Rental Housing Development Finance

Transcription

1 HD420 Rental Housing Development Finance This is a generalized HD420-Rental Housing Development Finance presession memo and agenda designed to give you a good idea of how to prepare for the HD420 course. Please note that this document is subject to change. A final class specific version will be sent to you along with the presession assignment, once you have registered and paid- three to four weeks prior to the course. Presession Assignment What to Bring Review the entire HD420 - Rental Housing Development Finance Textbook. The course is fast-paced so completing this assignment prior to the first day of class is important. In addition to the completed presession assignment, bring the following items to the course: a calculator, pencils, pens and paper pads. It is particularly important that you bring the presession materials. They will be used extensively during the course and no additional copies will be available at the class. Should you forget your materials, it will be your responsibility to have them sent to you at the session. Be sure to wear comfortable clothing. We request that all cell phones, be turned off during class. You will be given breaks throughout the day during which you can use the phone and check messages. Your participation in class and the team assignments is essential to successfully completing the course. Please plan your schedule accordingly. In-class team assignments will be assigned on several late afternoons and can be completed in approximately two hours. You will work with a small group or team of course participants to complete the assignments for the next day s session. The course instructor will be available for any needed assistance. Final Day / Certification Exam For Assistance The final day of training will consist of an open book examination. The examination will be administered to individuals who are pursuing the Housing Development Finance Professional (HDFP) Certification. You must complete and return the examination before leaving. The exam will be collected promptly at 1:30 p.m. However, some participants may finish earlier. Plan your travel arrangements accordingly. Attendees not pursuing NDC s HDFP certification are not required to stay for the examination. However, we encourage all participants to take the examination as a way of assessing your understanding of the course curriculum. You will receive your examination results via approximately four weeks after completing the course. Contact NDC s Training Division at if you have any questions or need additional information. We look forward to working with you. 927 Dudley Road Edgewood, KY (859) (phone) (859) (fax)

2 HD420 Rental Housing Development Finance PRESESSION ASSIGNMENT Review the entire HD 420 Rental Housing Development Finance Textbook. DAY 1 8:30 a.m. COFFEE AVAILABLE 9:00 WELCOME AND INTRODUCTIONS 9:30 HOUSING FINANCE CONCEPTS The Housing Problem Economic Problem Requires Economic Solutions Investor Objectives Lender Objectives 10:00 RENTAL HOUSING DEVELOPMENT PROCESS 10:30 RENTAL HOUSING: PRO FORMA INCOME AND EXPENSE STATEMENT A Projection Calculating Debt Service Pre-Tax Cash Flow 12:00 p.m. LUNCH 927 Dudley Road Edgewood, KY (859) (phone) (859) (fax)

3 2 1:30 CAPITALIZATION RATES Fair Market Value 3:30 PERMANENT LENDER UNDERWRITING RATIO Debt Coverage Ratio Loan to Value Ratio Breakeven Point Other Ratios CONSTRUCTION LENDER UNDERWRITING 5:00 IN-CLASS TEAM ASSIGNMENT two hours) READ MARKET STUDY DAY 2 8:30 a.m. REVIEW 9:00 ROLE AND IMPORTANCE OF APPRAISALS AND MARKET STUDIES Three Approaches to Value Adjusting Comparables Determining Values 12:30 p.m. LUNCH

4 3 1:30 RENTAL HOUSING: TAX BENEFITS Cash Flow After Tax Function of Depreciation Passive Income/Loss Restrictions Rehabilitation Tax Credits (RTCs) Low-income Housing Tax Credits 5:00 IN-CLASS TEAM ASSIGNMENT two hours) DAY 3 8:30 a.m. REVIEW 9:00 LOW-INCOME HOUSING TAX CREDITS (continued) Key Deadlines for LIHTC projects Tax-exempt Bond Deals 11:00 RENTAL HOUSING: CALCULATING RESIDUALS Net Proceeds of Refinancing Net Sales Proceeds Calculating Exit Taxes on LIHTC Deals 12:30 p.m. LUNCH

5 4 1:30 DISCOUNTED CASH FLOW ANALYSIS Present Value Theory Internal Rate of Return Valuing Investor Pay-ins 3:30 ADJOURNMENT DAY 4 8:30 a.m. RESERVES Replacement Rentup Operating 9:30 CONCERNS OF CONSTRUCTION LENDERS Appraising Affordable Housing 11:00 REVIEWING DEVELOPER FINANCIAL STATEMENTS 11:30 SYNDICATION Splitting Benefits Pricing LIHTCs and RTC When to Syndicate Partnership Issues Timing of Pay-ins, Operating Deficit, Guarantees, Reserve Requirements 12:30 p.m. LUNCH

6 5 1:30 4:00 DAY 5 8:00 a.m. EXAMINATION FOR HDFP CERTIFICATION 1:30 p.m. ADJOURN