1. 1 Loan Committee Mechanics and Lender Qualifications and Ongoing Performance Measures Eastern Lenders Conference Philadelphia, PA March 13 & 14, 2013

2. 2 Kelly Haines Tim Gruenes John Hartung Mary Walsh Jen Buhlman Eastern Lenders Conference Philadelphia, PA March 13 & 14, 2013

3. 3 Logistics: All 232 Firm Applications, Partial Payment of Claims, and Loan Modifications are voted on in a loan committee NC, SR, 241a, BR: Email at least Friday before LC asking for comments/questions from members. Others: Documents available 48 hours before LC on our Sharepoint site. Usually Tuesday, Wednesday, Thursday: Wednesday is only 223a7’s.

4. 4 Logistics: Presentation by Contractor/OHP Underwriter:  All loans except a7’s meeting certain criteria  Using Loan Committee Memorandum  Makes recommendation on issuance (including Special Conditions) or rejection and Troubled Status in iREMS  Supported by GTM (contract) or Workload Manager Consensus by Loan Committee Quorum is required to issue a Firm Commitment or Reject the project.

5. 5 Quorum Participants (3 or 4 depending upon loan type):  Director of ORCF  Director, Asset Management & Lender Relations  Director, Production  Director, Policy  Credit Risk Officer  Lender Relations Liaison

6. 6 Logistics: Others: OGC, OHP Appraiser, Environmental Reviewer, ORM Consensus by Loan Committee Quorum is required to issue a Firm Commitment or Reject the project. Loan Committee Memo contains an evaluation on the lender’s performance

7. 7 LENDER PERFORMANCE MEASURES

8. 8 Key Metrics Evaluated by ORCF Math Calculations Quality Control Responsiveness Due Diligence Program/Legal Issues 3 rd Party Review of Reports

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12. 12 OHP Approved Lender UW Updates Section 232 (New Construction/Substantial Rehab), 232/223f and 241a all count as loans that a trainee can include toward seeking OHP Section 232 Underwriter Approval SUBMIT LENDER QUALITY AND MONITORING DIVISION MORTGAGEE CERTIFICATION – EXHIBIT D!! CERTIFICATION BY APPROVED 232 LENDER THAT IT WILL ONLY USE OHP APPROVED UNDERWRITERS. ARE YOU UP TO DATE???

13. 13 Lender/UW Approval Review and approval or disapproval takes approximately 30 – 45 days. Decisions will be provided in writing signed by OHP official. However, the approval process is handled under FHA Lender Quality & Monitoring Div. (Contact: Terry Clark 202-402-2663 Terry.W.Clark@hud.gov). Terry.W.Clark@hud.gov Any problems with responsiveness, contact Mary Walsh, ORCF Lender Relations (817-978- 5807 or Mary.V.Walsh@hud.gov)Mary.V.Walsh@hud.gov

14. 14 RECURRING ISSUES DISCUSSED AT LOAN COMMITTEE

15. 15 Projects with New Units Strength of participants:  Experience of participants with particular proposed housing (rent up and quality of care)  Financial Wherewithal (ability to carry project if necessary) Market Assumptions used for NOI Estimate reasonable? Assumptions used in Initial Operating Deficit calculation reasonable?

16. 16 Existing Projects Strength of participants:  Experience of participants with project and others they operate (including quality of care)  Financial Wherewithal (ability to carry project if necessary) Loan Sizing/Value:  Prospective NOI  Trends in Occupancy, NOI, Quality Mix Quality of Care at subject – possible need for 3 rd Party Risk Management or an internal Risk Management Plan?  12/19/12 Email Blast

17. 17 Existing Projects Master Leases Term Extensions (a7’s) Compliance issues with existing FHA Insurance (DEC, REAC, etc.)

18. 18 Questions