Tennessee Housing Development Agency - Board of Directors Meeting Materials May 24, 2016 › thda.org › Documents › About-THDA › ... · 2016-05-13 · 1, 2016 – March 31,

Tennessee Housing Development

Agency - Board of Directors

Meeting Materials

May 24, 2016

Tab 1 - Agenda

Tab 2 - Memo from Ralph Perrey, Staff Awards, Quarterly Summary Tab 3 - Board Meeting Minutes

from March 22, 2016

Tab 4 – Resolution to Form a Rental Assistance Committee

Tab 5 – Bond Finance Committee Meeting Materials

Tab 6 – Tax Credit Committee

Meeting Materials

Tab 7 – Lending Committee

Meeting Materials

Tab 8 – Grants Committee

Meeting Materials

Tab # 1 Items: Agenda

THDA Board of Directors Meeting May 24, 2016—1:00 p.m. William R. Snodgrass -Tennessee Tower 312 Rosa L Parks Avenue, Third Floor The Nashville Room Nashville, Tennessee 37243

* Indicates Board Action Required ? Indicates Discussion Which Might Result In Board Action

AGENDA (Tab #1)

Public Comment to the Board Bills, Perrey, Board Members

A. Opening Comments and Introductions ................................................................................................... Bills

B. Staff Recognition (Directors) (Tab #2)................................................................................................. Perrey

C. Approval of Minutes from March 22, 2016, Meeting (Tab #3) ............................................................. Bills

D. Executive Director’s Report (Tab #2) .................................................................................................. Perrey

E. Resolution to Form a Rental Assistance Committee (Tab #4) ............................................................. Bills

F. Committee Reports and Committee Matters

1. Tax Credit Committee (May 23, 2016—10:00 a.m. Tennessee Tower, Nashville Room) (Tab #5) ................................................................................................................................................ Bills

a. 2016 Low Income Housing Tax Credit Application Review Notice Appeals ......................... (Blade) b. 2017 Low Income Housing Tax Credit Qualified Allocation Plan Initiative Updates ............ (Blade) c. Update on Tax Exempt Bond Volume Cap Utilization ........................................................... (Blade)

2. Bond Finance Committee (May 23, 2016—2:00 p.m. State Capitol Room G-11)

(Tab #6) ................................................................................................................................................ Bills * a. FY 2016-2017 Schedule of Financing .................................................................................... (Ridley) * b. Authorization of Issue 2016-2............................................................................................... (Balcom) * c. Issue 2016-2 Reimbursement Resolution ............................................................................. (Balcom) * d. THDA Debt Management Policy ............................................................................................ (Ridley) e. Issue 2016-1 State Form CT-0253 .......................................................................................... (Ridley)

3. Audit & Budget Committee (May 24, 2016—9:15 a.m. Tennessee Tower, Nashville Room)

Agenda to be determined by the Chairman of this Committee .............................................. Lillard 4. Lending Committee (May 24, 2016—9:30 a.m. Tennessee Tower, Nashville Room) (Tab #7) .......................................................................................................................................... Cleaves

* a. Income Limit Changes .............................................................................................................. (Hall) b. Hardest Hit Fund Program Update.......................................................................................... (Peraza)

5. Grants Committee (May 24, 2016 —9:45 a.m. Tennessee Tower, Nashville Room) (Tab #8) ............................................................................................................................................. Baker

* a. Funding Recommendations under the 2015/2016 HOME Program Description ...................... (Watt) * b. Funding Recommendations under the THDA Housing Trust Fund

Competitive Grant Spring 2016 Program Description ........................................................... (Watt) * c. Funding Recommendations under the 2015/2016 Emergency Solutions Grant

Program Description ............................................................................................................... (Watt) * d. Approval of 2015-2016 HOME Program Description for Community Housing

Development Organizations ................................................................................................... (Watt) * e. Approval of 2016-2017 Emergency Repair Program Description ............................................. (Watt) f. National Housing Trust Fund Program Update ......................................................................... (Watt) Indicates documentation will be sent separately.

Tab # 2 Items: Memo from Ralph Perrey, Executive Director Staff Service Awards Quarterly Board Report

Ralph M. Perrey, Executive Director

Andrew Jackson Building Third Floor - 502 Deaderick St. - Nashville, TN 37243

www.THDA.org - (615) 815-2200 - Toll Free: 800-228-THDA

TO: THDA Board of Directors

FROM: Ralph M. Perrey

DATE: May 11, 2016

SUBJ: THDA Board Update

THDA Board Members,

We look forward to seeing you in Nashville for our Board Meeting May 24. This will likely be the

final meeting for two of our members - Benjie Shuler and John Baker - and on behalf of THDA

staff I thank them for their service.

This month we will ask you to create a standing committee to review our rental housing programs.

These Federal programs do not fit with our existing committees, and we think it will be helpful to

have a place where we can inform you of issues and federal challenges.

We ask your authorization for our second bond issuance of the year, along with the reimbursement

resolution that accompanies it. More info is behind the Bond Finance Committee tab. The

committee will also take up our plan of financing for next fiscal year.

Grants Committee will consider the commendations for awards from the Trust Fund, HOME and

ESG programs.

The Tax Credit Committee will hear appeals of its review notices May 23.

Director of Loan Servicing Steve Fisher will offer an update on our progress.

Please let me know if you have questions about anything in your packet, and let Cindy Ripley

know if you need assistance with travel arrangements.

http://www.thda.org/

Celebrating Years of Service10 Years

Ricardo Moore Contract Operations Specialist

Section 8 Contract Administration THDA Hire Date: May 16, 2006

15 Years

Linda Scott Rental Assistance Specialist Section 8 Rental Assistance

THDA Hire Date: June 1, 2001

10 Years

Kristen Spratt Housing Program Coordinator

Community Programs THDA Hire Date: June 1, 2006

15 Years

Suzan Foulks Systems Developer

Information Technology THDA Hire Date: May 7, 2001

Bill Haslam Ralph M. Perrey Governor Executive Director

MEMORANDUM:


FROM: Bettie Teasley Director, Research and Planning

DATE: May 10, 2016

SUBJECT: Q4 2015 Quarterly Board Report: Revision

An updated version of the Q4 2015 Quarterly Board Report has been posted to THDA.org with revisions to the Multifamily Development numbers, as well as a corrected display of Neighborhood Stabilization Program expenditures.

You can view the update under the “Quarterly Board Reports” heading at https://thda.org/research-planning/thda-program-data.

Please do not hesitate to contact me at [email protected] or 615-815-2125 if you have any further questions.

Tennessee Housing Development Agency Andrew Jackson Building Third Floor 502 Deaderick St., Nashville, TN 37243

(615) 815-2200

https://thda.org/research-planning/thda-program-data

https://thda.org/research-planning/thda-program-data

mailto:[email protected]

THDA QUARTERLY BOARD REPORT January 1, 2016 – March 31, 2016

Summary of Quarterly Activities

THDA Quarterly Board Report January 1, 2016 – March 31, 2016

Finances and Resources

Available Volume Cap (March 31, 2016) $1,835,249,626

Bonds Outstanding (March 31, 2016) $1,813,405,000

Operating Income (as of December 31) $3,664,000

Net Assets (as of December 31) $516,055,000

Multifamily Programs

In Service/Compliance Developments Units Multifamily Bond and 4% Credits 111 17,695

Low-Income Housing Tax Credit (9%) 439 29,718

In Carryover/Development Multifamily Bond and 4% Credits 30 2,330

Low-Income Housing Tax Credit (9%) 40 4,019

Current Calendar Year Allocations Multifamily Bond and 4% Credits 4 773

Low-Income Housing Tax Credit (9%) 0 0

Homeownership Activities Number Value

Loans Committed During Quarter 475 $59,582,365 Loans Funded During Quarter 420 $51,316,856

Q1, 2016 Q1, 2015 Loans Serviced 23,650 24,259

Value of Loans (in millions) $1,907 $1,929 Loans 60-days Delinquent 1.65% 1.69% Loans 90-days Delinquent 6.15% 6.09%

Loans in Foreclosure 0.92% 0.59% Loans Paid Off 494 481

Q1, 2016 Total Served Foreclosure Counseling (AG & NFMC) 241 16,775

Section 8 Housing Choice Voucher Program

Rental Vouchers 5,827 Homeownership Vouchers 40

Total HAP Payments $7,575,327.44

Project Based Section 8 Units 29,198

Total HAP Payments $41,136,657.77

THDA QUARTERLY BOARD REPORT

January 1, 2016 – March 31, 2016

Summary of Grant Programs

THDA Quarterly Board Report January 1, 2016 - March 31, 2016

ProgramFunds Awarded /

Allocated Paid this Quarter Paid to DateAwarded Funds

RemainingUnallocated Program $

Housing Trust Fund (active grants)Home Modification and Ramps $600,000 $14,308 $353,853 $246,147 59%

Rural Repair $6,359,232 $19,491 $6,332,904 $26,328 100%

MHHR/TMHF Replacement Programs $1,000,000 $0 $193,056 $806,944 19%

Emergency Repair $16,366,655 $230,627 $14,578,385 $1,788,270 89%

Competitive Grants $20,258,459 $1,213,666 $11,726,284 $8,532,175 58%

Rebuild and Recover $2,075,000 $67,346 $1,302,816 $772,184 $225,000 63%

Habitat for Humanity $1,000,000 $60,000 $760,000 $240,000 76%

Special Dunlap New Hope $300,000 $0 $222,389 $77,611 74%

HOME2014 $9,846,399 $259,543 $417,547 $9,428,852 4%

2013 $9,091,577 $421,544 $1,550,516 $7,541,062 17%

2012 & 2012 CHDO $10,964,340 $607,475 $4,145,751 $6,818,589 38%

2010-2011 $32,343,508 $44,689 $32,164,813 $178,695 99%

$8,897,729 $896,528 $7,133,100 $1,764,629 80%

$7,876,328 $414,785 $4,739,537 $3,136,792 60%

$148,296,539 $13,522,952 $124,094,063 $24,202,476 84%

Emergency Solutions Grant

Weatherization Assistance Program

LIHEAP

Recovery ProgramsNeighborhood Stabilization 1 $47,554,269 $14,510 $47,493,257 $61,012 100%

Keep My TN Home (HHF) $182,844,187 $4,369,037 $174,071,433 $8,772,754 $9,896,934 95%

Keep My TN Home(Medical Hardship Program) $23,753,914 $1,145,594 $20,467,651 $3,286,263 $1,246,086 86%

Percent Expended

Notes:

Summary of Activity

Finances and Resources

Available Volume Cap: This is the total tax-exempt bond volume THDA currently has available to use for housing purposes. Bonds Outstanding: This is the current value of bond volume outstanding. Pursuant to TCA 12-23-121(a), THDA has a maximum bonding authority of $2,930,000,000. Operating Income: This number reflects THDA’s operating income for the financial year through the end of the previous quarter (not including changes in the fair value of investments). Due to the recent implementation of GASB 68, this report does not show a year-over-year comparative period as it has done previously.Net Assets: This number reflects THDA’s net assets from the end of the previous quarter.

Multifamily Programs

Multifamily Bond and 4% Credits: These include developments that used multifamily bonds and/or 4% (“non-competitive”) tax credits as their source of financing. Low-Income Housing Tax Credit (9%): These include developments that received 9% (“competitive”) tax credits as their source of financing. In Service/ Compliance: This includes all developments that are available for households in Tennessee and are in the compliance monitoring period. In Development / Carryover: This includes all developments that are in the renovation/construction phase, and not yet available for households to move in. Current Year Allocations: This includes all developments that have received tax credit reservations this year and are not yet in carryover.

Summary of Grant Programs

Housing Trust Fund: This includes all active grants (those with funds available to be drawn) since the start of the Housing Trust Fund. Rebuild and Recover, Keep My TN Home (Hardest Hit Fund & Medical Hardship Programs): Funds are expended from these programs as needed, thus anadditional column is included to show federal or Board awarded funds that are currently uncommitted. The total uncommitted dollars plus the funds awarded column for each program is equal to the total Board or federally awarded funding amounts.

Keep My Tennessee Home (HHF): Administrative funds are deducted from the funds award and not included in the report. THDA approved the last borrower for the Keep My Tennessee Home Program in November 2014, but continued disbursing funds on behalf of the borrowers approved previously. Disbursed dollar amounts show the payments that were made during the current quarter.

THDA Quarterly Board Report January I, 2016 - March 31, 2016

Tab # 3 Items: Board Meeting Minutes from March 22, 2016

TENNESSEE HOUSING DEVELOPMENT AGENCY BOARD OF DIRECTORS

March 22, 2016

Pursuant to the call of the Chairman, the Tennessee Housing Development Agency Board of Directors met in regular session on Tuesday, March 22, 2016, at 1:00 p.m. Central Time, in the William R. Snodgrass Tennessee Tower, The Nashville Room, Nashville, Tennessee.

The following Board members were present: Brian Bills (Chair), John Baker, Ann Butterworth for Comptroller of the Treasury Justin Wilson, Kim Grant Brown, Dorothy Cleaves, Courtney Hess for State Treasurer David Lillard, Greg Turner for Commissioner of Finance & Administration Larry Martin, Secretary of State Tre Hargett, Ron Jones, Jim Sattler, Benjie Shuler and Pieter van Vuuren. The following Board members were absent: Kendra Cooke, Daisy Fields and Ashleigh Roberts.

Chairman Bills recognized Ralph Perrey, Executive Director, who recognized the following THDA staff members for their years of service:

Cathy Salazar Human Resources 10 years Patricia M. Smith Public Affairs 30 years Scott Holden Information Technology 10 years Abdulrahim Fathi Internal Audit 10 years Bonita Hall Section 8 Rental Assistance 15 years Lisa Shockley Section 8 Rental Assistance 15 years Deborah Reeves Community Outreach 20 years

Chairman Bills, seeing a quorum present, called the meeting to order and offered a time for public comment. No members of the public asked to speak. Chairman Bills then introduced and welcomed new Board member, Jim Sattler.

Chairman Bills called for consideration of the Board minutes from January 26, 2016. Upon motion by Chairman Bills, second by Mr. van Vuuren, the minutes as presented were approved.

Chairman Bills called on Mr. Perrey who provided the following Executive Director’s report:

• Mortgage production as of March 21, 2016, exceeded $16.3 million and continues to run ahead of projections.

• Mr. Perrey recognized Steve Fisher, Director of Loan Servicing, who provided the following information on loan servicing efforts:

o The implementation team at THDA has made significant progress during the last month toward getting the servicing operation up and running;

o Analyses have been completed on software vendors and functionality;

o Call center is under way;

2

o Job postings will be made in the near future;

o Plans for offices at Parkway Towers are under way, however, the operational efforts will begin in the Andrew Jackson Building and transition to Parkway Towers when construction work is complete.

o Plans for an orderly conversion for all THDA loans from external servicers to THDA are underway with discussions with several lenders regarding timing.

o The plan is to be operational by mid-summer with larger conversions to be completed approximately one year out.

Chairman Bills noted that the Audit & Budget Committee and the Bond Finance Committee did not meet, so there will be no reports from those two committees. Chairman Bills also noted that work is underway on Issue 2016-1 Bond, so updates will be presented in May.

Chairman Bills reported that the Tax Credit Committee had no action items, however, he recognized Mike Blade, Assistant General Counsel and Director of the Multifamily Division, who provided updates on Forest Creek Townhomes in Memphis, the 2016 Developer Forum and items to be considered for the 2017 Low Income Housing Tax Credit Qualified Allocation Plan. Chairman Bills recognized Laura Swanson, Research Analyst, who presented a report titled “Aging Affordable Rental Housing in Tennessee & the Need for Preservation”. Chairman Bills then recognized Jacob Sipe, Executive Director of the Indiana Housing and community Development Authority who presented information about the Indiana Housing Innovative Concept.

Chairman Bills, then recognized Dorothy Cleaves to report on the Lending Committee meeting. Ms. Cleaves noted that the Board previously approved the concept of a Mortgage Credit Certificate program. She referenced a memo from Lindsay Hall dated March 10, 2016, that provides MCC program details as recommended by staff and the Lending Committee. Ms. Cleaves indicated that the Lending Committee recommended that the Board take the following actions:

• Ratify publication of the Notice in the major newspapers of the state that was done to ensure publication at least 90 days prior to the start of the program;

• Authorize the Mortgage Credit Certificate Program, to be called “Take Credit”, as described in the referenced memo and attached term sheet;

• Authorize staff to finalize all program details and all documents and materials, all as necessary to carry out the program and to comply with IRS requirements; and

• Authorize all appropriate staff to do all things necessary and proper, including execution of all documents to carry out the described program and to comply with IRS requirements.

Upon motion by Ms. Cleaves, second by Mr. Baker, the above recommendations were approved.

Ms. Cleaves then recognized Ms. Hall to discuss the Fifth Round of Hardest Hit Fund (HHF) funding. Ms. Hall referenced a memo dated March 11, 2016, from Cynthia Peraza, Director

3

of Special Programs, describing the funding and program proposals. Ms. Hall noted that the Lending Committee recommended that the Board of Directors take the following actions:

• Ratify acceptance of $51,945,211 in the first phase of additional HHF funding; • Ratify submission of the THDA application for the maximum amount of the second

phase of additional HHF funding; • Authorize an HHF Principal Reduction Program and an HHF Downpayment

Assistance Program as described in the referenced memo, subject to U.S. Treasury approval;

• Authorize staff to modify the programs as may be directed by U.S. Treasury; and • Authorize all appropriate staff to do all things necessary and proper, including

execution of all documents, to retain the first phase funding, to apply for and obtain second phase funding and to carry out the described programs.

Upon motion by Ms. Cleaves, second by Mr. Bills, the above recommendations were approved.

Chairman Bills then recognized Mr. Baker to report on the Grants Committee meeting. Mr. Baker provided a National Housing Trust Fund update, an update of applications for the 2016 HOME Program and for the THDA Housing Trust Fund Competitive Grants, and an update on grants contracts that received extensions in 2015.

Mr. Baker then referenced a memo from Don Watt, Director of Community Programs, dated March 22, 2016, that provides information about the Weatherization Assistance Program and describes an application THDA must make to the Department of Energy prior to May 1, 2016 for Program Year 2016 funding. He noted that the Committee recommended that the Board authorize staff to submit an application to DOE for Weatherization Assistance Program funding for Program Year 2016 funds by May 1, 2016, subject to prior review of material changes by the Board Chair and Executive Director. Upon motion by Mr. Baker, second by Mr. Bills, the recommendation was approved.

With no further business to address, meeting was adjourned.

Respectfully submitted, Ralph M. Perrey Executive Director Approved this _____ day of May, 2016.

Tab # 4 Items: Resolution to Form a Rental Assistance Committee

RESOLUTION OF THE BOARD OF DIRECTORS OF THE TENNESSEE HOUSING DEVELOPMENT AGENCY

AUTHORIZING THE CREATION AND DESCRIBING THE FUNCTIONS OF A RENTAL ASSISTANCE COMMITTEE

May 24, 2016

WHEREAS, the Tennessee Housing Development Agency Board of Directors (the “THDA Board”) acknowledges that the activities and functions undertaken by THDA have grown increasingly complex over the years and that THDA may engage in additional or different activities and functions in the future; and

WHEREAS, effective consideration of all current and future THDA activities and functions cannot be undertaken within the existing committee structure of the THDA Board; and

WHEREAS, pursuant to Section 6.3 of the Amended and Restated By-Laws of the Tennessee Housing Development Agency Board of Directors revised January 16, 1997 (the “By-Laws”), committees may be established and their duties prescribed by resolution of the THDA Board; and

WHEREAS, the THDA Board wishes to create a rental assistance committee of the THDA Board and to prescribe their duties as set forth herein.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE TENNESSEE HOUSING DEVELOPMENT AGENCY AS FOLLOWS:

1. A rental assistance committee is hereby established as a standing committee of the THDA Board of Directors to carry out policy, oversight and advisory functions and responsibilities directly and indirectly related to THDA’s administration of rental assistance programs, including Project Based Contract Administration, the Housing Choice Voucher program, and the Family Self-Sufficiency program (the “Rental Assistance Committee”).

2. The THDA Board Chair shall determine the number of members who will serve on the Rental Assistance Committee and shall appoint such members as specified in Section 6.3 of the By-Laws. The THDA Board Chair shall also designate one of the Rental Assistance Committee members as Chair of the Rental Assistance Committee.

3. Other functions, duties and responsibilities may be assigned to the Rental Assistance Committee as determined by the THDA Board Chair.

4. The meetings of the Rental Assistance Committee shall occur in conjunction with THDA Board meetings in the same manner as other committee meetings, or as otherwise determined by the THDA Board Chair.

This resolution shall take effect immediately.

This Resolution was adopted by the affirmative vote of no fewer than eight (8) members of the THDA Board of Directors at its meeting on May 24, 2016.

Tab # 5 Items:

Bond Finance Committee Meeting Materials

Tennessee Housing Development Agency Bond Finance Committee

May 23, 2016 2:00 p.m. Central Time

AGENDA 1. Call to Order ................................................................................................... Bills 2. Approval of Minutes from April 13, 2016 ..................................................... Bills 3. FY 2016-2017 Schedule of Financing ......................................................... Ridley 4. Authorization of Issue 2016-2 ................................................................... Balcom 5. Issue 2016-2 Reimbursement Resolution .................................................. Balcom 6. THDA Debt Management Policy ................................................................ Ridley 7. Issue 2016-1 State Form CT-0253 ............................................................... Ridley 8. Adjourn ........................................................................................................... Bills

LOCATION COMMITTEE MEMBERS

State Capitol Brian Bills, Chair Conference Room G-11 Tre Hargett Nashville, Tennessee 37243 David Lillard Larry Martin Justin Wilson

TENNESSEE HOUSING DEVELOPMENT AGENCY BOND FINANCE COMMITTEE

April 13, 2016

Pursuant to the call of the Chairman, the Bond Finance Committee of the Tennessee Housing Development Agency Board of Directors met on Wednesday, April 13, 2016, at 4:30 P.M. in Conference Room G-11, State Capitol, Nashville, Tennessee. The following members were present: Keith Boring for Secretary of State Tre Hargett, Treasurer David Lillard, and Greg Turner for Commissioner of Finance & Administration Larry Martin. Brian Bills (Chairman) and Comptroller Justin Wilson (Secretary) participated by conference call.

At the request of Chairman Bills, Mr. Lillard chaired the meeting. Recognizing a physical quorum present, Mr. Lillard called the meeting to order and asked for approval of the minutes of the January 25, 2016, meeting. Mr. Turner moved that the minutes be approved. Mr. Lillard seconded the motion and called for a roll call vote:

Chairman Bills: Yes Mr. Boring for Secretary Hargett: Yes Treasurer Lillard: Yes Mr. Turner for Commissioner Martin: Yes Comptroller Wilson: Yes

The motion passed unanimously.

Mr. Lillard indicated the next item for consideration was the sale of Issue 2016-1 Bonds. He recognized Lynn Miller, THDA Chief Legal Counsel, who presented the following documents for the Committee’s consideration:

Memo from CSG Advisors Incorporated (“CSG”), financial advisor for THDA, dated April 13, 2016, recommending that the described pricing for Issue 2016-1 be accepted.

Resolution of the Bond Finance Committee approving the issuance and sale of Issue 2016-1A (AMT) in the aggregate principal amount of $24,060,000 and Issue 2016-1B (Non-AMT) in the aggregate principal amount of $100,940,000 (the “Award Resolution”). The following documents were attached to the Award Resolution as exhibits and were incorporated by reference:

o Bond Purchase Agreement for the sale of Issue 2016-1 Bonds to the underwriting syndicate, led by RBC Capital Markets, LLC (“RBC”), the bookrunning senior manager;

o Supplemental Resolution for the Issue 2016-1 Bonds; and

o Bond Maturity Schedule showing the maturities and interest rates for the Issue 2016-1 Bonds.

Ms. Miller noted that THDA offered bonds in the amount of $125 million. Retail orders totaled approximately $46 million. The longer maturities, including both PAC bonds, were oversubscribed which allowed for interest rate reductions on the longest maturities and resulted in the creation of $7.6 million in zeroes rather than the utilization of zeros to maintain the current 3.99% interest rate. Prior to the bond sale, it was initially projected that approximately $5.2 million in zeroes would be needed to maintain the 3.99% interest rate.

2

Ms. Miller called on Tim Rittenhouse and David Jones, with CSG, who participated by conference call, to provide an overview of market conditions. Mr. Rittenhouse noted the sale was led by RBC and included a refunding of Issue 2006-3. During pre-pricing discussions, RBC reported interest in certain bonds by Liberty Mutual Insurance Company which allowed serial bonds from 2028 to 2031 to replace the 2031 term bond, resulting in interest savings to THDA. In addition, RBC received an initial indication from AIG that they would purchase all of the 2036 term bonds, totaling approximately $25 million. Retail orders were stronger than CSG had seen with many other housing finance agencies this year and the strength of the order flow allowed reductions of maturities in both of the PAC bonds as well as a number of other serial maturities. CSG stated that it was a very successful sale and recommended approval of the sale. Ms. Miller noted that during the pricing, RBC indicated that the THDA bonds were pricing as well, if not better, than AAA-rated bonds and mortgage-backed security structures with PACs. Mr. Rittenhouse and Mr. Jones concurred.

Ms. Miller indicated the action of the Committee was to approve the Award Resolution. She noted that an amendment was needed to add the Treasurer to paragraph 4 of the Award Resolution so that he would be authorized to execute the Bond Purchase Agreement.

Mr. Turner moved approval of the Award Resolution and Mr. Wilson seconded. Mr. Lillard asked for a motion to adopt the recommended amendment to paragraph 4 of the Award Resolution. Mr. Turner moved to adopt the amendment to the Award Resolution and Mr. Wilson seconded.

Mr. Lillard called for a roll call vote for adoption of the amendment:



Mr. Lillard called for a roll call vote to approve the Award Resolution as amended:



There being no further business, Mr. Lillard adjourned the meeting without objection.

Respectfully submitted, Assistant Secretary

Approved this ___ day of May, 2016.

Tennessee Housing Development AgencyAndrew Jackson Building, Third Floor

502 Deaderick Street, Nashville, TN 37243

Bill HaslamGovernor

Ralph M. PerreyExecutive Director

MEMORANDUM

DATE: May 11,2016


FROM: Lynn E. Miller Urltt\Chief Legal Counsel

SUBJECT: Schedule of Financing for Fiscal Year 2016-2017

The attached Schedule of Financing is required by Tennessee Code Annotated Section l3-23-120(e)(1).The statutory language directs THDA to submit a Schedule of Financing to the State Funding Boardshowing the financings THDA proposes during the fiscal year. While the preparation of a Schedule ofFinancing is required, THDA is not required to carry out its financings precisely as shown on the attachedSchedule. The attached Schedule is THDA's best estimate with respect to the financings for the upcomingfiscal year.

Both the Bond Finance Committee and the Board will be asked to review and approve this Schedule ofFinancing. Assuming such approval occurs, the Schedule will be forwarded to the State Funding Board fortheir consideration.

LEM/ds

Attachment


TENNESSEE HOUSING DEVELOPMENT AGENCY

SCHEDULE OF FINANCING FISCAL YEAR 2016-2017

SUMMARY The Tennessee Housing Development Agency (“THDA”) is required, under Tennessee Code Annotated Section 13-23-120(e)(1), to submit a schedule to the State Funding Board showing financings proposed for the fiscal year. The proposed schedule for fiscal year 2016-2017 is attached.

Total amount of bonds or notes reflected on Schedule of Financing for Fiscal Year 2016-2017: $ 458,000,000

Total amount of bonds reflected on schedule, designed to produce proceeds for mortgage loans: $ 330,000,000

Total amount of bonds or notes reflected on schedule related to refunding (not expected to produce proceeds for mortgage loans this fiscal year): $ 128,000,000

2


SCHEDULE OF FINANCING FISCAL YEAR 2016-2017

ISSUE 2016-2 - RESIDENTIAL FINANCE PROGRAM BONDS –NEW VOLUME CAP August 2016

Sources of Funds

Proceeds of the Issue $ 125,000,000

Uses of Funds

To Purchase Mortgage Loans or Refund Outstanding Bonds $ 125,000,000

Bond Reserve Funds ) Underwriting Fee/Bond Discount ) $ THDA contribution, or no more than 1% of Capitalized Interest ) bond proceeds, or a combination thereof Cost of Issuance )

ISSUE 2016-3 - RESIDENTIAL FINANCE PROGRAM BONDS – REFUNDING/NEW VOLUME CAP November 2016

Sources of Funds


Uses of Funds



3

ISSUE 2017-1 - RESIDENTIAL FINANCE BONDS – REFUNDING/NEW VOLUME CAP March 2017

Sources of Funds


Uses of Funds



Single Family Bonds Sold in FY 2015-2016

$ 175,000,000 Issue 2015-2 Residential Finance Program Bonds, dated October 15, 2015

$ 125,000,000 Issue 2016-1 Residential Finance Program Bonds, dated May 18, 2016

TOTAL $ 300,000,000 (includes approximately $67,130,000 in refundings)

Multifamily Bonds Sold in FY 2015-2016 $ 0 Volume Cap Used by Local Issuers For Multi-Family Housing in 2015 $ 118,093,000 From THDA’s 2015 Volume Cap Allocation Volume Cap Available to Local Issuers For Multi-Family Housing in 2016 $ 150,000,000 From THDA’s 2016 Volume Cap Allocation

4

ASSUMPTIONS

1. A bond issue may include any structure authorized by the Board and approved by the Bond Finance Committee, including, without limitation, convertible option bonds, short term notes, variable rate debt, taxable debt, planned amortization class bonds.

2. Dates of bond issues are based on estimated absorption of available funds and expected need for additional funds for three to four months, subject to the actual rate at which mortgage loans are currently being financed.

3. THDA anticipates taking the maximum spread allowed under federal law for each bond issue, which is 112 basis points. The maximum spread could, however, be reduced based on program requirements at the time of sale. Interest rates for THDA loans could be further subsidized.

4. THDA anticipates future bonds will be issued under the 2013 General Resolution to continue to reduce the moral obligation of the state for THDA bonds.

5. The volume cap assumption is that 35% of the annual total tax-exempt bond authority amount available in Tennessee is made available to THDA at the beginning of each calendar year. This is the allocation to THDA for all tax-exempt housing bond issuance in the state in the current Department of Economic and Community Development plan. For bond issues in calendar year 2016, volume cap carried forward from 2013 will be used. THDA currently has $593,169,126 in 2013 carried forward volume cap available. For bond issues in calendar year 2017, volume cap THDA carried forward from 2014 will be used. THDA currently has $624,523,000 in 2014 carried forward volume cap available. Unused 2013 volume cap will be made available for the THDA Mortgage Credit Certificate Program by making the required elections on or before December 31, 2016.

6. A THDA contribution may be made with each bond issue as needed to over-collateralize the bond issue for the benefit of THDA borrowers, to fund required reserves, to pay cost of issuance and to ensure that the maximum amount of bond proceeds is used to fund mortgage loans. The amount and source of the THDA contribution is determined at the time it is needed. The amount of the contribution, if needed, is based on the structure of the bond issues, an analysis of debt service requirements of the general resolution under which the bonds are issued, the fee paid to underwriters and an estimate of other costs of issuance expected to be incurred. The source of such THDA contribution is funds available for such purpose under the 2013 General Resolution, 1985 General Resolution or the 2009 General Resolution.



Bill HaslamGovernor


MBMORANDUM

DATE: May 17,2016

TO: Bond Finance Committee

FROM: Lynn Miller lrø}{Chief Legal Counsel

SUBJECT: Authorization of General Residential Finance Program Bonds,Issue 2016-2

Attached please find the following documents in connection with the requested authorization of the nextTHDA bond issue,Issue 2016-2:

1. Memo from CSG Advisors recommending authorization in the maximum principal amount of$125 million for a bond issue under the General Residential Finance Program Bond Resolutionadopted in 2013, including authorization of a new money component, and mortgage backedsecurities. Staff expects this bond issue to be priced in early to mid- August, with closing in mid-September 2016, depending on THDA loan production. The final size and structure will be

determined by the Bond Finance Committee closer to pricing.

2. Due to the expected timing ofthis bond issue, a refunding corîponent is not expected to be included.In lieu of a refunding component, staff expects to use resources from the I 985 General Resolutionto overcollateralize this bond issue to reduce bond yield, reduce the amount of "zero's" needed tomaintain an acceptable interest rate, and to improve the PADR of the 2013 General Resolution.

3. THDA PIan of Financing forlssue 2016-2 Residential Finance Program Bonds, which the BondFinance Committee will be asked to approve.

4. Resolution of the Board of Directors of the Tennessee Housing Development Agency Authorizingthe Issuance and Sale of Residential Finance Program Bonds, Issue 2016-2, which includes theform of Series Resolution for Issue 2016-2 and which authorizes tlre referenced bond issue anddelegates authority to the Bond Finance Committee to determine all final terms and conditions. TheBond Finance Committee will be asked to recommend this resolution and the transaction to theTHDA Board of Directors.

5. Resolution of the Board of Directors of the Tennessee Housing Development Agency AuthorizingReimbursement of THDA from Proceeds of Issue 2016-2 in an amount not to exceed $60 million.

www.THDA.ors - (615) 816-1200 - Toll Free: 800-228-THDA

Bond Finance CommitteeMay 11,2016Page2

COMPLIANCE WITH THDA DEBT MANAGEMENT POLICY

Issue 2016-2 complies with the Tennessee Housing Development Agency Debt Management Policyadopted on November 28,2011, as amended (the "Debt Management Policy"). In particular, Issue 2016-2complies with the Debt Management Policy as follows:

Part III - by allowing THDA "...to maintain a steadily available supply of funds to finance itsmortgage loan programs at cost levels that provide competitive, fixed interest rate mortgage loansthat benefit low and moderate income families, while maintaining or improving THDA's overallfinancial strength and flexibility..."

Part VIII - the issuance ofthis debt will not cause THDA to exceed the statutory debt limit containedin TCA Section 13-23-121.

Part X - the factors and items listed to be considered in planning, structuring and executing a bondissue have been and will be considered as planning, structuring and executing this bond issue movesforward.

Part XIV - serial bonds, terms bonds and PAC bonds are being considered for the structure of thebond issue.

Part XV - authorization of a potential refunding component is expected to result in present valuesavings and will further THDA program objectives of providing competitive, fixed interest ratemortgage loans that benefìt low and moderate income families.

Parts XVIII, XIX, XX and XXI are not applicable as authorization requested for Issue 2016-2 doesnot include interest rate and forward purchase agreements, conduit debt, or variable rate debt.

BOOKRUNNING SENIOR MANAGER ROTATION

Citigroup Global Markets Inc. is next in the rotation to serve as bookrunning senior manager for this bondissue.

ROTATING CO-MANAGER

CSG Advisors has advised that J.J.B. Hilliard Lyons, V/.L. Lyons,LLC, from the selling group, made thebest contribution in terms of quantity and quality of Tennessee retail orders and best supported retail salesin the last THDA bond issue, therefore, they are expected to be elevated from the selling group to serve as

co-manager on this bond issues.

SELLING GROUP

The selling group members are

Avondale PartnersDuncan WilliamsHarvestonsPiper JaffrayRobert W. BairdWiley Bros.

LEMids

2 CRAMPTON ROAD, BRONXVILLE, NY 10708 | (914) 961-0003 | [email protected] AND

1725 WINDWARD CONCOURSE, STE 425, ALPHARETTA, GA 30005 | (678) 319-1911 | [email protected]

Atlanta • Los Angeles • New Jersey • New York • San Francisco

MEMORANDUM

TO: THDA Board of Directors and THDA Bond Finance Committee FROM: Tim Rittenhouse, David Jones, Mark Kaveny & Eric Olson SUBJECT: Bond Issue Authorization Recommendation RE: Residential Finance Program Bonds, Issue 2016-2 DATE: May 9, 2016

Current Market Conditions Since THDA’s last bond sale on April 13, 2016, interest rates have edged higher with the 10-year U.S. Treasury bond ranging between 1.76% and 1.94% and settling at 1.78%, as of the Friday, May 6 market closing. High-quality tax-exempt Municipal Market Data Index (“MMD”) yields have risen slightly over the same period year, with the 10-year yield rising from 1.60% to 1.66% and the 30-yield climbing from 2.54% to 2.63%. The gradual strengthening of the US economy, the Federal Reserve’s patience in delaying further increases in its overnight borrowing rate (following its 0.25% mid-December rise) to accommodate greater weakness and instability in the Chinese economy and more aggressive actions by central banks in Europe and Japan – all have been key drivers of bond market rates during this period.

Executive Summary

CSG recommends that the THDA Board of Directors and THDA Bond Finance Committee authorize a $125 million Issue 2016-2 under the Residential Housing Finance Program Bond General Resolution to fund THDA’s mortgage loan pipeline.

Staff expects to begin meeting continuing mortgage commitments with available THDA cash

in late June or early July.

Preliminarily, Issue 2016-2 is expected to be sold in early to mid-August for a closing in September.

Issue 2016-2 is not expected to include a refunding component, due to current refunding rules,

but the benefits of the issue may be increased from the transfer of an amount of unencumbered seasoned THDA mortgages or other resources from THDA’s 1985 General Resolution. Alternative structures will be analyzed and presented closer to pricing.

THDA RFPB Issues 2016-2 Bond Issue Authorization Recommendation CSG Advisors Incorporated May 9, 2016

2

Background On April 13, 2016, THDA priced Residential Finance Program Bonds, Issue 2016-1 in the amount of $125,000,000. Of this amount $24,060,000 refunded prior Homeownership Program Bonds and the balance will be used to purchase new mortgage loans and pay other required amounts. THDA expects to commit all remaining Issue 2016-1 proceeds before the end of June 2016. When the Issue 2016-1 proceeds are exhausted, THDA will begin to purchase mortgage loans using available THDA funds, expecting that such advances will be reimbursed with proceeds of Issue 2016-2. By the end of August THDA anticipates building a pipeline of up to $73 million of mortgage loans, committing $30 to $40 million per month in new mortgage loans. Staff expects THDA has sufficient available funds on hand to continue purchasing mortgage loans through mid-September, when additional bond funds likely will be needed. Prior THDA bonds will not become optionally redeemable until January 1, 2017, when THDA may again have the opportunity to refund bonds attractively under a common plan of finance with a “new money” portion of a transaction, market conditions permitting. Including a refunding with new money bonds at that time may allow THDA to offer lower mortgage rates, preserve zero participation loans, and maximize THDA’s allowable spread. In the absence of an attractive refunding opportunity as part of Issue 2016-2, transferring unencumbered seasoned THDA mortgage collateral or other resources into the General Residential Finance Program Bond Resolution from the 1985 General Resolution is a structuring alternative that THDA may consider to lower bond interest costs and limit the need for zero participation loans, when final structuring decisions are made closer to pricing. Proposed Sizing and Structure for Issue 2016-2 Authorizing a bond issue of not to exceed $125 million would allow THDA to continue purchasing mortgage loans through mid-September 2016, relying on current forecasts and subject to changing loan demand.

Based on current market conditions and investor appetite, structuring Issue 2016-2 to include planned amortization class bonds (“PACs”) to be sold at a premium would significantly lower the issue’s bond yield. PACs are often priced at a premium and most commonly designed with an expected five-year average life, assuming future prepayment speeds over a broad range. Prepayments up to 100% PSA would be directed first to redeeming the PACs until they are completely retired. Due to the projected short and stable average life and the high coupon on the PACs, institutional investors accept much lower yields than for conventional term bonds with the same maturity.

A possible concern with the use of PACs is that actual prepayments could occur at a sustained rate below 100% PSA, causing the PACs to remain outstanding longer than projected and potentially extending the period during which THDA would pay the high coupon on these bonds. However, THDA’s average historical prepayment speed is greater than 150% PSA. Also, if the actual sustained prepayment speed is less than 100% PSA, at its option THDA could choose to redeem the PACs up to the 100% PSA experience with other available funds in order to maintain the short average life of the PACs.

Three alternative bond structures are shown in Exhibit A, each for $125 million in “new money” bonds. In each case, after calculating an estimated bond yield, the spread for tax compliance purposes between the mortgage yield and the bond yield was determined. Then, the amount of zero participation loans


3

needed to bring the issue up to the maximum allowable tax spread of 1.125% was computed, based on current bond interest rates and THDA’s current mortgage rates.

Scenario 1 looks at a level-debt issue with no PAC bonds. The spread for tax purposes is 0.60%. $16.8 million in zeros would be consumed to raise the issue to a full 1.125% spread.

Scenario 2 includes a non-AMT PAC bond. The lower yield on the PACs reduces the overall bond yield by 0.293% and would result in a spread for tax purposes of 0.894%. The required amount of zeros would be $7.3 million.

Scenario 3 assumes $15 million in unencumbered, seasoned mortgages are transferred to Issue 2016-2 to over-collateralize and accelerate the repayment of the 2016-2 bonds. The structure also incorporates a non-AMT PAC. Since the added collateral allows for a shorter maturity schedule with a bigger PAC, the bond yield falls, the spread for tax purposes widens to 1.145%, and, currently, the transaction would be projected to create $0.8 million in new zeros.

Demand from institutional investors for housing bonds such as premium PACs has improved greatly in the years since the 2008 housing crisis. As the financing is developed, production needs are refined, and the proposed pricing date approaches, CSG will continue to evaluate the benefits of including PACs and other premium or discount bonds, or super-sinker bonds to evaluate if further refinement of the structure could offer an improvement in the pricing of Issue 2016-2. Issuing the bonds under the 2013 General Resolution will avoid the state moral obligation pledge on the Issue 2016-2 bonds.

Method of Sale

In the current market for housing bonds THDA will continue to benefit from offering its bonds via negotiated sale, rather than by competitive bid. Factors favoring a negotiated sale include:

Retail Sales / In-State Selling Group – THDA has enjoyed strong demand for its bonds among Tennessee retail investors with retail buyers often helping to set prices for institutions. Underwriting syndicate members with strong in-state marketing and distribution networks for bonds to retail investors have been an important component of support for THDA’s issues. Bonds not subject to the AMT have been and are expected to continue to appeal to retail investors. The presence of selling group members, who only earn a fee on bonds they sell, helps assure that competitive forces work in THDA’s interest during a negotiated sale. When housing bonds are sold via competitive bid, the winning bidder has little time or incentive to market bonds to retail investors or to involve smaller Tennessee-based broker-dealers. Compared to offerings with little retail participation, interest rate savings on bonds sold principally to retail investors typically range from 0.05% to 0.10%. THDA’s practice of elevating a top-performing member of the selling group to co-manager status on the next offering has reinforced retail support.

Market Volatility – A competitively bid bond issue requires that the timing and, to a significant extent, the final bond structure be established well in advance of the bid date. Continued market volatility and low housing bond volumes make it unlikely THDA could structure its bonds to obtain the lowest possible cost of debt in advance of pricing. A negotiated sale provides flexibility to price on shorter notice, to adjust the bond structure through the pricing in response to market factors and investor indications, or to delay or accelerate the pricing as conditions warrant.

Complexity and Credit – While investors are familiar with bonds issued by housing finance agencies, because the housing sector played a major role in the financial crisis, some investors have remained concerned about transactions financing whole loans and wary of making credit decisions solely based on


4

ratings. A negotiated sale provides greater opportunity to communicate with investors about the more complex structure and the credit features of THDA’s bonds.

Bond Structure – Though Issue 2016-2 is expected to be relatively straightforward for a traditional housing bond, it may be desirable to make changes to the structure close to the time of the bond sale in order to cater to the interests of certain investors, such as those interested in the PACs or in bonds priced at a premium or discount. A negotiated sale facilitates greater flexibility to make structural changes, as reflected in THDA’s offerings in the last year in which one institution’s willingness to buy long-dated serial bonds allowed THDA to realize savings versus the higher cost of an intermediate term bond.

Pricing Oversight – THDA’s policies and practices for negotiated bond sales – including the review of co-manager price views, consensus scales, comparable pricings, historic and current spreads, other current market data, and concurrent monitoring by the Office of State and Local Finance and CSG – provide THDA with the basis for confirming that its bonds are priced fairly at time of sale. In advance of the offering CSG also provides a pre-pricing memo with information related to general bond market conditions, the housing bond market, and projected interest rate levels based on recent housing bond issues, previous THDA offerings, pending statistical releases, and candid independent discussions with uninvolved third-party underwriting desks. In order to manage incentives for the syndicate members and investors, CSG also advises on syndicate rules and procedures, proposed holdbacks of specific maturities, and allotments of bonds.

Recommendations

CSG Advisors recommends that the THDA Board of Directors and THDA Bond Finance Committee:

Authorize the issuance and sale of Residential Finance Program Bonds, Issue 2016-2 with a par amount not to exceed $125 million;

Delegate to the Bond Finance Committee the authority to: o Establish the principal amount of Issue 2016-2, with the aggregate size of Issue 2016-

2 not to exceed $125 million; o Establish the structure, sub-series and pricing schedule of Issue 2016-2; o Approve long and shorter maturity bonds in any combination of fixed rate bonds not

to exceed a maturity of 32 years; and o Approve the transfer of up to $20 million of unencumbered seasoned THDA

mortgages or other resources from THDA’s 1985 General Resolution to over-collateralize Issue 2016-2.

Based on current market conditions and for the reasons described above, authorize Issue 2016-2 via a negotiated sale.

Exhibit A

Preliminary Structuring Analysis

Interest Rates as of April 29, 2016

Scenario 1 Scenario 2 Scenario 3

Structuring Scenario

All New Money / No PAC

All New Money / With PAC


Including PAC Bonds No Yes Yes

Including $15,000,000 Over-Collateralization No No Yes

Issue Amounts

New Money Non-AMT 125,000,000 125,000,000 125,000,000 TOTAL 125,000,000 125,000,000 125,000,000

Bond Structure Coupon / YieldSerials 2017-2031 Non-AMT 0.65 - 3.00 % 48,715,000 46,975,000 63,130,000 Term 2036 Non-AMT 3.350 % 21,320,000 11,590,000 13,160,000 Term 2041 Non-AMT 3.550 % 25,135,000 13,900,000 12,635,000 Term 2046 Non-AMT 3.600 % 29,830,000 17,135,000 - Term PAC Non-AMT 3.50 / 1.85 % - 35,400,000 36,075,000

125,000,000 125,000,000 125,000,000

Yields

Mortgage Yield (1) 3.806 % 3.805 % 3.805 %Bond Yield 3.205 % 2.912 % 2.660 %

Yield Spread 0.600 0.894 1.145

Zero Percent Loans (Needed) / Created (16,800,000) (7,300,000) 800,000

Yield Spread After Zero Participations 1.125 % 1.125 % 1.125 %

(1) Based on Great Choice Loans @ 3.99% & Brave Choice Loans @ 3.49% with 2nd lien downpayment / closing cost assistance loans.

Exhibit A - Supplement

Preliminary Structuring Analysis

Interest Rates as of April 29, 2016

Note: All references to mortgage rates refer to the mortgage rate on Great Choice loans

Scenario 1 Scenario 2 Scenario 3

Structuring Scenario

All New Money / No PAC



Including PAC Bonds No Yes Yes

Including $15,000,000 Over-Collateralization No No Yes

Bond Yields 3.205 % 2.912 % 2.660 %

Mortgage Rates and Zero Percent Loans Needed

A Mortgage Rate on New Money Mortgages 3.990 % 3.990 % 3.990 %

Mortgage Yield (1) 3.806 % 3.833 % 3.805 %Yield Spread 0.600 0.922 1.145

Zero Percent Loans (Needed) / Created for Full Spread (16,800,000) (7,300,000) 800,000

B 4.240 % 4.100 % 3.980 %

Mortgage Yield 4.330 % 4.037 % 3.785 %Yield Spread 1.125 1.125 1.125

Zero Percent Loans (Needed) / Created for Full Spread (8,400,000) (3,650,000) 400,000

C 4.520 % 4.220 % 3.960 %

Mortgage Yield 4.330 % 4.037 % 3.785 %Yield Spread 1.125 1.125 1.125

Zero Percent Loans (Needed) / Created for Full Spread - - -

Mortgage Rate on New Money Mortgages to Reduce Zeros by 50%

Mortgage Rate on New Money Mortgages to Reduce Zeros by 100%

TENNESSEE HOUSING DEVELOPMENT AGENCY PLAN OF FINANCING

RESIDENTIAL FINANCE PROGRAM BONDS, ISSUE 2016-2 May 23, 2016

Pursuant to TCA Section 13-23-120(e)(4):

AMOUNT: The bonds may be sold in one or more series to be known as Residential Finance Program Bonds, Issue 2016-2 (the “Bonds”), to be issued under the General Residential Finance Program Bond Resolution adopted by THDA on January 29, 2013, as amended (the “General Resolution”).

The aggregate principal amount of the Bonds shall not exceed $125,000,000. The actual aggregate principal amount shall be determined by the Bond Finance Committee of the THDA Board of Directors (the “Bond Finance Committee”) upon the recommendation of the Financial Advisor, Executive Director, Assistant Secretary of the Bond Finance Committee and approved by THDA’s Bond Counsel and may take into account the following limitations and other factors:

(1) the amount of Bonds which may be issued pursuant to the Act and the total amount of bonds outstanding under the General Resolution; and

(2) the amount of Bonds which may be issued to refund bonds or notes outstanding under the General Resolution, the General Homeownership Program Bond Resolution (the “1985 Resolution”); or under the General Housing Finance Resolution (the “2009 Resolution”) to provide economic savings, additional opportunities for interest rate subsidies with respect to THDA Program Loans or as a result of prepayments, proceeds on hand, excess revenues, or maturing principal; and

(3) the amount of Bonds which may be issued, the proceeds of which are necessary to reimburse THDA for Program Loans or mortgage-backed securities guaranteed by Fannie Mae and backed by privately insured conventional loans made to eligible borrowers (“MBS”) financed from available THDA funds prior to the availability of proceeds from the Bonds; and

(4) the amount of Bonds which may be issued, the proceeds of which are necessary to meet demand for Program Loans;

(5) the availability of THDA’s funds, subject to the review of the Bond Finance Committee, for the purpose of providing for the payment of the costs of issuance of the Bonds, paying capitalized interest with respect to the Bonds, funding the Bond Reserve Fund, providing additional security for the Bonds, and achieving a lower rate of interest on the Program Loans; and

(6) the amount of resources (loans and cash) available under the 1985 General Resolution to overcollateralize the Bonds to improve yield, reduce the amount of other subsidies and to increase the program asset debt ratio under the General Resolution.

APPLICATION OF PROCEEDS:

Proceeds of the Bonds will be applied to (i) redemption and payment at maturity of certain of THDA’s bonds or notes outstanding under the 1985 Resolution, and/or the 2009 Resolution; (ii) finance Program Loans either by the direct purchase thereof or the purchase of MBS; and (iii) other uses as specified below in approximately the following amounts:

90% for single-family first lien mortgage loans, refinancing outstanding bonds, and/or purchasing MBS;

8% for bond reserve; 1% for capitalized interest; and 1% for cost of issuance and underwriter’s

discount/fee.

DATE, METHOD AND TERMS OF SALE:

The sale of the Bonds will take place by competitive or negotiated sale, including private placement, and will occur no later than December 31, 2016. THDA will prepare for the sale with the aid of its financial advisor, CSG Advisors, and its bond counsel, Kutak Rock.

MATURITIES: The Bonds may be any combination of tax-exempt and/or taxable long and/or short term serial, term, and/or discounted or premium bonds as may be determined by the Bond Finance Committee. The Bonds shall have a maturity not to exceed 34 years from the date of original issuance.

BOND INTEREST RATES: The interest rates on the Bonds shall be fixed long term rates and shall not result in a net interest cost in excess of 9% per annum.

REDEMPTION TERMS: The Bonds may be subject to redemption prior to maturity on such terms as are to be determined by the Bond Finance Committee.

LOAN INTEREST RATES AND COST OF ADMINISTRATION:

Unless otherwise permitted under the Internal Revenue Code, the blended effective interest rate on Program Loans financed with proceeds of tax-exempt Bonds (including any transferred loans upon the refunding of any outstanding bonds) will not exceed 112.5 basis points over the yield on such tax-exempt bonds, as calculated in accordance with the Internal Revenue Code, from which all of THDA’s costs of administration for the Bonds may be paid.

RESOLUTION OF THE BOARD OF DIRECTORS OF THE TENNESSEE HOUSING DEVELOPMENT AGENCY

AUTHORIZING THE ISSUANCE AND SALE OF RESIDENTIAL FINANCE PROGRAM BONDS, ISSUE 2016-2

May 24, 2016

WHEREAS, pursuant to the Tennessee Housing Development Agency Act (the “Act”), the Bond Finance Committee of the THDA Board of Directors (the “Committee”), on May 23, 2016, approved a plan of financing for Residential Finance Program Bonds, Issue 2016-2 (the “Bonds”) in an aggregate amount not to exceed $125,000,000 (the “Plan of Financing”); and

WHEREAS, the Plan of Financing provides for the Bonds to be issued as additional series of long term and/or short term tax-exempt and/or taxable bonds, with fixed interest rates, under the General Residential Finance Program Bond Resolution adopted by THDA on January 29, 2013, as amended (the “General Resolution”) and to be sold by competitive or negotiated sale, all at the election of the Committee; and

WHEREAS, THDA on January 26, 2016, adopted a Housing Cost Index, as defined in Section 13-23-103(7) of the Act, which shows that, as of January 13, 2016, primary housing costs exceed 25% of an average Tennessee household’s gross monthly income; and

WHEREAS, pursuant to Section 147 of the Internal Revenue Code of 1986, as amended (the “Code”), THDA must conduct a public hearing regarding the issuance of the Bonds and submit the results of the public hearing to the Governor of the State of Tennessee for approval; and

WHEREAS, THDA proposes to distribute a preliminary official statement (the “Preliminary Official Statement”) to prospective purchasers and to make available to the respective purchasers a final official statement (the “Official Statement”) with respect to the Bonds; and

WHEREAS, the Board wishes to authorize the Committee to proceed with the issuance and sale of the Bonds to provide funds for THDA’s programs in accordance with the Plan of Financing and this Resolution.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE TENNESSEE HOUSING DEVELOPMENT AGENCY AS FOLLOWS:

1. The issuance and sale of the Bonds, in an aggregate amount not to exceed $125,000,000, with the final terms, all as determined by the Committee, upon the recommendation of THDA’s Financial Advisor, the Executive Director and the Secretary of the Committee, with the approval of THDA’s Bond Counsel, is hereby authorized.

2. The resolution titled “A Resolution Authorizing the Sale of Residential Finance Program Bonds, $__________ Issue 2016-2A (AMT), $__________ Issue 2016-2B (Non-AMT), and $__________ Issue 2016-2C (Non-AMT)” (the “Supplemental Resolution”), in the form attached hereto, is adopted, subject to the provisions contained herein.

3. In addition to the direct purchase of individual mortgage loans made to eligible borrowers, the use of Bond proceeds to purchase mortgage backed securities guaranteed by Fannie Mae and backed by privately insured conventional loans made to eligible borrowers (“MBS”) to be held as purpose investments in the General Resolution is hereby authorized.

4. THDA is authorized and directed to conduct a public hearing prior to the issuance of the Bonds, to the extent required by the Code, with reasonable public notice and to submit the results of the public hearing to the Governor to obtain the Governor’s written approval.

5. The Committee is authorized to (a) select the manner of sale; (b) designate multiple series or sub-series, as needed; (c) designate AMT, non-AMT or taxable components; (d) designate fixed interest rates; (e) approve a final structure for the Bonds; (f) approve a final principal amount or amounts, not to exceed an

2

aggregate amount of $125,000,000; (g) authorize bond insurance, if determined necessary; (h) determine an amount to be made available to purchase MBS backed by privately insured conventional loans to eligible borrowers satisfactory to THDA; (i) determine all other final terms of the Bonds, in accordance with this Resolution, the Plan of Financing and the Supplemental Resolution; (j) approve the final version of the Supplemental Resolution, with such additional changes, substitutions, deletions, additions, completions or amendments therein as determined by the Committee, upon the recommendation of the Executive Director or Secretary of the Committee, with the approval of Chief Legal Counsel of THDA and Bond Counsel, as the Committee shall determine to be necessary or appropriate to establish the final terms of the Bonds and their manner of sale; and (k) award the Bonds in accordance therewith. At the discretion of the Committee, the Bonds may include new volume cap and any combination of amounts needed to refund all or any part of bonds or notes outstanding under the General Resolution, under the General Homeownership Program Bond Resolution or under the General Housing Finance Resolution, including, without limitation, to produce proceeds for new mortgage loans or to produce economic savings or opportunities for interest rate subsidies. In addition, the Committee, at its discretion may elect to transfer resources from the General Homeownership Program Bond Resolution and/or the General Housing Finance Resolution to the General Resolution in connection with the issuance of the Bonds upon recommendation of the Executive Director or Secretary of the Committee with the approval of Bond Counsel, Financial Advisor and Chief Legal Counsel.

6. The Assistant Secretary of the Committee, with the assistance of Bond Counsel, the Financial Advisor, and the Executive Director and Chief Legal Counsel of THDA, is authorized to prepare a Preliminary Official Statement and a final Official Statement for printing and distribution in connection with the issuance and sale of the Bonds.

7. The Assistant Secretary of the Committee, with the assistance of Bond Counsel and the Executive Director and Chief Legal Counsel of THDA, is authorized to prepare all documents determined to be necessary or appropriate for the competitive sale of all or any portion of the Bonds or all documents, including, without limitation, a purchase agreement in a form appropriate for a negotiated sale, including a private placement, of all or any portion of the Bonds, as determined to be necessary or appropriate, for a negotiated sale of all or any portion of the Bonds.

8. The Secretary of the Committee, or the Chairman, the Vice Chairman, or the Executive Director of THDA is hereby authorized to execute (i) the proposal submitted by the lowest bidder or bidders in the event of a competitive sale of all or any portion of the Bonds or (ii) a purchase agreement in the event of a negotiated sale, including a private placement, of all or any portion of the Bonds, the form of which has been approved by the Committee, upon the recommendation of the Financial Advisor and Bond Counsel, and (iii) to deliver the Bonds as appropriate.

9. The Assistant Secretary of the Committee is hereby authorized to do and perform all acts and things provided to be done or performed by the Secretary of the Committee herein, in the General Resolution and in the Supplemental Resolution.

10. The Secretary of the Committee, and the Chairman, the Vice-Chairman, the Executive Director, the Director of Finance and the Chief Legal Counsel of THDA and other appropriate officers and employees of THDA are hereby authorized to do and perform or cause to be done and performed, for or on behalf of THDA, all acts and things (including, without limitation, execution and delivery of documents) that constitute conditions precedent to the issuance and sale of the Bonds or that are otherwise required to be done and performed by or on behalf of THDA prior to or simultaneously with the issuance and sale of the Bonds.

11. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Supplemental Resolution, as the context indicates.

12. This resolution shall take effect immediately.

This Resolution was adopted by the affirmative vote of no fewer than eight (8) members of the THDA Board of Directors at its meeting on May 24, 2016.

4826-8840-3249.1


A Supplemental Resolution

Authorizing the Sale of

Residential Finance Program Bonds

$__________ Issue 2016-2A (AMT)

$__________ Issue 2016-2B (Non-AMT)

$__________ Issue 2016-2C (Non-AMT)

Adopted May 24, 2016 as amended and supplemented

by the Bond Finance Committee of THDA on __________ __, 2016

i 4826-8840-3249.1

ARTICLE I DEFINITIONS AND AUTHORITY

Section 1.01. Short Title ........................................................................................................ 1 Section 1.02. Definitions........................................................................................................ 1 Section 1.03. Authority for this Resolution ........................................................................... 4

ARTICLE II TERMS AND ISSUANCE

Section 2.01. Issue Amount and Designation ........................................................................ 4 Section 2.02. Purposes ........................................................................................................... 4 Section 2.03. Amounts, Maturities and Interest Rates ........................................................... 5 Section 2.04. Denominations, Numbers and Letters.............................................................. 7 Section 2.05. Paying Agent .................................................................................................... 7 Section 2.06. Execution of Bonds .......................................................................................... 7 Section 2.07. Place of Payment; Record Date ....................................................................... 8 Section 2.08. Sinking Fund Redemption Provisions ............................................................. 8 Section 2.09. Optional Redemption ....................................................................................... 9 Section 2.10. Special Optional Redemption ........................................................................ 10 Section 2.11. Special Mandatory Redemptions ................................................................... 11 Section 2.12. Selection by Lot ............................................................................................. 13 Section 2.13. Purchase of Bonds by THDA or Trustee ....................................................... 13

ARTICLE III SALE AND DELIVERY

Section 3.01. Sale ................................................................................................................. 13

ARTICLE IV DISPOSITION OF PROCEEDS AND OTHER MONEYS

Section 4.01. Loan Fund; Bond Reserve Fund Requirement............................................... 13 Section 4.02. Proceeds of Issue 2016-2A Bonds and Issue 2016-2B Bonds ....................... 14 Section 4.03. Program Loan Determinations ....................................................................... 15

ARTICLE V FORM OF BONDS, AND TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Section 5.01. Form of Bonds ............................................................................................... 15 Section 5.02. Form of Trustee’s and Authenticating Agent’s Certificate of

Authentication ................................................................................................ 16

ii 4826-8840-3249.1

ARTICLE VI MISCELLANEOUS

Section 6.01. No Recourse Against Members or Other Persons ......................................... 16 Section 6.02. Bonds not Debt, Liability or Obligation of the State or the United

States of America ........................................................................................... 16 Section 6.03. Delivery of Projected Cash Flow Statements ................................................ 16 Section 6.04. Authorized Officers ....................................................................................... 16 Section 6.05. Authorized Trustee......................................................................................... 17 Section 6.06. Covenant to Comply with Federal Tax Law Requirements........................... 17 Section 6.07. Continuing Disclosure Undertaking .............................................................. 17 Section 6.08. Confirmation and Adjustment of Terms by Committee ................................ 20 Section 6.09. Effective Date ................................................................................................ 20

EXHIBIT A BOND PURCHASE AGREEMENT EXHIBIT B [PLANNED AMORTIZATION AMOUNTS FOR ISSUE 2016-2A PAC

BONDS, ISSUE 2016-2C PAC BONDS AND 400% PSA PREPAYMENT AMOUNT TABLE]

EXHIBIT C FORM OF BONDS

1 4826-8840-3249.1

A SUPPLEMENTAL RESOLUTION AUTHORIZING THE SALE OF

RESIDENTIAL FINANCE PROGRAM BONDS $__________ ISSUE 2016-2A (AMT)

$__________ ISSUE 2016-2B (Non-AMT) $__________ ISSUE 2016-2C (Non-AMT)

BE IT RESOLVED by the Board of Directors of the TENNESSEE HOUSING DEVELOPMENT AGENCY (“THDA”) as follows:

ARTICLE I

DEFINITIONS AND AUTHORITY

Section 1.01. Short Title. This resolution may hereafter be cited by THDA as the Issue 2016-2 Supplemental Residential Finance Program Bond Resolution.

Section 1.02. Definitions.

(a) All terms which are defined in Section 1.2 of the resolution of THDA adopted January 29, 2013, as amended and supplemented by the Bond Finance Committee on April 18, 2013, and entitled “General Residential Finance Program Bond Resolution” (the “General Resolution”) have the same meanings in this Resolution as such terms are given in Section 1.2 of the General Resolution.

(b) In addition, as used in this Resolution, unless the context otherwise requires, the following terms have the following respective meanings:

[“400% PSA Prepayment Amount” means the cumulative amount of principal prepayments on the Program Loans allocable to the Issue 2016-2 Bonds (including Program Securities and the Transferred Program Loans) at a rate equal to 400% PSA, as set forth in Exhibit B hereto.]

“Bond Purchase Agreement” means the contract for the purchase of the Issue 2016-2 Bonds between THDA and the Underwriters, in substantially the form attached hereto as Exhibit A.

“Business Day” shall mean any day except for a Saturday, Sunday or any day on which banks in Tennessee or New York are required or authorized to be closed.

“Co-Managers” means FTN Financial Capital Markets, J.P. Morgan Securities LLC, J.J.B. Hilliard, W.L. Lyons, LLC and Wells Fargo Bank, National Association.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

2 4826-8840-3249.1

“DTC” means The Depository Trust Company, New York, New York, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns.

“Excess 2016-2 Principal Payments” means, as of any date of computation, 100% of all regularly scheduled principal payments and prepayments on Program Loans, or portions thereof, allocable to the Issue 2016-2 Bonds (including Program Securities [and the Transferred Program Loans)] to the extent such regularly scheduled principal payments and prepayments are not required to make regularly scheduled principal payments, including Sinking Fund Payments, on the Issue 2016-2 Bonds.

“Issue 2016-2 Bonds” means, collectively, the Issue 2016-2A Bonds, the Issue 2016-2B Bonds and the Issue 2016-2C Bonds.

“Issue 2016-2A Bonds” means the Issue 2016-2A Bonds of THDA authorized by this Resolution pursuant to the Plan of Financing.

[“Issue 2016-2A PAC Bonds” means the Issue 2016-2A Bonds in the aggregate principal of $__________ maturing __________.]

[“Issue 2016-2A PAC Bonds Planned Amortization Amount” means the cumulative amount of Issue 2016-2A PAC Bonds expected to be redeemed upon the receipt of Excess 2016-2 Principal Payments at a rate equal to ___% PSA, as set forth in Exhibit B hereto.]

“Issue 2016-2B Bonds” means the Issue 2016-2B Bonds of THDA authorized by this Resolution pursuant to the Plan of Financing.

“Issue 2016-2C Bonds” means the Issue 2016-2C Bonds of THDA authorized by this Resolution pursuant to the Plan of Financing.

[“Issue 2016-2C PAC Bonds” means the Issue 2016-2C Bonds in the principal amount of $__________ maturing __________.]

[“Issue 2016-2C PAC Bonds Planned Amortization Amount” means the cumulative amount of Issue 2016-2C PAC Bonds expected to be redeemed upon the receipt of Excess 2016-2 Principal Payments at a rate equal to ___% PSA, as set forth in Exhibit B hereto.]

“Issue Date” means the date on which the Issue 2016-2 Bonds are issued by THDA and delivered to the Underwriters, expected to occur on _____ __, 2016.

“MSRB” means the Municipal Securities Rulemaking Board by operation of its Electronic Municipal Market Access System.

“Official Statement” means the Official Statement dated __________ __, 2016 used in connection with the sale of the Issue 2016-2 Bonds.

3 4826-8840-3249.1

[“PAC Bonds” means, collectively, the Issue 2016-2A PAC Bonds and the Issue 2016-2C PAC Bonds.]

“Preliminary Official Statement” means the Preliminary Official Statement dated __________ __, 2016 used in connection with the offering of the Issue 2016-2 Bonds.

“Rating Agency” shall mean Moody’s Investors Service, Inc. (or any successor thereto), and Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLP business (or any successor thereto).

[“Refunded Bonds” means, THDA’s Homeownership Program Bonds, Issue _____ and Homeownership Program Bonds, Issue _____.]

“Resolution” means this Supplemental Resolution adopted by THDA on May 24, 2016 as amended and supplemented by the Bond Finance Committee on __________ __, 2016.

“Serial Bonds” means the Issue 2016-2 Bonds which are not Term Bonds.

“Term Bonds” means, collectively, the Issue 2016-2A Bonds maturing __________, the Issue 2016-2B Bonds maturing _____ and the Issue 2016-2C Bonds maturing __________.

[“Transferred Investments” means amounts on deposit in certain funds and accounts of THDA allocated to the Refunded Bonds which are allocated to the Issue 2016-2 Bonds upon the refunding of the Refunded Bonds.]

[“Transferred Program Loans” means the Program Loans allocable to the Refunded Bonds which are allocated to the Issue 2016-2 Bonds upon the refunding of the Refunded Bonds.]

“Underwriters” means, collectively, Citigroup Global Markets Inc., Raymond James & Associates, Inc. and RBC Capital Markets, LLC, their respective successors and assigns, and the Co-Managers as purchasers of the Issue 2016-2 Bonds.

(c) Unless the context otherwise indicates, words of the masculine gender will be deemed and construed to include correlative words of feminine and neuter genders, words importing the singular number include the plural number and vice versa, and words importing persons include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons.

(d) The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any similar terms as used in this Resolution refer to this Resolution and such terms used in the form of registered bond herein refer to such bonds.

(e) [Unless the context otherwise indicates, the term “Program Loan” as used herein shall include Transferred Program Loans and Program Securities and the phrase

4 4826-8840-3249.1

“Program Loans allocable to the Issue 2016-2 Bonds” shall include the Transferred Program Loans as well as any new Program Loans and Program Securities acquired with proceeds of the Issue 2016-2 Bonds.]

Section 1.03. Authority for this Resolution. This Resolution is adopted pursuant to the provisions of the Act and the General Resolution.

ARTICLE II

TERMS AND ISSUANCE

Section 2.01. Issue Amount and Designation. In order to provide funds necessary for the Residential Finance Program in accordance with and subject to the terms, conditions and limitations established herein and in the General Resolution, Residential Finance Program Bonds, Issue 2016-2A are hereby authorized to be issued in the aggregate principal amount of $__________, Residential Finance Program Bonds, Issue 2016-2B are hereby authorized to be issued in the aggregate principal amount of $__________ and Issue 2016-2C are hereby authorized to be issued in the aggregate principal amount of $__________. In addition to the title “Residential Finance Program Bond,” the Issue 2016-2 Bonds will bear the additional designations “Issue 2016-2A (AMT), “Issue 2016-2B (Non-AMT)” and “Issue 2016-2C (Non-AMT),” as appropriate. The Issue 2016-2 Bonds shall be issued only in fully registered form. The Issue 2016-2A Bonds will consist of $__________ principal amount of Serial Bonds and $__________ principal amount of Term Bonds. The Issue 2016-2B Bonds will consist of $__________ principal amount of Serial Bonds and $__________ principal amount of Term Bonds. The Issue 2016-2C Bonds will consist of $__________ principal amount of Serial Bonds and $__________ principal amount of Term Bonds.

Section 2.02. Purposes. [The Issue 2016-2A Bonds and the Issue 2016-2B Bonds are being issued to refund the Refunded Bonds. As a result of such refunding, the Transferred Program Loans and the Transferred Investments will become allocated to the Issue 2016-2 Bonds.] The Issue 2016-2C Bonds are being issued (a) to finance Program Loans (including Program Securities), or participations therein, on single family residences located within the State, (b) if required, to pay capitalized interest on the Issue 2016-2 Bonds, (c) if required, to make a deposit in the Bond Reserve Fund, and (d) if required, to pay certain costs of issuance relating to the Issue 2016-2 Bonds.

The proceeds of the Issue 2016-2 Bonds [and the Transferred Investments] shall be applied in accordance with Article IV hereof.

Section 2.03. Amounts, Maturities and Interest Rates.

(a) The Issue 2016-2 Bonds will mature on the dates, in the principal amounts and bear interest from their Issue Date, calculated on the basis of a 360-day year of twelve 30-day months, payable semi-annually on each January 1 and July 1, commencing [January 1, 2017], at the rate set opposite such date in the following tables:

5 4826-8840-3249.1

Issue 2016-2A Bonds Serial Bonds

Maturity Date

Principal Amount

Interest Rate

Maturity Date

Principal Amount

Interest Rate

$ % $ %

Term Bonds

Maturity Date

Principal Amount

Interest Rate

$ %

Issue 2016-2B Bonds Serial Bonds

Maturity Date

Principal Amount

Interest Rate

Maturity Date

Principal Amount

Interest Rate

$ % $ %

Term Bonds

Maturity Date

Principal Amount

Interest Rate

$ %

Issue 2016-2C Bonds Serial Bonds

Maturity

Date Principal Amount

Interest Rate

Maturity Date

Principal Amount

Interest Rate

$ % $ %

6 4826-8840-3249.1

Term Bonds

Maturity Date

Principal Amount

Interest Rate

$ %

(b) Whenever the due date for payment of interest on or principal of the Issue 2016-2 Bonds or the date fixed for redemption of any Issue 2016-2 Bond shall be a day which is not a Business Day, then payment of such interest, principal or Redemption Price need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the due date for payment of principal, interest or Redemption Price and no additional interest shall be payable on such Business Day which, merely by operation of this paragraph, may have accrued after the original due date.

Section 2.04. Denominations, Numbers and Letters.

(a) The Issue 2016-2 Bonds of each series maturing in each year are to be issued in denominations of $5,000 or any integral multiple thereof not exceeding the aggregate principal amount of Issue 2016-2 Bonds of each series maturing in such year. The Issue 2016-2 Bonds are to be lettered “RA,” “RB,” or “RC,” as applicable, and numbered separately from 1 consecutively upwards.

(b) The Issue 2016-2 Bonds, when issued, will be registered in the name of Cede & Co., as nominee of DTC. Only one Issue 2016-2 Bond will be outstanding for each maturity and interest rate of each series of the Issue 2016-2 Bonds in the aggregate principal amount of such maturity, interest rate and series. Subject to the provisions of the General Resolution, purchases of ownership interests in the Issue 2016-2 Bonds will be made in book-entry form only in authorized denominations set forth in Section 2.04(a). Beneficial owners of the Issue 2016-2 Bonds will not receive certificates representing their interest in the Issue 2016-2 Bonds. So long as Cede & Co. shall be the registered owner of the Issue 2016-2 Bonds, THDA will deem and treat Cede & Co. as the sole and exclusive owner of the Issue 2016-2 Bonds and THDA will have no responsibility to any DTC participant or beneficial owner thereof.

Section 2.05. Paying Agent. The Trustee is hereby appointed as paying agent for the Issue 2016-2 Bonds pursuant to Section 11.2 of the General Resolution. The Trustee may appoint an agent for presentation of transfers in New York, New York and DTC may act as such agent.

Section 2.06. Execution of Bonds. The Issue 2016-2 Bonds shall be executed by the manual or facsimile signature of the Chairperson or Vice Chairperson and the seal of THDA or a facsimile thereof shall be imprinted, impressed or otherwise reproduced on the Issue 2016-2 Bonds and attested by the manual or facsimile signature of the Executive Director or Secretary of THDA. The Issue 2016-2 Bonds shall be delivered to the Trustee for proper authentication and delivered to DTC pursuant to the DTC FAST delivery program, as the registered owner of the Issue 2016-2 Bonds upon instructions from THDA to that effect.

7 4826-8840-3249.1

Section 2.07. Place of Payment; Record Date. While the Issue 2016-2 Bonds are registered in book-entry only form in the name of Cede & Co. as nominee of DTC, payments of principal, Redemption Price and interest on the Issue 2016-2 Bonds shall be made in accordance with the procedures of DTC. In the event the Issue 2016-2 Bonds are no longer held in book-entry only form, the principal and Redemption Price of all Issue 2016-2 Bonds shall be payable at the designated corporate trust office of the Trustee. Interest on the Issue 2016-2 Bonds will be paid by check mailed by the Trustee to the registered owner thereof. Any registered owner of the Issue 2016-2 Bonds in a principal amount equal to or exceeding $1,000,000 may receive payments of interest by wire transfer if written notice is given to the Trustee at least ten Business Days before an applicable Interest Payment Date. The Record Date for payment of interest on the Issue 2016-2 Bonds shall be the 15th day of the month next preceding an Interest Payment Date.

Section 2.08. Sinking Fund Redemption Provisions.

(a) The Issue 2016-2 Bonds that are Term Bonds are subject to redemption in part by lot on the dates set forth below for such maturity of Issue 2016-2 Bonds at a Redemption Price equal to 100% of the principal amount thereof from mandatory Sinking Fund Payments in the principal amounts for each of the dates set forth below:

Issue 2016-2A Term Bonds due __________

Date

Amount Due

Date

Amount Due

$ $

*Maturity

Issue 2016-2B Term Bonds due ___________

Date

Amount Due

Date

Amount Due

$ $

*Maturity

8 4826-8840-3249.1

Issue 2016-2C Term Bonds due __________

Date

Amount Due

Date

Amount Due

$ $

*Maturity

(b) Upon the purchase or redemption of Issue 2016-2 Bonds of any series and maturity for which Sinking Fund Payments have been established other than by application of Sinking Fund Payments, each future Sinking Fund Payment for such Issue 2016-2 Bonds of such series and maturity will be credited by an amount bearing the same ratio to such Sinking Fund Payment as the total principal amount of such Issue 2016-2 Bonds of such series and maturity to be purchased or redeemed bears to the total amount of all Sinking Fund Payments for such series and maturity of Issue 2016-2 Bonds, unless otherwise directed by THDA in accordance with the General Resolution.

Section 2.09. Optional Redemption. The Issue 2016-2 Bonds maturing on and after [July 1, 2026] [other than the PAC Bonds], are subject to redemption at the option of THDA prior to their respective maturities, either as a whole or in part at any time, on or after [January 1, 2025] (any such date to be determined by THDA or selected by the Trustee subject to the provisions of and in accordance with the General Resolution, and when so determined or selected will be deemed and is hereby set forth as the redemption date), upon notice as provided in Article VI of the General Resolution, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued interest to the date of redemption.

[The PAC Bonds are subject to redemption at the option of THDA, either as a whole or in part at any time or on or after [July 1, 2026] (any such date to be determined by THDA or selected by the Trustee subject to the provisions of and in accordance with the General Resolution, and when determined or selected will be deemed and is hereby set forth as the redemption date), upon notice as provided in Article VI of the General Resolution, at the respective Redemption Prices set forth below (expressed as a percentage of the principal amount of such PAC Bonds to be redeemed), plus accrued interest to the redemption date:

Period Issue 2016-2A PAC Bond Redemption Price

Issue 2016-2C PAC Bond Redemption Price

[July 1, 2026] to [__________] [_____]% [______]% [__________] and thereafter [_____] [______]]

Section 2.10. Special Optional Redemption. The Issue 2016-2 Bonds are subject to

redemption, at the option of THDA, as a whole or in part at any time prior to maturity, in accordance with the provisions of the General Resolution in an amount equal to amounts available for such purpose from (i) proceeds of the Issue 2016-2 Bonds not expected to be applied to the financing of Program Loans, (ii) repayments and prepayments of Program Loans (including Program Securities [and the Transferred Program Loans]) allocated to the Issue

9 4826-8840-3249.1

2016-2 Bonds not otherwise required to be applied to the special mandatory redemption of the Issue 2016-2 Bonds as described in Sections 2.11(b) or 2.11(c) hereof or to make regularly scheduled principal payments, including Sinking Fund Payments, on the Issue 2016-2 Bonds, (iii) repayments and prepayments of Program Loans made with the proceeds of any other Bonds issued under the General Resolution, subject to limitations contained in the Code, (iv) other amounts on deposit in the Revenue Fund in excess of the amounts required for the payment of Debt Service and Program Expenses, and (v) amounts on deposit in the Bond Reserve Fund in excess of the Bond Reserve Requirement; provided however, that the PAC Bonds (A) are only subject to redemption as described in clause (ii) above as described in Section 2.11(b) hereof [, and] (B) shall not be subject to redemption as described in clauses (iii), (iv) and (v) above if such redemption would cause amortization of a PAC Bond to exceed the related Planned Amortization Amount [and (C) shall be redeemed on a pro rata basis to the extent of any special optional redemption].

The date of redemption pursuant to this Section 2.10 shall be determined by the Trustee upon the direction of THDA subject to the provisions of and in accordance with the General Resolution (and when so determined such date will be deemed and is hereby set forth as the redemption date). The Issue 2016-2 Bonds to be so redeemed shall be redeemed at a Redemption Price of 100% of the principal amount thereof, plus interest accrued to the redemption date, if applicable; provided, however, that the Redemption Price for the PAC Bonds in the event of a redemption described in clause (i) of the paragraph above shall be the issue price thereof (par plus premium), plus accrued interest to the redemption date.

The Issue 2016-2 Bonds to be redeemed pursuant to this Section 2.10 shall be selected by THDA in its sole discretion; provided, however, that the PAC Bonds may not be redeemed in an amount in excess of their proportionate amount of all Issue 2016-2 Bonds then Outstanding in the event of any redemption pursuant to clause (i) of the first paragraph of this Section 2.10 [, and, to the extent the PAC Bonds are redeemed pursuant to any special optional redemption, the PAC Bonds shall be redeemed on a pro rata basis.]

Section 2.11. Special Mandatory Redemptions.

(a) Unexpended Proceeds. The Issue 2016-2 Bonds are subject to mandatory redemption on _________ in the event and to the extent that there are unexpended proceeds of the Issue 2016-2 Bonds on deposit in the Issue 2016-2 Subaccount of the Loan Fund on _______; provided that such redemption date may be extended, at the option of THDA, and subject to the satisfaction of the conditions set forth in Section 4.01 hereof.

Notwithstanding any extension of the redemption date described above, in order to satisfy requirements of the Code, the Issue 2016-2 Bonds are subject to mandatory redemption on ______ __, _____, to the extent any amounts remain on deposit in the Issue 2016-2 Subaccount of the Loan Fund on ______ __, _____.

The redemption price of the Issue 2016-2 Bonds to be so redeemed shall be 100% of the principal amount thereof plus interest accrued to the date of redemption, if applicable; provided, however, that the redemption price for the PAC Bonds shall be the issue price thereof (par plus premium) plus accrued interest to the redemption date. The Issue 2016-2 Bonds to be redeemed shall be selected by THDA in its sole discretion;

10 4826-8840-3249.1

provided, however, that the PAC Bonds may not be redeemed in an amount in excess of their proportionate amount of all Issue 2016-2 Bonds then Outstanding [, and, to the extent the PAC Bonds are redeemed, the PAC Bonds shall be redeemed on a pro rata basis.]

(b) [Excess 2016-2 Principal Payments (PAC Bonds). The PAC Bonds are subject to redemption prior to their maturity, in whole or in part at a Redemption Price of 100% of the principal amount of such PAC Bonds to be redeemed, plus interest accrued to the date of redemption, from amounts transferred to the Redemption Account representing Excess 2016-2 Principal Payments. Any Excess 2016-2 Principal Payments so deposited in the Redemption Account shall be applied to the redemption of PAC Bonds on any Interest Payment Date commencing [January 1, 2017] [July 1, 2017]; provided that PAC Bonds may be redeemed between Interest Payment Dates on the first Business Day of any month for which adequate notice of redemption may be given.

While any PAC Bonds remain Outstanding, Excess 2016-2 Principal Payments shall be used as follows:

FIRST, if principal prepayments on the Program Loans allocable to the Issue 2016-2 Bonds (including Program Securities [and the Transferred Program Loans]) are equal to or less than the 400% PSA Prepayment Amount, as determined by THDA, then available Excess 2016-2 Principal Payments shall first be applied to redeem the PAC Bonds on a pro rata basis up to an amount correlating to the Issue 2016-2A PAC Bonds Planned Amortization Amount and the Issue 2016-2C PAC Bonds Planned Amortization Amount, as applicable, and, subject to Section 2.11(c) below, the remainder may be applied by THDA for any purpose permissible under the Resolution, including the redemption of any Bonds under the Resolution, other than the PAC Bonds.

SECOND, if principal prepayments on the Program Loans allocable to the Issue 2016-2 Bonds (including Program Securities [and the Transferred Program Loans]) are in excess of the 400% PSA Prepayment Amount, as determined by THDA, then available Excess 2016-2 Principal Payments shall first be applied to redeem PAC Bonds on a pro rata basis up to an amount correlating to the Issue 2016-2A PAC Bonds Planned Amortization Amount and the Issue 2016-2C PAC Bonds Planned Amortization Amount, as applicable, (as set forth in “FIRST” above) and, subject to Section 2.11(c) below, the remainder may be applied by THDA for any purpose permissible under the Resolution, including the redemption of any Bonds issued under the Resolution, including the PAC Bonds (any such remainder used to redeem PAC Bonds being an “Excess Principal PAC Bond Redemption”); provided, however, that (i) the source of an Excess Principal PAC Bond Redemption is restricted to that portion of available Excess 2016-2 Principal Payments which is in excess of 400% PSA, (ii) the principal amount of an Excess Principal PAC Bond Redemption may not be an amount in excess of the PAC Bonds’ proportionate amount of all Issue 2016-2 Bonds then Outstanding and (iii) the PAC Bonds shall be redeemed on a pro rata basis.

The Issue 2016-2A PAC Bonds Planned Amortization Amount, the Issue 2016-2C PAC Bonds Planned Amortization Amount and the 400% PSA Prepayment Amount set forth in Exhibit B hereto are each subject to proportionate reduction to the extent PAC Bonds are redeemed from amounts on deposit in the Issue 2016-2

11 4826-8840-3249.1

Subaccount of the Loan Fund which are not applied to finance Program Loans in accordance with Section 2.11(a) hereof.]

(c) Ten Year Rule.

(i) To the extent not required to make regularly scheduled principal payments on the Issue 2016-2 Bonds (including Sinking Fund Payments) or otherwise required to be used to redeem the PAC Bonds as described in Section 2.11 (b) above, repayments and prepayments of principal on the Program Loans, or portions thereof, allocable to the Issue 2016-2 Bonds (including Program Securities [and the Transferred Program Loans]) received more than ten years after the Issue Date of the Issue 2016-2 Bonds (or the date of original issuance of the bonds refunded by the Issue 2016-2 Bonds, directly or through a series of refundings) shall be applied to redeem the Issue 2016-2 Bonds on or before the next Interest Payment Date with respect to the Issue 2016-2 Bonds, which Interest Payment Date is at least six months from the date of receipt of such Program Loan principal payments, in such principal amounts as required to satisfy requirements of the Code. The Redemption Price of Issue 2016-2 Bonds so redeemed shall be 100% of the principal amount thereof, plus interest accrued to the redemption date, if applicable.

(ii) THDA shall advise the Trustee of the appropriate Redemption Date for any redemption pursuant to this Section 2.11(c). The Issue 2016-2 Bonds to be redeemed shall be selected by THDA in its sole discretion; provided however, that the PAC Bonds may be redeemed in an amount that exceeds the applicable Planned Amortization Amount only if there are no other Issue 2016-2 Bonds Outstanding and if such PAC Bonds are redeemed pursuant to this paragraph, the PAC Bonds shall be redeemed on a pro rata basis.

Section 2.12. Selection by Lot. If less than all of the Issue 2016-2 Bonds of like Series and maturity are to be redeemed, the particular bonds of such maturity to be redeemed shall be selected by lot in accordance with Section 6.4 of the General Resolution.

Section 2.13. Purchase of Bonds by THDA or Trustee. Whenever moneys are available for redemption of Bonds under Sections 2.08, 2.09, 2.10 or 2.11 above, THDA or the Trustee is authorized to purchase Bonds at a price not to exceed the applicable Redemption Price.

ARTICLE III

SALE AND DELIVERY

Section 3.01. Sale.

(a) The Issue 2016-2 Bonds are hereby authorized to be sold to the Underwriters at the prices and on the terms and conditions set forth in the Bond Purchase Agreement and upon the basis of the representations, warranties and agreements therein set forth. The Chairman, Secretary or Assistant Secretary of the Bond Finance Committee and the Executive Director of THDA are hereby authorized to execute the

12 4826-8840-3249.1

Bond Purchase Agreement. The Board of Directors of THDA hereby authorizes the Committee to adopt a resolution approving the purchase price of the Issue 2016-2 Bonds.

(b) The Secretary of the Bond Finance Committee of THDA is hereby authorized to make public and to authorize distribution of the Official Statement relating to the Issue 2016-2 Bonds in substantially the form presented to THDA with such changes, omissions, insertions and revisions as such officer shall deem advisable. The Chairman, Vice Chairman, Executive Director and Secretary of the Bond Finance Committee are hereby authorized to sign and deliver such Official Statement to the Underwriters. The distribution of the Preliminary Official Statement relating to the Issue 2016-2 Bonds to the public is hereby authorized and approved.

(c) The Issue 2016-2 Bonds shall be delivered to the Underwriters in accordance with the terms of the Bond Purchase Agreement and this 2016-2 Supplemental Resolution.

ARTICLE IV

DISPOSITION OF PROCEEDS AND OTHER MONEYS

Section 4.01. Loan Fund; Bond Reserve Fund Requirement. Upon receipt of the proceeds of the sale of the Issue 2016-2 Bonds, THDA shall deposit such proceeds, together with any contribution from THDA of available THDA funds, in the Issue 2016-2 Bond Subaccount of the Loan Fund and in the Bond Reserve Fund, if applicable, as shall be set forth in a certificate of THDA delivered on or prior to the date of issuance of the Issue 2016-2 Bonds. Amounts on deposit in the Issue 2016-2 Bond Subaccount of the Loan Fund in excess of $__________ shall be applied to (i) the financing of Program Loans (including Program Securities), or participations therein, in accordance with the provisions of the General Resolution and Section 4.03 hereof, (ii) deposits to the Bond Reserve Fund and the Debt Service and Expense Account of the Revenue Fund, (iii) payment of Costs of Issuance and (iv) payment of capitalized interest to the extent, if any, specified by written instructions of an Authorized Officer.

Amounts on deposit in the Issue 2016-2 Subaccount of the Loan Fund shall be withdrawn therefrom and applied to the mandatory redemption of Issue 2016-2 Bonds as described in Section 2.11(a) hereof. The date of such redemption provided in Section 2.11(a) may be extended upon the delivery by THDA to the Trustee and the Rating Agency of a Projected Cash Flow Statement which satisfies the requirements of Section 7.11 of the General Resolution; provided further that the date of such redemption shall not be extended beyond the date set forth in the second paragraph of Section 2.11(a) unless THDA is in receipt of an opinion of Bond Counsel to the effect that such extension will not adversely affect the exclusion of interest on the Issue 2016-2 Bonds from the income of the owners thereof for federal income tax purposes. The amount of funds on deposit in the Issue 2016-2 Bond Subaccount of the Loan Fund to be used to pay Costs of Issuance with respect to the Issue 2016-2 Bonds shall not exceed 2% of the proceeds of the Issue 2016-2 Bonds.

THDA hereby covenants that an amount equal to twenty percent (20%) of the funds deposited in the Issue 2016-2 Bond Subaccount of the Loan Fund which are to be used to finance Program Loans (including Program Securities) (or other available funds of THDA), shall be

13 4826-8840-3249.1

made available for owner financing of “targeted area residences” (as defined in Section 143(j) of the Code) until __________ ___, 2017.

The Bond Reserve Fund Requirement with respect to the Issue 2016-2 Bonds shall be [an amount equal to 3% of the then current balance of Program Loans (other than Program Loans underlying Program Securities) allocable to the Issue 2016-2 Bonds plus the amount on deposit in the Issue 2016-2 Subaccount of the Loan Fund which has not been designated to provide for the payment of Costs of Issuance or capitalized interest. On the Issue Date, THDA shall deposit an amount in the Bond Reserve Fund to satisfy the Bond Reserve Requirement.]

Section 4.02. Proceeds of Issue 2016-2A Bonds and Issue 2016-2B Bonds. Proceeds of the Issue 2016-2A Bonds and Issue 2016-2B Bonds, together with any contribution from THDA of available THDA funds, initially shall be deposited in the Issue 2016-2 Bond Subaccount of the Loan Fund. On the Issuance Date, $__________ of the amount on deposit in the Issue 2016-2 Bond Subaccount of the Loan Fund (representing [the principal] [a portion of] the proceeds of the Issue 2016-2A Bonds and the [entire proceeds of the] Issue 2016-2B Bonds [in the aggregate amount of $__________ [and available funds of THDA in the amount of $__________]]) shall be applied to the refunding of the Refunded Bonds. [On such date, the Transferred Program Loans shall be credited to the Issue 2016-2 Bond Subaccount of the Loan Fund and the Transferred Investments shall be deposited in such Funds or Accounts as shall be set forth in a certificate of THDA delivered on or prior to the Issuance Date.]]

Section 4.03. Program Loan Determinations. No Program Loan shall be financed with proceeds of the Issue 2016-2 Bonds unless (i) such Program Loan is made for the acquisition of residential housing for occupancy by not more than four families and (ii) the deed of trust securing such Program Loan shall constitute and create a first lien subject only to Permitted Encumbrances, on the real property or on the interest in the real property constituting a part of the residential housing with respect to which the Program Loan secured thereby is made and on the fixtures acquired with the proceeds of the Program Loan attached to or used in connection with such residential housing.

In addition, the Program Loan must either:

(a) have been pooled into a Program Security; or

(b) have been insured or guaranteed by the Federal Housing Administration, the Farmers Home Administration, the Veteran’s Administration, or another agency or instrumentality of the United States or the State to which the powers of any of them have been transferred, or which is exercising similar powers with reference to the insurance or guaranty of Program Loans; or

(c) have a principal balance not exceeding 78% of the value, as determined in an appraisal by or acceptable to THDA, or the purchase price of the property securing the Program Loan, whichever is less; or

(d) be made in an amount not exceeding the value, as determined in an appraisal by or acceptable to THDA, or purchase price of the property securing the Program Loan, whichever is less, but only if (i) THDA is issued a mortgage insurance policy by a private mortgage insurance company, qualified to do business in the State and

14 4826-8840-3249.1

the claims paying ability of which private mortgage insurer is rated by each Rating Agency in a rating category at least as high as the then current rating assigned to the Bonds, under which the insurer, upon foreclosure of the property securing the Program Loan, must pay the holder of the Program Loan the unrecovered balance of a claim including unpaid principal, accrued interest, taxes, insurance premiums, and expenses of foreclosure, if any, or in lieu thereof may permit the holder of the Program Loan to retain title and may pay an agreed insured percentage of such claim; and (ii) the insured percentage of the Program Loan equals the amount by which the original principal amount of the Program Loan exceeds 78% of the value, as determined by an appraisal by or acceptable to THDA or purchase price of the property securing the Program Loan, whichever is less.

ARTICLE V

FORM OF BONDS, AND TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Section 5.01. Form of Bonds. Subject to the provisions of the General Resolution, the Issue 2016-2 Bonds in fully registered form shall be in substantially the form attached hereto as Exhibit C, with such variations as shall be appropriate in order to conform to the terms and provisions of the General Resolution and this Resolution.

Section 5.02. Form of Trustee’s and Authenticating Agent’s Certificate of Authentication. The Issue 2016-2 Bonds shall not be valid or become obligatory for any purpose unless there shall have been endorsed thereon a certificate of authentication in substantially the following form:

(FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION)

This bond is one of the bonds described in the within-mentioned Resolutions and is one of the Residential Finance Program Bonds, [Issue 2016-2A (AMT)] [Issue 2016-2B (Non-AMT)] [Issue 2016-2C (Non-AMT)] of the Tennessee Housing Development Agency.

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By Authorized Officer

ARTICLE VI

MISCELLANEOUS

Section 6.01. No Recourse Against Members or Other Persons. No recourse may be had for the payment of principal of or premium or interest on the Issue 2016-2 Bonds or for any claim based thereon or on this Resolution against any member of THDA or any person executing the Issue 2016-2 Bonds and neither the members of THDA nor any person executing the Issue

15 4826-8840-3249.1

2016-2 Bonds may be liable personally on the Issue 2016-2 Bonds or be subject to any personal liability or accountability by reason of the execution thereof.

Section 6.02. Bonds not Debt, Liability or Obligation of the State or the United States of America. The Issue 2016-2 Bonds are not a debt, liability or the obligation of the State or any other political subdivision thereof. Neither the full faith and credit nor the taxing power of the State, or of any other political subdivision thereof, is pledged for the payment of the principal of or interest on the Issue 2016-2 Bonds. The Issue 2016-2 Bonds are not a debt, liability or obligation of the United States of America or any agency thereof. Neither the full faith and credit nor the taxing power of the United States of America is pledged for payment of the principal of or interest on the Issue 2016-2 Bonds.

Section 6.03. Delivery of Projected Cash Flow Statements. THDA shall deliver such Projected Cash Flow Statements at the times and on the occasions set forth in the General Resolution or this Resolution.

Section 6.04. Authorized Officers. The Chairman, Vice Chairman, Executive Director, General Counsel, Deputy Executive Director and Secretary of THDA and the Secretary and any Assistant Secretary of the Bond Finance Committee and any other proper officer of THDA, be, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution, the General Resolution and the Official Statement.

Section 6.05. Authorized Trustee. THDA authorizes and directs the Trustee to perform any and all acts contemplated to be performed by the Trustee pursuant to the terms and provisions of this Resolution.

Section 6.06. Covenant to Comply with Federal Tax Law Requirements. THDA hereby covenants to comply with all applicable requirements of the Code so that interest on the Issue 2016-2 Bonds will be excluded from gross income of the holders thereof for federal income tax purposes, including the rebate requirement of Section 148(f) of the Code. THDA also covenants to pay any interest or penalty imposed by the United States for failure to comply with said rebate requirements. In accordance with the rebate requirement, THDA agrees that there will be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the Issue 2016-2 Bonds from time to time.

Section 6.07. Continuing Disclosure Undertaking.

(a) THDA shall deliver to the MSRB, within 210 days after the end of each Fiscal Year:

(i) a copy of the annual financial statements of THDA prepared in accordance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board; and

(ii) an annual update of the type of information in the Official Statement (A) contained in Appendix E, (B) regarding annual required contributions for employee pension plan and other post-employment benefits to

16 4826-8840-3249.1

the extent not included in annual financial statements and (C) of the nature disclosed under the following headings (including, without limitation, information with respect to the outstanding balances of Program Loans, by mortgage type, delinquency information, acquisition costs and income limits):

(A) Residential Finance Program Bonds; and

(B) Residential Finance Program Loans.

The information described in this subsection (a) may be provided by specific reference to documents (including official statements, to the extent the official statements include the information described in this subsection (a)) previously provided to the MSRB or filed with the Securities and Exchange Commission.

If unaudited financial statements are provided as part of the information required to be delivered under this subsection (a) within the time period specified above, THDA shall provide, when and if available, a copy of THDA’s audited financial statements to the MSRB.

(b) THDA shall deliver to the MSRB and the Trustee, in a timely manner not in excess of 10 business days after the occurrence of the event, notice of the occurrence of any of the following events (if applicable) with respect to the Issue 2016-2 Bonds:

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults, if material;

(iii) unscheduled draws on the Bond Reserve Fund (or other debt service reserves) reflecting financial difficulties;

(iv) unscheduled draws on any credit enhancements reflecting financial difficulties;

(v) substitution of any credit or liquidity provider, or their failure to perform;

(vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Issue 2016-2 Bonds, or other material events affecting the tax status of the Issue 2016-2 Bonds;

(vii) modifications to rights of the holders of the Issue 2016-2 Bonds, if material;

(viii) bond calls, if material, and tender offers;

(ix) defeasances;

(x) release, substitution or sale of property securing repayment of the Issue 2016-2 Bonds, if material;

17 4826-8840-3249.1

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership or similar event of THDA (which event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for THDA in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of THDA, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of THDA);

(xiii) The consummation of a merger, consolidation or acquisition involving THDA or the sale of all or substantially all of the assets of THDA, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Issue 2016-2 Bonds or defeasance of any Issue 2016-2 Bonds need not be given pursuant to this Section 6.07 any earlier than the notice (if any) of such redemption or defeasance is given to the owners of the Issue 2016-2 Bonds pursuant to the Resolution.

(c) THDA shall give notice to the Trustee and the MSRB in a timely manner of any failure by THDA to provide any information required pursuant to subsection (a) above within the time limit specified therein.

(d) All notices, documents and information provided to the MSRB shall be provided in an electronic format as prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB.

(e) THDA agrees that the provisions of this Section 6.07 shall be for the benefit of the beneficial owners of the Issue 2016-2 Bonds whether or not the Rule (as defined below) applies to such Issue 2016-2 Bonds.

(f) THDA may amend this Resolution with respect to the above agreements, without the consent of the beneficial owners of the Issue 2016-2 Bonds (except to the extent required under clause (iv)(B) below), if all of the following conditions are satisfied: (i) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of THDA or the type of business conducted thereby; (ii) these agreements

18 4826-8840-3249.1

as so amended would have complied with the requirements of Rule 15c2-12 (the “Rule”) as of the date of this Resolution, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; (iii) THDA shall have delivered to the Trustee an opinion of counsel, addressed to THDA and the Trustee, to the same effect as set forth in clause (ii) above; (iv) either (A) THDA shall deliver to the Trustee an opinion of or determination by a person unaffiliated with THDA (which may include the Trustee or bond counsel), acceptable to THDA and the Trustee, addressed to THDA and the Trustee, to the effect that the amendment does not materially impair the interests of the holders of the Issue 2016-2 Bonds or (B) the holders of the Issue 2016-2 Bonds consent to the amendment pursuant to the same procedures as are required for amendments to the General Resolution with consent of the holders of Bonds pursuant to the General Resolution as in effect on the date of this Resolution; and (v) THDA shall have delivered copies of such opinion(s) and the amendment to the MSRB.

(g) THDA’s obligations with respect to the beneficial owners of the Issue 2016-2 Bonds under these agreements as set forth above terminate upon a legal defeasance pursuant to the General Resolution, prior redemption or payment in full of all of the Issue 2016-2 Bonds. THDA shall give notice of any such termination to the MSRB.

(h) Failure by THDA to comply with this Section 6.07 shall not constitute an Event of Default under the General Resolution but the undertaking in this Section 6.07 may be enforced by any beneficial owner of the Issue 2016-2 Bonds exclusively by an action for specific performance. The obligations of THDA in this Section 6.07 shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of the obligations under this Section 6.07 shall be instituted in a court of competent jurisdiction in the State.

Section 6.08. Confirmation and Adjustment of Terms by Committee. The terms of the Issue 2016-2 Bonds are herein established subject to confirmation by the Committee upon the sale of the Issue 2016-2 Bonds by the Committee. The Committee is hereby authorized to make such changes or modifications in the principal amounts, maturities and interest rates for the Issue 2016-2 Bonds and in the application of the proceeds thereof, paying agents, terms of redemption and the schedule of prepayment amounts to be used for accrued principal installments in such manner as the Committee determines to be necessary or convenient to better achieve the purposes of the Act and in the best interests of THDA.

Section 6.09. Effective Date. This Resolution will take effect immediately.

4826-8840-3249.1

EXHIBIT A

BOND PURCHASE AGREEMENT

4826-8840-3249.1

EXHIBIT B

[PLANNED AMORTIZATION AMOUNTS FOR PAC BONDS]

Date [Issue 2016-2A PAC Bonds Planned Amortization

Amount]

[Issue 2016-2C PAC Bonds Planned Amortization

Amount]

2 4826-8840-3249.1

[[400]% PSA PREPAYMENT AMOUNTS

FOR ISSUE 2016-2 BONDS]

Date Cumulative

Amount

Date Cumulative

Amount

4826-8840-3249.1

EXHIBIT C

FORM OF BONDS

REGISTERED

R[A][B][C][-1] $[_________]

TENNESSEE HOUSING DEVELOPMENT AGENCY RESIDENTIAL FINANCE PROGRAM BOND ISSUE 2016-2[A][B][C] [(AMT)][(Non-AMT)]

Interest Rate Dated Date Maturity Date Cusip

[___]% [_____], 2015 [_____]

880461[___]

REGISTERED OWNER: CEDE & CO.

PRINCIPAL SUM: [_________]

TENNESSEE HOUSING DEVELOPMENT AGENCY (hereinafter sometimes called “THDA”), a body politic and corporate and a political subdivision of the State of Tennessee (herein called the “State”), created and existing under and by virtue of the laws of the State, acknowledges itself indebted, and for value received hereby promises to pay to the Registered Owner (shown above), or registered assigns, the principal sum (shown above), on the maturity date specified above, and to pay interest on said principal sum to the Registered Owner of this Bond from the dated date hereof until THDA’s obligation with respect to the payment of said principal sum shall be discharged, at the rate per annum specified above payable on each January 1 and July 1 commencing [January 1, 2017]. The principal of and interest on this Bond are payable at the designated corporate trust office of U.S. Bank National Association, Nashville, Tennessee in any coin or currency of the United States of America, which, on the respective dates of payment thereof shall be legal tender for the payment of public and private debts.

This Bond is one of the bonds of THDA designated “Residential Finance Program Bonds” (herein called the “Bonds”) authorized to be issued in various series under and pursuant to the Tennessee Housing Development Agency Act, Sections 13-23-101 et seq., of the Tennessee Code Annotated, as amended (herein called the “Act”), a resolution of THDA adopted January 29, 2013, as amended and supplemented by the Bond Finance Committee on April 18, 2013, and entitled “General Residential Finance Program Bond Resolution” (herein called the “General Resolution”) and a supplemental resolution authorizing each issue. As provided in the General Resolution, the Bonds may be issued from time to time in one or more series of various principal amounts, may bear interest at different rates and subject to the provisions thereof, may

2 4826-8840-3249.1

otherwise vary. All Bonds issued and to be issued under the General Resolution are and will be equally secured by the pledges and covenants made therein, except as otherwise expressly provided or permitted in the General Resolution.

This bond is one of a series of bonds additionally designated “Issue 2016-2[A][B][C]” (herein called the “Bonds”) issued in the aggregate principal amount of $________ under the General Resolution, a resolution of THDA adopted on May 24, 2016, as amended and supplemented by the Bond Finance Committee of THDA on __________ __, 2016 (collectively with the General Resolution, the “Resolutions”). Copies of the Resolutions are on file at the office of THDA in Nashville, Tennessee and at the principal corporate trust office of U.S. Bank National Association, Nashville, Tennessee, as trustee under the General Resolution (said trustee under the General Resolution being called herein the “Trustee”) and reference to the Resolutions and any and all supplements thereto and modifications and amendments thereof and to the Act is made for a description of the pledges and covenants securing the Bonds, the nature, extent and manner of enforcement of such pledges, the rights and remedies of the bearers or registered owners of the Bonds with respect thereto and the terms and conditions upon which the Bonds have been issued and may be issued thereunder.

To the extent and in the manner permitted by the terms of the Resolutions, the provisions of the Resolutions or any resolution amendatory thereof or supplemental thereto may be modified or amended by THDA with the written consent of the holders of at least two-thirds in principal amount of the Bonds then outstanding, and, in case less than all of the several series of Bonds would be affected thereby, with such consent of the holders of at least two-thirds in principal amount of the Bonds of each series so affected then outstanding. If such modification or amendment will by its terms not take effect so long as any Bonds of any specified like series and maturity remain outstanding, however, the consent of the holders of such Bonds shall not be required. In addition, certain other modifications or amendments to the Resolutions can be made which are not contrary to or inconsistent with the Resolutions without the consent of the Bondholders.

The holder of this Bond shall have no right to enforce the provisions of the Resolutions, to institute actions to enforce the provisions of the Resolutions or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the General Resolution. In certain events, on the conditions, in the manner and with the effect set forth in the General Resolution, the principal of all the Bonds issued thereunder and then outstanding, together with accrued interest thereon, may become or may be declared due and payable before the maturity thereof.

This Bond is transferable, as provided in the Resolutions, only upon the books of THDA kept for that purpose at the office of the Trustee by the registered owner hereof in person or by such owner’s attorney duly authorized in writing, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or such owner’s attorney duly authorized in writing, and thereupon a new registered Bond or Bonds in the same aggregate principal amount and of the same subseries and maturity shall be issued to the transferee in exchange therefor as provided in the General Resolution and upon the payment of the charges, if any, therein prescribed. THDA and the Trustee may treat and consider the person in whose name this Bond is registered as the absolute owner hereof for the purpose of

3 4826-8840-3249.1

receiving payment of, or on account of, the principal or redemption price, if any, hereof and interest due hereon and for all other purposes whatsoever.

This Bond is a special limited obligation of THDA payable solely from the revenues and assets pledged therefor pursuant to the General Resolution.

The Bonds are issued as fully registered bonds in the denomination of $5,000 or any integral multiple thereof.

The Bonds are subject to optional, mandatory and sinking fund redemption as described in the Resolutions.

This Bond does not constitute a debt, liability or other obligation of the State or any political subdivision thereof other than THDA and neither the State nor any political subdivision thereof shall be obligated to pay the principal of the Bonds or the interest thereon. Neither the faith and credit nor the taxing power of the State or of any political subdivision thereof is pledged to the payment of the principal of or interest on the Bonds.

This Bond shall not be valid or become obligatory for any other purpose or be entitled to any security or benefit under the Resolutions until the Certificate of Authentication hereon shall have been signed by the Trustee.

The Act provides that neither the members of THDA nor any person executing this Bond shall be liable personally hereon or shall be subject to any personal liability or accountability by reason of its execution.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution or statutes of the State and the Resolutions to exist, to have happened or to have been performed precedent to or in the issuance of this Bond, exist, have happened and have been performed in due time, form and manner as required by law and that the issuance of the Bonds, together with all other indebtedness, of THDA, is within every debt and other limit prescribed by law.

[Remainder of page intentionally left blank]

4 4826-8840-3249.1

IN WITNESS WHEREOF, TENNESSEE HOUSING DEVELOPMENT AGENCY has caused this Bond to be executed in its name by the manual or facsimile signature of its Chairman and its corporate seal (or a facsimile thereof) to be affixed, imprinted, engraved or otherwise reproduced hereon and attested by the manual or facsimile signature of its Executive Director, all as of the dated date shown above.


By Brian Bills Chairman

[SEAL]

Attest:

By Ralph M. Perrey Executive Director

5 4826-8840-3249.1

CERTIFICATE OF AUTHENTICATION

This bond is one of the bonds described in the within-mentioned Resolutions and is one of the Residential Finance Program Bonds, Issue 2016-2[A][B][C] [(AMT)][(Non-AMT)] of the Tennessee Housing Development Agency.


By Authorized Signatory

Dated: __________ __, 2016

6 4826-8840-3249.1

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the

right of survivorship and not as tenants in common

UNIFORM GIFT MIN ACT - Custodian (Cust) (Minor)

under Uniform Gifts to Minors

Act (State)

Additional Abbreviations may also be used though not in the above list

ASSIGNMENT

For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney to transfer the said Bond on the bond register, with full power of substitution in the premises.

Dated:

Social Security Number or Employer Identification Number of Transferred:

Signature guaranteed:

NOTICE: The assignor’s signature to this Assignment must correspond with the name as it appears on the face of the within Bond in every particular without alteration or any change whatever.

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TENNESSEE HOUSING DEVELOPMENT AGENCY

AUTHORIZING REIMBURSMENT OF THDA FROM PROCEEDS OF ISSUE 2016-2

May 24, 2016

WHEREAS, the Tennessee Housing Development Agency (“THDA”) is financing mortgage loans for eligible borrowers to purchase single family residences in compliance with the Internal Revenue Code of 1986, as amended (the “Code”), and the General Residential Finance Program Bond Resolution, (the “2013 General Resolution”) and purchasing mortgage backed securities guaranteed by Fannie Mae backed by approved privately insured conventional loans made to eligible borrowers to be held in the 2013 General Resolution (“MBS”); and

WHEREAS, THDA expects to use its own funds to continue its mortgage loan programs prior to the availability of proceeds from the issuance of the General Residential Finance Program Bonds, Issue 2016-2, if and when issued and sold (the “Bonds”), either through the direct purchase of eligible mortgage loans or the purchase of MBS; and

WHEREAS, THDA will continue to commit and purchase mortgage loans and MBS prior to the closing date for the Bonds (the “Closing”); and

WHEREAS, THDA expects that up to $60,000,000 in mortgage loans and MBS may be purchased prior to Closing; and

WHEREAS, it is in the best interest of THDA to reimburse itself from the proceeds of the Bonds for THDA funds expended to purchase mortgage loans and MBS prior to the Closing.

NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THDA THAT:

1. Use of proceeds from the Bonds in an amount not to exceed Sixty Million and 00/100 Dollars ($60,000,000) shall be used to reimburse THDA for the actual amounts expended to purchase mortgage loans made to eligible borrowers who purchased single family residences in accordance with the requirements of the Code and the 2013 General Resolution or MBS backed by approved privately insured conventional loans made to eligible borrowers.

2. This resolution shall take effect immediately.



Bill HaslamGovernor


MEMORANDUMDATE: May 11,2016

TO: Bond Finance CommitteeTHDA Board of Directors

FROM: Lynn E. Miller \/P,f\^Chief Legal Counsel" "

SUBJBCT: Revisions to the Debt Management Policy

Section XXIII of the current THDA Debt Management Policy (the "Policy") requires annual review of thePolicy at the same time the annual Schedule of Financing is considered. To comply with this requirement,THDA staff and staff of the Office of State and Local Finance reviewed the current Policy and recommendthe changes as shown on the attached version ofthe Policy. The proposed changes are housekeeping, ratherthan substantive, in nature.

The recommended changes are summarized as follows:

l. Table ofcontents added.

2. Typographical errors on page 2 in Sections III and V are corrected.

3. A new Section XI is added regarding investment of bond proceeds. This section merely reflectscurrent practice and does not reflect a substantive change in policy or practice.

4. As a result of the insertion of a new Section XI, all subsequent Sections are renumbered.

5. Information about the date of these modifications is added to Section XXIV.

Staff recomrnends that the Bond Finance Committee recommend these housekeeping changes to the BoardStaff also recommends that the Board approve these housekeeping changes.

LEM/ds

Attachnrent


Tennessee Housing Development Agency

__________________

Debt Management Policy

__________________

Approved November 29, 2011 Amended July 29, 2014, May 24, 2016

Tennessee Housing Development Agency Debt Management Policy

Table of Contents

I. Background ...................................................................................................................... 1

II. Purpose ............................................................................................................................. 1

III. Policy ................................................................................................................................ 1

IV. Long-Term Financial Objectives ..................................................................................... 2

V. Long-Range Financial Planning ....................................................................................... 2

VI. Finance Team ................................................................................................................... 2

VII. Conflicts ........................................................................................................................... 4

VIII. Statutory Debt Limit ......................................................................................................... 4

IX. Schedule of Financing ...................................................................................................... 4

X. Bond Issue Planning, Method of Sale, Structuring, and Execution ................................. 4

XI. Investment of Proceeds .................................................................................................... 6

XII. Debt Issuance Review ...................................................................................................... 6

XIII. Initial and On-going Federal Compliance ........................................................................ 6

XIV. Short-Term Financings ..................................................................................................... 6

XV. Types of Bonds ................................................................................................................ 7

XVI. Refundings ....................................................................................................................... 9

XVII. Redemptions ..................................................................................................................... 9

XVIII. Transparency .................................................................................................................... 9

XIX. Interest Rate and Forward Purchase Agreements ........................................................... 10

XX. Conduit Debt .................................................................................................................. 10

XXI. Variable Rate Debt ......................................................................................................... 10

XXII. Taxable Debt .................................................................................................................. 10

XXIII. State Moral Obligation Pledge ....................................................................................... 10

XXIV. Adoption and Amendment ............................................................................................. 10

1

Tennessee Housing Development Agency Debt Management Policy

Approved November 29, 2011 Amended July 29, 2014, May 24, 2016

I. Background

The Tennessee Housing Development Agency (“THDA”) is a body, politic and corporate, and a political subdivision and instrumentality of the State of Tennessee (“State”). THDA was established under TCA Section 13-23-101 et seq. for the purpose, among other things, of raising capital through the issuance of its bonds and notes to assure a steady flow of production of new housing units for lower and moderate income persons and families. THDA’s mission is to create safe, sound, and affordable housing opportunities across the State by providing competitive interest rates on a variety of mortgage loan products approved by THDA’s Board of Directors (“Board”). THDA’s mortgage loans, resulting revenues, and any other assets under THDA’s bond resolutions are pledged assets for the payment of principal and interest on THDA bonds.

The Bond Finance Committee of the Board (“BFC”) is responsible for, among other things, overseeing THDA debt issuance. In this capacity, the BFC approves a Plan of Financing for each THDA bond issue and recommends the proposed debt issuance transaction to the Board for consideration. Upon the Board’s authorization, the sale of the debt proceeds under BFC oversight. The BFC is also authorized to approve the pricing of a debt issuance on behalf of THDA. The Secretary of the BFC, subject to this Debt Management Policy (“Policy”) and other policies of the Board and the BFC, is responsible for the execution of all matters relating to the issuance and servicing of the debt of THDA.

THDA debt is payable solely from the revenues or assets of THDA available therefore and pledged to the bondholders under the terms of THDA’s general bond resolutions. THDA debt is not a debt, liability, or obligation of the State or of any other political subdivision of the State. THDA debt is not secured by a pledge of the full faith and credit of the State or of any other political subdivision of the State.

II. Purpose

In December 2010, the Tennessee State Funding Board adopted a statement on debt management directing governmental entities in Tennessee to draft and adopt their own debt management policies. All public entities incurring or issuing debt, including THDA, are required to adopt a debt management policy by January 1, 2012. This Policy provides clear objectives for THDA’s debt transactions and transparency as to what is being considered, including the associated cost and risks. It also establishes requirements to assist in avoiding conflicts of interest.

III. Policy

THDA’s goal is to raise capital to maintain a steadily available supply of funds to finance its mortgage loan programs at cost levels that provide competitive, fixed interest rate mortgage loans that benefit low and moderate income families, while maintaining or improving THDA’s overall financial strength and flexibility, managing associated risks and complying with all applicable federal and state laws.

To achieve this goal, THDA will:

1. Maintain a conservative approach relative to debt financing and financial decisions.

2

2. Maintain at least a five year Strategic Financial Plan, with at least annual updates, inclusive of the general financial objectives as set forth in this Policy, which may change in response to economic and other factors.

3. Maintain a debt management policy that provides for optimally-structured financing options, giving consideration to associated risks of debt structure components and current market conditions, while enabling broad distribution capabilities, both to institutional and retail investors.

4. Maintain compliance with requirements of the Internal Revenue Code of 1986, as amended (the “Code”), as applicable to THDA’s bonds and mortgage loans financed with the proceeds of such bonds.

IV. Long-Term Financial Objectives

1. Maintain financial self-sufficiency.

2. Effectively balance the use of financial resources to fund mortgage loans and other initiatives that fulfill THDA’s statutory purpose and mission without compromising THDA’s financial strength.

3. Maintain or improve the current credit ratings for each THDA bond resolution.

4. Maintain financial flexibility.

5. Whenever possible, maximize yield spread between mortgage loan interest rates and the cost of debt to provide program and operational sustainability and resources for other investments in affordable housing.

6. Effectively balance financial creativity and risks.

7. Whenever possible, seek to reduce the extent of the State’s moral obligation pledge with respect to THDA debt.

V. Long-Range Financial Planning

THDA will maintain a five year Strategic Financial Plan (Plan) to be used as a liquidity analysis tool for decision-making purposes. At a minimum, this Plan will incorporate projections and assumptions for mortgage loan production, resources (including, but not limited to volume cap, tax-exempt debt, and taxable debt), costs and expenses of anticipated debt issuance, other housing program and operational liquidity needs, and liquidity and balance sheet analyses to assess the long-term financial position of THDA. The Plan will be developedment and maintained by THDA in cooperation with the Financial Advisor and the Office of State and Local Finance and will incorporate the financial objectives listed in this Policy. THDA anticipates at least annual updates to the Plan.

VI. Finance Team

THDA will maintain a team of finance professionals consisting of internal and external experts for the purpose of executing and maintaining debt financings and other financings as may be approved by the Board. The team will include THDA staff (including at least the THDA Executive Director, Chief Legal Counsel and Chief Financial Officer), underwriters (when appropriate), Bond Counsel, underwriter’s counsel (when appropriate), Financial Advisor, and Office of State and Local Finance staff.

3

All non-employee professionals engaged in the THDA debt issuance process shall clearly disclose all compensation and consideration received related to services provided in the THDA debt issuance process. This includes “soft” costs or compensations in lieu of direct payments.

The time period over which Bond Counsel, Financial Advisor, and potential underwriters serve shall end in staggered fiscal years in order to avoid disruption by either transition or selection processes. Contracts or agreements, if any, shall reflect such terms.

Bond Counsel: THDA shall enter into an engagement letter agreement with each lawyer or law firm representing THDA as bond counsel or tax counsel in a debt transaction. Bond Counsel shall be selected by the BFC pursuant to a Request for Proposal Process primarily weighted towards qualifications and price. Bond Counsel shall serve for a stated period of time. The Bond Counsel team shall include at least one lawyer who is licensed to practice in Tennessee and who is involved in all analysis and opinions regarding the Tennessee Constitution and Tennessee law arising in the course of Bond Counsel’s engagement.

Financial Advisor: THDA shall utilize the services of an independent financial advisor, who is registered with the Securities and Exchange Commission (“SEC”) and the Municipal Securities Rulemaking Board (“MSRB”) as a registered municipal advisor. The Financial Advisor shall enter into a written agreement with the Office of the Comptroller of the Treasury for debt management and transaction services for a stated period of time, however, the Financial Advisor shall have a fiduciary responsibility to THDA. The Financial Advisor shall be selected by the Board pursuant to a Request for Proposal Process primarily weighted towards qualifications and price. The Financial Advisor shall have demonstrated expertise in providing financial advice on housing related debt and financial planning on projects of state housing finance agencies, completely independent of the underwriting of municipal securities by banks and securities dealers.

Whether in a competitive or negotiated sale, a financial advisor shall not bid on, privately place or underwrite a THDA debt issue if it is or has been providing advisory services for the same THDA debt issue.

Underwriter: THDA shall utilize the services of a pool of potential underwriters for a stated period of time for negotiated sales. BFC shall select underwriters pursuant to a Request for Proposal/Request for Qualifications Process primarily weighted toward qualifications. Each underwriter in a negotiated sale shall clearly identify itself in writing e.g., in a response to a request for proposals or in promotional materials provided to THDA as an underwriter and not as a financial advisor from the earliest stages of its relationship with THDA with respect to that issue. Each underwriter must clarify its primary role as a purchaser of securities in an arm’s-length commercial transaction and that it has financial and other interests that differ from those of THDA. In the context of negotiated sales, THDA will evaluate structuring or other proposals only from members of its pool of underwriters. Underwriters may include senior managers (including a bookrunning senior manager), co-managers and selling group members, all as determined by the BFC.

Underwriter’s Counsel: While underwriter’s counsel is part of the financing team in connection with a negotiated bond issuance, such counsel is selected by the bookrunning senior manager with input from the BFC.

Trustee: The BFC shall periodically review and evaluate the performance of the Trustee and report its findings to the Board.

4

VII. Conflicts

Professionals involved in a debt transaction hired or compensated by THDA shall disclose to THDA existing client and business relationships between and among the professionals to a transaction (including but not limited to financial advisor, swap advisor, bond counsel, swap counsel, trustee, paying agent, underwriter, counterparty, and remarketing agent), as well as conduit issuers, sponsoring organizations and program administrators. This disclosure shall include that information reasonably sufficient to allow THDA to appreciate the significance of the relationships.

Professionals who become involved in the debt transaction as a result of a bid submitted in a widely and publicly advertised competitive sale conducted using an industry standard, electronic bidding platform are not subject to this disclosure. No disclosure is required that would violate any rule or regulation of professional conduct.

VIII. Statutory Debt Limit

THDA shall not issue bonds and notes in an aggregate principal amount that at any one time exceeds the statutory debt limit established in TCA Section 13-23-121. No less than annually, THDA staff shall assess THDA’s potential of reaching this limit within a 24 month period following the assessment. THDA staff shall communicate this assessment to the BFC and Board.

IX. Schedule of Financing

Pursuant to TCA Section 13-23-120(e), THDA shall submit a Schedule of Financing to the State Funding Board, prior to the beginning of each fiscal year of the State. The Schedule of Financing will be THDA’s best estimate of the financings required for the upcoming fiscal year and will contain the required information as set forth in the statute. The Schedule of Financing will contain assumptions as necessary to understand the proposed financings and resources.

X. Bond Issue Planning, Method of Sale, Structuring, and Execution

THDA’s general strategy is to determine the par amount of bonds to be issued based on financing three to four months of mortgage loan production and the availability of refunding opportunities. However, the size and timing of a particular bond issue may vary depending on mortgage loan production levels, other programmatic requirements or current market conditions.

Before a bond issue is authorized, THDA staff will monitor mortgage loan production, available resources, and market conditions and provide such information to Financial Advisor and the Office of State and Local Finance. When it is determined that authorization of a new bond issue is appropriate, whether for a new bond issue or an economic refunding, THDA staff in coordination with the Assistant Secretary of the BFC will prepare all authorizing documentation and circulate such documentation, along with necessary documentation from Bond Counsel and Financial Advisor, to the BFC and the Board. The Financial Advisor will prepare memoranda containing information about market conditions and various recommendations, including method of sale and possible bond issue size. All authorizing documentation and memoranda, including, without limitation, a Plan of Financing which shall specify the expected costs of issuance, capitalized interest, interest rates, redemption terms, and all other items required by TCA Section 13-23-120(e)(4), will be submitted to the Board and BFC. Following approval of a Plan of Financing by the BFC and authorization of a debt issuance by the Board, the BFC will be authorized to proceed with the sale of debt obligations on behalf of THDA.

5

Since 2002, THDA debt issuance has occurred via negotiated sale. THDA, however, intends to consider the method of sale for each debt issuance on a case by case basis with consideration of a number of factors, including without limitation, the following factors:

• Complexity of the transaction, including whether the debt issuance incorporates structured bond components (such as planned amortization class bonds) and, generally, more complex redemption features.

• Including AMT or taxable components.

• Complexity of credit features, including multiple collateral pools and detailed loan portfolio histories, performance, and mortgage insurance characteristics.

• Importance of retail sales and institutional pre-marketing as part of the marketing plan.

• Volatility of bond market and other market conditions.

• Degree of investor concern about housing-backed transactions – especially secured by “whole loans.”

• Confidence in the rating agencies’ ability to evaluate structured credits.

While the above factors may favor negotiated sales, THDA reserves the right to consider the use of competitive sales at any time on a case by case basis. The determination of method of sale shall rest with the BFC with advice and recommendations from THDA staff, the Office of State and Local Finance staff and the Financial Advisor.

Before pricing, THDA staff and the Office of State and Local Finance staff will consider bond structure options prepared by the Financial Advisor and recommend the bond structure determined to be most beneficial to THDA based on bond yield, programmatic considerations and other financial considerations. The Office of State and Local Finance staff will informally circulate the recommended bond structure to BFC members individually and, with THDA staff and Financial Advisor, address issues or concerns raised. Thereafter, THDA staff, Office of State and Local Finance staff, Bond Counsel and Financial Advisor will carry out the pricing process, either competitive or negotiated, as determined by the BFC.

The Financial Advisor will clearly communicate the benefits and risks of each bond type used in the bond structure options. The THDA staff and the Office of State and Local Finance staff will consult with Financial Advisor, and the bookrunning senior manager for negotiated sales, to determine a pricing strategy designed to yield the best results given the then current market conditions.

For negotiated sales, the pricing will generally be handled by conference calls involving THDA staff, Office of State and Local Finance staff, Financial Advisor, as well as Bond Counsel and underwriters, as appropriate. THDA staff and the Office of State and Local Finance staff, with the advice of Financial Advisor, will have primary responsibility for making pricing determinations to be presented to the BFC for approval. The Financial Advisor will provide THDA staff and the Office of State and Local Finance staff with summary information regarding all pertinent aspects of a financing and will make specific recommendations regarding the acceptance of a pricing. This information, along with all other pertinent pricing documents, will be submitted to the BFC, which shall meet to consider approval of the debt sale. If the pricing is approved by the BFC, the results will be communicated to the Board. A formal post-sale analysis will be prepared by the Financial Advisor and reviewed with the BFC. The post-sale analysis shall include sufficient information to permit the BFC to judge the performance of the underwriters.

6

XI. Investment of Proceeds

The proceeds of each THDA bond issue shall be invested as provided in each series resolution applicable to a particular debt issuance, the relevant general resolution under which the debt issuance occurred, applicable state law, and the Tennessee Housing Development Agency Investment Policy dated September 14, 1993, as amended.

XI.XII. Debt Issuance Review

The Financial Advisor will prepare a report in cooperation with THDA staff and the Office of State and Local Finance staff that shows the results of THDA’s debt issuance and the performance of underwriters to be reviewed by the BFC on no less than an annual basis.

XII.XIII. Initial and On-going Federal Compliance

THDA staff will work with Bond Counsel and Financial Advisor to ensure initial bond offerings comply with all applicable federal laws and program requirements. The THDA Executive Director, working with this group will be responsible for continued compliance with such federal laws and program requirements including, among other things, post issuance compliance, arbitrage rules, 10 Year and 32 Year rules, maintenance of records, and continuing disclosure requirements.

Secondary Market Disclosure: THDA is currently disseminating and presently intends to continue to disseminate information relating to its various single-family mortgage revenue bonds in accordance with the quarterly secondary market disclosure project sponsored by the National Council of State Housing Agencies. THDA has filed quarterly reports, beginning with the quarter ending June 30, 1994, with each then nationally recognized municipal securities information repository and currently with the MSRB through its Electronic Municipal Market Access (“EMMA”) system. THDA also expects that its official statements, which contain audited financial information about THDA, with respect to debt issued under the General Residential Finance Program Bond Resolution (“2013 General Resolution”), the General Homeownership Program Bond Resolution (“1985 General Resolution”), and the General Housing Finance Resolution (“2009 General Resolution”) will be filed with the MSRB through its EMMA system if and when debt is so issued. It is the present intent of THDA to continue making voluntary secondary market disclosure as described above.

Continuing Disclosure Undertaking: THDA shall include in each series resolution applicable to a particular debt issuance a continuing disclosure undertaking designed to meet the requirements of SEC Rule 15c2-12 (“Rule”), if and to the extent required by the Rule. Thereafter, THDA shall meet its continuing disclosure undertaking and comply with the Rule. Bond Counsel shall provide necessary guidance regarding requirements to be met and compliance with the Rule.

XIII.XIV. Short-Term Financings

Depending on market conditions, the availability of liquidity, or Board-approved housing programs, THDA may borrow funds on a short-term basis from a bank or other financial institution or entity. Before any such undertaking, THDA staff and the Office of State and Local Finance staff, together with Financial Advisor and Bond Counsel, as needed, will consult to determine the feasibility of such short-term borrowings and present to the BFC and Board the benefits, risks, and impact of such short-term borrowings. In connection with short term financings, the Board may establish guidelines pursuant to which the Executive Director may cause THDA to enter into any such short-term borrowing.

Any such borrowing may be secured by collateral consisting of mortgage loans or other assets of THDA to be specifically pledged thereto, but may not be secured by the general obligation of THDA or be evidenced by a bond or note, unless approved by resolution of the Board. The BFC and Board

7

shall approve the principal amount of such borrowings that may be outstanding at any one time. Tennessee law as set forth in TCA Section 13-23-121 will determine if any short-term borrowings will count against THDA’s statutory debt limit.

XIV.XV. Types of Bonds

Pursuant to TCA Section 13-23-115(15), THDA is authorized to borrow money and to enter into debt for its authorized purposes. THDA debt may include bonds or notes which may be tax-exempt or taxable and secured by the general obligation of THDA, by specific revenues of THDA, by any combination thereof, or as may otherwise be provided in TCA Section 13-23-120(b). Under TCA Section 13-23-120(b), THDA may issue such types of bonds or notes as it may determine, including without limitation, the following:

1. Serial Bonds mature in such manner that principal amounts become due and payable on specified dates, usually every 6 or 12 months. Serial Bonds are Bonds of an issue in which some Bonds mature in successive years without interruption. Generally, Serial Bonds comprise the first 8 to 12 years of a bond issue and are sold to private individuals (retail).

2. Term Bonds come due in a single maturity at intervals of greater than one year after the last Serial Bond’s maturity and usually comprise a large part of each particular issue. The Issuer usually agrees to make periodic payments into a sinking fund for mandatory annual or semiannual redemption of a portion of the Term Bonds before maturity or for payment at maturity. A housing Bond issue is generally structured with an intermediate Term Bond maturity around year 20 and a final Term Bond maturity in year 32 of the issue; other Term Bond maturities are often added which are designed at the request of major purchasers.

3. Floating (Variable) Rate Demand (“Lower Floater”) Bonds are Bonds which bear interest at a floating rate, usually set every week by an investment banker (as remarketing agent) at the fair market rate for seven–day–maturity debt. Such Bonds can normally be tendered by the owner (strictly at its option) to a tender agent (usually the trustee) at par after giving seven days’ notice; the Bonds are then remarketed to new investors by the investment banker, as remarketing agent. A bank typically agrees to buy tendered Bonds if they cannot be otherwise sold to new investors. These Floating Rate Demand Bonds are usually sold to money market funds.

4. Current Interest Bonds (“CIBs”) are the most common type of housing Bonds. Interest is paid every six months until the Bond matures or is retired early from optional or mandatory redemption.

5. Zero Coupon Bonds

a. Capital Appreciation Bonds (“CABs”). Payment of the semiannual interest is deferred until maturity or redemption with Capital Appreciation Bonds. The payment made at maturity or on the redemption date consists of principal and compounded semiannual interest. CABs are sold to investors at a large discount and accrete to par value at maturity.

b. CAB Converters. Interest on CAB Converters is deferred and semiannually until the Conversion Date—the date when the Bond converts to a current interest paying Bond and thereafter interest is earned and paid semiannually on the accreted value.

c. CABs and CAB Converters both reduce interest cost by enabling the issue to be structured with lower interest rate Serial Bonds in the early years. Zero Coupon Bonds are sometimes priced at higher yields than Current Interest Bonds of the same maturity and generally require higher fees to bond salesmen to be effectively marketed.

8

6. Original Issue Premium Bonds are fixed rate Bonds (sometimes PAC Bonds) sold at a price greater than 100% of their par value (the “premium”). The interest rates on Premium Bonds are somewhat higher than the rates on comparable Bonds sold at 100% of their par value, but when the premium is taken into account, the effective interest cost to the Issuer is less than the interest cost on a traditional Bond.

7. Original Issue Discount (“OID”) Bonds are Term Bonds sold at a price less than 100% of their initial par value. They are sold at a slightly lower yield and are used as a marketing device to institutional investors. OIDs sometimes require an Issuer contribution to the cash flows. They are rarely used for single–family Bonds due to the risk of early redemption at par from unexpended proceeds and prepayments.

8. Super Sinker Bonds are term Bonds which are redeemed before any other maturity from mortgage prepayments and, occasionally, excess revenues. While a super sinker will have a stated maturity of 10 to 20 years, the average life of a super sinker at 100% of the FHA mortgage prepayment experience will be approximately three to five years. A super sinker provides other Bonds in the issue with limited call protection because the super sinker is redeemed first. Super sinkers are priced at a lower yield than a regular Bond of the same stated maturity and are priced off their average life as opposed to their stated maturity. Super sinkers also require special rating agency cash flow stress tests. If the Bond issue receives prepayments at a rate less than 100% of the FHA experience, the actual average life of the Super Sinker Bonds will be extended. This average life risk is borne by the buyers of the Super Sinkers.

9. Planned–Amortization Class Bonds (“PACs”), typically used only in a single family issue, are a type of Super Sinker Bonds in that they are the first Bonds within the Bond issue to be called from mortgage prepayments, but unlike Super Sinkers there is a limit on how quickly they can be redeemed. PACs may also have a stated maturity of 10 to 30 years, but based on a specified Securities Industry and Financial Markets Association (“SIFMA”) mortgage prepayment speed, their average life is approximately three to five years. PACs are priced at a lower yield than a regular Bond of the same stated maturity and are priced off their average life as opposed to their stated maturity. If the average life is determined at a percentage of the SIFMA prepayment rates, prepayments above that amount are allocated to redeem Bonds other than the PAC Bonds. If the bond issue receives prepayments at a rate less than the predetermined SIFMA rate, the actual average life of the PAC Bonds will be extended. However, if the prepayments are higher than the predetermined of the SIFMA rate, the average life is not reduced. Thus, the average life of the PAC is less volatile than for Super Sinker Bonds, and, as a result, investors are willing to accept a slightly lower yield.

10. Convertible Option Bonds (“COBs”) are marketed for an initial short–term period (usually six to 12 months) and may, at the Issuer’s option, be reoffered or converted into additional short–term remarketings or converted and remarketed or refunded as long–term, fixed rate Serial and Term Bonds. The interest on COBs converts from a short–term interest rate to a long–term interest rate on the conversion date. The single–family mortgage rates are also determined upon a conversion date. Conversion dates occur upon predetermined dates or upon the occurrence of certain events. Until the conversion date, Bond proceeds are invested in securities or a guaranteed investment contract and are not available for the purchase of loans until the COB is remarketed or refunded. COBs are used by the Issuer to preserve single–family bonding authority from loss due to various legal reasons. However, federal tax law changes in 1997 eliminated many of the tax advantages of COBs and have resulted in the increased use of short–term (one– to two–year) notes which are then simply refunded by long–term bonds instead of being “converted” to long–term Bonds.

11. Call Protected Bonds (Lockout Bonds), typically used only in a single family issue, are protected from early redemption for a specified period, usually five or 10 years. The Issuer agrees to not call these Bonds from prepayments or excess revenues for a specified number of years. The investor will generally accept a lower yield for these Call Protected Bonds. This structure reduces the

9

prepayment call risk borne by the investor (Bonds may otherwise be called earlier than their stated maturity because of mortgage prepayments), and thus results in lower Bond rates.

12. Other Bonds, other bonds may be included in the structure of any bond issue at the discretion of BFC and the Board.

XV.XVI. Refundings

THDA staff, together with Office of State & Local Finance staff, Financial Advisor and Bond Counsel, shall regularly analyze outstanding bond issues for refunding opportunities and shall evaluate refunding proposals submitted by underwriters. The Financial Advisor shall analyze outstanding bond issues at least semiannually and report to THDA staff and Office of State & Local Finance staff if a potential refunding issue appears viable. The applicable provisions of this Policy shall apply to a refunding bond issue in a similar manner as set forth herein for a bond issue designed to produce proceeds for THDA mortgage loan programs.

The following issues shall be considered in connection with evaluating refunding opportunities:

Whether a refunding results in an aggregate present value savings deemed sufficient by the BFC; or

Whether a refunding is necessary due to a change in tax status of the bonds; or

Whether a refunding is necessary to further THDA program objectives; or

Whether a refunding is necessary to preserve volume cap; or

Whether a refunding results in a reduction of the State’s moral obligation pledge with respect to THDA debt obligations.

Refunding bonds will be structured to meet then applicable Code requirements and to provide maximum benefit within the general resolution under which the refunding bonds are to be issued.

XVI.XVII. Redemptions

To the extent THDA has discretion to redeem bonds and select the maturities and issues to be redeemed, THDA will first redeem those bonds bearing the highest interest rate; however, due to universal cap considerations, THDA will call term bonds on a pro-rata basis within bond issues or redeem the highest coupon serial bonds when the result will be to reduce debt service requirements. When making a redemption decision, THDA will consider, among other applicable things, (i) restrictions or limitations imposed by the Code including, but not limited to, 10-year rule requirements and universal cap considerations; (ii) limitations or restrictions imposed by THDA resolutions including, but not limited to, redemption provisions; (iii) economic considerations; (iv) cash flow requirements; and (v) the amount of prepayments and other monies available to THDA for optional redemption of Bonds.

XVII.XVIII. Transparency

THDA shall comply with state and federal legal requirements for notice and for public meetings related to debt issuance. In the interest of transparency, all costs (including interest, issuance, continuing, and one-time) shall be disclosed to the BFC and Board in a timely manner. In connection with each THDA bond issue, THDA staff shall complete and file with the Office of State and Local Finance the most current version of the required Report on Debt Obligation (State Form CT-0253) (“Report”) and shall present such Report to the BFC and the Board at public meetings within the required time periods to meet this disclosure obligation.

10

XVIII.XIX. Interest Rate and Forward Purchase Agreements

Pursuant to TCA Section 13-23-120(a)(2) and (3), THDA is authorized to enter into interest rate and forward purchase agreements. At such time as the BFC and Board determine it is in the best interest of THDA to enter into such agreements, appropriate amendments to this Policy will be considered and submitted to the BFC and Board for consideration and approval.

XIX.XX. Conduit Debt

For purposes of this section, a “conduit bond issue” is a bond issue in which the obligation of THDA as the issuer to pay principal of and interest on the bonds is limited to the payments it receives from a private third-party under a loan relating to revenues derived from the facilities financed or other assets of the third-party borrower. At such time as the BFC and Board determine it is in the best interest of THDA to enter into such financing agreements, appropriate amendments to this Policy will be considered and submitted to the BFC and Board for consideration and approval.

XX.XXI. Variable Rate Debt

At such time as the BFC and Board determine it is in the best interest of THDA to enter into variable rate debt, appropriate amendments to this Policy will be considered and submitted to the BFC and Board for consideration and approval.

XXI.XXII. Taxable Debt

At such time as the BFC and Board determine it is in the best interest of THDA to enter into taxable debt, appropriate amendments to this Policy will be considered and submitted to the BFC and Board for consideration and approval.

XXII.XXIII. State Moral Obligation Pledge

All THDA debt currently outstanding under the 1985 General Resolution is secured by, among other things, the moral obligation pledge of the State of Tennessee. It is THDA’s present intent to issue future debt obligations under the 2009 General Resolution or the 2013 General Resolution, neither of which carry the State’s moral obligation pledge. In the event THDA creates additional resolutions under which debt obligations are sold, such resolutions are expected to not carry the State’s moral obligation pledge. It is also THDA’s present intent to evaluate, in connection with each debt issuance, whether debt obligations outstanding under the 1985 General Resolution are eligible for refunding to, among other things, remove additional debt obligations from the State’s moral obligation pledge.

XXIII.XXIV. Adoption and Amendment

This Policy was considered by the BFC at its meeting on November 28, 2011, and approved by the Board at its meeting on November 29, 2011. This aAmendments to the Policy werewas considered by the BFC at its meeting on July 28, 2014, and on May 23. 2016, and approved by the Board at its meeting on July 29, 2014, and on May 24, 2016. The Policy shall be reviewed at least annually by the BFC at the time of consideration of the Schedule of Financing. Any amendments shall be considered and approved in the same process as the initial adoption of this Policy.

Tennessee Housing l)evelopment AgencyAndrew Jackson Building, Third Floor


Bill HaslamGovernor


MEMORANDUMDATE: May 11,2016

TO: Bond Finance CommitteeBoard of Directors

FROM: Lynn E. Miller, Chief Legal Counsel

SUBJECT: Issue 2016-1 State Form CT-0253 DRAFT (the "State Form")

Attached please find the draft State Form for Issue 2016-1 that priced on April 13,2016, and is scheduled to closeMay 1 8, 2016. All of the invoices have not been received. The State Form must be filed with the Office of theComptroller no later than July I , 201 6. We will file a final form once all invoices are received and circulate a copyto the full Board.

The form, with attachments, provides basic information including maturity dates, amounts and interest rates forthe bonds. It also shows the costs associated with the transaction in Item I I of the form. These costs are consistentwith costs of prior transactions and, in general, are on the lower end of costs for the industry.

The chart below compares fee and expense information received to date for the current bond issues and the threeprior bond issues.

Fees/Expensesr Paid To:$125,000,000Issue 2016-1

$175,000,000Issue 2015-2

$ 150,000,000Issue 20i5-l

$ 163,850,000Issue 2015-A

Financial Advisor $ 70,000 $ 47,500 $ 60,000 $ 70.000

Bond Counsel 35,000 35,000 3s,000 35,000

Trustee 8,750 7,500 8,1 93

Bookrunning Underwriter 759.203 l,043,590 900, I 53 994,414

Moody's 91,500 87,000 8s.500

Standard & Poor's 75,000 62.500 nlai-Deal I.500 1,500 1,500

General Services Print Shop 1,250 1,244 1,216

Total Fees/ExpensesPer Bond Issue

$ 1,304,090 $ 1,1 54,897 $ 1,195,823

l. rounded to the nearest $

If you have questions, please call me at 615-815-2025 or by email at [email protected]

LEM/ds

Attachment

l^A\


Draft$

$

%

TIC NIC

Variable: Index plus

Variable: Remarketing Agent

Other:

CON

GAN

Bond Loan Agreement Capital Lease

Standard & Poor's

%

%

%

%

%

Loan Program

General Government

(Pursuant to Tennessee Code Annotated Section 9‐21‐151)

REPORT ON DEBT OBLIGATION

Unrated

FitchMoody's

Dated Date: Issue/Closing Date:

8. Type of Sale:

Competitive Public Sale

Negotiated Sale

Informal Bid

Interfund Loan

9. Date:

TaxableTax‐exempt

4. Debt Obligation:

TRAN

3. Interest Cost:

basis points; or

If any of the notes listed above are issued pursuant to Title 9, Chapter 21, enclose a copy of the executed note

with the filing with the Office of State and Local Finance (“OSLF”).

BAN

RAN

CRAN

Page 1 of 3

If disclosing initially for a program, attach the form specified for updates, indicating the frequency required.

1. Public Entity:

2. Face Amount:

Debt Issue Name:

Name:

Address

State Form No. CT‐0253

Revised Effective 1/1/14

Premium/Discount:

General Obligation + Revenue/Tax

Other (Describe):

5. Ratings:

BRIEF DESCRIPTION

7. Security:

General Obligation

Revenue

Annual Appropriation (Capital Lease Only)

6. Purpose:

Refunding/Renewal

Other

Utilities

Education

Tax Increment Financing (TIF)

Draft

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

AMOUNT

$

$

Bond Counsel $

Issuer’s Counsel $

Trustee’s Counsel $

Bank Counsel $

Disclosure Counsel $

________________________ $

$

$

$

$

$

$

$

$

Take Down $

Management Fee $

Risk Premium $

Underwriter’s Counsel $

Other expenses $

$

$

$

Sponsorship/Referral Fee $

$

$

Legal Fees

Financial Advisor Fees

Paying Agent Fees

Underwriter’s Discount ________%

Trustee Fees

Remarketing Agent Fees

Liquidity Fees

Rating Agency Fees

Credit Enhancement Fees

Bank Closing Costs

(Round to nearest $)

Amount

Registrar Fees

11. Cost of Issuance and Professionals:

No costs or professionals

* This section is not applicable to the Initial Report for a Borrowing Program.

Printing and Advertising Fees

Issuer/Administrator Program Fees

Real Estate Fees

Year Year

If more space is needed, attach an additional sheet.

Amount

Interest

Rate

Interest

Rate

If (1) the debt has a final maturity of 31 or more years from the date of issuance, (2) principal repayment is delayed for two or more years, or (3) debt service

payments are not level throughout the retirement period, then a cumulative repayment schedule (grouped in 5 year increments out to 30 years) including this and all

other entity debt secured by the same source MUST BE PREPARED AND ATTACHED. For purposes of this form, debt secured by an ad valorem tax pledge and debt

secured by a dual ad valorem tax and revenue pledge are secured by the same source. Also, debt secured by the same revenue stream, no matter what lien level, is

considered secured by the same source.

TOTAL COSTS



10. Maturity Dates, Amounts and Interest Rates *:

Page 2 of 3

FIRM NAME

Other Costs ____________________

REPORT ON DEBT OBLIGATION(Pursuant to Tennessee Code Annotated Section 9‐21‐151)

Draft

AMOUNT(Basis points/$)

None Prepared

EMMA link or

Copy attached

Yes No

Yes No

Yes No

Date of Letter of Compliance for derivative

Yes No

To the Governing Body: on

Copy to Director to OSLF: on either by:

Mail to: OR

Name

Title

Firm

Email

Date

13. Disclosure Document / Official Statement:

REPORT ON DEBT OBLIGATION

Page 3 of 3

Governing Body’s approval date of the current version of the written derivative management policy

AUTHORIZED REPRESENTATIVE PREPARER

18. Signatures:

Email to:[email protected] Deaderick Street, Suite 1600

James K. Polk State Office BuildingNashville, TN 37243‐1402

17. Submission of Report:

and presented at public meeting held on

16. Written Derivative Management Policy:

No derivative

Is the derivative in compliance with and clearly authorized under the policy?

15. Written Debt Management Policy:

Governing Body’s approval date of the current version of the written debt management policy

Is the debt obligation in compliance with and clearly authorized under the policy?



Is there an existing continuing disclosure obligation related to the security for this debt?

Is there a continuing disclosure obligation agreement related to this debt?

(If different from #11)

14. Continuing Disclosure Obligations:

Liquidity / Credit Enhancement

Escrow Agent

Sponsorship / Program / Admin

(Pursuant to Tennessee Code Annotated Section 9‐21‐151)

If yes to either question, date that disclosure is due _____________________________________________

Name and title of person responsible for compliance ____________________________________________

12. Recurring Costs:

No Recurring Costs

FIRM NAME

Trustee

Remarketing Agent

Paying Agent / Registrar

Other _________________________

THDA Issue 2016-1 ATTACHMENT 1 State Form CT-0253

2. PREMIUM/DISCOUNT:

Includes the $1,655,809.20 original issue premium on the Issue 2016-1A PAC Bonds maturing January 1, 2047.

Includes the $1,176,219.20 original issue premium on the Issue 2016-1B PAC Bonds maturing January 1, 2047.


10. MATURITY DATES, AMOUNTS AND INTEREST RATES

$24,060,000 Issue 2016-1A (AMT)

$24,060,000 Term Bonds Principal Interest CUSIP Maturity Date Amount Due Rate Number(1)

January 1, 2047 (PAC) $24,060,000 3.500% 880461HR2

$100,940,000 Issue 2016-1B (Non-AMT)† $52,710,000 Serial Bonds Principal Principal Amount Due Interest CUSIP Amount Due Interest CUSIP Year January 1 Rate Number(1) July 1 Rate Number(1)

2017 $680,000 0.625% 880461HS0 $1,540,000 0.750% 880461HT8 2018 1,550,000 0.850 880461HU5 1,560,000 0.900 880461HV3 2019 1,570,000 1.000 880461HW1 1,580,000 1.100 880461HX9 2020 1,595,000 1.200 880461HY7 1,605,000 1.300 880461HZ4 2021 1,620,000 1.400 880461JA7 1,635,000 1.500 880461JB5 2022 1,650,000 1.650 880461JC3 1,670,000 1.750 880461JD1 2023 1,690,000 1.850 880461JE9 1,710,000 1.950 880461JF6 2024 1,730,000 2.000 880461JG4 1,750,000 2.050 880461JH2 2025 1,775,000 2.200 880461JJ8 1,800,000 2.250 880461JK5 2026 1,825,000 2.350 880461JL3 1,855,000 2.400 880461JM1 2027 1,880,000 2.500 880461JN9 1,910,000 2.550 880461JP4 2028 1,940,000 2.600 880461JU3 1,975,000 2.600 880461JV1 2029 2,010,000 2.700 880461JW9 2,045,000 2.700 880461JX7 2030 2,085,000 2.850 880461JY5 2,120,000 2.850 880461JZ2 2031 2,160,000 2.950 880461KA5 2,195,000 2.950 880461JQ2

$48,230,000 Term Bonds Principal Interest CUSIP Maturity Date Amount Due Rate Number(1)

July 1, 2036 $24,390,000 3.250% 880461JR0 July 1, 2038 8,400,000 3.375 880461JS8 January 1, 2047 (PAC) 15,440,000 3.500 880461JT6

PRICE OF ISSUE 2016-1A BONDS DUE JANUARY 1, 2047 (PAC): 106.882%

PRICE OF ISSUE 2016-1B BONDS DUE JANUARY 1, 2047 (PAC): 107.618%

PRICE OF ALL REMAINING ISSUE 2016-1 BONDS: 100.000% ____________________ (1) The CUSIP Numbers have been assigned to this issue by an organization not affiliated with THDA and are included solely for the convenience of the bondholders.

Neither THDA nor the Underwriters shall be responsible for the selection or use of these CUSIP Numbers nor is any representation made as to their correctness on the bonds or as indicated herein.

† Interest on the Issue 2016-1B Bonds is not included in corporations’ calculations of adjusted current earnings under the alternative minimum tax provisions of the Code.

THDA Issue 2016-1Stâte Form CT-0253

13. DISCLOSUREDOCUMENT:

TENNESSEE HOUSING DEVf,,LOPMENT AGENCY

A Supplemental Resolution

Authorizing the Sale of

Residential Finance Program Bonds

$24,060,000 Issue 2016-1,{ (AMT)

$100,940,000 Issue 2016-lB (Non-AMT)

Adopted January 26,2016as amended and supplemented

by the Bond Finance CommitteeofTHDA on April 13,2016

ATTACHMENT 3

48 r4-r586-3088 3

i 4814-1586-3088.3

ARTICLE I DEFINITIONS AND AUTHORITY

Section 1.01. Short Title ........................................................................................................ 1 Section 1.02. Definitions........................................................................................................ 1 Section 1.03. Authority for this Resolution ........................................................................... 4

ARTICLE II TERMS AND ISSUANCE

Section 2.01. Issue Amount and Designation ........................................................................ 4 Section 2.02. Purposes ........................................................................................................... 4 Section 2.03. Amounts, Maturities and Interest Rates ........................................................... 4 Section 2.04. Denominations, Numbers and Letters.............................................................. 6 Section 2.05. Paying Agent .................................................................................................... 6 Section 2.06. Execution of Bonds .......................................................................................... 6 Section 2.07. Place of Payment; Record Date ....................................................................... 6 Section 2.08. Sinking Fund Redemption Provisions ............................................................. 7 Section 2.09. Optional Redemption ....................................................................................... 8 Section 2.10. Special Optional Redemption .......................................................................... 9 Section 2.11. Special Mandatory Redemptions ................................................................... 10 Section 2.12. Selection by Lot ............................................................................................. 12 Section 2.13. Purchase of Bonds by THDA or Trustee ....................................................... 12

ARTICLE III SALE AND DELIVERY

Section 3.01. Sale ................................................................................................................. 12

ARTICLE IV DISPOSITION OF PROCEEDS AND OTHER MONEYS

Section 4.01. Loan Fund; Bond Reserve Fund Requirement............................................... 12 Section 4.02. Proceeds of Issue 2016-1A Bonds ................................................................. 13 Section 4.03. Program Loan Determinations ....................................................................... 13

ARTICLE V FORM OF BONDS, AND TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Section 5.01. Form of Bonds ............................................................................................... 14 Section 5.02. Form of Trustee’s and Authenticating Agent’s Certificate of

Authentication ................................................................................................ 14

ARTICLE VI MISCELLANEOUS

Section 6.01. No Recourse Against Members or Other Persons ......................................... 15

ii 4814-1586-3088.3

Section 6.02. Bonds not Debt, Liability or Obligation of the State or the United States of America ........................................................................................... 15

Section 6.03. Delivery of Projected Cash Flow Statements ................................................ 15 Section 6.04. Authorized Officers ....................................................................................... 15 Section 6.05. Authorized Trustee......................................................................................... 16 Section 6.06. Covenant to Comply with Federal Tax Law Requirements........................... 16 Section 6.07. Continuing Disclosure Undertaking .............................................................. 16 Section 6.08. Confirmation and Adjustment of Terms by Committee ................................ 19 Section 6.09. Effective Date ................................................................................................ 19

EXHIBIT A BOND PURCHASE AGREEMENT EXHIBIT B PLANNED AMORTIZATION AMOUNTS FOR ISSUE 2016-1A PAC

BONDS, ISSUE 2016-1B PAC BONDS AND 400% PSA PREPAYMENT AMOUNT TABLE

EXHIBIT C FORM OF BOND

1 4814-1586-3088.3

A SUPPLEMENTAL RESOLUTION AUTHORIZING THE SALE OF

RESIDENTIAL FINANCE PROGRAM BONDS $24,060,000 ISSUE 2016-1A (AMT)

$100,940,000 ISSUE 2016-1B (Non-AMT)

BE IT RESOLVED by the Board of Directors of the TENNESSEE HOUSING DEVELOPMENT AGENCY (“THDA”) as follows:

ARTICLE I

DEFINITIONS AND AUTHORITY

Section 1.01. Short Title. This resolution may hereafter be cited by THDA as the Issue 2016-1 Supplemental Residential Finance Program Bond Resolution.

Section 1.02. Definitions.

(a) All terms which are defined in Section 1.2 of the resolution of THDA adopted January 29, 2013, as amended and supplemented by the Bond Finance Committee on April 18, 2013, and entitled “General Residential Finance Program Bond Resolution” (the “General Resolution”) have the same meanings in this Resolution as such terms are given in Section 1.2 of the General Resolution.

(b) In addition, as used in this Resolution, unless the context otherwise requires, the following terms have the following respective meanings:

“400% PSA Prepayment Amount” means the cumulative amount of principal prepayments on the Program Loans allocable to the Issue 2016-1 Bonds at a rate equal to 400% PSA, as set forth in Exhibit B hereto.

“Bond Purchase Agreement” means the contract for the purchase of the Issue 2016-1 Bonds between THDA and the Underwriters, in substantially the form attached hereto as Exhibit A.

“Business Day” shall mean any day except for a Saturday, Sunday or any day on which banks in Tennessee or New York are required or authorized to be closed.

“Co-Managers” means FTN Financial Capital Markets, J.P. Morgan Securities LLC, J.J.B. Hilliard, W.L. Lyons, LLC and Wells Fargo Bank, National Association.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“DTC” means The Depository Trust Company, New York, New York, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns.

2 4814-1586-3088.3

“Excess 2016-1 Principal Payments” means, as of any date of computation, 100% of all regularly scheduled principal payments and prepayments on Program Loans, or portions thereof, allocable to the Issue 2016-1 Bonds to the extent such regularly scheduled principal payments and prepayments are not required to make regularly scheduled principal payments, including Sinking Fund Payments, on the Issue 2016-1 Bonds.

“Issue 2016-1 Bonds” means, collectively, the Issue 2016-1A Bonds and the Issue 2016-1B Bonds.

“Issue 2016-1A Bonds” means the Issue 2016-1A Bonds of THDA authorized by this Resolution pursuant to the Plan of Financing.

“Issue 2016-1A PAC Bonds” means the Issue 2016-1A Bonds in the aggregate principal of $24,060,000 maturing January 1, 2047.

“Issue 2016-1A PAC Bonds Planned Amortization Amount” means the cumulative amount of Issue 2016-1A PAC Bonds expected to be redeemed upon the receipt of Excess 2016-1 Principal Payments at a rate equal to 100% PSA, as set forth in Exhibit B hereto.

“Issue 2016-1B Bonds” means the Issue 2016-1B Bonds of THDA authorized by this Resolution pursuant to the Plan of Financing.

“Issue 2016-1B PAC Bonds” means the Issue 2016-1B Bonds in the principal amount of $15,440,000 maturing January 1, 2047.

“Issue 2016-1B PAC Bonds Planned Amortization Amount” means the cumulative amount of Issue 2016-1B PAC Bonds expected to be redeemed upon the receipt of Excess 2016-1 Principal Payments at a rate equal to 100% PSA, as set forth in Exhibit B hereto.

“Issue Date” means the date on which the Issue 2016-1 Bonds are issued by THDA and delivered to the Underwriters, expected to occur on May 18, 2016.

“MSRB” means the Municipal Securities Rulemaking Board by operation of its Electronic Municipal Market Access System.

“Official Statement” means the Official Statement dated April 13, 2016 used in connection with the sale of the Issue 2016-1 Bonds.

“PAC Bonds” means, collectively, the Issue 2016-1A PAC Bonds and the Issue 2016-1B PAC Bonds.

“Preliminary Official Statement” means the Preliminary Official Statement dated April 5, 2016 used in connection with the offering of the Issue 2016-1 Bonds.

3 4814-1586-3088.3

“Rating Agency” shall mean Moody’s Investors Service, Inc. (or any successor thereto), and Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLP business (or any successor thereto).

“Refunded Bonds” means, THDA’s Homeownership Program Bonds, Issue 2006-3.

“Resolution” means this Supplemental Resolution adopted by THDA on January 26, 2016 as amended and supplemented by the Bond Finance Committee on April 13, 2016.

“Serial Bonds” means the Issue 2016-1 Bonds which are not Term Bonds.

“Term Bonds” means, collectively, the Issue 2016-1A Bonds and the Issue 2016-1B Bonds maturing July 1, 2036, July 1, 2038 and January 1, 2047.

“Transferred Investments” means amounts on deposit in certain funds and accounts of THDA allocated to the Refunded Bonds which are allocated to the Issue 2016-1 Bonds upon the refunding of the Refunded Bonds.

“Transferred Program Loans” means the Program Loans allocable to the Refunded Bonds which are allocated to the Issue 2016-1 Bonds upon the refunding of the Refunded Bonds.

“Underwriters” means, collectively, RBC Capital Markets, LLC, Citigroup Global Markets Inc., and Raymond James & Associates, Inc., their respective successors and assigns, and the Co-Managers as purchasers of the Issue 2016-1 Bonds.

(c) Unless the context otherwise indicates, words of the masculine gender will be deemed and construed to include correlative words of feminine and neuter genders, words importing the singular number include the plural number and vice versa, and words importing persons include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons.

(d) The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any similar terms as used in this Resolution refer to this Resolution and such terms used in the form of registered bond herein refer to such bonds.

(e) Unless the context otherwise indicates, the term “Program Loan” as used herein shall include Transferred Program Loans and Program Securities and the phrase “Program Loans allocable to the Issue 2016-1 Bonds” shall include the Transferred Program Loans as well as any new Program Loans and Program Securities acquired with proceeds of the Issue 2016-1 Bonds.

Section 1.03. Authority for this Resolution. This Resolution is adopted pursuant to the provisions of the Act and the General Resolution.

4 4814-1586-3088.3

ARTICLE II

TERMS AND ISSUANCE

Section 2.01. Issue Amount and Designation. In order to provide funds necessary for the Residential Finance Program in accordance with and subject to the terms, conditions and limitations established herein and in the General Resolution, Residential Finance Program Bonds, Issue 2016-1A are hereby authorized to be issued in the aggregate principal amount of $24,060,000, Residential Finance Program Bonds and Issue 2016-1B are hereby authorized to be issued in the aggregate principal amount of $100,940,000. In addition to the title “Residential Finance Program Bond,” the Issue 2016-1 Bonds will bear the additional designations “Issue 2016-1A (AMT)” and “Issue 2016-1B (Non-AMT),” as appropriate. The Issue 2016-1 Bonds shall be issued only in fully registered form. The Issue 2016-1A Bonds will consist of $24,060,000 principal amount of Term Bonds. The Issue 2016-1B Bonds will consist of $52,710,000 principal amount of Serial Bonds and $48,230,000 principal amount of Term Bonds.

Section 2.02. Purposes. The Issue 2016-1A Bonds are being issued to refund the Refunded Bonds; provided that $1,655,809.20 of the proceeds of the Issue 2016-1A Bonds will be used to make a deposit in the Bond Reserve Fund. As a result of such refunding, the Transferred Program Loans and the Transferred Investments will become allocated to the Issue 2016-1 Bonds. The Issue 2016-1B Bonds are being issued (a) to finance Program Loans, or participations therein, on single family residences located within the State, (b) if required, to pay capitalized interest on the Issue 2016-1 Bonds, (c) if required, to make a deposit in the Bond Reserve Fund, and (d) if required, to pay certain costs of issuance relating to the Issue 2016-1 Bonds.

The proceeds of the Issue 2016-1 Bonds and the Transferred Investments shall be applied in accordance with Article IV hereof.

Section 2.03. Amounts, Maturities and Interest Rates.

(a) The Issue 2016-1 Bonds will mature on the dates, in the principal amounts and bear interest from their Issue Date, calculated on the basis of a 360-day year of twelve 30-day months, payable semi-annually on each January 1 and July 1, commencing January 1, 2017, at the rate set opposite such date in the following tables:

Issue 2016-1A (AMT)

Term Bonds

Maturity Date

Principal Amount

Interest Rate

January 1, 2047 (PAC) $24,060,000 3.500%

5 4814-1586-3088.3

Issue 2016-1B (Non-AMT) Serial Bonds

Maturity Date

Principal Amount

Interest Rate

Maturity Date

Principal Amount

Interest Rate

January 1, 2017 $680,000 0.625% July 1, 2024 $1,750,000 2.050% July 1, 2017 1,540,000 0.750 January 1, 2025 1,775,000 2.200 January 1, 2018 1,550,000 0.850 July 1, 2025 1,800,000 2.250 July 1, 2018 1,560,000 0.900 January 1, 2026 1,825,000 2.350 January 1, 2019 1,570,000 1.000 July 1, 2026 1,855,000 2.400 July 1, 2019 1,580,000 1.100 January 1, 2027 1,880,000 2.500 January 1, 2020 1,595,000 1.200 July 1, 2027 1,910,000 2.550 July 1, 2020 1,605,000 1.300 January 1, 2028 1,940,000 2.600 January 1, 2021 1,620,000 1.400 July 1, 2028 1,975,000 2.600 July 1, 2021 1,635,000 1.500 January 1, 2029 2,010,000 2.700 January 1, 2022 1,650,000 1.650 July 1, 2029 2,045,000 2.700 July 1, 2022 1,670,000 1.750 January 1, 2030 2,085,000 2.850 January 1, 2023 1,690,000 1.850 July 1, 2030 2,120,000 2.850 July 1, 2023 1,710,000 1.950 January 1, 2031 2,160,000 2.950 January 1, 2024 1,730,000 2.000 July 1, 2031 2,195,000 2.950

Term Bonds

Maturity Date

Principal Amount

Interest Rate

July 1, 2036 $24,390,000 3.250% July 1, 2038 8,400,000 3.375 January 1, 2047 (PAC) 15,440,000 3.500

(b) Whenever the due date for payment of interest on or principal of the Issue

2016-1 Bonds or the date fixed for redemption of any Issue 2016-1 Bond shall be a day which is not a Business Day, then payment of such interest, principal or Redemption Price need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the due date for payment of principal, interest or Redemption Price and no additional interest shall be payable on such Business Day which, merely by operation of this paragraph, may have accrued after the original due date.

Section 2.04. Denominations, Numbers and Letters.

(a) The Issue 2016-1 Bonds of each series maturing in each year are to be issued in denominations of $5,000 or any integral multiple thereof not exceeding the aggregate principal amount of Issue 2016-1 Bonds of each series maturing in such year.

6 4814-1586-3088.3

The Issue 2016-1 Bonds are to be lettered “RA” or “RB,” as applicable, and numbered separately from 1 consecutively upwards.

(b) The Issue 2016-1 Bonds, when issued, will be registered in the name of Cede & Co., as nominee of DTC. Only one Issue 2016-1 Bond will be outstanding for each maturity and interest rate of each series of the Issue 2016-1 Bonds in the aggregate principal amount of such maturity, interest rate and series. Subject to the provisions of the General Resolution, purchases of ownership interests in the Issue 2016-1 Bonds will be made in book-entry form only in authorized denominations set forth in Section 2.04(a). Beneficial owners of the Issue 2016-1 Bonds will not receive certificates representing their interest in the Issue 2016-1 Bonds. So long as Cede & Co. shall be the registered owner of the Issue 2016-1 Bonds, THDA will deem and treat Cede & Co. as the sole and exclusive owner of the Issue 2016-1 Bonds and THDA will have no responsibility to any DTC participant or beneficial owner thereof.

Section 2.05. Paying Agent. The Trustee is hereby appointed as paying agent for the Issue 2016-1 Bonds pursuant to Section 11.2 of the General Resolution. The Trustee may appoint an agent for presentation of transfers in New York, New York and DTC may act as such agent.

Section 2.06. Execution of Bonds. The Issue 2016-1 Bonds shall be executed by the manual or facsimile signature of the Chairperson or Vice Chairperson and the seal of THDA or a facsimile thereof shall be imprinted, impressed or otherwise reproduced on the Issue 2016-1 Bonds and attested by the manual or facsimile signature of the Executive Director or Secretary of THDA. The Issue 2016-1 Bonds shall be delivered to the Trustee for proper authentication and delivered to DTC pursuant to the DTC FAST delivery program, as the registered owner of the Issue 2016-1 Bonds upon instructions from THDA to that effect.

Section 2.07. Place of Payment; Record Date. While the Issue 2016-1 Bonds are registered in book-entry only form in the name of Cede & Co. as nominee of DTC, payments of principal, Redemption Price and interest on the Issue 2016-1 Bonds shall be made in accordance with the procedures of DTC. In the event the Issue 2016-1 Bonds are no longer held in book-entry only form, the principal and Redemption Price of all Issue 2016-1 Bonds shall be payable at the designated corporate trust office of the Trustee. Interest on the Issue 2016-1 Bonds will be paid by check mailed by the Trustee to the registered owner thereof. Any registered owner of the Issue 2016-1 Bonds in a principal amount equal to or exceeding $1,000,000 may receive payments of interest by wire transfer if written notice is given to the Trustee at least ten Business Days before an applicable Interest Payment Date. The Record Date for payment of interest on the Issue 2016-1 Bonds shall be the 15th day of the month next preceding an Interest Payment Date.

Section 2.08. Sinking Fund Redemption Provisions.

(a) The Issue 2016-1 Bonds that are Term Bonds are subject to redemption in part by lot on the dates set forth below for such maturity of Issue 2016-1 Bonds at a Redemption Price equal to 100% of the principal amount thereof from mandatory Sinking Fund Payments in the principal amounts for each of the dates set forth below:

7 4814-1586-3088.3

Issue 2016-1A Term Bonds due January 1, 2047

Maturity Date

Amount Due

Maturity Date

Principal Amount

January 1, 2039 $1,315,000 July 1, 2043 $1,540,000 July 1, 2039 1,340,000 January 1, 2044 1,565,000 January 1, 2040 1,365,000 July 1, 2044 1,595,000 July 1, 2040 1,385,000 January 1, 2045 1,620,000 January 1, 2041 1,410,000 July 1, 2045 1,650,000 July 1, 2041 1,435,000 January 1, 2046 1,680,000 January 1, 2042 1,460,000 July 1, 2046 1,695,000 July 1, 2042 1,485,000 January 1, 2047* 10,000 January 1, 2043 1,510,000

*Maturity

Issue 2016-1B Term Bonds due July 1, 2036

Maturity Date

Amount Due

Maturity Date

Principal Amount

January 1, 2032 $2,235,000 July 1, 2034 $2,460,000 July 1, 2032 2,280,000 January 1, 2035 2,505,000 January 1, 2033 2,320,000 July 1, 2035 2,555,000 July 1, 2033 2,365,000 January 1, 2036 2,605,000 January 1, 2034 2,410,000 July 1, 2036* 2,655,000

*Maturity

Issue 2016-1B Term Bonds due July 1, 2038

Maturity Date

Amount Due

Maturity Date

Principal Amount

January 1, 2037 $2,675,000 January 1, 2038 $1,880,000 July 1, 2037 1,935,000 July 1, 2038* 1,910,000

*Maturity

8 4814-1586-3088.3

Issue 2016-1B Term Bonds due January 1, 2047

Maturity Date

Amount Due

Maturity Date

Principal Amount

January 1, 2039 $855,000 July 1, 2043 $1,000,000 July 1, 2039 870,000 January 1, 2044 1,020,000 January 1, 2040 885,000 July 1, 2044 1,035,000 July 1, 2040 900,000 January 1, 2045 1,005,000 January 1, 2041 915,000 July 1, 2045 1,020,000 July 1, 2041 935,000 January 1, 2046 1,040,000 January 1, 2042 950,000 July 1, 2046 1,050,000 July 1, 2042 965,000 January 1, 2047* 10,000 January 1, 2043 985,000

*Maturity

(b) Upon the purchase or redemption of Issue 2016-1 Bonds of any series and maturity for which Sinking Fund Payments have been established other than by application of Sinking Fund Payments, each future Sinking Fund Payment for such Issue 2016-1 Bonds of such series and maturity will be credited by an amount bearing the same ratio to such Sinking Fund Payment as the total principal amount of such Issue 2016-1 Bonds of such series and maturity to be purchased or redeemed bears to the total amount of all Sinking Fund Payments for such series and maturity of Issue 2016-1 Bonds, unless otherwise directed by THDA in accordance with the General Resolution.

Section 2.09. Optional Redemption. The Issue 2016-1 Bonds maturing on and after January 1, 2026 other than the PAC Bonds, are subject to redemption at the option of THDA prior to their respective maturities, either as a whole or in part at any time, on or after July 1, 2025 (any such date to be determined by THDA or selected by the Trustee subject to the provisions of and in accordance with the General Resolution, and when so determined or selected will be deemed and is hereby set forth as the redemption date), upon notice as provided in Article VI of the General Resolution, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued interest to the date of redemption.

The PAC Bonds are subject to redemption at the option of THDA, either as a whole or in part at any time or on or after July 1, 2025 (any such date to be determined by THDA or selected by the Trustee subject to the provisions of and in accordance with the General Resolution, and when determined or selected will be deemed and is hereby set forth as the redemption date), upon notice as provided in Article VI of the General Resolution, at the respective Redemption Prices set forth below (expressed as a percentage of the principal amount of such PAC Bonds to be redeemed), plus accrued interest to the redemption date:

9 4814-1586-3088.3

Period Issue 2016-1A PAC Bond Redemption Price

Issue 2016-1B PAC Bond Redemption Price

July 1, 2025 to December 31, 2025 101.128 % 101.237% January 1, 2026 to June 30, 2026 100.809 100.882 July 1, 2026 to December 31, 2026 100.728 100.803 January 1, 2027 and thereafter 100.000 100.000

Section 2.10. Special Optional Redemption. The Issue 2016-1 Bonds are subject to redemption, at the option of THDA, as a whole or in part at any time prior to maturity, in accordance with the provisions of the General Resolution in an amount equal to amounts available for such purpose from (i) proceeds of the Issue 2016-1 Bonds not expected to be applied to the financing of Program Loans, (ii) repayments and prepayments of Program Loans allocated to the Issue 2016-1 Bonds not otherwise required to be applied to the special mandatory redemption of the Issue 2016-1 Bonds as described in Sections 2.11(b) or 2.11(c) hereof or to make regularly scheduled principal payments, including Sinking Fund Payments, on the Issue 2016-1 Bonds, (iii) repayments and prepayments of Program Loans made with the proceeds of any other Bonds issued under the General Resolution, subject to limitations contained in the Code, (iv) other amounts on deposit in the Revenue Fund in excess of the amounts required for the payment of Debt Service and Program Expenses, and (v) amounts on deposit in the Bond Reserve Fund in excess of the Bond Reserve Requirement; provided however, that the PAC Bonds (A) are only subject to redemption as described in clause (ii) above as described in Section 2.11(b) hereof, (B) shall not be subject to redemption as described in clauses (iii), (iv) and (v) above if such redemption would cause amortization of a PAC Bond to exceed the related Planned Amortization Amount and (C) shall be redeemed on a pro rata basis to the extent of any special optional redemption.

The date of redemption pursuant to this Section 2.10 shall be determined by the Trustee upon the direction of THDA subject to the provisions of and in accordance with the General Resolution (and when so determined such date will be deemed and is hereby set forth as the redemption date). The Issue 2016-1 Bonds to be so redeemed shall be redeemed at a Redemption Price of 100% of the principal amount thereof, plus interest accrued to the redemption date, if applicable; provided, however, that the Redemption Price for the PAC Bonds in the event of a redemption described in clause (i) of the paragraph above shall be the issue price thereof (par plus premium), plus accrued interest to the redemption date.

The Issue 2016-1 Bonds to be redeemed pursuant to this Section 2.10 shall be selected by THDA in its sole discretion; provided, however, that the PAC Bonds may not be redeemed in an amount in excess of their proportionate amount of all Issue 2016-1 Bonds then Outstanding in the event of any redemption pursuant to clause (i) of the first paragraph of this Section 2.10 and, to the extent the PAC Bonds are redeemed pursuant to any special optional redemption, the PAC Bonds shall be redeemed on a pro rata basis.

Section 2.11. Special Mandatory Redemptions.

(a) Unexpended Proceeds. The Issue 2016-1 Bonds are subject to mandatory redemption on July 1, 2016 in the event and to the extent that there are unexpended proceeds of the Issue 2016-1 Bonds on deposit in the Issue 2016-1 Subaccount of the Loan Fund on January 1, 2017; provided that such redemption date may be extended, at

10 4814-1586-3088.3

the option of THDA, and subject to the satisfaction of the conditions set forth in Section 4.01 hereof.

Notwithstanding any extension of the redemption date described above, in order to satisfy requirements of the Code, the Issue 2016-1 Bonds are subject to mandatory redemption on November 1, 2019, to the extent any amounts remain on deposit in the Issue 2016-1 Subaccount of the Loan Fund on October 1, 2019.

The redemption price of the Issue 2016-1 Bonds to be so redeemed shall be 100% of the principal amount thereof plus interest accrued to the date of redemption, if applicable; provided, however, that the redemption price for the PAC Bonds shall be the issue price thereof (par plus premium) plus accrued interest to the redemption date. The Issue 2016-1 Bonds to be redeemed shall be selected by THDA in its sole discretion; provided, however, that the PAC Bonds may not be redeemed in an amount in excess of their proportionate amount of all Issue 2016-1 Bonds then Outstanding and, to the extent PAC Bonds are redeemed, the PAC Bonds shall be redeemed on a pro rata basis.

(b) Excess 2016-1 Principal Payments (PAC Bonds). The PAC Bonds are subject to redemption prior to their maturity, in whole or in part at a Redemption Price of 100% of the principal amount of such PAC Bonds to be redeemed, plus interest accrued to the date of redemption, from amounts transferred to the Redemption Account representing Excess 2016-1 Principal Payments. Any Excess 2016-1 Principal Payments so deposited in the Redemption Account shall be applied to the redemption of PAC Bonds on any Interest Payment Date commencing January 1, 2017; provided that PAC Bonds may be redeemed between Interest Payment Dates on the first Business Day of any month for which adequate notice of redemption may be given.

While any PAC Bonds remain Outstanding, Excess 2016-1 Principal Payments shall be used as follows:

FIRST, if principal prepayments on the Program Loans allocable to the Issue 2016-1 Bonds are equal to or less than the 400% PSA Prepayment Amount, as determined by THDA, then available Excess 2016-1 Principal Payments shall first be applied to redeem the PAC Bonds on a pro rata basis up to an amount correlating to the Issue 2016-1A PAC Bonds Planned Amortization Amount and the Issue 2016-1B PAC Bonds Planned Amortization Amount, as applicable, and, subject to Section 2.11(c) below, the remainder may be applied by THDA for any purpose permissible under the Resolution, including the redemption of any Bonds under the Resolution, other than the PAC Bonds.

SECOND, if principal prepayments on the Program Loans allocable to the Issue 2016-1 Bonds are in excess of the 400% PSA Prepayment Amount, as determined by THDA, then available Excess 2016-1 Principal Payments shall first be applied to redeem PAC Bonds on a pro rata basis up to an amount correlating to the Issue 2016-1A PAC Bonds Planned Amortization Amount and the Issue 2016-1B PAC Bonds Planned Amortization Amount, as applicable, (as set forth in “FIRST” above) and, subject to Section 2.11(c) below, the remainder may be applied by THDA for any purpose permissible under the Resolution, including the redemption of any Bonds issued under the Resolution, including the PAC Bonds (any such remainder used to redeem PAC

11 4814-1586-3088.3

Bonds being an “Excess Principal PAC Bond Redemption”); provided, however, that (i) the source of an Excess Principal PAC Bond Redemption is restricted to that portion of available Excess 2016-1 Principal Payments which is in excess of 400% PSA, (ii) the principal amount of an Excess Principal PAC Bond Redemption may not be an amount in excess of the PAC Bonds’ proportionate amount of all Issue 2016-1 Bonds then Outstanding and (iii) the PAC Bonds shall be redeemed on a pro rata basis.

The Issue 2016-1A PAC Bonds Planned Amortization Amount, the Issue 2016-1B PAC Bonds Planned Amortization Amount and the 400% PSA Prepayment Amount set forth in Exhibit B hereto are each subject to proportionate reduction to the extent PAC Bonds are redeemed from amounts on deposit in the Issue 2016-1 Subaccount of the Loan Fund which are not applied to finance Program Loans in accordance with Section 2.11(a) hereof.

(c) Ten Year Rule.

(i) To the extent not required to make regularly scheduled principal payments on the Issue 2016-1 Bonds (including Sinking Fund Payments) or otherwise required to be used to redeem the PAC Bonds as described in Section 2.11 (b) above, repayments and prepayments of principal on the Program Loans, or portions thereof, allocable to the Issue 2016-1 Bonds (including Program Securities, if any, and the Transferred Program Loans) received more than ten years after the Issue Date of the Issue 2016-1 Bonds (or the date of original issuance of the bonds refunded by the Issue 2016-1 Bonds, directly or through a series of refundings) shall be applied to redeem the Issue 2016-1 Bonds on or before the next Interest Payment Date with respect to the Issue 2016-1 Bonds, which Interest Payment Date is at least six months from the date of receipt of such Program Loan principal payments, in such principal amounts as required to satisfy requirements of the Code. The Redemption Price of Issue 2016-1 Bonds so redeemed shall be 100% of the principal amount thereof, plus interest accrued to the redemption date, if applicable.

(ii) THDA shall advise the Trustee of the appropriate Redemption Date for any redemption pursuant to this Section 2.11(c). The Issue 2016-1 Bonds to be redeemed shall be selected by THDA in its sole discretion; provided however, that the PAC Bonds may be redeemed in an amount that exceeds the applicable Planned Amortization Amount only if there are no other Issue 2016-1 Bonds Outstanding and if such PAC Bonds are redeemed pursuant to this paragraph, the PAC Bonds shall be redeemed on a pro rata basis.

Section 2.12. Selection by Lot. If less than all of the Issue 2016-1 Bonds of like Series and maturity are to be redeemed, the particular bonds of such maturity to be redeemed shall be selected by lot in accordance with Section 6.4 of the General Resolution.

Section 2.13. Purchase of Bonds by THDA or Trustee. Whenever moneys are available for redemption of Bonds under Sections 2.08, 2.09, 2.10 or 2.11 above, THDA or the Trustee is authorized to purchase Bonds at a price not to exceed the applicable Redemption Price.

12 4814-1586-3088.3

ARTICLE III

SALE AND DELIVERY

Section 3.01. Sale.

(a) The Issue 2016-1 Bonds are hereby authorized to be sold to the Underwriters at the prices and on the terms and conditions set forth in the Bond Purchase Agreement and upon the basis of the representations, warranties and agreements therein set forth. The Chairman, Secretary or Assistant Secretary of the Bond Finance Committee and the Executive Director of THDA are hereby authorized to execute the Bond Purchase Agreement. The Board of Directors of THDA hereby authorizes the Committee to adopt a resolution approving the purchase price of the Issue 2016-1 Bonds.

(b) The Secretary of the Bond Finance Committee of THDA is hereby authorized to make public and to authorize distribution of the Official Statement relating to the Issue 2016-1 Bonds in substantially the form presented to THDA with such changes, omissions, insertions and revisions as such officer shall deem advisable. The Chairman, Vice Chairman, Executive Director and Secretary of the Bond Finance Committee are hereby authorized to sign and deliver such Official Statement to the Underwriters. The distribution of the Preliminary Official Statement relating to the Issue 2016-1 Bonds to the public is hereby authorized and approved.

(c) The Issue 2016-1 Bonds shall be delivered to the Underwriters in accordance with the terms of the Bond Purchase Agreement and this 2016-1 Supplemental Resolution.

ARTICLE IV

DISPOSITION OF PROCEEDS AND OTHER MONEYS

Section 4.01. Loan Fund; Bond Reserve Fund Requirement. Upon receipt of the proceeds of the sale of the Issue 2016-1 Bonds, THDA shall deposit such proceeds, together with any contribution from THDA of available THDA funds, in the Issue 2016-1 Bond Subaccount of the Loan Fund and in the Bond Reserve Fund, if applicable, as shall be set forth in a certificate of THDA delivered on or prior to the date of issuance of the Issue 2016-1 Bonds. Amounts on deposit in the Issue 2016-1 Bond Subaccount of the Loan Fund in excess of $24,060,000 shall be applied to (i) the financing of Program Loans (including Program Securities, if any), or participations therein, in accordance with the provisions of the General Resolution and Section 4.03 hereof, (ii) deposits to the Bond Reserve Fund and the Debt Service and Expense Account of the Revenue Fund, (iii) payment of Costs of Issuance and (iv) payment of capitalized interest to the extent, if any, specified by written instructions of an Authorized Officer.

Amounts on deposit in the Issue 2016-1 Subaccount of the Loan Fund shall be withdrawn therefrom and applied to the mandatory redemption of Issue 2016-1 Bonds as described in Section 2.11(a) hereof. The date of such redemption provided in Section 2.11(a) may be extended upon the delivery by THDA to the Trustee and the Rating Agency of a Projected Cash Flow Statement which satisfies the requirements of Section 7.11 of the General Resolution;

13 4814-1586-3088.3

provided further that the date of such redemption shall not be extended beyond the date set forth in the second paragraph of Section 2.11(a) unless THDA is in receipt of an opinion of Bond Counsel to the effect that such extension will not adversely affect the exclusion of interest on the Issue 2016-1 Bonds from the income of the owners thereof for federal income tax purposes. The amount of funds on deposit in the Issue 2016-1 Bond Subaccount of the Loan Fund to be used to pay Costs of Issuance with respect to the Issue 2016-1 Bonds shall not exceed 2% of the proceeds of the Issue 2016-1 Bonds.

THDA hereby covenants that an amount equal to twenty percent (20%) of the funds deposited in the Issue 2016-1 Bond Subaccount of the Loan Fund which are to be used to finance Program Loans (or other available funds of THDA), shall be made available for owner financing of “targeted area residences” (as defined in Section 143(j) of the Code) until May 18, 2017.

The Bond Reserve Fund Requirement with respect to the Issue 2016-1 Bonds shall be an amount equal to 3% of the then current balance of Program Loans (other than Program Loans underlying Program Securities) allocable to the Issue 2016-1 Bonds plus the amount on deposit in the Issue 2016-1 Subaccount of the Loan Fund which has not been designated to provide for the payment of Costs of Issuance or capitalized interest. On the Issue Date, THDA shall deposit an amount in the Bond Reserve Fund to satisfy the Bond Reserve Requirement.

Section 4.02. Proceeds of Issue 2016-1A Bonds. Proceeds of the Issue 2016-1A Bonds initially shall be deposited in the Issue 2016-1 Bond Subaccount of the Loan Fund. On the Issuance Date, $24,060,000 of the amount on deposit in the Issue 2016-1 Bond Subaccount of the Loan Fund (representing the principal portion of the proceeds of the Issue 2016-1A Bonds) shall be applied to the refunding of the Refunded Bonds. On such date, the Transferred Program Loans shall be credited to the Issue 2016-1 Bond Subaccount of the Loan Fund and the Transferred Investments shall be deposited in such Funds or Accounts as shall be set forth in a certificate of THDA delivered on or prior to the Issuance Date.

Section 4.03. Program Loan Determinations. No Program Loan shall be financed with proceeds of the Issue 2016-1 Bonds unless (i) such Program Loan is made for the acquisition of residential housing for occupancy by not more than four families and (ii) the deed of trust securing such Program Loan shall constitute and create a first lien subject only to Permitted Encumbrances, on the real property or on the interest in the real property constituting a part of the residential housing with respect to which the Program Loan secured thereby is made and on the fixtures acquired with the proceeds of the Program Loan attached to or used in connection with such residential housing.

In addition, the Program Loan must either:

(a) have been pooled into a Program Security; or

(b) have been insured or guaranteed by the Federal Housing Administration, the Farmers Home Administration, the Veteran’s Administration, or another agency or instrumentality of the United States or the State to which the powers of any of them have been transferred, or which is exercising similar powers with reference to the insurance or guaranty of Program Loans; or

14 4814-1586-3088.3

(c) have a principal balance not exceeding 78% of the value, as determined in an appraisal by or acceptable to THDA, or the purchase price of the property securing the Program Loan, whichever is less; or

(d) be made in an amount not exceeding the value, as determined in an appraisal by or acceptable to THDA, or purchase price of the property securing the Program Loan, whichever is less, but only if (i) THDA is issued a mortgage insurance policy by a private mortgage insurance company, qualified to do business in the State and the claims paying ability of which private mortgage insurer is rated by each Rating Agency in a rating category at least as high as the then current rating assigned to the Bonds, under which the insurer, upon foreclosure of the property securing the Program Loan, must pay the holder of the Program Loan the unrecovered balance of a claim including unpaid principal, accrued interest, taxes, insurance premiums, and expenses of foreclosure, if any, or in lieu thereof may permit the holder of the Program Loan to retain title and may pay an agreed insured percentage of such claim; and (ii) the insured percentage of the Program Loan equals the amount by which the original principal amount of the Program Loan exceeds 78% of the value, as determined by an appraisal by or acceptable to THDA or purchase price of the property securing the Program Loan, whichever is less.

ARTICLE V

FORM OF BONDS, AND TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Section 5.01. Form of Bonds. Subject to the provisions of the General Resolution, the Issue 2016-1 Bonds in fully registered form shall be in substantially the form attached hereto as Exhibit C, with such variations as shall be appropriate in order to conform to the terms and provisions of the General Resolution and this Resolution.

Section 5.02. Form of Trustee’s and Authenticating Agent’s Certificate of Authentication. The Issue 2016-1 Bonds shall not be valid or become obligatory for any purpose unless there shall have been endorsed thereon a certificate of authentication in substantially the following form:

(FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION)

This bond is one of the bonds described in the within-mentioned Resolutions and is one of the Residential Finance Program Bonds, [Issue 2016-1A (AMT)] [Issue 2016-1B (Non-AMT)] of the Tennessee Housing Development Agency.


By Authorized Officer

15 4814-1586-3088.3

ARTICLE VI

MISCELLANEOUS

Section 6.01. No Recourse Against Members or Other Persons. No recourse may be had for the payment of principal of or premium or interest on the Issue 2016-1 Bonds or for any claim based thereon or on this Resolution against any member of THDA or any person executing the Issue 2016-1 Bonds and neither the members of THDA nor any person executing the Issue 2016-1 Bonds may be liable personally on the Issue 2016-1 Bonds or be subject to any personal liability or accountability by reason of the execution thereof.

Section 6.02. Bonds not Debt, Liability or Obligation of the State or the United States of America. The Issue 2016-1 Bonds are not a debt, liability or the obligation of the State or any other political subdivision thereof. Neither the full faith and credit nor the taxing power of the State, or of any other political subdivision thereof, is pledged for the payment of the principal of or interest on the Issue 2016-1 Bonds. The Issue 2016-1 Bonds are not a debt, liability or obligation of the United States of America or any agency thereof. Neither the full faith and credit nor the taxing power of the United States of America is pledged for payment of the principal of or interest on the Issue 2016-1 Bonds.

Section 6.03. Delivery of Projected Cash Flow Statements. THDA shall deliver such Projected Cash Flow Statements at the times and on the occasions set forth in the General Resolution or this Resolution.

Section 6.04. Authorized Officers. The Chairman, Vice Chairman, Executive Director, General Counsel, Deputy Executive Director and Secretary of THDA and the Secretary and any Assistant Secretary of the Bond Finance Committee and any other proper officer of THDA, be, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution, the General Resolution and the Official Statement.

Section 6.05. Authorized Trustee. THDA authorizes and directs the Trustee to perform any and all acts contemplated to be performed by the Trustee pursuant to the terms and provisions of this Resolution.

Section 6.06. Covenant to Comply with Federal Tax Law Requirements. THDA hereby covenants to comply with all applicable requirements of the Code so that interest on the Issue 2016-1 Bonds will be excluded from gross income of the holders thereof for federal income tax purposes, including the rebate requirement of Section 148(f) of the Code. THDA also covenants to pay any interest or penalty imposed by the United States for failure to comply with said rebate requirements. In accordance with the rebate requirement, THDA agrees that there will be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the Issue 2016-1 Bonds from time to time.

16 4814-1586-3088.3

Section 6.07. Continuing Disclosure Undertaking.

(a) THDA shall deliver to the MSRB, within 210 days after the end of each Fiscal Year:

(i) a copy of the annual financial statements of THDA prepared in accordance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board; and

(ii) an annual update of the type of information in the Official Statement (A) contained in Appendix F, (B) regarding annual required contributions for employee pension plan and other post-employment benefits to the extent not included in annual financial statements and (C) of the nature disclosed under the following headings (including, without limitation, information with respect to the outstanding balances of Program Loans, by mortgage type, delinquency information, acquisition costs and income limits):

(A) Residential Finance Program Bonds; and

(B) Residential Finance Program Loans.

The information described in this subsection (a) may be provided by specific reference to documents (including official statements, to the extent the official statements include the information described in this subsection (a)) previously provided to the MSRB or filed with the Securities and Exchange Commission.

If unaudited financial statements are provided as part of the information required to be delivered under this subsection (a) within the time period specified above, THDA shall provide, when and if available, a copy of THDA’s audited financial statements to the MSRB.

(b) THDA shall deliver to the MSRB and the Trustee, in a timely manner not in excess of 10 business days after the occurrence of the event, notice of the occurrence of any of the following events (if applicable) with respect to the Issue 2016-1 Bonds:

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults, if material;

(iii) unscheduled draws on the Bond Reserve Fund (or other debt service reserves) reflecting financial difficulties;

(iv) unscheduled draws on any credit enhancements reflecting financial difficulties;

(v) substitution of any credit or liquidity provider, or their failure to perform;

(vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the

17 4814-1586-3088.3

tax status of the Issue 2016-1 Bonds, or other material events affecting the tax status of the Issue 2016-1 Bonds;

(vii) modifications to rights of the holders of the Issue 2016-1 Bonds, if material;

(viii) bond calls, if material, and tender offers;

(ix) defeasances;

(x) release, substitution or sale of property securing repayment of the Issue 2016-1 Bonds, if material;

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership or similar event of THDA (which event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for THDA in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of THDA, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of THDA);

(xiii) The consummation of a merger, consolidation or acquisition involving THDA or the sale of all or substantially all of the assets of THDA, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Issue 2016-1 Bonds or defeasance of any Issue 2016-1 Bonds need not be given pursuant to this Section 6.07 any earlier than the notice (if any) of such redemption or defeasance is given to the owners of the Issue 2016-1 Bonds pursuant to the Resolution.

(c) THDA shall give notice to the Trustee and the MSRB in a timely manner of any failure by THDA to provide any information required pursuant to subsection (a) above within the time limit specified therein.

(d) All notices, documents and information provided to the MSRB shall be provided in an electronic format as prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB.

18 4814-1586-3088.3

(e) THDA agrees that the provisions of this Section 6.07 shall be for the benefit of the beneficial owners of the Issue 2016-1 Bonds whether or not the Rule (as defined below) applies to such Issue 2016-1 Bonds.

(f) THDA may amend this Resolution with respect to the above agreements, without the consent of the beneficial owners of the Issue 2016-1 Bonds (except to the extent required under clause (iv)(B) below), if all of the following conditions are satisfied: (i) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of THDA or the type of business conducted thereby; (ii) these agreements as so amended would have complied with the requirements of Rule 15c2-12 (the “Rule”) as of the date of this Resolution, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; (iii) THDA shall have delivered to the Trustee an opinion of counsel, addressed to THDA and the Trustee, to the same effect as set forth in clause (ii) above; (iv) either (A) THDA shall deliver to the Trustee an opinion of or determination by a person unaffiliated with THDA (which may include the Trustee or bond counsel), acceptable to THDA and the Trustee, addressed to THDA and the Trustee, to the effect that the amendment does not materially impair the interests of the holders of the Issue 2016-1 Bonds or (B) the holders of the Issue 2016-1 Bonds consent to the amendment pursuant to the same procedures as are required for amendments to the General Resolution with consent of the holders of Bonds pursuant to the General Resolution as in effect on the date of this Resolution; and (v) THDA shall have delivered copies of such opinion(s) and the amendment to the MSRB.

(g) THDA’s obligations with respect to the beneficial owners of the Issue 2016-1 Bonds under these agreements as set forth above terminate upon a legal defeasance pursuant to the General Resolution, prior redemption or payment in full of all of the Issue 2016-1 Bonds. THDA shall give notice of any such termination to the MSRB.

(h) Failure by THDA to comply with this Section 6.07 shall not constitute an Event of Default under the General Resolution but the undertaking in this Section 6.07 may be enforced by any beneficial owner of the Issue 2016-1 Bonds exclusively by an action for specific performance. The obligations of THDA in this Section 6.07 shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of the obligations under this Section 6.07 shall be instituted in a court of competent jurisdiction in the State.

Section 6.08. Confirmation and Adjustment of Terms by Committee. The terms of the Issue 2016-1 Bonds are herein established subject to confirmation by the Committee upon the sale of the Issue 2016-1 Bonds by the Committee. The Committee is hereby authorized to make such changes or modifications in the principal amounts, maturities and interest rates for the Issue 2016-1 Bonds and in the application of the proceeds thereof, paying agents, terms of redemption and the schedule of prepayment amounts to be used for accrued principal installments in such manner as the Committee determines to be necessary or convenient to better achieve the purposes of the Act and in the best interests of THDA.

Section 6.09. Effective Date. This Resolution will take effect immediately.

4814-1586-3088.3

EXHIBIT A

BOND PURCHASE AGREEMENT

4814-1586-3088.3

EXHIBIT B

PLANNED AMORTIZATION AMOUNTS FOR PAC BONDS

Date Issue 2016-1A PAC Bonds Planned Amortization

Amount

Issue 2016-1B PAC Bonds Planned Amortization

Amount

January 1, 2017 $ 740,000 $ 480,000

July 1, 2017 1,480,000 960,000

January 1, 2018 2,555,000 1,645,000

July 1, 2018 3,945,000 2,535,000

January 1, 2019 5,620,000 3,610,000

July 1, 2019 7,455,000 4,785,000

January 1, 2020 9,220,000 5,920,000

July 1, 2020 10,890,000 6,990,000

January 1, 2021 12,465,000 8,000,000

July 1, 2021 13,945,000 8,950,000

January 1, 2022 15,335,000 9,845,000

July 1, 2022 16,630,000 10,680,000

January 1, 2023 17,840,000 11,455,000

July 1, 2023 18,965,000 12,175,000

January 1, 2024 20,005,000 12,840,000

July 1, 2024 20,960,000 13,455,000

January 1, 2025 21,835,000 14,020,000

July 1, 2025 22,630,000 14,525,000

January 1, 2026 23,345,000 14,985,000

July 1, 2026 23,980,000 15,395,000

January 1, 2027 24,060,000 15,440,000

2 4814-1586-3088.3

400% PSA PREPAYMENT AMOUNTS FOR ISSUE 2016-1 BONDS

Date

Cumulative

Amount Date

Cumulative

Amount

July 1, 2016 $ 635,890 January 1, 2032 $ 114,101,696January 1, 2017 5,022,079 July 1, 2032 114,287,161

July 1, 2017 11,149,456 January 1, 2033 114,443,650 January 1, 2018 19,105,363 July 1, 2033 114,575,444














July 1, 2031 113,882,268 January 1, 2047 115,220,944

4814-1586-3088.3

EXHIBIT C

FORM OF BOND

REGISTERED

R[A][B]-1 $[_________]

TENNESSEE HOUSING DEVELOPMENT AGENCY RESIDENTIAL FINANCE PROGRAM BOND

ISSUE 2016-1[A][B] [(AMT)][(Non-AMT)]

Interest Rate Dated Date Maturity Date Cusip

[___]% May 18, 2016 [_____]

880461[___]

REGISTERED OWNER: CEDE & CO.

PRINCIPAL SUM: [_________]

TENNESSEE HOUSING DEVELOPMENT AGENCY (hereinafter sometimes called “THDA”), a body politic and corporate and a political subdivision of the State of Tennessee (herein called the “State”), created and existing under and by virtue of the laws of the State, acknowledges itself indebted, and for value received hereby promises to pay to the Registered Owner (shown above), or registered assigns, the principal sum (shown above), on the maturity date specified above, and to pay interest on said principal sum to the Registered Owner of this Bond from the dated date hereof until THDA’s obligation with respect to the payment of said principal sum shall be discharged, at the rate per annum specified above payable on each January 1 and July 1 commencing January 1, 2017. The principal of and interest on this Bond are payable at the designated corporate trust office of U.S. Bank National Association, Nashville, Tennessee in any coin or currency of the United States of America, which, on the respective dates of payment thereof shall be legal tender for the payment of public and private debts.

This Bond is one of the bonds of THDA designated “Residential Finance Program Bonds” (herein called the “Bonds”) authorized to be issued in various series under and pursuant to the Tennessee Housing Development Agency Act, Sections 13-23-101 et seq., of the Tennessee Code Annotated, as amended (herein called the “Act”), a resolution of THDA adopted January 29, 2013, as amended and supplemented by the Bond Finance Committee on April 18, 2013, and entitled “Residential Housing Finance Resolution” (herein called the “General Resolution”) and a supplemental resolution authorizing each issue. As provided in the General Resolution, the Bonds may be issued from time to time in one or more series of various principal

2 4814-1586-3088.3

amounts, may bear interest at different rates and subject to the provisions thereof, may otherwise vary. All Bonds issued and to be issued under the General Resolution are and will be equally secured by the pledges and covenants made therein, except as otherwise expressly provided or permitted in the General Resolution.

This bond is one of a series of bonds additionally designated “Issue 2016-1[A][B]” (herein called the “Bonds”) issued in the aggregate principal amount of $__________ under the General Resolution, a resolution of THDA adopted on January 26, 2016, as amended and supplemented by the Bond Finance Committee on April 13, 2016 (collectively with the General Resolution, the “Resolutions”). Copies of the Resolutions are on file at the office of THDA in Nashville, Tennessee and at the principal corporate trust office of U.S. Bank National Association, Nashville, Tennessee, as trustee under the General Resolution (said trustee under the General Resolution being called herein the “Trustee”) and reference to the Resolutions and any and all supplements thereto and modifications and amendments thereof and to the Act is made for a description of the pledges and covenants securing the Bonds, the nature, extent and manner of enforcement of such pledges, the rights and remedies of the bearers or registered owners of the Bonds with respect thereto and the terms and conditions upon which the Bonds have been issued and may be issued thereunder.

To the extent and in the manner permitted by the terms of the Resolutions, the provisions of the Resolutions or any resolution amendatory thereof or supplemental thereto may be modified or amended by THDA with the written consent of the holders of at least two-thirds in principal amount of the Bonds then outstanding, and, in case less than all of the several series of Bonds would be affected thereby, with such consent of the holders of at least two-thirds in principal amount of the Bonds of each series so affected then outstanding. If such modification or amendment will by its terms not take effect so long as any Bonds of any specified like series and maturity remain outstanding, however, the consent of the holders of such Bonds shall not be required. In addition, certain other modifications or amendments to the Resolutions can be made which are not contrary to or inconsistent with the Resolutions without the consent of the Bondholders.

The holder of this Bond shall have no right to enforce the provisions of the Resolutions, to institute actions to enforce the provisions of the Resolutions or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the General Resolution. In certain events, on the conditions, in the manner and with the effect set forth in the General Resolution, the principal of all the Bonds issued thereunder and then outstanding, together with accrued interest thereon, may become or may be declared due and payable before the maturity thereof.

This Bond is transferable, as provided in the Resolutions, only upon the books of THDA kept for that purpose at the office of the Trustee by the registered owner hereof in person or by such owner’s attorney duly authorized in writing, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or such owner’s attorney duly authorized in writing, and thereupon a new registered Bond or Bonds in the same aggregate principal amount and of the same subseries and maturity shall be issued to the transferee in exchange therefor as provided in the General Resolution and upon the payment of the charges, if any, therein prescribed. THDA and the Trustee may treat and consider the

3 4814-1586-3088.3

person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price, if any, hereof and interest due hereon and for all other purposes whatsoever.

This Bond is a special limited obligation of THDA payable solely from the revenues and assets pledged therefor pursuant to the General Resolution.

The Bonds are issued as fully registered bonds in the denomination of $5,000 or any integral multiple thereof.

The Bonds are subject to optional, mandatory and sinking fund redemption as described in the Resolutions.

This Bond does not constitute a debt, liability or other obligation of the State or any political subdivision thereof other than THDA and neither the State nor any political subdivision thereof shall be obligated to pay the principal of the Bonds or the interest thereon. Neither the faith and credit nor the taxing power of the State or of any political subdivision thereof is pledged to the payment of the principal of or interest on the Bonds.

This Bond shall not be valid or become obligatory for any other purpose or be entitled to any security or benefit under the Resolutions until the Certificate of Authentication hereon shall have been signed by the Trustee.

The Act provides that neither the members of THDA nor any person executing this Bond shall be liable personally hereon or shall be subject to any personal liability or accountability by reason of its execution.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution or statutes of the State and the Resolutions to exist, to have happened or to have been performed precedent to or in the issuance of this Bond, exist, have happened and have been performed in due time, form and manner as required by law and that the issuance of the Bonds, together with all other indebtedness, of THDA, is within every debt and other limit prescribed by law.

[Remainder of page intentionally left blank]

4 4814-1586-3088.3

IN WITNESS WHEREOF, TENNESSEE HOUSING DEVELOPMENT AGENCY has caused this Bond to be executed in its name by the manual or facsimile signature of its Chairman and its corporate seal (or a facsimile thereof) to be affixed, imprinted, engraved or otherwise reproduced hereon and attested by the manual or facsimile signature of its Executive Director, all as of the dated date shown above.


By Brian Bills Chairman

[SEAL]

Attest:

By Ralph M. Perrey Executive Director

5 4814-1586-3088.3

CERTIFICATE OF AUTHENTICATION

This bond is one of the bonds described in the within-mentioned Resolutions and is one of the Residential Finance Program Bonds, Issue 2016-1[A][B] [(AMT)][(Non-AMT)] of the Tennessee Housing Development Agency.


By Authorized Signatory

Dated: May 18, 2016

6 4814-1586-3088.3

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the

right of survivorship and not as tenants in common

UNIFORM GIFT MIN ACT - Custodian (Cust) (Minor)

under Uniform Gifts to Minors

Act (State)

Additional Abbreviations may also be used though not in the above list

ASSIGNMENT

For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney to transfer the said Bond on the bond register, with full power of substitution in the premises.

Dated:

Social Security Number or Employer Identification Number of Transferred:

Signature guaranteed:

NOTICE: The assignor’s signature to this Assignment must correspond with the name as it appears on the face of the within Bond in every particular without alteration or any change whatever.


13. OFFICIAL STATEMENT:

May Be Viewed On THDA’s Website At www.THDA.org On The Investors Webpage


Tab # 6 Items: Tax Credit Committee Meeting Materials


Tax Credit Committee Monday, May 23, 2016

10:00 a.m. Central Time

AGENDA

1. Call to Order ................................................................................................................... Bills

2. Approval of Minutes from March 21, 2016 .................................................................... Bills

3. Review Notice Appeals for the 2016 Low Income Housing Tax Credits Process ........ Blade

4. 2017 Low Income Housing Tax Credit Qualified Allocation Plan Initiative Updates .. Blade

a. Innovative Round

b. Scholar House

c. Narrowing the scope of current language offering the 130% basis boost to all Initial Applications

d. Clarifying the language regarding market study requirements to provide more detail on THDA’s expectations

e. Lowering the preservation/rehabilitation per development maximum amount of Tax Credits from $1,100,000 to $800,000

f. Restructuring the tiebreaker

g. Restructuring the County Needs Score to do away with the Tier system

h. Penalizing counties for re-zoning or down-zoning after tax credits are awarded to a development in that county

5. Update on Tax Exempt Bond Volume Cap Utilization ................................................. Blade

6. Adjourn ............................................................................................................................ Bills LOCATION COMMITTEE MEMBERS William R Snodgrass – Tennessee Tower Brian Bills, Interim Chair 312 Rosa L Parks Avenue, Third Floor Kim Grant Brown Nashville, TN 37243 Ron Jones David Lillard The Nashville Room Larry Martin Todd Skelton

TENNESSEE HOUSING DEVELOPMENT AGENCY TAX CREDIT COMMITTEE

March 21, 2016

Pursuant to the call of the Chairman, the Tax Credit Committee of the Tennessee Housing Development Agency Board of Directors met, in regular session, on Monday, March 21, 2016 at 1:00 p.m. Central Time at the Tennessee Tower in the Nashville Room, Nashville, Tennessee.

The following Committee members were present: Brian Bills (Chair), Kim Grant Brown, Ron Jones, Courtney Hess for State Treasurer David Lillard, Greg Turner for Commissioner Larry Martin. The following member was absent: Ashleigh Roberts.

Seeing a quorum present, Chairman Bills called the meeting to order and called for approval of the minutes from the prior meeting. Upon motion by Mr. Turner, second by Ms. Brown, the minutes from the January 21, 2016, meeting were approved.

Chairman Bills recognized Laura Swanson, Research Coordinator, Research & Planning Division who presented a report titled “Aging Affordable Rental Housing in Tennessee & the Need for Preservation”.

Chairman Bills then recognized Mr. Jacob Sipe, Executive Director of Indiana Housing & Community Development Authority, who presented the Indiana Housing Innovative Concept Proposal. It was the consensus of the Committee members that THDA should consider and further discuss the items in the Indiana proposal.

Chairman Bills recognized Michael Blade, Director and Assistant Legal Counsel for Multifamily Development, to present an update on the Developer’s Forum that was held on March 1, 2016. Mr. Blade referenced the document titled “2016 Developer’s Forum comments” in the board packet and provided a summary of the Forum.

Mr. Blade then led a discussion about items for inclusion in the 2017 Low Income Housing Tax Credit Qualified Allocation Plan, including the THDA Innovative Concept Proposal, the Scholar House Proposal, and other process items. The consensus of the Committee was to continue discussion around these items.

Chairman Bills called for an update on Forest Creek Townhomes. Mr. Blade reviewed the logistics of the project and actions being taken to complete the development.

With no further business the meeting was adjourned.

Respectfully submitted,

Ralph M. Perrey Executive Director

Approved this ____ day of May 2016.




M E M O R A N D U M TO: THDA Board of Directors FROM: Michael Blade Director & Assistant Legal Counsel for Multifamily Development DATE: May 11, 2016 SUBJECT: May 23, 2016 Tax Credit Committee Meeting The May Tax Credit Committee meeting will focus on Review Requests from 2016 LIHTC competitive applications that have unresolved issues. These items will require action, and further discussion of some potential concepts for the 2017 Low-Income Housing Tax Credit Qualified Allocation Plan will follow. Attached please find the following:

1. Relief Request materials; 2. Staff notes from the Developer Forum held April 19, 2016; 3. Written comments submitted following the Developer Forum; and 4. Materials regarding potential concepts for the 2017 QAP, including:

a. Draft QAP language for the proposed Innovation Round; and b. Draft QAP language for student housing.

Please contact me, Ed Yandell, or Judith Smith if you have questions.



Low lncome Housing Tax Credit

2016 Review Notice

LIHTC Application Number:Development Name:

TN16-047Weston Way2820 US 411Maryville, TN 37801

lnitial Aoolication G riteria Not Met:

Eligibility Requirements: NONE

Scoring Review: NONE

Self-Score: 100 THDA Score: 100

Other Requirements: NONE

Pursuant to $42(m)(21 of the lnternal Revenue Code, Part I of the THDA Low-lncome Housing Tax Cred¡t 2016 QAP (the "2016 QAP"), Part ll-3 of the 2016QAP, and Part lV-E of the 2016 QAP, THDA has determined that the proposedsquare footage for the units in the development reflected in this lnitialApplication requires an allocation of Low-lncome Housing Tax Credit that isin excess of what is necessary for the financial feasibility of the developmentand its viability as a qualified low-income housing development throughoutthe credit period.

Pagel of2 TN I 6-047

For purposes of applying the per developer/related party limit specific in Part lV-Cof the 2016 QAP, the following lnitial Applications will be treated as related:TN1 6-045 Vaughn StationTN16-046 Woodall RidgeTN16-047 Weston WayTN16-066 Perry View

lf additional documentation to address items specified in the Cure Notice for thislnitial Application was not submitted in accordance with the requirements of PartVlll-B-1 of the 2016 QAP and the Cure Notice, the determination as to eligibility andscoring made by THDA is determinative. The review process described in Part Vlll-C is not available to applicants who do not submit additional documentation inaccordance with the requirements of Part Vlll-B-1 of the 2016 QAP and the GureNotice (including, without limitation, the time deadlines specified therein).

Pursuant to the requirements of Part Vlll-C-6 of the 2016 QAP, The THDA Board ofDirectors will not consider requests to review decisions of the Tax GreditGommittee. All decisions of the Tax Credit Committee are final. No matters withrespect to eligibility under Part Vll-A or with respect to scoring under Part Vll-B willbe considered after the date of the Review Meeting.

Pursuant to the requirements of Section 42(ml(21of the lnternal Revenue Code of1986, as amended, and the requirements of the 2016 QAP, THDA will conduct a

financial feasibility and reasonability review of the development in the event that thedevelopment is designated to receive a Preliminary Award Letter This review mayinclude adjustments to the information reflected in the lnitial Application. THDAalso reserves the right, in its sole discretion, to reserve or allocate an amount of TaxGredits less than the amount requested in an lnitial Application, a CarryoverApplication, or a Final Application.

Page 2 of 2 TN l6-047

Rebecca Scott

From:Sent:To:Subject:Attachments:

Eagle Residential Development <[email protected]>

Monday, May 02,20L6I2:L4 PM

Rebecca Scott; Ralph M. Perrey; Dwayne Barrett; Mike Hedges; Stewart RutledgeRe:TN16-047 Weston Way

Weston Way Review Req L6-047.pdf

Mr. Perrey and Ms. Scott,

Please find attached our Request for Review for this application.

Sincerely,Mike Hedges

On Wed, Apr27,2016 at 8:17 AM, Rebecca Scott <ßSç[email protected]> wrote:

\,'i iirr: ¡nil Stci.,,¡ i't.

It:¡s c'rttserl.

Please see the attached Review Notice and memo.

i. -\íi,,:, (6 t 5,1 s t ,-211'4

1'.,.,(6 t r) ,L<4".)-7oo

1

Note: This email may contain PRIVILEGED and CONFIDENTIAL inf'ormation. If you are not the intendedrecipient, any dissemination, distribution, or copy of this email is prohibited. If you have received this email inerror, please delete it and immediately notify the sender.

2

l'lay 2,2016

VIA ELBCTRONIC MAIL

Tennessee Housing Development AgencyAttn: Ralph PerreyAndrew Jackson Building502 Deaderick Street, Third FloorNashville, Tennessee 37243

RE: 2016 Review Notice- Weston Way TN16-047

Dear Mr. Perrey:

This letter is in response to the Tennessee Housing Development Agency ("THDA") LowIncome Housing Tax Credit 2016 Review Notice ("Review Notice") for the above referencedapplication. A copy of the referenced Review Notice is attached hereto. For the reasons set

forth below, THDA's determinations referenced in the Review Notice are arbitrary andcapricious and in violation of the THDA 2016 Qualified Allocation Plan ("QAP"). More to thepoint, the attempt to determine financial feasibility of this or any project is not permitted untilafter such project has received a Preliminary Award Letter ("PAL"). No such PAL has beenremitted to the referenced project in accordance with QAP Part IX.A.

The Review Notice states that the application met all initial application criteria per the"NONE" listed after Eligibility Requirements, Scoring Review, and Other Requirements.Furthermore, the self-score from the application matches the score given by THDA, which bothreflect a score of 100. The Review Notice then includes the following:

"Pursuant to $42(mX2) of the Internal Revenue Code, Part I of the THDA Low-Income Housing Tax Credit 2016 QAP (the "2016 QAP"), Part II-3 of the 2016 QAP,and Part IV-E of the 2016 QAP, THDA has determined that the proposed square footagef'or the units in the development reflected in this Initial Application requires an allocationof Low-lncome Housing Tax Credit that is in excess of what is necessary for the financialfeasibility of the development and its viability as a qualified low-income housingdevelopment throughout the credit period."

The Review Notice therefore is based on the determination that the project was notfinancially feasible and not viable as a qualified low-income housing development throughoutthe credit period. However, these grounds violate the QAP and even the Review Notice itself,which provides as follows:

"Pursuant to the requirements of Section a2@)(2) of the Internal Revenue Codeof 1986, as amended, and the requirements of the 2016 QAP, THDA will conduct a

financial feasibility and reasonability review of the development in the event lhøt thedevelopment ìs designated to receíve ø preliminary øwørd lelter."

In other words, THDA conducts financial feasibility and reasonability review ONLYAFTER the project has been determined to be eligible and ranked high enough to receive the

PAL. THDA has not notified the applicant of a PAL in accordance with QAP Part IX.A.Reservation of Tax Credits.

Nowhere in the QAP does it provide fbr a hnancial feasibility analysis as part ofeligibility or scoring. See Part VII-A Eligibility or Part VII-B Scoring. Accordingly, it is

arbilrary and capricious for THDA to determine the project is not feasible prior to issuing thePAL and working with the applicant to resolve concerns about the proposed project. See QAPPart IX.A.

We are respectfully requesting that the Tax Credit Committee confirm that there are no

outstanding issues with eligibility and scoring of the referenced application. Further, we are

respectfully requesting the Tax Credit Committee confirm the financial feasibility and

reasonability review will occur AFTER the referenced application "is designated to receive a

preliminary award letter," consistent with the very Review Notice itself. Any other findingwould violate the 2016 QAP Part VII-A Eligibility or Part VII-B Scoring, and therefore be

arbitrary and capricious.

We believe this project is financially feasible and we have not requested more creditsthan necessary to build the units. The application complies with the QAP and conforms to marketdemands. We would welcome the opportunity to meet with staff to confirm the foregoing uponreceipt of a PAL (and possibly work with staff toward an allocation of fewer credits thanrequested in the application, if appropriate), which is the typical process for underwritingapplications.

V/e would appreciate the opportunity to discuss in more detail. If you should have anyquestions, please do not hesitate to contact me.

Mike Hedges

cc Dwayne Barrett, Esq



20L6 Review Notice


TN16-045Vaughn Station1242 WhitehallJackson, TN 38301

lnitial Aoolication Criteria Not Met:





Pursuant to ga2(m)(21 of the lnternal Revenue Code, Part I of the THDA Low-lncome Housing Tax Gred¡t 2016 QAP (the "2016 QAP"), Part ll-3 of the 2016QAP, and Part lV-E of the 2016 QAP, THDA has determined that the proposedsquare footage for the units in the development reflected in this lnitialApplication requires an allocation of Low-lncome Housing Tax Credit that isin excess of what is necessary for the financial feasibility of the developmentand its viability as a qualified low-income housing development throughoutthe credit period.

Page I of2 TNl6-045

For purposes of applying the per developer/related party limit specific in Part lV-Cof the 2Ol6 QAP, the following lnitial Applications will be treated as related:TNl 6-045 Vaughn StationTN16-046 Woodall RidgeTNí6-047 Weston WayTN16-066 View

lf additionat documentation to address items specified in the Gure Notice for thislnitial Application was not submitted in accordance with the requirements of PartVlll-B-l of the 2016 QAP and the Cure Notice, the determination as to eligibility andscoring made by THDA is determinative. The review process described in Part Vlll-G is not available to applicants who do not submit additional documentation inaccordance with the requirements of Part Vlll-B-1 of the 2016 QAP and the CureNotice nclud without limitation, the time deadlines s d therein

Pursuant to the requirements of Part Vlll-C-6 of the 2016 QAP, The THDA Board ofDirectors will not consider requests to review decisions of the Tax GreditCommittee. All decisions of the Tax Credit Gommittee are final. No matters withrespect to eligibility under Part Vll-A or with respect to scoring under Part Vll-B willbe considered after the date of the Review

Pursuant to the requirements of Section a2fil(21of the Internal Revenue Gode of1986, as amended, and the requirements of the 2016 QAP, THDA will conduct a

financiat feasibility and reasonability review of the development in the event that thedevelopment is designated to receive a Preliminary Award Letter This review mayinclude adjustments to the information reflected in the Initial Application. THDAatso reserves the right, in its sole discretion, to reserve or allocate an amount of TaxCredits less than the amount requested in an lnitial Application, a Carryover

on, or a Final A lication

Page 2 of 2 TN I 6-045

Rebecca Scott


i '(f r5,\5c\-+".z7oo


Monday, May 02,20L612:L3 PM

Rebecca Scott; Ralph M. Perrey; Dwayne Barrett; Mike Hedges; Stewart Rutledge

Re: TN16-045 Vaughn StationVaughan St 16-045 Review Request.pdf

Mr. Perrey and Ms. Scott,

Please find attached our Request for Review for this application.


On Mon, Apr 25,2016 at 1:08 PM, Rebecca Scott <ßSgq!1-@)lhda.qg> wrote


)iì',,. k;t ¡\ s t j-zt++

Note: This email may contain PRIVILEGED and CONFIDENTIAL information. If you are not the intended

recipient, any dissemination, distribution, or copy of this email is prohibited. If you have received this email inerror, please delete it and immediately notify the sender.

1

May 2,2016

VIA BLECTRONIC MAIL


RE: 2016 Review Notice- Vaughan Station TN16-045

Dear Mr. Perrey:

This letter is in response to the Tennessee Housing Development Agency ("THDA") LowIncome Housing Tax Credit 2016 Review Notice ("Review Notice") for the above referenced

application. A copy of the referenced Review Notice is attached hereto. For the reasons set

fbrth below, THDA's determinations referenced in the Review Notice are arbitrary and

capricious and in violation of the THDA 2016 Qualified Allocation Plan ("QAP"). More to the

point, the attempt to determine financial feasibility of this or any project is not permitted untilafter such project has received a Preliminary Award Letter ("PAL"). No such PAL has been

remitted to the referenced project in accordance with QAP Part IX.A.

The Review Notice states that the application met all initial application criteria per the

"NONE" listed after Eligibility Requirements, Scoring Review, and Other Requirements.

Furthermore, the self-score from the application matches the score given by THDA, which both

reflect a score of 100. The Review Notice then includes the following:

"Pursuant to 942(m)(2) of the Internal Revenue Code, Part I of the THDA Low-Income Housing Tax Credit 2016 QAP (the"2016 QAP"), Part II-3 of the 2016 QAP,and Part IV-E of the 2016 QAP, THDA has determined that the proposed square footage

for the units in the development reflected in this Initial Application requires an allocationof Low-Income Housing Tax Credit that is in excess of what is necessary for the financialfeasibility of the development and its viability as a qualified low-income housing

development throughout the credit period."

The Review Notice theref'ore is based on the determination that the project was not

financially feasible and not viable as a qualihed low-income housing development throughoutthe credit period. However, these grounds violate the QAP and even the Review Notice itself,

which provides as follows:

"Pursuant to the requirements of Section a2@)(2) of the Internal Revenue Code

of 1986, as amended, and the requirements of the 2016 QAP, THDA will conduct a

financial feasibility and reasonability review of the development in the event thctt the

development is desígnuted to receive a prelímínary øward letter."



Nowhere in the QAP does it provide for a financial feasibility analysis as part ofeligibility or scoring. See Part VII-A Eligibility or Part VII-B Scoring. Accordingly, it is

arbitrary and capricious for THDA to determine the project is not feasible prior to issuing thePAL and working with the applicant to resolve concerns about the proposed project. See QAPPart IX.A.







We believe this project is f,inancially feasible and we have not requested more creditsthan necessary to build the units. The application complies with the QAP and conforms to market

demands. V/e would welcome the opportunity to meet with staff to confirm the foregoing upon

receipt of a PAL (and possibly work with staff toward an allocation of fewer credits thanrequested in the application, if appropriate), which is the typical process for underwritingapplications.

We would appreciate the opportunity to discuss in more detail. If you should have any

questions, please do not hesitate to contact me.

cc Dwayne Banett, Esq



2016 Review Notice


TN16-042Glover Hill PlaceHighway 4l I SMaryville, TN 37801

lnitial Application Criteria Nplldet:





Pursuant to 942(m)(2) of the lnternal Revenue Code, Part I of the THDA Low-lncome Housing Tax Cred¡t 2016 QAP (the "2016 QAP"), Part ll-3 of the 2016QAP, and Part lV-E of the 2016 QAP, THDA has determined that the proposedsquare footage for the units in the development reflected in this lnitialApplication requires an allocation of Low-lncome Housing Tax Credit that isin excess of what is necessary for the financial feasibility of the developmentand its viability as a qualified low-income housing development throughoutthe credit period.

Page I of2

For purposes of applying the per developer/related party limit specific in Part lV-Gof the 2016 QAP, the following lnitial Applications will be treated as related:TN16-042 Clover Hill PlaceTN16-043 Tallent PlaceTNl 6-044 Rosetree Garden

lf additional documentation to address items specified in the Gure Notice for thisInitial Application was not submitted in accordance with the requirements of PartVlll-B-1 of the 2016 QAP and the Cure Notice, the determination as to eligibility andscoring made by THDA is determinative. The review process described in Part Vlll-G is not available to applicants who do not submit additional documentation inaccordance with the requirements of Part Vlll-B-l of the 2016 QAP and the CureNotice (includ without limitation, the time deadlines s therein

Pursuant to the requirements of Part Vlll-G-6 of the 2016 QAP, The THDA Board ofDirectors will not consider requests to review decisions of the Tax CreditGommittee. All decisions of the Tax Credit Committee are final. No matters withrespect to eligibility under Part Vll-A or with respect to scoring under Part Vll-B willbe considered after the date of the Review Meeti

Pursuant to the requirements of Section a2fillzl of the lnternal Revenue Code of1986, as amended, and the requirements of the 2016 QAP, THDA will conduct a

financial feasibility and reasonability review of the development in the event that thedevelopment is designated to receive a Preliminary Award Letter This review mayinclude adjustments to the information reflected in the lnitial Application. THDAalso reserves the right, in its sole discretion, to reserve or allocate an amount of TaxCredits less than the amount requested in an lnitial Application, a Garryover

ication, or a Final Application.

Page2 of2

Rebecca Scott


Residential Housing Ventures <[email protected]>

Monday, May 02,2016 1-2:08 PM

Rebecca Scott; Ralph M. Perrey; Dwayne Barrett; David Hayes; Britton Jones

Re:TN16-042 Clover Hill Place

Clover Hill Pl 16-042 Review Req.pdf

Mr. Perrey,

Pursuant to the Review Notice Memo as well as to Part VIII-C of the 2016 QAP, please find attached our

written request for review for the referenced application.

Sincerely,David Hayes

On Mon, Apr 25,2016 at l:21 PM, Rebecca Scott <R-Sç[email protected]> wrote:


6t sl ) t,¿..¿.

6t t44"-z oo


recipient, any dissemination, distribution, or copy of this email is prohibited. If you have received this email in

error, please delete it and immediately notify the sender.

1

May 2,2016

VIA BLBCTRONIC MAIL


RE: 2016 Review Notice- Clover Hill Place TN16-042

Dear Mr. Perrey:



forth below, THDA's determinations referenced in the Review Notice are arbitrary and


point, the attempt to determine financial feasibility of this or any project is not permitted untilafter such project has received a Preliminary Award Letter ("PAL"). No such PAL has been






"Pursuant to $42(m)(2) of the Internal Revenue Code, Part I of the THDA Low-Income Housing Tax Credit 2016 QAP (the"2076 QAP"), Part II-3 of the 2016 QAP,and Part IV-E of the 2016 QAP, THDA has determined that the proposed square footage

for the units in the development reflected in this Initial Application requires an allocationof Low-Income Housing Tax Credit that is in excess of what is necessary for the financialfeasibility of the development and its viability as a qualified low-income housing


The Review Notice therefore is based on the determination that the project was not

financially feasible and not viable as a qualified low-income housing development throughoutthe credit period. However, these grounds violate the QAP and even the Review Notice itself,which provides as follows:

"Pursuant to the requirements of Section 42(m)(2) of the Internal Revenue Code


financial feasibility and reasonability review of the development ín lhe event that the

development ís designated to receive a prelimínary øwørcl letter."

In other words, THDA conducts f,rnancial feasibility and reasonability review ONLYAFTER the project has been determined to be eligible and ranked high enough to receive the



arbitrary and capricious for THDA to determine the project is not feasible prior to issuing the

PAL and working with the applicant to resolve concerns about the proposed project. See QAPPart IX.A.

Vy'e are respectfully requesting that the Tax Credit Committee confirm that there are no






We believe this project is financially feasible and we have not requested more creditsthan necessary to build the units. The application complies with the QAP and conforms to marketdemands. We would welcome the opportunity to meet with staff to confirm the foregoing uponreceipt of a PAL (and possibly work with staff toward an allocation of fewer credits thanrequested in the application, if appropriate), which is the typical process for underwritingapplications.

V/e would appreciate the opportunity to discuss in more detail. If you should have anyquestions, please do not hesitate to contact me.

Sincerely,

Haves

cc Dwayne Barrett, Esq.

Tennessee Housing Development AgencyLow lncome Housing Tax Gredit

2016 Review Notice

LIHTC Application Number:Development Address:

TN16-066Peery ViewHighway 96 & Drag Strip RdFairview, TN 37062

Initial Application Griteria Not Met:

Eligibility Requirements : NONE


Self Score: 100 THDA Score: 100

Other Requirements:

An addendum was submitted by the market study analyst defending the PMA (19.8 miles) distanceto the location of subject project and that only one LIHTC properly was located in Fairview.There are three LIHTC developments in Fairview plus one that was awarded in 2015. The PMAarea must be redefined to get a better understanding of the need and demand in Fairviewspecifically and can this redefined area handle all these units? The addendum submitted inresponse to the "Cure" notice is insufficient as it does not give pertinent data requested forthe 10 mile radius.

The following statement was inadvertently omitted from the Cure notice and because the subjectdevelopment does fall within the same group as the other proposed developments this will apply.

Page I of2

"Pursuant to $42(m)(2) of the Internal Revenue Code, Part I of the THDA Low-Income HousingTax Credit 2016 QAP (the"2016 QAP"), Part II-3 of the 2016 QAP, and Part IV-E of the 2016

QAP, THDA has determined that the proposed square footage for the units in the developmentreflected in this Initial Application requires an allocation of Low-Income Housing Tax Credit that isin excess of what is necessary for the financial feasibility of the development and its viability as aqualified low-income housing development throughout the credit period.

For purposes of applying the per developer/related party limit specific in Part IV-C of the 2016 QAP,the following Initial Applications will be treated as related: TN16-045; TN16-046; TN16-047 andTN16-066.

Pursuant to the requirements of Section 42(ml(21 of the lnternal Revenue Code of 1986, as amended,and the requirements of the 2016 QAP, THDA will conduct a financial feasibility and reasonabilityreview of the development in the event that the development is designated to receive a PreliminaryAward Letter Thls review may include adjustments to the information reflected in the lnitialApplication. THDA also reserves the right, in its sole discretion, to reserve or allocate an amount ofTax Credits less than the amount requested in an lnitial Application, a Carryover Application, or a Final

lf additional documentation to address items specified in the Cure Notice for this lnitial Applicationwas not submitted in accordance with the requirements of Part Vlll-B-l of the 2016 QAP and the CureNotice, the determination as to eligibility and scoring made by THDA is determinative. The reviewprocess described in Part Vlll-C is not available to applicants who do not submit additionaldocumentation in accordance with the requirements of Part Vlll-B-1 of the 2016 QAP and the CureNotice (including, without lim¡tation, the time deadlines specified therein).Pursuant to the requirements of Part Vlll-C-6 of the 2016 QAP, The THDA Board of Directors will notconsider requests to revlew decisions of the Tax Gredit Gommittee. All decisions of the Tax CreditCommittee are final. No matters with respect to eligibility under Part Vll-A or with respect to scoringunder Part Vll-B will be considered after the date of the Review Meeting.

Page 2 of2

Terry L. Montgomery



Monday, May 02, 20L6 12:11 PM

Terry L. Montgomery; Ralph M. Perrey; Mike Hedges; Dwayne Barrett; Stewart RutledgeRe:TN16-066 Peery ViewPeery View Review Request.pdf

Mr. Perrey and Ms. Montgomery,

Please fÏnd attached our Request for Review for this application.


On Mon, Apr25,2016 at 10:36 AM, Terry L. Montgomery <[email protected] wrote:

Good Moming. Please see attached Review Notice Memo and Review Notice.

Teny

îetn* .[Aø4nnætu¡

MultiF'amily Coordinator

Tennessee Housing Development Agency'

502 Deaderick St.,3'd Floor

Nashville, TN 37243

615-815-2146 phone I 615-564-2790 fax

Note: This email may contain PRIVILEGED and CONFIDENTIAL information. If you are not the intendedrecipient, any dissemination, distribution, or copy of this email is prohibited. If you have received this email inerror, please delete it and immediately notify the sender.

1

May 2,2076

VIA ELECTRONIC MAIL

Tennessee Housing Development AgencyAttn: Ralph PerreyAndrew Jackson Building502 Deaderick Street, Third FloorNashville, Tennessee 37 243

RE: 2016 Review Notice- Peery View TN16-066

Dear Mr. Perrey:




capricious and in violation of the THDA 2016 Qualified Allocation Plan ("QAP"). More to thepoint, the attempt to determine fìnancial feasibility of this or any project is not permitted untilafter such project has received a Preliminary Award Letter ("PAL"). No such PAL has been



"NONE" listed after Eligibility Requirements, Scoring Review, and Other Requirements.Furthermore, the self-score from the application matches the score given by THDA, which both


"Pursuant to $42(m)(2) of the Internal Revenue Code, Part I of the THDA Low-Income Housing Tax Credit 2016 QAP (the "2016 QAP"), Part II-3 of the 2016 QAP,and Part IV-E of the 2016 QAP, THDA has determined that the proposed square footage

for the units in the development reflected in this Initial Application requires an allocationof Low-Income Housing Tax Credit that is in excess of what is necessary for the financialfeasibility of the development and its viability as a qualified low-income housingdevelopment throughout the credit period."

The Review Notice therefore is based on the determination that the project was notfinancially feasible and not viable as a qualif,red low-income housing development throughoutthe credit period. However, these grounds violate the QAP and even the Review Notice itself,which provides as follows:



financial feasibility and reasonability review of the development in lhe event that thedevelopment ís desígnated to receive a prelimìnøry award lelter."

In other words, THDA conducts financial feasibility and reasonability review ONLYAFTER the project has been determined to be eligible and ranked high enough to receive thePAL. THDA has not notified the applicant of a PAL in accordance with QAP Part IX.A.Reservation of Tax Credits.

Nowhere in the QAP does it provide for a frnancial feasibility analysis as part ofeligibility or scoring. See Part VII-A Eligibility or Part VII-B Scoring. Accordingly, it isarbitrary and capricious for THDA to determine the project is not feasible prior to issuing thePAL and working with the applicant to resolve concerns about the proposed project. See QAPPart IX.A.


outstanding issues with eligibility and scoring of the referenced application, Further, we are





We believe this project is financially feasible and we have not requested more credits

than necessary to build the units. The application complies with the QAP and conforms to market

demands. We would welcome the opportunity to meet with staff to conf,trm the foregoing upon

receipt of a PAL (and possibly work with staff toward an allocation of fewer credits than

requested in the application, if appropriate), which is the typical process for underwritingapplications.

Market demand has been fully established in previous responses, and the Review Noticerequests items which are not only not contained by the QAP, but they are violative of industrystandard market study methodologies. Please accept previous responses as incorporated byreference herein as if fully set forth herein. The market study and subsequent responses fullysatisf, all requirements of the QAP with regard to market analysis requirements, and the "tenmile radius" request made in the Review Notice is not only contained nowhere in the QAP, it isin direct conflict with established market study industry standards, as noted in previous

responses.

We would appreciate the opportunity to discuss in more detail. If you should have anyquestions, please do not hesitate to contact me.

cc: Dwayne Barrett, Esq.

Mike

Tennessee Housing Development AgencyLow lncome Housing Tax Gredit

2016 Review Notice


TN16-046Woodall RidgeSunnyview DriveLebanon, TN 37090

lnitial Application Criteria Not Met:

Eligibility Requirements NONE



Other Requirements:

Pursuant to $a2(m)(2) of the Intemal Revenue Code, Part I of the THDA Low-Income Housing TaxCredit 2016 QAP (the "2016 QAP"), Part II-3 of the 2016 QAP, and Part IV-E of the 2016 QAP,THDA has determined that the proposed square footage for the units in the development reflectedin this Initial Application requires an allocation of Low-Income Housing Tax Credit that is inexcess of what is necessary for the financial feasibility of the development and its viability as a

qualified low-income housing development throughout the credit period.

For purposes of applying the per developer/related party limit specific in Part IV-C of the 2016 QAP'the following Initial Applications will be treated as related: TN16-045; TN16'046: TN16-047 andTN16-066.

Pagel of2

lf additional documentation to address items specified in the Cure Notice for this lnitial Applicationwas not submitted in accordance with the requirements of Part Vlll-B-1 of the 2016 QAP and the CureNotice, the determination as to eligibility and scoring made by THDA is determinative. The reviewprocess described in Part Vlll-G is not available to applicants who do not submit additionaldocumentation in accordance with the requirements of Part Vlll-B-1 of the 2016 QAP and the CureNotice (including, without limitation, the time deadlines specified therein).Pursuant to the requirements of Part Vlll-C-6 of the 2016 QAP, The THDA Board of Directors will notconsider requests to review decisions of the Tax Gredit Committee. All decisions of the Tax CreditCommittee are final. No matters with respect to eligibility under Part Vll-A or with respect to scoringunder Part Vlt-B will be consldered after the date of the Review Meeting.

Pursuanttotherequirementsof Section 42(ml(21 of thelnternal RevenueCodeof l986,asamended,and the requirements of the 2016 QAP, THDA will conduct a financial feasibility and reasonabilityreview of the development in the event that the development is designated to receive a PreliminaryAward Letter This review may include adjustments to the information reflected in the InitialApplication. THDA also reserves the right, in its sole discretion, to reserve or allocate an amount ofTax Gredits less than the amount requested in an lnitial Application, a Carryover Application, or a Final

cation.

Page2 of2

Terry L. Montgomery


Eagle Residential Development < eag leresdev@ g mail,com >

Monday, May 02,20L612:L5 PM

Terry L. Montgomery; Ralph M. Perrey; Dwayne Barrett; Mike Hedges; Stewart Rutledge

Re: TNL6-046 Woodall Ridge

Woodall Rdg TNL6-046 Review Req,pdf

Mr. Perrey and Ms. Montgomery,

Please find attached our Request for Reúew for this application.


On Mon, Apr25,2016 at 10:36 AM, Terry L. Montgomery <[email protected]> wrote:

Good Morning. Please fee attached Review Notice Memo and Review Notice.

Terry

îauç "Mutaonwu¡

MultiF amily Coordinator

Tennessee Housing Development Agenc-v

502 Deaderick St.,3'd Floor

Naslrville, TN 37243

615-815-2146 phone / 615-564-2790 lax

Note: This email may contain PRIVILEGED and CONFIDENTIAL information. If you are not the intendedrecipient, any dissemination, distribution, or copy of this email is prohibited. If you have received this email inerror, please delete it and immediately notify the sender.

1

May 2,2016

VIA ELECTRONIC MAIL


RE: 2016 Review Notice- Woodall Ridge TN16-046

Dear Mr. Perrey:

This letter is in response to the Tennessee Housing Development Agency ("THDA") LowIncome Housing Tax Credit 2016 Review Notice ("Review Notice") for the above referencedapplication. A copy of the referenced Review Notice is attached hereto. For the reasons setforth below, THDA's determinations referenced in the Review Notice are arbitrary andcapricious and in violation of the THDA 2016 Qualified Allocation Plan ("QAP"). More to thepoint, the attempt to determine financial feasibility of this or any project is not permitted untilafter such project has received a Preliminary Award Letter ("PAL"). No such PAL has beenremitted to the referenced project in accordance with QAP Part IX.A.

The Review Notice states that the application met all initial application criteria per the"NONE" listed after Eligibility Requirements, Scoring Review, and Other Requirements.Furthermore, the self-score from the application matches the score given by THDA, which bothreflect a score of 100. The Review Notice then includes the following:

"Pursuant to 542(m)(2) of the Internal Revenue Code, Part I of the THDA Low-Income Housing Tax Credit 2016 QAP (the"2016 QAP"), Part II-3 of the 2016 QAP,and Part IV-E of the 2016 QAP, THDA has determined that the proposed square footagefor the units in the development reflected in this Initial Application requires an allocationof Low-Income Housing Tax Credit that is in excess of what is necessary for the financialfeasibility of the development and its viability as a qualified low-income housingdevelopment throughout the credit period."

The Review Notice therefore is based on the determination that the project was notfinancially feasible and not viable as a qualified low-income housing development throughoutthe credit period, However, these grounds violate the QAP and even the Review Notice itself,which provides as follows:

"Pursuant to the requirements of Section a2@)(2) of the Internal Revenue Codeof 1986, as amended, and the requirements of the 2016 QAP, THDA will conduct a

financial feasibility and reasonability review of the development in the event that thedevelopment ís designøted to receive a prelimínary award letter."

In other words, THDA conducts financial feasibility and reasonability review ONLYAFTER the project has been determined to be eligible and ranked high enough to receive thePAL, THDA has not notified the applicant of a PAL in accordance with QAP Part IX,A.Reservation of Tax Credits.




'We are respectfully requesting that the Tax Credit Committee confirm that there are no


respectfully requesting the Tax Credit Committee confìrm the financial feasibility and





than necessary to build the units. The application complies with the QAP and conforms to market

demands. We would welcome the opportunity to meet with staff to conftrm the foregoing upon


requested in the application, if appropriate), which is the typical process for underwritingapplications.



Sincerely,


Tennessee HousingDevelopment AgencyLe aúing Íennesse e I{ome

Lorry-lncorne Housing Tax Credit2016 Review Notice


TN16-044Rosetree GardensE. side of Hwy. 53Jonesborough, TN 37885

lnitial Application Criteria Not Met:

EligibilityRequirements: NONE



Other Requirements:

Pursuant to $42(m)(2) of the lnternal Revenue Code, Part I of the THDA Low-lncome HousingTax Credit 2016 QAP (the "2016 QAP"), Part ll-3 of the 2016 QAP, and Part lV-E of the 2016QAP, THDA has determined that the proposed square footage for the units in the developmentreflected in this lnitial Application requires an allocation of Low-lncome Housing Tax Credit thatis in excess of what is necessary for the financial feasibility of the development and its viabilityas a qualified low-income housing development throughout the credit period.

For purposes of applying the per developer/related party limit specific in Part lV-G of the 2016 QAP, thefollowing lnitialApplications will be treated as related: TN16.042 Clover Hill Place; TN16-043 Tallent Place;and TN16-044 Rosetree Gardens.

lf additional documentation to address items specified in the Cure Notice for this lnitlal Application was notsubmitted in accordance with the requirements of Part Vltl-B-l of the 2016 QAP and the Cure Notlce, thedetermination as to ellgibility and scoring made by THDA is determinative. The review process described inPart Vlll-G is not available to applicants who do not submit additional documentation in accordance with therequlrements of Part Vlll-B-1 of the 2016 QAP and the Cure Notice (including, wlthout limltation, the timedeadlines ified

Page I of2

Joe Bethel



Monday, May 02,20L612:09 PM

Joe Bethel; Ralph M. Perrey; David Hayes; Britton Jones; Dwayne Barrett

Re:TN16-044 Rosetree Gardens Review NoticeRosetree Gard L6-044 Review Req.pdf

Mr. Perrey,

Pursuant to the Review Notice Memo as well as to Part VIII-C of the 2016 QAP, please f,rnd attached our



On Mon, Apr25,2016 at 1:28 PM, Joe Bethel <[email protected]) wrote:

Good afternoon,

Please see the attached memo and Review Notice.

Best regards,

Ito ßelncl

MultiFamily Coordinator


615-815-2147

*THDA strives to provide excellent serv¡ce to the citizens of Tennessee, ourprogram rec¡p¡ents, the business commun¡ty, and our fellow employees bybeing profess¡onal/ respectful and efficient in fulfilling our mission."


recipient, any dissemination, distribution, or copy of this email is prohibited. If you have received this email inerror, please delete it and immediately notify the sender.

}l4ay 2,2016

VIA ELECTRONIC MAIL


RE: 2016 Review Notice- Rosetree Gardens TN16-044

Dear Mr. Perrey:





point, the attempt to determine financial feasibility of this or any project is not permitted untilãfter such project has received a Preliminary Award Letter ("PAL"). No such PAL has been

remitted to the referenced project in accordance with QAP Part IX'A'





"Pursuant to $a2(m)(2) of the Internal Revenue Code, Part I of the THDA Low-

Income Housing Tax Credit 2016 QAP (the "2016 QAP"), Part II-3 of the 2016 QAP,and Part IV-E of the 2016 QAP, THDA has determined that the proposed square footage

for the units in the development reflected in this Initial Application requires an allocation

of Low-Income Housing Tax Credit that is in excess of what is necessary for the financial

feasibility of the development and its viability as a qualifTed low-income housing



financially feasible and not viable as a qualified low-income housing development throughout

the credit period. However, these grounds violate the QAP and even the Review Notice itself,




financial feasibility and reasonability review of the development in the event that the

development ìs desìgnated to receíve a prelimínary awatd letter."











arbitrary and capricious,


than necessary to build the units, The application complies with the QAP and conforms to market

demands. We would welcome the opportunity to meet with staff to confirm the foregoing upon


requested in the application, if appropriate), which is the typical process for underwriting

applications.



Sincerely

Hayes


Tennessee HousingDevelopment AgencyLea[ing tennesse e I{ome

Low-lncome Housing Tax Credit2016 Review Notice


TN16-043Tallent PlaceW. Side of Tallent LaneVonore, TN 37885

lnitial Application Griteria Not Met:


Scoring Review:

The zoning ordinance submitted in response to the Cure Notice is not sufficient to show thatcurrent zoning and other local land use regulations permit the development as proposed or thatno such regulations currently apply to the proposed development (due to the required approvalof a Special Exception from the Vonore Board of Zoning Appeals). No points will be awardedfor demonstrating that current zoning and other local land use regulations permit thedevelopment as proposed or that no such regulations currently apply to the proposeddevelopment.


Other Requirements:

Pursuant to $42(m)(2) of the lnternal Revenue Code, Part I of the THDA Low-lncome HousingTax Credit 2016 QAP (the "2016 QAP'), Part ll-3 of the 2016 QAP, and Part lV-E of the 2016QAP, THDA has determined that the proposed square footage for the units in the developmentreflected in this lnitial Application requires an allocation of Low-lncome Housing Tax Credit thatis in excess of what is necessary for the financial feasibility of the development and its viabilityas a qualified low-income housing development throughout the credit period,

For purposes of applying the per developer/related party limit specific in Part lV-C of the 2016 QAP' thefollowing lnitialApplications will be treated as related: TN16- 042 Glover Hill Place;TN16-043 Tallent Place;and TN16-044 Rosetree Gardens.

Page I of2

lf additional documentation to address items specified in the Cure Notice for this lnitial Application was notsubmitted in accordance with the requirements of Part Vlll-B-1 of the 2016 QAP and the Cure Notice, thedetermination as to eligibility and scoring made by THDA is determinative. The review process described inPart Vlll-C ls not available to applicants who do not submit additional documentation in accordance with therequirements of Part Vlll-B-1 of the 2016 QAP and the Cure Notice (including, without limitation, the timedeadlines cified therein

Pursuant to the requirements of Section a2@l(21of the lnternal Revenue Code of 1986, as amended, an d therequirements of the 2016 QAP, THDA will conduct a financial feasibility and reasonability review of thedevelopment in the event that the development is designated to receive a Preliminary Award Letter Thisreview may include adjustments to the information reflected in the lnitial Application. THDA also reservesthe rlght, in its sole discretion, to reserve or allocate an amount of Tax Credits less than the amountrequested in an lnitial A ication, or a Final Application.r

Pursuant to the requirements of Part Vlll-C-6 of the 2016 QAP, The THDA Board of Directors will not considerrequests to review decisions of the Tax Credit Committee. All decisions of the Tax Credit Committee arefinal. No matters with respect to eligibility under Part Vll-A or with respect to scoring under Part Vll-B will beconsidered after the date of the Review Meetin

Page 2 of2

Joe Bethel



Monday, May 02,2016 12:09 PM

Joe Bethel; Ralph M. Perrey; Britton Jones; David Hayes

Re:TNL6-043 Tallent Place Review Notice

Tallent Pl 043 Review Req.pdf

Mr. Perrey,

Pursuant to the Review Notice Memo as well as to Part VIII-C of the 2016 QAP, please find attached our



On Mon, Apr 25,2016 at 1:28 PM, Joe Bethel <JBçlbgl@lhdê.o4) wrote

Good afternoon,

Please see the attached memo and Review Notice.

Best regards,

,ßp ßelfrel

MultiFamily Coordinator


615-815-2147

*THDA strives to provide excellent service to the citizens of Tennessee' ourprogram rec¡p¡ents, the business commun¡ty, and our fellow employees bybeing profess¡onal, respectful and efficient in fulfilling our mission."


recipient, any dissemination, distribution, or copy of this email is prohibited. If you have received this email in

error, please delete it and immediately notify the sender.

}/'ay 2,2016

VIA E,LECTRONIC MAIL


RE: 2016 Review Notice- Tallent Place TN16-043

Dear Mr. Perrey:


application. A copy of the referenced Review Notice is attached hereto, For the reasons set



point, the attempt to determine fìnancial feasibility of this or any project is not permitted untilàfter such project has received a Preliminary Award Letter ("PAL"). No such PAL has been

remitted to the referenced project in accordance with QAP Part IX'A'


"NONE" listed after Eligibility Requirements, Scoring Review, and Other Requirements. The

Review Notice then includes the following:

"Pursuant to $42(m)(2) of the Internal Revenue Code, Part I of the THDA Low-Income Housing Tax Credit 2016 QAP (the "2016 QAP"), Part II-3 of the 2016 QAP,and Part IV-E of the 2016 QAP, THDA has determined that the proposed square footage

for the units in the development reflected in this Initial Application requires an allocation

of Low-lncome Housing Tax Credit that is in excess of what is necessary for the financial

feasibility of the development and its viability as a qualified low-income housing



financially feasible and not viable as a qualified low-income housing development throughout

the credit period. However, these grounds violate the QAP and even the Review Notice itself,


"Pursuant to the requirements of Section 42(m)(2) of the Internal Revenue Code


financial feasibility and reasonability review of the development in the event that the

development is desígnøted to receíve ø prelíminary award lelter'"

In other words, THDA conducts financial feasibility and reasonability review ONLYAFTER the project has been determined to be eligible and ranked high enough to receive thePAL. THDA has not notified the applicant of a PAL in accordance with QAP Part IX.A,Reservation of Tax Credits.


arbitrary and capricious for THDA to determine the project is not feasible prior to issuing thePAL and working with the applicant to resolve concerns about the proposed project. See QAPPart IX.A.








than necessary to build the units. The application complies with the QAP and conforms to marketdemands. We would welcome the opportunity to meet with staff to confirm the foregoing upon


requested in the application, if appropriate), which is the typical process for underwritingapplications,

With regard to the zoning question, please accept our response and attachments submitted

to Joe Bethel dated Friday, April 15, 2016 at 3:17 PM as our response to this question and please

accept that response and attachments as incorporated by reference as if it were completely set outherein.



Sincerely,

David Hayes

cc: Dwayne Barrett, Esq.

Tennessee HousingDevelopment AgencyL e a[ing Íenne sse e l{ome

Low-lncome Housing Tax Credit2016 Review Notice


TN16-034Goodwin Court and Whispering Pines1 Goodwin Cr. And ll5 Pinewood DriveCrossville, TN 38555

lnitial Aoplicatio Criteria Not Met:


Scoring Review:

Regarding points claimed for Residency Preference for Households with Children, the responseto the 48 hour email states "At each site (Goodwin Court and Whispering Pines) there is acommunity building which is located on-site and available for tenant use...those communitybuildings contain the subject computer rooms that were indicated in the scoring section," Theresponse to the Cure Notice states that "the community buildings are not owned by theapplicant's project partnership". No points can be awarded for Residency Preference forHouseholds with Children.


Other Requirements:

The property control documents submitted do not support the acquisition costs shown in theonline application and on Attachment 1 I and Attachment 12. Per the QAP Section Vll.A. 1 0.a,

"The acquisition cost for Tax Credit purposes shall not exceed the lesser of the purchaseprice or the appraised value." $5,OOO will be allowed for acquisition costs ($1OO per yearrent time 50 years).

The number of buildings in 2016 Phase ll lnitial Application (submitted on CD ROM) and in theonline application is incorrect, The repty to the Cure Notice states that the communitybuildings are not owned by the applicant's project partnership, and therefore should notbe reflected on the application as non-residential buildings, but that is not consistentwith the property control documents submitted. This item remains uncured.

The shape file submitted in response to the Cure Notice still cannot be opened, This itemremains uncured.

Page I of2

lf additional documentation to address items specified in the Cure Notice for thissubmitted in accordance with the requirements of Part Vlll-B'1 of the 2016 QAP

deadlines specified therei

lnitial Application was notand the Cure Notice, the

determination as to eligibility and scoring made by THDA is determinative. The review process described in

Part Vlll-G is not availa-ble to applicants who do not submit additional documentation in accordance with therequirements of Part Vlll-B.1 of the 2016 QAP and the Cure Notice (including, without limitation, the time

Pursuant to the requirements of Part Vlll.C.6 of the 2016 QAP, Therequests to review decisions of the Tax Gredit Committee. All dfinal. No matters with respect to eligibility under Part Vll'A or withconsidered after the date ofthe Review

THDA Board of Directors will not considerecisions of the Tax Credit Gommittee arerespect to scoring under Part Vll-B will be

Purs uant to the requ treme nts of Section 42(mX2l of the lnterna Revenue Code of 1 986, as amen ded an d therequl rements of the 2016 QAP TH DA wt cond uct a fi nancial feasi bi lity and reaSona b¡ lity revtew of the,

devel opment tn the event that the develop me nt ts designated to recetve a P rel tm tna ry Awa rd Letter Th ts

revtew may tnclude adjustments to the inform ation refle cted in the I nitial Appl icati on THDA lso reservesthe right, in its sole discretion, to

uested in an lnitial Application, areserve o allocate an amount of Tax Gredits less tha n the amount

r ication, or a Final Application

Page 2 of 2

õl,v^(-çl-- É Voo449 /e-t/t¿(^r

Joe Bethel


Elaina Carbone < Elaina.Carbone@greyco,com >

Monday, May 02,2016 L:02 PM

Joe Bethel

TN16-034 Goodwin Court and Whispering Pines

III. Supporting Docs - Crossville PMA.shp;lll. Suppofting Docs - Crossville PMA.shx;lll.

Supporting Docs - Crossville Sites May; 0. THDA Review Notice Response 20760502 -

Goodwin Courl and Whispering Pines.docx;1. Supporting Docs - Amended Ground

Lease.pdf; II-a, Supporting Docs - Goodwin Court - Site Photos.pdf; II-b. SupportingDocs - Whispering Pines - Site Photos.pdf;lll. Supporting Docs - CROSSULLE PMA.DBF;

IIL Supporting Docs - Crossville PMA.prj

Joe,

Good afternoon, Attached you will find the "0. THDA Review Notice Response" document, which is the applicant's

formal response to the Review Notice received last week. The supporting documents (Attachments l-lll)are also

enclosed, Please do not hesitate to reach out to us with any questions pertaining to this response.

We look forward to continuing to work with you on this important project.

Sincerely,

Elaina CarboneDirector of DevelopmentGreystone Affordable Housing lnitiatives LLC

4025 Lake Boone TrailSuite 209

Raleigh, NC 27607Direct: 919-744-2755Cell: 919-239-9988ela ina.carbone @greyco.comwww.Breyco.com

"Where People Motter"

NOTICE: This e-mail and any attachments contain confidential information that may be legally privileged. Ifyou are not the intended recipient, you must not review, retransmit, print, copy, use or disseminate it. Please

immediately notify us by return e-mail and delete it. If this e-mail contains a forwarded e-mail or is a reply to aprior email, the contents may not have been produced by the sender and therefore we are not responsible for itscontents.

This notice is automatically appended to each e-mail. It is the recipient's responsibility to take measures to

ensure that this e-mail is virus free, and no responsibility is accepted by Greystone for any loss or damage

arising in any way from its use,r¡ rt * ,& * ¡1. ,k ,1. tl. t& ,1.

1

Joe Bethel


Elaina Carbone < [email protected] >

Monday, May 02,2016 1:02 PM

Joe Bethel

FW: Crossville Shape Files

Crossville PMA May.zip; Crossville Sites May.zip

Joe,

Attached are the Market Study Shape Files, directly from the market study provider, in case you are still not able to open

them from the previous email I just sent.

Thanks,

Elaina CarboneDirector of DevelopmentGreystone Affordable Housing lnitiatives LLC

4025 Lake Boone TrailSuite 209

Raleigh, NC 27607

Direct: 979-744-2755Cell: 919-239-9988ela [email protected],com

"Where People Motter"

From : woodsresea rch@aol,com [ma ilto :woodsresearch@aol,com]Sent: Monday, May 02,2016 10:04 AM

To: Elaina Carbone; Caitlin Waldie; Amie CofiniSubject: Crossville Shape Files

Good morning,

It seems we had some technical difficulties when originally creating these shape files. Attached arecorrected/repaired files. Please let me know if you need anything else.

Thanks

Amber KerseyProject ManagerWoods Research, Inc,8o3-7Bz-77oo

NOTICE: This e-mail and any attachments contain confidential information that may be legally privileged. Ifyou are not the intended recipient, you must not review, retransmit, print, coPY, use or disseminate it. Please

immediately notify us by return e-mail and delete it. If this e-mail contains a forwarded e-mail or is a reply to aprior email, the contents may not have been produced by the sender and therefore we are not responsible for its

contents.

1

This notice is automatically appended to each e-mail. It is the recipient's responsibility to take measures toensure that this e-mail is virus free, and no responsibility is accepted by Greystone for any loss or damage

arising in any way from its use.

2

This memo has been prepared as a formal response to THDA's 2016 Review Notice, which was received

by the Applicant on April 25,2016.

We sincerely request your reconsideration for the following: (1) to reconsider the scoring of the project

under the Residency Preference for Household with Children and (2) to satisfy the other requirements listed

in the Review Notice,

THDA Comment:Regarding points claimed for Residency Preference for Households with Children, the response to the 48

hour email states "At each site (Goodwin Courl and Whispering Pines) there is a community building which

is located on-site and available for tenant use,,,those community buildings contain the subject computer

rooms that were indicated in the scoring section," The response to the Cure Notice states that "the

community buildings are not owned by the applicant's project padnership", No points can be awarded forResidency Preference for Households with Children.

Applicant Response:We request that you reconsider the scoring for this category for the Applicant, We believe that the

requested polnfs for Residency Preference for Househo/ds with Children should be awarded to the

Applicant, because the subject propefty and its residenfs will have ful/ access to the seruices and amenities

provided by the Crossyi//e Housing Authority ('CHA) in these community buildings, which are also located

on the site of the project.

The community buildings witt be owned by CHA, which is also the same entity that is the General Paftner of

the Applicant project parlnership, Ihis is required by HUD even though the tenants of the Applicant proiect

paftnership will have ful/ access to the community buildings,

White the community buitding witt be available to the residents of the project, as promised in the LIHTC

application, the community buildings fhemse/yes must remain owned by CHA in order for the buildings to

continue to receive capital and operating subsidies from HUD that pay for many of the seruices that CHA

provides, tf the community buildings are transferred to the tax credit paftnership, these subsidies will no

longer be etigibte to be funded through HIJD, and either (1) CHA will not be able to afford to provide these

socra/ seryices or (2) the project pañnership will need to pay for the seruices out of its operations, which

would financiatly burden the project and make the much-needed renovations of the proiects financially

infeasible.

By maintaining the ownership of the community buildings under CHA, the residents can receive greater

serylces and amenities and the project can leverage the additional outside funding from HUD to the benefit

of the project, CHA, THDA and fhe residenfs,

THDA Comment:The property control documents submitted do not support the acquisition costs shown in the online

application and on Attachment'11 and Attachment 12,Per the QAP Section Vll.A,10,a, "The acquisition

cost for Tax Credit purposes shall not exceed the lesser of the purchase price or the appraised

value," $5,000 will be allowed for acquisition costs ($100 per year rent time 50 years),

Applicant Response:We request that you reconsider the tax credit eligible basis for acquisition cosfs. We believe that the

acqu¡sit¡on cosf, as reftected in our apptication and development budget, should be $1,485,000, which is

the purchase price reflected in the attached amended sround lease.

The ground lease that was previously provided as evidence of slfe control in the application onlv showed

the ongoing $100 ground lease fee for the land that is paid annually from project operations ($100 for 50

years), The ground /ease was subsequently amended to reflect a one-time payment at the closing of the

tax credit financing of $1,485,000 for use of the building and improvements, which are referred to as "The

Facility" in the ground /ease, The $1,485,000 matches the value of the land and building in the appraisal,

which was atso submitted to THDA. Accordingly, the eligible portion for acquisition tax credit basls of fhis

one-time payment under the ground /ease ls $1,105,000, which also matches the previously submitted

appraisal and apptication, The remaining $380,000 of the purchase price was allocated to land and is not

inctuded in tax credit basis, which matches the appraisal and tax credit application, The $100 annualfee

for 50 years rs inctuded in the prolorma operating expense projection (along with other proiect expenses)

within the Other GeneralExpenses line-item.

The amendment to the ground /ease is attached fo fhls memo as Attachment L

P/ease note that the question regarding the purchase price, as reflected in the site control document, did

not appear on the Cure Memo (received April 8, 2016), Therefore, the applicant was not provided the

opportunity to amend the document untilthis Review Noflce was received,

THDA Comment:The number of buildings in 20'16 Phase ll lnitial Application (submitted on CD ROM) and in the online

application is incorrect, The reply to the Cure Notice states that the community buildings are not

owned by the applicant's project partnership, and therefore should not be reflected on the

application as non.residential buildings, but that is not consistent with the property control

documents submitted. This item remains uncured.

Applicant Response:The Phase tt lnitiat Apptication and the Ontine Application correctly reflect 61 residential buildings and no

community buildings, the reasoning for which is described in the above response, The number of buildings

is correct in the apptication, The community buildings will be carved out of the description of Land and

Facitity in the finat ground tease that will be executed prior to closing. The information that was originally

submitted as supporflng documentation for this question in the Email Notice has been included as

Attachment ll,

THDA Comment:The shape file submitted cannot be opened, Please submit a shape file that is accessible,

Applicant Response:A re{ormatted shape fite without any file corruptionissues is attached as Attachment lll. lt has also been

submitted directly to THDA from the market study provide1 Woods Research, lnc,

Thank you very much for your consideration, Please feel free to contact us with any questions, comments

or further requests, We look fonruard to working with you,

I)evelopers Forum Notes

April 19,2016

1, Mike Hedges:

A. Reducing basis boost - handed out a sheet to THDA staff in attendance with an

example using pro forma budget on va¡ious counties without boost, setting rents at

90% of maximum, 60 units, $89 costs per squ¿Ìre foot, .93 cents on credit price. Out

of95 counties only 13 would be viable without boost and only 2 ofthose counties will

work. There are other better ways to solve siting issues without removing boost.

B . Tie breaker - this changed 2 or 3 years ago when large tiers were included in the County

Needs Score. Need to spread out by reducing the large size tiers. Last year, one had

to go to 52 applications to find the next in line with a one point differential.

C. Set-asides - Adding more set-asides will take away from the program and causes

unintended consequences. Don't need scholar house or innovative round especially ifthey are not appealable.

D. Is not in favor ofthe no appeal in the Irurovation round and does not like the subjectivity

in the round

2. David Arning:

A. Would like to postpone adding additional set-asides until RAD set-aside is complete

and removed. Taking on too much at one time.

B. Basis boost - RAD deals are locked in well below market but those that are not RAD

removing the boost will not be good.

C. Need to consider Bond timing and the 15 year application requirement, as developers

need some time to get a deal up and running. Also reconsider removing old lease

restrictions moving forward on deals coming in for re-syndication.

D. Glad to see more Bond activity and ECD consideration on transfer of bond authority to

THDA.

3. Mark Straub:

A. Supports comments on basis boost.

B. Tie breaker is greatest challenge. Consider a development cost iimit for tie breaker.

(Total Development Cost C'TDC) (See HUD) limits will help control costs). How

can we reduce square foot or real construction costs and how would square foot cost be

maintained. TDC limit would have higher quality. Consider other additional funding,

i.e., CDBG or vouchers for additional leveraging to get a better, viable project. The

current system encourages cheap products so quality is diminished and games are

played with square footage by building excessively large units. Deals should be drawn

to more community development with sunounding leverage and long term viability.

Additional leverage mechanisms-Federal Home Loan Bank, CDBG, HOME.

C. County needs sco¡es keeps from having fair allocations across the entire state and as

an indicator, the number of applications dropped which is a concern on the developer

side. Need to eliminate or adjust county score for a variance. (Alabama has a 5 point

spread and Georgia has a 20 point spread). Need to create a scoring differential,

D. Supports keeping basis boost

E. The goal should be higher quality with controlled cost

4. Joyce Floyd:

A. RAD is near and dear. 30Yo RAD set-aside has been critical. She does worry about

hindering program if more set-asides a¡e added so maybe postpone until RAD deals

are completed. It's bettel to do something really well. RAD deals won't be done in 2

years, consider extending the RAD set-aside.

B. Enterprise Green - concemed about t}re costs.

C. The Developer Experience has caused ce¡tain entities to pull funds that could be used

towards the development to purchase developer experience from $300K to $350 K.

Feels that mixed finance deal experience should be allowed for Developer Experience.

D. Phases and amenities - concerned about 4 phases having to build 4 playgrounds, etc.

E. Amenities-allow an MOU to be used fo¡ existing facilities in place like a boys and girls

club instead of building a community room.

5. Phyllis Vaughn:

A. Ditto Joyce's comments on Enterprise Green. Concemed about costs. $1,000 per unit

plus a need to hire a consultant to make sure Enterprise Green is met which takes homes

away from families by doing this, and Tennessee does not offer any soft funds to absorb

the costs.

B. Eliminate the Scholar House Proposal as it is too costiy as the average submittal is

$15K for a gamble over an unknown amount ofLIHTC. Does not like the subjectivity.

Feels that there are too many set asides, this would work better in the Housing Trust

Fund. No syndicator would have an appetite for this type ofdeal.

C. Innovative Round - doesn't like the fact that staff chooses as it puts them at risk of

being called out be disgruntled developers that don't get an allocation. By adding more

set-asides it takes away from new constructions.

D. Tie breaker - now that the Bond program works, the current tiebreaker between new

and rehab gives rehab an advantage not new construction - should change that to

promote new construction in the 90lo arena.

E. Preservation - remove or reduce set-aside since the Bond program is now working.

The 9Yo progam is the only thing that works for new construction. Lower the

preservation set aside to 10% since the bond program is working so well.

F. County needs score has too many in one tier. Too much pressure on the tie breaker.

G. Ditto with Hedges and Aming on basis boost.

H. Market Study language * asked Mike Blade for clarification.

Lertchlìeld, KY 42754Olîrce: (270) 259-5601Fax (270) 259-607'1

antho¡r',elmcr¡câwabuck.com

eïoL pledse rctun il to the señet and send a copy ot nol¡ly: CwûCopiet@-anailcon then delele IE connunical¡on and desw any @pies. ll should be exprssly undeßtood lhal

rcce¡pt by a ütid pañy.

- - - - -onigínal l''tessage- - - --Fnom: Joe Bethel Imailto: J Bethellôthda . orÊ ]Sent: Thunsday, octoben ø8, 2ø15 2tøø PM

To: Anthony EImore <anthonv. elmonelôwabuck. com>Subject: RE: Tie Bneaken Pnoposal

Anthony,

Thank you, I have already forwarded youn email to my dinecton and the nest of oun division

Joe BethelMultiFamily CoondinatonTennessee Housing Development Agency6t5 -8t5 -2147

"THDA strives to pnovide excellent senvice to the citizens of Tennessee, oun programnecipients, the business communityr and our fellow employees by being professional,respectful and efficient in fulfilling oun mission."

- - - - -oniginal Message- - - - -Fnom: Anthony Elmone I rnailto: anthony. elmore@wabu c k. com ]Sent: Thursday, october ø8, 2øf5 l2tø7 PM

To: Joe Bethel <JBethel@thda, ong>Subject: Tie Bneaker Pnoposal

J oe,ft was a pleasure seeing you again. I found the emaíI with an altennatíve tiebreaker wepnoposed in Kentucky, f wanted to pass this onto you hrhile it was fnesh on my mind.

I wí11 be in touch and hre hiill look for ways to brÍng our expenience to Tennessee,

"The tiebreaken should be the lowest average rents, unden this method, the total one bedroomunits would be multiplied by thein monthly nent, the two bednoom units would be done the sameexcept the two bedroom monthly nents h,ould be multiplied by .9 (to be fain to langen units),thnee bedroom nents would be multiplied by .8. The total adjusted monthly nent fon al] unÍtswould be divíded by the total numben of unÍts to annive at the avenage adjusted monthly nent(aII nents should be gross amounts to include utility allowances). The lowest avenageadjusted nent would be the tie-breaken. The nequirements of the QAP call fon serving thelov,,est income families howeven there is little in the QAP to accomplish this, so this tiebneaken would help accomplish that,"

Thanks,Anthony

2

Sent from my iPhone

Anthony D. Elmorel^labuc k Development Company, Inc1øA Wabuck DniveLeitchfield, KY 42754(27ø) 2s9-s6ø7

This email has been scanned by the MaiLpnotector Email Secunity System. For mone infonmationplease vísÍt http: / /maiIp notector. com,/email

This message may contain sensitive on confidential information and is for the exclusÍve useof the intended necipients(s). If you ane not the intended necipíent(s), please note that anyfonm of distni.bution, copying, fonwanding on use of this communication or the infonmationattached to it, ís strictly pnohibited and may be unlawful, If you have receÍved thíscommunication in ennon, please neturn it to the senden and send a copy or notify:it suppont@claytonwatkins . com and then delete the communication and destroy any copies. Itshould be expressly understood that Clayton hJatkins Constnuction Co. Inc. and WabuckDevelopment Co. Inc. cannot guarantee the securíty of this tnansmissÍon and assumes nonesponsibility fon intentional on accidental receipt by a thind panty,Note: This email may contain PRIVILEGED and CoNFIDENTIAL information. If you ane not theintended necipient, any dissemination, distribution, on copy of this email is prohibíted, Ifyou have neceived this email in error, please delete it and immedíate1y notify the senden.

This email has been soanned by the Mailprotector Email Secu¡ity System. For more information please visit hlqlth¡ailplelQçlle!.qllgguq¡l

This message may contain sensitive o¡ confidertial ¡nformation and is for the exclusive use ofthe intended recipients(s). Ifyou are not the inte¡dedrecipient(s), please note that any fonn ofdistribution, copying, forwarding or use ofthis communication or tlìe infomation attached to it, is stictly prohibitedand may be unlawful. Ifyou have received this communication in error, please retun it to the sender and send a copy or notify:ils.l4tppr(@gle):!pi!4fiÍs.c¡ùì aûd tlrcn delete the communication and destroy any copies. It should be expressly understood that Clayton WatkinsConstructioÍ Co. Inc. and Wabuck Developmcnt Co. lnc, cannot guarantee the security ofthis transmission a¡d assumes no responsibility for intentional oraccidental ¡eceipt by a third party.

3

rqEilil.l*oupFoRibi

March l7,2016

Mr. Mike BladeDirector and Assistant General Counscl fol Multilarrily DevelopmentTennessee Housing Development AgencyAndrew Jackson Building, Third Floor502 Deaderick StreetNashville, TN 37243

RE: 2017 QAP Comments/Suggestions

Dear Mr. Blade:

The Fortus Group appreciates THDA's continuli cl i: ¡r rs to include LIHTC stakeholders in the QAPdevelopment process. Open communication bcl\\'c rtrkeholders and THDA is essential for programsuccess. I hope you find our comments uscl'ul ir , \, craft Llìe 2017 QAP.

Innovation:

As was mentioned in the recent Developer Forunr, if THDA moves forward with a new "innovative"award concept, we encourage THDA to fund these p|ojects outside the 9olo program. The 9o/o programalready has a sizeable set-aside for "innovative" deals, i.e. RAD proposals. As has been stated, THDA isthe only housing finance agency, or onc ol-r,ell fì rv rr.rencies funding RAD deals through the 9%program, and therefore, this qualifies a: innovr rir,

Should the decision be made that "innovr:rir c ' ¡ ,:: ,..;irls are best funded through the 90lo program, werecommend this take effect in 2018, after the R,\D scrasìde expires in 2017.

Thank you for your consideration ofthcse comr¡lents. Ifyou would like to discuss this, or other issues,please contact me at 513-755-2571.

Sincerely,

t{-r"7-¿--*t-Rory NeubranderVice President, Development and Acquìsilions

\r \r'Ìy.'l'ì . .r r,rsCrouD,com

12207 Illinois Road, Fort Wayne, IN 4681.1 PH: Q60) 625-42119078 Union Center Blvd., Ste. 350, West CItslcr. Ol I J5069

FAX: (2ó0) 625-3933PH: (513) 78s-0809

PENNROSEWe Bring ll All Together

!TLsb

ÉsÞ9s

April lL,2O16


Attn: Michael Blade

502 Deaderick StreetThird FloorNashville, Tennessee 37243

Dear Mr. Blade,

we would like to provide some comments and recommendations regarding potential tie-

breakers forthe Tennessee Housing Development Agency's (THDA) QAP. We appreciate

THDA's thoughtful consideration of our recommendations.

The eAp ¡dent¡fies a tie breaker based on the least Tax Cred¡ts per square foot of heated floor

space. Last year 90% of the applications all had the same score. lnstead of developments being

evaluat€d based on the quality of the projects, th€ benefits to their comrnunity, or how they

might support the lowest income families, the awards were based on how inexpensively the

project could be developed.

Unfortunãtely, the 2016 tie-breaker creates an incentive to build the cheapest product possible

instead of an incentive for building higher quality energy efficient products. At the same time,

this tie breaker encourages distorted development and favors preservat¡on projects which

already have a set-aside.

It is recommended that the current tie breaker be removed. THDA might consider a tie breaker

that prov¡des leverage or subsidy providing affordable housing to the lowest income families.

Additional sources of funding are typically necessary to supplement LIHTC equity and

permanent financing to allow for providing affordable housing to very low-income families.

Benefits to leveraging of additional funds:

1-) help spread THDA LIHTCs further,2.) provide stronger and more effective developments,3.) allow for servicing lower income residents,

4.) demonstrate local supPort and,

5.) further stratify/differentiate application scores.

It is recommended that THDA consider add¡ng some of the following languaÊe for tiebreakers:

tffi

ln the event of a tie between two or more applications, the projects will be ranked in thefollowing order to determine which applicant will receive priority:

1. ln the event there is a tie in scoring among two or more applications, then a

recommendation will be made for the application that has the most amount ofaggregate commitment(s) for additional subsidies from the Federal Home Loan Bank

for Affordable Housing Program (AHP) funds (AHP funds must be in the form of a

grant), Federal H¡stor¡c Tax Credit, HOME funds (THDA's HOME funds do not qualify),

USDA Rural Development 515 funds, CDBG, Rental Assistance Demonstration funds,Neighborhood Stabiiization Program funds, Capital Fund Program Grant, Replacement

flùusing Factor funds, NeigtrborhoodWorks Capt'tal Grant t{om€ D€pot FoundatioGrand and HUD's Economic Development lnitiative program funds allocated throughthe Community Development funds. The commitment must be a fully executed firmcomm¡tment from the applicable entity that will be granting the funds to the project.

To qualify for receiving additional subsidies (meeting the above criteria), if the fundsare loaned {require repayment) or granted to the project, at least 50% of the totalamount of the funds committed for points must remain as â permanent source offunds.

2. lf a tie{s) still remains, priority wili be given to the application that has the mostarnount of aggregat€ {ornmìtrnent{s) from unrelated third party{ìes) {foünd.atìon, trìlst,and/or government) for investment(s) of resources that will result in off-siteinfrastructure improvements; the development of parks, green space, and sharedamenities; and/or recreational facilities. Th¡s ¡nvestment in "off-site" ¡mprovementsmust be on property adjacent to the proposed project site and serve the tenant base

for the subject project.

The proposed improvements, amen¡ties and/or facilities must be performed in

conjunction with the project. The development cost and source of funding associatedwith the development of the improvements, amenities and/or facilities must bemutually exclusive of the development cost and sources of funding for the subjectproperty. The cost for the improvement must be paid in full by the unrelated thirdpaity. f).amples of thi¡d party improÌ€m€nl, amenity, and facility inv€stment ofresources include, but are not limited to, the following:a. Construction of off-site or on-site access road which is required for access to the

property;b. Development of parks, green space or walking trails on a master plan development

site;c. Development of YMCA, youth center, senior center, or comparable community

center; and/ord. Construction of sidewalks or streetscape adjac€nt to the property.

Third party ¡nvestments that are commun¡ty wide in scope or part of the commun¡tylocal action plan will not be eligib{e for poiñts in this section.

The applicant must provide documentation to incfude; the written commitment offunds, detail on the source of funding, the full amount of the ¡nvestment, and thetimeline for completion.

We appreciate your consideration of our feedback and recommendations that couldprovide the infusion of additional funding to work in concert with THDA's Low lncomeHousing Tax Cred¡ts that affects the ent¡re state.

'^7lfuMark E. Straub

{

Regional Vice PresidentPennrose Properties, LLC

BLUFF ROAD, LLC4488 Heaton Park Trail

Viera, FL 32955(321) 591-6146 i (321) 7990233 fax

Apr¡l 18, 2016

Mike Blade

Director for Mult¡family Development

Tennessee Housiñg Development Agency

Andrew Jackson Building

502 Deaderick St., 3d Floor

Nashv¡lle, TN 37243

Re: 2017 Qualified Allocation Plan ScorÌng System

Dear Mr. Blade,

As a Flor¡da-based developer with multiple awards last year, I am a proponent of replacing the currentTH DA tie-breaker w¡th a lottery more similar to that used here in Flor¡da. lbelieve eãch state authoritystrives to publish a Qualified Application Plan that is b¡ack and white and not open to interpretation oroutside influences. However, I believe that the current system requires any appl¡cant to make

assumpt¡ons ând des¡gn dec¡sions that conflìct w¡th the affordable product you hope to receive-

I would ðdd that a lottery system doesn't prohibit THDA from establishing a baseline for scoring, nordoes it preventTHDA from continuing to allocate to particular set as¡des. ltwould m€rely replace thetie-breaker and allow forthose applications thât met both the mandatory requirements as well as ân

estâblished scor¡ng maxímum to be further considered for allocation-

I would point you to any of the 2015 RFA s that included an allocatíon of credits last year for furtherinformation. They each specifically illustrate the scoring and selection processes and can be found

onl¡ne at httÞ://www.floridahousins.orglDeveloÞers/MultiFam¡¡vProsrams/Comoetitivel20l5/.

Thank you for your consideration.

Respeúivfa

ù )'^__.Shane P. Sarver

April ì8,2016

Mr. Mike BladeTENNESSEE HOUSINGDEVELOPMENT AGENCYAndrew Jackson Buildilg, Third FIoor502 Deaderick StreetNashville TN 37243

RE: 2017 QAP

Dear Mike:Please considel the following in the preparation ofthe final 2017 QAP.

lnnovatior Set-Aside:Tlre proposed l5% Innovation SelAside is very large. ln our opinion much too large. The concept offundingan innovative development that meets THDA goals but is not constrained by the particulars of the QAP is

interesting. Ifthe set-aside moves ahead we urge THDA fo consider a single transactiorr witlr a cap of$500,000ofannual credits. Any dollar sperrt on this set-aside will directly reduce the amount of resources available tofund the traditional, but no less valuable or worthy, developrnents serving iow-income households across TN.

Scholar House:If tl'lere is a demonstrated need and demonstrâted capacity to meet the need of the intended Scholar Housepopulation, then we recommend that THDA work with the community support organizations and developmentcommunity to esøblish an RFP process to âvr'ard the development services to a qualified developer. The

speculative and capricious nature of "left-over" cledits is not the way to fund a complicated arrd expensive

supportive housing inìtiative.

National Housing Trust Furrds:

We urge THDA to make these funds available as gap funding for bond deals proposing deveJopments thal have

some form of operating or rental subsidy. The inconre rcstrictions on Sec. 8, PH and RD properties will work

very well with the NHTF prograrn requiremerts.

Year I 5 Re-syndication:

As we look alread to continuilg to maintain and preserve existing tax credìt properties, the need to have

certainty regarding eligibility is very important. Accordingly we request that the QAP language be amended to

clearly state that the TN QAP rules follow the IRS rules regarding eligibility for acquisition credits for year l5properties. The IRS rules state that an existing LIHTC properly is eligible for new LIHTC on the acquisitior

basis following the conclusion of the existing l5 year cornpliance period. The QAP should pennit projects

within a reasonable period of the expiration of their compliance period (e.g. 6 montirs) to apply as new tather

than existing developments.

Sincerely,

Alco Management, Inc.u*Robeft D. Hyde

ô Arc0ltilanascmffilnw

President

,Hälirtlf 35 Union Avenue . Suite 2C0 . Memphis, TN 38103 c (9ol) 544.1705 . Fax (901) 544-r?44 . TDD (901) 544-1751 ô

Mike Blade

F¡om:Sent:To:Subject:

Robert Trent < [email protected] >

Tuesday, April 19,2016 9:l-7 AI/Mike Blade

Tie Breaker

Mike, You said reach out if you had an opinion on this. So here it is.

From listening to you at the last meeting, I believe you related that everyone seems to be

unhappy with the current tie breaker scenario. That said, Maybe it is time to take a shot atsomething different for a year or so. I have some bullet points for thoughts.

Lottery:

lamawarealotofpeopledon'tlikethis. But,theeffectofthecurrentsystemasiteffectsthedevelopment of affordable housing is:

Can't build inner city at all, land cost and need for small units prohibit this

Can't build a property that the market demands one bedrooms, need and or Elderly

Developments are being pushed to the edge of populated areas, to find the cheapest land

Developments are driven to have very large units, Of which, the cost to heat and cool themwill be much higher. Further, You are promoting and demanding energy efficiency anddesign, but your actions would be a dichotomy of this green energy pursu¡t.

The Tenants are pressed to the max for rents, which ends up with a large population of rentburdened tenants.

Architectural design and amenities are receiving the cheapest and least costly approach

Smaller developments can't be successful do to economies of scale

lf you initially pursued the lottery plan, following all of your set asides and waterfall ofdevelopments, staff could then work on cures of these individual developments, not all

100. This would save a tremendous amount of time and energy for other needs and

underwriting.

I am aware this takes out the opportunity to maybe be the smarter guy in certa¡ncircumstances, but lt does allow for someone to create a development they are proud of, feelit is meeting the need of the current market, and can be successful, without following only oneplan of attack, Big, Cheap, with the Highest Rents Possible.

I like the opportunity to compete, and if you have other ideas that do not create such a

skewed approach to providing affordable housing, I am all for it. But without such a plan, thecurrent s¡tuation doesn't seem to be in any ones best interest.

Thanks for listeningrkt

Robert Kyle Trent

lllr I:II

FI EST CU*¿ $XNT¿N D T}Rü P [,RTI E55î11 Pltr.¡"ri r¡-: ! 1-l.1r,J-'ìÊrr'-l! { i'i'',14-". ì:-,1'l !,1 I lã:

First Cumbertand Properties, lnc.101 1 Cherry Ave.Nashvitte, TN 37203Tetephone (6151 370-5721(615) 371-9474

NOTICE: This message is intended only for the addressee and may contain informat¡on that is privileged, confidentialand/or proprietary work product, lf you are not the ¡ntended recipient, do not read, copy, retain or disseminate thismessage or any attachment, lf you have received this message in error, please call the sender immediately at (615)

370-5721 and delete all copies of the message and any atta€hment. Neither the transmission of this message or anyattachment, nor any error ¡n transmission or misdelívery shall constitute wa¡ver of any applicable legal privilege,

2

Mike Blade

Sent:To:Cc:Subject:

From: Phyllis Vaughn < [email protected]>

Wednesday, April 20, 2016 6:43 PM

Mike Blade; Ed Yandell

Ralph M. Perrey

Comments to the 2017 QAP

Just to recap my comments from the public hearing yesterday in writing:

We encourage removalof Enterprise Green from the program, as the money used to equip the units to Enterprise Green

standards comes directly from the cred¡t program, making those credits unavailable for an additional 10 to 20 un¡ts

annually from THDA's limited allocation of Federal tax cred¡ts. Ten to twenty TN families will not be served annually by

the limited credits ava¡lable to TN in order to prov¡de other tenants with Enterprise Green standards. THDAdoesnothave the additional sources of money going ¡nto the LIHTC program that other states have, such as HOME, hous¡ng trustfund money, state tax credits, etc, to pay for Enterprise Green or other additional added costs imposed by the state

Qualified Allocation Plan. TN only has Federal tax credits available for its multÌfamily program, and added costs take

units DIRECTLY away from TN fam¡l¡es. A direct impact. I recall a discussion in a past board meeting about credit dollars

buying developers to qualify for Developer Experience points, and the incorrect assumption that if credit dollars can be

used to support adding an experienced developer to the cost of the deal, then surely Enterpr¡se Green could also be an

added requirement. That ¡s not a correct evaluãtion of how the numbers work. The "purchase" of adding a developerw¡th experience points, comes directly from the 10% to 15% developer fe e olreødv in Ìhe costs associated with thedevelopment, it does NOT add to the cost. "Purchasing" an experienced developer partner only reduces the profit thedeveloper walks away with, not increased costs or loss of units to THDA and TN. Enterprise Green required cost is an

added cost, and a direct correlation to reducing units produced from the program, to the citizens ofTN. Tennessee's

program can only afford to dr¡ve a Prius, not a Tesla. Other states provide additionalfunds toward their multifamilyprograms, providing the necessary funds to "drive the Tesla". Tennessee can't afford it with our multifamily budget, and

extreme property taxes. lf youwanttoaddbellsandwhistleslikeotherstates,thenfindthemoneytopayforit,butdon't take ¡t away from Tennesseans needing affordable housing opt¡ons.

Use Federal Trust Fund money, or THDA'5 Hous¡ng Trust Fund money to fully fund the proposed Scholar House and

lnnovative Setasides, not Low lncome Housing Tax Credits. Scholar House -Difficult to propose a development to THDA

in an application when we have zero idea of how much money might be available to fund it, and then try to rework thedeal once we do know how m uch is available at the end of the cycle. The stipendsthe studentswill receive for rent

would most likely not cover the monthly rent of a LIHTC unit. Adm¡rable concept, but wrong program for th¡s type ofdevelopment. lnnovative Setaside - Your most compet¡tive, volatile, pressure sensitive program is not the place for staffto make decisions on a "fun" project. Keep the credit program objective, not subjective. Subjective criter¡a is notsuita ble for rational decision ma king, and puts staff in a d irect line of fire for accusations of political payback or simple

favoritism. As a friend of mine used to say, "think about how that might look in the headlines of the Tennessean

newspaper tomorrow morning". Meaning perception is everything. Additionally, syndicators purchas¡ngtax credits

typically don't like odd projects, and prefer to purchase typical family or senior deals, as they are accustomed toseeing. They sell the credits to investors, and odd projects typically don't produce high cred¡t pricing from investors.

Eliminate, or at least reduce, the preservation setas¡de, now that the bond program is open and thriving for thatsegment ofthe market. Based onTHDA'sown presentation atthe last board meeting,60% ofwhatwas produced from

the 2015 TN competitive credit program were rehabilitation projects, at a time when the bond program with 4% credits

is thriving. You have reduced your new construction production at a time when TN ¡s exper¡encing extreme population

growth. The bond program can service ex¡sting development's refinanc¡ng and upgrade needs. The 9% program should

be producing no less than 85% to 95% new construct¡on developments, ¡ncreasing Tennessee's available housing stock

Do not change the 130% state declared basis boost at this time, and especially not to try and target h¡gher income areas

with credit properties due to recent court decisions on Affirmatively Furthering Fair Housing. Your county scoring is theplace for adding in possible scoring points for that type of specific targeting, if the agency feels that is necessary.

T¡e Breaker is not a problem, but is a symptom of the problem, with all scores being the same, you have pushed all thepressure of success or fa¡lure to the tie breaker.

County scores need more separation, to break the pressure on the t¡e breaker. Do not put ten counties in one tier. I

understand why rehab deals want that, but not new construction. That change should relieve some of the pressure onyour tie breaker.

Change the tie breaker language that pushes the winner to rehab if a rehab and new construction deal are tied. You are

verbally asking PHA'S with RAD to subm¡t rehabs in the bond program, but your tie breaker language pushes them into

the 9% program in order to be successful.

Stop all the setas¡des and rehab that continue to move money away from what should be the heart of your cred¡tprogram; family, new construct¡on deals. That is what serves the genera I population of TN, not the small minoritiesofother types ofhousing needs. Thatsmall segment should be served by HoM E, and the Housing Trust programs, both

State and the new upcom¡ng Federal programs.

Tha nks for your timePhyllis

2

Mike Blade

Sent:To:Cc:

Subject:

From: David Arning < [email protected]>Wednesday, Aptil20,20L6 5i42 PM

Mike Blade

Carr Hagan2017 QAP Input

M ike,

Good to see you yesterday and thanks for the opportunity to comment on the next QAP. ln response to anotherdeveloper comment that was made during the forum, I feel obl¡ged to re¡terate our support for the preservation set-aside w¡thin the 9% program (which, as l'm sure you know, is only 22.5% and not the "29%-30%' suggested yesterday).While the bond program is thriving, about 40% ofthe units planned this year are new construction and 4% credits simplydon't address many ofthe capital needs in a 35-40 year old Section 8 asset, particularly smaller deals - hence ourprevious suggestion to give more cons¡deration to the age of a property/capital needs within the 9% program and torelax application timing and LURC restr¡ctions with¡n the bond program.

I also wanted to repeat that while I th¡nk the innovation set-aside has laudable goals, I don't believe this is the year to doit. Between the 10% nonprofit set-aside, 30% for RAD (which as Joyce mentioned really doesn't begin to put a dent inPHA needs but at least funds some ofthe neediest projects), and a proposed 15% for innovation, you're talking aboutover half of the allocation to special projects. l'm just not sure that's going to result in an outcome where the greatestneeds are being met by the program.

Thanks again, and let us know if we can provide any additional clarification

David R. Arn¡ngVice President of DevelopmentLHP Development, LLC

900 South Gay Street, Su¡te 2000Knoxville, Tennessee 37902-1861(865) 549-7403 direct(86s) 978-0123 mob¡ledarn¡[email protected]

LHP Capital, LLC . LHP Development, LLC ' LHP Management, LLC

1400 16th St. NWSuite 420

Washington, DC 20036

{202} 939-1750Fax l202l2654435

www.housingonline.com

April 22,20L6

Mr. Mike Blade

Tennessee Hous¡nB Development Agency502 Deaderick Street - 3'd FloorNashv¡lle, TN 37243

Dear Mike:

Due to a scheduling conflict, I was unable to deliver these comments in person at THDA'S April19 Developer's Forum. We request that the following written comments be considered as ourtest¡mony on behalf of the Tennessee Developers Council and our members.

Set-asides: GeneralOur membership compr¡ses 25 private and non-profit development firms active in the state of

Tennessee as well as more than a dozen affiliated professionals including syndicators, investors, lenders,

¡nvestment bankers, market analysts and other consultants. Collectively, the association provides a mixof housing types including New Construction, Preservation and Publ¡c Housing Revitalization and targetsa variety of markets ranging from urban to suburban to rural.

Because of the diversity of mem bership, there is not a consensus opinion as to the appropriatesize distribution ofthe set-asides in the QAP, although there is a general consensus that the QAP should

encourage a mix of product types and market types including new construction as well as thepreservation of existing aging affordable rental housing assetsl. lt should be noted there is strong

1 "lt ¡s essent¡al to maintain the quality and availability of ex¡sting affordable rental hous¡ng, along with buildingnew units each year at varying levels of affordab¡l¡ty, to keep up with the growing rental housing demand at all

income Ievels in Tennessee. The ex¡sting affordable housing stock across the state is ag¡ng w¡th more than 70

percent of both units and properties built more than 15 years ago. When look¡ng at deeply subsidized project

based properties, the major¡ty were built more thirty years ago. About a third of Sect¡on I project based contractswill expire over the next f¡ve years. S¡m¡larly, about a third of USDA Section 515 loans wìll reach maturity dates in

the next fìve years...Ag¡ng, deeply subsid¡zed propert¡es (S8PBRA, public housing and USDA) often must recapitalize

over t¡me to afford needed malntenance and rehab¡litation while preserving affordable rent levels. At least some

of these propert¡es carry a large debt load and/or have signifìcant repair needs. W¡thout recap¡talìzation thatincludes infusions of addit¡onal grants, rent subsid¡es, tax credits, or very low interest loans, the lower rents simplydo not cover ongo¡ng operat¡on and maintenance/repa¡r costs. lf existing affordable housing units deteriorate tothe po¡nt that they are no longer habitable or are converted to convent¡onal properties when contracts exp¡re, theneed for new construction of affordable housing will increase but fund¡ng likely w¡ll not rise to meet the demand.

Preservation needs are present throughout the state, but each affordable housing program has vary¡ng needs in

different geographic areas. civen the high need and ¡nadequate funding levels, state and local housing agencies

consensus of TDC'S membership that THDA not create additional set-asides ¡n the 2017 QAP that would

further d¡lute the available credits available to New Construction or Preservation transactions. lt is the

strong recommendat¡on that THDA defer creating new set-asides until 2018 when its two year 30% set-

aside for the Rental Assistance Demonstration expires.

Set-asides: lnnovat¡on Set-AsideWhile supportive in concept, as stated above, a super majority of TDC members recommend

THDA and the development community defer adoption of the lnnovation Set-Aside until 2018, when

additional allocation becomes available from the RAD set-aside. There is also significant concern fromboth our New Construction and Preservation stakeholders that the likely resulting reduction of either orboth set-asides to create room for the special projects set-asides would have s¡gnificant and adverse

impacts in their respect¡ve communities. Consequently it ¡s recommended that the init¡al 2018 set-aside

be modest in size perhaps only enough to fund a single transaction. 5500,000 in annual credits would be

a significant amount for a new program. Expansion could be considered in future QAPs based on

interest, quality of submissions and other factors.

Furthermore, anticipating that high degree of community support and engagement will likely be

necessary to submit a successful application, we believe a longer lead-time will fac¡litate strongerpartnerships and the alignment of other critical resources ¡n the initial year and will thus result ¡n

stronger appl¡cat¡ons. A delay in ¡mplementation will also allow THDA to adjust ¡ts allocation calendar tobetterfacilitate implementation and application review.

lf an lnnovation Set-Aside is ¡ncluded in the 2017 QAP, it should be made very clear prior toapproval and adoption ideally before the initial draft QAP is released what other set-asides are being

reduced and by how much.

Set-asides: Left-Over CreditsWhile, our membership is open to the concept of targeting "left-over credits" for a specially

targeted project (potentially Scholar House or another special needs population) there are some

challenges associated with the approach. Given the uncertainty in the fund¡ng amount it may be

difficult to attract strong projects and strong developers. ln particular, many developers may not wantto incur the necessary predevelopment costs to submit an application when the potential allocat¡on

amounts are both small and uncertain.

wil¡ need to carefully prioritize which projects to fund and ensure that preservation funding prov¡des a depth orqual¡ty of rehabil¡tation that extends the life of a property as long as possible."

Excerpt Írom THDA's "Ag¡ng AÍfordable Rentdl Housing in Tennessee & the Need Íor Preservãt¡on" Report:

https://s3.amdzonows.com/thdo.oro/Documents/Reseorch-Plonnina/Preservotion-Report-FlNAL.pdf

Set-Asides: Scholar HouseTDC acknowledges that there are many mer¡ts to the Scholar House development model and

that targeting this model specifically to youths aging out of foster care may be a helpful approach inaddressing the needs of a very vulnerable population. Before endorsing the concept we believe it isnecessary to address several additional related questions. Learning from our experience with ScholarHouse as well as other projects that target youths ag¡ng out of foster care, we know that thesepopulations have a highly experienced operator and are adequately resourced with rental assistanceand operating funding for the necessary supportive serv¡ces ¡f they are to succeed. lf THDA is going toallocate credits (especially a smaller scale allocation) we believe it should cons¡der in ¡ts evaluation and

underwrit¡ng the developers experience operating supportive housing, soft resources that have beencommitted to the project, rental assistance that has been comm¡tted to the project, as well as thecommitted partnerships with appropriate educational inst¡tutions and/or supportive serviceorgan¡zat¡on along with other factors necessary for the project to succeed. The commitment of rentalassistance seems particularly important for these type of projects, since we anticipate that all of theresidents will be full time students. We also would like to know if county caps w¡ll apply to projectsfunded in the Scholar House "round"? We assume that many of the locat¡ons most su¡ted for Schola rHouse project will be located in the highest ranked urban count¡es which could be problematic.

Set-asides: PreservationA subset of our membership that is primarily engaged in affordable housing preservation

projects recommends THDA reduce the per deal maximum (within the preservat¡on set-aside ONLY) to -5750,000. This will spread the limited resource across a greater number of projects and potentially maymake smaller and rural deals (located in high scoring counties) better able to compete. Additionally,THDA may consider further refining the eligibil¡ty of projects within the preservation set-aside toexplicitly incentivize projects with project-based rental assistance contracts, which tend to be older,have greater capital needs and are at most risk of leaving the affordable portfolio in the short-term.Generally speaking, relatively newer LIHTC only "unassisted Year-15" projects should be able to berecap¡talized using the tax-exempt bond given their age and condition.

County Needs ScoreMany of our members still oppose ass¡gning competitive po¡nts v¡a the county needs score and

strongly believe there are more appropr¡ate selection criteria. We do not have a consensus as to theexact replacement but ideas that have been suggested for consideration includ¡ng targeting areas thatare not m¡nority concentrated, incentivizing proximity to amenities, and leveraged.

TíebreakerWe continue to have concerns that the current tiebreaker does not serve the long term ¡nterests

of affordable housing residents, owners or the program at large. While lt may be effective in breakingties, we note that the tie-breaker:

. can drive down construct¡on quality which has long-term operating and cost ¡mpl¡cations.

affordable housing developers at a competitive disadvantage in the market place to option and acquireproperties for preservation. We believe that THDA's policy should align w¡th the IRS's stated minimum

standards. Failing that, an alternative and more appropriate standard would be to demonstrate

evidence of change of site control (for example a purchase contract) that is in excess of 15 years from

the initial placed in service date. This will allow developers to prepare an application for projects thatare on the cusp of the 15 year window, while guaranteeing to THDA and the IRS that the minimum 15

year window will be met. Without the availability of acquisition credits Year-15 properties in the marketplace (particularly those that may not be covered by lengthy extended use requirements) will be at

greater risk to be acquired by market-rate developers that will exit the program at the end of theextended use requirement.

National HousingTrust FundOn Apr¡l 5, HUD announced that it would be making its allocations for the National Housing

Trust Funds, with funds available to the states for use as soon as June. Law requires that at least 90% ofthe annual NHTF funds prov¡ded to THDA be used for rental housing - we recommend that 100% ofthese funds be utilized in for multifamily rentalhousing util¡zing the LIHTC. By tying the funds to theLIHTC, THDA is able to leverage private sector dollars to make them go further than any other potential

useage. Also, as THDA is aware, there is no other statewide source of gap funding for affordable rental

housing in Tennessee. Furthermore, the deep-income targeting program requirements align well withpublic housing/RAD, Section 8, RD-Preservation and special-needs projects.

We recommend that first preference for the use of NHTF funds should be directed to qualified

units that utilize the tax-exempt bond program. THDA's recently published "Aging Affordable Rental

Housing in Tennessee and the Need for Preservation" indicates the strong need for additionalpreservation resources, particularly ofthe older subsidized portfolio. Additionalgap funding resources

for the Tax Exempt Bond (TEB) program will facilitate more preservat¡on outside the 9% program and

will similarly benefit new construction projects utilizing TEBs. Additionally, since the RAD set-aside is

oversubscribed, and likely to remain so, this will create another feasible financing path for RAD projects

to pursue before they lose their CHAPS.

We also recommend that THDA set-aside some portion of funds (up to the 25% allowable by

law) for very low-income houses holds, which will marry well with the 4% Tax Exempt Bond income

requirements. To get more bang for their buck, THDA may also consider supplementing these funds

w¡th other available agency resources.

Given our recommendation to allocate available NHTF funds to projects that leverage LlHTcs,

we suggest that the most efficient way to administer the funds would be to integrate the application forthese funds into the tax credit application. This one-stop-shop approach is common ¡n other states thatadm¡nister multifamily gap funds or state credits. Given the l¡mited resources available, we suggest thatTHDA cap the amount offunds it will allocate by transaction and per development. We suggest 510,000per unit or alternat¡ve 5500,000 per project would be appropriate given the current overall allocationprojections. We also believe that ¡t is critical that applicants demonstrate need. We ant¡cipate thatdemand will far outstrip available resources so THDA will also need to consider other potential

tiebreakers. FactorsTHDA mlght consider including readinessto proceed, additional leverage, and/orage of the property or expiration of project base-subsidy (if preservation).

Tax Exempt Bond Program: Maximum Amount of Bond Per Development:

RehabilitationTDC recognizes that as a steward of the LÍHTC portfolio it is paramount that THDA have

safeguards in place to ensure that sufficient standards are met when preserving existing or constructing

new affordable housing utilizing the TEB program. We believe that the current tiered rehab¡litation

system does not account for several significant factors which creates a pol¡cy m¡salignment and prevents

many transactions from effectively utilizing the TEB program.

Under the current program, the amount of rehabil¡tation required is t¡ed to the amount ofbonds required - the larger the issue, the greater the amount of rehabilitation required. lt is our

experience that size of the bond issue often does not correlate to the amount of rehabilitation required

to keeptothe property operational and in compliance for 15 years. Rather, the size of the bond issue is

more often associaled with the size of the property in terms of units or the acquisition cost of theproperty with a greater acquisition cost being indicative of a well maintained property.

Consider the follow¡ng scenario - in the current market place, a well mainta¡ned, cash-flowing

100+ unit Year-15 LIHTC property ¡n a competitive market like Nashville will sell at a high per un¡t cost

that would likely put it in the moderate or substantial rehab tier. The cost ofthe property in this

scenario ¡s driven up because of its size and its condition. The physicalneeds ofthe property may

actually be modest (because ¡t ¡s so well ma¡ntained) requ¡ring only the scope of work necessary in the

limited tier but the developer will be required to undergo a far costlier rehab because of the slze of the

bond issuance, perhaps being forced to replace serviceable systems unnecessarily or even making the

deal financially unviable.

Alternatively, consider this second scenario - A 38 unit property ¡n a soft rural market originally

developed in 1975 under the Section 8 program with substantial deferred ma¡ntenance. The per unit

acquisition cost is likely to be very low because it ¡s a small property with little prospects for rent growth

and likely substantial expenses. This would be a prime candidate for substantial rehabilitation; however,

under the current BPD it might actually qualifu for the limited rehab tier.

TDC considered developing alternat¡ve formula's that would determine the appropriate

rehab¡l¡tation tier that accounted for lTotal Amount Bonds lssuance (minus) appraised land costs] / # ofunits. Wh¡le this probably addresses some ofthe concerns we outlined above ¡t also has weaknesses.

Ultimately, we believe that THDA's most prudent approach would be to set an overall cap on bond

authority per project (and perhaps an additionalcap per unit).

TDc Recommenddtion (F¡tst PteÍerence):we acknowledge that staff and the committee has

rejected recommendations by TDC and others in the past to eliminate the tiered rehab requirement but

we believe that the additional safeguards THDA relies upon in the 9% program to determine the proper

scope of rehabilitation, namely the PCNA and architects certificate adequately protect the state's

interest and that the t¡ered requirements could be eliminated entirely.

TDC RecommendatÍon (second Prefetence)i An alternative recommendation that ¡s preferable

to the current language in the BPD would be to raise the maximum amounts in the moderate and

limited rehabil¡tation categories as follows:

Moderate Rehabilitation: Maximum S13,000,000Limited Rehabilitation: Maximum: S10,000,000

This will significantly address the dynamics outlined in the hypothetical above, at least for larger scale

projects.

ConclusionOnce again, TDC appreciates the opportunity to provide THDA with this feedback. We would be very

happy to discuss any specifics you might have regarding these comments or other subjects of concern.

Please feelfree to contact me directly with any questions at 202-939-1753 orta md u r@ housingo n line.co m.

Best Regards,

Thom AmdurExecutive Director

cc: Ra lph PerreyEd YandellDonna DuarteJudith SmithBrian Bills

Kim Grant Brown

Ronald K. Jones

Ashleigh Harb RobertsLarry MartinGreg TurnerDavid LillardCourtney Hess

1

Ed Yandell

From: Mike BladeSent: Monday, May 09, 2016 9:31 AMTo: Ed YandellSubject: FW: Tiebreaker for 2017 QAP

Include this with the other written QAP comments in the Board packet, please. Michael Blade Director and Assistant Legal Counsel for Multifamily Development Tennessee Housing Development Agency Andrew Jackson Building 502 Deaderick Street, Third Floor Nashville, TN 37243 Phone (615) 815-2029 Email: [email protected] From: Felita Hamilton Sent: Monday, May 09, 2016 8:04 AM To: THDA_MD <[email protected]> Subject: FW: Tiebreaker for 2017 QAP Felita (Givens) Hamilton Multifamily Coordinator 502 Deaderick Street‐3rd Floor Nashville, TN 37243‐0900 www.thda.org 615‐815‐2145 phone 615‐564‐2783 fax

From: Gregory, Justin P. [mailto:[email protected]] Sent: Thursday, May 05, 2016 6:00 PM To: Felita Hamilton <[email protected]> Subject: Tiebreaker for 2017 QAP Hello, Please see below for suggestions on tiebreakers for the 2017 THDA QAP that is based on tiebreakers that Miller‐Valentine has seen from other Housing Finance Agencies:

1. Proximity to other tax credit developments (linear distance).

2. Lowest poverty rate (by census tract).

2

3. Best school district rating by state education rating agency.

4. Proximity to key amenity or service (school for example). We tried to select tiebreaker criteria that we have seen, that differ from tax credits per unit or by square footage (heated or otherwise). Thank you, Justin Gregory Financial Analyst MV Residential Development Miller-Valentine Group 9349 WaterStone Blvd. Cincinnati, OH 45249 www.mvg.com 513-588-1228 Direct

Follow MVG on LinkedIn




M E M O R A N D U M TO: THDA Board of Directors FROM: Michael Blade Director & Assistant Legal Counsel for Multifamily Development DATE: May 11, 2016 SUBJECT: Potential Concepts for the Low-Income Housing Tax Credit 2017 Qualified

Allocation Plan The process of crafting the Low-Income Housing Tax Credit 2017 Qualified Allocation Plan (the “2017 QAP”) is underway. Developer Forums were held in March and April, and some preliminary written comments from the public have been received. We will present the Committee with the final draft of the proposed changes at the July 2016 meeting. We will present the Draft 2017 QAP for Committee and Board approval at the September 2016 meeting. In addition to the Innovation Set-Aside and Student Housing proposals described in the following pages, the items below are also under consideration: Narrowing the scope of current language offering the 130% basis boost to all Initial

Applications;

Clarifying the language regarding market study requirements to provide more detail on THDA’s expectations;

Lowering the preservation/rehabilitation per development maximum amount of Tax Credits from $1,100,000 to $800,000;

Restructuring the tiebreaker; and

Restructuring the County Needs Score to do away with the Tier system.

Please contact me, Ed Yandell, or Judith Smith if you have questions.


Part III-B Insert

6. Innovation Set-Aside

a. No more than fifteen percent (15%) of the sum of Part III-A-1, -2, and -3 will be set aside for developments involving innovation (as specified in Part VII-A-2-f).

Part VI Insert

E. Innovation Set-Aside

1. THDA will accept proposals for consideration in the Innovation Set-Aside (“Innovation Set-Aside Proposal”).

2. The deadline for submission of an Innovation Set-Aside Proposal is 1:00 PM Central Time on [DATE], 2016.

3. To be considered for the Innovation Set-Aside, an Innovation Set-Aside Proposal must satisfy ALL of the following:

a. Be submitted by the deadline in Part VI-E-2 above;

b. Contain no more than 5 single-sided, single spaced pages (including all attachments and exhibits);

c. Include a separate, sealed, envelope containing contact information for the applicant; and

d. Describe each of the following:

(i) Proposed development name;

(ii) Number of units and bedroom mix;

(iii) Uniqueness of development concept (i.e. has a development of this type been done before);

(iv) Ability of the proposed development to address an unmet need;

(v) The proposed development’s contribution to THDA mission and goals;

(vi) Reasonableness of the proposed development’s scope;

(vii) Proposed development’s financial feasibility;

(viii) Extent to which the proposed development would be at a competitive or financial disadvantage relative to developments considered in the regular competitive round; and

(ix) Demonstrated capacity of the applicant to complete the proposed development.

4. The Innovation Set-Aside is discretionary. THDA, in its sole discretion, will select no more than five (5) Innovation Set-Aside Proposals as Innovation Set-Aside Finalists.

5. The selection of Innovation Set-Aside Finalists shall not be appealable to the THDA Board or the Tax Credit Committee of the THDA Board.

6. Innovation Set-Aside Finalists will be notified on or before [DATE], 2016 and invited to submit a full Initial Application (“Innovation Set-Aside Application”) by the deadline specified in Part VI-D.

7. THDA will evaluate each Innovation Set-Aside Application for financial feasibility and compliance with all applicable requirements of Section 42 of the Internal Revenue Code, Section 1.42 of the Treasury Regulations, and this QAP.

8. If THDA, in its sole discretion, determines that an Innovation Set-Aside Application is financially feasible and is fully compliant with all applicable requirements of Section 42 of the Internal Revenue Code, Section 1.42 of the Treasury Regulations, and this QAP, the applicant will be invited to present the proposed development to the Innovation Set-Aside Selection Group.

9. If THDA, in its sole discretion, determines that an Innovation Set-Aside Application is not financially feasible or is not fully compliant with all applicable requirements of Section 42 of the Internal Revenue Code, Section 1.42 of the Treasury Regulations, or this QAP, the Innovation Set-Aside Application will disqualified.

DISQUALIFICATION UNDER THIS PART VI-E-9 SHALL BE AT THE SOLE DISCRETION OF THDA STAFF AND SHALL NOT BE APPEALABLE TO THE THDA BOARD, THE TAX CREDIT COMMITTEE OF THE THDA

BOARD, OR THE INNOVATION SET-ASIDE SELECTION GROUP. Part VII-A-2 Insert

f. Innovation Set-Aside: To be eligible for Tax Credits from the Innovation Set-Aside, an Innovation Set-Aside Application must satisfy ALL of the following:

(i) The Innovation Set-Aside Application must be submitted by an Innovation Set-Aside Finalist as described in Part VI-E; and

(ii) The Innovation Set-Aside Application must be financially feasible and fully compliant with all applicable requirements of Section 42 of the Internal Revenue Code, Section 1.42 of the Treasury Regulations, and this QAP as described in Part VI-E-8.

Part VIII-E Insert

10. Innovation Set-Aside

a. Applicant presentations to the Innovation Set-Aside Selection Group shall take place on [DATE], 2017 at a location determined by THDA and shall be limited to one (1) presentation per Innovation Set-Aside Application, no more than sixty (60) minutes in length.

b. The Innovation Set-Aside Selection Group, in its sole discretion, may select one or more Innovation Set-Aside Applications to receive a Preliminary Award Letter from the Innovation Set-Aside. Selected Innovation Set-Aside Applications will be notified at the same time the ranking for the regular competitive round is released.

c. The determination of Innovation Set-Aside Selection Group shall not be appealable to the THDA Board or the Tax Credit Committee of the THDA Board.

Scholar House Draft Language Current Part VIII-E-7-e modified as reflected below, with new language beginning as a new Part VIII-E-8.

e. (i) If the steps above leave THDA with insufficient Tax Credits to make a complete reservation to the next highest ranking eligible Initial Application proposing new construction, THDA will hold the Tax Credits remaining until enough Tax Credits have been recaptured or returned for a complete reservation to be made to the next highest ranking eligible Initial Application proposing new construction, taking into account all applicable priorities, caps and limits. THDA will then make a complete reservation to the next highest ranking eligible Initial Application proposing new construction (The limitations specified in Part IV will apply.)

(ii) If the Tax Credits remaining are likely to exceed one percent (1%) of the total Tax Credits available for reservation, any remaining Tax Credits may be offered as a partial reservation to the next highest ranking eligible Initial Application proposing new construction,pursuant to Part VIII-E-8 below, taking into account all applicable priorities, caps, and limits, until the Tax Credits are accepted. The limitations in Part IV will apply. Acceptance of a partial reservation according to this provision would not classify a development as an “existing” application in subsequent years, but any limitation on Tax Credits per development in subsequent years would apply to any such partial reservat

8. Scholar House

a. THDA may solicit Initial Applications outside the deadlines described in this QAP for proposed developments to be 100% occupied by students (as defined in Internal Revenue Code Section 151(c)(4)) (“Scholar House Initial Application”).

b. Scholar House Initial Applications must be fully compliant with all applicable requirements of Section 42 of the Internal Revenue Code, Section 1.42 of the Treasury Regulations, and this QAP (including, without limitation, the minimum score requirement in Part VII-A-1).

c. In the event multiple qualified Scholar House Initial Applications are submitted, THDA will list, in ranking order, qualified Scholar House Initial Applications and will offer the remaining Tax Credits to the highest ranking Scholar House Initial Application.

2016 ALLOCATION OF THDA TAX-EXEMPT BOND AUTHORITY TO LOCAL ISSUERS Page 1 of 1

May 9, 2016

AUTHORITY AUTHORITY AUTHORITY AUTHORITY DATE DATE TO

ID # APPLICANT DEVELOPMENT DIVISION SIZE TYPE REQUESTED PENDING ELIGIBLE CLOSED SUBMITTED CLOSE STATUS PD / STATUS LIHTC

TN16-200 Hendersonville Leasing Asso. I, LP Waterview Apts. Middle 160 Acq./Rehab 13,300,000 0 0 13,300,000 1/1/16 4/19/16 Closed --- Yes

TN93-047 / TN95-073TN16-201 Mursfreeboro Leasing Asso. I, LP King's Crossing / Tara's Place Middle 184 Acq./Rehab 14,000,000 0 0 14,000,000 1/1/16 4/19/16 Closed --- Yes

TN95-072 TN16-202 The Paddock @ Grandview. LP The Paddock @ Grandview Middle 240 New Construction 16,500,000 0 16,500,000 0 1/1/16 8/6/16 Committed Waiver / LIHTC Yes

TN16-203 Gate Manor Housing, LP Gate Manor Apts. East 80 Acq./Rehab 4,100,000 0 4,100,000 0 1/1/16 7/15/16 Committed --- Yes

TN16-204 Radnor II, LP Radnor Towers Middle 189 Acq./Rehab 17,250,000 0 0 17,250,000 1/1/16 4/19/16 Closed --- Yes

TN16-205 Kirby Point Apts. LP Kirby Point Apts. West 116 New Construction 10,000,000 10,000,000 0 0 3/10/16 --- Pending --- Yes

TN16-206 ECG Patterson, LP Patterson Flats West 194 New Construction 12,000,000 12,000,000 0 0 3/22/16 --- Pending --- Yes

TN16-207 Alco Woodlawn Partners, LP Woodlawn Apts. Middle 163 Acq/Rehab 7,500,000 7,500,000 0 0 4/1/16 --- Pending --- Yes

TN16-208 Alco Springbrook Partners, LP Spring Brook Apts. Middle 97 Acq/Rehab 4,500,000 4,500,000 0 0 4/1/16 --- Pending --- Yes

TN16-209 South Main Artspace Lofts, LP ArtSpace Lofts West -- New Construction 9,500,000 0 0 0 --- --- Ineligible --- Yes

Totals: 1423 108,650,000 34,000,000 20,600,000 44,550,000 Total Available: 150,000,000

Minimum Score:

Total P/C/Cd: 99,150,000

Balance Available 50,850,000

FORECAST Division

10,000,000 Lawler Wood / Carr Hagan Acq / Rehab E

7,000,000 Lawler Wood / Carr Hagan Acq / Rehab E

50,000,000 Primerose / Mark Straub RAD M

32,000,000 KCDC / Joyce Floyd RAD E

12,500,000 Dominium / Russ Condas Acq / Rehab M

6,500,000 Burlington Corp. / John Gordon Acq / Rehab M

12,000,000 Elmington Capital / Hunter Nelson N/C W

28,000,000 NavigoDev. / Russell Hollaway Acq / Rehab ??

USDA

9,500,000 Artspace TN Non Profit / Heidi Zimmer N/C W

167,500,000

Tab # 7 Items: Lending Committee Meeting Materials


Lending Committee May 24, 2016

9:30 a.m. Central Time

AGENDA 1. Call to Order........................................................................................... Cleaves 2. Approval of Minutes for March 22, 2016 Meeting ............................... Cleaves 3. Income Limit Changes ............................................................................... Hall 4. Hardest Hit Fund Program Update ........................................................ Peraza 5. Adjourn .................................................................................................. Cleaves

LOCATION COMMITTEE MEMBERS William R Snodgrass – Tennessee Tower Dorothy Cleaves, Chair 312 Rosa L Parks Avenue, Third Floor John Baker Nashville, TN 37243 Kendra Cooke Larry Martin The Nashville Room Todd Skelton

Benjie Shuler


LENDING COMMITTEE

March 22, 2016

Pursuant to the call of Chairman, the Lending Committee of the Tennessee Housing

Development Agency Board of Directors met in regular session on Tuesday, March 22, at

10:30 a.m. Central Time in the Nashville Room at the William R. Snodgrass Tennessee Tower,

312 Rosa L. Parks Avenue in Nashville, Tennessee.

The following members were present: Dorothy Cleaves (Chair), John Baker, Benjie Shuler,

and Chairman of the Board Brian Bills. The following Committee member was absent: Ashleigh

Roberts, Greg Turner and Kendra Cooke.

Chairman Cleaves called the meeting to order and called for consideration of the minutes

from the January 26, 2016, meeting. It was noted that a correction should be made to the fifth

bullet point. The word "lower" should be changed to "higher" (than 2014). Upon motion by Mr.

Bills, second by Mr. Baker, the corrected minutes were approved.

Chairman Cleaves recognized Lindsay Hall, Chief Administrative Officer of Single Family

Programs, to present the proposed Mortgage Credit Certification Program (MCC). Ms. Hall

referenced her memo to the Board dated March 10, 2016, and stated that the Board previously

authorized the MCC Program and the carryforward of 2011 and 2012 volume cap, but that program

details, once developed, would come back to the Committee and Board. Ms. Hall called attention

to the board packet containing the program details, including a term sheet, for the MCC Program

to be called "Take Credit". She noted that the MCC Program will be underwritten based on IRS

tax compliance code, in the same way THDA currently underwrites loans, however, MCCs will

not be available for use in conjunction with THDA loans funded with bond proceeds. She

explained that requirements for MCCs are the same as for current THDA loans and include the

same sales price limits, income limits, and primary residence requirement. THDA staff

recommends the following actions:

Ratify publication of the required MCC Notice;

Authorize the Mortgage Credit Certificate Program, as described in the referenced

memo and on the Term Sheet attached to the memo;

Authorize staff to finalize all Program details and all documents and materials, all

as necessary to carry out the Program and to comply with IRS requirements; and

Authorize all appropriate staff to do all things necessary and proper, including

execution of all documents, to carry out the described Program and to comply with

IRS requirements.

Upon motion by Mr. Baker, second by Mr. Shuler, the Committee recommended the above actions

to the Board.

Chairman Cleaves called on Ms. Hall to present information about the Fifth Round of HHF

Funding. Ms. Hall referred to the memo in the board package dated March 11, 2016 from Cynthia

Peraza, Director of Special Programs and noted that Congress authorized $2 billion to be

reallocated to the 19 State Housing Finance Agencies participating in the Hardest Hit Fund (HHF)

Programs, including THDA. She explained that in late February, 2016, THDA staff received

notification of the availability of these funds, with a deadline of March 4, 2016 for THDA to accept

first phase funding in the amount of $51,945,211 and a deadline of March 10, 2016, to apply for

additional funding. She reported that THDA accepted the first phase of funding and submitted an

application for the second phase of funding that included two program options: (1) a principal

reduction program, as a foreclosure prevention activity to assist certain borrowers who are on fixed

income or permanently disabled, or have a payment ratio over 40%. The principal reduction

amount would be up to $40,000; and (2) a new down payment assistance program to enhance

affordability thereby lessening the likelihood of foreclosure and to stimulate home purchase

activity in targeted areas thereby helping to stabilize neighborhoods. Up to $15,000 would be

offered in target areas and up to $25,000 would be offered for the purchase of foreclosed properties,

deed in lieu, short sales, or properties that have been recently renovated and foreclosed. THDA

staff recommends the following action:

Ratify acceptance of the $51,945,211 in the first phase of additional HHF funding;

Ratify submission of the THDA application for the maximum amount of the second

phase of additional HHF funding;

Authorize the HHF Principal Reduction Program and the HHF Down payment

Assistance Programs as described above, subject to U.S. Treasury approval;

Authorize staff to modify the programs as may be directed by U.S. Treasury; and

Authorize all appropriate staff to do all things necessary and proper, including

execution of all documents, to retain the first phase funding, to apply for and obtain

second phase funding and to carry out the described programs.

Upon motion by Mr. Bills, second by Mr. Baker, the motion was passed.

There being no further business, Chairman Cleaves adjourned the meeting.


/s/ Ralph M. Perrey

Ralph M. Perrey

Executive Director

To Be Sent Separately

Tab # 6 Agenda Items No.

3. Income Limit Changes

Documentation regarding these items will be provided prior to the Committee meeting.

Bill Haslam Ralph M. Perrey Governor Executive Director

MEMORANDUM:

DATE: May 10, 2016

TO: Board of Directors, Lending Committee

FROM: Cynthia Peraza, Director of Special Programs

SUBJECT: UPDATE – Fifth Round of HHF Funding

Earlier this year, Congress authorized $2 billion to be reallocated by the U. S. Treasury

(“Treasury”) to the 19 State Housing Finance Agencies participating in the Hardest Hit Fund

(HHF) Programs, including THDA. In March, 2016, the THDA Board ratified THDA’s

acceptance of the first phase of funding in the amount of $51,945,211 and the application submitted

for second phase funding. In April 2016, THDA was awarded $32.8 million for Phase 2 funding.

The award amount was based on the overall need in Tennessee to recover from high delinquencies

and foreclosures. Since Tennessee’s need was substantially lower than other states participating in

the HHF Program, THDA received significantly less than the maximum permitted amount,

however, the total current funding amount is $84.7 million and THDA will have future

opportunities for additional HHF funding, depending on how funds are used by other participating

state HFAs.

Treasury has encouraged HFAs to design new programs to focus on the needs of the State that will

help prevent foreclosures and stabilize neighborhoods. The programs authorized by the Board in

March include a principal reduction program to be available statewide, a targeted down payment

program to stimulate affordability for first time homebuyers and a targeted down payment

assistance program to stimulate neighborhood stabilization. Those programs were identified

quickly by staff to meet the abbreviated timetable imposed by Treasury to access these funds.

Now, following limited data analysis and initial conversations with Treasury, staff is in the process

of further developing these and other program ideas. Based on preliminary research conducted

within the last month, staff hopes to convince Treasury that certain counties, in addition to Shelby,

Montgomery, Davidson, Rutherford, Hamilton and Knox, should be eligible for targeted programs


Andrew Jackson Building Third Floor

502 Deaderick St., Nashville, TN 37243

(615) 815-2200

funded with HHF resources. Over the next few months, THDA staff will continue to focus their

efforts on gathering data to support and modify the previously authorized HHF Programs and will

bring those modifications to the Board for approval or ratification, depending on required timing.

The 2016 timeline for THDA staff and the HHF Programs are as follows:

May-June: Data will be gathered to support new HHF Program proposals.

July: THDA will submit new HHF Program proposals to the THDA Board and U.S.

Treasury.

August: New HHF Programs will be approved by Treasury. All new HHF Programs must

be operational within 90 days from the date of program approval.

Tab # 8 Items: Grants Committee Meeting Materials

Tennessee Housing Development AgencyGrants Committee

May 24,20169245 a.m. Central Time

1

2

AGENDA

Call to Order

Approval of Minutes for March2Z,2016 Meeting

3 . Funding Recommendations under the 201 512016 HOME ProgramDescription............. .........Watt

4. Funding Recommendations under the Housing Trust FundCompetitive Grant Spring 2016 Program Description........... ......Watt

5. Funding Recommendations under the 201512016 Emergency Solutions GrantProgram Description........... ...........Watt

6. Approval of 2015-2016 HOME Program Description for Community HousingDevelopment Organizations ...........Watt

7. Approval of 2016-2017 Emergency Repair Program Description...............Watt

8. National Housing Trust Fund Program Update.... ..........Watt

9. Adjourn Baker

LOEATION

Baker

Baker

William R Snodgrass - Tennessee Tower312 Rosa L Parks Avenue, Third FloorNashville,T.l'l 37243

John Baker, ChairKendra Cooke

Tre HargettRon Jones

Justin WilsonThe Nashville Room

TENNESSEE HOUSING DEVELOPMENT AGENCYGRANTS COMMITTEE

March 22,2016

Pursuant to the call of the Chairman, the Grants Committee of the Tennessee Housing DevelopmentAgency Board of Directors met March 22,2016, at l0:30 A.M. at William R. Snodgrass Tennessee Tower,Nashville Room, Nashville, Tennessee.

The following members were present: John Baker, Ron Jones, Keith Boring for Secretary of StateTre Hargett, and Ann Butterworth for Comptroller Justin 'Wilson. Also present was Chairman Brian Bills.

Mr. Baker called the meeting to order. The first item on the Committee's agenda was approval ofthe minutes from the January 26,2016, meeting. Upon motion by Mr. Jones, second by Ms. Butterwofth,the minutes were approved.

The second item on the agenda was an update on the National Housing Trust Fund. Don Watt,Director of Community Programs reminded the comrnittee that at the January meeting information wasshared regarding the program. It is a newly funded federal program that will support THDA's efforts toincrease and preserve the supply of rental housing for extremely low income families. Because the fundingis at minimum levels, all housing created in the initial year must be at 0-30Yo of AMI. Staff has begun theprogram development phase by completing a survey of interested parties in February, which generafed 479responses. Highlights of the survey are as follows:

o I and 2 bedroorn units were most needed,o Higher preference for housing that did not limit only for certain populations.. With targeting, families and individuals experiencing homelessness was the overwhelming

population with need, followed by elderly and persons with disabilities.o Integrated housing targeted to higher incomes rather than housing exclusively for this

income range.o Lack of affordable, available units was the highest banier identified, followed by lack of

access to rental assistance.o Other baniers included, lack of rental assistance, high land acquisition costs, and

community opposition.

Staff will use this input, as well as information gathered at various meetings to begin to shape thepolicy for the required Action Plan that will be subrnitted to HUD. Staff is awaiting further guidance fromHUD in order to fully develop the Action Plan.

The third item on the agenda was an update on the 2015-2016 HOME Program. Mr. Watt informedthe committee that THDA received 48 applications requesting$22.2 million in funding for the Urban/Ruralround. The agency received 4 applications from CHDOs requesting $1.865 million in funding. The agency

has over $3 million that must be used by CHDOs. Since there is a two-year window to commit funds forCHDO activities, staff anticipates requesting an additional CHDO round at the May meeting. Also, theagency received 22 eligible applications for the 2016 Spring Competitive Grant Round of the Housing TrustFund requesting $7.48 million in funding. THDA also received 61 applications for funding in theCompetitive Grant Round for the Emergency Solutions Program. There is $4.2 million available forfunding.

The fourth item on the agenda was an update of the contract extension requests granted in 2015.

THDA granted 9 contract extensions in 2015. Each of the projects is progressing towards closeout. SumnerCounty was provided a second extension of their 2011 HOME grant deadline in order to allow for thecompletion of construction of the final unit. The unit was completed in December of 2015 and the owner is

residing in the unit. Site work was scheduled to be completed by March 25,2016. There continue to be

issues between the homeowner and the county. THDA has communicated to Sumner County and theirattorney that is the responsibility of the county to deliver a unit that meets HOME requirements, whichincludes signing of the Restrictive Covenant and Deed of Trust, which restricts the property and obligatesthe homeowner. Sumner County failed to take this action on the front end and THDA has left it to their

attorney to make sure the necessary steps are taken to ensure compliance. Ultimately, if THDA determinesthat the requirements have not been met, Sumner County will be liable to repay the HOME funds investedin the project.

The fifth item for consideration was the authorization to prepare and submit the WeatherizationAssistance Program Model Plan which serves as the application to the Department of Energy for theseresources. Applications from states are due to the Department of Energy no later than May l, 2016.Approval was requested to submit the application, subject to review of any significant changes prior to itssubmission by the Board Chair and Executive Director. Brian Bills motioned to approve stafPs request tosubmit the application to the Department of Energy for the Weatherization Assistance Program. Mr. Jonesseconded. The motion was approved with no exceptions.

There being no further business to come before the Committee, the meeting was adjourned.



Approved this _ day of May,2016

2

Bill HaslamGovernor

Tennessee Housing Development AgencyAndrew Jackson Building Third Floor502 Deaderick St.o Nashville, TN 37243

MEMORANDUM


TO:

FROM:

DATE:

RE:

Grants Committee and Board of Directors

Don Watt, Director of Community ProgramrÞJ

May I1,2016

Funding Recommendations for the 2015-2016 HOME Program

Attached are the staff funding recommendations for the 2015-2016 HOME Program and a recommendation toaddress an extraordinary situation affecting the CHDO Round.

As shown on the table below, the State of Tennessee has been awarded HOME grants totaling $18,584,812 inFederal Fiscal Year 2015 and 2016 from the U.S. Department of Housing and Urban Development. Of thatamount, l0% is set-aside for administrative expenses, líYo for nonprofit housing developers designated as aCommunify Housing DevelopmentOrganization (CHDO). Additionally,T%o of the total amount of the set-asidefor CHDOs is allocated for operating expenses of CHDOs; however, by federal regulation these operating firndsare subtracted from the non-CHDO allocation. Finally, $397,500 in CHDO funds remains from the2014 HOMEAllocation, 5174,121.94 has been returned unspent from prior funding rounds, and $5,413.03 in program incomehas been received.

Reflecting all of the funding allocations and adjustments, the total amount of funding available under the 2015-2016 HOME Program Description to implement eligible program activities is as follows:

Urban Matrix

Rural Matrix

CHDO Matrix

2015

$2,923,471

$3,900,317

s|,745,219

2016

$3,123,656

s3,975,562

$1,440,003

Total

$6,047,127

s7,875,879

s3,185,222


Page2

The urban areas are the following cor.rnties: Anderson, Blount, Bradley, Carter, Coffee, Dyer, Gibson, Hamilton,Hamblen, Haywood, Loudon, Madison, Maury, Montgomery, Putnam, Roane, Rutherford, Sumner, Unicoi,Williamson, and Wilson. All other counties are considered rural. The 2015-2016 HOME Program Descriptionsets a $750,000 limit on the amount of HOME funding that can be awarded to any one county and a target

minimum grant of $250,000.

In the Rural Matrix, staff is recommending the award of $7,679,000 in program funding and $492,000 inadministrative funds to 19 communities that will improve 214 owner-occupied residences. Successful

applications in Campbell, Fentress, and Scott counties were reduced proportionately in order to comply with the

$750,000 county maximum standard. With this recommendation, $196,879 is recommended to be caried forwardfor allocation in a future funding round. Attached is the proposed Rural Matrix. Staff recommends approval ofthe Rural Matrix as attached.

In the Urban Matrix, staff is recommending the award of $4,334,993 to I I communities that will assist 7

households purchase a home and 175 homeowners improve their residence. With this recommendation,

51,712,134 in funds is recommended to be caried forward for allocation in a future funding round. Attached is

the proposed Urban Matrix. Staff recommends approval of the Urban Matrix as attached.

For the CHDO Matrix, due to extraordinary circumstances, staff is not recommending an award to any applicants

at this point. THDA received four applications under the CHDO round, requesting $1,860,000 in CHDO funds

and $140,000 in operating funds. These applicants were Buffalo Valley, Eastern Eight Community Development

Corporation, Clinch-Powell Resource Conservation and Development Council, and Community HousingPartnership of Williamson County. While each of the applications proposed eligible activities, the four applicants

did not meet the threshold requirement for designation as a Community Housing Development Organization

based on the documentation submitted. As a result, staff does not recommend making an award at this time inorder to ensure compliance with the mandated federal requirements for designation as a CHDO.

Staff also recognizes the importance of THDA's compliance with its federal program obligations to ensure the

commitment of CHDO resources by the respective deadlines of June 30,2017 and June 30, 2018. Therefore,

THDA must act quickly to make the award of CHDO funds to ensure sufficient time for successful CHDOapplicants to implement their projects and commit the HOME resources. Due to these extraordinary

circumstances, staff recommends that the Grants Committee and the THDA Board of Directors authorize a 30

calendar day period for the four applicants to correct deficiencies in their application to meet federal CHDOqualification requirements. Following that period, THDA staff will make a funding recommendation to the Board

at its meeting in July.


2015^2016 HOME RURAL MATRIX

APPLICANT COUNTYEMW

PROGRAM $ ADMIN $ TOTAL#oFHH

ACTIVITYPROG

DESIGNNEED

NOTSERV

DISASTERAREAS

LEVRGEGROWTH

PLANENERGY

CONSERVTOTALSCORE

FUNDS

Savannah Hardin $ 470,000 $ 30.000 $ 500,000 13 HU F<enaÞ 42 33 30 10 0 10 5 130 $ 7,405,879Hedsoe uounty Hedsoe E $ 4/0,00u s 30,u00 $ 500,00u 12 nu Kenao 42 42 19 10 0 10 5 128 üb ,VJþ,ö¡rV

Greene County Greene E $ 470,000 $ 30,000 $ 500,000 16 l-lo RenaD 42 27 33 10 1 10 5 128 $ 6,465,879Hawkins Countv Hawkins E $ 470,000 $ 30,000 $ 500,000 16 HO Rehab 42 27 32 10 1 '10 5 127 5,995,879Surqoinsville Hawkins E $ 235,000 $ 15,000 $ 250,000 B l-lo Rehab 42 27 32 10 1 10 5 127 $5 ,760,879McM¡nn County McMinn E $ 470,000 $ 30,000 $ 500,000 12 HO RENAb 42 25 34 10 0 10 5 126 $ 5,290,879Bolivar Hardeman $ 300,000 $ 2r,000 $ 321,000 7 HO Rehab 28 47 25 10 1 10 5 126 $ 4,990,879Huntsville Scott E $ 352,500 $ 22,500 $ 375,000 B HO Rehab 32 47 l9 10 0 l0 5 '123 $4 638.379Caryville Campbell E $ 352,500 $ 22,500 $ 375,000 I HO RENAb 36 37 23 10 0 10 5 121 $ 4,285,879Scott Countv Scott E $ 352,500 $ 22.500 $ 375,000 10 HO Rehab 26 47 19 10 0 10 5 117 $ 3,933,379LaFollette Campbell E $ 352,500 $ 22,500 $ 375,000 B HO Rehab 32 37 23 10 0 10 5 117New Market Jefferson E $ 470,000 $ 30,000 $ 500,000 13 hto Rehab 26 23 40 't0 0 10 5 114 3 1'lJohnson Counlv Johnson E $ 470,000 $ 30,000 $ 500.000 16 HO Rehab 42 41 15 0 1 10 5 114 $ 2,640,879Fentress County Fentress M $ 352,500 $ 22,500 $ 375,000 I HO Rehab 30 34 21 10 0 10 5 110Jamestown Fentress M $ 352,500 $ 22,500 $ 375,000 I H(J Renab 29 34 21 10 0 10 5 109 1

Benton Polk E $ 470,000 $ 30,000 $ 500,000 't2 HO Rehab 42 27 22 0 0 10 5 106 $ 1,465,879Paris Henry $ 329,000 $ 21,000 $ 350,000 10 HO Rehab 28 32 27 0 1 l0 5 103,oopertown Robertson M $ 470,000 $ 30,000 $ 500,000 't6 HO REhAþ 30 18 40 0 0 10 5 103 $ 666,879

Luthell Union E $ 470,000 $ 30.000 $ 500,000 10 HO Rehab 32 36 20 0 0 10 5 103 $ 196,879Lewisburq Marshall M $ 470,000 $ 30,000 $ 500,000 16 HU KENAþ 30 22 24 1U U 1U c 1U1 s 2t3.1211urab orcnard uumþerlancf M $ 4/U,0UU ü; 3U,0UU $ SUU,UUO 12 H(J Kenao 29 2Q 24 10 0 '10 5 98 u t4ó.121tMOnroe uounty Monroe E $ 470,000 $ 30,000 {r Suu,uuu 13 nu Kenao 16 25 31 10 0 10 5 97Sweetwater Monroe E $ 470,000 $ 30,000 $ 500,000 13 HO REhAb 16 25 31 10 U 1U 5 9t oö3,121 )

Bedforcl CountV Bedford M $ 470,000 $ 30,000 $ 500,000 15 HU F<enaþ '14 30 27 10 U 1U 5 96Huntlancf l- ranl(lin M s 470,0uu $ 30,00t) s 500,000 15 H(J KENAD 14 21 46 0 0 10 5 96 ür (2. õ23.12'Dwanrace Bedl0rd M lt 4 /u,uuu S 3U,UUU s 50u,0uu 15 HU KENAO 14 30 27 10 0 10 5 96 uvJ.l z1 lCheatham County Cheatham M $ 470,000 $ 30,000 $ 500,000 16 HO RENAþ 3U 2U 30 0 0 10 5 95 563,121Stewart County Stewart M $ 470,000 $ 30,000 $ 500,000 16 HU RENAb 30 25 22 U 0 10 5 92 $(4G¡les GountV G¡IES M $ 470,000 $ 30,000 $ 500.000 15 HU KENAO 14 24 25 10 0 1U 5 ööHouston uounty l-louston M $ 4/U,0U0 s 30,000 s 500,000 16 HU KENAD 30 25 17 0 0 10 5 87unapel Hrll MArSnAll M ìr 4/u,uuu $ 3U,UUU $ SUU,UUU 15 H(J Kenao 14 22 24 10 0 10 5 85L¡ncoln County Lincoln M $ 470,000 $ 30,000 $ 500,000 15 H() Renao 't4 23 32 0 0 10 5 84Petersburo Lincoln M $ 470.000 $ 30,000 $ 500,000 15 HU RENAb 14 23 32 0 U 10 5 a4Perrv Countv Perry M $ 470,000 $ 30,000 $ 500,000 15 HU KENAD 14 28 23 0 0 1U 5 80 üi (er. öþ3,121)DicKson L;ounty utcKson M T; 4/U,00u s 30,0uu $ 500,000 13 HU KENAO 16 21 27 0 0 10 5 79 32ó.1:z11HrcKman uounly Hickman M $ 470,000 lr öu,uuu li Suu,uuu 15 NU KCNAD 14 za 21 0 0 10 5 78Greeneville* Greene E s 235.000 s '15.000 $ 250.000 I HO Rehab NS NS NS NS NS NS NS NS $ (8. 028.121\* = Did not meet threshold. As a result, NS = No Score Given

7,679,000TOTAL APPLTCATTONS RECOMMENDEDI

FOR FUNDING:l $ $ 492,000 $ I,r71,000 214TOTALAPPLICATIONS RECEIVED:I $ 14.259.000 s 912.000 $ 15.171.000 42',1

Fenfress, and Scott counties. Applications in Hawkins were submitted w¡th antiÇ¡pat¡on of the county maximum; no reductions were taken. Un¡ts to be assisfed have been conespondingly reduced based on the

1ol 1

cost per un¡t proposed ¡n the application. There is $196,879 in lunds remaining in this round that will be canied forward for allocation in a future funding round.

2015.2016 HOME URBAN MATRIX

TOTAL APPLICATIONSRECOMMENDED FOR FUNDING: $ 4.334,993 $ 276.202 $ 4,61 1 ,1 95 182

TOTAL APPLICATIONS RECEIVED: $ 4,334,993 $ 276,202 s 4.61 1 .1 95 182

EXPUNATTON OF PROPOSED FUNDING FOR THE URBAN ROUND:

counties were submitted in anticipation of county award maximum. There is $1,712,134 that will be canied forvvard to a future funding round.

APPLICANT COUNTYEMW

PROGRAM $ ADM]N $ TOTAL#oFHH

ACTIVITYPROG

DESIGNNEED

NOTSERV

DISASTERAREAS

LEVRGEGROWTH

PLANENERGY

CONSERVTOTALSCORE

PROGRAMFUNDS

AVAILABLE86,047,127

Blount uounly Haþrlatfor Humanitv Blount E $ 104.993 $ 6.202 $ 111,195 7 DPA,/Homeowner 40 l9 40 10 10 10 5 134 s 5.942.134Bradlev Countv Bradlev E s 352.500 s 22.500 s 375.000 I HO Rehab 42 24 36 0 0 10 5 117 $ 5,589,634

Cleveland Bradlev E $ 352,500 s 22.500 s 375.000 I HO Rehab 42 24 36 0 0 10 5 117 s 5.237.134Oak Ridoe Anderson E $ 470.000 $ 30.000 $ 500,000 63 HO Rehab 29 24 24 10 't0 10 5 112 s 4.767.134Friendsville Blount E s 470.000 $ 30.000 $ 500.000 13 HO Rehab 26 19 40 10 0 10 5 110 s 4.297j34Erwin Unicoi E s 235.000 $ 15.000 s 250.000 I HO Rehab 42 31 21 0 1 10 5 110 $ 4,062.134Unicoi Countv Unicoi E $ 470,000 $ 30.000 $ 500,000 16 HO Rehab 42 31 21 0 1 10 5 110 s 3.592.134Loudon Loudon E s 470.000 $ 30.000 $ 500.000 12 HO Rehab 36 19 25 10 0 10 5 105 s 3.122.134

Eaqleville Rutherford M s 470.000 s 30.000 $ 500.000 13 HO Rehab 16 14 50 0 0 10 5 95 s 2.652.134Lebanon Wilson M $ 470,000 $ 30,000 s 500.000 16 HO Rehab 30 10 36 0 0 10 5 91 s 2.182.134lMontoomerv Countv Montoomerv M $ 470.000 $ 30.000 $ 500,000 16 HO Rehab 30 16 25 0 0 10 5 86 $ 1.712.134

1of1



Bill HaslamGovernor

FROM

DATE


TO

RE:

MEMORANDUM


Don Watt, Director of Community ProgramtF

May 11,2016

2016 Spring Competitive Grant Funding Recommendations

within the South Main Arts District of Memphis into a mixed-use art space offering 58

affordable live/work units for low income artists and their families.

Attached is the matrix and staff funding recommendations for the 2016 Spring Competitive Grants ofthe Tennessee Housing Trust Fund. THDA has $2,300,000 available for the Spring Competitive Grants.THDA received 27 applications requesting over $8.6 million. Staff recommends full funding for the topfive applicants as shown on the attached funding matrix to complete the following activities:

Buffalo Valley.Inc. - (Middle TN) - New construction of 6 units of affordable single familyrental housing, 4 units of which will be in Chattanooga for formerly homeless veterans targetedto those with disabilities. The remaining two units will be constructed in Clarksville and willtarget individuals at30Yo of AMI or less, including those with disabilities.

a

a Kinesport Housins & Redevelopment Authority - (East TN) - Rehabilitation of adowntown apartment building to create 15 one and two bedroom units, 100% of which will beset aside for households at 30% of AMI or less.

Brownsville Housine Authoritv - (West TN) New construction of four units of housing forelderly or special need households at300/o of Area Median Income or less immediately adjacentto the existing Summer Oaks complex constructed in 2015.

a Housins Foundation of West Tennessee - (West TN) - Acquisition and rehabilitation of 8homes in Madison County for 16-24 individuals with intellectual and developmentaldisabilities.

Artspace Nonprofit" LLC - ('West TN) - Redevelopment of a blighted and vacant blocko

www.thda.org - (615) 815-2200 - Toll Free: 800-228-THDA

The recommended funding amount of $2,002,636 will create 91 units of housing, benefiting 99

households.

The following applicants submitted proposals that were determined to be ineligible for consideration:

o Case Management, Inc. - The application was not signed.

. Dismas, Inc. - The application sought funding for support services, an ineligible activity under

the program description.

o Doors of Hope - The application did not meet threshold. The applicant proposed to serve ex-offenders, but is not an approved provider of the Tennessee Department of Corrections.

. Frayser Community Development Corporation - Application was incomplete. The applicant didnot submit a copy of their most recent audit or financial statements or a resolution authorizingthe submission of the application.

o General Habitat Corporation - The application did not meet threshold. The applicant did notprovide a current Certificate of Existence, a Board Resolution approving submission of the

application, or a copy of the latest audit or financial statement.

. Genesis House - Application was received after the deadline.

o Grace Church of God in Christ - Application was not signed.

o Helen Ross McNabb - The applicant did not provide a copy of a resolution authorizing the

submission of the application and did not provide a business plan for the organization.

o Men of Valor - Application was incomplete. The applicant's 501(cX3) advance rulingdetermination from the IRS was expired.

o Scott Appalachian Industries, Inc. - Application was incomplete. The applicant's 501(c)(3)

advance ruling determination from the IRS has expired.

o Senior CitizenHome Assistance Service, Inc. - Application was received after the deadline.

o Southwest TN Community Development Corporation - Application was received after the

deadline.

TENNESSEE HOUSING TRUST FUND COMPETITIVE GRANTS PROGRAM2OI6 SPRING ROUND

NAME OF APPLICANT COUNTYE

MW

HTFProgramRequest

HTF AdmnRequest

TOTAL HTFMATCHING

FUNDS(Cash)

MATCHINGSERVICES /PROPERTY/DONATIONS

TOTALPROJECTcosTs

#ofHHs

#ofUn¡ts

ACTIVIry POPULATIONCAPABILITY

70 PtsNEED20 Pts

INNOVATION10 Pts

TOTALSCORE

TOTALFUNDS

AVAILABLE

T 23oonooBufalovallev;lnc. :"" .',:, Montoomerv s ¿65000 s 35 ollf) s 500 0nô .ç.:33ôOOO s 2¿5 000 s Lo75 ono 6 â Rêntal NO Ll-Homeless-Vets 3 s 1 800 000K¡nosmrl Hou.sinô & Rerlê,vêlônmênl Àr{horitu Sullivãn. s ¿65 00ô $. 35 000 $. 839000 ß- s 1.339 000 15 15 Renlal Rehab 7 7A $ 1_300.000

rôwnsvillè Hôusinû Aulhoritv Hrwôôd $ 214 136 s. . 1.000 S-: 215.136 S: i 322-500 s $ :., 537-636 4 Rentet NC ELI - Elderlv- , .48 $ t_084.864lous¡no Foudat¡on of Wêst Tenness€€. lnc. 'Motli"^^tt' !R : .:' ß 7¿5 nnn IA f. Â ntâl Rehâh 56 69 s , 797.364

Añsoãæ Tênnessêê Nónômfd- LLC Shelbv s 500 0oo s: $ 500_000 s 700 000 $ 12 948 383 $ 14.148.383 58 58. lènlalNC ,' : LI 55 66 s 297.364Eastern Eioht CDC Sullivan E $ 465.000 $ 35,000 $ 500.000 $ 330.000 $ 600.000 $ 1.430.000 12 12 Rental NC LI 53 5 ß 1202 63âìKnoxville Commrrnilv f)evelonmenl Corôorâl¡on Knôv F s 300 00Ô s s 300.000 ß 352 ¿C5 $ 652.495 4A 4A Rental Rehab I l-Flderlv-D¡sebled 55 7 64 $ t502.636)l\richael Dunn Foundat¡on Roâne E $ 49.204 $ g ac 20Á, $ 49.204 $ c8 ¿08 3 1 Rental Rehab Ex-offenders 51 I 6't s t551 840)Positivelv Livino lnc Knox F s 4'l 74? a s 41.742 $ 190 000 s s 231.742 5 5 Rental NC MI-DD 49 4 6 59 $ t593.582Be a Heloino Hand Foundation Davidson M $ 224.961 $ 15.747 $ 240.709 $ 229.887 $ $ 470.596 2 2 Rental NC -arqe Families 46 4 7 57 s (792 549\Carev Counselino Cenler lnc Cârrôll s 376 671 s 26 367 s 403 038 s $ 2rì9 82C s 612.867 7 7 Renlal NC I |-DD-Mt 43 8 5 56 $ t1.195.587Dawn of Hooe Foundat¡on Wash¡nqton E s 160.000 $ '11.200 s '17'l )¡o $ 72.500 $ 87.500 $ 331.200 b 2 Rental Nc DD 43 4 7 54 s 11 366 7871

Irn¡ted Housino lnc Shelbv s 465 000 $ 35 0oo $ 500.000 $ $ $ 500.000 I I Rental Aco/Rehâb DD-l\ll-Eldelv 39 4 9 52 $ t1.866.787Horizon Communitv Development CorDoration F s 26' qôfì g l5 750 $ 278 650 s 325 000 s 603 650 7 2 Renlal Aco/Rehah .lômêlêss-Ml 41 4 50 g (2 145 437)

Seruices Shelbv $ 480 205 $ t9 795 $ 500,000 $ 250 000 $ 750,000 44 14 Rental Acq/Rehab LI 14 7 4 25 v t2,645,43t

2

9:25 AM 5t1112016

To Be Sent Separately

Tab # 8 Agenda Items No.

5. Funding Recommendations under the 2015/2016 Emergency Solutions Grant Program Description 6. Approval of 2015-2016 HOME Program Description for Community Housing Development Organizations

Documentation regarding these items will be provided prior to the Committee meeting.



MEMORANDUM


Bill HaslamGovernor

TO:

FROM:

DATE:

RE:


Don Watt, Director of Community Programsl¿t^J

May 11,2016

2017 Program Description for the Emergency Repair Program

THDA's Emergency Repair Program (ERP) was established in 2006 to provide resources to low incomehomeowners who are elderly (60 years or older) to correct, repair, or replace an essential system and/orcritical structural problem. The program is not designed to provide comprehensive rehabilitation to a unit,but to stabilize the homeowner's residence by making rapid, essential repairs to make the home livableand enable the homeowner to maintain established supports within the community. The program has

assisted 2,457 households since its inception. In July 2015, the Board authorized the extension of thisprogram to include homeowners who have a disability.

The program is administered through the eight Development Districts and the Southwest HumanResources Agency as shown on the attached map. Funds are distributed equally to each administeringagency for program implementation across their service area. To facilitate implementation of addedprogram structure, staff is developing an ERP manual to outline the program's requirements andprocesses. Staff also will provide program training to the administering agencies on June 7,2016.

The Board has set aside $2.7 million for the Emergency Repair Program beginning with the new contractsthat will be effective on July I,2016, providing $300,000 to each administering agency. In preparationfor this new funding cycle, the attached20IT Program Description has been developed. Highlights of the2017 Program Description include:

(1 ) Homeowner Eligibilit)¡:o The applicant must be at least 60 years of age or an individual with a disability.o The applicant must occupy the property to be repaired as his/her principal residence.o The applicant must have a sufficient ownership interest in the property to be repaired and be current

on payment of property taxes.o The household income of the applicant must be at or below 60%o of Area Median Income.

www.thcla.ors - (615) 815-2200 - Toll Free: 800-228-THDA

(2) Property Eligibility:o The property must be an owner-occupied property, except for manufactured housing and homes

on trust or tribal lands.o For manufactured homes, the applicant must hold title to the manufactured home, but is not

required to own the lot.o Housing located on trust or tribal lands must have a leasehold interest of at least 50 years.o The unit must be a single family dwelling unit or other dwelling form approved in advance by

THDA.

(3) ERP Funding Assistance:o The maximum amount of funds awarded to an eligible homeowner from ERP funds is $10,000.

The funds provided are a grant to the homeowner and do not require a compliance period secured

by a lien on the property.

(4) Match:o A 50o/o match of the THDA grant used for the emergency repairs is required. The match can be

provided by:o The homeowner or the homeowner's family.o Federal sources such as USDA Rural Development,'Weathefization Assistance Program, Low

Income Home Energy Assistance Program (LIHEAP) funds used for weatherization activities,state or local HOME Investment Partnership funds, or state or local Community DevelopmentBlock Grant (CDBG) funds.

o Church groups, local agencies, or nonprofit organizations.o Donated labor and/or materials.o A funding pool or grants from local lender(s) to the administering agency.

o The value of prior repairs completed on a home as long as the repairs were undertaken withinone calendar year of the effective date of the contract between the homeowner and contractorfor the ERP funded repairs and the related match contribution can be documentedappropriately.

(5) Eligible Repairs:. The following activities are approved repair activities and represent the type of repairs the program

is meant to address:

o Rooßo Electrical systems

o Plumbing systems

o Septic systems

o Heating and air systems

o Structural repairs to floors or wallso Bathroom modifications and ramps necessary for the homeowner with a physical disability to

access and use the home for basic life functions.. The Program Description now requires that administering agencies to receive THDA approval on

a case by case basis for other activities from those listed above.

o Energy efficiency is encouraged to be included in any repairs made to a unit.o A new requirement has been added to require that units built prior to 1978 and which include a

child under the age of 6 must have a Visual Inspection for Lead Based Paint completed beforefinalizing the work scope.

o A new requirement has been added which requires the work completed to be inspected by aqualified licensed or FHA listed inspector.

(6) Ineligible Activities:o The Program Description formalizes in writing those activities that are ineligible costs.

(7) Administrative Costs:o Up to I0%o of the resources may be used for administrative costs of the administering agency.

Staff recommends approval of the 2017 Program Description as attached.

Ralph M. Perreyo Executive Director Tennessee HousingDevelopment Agency

Emergency Repair Program2017 P r ogram Description

Introduction

The Tennessee Housing Development Agency (THDA) operates a state-wide Emergency RepairProgram (ERP) through the Tennessee Housing Trust Fund to provide grants to low incomehomeowners who are either elderly (60 years or older) or who have a disability in order to correct,repair, or replace an essential system andlor critical structural problem. The purpose of ERP is tostabilize the homeowner's residence by making rapid, essential repairs to make the home livableand enable the homeowner to maintain established supports within the community. ERP is not acomprehensive homeowner rehabilitation program.

Allocation of Funds

ERP will be administered through Tennessee's nine Development Districts or other agenciesauthorized to work in all of the counties within a Development District region to help insure thatthe program is available state-wide ("administering agency"). Based on the amount set-asideannually by the THDA Board of Directors for ERP within the Tennessee Housing Trust Fund, thefunds will be allocated equally to each administering agency. The allocation will allow I0o/o forthe administering agency's costs to implement ERP.

Program Requirements:

1. Homeowner Elieibility:

Applicants must meet all of the following requirements:

o The applicant must be at least 60 years of age or an individual with a disability.o The applicant must occupy the property to be repaired as his/her principal residence.o The applicant must have an ownership interest in the property to be repaired.o The household income of the applicant must be at or below 60% of Area Median Income

as defined by the most current Income Limits for the Section 8 Rental Assistance Programissued by the U.S. Department of Housing and Urban Development. The calculation anddetermination of household income must follow the guidelines provided in the EmergencyRepair Program Manual.

Andrew Jockson Building Third Floor - 502 Deoderick St, - Noshville, TN 32243www.THDA,org - (ól 5) 81 5-2200 - Toll Free: 800-228-THDA

o The applicant must be current on the payment of local property taxes for the property to beassisted.

The administering agency may establish additional program preferences of homeowner eligibilitybased on the needs and priorities of their local service area.

2. Property Elieibility:

The property must be an owner-occupied property in which title to the property and the home mustbe in the form of fee simple ownership, a life estate, or a minimum 99-year leasehold interest,except for manufactured housing and homes on trust or tribal lands. In cases where manufacturedhomes are on leased property, such as a manufactured home park, the applicant must hold title tothe manufactured home, but is not required to own the lot. Housing located on trust or tribal landsminimally must have a leasehold interest of 50 years.

The unit must be a single family dwelling unit or other form of dwelling approved in advance byTHDA. In cases where a building of more than one unit is assisted, no improvements may be

made to common spaces or systems.

3. Subsidy Level:

The maximum amount of funds awarded to an eligible homeowner from ERP funds is $10,000.The funds provided arc a grant to the homeowner and do not require a compliance period secured

by a lien on the property.

4, Match:

A match of at least 50% of the amount of ERP funds is required. The match can be provided by:

o The homeowner or the homeowner's family.o Federal sources such as USDA Rural Development, Weatherization Assistance Program,

Low Income Home Energy Assistance Program (LIHEAP) funds used for weatherizationactivities, state or local HOME Investment Partnership funds, or state or local CommunityDevelopment Block Grant (CDBG) funds.

o Church groups, local agencies, or nonprofit organizations.o Donated labor andlor materials.o A funding pool or grants from local lender(s) to the administering agency.. The value of prior repairs completed on a home may be used as match as long as the repairs

were undertaken within one calendar year of the effective date of the contract between thehomeowner and contractor for the ERP funded repairs and the related match contributioncan be documented appropriately.

2

5. Elieible Repairs:

ERP is intended to make immediate repairs to an essential system so that the homeowner can

continue to reside in his/her home. ERP does not require that the entire structure be brought intocompliance with codes, but the work done must be in compliance with codes. The following are

approved repair activities and represent the type of repairs ERP is meant to address:

o Roofso Electrical systemso Plumbing systemso Septic systemsr Heating and air systemso Structural repairs to floors or wallso Bathroom modifications and ramps necessary for the homeowner with a physical disability

to access and use the home for basic life functions.

The homeowner will help define the nature of the emergency repair. In many instances, additionalwork will need to be completed to the house that cannot be addressed with ERP and there may notbe a visible difference in the house once the emergency repairs have been completed. Theadministering agency must receive THDA approval to implement activities beyond those notedabove.

When applicable, repair work should include measures to improve the energy efficiency of thehome.

If a home proposed for assistance with ERP funds was built prior to 1978 and a youth under theage of 6 resides full-time in the home, the administering agency must complete a visual lead-based

paint assessment as part of the initial work write up. The administering agency must review theproposed work scope, including the results of the visual lead based paint assessment, with THDAbefore finalizing the work scope and initiating any work activity.

With the understanding that ERP is not to gain code compliance with the entire structure, but tocorrect an immediate issue to an essential system for habitability, only those items that are repaired

as part of the ERP funded project must be inspected by a qualified licensed or FHA approvedinspector. If the administering agency must obtain athird party inspector, the cost of the inspection

is an eligible soft cost for the project.

6. Inelieible Activities:

The following are ineligible activities associated with the ERP funded projects:

The purchase or repair of appliances not permanently attached to the home, includingrefrigerators, dishwashers, washers, and dryers.

a

J

o Off-site infrastructure.o Landscaping, except for the restoration ofthe site following an eligible activity or for health

and safety reasons.o Relocation costs of the homeowner.

Costs associated with ineligible activities may not count towards the project's required matchcontribution.

7. Contractor OualifTcations

The emergency repairs must be completed by a contractor appropriately licensed for the type ofrepair work being performed. The administering agency will procure qualified contractors and

provide the homeowner with a choice of qualified contractors. The administering agency willreview the cost estimates with the homeowner and the homeowner will select a contractor to do

the work. In addition to cost, the ability to respond rapidly to the emergency situation and past

performance can be determining factors in contractor selection.

8. Elieible Administrative Costs:

Funds may be used to pay administrative costs incurred by the administrative agency in the

performance of program activities, but may not exceed the amount of administrative funds

allocated in THDA's agreement with the administrative agency. Administrative funds may be

used for the following activities and as further described in the Emergency Repair ProgramManual:

a. General management, oversight, and coordination of the program, including travel cost

incuned and billed at the State approved rate.

b. Public information, including the provision of information and other resources to residents

and citizen organizations participating in the planning, implementation and assessment ofprojects assisted with ERP funds.

c. Indirect costs based on a cost allocation plan approved by the cognizant agency.

Administrative funds are not subject to the match requirement.

PROGRAM ADMINISTRATION REQUIREMENTS :

1. Equal Opportunity:

No person shall on the grounds of race, color, religion, sex, familial status, national origin, ordisability be excluded from parlicipation, denied benefits or subjected to discrimination under thisprogram.

4

2, Conflict of Interest:

Any person who is an employee, agent, consultant, officer or elected official or appointed officialof THDA or the administering agency and who exercises or has exercised any functions orresponsibilities with respect to activities assisted with ERP funds or who are in a position toparticipate in a decision-making process or gain inside information with regard to these activitiesmay not obtain a financial interest or frnancial benefit from an ERP assisted activity, or have a

financial interest in any contract, subcontract or agreement with respect to any ERP assistedactivity, or the proceeds from such activity, either for themselves or those whom they havebusiness or immediate family ties, during their tenure or for one year thereafter. Immediate familyties include (whether by blood, marriage or adoption) the spouse, parent (including stepparent),child (including a stepchild), brother, sister (including a stepbrother or stepsister) grandparent,grandchild, and in laws of a covered person.

Administering agencies should avoid conflict of interest and the appearance of a conflict of interestin administering ERP. Activities which raise the appearance of a conflict of interest must bepresented to and reviewed by THDA prior to any actions by the administering agency. Theadministering agency may be required to repay any ERP funds used in a way that violates thisprovision.

3. Compliance with Emergency Repair Program Manual

Administering agencies will implement ERP in accordance with all policies and procedures

outlined in the Emergency Repair Program Manual, including, but not limited to:

o Outreach to Beneficiarieso Requests for Payment

' APPealsr Accessibility of Location to Accept Applicationso Recordkeepingo Reportingo Marketing of Program Outcomeso Grant Close-Out

5

Tennessee Development Districts and Contacts

Carter

Jefierson

CampbellSætt

¡¡organ

Bradl6yHamilion

\ ñirê

Gr¡¡ridy

Ruü€rforl

funffi

Davídson

Roberbon

(ll€s

Maury

Mortgmory

Lflrsce

fbßlon

Humphrsy3

$Êrvart

Vlåyn€Hard¡n

*ì

Henry

Carcll

fMcNa¡ry

\ bakley

Madsn

G¡bson

Hardffian

Hayrcod

Fayêt€

ryer

LaudErdal€

'Iipton

Sh6lby

N

A

Greater Nashville Regional CouncilGreer BroemelECD AdministratorSam Edwards, Executive Director501 Union Street, 6th FloorNashville, TN 37219Phone: (615) [email protected]

South Gentral TN Development DistrictSara BrownSolid Waste/Housing DirectorJerry Mansfìeld, Executive Director10'l Sam Watkins Blvd.Mount Pleasant, TN 38474(931) [email protected]

Upper Cumberland Development DistrictVicki ReelsSpecial Projects DirectorMark Farley, Executive Director1225 South Willow AvenueCookeville, TN 37402(931) [email protected]

0

Southeast TN Development DistrictDavid JohnsonHousing CoordinatorBeth Jones, Executive Director1 000 Riverfront ParkwayChattanooga, TN [email protected]

East TN Development DistrictLindsay CrockettHousing Plan ner/H istoric PreservationTerry Bobrowski, Executive Director216 Corporate PlaceAlcoa, TN 37701(865) [email protected]

First TN Development DistrictDonna LewisHousing Programs AssistantSusan Reid, Executive Director3211 N. Roan StreetJohnson City, TN [email protected]

25 50 Miles

Memphis Area Association of GovernmentsPaul MorrisHousing CoordinatorRalph Moore, Executive Director8289 Cordova Rd, Ste. 103Cordova, TN [email protected]

Northwest TN Development DistrictSpencer TaylorHousing CoordinatorJohn Bucy, Executive D¡rector124 Weldon DriveMartin, TN 38237731- 587-4213 ext.228spencer.taylor@ nwtdd. org

Southwest HRALisa SmithCommunity Services Director1527 \|/hite AvenueHenderson, TN [email protected]

Updated 2/2?J2016