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Florida Housing Finance Corporation

Credit Underwriting Report

Lakeside Pointe Apartments (FKA Harris Cove)

2005-073S

Section A: Report Summary

Section B: SAIL Program Special and General Conditions

Section C: Supporting Information and Schedules

Prepared by

First Housing Development Corporation of Florida

Final Report

February 16, 2006

SAIL PROGRAM - CREDIT UNDERWRITING REPORT FHDC

LAKESIDE POINTE APARTMENTS i

February 16, 2006

Lakeside Pointe Apartments

TABLE OF CONTENTS

Page

Section A

Report Summary

Recommendations A1-A6

Overview A7-A11 Uses of Funds A12-A15 Operating Pro Forma A16-A18

Section B Special and General Conditions B1-B5

Section C

Supporting Information and Schedules

Additional Development & Third Party Information C1-C3 Borrower Information C4-C8 Guarantor Information C9 Syndicator Information C10 General Contractor Information C11-C13 Property Management Information C14

Exhibits

15 Year Pro Forma 1 Description of Features & Amenity Characteristics 2. 1-4 Completion and Issues Check list 3. 1-2


February 16, 2006

Section A

Report Summary


LAKESIDE POINTE APARTMENTS PAGE A-1

February 16, 2006

Recommendation First Housing recommends a SAIL Program loan in the amount of $3,000,000 for the construction of Lakeside Pointe Apartments.

DEVELOPMENT & SET-ASIDES Location 1403 Old Harbor Boulevard, Leesburg, Lake County,

Florida, 34748.

Number of Units/Unit Mix Bed-

rooms BathsNo. of Units

Ave. Unit Size (SF)

Median Income %

1 1 16 675 60%2 2 48 923 60%3 2 32 1,107 60%4 3 32 1,364 60%

Totals 128 134,176 Demographic Commitment Set Asides Set Aside Term

Family – Development will serve the general population 100% of residential units will be rented to tenants earning 60% or less of the AMI 50 years

County Size Medium Development Category New Construction Development Type Garden Apartments Occupancy Rate 86% Complete Parking 257 spaces including 13 handicap parking spaces, which

is equal to 2 spaces per unit, which satisfies current zoning requirements and is in compliance with the minimum requirement of 2 spaces per unit in Application.

Improvements A proposed garden style apartment complex consisting of 10 two-story residential structures and a single story clubhouse/leasing center. Construction is wood frame exterior walls with slab on grade foundations.

Site Acre 11.69 acres per survey by Allen & Company dated April 20, 2005.

Density 10.95 units per buildable acre. Zoning C-3, Residential, Multi-Family, 18 units per acre Flood Zone Designation Flood Zone “X” determined to be outside the 500-year

flood plain (based on Survey dated 04/20/05). Flood insurance is not required.

DEVELOPMENT TEAM Applicant/Borrower Harris Cove Partners, Ltd. General Partner CED Capital Holdings 2004 P, L.L.C. Limited Partner/Syndicator John Hancock Guarantors Harris Cove Partners, Ltd. as the applicant and CED

Capital Holdings 2004 P, L.L.C. as the General Partner. Furthermore, the sole member of the general partner is CED Capital Holdings XVII, Ltd, which is owned by CED Capital Holdings XVII, Inc. and Alan H. Ginsburg as the



February 16, 2006

major Limited Partner. Also note that since these entities are newly formed, CED Capital Holdings, XVI, Ltd., as an affiliate of the sole member, will offer the appropriate guarantees.

Developer Sandspur Housing Partners, Ltd. General Contractor ASM Construction, Ltd. Management Company Concord Management, Ltd. 1st Mortgage Lender Orange County HFA Credit Enhancer on 1st Mortgage – Const.

Bank of America

Credit Enhancer on 1st Mortgage – Perm.

Fannie Mae (Arbor)

FINANCING INFORMATION FHFC Programs SAIL Total 1st Mtg. Loan Amount $7,585,000 “All in” Underwritten Interest Rate 6.615% Term/Amortization 33 / 30 2nd Loan Amount $3,000,000 Underwritten Interest Rate 3.330% Term/Amortization 33.25 / NA Favorable Rent-Restricted Stabilized Value

$9,725,000

Market Rent Value $11,170,000 Restricted Loan To Value – 1st , 2nd , and 3rd Loans Combined

109%

Market Loan To Value - 1st , 2nd , and 3rd Loans Combined

95%

Projected Net Operating Income $696,969 Debt Service Coverage – 1st Loan 1.23 Debt Service Coverage - All debt 1.05 FHFC SAIL Loan to Cost 18.80% FHFC Assistance Per Unit $23,438 Syndication Price $0.876



February 16, 2006

Construction/Permanent Sources

Source Lender Construction PermanentPermanent Loan/Unit

First MortgageOrange

County HFA $7,585,000 $7,585,000 $59,258 SAIL Loan 2004 and 2005 Applications FHFC $3,000,000 $3,000,000 $23,438

Bridge LoanBank of America $2,150,000 $0 $0

Housing Credit Equity/ Bridge Loan JHRA $1,680,422 $4,801,204 $37,509 Deferred Developer Fee Sandspur $1,539,825 $569,043 $4,446 Total $15,955,247 $15,955,247 $124,650



February 16, 2006

CHANGES FROM THE APPLICATION

COMPARISON CRITERIA YES NO

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

X

Are all funding sources the same as shown in the Application? 1

Are all local government recommendations/contributions still in place at the level described in the Application?

X

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

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

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

X

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

Has the Development been evaluated for feasibility using the total length of set-aside committed to in the Application?

X

Have the Development costs remained equal to or less than those listed in the Application?

2

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

If the Development has committed to serve a special target group (e.g. elderly, large family, etc.), do the development and operating plans contain specific provisions for implementation?

X

HOME ONLY: If points were given for match funds, is the match percentage the same as or greater than that indicated in the Application?

N/A

HC ONLY: Is the rate of syndication the same as or greater than that shown in the Application?

N/A

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. Syndicator changed from AmSouth to John Hancock Realty Management, Inc. This

change is actually beneficial to this development, since the new agreement has a higher syndication price of $0.876 instead of $0.85.

2. Total Development Cost estimated by First Housing is 14.4% higher than the

Applicant’s Total Cost, mainly due to higher construction costs.



February 16, 2006

Does the Development Team have any FHFC Financed Developments on the Past Due/Non-Compliance Report?

According to the FHFC February 3, 2006, Compliance Report, CED Construction, Inc. and Allan Ginsburg have the following non-compliance item(s):

None

The Past Due report dated January 10, 2006 indicates that CED Construction, Inc. and Allan Ginsburg have the following past due item(s):

Buchanan Bay: Past Due in the amount of $480.00 for Extraordinary Services due 12/21/05.

Castle Woods: SAIL - Audited financials for 2004 contain a "going concern" statement.

Raceway Pointe DBA, Windy Pines: Past Due in the amount of $160.00 for Extraordinary Services due 12/21/05.

Closing of the loan is conditional upon verification that any outstanding past due, and/or non-compliance items noted, have been satisfied at the time of closing. Strengths: 1. Reinhold P. Wolff Economic Research, Inc. prepared a Market Feasibility Analysis on

December 6, 2004. The study indicated that the site is well suited for multi-family development. A survey of apartments, done in April 2004, had revealed vacancy rate of 3.4% in Lake County, which indicates an undersupply of existing units. The population of the referred County has grown at an increasing pace since 1980. The population is expected to continue to grow at a high rate over 2004-2010 forecast period.

2. Based on review of the information provided, the Applicant, General Partnership and

principals appear to possess the financial resources necessary to develop the proposed property.

Other Considerations: None. Mitigating Factors: None. Waiver Requests/Special Conditions: None. Additional Information:

1. Based on First Housing’s Construction Report, on January 2005, this project was 86%

complete. 2. According to First Housing’s Proforma, DSC including all loans is projected to be at 1.05.

However, based on Florida Housing’s 2005 Rule 67-048, if the Applicant defers at least 35% of their developer fee for at least 6 months following construction completion, the minimum debt service coverage shall be 1.00 for SAIL loan, including all superior



February 16, 2006

mortgages. Based on First Housing’s analysis, in order to complete construction the Developer must defer at least 67% of their fee.

Recommendation: 1. First Housing recommends that an additional SAIL Program loan allocation of be

awarded to Lakeside Pointe Apartments for the construction of this development.

These recommendations are based upon the assumptions detailed in the Report Summary (Section A), and Supporting Information and Schedules (Section C). In addition, these recommendations are subject to the SAIL Program Conditions (Section B). This recommendation is only valid for six months from the date of the report. The reader is cautioned to refer to these sections for complete information.

Prepared by:



February 16, 2006

Overview Construction Financing Sources:

Source Lender ApplicationRevised

Applicant UnderwriterInterest

Rate

Max Term Mos.

Annual Debt

Service


County HFA $7,600,000 $7,600,000 $7,585,000 5.715% 36 $433,503SAIL Loan 2004 and 2005 Applications FHFC $3,000,000 $3,000,000 $3,000,000 3.330% 36 $99,902

Bridge LoanBank of America $0 $0 $2,150,000 6.769% 18 $145,542

Housing Credit Equity/ Bridge Loan JHRA $4,168,274 $4,168,274 $1,680,422 N/A N/A N/ADeferred Developer Fee Sandspur $2,005,194 $2,005,194 $1,539,825 N/A N/A N/ATotal $16,773,468 $16,773,468 $15,955,247 $678,946 Proposed First Mortgage Loan Structure: The Underwriter reviewed a Financing Agreement, dated February 1, 2005, among Orange County Housing Finance Authority as Issuer, The Bank of New York Trust Company, N.A. as Trustee, and Harris Cove Partners, Ltd. Based on this agreement, a total of $7,600,000 in tax-exempt bonds was issued with a maturity date of May 15, 2038, for the construction and permanent financing of the subject development. However, in order to meet SAIL Program loan DSC requirements, First Housing recommended on its Credit Underwriting Report, dated February 17, 2005, a reduction in this loan of approximately $15,000, resulting in an adjusted first mortgage loan amount of $7,585,000. This allocation is credit enhanced by Bank of America during the construction period, and during the permanent period via a Forward Commitment from the Federal National Mortgage Association (Fannie Mae) with Arbor Commercial Mortgage, LLC (“Arbor”) as the proposed Fannie Mae DUS Lender. Arbor is providing a floating rate structure for the bonds. This credit enhancement allows the bonds to achieve a “AAA” rating. During the construction and lease-up period, there is an interim credit enhancement that is proposed to be provided by Bank of America (the “Construction Lender”), issued through a mortgage-secured, irrevocable, transferable, stand-by Letter of Credit (the “LOC”). The term of this LOC is for 24 months with an annual fee of 1.25%, payable monthly, based upon the outstanding Letter of Credit Amount. For underwriting purposes, the base rate used was 3.010%, based on January 18, 2006 BMA, plus 100 basis points for spread, plus construction lender’s annual fee of 1.25%, Issuer’s fee of .30%, 10 basis points for remarketing fee and the trustee’s fee of 0.055% ($4,200/year), for a total “all in” rate of 5.715%, which is similar to recent tax-exempt transactions of this type. Proposed SAIL Program Structure: Florida Housing has approved and closed the allocation of a $1,500,000 SAIL construction/permanent loan to finance this development. The loan closed on May 9, 2005.



February 16, 2006

This loan is non-amortizing and bears 3% simple interest per annum. Annual payments of all applicable fees are required. The Applicant has applied to Florida Housing for an additional $1,500,000 SAIL construction/permanent loan to finance this development to be disbursed pro rata with other construction loan funds, based upon a percentage of SAIL to total development costs during construction, net of deferred developer’s fees. Final approval is subject to credit underwriting and board approval. Other Sources of Funds: Additional Sources of Funds for this development during construction are Bridge Loan, Housing Credit Equity and Deferred Developer Fee. The Applicant provided a Promissory Note dated February 23, 2005 in the amount of $2,150,000. This Note is between Harris Cove Partners, Ltd. and Bank of America, N.A. Accrued and unpaid interest shall be due and payable in arrears on the 1st day of each month commencing on April 1, 2005. All accrued and unpaid interest should be paid in full at the Maturity Date, September 23, 2006, to be paid by the tax credit equity at completion. Interest rate is a fluctuating rate equal to LIBOR Daily Rate plus 225 basis points per annum. For the purpose of this Credit Underwriting Report, a rate of 4.519% 30-day Libor was used from January 20, 2006, plus 225 basis points for a total of 6.769%. The Syndicator, John Hancock Realty Management, Inc., has provided the First Amended and Restated Limited Partnership Agreement dated February 1, 2005. Based on this agreement, the Syndicator agrees to acquire a limited partnership interest of 99.99% (the “Interest”) in Harris Cove Partners, Ltd. (the “Partnership”) for a total capital contribution to the partnership in the amount of $4,801,204 at a syndication rate of $0.876, disbursed in multiple installments. During construction, it is estimated that the amount to be disbursed will total $1,680,422 or 35% of total capital contribution. During the construction period, the developer must defer 67% or $1,539,825 of available developer fees totaling $2,311,817 to balance the Sources & Uses of Funds after receipt of all available MMRB Loan proceeds and HC Equity contributions have been received.



February 16, 2006

Permanent Financing Sources:

Source Lender ApplicationRevised

Applicant UnderwriterInterest

RateAmort.

Yrs.Term Yrs.

Annual Debt

Service


County HFA $6,275,000 $6,275,000 $7,585,000 6.615% 30 33 $565,931

SAIL Loan 2004 and 2005 Applications FHFC $3,000,000 $3,000,000 $3,000,000 3.330% N/A 33.25 $99,902Housing Credit Equity JHRA $4,631,416 $4,631,416 $4,801,204 N/A N/A N/A N/A

Deferred Developer Fee Sandspur $38,750 $38,750 $569,043 N/A N/A N/A N/ATotal $13,945,166 $13,945,166 $15,955,247 $665,833 Proposed First Mortgage Loan Structure: The first mortgage loan is in the amount of $7,600,000; with an interest rate (“all-in” interest rate) equal to the true interest cost of the bonds plus all applicable fees. Arbor Commercial Mortgage, LLC (“Arbor”), as a qualified Fannie Mae Delegated Underwriter and Servicer (“DUS”) lender, is providing the credit enhancement. The DUS credit enhancement will benefit unrated, tax-exempt bonds to be issued by the County for affordable housing, such that they become triple-A rated through Fannie Mae. The credit enhancement is secured by a first mortgage. The loan terms include a mortgage amount of $7,600,000, a loan term of 33 years, to be coterminous with the Amortization Period of 30 years. However, in order to meet SAIL Program loan DSC requirements, First Housing recommended on its Credit Underwriting Report, dated February 17, 2005, a reduction in this loan of approximately $15,000, resulting in an adjusted first mortgage loan amount of $7,585,000. Note that for underwriting purposes, the interest rate will be equal to an average base rate of 6.615%, which includes 3.010% floor based on January 18, 2006 BMA, plus 2% Fannie Mae required premium, plus Fannie Mae facility fees of 1.05% (Credit Facility Fee of 0.36%, Liquidity Fee of 0.25%, and Servicing Fee of 0.44%), plus a Remarketing Fee of .10%, a Bond Issuer fee of .30%, a Cap reserve fee of .10%, and a Trustee fee of $4,200 or 0.055%. Proposed SAIL Program Structure: Florida Housing has approved and closed the allocation of a $1,500,000 SAIL construction/permanent loan to finance this development. The loan closed on May 9, 2005. The SAIL loan is co-terminus with the first mortgage, as permitted by the SAIL Rule. It is non-amortizing and bears 3% simple interest per annum. Furthermore, the Applicant has applied to Florida Housing for an additional $1,500,000 SAIL construction/permanent loan to finance this development to be used to pay developer overhead and fees. Annual payments of all applicable fees are required. In addition and to the extent that development cash flow is available; interest payments at the 3% rate are required. Any unpaid interest will be deferred until cash flow is available. However, at the maturity of the SAIL loan, all principal and unpaid interest will be due. This credit underwriting assumes interest payments at 3.330% (simple interest rate plus applicable fees). Available SAIL loan funds will be drawn pro rata with the First Mortgage loan during construction.



February 16, 2006

SAIL Loan funds are to be utilized as an additional source, to cover general development costs during construction, as well as cover additional costs associated with the SAIL Program (i.e. cost of Issuance, legal fees, additional amenities, etc.). Housing Credit Equity Investment: As noted, in addition to the proposed bonds, the development can receive syndication proceeds from the sale of housing credits (“HC”). The subject anticipates applying for Housing Credits. Since the subject expects to receive tax-exempt bonds greater than 50% of cost, it would be applying for 4% federal credits. The First Amended and Restated Limited Partnership Agreement dated February 1, 2005 by the syndicator, John Handcock Realty Advisors, Inc. (“JHRA”) and/or its affiliates on behalf of its designee (the “Investment Partnership”), was received and reviewed. The syndicator acquired a limited partnership interest of 99.99% (the “Interest”) in Harris Cove Partners, Ltd. (the “Partnership”). JHRA agrees to make a total capital contribution to the partnership in the amount of $4,801,204 at a syndication rate of $0.876, disbursed in multiple installments as follows:

Capital Contributions AmountPercentage

of Total When Due

1st Installment $1,680,422 35%

to be paid prior to or simultaneously with the closing of construction financing

2nd Installment $2,160,542 45%

to be paid on the latest to occur of (i) completion date, of (ii) closing of the SAIL loan, and (iii) April 1, 2006

3rd Installment $480,120 10% to be paid upon Cost Certification

4th Installment $480,120 10%

upon on the latest to occur of (i) Final Closing, (ii) the Breakeven Date, (iii) the Credit Allocation Date, (iv) receipt of evidence of submission of the Extended Use Agreement to the Credit Agency, (v) receipt of Tenant Income Certification of each Qualified Tenants in the Property, (vi) the Initial Occupancy Date, and (vii) October 1, 2006

Total $4,801,204 100%

Annual Credit Per Syndication Agreement: $547,982

Calculated HC Exchange Rate: $0.876

Limited Partner Ownership Percentage: 99.99%

Proceeds During Construction: $1,680,422 Deferred Developer Fee



February 16, 2006

The current budget indicates that during the permanent stage, the developer will most likely be required to defer $569,043 (or 25%) of total developer’s fees of $2,311,817 after all available syndication proceeds have been disbursed.



February 16, 2006

Uses of Funds

Application Total Costs

Applicant's Revised Total

CostsUnderwriter's Total Costs

Actual Construction CostDemolition $0Off-Site Work $0New Rental Units $7,040,000 $8,285,714 $8,285,714Recreational Amenities $0Accessory Buildings $0Actual Construction Cost $7,040,000 $8,285,714 $8,285,714Other $0 $0Sub-Total $7,040,000 $8,285,714 $8,285,714General Contractor Fees (max 14%) $985,599 $1,160,000 $1,160,000Total Construction Contract Amount $8,025,599 $9,445,714 $9,445,714Hard Cost Contingency $200,000 $414,286 $414,286Total Actual Construction Cost $8,225,599 $9,860,000 $9,860,000

Notes to the Actual Construction Costs: 1. A Standard Form of Agreement between the Owner, Harris Cove Partners, Ltd., and the

Contractor, ASM Construction, Ltd. was received for review. The contract is a standard AIA Document A 114-2001, where the basis of payment is Cost of the Work Plus a Fee with a negotiated Guaranteed Maximum Price. The agreement is dated October 13, 2004 and has been signed by both parties. The controlled cost estimate price is $8,834,560, including a five percent contingency. In addition, the Underwriter reviewed a Change Order dated October 26, 2005, which increases the maximum price by $1,025,440 totaling $9,860,000. The Owner will withhold ten percent retainage of the contract amount; retainage will be reduced to five percent upon 50% completion of the work. Consultech & Associates, Inc. (“Consultech”) prepared a Pre-Construction Plan & Cost Review (“PCA”), dated December 13, 2004. This review of the construction costs indicates that the cost per square foot of $61.15 (without contingency) appears to be more than the adjusted average range for projects of this type. The report also notes that the building industry has experienced recent substantial increases in the cost of lumber, drywall, concrete, and steel, which may contribute to higher costs than previous projects.

2. First Housing has used the current budgeted amount of Hard Cost Contingency, which is

reasonable (approximately 5%). 3. General Contractor’s fees reflect the maximum (14.0%) allowed by all applicable

program standards.



February 16, 2006




General Development CostsAccounting Fees $5,000 $0Appraisal $10,000 $6,000 $6,000Architect's Fee $126,600 $134,100 $134,100Builder's Risk Insurance $44,000 $44,000 $44,000Building Permits $60,000 $60,000 $60,000Brokerage Fees $300,000 $0Engineering Fee $114,400 $124,059 $124,059Environmental Report $25,000 $12,752 $12,752FHFC Administrative Fee $43,594 $43,839FHFC Application Fee $6,000 $6,000FHFC Compliance Fee $55,645 $57,743 $74,054FHFC Credit Underwriting Fee $30,111 $31,597 $31,597Furniture & Fixtures and W/D $0 $0Impact, Utility, & Building Permit Fees $333,504 $0Inspection Fees/Construction Admin. $0 $706,325 $706,325Insurance $0 $0Legal Fees $50,000 $242,075 $242,075Market Study $0 $0Marketing and Advertising $123,200 $123,200 $123,200Pre-Construction Analysis $0 $0Property Taxes $20,000 $20,000 $20,000Replacement Reserve Escrow $0 $0Soil Test $25,000 $25,000 $25,000Survey $25,000 $25,000 $25,000Title Insurance $100,000 $70,527 $70,527Utility Connection & Impact Fees $344,901 $0Other - Issuer Fee/Application Fee $0 $56,355 $56,355Other $295,974 $227,428 $227,428Other - Reserves $0 $25,600 $25,600Other - Sail Fee, Inspections, Issuance $0 $69,418 $69,418Other- Rating Agency $11,335 $11,335Total General Development Costs $2,137,929 $2,072,514 $2,138,664

Notes to the General Development Costs: 1. General Development Costs are the applicant’s updated estimates, which appear

reasonable. 2. Underwriter has used a total of $74,054 for FHFC Housing Credit (HC) compliance

monitoring fee based on the applicable fee schedule. Furthermore, FHFC administrative fee is estimated at $43,839 based on 8% of the first year’s annual credit allocation.



February 16, 2006




Financial CostsUnderwriter Fee $0 $44,867 $44,867Construction Interest $586,444 $234,162 $494,193Bridge Loan Interest/Fee $0 $43,125 $165,918Const. Loan Origination Fees $114,000 $0 $0Issuer Financial Advisor $0 $10,900 $10,900Permanent Loan Origination Fees $76,000 $51,789 $51,789SAIL Loan Commitment Fee $0 $0 $30,000Trustee Fee $0 $9,100 $9,100Interst CAP $0 $38,000 $38,000Total Financial Costs $776,444 $431,943 $844,767

Notes to the Financial Costs: 1. Financial Costs are the applicant’s updated estimates, which appear reasonable. 2. SAIL loan commitment fee is based upon an actual cost of 1% of the SAIL loan amount. 3. First Housing has estimated construction period interest based on a maximum 24-month

construction/lease-up period, and an outstanding balance of 57% on the construction/bridge loan.




Development Cost Before Developer Fee and Land Costs $11,139,972 $12,364,457 $12,843,430Other Development CostsDeveloper Fee $2,005,194 $2,223,018 $2,311,817Developer Fee on Acquisition of Building $0 $0 $0Other - Administrative Overhead $0 $0 $0Other - Consultant Fee $0 $0 $0Total Other Development Costs $2,005,194 $2,223,018 $2,311,817

Notes to the Other Development Costs: 1. The recommended Developer’s fee is equal to approximately 18% of total Development

Cost before Land, and developer’s fee; which falls within the maximum permitted of 18%, based on Florida Housing’s 2005 Rule Chapter 67-48.0072.



February 16, 2006




Land Acquisition CostsLand $800,000 $800,000 $800,000Other - $0 $0 $0Other $0 $0Plus: Land Carrying Costs $0 $0 $0Total Land Acquisition Costs $800,000 $800,000 $800,000

Notes to Acquisition Costs: 1. A Closing Statement and Disbursement Sheet dated September 30, 2004 by and

between W.A. Baker, Trustee (Seller), and Harris Cove Partners, Ltd. (Purchaser) in the amount of $800,000. The Appraisal by Goforth Real Estate Consultants, provides an estimate of “as is” value for the subject site as of December 27, 2005 in the amount of $800,000, which supports the purchase price.




Total Development Costs $13,945,166 $15,387,475 $15,955,247 Notes to Total Development Cost:

1. Total Development Cost estimated by First Housing is 14.4% higher than the Applicant’s

Total Cost, mainly due to higher construction costs over the past few months.


February 16, 2006

OPERATING PROFORMA DESCRIPTION Annual Per UnitRevenue Gross Potential Rental Revenue $1,150,272 $8,987 Other Income Washer/Dryer Rentals $46,080 $360 Cable TV $23,040 $180 Miscellaneous Income $46,080 $360 Gross Potential Income $1,265,472 $9,887 Less: Vacancy and Collection Loss 5% $63,274 $494Total Effective Gross Revenue $1,202,198 $9,392

Expenses Fixed: Real Estate Taxes $98,239 $767 Insurance $24,320 $187 Variable: Management Fee 5% $60,110 $470 General and Administrative $38,400 $300 Payroll Expenses $128,000 $1,000 Utilities $38,400 $300 Marketing and Advertising $19,200 $150 Maintenance and Repairs $41,600 $325 Grounds Maintenance & Landscaping $19,200 $150 Other $12,160 $95 Reserve for Replacements $25,600 $200Total Expenses $505,229 $3,944

Net Operating Income $696,969 $5,445

Debt Service PaymentsFirst Mortgage $565,931 $4,421SAIL Loan 2004 and 2005 Applications $99,902 $780

Total Debt Service Payments $665,833 $5,202

Operating Income After Debt Service - Before Tax Cash Flow $31,137 $243 Debt Service Coverage Ratios DSC - First Mortgage 1.23 DSC - All Mortgages and Fees 1.05



February 16, 2006

Financial Ratios Operating Expense Ratio 42% Break-Even Ratio 93% Notes to the Operating Proforma and Ratios:

1. Gross Potential Rental Revenue is based upon 2005 Florida Housing published

restricted rents less utility allowance on the affordable units as required by the HC Program and market rental rates on the market units. The Appraiser has confirmed these rents are achievable, and were therefore utilized. Note that the Applicant is requesting SAIL funds; which is income restricted but does not impose any rent restrictions. However, the developer will apply for HCs, which will impose rent restrictions, which are reflected herein.

Below is the rent roll for the subject property:

Orlando MSA (Lake County)

Bed- rooms Baths

No. of Units

Ave. Unit Size (SF)

Median Income %

Max. Gross Rents

Utility Allow-ance

Max Net Rents

Underwriter Rents Annual Rents

1 1 16 675 60% $620 $52 $568 $568 $109,0562 2 48 923 60% $744 $61 $683 $683 $393,4083 2 32 1,107 60% $859 $64 $795 $795 $305,2804 3 32 1,364 60% $958 $66 $892 $892 $342,528

Totals 128 134,176 $1,150,272

2. The 5% vacancy and collection loss rate is based on Appraiser’s estimate of sustainable economic occupancy; which is supported by the appraiser.

3. Other Income is comprised of Washer/Dryer rentals, Cable TV and Miscellaneous

income. The Washer/Dryer rentals equates to an income (net) of 30.00/unit per month; Cable TV equates to an income (net) of 15.00/unit per month; Miscellaneous Income (i.e. vending income, late charges, pet deposits, forfeited security deposits, etc.) is calculated at $360 /unit per year. The appraisal supports these other income estimates.

4. Based upon operating data from comparable properties, third party reports (primarily the

preliminary data provided by the appraiser and market study), and the credit underwriter’s independent due diligence; FHDC represents that, in our professional opinion, estimates for rental income, vacancy and loss allowances, other income, and operating expenses fall within a band of reasonableness.

5. The Applicant has submitted a Management Agreement which reflects an industry-

standard management fee of 5% of actual receipts and contains the appropriate verbiage regarding compliance with tenant income and (if applicable, rent restrictions). However, the Applicant provided an amendment in which the management will agree to defer 1% if necessary. The Appraisal supports a 4% management fee in this market. The Underwriter has used 5% for management fee, which is common for similar projects.

6. Replacement Reserves of $200 per unit per year are projected, which is based upon the

Appraiser’s calculation.

FHDC

February 16, 2006

Section B

SAIL Program Special and General Conditions


LAKESIDE POINTE APARTMENTS PAGE B-1

February 16, 2006

Special Conditions: This recommendation is contingent upon the review and approval of the following items by the Servicer and Florida Housing at least two (2) weeks before closing. Failure to receive approval of these items within this time frame may result in postponement of the closing date. 1. Consultech is to act as construction inspector during the construction phase. 2. In that hard cost contingency is included in the GC Contract it is recommended that any

draws from this budgeted line item be reflected as a change order, subject to approval by appropriate parties (i.e. SAIL Program Servicer, etc.).

3. Closing of the loan is conditional upon verification that any outstanding past due, and/or

non-compliance items noted at the time of closing, have been satisfied. 4. The Applicant must defer at least 35% of their developer fee for at least 6 months

following construction completion. General Conditions:

This recommendation is contingent upon the review and approval of the following items by the Servicer and Florida Housing at least two (2) weeks before closing. Failure to receive approval of these items within this time frame may result in postponement of the closing date. 1. Borrower to comply with any and all recommendations noted in the pre-construction

analysis which has been prepared by Consultech. 2. Signed and sealed survey, dated within 90 days of closing, unless otherwise approved

by Florida Housing, and its legal counsel, based upon the particular circumstances of the transaction. The Survey shall be certified to Florida Housing, and its legal counsel, as well as the title insurance company, and shall indicate the legal description, exact boundaries of the Development, easements, utilities, roads, and means of access to public streets, total acreage and flood hazard area and any other requirements of Florida Housing.

3. Building permits and any other necessary approvals and permits (e.g., final site plan

approval, water management district, Department of Environmental Protection, Army Corps of Engineers, Department of Transportation, etc.). An acceptable alternative to this requirement is receipt and satisfactory review of a letter from the local permitting and approval authority stating that the above referenced permits and approvals will be issued upon receipt of applicable fees (with no other conditions), or evidence of 100% lien-free completion, if applicable. If a letter is provided, copies of all permits will be required as a condition of the first post-closing draw.

4. The final “as permitted” (signed and sealed) site plans, building plans, and



February 16, 2006

specifications. The Geotechnical Report must be bound within the final plans and specifications.

5. Final sources and uses of funds itemized by source and line item, in a format and in amounts approved by the Servicer. 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 final sources and uses of funds schedule will be attached to the Loan Agreement as the approved Development budget.

6. A final construction draw schedule showing itemized sources and uses of funds for each

monthly draw. SAIL Program loan proceeds shall be disbursed on a prorata basis during the construction or rehabilitation phase in an amount per Draw which does not exceed the ratio of the SAIL loan to the Total Development Cost, net of deferred developer fees, unless otherwise approved by the Credit Underwriter. The closing draw must include appropriate backup and ACH wiring instructions.

7. Evidence of general liability, flood (if applicable), builder’s risk and replacement cost

hazard insurance (as certificates of occupancy are received) reflecting Florida Housing as Loss Payee/Mortgagee, with coverages, deductibles and amounts satisfactory to Florida Housing.

8. If the development is not 100% lien-free completed, a 100% Payment and Performance

Bond or a Letter of Credit (LOC) in an amount not less than 25% of the construction contract is required in order to secure the construction contract between the GC and the Borrower. In either case, Florida Housing must be listed as co-obligee. The P&P bonds must be from a company rated at least “A-“by A.M. Best & Co with a financial size category of at least FSC VI. FHFC, and/or legal counsel must approve the source, amount(s) and all terms of the P&P bonds, or LOC. If the LOC option is utilized, the LOC must include “evergreen” language and be in a form satisfactory to Florida Housing, its Servicer and its Legal Counsel.

9. Architect, Construction Consultant, and Borrower certifications on forms provided by

Florida Housing will be required for both design and as-built with respect to Section 504, ADA, and the Federal Fair Housing Act requirements if applicable.

This recommendation is contingent upon the review and approval of the following items by Florida Housing and its legal counsel at least two (2) weeks before closing. Failure to receive approval of these items, along with all other items listed on counsel’s due diligence list, within this time frame may result in postponement of the closing date.

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

Florida for the Borrower, the general partner/principal(s)/managers(s) of the Borrower, the guarantors, and any limited partners of the Borrower.

2. Signed and sealed survey, dated within 90 days of closing, unless otherwise approved

by Florida Housing, and its legal counsel, based upon the particular circumstances of the transaction. The Survey shall be certified to Florida Housing and its legal counsel, as well as the title insurance company, and shall indicate the legal description, exact boundaries of the Development, easements, utilities, roads, and means of access to public streets, total acreage and flood hazard area and any other requirements of Florida



February 16, 2006

Housing.

3. An acceptable updated Environmental Audit Report, together with a reliance letter to Florida Housing, prepared within 90 days of closing, unless otherwise approved by Florida Housing, and legal counsel, based upon the particular circumstances of the transaction. Borrower to comply with any and all recommendations noted in the Environmental Assessment(s) and Update and the Environmental Review, if applicable

4. Title insurance pro-forma or commitment for title insurance with copies of all Schedule B exceptions, in the amount of the Loan naming FHFC as the insured. All endorsements required by FHFC shall be provided.

5. Florida Housing and its legal counsel shall review and approve all other lenders closing

documents and the limited partnership or other applicable agreement. Florida Housing shall be satisfied in its sole discretion that all legal and program requirements for the Loan have been satisfied.

6. Evidence of general liability, flood (if applicable), builder’s risk, and replacement cost

hazard insurance (as certificates of occupancy are received) reflecting Florida Housing as Loss Payee/Mortgagee, in coverage, deductibles and amounts satisfactory to Florida Housing.

7. Receipt of a legal opinion from the Borrower's legal counsel acceptable to Florida Housing addressing the following matters:

a. The legal existence and good standing of the Borrower and of any partnership or

limited liability company that is the general partner of the Borrower (the "GP") and of any corporation or partnership that is the managing general partner of the GP, of any corporate guarantor and any manager.;

b. Authorization, execution, and delivery by the Borrower and the guarantors, of all

Loan documents; c. The Loan documents being in full force and effect and enforceable in accordance

with their terms, subject to bankruptcy and equitable principles only; d. The Borrower's and the guarantor's execution, delivery and performance of the loan

documents shall not result in a violation of, or conflict with, any judgments, orders, contracts, mortgages, security agreements or leases to which the Borrower is a party or to which the Development is subject to the Borrower’s Partnership Agreement and;

e. Such other matters as Florida Housing or its legal counsel may require.

8. Evidence of compliance with local concurrency laws.

9. Such other assignments, affidavits, certificates, financial statements, closing statements

and other documents as may be reasonably requested by Florida Housing or its legal counsel in form and substance acceptable to Florida Housing or its legal counsel, in connection with the Loan.



February 16, 2006

10. UCC Searches for the Borrower, its partnerships, as requested by counsel.

11. Any other reasonable conditions established by Florida Housing and its legal counsel.

This recommendation is also contingent upon the following additional conditions.

1. Compliance with all provisions of Sections 420.507(22) and 420.5087, Florida Statutes and Rule Chapter 67-48, F.A.C.

2. Acceptance by the Borrower and execution of all documents evidencing and securing the

Loan in form and substance satisfactory to Florida Housing, including, but not limited to, the Promissory Note, the Loan Agreement, the Mortgage and Security Agreement, and the Land Use Restriction Agreement.

3. At all times there will be undisbursed loan funds (collectively held by Florida Housing,

First Lender and any other sources) sufficient to complete the Development. If at any time there are not sufficient funds (held by Florida Housing, First Lender and any other sources) 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. This condition specifically includes escrowing at closing all syndication and other equity necessary to complete construction or another alternative acceptable to Florida Housing in its sole discretion.

4. If applicable, Guarantors to provide the standard FHFC Construction Completion

Guarantee; to be released upon lien-free completion as approved by the Servicer.

5. Guarantors to provide the standard FHFC Operating Deficit Guarantees; to be released upon achievement of 1.10 combined debt service coverage for the first mortgage and the SAIL Loan for six consecutive months.

6. Guarantors to provide the standard FHFC Environmental Indemnity.

7. Guarantors to provide the standard FHFC Guaranty of Recourse Obligations.

8. Consultech is to act as Florida Housing’s inspector during the construction period.

9. A mortgagee title insurance policy naming Florida Housing as the insured in the amount of the Loan is to be issued immediately after closing. Any exceptions to the title insurance policy must be acceptable to Florida Housing or its legal counsel.

10. Property tax and hazard insurance escrow are to be established and maintained by the

First Lender or the Servicer. In the event the reserve account is held by Florida Housing’s loan servicing agent, the release of funds shall be at Florida Housing’s sole discretion.

11. Replacement Reserves in the amount of $200 per unit per year will be required to be

deposited on a monthly basis into a designated escrow account, to be maintained by the First Mortgagee or Florida Housing’s loan servicing agent. However, Applicant has the



February 16, 2006

option to prepay Replacement Reserves, as allowed per Rule 67-048.12, F.A.C., in the amount of $25,600 (one-half the required Replacement Reserves for Years 1 and 2), in order to meet the SAIL Program 1.10:1 DSC requirement. Applicant can waive this election, if at closing of the SAIL Loan the required DSC is met without the need to exercise the option. Therefore, it is currently estimated that Replacement Reserves will be funded from Operations in the amount of $200 per unit per year for Years 1 and 2, followed by $200 per unit per year thereafter. An inflation factor based upon the Consumer Price Index will be applied to the Replacement Reserve deposit beginning in Year 7, unless waived or reduced in the event Obligor provides a Physical Needs Study prepared by an independent third party acceptable to FHFC that evidences an increase in the deposit is excessive or unnecessary.

12. Closing of the first mortgage loan simultaneous with or prior to closing of the SAIL Loan.

13. A minimum of 10% retainage holdback on all construction draws until the Development is

50% completed, and 0% retainage thereafter. Retainage will not be released until successful completion of construction and issuance of all certificates of occupancy. The GC contract indicates a 10% retainage holdback through 50% completion then 5% retainage holdback thereafter, which satisfies the minimum requirement, and is therefore, acceptable.

14. Satisfactory completion of a pre-loan closing compliance audit conducted by Florida

Housing or Servicer, if applicable.

15. Any other reasonable requirements of the Servicer, Florida Housing or its legal counsel.



February 16, 2006

7. Based upon an anticipated NOI of $696,969 the development can support a Loan of $7,585,000 at a combined 1.05 DSC so long as annual Debt Service on the first mortgage does not exceed $565,931.

8. Refer to Exhibit 1, Page 1 for a 15-Year Proforma, which reflects rental income increasing

at an annual rate of 3%, and expenses increasing at an annual rate of 4%.


Lakeside Pointe Apartments EXHIBIT 1, PAGE 1 February 16, 2006

Lakeside Pointe Apartments 15-Year Cash Flow

DESCRIPTION YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11 YEAR 12 YEAR 13 YEAR 14 YEAR 15Income Gross Potential Rental Revenue $1,150,272 $1,184,780 $1,220,324 $1,256,933 $1,294,641 $1,333,481 $1,373,485 $1,414,689 $1,457,130 $1,500,844 $1,545,869 $1,592,245 $1,640,013 $1,689,213 $1,739,890 Other Income Washer/Dryer Rentals $46,080 $47,462 $48,886 $50,353 $51,863 $53,419 $55,022 $56,673 $58,373 $60,124 $61,928 $63,785 $65,699 $67,670 $69,700 Cable TV $23,040 $23,731 $24,443 $25,176 $25,932 $26,710 $27,511 $28,336 $29,186 $30,062 $30,964 $31,893 $32,850 $33,835 $34,850 Miscellaneous Income $46,080 $47,462 $48,886 $50,353 $51,863 $53,419 $55,022 $56,673 $58,373 $60,124 $61,928 $63,785 $65,699 $67,670 $69,700 Rent Premiuns $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Gross Potential Income $1,265,472 $1,303,436 $1,342,539 $1,382,815 $1,424,300 $1,467,029 $1,511,040 $1,556,371 $1,603,062 $1,651,154 $1,700,689 $1,751,709 $1,804,260 $1,858,388 $1,914,140 Less: Vacancy and Collection Loss $63,274 $71,087 $73,219 $75,416 $77,678 $80,009 $82,409 $84,881 $87,428 $90,051 $92,752 $95,535 $98,401 $101,353 $104,393Total Effective Gross Revenue $1,202,198 $1,232,349 $1,269,320 $1,307,399 $1,346,621 $1,387,020 $1,428,631 $1,471,490 $1,515,634 $1,561,103 $1,607,936 $1,656,174 $1,705,860 $1,757,036 $1,809,747

Expenses Fixed: Real Estate Taxes $98,239 $102,169 $106,255 $110,506 $114,926 $119,523 $124,304 $129,276 $134,447 $139,825 $145,418 $151,234 $157,284 $163,575 $170,118 Insurance $24,320 $25,293 $26,305 $27,357 $28,451 $29,589 $30,773 $32,003 $33,284 $34,615 $36,000 $37,440 $38,937 $40,495 $42,114 Variable: Management Fee $60,110 $49,294 $50,773 $52,296 $53,865 $55,481 $57,145 $58,860 $60,625 $62,444 $64,317 $66,247 $68,234 $70,281 $72,390 General and Administrative $38,400 $39,936 $41,533 $43,195 $44,923 $46,719 $48,588 $50,532 $52,553 $54,655 $56,841 $59,115 $61,480 $63,939 $66,496 Payroll Expenses $128,000 $133,120 $138,445 $143,983 $149,742 $155,732 $161,961 $168,439 $175,177 $182,184 $189,471 $197,050 $204,932 $213,129 $221,655 Utilities $38,400 $39,936 $41,533 $43,195 $44,923 $46,719 $48,588 $50,532 $52,553 $54,655 $56,841 $59,115 $61,480 $63,939 $66,496 Marketing and Advertising $19,200 $19,968 $20,767 $21,597 $22,461 $23,360 $24,294 $25,266 $26,277 $27,328 $28,421 $29,558 $30,740 $31,969 $33,248 Maintenance and Repairs $41,600 $43,264 $44,995 $46,794 $48,666 $50,613 $52,637 $54,743 $56,932 $59,210 $61,578 $64,041 $66,603 $69,267 $72,038 Grounds Maintenance & Landscaping $19,200 $19,968 $20,767 $21,597 $22,461 $23,360 $24,294 $25,266 $26,277 $27,328 $28,421 $29,558 $30,740 $31,969 $33,248 Other $12,160 $12,646 $13,152 $13,678 $14,225 $14,794 $15,386 $16,002 $16,642 $17,307 $18,000 $18,720 $19,469 $20,247 $21,057 Reserve for Replacements $25,600 $25,600 $25,600 $25,600 $25,600 $28,800 $28,800 $28,800 $28,800 $28,800 $32,000 $32,000 $32,000 $32,000 $32,000Total Expenses $505,229 $511,194 $530,125 $549,798 $570,243 $594,690 $616,771 $639,718 $663,566 $688,350 $717,308 $744,077 $771,898 $800,811 $830,861

Net Operating Income $696,969 $721,156 $739,195 $757,602 $776,379 $792,330 $811,860 $831,772 $852,068 $872,753 $890,628 $912,097 $933,962 $956,224 $978,886

Debt Service PaymentsFirst Mortgage $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931 $565,931SAIL Loan 2004 and 2005 Applications $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902 $99,902

Total Debt Service Payments $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833 $665,833

Operating Income After Debt Service - Before Tax $31,137 $55,323 $73,362 $91,769 $110,546 $126,497 $146,027 $165,939 $186,235 $206,920 $224,795 $246,264 $268,129 $290,391 $313,053

Debt Service Coverage Ratios DSC - First Mortgage 1.23 1.27 1.31 1.34 1.37 1.40 1.43 1.47 1.51 1.54 1.57 1.61 1.65 1.69 1.73 DSC - All Mortgages and Fees 1.05 1.08 1.11 1.14 1.17 1.19 1.22 1.25 1.28 1.31 1.34 1.37 1.40 1.44 1.47

SAIL PROGRAM - CREDIT UNDERWRITING REPORT

Lakeside Pointe Apartments EXHIBIT 2, PAGE 1

February 16, 2006

EXHIBIT 2 Lakeside Pointe f/k/a Harris Cove Apartments (2005-073S/2004-121S)

Lake County

Description of Features and Amenities A. The Development will consist of 128 garden apartment units located in 10 residential

buildings.

Unit Mix: 16 One bedroom / one bath units

48 Two bedroom / two bath units

32 Three bedroom / two bath units

32 Four bedroom / three bath units 128 Total units

The Development is to be constructed in accordance with the final plans and specifications approved by the appropriate city or county building or planning department or equivalent agency, and approved as reflected in the Pre-Construction Analysis prepared for Florida Housing or its Servicer, unless a change order has been approved in writing by Florida Housing or its Servicer. The Development will conform to requirements of local, state and federal laws, rules, regulations, ordinances, orders and codes, Federal Fair Housing Act and Americans with Disabilities Act (“ADA”), as applicable.

B. Each UNIT will be fully equipped with the following:

1. Air conditioning (window units are not allowed, however, through-wall units are permissible for rehabilitation)

2. Window treatments for each window

3. Termite prevention and pest control throughout the entire affordability period

4. Peephole on all exterior doors

5. Cable or satellite TV hook-up

6. Range, oven and refrigerator

7. At least two full bathrooms in all three bedroom or larger new construction units 8. Bathtub with shower in at least one bathroom in at least 90% of the new construction

non-Elderly units



February 16, 2006

C. The Borrower has committed to provide the following features in each UNIT:

1. At least 1.5 bathrooms (one full bath and one with at least a toilet and sink) in all two bedroom new construction units

2. Dishwasher in all new construction units

3. Garbage disposal in all new construction units

4. Double compartment kitchen sink

5. Pantry in kitchen area in all new construction units - must be no less than 20 cubic feet

of storage space. Pantry cannot be just an under- or over-the-counter cabinet.

6. Laundry hook-ups and space for full-size washer and dryer

D. The Borrower has committed to the following amenities in the DEVELOPMENT:

1. Exercise room with appropriate equipment 2. Community center or clubhouse

3. Swimming pool

4. Playground/tot lot, accessible to children with disabilities (must be sized in proportion to Development’s size and expected resident population with age-appropriate equipment)

5. Two or more parking spaces per total number of units 6. Outside recreation facility (such as shuffleboard court, putting green, tennis court, full

basketball court, volleyball court, etc.) 7. Thirty-year expected life roofing on all buildings

8. Exterior lighting in open and common areas

E. The Borrower has committed to provide the following energy conservation features for all UNITS in the Development:

1. Heat pump with minimum HSPF of 7.5 instead of electric resistance

2. Air conditioning with SEER rating of 12 or better 3. Electric water heater with energy factor of .91 or better

4. Wall insulation of R-13 or better for frame-build construction or R-7 or better for

masonry/concrete block construction 5. Attic insulation of R-30 or better



February 16, 2006

6. Ceiling fans in all bedrooms and living area in each unit F. The Borrower has committed to provide the following Resident Programs:

1. Homeownership Opportunity Program – Financial Assistance with Purchase of a Home: Borrower commits to provide a financial incentive which includes the following provisions:

a. the incentive must be applicable to the home selected by the resident and may

not be restricted to or enhanced by the purchase of homes in which the Borrower, Developer, or other related party has an interest;

b. the incentive must be not less than 5% of the rent for the resident’s unit during the resident’s entire occupancy (Note: Resident will receive the 5% credit for all months for which the resident is in compliance with the terms and conditions of the lease. Damages to the unit in excess of the security deposit will be deducted from the incentive.);

c. the benefit must be in the form of a gift or grant and may not be a loan of any nature;

d. the benefits of the incentive must accrue from the beginning of occupancy; e. the vesting period can be no longer than 2 years of continuous residency; and f. no fee, deposit or any other such charge can be levied against the resident as a

condition of participation in this program

2. After School Program for Children: This program requires the Borrower or its Management Agent to provide supervised, structured, age-appropriate activities for children during the after school hours, Monday through Friday. Activities must be on-site at no charge to the residents.

3. First Time Homebuyer Seminars: Borrower or its Management Agent must arrange for

and provide, at no cost to the resident, in conjunction with local realtors or lending institutions, semiannual on-site seminars for residents interested in becoming homeowners.

4. Health Care: At least quarterly visits by health care professionals such as nurses,

doctors, or other licensed care providers. At a minimum, the following services must be provided: health screening, flu shots, vision and hearing tests. Regularly scheduled is defined as not less often than once each quarter. On-site space must be provided. Service must be provided at no cost to the residents, with the exception that the residents may be charged for medications.

5. Resident Activities: These specified activities are planned, arranged, provided and paid

for by the Borrower or its Management Agent. These activities must be an integral part of the management plan. The Borrower must develop and execute a comprehensive plan of varied activities that brings the residents together and encourages community pride. The goal here is to foster a sense of community by bringing residents together on a regularly scheduled basis by providing activities such as holiday and special occasion parties, community picnics, newsletters, children’s special functions, etc.

6. Financial Counseling: This service must be provided by the Borrower or its

Management Agent, at no cost to the resident, and must include the following



February 16, 2006

components: must be regularly scheduled at least once each quarter; must include tax preparation assistance by qualified professionals; must include educational workshops on such topics as “Learning to Budget”, “Handling Personal Finances”, “Predatory Lending”, or “Comparison Shopping for the Consumer”.

7. Resident Assistance Referral Program: The Borrower or its Management Agent will

make available to residents information about services such as crisis intervention, individual and family needs assessment, problem solving and planning, appropriate information and referral to community resources and services based on need, monitoring of ongoing ability to retain self sufficiency, and advocacy to assist clients in securing needed resources. This service must be provided at no cost the resident.

COMPLETENESS AND ISSUES CHECKLIST


February 16, 2006

DEVELOPMENT NAME: LAKESIDE POINTE APARTMENTS DATE: February 16, 2006 In accordance with the applicable Program Rule(s), 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 Florida Housing Finance Corporation (“FHFC”). The following items must be satisfactorily addressed. “Satisfactorily” means that the Credit Underwriter has received assurances from third parties unrelated to the Applicant that the transaction can close within the allowed time frame. Unsatisfactory items, if any, are noted below and in the “Issues and Concerns” section of the Executive Summary.

STATUS NOTE FINAL REVIEW

REQUIRED ITEMS: Satis. / Unsatis.

1. The development’s final “as submitted for permitting” plans and specifications.

Note: Final “signed, sealed, and approved for construction” plans and specifications will be required thirty days before closing.

Satis.

2. Final site plan and/or status of site plan approval. Satis.

3. Permit Status. Satis.

4. Pre-construction analysis (“PCA”). Satis.

5. Survey. Satis.

6. Complete, thorough soil test reports. Satis.

7. Full or self-contained appraisal as defined by the Uniform Standards of Professional Appraisal Practice.

Satis.

8. Market Study separate from the Appraisal. Satis.

9. Environmental Site Assessment – Phase I and/or the Phase II if applicable (If Phase I and/or II disclosed environmental problems requiring remediation, a plan, including time frame and cost, for the remediation is required). 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.

Satis.

10. Audited financial statements for the most recent fiscal year ended or acceptable alternative as stated in Rule for credit enhancers, applicant, general partner, principals, guarantors and general contractor.

Satis.

11. Resumes and experience of applicant, general contractor and management agent. Satis.

12. Credit authorizations; verifications of deposits and mortgage loans. Satis.

13. Management Agreement and Management Plan. Satis.

14. Firm commitment from the credit enhancer or private placement purchaser, if any. Satis.

15. Firm commitment letter from the syndicator, if any. Satis.

16. Firm commitment letter(s) for any other financing sources. Satis.

17. Updated sources and uses of funds. Satis.

COMPLETENESS AND ISSUES CHECKLIST


February 16, 2006

STATUS NOTE FINAL REVIEW

REQUIRED ITEMS: Satis. / Unsatis.

18. Draft construction draw schedule showing sources of funds during each month of the construction and lease-up period.

Satis.

19. Fifteen-year income, expense, and occupancy projection. Satis.

20. Executed general construction contract with “not to exceed” costs. Satis.

21. HC ONLY: 35% of the total equity to be provided prior to or simultaneously with the closing of the construction financing.

NA

22. Any additional items required by the credit underwriter. Satis. 8/14/03 NOTES AND DEVELOPER RESPONSES: None

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