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• Community Development Financial Institution– Loan Fund– Credit Union

• Community Development Intermediary• Policy Center

– Started in 1994– 120,000 individuals assisted

– $1.6 billion in financing -Arkansas, Louisiana, Mississippi and Tennessee

HOPE Overview

Program Impact SummaryCommercial Lending• 67% of loans made to companies located in economically distressed areas• Nearly half (47%) of all loans were made to women or minority owned businesses Mortgage Lending• 91% of the mortgages closed were made to borrowers who are minorities, women, low-

income or located in an economically distressed community• 63% of mortgages were made to borrowers with incomes < 80% of the state AMI• 71% of mortgages went to ethnic minority owners • 80% of mortgages were for first-time home owners Consumer Lending• 59% of direct loans were payday alternative or credit builder loans• 56% of direct lending occurred in economically distressed communities

RAD Development

• Local HA owns the current property and units• 85 Unit Rehab built in 1960• Total Units owned by HA is 150• Partnership with a for-profit development group

– HA will become 51% GP in new LLC• HA will manage the property after rehab• Regional HA will provide the vouchers

Development Budget

• Sources– First Mortgage $ 900,000– Housing Tax Credits $ 6,000,000– HA soft loan $ 850,000– HOME funds $ 750,000– FHLB AHP Grant $ 500,000

– Total Sources $ 9,000,000

Total Uses• Land $ 166,500• Building Acquisition $ 1,523,500• Construction Hard Cost $ 4,600,000• Construction Insurance $ 230,000• Construction soft costs $ 130,000• Architect/Design $ 260,000• Construction Interest $ 130,000• Construction loan fee $ 60,000 • Legal Fees (owner) $ 190,000

Total Uses

• Operating Reserves $ 250,000• HTC Reservation and fees$ 280,000• Other Legal $ 80,000• Other Contingency $ 60,000• Accounting $ 20,000• Marketing/lease up $ 20,000• Developer’s Fee $ 1,000,000• Total $ 9,000,000

Construction Soft Costs• Bond $ 46,000• Survey $ 15,000• Market Study $ 20,000• Appraisal $ 5,000• Engineering $ 15,000• Relocation $ 15,000• Misc. Professional $ 10,000

Cash Flow Income• Rental Revenue $ 460,000• Misc. Revenue $ 15,000• Vacancy $ (24,000)

• Rental Revenue $ 451,000

Cash Flow Expenses• Salaries $ 95,000• Management Fee $ 27,500• Office Supplies $ 1,000• Professional Fees $ 10,000• Telephone $ 2,000• Administrative Expenses $ 5,000• Repairs and Maintenance $ 100,000• Utilities $ 6,500

Cash Flow Expenses• Taxes $ 23,000• Insurance $ 49,000• Total $ 319,000

• Income from Operations $ 132,000• Debt Service $ 70,000• Excess Cash $ 62,000• Debt Service Coverage 1.8

Things to note and pay attention to

• HA’s own land and property• HA’s typically have good management already

in place• Through RAD, HA’s have access to vouchers• All of these are valuable to HTC developers• Obviously can be done as straight rehab

without HTCs also, with or without an outside developer.

What Hope Can Offer

• Permanent Financing– Relatively small, under $2 million, perm loans– 30 year amortization/15 year balloon notes– Fixed rates for 15 year term– Relatively easy application and closing process