2 affordable housing by Meng Cao

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

Affordable Housing Prospectus and Pro Forma SITE ANALYSIS â&#x20AC;˘

Site Location and Characteristics

The site resides adjacent to the Haverford North neighborhood. Haverford North is a triangular shaped neighborhood bound by Haverford Avenue to the south, Lancaster Avenue to the north, and Belmont Avenue to the west. The neighborhood is a short drive from University City, the Philadelphia Zoo and Fairmount Park. The area is mainly residential and occupied mostly by 2 and 3 story townhouses. The site of development locates at the south east corner of Fairmount Avenue and 46th Street.

Lancaster Ave.

46 st. Site

20 min walk

Image 1.1 Site location

It is conveniently serviced by public transit system running on Fairmount Avenue, and is within walking distance to Parkway West High School and local health center. Itâ&#x20AC;&#x2122;s surrounded by many bus stops, which provides convenience access to and from this site.

Image 1.2 Surrounding facilities and public transit

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

•

Parcel Configuration

The parcel is approximately square in shape with frontage of 238’ and width of 245’. The lot size is 58,310 S.F. (1.34 acre). It is flat and without environmental threats. It is currently used as a baseball field and there is no building on this site. It is currently zoned as RM-1. •

Pertinent Zoning Regulations

The development site is zoned under RM-1, residential mix-use. The pertinent zoning ordinance is outlined below: o o o o

o o o

Allowed use: single family, two-family, multi-family Maximum height is 38’ Minimum 20% open space for corner lot Minimum 360 SF of lot area is required per dwelling unit for the first 1,440 Sf of lot area, and 480 Sf of lot area per dwelling unit thereafter Lot size 58,310 sf (238’x245’) Minimum side setback is 12’ There’s no mandatory parking requirement

Image 1.3 Zoning map and requirements

Design and Building Program •

Design

The design is comprised of one 4 story high multi-family apartment building facing Fairmount Avenue and 4-story rowhouses facing 46th Street. The apartment building and rowhouses share a courtyard connecting to shared community spaces. On-site parking is located at the south edge of the parcel accessible from 46th Street.

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

Image 2.1 Site plan

Image 2.2 3D mass

Image 2.3 Ground floor plan

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

Affordable Housing Need â&#x20AC;˘

Local need for affordable housing

The Philadelphiaâ&#x20AC;&#x2122;s long waiting list for affordable housing also demonstrates the shortage of affordable housing. According to Philadelphia Citypaper (10/24/2013), 28,076 low-income people are waiting in line for a Philadelphia Housing Authority (PHA) unit; 54,368 want Section 8 vouchers, which subsidize rent in the private market; and 26,382 wait on a third list, for tax-credit subsidized housing. Besides, according to 2012 Census data, nearly 50% of Philadelphia households earn less than $35,000/year. In summary, the shortage of affordable housing and the low affordability of households both call for more affordable housing projects.

To further understand the need of affordable housing in the surrounding neighborhood, we first identified our study area based on census tracts as shown below. These census tracts are around our site and share a basic demographic and geographic similarities. We also think these areas will become our main market target when the affordable housing project is completed.

Image 3.1 Census tracts under study around the site

We looked at the gross rent as a percentage of household income (GRAPI) of Philadelphia County as a whole. Based on CP04_2012 ACS 3-year estimates, during 2007-2009, 46.1% of occupied units paying rent 35% or more of the household income; during 2010-2012, this figure become even bigger, 49.9%. This shows a shortage of affordable housing. To further look at the housing affordability of the surrounding neighborhoods of our site, we first identified the areas which we consider as the potential future market for our project based on census tracts. From DP01_ACS 5-year estimates, the average GRPAI is 47.2%. Some areas, like census tract 93 and 111, the GRPAI is bigger than 60%, which shows a strong desire for affordable housing.

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

Table 3.1 Gross rent level summary Gross rent

Census tract 92

Census tract 93

<$200

216

$300--$499

121

160

$750--$999

173

$200--$299 $500--$749 $1,000--$1,499 >=$1,500 Median

Census tract 103

Census tract 104

Census tract 105

Census tract 106

Census tract 111

194

101

200

117

181

143

163

178

155

277

122

267

180

176

222

129

101

150

698

825

687

505

625

724

443

175

Source: United States Census Bureau, ACS 2012 5-year estimates

Pro Forma The complete pro forma is attached as appendix. Here are some things that need particular attention. â&#x20AC;˘

Rent Level and Unit Type Allocation

This project is intended to provide 100% affordable housing for people with 60% AMI. According to rent limitation of LIHTC housing, the maximum rent of 1-bed unit for 60% AMI tenants is $887/month. The maximum rent for 2-bed and 3-bed units are $1,065/month and $1,230/month. However, the surrounding neighborhood of the site seems have more poorer people. Based on the data from 2012 Census Bureau, the rent of most units are about $500 to $1,000 per month. The median rent ranges from $443 to $724, which shows the low level of rent in this area. Hence, we decided to decrease the rent level of our project to guarantee that more people can afford it. Thus, the rent for 1bed unit is $500/month, the rent for 2-bed and 3-bed unit are $750 and $950 respectively.

Image 4.1 LIHTC rent limits for 2014 Source: Novogradac & Company

By looking at the current units, we found that the majority of units are 3-bed units. The number of 1-bed and 2-bed are about half of that of 3-bed units. This is the result of the demographic features of this area that about 95% people who live here are African

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

Americans. They tend to have large family size. Or people in these places have to live in multi-bed houses with others to spare rents. Considering this need, we will provide more 3-bed units in our project. Table 4.1 Unit type summary

Bedrooms

Census tract 92

Census tract 93

117

159

450

184

3 5 or more

Census tract 104 0

Census tract 105

175

892

243

113

612

376

441

368

Census tract 103

Census tract 106

Census tract 111

114 282

1227

220

141

757

101

401 647

396

890

162

229

104

Source: United States Census Bureau, ACS 2012 5-year estimates

277

About the size of each type of unit, according to the Pennsylvania 2014 QAP Plan, the required unit size for different units are as below: Unit Type

Unit Size (sqft)

2-bed

700-1,100

1-bed 3-bed

550-850

950-1,350

Source: Pennsylvania 2014 QAP Plan

As for our project, we choose to build more efficient housing and provide as more affordable housing as possible for the people on the waiting list, so the size of each type of unit is relatively small. The 1-bed unit is 600 sqft, the 2-bed and 3-bed are 800 sqft and 1,000 sqft respectively. •

Rent Level and Unit Type Allocation

Eligible rehabilitation/new construction basis

Our site is located in one of the “qualified census tract” which could earn the tax credits based on the 130% of the eligible rehabilitation/new construction basis.

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

Image 4.2 Qualified census tracts Source: HUD. GOV http://www.huduser.org/QCT2013/qctmap.html?locate=42101020000

â&#x20AC;˘

Sources & uses accounts Table 4.2 Sources and uses accounts Sources & Uses Accounts SOURCES Permanent Mortgage LIHTC Syndication Other GAP (1) Other Gap (2)

Total Sources

Total

per unit

$6,169,975

$56,091

22%

$20,132,396

$183,022

$800,000

$7,273

$1,480,000

$13,455

70%

5% 3%

$28,582,371

$259,840

100%

Land Acquisition

$1,166,200

$10,602

Hard Costs

$21,079,000

$191,627

74%

Construction Loan Interest

$927,476

$8,432

USES

Soft Costs (net of Dev. Fee) Construction Loan Fees

$2,367,900 $632,370

$21,526 $5,749

8% 2%

46th & Fairmount Avenue Affordable Housing Project Using LIHTC Permanent Loan Fees & Points

$185,099

$1,683

$727

Developer Fee

$2,107,900

$19,163

Total Uses

$28,545,945

$259,509

Syndication Costs

$80,000

7% 100%

QAP Estimation and Discussion Based on the PENNSYLVANIA HOUSING FINANCE AGENCY ALLOCATION PLAN FOR YEAR 2014 LOW INCOME HOUSING TAX CREDIT PROGRAM, we created the matrix below to estimate the points our project can get. The detailed explanation is in the last column of the table. There are 120 points in total and this project can get about 104 points in the end. Table 5.1 QAP estimation matrix Total Points

Criteria

20 a. Areas of Opportunity

1.Underserved Areas A. Community and Economic Impact

16 2

b. Senior Occupancy Development

2.Community Revitalization Plans

B. Development

Points Earned

Explanation

Relatively strong housing market, with several affordable housing projects being built in recent years.

Close porximity to amenities for the senior population. There is one hospital, two health centers within 10 minutes walk from the site. One ALDI supermarket, one CVS, several grocery stores and a dezen of retails for food, cloth, shoes, hair saloon etc within 15 minutes walk from the site. There are also two public parks within 10 minutes walk.

The adjacent Mantua neighborhood is undergoing revitalization (image5-1). It is a Choice Neighborhood project. There is also a bigger revitalization plan undergoing. It's called "revitaliza West Philadelphia's Lower Lancaster Avenue" which includes neighborhoods of Mill Creek, Mantua, Belmont, Sanders Park, etc (image 5-2). Our site is in the revitalization area.

46th & Fairmount Avenue Affordable Housing Project Using LIHTC Characteristics

Smart Site Selection

Energy Conservation

Renewable Energy Systems

Green Building

1.Income and Rent Targeting

C. Resident Population and Services

2.Designated Populations & Supportive Services

Specific to development and effectively addresses anticipated service needs

Sufficient funds to implement the plan of services

As stated before, this site has convenient access to a lot of public amenities. It's flat, cheap and has no building on it, which saves the development cost. It's an urban infill, which fits into the surrounding neighborhood. The building is 10% powered by solar energy system that capture heat. Regenerative hydrogen-oxygen fuel cells are applied as a long-term energy storage device.

The building design abides to green building design principles and is LEED certified. The material selection ensures the protection of occupantsâ&#x20AC;&#x2122; health. The site selection, construction, operation and maintenance of the project follow LEED criteria to reduce the overall impact to the environment. The AMI of the 8 census tracts is $22,326 in 2012, which just equals 60% of the Philadelphia County AMI which is $37,016. Since there are a lot of very poor residents in this area, it's easy to provide 50% of the units to those below 50% of area AMI. Besides, we have lowered the rent level to guarantee the affordability for the very poor people. We will cooperate with surrounding organizations, like the hospital and school to provide help with children and elderly tenants to improve their education and life quality. We'll also provide service to help tenants manage their home and provide assistance when they decide to become owner of the house.

We have a big number of LIHTC Syndication income (70%) from the Bank of America to guarantee the implementation. We also have permanent loan from PNC. Besides, we will apply for other government funds to fill the gap of implementation.

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

Utilizes a service provider/coordinator to implement 3.Accessible Units

4. Large Families

-10

1.Noncompliance

D. Development Process 2.Ability to Proceed

Zoning

Commitment of Funds E. Development Cost Savings G. Other

Total

3 7

120

104

We have a professional team to work closely on site to guarantee the successful implementation of the project. We have 12 accessible units on different floors with the provision of elevators.

The number of 3-bed units occupies nearly half of the total number of unit. We researched on the demographic features of surrounding neighborhood and noticed this large-family need. So we have more 3-bed units. We don't have unresolved IRS Form 8823 noncompliance issues or fail to meet the requirements of the Restrictive Covenant Agreement. The site is appropriately zoned. We don't need to apply for zoning variance and our design completely conforms with the zoning requirements. We have sound funding from different investors and banks. They are enough to guarantee the implementation and management of the project.

The median total development cost of this project is $258 per square foot. Complete and accurate application package.

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

Image 5-1 Mantua Transformation Plan Source: PlanPhilly http://planphilly.com/uploads/media_items/mantua-transformation-plan1.original.pdf

Image 5-2 Revitalization Plan of Lower Lancaster Avenue Source: PlanPhilly http://planphilly.com/articles/2012/07/23/new-plan-revitalize-west-philadelphiaslower-lancaster-avenue

Ownership Structure and Permanent Affordability â&#x20AC;˘

Ownership structure

The investor (Bank of America) will own 99% share of the property and as the owner nominally. Weâ&#x20AC;&#x2122;ll hold the left 1% share. The Bank of America will act as a limited partner who will invest in the property. It will buy the tax credit from us. As an exchange, it will enjoy 99% of the rent flows, 99% of tax credit benefit and 99% of tax shelter.

46th & Fairmount Avenue Affordable Housing Project Using LIHTC

The bank as a limited partner has limited liability. It has no management authority and is liable on debts incurred by the project to the extent of its registered investment. We as the developer, will take charge of the development, management and asset management. We also enjoy the 10% developer fee.

â&#x20AC;˘

Permanent affordability

To maintain permanent affordability, we plan to purchase the property from the investors of LIHTC at the end of year 15. The ground lease provision is get out in the beginning of the development with exit cap rate of 7.5%. The annual ground lease in turn will be $120,000. This is based on the land value with moderate appreciation negotiable with investors. To purchase the ground lease property at the end of year 15, we anticipate to still see a $4,697,000 financial gap. Table 6.1 Gap at year 15 to buy this property Year 15

Cap Rate

Property value at year 15 Sources-Uses

FV of Sources-Uses

FV of 15-year ground lease GAP at year 15

7.50%

$7,492,160

$36,425 $75,726

$2,718,899 $4,697,535

To seal the gap and maintain permanent affordability, we will recapitalize the property as affordable housing by applying for additional public subsidies as new 4% tax credits allocated to the properties following the first 15 years. These credits may be used for rehabilitation or for buying the property from the original developer.

We also see the possibility of converting around 30% of the units to market-rate rental housing at the end of year 15. Converting part of the rental units to ownership structure is also an approach considered to maintain affordability. The property will turn into a mixedincome housing.

As Affordable Housing Project with 9% LIHTC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

C D E F G H I J AFFORDABLE HOUSING PROFORMA w/TAX Credits Page 1: Concept, Assumptions, and Baseline Data with Affordable Rents

Item

Size (sqft)

Unit

Item

Costs

Revenues

Difference

Land Purchase Price

$1,166,200 $4,475,800

600 Concept Plan

Rents &

1-bedroom Market

Market Study

Soft Costs

800 Concept Plan

income

2-bedroom Market

Market Study

Syndication Costs

3 bedroom

1000 Concept Plan

3-bedroom Market

Market Study

Construction Loan Cash-In

$80,000 $0

►Net rentable space(sqft)

93,200

1-bedroom Affordable

$500 60% of AMI

Construction Loan

Common area

10,420 Concept Plan

2-bedroom Affordable

$750 60% of AMI

Construction Loan Fees

$632,370

3-bedroom Affordable

$927,476

Parcel size (sqft) Cost (per sqft)

103,620 30 Concept Plan 58,310

Total Land Cost

$1,166,200

Architecture & Engineering Fees

$1,053,950

$950 60% of AMI

Construction Loan Interest Costs

100%

LIHTC Syndication Proceeds

Other Income

$0.00 Market Study

Mortgage

Rent Inflation Factor

Costs

Legal Fees

5% of Const. Costs

2% Market Study

Permits

$50,000 City Hall $10,000 Estimate

20,132,396 6,169,975

Permanent Loan Points

$185,099 Total

Vacancy

Year 1

2% Market Study

Rates

Year 2 & thereafter

0% Market Study

Expenses

$28,545,945

26,302,371

$2,243,575

Total

per unit

Sources & Uses Accounts SOURCES

$200,000 Research

Pre-leasing

$21,079,000

%Low-income units

$20 Market Study

Soft

Utilities

$100,000 Comparables

Permanent Mortgage

$6,169,975

$56,091

22%

Property Taxes

$100,000 Assessor's Office

LIHTC Syndication

$20,132,396

$183,022

70% 5%

Developer Fee

$2,107,900 10% of Hard Costs

Maintenance

$50,000 Comparables

Other GAP (1)

$1,480,000

$13,455

Contingencies

$1,053,950

Maintenance Reserve

$50,000 Comparables

Other Gap (2)

$800,000

$7,273

►Total Soft Costs

$4,475,800

Insurance

$50,000 Comparables

Total Sources

$28,582,371

$259,840

100%

$65,000 Comparables Land Acquisition

$1,166,200

$10,602

Soft Costs (net of Dev. Fee)

$2,367,900

$21,526

Hard Costs

$21,079,000

$191,627

74%

Construction Loan Fees

$632,370

$5,749

Construction Loan Interest

$927,476

$8,432

Hard

Site Clearance

Costs

Grading Construction Cost (per sqft) ►Construction Cost (total)

5% of Tot.Hard.Costs

$5,000

MEANS

Management

$20,000

MEANS

Other/Contingency

$200

MEANS

►Total Expenses

$20,749,000

Per Space parking Cost

$10,000

►Parking Cost (total)

$300,000

Landscaping

$30,000

►Total Hard Costs

$21,079,000

►Total Development Costs

$26,721,000

►per unit ► as % of rents

Similar Project

Expense Inflation factor Tax Info Land+Hard+Soft

$185,099

$1,683

$19,163 $727

7% 0%

Amount of Personal Property

$330,000 Estimate

Total Uses

$28,545,945

$259,509

100%

Debt-coverage ratio

1.4 Lender

►Personal Property Depreciation

►Point Costs Hard Costs % financed ►Construction Loan Amount Interest rate Term (months) Drawdown Factor ►Construction Interest Fees ►Construction Fees

►Financing Amortization

3 Lender .065051435 = PMT(rate,term,-1)

Annual Passive Loss Limit

$561,912 from page 3

Marginal Tax Rate

$6,169,975

=NOI/(DCR*MC)

$401,366

= Mortgage * MC

Syndication

$185,099

Points * Mortgage

Info

$21,079,000 from above 100% Lender $21,079,000 Hard costs * % financed 8.00% Lender 12 Constr. Schedule 0.55 Lender $927,476 Loan*Rate*Term*DDF 3% Lender $632,370 Constr. Loan * Fees

$25,554,800

$2,107,900 $80,000

Personal Property Life

►Yearly Debt Service

3% Market Study

Developer Fee Syndication Costs

30 Lender

►Supportable Mortgage

45% x-check to IREM

27.50 IRS $929,265 Deprec. Basis/UL

Interest Rate

►Stabilized NOI (year 2)

5.00% Lender

Depreciable Basis

Term

►Mortgage Constant

$4,364

USES

Useful Life (years) ►Annual Depreciation Deduc.

Permanent

Points

$65,000 Comparables $480,000

Concept

Financing

Lending

Mo. Rent

M Page 2: Development Accounts

1 bedroom

Parking spaces

Construction

Source #

2 bedroom

►Total Constructed Space

Land

Source #

Concept

►Tax Credit Basis

7.00 IRS $47,143 Property/UL $6,170 Mortg. Points/Term $1,000,000 Investor 35%

$26,484,065 Dep. Basis + Personal Property

Applicable Credit

9.0% IRS: 9%

w/High-cost Adjustment

1.30

►Annual Credit

$3,098,636 Credit * HCA

Limited Partner Share

99% Deal

Limited Partner Required IRR

12% Deal

Syndication Costs Annual Ground Lease

$80,000 Deal $120,000 Deal

Annual Ground Lease Payment

$0 Deal

Interest on Ground Lease

5% Deal

Years of Tax Credit Pay-in

1 Deal

Permanent Loan Fees & Points

As Affordable Housing Project with 9% LIHTC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54

R Page 3: Operating Accounts Cash Accounts

AB AC AD Page 3: Operating Accounts

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

Year 16

Year 17

Year 18

Year 19

Year 20

Year 21

Year 22

Year 23

Year 24

Year 25

Year 26

Year 27

Year 28

Year 29

Year 30

Gross Scheduled Rent

$1,035,600

$1,056,312

$1,077,438

$1,098,987

$1,120,967

$1,143,386

$1,166,254

$1,189,579

$1,213,370

$1,237,638

$1,262,391

$1,287,638

$1,313,391

$1,339,659

$1,366,452

$1,393,781

$1,421,657

$1,450,090

$1,479,092

$1,508,674

$1,538,847

$1,569,624

$1,601,017

$1,633,037

$1,665,698

$1,699,012

$1,732,992

$1,767,652

$1,803,005

$1,839,065

- Vacancy Adjustment

($20,712)

$1,014,888

$1,056,312

$1,077,438

$1,098,987

$1,120,967

$1,143,386

$1,166,254

$1,189,579

$1,213,370

$1,237,638

$1,262,391

$1,287,638

$1,313,391

$1,339,659

$1,366,452

$1,393,781

$1,421,657

$1,450,090

$1,479,092

$1,508,674

$1,538,847

$1,569,624

$1,601,017

$1,633,037

$1,665,698

$1,699,012

$1,732,992

$1,767,652

$1,803,005

$1,839,065

($480,000)

($494,400)

($509,232)

($524,509)

($540,244)

($556,452)

($573,145)

($590,339)

($608,050)

($626,291)

($645,080)

($664,432)

($684,365)

($704,896)

($726,043)

($747,824)

($770,259)

($793,367)

($817,168)

($841,683)

($866,933)

($892,941)

($919,730)

($947,322)

($975,741)

($1,005,013)

($1,035,164)

($1,066,219) ($1,098,205)

Net Operating Income

$534,888

$561,912

$568,206

$574,478

$580,723

$586,935

$593,109

$599,239

$605,321

$611,347

$617,311

$623,206

$629,026

$634,763

$640,409

$645,957

$651,398

$656,723

$661,924

$666,991

$671,914

$676,683

$681,287

$685,715

$689,956

$693,998

$697,828

$701,433

$704,799

$707,913

- Yearly Debt Service

($401,366)

BTCF (Cash Throw-off)

$133,522

$160,546

$166,841

$173,112

$179,357

$185,569

$191,743

$197,874

$203,955

$209,981

$215,945

$221,840

$227,660

$233,397

$239,043

$244,591

$250,032

$255,357

$260,558

$265,625

$270,548

$275,317

$279,921

$284,350

$288,591

$292,632

$296,462

$300,067

$303,434

$306,548

+ Other Income Effective Gross Income - Expenses - Ground Lease

($1,131,151)

+ Tax Shelter After Tax Cash Flow Taxable Income Accounts Cash Throw-off + Principal Amortization - Depreciation

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

Year 16

Year 17

Year 18

Year 19

Year 20

Year 21

Year 22

Year 23

Year 24

Year 25

Year 26

Year 27

Year 28

Year 29

Year 30

$133,522

$160,546

$166,841

$173,112

$179,357

$185,569

$191,743

$197,874

$203,955

$209,981

$215,945

$221,840

$227,660

$233,397

$239,043

$244,591

$250,032

$255,357

$260,558

$265,625

$270,548

$275,317

$279,921

$284,350

$288,591

$292,632

$296,462

$300,067

$303,434

$306,548

$92,867

$97,510

$102,386

$107,505

$112,880

$118,524

$124,451

$130,673

$137,207

$144,067

$151,271

$158,834

$166,776

$175,115

$183,870

$193,064

$202,717

$212,853

$223,495

$234,670

$246,404

$258,724

$271,660

$285,243

$299,505

$314,481

$330,205

$346,715

$364,051

$382,253

($929,265)

($464,633)

$0 ($6,170)

($6,170)

- Personal Property Depreciation

($47,143)

- Pre-leasing

($10,000)

Taxable Income (Loss) from Adjustments

($766,189)

($724,522)

($713,352)

($701,961)

($690,341)

($678,485)

($666,385)

($606,889)

($594,274)

($581,387)

($568,220)

($554,761)

($540,999)

($526,924)

($512,522)

($497,780)

($482,686)

($467,225)

($451,382)

($435,140)

($418,484)

($401,395)

($383,854)

($365,843)

($347,339)

($328,322)

($308,769)

$175,979

$661,314

$682,631

Tax Due (Shelter)

($268,166)

($253,583)

($249,673)

($245,686)

($241,619)

($237,470)

($233,235)

($212,411)

($207,996)

($203,486)

($198,877)

($194,166)

($189,350)

($184,423)

($179,383)

($174,223)

($168,940)

($163,529)

($157,984)

($152,299)

($146,469)

($140,488)

($134,349)

($128,045)

($121,569)

($114,913)

($108,069)

$61,593

$231,460

$238,921

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

Year 16

Year 17

Year 18

Year 19

Year 20

Year 21

Year 22

Year 23

Year 24

Year 25

Year 26

Year 27

Year 28

Year 29

Year 30

- Finance Amortization

Adjustments to Taxable Income Current Period Taxable Income (Loss)

($766,189)

($724,522)

($713,352)

($701,961)

($690,341)

($678,485)

($666,385)

($606,889)

($594,274)

($581,387)

($568,220)

($554,761)

($540,999)

($526,924)

($512,522)

($497,780)

($482,686)

($467,225)

($451,382)

($435,140)

($418,484)

($401,395)

($383,854)

($365,843)

($347,339)

($328,322)

($308,769)

$175,979

$661,314

$682,631

Annual Passive Loss Limit

$1,000,000

Losses Taken This Year

$766,189

$724,522

$713,352

$701,961

$690,341

$678,485

$666,385

$606,889

$594,274

$581,387

$568,220

$554,761

$540,999

$526,924

$512,522

$497,780

$482,686

$467,225

$451,382

$435,140

$418,484

$401,395

$383,854

$365,843

$347,339

$328,322

$308,769

($175,979)

($661,314)

($682,631)

Losses NOT Taken This Year

Total Carryforward

Page 3A: Key Operating Schedules Mortgage Amortization

Page 3A: Key Operating Schedules 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

Year 16

Year 17

Year 18

Year 19

Year 20

Year 21

Year 22

Year 23

Year 24

Year 25

Year 26

Year 27

Year 28

Year 29

Year 30

Beginning Balance

$6,169,975

$6,077,108

$5,979,597

$5,877,212

$5,769,707

$5,656,826

$5,538,302

$5,413,851

$5,283,178

$5,145,971

$5,001,904

$4,850,633

$4,691,799

$4,525,024

$4,349,909

$4,166,039

$3,972,975

$3,770,258

$3,557,405

$3,333,910

$3,099,240

$2,852,836

$2,594,112

$2,322,452

$2,037,209

$1,737,703

$1,423,223

$1,093,018

$746,304

$382,253

Yearly Debt Service

$401,366

Interest

$308,499

$303,855

$298,980

$293,861

$288,485

$282,841

$276,915

$270,693

$264,159

$257,299

$250,095

$242,532

$234,590

$226,251

$217,495

$208,302

$198,649

$188,513

$177,870

$166,695

$154,962

$142,642

$129,706

$116,123

$101,860

$86,885

$71,161

$54,651

$37,315

$19,113

Principle

$92,867

$97,510

$102,386

$107,505

$112,880

$118,524

$124,451

$130,673

$137,207

$144,067

$151,271

$158,834

$166,776

$175,115

$183,870

$193,064

$202,717

$212,853

$223,495

$234,670

$246,404

$258,724

$271,660

$285,243

$299,505

$314,481

$330,205

$346,715

$364,051

$382,253

$6,077,108

$5,979,597

$5,877,212

$5,769,707

$5,656,826

$5,538,302

$5,413,851

$5,283,178

$5,145,971

$5,001,904

$4,850,633

$4,691,799

$4,525,024

$4,349,909

$4,166,039

$3,972,975

$3,770,258

$3,557,405

$3,333,910

$3,099,240

$2,852,836

$2,594,112

$2,322,452

$2,037,209

$1,737,703

$1,423,223

$1,093,018

$746,304

$382,253

$21,837,738 $20,908,473 $19,979,207

$19,049,942

$18,120,676 $17,191,411

Ending Balance Building Depreciation Beginning Basis

$25,554,800

$24,625,535

$23,696,269

$22,767,004

$16,262,145

$15,332,880

$14,403,615

$13,474,349

$12,545,084

11,615,818

10,686,553

9,757,287

8,828,022

7,898,756

6,969,491

6,040,225

5,110,960

4,181,695

3,252,429

2,323,164

1,393,898

464,633

Current Depreciation Claimed

$929,265

929,265

464,633

Cummulative Depreciation Claimed

$929,265

$1,858,531

$2,787,796

$3,717,062

$4,646,327

$5,575,593

$6,504,858

$7,434,124

$8,363,389

$9,292,655

$10,221,920

$11,151,185

$12,080,451

$13,009,716

$13,938,982

14,868,247

15,797,513

16,726,778

17,656,044

18,585,309

19,514,575

20,443,840

21,373,105

22,302,371

23,231,636

24,160,902

25,090,167

25,554,800

$25,554,800

$24,625,535

23,696,269

22,767,004

21,837,738

20,908,473

19,979,207

19,049,942

18,120,676

17,191,411

16,262,145

15,332,880

14,403,615

13,474,349

12,545,084

11,615,818

10,686,553

9,757,287

8,828,022

7,898,756

6,969,491

6,040,225

5,110,960

4,181,695

3,252,429

2,323,164

1,393,898

464,633

$330,000

$282,857

$235,714

$188,571

$141,429

$94,286

$47,143

Ending Balance Personal Property Depreciation Beginning Basis Current Depreciation Claimed Cummulative Depreciation Claimed Ending Balance

$47,143

$94,286

$141,429

$188,571

$235,714

$282,857

$330,000

$282,857

$235,714

$188,571

$141,429

$94,286

$47,143

$185,099

$178,929

$172,759

$166,589

$160,419

$154,249

$148,079

$141,909

$135,739

$129,569

$123,399

$117,230

$111,060

$104,890

$98,720

$92,550

$86,380

$80,210

$74,040

$67,870

$61,700

$55,530

$49,360

$43,190

$37,020

$30,850

$24,680

$18,510

$12,340

$6,170

Finance Amortization

55 Beginning Basis 56 Current Amortization 57 Cummulative Amortization 58 Ending Balance 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84

$6,170

$12,340

$18,510

$24,680

$30,850

$37,020

$43,190

$49,360

$55,530

$61,700

$67,870

$74,040

$80,210

$86,380

$92,550

$98,720

$104,890

$111,060

$117,230

$123,399

$129,569

$135,739

$141,909

$148,079

$154,249

$160,419

$166,589

$172,759

$178,929

$185,099

$178,929

$172,759

$166,589

$160,419

$154,249

$148,079

$141,909

$135,739

$129,569

$123,399

$117,230

$111,060

$104,890

$98,720

$92,550

$86,380

$80,210

$74,040

$67,870

$61,700

$55,530

$49,360

$43,190

$37,020

$30,850

$24,680

$18,510

$12,340

$6,170

$126,000

$258,300

$397,215

$543,076

$696,230

$857,041

$1,025,893

$1,203,188

$1,389,347

$1,584,814

$1,790,055

$2,005,558

$2,231,836

$2,469,428

$2,718,899

$120,000

Ground Lease Accrual Accrued Ground Lease Ground Lease Due Ground Lease Payment

$120,000

Remaining Applicable Basis

$26,484,065

$24,100,500

$21,716,934

$19,333,368

$16,949,802 $14,566,236 $12,182,670

$9,799,104

$7,415,538

$5,031,972

Applicable Credit

$2,383,566

Annual Credit Taken

$3,098,636

Partner Share of Credit

$3,067,649

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

Year 16

Year 17

Year 18

Year 19

Year 20

Year 21

Year 22

Year 23

Year 24

Year 25

Year 26

Year 27

Year 28

Year 29

Year 30

Yearly Value of LIHTC

$3,067,649

NPV of LIHTC if taken in Year 0

$17,332,903 $251,047

$247,176

$243,229

$239,203

$235,095

$230,902

$210,287

$205,916

$201,451

$196,888

$192,225

$187,456

$182,579

$177,589

$172,481

$167,251

$161,894

$156,404

$150,776

$145,005

$139,083

$133,005

$126,764

$120,353

$113,764

$106,988

($60,977)

($229,145)

($236,532)

$158,941

$165,172

$171,381

$177,563

$183,713

$189,826

$195,895

$201,916

$207,881

$213,786

$219,622

$225,384

$231,063

$236,653

$242,145

$247,532

$252,804

$257,953

$262,969

$267,843

$272,564

$277,122

$281,506

$285,705

$289,706

$293,498

$297,067

$300,399

$303,482

$3,477,637

$3,479,998

$3,482,260

$3,484,416

$3,486,457

$3,488,377

$3,473,831

$3,475,481

$3,476,981

$410,674

$411,847

$412,840

$413,642

$414,242

$414,626

$414,783

$414,697

$414,356

$413,745

$412,847

$411,647

$410,127

$408,271

$406,058

$403,470

$400,486

$236,090

$71,254

$66,951

Unpaid Ground Lease LI Housing Tax Credit

Page 4: Syndication Pricing

Limited Partner Share of Operating Tax Shelter NPV of Operating Tax Shelter in Year 0 Limited Partner Share of Cash Flow NPV of Cash Flow in Year 0

$265,484 $1,569,722 $132,187 $1,229,771

Total Yearly Value to Partnership

$3,465,321

Total NPV of LIHTC, Tax Shelter, Cash Flow

$20,132,396