This workshop will explore how organizations can utilize various federal, state, and private financing sources combined with innovative ideas to create affordable rural rental housing for veterans, seniors, and families. Participants will learn to analyze project cash flow, maximize private investment, leverage tax credits, and bridge financing gaps.

1. 11/20/2012
Continuum of Needs and Resources Chart
No Income 50% (Area Median) 80% Median 115%
Housing Trust Fund Program
<Federal, State & Local Funds>
Local Government & Public Housing Authorities
<Federal, State & Local Funds>
Housing Finance Commission
<Using No State Funds>
Private Sector
Federal Programs Mortgage Interest Deduction &
Subsidy
Insurance
WSHFC
Housing Credits and Tax exempt
Bonds – It’s Simple!
WSHFC
1

2. 11/20/2012
How are the Credits Turned Into
Equity for the Project?
Developer = 1% Owner
Equity $$ for Project
WSHFC Tax Credits
Tax Credit Partnership
Investor = 99% Owner
Credit to Equity
Investor
WSHFC $14,000,000 TAX SAVINGS
TAX CREDITS
10 years
Housing Investor
$13,580,000 pays $0.97 / dollar
EQUITY
of tax credit
Credit to Equity
Investor
WSHFC $14,000,000 TAX SAVINGS
TAX CREDITS
10 years
Housing Investor
$9,800,000 pays $0.70 / dollar
EQUITY
of tax credit
2

3. 11/20/2012
Best Process:
Objective vs. Subjective?
•Policy Objectives:
– maximize public benefit
– appealing to investor
– geographic dispersion
– project readiness
– public funder coordination
•Allocation Approach
– geographic credit pools
– public benefit point criteria
– caps and limits WSHFC
Public Benefit Point Criteria
WSHFC
3

4. 11/20/2012
USDA RD 538 Loan
6 Site Portfolio
Bond Tax Credit Financing
Rehab 6 Site Location
LIHTC BUDGET
Costs Per Unit
Acquisition Costs $ 7,483,656 $ 38,576
Construction $ 6,008,074 $ 30,969
Soft Costs $ 3,388,296 $ 17,465
Other Development $ 1,812,086 $ 9,341
Total Costs $ 18,692,112 $ 96,351
Total Project Costs $ 18,692,112
Total Eligible Basis‐Acquisition $ 8,061,656
Total Eligible Basis‐Rehab $ 8,358,746
Reasonable Expected Basis (1st Yr.) $ 17,000,402
WSHFC
USDA RD 538 Loan cont.
Bond Tax Credit Financing
Rehab 6 Site Location
Residential Sources Uses
USDA 538 Loan/Bond $9,000,000 Acquisition $ 7,483,656
USDA Loan Assumptions $3,592,659 Construction $ 6,008,074
Deferred Developer Fees $1,796,927 Soft/Financing Costs $ 3,388,296
Tax Credit Equity $4,302,522 Replacement Reserves $1,812,082
. Total Sources $18,692,108 $18,692,108
WSHFC
Credit to Equity
4

5. 11/20/2012
Chelsea Apartments - Oak Harbor, WA
Harmony House – Shelton, WA
Wellington Apts. – Snohomish, WA
5

6. 11/20/2012
USDA RD 515 Loan
3 Site Portfolio
Competitive Tax Credit Financing
Rehab 3 Site Location
Residential Sources Residential Uses
USDA 515 Loan $2,347,969 Acquisition $3,323,022
GP Contributions $205,780 Construction $5,201,163
Sponsor Take Back Note $892,031 Soft/Financing Costs $3,388,102
Tax Credit Equity $8,892,507 Reserves $426,000
Total Sources $12,338,287 Total Uses $12,338,287
USDA RD 515 Loan cont.
Competitive Tax Credit Financing
Rehab 3 Site Location
Residential Sources Residential Uses
USDA 515 Loan $2,347,969 Acquisition $3,323,022
GP Contributions $205,780 Construction $5,201,163
Sponsor Take Back Note $892,031 Soft/Financing Costs $3,388,102
Tax Credit Equity $8,892,507 Reserves $426,000
Total Sources $12,338,287 Total Uses $12,338,287
WSHFC
Credit to Equity
6

7. 11/20/2012
Mercy Housing Northwest
Allegre Villa, Sandstone & Cambridge
Apts. RD Rehab
RD Transfer Application – lots of paper
Mercy Housing Northwest
• Acquired 30 property, 926 unit RD portfolio 8 yrs
ago from private developer to preserve housing
• Strategy to rehab properties with emphasis on
health and safety, energy conservation,
accessibility, and extending useful life to enhance
the overall sustainability and marketability
• Renovated 7 properties with HUD Green Retrofit
• Phase 2 - 84 senior units in 4 buildings in 3 rural
towns
Mercy Housing Northwest
Sandstone Apartments, Tenino WA
Constructed in 1978
Pre Rehab
7

8. 11/20/2012
Mercy Housing
Northwest
Moving Day – Residents are temporarily
relocated
Mercy Housing Northwest
Sandstone Apartments in progress - rigid insulation,
new windows and new roof & gutters installed
Mercy Housing Northwest
Pre-rehab non- Rehab in progress to
conforming stairs bring to code
8

9. 11/20/2012
Mercy Housing Northwest
Typical pre-rehab kitchen
Mercy Housing Northwest
Asbestos abatement underway – floors,
ceilings and wall texture throughout
Mercy Housing Northwest
Kitchen - asbestos abatement
completed
9

10. 11/20/2012
Mercy Housing Northwest
Accessibility modifications to sidewalks, ramps
and driveway
Mercy Housing Northwest
Cementitious board siding installation
underway
Competitive Housing Credit Timeline
Housing Tax Credit
Initial developer inquiry
Application submitted
Day 1
Staff reviews and underwriting
Day 1-90
10

11. 11/20/2012
Tax Exempt Bond Timeline
Initial developer inquiry
Application submitted
(Day 1)
Final commitment from
lender or credit
enhancer Day (55)
11