Targeted Affordable Housing: Tapping into Tax-Exempt Financing NCSHA 2016 David Leopold, Vice President, Targeted Affordable Sales & Investments

No longer new execution for 4% LIHTC, over $1 billion committed Tax-Exempt Loan No longer new execution for 4% LIHTC, over $1 billion committed Documented as a loan instead of a bond Private placement structure with back to back funding Credit parameters same as our traditional bond credit enhancement: 1.15 DCR / 90% LTV Terms up to 18 years Immediate funding and forward commitments executions available Both fixed and floating rates available

Tax-Exempt Bond Placement Direct Placement of Tax-Exempt Loan Side-by-Side Comparison: Tax-Exempt Bond Placement and Direct Placement of Tax-Exempt Loan Bond Purchaser Government Entity as Issuer Borrower $ Tax-Exempt Bond Placement Tax Exempt Bonds (payable solely from “Borrower Note”) Purchase Price (pursuant to “Bond Purchase Agreement”) Loan to Borrower (pursuant to “Loan Agreement”) Direct Placement of Tax-Exempt Loan Borrower Note Funding Lender Governmental Lender Government Lender Note (payable solely from “Borrower Note”) (Governed by “Funding Loan Agreement”) Funding Loan to City as “Governmental Lender” Borrower Note

More efficient execution Tax-Exempt Loan Freddie Mac is bringing capital market strength to 4% LIHTC financing through securitization. Aggressive rates and significant cost savings compared to traditional publically offered bond credit enhancements Less documentation More efficient execution

Bond Products Comparison Chart Tax-Exempt Loan More efficient, more cost effective alternative to publically offered tax-exempt bond credit enhancement Private placement loan product with fewer documents and participants Immediate and Forward Executions available Fixed and Variable rate executions available Min. 1.15 DCR Max. 90% LTV Terms up to 18 years Max amortization of 35 years Minimum 10 years prepayment protection Credit Enhancement for Direct Placement Bonds Private placement bond product with fewer documents and participants Terms up to 15 years Minimum 7 years prepayment protection Cash Loan with Short Term Bonds Cash loan, secured by the property, that provides collateral for tax-exempt bonds with 4% LIHTC Bonds paid off when units placed in service. Cash loan remains in place. Cash loan coupled with privately placement bonds. Yield maintenance followed by defeasance Bond Credit Enhancement with 4% LIHTC Traditional, publicly offered bond credit enhancement Public bond offering with multiple participants Terms up to 35 years Fee Maintenance is required Bond Credit Enhancement with Other Affordability Components New or replacement credit facility for tax-exempt housing bonds Public offering or private placement bond executions available. Min. 1.25 DCR* Max. 85% LTV* Terms up to 30 years Max amortization of 30 years *Higher leverage may be available in Tier 1 and Tier 2 Markets.

Bridge to Resyndication New efficient 24-month acquisition bridge for LIHTC eligible property in anticipation of resyndication For experienced sponsors in markets with available bond cap and predictable 4% LIHTC allocation process Max Sizing: 1.15 DCR, 85% LTV Floating rate, no hedge requirement Allows for rate lock of TEL or other Freddie Mac perm mortgage to coincide with LIHTC closing

Vice President, Affordable Sales & Investments Freddie Mac Multifamily David D. Leopold Vice President, Affordable Sales & Investments Freddie Mac Multifamily 703-714-2655 David_Leopold@freddiemac.com

Fannie Mae Multifamily Affordable Housing Presentation to NCSHA Month dd, yyyy 4/27/2017 Fannie Mae Multifamily Affordable Housing Presentation to NCSHA January 13, 2015 Presentation Title Presentation Title Goes Here 8

Eclipsing the Competition 4/27/2017 Eclipsing the Competition Experienced and Dedicated Affordable Team Fannie Mae has shown its commitment to affordable housing by creating a team that focuses solely on affordable housing – this team encompasses many business divisions including credit, legal, product development and pricing A dedicated team allows for a consistent approach to the DUS Lenders across the platform A dedicated team allows for a high level of calibration across the team due to the geographic diversity of the team A team dedicated to addressing product developments as market dynamics evolve Single MBS Structure Delivers Unparalleled Flexibility Allows for increased flexibility to structure loans more creatively. Since our loans do not have to “fit” into a large securitized pool, the unique aspects of the transaction can be tailor-made for each MBS issuance. Presentation Title Goes Here 9

Eclipsing the Competition - Continued 4/27/2017 Eclipsing the Competition - Continued DUS Lender Network Delivers Excellent Service Strong relationship management at origination through the life-of-the-loan Since Lender controls the loan process, the deals can close faster which translates to certainty, speed and ease of execution Lender has delegation to underwrite transactions in accordance with Fannie Mae guidelines Risk Sharing Model Aligns Interests Risk Sharing means interests are aligned and drives strong credit quality Competitive Pricing and Terms Win Business Asset quality, financial strength of the sponsor and market dynamics drive the approach Added consideration for deeper affordability, properties with 50 or less units and Green Who is the competition? Freddie Mac, FHA and Local Banks Quality Information on competing bids Borrower’s goal – What are they trying to obtain? Complete submissions – Allows quicker turnaround Expedited Response time Streamlining with the soft quote process Hard quote process requires more in depth review initially, but allows for delegation of final underwriting back to the lender. Explain that we will have an initial pre-review period as our organization begin to know each other and align from a credit culture perspective. The more volume we see, the faster this process happens to allow us to delegate more back to you all. Presentation Title Goes Here

Fannie Mae is Committed to Affordable Multifamily Month Year Fannie Mae is Committed to Affordable Multifamily MAH Production In Billions 2011 2012 2013 2014 Total MF $24 $34 $29 MAH $2.3 $3.8 $2.6 2015 overall volume for all Multifamily is $42.3 billion Through 3Q only Consistent. Commitment to the business. Despite new market entrants in the space and increased competitive forces, we have maintained the leading position in affordable housing. And we will continue to ensure that we are focused on what it takes to continue to be the market leader into the future. So that is how we are doing. Now let’s talk about how we are doing it. Presentation Title Goes Here

Fannie Mae is in every market, every day Month Year 4/27/2017 Fannie Mae is in every market, every day Very Low Income <=50%AMI Low Income <=60% AMI 80 – 20 Mixed Income Fannie Mae MAH pursues business with recorded affordability restrictions Fannie Mae offers the most flexibility with our single-asset security Fixed and Floating Rate Options No minimum or maximum loan size and terms 5-30 yrs. Taxable and Tax-Exempt Solutions This slide provides you with a very high level overview of the types of deals that are available in the Fannie Mae MAH platform. With respect to flexibility, I want to emphasize that we allow loan terms from 5-30 years. Our single asset security allows us to match specific deal terms to a specific investor rather than having to pool a bunch of like loans for securitization later. With Chase, we believe that our best initial opportunities together are going to be for fixed rate preservation deals so the next slides walk us through more detail on this product set. [note to presenter: Do not emphasize Floating or Tax-Exempt. Do not emphasize Substantial Rehab. ] Fannie Mae offers the fastest and most reliable execution for all financing types Acquisitions and Refinance Moderate and Substantial Rehab Preservation Presentation Title Goes Here Presentation Title Goes Here 12

Month Year Choose the Fannie Mae Tax Exempt Bond Financing Solution that Works for You! Fannie Mae offers very competitive pricing with the most flexibility, as well as the fastest and most reliable execution. Presentation Title Goes Here

MBS as Tax Exempt Bond Collateral (M.TEB) Month Year MBS as Tax Exempt Bond Collateral (M.TEB) Obtain a lower interest rate and significant savings over the life of the loan when combining the ease of our MBS execution with the benefit of tax exempt bonds. Benefits Close faster with our unique delegated model Available for fixed-rate and variable-rate bonds 20-25 bps better pricing than traditional bond credit enhancement Interest-only is available Fannie Mae guaranteed direct pass through of principal and interest is more attractive to bond buyers No minimum or maximum loan size Competitive Advantage Loan terms up to 30 years Declining prepayment options OR yield maintenance LTV’s up to 90% Available for taxable as well as tax-exempt bonds No master or special servicer with Life-of-loan servicing Delegated underwriting model provides certainty of execution Wide investor base offering attractive pricing due to the appeal of the MBS The industry’s most experienced Affordable Housing experts Presentation Title Goes Here

Inaugural Fannie Mae M.TEB Structure Month Year Inaugural Fannie Mae M.TEB Structure $21,750,000 Illinois Housing Development Authority – Fullerton Court Apartments Development Type: Acq/Rehab Closing Date: January 26, 2015 Bond Rating: Moody’s “Aaa” Term: Single 16 year Bond Maturity Bond Rate: 3.00% Bond Security: Fannie Mae MBS Underwriter: RBC Capital Markets Investors: CRA Investors, Insurance Companies and Money Managers Redemption: “Yield Maintenance” 1st 10 years; Par Call Thereafter Structure Savings: Estimated Savings of 25-30 BP over traditional Fannie Mae Credit Enhancement Structure Estimated Savings of 5 Basis Points over Taxable Conventional Fannie Mae MBS Borrower previously financed transactions using a Fannie Mae taxable conventional MBS for permanent financing and short term tax exempt cash collateralized bond to qualify development for 4% LIHTC. For a larger project – there was a desire to move away from the “dual transaction structure…” Fannie Mae credit structures were examined. The M.TEB structure was selected with several modifications to previous transactions. MBS to be purchased shortly after bond closing Simple single maturity monthly pay bond structure Rate on MBS same as Bond Rate Traditional rating agency cash flows not required due to match of MBS payments to bond payments MBS payments passed through to bondholders the next business day following receipt by Trustee Disclosure benefits for bond purchasers as information on Fannie Mae MBS pool accessible on Fannie Mae website and Bloomberg Structure expected to attract “cross-over” buyers from MBS market as well as traditional tax exempt bond and CRA investors Pricing expected to more closely track spreads to 10 Year Tsy similar to conventional MBS pricing Source: RBC Capital Markets Presentation Title Goes Here

Flexible Application of M.TEB Structure Month Year Flexible Application of M.TEB Structure New Construction Reduced Occupancy Affordable Rehabilitation (ROAR) M.TEB – Variable Rate with Structured ARM Construction loan or letter of credit required No Construction loan needed; rehab costs of up to $120,000 /unit Term of 10 years (up to 18 years); LTV of 75% Permanent bond pricing locked at issuance Minimum occupancy of 50% and minimum DSC of 1.0% (interest-only) Interest rate is established as the applicable index of 1 or 3 month LIBOR plus the Margin Monthly payment of interest during construction phase MBS Structure modified to provide Fannie Mae direct credit enhancement during rehab period which will convert to MBS upon completion of rehab Interest Rate Cap Required for a minimum of 5 years Upon Conversion, MBS will be delivered to the Trustee and secure the Bonds Increased leverage opportunities when underwritten to as-improved rents Varying Prepayment Options – One year lock-out followed by prepayment premiums starting at 1-4% During the Construction phase, Borrower will pay debt service on the bonds and construction loan or letter of credit Interest rate savings similar to full MBS Tax Exempt Pass Through Bond execution Presentation Title Goes Here

Index Bonds Credit Enhancement of variable rate tax-exempt Month Year Index Bonds Credit Enhancement of variable rate tax-exempt Index Bonds or Floating Rate Notes (FRNs) with no put option, liquidity support or remarketing costs. Key Terms and Benefits 10-30 year terms Amortization up to 35 years LTV up to 85% Minimum DSCR of 1.00x at the Underwriting Rate Interest rate cap period – 5 years New money issues, refundings or credit substitutions Marshall Field Garden Apartments 2015 Illinois Housing Development Authority – Variable Rate Issue $102,000,000 10 year term SIFMA Index + 100 bps 4% LIHTC – Acquisition & Rehab Katy Perry - ROAR All property types, not just LIHTC Flexibility with YM/Prepayment vs. FRE TEL – min 10 yrs. For Mod Rehab that requires greater flexibility Allows tenant relocation Begins as a cash loan before stabilization, then securitized Rehab costs between typically up to $120,000 per unit Quoted 6 transactions to-date for $77MM from 3 Lenders and 4 Sponsors; first close in January 2016. Key Benefits: One loan for construction and permanent financing During rehab, allows: occupancy minimum of 50% interest-only DSCR minimum of 1.0x (IO basis) or 0.75x amortizing Fannie Mae offers a SIFMA Floating Rate Note Product that may be applicable on certain multifamily financings. Structure would typically not be ideal for a tax credit development given the term is less than 15 years. However, the relatively low leverage of the bond issue and financial strength of the borrower provided comfort to the tax credit investor. RBC Capital Markets recently discussed a derivation of this structure for a proposed new construction development. RBC proposed the following: Fannie Mae SIFMA Floating Rate Notes with a term of 3-10 years; A bank would provide a construction loan to the borrower at closing. (A letter of credit could also be used, but Fannie Mae downgrade requirements may favor a construction loan); Fannie Mae would credit enhance the bonds from bond closing to simplify the credit analysis for investors and the bonds would qualify for a “Aaa” rating. Fannie’s credit enhancement fee would be reduced during the construction phase when the Bank’s loan proceeds will cash-collateralize Fannie Mae’s credit enhancement; The Fannie Mae Credit Enhancement will secure principal and interest on the bonds including the balloon payment. A SIFMA interest rate cap is obtained to protect against rising rates. Presentation Title Goes Here

Index Bonds: Pricing Considerations Month Year Index Bonds: Pricing Considerations Pricing of Floating Rate Notes is structured as a “spread” to the SIFMA or LIBOR index Pricing spreads change over time similar to the way credit spreads change In the current environment, investors generally do not want maturities beyond seven years Current pricing is approximately SIFMA + 85-90 basis points in high demand states and SIFMA + 90-100 basis points in other states Higher Demand Tighter Spreads Large volume of high net worth investors or high income taxes = As you saw on the Marshall Field’s example, pricing for Initial Acquisition/Rehab Fannie Mae 10 year SIFMA Floating Rate Note (“FRN”) in April, 2015 was SIFMA + 100 basis points FRNs issued in states with a large volume of high net worth investors and/or income taxes will trade at tightest spreads. Tax exempt bonds issued in states with income tax are generally exempt from the tax making them more valuable. The following are examples of high demand states: High Demand States New York California Connecticut New Jersey Maryland Virginia North Carolina Georgia Presentation Title Goes Here

Reduced Occupancy Affordable Rehab (ROAR) Month Year Reduced Occupancy Affordable Rehab (ROAR) Immediate, permanent financing for major rehab allowing tenant displacement; no separate construction loan. Benefits Interest-only payments during the renovation period Proceeds are fully funded at closing Up to 90% of “as stabilized” LTV during the rehab period During rehab: Minimum occupancy of 50% Minimum DSCR of 1.0x (interest-only basis) Rehab costs up to $120,000 per unit Increased leverage opportunities when underwritten to as-improved rents. Competitive Advantage One loan solution for construction and permanent financing Initial cash execution and our single asset security allow for flexible loan terms and prepayment structures that can be tailored for any transaction Competitive pricing and terms Experienced, dedicated affordable team partners with you to provide expert solutions Katy Perry - ROAR For Mod Rehab that requires greater flexibility Allows tenant relocation Begins as a cash loan before stabilization, then securitized Rehab costs between typically up to $120,000 per unit Quoted 6 transactions to-date for $77MM from 3 Lenders and 4 Sponsors; first close in January 2016. Key Benefits: One loan for construction and permanent financing During rehab, allows: occupancy minimum of 50% interest-only DSCR minimum of 1.0x (IO basis) or 0.75x amortizing Presentation Title Goes Here

Reduced Occupancy Affordable Rehab (ROAR) Key Terms Month Year Reduced Occupancy Affordable Rehab (ROAR) Key Terms Terms Eligible Properties Stabilized MAH; rehab range typically $40K-$120K/unit Eligible Sponsors Strong sponsors with demonstrated tenant-in-place rehab track record LTV Up to 90% “as stabilized” Term 5-30 years Amortization Up to 35 years Rehab Period 12-18 months Minimum Loan Size $5 million Loan Disbursement Fully funded at closing; rehab funds escrowed by Lender Presentation Title Goes Here

Tabaré Borbón Customer Account Manager Multifamily Affordable Housing tabare_borbon@fanniemae.com Visit the new Multifamily website today! www.fanniemae.com/multifamily/index