1. The Institute for Professional and Executive Development, Inc. Annual Affordable Housing & Development Update: Opportunities in a Changing Economy Santa Monica, CA June 4-5, 2009 Monica Hilton Sussman, Esq. 401 9 th Street, NW, Suite 900 Washington, DC 20004 (202) 585-8833 msussman@nixonpeabody.com HUD UPDATE

2. LIHTC Market on life support Investors Gone – FannieMae, FreddieMac, Bank of America (accounted for majority of equity market) –Exchange Program –TCAP –State Equity funds –Many deals stuck without an equity investor

3. Renewed Interest in FHA –Pros Long term fixed rate non recourse Construction and permanent loan all in one

4. –Cons 2530 –Flags –APPS process REAC MORS Audited Financial Statements Asset Management Fees TPA process for Limited Partners to remove General Partners Davis Bacon Wages LIHTC equity pay in addressed by HUD and Congress

5. Back up of floating rate risk test with CAP or SWAP on mortgage rate Statutory limits in certain locations Processing time Prepayment penalties Lockouts Declining Markets PPCs

6. –Regulatory Agreement Issues Less for affordable transaction Bigger issue for market rate properties –use of project funds – timing of distributions – use of replacement reserves

7. –Innovations Use of FHA with –New Market Tax Credits –Historic Tax Credits (pass through lease structure)

8. New Opportunities in Stimulus and Omnibus Legislation –$4B Public Housing money –$2B Neighborhood Stabilization Program –Green funding –202 Prepay – Old 202s no savings needed if below 6% rate Tenants provided with enhanced vouchers EVs can become PBVs without regard to caps –MF PD – Use Agreement and repairs taken into account for value of note –318/215/213