Andrea FrymireVice President / Business

Development Officer - South RegionMidwest Housing Equity Group Inc500 N. Broadway Avenue Suite 150

Oklahoma City, OK 73102P: 405-278-7909

E: afrymire@mheginc.com

Andrea FrymireVice President / Business

Development Officer - South RegionMidwest Housing Equity Group Inc500 N. Broadway Avenue Suite 150

Oklahoma City, OK 73102P: 405-278-7909

E: afrymire@mheginc.com

OKLAHOMA AFFORDABLE HOUSING ACT OF 2014

Work on an Affordable Housing State Tax Credit begin in2013 with SB804 and continued in 2014 with HB3099.

SB2128-The Oklahoma Affordable Housing Act was passedby the 2nd Session of the 54th Legislature

The Act was signed by Governor Mary Fallin on June 3,2014

The final version of the Act is available online:http://webserver1.lsb.state.ok.us/cf_pdf/2013-14%20ENR/SB/SB2128%20ENR.PDF

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SB2128-Brief History

Is capped at $4M per year Is at 10 year credit Is Nonrefundable May be carried forward for a period of 5 years Is for qualified projects placed in service after July 1, 2015 Allocation of the State Tax Credit must be equal to the

allocation of the federal Low Income Housing Tax Credit Is not available in counties with a population over 150,000

(currently Cleveland, Oklahoma and Tulsa Counties) Cannot be used to reduce a tax liability accruing prior to

January 1, 2016

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The State Tax Credit:

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Allocation Year Year for which OHFA allocates credits

Eligibility Statement Statement authorized and issued by OHFA certifying that a project qualifies for the State Tax Credit

Federal Low Income Housing Tax Credit The federal tax credit as provided in Section 42 of the

Internal Revenue Code

Oklahoma Affordable Housing Tax Credit Tax credit created in Section 2357.403 of Title 68

in the Oklahoma Statutes

Qualified Project Qualified low-income building as defined by IRC Section 42, which is

located in Oklahoma in a county with a population less than 150,000

DEFINITIONS

Qualified Projects must be Placed in Service after July 1, 2015 State Tax Credits may be claimed for tax liability accruing after

January 1, 2016 State Tax Credits are assignable An insurance company may use the credits against state premium

tax or any other taxes imposed by Section 624 or 628 of Title 36 of the Oklahoma Statutes

If any portion of the federal tax credits are recaptured – this will trigger recapture of the proportionate amount of the State Tax Credit

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BILL HIGHLIGHTS

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Bill is subject to review every 5 years by a committee of nine

Committee Members 3 appointed by the

Governor 3 appointed by the

President Pro Tempore of the OK State Senate

3 appointed by the Speaker of the OK House of Representatives

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PROGRAM REVIEW

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OHFA plans for allocation of the State Tax Credit will be includedwith the 2015 QAP

The 2015 Draft QAP is now available online

According to the 2015 Draft QAP, OHFA will allocate the State TaxCredits by random drawing after the regular award of 9% TaxCredits

The only applicants that will participate in the drawing are thosethat received an allocation of federal credits and included a requestfor State Tax Credits in their application

STATE TAX CREDIT ALLOCATION PROCESS

Applicants requesting State Tax Credits must include two financing plans.

PLAN AApplicants must submit aCommitment letter from the Syndicator that: Defines amount to be

paid Number of pay-ins Percentage of partnership Any special conditions

PLAN BApplicants must provide an alternate plan for financing that does not include the use of State Tax Credits. Plan B may not include

an increase of 9% Credits Any funding gap must be

filled by another source Firm commitment

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2015 DRAFT QAP FINANCING PLANS

2015 Draft QAP notes OHFA is considering allowing State Tax Credits on 4% deals

OHFA is currently accepting feedback on this idea

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4% BOND DEALS

Monday, August 18, 2014OHFA Public Input Session1:00-4:00 in the Will Rogers Room

Wednesday, September 3, 2014OHFA Public Input Session10:00am in the Will Rogers Room

Wednesday, September 24, 2014Finalized QAP submitted to the Trusteesfor approval

Tuesday, October 7, 20142015 QAP Training Session1:00-4:00 in the Will Rogers Room

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IMPORTANT DATES