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FLORIDA HOUSING FINANCE CORPORATION

Credit Underwriting Report

Logan Heights Apartments

Multifamily Mortgage Revenue Bonds and 4% Non‐Competitive Housing Credits Program

2015‐109B

Section A: Report Summary

Section B: MMRB Closing Special and General Conditions and Housing Credit Allocation Recommendation and Contingencies

Section C: Supporting Information and Schedules

Prepared by

AmeriNat®

Final Report

November 22, 2016

EXHIBIT B of 35

MMRB AND HC CREDIT UNDERWRITING REPORT AMERINAT

November 22, 2016

Logan Heights Apartments

TABLE OF CONTENTS

Section A

Report Summary Page Recommendation A1‐A7 Overview A8‐A11 Uses of Funds A12‐A15 Operating Pro Forma A16‐A18

Section B

MMRB Closing Special and General Conditions B1‐B5 HC Allocation Recommendation and Contingencies B6

Section C

Supporting Information and Schedules Additional Development & Third Party Information C1‐C7 Borrower Information C8‐C12 Guarantor Information C13‐C14 Syndicator Information C15 General Contractor Information C16‐C17 Property Management Information C18

Exhibits

15 Year Pro Forma 1 Description of Features & Amenity Characteristics 2 1‐2 Housing Credit Allocation Calculation 3 1‐2 Completeness and Issues Checklist 4 1‐2

EXHIBIT B of 35


November 22, 2016

Section A

Report Summary

EXHIBIT B of 35


LOGAN HEIGHTS APARTMENTS PAGE A‐1 November 22, 2016

Recommendation AmeriNat® recommends the issuance of Multifamily Mortgage Revenue Bonds (“MMRB”) in the amount of $23,500,000 and a $1,340,851 annual allocation of 4% Housing Credits (“HC”) to Logan Heights Preservation, L.P. (“Applicant”) for the acquisition, rehabilitation, and permanent phase financing of Logan Heights Apartments (the proposed “Development”).

Address: City: Zip Code:

County: County Size:

Development Category: Development Type:

Construction Type:

Demographic Commitment: Elderly: Homeless: ELI: Units @ AMI

Farmworker or Commercial Fish Worker: Family: Link: Units

Conventional wood framing with painted stucco exterior and pitched, asphalt shingles

1000 Logan Heights Circle Sanford 32773

Seminole Medium

Acquisition and

Rehabilitation Garden Apartments

DEVELOPMENT & SET‐ASIDESDevelopment Name: Logan Heights Apartments

Program Numbers: 2015‐109B

X

Gross HC

Rent

$611 $175,968$47 $611 $611 $608

Appraiser

Rents CU Rents

Annual Rental

Income

1.0 1.0 24 687 60% $658

Low

HOME

Rents

High

HOME

Rents

Utility

Allow

RD/HUD

Cont

Rents

Net HC

Rent

Applicant

Rents

Bed

Rooms

Bath

Rooms Units

Square

Feet AMI%

$728 $728 $728 $728 $524,160

$439,920

2.0 2.0 60 904 60% $790 $62

$47 $611 $611 $608 $6111.0 1.0 60 691 60% $658

3.0 2.0 96 1160 60% $912

2.0 2.0 120 924 60% $790 $723 $728 $1,048,320$62 $728 $728

$833 $959,616$79 $833 $833 $828

360 334,428 $3,147,984

Rental Assistance: __0__

Buildings: Residential ‐ Non‐Residential ‐

Parking: Parking Spaces ‐ Accessible Spaces ‐

15 1

745 23

Set Asides:

Program % of Units # of Units % AMI Term (Years)

MMRB 100.0% 360 60% 30

Housing Credits 100.0% 360 60% 30

Absorption Rate: units per month for months.

Occupancy Rate at Stabilization: Physical Occupancy Economic Occupancy

Occupancy Comments

360 1

98% 97%

According to market study, average weighted

occupancy is 97.9% in the CMA.

DDA?: QCT?:

Site Acreage: Density: Flood Zone Designation:

Zoning: Flood Insurance Required?:Multi‐Family Residential 3 ‐ Up to 20 units per acre No

No No

22.20 16.22 X

EXHIBIT B of 35



Applicant/Borrower:

General Partner 1:

Limited Partner 1:

Guarantor(s):

Developer:

Principal 1

Principal 2

Principal 3

Principal 4

Principal 5

General Contractor 1:

Management Company:

Syndicator:

Bond Issuer:

Architect:

Market Study Provider:

Appraiser:

DEVELOPMENT TEAM

Logan Heights Preservation, L.P. % Ownership

Lincoln Avenue Capital LLC 0.01000%

Boston Financial Investment Management, LP, or its assigns 99.9900%

Eli M. Bronfman

Jonathan A. Gruskin

Logan Heights Preservation, L.P.

Lincoln Avenue Capital, LLC

Matthew Bronfman

JSB Family Capital, LLC

Jeremy S. Bronfman

Lincoln Avenue Capital LLC

The Matthew Bronfman Family EMBT

JSB Family Capital, LLC

Jeremy S. Bronfman

Eli M. Bronfman

Jonathan A. Gruskin

WRH Realty Services, Inc.

Boston Financial Investment Management, LP

Florida Housing Finance Corporation

Pyramid ETC Companies, LLC

708 Studios, LLC

Novogradac & Company LLP

Novogradac & Company LLP

PERMANENT FINANCING INFORMATION1st Source 2nd Source 3rd Source 4th Source 5th Source Other

Lender/Grantor Pillar

Lien Position 1

Underwritten Interest

Rate4.50%

Amount $24,690,000

Loan Term 16

All In Interest Rate 4.50%

Market Rate/Market

Financing LTV50.70%

Amortization 35

Loan to Cost 55%

Restricted Market

Financing LTV85.14%

Operating/Deficit

Service Reserve$736,707

Debt Service Coverage 1.15

Period of Operating

Expenses/Deficit

Reserve in Months

3

EXHIBIT B of 35



Land Value

As‐Is Value (Rehabil itation)

Deferred Developer Fee $6,307,083

$2,476,923

$28,300,000

Market Rent/Market Financing Stabil ized Value $48,700,000

Projected Net Operating Income (NOI) ‐ 15 Year $1,869,374

Year 15 Pro Forma Income Escalation Rate 2%

Year 15 Pro Forma Expense Escalation Rate 3%

Rent Restricted Market Financing Stablized Value $29,000,000

Projected Net Operating Income (NOI) ‐ Year 1 $1,612,661

Bond Structure Publicly offered, cash collateralized, short‐term bond

Housing Credit Syndication Price $1.0199804907

Housing Credit Annual Allocation $1,340,851

CONSTRUCTION/PERMANENT SOURCES:

Source Lender Construction Permanent Perm Loan/Unit

MMRB ‐ Second Mortgage FHFC ‐ MMRB $23,500,000 $0 $0

First Mortgage Pillar $1,190,000 $24,690,000 $68,583

HC Equity BFIM $10,988,643 $12,630,624 $35,085

GP Capital Contribution General Partner $100 $100 $0

Deferred Developer Fee Developer $6,307,083 $6,307,083 $17,520

Borrower Equity Applicant $1,326,083 $932,261 $2,590

Deferred Operating

Deficit Reserve Applicant $736,707 $0 $0

Deferred Expenses Applicant $511,452 $0 $0

TOTAL $44,560,068 $44,560,068 $123,778

EXHIBIT B of 35



Changes from the Application:

COMPARISON CRITERIA YES NO

Does the level of experience of the current team equal or exceed that of the team described in the Application?

X

Are all funding sources the same as shown in the Application? X

Are all local government recommendations/contributions still in place at the level described in the Application?

X

Is the Development feasible with all amenities/features listed in the Application? X

Do the site plans/architectural drawings account for all amenities/features listed in the Application?

1

Does the Applicant have site control at or above the level indicated in the Application? X

Does the Applicant have adequate zoning as indicated in the Application? X

Has the Development been evaluated for feasibility using the total length of set‐aside committed to in the Application?

X

Have the Development costs remained equal to or less than those listed in the Application?

2

Is the Development feasible using the set‐asides committed to in the Application? X

If the Development has committed to serve a special target group (e.g. elderly, large family, etc.), do the development and operating plans contain specific provisions for implementation?

X

HOME ONLY: If points were given for match funds, is the match percentage the same as or greater than that indicated in the Application?

N/A

HC ONLY: Is the rate of syndication the same as or greater than that shown in the Application?

X

Is the Development in all other material respects the same as presented in the Application?

X

The following are explanations of each item checked "No" in the table above:

1. AmeriNat engaged Partner Engineering and Science, Inc. (“Partner”) to perform a Plan and Cost Review (“PCR”). Partner summarized their findings and conclusions in a report dated November 7, 2016. Partner verified the features and amenities selected in the Application were accounted for in the plans and specifications with the following exceptions:

Programmable thermostat in each unit;

Energy Star rated windows in each unit;

Low‐flow water fixtures in bathrooms – WaterSense labled products or the following specifications:

o Toilets: 1.28 gallons/flush or less o Faucets: 1.5 gallons/minute or less o Showerheads: 2.0 gallons/minute or less;

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Energy Star qualified refrigerators, dishwashers and washing machines are provided by the Applicant;

Minimum SEER of 14 for unit air conditioners; and,

30 Year expected life roofing on each building.

The provided drawings did not include the following existing amenities:

Community center or clubhouse; and,

Swimming pool.

Partner recommends that the Architect of Record evaluate the existing features and amenities to determine any necessary updates, repairs, and deficiencies and provide updated drawings for review, if necessary.

2. Total Development Costs have increased by $715,211 from $43,844,857 to $44,560,068 since the time of application due to increases in construction costs and financial costs.

Does the Development Team have any FHFC Financed Developments on the Past Due/Non‐Compliance Report? According to the FHFC Asset Management Noncompliance Report dated November 1, 2016, no noncompliance issues exist for the Development Team. According to the FHFC Past Due Report dated November 1, 2016, no past due issues exist for the Development Team. This recommendation is subject to satisfactory resolution, as determined by Florida Housing, of any outstanding past due items or non‐compliance issues applicable to the Development Team prior to closing and the issuance of the annual HC allocation recommended herein. Strengths:

1. Per the Market Study completed by Novogradac & Company LLP (“Novogradac”) dated October 4, 2016, strong demand exists for the Development in the Primary Market Area (“PMA”) as evidenced by a Capture Rate of 9.35% and weighted average occupancy of 97.9%.

2. The Market Study concludes that the Development should benefit from the rental rate advantage it will have over market rents. Novogradac’s projected market rents are generally 144% to 153% greater than the 2016 maximum restricted rents at the 60% AMI level.

Other Considerations:

1. The Development is an existing development that is encumbered by an Extended Low‐Income Housing Agreement (“ELIHA”), effective as of June 7, 2001, that sets aside 100% of the units to residents earning 60% or less of the Area Median Income (“AMI”). In accordance with the terms of the ELIHA, Vestcor Fund XI, Ltd. (the “Owner”) submitted a request dated September 10, 2015, to FHFC to find a qualified contract to purchase the Development by an entity that will continue to operate the Development as affordable housing within an one year period. If FHFC is unable to present the Owner with a qualified contract, the ELIHA will be terminated and the set‐aside restrictions will be rescinded from the Development.

EXHIBIT B of 35



Issues and Concerns:

1. The principals of the Applicant present limited development and ownership experience. Of the principals identified in the Applicant, only Mr. Jonathan Gruskin has any experience in the acquisition and development of affordable multifamily communities, which was acquired through his former employment.

Mitigating Factor: The Applicant is partnering with Pyramid ETC Companies, LLC, a General Contractor with vast experience, and WRH Realty Services, Inc., a property management company with vast experience.

2. AmeriNat concludes the Developer will likely be required to permanently defer $6,307,083, or 100% of developer fee, which is an amount greater than the cumulative cash flow over the first fifteen years of operations. According to an operating pro forma analysis prepared by AmeriNat, cash flow of $5,188,542 is available to pay the deferred developer fee leaving $1,118,541 unpaid. If the Development is unable to repay the deferred developer fee within the tax credit compliance period, the partnership may be subject to tax credit recapture.

Mitigating Factor: According to the equity proposal dated November 3, 2016 from Boston Financial Investment Management, LP (“BFIM”) and the Applicant, any reduction in basis will first result in reductions in any future capital contributions and then, if necessary, the Lincoln Avenue Capital, LLC shall be obligated to fund the adjustments to the capital contributions resulting from a reduction in the tax credit amount. Therefore, any risk associated with any tax credit recapture is assumed by the Development team, which presents adequate financial capacity to assume this risk.

3. AmeriNat estimates the Applicant will need to contribute $1,326,083 of Borrower Equity during the construction phase and permanently contribute $932,261 of Borrower Equity.

Mitigating Factor: AmeriNat received bank statements from the Development Team that confirms the cash is available to the Applicant and the equity will be required to be funded at closing.

Waiver Requests:

None

Special Conditions:

1. Receipt of a final satisfactory PCR in form and function that is acceptable to AmeriNat is a condition precedent to the MMRB closing. The report will need to conclude that all of the features and amenities committed by the Applicant in its application to Florida Housing are included in the plans and specifications.

Additional Information:

None

EXHIBIT B of 35



Recommendation: AmeriNat recommends the issuance of MMRB in the amount of $23,500,000 and a $1,340,851 annual allocation of 4% Housing Credits (“HC”) to the Applicant for the acquisition, rehabilitation, and permanent phase financing of Logan Heights Apartments.

These recommendations are based upon the assumptions detailed in the Report Summary (Section A), and Supporting Information and Schedules (Section C). In addition, these recommendations are subject to the MMRB Special and General Conditions Recommendation (Section B). This recommendation is only valid for six months from the date of the report. The reader is cautioned to refer to these sections for complete information. Prepared by: Reviewed by:

Kyle Kuenn Mark Fredericks Senior Credit Underwriter Senior Vice President Multifamily Services

EXHIBIT B of 35



Overview Construction Financing Sources:

Source Lender Applicant's TotalApplicant's

Revised Total

Underwriter's

TotalInterest Rate

Debt Service

During

Construction

MMRB ‐ Second

Mortgage

FHFC ‐

MMRB $23,500,000 $23,500,000 $23,500,000 1.10% $387,756

First Mortgage Pil lar $1,880,000 $1,880,000 $1,190,000 4.50% $0

HC Equity BFIM $10,988,643 $11,286,769 $10,988,643

GP Capital Contribution

General

Partner $100 $100 $100

Deferred Developer Fee Developer $5,811,429 $5,811,429 $6,307,083

Borrower Equity Applicant $1,664,685 $1,366,560 $1,326,083

Deferred Operating

Deficit Reserve Applicant $0 $0 $736,707

Deferred Expenses Applicant $0 $0 $511,452

$43,844,857 $43,844,858 $44,560,068 $387,756Total :

Proposed MMRB:

FHFC will issue a $23,500,000 allocation of tax‐exempt MMRB, which will be underwritten and marketed by RBC Capital Markets, LLC (“RBC”) via public offering. Proceeds from the sale of the MMRB will be held by a trustee and released to the Applicant for the acquisition and rehabilitation of the Development. The release of the MMRB proceeds to fund the acquisition and rehabilitation of the Development will be restricted, contingent upon a like sum of first mortgage loan funds being sent to the Trustee by Pillar Multifamily, LLC (“Pillar”) and placed in a collateral fund. Therefore, the principal and interest of the MMRB will be secured by a cash source at all times until they are fully repaid. The Applicant will pay a fixed rate of interest on the MMRB, which is estimated to be 1.10%. The Bonds will require monthly interest only payments until earlier of the maturity date, which is 18 months from the date of closing, or the date of redemption.

Proposed Permanent First Mortgage Loan:

The Applicant provided a loan proposal letter dated November 3, 2016 prepared and executed by Pillar that illustrates the terms and conditions of a first mortgage loan under the Fannie Mae DUS® First Mortgage Lien program in an amount up to $25,380,000 (“First Mortgage”). However, AmeriNat estimates the First Mortgage loan will be in the amount of $24,690,000 in order to meet a minimum debt service coverage requirement of 1.15x as illustrated in the loan proposal letter. The First Mortgage will be for a term of 16 years and amortize over a period of 35 years. According to the proposal letter the first two years shall require monthly interest‐only payments based upon a fixed interest rate equal to the yield of the 10‐Year Treasury, plus a spread of 2.10%, the rate in the proposal letter was 3.93%. AmeriNat estimates an “all‐in” interest rate equal to 4.50% based upon the yield of the 10‐Year Treasury, as of the date of this recommendation, the credit spread, and a 25 bps underwriting cushion. The First Mortgage is subject to a yield maintenance prepayment penalty for 15 years, with 1% premium thereafter, with the last 90 days of the term open to prepayment without penalty. It is anticipated that the property will

EXHIBIT B of 35



maintain stabilized operations throughout the rehabilitation period, as the Development is a tenant in place rehab and interest‐only payments for the First Mortgage will be required during this phase, which will be paid from rental income derived from the operations of the Development.

Additional Construction Sources of Funds:

According to a syndication Letter of Intent (“LOI”) dated September 27, 2016, and last revised November 3, 2016, between Boston Financial Investment Management, LP (“BFIM”) and the Applicant, BFIM will purchase a 99.99% limited member interest in the Applicant at loan closing in return for a proportionate share of the total HC allocation estimated to be $12,630,624. The HC allocation will be syndicated at a rate of $1.0199804907 for each $1.00 of tax credits delivered. A total of $4,420,718 (approximately 34.36% of total equity available) is to be funded at construction loan closing. Total equity installments of $10,988,643 will be available during the construction phase prior to construction completion.

GP Capital Contribution:

The General Partner shall make a capital contribution of $100 at partnership closing.

Deferred Developer Fee:

The Applicant will be required to defer $6,307,083 or 100% of the total developer fee during the construction phase.

Borrower Equity:

The Applicant will be required to contribute $1,326,083 during the construction phase. AmeriNat received bank statements from the Development Team that confirms the cash is available to the Applicant and the equity will be required to be funded at closing.

Deferred Operating Deficit Reserve:

An Operating Deficit Reserve (“ODR”) shall be created based upon the BFIM LOI which requires a minimum of 3 months of operating expenses, reserve payments, and required debt service to be held in a partnership account. The LOI states the escrow is to be funded out of the proceeds from the 6th Capital Contribution, which shall be funded after construction completion and at the latest of 100% initial qualified occupancy, submission of 8609 applications, final closing, tax credit determination or submission of final cost certification, or April 1, 2018.

Deferred Expenses:

AmeriNat has identified the following other expenses totaling $511,452 that will be funded after construction completion but prior to, or in conjunction with, the MMRB redemption and permanent phase financing: FHFC HC Compliance Fee ($199,293), MMRB Interest ($150,794), Short Term MMRB Redemption Fee ($72,850), Accounting Fees for cost certification ($10,000), and various other remaining costs ($78,489).

EXHIBIT B of 35



Permanent Financing Sources:

Source Lender Applicant's TotalApplicant's

Revised Total

Underwriter's

TotalInterest Rate

Amortization

Years

Term

Years

Annual

Debt Service

First Mortgage Pil lar $25,380,000 $25,380,000 $24,690,000 4.50% 35 16 $1,402,165

HC Equity BFIM $12,630,624 $12,653,329 $12,630,624

GP Capital Contribution

General

Partner $100 $100 $100

Deferred Developer Fee Developer $5,834,133 $5,811,429 $6,307,083

Borrower Equity Applicant $0 $0 $932,261

$43,844,857 $43,844,858 $44,560,068 $1,402,165Total :

Proposed First Mortgage Loan:

The Applicant provided a loan proposal letter dated November 3, 2016 prepared and executed by Pillar that illustrates the terms and conditions of a first mortgage loan under the Fannie Mae DUS® First Mortgage Lien program in an amount up to $25,380,000 (“First Mortgage”). However, AmeriNat estimates the First Mortgage loan will be in the amount of $24,690,000 in order to meet a minimum debt service coverage requirement of 1.15x as illustrated in the loan proposal letter. The First Mortgage will be for a term of 16 years and amortize over a period of 35 years. According to the proposal letter, following a two year interest only period, the Borrower shall make monthly payments of principal and interest calculated based upon a fixed interest rate equal to the yield of the 10‐Year Treasury, plus a spread of 2.10%, the rate in the proposal letter was 3.93%. AmeriNat estimates an “all‐in” interest rate equal to 4.50% based upon the yield of the 10‐Year Treasury, as of the date of this recommendation, the credit spread, and a 25 bps for an underwriting cushion. The First Mortgage is subject to a yield maintenance prepayment penalty for 15 years, with 1% premium thereafter, with the last 90 days of the term open to prepayment without penalty. Receipt of a firm commitment for the Fannie Mae DUS® First Mortgage Lien loan is a condition precedent to the MMRB closing.

Additional Permanent Sources of Funds:

According to a syndication LOI dated September 27, 2016, and last revised November 3, 2016, between BFIM and the Applicant, BFIM will purchase a 99.99% limited member interest in the Applicant at loan closing in return for a proportionate share of the total HC allocation they estimate to be $12,384,440. The HC allocation will be syndicated at a rate of $1.0199804907 for each $1.00 of tax credits delivered. HC equity contribution to be paid as follows:

Capital Contributions AmountPercent of

Total Due upon

1st Installment $4,420,718 35.00% Later of Admiss ion or construction commencment

2nd Installment $2,273,512 18.00% Later of 25% construction completion or 4/1/17

3rd Installment $2,652,431 21.00% Later of 50% construction completion or 7/1/17

4th Installment $1,136,757 9.00% Later of 75% construction completion or 10/1/17

5th Installment $505,225 4.00% Later of 98% construction completion or 1/1/18

6th Installment $1,010,450 8.00%

Latest of 100% ini tia l qual i fied occupancy, submiss ion of 8609

appl ications , fina l clos ing, tax credit determination or

submiss ion of fina l cost certi fi cation.

7th Installment $631,531 5.00% Later of stabi l i zation, receipt of 8609s or 10/1/18

Total: $12,630,624 100%

EXHIBIT B of 35



Annual Credits Per Syndication Agreement $1,238,444

Total Credits Per Syndication Agreement $12,384,440

Calculated HC Rate: $1.0199804907

Limited Partner Ownership Percentage 99.99%

Proceeds During Construction $10,988,643

GP Capital Contribution:

The General Partner shall make a capital contribution of $100 at partnership closing.

Deferred Developer Fee:

The Developer will be required to permanently defer $6,307,083 or 100% in Developer Fee after stabilization.

Borrower Equity:

Following construction completion, a portion of the HC, will be used to reduce the Borrower’s equity from $1,326,083 to $932,261, which the is the estimated amount of equity the Applicant will need to permanently contribute to the permanent financing. AmeriNat received bank statements from the Development Team that confirms the cash is available to the Applicant.

EXHIBIT B of 35



Uses of Funds

Applicant CostsRevised

Applicant Costs

Underwriters

Total Costs ‐ CURCost Per Unit

HC Ineligible

Costs ‐ CUR

Demolition $0 $0 $126,000 $350 $0

Rehab of Existing Common Areas $0 $0 $194,490 $540 $0

Rehab of Existing Rental Units $4,415,788 $4,415,788 $5,868,748 $16,302 $0

Site Work $1,773,450 $1,773,450 $0 $0 $0

General Conditions $0 $371,354 $371,354 $1,032 $0

Overhead $0 $123,784 $123,784 $344 $0

Profit $866,492 $371,354 $371,354 $1,032 $0

Total Construction Contract/Costs $7,055,730 $7,055,730 $7,055,730 $19,599 $0

Hard Cost Contingency $705,573 $705,573 $705,573 $1,960 $0

Other: P&P Bond not in GC contract $70,557 $70,557 $70,557 $196 $0

$7,831,860 $7,831,860 $7,831,860 $21,755 $0

CONSTRUCTION COSTS:

Total Construction Costs: Notes to Actual Construction Costs:

1. An executed Standard Form of Agreement Between Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price in the amount of $7,055,730 (the “Construction Contract”) dated October 20, 2016 was provided between the Applicant and Pyramid ETC Companies, LLC (“General Contractor”). The Construction Contract contains a production schedule that indicates all work will be completed within 365 days with the General Contractor paying liquidated damages equal to $1,500 per day as compensation until the date substantial completion is achieved. The Construction Contract allows for retainage of ten percent (10%) to be withheld from the General Contractor’s application for payment until the Development is complete, which satisfies FHFC retainage requirements from the Rule. Retainage will not be released until successful completion of construction and issuance of all certificates of occupancy.

2. A Plan and Cost Review (“PCR”) was engaged by AmeriNat and performed by Partner Engineering and Science, Inc. (“Partner”). Partner summarized their review of the schedule of values in a revised PCR dated November 7, 2016. The review concludes that the construction budget is within an acceptable range for the scope of work and the individual line items appear appropriate. With a projected unit cost of $19,599 per unit, it is Partner’s opinion that the cost is within an acceptable range.

3. A 10% hard cost contingency is supported by the PCR review and within the limits of the Rule.

4. General Contractor’s Fee (consisting of general conditions, overhead, and profit) is based upon the schedule of values attached to the Construction Contract and does not exceed 14.00% of allowable hard costs as allowed by the Rule. The GC fee stated herein is for credit underwriting purposes only, and the final GC fee will be determined pursuant to the final cost certification process as per Rule Chapter 67‐21.

5. The General Contractor will secure a Payment and Performance Bond (“P&P Bond”) to secure the Construction Contract. The cost associated to obtain the P&P Bond is not included in the Construction Contract’s schedule of values.

EXHIBIT B of 35



GENERAL DEVELOPMENT COSTS: Applicant CostsRevised

Applicant Costs

Underwriters


HC Ineligible

Costs ‐ CUR

Accounting Fees $10,000 $10,000 $10,000 $28 $0

Appraisal $4,350 $4,350 $4,350 $12 $0

Architect's Fee ‐ Site/Building Design $33,000 $33,000 $33,043 $92 $0

Architect's Fee ‐ Supervision $0 $0 $7,000 $19 $0

Building Permits $100,000 $100,000 $100,000 $278 $0

Builder's Risk Insurance $30,000 $30,000 $30,000 $83 $0

Capital Needs Assessment/Rehabilitation $6,500 $3,500 $3,500 $10 $0

Engineering Fees $3,500 $0 $0 $0 $0

Environmental Report $5,000 $5,000 $5,000 $14 $0

FHFC Administrative Fees $112,093 $112,093 $120,677 $335 $120,677

FHFC Application Fee $4,000 $4,000 $3,000 $8 $3,000

FHFC Credit Underwriting Fee $18,131 $18,131 $18,131 $50 $18,131

FHFC HC Compliance Fee (HC) $5,380 $5,381 $199,293 $554 $199,293

Lender Inspection Fees / Const Admin $36,200 $36,200 $40,280 $112 $0

Insurance $17,500 $17,500 $17,500 $49 $0

Legal Fees $80,000 $80,000 $80,000 $222 $80,000

Market Study $3,150 $3,150 $3,150 $9 $3,150

Plan and Cost Review Analysis $0 $6,500 $6,500 $18 $0

Property Taxes $85,000 $85,000 $85,000 $236 $0

Survey $5,000 $5,000 $5,000 $14 $0

Tenant Relocation Costs $50,000 $50,000 $25,000 $69 $0

Title Insurance and Recording Fees $30,000 $30,000 $30,000 $83 $30,000

Soft Cost Contingency $85,000 $85,000 $41,336 $115 $0

Other: Credit Reporting Fee $0 $0 $300 $1 $0

$723,804 $723,805 $868,060 $2,411 $454,251Total General Development Costs: Notes to the General Development Costs:

1. AmeriNat reflects actual costs for the appraisal, market study, capital needs assessment and plan and cost review analysis.

2. AmeriNat reflects the costs associated with the Architect’s fees for preparation of the construction design documents as stated in an executed AIA B101 Agreement between Owner and Architect dated September 23, 2016 between the Applicant and 708 Studios, LLC which was reviewed by the Underwriter.

3. The Administrative Fee is based upon a fee equal to 9% of the annual HC allocation recommendation made herein.

4. The FHFC Credit Underwriting Fee includes the Primary Program Fee for MMRB ($13,970), and the Multiple Program Fee for HC ($4,161).

5. Lender Inspection Fees/Construction Admin consists of fees associated with lender inspections, estimated fees for monthly inspections by construction consultants associated with the development.

6. A soft cost contingency of 5% has been underwritten, which is consistent with underwriting standards and may be utilized by the Applicant in the event soft costs exceed these estimates as permitted by the Rule.

7. The remaining general development costs appear reasonable.

EXHIBIT B of 35




Applicant Costs

Underwriters


HC Ineligible

Costs ‐ CUR

Construction Loan Origination Fee $88,125 $88,125 $0 $0 $0

Construction Loan Interest $282,000 $0 $0 $0 $0

Permanent Loan Application Fee $0 $0 $15,000 $42 $15,000

Permanent Loan Origination Fee $176,250 $176,250 $190,350 $529 $190,350

Permanent Loan Closing Costs $55,000 $55,000 $55,000 $153 $55,000

FHFC Bond Underwriting Fee $0 $0 $132,975 $369 $0

FHFC Bond Subsidy Layering Review $4,018 $4,018 $0 $0 $0

FHFC Bond Interest $0 $282,000 $387,756 $1,077 $0

Reserves ‐ Operating Deficit $736,989 $736,989 $736,707 $2,046 $736,707

TEFRA Fee $0 $0 $1,000 $3 $0

Other: Short Term MMRB Redemption Fee $0 $0 $72,850 $202 $0

Other: FHFC Cost of Issuance $189,765 $189,765 $270,077 $750 $0

Other: Capital ized Issuer Fee $0 $0 $84,600 $235 $0

Other: Capital ized Trustee Fee $0 $0 $6,750 $19 $0

$1,532,147 $1,532,147 $1,953,065 $5,425 $997,057

FINANCIAL COSTS:

Total Financial Costs: Notes to the Financial Costs

1. Financial costs were derived from the representations illustrated in the letters of intent for the construction and permanent financing and appear reasonable to AmeriNat.

2. The FHFC Bond Underwriting is an estimate of the bond underwriter fees ($117,975) and bond underwriter counsel ($15,000), which was provided by RBC.

3. FHFC Bond Interest was calculated assuming the MMRB is outstanding the entire 18 month term and accrues interest at the “all‐in” rate of 1.10%.

4. The letter provided by BFIM outlining the terms and conditions for which they would make an equity investment in the Borrower requires an operating deficit reserve of $736,707 to be funded upon completion of the Development. The ODR represents approximately three months of expenses and debt service. The calculation of developer fee will be exclusive of the budgeted ODR and any ODR “proposed or required by a limited partner or other lender” in excess of the amount of the ODR deemed satisfactory by the credit underwriter will be a subset of developer fee. At the end of the Compliance Period, any remaining balance of the ODR less amounts that may be permitted to be drawn, which includes Deferred Developer Fee and reimbursements for authorized member and guarantor loan(s) pursuant to the operating agreement, will be used to pay FHFC debt; if there is no FHFC loan debt on the proposed Development at the end of the Compliance Period, any remaining balance shall be used to pay any outstanding FHFC fees, deferred developer fee and partner funding. In no event shall the payments of amounts to the Applicant or the Developer from the Reserve Account cause the Developer Fee or General Contractor Fee to exceed the applicable percentage limitations provided for in the Rule. If any balance in the ODR account is remaining after the payments above, the amount should be placed in a Replacement Reserve account for the Development. Any and all terms and conditions of the ODR must be acceptable to Florida Housing, its Servicer and its legal counsel.

5. A non‐refundable TEFRA fee of $1,000 was received by FHFC at the time of application.

6. The FHFC Cost of Issuance (“COI”) line item includes Issuer Fees ($107,500), FHFC Real Estate Counsel Fees ($39,151), Bond Counsel Fees ($61,000), Disclosure Counsel ($29,151), Bond Rating Fees ($10,000), Trustee Fees ($10,500), TEFRA fee ($500), and other miscellaneous costs ($12,275) included in the Cost of Issuance. The cumulative COI appears reasonable and will be verified at loan closing.

EXHIBIT B of 35




Applicant Costs

Underwriters


HC Ineligible

Costs ‐ CUR

Building Acquisition Cost $24,400,000 $24,400,000 $25,123,077 $69,786 $0

$24,400,000 $24,400,000 $25,123,077 $69,786 $0

NON‐LAND ACQUISITION COSTS

Total Non‐Land Acquisition Costs: Notes to the Non‐Land Acquisition Costs:

1. An executed Purchase and Sale Agreement between the Applicant and Vestcor Fund XI, Ltd. was provided. The total purchase price is $27,600,000. According to the appraisal prepared by Novogradac & Company, LLP dated November 10, 2016, the “As Is” appraised value of the Development is $28,300,000, which supports the purchase price. The lesser of the two values has been used for underwriting purposes.

2. Based upon FHFC’s Land Allocation criteria, the lowest calculated land value is $2,476,923. AmeriNat attributed the difference between the purchase price and the land value of $25,123,077 as the Building Acquisition cost.


Applicant Costs

Underwriters


HC Ineligible

Costs ‐ CUR

$34,487,811 $34,487,812 $35,776,062 $99,378 $1,451,308

$0 $4,392,000 $4,522,153 $12,562 $0

Developer Fee $6,157,046 $1,765,046 $1,784,930 $4,958 $0

$6,157,046 $6,157,046 $6,307,083 $17,520 $0

OTHER DEVELOPMENT COSTS

Development Cost Before Developer Fee

and Land Costs

Developer Fee on Acquisition of Buildings

Total Other Development Costs: Notes to the Other Development Costs:

1. Total Developer Fee of $6,307,083 does not exceed 18.00% of Development Costs less Developer Fee, Land, and Operating Deficit Reserves. The Developer Fee on Acquisition of Buildings equals 18.00% of Building Acquisition Costs, as allowed by Rule for transactions utilizing tax‐exempt bond financing.


Applicant Costs

Underwriters


HC Ineligible

Costs ‐ CUR

Land $3,200,000 $3,200,000 $2,476,923 $6,880 $2,476,923

$3,200,000 $3,200,000 $2,476,923 $6,880 $2,476,923

LAND ACQUISITION COSTS

Total Acquisition Costs: Notes to Land Acquisition Costs:

1. According to the appraisal performed by Novogradac, the market value of the underlying land “As If vacant” is $3,500,000. However, based upon FHFC’s Land Allocation criteria, the lowest calculated land value is $2,476,923, which is reflected herein.

$43,844,857 $43,844,858 $44,560,068 $123,778 $3,928,231TOTAL DEVELOPMENT COSTS: Notes to Total Development Costs:

1. Total Development Costs have increased by $715,211 from $43,844,857 to $44,560,068 since the time of application due to increases in construction costs, and financial costs.

EXHIBIT B of 35



OPERATING PRO FORMA

FINANCIAL COSTS: Year 1Year 1

Per Unit

OPERATING PRO FORMA

Gross Potentia l Renta l Income $3,147,984 $8,744

Other Income $0

Miscel laneous $216,000 $600

Gross Potentia l Income $3,363,984 $9,344

Less :

Phys ica l Vac. Loss Percentage: 2.00% $67,280 $187

Col lection Loss Percentage: 1.00% $33,640 $93

Total Effective Gross Income $3,263,064 $9,064

Fixed:

Real Estate Taxes $342,796 $952

Insurance $72,000 $200

Variable:

Management Fee Percentage: 3.50% $114,207 $317

Genera l and Adminis trative $115,200 $320

Payrol l Expenses $399,600 $1,110

Uti l i ties $183,600 $510

Maintenance and Repairs/Pest Control $237,600 $660

Grounds Maintenance and Landscaping $46,800 $130

Securi ty $30,600 $85

Reserve for Replacements $108,000 $300

Total Expenses $1,650,403 $4,584

Net Operating Income $1,612,661 $4,480

Debt Service Payments

Firs t Mortgage ‐ Pi l la r $1,402,165 $3,895

Tota l Debt Service Payments $1,402,165 $3,895

Cash Flow after Debt Service $210,496 $585

FINANCIAL COSTS: Annual Per Unit

Debt Service Coverage Ratios

DSC ‐ Firs t Mortgage 1.15 1.15

DSC ‐ Al l Mortgages and Fees 1.15 1.15

Financial Ratios

Operating Expense Ratio 50.58%

Break‐even Economic Occupancy Ratio (a l l debt) 90.74%

INCOME:

EXPENSES:

EXHIBIT B of 35



Notes to the Operating Pro Forma and Ratios:

1. The development will be utilizing Housing Credits in conjunction with the MMRB financing, which will impose rent restrictions. As restricted by the MMRB and HC programs, 100% of the units (360 units) will be set aside for households earning 60% or less of the Area Median Income (“AMI”). Gross Potential Rental Revenue is based upon the maximum gross LIHTC rents per the Florida Housing website for 2016. The utility allowances are $47 for one‐bedroom units, $62 for two‐bedroom units, and $79 for three‐bedroom units based upon a utility allowance schedule per an energy consumption model dated November 1, 2016 that was approved by Florida Housing. The appraisal confirms the Development’s ability to achieve 2016 maximum restricted rents for the 60% of the AMI units based upon current market conditions. A rent roll for the Development property is illustrated in the following table:

MSA (County): Orlando‐Kissimmee‐Sanford MSA (Seminole County)

Gross HC

Rent

$611 $175,968$47 $611 $611 $608

Appraiser

Rents CU Rents

Annual Rental

Income

1.0 1.0 24 687 60% $658

Low

HOME

Rents

High

HOME

Rents

Utility

Allow

RD/HUD

Cont

Rents

Net HC

Rent

Applicant

Rents

Bed

Rooms

Bath

Rooms Units

Square

Feet AMI%

$728 $728 $728 $728 $524,160

$439,920

2.0 2.0 60 904 60% $790 $62

$47 $611 $611 $608 $6111.0 1.0 60 691 60% $658

3.0 2.0 96 1160 60% $912

2.0 2.0 120 924 60% $790 $723 $728 $1,048,320$62 $728 $728

$833 $959,616$79 $833 $833 $828

360 334,428 $3,147,984

2. A 3.0% total economic vacancy rate (2.00% physical and 1.00% collection loss) was concluded by the appraisal and was relied upon by AmeriNat for underwriting purposes.

3. Other Income includes fees for late rent fees, application fees, laundry, and other miscellaneous fees. Also, the Development offers appliances (stackable washer/dryer) for rent, which generate primary laundry income, along with significant sub‐metering income and some moderate late charges, credit check fees, forfeited deposits, termination fees, and cleaning/damage charges.

4. AmeriNat utilized a real estate tax expense of $952 per unit based upon the current millage rate for the municipality and an estimated assessment of $43,000 per unit presented by the appraiser. The estimate also took into account the income restrictions of the Development. Comparable properties indicated a range of assessments from $27,762 to $43,899 per unit.

5. AmeriNat utilized an estimate of $200 per unit for insurance, which is consistent with the appraisal. The figure used is consistent with the Development’s historical insurance expenses that range from $185 to $197 per unit, with a mean and median of $191 per unit. The Development will be located in a flood zone designated “X”, which lies outside the 100 and 500‐year flood plain and does not require flood insurance.

6. The Applicant submitted a Management Agreement dated October 12, 2016 between WRH Realty Services, Inc. (“Management Company”) and the Applicant. The agreement states the initial term of the agreement will expire on December 31, 2017, but will be automatically renewed for thereafter on a month‐to‐month basis unless terminated by either party in accordance with the conditions of the Management Agreement. The Agreement provides for compensation to the Management Company in the amount of 3.5% of the total gross rental collections or $5,000, whichever is greater, received during the preceding month. Comparable properties identified in the appraisal support a management fee of 3.5%, which was utilized for underwriting purposes.

EXHIBIT B of 35



7. A Capital Needs Assessment completed by Partners included a replacement reserve schedule that determined Replacement Reserves of $282 per unit per year are necessary for the Development to maintain itself as a competitive development. However, by Rule, the minimum required reserve is $300.

8. Based upon an estimated Net Operating Income (“NOI”) of $1,650,403 for the proposed development’s initial year of stabilized operations; the first mortgage loan can be supported by operations at a 1.15 to 1.00 Debt Service Coverage (“DSC”). The Development meets the minimum 1.10x DSC requirement for the first mortgage as required by the Housing Credits Program.

9. A 15‐year Operating Pro forma attached hereto as Exhibit 1 reflects rental income increasing at an annual rate of 2% and expenses increasing at an annual rate of 3%

EXHIBIT B of 35


November 22, 2016

Section B

MMRB Closing Special and General Conditions

EXHIBIT B of 35


LOGAN HEIGHTS APARTMENTS PAGE B‐1 November 22, 2016

Special Conditions

This recommendation is contingent upon receipt of the following item by Florida Housing at least two weeks prior to loan closing. Failure to submit this item within this time frame may result in postponement of the loan closing date.

1. Receipt of a final satisfactory PCR in form and function that is acceptable to AmeriNat. The report will need to conclude that all of the features and amenities committed by the Applicant in its application to Florida Housing are included in the plans and specifications.

General Conditions

This recommendation is contingent upon the review and approval of the following items by Florida Housing and the Servicer at least 30 days prior to real estate loan closing. Failure to submit and to receive approval of these items within this time frame may result in postponement of the closing date.

1. Borrower is to comply with any and all recommendations noted in the Plan and Cost Review prepared by Partner.

2. Signed and sealed survey, dated within 90 days of closing, unless otherwise approved by Florida Housing, and its Legal Counsel, based upon the particular circumstances of the transaction. The Survey shall be certified to Florida Housing, and its Legal Counsel, as well as the title insurance company, and shall indicate the legal description, exact boundaries of the Development, easements, utilities, roads, and means of access to public streets, total acreage and flood hazard area and any other requirements of Florida Housing.

3. Building permits and any other necessary approvals and permits (e.g., final site plan approval, water management district, Department of Environmental Protection, Army Corps of Engineers, Department of Transportation, etc.). An acceptable alternative to this requirement is receipt and satisfactory review of a letter from the local permitting and approval authority stating that the above referenced permits and approvals will be issued upon receipt of applicable fees (with no other conditions), or evidence of 100% lien‐free completion, if applicable. If a letter is provided, copies of all permits will be required as a condition of the first post‐closing draw.

4. Final sources and uses of funds itemized by source and line item, in a format and in amounts approved by the Servicer. A detailed calculation of the construction interest based on the final draw schedule (see below), documentation of the closing costs, and draft loan closing statement must also be provided. The sources and uses of funds schedule will be attached to the Loan Agreement as the approved development budget.

5. A final construction draw schedule showing itemized sources and uses of funds for each monthly draw. The closing draw shall include appropriate backup and ACH wiring instructions.

6. During construction/rehabilitation, the developer is only allowed to draw a maximum of 50% of the total developer fee during construction/rehabilitation, but in no case more than the payable developer fee, which is determined to be “developer’s overhead”. No more than 35% of “developer’s overhead” during construction/rehabilitation will be allowed to be disbursed at closing. The remainder of the “developer’s overhead” will be disbursed during the construction/rehabilitation on a pro rata basis, based on the percentage of completion of the Development, as approved by FHFC and Servicer. The remaining unpaid developer fee shall be considered attributable to “developer’s profit” and may not be funded until the development has achieved 100% lien‐free completion and retainage has been released.

EXHIBIT B of 35



7. Evidence of general liability, flood (if applicable), builder’s risk and replacement cost hazard insurance (as certificates of occupancy are received) reflecting Florida Housing as Loss Payee/Mortgagee, with coverages, deductibles and amounts satisfactory to Florida Housing.

8. A 100% Payment and Performance Bond or a Letter of Credit (LOC) in an amount not less than 25% of the construction contract is required in order to secure the construction contract between the GC and the Borrower. In either case, Florida Housing must be listed as co‐obligee. The P&P bonds must be from a company rated at least “A‐“by A.M. Best & Co with a financial size category of at least FSC VI. FHFC, and/or Legal Counsel must approve the source, amount(s), and all terms of the P&P bonds, or LOC. If the LOC option is utilized, the LOC must include “evergreen” language and be in a form satisfactory to the Servicer, Florida Housing, and its Legal Counsel.

9. Architect, Construction Consultant, and Borrower certifications on forms provided by Florida Housing will be required for both design and as‐built with respect to Section 504 of the Rehabilitation Act, Americans with Disabilities Act, and the Federal Fair Housing Act requirements, as applicable.

10. A copy of the Amended and Restated Limited Partnership Agreement (“LPA”) reflecting purchase of the HC under terms consistent with the assumptions contained within this Credit Underwriting Report. The LPA shall be in a form and of financial substance satisfactory to Servicer, Florida Housing, and its Legal Counsel.

11. Satisfactory resolution of any outstanding past due or non‐compliance issues by closing of the loan(s).

12. Final “as permitted” (signed & sealed) site plans, building plans & specifications showing all Features & Amenities committed to in the Application. The geotechnical report must be bound within the final plans & specifications.

13. Payment of any outstanding arrearages to the Corporation, its legal counsel, Servicer or any agent or assignee of the Corporation for past due issues applicable to the development team (Applicant or Developer or Principal, Affiliate or Financial Beneficiary, as described in 67‐21.0025(5) of an Applicant or a Developer).

14. At all times there will be undisbursed loan funds (collectively held by Florida Housing, the first lender and any other source) sufficient to complete the Development. If at any time there are not sufficient funds to complete the Development, the Borrower will be required to expend additional equity on Development costs or to deposit additional equity with Florida Housing which is sufficient (in Florida Housing’s judgment) to complete the Development before additional loan funds are disbursed. This condition specifically includes escrowing at closing all equity necessary to complete construction or another alternative acceptable to Florida Housing in its sole discretion.

15. An Operating Deficit Reserve (“ODR”) in the collective amount of approximately three months of expenses and debt service will be permitted within the Applicant’s budget, unless the credit underwriter deems a larger reserve is necessary. The calculation of developer fee will be exclusive of the budgeted ODR and any ODR “proposed or required by a limited partner or other lender” in excess of the amount of the ODR deemed satisfactory by the credit underwriter will be a subset of developer fee. At the end of the compliance period, any remaining balance of the ODR less amounts that may be permitted to be drawn (which includes Deferred Developer Fee and reimbursements for authorized member/partner and guarantor loan(s) pursuant to the operating/partnership agreement), will be used to pay FHFC loan debt; if there is no FHFC loan debt on the proposed Development at the end of the compliance period, any remaining balance shall be used to pay any outstanding FHFC fees. If any balance is remaining in the ODR after the payments above, the amount should be placed in a Replacement Reserve account for the Development. In no event shall the

EXHIBIT B of 35



payments of amounts to the Applicant or the Developer from the Reserve Account cause the Developer Fee or General Contractor Fee to exceed the applicable percentage limitations provided for in the Rule. Any and all terms and conditions of the ODR must be acceptable to Florida Housing, its Servicer and its legal counsel.

This recommendation is contingent upon the review and approval by Florida Housing, and its Legal Counsel at least 30 days prior to real estate loan closing. Failure to receive approval of these items within this timeframe may result in postponement of the closing date.

1. Documentation of the legal formation and current authority to transact business in Florida for the Borrower, the general partner/principal(s)/manager(s) of the Applicant, the guarantors, and any limited partners of the Applicant.

2. Signed and sealed survey, dated within 90 days of closing, unless otherwise approved by Florida Housing, and its legal counsel, based upon the particular circumstances of the transaction. The Survey shall be certified to Florida Housing and its legal counsel, as well as the title insurance company, and shall indicate the legal description, exact boundaries of the Development, easements, utilities, roads, and means of access to public streets, total acreage and flood hazard area and any other requirements of Florida Housing.

3. An acceptable updated Environmental Audit Report, together with a reliance letter to Florida Housing, prepared within 90 days of MMRB closing, unless otherwise approved by Florida Housing, and Legal Counsel, based upon the particular circumstances of the transaction. Borrower to comply with any and all recommendations noted in the Environmental Assessment(s) and Update and the Environmental Review, if applicable.

4. Title insurance pro‐forma or commitment for title insurance with copies of all Schedule B exceptions, in the amount of the MMRB naming Florida Housing as the insured. All endorsements required by Florida Housing shall be provided.

5. Florida Housing and its legal counsel shall review and approve all other lenders closing documents and the limited partnership or other applicable agreement. Florida Housing shall be satisfied in its sole discretion that all legal and program requirements for the MMRB have been satisfied.

6. Evidence of general liability, flood (if applicable), builder’s risk, and replacement cost hazard insurance (as certificates of occupancy are received) reflecting Florida Housing as Loss Payee/Mortgagee, in coverage, deductibles and amounts satisfactory to Florida Housing.

7. Receipt of a legal opinion from the Borrower's Legal Counsel acceptable to Florida Housing addressing the following matters:

a. The legal existence and good standing of the Borrower and of any partnership or limited liability company that is the general partner of the Borrower (the "GP") and of any corporation or partnership that is the managing general partner of the GP, and of any corporate guarantor and any manager;

b. Authorization, execution, and delivery by the Borrower and the guarantors, of all Loan documents;

c. The loan documents being in full force and effect and enforceable in accordance with their terms, subject to bankruptcy and equitable principles only;

d. The Borrower's and the guarantor's execution, delivery and performance of the loan documents shall not result in a violation of, or conflict with, any judgments, orders, contracts,

EXHIBIT B of 35



mortgages, security agreements or leases to which the Borrower is a party or to which the Development is subject to the Borrower’s Partnership Agreement and;

e. Such other matters as Florida Housing or its legal counsel may require.

8. Evidence of compliance with local concurrency laws, if applicable.

9. UCC Searches for the Borrower, its partnerships, as requested by counsel.

10. Such other assignments, affidavits, certificates, financial statements, closing statements, and other documents as may be reasonably requested by Florida Housing or its legal counsel in form and substance acceptable to Florida Housing and its legal counsel, in connection with the loan(s).

11. Any other reasonable conditions established by Florida Housing and its Legal Counsel.

This recommendation is also contingent upon the following additional conditions:

1. Compliance with all provisions of Sections 420.507, 420.5089, and 420.509, Florida Statutes, Rule Chapters 67‐21, 67‐53, 67‐60 F.A.C., Section 42 of the I.R.C., and any other State and Federal requirements.

2. Acceptance by the Borrower and execution of all documents evidencing and securing the MMRB in form and substance satisfactory to Florida Housing, including, but not limited to, the Trust Indenture, the Loan Agreement(s), the Mortgage and Security Agreement, and the Land Use Restriction Agreement(s).

3. All amounts necessary to complete construction or any phased pay‐in of amount necessary to complete construction shall be contingent upon an unconditional obligation, through a Joint Funding Agreement or other mechanism acceptable to Florida Housing, of the entity providing HC Equity payments (and evidence that 100% of such amount is on deposit with such entity at Loan Closing) to pay, regardless of any default under any documents relating to the HC as long as the First Mortgage continues to be funded.

4. MMRB Program Loan ‐ All amounts necessary to complete construction/rehabilitation, must be deposited with the Bond Trustee prior to closing, or any phased pay‐in of amount necessary to complete construction/rehabilitation shall be contingent upon an unconditional obligation, through a Joint Funding Agreement or other mechanism acceptable to Florida Housing, of the entity providing HC Equity payments (and evidence that 100% of such amount is on deposit with such entity at loan closing) to pay, regardless of any default under any documents relating to the HC as long as the First Mortgage continues to be funded.

5. If applicable, receipt and satisfactory review of financial statements from all guarantors dated within 90 days of real estate closing.

6. Guarantors to provide the standard Florida Housing Construction Completion Guaranty; to be released upon lien‐free completion as approved by the Servicer.

7. For the MMRB, Guarantors are to provide the standard FHFC Operating Deficit Guarantee. If requested in writing by the Applicant, the Servicer will consider a recommendation to release the Operating Deficit Guarantee if all conditions are met, including achievement of a 1.15x debt service coverage on the MMRB as determined by the Corporation or the Servicer and 90 percent occupancy and 90 percent of the gross potential rental income, net of utility allowances, if applicable, all for a period equal to 12 consecutive months, all certified by an independent Certified Public Accountant, and certified by the Credit Underwriter. The calculation of the debt service coverage ratio shall be

EXHIBIT B of 35



made by the Corporation or the Servicer. Notwithstanding the above, the operating deficit guarantee shall not terminate earlier than three (3) years following the final certificate of occupancy.

8. Guarantors are to provide the standard Florida Housing Environmental Indemnity Guaranty.

9. Guarantors are to provide the standard Florida Housing Guaranty of Recourse Obligations.

10. A mortgagee title insurance policy naming Florida Housing as the insured in the amount of the MMRB is to be issued immediately after closing. Any exceptions to the title insurance policy must be acceptable to Florida Housing or its Legal Counsel. All endorsements that are required by Florida Housing are to be issued and the form of the title policy must be approved prior to closing.

11. Property tax and hazard insurance escrow are to be established and maintained by the First Mortgagee or the Servicer. In the event the reserve account is held by the Servicer, the release of funds shall be at Florida Housing’s sole discretion.

12. Replacement Reserves in the amount of $300 per unit per year will be required to be deposited on a monthly basis into a designated escrow account, to be maintained by the First Mortgagee or Florida Housing’s loan servicing agent. However, Applicant has the option to prepay Replacement Reserves. Acquisition and Rehabilitation developments shall not be allowed to draw until the start of the scheduled replacement activities as outlined in the pre‐construction capital needs assessment report (“CNA”) subject to the activities completed in the scope of rehabilitation, but not sooner than the 3rd year. The initial replacement reserve will have limitations on the ability to be drawn. The amount established as a replacement reserve shall be adjusted based on a capital needs assessment (“CNA”) to be received by the Corporation or its servicers, prepared by an independent third party and acceptable to the Corporation and its servicers at the time the CNA is required. Beginning no later than the 10th year after the first residential building receives a certificate of occupancy, a temporary certificate of occupancy, or is placed in service, whichever is earlier (“Initial Replacement Reserve Date”). A subsequent CNA is required no later than the 15th year after the Initial Replacement Reserve Date and subsequent assessments are required every five years thereafter.

13. Partner, or other construction inspector acceptable for Florida Housing, will act as Florida Housing’s inspector during the construction period.

14. Florida Housing requires a minimum of 10% retainage holdback on all construction draws until the Development is 50% complete, and 0% retainage thereafter is required. Retainage will not be released until successful completion of construction and issuance of all certificates of occupancy. Notwithstanding the Florida Housing requirement, the Construction Contract allows for retainage of ten percent (10%) to be withheld from the General Contractor’s application for payment until the Development is complete.

15. Satisfactory completion of a pre‐loan closing compliance audit conducted by Florida Housing or Servicer, if applicable.

16. Closing of all the funding sources prior to or simultaneously with the MMRB.

17. Any other reasonable requirements of the Servicer, Florida Housing, or its Legal Counsel.

EXHIBIT B of 35



Housing Credit Allocation Recommendation AmeriNat recommends an annual $1,340,851 HC Allocation. Please refer to Exhibit 3 ‐ HC Allocation Calculation for further detail.

Contingencies

1. Approval by FHFC’s Asset Management Department of the selection of WRH Realty Services, Inc. to manage the Development.

2. Purchase of the HC by the Syndicator or its assigns under the terms consistent with assumptions of this report.

3. Closing of the MMRB consistent with the assumptions of this credit underwriting report.

4. Receipt of executed FHFC Fair Housing, Section 504 and ADA as‐built certification forms 122, 127, and 129.

5. Partner Engineering and Science, Inc. is to act as construction phase inspector for Florida Housing.

6. Receipt and satisfactory resolution (as determined by FHFC) of any outstanding past due items or non‐compliance issues, according to the latest FHFC Past Due and/or Non‐ Compliance Reports.

7. Any other reasonable requirements of Florida Housing or its Servicer.

EXHIBIT B of 35


LOGAN HEIGHTS APARTMENTS EXHIBIT 1, PAGE 1 November 22, 2016

Exhibit 1 Logan Heights Apartments

15 Year Operating Pro Forma

FINANCIAL COSTS: 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 15OPERATING PRO FORMA

Gross Potentia l Renta l Income $3,147,984 $3,210,944 $3,275,163 $3,340,666 $3,407,479 $3,475,629 $3,545,141 $3,616,044 $3,688,365 $3,762,132 $3,837,375 $3,914,122 $3,992,405 $4,072,253 $4,153,698

Miscel laneous $216,000 $220,320 $224,726 $229,221 $233,805 $238,481 $243,251 $248,116 $253,078 $258,140 $263,303 $268,569 $273,940 $279,419 $285,007

Gross Potentia l Income $3,363,984 $3,431,264 $3,499,889 $3,569,887 $3,641,284 $3,714,110 $3,788,392 $3,864,160 $3,941,443 $4,020,272 $4,100,678 $4,182,691 $4,266,345 $4,351,672 $4,438,705

Less :

Phys ica l Vac. Loss Percentage: 2.00% $67,280 $68,625 $69,998 $71,398 $72,826 $74,282 $75,768 $77,283 $78,829 $80,405 $82,014 $83,654 $85,327 $87,033 $88,774

Col lection Loss Percentage: 1.00% $33,640 $34,313 $34,999 $35,699 $36,413 $37,141 $37,884 $38,642 $39,414 $40,203 $41,007 $41,827 $42,663 $43,517 $44,387

Total Effective Gross Income $3,263,064 $3,328,326 $3,394,892 $3,462,790 $3,532,046 $3,602,687 $3,674,741 $3,748,235 $3,823,200 $3,899,664 $3,977,657 $4,057,211 $4,138,355 $4,221,122 $4,305,544

Fixed:

Real Estate Taxes $342,796 $353,080 $363,672 $374,582 $385,820 $397,395 $409,316 $421,596 $434,244 $447,271 $460,689 $474,510 $488,745 $503,407 $518,510

Insurance $72,000 $74,160 $76,385 $78,676 $81,037 $83,468 $85,972 $88,551 $91,207 $93,944 $96,762 $99,665 $102,655 $105,734 $108,906

Variable:

Management Fee Percentage: 3.50% $114,207 $116,491 $118,821 $121,198 $123,622 $126,094 $128,616 $131,188 $133,812 $136,488 $139,218 $142,002 $144,842 $147,739 $150,694

Genera l and Administrative $115,200 $118,656 $122,216 $125,882 $129,659 $133,548 $137,555 $141,681 $145,932 $150,310 $154,819 $159,464 $164,248 $169,175 $174,250

Payrol l Expenses $399,600 $411,588 $423,936 $436,654 $449,753 $463,246 $477,143 $491,458 $506,201 $521,387 $537,029 $553,140 $569,734 $586,826 $604,431

Uti l i ties $183,600 $189,108 $194,781 $200,625 $206,643 $212,843 $219,228 $225,805 $232,579 $239,556 $246,743 $254,145 $261,770 $269,623 $277,711

Maintenance and Repairs/Pest Control $237,600 $244,728 $252,070 $259,632 $267,421 $275,444 $283,707 $292,218 $300,985 $310,014 $319,315 $328,894 $338,761 $348,924 $359,391

Grounds Maintenance and Landscaping $46,800 $48,204 $49,650 $51,140 $52,674 $54,254 $55,882 $57,558 $59,285 $61,063 $62,895 $64,782 $66,726 $68,727 $70,789

Securi ty $30,600 $31,518 $32,464 $33,437 $34,441 $35,474 $36,538 $37,634 $38,763 $39,926 $41,124 $42,358 $43,628 $44,937 $46,285

Reserve for Replacements $108,000 $108,000 $108,000 $108,000 $108,000 $108,000 $108,000 $108,000 $108,000 $108,000 $111,240 $114,577 $118,015 $121,555 $125,202

Total Expenses $1,650,403 $1,695,533 $1,741,994 $1,789,826 $1,839,069 $1,889,765 $1,941,957 $1,995,689 $2,051,008 $2,107,960 $2,169,834 $2,233,537 $2,299,123 $2,366,648 $2,436,170

Net Operating Income $1,612,661 $1,632,792 $1,652,898 $1,672,964 $1,692,977 $1,712,922 $1,732,784 $1,752,546 $1,772,192 $1,791,704 $1,807,823 $1,823,674 $1,839,232 $1,854,474 $1,869,374

Debt Service Payments

Fi rst Mortgage ‐ $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165

Tota l Debt Service Payments $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165 $1,402,165

Cash Flow after Debt Service $210,496 $230,627 $250,733 $270,799 $290,812 $310,757 $330,619 $350,381 $370,027 $389,539 $405,658 $421,509 $437,067 $452,309 $467,209

FINANCIAL COSTS: Annual Annual Annual Annual Annual Annual Annual Annual Annual Annual Annual Annual Annual Annual AnnualDebt Service Coverage Ratios

DSC ‐ Fi rs t Mortgage 1.15 1.16 1.18 1.19 1.21 1.22 1.24 1.25 1.26 1.28 1.29 1.30 1.31 1.32 1.33

DSC ‐ Al l Mortgages and Fees 1.15 1.16 1.18 1.19 1.21 1.22 1.24 1.25 1.26 1.28 1.29 1.30 1.31 1.32 1.33

Financial Ratios

Operating Expense Ratio 50.58% 50.94% 51.31% 51.69% 52.07% 52.45% 52.85% 53.24% 53.65% 54.05% 54.55% 55.05% 55.56% 56.07% 56.58%

Break‐even Economic Occupancy Ratio (a l l debt) 90.74% 90.28% 89.84% 89.41% 89.01% 88.63% 88.27% 87.93% 87.61% 87.31% 87.11% 86.92% 86.76% 86.61% 86.47%

INCOME:

EXPENSES:

EXHIBIT B of 35



Logan Heights Apartments 2015‐109B

Seminole County Description of Features and Amenities

A. The Development will consist of:

360 garden apartment units located in 15 residential buildings

Unit Mix:

Twenty‐four (24) one bedroom/one bath units containing a minimum of 687 square feet of heated and cooled living area; and

Sixty (60) one bedroom/one bath units containing a minimum of 691 square feet of heated and cooled living area; and

Sixty (60) two bedroom/two bath units containing a minimum of 904 square feet of heated and cooled living area; and

One hundred twenty (120) two bedroom/two bath units containing a minimum of 924 square feet of heated and cooled living area; and

Ninety‐six (96) three bedroom/two bath units containing a minimum of 1,160 square feet of heated and cooled living area.

360 Total Units

B. The Development is to be rehabilitated in accordance with the final plans and specifications approved

by the appropriate city or county building or planning department or equivalent agency, and approved as reflected in the Plan and Cost Review prepared for Florida Housing or its Servicer, unless a change has been approved in writing by Florida Housing or its Servicer. The Development will conform to requirements of local, state & federal laws, rules, regulations, ordinances, orders and codes, 2012 Florida Accessibility Code for Building Construction as adopted pursuant to Section 553.503, Florida Statutes, The Fair Housing Act as implemented by 24 CFR 100, and Titles II and III of the Americans with Disabilities Act of 1990 as implemented by 28 CFR 35, incorporating the most recent amendments, regulations and rules.

C. The Development must provide the following Optional Features and Amenities:

1. 30 Year expected life roofing on all buildings; 2. Community center or clubhouse; and, 3. Swimming pool.

D. The Development must provide the following Green Building features:

1. Programmable thermostat in each unit; 2. Energy efficient windows in each unit, as follows: Energy Star rating for all windows in each

unit; 3. Low‐flow water fixtures in bathrooms – WaterSense labeled products or the following

specifications: a. Toilets: 1.28 gallons/flush or less

EXHIBIT B of 35



b. Faucets: 1.5 gallons/minute or less c. Showerheads: 2.0 gallons/minute or less;

4. Energy Star qualified refrigerators, dishwashers and washing machines that are provided by the Applicant;

5. Minimum SEER of 14 for Unit air conditioners E. The Development will provide the following Resident Services:

1. Resident Activities ‐ These specified activities are planned, arranged, provided and paid for by the Applicant or its Management Company and held between the hours of 9:00 a.m. and 9:00 p.m. These activities must be an integral part of the management plan. The Applicant must develop and execute a comprehensive plan of varied activities that brings the residents together and encourages community pride. The goal here is to foster a sense of community by bringing residents together on a regularly scheduled basis by providing activities such as holiday and special occasion parties, community picnics, newsletters, children’s special functions, etc.

EXHIBIT B of 35

NAME OF PROGRAM CREDIT UNDERWRITING REPORT AMERINAT


HOUSE CREDIT ALLOCATION CALCULATION

Qualified Basis Calculation

Acquisition

Acquistion Cost of Land and Existing Improvements $27,600,000

Less Land Costs $2,476,923

Plus Developer Fee Attributable to Acquisition $4,522,153

Total Eligible Basis $29,645,230

Applicable Fraction 100%

Qualified Basis $29,645,230

Housing Credit Percentage (Federal allocation) 3.30%

Annual Housing Credit Allocation $978,293

Rehabilitation

Total Development Cost $44,560,068

Less Cost of Land and Existing Improvements $27,600,000

Less Developer Fee on Acquistion of Buildings $4,522,153

Less Other Ineligible Costs $1,451,308

Total Eligible Basis $10,986,607

Applicable Fraction 100%

DDA/QCT Basis Credit, if applicable 100%

Qualified Basis $10,986,607

Housing Credit Percentage (Federal allocation) 3.30%

Annual Housing Credit Allocation $362,558 Annual Housing Credit Allocation Per Qualified Basis $1,340,851 Notes to the Qualified Basis Calculation:

1. “Other Ineligible Costs” include Florida Housing compliance, administrative, application, and underwriting fees, title insurance/recording fees, marketing/advertising fees, and permanent loan origination fees.

2. The Development is 100% set‐aside; therefore, the Applicable Fraction is 100%.

3. The Development is not located in a Difficult Development Area (“DDA”) or Qualified Census Tract (“QCT”). As such, it is ineligible to use the 130% multiplier for the DDA/QCT Basis Credit.

4. Per Rule, 15 basis points are added to the actual percentage (3.15%) as of the date of invitation to credit underwriting August 29, 2016 to determine the Housing Credit Percentage.

EXHIBIT B of 35

NAME OF PROGRAM CREDIT UNDERWRITING REPORT AMERINAT


GAP Calculation

Total Development Cost (including land and ineligible costs) $44,560,068

Less Mortgages $24,690,000

Equity Gap $19,870,068

HC Percentage to Investment Partnership 99.99%

HC Syndication Pricing $1.0199804907

HC Required to meet Equity Gap $19,482,780

Annual HC Required $1,948,278 Notes to the GAP Calculation:

1. Mortgages include the First Mortgage provided by Pillar.

2. According to Rule Chapter 67‐21 F.A.C., the Development exceeds the minimum qualifying first mortgage amount, which is the actual amount committed to the Development.

3. The HC Syndication Pricing of $1.0199804907 per dollar and HC Percentage to Investment Partnership are based upon the BFIM letter of intent revised November 3, 2016.

Summary

HC Per Qualified Basis $1,340,851

HC Per GAP Calculation $1,948,278

Annual HC Recommended $1,340,851

HC Proceeds Recommended $13,675,051 Notes to Summary:

1. The Annual HC Recommended is equal to the lesser of the Qualified Basis or the GAP Calculation. Therefore, the Qualified Basis was utilized.

Tax Exempt Bond 50% Test

Total DEPRECIABLE Cost $40,631,837

Plus: Land Cost $2,476,923

Equals Aggregate Basis $43,108,760

Tax Exempt Bond Amount $23,500,000

Equals Tax Exempt Proceeds Used for Building and Land $23,500,000

Tax Exempt Proceeds as a Percentage of Aggregate Basis 54.51% Notes to the 50% Test:

1. Based upon this analysis, the 50% Test is satisfactory.

EXHIBIT B of 35

COMPLETENESS AND ISSUES CHECKLIST


DEVELOPMENT NAME: Logan Heights Apartment DATE: November 22, 2016

In accordance with the applicable Program Rule(s), the Applicant is required to submit the information required to evaluate, complete, and determine its sufficiency in satisfying the requirements for Credit Underwriting to the Credit Underwriter in accordance with the schedule established by the Florida Housing. The following items must be satisfactorily addressed. “Satisfactorily” means that the Credit Underwriter has received assurances from third parties unrelated to the Applicant that the transaction can close within the allowed timeframe. Unsatisfactory items, if any, are noted below and in the “Issues and Concerns” section of the Executive Summary.

FINAL REVIEW

REQUIRED ITEMS:

STATUS NOTE

Satis. / Unsatis.

1. The development’s final “as submitted for permitting” plans and specifications.

Note: Final “signed, sealed, and approved for construction” plans and specifications will be required thirty days before closing.

Satis.

2. Final site plan and/or status of site plan approval. Satis.

3. Permit Status. Satis.

4. Pre‐construction analysis (“PCA”). Unsatis. 1

5. Survey. Satis.

6. Complete, thorough soil test reports. Satis.

7. Full or self‐contained appraisal as defined by the Uniform Standards of Professional Appraisal Practice. Satis.

8. Market Study separate from the Appraisal. Satis.

9. Environmental Site Assessment – Phase I and/or the Phase II if applicable (If Phase I and/or II disclosed environmental problems requiring remediation, a plan, including time frame and cost, for the remediation is required). If the report is not dated within one year of the application date, an update from the assessor must be provided indicating the current environmental status.

Satis.

10. Audited financial statements for the most recent fiscal year ended or acceptable alternative as stated in Rule for credit enhancers, applicant, general partner, principals, guarantors, and general contractor.

Satis.

11. Resumes and experience of applicant, general contractor, and management agent. Satis.

12. Credit authorizations; verifications of deposits and mortgage loans. Satis.

13. Management Agreement and Management Plan. Satis.

14. Firm commitment from the credit enhancer or private placement purchaser, if any. N/A

15. Firm commitment letter from the syndicator, if any. Satis.

16. Firm commitment letter(s) for any other financing sources. Satis.

17. Updated sources and uses of funds. Satis.

18. Draft construction draw schedule showing sources of funds during each month of the construction and lease‐up period.

Satis.

19. Fifteen‐year income, expense, and occupancy projection. Satis.

EXHIBIT B of 35

COMPLETENESS AND ISSUES CHECKLIST


FINAL REVIEW

REQUIRED ITEMS:

STATUS NOTE

Satis. / Unsatis.

20. Executed general construction contract with “not to exceed” costs. Satis.

21. HC ONLY: 15% of the total equity to be provided prior to or simultaneously with the closing of the construction financing.

Satis

22. Any additional items required by the credit underwriter. Satis.

NOTES AND DEVELOPER RESPONSES:

1. Receipt of a final satisfactory PCR in form and function that is acceptable to AmeriNat is a condition precedent to the MMRB closing. The report will need to conclude that all of the features and amenities committed by the Applicant in its application to Florida Housing are included in the plans and specifications.

EXHIBIT B of 35

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