April 2019 Newsletter

Volume 12, Issue 1

Staff Announcements

Cole Rogers, Financial Analyst

April 2019

Evan Andrews, Financial Analyst

Cole joined MHEG as a Financial Analyst in our Omaha office last year. His duties will include overseeing a development portfolio with financial reviews, site visits and problem resolution/workouts as needed. Prior to MHEG, Cole worked for an asset management firm that managed multifamily and senior housing financed with LIHTCs. He is a graduate of the Northwest Nazarene University with a degree in Accounting and Business Administration.

Tracy Connor, Corporate Accountant

Keeping you up to date on MHEG in just a minute’s time.

Evan joined MHEG as Financial Analyst in our Omaha office last October. His duties will include overseeing a development portfolio with financial reviews, site visits and problem resolution/workouts as needed. Evan is a recent graduate from the University of Northern Iowa, majoring in Finance and Economics.

Kelli Baker, Asset Manager

Tracy joined MHEG as our Corporate Accountant last October in our Omaha office. Her duties include a variety of accounting tasks to support the CFO and accounting department. Tracy comes to MHEG with over five years of accounting experience. She is a graduate of the University of Nebraska with a Masters of Accounting and an undergraduate degree in Business Administration – Accounting.

MHEG in a Minute Volume 12, Issue 1

April 2019

NIFA Conference Awards

Inside this Issue: Recent Highlights

1

CEO Update

2

Region Updates

2, 3

Property Spotlight

4

Government Affairs Update 4

Kelli joined MHEG as an Asset Manager in our Omaha office last October. Her duties will include overseeing a development portfolio with financial reviews, site visits and problem resolution/workouts as needed. Kelli has over six years of property management experience, most recently she worked for Seldin Company.

Closed Acquisitions

4

Recent Events

5

Staff Updates

6

Upcoming Events

6

Monthly LIHTC Rates December 2018

MHDF Receives Capital Magnet Fund $3M Grant

30%PV 3.30% AFR 3.15%

The US Treasury Dept. CDFI Fund awarded a $3 million grant from the Capital Magnet Fund (CMF) to MHDF in February. This is the fourth round of CMF awards since the fund began in 2010 and the first CMF grant for MHDF. Over 100 organizations throughout the country applied for a total of $570 million. Thirty-eight awards were made for $142.9 million.

February 2019 30%PV 3.27% March 2019

MHDF expects to contribute to the creation and preservation of more than 500 affordable rental units over five years in Kansas and Oklahoma with the CMF grant funds, leverage, and revolved loan funds. More than half of these rental homes will be available and affordable to households with very low incomes. Lara Huskey, MHDF Executive Vice President, identified the Capital Magnet Fund as part of a strategy to bolster the MHDF Loan Fund and increase funding that is invested in affordable housing in the Midwest from national resources.

She took the lead on application preparation and submission, and is responsible for implementation of what MHDF hopes is the first of many CMF grants.

30%PV 3.27% AFR 2.91% April 2019 30%PV 3.27%

Upcoming Events

NIFA Board Meeting: April 19th Lincoln, NE - NIFA Board Room CHFA Board Meeting: April 25th Denver, CO - CHFA Board Room TDHCA Board Meeting: April 25th Austin, TX - Capitol Extension Auditorium

May

IFA Board Meeting: May 1st Des Moines, IA - IFA Office KHRC Board Meeting: May 2nd Topeka, KS - KDFA Board Room OHFA Board Meeting: May 15th Oklahoma City, OK - OHFA Office TDHCA Board Meeting: May 23rd Austin, TX - Capitol Extension Auditorium CHFA Board Meeting: May 23rd Denver, CO - CHFA Board Room

AFR 2.89%

June

**Save the Date** MHEG Annual Meeting & Golf Outing: June 3rd Ashland, NE - Quarry Oaks Golf Course IFA Board Meeting: June 5th Des Moines, IA - IFA Office KHRC Board Meeting: June 6th Topeka, KS - KDFA Board Room AHAA Conference: June 12th-13th Little Rock, AR - Wyndham Hotel NIFA Board Meeting: June 21st Lincoln, NE - NIFA Board Room MOWHA Annual Conference: June 26th-28th Columbia, MO - Holiday Inn Executive Center CHFA Board Meeting: June 27th Denver, CO - CHFA Board Room TDHCA Board Meeting: June 27th Austin, TX - Capitol Extension Auditorium

Mesner Development Co., Schuyler Community Schools, Cargill, QC Supply, Nebraska Department of Economic Development, City of Schuyler, Schuyler Department of Utilities, Pinnacle Bank-Schuyler, Midwest Housing Development Fund

January 2019

AFR 2.91%

ADFA Board Meeting: April 18 Little Rock, AR - ADFA Office

Kracl Meadows, located in Schuyler, Nebraska, provides 14 age-restricted units. Funded by MHEG Fund 44, LP.

Congratulations to these organizations on their achievements, MHEG is proud to partner with these outstanding leaders.

AFR 3.31%

Jordan Abboud, promoted to Vice President of Asset Management Steve Gross, promoted to Senior Financial Analyst Paul McDonald, promoted to Senior Asset Manager Brooke Smith, promoted to Senior Asset Manager

April

In addition to Schuyler Community Development, the following organizations played a major role in the success of the creation of the two projects:

NIFA also recognized Cris Larson, of Mesner Development Co, as Property Manager of the Year.

30%PV 3.32%

Staff Promotions

Last month, Nebraska Investment Finance Authority (NIFA) hosted their annual Housing Innovation marketplace Conference. During the conference, NIFA awarded Schuyler Community Development its Innovative Project award for the establishment of Kracl Meadows and Workforce Housing Projects in Schuyler and utilization of a partnership environment that made both projects possible.

Please note we will no longer show the 70% PVC rate as it was permanently fixed at 9% in December 2015. For more information view the Protecting Americans from Tax Hikes Act of 2015.

July

IFA Board Meeting: July 10th Des Moines, IA - IFA Office

Portfolio Update

OHFA Board Meeting: July 10th Oklahoma City, OK - OHFA Office

Developments

KHRC Board Meeting: July 11th Topeka, KS - KDFA Board Room

Units

TDHCA Board Meeting: July 25th Austin, TX - Capitol Extension Auditorium CHFA Board Meeting: July 25th Denver, CO - CHFA Board Room

551 17,349

Counties Represented

187

Cities Represented

228

Vacancy Percentage

6.07%*

Debt Coverage Ratio

2.06*

Information current as of 4/20/18 *Data compiled from 12/31/17 figures using stabilized developments only, vacancy percentage is using economic vacancy.

August

KHRC Board Meeting: Aug. 1st Topeka, KS - KDFA Board Room

If you would like to receive our newsletter by email, go to our homepage to signup. For past issues of MHEG in a Minute check our website under News & Events.

IFA Board Meeting: Aug. 7th Des Moines, IA - IFA Office NIFA Board Meeting: Aug. 16th Lincoln, NE - NIFA Board Room

For any other inquiries about the content of this newsletter, please contact Keely McAleer.

CHFA Board Meeting: August 22nd Denver, CO - CHFA Board Room 6

The CMF was established under the Housing and Economic Recovery Act of 2008 which requires the housing government sponsored entities (GSEs) Fannie Mae and Freddie Mac to contribute to the CMF and the National Housing Trust Fund (HTF). CMF was created to spur investment in affordable housing and related economic development efforts that serve low-income families and low-income communities across the country.

We’re Hiring! Come Join Our MHEG Team.

MHEG is looking to hire associates to join our MHEG team! For complete job descriptions and requirements, visit our website’s Employment page. To apply, email your resume to Keely McAleer.

Closing Manager - The Closing Manager works closely with our Acquisitions Managers to close our Funds’ investments in various multifamily residential real estate developments (“Operating Partnerships”) financed with federal Low Income Housing Tax Credits (“LIHTC”). This person leads the due diligence collection/ review process and keeps our investments on track for timely closing. The Closing Manager also plays a critical role developing and maintaining MHEG’s relationships with our developer partners.

Financial Analyst - Responsible for helping asset manage MHEG investments in multiple affordable housing developments financed with LIHTCs. This individual works with affordable housing developers, property managers and accounting firms. The Financial Analyst handles the intake and review of Operating Partnership financial reporting, and supports Asset Managers in their role of improving the financial, operational and physical health of our investments. This individual also helps foster strong relationships with our various partners.

1

Volume 12, Issue 1

Keeping you up to date on MHEG in just a minute’s time.

CEO Update

Northeast Region Update

John Wiechmann Greetings Friends and Happy Spring! It’s hard to believe the first quarter of 2019 is already over. That means we’re past audit and tax season! Big thanks to all of our partners for getting through that important work.

Looking back on 2018, I’m happy to report it was another successful year. We raised over $200M in equity capital and deployed over $178M, helping finance more than 1,400 quality affordable rental homes throughout the Midwest. This success is yours more than it is ours. You, our investors, developers, contractors, managers, lenders, financing partners and government officials, worked together to create this much-needed housing. We are honored you let us be a part of it. Only through you can we execute on our mission of Changing Lives for a Better Tomorrow!

Scott Fitzpatrick Turning to 2019, there’s lots of exciting activity happening across our footprint. On the legislative front, there is work to be done on both the Federal and state levels. At the Federal level, we await the reintroduction of the Affordable Housing Credit Improvement Act. Please take a minute to read the included article from Josh Yurek, our Director of Government Affairs.

Hard to believe that Josh has been with the MHEG team for just over a year already! He does a great job increasing our delegations’ awareness of the need for more affordable housing resources. At the state level, legislatures are in session. Several are examining change to their state credit programs. Please engage with the state housing advocacy organizations in your state. Our Business Development Officers (Andrea, Pat and Scott) can help you get involved.

On the investment/development front, a couple states have already awarded their tax credits, with several more states scheduled to award in the next few months. As always, the awards process is bittersweet.

It’s great to see worthy developments receive awards, knowing that more quality affordable rental homes are on the horizon. But it’s also frustrating to see many other worthy developments go unfunded. The process reminds us that we need more resources in order to provide safe, decent and affordable homes for all families. As you move forward with your financing plan, please let us know how we can help. Whether it’s the application phase or the closing phase, we’re here for our partners.

John Wiechmann, Pat Michaelis and Josh Yurek, along with the Kansas Housing Assocation, visit with Senator Pat Roberts (R-Kansas) in Washington, D.C.

Thank you again for allowing us to execute on our mission. We look forward to partnering with you this year and changing even more lives for a better tomorrow. See you on June 3rd at our Annual Meeting!

Central Region Update Pat Michaelis There is a lot going on in the Central Region, but it’s the hurry up and wait game. Kansas applications are being reviewed

by KHRC; the Missouri LIHTC program is being reviewed by the Missouri Legislature; and MHEG Fund 51 has just been released.

KHRC LIHTC selections are usually announced late April/early May, we will not have to wait much longer. Total allocations will be around $5.5M, unless additional amounts are forward allocated. Forty-three applications were submitted, making it another competitive round.

The Missouri Legislature is working to revise the state’s robust LIHTC program. The House passed a bill at 72 cents per dollar of federal allocation. The Senate has yet to act on the bill, so time will tell if 72 cents holds. Once the bill is passed and signed, the QAP will be released, followed by public hearings. We hope to be submitting applications by 4th quarter.

MHEG Fund 51 was just released. Work has already begun contacting potential investors and the response is very positive. As you know, when MHEG commits to syndicate your development, we have the funds raised.

MHEG staff - John Wiechmann, Josh Yurek and yours truly - joined the Kansas Housing Association in Washington DC the first week in April. As you are aware, legislative action and the stroke of the pen are our biggest risks as an industry. Meeting, developing relationships and educating the Kansas delegation on the benefits and ways to improve the program are critical to our future. This year, we had two new Kansas Representatives, Steve Watkins and Sharice Davids to meet, along with Representatives Estes and Marshall, and Senators Roberts and Moran.

We have had solid relationships with the Kansas Delegation and want to thank former Congressman Kevin Yoder and Congresswoman Lynn Jenkins for their support. We look forward to working with new Representatives Watkins and Davids.

As always, the Central team is willing and able to assist you. We very much appreciate your business relationship and friendship.

2

April 2019

MHEG staff at the Kansas Appreciation dinner at the Dillon House in Topeka, Kansas, last September.

Today, I’d like to discuss the recent formation of the Iowa Housing Partnership (IHP). IHP was formed to be a state-wide organization dedicated to advocacy for affordable housing issues within Iowa.

Leaders from several housing organizations, including MHEG, came together to support the entity formation. The 501(c)(3) status for the organization is currently pending.

Membership Fees are $500 per year for for-profit entities, $250 per year for non-profit entities, $100 per year for individuals. There are also Charter Memberships available for $2,500. Thus far we have had over 50 organizations and individuals register to become members.

As many of you are aware, numerous states already have established housing advocacy organizations; Iowa was kind of like the hole in the donut without one. Having seen the progress similar organizations have had in the surrounding states, local industry leaders supported the creation of an Iowa based organization. A board of directors has been elected, and I am honored to be serving as the Vice-Chair of the board.

Please contact me to learn more information or find us on Facebook @iowahousingpartnership.The stronger and more diverse our membership, the more impact we will have!

Northwest Region Update Tom Stratman

The end of 2018 was a busy time for the Northwest Region. We closed five deals in the 4th quarter, four in Nebraska and one in Colorado. All Nebraska closings were with long-time partners of MHEG – Excel Development Group, The Sidney Housing Authority (Scottsbluff Housing Authority), Holy Name Housing Corporation and Dana Point Development – we appreciate and value these continued partnerships. In Colorado, we closed our second deal with Community Housing Development Association in Aurora.

We closed one deal in the 1st quarter of 2019, a bond deal in Fort Collins, Colorado, with DMA Plaza Inc. The acquisition involves the renovation of an 11-story building in downtown Fort Collins preserving affordable housing for 100+ senior residents. That’s a number we can all be proud of! A big thank you to all the property management staff and to MHEG’s compliance team, who review and approve files for residents to move in.

Looking ahead in 2019, we anticipate closing an additional 17 deals in the Northwest Region. In Nebraska and Colorado, we have seen the benefits of state low income housing tax credits creating additional housing units. Colorado is currently debating legislation that would double the amount of state tax credits; we are hopeful this bill passes so more affordable housing can be provided in a state that desperately needs it.

In October, MHEG held its annual partner appreciation dinner for our South Dakota partners in Pierre, during the South Dakota Housing Development Authority housing conference. We also attended the Nebraska Investment Finance Authority Housing Innovation conference last month and hosted our annual dinner to thank our many partners in Nebraska. The event was held at the Strategic Air Command and Aerospace Museum in Ashland, where guests had dinner in one of the hangars surrounded by aircraft exhibits. We truly enjoy these opportunities to show you our gratitude for your partnership. Thank you for making the time in your schedule to attend and for supporting our mission of providing quality affordable housing.

South Region Update Andrea Frymire

Spring is here and all our partners’ applications are in with the respective HFAs. It will be a busy summer with awards coming in from Oklahoma, Texas and Arkansas between May and July. We look forward to award season which begins with Oklahoma in May. There are two significant bills related to the Oklahoma Affordable Housing Act working through the Oklahoma Legislature. HB1411-Nichols seeks to remove the county population cap, allowing all 77 counties to be able to compete for this valuable resource. HB1411 has passed the House and has moved on to the Senate. SB416-Bice seeks to cut funding for the Act in half by reducing the credit period from 10 years to 5 years.

SB416 has passed the Senate and been assigned to committee in the House.

Between 2015 and 2018, the Oklahoma Affordable Housing Act provided financing for 36 developments, creating over 2,000 units of affordable housing. These units extended across 24 counties in 28 different cities. The Oklahoma Housing Finance Agency allocated $15,332,125 in state affordable housing credits during this four-year period. The Oklahoma Department of Commerce conducted an economic impact study of the Act and found an overall economic impact of $575M. A copy of the report is available at: www.affordablehousingcoalition.org.

The Oklahoma Coalition for Affordable Housing will host their fourth annual Affordable Housing Day at the State Capitol in April. It is important for all participants in Oklahoma to reach out to their respective Representatives and Senators.

Showing your support at the state and national levels is one of the best things you can do for the industry.

We wish all our partners the best of luck on their pending applications and look forward to working with everyone on 2018 awards. We are excited to work with new HFA staff in Arkansas and Texas. Please do not hesitate to contact me if I may be of assistance.

It is a pleasure working with each and every one of you!

Guests attending our annual Oklahoma Appreciation Luncheon at Top Golf in Oklahoma City in November 2018.

3

Volume 12, Issue 1

Keeping you up to date on MHEG in just a minute’s time.

CEO Update

Northeast Region Update

John Wiechmann Greetings Friends and Happy Spring! It’s hard to believe the first quarter of 2019 is already over. That means we’re past audit and tax season! Big thanks to all of our partners for getting through that important work.

Looking back on 2018, I’m happy to report it was another successful year. We raised over $200M in equity capital and deployed over $178M, helping finance more than 1,400 quality affordable rental homes throughout the Midwest. This success is yours more than it is ours. You, our investors, developers, contractors, managers, lenders, financing partners and government officials, worked together to create this much-needed housing. We are honored you let us be a part of it. Only through you can we execute on our mission of Changing Lives for a Better Tomorrow!

Scott Fitzpatrick Turning to 2019, there’s lots of exciting activity happening across our footprint. On the legislative front, there is work to be done on both the Federal and state levels. At the Federal level, we await the reintroduction of the Affordable Housing Credit Improvement Act. Please take a minute to read the included article from Josh Yurek, our Director of Government Affairs.

Hard to believe that Josh has been with the MHEG team for just over a year already! He does a great job increasing our delegations’ awareness of the need for more affordable housing resources. At the state level, legislatures are in session. Several are examining change to their state credit programs. Please engage with the state housing advocacy organizations in your state. Our Business Development Officers (Andrea, Pat and Scott) can help you get involved.

On the investment/development front, a couple states have already awarded their tax credits, with several more states scheduled to award in the next few months. As always, the awards process is bittersweet.

It’s great to see worthy developments receive awards, knowing that more quality affordable rental homes are on the horizon. But it’s also frustrating to see many other worthy developments go unfunded. The process reminds us that we need more resources in order to provide safe, decent and affordable homes for all families. As you move forward with your financing plan, please let us know how we can help. Whether it’s the application phase or the closing phase, we’re here for our partners.

John Wiechmann, Pat Michaelis and Josh Yurek, along with the Kansas Housing Assocation, visit with Senator Pat Roberts (R-Kansas) in Washington, D.C.

Thank you again for allowing us to execute on our mission. We look forward to partnering with you this year and changing even more lives for a better tomorrow. See you on June 3rd at our Annual Meeting!

Central Region Update Pat Michaelis There is a lot going on in the Central Region, but it’s the hurry up and wait game. Kansas applications are being reviewed

by KHRC; the Missouri LIHTC program is being reviewed by the Missouri Legislature; and MHEG Fund 51 has just been released.

KHRC LIHTC selections are usually announced late April/early May, we will not have to wait much longer. Total allocations will be around $5.5M, unless additional amounts are forward allocated. Forty-three applications were submitted, making it another competitive round.

The Missouri Legislature is working to revise the state’s robust LIHTC program. The House passed a bill at 72 cents per dollar of federal allocation. The Senate has yet to act on the bill, so time will tell if 72 cents holds. Once the bill is passed and signed, the QAP will be released, followed by public hearings. We hope to be submitting applications by 4th quarter.

MHEG Fund 51 was just released. Work has already begun contacting potential investors and the response is very positive. As you know, when MHEG commits to syndicate your development, we have the funds raised.

MHEG staff - John Wiechmann, Josh Yurek and yours truly - joined the Kansas Housing Association in Washington DC the first week in April. As you are aware, legislative action and the stroke of the pen are our biggest risks as an industry. Meeting, developing relationships and educating the Kansas delegation on the benefits and ways to improve the program are critical to our future. This year, we had two new Kansas Representatives, Steve Watkins and Sharice Davids to meet, along with Representatives Estes and Marshall, and Senators Roberts and Moran.

We have had solid relationships with the Kansas Delegation and want to thank former Congressman Kevin Yoder and Congresswoman Lynn Jenkins for their support. We look forward to working with new Representatives Watkins and Davids.

As always, the Central team is willing and able to assist you. We very much appreciate your business relationship and friendship.

2

April 2019

MHEG staff at the Kansas Appreciation dinner at the Dillon House in Topeka, Kansas, last September.

Today, I’d like to discuss the recent formation of the Iowa Housing Partnership (IHP). IHP was formed to be a state-wide organization dedicated to advocacy for affordable housing issues within Iowa.

Leaders from several housing organizations, including MHEG, came together to support the entity formation. The 501(c)(3) status for the organization is currently pending.

Membership Fees are $500 per year for for-profit entities, $250 per year for non-profit entities, $100 per year for individuals. There are also Charter Memberships available for $2,500. Thus far we have had over 50 organizations and individuals register to become members.

As many of you are aware, numerous states already have established housing advocacy organizations; Iowa was kind of like the hole in the donut without one. Having seen the progress similar organizations have had in the surrounding states, local industry leaders supported the creation of an Iowa based organization. A board of directors has been elected, and I am honored to be serving as the Vice-Chair of the board.

Please contact me to learn more information or find us on Facebook @iowahousingpartnership.The stronger and more diverse our membership, the more impact we will have!

Northwest Region Update Tom Stratman

The end of 2018 was a busy time for the Northwest Region. We closed five deals in the 4th quarter, four in Nebraska and one in Colorado. All Nebraska closings were with long-time partners of MHEG – Excel Development Group, The Sidney Housing Authority (Scottsbluff Housing Authority), Holy Name Housing Corporation and Dana Point Development – we appreciate and value these continued partnerships. In Colorado, we closed our second deal with Community Housing Development Association in Aurora.

We closed one deal in the 1st quarter of 2019, a bond deal in Fort Collins, Colorado, with DMA Plaza Inc. The acquisition involves the renovation of an 11-story building in downtown Fort Collins preserving affordable housing for 100+ senior residents. That’s a number we can all be proud of! A big thank you to all the property management staff and to MHEG’s compliance team, who review and approve files for residents to move in.

Looking ahead in 2019, we anticipate closing an additional 17 deals in the Northwest Region. In Nebraska and Colorado, we have seen the benefits of state low income housing tax credits creating additional housing units. Colorado is currently debating legislation that would double the amount of state tax credits; we are hopeful this bill passes so more affordable housing can be provided in a state that desperately needs it.

In October, MHEG held its annual partner appreciation dinner for our South Dakota partners in Pierre, during the South Dakota Housing Development Authority housing conference. We also attended the Nebraska Investment Finance Authority Housing Innovation conference last month and hosted our annual dinner to thank our many partners in Nebraska. The event was held at the Strategic Air Command and Aerospace Museum in Ashland, where guests had dinner in one of the hangars surrounded by aircraft exhibits. We truly enjoy these opportunities to show you our gratitude for your partnership. Thank you for making the time in your schedule to attend and for supporting our mission of providing quality affordable housing.

South Region Update Andrea Frymire

Spring is here and all our partners’ applications are in with the respective HFAs. It will be a busy summer with awards coming in from Oklahoma, Texas and Arkansas between May and July. We look forward to award season which begins with Oklahoma in May. There are two significant bills related to the Oklahoma Affordable Housing Act working through the Oklahoma Legislature. HB1411-Nichols seeks to remove the county population cap, allowing all 77 counties to be able to compete for this valuable resource. HB1411 has passed the House and has moved on to the Senate. SB416-Bice seeks to cut funding for the Act in half by reducing the credit period from 10 years to 5 years.

SB416 has passed the Senate and been assigned to committee in the House.

Between 2015 and 2018, the Oklahoma Affordable Housing Act provided financing for 36 developments, creating over 2,000 units of affordable housing. These units extended across 24 counties in 28 different cities. The Oklahoma Housing Finance Agency allocated $15,332,125 in state affordable housing credits during this four-year period. The Oklahoma Department of Commerce conducted an economic impact study of the Act and found an overall economic impact of $575M. A copy of the report is available at: www.affordablehousingcoalition.org.

The Oklahoma Coalition for Affordable Housing will host their fourth annual Affordable Housing Day at the State Capitol in April. It is important for all participants in Oklahoma to reach out to their respective Representatives and Senators.

Showing your support at the state and national levels is one of the best things you can do for the industry.

We wish all our partners the best of luck on their pending applications and look forward to working with everyone on 2018 awards. We are excited to work with new HFA staff in Arkansas and Texas. Please do not hesitate to contact me if I may be of assistance.

It is a pleasure working with each and every one of you!

Guests attending our annual Oklahoma Appreciation Luncheon at Top Golf in Oklahoma City in November 2018.

3

Volume 12, Issue 1

Keeping you up to date on MHEG in just a minute’s time.

Property Spotlight: The Aberdeen Apartments LLC - Sioux City, Iowa Last November, Arch Icon Development celebrated the grand opening of The Aberdeen Apartments in Sioux City, Iowa. The apartments, a great example of historic adaptive re-use, were renovated from the former Central High School Annex building. Built in 1952, the annex building hosted Central High School’s industrial art and physical education classes, containing a swimming pool, gymnasium and mechanic’s shop.

The Aberdeen Apartments are across the street from Castle on the Hill, the original Central High School building which was converted into affordable housing in 2005. Both properties are located near downtown Sioux City.

The Aberdeen Apartments

April 2019

Closed Acquisitions LIHTC DEVELOPMENTS

FUND

CITY / STATE

UNITS DATE

DEVELOPER

Managing Member

The Aberdeen Managing Member Limited Liability Co

Eagle Flats, LLC

MHEG 50

Elk City, OK

35

January

Excel Development Group

Remington I LLLP

MHEG 50

Fort Collins, CO

124

March

DMA Plaza Inc

Developer

Arch Icon Development

California Apartments MO LP

MHEG 50

California, MO

40

March

Southeast Holdings

Property Manager

Seldin Company

Westport Masrhall, LP

MHEG 50

Marshall, MO

36

March

Missouri Valley Community Action Agency

Gross Equity Invested

$9 million

Sayre Community Housing, LP

MHEG 50

Sayre, OK

40

March

Arzon Development Company

Total Units Closed to Date in 2019

275

The apartments offer 46 multifamily units, consisting of one-, two- and threebedroom apartments. Residents will enjoy the historic elements of the building, but have access to modern amenities such as a fitness center, community room, basketball courts, underground covered parking and controlled access entry.

Groundbreakings, Ribbon Cuttings, Dedications and Events....

Above: The exterior of The Aberdeen Apartments.

Far Left: Interior of an apartment that was constructed in the gymnasium area.

Left: The remaining gymnasium space reconverted into community area.

Government Affairs Update

Joshua Yurek

I would like to begin by highlighting the success we had last year on the advocacy front. In a year that didn’t see much movement legislatively, we had a substantial victory in the Omnibus appropriations bill in March 2018.

The Omnibus included a 12.5 percent increase in LIHTC allocations for four years, lasting through 2021, as well as permanent income averaging, which were key provisions from the Affordable Housing Credit Improvement Act (AHCIA). While we are all grateful for this increased investment, much more work remains.

As the 116th Congress kicked-off in January, the House of Representatives shifted to Democratic control for the first time since 2010, while Republicans maintained control in the Senate. The freshman class includes 110 new members, including nine new Senators. Additionally, within the MHEG footprint, we have new Representatives in several states, including Colorado, Iowa, Kansas, North Dakota, Oklahoma and South Dakota, as well as new Senators in Missouri (Senator Hawley) and North Dakota (Senator Cramer).

Furthermore, I would like to highlight some key members within our territory that serve in leadership positions in the current Congress.

In the coming weeks, we expect Housing Credit champion Senator Maria Cantwell (D-WA) to reintroduce the Affordable Housing Credit Improvement Act. Companion legislation, led

by Rep. Suzan DelBene (D-WA-1) will also be introduced in the House. Members are finalizing the Bills’ provisions and confirming the lead Republicans.

Cohen-Esrey Development Group celebrates the ribbon cutting for the Brewery Lofts in Hastings, Nebraska, this past December.

I cannot stress enough the value of building and strengthening relationships with Congressional offices as we move toward reintroduction of the AHCIA. Last year, one of the reasons we were successful in achieving the first expansion of the Housing Credit in ten years, was due to robust bipartisan support. After reintroduction, ensuring strong cosponsorship will once again be a top priority.

To demonstrate the value in hosting your Senator or Reps. at groundbreakings and ribbon-cuttings, I thought I would share a quick story. During a conference earlier this year, former Rep. Pat Tiberi (ROH) explained how his first visit to an affordable housing development • Senator Chuck Grassley (R-IA) – President Pro Temp and Senate Finance Chairman and interacting with the residents, made him become a champion of • Senator Joni Ernst (R-IA) – Republican Senate Conference Vice Chairman the LIHTC program. As we know, it is not our lives that are changed by • Senator Amy Klobuchar (D-MN) – Chair of the Senate Democratic Steering Committee the work we do, but instead it’s our residents’ lives that are changed for • Senator Roy Blunt (R-MO) – Republican Senate Policy Committee Chairman the better. The personal stories that residents share and hearing from • Rep. Jason Smith (R-MO-8) – House Republican Conference Secretary them first-hand the tangible benefit the LIHTC provides is valuable as • Senator John Thune (R-SD) – Senate Majority Whip we continue advocate for additional affordable housing resources in With a new Congress, we see new membership on the Senate Finance Congress.

Committee and the House Ways and Means Committee, which both have Against that backdrop, note that Congressional recess periods are primary jurisdiction over the Housing Credit. Senate Finance has five new always a great time to invite and host elected officials and staff at ribbonmembers (R-3, D-2), including Senator James Lankford (R-OK). In addition, cuttings and open houses. For planning purposes, Congressional Senators Grassley (IA), Cornyn (TX), Roberts (KS) and Thune (SD) continue recess dates this year are: April 15-26, May 27-31, Aug. 5-Sept. 6, and to serve on the Committee. The House Ways and Means Committee has Sept. 30-Oct. 14. When you are a few months out from construction fourteen new members (D-11, R-3), including Rep. Jodey Arrington (R-TX-19) completion, and begin thinking about showing off the finished product, and Rep. Ron Estes (R-KS-4). Reps. Adrian Smith (R-NE-3) and Jason Smith please don’t hesitate to reach out to me. I would be happy to help (R-MO-8) continue to serve on the Committee. Now is the time to educate organize a ribbon-cutting event with your Congressional delegation and the new members and their staff on the need for more affordable housing their staff to further demonstrate how effective the Housing Credit is in resources and the importance of the Housing Credit. providing affordable housing in their district and state.

4

Arch Icon Development celebrates the grand opening of the Aberdeen Apartments in Sioux City, Iowa, this past November.

Canterbury Estates groundbreaking in Sidney, Nebraska, this past November. L-R: Wendall Gaston (Sidney City Councilman); Roger Gallaway (Vice-Mayor), Tamara Nelsen (Chair, Sidney Housing Authority); Delores Virgil (Sidney HA Commissioner), Clem Schumacher (Security First Bank) and Brittany Hardin (Nebraska Department of Economic Development).

Top Left: Partners of Kensington Square participate in a ribbon cutting in Great Bend, Kansas, this past October.

Top Center: Sunflower Gardens III held a ribbon cutting this past October as well in Valley Center, Kansas.

Top Right: MorningStar Senior celebrates with a ribbon cutting for partners in Kansas City, Missouri this past October.

Botton Left: The Link I and II held a ribbon cutting in Hutchinson, Kansas.

Bottom Right: MHEG’s annual Nebraska Apprecation Dinner at the Strategic Air Command and Aerospace Museum in Ashland, Nebraska, in March.

5

Volume 12, Issue 1

Keeping you up to date on MHEG in just a minute’s time.

Property Spotlight: The Aberdeen Apartments LLC - Sioux City, Iowa Last November, Arch Icon Development celebrated the grand opening of The Aberdeen Apartments in Sioux City, Iowa. The apartments, a great example of historic adaptive re-use, were renovated from the former Central High School Annex building. Built in 1952, the annex building hosted Central High School’s industrial art and physical education classes, containing a swimming pool, gymnasium and mechanic’s shop.

The Aberdeen Apartments are across the street from Castle on the Hill, the original Central High School building which was converted into affordable housing in 2005. Both properties are located near downtown Sioux City.

The Aberdeen Apartments

April 2019

Closed Acquisitions LIHTC DEVELOPMENTS

FUND

CITY / STATE

UNITS DATE

DEVELOPER

Managing Member

The Aberdeen Managing Member Limited Liability Co

Eagle Flats, LLC

MHEG 50

Elk City, OK

35

January

Excel Development Group

Remington I LLLP

MHEG 50

Fort Collins, CO

124

March

DMA Plaza Inc

Developer

Arch Icon Development

California Apartments MO LP

MHEG 50

California, MO

40

March

Southeast Holdings

Property Manager

Seldin Company

Westport Masrhall, LP

MHEG 50

Marshall, MO

36

March

Missouri Valley Community Action Agency

Gross Equity Invested

$9 million

Sayre Community Housing, LP

MHEG 50

Sayre, OK

40

March

Arzon Development Company

Total Units Closed to Date in 2019

275

The apartments offer 46 multifamily units, consisting of one-, two- and threebedroom apartments. Residents will enjoy the historic elements of the building, but have access to modern amenities such as a fitness center, community room, basketball courts, underground covered parking and controlled access entry.

Groundbreakings, Ribbon Cuttings, Dedications and Events....

Above: The exterior of The Aberdeen Apartments.

Far Left: Interior of an apartment that was constructed in the gymnasium area.

Left: The remaining gymnasium space reconverted into community area.

Government Affairs Update

Joshua Yurek

I would like to begin by highlighting the success we had last year on the advocacy front. In a year that didn’t see much movement legislatively, we had a substantial victory in the Omnibus appropriations bill in March 2018.

The Omnibus included a 12.5 percent increase in LIHTC allocations for four years, lasting through 2021, as well as permanent income averaging, which were key provisions from the Affordable Housing Credit Improvement Act (AHCIA). While we are all grateful for this increased investment, much more work remains.

As the 116th Congress kicked-off in January, the House of Representatives shifted to Democratic control for the first time since 2010, while Republicans maintained control in the Senate. The freshman class includes 110 new members, including nine new Senators. Additionally, within the MHEG footprint, we have new Representatives in several states, including Colorado, Iowa, Kansas, North Dakota, Oklahoma and South Dakota, as well as new Senators in Missouri (Senator Hawley) and North Dakota (Senator Cramer).

Furthermore, I would like to highlight some key members within our territory that serve in leadership positions in the current Congress.

In the coming weeks, we expect Housing Credit champion Senator Maria Cantwell (D-WA) to reintroduce the Affordable Housing Credit Improvement Act. Companion legislation, led

by Rep. Suzan DelBene (D-WA-1) will also be introduced in the House. Members are finalizing the Bills’ provisions and confirming the lead Republicans.

Cohen-Esrey Development Group celebrates the ribbon cutting for the Brewery Lofts in Hastings, Nebraska, this past December.

I cannot stress enough the value of building and strengthening relationships with Congressional offices as we move toward reintroduction of the AHCIA. Last year, one of the reasons we were successful in achieving the first expansion of the Housing Credit in ten years, was due to robust bipartisan support. After reintroduction, ensuring strong cosponsorship will once again be a top priority.

To demonstrate the value in hosting your Senator or Reps. at groundbreakings and ribbon-cuttings, I thought I would share a quick story. During a conference earlier this year, former Rep. Pat Tiberi (ROH) explained how his first visit to an affordable housing development • Senator Chuck Grassley (R-IA) – President Pro Temp and Senate Finance Chairman and interacting with the residents, made him become a champion of • Senator Joni Ernst (R-IA) – Republican Senate Conference Vice Chairman the LIHTC program. As we know, it is not our lives that are changed by • Senator Amy Klobuchar (D-MN) – Chair of the Senate Democratic Steering Committee the work we do, but instead it’s our residents’ lives that are changed for • Senator Roy Blunt (R-MO) – Republican Senate Policy Committee Chairman the better. The personal stories that residents share and hearing from • Rep. Jason Smith (R-MO-8) – House Republican Conference Secretary them first-hand the tangible benefit the LIHTC provides is valuable as • Senator John Thune (R-SD) – Senate Majority Whip we continue advocate for additional affordable housing resources in With a new Congress, we see new membership on the Senate Finance Congress.

Committee and the House Ways and Means Committee, which both have Against that backdrop, note that Congressional recess periods are primary jurisdiction over the Housing Credit. Senate Finance has five new always a great time to invite and host elected officials and staff at ribbonmembers (R-3, D-2), including Senator James Lankford (R-OK). In addition, cuttings and open houses. For planning purposes, Congressional Senators Grassley (IA), Cornyn (TX), Roberts (KS) and Thune (SD) continue recess dates this year are: April 15-26, May 27-31, Aug. 5-Sept. 6, and to serve on the Committee. The House Ways and Means Committee has Sept. 30-Oct. 14. When you are a few months out from construction fourteen new members (D-11, R-3), including Rep. Jodey Arrington (R-TX-19) completion, and begin thinking about showing off the finished product, and Rep. Ron Estes (R-KS-4). Reps. Adrian Smith (R-NE-3) and Jason Smith please don’t hesitate to reach out to me. I would be happy to help (R-MO-8) continue to serve on the Committee. Now is the time to educate organize a ribbon-cutting event with your Congressional delegation and the new members and their staff on the need for more affordable housing their staff to further demonstrate how effective the Housing Credit is in resources and the importance of the Housing Credit. providing affordable housing in their district and state.

4

Arch Icon Development celebrates the grand opening of the Aberdeen Apartments in Sioux City, Iowa, this past November.

Canterbury Estates groundbreaking in Sidney, Nebraska, this past November. L-R: Wendall Gaston (Sidney City Councilman); Roger Gallaway (Vice-Mayor), Tamara Nelsen (Chair, Sidney Housing Authority); Delores Virgil (Sidney HA Commissioner), Clem Schumacher (Security First Bank) and Brittany Hardin (Nebraska Department of Economic Development).

Top Left: Partners of Kensington Square participate in a ribbon cutting in Great Bend, Kansas, this past October.

Top Center: Sunflower Gardens III held a ribbon cutting this past October as well in Valley Center, Kansas.

Top Right: MorningStar Senior celebrates with a ribbon cutting for partners in Kansas City, Missouri this past October.

Botton Left: The Link I and II held a ribbon cutting in Hutchinson, Kansas.

Bottom Right: MHEG’s annual Nebraska Apprecation Dinner at the Strategic Air Command and Aerospace Museum in Ashland, Nebraska, in March.

5

Volume 12, Issue 1

Staff Announcements

Cole Rogers, Financial Analyst

April 2019

Evan Andrews, Financial Analyst

Cole joined MHEG as a Financial Analyst in our Omaha office last year. His duties will include overseeing a development portfolio with financial reviews, site visits and problem resolution/workouts as needed. Prior to MHEG, Cole worked for an asset management firm that managed multifamily and senior housing financed with LIHTCs. He is a graduate of the Northwest Nazarene University with a degree in Accounting and Business Administration.

Tracy Connor, Corporate Accountant

Keeping you up to date on MHEG in just a minute’s time.

Evan joined MHEG as Financial Analyst in our Omaha office last October. His duties will include overseeing a development portfolio with financial reviews, site visits and problem resolution/workouts as needed. Evan is a recent graduate from the University of Northern Iowa, majoring in Finance and Economics.

Kelli Baker, Asset Manager

Tracy joined MHEG as our Corporate Accountant last October in our Omaha office. Her duties include a variety of accounting tasks to support the CFO and accounting department. Tracy comes to MHEG with over five years of accounting experience. She is a graduate of the University of Nebraska with a Masters of Accounting and an undergraduate degree in Business Administration – Accounting.

MHEG in a Minute Volume 12, Issue 1

April 2019

NIFA Conference Awards

Inside this Issue: Recent Highlights

1

CEO Update

2

Region Updates

2, 3

Property Spotlight

4

Government Affairs Update 4

Kelli joined MHEG as an Asset Manager in our Omaha office last October. Her duties will include overseeing a development portfolio with financial reviews, site visits and problem resolution/workouts as needed. Kelli has over six years of property management experience, most recently she worked for Seldin Company.

Closed Acquisitions

4

Recent Events

5

Staff Updates

6

Upcoming Events

6

Monthly LIHTC Rates December 2018

MHDF Receives Capital Magnet Fund $3M Grant

30%PV 3.30% AFR 3.15%

The US Treasury Dept. CDFI Fund awarded a $3 million grant from the Capital Magnet Fund to MHDF in February. This is the fourth round of CMF awards since the fund began in 2010 and the first CMF grant for MHDF. Over 100 organizations throughout the country applied for a total of $570 million. Thirty-eight awards were made for $142.9 million.

February 2019 30%PV 3.27% March 2019

MHDF expects to contribute to the creation and preservation of more than 500 affordable rental units over five years in Kansas and Oklahoma with the CMF grant funds, leverage, and revolved loan funds. More than half of these rental homes will be available and affordable to households with very low incomes. Lara Huskey, MHDF Executive Vice President, identified the Capital Magnet Fund as part of a strategy to bolster the MHDF Loan Fund and increase funding that is invested in affordable housing in the Midwest from national resources.

She took the lead on application preparation and submission, and is responsible for implementation of what MHDF hopes is the first of many CMF grants.

30%PV 3.27% AFR 2.91% April 2019 30%PV 3.27%

Upcoming Events

NIFA Board Meeting: April 19th Lincoln, NE - NIFA Board Room CHFA Board Meeting: April 25th Denver, CO - CHFA Board Room TDHCA Board Meeting: April 25th Austin, TX - Capitol Extension Auditorium

May

IFA Board Meeting: May 1st Des Moines, IA - IFA Office KHRC Board Meeting: May 2nd Topeka, KS - KDFA Board Room OHFA Board Meeting: May 15th Oklahoma City, OK - OHFA Office TDHCA Board Meeting: May 23rd Austin, TX - Capitol Extension Auditorium CHFA Board Meeting: May 23rd Denver, CO - CHFA Board Room

AFR 2.89%

June

**Save the Date** MHEG Annual Meeting & Golf Outing: June 3rd Ashland, NE - Quarry Oaks Golf Course IFA Board Meeting: June 5th Des Moines, IA - IFA Office KHRC Board Meeting: June 6th Topeka, KS - KDFA Board Room AHAA Conference: June 12th-13th Little Rock, AR - Wyndham Hotel NIFA Board Meeting: June 21st Lincoln, NE - NIFA Board Room MOWHA Annual Conference: June 26th-28th Columbia, MO - Holiday Inn Executive Center CHFA Board Meeting: June 27th Denver, CO - CHFA Board Room TDHCA Board Meeting: June 27th Austin, TX - Capitol Extension Auditorium

Mesner Development Co., Schuyler Community Schools, Cargill, QC Supply, Nebraska Department of Economic Development, City of Schuyler, Schuyler Department of Utilities, Pinnacle Bank-Schuyler, Midwest Housing Development Fund

January 2019

AFR 2.91%

ADFA Board Meeting: April 18 Little Rock, AR - ADFA Office

Kracl Meadows ,located in Schuyler, Nebraska, provides 14 age-restricted units. Funded by MHEG Fund 44, LP.

Congratulations to these organizations on their achievements, MHEG is proud to partner with these outstanding leaders.

AFR 3.31%

Jordan Abboud, promoted to Vice President of Asset Management Steve Gross, promoted to Senior Financial Analyst Paul McDonald, promoted to Senior Asset Manager Brooke Smith, promoted to Senior Asset Manager

April

In addition to Schuyler Community Development, the following organizations played a major role in the success of the creation of the two projects:

NIFA also recognized Cris Larson, of Mesner Development Co, as Property Manager of the Year.

30%PV 3.32%

Staff Promotions

Last month, Nebraska Investment Finance Authority (NIFA) hosted their annual Housing Innovation marketplace Conference. During the conference, NIFA awarded Schuyler Community Development its Innovative Project award for the establishment of Kracl Meadows and Workforce Housing Projects in Schuyler and utilization of a partnership environment that made both projects possible.

Please note we will no longer show the 70% PVC rate as it was permanently fixed at 9% in December 2015. For more information view the Protecting Americans from Tax Hikes Act of 2015.

July

IFA Board Meeting: July 10th Des Moines, IA - IFA Office

Portfolio Update

OHFA Board Meeting: July 10th Oklahoma City, OK - OHFA Office

Developments

KHRC Board Meeting: July 11th Topeka, KS - KDFA Board Room

Units

TDHCA Board Meeting: July 25th Austin, TX - Capitol Extension Auditorium CHFA Board Meeting: July 25th Denver, CO - CHFA Board Room

551 17,349

Counties Represented

187

Cities Represented

228

Vacancy Percentage

6.07%*

Debt Coverage Ratio

2.06*

Information current as of 4/20/18 *Data compiled from 12/31/17 figures using stabilized developments only, vacancy percentage is using economic vacancy.

August

KHRC Board Meeting: Aug. 1st Topeka, KS - KDFA Board Room

If you would like to receive our newsletter by email, go to our homepage to signup. For past issues of MHEG in a Minute check our website under News & Events.

IFA Board Meeting: Aug. 7th Des Moines, IA - IFA Office NIFA Board Meeting: Aug. 16th Lincoln, NE - NIFA Board Room

For any other inquiries about the content of this newsletter, please contact Keely McAleer.

CHFA Board Meeting: August 22nd Denver, CO - CHFA Board Room 6

The Capital Magnet Fund was established under the Housing and Economic Recovery Act of 2008 which requires the housing government sponsored entities (GSEs) Fannie Mae and Freddie Mac to contribute to the CMF and the National Housing Trust Fund (HTF). CMF was created to spur investment in affordable housing and related economic development efforts that serve low-income families and low-income communities across the country.

We’re Hiring! Come Join Our MHEG Team.

MHEG is looking to hire associates to join our MHEG team! For complete job descriptions and requirements, visit our website’s Employment page. To apply, email your resume to Keely McAleer.

Closing Manager - The Closing Manager works closely with our Acquisitions Managers to close our Funds’ investments in various multifamily residential real estate developments (“Operating Partnerships”) financed with federal Low Income Housing Tax Credits (“LIHTC”). This person leads the due diligence collection/ review process and keeps our investments on track for timely closing. The Closing Manager also plays a critical role developing and maintaining MHEG’s relationships with our developer partners.

Financial Analyst - Responsible for helping asset manage MHEG investments in multiple affordable housing developments financed with LIHTCs. This individual works with affordable housing developers, property managers and accounting firms. The Financial Analyst handles the intake and review of Operating Partnership financial reporting, and supports Asset Managers in their role of improving the financial, operational and physical health of our investments. This individual also helps foster strong relationships with our various partners.

1