NHPF AnnualReport 2017

Investing In Lives Building Community

2017 was as busy a year for NHPF as any in recent history. In addition to closing on six acquisitions totaling 975 units, we identified 1,021 units to be acquired for

housing in Cambridge, MD is well along, and we were selected to work with the Spartanburg Housing Authority for 285 units in the fall of 2017. There is an increased focus across the country on financing the redevelopment of public housing units and our successful track record positions us to access these opportunities to pursue our mission and improve the living conditions of the residents. In addition to several preservation projects that are planned or underway, we are working on three new ground-up construction transactions. Two of these are in the District of Columbia and one is in Chicago. All will be affordable properties. When the Chicago development is complete, it is expected to be a 20+ story high rise. Also in Chicago, we have completed redevelopment and expect to close on the recapitalization of our first SRO project in 2018. These very different transaction types are a testament to both the breadth and depth of the organization and its staff. They embody our mission which has always been and will continue to be the preservation of service enriched affordable rental housing. In order to deliver on this mission, we rely on the collection and analysis of both resident and community data that provides us the full picture of the people we are dedicated to serving. Equipped with this data, we evaluate what needs are going unmet and how best to ensure low to moderate income people have sustainable housing they can afford. We are proud to continue delivering on our commitment to invest in lives and communities.

a new PNC equity fund. Additionally, during 2017 we had four development deals in construction and all progressed on time and within their respective budgets. It was also a year of more uncertainty than most, starting with the aftermath of the 2016 presidential election. The year saw instability in the tax credit markets, the possible, but not eventual, loss of the Private Activity Bond program as well as the passage of tax reform. The reduction of the corporate tax rate to 21% will negatively impact tax credit equity value in the future. Fortunately, as a result of hard work, and some loyal investors, none of NHPF’s deals in 2017 were materially impacted by these factors. The work of predevelopment that involves design, financing and due diligence is progressing on ten properties including three in Chicago, one in Maryland, four in Washington, DC, one in Connecticut, and one in Florida. The work on this pipeline of new developments will be the source of transaction income for 2019- 2020. In addition, NHPF staff is actively working on more than eleven transactions that are in an earlier stage of predevelopment. NHPF continues to work with several Housing Authorities. The redevelopment of 190 units of public

Richard F. Burns NHPF President & Chief Executive Officer

NHPF Fiscal Year 2017 Annual Report 3

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