1. Bonds & Building a Proforma Presented by:
      David Danenfelzer, Senior Director
Texas State Affordable Housing Corporation

2. Bonds for Housing Just like a loan, but with some key differences.
You need an Issuer who can make the bonds tax exempt.
Investors will accept a bit less in interest rate because the income on bonds is tax exempt.
Private Activity Bonds allow you to apply for 4% housing tax credits (not 9%).
Bonds can be issued as short term securities, so you can take advantage of other federally backed mortgage products and grants to lower debt expenses.

3. Bonds for Housing Who can issue bonds? Housing Finance Corporations
Public Housing Agencies
Public Facilities Corporations
Cities and Counties

4. Bonds for Housing

5. Building a Proforma PRO FOR·MA - prō ˈfôrmə/,
Adjective - done or produced as a matter of form.
"Pro forma reports“ denoting a standard document or form, especially an invoice sent in advance of or with goods supplied. “Of a financial statement” showing potential or expected income, costs, assets, or liabilities, especially in relation to some planned or expected act or situation.
Adverb - as a matter of form or politeness.
"he nodded to him pro forma“
Noun - a standard document, form or financial statement.

6. Building a Pro forma Costs Income Expenses Acquisition Construction
Soft costs
Financing costs
etc.
Income
Rents
Utilities
Income limits
Vacancy rates
etc.
Expenses
Management
Maintenance
Utilities
Ins & Taxes
etc.

7. How do I build my Pro Forma? You don’t have to build your own!
Building a Pro Forma
How do I build my Pro Forma?
You don’t have to build your own!
Use models from your key funders!
USDA
TDHCA
HUD
These will be the best places to start!

8. If you really need your own Pro Forma?
Building a Pro Forma
If you really need your own Pro Forma?
Keep it simple so not only you can understand it!
Be sure it can test different scenarios and assumptions!
Be sure you can share it with others!
Test it over and over until you break it!
Then fix it.

9. Building a Proforma What should your Pro Forma tell you?
Who am I helping (AMI)?
How much can I borrow?
Where can I cut costs?
Can I improve income through unit size or type?
What are my assumptions and how far off from other’s estimates am I?
Are my costs for construction reasonable?

10. Building a Proforma Last Piece of Advice –
Just because you use a consultant doesn’t mean you don’t need to understand the Pro Forma.
Underwriters and Funders know you can’t know everything, but they want to you understand what you give them.

11. Questions?