1. FHA Multifamily Underwriter Training May 29, 2013 Southeast Mortgagee Advisory Council Valuation

2. Distinctive "must know" Differences Effective Date of Value Market Rents Vacancy - Retail or Commercial Space Operating Expenses Replacement Reserves Critical and Non-Critical Repairs Land Value Forms Discounted Cash Flow Other Differences

3. Effective Date of Value HUD MAP Guidelines Traditional Bank Financing Hypothetical Condition: Construction is complete and development is stabilized as of the effective date of value. Prospective date of completion and stabilized occupancy.

4. Market Rents HUD MAP Guidelines Traditional Bank Financing HUD Form 92273 Rent Adjustment Grid: Very detailed Rent grids are typically less detailed.

5. Vacancy - Retail or Commercial Space HUD MAP Guidelines Traditional Bank Financing Limited to: 10% for 223(f) 20% for 221(d)(4) Market derived.

6. Operating Expenses HUD MAP Guidelines Traditional Bank Financing HUD Form 92274: Operating expenses are trended from the beginning of the expense comparable fiscal/calendar year to the effective date of value. Subject's operating expenses are not trended from expense comparable properties.

7. Replacement Reserves HUD MAP Guidelines Traditional Bank Financing Market derived.

8. Critical and Non-Critical Repairs HUD MAP Guidelines Traditional Bank Financing Hypothetical Condition for 223(f): Repairs are completed as of the effective date of value. Critical repairs (deferred maintenance) are deducted to derive an As Is Market Value estimate.

9. Land Value HUD MAP Guidelines Traditional Bank Financing Based on the existing or proposed multi-family use. Based on the highest and best use of the site, as if vacant.

10. Forms HUD MAP Guidelines Traditional Bank Financing Form 92273 (Rent Adjustment Grid) Form 92274 (Expense Analysis) Form 92264 (Appraisal Summary) Specific forms are not typically required.

16. Discounted Cash Flow HUD MAP Guidelines Traditional Bank Financing Not permitted.May be applicable.

17. Other Differences

18. Remaining Economic Life Remaining Useful Life

19. Remaining Economic Life The estimated period during which improvements will continue to represent the highest and best use of the property; an estimate of the number of years remaining in the economic life of the structure or structural components as of the date of the appraisal; used in the economic age-life method of estimating depreciation. Source: The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, Chicago, Illinois, 2010

20. Remaining Useful Life The estimated period during which improvements will continue to provide utility; an estimate of the number of years remaining in the useful life of the structure or structural components as of the date of the appraisal; used in the breakdown method of estimating depreciation. Source: The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, Chicago, Illinois, 2010

21. Vacancy/Collection Loss It's more than just vacant units!

22. Questions?

23. Contact Information Michelle Alexander, MAI, MRICS Integra Realty Resources - Memphis 901.866.4934 ext. 229 malexander@irr.com Lauren Green Integra Realty Resources - Tampa Bay 813.287.1000 ext. 168 lgreen@irr.com