MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY A G …

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

A G E N D A February 25, 2021 – 10:00 a.m.

TELECONFERENCE 248-509-0316

Conference ID: 419 617 944#

Roll Call:

Public Comments:

Remarks:

Chairperson

Executive Director

REGULAR VOTING ITEMS:

Tab A

Tab B

Tab C

Tab D

Tab E

Tab F

Tab G

Approval of Agenda

Minutes – January 21, 2021

Michigan State Housing Development Authority Resolution Authorizing Short-Term Revolving Credit Facility (Single-Family Program) 2021 in an Amount Not to Exceed $100,000,000

Michigan State Housing Development Authority Resolution Declaring Official Intent to Reimburse Expenditures for Financing and Purchasing Mortgage Loans

Resolution Authorizing Waiver of Mortgage Loan Prepayment Prohibition, Village Glen, MSHDA Development No. 1099, Traverse City, Grand Traverse County

Resolution Determining Mortgage Loan Feasibility, Union at Oak Grove, MSHDA Development No. 3837, Township of Howell, Livingston County

Resolution Authorizing Mortgage Loan, Union at Oak Grove, MSHDA Development No. 3837, Township of Howell, Livingston County

Resolution Authorizing the Michigan Department of Technology, Management and Budget to Enter into a Professional Services Contract for Software Services on Behalf of the Authority

Closed Session

None.

Discussion Issues: None. Reports: Tab 1 Financial Report: Quarter and Year to Date Ended September 30, 2020 Tab 2 MSHDA Production Report: FY 2020 Tab 3 Short Term Relief Report Tab 4 Hardest Hit Report Tab 5 Current and Historical Homeownership Data Tab 6 Homeownership Production Report Tab 7 2021 Board Calendar

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Michigan State Housing Development Authority Minutes of Authority Meeting January 21, 2021 – 10:00 a.m.

Regular Meeting held via Microsoft Teams in accordance with Public Act 228 of

2020 amending Section 3 (MCL 15.263) of the “Open Meetings Act” (1976 PA 677) AUTHORITY MEMBERS PRESENT AND LOCATION: Regina Bell, Detroit, Wayne County, Michigan Mark Burton, Meridian Township, Ingham County, Michigan Susan Corbin, Petoskey, Emmet County, Michigan Carl English, Village of Bingham Farms, Oakland County, Michigan Jennifer Grau, Lansing, Ingham County, Michigan Tyrone Hamilton, Belleville, Wayne County, Michigan Deb Muchmore, Laingsburg, Shiawassee County, Michigan AUTHORITY MEMBERS ABSENT: Rachael Eubanks OTHERS PRESENT VIA MICROSOFT TEAMS: Gary Heidel, Acting Executive Director Maria Ostrander, Executive Clarence Stone, Legal Affairs Richard Norton, Legal Affairs Lisa Ward, Legal Affairs Mary Cook, Operations Daphne Wells, Operations Jonathan Hilliker, Executive Tiffany King, Executive Odessa Carson, Executive Samuel Buchalter, Executive Mark Garcia, Executive Jeffrey Sykes, Finance Troy Thelen, Asset Management Mary Townley, Homeownership John Hundt, Rental Development Chad Benson, Rental Development Kelly Rose, Rental Assistance and Homeless Solutions Ronald Farnum, Office of Attorney General John Millhouse, Office of Attorney General Michael Fobbe, Office of Attorney General Lori Fedewa, Human Resources Katie Bach, Communications

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Sandy Pearson, Habitat for Humanity Twenty additional members of the public participated via the following Conference Line: +1 248- 509-0316, Conference ID: 419 617 944#. Chairperson Susan Corbin opened the meeting at 10:05 a.m. A quorum was established with the presence of Ms. Corbin, Ms. Regina Bell, Mr. Mark Burton, Mr. Carl English, Ms. Jennifer Grau, Mr. Tyrone Hamilton and Ms. Deb Muchmore. Ms. Corbin asked Mr. Jonathan Hilliker to provide an overview of the meeting format, which was being conducted through Microsoft Teams. Mr. Hilliker explained that Board members and presenters were participating by video through a previously provided video link. A separate telephonic conference line linked to the video meeting was made available to the public. Ms. Corbin requested public comments from teleconference participants. Ms. Sandy Pearson from Habitat for Humanity of Michigan noted her presence for the record. Following public comments, Ms. Corbin provided an update on the search for a permanent Executive Director. Although a Special Board meeting had been scheduled for January 20, 2021, it was canceled when one of the final two candidates withdrew his application. The Public Policy and Human Resources Subcommittee will regroup to determine next steps and report back to the Board. Mr. Gary Heidel, Acting Executive Director, began his report by highlighting President Biden’s proposed $1.9 trillion COVID Relief Plan. He noted that this will include an extension of the eviction moratorium, as well as provide additional funding for rental assistance. These funds are in addition to what was already allocated by the Pandemic Relief Bill in December 2020. Mr. Heidel then asked Ms. Kelly Rose, Acting Chief Housing Investment Officer, to provide an update on the status of the Pandemic Relief Bill. Ms. Rose explained Michigan expects to see about $660 million of the $25 billion allocated through this legislation. The Treasury Department will provide grants to fund emergency rental assistance, rental arrears, and utility costs for households at risk of homelessness or housing instability due directly or indirectly to the pandemic. To qualify for assistance, households must have incomes of no more than 80 percent of the area median income. Grantees must also prioritize households earning up to 50 percent of AMI and those with a member who is unemployed and has been unemployed for at least 90 days. Ms. Rose further noted that 65% of the funds need to be spent or allocated by September 1, 2021. To meet this timeframe, the Authority needs to spend about $50 million a month starting February 1, 2021. As such, MSHDA staff are working diligently to ensure grantees are ready to receive these funds as soon as they are available. In response to Authority questions, Ms. Rose confirmed that applicants will need to be in arrears with their utilities to qualify for that type of assistance. She further noted that MSHDA staff will work with community action agencies to administer utility related funds. Ms. Rose was asked how she expects to administer this program differently from the Eviction Diversion Program. Ms. Rose responded that there were many lessons learned from the Eviction Direction Program, which will be applied when applicable. For example, the Authority will now require multiple service providers to administer the funds. Doing so will ensure additional capacity. Service providers must also meet established staffing targets much earlier in the process. Ms. Rose also noted that MSHDA staff is working to streamline the application process on its end.

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Her staff is currently vetting software providers to set up an online application process. They are also working with DTMB to expedite the procurement process and plan to have a contract to present to the Board at its next Regular meeting in February. In response to additional questions, Ms. Rose confirmed that all information on this program would be provided to organizations such as 211, Michigan Department of Health and Human Services, as well as the Unemployment Insurance Agency. The intent is to reach people who may benefit from this program when they contact other agencies or nonprofit organizations for assistance. Following Ms. Rose’s discussion, Mr. Chad Benson of Rental Development was asked to provide an update on the new 4% Permanent Tax Credit. He explained that the December 2020 Stimulus Bill included a technical change that will impact the 4% tax credit component of pass-through and rental development deals. In the past, calculations were made using a floating rate to determine credit availability for projects. This rate was typically closer to 3%. A fixed 4% rate will provide the Authority with greater flexibility and increase the funds it has for various types of deals going forward. Because this is new, however, staff are currently meeting to determine how this will affect projects already in the pipeline. In response to Authority questions, Mr. Benson confirmed that this was a permanent change to the program. Ms. Tiffany King, Office of Equity and Engagement, provided an update on the Authority’s Strategic Planning Process. She noted that Phase II is currently under way, and she expects to report detailed findings the first week of March 2021. Additionally, a partner advisory council will be formed to address the housing needs found in the research. In response to Authority questions, Ms. King explained the process behind candidate selection for the advisory board. Internally, discussions took place to determine the best way to connect with diverse groups of people and organizations that have a connection to housing. Multiple factors were taken into consideration, including geography and race. For example, to ensure geographical diversity, organizations will be asked to provide representation from members in the communities they serve. Additionally, staff is connecting with various social agencies and state departments. Ms. King confirmed that the results of the data will be provided at the March 2021 Authority meeting. Additionally, Mr. Heidel stated that Ms. King will provide monthly updates to Authority members. VOTING ITEMS:

Approval of the Agenda (Tab A): Jennifer Grau moved approval of Tab A (Agenda). Deb Muchmore supported. The following Roll Call was taken for Tab A:

Regina Bell Yes Rachael Eubanks Absent Mark Burton Yes Jennifer Grau Yes

Susan Corbin Yes Tyrone Hamilton Yes Carl English Yes Deb Muchmore Yes

There were 7 “yes” votes. The agenda was approved. Minutes – December 17, 2020 (Tab B):

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Mark Burton moved approval of the Minutes. Jennifer Grau supported. The following Roll Call was taken for the Minutes:



There were 7 “yes” votes. The minutes were approved. Mr. Clarence Stone of Legal Affairs presented Tab C, Inducement Resolution, Carpenter Place Apartments, MSHDA No. 44c-128-2, Pittsfield Township, Washtenaw County. Mr. Stone reviewed the documents as detailed in the board docket. Jennifer Grau moved approval of Tab C. Tyrone Hamilton supported. The following Roll Call was taken for Tab C:



There were 7 “yes” votes. The resolution was approved. Mr. Clarence Stone of Legal Affairs presented Tab D, Inducement Resolution, Mid, MSHDA No. 44c-181, City of Detroit, Wayne County. Mr. Stone reviewed the documents as detailed in the board docket. In response to Authority questions, Mr. Stone explained that one advantage of utilizing the average income test is that it allows the developer greater flexibility. Income averaging also allows them to target lower and diverse groups of incomes. Ms. Kelly Rose agreed and noted that income averaging allows for more affordable units. Regina Bell moved approval of Tab D. Deb Muchmore supported. The following Roll Call was taken for Tab D:



There were 7 “yes” votes. The resolution was approved. Ms. Mary Townley of Homeownership presented Tab E, Resolution Authorizing Professional Services Contract with Metasource, LLC for Homeownership Division. Ms. Townley reviewed the documents as detailed in the board docket.

In response to Authority questions concerning the lack of bids on the Request for Proposal, Ms. Townley explained that it was likely due to the Authority’s low mortgage volume compared to bigger mortgage companies.

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There being no additional remarks, Ms. Corbin stated the following reports were included for information: (Tab 1) Delegated Action Reports, (Tab 2) Short Term Mortgage Relief Report, (Tab 3) Hardest Hit Report, (Tab 4) Current and Historical Homeownership Data, (Tab 5) Homeownership Production Report, and (Tab 6) 2021 Board Calendar. Ms. Corbin noted that the next regular Board meeting is scheduled for February 25, 2021. There being no additional comments, Ms. Corbin requested a motion to adjourn. Tyrone Hamilton moved to adjourn, and Mark Burton supported. The meeting adjourned at 11:04 a.m.

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M E M O R A N D U M

TO: Authority Members FROM: Gary Heidel, Acting Executive Director DATE: February 25, 2021 RE: Revolving Letter of Credit for Single-Family Program 2021

RECOMMENDATION: I recommend that the Michigan State Housing Development Authority (the “Authority”) approve the attached resolution authorizing Authority staff to borrow up to $100 million dollars to finance the purchase of single-family mortgage loans and down payment assistance (“DPA”) loans. EXECUTIVE SUMMARY: Typically, the Authority issues bonds to fund the purchase of single-family mortgages, including DPA loans. From time to time, the Authority used its general operating funds to make these loans until a bond issue closes. In 2019, the Authority entered into a 2-year revolving line of credit (“RLOC”) with TD Bank to fund single-family mortgages and down payment assistance loans prior to the issuance of long-term financing. This RLOC or Short-Term Credit Facility will expire at the end of February, 2021. On January 4, 2021, Authority staff sent an RFP to 18 potential RLOC firms. Eleven firms responded to the RFP and based on pricing and terms US Bank N.A. was selected to enter into a Short-/term Credit Facility Loan Agreement. I am seeking approval to enter into a new RLOC with US Bank to borrow up to $100 million for the purchase of single-family mortgages and DPA loans. Once single-family bonds are issued, a portion of the proceeds will be used to pay down the RLOC in full. The Authority will pay US Bank 1-Month LIBOR plus 42 basis points for amounts drawn down and 20 basis points for unused available RLOC. Once the bond proceeds have been utilized or committed, the Authority can then begin to utilize the RLOC again. Currently, the London Inter Bank Offer Rate (“LIBOR”) is set to expire as an index at the end of 2021. LIBOR has been the most common short term benchmark index for short term rates for many years. Due to the expected end of LIBOR, the Authority requested RFP responses include bids in the Secured Overnight Financing Rate (“SOFR”) and the Security Industry/Financial Market Association (“SIFMA”) index. Only two respondents bid in an index that wasn’t LIBOR. For this reason, the Authority will be entering into a 2-year agreement based on LIBOR. Staff are confident in moving forward with this benchmark index as it now

appears that LIBOR will be extended, and the Authority has the ability to terminate the agreement with US Bank at any time for any reason. ADVANCING THE AUTHORITY’S MISSION: The new RLOC will enable the Authority to make single-family mortgage loans before the next single-family bond issue. The RLOC-funded single-family mortgage loans will also allow the Authority to continue its strategic goal of supporting access to homeownership opportunities for low- and moderate-income persons. The Authority also gives borrowers training for successful homeownership by requiring homeownership counseling at no cost to the borrowers. To support communities and avoid conflicts of interest, the Authority uses nonprofit agencies as homeownership counselors. COMMUNITY ENGAGEMENT/IMPACT: Community engagement is not applicable for a RLOC. Communities throughout Michigan will be impacted by providing low and moderate-income persons access to affordable single family mortgage loans and homeownership counseling. ISSUES, POLICY CONSIDERATIONS, AND RELATED ACTIONS: None.

DRAFT

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY RESOLUTION AUTHORIZING SHORT-TERM REVOLVING CREDIT FACILITY

(SINGLE-FAMILY PROGRAM) 2021 IN AN AMOUNT NOT TO EXCEED $100,000,000

February 25, 2021

WHEREAS, the Members of the Michigan State Housing Development Authority (the

“Authority”) have determined that it is necessary and desirable for the Authority to enter into a short-term revolving credit facility (the “Credit Facility”) that would allow the Authority to borrow an amount not to exceed $100 million pursuant to the terms of this resolution (the “Authorizing Resolution”) to carry out the purposes of the Authority; and

WHEREAS, the Authority has requested certain financial institutions to submit proposals

(the “Request For Proposals To Provide Credit Facility”) to provide the Credit Facility to the Authority; and

WHEREAS, based on the responses to the Request For Proposals To Provide Credit

Facility, staff of the Authority recommends entering into a Credit Facility with U.S. Bank National Association (the “Lender”); and

WHEREAS, the terms and conditions for the Credit Facility will be set forth in the

Revolving Credit Agreement between the Lender and the Authority, together with the related Promissory Note and Fee Letter, pursuant to which the Authority will agree to make payments due under the Credit Facility; and

WHEREAS, pursuant to Section 27(l) of the Act, the Authority proposes to delegate to the

Executive Director, the Chief Financial Officer, the Director of Legal Affairs, the Deputy Director of Legal Affairs, the Chairperson or the Vice Chairperson of the Authority (each, together with any person duly appointed and acting in such capacity, individually referred to as an “Authorized Representative”) the power to determine certain terms and conditions of the Credit Facility, the Revolving Credit Agreement, the Promissory Note and the Fee Letter, subject to the limits and conditions established in this Authorizing Resolution.

NOW, THEREFORE, BE IT RESOLVED by the Members of the Michigan State Housing

Development Authority as follows:

ARTICLE I AUTHORITY AND DEFINITIONS

101. Authority for Authorizing Resolution. This Authorizing Resolution is adopted

pursuant to the authorization contained in the Act.

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102. Definitions. In addition to terms that are defined elsewhere in this Authorizing Resolution, the following words and terms, unless the context otherwise requires, shall have the following meanings:

“Act” means Act 346, Michigan Public Acts of 1966, as amended. “Fee Letter” means the Fee Letter provided for by the Revolving Credit Agreement,

which sets for certain fees payable by the Authority in connection with the Revolving Credit Agreement and the Loan.

“Loan” means the one or more loans extended by the Lender to the Authority pursuant to

the Credit Facility and as evidenced by the Revolving Credit Agreement and the Promissory Note.

“Promissory Note” means the Promissory Note provided for by the Revolving Credit

Agreement, which requires the Authority to repay the Loan as provided for by the Revolving Credit Agreement.

“Revolving Credit Agreement” means the Revolving Credit Agreement between the

Authority and the Lender setting forth the terms and conditions of the Credit Facility.

ARTICLE II AUTHORIZATION TO EXECUTE REVOLVING

CREDIT AGREEMENT, PROMISSORY NOTE AND FEE LETTER

201. Form of Revolving Credit Agreement and Authorization to Sign Revolving Credit Agreement. The form of the Revolving Credit Agreement has been presented to the Authority. Each Authorized Representative is authorized to negotiate, execute and deliver, on behalf of the Authority, the Revolving Credit Agreement, in substantially the form presented at this meeting, with such changes as an Authorized Representative deems necessary and desirable and not materially adverse to the Authority and provided that the terms of the Revolving Credit Agreement are within the parameters set forth in this Authorizing Resolution including, but not limited to, the parameters set forth in Section 303.

202. Authorization to Sign Promissory Note. The Revolving Credit Agreement shall

include as an exhibit the form of Promissory Note that shall provide for the Authority to repay the Loan as provided for by the Revolving Credit Agreement and the Fee Letter, and each Authorized Representative is hereby authorized to execute the Promissory Note.

203. Form of Fee Letter and Authorization to Sign Fee Letter. The form of the Fee

Letter has been presented to the Authority. Each Authorized Representative is authorized to negotiate, execute and deliver, on behalf of the Authority, the Fee Letter, in substantially the form presented at this meeting, with such changes as an Authorized Representative deems necessary and desirable and not materially adverse to the Authority and provided that the terms of the Fee Letter are within the parameters set forth in this Authorizing Resolution including, but not limited to, the parameters set forth in Section 303.

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ARTICLE III

AUTHORIZATION OF LOAN 301. Principal Amount. The Authority hereby authorizes the revolving Credit Facility

in the aggregate principal amount not to exceed $100,000,000 outstanding at any given time, and subject to the terms and conditions of this Authorizing Resolution.

302. Purposes. The Authority shall use the proceeds of the Loan (i) for the purpose of

financing the acquisition of new single-family mortgage loans and down payment assistance loans, and (ii) if approved by an Authorized Representative, for the purpose of paying the costs related to establishing and documenting the Credit Facility.

303. Parameters for the Credit Facility, Revolving Credit Agreement, Promissory

Note and Fee Letter. Interest shall accrue and be payable on the Loan in the manner to be set forth in the Revolving Credit Agreement, the Promissory Note and the Fee Letter, and as approved by an Authorized Representative. The Loan may be disbursed in one or more installments. The Loan shall be revolving in nature such that the limitation on the maximum principal amount of the Loan shall apply to the principal amount of the Loan outstanding at any given time. The maturity date of the Loan shall be set forth in the Revolving Credit Agreement and the Promissory Note, and as approved by an Authorized Representative, subject to the limitation set forth below. Notwithstanding anything in this Authorizing Resolution to the contrary, in no event shall an Authorized Representative approve any terms with respect to the Credit Facility, the Loan, the Revolving Credit Agreement, the Promissory Note and the Fee Letter that do not comply with the following parameters:

(a) Maximum Principal Amount of the Loan. The aggregate principal amount

of the Loan outstanding at any one time shall not exceed $100,000,000. (b) Maturity Date of the Loan. The initial maturity date of the Loan shall not be

later than June 1, 2023, and the Revolving Credit Agreement may provide for up to two extensions of the maturity date of the Loan of not more than two years each, on terms substantially similar to those set forth in the Revolving Credit Agreement, each of which extensions must be approved by an Authorized Representative.

(c) Initial Interest Rate. The interest rate on the Loan shall be a floating rate,

based on an index agreed upon between the Lender and the Authority, plus a spread, but such spread shall not exceed fifty basis points (0.50%) based on the Authority’s current general obligation credit rating. Such spread may increase if the Authority’s general obligation credit rating decreases, but in no event shall such spread exceed one hundred twenty-five basis points (1.25%) except in such circumstances when the Authority is in default under the Revolving Credit Agreement.

(d) Fee for unused portion of the Credit Facility. Any fee charged by the Lender

based on any portion of the Credit Facility not drawn by the Authority shall not exceed thirty basis points (0.30%) per annum of such portion of the Loan that is not drawn by the

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Authority. Such fee may increase if the Authority’s general obligation credit rating decreases, but in no event shall such fee exceed 100 basis points (1.00%) except in such circumstances when the Authority is in default under the Revolving Credit Agreement.

(e) Periodic Payments of Interest on the Loan. The Promissory Note and

Revolving Credit Agreement shall require payments of interest on a periodic basis, but in no event shall such payments be less frequently than semi-annually.

(f) Default Interest Rate. The Credit Facility shall include a default interest rate

and a default rate for the unused portion of the Credit Facility, both as described in the form of the Revolving Credit Agreement or the Fee Letter presented to the Authority at this meeting. 304. General Obligation of the Authority. The Promissory Note and the obligations of

the Authority under the Revolving Credit Agreement shall be a general obligation of the Authority, payable out of the revenues or money of the Authority, and shall not be secured by any specific assets.

305. Prepayment. The Authority shall be allowed to prepay the Loan in whole or in part prior to the maturity date of the Loan on the terms to be set forth in the Revolving Credit Agreement as approved by an Authorized Representative.

ARTICLE IV DEPOSIT AND USE OF LOAN PROCEEDS

401. Deposit of Loan Proceeds. The proceeds of the Loan shall be deposited in an

account as designated by an Authorized Representative.

402. Use of Loan Proceeds. The use of the Loan Proceeds shall be subject to the restrictions set forth in this Authorizing Resolution and to any restrictions set forth in the Revolving Credit Agreement.

ARTICLE V EXECUTION AND DELIVERY OF

PROMISSORY NOTE 501. Execution and Delivery of Promissory Note. The Promissory Note shall be

executed in the name of the Authority by an Authorized Representative. The Promissory Note shall be delivered by an Authorized Representative to the Lender at a location mutually agreeable to the Authority and the Lender.

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ARTICLE VI MISCELLANEOUS

601. Ratification of Actions. The actions of any Authorized Representative previously

taken pursuant to the provisions of this Authorizing Resolution including, but not limited to, the undertaking of discussions regarding the Credit Facility and distributing the Request For Proposals To Provide Credit Facility are hereby ratified and confirmed in all respects.

602. Additional Actions. (a) Any Authorized Representative is hereby authorized and

directed to execute such other documents and certifications, and to perform such other acts as may be necessary or convenient for the proper execution and delivery of the Revolving Credit Agreement, the Promissory Note and the Fee Letter, subject to the terms and conditions of this Authorizing Resolution.

(b) Any Authorized Representative is hereby authorized to pay from the Authority’s

general operating fund all funds necessary to pay the costs related to establishing and documenting the Credit Facility and the Loan.

603. Effective Date. This Authorizing Resolution shall take effect immediately. If the

execution copies of the Revolving Credit Agreement, the Promissory Note and the Fee Letter are not delivered to the Lender on or before May 31, 2021, the authorization granted by this Authorizing Resolution shall lapse. 4841-7864-1881.6

M E M O R A N D U M

TO: Authority Members FROM: Gary Heidel, Acting Executive Director DATE: February 25, 2021 RE: Intent to Reimburse Expenditures for the Purchase of Mortgage Loans

RECOMMENDATION:

I recommend that the Michigan State Housing Development Authority (the “Authority”) approve the attached resolution that declares the Authority’s intent to reimburse itself with anticipated bond proceeds for the financing and purchasing of mortgage loans. EXECUTIVE SUMMARY: From time to time, the Authority utilizes General Operating or other funds for the purchase of single-family mortgages. When the Authority advances these funds, it does so with the intent of being reimbursed at a future date with proceeds from a related bond sale. Internal Revenue Service (“IRS”) regulations require that if the Authority intends to reimburse itself with proceeds from a future bond sale, it must state its intent to do so within 60 days of the purchase of the mortgages. The attached resolution will fulfill the IRS requirement. ISSUES, POLICY CONSIDERATIONS, AND RELATED ACTIONS: None.

DRAFT

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY RESOLUTION DECLARING OFFICIAL INTENT TO REIMBURSE EXPENDITURES

FOR FINANCING AND PURCHASING MORTGAGE LOANS

February 25, 2021

WHEREAS, the members of the Michigan State Housing Development Authority (the “Authority”) propose to authorize the issuance of tax-exempt qualified mortgage bonds pursuant to Internal Revenue Code Section 143 in one or more series (the “Bonds”) pursuant to the General Resolution Authorizing the Issuance of Michigan State Housing Development Authority Single-Family Mortgage Revenue Bonds adopted on December 17, 1987, as amended for the purpose of providing funds for the financing and purchasing of mortgage loans (the “Mortgage Loans”); and

WHEREAS, it is anticipated that the Authority may advance all or a portion of the funds necessary to finance or purchase such Mortgage Loans prior to the issuance of the Bonds, such advances to be repaid from the proceeds of the Bonds; and

WHEREAS, Section 1.150-2 of the U.S. Department of Treasury Regulations on Income Tax (the “Reimbursement Regulations”) specifies conditions under which a reimbursement allocation may be treated as an expenditure of proceeds of tax-exempt obligations, and the Authority intends by this resolution to qualify amounts advanced by the Authority to finance or purchase Mortgage Loans for reimbursement from proceeds of the Bonds in accordance with the requirements of the Reimbursement Regulations.

NOW, THEREFORE, BE IT RESOLVED by the members of the Authority that this Resolution Declaring Official Intent to Reimburse Expenditures for Financing and Purchasing Mortgage Loans (the “Reimbursement Resolution”) is adopted as follows:

Section 1. The maximum principal amount of the Bonds expected to be issued is $900,000,000.

Section 2. The Authority hereby declares its official intent to issue the Bonds for the purpose of financing and purchasing Mortgage Loans, and hereby declares that it reasonably expects to seek reimbursement from the proceeds of the Bonds for the Authority’s advances as anticipated by this Reimbursement Resolution.

Section 3. The Bonds shall be authorized by proper proceedings of the Authority subsequent to the adoption of this Reimbursement Resolution.

Section 4. All resolutions and parts of resolutions insofar as the same may be in conflict herewith are hereby rescinded.

Section 5. This Reimbursement Resolution is effective immediately upon adoption.

M E M O R A N D U M

TO: Authority Members FROM: Gary Heidel, Acting Executive Director DATE: February 25,2021 RE: Village Glen, MSHDA No. 1099

RECOMMENDATION: I recommend the Michigan State Housing Development Authority (the “Authority”) approve a waiver of the prepayment prohibition for the first mortgage on Village Glen, MSHDA No. 1099. EXECUTIVE SUMMARY: Village Glen (the “Development”), owned by Garfield Township Housing Partners Limited Dividend Housing Association Limited Partnership, is a 120-unit development located in Traverse City. The Development consists of 82 two-bedroom units and 38 three-bedroom units for family housing. The Development was originally constructed in 2005 under the Authority’s tax-exempt bond TEAM direct lending program with Low Income Housing Tax Credits. The owner is seeking permission from the Authority to prepay the first mortgage loan. Since the Development is ineligible for prepayment until October 2026, the Authority will require the payment of lost spread and swap termination fee to make this transaction revenue neutral to the Authority. The mortgage note also requires a prepayment penalty as a condition of prepayment. In addition, the Development will be required to keep all income and rent restrictions associated with the first mortgage in place until the original loan prepayment eligibility date on October 21, 2026. ADVANCING THE AUTHORITY’S MISSION: The term of affordability will not be affected by this transaction, and the Development will remain affordable until the original prepayment eligibility date on October 21, 2026. MUNICIPAL SUPPORT: There has not been municipal support requested as part of the prepayment request.

COMMUNITY ENGAGEMENT/IMPACT: There has not been community engagement as part of the prepayment request; however, the units will remain affordable through the stated period of affordability. RESIDENT IMPACT: No residents will be displaced due to the prepayment. ISSUES, POLICY CONSIDERATIONS, AND RELATED ACTIONS: None.

ACTION REPORT

DATE: February 25, 2021

ASSET MANAGER: Amy Rollis MSHDA #: 1099

DEVELOPMENT NAME: Village Glen LOCATION: 1336 Birch Tree Lane

Traverse City, MI 49686 MORTGAGE CUTOFF DATE: October 21, 2006

ASSIGNED ATTORNEY: Corrie Schmidt-Parker MANAGEMENT AGENT: Michigan Asset Group

MANAGING GENERAL PARTNER(S):

Fram Garfield, LLC (Doug Stratton)

TAX CREDIT SYNDICATOR: Great Lakes Capital Fund for Housing LP XI

RECOMMENDATION:

I recommend approval for the waiver of the prepayment prohibition for the mortgage loan for Village Glen, MSHDA #1099.

I. BACKGROUND: Village Glen is a 120-unit family development (the “Development”) consisting of 82 two-bedroom, and 38 three-bedroom units located in Traverse City. The Development was originally built in 2005 and financed under the TEAM Tax-Exempt Bond financing program with Low-Income Housing Tax Credits (“LIHTC”). The owner is seeking permission from MSHDA to prepay the mortgage loan (“Mortgage Loan”) based upon a plan to sell the Development in April 2021 without MSHDA financing. Since the change in ownership will take place after the debt is repaid the change in ownership component of the transaction falls outside MSHDA’s Resale Policy. The ownership change will be approved in a manner consistent with all other projects that do not have MSHDA bond financing. Since the Development is ineligible for prepayment until October 21, 2026, the Authority will require the payment of the lost interest spread and a swap termination fee, in order to make this transaction revenue-neutral to the Authority. The mortgage note also requires a prepayment penalty of 1% of the balance being paid. In addition, the MSHDA regulatory agreement will remain in effect until the original prepayment eligibility date, which is October 21, 2026, after that date the MSHDA regulatory agreement will be discharged. The LIHTC restrictions will remain in effect and will not be altered by this transaction. The LIHTC restrictions will preserve affordability until December 31, 2040. The new owners intend to utilize HUD financing for the sale. No residents will be displaced due to the prepayment of the MSHDA loans.

Village Glen, MSHDA #1099 February 25, 2021 Page 2

II. CURRENT FINANCIAL CONDITION:

A. The Development currently has 2 vacant units, with an economic vacancy of 2.2%. B. Liquidity has increased from $192,308 in November 2019 to $263,049 in November

2020. C. The Development currently has $9,076 in receivables, of which $743 are aged over

60 days. D. The Development currently has $35,186 in payables, of which $0 are aged over 60

days.

III. SUMMARY OF PROPOSAL:

A. MSHDA has received notification from the owner of the intent to prepay the Mortgage Loan.

B. As a condition of the prepayment ownership has agreed to pay lost spread, which is expected to be approximately $862,058, based on a projected payoff date of April 30, 2021. Lost spread varies depending on financial market conditions, the exact amount will be determined on the day of the prepayment.

C. Ownership has also agreed to pay a swap termination fee associated with the underlying bond financing as a condition of prepayment. This amount is estimated to be $991,560. Swap termination fees vary depending on financial market conditions, the exact amount will be determined on the day of prepayment.

D. There is a prepayment penalty associated with this mortgage note equal to the sum of 1% of the balance being prepaid. Ownership has agreed to pay this amount, which is expected to be approximately $67,008, based upon a payoff date of April 30, 2021.

E. After the first mortgage is paid in full the MSHDA mortgage will be discharged. F. The MSHDA regulatory agreement will remain in effect until the original mortgage

prepayment eligibility date, which is October 21, 2026, but it will be amended to reduce the level of monitoring required by MSHDA, as there is no longer a risk of financial loss. Upon mortgage payoff the Development will be monitored in the same manner as a LIHTC-only property. After October 21, 2026, the MSHDA regulatory agreement will be discharged.

G. The LIHTC regulatory agreement will remain in effect and will not be altered by this transaction.

H. Authority staff has verified that no open conditions exist related to the Development for either owner or agent.

IV. CURRENT DEVELOPMENT STATUS:

Program Type: TEAM (Tax Exempt Bond w/LIHTC) Original Mortgage Amount: $8,450,079 Current Mortgage Amount: $6,744,446 Payment Status: Current Current Interest Rate: 5.5% Mortgage Prepayment Eligibility Date:

Prohibited

Initial LIHTC Compliance End Date: December 31, 2020 Ext. Use LIHTC Compliance End Date: December 31, 2040

Vacancy: 2 Units are Vacant or 1.7% Economic Vacancy: 2.2%


Reserve and Escrow Balances as of January 20, 2021: Replacement Reserve: $ 1,110,456 ORC: $ 44,124 Operating Assurance: $ 1,301

Financial Status: Liquidity: $ 263,049 One Month’s Rent Potential: $ 122,374

Prior Authority Action:

• None

V. RENT SCHEDULE:

Bedroom

# Units

# Units Vacant

Current Rents

Utility Allowance

2 BD - 60% 82 2 $1013 $82 3 BD - 60% 38 0 $1194 $92 TOTAL 120 2

VI. SPECIAL CONDITIONS AND/OR REQUIREMENTS:

A. The parties must provide documents as are deemed necessary by the Director of Legal Affairs to effectuate the terms and conditions outlined in this report.

B. Any penalties and/or fees will be paid prior to or upon payoff of the outstanding mortgage loan.


APPROVED:

_______________________________________________ Troy Thelen Date Director of Asset Management

Jeffrey J. Sykes Date Chief Financial Officer

Clarence L. Stone, Jr Date Director of Legal Affairs

Gary Heidel Date Acting Executive Director

2/18/2021

2/18/2021

2/18/2021

1

DRAFT


RESOLUTION AUTHORIZING WAIVER OF MORTGAGE LOAN PREPAYMENT PROHIBITION

VILLAGE GLEN, MSHDA DEVELOPMENT NO. 1099

TRAVERSE CITY, GRAND TRAVERSE COUNTY, MICHIGAN

February 25, 2021 WHEREAS, the Michigan State Housing Development Authority (the "Authority") made a mortgage loan (the “Mortgage Loan”) to Garfield Township Housing Partners Limited Dividend Housing Association Limited Partnership, a Michigan limited partnership (the “Mortgagor”), for the acquisition and construction of Village Glen, MSHDA Development No. 1099 (the “Development”); and WHEREAS, the Mortgage Loan documents for the Development currently prohibit prepayment of the Mortgage Loan; and WHEREAS, the Mortgagor has requested that the Authority waive the prepayment prohibition and allow a payoff of the Mortgage Loan for the reasons set forth in the accompanying Action Report dated February 25, 2021 (the "Action Report"); and WHEREAS, the Acting Executive Director recommends that the Authority waive the prepayment prohibition and allow the prepayment of the Mortgage Loan, subject to compliance with the terms and conditions set forth in the Action Report; and WHEREAS, the Authority concurs in the recommendation of the Acting Executive Director. NOW, THEREFORE, the Michigan State Housing Development Authority resolves as follows:

1. The Authority hereby approves the prepayment of the Mortgage Loan, subject to the terms and conditions described in the accompanying Action Report.

2. The Executive Director, Chief Housing Investment Officer, Chief Financial Officer, Director of Legal Affairs, Deputy Director of Legal Affairs or any person duly appointed to act in that capacity, each is hereby authorized to (a) consent to a modification of the terms and conditions set forth in the attached Action Report, as he or she shall deem advisable and appropriate, and (b) enter into such agreements as may be necessary or appropriate to effectuate the prepayment transaction, including without limitation discharges, releases, swap termination agreements, and amended regulatory agreements.

M E M O R A N D U M

TO: Authority Members FROM: Gary Heidel, Acting Executive Director DATE: February 25, 2021 RE: Union at Oak Grove, Development No. 3837

RECOMMENDATION: I recommend that the Michigan State Housing Development Authority (the “Authority”) adopt resolutions that 1) determine Mortgage Loan Feasibility as to the following proposal, 2) authorize tax-exempt bond and Mortgage Resource Fund (“MRF”) mortgage loans in the amounts set forth in the staff report, 3) authorize a waiver of certain Multifamily Direct Lending Parameters concerning the payment in lieu of taxes (“PILOT”) and repayment of the MRF loan, and 4) authorize the Executive Director, or an Authorized Officer of the Authority, to issue the Authority’s Mortgage Loan Commitment with respect to this development, subject to the terms and conditions set forth in the staff report.

PROJECT SUMMARY: MSHDA No: 3837 Development Name: Union at Oak Grove Development Location: Township of Howell, Livingston

County, Michigan Sponsor: Union Development Holdings, LLC Mortgagor: Union at Oak Grove Limited Dividend

Housing Association Limited Partnership

Number of Units: 220 Affordable Family Units Total Development Cost: $42,550,119 TE Bond Construction and Permanent Loan: $27,251,417 MSHDA Mortgage Resource Fund Loan: Other Funds:

$314,221 $1,564,883 in Deferred Development Fee, and $127,676 in Income from Operations.

EXECUTIVE SUMMARY:

Union at Oak Grove (“the Development”) will provide much needed new construction affordable housing to the Township of Howell, Livingston County area of Michigan. The Development will offer 220 units consisting of 1, 2, and 3 bedrooms for income qualified households with incomes at 60% of area median income (“AMI”) consistent with the Authority’s affordability requirements. The unit mix will be 72 one-bedroom units, 108 two-bedroom units, and 40 three-bedroom units, with all units featuring modern amenities including washer/dryers, one covered parking space per unit as well as additional resident and guest surface parking.

Union Development Holdings, LLC (the “Sponsor”), is a new Sponsor to the Authority; however, they have housing development experience with over 300 affordable units (4 separate projects) operating in Indiana. They also have a 159-unit development under construction in Indianapolis.

I am recommending Board approval for the following reasons:

• The financing of the Development results in a new earning asset for the Authority. • The Development provides 100% affordable housing to low-income families. • The transaction creates an opportunity to work with a new Sponsor that has experience

developing low-income housing.

ADVANCING THE AUTHORITY’S MISSION:

• The new construction development will create housing with an affordability period up to 30 years.

• The Development will provide new construction affordable housing to working families. • All 220 units will be available to low-income families where incomes do not exceed 60%

of area-median income. MUNICIPAL SUPPORT:

• The Township of Howell approved a 7% PILOT. The Authority requested language changes to the PILOT that were preliminarily approved at the Township Meeting on February 8, 2021, and the amended PILOT was published on February 16, 2021. The Sponsor anticipates adoption of the amended PILOT following expiration of the publication period.

COMMUNITY ENGAGEMENT/IMPACT:

• The Sponsor has engaged the community by working with Oakland Livingston Human Service Agency to provide home ownership training and other similar support services for the tenants. The services will be provided at no cost to the tenants.

• This project will impact the community by adding 220 units of new construction to low-income, working families. The affordability period for these units will be at 60% AMI.

RESIDENT IMPACT:

• This is a new construction proposal on a vacant parcel so there is no resident impact.

ISSUES, POLICY CONSIDERATIONS, AND RELATED ACTIONS: The Development will require a waiver of the following Authority Multifamily Direct Lending Parameter concerning a PILOT (as provided for in Section VI I 2.) conditioned on the PILOT being found acceptable prior to the Authority’s disbursement of any funds:

• Proposals that do not include an approved PILOT arrangement will be underwritten based on the ad valorem taxes applicable to the property.

• For a proposal to be underwritten on the basis of a PILOT, the PILOT must be approved prior to Authority Board consideration.

The Development will also require a waiver of the Authority’s Multifamily Direct Lending Parameters concerning repayment of gap loans. Section II B 2(f) state that annual payments equal to 50% of cash available for distribution are required on gap loans after 12 years or the year in which the sum of all surplus cash available for distribution equals the amount of deferred developer fee. In this case, the 50% payment will begin immediately following the first year after construction completion because the development fee is over $2.1 million. Furthermore, any cost savings and residual receipts during the construction period will be used to pay down the gap loan.

The governing body of the local municipality, the Township of Howell, has preliminarily approved a PILOT ordinance with a term of 30 years, ending on May 11th, 2052. The Tax-Exempt Loan will be amortized over 40 years but will mature in the 30th year and be due upon the expiration of the PILOT ordinance. The Authority’s MRF Loan terms will be reduced from 50 years to 30 years to be coterminous with the Township’s PILOT ordinance. The affordability period for tenant rents will continue beyond the balloon-payment date to the extent necessary to comply with the Authority’s bond financing and the Low-Income Housing Tax Credit (“LIHTC”) Regulatory Agreement.

MORTGAGE LOAN FEASIBILITY/COMMITMENT STAFF REPORT February 25, 2021 RECOMMENDATION: I recommend that the Michigan State Housing Development Authority (the “Authority”) adopt resolutions that 1) determine Mortgage Loan Feasibility as to the following proposal, 2) authorize tax-exempt bond and Mortgage Resource Fund (“MRF”) mortgage loans in the amounts set forth in this report, 3) authorize waivers of certain Multifamily Direct Lending Parameters concerning a payment in lieu of taxes (“PILOT”) and repayment of the MRF loan, and 4) authorize the Executive Director, or an Authorized Officer of the Authority, to issue the Authority’s Mortgage Loan Commitment with respect to this development, subject to the terms and conditions set forth in this report. MSHDA No.: 3837 Development Name: Union at Oak Grove Development Location: Township of Howell, Livingston County, Michigan Sponsor: Union Development Holdings, LLC Mortgagor: Union at Oak Grove Limited Dividend Housing Association Limited Partnership TE Bond Construction and Permanent Loan: $27,251,417 (64.05% of total development cost (“TDC”) MSHDA Permanent MRF Loan: $314,221 Total Development Cost: $42,550,119 Mortgage Amortization and Term: 40-year amortization with a balloon at 30 years for the tax-

exempt bond loan; 30 years for the MRF loan Interest Rate: 3.95% for the tax-exempt bond loan; and 3% simple interest

for the MRF loan Program: Tax-Exempt Bond and Gap Financing Programs Number of Units: 220 family units of new construction Unit Configuration: 72 one-bedroom, one-bath units; 108 two-bedroom, two-

bath units; 40 three-bedroom, two-bath units Builder: Annex Construction of Howell, LLC Syndicator: National Development Council (“NDC”) Date Application Received: July 29, 2020 HDO: Ryan Koenigsknecht

Issuance of the Authority's Mortgage Loan Commitment is subject to fulfillment of all Authority processing and review requirements and obtaining all necessary staff approvals as required by the Authority's underwriting standards.

Mortgage Feasibility/Commitment Staff Report Union at Oak Grove, MSHDA No. 3837

Township of Howell, Livingston County February 25, 2021

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ISSUES, POLICY CONSIDERATIONS AND RELATED ACTIONS: Union at Oak Grove will require a waiver of the following Authority Multifamily Direct Lending Parameter concerning a PILOT (as provided for in Section VI I 2.) conditioned on the PILOT being found acceptable prior to the Authority’s disbursement of any funds (see Special Condition No. 2):

• Proposals that do not include an approved PILOT arrangement will be underwritten based on the ad valorem taxes applicable to the property.

• For a proposal to be underwritten on the basis of a PILOT, the PILOT must be approved prior to Authority Board consideration.

The Development will also require a waiver of the Authority’s Multifamily Direct Lending Parameters concerning repayment of gap loans. Section II B 2(f) state that annual payments equal to 50% of cash available for distribution are required on gap loans after 12 years or the year in which the sum of all surplus cash available for distribution equals the amount of deferred developer fee. In this case, the 50% payment will begin immediately following the first year after construction completion because the development fee is over $2.1 million. Furthermore, any cost savings and residual receipts during the construction period will be used to pay down the gap loan (see Special Condition No. 4). The governing body of the local municipality, the Township of Howell, has preliminarily approved a PILOT ordinance with a term of 30 years, ending on May 11th, 2052. The Tax-Exempt Loan will be amortized over 40 years but will mature in the 30th year and be due upon the expiration of the PILOT ordinance. The Authority’s MRF Loan term will be reduced from 50 years to 30 years to be coterminous with the Township’s PILOT ordinance. The affordability period for tenant rents will continue beyond the balloon-payment date to the extent necessary to comply with the Authority’s bond financing and the Low-Income Housing Tax Credit (“LIHTC”) Regulatory Agreement. EXECUTIVE SUMMARY: Union at Oak Grove (“the Development”) will provide much needed new construction affordable housing to the Township of Howell, Livingston County area of Michigan. The Development will offer 220 units consisting of 1, 2, and 3 bedrooms for income qualified households with incomes at 60% of area median income (“AMI”) consistent with the Authority’s affordability requirements. The unit mix will be 72 one-bedroom units, 108 two-bedroom units, and 40 three-bedroom units, with all units featuring modern amenities including washer/dryers, one covered parking space per unit as well as additional resident and guest surface parking. Union Development Holdings, LLC, is a new Sponsor to the Authority; however, they have housing development experience with over 300 affordable units (4 separate projects) operating in Indiana. They also have a 159-unit development under construction in Indianapolis. Structure of the Transaction and Funding: There are several elements to this transaction that are common to new construction transactions:



Page 3 of 16

• A tax-exempt bond construction and permanent mortgage loan will be provided by the Authority (the “Mortgage Loan”). The Mortgage Loan will be in the amount of $27,251,417 at 3.95% interest with 26-monthly interest only payments (a 22-month construction term and a 4-month rent-up period) required under the construction loan. The permanent financing date will commence on the first day of the month following the month in which the 26-month construction loan term expires or such later date as determined by an Authorized Officer of the Authority (the “Permanent Financing Date”).

• The permanent tax-exempt bond loan is based upon the current rents, less vacancy loss, payments to reserves and escrows, operating costs based on historical data unless modified by project improvements and construction and soft costs at levels appropriate for this specific transaction. The permanent loan includes a 1.15 debt service coverage ratio, an annual interest rate of 3.95%, with a fully amortizing term of 40 years commencing on the Permanent Financing Date but will balloon in the 30th year to be coterminous with the PILOT term. The Mortgage Loan will be funded on the Permanent Financing Date and will be in First Position.

• A permanent subordinate loan using an Authority MRF Loan (the “MRF Loan”) in the amount of $314,221 will be provided at 3% simple interest. The MRF Loan will be in Second Position.

• Equity support comes from an investment related to the 4% Low Income Housing Tax

Credit (“LIHTC”) in the estimate amount of $13,291,922.

• Income from operations will be used as a source of funding to make the interest only payments and the tax and insurance payments during the construction period in the amount of $127,676.

• The Sponsor has agreed to defer $1,564,883 of the developer fee to help fill the remaining funding gap.

• A 4-month rent-up allowance in the amount identified in the attached proforma will be

required to support interest payments between construction completion and the Mortgage Cut-Off Date, as determined by the Authority.

• An operating assurance reserve (“OAR”) will be required in the amount identified in the

attached proforma. The reserve will be capitalized at closing in an amount which, along with accumulated interest, is expected to meet the Development’s unanticipated operating needs. This reserve will be held by the Authority.

Site Selection: The site has been vetted by Authority Staff and the Authority’s Manager of the Office of Market Research has indicated that the site meets the Authorities current site selection criteria. Market Evaluation: The unit mix as well as the amenities package and rent levels have been approved by the Manager of the Office of Market Research.



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Valuation of the Property: An appraisal dated March 1, 2020 estimates the value at $1,107,000. CONDITIONS: At or prior to (i) issuance of the Authority’s mortgage loan commitment (“Mortgage Loan Commitment”), (ii) the initial Mortgage Loan Closing (the “Initial Closing”), or (iii) such other date as may be specified herein, the new Mortgagor and other members of the Development team, where appropriate, must satisfy each of the following conditions by entering into a written agreement or providing documentation acceptable to the Authority: Standard Conditions:

1. Limitation for Return on Equity:

For each year of the Development's operation, beginning in the year in which the Mortgage Cut-Off Date occurs, payments are limited to 12% of the Mortgagor's equity. For purposes of distributions, the Mortgagor's equity will be the sum of (i) the LIHTC equity; (ii) the brownfield tax credit equity; (iii) the historic tax credit equity; (iv) general partner capital contributions; and (v) any interest earned on an equity escrow held by the Authority (estimated to be a total of $13,291,922). All such payments shall be referred to as "Limited Dividend Payments". The Mortgagor's return shall be fully cumulative. Limited Dividend Payments shall be capped at 12% per annum, until the MRF Loan have been repaid. Thereafter, Limited Dividend Payments may increase 1% per annum until a cap of 25% per annum is reached.

2. Income Limits:

The income limitations for 220 units of this proposal are as follows:

220 units (72 one-bedroom units, 108 two-bedroom units, 40 three-bedroom units) must be available for occupancy by households whose incomes do not exceed the Multifamily Tax Subsidy Project (“MTSP”) 60% income limits, adjusted for family size, until latest of (i) the expiration of the LIHTC “Extended Use Period” as defined in the Development’s LIHTC Regulatory Agreement; (ii) 50 years from Initial Closing; or (iii) so long as any Authority loan remains outstanding.

To the extent units within the Development are subject to multiple sets of income limits, the most restrictive income limit will apply so long as the applicable term of affordability continues.

The income of individuals and AMI shall be determined by the Secretary of the Treasury in a manner consistent with determinations of lower income families and AMI under Section 8 of the U.S. Housing Act of 1937, including adjustments for family size.

3. Limitations on Rental Rates: The Total Housing Expense (contract rent plus tenant-paid utilities) for 220 units is subject



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to the following limitations:

The Total Housing Expense for all 220 units (72 one-bedroom units, 108 two-bedroom units, and 40 three-bedroom units), may not exceed one-twelfth (1/12th) of 30% of 60% of the MTSP limit, adjusted for family size and based upon an imputed occupancy of one and one-half persons per bedroom. This restriction will apply until the latest of (i) the end of the Extended Use Period, (ii) 50 years after Initial Closing; or (iii) so long as any Authority loan remains outstanding.

To the extent units within the Development are subject to multiple sets of rent limits, the most restrictive rent limit will apply so long as the applicable term of affordability continues. While rental increases for these units may be permitted from time to time as the U.S. Department of Housing and Urban Development (“HUD”) publishes updated median income limits, the Mortgagor must further agree that rental increases for targeted units will be limited to not more than 5% for any resident household during any 12-month period.

For the initial lease term of the first household occupying each rent restricted unit in the Development the initial rent may not exceed 105% of the rent approved in this Mortgage Loan Feasibility/Commitment Staff Report. Rental increases on occupied units during any 12-month period will be limited to not more than 5% of the rent paid by the resident household at the beginning of that annual period. Exceptions to this limitation may be granted by the Authority’s Director of Asset Management for extraordinary increases in project operating expenses (exclusive of limited dividend payments) or mortgage loan increases to fund cost overruns pursuant to the Authority's policy on Mortgage Loan increases. Rents on vacated units may be increased to the maximum level permissible by the applicable programs. Rents and utility allowances must be approved annually by the Authority’s Division of Asset Management Exceptions to the foregoing limitations may be granted by the Authority's Director of Asset Management to pay for extraordinary increases in operating expenses (exclusive of Limited Dividend Payments) or to enable the owner to amortize a Mortgage Loan increase to fund cost overruns pursuant to the Authority's policy on Mortgage Loan increases.

4. Covenant Running with the Land:

The Mortgagor must subject the Development site to a covenant running with the land so as to preserve the tax-exempt status of the obligations issued or to be issued to finance the Mortgage Loan. This covenant will provide that each unit must be rented or available for rental on a continuous basis to members of the general public for a period ending on the latest of the date which is 15 years after the date on which 50% of the residential units in the Development are occupied, the first day on which no bonds are outstanding with respect to the project, or the date on which assistance provided to the project under Section 8 of the U.S. Housing Act of 1937 terminates. The income of individuals and area median income shall be determined by the Secretary of the Treasury in a manner consistent with determinations of lower income families and area median income under Section 8 of the U.S. Housing Act of 1937, including adjustments for family size. Until the Secretary of the Treasury publishes its requirements, income of the individuals shall be determined in accordance with Section 8 regulations. Additionally, if LIHTC is awarded to the Development, the Mortgagor must agree to subject the property to the extended low-



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income use commitment required by Section 42 of the Internal Revenue Code.

5. Restriction on Prepayment and Subsequent Use: The Mortgage Loan is eligible for prepayment after the expiration of 15 years after the commencement of amortization. The Mortgagor must provide the Authority with at least 60 days' written notice prior to any such prepayment.

In the event of a prepayment, however, the Mortgagor must pay a prepayment fee equal to the sum of:

a. 1% of the balance being prepaid; b. Any bond call premium, prepayment or swap penalty, or any other cost that the

Authority incurs to prepay the bonds or notes that were used to fund the Mortgage Loan; and

c. Any loss of debt service spread between the Mortgage Loan and the bonds used to finance the loan from the date of the prepayment through the end of the 20th year of amortization.

Once the Mortgagor has been approved for the early prepayment of the underlying loan, it must sign an agreement with the Authority stating it is responsible for the cost of terminating the swap. The Mortgagor can then choose the timing of the termination and participate in the transaction with the swap counterparty. The swap counterparty will quote the cost of terminating the swap and the Mortgagor will have the ability to execute the transaction or cancel at its sole discretion. If the Mortgagor chooses not to terminate the swap, it will forfeit the right to prepay the Mortgage Loan. Subordinate loans are eligible to prepay at any time upon 60 days prior written notice to the Authority, but prepayment may not extinguish federal affordability and compliance requirements.

6. Operating Assurance Reserve:

At Initial Closing, the Mortgagor shall fund an operating assurance reserve ("OAR") in the amount equal to 4 months of estimated Development operating expenses (estimated to be $897,822). The OAR will be used to fund operating shortfalls incurred at the Development and will be disbursed by the Authority in accordance with the Authority's written policy on the use of the Operating Assurance Reserve, as amended from time to time. The OAR must be either (i) fully funded with cash, or (ii) funded with a combination of cash and an irrevocable, unconditional letter of credit acceptable to the Authority, in an amount that may not exceed 50% of the OAR requirement. To the extent that any portion of the OAR is drawn for use prior to the final closing of the Mortgage Loan, the Mortgagor must restore the OAR to its original balance at final closing.

7. Replacement Reserve:

The Mortgagor must agree to establish a replacement reserve fund (“Replacement Reserve”) by making annual deposits to the Replacement Reserve, beginning on the Mortgage Cut-Off Date, at a minimum of $300 per unit for the first year of operation, payable in monthly installments, with deposits in subsequent years to be the greater of (i) the prior year’s deposit, increased by 3%, or (ii) a percentage of the Development’s



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projected annual rental income or gross rent potential (“GRP”) for the year using the percentage obtained by dividing the first year’s deposit by the first year’s GRP shown on the operating proforma for the Development attached hereto. The annual deposit to the Replacement Reserve may also be increased to any higher amount that is determined to be necessary by the Authority, based on a capital needs assessment (“CNA") and the Authority’s Replacement Reserve policies. The Authority may update any CNA or obtain a new CNA every 5 years, or upon any frequency, as determined necessary by the Authority.

8. Authority Subordinate Loan(s):

At Initial Closing, the Mortgagor must enter into agreements relating to the MRF Loan. The MRF Loan will be secured by a subordinate mortgage and will bear simple interest at 3% with a 30-year term. Following the first year after construction completion, repayment of the MRF Loan will be made from 50% of any surplus cash available for distribution. Such payments shall be applied first to accrued interest, then to current interest and principal. Payments shall continue until the sale of the Development or refinancing of the Mortgage Loan, at which time the MRF Loan shall be due in full. If the MRF Loan is still outstanding, then following repayment of the Mortgage Loan and continuing on the first day of every month thereafter, the Mortgagor shall make monthly payments of principal and interest equal to the monthly payments that were required on the Mortgage Loan on the first day of every month until the MRF Loan is paid in full, sale of the Development or the date that is 30 years from date of Initial Closing, whichever occurs first.

9. Architectural Plans and Specifications; Contractor’s Qualification Statement:

Prior to Mortgage Loan Commitment, the architect must submit architectural drawings and specifications that address all design review comments, acceptable to the Authority’s Chief Architect and the Director of Development. Prior to Mortgage Loan Commitment, the general contractor must submit AIA Document A305 as required by the Authority’s Chief Architect.

10. Owner/Architect Agreement:

Prior to Mortgage Loan Commitment, the Mortgagor must provide the Authority with an

executed Owner Architect Agreement acceptable in form and substance to the Director of Legal Affairs.

11. Trade Payment Breakdown:

Prior to Mortgage Loan Commitment, the general contractor must submit a signed Trade Payment Breakdown acceptable to the Authority’s Design and Construction Manager.

12. Cost Certification:

The contractor’s cost certification must be submitted within 90 days following the completion of construction, and the Mortgagor’s cost certification must be submitted within 90 days following the Mortgage Cut-off Date. For LIHTC, the owner is obligated to submit



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cost certifications applicable to itself and the contractor prior to issuance of IRS form 8609 (see LIHTC Program Cost Certification Guidelines).

13. Environmental Review and Indemnification:

Prior to Mortgage Loan Commitment, the Mortgagor must address any outstanding environmental issues, in form and substance acceptable to the Authority’s Environmental Review Officer.

At Initial Closing, the Mortgagor must enter an agreement to indemnify the Authority for any loss, damage, liability, claim, or expense which it incurs as a result of any violation of environmental laws. The indemnification agreement must be acceptable to the Director of Legal Affairs.

14. Title Insurance Commitment and Survey:

Prior to Mortgage Loan Commitment, the Mortgagor must provide an updated title insurance commitment, including zoning, pending disbursement, comprehensive, survey and such other endorsements as deemed necessary by the Authority’s Director of Legal Affairs. The updated title commitment must contain only exceptions to the insurance acceptable to the Authority’s Director of Legal Affairs. Additionally, prior to Mortgage Loan Commitment, the Mortgagor must provide a surveyor’s certificate of facts together with an ALTA survey certified to the 2016 minimum standards, and that appropriately reflects all easements, rights of way, and other issues noted on the title insurance commitment. All documents must be acceptable to the Director of Legal Affairs.

15. Organizational Documents/Equity Pay-In Schedule:

Prior to Mortgage Loan Commitment, the Mortgagor must submit a substantially final form syndication partnership agreement, including an equity pay-in schedule, that is acceptable in form and substance to the Director of Development and Director of Legal Affairs. At or prior to Initial Closing, the final, executed syndication partnership agreement must become effective and the initial installment of equity must be paid in an amount approved by the Director of Development.

16. Designation of Authority Funds:

The Authority reserves the express right, in its sole discretion, to substitute alternate subordinate funding sources.

17. Management & Marketing:

Prior to Mortgage Loan Commitment, the management and marketing agent must submit the following documents, which must be found acceptable to the Director of Asset Management:

a. Management Agreement



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b. Marketing Addendum

18. Guaranties:

At Initial Closing, the Sponsor, General Partner, and any entity receiving a developer fee in connection with the Development must deliver certain guaranties. The required guaranties include an operating deficit guaranty and a performance completion guaranty. The required guaranties, the terms thereof and the parties who shall be required to deliver the guaranty must be determined and approved by the Authority’s Director of Development.

19. Financial Statements: Prior to Mortgage Loan Commitment, financial statements for the Sponsor, the guarantor(s) and the general contractor must be reviewed and found acceptable by the Authority’s Chief Financial Officer. If prior to Initial Closing the financial statements that were approved by the Authority become more than 6 months old, the Sponsor, the guarantor(s) and/or the general contractor must provide the Authority with updated financial statements meeting Authority requirements upon request.

20. Future Contributions: To ensure the Authority is contributing the least amount of funding necessary to achieve project feasibility, any decrease in Development costs or future contributions not included in the Development proforma may, at the Authority’s discretion, be utilized to reduce, in equal proportions, any deferred developer fee and Authority soft funds.

21. Ownership of Development Reserves:

At the Initial Closing, the Mortgagor must enter into an agreement confirming the Authority’s ultimate ownership of excess cash reserves, escrows and accounts as may exist at the time the Authority’s mortgage loans are paid off or the Development is sold or refinanced. This agreement must be acceptable to the Authority’s Director of Legal Affairs.

22. Application for Disbursement: Prior to Initial Closing, the Mortgagor must submit an “Application for Disbursement” along with supporting documentation, which must be found acceptable to the Authority’s Director of Development.

Special Conditions:

1. Legal Requirements:

The Mortgagor and/or Sponsor must submit documentation acceptable to the Authority’s Director of Legal Affairs for the items listed below:

• Prior to Initial Closing, update the Title Commitment to reflect acceptable Authority



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language. • Prior to Initial Closing, an updated PILOT must be submitted and reviewed. • Prior to Initial Closing, the Michigan Attorney General’s Office must complete its

review of the transaction and provide the Director of Legal Affairs its recommendation.

• Any other documentation as required by the Director of Legal Affairs, including acceptable evidence of insurance, permits, licenses, zoning approvals, utility availability, payment and performance bonds and other closing requirements.

2. PILOT Obtained Post-Commitment:

The Development is currently subject to ad valorem property taxes; however, the Mortgagor has applied for a PILOT. The Development has been underwritten with a 7% PILOT based on an indication of support from the municipality. Before loan commitment, a PILOT ordinance and/or resolution, acceptable in language, form and substance to the Authority’s Director of Legal Affairs must be provided. If the Development does not obtain a PILOT as describe above, the Development must be re-underwritten and if feasible, presented to the Board. If the Development obtains a PILOT representing a lower PILOT payment amount, any savings generated by the PILOT may be applied, at the sole discretion of an Authorized Officer of the Authority, to reduce one or all of the Authority’s subordinate loans or be applied against any other obligation that the Mortgagor owes the Authority with any remainder deposited in the Development’s Operating Reserve Cash account. .

3. Disbursement through Title Company:

Prior to Initial Mortgage Loan Closing the general contractor must agree that all funds disbursed for the construction of the development will be disbursed directly through a title insurance company to subcontractors and suppliers. The agreement must be acceptable to the Authority's Director of Legal Affairs.

4. Residual receipts and cost savings at the end of the construction period:

Any cost savings and residual receipts identified in any post-construction cost certification or audit that would otherwise be used to pay down deferred developer fee will be applied to the MRF loan interest, then principal.

DEVELOPMENT TEAM AND SITE INFORMATION I. MORTGAGOR: Union at Oak Grove Limited Dividend Housing Association Limited Partnership II. GUARANTOR(S):

A. Guarantor #1:

Name: Union Development Holdings, LLC



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Address: 409 Massachusetts Avenue Suite 300 Indianapolis, IN 46204

B. Guarantor #2: Union Development Holdings II, LLC 409 Massachusetts Avenue Suite 300 Indianapolis, IN 46204

III. DEVELOPMENT TEAM ANALYSIS:

A. Sponsor:

Name: Union Development Holdings, LLC Address: 409 Massachusetts Avenue Suite 300 Indianapolis, IN 46204

Individuals Assigned: Sam Hurley Telephone: 317-708-0619 E-mail: [email protected]

1. Experience: The Sponsor does not have previous experience working on

Authority-financed developments. They do have low-income housing experience with LIHTC. Currently, they own and operate over 300 units of affordable housing in Indiana.

2. Interest in the Mortgagor and Members: Union at Oak Grove GP, LLC

.01%; NDC Corporate Equity Fund 99.99% B. Architect:

Name: RQAW Michigan, LLC

Address: 8770 North Street Suite 110 Fishers, IN 46038

Individual Assigned: Victoria Templeton Telephone: 317-588-1799 E-Mail: [email protected]

1. Experience: Architect has no previous experience with Authority-financed developments. She is licensed in Michigan.

2. Architect's License: License number 1301066357, exp. 11/8/2022.

C. Attorney:

Name: Fraser Trebilcock Davis & Dunlap, P.C.



Page 12 of 16

124 West Allegan Street Suite 300 Address: Lansing, MI 48933 Individual Assigned: Mary Levine

Telephone: 517-482-5800 E-Mail: [email protected]

1. Experience: This firm has previous experience in closing

Authority-financed developments.

D. Builder: Name: Annex Construction of Howell, LLC

Address: 511 North Avenue Battle Creek, MI 49037

Individual Assigned: Tom Tomaszewski Telephone: 708-825-8301 E-mail: [email protected] 1. Experience: The firm does not have previous experience in constructing

Authority-financed developments.

2. State Licensing Board Registration: License Number 2102212835, issued in 2016 and in process of renewal.

E. Management and Marketing Agent:

Name: Sterling Group Address: 3900 Edison Lakes Parkway Suite 201 Mishawaka, IN 46545

Individual Assigned: Andrea Vinstra Telephone: 574-243-8547 E-mail: [email protected]

1. Experience: This firm has no significant experience managing Authority-

financed developments; however, they do have experience managing LIHTC properties in Michigan with HUD financing. They have submitted an application to the Authority to become an approved management agent.

F. Development Team Recommendation: GO IV. SITE DATA:

A. Land Control/Purchase Price: A purchase agreement in the amount of $1,100,000 has been executed and amended with an expiration date of April 9, 2021.



Page 13 of 16

B. Site Location:

1946 Oak Grove Road, Howell, MI 48843

C. Size of Site: 52.12 land acres

D. Density:

appropriate

E. Physical Description:

1. Present Use: vacant land

2. Existing Structures: None

3. Relocation Requirements: N/A

F. Zoning: This land has been re-zoned as Multi-family Residential District.

G. Contiguous Land Use:

1. North: single-family residential 2. South: condominiums 3. East: vacant land, single-family residential, Lutheran Church 4. West: single-family residential

H. Tax Information:

The Township of Howell approved a 7% PILOT. The Authority requested language changes to the PILOT that were preliminarily approved at the Township Meeting on February 8, 2021, and the amended PILOT was published on February 16, 2021. The Sponsor anticipates adoption of the amended PILOT following expiration of the publication period.

I. Utilities: Gas – Consumers Energy Electricity – Detroit Edison Water/Sewer – Howell Township

J. Community Facilities:

1. Shopping: Kroger is less than a ¼ mile from the site.

2. Recreation: West Street Park is one mile away. Anytime Fitness is just under one mile



Page 14 of 16

from the Development.

3. Public Transportation: LESA Transportation Service offers public transportation around the Howell area.

4. Road Systems The nearest major roadway is I-96 which runs east to Detroit and west to Lansing. This site is located about a ½ mile off of M-59 which is a very busy roadway in the area.

5. Medical Services and other Nearby Amenities: St. Joseph Mercy Livingston and Howell Hospital are both one mile from the site.

6. Description of Surrounding Neighborhood: The surrounding area consists of a few single-family homes, condominiums, and vacant land.

7. Local Community Expenditures Apparent: As part of this proposal, the Sponsor has indicated to the Township of Howell that it will partner with Oakland Livingston Human Service Agency to offer, at no charge to the residents, homeownership training and other similar support services that can be utilized by the residents to enhance their quality of life.

8. Indication of Local Support: The Township of Howell approved a 7% PILOT. The Authority requested language changes to the PILOT that were preliminarily approved at the Township Meeting on February 8, 2021, and the amended PILOT was published on February 16, 2021. The Sponsor anticipates adoption of the amended PILOT following expiration of the publication period.

V. ENVIRONMENTAL FACTORS:

A Phase I Environmental Site Assessment was submitted to the Authority and has been reviewed by the Authority’s Environmental Manager. (See Standard Condition No. 13).

VI. DESIGN AND COSTING STATUS:

Architectural plans and specifications consistent with the scope of work have been reviewed by the Chief Architect. A response to all design review comments and the submission of corrected and final plans and specifications must be made prior to initial closing.

This proposal will satisfy the State of Michigan barrier-free requirements, the Authority’s policy regarding accessibility and non-discrimination for the disabled, the Fair Housing Amendments Act of 1988, and the HOME requirements for barrier-free vision and hearing designed units. Construction documents must be acceptable to the Authority’s Chief Architect.



Page 15 of 16

VII. MARKET SUMMARY:

The Market study has been reviewed by the Authority’s Chief Market Analyst and found to be acceptable. The Authority’s Chief Market Analyst has reviewed and approved the unit mix, rental structure, and unit amenities.

VIII. EQUAL OPPORTUNITY AND FAIR HOUSING:

The contractor's Equal Employment Opportunity Plan is currently being reviewed and must be approved by the Authority’s Design and Construction Manager prior to initial closing. The management and marketing agent's Affirmative Fair Housing Marketing Plan has been approved.

IX. MANAGEMENT AND MARKETING:

The management/marketing agent has submitted application-level management and marketing information, to be approved prior to initial closing by the Authority’s Director of Asset Management.

X. FINANCIAL STATEMENTS:

The sponsor’s/guarantor’s and the builder’s financial statements have been submitted and are to be approved prior to initial closing by the Authority’s Director of Rental Development.

XI. DEVELOPMENT SCHEDULING:

A. Mortgage Loan Commitment: February 2021 B. Initial Closing and Disbursement: April 2021 C. Construction Completion: February 2023 D. Cut-Off Date: June 2023

XII. ATTACHMENTS:

A. Development Proforma



Page 16 of 16

APPROVALS:

______________________________________________________________________ Chad Benson Date Director of Development

______________________________________________________________________ Clarence L. Stone, Jr. Date Director of Legal Affairs

_____________________________________________________________________ Gary Heidel Date Acting Executive Director

2/17/2021

2/17/2021

Development Union at Oak Grove Income Limits for (Effective April 1,2020)Financing Tax Exempt 1 Person 2 Person 3 Person 4 Person 5 Person 6 Person

MSHDA No. 3837 1 2 3 4 5 6Step Commitment 30% of area median 21,360 24,420 27,480 30,510 32,970 35,400Date 02/25/2021 40% of area median 28,480 32,560 36,640 40,680 43,960 47,200Type New Construction 50% of area median 35,600 40,700 45,800 50,850 54,950 59,000

60% of area median 42,720 48,840 54,960 61,020 65,940 70,800

Rental Income

Unit No. of Units Unit Type Bedrooms Baths Net Sq. Ft.Contract

Rent Utilities

Total Housing Expense Gross Rent

Current Section 8

Contract Rent% of Gross

Rent% of Total

UnitsGross

Square Feet

% of Total Square

Feet

TC Units Square

Feet Unit Type

Max Allowed Housing Expense

60% Area Median Income UnitsFamily Occupancy

A 36 Apartment 1 1.0 798 948 51 999 409,536 14.4% 16.4% 28,728 12.1% 28,728 1,144B 54 Apartment 2 2.0 1,096 1,105 67 1,172 716,040 25.2% 24.5% 59,184 25.0% 0 1,374C 20 Apartment 3 2.0 1,335 1,220 85 1,305 292,800 10.3% 9.1% 26,700 11.3% 26,700 1,587D 36 Apartment 1 1.0 867 948 51 999 409,536 14.4% 16.4% 31,212 13.2% 0 1,144E 54 Apartment 2 2.0 1,163 1,105 67 1,172 716,040 25.2% 24.5% 62,802 26.5% 62,802 1,374F 20 Apartment 3 2.0 1,401 1,220 85 1,305 292,800 10.3% 9.1% 28,020 11.8% 28,020 1,587

2,836,752 0 100.0% 100.0% 236,646 100.0% 146,250

Mgrs 0 0 0.0% 0.0% 0 0.0% 0236,646 146,250

Total Tenant Units 220 Gross Rent Potential 2,836,752 HOME Units SF/Total Units SF 0.0% Within RangeManager Units 0Income Average 35.45% Average Monthly Rent 1,075 # HOME Units/# Total Units 0.0% Within RangeSet Aside 100.00% Gross Square Footage 236,646

Utility AllowancesTenant-Paid Tenant-Paid Owner-Paid

Annual Non-Rental Income Electricity A/C Gas Other Total OverideMisc. and Interest A 25 26 51 Total Income Annual MonthlyLaundry B 35 32 67 Rental Income 2,836,752 236,396Carports 27,200 C 45 40 85 Non-Rental Income 60,200 5,017Other: tenant fees 33,000 D 25 26 51 Total Project Revenue 2,896,952 241,413Other: E 35 32 67

60,200 F 45 40 85G 0 MSHDA Achievable RentsH 0 50% Units 60% Units 80% Units

Water/ Sewer

Livingston County

Instructions

Development Union at Oak GroveFinancing Tax Exempt

MSHDA No. 3837Step CommitmentDate 02/25/2021Type New Construction

TOTAL DEVELOPMENT COSTS Per Unit Total % in

Bas

is

Included in Tax Credit

Basis

Included in Historic TC

Basis Per Unit Total % in

Bas

is

Included in Tax Credit Basis

Included in Historic TC

Basis

Acquisition Project ReservesLand 5,000 1,100,000 0% 0 0 Operating Assurance Reserve 4.0 months Funded in Cash 4,081 897,822 0% 0 0 897,822 897,822Existing Buildings 0 100% 0 0 Replacement Reserve Not Required 0 0 0% 0 0Other: 0 0 0% 0 0 Operating Deficit Reserve 0 0 0% 0 0

Subtotal 5,000 1,100,000 Rent Subsidy Reserve 0 0 0% 0 0Construction/Rehabilitation Syndicator Held Reserve Required 0 0% 0 0

Off Site Improvements 455 100,000 100% 100,000 0 Rent Lag Escrow 0 0 0% 0 0On-site Improvements 227 50,000 100% 50,000 0 Tax and Insurance Escrows 0 0 0% 0 0Landscaping and Irrigation 1,136 250,000 100% 250,000 250,000 Other: 0 0% 0 0Structures 107,318 23,609,900 100% 23,609,900 23,609,900 Other: 0 0% 0 0Community Building and/or Maintenance Facility 1,591 350,000 100% 350,000 350,000 Subtotal 4,081 897,822Construction not in Tax Credit basis (i.e.Carports and Commercial Space) 3,000 660,000 0% 0 0 MiscellaneousGeneral Requirements % of Contract 6.00% Within Range 6,824 1,501,194 100% 1,501,194 1,501,194 Deposit to Development Operating Account (1MGRP) Not Required 0 0 0% 0 0Builder Overhead % of Contract 2.00% Within Range 2,411 530,422 100% 530,422 530,422 Other (Not in Basis): 0 0 0% 0 0Builder Profit % of Contract 6.00% Within Range 7,378 1,623,091 100% 1,623,091 1,623,091 Other (In Basis): 0 0 100% 0 0Permits, Bond Premium, Tap Fees, Cost Cert. 1,286 283,000 100% 283,000 283,000 Other (In Basis): 0 0 100% 0 0Other: 0 100% 0 0 Subtotal 0 0

Subtotal 131,625 28,957,60615% of acquisition and $15,000/unit test: met Total Acquisition Costs 5,000 1,100,000

Professional Fees Total Construction Hard Costs 131,625 28,957,606Design Architect Fees 1,320 290,400 100% 290,400 290,400 Total Non-Construction ("Soft") Costs 36,330 7,992,513Supervisory Architect Fees 330 72,600 100% 72,600 72,600Engineering/Survey 409 90,000 95% 85,500 85,500 Developer Overhead and FeeLegal Fees/Accounting 591 130,000 100% 130,000 130,000 Maximum 5,557,681 20,455 4,500,000 100% 4,500,000 4,500,000

Subtotal 2,650 583,000 7.5% of Acquisition/Project Reserves Override 5% Attribution TestInterim Construction Costs 15% of All Other Development Costs 4,500,000 met

Property & Causality Insurance 689 151,562 100% 151,562 151,562Construction Loan Interest Override 1,600,000 7,273 1,600,000 77% 1,232,000 1,232,000 Total Development Cost 193,410 42,550,119 38,198,998 37,788,998 46,066,627 39,298,998Title Work 227 50,000 100% 50,000 0 Non-elevatorConstruction Taxes 23 5,000 100% 5,000 5,000 TOTAL DEVELOPMENT SOURCES % of TDCOther: REU Fees 7,609 1,674,000 100% 1,674,000 1,674,000 MSHDA Permanent Mortgage 64.05% 123,870 27,251,417 Gap to

Subtotal 15,821 3,480,562 Conventional/Other Mortgage 0.00% 0 0 Hard DebtPermanent Financing Equity Contribution from Tax Credit Syndication 31.24% 60,418 13,291,922 # of Units Ratio

Loan Commitment Fee to MSHDA 2% 2,506 551,313 0% 0 0 MSHDA NSP Funds 0.00% 0 0.00 1.15% 0 0 One Bedroom, 1 Bath, 798 Sq Ft ApartmentOther: Legal Fees 0 0 0% 0 0 MSHDA HOME or Housing Trust Funds 0.00% 0 0.00 0 Two Bedroom, 2 Bath, 1096 Sq Ft Apartment

Subtotal 2,506 551,313 Mortgage Resource Funds 0.74% 1,428 314,221 0 Three Bedroom, 2 Bath, 1335 Sq Ft ApartmentOther Costs (In Basis) Other MSHDA 0.00% 0 0 One Bedroom, 1 Bath, 867 Sq Ft Apartment

Application Fee 9 2,000 100% 2,000 2,000 Local HOME 0.00% 0 0 Two Bedroom, 2 Bath, 1163 Sq Ft ApartmentMarket Study 30 6,500 100% 6,500 6,500 Income from Operations 0.30% 580 127,676 0 Three Bedroom, 2 Bath, 1401 Sq Ft ApartmentEnvironmental Studies 124 27,300 100% 27,300 27,300 Other Equity 0.00% 0Cost Certification 61 13,500 100% 13,500 13,500 Transferred Reserves: 0.00% 0 0Equipment and Furnishings 955 210,000 100% 210,000 0 Other: 0.00% 0 0 Deferred Dev Fee Temporary Tenant Relocation 0 100% 0 0 Other: 0.00% 0 Dev FeeConstruction Contingency 6,517 1,433,730 100% 1,433,730 1,433,730 Deferred Developer Fee 3.68% 7,113 1,564,883 34.78%Appraisal and C.N.A. 10 2,300 100% 2,300 2,300 Total Permanent Sources 42,550,119Other: Green Consultant 136 30,000 50% 15,000 15,000

Subtotal 7,842 1,725,330 Sources Equal Uses? BalancedOther Costs (NOT In Basis) Surplus/(Gap) 0 0

Start-up and Organization 0 0 0% 0 0Tax Credit Fees (based on 2017 QAP) 94,178 Within Range 427 94,020 0% 0 0 0.00% 0Compliance Monitoring Fee (based on 2017 QAP) 475 104,500 0% 0 0 Construction Loan Rate 3.950%Marketing Expense 273 60,000 0% 0 0 Repaid from equity prior to final closing 0Syndication Legal Fees 250 55,000 0% 0 0Rent Up Allowance 4.0 months 2,004 440,966 0% 0 0 Eligible Basis for LIHTC/TCAP Value of LIHTC/TCAP Existing Reserve AnalysisOther: LIHTC Consultant 0 0% 0 0 Acquisition 0 Acquisition 0 DCE Interest: Current Owner's Reserves: 0

Subtotal 3,429 754,486 Construction 38,198,998 Construction 1,527,960 Override Insurance: 0Acquisition Credit % 4.00% Total Yr Credit 1,527,960 Taxes: 0

Summary of Acquisition Price As of May 20, 2020 Construction Loan Term Rehab/New Const Credit % 4.00% Equity Price $0.8700 Rep. Reserve:Attributed to Land 1,100,000 1st Mortgage Balance Months Qualified Percentage 100.00% Equity Effective Price $0.8700 Override ORC:Attributed to Existing Structures 0 Subordinate Mortgage(s) Construction Contract 22 QCT/DDA Basis Boost 100% Equity Contribution 13,291,922 DCE Principal:Other: 0 Subordinate Mortgage(s) Rent up Allowance 4 Historic? No Other:Fixed Price to Seller 1,100,000 Subordinate Mortgage(s) Construction Loan Period 26

Premium/(Deficit) vs Existing Debt 1,100,000 Initial Owner's Equity CalculationEquity Contribution from Tax Credit Syndication 13,291,922

Appraised Value Value As of: March 1, 2020 Brownfield Equity"Encumbered As-Is" value as determined by appraisal: 1,107,000 Override Historic Tax Credit EquityPlus 5% of Appraised Value: 0 General Partner Capital ContributionsLESS Fixed Price to the Seller: 1,100,000 Other Equity SourcesSurplus/(Gap) Within Range 7,000

New Owner's Equity 13,291,922

MSHDA Construction Loan

Tax/Ins Escrows transferred to project

LIHTC Basis Historic Basis221(d)(3)

Limit Aggregate Basis

Reserves Transferred in to Project

4 Month OAROAR Funded

Yr 1

Home Subsidy

Limit HOME Unit Mix

Instructions

Development Union at Oak GroveFinancing Tax Exempt

MSHDA No. 3837 Mortgage Assumptions:Step Commitment Debt Coverage Ratio 1.15Date 02/25/2021 Mortgage Interest Rate 3.950%Type New Construction Pay Rate 3.950%

Mortgage Term 40 yearsIncome from Operations No

Total Development Income Potential Per Unit Total

Annual Rental Income 12,894 2,836,752 1.0% 6 2.0%Annual Non-Rental Income 274 60,200 1.0% 6 2.0%Total Project Revenue 13,168 2,896,952

Total Development Expenses

Vacancy Loss 8.00% of annual rent potential 1,032 226,940 6 8.0%Management Fee 534 per unit per year 534 117,480 3.0% 1 3.0%Administration 1,205 265,000 3.0% 1 3.0%Project-paid Fuel 68 15,000 3.0% 6 3.0%Common Electricity 125 27,500 4.0% 6 3.0%Water and Sewer 602 132,500 5.0% 6 5.0%Operating and Maintenance 1,091 240,000 3.0% 1 3.0%Real Estate Taxes 0 5.0% 1 5.0%Payment in Lieu of Taxes (PILOT) 7.00% Applied to: All Units 810 178,267Insurance 310 68,200 3.0% 1 3.0%Replacement Reserve 300 per unit per year 300 66,000 3.0% 1 3.0%

0 3.0% 1 3.0%0 3.0% 1 3.0%

Total Expenses 46.15% 6,077 1,336,887

Base Net Operating Income 7,091 1,560,065 OverridePart A Mortgage Payment 46.83% 6,166 1,356,578Part A Mortgage 123,870 27,251,417Non MSHDA Financing Mortgage Payment 0Non MSHDA Financing Type: 0Base Project Cash Flow (excludes ODR) 7.02% 925 203,487

Future Vacancy

% of Revenue

Initial Inflation Factor

Beginning in Year

Future Inflation Factor

Instructions

Cash Flow Projections Development Union at Oak GroveFinancing Tax Exempt

MSHDA No. 3837Step CommitmentDate 02/25/2021Type New Construction

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

IncomeAnnual Rental Income 1.0% 6 2.0% 2,836,752 2,865,120 2,893,771 2,922,708 2,951,936 3,010,974 3,071,194 3,132,618 3,195,270 3,259,175 3,324,359 3,390,846 3,458,663 3,527,836 3,598,393 3,670,361 3,743,768 3,818,643 3,895,016 3,972,917Annual Non-Rental Income 1.0% 6 2.0% 60,200 60,802 61,410 62,024 62,644 63,897 65,175 66,479 67,808 69,164 70,548 71,959 73,398 74,866 76,363 77,890 79,448 81,037 82,658 84,311

Total Project Revenue 2,896,952 2,925,922 2,955,181 2,984,733 3,014,580 3,074,871 3,136,369 3,199,096 3,263,078 3,328,340 3,394,907 3,462,805 3,532,061 3,602,702 3,674,756 3,748,251 3,823,216 3,899,681 3,977,674 4,057,228

ExpensesVacancy Loss 8.0% 6 8.0% 226,940 229,210 231,502 233,817 236,155 240,878 245,695 250,609 255,622 260,734 265,949 271,268 276,693 282,227 287,871 293,629 299,501 305,491 311,601 317,833Management Fee 3.0% 1 3.0% 117,480 121,004 124,635 128,374 132,225 136,192 140,277 144,486 148,820 153,285 157,883 162,620 167,498 172,523 177,699 183,030 188,521 194,177 200,002 206,002Administration 3.0% 1 3.0% 265,000 272,950 281,139 289,573 298,260 307,208 316,424 325,917 335,694 345,765 356,138 366,822 377,827 389,161 400,836 412,861 425,247 438,005 451,145 464,679Project-paid Fuel 3.0% 6 3.0% 15,000 15,450 15,914 16,391 16,883 17,389 17,911 18,448 19,002 19,572 20,159 20,764 21,386 22,028 22,689 23,370 24,071 24,793 25,536 26,303Common Electricity 4.0% 6 3.0% 27,500 28,600 29,744 30,934 32,171 33,136 34,130 35,154 36,209 37,295 38,414 39,566 40,753 41,976 43,235 44,532 45,868 47,244 48,662 50,122Water and Sewer 5.0% 6 5.0% 132,500 139,125 146,081 153,385 161,055 169,107 177,563 186,441 195,763 205,551 215,829 226,620 237,951 249,849 262,341 275,458 289,231 303,692 318,877 334,821Operating and Maintenance 3.0% 1 3.0% 240,000 247,200 254,616 262,254 270,122 278,226 286,573 295,170 304,025 313,146 322,540 332,216 342,183 352,448 363,022 373,912 385,130 396,683 408,584 420,841Real Estate Taxes 5.0% 1 5.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Payment in Lieu of Taxes (PILOT) 178,267 171,691 172,937 174,173 175,397 178,532 181,713 184,938 188,207 191,522 194,881 198,284 201,732 205,223 208,758 212,336 215,957 219,620 223,324 227,069Insurance 3.0% 1 3.0% 68,200 70,246 72,353 74,524 76,760 79,062 81,434 83,877 86,394 88,986 91,655 94,405 97,237 100,154 103,159 106,253 109,441 112,724 116,106 119,589Replacement Reserve 3.0% 1 3.0% 66,000 67,980 70,019 72,120 74,284 76,512 78,807 81,172 83,607 86,115 88,698 91,359 94,100 96,923 99,831 102,826 105,911 109,088 112,361 115,731

0 3.0% 1 3.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 3.0% 1 3.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Subtotal: Operating Expenses 1,336,887 1,363,456 1,398,939 1,435,544 1,473,310 1,516,243 1,560,527 1,606,211 1,653,342 1,701,969 1,752,145 1,803,924 1,857,360 1,912,512 1,969,441 2,028,208 2,088,877 2,151,517 2,216,197 2,282,990Debt ServiceDebt Service Part A 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578 1,356,578Debt Service Conventional/Other Financing 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Expenses 2,693,465 2,720,035 2,755,518 2,792,122 2,829,889 2,872,821 2,917,106 2,962,789 3,009,920 3,058,547 3,108,724 3,160,502 3,213,938 3,269,091 3,326,019 3,384,786 3,445,456 3,508,096 3,572,776 3,639,568

Cash Flow/(Deficit) 203,487 205,887 199,663 192,610 184,691 202,051 219,263 236,307 253,158 269,792 286,183 302,303 318,122 333,611 348,737 363,465 377,761 391,585 404,898 417,659Cash Flow Per Unit 925 936 908 876 840 918 997 1,074 1,151 1,226 1,301 1,374 1,446 1,516 1,585 1,652 1,717 1,780 1,840 1,898Debt Coverage Ratio on Part A Loan 1.15 1.15 1.15 1.14 1.14 1.15 1.16 1.17 1.19 1.20 1.21 1.22 1.23 1.25 1.26 1.27 1.28 1.29 1.30 1.31Debt Coverage Ratio on Conventional/Other Financing N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Interest Rate on Reserves 3% Average Cash Flow as % of Net Income

Operating Deficit Reserve (ODR) AnalaysisMaintained Debt Coverage Ratio (Hard Debt) 1.00Maintained Operating Reserve (No Hard Debt) 250Initial Balance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Annual Draw to achieve 1.0 DCR 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total Annual Deposit to achieve Maintained DCR 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total 1.0 DCR and Maintained DCR 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Ending Balance at Maintained DCR 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Maintained Cash Flow Per Unit 925 936 908 876 840 918 997 1,074 1,151 1,226 1,301 1,374 1,446 1,516 1,585 1,652 1,717 1,780 1,840 1,898Maintained Debt Coverage Ratio on Part A Loan 1.15 1.15 1.15 1.14 1.14 1.15 1.16 1.17 1.19 1.20 1.21 1.22 1.23 1.25 1.26 1.27 1.28 1.29 1.30 1.31Maintained Debt Coverage Ratio on Conventional/Other N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/AStandard ODRNon-standard ODR

Operating Assurance Reserve AnalysisRequired in Year: 1

Initial Balance 897,822 924,756 952,499 981,074 1,010,506 1,040,821 1,072,046 1,104,208 1,137,334 1,171,454 1,206,597 1,242,795 1,280,079 1,318,482 1,358,036 1,398,777 1,440,740 1,483,963 1,528,481 1,574,336Interest Income 26,935 27,743 28,575 29,432 30,315 31,225 32,161 33,126 34,120 35,144 36,198 37,284 38,402 39,554 40,741 41,963 43,222 44,519 45,854 47,230Ending Balance 924,756 952,499 981,074 1,010,506 1,040,821 1,072,046 1,104,208 1,137,334 1,171,454 1,206,597 1,242,795 1,280,079 1,318,482 1,358,036 1,398,777 1,440,740 1,483,963 1,528,481 1,574,336 1,621,566

Deferred Developer Fee AnalysisInitial Balance 1,564,883 1,463,140 1,360,196 1,260,365 1,164,060 1,071,714 970,689 861,057 742,903 616,324 481,428 338,337 187,185 28,124 0 0 0 0 0 0Dev Fee Paid 101,743 102,943 99,832 96,305 92,346 101,025 109,632 118,153 126,579 134,896 143,092 151,151 159,061 28,124 0 0 0 0 0 0Ending Balance Repaid in yea 0 1,463,140 1,360,196 1,260,365 1,164,060 1,071,714 970,689 861,057 742,903 616,324 481,428 338,337 187,185 28,124 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Mortgage Resource Fund LoanInterest Rate on Subordinate Financing 3%Principal Amount of all MSHDA Soft Funds 314,221 221,904 125,618 29,555 (65,864) (160,185) (266,016) (383,628) (513,290) (655,268) (809,822) (977,209) (1,157,676) (1,351,468) (1,558,817) (1,779,950) (2,015,082) (2,264,414) (2,528,139) (2,806,433)Current Yr Int 9,427 6,657 3,769 887 (1,976) (4,806) (7,980) (11,509) (15,399) (19,658) (24,295) (29,316) (34,730) (40,544) (46,765) (53,399) (60,452) (67,932) (75,844) (84,193)Accrued Int 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Subtotal 323,648 228,561 129,387 30,442 (67,839) (164,991) (273,996) (395,137) (528,689) (674,926) (834,117) (1,006,525) (1,192,407) (1,392,012) (1,605,582) (1,833,349) (2,075,534) (2,332,347) (2,603,983) (2,890,626)Annual Payment Due 101,743 102,943 99,832 96,305 92,346 101,025 109,632 118,153 126,579 134,896 143,092 151,151 159,061 166,806 174,368 181,733 188,880 195,792 202,449 208,830Year End Balance 221,904 125,618 29,555 (65,864) (160,185) (266,016) (383,628) (513,290) (655,268) (809,822) (977,209) (1,157,676) (1,351,468) (1,558,817) (1,779,950) (2,015,082) (2,264,414) (2,528,139) (2,806,433) (3,099,455)

897,822

314,221Initial Balance

% of Cash Flow50%

Initi

al In

flato

r

Star

ting

in Y

r

Futu

re In

flato

r

Initital Deposit897,822

Initial Deposit0

00

DRAFT


RESOLUTION DETERMINING MORTGAGE LOAN FEASIBILITY UNION AT OAK GROVE, MSHDA DEVELOPMENT NO. 3837

TOWNSHIP OF HOWELL, LIVINGSTON COUNTY

February 25, 2021

WHEREAS, the Michigan State Housing Development Authority (the "Authority") is authorized under the provisions of Act No. 346 of the Public Acts of 1966 of the State of Michigan, as amended (the "Act"), to make mortgage loans to qualified non-profit housing corporations, consumer housing cooperatives and limited dividend housing corporations and associations; and WHEREAS, an Application for Mortgage Loan Feasibility has been filed with the Authority by Union Development Holdings, LLC (the "Applicant") for a multifamily housing project to be located in the Township of Howell, Livingston County, Michigan, having an estimated total development cost of Forty-Two Million Five Hundred Fifty Thousand One Hundred Nineteen Dollars ($42,550,119), a total estimated maximum mortgage loan amount of Twenty-Seven Million Two Hundred Fifty-One Thousand Four Hundred Seventeen Dollars ($27,251,417) and a Mortgage Resource Fund loan in the amount of Three Hundred Fourteen Thousand Two Hundred Twenty-One Dollars ($314,221) (hereinafter referred to as the "Application"); and WHEREAS, a housing association to be formed by the Applicant may become eligible to receive a mortgage loan from the Authority under the provisions of the Act and the Authority's General Rules; and WHEREAS, the Acting Executive Director has forwarded to the Authority his analysis of the Application and his recommendations with respect thereto; and WHEREAS, the Authority has considered the Application in the light of the Authority's project mortgage loan feasibility evaluation factors. NOW, THEREFORE, Be It Resolved by the Michigan State Housing Development Authority as follows:

1. The following determinations be and they hereby are made:

a. The proposed housing project will provide housing for persons of low and moderate income and will serve and improve the residential area in which Authority-financed housing is located or is planned to be located, thereby enhancing the viability of such housing.

b. The Applicant is reasonably expected to be able to achieve successful

completion of the proposed housing project.

c. The proposed housing project will meet a social need in the area in which it is to be located.

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d. A mortgage loan, or a mortgage loan not made by the Authority that is a

federally-aided mortgage, can reasonably be anticipated to be obtained to provide financing for the proposed housing project.

e. The proposed housing project is a feasible housing project.

f. The Authority expects to allocate to the financing of the proposed housing

project proceeds of its bonds issued or to be issued for multifamily housing projects a maximum principal amount not to exceed Thirty-Two Million One Hundred Sixty Thousand Dollars ($32,160,000).

2. The proposed housing project be and it is hereby determined to be feasible for a

mortgage loan on the terms and conditions set forth in the Mortgage Loan Feasibility/Commitment Report of the Authority Staff presented to the meeting, subject to any and all applicable determinations and evaluations issued or made with respect to the proposed housing project by other governmental agencies or instrumentalities or other entities concerning the effects of the proposed housing project on the environment as evaluated pursuant to the federal National Environmental Policy Act of 1969, as amended, and the regulations issued pursuant thereto as set forth in 24 CFR Part 58.

3. The determination of feasibility is based on the information obtained from the Applicant and the assumption that all factors necessary for the successful construction and operation of the proposed project shall not change in any materially adverse respect prior to the closing. If the information provided by the Applicant is discovered to be materially inaccurate or misleading, or any factors necessary for the successful construction and operation of the proposed project change in any materially adverse respect, this feasibility determination resolution may, at the option of the Executive Director, the Chief Housing Investment Officer, the Director of Legal Affairs, the Deputy Director of Legal Affairs, the Chief Financial Officer, the Deputy Director of Finance or any person duly authorized to act in any of the foregoing capacities (each an "Authorized Officer"), be immediately rescinded.

4. Neither this determination of feasibility nor the execution prior to closing of any documents requested to facilitate processing of a proposed mortgage loan to be used in connection therewith constitutes a promise or covenant by the Authority that it will make a Mortgage Loan to the Applicant.

5. This determination of Mortgage Loan Feasibility is conditioned upon the availability of financing to the Authority. The Authority does not covenant that funds are or will be available for the financing of the subject proposed housing development.

6. The Mortgage Loan Feasibility determination is subject to the conditions set forth in the Mortgage Loan Feasibility/Commitment Staff Report dated February 25, 2021, which conditions are hereby incorporated by reference as if fully set forth herein.

DRAFT


RESOLUTION AUTHORIZING MORTGAGE LOAN UNION AT OAK GROVE, MSHDA DEVELOPMENT NO. 3837

TOWNSHIP OF HOWELL, LIVINGSTON COUNTY

February 25, 2021 WHEREAS, the Michigan State Housing Development Authority (the "Authority") is authorized, under the provisions of Act No. 346 of the Public Acts of 1966 of the State of Michigan, as amended (hereinafter referred to as the "Act"), to make mortgage loans to qualified nonprofit housing corporations, consumer housing cooperatives, limited dividend housing corporations and associations and certain qualified individuals; and WHEREAS, an application (the "Application") has been filed with the Authority by Union Development Holdings, LLC (the "Applicant") for a construction and permanent mortgage loan in the amount of Twenty-Seven Million Two Hundred Fifty-One Thousand Four Hundred Seventeen Dollars ($27,251,417), for the construction and permanent financing of a multifamily housing project having an estimated total development cost of Forty-Two Million Five Hundred Fifty Thousand One Hundred Nineteen Dollars ($42,550,119), to be known as Union at Oak Grove, located in the Township of Howell, Livingston County, Michigan, and to be owned by Union at Oak Grove Limited Dividend Housing Association Limited Partnership (the "Mortgagor"); and WHEREAS, the Applicant has also requested a Mortgage Reserve Fund loan in the estimated amount of Three Hundred Fourteen Thousand Two-Hundred Twenty-One Dollars ($314,221) (the "MRF Loan"); and WHEREAS, the Acting Executive Director has forwarded to the Authority his analysis of the Application and his recommendation with respect thereto; and WHEREAS, the Authority has reviewed the Application and the recommendation of the Acting Executive Director and, on the basis of the Application and recommendation, has made determinations that:

(a) The Mortgagor is an eligible applicant;

(b) The proposed housing project will provide housing for persons of low and moderate income and will serve and improve the residential area in which Authority-financed housing is located or is planned to be located thereby enhancing the viability of such housing;

(c) The Applicant and the Mortgagor are reasonably expected to be able to achieve

successful completion of the proposed housing project;

(d) The proposed housing project will meet a social need in the area in which it is to be located;

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(e) The proposed housing project may reasonably be expected to be marketed successfully;

(f) All elements of the proposed housing project have been established in a manner

consistent with the Authority's evaluation factors, except as otherwise provided herein;

(g) The construction or rehabilitation will be undertaken in an economical manner and

it will not be of elaborate design or materials; and

(h) In light of the estimated total project cost of the proposed housing project, the amount of the mortgage loan authorized hereby is consistent with the requirements of the Act as to the maximum limitation on the ratio of mortgage loan amount to estimated total project cost.

WHEREAS, the Authority has considered the Application in the light of the criteria established for the determination of priorities pursuant to General Rule 125.145 and hereby determines that the proposed housing project is consistent therewith; and WHEREAS, Sections 83 and 93 of the Act provide that the Authority shall determine a reasonable and proper rate of return to limited dividend housing corporations and associations on their investment in Authority-financed housing projects. NOW, THEREFORE, Be It Resolved by the Michigan State Housing Development Authority as follows:

1. The Application be and it hereby is approved, subject to the terms and conditions of this Resolution, the Act, the General Rules of the Authority, and of the Mortgage Loan Commitment hereinafter authorized to be issued to the Applicant and the Mortgagor.

2. A construction and permanent mortgage loan (the "Mortgage Loan") be and it hereby is authorized and the Executive Director, the Chief Housing Investment Officer, the Director of Legal Affairs, the Deputy Director of Legal Affairs, the Chief Financial Officer, the Deputy Director of Finance or any person duly authorized to act in any of the foregoing capacities, or any one of them acting alone (each an "Authorized Officer"), are hereby authorized to issue to the Applicant and the Mortgagor the Authority's Mortgage Loan Commitment (the "Commitment") for the construction and permanent financing of the proposed housing project in an amount not to exceed Twenty-Seven Million Two Hundred Fifty-One Thousand Four Hundred Seventeen Dollars ($27,251,417), to be amortized over a period of forty (40) years and payable over thirty (30) years after amortization of principal commences, with a balloon payment of all accumulated principal and interest then-due payable in the thirtieth (30th) year, or in any event to be paid in full not later than May 11, 2052, and to bear interest at a rate of three and 95/100 percent (3.95%) per annum. The amount of proceeds of tax-exempt bonds issued or to be issued and allocated to the financing of this housing project shall not exceed Thirty-Two Million One Hundred Sixty Thousand Dollars ($32,160,000). Any Authorized Officer is hereby authorized to modify or waive any condition or provision contained in the Commitment.

3. The MRF Loan be and it hereby is authorized and an Authorized Officer is hereby

authorized to issue to the Applicant and the Mortgagor a commitment for a MRF Loan (together with the commitment for the Mortgage Loan, the "Mortgage Loan Commitment") in the estimated amount of Three Hundred Fourteen Thousand Two Hundred Twenty-One Dollars ($314,221), and

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to have a term not to exceed thirty (30) years and to bear interest at a rate of three percent (3%) per annum.

4. The mortgage loan commitment resolution and issuance of the Mortgage Loan Commitment are based on the information obtained from the Applicant and the assumption that all factors necessary for the successful construction and operation of the proposed project shall not change in any materially adverse respect prior to the closing. If the information provided by the Applicant is discovered to be materially inaccurate or misleading, or any factors necessary for the successful construction and operation of the proposed project change in any materially adverse respect, this mortgage loan commitment resolution together with the commitment issued pursuant hereto may, at the option of an Authorized Officer, be rescinded.

5. Notwithstanding passage of this resolution or execution of any documents in anticipation of the closing of the proposed mortgage loan, no contractual rights to receive the mortgage loan authorized herein shall arise unless and until an Authorized Officer shall have issued a Mortgage Loan Commitment and the Applicant shall have agreed in writing within fifteen (15) days after receipt thereof, to the terms and conditions contained therein.

6. The proposed housing project be and it hereby is granted a priority with respect to proceeds from the sale of Authority securities which are determined by the Acting Executive Director to be available for financing the construction and permanent loans of the proposed housing project. Availability of funds is subject to the Authority's ability to sell bonds at a rate or rates of interest and at a sufficient length of maturity so as not to render the permanent financing of the development unfeasible.

7. In accordance with Section 93(b) of the Act, the maximum reasonable and proper rate of return on the investment of the Mortgagor in the housing project be and it hereby is determined to be twelve percent (12%) per annum initially. Following the payment in full of the MRF Loan, the Mortgagor's rate of return may be increased by one percent (1%) annually until a cap of twenty-five percent (25%) is reached.

8. The Authority hereby waives Section VI.I.2 of the Multifamily Direct Lending Parameters adopted on June 28, 2017, requiring approval by the Township of Howell of a payment in lieu of taxes for the Development prior to the adoption of this resolution.

9. The Authority hereby waives Section II.B.2(f) of the Multifamily Direct Lending

Parameters that requires the annual gap loan payments equal to 50% of cash available for distribution to the owner are required after 12 years or the year in which the sum of all surplus cash available for distribution equals the amount of deferred developer fee. The waiver will permit the 50% gap loan payment to begin immediately following the first year after construction completion because the development fee is over $2.1 million.

10. The Mortgage Loan shall be subject to, and the Commitment shall contain, the conditions set forth in the Mortgage Loan Feasibility/Commitment Staff Report dated February 25, 2021, which conditions are hereby incorporated by reference as if fully set forth herein.

M E M O R A N D U M

TO: Authority Members FROM: Gary Heidel, Acting Executive Director DATE: February 25, 2021 RE: Professional Services Contract to Provide Software Services for the Eviction

Diversion Program

RECOMMENDATION: I recommend that the Michigan State Housing Development Authority (the “Authority”) authorize the Michigan Department of Technology, Management and Budget (“DTMB”) to execute a contract with either Kinetech Cloud LLC of San Antonio, Texas or SurveyMonkey of San Mateo, California, to provide the Authority with online application software and software support pursuant to the Federal Emergency Rental Assistance Program. DTMB, in cooperation with the Authority, has conducted a procurement process and will award a contract to one of the two identified service providers. The proposed contract will have a one (1) year term for an amount not to exceed $450,000.

CONTRACT SUMMARY:

Name of Contractor: Kinetech Cloud LLC or SurveyMonkey Amount of Contract: No more than $450,000 to be paid from the

administrative funds. Length of Contract: 1 year Extension Options: Authority’s Discretion Request for Proposal Date: 2/3/2021 Number of Bids Received: 2 MSHDA Division Requesting the Contract: MSHDA IT / RAHS

EXECUTIVE SUMMARY: On December 27, 2020, the United States Congress passed, and the President signed into law the Consolidated Appropriations Act of 2021 (the “Act”). In response to the COVID-pandemic, the Act established a new $25 billion Federal Emergency Rental Assistance Program (the “Program”) for state, county, and municipal governments to assist families struggling to make rental and utility

payments. The state of Michigan has been awarded $622 million dollars. It is anticipated that the Authority will administer the $622 million dollars through pass-through grants to provide and administer rental assistance to assist needy Michiganders in 2021. The Program, overseen by the U.S. Treasury, requires the Authority meet a minimal performance threshold that will be evaluated on or about September 30, 2021, at which time the Authority is required to have spent or obligated at least 65% of its allocated funds. The Authority’s allocated funds are approximately ten times the funding that the Authority administered pursuant to last year’s Eviction Diversion Program (“EDP”). This will require increased administrative efficiencies arising from a threefold increase from the largest spending month during the Authority’s administration of the EDP. To achieve this efficiency and meet the timeline outlined above, the Authority must provide an online application process to quickly serve renters and landlords and disburse the funds. The selected vendor must deploy its online application software by the end of March 2021 to ensure that (a) both tenants and landlords can apply for assistance, and (b) the Authority’s partner non-profit agencies throughout the state can be provided the rental assistance funds so they can process applications for eligibility determinations and subsequent funds disbursal.

Any delay past March 2021 puts the Authority at risk of losing $200-$300 million in funding for the benefit of low-income renters. Accordingly, the Authority may, if necessary, provide funding to be reimbursed by the U.S. Treasury when funds are released. Loss of funding could result in 15,000-20,000 low-income households becoming behind on their rent thereby increasing the likelihood they could be evicted and become homeless. The Program also allows for a program extension until March 31, 2022 with an additional fund allocation. If extended, by meeting the September 30, 2021 benchmark, the Authority could receive an additional $100-150 million to continue to serve low-income renters at risk of homelessness. ADVANCING THE AUTHORITY’S MISSION: Consistent with the Authority’s mission, including its legal mandates to provide safe and affordable housing, critical to protecting the health, safety, and welfare of Michigan residents, approval of this contract will enable staff to efficiently provide rental assistance to those being adversely affected by the COVID pandemic. COMMUNITY ENGAGEMENT/IMPACT: Inability to meet Program timelines risks loss of funding which in turn could result in 15,000 – 20,000 Michigan families becoming behind in rent, significantly increasing their likelihood to be evicted and becoming homeless. ISSUES, POLICY CONSIDERATIONS, AND RELATED ACTIONS:

Not being able to efficiently accept applications from renters or landlords puts the Authority at risk of losing $200-$300 million in funding for the benefit of low-income renters.

DRAFT


RESOLUTION AUTHORIZING THE MICHIGAN DEPARTMENT OF TECHNOLOGY, MANAGEMENT AND BUDGET TO ENTER INTO A PROFESSIONAL SERVICES

CONTRACT FOR SOFTWARE SERVICES ON BEHALF OF THE AUTHORITY

February 25, 2021 WHEREAS, in keeping with the Eviction Diversion Program (“EDP”), part of the Consolidated Appropriations Act of 2021 passed by the U.S. Congress in response to the economic crisis created in part by the COVID pandemic, the United States Treasury (“Treasury”) has awarded the state of Michigan $622 million dollars to assist Michigan families at risk of becoming behind on rent, utility payments and, ultimately, becoming homeless due to the economic impacts of the pandemic; and WHEREAS, it is anticipated that the state of Michigan will appropriate $622 million (“Appropriated Funds”) to the Michigan State Housing Development Authority (the “Authority”) to administer the funds to assist Michigan families with rent, utility payments and help them avoid homelessness in accordance with the award of the funds to the state of Michigan and the appropriation of the funds to the Authority; and WHEREAS, the Authority has received the memorandum of the Executive Director regarding the need to retain a contractor to provide professional software services that will enable the Authority to properly administer the EDP Program, including providing Authority funds, if necessary, to be reimbursed by the Treasury when Appropriated Funds are made available; and WHEREAS, the Executive Director recommends that the Authority authorize (a) the Michigan Department of Technology, Management and Budget (“DTMB”), to contract with either Kinetech Cloud LLC or SurveyMonkey, two finalists identified after a procurement process conducted by DTMB, on behalf of the Authority and provide (b) contract funding not to exceed $450,000 for a term of one (1) year to be extended at the Authority’s option should the EDP be extended; and WHEREAS, the Authority concurs in the memorandum and recommendation of the Executive Director and hereby determines that the above-referenced services are necessary for the effective implementation of the Authority’s program, policies, and mission. NOW, THEREFORE, Be It Resolved by the Michigan State Housing Development Authority that 1. DTMB, on behalf of the Authority, is authorized to enter into a contract with either Kinetech Cloud LLC or SurveyMonkey for a one (1) year period beginning on or about March 1, 2021 and ending on or about March 31, 2022, for hosting, system configuration and implementation of its online application system for use by Michigan landlords and tenants in an amount not to exceed Four Hundred Fifty Thousand Dollars ($450,000). 2. If the Authority is required to sign, acknowledge, or approve the contract with Kinetech Cloud LLC, the Executive Director, the Chief Financial Officer, the Director of Legal Affairs, or any person duly authorized to act in any of the foregoing capacities, each are authorized to sign, acknowledge, or approve the contract on behalf of the Authority. 3. DTMB, on behalf of the Authority, is authorized to exercise a contract extension(s) upon written request of an Authorized Officer of the Authority.

4. The Authority is authorized to apply Appropriated Funds to make contract payments and reimburse expenses permitted under the contract. 5. The Authority is authorized to apply Authority funds to make contract payments and reimburse expenses permitted under the contract if Appropriated Funds are not available.


FINANCIAL REPORT

QUARTER AND YEAR TO DATE ENDED SEPTEMBER 30, 2020

CONTENTS

Page

1 - 3 - Financial Summary

4 - Statement of Financial Condition

5-8 - Statements of Revenues and Expenses

9-10 -Notes to Financial Statements

11 - Detail of Multi-Family Mortgage Loans

12 - Seed Loans, Repayable Grants and Bridge Loans

13 - Passthrough Obligations

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY FINANCIAL SUMMARY

THREE MONTHS ENDED SEPTEMBER 30, 2020

Operations for the three months ended September 30, 2020 resulted in excess of revenues over expenses of $11.3 million, an increase of $3.1 million compared to prior year results of $8.2 million. Excess of revenues over expenses for the three months ended September 30, 2020 was more than budget of $4.3 million by $7.0 million.

Financial Position

Total assets increased by $7.0 million from June 30, 2020, to $4.72 billion at September 30, 2020. The majority of the increase occurred in loans receivable (higher by $29.3 million), partially offset by investments (lower by $25.6 million). Total Liabilities decreased by $15.5 million from June 30, 2020, to $3.9 billion.

Loans receivable increased from $3,434.5 million at June 30, 2020 to $3,463.7 million at September 30, 2020, an increase of $29.3 million. The loans receivable experienced a net increase in single-family mortgages (up $27.3 million), as well as multi-family mortgages (up $2.1 million).

Investments decreased by $25.6 million to $1,180.2 million from June 30, 2020. This increase was primarily due to investments being liquidated to fund the mortgage programs.

Bonds and notes payable decreased from $3,319.8 million to $3,218.7 million at September 30, 2020, compared to June 30, 2020. This was a net decrease of $101.1 million, which was primarily due to Single-Family Mortgage Revenue Bond calls on September 1, 2020.

Escrow funds decreased from $483.5 million at June 30, 2020 to $478.7 million at September 30, 2020, a decrease of $4.8 million. The decrease is due to developments with higher escrow balances paying off.

MSHDA’s fund balances totaled $830.6 million at September 30, 2020, equal to 17.6 percent of total assets and 26.0 percent of bonds payable. The $830.6 million fund balance does not include the impact of MSHDA’s portion of the State of Michigan’s Pension liability ($42.5 million at June 30, 2020) and Other Post-Employment Benefits liability ($57.3 million at June 30, 2020). These allocations reduce MSHDA’s fund balance by $99.8 million. This liability is recalculated annually. MSHDA is rated by Standard & Poor’s and has an Issuer Credit Rating (ICR) of AA- with a stable outlook.

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Results of Operations for the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019

Operations for the three months ended September 30, 2020 resulted in excess of revenues over expenses of $11.3 million, an increase of $3.1 compared to prior year results of $8.2 million. Total revenues increased from $172.2 million in 2019, to $191.0 million in 2020. Total expenses were $179.7.0 million for the three months ended September 30, 2020, compared to $164.0 million for the three months ended September 30, 2019.

Net interest income increased from $16.2 million in 2019 to $18.9 million in 2020, an increase of $2.7 million. Mortgage loan interest income is up $4.1 million in 2020 compared to 2019. The reason for this increase is attributable to the higher mortgage balances. Investment interest income decreased $1.9 million from 2019 to 2020. Interest expense is higher due to an increase in the average bonds outstanding and a decrease on the interest rate for variable rate debt. The aggregate interest rate on all outstanding debt went from 3.54% for the quarter ended September 30, 2019 to 3.18% for the quarter ended September 30, 2020. The Authority’s interest income returns increased 25 basis point, with interest earning asset rates going from 4.39% in September of 2019 to 4.28% in September of 2020.

Total Income increased from $172.2 million for the three months ended September 30, 2019 to $191.0 million for the three months ended September 30, 2020, a net increase of $18.8 million. The total income increase was caused by an increase in Net Income ($2.7 million) and Federal Assistance Programs Income ($19.0 million), partially offset by a decrease in Preservation Fees ($1.9 million).

Total expenses increased from $164.0 million for the three months ended September 30, 2019 to $179.7 million for the three months ended September 30, 2020, a net increase of $15.6 million. Total expenses increased due primarily to the Federal Assistance Program Expenses ($15.9 million).

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Results of Operations for the Three Months Ended September 30, 2020 Compared to Budget

Excess of Revenues over Expenses for the three months ended September 30, 2020 was $11.3 million compared to budget of $4.3 million, a positive variance of $7.0 million.

Net interest income was $18.9 million compared to budget of $14.9 million, more than budgeted by $4.0 million. This difference was due to higher-than-expected Interest Income from Mortgage Loans ($1.3 million) and lower Interest Expense ($2.5 million).

Total Income was $191.0 million compared to budget of $188.1 million, a positive variance of $2.6 million. Total income was more than budget due to Net Interest Income ($4.0 million), partially offset by a number of Income line items.

Total expenses were $180.0 million compared to budget of $184.1 million. This positive variance of $4.4 million was mainly due to the timing of Operating Expenses ($1.4 million) and Housing Development Grants ($2.5 million).

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SEPTEMBER 30, 2020 JUNE 30, 2020 INCREASE (DECREASE)ASSETS: Loans Receivable: Developments under Construction 184,241,381$ 235,793,130$ (51,551,749)$ Short-Term Construction Loans 0 - 0 Completed Development Final Closed 1,286,193,385 1,232,563,900 53,629,485 Single-family Mortgages 1,990,595,671 1,963,262,998 27,332,673 AIS Homes - - - Home Improvement and Mod Rehab Loans 2,682,327 2,835,514 (153,188) 3,463,712,763 3,434,455,542 29,257,221 ADD (DEDUCT): Reserve for Losses (82,406,651) (82,109,100) (297,551) Mortgage Discount - Single Family (69,018) (69,018) - Mortgage Discount - Multi Family (19,144,109) (18,551,803) (592,307) Accrued Interest Receivable 80,047,592 81,584,687 (1,537,095) 3,442,140,576 3,415,310,308 26,830,268 Investments CD's and Investment Agreements 18,000,000 0 18,000,000 Other Short Term Investments 478,751,820 506,222,736 (27,470,916) Long Term Investments 679,968,588 696,291,344 (16,322,756) 1,176,720,408 1,202,514,080 (25,793,672) Accrued Interest Receivable 3,501,429 3,316,348 185,081 1,180,221,837 1,205,830,428 (25,608,590)

Cash 17,335,058 16,829,376 505,681 Housing Development Loans, Net of Reserve 2,704,692 2,952,236 (247,544) Deferred Bond Issuance Costs - - - Real Estate Owned: Multi-family 5,010,160 5,103,727 (93,566) Single-family 4,220,141 5,105,420 (885,279) Other Assets 72,883,058 66,369,249 6,513,809 TOTAL ASSETS 4,724,515,523$ 4,717,500,745 7,014,778$

LIABILITIES: Bonds Payable 3,194,370,000$ 3,294,865,000$ (100,495,000)$ ADD Capital Appreciation - - - LESS Bond Discount & Premium, Net 24,353,528 24,915,820 (562,292) 3,218,723,528 3,319,780,820 (101,057,292) Notes Payable, including Premium 80,000,000 - 80,000,000Accrued Interest Payable: Bonds 37,192,980 14,849,191 22,343,789 Escrow Funds 478,734,549 483,496,212 (4,761,663) Federal or State Resources on Hand 30,408,738 30,082,092 326,645 Other Liabilities 48,895,352 50,043,485 (1,148,133) TOTAL LIABILITIES 3,893,955,146 3,898,251,800 (4,296,654) FUND BALANCES: Restricted Funds 481,358,470 463,204,769 18,153,701 Unrestricted Funds 349,201,906 356,044,175 (6,842,269) TOTAL FUND BALANCES 830,560,376 819,248,945 11,311,432 TOTAL LIABILITIES & FUND BALANCES 4,724,515,523$ 4,717,500,745 7,014,778$

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITYSTATEMENT OF FINANCIAL CONDITION

4

INCREASE OVER (UNDER)2020 2019 (DECREASE) ACTUAL BUDGET BUDGET

INCOME: Interest Income: Mortgage Loans 42,070,684$ 37,955,847$ 4,114,837$ 42,070,684$ 40,791,000$ 1,279,684$ Investments 2,799,395 4,183,083 (1,383,688) 2,799,395 2,595,000 204,395 44,870,079 42,138,931 2,731,148 44,870,079 43,386,000 1,484,079 Interest Expense (25,938,151) (25,933,170) (4,981) (25,938,151) (28,442,000) 2,503,849 Net Interest Income 18,931,928 16,205,761 2,726,167 18,931,928 14,944,000 3,987,928

State Approp MI Housing and Comm Dev Fund 3,584 - 3,584 3,584 3,584 - Multi-Family Servicing Fees 123,132 193,899 (70,767) 123,132 125,000 (1,868) Preservation Fees - 1,909,147 (1,909,147) - 572,000 (572,000) LIHTC Fees 612,502 866,842 (254,340) 612,502 975,000 (362,498) Section 8 Existing Fees 3,617,502 4,303,617 (686,115) 3,617,502 4,375,000 (757,498) Federal Programs Administration Fees 421,592 1,709,274 (1,287,682) 421,592 1,050,000 (628,408) Contract Administration Fees 2,034,118 2,143,865 (109,747) 2,034,118 2,104,000 (69,882) Gain (Loss) on Sale of Investments, Net - 35,657 (35,657) - - - Gain (Loss) on Debt Retirement, Net 1,648,011 - 1,648,011 1,648,011 390,000 1,258,011 Gain(Loss) on Sale of Investments, Net 308,179 297,376 10,803 308,179 240,000 68,179 Miscellaneous Income 417,391 655,263 (237,871) 417,391 760,000 (342,609) Federal Assistance Programs Income 162,855,498 143,893,765 18,961,733 162,855,498 162,855,498 - TOTAL INCOME 190,973,436 172,214,464 18,758,973 190,973,436 188,394,081 2,579,355

EXPENSES: Operating Expenses: Salaries and Fringe Benefits 7,533,615 8,489,229 (955,614) 7,533,615 8,391,000 (857,385) Technical Service Contracts 1,236,342 1,201,385 34,958 1,236,342 1,435,000 (198,658) General Consultant Contracts 210,447 229,687 (19,240) 210,447 353,000 (142,553) Rent, building depreciation & utilities 278,317 304,136 (25,819) 278,317 306,000 (27,683) Building maint, equipment purchase & rental 236,866 314,860 (77,994) 236,866 238,000 (1,134) Computer & Related Equipment Purchases 1,302,084 1,131,406 170,678 1,302,084 1,746,000 (443,916) Charges from other State Departments 1,030,792 821,531 209,260 1,030,792 795,000 235,792 Travel 12,022 82,602 (70,581) 12,022 87,000 (74,978) Telephone 218,486 135,978 82,508 218,486 57,000 161,486 Printing, Supplies, & Postage 87,793 87,578 215 87,793 72,000 15,793 Advertising and Publicity 163,618 534,643 (371,025) 163,618 362,000 (198,382) Sec 8 Property Mgrs Fees & Expenses 2,296,588 2,348,874 (52,287) 2,296,588 2,383,000 (86,412) Temporary Clerical Assistance - 9,948 (9,948) - 9,000 (9,000) Training 20,617 22,280 (1,663) 20,617 24,000 (3,383) All Other 514,154 324,302 189,852 514,154 312,000 202,154 Deferred Operating Costs (275,000) (180,000) (95,000) (275,000) (345,000) 70,000 Total Operating Expenses 14,866,741 15,858,441 (991,699) 14,866,741 16,225,000 (1,358,259) Single Family& HIP Mtg fees 2,338,334 1,627,440 710,895 2,338,334 1,935,000 403,334 Costs of Issuing, Paying Notes and Bonds 570,314 668,319 (98,005) 570,314 675,000 (104,686) Provision for Losses on Uncoll. Mort. 1,677,496 1,427,764 249,732 1,677,496 2,150,000 (472,504)Housing Development Grants 10,660 150,463 (139,803) 10,660 2,559,000 (2,548,340) Michigan Housing and Community Dev Funds Gra 3,584 2,220 1,363 3,584 3,584 - Rent Subsidy 136,799 161,257 (24,458) 136,799 135,000 1,799 Bond Insurance Expense 117,962 78,565 39,398 117,962 488,000 (370,038) Homeownership Counseling Costs 172,652 144,433 28,220 172,652 162,000 10,652 Other - - - - - - Federal Assistance Programs Expense 159,767,462 143,907,447 15,860,015 159,767,462 159,767,462 - TOTAL EXPENSES 179,662,004 164,026,348 15,635,656 179,662,004 184,100,045 (4,438,041) EXCESS (DEFICIENCY) OF INCOME OVER EXPENSES 11,311,432$ 8,188,116$ 3,123,316$ 11,311,432$ 4,294,036$ 7,017,396

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITYSTATEMENT OF REVENUES AND EXPENSES

QUARTER ENDED SEPTEMBER 30 QUARTER ENDED SEPTEMBER 30, 2020

5

OVER (UNDER)

ACTUAL BUDGET BUDGET

INCOME:

Interest Income:

Mortgage Loans 14,399,053$ 13,505,000$ 894,053$

Investments 1,175,764 900,000 275,764

15,574,818 14,405,000 1,169,818

Interest Expense (8,686,321) (9,481,000) 794,679

Net Interest Income 6,888,497 4,924,000 1,964,497

State Approp MI Housing and Comm Dev Fund 3,584 3,584 -

Multi-Family Servicing Fees 44,562 41,000 3,562

Preservation Fees - 191,000 (191,000)

LIHTC Fees 293,360 325,000 (31,640)

Section 8 Existing Fees 823,425 1,458,000 (634,575)

Federal Programs Administration Fees 97,068 350,000 (252,932)

Contract Administration Fees 628,206 701,000 (72,794)

Gain (Loss) on Sale of Investments, Net - - -

Gain (Loss) on Debt Retirement, Net - 130,000 (130,000)

Gain (Loss) on Sale of Mortgages, Net 135,622 80,000 55,622

Miscellaneous Income (119,772) 254,000 (373,772)

Federal Assistance Programs Income 51,194,944 51,194,944 -

TOTAL INCOME 59,989,494 59,652,527 336,967

EXPENSES:

Operating Expenses:

Salaries and Fringe Benefits 2,587,798 2,924,000 (336,202)

Technical Service Contracts 304,080 478,000 (173,920)

General Consultant Contracts 8,734 118,000 (109,266)

Rent, building depreciation & utilities 43,875 102,000 (58,125)

Building maint, equipment purchase & rental 189,733 79,000 110,733

Computer & Related Equipment Purchases 430,187 582,000 (151,813)

Charges from other State Departments 288,000 265,000 23,000

Travel - 29,000 (29,000)

Telephone 7,119 19,000 (11,881)

Printing, Supplies, & Postage 14,228 24,000 (9,772)

Advertising and Publicity 23,031 120,000 (96,969)

Sec 8 Property Mgrs Fees & Expenses 770,543 795,000 (24,457)

Temporary Clerical Assistance - 3,000 (3,000)

Training (2,175) 8,000 (10,175)

All Other 42,632 104,000 (61,368)

Deferred Operating Costs (130,000) (115,000) (15,000)

Total Operating Expenses 4,577,784 5,535,000 (957,216)

Single Family& HIP Mtg fees 762,576 645,000 117,576

Costs of Issuing, Paying Notes and Bonds 292,981 225,000 67,981

Provision for Losses on Uncoll. Mort. 583,840 717,000 (133,160)

Housing Development Grants 396 853,000 (852,604)

Michigan Housing and Community Dev Fund Grants 3,584 3,584 -

Rent Subsidy 45,178 45,000 178

Bond Insurance Expense 29,933 162,000 (132,067)

Homeownership Counseling Costs 76,960 54,000 22,960

Other - - -

Federal Assistance Programs Expense 49,585,353 49,585,353 -

TOTAL EXPENSES 55,958,585 57,824,936 (1,866,352)

EXCESS (DEFICIENCY) OF

INCOME OVER EXPENSES 4,030,909$ 1,827,591$ 2,203,318$


STATEMENT OF REVENUES AND EXPENSES

MONTH OF JULY 31, 2020

6

OVER (UNDER)ACTUAL BUDGET BUDGET

INCOME: Interest Income: Mortgage Loans 13,850,173$ 13,597,000$ 253,173$ Investments 832,963 865,000 (32,037) 14,683,135 14,462,000 221,135 Interest Expense (8,640,280) (9,481,000) 840,720 Net Interest Income 6,042,855 4,981,000 1,061,855

State Approp MI Housing and Comm Dev Fund - - - Multi-Family Servicing Fees 44,562 42,000 2,562 Preservation Fees - 190,000 (190,000) LIHTC Fees 151,432 325,000 (173,568) Section 8 Existing Fees 780,615 1,458,000 (677,385) Federal Programs Administration Fees 211,037 350,000 (138,963) Contract Administration Fees 673,306 702,000 (28,694) Gain (Loss) on Sale of Investments, Net - - - Gain (Loss) on Debt Retirement, Net - 130,000 (130,000) Gain (Loss) on Sale of Mortgages, Net 54,785 80,000 (25,215) Miscellaneous Income 10,198 253,000 (242,802.30) Federal Assistance Programs Income 57,205,793 57,205,793 - TOTAL INCOME 65,174,582 65,716,793 (542,211)

EXPENSES: Operating Expenses: Salaries and Fringe Benefits 2,531,964 2,670,000 (138,036) Technical Service Contracts 468,775 479,000 (10,225) General Consultant Contracts 83,803 117,000 (33,197) Rent, building depreciation & utilities 175,707 102,000 73,707 Building maint, equipment purchase & rental 27,864 80,000 (52,136) Computer & Related Equipment Purchases 59,145 582,000 (522,855) Charges from other State Departments 398,563 265,000 133,563 Travel - 29,000 (29,000) Telephone 194,174 19,000 175,174 Printing, Supplies, & Postage 46,088 24,000 22,088 Advertising and Publicity 54,380 121,000 (66,620) Sec 8 Property Mgrs Fees & Expenses 768,674 794,000 (25,326) Temporary Clerical Assistance - 3,000 (3,000) Training 7,077 8,000 (923) All Other 105,275 104,000 1,275 Deferred Operating Costs (55,000) (115,000) 60,000 Total Operating Expenses 4,866,491 5,282,000 (415,509) Single Family& HIP Mtg fees 793,546 645,000 148,546 Costs of Issuing, Paying Notes and Bonds 77,816 225,000 (147,184) Provision for Losses on Uncoll. Mort. 541,525 716,000 (174,475) Housing Development Grants 12,000 853,000 (841,000) Michigan Housing and Community Dev Fund Gran - - - Rent Subsidy 50,421 45,000 5,421 Bond Insurance Expense 350 163,000 (162,650) Homeownership Counseling Costs 11,299 54,000 (42,701) Other - - - Federal Assistance Programs Expense 56,207,799 56,207,799 - TOTAL EXPENSES 62,561,248 64,190,799 (1,629,551) EXCESS (DEFICIENCY) OF INCOME OVER EXPENSES 2,613,334$ 1,525,994$ 1,087,340$


MONTH OF AUGUST 31, 2020

7

OVER (UNDER)ACTUAL BUDGET BUDGET

INCOME: Interest Income: Mortgage Loans 13,821,458$ 13,689,000$ 132,458$ Investments 790,668 830,000 (39,332) 14,612,126 14,519,000 93,126 Interest Expense (8,611,550) (9,480,000) 868,450 Net Interest Income 6,000,576 5,039,000 961,576

State Approp MI Housing and Comm Dev Fund - - - Multi-Family Servicing Fees 34,009 42,000 (7,991) Preservation Fees - 191,000 (191,000) LIHTC Fees 167,710 325,000 (157,290) Section 8 Existing Fees 2,013,462 1,459,000 554,462 Federal Programs Administration Fees 113,487 350,000 (236,513) Contract Administration Fees 732,606 701,000 31,606 Gain (Loss) on Sale of Investments, Net - - - Gain (Loss) on Debt Retirement, Net 1,648,011 130,000 1,518,011 Gain (Loss) on Sale of Mortgages, Net 117,772 80,000 37,772 Miscellaneous Income 526,966 253,000 273,966 Federal Assistance Programs Income 54,454,762 49,848,052 4,606,710 TOTAL INCOME 65,809,361 58,418,052 7,391,309

EXPENSES: Operating Expenses: Salaries and Fringe Benefits 2,413,852 2,797,000 (383,148) Technical Service Contracts 463,487 478,000 (14,513) General Consultant Contracts 117,910 118,000 (90) Rent, building depreciation & utilities 58,735 102,000 (43,265) Building maint, equipment purchase & rental 19,269 79,000 (59,731) Computer & Related Equipment Purchases 812,752 582,000 230,752 Charges from other State Departments 344,228 265,000 79,228 Travel 12,022 29,000 (16,978) Telephone 17,193 19,000 (1,807) Printing, Supplies, & Postage 27,476 24,000 3,476 Advertising and Publicity 86,207 121,000 (34,793) Sec 8 Property Mgrs Fees & Expenses 757,371 794,000 (36,629) Temporary Clerical Assistance - 3,000 (3,000) Training 15,715 8,000 7,715 All Other 366,247 104,000 262,247 Deferred Operating Costs (90,000) (115,000) 25,000 Total Operating Expenses 5,422,466 5,408,000 14,466 Single Family& HIP Mtg fees 782,212 645,000 137,212 Costs of Issuing, Paying Notes and Bonds 199,516 225,000 (25,484) Provision for Losses on Uncoll. Mort. 552,130 717,000 (164,870) Housing Development Grants (1,736) 853,000 (854,736) Michigan Housing and Community Dev Fund Gran - - - Rent Subsidy 41,200 45,000 (3,800) Bond Insurance Expense 87,679 163,000 (75,321) Homeownership Counseling Costs 84,393 54,000 30,393 Other - - - Federal Assistance Programs Expense 53,974,310 53,974,310 - TOTAL EXPENSES 61,142,172 62,084,310 (942,138) EXCESS (DEFICIENCY) OF INCOME OVER EXPENSES 4,667,189$ (3,666,258)$ 8,333,447$


MONTH OF SEPTEMBER 30, 2020

8

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS QUARTER AND YEAR TO DATE ENDED SEPTEMBER 30, 2020 1. Single-Family activity for the quarter and year to date September 30, 2020 was as follows: Current Quarter Year to Date Units Amount Units Amount

Commitments outstanding – Beginning 352 $ 42,079,392 352 $42,079,392 Commitments issued 895 109,108,591 895 109,108,591 Loans purchased (742) (89,584,804) (742) (89,584,804) Cancellations, adjustments, etc. (12) (1,561,090) (12) (1,561,090) Commitments outstanding - Ending 493 $60,042,089 493 $60,042,089

Single-Family Delinquency Report as of September 30, 2020:

Delinquent % of Total Loans Days Delinquent # of Loans Loan Amount 09/30/20 06/30/20 09/30/19 30-59 1,015 $ 84,035,302 4.45% 5.16% 5.71% 60-89 379 33,568,464 1.78% 2.70% 1.50% Over 90 1,401 127,691,660 6.76% 4.06% 2.11% In Foreclosure 5 256,456 0.01% 0.07% 0.18%

2,800 $245,551,882 13.00% 11.99% 9.50%

2. Home Improvement loan activity for the quarter and from inception of the program was as follows: Quarter Cumulative

Number of loans purchased 1 27,930 Amount purchased $7,087 $177,664,050 Average interest rate 4.00% 5.72% Average loan amount $7,087 $6,361

Home Improvement loan delinquency report as of September 30, 2020:

Delinquent % of Total Loans Days Delinquent # of Loans Loan Amount 09/30/20 06/30/20 09/30/19 30-59 10 $103,068 3.84% 0.97% 1.21% 60-89 3 42,943 1.60% 0.45% 1.50% Over 90 15 143,354 5.34% 5.57% 4.47%

28 289,365 10.78% 6.99% 7.18%

9

Year to date as of September 2020:Long term investment-book:Excess of market over book:Long term investment-market:Unrealized Gain (Loss) for this Fiscal Year (July - Sept):

Average interest rates earned on mortgage loans and investments were approximately as follows (excludes mortgagors' escrow fund investments) (in thousands):

QuarterEnded Amount Rate Amount Rate Amount RateSept 16 2,290,434 5.08 712,367 2.97 3,002,801 4.58Dec 16 2,324,740 5.10 707,889 2.78 3,032,629 4.56March 17 2,358,292 5.06 610,994 2.75 2,969,286 4.58June 17 2,381,714 5.10 522,604 2.92 2,904,318 4.71Sept 17 2,406,408 5.02 468,963 2.81 2,875,371 4.66Dec 17 2,444,303 5.04 499,114 2.61 2,943,417 4.63March 17 2,501,985 4.99 489,945 2.68 2,991,930 4.62June 18 2,553,737 4.95 602,374 2.56 3,156,111 4.50Sept 18 2,674,254 4.85 666,900 2.39 3,341,154 4.35Dec 18 2,803,084 4.82 606,127 2.79 3,409,211 4.46March 19 2,946,363 4.81 526,758 2.88 3,473,121 4.52June 19 3,081,389 4.80 580,738 2.71 3,662,127 4.47Sept 19 3,180,145 4.77 662,633 2.53 3,842,778 4.39Dec 19 3,277,992 4.75 786,890 2.13 4,064,882 4.24March 20 3,362,524 4.72 701,311 2.16 4,063,835 4.28June 20 3,425,916 4.70 694,066 1.55 4,119,982 4.17Sept 20 3,450,247 4.83 719,892 1.65 4,170,139 4.28

Average rate borne by Authority bonds were as follows (in thousands):

QuarterEnded Amount Rate Amount Rate Amount RateSept 16 2,008,202 4.05 150,705 0.79 2,158,907 3.82Dec 16 2,087,252 3.93 94,573 0.75 2,181,825 3.79March 17 2,043,518 3.89 105,610 0.76 2,149,128 3.74June 17 1,980,708 3.95 86,465 0.99 2,067,173 3.82Sept 17 1,960,915 3.91 127,425 1.00 2,088,340 3.73Dec 17 1,972,208 3.75 195,180 1.17 2,167,388 3.51March 17 1,924,107 3.79 255,130 1.36 2,179,237 3.51June 18 2,038,713 3.83 270,965 1.58 2,309,678 3.57Sept 18 2,180,915 3.78 296,608 1.48 2,477,523 3.51Dec 18 2,314,253 3.96 260,067 1.77 2,574,320 3.74March 19 2,351,975 3.83 284,930 1.65 2,636,905 3.60June 19 2,501,434 3.75 291,667 1.83 2,793,101 3.55Sept 19 2,620,704 3.78 306,220 1.52 2,926,924 3.54Dec 19 2,961,278 3.62 279,190 1.35 3,240,468 3.42March 20 2,940,348 3.76 249,010 1.76 3,189,358 3.60June 20 2,964,750 3.57 243,543 0.57 3,208,293 3.34Sept 20 3,033,620 3.40 227,747 0.20 3,261,367 3.18

Mortgage Loans Investments Aggregate

Fixed RateBonds

Variable RateBonds Aggregate

($1,929,583)

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS FOR QUARTER ENDED SEPTEMBER 30, 2020

$679,968,588$61,867,855$741,836,443

10

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITYDETAIL OF MULTIFAMILY MORTGAGE LOANS

SEPTEMBER 30, 2020

DEVELOPMENTS UNDER CONSTRUCTION AND MONTH OF INITIAL CLOSINGMSHDA # OF MORTGAGE BALANCE % CONST.

NUMBER DEVELOPMENT NAME DATE UNITS COMMITMENT 9/30/2020 COMPLETE (1) GRAND RIVER SHORES 12/06 $520,000 $464,631 (2)

341-2 FRIENDSHP MANOR 4/19 170 $6,917,677 $6,917,677 95%444-2 ROBERTS III 5/18 197 5,004,124 0 97%889-2 UNIVERSITY MEADOWS 11/19 197 $2,290,466 $2,290,466 32%893-2 COLONIAL MEADOWS 12/19 82 $5,193,181 $5,193,181 65%960-2 SHILOH COMMONS 3/20 125 $4,940,680 $3,595,897 38%

1045-2 MARSH RIDGE III 8/19 48 $7,577,114 $7,577,114 100%3428-2 OAKLAND PARK TOWERS 7/18 144 28,650,107 28,650,107 95%3840 KALAMAZOO CREAMERY 6/19 48 5,731,590 3,416,467 62%3848 APTS AT 28 WEST 10/19 226 24,899,527 13,121,804 55%3850 LYON TOWNSHIP SENIOR LIVING 3/20 130 23,702,198 0 11%3881 EASTERN ELEMENTARY 2/20 50 3,450,959 2,188,344 20%3907 OAKWOOD TOWNHOMES 8/20 6 243,791 21,136 8%3979 WILLOW VISTA 4% 7/20 33 1,790,722 1,790,722 15%3980 WILLOW VISTA 9% 7/20 19 923,825 923,825 18%

1,417 $118,877,623 $76,151,371

COMPLETED DEVELOPMENTS AWAITING FINAL CLOSING AND INITIAL CLOSING MONTH 432-2 RIVERVIEW TOWERS 12/18 170 $9,120,008 $9,120,008488-2 PARK FOREST 5/18 290 19,715,536 $19,715,536658-2 CAMELOT HILLS 11/18 144 $4,889,005 $4,889,005993-2 LAKESHORE VILLAGE II 5/17 96 6,406,232 6,406,232

2276-2 WALNUT GROVE 6/18 80 5,085,762 5,085,7623593 TREYMORE APTS 6/15 28 610,234 610,2343716 LAKESHORE VILLAGE APTS III 9/17 144 11,077,516 11,077,5163725 GRANDHAVEN MANOR II 3/17 78 8,867,157 8,867,1573757 GARDENVIEW ESTATES 5 AB 6/17 97 2,500,003 2,500,0033758 VILLAGE AT ROSY MOUND 10/17 144 13,364,741 13,364,7413801 LABELLE TOWERS 6/18 210 12,102,266 12,102,2663832 GENESIS VILLAS II 12/18 89 5,415,196 5,415,196

1,570 $99,153,656 $99,153,656

DEVELOPMENTS WITH CONSTRUCTION LOANS341-2 FRIENDSHIP MANOR 4/19 170 1,922,878 1,922,878432-2 RIVERVIEW TOWERS 12/18 170 3,361,179 0658-2 CAMELOT HILLS II 11/18 144 2,401,039 642,513889-2 UNIVERSITY MEADOWS 11/19 197 2,740,112 463,016893-2 COLONIAL MEADOWS 12/19 82 1,001,153 1,001,012960-2 SHILOH COMMONS 3/20 125 3,399,394 2,122,920993-2 LAKESHORE VILLAGE II 5/17 96 852,356 852,356

2276-2 WALNUT GROVE 6/18 80 631,555 03412 PALMER PARK SQUARE 12/11 202 13,250,000 680,2053593 TREYMORE APTS 7/14 28 2,378,972 130,1273716 LAKESHORE VILLAGE APTS III 9/17 144 1,479,7473757 GARDENVIEW ESTATES 5 AB 6/17 97 9,695,259 03801 LABELLE TOWERS 6/18 210 1,951,445 783,7133832 GENESIS VILLAS II 12/18 89 1,346,032 250,6243840 KALAMAZOO CREAMERY 6/18 48 1,944,068 03881 EASTERN ELEMENTARY 2/20 50 4,079,265 03979 WILLOW VISTA 4% 7/20 33 1,003,478 11,1023980 WILLOW VISTA 9% 7/20 19 676,175 75,888

1,984 $54,114,107 $8,936,354

TOTAL COMPLETED/NON-COMPLETED 2,987 $272,145,386 $184,241,381

OUTSTANDING COMMITMENTS AS OF SEPTEMBER 30, 2020# OF PERMANENT CONSTRUCTION

DATE UNITS LOAN LOAN TOTAL83-2 EDGEWOOD VILLAGE APTS 1/20 135 14,930,203 - 14,930,203

124-2 CLIFFVIEW APTS 5/20 117 7,222,673 - 7,222,673 246-2 PINE OAK APTS 2/20 127 5,301,821 80,411 5,382,232 924-2 LAKEWOOD MANOR 4/20 30 1,547,876 1,800,037 3,347,913

1440-2 FERGUSON APTS 7/19 119 994,963 - 994,963 2175-2 ARBORVIEW VILLAGE 2/20 161 9,443,831 535,977 9,979,808 2256-2 APPLE RIDGE II 7/20 56 4,664,684 - 4,664,684 3788 WESTCHESTER VILLAGE SOUTH 6/18 150 5,506,912 2,048,842 7,555,754 3792 GOLFVIEW MEADOWS 12/17 27 935,960 3,290,650 4,226,610 3793 MARWOOD APTS 8/20 71 5,060,495 4,004,916 9,065,411 3803 TRANSFIGURATION PLACE 6/20 19 751,635 2,975,059 3,726,694 3805 MACK ALTER 3/20 14 814,091 1,519,839 2,333,930 3806 VILLAGE AT LAFRANIER WOODS 8/20 115 16,266,426 16,266,426 3814 WHISPERING WOODS 12/18 193 14,634,069 - 14,634,069 3846 ROYAL OAK MANOR 4/20 243 10,200,952 - 10,200,952 3851 MORTON MANOR APTS 7/20 150 8,595,169 3,069,845 11,665,014 3852 GREENBRIAR APTS 7/20 40 2,513,788 714,185 3,227,973 3856 HOM FLATS ON 28TH STREET II 6/20 160 18,069,782 - 18,069,782 3853 BRENTWOOD APTS 7/20 50 2,974,061 778,164 3,752,225 (3)3861 NORTHLAWN GARDENS APTS 10/19 96 3,108,101 2,261,785 5,369,886 3867 AMERICAN HOUSE VILLAGE AT BLOOMFIELD 7/20 150 30,326,523 - 30,326,523 3912 SAVANNAH-WILSHIRE 6/20 40 1,507,392 2,533,820 4,041,212 3920 HOM FLATS AT FELCH STREET 8/20 114 14,621,828 1,628,172 16,250,000 3921 WAVERLY PLACE 6/20 140 9,443,463 5,140,198 14,583,661 3923 LAKE SUPERIOR VILLAGE 6/20 116 7,807,132 4,937,245 12,744,377 3924 PINE RIDGE 5/20 140 5,186,559 4,631,221 9,817,780 3926 CARRIAGE PLACE APTS 8/20 234 10,890,337 8,675,853 19,566,190

3007 $213,320,726 50,626,219 263,946,945

(1) schedule no longer available. Data pulled from draw sheets or data provided to finance by construction specialists.(2) Not Available

11

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITYSEED LOANS, REPAYABLE GRANTS AND BRIDGE LOANS

SEPTEMBER 30, 2020

TOTAL TOTAL TOTAL TOTAL BALANCE MSHDA # DEVELOPMENT AUTHORIZED DISBURSED REPAID WRITE OFF 9/30/2020

REPAYABLE FIRE SAFETY GRANTS:280 BUENA VISTA 56,204 57,097 8,725 48,372

56,204 57,097 8,725 0 48,372REPAYABLE ENERGY CONSERVATION GRANTS:

17 JACKSON 31,003 31,003 0 31,00343 BANGOR DOWNS 54,875 54,531 0 54,53144 OAK MEADOWS 68,262 61,806 2,339 59,46761 CARL TERRACE 131,117 131,117 0 131,117568 DIVINE MR 650 650 0 650708 MADISON SQUARE REHAB 9,182 9,182 0 9,182 0

295,089 288,289 2,339 9,182 276,768REPAYABLE GRANTS:

678-G DETROIT NPHC 100,000 100,000 90,870 9,130HDF-04 JERICHO HOUSE 55,000 8,836 0 8,836HDF-13 INNER CITY CHRISTIAN FEDERATION (ICCF) 75,000 75,000 75,000HDF-22 NATIONAL CHURCH RESIDENCE 69,183 56,250 0 56,250HDF-96 WOMEN'S RESOURCE CENTER OF GRAND TRAVERSE AREA 435,000 435,000 0 435,000HDF-110 PROPERTY STABILIZATION, INC, A MICHIGAN CORPORATION 248,500 245,000 245,000HDF-139 WAYNE METROPOLITAN COMMUNITY ACTION AGENCY 180,000 180,000 180,000

1,162,683 1,100,086 90,870 0 1,009,216

HDF-2006-0140-DVHI UNDERGROUND RAILROAD, INC 600,000 600,000 45,677 554,323HDF-2006-0493-DVHI BIG RAPIDS HOUSING COMMISSION 246,415 246,415 246,415HDF-2006-5040-DVHI WOMEN'S INFORMATION SERVICES 474,186 528,585 528,585HDF-2006-5352-DVHI SAFE HORIZONS 450,000 450,000 450,000HDF-2006-5148-DVHI YMCA WEST CENTRAL MICHIGAN 570,000 570,000 570,000

HDF-2006-0341-CHI GREATER LANSING HOUSING COALIATION 500,000 500,000 500,000

HDF-2019-0074-MOD KALAMAZOO NEIGHBORHOOD HOUSING SERVICES 196,000 196,000 196,000HDF-2019-0298-MOD CITY OF COLDWATER 196,000 179,581 179,581 0HDF-2019-0318-MOD BETHANY HOUSING MINISTRIES 196,000 177,537 145,745 31,792 0HDF-2019-0493-MOD BIG RAPIDS HOUSING COMMISSION 196,000 177,970 176,531 1,439HDF-2019-0530-MOD CITY OF DOWAGIAC 196,000 36,787 36,787HDF-2019-9931-MOD HABITAT FOR HUMANITY NORTHEAST MICHIGAN 196,000 166,017 166,017HDF-2019-9936-MOD CITY OF BEAVERTON 196,000 184,819 184,819HDF-2019-9948-MOD BARRY COUNTY COMMUNITY FOUNDATION 196,000 9,440 9,440

HDF-2020-9959-MOD MARQUETTE COUNTY LAND BANK AUTHORITY 196,000.00 65,138.00 65,138HDF-2020-9961-MOD NORTHERN MICHIGAN LIMITED DIVIDEND HOUSING ASSOC, LLC 196,000.00 6,000.00 6,000

4,800,601 4,094,289 547,535 31,792 3,514,962

PREDEVELOPMENT LOANSHDF-43 NORTHERN HOMES CDC 177,300 177,300 100,000 77,300HDF-97 NORTHERN HOMES CDC 74,325 71,546 5,631 65,915HDF-106 INNER CITY CHRISTIAN FED (ICCF) 375,000 547,421 319,434 227,987HDF-161 GRAND TRAVERSE COUNTY LAND BANK 65,000 61,444 61,444HDF-212 HOMESTRETCH NPHC 78,650 104,706 104,706 0HDF-239 CADILLAC HOUSING INITIATIVE PROGRAMS 56,720 30,275 30,275HDF-359 AVALON HOUSING 150,000 148,193 148,193 0HDF-388 OCEANNA COUNTY HOUSING COMMISSION NONPROFIT CORP 101,254 101,254 101,254 0HDF-390 HOMESTRETCH NPHC 58,700 53,507 53,507 0HDF-391 LINC UP NON-PROFIT CORP 82,149 82,149 82,149 0

1,219,098 1,377,795 914,874 0 462,921

TOTAL SEED LOANS, REPAYABLE GRANTS AND PREDEVELOPMENT LOANS 5,312,239 LESS: RESERVE FOR LOSS -2,607,548NET REPAYABLE GRANTS, SEED LOANS, AND PREDEVELOPMENT LOANS 2,704,692

BRIDGE LOAN COMMITMENTS AND BALANCES OUTSTANDING AS OF SEPTEMBER 30, 2020:TOTAL AMOUNT AMOUNT BALANCE

DEVELOPMENT COMMITMENT DISBURSED REPAID OUTSTANDING830 COURT STREET VILLAGE 3,042,680 358,352 46,489 311,863890 FRIENDSHIP MEADOWS 1,127,201 1,127,201 1,071,517 55,684

TOTALS 4,169,881 1,485,553 1,118,006 367,547

TOTAL REPAYABLE BRIDGE LOANS 367,547

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MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY PASSTHROUGH OBLIGATIONS Bonds issued pursuant to Section 44(c) of the Act and not yet called were as follows as of September 2020: Name Credit Enhancement Amount Siena Place Apt. Financial Security Assurance 3,450,000 The Landings AMBAC 10,335,000 Berrien Woods III Federal Home Loan Bank 6,200,000 Parkview Place Fannie Mae 6,890,000 Norton Shores AMBAC 8,441,000 Center Line Park Towers GNMA Collateralized Program 15,065,000 Canterbury House (Jackson) Federal Home Loan Bank 11,500,000 Alderwood Estates Federal Home Loan Bank 8,300,000 River Park Village (Whittier) Fannie Mae 17,000,000 Williams Pavilion FHA Mortgage Insurance 7,945,000 Sand Creek Citibank 3,835,000 Sand Creek Village II Apt. Citibank 5,700,000 Teal Run Apartments Citibank 6,585,000

$111,246,000

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TO: Governor Gretchen Whitmer Sen. Mike Shirkey, Senate Majority Leader Sen. Jim Ananich, Senate Minority Leader Rep. Jason Wentworth, Speaker of the House Rep. Donna Lasinski, House Minority Leader Sen. Roger Victory, Senate Appropriations General Government Subcommittee Sen. Ken Horn, Senate Appropriations Labor and Economic Opportunity Subcommittee Rep. VanWoerkom, House Appropriations General Government Subcommittee Christopher Harkins, Senate Fiscal Agency Mary Ann Cleary, House Fiscal Agency

FROM: Gary Heidel, Acting Executive Director, MSHDA

DATE: February 10, 2021

RE: FY 2020 Housing Production Goals Report

Section 32(14) of P.A. 346 of 1966 requires the Michigan State Housing Development Authority (MSHDA) to provide the Governor and the appropriate legislative committees with an annual report for housing projects financed by the Authority. The attached document represents an assessment of FY 2020 production and the Authority’s goals for FY 2021. It also addresses the boilerplate reporting requirements in Section 990 of Public Act 166 of 2020. Please note that the Authority’s 2020 fiscal year ran from July 1, 2019 through June 30, 2020.

In FY 2020, the Authority financed $607.3 million in affordable housing in Michigan, resulting in 5,508 new or rehabilitated apartments and single-family homes. In addition, the Authority administered the federal Housing Choice Voucher Program (formerly known as Section 8), and 31,581 families participated in this program in FY 2020. Please see the full report for further detail.

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February 10, 2021

FY 2020

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TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................... 2

MSHDA PRODUCTION ................................................................................................... 4 A. Multifamily Loan Programs .......................................................................................... 4 B. Supportive Housing and Homeless Initiatives ............................................................. 5 C. Pass-Through Short-Term Bond Program ................................................................... 5 D. Single-Family Mortgage Loan Program ....................................................................... 5 E. Michigan Mortgage Credit Certificate Program ............................................................ 6 F. Property Improvement Program Loan ......................................................................... 6

OTHER REQUIRED INFORMATON ................................................................................... 7 A. Social and Economic Benefits ..................................................................................... 7 B. Demographic Information ............................................................................................ 7 C. Construction Jobs Created, Wages and Taxes Paid ................................................... 8 D. Grants to Local Units of Government & Nonprofit Organizations ................................. 8 E. Mobile Homes, Nonprofit Housing, and Cooperative Programs ................................... 8 F. Neighborhood Preservation Program .......................................................................... 8 G. Prepayment of Federally and Authority Assisted Loans .............................................. 9 H. Low-Income Housing Tax Credit (LIHTC) .................................................................... 9 I. Education and Training Opportunities ......................................................................... 9 J. Refinancings ............................................................................................................... 9 K. Housing Choice Voucher Program .............................................................................. 9 L. Housing and Community Development Fund ............................................................ 10 M. Loans to Mortgage Lenders ...................................................................................... 10 N. Sec. 44c Pass-Through Reporting Requirement ....................................................... 10 O. Federal Housing Trust Fund ...................................................................................... 10 P. MSHDA MOD............................................................................................................ 10 Q. Neighborhood Enhancement Program Grants........................................................... 11

EXHIBITS ........................................................................................................................ 11 Exhibit 1. FY 2020 Production and Goals .......................................................................... 12 Exhibit 2. FY 2020 Single Family Loans ............................................................................. 13 Exhibit 3. FY 2020 Michigan Mortgage Credit Certificates ................................................. 14 Exhibit 4. FY 2020 Property Improvement Loans ............................................................... 15 Exhibit 5. FY 2020 Estimated Construction Jobs, Wages, Taxes ....................................... 16 Exhibit 6. FY 2020 Grants to Nonprofit Organizations & Local Governments ..................... 17 Exhibit 7. FY 2020 Low-Income Housing Tax Credits Allocated ......................................... 19 Exhibit 8. FY 2020 Low-Income Housing Tax Credits Denied ............................................ 20 Exhibit 9. FY 2020 Changes to the Qualified Allocation Plan (QAP) .................................. 21 Exhibit 10. FY 2020 NEP Awarded Communities: ............................................................. 21

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EXECUTIVE SUMMARY Section 32(14) of P.A. 366 of 1966, MSHDA’s authorizing act, requires the Authority to report whether the production goals for the previous fiscal year have been met, and, if not, why. By the end of the fiscal year, MSHDA had financed $607.3 million in new/renovated housing, resulting in 5,508 units. The Authority did not meet its agency-wide production goal for FY 2020 of $ 611,555,708 and 7,065 units, although it exceeded goals in Single Family Loans, making $464,174,432 in loans funding 4,123 units – this exceeded the goals by more than $192 million in loans and 1,243 units. (See Exhibit 1.) In addition to its production activities, the Authority also distributed $13.5 million in community development and homelessness prevention grants to local governments and nonprofit organizations in FY 2020. MSHDA also administered $30.4 million in the Low-Income Housing Tax Credit program, which helped create or preserve 1,959 units of affordable rental housing in 32 developments statewide. In addition, the Authority oversaw the administration of the federal Housing Choice Voucher Program (formerly known as Section 8) to 31,581 low-income families. In FY 2020, MSHDA oversaw the administration of the federally funded Help for Hardest Hit Programs to help prevent foreclosures for 791 families and to disburse $88 million for blight elimination of 4,560 units.

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MSHDA PRODUCTION MSHDA is required by P.A. 346 of 1966 to establish numeric goals for its programs financed with bonds and notes and report the progress toward those goals each year. Most of these programs are loan programs, and they result in the rehabilitation or new construction of apartments and single-family homes (described as “units” throughout the report). The following section, provided in response to this requirement, is organized by MSHDA’s major areas of business. A table summarizing the Authority’s FY 2020 actual production compared to its FY 2020 goals as well as its new goals for FY 2021, can be found in EXHIBIT 1. For more information on MSHDA’s programs and activities, please see our website at the following link: www.michigan.gov//mshda.

A. Multifamily Loan Programs

1. Taxable and Tax-Exempt Direct Lending Programs These programs represent the Authority’s response to localized housing and reinvestment needs by financing rental housing. Funding comes from the issuance of taxable and tax-exempt bonds to investors, the proceeds of which are then loaned for the acquisition, construction or rehabilitation, and long-term financing of affordable rental housing units. Typically, at least 40% of the units in each development must be occupied by households with low incomes, defined as less than or equal to 60% of the Area Median Income. The tax-exempt lending programs operated in FY 2020 with a fixed interest rate of 4.625%, while the taxable bond lending programs operated with a fixed interest rate of 6.00%. In addition, the Authority provided Preservation Fund Loans as permanent gap funding sources. In FY 2020, the multifamily lending program financed $107.8 million in loans, representing 10 developments with a total of 1,099 housing units. The program did not meet its FY 2020 goal of making $264 million in loans and producing 3,256 units, as 22 transactions that were anticipated to close in FY 2020 did not close before June 30, 2020, due to COVID-19 concerns. Current projections show that those 22 transactions would have made up an additional $277 million in loans, and an additional 2,717 units. Eighteen of the 22 are expected to close in FY 2021, while the sponsor of the remaining four withdrew their proposals. All four of the proposals that were withdrawn were done so due to feasibility issues. The FY 2021 goal is based on the proposals within our active pipeline, which includes 18 of the eight proposals that we had expected to close in FY 2020 but did not.

2. Gap Financing Program

MSHDA’s Gap Financing Programs work in conjunction with the Authority’s Tax-Exempt Bond Program to competitively distribute $34.4 million in gap funding among applicants for multifamily loans; almost $14.5 million in Mortgage Resource Funds were part of the $107.8 million in loans mentioned above, along with $9.4 million made up of HOME gap-funded transactions that closed in FY 2020, and an additional $10.5 million in Housing Trust Funds (HTF) gap-funded transactions that closed in FY 2020.

3. Equity Bridge Loan (EBL) Program

The Authority did not make any loans under the EBL Program in FY 2020.

http://www.michigan.gov/mshda

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B. Supportive Housing and Homeless Initiatives

1. Homeless Housing Development Programs This program represents the Authority’s investments into new construction or acquisition/rehabilitation of projects for supportive housing. Under this initiative MSHDA may make Project-Based Vouchers available, and many of the developments receive Low-Income Housing Tax Credits. Units are made available to the tenants earning 30% or below of Area Median Income. MSHDA did not make any loans under the Homeless Housing Development Program in FY 2020, as no funds were allocated to this program.

2. Homeless Grants Under this category $5,007,550 million in MSHDA funding was allocated for FY 2020 to match and supplement HUD’s Emergency Solutions Grant (ESG) Program. The ESG program offers financial assistance to public and nonprofit organizations that are responding to the needs of homeless populations through a Continuum of Care process. ESG funds can be used for shelter operation, essential services, prevention, and rapid re-housing leasing assistance. In FY 2020, 49 ESG grants totaling just over $10 million in federal and MSHDA funds were allocated.

C. Pass-Through Short-Term Bond Program The Authority’s Act permits it to participate in "conduit” or "pass-through" financings in which the bonds issued to finance a development are a limited obligation of the Authority; the bonds are not secured by the Authority's capital reserve capital account and the bonds are not backed by the moral obligation of the State of Michigan. Instead, the bonds are secured by the revenues of the borrower, the real and personal property being financed, and a form of credit enhancement acceptable to the Authority. After MSHDA issues the short-term bonds (for up to 36 months), project sponsors typically refinance their projects through a Federal Housing Administration (FHA) insured Ginnie Mae (GNMA) mortgage or other financing source. The Authority met its FY 2020 Pass-Through Short-Term Bond Program goal of making $30 million in Pass-Through bond financing available and creating the ability for 500 units of affordable housing to be produced under the program. No projects closed under this program in FY 2020; however, one project received an inducement resolution and was funded from FY 2020 bond cap. The reason all of the bond cap was not utilized is because the Pass-Through Short-Term Bond Program was a secondary program of the Authority. To the extent that projects qualified for the Pass-Through Short-Term Bond Program, it was available for them to utilize. However, due to certain requirements within MSHDA’s programs, the majority of 4% LIHTC/Tax Exempt Bond developments that applied were directed to either the Tax-Exempt Direct Lending Program or the Gap Financing Program, to create efficiencies within those programs. The Authority extended and modified the program in FY 2021 for a period of one year by making available up to $100 million in additional volume cap and amending prior program requirements to allow more applications to access this financing source. The FY 2021 goal is to make up to $100 million in pass-through bonds available and create the ability for 1,500 housing units to be financed under this program.

D. Single Family Mortgage Loan Program This program allows the Authority to finance low- and moderate-income mortgages for people meeting income and purchase price limits. The loans are fixed-rate, level payment, 30-year mortgages. Borrowers must have acceptable credit and the ability to repay the loan.

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In FY 2020, this program financed 4,123 existing single-family units, representing a total investment of $464 million. The average purchaser of an existing home was 33 years old, with a household size of 2 and an average income of approximately $53,343. The average loan amount for the buyer of an existing home was $112,582. The Authority exceeded its FY 2020 goal of financing 2,880 single family homes. In late 2013, MSHDA began offering a loan program designed specifically for the repeat homebuyer. The MI Next Home program (now called MI Home Loan Flex) allows the repeat homebuyer to purchase a home with an FHA, RD, Conventional or VA mortgage while foregoing some of the more restrictive aspects of the MI Home Loan mortgage. Additionally, MI Home Loan Flex customers can still use our popular down payment assistance with either the FHA, Conventional or RD product. As of June 30, 2020,194 loans have been committed totaling $21.3 million and 202 loans have been purchased for a total of $21.7 million. In addition to mortgage lending, the Homeownership Division aided counseling services that were funded via general operating income. Counseling was provided in the following areas: Homebuyer education, foreclosure prevention; pre-purchase individual counseling; financial capability counseling; Family Self-Sufficiency and Key to Own program, pre-assessment counseling. A total of 4,994 clients were served using the Fiscal Year 2019 HEP Counseling Grant funds, and 6,254 clients served using the Fiscal Year 2019 HUD Counseling Grant funds. Taken together, more than 11,000 Michigan households received counseling under these programs.

Federal Stimulus Funding

MSHDA oversees the administration of the Help for Hardest Hit Programs. These are federally funded programs being used to help homeowners who have a high risk of default or foreclosure. These programs include blight elimination in 20 cities and a launch in September 2018 of the Step Forward Down Payment program. In FY 2020, MSHDA oversaw the disbursement of $ 3.9 million to assist 791 households under the Help for Hardest Hit Program. The Authority oversaw the disbursement of $88 million for 4,560 units under the Blight Elimination program and funded 493 down payment loans in 61 designated zip codes for a total investment in 10 counties of $7.2 million.

E. Michigan Mortgage Credit Certificate Program This program, authorized by Congress in 1984, reduces the amount of federal income tax a homebuyer pays, thus giving the person more available income to qualify for a conventional mortgage and make house payments. Potential homebuyers must meet income and purchase price limits. The lender sets loan terms. The Authority must turn in a portion of its allocated mortgage revenue bond authority to the U.S. Treasury to utilize the Mortgage Credit Certificates. In FY 2020, the program assisted the financing of 268 existing single-family homes, resulting in an investment of $35 million. The average age of an MCC recipient purchasing an existing home was 32; the average family size was 2. The Authority did not meet its goal of producing 396 certificates primarily due to decreased statewide production due to COVID-19 restrictions.

F. Property Improvement Program (PIP) Loans This program helps preserve older, existing housing by offering loans to homeowners that meet income limits. In FY 2020, this program made 18 loans, totaling $235,055. Of these loans, 10% were made to borrowers over age 55. Approximately 100% of the loans went to improve homes

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that were 40 years of age or older. The Authority did not meet its FY 2020 goal of providing at least 33 PIP loans due to a decrease in lender participation. Additional efforts will be made in 2021 to expand lender participation.

OTHER REQUIRED INFORMATON In addition to requiring information about MSHDA’s production each fiscal year, MSHDA’s Act also requires reporting on other aspects of the Authority’s activities, such as social and economic benefits, education and training, and actions related to the Low-Income Housing Tax Credit program. Any new programs adopted by the Authority or enacted by the Legislature must also be discussed in the report. The following pages present this required information.

A. Social and Economic Benefits Section 32(16)(b)(c)(d)(e) and (f) requires the Authority to report on the social and economic benefits of MSHDA’s housing projects to the immediate neighborhoods and the cities in which they have been constructed, the extent of direct and indirect displacement of lower income persons, and the extent of additional reinvestment activities attributable to the Authority’s financing of these projects. The obvious short-term benefits are the increased availability of quality, affordable housing for low- and moderate-income people, increased construction contracts and sales for builders and realtors, and increased Community Reinvestment Act production for local lenders. Furthermore, the multifamily developments financed by the Authority employ people who receive salaries and expend dollars for vendor services. Developments also provide common space designed to enhance the community. Within these spaces many developments allow local senior citizen groups to provide meal service, medical examinations, and classes of various kinds. In other developments, there are police mini-stations, food cooperatives, book exchanges, craft shows, neighborhood watch programs, senior pal programs, and youth work programs. The Authority requires, as part of the underwriting process, that relocation planning be performed and implemented in any situation where a MSHDA loan would result in the displacement of lower income people. The Authority avoids approval of loans where such displacement cannot be adequately addressed.

B. Demographic Information Section 32(16)(g) requires the Authority to report on the age, race, family size, and average income of the tenants in housing projects. Information on the demographics of many program beneficiaries is contained throughout the report, listed by program. Demographic information for the Single Family, Michigan Mortgage Credit Certificate, and PIP Programs are found in EXHIBIT 2, EXHIBIT 3, and EXHIBIT 4, and information for the Housing Choice Voucher program is found in the text of the “Housing Choice Voucher Program” section. The following estimates provide an indication of the demographics of low-income tenants in MSHDA’s multifamily developments: As of August 2020: 42.8% of tenants who provided

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information about race were white and 57.2% were non-white. The average age of the head of household was 49 years, the average family size was 1.7 persons, and the average income was $10,374. (This data includes units in properties funded both under MSHDA’s Direct Lending program and the federal Low-income Housing Tax Credit program.)

C. Construction Jobs Created, Wages and Taxes Paid Section 32(16)(h) requires the Authority to estimate economic impact of its multifamily lending development projects, including the number of construction jobs created, wages paid, and taxes and payments in lieu of taxes paid. In FY 2020, Authority-financed housing resulted in an estimated 1,663 jobs, caused an estimated $48.8 million in wages to be paid, and resulted in an estimated $15.6 million in federal and state taxes being collected. Approximately 11 MSHDA-financed properties received payments in lieu of taxes in FY 2019. EXHIBIT 5 estimates the number of construction jobs created, wages paid, and federal and state taxes paid in FY 2020.

D. Grants to Local Units of Government & Nonprofit Organizations

MSHDA makes grants to local units of government and nonprofit housing organizations for community development and the prevention of homelessness. In FY 2020, 120 grants were made to local units of government and nonprofit housing and service providers, for a total grant expenditure of $13.5 million. (See the table below.) EXHIBIT 6 details each grant made to local units of government and nonprofit housing and service providers.

Type of Grant Dollars Granted

Grants to Prevent Homelessness $11,476,239

Emergency Solutions Grants (ESG) $10,015,100

Statewide Partnership and Homeless Assistance Special Grants $358,500

Homeless Management Information System (HMIS) $1,102,639

Housing Initiatives Grants $ 2,100,000

Neighborhood Enhancement Program Grants $2,100,000

TOTAL GRANTS $13,576,239

E. Mobile Homes, Nonprofit Housing, and Cooperative Programs Section 32(16)(i) requires the Authority to report on the progress in developing mobile home parks and mobile home condominium projects, constructing or rehabilitating consumer housing cooperative projects, and in financing construction or rehabilitation of nonprofit housing projects. In FY 2020, no mobile home parks were financed under the Michigan Mortgage Credit Certificate Program or Single-Family Program. No consumer housing cooperative projects were financed under Authority programs in FY 2020.

F. Neighborhood Preservation Program Section 32(16)(j) requires the Authority to report on the progress in developing the Neighborhood Preservation Program (NPP). The NPP, the goal of which was to positively impact the image, physical conditions, and market and neighborhood management of target neighborhoods, has been discontinued and has not been funded since FY 2011.

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G. Prepayment of Federally and Authority Assisted Loans Section 32(16)(k) requires the Authority to report on the status of federal programs that assist low-income tenants displaced because of prepayment of federally or Authority assisted loans.

Much of the housing stock, which currently serves Michigan’s lowest income citizens was typically built between 1974 and 1985 and needs rehabilitation and preservation. The Authority, however, has preservation requirements to prevent or limit tenants from being displaced, when prepayment, or alteration to the financing, are being considered for both federally assisted and MSHDA-financed rental housing. The goal is to preserve tenancy but is balanced with rehabilitating the housing stock.

The Authority offers tax-exempt and taxable preservation lending to extend the affordability, viability, and livability of this existing rental housing for a minimum of 40 years. A Mortgage Resource Fund (MRF) loan, HOME loan, or Housing Trust Fund (HTF) loan may be available as additional gap financing for eligible developments in the event the Authority determines the transaction will not adequately address unmet physical needs. No tenants are displaced because of these transactions.

H. Low-Income Housing Tax Credit (LIHTC) Section 32(16)(l) requires the Authority to report on the status of the Low-Income Housing Tax Credit (LIHTC) allocated under the Qualified Allocation Plan (QAP), including the amount of tax credits allocated, projects that have received tax credits, reasons why projects were denied tax credit, a geographical description of the distribution of tax credits, and a description of any amendments to the allocation plan made during the year. During FY 2020, the Authority allocated approximately $30.5 million in 9% tax credits to 32 developments helping create or preserve 1,959 rental units. (See EXHIBIT 7.) During the fiscal year, 44 projects were denied credit for various reasons. (See EXHIBIT 8.) The changes that were made had various levels of impact on the allocations made during FY 2020. (See EXHIBIT 9.)

I. Education and Training Opportunities Section 32(16)(m) requires the Authority to report on education and training opportunities provided by the Authority, including the types of education and training and the amount of funding committed to these activities. In FY 2020, the Authority provided technical assistance through a contract for capacity building and indirect technical assistance with Hager Consulting, LLC. This technical assistance was provided to guide Authority staff on federal regulations, such as HOME and Neighborhood Stabilization Program (NSP) issues. The total cost of the contract was $37,230, of which $7,643.50 was expended during the 2020 fiscal year.

J. Refinancings Sec. 32(16)(n) requires MSHDA to report that there were zero refinancings conducted during FY 2020.

K. Housing Choice Voucher Program The Housing Choice Voucher (HCV) Program utilizes the private rental market to assist Michigan’s extremely low-income families to afford decent, safe, and sanitary housing. Residents live in single family or multifamily rental dwellings, paying between 30% and 40% of their gross income for rent.

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In FY 2020, a total of 31,581 families participated in this program, which includes project-based, homeownership, non-elderly disabled, Mainstream, and veteran allocations. The average age for the head of household was 49, and 48.8% of the voucher holders were disabled, 6.4% were classified as veterans, and the average adjusted household income was $10,374. The racial breakdown by head of household is as follows: 1.8% are classified as American Indian/Alaska Native, 0.4% are classified as Asian, 54.7% are classified as Black/African American, 0.3% are classified as Native Hawaiian/Other Pacific Islander, and 42.8% are classified as White. Of the 31,581 participating households, 3.6% are classified within Hispanic or Latino ethnicity.

L. Housing and Community Development Fund Section 58b(6) requires the Authority to issue an annual report to the Legislature summarizing the expenditure of the fund for the prior fiscal year, including a description of the eligible applicants who received funding, the number of housing units that were produced, the income levels of the households that were served, the number of homeless persons served, and the number of downtown areas and adjacent neighborhoods that received financing.

Unfunded since FY 2008, the Housing and Community Development Fund (HCDF) received a supplemental appropriation of $3,709,500 from the proceeds of the National Mortgage Settlement (PA 296 of 2012). A competitive grant process was completed in 2013 to distribute the funds according to statutory criteria. Specifically, MSHDA had selected nine applicants to receive awards. As of FY 2018, seven of these grantees expended the grant funds, while two grantees’ awards were de-obligated. In FY 2019, almost half of the remaining funds were expended for the Ferguson Apartments project in Grand Rapids, MI ($239,000). In FY 2020, the remaining $239,800 in funds were expended for the Shiloh Commons Apartments project in Flint, MI.

M. Loans to Mortgage Lenders Section 44b(11) requires the authority to submit a report to the governor and the legislature on its progress in implementing loans to mortgage lenders pursuant to section 44b. There is no information to report for this requirement, as MSHDA does not make loans to mortgage lenders.

N. Sec. 44c Pass-Through Reporting Requirement Sec. 44c(13) requires owners of certain housing projects financed under the Pass-Through program to submit data to MSHDA. For FY 2020, there is no data to report.

O. Federal Housing Trust Fund An allocation from the federal Housing Trust Fund (the “Fund”) will facilitate MSHDA efforts to promote rental housing for extremely low-income renters. In FY 2020 the Fund closed $10.5 million in gap-funded transactions.

P. MSHDA MOD Upon examination of Michigan’s housing needs, it has been determined that there is a critical need in rural Michigan for new affordable housing within areas experiencing current job growth. In FY20 MSHDA implemented the MSHDA Mod program within 10 pilot communities. MSHDA worked with each pilot area community to identify sites, approve designs, and formulate a modular/building team. The pilot program’s intent is to use modular products in these critical need areas, thereby reducing the typical single-family construction timeframe and allowing this housing to be made available at an affordable price point (less than $200,000) and a reduced delivery time. At the end of FY20 the MSHDA Mod Program was permanently established. Pilot Program Grantee

http://nationalmortgagesettlement.com/

http://nationalmortgagesettlement.com/

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1. Barry County Foundation 2. City of Beaverton 3. Bethany Housing Ministries (Community encompass) 4. Big Rapids Housing Commission 5. City of Dowagiac 6. Habitat for Humanity NE Michigan 7. Kalamazoo Neighborhood Housing Services, Inc. 8. Marquette County Land Bank Authority 9. Northern Michigan Limited Dividend Housing Assoc, LLC 10. City of Coldwater

Q. Neighborhood Enhancement Program Grants In FY 2020, MSHDA awarded $2.1 million in Neighborhood Enhancement Program (NEP) grants, which help local communities to improve their neighborhoods. Fifty-five Michigan communities (listed in Exhibit 10) were chosen to receive this grant, which is intended to create high-impact activities directly tied to enhancing and stabilizing local areas. The grants originally required that the neighborhood enhancement projects align with one or more of the following three types of activities: beautification, neighborhood public amenity enhancements, and/or infrastructure enhancements. These grants were provided time extensions through September 2021 and/or the opportunity to repurpose/redirect allocated dollars to address COVID-19-related agency needs to encourage and enable the continuation of residential services by the grantee.

EXHIBITS

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Exhibit 1. FY 2020 Production and Goals

Program FY 2020 Goal FY 2020 Production FY 2021 Goal

$ Units $ Units $ Units

Multifamily Direct Loans

$264,361,556

3,256

$107,843,039

1,099

$308,206,146

3,855

Short-Term Pass-Through Loans $30,000,000 500 $0 0 $30,000,000 500

Single Family Loans $271,872,000 2,880 464,174,432 4,123 394,037,000 3,500

Michigan Credit Certificate Program $44,928,000 396 35,006,742 268 36,830,070 270

Property Improvement Program (PIP) 394,152 33 235,055 18 276,760 20

TOTAL $611,555,708

7,065 $607,259,268

5,508 $769,349,976

8,145

Totals may not add due to rounding.

13

Exhibit 2. FY 2020 Single Family Loans

New Homes Existing Homes

# Loans 24 4,099

$ Volume 3,161,208 461,014,530

Average Loan 131,717 112,470

Average Home Sale Price 135,165 116,277

Average Income of Borrower 54,704 53,335

Average Age of Borrower 33 33

Average Family Size 2 2

% Minority Buyers 17 25

% Female Headed Household 54% 51%

% Below 55% of Median Income

21% 26.5%

NOTES: The Average Family Size reflects the average for both new and existing loans. Only loans for which demographic data was reported are reflected in this exhibit.

14

Exhibit 3. FY 2020 Michigan Mortgage Credit Certificates

New Homes Existing Homes

# Loans 5 263

$ Volume 801,805 35,756,165

Average Loan 160,361 135,955

Average Home Sale Price 166,704 141,906

Average Income of Borrower 60,413 49,394

Average Age of Borrower 37 32

Average Family Size 4 2

% Minority Buyers 0 13.7

% Female Headed Household 20% 36.5%

% Below 55% of Median Income 0% 36.5%

# Loans 5 263

NOTE: Only loans for which demographic data was reported are reflected in this exhibit.

15

Exhibit 4. FY 2020 Property Improvement Loans # Loans 18

$ Volume 235,055

Average Loan Amount 13,838

Average Income of Borrower 45,313

Average Interest Rate 4%

Average Age of Borrower 57

Average Family Size 1

% Female Borrowers 70%

% Borrowers Over Age 55 10%

% Minority Borrowers 33%

% Homes 40+ Years Old 100%

NOTE: Only loans for which demographic data was reported are reflected in this exhibit.

16

Exhibit 5. FY 2020 Estimated Construction Jobs, Wages, Taxes

Program/Project Estimated Jobs Estimated Wages Estimated Taxes

The Creamery 163 $5,087,829 $1,583,587

Apartments at 28 West 474 $14,814,382 $4,610,976

University Meadows 60 $1,886,467 $617,346

Colonial Meadows 74 $2,322,875 $760,161

Eastern Elementary Apartments 139 $3,246,977 $1,062,573

Lyon Township Senior Living 437 $10,244,562 $3,352,533

Shiloh Commons 114 $3,559,210 $1,164,751

Ferguson Apartments 27 $1,114,463 $346,877

Marsh Ridge Apartments (Phase 3) 109 $4,558,057 $1,418,695

Multifamily Loan Subtotal 1597 $46,834,822 $14,917,500

**Single Family Loans 51 $1,580,604 $491,963

**Mortgage Credit Certificates 13 $400,903 $124,781

Property Improvement Loans 2 $58,764 $22,580

TOTAL 1663 $48,875,093 $15,556,824

**Only loans for newly constructed homes are included. Please note that totals may not add due to rounding.

17

Exhibit 6. FY 2020 Grants to Nonprofit Organizations & Local Governments

GRANTS TO PREVENT HOMELESSNESS (Total=$11,476,239)

Emergency Solutions Grants

Grantee Name City County Grant

Amount

Alger-Marquette Community Action Board Marquette Marquette $477,044

Allegan Co. Community Mental Health Services Allegan Allegan $107,198

Allegan Co. Community Mental Health Services Allegan Allegan $25,747

Alliance for Housing Oakland County CoC Waterford Oakland $271,303

Alliance for Housing Oakland County CoC Waterford Oakland $245,250

Barry County United Way Hastings Barry $39,395

Battle Creek Community Foundation Battle Creek Calhoun $166,508

Bethany Housing Ministries, Inc. Muskegon Muskegon $287,803

Bethany Housing Ministries, Inc. Muskegon Muskegon $6,500

Blue Water Center for Independent Living, Inc. Port Huron St. Clair $255,485

Blue Water Community Action Agency Port Huron St. Clair $198,691

Capital Area Community Services, Incorporated Lansing Ingham $90,988

Chippewa-Luce-Mackinac Community Action Human Resource Authority

Sault Ste. Marie Chippewa $101,583

City of Lansing Lansing Ingham $474,590

Community Action Agency Jackson Jackson $90,682

Community Action Agency Jackson Jackson $252,038

Department of Health and Human Services Lansing Ingham $700,000

EightCap Greenville Montcalm $161,279

EightCap Greenville Montcalm $150,517

Emergency Shelter Services, Inc. Benton Harbor Berrien $247,839

Gogebic-Ontonagon Community Action Agency Bessemer Gogebic $45,255

Heart of West Michigan United Way Grand Rapids Kent $50,000

Heart of West Michigan United Way Grand Rapids Kent $238,955

Homeless Action Network of Detroit Detroit Wayne $207,914

Housing Resources, Inc., of Kalamazoo County Kalamazoo Kalamazoo $487,786

Housing Services Mid Michigan Charlotte Eaton $75,004

Housing Services Mid Michigan Charlotte Eaton $155,218

KeyStone Place, Inc. Centreville St. Joseph $192,048

Lenawee Emergency & Affordable Housing Corporation Adrian Lenawee $131,846

Macomb Homeless Coalition Fraser Macomb $463,783

Mid Michigan Community Action Agency, Inc. Farwell Clare $101,765

Mid Michigan Community Action Agency, Inc. Farwell Clare $287,949

Midland Area Homes, Inc. Midland Midland $60,307

Monroe County Opportunity Program Monroe Monroe $177,467

Northeast Michigan Community Service Agency Alpena Alpena $325,629

Northwest Michigan Community Action Agency, Inc. Traverse City Grand Traverse $434,010

Oakland Livingston Human Service Agency Howell Oakland $110,801

18

Ottawa County Holland Ottawa $258,429

Ottawa County Holland Ottawa $4,250

Pines Behavioral Health Coldwater Branch $95,856

Shelter of Flint, Inc. Flint Genesee $228,564

Shelter of Flint, Inc. Flint Genesee $50,000

Southwest MI Community Action Agency Benton Harbor Berrien $96,984

TrueNorth Community Services Freemont Newaygo $286,889

United Way of Saginaw County Saginaw Saginaw $179,246

Washtenaw County Ann Arbor Washtenaw $451,625

Wayne-Metro Community Action Agency Wyandotte Wayne $195,225

Wayne-Metro Community Action Agency Wyandotte Wayne $247,602

TOTAL ESG GRANTS 48 $10,015,100

Statewide Partnership (SP) and Homeless Assistance (HA) Special Grants

Grantee Name City County Grant

Amount

Corporation for Supportive Housing Detroit Wayne $108,500

Department of Health and Human Services Lansing Ingham $150,000

Michigan Coalition Against Homelessness Lansing Ingham $100,000

TOTAL SP AND HA GRANTS $358,500

Homeless Management Information System (HMIS)

Grantee Name City County Grant Amount

Michigan Coalition Against Homelessness $163,175

Michigan Coalition Against Homelessness $802,700

Michigan Department of Health and Human Services $136,764

TOTAL HMIS GRANTS $1,102,639

19

Exhibit 7. FY 2020 Low-Income Housing Tax Credits Allocated

Project Name Location Type Units Credit

Anchor At Mariners Inn, The Detroit New Construction 44 $1,300,000

Belknap Place Grand Rapids New Construction 50 $906,067

Benjamin O. Davis Veterans Village

Detroit New Construction 50 $1,178,471

Bingham Apartments Alpena New Construction 35 $702,257

Brush Detroit New Construction 64 $1,500,000

Century Terrace and Harborview Apartments

Manistee Acquisition/Rehab 167 $1,474,000

Clark Commons II Flint New Construction 48 $1,499,798

Clinton Place Mt. Clemens Acquisition/Rehab 283 $1,500,000

Eastern Lofts Grand Rapids New Construction 70 $1,290,800

Edison Crossing Mt. Clemens New Construction 30 $809,680

Friendship Meadows Apartments II

Detroit Acquisition/Rehab 53 $476,964

Georgia Manor Flint Acquisition/Rehab 26 $339,234

Grand On University, The Flint New Construction 48 $1,316,433

Hilltop View Apartments Dexter New Construction 24 $874,756

Jacklyn Apartments Belding Acquisition/Rehab 72 $521,168

La Joya Gardens Detroit New Construction 25 $811,553

Left Field Detroit New Construction 60 $1,207,610

Madison Lofts Grand Rapids Adaptive Reuse 22 $535,000

Meadow Ridge Apartments Marlette Acquisition/Rehab 24 $155,391

Midtown Square Apartments Detroit Acquisition/Rehab 73 $1,229,873

Reverend Dr. Jim Holley Residences

Detroit New Construction 30 $1,031,459

Riverview Terrace Apartments Traverse City Acquisition/Rehab 57 $677,281

Ruth Park Traverse City New Construction 58 $1,214,653

Samaritas Affordable Living Muskegon

Muskegon New Construction 53 $1,020,000

Scottish Pines Apartments Alma Acquisition/Rehab 24 $156,773

Shelby Trails Shelby New Construction 15 $450,815

South Washington Park Lansing Acquisition/Rehab 187 $1,500,000

TEN21 Apartments Muskegon New Construction 73 $1,500,000

Unity Park Rentals V Pontiac New Construction 12 $411,894

Waterview Apartments - Phase I

Gladstone Acquisition/Rehab 52 $535,227

Wellspring Farmington Hills New Construction 81 $1,317,516

Woodward Way East Lansing New Construction 49 $985,220

Total: 32 1959 $30,429,893

20

Exhibit 8. FY 2020 Low-Income Housing Tax Credits Denied

Project City Reason

530 Rose Kalamazoo Low Score

Adams Park Apartments Grand Rapids Low Score

Bramblewood Apartments New Haven Low Score

Broderick Manor Detroit Low Score

Bronson Sr & Meadow View Sr Apts Bronson/Coldwater Low Score

Cadillac Castle Cadillac Low Score

Cheboygan One Apartments Cheboygan Low Score

Cherry Hill Apartments Lansing Did Not Meet Threshold/Low Score

Coldwater Senior Villas Coldwater Low Score

Edge Flats On Michigan, The Jackson Low Score

Forest Grove I Ferndale Low Score

Garfield Landing Sault Ste. Marie Low Score

Garfield Lofts Adrian Low Score

Glenwood Senior Apartments Pontiac Low Score

Grand Monroe Grand Rapids Did Not Meet Threshold

GTB LIHTC #1 Traverse City Low Score

Hawthorne Park Kalamazoo Low Score

Hive On Russell, The Detroit Did Not Meet Threshold/Low Score

Hope Community Grand Rapids Low Score

Kendall Place Hastings Low Score

Lee Plaza Detriot Low Score

Madison Manor Madison Heights Low Score

Malcolm Lofts Sault Ste. Marie Low Score

Mary Crapo Senior Apartments Swartz Creek Low Score

Meyers Senior Apartments Detroit Low Score

Mid Detroit Did Not Meet Threshold/Low Score

Monroe Lofts Sturgis Did Not Meet Threshold

MoTown Square Affordable Assisted Living

Grand Rapids Low Score

New Center Village (Chatham) Detroit Did Not Meet Threshold/Low Score

Parkview Apartments Traverse City Low Score

Perry Acres Apartments New Haven Low Score

Pinehurst Apartments Farwell Low Score

Riverbank Place Apartments White Cloud Did Not Meet Threshold

Roselawn Apartments Highland Park Low Score

Royal Coach Apartments Hastings Did Not Meet Threshold/Low Score

St. Joseph Street Lofts Sturgis Low Score

Trailside Place Hillsdale Did Not Meet Threshold/Low Score

21

Exhibit 9. FY 2020 Changes to the Qualified Allocation Plan (QAP) There were changes no made to MSHDA’s QAP during FY 2020. The most recent changes were approved at the very beginning of FY 2019 and all of the allocations made during FY 2020 were impacted by these changes. A link to the 2019-2020 QAP, which incorporates the changes, is below: http://www.michigan.gov/mshda/0,4641,7-141-5587_5601-31750--,00.html Exhibit 10. FY 2020 NEP Awarded Communities: Allen Neighborhood, Ingham $56,500 Allen Neighborhood Center (ANC) will use the grant funds for exterior façade improvements including porch, step repair, porch painting, landscaping, driveway repair, window or door replacement, etc., to 17 homeowner-occupied single-family houses. Grant funds will also benefit a community area that hosts a weekly farmers market and serves as a gathering space for neighbors. A large mural will be installed on the outside east wall of the (ANC) building. Funds will also be used to install permanent signage in our one-acre garden that encourages visitors and neighbors to help themselves and provides nutritional information about available foods. Bridging Communities, Wayne $50,000 Funding will be used to enhance nine owner-occupied single-family homes in southwest Detroit. These funds will be used to repair properties that have deteriorated over time and now pose risks to their residents and/or neighbors. Funds will be targeted to high-impact and high-visibility repairs such as fixing crumbling porches and stairs, adding railings, repairing or replacing windows, and painting or siding exteriors. Buena Vista Twp., Saginaw $30,000 Funds will be utilized for housing enhancements for owner-occupied single-family homes located in the Bellevue Subdivision between Bewick Avenue and Baldwin Avenue (across from Brunkow school). Neighborhood enhancements will include weatherization services (installing new windows and doors); exterior improvements (siding and painting), and handicap accessibility improvements. Housing Enhancements to owner-occupied single-family homes Capital Area Housing Partnership, Ingham $50,000

Union Suites At Michael II Wyoming Low Score

University Meadows II Detroit Did Not Meet Threshold/Not Enough Credit

Victories Square LIHTC Building 4 Petoskey Low Score

Waterview Apartments - Phase II Gladstone Low Score

Wilson Center Residences St. Johns Low Score

Woodridge Apartments Southfield Low Score

Total: 43 Developments

http://www.michigan.gov/mshda/0,4641,7-141-5587_5601-31750--,00.html

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Funding will be used for housing enhancements in a portion of the Northtown neighborhood, primarily focusing on North High Street from Drury Lane North to Whyte Street. This area contains 37 homes, most of which were constructed before 1930. Central Detroit Christian CDC, Wayne $50,000 Funding will be used to enable beautification and repairs such as roof, windows, or new wood front porch or fencing for homes in the Rosa Parks/Clairmount community. Chapel Hill United Methodist Church (Battle Creek), Calhoun $50,000 Funding will provide porch repair or construction of new porches for six to eight families of owner-occupied single-family homes in the Trinity neighborhood. Other exterior repairs will be considered such as driveways, sidewalks from the public sidewalk to front entrance, or from the driveway to front entrance, ramps, or other improvements that promote accessibility and improve curb appeal. City of Beaverton, Gladwin $40,000 Funds will be used to support the revitalization of two neighborhoods: Beaverton’s North Ross Lake neighborhood and the Beaverton Central neighborhood. Grant funds will be used for exterior improvements of four homes along Lang Road --all within a thousand feet of MSHDA’s new modular home. City of Bronson, Branch $20,000 Grant funds will be used for housing enhancements to single-family owner-occupied households for all properties on Washington Street and Winona Street. Preserving and improving the housing stock is a major goal of the City and these funds will help address owner-occupied homes with blight. The City will offer these funds for the following home improvements: exterior painting, new siding, walkways (on private property), roofs, windows (if done along with one other exterior improvement component), and front porches. City of Coldwater, Branch $40,000 The grant funds will provide exterior housing enhancements to 10 local homes with services including painting, repairing or replacing siding, roofs, soffits, gutters, doors, windows, and front porches. City of Corunna, Shiawassee $30,000 Funding housing enhancements of up to six homes that are in need of a fresh coat of paint, new windows, roof, or help with other repairs. City of Dowagiac, Cass $55,000 Funding will be utilized within Dowagiac’s northern neighborhoods where six homes will receive up to $5,000 each in home improvements. The City will be utilizing $10,000 in matching dollars for the Neighborhood Enhancement Program Round 5 grant. City of Eaton Rapids. Eaton $30,000

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The City of Eaton Rapids will use the grant funds for exterior enhancements including siding and structural improvements for six homes. City of Ecorse, Wayne $15,000 The award will support the repair of porches on five to six homes. City of Grand Haven Neighborhood Housing Services $55,000 Funding will be used for exterior housing enhancements at seven single-family residential properties within the City of Grand Haven’s defined boundaries. Improvements will include the repair or replacement of roofs, windows, exterior doors, siding, gutters, soffits and fascia, underground property sewer, or water lines. Energy conservation interior improvements can be allowed as a preapproved exception. City of Hancock, Houghton $30,000 Funds will be used for housing enhancements that will provide improved energy efficiency through replacement of windows and doors as well as upgrades to the aesthetics of the homes through painting. City of Hillsdale, Hillsdale $30,000 Grant funds will be used for exterior rehabilitation and repair to single-family owner-occupied homes. These enhancements will cover accessibility improvements to driveways, porches, stairs, railings, windows, exterior siding, windows, doors, etc. City of Ironwood, Gogebic $30,000 Funding will be used to rehabilitate the facades of two to four single-family homes in the Douglas neighborhood. City of Lapeer, Lapeer $54,998 Funding will be used to support roof replacements in the Turrill/Elm East neighborhood and adjacent Turrill/Elm West neighborhood. City of Negaunee, Marquette $35,000 Funding will be utilized for exterior improvements of seven single-family homes in the City of Negaunee. Priority will be given to projects that result in the most dramatic enhancement (e.g., painting, windows, shutters, awnings, and front door paint and/or repair). Accessibility improvements related to the front of the home such as walkway repair, no-step entrances, and widening of doorways will also be considered. City of Madison Heights, Oakland $25,000 Funding will assist homeowners with property maintenance focusing on low-income residents with top priority given to seniors and disabled residents. This funding will help keep low-income homeowners in their homes and allow the seniors in the area to age in place.

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City of Montrose, Genesee $30,000 Funds will be used to assist up to 18 low- and moderate-income homeowners with exterior enhancements. City of Mt. Pleasant, Isabella $30,000 Grant funds will support home enhancements including exterior painting, new siding, walkways (on private property), roofs, windows, and doors (if combined with other exterior improvements), gutters, and front porches. City of Reed City, Osceola $30,000 The funds will be used for homeowner rehabilitation projects, focusing primarily on new roofs, siding, and paint. City of Stanton, Montcalm $30,000 Funding will be used for housing and neighborhood public amenity enhancements in Stanton providing mini grants to 20 owner-occupied single-family homes for exterior improvements such as, window upgrades, painting, porch repairs, doors, and railings. City of Three Rivers, St. Joseph $30,000 The City of Three Rivers will use the grant funds for exterior housing enhancements, site clearance and rubbish removal, and additional city neighborhood maintenance initiatives. City of Vassar, Tuscola $30,000 Funding will be used for exterior housing enhancements to 10 homes across the Cass Avenue, President Street and Prospect N, and East/Sheridan/Butler Neighborhoods in Vassar. The enhancements will include fixing stair railings, adding and repairing sidewalks leading to the home, repairing and painting porches, and adding some curb appeal (landscaping) to the front and side of the homes. Cody Rouge, Wayne $50,000 Grants will be applied to the exterior restoration of 15 homes with repairs including porches, front steps, handrails, facades, gutters, and roofs. Funds will also be available for mobility enhancement, such as exterior wheelchair ramps or lifts, for elderly residents. Court Street Village (Flint), Genesee $50,000 Funding will be used to replace two roofs in Fairfield Village and to install a monument sign in Central Park. Develop Detroit, Wayne $50,000 The funding will be utilized in the North End neighborhood between East Grand Boulevard and Woodland Street to assist up to 15 homes with exterior improvements.

25

Genesis HOPE, Wayne $25,000 The funds will be used for exterior enhancements to 10 homes within the Islandview/Greater Villages neighborhood on the lower eastside of the City of Detroit. Improvements will include the repair or replacement of windows, doors, porches, stairs, railings, roofs, gutters, soffits, or fascia and/or accessibility modifications. Gogebic Ontonagon CAA, Gogebic $55,000 The grant funds will be utilized to provide exterior improvements like new roofing, siding, and windows, for up to two houses between Mcleod Street and Ayer Street in the City of Ironwood’s Curry Neighborhood Trail. Jefferson East, Wayne $50,000 Funding will be used to repair or improve at least 10 owner-occupied homes. This includes up to five roofs and up to five emergency repairs such as post flood waterproofing (basement walls) and exterior repairs. Joy Southfield CDC, Wayne $24,750 Joy Southfield Community Development Corporation will use grant funds to support its “Healthy Homes Rx” services. The organization will address unhealthy housing conditions such as lead paint and asthma triggers, along with safety hazards by making critical repairs and improvements (drywall, plumbing, etc.) and accessibility upgrades to porches. Kalamazoo Neighborhood Housing Services, Kalamazoo $40,000 Kalamazoo Neighborhood Housing Services, Inc. (KNHS) will use the funds to replace the roofs on five homes in the Edison neighborhood. LifeBUILDERS, Wayne $75,000 Funding will provide needed exterior home repairs, including roofing, porches, concrete, etc., All work on the project will be performed in the Regent Park neighborhood located in northeast corner of the City of Detroit. MDS CAA Escanaba, Delta $30,000 The Menominee-Delta-Schoolcraft Community Action Agency and Human Resources Authority, Inc. (MDS-CAA/HRA) will use grant funds to rehabilitate the homes of low to moderate income families in the City of Escanaba. They will focus on housing repairs and improvements, including but not limited to, siding, roofing, Americans with Disability Act (ADA) ramps, energy related retrofits, and interior repairs as needed due to damages from leaking roofing, etc. MDS CAA Manistique, Schoolcraft $30,000 The Menominee-Delta-Schoolcraft Community Action Agency and Human Resources Authority, Inc. (MDS-CAA/HRA) will use grant funds to rehabilitate the homes of low to moderate income families in the City of Manistique. MDS-CAA/HRA will partner with their weatherization program and the USDA Rural Development to leverage funds enabling greater assistance to families in need. They will focus

26

on housing repairs and improvements, including but not limited to siding, roofing, Americans with Disability Act (ADA) ramps, energy-related retrofits, and interior repairs as needed due to damages from leaking roofing, etc. MDS CAA Menominee, Menominee $30,000 The Menominee-Delta-Schoolcraft Community Action Agency and Human Resources Authority, Inc. (MDS-CAA/HRA) will use grant funds to rehabilitate the homes of low- to moderate-income families in the City of Menominee. They will focus on housing repairs and improvements, including but not limited to, siding, roofing, Americans with Disabilities Act (ADA) ramps, energy-related retrofits, and interior repairs as needed due to damages from leaking roofing, etc. Metro Community Development, Genesee $50,000 The funds will be used to support interior and exterior improvements to at least seven homes in the Metawanee Hills community. Metro Community Development owns 24 rental units of well-maintained single family and duplex homes in this neighborhood and are committed to stabilizing and revitalizing the area. Monroe County Opportunity Program/ The Opportunity Center, Monroe $30,000 Funds will be used to support two components in Monroe: Cultivate Community collaborative housing enhancement project and two community garden projects in the Orchard East neighborhood. Cultivate Community is a collaborative project bringing together local unions, community and faith-based groups, and residents who will establish teams to help low-income neighbors rehabilitate their homes. The improvements will include exterior repair to porches, driveways, stairs, railings, windows, and doors. The two community gardening projects in the Orchard East neighborhood are the Selma Rankins Garden and The Opportunity Center Youth Garden. These gardens are within one block from each other and provide youth and local residents an opportunity to grow their own food and help their neighbors in need. These funds will be used to provide additional raised garden beds and other unique features that will promote and provide greater accessibility for gardeners. NCCS White Cloud, Newaygo $30,000 Grant funds will be used to conduct rehabilitation and enhancements to four homes within the City of White Cloud. The program will make exterior enhancements to single family, owner-occupied homes with the intent of enhancing the neighborhood by improving the appearance and preventing the deterioration of homes. Neighborhoods Inc. of Battle Creek Inc., Calhoun $50,000 Neighborhoods Inc. of Battle Creek (NIBC) will use funds for housing enhancements in Battle Creek’s Washington Heights neighborhood and lighting installation in Claude Evans Park. New Development Corporation Grand Rapids, Kent $50,000 A portion of the funding will support home enhancements within a selected neighborhood. Exterior only and exterior-predominant repairs will be prioritized. The remaining funds will be used to renovate a highly visible, blighted walkway into an inviting and functional public space. Otsego County Housing Committee, City of Gaylord, Otsego $30,000

27

Funds will be used for housing and neighborhood public amenity enhancements in Gaylord. The housing enhancement component will provide a vibrant impact to a single-family residential neighborhood. Enhancements include new siding, roofs, porches, windows, furnace, and water heater to three homes within the neighborhood. The neighborhood public amenity enhancement will provide a welcoming kiosk sign during the building of the Iron Belle Trailhead pavilion project in the year 2020 to downtown Gaylord on the east side of the railroad tracks at M-32 Main Street. Rebuilding Together Southeast Michigan, Wayne $15,000 Funds will assist up to five low to moderate-income homeowners with exterior and interior enhancements in the Maple Ridge neighborhood in Detroit. The enhancements and repairs will be based on need and some examples are gutter and fascia replacement, porch structure and masonry foundation repair, front step repair or replacement, handrail installation, chimney tuck pointing, roof patching or repair, exterior siding replacement, window replacement, door replacement, hot water heater replacement, home fire safety kit, and furnace repair. Saginaw County CAC, Buena Vista $30,000 Saginaw County Community Action Committee (SCCAC) will use the funds to provide interior and exterior enhancements to 15 owner-occupied single-family homes in Buena Vista Charter Township of Saginaw County. A team of volunteers, staff, and licensed contractors will complete exterior work including painting, porch repair, step replacement, and more. Southwestern Urban League, Calhoun $50,000 Funds will be used for exterior housing enhancements and landscaping in Battle Creek. The proposed project builds on the investments made in the neighborhood to the north by strengthening housing and amenities on its southern border, namely, the area along the river and the corridor into downtown. Sinai-Grace Guild CDC, Wayne $50,000 Funds will be used for exterior housing enhancements to owner-occupied single-family homes in Detroit’s Northwest neighborhoods of Winship, College Park, Crary/St. Mary’s, Hubbell-Puritan, Belmont, Harmony Village, and Schulze. Funds will be used to make repairs that will improve resident safety and quality of life, including fixing broken porches and stairs, adding or fixing railings, repairing or replacing windows, replacing doors and/or making them more accessible, and painting home exteriors. Venture, Pontiac $45,000 Award will be used to do exterior home repairs of four owner-occupied homes of low- and moderate-income homeowners, such as paint the exteriors and repair or replace the porches. The repairs will be a part of Venture Inc.’s “Paint & Porch Program” (PPP). Village of Bancroft, Shiawassee $10,000 Grant funds will be used for a range of improvements to Lion’s Park in Bancroft including installation of safe playground equipment, lighting, new grills and repair of the park pavilion and picnic tables. Village of Cassopolis, Cass $45,000

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Funding will support approximately 11 homeowner enhancements. The work will include roofs, porches, siding, railings, driveways, windows, steps, paint, doors, light fixtures, and house numbers. The target area is the downtown district which includes an approximate six block radius including gateways in and out of the Village. Village of Colon, St. Joseph $20,000 The Neighborhood Enhancement Program (NEP) funding will be utilized to assist up to eight homes which are yet to be defined. The NEP funding will provide exterior housing enhancements including energy efficiency and mobility improvements. Village of Mancelona, Antrim $45,000 The Neighborhood Enhancement Program funding will be utilized within two main portions of the village, the east and west of US-131 and the historic downtown. The grant funds will be used to assist up to 15 homes which are yet to be defined and will provide exterior housing enhancements. Wayne County Land Bank, Highland Park $42,500 The Wayne County Land Bank Corporation (WCLBC) will use funds for their “Porch-Plus” housing rehabilitation project. They will provide exterior housing enhancements and rehabilitate porches for qualified homeowners in the Northpointe area of Highland Park, MI. Wayne Metropolitan Community Action Agency, Highland Park $75,000 Funds will provide 10 residents with exterior housing enhancements in the Cortland neighborhood of Highland Park, MI. The beautification package would include items such as front exterior rehabilitation and repair or accessibility improvements to driveways, porches, stairs, railings, windows, doors, roofs, and exterior painting or siding. 3Sixty, City of Holland, Ottawa $22,000 3sixty will use the grant funds for public amenities and housing enhancements. The Neighborhood Enhancement Program (NEP) funding will be utilized within the Eastcore neighborhood and Alleyway. 3sixty will be leveraging an estimated total of $5,000 to $8,000 from the City of Holland for the housing enhancements. The grant funds will be used to assist up to five homes which are yet to be defined. The NEP funding will provide exterior housing enhancements including roofing, siding, porches, driveways, windows, and doors. The public amenities include construction of raised garden beds, trellises, gutter systems for rain barrels, iron hanging baskets attached to utility poles, landscaping materials, trees and plants, a community library box, compost bins, and benches that benefit the entire neighborhood.

Dev # Development Name Location # Units Family/Elderly Date of Request Approval Date Total Deferred Terms of Relief1071 Deer Creek Sturgis 40 Family 3/27/2020 4/9/2020 10,908 3 Month Principle Deferral899 Baldwin House Birmingham 131 Elderly 4/9/2020 4/13/2020 116,103 3 Month Principle Deferral

1016 American House North Flint 126 Elderly 4/9/2020 4/13/2020 139,272 6 Month Principle and Escrow Deferral1043 Belleview Place I Ionia 48 Family 4/20/2020 5/1/2020 24,468 6 Month Principle Deferral3003 Belleview Place II Ionia 48 Family 4/20/2020 5/1/2020 27,564 6 Month Principle Deferral923 Manchester Place I Detroit 144 Family 4/27/2020 5/11/2020 70,110 3 Month Principle Deferral973 Manchester Place II Detroit 56 Family 4/27/2020 5/11/2020 17,127 3 Month Principle Deferral

1410 Carriage Town Square Flint 30 Family 5/18/2020 5/20/2020 24,241 6 Month Principle and RR Deferral906 Vista Villa Saginaw 100 Family 8/27/2020 9/17/2020 89,844 6 Month Principle Deferral

1084 Green Park Townhomes Mason 32 Family 9/3/2020 9/17/2020 23,352 6 Month Principle Deferral

542,989

ApprovalsShort Term Mortgage Relief

February 25, 2021

CUMULATIVE MONEY SPENT2010-CURRENT

$305,608,417.73

$380,874,733.14

$28,785,976.35

HARDEST HIT PROGRAMS

# OF HOUSEHOLDS THIS MONTH

# OF CUMULATIVE HOUSEHOLDS2010-CURRENT

MONEY SPENTTHIS MONTH

Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA)Step Forward Michigan

PO Box 30632 ● Lansing, MI 48909-8132Phone (866) 946-7432 ● Fax (517) 636-6170

www.stepforwardmichigan.org

MORTGAGE & TAX ASSISTANCE 14 39,118 $146,912.41

Step Forward DPA 1 1,953 $15,000.00

BLIGHT ELIMINATION 1 23,186 $15,115.55

JANUARY 2021

MSHDA’s Homeownership Division delivers responsive homeownership products, education and technical assistance that empower our customers and strengthen and sustain Michigan communities. We work with our partners to provide creative solutions that maximize existing resources and preserve homeownership opportunities for future generations.

SINGLE FAMILY MORTGAGES

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10

20

30

40

50

60

Jan-

16Fe

b-16

Mar

-16

Apr-

16M

ay-1

6Ju

n-16

Jul-1

6Au

g-16

Sep-

16O

ct-1

6N

ov-1

6De

c-16

Jan-

17Fe

b-17

Mar

-17

Apr-

17M

ay-1

7Ju

n-17

Jul-1

7Au

g-17

Sep-

17O

ct-1

7N

ov-1

7De

c-17

Jan-

18Fe

b-18

Mar

-18

Apr-

18M

ay-1

8Ju

n-18

Jul-1

8Au

g-18

Sep-

18O

ct-1

8N

ov-1

8De

c-18

Jan-

19Fe

b-19

Mar

-19

Apr-

19M

ay-1

9Ju

n-19

Jul-1

9Au

g-19

Sep-

19O

ct-1

9N

ov-1

9De

c-19

Jan-

20Fe

b-20

Mar

-20

Apr-

20M

ay-2

0Ju

n-20

Jul-2

0Au

g-20

Sep-

20O

ct-2

0N

ov-2

0De

c-20

Jan-

21Fe

b-21

Mill

ions

JANUARY 2021

GOAL PURCHASED

Print on Legal-Size paper

Series/Date Month #

PURCHASED Prior Total

PURCHASED NEW Total

1st + DPATO DATE

NEWEST ALLOCATED

058 Jan-21 0 -$ 0 $0.00 4 $390,163.00 0 $0.00 0 $0.00 8 $756,315.00 -1 -$140,409.00 3 $249,754.00 8 $756,315.00 8 $49,940.00 058 209,146,625.00$ 209,902,940.00$ 214,152,427.00$ 215,000,000.00$

11/1/2019 Dec-20 0 - 0 $0.00 5 $458,895.00 0 $0.00 0 $0.00 0 $0.00 -1 -$68,732.00 4 $390,163.00 0 $0.00 0 $0.00 158 4,199,547.00$ 4,249,487.00$ remaining: 847,573.00$

059 Jan-21 215 25,165,596.00$ 195 $23,403,823.00 534 $64,008,001.00 153 $18,527,662.00 -3 -$371,294.00 1 $140,409.00 -8 -$756,315.00 428 $51,062,358.00 249 $30,486,105.00 247 $1,691,946.00 059 151,291,426.00$ 181,777,531.00$ 191,322,837.00$ 239,657,820.00$

5/1/2020 Dec-20 231 27,878,739.00 300 $35,519,279.00 577 $69,876,791.00 248 $29,087,501.00 -4 -$412,801.00 1 $68,732.00 0 $0.00 534 $64,008,001.00 288 $34,612,222.00 285 $1,918,135.00 159 7,853,360.00$ 9,545,306.00$ remaining: 48,334,983.00$

TOTAL Jan-21 215 $25,165,596.00 195 $23,403,823.00 538 $64,398,164.00 153 $18,527,662.00 -3 -$371,294.00 9 $896,724.00 -9 -$896,724.00 431 $51,312,112.00 257 $31,242,420.00 255 $1,741,886.00

#255Series/Date Month

9/16/2019-R2 Jan-21 0 -$ 0 -$ 0 -$ 2 30,000.00$ 0 -$ 0 -$ 1 15,000.00$ 462 6,877,950.78$ Previous Total

9/24/2018 Dec-20 0 -$ 0 -$ 0 -$ 3 45,000.00$ 0 -$ 0 -$ 0 -$ 463 6,892,950.78$ Round 2 Total

1491 22,192,427.77$ Round 1 Total1954 29,085,378.55$ GRAND Total

MI HOME FLEX Loan Program (MBS)

Series/Date Month

900 Jan-21 22 2,587,825.00$ 13 $1,529,619.00 57 $6,547,472.00 10 $1,204,125.00 -5 -$503,198.00 0 $0.00 43 $5,299,560.00 19 $1,948,839.00 19 $119,690.00

11/14/2013 Dec-20 13 1,589,961.00$ 23 $2,548,082.00 45 $5,156,143.00 17 $1,916,832.00 0 $0.00 0 $4,910.00 57 $6,547,472.00 5 $530,413.00 5 $34,334.00

MCC PIP Loans Applications Commitments Purchased 212 MCC Jan-21 12 1,835,172.00$ 12 1,789,955.00$ 12 1,735,420.00$ 16 2,472,599.00$ January-21 0 -$ 0 -$ 0 -$

9/18/2019 Dec-20 17 2,694,337.00$ 16 2,392,781.00$ 14 2,170,076.00$ 12 1,604,679.00$ December-20 0 -$ 0 -$ 2 32,945.00$

RESERVATIONS Cancel/Rejects APPLICATIONS RECEIVEDTotal In Process

COMMITMENTS BEGINNING

Transfers INor AdjustmentRESERVATIONS COMMITMENTS ISSUED

APPLICATIONS RECEIVED

RESERVATIONS APPS RECEIVED COMMITMENTS CERTIFICATES

APPLICATIONS RECEIVED

COMMITMENTS BEGINNING COMMITMENTS ISSUEDRESERVATIONS

Monthly Homeownership Production Report: JANUARY 2021

COMMITMENT Cancellations Reinstatements Net

COMMITMENT & PURCHASE IN/DEcrease Net

COMMITMENTS ENDING PURCHASED #1 PURCHASED-DPA

PURCHASED-DPAPURCHASED #1Cancellations Reinstatements Net

Transfers OUT or Adjustment

COMMITMENTS ENDING

MI HOME Loan Programs

STEP FORWARD DPA Program

COMMITMENTS ISSUED PURCHASED-DPA FUNDEDDeleted

2021 Board Calendar

January February Voting Items Voting Items 1 1 2 2 3 3

Discussion Items Discussion Items FY 2021-2022 PHA Plan Quarterly Financials MSHDA Loan Refinancing Program

March April Voting Items Voting Items 1 FY 2021-2022 PHA Plan 1 Resale Policy 2 2 3 3 Discussion Items Discussion Items 1 Resale Policy 1 Quarterly Financials 2 2 Single Family Bond Deal 3 3 4 5

May June Voting Items Voting Items 1 Single Family Bond Deal 1 2021-22 Budget 2 2 3 3 Discussion Items Discussion Items 1 2021-22 Budget 1 Quarterly Financials 2 2 Pass-Through Program

3 3

4 4

July August Voting Items Voting Items 1 Pass-Through Program 1

2 2 3 3 Discussion Items Discussion Items 1 1 Multifamily Bond Deal 2 2

3 3

4 4

September October Voting Items Voting Items 1 Multifamily Bond Deal 1 Single Family Bond Deal

2 W 2 2022 QAP

3 3

Discussion Items Discussion Items 1 Single Family Bond Deal 1 Approval of Board Meeting

Schedule for 2022 2 2022 QAP 2

3 3 4 4

November December Voting Items Voting Items 1 Approval of Board Meeting

Schedule for 2022 1

2 2 3 3

Discussion Items Discussion Items

1 Audited Year-End 6/30/2021 Financials 1 2

2

3 3

4 4