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September 3, 2015 Mr. Todd Fowler Florida Housing Finance Corporation City Centre Building 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 Re: Peacock Run – Transfer of Ownership / Release of Guarantors

MMRB 2002 Series H1 & H2 / GUAR HUD Risk Sharing 067-98028 / 4% HC 2002-522C / SMI-24 / RFP 2010-16-19 SAIL ELI

Dear Mr. Fowler: First Housing reviewed correspondence dated August 19, 2015 from Yashpal Kakkar, President of Creative Choice Homes XX, Inc. (“General Partner”) requesting FHFC’s approval to amend the General Partner entity of Creative Choice Homes XX, Ltd. (“Borrower”), by transferring the ownership interest held by Mr. Dilip Barot to his wife, Mrs. Naimisha Barot, concurrent with the refinancing of the subject development and removal of the development from the FHFC Guarantee Fund Program, which was previously approved at the Florida Housing Finance Corporation (“FHFC”) October 30, 2014 Board meeting. In addition, the Borrower has requested that Dilip Barot be released as a guarantor on all Guarantees for the development. First Housing has been requested to determine whether Mrs. Barot has the prerequisite financial strength and experience to successfully own and operate the development. On behalf of FHFC, First Housing has reviewed the request, performed certain due diligence, and formulated a recommendation and conditions which are contained at the end of this report. For purposes of this analysis, First Housing has reviewed the following: Borrower Correspondence dated August 19, 2015

RFP 2010-16 SAIL ELI and Rule 67-48.010(15) F.A.C.

Borrower Audited Financial Statements for Year Ended December 31, 2014

Exhibit D Page 1 of 7

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Walker & Dunlop Commercial Property Funding, LLC Loan Application dated May 8,

2015

FHFC Past Due Report dated June 30, 2015

FHFC Noncompliance Report dated June 30, 2015

FHFC Occupancy Report dated June 2015

2012 and 2013 Joint Tax Returns for Dilip and Naimisha Barot (and 2014 extension forms)

A Sarma/MAF Mortgage Services report for Mrs. Barot dated August 25, 2015

Personal Financial statements of Mrs. Barot certified on August 20, 2015

In addition, First Housing has had various conversations with FHFC staff and the Borrower’s representative regarding the request described above. Our findings are as follows: Background Peacock Run is a 264 unit multifamily development located in Port St. Lucie, St. Lucie County, Florida. The Borrower is a Florida limited partnership formed to own and operate Peacock Run. The general partner with 0.01% ownership interest is Creative Choice Homes XX, Inc. The limited partner with 99.99% ownership interest is MMA Affordable Housing Fund 3, LP. At the October 30, 2014, FHFC Board meeting, the refinance of the First Mortgage Loan removing the property from the Guarantee Fund Program was approved. Simultaneous with this approval, the Board also approved that the existing SAIL ELI loan be subordinated to the new first mortgage loan and renegotiated to a forgivable loan with 6.67% of the loan forgiven annually over the original fifteen year term as long as the required SAIL ELI set aside are maintained. The new first mortgage loan is expected to close September 2015. The underwriter reviewed a Loan Application, dated May 8, 2015, from Walker & Dunlop Commercial Property Funding, LLC or its affiliate (collectively, “WDCPF”). The loan will be up to $9,600,000, with a fixed annual rate locked at closing. Interest will be based on the Swap Yield (sum of the 10-year Treasury Note Yield and the Swap Spread) plus 217 basis points, with a floor of 4.34%. The term will be for 10 years, with interest only for the first 60 months of the loan term. Thereafter, equal monthly payments of interest and principal amortized on a 360-month amortization schedule with a balloon payment due at maturity. The Final Credit Underwriting Report dated

Exhibit D Page 2 of 7

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October 17, 2014 anticipated the new first mortgage to be from Pillar Multifamily, LLC (“Pillar”). The new lender is offering the same or better terms. Operation of the subject is restricted by terms and conditions detailed in various loan documents, including but not limited to Florida Housing’s MMRB LURA, HC ELIHA and SAIL ELI Loan documents. The MMRB LURA requires that 40% (106 units) of the units be set aside for tenants earning 60% or less of the Area Medium Income (“AMI”) for a period that is 10 years past the later of 15 years after the date 50% of units are first occupied, the first day MMRB are no longer outstanding, or the date on which any assistance under Section 8 of the Housing Act of 1937 terminates. The set-aside for the Housing Credits (“HC”) is 100% of the units for tenants earning 60% or less of AMI for a period of 30 years. The SAIL ELI Loan requires that 5% of the units (14 units) be set aside for tenants earning 33% or less of the AMI for the first 15 years. At the end of the first fifteen (15) years, the ELI units are to revert back to the set aside committed to in the original MMRB LURA or HC ELIHA for the remaining fifteen years of the thirty (30) year compliance period. The set-aside for Special Needs Households is 50% (7 units) of the total ELI units which does not exceed the maximum allowed 10% of the development’s total units. The development team had the following issues reported on the June 30, 2015 Past Due Report. Caribbean West – HOME – First mortgage lender will not provide escrow balance

information Coral Gardens – SAIL – Loan matured 12/1/2014

Douglas Square – SAIL – Loan matured 2/28/2015

Gardens Apartments – HOME / HC – Borrower past due for legal expense

reimbursement

Mystic Woods I – HOME – Loan matured 6/6/2015

Preserve at Oslo – SMI – In default Vista Palms – SMI – In default

The development team had the following issues reported on the June 30, 2015 Asset Management Noncompliance Report: Coral Gardens – SAIL – Failure to provide required development amenity: security

system

Exhibit D Page 3 of 7

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Per the June 2015 FHFC occupancy report, the development was 95.83% occupied. First Housing’s Annual Management Review and Physical Inspection performed January 12, 2015, reported occupancy of 96% and the property was found to be in non-compliance. After follow up and management response, the review was closed out on August 7, 2015. Proposed Transfer of Ownership Interest The Borrower is requesting to transfer the principal ownership interest in the GP, from Mr. Dilip Barot to his wife, Mrs. Naimisha Barot. Mrs. Barot has extensive experience in Real Estate since 1984, when she started in the business by owning, rehabbing and operating six motel properties in Palm Beach County ranging from 20 to 50 units. She started working with the Creative Choice Group in 1997, where she played a key role in developing the conventional properties in the Creative Choice portfolio in the last 10 years, involved in daily operation of developing and managing various properties. Currently, she is Director of Operations, Human Resources and Accounting. Mrs. Barot also is Director of Wellness Lifestyle in Amrit Resorts and Residences, a newly created brand for luxury wellness spa resort residence. First Housing reviewed Dilip and Naimisha Barot joint tax returns from 2012 and 2013, and 2014 extension form. First Housing reviewed current credit/trade reference and financial information and found them to be satisfactory. Management Company The management company will change to Impro Synergies, LLC, an entity created in June 27, 2011. Since 2012, this new management company has been managing 17 Creative Choice properties with a total of 2,285 units. The selection of the management company will have to be approved by FHFC Asset Management. Contact information: Pamela O’Bright, Vice President Impro Synergies, LLC 8374 Zanzibar Lane West Palm Beach, FL 33414 Phone: 954-394-2983 Email: pamela@improsynergies.com

Exhibit D Page 4 of 7

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Current Organizational Chart

Proposed Organizational Chart

Creative Choice Homes XX, Ltd.

Borrower

Creative Choice Homes XX, Inc.

0.01% General Partner

Shareholders: Dilip Barot - 79%

Nilesh Parikh - 21%

MMA Affordable Housing Fund 3, LP

99.99% Limited Partner

Creative Choice Homes XX, Ltd.

Borrower

Creative Choice Homes XX, Inc.

0.01% General Partner

Shareholders: Naimisha Barot - 79%

Nilesh Parikh - 21%

MMA Affordable Housing Fund 3, LP

99.99% Limited Partner

Exhibit D Page 5 of 7

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Recommendation First Housing concludes that Mrs. Barot individually has the prerequisite financial strength and experience to successfully own and operate the development. First Housing recommends the transfer of ownership and the release of Dilip Barot and associated affiliates from all existing Florida Housing Guarantees. Closing of the transaction is subject to the following conditions:

1. Recommendation of this report is conditioned and dependent on all conditions and recommendations in the final Credit Underwriting letter dated October 17, 2014. Further, confirmation that the new loan terms from WDCPF are equivalent or better than the loan terms from Pillar.

2. Mrs. Barot will be required to sign any outstanding guarantees for the SAIL ELI loan, if applicable. Additionally, Mrs. Barot will be required to sign non-recourse and environmental indemnities guarantees.

3. Review and approval of all loan documents, including an Assignment and Assumption Agreement, consistent with the terms outlined above by FHFC and its legal counsel.

4. Review of final loan terms and confirmation that all requirements for approval have

been met.

5. Consent of the HC equity provider, if applicable.

6. Satisfactory resolution of any outstanding past due and noncompliance items.

7. Payment of any outstanding arrearages to the Corporation, its legal counsel, Servicer or any agent or assignee of the Corporation for past due issues applicable to the development team (Applicant or Developer or Principal, Affiliate or Financial Beneficiary, as described in 67-21.0025(5) and 67-48.0075(5) F.A.C., of an Applicant or a Developer).

8. Prepayment of any required compliance monitoring and servicing fees, if applicable.

9. Payment of a MMRB transfer fee of $2,500.

10. Receipt of a non-refundable transfer fee equal to one tenth of one percent of the

SAIL/ELI loan principal amount on the date of closing.

Exhibit D Page 6 of 7

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11. Approval of this transfer, herein noted, is contingent upon the refinancing of the existing first mortgage that is currently credit enhanced by FHFC’s Guarantee Program.

12. All other due diligence required by FHFC and its legal counsel.

Prepared by: Reviewed by:

Thais Pepe Ed Busansky Senior Credit Underwriter Senior Vice President

Exhibit D Page 7 of 7