kane county neighborhood ... - kane county, illinois · illinois, with emphasis on the precise role...

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KANE COUNTY NEIGHBORHOOD STABILIZATION PROGRAM STAFF REPORT/EVALUATION OF PROJECT PROPOSAL

Project Summary: Project Name Neighborhood Stabilization Program – Homebuyer Program Sponsor/Developer Name DuPage Housing Authority/DHA Management, Inc. Project Description Acquisition and rehabilitation of foreclosed homes within the

high need census tracts in Carpentersville, South Elgin, North Aurora, East Dundee, and St. Charles.

Total Number of Units 11 Total Development Cost $1,674,641 Leverage/Matching Funds $0 NSP Funding Requested $1,674,641 Financing Terms Requested Forgivable Loan

Responsiveness to NSP Evaluation Criteria: Excellent Good Fair Poor

EVALUATION CRITERIA RATING STAFF COMMENTS Developer Criteria Development team’s depth of experience in acquiring (with an emphasis on foreclosures), rehabilitating, and developing high quality homeownership housing serving households at or below 120% MFI.

Applicant has directly relevant experience. It has utilized NSP funds to acquire, rehabilitate, and sell foreclosed homes to eligible homebuyers.

Team’s successful experience with structuring innovative financing for affordable housing, i.e., leveraging of other services.

Applicant’s does not propose to leverage other financing sources, but it does have experience implementing NSP financing mechanisms such as soft second mortgages to assist in the sale of homes.

Team’s experience with public and private financing sources, including but not limited to HOME, CDBG, and other related programs.

DHA’s portfolio of 400 units of affordable housing was financed under multiple federal and state sources.

Team’s financial capacity to provide required financial guarantees and complete projects on time and within budget.

Applicant has access to a $750,000.00 line of credit with MB Financial Bank. As of March 30, 2010 the entire line of credit is available for use on the project.

Team’s experience in the Kane County market area with affordable housing development.

Applicant has not worked in Kane County, but has extensive experience in neighboring DuPage County. Additionally DHA has completed MLS research on the type and cost of homes available in Kane County.

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Developer(s) must have successfully acquired and rehabilitated, and or developed, at least one affordable housing property within the last five years.

At the time of application, DHA had successfully purchased and rehabilitated 8 foreclosed upon homes in DuPage County, and had an additional 3 homes under contract for purchase. At time of application, 3 of these homes had been sold to qualified buyers.

Team’s ability to complete and manage projects satisfactorily.

Applicant has proven it is able to manage an NSP Homebuyer program thru its work in DuPage County.

Readiness to proceed.

Applicant has completed market research and is ready to purchase homes.

Development Track Record Track record in completing acquisition and rehabilitation of homeownership housing, on time and within budget.

DHA received high praise from DuPage County Community Services for their assistance in ensuring that county’s NSP program was a success.

Demonstrated organizational capacity, i.e., at least three to six months of operating cost reserves.

Applicant has completed 8 units of NSP housing in the past 12 months. The DHA development team is experienced in the purchase, rehab, and sale of homes. Additionally, DHA has access to a $750,000 line of credit from MB Financial Bank.

Positive track record for collaborative negotiations with public agency, (as demonstrated by references).

DHA received high praise from DuPage County Community Services for their assistance in ensuring that the county’s NSP program was a success.

Affordable First Time Homebuyer Programs Experience in developing end financing packaging, i.e. soft second subsidy programs.

Applicant does not propose to develop end financing package for homebuyers, but does have experience implementing NSP financing mechanisms such as soft second mortgages to assist in the sale of homes.

Experience in working with low-, moderate-, and middle-income households.

In addition to utilizing DuPage NSP funds, DHA is the Public Housing Authority for DuPage County were it has a wealth of experience working with affordable housing programs, including Section 8 and FHA financing.

Development Staff Capacity Demonstrated adequacy of project manager experience.

Project manager has directly relevant experience working on NSP-funded projects.

Demonstrated adequacy of project manager workload.

Applicant proposes to dedicate 70% of the project manager’s time to the project.

Experience with Federal Program Requirements Requirements may include, but are not limited to, such items as: rehabilitation standards, compliance with program income (revenue) reuse; environmental review, quarterly performance and

Applicant has successfully completed NSP funded activities in compliance with Federal requirements. Supplemental information provided by the applicant documents the qualifications of its appraisers, home and lead inspectors, lead-

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expenditure reports, fair housing in marketing, Annual Section 3 reports, compliance with Uniform Relocation Assistance and Real Property Acquisition Policies Act, anti-discrimination laws, lead-based paint procedures, equal opportunity, conflicts of interest.

certified contractors, attorney, construction manager, and real estate team.

General Comments: Regarding Comment Readiness to Proceed Given applicant’s experience and track-record utilizing NSP

funds in DuPage County, it is expected that DHA would be able to begin work in Kane County immediately and complete projects quickly.

DHA

711 Roosevelt Rd. Wheaton , IL. 60187Phone (630) 346-1326 Fax (630) 355-6990

Kane County Development andCommunity Services Department

Proposal Request for:

NeighborhoodStabilization

Program(NSP)

• KANE COUNTY DEVELOPMENT AND COMMUNITY SERVICES DEPARTMENTREQUEST FOR PROPOSALS : NEIGHBORHOOD STABILAZATION PROGRAM

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1. Confirmation of Interest A letter from the Executive Director or DevelopmentDirector of the firm confirming interest in completing a project in Kane County, andoutlining any major conditions to that interest. Please identify a single contact person atthe responding firm for future correspondence. 2. Identification of Development TeamLead Development Entity:

1. I, John Day being the Executive Director of DuPage Housing Authority (DHA)confirm that DHA has an interest in the Neighborhood Stabilization Program in KaneCounty. We are a not for profit corporation whose interest is to provide low to moderateincome families affordable housing. We are currently part of the DuPage County NSPprogram and have one of the highest ratings of success in the country.

Organization name, address, telephone and fax numbers, e-mail address, andweb site address

a) DuPage Housing Authority ,711 Roosevelt Road, Wheaton 11.60187Phone# 630 346 1326 Fax# 630 355 6990Email: oedenmanor395(@sbcglobal.net Website: dupagehousing.org

Contact name, title, e-mail address, and phone number

Don DemetryManaging BrokerOgden manor395Ca) sbcglobal.net630- 346-1326

Specify the legal form of the organization (e.g., corporation, partnership, joint venture,not-for-profit, other).

Not For Profit

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• List officers, partners or owners by name and distribution of ownership,Including all joint-venture or limited partners with whom the County may have contact.

John Howlett Counsel LegalArthur P. Donner ChairmanJohn E. Day PresidentPamela Fenner Vice ChairWoodrow Broaders Commissioner

2. Lead Development Entity:

a) Don Demetry,Ogdenmanor395(cDsbcglobal.net630-346-1326

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Development team:a) To be established with an emphasis on Kane County residents

Other Team Members

For each team member : name , address, phone and fax numbers , e-mailaddress , role in project , and contact person . Include architects, civil and structuralengineers , property management firm, real estate agents and financial consultants, asapplicable.

a) All other team members will be chosen in the future . Our goal is to useKane County people to do the bulk of the work therefore stimulating the economy withinKane County. This will include plumbers, electricians, carpenters, etc. The homes willbe purchased by DHA. Our experience with buying foreclosed homes, discounts withseveral assets companies , and HUD along with our extensive knowledge of rules andregulations set forth by HUD will allow us to purchase the maximum number of homeswith the funds available.

Provide resumes for all team members, including the proposed project manager.Resumes must list experience with all aspects of affordable housing development.

a) Resume for project manager Don Demetry attached

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• PLEASE NOTE: The County will give priority to proposals where there exists a workingpartnership between several entities to create a more comprehensive project. 3.Relevant Development Experience and Development Capacitya. Lead Development Entity

3.Relevant Development Experience and Development Capacity;

In Dupage County we have established partnerships and working relationshipswith the County, Community Development, Habitat for Humanity, we would expect toduplicate and enhance this in Kane County.

a) Lead Development Entity:Don DemetryOgden manor395 aCDsbcglobal.net630-346-1326

Describe experience in acquiring (with an emphasis on foreclosed properties) andrehabilitating, at least three comparable affordable homeownership housing projects inIllinois, with emphasis on the precise role that entity played in the development. No5 project placed in service earlier than January 1, 2005 should be included. Thedescription should focus on projects which show experience in terms of:Successfully acquiring (with an emphasis on foreclosed properties) and rehabilitating,

• for home ownership housingUtilizing public financing mechanismsCreating affordable housing

a) DHA has acquired eight foreclosed homes to date for the NSP program inDuPage County. We have rehabbed and sold three of these homes alreadythe other five are currently under rehab and will be up for sale in thirty to sixtydays. Our goal is to complete 12 to 15 homes.

b) We have been in the affordable housing business since 1946. We havecreated affordable housing for thousands of families for over 60 years.

Development Capacity:

Applicants should list all projects currently in predevelopment, preconstruction, andconstruction, listing the name and location of the project, unit count, and type of housingdevelopment (rental, owner, special needs, mixed use). Applicants should list thenames of the project managers for each project, and should list the name of the staffperson who will be designated as project manager for the proposed program in KaneCounty, and the percentage of that person's time that will be dedicated to the program.b. Other Team Members (if applicable):

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• a) DuPage County NSP program(see attachment)

b) Don Demetry will be the project manager of the Kane County project and canDedicate 70% of his time to the project. This will be more than enough time toget the job done,

c) Other Team MembersN/A: Team members to be established at a later date. These members will be

chosen with the goal to stimulate job growth in Kane County.

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Include description of relevant residential experience for each team member. Thisshould include project location , type of units , number of units, percentage of affordableunits, dates of projects , and clients.

4. Financial Capacity of the Developer

Team submittals shall provide evidence that the lead development entity has thefinancial capacity to pursue successfully, and complete, in a timely manner, anacquisition, rehabilitation, and resale project. Submission of the required auditedfinancial statements will suffice for this purpose.

a) See financial information as attached.

Lead Entity:

Applicants shall submit audited financial statements for 2007 and 2008 for thedeveloper (and any partners) and all proposed affiliated organizations, and a statementof financial condition (unaudited, if audited statement is not available) for 2009 for thedeveloper (and any partners) and all proposed affiliated organizations. This statementshould show current obligations, guarantees , contingent liabilities , or other financialcommitments which restrict the entity from providing completion guarantees, operatingdeficits, and guarantees which may be reasonably required by the County. If anindividual person or persons is or are proposed to offer financial guarantees, auditedfinancial statements or personally signed financial statements are required in addition tothat of the developer.

0 a) All audited financial statements are attached

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If lead is a subsidiary , please provide financial statements of the parent company

a) N/A

Is lead entity or any named individual in the project involved in any litigation or disputesthat could result in a financial settlement having a materially adverse effect on the abilityto execute the project?

a) NO

Has entity or individual in the proposed project team ever filed for bankruptcy or hadprojects that have been foreclosed ? If yes, list dates and circumstances.

a) NO

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5. Affirmative Fair Marketing Plan

Please provide a marketing plan detailing how the resale of the residential units will behandled.

a) We will use local newspapers to inform the public of the program andto advertise the properties available.

b) We will develop a Flier (a revamp of the flier successfully utilized inDuPage county -See attachment) to be placed in all Kane Countymunicipal buildings.

c) We will utilize all applicable websites for housing.

d) We will provide all information to the Multiple Listing Service.Informing the local realtors of the NSP program and to educate themas to the rules and regulations set forth by HUD.

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6. Project Budget Please provide a project budget that includes acquisition,• rehabilitation , developer fees, and all other cost associated with this project.

a) At this point it is difficult to project a budget not knowing the amount offunds available to me. However I have already done a CompleteMarket Analysis of the target areas and acquiring and rehabilitationshould fall somewhere between $120 , 000 and $140,000 dependingon the purchase price of the property.

b) Development fees would be 10% as HUD regulations allow.

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7. Schedule of PerformanceSubmittals shall include a preliminary schedule for development of an acquisition andrehabilitation program. The schedule must address the following:

• Foreclosed homes must be under contract no later than September 1, 2010 withrehabilitation costs determined at contract execution.

a) Dedicating all funds by September 1 2010 will not be a problem.There are many homes to choose from and we are very experiencedin obtaining foreclosed properties . In addition I have several assetmanagement companies that give us first opportunity to buy bankowned homes because we are Not For Profit and we are usinggovernment funds . This will save the program money and allow us tobuy more properties.

b) In addition , we are in the process of obtaining a preferred buyerlicense from HUD . This would allow us to have a further discount of10% to 30 % on all HUD owned homes. Once again allowing us tosave more money and acquire additional homes for the program.

• Plan for obtaining property site control.

a) We will obtain deed to property at closing.

Inspection and completion of due diligence investigations of the site

a) All properties will be inspected by DHA before an offer is made. If weneed additional inspectors we will hire them as need be.

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Preparation of rehabilitation design plans and obtaining County/local permits.

a) Design plans will be done by DHA or contractor. All permits will beobtained by DHA.

Commencement and completion of rehabilitation

a) Rehab will commence within 2 days of obtaining permits andcompletion will be different for each property on average 60 to 90days.

Timeline and process for resale of rehabbed properties.

a) The first properties will take about 90 to 120 days. This time framewill reduce as advertising, communication within the communityand visible signs of job growth and economic development in theCounty is seen.. In Dupage we have had homes under contractbefore rehab was complete.

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8. References

a) DuPage County Community Development ( letter attached)b) Mb financial

George Clam847-653-1232 [email protected]

c) Home DepotGary Hoffman630-408-5492 [email protected]

a. Developer:

Developer candidates must provide three references. In providing references, pleaseprovide name, title, organization, phone number, e-mail address, and the name of thedevelopment with which the reference is familiar.b. Other Team Members (if applicable)

Include names , titles, organization , phone numbers, and e -mail addresses for at leastthree owners that member has worked with on a housing development or acquisitionand rehabilitation project.

a) See above references

0b) N/A

DON DEMETRY6730 Rt. 83 Cell: 1-630-364-1326

Darien, IL. 60561 Email: [email protected]

Profile: Professional with a unique combination of business and Government

experience, bringing to the table the ability to combine business development

with an understanding of all aspects of government policies.

Experienced real estate agent for many years before becoming the managing

broker for DHA Management INC. I have been involved with the NSP program in

DuPage County for just under a year.

Professional Goals include continuing to grow in leadership and knowledge, excel

in providing low income housing for as many deserving people as I can.

• Education

June 1996 Real Estate License

March 2007 Brokers License

Experience

Real Estate/Broker/NSP

• Bought and sold houses as a Real Estate Agent for over 10 years

• Have overseen Real Estate Agents as a broker for over 3 years

• Worked with Section 8 housing and HUD• Have excelled with the NPS program in DuPage County

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•Oportunidad para ser dueno de casa

Special New ProgramNeighborhood Stabilization Program (NSP)DuPage County ispurchasing bank-ownedforeclosed homes andcompletely remodelingthem for sale.

This owner-occupiednew program includes aspecial financingplan that can save youmoney and help you getthe home of yourdreams!

Homes For Sale Now:

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ffeww-e- -r

-Homeownershipcmu-

El Condado de DuPage estacomprando casas que sonpropiedad de los bancosdespues de una ejecucionhipotecaria, y las estaremodelando completamentepara ponerlas a la yenta.Este nuevo programa, en elque el residente de la casadebe ser el dueno, iincluyeun plan de financiamientoespecial que puede ahorrarledinero y ayudarle a obtenerla casa de sus sueiios!

To Qualify For This Program call 630 -260-2500Call Don Demetry to View Homes for Sale : 630346-1326

If you call and need to speak with someone in Spanish, you will be connectedwith someone who can assist you

Si llama y necesita hablar con alguien en espanol, lo comunicaremoscon quien pueda ayudarle

You may also visit www . dhoc . org or httm ://www.dupaaeco .orglcdc orhttp://www hud gov/offices/cod/communidevelopmenVprograms/neighborhoodsou/

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DUPAGE HOUSING AUTHORITY

FINANCIAL STATEMENTS ANDSUPPLEMENTAL INFORMATION

YEARS ENDED JUNE 30, 2009 AND 2008

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DUPAGE HOUSING AUTHORITYTABLE OF CONTENTS

YEARS ENDED JUNE 30 , 2009 AND 2008

Contents

Independent Auditor's Report

Management's Discussion and Analysis

Financial Statements;Statements of Net AssetsStatements of Revenues, Expenses, and Changes in Net AssetsStatements of Cash Flows

Notes to Financial Statements

Independent Auditor's Report on Internal Control over FinancialReporting and on Compliance and other Matters Based on anAudit of Financial Statements Performed in Accordance withGovernment Auditing Standards

Independent Auditor's Report on Compliance with RequirementsApplicable to Each Major Program and Internal Control OverCompliance in Accordance with OMB Circular A-133

Schedule of Expenditures of Federal Awards

Notes to Schedule of Expenditures of Federal Awards

Schedule of Findings and Questioned Costs

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1-2

3-8

910

11-12

13-25

26-27

28-29

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32-33

TT FALLON & LARSEN LLPCertified Public Accountants

1390 Route 36, Suits 102Mulct, New Jersey 07730-1716

Telephone: (732) 888-2070Fan (732) 888.6245

INDEPENDENT AUDITOR'S REPORT

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The Board of CommissionersDuPage Housing Authority:

We have audited the accompanying financial statements of the DuPage Housing Authority ("the Authority") as ofand for the years ended June 30, 2009 and 2008 , as listed in the table of contents. These financial statements arethe responsibility of the Authority's management . Our responsibility is to express an opinion on these financialstatements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of Americaand the standards applicable to financial audits contained in Government Auditing Standards , issued by theComptroller General of the United States. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements . An auditalso includes assessing the accounting principles used and significant estimates made by management , as well asevaluating the overall financial statement presentation . We believe that our audits provide a reasonable basis forour opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financialposition of the DuPage Housing Authority as of and for the years ended June 30, 2009 and 2008, and the changes infinancial position and cash flows for the years then ended in conformity with accounting principles generallyaccepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated November 1, 2009, onour 66didera "ion of Die Thfl a Hods mg Authority'siiiteinal"control -oveifinanaial repbttiiig and 6&fisis on itscompliance with certain provisions of laws, regulations , contracts, and grant agreements and other matters. Thepurpose of that report is to describe the scope of our testing of internal control over financial reporting andcompliance and the results of that testing, and not to provide an opinion on the internal control over financialreporting or on compliance . That report is an integral part of an audit performed in accordance with GovernmentAuditing Standards and important in assessing the results of our audit.

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INDEPENDENT AUDITOR'S REPORT (continued)

The Management's Discussion and Analysis contained on pages 3 through 8 is not a required part of the financialstatements but is supplementary information required by accounting principles generally accepted in the UnitedStates of America We have applied certain limited procedures, which consisted principally of inquiries ofmanagement regarding the methods of measurement and presentation of the supplementary information. However,we did not audit the information and express no opinion on it.

Our audit was performed for the purpose of forming an opinion on the financial statements of the DuPage HousingAuthority. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additionalanalysis as required by the U.S. Office of Management and Budget Circular A-133, Audits of States, LocalGovernments, and Non-Profit Organizations and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the audit of the financial statements and, in ouropinion , is fairly stated , in all material respects, in relation to the financial statements taken as a whole.

November 1, 2009Hazlet, New Jersey

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MANAGEMENT 'S DISCUSSION AND ANALYSIS

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DUPAGE HOUSING AUTHORITYManagement 's Discussion and Analysis

June 30, 2009

As Management of the DuPage Housing Authority ('the Authority), we offer readers of the Authority'sfinancial statements this narrative overview and analysis of the financial activities of the Authority for thefiscal year ended June 20, 2009 . We encourage readers to consider the information presented here inconjunction with the Authority's financial statements as presented elsewhere In this report.

Financial Highlights

The assets of the Authority exceeded its liabilities at the close of the fiscal year 2009 by $4 , 542,974 (netassets).

The Authority 's cash and cash equivalents balances ( including restricted and unrestricted ) at June 30,2009 was $4,267 , 067 representing a decrease of $493 ,492 from June 30, 2008.

The Authority had intergovernmental revenues of $24,672,083 from HUD operating grants , $326,150 fromtenant revenues and $907,705 from other revenue sources for the year ended June 30, 2009.

Using the Annual Report

1.Managements Discussion and Analysis

The Management's Discussion and Analysis is intended to serve as an introduction to the Authority'sbasic financial statements . The Authority 's Basic Financial Statements and Notes to FinancialStatements Included In this report were prepared in accordance with General Accepted AccountingPrinciples ('GAAP' ) applicable to governmental entities in the United States of American for ProprietyFund types.

2. Basic Financial Statements

The basic financial statements are designed to provide readers with a broad overview of the Authority'sfinances, in a manner similar to a private-sector business . They consist of Statements of Net Assets,Statements of Revenues , Expenses and Changes in Net Assets and Statements of Cash Flows.

The Statements of Net Assets present information on all the Authority's assets and liabilities, with thedifference between the two reported as net assets. Increases or decreases in net assets will serve as auseful indicator of whether the financial position of the Authority Is Improving or deteriorating.

The Statements of Revenues, Expenses and Changes in Net Assets present information showing howthe Authority's net assets changed during the most recent fiscal year. All changes in net assets arereported as soon as the underlying event giving rise to the change occurs, regardless of the timing ofunrelated cash flows. Thus, revenues and expenses are reported in this statement for some items thatwill only result In cash flows in future fiscal periods (e.g., depreciation and earned but unused vacationleave).

The Statements of Cash Flows report the cash flows from operating , investing , capital and relatedfinancing activities.

The Basic Financial Statements report on the Authority's activities. The activities are primarily supportedby HUD subsidies and grants . The Authority's function is to provide decent, safe and sanitary housing tolow income and special needs populations.

The Basic Financial Statements can be found on Pages 9 through 12 in this Report.

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DUPAGE HOUSING AUTHORITYManagement's Discussion and Analysis

June 30, 2009

3. Notes to Financial Statements

The Notes to Financial Statements provide additional information that is essential to a full understandingof the data provided In the Basic Financial Statements . The Notes to Financial Statements can be foundin this Report after the Basic Financial Statements.

4. Supplemental Information

The schedule of expenditures of Federal awards is presented for purposes of additional analysis asrequired by U.S. Office of Management and Budget Circular A-133 . Audits of States, Local Governmentsand Non-profit Organizations . The Schedule of Expenditures of Federal Awards can be found on page 30of this report.

The Authority as a Whole

The Authority's Net Assets decreased during the fiscal year as detailed on page 5. The Authority'srevenues are primarily subsidies received from HUD and tenant rent. The Authority receives subsidieseach month based on a pre -approved amount by HUD. The Authority' s revenues and reserves weresufficient to cover all expenses , excluding depreciation during the fiscal year.

By far, the largest portion of the Authority's net assets reflects its investment in capital assets (e.g., land,buildings, equipment and construction In progress). The Authority uses these capital assets to providehousing services to its tenants ; consequently , these assets are not available for future spending. Theunrestricted net assets of the Authority are available for future use to provide program services.

Significant account changes from 2008 to 2009 are detailed as follows:

• HUD Operating Grants decreased $1,598 ,895 (from $26 , 270,978 in 2008 to $24 , 672,083 in 2009)primarily because the Authority was overfunded in the voucher program in prior years.

• Capital assets (net) decreased $413,823 as the Authority's depreciation expense of $533,585exceeded their capital asset additions of $119,762. Assets refired amounted to $230,407.

• Long term debt decreased $211,178 as the Authority borrowed $50 ,000 in their business activities....program, which was offset by.the_ paydown of$261,178 .in.other- Interest bearing .debt.

• Operating Expenses increased $346,166 primarily due to the following:

1) Administrative expenses decreased $118,724 due to payroll and benefit costs that were reducedby not replacing retirees and certain employees.

2) Utility expenses decreased $12,584 due to reduced usage at Ogden Manor Apartments.

3) Ordinary maintenance and repairs for Ogden Manor Apartments totaled $187,735 for 2008 asopposed to $168,385 for 2009.

4) Housing assistance payments Increased by $440,734 due to additional families being served.

The tables on pages 5 and 6 illustrate the changes in asset , liability, revenue and expense accountsrespectively.

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DUPAGE HOUSING AUTHORITYManagements Discussion and Analysis

June 30, 2009

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Entity Wide Assets, Liabilities and Net Assets Comparison

Current assets:Cash and cash equivalents $Accounts receivable - other governmentAccounts receivable - mistAccounts receivable - fraud recov. NetPrepaid expensesCurrent portion of note receivable

Total current assets

FYE 2009 FYE 2008 Change

415,260 $ 31,036 $ 384;22444,014 46,295 (2.281)11,400 265,886 (254,486)

174,819 118,904 55,91566,721 66,721

2,250 3,000 (750)

714,464 465,121 249,343

Capital assets:LandBuildingsFurniture and equipmentConstruction In progressAccumulated depreciation

Total capital assets

Restricted cashNote receivable , net of current portioOther assets '

Total assets

Current Llabititles:Accounts payableAccrued compensated absencesTenant security depositsCurrent portion of long term debtOther current liabilities

Total current liabilities

Long term debt , net of current portionAcariiadcoiinpehsated absence'sOther liabilities

Total liabilities

Net assets:Invested In capital assets (net)

RestrictedUnrestricted

Total net assets

1,495,000 1,495,000 -

14,114.602 14,098,641 15,961366,037 555,685 (189,628)

1,843,050 1,780,028 63,0221 5(.98,961 ) (1,295,783) (303,178)

16,219,728 16,633,551 (413,823)

3,851,807 4,729 ,523 (877,716)21,500 21,500 -

374,357 652 ,580 (278,223)

$ 21,181 ,856 $ 22 ,502,275 S (1,320,419)

36,322 $ 50.870 $ ( 14,548)249,103 37 ,614 211,489

33,160 , 31,036 2,124860,574 911,178 (50,604)414,053 272,634 141,419

1,593,212 1,303,332 289,880

14,618,262 14,778,836 (160,574)172,846 - - 338,328 - . (165,682)254,562 403,642 (149,080)

16.638,882 18 824 ,338 (185 ,456)

740,892 943,537 (202,645)

3,408,602 4 ,312,667 (904,065)

393,480 421,733 (28,253)

4,542 ,974 5,677,937 (1.134,963)

Total liabilities and net assets $ 21,181 ,856 $ 22 ,502,275 $ (1,320,419)

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Management's Discussion and AnalysisJune 30, 2009

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fl Entity Wide Revenue , Expenses and Change in Net Assets ComparisonlI

FYE 2009 FYE 2008 Change

iiOperating revenues:

Tenant revenue $ 326,150 $ 317,642 $ 8,508HUD operating grants 24,672,083 26 ,270,978 ( 1,598,895)

l Fraud recoveryOther revenues

224,560

683,145

118,284

509 , 140106,276

174,005

Total operating revenue 25,905 ,938 27 , 216,044 (1,310,106)

1Operating expenses:

Administrative 2,752,298 2,871,022 (118,724)i Tenant services 75,895 76 ,875 (980)

Utilities 56,544 69,128 (12,584)Ordinary maintenance and operation 168,385 187 , 735 (19,350)Protective services 7,129 7,156 (27)General expenses 116,069 49,361 66,708Housing assistance payments 22,646 ,937 22 ,206,203 440,734Depreciation 533,585 543 , 196 (9,611)

Total operating expense 26,356 ,842 26,010,676 346,166

Operating loss 45( 0,904) 1,205,368 (1656,272)1

i Non-operating revenues (expenses):Interest Income 23,281 94 ,243 (70,962)

E4Interest expense---- - 7(07;340) - - (732;817) 25,477

Net non-operating revenues (684 ,059 (638,574) (45,485)

^.1 Change in net assets (1,134,963) 566,794 (1,701,757)

r Net assets, beginning of year 5,677,937 5 , 111,143 566,794l

Net assets , end of year $ 4,542 , 974 $ 5 677 937 $ ( 1 134 963)r

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DUPAGE HOUSING AUTHORITYManagement 's Discussion and Analysis

June 30, 2009

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Budgetary Highlights

For the year ended June 30, 2009 individual program budgets were prepared by the Authority andwere approved by the Board of Commissioners . The budgets were primarily used as managementtool and have no legal stature . Also, the Authority adopted a comprehensive annual budget. Thebudgets were prepared In accordance with the accounting procedures prescribed by the applicablefunding agency.

Capital Assets and Debt Administration

1. Capital Assets

As of June 30, 2009 the Authority's Investment In capital assets, net of related debt was $2,205,318.This Investment in capital assets includes land, buildings , equipment and construction in progress.

Additional Information on the Authority's capital assets can be found in the Notes to the FinancialStatements, which Is Included In this report.

2. Long Term Debt

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The Authority Issued $12 . 14 million in bonds through the Illinois Housing Development Agency for thepurchase of Ogden Manor Apartments in January 2007 . The Authority makes monthly payments of$61,708 including interest at 5.39%.

The Authority maintains interest-bearing debt as follows:

DescriptionJune 30

' 2008 AdvancesPrincipalPayments

June 302009

Line of Credit $650, 000 $50 , 000 $700.000

Ogden Manor Bonds $12,013 ,460 ($95.308) $11 .918.152

2nd Mortgage Loan $138 ,418 $138,418

3id Mortgage Loan $185.834 $185.834

Mortgage Loan $235 ,000 $235,000

Mortgage Loan $750,000 $750.000

6' Mortgage Loan $216,432 $216,432

Tax-Exempt Bonds $60 ,870 ($60,870)

Series 2003 Bonds $1.440 :000 ($105,000 $1,335,000

$16 .690 . 014 $50.000 ($261 , 178) $15 ,478, 836

For more details on the Authority's long term debt, please refer to Note 9 of the financial statements.

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DUPAGE HOUSING AUTHORITYManagement's Discussion and Analysis

June 30, 2009

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Economic Factors and Next year 's Budget and Rates

The following factors were considered In preparing the Authority 's budget for the fiscal year ending June30, 2010.

1. The need for congress to fund the war on terrorism and the possible cutback on HUD subsidies andgrants.

2. The lack of Unrestricted Net Assets to fund any shortfalls rising from a possible economic turndownand reduced subsidies and grants.

Contacting the Authority 's Financial Management

The financial report is designed to provide a general overview of the Authority 's finances for all those withan interest Questions concerning any of the information provided in this report or requests for additionalfinancial information should be addressed to the President , DuPage Housing Authority, 711 EastRoosevelt Road , Wheaton, Illinois 60187, or call (630) 690-3555.

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DUPAGE HOUSING AUTHORITYSTATEMENTS OF NET ASSETSAS OF JUNE 30, 2009 AND 2008

ASSETS

2009 2008

Current assets:Cash and cash equivalents $ 415,260 $ 31,036Accounts receivable, net 230,233 431,085Prepaid expenses 66,721 -Current portion of notes receivable 2.250 3.000

Total current assets 714,464 465,121

Capital assets, net 16,219,728 16,633,551Restricted cash 3,851,807 4,729,523Notes receivable, net of current portion 21,500 21,500Other assets 374.357 652580

Total assets $ 21.181.856 $ 22.502.275

LIABILITIES AND NET ASSETS

Current liabilities:Accounts payable $ 36,322 $ 50,870Accrued compensated absences, current 249,103 37,614Tenant security deposits 33,160 31,036Current portion of long-term debt 860,574 911,178Other current liabilities 414.053 272.634

It1 Total current liabilities 1,593 ,212 . 1.303332

Noncurrent liabilities:Long-term debt;-net-of current portion 14;618x62 14,778,836 -Accrued compensated absences, noncurrent 172,846 338,528Other liabilities 254.562 403,642

Total noncurrent liabilities 15.00.670 15,521.006

Net assets:Invested in capital assets , net of related debt 740,892 943,537Restricted 3,408,602 4,312,667Unrestricted 393.480 421.733

Total net assets 4.542.974 5.677.937

Total liabilities and net assets

See accompanying notes to financial statements

$ 21.181.856 $ 22.502.275

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DUPAGE HOUSING AUTHORITYSTATEMENTS OF REVENUES , EXPENSES

AND CHANGES IN NET ASSETSYEARS ENDED JUNE 30 , 2009 AND 2008

2009 2009i irr

Operating revenues:Tenant revenue $ 326,150 $ 317,642HUD operating grants 24,672,083 26,270,978Other government grants - 10,649Fraud recovery 224,560 118,284Other revenue 683.145 498.491

Total operating revenues 25.905 .938 27.216.044

Operating expenses:Administrative 2,752,298 2 ,871,022Tenant services 75,895 76,875Utilities 56,544 69,128Ordinary repairs and maintenance 168,385 187,735Protective services 7,129 7,156Insurance expense 54,516 39,868Other general expenses 61,553 9,493Housing assistance payments 22,646,937 22,206,203Depreciation 533.585 543.196

Total operating expenses 26.356.842 26.010676

Operating income (loss) (450 ,904) 1 .205.368

Non-operating revenues (expenses):Investment income 23 ,281 94,243Interest expense (707.340) (732.817)

14Net -non-operating expenses - (684.059) (638574)

Change in net assets (1.134.963) 566.794r

^i Total net assets, beginning of year 5.677.937 5.111.143

r Total net assets , end of year $ 4 .542.974 $ 5 .677,937

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DUPAGE HOUSING AUTHORITY&TATEMENTB OF CASH FLOWS

YEARS ENDED JUNE 30, 2009 AND 2008

2002 2

F

Cash Flows from Operating Activities:Cash received from tenants and program participants $ 1,233,855 $ 934,417Cash received from grantors and other governments 24,872,935 26,241,464Cash paid to suppliers (24,096,420) (23,715,187)Cash paid to employees (1.489.613) (1.608.048)

Net cash flows provided by operating activities 520.757 1.852.646

Cash Flows from Capital and Related Financing Activities:Principal paid on capital debt (261,178) (365,263)Proceeds on issuance of debt 50,000 650,000Interest paid on capital debt (707,340) (732,817)Proceeds on repayment of note receivable 750 1,500Purchase of capital assets (119.762) (157.046)

Net cash flows used by capital and relatedfinancing activities (1.037.530) (603.626)

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Cash Flows from Investing Activities:Proceeds from investment in joint ventureInvestment income

732,06823.281 94.243

23.281 826311

(493,492) 2,075,331

4.760.559 2.685.228

$ 4.2^ 67 $ 4.760.559

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Net cash flows provided by investing activities

Net increase (decrease) in cash

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Reconciliation of cash and cash equivalents toStatement of Net Assets:

Cash and cash equivalents $ 415,260 31,036Restricted cash 3.851.807 4.729.523


2. 6 4.760359

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STATEMENTS OF CASH FLOWS (continued)YEARS ENDED JUNE 30, 2009 AND 2008

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Reconciliation of operating income (loss) tonet cash provided by operating activities:

Operating income (loss) $ (450,904) $ 1,205,368

t! Items which did not use cash:Depreciation 533,585 543,196

Changes in operating assets and liabilities:Accounts receivable 200,852 (134 861)

1 1 Prepaid expenses (66,721 ),

20,945Accounts payable (14,548) (23,979)Accrued expenses - (20,760)Accrued compensated absences 45,807 (17,372)Tenant security deposits 2,124 2,228Other assets 278,223 81,416Otherliabilities (7.661) 196.465

Net cash provided by operating activities 520.757 $ 1.852.646

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Schedule of Non-cash Capital and RelatedFinancing Activities:

Financed acquisitions:Fixed assets $ _ 13.214.704Bond issue costs $ - $ 250.400Bond reserve accounts $ $ 200.580

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DUPAGE HOUSING AUTHORITYNOTES TO FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2009 AND 2008

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Organization

The DuPage Housing Authority ("the Authority") is a governmental , public corporation createdunder federal and state housing laws for the purpose of engaging in the development , acquisitionand administrative activities of the low-income housing program and other programs with similarobjectives for low and moderate income families residing in DuPage County, Illinois ("theCounty"). The Authority is responsible for operating certain low-rent housing programs in theCounty under programs administered by the U.S. Department of Housing and Urban Development("HUD"). These programs provide housing for eligible families under the United States HousingAct of 1937, as amended.

The Authority is governed by a board. of commissioners which is essentially autonomous but isresponsible to the United States Department of Housing and Urban Development ("HUD"). Apresident is appointed by the Authority 's board to manage the day-to-day operations of theAuthority.

The Authority maintains its accounting records by program . A summary of the significantprograms operated by the Authority is as follows:

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Housing Choice Vouchers ProgramThe Authority administers a program of rental assistance payments to private owners on behalf ofeligible low-income families under Section 8 of the Housing and Urban Development Act of 1974.The program provides payments covering the difference between the maximum rental on adwelling unit, as approved by HUD , and the amount of rent contribution by a participating family.

Section 8 New Construction Substantial Rehabilitation ProgramOn January 2, 2007, the Authority purchased a 108 unit development known as Ogden ManorApartments ("the Project"). The Project receives a housing assistance payment contract throughHUD. The Project was purchased through the Issuance of $12.14 million in bonds and $1.525million in other state and local government loans.

The Section 8 New Construction and Substantial Rehabilitation program allows for theconstruction , purchase , and rehabilitation of low-income housing units to be subsidized for acontacted period of time . Both for profit and not-for-profit developers may provide low-incomehousing under this program . Developers must obtain their own financing and HUD subsidizesrents once the units are occupied.

Business ActivitiesThe Authority has used Section 8 reserves to further its mission through the construction ofadministrative and housing related facilities if permitted by HUD.

State and Local ProgramThe Authority administers a Rental Housing Support Program ("RHSP") through the IllinoisHousing Development Authority. RHSP provides rental assistance payments to low incomeindividuals.

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

B. Reporting Entity

In accordance with statement No. 39 Government Accounting Standards Board ("GASB"), theAuthority's financial statements include those of the DuPage Housing Authority and anycomponent units. Component units are legally separate, tax-exempt organizations that meet all ofthe following criteria:

1. The economic resources received by the separate organization are almost entirely for the directbenefit of the Authority.

2. The Authority has the ability to access a majority of the economic resources held by the separateorganization.

3. The economic resources referred to in No. 2 are significant to the Authority.

Based upon the application of these criteria, this report includes the blended presentation of thefollowing component units:

DHA management Inc, MM") - DM was established to provide property management services tolandlords in and around DuPage County.

DHA Investment Inc. ("DI") - DI was established to invest in and or finance the development ofaffordable housing in and around DuPage County.

DHA Development Inc. ("DD") - DD was established to develop affordable housing in and aroundDuPage County.

Furthermore, the Authority is not included in any other reporting entity on the basis of suchcriteria.

C. Basis of Accounting

The Authority 's financial statements are prepared in accordance with accounting principlesgenerally accepted in the United States of America ("GAAP"). The Governmental AccountingStandards Board ("GASB ") is responsible for establishing GAAP for state and local governmentsthrough its pronouncements (Statements and Interpretations).

The programs of the Authority are organized as separate accounting entities. Each program isaccounted for by a separate set of self-balancing accounts that comprise its assets, liabilities, netassets (program equity), revenues , and expenses . The individual programs account for thegovernmental resources allocated to them for the purpose of carrying on specific programs inaccordance with laws, regulations, or other restrictions , including those imposed by HUD. Thefunds of the Authority are all considered Enterprise Funds that are used to account for activitiesthat are operated in a manner similar to those found in the private sector.

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C. Basis of Accounting (continued)

All enterprise funds are accounted for using the economic resources measurement focus and theaccrual basis of accounting. Revenues, expenses , gains, and losses from assets and liabilitiesresulting from exchange and exchange-like transactions are recognized when the exchange takesplace.

The Authority's primary source of non-exchange revenue relates to grants and subsidies. Inaccordance with GASB Statement No. 33, Accounting and Financial Reporting for Non-exchangeTransactions, grant and subsidy revenue are recognized at the time eligible program expendituresoccur and/or the Authority has complied with the grant and. subsidy requirements.

In accordance with GASB Statement No. 20, Accounting and Financial Reporting for ProprietaryFunds and Other Governmental Activities that Use Proprietary Fund Accounting, the Authorityhas elected to apply all Financial Accounting Standards Board pronouncements , AccountingPrinciples Board Opinions and Accounting Research Bulletins issued that do not conflict with orcontradict GASB Pronouncements.

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On January 30, 2008 , HUD issued PIHNotice 2008-9 which among other things clarifies HUD'sreporting position that unused housing assistance payments ("HAP") under proprietary findreporting should be reported as restricted net assets, with the associated cash and investments alsobeing reported as restricted . Any unused administrative fees should be reported as unrestricted netassets, with the associated assets being reported on the FDS as unrestricted.

Bothadministrative fees and HAP revenue continue to be recognized under the guidelines set forthin GASB Statement No. 33 . Accordingly , bath the time and purpose restrictions as defined byGASB 33 are met when these funds are available and measurable , not when these funds areexpended. The Housing Choice Voucher program is no longer a cost reimbursement grant,therefore the Authority recognizes unspent administrative fees and HAP revenue in the reportingperiod as revenue for financial statement reporting.

Any investment income earned on these funds are reflected in the net asset account on which theinvestment income was earned. That is, investment income earned on HAP cash balances arecredited to the HAP restricted net asset account and investment income earned on administrativefee cash balances are credited to the unrestricted net asset account

D. Cash, Cash Equivalents and Investments

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HUD requires that deposits be fully collateralized at all times. Acceptable collateralization includesFDIC insurance and the market value of securities purchased and pledged to the politicalsubdivision. Pursuant to HUD restrictions , obligations of the United States are allowed as securityfor deposits . Obligations furnished as security must be held by the Authority or with an unaffiliatedbank or trust company for the account of the Authority.

HUD also requires housing authorities to invest excess funds in obligations of the United States,Certificates of Deposit or any other federally insured investment.

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D. Casty Cash Equivalents and Investments (continued)

For the Statement of Cash Flows, cash and cash equivalents include all cash balances and highlyliquid investments with a maturity of three months or less at time of purchase.

It is the Authority's policy to maintain collateralization in accordance with state and HUDrequirements.

E. Accounts Receivable

The Authority recognizes a receivable from Housing Choice Voucher program participants forrepayment agreements and other charge backs. An allowance for doubtful accounts is established toprovide for all accounts, which may not be collected in the future for any reason. Collection losseson accounts receivable are charged against the allowance for doubtful accounts.

The Authority also recognizes a receivable from HUD and other governmental agencies foramounts billed but not received and for amounts unbilled, but earned as of year-end.

F. Prepaid Expenses

Prepaid expenses represent amounts paid as of year-end that will benefit future operations.

G. Capital Assets

Fixed assets are stated at cost . Expenditures for repairs and maintenance are charged directly toexpense as they are incurred . Upon the sale or retirement of capital assets, the cost and relatedaccumulated depreciation is eliminated from the accounts and any related gain or loss is reflectedin the Statement of Revenues , Expenses and Changes in Net Assets. Expenditures determined torepresent additions or betterments are capitalized . Depreciation is calculated using the straight-linemethod based on the estimated useful lives of the following asset groups:

• Fixtures and equipment 5 Years• Site improvements 15 Years• Buildings 40 Years

The Authority has established a capitalization threshold of $1,000.

H. Taxes

The Authority is a unit of local government under Illinois state law and is exempt from real estate,sales and income taxes.

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( continued)

L Inter-program Receivables and Payables

Inter-program receivables/payables are current , and are the result of the use of the Section 8Program as the common paymaster for shared costs of the Authority . Cash settlements are madeperiodically, and all inter-program balances net zero. In accordance with GASB Statement No. 34,interprogram receivables and payables are eliminated for financial statement purposes.

J. Operating Revenues and Expenses

The Authority defines its operating revenues as income derived from charges to residents andothers for services provided, as well as government subsidies and grants used for operatingpurposes . Operating expenses are costs incurred in the operation of its program activities toprovide services to residents and others . The Authority classifies all other revenues as non-operating.

K. Use of Management Estimates

The preparation of financial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimates and assumptionsthat affect certain reported amounts of assets and liabilities , and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period . Significant estimates include the allowance for doubtful accounts,accrued expenses and other liabilities , depreciable lives of properties and equipment andcontingencies . Actual results could differ significantly from these estimates.

L Equity Classifications

Equity is classified as net assets and displayed in three components:

Invested in capital assets, not of related debt - Consists of capital assets including restricted capitalassets, net of accumulated depreciation and reduced by the outstanding balances of any bonds,mortgages, notes, or other borrowings that are attributable to the acquisition, construction orimprovement of those assets.

Restricted net assets - Consists of net assets with constraints placed on the use either by (1) externalgroupp such as creditors , grantors, contributors , laws or regulations of other goverunents; or (2)law through constitutional provisions or enabling legislation.

Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or"invested in capital assets, net of related debt."

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DUPAGE HOUSING AUTHORITYNOTES TO FINANCIAL STATEMENTSYEARS ENDED JUNE 30 , 2009 AND 2008


K Compensated Absences

Compensated absences represent amounts to which employees are entitled to based on accumulatedleave earned in accordance with the Authority's Personnel Policy. Employees may be compensatedfor accumulated vacation leave in the event of retirement or termination from service at the currentsalary. Employees may be compensated for sick leave at retirement or termination at one half ofthe earned, accrued and unused sick leave at the current salary to a maximum of 88 work daysdepending on length of service.

N. Budgets and Budgetary Accounting

The Authority adopts annual operating budgets for all its programs receiving federal expenditureawards. All budgets are prepared on a accrual basis, which is materially consistent with accountingprinciples generally accepted in the United States of America.

0. Economic Dependency

6The Housing Choice Vouchers and the Section 8 New Construction / Substantial Rehabilitationprograms of the Authority are economically dependent on operating subsidies from HUD.

P. Risk Management

Significant losses are covered by commercial insurance for all major programs . There have beenno reductions in insurance coverage . Settlement amounts have not exceeded insurance coverageexcept for deductibles for the past three years.

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NOTE 2. CASH AND CASH EQUIVALENTS

At June 30, 2009 and 2008, the Authority had funds on deposit in checking and money marketaccounts.

For the fiscal years ended June 30, 2009 and 2008, the carrying amount of the Authority' s cash andcash equivalents was $415,260 and $31,036 and the bank balances were $473,333 and $31,036respectively. Cash and cash equivalents consist of the following:

Cash Category 202 2008

ll Operating $ 382,100 $ -Tenant security deposits 33.160 31.036

$ 415.260 $ 31.036

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NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consists of the following at June 30, 2009 and 2008:

2009 2008

Accounts receivable - other government $ 44,014 $ 46,295Accounts receivable - miscellaneous 11,400 265,886Accounts receivable - fraud recovery, net 174,819 118,904

$ 230.233 $ 431.085

Accounts receivable - other government represents housing assistance payments , rental payments,and administrative fees due from portable vouchers . Management estimates that substantially all ofthese receivables are collectable, and as such, has made no provision of uncollectable amounts.

Accounts receivable - miscellaneous consisted of the following at June 30, 2009 and 2008:

2009 2008

Employee reimbursements $ 3,880 $ 3,422Due from Kendall Authority - 10,133Due from Rental Housing Support Program - 10,667Due from Habitat for Humanity - 160,000Real Estate Tax Refund Receivable - 77,272Due from Churchill Woods - 4,392Due from Neighborhood Stabilization Program 6,820Due from MB Financial Bank 700

$ 11.400 $ 2̂65

Management estimates that substantially all of these receivables are collectable and, as such, hasmade no provision of uncollectable amounts.

Accounts receivable - fraud recovery represents amount due from Section 8 tenants for fraudrecovery and are shown net of an allowance for doubtful accounts of $222,498 and $211,277 atJune 30, 2009 and 2008 respectively.

NOTE 4. NOTE RECEIVABLE

Note receivable from an individual in connection with the sale of property located at 916 WestHillside Dr., Bensenville , IL. The loan requires monthly principal only payments of $250 andmaturing in December, 2015. The loan is secured by a first mortgage on the property. Theoutstanding balances at June 30, 2009 and 2008 amounted to $23,750 and $24,500 respectively.

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NOTE 6. CAPITAL ASSETS (continued)

A summary of the changes in capital assets during 2008 is as follows:

rt

ti escription une 30, 2007 dditions

Retirementsand otherdecreases une 30,2008

rr Land S 1 ,495,000 $ - $ - $ 1,495,000tt Buildings 14,099,283 - (642) 14,098,641

Furniture and equipment 555,023 46,143 (45,501 ) 555,665Construction in progress 1.780.028 110.903 (110.903) 1 .780.028

Total capital assets 17,929,334 157,046 (157,046) 17,929,334

Less: accumulated depreciation 1.295.783 543. 196 (543.196) 1.295.783t

Net capital assets $ 16.633.551 $ (386.150) $ 386.]50 $ 633 5

I 'NOTE 7. OTHER ASSETS

Other assets consist of the following at June 30, 2009 and 2008.

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Deferred compensation retirement account $ 139,607 $ 403,642Utility deposit - 7,928Bond issuance costs, net of accumulatedamortization of $21,880 and $15 ,620, respectively. 234.750 241.010

$ 374.357 $ 652.580

Bond issuance costs are being amortized over the life of the bonds (40 years) utilizing the straightline method which is not materially different than the interest method.

NOTE S . COMPENSATED ABSENCES

The Authority uses the vesting method for the recording of compensated absences whereas benefitsare accrued at the balance sheet date for which payment is probable. As of June 30 , 2009 and2008, the Authority had accrued approximately $421,949 and $376,142, respectively.

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NOTE 9. LONG TERM DEBT

Line of credit from a bank in the amount of $750,000. The loanbears an initial interest rate of 4.25%. Payment in full is dueimmediately upon lender's demand.

Note payable to a bank with semi-annual payments of principaland interest at 4.35%. The note matures December 31, 2008.

Two General revenue bonds, Series 2003, in the amount of$900,000 each. The bonds bear interest at 4.06% and matureDecember 31, 2013.

Bonds issued by the Illinois Housing Development Authorityin the original amount of $12,140,000 in connection with thepurchase of Ogden Manor Apartments payable in monthlyinstallments of $61,708 including interest at 5.39%. The bondsmature in January, 2047.

2nd mortgage loan in the original amount of $ 138,418 , payablein forty annual installments of $3,460 .45, subject to availablecash flow . The interest free loan matures January 2, 2048.

3rd mortgage loan in the original amount of $185,834 , payablein forty annual installments of $4,645.85 , subject to availablecash flow. The interest free loan matures January 2, 2048.

4th mortgage loan in the original amount of $235,000. Interestshall not accrue and the loan will be forgiven January 2, 2027if the property is maintained as affordable housing.



Total long-term debt

Less: current portion

Long-term debt , net of current portion

200 21$

$ 700,000 $ 650,000

- 60,870

1,335,000 1,440,000

11,918, 152 . 12,013,460

138,418 138,418

185,834 185,834

235,000 235,000

750,000 750,000

216.432 216.432

15,478 ,836 15,690,014

860.574 911.178

$ 14.618.262 $ 14.778.836

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NOTE 9. LONG-TERM DEBT (continued)

Annual debt service for principal and interest over the next five years and in five year incrementsII thereafter are as follows:

f7 Year Principal Interest Total2009 $ 860,574 $ 705,380 1,565,9542010 272,905 714,564 987,469

ci 2011 283,315 704,587 987,9022012 294,023 694 109 988 132ti2013 321,506

,775,002

,1,096,508

fr 2014-2018 1,832,409 3,177,658 5,010,0672019-2023 1,852,592 3,425,420 2785 012

t 2024-2028 1,435,365 2,541,786, ,

3,977,1512029-2033 1,336,113 2,183,680 3,519,7932034-2038 1,784,748 1,715,090 3,499,8382039-2043 2,882,648 1,101,933 3,984,5812044-2048 2.322.638 314.780 2,637,418

15.478.836 $ 18 .053.989 S_--_3122 .825

Debt service activity for the year ended June 30, 2009 consisted of the following:

Description

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Line of creditOgden Manor bonds2nd mortgage loan3rd mortgage loan4th mortgage loan5th mortgage loan6th mortgage loanTax exempt bondsSeries 2003 bonds

June 30.2008Principal

Advances Payments June 30.2009

$ 650,000 $12,013,460

138,418185,834235,000750,000216,432

60,8701.440.000

50,000 $ $ 700,000(95,308) 11,918,152

138,418185,834235,000

(60,870)(105.0001

750,000216,432

1.335.000

$ 90 014 $ 50.000 $ 2f 61.1781 $15.478.836

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NOTE 9. LONG-TERM DEBT (continued)

Debt service activity for the year ended June 30, 2008 consisted of the following:

PrincipalDescription June 30, 2007 Advances Pavments June 30. 2008

Line of credit $ - $ 650,000 $ - $ 650,000Ogden Manor bonds 12,103,777 - (90,317) 12,013,4602nd mortgage loan 138,418 - - 138,4183rd mortgage loan 185,834 - - 185,8344th mortgage loan 235,000 - - 235,0005th mortgage loan 750,000 - - 750,0006th mortgage loan 216,432 - - 216,432Tax exempt bonds 235,816 - (174,946) 60,870Series 2003 bonds 1.540.000 - (100,000) 1.440,000

$15,405.277 $ 650.000 $ (365.2631 $15.690.014

NOTE 10. OTHER CURRENT LIABILITIES

Other current liabilities consist of the following at June 30, 2009 and 2008:

2009 2008

Family self-sufficiency escrow payable $ 287,981 $ 252,107Homeowner's emergency funds 21,475 20,527State and local landlord payments held 104.597

$ 414.053 $ 272.634

NOTE 11. OTHER LIABILITIES

Other liabilities consist of amounts held in escrow as part of a Section 457 deferred compensationprogram-

NOTE 12. PENSION PLAN

The Authority provides pension benefits for all its full-time employees through a definedcontribution plan. In a defined contribution plan, benefits depend solely on amount contributed tothe plan plus investment earnings. Employees are eligible to participate after the fast 90 days ofemployment. The Authority contributes 15.0% of the employee' s base salary each month, whilethe employee does not contribute.

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NOTE 12 . PENSION PLAN (continued)

The Authority's contributions for each employee (and interest allocated to the employees account)are fully vested after 5 years of continuous service. Authority contributions for, and interestforfeited by, employees who leave employment before vesting are used to reduce the Authority'scurrent-period contribution requirement.

The Authority's total payroll in fiscal year 2009 and 2008 were approximately $1,512,519 and$1,587,288, respectively . The Authority's contributions were calculated using a definedcontribution pension plan. For the years ending June 30, 2009 and 2008 , the Authority's portionapproximated $226,878 and $238,093 , respectively, which has been charged to the employee fringebenefit account.

NOTE 13. RESTRICTED NET ASSETS AND RESTRICTED CASH

Restricted net assets and restricted cash consists of the following at June 30 , 2009 and 2008:

2009 2008

Housing assistance payments reserve (HAP equity) $ 3.408 .602 $ 4.312.667

NOTE 14. CONTINGENCIES

The Authority receives financial assistance from HUD in the form of grants and subsidies.Entitlement to the funds is generally conditional upon compliance with terms and conditions of thegrant agreements and applicable regulations , including the expenditure of the funds for eligiblepurposes . Substantially all grants, entitlements and cost reimbursements are subject to financial andcompliance audits by HUD. As a result of these audits , costs previously reimbursed could bedisallowed and require payments to HUD. As of June 30, 2009 and 2008 the Authority estimatesthat no material liabilities will result from such audits.

NOTE 15. RISK MANAGEMENT

Significant losses are covered by commercial insurance for all major programs, there have been nosignificant reductions in insurance coverage. Settlement amounts have not exceeded insurancecoverage except for deductibles for the past three years.

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FALLON & LARSEN LLP

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Certified Public Accountants

1390 Route 36, Suite 102Hazlet, Now Jersey 07730-1716

Telephone : (732) 888-2070Fax: (732) 988-6245

INDEPENDENT AUDITOR 'S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE RRTH GOVERNMENT AUDITING STANDARDS

To the Board of CommissionersDuPage Housing Authority:

We have audited the financial statements of DuPage Housing Authority ("the Authority") as of and for the yearended June 30, 2009, and have issued our report therein dated November 1, 2009. We conducted our audit inaccordance with auditing standards generally accepted in the United States of America and the standards applicableto financial audits contained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the DuPage Housing Authority 's internal control overfinancial reporting as a basis in designing our auditing procedures for the purpose of expressing our opinion on thefinancial statements, but not for the purpose of expressing an opinion on the effectiveness of DuPage HousingAuthority's internal control over financial reporting. Accordingly, we do not express an opinion on theeffectiveness of the Authority 's internal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow management or employees, inthe normal course of performing their assigned functions , to prevent or detect misstatements on a timely basis. Asignificant deficiency is a control deficiency, or combination of control deficiencies , that adversely affects DuPageHousing Authority's ability to initiate, authorize, record, process or report financial data reliably in accordance withgenerally accepted accounting principles such that there is more than a remote likelihood that a misstatement of theAuthority's financial statements that is more than inconsequential will not be prevented or detected by theAuthority 's internal controL

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more thana remote likelihood that a material misstatement of the financial statements will not be prevented or detected by theAuthority's internal control.

Our consideration of internal control over financial reporting was for the limited purpose described in the firstparagraph of this section and would not necessarily identify all deficiencies in internal control that might besignificant deficiencies or material weaknesses . We did not identify any deficiencies in internal control overfinancial reporting that we consider to be material weaknesses , as defined above.

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INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROLOVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (continued)

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Compliance and Other Matters

As part of obtaining reasonable assurance about whether DuPage Housing Authority's financial statements are freeof material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,contracts and grant agreements , noncompliance with which could have a direct and material effect on thedetermination of financial statement amounts. However, providing an opinion on compliance with those provisionswas not an objective of our audit and, accordingly, we do not express such an opinion. The results of our testsdisclosed no instances of noncompliance that are required to be reported under Government AuditingStandardr.

This report is intended solely for the information of management and the U.S. Department of Housing and UrbanDevelopment, federal awarding agencies and pass-through entities and is not intended to be and should not be usedby anyone other than these specified parties.


27

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6 FALLON & LARSEN LLP

IL

Certified Public Accountants

1390 Route 36, Suite 102Hazlet, New Jersey 07730-1716

Telephone: (732) 008.2070Far (732) 888-6245

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTSAPPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL

OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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The Board of CommissionersDuPage Housing Authority:

Compliance

We have audited the compliance of DuPage Housing Authority ("the Authority") with the types of compliancerequirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 ComplianceSupplement that are applicable to each of its major federal programs for the year ended June 30 , 2009. TheAuthority's major federal programs are identified in the summary of auditor 's results section of the accompanyingSchedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts andgrants applicable to each of its major federal programs is the responsibility of the Authority 's management. Ourresponsibility is to express an opinion on DuPage Housing Authority's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the UnitedStates of America; the standards applicable to financial audits contained in Government Auditing Standards, issuedby the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments,and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform theaudit to obtain reasonable assurance about whether noncompliance with the types of compliance requirementsreferred to above that could have a direct and material effect on a major federal program occurred . An auditincludes examining, on a test basis, evidence about the Authority's compliance with those requirements andperforming , such other procedures, as we considered necessary in the circumstances . We believe that our auditprovides a reasonable basis for our opinion . Our audit does not provide a legal determination on the Authority'scompliance with those requirements.

In our opinion, the Authority complied, in all material respects , with the requirements referred to above that areapplicable to each of its major federal programs for the year ended June 30, 2009.

Internal Control Over Compliance

The management of the Authority is responsible for establishing and maintaining effective internal control overcompliance with requirements of laws , regulations, contracts. and grants applicable to federal programs . In planningand performing our audit , we considered the Authority's internal control over compliance with requirements thatcould have a direct and material effect on a major federal program in order to determine our auditing procedures forthe purpose of expressing our opinion on compliance but not for the purpose of expressing an opinion on theeffectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectivenessof the Authority's internal control over compliance.

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6

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTSAPPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL

OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 ( continued)

F,

A control deficiency in an entity 's internal control over compliance exists when the design or operation of a controldoes not allow management or employees , in the normal course of performing their assigned functions , to preventor detect noncompliance with a type of compliance requirement of a federal program on a timely basis. Asignificant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects theentity's.ability to administer a federal program such that there is more than a remote likelihood that noncompliancewith a type of compliance requirement of a federal program that is more than inconsequential will not be preventedor detected by the entity's internal control.

A material weakness is a significant deficiency , or combination of significant deficiencies, that results in more thana remote likelihood that material noncompliance with a type of compliance requirement of a federal program willnot be prevented or detected by the entity 's internal control.

Our consideration of the internal control over compliance was for the limited purpose described in the fastparagraph of this section and would not necessarily identify all deficiencies in internal control that might besignificant, deficiencies or material weaknesses. We did not identify any deficiencies in internal control over

compliance that we consider to be material weaknesses , as defined above.

This report is intended solely for the information of management and the U.S. Department of Housing and UrbanDevelopment, federal awarding agencies and pass-through entities and is not intended to be and should not be usedby anyone other than these specified parties.


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DUPAGE HOUSING AUTHORITYSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

YEAR ENDED JUNE 30, 2009

rT

Federal Federal CFDA GrantGrantor/Program Title Number Expenditures

U.S. Department of Housing and Urban Development:

Section 8 New Construction Substantial Rehabilitation Program 14.182 $ 999,972Disaster Voucher Program 14.DVP 29,528Section 8 Housing Choice Voucher Program 14.871 25.036.647

26 06• 6.147

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IiDUPAGE HOUSING AUTHORITY

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSYEAR ENDED JUNE 30, 2009

NOTE 1 . BASIS OF PRESENTATION

The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activityof DuPage Housing Authority ("the Authority") and is presented on the accrual basis of accounting.The information in this schedule is presented in accordance with the requirements of OMB CircularA-133, Audits of States, Local Govenvnents , and Non-Profit Organizations. Therefore, someamounts presented in this schedule may differ from amounts presented in, or used in thepreparation of the basic financial statements.

NOTE 2. NON-CASH FEDERAL ASSISTANCE

The Authority did not receive any non-cash Federal assistance for the year ended June 30, 2009.

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DUPAGE HOUSING AUTHORITYSCHEDULE OF FINDINGS AND QUESTIONED COSTS

JUNE 30,2009

I. Summary of Auditor's Results

onFinancial Statement Secti

1. Type of auditor's report issued:

2. Internal control over financial reporting

a Material Weakness(es) identified?

b. Significant deficiencies identified that are

Unqualified

No

not considered to be material weaknesses? No

3. Noncompliance material to the financial statements noted? No

Federal Awards Section

I. Dollar threshold used to determine Type A Programs: $781,984

2. Dollar threshold used to determine Type B Programs: Not Applicable

3. Auditee qualified as low-risk Auditee? No

4. Type of auditor's report on compliancefor major programs: Unqualified

5. Internal Control over major programs:

a. Material weakness(es) identified? No

b. Significant deficiencies identified that are notconsidered to be material weaknesses? No

c. Any audit findings disclosed that are requiredto be reported in accordance with section 5 10(a)of OMB Circular A-133? No

II

6. Identification of major programs:

CFDA Number Name of Federal Program

14.871 Section 8 Housing Choice Voucher Program

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DUPAGE HOUSING AUTHORITYSCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)

JUNE 30, 2009

li II. Financial Statement Findings

ff

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There were no findings relating to the financial statements which are required to be reported in accordancewith government auditing standards generally accepted in the United States of America.

Federal Award Findings and Questioned Costs

tt There were no findings or questioned costs relating to federal awards.

IV. Schedule of Prior Year Federal Audit Findings

None reported.

33

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DU PAGE COMMUNITY DEVELOPMENT COMMISSION

0March 29, 2010

RE: DuPage Housing AuthorityLetter of ReferenceNeighborhood Stabilization Program

To Whom It May Concern:

The purpose of this letter is to provide a reference for DuPage Housing Authority to apply to theKane County Neighborhood Stabilization Program. DuPage County currently has an NSPagreement in place with DuPage Housing Authority and their performance under the agreementhas been extraordinary.

Don Demetry has been acting as broker under our program and is very much one of the reasonsour program has been so successful. He has learned the program thoroughly and understands theimportance of compliance. His guidance in choosing houses has been invaluable. Therehabilitation work done through DuPage Housing Authority has been very well done, yet costeffective. Don has also served as a resource to other brokers working in our program. He also

• understands the homebuyer qualification portion of the program and has assisted us in designingour program.

In my opinion , DuPage Housing Authority and Don Demetry have the knowledge and capacityto handle and assist with a portion of the Kane County NSP funds . Should you have anyquestions , please do not hesitate to contact me at (630) 407-6605 or carrol [email protected].

0

Sincerely,

Carrol A. RoarkAdministrator, Community Development

DU PAGE COUNTY DEPARTMENT OF COMMUNITY SERVICESDU PAGE CENTER - 421 N. COUNTY FARM ROAD • WHEATON, IL 60187Mary A. Keating , Director FAX 630-407-6601 630-407-6600

March 30, 2010

Mr. Robert I-lessDuPage I-lousing Authority711 Last Roosevelt RoadGlen Ellyn, Il. 60137

Dear Bob:

•

The purpose of this correspondence is to confirm the availability of a$750,000.00 line of'cretlit for the DuPage Housing Authority at MBFinancial Bank N.A. This line has no outstanding balance at present and canbe used at your discretion.

As you know, in the past, we have granted DuPage Housing Authority aline totaling up to $1,500,000.00, and we would be happy to consider anincrease in your current line of credit should circumstances require it.

Shouldyu,have any questions , do not hesitate to contact me.

5'ercly,6 C C^

/'George C. ClamSenior Vicc PresidentSenior Credit Officer

GCC:ccr

Ocorµ• Clnnddupa;p hausirg Lhr

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DON DEMETRY6730 Rt. 83 Cell: 1-630-364-1326

Darien , IL. 60561 Email: [email protected]

Profile: Professional with a unique combination of business and Government

experience, bringing to the table the ability to combine business development

with an understanding of all aspects of government policies.

Experienced real estate agent for many years before becoming the managing

broker for DHA Management INC. I have been involved with the NSP program in

DuPage County for just under a year.

Professional Goals include continuing to grow in leadership and knowledge, excel

in providing low income housing for as many deserving people as I can.

Education

June 1996 Real Estate License

March 2007 Brokers License

Experience

Real Estate/Broker/NSP

• Bought and sold houses as a Real Estate Agent for over 10 years

• Have overseen Real Estate Agents as a broker for over 3 years

• Worked with Section 8 housing and HUD

• Have excelled with the NPS program in Du Page County

DU PAGE COMMUNITY DEVELOPMENT COMMISSION

March 29, 2010

RE: DuPage Housing AuthorityLetter of ReferenceNeighborhood Stabilization Program

To Whom It May Concern:

The purpose of this letter is to provide a reference for DuPage Housing Authority to apply to theKane County Neighborhood Stabilization Program . DuPage County currently has an NSPagreement in place with DuPage Housing Authority and their performance under the agreementhas been extraordinary.

Don Demetry has been acting as broker under our program and is very much one of the reasonsour program has been so successful. He has learned the program thoroughly and understands theimportance of compliance. His guidance in choosing houses has been invaluable. Therehabilitation work done through DuPage Housing Authority has been very well done, yet costeffective. Don has also served as a resource to other brokers working in our program. He alsounderstands the homebuyer qualification portion of the program and has assisted us in designingour program.

In my opinion , DuPage Housing Authority and Don Demetry have the knowledge and capacityto handle and assist with a portion of the Kane County NSP funds. Should you have anyquestions, please do not hesitate to contact me at (630) 407-6605 or carrol . [email protected].

Sincerely,

Carrol A. RoarkAdministrator, Community Development

DU PAGE COUNTY DEPARTMENT OF COMMUNITY SERVICESDU PAGE CENTER • 421 N. COUNTY FARM ROAD • WHEATON, IL 60187Mary A. Keating , Director FAX 630-407-6601 630-407-6600

Oportunidad para ser dueno de casaSpecial New Program

Neighborhood Stabilization Program (NSP)DuPage County ispurchasing bank-ownedforeclosed homes andcompletely remodelingthem for sale.

This owner-occupiednew program includes aspecial financingplan that can save youmoney and help you getthe home of yourdreams!

El Condado de DuPage estacomprando casas que sonpropiedad de los bancosdespues de una ejecucionhipotecaria, y las estaremodelando completamentepara ponerlas a la yenta.Este nuevo programa, en elque el residente de la casadebe ser el dueno, lincluyeun plan de fnanciamientoespecial que puede ahorrarledinero y ayudarle a obtenerla casa de sus suenos!

Homes For Sale Now:

Homeownership

To Qualify For This Program call 630 -260-2500Call Don Demetry to View Homes for Sale : 630346-1326

If you call and need to speak with someone in Spanish, you will be connectedwith someone who can assist you

Si llama y necesita hablar con alguien en espanol , lo comunicaremoscon quien pueda ayudarle

You may also visit www . dhoc . oro or http ://www.dupaeeco .org_cdc orhttp•//www hud govtoffices /cod/communitydevelopmen iorograms /neiahborhoodspo

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managenlent, Ax395 West Ogden Avenue , Naperville , IL 60563

Phone (630) 346 -1326 Fax (630) 355-6990

April 23, 2010

To: Kane County Development and Community Service

From: DHA Management Inc.

Re: Kane County NSP Application

Dear Josh,Enclosed please find the additional information you requested.

1. AppraisersRandall L Ledbetter520 Bristol DriveCarol Stream , IL 60188*see attachment for IL License and Insurance

Roy Tremain751 Ashbury DriveGlendale Heights , IL 60139"see attachment for IL license , resume and insurance

2. Home and Lead Inspectors:The Lead Inspector USA, Inc.281 A UniversityElk Grove Village , IL 60007

Edward R Topp*see attachment

White Glove Building Inspectors, IncP.O.Box 9691Naperville,IL 60567

Arden K DrentheBruce P Fisher`see attachments for licenses

3. Lead Certified ContractorsC&J RemodelingCasey: 63o235-2828

DPB AbatementDon Bailey : 773-858-5170

DVBC Inc.Ken Van Barringer : 630-556-3454

Pro Lead Inc.John Mijic : 773-837-4110'see attachment for all info

4. AttorneyHowlett and Associates. Ltd18o West Park AveElmhurst, IL 60126630-530-5800

32 years experience as real estate attorney18 years as primary council for Dupage Housing Authority

5. Construction ManagerBarnard E. Dahl202 69th StreetDarien ,IL 6056130 years in the construction field'see attachment for resume

5. Real Estate TeamDon Demetry : Manageing BrokerTara Ridgeway : Real Estate Sales AgentMike Honer : Real Estate Sales AgentMary Wlodarski : Real Estate Sales Agent/Insurance Agent'see attachments for individual licenses

History: DHA Management Inc. is a full fledged real estatecompany dealing with sales and property management.Currently we are in the process of buying, rehabbing and sellingthe following properties.

1551 HighlandGlendale Heights, ILSOLD

1630 BeverlyHanover Park, IL

220 South Harvard AveAddison, IL

437 East AltgeldGlendale Heights, ILSOLD

54 Cambridge LaneGlendale Heights, ILSOLD

549 Second AveVilla Park, IL

5565 BradleyHanover Park, IL

244 LincolnGlendale Heights,IL

6. Budgeting

Estimate of Spending and procurement with $1,674,641.00

South Elgin : 25% of dollars received

Average acquisition cost of houses in South Elgin: $1oo,ooo.ooRehab Cost : $50,000.00Development fee: 10%Soft costs: $6ooo.ooApproximate number of houses to be purchased in South Elgin: 3

Carpentersville : 5o% of dollars received

Average acquisition cost of houses in Carpentersville : $60,000Rehab cost: $ 50,000Development fee: 1o%Soft costs : $ 6ooo.oo

Approximate number of houses to be purchased inCarpentersville, IL: 6

North Aurora: 25% of dollars received

Average acquisition cost of houses in North Aurora : $140,000.00Rehab cost : $50,000.00Development fee: 1o%Soft costs : $6ooo.oo

Approximate number of houses to be purchased in North Aurora,IL: 2

These numbers will increase as properties are sold and others arepurchased to continue program.

F. tY R ID ^.F^ .L( f

Department of Financ ial and Professional RegulationDivision of Professional Regulation.

The person;atm or corporation whose name appears on this certificate has compliedLICENSE NO. with the provisions o(.the Illinois statutes andlor rules and regulations and is hereby EXPIRES:

556.004037authorized to engage in the activity as indicated below .

09/30/2011

BRENT E . ADAMS nnitFI F At 1ITHAQfr`ACTING5ECRETARY //^^^JXXCRRR+++

The official status of this Iicensee can bt' verified at www.idfpr.com

CERTIFIEDRESIDENTIAL

REAL ESTATE APPRAISER

ISSUED:

07/14/2009

RANDALL L LEDBETTER520 BRISTOL DRIVECAROL STREAM , IL 60188

Genera/Star- GENERAL STAR NATIONAL INSURANCE COMPANYFinancial Centre

P.O. Box 10360Stamford, Connecticut 06904-2360

REAL ESTATE APPRAISERS ERRORS & OMISSIONS INSURANCE POLICY

DECLARATIONS PAGE

This Is a claims made and reported policy. Please read this policy and all endorsements and attachments carefully.

Policy Number: N1A997%IC Renewal of Number: NJA997961B

1. NAMED INSURED : Randall. L LedbetterSTREET ADDRESS : 520 Bristol Drive

Carol Stream, IL 60188

2. POLICY PERIOD : Inception Date: 06/01/2009 Expiration Date: 06/0112010

Effective 12 : 01 a.m . Standard Time at the address of the Named Insured.

3. LIMIT OF LIABILITY:Each Claim: $1,000.000Aggregate: S 2,000,000

Claim Expenses have a separate Limit of Liability:Each Claim: $1,000,000Aggregate : $ 2,000,000

4. DEDUCTIBLE : Each Claim: $500 .00 Aggregate : $1,000.00

5. RETROACTIVE DATE : 06/012004

If a date is indicated , this policy will not provide coverage for any Claim arising out of any act, error,omission or personal injury which occurred before such date.

6. ANNUAL PREMIUM: $ 590.00

7. ENDORSEMENTS:This policy is made and accepted subject to the printed policy form together with the following font(s) orendorsement(s).GSN-07-AP-122(07t2007) GSN-07-A2-8151L ( 1212007)

05N-07-AP-375 (10!2007) 0SN-07-AP-201 (061!007)

8. MANAGING AGENT Q JHerbert H . Landy Insurance Agency, Inc.75 Second Avenue . Suite 410

Needham , Massachusetts 02494-2876 Authorized Representative

GSN-07-AP-720 (062007) 0 Copyright 2007, General Star Management Company. Stamford, CT Page 1 of 1

Producer Code: 00026230 Class Code: 73128Date: 05/092009 SLA#:

751 Asbury Or, Glendale Heights , IL. 60139 (6301440.1437 nrem2@ sbogbbal.net

Nov_C. Tremain06leelloe Perform and supervise residential real estate appraisals.

Roy Tremain Appraisals

ResumeRoy C. Tremain751 Asbury OrGlendale Heights, IL. 60139Home :(630)861-8948Fax No. :(630) 858-8793Mobile :(630)440-1437Website: www.tremainaooraisals.cuntEmail [email protected]

PROFESSIONAL EXPERIENCE:Currently, I am working for my own company as a certified residential real estate appraiser.Performed and or reviewed all appraisals produced by the Company over the Years.This extensive experience is invaluable for a Residential Real Estate Appraiser.Offer relocation appraisal services.Experience with Microsoft Office Word & Excel.

Roy Tremain Appraisals.................................................................................... 2003 to PresentAppraiser @ Residential Appraisal Services, Oak Brook, IL ..........................1997 to 2003Real Estate Salesperson . AMRO Real Estate . Oak Brook , 11 .....................2007 to PresentReal Estate Salesperson . GLK Realty, Chicago. IL .........:...............................1993 to 2007

EDUCATIONAL BACKGROUND:Partial List:1997-Present - 28 hours Continuing Education courses every two years (IL. CREA requirements)1993-Present - 12 hours Continuing Education courses every two years (IL. R.E. Salespersonrequirements)2009-FHA Valuation Training 2009 (Appraisal Protocol: Course covers FHA appraisal protocol,Minimum Property Requirements (MPR.) FHA policy updates. 203 (k) rehabilitation program.Energy Efficient Mortgage program. REO appraisals, roster renewal information & a case study.)2009-REO or Bank Owned Property2009-Relocation ERC Appraisal Training Program2009-USPAP Update, Valuation Applications Including Appraising Historic Properties,Valuation Techniques & Applications,2000-U.S. H.U.D. Federal Housing Administration Appraisal Examination (FHA approved)1999-Appraisal Methods - Real Estate Education Company1999-Residential Appraisal Report Writing - Real Estate Education Company1997-Real Estate Appraiser Diploma - International Correspondence School1997-Basic Principles Of Appraisal - Chicago Assoc. of Realtors R.E. School1997-Residential/Single Family Appraisal - Chicago Assoc. of Realtors R.E. School1997-Standard Of Prof. Appraisal Practice - Chicago Assoc. of Realtors R.E. School

1995-1997-Appraisal Diploma - Marywood College (Scranton, PA.)1977-1979-General College Curricula - Pittsburg State University

PROFESSIONAL MEMBERSHIPS , AFFILIATIONS, LICENSES:Certified Residential Real Estate Appraiser # 556.002106, State of IllinoisLicensed Real Estate Salesperson # 476.340672, State of IllinoisMember Main Street Organization of Realtors (MORe)Member National Association of Realtors (NAR)Member Illinois Association of Realtors (IAR)FHA/HUD Appraiser

PARTIAL LIST OF CLIENT'S SERVED:FHAMUDDu Page Housing AuthorityHabitat For Humanity (Du Page County)PNC, a Division of PNC Bank. National Association (formally National City Bank)Suntrust Mortgage. INC.Sovereign PA/Default 2ING Direct (REO)INDY MAC Mortgage Services, a Division of One West BankJVI Solutions. JVI. Appraisal Division (AMC)LSI East Appraisal Default and Servicing (AMC)C2C Appraisal Services (AMC)Wells Fargo BankFranklin BankOcwen Federal BankCrystal Lake Bank & Trust Co.Flagstar BankFirst American BankFirst Eagle National BankFirst Capital MortgageCapital One FinancialWashington MutualBank of AmericaChase Manhattan, JP MorganWachovia BankSparta Special Servicing. LLCProspect Mortgage

PROFESSIONAL REFERENCESMichael Shoffner, CRA (Certified Residential Real Estate Appraiser)... (630) 602-3398Chris Jordan. Vice - President , First Eagle National Bank ......................( 630) 893-3800Javeed Rathore, President , Arturo Real Estate Group ................................( 630) 501-1890

Department of Financial and Professional RegulationDivision of Protessional Regulation

.'IV <4M"raonba:eccWrne ,:P^IwyI.IGFNSF NO. mug.''., - ,..Wr.. St.me .'n c,, a ,r.^wl..•: nn-nrn..m EXPIRES

556.002106 0913012011

CERTIFIEDRESIDENTIAL

REAL ESTATE APPRAISER

ROY C TREMAIN751 ASBURY DRIVEGLENDALE HEIGHTS, IL 60139

ISSNFf

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LEXINGTON INSURANCE COMPANYWILMINGTON, DELAWARE

Adndnivrmiw OOius- Im Sum ., Sirae . If,hn,e. Maa.̀ 'uhuru .. 1121 III

Certificate Number:

This Certificate forms a part of Master Policy Number:Renewal of Master Policy Number :

I

F067040430

0100079975130708

YOUR RISK PURCHASING GROUP MASTER POLICY IS A CLAIMS MADE POLICY.READ THE ATTACHED MASTER POLICY CAREFULLY

THE AMERICAN ACADEMY OF STATE CERTIFIED APPRAISERS

CERTIFICATE DECLARATIONS

1. Name and Address of Certificate Holder : Roy Tremaln d/b/aRoy Tremain Appraisals751 Ashbury DriveGlendale Heights IL 60139

2. Certificate Period : Effective Date : 06/08/09 to Expiration Date: 06106/1012:01 a .m. Local Time al the Address of the Insured.

2a. Retroactive Date: Full12:01 a.m. Local Time at the Address of 1ho Insured.

3. Limit of Liability : $ 1,000 ,000 each claim$ 1,000,000 aggregate limit

4. Deductible : S 5.000 each claim

5. Professional Covered Services Insured by this policy are : REAL ESTATE APPRAISAL SERVICES

6. Advance Certificate Holder Premium: $ 583

7. Minimum Earned Premium : 25% or $ 146

Forms and Endorsements:PRO 3150 10/05 Real Estate Appraisers Professional Liability Declarations , PRO 3149 10/05 Real Estate AppraisersProfessional Liability Form, MPLO22 12/02 Fungus Mold Exclusion , LX 9346 09/99 Employment - Related Practices Exclusion,81227 11/02 Terrorism Exclusion , AASCARPGNS 08/03 Non Slacking Endorsement , PRG 3151 10/05 DisciplinaryProceedings Extension Endorsement

Agency Name and Address: INTERCORP, INC.1438-F West Main StreetEphrata , PA 17522-1345

IT IS HEREBY UNDERSTOOD AND AGREED THAT THE CERTIFICATE HOLDER AGREES TO ALL TERMS AND CONDITIONS ASSET FORTH IN THE ATTACHED MASTER POLICY.

THIS POLICY IS ISSUED BY YOUR RISK PURCHASING GROUP. YOUR RISK PURCHASING GROUP MAY NOT BE SUBJECT TOALL OF THE INSURANCE LAWS AND REGULATIONS OF YOUR STATE. STATE INSURANCE INSOLVENCY GUARANTY FUNDSARE NOT AVAILABLE FOR YOUR RISK PURCHASING GROUP.

Authorized Representative ORCountersignature ( in states where applicable) Date: June 4. 2009

PRG 3152 (10105)

..........................................................................._......._.... _.__._._.......................................... ........................ .....

Department of Financial and Professional RegulationDivision of Professional Regulation

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HOME INSPECTOR

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LEAD INSPECTOR USA, INC.281A University

Elk Grove Village , Illinois 60007(847)466-7527

www.theleadinspectors.com

LEAD ID ISSUED

1112512009

Edward R Topp

LEAD RISKASSESSOR LICENSE

EXPIRES t

281 A University Ln. Ab 111111Elk Grove Village . IL 60007

E'tvironme •aal Healu

ASBESTOSPROFESSIONAL

LICENSE

ID NUMBER ISSUED EXPIRES211/2010

EDWARD R TOPP281A UNIVERSITY LANE 't RELK GROVE VILLAGE, IL 60007 .^^

_r,.. Yvrn21 HtMl'

THE LEAD INSPECTOR USA, INC.281A University Lane

Elk Grove Village, Illinois 60007North Suburban (847)466-7527

www.theleadinspectors.com

Lead Contractors:They are in alphabetical order. _To check Contractor status go to-http: //app. idph. state. il. us/Envhealth/lead/LeadProfessionalListing.asp

C&J RemodelingCasey630-235-2828

DPB AbatementDon Bailey773-858-5170

DVBC Inc.Ken Van Barringer630-556-3454

Pro Lead Inc.John Mijic773-837-4110

IDPH Division of Environmental Health

Illinois Department of Public Health

p.: Ga!r a..=ave!nc' • '..A miJ . L'._..:; Ar.. 7 ie:"

Page I of I

Licensed Lead ContractorsAll licenses expire on May 31 of each year

This list is subject to change due to insurance expiration, removal or suspension - VieW

Back To List

Contractor ID Numb

Contractor Name

Last Update

COUNTY

Address

City

State

Zip

cert expiration date

Telephone

Fax

349

C&J Home Improvement

8/28/2009

Cook

NA

Lemont

IL

60439

NA

NA

For questions , please call the listed contact phone number.Data last updated : 2/16/2010 10:30:38 AM

idph online home Illinois Department of Public Health535 West Jefferson StreetSpringfield , Illinois 62761Phone 217-782-4977Fax 217-782-3987TTY 800-547-0466Questions or Comments

http://app .idph.state . i1.us/envhealth/lead/genericdb/code/GenericView.asp?KEY=349 4/23/2010


Illinois Department olpublic Health

Page 1 of 1


This list is subject to change due to insurance expiration , removal or suspension - View

Back To List

Contractor ID Numb 362

Contractor Name DPB Abatement Services, Inc.

Last Update 9/18/2009

COUNTY Cook

Address P.O. Box #512

City Dolton

State IL

Zip 60419


Telephone (773)-858-5170

Fax (773)-768-8901

For questions, please call the listed contact phone number.Data last updated: 2/16/2010 10:30:38 AM

idph online home Illinois Department of Public Health535 West Jefferson StreetSpringfield , Illinois 62761Phone 217-782-4977

Fax 217-782-3987TTY 800-547-0466Questions or Comments

http://app.idph.state.il.uslenvhealthlleadlgenericdb/codelGenericView.asp?KEY=362 4/23/2010


Illinois Department of Public Health

1111111211111=11 Flo!Pat Olrnn, 3nv_rner • :,:•oter'. Am,;d tr.3.. or

Page 1 of I


This list is subject to change due to insurance expiration, removal or suspension - Vie W

Back To List

Contractor ID Numb

Contractor Name

Last Update

COUNTY

Address

City

State

Zip


Telephone

Fax

358

DVBC, Inc.

9/18/2009

NA

Big Rock

IL

60511

NA

NA


idph online home 04Illinois Department of Public Health535 West Jefferson StreetSpringfield , Illinois 62761Phone 217-782-4977Fax 217-782-3987TFY 800-547-0466Questions or Comments

http://app.idph.state .il.us/envhealth/lead/genericdb/code/GenericView.asp?KEY=358 4/23/2010


Illinois BoDartment of Public Health

Fat Di nn, Governor > Damon T. Arnold, 5^..0,. 6° p.N_ 01

Page 1 of 1


This list is subject to change due to insurance expiration, removal or suspension - View

Back To List

Contractor ID Numb 466

Contractor Name Pro Lead, Inc.

Last Update 12/10/2009

COUNTY Cook

Address 2700 E . Ninety-Sixth St.

City Chicago

State IL

Zip 60617


Telephone (773) 656-8349

Fax (773) 978-2674


idph online home * Illinois Department of Public HealthA 535 West Jefferson Street

Springfield, Illinois 62761Phone 217-782-4977Fax 217-782-3987TTY 800-547-0466Questions or Comments

http://app.idph.state.i1.us/envhealth/lead/generiedb/code/GenericView.asp?KEY=466 4/23/2010

Barnard E. Dahl202 69th Street

Darien, IL 60561630-768-6279

Work Experience

Licensed Electrical Contractor1983-2009

Construction Manager DHA NSP Program2009 to present

Licensed Electrician 1983 to presentCommercial and Residential

Master Electrician

30 years in Construction . Experience in new construction , remodeling andcommercial properties . Working with small and large construction

companies . Extensive experience in working with subcontractors and alltrades . Knowledge base also in carpentry , plumbing, heating and all phases

of construction.

25+ years as a business ownerKnowledge base:

Budgetingpayroll

blueprintsbilling

Project managingProposals

Department of Financial and Professional RegulationDivision of Professional Regulation

LICENSE NO. EXPIRES:wlp M paisw d M gYW 0*i win n0 . r.eiNU. wW M IWWj

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0U30f2O12LICENSED

REAL ESTATE BROKER

DON J DEMETRY0790 ROUTE 89DANER , IL 00001

Spm DNA MANAGEMENT INC (47a070796)

Sign nUO Esaw Wflab

*tat r of JllinurisDepartment of Financial and Professional Regulation

Division of Professional Regulationme uecm 0,cw :waw+wme•uw ..wxxsW INS mm,¢ae naa ro,.y:ewLICENSE NO . ms n n:...1os SUSmn .e a:n ,,11 and eg,Ntolls w,v..., ,,,,gs EXPIRES

476.434754 04/30/2011LICENSED

REAL ESTATE SALESPERSON

MICHAEL HONER321 67TH STDARIEN. IL 60561

Sponsor DNA MANAGEMENT INC (179 010795)

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