Florida Housing Finance Corporation...Oct 13, 2015 · James Chadwick Shawn Wilson Weedon Enterprises, LLC Red Stone Tax Exempt Funding LLC Carteret Management Corporation Raymond

Florida Housing Finance Corporation

Credit Underwriting Report

Cathedral Terrace

RFA 2014‐111 (2014‐426S) / 2015‐502C

State Apartment Incentive Loan Program / Extremely Low Income Gap Program / 4% Non‐Competitive Housing Credits Program

Section A: Report Summary

Section B: SAIL & ELI Gap Loan Special and General Loan Closing Conditions and Housing Credit Allocation Recommendation and Contingencies

Section C: Supporting Information and Schedules

Prepared by

AmeriNational Community Services d/b/a AmeriNat℠ in KY, GA, and FL

Final Report

October 13, 2015

Exhibit B Page 1 of 44

SAIL/ELI GAP/HC PROGRAM CREDIT UNDERWRITING REPORT AMERINAT

October 13, 2015

Cathedral Terrace

TABLE OF CONTENTS

Section A

Report Summary Page Recommendation A1-A9 Overview A10-A15 Uses of Funds A16-A20 Operating Pro forma A21-A23

Section B

SAIL and ELI Gap Loan Special and General Loan Closing Conditions B1-B5 Housing Credit Allocation Recommendation and Contingencies B6

Section C

Supporting Information and Schedules Additional Development & Third Party Information C1-C9 Borrower Information C10-C16 Guarantor Information C17 Permanent Tax-Exempt Loan Provider C18-C19 Syndicator Information C20 General Contractor Information C21-C22 Property Management Information C23-C24

Exhibits

15 Year Pro forma 1 Description of Feature & Amenity Characteristics 2 1-5 HC Allocation Calculation 3 1-3 Completeness and Issues Checklist 4 1-2



October 13, 2015

Section A

Report Summary



CATHEDRAL TERRACE PAGE A‐1 October 13, 2015

Recommendation AmeriNational Community Services d/b/a AmeriNat℠ in KY, GA, and FL (“AmeriNat”) recommends a State Apartment Incentive Loan (“SAIL”) in the amount of $3,200,000, an Extremely Low Income (“ELI”) Gap Loan in the amount of $734,400, and an annual 4% Non-Competitive Housing Credit (“HC”) allocation of $889,441 to Cathedral Terrace 2, Ltd. (“Applicant” or “Borrower”) for the acquisition, rehabilitation, and permanent phase financing of Cathedral Terrace (the “Development”).

Address: City: Zip Code:

County: County Size:

Development Category: Development Type:

Construction Type:

Demographic Commitment: Elderly: Homeless: ELI: Units @ AMIFarmworker or Commercial Fish Worker: Family: Link: Units

X 12 33%24

Concrete; constructed circa 1974

701 North Ocean Street Jacksonville 32202

Duval Large

Acquisition/Rehabilitation 21-story High Rise

DEVELOPMENT & SET‐ASIDESDevelopment Name: Cathedral Terrace

Program Numbers: RFA 2014-111 2014-426S 2015-502C

Unit Type

PBRA

PBRA

HC

$2,061,696240 124920

200 520 60% $713

$713 $518 $518 $518 $99,456

$1,752,000

1.0 1.0 16 520 60% $713 $0

$0 $730 $713 $730 $730 $7301.0 1.0

Appraiser Rents CU Rents

Annual Rental Income

1.0 1.0 24 520 33% $392

Low HOME Rents

High HOME Rents

Utility Allow

RD/HUD Cont Rents

Net HC Rent

Applicant Rents

Bed Rooms

Bath Rooms Units

Square Feet AMI%

Gross HC Rent

$730 $210,240$0 $730 $392 $730 $730

Rental Assistance Units: ____224____ Buildings: Residential - Non-Residential - Parking: Parking Spaces - Accessible Spaces -

1 064 2

Set Asides:

HFA MMRB 90.0% 216 60% 50

SAIL 95.0% 228 60% 50HFA MMRB 10.0% 24 33% 50

HC 95.0% 228 60% 30SAIL/ELI GAP 5.0% 12 33% 50

Program % of Units # of Units % AMI Term (Years)HC 5.0% 12 33% 30

Persons with a Disabling Condition Set-Aside Commitment: The proposed Development must set aside 10% of the total units for Persons with a Disabling Condition that are referred by a supportive services lead agency that serves Persons with a Disabling Condition and are designated by the Corporation. As of the place‐in‐service date for the proposed Development, this requirement will be deemed to be met with any existing units occupied by residents that do not qualify as a Persons with a Disabling Condition; however, this set‐aside commitment must be met as new units are rented after the place-in-service date.




Some or all of the units set aside to meet this 10 percent Persons with a Disabling Condition set-aside commitment can be the same units that are set aside to meet the ELI Set-Aside commitment; however, at least 50% of the Development’s dwelling units set aside for the Persons with a Disabling Condition set-aside commitment shall be ELI Set-Aside units. As required by the Federal Fair Housing Act (the “Act”), at least 80% of the total units will be rented to residents that qualify as Elderly pursuant to the Act. Absorption Rate: units per month for months.

Occupancy Rate at Stabilization: Physical Occupancy Economic OccupancyOccupancy Comments

0 0

95.00% 94.00%91.3% as of 7/13/15 rent roll

DDA?: QCT?:Site Acreage: Density: Flood Zone Designation:Zoning: Flood Insurance Required?:Commercial Residential and Office No

No Yes1.22 196.72 X

Applicant/Borrower:General Partner 1:Limited Partner 1:Special Limited Partner:Guarantor(s):

Pvt Placement Purchaser:Developer:

Principal 1Principal 2Principal 3Principal 4Principal 5

General Contractor 1:Management Company:Syndicator:Bond Issuer:Architect:Market Study Provider:Appraiser:

DEVELOPMENT TEAM

Cathedral Terrace 2, Ltd. % OwnershipCathedral Terrace, Inc. 0.01%Raymond James Tax Credit Funds, Inc. 99.989%

James ChadwickShawn WilsonBlue Sky GE, LLC

Blue Sky SLP, LLC 0.001%Cathedral Terrace 2, Ltd.Cathedral Terrace, Inc.Cathedral Terrace Redevelopment Associates, LLCBlue Sky Communities, LLC

Cathedral Terrace Redevelopment Associates, LLCBlue Sky Communities, LLCCathedral Terrace, Inc.James ChadwickShawn WilsonWeedon Enterprises, LLC

Red Stone Tax Exempt Funding LLC

Carteret Management CorporationRaymond James Tax Credit Funds, Inc.Jacksonville Housing Finance Authority

Sauer Incorporated

Architectonics Studio, Inc.Meridian Appraisal Group, Inc.Meridian Appraisal Group, Inc.




Period of Operating Expenses/Deficit Reserve in Months

5.55

1.07

Operating/Deficit Service Reserve

$916,133

Debt Service Coverage 1.16 1.09 1.09 1.07 1.07

161.7%

Loan to Cost 29.7% 12.5% 2.9% 3.9% 3.14% 9.1%

Restricted Market Financing LTV

78.4% 111.5% 119.0% 129.4% 137.6%

0Market Rate/Market Financing LTV

60.3% 85.6% 91.5% 99.4% 105.8% 124.2%

Amortization 40 0 0 0 0

8.00%Loan Term 40 17 17 40 40 40All In Interest Rate 5.7617% 1.00% 0.00% 1.00% 0.00%

$2,330,000Underwritten Interest Rate

5.7617% 1.00% 0.00% 1.00% 0.00% 8.00%

Amount $7,600,000 $3,200,000 $734,400 $1,000,000 $803,005

6th

Lender/Grantor JHFA/Red Stone FHFC - SAIL FHFC - ELI Gap JHFA City of Jacksonville

Cathedral Terrace, Inc.

Lien Position 1st 2nd 3rd 4th 5th

PERMANENT FINANCING INFORMATION1st Source 2nd Source 3rd Source 4th Source 5th Source 6th Source

Land ValueAs-Is Value (Rehabilitation)

Bond Structure Private placement of Fixed Rate Tax Exempt BondsHousing Credit Syndication Price $1.0200102256Housing Credit Annual Allocation $889,441

Projected Net Operating Income (NOI) - 15 Year $531,293Year 15 Pro Forma Income Escalation Rate 2.00%Year 15 Pro Forma Expense Escalation Rate 3.00%

Rent Restricted Market Financing Stablized Value $9,690,000Projected Net Operating Income (NOI) - Year 1 $566,119

Deferred Developer Fee $929,972$424,336

$7,820,000Market Rent/Market Financing Stabilized Value $12,610,000

Construction/Permanent Sources:

Fifth MortgageSixth MortgageHC EquityDeferred Developer FeeTOTAL

City of Jacksonville $803,005 $803,005 $3,346Cathedral Terrace, Inc. $2,330,000 $2,330,000 $9,708RJTCF $2,699,779 $8,999,264 $37,497

$25,596,641 $25,596,641 $106,653Developer $2,329,457 $929,972 $3,875

FHFC $734,400 $734,400 $3,060JHFA $1,000,000 $1,000,000 $4,167

Third Mortgage - ELI GapFourth Mortgage

JHFA/Red Stone $12,500,000 $7,600,000 $31,667FHFC $3,200,000 $3,200,000 $13,333

First MortgageSecond Mortgage - SAIL

CONSTRUCTION/PERMANENT SOURCES:

Lender Construction Permanent Perm Loan/UnitSource




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? 2

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? 3

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?

X

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

Is the Development in all other material respects the same as presented in the Application? 4

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

1. The Application indicated $16,000,000 in tax-exempt bonds from Jacksonville Housing Finance Authority (“JHFA”) and $9,005,000 in HC equity. Current amounts are $12,500,000 and $8,999,264, respectively. A loan of $1,000,000 from the Jacksonville Housing Finance Authority (“JHFA”), a City of Jacksonville SHIP loan in the amount of $803,005, and a Seller’s Note from Cathedral Terrace, Inc. in the amount of $2,330,000 have been added as funding sources for the Development.

2. The Applicant requested $16,000,000 in tax-exempt bonds. The bond issuance has been reduced to $12,500,000 per a request to JHFA dated September 10, 2015.




3. Total development costs have decreased by $477,559 to $25,596,641 since the application based primarily due to a reduction in land acquisition costs.

4. The initial Limited Partner and 70% member of the Developer, Blue Sky Communities, LLC, altered

their organizational structure as follows:

Application Weedon Enterprises, LLC – 70% member Shawn Wilson – 30% member Proposed Weedon Enterprises, LLC – 66.5% member Shawn Wilson – 28.5% member Scott Macdonald – 5% member

The change was approved at the September 18, 2015 FHFC Board meeting by the FHFC Board of Directors.

The Applicant requested the following changes with respect to the Additional Green Features at the Development:

Delete: • Humidistat in each unit (2 points) • Eco-friendly cabinets – formaldehyde free, material certified by the Forest Stewardship

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

• Florida Yards and Neighborhoods certification on all landscaping (2 points)

Add: • Energy star qualified roofing materials (metal, shingles, thermoplastic polyolefin (TPO), or

tiles (3 points) • Energy star rating for all windows in each unit via replacement of window panes with Energy

star compliant glass in lieu of full window replacement (3 points)

These changes were approved by FHFC via emails as of July 22, 2015 and August 5, 2015. The changes have no substantial material impact to the SAIL/ELI Gap/HC recommendation for this development.

Does the Development Team have any FHFC Financed Developments on the Past Due/Non-Compliance Report? According to the FHFC Asset Management Noncompliance Report dated August 21, 2015, no noncompliance issues exist for the Development Team. According to the FHFC Past Due Report dated August 21, 2015, no past due issues exist for the Development Team.




This recommendation is subject to satisfactory resolution, as determined by Florida Housing, of any outstanding non-compliance or past due issues applicable to the Development Team prior to the loan closings or the issuance of the annual HC recommended herein. Strengths:

1. The Development Team has demonstrated the ability to successfully develop and operate

affordable multifamily rental communities using a variety of different subsidies.

2. The Development currently operates 224 of its units under the Housing Assistant Payments (“HAP”) Program through the U.S. Department of Housing and Urban Development (“HUD”), according to a 20-year HAP Renewal Contract effective July 1, 2014, with an expiration date of June 30, 2034.

3. Per the Market Study completed by Meridian Appraisal Group (“Meridian”) dated March 25, 2015,

the Development has a capture rate for the proposed 240 units set aside at 60% or less of Area Median Income (“AMI”) of 1.6% in the Primary Market Area (“PMA”), defined as a 10-mile diameter circle centered on the Development. The capture rate indicates both a low barrier of entry and a strong demand for affordable housing in the market area.

4. The market study identified the Development’s Competitive Market Area (“CMA”) for the purpose of determining a like-kind inventory of competitive units. There are eight affordable Housing Credit properties with a total of 776 units. The CMA has a weighted average occupancy of 98.5%, which satisfies the minimum 92% occupancy rate.

5. The appraisal indicates that the Development will benefit from the rental rate advantage it will have over market rents. The units set-side for tenants with incomes at or below 33% of AMI will have an advantage over achievable market rents of 116.8%. The units set-side for tenants with incomes at or below 60% of AMI will have an advantage over achievable market rents of 19.2%. The average market rental rates are in excess of 110% of the applicable maximum Housing Credit rental rates for the area.

Other Considerations:

1. Meridian concludes that the Development should not have a long term effect on existing affordable housing supply in the PMA based on current market and economic conditions. Meridian also notes there is one FHFC Guarantee Fund development with Subordinated Mortgage Initiative funds (“SMI”) located within a five mile radius or within the PMA of the Development known as Sundance Pointe. Sundance Pointe, which has a family demographic, had an average occupancy of 96% from January 2015 through July 2015 and is located approximately 4.5 miles from the Development. As such, the Development is not expected to have a negative impact on the property based on the different demographic served and its historical occupancy/performance and maintain its tenants post-rehab. The Development is not subject to location restrictions outlined in the FHFC Non-competitive Application instructions as it is in excess of 2.5 miles from Sundance Pointe.




Issues and Concerns:

1. Mr. Chadwick, a financial beneficiary in the transaction, indicated four separate incidences of bankruptcy/reorganization filings; foreclosure, deed in lieu of foreclosure, short sale, loan default, or payment moratorium; or loan(s) in arrears for principal, interest, taxes, or insurance premiums due.

Mitigating factors: AmeriNat received the following details regarding these items:

a. Botanica Gardens (228 units of market rate multifamily housing located in Mandeville, LA): Chadwick Investment Partnership, Ltd., of which Mr. Chadwick was the sole member, had 12% interest in Botanica Group LLC. Original financing was provided by Regions Bank in August 2006 in the amount of $27,364,031 and the loan matured as of 8/31/10; Mr. Chadwick was a personal guarantor for the loan. The note was acquired by LTP Real Estate Solutions I, LLC. The company could find no alternative financing and amicably agreed to a deed in lieu of foreclosure in September 2010. Mr. Chadwick agreed to a settlement of $125K for full release from his personal guarantee.

b. The Cove (689 units of market rate multifamily housing located in Tampa, FL): Mr. Chadwick and his wife, Cecile, held a 15% interest in Westshore Acquisition Trust Group LLC. Original financing was provided by LB Commercial Mortgage Trust in May 2007 in the amount of $54MM; Mr. Chadwick was a personal guarantor in the transaction. The property located in Tampa, FL was purchased in 2005 with funds provided by Wachovia with the intent to redevelop. The real estate market declined and the owner contributed $14MM of equity to it. Despite renovations and equity contributions, the performance of the asset continued to decline. The partnership filed bankruptcy. A settlement was reached wherein the property was deeded to the lender and Mr. Chadwick paid $375K for a full release of his guarantee as of March 2011.

c. The Villas of Seagate at St. Joseph Sound (33 for-sale townhomes in Dunedin, FL): Mr. Chadwick and his wife held a 49% interest in the managing member of C2FS-Dunedin, LLC. Bank of America (1st mortgage of $2,769,777 in June 2005) and St. Joseph Sound Development Group, Inc. (2nd mortgage) provided the financing. A total of 33 townhomes were built and 28 of the units sold. The remaining five units had a value significantly greater than the 1st mortgage, and the 2nd mortgagee refused to negotiate. The owner entered into a stipulated foreclosure agreement with Bank of America to take back the property in full satisfaction of the debt and releasing the guarantors in August 2009.

d. The Cottages at Green Key (vacant land located in New Port Richey, FL): Mr. Chadwick held a 15% interest in Lagoon Investment Partners LLC. Regions Bank provided acquisition financing of $3,663,782 in March 2006 with Mr. Chadwick listed as a personal guarantor. The Applicant represents that the loan was kept current throughout its term. Regions agreed to accept the property in full satisfaction of the debt in account of a deficiency as of June 2009.




None of the above defaults are related to affordable housing developments, which is in agreement with RFA 2014-111 (“RFA”). In addition, AmeriNat was advised that all of the defaults were settled amicably between the respective Lenders and Mr. Chadwick.

2. AmeriNat concludes the Developer will likely be required to permanently defer $929,972 of developer fee, which is an amount greater than the cumulative cash flow over the first twelve years of operations ($47,279) according to the 15 year operating pro forma prepared in Exhibit 1 to this report, as attached. If the Development is unable to repay the deferred developer fee within the tax credit compliance period, the partnership may be subject to tax credit recapture.

Mitigating factors: According to the Letter of Intent (“LOI”) dated April 22, 2015 from Raymond James Tax Credit Funds, Inc. (“RJTCF”), the General Partner would be obligated to contribute sufficient capital so that the Partnership can pay any amount of the deferred fee outstanding at the end of 14 years. If necessary, part of the development fee, not to exceed $1,500,000, will be deferred beyond the date of the RJTCF Fund's final capital contribution installment, with interest at 6% per annum, and shall be paid in accordance with the terms of allocations of Cash From Operations and Cash from Sale or Refinancing or, if not paid within 14 years after placed-in-service date, from General Partner's capital. Any development fee that cannot be paid by the time of the final capital contribution of the RJTCF Fund or deferred in accordance with the foregoing limitation shall be paid as an excess cost under the Completion Guaranty and will be treated as a loan to the Partnership and paid on the same priority as operating deficit loans, so long as the amount does not exceed $100,000.

Waiver Requests: None Special Conditions:

None Additional Information:

1. In accordance with RFA 2014-111, FHFC limits the Total Development Cost (“TDC”) per unit to a

figure based on the average cost to deliver new construction units and rehabilitation units for proposed Developments requesting Competitive HC. Based on the Application, the Applicant indicated the proposed Development is a non-garden rehabilitation (high-rise in excess of seven stories) and as such is limited to a TDC of no more than $200,700 per unit. Applying the 1.4% escalation factor allowable for acquisition and rehabilitation/moderate rehabilitation/substantial rehabilitation developments, the maximum TDC per unit cost is $203,510. Based on the instructions set forth in Exhibit D.1.d.(2) of the RFA, the TDC per unit exclusive of land costs for the proposed Development is $101,067 as underwritten.

2. Based on its proposed location, the Development does not qualify as a Limited Development Area (“LDA”) property as defined by the chart presented as Exhibit D.2.(d) of the RFA.




3. As currently underwritten, the combined debt service coverage (“DSC”) of the First Mortgage Loan and SAIL Loan is 1.09 to 1.00 and the DSC for all mortgages and fees is 1.01 to 1.00. Per the RFA, the combined DSC for the First Mortgage Loan and SAIL Loan cannot be below 1.10 to 1.00 unless the Applicant defers at least 35% of its Developer fee for at least six (6) months following construction completion. In such cases, the minimum debt service coverage shall be no less than 1.00 for the SAIL loan, including all superior mortgages. The transaction has been underwritten accordingly.

4. As required by the Federal Fair Housing Act (the “Act”), at least 80% of the total units will be rented to residents that qualify as Elderly pursuant to the Act.

5. 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 FHFC six (6) months prior to the construction completion date.

Recommendation: AmeriNat recommends a SAIL Loan in the amount of $3,200,000, an ELI Gap Loan in the amount of $734,400, and an annual 4% Non-Competitive HC allocation of $889,441 to the Applicant for the acquisition, rehabilitation, and permanent financing of the Development. Please see Exhibit 3 of this report for further information regarding the HC allocation calculation. This recommendation is based upon the assumptions detailed in the Report Summary (Section A) and Supporting Information and Schedules (Section C). In addition, this recommendation is subject to the SAIL and ELI Program Loan Special and General Conditions, and HC Allocation Recommendation and Contingencies as set forth in Section B of this report. This recommendation is only valid for six months from the date of the report. The reader is cautioned to refer to these sections for complete information. Prepared by: Reviewed by:

George J. Repity Michael Drapkin, Jr. Senior Credit Underwriter Multifamily Credit Underwriting Manger




Overview Construction Financing Sources:

Source Lender Applicant's TotalApplicant's

Revised TotalUnderwriter's

TotalInterest Rate

Debt Service During

Construction

First Mortgage JHFA/Red Stone $16,000,000 $12,500,000 $12,500,000 5.7617% $720,213

Second Mortgage - SAIL FHFC $3,200,000 $3,200,000 $3,200,000 1.00% $0

Third Mortgage - ELI Gap FHFC $734,400 $734,400 $734,400 0.00% $0

Fourth Mortgage JHFA $0 $1,000,000 $1,000,000 1.00% $0

Fifth MortgageCity of Jacksonville $0 $803,005 $803,005 0.00% $0

Sixth MortgageCathedral Terrace, Inc. $4,000,000 $2,330,000 $2,330,000 8.00% $0

HC Equity RJTCF $2,669,496 $2,699,779

Deferred Developer Fee Developer $3,000,000 $2,202,018 $2,329,457

$26,934,400 $25,438,919 $25,596,641 $720,213Total : Proposed First Mortgage and Tax Exempt MMRB Loan: The Applicant applied for $16,000,000 in Multifamily Mortgage Revenue tax-exempt bonds (“MMRB” or the “bonds”) to be issued by JHFA for the acquisition and rehabilitation of the Development. This amount was decreased to $12,500,000 per a request made by the Applicant to JHFA on September 10, 2015. The bonds will be privately placed and purchased by an investment fund, GA Housing LLC, sponsored by Red Stone Tax Exempt Funding LLC (“Red Stone”), a subsidiary of Red Stone LLC. GA Housing LLC utilizes various bank facilities to acquire the bonds on their behalf. AmeriNat was advised that Deutsche Bank will be the bank acquiring the bonds at closing. The Applicant provided a construction and permanent term sheet dated April 21, 2015 from Red Stone evidencing a $12,500,000 construction loan with an 18 month term. Interest is to be paid monthly at a fixed rate of 5.00% per annum on the bonds beginning on the date of delivery of the bonds (the “closing”) through the loan term. In addition to interest, the Applicant will pay all Issuer (0.20%), Compliance (0.024%), Servicing (0.023%), Financial Monitoring (0.015%) fees on the bonds during the rehabilitation period. AmeriNat included a 50 basis point cushion in the stack to account for rate volatility for an underwritten rate of 5.7617%. The loan is interest-only during the construction period. The Trustee fee of $5,750 has been capitalized within the development budget during the construction period. Proposed Second Mortgage – FHFC SAIL: The Applicant applied to Florida Housing for a $3,200,000 SAIL Program loan under RFA 2014-111 for the construction financing of the Development. The SAIL loan term will be 17 years, as requested by the HC syndicator and as permitted by the RFA. The SAIL loan shall be non-amortizing with a 1.00% interest rate over the life of the loan with payments based upon available cash flow as determined by Florida Housing. Any unpaid interest will be deferred until cash flow is available. However, at maturity of the SAIL loan, all principal and interest will be due. Annual payments of all applicable fees will be required. SAIL Program




loan proceeds may be amongst the sources of funds utilized to pay down the First Mortgage Loan during the construction phase. Based on the analysis presented herein, a total of $3,200,000 in SAIL Loan proceeds are necessary during the construction phase of the Development. SAIL loan proceeds shall be disbursed during the construction phase in an amount per construction draw which does not exceed the ratio of the SAIL Loan to Total Development Costs, unless approved by the credit underwriter. Proposed Third Mortgage Loan – FHFC ELI Gap: The Applicant requested an Extremely Low Income (“ELI”) Gap Loan in the amount of $734,400. This is in accordance with the RFA which states an Applicant is eligible for “a forgivable loan in an amount per ELI Set-Aside unit that is dependent upon the proposed Development’s unit mix and the county where the proposed Development is located. For each proposed ELI Set-Aside unit, the proposed Development must take a unit that would otherwise be at 60% of AMI or higher and restrict it as an ELI Set-Aside unit. The ELI Set-Aside units must be distributed across the unit mix on a pro-rata basis.” The Applicant is proposing to provide 240 total units, with an ELI Set-Aside commitment of 5% (12 units) in accordance with the RFA. Based on the analysis presented herein, a total of $734,400 in ELI Gap Loan proceeds are necessary during the construction phase of the Development. The ELI Gap loan will have non-amortizing payments at 0% interest per year over the life of the loan with principal forgivable at maturity provided the units are targeted to ELI Households for the first 15 years of the 50-year Compliance Period. It shall have a term of 17 years, as requested by the HC syndicator and as permitted by the RFA. After 15 years all of the ELI Set-Aside units may convert to serve residents at or below 60% of AMI. The Person with a Disabling Condition set-aside requirement must be maintained throughout the entire compliance period. ELI Gap loan proceeds shall be disbursed during the construction phase in an amount per construction draw which does not exceed the ratio of the ELI Gap loan to Total Development Costs, unless approved by the credit underwriter. Proposed Fourth Mortgage Loan – JHFA: The Applicant requested a Loan in the amount of $1,000,000 from JHFA. Per minutes of the JHFA Board of Directors meeting on January 15, 2014, a motion to approve a non-amortizing $1,000,000 loan to be available during the construction and permanent phase periods was approved. The loan will be conterminous with the First Mortgage and have a rate of 1.00%. Loan interest is due annually if available from cash flow. Principal and deferred interest is due the earlier of the term of the First Mortgage of date of refinancing. JHFA loan proceeds shall be disbursed during the construction phase in an amount per construction draw which does not exceed the ratio of the JHFA Loan to Total Development Costs, unless approved by the credit underwriter. Proposed Fifth Mortgage Loan – City of Jacksonville: The Applicant provided a term sheet dated March 27, 2015 for a loan provided by City of Jacksonville (“CoJ”) in the amount of $803,005. The loan will be available during the construction and permanent phase periods and is non-amortizing with 0% interest. The loan shall have a final maturity date that is coterminous with the First Mortgage Loan. All sums due in respect of the loan shall be due and payable in full upon the occurrence of any event of default under the Development’s loan documents beyond any grace or cure period or the required construction loan documents, if funds are available. The loan may be prepaid in full or in part at any time without penalty.




Proposed Sixth Mortgage Loan – Seller: The Applicant provided a term sheet dated August 5, 2015 for a Seller Note in the amount of $2,330,000 to be provided by Cathedral Terrace, Inc. The loan will have an interest rate of 8.00% and be coterminous with the First Mortgage. No hard payments are required, with interest and principal to be paid from available cash flow after payment of all project expenses, developer fee, and debt service on superior debt. Additional Construction Sources of Funds: The Applicant provided an LOI April 22, 2015 by which Raymond James Tax Credit Equity Funds, Inc. (“RJTCF”) or an affiliate thereof will make a net equity contribution of $8,999,264 for a 99.989% interest in the Applicant in return for a proportionate share of the total HC allocation they estimated to be $8,823,690. The HC allocation will be syndicated at a rate of $1.0200102256 for each $1.00 of tax credits delivered. A total of $1,799,853 (20.00% of total equity available) is to be funded at construction loan closing, which is an amount sufficient to meet the standard 15% criteria. An additional installment of $899,926 at 35% construction completion will be made during the construction period for a total equity amount of $2,699,779 available during the construction phase of the Development. Deferred Developer Fee: The Applicant will be required to defer $2,329,457 of available developer fee during the construction phase of the Development.




Permanent Financing Sources:

Source Lender Applicant's TotalApplicant's

Revised TotalUnderwriter's

TotalInterest Rate

Amortization Years

Term Years

Annual Debt Service

First Mortgage JHFA/Red Stone $11,500,000 $7,600,000 $7,600,000 5.7617% 40 40 $486,730

Second Mortgage - SAIL FHFC $3,200,000 $3,200,000 $3,200,000 1.00% 0 17 $32,000

Third Mortgage - ELI Gap FHFC $734,400 $734,400 $734,400 0.00% 0 17 $0

Fourth Mortgage JHFA $0 $1,000,000 $1,000,000 1.00% 0 40 $10,000

Fifth MortgageCity of Jacksonville $0 $803,005 $803,005 0.00% 0 40 $0

Sixth MortgageCathedral Terrace, Inc. $0 $2,330,000 $2,330,000 8.00% 0 40 $0

HC Equity RJTCF $9,005,000 $8,999,264 $8,999,264

Deferred Developer Fee Developer $2,000,000 $772,250 $929,972

$26,439,400 $25,438,919 $25,596,641 $528,730Total :

First Mortgage and Tax Exempt MMRB Loan: As previously noted, the Applicant has submitted a proposal dated April 21, 2015 from Red Stone to purchase up to $12,500,000 of MMRB. Red Stone will purchase the bonds directly or indirectly with a designee through a placement agent or bond underwriter at closing. The designee will abide by all the terms set forth by Red Stone. Currently, it is anticipated that RBC Capital Markets as the bond underwriter will be facilitating the delivery of the bonds through a limited offering to Redstone and/or its designee. The proceeds of the bond purchase will be lent to the Applicant pursuant to a Loan Agreement. A portion of the bonds, in the amount of $4,900,000, are to be redeemed at par and the permanent phase bond amount will be $7,600,000. GA Housing, LLC (“GA”) is the Red Stone‐sponsored investment fund that will acquire the bonds used to finance the Development. GA utilizes various bank facilities to acquire bonds and Deutsche Bank will be the bank acquiring the bonds used to finance the Development on behalf of GA at closing. The loan amount is based on Redstone’s pro forma NOI of $568,235, and is subject to a maximum 85% loan to value and a minimum 1.15 debt service coverage ratio. The bonds will require payments of interest only for 18 months followed by amortization on a 40 year schedule. The Bonds shall mature 40 years after the interest only period; however, upon the 16‐year anniversary of closing Red Stone shall have the option, with six months’ notice, to require a mandatory tender of the Bonds. Interest will be paid monthly at a fixed rate of 5.00% per annum on the bonds beginning on the date of delivery of the bonds (the “closing”) through the loan term. In addition to interest, the Applicant will pay all Issuer, Servicing, Compliance, and Trustee fees on the bonds. The fees are shown as a part of debt service in the operating pro forma. Other fees payable at closing are a construction loan administration fee of 0.50% of the loan and an origination fee of 1.00% of the loan.




For transactions that have SAIL funding, the minimum debt service coverage shall be 1.10 for the SAIL loan, including all superior mortgages. However, if the Applicant defers at least 35% of its Developer fee for at least six (6) months following construction completion, the minimum debt service coverage shall be 1.00 for the SAIL loan, including all superior mortgages. As a result, the First Mortgage has been sized at $7,600,000 to conform to the RFA. Second Mortgage: The Applicant applied to Florida Housing for a $3,200,000 SAIL Program loan under RFA 2014-111 for the construction financing of the Development. The SAIL loan term will be 17 years, as requested by the HC syndicator and as permitted by the RFA. The SAIL loan shall be non-amortizing with a 1.00% interest rate over the life of the loan with payments based upon available cash flow as determined by Florida Housing. Any unpaid interest will be deferred until cash flow is available. However, at maturity of the SAIL loan, all principal and interest will be due. Annual payments of all applicable fees will be required. Fees including Permanent Loan Servicing Fees (25 bps of the outstanding loan amount up to a maximum of $808 per month, subject to a minimum of $203 per month) and Compliance Monitoring Fees ($882 based upon the Multiple Program Fees of the current contract between FHFC and its Servicer). Third Mortgage: The $734,400 ELI Gap loan will have non-amortizing payments at 0% simple interest per year over the life of the loan with principal forgivable at maturity provided the units are targeted to ELI Households for the first 15 years of the 50‐year Compliance Period. It shall have a term of 17 years, as requested by the HC syndicator. After 15 years all of the ELI Set-Aside units may convert to serve residents at or below 60% of AMI. The Person with a Disabling Condition set-aside requirement must be maintained throughout the entire compliance period. Annual payment of all applicable fees will be required. Fees associated with the ELI GAP Loan include Permanent Loan Servicing Fees (25 bps of the outstanding loan amount up to a maximum of $808 per month, subject to a minimum of $203 per month) and Compliance Monitoring Fees ($882 based upon the Multiple Program Fees of the current contract between FHFC and its Servicer). Fourth Mortgage: Funds in the amount of $1,000,000 will be available during the permanent phase of the Development with repayment provisions as previously outlined. Please note the debt service amount for this source has been adjusted so as to conform to the RFA with regard to a minimum 1.00 DSC for all mortgages and fees in the transaction. Fifth Mortgage Loan: Funds in the amount of $803,005 will be available during the permanent phase of the Development with repayment provisions as previously outlined. Please note the debt service amount for this source has been adjusted so as to conform to the RFA with regard to a minimum 1.00 DSC for all mortgages and fees in the transaction. Sixth Mortgage Loan: Funds in the amount of $2,330,000 will be available during the permanent phase of the Development with repayment provisions as previously outlined. Please note the debt service amount for this source has




been adjusted so as to conform to the RFA with regard to a minimum 1.00 DSC for all mortgages and fees in the transaction. Additional Permanent Sources of Funds: According to the LOI, RJTCF or a related entity thereof is to purchase a 99.989% interest in the limited partnership at loan closing. With $8,823,690 of syndicated HC and a syndication rate of $1.0200102256 per dollar of HC, the Limited Partner anticipates a $8,999,264 net HC equity contribution to be paid as follows:

Capital Contributions AmountPercent of

Total Due upon

1st Installment $1,799,853 20.00% Paid at closing

2nd Installment $899,926 10.00% Later of 35% construction completion or April 1, 2016

3rd Installment $1,799,853 20.00% Later of 100% construction completion or November 1, 2016

4th Installment $4,499,632 50.00%

Later of April 1, 2017 or Stabilized Operations Operations ("Stabilization Capital Contribution"), of which $200,000 may be held back and paid when all required tax filing information and Form(s) 8609 are received and audited financials for the year of Breakeven Operations are available.

Total: $8,999,264 100%

Annual Credits Per Syndication Agreement $882,369

Total Credits Per Syndication Agreement $8,823,690

Calculated HC Rate: $1.0200102256

Limited Partner Ownership Percentage 99.989%

Proceeds During Construction $2,699,779 Deferred Developer Fee: The Applicant will be required to permanently defer $929,972 in developer fee until after stabilization.




Uses of Funds

Applicant CostsRevised Applicant

CostsUnderwriters Total

Costs ‐ CUR Cost Per UnitHC Ineligible Costs ‐

CUR

Rehab of Existing Rental Units $7,800,000 $7,806,528 $7,806,528 $32,527

General Conditions $1,090,000 $468,391 $468,391 $1,952

Overhead $0 $133,331 $133,331 $556

Profit $0 $468,391 $468,391 $1,952

Payment and Performance Bonds $0 $80,000 $0 $0

Total Construction Contract/Costs $8,890,000 $8,956,641 $8,876,641 $36,986 $0

Hard Cost Contingency $600,000 $887,664 $887,664 $3,699

Other: P&P Bond $0 $0 $80,000 $333

$9,490,000 $9,844,305 $9,844,305 $41,018 $0

CONSTRUCTION COSTS:

Total Construction Costs: Notes to Actual Construction Costs: 1. A Standard Form of Agreement Between the Owner and Construction Manager as Constructor, Sauer

Incorporated (“Sauer”) where the basis of payment is the cost of the work plus a fee with a guaranteed maximum price in the amount of $8,876,641 (the “Construction Contract”) has been provided. The Construction Contract was entered into as of August 6, 2015 and is executed by the Applicant and Sauer. The Construction Contract contains a production schedule indicating completion within 10 months from the date of commencement. The Construction Contract indicates that each progress payment shall be calculated by taking that portion of the Contract Sum properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Contract Sum allocated to that portion of the Work in the schedule of values, less retainage of ten percent (10%). Upon completion of 50% of the Work retainage shall be reduced to 5%.

2. A plan and cost review was engaged by AmeriNat and performed by GLE. GLE summarized their review of the Schedule of Values in a report dated September 15, 2015. The review concludes that plans/specs reviewed are sufficient to construct the Development as proposed and the costs of $36,896/unit are considered to be within an acceptable range based on the comparable data presented by the consultant.

3. A 10% hard cost contingency was utilized by AmeriNat, supported by the plan and cost review and does not exceed the 15% maximum permitted by the RFA. This expense is not included as part of the construction contract.

4. General Contractor’s Fee (consisting of general requirements, overhead, and profit) is based on the

schedule of values contained in the executed Construction Contract and is within 14.00% of hard costs.

5. AmeriNat has received a Payment and Performance Bond in the full amount of the construction

contract issued by Federal Insurance Company (“FIC”). FIC has a rating of “A++ u” by AMBest & Co., which exceeds the minimum requirement. AmeriNat has shown the cost of the bond outside of the construction contract as it is not included as part of the Schedule of Values.




GENERAL DEVELOPMENT COSTS: Applicant CostsRevised Applicant



CUR

Accounting Fees $30,000 $30,000 $30,000 $125

Appraisal $6,000 $7,500 $5,500 $23

Architect's and Planning Fees $156,000 $165,000 $120,000 $500

Architect's Fee - Supervision $31,200 $40,000 $30,000 $125

Building Permits $97,500 $106,485 $116,209 $484

Builder's Risk Insurance $58,500 $60,000 $60,000 $250

Capital Needs Assessment/Rehabilitation $8,000 $5,000 $3,975 $17

Engineering Fees $10,000 $0 $0 $0

Environmental Report $17,000 $15,000 $15,000 $63

FF&E paid outside Construction Contract $0 $200,000 $200,000 $833

FHFC Administrative Fees $45,000 $81,900 $71,155 $296 $71,155

FHFC Application Fee $6,000 $9,000 $9,000 $38 $9,000

FHFC Credit Underwriting Fee $25,000 $25,000 $16,939 $71 $16,939

FHFC HC Compliance Fee (HC) $250,000 $0 $281,222 $1,172 $281,222

Lender Inspection Fees / Const Admin $30,000 $30,000 $40,000 $167

Insurance $0 $116,000 $116,000 $483

Legal Fees $185,000 $175,000 $175,000 $729 $140,000

Market Study $6,000 $7,500 $5,500 $23

Marketing and Advertising $15,000 $25,000 $25,000 $104 $25,000

Plan and Cost Review Analysis $0 $5,000 $3,675 $15

Survey $25,000 $25,000 $25,000 $104 $25,000

Tenant Relocation Costs $144,000 $288,000 $288,000 $1,200

Title Insurance and Recording Fees $144,000 $184,800 $184,800 $770 $184,800

Soft Cost Contingency $600,000 $84,059 $91,099 $380 $91,099

$1,889,200 $1,685,244 $1,913,074 $7,972 $844,215Total General Development Costs: Notes to the General Development Costs: 1. AmeriNat reflects actual costs for the market study, appraisal, and capital needs assessment, and plan

and cost review analysis.

2. The costs associated with the Architect Fees have been adjusted accordingly to reflect the amounts represented in the executed contract between the consultant and the Borrower that were reviewed by the Underwriter.

3. The FHFC Administrative Fee is based on 8% of the recommended HC amount.

4. The FHFC Credit Underwriting Fee is inclusive of SAIL and HC multiple program fees.

5. FHFC HC Compliance Fee is based on the 2015 HC Compliance Monitoring Fees.

6. Lender Inspection Fees/Construction Admin consists of estimated fees associated with lender

inspections and fees for monthly inspections by the construction consultant retained by AmeriNat.




7. A soft cost contingency of 5% has been underwritten, which is consistent with the RFA and may be utilized by the Applicant in the event soft costs exceed these estimates.

8. The remaining General Development costs appear reasonable.




CUR

Construction Loan Origination Fee $160,000 $125,000 $125,000 $521 $125,000

Construction Loan Interest $300,000 $992,392 $897,413 $3,739 $897,413

Construction Loan Servicing Fees $0 $62,500 $62,500 $260 $62,500

Permanent Loan Origination Fee $110,000 $0 $0 $0

Permanent Loan Closing Costs $50,000 $0 $0 $0

JHFA Bond Application Fee $0 $7,000 $7,000 $29 $7,000

JHFA Feasibility Fee $0 $3,000 $3,000 $13 $3,000

SAIL Commitment Fee $0 $39,344 $39,344 $164 $39,344

SAIL Closing Costs $0 $0 $15,000 $63 $15,000

JHFA Underwriting Fee $0 $0 $10,000 $42 $10,000

Misc Loan Closing Costs $25,000 $0 $0 $0

Issuer's Admin Fee $0 $0 $33,750 $141 $33,750

Reserves - Operating Deficit $0 $929,663 $916,133 $3,817 $916,133

Financial Advisor Fee/Expenses $0 $0 $32,000 $133 $32,000

Legal Fees/Expenses - Bond Counsel $0 $0 $62,000 $258 $62,000

Legal Fees - Issuer's Counsel $0 $0 $15,000 $63 $15,000

Legal Fees - Trustee's Counsel $0 $0 $6,000 $25 $6,000

TEFRA Fee $0 $1,000 $1,000 $4 $1,000

Placement Agent Fees/Expenses $0 $0 $31,000 $129 $31,000

Trustee Fee/Acceptance $0 $0 $5,750 $24 $5,750

Disclosure Agent $0 $0 $5,000 $21 $5,000

Other: Red Stone Due Diligence Fee $0 $25,000 $25,000 $104 $25,000

Other: Cost of Issuance $0 $205,500 $0 $0

Other: Syndicator Due Diligence Fee $0 $25,000 $25,000 $104 $25,000

Other: ACS Closing Attendance $0 $0 $2,268 $9 $2,268

Other: FHFC Wire Fee $0 $0 $10 $0

$645,000 $2,415,399 $2,319,168 $9,663 $2,319,158

FINANCIAL COSTS:

Total Financial Costs: Notes to the Financial Costs 1. Financial costs were derived from the representations illustrated in the LOI’s for equity and

permanent and construction financing and appear reasonable to AmeriNat.

2. SAIL Commitment Fee is based on 1% of the SAIL and ELI Gap Loan amounts.

3. SAIL Closing Costs is an estimate of SAIL and ELI Gap closing costs.

4. The interest reserve for the Construction Loan is supported by the Construction Loan terms illustrated in the LOI provided by Red Stone, the duration of construction referenced in the Construction Contract, and the resultant calculation completed by AmeriNat through the use of a construction draw schedule provided by the Applicant. The computation includes a 50 basis point (“bp”) underwriting




cushion has been included in the rate stack to account for rate volatility, and an Issuer administrative fee of 20 bps, Compliance Monitoring fee of 2.4 bps, Financial Monitoring fee of 1.5 bps, and Permanent Loan Servicing fee of 2.3 bps.

5. An Operating Reserve Account (“ORA”) is based on the RJTCF LOI which requires the Partnership to establish a reserve account for operating deficits. The escrow is to be funded out of proceeds from the 4th Capital Contribution (the “Stabilization Capital Contribution”). The ORA represents approximately five and a half months of operating expenses and debt service or $916,133 will be permitted within the Applicant’s budget, unless the credit underwriter deems a larger reserve is necessary. The calculation of developer fee will be exclusive of the budgeted ORA and any ORA “proposed or required by a limited partner or other lender” in excess of the amount of the ORA deemed satisfactory by the credit underwriter will be a subset of developer fee. Upon expiration of the ORA, the balance in the reserve will be used to pay down any FHFC administered loan debt, if any, and if there is no FHFC administered loan debt, then the balance of the reserve shall be deposited into a replacement reserve account. In no event shall the remaining balance in said ORA be used to pay the developer fee or any deferred developer fee (or exceeding the amount permissible under Florida Housing’s rules).

6. The remaining Financial Costs represent costs of issuance (“COI”) of JHFA MMRB and have been

reclassified as such. The cumulative COI fees appear reasonable and will be verified at loan closing.




CUR

Building Acquisition Cost $7,875,000 $7,395,664 $7,395,664 $30,815

$7,875,000 $7,395,664 $7,395,664 $30,815 $0

NON‐LAND ACQUISITION COSTS

Total Non‐Land Acquisition Costs: Notes to the Non-Land Acquisition Costs: 1. An Agreement for Purchase and Sale executed as of December 23, 2013 between the Seller, Cathedral

Terrace, Inc., a Florida limited partnership, and the Applicant was provided in the amount of $10,500,000. A First Amendment to the agreement dated June 23, 2015 reflects an adjusted purchase price of $7,820,000.

2. Building acquisition cost as underwritten is based on the “As Is” value of the Development of $7,820,000 per the appraisal completed by Meridian dated May 11, 2015, less a land value of $424,336 per the value allocated by the Duval County Property Appraiser’s 2014 estimate. The 2015 value from the county appraiser will not be available until October, per their website. The sale involves a related party (Seller is also the GP); it is considered a non-arm’s length transaction.







CUR

$19,899,200 $21,340,612 $21,472,211 $89,469 $3,163,373

$0 $0 $1,331,219 $5,547

Developer Fee $3,550,000 $3,673,971 $2,368,875 $9,870

$3,550,000 $3,673,971 $3,700,094 $15,417 $0

OTHER DEVELOPMENT COSTS

Development Cost Before Developer Fee and Land CostsDeveloper Fee on Acquisition of Buildings

Total Other Development Costs: Notes to the Other Development Costs:

1. Total Developer Fee of $3,700,094 does not exceed 18.00% of the Total Development Costs (“TDC”),

less Developer Fee, Land, and Reserves. The Developer Fee on Acquisition of Buildings equals 18.00% of Building Acquisition costs, as allowed by the RFA for transactions utilizing SAIL and Tax-Exempt Bond financing.




CUR

Land Acquisition Costs $2,625,000 $424,336 $424,336 $1,768 $424,336

$2,625,000 $424,336 $424,336 $1,768 $424,336

LAND ACQUISITION COSTS

Total Acquisition Costs: Notes to Land Acquisition Costs: 1. According to the appraisal performed by Meridian, the “As Is” (vacant land) market value attributable

to the property is $3,120,000. Based on FHFC’s Land Allocation criteria, the lowest calculated land value is $424,336.

$26,074,200 $25,438,919 $25,596,641 $106,654 $3,587,709TOTAL DEVELOPMENT COSTS: Notes to Total Development Costs: 1. Total Development Costs have decreased by $477,559 since the Application primarily due to a

reduction in land acquisition costs.

2. Per the RFA, the TDC per Unit Base Limitation for acquisition and rehabilitation/moderate rehabilitation/substantial rehabilitation of a non-garden high-rise in excess of seven stories is $200,700 per unit. Applying the 1.4% escalation factor allowable for the Development Category yields a TDC per Unit Base Limitation of $203,510. Based on the underwritten TDC, exclusive of land costs, the Development has a per unit cost of is $101,067.




OPERATING PRO FORMA

FINANCIAL COSTS: Year 1Year 1

Per UnitOPERATING PRO FORMA

Gross Potential Rental Income $2,061,696 $8,590Ancillary Income $23,400 $98

Gross Potential Income $2,085,096 $8,688Less:

Physical Vac. Loss Percentage: 4.00% $83,404 $348Collection Loss Percentage: 1.00% $20,851 $87

Total Effective Gross Income $1,980,841 $8,254Fixed:

Real Estate Taxes $0 $0Insurance $110,400 $460

Variable:Management Fee Percentage: 5.00% $99,042 $413General and Administrative $84,000 $350Payroll Expenses $480,000 $2,000Utilities $363,600 $1,515Marketing and Advertising $9,600 $40Maintenance and Repairs/Pest Control $144,000 $600Grounds Maintenance and Landscaping $6,000 $25Contract Services $30,000 $125Security $13,200 $55

Reserve for Replacements $74,880 $312Total Expenses $1,414,722 $5,895Net Operating Income $566,119 $2,359Debt Service Payments

First Mortgage - JHFA/Red Stone $486,730 $2,028Second Mortgage - SAIL $32,000 $133Third Mortgage - ELI $0 $0Fourth Mortgage - JHFA $10,000 $42Fifth Mortgage - CoJ SHIP $0 $0Sixth Mortgage Loan - Seller Note $0 $0HFA FM/PLS/CM Fee $6,540 $27

$19,392 $81SAIL/ELI CM Fee $3,846 $16

Total Debt Service Payments $558,508 $2,327Cash Flow after Debt Service $7,612 $32

FINANCIAL COSTS: Annual Per UnitDebt Service Coverage Ratios

DSC - First Mortgage 1.16 1.16DSC - Second Mortgage 1.09 1.09DSC - Third Mortgage 1.09 1.09DSC - Fourth Mortgage 1.07 1.07DSC - Fifth Mortgage 1.07 1.07DSC - Sixth Mortgage 1.07 1.07DSC - All Mortgages and Fees 1.01 1.01

Financial RatiosOperating Expense Ratio 71.4%Break-even Economic Occupancy Ratio (all debt) 94.6%

INCO

ME:

EXPE

NSE

S:

SAIL/ELI PLS Fee




Notes to the Operating Pro forma and Ratios: 1. The SAIL/ELI programs do not impose any rent restrictions. However, the Development will be

utilizing Housing Credits in conjunction with tax-exempt bond and SAIL/ELI financing which will impose rent restrictions. As restricted by the SAIL, HC, and Tax-Exempt Bond programs, 100% of the units (240 units) will be set aside for households earning 60% or less of the Area Median Income (“AMI”), with a minimum of 5% of the units further restricted as ELI units at 33% or less of AMI. There will be 224 units that continue to operate under the existing HUD HAP contract this expires as of June 30, 2034. Gross potential rental revenue is based upon the current HAP contract in place. Rents include all utilities. Maximum gross LIHTC rents are per the Florida Housing Finance Corporation website for 2015. The appraisal confirms the Development’s ability to achieve 2015 maximum restricted HC rent levels for the 33% and 60% of AMI units based on current market conditions. A rent roll for the Development property is illustrated in the following table:

MSA (County): Jacksonville, FL MSA (Duval)

Unit Type

PBRA

PBRA

HC

$2,061,696240 124920

200 520 60% $713

$713 $518 $518 $518 $99,456

$1,752,000

1.0 1.0 16 520 60% $713 $0

$0 $730 $713 $730 $730 $7301.0 1.0

Appraiser Rents CU Rents

Annual Rental Income

1.0 1.0 24 520 33% $392

Low HOME Rents

High HOME Rents

Utility Allow

RD/HUD Cont Rents

Net HC Rent

Applicant Rents

Bed Rooms

Bath Rooms Units

Square Feet AMI%

Gross HC Rent

$730 $210,240$0 $730 $392 $730 $730

AmeriNat was advised by the Applicant that the set asides for the units will float. As a result, the square footages shown above represent the weighted average of the various unit square footages available at the Development, which range from 432 to 558.

2. A 5% total economic vacancy rate (4% physical and 1% collections) was applied for underwriting purposes based on the appraisal and the comparables listed therein.

3. Ancillary Income is comprised of miscellaneous income related to multifamily operations.

4. The Applicant, by virtue of a non-profit 501(c)(3) being a member of the ownership structure, is exempt from real estate taxes. As such, no expense has been underwritten for the purpose of the analysis presented herein.

5. AmeriNat utilized an estimate of $460 per unit for insurance based on the representations of the appraiser. Comparable data presented in the appraisal indicated a range of $131 to $661 per unit for the restricted comparables presented by the appraiser.

6. The Applicant has submitted an executed Management Agreement dated July 1, 2015 between Carteret Management Corporation (“CMC”) and the Applicant. The initial term of the Agreement commences as of the date of execution and runs for a period of five years, automatically renewing for additional five year terms thereafter unless terminated in writing by either party 30 days prior to the end of the term. Compensation is 5.80% of gross collections of residential income, including residential rent, housing assistance payments, and vacancy allowances, miscellaneous income including parking, laundry, commercial rents (if applicable), and other miscellaneous income. The




appraisal indicted a range of 3% - 6% with a concluded expense of 5% of EGI. Please note that 0.8% of the fee will be subordinate to the debt service of the First and Second Mortgages. As such, the management fee has been underwritten at 5.00%.

7. Replacement Reserves of $312 per unit per year were underwritten by AmeriNat based on the amount recommended by the CNA.

8. The estimated Net Operating Income (“NOI”) for the Development’s initial year of stabilized operations is $567,065. The First Mortgage and SAIL loan can be supported by operations at a 1.09 to 1.00 Debt Service Coverage ratio (“DSC”) in Year 1 of stabilized operations. For transactions that have SAIL funding, the minimum DSC shall be 1.10 for the SAIL loan, including all superior mortgages. However, if the Applicant defers at least 35% of its Developer fee for at least six (6) months following construction completion, the minimum DSC shall be 1.00 for the SAIL loan, including all superior mortgages. All mortgages and fees can be supported by operations at a DSC of 1.01, which is accordance with the Rule.

9. The SAIL/ELI Gap Permanent Loan Servicing Fees ($19,392 annually) are equal to 25 basis points of the SAIL and ELI Gap loan amounts, subject to a minimum monthly fee of $203 and a monthly maximum of $808.

10. The SAIL/ELI Gap Compliance Monitoring Fees are estimated to be $3,846, which is equal to a $247 monthly minimum fee (SAIL) and an additional $882 as a multiple program fee (ELI Gap). Compliance Monitoring Fees for the primary program (HC) have been capitalized into the sources and uses budget.

11. The Housing Finance Authority Permanent Loan Servicing Fee of $2,436 represents the minimum monthly fee of $203.

12. The Housing Finance Authority Compliance Monitoring Fee is equal to $2,964, which represents the minimum monthly fee of $247. The Housing Finance Authority Compliance Monitoring Fees are subject to adjustment annually, but not decreased, based on the South Region Consumer Price Index for the twelve month period ending each November 30th, which this automatic increase shall not exceed three percent of the prior year’s fee.

13. The Housing Finance Authority Financial Monitoring fee of $1,140 is equal to 1.5 bps of the outstanding Bond amount during the permanent phase of the Development.

14. A 15-year Operating Pro forma attached hereto as Exhibit 1 reflects rental income increasing at an annual rate of 2% and expenses increasing at an annual rate of 3%.



October 13, 2015

Section B

SAIL and ELI Gap Loan Special and General Loan Closing Conditions HC Allocation Recommendation and Contingencies



CATHEDRAL TERRACE PAGE B‐1 October 13, 2015

Special Conditions This recommendation is contingent upon the review and approval of the following items by FHFC and the Servicer, at least two weeks prior to SAIL and ELI Gap loan closing. Failure to submit and to receive approval of these items within this time frame may result in postponement of the loan closing date.

1. Approval by FHFC’s Asset Management Department of the Applicant’s selection of Carteret

Management Corporation to manage the Development.

2. For transactions that have SAIL funding, the minimum DSC shall be 1.10 for the SAIL loan, including all superior mortgages. However, if the Applicant defers at least 35% of its Developer fee for at least six (6) months following construction completion, the minimum DSC shall be 1.00 for the SAIL loan, including all superior mortgages.

3. Receipt and approval of an executed AIA document of Standard Form of Agreement between Owner

and Architect consistent with the recommendations outlined in the PCR. 4. Notwithstanding any and all provisions including those pertaining to release, expenditure, or other

conditions to the Operating Reserve Account within the RJTCF April 8, 2015 proposal or any subsequent Limited Partnership Agreement, any and all terms and conditions of the Operating Reserve must be acceptable to Florida Housing, its Servicer, and its Legal Counsel. Upon the expiration of the Operating Deficit Reserve, the balance in the reserve will be used to pay down any FHFC administered loan debt, if any, and if there is no FHFC administered loan debt, then the balance of the Reserve shall be deposited into a replacement reserve account for the proposed development. In no event shall the remaining balance in said Operating Deficit Reserve be used to pay the developer fee or any deferred developer fee (or exceeding the amount permissible under Florida Housing’s rules).

General Conditions This recommendation is contingent upon the review and approval of the following items by FHFC and the Servicer at least two weeks prior to real estate SAIL and ELI Gap loan closing. Failure to submit and to receive approval of these items within this time frame may result in postponement of the closing date. 1. Borrower is to comply with any and all recommendations noted in the Plan and Cost Review prepared

by GLE.

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.). An acceptable alternative to this requirement is receipt and satisfactory review of a letter from the local permitting and approval authority stating 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 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 and ELI Gap Loan proceeds shall be disbursed pro-rata with other funding sources, unless otherwise approved by the Credit Underwriter. The closing draw shall include appropriate backup and ACH wiring instructions.

6. During construction/rehabilitation, the developer is only allowed to draw a maximum of 50% of the total developer fee (developer fee minus acquisition developer fee) during construction/rehabilitation, 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/rehabilitation will be allowed to be disbursed at closing. The remainder of the “developer’s overhead” will be disbursed during the construction/rehabilitation on a pro rata basis, based on the percentage of completion of the Development, as approved by JHFA 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. 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.

8. Evidence of general liability, flood (if applicable), builder’s risk and replacement cost hazard insurance (as certificates of occupancy are received) reflecting Florida Housing FHFC as Loss Payee/Mortgagee, with coverages, deductibles and amounts satisfactory to Florida Housing.

9. If the development is not 100% lien-free completed, a 100% Payment and Performance Bond 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 GC 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.

10. 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, Americans with Disabilities Act, and the Federal Fair Housing Act requirements, as applicable.

11. A copy of the Amended and Restated Limited Partnership Agreement (“LPA”) reflecting purchase of the HC under terms consistent with the assumptions contained within this Credit Underwriting Report. The LPA shall be in a form and of financial substance satisfactory to Servicer, FHFC, and its Legal Counsel.




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) and the RFA, of an Applicant or a Developer).

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

14. Satisfactory resolution of any outstanding past due or non-compliance notices issues by closing of the loan(s).

This recommendation is contingent upon the review and approval by FHFC and its Legal Counsel at least 14 days prior to SAIL and ELI Gap loan closing. Failure to receive approval of these items within this timeframe may result in postponement of the closing date.

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

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 SAIL and ELI Gap closings, 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 SAIL and ELI Gap loans naming Florida Housing 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 limited partnership or other applicable agreement. FHFC shall be satisfied in its sole discretion that all legal and program requirements for the loan have been satisfied.

6. Evidence of general liability, flood (if applicable), builder’s risk, and replacement cost hazard insurance (as certificates of occupancy are received) reflecting Florida Housing as Loss Payee/Mortgagee, in coverage, deductibles and amounts satisfactory to Florida Housing.

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, and of any corporate guarantor and any manager;

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 Agreement and;

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

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

9. 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 or its legal counsel, in connection with the SAIL and ELI Gap loans.

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

11. Any other reasonable conditions established by FHFC and its Legal Counsel.

This recommendation is also contingent upon the following additional conditions:

1. Compliance with all applicable provisions of Sections 420.507 and 420.509, Florida Statutes, Rule Chapter 67-21, F.A.C., Rule Chapter 67-53, F.A.C., Rule Chapter 67-60, F.A.C., RFA 2014-111, Section 42 I.R.C., and any other applicable State and Federal requirements.

2. Development and execution by the Borrower of the required Memorandum of Understanding 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 FHFC six (6) months prior to the construction completion date.

3. Acceptance by the Borrower and execution of all documents evidencing and securing the SAIL and ELI Gap Loans in form and substance satisfactory to Florida Housing, including, but not limited to, the Promissory Note, the Loan Agreement(s), the Mortgage and Security Agreement, and the Land Use Restriction Agreement(s).

4. Guarantors are to provide the standard FHFC Operating Deficit Guaranty. 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 an average 1.15 DSC on the combined 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 Guaranty shall not terminate earlier than three years following the final Certificate of Occupancy.

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

6. Guarantors to provide the standard Florida Housing Construction Completion Guaranty; to be released upon lien-free completion as approved by the Servicer.

7. Guarantors are to provide the standard Florida Housing Environmental Indemnity Guaranty.

8. Guarantors are to provide the standard Florida Housing Guaranty of Recourse Obligations.

9. Closing of the MMRB first mortgage loan simultaneous with or prior to closing of the SAIL and ELI Gap




loans.

10. A mortgagee title insurance policy naming Florida Housing as the insured in the amount of the SAIL and ELI Gap loans is to be issued immediately after 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.

11. Property tax and hazard insurance escrow are to be established and maintained by the First Mortgagee, the Bond Trustee or the Servicer. In the event the reserve account is held by the Servicer, the release of funds shall be at Florida Housing’s sole discretion.

12. Replacement Reserves funds in the amount of $312 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 Bond Trustee, or Florida Housing’s loan servicing agent. Preservation or Rehabilitation Developments (with or without acquisition) shall not be allowed to draw until the start of the scheduled replacement activities as outlined in the pre-construction capital needs assessment report (“CNA”) subject to the activities completed in the scope of rehabilitation, but not sooner than the third year.

13. The Initial Replacement Reserve will have limitations on the ability to be drawn. The amount established as a Replacement Reserve shall be adjusted based on a 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.

14. GLE Associates, Inc. will act as Florida Housing’s inspector during the construction period.

15. A minimum of 10% retainage holdback on all construction draws until the Development is 50% complete and 5% retainage thereafter is required. Retainage will not be released until successful completion of construction and issuance of all certificates of occupancy.

16. Satisfactory completion of a pre-loan closing compliance audit conducted by Florida Housing or Servicer, if applicable.

17. Any other reasonable requirements of the Servicer, Florida Housing, or its Legal Counsel.




Housing Credit Allocation Recommendation AmeriNational recommends an annual Housing Credit allocation in the amount of $889,441 for the construction and permanent financing of Cathedral Terrace Apartments. Please refer to Exhibit 3 - HC Allocation Calculation for further detail. HC Contingencies The HC allocation recommendation is contingent upon the receipt and satisfactory review of the following items by AmeriNat and FHFC. Failure to resolve these contingencies within this timeframe may result in forfeiture of the HC allocation: 1. Closing of the MMRB loan consistent with the assumptions of this credit underwriting report.

2. Closing of the SAIL and ELI Gap Loans consistent with the assumptions of this credit underwriting report.

3. GLE Associates, Inc. is to act as construction phase inspector for Florida Housing.

4. Award of Housing Credits and purchase of same by Raymond James Tax Credit Funds, Inc. or assigns, under terms consistent with the assumptions of this report and most recent commitment letter.

5. Receipt of executed FHFC Fair Housing, Section 504 and ADA as‐built certification forms 122, 127, and 129.

6. Receipt and satisfactory resolution of any outstanding past due or non-compliance issues.

7. Any other reasonable requirements of Florida Housing or its Servicer.



CATHEDRAL TERRACE EXHIBIT 1, PAGE 1 October 13, 2015

Cathedral Terrace 15 Year Operating Pro Forma

FINANCIAL COSTS: 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 15OPERATING PRO FORMA

Gross Potential Rental Income $2,061,696 $2,102,930 $2,144,989 $2,187,888 $2,231,646 $2,276,279 $2,321,805 $2,368,241 $2,415,605 $2,463,918 $2,513,196 $2,563,460 $2,614,729 $2,667,024 $2,720,364Other Income

Ancillary Income $23,400 $23,868 $24,345 $24,832 $25,329 $25,835 $26,352 $26,879 $27,417 $27,965 $28,524 $29,095 $29,677 $30,270 $30,876Gross Potential Income $2,085,096 $2,126,798 $2,169,334 $2,212,721 $2,256,975 $2,302,114 $2,348,157 $2,395,120 $2,443,022 $2,491,883 $2,541,720 $2,592,555 $2,644,406 $2,697,294 $2,751,240Less:

Physical Vac. Loss Percentage: 4.00% $83,404 $85,072 $86,773 $88,509 $90,279 $92,085 $93,926 $95,805 $97,721 $99,675 $101,669 $103,702 $105,776 $107,892 $110,050Collection Loss Percentage: 1.00% $20,851 $21,268 $21,693 $22,127 $22,570 $23,021 $23,482 $23,951 $24,430 $24,919 $25,417 $25,926 $26,444 $26,973 $27,512

Total Effective Gross Income $1,980,841 $2,020,458 $2,060,867 $2,102,085 $2,144,126 $2,187,009 $2,230,749 $2,275,364 $2,320,871 $2,367,289 $2,414,634 $2,462,927 $2,512,186 $2,562,429 $2,613,678Fixed:

Real Estate Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Insurance $110,400 $113,712 $117,123 $120,637 $124,256 $127,984 $131,823 $135,778 $139,851 $144,047 $148,368 $152,819 $157,404 $162,126 $166,990

Variable:Management Fee Percentage: 5.00% $99,042 $101,023 $103,043 $105,104 $107,206 $109,350 $111,537 $113,768 $116,044 $118,364 $120,732 $123,146 $125,609 $128,121 $130,684General and Administrative $84,000 $86,520 $89,116 $91,789 $94,543 $97,379 $100,300 $103,309 $106,409 $109,601 $112,889 $116,276 $119,764 $123,357 $127,058Payroll Expenses $480,000 $494,400 $509,232 $524,509 $540,244 $556,452 $573,145 $590,339 $608,050 $626,291 $645,080 $664,432 $684,365 $704,896 $726,043Utilities $363,600 $374,508 $385,743 $397,316 $409,235 $421,512 $434,157 $447,182 $460,598 $474,416 $488,648 $503,307 $518,407 $533,959 $549,978Marketing and Advertising $9,600 $9,888 $10,185 $10,490 $10,805 $11,129 $11,463 $11,807 $12,161 $12,526 $12,902 $13,289 $13,687 $14,098 $14,521Maintenance and Repairs/Pest Control $144,000 $148,320 $152,770 $157,353 $162,073 $166,935 $171,944 $177,102 $182,415 $187,887 $193,524 $199,330 $205,310 $211,469 $217,813Grounds Maintenance and Landscaping $6,000 $6,180 $6,365 $6,556 $6,753 $6,956 $7,164 $7,379 $7,601 $7,829 $8,063 $8,305 $8,555 $8,811 $9,076Contract Services $30,000 $30,900 $31,827 $32,782 $33,765 $34,778 $35,822 $36,896 $38,003 $39,143 $40,317 $41,527 $42,773 $44,056 $45,378Security $13,200 $13,596 $14,004 $14,424 $14,857 $15,302 $15,761 $16,234 $16,721 $17,223 $17,740 $18,272 $18,820 $19,385 $19,966

Reserve for Replacements $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880 $74,880Total Expenses $1,414,722 $1,453,927 $1,494,288 $1,535,840 $1,578,618 $1,622,658 $1,667,998 $1,714,676 $1,762,732 $1,812,207 $1,863,143 $1,915,584 $1,969,573 $2,025,158 $2,082,385Net Operating Income $566,119 $566,531 $566,579 $566,245 $565,509 $564,351 $562,751 $560,688 $558,139 $555,082 $551,491 $547,343 $542,612 $537,271 $531,293Debt Service Payments

First Mortgage - JHFA/Red Stone $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730 $486,730Second Mortgage - SAIL $32,000 $32,000 $32,000 $32,000 $32,000 $32,000 $32,000 $32,000 $32,000 $32,000 $32,000 $29,358 $24,467 $18,962 $12,814Third Mortgage - ELI $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Fourth Mortgage - JHFA $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $8,606 $5,402 $1,661 $0 $0 $0 $0Fifth Mortgage - CoJ SHIP $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sixth Mortgage Loan - Seller Note $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0HFA FM/PLS/CM Fee $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540 $6,540

$19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392 $19,392SAIL/ELI CM Fee $3,846 $3,961 $4,080 $4,203 $4,329 $4,459 $4,592 $4,730 $4,872 $5,018 $5,169 $5,324 $5,483 $5,648 $5,817

Total Debt Service Payments $558,508 $558,623 $558,742 $558,864 $558,990 $559,120 $559,254 $559,392 $558,140 $555,082 $551,491 $547,343 $542,612 $537,272 $531,293Cash Flow after Debt Service $7,612 $7,908 $7,837 $7,380 $6,518 $5,231 $3,497 $1,297 $0 $0 $0 $0 $0 $0 $0

FINANCIAL COSTS:Debt Service Coverage Ratios

DSC - First Mortgage 1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.15 1.15 1.14 1.13 1.12 1.11 1.10 1.09DSC - Second Mortgage 1.09 1.09 1.09 1.09 1.09 1.09 1.08 1.08 1.08 1.07 1.06 1.06 1.06 1.06 1.06DSC - Third Mortgage 1.09 1.09 1.09 1.09 1.09 1.09 1.08 1.08 1.08 1.07 1.06 1.06 1.06 1.06 1.06DSC - Fourth Mortgage 1.07 1.07 1.07 1.07 1.07 1.07 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06DSC - Fifth Mortgage 1.07 1.07 1.07 1.07 1.07 1.07 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06DSC - Sixth Mortgage 1.07 1.07 1.07 1.07 1.07 1.07 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06DSC - All Mortgages and Fees 1.01 1.01 1.01 1.01 1.01 1.01 1.01 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Financial RatiosOperating Expense Ratio 71.4% 72.0% 72.5% 73.1% 73.6% 74.2% 74.8% 75.4% 76.0% 76.6% 77.2% 77.8% 78.4% 79.0% 79.7%Break-even Economic Occupancy Ratio (all debt) 94.6% 94.6% 94.6% 94.7% 94.7% 94.8% 94.9% 94.9% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0%

INCO

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SAIL/ELI PLS Fee




Cathedral Terrace RFA 2014‐111 (2014‐426S) / 2015‐502C Description of Features and Amenities

A. The Development will consist of 240 units located in 1 residential building. Unit Mix:

Two Hundred and Forty (240) one bedroom/one bath units

240 Total Units

The Development is to be constructed in accordance with the final plans and specifications approved by the appropriate city or county building or planning department or equivalent agency, and approved as reflected in the Pre-Construction Analysis prepared for Florida Housing or its Servicer, unless a change has been approved in writing by Florida Housing or its Servicer. The Development will conform to requirements of local, state & federal laws, rules, regulations, ordinances, orders and codes, Federal Fair Housing Act and Americans with Disabilities Act (“ADA”), as applicable.

B. The Applicant commits to provide the following General Features for All Proposed Developments:

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 Development’s residents from a primary provider of cable or satellite TV; and

5. Full size range and oven in all units; Not feasible due to kitchen size per CNA 6. At least two full bathrooms in all 3 bedroom of larger new construction units, and 7. Bathtub with shower in at least one bathroom in at least 90% of the new construction non-

Elderly units

C. The Applicant has committed to provide the following Accessibility, Universal Design and Visitability Features:

i. All units of the proposed Development must meet all federal requirements and state building code requirements, including the following:

• 2012 Florida Accessibility Code for Building Construction as adopted pursuant

to Section 553.503, Florida Statutes;




• The Fair Housing Act as implemented by 24 CFR 100; Building construction/unit sizes prohibit full compliance per CNA

• Section 504 of the Rehabilitation Act of 1973; and Building construction/unit sizes prohibit full compliance per CNA

• Titles II and III of the Americans with Disabilities Act of 1990 as implemented by 28 CFR 35, incorporating the most recent amendments, regulations and rules.

D. All new construction units that are located on an accessible route must have the following

Accessibility, Adaptability, Universal Design and Visitability Features listed below. All rehabilitation units that are located on an accessible route must include as many of the features listed below as are structurally and financially feasible within the scope of rehabilitation work utilizing a capital needs assessment performed during the credit underwriting process:

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 operates easily using a single closed fist.

E. All rehabilitation units must include the following General Features, Required Green Building

Features and Additional Green Building Features:

1. Required Green Building Features in all Family and Elderly Demographic Developments:

All rehabilitation units must include as many of the following required Green Building features as are structurally and financially feasible within the scope of the rehabilitation work utilizing a capital needs assessment performed during the credit underwriting process.

a. Low or No-VOC paint for all interior walls (50 grams per liter or less for flat paint; 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. Toilets: 1.6 gallons/flush or less,

ii. Faucets: 1.5 gallons/minute or less, iii. Showerheads: 2.2 gallons/minute or less;

c. Energy Star qualified refrigerator; d. Energy Star qualified dishwasher; Not feasible due to kitchen size per the CNA




e. Water heating minimum efficiency specifications (choose gas, electric, or gas tankless or boiler/hot water maker); i. Gas

• 30 gal = .63 EF; or • 40 gal = .61 EF; of • 50 gal = .59 EF; or • 60 gal = .57 EF; or • 70 gal = .55 EF; or • 80 gal = .53 EF; or

ii. Electric • 30 gal = .94 EF; or • 40 gal = .93 EF; of • 50 gal = .92 EF; or • 60 gal = .91 EF; or • 70 gal = .90 EF; or • 80 gal = .89 EF; or

iii. Tankless gas water heater: minimum .80 EF; or iv. Boiler or hot water maker:

• <300,000 Btu/h: 85% Et (thermal efficiency); or Provided • 300,000 Btu/h or higher: 80% Et; or

f. Energy Star qualified ceiling fans with lighting fixtures in the bedrooms; g. Air Conditioning (choose in-unit or commercial);

i. In-unit air conditioning: minimum 14 SEER; or ii. packaged units are allowed in studio/efficiency units and one-bedroom units:

minimum 11.7 EER; or iii. Central chiller AC system—based on size: Not financially feasible per the CNA;

Central chillers recently replaced • 0-65 KBtuh: Energy Star certified; or • >65-135 KBtuh: 11.3 EER/11.5 IPLV; or • >135-240 KBtuh: 11.0 EER/11.5 IPLV; or • >240 KBtuh: 10.6 EER/11.2 IPLV;

h. Caulk, weather-strip, or otherwise seal all holes, gaps, cracks, penetrations, and electrical receptacles in building envelope;

i. Seal and insulate heating and cooling system ducts with mastic or metal backed tape.

F. In addition to the required features outlined above, all Applications with the Elderly Demographic must also provide the following in all units (new construction units and rehabilitation units): 1. Fifteen (15) percent of the new construction units must have roll-in showers.

2. In all of the new construction units and in as many of the rehabilitation units as is structurally

and financially feasible within the scope of the rehabilitation work utilizing a capital needs assessment performed during the credit underwriting process: a. Horizontal grab bars in place around each tub and/or shower, the installation of which

meets or exceeds 2010 ADA Standards for Accessible Design, Section 609. In addition, the following standards for grab bars are required: o If a bathtub/shower combination with a permanent seat is provided, grab bars shall be installed to meet or exceed 2010 ADA Standards for Accessible Design, Section 607.4.1.




• If a bathtub/shower combination without a permanent seat is provided, grab bars shall be installed to meet or exceed 2010 ADA Standards for Accessible Design, Section 607.4.2.

• If a roll-in shower is provided, grab bars shall be installed to meet or exceed 2010 ADA Standards for Accessible Design, Section 608.3.2;

• Reinforced walls for future installation of horizontal grab bars in place around each toilet, the installation of which meets or exceeds 2010 ADA Standards for Accessible Design, Section 604.5.1 (Side Wall);

b. Roll-out shelving or drawers in all bottom bathroom vanity cabinets; All bathrooms will have pedestal sinks per the CNA

c. Adjustable shelving in master bedroom closets (must be adjustable by resident); and d. In at least one of the kitchen's bottom or base cabinets, there shall be a large drawer

that has full extension drawer slides. 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) * 6. _X_ Energy star qualified roofing materials (metal, shingles, thermoplastic polyolefin (TPO),

or tiles) (3 points) * 7. _ _ Eco-friendly cabinets – formaldehyde free, material certified by the Forest Stewardship

Council (3 points) 8. ___ Eco-friendly flooring for entire unit – Carpet and Rug Institute Green Label certified carpet

and pad, bamboo, cork, 100 percent recycled content tile, and/or natural linoleum (3 points) 9. _X _ Energy star rating for all windows in each unit via replacement of window panes with

Energy star compliant glass in lieu of full window replacement (3 points) 10. _ _ Florida Yards and Neighborhoods certification on all landscaping (2 points) 11. ___ Install daylight sensors, timers or motion detectors on all outdoor lighting attached to

buildings (2 points) * Applicant may choose only one option related to Energy Star qualified roofing.

H. The Applicant has committed to provide the following Resident Programs:




1. Literacy Training – 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. Training must be held between the hours of 8:00 a.m. and 7:00 p.m. and 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. Computer Training – The Applicant or its Management Company shall make available computer and internet training classes (basic and/or advanced level depending on the needs and requests of the residents). The training classes must be provided at least once a week, at no cost to the resident, in a dedicated space on site. Training must be held between the hours of 8:00 a.m. and 7:00 p.m. and 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.

3. Resident Assurance Check-In Program – Applicant commits to provide and use an established

system for checking in with each resident on a pre-determined basis not less than once per day, at no cost to the resident. Residents may opt out of this program with a written certification that they choose not to participate.




Housing Credit Allocation Calculation

Qualified Basis Calculation

AcquisitionAcquistion Cost of Land and Existing Improvements $7,820,000 Less Land Costs $424,336Total Eligible Basis $7,395,664Applicable Fraction 100%DDA/QCT Basis Credit, if applicable 100%Qualified Basis $7,395,664Housing Credit Percentage (Federal allocation) 3.37%Annual Housing Credit Allocation $249,234

RehabilitationTotal Development Cost $25,596,641 Less Cost of Land and Existing Improvements $7,820,000 Less Other Ineligible Costs $3,163,373Total Eligible Basis $14,613,268Applicable Fraction 100%DDA/QCT Basis Credit, if applicable 130%Qualified Basis $18,997,248Housing Credit Percentage (Federal allocation) 3.37%Annual Housing Credit Allocation $640,207

Annual Housing Credit Allocation Per Qualified Basis $889,441 Notes to the Qualified Basis Calculation: 1. “Other Ineligible Costs” include Florida Housing compliance, administrative, application, and

underwriting fees, title insurance/recording fees, marketing/advertising fees, tenant relocation costs, construction loan related costs, operating reserves, bond related costs, and existing reserves.

2. The Development is 100% set-aside; therefore, the Applicable Fraction is 100%.

3. The Development is located in a Qualified Census Tract (“QCT”); therefore, the 130% multiplier for Rehabilitation DDA/QCT Basis Credit was utilized.

4. Per the Rule, 15 basis points are added to the actual percentage (3.22%) reported as of December 19,

2014, the date of invitation to credit underwriting for Housing Credits. For purposes of this report, a total Housing Credit Percentage of 3.37% is therefore applied.




GAP Calculation

Total Development Cost (including land and ineligible costs) $25,596,641 Less Mortgages $15,667,405Equity Gap $9,929,236HC Percentage to Investment Partnership 99.989%HC Syndication Pricing $1.0200102256HC Required to meet Equity Gap $9,735,518Annual HC Required $973,552

Notes to the GAP Calculation: 1. Mortgages include a First Mortgage from Red Stone, Second and Third Mortgages from Florida

Housing, a Fourth Mortgage from JHFA, a Fifth Mortgage from the City of Jacksonville, and a Sixth Mortgage from the Seller.

2. The HC Syndication Pricing of $1.0200102256 per dollar and HC Percentage to Investment Partnership are based upon the letter of intent from RJTCF dated April 22, 2015 and applied in the GAP Calculation.

Summary HC Per Qualified Basis $889,441HC Per GAP Calculation $973,552

Annual HC Recommended $889,441

HC Proceeds Recommended $9,071,391

Notes to Summary: 1. The Annual HC Recommended is equal to the lesser of the Qualified Basis or the GAP Calculation. The

Qualified Basis amount is therefore recommended.




50% Bond Test Total DEPRECIABLE Cost $22,008,932

Plus: Land Cost $424,336Equals Aggregate Basis $22,433,268

Tax Exempt Bond Amount $12,500,000LESS Debt Service Reserve $916,133

Equals Tax Exempt Proceeds Used for Building and Land $11,583,867

Tax Exempt Proceeds as a Percentage of Aggregate Basis 51.64%

Notes to the 50% Bond Test: 1. Based upon this analysis, the 50% Test is satisfactory.


COMPLETENESS AND ISSUES CHECKLIST


DEVELOPMENT NAME: Cathedral Terrace DATE: October 13, 2015

In accordance with the applicable Program Rule(s), the Applicant 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 FHFC. The following items must be satisfactorily addressed. “Satisfactorily” means that the Credit Underwriter has received assurances from third parties unrelated to the Applicant that the transaction can close within the allowed timeframe. Unsatisfactory items, if any, are noted below and in the “Issues and Concerns” section of the Executive Summary.

FINAL REVIEW

REQUIRED ITEMS:

STATUS NOTE

Satis. / Unsatis.

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.

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

Permit Status. Satis.

Pre-construction analysis (“PCA”). Satis.

Survey. Satis.

Complete, thorough soil test reports. Satis.

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

Market Study separate from the Appraisal. Satis.

Environmental Site Assessment – Phase I and/or the 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.

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

Satis.

Resumes and experience of applicant, general contractor, and management agent. Satis.

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

Management Agreement and Management Plan. Satis.

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

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

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

Updated sources and uses of funds. Satis.

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


COMPLETENESS AND ISSUES CHECKLIST


Fifteen-year income, expense, and occupancy projection. Satis.

FINAL REVIEW

REQUIRED ITEMS:

STATUS NOTE

Satis. / Unsatis.

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

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

Any additional items required by the credit underwriter. Satis.

NOTES AND DEVELOPER RESPONSES:

None


Documents

Florida Housing Finance Corporation...Oct 13, 2015 · James Chadwick Shawn Wilson Weedon Enterprises, LLC Red Stone Tax Exempt Funding LLC Carteret Management Corporation Raymond