2011 ANNUAL CONFERENCE

NEW DEVELOPMENTS IN MULTIFAMILY FINANCE STRUCTURING MULTIFAMILY BOND ISSUES IN THE CURRENT MARKET

ANSEL CAINE VICE PRESIDENT MAY 20, 2011

RECENT HFA BOND STRUCTURES

FHA-RISK SHARING FHA/GNMA FREDDIE MAC CREDIT ENHANCEMENT DIRECT LENDING

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PARITY FHA RISK-SHARING INDENTURE

GOALS SIZE BOND TYPE BOND STRUCTURE SECURITY Refinance HFA-Owned Property with Minimal Debt Provide Fund for Rehabilitation of 134 Affordable Units in Issuer-Owned and Operated Property Provide Funds for Other Affordable Housing Endeavors $12,375,000 Publicly Offered, Non-AMT, Fixed Rate, Governmental Bonds FHA Risk-Sharing Credit Enhanced Mortgage Loan Level Debt, 18-Month Construction Period, 30-Year Permanent Financing Aaa Rated Parity Bond Indenture FHA Risk Sharing Insurance, GNMA Securities and GSE Credit Enhancement $292 Million of Outstanding Parity Bonds Secured 3

PARITY FHA RISK-SHARING INDENTURE

GOALS SIZE BOND TYPE BOND STRUCTURE SECURITY Refund Existing Tax Exempt Bonds Under Parity Indenture Reduce Interest Rate Reduction to Borrowers Preserve Affordable Housing Increased Income to HFA $77,705,000 Publicly Offered, Non-AMT, Fixed Rate, Private Activity Bonds Economic Refunding of AMT to Non-AMT Refunded Five Existing Bond Series Financing 23 Mortgage Loans with FHA Risk-Sharing Structured to Match Remaining Amortization of 30 and 40-Year Components Aaa Rated Parity Bond Indenture FHA-Risk Sharing Insurance $155 Million of Outstanding Parity Bonds Secured 4

FHA/GNMA WITH NIBP

GOALS BOND TYPE BOND STRUCTURE SECURITY OTHER SOURCES Provide Funds for New Construction of 195-Unit Multifamily Development (113 Market Units and 82 60% AMI Units) NIBP Rollout, No Market Component, Non-AMT, Fixed Rate, Private Activity Bonds Standard CLC/PLC Structure Construction-Phase Letter of Credit Level Debt, 2-Year Construction Phase, 39-Year Permanent Financing Aaa Rated GNMA Securities Tax Credit Equity 5

FREDDIE MAC CREDIT EHANCEMENT WITH NIBP

GOALS SIZE BOND TYPE BOND STRUCTURE Provide Funds for 96 Affordable Housing Units (50% AMI or Lower) in Downtown Suburban Area $12,900,000 58% NIBP Rollout, 42% Market Component, Non-AMT, Fixed Rate, Private Activity Bonds Freddie Mac Guarantee Construction-Phase Letter of Credit SECURITY OTHER SOURCES Aaa Rated Freddie Mac Credit Enhancement Subordinate HFA Bonds Sold via Private Placement Subordinate Loan from Municipality Tax Credit Equity 6

BANK PRIVATE PLACEMENTS

GOAL SIZE BOND TYPE Provide Funds for 209-Unit Multifamily Housing Development in Downtown Urban Area $23,488,000 Privately Placed, Private Activity Bonds BOND STRUCTURE 6.0% Loan with Tax Credit Financed Rate Reduction SECURITY OTHER SOURCES Development (Not Rated) Subordinate Loan from Municipality Tax Credit Equity 7

Wrap Up

Landscape of multifamily bond structures has changed somewhat in recent years Parity indentures can provide HFA with additional flexibility Financing structure will depend on the specific goals of the financing

Ansel Caine, Caine Mitter & Associates Incorporated Phone: 212-686-8820 Email: [email protected]

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