NSP Multifamily Toolkit

Multifamily Property Underwriting Template

Instructions
This model/template is password protected to avoid inadvertent damage to formulas. The password is ‘NSP’ (case sensitive)

The underwriting template workbook contains 8 tabs including this instruction page. Each tab is designated to perform a part of the multifamily underwriting process.
--2. Assumptions: This sheet functions as the starting point for the template by providing identifying project information and collecting data for geographically specific income and rent parameters.
--3. Rents and Unit Mix: This worksheet establishes a project’s rental income. The user specifies the numbers of units by both bedrooms and rent restriction, which is translated to rental income by the
worksheet’s functions. The worksheet accounts for Market, HOME, and AMI-based rent parameters.
--4. Operating Expenses: This section provides an opportunity to evaluate in detail the sponsor’s assumptions for a project’s operating costs.
--5. Hard Debt Sizing: Users input debt terms on this sheet and the template calculates a projected payment requirement for hard debt. The user can also test the debt requirement under debt service and
expense cushion metrics.
--6. Proforma: The proforma worksheet displays long term project cash flows. This worksheet allows a user to evaluate the project’s cash flow with debt service coverage and expense cushion metrics. It
also allows the user to identify and evaluate the distribution of excess cash flow.
--7. Housing Tax Credits: This worksheet will calculate the potential value of low income housing tax credits for qualifying projects.
--8. Sources and Uses: Users input the project budget on this page. The worksheet allows a user to identify any gap or overfunding issues in a proposed project.
Detailed instructions on how to use each worksheet to complete an underwriting review are discussed by tab below:

Overview (worksheet reference)

1.a. This Underwriting Template is designed to support multifamily underwriting in HUD's Neighborhood Stabilization Program (NSP). Grantees may require that applications be submitted
using this model, or may make use of this model optional. Grantees may also use this model internally to support their underwriting and review of applications submitted for funding.
1.b. Users are only required to input where there is a green background. In some cases, user input cells will turn yellow when the user has overridden a standard assumption.

Assumptions Worksheet
2.a. Users should complete all of the green input cells. Specifically:
2.b. --Inputs Related to Sponsor Identity: Input information concerning the property address, Sponsor, lender, proposed management agent and other key participants.
--The number of units will be completed on the '3. Rents and Unit Mix' worksheet. However, if there are non-revenue units, indicate them here.
2.c. --Inputs Related to Property Type: Select from the options in these drop-down menus.
2.d. --Inputs Related Inflation and Trending: Default rates have been provided, but users may override these as they deem appropriate. Note that there are distinct trending rates
for various income and expense categories. The proforma will be driven by these trending assumptions.
2.e. --First Full Operating Year for Proforma: This model does not support 'lease-up' or 'partial year' operations that precede stabilization. Therefore, users should specify the first full year of
operations, and should account for partial-year or pre-stabilization operating costs as a development expense.
2.d. --Rent Loss Underwriting: The default rates are 5% for vacancy loss and 2% for collections loss. Users may override these defaults, and the model will note any changes.
2.e. --Per Unit Per Year Replacement Reserve Deposit: The default amount is $300; the model will flag any deviation, and will further note any deviation below $300 and above $500/unit/year.
2.f. --Inputs for Deriving Restricted Rents: "Percent of Maximum Restricted Rents to Use for Underwriting" is set on the 'Rents and Unit Mix' worksheet, and appears on the Assumptions
worksheet for reference only. See 3.a.
2.g. --"County/MSA", "four-person very low income" and "AMI(MFI)": Use the hyperlink to go to the Web site for HUD area median incomes. Identify the relevant MSA or County, and input
the appropriate 4-person VLI amount, and the Median Family income (below the county/MSA name, to the left of the table). These inputs will drive all AMI-based (affordable) rent calculations
2.h. Current Year Low- and High-Home Rents: Use the hyperlink to go to the HUD Web site for HOME rents, and input the appropriate rents for the location of the property, and for each unit type.

Rents and Unit Mix Worksheet

3.a. --Percent of Maximum Restricted Rents: This input allows underwriters to limit AMI-based rents to a ceiling below the maximum rents. Doing so reduces revenue but also provides some
greater affordability (any underwritten reductions in the rents will be calculated into HOME and AMI-based rents), while also providing a cushion should the property need to increase revenue in the future.
Of course, any reduction in the maximum rents will increase the amount of subsidy required.
3.b. --Utility Allowance: Input the local housing authority's utility allowance for each unit type.
3.c. --Market Rents: Input the market rent for each unit type, based on the requirements of the Grantee's RFP.
Note: This worksheet is not designed to allow for inputs of multiple configurations of the same unit type (for instance, 600SF 1BR units and 800 SF 1BR units). If the property has multiple
configurations, the underwriter should develop a weighted average and input the market rents accordingly.
Note: The model will limit rents to the lesser of market or the restricted rent. For example, if the market rent for a 1BR unit is $400, and the 50% AMI-based rent is $500, and the utility
allowance is $75, then the net rent that can be charged for the rent restricted unit is $425 ($500 - $75). However, the lower ($400) market rent would be used in the underwriting because
a tenant will not pay more than market, notwithstanding any rent restriction imposed by a use-agreement.

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NSP Underwriting Template 1. Instructions
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NSP Multifamily Toolkit
Multifamily Property Underwriting Template
Instructions
3.d. --Unit Mix Table: Input the number of units, by bedroom type, by rent type. Market units should be any units on which there is no rent restriction imposed. However, market units will be
limited to rents of 120% of AMI due to NSP program requirements.
3.e. --Custom AMI-based Rents: In the two cells below "120% AMI" you may enter your own rent restriction. For example, if the property will have units set aside at 70% of AMI, then enter "70"
into the first cell. Rents may be as low as 0% of AMI ($0), or as high as 120% of AMI. Enter units restricted at the user-specified level to the right.
3.f. --Rent Calculations (0-4 Bedroom). All rents are automatically calculated and displayed below, based on the user-inputs above. All comment fields are formula driven. Some important notes:
Note: For AMI-based and HOME rents, the table will take the lesser of the market rent or the applicable restricted rent
Note: Within each unit-type rent calculation table, rents are summed to a subtotal by their HOME, MARKET or AMI basis depending on conditions above. This is done because the model allows
each rent type to be trended differently depending on the restriction that is affecting it (see Proforma)
Note: at the top of the worksheet, total rents by rent-type are displayed.

Expenses
4.a. --The 'Developer Total/Year' column should reflect the amount PER YEAR TOTAL proposed by the applicant.
4.b. --The 'Funder Total/Year' column should reflect the final PER YEAR TOTAL determination proposed by the Grantee
Note: the default is for the Funder determination to equal the Developer proposal.
Note: Any deviations from the Developer proposal, input in the Funder column, will appear with a yellow background, to show there has been a deviation.

Hard Debt Sizing

5.a. --Loan Information: HARD DEBT ONLY: The user should input 1st lien and 2nd lien hard debt terms. It is unusual to have a 2nd lien hard debt, but the model does permit the inputs
Note: Do NOT input soft debt here.
5.b. --Concluded / User Override of Annual Debt Service (Comment Req'd): The model calculates the debt service, but allows the user to override the calculation. The default for this cell is to
accept the formula determination.
5.c. --Income, Expense, NOI, DS, and NCF: These calculations illustrate the income (from the Rents worksheet), other income and expenses (from the Expenses worksheet) and debt
service (from the input loan amount and terms, above).
5.d. --Debt Sizing Analytics: These calculations help the undewriter to determine whether the proposed hard debt is excessive or inadequate.
5.e. --Supportable Must-Pay Debt at this inital DSCR: The user may input a debt service coverage ratio at the left green input cell to derive the amount of supportable debt (at the interest rate and
amortization of the proposed 1st lien hard debt above). This allows the underwriter to see what an appropriate debt based on coverage might be, without having to back into the number.
5.f. --Supportable Must-Pay Debt at this inital OEC: The user may input an operating expense cushion at the left green input cell to derive the amount of supportable debt (at the interest rate and
amortization of the proposed 1st lien hard debt above). The operating expense cushion is the percentage of operating expenses represented by net cash flow. On smaller loans/properties,
OEC is a better guage of the appropriateness of the proposed debt than debt service coverage. The default proposal is 12%.

Proforma
6.a. The proforma assumes stabilized operations (see note 2.e. above), and applies trending (see note 2.d. above) to all income and revenue categories. Underwriters should be watchful for
deteriorations in cash flow in cases where income increases more slowly than expenses. In particular, see the minimum DSCR and cushion calculations at the left, toward the bottom.
If the DSCR or cushion erode too far, the hard debt should be smaller (lower principal and/or lower interest and/or longer term).
6.b. --Priority Cash Flow Dollars: If any dollar-amount of the net cash flow is obligated (before payments on the Gap Financing Loan), enter the amount here. Enter a total amount, not a per-unit
amount.
6.c. --Priority Cash Flow Percent: If any percentage of the net cash flow is obligated (before payments on the Gap Financing Loan), enter the percentage here.
6.d. --Projected Distributable: If the Grantee will require a payment as a percentage of (post priority) cash flow, enter the percentage here.

Credits
7.a. Note: If there are credits, you must select the set-aside type (see 7.c. below), otherwise the option is 'No Tax Credits' and the calculated amount will not appear as a Source.
7.b. This is a basic worksheet for calculating equity from Low Income Housing Tax Credits. It relies on the amount of Eligible Basis shown on the Sources and Uses worksheet (see XX)
7.c. --Select Set Aside Type: Either 40% of units must be at or below 60% of AMI, or 20% of units must be below 50% AMI.
7.d. --Basis Boost: If the property eligble for a boost in the calculated Eligible Basis, indicate that boost here by selecting 30% from the drop down menu
7.e. --Credit Rate: For 4% credits, select 4%, for 9% credits select 9%. Note:The “Buildings” column is restricted by tax credit rules which limit building acquisitions to 4% tax credits. Other uses include
rehab and new construction.
7.f --Yield: Input the yield for 4% and 9% credits.
7g. --Net Price Price Per Credit: Enter the price proposed to be paid by the limited partner investors for the credits. Enter the price as a decimal (i.e, 0.75 for 75 cents).
7.h. --Actual Equity / User Override: In the event the equity proposed to be paid differs from the calculated amount, the user may simply override the calculation by inputting the amount here.

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NSP Underwriting Template 1. Instructions
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NSP Multifamily Toolkit
Multifamily Property Underwriting Template
Instructions

Sources and Uses

8.a Note: List only permanent sources. Do not list construction or bridge loans which will be paid off with permanent financing.
8.b. Note: Hard debt and Equity are inputs carried over from the Hard Debt Sizing and Credits worksheets, respectively.
8.c. Input the amount of requested NSP Gap Financing, proposed deferred developer fee (as a postive number) and any other sources proposed by the developer.
8.d. Input all proposed uses. Use the 'Other' input locations for uses which do not have an apparent category.
Note: Column G (EB?) allows you to denote whether any use should be included in the calculation of Eligible Basis. Inputting "Y" into the column carries the amount to the eligible basis
calculation.
8.e. --Sources and Uses Balanced: use this tool to determine whether sources and uses are in balance, and to make adjustmetnts to sources and uses accordingly.

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NSP Underwriting Template 1. Instructions
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NSP Multifamily Toolkit Model v.1.0 Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
Assumptions/Key Data Worksheet White Cells Denote CALCULATED RESULTS

Inputs Related to Property/Sponsor Identity Notes/Instructions

Property Name Enter the 'marketing name' of the proposed property
Total Rental Units 0 Input unit mix on 'Rents and Mix' Worksheet
Manager's Unit / Other Non-Revenue Units 0 Enter number of non-revenue units; otherwise enter '0'
Total Units 0

Property Street Address

Property Suite/Unit
Property City
Property ST
Property Zip

Owner/Managing GP Entity Name

Owner/Managing GP Contact Name
Owner/GP Street Address
Owner/GP Suite/Unit
Owner/GP City
Owner/GP ST
Owner/GP Zip
Owner/GP Contact Phone Enter as 10 digits without spaces
Owner/GP Contact Email

Management Agent Company Name

Management Agent Contact Name
Management Agent Street Address
Management Agent Suite/Unit
Management Agent City
Management Agent ST
Management Agent Zip
Management Agent Contact Phone Enter as 10 digits without spaces
Management Agent Contact Email

Proposed 1st Mortgage Lender Name

Proposed 1st Mortgage Loan Type
Proposed 1st Mortgage Lender Contact Name
Proposed 1st Mortgage Lender Contact Phone Enter as 10 digits without spaces
Proposed 1st Mortgage Lender Contact Email
See 'Hard Debt Sizing' Worksheet for additional inputs related to 1st Mortgage Loan

Proposed Must-Pay 2nd Mortgage Lender Name

Proposed Must-Pay 2nd Mortgage Loan Type
Proposed Must-Pay 2nd Mortgage Lender Contact Name
Proposed Must-Pay 2nd Mortgage Lender Contact Phone
Proposed Must-Pay 2nd Mortgage Lender Contact Email
See 'Hard Debt Sizing' Worksheet for additional inputs related to 1st Mortgage Loan

Filename 576437917.xls
NSP Underwriting Template Worksheet: 2. Assumptions
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 Inputs Related to Property Type
Property Location Type Select One
Acquisition/Rehab or New Construction? Select One
Number of Stories of Tallest Structure 1
Elevator? Select One
Elderly, Family or Mixed Tenancy? Select One

Inputs Related to Inflation and Trending

Projected Operating Expense Inflation Rate (default 3.0%) 3.00%
Projected Capital Expense Inflation Rate (default 3.0%) 3.00%
Projected Market Rent Inflation Rate (default 2.5%) 2.50%
Projected Home-Based Rent Inflation Rate (default 2.0%) 2.00%
Projected AMI-Based Rent Inflation Rate (default 2.0%) 2.00%
Projected Other Income Inflation Rate (default 2.0%) 2.00%
First Full Operating Year for Proforma 2011 The first full year of operating revenue and expenses

Rent Loss Undewriting

Annual Vacancy Loss for Rental Units 5.00% Default assumption
Annual Collections Loss for Rental Units 2.00% Default assumption

Per Unit Per Year Replacement Reserve Deposit

Annual/Unit Required Replacement Reserve Deposit $300 Amount is $300-$500 PUPA

Inputs for Deriving Restricted Rents

Percent of Maximum Restricted Rents to Use for Underwriting 100.00% See 'Rents and Unit Mix' for setting this parameter.

Click here to go to 2009 AMIs (MFIs) Note: 2010 AMIs should be issued in April 2010
County/MSA * Enter Name of County, MSA or HMFA *
Enter Year of these AMIs 2009
4-Person Very Low Income $0
AMI (MFI) $0

Current Year Low Home Rents Click here to go to 2009 HOME rents
Enter Year of these HOME Rents 2009
0BR $0
1BR $0
2BR $0
3BR $0
4BR $0

Current Year High Home Rents

0BR $0
1BR $0
2BR $0
3BR $0
4BR $0

Filename 576437917.xls
NSP Underwriting Template Worksheet: 2. Assumptions
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NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
Rents and Unit Mix White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

Breakdown by Rent Type Amounts % of Total
Subtotal: HOME Rents $0
Subtotal: Other AMI-Based Restricted Rents $0
Note: Developers/Funders may opt to underwrite rents at a Percent of Maximum Restricted Rents 100.0%
'Percent of Maximum Restricted Rents' (see input at right). HOME and AMI-Based Rents Undewritten $0
Doing so provides some increased affordability and a way of
later increasing revenue if needed. Doing so also increases Subtotal: Market Rents $0
the amount of subsidy needed in the transaction. Resulting Monthly Gross Potential Rent $0
Resulting Annual Gross Potential Rent $0
Unit Type # of Units U/A Market Rent Low HOME High HOME Weighted Avg.
0BR 0 $0 $0 $0 $0 n/a ###
1BR 0 $0 $0 $0 $0 n/a ###
2BR 0 $0 $0 $0 $0 n/a ###
3BR 0 $0 $0 $0 $0 n/a ###
4BR 0 $0 $0 $0 $0 n/a ###

Note: In the grid below, show the numbers of units in categories according to number of bedrooms and according to whatever governmental rent restriction is the most stringent. For example, you may have
units that are covered by both 60% LIHTC and High HOME restrictions; you would show those units in the 60% AMI row (units that were restricted by High HOME only would go in the High HOME Only row). Be
careful not to double-count a unit: each unit should appear only under the lowest governmental rent restriction that applies to it, even if there are multiple restrictions. For this grid, you do not need to consider
whether market rents are lower than restricted rents; the calculations below make sure that the gross potential rent is the lower of the governmentally restricted rent and the market rent. However, you must
input market rents for the calculations to work.
- - - Unit Mix Table - - -
Number of Units Max Rent Basis 0BR 1BR 2BR 3BR 4BR % ###
0 Market Rents 0 0 0 0 0 0% ###
0 Low Home 0 0 0 0 0 0%
0 High Home Only 0 0 0 0 0 0%
0 30% AMI 0 0 0 0 0 0% Type
0 40% AMI 0 0 0 0 0 0% 0BR
0 50% AMI 0 0 0 0 0 0% 1BR
0 60% AMI 0 0 0 0 0 0% 2BR
0 80% AMI 0 0 0 0 0 0% 3BR
0 100% AMI 0 0 0 0 0 0% 4BR
0 120% AMI 0 0 0 0 0 0%
0 0% 0 0 0 0 0 0% ###
0 0% 0 0 0 0 0 0%
0 Number 0 0 0 0 0
Percentage 0% 0% 0% 0% 0% 0%

Filename: 576437917.xls
NSP Rental Underwriting Template
Worksheet: 3. Rents and Unit Mix
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 Notes: Note: You must input market rent determinations above.
Note: High-HOME Only may be occupied by households up to 65% AMI, and do not qualify for <60% AMI LIHTC; Low-Home may also qualify as LIHTC.
Note: All restricted rents (HOME and AMI-based) are underwritten at 100% of max.
Note: AMI-based rent determinations based on * Enter Name of County, MSA or HMFA * for 2009.
Note: 2009 Home rents used.
Enter additional comments here…
Enter additional comments here…
Enter additional comments here…

Filename: 576437917.xls
NSP Rental Underwriting Template
Worksheet: 3. Rents and Unit Mix
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Zero-Bedroom Units - Rent Calcs
Net Rent Gross Rent Effective Rent Applicable Unit Total Effective
# 0BR Units Rent Basis (incl. Utilities) (Less Utilities) Governed By Rent Monthly Rent Notes
0 Market Rents $0 n/a Market $0 $0
0 Low Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 High Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 30% AMI $0 $0 n/a $0 $0
0 40% AMI $0 $0 n/a $0 $0
0 50% AMI $0 $0 n/a $0 $0
0 60% AMI $0 $0 n/a $0 $0
0 80% AMI $0 $0 n/a $0 $0
0 100% AMI $0 $0 n/a $0 $0
0 120% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
Subtotal HOME Rents $0
Subtotal: Other Restricted Rents $0
Subtotal: Market or Market-Ceiling Rents $0

One-Bedroom Units - Rent Calcs

Net Rent Gross Rent Effective Rent Applicable Unit Total Effective
# 1BR Units Rent Basis (incl. Utilities) (Less Utilities) Governed By Rent Monthly Rent Notes
0 Market Rents $0 Market $0 $0
0 Low Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 High Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 30% AMI $0 $0 n/a $0 $0
0 40% AMI $0 $0 n/a $0 $0
0 50% AMI $0 $0 n/a $0 $0
0 60% AMI $0 $0 n/a $0 $0
0 80% AMI $0 $0 n/a $0 $0
0 100% AMI $0 $0 n/a $0 $0
0 120% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
Subtotal HOME Rents $0
Subtotal: Other Restricted Rents $0
Subtotal: Market or Market-Ceiling Rents $0

Filename: 576437917.xls
NSP Rental Underwriting Template
Worksheet: 3. Rents and Unit Mix
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Two-Bedroom Units - Rent Calcs
Net Rent Gross Rent Effective Rent Applicable Unit Total Effective
# 2BR Units Rent Basis (incl. Utilities) (Less Utilities) Governed By Rent Monthly Rent Notes
0 Market Rents $0 Market $0 $0
0 Low Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 High Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 30% AMI $0 $0 n/a $0 $0
0 40% AMI $0 $0 n/a $0 $0
0 50% AMI $0 $0 n/a $0 $0
0 60% AMI $0 $0 n/a $0 $0
0 80% AMI $0 $0 n/a $0 $0
0 100% AMI $0 $0 n/a $0 $0
0 120% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
Subtotal HOME Rents $0
Subtotal: Other Restricted Rents $0
Subtotal: Market or Market-Ceiling Rents $0

Three-Bedroom Units - Rent Calcs

Net Rent Gross Rent Effective Rent Applicable Unit Total Effective
# 3BR Units Rent Basis (incl. Utilities) (Less Utilities) Governed By Rent Monthly Rent Notes
0 Market Rents $0 Market $0 $0
0 Low Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 High Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 30% AMI $0 $0 n/a $0 $0
0 40% AMI $0 $0 n/a $0 $0
0 50% AMI $0 $0 n/a $0 $0
0 60% AMI $0 $0 n/a $0 $0
0 80% AMI $0 $0 n/a $0 $0
0 100% AMI $0 $0 n/a $0 $0
0 120% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
Subtotal HOME Rents $0
Subtotal: Other Restricted Rents $0
Subtotal: Market or Market-Ceiling Rents $0

Filename: 576437917.xls
NSP Rental Underwriting Template
Worksheet: 3. Rents and Unit Mix
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Four-Bedroom Units - Rent Calcs
Net Rent Gross Rent Effective Rent Applicable Unit Total Effective
# 4BR Units Rent Basis (incl. Utilities) (Less Utilities) Governed By Rent Monthly Rent Notes
0 Market Rents $0 Market $0 $0
0 Low Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 High Home $0 $0 n/a $0 $0 Home rents underwritten at HOME limit
0 30% AMI $0 $0 n/a $0 $0
0 40% AMI $0 $0 n/a $0 $0
0 50% AMI $0 $0 n/a $0 $0
0 60% AMI $0 $0 n/a $0 $0
0 80% AMI $0 $0 n/a $0 $0
0 100% AMI $0 $0 n/a $0 $0
0 120% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
0 Custom: 0% AMI $0 $0 n/a $0 $0
Subtotal HOME Rents $0
Subtotal: Other Restricted Rents $0
Subtotal: Market or Market-Ceiling Rents $0

Filename: 576437917.xls
NSP Rental Underwriting Template
Worksheet: 3. Rents and Unit Mix
Page 11 of 20
NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
Operating Expense Underwriting White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

Note: Sponsor / Applicant must enter in the 'Developer Total' column. Grantee should make determinations in the 'Funder Total' column. When the Funder's determination differs from the developer's, the cell will be yellow-highlighted.

Funder /
Grantee
Amounts Proposed by Developer / Sponsor Determination
Developer Per Unit Per Funder
Estimate of Operating Expenses Total / Year Per Unit Month Total / Year Comment

Other Income
Interest income available for ops $0 0 $0
Laundry/Facilities Income $0 $0 $0
NSF/Late Fee Income $0 $0 $0
Tenant Damage Charges $0 $0 $0
Grants for Service Costs $0 $0 $0
Non-residential Rental Income (net of
vacancy and collections loss) $0 $0 $0
Other Income $0 $0 $0
Total Other Income $0 $0 $0 $0

Administrative
Advertising- $0 $0 $0
Other Admin. Exps.- $0 $0 $0
Office Salaries- $0 $0 $0
Office Supplies- $0 $0 $0
Office or Model Apt. Rent- $0 $0 $0
Management Fee- $0 $0 $0
Management or Super. Sal.- $0 $0 $0
Mgmt. or Super. Free Rent Unit- $0 $0 $0
Legal Expenses (Project)- $0 $0 $0
Auditing Exps. (Project)- $0 $0 $0
Bookkeeping Fees/Acct. Services- $0 $0 $0
Telephone & Answ. Ser.- $0 $0 $0
Employee Training- $0 $0 $0
Miscellaneous Admin. Exps- $0 $0 $0
Monitoring Fees $0 $0 $0

File Name: 576437917.xls

NSP Rental Underwriting Template
Worksheet: 4. Operating Expenses
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NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
Operating Expense Underwriting White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

Note: Sponsor / Applicant must enter in the 'Developer Total' column. Grantee should make determinations in the 'Funder Total' column. When the Funder's determination differs from the developer's, the cell will be yellow-highlighted.

Funder /
Grantee
Amounts Proposed by Developer / Sponsor Determination
Developer Per Unit Per Funder
Estimate of Operating Expenses Total / Year Per Unit Month Total / Year Comment
Total Administrative Exps $0 $0 $0 $0
Utilities
Fuel for Domestic Hot Water- $0 $0 $0
Electricity (Light & Misc. Power)- $0 $0 $0
Water- $0 $0 $0
Gas- $0 $0 $0
Sewer- $0 $0 $0
Other Utils- $0 $0 $0
Total Utilityand
Operating Exps
Maintenance $0 $0 $0 $0
Expenses
Exterminating $0 $0 $0
Garbage & Trash Removal- $0 $0 $0
Security Contract- $0 $0 $0
Grounds Contract- $0 $0 $0
Repairs Payroll (all O&M on payroll) $0 $0 $0
Repairs Material- $0 $0 $0
Repairs Contract- $0 $0 $0
HVAC R & M- $0 $0 $0
Snow Removal- $0 $0 $0
Decorating Payroll/Contract- $0 $0 $0
Decorating Supplies- $0 $0 $0
Other Expenses- $0 $0 $0
Misc. O & M Expenses- $0 $0 $0
Total Operating and Maintenance $0 $0 $0 $0
Taxes & Insurance
Real Estate Taxes- $0 $0 $0
Payroll Taxes (FICA)- $0 $0 $0
Misc. Taxes, Licenses, & Permits- $0 $0 $0
Property & Liability Insurance- $0 $0 $0
Fidelity Bond Insurance- $0 $0 $0
Workmen's Compensation- $0 $0 $0
Health Ins. & Other Emp.Benefits- $0 $0 $0
Other Insurance- $0 $0 $0
Total Taxes and Insurance $0 $0 $0 $0
Total Expenses $0 $0 $0 $0

File Name: 576437917.xls

NSP Rental Underwriting Template
Worksheet: 4. Operating Expenses
Page 13 of 20
 NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
1st and 2nd Mortgage (Hard Debt) Underwriting White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

Loan Information (HARD DEBT ONLY)

Proposed 1st Mortgage Lender Name 0 See 'Assumptions' Worksheet
Proposed 1st Mortgage Loan Type 0 See 'Assumptions' Worksheet
Proposed 1st Mortgage Loan Amount $0.00 Enter amount of permanent 1st mortgage loan only
Term (Years) 0 Years
Loan Amortization (Years) 0 Years
Interest Rate 0.000% APR
Annual Credit Enhancement Cost (if applicable) 0.000% APR
Resulting Annual Debt Service $0.00
User may overwrite the concluded DS, but should provide an
Concluded / User Override of Annual Debt Service (Comment Req'd) $0.00
explanation here.
Proposed Must-Pay 2nd Mortgage Lender Name 0 See 'Assumptions' Worksheet
Proposed Must-Pay 2nd Mortgage Loan Type 0 See 'Assumptions' Worksheet
Proposed Must-Pay 2nd Mortgage Loan Amount $0.00 Enter amount of permanent 2nd mortgage loan only
Term (Years) 0 Years
Loan Amortization (Years) 0 Years
Fixed Interest Rate 0.000% APR
Annual Credit Enhancement Cost (if applicable) 0.000% APR
Resulting Annual Debt Service $0.00
User may overwrite the concluded DS, but should provide an
Concluded / User Override of Annual Debt Service (Comment Req'd) $0.00
explanation here.

Income Notes
Gross Potential Rents (GPR) $0 Calculation carried forward from Rents and Mix Worksheet
5% Minus Vacancy Loss $0 Input assumed vacancy loss percentage at Assumptions
2% Minus Bad Debt $0 Input assumed collections loss percentage at Assumptions
Plus Other Income $0 Calculation carried forward from Expenses Worksheet
Equals Total Effective Gross Income $0
Expenses
Operating Expenses $0 Calculation carried forward from Expenses Worksheet
$300 Reserve for Replacement Deposits (see Assumptions) $0 Input per unit per year amount at Assumptions
Total Expenses $0
NOI, DS and NCF
Income Minus Expenses Equals Net Operating Income 0
Underwritten Annual Debt Service: 1st Mortgage 0
Underwritten Annual Debt Service: 2nd Mortgage 0
Underwritten Total Annual Debt Service 0 For proposed 1st and 2nd (if applicable) required-payment notes
Underwritten Net Cash Flow 0
Debt Sizing Analytics
Initial Debt Service Coverage Ratio (DSCR) N/A
Initial Operating Expense Cushion (OEC) 0.00%
Minimum DSCR Years 1-20 N/A
Maximum DSCR Years 1-20 N/A
Minimum OEC Years 1-20 0.00%
Maximum OEC Years 1-20 0.00%
1.20 Supportable Must-Pay Debt at this inital DSCR $0
12% Supportable Must-Pay Debt at this initial OEC $0

Filename: 576437917.xls
NSP Rental Underwriting Template
Worksheet: 5. Hard Debt Sizing
Page 14 of 20
NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
20-Year Proforma White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

Operating Cash Flow Projection Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
/ Trends 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Cash Flow Projection
Home Rents 2.00% 0 0 0 0 0 0 0 0 0 0
Market Rents 2.50% 0 0 0 0 0 0 0 0 0 0
Other AMI-Based Rents 2.00% 0 0 0 0 0 0 0 0 0 0
Total Gross Potential Rent (Proposed Unit Mix/Rents) 0 0 0 0 0 0 0 0 0 0

Allowance for Multifamily Rent Loss 5.00% 0 0 0 0 0 0 0 0 0 0

Allowance for Multifamily Bad Debt 2.00% 0 0 0 0 0 0 0 0 0 0
Other Income 2.00% 0 0 0 0 0 0 0 0 0 0

Effective Gross Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Operating Expenses 3.00% 0 0 0 0 0 0 0 0 0 0

Proposed Reserve Deposit $0 0 0 0 0 0 0 0 0 0 0

Net Operating Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Mortgages P&I 0 0 0 0 0 0 0 0 0 0 0

Operating Cash Flow $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Debt Service Coverage N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
0.00 minimum DSCR yrs 1-20
Operating Expense Cushion 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
0.0% minimum Cushion yrs 1-20

Cash Distribution Projection

Operating Cash Flow $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 Priority Cash Flow Dollars $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0.0% Priority Cash Flow (Percentage) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Projected Distributable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
30.0% Soft Lender $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
70.0% Owner $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

The Compass Group, LLC

HOME Rental Underwriting Guide
Worksheet: 6. Proforma
Sample Mixed Income Case Study
Page 15 of 20
NSP Multifamily Toolkit
Multifamily Property Underwriting Template
20-Year Proforma

Property: 0 0

Operating Cash Flow Projection Assumptions Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
/ Trends 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Cash Flow Projection
Home Rents 2.00% 0 0 0 0 0 0 0 0 0 0
Market Rents 2.50% 0 0 0 0 0 0 0 0 0 0
Other AMI-Based Rents 2.00% 0 0 0 0 0 0 0 0 0 0
Total Gross Potential Rent (Proposed Unit Mix/Rents) 0 0 0 0 0 0 0 0 0 0

Allowance for Multifamily Rent Loss 5.00% 0 0 0 0 0 0 0 0 0 0

Allowance for Multifamily Bad Debt 2.00% 0 0 0 0 0 0 0 0 0 0
Other Income 2.00% 0 0 0 0 0 0 0 0 0 0

Effective Gross Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Operating Expenses 3.00% 0 0 0 0 0 0 0 0 0 0

Proposed Reserve Deposit $0 0 0 0 0 0 0 0 0 0 0

Net Operating Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Mortgages P&I 0 0 0 0 0 0 0 0 0 0 0

Operating Cash Flow $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Debt Service Coverage N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
0.00 minimum DSCR yrs 1-20
Operating Expense Cushion 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
0.0% minimum Cushion yrs 1-20

Cash Distribution Projection

Operating Cash Flow $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 Priority Cash Flow Dollars $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0.0% Priority Cash Flow (Percentage) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Projected Distributable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
30.0% Soft Lender $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
70.0% Owner $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

The Compass Group, LLC

HOME Rental Underwriting Guide
Worksheet: 6. Proforma
Sample Mixed Income Case Study
Page 16 of 20
NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
Housing Tax Credit (LIHTC) Equity Calculations White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

LIHTC Equity Calculation Worksheet

Select Set Aside No Housing Tax Credits

Buildings Other Notes

Eligible Basis $0 $100,000
Basis Boost 30% 30%
Boosted Eligible Basis $0 $130,000
Applicable Fraction 0% 0%
Qualified Basis $0 $0
Credit Rate 4.00% 9.00%
Yield 3.28% 8.50%
LIHTC Basis/Equity $0 $0
X 10 Years $0 $0
Net Price Price Per Credit $0.74 $0.74
Equity $0 $0
Actual Equity / User Override $0 $0 User has adopted the calculated equity amount

Total $0

The Compass Group, LLC

HOME Rental Underwriting Case Study
Worksheet: 7. Housing Tax Credits
Sample Mixed Income Property
Page 17 of 20
NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
Detailed Sources and Uses Worksheet White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

Line
PERMANENT Sources % of % of $
(do not list construction / bridge loan(s)) $ Amount TOTAL CATEGORY Per Unit ADDITIONAL COMMENTS
1 1st Mortgage Hard Debt $ - 0.0% 0.0% $ -
2 2nd Mortgage Hard Debt $ - 0.0% 0.0% $ -
3 Tax Credit Equity $ - 0.0% 0.0% $ -
4 NSP Funds $ 100,000.00 0.0% 100.0% $ - See note below regarding NSP funding limits

5 HOME Funds $ - 0.0% 0.0% $ -

6 Deferred Developer Fee $ - 0.0% 0.0% $ -
7 Owner/GP Cash $ - 0.0% 0.0% $ -
8 Other Source 1 (Specify) $ - 0.0% 0.0% $ -
9 Other Source 2 (Specify) $ - 0.0% 0.0% $ -
10 Other Source 3 (Specify) $ - 0.0% 0.0% $ -
11 Other Source 4 (Specify) $ - 0.0% 0.0% $ -
12 Other Source 5 (Specify) $ - 0.0% 0.0% $ -
13 Other Source 6 (Specify) $ - 0.0% 0.0% $ -
14 $ 100,000.00 1% 100% $ -
15
16 Funding Gap: Increase Sources and/or $ 10,000,000.00 99%
17 Decrease Uses by this Amount
18
19
The ratio of NSP Funds to total Sources may not exceed the ratio of NSP eligible units (i.e., <120% AMI) to total units.

20
21 EB = Eligible Basis
22
23 % of % of $ EB
USES $ Amount TOTAL CATEGORY Per Unit ? ADDITIONAL COMMENTS
24 ACQUISITION COSTS
25 Acquistion Land $ - 0.0% 0.0% $ - N
26 Acquistion Buildings $ - 0.0% 0.0% $ - Y
27 Acquisition Other $ - 0.0% 0.0% $ - Y
28 TOTAL ACQUISITION COSTS $ - 0% 0% $ -
29
30 CONSTRUCTION COSTS
31 Hard Costs: Site Improvements $ - 0.0% 0.0% $ - Y
32 Hard Costs: Construction $ - 0.0% 0.0% $ - Y
33 Hard Costs: Contingency $ - 0.0% 0.0% $ - Y Contingency equals 0.00% of Hard Costs
34 Other Construction/Rehab Cost (Specify) $ - 0.0% 0.0% $ - Y
35 Other Construction/Rehab Cost (Specify) $ - 0.0% 0.0% $ - Y
36 Other Construction/Rehab Cost (Specify) $ - 0.0% 0.0% $ - Y
37 Builders Profit (BP) $ - 0.0% 0.0% $ - Y BP Equals 0.00% of Hard Costs (incl. contingency)
38 General Requirements (GR) $ - 0.0% 0.0% $ - Y GR Equals 0.00% of Hard Costs (incl. contingency)
39 General Overhead (GO) $ - 0.0% 0.0% $ - Y GO Equals 0.00% of Hard Costs (incl. contingency)
40 Subtotal BP+GR+GO $ - 0.0% 0.0% $ - Contrator Loading Equals 0.00% of Hard Costs (incl. contingcy.)
41 TOTAL CONSTRUCTION COSTS $ - 0% 0% $ -
42

HOME Rental Underwriting Guide The Compass Group, LLC

Sample Mixed Income Case Study Worksheet: 8. Sources and Uses
Page 18 of 20
NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
Detailed Sources and Uses Worksheet White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

43 TRANSACTION COSTS
44 Accounting Fees: Cost Certification Audit Fee $ - 0.0% 0.0% $ - Y
45 Accounting Fees: General $ - 0.0% 0.0% $ - Y
46 Application and Tax Credit Fees $ - 0.0% 0.0% $ - Y
47 Architect $ 100,000.00 1.0% 100.0% $ - Y
48 Bond Issuance $ - 0.0% 0.0% $ - Y
49 Builders' Risk $ - 0.0% 0.0% $ - Y
50 Building Permit Fees & Local Fees $ - 0.0% 0.0% $ - Y
51 Construction Loan: 3rd Party Reports/Inspect $ - 0.0% 0.0% $ - Y
52 Construction Loan: Financing Fee $ - 0.0% 0.0% $ - Y
53 Construction Loan: Interest During Construction $ - 0.0% 0.0% $ - Y
54 Construction Loan: Lender's Attorney Fee $ - 0.0% 0.0% $ - Y
55 Construction Loan: Origination Fee $ - 0.0% 0.0% $ - Y
56 Construction Period: Insurance $ - 0.0% 0.0% $ - Y
57 Construction Period: Taxes $ - 0.0% 0.0% $ - Y
58 Consulting Fees (not payable through dev fee) $ - 0.0% 0.0% $ - Y
59 Engineer $ - 0.0% 0.0% $ - Y
60 Environmental Study $ - 0.0% 0.0% $ - Y
61 Furniture, Fixtures and Equipment $ - 0.0% 0.0% $ - Y
62 Legal: Owner Attorney/Borrower (EB) $ - 0.0% 0.0% $ - Y
63 Legal: Owner Attorney/Borrower Legal (Not EB) $ - 0.0% 0.0% $ - N These are legal fees which are not basis-eligible
64 Market Study / Appraisal $ - 0.0% 0.0% $ - Y
65 Marketing and Leasing $ - 0.0% 0.0% $ - Y
66 Miscellaneous / Other (Basis Eligible) $ - 0.0% 0.0% $ - Y
67 Miscellaneous / Other (NOT Basis Eligible) $ - 0.0% 0.0% $ - N These are miscellaneous fees which are not basis-eligible
68 Partnership Legal and Organizational $ - 0.0% 0.0% $ - Y
69 Permanent Loan: 3rd Party Reports $ - 0.0% 0.0% $ - Y
70 Permanent Loan: Financing Fee $ - 0.0% 0.0% $ - Y Equals 0.00% of permanent loan amount
71 Permanent Loan: Lender's Attorney Fee $ - 0.0% 0.0% $ - Y
72 Permanent Loan: Origination Fee $ - 0.0% 0.0% $ - Y Equals 0.00% of permanent loan amount
73 Survey $ - 0.0% 0.0% $ - Y
74 Title and Recording $ - 0.0% 0.0% $ - Y
75 Other Transaction Cost 1 (Specify) $ - 0.0% 0.0% $ - Y
76 Other Transaction Cost 2 (Specify) $ - 0.0% 0.0% $ - Y
77 Other Transaction Cost 3 (Specify) $ - 0.0% 0.0% $ - Y
78 Other Transaction Cost 4 (Specify) $ - 0.0% 0.0% $ - Y
79 Other Transaction Cost 5 (Specify) $ - 0.0% 0.0% $ - Y
80 Other Transaction Cost 6 (Specify) $ - 0.0% 0.0% $ - Y
81 Other Transaction Cost 7 (Specify) $ - 0.0% 0.0% $ - Y
82 Other Transaction Cost 8 (Specify) $ - 0.0% 0.0% $ - Y
83 Other Transaction Cost 9 (Specify) $ - 0.0% 0.0% $ - Y
84 Other Transaction Cost 10 (Specify) $ - 0.0% 0.0% $ - Y
85 Other Transaction Cost 11 (Specify) $ - 0.0% 0.0% $ - Y
86 Other Transaction Cost 12 (Specify) $ - 0.0% 0.0% $ - Y
87 Other Transaction Cost 13 (Specify) $ - 0.0% 0.0% $ - Y
88 TOTAL TRANSACTION COSTS $ 100,000.00 1% 100% $ -
89
90 ESCROW ACCOUNTS
91 Initial Deposit to Reserve for Replacements $ 10,000,000.00 99.0% 100.0% $ - N
92 Property Tax Escrow $ - 0.0% 0.0% $ - N
93 Hazard Insurance Escrow $ - 0.0% 0.0% $ - N
94 Debt Service Reserve $ - 0.0% 0.0% $ - N
95 Operating Reserve/Working Capital $ - 0.0% 0.0% $ - N
96 Lease-Up Reserve $ - 0.0% 0.0% $ - N
97 Other Escrow 1 (Specify) $ - 0.0% 0.0% $ - N
98 Other Escrow 2 (Specify) $ - 0.0% 0.0% $ - N
99 Other Escrow 3 (Specify) $ - 0.0% 0.0% $ - N
100 TOTAL ESCROW ACCOUNTS $ 10,000,000.00 99% 100% $ -
HOME Rental Underwriting Guide The Compass Group, LLC
Sample Mixed Income Case Study Worksheet: 8. Sources and Uses
Page 19 of 20
NSP Multifamily Toolkit Bold, Green Highlight Cells Denote USER INPUT
Multifamily Property Underwriting Template Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES
Detailed Sources and Uses Worksheet White Cells Denote CALCULATED RESULTS

Property: 0 0 Total units, including 0 non-revenue unit(s)

101
102 GROSS DEVELOPER FEE
103 Total Gross Developer Fee $ - 0.0% 0.0% $ - Y Enter entire developer fee, before deferral
104 TOTAL GROSS DEVELOPER FEE $ - 0% 0% $ -
105
106 TOTAL USES $ 10,100,000.00 100% 100% $ -

HOME Rental Underwriting Guide The Compass Group, LLC

Sample Mixed Income Case Study Worksheet: 8. Sources and Uses
Page 20 of 20