A MARKET CONDITIONS AND PROJECT EVALUATION SUMMARY OF

A MARKET CONDITIONS AND PROJECT EVALUATION SUMMARY OF WOODWARD APARTMENTS 409 E Woodward Street Vienna, Dooly County, Georgia Effective Date: June 8, 2011 Report Date: June 22, 2011 Prepared For Woodward Apartments, LP c/o Mr. Steve Brooks Integrity Development Partners 348 Enterprise Drive Valdosta, Georgia 31601 Prepared By Novogradac & Company LLP 2325 Lakeview Parkway Suite 450 Alpharetta, Georgia 30004 678.867.2333

June 22, 2011 Woodward Apartments, LP c/o Mr. Steve Brooks Integrity Development Partners 348 Enterprise Drive Valdosta, Georgia 31601 Re: Market Study for Woodward Apartments in Vienna, Georgia Dear Mr. Brooks: At your request, Novogradac & Company LLP performed a market study of the family rental market in the Vienna, Dooly County, Georgia area relative to the above-referenced Low-Income Housing Tax Credit (LIHTC) project, the (Subject). The purpose of this market study is to assess the viability of the renovation of Woodward Apartments, an existing LIHTC property consisting of 37 total units. Units will be restricted to households earning 50 and 60 percent of the AMI, or less. The following report provides support for the findings of the study and outlines the sources of information and the methodologies used to arrive at these conclusions. The scope of this report meets the requirements of the Georgia Department of Community Affairs (DCA), including the following: Inspecting the site of the proposed Subject and the general location. Analyzing appropriateness of the proposed unit mix, rent levels, available amenities and site. Estimating market rent, absorption and stabilized occupancy level for the market area. Investigating the health and conditions of the multifamily market. Calculating income bands, given the proposed Subject rents. Estimating the number of income eligible households. Reviewing relevant public records and contacting appropriate public agencies. Analyzing the economic and social conditions in the market area in relation to the proposed project. Establishing the Subject Primary and Secondary Market Area(s) if applicable. Surveying competing projects, Low-Income Housing Tax Credit (LIHTC) and market rate. 2325 Lakeview Pkwy, Suite 450, Alpharetta, Georgia 30009 Telephone 678.867.2333, Fax 678.867.2366 Novoco.com

June 15, 2011 Page 2 This report contains, to the fullest extent possible and practical, explanations of the data, reasoning, and analyses that were used to develop the opinions contained herein. The report also includes a thorough analysis of the scope of the study, regional and local demographic and economic studies, and market analyses including conclusions. The depth of discussion contained in the report is specific to the needs of the client. Information included in this report is accurate and the report can be relied upon by DCA as a true assessment of the low-income housing rental market. This report was completed in accordance with DCA market study guidelines. We inform the reader that other users of this document may underwrite the LIHTC rents to a different standard than contained in this report. Please do not hesitate to contact us if there are any questions regarding the report or if Novogradac & Company, LLP can be of further assistance. It has been our pleasure to assist you with this project. Respectfully submitted, H. Blair Kincer, MAI Partner Novogradac & Company LLP Michalena M. Sukenik Principal Novogradac & Company LLP Kristina V. Garcia Real Estate Analyst Novogradac & Company LLP 2325 Lakeview Pkwy, Suite 450, Alpharetta, Georgia 30009 Telephone 678.867.2333, Fax 678.867.2366 Novoco.com

ASSUMPTIONS AND LIMITING CONDITIONS 1. In the event that the client provided a legal description, building plans, title policy and/or survey, etc., the consultant has relied extensively upon such data in the formulation of all analyses. 2. The legal description as supplied by the client is assumed to be correct and the consultant assumes no responsibility for legal matters, and renders no opinion of property title, which is assumed to be good and merchantable. 3. All information contained in the report, which others furnished, was assumed to be true, correct, and reliable. A reasonable effort was made to verify such information, but the author assumes no responsibility for its accuracy. 4. The report was made assuming responsible ownership and capable management of the property. The analyses and projections are based on the basic assumption that the apartment complex will be managed and staffed by competent personnel and that the property will be professionally advertised and aggressively promoted 5. The sketches, photographs, and other exhibits in this report are solely for the purpose of assisting the reader in visualizing the property. The author made no property survey, and assumes no liability in connection with such matters. It was also assumed there is no property encroachment or trespass unless noted in the report. 6. The author of this report assumes no responsibility for hidden or unapparent conditions of the property, subsoil or structures, or the correction of any defects now existing or that may develop in the future. Equipment components were assumed in good working condition unless otherwise stated in this report. 7. It is assumed that there are no hidden or unapparent conditions for the property, subsoil, or structures, which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering, which may be required to discover such factors. The investigation made it reasonable to assume, for report purposes, that no insulation or other product banned by the Consumer Product Safety Commission has been introduced into the Subject premises. Visual inspection by the consultant did not indicate the presence of any hazardous waste. It is suggested the client obtain a professional environmental hazard survey to further define the condition of the Subject soil if they deem necessary. 8. A consulting analysis market study for a property is made as of a certain day. Due to the principles of change and anticipation the value estimate is only valid as of the date of valuation. The real estate market is non-static and change and market anticipation is analyzed as of a specific date in time and is only valid as of the specified date. 9. Possession of the report, or a copy thereof, does not carry with it the right of publication, nor may it be reproduced in whole or in part, in any manner, by any person, without the prior written consent of the author particularly as to value conclusions, the identity of the

author or the firm with which he or she is connected. Neither all nor any part of the report, or copy thereof shall be disseminated to the general public by the use of advertising, public relations, news, sales, or other media for public communication without the prior written consent and approval of the appraiser. Nor shall the appraiser, firm, or professional organizations of which the appraiser is a member be identified without written consent of the appraiser. 10. Disclosure of the contents of this report is governed by the Bylaws and Regulations of the professional appraisal organization with which the appraiser is affiliated: specifically, the Appraisal Institute. 11. The author of this report is not required to give testimony or attendance in legal or other proceedings relative to this report or to the Subject property unless satisfactory additional arrangements are made prior to the need for such services. 12. The opinions contained in this report are those of the author and no responsibility is accepted by the author for the results of actions taken by others based on information contained herein. 13. All applicable zoning and use regulations and restrictions are assumed to have been complied with, unless nonconformity has been stated, defined, and considered in the appraisal report. 14. It is assumed that all required licenses, permits, covenants or other legislative or administrative authority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which conclusions contained in this report is based. 15. On all proposed developments, Subject to satisfactory completion, repairs, or alterations, the consulting report is contingent upon completion of the improvements in a workmanlike manner and in a reasonable period of time with good quality materials. 16. All general codes, ordinances, regulations or statutes affecting the property have been and will be enforced and the property is not Subject to flood plain or utility restrictions or moratoriums except as reported to the consultant and contained in this report. 17. The party for whom this report is prepared has reported to the consultant there are no original existing condition or development plans that would Subject this property to the regulations of the Securities and Exchange Commission or similar agencies on the state or local level. 18. Unless stated otherwise, no percolation tests have been performed on this property. In making the appraisal, it has been assumed the property is capable of passing such tests so as to be developable to its highest and best use, as detailed in this report.

19. No in-depth inspection was made of existing plumbing (including well and septic), electrical, or heating systems. The consultant does not warrant the condition or adequacy of such systems. 20. No in-depth inspection of existing insulation was made. It is specifically assumed no Urea Formaldehyde Foam Insulation (UFFI), or any other product banned or discouraged by the Consumer Product Safety Commission has been introduced into the appraised property. The appraiser reserves the right to review and/or modify this appraisal if said insulation exists on the Subject property. 21. Acceptance of and/or use of this report constitute acceptance of all assumptions and the above conditions. Estimates presented in this report are not valid for syndication purposes.

TABLE OF CONTENTS A. EXECUTIVE SUMMARY AND CONCLUSION... 1 B. PROJECT DESCRIPTION... 9 C. SITE EVALUATION... 14 D. MARKET AREA... 27 Primary Market Area... 28 E. COMMUNITY DEMOGRAPHIC DATA... 32 F. EMPLOYMENT TRENDS... 37 G. PROJECT-SPECIFIC DEMAND ANALYSIS... 45 H. COMPETITIVE RENTAL ANALYSIS... 61 I. ABSORPTION AND STABILIZATION RATES 85 J. INTERVIEWS 86 K. CONCLUSIONS AND RECOMMENDATIONS... 102 L. SIGNED STATEMENT REQUIREMENTS... 106 Addendum

A. EXECUTIVE SUMMARY AND CONCLUSION

EXECUTIVE SUMMARY AND CONCLUSIONS 1. Project Description: Woodward Apartments, the Subject, is located at 409 E Woodward Street in Vienna, Dooly County, Georgia. The Subject is an existing 37 two and three-bedroom townhouse style complex. Post renovations, the Subject will consist of 36 total units as one unit will be converted to additional community space. Renovations are expected to total approximately $69,000 per unit, which is considered significant. The renovations will include the following: Increased unit size by an average of 20 percent New wood cabinets New low VOC carpet New walls, flooring, fixtures, ceiling fans, low-e windows, and doors New high efficiency HVAC New EnergyStar appliances New washer/dryer in-unit Upgraded landscaping New fiber cement Hardi-plank siding New roof shingles Converting one unit to community space Updated clubhouse with addition of community room and business center New playground Remodeled leasing office The following is a picture of the Subject As-Is. Novogradac & Company LLP 1

Unit Type Square Footage Number of Units Woodward Apartments, Vienna, GA; Market Study The following table illustrates the unit mix including bedrooms/bathrooms, square footage, income targeting, rents, and utility allowance. The Subject is located in Dooly County, which is a rural county and is therefore eligible for the National non-metropolitan income limits. Asking Rent Utility Allowance (1) 50% AMI Gross Rent LIHTC Maximum Allowable Gross Rent LIHTC Maximum Allowable Gross Rent National Non- Metro HUD Fair Market Rents 2BR 1,011-1,026 4 $303 $167 $470 $502 $580 $542 3BR 1,185 4 $376 $204 $580 $580 $670 $683 60% AMI 2BR 1,011-1,026 12 $306 $167 $473 $603 $696 $542 3BR 1,185 16 $382 $204 $586 $696 $804 $683 Total 36 Notes (1) Source of Utility Allowance provided by the Developer. PROPOSED RENTS The Subject will offer the following amenities post renovation: patio, blinds, carpeting, cable ready (new), central air, dishwasher, oven, refrigerator, walk-in closet, washer/dryer in-unit (new), clubhouse with business center and community room (new), off-street parking, on-site management, playground, and picnic area. The Subject will be superior to the comparables given the in-unit washer/dryer and community room with business center. Both of these amenities are currently not offered at the Subject. 2. Site Description/Evaluation: The site is currently improved with the Subject. Immediately east of the Subject is Lakeshore Crossing Apartments, an unrestricted multifamily rental property that consists of single-story units that are in poor to average condition. Management was unavailable to comment on the property s current occupancy. Immediately south of the Subject site are mobile homes, single-family homes, and a Ferrellgas storage facility. The mobile homes are in poor to average condition while the single-family homes range in condition from poor to excellent as some are in disrepair and others are well-maintained. The Ferrellgas facility is small and does not appear to be a detrimental influence as it is surrounded by residential uses and is also wellmaintained. Immediately west of the Subject site are more single-family homes, some of which are in excellent Novogradac & Company LLP 2

condition. Land uses immediately north of the Subject primarily consist of wooded land. The Subject s immediate neighborhood is largely residential. Due to the presence of the railroad tracks located east of the Subject, there are some industrial uses in the Subject s larger neighborhood including a fertilizer plant. The presence of the railroad tracks do not pose as a detrimental influence given the well occupied surrounding uses. Among the closest retail to the Subject is the Piggly Wiggly grocery store, which is located approximately 0.8 miles from the Subject. Overall, retail and commercial uses are estimated to be 80 percent occupied as the older downtown commercial area appears to have vacant storefronts. All location amenities are within a few miles of the Subject site. The Subject has adequate visibility on Woodward Street, which is a two-lane lightly trafficked thoroughfare in a primarily residential neighborhood. Woodward Street connects to State Route 7/US 41, which is lined with commercial uses and is located approximately 0.5 miles west of the Subject. The Subject is located approximately 0.5 miles north of Union Street/State Route 90/27/215, which is also lined with commercial uses and travels west to provide access to Interstate 75 approximately 2.1 miles from the Subject. The Subject s access and visibility are considered adequate. Overall, the Subject is a compatible use in a largely residential neighborhood and will be an improvement to the neighborhood post renovations. 3. Market Area Definition: The boundaries of the PMA are as follows: North Pinehurst-Hawkinsville Road/Dooling; South- Dooly/Crisp County line; East-Dooly/Wilcox and Pulaski County lines; West-Dooly/Sumter and Macon County lines. The closest boundary is approximately 5.5 miles and the furthest boundary is approximately 16.0 miles from the Subject. The PMA is defined by the majority of Dooly County, excluding the far north section. The property manager indicated that most tenants are from Vienna and the nearby rural Dooly County towns. Novogradac & Company LLP 3

4. Community Demographic Data: As of 2010, there were 7,622 people within the PMA. The projected population in January 2013 is 7,569. The population is expected to decrease further to 7,515 people in 2015. The population in the surrounding counties is also projected to decrease. This is typical for rural areas. Households and average household size are decreasing as well. Approximately 71.1 percent of the homes within the PMA were owner-occupied and 28.9 percent of homes were renter-occupied in 2010. In the PMA, 43.4 percent of all households and 67.7 percent of renter households earn less than $29,999 within the PMA. The Subject will cater to these households. As of April 2011, there was only foreclosed property in the Vienna area. Only one in every 2,471 housing units received a foreclosure filing in Vienna in April. This is much lower than the state and national average. We did not witness abandoned homes in the Subject s neighborhood. 5. Economic Data: Covered employment levels in Dooly County have fluctuated from 2000 to 2010. Employment decreased from 2001 to 2004, increased substantially in 2005, decreased in 2006, increased in 2007 and then decreased thereafter. All employment gains over the last 10 years have been negated by the recent employment losses over the last few years. The largest industry in the PMA is manufacturing at almost 50 percent. It is followed by trade, transportation, and utilities at 25.17 percent. These industries are typically unstable; however the largest manufacturer in Vienna is Tyson, which is considered a stable manufacturing plant. The PMA and surrounding counties have fairly unstable economies with decreasing total employment. As of April 2011, total employment in the surrounding counties was lower than the 2000 level by 5,554 jobs. Additionally, although unemployment has historically been higher than national levels, the 2009 figures indicate a sizeable increase in the local unemployment rate. Additionally, it is important to note that the 2011 YTD data is an average for the whole year through April 2011. However, it did indicate a 0.1 percent decline in unemployment, with total employment still posting large losses, albeit lower than the prior four years. This is most likely due to the unstable manufacturing industry. The local economy appears to be slowly improving, but the full effect of the previous recession remains to be seen. Novogradac & Company LLP 4

Despite the unstable economy, the Development Authority reported that in 2011, Riley Manufacturing, a company that produces forestry products has opened a plant in Vienna. 6. Project-Specific Affordability And Demand Analysis: Based on DCA s demand methodology, there are approximately 105 total income qualified renter households in the PMA. The Subject will not be adding to the current supply as it will be a renovation of an existing property. Therefore, the following capture rates are based off of the number of units that will need to be released postrenovation as these tenants will be rent overburdened. We believe the capture rates below are reasonable and achievable. CAPTURE RATE ANALYSIS CHART Unit Size Income limits Units Proposed* Total Demand Supply Net Demand Capture Rate 2BR 50% AMI 3 27 3 24 12.7% 2BR 60% AMI 3 34 3 31 9.6% 3BR 50% AMI 3 24 3 21 14.0% 3BR 60% AMI 2 32 2 30 6.7% Overall ALL 11 67 11 56 19.8% *Only includes units that will need to be released per the tenant relocation sheet. 7. Competitive Rental Analysis: The availability of LIHTC and market rate data is considered limited in the PMA. There is only one other LIHTC property operating without subsidy in Dooly County and only one market rate property. We have included the one LIHTC property. The market rate property, while next door to the Subject Lakeshore Crossing, suffers from deferred maintenance and a nonpresent landlord. We attempted to contact this property several times but the owner was unavailable. We contacted the maintenance man during our site visit, but he was unable to provide us with information regarding rents and vacancy. Therefore, this property was excluded. The Subject s property manager also indicated that they have tried to obtain their rents but have not been successful contacting the owner. Due to the limited information, we included one market rate/rural development property in Vienna and six market rate properties in Cordele. While Cordele is outside the PMA, this area represents the closest non-restricted rental product. We also provided classified Novogradac & Company LLP 5

listings as available. We have included a total of eight comparables, two in the PMA and six in Cordele. Post-renovation, the Subject will continue to target tenants at 50 and 60 percent AMI. There is only one property, St. Charles Place, which also offers units restricted to these AMI levels. Timber Ridge, while RD and market, also offers similarly priced rents. Post-renovation, the Subject s rents will increase by 10 to 12 percent. Currently, the As Is rents at the Subject are similar to St. Charles Place, the only other LIHTC property in Dooly County. The Subject is currently similar to this property with regards to amenities and age/condition. However, after the significant renovations totaling approximately $69,000 per unit, the Subject will be superior to St. Charles Place, particularly given the expanded unit sizes, addition of clubhouse with community room and computer center, and in-unit washer/dryers. Therefore, we believe that higher rents at the Subject will be reasonable. The rents in the PMA are significantly lower than the rents in neighboring Cordele. While Cordele is considered a superior location, the properties are all inferior with regards to age/condition and amenities. Per the US Census, the 2009 median income in Vienna was $19,913 compared to $22,604 in Cordele and the median rent in Vienna was $417 compared to $549 in Cordele. This represents a median household income differential of 14 percent and 32 percent for the median rent differential. The rents above have an advantage of well over this amount, ranging from 74 to 98 percent. Therefore, this additionally supports the Subject s proposed rents. 8. Absorption/Stabilization Estimate: None of the properties in the PMA represent new construction and therefore absorption could not be provided. The Subject is an existing property that is typically well occupied. Two of the three currently vacant units are in poor condition and are not leasable. Management indicated that they get several calls a week inquiring about availability. According to the property manager at the Subject, post-renovation, the units will be more desirable to Tyson workers. Novogradac & Company LLP 6

Per the tenant relocation spreadsheet, only eight of the 36 current tenants will be rent overburdened and these units will need to be released. We believe that given the renovations, these eight units will be leased within two months and still maintain a 93 percent occupancy rate. 9. Overall Conclusion: Based upon our market research, demographic calculations and analysis, we believe there is adequate demand for the Subject property as proposed. The Subject will be far superior to the existing housing stock, both in the PMA and in the neighboring Crisp County. The strengths of the Subject will be expanded unit sizes, in-unit washer/dryer, addition of community space such as clubhouse/community room and computer center, and the approximately $69,000 per unit renovation. There are no primary weaknesses. The Subject will have the highest rents in the County postrenovation, however given the significant renovations, we believe this rent increase is reasonable and will be achievable. Novogradac & Company LLP 7

Summary Table: (must be completed by the analyst and included in the executive summary) Development Name: Woodward Apartments Total # Units: 36 Location: 409 E Woodward Street, Vienna, GA # LIHTC Units: 36 PMA Boundary: North Pinehurst-Hawkinsville Road/Dooling; South- Dooly/Crisp County line; East-Dooly/Wilcox and Pulaski County lines; West-Dooly/Sumter and Macon County Farthest Boundary Distance to Subject: 16.0 miles RENTAL HOUSING STOCK (found on page _63, 89-91_) (PMA ONLY) Type # Properties Total Units Vacant Units Average Occupancy All Rental Housing 2 62 5 92% Market-Rate Housing 1 32 3 94% Assisted/Subsidized Housing not to include LIHTC 0 % LIHTC 1 30 2 93% Stabilized Comps 2 62 5 92% Properties in Construction & Lease Up 0 0 N/Ap N/Ap # Units # Bedroo ms Subject Development Average Market Rent Highest Unadjusted Comp Rent # Baths Size (SF) 4 @50% 2 1-1.5 1,011-1,026 12 @60% 2 1-1.5 1,011-1,026 Proposed Tenant Rent Per Unit Per SF Advantage Per Unit Per SF $303 $281 $0.31-7% $300 $0.33 $306 $281 $0.31-8% $300 $0.33 4 @50% 3 2 1,185 $376 $384 N/Av 2% $400 N/Av 16 @60% 3 2 1,185 $382 $384 N/Av 1% $400 N/Av DEMOGRAPHIC DATA (found on page _32, 33,53-58 _) 2000 2010 2013 Renter Households 814 28.2% 827 28.9% 819 28.8% Income-Qualified Renter HHs (LIHTC) 189 23.2% 192 23.2% 190 23.2% TARGETED INCOME-QUALIFIED RENTER HOUSEHOLD DEMAND (found on page _56_)* Type of Demand 30% 50% 60% Other: Renter Household Growth 1 1 1 Existing Households (Overburdened + Substandard) Overall 76 100 100 Homeowner conversion (Seniors) 0 0 0 Less Comparable/Competitive Supply 6 5 11 Secondary Market Area Demand 12 15 15 Net Income-qualified Renter HHs 83 110 105 CAPTURE RATES (found on page _57_) Marketrate Targeted Population 30% 50% 60% Marketrate Other: Overall Capture Rate 13.3% 8.2% 19.8% *Does not match demand analysis tables as this does not take into consideration persons per household. Novogradac & Company LLP 8

B. PROJECT DESCRIPTION

PROJECT DESCRIPTION Project Address and Development Location: Construction Type: Occupancy Type: Special Population Target: Number of Units by Bedroom Type and AMI Level: Unit Size: Structure Type: Rents and Utility Allowances: The Subject is located at 409 E. Woodward Street in Vienna, Dooly County, Georgia. The Subject consists of six, townhouse style brick and vinyl façade apartment buildings and one single-story community building. Family. None. See following property profile. See following property profile. See following property profile. See following property profile. Existing or Proposed Project Based Rental Assistance: None. Proposed Development Amenities: See following property profile. Novogradac & Company LLP 10

Property Profile Report Comp # Subject Woodward Apartments - As Renovated Location 409 E Woodward Street Vienna, GA 31092 Dooly County Distance n/a Units 36 Vacant Units N/A Vacancy Rate N/A Type Townhouse Year Built / Renovated 1995 / 2013 Market Program @50%, @60% Leasing Pace n/a Annual Turnover Rate N/A Change in Rent (Past n/a Year) Units/Month Absorbed n/a Concession Section 8 Tenants N/A Utilities A/C not included -- central Other Electric not included Cooking not included -- gas Water not included Water Heat not included -- gas Sewer not included Heat not included -- electric Trash Collection included Unit Mix (face rent) Beds Baths Type Units Size (SF) Rent Concession (monthly) Restriction Waiting List Vacant Vacancy Rate Max rent? 2 1 Townho 1 1,011 $303 $0 @50% n/a N/A N/A no use 2 1 Townho 1 1,011 $306 $0 @60% n/a N/A N/A no use 2 1.5 Townho 3 1,026 $303 $0 @50% n/a N/A N/A no use 2 1.5 Townho 11 1,026 $306 $0 @60% n/a N/A N/A no use 3 2 Townho 4 1,185 $376 $0 @50% n/a N/A N/A no use 3 2 Townho use 16 1,185 $382 $0 @60% n/a N/A N/A no Amenities In-Unit Balcony/Patio Security none Blinds Cable/Satellite/Internet Carpeting Central A/C Dishwasher Oven Refrigerator Walk-In Closet Washer/Dryer Property Business Center/Computer Lab Clubhouse/Meeting Room/Community Room Off-Street Parking On-Site Management Picnic Area Playground Premium none Services none Other none Comments Gross rents will be as follows: 2BR @50% - $470 2BR @60% - $473 3BR @50% - $580 3BR @60% - $586 Novogradac & Company LLP 11

Scope of Renovations: Per the developer, renovations will total $69,000 per unit and will be significant. The scope of renovations will include, but are not limited to: Increased unit size by an average of 20 percent New wood cabinets New low VOC carpet New walls, flooring, fixtures, ceiling fans, low-e windows, and doors New high efficiency HVAC New EnergyStar appliances New washer/dryer in-unit Upgraded landscaping New fiber cement Hardi-plank siding New roof shingles Converting one unit to community space Updated clubhouse with addition of community room and business center New playground Remodeled leasing office Current Rents: The following table illustrates the proposed rents with the current rents per the April 30, 2011 rent roll. Unit Mix Current Rents* Proposed Rents Percent Differential 2BR @ 50% AMI $271 $303 12% 2BR @ 60% AMI $274 $306 12% 3BR @ 50% AMI $342 $376 10% 3BR @ 60% AMI $342 $382 12% *Adjusted for utility change Post-renovation, water and sewer will be sub metered and this will be a tenant expense. Currently, the landlord pays for water, sewer and trash. Due to the utility stricture change, we have adjusted the current rents downward to compensate for the additional cost to the tenants. The proposed rents will increase by approximately 10 to 12 percent. Current Occupancy: Current Tenant Income: The Subject is currently 92 percent leased. Two of the units are unable to be leased at this time due to condition. Per the tenant relocation sheet, gross tenant incomes range from $1,020 to $38,480. The lower incomes are due to voucher tenants. The average tenant income is $17,162. Novogradac & Company LLP 12

All but eight tenants will be income qualified and not rentoverburnded post-renovation. Placed in Service Date: Conclusion: During renovations, tenants will be temporarily displaced. Renovations are scheduled to be completed in January 2013. The Subject will be an excellent -quality brick and vinyl sided townhouse style apartment complex, comparable to most of the inventory in the area. As newly renovated, the Subject will be in good to excellent condition. Novogradac & Company LLP 13

C. SITE EVALUATION

1. Date of Site Visit and Name of Site Inspector: Kristina Garcia, June 8, 2011. 2. Physical Features of the Site: The following illustrates the physical features of the site. Frontage: Visibility/Views: Surrounding Uses: The Subject site has frontage along E Woodward Street. The Subject has adequate visibility on Woodward Street, which is a two-lane lightly trafficked thoroughfare in a primarily residential neighborhood. Views include singlefamily homes ranging in condition from average to good, mobile homes in poor to average condition, an unrestricted multifamily property (Lakeshore Crossing) that is in poor to average condition, and neighborhood gas storage facility. Overall, views are average and the Subject maintains a high occupancy rate; therefore, we do not believe views of the gas storage facility or the mobile homes impacts the Subject s performance significantly. The following map and pictures illustrate the surrounding land uses. The Subject is located in a primarily residential neighborhood with single-family and mobile homes that range widely in condition from poor to excellent. Novogradac & Company LLP 15

Commercial uses are located within one mile of the Subject along the major highways in Vienna including State Routes 41 to the west and 27 to the south. The majority of homes are in average to good condition and retail is estimated to be 80 percent occupied. Positive/Negative Attributes of Site: Negative attributes of the site include its proximity to railroad tracks, mobile homes in average condition, and a gas storage facility. However, these neighborhood uses do not appear to be impacting the Subject s performance significantly as the Subject is maintaining a healthy occupancy rate. Two of the three vacancies are due to units requiring repair. Positive attributes of the site include the fact that the neighborhood is established and is close to downtown Vienna and neighborhood services. Overall, the Subject s location is adequate as it is located in central Vienna. 3. Physical Proximity to Locational Amenities: All amenities and community services are located within two miles from the Subject, including retail, employment and community services. 4. Pictures of Site and Adjacent Uses: Subject signage Subject entrance Novogradac & Company LLP 16

View East on Woodward Street View West on Woodward Street Subject Subject Playground Office and mailbox area Novogradac & Company LLP 17

Leasing office Central laundry facility Property layout View of parking Typical living room Typical entrance Novogradac & Company LLP 18

Typical unit staircase (Townhouse unit) Typical bedroom Typical closet Typical bedroom Typical bedroom Typical bathroom Novogradac & Company LLP 19

Typical kitchen Typical laundry area (washer/dryer connections) Typical living area (One-story unit) Typical back patio HVAC units View of Lakeshore Crossing East (adjacent) Novogradac & Company LLP 20

Lakeshore Crossing East (adjacent) Ferrellgas facility - South Single-family homes South (Poor to good condition) Single-family home Excellent condition Mobile home - South Railroad tracks - East Novogradac & Company LLP 21

Cemetery - West Coley Gin & Fertilizer - South Piggly Wiggly - South 5. Proximity to Locational Amenities: Downtown commercial uses - South The following table details the Subject s distance from key locational amenities. Novogradac & Company LLP 22

LOCATIONAL AMENITIES Map # Service/Amenity Distance from Subject 1 Vienna Elementary School 1.5 miles 2 Dooly County Middle School 0.6 miles 3 Dooly County High School 0.6 miles 4 South Care Medical Center 1.6 miles 5 Piggly Wiggly 0.8 miles 6 Forbes Drug Company 0.7 miles 7 Dooly County Library 2.0 miles 8 Vienna City Police Department 1.4 miles 9 Dooly County Fire Department 0.8 miles 10 Southwest Georgia Business Development Center 1.6 miles 11 Dooly-Crisp Unified Transportation 1.5 miles 12 Tyson - Employment Center 1.5 miles 6. Description of Land Uses: The site is currently improved with the Subject. Immediately east of the Subject is Lakeshore Crossing Apartments, an unrestricted multifamily rental property that consists of single-story units that are in poor to average condition. Management was unavailable to comment on the property s current occupancy. Immediately south of the Novogradac & Company LLP 23

Subject site are mobile homes, single-family homes, and a Ferrellgas facility. The mobile homes are in poor to average condition while the single-family homes range in condition from average to good. The Ferrellgas facility is small and does not pose as a detrimental influence as it is surrounded by residential uses and is well maintained. Immediately west of the Subject site are more single-family homes, some of which are in excellent condition. And, land uses immediately north of the Subject primarily consist of wooded land. Overall, the Subject offers an adequate location and is compatible with existing uses. 7. Multifamily Residential within Two Miles: A two mile radius from the Subject incorporates the entire city of Vienna. There are very few multifamily properties in the city. They include: the Subject, St. Charles Place, Lakeshore Crossing, Timber Ridge Apartments and Fairfield Apartments I & II (senior). The three family properties are included as comparables and will be discussed in the supply section of this report. 8. Existing Assisted Rental Housing Property Map: The following map and list identifies all assisted rental housing properties in the PMA. SUBSIDIZED PROPERTIES IN PMA Name Type Tenancy Map Color Included/Excluded Reason for Exclusion Distance from Subject Woodward Apartments LIHTC Family Subject Subject Subject St. Charles Place LIHTC Family Included N/Ap 1.1 miles Options for Living Inc. Section 8 Disabled Excluded Rent Subsidized 0.3 miles Fairfield Apartments Rural Development Senior Excluded Rent Subsidized 0.9 miles Timber Ridge Apartments Rural Development Family Included N/Ap 1.1 miles Novogradac & Company LLP 24

9. Road/Infrastructure Proposed Improvements: 10. Access, Ingress/Egress and Visibility of site: The city is planning a major improvement Woodward Street for sewer infrastructure. The details of this plan are located in the Interview section of this report. The Subject has adequate visibility on Woodward Street, which is a two-lane lightly trafficked thoroughfare in a primarily residential neighborhood. Woodward Street connects to State Route 7/US 41, which is lined with commercial uses and is located approximately 0.5 miles west of the Subject. The Subject is located approximately 0.5 miles north of Union Street/State Route 90/27/215, which is also lined with commercial uses and travels west to provide access to Interstate 75 approximately 2.1 miles from the Subject. The Subject s access and visibility are considered adequate. Overall, the Subject is a compatible use in a largely residential neighborhood and will be an improvement to the neighborhood post renovations. Novogradac & Company LLP 25

11. Environmental Concerns: None visible upon site inspection. Detrimental Influences: There are no significant detrimental influences. As mentioned previous, there are railroad tracks and the Ferrellgas facility are located in the Subject s neighborhood. However, given the surrounding existing residential uses, neither pose as a detrimental influences. The property manager confirmed this and indicated that they are generally fully occupied further illustrating that these uses are not a detriment to the Subject. 12. Conclusion: The Subject is located along Woodward Street which contains a mixture of retail/commercial, residential and industrial uses. The Subject is located within close proximity of retail. The Subject s access and visibility are considered adequate. Overall, the Subject is a compatible use in a largely residential neighborhood and will be an improvement to the neighborhood post renovations. Novogradac & Company LLP 26

D. MARKET AREA

PRIMARY MARKET AREA For the purpose of this study, it is necessary to define the market area, or the area from which potential tenants for the project are likely to be drawn. In some areas, residents are very much neighborhood oriented and are generally very reluctant to move from the area where they have grown up. In other areas, residents are much more mobile and will relocate to a completely new area, especially if there is an attraction such as affordable housing at below market rents. Primary Market Area Map Novogradac & Company LLP 28

Comparable Property Map COMPARABLE PROPERTIES # Property Name City Type Distance 1 St. Charles Place Vienna LIHTC 1.6 miles 2 Cambridge Apartments Cordele Market 12.1 miles 3 Emerald Apartments Cordele Market 12.8 miles 4 Madison Place Apartments Cordele Market 10.9 miles 5 Pecan Terrace Cordele Market 12.1 miles 6 St. James Apartments Cordele Market 12.7 miles 7 Timber Ridge Vienna Development 0.3 miles 8 Whisperwoods Apartments Cordele Market 11.4 miles Novogradac & Company LLP 29

Locational Amenities in PMA LOCATIONAL AMENITIES Map # Service/Amenity Distance from Subject 1 Vienna Elementary School 1.5 miles 2 Dooly County Middle School 0.6 miles 3 Dooly County High School 0.6 miles 4 South Care Medical Center 1.6 miles 5 Piggly Wiggly 0.8 miles 6 Forbes Drug Company 0.7 miles 7 Dooly County Library 2.0 miles 8 Vienna City Police Department 1.4 miles 9 Dooly County Fire Department 0.8 miles 10 Southwest Georgia Business Development Center 1.6 miles 11 Dooly-Crisp Unified Transportation 1.5 miles 12 Tyson - Employment Center 1.5 miles The following sections will provide an analysis of the demographic characteristics within the market area. Data such as population, households and growth patterns will be studied, to determine if the Primary Market Area (PMA) and the SMA are areas of growth or contraction. The boundaries of the PMA are as follows: North Pinehurst-Hawkinsville Road/Dooling South- Dooly/Crisp County line East-Dooly/Wilcox and Pulaski County lines West-Dooly/Sumter and Macon County lines Novogradac & Company LLP 30

The PMA is defined by the majority of Dooly County, excluding the far north section. The property manager indicated that most tenants are from Vienna and the nearby rural Dooly County towns. Tenants outside of Dooly County and Vienna primarily come from Cordele and Crisp County, and a few from Americus. We have not included these areas as part of the PMA, but do expect some leakage from these areas. Therefore, we have adjusted for 15 percent leakage from outside of the PMA. Novogradac & Company LLP 31

E. COMMUNITY DEMOGRAPHIC DATA

COMMUNITY DEMOGRAPHIC DATA The following sections will provide an analysis of the demographic characteristics within the market area. Data such as population, households and growth patterns will be studied to determine if the Primary Market Area (PMA) and the Dooly, Crisp, Sumter Counties SMA are areas of growth or contraction. The discussions will also describe typical household size and will provide a picture of the health of the community and the economy. The following demographic tables are specific to the populations of the PMA and SMA. 1. Population Trends The following tables illustrate (a) Total Population, (b) Population by Age Group within population in MSA, the PMA and nationally from 1990 through 2015. POPULATION Year PMA Dooly, Crisp, Sumter Counties, GA USA Number Annual Change Number Annual Change Number Annual Change 1990 7,272-60,140-248,709,873-2000 7,757 0.7% 66,721 1.1% 281,421,906 1.3% 2010 7,622-0.2% 66,221-0.1% 311,212,863 1.0% Projected Mkt Entry January 2013 7,569-0.3% 65,813-0.2% 317,211,127 0.8% 2015 7,515-0.3% 65,404-0.2% 323,209,391 0.8% Source: ESRI Demographics 2010, Novogradac & Company LLP, June 2011 Age Cohort PMA POPULATION BY AGE IN 2010 Dooly, Crisp, Sumter Counties, GA Number Percentage Number Percentage Number Percentage 0-4 563 7.4% 4,980 7.5% 21,296,740 6.8% 5-9 554 7.3% 4,824 7.3% 20,832,961 6.7% 10-14 524 6.9% 4,580 6.9% 20,369,284 6.5% 15-19 512 6.7% 4,817 7.3% 21,883,995 7.0% 20-24 473 6.2% 4,836 7.3% 21,459,235 6.9% 25-29 506 6.6% 4,618 7.0% 21,517,303 6.9% 30-34 478 6.3% 4,296 6.5% 19,852,007 6.4% 35-39 426 5.6% 4,147 6.3% 20,531,543 6.6% 40-44 493 6.5% 4,186 6.3% 21,232,056 6.8% 45-49 527 6.9% 4,380 6.6% 23,163,948 7.4% 50-54 529 6.9% 4,286 6.5% 22,315,436 7.2% 55-59 529 6.9% 4,098 6.2% 19,742,941 6.3% 60-64 449 5.9% 3,602 5.4% 16,544,050 5.3% 65-69 336 4.4% 2,528 3.8% 12,081,110 3.9% 70-74 242 3.2% 1,871 2.8% 9,033,665 2.9% 75-79 184 2.4% 1,532 2.3% 7,339,326 2.4% 80-84 149 2.0% 1,244 1.9% 5,947,153 1.9% 85+ 148 1.9% 1,396 2.1% 6,070,110 2.0% Total 7,622 100.0% 66,221 100.0% 311,212,863 100.0% Source: ESRI Demographics 2010, Novogradac & Company LLP, June 2011 USA Novogradac & Company, LLP 33

Annual growth within the PMA and SMA has slightly decreased in 2010 and is projected to decrease throughout the year 2015. The largest age cohort within the PMA and SMA are in the 0-9 age range, followed. This suggests there is a high family population within the general area. Population decreases are typical in rural areas such as the Subject. 2. Household Trends 2a. Total Number of Households, Average Household Size HOUSEHOLDS Year PMA Dooly, Crisp, Sumter Counties, GA USA Number Annual Change Number Annual Change Number Annual Change 1990 2,584-21,328-91,947,410-2000 2,880 1.1% 24,271 1.4% 105,480,101 1.5% 2010 2,862-0.1% 24,217 0.0% 116,761,140 1.0% Projected Mkt Entry January 2013 2,847-0.2% 24,110-0.2% 119,060,372 0.8% 2015 2,832-0.2% 24,002-0.2% 121,359,604 0.8% Source: ESRI Demographics 2010, Novogradac & Company LLP, June 2011 AVERAGE HOUSEHOLD SIZE Year PMA Dooly, Crisp, Sumter Counties, GA USA Number Annual Change Number Annual Change Number Annual Change 1990 2.76-2.73-2.63-2000 2.65-0.4% 2.62-0.4% 2.59-0.1% 2010 2.61-0.1% 2.57-0.2% 2.59 0.0% Projected Mkt Entry January 2013 2.60-0.1% 2.57-0.1% 2.59 0.0% 2015 2.60-0.1% 2.56-0.1% 2.60 0.0% Source: ESRI Demographics 2010, Novogradac & Company LLP, June 2011 Similar to population trends, household growth in the PMA and has also decreased 0.1 percent in 2010. It is expected to decrease another 0.2 percent annually through 2015. Average household size has also slowed and is expected to decrease 0.1 percent through 2015. 2b. Households by Tenure The table below depicts household growth by tenure from 1990 through 2006. TENURE PATTERNS PMA Year Owner-Occupied Units Percentage Owner- Occupied Renter-Occupied Units Percentage Renter- Occupied 1990 1,775 68.69% 809 31.31% 2000 2,066 71.74% 814 28.26% 2010 2,035 71.10% 827 28.90% Projected Mkt Entry January 2013 2,028 71.23% 819 28.77% 2015 2,021 71.36% 811 28.64% Source: ESRI Demographics 2010, Novogradac & Company LLP, June 2011 Novogradac & Company, LLP 34

As the table illustrates, households within the PMA are predominately owner-occupied residences. In 2010, the percentage of owner-occupied homes was 71.1 percent. This is only slightly higher than the national average of two-thirds. Renter-occupied households are in the minority and are projected to decrease slightly through 2015. 2c. Households by Income The following table depicts household income in 2010 and 2015 for the PMA. HOUSEHOLD INCOME PMA PMA Income Cohort 2010 Projected Mkt Entry January 2013 2015 Annual Change 2010 to 2015 Number Percentage Number Percentage Number Percentage Number Percentage $0-9,999 436 15.2% 412 14.5% 387 13.7% -10-2.3% $10,000-19,999 397 13.9% 373 13.1% 350 12.4% -9-2.4% $20,000-29,999 410 14.3% 389 13.7% 368 13.0% -8-2.1% $30,000-39,999 306 10.7% 309 10.9% 313 11.0% 1 0.4% $40,000-49,999 284 9.9% 275 9.6% 265 9.4% -4-1.4% $50,000-59,999 237 8.3% 227 8.0% 217 7.6% -4-1.7% $60,000-74,999 372 13.0% 379 13.3% 386 13.6% 3 0.8% $75,000-99,999 245 8.5% 260 9.1% 275 9.7% 6 2.5% $100,000+ 176 6.2% 224 7.9% 272 9.6% 19 10.9% Total 2,862 100.0% 2,847 100.0% 2,832 100.0% Source: Ribbon Demographics 2007, Novogradac & Company LLP, June 2011 Renter Household Income Distribution - PMA Income Cohort 2010 Projected Mkt Entry January 2013 2015 Number Percentage Number Percentage Number Percentage $0-9,999 272 32.9% 260 31.7% 247 30.5% $10,000-19,999 163 19.7% 153 18.6% 142 17.5% $20,000-29,999 125 15.1% 116 14.2% 108 13.3% $30,000-39,999 62 7.5% 61 7.5% 61 7.5% $40,000-49,999 55 6.7% 60 7.3% 65 8.0% $50,000-59,999 21 2.6% 19 2.3% 16 2.0% $60,000-74,999 60 7.3% 66 8.0% 71 8.7% $75,000-99,999 40 4.8% 45 5.5% 50 6.2% $100,000+ 29 3.5% 39 4.8% 50 6.1% Total 827 100.0% 819 100.0% 811 100.0% Source: Ribbon Demographics 2007, Novogradac & Company LLP, June 2011 The majority of households in the PMA earn incomes between $0 and $9,999. This is expected to remain the highest income cohort through 2015. Approximately 43.4 percent of all households and 67.7 percent of renter households earn less than $29,999 within the PMA. The Subject will cater to these households. 2d. Renter Households by Number of Persons in the Household The following table illustrates the number of persons per household among renter households. Renter Households by Number of Persons - PMA 2000 2010 Projected Mkt Entry January 2013 2015 Number Percentage Number Percentage Number Percentage Number Percentage With 1 Person 248 30.5% 281 34.0% 289 35.3% 298 36.7% With 2 Persons 184 22.6% 173 21.0% 162 19.8% 150 18.6% With 3 Persons 156 19.2% 146 17.6% 143 17.5% 140 17.3% With 4 Persons 107 13.2% 110 13.3% 109 13.4% 109 13.5% With 5+ Persons 118 14.6% 117 14.2% 115 14.1% 113 14.0% Total Renter Households 814 100.0% 827 100.0% 819 100.0% 811 100.0% Novogradac & Company, LLP 35

One person households accounted for only 34 percent of the population in 2010. This is a slight increase from 2000. The Subject offers two and three-bedroom units, which accommodates two to five person households. 2e and f. Elderly and HFOP N/Ap CONCLUSION The PMA and MSA have declines in population, households, and household size from 2000 to 2010. This decrease and is expected to increase from 2011 to 2015. However, the largest age cohorts are in the 0-4 and 5-9 age range, indicting there are number of families with children. Over the next four years, owner-occupied homes are expected to increase slightly and renteroccupied homes are expected to decrease slightly. The percentage of owner-occupied homes is only moderately higher than that of the nation. Approximately 43.4 percent of all households and 67.7 percent of renter households earn less than $29,999 within the PMA. The Subject will cater to these households. Overall, the Subject is an existing property and will not be adding to the supply. Novogradac & Company, LLP 36

F. EMPLOYMENT TRENDS

Employment Trends Consistent with national trends, the greater SMA and PMA areas have undergone economic contractions 2009 that are continuing into 2011. Various manufacturing companies have experienced layoffs and closures. While there are some announced expansions in the Dooly County area, these are subject to the continuing economic recession, market demand fluctuations, and constraints on obtaining financing. 1. Total Jobs The following table illustrates the total jobs (also known as covered employment ) in Dooly County. COVERED EMPLOYMENT IN DOOLY COUNTY Year Total % Employment Change 2001 3,718 2002 3,569-4.17% 2003 3,474-2.73% 2004 3,293-5.50% 2005 3,567 7.68% 2006 3,426-4.12% 2007 3,489 1.81% 2008 3,313-5.31% 2009 3,255-1.78% 2010 YTD Average* 3,131-3.96% Sep-09 3,157 - Sep-10 3,032-4.12% Source: U.S. Bureau of Labor Statistics *YTD as of Sept 10 Employment levels in Dooly County have fluctuated from 2000 to 2010. Employment decreased from 2001 to 2004, increased substantially in 2005, decreased in 2006, increased in 2007 and then decreased thereafter. All employment gains over the last 10 years have been negated by the recent employment losses over the last few years. As of September 2010, Dooly County continued to lose an additional considerable percentage of jobs. The year to date data indicates that the pace of jobs lost in the Dooly County is not slowing and is slightly higher than national levels. 2. Total Jobs by Industry The following table illustrates the total jobs by employment sectors within the County as of second quarter 2010.