PowerPoint Presentation

Judy Vandyke, CEO/Managing Partner, BGC(334) 321-0529Judy@thebennettgrp.netHolly Knight, Vice President of Development, BGC202-699-1998holly@thebennettgrp.net

Goal of RADIn order to preserve the public housing stock convert its assistance to the project-based Section 8 platform, which will:Stabilize fundingCreate access to private capitalStreamline HUD programsEnhance housing options for residents

In order to convert the entire public housing stock, HUD continues to ask Congress for authority and for funds.Percentage of Current PH Units by HUD Region that have Applied for RAD3

6%7%16%22%15%21%3%7%18%21%Note: This data reflects the percentage of PH units in each HUD region that have applied for RAD; note that units are considered public housing until the RAD closing is complete.Whole Portfolio Conversions76% of the PHAs with CHAP awards have proposed to convert their entire stock, including52 small PHA (1,250 units)RAD Helping PHAs Address ChallengesIndicated PHA ObjectivesComplete repairs range of moderate repairs, substantial rehab and New Construction~ 20% of projects planning Demolition and New Construction (on site or off site)Average repair hard costs of ~ $45,000 per unit ($25,000 per unit excluding new construction)Place mixed-finance properties on solid financial footing for long term (~ 15% of projects)Thin densities/mix-incomes via transfer of assistanceStreamline programs5Reviewing Applications on the WaitlistSecretary Donovan letter 2/20 confirms HUD will review the ~ 685 applications above the 60,000 unit cap

Instruction from Secretary:Review applications and prepare conditional approvals.

When cap is lifted, HUD will issue CHAPs to all approved applications and process in order of the waiting list.

HUD will use the RAD Notice for these projects but will use FY14 funding levels to calculate the rents.

RAD UpdateHUD has asked for RAD cap to be lifted in 2015 budget

RAD Application byRAD Application update

Application Overall Sources of Funding

RAD Application tax credits

Operating Subsidy Funding89.20% 82% 94.968% 100% 103% 88.42% Capital Fund Capital Funding Trends

Why RADBuilds on a more stable funding platformLock in fundingBetter than Capital Fund Finance, Leveraged Op Sub, or EPCLeverage private capital to address physical needs and preserve your unitsLeverage 4% LIHTC get 30% project equityLeverage 9% LIHTC get 60+% project equityLeverage developer fees, seller take back finance, ground leaseApply for grants HOME, Federal Home Loan BankProvides a great deal of regulatory and reporting relief Saves in reporting to HUD, policies, and oversight more with board and PHAWhy RADGives real estate opportunitiesCan move HAP contract as neededCan move out of flood zones/hazard zones/undesirable areasCan use non federal funds to purchase properties or landBenefits of partnering for expiring LIHTC, Home projects, HUD Multifamily developmentsBest and highest use of assetsFeasibility, Marketability, and Sustainability

Show the Money The RAD options: Modest rehab with no debt Modest rehab with debt only Moderate rehab with debt and 4% LIHTCs Major rehab or replacement with debt and 9% LIHTCs These are funding sources that are not convenientlyavailable to small PHAs A conversion of all LIPH units eliminates the HUDrequirements for: Procurement Annual and Five Year Plans PHAS REAC (ifPBV) You Get to Keep the Money no offsets, developer fees, seller take back financing, cash flow optionsPH Development Resources

Note: Not listed PHA PBV at FMR, PHA Cost Center Funds, Admin FeesWhat can RAD do now?15-20 year, renewable contracts with use agreementPredictable initial contract rent setting; annual operating cost adjustments for inflation (OCAF)Established replacement and operating reserves; standard industry underwriting requirements RAD HAP funding begins at construction closingNo limitations on use of project cash flowPHA ownership/control similar to LIHTC practicesLong-term affordability ensuredChangeTake the first step in faith. You dont have to see the whole staircase, just take the first step.-Martin Luther King, Jr.