1. RAD APPLICATION LIVE Q&A October 12, 2012 Greg Byrne William Lavy Kathleen Foster

2. Agenda Welcome Why RAD? Potential Funding Sources 2013 Funding RAD Resources Update 4% LIHTC Demo Your Questions RAD L IVE Q&A 2

3. Objective: We’re here to help you, the PHAs, answer questions related to submitting a successful RAD application for the Initial Application window W ELCOME 3

4. 4 Ask questions! Here’s how: “Raise your hand” by clicking on the hand icon and the presenter will un-mute your line so you can ask your question live Note: To do this, you MUST call the dial-in number shown on your attendee control panel and input the audio PIN shown, which is unique to each attendee Email your questions to rad@hud.govrad@hud.gov Use the “Question” feature on your attendee control panel to type a question We strongly encourage “Raising Your Hand” as we cannot guarantee live responses to written questions Note: All questions received during the webcast will be posted to the RAD FAQ document available on www.radresource.net. www.radresource.net

5. Developer Fee Potential PHAs may earn a RAD Developer Fee to address costs associated with securing and administering debt/equity sources and overseeing the successful completion of rehab Non-LIHTC transactions- up to 10% of the total development budget (all hard costs and reasonable soft costs), less developer fee and reserves and less any acquisition costs in non arms- length acquisitions LIHTC transactions- up to 15% of total development costs, payable on the schedule allowed by the allocating agency and/or equity investor Note: In additional to earning the Developer Fee, PHAs may earn an annual Property Management fee; the fee percentage would be based on market conditions W HY RAD? 5

6. Developer Fee Potential, cont’d *The total development costs include the total development budget (all hard costs and reasonable soft costs), less developer fee and reserves and less any acquisition costs in non arms-length acquisitions **In a tax credit situation, the PHA may split the developer fee with the co-developer depending on terms of the arrangement W HY RAD? 6 Low Needs Project Medium Needs Project High Needs Project No. Units 100 Rehab/Unit $15,000$30,000$70,000 Total Development Costs* $1,500,000$3,000,000$7,000,000 PHA Developer Fee Earned (10%) $150,000$300,000$700,000 PHA Developer Fee Earned (15%)** $225,000$450,000$1,050,000

7. Efficiency Conversions RAD provides an opportunity to convert hard-to-market efficiency apartments to larger-sized units Tackle Long Term Vacancies RAD is a source of funding for returning these units to the rent roll Self-ESCO If the planned rehab will reduce energy consumption, the PHA can use the savings to increase NOI and raise more debt - essentially, creating a self-ESCO but without all the requirements under public housing rules W HY RAD? 7

8. RAD Permits Use of the Following : Low Income Housing Tax Credits 4% LIHTCs are typically available in most areas, and can often increase the amount of rehab that can be undertaken by 20% or more Ensure full funding of replacement reserves Often generate cash flow and/or the ability to service subordinated debt Operating Reserves PHAs can tap into operating reserves to help meet a capital need or fund replacement reserves If converting all units under ACC to RAD, there is no restriction on the amount of funds that can be used If not converting all units under ACC, PHAs can contribute up to three years of Operating Reserves without triggering a subsidy layering review P OTENTIAL S OURCES OF F UNDS 8

9. RAD Permits Use of the Following : Replacement Housing Factor (RHF) Funds PHAs may contribute current RHF funds to a project’s financing structure, or they may capitalize the remaining RHF funding stream RAD may be particularly opportune if a PHA is having difficulty obligating RHF funds because of other development challenges If converting all units under ACC, there is no restriction on the amount If not converting all units under ACC, a contribution of any RHF fund amount will trigger a subsidy layering review Capital Funds PHAs may contribute current Capital Funds If converting all units under ACC, there is no restriction on the amount If not converting all units under ACC, a contribution of any Capital Fund amount will trigger a subsidy layering review Up to $100k in public housing funds can be spent per project on predevelopment costs, subject to public housing procurement rules P OTENTIAL S OURCES OF F UNDS 9

10. 2013 F UNDING 10 2013 Appropriations (Millions)

11. 2013 F UNDING 11 Example: Impact on Contract Rents According to the RAD Application and RAD Inventory Assessment Tool, Lincoln Fields has a $700 contract rent (PUM)

12. Applications available for download on www.hud.gov/rad www.hud.gov/rad PHA Applications are customized by state New Version of PHA Application released on 10/4/12 Prerecorded webcasts available to walk you through completing an application RAD R ESOURCE U PDATE 12

13. Visit the RAD Resource Desk www.radresource.netwww.radresource.net Submit Questions; Search Review Newest FAQs: Reasonable rents EPCs Construction Loans Capital Needs Ranking Factor Questions and answers from the 10/5 RAD Q&A webcast have been incorporated into the FAQ Document RAD R ESOURCE U PDATE 13

14. RAD Physical Condition Assessment tool and instructions Posted on www.hud.gov/radwww.hud.gov/rad Not required in order to submit application Due within 90 days of CHAP Issuance Notice H 2012-20 & Mortgagee Letter 2012-20 Posted on www.hud.govwww.hud.gov Provides underwriting guidance for projects converting assistance under RAD RAD R ESOURCE U PDATE 14

15. Fatal Error… in error? Contact: rad@hud.gov RAD R ESOURCE U PDATE 15 Tip of the Week:

16. 4% Tax Credit Demo RAD R ESOURCE U PDATE 16

17. L IVE Q&A 17 Ask us questions! Here’s how: “Raise your hand” by clicking on the hand icon and the presenter will un-mute your line so you can ask your question live Note: To do this, you MUST call the dial-in number shown on your attendee control panel and input the audio PIN shown, which is unique to each attendee Email your questions to rad@hud.govrad@hud.gov Use the “Question” feature on your attendee control panel to type a question We strongly encourage “Raising Your Hand” as we cannot guarantee live responses to written questions Note: All questions received during the webcast will be posted to the RAD FAQ document available on www.radresource.net. www.radresource.net

18. U PCOMING L IVE Q&A W EBCASTS 18 October 19, 2012 – 2-3pm EST