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The sources and uses of funds to be applied under the Indenture are projected to be approximately
as follows:
Sources of Funds *
Bond Proceeds $24,000,000
Available Money 24,000,000
Total $48,000,000
Uses of Funds*
Project Fund $24,000,000
Collateral Fund 24,000,000
Total $48,000,000
The Bonds will be initially secured by their own proceeds to be deposited in the Project Fund under
the Indenture (plus investment earnings on Eligible Investments deposited with the Trustee on the Closing
Date, which have been calculated to be sufficient to pay, without the need for reinvestment, interest on the
Bonds to but not including the Initial Mandatory Tender Date). Upon the deposit of a like amount of
Available Money in the Collateral Fund as described below, a portion of the proceeds of the Bonds will be
disbursed from the Project Fund to the Borrower to pay Project Costs. The aggregate funds on deposit in
the Project Fund and the Collateral Fund, together with the Initial Deposit to the Interest Account of the
Bond Fund, as invested pursuant to the Indenture, have been calculated to be sufficient to pay, at all times,
principal and interest on the Bonds as and when they become due to the Initial Mandatory Tender Date.
FHA Insured Mortgage Loan
Simultaneously with the issuance of the Bonds, the Borrower will close the FHA Insured Mortgage
Loan on the Project with the FHA Lender. The FHA Insured Mortgage Loan will be in the original principal
amount of $32,060,000* and will bear interest at a rate equal to [5.30]%* per annum. Subject to the
conditions set forth in the FHA Loan Documents, at the time of closing of the Bonds and from time to time
thereafter, Available Money, including, without limitation, FHA Lender Funds and proceeds of the Bridge
Loan, in the aggregate amount of $24,000,000* will be advanced to the Trustee on behalf of the Borrower
for deposit into the Collateral Fund under the Indenture. The FHA Insured Mortgage Loan will be evidenced
by the FHA Note made by the Borrower in favor of the FHA Lender and secured by the FHA Mortgage on
the Project, and the FHA Lender will issue, with respect to the FHA Note, a fully amortized mortgage-
backed security (“GNMA Security”) guaranteed as to timely payment of interest only or of principal and
interest, as the case may be, by the Government National Mortgage Association (“GNMA”). None of the
owners of the Bonds, the Trustee or the Issuer will have rights with respect to the FHA Insured Mortgage
Loan or under the FHA Loan Documents. Furthermore, none of the owners of the Bonds, the Trustee or the
Issuer will have a lien on any funds, accounts or reserves established, maintained and/or collected by the
FHA Lender in connection with the FHA Insured Mortgage Loan. FHA does not provide enhancement with
respect to the Loan or the Bonds.
Tax Credit Equity
Federal Tax Credit Equity. In addition, as described under the caption “THE PROJECT AND THE
PRIVATE PARTICIPANTS – Investor Limited Partners” below, the Borrower has entered into an
agreement with The Richman Group Affordable Housing Corporation, a Delaware corporation (the
“Federal Investor Limited Partner”) to offer to it, simultaneously with the closing of the Bonds, a limited
partnership interest in the Borrower so the Federal Investor Limited Partner may acquire 99.99% of the
* Preliminary; subject to change.
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