$20,735,0000. consisting of

Transcription

1 NEW ISSUE Book-Entry Only RATING: A- S&P S SEE RATING herein. In the opinionn of Jones Walker LLP, Cincinnati, Ohio, Bond Counsel to the Issuer (as defined below), under existing laws, regulations, rulings and judicial decisions and assuming continuing compliance by the Issuer and the Borrower (as defined below) with their respective Covenants and the Tax Agreements (both terms defined below), interest on the Bonds (as defined below) is excludible from gross income for federal income tax purposes under Section 103(a) of the Internal Revenue Code of 1986, as amended (the Code).. In the further opinion of Bond Counsel, interest on the Bonds is an item of tax preference under Section 57(a) of the Codee in computing the federal alternative minimum tax for individuals and corporations. In the opinion of Bond Counsel, interest on the Bonds is not exempt from Wisconsin income taxes or franchise tax. Ownership of the Bonds may result in certain collateral federal income tax consequencess to certain Bondholders. See TAX MATTERS herein. $20,735,0000 Public Finance Authority Multifamily Housing Revenue Bonds (Forest Cove Apartments) consisting of $20,095,000 Seriess 2014A $640,000 Taxable Series 2014A-T Dated: Date of Delivery Due: As shown on inside front cover The Public Finance Authority (the Issuer ) is issuing its $20,095,000 Multifamilyy Housing Revenue Bonds (Forest Cove Apartments), Series 2014A (the( Series 2014A Bonds or the Tax-Exempt Bonds ), and its $640,000 Multifamily Housingg Revenue Bonds (Forest Cove Apartments), Taxable Series 2014A-T (the( Series 2014A-T Bonds and together with the Series 2014A Bonds, the Bonds ). Interest on the Bondss is payable on February 1 and August 1 of each year, commencing August 1, The Bonds are being issued only as fully registered bonds in the denominations of $5,000 each and integral multiples thereof and will be issued in book-entry form only under a global book-entry system operated by The Depositoryy Trust Company, New York, New York ( DTC ), and purchasers will not be entitled to receive certificates representing their Bonds for so long as the global book-entry system is in effect. See THE BONDS-Book Entry-Only System. Principal of, premium, if any, and interest on the Bonds will be paid by The Bank of New York Mellon Trust Company, N.A.., as Trustee (the Trustee ) directlyy to DTC, as the registered owner thereof. Any purchaser as a beneficial owner of a Bond must maintain an account with a broker or dealer who is, or acts through, a DTC D Participant to receive payment of the principal of and interest on such Bond. The Bonds are subject to redemption prior to maturity as more fully described herein. The Bonds are being issued pursuant to and secured by a Trust Indenture dated as of February 1, 2014 (the Indenture ) between the Issuer and the Trustee. The proceeds of the Bonds will be loaned to GMF-Forest Cove, LLC (the Borrower ) to finance the cost of the acquisition, renovation and equipping of a multifamily rental housing Project located in Atlanta, Georgia (the Project ), fund a Debt Service Reservee Fund for the Bonds and pay certain costs of issuance of the Bonds. THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLEE SOLELY FROM FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE INDENTURE AND, EXCEPT FROM SUCH SOURCE, NONE OF THE ISSUER, ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON. THE BONDS DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS, NOR THEE FAITH AND CREDIT OF THE ISSUER, SHALLL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THEE BONDS. THE ISSUER HAS NO TAXING POWER. INVESTMENT IN THE BONDS INCLUDES A DEGREE OF RISK ANDD EACH PROSPECTIVE INVESTOR SHOULD CONSIDER ITS I FINANCIAL CONDITION AND THE RISKS INVOLVED TO DETERMINE THEE SUITABILITY OF INVESTING IN THE BONDS. SEE RISK FACTORS AND INVESTMENT CONSIDERATIONS HEREIN. The Bonds are payable solely from and are secured by a pledge and assignment of the Trust Estate (ass defined in the Indenture), including (i) Loan Payments made by the Borrowerr pursuant to the Loan Agreement dated as of February 1, 2014, amongg the Issuer, the Borrower and the Trustee (the Loan Agreement ), (ii) the Loan Agreement, the Note, the HAP Assignment, the Collateral Assignment of Management Agreement, thee Mortgage and the Land Use Restriction Agreement (as defined in the Indenture) (except for Reserved Rights of the Issuer), (iii) all moneys and securities from time to time held by the Trustee under the terms of the Indenture (except as specifically set forth therein), and (iv) any and all other real and personal property from time to time thereafter by delivery or by writing of any kind, pledged as and for additional security for the Bonds pursuant to the Indenture. The Loan Agreement is secured by the Mortgage, whichh includes a pledgee of Project Revenues (as defined in the Indenture). See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS herein. The Bonds are offered when, as, and if issued by the Issuer, subject to prior sale, withdrawal or modification of the offer without notice and subject to the approval of legality by Jones Walker LLP, Cincinnati, Ohio, Bond Counsel. Certain legal matters will be passed upon for the Issuer by its counsel, Eichner, Norris & Neumann, PLLC, Washington DC; for the t Borrower and the Sole Member by Glankler Brown, PLLC, Memphis Tennessee and their local counsel Taylor, Feil, Harper, Lumsden & Hess, P.C., Atlanta, Georgia; for the Issuer by its disclosure counsel, Jones Walker LLP, Cincinnati, Ohio and for the Underwriter by Jones Walker L.L.P., Baton Rouge, Louisiana. It is expected that delivery of the Bonds will be made against payment therefor through the facilities of DTC on or about February 18, This cover page contains limited information for reference only. It is not a summary of the issue. The entire Official Statement, including the Appendices, must m be read to make an informed investment decision. Date: February 7, 2014

2 MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES SERIES 2014A BONDS Maturity Date Principal Amount Interest Rate Price CUSIP February 1, 2024 $1,740, % % 74441X AJ8 February 1, ,605, X AK5 February 1, ,310, X AL3 February 1, ,505, X AM1 February 1, ,190, X AN9 February 1, ,745, X AF4 SERIES 2014A-T BONDS Maturity Date Principal Amount Interest Rate Price CUSIP February 1, 2017 $640, % 99.00% 74441X AQ2

3 The Bonds are subject to optional and mandatory redemption prior to maturity, which redemption may be at par, as described herein. The Bonds have not been registered under the Securities Act of 1933, and the Indenture has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any state in which it shall be unlawful for such person to make such offer, solicitation, or sale. No dealer, broker, salesman, or other person has been authorized by the Borrower or the Issuer to give any information or to make any representation with respect to the Bonds, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the Borrower or the Issuer. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale. The information set forth herein has been obtained from the Borrower and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Borrower or the Issuer. The information regarding DTC has been obtained from DTC, but is not guaranteed as to accuracy or completeness by the Borrower. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement. This Official Statement does not constitute a contract between the Borrower or the Underwriter and any one or more of the purchasers or registered owners of the Bonds. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by Standard & Poor s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The Bank of New York Mellon Trust Company, N.A., as Trustee, has not provided, or undertaken to determine the accuracy of, any of the information contained in this Official Statement and makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information, (ii) the validity of the Series 2014 Bonds, or (iii) the tax-exempt status of the interest on the Series 2014A Bonds. This Official Statement contains forward-looking information within the meaning of the federal securities laws. The forward-looking information includes statements concerning the Borrower s outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. Forward-looking information and statements are subject to many risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. These risks and uncertainties include the availability and amount of governmental reimbursements, appropriations, the competitive environment and related market conditions, operating efficiencies, access to capital, the cost of compliance with environmental and health standards, litigation and other risks and uncertainties described herein under RISK FACTORS AND INVESTMENT CONSIDERATIONS. Readers are cautioned not to place undue reliance on forward-looking statements because actual results may differ materially from those expressed in, or implied by, the statements. Any forward-looking statement made in this Official Statement speaks only as of the date of such statement, and the Borrower and the Issuer undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. CUSIP numbers have been assigned by an independent company not affiliated with the Issuer, the Borrower or the Underwriter and are included solely for the convenience of the holders of the Bonds. None of the Issuer, the Borrowers or the Underwriter are responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the Bonds.

4 THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

5 TABLE OF CONTENTS INTRODUCTORY STATEMENT... 1 THE BONDS... 4 General Description... 4 Transfer and Exchange of the Bonds... 5 Book-Entry-Only System... 5 Revision of Book-Entry-Only System... 7 Mandatory Redemption of Bonds... 7 Optional Redemption of Bonds... 7 Mandatory Sinking Fund Redemption... 7 Selection of Bonds to be Redeemed... 9 Notice of Redemption... 9 Payment of Redemption Price... 9 No Partial Redemption After Default SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Limited Obligations of Issuer Repayment of Loan The Mortgage Assignment of Housing Assistance Payments Operation of the Project Rate Covenant Debt Service Reserve Fund Operating Fund Operations and Maintenance Reserve Fund Insurance and Tax Escrow Fund Repair and Replacement Fund Administration Fund Surplus Fund No Credit Enhancement Facility Other Covenants of the Borrower THE ISSUER Formation and Governance Powers Local Approval State Pledge Board of Directors THE BORROWER AND THE PROJECT The Borrower The Sole Member The Project HAP Contract The Asset Manager Prior Operating History Occupancy Pro Forma Financial Projection Environmental Assessment Physical Needs Assessment Project Regulation Insurance APPRAISAL SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM The HAP Contract Eligible Tenants Page i

6 Adjustments in Contract Rents Abatement of Housing Assistance Payments Default; Remedies upon Default Possible Changes to Section 8 Program ESTIMATED SOURCES AND USES OF FUNDS FORWARD-LOOKING STATEMENTS RISK FACTORS AND INVESTMENT CONSIDERATIONS Limited Obligations of Issuer Limited Repayment Obligations of Borrower; Security for Repayment The Borrower and Related Parties; Conflicts of Interest Future Project Revenues and Expenses Risks of Real Estate Investment Marketing and Management Effect of Increases in Operating Expenses Housing Assistance Payment Risks Appraisal Financial Projections Limitation on Acceleration of the Bonds Risk of Early Redemption Risk of Loss Upon Redemption Specific Tax Covenants of Borrower and Rental Restrictions Incurrence of Additional Indebtedness Taxation of the Series 2014A Bonds Federal Income Tax Matters; 501(c)(3) Status of Sole Member Possible Consequence of Tax Compliance Audit Debt Service Reserve Fund Bankruptcy of the Borrower Enforceability of Remedies; Prior Claims Secondary Market and Prices Credit Ratings Environmental Conditions Insurance; Uninsured Losses Other Possible Risk Factors Summary LITIGATION Issuer Borrower APPROVAL OF LEGAL MATTERS TAX MATTERS Federal Income Taxes Certain Federal Tax Consequences RATING UNDERWRITING CONTINUING DISCLOSURE MISCELLANEOUS Signature Page... S-1 APPENDIX A DEFINITIONS OF CERTAIN TERMS APPENDIX B SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS APPENDIX C FORM OF BOND COUNSEL OPINION APPENDIX D PRO FORMA FINANCIAL PROJECTIONS APPENDIX E ACCOUNTANT S REPORT ii

7 OFFICIAL STATEMENT relating to the original issuance of Public Finance Authority $20,735,000 Multifamily Housing Revenue Bonds (Forest Cove Apartments), Series 2014 CONSISTING OF Public Finance Authority $20,095,000 Multifamily Housing Revenue Bonds (Forest Cove Apartments), Series 2014A and Public Finance Authority $640,000 Multifamily Housing Revenue Bonds (Forest Cove Apartments), Taxable Series 2014A-T INTRODUCTORY STATEMENT This Official Statement, including the cover page and the Appendices hereto, is provided to furnish information in connection with the original issuance by the Public Finance Authority (the Issuer ) of its $20,095,000* Multifamily Housing Revenue Bonds (Forest Cove Apartments), Series 2014A (the Series 2014A Bonds or the Tax-Exempt Bonds ), and its $640,000* Multifamily Housing Revenue Bonds (Forest Cove Apartments), Taxable Series 2014A-T (the Series 2014A-T Bonds and together with the Series 2014A Bonds, the Series 2014 Bonds or the Bonds ). The Bonds are to be issued pursuant to the provisions of of the Wisconsin Statutes, as amended, and an Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority, dated as of September 28, 2010, which the Attorney General of the State of Wisconsin has determined to be in proper form and compatible with the laws of the State of Wisconsin, all as now in effect and as it may from time to time hereafter be amended or supplemented (the Act ), Resolution No of the Issuer approved on April 10, 2013 and a Trust Indenture dated as of February 1, 2014 (the Indenture ), between the Issuer and The Bank of New York Mellon Trust Company, N.A., Indianapolis, Indiana, as Trustee (the Trustee ). This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and Appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of Bonds to potential investors is made only by means of the entire Official Statement. For the definitions of certain other terms used in this Official Statement and not otherwise defined herein, see APPENDIX A DEFINITIONS OF CERTAIN TERMS hereto. The Bonds will be issued in the amounts, will be dated, will bear interest at the respective rates and will be payable on the dates and will mature on the respective dates set forth on the inside cover page of this Official Statement. The Bonds are subject to redemption as described herein under the caption THE BONDS Mandatory Redemption of Bonds; Optional Redemption of Bonds; and Mandatory Sinking Fund Redemption. For a more complete description of the Bonds, see THE BONDS herein. The Bonds are being issued by the Issuer to make a loan to GMF-Forest Cove, LLC a Tennessee limited liability company (the Borrower ), whose sole member is GMF-Preservation of Affordability Corp. (the Sole Member ), a Tennessee not for profit corporation which has been determined to be exempt from income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the Code ). The Loan will be made pursuant to a Loan Agreement dated as of February 1, 2014 (the Loan Agreement ), among the Issuer, the Borrower and the Trustee, and will be used to (i) finance the cost of the acquisition, renovation and equipping by the Borrower of a 396-unit Section 8 assisted multifamily rental housing project located in Atlanta, Georgia (the Project ), including the building, furniture, fixtures and equipment comprising such facility and including the real

8 property upon which such building and other items are located, (ii) pay the costs of issuance of the Bonds, and (iii) fund a debt service reserve fund for the Bonds. See the caption SECURITY AND SOURCES OF PAYMENT FOR THE BONDS and ESTIMATED SOURCES AND USES OF FUNDS. The Borrower is obligated under the Loan Agreement to make payments (the Loan Payments ) in such amounts and at such times as will be sufficient to pay, when due, the principal of, premium, if any, and interest on the Bonds as well as pay certain other fees and expenses in connection with the Bonds. As evidence of its obligations to make the Loan Payments with respect to the Bonds the Borrower will execute and deliver to the Trustee a Promissory Note (the Note ). The Borrower s obligations under the Note and the Loan Agreement will be secured by (i) a Deed to Secure Debt, Assignment of Leases and Rents and Security Agreement (the Mortgage ), dated as of February 1, 2014, from the Borrower to the Trustee for the benefit of the Holders of the Bonds, which document creates a first priority mortgage lien on, and security interest in, the Project and pledge of Project Revenues (as defined herein) and other property as described in the Mortgage, subject only to certain Permitted Encumbrances identified therein and (ii) an Assignment of Housing Assistance Payments Contract and Payments (the HAP Assignment ) irrevocably pledging and assigning certain rights and interest under the HAP Contract (as defined below) from the Borrower to the Trustee. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS The Mortgage, and Assignment of Housing Assistance Payments herein. The Bonds are secured by the Trust Estate created in the Indenture which includes all right, title and interest of the Issuer in and to (i) Loan Payments pursuant to the Loan Agreement, (ii) the Loan Agreement, the Note, the Land Use Restriction Agreement (as defined below) and the Mortgage (except for Reserved Rights of the Issuer), (iii) the HAP Assignment, and the Collateral Assignment of Management Agreement, (iv) all moneys and securities from time to time held by the Trustee under the terms of the Indenture (except as specifically set forth therein), (v) any and all other real and personal property from time to time thereafter by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred as and for additional security for the Bonds by the Issuer or by anyone on its behalf or with its written consent to the Trustee, which is thereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms of the Indenture as additional security for the Bonds and (vi) all of the right, title and interest of the Issuer in and to all of the proceeds of (i) through (v) above. The Loan Agreement is secured by the Mortgage, which includes a pledge of Project Revenues (as defined in the Indenture). See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS herein. Pursuant to the provisions of Section 8 of the United States Housing Act of 1937, as amended (the U.S. Housing Act ), the United States of America acting through the Department of Housing and Urban Development ( HUD ) and the Georgia HAP Administrators, Inc. (the Administrator ) have entered into a Housing Assistance Payments Basic Renewal Contract (Multi-year Term) (the HAP Contract ) with GMF Forest Cove, LLC, effective as of April 18, 2005 for a term of eighteen (18) years and four (4) months, relating to the Project. Subject to the terms of the HAP Contract, the Borrower is entitled to receive certain payments from HUD ( Housing Assistance Payments ) with respect to all of the Project units (the Section 8 Units ) occupied by low-income families eligible to receive rental assistance under Section 8 of the U.S. Housing Act. See SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM. Under the HAP Assignment, the Borrower will provide for the Housing Assistance Payments under the HAP Contract to be paid directly to the Trustee, or to a depository account controlled by the Trustee, in accordance with the Indenture. The amount of the Housing Assistance Payments equals the difference between (a) rents permitted by the HAP Contract ( Contract Rents ) for Section 8 Units and (b) that portion of the rent paid by tenants, up to the maximum aggregate annual amount established by the HAP Contract (which amount may be exceeded under certain circumstances and may be increased or decreased by HUD pursuant to the HAP Contract). The tenant-paid portion of Contract Rents (the Tenant Rents ) is limited to 30% of the tenant s adjusted gross income. Contract Rents are established by HUD and are adjusted at least annually. See SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM. The HAP Contract is currently scheduled to expire on August 31, 2023 or upon the happening of certain events, at which time a substantial portion of the Bonds is expected to be outstanding. There is no assurance that the HUD will extend the term of the HAP Contract beyond August 31, 2023 or that upon the expiration of the HAP Contract any other HUD subsidy program will be available to the Borrower or the Project. See the captions SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM and RISK 2

9 FACTORS AND INVESTMENT CONSIDERATIONS Housing Assistance Payments Risk Scheduled Termination of Housing Assistance Payments herein. Termination of the HAP Contract may make it more difficult for the Borrower to continue to comply with the Land Use Restriction Agreement (as hereinafter defined) which is necessary to maintain the exclusion from gross income for federal income tax purposes of interest paid on the Series 2014A Bonds. See RISK FACTORS AND INVESTMENT CONSIDERATIONS Taxation of Series 2014A Bonds herein. Effective February 1, 2014, the Borrower will enter into a new management agreement (the Management Agreement ) with The Columbia Property Group, Ocean Springs, Mississippi (the Manager ). The Borrower s obligations under the Loan Agreement, the Note and the Mortgage are limited, nonrecourse obligations and the Borrower has no obligation to make payments of amounts due under the Loan Agreement except from Project Revenues and from amounts held in the Funds and Accounts created under the Indenture. Aside from these sources of payment and the security interests created by the Mortgage, no other revenues or assets of the Borrower will be available for the payment of, or as security for, the Bonds. The right of the Issuer to collect and receive payments under the Loan Agreement has been assigned to the Trustee under the Indenture for the benefit of the Holders. No assets or other revenues of the Issuer are or will be available for the payment of, or as security for, the Bonds. The Series 2014A Bonds will be issued as qualified 501(c)(3) bonds as defined in Section 145 of the Code. Although the Borrower is not an organization described in Section 501(c)(3) of the Code, in the opinion of Glankler Brown PLLC, counsel to the Borrower and the Sole Member, the Borrower will be disregarded as an entity separate from its owner, the Sole Member, for federal income tax purposes. Consequently, the Borrower will be treated as a part of the Sole Member, which is a 501(c)(3) entity, for federal income tax purposes. Additionally, in order for the Series 2014A Bonds to be treated as qualified 501(c)(3) bonds, the Project must meet certain occupancy restrictions set forth in Section 142(d) and Section 145(d) of the Code. Therefore, the Borrower s operation of the Project will be subject to the terms and restrictions of Land Use Restriction Agreement dated as of February 1, 2014, entered into between the Issuer, the Trustee and the Borrower (the Land Use Restriction Agreement ) which, among other things, will require that for the Qualified Project Period (as defined in the Land Use Restriction Agreement), at least 40% of the dwelling units in the Project be occupied by families of low or moderate income, defined as families or individuals whose income does not exceed 60% (adjusted for family size) of the median gross income for the area in which the Project are located ( Federal Low Income Tenants ). Furthermore, the Borrower will be obligated to operate the Project in accordance with Revenue Procedure issued by the Internal Revenue Service in order to maintain the Sole Member s status as an entity described in Section 501(c)(3) of the Code. The terms of the Land Use Restriction Agreement will therefore require that for so long as the Borrower is the owner of the Project, at least 75% of the dwelling units in the Project be occupied by families of moderate income (the Moderate Income Tenants ), defined as families or individuals whose income does not exceed 80% of the median gross income for the Atlanta MSA (as defined in the Land Use Restriction Agreement), as adjusted for family size. The Borrower has also covenanted under the Tax Agreement that so long as the Borrower is the owner of the Project, it will restrict rents of Moderate Income Tenants to rental rates which are determined to be affordable and the Borrower will limit rental rates (excluding tenant paid utilities) for those tenants to a level that does not exceed 30% of 80% of the area median gross income for the Atlanta MSA, adjusted for family size. The Land Use Restriction Agreement and the Tax Agreement will have the effect of reducing the potential universe of tenants eligible to reside in the Project. See THE BORROWER AND THE PROJECT Project Regulation and RISK FACTORS AND INVESTMENT CONSIDERATIONS Project Risks; Rental Housing Requirements herein and APPENDIX B SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS THE LAND USE RESTRICTION AGREEMENT herein. In addition to the extensive regulation of the Project imposed by the Land Use Restriction Agreement, additional requirements are imposed under the HAP Contract. Under the HAP Contract, all units in the Project are restricted to occupancy by families with incomes not in excess of 80% of area median income. See THE BORROWER AND THE PROJECT Project Regulation and SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM herein. 3

10 The Sole Member will have no liability on account of financial obligations of the Borrower under the Loan Agreement and the Note or the other Bond Documents. The Sole Member will enter into certain other of the Loan Documents for the sole purpose of agreeing to comply with the tax covenants therein, but the Trustee s recourse against the Sole Member for any violation of these covenants will be limited to the Sole Member s interest in the Borrower. herein. The Bonds are subject to mandatory and optional redemption as described herein. See THE BONDS AN INVESTMENT IN THE BONDS INVOLVES A SIGNIFICANT DEGREE OF RISK, INCLUDING, AMONG OTHERS, RISKS ASSOCIATED WITH THE LIMITED SOURCE OF PAYMENT FOR THE BONDS AND VARIOUS REAL ESTATE AND OPERATING RISKS. PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE STATEMENTS AND INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT, INCLUDING THE MATERIAL UNDER THE CAPTION RISK FACTORS AND INVESTMENT CONSIDERATIONS. THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY FROM FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE INDENTURE AND, EXCEPT FROM SUCH SOURCE, NONE OF THE ISSUER, ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON. THE BONDS DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS, NOR THE FAITH AND CREDIT OF THE ISSUER, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE BONDS. THE ISSUER HAS NO TAXING POWER. This Official Statement and the Appendices attached hereto contain descriptions of, among other matters, the Bonds, the Borrower, the Project, the Manager, the Indenture, the Loan Agreement, the Mortgage, the HAP Assignment, the Management Agreement, the Land Use Restriction Agreement and the Continuing Disclosure Agreement. Such descriptions and information do not purport to be comprehensive or definitive. Definitions of certain terms and words used in this Official Statement and not otherwise defined are set forth in the Indenture. All references herein to any agreements are qualified in their entirety by reference to such agreements and documents, and all references herein to the Bonds are qualified in their entirety by reference to the forms thereof included in the Indenture. Copies of such agreements and all other documents referenced herein are available to the recipient of this Official Statement during the initial offering period by contacting the Underwriter. THE BONDS The Bonds are available in book-entry only form. See BOOK-ENTRY-ONLY SYSTEM below. So long as Cede & Co., as nominee of The Depository Trust Company ( DTC ), is the registered owner of the Bonds, references herein to the Bondholders or holders or Holders or registered owners of the Bonds means Cede & Co. and not the beneficial owners of the Bonds. General Description The Bonds are issuable as fully registered bonds without coupons in denominations of $5,000 each and integral multiples thereof. The Bonds will be dated their date of delivery. The Bonds will bear interest at the rates, and will mature on the dates and in the amounts, all as set forth on the inside cover page of this Official Statement. Interest on the Bonds will be payable semiannually on each February 1 and August 1 of each year (the Interest Payment Dates ) commencing August 1, 2014, and be payable as to principal on the dates and in the amounts as set forth in the Indenture. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date preceding the date of authentication thereof, unless the date of such authentication is after a Record Date (as defined below), in which case it will bear interest 4

11 from the next succeeding Interest Payment Date succeeding the fifteenth day (whether or not a Business Day) of the calendar month preceding the applicable Interest Payment Date (the Record Date ), or unless no interest has been paid on such Bond, in which case from their date of delivery; provided, however, that if, as shown by the records of the Paying Agent interest on such Bonds is in default, such Bond shall bear interest from the date to which interest has been paid in full. Transfer and Exchange of the Bonds So long as the Bonds are in book-entry only form, Cede & Co., as nominee of DTC, will be the sole registered owner of the Bonds. Transfers of beneficial interests in the Bonds will be made as described below under Book-Entry-Only System. Book-Entry-Only System The following has been provided by DTC for use herein. While the information is believed to be reliable, none of the Issuer, the Trustee, the Borrower or the Underwriter, subject to the standard of review found on the inside cover hereof, nor any of their respective counsel, members, officers or employees, make any representations as to the accuracy or sufficiency of such information. The Depository Trust Company ( DTC ), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Bond will be issued for each issue of the Bonds, each in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries (DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the United States Securities and Exchange Commission. More information about DTC can be found at Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book entry system for the Bonds is discontinued. 5

12 To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices will be sent to DTC. If less than all of the securities within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to securities unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Issuer or the Trustee, on each payment date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Trustee, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book entry only transfers through DTC (or a successor securities depository); in that event, Bond certificates will be printed and delivered to DTC. The information under this heading concerning DTC and DTC s book entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. NEITHER THE ISSUER NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES, WITH RESPECT TO THE PAYMENTS TO OR THE PROVIDING OF NOTICE TO THE DIRECT PARTICIPANTS, THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE BONDS. THE ISSUER AND THE TRUSTEE CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC, DIRECT PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL OF OR INTEREST ON THE BONDS PAID TO DTC OR ITS NOMINEE, AS THE REGISTERED OWNER, OR ANY NOTICES TO THE 6

13 BENEFICIAL OWNERS OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN A MANNER DESCRIBED IN THIS OFFICIAL STATEMENT.. Revision of Book-Entry-Only System In the event that either: (i) the Issuer receives notice from DTC to the effect that DTC is unable or unwilling to discharge its responsibilities as a clearing agency for the Bonds or (ii) the Issuer elects to discontinue its use of DTC as a clearing agency for the Bonds, then the Issuer and the Trustee will do or perform or cause to be done or performed all acts or things, not adverse to the rights of the holders of the Bonds, as are necessary or appropriate to discontinue use of DTC as a clearing agency for the Bonds and to transfer the ownership of each of the Bonds to such person or persons, including any other clearing agency, as the holder of such Bonds may direct in accordance with the Indenture. Any expense of such a discontinuation and transfer, including any expenses of printing new certificates to evidence the Bonds, will be paid by the Borrower. Mandatory Redemption of Bonds Bonds of each Series shall be called for redemption (1) in whole or in part in the event the Project or any portion thereof is damaged or destroyed or taken in a condemnation proceeding and Net Proceeds resulting therefrom are to be applied to the payment of the Note as provided in the Loan Agreement and the Borrower pursuant to the Loan Agreement has elected to use the Net Proceeds to redeem Bonds, (2) in whole in the event the Borrower exercises its option to terminate the Loan Agreement due to the events permitting termination listed therein or (3) in whole in the event the Borrower is required to prepay the Loan following a Default under the Loan Agreement. See APPENDIX B SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS THE LOAN AGREEMENT. If called for redemption at any time pursuant to (1) through (3) above, the Bonds to be redeemed shall be subject to redemption by the Issuer prior to maturity, in whole at any time or (in the case of redemption pursuant to clause (1) above) in part on any Interest Payment Date (less than all of such Bonds to be selected in accordance with the provisions of the Indenture (as described under the caption Selection of Bonds to be Redeemed below)) at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date; such redemption date to be a date determined by the Borrower, and in the case of redemption pursuant to clause (3) above, to be the earliest practicable date, as determined by the Trustee, following acceleration of amounts due under the Loan Agreement. Optional Redemption of Bonds The Bonds are subject to optional redemption by the Issuer, at the direction of the Borrower, on or after February 1, 2024, in whole or in part at any time, at a redemption price equal to the principal amount of the Bonds to be redeemed plus accrued interest to the date of redemption. Mandatory Sinking Fund Redemption The Series 2014A Bonds are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest on February 1 and August 1 of each year and in the principal amounts shown below: (a) The Series A Bonds maturing February 1, 2024 are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date on February 1 and August 1 of each year and in the principal amounts shown below: Date Amount Date Amount August 1, 2017 $125,000 February 1, 2021 $145,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, 2024 (Maturity) 100,000 7

14 (b) The Series A Bonds maturing February 1, 2034 are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date on February 1 and August 1 of each year and in the principal amounts shown below: Date Amount Date Amount August 1, 2022 $50,000 August 1, 2028 $210,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, 2034 (Maturity) 275,000 (c) The Series A Bonds maturing February 1, 2039 are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date on February 1 and August 1 of each year and in the principal amounts shown below: Date Amount Date Amount August 1, 2034 $295,000 February 1, 2037 $330,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, 2039 (Maturity) 370,000 (d) The Series A Bonds maturing February 1, 2042 are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date on February 1 and August 1 of each year and in the principal amounts shown below: Date Amount Date Amount August 1, 2039 $395,000 February 1, 2041 $415,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, 2042 (Maturity) 440,000 (e) The Series A Bonds maturing February 1, 2045 are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date on February 1 and August 1 of each year and in the principal amounts shown below: Date Amount Date Amount August 1, 2042 $470,000 February 1, 2044 $300,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, 2045 (Maturity) 300,000 (f) The Series A Bonds maturing February 1, 2049 are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date on February 1 and August 1 of each year and in the principal amounts shown below: Date Amount Date Amount August 1, 2043 $140,000 August 1, 2046 $600,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, ,000 August 1, ,000 August 1, ,000 February 1, ,000 February 1, 2049 (Maturity) 675,000 8