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<br />MWF Apartment Proposal
<br />January 16, 2018
<br />Page 2
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<br />SOURCES
<br />Amount Pct.Per Unit
<br />First Mortgage 6,074,700 41%101,245
<br />TIF Note 546,000 4%9,100
<br />MWF GP Loan 516,192 4%8,603
<br />Low Income Housing Tax Credits 3,814,404 26%63,573
<br />Energy Rebate 1,800 0%30
<br />Minnesota Housing Deferred Loan 1,736,000 12%28,933
<br />Ramsey County HRA HOME Loan 400,000 3%6,667
<br />Met Council LHIA Deferred Loan 500,000 3%8,333
<br />Deferred Developer Fee (81% of Total Fee)1,059,223 7%17,654
<br />TOTAL SOURCES 14,648,319 100%244,139
<br />USES
<br />Amount Pct.Per Unit
<br />Acquisition Costs 655,461 4%10,924
<br />Construction Costs 11,036,876 75%183,948
<br />Professional Services 523,000 4%8,717
<br />Financing Costs 765,729 5%12,762
<br />Developer Fee 1,300,000 9%21,667
<br />Cash Accounts/Escrows/Reserves 367,253 3%6,121
<br />TOTAL USES 14,648,319 100%244,139
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<br />1. Acquisition Costs – Acquisition costs of approximately $11,000 per unit are within
<br />the typical market range of $5,000 to $15,000 per unit.
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<br />2. Total Development Costs (TDC) – The TDC is approximately $14.65 million or
<br />$244,000 per unit. Multi-family projects in this market generally range between
<br />$225,000 and $275,000 per unit.
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<br />3. Developer Fee – The proposed developer fee is approximately 9% of TDC, which is
<br />within the typical industry range of 8-10% for LIHTC projects. The Developer is also
<br />deferring approximately 81% of their developer fee. The deferred portion of the fee is
<br />then paid to the Developer through future cash flow, which is projected to take
<br />approximately 13 years and is longer than the typical 8-10 years. The reasonable
<br />developer fee and higher deferred fee helps minimize the project’s funding gap.
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<br />4. Rents – The proposed rents are within 5% of the regulatory maximum allowed to be
<br />charged in projects using LIHTC proceeds.
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<br />5. Operating Expenses – The operating expenses of approximately $3,900 per unit per
<br />year are within the typical range of $3,500 to $4,500 per unit per year.
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<br />6. Management Fee – The proposed management fee of 5.8% of revenue is higher than
<br />the typical 3% to 5% of revenue; however, reducing the fee has a nominal impact
<br />because this relatively small project produces less revenue.
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<br />7. Reserves – The annual deposit to replacement reserves is set at $450 per unit per year,
<br />which is typical for projects that include financing from Minnesota Housing.
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