Maryland Regional Workforce Housing Fund

1. Maryland Regional Workforce Housing Fund Leadership Forum June 7, 2006

2. PRESENTATION AGENDA MARYLAND REGIONAL WORKFORCE HOUSING FUND (“MRWH”) • Enterprise: Background and Expertise • MRWH Fund: Opportunity and Need • MRWH Fund: Investment • MRWH Fund: Investment Process • MRWH Fund: Investment Benefits • MRWH Fund: Management Team • Next Steps • Example of an “Award Winning Community” • Contact Information

3. ENTERPRISE: BACKGROUND AND EXPERIENCE • Chosen by the 9 funders of the Phase I Market Assessment to oversee the creation and implementation of the Fund • Headquartered in Maryland, with extensive investment, development, and lending expertise in the local region • Products and services that address all needs related to affordable housing and community development • capital and funding • tax-credit equity • senior debt • mezzanine debt • grants • programmatic models and expertise • Works closely with local, state and federal elected officials and policymakers

4. ENTERPRISE: BACKGROUND AND EXPERIENCE • One of the leading advocates for policy in support of affordable and workforce housing and community development • Will ensure: • continued community input • deal outreach/sourcing in Fund’s footprint • necessary “tools” for challenging deals • Investing in communities at the rate of approximately $1 billion a year • $6 billion invested in communities over the past 23 years, yielding more than 175,000 affordable homes • Catalyst for LIHTC legislation - the public-private model for affordable housing financing that is responsible for virtually all affordable multifamily housing being created today • Created/presently developing more than 4,500 homeownership and rental residences for individuals and families of diverse income, age and culture

5. 2003, Governor Ehrlich created the Governor’s Commission on Housing Policy to address housing issues shortage of workforce housing need for initiatives to create sustainable communities 2004, Final report supported the creation of an equity Family of Funds workforce housing for people who cannot afford to live in the cities and counties in which they work community revitalization initiatives to address the overwhelming need in Maryland, Washington, D.C. and Northern Virginia Low levels of supply and high levels of demand for new housing affordable to “working families” households earning 80% to 120% of the AMI high project costs faced by developers growing population upward pressure on housing prices and rents lack of innovative financing sources for developers FUND OPPORTUNITY AND NEED

6. Maryland ranks second nationally in commuting times More than one million new Marylanders are expected in the next 25 years From 2000 to 2005: median home price in Maryland increased 102% to $363,125 median household income for four person families increased 17% to $77,938 From 1998 to 2005: MD average weekly earnings increased 4.1% annually (U.S. average - 3.9%) MD average house price increased 23.8% annually (U.S. average - 14.1%) Maryland needs to increase net supply of housing by at least 27,500 units by 2010 to cover shortage in housing units projected Statistics cited from: “Why Housing May Replace Healthcare as Our Region’s Leading Affordability Issue,” Anirban Basu, Sage Policy Group, Inc., March 15, 2006 and the U.S. Census Bureau website, http://www.census.gov/hhes/income/4person.html FUND OPPORTUNITY AND NEED

7. Developments that achieve double bottom line objectives: risk-adjusted market rates-of-return for investors (the first bottom line) measurable job and wealth creation, and community revitalization for community stakeholders (the second bottom line) Fund Size: $100 million Individual Investment: $2 million to $20 million Total Development Cost: $10 million to $50 million Development Type: For-sale and rental housing targeted at working residents Household incomes in the 80%-120% range of AMI single family homes condominiums town homes live/work lofts apartments New construction, rehabilitation, and adaptive reuse THE INVESTMENT

8. Location: Low-moderate and mixed-income communities Urban, suburban, and rural areas Maryland, Washington D.C. and Northern Virginia Structure: Equity, preferred equity, and mezzanine debt Targeted internal rate of return in the mid-teens Preferred distributions to Investors Significant percentage of the “at risk” capital required in qualifying developments Projected term of 3 to 5 years THE INVESTMENT

9. INVESTMENTPROCESS • Investment Sourcing: • Enterprise offices in Baltimore, Columbia and Washington, D.C. • Substantial Developer Relationships • Vast Lender Network • Industry Association Memberships • Investor Referrals • Rigorous Investment Underwriting: • Executive Summary • Economic/Social Impact Analysis • Development Feasibility/Risk Analysis • Market and Demographic Analysis • Key Party Analysis – Creditand Experience • Consistency with Fund Underwriting Guidelines • Conclusions/Recommendations

10. INVESTMENTPROCESS Investment Approval and Performance Monitoring Committee comprised of 6 Enterprise senior executives: • Development Feasibility • Consistency with Fund Mission • Minimum Yield Thresholds • Community Impact • LMI Investment Area • Community Support • Exception Approval and Performance Review Committee comprised of investors holding $10 million or greater: • Compliance with Overall Fund Parameters • Compliance with Investment Parameter Targets • Periodic Reporting and Review

11. INVESTMENT BENEFITS • Economic Benefits • Deliver market rates of return in the mid-teens • Priority return to investors • Diversified portfolio within a well-capitalized fund • Partnerships with experienced real estate underwriters and developers • Social Benefits • Foster vibrant and healthy communities by increasing the jobs/workforce housing balance • Effectuate economically viable developments to address the overwhelming need for workforce housing and bolster community revitalization and stabilization • Encourage the integration of mixed-income and mixed-use neighborhoods • Positive Public Relations • Public recognition of participation in prominent regional investment vehicle • Maximize the use of existing resources and reduce development pressure on less urbanized areas • Significant public-private partnerships • Positive Community Reinvestment Act consideration

12. ENTERPRISE FUND MANAGEMENT TEAM • Charlie Werhane, Vice Chairman and Chief Operations Officer Enterprise Community Investment Capital Raising, Fund Oversight • Chickie Grayson, President Enterprise Homes, Inc. Capital Raising, Development Expertise • Joe Wesolowski, Senior Vice President Enterprise Community Investment Capital Raising, Asset Management, Operations • Christine Madigan, Vice President Enterprise Homes, Inc. Capital Raising, Fund Strategy, Deal Structuring, Oversight • Edie Loughlin, Director Enterprise Community Investment Deal Sourcing, Deal Structuring, Deal Closing

13. NEXT STEPS • Finalize MRWH Fund legal documents • Finalize MRWH Fund marketing materials • Develop investment pipeline • Obtain investor commitments • First close of MRWH Fund • Close of initial workforce housing development investments

14. AWARD WINNING COMMUNITY EXAMPLE WATERVIEW • Developed by a partnership between Enterprise Homes, Inc. and a private, local builder • Located in Middle River, Baltimore County, MD, on a 63 acre site that was a former failed FHA apartment project razed by the County • New urbanist street plan; 175 detached, homeownership units; 100,000 sf. community shopping center, community green space • $48 million Total Development Cost • Equity/Mezzanine: $1 million • Greater than 15% ROE realized to date The Results: • Recognized by Baltimore Magazine as one of the “Best Places To Live” in 2005 • Homebuilders Association of Maryland, Award of Excellence, Project of the Year (2003) • Strong catalyst for redevelopment in the area • Homeownership for the County’s Workforce offering units affordable to those in the 80% - 150% AMI range, with the majority in the 80% - 115% range.

15. THANK YOU Christine Madigan Vice President Enterprise 410-332-7400 cmadigan@enterprisehomes.com Joe Wesolowski Senior Vice President Enterprise 410-772-2512 jwesolowski@enterprisecommunity.com