EXECUTIVE SUMMARY HOUSING COMMISSION EXECUTIVE SUMMARY SHEET

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1 ITEM 100 EXECUTIVE SUMMARY HOUSING COMMISSION EXECUTIVE SUMMARY SHEET DATE: February 1, 2018 COUNCIL DISTRICT(S): 8 ORIGINATING DEPARTMENT: Real Estate Division CONTACT/PHONE NUMBER: Ted Miyahara (619) HCR REQUESTED ACTION: Request to approve a $6,200,000 residual receipts loan to fund the development of San Ysidro Senior Village Apartments, a new 51-unit supportive housing apartment community serving homeless individuals in the San Ysidro. EXECUTIVE SUMMARY OF KEY FACTORS: The proposed affordable housing development is a three story, 29,610-square-foot building, composed of 51 units located at 517 West San Ysidro Boulevard. The unit mix would consist of 50 studio units at approximately 350 square feet and a single twobedroom manager s unit. This is part of HOUSING FIRST SAN DIEGO: , and will provide housing to 50 homeless seniors. The Housing Commission will also provide 50 Project Base Vouchers. SYSVA will provide housing opportunities utilizing the Housing First approach to addressing homelessness to provide housing as quickly as possible, with supportive services as needed. The developer is seeking a residual recipe loan of up to $6,200,000, tax credits of $10,314,636, permanent loan of $310,255 and City fee waivers of $114,240. The developer is National Community Renaissance of California (National CORE), a seasoned and high reputable developer of affordable housing whom the Housing Commission has an excellent history Total development cost of the development is $16,939,132 Total development cost per residential units is $332,140 Hosing Commission subsidy per unit is $121,568 The Housing Commission intends to replace a portion of the proposed funding with proceeds secured from the City of San Diego s Low and Moderate Income Housing Asset Fund. Housing Commission staff is actively working with City staff to secure funding, which requires formal approval by City Council. Staff anticipates this to take place prior to the end of the fiscal year. If approved, the developer could commence construction in December 2018 and complete construction by December 2019.

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3 ITEM 100 DATE ISSUED: February 1, 2018 REPORT REPORT NO: HCR ATTENTION: SUBJECT: Chair and Members of the San Diego Housing Commission For the Agenda of February 9, 2018 Loan Recommendation for San Ysidro Senior Village Apartments COUNCIL DISTRICT: 8 REQUESTED ACTION Seven-Day Advance Notice of San Diego Housing Commission hearing of the following matter has been provided to the Housing Authority Members in accordance with the terms and provisions of San Diego Municipal Code Section (e)(4)(b).: Approve a residual receipts loan in an amount not to exceed $6,200,000 to facilitate the new construction of San Ysidro Senior Village Apartments, a 51-unit affordable rental housing development for homeless seniors age 62 and older, located at 517 West San Ysidro Boulevard, which will remain affordable for 55 years. STAFF RECOMMENDATION That the San Diego Housing Commission (Housing Commission) take the following actions, as described in this report: 1. Approve a Housing Commission residual receipts loans in an amount not to exceed $6,200,000 to a to-be formed Limited Partnership consisting of National Community Renaissance of California (National CORE), and a tax credit investor to facilitate the new construction of San Ysidro Senior Village Apartments, a 51-unit affordable rental housing development for homeless seniors age 62 and older, located at 517 West San Ysidro Boulevard, which will remain affordable for 55 years;. 2. Authorize the President and Chief Executive Officer (President & CEO) of the Housing Commission, or designee: a) To execute all necessary documents and instruments to effectuate the transaction and implement the project, in a form approved by General Counsel, and to take such actions as are necessary, convenient and/or appropriate to implement the approvals upon advice of General Counsel; b) To adjust financing terms/conditions as necessary for consistency with requirements of other funding sources or to accommodate market changes that may occur, provided that the proposed $6,200,000 maximum Housing Commission loan amount may not increase; and c) To substitute approved funding sources with any other available funds as deemed

4 February 1, 2018 Loan Recommendation for San Ysidro Senior Village Apartments Page 2 appropriate, contingent upon budget availability, and further authorize the President & CEO, or designee, to take such actions as are necessary, convenient and/or appropriate to implement this approval and delegation of authority by the Housing Commission upon advice of General Counsel. SUMMARY The Permanent Supportive Housing Development The San Ysidro Senior Village Apartments (SYSVA) development is supported by the Housing Commission s homeless action plan, HOUSING FIRST SAN DIEGO: SYSVA received a funding recommendation for $6,200,000 through the Permanent Supportive Housing Notice of Funding Availability (NOFA) released on August 1, 2017, by the Housing Commission. HOUSING FIRST SAN DIEGO includes awarding $30 million over three years (up to $10 million per year), along with up to 325 federal rental housing vouchers, to create permanent supportive housing that will remain affordable for 55 years. The Housing Commission announced HOUSING FIRST SAN DIEGO: on July 1, Developer s Request In response to the HOUSING FIRST SAN DIEGO NOFA, SYSVA was reviewed by a selection committee consisting of Housing Commission staff. The selection committee recommended capital funding and Federal Project-Based Housing Vouchers to provide rental assistance for the development. The developer, National CORE, is requesting a $6,200,000 residual receipts loan from the Housing Commission. The Housing Commission intends to replace a portion of the proposed funding with proceeds secured from the City of San Diego s Low and Moderate Income Housing Asset Fund. Housing Commission staff is actively working with City staff to secure funding, which requires formal approval by City Council. Staff anticipates this to take place prior to the end of the fiscal year. A development summary is included as Attachment 1. Table 1 - Development Details Address 517 West San Ysidro Boulevard Council District 8 Community Plan Area San Ysidro Development Type New Construction Construction Type Type V Parking Type Surface Housing Type Permanent Supportive Housing Lot Size 1.19 Acres; 51,836 square feet Units 51 (inclusive of one manager s unit) Density ~43 dwelling units per acre Unit Mix 50 Studio and one 2-bedroom manager unit

5 February 1, 2018 Loan Recommendation for San Ysidro Senior Village Apartments Page 3 Gross Building Area Commercial Space 27,110 Net rentable 2,500 Community room 29,610 Building gross square footage Net Rentable Area 27,110 Square Feet Developer National Community Renaissance of California Prevailing Wages Subject to Davis-Bacon Prevailing Wages Rental Subsidy 50 Project Based Vouchers The Development The is a proposed new construction affordable housing development located at 517 West San Ysidro Boulevard in the San Ysidro neighborhood (Attachment 2). The proposed affordable housing development is a three-story, 29,610 square-foot building, composed of 51 units. The unit mix would consist of 50 living units at approximately 350 square feet and a single two-bedroom manager s unit. Amenities include a community room, counseling offices for supportive services, manager s office, laundry facilities, resident storage lockers, bike storage and 16 parking spaces. SYSVA will provide housing opportunities utilizing the Housing First approach to addressing homelessness to provide housing as quickly as possible, with supportive services as needed. Once a person moves into permanent housing, case management and wraparound services will be provided by a residential homeless service provider. The Housing Commission has partnered with the Regional Task Force on the Homeless to enable homeless service providers in the City to participate in a Coordinated Entry System (CES), formerly known as the Coordinated Assessment and Housing Placement system (CAHP) for homeless individuals, utilizing the Homeless Management Information System (HMIS). Organizations serving homeless individuals and families in the region share a single system that enables the more efficient delivery of housing and critical services to San Diegans experiencing homelessness. The database allows homeless housing providers to screen homeless individuals for the most appropriate housing options based on who is most in need. The developer and service provider will participate in the CES and maintain client data in the HMIS as required by the Housing Commission. Supportive Services SYSVA residents will have access to an array of medical and social services provided by the County of San Diego Health and Human Services Agency, Father Joe s Villages, San Diego Program for All- Inclusive Care for the Elderly (PACE), Casa Familiar and Hope Through Housing Foundation. The County of San Diego Health and Human Services Agency will provide services to 12 tenants who have a diagnosed serious mental illness and qualify under the State Mental Health Services Act (MHSA) program, which is administered by the County. Services will be provided to the MHSA tenants through the Assertive Community Treatment (ACT) model, an evidence-based practice of providing services to homeless individuals with a serious mental illness. Services will be provided both on-site and in the community and will be provided at a 1:10 staff-to-client ratio in accordance with the ACT fidelity model. San Diego PACE has committed to providing in-kind services to all tenants that qualify. In the event that tenants voluntarily decline services or do not meet the criteria necessary to participate in the San

6 February 1, 2018 Loan Recommendation for San Ysidro Senior Village Apartments Page 4 Diego PACE program, additional services from Father Joe s Villages will be offered to tenants. San Diego PACE will provide residents with an array of medical and social services that will allow the residents to live independently rather than having to move to a skilled nursing facility or return to homelessness. San Diego PACE s services also include transportation assistance, adult day care serves, acute hospitalization, rehabilitation, skilled and custodial nursing care, primary medical and specialty care, prescription drug coverage and management, meals and dietary counseling, dental, podiatry, optometry and 24-hour access to the San Diego PACE medical team. Father Joe s Villages will provide services for up to 15 (equivalent to 30 percent of the development) non-mhsa tenants or tenants who do not qualify for or voluntarily decline San Diego PACE services. Using evidence-based practices, Father Joe s Villages will provide case management, life skills, and access to mental health and substance use services. In addition, tenants will have access to an array of services and resources offered on Father Joe s Villages campus in downtown San Diego. Services will be provided at an approximate 1:14 staff-to-client ratio. Casa Familiar and Hope Through Housing Foundation will provide a variety of social services to support residents of the community. The to-be formed Limited Partnership consisting of National CORE and a tax credit investor will work closely with the supportive service providers and with property management to ensure that the tenants are receiving the services and resources needed to achieve successful tenancy. The service providers will track data and outcomes through a number of databases, and this information will be reported to the Housing Commission, and other funders, such as the County of San Diego Behavioral Health Services Division and the California Housing Finance Agency, on an annual basis. Prevailing Wages This development proposes to utilize 50 Federal Project-Based Housing Vouchers, which will require payment of Federal Davis-Bacon prevailing wages. In addition, the amount of Federal HOME Investment Partnerships Program (HOME) funds proposed will require payment of Davis-Bacon prevailing wages. Accessibility The California Tax Credit Allocation Committee (TCAC) requires wheelchair accessibility in 10 percent of the units, and 4 percent of the units accessible to residents with visual and/or hearing impairment. The same units can satisfy both of these accessibility requirements. In addition, these accessible units will satisfy the HOME and Project-Based Housing Voucher accessibility requirement of wheelchair accessibility in 5 percent of the units plus an additional 2 percent of the units accessible to residents with visual and/or hearing impairment. The development will include Universal Design features. Development Team The developer is National Community Renaissance of California (National CORE), a California nonprofit. The proposed borrower will be a California limited partnership that will include National CORE, or an affiliate, as its General Partner and a to-be-determined tax credit investor limited partner. During the 15-year tax credit compliance period, SYSVA will be owned by this limited

7 February 1, 2018 Loan Recommendation for San Ysidro Senior Village Apartments Page 5 partnership. National CORE is an award-winning nonprofit corporation headquartered in Rancho Cucamonga, California. It was established in National CORE has more than 8,460 rental units under ownership in four states, including 6,700 rental units in Southern California. It is a vertically integrated company with an in-house construction division and property management division. National CORE has acted as the developer on previous affordable housing developments that utilized Housing Commission loans. National CORE is in compliance with all previous Housing Commission loans and bond issuances. A Developer Disclosure Statements for National CORE is provided as Attachment 3. Table 2 - Development Team Summary Developer National Community Renaissance of California (National CORE) Limited Partnership General Partner: National CORE Tax Credit Limited Partner: To-be-determined General Contractor National CORE Architect Service Providers Property Management Studio E Architects County of San Diego Health and Human Services Agency Father Joe s Villages San Diego PACE Casa Familiar Hope Through Housing Foundation National CORE Proposed Financing Structure SYSVA has an estimated total development cost of $18,275,881. National CORE proposes to finance the development through the use of 9 percent tax credits, conventional financing and Housing Commission residual receipts loan. Total development costs and sources and uses of funds are detailed in the pro forma attached to this report (Attachment 4) and summarized below. Table 3 - Permanent Sources & Uses Sources of Financing Uses of Financing Tax Credit Equity $ 10,314,636 Land Acquisition $2,800,000 Permanent Loan 310,255 Hard Costs 8,359,403 Housing Commission Loan 6,200,000 Soft Costs 4,215,818 City Fee Waiver 114,240 Reserves 163,911 Developer Fee 1,400,000 Total Development Costs $ 16,939,132 Estimated Total Development Costs $ 16,939,132 Developer Fee

8 February 1, 2018 Loan Recommendation for San Ysidro Senior Village Apartments Page 6 National CORE is proposing to receive a $1,400,000 developer fee. The fee proposal is consistent with Updated Developer Fees (HAR17-011) approved by Housing Authority on April 19, Table 4 - Funding Request Housing Commission Total Subsidy $6,200,000 Housing Commission Subsidy Per Unit $121,568 Proposed Funding Sources The proposed Housing Commission loan will be funded with up to $2,200,000 in U.S. Department of Housing and Urban Development (HUD) HOME Investment Partnerships Program funds granted to the City of San Diego and administered by the Housing Commission and up to $4,000,000 from the City s Affordable Housing Fund (Inclusionary Housing funds and Housing Trust Fund linkage fee revenues) administered by the Housing Commission. A final determination of Housing Commission funding sources will be made by the Housing Commission s President & CEO, or designee, contingent upon budget availability. The Housing Commission s loan will be a residual receipts loan. Loan terms are provided as Attachment 5. The Housing Commission loan is contingent upon the developer obtaining the proposed funding approvals from TCAC for 9 percent tax credits. National CORE will submit a 9 percent tax credit application to TCAC in February, and if successful in securing funding, will break ground on the development by December Development Cost Key Performance Indicators Housing Commission staff has identified development cost performance indicators which were used to evaluate the proposed development and make a funding recommendation. Table 5 Performance Indicators Development Cost Per Unit $16,939, units = $ 332,140 Housing Commission Subsidy Per Unit $6,200, units = $ 121,568 Net Rentable Square Foot Hard Cost $8,359,403 27,110 sf = $ 308 Gross Building Square Foot Hard Cost $8,359,403 29,610 sf = $ 282 The Housing Commission engaged The Gordian Group, a third-party cost consultant, to evaluate the development proposal and provide construction hard cost estimates. The report issued by Gordian Group validated the developer s cost estimate for the project. Project Name Year Completed Table 6 - Project Cost Comparison Chart Construction Units Total Type Development Per Unit Cost Commission Subsidy Per Unit Gross Hard Cost Sq. Ft. Cost Subject Property N/A V 51 $16,939,132 $332,140 $121,568 $282 Beacon N/A V over I 43 $18,275,881 $415,361 $74,419 $385 Lofts at Normal N/A V over I 53 $18,842,009 $355,510 $98,113 $260 Talmadge Apts. N/A V 60 $19,721,488 $328,691 $80,000 $244

9 February 1, 2018 Loan Recommendation for San Ysidro Senior Village Apartments Page 7 Cypress N/A V over I 63 $20,420,000 $324,127 $54,762 $299 Development Hard Cost The developer is proposing new construction hard cost so $16,939,143 ($332,140 per unit). There was a substantial effort to review, investigate, and reduce the project s construction costs, including engaging the Gordian Group, a third-part cost consultant, to evaluate the hard cost estimates. The Gordian Group has validated the developer s cost estimate for the development. The construction gross hard cost of the subject development is consistent with previously approved permanent supportive housing developments. It should be noted that the project is subject to Federal Davis Bacon prevailing wages due to the use of HOME funds and Project Based Housing Vouchers. AFFORDABLE HOUSING IMPACT Homeless Impact The 2017 San Diego Regional Homeless Point-In-Time Count identified a total of 5,619 total homeless individuals in the City, of which 3,231 are living without shelter on San Diego streets, in canyons, beaches, riverbeds, parks, or in vehicles. San Diego County has the fourth largest homeless population in the nation, according to the 2017 Annual Homeless Assessment Report to Congress from the HUD Office of Community Planning and Development. SYSVA will be subject to a Housing Commission Declaration of Covenants and Restrictions, in addition to the applicable tax credit regulatory agreement, which will restrict the affordability of 50 units for 55 years. A portion of the targeted tenant population is extremely low-income and does not typically have a stable source of income to pay rent. The developer has received a preliminary commitment of 50 Federal Project-Based Housing Vouchers (PBV) from the Housing Commission to provide rental assistance to supplement tenant rental payments. The targeted tenant base for PBV s shall be extremely low-income individuals. PBV s are awarded to specific affordable housing developments to provide rental assistance linked to their units. When a tenant moves, the rental housing voucher remains with the affordable housing unit so that another homeless San Diegan is eligible to receive permanent rental housing with supportive services. Table 7 - Proposed Rents Unit Type AMI Number of Units Maximum Rent* Estimated Market Rents Studio 30% 20 $477 $900 Studio 40% 20 $637 $900 Studio 50% 10 $796 $900 2-Bedroom N/A 1 N/A - Total 51 *Owner paid utilities FISCAL CONSIDERATIONS The proposed funding sources and uses approved by this action are included in the proposed Fiscal

10 February 1, 2018 Loan Recommendation for San Ysidro Senior Village Apartments Page 8 Year (FY) 2018 Housing Authority Approved Budget. Approving this action will authorize the Housing Commission to expend an amount up to $6,200,000 in the FY 2018 budget, as approved by the Housing Authority. The funds will be composed of both FY 2018 and FY 2019 Permanent Supportive Housing NOFA funds. Funding sources approved by this action will be as follows: HOME Investment Partnership Program $2,200,000 Affordable Housing Fund $4,000,000 Total Funding Sources Up to $6,200,000 Fiscal Year 2018 funding uses approved by this action will be as follows: Loans up to $6,200,000 Total funding uses $6,200,000 Approving this action will further give the President & CEO, or designee, the authority to substitute the funding sources with other available funding sources so long as the total Housing Commission loan amount does not exceed the approved total loan amount, should the operational need arise or should such actions be to the benefit of the Housing Commission. Development Schedule The estimated development timeline is a follows: Housing Commission proposed approval February 9, 2018 TCAC 9% Application Submittal February 28, 2018 TCAC 9% Tax Credit Award Meeting June 2018 Construction Start December 2018 Construction Completion December 2019 COMMUNITY PARTICIPATION and PUBLIC OUTREACH EFFORTS On November 14, 2016, an informational item was presented to the San Ysidro Community Planning Group. An update to the San Ysidro Community Planning group was provided on March 13, The San Ysidro Community Planning Group provided a letter of support for the proposed development on March 13, KEY STAKEHOLDERS and PROJECTED IMPACTS Stakeholders include National CORE, the San Ysidro community and future residents. Development of the property is expected to have a positive impact on the community because it will develop a site into affordable rental units serving homeless individuals. ENVIRONMENTAL REVIEW The action being taken at this time involves only consideration of a loan. This activity is not a "project" and is therefore not subject to the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15060(c)(3). This determination is predicated on Section of the Guidelines, which provides direction to lead agencies on the appropriate timing for environmental review. This action does not constitute approval of a project. Approval will occur once the

11 February 1, 2018 Loan Recommendation for San Ysidro Senior Village Apartments Page 9 environmental review has been completed in accordance with CEQA Section This action will not foreclose review of alternatives or mitigation measures by the public as part of the CEQA process. The proposed actions are approval of a loan and do not constitute approval of the development activity. Future actions to consider and approve development entitlement approvals related to the development of the site, if applicable, will require additional review under the provisions of CEQA by the lead agency. HOME Investment Partnerships Program (HOME) funds and Federal Project-Based Housing Vouchers constitute a portion of the funding for the project. A final award shall occur only upon satisfactory completion of the environmental review and receipt by the City of San Diego of a release of funds from the U.S. Department of Housing and Urban Development under 24 CFR Part 58 of the National Environmental Policy Act (NEPA). The parties agree that the provision of any HOME funds and Federal Project-Based Housing Vouchers to the project is conditioned on the City of San Diego s determination to proceed with, modify or cancel the project based on the results of a subsequent environmental review under NEPA. Respectfully submitted, Ted Miyahara Ted Miyahara Vice President, Housing Finance, Programs & Compliance Real Estate Division Approved by, Deborah N. Ruane Deborah N. Ruane Executive Vice President & Chief Strategy Officer San Diego Housing Commission Attachments: 1) Development Summary 2) Location Map 3) Developer Disclosure Agreement 4) Developer pro forma 5) Term Sheet Hard copies are available for review during business hours at the security information desk in the main lobby and the fifth floor reception desk of the San Diego Housing Commission offices at 1122 Broadway, San Diego, CA and at the Office of the San Diego City Clerk, 202 C Street, San Diego, CA You may also review complete docket materials in the Public Meetings section of the San Diego Housing Commission website at

12 Attachment 1 Table 1 - Development Details Address 517 West San Ysidro Boulevard Council District 8 Community Plan Area San Ysidro Development Type New Construction Construction Type Type V Parking Type Surface Housing Type Permanent Supportive Housing Lot Size 1.19 Acres; 51,836 square feet Units 51 (inclusive of one manager s unit) Density ~43 dwelling units per acre Unit Mix 50 Studio and one 2-bedroom manager unit Gross Building Area Commercial Space 27,110 Net rentable 2,500 Community room 29,610 Building gross square footage Net Rentable Area 27,110 Square Feet Developer National Community Renaissance of California Prevailing Wages Subject to Davis-Bacon Prevailing Wages Rental Subsidy 50 Project Based Vouchers Table 2 - Development Team Summary Developer Limited Partnership General Contractor Architect Service Providers Property Management National Community Renaissance of California (National CORE) General Partner: National CORE Tax Credit Limited Partner: To-be-determined National CORE Studio E Architects County of San Diego Health and Human Services Agency Father Joe s Villages San Diego PACE Casa Familiar Hope Through Housing Foundation National CORE Table 3 - Permanent Sources & Uses Commented [TM1]: Ted to update next week Sources of Financing Uses of Financing Tax Credit Equity $ 10,314,636 Land Acquisition $2,800,000

13 Permanent Loan 310,255 Hard Costs 8,359,403 Housing Commission Loan 6,200,000 Soft Costs 4,215,818 City Fee Waiver 114,240 Reserves 163,911 Developer Fee 1,400,000 Total Development Costs $ 16,939,132 Estimated Total Develoment Costs $ 16,939,132 Table 4 - Funding Request Housing Commission Total Subsidy $6,200,000 Housing Commission Subsidy Per Unit $121,568 Table 5 Performance Indicators Development Cost Per Unit $16,939, units = $ 332,140 Housing Commission Subsidy Per Unit $6,200, units = $ 121,568 Net Rentable Square Foot Hard Cost $8,359,403 27,110 sf = $ 308 Gross Building Square Foot Hard Cost $8,359,403 29,610 sf = $ 282 Table 6 - Project Cost Comparison Chart Project Name Year Completed Construction Type Units Total Development Cost Per Unit Cost Commission Subsidy Per Unit Gross Hard Cost Sq. Ft. Subject Property N/A V 51 $16,939,132 $332,140 $121,568 $282 Beacon N/A V over I 43 $18,275,881 $415,361 $74,419 $385 Lofts at Normal N/A V over I 53 $18,842,009 $355,510 $98,113 $260 Talmadge Apts. N/A V 60 $19,721,488 $328,691 $80,000 $244 Cypress N/A V over I 63 $20,420,000 $324,127 $54,762 $299 Table 7 - Proposed Rents Unit Type AMI Number of Units Maximum Rent* Estimated Market Rents Studio 30% 20 $477 $900 Studio 40% 20 $637 $900 Studio 50% 10 $796 $900 2-Bedroom N/A 1 N/A - Total 51 *Owner paid utilities

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30 SOURCES AND USES Project Name: San Ysidro Seniors Project Financing: 9% LIHTC Seniors Developer: National CORE Number of Dwelling Units: 51 Gross Building Area: 26,460 Date: ATTACHMENT 4 SOURCES: CONSTRUCTION CURRENT USES: CONSTRUCTION CURRENT PER UNIT Acquisition Costs/Closing $ 2,800,000 $ 54,902 Construction Loan $ 8,600,000 Architecture/Fees & Permits $ 2,405,199 $ 47,161 Construction Cost $ 8,359,403 $ 163,910 SDHC $ 5,580,000 Indirect Construction/Legal $ 412,440 $ 8,087 $ - Developer's Fee $ 1,400,000 $ 27,451 RTCIP Fee Waiver $ 114,240 Rent-Up Costs/Reserves $ 413,911 $ 8,116 Tax Credit Equity $ 1,547,195 Service Reserve $ - $ - Deferred Costs/ Reserves $ 1,097,696 Financing Costs $ 1,148,178 $ 22,513 Total $ 16,939,132 Total $ 16,939,132 $ 332,140 CONSTRUCTION GAP $ - SOURCES: PERMANENT USES: PERMANENT Perm Loan $ 310,255 $9,946,052 Acquisition Costs/Closing $ 2,800,000 $ 54,902 $13,856,109 Architecture/Fees & Permits $ 2,405,199 $ 47,161 $0 Construction Cost $ 8,359,403 $ 163,910 SDHC $ 6,200,000 $ 6,200,000 Indirect Construction/Legal $ 412,440 $ 8,087 $ - Developer's Fee $ 1,400,000 $ 27,451 RTCIP Fee Waiver $ 114,240 $ 114,240 Rent-Up Costs/Reserves $ 413,911 $ 8,116 Tax Credit Equity $ 10,314,636 Service Reserve $ - $ - Deferred Developer Fee $ 0 $804,683 Financing Costs $ 1,148,178 $ 22,513 Total $ 16,939,132 $30,921,084 Total $ 16,939,132 $ 332,140

31 San Ysidro Seniors Units 51 Uses of Funds % % DEPRECIABLE TAX CREDIT ELIGIBLE TOTAL NON- CONST/ TOTAL RESIDENTIAL DEPREC RESIDENTIAL NON-RES EXPENSE MORTIZE REHAB ACQUIS. ACQUISITION COSTS Total Purchase Price 2,750,000 2,750,000 Land 2,750,000 2,750,000 2,750,000 Other Acquisition Costs 50,000 50,000 50,000 TOTAL ACQUISITION COSTS 2,800,000 2,800,000 FEES/PERMITS & STUDIES Local Permits/Fees/Utility Fees 350, , , ,000 Local Development Impact Fees 944, , , ,769 Environmental/ NEPA/ AHSC Consultants 130, , , ,000 Survey/Engineering/ Staking 340, , , ,000 Utility Consultant 75,000 75,000 75, ,000 Energy Consultant 80,000 80,000 80,000 80,000 Architecture 485, , , ,430 TOTAL FEES/PERMITS & STUDIES 2,405,199 2,405,199 DIRECT CONSTRUCTION COSTS Demolition 56,167 56,167 56,167 Retail 0 0 Offsite Work 450, , ,000 Site Work and Infrastructure 1,519,757 1,519,757 1,519,757 New Construction 4,817,392 4,817,392 4,817, ,817,392 Contractor General Conditions 407, , , ,966 Contractor Overhead & Profit 543, , , ,954 P&P Bonds and Insurance 174, , , ,405 Owner's Contingency (5%) 389, , , ,762 TOTAL DIRECT CONSTRUCTION COSTS 8,359,403 8,359,403 INDIRECT CONSTRUCTION COSTS Developer Fee 1,400,000 1,400, ,400, ,400,000 Prevailing Wages Consultant 100, , , ,000 Insurance During Construction 97,440 97,440 97, ,440 Real Estate Taxes 20,000 20,000 20, ,000 Legal: Organization of Partnership 10,000 10,000 10,000 Legal: Transactional 15,000 15, ,000 Legal: Syndication 40,000 40,000 40,000 Audit/Cost Certification 30,000 30, , ,000 Soft Cost Contingency 100, , , ,000 TOTAL INDIRECT CONSTRUCTION COSTS 1,812,440 1,812,440 RENT-UP COSTS/RESERVES Marketing 30,000 30,000 60,000 Lease-up Reserves 70,000 70,000 Operating Reserve 163, , ,911 Capitalized Operating Reserve for Services Furnishings 150, , , ,000 TOTAL RENT-UP COSTS/RESERVES 413, ,911 FINANCING COSTS Construction Loan Interest - During Construction 270, , , , ,900 Construction Loan Interest - During Lease-up 150, ,500 0 Construction Loan Fees 161, , , ,000 Legal: Construction Closing 60,000 60,000 60, ,000 Permanent Loan Fees 25,310 25,310 25,310 Legal: Permanent Closing 15,000 15,000 15,000 SDHC Cost Estimate 12,500 12,500 12,500 12,500 SDHC Asset Management Fee 15,000 15,000 15,000 15,000 SDHC Counsel 25,000 25,000 25,000 SDHC Underwriting Fee 60,000 60,000 60,000 TCAC Application/Monitoring Fee 88,728 88,728 88,728 Predev Loan Interest/Expenses 60,000 60, , ,000 Appraisal 15,000 15,000 15, ,000 Market Study 10,000 10, ,000 10,000 Bond Issuance Fees 0 0 Title/Recording/Escrow - Construction 50,000 50,000 50, ,000 Title/Recording/Escrow - Permanent 15,000 15,000 15,000 RTCIP Fee 114, , ,240 TOTAL FINANCING COSTS 1,148,178 1,148,178 TOTAL DEVELOPMENT COSTS 16,939,132 16,939,132 3,199,318 11,235, , ,038 13,275,275 0 Total Development Cost Per Unit 332,140

32 San Ysidro Seniors Threshold Basis Limit Calculation County: San Diego 9% or 4% credits: 9.00% BASE LIMITS THRESHOLD BASIS LIMIT Per Unit Unit Type 9.00% 4% Unit Type # Units Basis Limit TOTAL 0 BR 196, ,046 0 BR ,718 9,835,900 1 BR 226, ,110 1 BR 0 226, BR 273, ,400 2 BR 1 273, ,600 3 BR 350, ,472 3 BR 0 350, BR 390, ,702 4 BR 0 390, ,109,500 Additional Basis Adjustments: Local Development Impact Fees 944,769 Boost for Prevailing Wage 20.00% 2,021,900 Boost for Parking beneath Units (7%) 7.00% 0 Boost for Childcare (2%) 2.00% 0 Boost for 100% SN (2%) 2.00% 202,190 Boost for Elevator Service (10%) 10.00% 1,010,950 Boost for Energy/Resource Efficiency (up to 10%) 0% 0 Toxic/Seismic Abatement Costs 0 BONDS: 1% each % of 36% - 50% AMI BONDS: 2% each % of units at or below 35% AMI TOTAL THRESHOLD BASIS LIMIT 14,289,309 TOTAL ELIGIBLE BASIS 13,275,275 Surplus / (Deficit) 1,014,034 TCAC 130% High Cost Test 92.90%

33 San Ysidro Seniors Tax Credit Calculation FEDERAL CALIFORNIA CONST/ CONST/ ACQUIS REHAB TOTAL ACQUIS REHAB TOTAL TOTAL ELIGIBLE COSTS 0 13,275,275 13,275, ,275,275 13,275,275 ELIGIBLE BASIS 0 13,275,275 13,275, ,275,275 13,275,275 THRESHOLD BASIS LIMIT 14,289,309 REQUESTED ELIGIBLE BASIS 0 13,275,275 13,275, ,275,275 13,275,275 LESS: Voluntary Reduction for Tiebreaker (3,795,782) (3,795,782) TOTAL REQUESTED UNADJUSTED ELIGIBLE BASIS 0 9,479, ,479,493 HIGH COST ADJUSTMENT (Y/N) Y 100.0% 130.0% 100.0% 0.0% ADJUSTED ELIGIBLE BASIS 0 12,323,341 12,323, APPLICABLE FRACTION* 100.0% 100.0% 100.0% 100.0% QUALIFIED CREDIT BASIS 0 12,323,341 12,323, LESS: Credit Reduction for Leveraging 0.00% ADJUSTED QUALIFIED CREDIT BASIS 0 12,323,341 12,323,341 CREDIT RATE Federal Annual/Yr 1-3 State 7.48% 9.00% 3.18% 9.00% Year 4 - State 3.46% 3.00% MAXIMUM CREDIT AMOUNT PER COSTS Federal Annual/Yr 1-3 State 0 1,109,101 1,109, Year 4 - State Total ACTUAL TCAC CREDIT RESERVATION Federal Annual/Total State N/A N/A N/A N/A N/A N/A MAXIMUM ALLOWABLE CREDITS Federal Annual/Total State 0 1,109,101 1,109,101 0 MAXIMUM ALLOWABLE - TEN YEAR TOTAL 11,091,007 0 Federal Pricing $0.93 State Pricing $0.80 Federal Equity $10,314,636 State Equity $0

34 RENT SCHEDULE - CTCAC Project Name: San Ysidro Seniors CTCAC 2013 Maximum Income Levels: Project Financing: 9% LIHTC Seniors AMI One Person Two Person County: San Diego 30.00% $13,380 $15,300 Developer: National CORE 45.00% $20,070 $22,950 # of Dwelling Units: % $22,300 $25,500 Gross Building Area: 26, % $26,760 $30, % $44,600 $51,000 Unit Type AMI Number of Units Square CTCAC 2017 CRL Rents Monthly Monthly Total Annual Footage Restricted Rent Utility Allow. Net Rent Rents Total # of Bedrooms Studios 30% $ 477 $ 416 $ - $ 416 $ 99, % $ 637 $ 694 $ - $ 637 $ 152, % $ 796 $ 694 $ - $ 694 $ 83, % $ 955 $ 833 $ - $ 833 $ % 380 $ 955 $ 833 $ - $ 833 $ - 0 Subtotal: 50 $ 336, BR Exempt-Mgr 1 $ - $ - $ - $ - 2 Subtotal: 1 $ - 0 CTCAC RENT Total: ,000 50

35 Rents Project Name: San Ysidro Seniors Project Financing: 9% LIHTC Seniors Two Person Five Person Developer: National CORE $15,300 $20,640 Number of Dwelling Units: 51 $22,950 $30,960 Gross Building Area: 26,460 $25,500 $34,400 $30,600 $41,280 $51,000 $68,800 1 Unit Type AMI Number of Units Per Unit Monthly Net Maximum Tenant Rent (CRL) Per Unit Net S8/VASH Rent Per Unit Monthly S8 Premium Total Monthly S8 Premium Total Annual S8 Premium Total Annual Income Studio (S8) 30% 20 $ 416 $ 942 $ 526 $ 10,520 $ 126,240 $ 126,240 Studio ( VASH) 40% 20 $ 637 $ 942 $ 305 $ 6,100 $ 73,200 $ 73,200 SRO 50% 10 $ 694 $ 942 $ 248 $ 2,480 $ 29,760 $ 29,760 SRO 60% 0 $ 833 $ 942 $ 109 $ - $ - $ - SRO 60% 0 $ 833 $ 942 $ - $ - $ - $ - SRO $ - Unit Size (SF) 380 Subtotal: 50 $ 1,188 $ 19,100 $ 229,200 Total: 50 $ 11,417 $ 19,100 $ 229,200 ANNUAL INCREMENT ABOVE CTCAC 30%, 45%, 50% AMI RENTS Total Gross Revenue S8 Overhang $11,417 $19,100 $ 229,200 Total TCAC Gross Revenue $ 336, , ,900 Total Gross Revenue (TC and S8 Overhang) $ 565,200

36 OPERATING EXPENSES Project Name: Tie-Breaker #DIV/0! Project Name: San Ysidro Seniors Developer: National CORE Number of Dwelling Units: 51 Gross Building Area: 26, % Description Annual Monthly Per Unit Unit/Month % Total 1. Management Management Fee $ 36,720 $ 3, $ $ % Management Total: $ 36,720 $ 3, $ $ % 2. Administration Marketing/Credit Checks $ 500 $ $ 9.80 $ % Audit / File Mgmt (Compliance) $ 12,000 $ 1, $ $ % Legal $ 1,500 $ $ $ % Office Expenses/ MISC $ 9,000 $ $ $ % Other $ - $ - $ - $ % Administration Total: $ 23,000 $ 1, $ $ % 3. Salaries and Benefits Manager/Asst. Manager $ 40,000 $ 3, $ $ % Main Personnel $ 20,000 $ 1, $ $ % Leasing Commissions $ - $ - $ - $ % Case Manager $ - $ - $ - $ % Housekeepers $ - $ - $ - $ % Payroll Txs, Ins & Wkr. Comp. $ 21,000 $ 1, $ $ % Salaries and Benefits Total: $ 81,000 $ 6, $ 1, $ % 4. Maintenance General Maintenance/ Janitorial $ 3,000 $ $ $ % Repairs Contract $ 10,000 $ $ $ % Exterminating $ 7,000 $ $ $ % Fire Protection/Security Systems $ 6,000 $ $ $ % Elevator $ 5,000 $ $ $ % Grounds Contract $ 5,000 $ $ Decorating/ Equipment Maintenance $ - $ - $ - $ % Maintenance Total: $ 36,000 $ 3, $ $ % 5. Utilities Not Paid by Tenants $ - $ - $ % Electricity and Gas $ 52,500 $ 4, $ 1, $ % Water/Sewer $ 35,000 $ 2, $ $ % Trash Removal $ 10,000 $ $ $ % Utilities Total: $ 97,500 $ 8, $ 1, $ % 6. Insurance Property & Liability Insurance $ 17,850 $ 1, $ $ % Insurance Total: $ 17,850 $ 1, $ $ % 7. Tax and Reserves Real Estate Taxes $ 2,000 $ $ $ % Replacement Reserves $ 15,300 $ 1, $ $ % Tax and Reserves Total: $ 17,300 $ 1, $ $ % 8. Other Security $ 50,000 $ 4, $ $ % Licenses/ Permits $ 800 $ $ $ % Case Management $ 85,000 $ 7, $ 1, $ % Social Services Coordinator $ 12,240 $ 1, $ $ % SDHC Monitoring Fees $ 7,650 $ $ $ % Other Total: $ 155,690 $ 12, $ 3, $ % Operating Expenses Total: $ 465,060 $ 38, $ 9, $ %

37 CASH FLOW ANALYSIS Project Name: San Ysidro Seniors Tie-Breaker #DIV/0! Project Financing: 9% LIHTC Seniors Developer: National CORE Number of Dwelling Units: 51 Gross Building Area: 26,460 Assumptions Conventional Loan Rate: 6.00% Residential Income Infl. Rate: 2.50% Laundry Inc/Month/Unit: 14 Conventional Loan Yrs: 20 Total Per Unit Percent Laundry & Misc. Infl. Factor: 2.50% Laundry, Misc Inc/Year: 8,568 Conventional Loan Type: AMORTIZED Perm Loan 310,255 6, % Operating Expense Infl. Factor: 3.50% Unit Operating Exp: 6,873 Debt Coverage Ratio: % Real Estate Infl. Factor: 2.00% Unit Property Taxes: 39 Cash Available for Debt Service: 26, % Vacancy Rate: 5.00% Unit Social Services: 1,907 Developer RR Cash Flow Distribution % % % Number of Units: 51 Unit Replacement Reserve: 300 Public Agency RR Cash Flow Distribution % 0.00% RTCIP Fee Waiver 1,547,195 30, % Perm Loan Size $310,255 Deferred Developer Fee % Loan Constant Per Each $1 of Debt Svc $12 Development Costs Total: 16,418, , % Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Revenue Gross Rental Income 565, , , , , , , , , , , , , , ,613 Laundry & Miscellaneous 8,568 8,782 9,002 9,227 9,457 9,694 9,936 10,185 10,439 10,700 10,968 11,242 11,523 11,811 12,106 Gross Income 573, , , , , , , , , , , , , , ,719 Vacancy -28,688-29,406-30,141-30,894-31,667-32,458-33,270-34,101-34,954-35,828-36,724-37,642-38,583-39,547-40,536 FTEH Operating Reserve Effective Gross Income 545, , , , , , , , , , , , , , ,183 Expense Operating Expense 350, , , , , , , , , , , , , , ,385 Property Taxes 2,000 2,040 2,081 2,122 2,165 2,208 2,252 2,297 2,343 2,390 2,438 2,487 2,536 2,587 2,639 Social Services 97, , , , , , , , , , , , , , ,084 Replacement Reserve 15,300 15,300 15,300 15,300 15,300 15,300 15,300 15,300 15,300 15,300 15,300 15,300 15,300 15,300 15,300 Expense Total 465, , , , , , , , , , , , , , ,408 NOI Before Debt Service 80,020 78,421 76,646 74,684 72,527 70,164 67,585 64,779 61,735 58,441 54,884 51,053 46,934 42,513 37,775 Debt Service 1st Mortgage Debt Service 26,673 26,673 26,673 26,673 26,673 26,673 26,673 26,673 26,673 26,673 26,673 26,673 26,673 26,673 26,673 Debt Service Coverage CASH AVAILABLE AFTER DEBT SERVICE Available Cash Flow 53,346 51,748 49,973 48,011 45,854 43,491 40,911 38,106 35,061 31,767 28,211 24,380 20,261 15,840 11,102 PAYMENTS TO INVESTOR LIMITED PARTNER Credit Adjustors, Recapture, Change in Law Adjustor LP & GP Partnership Asset Management Fees 3.00% 10,000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 13,439 13,842 14,258 14,685 11,102 Investor Limited Partner Loans Incentive Management Fee OPERATING RESERVE UNTIL BALANCE EQUALS REQURED CASH AVAILABLE FOR DEFERRED DEVELOPER FEE: Available Cash Flow 43,346 41,448 39,364 37,084 34,598 31,898 28,971 25,807 22,394 18,720 14,772 10,538 6,003 1,154 0 Balance Beginning Simple AFR 3.00% % of RR % Balance Remaining $ CASH AVAILABLE FOR DISTRIBUTION 43,346 41,448 39,364 37,084 34,598 31,898 28,971 25,807 22,394 18,720 14,772 10,538 6,003 1,154 0

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