Title: Understanding the Dynamics IV Housing Tax Credit Investment Performance Roshni Patel, Ernst
1Understandingthe Dynamics IV Housing Tax
CreditInvestment PerformanceRoshni Patel,
Ernst Young IPED After the
ClosingMaximizing Value and Avoiding
PitfallsSan Diego, CA
2Overview
- Study will be sent to data providers and
financial contributors also available at
www.ey.com/us/taxcreditadvisory - Includes two-thirds of all housing credit
properties produced - nearly 14,000 properties,
over one million units, and 34.6 billion of
equity investment - Many new data points and analyses
- This presentation includes additional data and
analysis not found in the study
331 Data Providers
- 2 direct investors
- 13 non-profit affiliated
- 16 for-profit
4Performance Overview
5Construction Duration
31 Ahead
39 Behind
30
6Lease-up Duration
41 Behind
32 Ahead
27
7Overall Property Averages
Median
Occupancy 96
Hard Debt Coverage Ratio 1.15
Operating Expenses Per Unit 3,319
Cash Flow 8,711
Cash Flow Per Unit 240
Repl. Reserve Contribution Per Unit 250
Repl. Reserve Balance Per Unit 1,011
Balance to Contribution Ratio 4.0 years
8Occupancy Trends Median
9Occupancy Trends Below 90
18
10Cash Flow Trends Median
11Cash Flow Trends Below 0
12Hard Debt Coverage Ratio Trends Median
13Hard Debt Coverage Ratio Trends below 1.0
14Annualized Foreclosure Rate
1.24
0.96
0.86
0.83
0.62
0.32
Tax Credit
Other Commercial
0.28
0.29
Mixed Use
Hotel / Motel
Industrial
1-4 Fam.
Apart.
Retail
Office
0.03
Source ACLI Mortgage Loan Portfolio Profile 1993
- 2005 except tax credit data.
15Magnitude of Deficits
45
16Multiple Year Deficits
30
25
27.2
20
15
HDCR Chronic Underperformance
10
16.5
16
5
4.1
0
0203
0304
0405
All Years
17Deficit Funding Sources Each 1 of deficit
funded by
10 upper tier/investor sources 90 lower tier
sources
18Deficit Funding By Size of Deficit
19Geography
WA
WA
ME
MT
MT
ND
VT
VT
MN
OR
NH
ID
ID
WI
NY
MA
SD
SD
CT
WY
WY
MI
RI
NJ
PA
PA
IA
NE
NV
NV
OH
MD
DE
IL
IN
IL
UT
UT
CO
WV
CO
WV
VA
VA
KS
MO
MO
CA
CA
KY
KY
NC
NC
TN
TN
AZ
AZ
OK
AR
SC
NM
GA
AL
AL
MS
MS
TX
TX
AK
AK
LA
LA
FL
HI
20Geography
Michigan Occ 93 DCR 0.98 CF 10
Iowa Occ 93 DCR 1.03 CF 64
North Dakota Occ 95 DCR 0.97 CF 30
Rhode Island Occ 97 DCR 1.01 CF 40
ND
MI
RI
Nebraska Occ 94 DCR 1.04 CF 39
Ohio Occ 95 DCR 1.04 CF 67
IA
NE
OH
IN
KS
South Carolina Occ 95 DCR 1.08 CF 73
Kansas Occ 94 DCR 1.04 CF 51
AR
SC
GA
Arkansas Occ 95 DCR 1.05 CF (73)
Indiana Occ 92 DCR 0.76 CF (398)
Georgia Occ 95 DCR 1.03 CF 81
21Median DCR by Region
22Median Operating Expenses by Region
23Construction Type 2005 Performance
24Construction Type 2005 OpExp Per Unit by Age
25Deal Size Cash Flow Trends
Fewer than 61 Units 61-112 Units More than 112
Units
Largest Third
26Deal Size Occupancy Underperformance
27Deal Size DCR Underperformance
28Tenancy 2005 Performance
29Tenancy Cash Flow Trends
30Tenancy Occupancy Trends
31Tenancy DCR Underperformance
32Location Underperformance
33Location 2005 Median
34Year 15 Property Disposition Strategy
25 Maintained as Affordable w/o Tax Credits
6 Converted to Market Rate
27 Other
42 Resyndicated with Tax Credits
35Replacement Reserve Median
National Median
Replacement Reserve Contribution Per Unit 250
Replacement Reserve Balance Per Unit 1,011
Balance to Contribution Ratio 4.04 years
36Q A
- www.ey.com/us/taxcreditadvisory
- Roshni Patel (617) 723-1053
- roshni.patel_at_ey.com