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Florida Housing Finance Corporation

Credit Underwriting Report

Lee County Housing Scattered Site Development HH02-009

Section A Board Summary

Section B Loan Commitment Conditions

Section C Supporting Information and Schedules

Prepared By:

AmeriNational Community Services, Inc

Revised Final Report

June 6, 2003

ACS

June 6, 2003

COMPLETENESS AND ISSUES CHECKLIST Development Name: Lee County Scattered Sites HH02_009 Report Date: June 6, 2003 In accordance with Rule Chapter 67-50, F.A.C. the Applicant is required to submit the information required to evaluate, complete, and determine its sufficiency in satisfying the requirements for Credit Underwriting to the Credit Underwriter in accordance with the schedule established by the FHFC. The following items must be satisfactorily addressed. “Satisfactorily” means that the Credit Underwriter has received and reviewed information and it conforms to the application. Unsatisfactory items, if any, are noted below and in the “Issues and Concerns” section of the Executive Summary.

Credit Underwriting Required Items:

STATUS Satisfactory /

Unsatisfactory

NOTE

A. Applicant/Borrower Information

1. Identity of Applicant/Borrower (officers/general partners, limited partnership, not-for-profit) and principals, and the ownership structure of the Borrowing Entity.

Satisfactory

2. Copy of documentation creating the Applicant/Mortgagor Entity.

Satisfactory

3. Resume, banking and trade references of the Applicant, including experience.

Satisfactory

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

Satisfactory

5. Completion by Borrower of the Certification of Previous Single-Family Housing Experience form.

Satisfactory

6. List of unsold inventory of property in single-family developments.

Satisfactory

B. Property Information 1. Detailed property description. Satisfactory 2. Location map identifying site and reflecting commercial

facilities, schools, and competitive developments. satisfactory

3. Survey. Satisfactory 4. Final site plan. Satisfactory 1 5. Evidence of site control (recorded deed – executed

contract). Satisfactory

6. Evidence of appropriate zoning. Satisfactory

7. Final plans and specifications. Satisfactory 1.

HOME PROGRAM CREDIT UNDERWRITING REPORT ACS

LEE CO. HOUSING SCATTERED SITE DEV. ii

June 6, 2003

8. Soil test reports, if applicable. N/A 9. General Contractor’s Agreement. Satisfactory 10. Evidence of concurrency. Satisfactory 11. Evidence of availability of utilities. Satisfactory 12. Feasibility Study / Market Study Satisfactory 13. Appraisal. The appraisal will be ordered by the credit

underwriter or the first mortgage lender.) The credit underwriter must receive a complete appraisal in order to complete credit underwriting.

Satisfactory

14. Environmental Site Assessment – Phase I. If the report is not dated within one year of the application date, an update from the assessor must be provided indicating the current environmental status.

Satisfactory

C. Financial Information 1. Audited financial statements for the most recent fiscal

year ended or acceptable alternative as stated in Rule 67-50 F.A.C.

Satisfactory

2. Sales and expense development. Satisfactory 3. Cover letter outlining terms of financing requested. Satisfactory

4. Commitment letter(s) for other financing sources (construction and permanent)

Satisfactory

5. Sources and uses of funds. Satisfactory 6. Executed general construction contract with “not to

exceed” costs. Satisfactory

D. Marketing

1. Copy of marketing plan. Satisfactory

2. Prior sales / Development marketing Satisfactory

1. Final plans and specifications are in detail for each unit in their construction agreement. Site

plans are not done until actual homes are selected by the homeowners.


LEE CO. HOUSING SCATTERED SITE DEV. iii

June 6, 2003

CHANGES FROM THE APPLICATION

Comparison Criteria

Yes

No

1. Does the level of experience of the current team equal or exceed that of the team described in the application?

X

2. Are all funding sources the same as shown in the Application? 1 3. Are all local government recommendations/contributions still in place at

the level described in the Application? X

4. Is the Development feasible with all amenities/features listed in the Application?

X

5. Do the site plans/architectural drawings account for all amenities/features listed in the Application?

X

6. Does the Applicant have site control at or above the level indicated in the Application?

X

7. Does the Applicant have adequate zoning as indicated in the Application? X

8. Have the development costs remained equal to or less than those listed in the Application?

X

9. Do all sources of FHFC funds total $25,766 per unit (subsidy limit) or less?

X

10. Is the Development feasible using the set-asides committed to in the Application?

X

11. If the Development has committed to serve a special target group (e.g. elderly, farm worker, fishing worker, single head of household, etc.), do the development and marketing plans contain specific provisions for implementation?

X

12. Is the Development, in all other material respects, the same as presented in the Application?

X

The following are explanations of each item checked “No” in the table above: 1. Initially, the Borrower was to use a revolving line of credit for construction however the Borrower has since decided it will self-fund the 10-unit development. The Borrower received additional SHIP funds for construction and permanent financing and will also use equity-partner contribution funds for the construction financing. This is beneficial to the development since financial costs will be decreased.


LEE CO. HOUSING SCATTERED SITE DEV. iv

June 6, 2003

Section A

Board Summary


________________________________________________________________________ LEE CO. HOUSING SCATTERED SITE DEV. PAGE A-1

June 6, 2003

Executive Summary: This is the HOME Investment Partnerships Program (“HOME”) Construction Loan Credit Underwriting Report for Lee County Scattered Site Development (“Lee Co. Housing Scattered Site Dev.”) for a proposed new construction development of single-family affordable homeownership houses to be located in Lee County, Florida. The development will consist of 10 single-family homes on 2.62 acres within the unincorporated community of Fort Myers. The market study anticipates that the development should experience an average monthly sales rate of two (2) homes after the start of sales. This results in the development being fully absorbed within five (5) months after the start of the sales program. The Applicant indicates it already has over 200 inquiries from potential homebuyers interested in this development. Since the Applicant will only start construction once a homebuyer is qualified, the qualification process is already under way. Therefore, once funding is approved, site work and construction can begin as soon as possible. Although the Applicant originally anticipated a conservative 20-month construction/absorption period, they agree that with an aggressive marketing plan they should be able to meet the five month estimation. With the amount of potential homebuyers already qualified and possible delays in homebuyer closings, ACS anticipates a 10-month construction/absorption period. Ownership Structure: Lee County Housing Development Corp (“Borrower”), was incorporated on August 26, 1991 and is a Florida not-for-profit corporation. The Borrower is also a state certified Community Housing Development Organization (CHDO) and governed by a diverse eleven-member board of directors. The Borrower is also acting as the Developer for this development. Therefore, the terms Developer and Borrower are used interchangeably in this underwriting. In the underwriter’s opinion, the Borrower has the experience and the financial resources necessary to complete this development. Also, by choosing ONE Construction, Inc. as the General Contractor, the Applicant has chosen a General Contractor who is experienced in single-family housing construction. The underwriter believes the assistance of both the General Contractor combined with the Borrower’s dedicated staff will be sufficient to permit the Borrower to complete the Lee Co. Housing Scattered Site Dev. HOME Loan: The Applicant has applied for a $206,833 HOME Construction Loan to be issued by Florida Housing Finance Corporation (“FHFC”) to assist in financing this development. This HOME Construction Loan will be secured by a first mortgage on the property. The FHFC Servicer, AmeriNational, will disburse the HOME Construction Loan funds pro-rata with other construction loan funds, but in no case will the HOME funds be more than 20% of any draw amount which is the ratio of the HOME Loan to the total development cost.



June 6, 2003

The Applicant’s Sources and Uses Statement shows that the Applicant plans to construct and sell 10 homes with a choice of different plans. That Statement also shows that the Applicant will use about $206,833 in HOME construction funds to pay for soft costs and infrastructure work. These funds will be available only after documentation by the Servicer that all permitting and federal requirements have been met. In order to assure FHFC that payment of these early expenses is warranted, the Applicant will be required to show the Servicer evidence of pre-sales on each home prior to requesting a draw of any HOME construction funds. The HOME Construction Loan will be non-amortizing and have a 5-year term with an interest rate of 0%. Principal is due on a pro-rata basis at the sale of each home. At maturity, all unpaid principal is due. A portion of the HOME Construction Loan may be converted to a permanent second mortgage to qualified homebuyers, to be used for down payment and closing cost assistance. The HOME loan must be in a single second lien position for the permanent phase. Other Construction Funding Sources: The Borrower as of June 6, 2003 has an approximate balance of $257,751 in liquid funds with SunTrust Bank. The Borrower has chosen to self-fund the development in lieu of the revolving line of credit that SunTrust approved. Their liquid amount would be sufficient for self-funding 2 units at the same time. Initially, Lee County provided a grant of $74,976 from its SHIP program. The funds have been encumbered and are included in Lee County’s funding budget. These funds bear no interest. The funds will initially be used for site development and at the time of individual home sale closings, pro-rata portions of these funds can be utilized for down payment assistance. In addition to the above SHIP financing, the Borrower has also secured additional SHIP funds for a total of $267,935 from Lee County Board of County Commissioners for the 10-unit development. Documentation verifies that all or a portion of SHIP funding for the proposed development will be considered a grant utilized to cover costs in excess of appraised values and will not be secured by a mortgage. Because the SHIP funds incur no interest, the Borrower plans to utilize all these funds at closing and during the first 2 months of construction. The Borrower has purchased the land for $73,328 and paid an additional $13,636 in soft costs relating to the purchase of land which all totals $86,964. Upon closing of permanent financing for each loan, the Borrower will be reimbursed for those amounts they prepaid. Permanent Funding Sources: Permanent funding sources for this development includes conventional first mortgage permanent loans, HOME permanent loans, SHIP loans/grants and homebuyer equity. SunTrust Bank has agreed to participate in a permanent financing program for qualified low and very low income homebuyers. Terms and conditions of a typical first mortgage loan include various fifteen (15) and thirty (30) year mortgage programs including but not limited to FHA, and VA. The bank will qualify Borrowers with monthly housing expense ratios (33/41%) and higher LTV ratios (up to 97%). Since the loan’s interest rate will not be locked until closing, AmeriNational has used an



June 6, 2003

underwriting interest rate of 7.00% for this program. The average first mortgage to each homebuyer should equal about $57,588 and will depend on family size and which model is chose. A portion of the HOME Construction Loan may be converted into HOME Permanent Loans to income-eligible homebuyers. HOME Permanent Loans are second mortgage loans that bear a 0% interest rate, and are non-amortizing with principal deferment until maturity. The HOME Permanent Loan shall not be assumable and shall be due and payable on sale, transfer, refinancing or rental of the home. The HOME Permanent Loan shall be made available to all eligible Borrowers purchasing a home in an aggregate amount not exceeding the lesser of 25 percent of the purchase price of the home, or the appraised value or the amount necessary to enable the purchaser to meet credit underwriting criteria based on the monthly mortgage payment (which includes the principal, interest, taxes and insurance) to income ratio, established by the financing program offered by the first mortgage lender (estimated to be 33/41%). The combined loan-to-value ratio of all loans shall not exceed 105% of the lesser of the after-construction appraised value or the purchase price of the home. Proceeds of the HOME Permanent Loan may be used to assist with down payment and closing cost expenses. It is anticipated that the average HOME Permanent Loan to the individual homebuyer will equal $20,683. SHIP Funds Lee County Board of County Commissioners has granted a total of $267,935 in SHIP funding for construction and down payment assistance to qualifying homebuyers increased from the original amount of $74,976. The average subsidy from this source will be $26,793 per homebuyer. The funds are considered as a grant by the County, and are forgiven to the homebuyer at the end of fifteen (15) years. SHIP funds in excess of 105% combined loan-to-value will be considered a grant. Homebuyer Equity: The Permanent Lender, SunTrust, has estimated that each homebuyer will contribute 3% from verifiable personal funds, however, only a minimum $500 must come from the Borrower. The remaining down payment may come from other documented sources including but not limited to: gifts, seller contributions and unsecured loans. Additional Information: HOME Construction Loan Repayment: The HOME construction loan cannot be used as a revolving line of credit. Since the Borrower will use some HOME construction loan funds to pay closing costs and infrastructure expenses in addition to vertical construction, some HOME construction funds may have to be repaid when any home that converts to permanent financing does not require the amount of HOME permanent funding expended on a to-date per unit (“running average”) basis. For example, the Borrower projects that the group of 10 homes will be completed and ready for permanent financing at a maximum 20 months after the HOME construction loan is closed. During those 20 months, the Borrower will have utilized $206,830 in HOME construction funds for an average of $20,683 /unit for the 10 unit total development.



June 6, 2003

If any of the homebuyers in the group of 10 require less than $20,683 in HOME permanent financing (i.e. homebuyers purchasing the 3 bedroom model), the difference between the amount of HOME permanent financing the homebuyer receives and $20,683 will be refunded to FHFC. This may mean that future homebuyers will not have the full amount of HOME permanent loan funds they are eligible to receive available to them. Should this happen and all funds are exhausted, these units would not be HOME units and the loan amount would be reduced. The potential amounts involved are not substantial and do not require an escrow. However, the Servicer will need to monitor funding throughout the construction period to be certain if the HOME construction loan running average is larger than the amount required for any homebuyers, that those funds are repaid to FHFC when the respective homes convert to permanent financing. Developer Experience Lee Co. Housing Development Corp is the Borrower/Developer to complete the single-family development. The Borrower/Developer, since 1991, has placed 150 families in homes, 58 of which were on scattered sites. The underwriter believes the Developer has sufficient experience to complete a single-family development of this size (10). The General Contractor also has experience in this type of development. Issues and Concerns: None Recommendation: AmeriNational Community Services, Inc. recommends approval of a $206,833 HOME Loan for the construction of Lee Co. Housing Scattered Site Dev., a 10-unit home development. This approval is specifically contingent upon confirmation that all subordinate mortgage loans will have a second mortgage position behind the HOME loan during construction and will have a third mortgage position behind the HOME loan during the permanent loan phase. This recommendation is also based on the Borrower satisfying the assumptions and recommendations detailed in the Board Summary (Section A) subject to the loan conditions outlined in the Loan Commitment Conditions (Section B) and the supporting information and schedules (section C). The reader is cautioned to refer to these sections for complete information. Prepared By: Reviewed By:

Richard Velazquez Nancy Griffin Credit Underwriter Senior Credit Underwriter



June 6, 2003

Lee Co. Housing Scattered Site Dev.

HOME HH02-009

HOME Loan Recommendation for: $206,833 Development Type: Acquisition and New Construction Set Aside: 100% at 80 % of AMI (HOME), 10 units, all seeking HOME financing Borrower & Developer: Lee County Housing Development Corp General Contractor: ONE Construction, Inc. Construction Lender: Lee County Housing Development Corp will be self-funding Site Area: 2.62 acres Density: 4 units/acre Zoning: single and two-family Average Home Sales Price: $103,064 Average Appraised Value Of a Completed Home: $91,450 Total Development Cost: $1,030,644 Average Appraised Value Of A Typical Lot: $9,300, unimproved HOME Construction Loan to Cost: 20.07% ($206,830/$1,030,644) HOME Construction $20,683 Loan Per Unit: Total HOME Units: 10 Total Average Cost per Unit: $103,064 Total Value of 10 units: $914,500



June 6, 2003

Home Sales Prices and Set-Asides MSA: Fort Myers –Cape Coral (Lee County)

Bed / Baths/Garage

AMI Set

Aside

Living Area (Sq. Ft.)

Developer Sales Price

Appraised Value

Underwriter Sale Price

2002 Sales Price Limits

Total Gross Sales

366 Lorraine Dr (3/2/1) 80% 1166 $101,417 $88,500 $101,378 $144,336 $101,378545 Lynneda Dr (3/2/1) 80% 1166 $101,417 $83,000 $100,929 $144,336 $100,9293249 Dora St (3/2/1) 80% 1166 $101,417 $83,000 $100,961 $144,336 $100,9613340 Katherine St (3/2/1) 80% 1166 $101,417 $83,000 $100,940 $144,336 $100,9402213 Harvard Ave (3/2/1) 80% 1166 $101,417 $122,000 $101,714 $144,336 $101,7141228 Forsyth Dr (4/2/1) 80% 1312 $105,416 $95,000 $104,950 $144,336 $104,9503233 Dora St (4/2/1) 80% 1312 $105,416 $90,000 $104,943 $144,336 $104,9433229 Dora St (4/2/1) 80% 1312 $105,416 $90,000 $104,943 $144,336 $104,9433223 Dora St (4/2/1) 80% 1312 $105,416 $90,000 $104,943 $144,336 $104,9433217 Dora St (4/2/1) 80% 1312 $105,416 $90,000 $104,943 $144,336 $104,943Totals $103,417 $914,500 $103,064 $1,030,644

Construction Sources of Funds

Notes to the Construction Financing Sources:

1. The Borrower will self-fund construction development. The above information shows self-fund amount of $358,912 with zero interest.

2. The SHIP financing was increased to a total of $267,935 for development financing.

3. The $86,964 consists of $73,328 for land that has been purchased and $13,636 for soft

costs relating to the purchase of land.

SourceLender Name

# of Homes Application

Applicant Revised Underwriter

Interest Rate

Equity LCHDC 10 $0 $362,432 $358,912 0.00%RLOC Suntrust 10 $642,355 $0 $0 4.25%HOME FHFC 10 $206,833 $206,833 $206,833 0.00%Def. Dev. Fee LCHDC 10 $110,000 $110,000 $110,000 0.00%SHIP Lee BOCC 10 $74,976 $267,935 $267,935 0.00%Land Lee BOCC 10 $0 $86,964 $86,964 0.00%Total $1,034,164 $1,034,164 $1,030,644



June 6, 2003

Construction Uses of Funds

Notes to the Actual Construction Costs (Hard Costs): 1. Contingency fees increased after actual sites were identified due to the possibility of

additional site clearing costs incurred with some sites having heavier vegetation. 2. The underwriter reduced the General Contractor fee to be in compliance with the 14%

maximum. A revised G/C contract is a requirement of this report.

Notes to the General Development Costs:

1. The Applicant underestimated the environmental and survey fees. The fee items were adjusted accordingly.

2. Revised Impact fees of $40,166 are for roads, parks, schools, EMS and fire.

Actual Construction Cost ApplicationApplicant Revised

Underwriter Total Cost

New Units $609,340 $602,485 $602,485Contractor’s fee (Not to Exceed 14%) $86,660 $90,160 $86,640Total Construction Contract $696,000 $692,645 $689,125Contingency $10,000 $16,374 $16,374Total $706,000 $709,019 $705,499

General Development Costs ApplicationApplicant Revised


Accounting fees $2,000 $2,000 $2,000Appraisal $5,000 $5,000 $5,000Builder’s risk insurance $2,000 $2,000 $2,000Building permit $7,000 $7,000 $7,000Closing costs-construction $4,944 $0 $0Environmental report $6,700 $7,513 $7,513FHFC application fee $100 $100 $100Impact fees $39,766 $40,166 $40,166Inspection fees $2,000 $2,000 $2,000Insurance $1,000 $1,000 $1,000Legal fees $2,500 $2,500 $2,500Market study $2,500 $2,500 $2,500Marketing and advertising $20,000 $20,000 $20,000Pre Construction Analysis $0 $0 $1,000Compaction test Fee $1,000 $1,000 $1,000Survey $13,388 $14,100 $14,100Title insurance $3,000 $3,000 $3,000Utility connection fee $27,135 $27,135 $27,135Contingency $0 $4,803 $3,803Total $140,033 $141,817 $141,817



June 6, 2003

3. A Pre Construction Analysis fee was added by the Underwriter and the Contingency lowered in the same amount.

4. The other General Development Costs are based on the applicant’s updated estimates and

appear reasonable.

Notes to the Financial Costs:

1. The Borrower is self-funding the construction development, therefore there will not be construction loan interest or origination fee.

Notes to the Other Development Costs: 1. Developer fees (11.45%) are within the underwriting guidelines and the maximum HOME rule limits of 16%.

Notes to Land Costs

1. The Borrower supplied the initial figure of $68,631 on their cost pro forma. The Borrower provided ten Warranty Deeds for land transactions. The revised land cost of $73,328 was taken from financials and settlement statements supplied by the Borrower. Appraisals received confirm the land costs are within the $94,000 appraised value of the lots.

Financial Costs ApplicationApplicant Revised


Construction loan interest $7,000 $0 $0Construction loan origination f

$2,500 $0 $0

Total $9,500 $0 $0

Other Development Costs ApplicationApplicant Revised


Developer fee $110,000 $110,000 $110,000Other $0 $0 $0

Total $110,000 $110,000 $110,000

Land Acquisition ApplicationApplicant Revised


Land $68,631 $73,328 $73,328Carrying Costs $0 $0 $0

Total $68,631 $73,328 $73,328



June 6, 2003

Notes to Total Development Costs:

1. Construction cost decreased but is offset by an increase in Contingency cost and

Contractor’s fees.

2. Financial costs decreased to zero because the Borrower will be self-funding the construction development.

3. Land costs increased slightly because the revised value was taken from the correct deed

amounts and the initial cost was only an approximate from the pro forma.

Total Development Cost ApplicationApplicant Revised


Construction $706,000 $709,019 $705,499General $140,033 $141,817 $141,817Financial $9,500 $0 $0Other Development Cost $110,000 $110,000 $110,000Land Cost $68,631 $73,328 $73,328Total $1,034,164 $1,034,164 $1,030,644



June 6, 2003

Permanent Financing:

Notes to permanent Financing:

1. Suntrust has committed to provide loans to eligible first-time homebuyers. The Applicant/Borrower, in addition to conventional FHA and VA financing sources, will utilize the SHIP/HOME loans and 30 year fixed rate loans which allow for higher LTV ratios (up to 97%) with monthly housing expense (PITI) of 33/41%.

2. HOME Permanent Loans are second mortgage loans that bear a 0% interest rate, and are

non-amortizing with principal deferment. The HOME Permanent Loan shall not be assumable and shall be due and payable upon sale, transfer or rental of the home.

The HOME Permanent Loan shall be made available in an aggregate amount not exceeding the lesser of 25 percent of the purchase price or appraised value of the home or the amount necessary to enable the purchaser to meet credit underwriting criteria, for eligible Homebuyers purchasing a home based on the monthly mortgage payment, which includes the principal, interest, taxes and insurance, to income underwriting ratio established by the financing program offered by the first mortgage lender. The combined loan-to-value ratio of all loans in the transaction shall not exceed 105% of the lesser of the after-construction appraised value or the purchase price of the home. Proceeds of the HOME Permanent Loan may be used only to assist with down payment and closing cost expenses. It is anticipated that the average permanent HOME Loan amount to the individual homebuyer will equal $20,683.

3. Lee County has provided the applicant with revised SHIP Funds in the amount of $267,935

up from $74,976. The funds can be allocated to needy homebuyers for down payment and closing cost assistance. The average amount per home will be $26,793. The funds will be granted at 0% interest and forgiven at the end of fifteen (15) years. SHIP funds in excess of 105 % loan-to-value will be considered given as a grant.

Source Lender Name Total Loan

Amount Average Per Home

Homeowner 1st Mortgage Suntrust $ 575,879 $ 57,588

HOME 2nd Mtg FHFC $ 206,830 $ 20,683

SHIP 3rd Mtg Lee BOCC $ 131,505 $ 13,151

SHIP grant Lee BOCC $ 136,430 $ 13,643 Homebuyer Equity N/A $ 5,000 $ 500

Closing Costs $ (25,000)Total $ 1,030,644 $ 103,064



June 6, 2003

4. Each homebuyer will contribute approximately $500 in equity for the downpayment. Home Affordability Analysis:

Of the 10 homes in the development, five will be 3bd/2bth and five will be 4bd/2bth. The average sales price for the 3/2/1 is $101,184 and the average sales price for the 4/2/1 is $104,944. The average appraised value for the 3/2/1 units is $91,900 and the average appraised value for the 4/2/1 units is $92,000.

The above analysis assumes financing provided by the SunTrust Bank special lending program. The analysis uses approximately the current program rate of 7.00%. If interest rates increase significantly in the coming months, the Developer/Applicant will commit additional Developer fees to offset the rate increases. A family of one can afford the 3/2/1 home as well as the 4/2/1 home. A family of four can also afford any of the units available.

AVG of 5, 3/2/1 Units 3/2/1Average Sales Price 101,184.00$ Average Value 91,900.00$ Closing Costs 2,500.00$ Less Down Payment 500.00$ Less HOME 20,683.00$ Less SHIP Grant 15,547.50$ Less SHIP Loan 14,054.60$ First Mortgage 52,898.90$

Principal and Interest @ 7.00% $351.94Tax and Insurance 157.68$ PAYMENT $509.61

Affordability (PMT / 30% X 12) 20,384.60$ Percentage of AMI (family of 4) 48.88%HOME Loan % of Sales Price 22.51%Combined LTV 95.36%

AVG of 5, 4/2/1 Units 4/2/1Average Sales Price 104,944.40$ Average Value 91,000.00$ Closing Costs 2,500.00$ Less Down Payment 500.00$ Less HOME Loan 20,683.00$ Less SHIP Grant 13,150.00$ Less SHIP Loan 13,944.40$ First Mortgage 59,167.00$

Principal and Interest @ 7.00% $393.64Tax and Insurance 158.90$ PAYMENT $552.54

Affordability (PMT / 30% X 12) 22,101.74$ Percentage of AMI (family of 4) 53.00%HOME Loan % of Sales Price 22.73%Combined LTV 103.07%

Homeowneship Loan Program Income LimitsPersons 1 2 3 4 580% AMI 29,200$ 33,350$ 37,500$ 41,700$ 45,000$

ACS

_________________________________________________________________________________

June 6, 2003

Section B

Loan Commitment Conditions


______________________________________________________________________________ LEE CO. HOUSING SCATTERED SITE DEV. PAGE B-1

June 6, 2003

HOME Investment Partnership Program Recommendation AmeriNational Community Services, Inc. (“AmeriNational”), recommends a Construction Loan funded through the Florida Housing Finance Corporation’s (FHFC” or “Florida Housing”) Home Investment Partnerships (“HOME”) Program under the conditions detailed in this section. Loan Amount The HOME Construction Loan amount recommended by AmeriNational is $206,833 . The loan amount recommended by AmeriNational is determined as follows:

I. The maximum loan amount is limited to the lesser of: a. 33% of development cost. The recommended HOME loan is $0 of the

development cost. b. The amount provided in the Notice of Funds Availability. c. The amount necessary to make the development feasible, which is $206,833

based on the information provided to date. d. Applicant request, which is$206,833



June 6, 2003

HOME Construction Loan General Conditions Purpose: To provide construction financing for the Lee County Scattered Site Development (10 units on 2. 62 acres) located in Fort Myers, Florida. Security / Collateral:

1. A first mortgage lien on the land and improvements 2. A security interest in all personality of the development

3. Additional collateral as required by Florida Housing.

Typical Documents:

1. Note, Mortgage and Land Use Restriction Agreement 2. Assignment of profits

3. Assignment of construction contract, service contracts, etc.

4. Loan Agreement

5. Construction Completion Guarantee

6. Environmental indemnity

7. Other documents as may be required by Florida Housing and By Rule Chapter 67-50,

F.A.C. Term: The construction period shall be for a period of three (3) years beginning on the closing date of the Loan. The term of the HOME Construction Loan shall be for a period of five (5) years. Rate: This loan has an interest rate of zero percent (0%) because the Applicant is a Non-Profit Disbursement Schedule: The HOME Construction Loan will be disbursed to the Applicant during the construction phase in an amount per draw which does not exceed the ratio of the HOME loan to the total development cost (20.07%), with any exceptions requiring approval by Florida Housing and Florida Housing’s credit underwriter.



June 6, 2003

Retainage: Five percent (5%) or $10,341.65 of the HOME Construction Loan will be held as retainage. Release of funds held as retainage will occur only after the Applicant provides satisfactory final inspection certificates, certificate of occupancy, a final, as-built survey, updated fire, lightning and extended insurance policies, title insurance policy and other documents as required by the loan documents or as may reasonably be requested by the Servicer or Florida Housing based upon the employment of standard loan servicing criteria. Repayment Schedule: The HOME Construction Loan is to be fully repaid at maturity (five years) or prorated at time of the sale of each home. Principal must be repaid on a pro rata basis at the sale of each completed home, with the amount of the principal payment required at the sale of each home to be approved by the FHFC’s Servicer. Escrows: Other than the development fee escrow referenced below, none are required unless the Borrower fails to timely pay all property taxes or maintain required insurance in force during the term of the Home Construction Loan. If the Borrower fails to timely pay all property taxes or maintain the required insurance coverage, then FHFC can, at its discretion, request that a property tax and insurance escrow be established with and maintained by the Servicer for the term of the HOME Construction Loan. Replacement Reserves: Not applicable. Prepayment Penalty: Prepayments are allowed as described in the HOME Construction Loan Program Rule, Chapter 67-50, F.A.C. Assumption: The HOME Construction Loan is not assumable.



June 6, 2003

HOME Permanent Loan General Conditions Purpose: To provide permanent financing for the Lee County Scattered Site Development (10 homes on 2.62 acres) located in Fort Myers, Lee County Florida. Each Permanent Loan is limited to the lesser of twenty-five (25%) of the purchase price or appraised value of the home or the amount necessary to enable the purchaser to meet the first lender’s credit underwriting criteria. Proceeds of a Permanent Loan can be utilized only to assist with down payment and closing cost expenses, and/or reduce the principal amount of the first mortgage. Permanent Loan: Principal payments on the HOME Permanent Loan shall be deferred until the first to occur of the following events: Homebuyer sells, transfers or disposes of the property or home whether voluntarily or involuntarily, the Homebuyer fails to or ceases to occupy the home as a principal residence, or if the Homebuyer is married, the survivor of the Homebuyer or Homebuyer’s spouse dies. Permanent Loan Interest Rate: The interest rate for these loans is zero percent (0%) per annum. Permanent Loan Lien Position: The Permanent Loan will be secured by a second mortgage lien on the land and improvements. Permanent Loan Closing Costs: The Servicer will conduct a Homebuyer Qualifying Analysis prior to the sale of each home and the closing of each HOME Permanent Loan. Repayment: Same as permanent loan above. Prepayment Penalty: Prepayment is permitted without penalty. Loan Assumptions: The Permanent Loan is not assumable. Permanent Loan Income Eligibility Requirements: The loans will be made to families who utilize the home as their principal residence and whose total annual family income at time of closing does not exceed 80% of the local median income adjusted for family size. Permanent Loan Processing Procedures:

1. Loan applications are reviewed and processed by the lender originating the first mortgage.



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2. All Homebuyer applications and loans will be processed by the lenders in accordance with each lender’s standard underwriting criteria and any criteria in regard to second mortgages, which are imposed by FHA, VA, GNMA, Fannie Mae, Freddie Mac or Rural Development originators and Servicers.

3. Florida Housing’s Servicer shall conduct a Homebuyer Qualifying Analysis prior to the

sale of each home and the closing of each HOME Permanent Loan.



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HOME Construction Loan Conditions This recommendation is contingent upon review and approval of the following items by AmeriNational and Florida Housing, at least 30 days before closing. Failure to receive approval of these items within this time frame may result in postponement of the closing date.

1. Receipt and satisfactory review of a Pre-Construction Analysis. 2. Receipt and review of a construction contract (including the General Conditions and all

exhibits and addenda) between Lee County Housing Development Corp and ONE Construction, Inc. for the construction of the development. Specifically:

a. The contract must incorporate the final plans and specifications. b. The contract must require compliance with all recommendations of the soils

engineer regarding foundation and paving design, as well as supervision of construction, if applicable.

c. The contract must provide for General Contractor’s fees (including general requirements, overhead and profit) within the underwriting guideline of 14% of the hard costs of construction.

2. Building permits and any other necessary approvals and or letter from the local

permitting and approval authority that the above-referenced approvals and permits will be issued upon receipt of applicable fees. If a letter is provided, copies of all permits for each home will be required as a condition to the first draw for that home.

3. Letter from Lee County Ship Administrator acknowledging that SHIP funds may be used

in the initial months to pay closing costs and infrastructure expenses. 4. Final sources and uses of funds, itemized by source and line item, in a format approved

by AmeriNational. A detailed calculation of the construction interest based on the final draw schedule (see below), documentation of the closing costs, and draft loan closing statement must also be provided. The sources and uses of funds schedule will be attached to the Loan Agreement as the approved development budget.

5. Final draw schedule to be approved prior to closing, itemized by line item, and showing

sources of funds for monthly draws. HOME loan funds must be disbursed pro-rata with other construction loan funds and not exceed 20% of any single draw amount.

6. Escrow agreement, satisfactory to Servicer, reflecting the fact that during construction,

the Borrower/Developer will Escrow $86,964 of its development fees until the development is complete. These funds will be used as down payment assistance to help very low income families in qualifying for first mortgage financing.

7. General liability, flood (if applicable), and builders risk insurance reflecting Florida

Housing as Loss Payee/Mortgagee.



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This recommendation is contingent upon review and approval of the following items by Florida Housing and its legal counsel at least two weeks before closing. Failure to receive approval of these items within this timeframe may result in postponement of the closing date.

1. General liability, flood (if applicable), and builder’s risk insurance reflecting Florida Housing as Loss Payee/Mortgagee.

2. Documentation of the legal formation and current authority to transact business in

Florida for the Borrower.

3. Signed and sealed survey certified to Florida Housing, meeting all specifications of Florida Housing.

4. Title insurance binder or commitment for title insurance.

5. Florida Housing and its legal counsel should review and approve closing documents and

Florida Housing should be satisfied in its sole discretion that all legal and program requirements of the HOME loan have been satisfied.

This recommendation is also contingent upon satisfaction of the following additional conditions on the closing date.

1. The Florida Housing Servicer will utilize a construction inspector and receipt of construction inspections prior to each draw is required before funding the draw request.

2. If at any time there are not sufficient funds to complete the development, the Borrower

will be required to expend additional equity on development costs or to deposit additional equity with Florida Housing which is sufficient (in Florida Housing’s judgment) to complete the development before additional loan funds are disbursed.

3. Construction Completion and HOME Construction Loan Repayment Guarantee from

Lee County Housing Development Corp.

4. Environmental Indemnity from Lee County Housing Development Corp.

5. A Mortgagee Title Insurance policy in the amount of the HOME loan to be issued at closing. This policy is to contain no exceptions unacceptable to Florida Housing or its legal counsel.

6. Any other reasonable requirements of AmeriNational, Florida Housing or Florida

Housing’s legal counsel.

7. Commitment for flood insurance if applicable. AmeriNational recommends that the HOME Construction Loan Agreement require the following items to be provided to Florida Housing’s Servicer (in addition to normal draw requirements) prior to disbursement of funds for each home or group of homes:



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1. Executed, valid agreement between the Borrower and the Homebuyer for the purchase

of the completed home. 2. Evidence that the Homebuyer has received first mortgage loan approval from a

participating permanent lender. This documentation must show the loan amount approved.

3. Evidence that the Homebuyer is income-eligible at 80% or below of the area median

income..

4. Evidence that the Homebuyer has completed homebuyer counseling.

5. Receipt of a satisfactory construction inspection prior to each draw is required before funding the draw request.

6. Prior to requesting a draw of HOME funds to pay development closing costs and

infrastructure expenses, the Applicant should produce evidence satisfactory to the Servicer that the group of 10 homes have been pre-sold.

ACS

________________________________________________________________________ [Development Name] Draft dated: June 9, 2003 26