PORTFOLIO REVENUE EXPENSES PERFORMANCE WATCHLIST

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1 July 2018 ASSET MANAGEMENT Low-Income Housing Tax Credit Portfolio Trends Analysis Enterprise s Low-Income Housing Tax Credit (LIHTC) Portfolio Trends Analysis provides important information to our management and underwriting teams based on our asset management of more than 100,000 affordable homes. Largely drawn from year-end 2017 financials, this report reviews and analyzes key trends across the portfolio, reflecting continued strong performance. PORTFOLIO REVENUE EXPENSES PERFORMANCE WATCHLIST

2 PORTFOLIO In 2017, Enterprise closed 80 projects. These projects represent more than 7,000 residential units and more than $900 million of gross equity. The cumulative investment since Enterprise began syndication in 1988 is $13.2 billion in gross equity, invested in more than 2,300 projects with a total of 153,000 units. As of June 2018, Enterprise has transferred more than 850 projects, mostly post-year 15, representing more than 48,000 residential units. The average property size is currently 74 units and $7.4 million in gross equity. The Enterprise investment portfolio has 269 supportive housing projects that have at least one-third of the units in the property designated for households with special needs, for which resident services are also provided. This represents 19% of the portfolio and more than 11,000 units across the country, with 73% of these projects assisting homeless individuals and families. During 2017, the average occupancy of the supportive housing portfolio was 95.5%, and the median DCR was ,000 SUPPORTIVE HOMES Enterprise provides asset management to 1,427 LIHTC projects across 49 states, the District of Columbia and Puerto Rico. These projects represent more than 105,000 total units and more than $10.6 billion in gross equity. PORTFOLIO CHARACTERISTICS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Suburban 19% Rural 20% Urban 61% Location AGE OF PORTFOLIO % 78 6% % < 31 Units 19% Units 37% > 60 Units 44% Project Size % For Profit 25% Nonprofit 75% Sponsor Type CONSTRUCTION & LEASE-UP DURATION 5 Years 6 10 Years Mixed 5% Mod Rehab 17% Sub Rehab 22% New Construction 56% Years > 15 Years Construction Other 7% Senior 23% Family 70% Population This portfolio consists of 1,308 projects that have reached stabilization, as well as another 119 projects in various stages of development. 309 To date, Enterprise has invested and closed equity into 309 projects that will complete certification that meets Green Communities Criteria. 60% 50% 40% 30% 43% / 19% BEHIND PROJECTION 41% / 36% ON TIME 16% / 45% AHEAD OF PROJECTION 20% Over the last 5 years, the median construction period has been 13.5 months, and 57% of projects are considered on time or ahead of projection. 10% 0% -10 or Less -7 to to -7-3 to -5-1 to -3-1 to to to to or More +7 to +10 The median lease-up rate has been 3.6 months, and 81% are considered on time or ahead of projection. Months Behind (-) or Ahead (+) of Projected Schedule Construction Lease-Up

3 REVENUE The average physical occupancy for 2017 was 96.6%, and the median was 98.0%. When measuring by equity, more than 53% of the portfolio has an occupancy that is between 98% and 100%. Meanwhile, less than 5% of the projects have an occupancy that is considered underperforming, or less than 90%. The average economic occupancy for 2017 was 96.3%, and the median was 97.6%. The average physical occupancy for projects on the year-end 2017 Project Performance List (PPL) was 92.7%. The median total revenue for 2017 was $9,097 per unit, which represents a 1.9% increase over The average annual growth rate of the median total revenue is 2.6% a year since PHYSICAL OCCUPANCY % 100.0% 98.0% 96.0% 94.0% 92.0% 90.0% 97.7% 96.0% 97.7% 96.2% 97.8% 96.5% Average 97.9% 96.5% Median 98.0% 96.6% 97.9% 96.4% 98.0% 96.6% CITY / MSA STABILIZED COUNT AVERAGE OCCUPANCY New York % Los Angeles % Seattle % San Francisco % Washington, D.C % Baltimore % Portland % Cleveland % Philadelphia % Denver % MSA = Metropolitan Statistical Area EXPENSES Representing 32% of all operating expenses, repairs and maintenance (R&M) increased by 3.5% in Utilities had the largest increase in 2017, at 4.4%, followed by administrative costs at 3.8%. Despite having flat growth in 2017 (-0.3%), insurance costs have increased the most over the past six years, with an annual rate of 3.7%. Administrative costs have had the second highest increase, with an annual growth rate of 3.6% over the past six years. The median total operating expenses for projects on the year-end 2017 PPL was $7,270 per unit. MEDIAN TOTAL REVENUE ($ PER UNIT) $9,500 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 Repairs and Maintenance $2,074 Administrative Utilities Real Estate Taxes Insurance 7,807 $403 $386 7,968 8,214 $1,022 8,324 8,520 MEDIAN OPERATING EXPENSES BY CATEGORY $1,702 8,927 The 2017 median total operating expenses was $6,564 per unit, which represents a 2.8% increase over The total average growth rate of the median total operating expenses has been 3.2% a year since ,097 - $500 $1,000 $1,500 $2,000 $2,500

4 CITY / MSA STABILIZED COUNT MEDIAN OPEX New York 209 8,586 Los Angeles 65 7,408 Seattle 49 7,212 San Francisco 42 10,551 Washington, D.C. 42 7,490 Baltimore 39 6,419 Portland 37 5,900 Cleveland 36 6,670 Philadelphia 29 7,155 Denver 23 6,405 MEDIAN TOTAL OPERATING EXPENSES ($ PER UNIT) $7,000 $6,500 $6,000 6,564 $5,500 6,387 6,112 5,983 $5,000 5,753 $4,500 5,426 5,609 $4,000 PERFORMANCE The median Net Operating Income (NOI) for larger projects with more than 60 units is $3,022 per unit. This is nearly double that of smaller projects with 30 units or less. When measuring by equity, more than 86% of the portfolio had a Debt Coverage Ratio (DCR) > 1 in The percentage of projects with a DCR > 1 is slightly lower (82%) when measuring by project count. DCR performance is strongest (1.55) in the first five years of a compliance period and weaker (1.29) in the latter years. Currently 76% of the projects in the portfolio have some hard, or must-pay, debt. This includes both conventional debt with private institutions and public debt with state and local government agencies. The 2017 median NOI was $2,439 per unit, which is an increase of 4.0% over the prior year. Strong occupancy and continued revenue growth raised the DCR to a portfolio historical high of MEDIAN NOI ($ PER UNIT) $2,500 $2,000 $1,500 $1,000 $500 $- 2,051 2,118 2,180 2,165 2,253 2,344 2,439 MEDIAN DCR MEDIAN NOI BY PROJECT SIZE $3, $2, $1, < 31 Units Units > 60 Units

5 PORTFOLIO DEBT COMPOSITION MEDIAN CASH FLOW ($ PER UNIT) $ % $ % % $500 $400 $300 $ $100 Both Hard & Soft Debt Hard Debt Only Soft Debt Only $ WATCHLIST At year-end, one project was considered to be at significant risk (PPL rating of 5 or 6), representing only 0.1% of the portfolio. The majority of the projects on the Watchlist for the Other Issues category are sponsor-related issues. The PPL percent for projects in construction was 11.5%. At this time last year, 9.2% of the portfolio was on the PPL. The year-end 2017 Enterprise PPL, or Watchlist, was at 8.4%. Cash flow concerns are the primary reason projects are on the Watchlist (56%). RISK RATING DISTRIBUTION YEAR-END 2017 WATCHLIST CHARACTERISTICS Cash Flow 56% HISTORICAL WATCHLIST 20% Construction/ Lease-Up 19% 18% 16% 14% Other Issues 12% Physical Condition 9% 12% 10% 8% 6% 4% 14.4% 13.6% 11.0% 11.6% 9.7% 9.2% 8.4% Compliance Issues 4% 0% 10% 20% 30% 40% 50% 60% 2% 0%

6 Regional Highlights July 2018 The average occupancy for the portfolio has risen from 96.0% in 2011 to 96.6% in The largest improvement has been in the Southeast region, where the average occupancy rose from 92.5% to 95.7%. The lower occupancy in this region was most pronounced in the states of Georgia and Florida. Currently, only the North Central region has an average occupancy lower than 95%, with the lowest averages in Iowa, North Dakota and South Dakota. Traditionally, California always had the highest average occupancy, but for the past four years it has been surpassed by the Northwest region and New York City, which currently has the highest average, at 97.9%. WA NORTHWEST MT ND NORTH CENTRAL NORTHEAST VT ME OR MN NH CA NV ID UT WY CO SD NE KS IA MO WI IL IN MI KY OH WV PA VA MD NY DE NJ MA RI CT NEW YORK CITY MID-ATLANTIC CALIFORNIA AZ NM OK AR MS TN AL GA SC NC HI AK SOUTHWEST TX LA FL SOUTHEAST NORTHWEST SOUTH CENTRAL NORTHEAST PUERTO RICO AVERAGE OCCUPANCY BY SUB-REGION (Less Than 95% Highlighted) SUB-REGION Northwest 96.9% 96.9% 97.3% 97.5% 97.9% 97.4% 97.6% California 97.0% 97.7% 97.5% 96.8% 96.9% 97.1% 97.1% Southwest 95.3% 95.2% 95.3% 95.6% 95.3% 94.3% 95.3% North Central 95.7% 95.3% 95.2% 94.8% 95.3% 95.0% 94.7% South Central 94.2% 94.3% 95.4% 96.0% 95.2% 95.5% 95.2% Northeast 95.1% 94.9% 95.7% 95.7% 95.9% 95.9% 96.0% New York City 96.5% 96.8% 97.5% 97.8% 98.1% 98.0% 97.9% Mid-Atlantic 96.4% 96.8% 97.0% 97.0% 97.1% 96.9% 97.7% Southeast 92.5% 94.0% 96.5% 95.9% 96.2% 96.4% 95.7% PORTFOLIO 96.0% 96.2% 96.5% 96.5% 96.6% 96.4% 96.6%

7 July 2018 The 2017 median total operating expenses was $6,564 per unit, which represents a 2.8% increase over The average annual growth rate of the median total operating expenses has been 3.2% a year since New York City reports the highest expense amount, $8,709 per unit, and the Southwest and North Central regions have the lowest, $5,111 and $5,256 per unit, respectively. One primary driver of the higher expenses in New York City is owner-paid utilities. It should be noted that the expenses in New York City have increased only 1.3% per year since 2011, the lowest increase rate of all the regions. MEDIAN TOTAL OPERATING EXPENSES BY SUB-REGION SUB-REGION Northwest $4,829 $4,936 $5,203 $5,081 $5,325 $5,382 $5,766 California $6,759 $6,860 $6,987 $7,153 $7,200 $7,232 $7,683 Southwest $4,170 $4,364 $4,531 $4,534 $4,606 $4,908 $5,111 North Central $4,228 $4,448 $4,538 $4,945 $4,947 $5,159 $5,256 South Central $4,644 $5,027 $5,156 $5,123 $5,259 $5,448 $5,376 Northeast $6,278 $6,612 $6,569 $6,771 $7,057 $7,324 $7,345 New York City $8,050 $8,047 $8,443 $8,677 $8,743 $8,609 $8,709 Mid-Atlantic $5,131 $5,242 $5,448 $5,754 $6,003 $6,306 $6,428 Southeast $5,058 $5,319 $5,182 $5,188 $5,196 $5,437 $5,644 PORTFOLIO $5,426 $5,609 $5,753 $5,983 $6,112 $6,387 $6,564 The 2017 median NOI was $2,439 per unit, which is an increase of 4.0% over the prior year. Strong occupancy and continued revenue growth have not only strengthened NOI, but also raised the DCR to a historical high of The average annual growth rate of the median NOI since 2011 has been 2.9% per year. The highest median NOI amounts are traditionally in the western regions, and the lowest median NOI has been in the Northeast Region. Strong occupancy and modest expense increases have caused the NOI in New York City to increase an average of 11.3% per year since 2011, higher than any other region during this time frame. MEDIAN NET OPERATING INCOME BY SUB-REGION SUB-REGION Northwest $2,321 $2,349 $2,470 $2,475 $2,487 $2,665 $2,633 California $2,773 $2,802 $2,820 $2,923 $2,895 $2,801 $2,929 Southwest $2,761 $2,701 $2,690 $2,681 $2,695 $2,858 $3,006 North Central $2,013 $1,974 $1,896 $1,787 $1,820 $2,060 $2,009 South Central $1,911 $1,897 $2,130 $2,066 $1,883 $2,078 $2,027 Northeast $1,064 $1,423 $1,432 $1,566 $1,502 $1,588 $1,799 New York City $1,381 $1,747 $1,860 $1,818 $1,984 $2,263 $2,620 Mid-Atlantic $2,148 $2,142 $2,181 $2,099 $2,302 $2,461 $2,358 Southeast $1,511 $1,770 $2,066 $1,948 $2,007 $2,099 $1,953 PORTFOLIO $2,051 $2,118 $2,180 $2,165 $2,253 $2,344 $2,439

8 ANALYSIS METHODOLOGY The following provides background on the methodology used in this report. The Portfolio section includes the 1,427 projects in the Enterprise investment portfolio as of June These projects represent Low Income Housing Tax Credit projects syndicated by Enterprise. The Revenue, Expense and Performance sections include only the 1,205 projects that reached their qualified occupancy date prior to December 31, The results factor in one-time revenue and expense adjustments for nonrecurring or capital-related expenditures. The Watchlist section and the Project Performance List refers to the quarterly review by the Asset Management staff to identify projects that may be underperforming. The projects on the Project Performance List are intensively monitored by the asset management team, and quarterly reports of progress are provided to Enterprise senior management and investors. Enterprise is a proven and powerful nonprofit that improves communities and people s lives by making well-designed homes affordable. We bring together nationwide know-how, partners, policy leadership and investments to multiply the impact of local affordable housing development. Over more than 35 years, Enterprise has created nearly 529,000 homes, invested $36 billion and touched millions of lives. Join us at or We welcome your comments or questions, in care of: Rob Medlock, Director, Portfolio Analysis Enterprise Community Asset Management, Inc. rmedlock@enterprisecommunity.com