Community Development Financial Institution Loan Fund Credit Union

2. HOPE Overview • Community Development Financial Institution • Loan Fund • Credit Union • Community Development Intermediary • Policy Center • Started in 1994 • 120,000 individuals assisted • $1.6 billion in financing -Arkansas, Louisiana, Mississippi and Tennessee

3. Program Impact Summary • Commercial Lending • 67% of loans made to companies located in economically distressed areas • Nearly half (47%) of all loans were made to women or minority owned businesses • Mortgage Lending • 91% of the mortgages closed were made to borrowers who are minorities, women, low-income or located in an economically distressed community • 63% of mortgages were made to borrowers with incomes < 80% of the state AMI • 71% of mortgages went to ethnic minority owners • 80% of mortgages were for first-time home owners • Consumer Lending • 59% of direct loans were payday alternative or credit builder loans • 56% of direct lending occurred in economically distressed communities

4. RAD Development • Local HA owns the current property and units • 85 Unit Rehab built in 1960 • Total Units owned by HA is 150 • Partnership with a for-profit development group • HA will become 51% GP in new LLC • HA will manage the property after rehab • Regional HA will provide the vouchers

5. Development Budget • Sources • First Mortgage $ 900,000 • Housing Tax Credits $ 6,000,000 • HA soft loan $ 850,000 • HOME funds $ 750,000 • FHLB AHP Grant $ 500,000 • Total Sources $ 9,000,000

6. Total Uses • Land $ 166,500 • Building Acquisition $ 1,523,500 • Construction Hard Cost $ 4,600,000 • Construction Insurance $ 230,000 • Construction soft costs $ 130,000 • Architect/Design $ 260,000 • Construction Interest $ 130,000 • Construction loan fee $ 60,000 • Legal Fees (owner) $ 190,000

7. Total Uses • Operating Reserves $ 250,000 • HTC Reservation and fees $ 280,000 • Other Legal $ 80,000 • Other Contingency $ 60,000 • Accounting $ 20,000 • Marketing/lease up $ 20,000 • Developer’s Fee $ 1,000,000 • Total $ 9,000,000

8. Construction Soft Costs • Bond $ 46,000 • Survey $ 15,000 • Market Study $ 20,000 • Appraisal $ 5,000 • Engineering $ 15,000 • Relocation $ 15,000 • Misc. Professional $ 10,000

9. Cash Flow Income • Rental Revenue $ 460,000 • Misc. Revenue $ 15,000 • Vacancy $ (24,000) • Rental Revenue $ 451,000

10. Cash Flow Expenses • Salaries $ 95,000 • Management Fee $ 27,500 • Office Supplies $ 1,000 • Professional Fees $ 10,000 • Telephone $ 2,000 • Administrative Expenses $ 5,000 • Repairs and Maintenance $ 100,000 • Utilities $ 6,500

11. Cash Flow Expenses • Taxes $ 23,000 • Insurance $ 49,000 • Total $ 319,000 • Income from Operations $ 132,000 • Debt Service $ 70,000 • Excess Cash $ 62,000 • Debt Service Coverage 1.8

12. Things to note and pay attention to • HA’s own land and property • HA’s typically have good management already in place • Through RAD, HA’s have access to vouchers • All of these are valuable to HTC developers • Obviously can be done as straight rehab without HTCs also, with or without an outside developer.

13. What Hope Can Offer • Permanent Financing • Relatively small, under $2 million, perm loans • 30 year amortization/15 year balloon notes • Fixed rates for 15 year term • Relatively easy application and closing process