FOR THOSE PERMISSIONED

Overview of Short-term Cash Collateralized Tax-exempt Bonds

Southeast Mortgage Advisory Council ConferenceMay 13, 2015Crowne Plaza – Perimeter at Ravina, Atlanta, Georgia

Stifel, Nicolaus & Company, Incorporated2660 Eastchase Lane4th FloorMontgomery, Alabama 36117

John B. Rucker, IIIManaging Directorruckerj@stifel.com

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Disclaimer

This confidential discussion material (this “Material”) has been prepared by Stifel, Nicolaus & Company, Incorporated (“Stifel”) for the Southeast Mortgage Advisory Council (“SMAC”) annual conference. All materials, including proposed terms and conditions, are indicative and for discussion purposes only. Finalized terms and conditions are subject to further discussion and negotiation. Any opinions expressed are our present opinions only and Stifel is under no obligation to update those opinions. All information, including any price indications provided is supplied in good faith based on information we believe, but do not guarantee, to be accurate or complete. We are not responsible for errors or omissions contained herein. Stifel does not provide accounting, tax or legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with your advisors and counsel. Certain provided information may be based on Stifels’ own good faith understanding of the application of certain accounting rules as they apply. Stifel makes no representation as to whether its understanding of certain accounting rules is correct and, by providing such information, is not providing you with any accounting advice, including, without limitation, any advice regarding the potential income statement or balance sheet impact from any proposed transaction. All information provided was supplied in good faith based on information which we believe, but do not guarantee, to be accurate or complete. Further information regarding these Materials may be obtained upon request. This Material, and any advice, recommendations, information or work product provided by Stifel is not intended for the benefit of any third party and may not be relied upon by any third party. Any reproduction of this Material, in whole or in part, is strictly prohibited.

Stifel, Nicolaus & Company, Incorporated is not acting as a Financial Advisor or Municipal Advisor.

The primary role of Stifel, as investment banker, is to purchase securities, for resale to investors, in an arm’s-length commercial transaction between the Issuer and Stifel. Stifel has financial and other interests that differ form those of the Issuer. Stifel is not acting as a municipal advisor, financial advisor or fiduciary to the Issuer or any other person or entity. The information provided is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities Exchange Act of 1934. The Issuer should consult with its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it deems appropriate.

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Why does this structure work?

……the yield curve has steepened ……pushing short-term rates to all-time lows

“AAA” Municipal Yield Curve SIFMA Index

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

Source: BloombergThomson Reuters Municipal Market Data (MMD) AAA curve is a proprietary yield curve that provides the offer-side of AAA rated state general obligation bondsSIFMA is a high-grade market index released by Municipal Market Data. The index includes 7-day tax-exempt variable rate demand obligations with the highest short-term ratings

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

05/ 01/ 07 05/ 01/ 15

Since the credit crisis in 2007, the yield curve has steepened by over 340 basis points.

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Short-term Cash Collateralized Bonds

Negative Arbitrage Account

Collateral Fund

Housing Project

Project Fund

Developer

Bond Proceeds

Bond Proceeds Bonds Bond Proceeds

Construction DrawInterest dueon Bonds

Project Costs

Bond Investor

Trustee Lender Underwriter

The Project Fund and Collateral Fund will always equal the par amount of the Bonds. A draw from the Project Fund must be accompanied by depositing the same amount in the Collateral Fund. After the Project is placed in service, the Bonds will be retired with proceeds from the Collateral Fund.

Notes: The Developer will need to deposit the interest due on the Bonds through the Mandatory Tender Date or Final Maturity Date at closingThe taxable loan can be FHA-insured, Fannie, Freddie and USDA enhanced loans

Loan Proceeds

Short-term Tax-exempt Bonds Conventional Loan

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The bonds can be structured under various terms.

Notes: For discussion purposes only. Subject to change based on current market conditions. Assumes a 24-month construction periodOn or before the Mandatory Tender Date, the Remarketing Agent will remarket the Bonds with a new interest rate and a final maturity May 1, 2017, subject to optional redemption. The interest rate will not be known until the Mandatory Tender Date.

May 1, 2015Bond Closing

May 1, 2017Final Maturity

Option 1: The bonds can be priced with a two-year maturity

0.75%

Option 2: The bonds can be priced with a two-year maturity with a one-year mandatory tender

May 1, 2015Bond Closing

May 1, 2017Final Maturity

May 1, 2016Mandatory Tender

0.35% _____%