1. Asset Management of Debt and Equity Investments Presented by: Armando Pérez Principal, Director of Asset Management

2. 2 Headlines More similarities than differences between debt and equity investments and how they are managed The objectives and incentives of debt providers are determined by the structure of their investments Understanding debt drivers is key to effective asset management and issue resolution – whether you are the asset manager or the developer.

3. 3 MMA Provides Equity and Debt … LIHTC Corporate Tax Credit Funds Multi-investor, Private, Guaranteed Debt Products Construction loans Permanent financing Tax exempt bonds One-Stop Shop for Affordable Debt & Equity Combined debt and equity teams Unified application, underwriting & closing process

4. 4 … So We Manage Debt & Equity Products MMA Equity Portfolio – 1,950 properties Tax Credits Low Income Housing Historic Rehabilitation MMA Debt Portfolio – 625 properties Construction Loans Bonds Permanent Loans Fannie Mae, Freddie Mac, HUD

5. 5 Debt and Equity Have Similarities … Capital investments In affordable multifamily property Specified yield requirement Long term Impacted by asset performance Dependent on developer strength

6. 6 … but Different Structures LIHTC Investment Ownership Interest Pass-through entity LP or LLC Limited control & limited liability Tax-advantaged return Tax credits and losses Debt Capital Mortgage loan Secured First lien position Cash return Debt service

7. 7 … So Focus and Aims Are Not The Same Equity Yield Credits and losses Loss of ownership (recapture) Long term viability Property performance Debt Payment of debt service Property performance Liens T & I escrows Default losses Value of collateral

8. 8 MMA Asset Management … Oversees debt and equity investments under a single organizational structure Teams are organized around property lifecycle and geography, not debt or equity products Debt expertise is provided through specialization and processes

9. 9 Asset Management Structure Stabilized Portfolio Team Development Management Team Admin. and Technical Support Operations Team Analyst Pool Compliance Team Tax Team Northeast Central Southeast West Asset Management Team Capital Transactions Team Workouts Dispositions Refinancings Risk Management Investment Performance

10. 10 MMA Asset Management … Assigns one AM per property, regardless debt or equity product Property monitoring activities are similar for debt and equity Physical, management, financial reviews Focus is on asset performance, which impacts both debt and equity

11. 11 MMA Asset Management … Manages the portfolio from an investment perspective AMs understand debt and equity and can translate how a given issue affects each of these different investments Debt portfolio managers support this investment perspective

12. 12 MMAs Investment Perspective … Property Life-Cycle Phases Development Due diligence Construction & lease-up Yield delivery Loan conversion Initial tax credit compliance Initial Operations Capital and operating escrow releases Final tax credits (8609s) Permanent loan sizing & closing Stabilization (DSC) On-going monitoring Stabilized Phase Financial & budget review Tax return review Physical inspection Management evaluation Compliance monitoring Partnership & loan agreement administration First 18 to 24 mos. Next 6 to 12 mos. Remaining holding period Risk Management Tax Credit and Debt Portfolio Managers

13. 13 RISK MANAGEMENT Problem Deals Deal Strategies Issue Resolution PORTFOLIO MANAGER Products Capital Relationships Business Focus Risk Profitability ASSET MANAGER Monitoring Analysis Performance Tracking GP/Borrower Relationship … to Maximize Performance & Mitigate Risk Leverage expertise Investment perspective Effective strategies Investment performance Profitability

14. 14 Final Words – A Debt Perspective Lenders make capital investments, but they are different than LP equity interests in a property As capital providers, lenders have clear objectives and motivations When there is a problem, understanding debt drivers is key to effective issue resolution – whether you are the asset manager or the developer

15. Asset Management of Debt and Equity Investments Presented by: Armando Pérez Principal, Director of Asset Management