Draft Roosevelt Income Restricted Housing Analysis

APPENDIX F Draft Roosevelt Income Restricted Housing Analysis Prepared for: Presented by: Sound Transit May 5, 2016 C/o Jeff Lehman, KPFF 1601 5th Avenue, Suite1600 Seattle, WA 98101 (206) 622 5822 Jeff.Lehman@kpff.com Kidder Mathews Michael George Blair Howe, CCIM 601 Union Street, Suite 4270 Seattle, WA 98101 206.398.2284 mgearge@kiddermathews.com 1 kiddermathews.com

Table of Contents Executive Summary... 3 Introduction... 5 4% LIHTC NonSenior Housing Scenario... 8 4% LIHTC Senior Housing Scenario... 9 9% LIHTC NonSenior Housing Scenario... 10 9% LIHTC Senior Housing Scenario... 11 Appendix... 12 Nature of the Assignment The information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied as to its accuracy. Prospective Owner, Buyer or Tenant should conduct an independent investigation and verification of all matters deemed to be material, including, but not limited to, statements of value, income, and expenses. 1

Executive Summary Introduction The purpose of this study is to investigate the feasibility of developing an income restricted Transit Oriented Development (TOD) on Sound Transit s 53,000 square foot site adjacent to the future Roosevelt Station. The subject, labeled as Main Site in Exhibit 1, is located at 6600 Roosevelt Street in Seattle s Roosevelt Hill neighborhood. Exhibit 1: Roosevelt Site The study tests the feasibility of developing midrise, senior and nonsenior, 4% and 9% Low Income Housing Tax Credit projects on the site. Key Findings 4% LIHTC Scenario Development of a 115unit 4% LIHTC project at this site would require soft debt from public funders in an amount that is within the range of what other projects have received historically. It is worth noting however, that based on a sample of comparable projects, the amount of soft debt required is on the higher end of the funding range for projects without deeper income restrictions. A partial or full land donation would increase the ability of soft debt funders to leverage their resources. This would help a project built at this site compete for funding. Market rents in the subject s neighborhood are greater than levels affordable to households making 60% or less of Area Median Income (AMI). The site s location (not a DDA or QCT) does not allow it to qualify for a 130% tax credit basis boost. This limits the amount of Low Income Housing Tax Credit (LIHTC) equity available to the project. 9% LIHTC Scenario Development of a 100unit 9% LIHTC project at this site would require soft debt from public funders in an amount that is within the range of what other projects have received historically. Seattle s Office of Housing, the key funder in Seattle, targets much of their 9% project soft debt funding toward projects with homeless units. It is worth noting however, that based on a sample of comparable projects, the amount of soft debt required is on the higher end of the funding range for projects not providing homeless services. Tax Credit equity is a critical component to 9% LIHTC projects. The current per project limit for 9% projects is about 16.8 million dollars, which is enough to fund a significant portion of 2

a project that includes 70 to 100 units. Accordingly, the analysis was limited to a 100unit project. 4% and 9% Scenario Due to limited funding availability (9% LIHTC project maximum limits and soft debt funder limits) both of these projects were sized below 120 units. Projects of this size can potentially be built on a 16,000 square foot site, which represents approximately 1/3 of the available land on the 53,000 square foot main site. Given the size of these projects, it may be possible to construct both a 9% and 4% project at this location. The subject s urban location and proximity to public transit are both positive attributes from a local funding and equity investor standpoint. This may benefit the project s ability to compete for funding and attract a tax credit investor. There are a number of proposed new and expanded funding sources for affordable housing programs on the horizon in Seattle. Combined they have the potential to greatly expand the pool of funding available to projects located on urban sites near public transportation. These programs were not accounted for in the analysis as it is unknown if they will come to fruition as currently envisioned. Conclusion This study concludes that both a 4% and 9% midrise LIHTC project may be financially feasible at this location. Given the large size of this site, one option is to build both a 4% and 9% project. Although the LIHTC projects tested appear to be reasonably well positioned to compete for soft debt there are a number of factors that cannot be tested including, changes in funding priorities, the strength of other projects competing at the time of the submittal, and the changing amount of funding available. The scenarios tested were at the higher end of the range of funding secured for similar projects historically. This could mean that funders like the Seattle Office of Housing may need more time to fund the project than they would for a project applying for less soft debt. A partial or full land donation would increase the ability of soft debt funders to leverage their resources, which would further help a project built at this site compete for funding and potentially reduce the amount of time needed to secure soft debt. 3

Introduction Purpose The purpose of this study is to investigate the feasibility of developing an income restricted (affordable) Transit Oriented Development (TOD) on Sound Transit s 6600 Roosevelt Street property located in Seattle s Roosevelt neighborhood. This study specifically explores the use of lowincome housing financing tools to develop the site and to promote affordable housing in proximity to high capacity transit. The lowincome housing financing models tested are those where feasibility does not depend on investment return and value, but on public priorities, community benefit, and underwriting for longterm financial sustainability. A prior Kidder Mathews feasibility study concluded that a marketrate development on this site is currently feasible using conventional financing. Subject Overview The subject is a 53,000 square foot site located on Roosevelt Street between NE 67th Ave and NE 66th Ave in Seattle s Roosevelt Hill Neighborhood. As shown in Exhibit 1, the rectangular shape of the site is well suited to accommodate development. The subject s zoning (NC3P85) allows for a maximum height of 85 feet. Its location within the Roosevelt Station Overlay exempts property from minimum parking requirements. Approach All scenarios anticipate high rates of transit ridership and low parking ratios. Assumptions about land costs, soft costs, and hard costs reference previous work and currently available information. The study tests the feasibility of developing midrise 4% and 9% Low Income Housing Tax Credit (LIHTC) projects on the site. Both the 4% and 9% scenarios were tested as senior and nonsenior affordable housing projects. The midrise scenarios presented for this site are six stories tall, and include five stories of wood frame construction over a groundfloor concrete podium. Lowrise scenarios were not tested, as these would represent a significant underuse of the site given existing zoning and current market conditions. Highrise scenarios were not tested, as this type construction is not allowed under current zoning. Depending on the project s configuration the zoning code may require a limited amount of ground floor commercial space. The commercial component of this building could be treated separately and sold as a condominium interest; therefore, it is not accounted for in this analysis. Kidder Mathews earlier work concluded that the area s nongrocery retail rents are currently 25 to 30 NNN rents, slightly less than needed to support the cost of new construction. 4

Opportunities/Issues There are currently public funding sources targeting TOD projects that benefit lowincome households in Seattle. Additional funding for urban TOD projects is likely to increase given the number proposed new and expanded funding programs targeting this product type. The subject is located adjacent to the future Roosevelt light rail station. Market rents are currently at levels greater than households making 60% or less of Area Median Income (AMI) can afford. The size of this site may allow for two midsized projects to be constructed. Public Policy and Funding Priorities Locating affordable housing near transit resources gives lower income households access to employment and community amenities without the expense of a personal vehicle. Transportation accounts for a significant portion of household budgets. The cost of transportation is typically a proportionately greater burden on lower income households. A study by The Center for Housing Policy found that housing and transportation are the two largest expenses for most households. For households of all income levels, 27% of income goes for housing alone and another 20% goes to the cost of transportation. Building affordable transitoriented development promotes social equity. In 2009, the U.S. Department of Housing and Urban Development (HUD), U.S. Department of Transportation (DOT), and the U.S. Environmental Protection Agency (EPA) created the Partnership for Sustainable Communities to help communities improve access to affordable housing, increase transportation options, and lower transportation costs while protecting the environment. The Partnership for Sustainable Communities established six livability principles that will act as a foundation for interagency coordination. An affordable housing project on the subject would be consistent with these livability principles. Locally, public funders now prioritize funding for TOD projects. TOD projects serving priority populations and that are consistent with other public policy goals will be most competitive for funding. The City of Seattle Office of Housing includes the funding of TOD as a program goal, with the intent to: Contribute to the development of sustainable, walkable neighborhoods, particularly near high capacity transit, giving Low Income residents access to transportation, services and economic opportunity. (City of Seattle Office of Housing, 2014 Housing Funding Policy). The Office of Housing and Seattle Department of Transportation have mapped these corridors throughout the city. The subject site is located within a high capacity transit corridor. Potential New and Expanded Funding Programs There are a number of proposed new and expanded funding programs targeting affordable transit oriented development in Seattle. These programs were not accounted for in the analysis as it is unknown if they will pass as envisioned. Combined they have the potential to greatly expand the pool of funding available to projects located on urban sites near public transportation. The following is a list of five proposed new and/or expanded programs that could affect funding availability. The proposed Housing Affordability and Livability (HALA) legislation includes at least two programs that could significantly affect the amount of funding available. 5

1) The Affordable Housing Impact Mitigation Program would directly fund the construction of new affordable housing by requiring developers to pay a fee on all new commercial development. The required contribution to affordable housing would range from 5 to 17 per gross square foot, based on the location of the commercial development. 2) The Mandatory Housing Affordability program for new multifamily developments would require five to eight percent of units to be affordable for residents earning up to 60% AMI for 50 years. As an alternative to onsite units, developers could pay a fee to construct new affordable housing offsite. The Seattle Office of Housing (OH) is the largest source of soft debt for 4% LIHTC projects in Seattle. In a typical year, approximately 75% of OH s funding comes from the Seattle Housing Levy. Currently, there is about 6 million per year in levy funding available for projects targeting households making above 30% AMI. The current levy expires in 2016. The mayor is proposing to double the next levy, which would increase the amount of funding available to projects targeting households above 30% AMI to 11.5 million annually over the next seven years. Up to 45 million in King County WorkforceHousing Bonds backed by the local hotel tax could be available over the next six years. This funding source will target projects located within a halfmile of a transit station, although only a portion of the total funding will be available to projects located in Seattle. Legislators authorized Sound Transit to go to the voters for expansion of light rail. This funding package includes an affordable housing fund aimed at creating affordable housing near light rail stations. This provision gives Sound Transit the authority to contribute 20 million over five years to a revolving loan fund. The Growing Transit Communities Partnership has developed a proposed Regional Equitable Development Initiative (REDI) fund. The REDI Fund is a coalition of public entities in the region is working together to identify commitments for public catalyst ( seed ) investments, with a target of achieving a 5 million public investment from local, regional, and state sources, an amount that would leverage an additional 20 million in foundation and private capital. Once established through formal agreements among investors, the REDI Fund would provide a rolling source of loans for property acquisition to ensure opportunities for equitable TOD. 6

4% LIHTC NonSenior Housing Scenario Feasibility Analysis The 4% LIHTC scenario presented in Exhibit 2 may be financially feasible in the current funding environment. This scenario uses taxexempt bond financing, and would qualify for a noncompetitive allocation of 4% Low Income Housing Tax Credits on all 115 units. Rents are restricted at 60% AMI for all units. The subject is not located in a HUD designated Difficult Development Area or Qualified Census Tract. This means that it does not qualify for as much tax credit equity as projects that are located in one of these designated areas. This ultimately increases the amount of hard and soft debt needed support the project. Exhibit 2: 4% NonSenior LIHTC Scenario Project Description Number of Units 115 Project Type NonSenior/ 4% LIHTC Building Type Midrise Sources Total Per Unit Tax Exempt Bonds 10,350,000 90,000 4% LIHTC Equity 9,109,893 79,216 Soft Debt 13,458,177 117,028 Deferred Dev Fee 1,720,658 14,962 Total 34,638,728 301,206 Uses Total Per Unit Acquisition 4,261,325 37,055 Construction 22,505,828 195,703 Soft Costs, Financing & Other 7,871,575 68,448 Total 34,638,728 301,206 As shown in Exhibit 2, soft debt in the amount of 13.5 million from sources such as the City of Seattle, King County, or others is required. This amount is on the higher end of the Project Performance Total Net Operating Income 714,040 Debt Service 592,749 DCR 1.20 range of historic funding levels for projects without deeper income restrictions, or special population targeting. A partial or full land donation would increase the ability of soft debt funders to leverage their resources, which would further help a project compete for funding. This scenario also assumes a deferred developer fee of 1.7 million, which is repaid from operating revenue over a 12 year period. The transitoriented nature of this project could also help it compete for future funding, as there are a number of proposals to create new programs and to expand existing programs targeting the development of affordable TOD projects in Seattle. It is unknown how much new funding will be available through these programs as they are still being developed. More detail related to this scenario is presented in Appendix A. 7

4% LIHTC Senior Housing Scenario Feasibility Analysis The 4% Senior LIHTC scenario presented in Exhibit 3 may be financially feasible in the current funding environment. This scenario uses taxexempt bond financing, and would qualify for a noncompetitive allocation of 4% Low Income Housing Tax Credits on all 116 units. Rents are restricted at 60% AMI for all units. The subject is not located in a HUD designated Difficult Development Area or Qualified Census Tract. This means that it does not qualify for as much tax credit equity as projects that are located in one of these designated areas. This ultimately increases the amount of hard and soft debt needed support the project. As shown in Exhibit 3, soft debt in the amount of 13.0 million from sources such as the City of Seattle, King County, Exhibit 3: Project Description Number of Units Project Type Building Type 4% Senior LIHTC Scenario 116 units Senior/ 4% LIHTC Midrise Sources Total Per Unit Tax Exempt Bonds 10,750,000 92,672 4% LIHTC Equity 9,069,476 78,185 Soft Debt 12,985,581 111,945 Deferred Dev Fee 1,706,930 14,715 Total 34,511,987 297,517 Uses Total Per Unit Acquisition 4,261,325 36,736 Construction 22,399,595 193,100 Soft Costs, Financing & Other 7,851,067 67,682 Total 34,511,987 297,517 Project Performance Total Net Operating Income 739,007 Debt Service 615,657 DCR 1.20 or others is required. This amount is on the higher end of the range of historic funding levels for projects without deeper income restrictions. A partial or full land donation would increase the ability of soft debt funders to leverage their resources, which would further help a project compete for funding. This scenario also assumes a deferred developer fee of 1.7 million, which is repaid from operating revenue over an 11year period. The transitoriented nature of this project could also help it compete for future funding, as there are a number of proposals to create new programs and to expand existing programs targeting the development of affordable TOD projects in Seattle. It is unknown how much new funding will be available through these programs as they are still being developed. More detail related to this scenario is presented in Appendix B. 8

9% LIHTC NonSenior Housing Scenario Feasibility Analysis The 9% LIHTC scenario presented in Exhibit 4 may be financially feasible in the current funding environment. This scenario relies on a combination of permanent financing and soft debt, and is structured to compete for an allocation of 9% tax credits. To be competitive for 9% tax credits, the proposed project must serve two targeted populations. In this scenario, 20% of the units contain 3bedrooms for large families and 20% of the units are designed to accommodate people with disabilities. 50% of the units are restricted at 30% AMI, 25% are restricted at 40% AMI, and the remaining 25% are restricted at 60% AMI. Exhibit 4: 9% NonSenior LIHTC Scenario Project Description Number of Units 96 Project Type NonSenior/ 9% LIHTC Building Type Midrise Sources Total Per Unit Perm Loan 4,375,000 45,573 9% LIHTC Equity 16,343,945 170,249 Soft Debt 9,060,367 94,379 Deferred Dev Fee 493,477 5,140 Total 30,272,789 315,342 Uses Total Per Unit Acquisition 4,261,325 44,389 Construction 20,004,899 208,384 Soft Costs, Financing & Other 6,006,565 62,568 Total 30,272,789 315,342 As shown in Exhibit 4, soft debt in the amount of 9.1 million from sources such as the City of Seattle, King County, the Housing Trust Fund or others is required. This amount is on Project Performance Total Net Operating Income 254,258 Debt Service 221,040 DCR 1.15 the higher end of the range of historic funding levels for projects without homeless services. A partial or full land donation would increase the ability of soft debt funders to leverage their resources which would further help a project built at this site compete for funding. This scenario also assumes a deferred developer fee of 493,000, which is repaid from operating revenue over a 15year period. It is worth noting that this is a longer payback period than most deferred fee payment schedules found in the comparable property set used to ground truth this analysis. More detail related to this scenario is presented in Appendix C. 9

9% LIHTC Senior Housing Scenario Feasibility Analysis The 9% Senior LIHTC scenario presented in Exhibit 5 may be financially feasible in the current funding environment. This scenario relies on a combination of permanent financing and soft debt, and is structured to compete for an allocation of 9% tax credits. To be competitive for 9% tax credits, 100% of the units are targeted at seniors and 20% of the units are designed to accommodate people with disabilities. 50% of the units are restricted at 30% AMI, 25% are restricted at 40% AMI, and the remaining 25% are restricted at 60% AMI. As shown in Exhibit 5, soft debt in the amount of 9.9 million from sources such as the City of Seattle, King County, the Housing Trust Fund or others is required. This amount is on the higher end of the range of historic Exhibit 5: Project Description Number of Units Project Type Building Type 9% Senior LIHTC Scenario 100 units Senior/ 9% LIHTC Midrise Sources Total Per Unit Perm Loan 4,175,000 41,750 9% LIHTC Equity 16,343,945 163,439 Soft Debt 9,905,389 99,054 Deferred Dev Fee 452,613 4,526 Total 30,876,947 308,769 Uses Total Per Unit Acquisition 4,261,325 42,613 Construction 20,539,453 205,395 Soft Costs, Financing & Other 6,076,169 60,762 Total 30,876,947 308,769 Project Performance Total Net Operating Income 243,491 Debt Service 210,936 DCR 1.15 funding levels for projects without homeless services. A partial or full land donation would increase the ability of soft debt funders to leverage their resources which would further help a project built at this site compete for funding. This scenario also assumes a deferred developer fee of 450,000, which is repaid from operating revenue over a 15year period. It is worth noting that this is a longer payback period than most deferred fee payment schedules found in the comparable property set used to ground truth this analysis. More detail related to this scenario is presented in Appendix D. 10

Appendix Appendix A 4% NonSenior Scenario Assumptions Appendix B 4% Senior Scenario Assumptions Appendix C 9% NonSenior Scenario Assumptions Appendix D 9%Senior Scenario Assumptions Appendix E Combined Pro Forma Assumptions Summary 11

Appendix A 4% LIHTC NonSenior Scenario 12

Budget Total Residential Project Cost R E S I D E N T I A L Eligible Basis Acquisition New Construction/ Rehab Acquisition Costs: Land 4,241,325 Existing Structures Liens Closing, Title & Recording Costs 20,000 Extension payment Other: SUBTOTAL 4,261,325 Construction: Demolition New Building 19,438,983 19,438,983 Rehabilitation Contractor Profit Contractor Overhead New Construction Contingency 1,064,284 1,064,284 Rehab Contingency Accessory Building Site Work / Infrastructure Off site Infrastructure Environmental Abatement (Building) Environmental Abatement (Land) Sales Tax 1,952,560 1,952,560 Bond Premium Equipment and Furnishings 50,000 50,000 SUBTOTAL 22,505,828 22,505,828 Soft Costs: Buyer's Appraisal 16,000 Market Study 16,000 16,000 Architect 1,800,466 1,800,466 Engineering Environmental Assessment 10,000 10,000 Geotechnical Study Boundary & Topographic Survey 10,000 10,000 Legal Real Estate 25,000 25,000 Developer Fee 3,006,465 3,006,465 Project Management / Dev Consultant Fees Other Consultants: 250,000 250,000 Contingency 93,873 93,873 SUBTOTAL 5,227,805 5,211,805 PreDevelopment / Bridge Financing *Bridge Loan Fees *Bridge Loan Interest SUBTOTAL Construction Financing Construction Loan Fees 187,239 187,239 Construction Loan Expenses (Appraisal, 3rd Party Rpts) Construction Loan Legal 20,000 20,000 Construction Period Interest 561,718 561,718 Leaseup Period Interest SUBTOTAL 768,958 768,958 Permanent Financing Permanent Loan Fees Permanent Loan Expenses (Appraisal, 3rd Party Rpts) Permanent Loan Legal LIHTC Fees 93,511 *LIHTC Legal (Syndication/Organizational) 75,000 *LIHTC Owners Title Policy 30,000 State HTF Fees #### SUBTOTAL 198,511 Capitalized Reserves *Operating Reserves 231,787.89 *Replacement Reserves 198,675.34 *Other Reserves: SUBTOTAL 430,463 Other Development Costs Real Estate Tax 10,000 10,000 Insurance 80,000 80,000 Relocation Bidding Costs Permits, Fees & Hookups 575,000 575,000 Impact/Mitigation Fees Development Period Utilities *Nonprofit Donation 20,000 Accounting/Audit 15,000 15,000 Marketing/Leasing Expenses 250,600 *Carrying Costs at Rent up/ Lease Up Reserve SUBTOTAL 950,600 680,000 Bond Related Costs of Issuance (4% Tax Credit/Bond Projects Only) Issuer Fees & Related Expenses 50,000 Bond Counsel 55,000 Trustee Fees & Expenses 3,000 Underwriter Fees & Counsel 187,239 Placement Agent Fees & Counsel Borrower's Counsel Bond Related Rating Agency SUBTOTAL 295,239 TOTALS: 34,638,729 29,166,590 13

Unit Size (Number of Bedrooms % of Median Income Served Number of Units PROJECT RENTS Maximum Allowable Tax Credit Rents Utility Allowance Net Maximum Tax Credit Rents Annual Gross Rental Income 0 60% 52 942 40 902 562,848 1 60% 40 1,008 40 968 464,640 2 60% 23 1,210 65 1,145 316,020 Totals 115 1,343,508 FINANCING Permanent Financing Sources Tax Exempt Bonds Soft Debt (Fed/State/Local) Deferred Development Fee Total Permanent Sources Excluding Equity Expected LIHTC Equity Total Permanent Sources Amount Interest Loan Amortization Rate Term Period 10,350,000 4.50% 20 35 13,458,177 TBD TBD TBD 1,720,658 0.01% 12 600 25,528,835 9,109,893 34,638,728 Repayment Structure (e.g. deferred, cash flow only, Must pay Payment deferred 20 years Cash flow only 14

OPERATING PRO FORMA REVENUES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Residential Income Inflation Factor Annual Gross Rental Income 2.50% per year 1,343,508 1,377,096 1,411,523 1,446,811 1,482,981 1,520,056 1,558,057 1,597,009 1,636,934 1,677,857 1,719,804 1,762,799 1,806,869 1,852,041 1,898,342 Other: Laundry 10,350 10,609 10,874 11,146 11,424 11,710 12,003 12,303 12,610 12,926 13,249 13,580 13,920 14,268 14,624 Other: 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Residential Income = 1,353,858 1,387,704 1,422,397 1,457,957 1,494,406 1,531,766 1,570,060 1,609,312 1,649,545 1,690,783 1,733,053 1,776,379 1,820,788 1,866,308 1,912,966 Less Residential Vacancy 5.00% per year 67,693 69,385 71,120 72,898 74,720 76,588 78,503 80,466 82,477 84,539 86,653 88,819 91,039 93,315 95,648 EFFECTIVE GROSS INCOME (EGI) 6,496 = 1,286,165 1,318,319 1,351,277 1,385,059 1,419,686 1,455,178 1,491,557 1,528,846 1,567,067 1,606,244 1,646,400 1,687,560 1,729,749 1,772,993 1,817,318 EXPENSES Inflation Factor Operating Expenses 3.50% Cost Per Unit Management Onsite 850 97,750 101,171 104,712 108,377 112,170 116,096 120,160 124,365 128,718 133,223 137,886 142,712 147,707 152,877 158,227 Management Offsite 600 69,000 71,415 73,915 76,502 79,179 81,950 84,819 87,787 90,860 94,040 97,331 100,738 104,264 107,913 111,690 Accounting 200 23,000 23,805 24,638 25,501 26,393 27,317 28,273 29,262 30,287 31,347 32,444 33,579 34,755 35,971 37,230 Legal Services 200 23,000 23,805 24,638 25,501 26,393 27,317 28,273 29,262 30,287 31,347 32,444 33,579 34,755 35,971 37,230 Insurance 300 34,500 35,708 36,957 38,251 39,590 40,975 42,409 43,894 45,430 47,020 48,666 50,369 52,132 53,956 55,845 Real Estate Taxes 350 40,250 41,659 43,117 44,626 46,188 47,804 49,478 51,209 53,002 54,857 56,777 58,764 60,821 62,949 65,152 Marketing 175 20,125 20,829 21,558 22,313 23,094 23,902 24,739 25,605 26,501 27,428 28,388 29,382 30,410 31,475 32,576 Security 100 11,500 11,903 12,319 12,750 13,197 13,658 14,136 14,631 15,143 15,673 16,222 16,790 17,377 17,985 18,615 Maintenance and janitorial 650 74,750 77,366 80,074 82,877 85,777 88,780 91,887 95,103 98,431 101,877 105,442 109,133 112,952 116,906 120,997 Decorating/Turnover 100 11,500 11,903 12,319 12,750 13,197 13,658 14,136 14,631 15,143 15,673 16,222 16,790 17,377 17,985 18,615 Contract Repairs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Landscaping 75 8,625 8,927 9,239 9,563 9,897 10,244 10,602 29,262 30,287 31,347 32,444 33,579 34,755 35,971 37,230 Pest Control 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Fire Safety 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Elevator 100 11,500 11,903 12,319 12,750 13,197 13,658 14,136 14,631 15,143 15,673 16,222 16,790 17,377 17,985 18,615 Water & Sewer 680 78,200 80,937 83,770 86,702 89,736 92,877 96,128 99,492 102,974 106,579 110,309 114,170 118,166 122,301 126,582 Garbage Removal 175 20,125 20,829 21,558 22,313 23,094 23,902 24,739 25,605 26,501 27,428 28,388 29,382 30,410 31,475 32,576 Electric 50 5,750 5,951 6,160 6,375 6,598 6,829 7,068 7,316 7,572 7,837 8,111 8,395 8,689 8,993 9,307 Oil/Gas/Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Telephone 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Monitoring 45 5,175 5,356 5,544 5,738 5,938 6,146 6,361 6,584 6,814 7,053 7,300 7,555 7,820 8,093 8,377 Total Residential Operating Expenses 4,650 534,750 553,466 572,838 592,887 613,638 635,115 657,344 698,640 723,093 748,401 774,595 801,706 829,766 858,807 888,866 Capitalized Capitalized Portion Replacement Reserve 231,788 175 175 20,125 20,829 21,558 22,313 23,094 23,902 24,739 25,605 26,501 27,428 28,388 29,382 30,410 31,475 32,576 Operating Reserve 198,675 150 150 17,250 17,854 18,479 19,125 19,795 20,488 21,205 21,947 22,715 23,510 24,333 25,184 26,066 26,978 27,922 Total Reserves 37,375 38,683 40,037 41,438 42,889 44,390 45,943 47,551 49,216 50,938 52,721 54,566 56,476 58,453 60,499 TOTAL PROJECT EXPENSES = 572,125 592,149 612,875 634,325 656,527 679,505 703,288 746,192 772,309 799,339 827,316 856,272 886,242 917,260 949,364 NET OPERATING INCOME (EGI Total Expenses) = 714,040 726,170 738,403 750,734 763,159 775,673 788,269 782,654 794,759 806,905 819,084 831,288 843,507 855,733 867,953 Debt Service on Loan Amount Bonds 10,350,000 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL DEBT SERVICE = 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 592,749 Projected Gross Cash Flow = 121,291 133,421 145,653 157,985 170,410 182,924 195,520 189,905 202,010 214,156 226,335 238,539 250,758 262,983 275,204 Debt Coverage Ratio (DCR) 1.205 1.23 1.25 1.27 1.29 1.31 1.33 1.32 1.34 1.36 1.38 1.40 1.42 1.44 1.46 Deferred Developer Payment 103,097 113,408 123,805 134,287 144,848 155,485 166,192 161,419 171,708 182,032 192,385 71,991 0 0 0 Deferred Developer Balance 1,617,561 1,504,153 1,380,348 1,246,061 1,101,213 945,727 779,535 618,116 446,408 264,375 71,991 0 0 0 0 Net Cash Flow (Before soft debt) 18,194 20,013 21,848 23,698 25,561 27,439 29,328 28,486 30,301 32,123 33,950 166,548 250,758 262,983 275,204 15

Appendix B 4% LIHTC Senior Scenario 16

Budget Total Residential Project Cost R E S I D E N T I A L Eligible Basis Acquisition New Construction/ Rehab Acquisition Costs: Land 4,241,325 Existing Structures Liens Closing, Title & Recording Costs 20,000 Extension payment Other: SUBTOTAL 4,261,325 Construction: Demolition New Building 19,347,003 19,347,003 Rehabilitation Contractor Profit Contractor Overhead New Construction Contingency 1,059,248 1,059,248 Rehab Contingency Accessory Building Site Work / Infrastructure Off site Infrastructure Environmental Abatement (Building) Environmental Abatement (Land) Sales Tax 1,943,344 1,943,344 Bond Premium Equipment and Furnishings 50,000 50,000 SUBTOTAL 22,399,595 22,399,595 Soft Costs: Buyer's Appraisal 16,000 Market Study 16,000 16,000 Architect 1,791,968 1,791,968 Engineering Environmental Assessment 10,000 10,000 Geotechnical Study Boundary & Topographic Survey 10,000 10,000 Legal Real Estate 25,000 25,000 Developer Fee 2,989,980 2,989,980 Project Management / Dev Consultant Fees Other Consultants: 250,000 250,000 Contingency 93,448 93,448 SUBTOTAL 5,202,396 5,186,396 PreDevelopment / Bridge Financing *Bridge Loan Fees *Bridge Loan Interest SUBTOTAL Construction Financing Construction Loan Fees 186,550 186,550 Construction Loan Expenses (Appraisal, 3rd Party Rpts) Construction Loan Legal 20,000 20,000 Construction Period Interest 559,650 559,650 Leaseup Period Interest SUBTOTAL 766,200 766,200 Permanent Financing Permanent Loan Fees Permanent Loan Expenses (Appraisal, 3rd Party Rpts) Permanent Loan Legal LIHTC Fees 93,115 *LIHTC Legal (Syndication/Organizational) 75,000 *LIHTC Owners Title Policy 30,000 State HTF Fees #### SUBTOTAL 198,115 Capitalized Reserves *Operating Reserves 233,803.44 *Replacement Reserves 200,402.95 *Other Reserves: SUBTOTAL 434,206 Other Development Costs Real Estate Tax 10,000 10,000 Insurance 80,000 80,000 Relocation Bidding Costs Permits, Fees & Hookups 580,000 580,000 Impact/Mitigation Fees Development Period Utilities *Nonprofit Donation 20,000 Accounting/Audit 15,000 15,000 Marketing/Leasing Expenses 250,600 *Carrying Costs at Rent up/ Lease Up Reserve SUBTOTAL 955,600 685,000 Bond Related Costs of Issuance (4% Tax Credit/Bond Projects Only) Issuer Fees & Related Expenses 50,000 Bond Counsel 55,000 Trustee Fees & Expenses 3,000 Underwriter Fees & Counsel 186,550 Placement Agent Fees & Counsel Borrower's Counsel Bond Related Rating Agency SUBTOTAL 294,550 TOTALS: 34,511,988 29,037,191 17

Unit Size (Number of Bedrooms % of Median Income Served Number of Units PROJECT RENTS Maximum Allowable Tax Credit Rents Utility Allowance Net Maximum Tax Credit Rents Annual Gross Rental Income 0 60% 61 942 40 902 660,264 1 60% 38 1,008 40 968 441,408 2 60% 17 1,210 65 1,145 233,580 Totals 116 1,335,252 FINANCING Permanent Financing Sources Tax Exempt Bonds Soft Debt (Fed/State/Local) Deferred Development Fee Total Permanent Sources Excluding Equity Expected LIHTC Equity Total Permanent Sources Amount Interest Loan Amortization Rate Term Period 10,750,000 4.50% 20 35 12,985,581 TBD TBD TBD 1,706,930 0.01% 11 600 25,442,511 9,069,476 34,511,987 Repayment Structure (e.g. deferred, cash flow only, Must pay Payment deferred 20 years Cash flow only 18

OPERATING PRO FORMA REVENUES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Residential Income Inflation Factor Annual Gross Rental Income 2.50% per year 1,335,252 1,368,633 1,402,849 1,437,920 1,473,868 1,510,715 1,548,483 1,587,195 1,626,875 1,667,547 1,709,235 1,751,966 1,795,765 1,840,660 1,886,676 Other: Laundry 10,440 10,701 10,969 11,243 11,524 11,812 12,107 12,410 12,720 13,038 13,364 13,698 14,041 14,392 14,751 Other: 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Residential Income = 1,345,692 1,379,334 1,413,818 1,449,163 1,485,392 1,522,527 1,560,590 1,599,605 1,639,595 1,680,585 1,722,600 1,765,665 1,809,806 1,855,051 1,901,428 Less Residential Vacancy 5.00% per year 67,285 68,967 70,691 72,458 74,270 76,126 78,030 79,980 81,980 84,029 86,130 88,283 90,490 92,753 95,071 EFFECTIVE GROSS INCOME (EGI) 6,457 = 1,278,407 1,310,368 1,343,127 1,376,705 1,411,123 1,446,401 1,482,561 1,519,625 1,557,615 1,596,556 1,636,470 1,677,381 1,719,316 1,762,299 1,806,356 EXPENSES Inflation Factor Operating Expenses 3.50% Cost Per Unit Management Onsite 850 98,600 102,051 105,623 109,320 113,146 117,106 121,205 125,447 129,837 134,382 139,085 143,953 148,991 154,206 159,603 Management Offsite 600 69,600 72,036 74,557 77,167 79,868 82,663 85,556 88,551 91,650 94,858 98,178 101,614 105,170 108,851 112,661 Accounting 200 23,200 24,012 24,852 25,722 26,623 27,554 28,519 29,517 30,550 31,619 32,726 33,871 35,057 36,284 37,554 Legal Services 200 23,200 24,012 24,852 25,722 26,623 27,554 28,519 29,517 30,550 31,619 32,726 33,871 35,057 36,284 37,554 Insurance 300 34,800 36,018 37,279 38,583 39,934 41,331 42,778 44,275 45,825 47,429 49,089 50,807 52,585 54,426 56,331 Real Estate Taxes 25 2,900 3,002 3,107 3,215 3,328 3,444 3,565 3,690 3,819 3,952 4,091 4,234 4,382 4,535 4,694 Marketing 175 20,300 21,011 21,746 22,507 23,295 24,110 24,954 25,827 26,731 27,667 28,635 29,637 30,675 31,748 32,859 Security 100 11,600 12,006 12,426 12,861 13,311 13,777 14,259 14,758 15,275 15,810 16,363 16,936 17,528 18,142 18,777 Maintenance and janitorial 650 75,400 78,039 80,770 83,597 86,523 89,552 92,686 95,930 99,287 102,762 106,359 110,082 113,935 117,922 122,050 Decorating/Turnover 100 11,600 12,006 12,426 12,861 13,311 13,777 14,259 14,758 15,275 15,810 16,363 16,936 17,528 18,142 18,777 Contract Repairs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Landscaping 75 8,700 9,005 9,320 9,646 9,983 10,333 10,695 29,517 30,550 31,619 32,726 33,871 35,057 36,284 37,554 Pest Control 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Fire Safety 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Elevator 100 11,600 12,006 12,426 12,861 13,311 13,777 14,259 14,758 15,275 15,810 16,363 16,936 17,528 18,142 18,777 Water & Sewer 680 78,880 81,641 84,498 87,456 90,517 93,685 96,964 100,357 103,870 107,505 111,268 115,162 119,193 123,365 127,683 Garbage Removal 175 20,300 21,011 21,746 22,507 23,295 24,110 24,954 25,827 26,731 27,667 28,635 29,637 30,675 31,748 32,859 Electric 50 5,800 6,003 6,213 6,431 6,656 6,889 7,130 7,379 7,637 7,905 8,181 8,468 8,764 9,071 9,388 Oil/Gas/Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Telephone 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Monitoring 45 5,220 5,403 5,592 5,788 5,990 6,200 6,417 6,641 6,874 7,114 7,363 7,621 7,888 8,164 8,450 Total Residential Operating Expenses 4,325 501,700 519,260 537,434 556,244 575,712 595,862 616,717 656,751 679,737 703,528 728,151 753,636 780,014 807,314 835,570 Capitalized Capitalized Portion Replacement Reserve 233,803 175 175 20,300 21,011 21,746 22,507 23,295 24,110 24,954 25,827 26,731 27,667 28,635 29,637 30,675 31,748 32,859 Operating Reserve 200,403 150 150 17,400 18,009 18,639 19,292 19,967 20,666 21,389 22,138 22,912 23,714 24,544 25,403 26,293 27,213 28,165 Total Reserves 37,700 39,020 40,385 41,799 43,262 44,776 46,343 47,965 49,644 51,381 53,180 55,041 56,967 58,961 61,025 TOTAL PROJECT EXPENSES = 539,400 558,279 577,819 598,042 618,974 640,638 663,060 704,715 729,381 754,909 781,331 808,677 836,981 866,275 896,595 NET OPERATING INCOME (EGI Total Expenses) = 739,007 752,089 765,308 778,663 792,149 805,763 819,500 814,909 828,235 841,647 855,139 868,704 882,335 896,023 909,761 Debt Service on Loan Amount Bonds 10,750,000 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL DEBT SERVICE = 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 615,657 Projected Gross Cash Flow = 123,350 136,431 149,651 163,005 176,491 190,105 203,843 199,252 212,577 225,990 239,482 253,047 266,678 280,366 294,104 Debt Coverage Ratio (DCR) 1.20 1.22 1.24 1.26 1.29 1.31 1.33 1.32 1.35 1.37 1.39 1.41 1.43 1.46 1.48 Deferred Developer Payment 104,848 115,967 127,203 138,554 150,018 161,590 173,267 169,364 180,691 192,091 193,338 0 0 0 0 Deferred Developer Balance 1,602,082 1,486,116 1,358,913 1,220,358 1,070,340 908,751 735,484 566,120 385,430 193,338 0 0 0 0 0 Net Cash Flow (Before soft debt) 18,503 20,465 22,448 24,451 26,474 28,516 30,576 29,888 31,887 33,898 46,143 253,047 266,678 280,366 294,104 19

Appendix C 9% LIHTC NonSenior Scenario 20

Budget Acquisition Costs: Land 4,241,325 Existing Structures Liens Closing, Title & Recording Costs 20,000 20,000 Extension payment Other: Construction: SUBTOTAL 4,261,325 20,000 Demolition New Building 17,273,585 17,273,585 Rehabilitation Contractor Profit Contractor Overhead New Construction Contingency 945,729 945,729 Rehab Contingency Accessory Building Site Work / Infrastructure Off site Infrastructure Environmental Abatement (Building) Environmental Abatement (Land) Sales Tax 1,735,585 1,735,585 Bond Premium Equipment and Furnishings 50,000 50,000 Other: Soft Costs: SUBTOTAL 20,004,899 20,004,899 Buyer's Appraisal 16,000 Market Study 16,000 16,000 Architect 1,600,392 1,600,392 Engineering Environmental Assessment 10,000 10,000 Geotechnical Study Boundary & Topographic Survey 10,000 10,000 Legal Real Estate 25,000 25,000 Developer Fee 1,702,729 1,702,729 Project Management / Dev Consultant Fees Other Consultants 196,000 196,000 Soft Cost Contingency 178,806 178,806 Other: PreDevelopment / Bridge Financing Bridge Loan Fees Bridge Loan Interest Construction Financing SUBTOTAL 3,754,927 3,738,927 SUBTOTAL Construction Loan Fees 165,332 165,332 Construction Loan Expenses 10,000 10,000 Construction Loan Legal 20,000 20,000 Construction Period Interest 495,996 495,996 Leaseup Period Interest 110,520 Permanent Financing Permanent Loan Fees 54,688 Permanent Loan Expenses Permanent Loan Legal LIHTC Fees 164,360 LIHTC Legal 70,000 LIHTC Owners Title Policy 25,000 State HTF Fees Other: Capitalized Reserves Operating Reserves 193,493 Replacement Reserves 165,851 Other: Other Development Costs R E S I D E N T I A L Eligible Basis Total Residential Project Cost Acquisition New Construction / Rehab SUBTOTAL 801,848 691,328 SUBTOTAL 314,047 SUBTOTAL 359,343 Real Estate Tax 10,000 10,000 Insurance 50,400 Relocation Bidding Costs Permits, Fees & Hookups 480,000 480,000 Impact/Mitigation Fees Development Period Utilities Nonprofit Donation 25,000 Accounting/Audit 15,000 15,000 Marketing/Leasing Expenses 196,000 Carrying Costs at Rent up/ Lease Up Reserve SUBTOTAL 776,400 505,000 TOTALS: 30,272,789 20,000 24,940,154 21

% of Median Income Served #Units / Beds Unit Size Avg Unit Square Footage Tenant Paid Monthly Rent PROJECT RENTS Tenant Paid Utilities Sum of Tenant Paid Rent and Utilities Annual Gross Rental Income 30% 22 Studio 465 431 40 471 113,784 30% 16 1 BR 575 464 40 504 89,088 30% 10 3 BR 980 594 105 699 71,280 40% 11 Studio 465 588 40 628 77,616 40% 8 1 BR 575 632 40 672 60,672 40% 5 3 BR 980 827 105 932 49,620 60% 11 Studio 465 902 40 942 119,064 60% 8 1 BR 575 968 40 1,008 92,928 60% 5 3 BR 980 1,293 105 1,398 77,580 Total 96 751,632 FINANCING Permanent Financing Sources Hard Debt Soft Debt (Fed/State/Local) Deferred Development Fee Amount Interest Rate Loan Term Amortization Period 4,375,000 4.00% 40 40 9,060,367 TBD TBD TBD 493,477 0.01% 12 600 Repayment Structure (e.g. deferred, cash flow only, Must pay Payment deferred 20 years Cash flow only Total Permanent Sources Excluding Equity Expected LIHTC Equity Total Permanent Sources 13,928,844 16,343,945 30,272,789 22

REVENUES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Residential Income Escalator Annual Gross Tenant Paid Rental Income 2.5% 751,632 770,423 789,683 809,425 829,661 850,403 871,663 893,454 915,791 938,685 962,153 986,206 1,010,861 1,036,133 1,062,036 Annual Gross Rental Subsidy Income 0.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Annual Operating Subsidy Sources 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Source: Laundry 2.5% 8,640 8,856 9,077 9,304 9,537 9,775 10,020 10,270 10,527 10,790 11,060 11,336 11,620 11,910 12,208 Other Source: 0.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Residential Income = 760,272 779,279 798,761 818,730 839,198 860,178 881,682 903,724 926,318 949,476 973,212 997,543 1,022,481 1,048,043 1,074,244 Total Annual Service Funding 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total NonResidential Income 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL PROJECT INCOME = 760,272 779,279 798,761 818,730 839,198 860,178 881,682 903,724 926,318 949,476 973,212 997,543 1,022,481 1,048,043 1,074,244 Annual % Less Annual Residential Vacancy 5.0% (38,014) (38,964) (39,938) (40,936) (41,960) (43,009) (44,084) (45,186) (46,316) (47,474) (48,661) (49,877) (51,124) (52,402) (53,712) Less Annual NonResidential Vacancy 0.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EFFECTIVE GROSS INCOME (EGI) = 722,258 740,315 758,823 777,793 797,238 817,169 837,598 858,538 880,002 902,002 924,552 947,666 971,357 995,641 1,020,532 EXPENSES Operating Expenses Expenses Per Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Escalator (Y1) Management Onsite 3.5% 950 91,200 94,392 97,696 101,115 104,654 108,317 112,108 116,032 120,093 124,296 128,647 133,149 137,809 142,633 147,625 Management Offsite 3.5% 600 57,600 59,616 61,703 63,862 66,097 68,411 70,805 73,283 75,848 78,503 81,250 84,094 87,038 90,084 93,237 Accounting 3.5% 200 19,200 19,872 20,568 21,287 22,032 22,804 23,602 24,428 25,283 26,168 27,083 28,031 29,013 30,028 31,079 Legal Services 3.5% 200 19,200 19,872 20,568 21,287 22,032 22,804 23,602 24,428 25,283 26,168 27,083 28,031 29,013 30,028 31,079 Insurance 3.5% 300 28,800 29,808 30,851 31,931 33,049 34,205 35,403 36,642 37,924 39,251 40,625 42,047 43,519 45,042 46,618 Real Estate Taxes 3.5% 25 2,400 2,484 2,571 2,661 2,754 2,850 2,950 3,053 3,160 3,271 3,385 3,504 3,627 3,753 3,885 Marketing 3.5% 200 19,200 19,872 20,568 21,287 22,032 22,804 23,602 24,428 25,283 26,168 27,083 28,031 29,013 30,028 31,079 Security 3.5% 100 9,600 9,936 10,284 10,644 11,016 11,402 11,801 12,214 12,641 13,084 13,542 14,016 14,506 15,014 15,539 Maintenance and janitorial 3.5% 700 67,200 69,552 71,986 74,506 77,114 79,813 82,606 85,497 88,490 91,587 94,792 98,110 101,544 105,098 108,776 Decorating/Turnover 3.5% 100 9,600 9,936 10,284 10,644 11,016 11,402 11,801 12,214 12,641 13,084 13,542 14,016 14,506 15,014 15,539 Contract Repairs 3.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Landscaping 3.5% 100 9,600 9,936 10,284 10,644 11,016 11,402 11,801 12,214 12,641 13,084 13,542 14,016 14,506 15,014 15,539 Pest Control 3.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Fire Safety 3.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Elevator 3.5% 100 9,600 9,936 10,284 10,644 11,016 11,402 11,801 12,214 12,641 13,084 13,542 14,016 14,506 15,014 15,539 Water & Sewer 3.5% 680 65,280 67,565 69,930 72,377 74,910 77,532 80,246 83,054 85,961 88,970 92,084 95,307 98,643 102,095 105,668 Garbage Removal 3.5% 200 19,200 19,872 20,568 21,287 22,032 22,804 23,602 24,428 25,283 26,168 27,083 28,031 29,013 30,028 31,079 Electric 3.5% 50 4,800 4,968 5,142 5,322 5,508 5,701 5,900 6,107 6,321 6,542 6,771 7,008 7,253 7,507 7,770 Oil/Gas/Other 3.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Telephone 3.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other 3.5% 45 4,320 4,471 4,628 4,790 4,957 5,131 5,310 5,496 5,689 5,888 6,094 6,307 6,528 6,756 6,993 Total Residential Operating Expenses 4550 436,800 452,088 467,911 484,288 501,238 518,781 536,939 555,732 575,182 595,314 616,150 637,715 660,035 683,136 707,046 Escalator Replacement Reserve 3.5% 193,492.50 175 16,800 17,388 17,997 18,626 19,278 19,953 20,651 21,374 22,122 22,897 23,698 24,527 25,386 26,274 27,194 Operating Reserve 3.5% 165,850.72 150 14,400 14,904 15,426 15,966 16,524 17,103 17,701 18,321 18,962 19,626 20,313 21,024 21,759 22,521 23,309 Total Reserves 325 31,200 32,292 33,422 34,592 35,803 37,056 38,353 39,695 41,084 42,522 44,011 45,551 47,145 48,795 50,503 Service Expenses 3.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NonResidential Expenses 0.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL PROJECT EXPENSES = 468,000 484,380 501,333 518,880 537,041 555,837 575,291 595,427 616,267 637,836 660,160 683,266 707,180 731,931 757,549 NET OPERATING INCOME (EGI Total Expenses) = 254,258 255,935 257,489 258,913 260,197 261,332 262,307 263,112 263,735 264,166 264,392 264,400 264,177 263,710 262,983 DEBT SERVICE Hard Debt Loan Amount Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Lender 1 4,375,000 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 Lender 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Lender 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Hard Debt Service 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 221,040 Debt Coverage Ratio (Hard Debt) 1.150 1.16 1.16 1.17 1.18 1.18 1.19 1.19 1.19 1.20 1.20 1.20 1.20 1.19 1.19 Gross Cash Flow 33,218 34,895 36,449 37,873 39,157 40,292 41,267 42,071 42,695 43,126 43,351 43,360 43,137 42,669 41,943 Deferred Developer Payment 28,235 29,660 30,982 32,192 33,284 34,248 35,077 35,761 36,291 36,657 36,849 36,856 36,666 36,269 14,452 Deferred Developer Balance 465,242 435,581 404,600 372,407 339,124 304,876 269,800 234,039 197,748 161,092 124,243 87,387 50,721 14,452 0 Net Cash Flow (Before soft debt) 4,983 5,234 5,467 5,681 5,874 6,044 6,190 6,311 6,404 6,469 6,503 6,504 6,471 6,400 27,491 23

Appendix D 9% LIHTC Senior Scenario 24

Budget Acquisition Costs: Land 4,241,325 Existing Structures Liens Closing, Title & Recording Costs 20,000 20,000 Extension payment Other: Construction: SUBTOTAL 4,261,325 20,000 Demolition New Building 17,736,421 17,736,421 Rehabilitation Contractor Profit Contractor Overhead New Construction Contingency 971,069 971,069 Rehab Contingency Accessory Building Site Work / Infrastructure Off site Infrastructure Environmental Abatement (Building) Environmental Abatement (Land) Sales Tax 1,781,962 1,781,962 Bond Premium Equipment and Furnishings 50,000 50,000 Other: Soft Costs: SUBTOTAL 20,539,452 20,539,452 Buyer's Appraisal 16,000 Market Study 16,000 16,000 Architect 1,643,156 1,643,156 Engineering Environmental Assessment 10,000 10,000 Geotechnical Study Boundary & Topographic Survey 10,000 10,000 Legal Real Estate 25,000 25,000 Developer Fee 1,677,596 1,677,596 Project Management / Dev Consultant Fees Other Consultants 200,000 200,000 Soft Cost Contingency 179,888 179,888 Other: PreDevelopment / Bridge Financing Bridge Loan Fees Bridge Loan Interest Construction Financing SUBTOTAL 3,777,640 3,761,640 SUBTOTAL Construction Loan Fees 168,675 168,675 Construction Loan Expenses 10,000 10,000 Construction Loan Legal 20,000 20,000 Construction Period Interest 506,024 506,024 Leaseup Period Interest 105,468 Permanent Financing Permanent Loan Fees 52,188 Permanent Loan Expenses Permanent Loan Legal LIHTC Fees 164,360 LIHTC Legal 70,000 LIHTC Owners Title Policy 25,000 State HTF Fees Other: Capitalized Reserves Operating Reserves 201,555 Replacement Reserves 172,761 Other: Other Development Costs R E S I D E N T I A L Eligible Basis Total Residential Project Cost Acquisition New Construction / Rehab SUBTOTAL 810,166 704,699 SUBTOTAL 311,547 SUBTOTAL 374,316 Real Estate Tax 10,000 10,000 Insurance 52,500 Relocation Bidding Costs Permits, Fees & Hookups 500,000 500,000 Impact/Mitigation Fees Development Period Utilities Nonprofit Donation 25,000 Accounting/Audit 15,000 15,000 Marketing/Leasing Expenses 200,000 Carrying Costs at Rent up/ Lease Up Reserve SUBTOTAL 802,500 525,000 TOTALS: 30,876,946 20,000 25,530,791 25