Financial Report with Supplemental Information June 30, 2014

Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor (a not-for-profit corporation) Financial Report with Supplemental Information June 30, 2014

Certificate of Officers We certify that we have examined the attached financial statements and supplemental information of, Our Saviour's Manor Senior Nonprofit Housing, and to the best of our knowledge and belief, the same is a true statement of the financial condition as of June 30, 2014. Johnnie Jackson Chair September 11, 2014 Date Diane Hicks-Walker Secretary September 11, 2014 Date ID# 38-3593702 Employer Identification Number

Management Agent's Certification We certify that we have examined the attached financial statements and supplemental information of, Our Saviour's Manor Senior Nonprofit Housing, and to the best of our knowledge and belief, the same is a true statement of the financial condition as of June 30, 2014. Kesha Akridge Management Agent Representative September 11, 2014 Date (248) 281-2020 Telephone Number ID# 38-1387145 Management Company Employer Identification Number Aaron Price Property Manager

Contents Report Letter 1-2 Financial Statements Balance Sheet 3-4 Statement of Activities 5-7 Statement of Changes in Deficiency in Net Assets 8 Statement of Cash Flows 9-10 Notes to Financial Statements 11-15 Supplemental Information 16 Report Letter 17 Balance Sheet Data 18-19 Statement of Activities Data 20-22 Statement of Changes in Deficiency in Net Assets Data 23 Statement of Cash Flows Data 24-25 Supplemental Information 26-27 Schedule of Changes in Fixed Asset Accounts 28 Schedule of Expenditures of Federal Awards 29 Computation of Surplus Cash 30 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 31-33 Report on Compliance for the Major Federal Program; Report on Internal Control Over Compliance 34-37 Schedule of Findings and Questioned Costs 38-40

Independent Auditor's Report To the Board of Directors Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor Report on the Financial Statements We have audited the accompanying financial statements of Our Saviour's Manor Senior Nonprofit Housing (the "Organization"), which comprise the balance sheet as of June 30, 2014 and 2013 and the related statements of activities, changes in deficiency in net assets, and cash flows for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1

To the Board of Directors Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor as of June 30, 2014 and 2013 and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 11, 2014 on our consideration of Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Our Saviour's Manor Senior Nonprofit Housing 's internal control over financial reporting and compliance. September 11, 2014 By: Robert F. Long Engagement Partner 27400 Northwestern Highway P.O. Box 307 Southfield, MI 48037-0307 Federal ID Number: 38-1357951 Phone Number: (248) 352-2500 2

Balance Sheet Assets June 30, 2014 June 30, 2013 Current Assets Cash - Operations $ 35,880 $ 19,227 Tenant accounts receivable - 330 Accounts receivable - HUD 17,384 196 Prepaid expenses 7,975 24,054 Total current assets 61,239 43,807 Deposits - Held in Trust Tenant deposits held in trust 15,432 16,681 Deposits - Funded Escrow deposits 7,206 6,005 Replacement reserve 210,218 165,299 Residual receipts reserve 302 301 Total deposits - Funded 217,726 171,605 Fixed Assets Land and land improvements 97,500 97,500 Buildings and building improvements 5,349,483 5,347,649 Furniture for project/tenant use 9,700 9,700 Furnishings 91,298 91,298 Maintenance equipment 87,304 87,304 Motor vehicles 74,631 74,631 Miscellaneous fixed assets 134,971 134,971 Total fixed assets 5,844,887 5,843,053 Accumulated depreciation (1,830,591) (1,674,404) Net fixed assets 4,014,296 4,168,649 Total assets $ 4,308,693 $ 4,400,742 See Notes to Financial Statements. 3

Balance Sheet (Continued) Liabilities and Deficiency in Net Assets June 30, 2014 June 30, 2013 Current Liabilities Accounts payable - Operations (Note 4) $ 13,074 $ - Accrued wages payable 4,186 4,659 Accrued payroll taxes payable 320 356 Accrued interest payable - Surplus cash note payable (Note 4) 5,030 6,180 Residual receipts liability 37,843 17,959 Prepaid revenue 266 - Total current liabilities 60,719 29,154 Tenant deposits held in trust (contra) 14,015 13,431 Long-term Liabilities Capital advance (Note 2) 4,789,200 4,789,200 Notes payable - Surplus cash (Note 4) 83,986 95,464 HOME funds (Note 3) 550,000 550,000 Total long-term liabilities 5,423,186 5,434,664 Total liabilities 5,497,920 5,477,249 Deficiency in Net Assets Deficiency in unrestricted net assets (1,189,227) (1,076,507) Total deficiency in net assets (1,189,227) (1,076,507) Total liabilities and deficiency in net assets $ 4,308,693 $ 4,400,742 See Notes to Financial Statements. 4

Statement of Activities Year Ended June 30, 2014 June 30, 2013 Rent Revenue Rent revenue - Gross potential $ 171,597 $ 153,054 Tenant assistance payments 276,867 254,250 Total rent revenue (potential at 100% occupancy) 448,464 407,304 Vacancies Apartments (17,435) (12,988) Residual receipts adjustment (19,884) (17,959) Total vacancies (37,319) (30,947) Net rent revenue (rent revenue less vacancies) 411,145 376,357 Financial Revenue Project operations 3 3 Investments - Residual receipts 1 1 Investments - Replacement reserve 188 187 Total financial revenue 192 191 Other Revenue Laundry and vending revenue 3,471 2,997 Tenant charges 788 - Gifts (Note 4) 773 40,892 Miscellaneous revenue 2,042 1,456 Total other revenue 7,074 45,345 Total revenue 418,411 421,893 See Notes to Financial Statements. 5

Statement of Activities (Continued) Year Ended June 30, 2014 June 30, 2013 Administrative Expenses Conventions and meetings $ 545 $ 842 Management consultants 16,304 14,877 Advertising and marketing 1,225 471 Other renting expenses 777 616 Office salaries 29,189 22,206 Office expenses 6,082 4,037 Management fee (Note 4) 24,493 24,000 Manager or superintendent salaries 49,338 34,035 Legal expenses 4,419 223 Auditing expenses 6,660 6,900 Bookkeeping fees/accounting services (Note 4) 6,000 6,000 Bad debts 2,181 - Miscellaneous administrative expenses 2,384 2,187 Total administrative expenses 149,597 116,394 Utilities Expense Electricity 31,480 30,181 Water 14,842 15,636 Gas 16,160 14,658 Total utilities expense 62,482 60,475 Operating and Maintenance Expenses Payroll 30,925 28,595 Supplies 12,951 15,959 Contracts 41,215 36,533 Garbage and trash removal 4,433 3,421 Heating/Cooling repairs and maintenance 1,692 1,806 Snow removal 5,750 2,610 Vehicle and maintenance equipment operation and repairs 1,964 5,134 Miscellaneous operating and maintenance expenses 15,763 25,420 Total operating and maintenance expenses 114,693 119,478 Taxes and Insurance Payroll taxes (FICA) 8,811 7,053 Property and liability insurance (hazard) 20,475 19,974 Workers' compensation 1,764 1,533 Health insurance and other employee benefits 12,092 14,150 Total taxes and insurance 43,142 42,710 See Notes to Financial Statements. 6

Statement of Activities (Continued) Year Ended June 30, 2014 June 30, 2013 Financial Expenses Interest on notes payable (long term)(note 4) $ 5,030 $ 6,180 Total financial expenses 5,030 6,180 Total Costs of Operations Before Depreciation 374,944 345,237 Change in Net Assets Before Depreciation 43,467 76,656 Depreciation Expense 156,187 159,653 Change in Total Net Assets $ (112,720) $ (82,997) See Notes to Financial Statements. 7

Statement of Changes in Deficiency in Net Assets Deficiency in Net Assets - July 1, 2012 $ (993,510) Increase in deficiency in net assets (82,997) Deficiency in Net Assets - June 30, 2013 (1,076,507) Increase in deficiency in net assets (112,720) Deficiency in Net Assets - June 30, 2014 $ (1,189,227) See Notes to Financial Statements. 8

Statement of Cash Flows Year Ended June 30, 2014 June 30, 2013 Cash Flows from Operating Activities Receipts: Rental $ 415,144 $ 393,897 Interest 192 191 Gifts 773 40,892 Other cash receipts 6,301 4,453 Total receipts 422,410 439,433 Disbursements: Administrative (23,759) (41,411) Management fee (27,300) (26,000) Utilities (62,482) (60,475) Salaries and wages (117,605) (92,398) Operating and maintenance (83,768) (90,919) Property insurance (20,475) (19,974) Miscellaneous taxes and insurance (6,588) (40,072) Tenant security deposits 1,833 (2,403) Interest on notes payable (6,180) (10,602) Total disbursements (346,324) (384,254) Net cash provided by operating activities 76,086 55,179 Cash Flows from Investing Activities Net deposit to insurance reserve (1,201) (1,201) Net deposit to the reserve for replacement account (44,919) (4,732) Net deposit to the residual receipts account (1) (1) Net purchase of fixed assets (1,834) (59,644) Net cash used in investing activities (47,955) (65,578) Cash Flows from Financing Activities Principal payments on loans or notes payable (11,478) (11,987) Net cash used in financing activities (11,478) (11,987) Net Increase (Decrease) in Cash 16,653 (22,386) Cash - Beginning of year 19,227 41,613 Cash - End of year $ 35,880 $ 19,227 See Notes to Financial Statements. 9

Statement of Cash Flows (Continued) A reconciliation of change in deficiency in net assets to net cash from operating activities is as follows: Year Ended June 30, 2014 June 30, 2013 Change in deficiency in net assets $ (112,720) $ (82,997) Adjustments to reconcile change in deficiency in net assets to net cash from operating activities: Depreciation 156,187 159,653 Decrease (increase) in assets: Tenant accounts receivable 330 (419) Accounts receivable - Other (17,188) - Prepaid expenses 16,079 (17,336) Cash restricted for tenant security deposits 1,249 (2,327) Increase (decrease) in liabilities: Accounts payable - Operations 13,074 (15,102) Accrued liabilities 19,375 18,148 Accrued interest payable (1,150) (4,365) Tenant security deposits held in trust 584 (76) Prepaid revenue 266 - Net cash provided by operating activities $ 76,086 $ 55,179 See Notes to Financial Statements. 10

Notes to Financial Statements June 30, 2014 and 2013 Note 1 - Nature of Business and Significant Accounting Policies Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor (the "Organization") is a not-for-profit corporation that owns and operates a 50-unit affordable housing rental project for elderly persons (the "Project"). The Project, located in Westland, Michigan, is operated under HUD Section 202 of the National Housing Act and is regulated by the U.S. Department of Housing and Urban Development (HUD) with respect to rental charges and operating methods. The Organization is equally owned by Presbyterian Villages of Michigan (PVM), Wellspring Lutheran Services, and Lutheran Church of Our Saviour. PVM is a comprehensive, diverse, and faith-based organization serving seniors in multiple settings since 1945. Its mission, guided by its Christian heritage, is to serve senioirs of all faiths and to create new possibilities for quality living. PVM's traditions of social accountability and servant leadership are further reflected in its statement of beliefs and values and its various operational philosophies and practices. As Christ's servants on earth, Wellspring Lutheran services serves the elderly and their caregivers with compassion, respect, spiritual support, and an unwavering focus on independence, personal dignity, and service excellence. Lutheran Church of Our Saviour's mission is to continue the ministry of Jesus who came to seek and save the lost (Luke 19:10). Basis of Accounting - Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor (the "Organization") maintains its accounting records and prepares its financial statements on an accrual basis, which is in accordance with accounting principles generally accepted in the United States of America. The accompanying schedule of expenditures of federal awards includes the federal grant activity of Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor and is presented on the same basis of accounting as the basic financial statements. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non- Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Deposits Held in Trust - In accordance with the Regulatory Agreement with HUD, the Organization is required to maintain a tenant security deposit trust account. The amount must at all times be equal to or exceed the aggregate of all outstanding obligations to tenants for refundable security deposits. The tenant security deposits fund consists of cash. 11

Notes to Financial Statements June 30, 2014 and 2013 Note 1 - Nature of Business and Significant Accounting Policies (Continued) Deposits - Funded - The funds controlled by the Organization represent a replacement reserve, a residual receipts reserve, and an insurance escrow. The replacement reserve consists of deposits by the Organization to offset specific expenses and to replace structural elements and mechanical equipment upon consent of HUD. Future monthly commitments for the funding of the replacement reserve account total $3,729. The residual receipts reserve consists of surplus funds calculated based on a HUD-prescribed formula and can be disbursed only at HUD s discretion. Excess residual receipts are required to be remitted to HUD upon termination of the PRAC contract. Excess residual receipts that are deemed probable to be paid to or recaptured by HUD are recorded as a liability. The excess residual receipts reserve was $37,843 and $17,959 at June 30, 2014 and 2013, respectively, and is included in current liabilities on the balance sheet. Each year, the liability is adjusted to reflect current year activity to the residual receipts, including required deposits, earned interest, approved withdrawals, and any adjustments to the amounts deemed probable to be paid to or recaptured by HUD. The insurance escrow consists of deposits by the Organization to offset insurance expenses. Fixed Assets - Land, buildings, furnishings, and furniture and equipment are recorded at cost when purchased or appraised value if donated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which range from 5 to 40 years. Maintenance, repairs, and renewals that do not involve any substantial betterments are charged to expense when incurred. Expenditures that increase the useful life of the property are capitalized. Tenant Accounts Receivable and Allowance for Bad Debts - Accounts receivable represents amounts due from tenants. Tenant accounts generally are collectible as long as a tenant is occupying the unit. When the tenant vacates the unit, any unpaid balance remaining after application of the security deposit is charged to bad debt expense. There was no allowance for bad debts at June 30, 2014 and 2013. Classification of Net Assets - Deficiencies in net assets of the Organization are classified as permanently restricted, temporarily restricted, or unrestricted depending on the presence and characteristics of donor-imposed restrictions limiting the Organization's ability to use or dispose of contributed assets or the economic benefits embodied in those assets. All deficiencies in net assets of the Organization at June 30, 2014 and 2013 are considered unrestricted. 12

Notes to Financial Statements June 30, 2014 and 2013 Note 1 - Nature of Business and Significant Accounting Policies (Continued) Rental Income - Units that are designated for occupancy by eligible low-income tenants under a HUD Section 202 project rental assistance contract require tenants to contribute a portion of the contract rent based on formulas prescribed by the U.S. Department of Housing and Urban Development. Housing assistance payments are received for the balance of contract rent from HUD. The current contract will expire on March 31, 2015. Federal Income Taxes - No provision for income taxes has been included in the financial statements since the Organization is exempt from such taxes under Section 501(c)(3) of the Internal Revenue Code. Accounting principles generally accepted in the United States of America require management to evaluate tax positions taken by the Organization and recognize a tax liability if the Organization has taken an uncertain tax position that more likely than not would not be sustained upon examination by the Internal Revenue Service or other applicable taxing authorities. Management has analyzed the tax positions taken by the Organization and has concluded that as of June 30, 2014 and 2013, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the financial statements. The Organization is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. Management believes it is no longer subject to income tax examinations for years prior to 2011. Regulatory Agreement - A Regulatory Agreement with HUD was signed in connection with the mortgage note. No violations were noted for the years ended June 30, 2014 and 2013. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Impairment of Assets - The Organization recognizes impairment of long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. No impairment of the Organization's rental property has occurred. Subsequent Events - The financial statements and related disclosures include evaluation of events up through and including September 11, 2014, which is the date the financial statements were available to be issued. 13

Notes to Financial Statements June 30, 2014 and 2013 Note 2 - Capital Advance The Organization obtained a capital advance from HUD, which was used to assist in financing the construction of the Project in accordance with the provisions of Section 202 of the Housing Act of 1959. The capital advance at June 30, 2014 is $4,789,200, bears no interest, and is not required to be repaid as long as the housing remains available to very low-income households and the aged and/or handicapped for a period of 40 years. In addition, the Organization is subject to the additional requirements of the HUD Section 202 program. If default occurs, then HUD, at its option, may accelerate the entire principal balance and charge interest. It is the Organization's intent to comply with the time requirement and Section 202. Based on the time and provision requirements, the advance is recorded as a long-term liability. The capital advance is collateralized by the land and building of the Organization. Note 3 - HOME Loans Funds The Organization received loans from the City of Westland and the Michigan State Housing Development Authority (MSHDA) in the amounts of $150,000 and $400,000, respectively, under the Home Investment Partnership Act. The proceeds of the loans were used to partially fund both the hard and soft costs incurred during construction. Under both loans, the Organization must comply with the affordable housing restrictions in accordance with the HOME program. It is the Organization's intent to comply with the time requirements and the HOME program. The MSHDA HOME loan bears no interest and is not required to be repaid as long as the property is not sold, transferred, or otherwise conveyed voluntarily or involuntarily through foreclosure. If these events were to occur prior to May 1, 2022, the full principal sum would be repayable. If these events were to occur after May 1, 2022, but prior to May 1, 2032, the Organization will be required to repay the MSHDA loan on a pro-rata basis. After May 1, 2032, the Organization will have no obligation to repay the loan. The City of Westland HOME loan will be deemed satisfied over 20 years. If default occurs on the loan, the City, at its option, may accelerate the entire principal balance. Upon acceleration, interest at the rate of 9 percent per annum will be assessed from the date of the original balance. Both loans are collateralized by real and personal property and are subordinate to the HUD Section 202 capital advance (as discussed in Note 2). Note 4 - Related Party Transactions Trustee appointments are approved by Presbyterian Villages of Michigan (PVM), a related not-for-profit organization that is also the HUD-approved management agent, and Wellspring Lutheran Services and Lutheran Church of Our Saviour. 14

Notes to Financial Statements June 30, 2014 and 2013 Note 4 - Related Party Transactions (Continued) As of June 30, 2014 and 2013, $13,074 and $0, respectively, is due to PVM for payment of expenditures and is included in accounts payable. During 2014 and 2013, the PVM Foundation provided the Organization with $773 and $40,892, respectively, in contribution support through the allocation of funds raised by the Organization and matching grants from the PVM Foundation. In addition, the Organization has entered into a residual receipts note in the amount of $107,451, which was approved by HUD. The balance of the note at June 30, 2014 and 2013 was $83,986 and $95,464, respectively. The note bears interest at 5.75 percent and is unsecured. Under the terms of the note, the repayment is subject to surplus cash and approval by HUD. Interest expense totaled $5,030 and $6,180 for the years ended June 30, 2014 and 2013, respectively. Accrued interest payable totaled $5,030 and $6,180 at June 30, 2014 and 2013, respectively. A principal payment of $11,478 and an interest payment of $6,180 were made during the year ended June 30, 2014, as approved by HUD. The property management agreement provides that a management fee in the amount of 5.91 percent of gross rents collected be paid to PVM. In addition, the Organization pays accounting service fees to PVM, which are included in the annual budget. The Organization incurred management fees of $24,493 and $24,000 to PVM for the years ended June 30, 2014 and 2013, respectively. In addition, accounting service fees of $6,000 were also paid to PVM for both years ended June 30, 2014 and 2013. Note 5 - Current Vulnerability Due to Certain Concentrations The Organization's sole asset is The Village of Our Saviour's Manor. The Organization's operations are concentrated in the senior housing market. In addition, the Organization operates in a heavily regulated environment. The operations of the Organization are subject to the administrative directives, rules, and regulations of federal, state, and local regulatory agencies, including, but not limited to, HUD. Such administrative directives, rules, and regulations are subject to change by an Act of Congress or an administrative change mandated by HUD. Such changes may occur with little notice or inadequate funding to pay for the related cost, including additional administrative burden, to comply with a change. 15

Supplemental Information 16

Independent Auditor's Report on Supplemental Information To the Board of Directors Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor We have audited the financial statements of, Our Saviour's Manor Senior Nonprofit Housing, as of and for the year ended June 30, 2014. Our audit was performed for the purpose of forming an opinion on the financial statements of Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor taken as a whole. The accompanying supplemental information, including the schedule of expenditures of federal awards, is presented for the purpose of additional analysis as required by HUD and the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the financial statements. For the purpose of electronic submission to the U.S. Department of Housing and Urban Development, Real Estate Assessment Center (REAC), the supplemental information is also deemed to include the financial data template information as presented in the balance sheet and the statements of activities, changes in deficiency in net assets, and cash flows. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. September 11, 2014 17

Balance Sheet Data June 30, 2014 Assets Current Assets 1120 Cash - Operations $ 35,880 1135 Accounts receivable - HUD 17,384 1200 Prepaid expenses 7,975 1100T Total current assets 61,239 Deposits - Held in Trust 1191 Tenant deposits held in trust 15,432 Deposits - Funded 1310 Escrow deposits 7,206 1320 Replacement reserve 210,218 1340 Residual receipts reserve 302 1300T Total deposits - Funded 217,726 Fixed Assets 1410 Land and land improvements 97,500 1420 Buildings and building improvements 5,349,483 1450 Furniture for project/tenant use 9,700 1460 Furnishings 91,298 1470 Maintenance equipment 87,304 1480 Motor vehicles 74,631 1490 Miscellaneous fixed assets 134,971 1400T Total fixed assets 5,844,887 1495 Accumulated depreciation (1,830,591) 1400N Net fixed assets 4,014,296 1000T Total assets $ 4,308,693 18

Balance Sheet Data (Continued) June 30, 2014 Liabilities and Deficiency in Net Assets Current Liabilities 2110 Accounts payable - Operations $ 13,074 2120 Accrued wages payable 4,186 2121 Accrued payroll taxes payable 320 2133 Accrued interest payable - Surplus cash note payable 5,030 2190 Residual receipts liability 37,843 2210 Prepaid revenue 266 2122T Total current liabilities 60,719 2191 Tenant deposits held in trust (contra) 14,015 Long-term Liabilities 2310 Capital advance 4,789,200 2311 Notes payable - Surplus cash 83,986 2322 HOME funds 550,000 2300T Total long-term liabilities 5,423,186 2000T Total liabilities 5,497,920 Deficiency in Net Assets 3131 Deficiency in unrestricted net assets (1,189,227) 3130 Total deficiency in net assets (1,189,227) 2033T Total liabilities and deficiency in net assets $ 4,308,693 19

Statement of Activities Data Year Ended June 30, 2014 Rent Revenue 5120 Rent revenue - Gross potential $ 171,597 5121 Tenant assistance payments 276,867 5100T Total rent revenue (potential at 100% occupancy) 448,464 Vacancies 5220 Apartments (17,435) 5290 Miscellaneous (19,884) 5200T Total vacancies (37,319) 5152N Net rent revenue (rent revenue less vacancies) 411,145 Financial Revenue 5410 Project operations 3 5430 Investments - Residual receipts 1 5440 Investments - Replacement reserve 188 5400T Total financial revenue 192 Other Revenue 5910 Laundry and vending revenue 3,471 5920 Tenant charges 788 5970 Gifts 773 5990 Miscellaneous revenue 2,042 5900T Total other revenue 7,074 5000T Total revenue 418,411 Administrative Expenses 6203 Conventions and meetings 545 6204 Management consultants 16,304 6210 Advertising and marketing 1,225 6250 Other renting expenses 777 6310 Office salaries 29,189 6311 Office expenses 6,082 6320 Management fee 24,493 6330 Manager or superintendent salaries 49,338 6340 Legal expenses 4,419 6350 Auditing expenses 6,660 6351 Bookkeeping fees/accounting services 6,000 6370 Bad debts 2,181 6390 Miscellaneous administrative expenses 2,384 6263T Total administrative expenses 149,597 20

Statement of Activities Data (Continued) Year Ended June 30, 2014 Utilities Expense 6450 Electricity $ 31,480 6451 Water 14,842 6452 Gas 16,160 6400T Total utilities expense 62,482 Operating and Maintenance Expenses 6510 Payroll 30,925 6515 Supplies 12,951 6520 Contracts 41,215 6525 Garbage and trash removal 4,433 6546 Heating/Cooling repairs and maintenance 1,692 6548 Snow removal 5,750 6570 Vehicle and maintenance equipment operation and repairs 1,964 6590 Miscellaneous operating and maintenance expenses 15,763 6500T Total operating and maintenance expenses 114,693 Taxes and Insurance 6711 Payroll taxes (FICA) 8,811 6720 Property and liability insurance (hazard) 20,475 6722 Workers' compensation 1,764 6723 Health insurance and other employee benefits 12,092 6700T Total taxes and insurance 43,142 Financial Expenses 6830 Interest on notes payable (long term) 5,030 6800T Total financial expenses 5,030 6000T Total Costs of Operations Before Depreciation 374,944 5060T Change in Net Assets Before Depreciation 43,467 6600 Depreciation Expense 156,187 3250 Change in Total Net Assets $ (112,720) 21

Statement of Activities Data (Continued) Supplemental Information Year Ended June 30, 2014 S1000-010 1 Total principal required under the mortgage, even if payments under a workout agreement are less or more than those required under the mortgage $ 0 S1000-020 2 Replacement reserve deposits required by the Regulatory Agreement or amendments thereto, even if payments may be temporarily suspended or waived 44,748 S1000-030 3 Replacement reserve or residual receipt releases that are included as expense items on this profit and loss statement 6,180 S1000-040 4 Project improvement reserve releases under the flexible subsidy program that are included as expense items on this profit and loss statement 0 22

Statement of Changes in Deficiency in Net Assets Data Year Ended June 30, 2014 S1100-050 Deficiency in Net Assets - July 1, 2013 $ (1,076,507) 3250 Increase in deficiency in net assets (112,720) 3130 Deficiency in Net Assets - June 30, 2014 $ (1,189,227) 23

Statement of Cash Flows Data Year Ended June 30, 2014 Cash Flows from Operating Activities Receipts: S1200-010 Rental $ 415,144 S1200-020 Interest 192 S1200-025 Gifts 773 S1200-030 Other cash receipts 6,301 S1200-040 Total receipts 422,410 Disbursements: S1200-050 Administrative (23,759) S1200-070 Management fee (27,300) S1200-090 Utilities (62,482) S1200-100 Salaries and wages (117,605) S1200-110 Operating and maintenance (83,768) S1200-140 Property insurance (20,475) S1200-150 Miscellaneous taxes and insurance (6,588) S1200-160 Tenant security deposits 1,833 S1200-190 Interest on notes payable (6,180) S1200-230 Total disbursements (346,324) S1200-240 Net cash provided by operating activities 76,086 Cash Flows from Investing Activities S1200-245 Net deposit to insurance reserve (1,201) S1200-250 Net deposit to the reserve for replacement account (44,919) S1200-260 Net deposit to the residual receipts account (1) S1200-330 Net purchase of fixed assets (1,834) S1200-350 Net cash used in investing activities (47,955) Cash Flows from Financing Activities S1200-370 Principal payments on loans or notes payable (11,478) S1200-460 Net cash used in financing activities (11,478) S1200-470 Net Increase in Cash 16,653 S1200-480 Cash - Beginning of year 19,227 S1200T Cash - End of year $ 35,880 24

Statement of Cash Flows Data (Continued) Year Ended June 30, 2014 A reconciliation of change in deficiency in net assets to net cash from operating activities is as follows: 3250 Change in deficiency in net assets $ (112,720) Adjustments to reconcile change in deficiency in net assets to net cash from operating activities: 6600 Depreciation 156,187 Decrease (increase) in assets: S1200-490 Tenant accounts receivable 330 S1200-500 Accounts receivable - Other (17,188) S1200-520 Prepaid expenses 16,079 S1200-530 Cash restricted for tenant security deposits 1,249 Increase (decrease) in liabilities: S1200-540 Accounts payable - Operations 13,074 S1200-560 Accrued liabilities 19,375 S1200-570 Accrued interest payable (1,150) S1200-580 Tenant security deposits held in trust 584 S1200-590 Prepaid revenue 266 S1200-610 Net cash provided by operating activities $ 76,086 25

Supplemental Information Year Ended June 30, 2014 1. Schedule of Reserve for Replacements - In accordance with the provisions of the Regulatory Agreement, restricted cash is held by Huntington Bank to be used for replacement of property with the approval of HUD as follows: 1320P Balance - July 1, 2013 $ 165,299 1320DT Monthly deposits ($3,729 x 12) 44,748 1320INT Interest 188 1320OWT Other withdrawals - Bank service charges (17) 1320 Balance - June 30, 2014 $ 210,218 2. Schedule of Residual Receipts - In accordance with the provisions of the Regulatory Agreement, surplus cash is calculated per the HUD formula and deposited into the residual receipts account. Restricted cash is held by JPMorgan Chase, N.A. and Huntington Bank to be used for any project purpose with the approval of HUD as follows: 1340P Balance - July 1, 2013 $ 301 1340DT Deposit of surplus cash 17,658 1340INT Interest 1 1340WT Approved withdrawals (17,658) 1340 Balance - June 30, 2014 $ 302 3. Computation of Surplus Cash - Form HUD 93486 - See attached 4. Schedule of Changes in Fixed Asset Accounts - See attached 5. Schedule of 5300 Accounts - N/A 6. Schedule of 6900 Accounts - N/A 7. Nursing Home Data - N/A 26

Supplemental Information (Continued) Year Ended June 30, 2014 8. Detail of Accounts: 2190 Residual receipts liability $ 37,843 2322 HOME loan funds $ 550,000 5990 Beauty shop revenue $ 1,000 Miscellaneous 1,042 Total $ 2,042 6390 Mileage reimbursement $ 94 Dues and subscriptions 1,477 Miscellaneous 23 Bank fees 730 Security deposit interest 60 Total $ 2,384 6590 System maintenance, repair, and support $ 1,998 Connectivity 10,700 Software purchase and license 2,791 Miscellaneous maintenance 274 Total $ 15,763 5290 Additional residual receipts requirements $ 19,884 S1200-370 HUD-approved repayment of residual receipts note $ 11,478 27

Schedule of Changes in Fixed Asset Accounts Year Ended June 30, 2014 Assets Accumulated Depreciation Balance July 1, 2013 Additions Deductions Balance June 30, 2014 Balance July 1, 2013 Current Provision Deductions Balance June 30, 2014 Net Book Value June 30, 2014 1410 Land and land improvements $ 97,500 $ - $ - $ 97,500 $ - $ - $ - $ - $ 97,500 1420 Buildings and building improvements 5,347,649 1,834-5,349,483 1,375,768 136,528-1,512,296 3,837,187 1450 Furniture for project/tenant use 9,700 - - 9,700 3,946 1,015-4,961 4,739 1460 Furnishings 91,298 - - 91,298 89,315 209-89,524 1,774 1470 Maintenance equipment 87,304 - - 87,304 32,990 8,299-41,289 46,015 1480 Motor vehicles 74,631 - - 74,631 74,631 - - 74,631-1490 Miscellaneous fixed assets 134,971 - - 134,971 97,754 10,136-107,890 27,081 Total $ 5,843,053 $ 1,834 $ - $ 5,844,887 $ 1,674,404 $ 156,187 $ - $ 1,830,591 $ 4,014,296 Fixed Asset Addition Detail: Buildings and building improvements - Water pump installation $ 1,834 28

Schedule of Expenditures of Federal Awards Year Ended June 30, 2014 Federal Agency/Pass-through Agency/Program Title CFDA Number Federal Expenditures U.S. Department of Housing and Urban Development: Section 202 - Capital Advance 14.157 $ 4,789,200 Section 202 - Project Rental Assistance 14.157 276,867 Total federal awards $ 5,066,067 29

Computation of Surplus Cash Year Ended June 30, 2014 S1300-010 Cash $ 51,312 1135 Accounts Receivable - HUD 17,384 1130 Other 707 S1300-040 Total Cash 69,403 Current Obligations S1300-075 Accounts Payable - 30 Days 13,074 S1300-100 Accrued Expenses (Not Escrowed) 4,506 2210 Prepaid Revenue 266 2191 Tenant/Patient Deposits Held In Trust (Contra) 14,015 S1300-140 Total Current Obligations 31,861 S1300-150 Surplus Cash (Deficiency) $ 37,542 S1300-210 Deposit Due Residual Receipts $ 37,542 30

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 31

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report To Management and the Board of Directors Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor (the "Organization"), which comprise the statement of financial position as of June 30, 2014 and the related statements of activities, changes in deficiency in net assets, and cash flows for the year then ended, and the related notes to the financial statements and have issued our report thereon dated September 11, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Our Saviour's Manor Senior Nonprofit Housing 's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 32

To Management and the Board of Directors Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor Compliance and Other Matters As part of obtaining reasonable assurance about whether Our Saviour's Manor Senior Nonprofit Housing 's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Southfield, Michigan September 11, 2014 33

Report on Compliance for the Major Federal Program; Report on Internal Control Over Compliance 34

Report on Compliance for the Major Federal Program; Report on Internal Control Over Compliance Independent Auditor's Report To the Board of Directors Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor Report on Compliance for the Major Federal Program We have audited Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor's (the "Organization") compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on its major federal program for the year ended June 30, 2014. Our Saviour's Manor Senior Nonprofit Housing 's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal program. Auditor's Responsibility Our responsibility is to express an opinion on compliance for Our Saviour's Manor Senior Nonprofit Housing 's major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Our Saviour's Manor Senior Nonprofit Housing 's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 35

To the Board of Directors Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor's compliance. Opinion on the Major Federal Program In our opinion, Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2014. Report on Internal Control Over Compliance Management of Our Saviour's Manor Senior Nonprofit Housing Corporation d/b/a The Village of Our Saviour's Manor is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Our Saviour's Manor Senior Nonprofit Housing 's internal control over compliance with the types of requirements that could have a direct and material effect on its major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 36