FHA L OW I NCOME H OUSING T AX C REDIT P ILOT P ROGRAM SMAC Conference May 30,

Increase FHA’s Affordable Housing Production Implement HERA’s Pilot Program Mandate Through Accelerated Processing Compatible with Tax Credit Program Requirements Outcome: Complete FHA Loan Processing in 120 Days, from Application to Closing P ROGRAM O BJECTIVES & O UTCOME 2

All Have Tax Credit or Bond Cap Allocations (Either 4% or 9% Credits Accepted) Projects in All States are Now Eligible All Are Comparatively Low Risk Projects, Meeting Sustaining Occupancy Requirements Tenants remain in place except for temporary (30 day) relocation E LIGIBLE P ROJECTS 3

All Are Eligible for 223(f) Loan Program, With Certain Adaptations for The Pilot Program: Rehab Expenditures of up to $40,000/unit (unadjusted for locality) will be allowed For Mod Rehabs, 221(d)(4) Substantial Rehab Controls have been Adopted Standard 223(f) 12 month repair period can be Extended Note: Davis Bacon Wage Rates do not Apply E LIGIBLE P ROJECTS ( CONTINUED ) 4

Use MAP Lenders With Tax Credit Experience Use Senior Staff Only (supervisors) as Designated Underwriters at Each of the Pilot Hubs Revise Process – Not Linear with Multiple Experts, but all Review done by Designated Underwriter Limit Underwriting To Only one FHA Program Adapted for Use with Tax Credits: 223(f) P ROCESS C HANGES : H OW W E M AKE IT W ORK 5

Hold Optional Concept Meeting (Lender/Owner and Designated Underwriter) Prior to Application, to Confirm Project’s Pilot Suitability or Refer it to Another MAP Program Designate HQ Asset Management Point of Contact For: First Mortgage Prepayments Special Approvals and Waivers (e.g. Flex Sub) Facilitate Section 8 Processing HAP Contract Renewals Section 8 Rent Increases P ROCESS C HANGES : H OW W E M AKE IT W ORK ( CONTINUED ) 6

Defer Submission of Plans and Specs Until Just Prior to Closing Require Fewer Application Exhibits and Requirements (See Pilot’s Modified Exhibits Checklist) Use One-Stage, ‘Direct-to-Firm’ Commitment Applications – No Preliminary Application Needed Provide HQ Staff in MF Production to Track and Monitor Pilot Projects and Provide Ongoing Guidance P ROCESS C HANGES : H OW W E M AKE IT W ORK ( CONTINUED ) 7

Acquisition and/or Refinancing with Moderate Rehabilitation for Developments with Project based Rental Assistance Covering at Least 90% of Units Owner must ask Asset Management for any desired rent increase prior to the submission of the application for processing under the Pilot Owner must agree to enter into a new 20 year HAP Contract 3 T RANSACTION T YPES : A SSISTED H OUSING 8

Permanent Financing of Stabilized but Newly Built or Substantially Rehabilitated Projects Projects Require a Waiver of the 3 Year Rule (Property must meet requirements of ML , except owners will not have to show evidence that they have not been able to obtain alternative financing) Projects must meet sustaining occupancy/reserve requirements of 3 Year Rule Waiver Notice Equity Installments must Remain Outstanding up until time of FHA Loan Closing T RANSACTION T YPES : R ECENT C ONSTRUCTION OR R EHAB 9

Permanent Financing And Moderate Rehabilitation of Stabilized Tax Credit Projects Being Resyndicated with New Tax Credits Projects must have achieved stabilized occupancy (at least 85% or greater occupancy for previous 12 months ) T RANSACTION T YPES : R ESYNDICATION 10

In September 2012, 5 new Pilot Hubs added to Original 4 Pilot Hubs, Now including Atlanta, Boston, Chicago, Denver, Detroit, Fort Worth, LA, San Francisco and Seattle Geographic Expansion also allowed Projects from All States to be Included. Projects not Located in Pilot Hub Jurisdictions are Assigned to and Processed in the Pilot Hubs 12 new MAP Pilot Lenders Selected November 2012, bringing total to 32 Third Lender Selection Round Underway P ROGRESS AND N EXT S TEPS 11

Project Documentation posted in MAP page at: ogram_offices/housing/mfh/map/maphome /taxcredit Questions? Please contact: Lynn Wehrli (202) C ONTACT I NFORMATION 12