Loan Product Term SheetFactory Order, Site Work and Site Acquisition

July 2014. Terms subject to change.

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PurPoseTo provide NeXT sTeP® Members with coordinated one-stop financing for both the order of factory built manufactured and/or modular housing products and for site acquisition and preparation related to the housing order.

BeNefiTTo streamline the financing process for factory built manufactured and/or modular housing, and accelerate the completion and impact in communities across the country.

LeNderNeighborWorks Capital (“NC”) and other factory order financing organizations including community loan funds.

EligiblE borroWErsNEXT sTEP® Members with demonstrated capacity and experience in factory built manufactured and/or modular construction and site work with a rating of gold or silver.

EligiblE UsEs of ProCEEdsloan funds are to be used to finance the:

• Purchase of factory built manufactured and/or modular homes for rent or re-sale.

• land acquisition, financing, title, environmental costs

• site infrastructure and subdivision work to construct foundations, utilities, roads/sidewalks and landscaping and environmental remediation.

• Proceeds are not available for developer fee to borrower or homebuyer financing.

EligiblE ProjECTsHomes for rent or sale to individuals and families. At least 50% of the home(s) must be affordable at or below 80% AMi, unless alternative restrictions are approved.

MAXiMUM loAN AMoUNTssingle Home / sites

Home/Site Work: Maximum of $200,000 per home.

Site Acquisition: Maximum of $50,000 per site.

Multiple Homes / sites

Home/Site Work: Up to $4 million for a total maximum of 20 homes per borrower.

Site Acquisition: Maximum of $1,000,000 per subdivision.

loAN-To-VAlUEsingle Home / sites

Home and Site: Up to 100% of “as ordered” value of home and 85% of land as-is value.

Multiple Homes / sites

Home and Site: As completed value based on appraisal. Not to exceed related value of home(s).

CollATErAlHome/Site Work: Assignment of factory order contract and site work contract.

Site: first mortgage lien or deed of Trust on land, if applicable.

iNTErEsT rATEfixed rate, floor of 6.00%.

disBurseMeNTsdisbursements made based on completion of acceptable draw requisitions. loan may be structured as a revolving line of Credit.

July 2014. Terms subject to change.

rEPAyMENT• interest only payments on loan due during term.

• Principal and any accrued interest due at loan maturity.

• Partial principal and accrued interest payments required for release of lien on individual home upon sale to homebuyers.

• No fees associated with partial or full repayments.

TerMUp to 48 months.

borroWEr EqUiTyMinimum 5% of total home/project costs as borrower equity contribution.

rECoUrsE/gUArANTyfull recourse to borrower and guaranty from parent organization.

PrEPAyMENTNo prepayment penalty.

fees• origination: 1% origination fee (minimum $1,000), plus

legal fees.

• borrower will be responsible for all closing costs including appraisal, title insurance, mortgage recording expenses, environmental, and inspection. These are payable by borrower and can be capitalized into the loan.

dUE diligENCE • if funds are provided for site acquisition, an “as-

is” market value appraisal of the property must be provided. The appraisal must be less than 6 months old. NC must review and approve appraiser selection.

• for projects with 10 or more units on a single site, a current (within 12 months) Phase i Environmental site Assessment must be provided. The assessment will be conducted by a qualified environmental firm and be prepared in accordance with industry standards. A Phase ii Environmental site Assessment will be required if the Phase i indicates the presence of an unacceptable environmental hazard.

• Three years of audited financial statements for borrower/guarantor.

• Program review by NeighborWorks America, NEXT sTEP® or a third-party assessment.

iNsUrANCE• Title insurance:if funds are provided for site acquisition,

borrower must provide lender with a title insurance policy dated concurrently with the recordation of the mortgage and equal to the principal amount of mortgage.

• Hazard and liability insurance:borrower must provide inland marine/builder’s risk based on an amount equal to or greater than cost of home. general liability insurance in the amount of $1,000,000 per occurrence is required.

Loan Product Term SheetFactory Order, Site Work and Site Acquisition

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