1. CASE STUDIES: CURRENT MULTIFAMILY BOND STRUCTURES Dan Dill, Managing Director Stifel, Nicolaus & Company, Incorporated

2. M ULTIFAMILY B OND S TRUCTURES Bond Structures available for the Acquisition or Construction of Multifamily Housing Private activity bond 4% LIHTC deals and 501(c)3 Bond deals Multiple financing structures available for each bond type The capital stack for most 4% LIHTC deals will include hard debt, equity, and soft funds – especially for new construction Historically low interest rates and historically high tax credit pricing Single property and multiple property pool structures available The history and variety of 4% Bond structures is extensive RAD deal capital stacks will be similar to the 4% deals shown

3. CASE STUDY 1: MULTIPLE FUNDING SOURCES Cypress Springs Apartments – 4% Tax Credits, FHA 221(d)(4) insured mortgage, multiple “soft” funds

4. N EW C ONSTRUCTION : FHA 221( D )(4) AND 4% C REDITS How do you cover shortfalls in financing Affordable Housing? Problem Given rent restrictions there is not enough cash flow to provide the amount of proceeds that can be generated in traditional debt & equity structures used in market rate developments. 9% tax credits provide the largest equity investment for low income properties, but there are a limited amount of 9% credits available. Solution 4% Low Income Housing Tax Credits facilitate a financing mechanism to provide a substantial amount of the equity needed to develop affordable housing. 4% Tax Credits combined with an FHA 221(d)(4) insured mortgage loan provide most but not all of the leverage and equity necessary to develop new affordable housing. Multiple sources of “soft” money are often needed to cover the gaps.

5. N EW C ONSTRUCTION : FHA 221( D )(4) AND 4% C REDITS Achieving the Lowest Interest Rate To receive the 4% Tax Credits, at least 50% of the Aggregate Basis of a project must be financed with Tax Exempt Bonds. In today’s credit market, long term conventional FHA loans charge a lower interest rate then a Tax Exempt Bond secured by a GNMA security. The short term collateralized bonds: significantly reduce negative arbitrage achieve the lowest cost of borrowing meet the requirements to receive the 4% credits.

6. N EW C ONSTRUCTION : FHA 221( D )(4) AND 4% C REDITS Cypress Springs Apartments Key Project Information: Location: Baton Rouge, LA approximately 15 minutes north of downtown Baton Rouge Units: 144 Rent Restrictions: 100% of the units at 60% AMI Approximate Construction Period: 15 months

7. N EW C ONSTRUCTION : FHA 221( D )(4) AND 4% C REDITS Key Participants: Developer: Community Development, Inc. Tax Credit Syndicator: WNC Associates, Inc. Placement Agent: Stifel – Merchant Capital Division FHA Lender: Berkadia Commercial Mortgage LLC Issuer: Louisiana Housing Corporation Bond Counsel: Foley & Judell, L.L.P. Borrower’s Counsel: Coats Rose Placement Agent’s Counsel: Sidley Austin LLP Cypress Springs Apartments

8. N EW C ONSTRUCTION : FHA 221( D )(4) AND 4% C REDITS Bond Structure Key Terms of the Bond Issue: Closing Date: February 25 th, 2015 Maturity Date: September 1, 2016 Optional Prepayment: 12 months at Par Rating: S&P A-1+ eligible Interest Rate: 70bps

9. N EW C ONSTRUCTION : FHA 221( D )(4) AND 4% C REDITS Sources & Uses

10. CASE STUDY 2: ACQUISITION REHAB WHPC Southern Bond Pool – 4% Tax Credits, 9 Properties, Fannie Mae Guaranteed Loan

11. A CQUISITION R EHAB : F ANNIE M AE L OAN AND 4% C REDITS How do you acquire and rehabilitate small properties? Problem Properties that have a smaller number of units or have relatively low values can be difficult to finance using 4% LIHTC and tax exempt bonds because of the high fixed costs. Tax Credit syndicators usually do not have interest unless the potential equity investment is off a sufficient size. Solution In a pooled structure legal fees and other fixed costs are typically lower than if the properties were financed individually. By creating a portfolio of smaller properties, the size of the equity investment is sufficient to attract investor interest. The loan is structured with one mortgage (as opposed to 9 separate mortgages). This structured allowed for one tax credit partnership and significantly decreased reporting requirements and costs.

12. A CQUISITION R EHAB : F ANNIE M AE L OAN AND 4% C REDITS WHPC Southern Bond Pool Key Project Information: Location: Multiple locations throughout southern Wisconsin Number of Properties: 9 Units: 537 Rent Subsidy: Approximately 78% of the units are covered by Section 8 Rent Restrictions: Varies by property Construction Period: Approximately 9 months

13. A CQUISITION R EHAB : F ANNIE M AE L OAN AND 4% C REDITS WHPC Southern Bond Pool Key Participants: Developer: Wisconsin Housing Preservation Corp Tax Credit Syndicator: Boston Capital Bond Underwriter: Stifel – Merchant Capital Division Fannie Mae Lender: Centerline Capital Issuer: Public Finance Authority Bond Counsel: Jones Walker LLP Underwriters Counsel: Sidley Austin LLP Issuer Counsel: Eichner Norris & Neumann PLLC

14. A CQUISITION R EHAB : F ANNIE M AE L OAN AND 4% C REDITS Bond Structure Key Terms of the Bond Issue: Closing Date: April 30 th, 2014 Maturity Date: April 1, 2017 Initial Mandatory Tender Date: April 1, 2015 Optional Prepayment: 6 months at Par Rating: S&P A-1+ Interest Rate: 35bps

15. A CQUISITION R EHAB : F ANNIE M AE L OAN AND 4% C REDITS Key Loan Terms Key Terms of the Fannie Mae Loan: Term: 192 months (16 years) Amortization: 35 year Interest Rate: 5.19% Maximum LTV: 90% Minimum DSC: 1.15x The loan is structured with one mortgage (as opposed to 9 separate mortgages). This structured allowed for one tax credit partnership and significantly decreased reporting requirements and costs.

16. A CQUISITION R EHAB : F ANNIE M AE L OAN AND 4% C REDITS Sources & Uses

17. CASE STUDY 3: NEW CONSTRUCTION PRIVATE PLACEMENT The Waters at Sunrise – 4% Tax Credits, Private Placement, New Construction in Texas

18. N EW C ONSTRUCTION : P RIVATE P LACEMENT & 4% C REDITS How do you finance New Construction in Texas? Problem There is a significant shortage of affordable housing in certain fast growing markets in Texas Limited availability of 9% tax credits cannot meet the need Land purchase and construction contracts may require a quick closing Solution Work closely with local government officials to identify any concerns and find mutually agreeable solutions Use 4% tax credit financing with “soft funds” to fill the financing gaps Structure a private placement with a much shorter financing time frame than agency financing

19. N EW C ONSTRUCTION : P RIVATE P LACEMENT & 4% C REDITS Waters at Sunrise Key Project Information: Location: Round Rock, Texas Number of Properties: One – New Construction Units: 300 Rent Restrictions: 80 % at 60% AMI or less, 20% at market Construction Period: 18 months

20. N EW C ONSTRUCTION : P RIVATE P LACEMENT & 4% C REDITS Waters at Sunrise Key Participants: Borrower: Atlantic Housing Foundation Tax Credit Syndicator – City Real Estate Advisors, Inc. Bond Underwriter: Stifel – Merchant Capital Division Construction Lender: JP Morgan Chase, NA Issuer: Capital Area Housing Finance Corporation Borrower Real Estate Counsel: Locke Lord LLP Syndicator’s Counsel – Applegate & Thome-Thomsen Bond Counsel: Chapman and Cutler LLP Underwriter’s Counsel: Sidley Austin LLP Construction Lender’s Counsel – Greenberg Traurig, LLP Issuer Co-Financial Advisor: First Southwest Issuer Co-Financial Advisor: Ramirez & Co, Inc.

21. N EW C ONSTRUCTION : P RIVATE P LACEMENT & 4% C REDITS Bond Structure Key Terms of the Bond Issue: Closing Date: May 6, 2015 Maturity Date: May I, 2055 Mandatory Tender: 17 years Amortization: 40 years Optional Prepayment: May 1, 2031 at par Rating: Non Rated Interest Rate: SIFMA plus 2.35% during the first 18 months then 5.05%

22. N EW C ONSTRUCTION : P RIVATE P LACEMENT & 4% C REDITS Sources & Uses

23. CASE STUDY 4: ACQUISITION/MODERATE REHAB- 501(C)3BONDS Trinity Affordable Housing Corporation – 5 properties, S&P Rated Pool

24. 501( C )3 B ONDS – A CQUISITION /M ODERATE R EHAB How does a 501(c)3 acquire multiple properties in multiple states? Problem What is the best financing structure for a 501(c)3 to maximize proceeds for the acquisition and rehabilitation of a pool of Section 8 subsidized properties? How do you finance multiple small properties in multiple states? Solution Structure a cross collateralized pool financing using 501(c)3 Bonds that are rated under the Standard & Poor’s Affordable Housing Rating criteria Issue the bonds through an Issuer such as Public Finance Authority that has the ability to issue bonds for properties located in multiple states

25. 501( C )3 B ONDS – A CQUISITION /M ODERATE R EHAB Trinity Affordable Housing Key Project Information: Location: Various sites in Iowa and Missouri Number of Properties: 5 Units: 349 Rent Subsidy: 100% Section 8 HAP contracts

26. 501( C )3 B ONDS – A CQUISITION /M ODERATE R EHAB Trinity Affordable Housing Key Participants: Borrower: Trinity Affordable Housing Corporation Borrower’s Real Estate Counsel: Copley Roth & Wilson Borrower’s 501c (3) Counsel: Peter B. Nagel, PC Borrower’s HUD Counsel: Klein Hornig LLP Bond Underwriter: Stifel – Merchant Capital Division Issuer: Public Finance Authority Bond Counsel: Orrick, Herrington & Sutcliffe LLP Underwriters Counsel: Sidley Austin LLP Issuer Counsel: Eichner Norris & Neumann PLLC

27. 501( C )3 B ONDS – A CQUISITION /M ODERATE R EHAB Bond Structure Key Terms of the S&P Rated Bond Issue: Closing Date: June 30, 20105 Maturity Date: July 1, 2050 Optional Prepayment: July 1, 2025 at par Rating: S&P A Bond Structure – Term Bonds maturing on July1, 2023 (taxable), July 1, 2035, July 1, 2040, and July 1, 2050 Key Terms Maturity: July 1, 2050 Amortization: 35 years fully amortizing Average Interest Rate: 4.88% Issue size: $16,960,000

28. H EADING Sources and Uses

29. NON AGENCY KEY FINANCING CRITERIA Private Placements S&P Rated Transactions

30. P RIVATE P LACEMENT Private Placement Stifel has placed bonds with multiple private placement bond purchasers. We would typically solicit proposals/term sheets from 3 to 6 potential private placement purchasers. Underwriting parameters include 1.15x to 1.25x debt service coverage 75% to 85% loan to value 35 to 40 year amortization (possibly with a shorter term) Non-recourse loans Standard Replacement Reserves (approximately $300 per unit) Debt Service Reserves – Zero to one year (depending on purchaser) Operating Deficit Reserves (30 to 90 days) Construction Letter of Credit may be required Variable rate bonds during construction may be possible Draw down bonds may be possible Up to 3 years interest only Interest rates in the 5% to 6% range Can close in 120 to 180 days

31. S&P R ATED Standard & Poor’s Rated Transactions Standard & Poor’s currently rates unenhanced affordable housing projects investment grade, typically in the “A” category. Underwriting assumptions include: 1.20x DSC (HAP properties); 1.40x DSC (non-HAP properties) Vacancy loss based on historical trends Standard & Poor’s will underwrite Section 8 rent “overhang” Operating expense savings accepted, but must be validated Repair and replacement reserves based on capital needs assessment report No minimum rehab per unit

32. S&P R ATED Standard & Poor’s Rated Transactions Financing observations include: No credit enhancement or mortgage insurance Six month Debt Service Reserve for HAP properties, One year Debt Service Reserve for non-HAP properties 35-year amortization 35-year term 10-year par call 35-year interest rate currently approximately 4.75% Financial disclosures include annual audit and occupancy data 75-90 days for closing 100% loan-to-value Non-recourse

33. CONTACT INFORMATION Dan Dill, Managing Director dilld@stifel.com 425-455-8122