Investor Perspective on Redeveloping Public Housing

IPEDMarch 29, 2007

Bernie Husser

2

Status of the Current Tax Credit Market

• 2006 Was Volatile Year

• Stability in 2007?

• Pricing/Demand is Strong

• Gulf Coast Credit Pricing

3

Tax Credit Yields Vs. 10-year Treasuries

2%

3%

4%

5%

6%

7%

8%

00

Q3

01

Q1

01

Q3

02

Q1

02

Q3

03

Q1

03

Q3

04

Q1

04

Q3

05

Q1

05

Q3

06

Q1

06

Q3

07

Q1

Tax Credit Yields

(After Tax)

10-Year Treasuries

4

Investor Perceptions of Public Housing Redevelopment

What Makes Good Partners:

• Capacity of Development Team – Experience, Track Record

• Financial Strength of Guarantor

• Property Manager Experience

• Tax Credit Compliance & Investor Reporting

5

Public Housing Redevelopment in Gulf Coast

Business Issues:

• Public Housing Optg Subsidy Changes (PEL)

• Expense Underwriting

• Supply & Demand Underwriting

• Section 8

• Moderate Rehabilitation

6

Public Housing Redevelopment in Gulf Coast

Tax Issues:

• State Tax Credits/Historic Credits

• Placed-in-Service Risk

• Bonafide Debt (Residual Analysis)

8

Investor Perspective on Redeveloping Public Housing

IPED

March 29, 2007

St. Petersburg, FL

Bernie Husser