11/12/13 RAD FOR MOD REHAB PROPERTIES MTM Consulting LLC

Mod Rehab Transactions in Massachusetts MTM Consulting LLC RAD also provides assistance for MR deals, but its utility is untested here in MA. Limited personal experience – 2 applications pending and one to be filed by year’s end. We know we can make financing work for two; still testing whether we can make the third work. All filed under first component; second component currently closed.

ALLOWS FOR CONVERSION OF ONE YEAR MR CONTRACT TO LONG-TERM SECTION 8 CONTRACT BENEFITS Consolidate multiple contracts Enhance access to capital Owners can request portfolio award Multi-phase awards possible IMPORTANT CONSIDERATIONS Must address capital needs Must provide for resident mobility over time Not applicable to SRO Mod Rehab MTM Consulting LLC

TWO PATHS – if rejected under one can apply under the other FIRST COMPONENT Rents set at current levels Will require outside resources to address capital needs Must provide financing plan and letters of interest Choice of PBV or PBRA Currently over-enrolled; HUD has requested increased authority MTM Consulting LLC

PBVPBRA AdministratorLocal PHA thru HUD’s Office of Public and Indian Housing HUD’s Office of Housing Governing regulations24 CFR Part CFR Part 880 Initial rentsLower of reasonable, 110% of FMR; owner request. Can’t exceed current. Lower of current or 120% of FMR (but up to 150% if justified by market.) no RCS required if under 120%. Rent adjustmentsOCAF, but no more than unassisted. Can be reduced if FMRs drop by more than 5%. OCAF annually; no RCS required. After initial term, subject to MAHRAA. Wait listPHA administersOwner administers Contract length15 (up to 20) years20 years Choice mobility PHA must offer Choice Mobility after 12 months. Requires agreement with PHA to provide Choice Mobility after 24 months. HUD can exempt 10% of all RAD units from Choice Mobility Resident rightsNo involuntary displacement; right to return No rescreening of tenants No involuntary displacement or rescreening of tenants Year end audit required No LD going forward OtherCan cover 100% of units so long as at least 50% qualify for exception as elderly, disabled or families with supportive services. HUD approval of future refi No service requirement Site and neighborhood standards apply (see Appendix III) HUD approval of future refi MTM Consulting LLC

SECOND COMPONENT PBV in lieu of EV assistance Rents at up to 110% FMR (or exception standard if applicable), if reasonable PBV only 15-year HAP Must provide financing plan MTM Consulting LLC

SECOND COMPONENT, cont’d Services required with more than 50% PBV Residents must recertify HQS inspections required Funded from TPV pool; HUD may suspend Notice if there is insufficient funding Currently closed; Congressional reauthorization needed MTM Consulting LLC

WRAP UP First component is easier and more flexible if you can make the deal work with no rent increase. CONSIDERATIONS: What are your rents relative to market? What is your tenant composition? Will you have to provide services to maximize PBV? Are you able to provide services? Do you like your current administrator and want to continue that relationship? Or is this an opportunity get new administration? Are you willing to transfer your wait list to the PHA or is it critical that you maintain control over it? MTM Consulting LLC

MTM CONSULTING LLC Maria T. Maffei