(W ith hldepertdenta.uditors'repo.:~:l'l'ereon)

Transcription

1 RECEI\'EB LEGISL/:d IVE [~,UDIIOR 2OOZJU~ 31 AII0:36 SH R EV EPO R T H O M /i;i~,~,~ R T (;A G E A U T i{o It,I.'F'Y (acomponentunitof thecity ofshreveport) Fh~ancM Sta~.em ents Y earended I]e~:.em ber3 :t,2001 (W ith hldepertdenta.uditors'repo.:~:l'l'ereon)

2 SH R EVEPO R T H O M E M O R TG A G E A U TH O R IT Y (acomponentunitofthecity ofshreveport) Table of C ontents Page R equired Supplem entary Inform ation M anagem ent'sd iscussion and A nalysis Independeu!A udilors'reporl Basic FinancialStatem ents Statem entof N eta ssels Statem entof Revenues,Expenses,and Changesin N eta ssets Statem entof C ash Flow s N otesto FinancialStatem ents

3 SHR EVEPORT H OM E M ORTGAGE AUTH ORITY (agomponentunr ofthe City ofshreveport) M anagem ent'sd iscussion and A nalysis D ecem ber31,2001 Financialltighlights Tile A uthority'slotalnetassetsrem ained virtually unchanged overthe course of thisyear'soperationsascurrent yearoperating revenuesand receiptof principalpaym entson outstanding m ortgage loansand the note receivable w ere used to pay the debtservice on the outstanding bonds. hrtereslreceived on m ortgage loansand the note receivable continuesto decrease each year. Forthe yearended December 31,2001,interest incom e decreased approximately $177,000.This continualdecrease is due to principalpaym entsand pay downson the outstanding m ortgage loansand note receivable w ith no new issuances. The A uthority issued no new bondsorrelated m ortgage loansduring the yearended D ecem ber31, O verview of the FinancialStatem ents Tifsmanualreportconsistsof two parts- management'sdiscussion and analysis(thissection)and the basic financialstatem ents.the basic financialstatem entsprovide inform ation on the A uthority'sfinancialstatus. The basic financialstatenaentsalso include notesthatexphdn som e of the information in the financialstatem entsand provide m ore detailed dala. FinancialA nalysisof the A ulhorily An analysisbelow focuseson the netassets(table I)and change in netassets(table 2)ofthe Authority's activities. Tahle 1 N eta ssets Currentand otherassets N oneurrentassets 3,952,120 16,958,588 3,955,465 19,520,953 Totalassets Currentand otherliabilities Long4enn liabilities Totalliabilities 20,910,708 2,063,165 16, ,476,418 2,017, ,167,172 20,883,831 N etassets: Restricted fordebtservice U nrestricted Totalnetassets 254,628 2,488,908 $ _ 2,743, ,489 2,346,098 2,592,587 (Continued)

4 SH REVEPO R T H O M E M O R TG A G E A U TH O RITY (acomponentunitof the City of Shreveport) M anagem ent's D iscussion and A nalysis D ecem ber31,2001 Tile totalassetsof the Authority decreased by $2,565,710 in the currentyear.thiscorrespondsto the current yeardecrease in totalliabilitiesof $2,716,659.A sthe notesreceivable are collected,paym entsare m ade on the outsta nding debt.a s long asno new loansreceivable o~rdebtisissued,thisrelationship w illcontinue. The Authority'snetassetswere $2,743,536 atd ecember31,2001.ofthisam ount,$2,488,908 wasunrestricted and representsthe accum ulated resultsof allpastyears'operations.restricted netassetsare reported separately to show those am ountsrestricted by,and the use thereof governed by,the TrustIndenture foreach bond issue. Table 2 C hangesin N eta ssets O perating revenues: Intereston m ortgage loansand note receivable O theroperating revenue Totaloperating revenues Operating expenses: Intereston bonds O theroperating expenses Totaloperating expenses Operating income (loss) N onoperating revenues $ 1,530,731 95,545 1,626,276 1,480,752 99,206 1,579,958 46, ,708,029 42,370 1,750,399 1,607, ,776,771 (26,372) Change in netassets $ 150, ,386 Interestincom e from m ortgage loansand note receivable decreased $177,298 during the currentyearwhile the interestexpense on bondspayable decreased $127,13].These decreasesare occurring because of the continually decreasing m ortgage loans receivable and the reduction of bondspayable.o theroperating expenses decreased $69,682 from 2000 prim arily due to a decrease in am ortization of issuance costs. The rcsulling increase in netassets of $150,949 ism ainly due lo currentyearintereston investm ents asthe A uthority's currentyearoperating revenues and rece ipts of principalpaym ents on outstanding m ortgage loans and the note receivable w ere used to pay the currentyearoperating expensesand debtservice on the outstanding bonds. 2 (Continued)

5 SH RE VEPO R T H O M E M O R TG A G E A U TH O R ITY (acomponentunitofthecity of Shreveport) M anagem ent'sd iscussion and A nalysis D ecem ber31,2001 D ebta dm inistration AtDecember 31,2001,file Authority had outstanding bonded indebtednessof $17,833,693 as compared to $20,537,935 atd ece m ber31,2000.the currentyearchangesin outstanding bonded indebtednessare the result of scheduled principaland interestpaym ents.in addition to scheduled principaland interestpayments,$590,000 of the SingleFam ily M ortgage RevenueBondsSeriesA and B (1995 issue)werecalled forredemptiou ata red em ption price of 100% of the principalam ountcalled.the bonds,netof any unaecretcd discount,consisted of the follow ing atd ecem ber31: O utstanding D ebt Single Fam ily M ortgage Revenue Bonds (1984Issue) Collateralized M ortgage Refunding Bonds (1988Issue) M ulti-fam ily H ousing Revenue Refunding Bonds(1995Issue) Single Fam ily M ortgage Revenue Refunding Bonds(1995 Issue) , ,180 6,827,668 8,792,755 4,360,000 4,360,000 6,140,000 6,795,000 The bondsin the 1984,1988,and 1995(SingleFamily - Refunding)Issuesare colateralized by aud payable from the incom e,revenues,and receiptsderived by the Authority from fl~e m ortgage loansand the funds and accountsheldunderorpledged to theauthority pursuantto the TrustIndentures.Thebondsin the 1995(M ulti- Family - Refunding)Issuearecolateralized by therevenuesandotheramountsderived by the Authority from the note receivable aud the fundsand accountsestablished underthe TrustIndenture.A creditenhaucerisalso contained in the TrustIndenture forthe 1995 M ulti-fam ily Issue thatguaranteesthatno lossw illbe incurred on the sale of the property should a defaultoccuron the d~btbeing serviced by the investor. On M arch I,2002,$410,000 of the 1995 Single Fam ily M ortgage Reveuue Refunding Bonds SeriesA aud B w ere called forred em ption. C ontacting the A uthority's FinancialM anagem ent Thisfiuaueialreportis designed to provide a generaloverview of the A uthority's financesforallthose w itlau iuterestin the Authority'sfinances.Questionsconcerning any ofthe information provided in thisreportor requests foradditionalfinancialinform ation should be addressed to M r.jam esa.buruett,1400 Y ouree D rive, Shreveport,Louisiana

6 333 TexasStreet,Suite 1900 Shreveport,LA IndependentA uditors'r eport The Board of Trustees ShreveportH om e M ortgage Authority Shreveport,Louisiana: W e have audited filebasicfinancialstatementsofthe ShreveportHomeM ortgage Authority (acomponent unitof the City of Shreveport)asof and forthe,yearended December31,2001,aslisted in the Table of Contents. These com ponent unit basic financial statem ents are the responsibility of tile A ufllority's m anagem ent. O ur responsibility is to express an opinion on fllese com ponent unit basic financial statem entsbased on ouraudit. W e conducted ourauditin accordance w ith auditing standardsgenerally accepted in the U nited Statesof A m erica and the standards applicable to financialaudits contained in G overnm enta uditing Standards, issued by the ComptrollerGeneralof the United States.Those standardsrequire thatwe plan and perform the audit to obtain reasonable assurance about w hether the financial statem ents are free of m aterial m isstatem ent. A n audit includes exam ining, on a test basis, evidence supporting the am ounts and disclosures in the basic financialstatem ents.a n auditalso includes assessing the accounting principles used and significant estim ates m ade by m ana~,em ent,as w ellas evaluating the overallbasic financial statem entpresentation.w e believe thatourauditprovidesa reasonable basisforouropinion. In our opinion, the com ponent unit basic financial statem ents referred to above present fairly, in all m aterialrespects,the financialposition of the Shreveport H om e M ortgage A uthority asof D ecem ber31, 2001 and the results of its operations and its cash flow s for the year then ended in conform ity w ith accounting principlesgenerally accepted in the U nited States of A m erica, In accordance w ith G overnm enta uditing Standards,w e have also issued ourreport dated M arch 7,2002, on our consideration of the Shreveport H om e M ortgage A nthority's internal control over financial reporting and on ourtests of its com pliance w ith certain provisions of law s,regulations,contracts,and grants.that report is an integralpart of an audit perform ed in accordance w ith GovernmentAuditing Standardsand should beread in conjunction with thisreportin eonsidering theresultsofouraudit. The M anagem ent'sd iscussion and Analysislisted asrequired Supplem entary Inform ation in the Table of Contentsisnota required part of the basic financialstatem ents,butissupplem entary inform ation required by the G overnm entala ccounting Standards Board.W e have applied certain lim ited procedures,w hich consisted principally of inquiresof m anagem entregarding the m ethodsof m easurem entand presentation of the supplem entary inform ation.h ow ever,w e did notauditthe inform ation and expressno opinion on it. M arch 7,2002

7 SH RE VEPO R T H O M E M O R TG A G E A U TItO R ITY (acomponentunitof the City ofshreveport) Statem entof N eta ssets D ecem ber31,2001 A ssets Currentassets: Cash and cash equivalents(note 4) Currentportion of mortgage loansreceivable,net(note 2) A ccrued interestreceivable Investmentsecurities(note 4) O ther assels Totalcurrentassets N oneurrentassets: M ortgage loansreceivable,net01ore2) Notereceivable (note 3) Bond issuance costs,net Totalnoueurrentassets Totalassets Liabilities Currentliabilities: Currentportion of bondspayable,netof unam ortized discount (note 5) Accrued iuterestpayable Totalcurrentliabilities N oncurrentliabilities: Bondspayable,netof unaccreled discount(note5) O ther Totalnoncurrentliabilities Totalliabilities 1,930,320 1,231, , , ,952,120 12,349,506 4,360, ,817, ,063,165 16,016,504 87, ] Restricted fordebtservice U nrestricted Totalnetassets N eta ssets 254,628 2A See accom panying notesto financialstatem ents

8 SH REV EPO R T H O M E M O R TG A G E AU TH O R ITY (a componentunitofthecity of Shreveport) Statem entof Revenues,Expenses,and Changesin N eta ssets Y earended D ecem ber3 I,2001 O perating revenues: lnlereston m ortgage loansand note receivable O ther Totaloperating revenues O perating expenses: Intereston bonds A m ortization of issuance costs A dm inistrative expenses Totaloperating expenses O perating incom e Nonoperating revenues(expenses): Intereston investm ents O ther Totalnonoperating revenue Change in netassets N etassetsatbeginning of year N etassetsalend of year $ 1,530, ,480,752 14, ,318 _._ 104, , See accom panying notesto financialstatem ents

9 SH REV EPO R T H O M E M O R TG A G E AU TItO R ITY (acomponentunitof file City ofshreveport) Statem entof Cash Flow s Y earended D ecem ber31,2001 Cash flow sfrom operating activities: Interestpaym entsreceived on m ortgage loansand note receivable Principalpaym ents received on m ortgage loans and note rec eivable Interestpaid Principalpaym ents on bonds Cash paid foradm inistrative expenses O ilier N etcash provided by operating activities Cash flow s from investing activities lolerestincom e received Purchases of investm ents Proceedsfrom m aturitiesand salesof investm ents N etcash provided by investing activities N etincrease in cash and cash equivalents Cash and cash equivalentsatbeginning of year Cash and cash equivalentsatend of year Reconciliation of operating lossto netcash provided by operating activities: O perating incom e Adjustmentsto reconcile operating income lo netcash provided by operating activities: Principalpaym entsreceived on m ortgage loansand note receivable Principalpaym ents on bonds A m ortization of bond issuance costs Loan discountaccretion N eldecrease in other assets N etincrease in accrued interestreceivable N etdecrease in otherliabilities N etcash provided by operating activities $ 1,379,395 2,838,821 (1,303,000) (2,896,062) (84,035) ,294 (1,531,325) 1, , $ 1,930,320 46,318 2,838,821 (2,896,062) 206,080 (135,980) 4,378 (I8,904) (13,988) $ 30,663 See accom panying notesto financialstatem ents.

10 SH REVEPO RT H O M E :M O RTG A G E AUTH O RITY (a componentunitof the City of Shreveport) N otesto FinancialSlatem ents D ecem ber31,2001 (1) Summ ary ofaccounting Policies (a) Organization The ShreveportHome M ortgage Authority (the Authority)isa tax exemptpublic trust,created pursuantto the Constitution and laws of the State of Louisiana,particularly Chapter2-A of Title 9 of the Louisiana Revised Statutes of 1950,as am ended,and the TrustIndenture,dated O ctober 24, 1978,w ith the City of Shreveport,Louisiana,asbeneficiary.The Authority can transferexcesscash to the City of Shreveport.Pursuantto the TrustIndenture,the Authority isauthorized to undertake variousprogram s to assistin the financing of housing forpersonsof low to m oderate incom e in the City of Shreveport.The A uthority isa eom ponentunitof the City of Shreveport. The A uthority began operations on Septem ber 14,1979 and has since been involved in num erous bond issues("issues")with the following issuesstilloutstanding: O riginal am ount N ovem ber20,1984 July 28,1988 M arch 14,1995 D ecem ber 7,1995 Single Fam ily M ortgage Revenue Bonds $ 11,250,000 (1984 Issue) Collateralized M ortgage Refunding Bonds 44, 111,177 (1988 Issue) M ulti-fam ily ltousing Revenue Refunding 4,435,000 Bonds(1995Issue) Single Fam ily M ortgage Revenue R efunding 9,450,000 Bonds(1995Issue) Bonds and other obligations issued underthe provisions of the TrustIndenture are not a debt or liability of the State of Louisiana,the City of Shreveport,orany politicalsubdivision. (b) Basisof Presentatlon The accounts of the A uthority are organized by issue,each of which is considered a separate accounting entity. The operations of each issue are accounted for w ith a separate set of selfbalancing accounts that com prise its assets, liabilities,net assets, revenues,and expenses. The follow ing fund typesare utilized by the A uthority: M ortgage Purchase Program Funds --These funds are used to accountfor the proceeds from m ortgage revenue bonds,the debtservice requirem entsof the bonds,and the related m ortgage loans forhousing in the City of Shreveport. (Continued)

11 SH REV EPO RT llo M E I~IORTG AG E AUTH ORITy (acomponentunitof thecity of Shreveport) N otesto FinancialStatem ents D ecem ber31,2001 O perating Funds - These funds are the generaloperating funds of the Issues.A ll incom e and expenses notdirectly attributable to the M ortgage Purchase Program Funds are accounted for in these funds. Bond Fund - In the 1995 M ulti-fam ily Refunding Issue,the Bond Fund isused to accountforthe proceedsfrom the sale of the bonds,principaland interestpaym entson the note receivable,and tile debtservice on the bonds. O perating Account - The Operating Account represents funds owned by the Authority not associated w ith an individualissue.the prim ary source of these fundsisthe sem iannualissuer'sfee paid by certain Issuesto the A uthority,transfersof excessfundsin tile 1988 Issue,and intereston loans received in the refunding of tile 1979 Issue and investm ent incom e.paym ents from this accountare m ade to coverexpensesof the A uthority notprovided forunderany of the variousbond indentures. Interestearned on the investm entsand m ortgage loansin the M ortgage Purchase Program Fundsis initially accounted for in those funds.the interest is then transferred to the respective O perating Fund w hen collected.to the extentm oniesare notavailable from the principalpaym entsreceived on the m ortgage loans,the O perating Funds transferm oniesto the M ortgage Purchase Program Funds in am ountssufficientto pay allinterestand principalon the outstanding bonds. (c) Basis of,4ccounting The A uthority uses the accrualm ethod of accounting w hereby expenses are recognized w hen the liability is incurred,and revenuesare recognized w hen earned.the A uthority isaccounted foron a flow of econom ic resources m easurem entfocus.w ith this m easurem ent focus,allassets and all liabilitiesassociated w ith the operation of the A uthority are included on the statem entof netassets. The operating statementspresentincreases(revenues)and decreases(expenses)in netassets,q'he Authority applies all applicable Govermnental Accounting Standards Board (GASB) pronouncem ents in accounting and reporling for itsproprietary operations asw ellas the follow ing pronouncem ents issued on or before N ovem ber 30,1989:FinancialA ccounting Standards Board Stalem enls and Interpretations,A ccounting Principles Board opinion,s,and A c ounting Research Bulletins(unlessthose pronouncementsconflictwith orcontradictgasb pronouncements). Tile Authority distinguishes operating revenues and expenses from nonoperating item s.o perating revenuesand expenses generally resultfl'ot~ providing servicesin connection w ith the Authority's ongoing operations. The principal operating revenues of tile A uthority are interest charges on m ortgage loansand the note receivable."]?he A uthority also recognizesasoperating revenue annual fees(i.e.,foreclosurefees,issuerfees)to recovercostsassociated with administering tile mortgage loansand note receivable and foreclosures. 9 (Continued)

12 SH REVEPORT H O M E M O R TG A G E AUTH O RITY (a componentunitof the City of Shreveport) N otesto FinancialStatem ents D cco m ber31,2001 (d) (e) InvestmentSecurities Investm ents are reported atfair value on thc balance sheet.fairvalue is the am ountatw hich a financialinstrum entcould bc exchanged in a currenttransaction betw een w illing partics,otherthan in a forced or liquidation sale. Bond Issuance Costsand Bond Discount Costs related to issuing bondsare capitalized,bondsare presented netof discounts related to the sale of bonds.bond costsand discountsare anaortized on file interestm ethod overthe term of the bonds. The bond issuance costforthe 1995 M ulti-fam ily Issue w aspaid by the ow nerof the property. 09 M ortgage Loan Discount D iscountson the 1984 and 1988 m ortgage loansare am ortized on the interestm ethod overthe term s of the loans. (g) ProvisionsforLoan Losses Provisionsforlosseson loansand accrued interestare charged to earningsw hen itisdeterm ined that the investm ent in applicable assets is greater than their estim ated net realizable value. A t D ecem ber31,2001,estim ated losseson loansw ere notm aterial. (it) Cash and Cash Equivalents Forpurposesof the statem entof cash flows,cash and cash equivalentsare defined asbeing cash in bank depositaccounts and short-term investm entsw ith an originalm aturity of ninety days orless. Investm ents in guaranteed investm entcontracts and U.S.governm entsecurities are excluded from cash and cash equivalents although such investm ents nmy m ature w ithin ninety days of their purchase. (2) M ortgage LoansR eceivable M ortgage loansforthe 1984 Issue,1988 Issue,and the O perating A ccountare collateralized by firstliens on single fam ily residentialproperty.the m ortgage loanshave an aggregate effective interestrate to the Authority of 9.67% forthe 1988 Issue,10.68% forthe 1984 Issue,and 7.00% forthe m ortgage loansheld in the Operating Account.M ortgage loans forthe 1995 Issue (Single Family - Refunding)represent mortgage pass-through certificates(gnm A andfnm A certificates)backed by certain qualifying mortgage loansforsingle fam ily residences. The 1984 Issue and Operating A ccount m ortgage loans have a face value of $624,761 and $53,855, respectively,atdecember31,2001.the 1988 Issue m ortgage loanshave a face value of $8,330,181which isreduced by unamortized discountof $1,265,989 atdecember31, (Continued)

13 SItR EV EPO R T H O M E M O R TG A G E A U TH O R ITY (acomponentunitof thecity of Shreveport) N otesto FinancialSta tem ents D ecem ber31,2001 A llloanspurchased by the A uthority underthe 1988 Issue and the O perating A ccountare required to be insured by FH A orguaranteed by V A.A dditionally,each m ortgage loan in these issues is insured under m aster policies of supplem ental m ortgage insurance obtained from M ortgage G uaranty Insurance Corporation.These masterpoliciesinsure,subjectto certain conditions,each mortgage loan owned by the A nthority againstlosses nototherw ise insured,to a m axim um of 10% of the aggregate initialprincipal balance of allm ortgage loans originated.the conventionalloansunderthe 1984 Single Fam ily lssne arc insured underm asterpolicies of m ortgage poolinsurance obtained from G E CapitalM ortgage insurance Corporation to a m axim um of 15% of the aggregate initialprincipalbalancesof the loans,asw ellasbeing fully insured w ith variousapproved private m ortgage insurersforthe unam ortized principalbalance of the loan and accrued and unpaid interest. Asthe principaland interestpaymentson the GNM A and FNM A certificatesof the 1995 Issue (Single Fam ily - Refunding)are fully guaranteed by the GNM A and FNM A,the Authority isnotresponsible for mortgage loan insurance fortile mortgage loansin the 1995 Issue (Single Family - Refunding).The carrying and marketvaluesof the1995issue(singlefamily - Refunding)GNM A and FNM A certificates at1)ece mber31,2001were $5,838,297 and $5,891,751,respectively. (3) Note Receivable The note rece ivable isa $4,360,000 note in the 1995M ulti-fam ily Refunding Issue due from an investor m aturing Septem ber 1, 2025.The note receivable bears interest at a fixed rate of 6.4%.The nota is eollateralized by land,buildings,and fixtures of the investor.the bonds payable in the 1995-A M ulti- Fam ily Refunding Issue are nota generalobligation debtor liability of the A uthority.security forthe bonds is the note receivable.in addition,a policy of indem nity is in place to covernonpaym entof the bonds in the event of default by the investor.because the bonds are not a generalobligation of the A uthority,failure to collectallof the note w ould ultim ately lead to a corresponding reduction in am ounts paid to file bondholder.therefore,no provision has been m ade to record an allow ance for doubtful accounts. (4) Cash and Cash Equivalentsand InvestmentSecurities Investm ents,including cash equivalents,consistof securities as spce ifieally called forunderterm sof tile Trust Indentures; these include variable rate notes, U.S. Treasury bonds, U.S. Treasury bills, U.S. governm entagencies,certificatesof deposit,and investm entagreem ents. (Continued)

14 SItREV EPO R T H O M E M O R TG A G E A U TH O R ITY (acomponentunitof thecity ofshreveport) N otesto FinancialStatem ents D ecem ber31,2001 Cash and cash equivalentsinclude the follow ing atd ecem ber31,2001 O ne G roup U.S.Treasury SecuritiesM oney M arketfund 1984 Issue(SingleFamily) 1988 Issue (Refunding) O perating A ccount Fidelity Treasury CapitalReserve Fund 1995Issue(M ulti-family - Refunding) Totalcash and cash equivalents 27, , ,638, ,970 $ 1,930,320 The above cash equivalentsare notinsured orcollateralized hw estm entsecuritiesare asfollow s C arrying am ount Fair value 1984 Issue (Single Fam ily): B ank O ne,m Bank Investm enta greem ents 81,691 81, Issue(Single Family - Refunding): Bayerische Landesbank Investm entagreem ents 529, , The Authority's investm ents are categorized to give an indication of the levelof risk assum ed by the A uthority atyearend.a llinvestm ents are Category 2 investm ents.category 2 includes uninsured and unregistered investm entsforw hich tile securitiesare held by the trustee in the A uthority'snam e. 12 (Cominued)

15 SH R EV EPO R T H O M E M O R TG A G E A U TH O R ITY (acomponentunitof thecity ofshreveport) N otesto Fin~,neialStatem ents D ecem ber31,2001 (5) BondsPayable Bondspayable atd ecem ber31,2001consistof: 1995 Issue (Single Family - Refunding)- Single Family M ortgage Revenue Refunding Bonds, 1995A dated D ecem ber 1, $545,000 Current InterestBonds due serially each August I until 2006,atinterestratesof 4.25% to 5.2% ;$5,450,000 Term Bondsdue August2028 at6.0% interest;$800,000 Term Bondsdue August1, 2013,at5.2% interest $ Issue (M ulti-family - Refunding) - M ulti-family Housing Revenue Refunding Bonds,Series 1995A dated M arch 14, $4,360,000 CurrentInterestBondsdue Septem ber1, Issue(Refunding)- TaxableCollateralized M ortgage Refunding B onds, Series 1988-A dated July 1,1988,due in m onthly installmentsof approxim ately $259,00D including interest(based on the paymentsof the mortgage loan pooleolateralizing theissue)at an interestrate of 6.8% U naecreted discount 4,360,000 8,113,743 (1,286,075) Issue (SingleFam ily)- SingleFamily M ortgage Revenue Bonds, 1984 Series A dated N ovem ber 1, 1984;Com pound InterestTerm Bondsdue M ay 1,2016,atan approxim ate yield of 11.25% 2,460,000 U naecreted discount Totalbondspayable,netofunacereted discount Lesscurrentportion of bondspayable,netof unacereted discount Long-term bondspayable,netof unaccreted discount (1,953,975) ,833, $ (Continued)

16 SH REVEPO R T H OM E M O RTG AG E AUTtIO RITY (a com ponentunitof the City of Shreveport) N otesto FinancialStatem ents D ecem tler31,2001 A sum m ary of scheduled bond m aturitiesand interestfollow s: ofdollars % Total Bonds: 1984Single Family Issue 1988Refunding Issue 1995M ulti-l~'amily Refunding Issue 1995Single Fam ily Refunding Issue lolalprincipalon bonds Less:unam0rlizcd discount Netprincipal lnletesl 4,360 6, ,074 2,150 2,313 2,489 1, ,954 2, , , ,450 Total $ 34,720 2,945 2,932 2,920 1, ,151 4,020 3,030 7,111 6,104 The 1995Issue (M ulti-family - Refunding)may beredeemed in whole orin parton orafterdecember1, 2005,upon notice,ata redem ption price begim ling at102% and subsequently declining to par.the 1995 Issue(Single Family - Refunding)may beredeemed,in whole orpart,atpar,afterm arch 1,2006.Certain m andatory redem ption provisionsare described in the Bond Indenturesw hich require redem ption ata price equalio the principaland accrued interestto theredem ption date.for the 1984 Issue,there are no optional redem ption features. Paym ents of principalon the 1988 Issue are based on paym ents of the m ortgage poolcollateralizing the Issue.Prepaym ents of these m ortgage loans are used to prepay principalon the 1988 Issue.A dditionally, the bondsare subjectto redemption atthe option of thebondholderon thirty days'notification to the A uthority.the redem ptiou value w ould be the lesserof the then outstanding principaland iuterestolthe bondsorthe fairm arketvalue of the m ortgage loans.the Trustee isauthorized to actatfile direction of the bondholderto sellthe m ortgage loanson the redem ption date. The bondsin the 1984,1988,and 1995 (Single Family - Refunding)Issuesare co llaleralized by and payable from the income,revenues,and receipt.';derived by the Authority from the m ortgage loansaud the fundsand acco untsheld underorpledged to the A uthority pursuantto the Trustlndeltures.The bondsin the 1995(M ulti-family - Refunding)Issue are eollateralized by fine revenuesand otheramountsderived by the Authority from the note rece ivable and tbe funds and accounts established under the Trust Indenture.A creditenhancerisalso contained in the TrustIndenture thatguaranteesthatno lossw illbe incurred on the sale of the property should a defaultoccuron the debtbeing serviced by the investor. (Continued)

17 SIIREVEPOR T H OM E M OR TGA GE A UTH ORITy (a com ponentunitof the City of Shreveport) N otesto FinancialStatem ents D ecem ber31,2001 There are a num berof lim itationsand restrictionscontained in the variousbond indentures.the Authority isin com pliance w ith allsignificantlim itationsand restrictions. On M arch 14,1995,theAuthority issued $4,435,000 in bonds,the 1995Issue (M ulti-family - Refunding), to advance refund the $4,360, B Issue bearing interestat6.4% and pay part of the issuance costs of the new bonds.the 1983-B Issue bonds are considered defeased and have been rem oved from the A uthorily's finaueialstatem ents.a td ecem ber31,2001,the principaloutstanding on the refunded bonds w as$4,360,000. The 1979 Issue bonds are considered defeased and have been rem oved from the A uthority's financia statem ents.atd ecem ber31,2001,$37,500,000 of bondsin the 1979 Issue are stilloutstanding. (6) Restricted Assets Substantially allam ountsreflected in the statem entof netassetsrepresentassetsin such accountsorfunds designated underthe TrustIndenture foreach Issue to be invested and/orheld forsubsequentdisbursem ent ilsuch m annerand atsuch tim e asspecifically defined in the respective TrustIndenture. A llof tile assetsof the M ortgage Purchase Program Fundsare restricted by,and the use thereof isgovern ed by,the TrustIndentures. The balance atd ecem ber31,2001 of the restricted assets of each fund oraccountestablished underthe respective TrustIndenture and a reconciliation to totalassets by Issue is as follows: 1995 Issue (SingleFamily - Refunding) M ortgage loan aeeount A ccrued interestreceivable Investm ents Totalassetsin restricted funds Plusinterfund receivables Totalrestricted assets Bond issuance costs,net Totalassets 1995 Issue(M ulti-family - Refunding) Totalassets,allrestricted $ 5,838,297 29, ,871, ,110, ,020 $ 6,292,964 4,70% (Continued )

18 SH REVEPO R T H O M E M O R TG A G E A U TH O R ITY (acomponentunitofthecity of Shreveport) N otesto FinancialStatem ents D ecem ber 31, Issue(Refunding) M ortgage loan account A ccrued interestreceivable Reserve funds Lessinterfund payables Totalassetsin restricted funds Totalrestricted assets B ond issuance costs,net $ 7,064,192 59, ,945 7,676,637 (828,528) 6,848, Tota lassets 1984 Issue(SingleFamily) M ortgage loan account A ccrued interestreceivable Reserve fund Less interfund payables Totalassets in restricted funds Totalrestricted assets 624,761 18, ,916 (156,891)._ (7) SegmentInformation The Authority issues separate revenue bonds to finance m ortgage loan program s.a llindividualbond issuesare accounted forin a single fund,butinvestors in those bondsrely solely on the revenue generated by the individualactivities for repaym ent.sum m ary financial inform ation for each issue is presentad below. (Continued)

19 SH R EVEPO R T H O M E M O RTGA G E AUTH O R ITY (a componentunitof the City of Shreveport) N otesto FinancialStatem ents D ecem ber31, Issue Single Family Refunding 1995 Issue M ulti- Family Refunding 19881ssue Refunding 1984 Issue Single Fam ily Operating Accouut Condensed Statem entof NetA ssets Assets: Currentassets Otherassets(primarily mortgageloans/ notereceivable) Totalassets H abilities: Currentliabilities Long4erm liabilities Totalliabilities NetAssets: Restricted Unrestricted Totalnetassets $ 662,947 5,927,310 6,590, ,964 6,090,000 6,292, ,293 $ 297, ,640 4,360, ,012 4,360,000 4,453, ,628 1,786,785 6,021,772 7,808,557 1,767,189 5,147,982 6,915, , , , , , , , ,723,000,651 49,855,050,506,050,506,050,506 Condensed Statem entofr evenues, Expenses,and C hangesin N eta ssets Intereston m ortgage loansand note receivable receivable Otheroperating revenue Intereston bondspayable O theroperating expenses Operating income(loss) Nonoperatingrevenues(expenses): Intereston investments Other Totaltlonope ratiog revenues(expe nses) Change in netassets Netassetsatbeginning of year Netassetsatend of year 21,643 21,643 6, ,298 $ 297, ,040 2,373 (279,040) (3,878) (i,5o5) 790,228 80,097 (769,868) (41,064) 59,393 68,693 (56,349) (4,114) 9,644 23, ,929 9,644 8, ,489 23,875 83, ,118 11,929 20, , , , ,723 3,896 12,792 (21,84o) (5,152 _ ) _ 37,540 37,540 32,388,018,118,050,506 Condensed Statem entofcash Flows Netcash provided (used)by: Operaling ae0vifies Investing activities Netincrease(decrease) $ ]6,046 (16,0461 (20,409) (10,765) 46,835 23,538 70,373 (1],408) 6,132 (5,276) ( ,139 Cash and cash equivalentsalbeginning of year Cash and cash equivalents atend of year 302, , ,916 32,686 27A , ,65 (Continued)

20 SH R EV EPO R T ItO M E M O R TG A G E AU TItO R ITY (a componentunitof the City of Shreveport) N otesto Fin~mcialStatem ents D ecem ber31,2001 (8) Com mitments U nderthe term s of the applicable TrustIndentures,the Authority is required to redeem bonds priorto m aturity w hen balances in certain funds exceed specified levels. The 1988 Issue is redeem able, as described in note 5,based on m ortgage prepaym entsoratthe option of the bondholders. (9) SubsequentEvent On M arch 1,2002,$410,000 of the 1995Single Fam ily M ortgage Revenue Refunding BondsSeriesA and B w ere called forredem ption ata redem ption price of 100% of the principalam ountcalled.

21 333 Texas Street,Suite 1900 Shreveport,LA R eporton Com pliance and on InternalC ontrolo ver FinancialR eporting Based on an A uditof FinancialStatem ents Perform ed in A ccordance W ith G'over#m enta udi#ng Standards The Board of Trustees ShreveportH om e M ortgage A uthority Shreveport,Louisiana: W e haveaudited the statementof netassetsof theshreveporttiomem ortgage Authority (tile Authority),a com ponentunitof the City of Shreveport,asof D ece m be[31,2001and the related statem entsof revenue, expenses,and changes in netassetsand cash flow s forthe yearthen ended,and have issued ourreport thereon dated M arch 7,2002.W e conducted ourauditin accordance with auditing standards generally ac epted in the United States of Am erica and 'the standards applicable to financialaudits contained in G overnm enta uditing Standards,issued by the Com ptrollerg eneralof the U nited States. C om pliance A s partof obtaining reasonable assurance aboutw hetherthe Authority's financialsta tem ents are free of m alerialm isstatem ent,w e perform ed leslsof its com pliance w ith certain provisions of law s,regulations, contracls, and grants, noncom pliance w ith which could have a direct and m aterial effect on tile determ ination of financialstatem entam ounts.h ow ever,providing an opinion on com pliauce w ith those provisionswasnotan objectiveofourauditmid,accordingly,we do notexpresssucl~an opinion.the results of our tests disclosed no instances of noncom pliance that are required to be reported under G overnm enta uditing Standards. InternalC ontrolo ver FinancialR eporting In planning and perform ing our audit,w e considered the A uthority's internal control over financial reporting in orderto determ ine ourauditing proceduresforthe purpose of expressing ouropinion on tile financialstatem ents and notto provide assurance on the internalcx~ntrolover financialreporting.o ur consideration of the internalcontroloverfinancialreporting w ould notnecessarily disclose allm atters in the internalcontroloverfinancialreporting thatm ightbe m aterialw eaknesses.a m aterialw eaknessisa condition in w hich the design or operation of one or m ore of the internalcontrolcom ponents does not reduce to a relatively low levelthe risk thatm isstatem entsin am ountsthatw ould be m aterialin relation to the financialstatem entsbeing audited m ay occurand notbe detected w ithin a tim ely period hy em ployees in the norm alcourse of perform ing theirassigned functions.w e noted no m atters involving the internal controloverfinancialreporting and itsoperation thatw e considerto be m aterialw eaknesses. Thisreportisintended solely forthe inform ation and use of the Board of Trustees,m anagem ent,and the State of Louisiana Legislative A uditorand isnotintended to be and should notbe used by anyone other than tlese specified parties. G LL'P M arch 7,2002

22 333 Texas Street,Suite ~900 Shreveport,LA R eporton C om pliance and on InternalC ontrolo ver FinancialR eporting Based on an A uditof FinancialStatem ents Perform ed in A ccordance W ith G overnm enta uditing Standards The Board of IYustees ShreveporttIom e M ortgage A uthority Shreveport,Louisiana: W e have audited thestatementofnetassetsof the Shreveport Home M ortgage Authority (theauthority),a com ponentunitof the City of Shreveport,asof D ecem ber31,2001and the related statem entsof revenue, expenses,and ebanges in netassetsand cash flow sforthe yearthen ended, and have issued ourreport thereon dated M arch 7,2002.W e conducted ourauditin accordance w ith auditing standards generally accepted in the U nited States of A m erica and the standards applicable to financialaudits contained in G overnm enta uditing Standards,issued by the Com ptrollerg eneralof the U nited States. C om pliance A s par~of oblaiaiug reasonable a~surance aboutwhether the A uthority's financialstatem entsare free of m aterialm isstatem ent,we perform ed testsof itscom pliance w ith certain provisionsof law s, regulations, contracts, and grants, noncom pliance w ith which could have a direct and m aterial effect on the determ ination of financialstatem entam ounts, llow ever,providing an opinion on com pliance w ith tlose provisionswasuotan objective ofourauditmad,accordingly,wedo notexpresssuch an opinion.the results of our tests disclosed no instances of noncom pliance that are required to be repotted under G overnm enta uditing Standards. InternalControlO ver FinancialR eporting In planning and perform ing our audit, w e considered the A uthority's internal control over financial reporting in orderto determ ine ourauditing pro cedures forthe purpose of expressing ouropinion on the financialstatem ents and notto provide assurance on the internalcontrolover financialrepor/ing. O ur consideration of fl~e internalcontroloverfinancialreporting w ould notnecessarily disclose allm attersin the internalcontroloverfinancialreporting thatm ightbe m aterialw eaknesses. A m aterialw eaknessisa condition in w hich the design or operation of one or m ore of tile intern alcontrolcom ponents does not reduce to a relatively low levelthe risk thatm isstatem entsin am ountsthatw ould be m aterialin relatiou to the financialstatem entsbeing audited m ay occurand notbe detected w ithin a tim ely period by em ployees in the norm alcourse of perform ing theirassigned functions.w e noted no m atters involving the internal controloverfinancialreporting and itsoperation thatw e considerto be m aterialw eaknesses. Thisreport isintended solely forthe inform ation and use of the Board of Trustees, m anagem ent,and the State of Louisiana Legislative A uditorand isnotintended to be and should notbe used by anyone other than these specified parties. LL't> M arcia7,2002

23 333 "lexas Street,Suite 1900 Shreveport,IA R eporton C om pliance and on InternalC ontrolo ver FinancialR eporting Based on an A uditof FinancialStatem entsperform ed in A ccordance W ith Governm enta uditing Standards The B oard of Trustees ShreveportH om e M ortgage A uthority Shreveport,Louisiana: W e haveaudited thestatementofnetassetsof the Shreveport HomeM ortgage Authority (theauthority),a com ponentunitof the City of Shreveport,asof D ecem ber31,2001and the related statem entsof revenue, expenses,and changes in netassetsand cash flowsforthe yearthen ended,and have issued ourreport thereon dated M arch 7,2002.W e conducted our auditin accordance w ith auditing standards generally accepted in the U nited States of A m erica and 'the standards applicable to financialaudits contained in G overnm enta uditing Standards,issued by the Com ptrollerg eneralof the U nited States. C om pliance A spart of obtaining reasonable assurance aboutwhetherfile A ufltority's financialstatem entsare free of m aterialm isstatem ent,w e perform ed testsof its;com pliance w ifllcerta in provisionsof law s,regulations, contracts, and grants, noncom pliance w ith w hich could have a direct and m aterial effect on the determ ination of financialstatem entam ounts.h ow ever,providing an opinion on com pliance w ith those provisionswasnotan objective of ourauditand,accordingly,we do notexpresssuch an opinion.the results of our tests disclosed no instances of noncom pliance that are required to be reported under Governm enta uditing Standards. InternalC ontrolo ver FinancialR eporting In planning and perform ing our audit, w e considered the A uthority's internal control over financial reporting in orderto determ ine ourauditing proceduresforthe purpose of expressing ouropinion on the finaneialstatem ents and notto provide assurance on the internalcontrolover financialreporting.o ur consideration of the internalcontroloverfinancialreporting w ould notnecessarily disclose allm atters in the internalcontroloverfinancialreporting thatm ightbe m aterialw eaknesses.a m aterialw eakness isa condition in w hich the design oroperation of one or m ore of the internalcontrolcom ponents does not reduce to a relatively low levelthe risk thatm isstatem entsin am ountsthatw ould be m aterialin relation 1o the financialstatem entsbeing audited m ay occurand notbe detected w ithin a tim ely period by em ployees in the norm alcourse of perform ing their assigned functions.w e noted no m atters involving the internal controloverfinancialreporting and itsoperation thatw e considerto be m aterialw eaknesses. Thisreportisintended solely forthe inform ation and use of the Board of Trustees,m anagem ent,and the State of Louisiana Legislative A uditorand isnotintended to be and should notbe used by anyone other than these specified parlies. M arch 7,2002

24 333 "[exas Street, Suite 1900 Shreveport,LA R eporton C om pliance and on InternalC ontrolo ver FinancialR eporting Based on an A uditof FinancialStatem entsperform ed in A ccordance W ith Governm enta uditing Standards The B oard of Trustees ShreveportH om e M ortgage A uthority Shreveport,Louisiana: W e have audited the statementofnetassetsof theshreveporthomem ortgage Authority (theauthority),a com ponem unitof the City of Shreveport,asof December31,2001and the related statementsof revenue, expenses,and changes in netassets and cash flow s forthe yearthen ended,and have issued ourreport th ereon dated M arch 7,2002.W e conducted ourauditin accordance w ith auditing standards generally aceepted in th e U nited States of A m erica and the standards applicable to financialaudits contained il Governm enta uditing Standards,issued by the Com ptrollerg eneralof the U nited States. C om pliance A spart of obtaining reasonable assurance aboutwheth erthe A uthority'sfinancialstatem entsare free of m aterialm isslatem ent,we perform ed testsof itscom pliance w ith certain provisionsof law s,regulations, contracls, and grants, noncom pliance w ith w hich could have a direct and m aterial effect on tile determination of financialstatem entam ounts,ttow ever,providing an opinion on compliance w ith th ose provisionswasnotan objective ofourauditand,aecordingly,we do notexpresssuch an opiuion.the results of our tests disclosed no instances of noncom pliance that are required to be reported under G overnm enta uditing Standards. InternalC ontrolo ver FinancialR eporting lu planning and perform ing our audit, w e considered the A uthority's internal control over financial reporliag in orderto determ ine ourauditing prneedures for the purpose of expressing ouropinion on th e financialstatem ents and not to provide assurance on the internalcontrolover finaneialreporting.o ur consideration of file internalcontroloverfinancialreporting w ould notnecessarily disclose allm attersin th e internalcontroloverfinancialreporting thatm ightbe m aterialw eaknesses.a m aterialw eakness isa condition in w hich the design or operation of one or m ore of the internalcontrolcom ponents does not reduce to a relatively low levelthe risk thatm isstatem entsin am ountsthatw ould be m aterialin relation to th e financialstatem entsbeing audited m ay occurand notbe detected w ithin a tim ely period by em ployees in the norm alcourse of perform ing theirassigned functions.w e noted no m aters involving th e internal controloverfinancialreporting and itsoperation thatw e considerto be m aterialw eaknesses. Thisreportisintended solely forthe inform ation mad use of the Board of Trustees,m anagem ent,and the State of Louisiana Legislative A uditorand isnotintended to be and should notbe used by anyone other than these specified parties. LL'P M arch 7,2002

25 333 Texas Slreet,Suite 1900 Shreveport,LA R eporton C om pliance and on InternalC ontrolo ver FinancialR eporting Based on an A uditof FinancialStatem ents Perform ed in A ccordance W ith G overnm enta uditing Standards The B oard of Trustees ShreveportH om e M ortgage A uthority Shreveport,Louisiana: W e haveaudited the statementof netassetsof theshreveporthomem ortgage Authority (theauthority),a com ponentunitof the City of Shreveport,asof D ecem ber31,2001and the related statem entsof revenue, expenses,and changes in netassetsand cash flow sforthe yearthen ended,and have issued ourreport lhereon dated M arch 7,2002.W e conducted ourauditin accordance w ith auditing standards generally accepted in the U nited States of A m erica and the standards applicable to financialaudits contained in G overnm enta uditing Standards,issued by the Com ptrollerg eneralof the U nited Slates. C om pliance A s partof obtaining reasonable assurance aboutw hetherthe A uthority's financialstatem ents arc free of m alerialm isstatem ent,we perform ed tesls of its com pliance w ith certain provisionsof law s, rcgulalions, contracts, and grants, noncom pliance w ith w hich could have a direct and m aterial effect on the determ ination of financialstatem entam ounts,llow ever,providing an opinion on com pliance w ith those provisionswasnotan objective of ourauditand,accordingly,we do notexpresssuch an opinion.the results of our tests disclosed no instances of noncom pliance that are required to be reported under G overnm enta uditing Standards. InternalC ontrolo ver FinancialR eporting In planning and perform ing our audit,w e considered the A uthority's internal control over financial reporting in orderto determ ine ourauditing proceduresforthe purpose of expressing ouropinion on the financialstatem ents and notto provide assurance on the internalcontrolover financialreporting.o ur consideration of the internalcontroloverfinancialreporting w ould notnecessarily disclose allm atters in the internalcontroloverfinancialreporting thatm ightbe m aterialw eaknesses.a m aterialw eakness isa condition in w hich the design oroperation of one or m ore of the internalcontrolcom ponents does not reduce to a relatively low levelthe risk thatm isstatem entsin am ountsthatw ould be m aterialin relation to tile financialstatem entsbeing audited m ay occurand notbe detected w ithin a tim ely period by em ployees in the normalcourse of perform ing theirassigned functions.w e noted no m aters involving the internal controloverfinancialreporting and itsoperation thatw e considerto be m aterialw eaknesses. Thisreportis intended solely forthe inform ation and use of the Board of Trustees,m anagem ent,and tile State of Louisiana Legislative A uditorand is notintended to be and should notbe used by anyone other than these specified parties. M arch 7,2002

26 333 "fexas Street, Suite 1900 Shreveport,LA R eporton C om pliance and on InternalC ontrolo ver FinancialR eporting Based on an A uditof FinancialStatem entsperform ed in A ccordance W ith Governm enta uditing Standards Tile B oard of Trustees ShreveportH om e M ortgage A uthority Shreveport,Louisiana: W e have audited tilestatementof netassetsoftheshreveporthomem ortgage Authority (theauthority),a com ponentunitof the City of Shreveport,asof D ecem ber31,2001and the related statem entsof revenue, expenses,and changes in netassetsand cash flow sforthe yearthen ended,and have issued ourreport lhereon dated M arch 7,2002.W e conducted our auditin accordance w ith auditing standards generally accepted in the U nited States of Am erica and the standards applicable to financialaudits contained in G overnm enta uditing Standards,issued by the Com ptrollerg eneralof the U nited States. C om pliance A s part of obtaining reasonable assurance aboutw hetherthe A uthority's financialstatem ents are free of m aterialm isstatem ent,w e perform ed testsof itscom pliance w ith certain provisionsof law s,regulations, co,ltracts, and grants, noneom pliance w ith w hich could have a direct and m aterial effect on the determination of financialstatem entam ounts,ttow ever,providing an opinion on com pliance w ith those provisionswasnotan objectiveof ourauditand,accordingly,we do notexpresssuch an opinion.the results of our tests disclosed no instances of noncom pliance that are required to be reported under G overnm enta uditing Standards. InternalControlO ver FinancialR eporting In planning and perform ing our audit,w e considered the A uthority's internal control over financial reporling in orderto determ ine ourauditing proceduresfor the purpose of expressing ouropinion on the financial statem ents and not to provide assurance on the internal control over financial reporting.o ur consideration of ll~e internalcontroloverfinancialreporting w ould notneeessarily disclose allm atters in the internalcontroloverfinancialreporting thatm ightbe m aterialw eaknesses.a m aterialw eakuess isa condition in w hich the design oroperation of one orm ore of the internalcontrolcom ponents does not reduce to a relatively low levelthe risk thatm isstatem entsin am ountsthatw ould be m aterialin relation to the financialstatem entsbeing audited m ay occurand notbe detected w ithin a tim ely period by em ployees in the norm alcourse of perform ing theirassigned funetions.w e noted no m atters involving the internal controloverfinancialreporting and itsoperation thatw e considerto be m aterialw eaknesses. Tiltsreport isintended solely forthe inform ation and use of the Board of Trustees,m anagem ent,and tile State of Louisiana Legislative A uditorand isnotintended to be and should notbe used by anyone other than these specified parties. LL"P M arch 7,2002