contents Partial turnovers in tenancies when a vacancy increase may be imposed 5. Security deposits state and local law State law regarding security deposits Berkeley law regarding security deposits and interest on deposits 6. Evictions Proceed with caution Eviction checklist local requirements Good cause required The eviction process Improper landlord actions Annual General Adjustments (AGA s) General calendar Home Web Policy Text Only Site Map Contact Us Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

167 Scope of Work for this Assignmen File No RB/RB Page #14 File No RB/RB WARD STREET City BERKELEY County ALAMEDA State CA Zip Code SCOPE OF WORK Certified General Appraisal Services has prepared a Drive by Summary Narrative Appraisal Report of the subject property in accordance with all applicable governmental requirements, as well as standards and requirements adopted and advanced by the Appraisal Institute and the Society of Real Estate Appraisers. The purpose of this appraisal is to estimate the "as is" market value of the subject. The function is to provide a market value opinion to the intended user, the Berkeley Housing Authority. The property was physically inspected for the street as a drive by inspection.. Land and building areas were verified, Land use controls including zoning and master planning documents were reviewed. Analysis of market conditions relevant to this property included research for comparable sales in Berkeley and adjacent cities and competitive locations. Qualitative and Quantitative analyses of sales, rental, and investment data were made which lead to the conclusions supporting the final estimate of market value. All appraisal reports will contain the following: 1. A review of the prior, current and potential uses of each site, using: a) Discussions with city, county and applicable regulatory staff b) Title searches c) Permits and land uses obtained and held by property owners d) Appropriate agency records to survey the areas surrounding the designated properties. 2. A property description and evaluation, including and confirming: a) Assessor's Parcel Number (APN) b) Legal description c) Plat map d) Ownership history e) Site description f) Description of property improvements, if any g) Neighborhood description h) Descriptions of current or pending changes in zoning i) Highest and best use of the affected property j) Description(s) of comparable site(s) used k) Comparative analysis of subject and comparable site(s) I) Description or illustration of appropriate appraisal approach(es) used* m) Price per unit of comparison analyzed n) Fee simple, leased or other operating data o) Reconciliation and final value estimates ** (Note: While Certified General Appraisal Services may expect and choose to use the three approaches typically employed Cost, Income and Comparable Sales, the Berkeley Housing Authority is primarily interested in appraised values based on the sales of comparable properties, especially in view of the below market rents that are customarily charged for Authority owned rental property.) 3. Each appraisal report must also include the appraiser's certification and statement of limiting conditions. Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE

168 Subject Legal Description File No RB/RB Page #15 File No RB/RB WARD STREET City BERKELEY County ALAMEDA State CA Zip Code SUBJECT LEGAL DESCRIPTION Form TADD "TOTAL for Windows" appraisal software by a la mode, inc ALAMODE