2018 MHEG Annual Report

Midwest Housing Equity Group 2018 Annual Report

Under Every Roof, There is a

Story.

Corporate Philosophy Mission Statement:

Midwest Housing’s mission is to change lives for a better tomorrow by promoting the development and sustainability of quality affordable housing.

Vision:

Midwest Housing aspires to be the leading regional syndicator of low-income housing tax credits, recognized for its excellent track record of selecting, investing in and protecting quality real estate developments that revitalize the communities in which they are built.

Core Values:

Integrity: as fiduciaries, we are honest and up front in all of our transactions, avoiding even the appearance of impropriety or conflict of interest transactions.

Stewardship: we are excellent stewards of our investments (and thus the residents), honoring our written and implicit commitments to our investors, developers, residents and communities.

Excellence: we strive to be the best in the business, employing the best individuals, utilizing up-to-date processes and infrastructure, and conservative underwriting parameters.

Local Presence: we are and will remain local, believing that a “boots on the ground� approach is the best way to understand and protect the developments.

Employee-Focused: our employees are our strength. Recognizing that, we endeavor to provide ongoing development, training and advancement opportunities, to respect a work/ life balance and to recognize and reward personal, department and company achievements.

Contents

Message from our President

1

Warren’s Story

3

Victoria’s Story

5

Marshal’s Story

7

MHEG Portfolio Summary

9

2018 Developments

11

Equity Summary

13

Board of Directors & Committee Members

14

MHEG Staff

15

President & CEO’s Message Hello Friends! Thank you for taking the time to read our 2018 Annual Report. As always, we are excited to share our successes, your successes and our residents’ successes with all of our partners. The theme of our 2018 Annual Report is “Under Every Roof, There Is A Story.” The following resident profiles prove that statement. These are profiles of challenge, of adversity, of hardship. More importantly, these are profiles of hope, of beating the long odds and of lives changed for a better tomorrow. These residents, and their experiences, remind us that what we all do matters. They also give rise to a simple truth - a safe, decent and affordable home is the bedrock upon which people can build a successful life. And, in the alternative, demonstrate that the lack of a good place to call home makes it near impossible to hold down a job, complete a good education, maintain a healthy lifestyle and raise our kids.

We are grateful to work with each of you to help build the roofs that create these success stories. In 2018, we raised over $200 million of new capital. We invested in 27 developments, helping build 1,399 safe, decent and affordable rental homes. On the MHEG side, I want to thank our great team and our volunteer Board of Directors and Operations & Investment Committee members. It is an honor to work alongside each of you as we execute on our mission of Changing Lives for a Better Tomorrow!

Helping create and finance safe, decent and affordable housing is the raison d’etre for all of us at MHEG. There are thousands more stories of hope, of beating the long odds and of lives changed for a better tomorrow throughout the Midwest. If you, a resident or another individual have a story to share about how finding a safe, decent and affordable home changed a life, please let me know. The more we can communicate just how many lives are impacted, the more we can effectively advocate for more housing resources. Ultimately, it means we can all Change Lives for a Better Tomorrow! Please enjoy the rest of our 2018 Annual Report and be inspired by the great work you do!

John Wiechmann President/CEO

1

Under Every Roof, There is a

Story.

2

Warren’s Story

3

“I’m grateful for what I have, and I have to be conscious that it’s just not me that made it possible. I have to think of more than just myself, it comes with responsibility.”

Meet Warren. Two and a half years ago, he relocated to Des Moines from Chicago in hopes of changing his life. He was leaving behind a time of madness and trouble and ready for a new city, new start. Soon after his arrival, Warren relapsed and found himself homeless. He made his way to Bethel Mission men’s shelter where he was eventually given an ultimatum to join their life recovery program or leave. The decision was easy. After completing the program, he began employment and was offered an opportunity to live at Brickstones at Riverbend.

Today, Warren is in a much different situation. He spends his day cooking meals at Hope Ministries, the same organization that provided him shelter and rehabilitation. When he’s not working, he enjoys singing in his church’s choir group. He is content with his days being quiet and uncomplicated. He is humble and extremely appreciative of everyone that has helped him get to where he is today.

He considers it a blessing to be able to live at Brickstones. His favorite part about living there are the washer and dryer. On a recent afternoon, Warren was sitting quietly in his living room, looking at his apartment, his brand-new kitchen, and he was in awe, “It hit me, wow, this is all yours.”

Warren is very aware that the dark side of living is still alive and truly appreciates the chances he’s been given. “I’m grateful for what I have, and I have to be conscious that it’s not just me that made it possible. I have to think of more than just myself, it comes with responsibility.”

Brickstones at Riverbend is a multifamily property for persons 55 and over. It was developed by Anawim Housing and funded through MHEG Fund 46, LP. Anawim Housing, founded in 1987, is nonprofit organization that develops and manages affordable housing in the state of Iowa. In addition, Anawim provides several programs and services for their residents to ensure their success.

4

Meet Victoria. Originally from California, she and her family moved to Oklahoma many years ago looking for a change, not realizing how much change she would go through. Victoria was in an unhealthy relationship and knew she needed to leave. Unsure of what the future would bring, and scared to be on her own, she finally made the decision. When she and the kids left, they left everything - their home, their school, their belongings.

Victoria and her kids temporarily moved in with her mom, who lived nearby, while she searched for housing.

On a whim, Victoria stopped by South Rock Creek Estates not realizing it was an affordable housing development.

The property manager explained the program and went through all the forms needed for her to apply. After learning about the affordable rents and viewing the community, she knew she needed to get in there. “It’s not what you think it’s going to be, when you hear low-income,” explained Victoria. “I didn’t think they would be as nice as they are.”

A week after applying, she received the call that they had a house available.

Since moving into the home, Victoria says things have been moving forward. She works hard during the day at an auto body shop. In the evenings, she enjoys watching her kids play outside with all the children in the neighborhood. It’s been a fresh start for the family, they love the neighborhood, the schools; they feel safe and everyone is happier. “It’s a foundation, and if your foundation is solid, then anything can happen.”

Victoria is so appreciative to be living at South Rock Creek Estates, “It may not be a lot to other people, but to people who have been through the things I have, it’s major. This is a really good program, it really is. It can really help people change their lives.”

Today, Victoria lives for routine and her children. She loves her new home and is excited to be decorating. She has plans to go back to college to become a counselor.

South Rock Creek Estates, located in Shawnee, Oklahoma, consists of 20 single family rental homes. It was funded through Oklahoma Fund IV, LP and developed by Excel Development Group.

“It’s a foundation. And if your foundation is solid, then anything can happen.”

5

Victoria’s Story

6

Marshal’s Story

Meet Marshal. About a year ago he moved into a Sheltering Tree Community, an affordable housing residence for persons with developmental disabilities, located in Omaha, Nebraska. He moved from his parents’ home and is living on his own for the first time. Marshal makes his own meals, is learning to do his own laundry, and follows his daily schedule of activities.

He spends time with the other residents of Sheltering Tree, watching sports on tv or enjoying movie night. They hang out in the community space and have the occasional impromptu dance party, Marshal loves to dance, or participate in group outings, such as bowling.

Marshal is employed at a nearby restaurant that he is transported to by MOBY, a local shared, advance reservation origin-to-destination complementary paratransit service for ADA certified residents.

7

“Security. If anything happens to us, he has a place to go to.”

Marshal is proud to show you around his new apartment, and his parents, Rod & Luann, are just as excited for Marshal’s new apartment. Since moving in they’ve already noticed an increased level of confidence and independence. They are also happy to see the extended family Marshal is developing. “If anything happens to us, he has a place to go,” explains Rod grateful Marshal is living in a community that can provide security in the future if anything were to happen to them.

Many of the residents of Sheltering Tree have experienced similar positive outcomes. They’ve formed a group of support and friendships among each other. Their quality of life and level of happiness has grown in the short time since they’ve been residents of the newly constructed Sheltering Tree property.

This property was developed by J Development Company and funded through MHEG Fund 46, LP. It provides 24 units for people with developmental disabilities. Sheltering Tree is a non-profit organization that was founded in 2006, to help address the shortage of supportive housing options for developmentally disabled adults. They provide empowerment initiatives to assist residents in reaching a great level of independence in their lives.

8

2018 Portfolio Summary 20,000 units

Breakdown of Development Type

42%

34%

multifamily

15,000 units

17,074 units

age restricted single family

10%

special needs

14%

10,000 units

5,000 units

1993 1994 1995 1996 1997 1998 1999

MHEG TOTAL

9

2000 2001 2002 2003 2004 2005 2006 2007

ARKANSAS

COLORADO

2008 2009 2010 2011

IOWA

2012 2013 2014 2015 2016 2017 2018

KANSAS

MINNESOTA

MISSOURI

Developments

546

8

10

78

142

3

22

Housing Units

17,074

288

859

2,701

3,972

106

1,167

Counties

198

8

7

27

49

3

19

Cities

247

8

7

34

65

3

19

Development Status operational

74 %

lease-up construction

18 %

disposed

6%

2%

Development Size

0-12 units

21%

34%

13-24 units 25+ units

45%

Development Location

59%

rural urban

5%

suburban

36%

Construction Type new

77%

rehab historic rehab

7%

16% NEBRASKA

OKLAHOMA

S. DAKOTA

TEXAS

205

64

7

7

5,121

2,295

283

282

50

28

2

5

66

38

2

5

10

2018 Developments In 2018, MHEG partnered with 27 developers to close over $175 million in equity for 37 developments, creating 1,399 affordable housing units. This included 15 age restricted developments, 15 multifamily developments, four single family home properties and three special needs housing developments. Projects ranged from an 8 unit rural deal to a 108 unit age restricted deal and represented 37 Midwest communities.

Colorado

Kansas continued

Nine Mile Station Senior Living, LLC Aurora - 50 age restricted units Developed by: Community Housing Development Association

Eastridge Villas, LLC Scott City - 20 age restricted units Developed by: Mesner Development Co.

Iowa 1314 W 3rd LLC Sioux City - 20 multifamily units Developed by: Arch Icon Development Corp

Link of Hutchinson, L.L.C. Hutchinson - 17 special needs units Developed by: Manske & Associates, LLC

CHI Penn Oaks, LLLP North Liberty - 38 multifamily units Developed by: Community Housing Initiatives, Inc.

Link of Hutchinson II, L.L.C. Hutchinson - 12 multifamily units Developed by: Manske & Associates, LLC

Immanuel Elderly Housing II, LLC Council Bluffs - 56 age restricted units Developed by: Immanuel Health Systems

Merriam Sunflower LLC Merriam - 108 age restricted units Developed by: Merriam Consultants, LLC

Sunset Spencer, LLLP Spencer - 91 age restricted units Developed by: Community Housing Initiatives, Inc.

Solana Village Townhomes, LLC McPherson - 18 special needs units Developed by: Disability Supports of the Great Plains, Inc.

Kansas

11

Ellinwood Properties, LP Ellinwood - 24 multifamily units Developed by: MACO Development Company, LLC

Sunflower Gardens III, LLC Valley Center - 28 age restricted units Developed by: Mennonite Housing Rehabilitation

Bethel Estates of Gardner Phase IV, LP Gardner - 48 age restricted units Developed by: Wheatland Investments, LLC

Waterman Residences, LLC Wichita - 11 multifamily units Developed by: Vintage Construction, LLC

Buchanan’s Crossing Subdivision Kansas CIty II LP Kansas City - 8 multifamily units Developed by: Tartan Residential, Inc. & Allen Associates

Ybarra Place II LLC Topeka - 14 multifamily units Developed by: Mesner Development Co.

Missouri

Oklahoma

Finney Place LP St. Louis - 40 single family units Developed by: Finney Place Developer, LLC

Highland Trails LLC Duncan, Chickasha, Marietta - 100 single family units Developed by: LW Development, LLC

Oak Point Partners, LLC Kansas City - 30 multifamily units Developed by: CC&E, LLC

Jasmine Court LLC Cushing - 24 multifamily units Developed by: Excel Development Group

Rocktree Fulton, LP Fulton - 64 age restricted units Developed by: Holden Communities, LLC

Magnolia Ridge Apartments, LLC Stillwater - 23 multifamily units Developed by: Excel Development Group

Teal Lake Village Mexico, LP Mexico - 40 multifamily units Developed by: Holden Communities, LLC

Shady Acres, LLC Ardmore - 87 multifamily units Developed by: LW Development, LLC

The Villas of Smithville, L.P. Smithville - 34 age restricted units Developed by: Midcontinent Equity Holdings LLC

The Estates of Midwest City, LP Midwest City - 66 age restricted units Developed by: Wheatland Investments, LLC

Village Meadow LP Boonville - 52 age restricted units Developed by: Southeast Holding, LLC

Washita Plains II, LLC Davis - 8 single family units Developed by: LW Development, LLC

Nebraska

South Dakota

Adams Park Crown I Limited Partnership Omaha - 16 single family units Developed by: Holy Name Properties Inc.

Cleveland Center Apartments Limited Partnership Sioux Falls - 39 multifamily units Developed by: Y Housing II, LLC

Canterbury Estates, LLC Sidney - 10 special needs units Developed by: Sidney Housing Authority

Texas

Eastbrooke Gardens, LP Kearney - 32 multifamily units Developed by: Dana Point Development Corporation

OPG Lamar Partners, LLC Wichita Falls - 30 age restricted units Developed by: Overland Property Group

Jefferson Estates, LLC Fairbury - 16 age restricted units Developed by: Excel Development Group

OPG Wolfforth Partners, LLC Wolfforth - 49 age restricted units Developed by: Overland Property Group

Madison Villas, LP Madison & Norfolk - 48 multifamily units Developed by: Dana Point Development Corporation Nebraska City Senior Patio Homes, L.P. Nebraska City - 28 age restricted units Developed by: North Star Housing, LLC

12

Equity Summary

$1.5B

$1.97 billion

$2.0B

$1.0B

$500M

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

In 2018, MHEG raised over $200 million in equity capital. Since inception, MHEG has raised just under $2 billion of equity capital to invest in affordable housing.

13

Board & Committees Board of Directors Chris Hensley - Retired Vice President, Bank of the West - Chairman of the Board Dennis Brand - Chairman of the Executive Committee, BancFirst - Vice Chairman of the Board Barry Sandstrom - Retired President/CEO, Home Federal Bank - Secretary of the Board Frank Hayes - President, Hayes & Associates, L.L.C. Chris Hite - President, Sugar Creek Capital Kirk Kellner - Tri-State Regional President, Wells Fargo Nicole Theophilus - Chief Human Resource Officer, West Corporation John Wiechmann - CEO/President, Midwest Housing Equity Group

Committees

Audit Committee

Budget & Compensation Committee

Frank Hayes - Hayes & Associates

Dennis Brand - BancFirst

Chris Hensley - Retired, Bank of the West

Chris Hensley - Retired, Bank of the West

Chris Hite - Sugar Creek Capital

Barry Sandstrom - Retired, Home Federal Bank

Kirk Kellner - Wells Fargo

Nicole Theophilus - West Corporation

Central Region Operations & Investment Committee

Northwest Region Operations & Investment Committee

Bob Arthur - Commerce Bank, N.A.

David Fisher - Midwest Housing Development Fund

Mark Dennett - INTRUST Bank, N.A.

Tim Hart - First National Bank of Omaha

David Fisher - Midwest Housing Development Fund

Justin Horst - Pinnacle Bank

Tracy Howren - UMB Bank, n.a.

Randy Ilich - Colorado Federal Savings Bank

Michael Scheopner - Landmark National Bank

John Wiechmann - Midwest Housing Equity Group

John Wiechmann - Midwest Housing Equity Group

South Region Operations & Investment Committee Northeast Region Operations & Investment Committee Jennifer Cooper - Bankers Trust Tom Hanafan - Pottawattamie County Board of Supervisors Chris Hensley - Retired, Bank of the West Susan Whitson - First National Bank of Waverly John Wiechmann - Midwest Housing Equity Group

Brent Bates - Bank SNB Roger Beverage - Oklahoma Bankers Association Dennis Brand - BancFirst Tom O’Keefe - INTRUST Bank, N.A. John Wiechmann - Midwest Housing Equity Group Mike Wynn - Mabrey Bank

14

MHEG Staff Executive Staff

15

John Wiechmann Chief Executive Officer & President

Becky Christoffersen Chief Investment Officer

Jordan Abboud Vice President of Asset Management

Pat Michaelis Vice President Business Development Officer Central Region

Jason Main Chief Financial Officer

Ann Burge Chief Operating Officer

Tom Stratman Vice President of Acquisitions

Andrea Frymire Scott Fitzpatrick Vice President Vice President Business Development Officer Business Development Officer South Region Northeast Region

Evan Andrews Financial Analyst

Kelli Baker Asset Manager

Lisa Bryan Administrative Coordinator

Sara Church Asset Manager

Traci Collins Acquisitions Manager

Tracy Connor Corporate Accountant

Dustin Daugherty Construction Manager

Sammy Ehtisham Assistant Vice President of Acquisitions

Shannon Foster Accounting Manager

Steve Gross Senior Financial Analyst

Ryan Harris Acquisitions Manager

Brett Helt Financial Analyst Asset Stabilization

Jake Jacobsen Construction Manager

Shannon Johnson Accounting Assistant

Cindy Koster Senior Acquisitions Manager

Keely McAleer Corp. Communications & HR Administrator

Dana Oswald Accounting Coordinator

Shannon Powers Closing Manager Real Estate

Mike Powley Deputy Director of Operations

Cole Rogers Financial Analyst

Brooke Smith Senior Asset Manager

Laurie Stephenson Deputy Director of Compliance

Joshua Yurek Director of Government Affairs

Paul McDonald Senior Asset Manager

Sharita Nelson Compliance Specialist

Amanda Raak Financial Analyst

Josh Rauner Fund Reporting Manager

Brad Reiff Acquisitions Manager

Deb Swanson Closing Manager

Shellie Vandeman Compliance Specialist

Cindy Wieck Administrative Assistant

Midwest Housing Equity Group 515 N. 162nd Avenue, Suite 202 Omaha, NE 68118 www.mheginc.com