Florida Housing Finance Corporation · 1. The Application included a Letter of Intent (“LOI”)...

Florida Housing Finance Corporation

Credit Underwriting Report

Pelican Pointe Apartments

MMRB, SAIL, ELI and 4% Non‐Competitive Housing Credit Program

RFA 2015‐112 / 2016‐181BS

Section A Report Summary

Section B Loan Conditions and HC Allocation Recommendation and Contingencies

Section C Supporting Information and Schedules

Prepared by

Seltzer Management Group, Inc.

Final Report

November 21, 2016

EXHIBIT A of 42

SMG

_____________________________________________________________________________

NOVEMBER 21, 2016

PELICAN POINTE APARTMENTS

TABLE OF CONTENTS

Page Section A

Report Summary Recommendation A1‐A9

Overview A9‐A13 Uses of Funds A14‐A20 Operating Pro Forma A21‐A23

Section B Loan Conditions and HC Allocation Recommendation and Contingencies B1‐B7

Section C

Supporting Information and Schedules Additional Development and Third Party Information C1‐C6 Borrower Information C7‐C11 Guarantor Information C12‐C13 Syndicator Information C14‐C15 General Contractor Information C16‐C17 Property Manager Information C18‐C19

Exhibits

15 Year Pro Forma 1 Features and Amenities and Resident Programs 2 1‐4 Completeness and Issues Checklist 3 1‐2 HC Allocation Calculation 4 1‐2

EXHIBIT A of 42

SMG

_____________________________________________________________________________

NOVEMBER 21, 2016

Section A

Report Summary

EXHIBIT A of 42

MMRB, SAIL/ELI AND HC CREDIT UNDERWRITING REPORT SMG

PELICAN POINTE APARTMENTS A-1

NOVEMBER 21, 2016

Recommendation

Seltzer Management Group, Inc. (“SMG” or “Seltzer”) recommends Florida Housing Finance Corporation (“FHFC” or “Florida Housing”) fund a Multifamily Mortgage Revenue Bond (“MMRB”) first mortgage construction loan up to a maximum amount of $5,500,000, with an estimated pay down of $2,700,000 to $2,800,000 in the Permanent Period (see Financing Structure below), a State Apartment Incentive Loan (“SAIL”) Second Mortgage of $4,047,210, and an Extremely Low Income (“ELI”) Third Mortgage Loan in the amount of $408,200. SMG also recommends an Annual Housing Credit (“HC”) allocation of $366,348 to Pelican Pointe Apartments for Construction/Permanent Financing.

Address: City: Zip Code:

County: County Size:

Development Category: Development Type:

Construction Type:

Demographic Commitment: Elderly: Homeless: ELI: Units@ 40%AMI

Farmworker or Commercial Fish Worker: Family: Link: Units

Buildings: Residential ‐ Non‐Residential ‐

Parking: Parking Spaces ‐ Accessible Spaces ‐

Set Asides:

High

HOME

Rents

Low

HOME

Rents

$126

$142 $831

Net HC

Rent

$376

$624

$448

$735

$819

2

10.0%

Program

134

86,451 78

Pelican Pointe ApartmentsDevelopment Name:

Clarence Street Panama City Beach 33413

2.0

2.0

3.0

3.0

2.0

$459

$746

Bath

Rooms

2.0

RD/HUD

Cont

Rents

Applicant

Rents

$397

$645

8

4

No

No

DEVELOPMENT & SET‐ASIDES

Bed

Rooms

2.0

2.0

2.0

MMRB/SAIL/ELI/HC

90.0%

4.0

Utility

Allow

$121

$121

$126

5

40

3

24

6

Square

Feet

1,366

Gross HC Rent

$497

$745

$574

$861

$961

# of Units% of Units

No

Yes

1,025

1,025

1,190

1,190

Program Numbers: 2016‐181BS

Medium

New Construction Garden Style Apartments

Wood frame/hardiplank siding/wood trusses w/ asphalt shingles

Bay

RFA 2015‐112

Units AMI%

40%

60%

40%

60%

60%

$608,856

8

$819

Annual

Rental

Income

$22,560

$299,520

$16,128

$211,680

$58,968

CU Rents

$376

$624

$448

$735

$819

Appraiser

Rents

$376

$624

$448

$735

Term (Years)

5

50

5040%

1

% AMI

MMRB/SAIL/HC 70 60%

The Development is not located in and does not qualify as a Limited Development Area (“LDA”); therefore, the Applicant must commit to set aside ten percent (10%) of the total units as ELI Set‐Aside Units.

EXHIBIT A of 42



NOVEMBER 21, 2016

Person with a Disabling Condition Set‐Aside Commitment: The proposed Development must set aside 50% of the ELI Set‐Aside units for Persons with a Disabling Condition that are referred by a Special Needs Household Referral Agency that provides supportive services for Persons with a Disabling Condition for the county where the proposed Development will be located.

Absorption Rate units per month for months.

Occupancy Rate at Stabilization: Physical Occupancy Economic Occupancy

Occupancy Comments

DDA?: QCT?:

Site Acreage: Density: Flood Zone Designation:

Zoning: Flood Insurance Required?:

95%

No No

94%

CH ‐ Commercial High Intensity

Stabilization May 1, 2018 per Appraisal

9.855 7.9148

Yes

16 5

A

Applicant/Borrower:

General Partner 1:

Limited Partner 1:

Special Limited Partner:

Construction Completion

Guarantor(s):

Operating Deficit

Guarantor(s):

Developer:

Principal 1

General Contractor 1:

Management Company:

Syndicator:

Bond Issuer:

Architect:

Market Study Provider:

Appraiser:

DEVELOPMENT TEAM (cont)

99.99%

RA Pelican Pointe, LLC

Royal American Development, Inc.

JBC of Panama City, Inc.

Jeannette B. Chapman

Jeannette B. Chapman



JBC of Panama City, Inc.

DEVELOPMENT TEAM

Pelican Pointe of Bay, Ltd.

Peoples First Properties, Inc.

DAG Architects, Inc.

Meridian Appraisal Group, Inc.



Royal American Construction Co., Inc.

Royal American Management, Inc.

Meridian Appraisal Group, Inc.

R4 Capital, LLC

FHFC



PFP Holdings, Inc.

% Ownership

0.01%

EXHIBIT A of 42



NOVEMBER 21, 2016

FHFC/R4CF FHFC/SAIL

106.5% 260.4% 275.9%

Market Rate/Market

Financing LTV

1.284 1.000 0.986

$140,000

25.2%

Loan to Cost

Restricted Market

Financing LTV

Operating/Deficit

Service Reserve

23.9% 34.6% 3.5%

Period of Operating

Expenses/Deficit

Reserve in Months

5

61.7% 65.4%

Other5th Source4th Source3rd Source2nd Source

Lender/Grantor

Loan Term

Amortization

Lien Position

Amount

Underwritten Interest

Rate

All In Interest Rate 4.91%

First

20 20 20

40 0 0

1.00% 0.00%

Second Third

1st Source

PERMANENT FINANCING INFORMATION

4.91% 1.00% 0.00%

$2,800,000 $4,047,210 $408,200

FHFC/ELI

Debt Service Coverage

$562,506

$11,100,000

Deferred Developer Fee

Market Rent/Market Financing Stabilized Value

Rent Restricted Market Financing Stablized Value

Projected Net Operating Income (NOI) ‐ 15 Year

Housing Credit Syndication Price

$240,629

Projected Net Operating Income (NOI) ‐ Year 1 $231,010

$366,348

Bond Structure

Housing Credit Annual Allocation

$1.10

$860,000

Rent Restricted Favorable Financing Stablized Value n/a

Tax‐Exempt Private Purchase

Land Value

Year 15 Pro Forma Income Escalation Rate

Year 15 Pro Forma Expense Escalation Rate

2.00%

3.00%

$2,630,000

EXHIBIT A of 42



NOVEMBER 21, 2016

$756,756

$35,897

$51,887

Bay County

First Mortgage

$4,047,210

$408,200

$20,000

$11,696,916

$408,200

$562,506

CONSTRUCTION/PERMANENT SOURCES:

TOTAL

FHFC/R4CF

FHFC/SAIL

FHFC/ELI

Second Mortgage

Grant

$5,233

$256

$5,500,000

$4,047,210

$20,000

$2,800,000

$149,960

Perm Loan/UnitPermanentConstructionLender

HC Equity R4 $964,750 $3,859,000 $49,474

Deferred Developer Fee RAD $7,212

Third Mortgage

$11,696,916

Source

Changes from the Application:

COMPARISON CRITERIA YES NO

Does the level of experience of the current team equal or exceed that of the team described in the application?

X

Are all funding sources the same as shown in the Application? 1

Are all local government recommendations/contributions still in place at the level described in the Application?

X

Is the Development feasible with all amenities/features listed in the Application? X

Do the site plans/architectural drawings account for all amenities/features listed in the Application?

X

Does the Applicant have site control at or above the level indicated in the Application? X

Does the Applicant have adequate zoning as indicated in the Application? X

Has the Development been evaluated for feasibility using the total length of set‐aside committed to in the Application?

X

Have the Development costs remained equal to or less than those listed in the Application?

X

Is the Development feasible using the set‐asides committed to in the Application? X

If the Development has committed to serve a special target group (e.g. elderly, large family, etc.), do the development and operating plans contain specific provisions for implementation?

N/A

HOME ONLY: If points were given for match funds, is the match percentage the same as or greater than that indicated in the Application?

N/A

HC ONLY: Is the rate of syndication the same as or greater than that shown in the Application?

X

EXHIBIT A of 42



NOVEMBER 21, 2016

Is the Development in all other material respects the same as presented in the Application?

2

The following are explanations of each item checked “No” in the table above:

1. The Application included a Letter of Intent (“LOI”) from Raymond James Tax Credit Funds, Inc. to provide 4% LIHTC equity to provide construction/permanent financing for the subject development. Subsequent to Application submission, the Applicant executed a LOI with R4 Capital, LLC to provide 4% LIHTC equity.

The Applicant applied for $5,000,000 in SAIL but was only awarded $4,047,210.40 by FHFC. However, FHFC rounded the award to $4,047,210.

2. In its funding Application, the developments unit mix consisted of forty‐six (46) two‐bedroom, twenty‐six (26) three‐bedroom, and six (6) four‐bedroom units. The unit mix has changed slightly to include forty‐five (45) two‐bedroom, twenty‐seven (27) three‐bedroom, and six (6) four‐bedroom units.

These changes have no substantial material impact to the MMRB/HC, SAIL or ELI recommendations for this Development.

Does the Development Team have any FHFC Financed Developments on the Past Due/Noncompliance Report?

Florida Housing’s Past Due Report dated November 1, 2016 (last updated October 26, 2016) reflects the following past due item(s): None

The Asset Management Noncompliance Report dated November 1, 2016 reflects the following noncompliance issues: None

This recommendation is subject to satisfactory resolution (as determined by FHFC) of any outstanding past due and/or noncompliance issues prior to loan closing.

Strengths:

1. The appraiser, Meridian Appraisal Group, Inc. (“Meridian”), states that there is adequate demand for affordable housing in the Subject’s Primary Market Area (“PMA”).

2. Meridian advised that the comparable properties in the subject’s market area are reporting a weighted average occupancy rate of 98.7%.

3. The developer, contractor, and the management company, along with their respective principal members, have sufficient experience and financial resources to develop, construct and operate the proposed Development.

Other Considerations: None

Mitigating Factors: None

Waiver Requests/Special Conditions: None

Additional Information:

EXHIBIT A of 42

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EXHIBIT A of 42



NOVEMBER 21, 2016

Overview

Construction Financing Sources

Source Lender Applicant

Revised

Applicant Underwriter

Interest

Rate

Construction

Debt ServiceMMRB Series A FHFC/R4CF $3,150,000 $2,800,000 $2,800,000 4.73% $94,364

MMRB Series B FHFC/R4CF $2,350,000 $2,700,000 $2,700,000 3.11% $59,829

Second ‐ SAIL FHFC $5,000,000 $4,047,210 $4,047,210 1.00% $0

Third ‐ ELI FHFC $408,200 $408,200 $408,200 0.00% $0

HC Equity R4 $1,089,851 $964,750 $964,750

Deferred Developer Fee RAD $1,858,536 $1,378,196 $756,756

Local Gov't Contribution Bay County $20,000 $20,000 $20,000

Total $13,876,587 $12,318,356 $11,696,916 $154,192 Tax Exempt Construction Bonds

Per a April 12, 2016 financing proposal from R4 Capital Funding (“R4CF”), last updated November 18, 2016, R4CF or a designated capital partner will purchase an estimated $2,800,000 of tax‐exempt bonds (“Series A Bonds” or “Permanent Bonds”) and facilitate the purchase of $2,700,000 of tax‐exempt bonds (“Series B Bonds” or “Construction Bonds”); for a combined bond purchase of $5,500,000. The Series A Bonds will have an interest rate based on a stepped coupon structure. Fixed rates of interest will be established approximately one week prior to closing based on the 15 Year Municipal Market Data (“MMD”) Index plus a spread of 2.00% from closing through month 18 following closing, and 2.50% beginning month 19 following closing and thereafter. The Series A Bonds will have a 18 month interest only period. Interest on the Series B Bonds will be based at a floating rate of the 1 month London Interbank Offered (“LIBOR”) Rate plus 2.00% adjustable monthly per annum on the amount of bonds outstanding. The Series B Bonds will have a maximum term of 18‐months. Payments of interest only are due on the Series B Bonds during the 18‐month term. All outstanding principal is due and payable at the expiration of the 18‐month interest only period. Additional fees will be charged during the Construction Phase including Issuer and Trustee Fees estimated at 32.2 basis points. SMG also includes a 25 basis point credit underwriting cushion. Based on current rates SMG estimates the “all‐in” interest rate on the Series A Bonds and Series B Bonds at 4.73% and 3.11%, respectively. The schedule above reflects the MMRB funded at an average of 57% during the construction phase.

Other Construction Sources of Funds:

Additional sources of funds for this Development during construction are SAIL in the amount of $4,047,210; an ELI loan in the amount of $408,200; housing credit equity of $964,750, a local government contribution of $20,000, and deferred developer fees in the amount of $756,756. See the Permanent Financing section below for details.

Construction/Stabilization Period:

A September 6, 2016, AIA Standard Form of Agreement between Owner and Contractor with a Guaranteed Maximum Price reflects Royal American Construction Co., Inc. achieving substantial completion of the Development no later than 304 days from the date of commencement; however, SMG has assumed this reflects standard business days. Therefore, SMG assumes a construction period of 10 months. Meridian’s June 10, 2016, market study reflects an absorption rate of 16 units per month

EXHIBIT A of 42



NOVEMBER 21, 2016

(5 months). Stabilization at a 95% occupancy rate is expected to occur five months following construction completion. SMG has utilized a 15‐month construction/stabilization period for purposes of this credit underwriting report.

EXHIBIT A of 42



NOVEMBER 21, 2016

Permanent Financing Sources

Source Lender Applicant

Revised

Applicant Underwriter

Interest

Rate

Amort.

Yrs.

Term

Yrs.

Annual

Debt

First Mortgage FHFC/R4CF $3,000,000 $2,800,000 $2,800,000 4.91% 40 20 $160,020

Second ‐ SAIL FHFC $5,000,000 $4,047,210 $4,047,210 1.00% N/A 20 $40,472

Third ‐ ELI FHFC $408,200 $408,200 $408,200 0.00% N/A 20 $0

HC Equity R4 $3,632,836 $3,833,429 $3,859,000

Def. Developer Fee RAD $1,858,536 $1,209,517 $562,506

Local Gov't Contribution Bay County $20,000 $20,000 $20,000

Total $13,919,572 $12,318,356 $11,696,916 $200,492

Tax Exempt Permanent Bonds

Per the April 12, 2016 financing proposal from R4CF, last updated November 18, 2016, following the repayment of the Series B Bonds ($2,700,000) , Applicant will have a Series A MMRB loan to amortize of $2,800,000. R4CF’s conversion requirements include achievement of stabilization not later than 18 months from loan closing, the ratio of net operating income of the subject for the prior three months to the maximum debt service in any three month period to equal or exceed 1.175 to 1.00, and the average economic occupancy in each of the three months equals at least 90%. Following the construction/stabilization phase of up to 18 months, interest and principal payments will be paid monthly for 20 years on a 40‐year amortization basis. The interest rate during the permanent period will be fixed at loan closing based upon 2.50% over the 15‐year MMD rate (2.16%). SMG has utilized a rate of 4.91% for underwriting purposes, including a credit underwriting cushion of 25 b.p. Additional fees include a Trustee Fee equal to 0.161% of the bond amount plus a FHFC Issuer Fee of 0.357%, plus a Servicing Fee equal to 0.087% and a Compliance Monitoring Fee equal to 0.106% during the permanent phase. These fees have been included in the debt service coverage analysis discussed further into this Report.

Optional prepayment of the Series A Bonds is not permitted prior to the 15th anniversary of stabilization. Thereafter, the bonds may be prepaid at par upon 30 days’ notice to the bondholder. Upon the 16th anniversary of stabilization and continuing through the maturity date, the bondholder shall have the option to require mandatory tender of the bonds with a 6 month notice of such mandatory tender. The bonds shall be secured by a first priority mortgage lien on the property and a first priority assignment of leases and rents.

The Series A Bonds will mature twenty (20) years following the termination of the construction phase and conversion to the permanent phase. At maturity or at the option for mandatory tender following the 16th anniversary of stabilization, the Applicant may satisfy the bond mortgage repayment via refinance or sale of the Subject Development pending market feasibility. In the event the Applicant is unable to refinance or effectuate a sale to fund payoff of the tax‐exempt loans, such event would not cause an event of default under the loan documents. Rather, should this situation occur, it would trigger a “Mortgage Assignment Event” whereby R4CF agrees to cancel the bond loan in exchange for an assignment by the Trustee of the mortgage and all other related documents and accounts. The Trustee would cancel the tax‐exempt loans and discharge the lien of the indenture, and it would then assign the mortgage loans and any other related documents and collateral to R4CF, effectively ending the

EXHIBIT A of 42



NOVEMBER 21, 2016

transaction. Under this scenario, the tax‐exempt loans will have been redeemed/cancelled not by payment of cash but by the assignment of the mortgage loan documents and there is no default. As the new direct mortgagee, R4CF would then be in position to work with the Applicant to arrive at a resolution without involvement of either FHFC or the Trustee (as the tax‐exempt loans would have been cancelled and would no longer be outstanding).

The Florida Housing Bonds will be secured by a first mortgage on the Subject Development and a first security interest in all personal property. Tax, Insurance and Replacement Reserve Escrows will be required. The Series B Bonds will mature 20 years following the termination of the construction phase and conversion to the permanent phase.

SAIL

Borrower applied to FHFC under RFA 2015‐112 for SAIL funds in the amount of $5,000,000. However, the Applicant was only awarded $4,047,210 by FHFC. The SAIL will be co‐terminus with the first mortgage loan, as permitted by the Rule, for a term will of 20 years following a construction/stabilization period of up to eighteen months for a total term of 21.5 years. The SAIL will be non‐amortizing and will bear 1.00% simple interest per annum. Annual payments of all applicable fees will be required. Applicable fees at the rate of 0.261% ($10,581) consist of a Servicing Fee equal to 0.240% ($9,696) based on the principal amount of the SAIL plus a Compliance Monitoring Fee equal to 0.022% ($885). Any unpaid interest will be deferred until cash flow is available. At the maturity of the SAIL, however, all principal and unpaid interest is due.

ELI Loan

Applicants who submitted an Application for RFA 2015‐112 are also eligible for ELI gap funding for ELI set‐aside units not to exceed 10% of the total units for applications with a Family or Elderly demographic commitment. The demographic commitment for Pelican Pointe Apartments is Family. The ELI Loan is in the form of a forgivable loan in an amount of $408,200.

The ELI AMI for Bay County is 40%. The Borrower committed to set aside 10% of the units (8 units) at or below 40% AMI for SAIL/ELI. The ELI units are distributed across the unit mix on an approximate pro‐rata basis. The ELI loan is non‐amortizing at 0.00% simple interest per annum. Annual payments of all applicable fees will be required. Applicable fees, at the rate of 0.814% ($3,321), are comprised of a Servicing Fee of 0.597% ($2,436) based on the principal amount of the ELI, plus a Compliance Monitoring Fee of 0.217% ($885). The principal is forgivable at maturity provided the units for which the ELI loan amount is awarded are targeted to ELI Households for the first 15 years of the 50 year Compliance Period. However, after 15 years, all of the ELI set aside units may convert to serve residents at or below 60% AMI. The Persons with a Disabling Condition set‐aside requirement must be maintained through the entire compliance period. The ELI loan will be co‐terminus with the first mortgage loan, as permitted by the Rule, for a term of 20 years following a construction/stabilization period of up to eighteen months for a total term of 21.5 years.

EXHIBIT A of 42



NOVEMBER 21, 2016

Housing Credits Equity Investment:

The Borrower has applied to Florida Housing to receive 4% Housing Credits directly from the United States Treasury in conjunction with tax‐exempt financing. An HC calculation is contained in Exhibit 4 of this credit underwriting report.

Based upon a July 21, 2016 letter of intent, R4 Capital, LLC (“R4”) or an affiliate will purchase a 99.99% interest in the Applicant and provide HC equity as follows:

Capital Contributions Amount

Percent of

Total When Due

1st Installment $964,750 25.0% Closing

2nd Installment $385,900 10.0% Later of 1/1/2018 or 100% Construction Completion

3rd Installment $2,122,450 55.0% Later of 4/1/2018 or Rental Acheivement

4th Installment $385,900 10.0% Later of 7/1/2018 or IRS Form 8609

Total $3,859,000 100%

Annual Tax Credits per Syndication Agreement: $350,828

Total HC Syndication: $3,507,929

Syndication Percentage (limited partner interest): 99.90%

Calculated HC Exchange Rate (per dollar): $1.100

Proceeds Available During Construction: $964,750

Sufficient equity proceeds will be disbursed at closing to meet regulatory requirements.

Other Permanent Sources of Funds: In order to balance the sources and uses of funds after all loan proceeds and capital contributions payable under the R4 proposal, as adjusted, have been received, the developer will have to defer $562,506 of developer fees.

EXHIBIT A of 42


PELICAN POINTE APARTMENTS PAGE A-12

NOVEMBER 21, 2016

Uses of Funds

Applicant CostsRevised

Applicant Costs

Underwriters Total

Costs ‐ CUR

Cost Per

Unit

HC Ineligible

Costs ‐ CUR

Accessory Buildings $50,000 $641

Demolition

Installation of Pre Fab Units

New Rental Units $7,020,000 $6,825,000 $5,404,214 $69,285

Off‐Site Work

Recreational Amenities $107,200 $1,374

Rehab of Existing Common Areas

Rehab of Existing Rental Units

Site Work $890,515 $11,417

Swimming Pool $105,000 $1,346

General Conditions $982,800 $955,500 $393,416 $5,044

Overhead $131,139 $1,681

Profit $393,416 $5,044

Builder's Risk Insurance

General Liability Insurance

Payment and Performance Bonds $120,600 $1,546

Furniture, Fixture, & Equipment $185,000 $2,372

Total Construction Contract/Costs $8,002,800 $7,780,500 $7,780,500 $99,750 $0

Hard Cost Contingency $478,460 $389,025 $389,025 $4,988

Fees for LOC used as Construction Surety

Other:

Other:

Other:

Other:

Other:

$8,481,260 $8,169,525 $8,169,525 $104,738 $0

CONSTRUCTION COSTS:

Total Construction Costs:

Notes to the Construction Costs: 1. The Borrower has provided an executed construction contract dated September 6, 2016 between

the Owner and Royal American Construction Co., Inc. where the basis for payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price in the amount of $7,780,500. The General Contractor shall achieve substantial completion of the entire work not later than 304 working days (10 months) after the date of commencement. Retainage shall be limited to 10% of the contract amount until 50% construction completion, then retainage shall be reduced to 5%. Final payment will be made when the contract has been fully performed, the contractor has submitted a final accounting of the cost of the work and a final application for payment, and a final certificate for payment has been issued by the architect. The Owner’s final payment to the contractor shall be made no later than 30 days after the architect’s final certificate for payment.

2. General Contractor fees as stated are within the 14% maximum per the RFA and Rule. The cost of payment and performance bonds and appliances, $120,600 and $185,000, respectively, totaling $305,600 are reflected in the Construction Contract Schedule of Values; however, they are excluded from construction hard costs in the General Contractor fee calculation.

EXHIBIT A of 42



NOVEMBER 21, 2016

3. Per the Applicant, Builder’s Risk Insurance costs are included in the General Conditions line item of the GC Contract.

4. The Hard Cost Contingency is within the 5% allowed as required by the RFA and Rule.

5. SMG engaged and received a Plan and Cost Analysis (“PCA”) from On Solid Ground, LLC (“OSG”). Complete results are set forth in Section C of this credit underwriting report.

EXHIBIT A of 42



NOVEMBER 21, 2016

GENERAL DEVELOPMENT COSTS: Applicant CostsRevised

Applicant Costs

Underwriters Total

Costs ‐ CUR

Cost Per

Unit

HC Ineligible

Costs ‐ CUR

Accounting Fees $35,000 $25,000 $25,000 $321

Appraisal $15,000 $15,000 $5,400 $69

Architect's and Planning Fees

Architect's Fee ‐ Green Initiative

Architect's Fee ‐ Landscape

Architect's Fee ‐ Site/Building Design $275,000 $234,000 $234,000 $3,000

Architect's Fee ‐ Supervision $50,000 $25,000 $25,000 $321

Building Permits $150,000 $100,000 $100,000 $1,282

Builder's Risk Insurance $50,000

Capital Needs Assessment/Rehabilitation

Demolition paid outside Const Contract

Engineering Fees $125,000 $38,000 $38,000 $487

Environmental Report $15,000 $2,000 $2,000 $26

Federal Labor Standards Monitoring

FF&E paid outside Construction Contract

FHFC Administrative Fees $32,760 $32,760 $32,971 $423 $32,971

FHFC Application Fee $3,000 $3,000 $3,000 $38 $3,000

FHFC Credit Underwriting Fee $22,226 $22,226 $22,292 $286 $22,292

FHFC HC Compliance Fee (HC) $10,000 $15,000

FHFC Other Processing Fee(s)

Impact Fee $156,000 $206,700 $206,700 $2,650

Lender Inspection Fees / Const Admin $50,000 $36,000 $36,000 $462

Green Building Cert. (LEED, FGBC, NAHB) $50,000

Home Energy Rating System (HERS)

Insurance $50,000 $45,000 $45,000 $577

Legal Fees $125,000 $100,000 $100,000 $1,282 $50,000

Local Subsidy Underwriting Fee

Market Study $10,000 $10,000 $5,400 $69 $5,400

Marketing and Advertising $50,000 $20,000 $20,000 $256 $20,000

Plan and Cost Review Analysis $10,000 $10,000 $128

Property Taxes $25,000 $25,000 $25,000 $321

Soil Test $15,000 $7,560 $7,560 $97

Start‐Up/Lease‐up Expenses

Survey $25,000 $10,000 $10,000 $128

Tenant Relocation Costs

Title Insurance and Recording Fees $67,462 $52,670 $52,670 $675

Traffic Study

Utility Connection Fees

Soft Cost Contingency $160,000 $75,000 $50,300 $645 $50,300

Other:

$1,566,448 $1,109,916 $1,056,293 $13,542 $183,963Total General Development Costs:

EXHIBIT A of 42



NOVEMBER 21, 2016

Notes to the General Development Costs:

1. Architect’s Fees for Site/Building Design and Supervision reflect the fees as stipulated in the Architect Contract dated February 10, 2016 between the Borrower and DAG Architects, Inc. for the subject development.

2. Engineering Fees reflect fees stipulated in the Professional Services Agreement dated January 14, 2016 between the Borrower and McNeil Carroll Engineering, Inc.

3. Appraisal and Market Study figures reflect the actual cost of the reports.

4. The FHFC Administrative Fee is based on 9% of the recommended annual allocation of HC. The FHFC Application Fee is reflective of the application fee stated in RFA 2015‐112. The total FHFC Credit Underwriting Fee is $22,292.

5. Soft cost contingency is limited to 5% as required per Rule.

6. Other General Development Costs are based on the Borrower’s estimates, which appear reasonable.

EXHIBIT A of 42



NOVEMBER 21, 2016


Applicant Costs

Underwriters Total

Costs ‐ CUR

Cost Per

Unit

HC Ineligible

Costs ‐ CUR

Construction Loan Application Fee

Construction Loan Underwriting Fee

Construction Loan Origination Fee $55,000 $705

Construction Loan Commitment Fee

Construction Loan Closing Costs $10,000 $14,200 $182

Construction Loan Interest

Construction Loan Servicing Fees

Permanent Loan Application Fee

Permanent Loan Underwriting Fee

Permanent Loan Subsidy Layering Review

Permanent Loan Commitment Fee

Permanent Loan Origination Fee $30,000 $31,500 $28,000 $359 $28,000

Permanent Loan Closing Costs

Permanent Loan Interest

Permanent Loan Servicing Fee

FHFC Bond Application Fee $157,500

FHFC Bond Underwriting Fee

FHFC Bond Subsidy Layering Review

FHFC Bond Origination Fee $80,000 $23,500 $23,500 $301 $23,500

FHFC Bond Commitment Fee

FHFC Bond Trustee Fee $10,500 $135 $10,500

FHFC Bond Credit Enhancement Fee

FHFC Bond Rating Fee

FHFC Bond Closing Costs $9,785 $125 $9,785

FHFC Bond Interest $157,500 $206,250 $206,250 $2,644 $103,125

FHFC Bond Servicing Fee

SAIL Application Fee

SAIL Underwriting Fee

SAIL Origination Fee

SAIL Commitment Fee $40,472 $44,554 $571 $44,554

SAIL Closing Costs

SAIL Interest

SAIL Servicing Fee

Negative Arbitrage

Reserves ‐ Operating Deficit $271,884 $140,000 $1,795 $140,000

Reserves ‐ Replacement Escrow

Financial Advisor Fee

Legal Fees ‐ Bond Counsel $61,000 $782 $61,000

Legal Fees ‐ Borrower's Counsel

Legal Fees ‐ Issuer's Counsel

Legal Fees ‐ Lender's Counsel $51,500 $660 $51,500

Legal Fees ‐ Underwriter's Counsel $22,500 $288 $22,500

Working Capital Reserve

TEFRA Fee $1,000 $13 $1,000

Other: Loan Fees‐LOC, Credit Reports $7,500 $12,500 $160 $12,500

Other: FHFC Related Fees $36,500 $468 $36,500

$277,500 $738,606 $716,789 $9,190 $544,464

FINANCIAL COSTS:

Total Financial Costs:

Reserves ‐ ACC Reserve

EXHIBIT A of 42



NOVEMBER 21, 2016

Notes to the Financial Costs:

1. FHFC Bond Interest is based on Applicant’s estimate, which SMG considers reasonable.

2. SAIL Commitment Fee is equal to 1% of the SAIL and ELI loans.

3. Reserves – Operating Deficit is the Operating Deficit Reserve (“ODR”) required by the Syndicator (R4) and the bond purchaser/facilitator (R4CF). At the end of the Compliance Period, any remaining balance of the ODR less amounts that may be permitted to be drawn (which includes Deferred Developer Fee and reimbursements for authorized member/partner and guarantor loan(s) pursuant to the operating/partnership agreement), will be used to pay FHFC debt; if there is no FHFC loan debt on the proposed Development at the end of the Compliance Period, any remaining balance shall be used to pay any outstanding FHFC fees. If any balance is remaining in the ODR after the payments above, the amount should be placed in a Replacement Reserve account for the Development. In no event shall the payments of amounts to Applicant or the Developer from the Reserve Account cause the Developer fee or General Contractor Fee to exceed the applicable percentage limitations provided for in the Rule. Any and all terms and conditions of the ODR must be acceptable to FHFC, its Loan Servicer and its Legal Counsel.


Applicant Costs

Underwriters Total

Costs ‐ CUR

Cost Per

Unit

HC Ineligible

Costs ‐ CUR

$10,325,208 $10,018,047 $9,942,607 $127,469 $728,426

Developer Fee $1,858,536 $1,754,309 $1,754,309 $22,491

Other: Brokerage Fees ‐ Land

Consultant Fees

Excess Acquisition Costs

Excess Land Value

Guaranty Fees

Other:

Other:

Other:

$1,858,536 $1,754,309 $1,754,309 $22,491 $0

Developer Fee to fund Operating Debt

Reserve

Total Other Development Costs:

Developer Fee on Acquisition of Buildings

OTHER DEVELOPMENT COSTS

Development Cost Before Developer Fee

and Land Costs

Notes to the Other Development Costs:

1. Developer Fee is within the 18% maximum per the RFA and Rule, exclusive of land acquisition costs and reserves.

EXHIBIT A of 42



NOVEMBER 21, 2016


Applicant Costs

Underwriters Total

Costs ‐ CUR

Cost Per

Unit

HC Ineligible

Costs ‐ CUR

Brokerage Fees ‐ Land

Land Acquisition Costs

Land $546,000 $546,000

Land Lease Payment

Land Carrying Costs

Other:

Other:

Other:

$546,000 $546,000 $0 $0 $0Total Acquisition Costs:

LAND ACQUISITION COSTS

Notes to the Land Acquisition Costs:

1. Applicant has provided SMG with a Warranty Deed between Corry Coastal Properties, Inc., Jim Wilson and Mary Ann Wilson, Marvin Urquhart, Jr. and Joseph F. Chapman, III (collectively the “Grantor”) and Pelican Pointe Apartments of Bay, Ltd. (“Grantee”) the Applicant. The Warranty Deed was recorded April 9, 1996. Per Bay County Tax Rolls, the land was purchased for $345,100 on April 9, 1996. SMG has excluded the Applicant cost ($546,000) for recouping the original purchase of the property due to the length of Applicant ownership.

2. Per the June 30, 2016 appraisal performed by Meridian Appraisal Group, Inc. (“Meridian”) the “As‐is” Fee Simple Land Value is $860,000 for the subject property.

$12,729,744 $12,318,356 $11,696,916 $149,960 $728,426TOTAL DEVELOPMENT COSTS:

Notes to the Total Development Costs:

1. Per RFA 2015‐112, Total Development Cost (“TDC”) is limited on a per unit basis based on the construction type of the units as indicated by the Applicant. The Applicant has indicated a construction type of Garden Style‐Wood (new construction), which has a maximum allowable per unit cost of $183,000. Per an analysis of the approved Development costs, identified in this report, the costs presented do not exceed the maximum allowable TDC per the RFA.

EXHIBIT A of 42



NOVEMBER 21, 2016

Operating Pro forma ANNUAL PER UNIT

$608,856 $7,806

$0 $0

$0 $0

$18,720 $240

$0 $0

$0 $0

$0 $0

$0 $0

$627,576 $8,046

Economic Loss ‐ Percentage: $0 $0

Physical Vacancy Loss ‐ Percentage: 5.0% ($31,379) ($402)

Collection Loss ‐ Percentage: 1.0% ($6,276) ($80)

$589,921 $7,563

Ground Lease $0 $0

Sub‐Ground Lease $0 $0

$30,115 $386

$40,950 $525

Other $0 $0

Management Fee ‐ Percentage: 4.5% $26,546 $340

$29,250 $375

$93,600 $1,200

$46,800 $600

$5,850 $75

$39,000 $500

$11,700 $150

$0 $0

$11,700 $150

$0 $0

$0 $0

$23,400 $300

$358,911 $4,601

$231,010 $2,962

$179,944 $2,307

$51,053 $655

$3,321 $43

$0

$0

$0

$0 $0

$0 $0

$234,318 $3,004

($3,309) ($42)

EXPENSES

Utilities

Marketing and Advertising

Maintenance and Repairs

Grounds Maintenance and Landscaping

Insurance

Variable:

General and Administrative

Payroll Expenses

Other Fees ‐ Agency/Trustee/Servicer

Total Debt Service Payments

Cash Flow After Debt Service

DEBT SERVICE

Ancillary Income‐Parking

Other Fees ‐ Asset Mgmt Fee

Resident Programs

Contract Services

Security

Other‐Pest Control

All Other Mortgages

Reserve for Replacements

Fourth Mortgage

Fifth Mortgage

Total Expenses

Net Operating Income

Debt Service Payments

First Mortgage Debt Service + Fees

Second Mortgage Debt Service + Fees

Third Mortgage (Fees Only)

Miscellaneous

Total Effective Gross Revenue

Fixed:

Real Estate Taxes

OPERATING PRO FORMA

Gross Potential Rental Income

Less:

Gross Potential Income

Other Income:

Washer/Dryer Rentals

Cable/Satellite Income

Rent Concessions

Alarm Income

INCOME

Rent Subsidy (ODR)

EXHIBIT A of 42



NOVEMBER 21, 2016

1.284

1.000

0.986

0.986

60.8%

94.5%

Debt Service Coverage Ratios

Operating Expense Ratio

Break‐Even Ratio

DSC ‐ MMRB First Mortgage loan + Fees

DSC ‐ MMRB First Mtg. and SAIL Second Mtg + Fees

Financial Ratios

DSC ‐ All Mortgages and Fees

DSC ‐ MMRB First Mtg., SAIL Second Mtg. and ELI

Third Mtg. Loan Fees

Notes to the Operating Pro forma and Ratios:

1. The Debt Service Coverage Ratio (“DSCR”) for the first and second loans reflects a ratio lower than 1.10 to 1.00. According to Rule 67‐48.0072 (11), if the Applicant defers at least 35 percent of its Developer fee for at least (6) months following construction completion, the minimum debt service coverage shall be 1.00 for the SAIL, including all superior mortgages. This Development meets the preceding guidelines.

2. The MMRB and SAIL/ELI programs do not impose any rent restrictions. However, this Development will be utilizing Housing Credits in conjunction with the 4% HC financing, which will impose rent restrictions. Pelican Pointe Apartments is projected to achieve 2016 Maximum Allowable HC Rents published by Florida Housing on all units based upon the appraiser’s estimate of achievable rents per comparable properties surveyed. The Applicant engaged Matern Professional Engineering, Inc. of Maitland, FL to prepare a UA Energy Consumption Model Estimate. The consumption model significantly reduced the utility allowances from those reflected in the Panama City Housing Authority UA Chart. The model reflects the residents paying for electricity, water, and sewer with the Applicant paying for trash pick‐up. No manager/employee units are anticipated at this time.

The rent roll is shown below:

MSA/County: Panama City‐Lynn Haven‐Panama City Beach MSA / Bay County

Annual

Rental

Income

$22,560

$299,520

$16,128

$211,680

$58,968

CU Rents

$376

$624

$448

$735

$819

Appraiser

Rents

$376

$624

$448

$735

$819

$608,856

Units AMI%

40%

60%

40%

60%

60%

1,025

1,025

1,190

1,190

$574

$861

$9614.0

Utility

Allow

$121

$121

$126

5

40

3

24

6

Square

Feet

1,366

Gross HC

Rent

$497

$745

Bed

Rooms

2.0

2.0

2.0

2.0

2.0

3.0

3.0

2.0

$459

$746

Bath

Rooms

2.0

RD/HUD

Cont

Rents

Applicant

Rents

$397

$645

86,451 78

Net HC

Rent

$376

$624

$448

$735

$819

$126

$142 $831

High

HOME

Rents

Low

HOME

Rents

3. Miscellaneous income includes vending income, late fees, pet deposits, and forfeited security deposits. Seltzer has utilized the Appraiser’s estimate of $20 per unit per month.

4. The appraiser estimates a stabilized physical vacancy rate of 5% and collection loss of 1% for an economic occupancy of 94% and a physical occupancy rate of 95%.

5. Real estate tax expense is based on the Appraiser’s estimate.

6. Insurance expense is based on the Appraiser’s estimate.

EXHIBIT A of 42



NOVEMBER 21, 2016

7. Management Fees of 4.5% are based upon the executed Property Management Agreement provided by Borrower. The management agent will not be paid any monthly fees for bookkeeping and/or accounting services.

8. Other operating expense estimates are based on Appraiser estimates and are supported by market comparables.

9. Replacement Reserves in the amount of $300 per unit per year meet the RFA and Rule requirement. Reserves are escalated at 3% per year per Syndicator requirements.

10. A 15‐year income and expense projection shows increasing debt service coverage (“DSC”) through year fifteen (15). This projection is attached to this report as Exhibit 1.

EXHIBIT A of 42

SMG

NOVEMBER 21, 2016

Section B

Loan Conditions

HC Allocation Recommendation and Contingencies

EXHIBIT A of 42


PELICAN POINTE APARTMENTS PAGE B-1

NOVEMBER 21, 2016

Special Conditions

These recommendations are contingent upon the review and approval of the following items by SMG and Florida Housing at least 30 days prior to real estate loan closing. Failure to receive approval of these items within this time frame may result in postponement of the Loan closing.

None

General Conditions

This recommendation is contingent upon the review and approval of the following items by SMG and Florida Housing at least 30 days prior to real estate loan closing. Failure to receive approval of these items within this time frame may result in postponement of the loan closing.

1. Borrower to comply with any and all recommendations noted in the Plan and Cost Review prepared by On Solid Ground, LLC.

2. Signed and sealed survey, dated within 90 days of closing, unless otherwise approved by Florida Housing, and its legal counsel, based upon the particular circumstances of the transaction. The Survey shall be certified to Florida Housing and its legal counsel, as well as the title insurance company, and shall indicate the legal description, exact boundaries of the Development, easements, utilities, roads, and means of access to public streets, total acreage and flood hazard area, and any other requirements of Florida Housing.

3. Building permits and any other necessary approvals and permits (e.g., final site plan approval, water management district, Department of Environmental Protection, Army Corps of Engineers, Department of Transportation, etc.). Acceptable alternatives to this requirement are receipt and satisfactory review of a letter from the local permitting and approval authority that the above referenced permits and approvals will be issued upon receipt of applicable fees (with no other conditions), or evidence of 100% lien‐free completion, if applicable. If a letter is provided, copies of all permits will be required as a condition of the first post‐closing draw.

4. Final sources and uses of funds itemized by source and line item, in a format and in amounts approved by the Servicer. A detailed calculation of the construction interest based on the final draw schedule (see below), documentation of the closing costs, and draft loan closing statement must also be provided. The sources and uses of funds schedule will be attached to the Funding Loan Agreement as the approved Development budget.

5. A final construction draw schedule showing itemized sources and uses of funds for each monthly draw. SAIL Program loan proceeds shall be disbursed during the construction phase in an amount per draw that does not exceed the ratio of the SAIL loan to the total development costs, unless otherwise approved by the Credit Underwriter. ELI loan proceeds shall be disbursed during the construction phase in an amount per draw which does not exceed the ratio of the ELI loan to the total development cost, unless approved by the Credit Underwriter. The closing draw shall include appropriate backup and ACH wiring instructions.

6. The developer is only allowed to draw a maximum of 50% of the total developer fee during construction, but in no case more than the payable developer fee, which is determined to be “developer’s overhead”. No more than 35% of “developer’s overhead” during construction will be allowed to be disbursed at closing. The remainder of the “developer’s overhead” will be disbursed

EXHIBIT A of 42



NOVEMBER 21, 2016

during construction on a pro rata basis, based on the percentage of completion of the Development, as approved and reviewed by FHFC and Servicer. The remaining unpaid developer fee shall be considered attributable to “developer’s profit” and may not be funded until the Development has achieved 100% lien free completion, and retainage has been released.

7. Evidence of insurance coverage pursuant to the Request for Application governing this proposed transaction and, if applicable, the FHFC Insurance Guide.

8. 100% Payment and Performance (“P&P”) Bonds or a Letter of Credit (“LOC”) in an amount not less than 25% of the construction contract is required in order to secure the construction contract between the general contractor and the Borrower. In either case, Florida Housing must be listed as co‐obligee. The P&P bonds must be from a company rated at least “A‐“ by A.M. Best & Co. with a financial size category of at least FSC VI. Florida Housing and/or legal counsel must approve the source, amount(s) and all terms of the P&P bonds or LOC. If the LOC option is utilized, the LOC must contain “evergreen” language and be in a form satisfactory to the Servicer, Florida Housing, and its Legal Counsel.

9. Architect, Construction Consultant, and Borrower certifications on forms provided by Florida Housing will be required for both design and as‐built with respect to Section 504 of the Rehabilitation Act, the Americans with Disabilities Act (“ADA”), and Federal Fair Housing Act requirements, as applicable.

10. A copy of an Amended and Restated Operating Agreement reflecting purchase of the HC under terms consistent with the assumptions contained within this Credit Underwriting Report. The Amended and Restated Operating Agreement shall be in a form and of financial substance satisfactory to Servicer and to FHFC and its Legal Counsel.

11. Satisfactory resolution of any outstanding past due and/or noncompliance issues.

12. Payment of any outstanding arrearages to the Corporation, its legal counsel, Servicer or any agent or assignee of the Corporation for past due issues applicable to the Development team (Applicant or Developer or Principal, Affiliate or Financial Beneficiary, as described in 67‐21.0025 (5) F.A.C. and 67‐48.0075 (5) F.A.C., of an Applicant or a Developer).

13. At all times there will be undisbursed loan funds (collectively held by Florida Housing, the first lender and any other source) sufficient to complete the Development. If at any time there are not sufficient funds to complete the Development, the Borrower will be required to expend additional equity on Development costs or to deposit additional equity with Florida Housing which is sufficient (in Florida Housing’s judgment) to complete the Development before additional loan funds are disbursed. This condition specifically includes escrowing at closing all equity necessary to complete construction or another alternative acceptable to Florida Housing in its sole discretion.

14. Final “as permitted” (signed and sealed) site plans, building plans and specifications. The geotechnical report, if any, must be bound within the final plans and specifications.

15. At the end of the Compliance Period, any remaining balance of the ODR less amounts that may be permitted to be drawn (which includes Deferred Developer Fee and reimbursements for authorized member/partner and guarantor loan(s) pursuant to the operating/partnership agreement), will be used to pay FHFC debt; if there is no FHFC loan

EXHIBIT A of 42



NOVEMBER 21, 2016

debt on the proposed Development at the end of the Compliance Period, any remaining balance shall be used to pay any outstanding FHFC fees. If any balance is remaining in the ODR after the payments above, the amount should be placed in a Replacement Reserve account for the Development. In no event shall the payments of amounts to Applicant or the Developer from the Reserve Account cause the Developer fee or General Contractor Fee to exceed the applicable percentage limitations provided for in the Rule. Any and all terms and conditions of the ODR must be acceptable to FHFC, its Loan Servicer and its Legal Counsel.

This recommendation is contingent upon the review and approval of the following items by Florida Housing and its legal counsel at least 30 days prior to real estate loan closing. Failure to receive approval of these items within this time frame may result in postponement of the loan closing.

1. Documentation of the legal formation and current authority to transact business in Florida for the Borrower, the general partner/member(s)/principal(s)/manager(s) of the Borrower, the guarantors, and any limited partners/members of the Borrower.

2. Signed and sealed survey, dated within 90 days of closing, unless otherwise approved by Florida Housing, and its legal counsel, based upon the particular circumstances of the transaction. The Survey shall be certified to Florida Housing and its legal counsel, as well as the title insurance company, and shall indicate the legal description, exact boundaries of the Development, easements, utilities, roads, and means of access to public streets, total acreage and flood hazard area, and any other requirements of Florida Housing.

3. An acceptable updated Environmental Audit Report, together with a reliance letter to Florida Housing, prepared within 90 days of MMRB, SAIL and ELI loan closing, unless otherwise approved by Florida Housing, and legal counsel, based upon the particular circumstances of the transaction. Borrower to comply with any and all recommendations noted in the Environmental Assessment(s) and Update and the Environmental Review, if applicable.

4. Title insurance pro‐forma or commitment for title insurance with copies of all Schedule B exceptions, in the amount of the MMRB Loan plus the SAIL and ELI loans naming FHFC as the insured. All endorsements required by Florida Housing shall be provided.

5. Florida Housing and its legal counsel shall review and approve all other lenders closing documents and the Operating Agreement or other applicable agreement. Florida Housing shall be satisfied in its sole discretion that all legal and program requirements for the Loans have been satisfied.

6. Evidence of insurance coverage pursuant to the Request for Application governing this proposed transaction and, if applicable, the FHFC Insurance Guide.

7. Receipt of a legal opinion from the Borrower’s legal counsel acceptable to Florida Housing addressing the following matters:

a. The legal existence and good standing of the Borrower and of any partnership or limited liability company that is the general partner of the Borrower (the "GP") and of any corporation or partnership that is the managing general partner of the GP, of any corporate guarantor and any manager.;

EXHIBIT A of 42



NOVEMBER 21, 2016

b. Authorization, execution, and delivery by the Borrower and the guarantors, of all Loan documents;

c. The Loan documents being in full force and effect and enforceable in accordance with their terms, subject to bankruptcy and equitable principles only;

d. The Borrower's and the guarantor's execution, delivery and performance of the loan documents shall not result in a violation of, or conflict with, any judgments, orders, contracts, mortgages, security agreements or leases to which the Borrower is a party or to which the Development is subject to the Borrower’s Partnership/Operating Agreement and;

e. Such other matters as Florida Housing or its legal counsel may require.

8. Evidence of compliance with local concurrency laws, as applicable.

9. UCC Searches for the Borrower, its partnerships, as requested by legal counsel.

10. Such other assignments, affidavits, certificates, financial statements, closing statements, and other documents as may be reasonably requested by Florida Housing or its legal counsel in form and substance acceptable to Florida Housing and its legal counsel, in connection with the loan(s).

11. Any other reasonable conditions established by Florida Housing and its legal counsel.

Additional Conditions

This recommendation is also contingent upon the following additional conditions:

1. Compliance with all provisions of Sections 420.507, 420.5087 and 420.509, Florida Statutes, Rule Chapters 67‐21, 67‐48, 67‐53, and 67‐60, F.A.C., RFA 2015‐112, Section 42 I.R.C., and any other State and Federal requirements.

2. Development and execution by the Borrower of the required Memorandum of Understanding (“MOU”) with a designated supportive services lead agency to assist Persons with a Disabling Condition, as outlined in Section Four A.7.b. (2) of the RFA due to Florida Housing six (6) months prior to the anticipated placed‐in‐service date stated by the Applicant which is anticipated to be 12/1/2017.

3. Acceptance by the Borrower and execution of all documents evidencing and securing the MMRB Loan and First Mortgage Loan in form and substance satisfactory to Florida Housing and its legal counsel, including, but not limited to, the Promissory Note(s), the Funding Loan Agreement(s), the Mortgage and Security Agreement(s), the Land Use Restriction Agreement(s), and Extended Low Income Housing Agreement(s).

4. Acceptance by the Borrower and execution of all documents evidencing and securing the SAIL and ELI Loan in form and substance satisfactory to Florida Housing and its legal counsel, including, but not limited to, the Promissory Note(s), the Loan Agreement(s), the Mortgage and Security Agreement(s), the Land Use Restriction Agreement(s), and Extended Low Income Housing Agreement(s).

5. All amounts necessary to complete construction must be deposited with the Trustee prior to Loan Closing, or any phased HC Equity pay‐in of amount necessary to complete construction shall be contingent upon an unconditional obligation, through a Joint Funding Agreement or other mechanism acceptable to Florida Housing, of the entity providing HC Equity payments (and evidence

EXHIBIT A of 42



NOVEMBER 21, 2016

that 100% of such amount is on deposit with such entity at Loan Closing) to pay, regardless of any default under any documents relating to the HC as long as the First Mortgage continues to be funded.

6. If applicable, receipt and satisfactory review of Financial Statements from all Guarantors dated within 90 days of Real Estate Closing.

7. Guarantors are to provide the standard FHFC Construction Completion Guarantee, to be released upon lien free completion as approved by the Servicer.

8. Guarantors for the MMRB Loan are to provide the standard FHFC Operating Deficit Guarantee. If requested in writing by the Applicant, Servicer will consider a recommendation to release the Operating Deficit Guarantee if all conditions are met, including achievement of a 1.15 DSC on the First Mortgage (MMRB Program Loan), 90% Occupancy and 90% of Gross Potential Rental Income net of utility allowances, if applicable, for a period equal to twelve (12) consecutive months, all certified by an independent Certified Public Accountant (“CPA”). The calculation of the debt service coverage ratio shall be made by Florida Housing or the Servicer. Notwithstanding the above, the Operating Deficit Guarantee shall not terminate earlier than three (3) years following the final certificate of occupancy.

9. Guarantors for the SAIL are to provide the standard FHFC Operating Deficit Guarantee. If requested in writing by the Applicant, Servicer will consider a recommendation to release the Operating Deficit Guarantee if all conditions are met, including achievement of a 1.15 DSC on the combined permanent first mortgage and SAIL, 90% Occupancy and 90% of Gross Potential Rental Income net of utility allowances, if applicable, for a period equal to twelve (12) consecutive months, all certified by an independent Certified Public Accountant (“CPA”). The calculation of the debt service coverage ratio shall be made by Florida Housing or the Servicer. Notwithstanding the above, the Operating Deficit Guarantee shall not terminate earlier than three (3) years following the final certificate of occupancy.

10. Guarantors are to provide the standard FHFC Environmental Indemnity Guaranty.

11. Guarantors are to provide the standard FHFC Guaranty of Recourse Obligations.

12. A mortgagee title insurance lender’s policy naming Florida Housing as the insured first, second, and third mortgage holder in the amount of the Loans is to be issued at closing. Any exceptions to the title insurance policy must be acceptable to Florida Housing or its legal counsel. All endorsements that are required by Florida Housing are to be issued and the form of the title policy must be approved prior to closing.

13. Property tax and hazard insurance escrows are to be established and maintained by the First Lender or the Servicer. In the event the reserve account is held by Florida Housing’s loan servicing agent, the release of funds shall be at Florida Housing’s sole discretion.

14. Replacement Reserves in the minimum amount of $300 per unit per year are required to be deposited on a monthly basis into a designated escrow account, to be maintained by the First Mortgagee/Credit Enhancer, the Trustee, or Florida Housing’s loan servicing agent. However, Applicant has the option to prepay Replacement Reserves, as allowed per RFA, in the amount of $23,400 (one‐half the required Replacement Reserves for Years 1 and 2), in order to meet the

EXHIBIT A of 42



NOVEMBER 21, 2016

applicable DSC loan requirements. Applicant can waive this election, if at closing of the loan(s) the required DSC is met without the need to exercise the option. The initial Replacement Reserve will have limitations on the ability to be drawn. New construction or Redevelopment Developments (with or without acquisition) shall not be allowed to draw during the first five years or until the establishment of a minimum balance equal to the accumulation of five years of replacement reserves per unit.

The amount established as a Replacement Reserve shall be adjusted based on a Capital Needs Assessment (“CNA”) to be received by the Corporation or its servicers, prepared by an independent third party and acceptable to the Corporation and its servicers at the time the CNA is required, beginning no later than the 10th year after the first residential building in the Development receives a certificate of occupancy, a temporary certificate of occupancy, or is placed in service, whichever is earlier (“Initial Replacement Reserve Date”). A subsequent CNA is required no later than the 15th year after the Initial Replacement Reserve Date and subsequently every five (5) years thereafter.

FHFC requirements are applicable for the SAIL and ELI mortgages. Per the R4 Capital proposal, replacement reserves will be no less than $300 per unit per year. Per the R4 Equity proposal, replacement reserves will be the greater of (1) $300 per unit per year, escalating at 3.00% per annum; (2) such amount as determined necessary by the Limited Partner upon regular reviews of the physical needs and financial circumstances of the Development.

15. On Solid Ground, LLC, or other construction inspector acceptable for Florida Housing, is to act as Florida Housing’s inspector during the construction period.

16. Under the Pelican Pointe Apartments construction contract, a minimum of 10% retainage holdback on all construction draws until 50% completion is required, at which time 5% retainage will be withheld. Retainage will not be released until successful lien free completion of construction and issuance of all certificates of occupancy, which satisfies Florida Housing’s minimum requirement.

17. Satisfactory completion of a pre‐loan closing compliance audit conducted by Florida Housing or its Servicer, if applicable.

18. Closing of all funding sources prior to or simultaneous with the closing of the MMRB, SAIL and ELI loans.

19. Any other reasonable requirements of the Servicer, Florida Housing or its legal counsel.

EXHIBIT A of 42



NOVEMBER 21, 2016

Housing Credit Allocation Recommendation

Seltzer Management Group, Inc. recommends a preliminary annual Housing Credit allocation of $366,348. Please see the HC Allocation Calculation section of this report for further details.

Contingencies

The HC allocation recommendation is contingent upon the receipt and satisfactory review of the following items by SMG and the Florida Housing Finance Corporation by the deadline established in the Preliminary HC Allocation. Failure to submit these items within this time frame may result in forfeiture of the HC Allocation.

1. All items listed under the Special Conditions section of the Loan Conditions to Close.

2. Satisfactory resolution of any outstanding past due items and/or noncompliance issues.

3. Any reasonable requirements of Florida Housing and/or SMG.

EXHIBIT A of 42

Exhibit 1

Pelican Pointe

15 Year Income and Expense Projection

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15

$608,856 $621,033 $633,454 $646,123 $659,045 $672,226 $685,671 $699,384 $713,372 $727,639 $742,192 $757,036 $772,177 $787,620 $803,373

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$18,720 $19,094 $19,476 $19,866 $20,263 $20,668 $21,082 $21,503 $21,933 $22,372 $22,820 $23,276 $23,741 $24,216 $24,701

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$627,576 $640,128 $652,930 $665,989 $679,308 $692,895 $706,753 $720,888 $735,305 $750,011 $765,012 $780,312 $795,918 $811,836 $828,073

Economic Loss ‐ Percentage:

Physical Vacancy Loss ‐ Percentage: 5.0% ($31,379) ($32,006) ($32,647) ($33,299) ($33,965) ($34,645) ($35,338) ($36,044) ($36,765) ($37,501) ($38,251) ($39,016) ($39,796) ($40,592) ($41,404)

Collection Loss ‐ Percentage: 1.0% ($6,276) ($6,401) ($6,529) ($6,660) ($6,793) ($6,929) ($7,068) ($7,209) ($7,353) ($7,500) ($7,650) ($7,803) ($7,959) ($8,118) ($8,281)

$589,921 $601,720 $613,754 $626,029 $638,550 $651,321 $664,347 $677,634 $691,187 $705,011 $719,111 $733,493 $748,163 $763,126 $778,389

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$30,115 $31,018 $31,949 $32,907 $33,895 $34,912 $35,959 $37,038 $38,149 $39,293 $40,472 $41,686 $42,937 $44,225 $45,552

$40,950 $42,179 $43,444 $44,747 $46,090 $47,472 $48,896 $50,363 $51,874 $53,430 $55,033 $56,684 $58,385 $60,136 $61,941

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Management Fee ‐ Percentage: 4.5% $26,546 $27,077 $27,619 $28,171 $28,735 $29,309 $29,896 $30,494 $31,103 $31,725 $32,360 $33,007 $33,667 $34,341 $35,027

$29,250 $30,128 $31,031 $31,962 $32,921 $33,909 $34,926 $35,974 $37,053 $38,165 $39,310 $40,489 $41,704 $42,955 $44,243

$93,600 $96,408 $99,300 $102,279 $105,348 $108,508 $111,763 $115,116 $118,570 $122,127 $125,791 $129,564 $133,451 $137,455 $141,578

$46,800 $48,204 $49,650 $51,140 $52,674 $54,254 $55,882 $57,558 $59,285 $61,063 $62,895 $64,782 $66,726 $68,727 $70,789

$5,850 $6,026 $6,206 $6,392 $6,584 $6,782 $6,985 $7,195 $7,411 $7,633 $7,862 $8,098 $8,341 $8,591 $8,849

$39,000 $40,170 $41,375 $42,616 $43,895 $45,212 $46,568 $47,965 $49,404 $50,886 $52,413 $53,985 $55,605 $57,273 $58,991

$11,700 $12,051 $12,413 $12,785 $13,168 $13,564 $13,970 $14,390 $14,821 $15,266 $15,724 $16,196 $16,681 $17,182 $17,697

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$11,700 $12,051 $12,413 $12,785 $13,168 $13,564 $13,970 $14,390 $14,821 $15,266 $15,724 $16,196 $16,681 $17,182 $17,697

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$23,400 $24,102 $24,825 $25,570 $26,337 $27,127 $27,941 $28,779 $29,642 $30,532 $31,448 $32,391 $33,363 $34,364 $35,395

$358,911 $369,413 $380,225 $391,356 $402,814 $414,612 $426,757 $439,261 $452,133 $465,386 $479,031 $493,078 $507,540 $522,430 $537,759

$231,010 $232,307 $233,529 $234,674 $235,735 $236,709 $237,591 $238,374 $239,054 $239,624 $240,080 $240,415 $240,623 $240,696 $240,629

$179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944 $179,944

$51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053 $51,053

$3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321 $3,321

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318 $234,318

($3,309) ($2,012) ($789) $355 $1,417 $2,391 $3,272 $4,055 $4,735 $5,306 $5,762 $6,097 $6,304 $6,378 $6,311

1.284 1.291 1.298 1.304 1.310 1.315 1.320 1.325 1.328 1.332 1.334 1.336 1.337 1.338 1.337

1.000 1.006 1.011 1.016 1.021 1.025 1.029 1.032 1.035 1.037 1.039 1.041 1.042 1.042 1.042

0.986 0.991 0.997 1.002 1.006 1.010 1.014 1.017 1.020 1.023 1.025 1.026 1.027 1.027 1.027

0.986 0.991 0.997 1.002 1.006 1.010 1.014 1.017 1.020 1.023 1.025 1.026 1.027 1.027 1.027

60.8% 61.4% 62.0% 62.5% 63.1% 63.7% 64.2% 64.8% 65.4% 66.0% 66.6% 67.2% 67.8% 68.5% 69.1%

94.5% 94.3% 94.1% 93.9% 93.8% 93.7% 93.5% 93.4% 93.4% 93.3% 93.2% 93.2% 93.2% 93.2% 93.2%

FINANCIAL COSTS:

OPERATING PRO FORMA

Gross Potential Rental Income

Other Income:

Washer/Dryer Rentals

INCOME

Cable/Satellite Income

Payroll Expenses

Rent Concessions

Alarm Income

Gross Potential Income

Less:

Total Effective Gross Revenue

Fixed:

Real Estate Taxes

EXPEN

SES

Insurance

Variable:

General and Administrative

Contract Services

Security

Other‐Pest Control

Third Mortgage (Fees Only)

Other Fees ‐

Other Fees ‐ Agency/Trustee/Servicer

Total Debt Service Payments

First Mortgage Debt Service + Fees

Total Expenses

Net Operating Income

Utilities

Marketing and Advertising

Maintenance and Repairs

Grounds Maintenance and Landscaping

Resident Programs

Debt Service Payments

Operating Expense Ratio

Break‐Even Ratio

Rent Subsidy (ODR)

Ancillary Income‐Parking

Miscellaneous

Ground Lease

Sub‐Ground Lease

Other

Reserve for Replacements

Debt Service Coverage Ratios

DSC ‐ MMRB First Mtg. and SAIL Second Mtg + Fees

DSC ‐ All Mortgages and Fees

Financial Ratios

DSC ‐ MMRB First Mtg., SAIL Second Mtg. and ELI Third

Mtg. Loan + Fees

Cash Flow After Debt Service

Fourth Mortgage

Fifth Mortgage

All Other Mortgages

DSC ‐ MMRB First Mortgage loan + Fees

DEB

T SERVICE Second Mortgage Debt Service + Fees

Seltzer Management Group, Inc. Page 1 of 1 11/21/2016

EXHIBIT A of 42


PELICAN POINTE APARTMENTS EXHIBIT 2 – PAGE 1

November 16, 2016

DESCRIPTION OF FEATURES AND AMENITIES

A. The Development will consist of:

78 Garden Apartments located in 3 residential buildings. Unit Mix: Forty-five (45) two bedroom/two bath units; Twenty-seven (27) three bedroom/two bath units; and Six (6) four bedroom/two bath units. 78 Total Units B. The Development must meet all requirements of local, state & federal laws, rules,

regulations, ordinances, orders and codes, Federal Fair Housing Act as implemented by 24 CFR 100, the 2012 Florida Accessibility Code for Building Construction as adopted pursuant to Section 553.503, F.S., Section 504 of the Rehabilitation Act of 1973, and Titles II and III of the Americans with Disabilities Act (“ADA”) of 1990 as implemented by 28 CFR 35, incorporating the most recent amendments, regulations, and rules, as applicable.

C. The following General Features must be provided:

1. Termite prevention;

2. Pest control;

3. Window covering for each window and glass door inside each unit;

4. Cable or satellite TV hook-up in each unit and, if the Development offers cable or satellite TV service to the residents, the price cannot exceed the market rate for service of similar quality available to the Department’s residents from a primary provider of cable or satellite TV;

5. Full-size range and oven in all units; 6. At least two full bathrooms in all 3 bedroom or larger new construction units; 7. Bathtub with shower in at least one bathroom in at least 90% of the new

construction non-Elderly units; and 8. Washer and dryer hook ups in each of the Development’s units or an on-site

laundry facility for resident use. If the proposed Development consists of an on-

EXHIBIT A of 42



November 16, 2016

site laundry facility, there must be a minimum of one (1) Energy Star qualified washer and one (1) dryer per every 15 units. To determine the required number of washers and dryers for the on-site laundry facility; divide the total number of the Developments’ units by 15, and then round the equation’s total up to the nearest whole number.

D. The Development must provide the following Accessibility, Universal Design and Visitability

Features:

All units must meet accessibility standards of Section 504. Section 504 accessibility standards require a minimum of 5 percent of the total dwelling units, but not fewer than one unit, to be accessible for individuals with mobility impairments. An additional 2 percent of the total units, but not fewer than one unit, must be accessible for persons with hearing or vision impairments.

All new construction units that are located on an accessible route must have the features below:

1. Primary entrance door shall have a threshold with no more than a ½-inch rise;

2. All door handles on primary entrance door and interior doors must have lever handles;

3. Lever handles on all bathroom faucets and kitchen sink faucets;

4. Mid-point on light switches and thermostats shall not be more than 48 inches

above finished floor level; and

5. Cabinet drawer handles and cabinet door handles in bathroom and kitchen shall be lever or D-pull type that operate easily using a single closed fist.

E. Provide reinforced walls for future installation of grab bars that meet or exceed 2010 ADA Standards for Accessible Design around each tub/shower unit in each dwelling unit. At the request of and at no charge to a resident household, the Development shall purchase and install grab bars around each tub/shower unit in the dwelling unit. The product specifications and installation must meet or exceed 2010 ADA Standards for Accessible Design. The Development shall inform a prospective resident that the Development, upon a resident household’s request and at no charge to the household, will install grab bars around a dwelling unit’s tub/shower unit, pursuant to the 2010 ADA Standards. At a minimum, the Development shall inform each prospective lessee by including language in the Development’s written materials listing and describing the unit’s features, as well as including the language in each household’s lease.

F. Green Building Features required in all Family Demographic Developments:

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November 16, 2016

a. Low or No-VOC paint for all interior walls (Low-VOC means 50 grams per liter or less for flat; 150 grams per liter or less for non-flat paint);

b. Low-flow water fixtures in bathrooms – WaterSense labeled products or the

following specifications: i. Faucets: 1.5 gallons/minute or less, and

ii. Showerheads: 2.0 gallons/minute or less;

c. Energy Star qualified refrigerator; d. Energy Star qualified dishwasher; e. Energy Star qualified ventilation fan in all bathrooms; f. Energy Star water heater; g. Energy Star qualified ceiling fans with lighting fixtures in bedrooms; and h. Air Conditioning minimum efficiency specifications:*

i. In-unit air conditioning: Minimum 15 SEER ii. Packaged units are allowed in studio/efficiency units and one-bedroom

units: Minimum 13.8 EER; or iii. Central chiller AC system – based on size:

a. 0-65 KBtuh: Energy Star certified; or b. >65-135 KBtuh: 11.9 EER; or c. >135-240 KBtuh: 12.3 EER; or d. >240 KBtuh: 12.2 EER

*Applicants who select higher efficiency HVAC as Green Building Features at question 9a. of Exhibit A must meet or exceed those standards, which exceed these minimum requirements.

G. The Applicant has committed to provide the following additional Green Building

Features to achieve a total point value of at least 10 points: 1. _X_ Programmable thermostat in each unit (2 points)

2. ___ Humidistat in each unit (2 points) 3. _X_ Water Sense certified dual flush toilets in all bathrooms (2 points) 4. ___ Light colored concrete pavement instead of or on top of asphalt to reduce the

heat-island effect (2 points) 5. ___ Energy star qualified roof coating (2 points)*

EXHIBIT A of 42



November 16, 2016

6. ___ Energy star qualified roofing materials (metal, shingles, thermoplastic polyolefin (TPO), or tiles) (3 points)

7. ___ Eco-friendly cabinets – formaldehyde free and material must be certified by

the Forest Stewardship Council or a certification program endorsed by the Programme for the Endorsement of Forest Certification (3 points)

8. ___ Eco-friendly flooring for entire unit – Carpet and Rug Institute Green Label

certified carpet and pad, bamboo, cork, 80 percent recycled content tile, and/or natural linoleum (3 points)

9. _X_ High Efficiency HVAC with SEER of at least 16 (2 points)**

10. _X_ Energy efficient windows in each unit ( 3 points) 11. _X_ Florida Yards and Neighborhoods certification on all landscaping (2 points) 12. ___ Install daylight sensors, timers or motion detectors on all outdoor lighting

attached to buildings (2 points)

* The Applicant may choose only one option related to Energy Star qualified roofing.

**Applicants who choose high efficiency HVAC(s) must meet the standards listed here, which exceed the minimum Green Building Features required of all Developments in Exhibit C.

H. The Applicant must provide the following Resident Programs:

1. Literacy Training – The Applicant or its Management Company must make available, at no cost to the resident, literacy tutor(s) who will provide weekly literacy lessons to residents in private space on-site. Electronic media, if used, must be used in conjunction with live instruction. If the Development consists of Scattered Sites, this resident program must be provided on the Scattered Site with the most units. 2. Employment Assistance Program – The Applicant or its Management Company must provide, at no cost to the resident, a minimum of quarterly scheduled Employment Assistance Program workshops/meetings offering employment counseling by a knowledgeable employment counselor. Such a program includes employability skills workshops providing instruction in the basic skills necessary for getting, keeping, and doing well in a job. The instruction must include, but not be limited to, the following:

Evaluation of current job skills; Assistance in setting job goals; Assistance in development of and regular review/update of individualized

plan for each participating resident;

EXHIBIT A of 42



November 16, 2016

Resume assistance; Interview preparation; and Placement and follow-up services.

3. Family Support Coordinator – The Applicant must provide a Family Support Coordinator at no cost to the resident. The Family Support Coordinator shall assist residents in assessing needs and obtaining services, with the goal of promoting successful tenancies and helping residents achieve and maintain maximum independence and self-sufficiency. Responsibilities shall include linking residents with public and private resources in the community to provide needed assistance, develop and oversee on-site programs and activities based on the needs and interests of residents, and support residents in organizing activities to build community and to address and solve problems such as crime and drug activity. The duties of the Family Support Coordinator shall not be performed by property management staff. The Coordinator shall be on-site and available to resident at least 20 hours per week, within the hours of 9 a.m. and 8 p.m. The Coordinator may be an employee of the Development or, through an agreement, an employee of a third party agency or organization that provides these services.

EXHIBIT A of 42



NOVEMBER 21, 2016

COMPLETENESS AND ISSUES CHECKLIST

DEVELOPMENT NAME: Pelican Pointe Apartments __________ _________________

DATE: November 21, 2016 _____

In accordance with applicable Program Rule(s), the Borrower is required to submit the information required to evaluate, complete, and determine its sufficiency in satisfying the requirements for Credit Underwriting to the Credit Underwriter in accordance with the schedule established by the Florida Housing Finance Corporation (“Florida Housing” or “FHFC”). The following items must be satisfactorily addressed. “Satisfactorily” means that the Credit Underwriter has received assurances from third parties unrelated to the Borrower that the transaction can close within the allotted time frame. Unsatisfactory items, if any, are noted below and in the “Issues and Concerns” section of the Executive Summary.

CREDIT UNDERWRITING

REQUIRED ITEMS:

STATUS NOTE

Satis. /Unsatis.

1. The Development’s final “as submitted for permitting” plans and specifications.

Note: Final “signed, sealed, and approved for construction” plans and specifications will be required thirty days before closing.

Satis.

2. Final site plan and/or status of site plan approval. Satis.

3. Permit Status. Satis.

4. Pre‐construction analysis (“PCA”). Satis.

5. Survey. Satis.

6. Complete, thorough soil test reports. Satis.

7. Full or self‐contained appraisal as defined by the Uniform Standards of Professional Appraisal Practice.

Satis.

8. Market Study separate from the Appraisal. Satis.

9. Environmental Site Assessment – Phase I and/or Phase II if applicable (If Phase I and/or II disclosed environmental problems requiring remediation, a plan, including time frame and cost, for the remediation is required). If the report is not dated within one year of the application date, an update from the assessor must be provided indicating the current environmental status.

Satis.

10. Audited financial statements for the most recent fiscal year ended or acceptable alternative as stated in the Rule for credit enhancers, Borrower, general partner, principals, guarantors and general contractor.

Satis.

11. Resumes and experience of Borrower, general contractor and management Satis.

EXHIBIT A of 42



NOVEMBER 21, 2016

agent.

12. Credit authorizations; verifications of deposits and mortgage loans. Satis.

13. Management Agreement and Management Plan. Satis.

14. Firm commitment from the credit enhancer or private placement purchaser, if any.

Satis.

15. Firm commitment letter from the syndicator, if any. Satis.

16. Firm commitment letter(s) for any other financing sources. Satis.

17. Updated sources and uses of funds. Satis.

18. Draft construction draw schedule showing sources of funds during each month of the construction and lease‐up period.

Satis.

19. Fifteen‐year income, expense, and occupancy projection. Satis.

20. Executed general construction contract with “not to exceed” costs. Satis.

21. HC ONLY: 15% of the total equity to be provided prior to or simultaneously with the closing of the construction financing.

Satis.

22. Any additional items required by the credit underwriter. Satis.

NOTES AND APPLICANT’S RESPONSES:

None

EXHIBIT A of 42


PELICAN POINTE APARTMENTS EXHIBIT 4 - PAGE 1

NOVEMBER 21, 2016

HC Allocation Calculation

$11,696,916

Less Land Cost $0

Less Federal Funds $0

Less Other Ineligible Cost ($728,427)

Less Disproportionate Standard $0

$10,968,489

100.00%

100.00%

$10,968,489

3.34%

$366,348

Section I: Qualified Basis Calculation

Development Cost

Total Eligible Basis

Applicable Fraction

DDA/QCT Basis Credit

Qualified Basis

Housing Credit Percentage

Annual Housing Credit Allocation

Notes to the Qualified Basis Calculation:

1. Other Ineligible Costs primarily include FHFC administrative, application and HC compliance fees, marketing, legal fees, permanent loan origination and commitment fees and closing costs, reserves required by the syndicator, and bond costs of issuance.

2. The Borrower committed to a set aside of 100%. Therefore, SMG has utilized an Applicable Fraction of 100.00%.

3. Per the Application, this Development is not located in a Difficult Development Area or Qualified Census Tract. Therefore, the 100% basis credit has been applied.

4. A Housing Credit Percentage of 3.34% is used based on a rate of 3.19% as of the March 2016 date of invitation into credit underwriting plus 15 basis points.

$11,696,916

Less Mortgages ($7,255,410)

Less Grants $0

$4,441,506

99.99%

$1.10

$4,038,250

$403,825

Section II: Gap Calculation

Total Development Cost (Including Land and Ineligible Costs)

Equity Gap

Percentage to Investment Partnership

HC Syndication Pricing

HC Required to Meet Gap

Annual HC Required

Notes to the Gap Calculation:

EXHIBIT A of 42


PELICAN POINTE APARTMENTS EXHIBIT 4 - PAGE 2

NOVEMBER 21, 2016

1. Mortgages are the FHFC/R4 first mortgage, FHFC SAIL second mortgage and the FHFC ELI third mortgage.

2. HC Syndication Pricing and Percentage to Investment Partnership are based upon the July 21, 2016 LOI from R4.

$10,968,489

Plus Land Cost $0

$10,968,489

$5,500,000

Less Debt Service Reserve $0

Less Proceeds Used for Costs of Issuance $0

Plus Tax‐exempt GIC earnings $0

$5,500,000

50.14%Proceeds Divided by Aggregate Basis

Total Depreciable Cost

Aggregate Basis

Tax‐Exempt Bond Amount

Tax‐Exempt Bond 50% Test

Tax‐Exempt Proceeds Used for Building and Land

Notes to 50% Test:

1. SMG estimates the Tax‐Exempt MMRB amount to be 50.14% of Depreciable Development Costs plus Land Acquisition Costs. If, at the time of Final Cost Certification, the Tax‐Exempt Bond Amount is less than 50%, developer fees will have to be reduced by an amount to ensure compliance with the 50% Test. That may, in turn, result in a reduction to HC Equity.

$366,348

$403,825

$366,348

HC per Gap Calculation

Annual HC Recommended

HC per Qualified Basis

Section III: Summary

Notes to the Summary:

1. The Annual HC Recommended is based on the Qualified Basis Calculation.

EXHIBIT A of 42

Florida Housing Finance Corporation · 1. The Application included a Letter of Intent (“LOI”)...

Documents

Transcript of Florida Housing Finance Corporation · 1. The Application included a Letter of Intent (“LOI”)...