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A MARKET FEASIBILITY STUDY OF LEGACY APARTMENTS 1001 Singleton

VIEWS: 18 PAGES: 117

									A MARKET FEASIBILITY STUDY OF
            LEGACY APARTMENTS
            1001 Singleton Ridge Road
 Conway, Horry County, South Carolina
                     Effective Date: March 25, 2010
                        Report Date: April 15, 2010


                                       Prepared For

                                      Prepared For
                                 Ms. Laura Nicholson
                         Tax Credit Program Manager
    SC State Housing Finance & Development Authority
                           300-C Outlet Pointe Blvd
                               Columbia, SC 29210

                           Application Code: 10059

                  Assignment Code: SOU601V 038


                                        Prepared By

                      Novogradac & Company LLP
                           2325 Lakeview Parkway
                                         Suite 450
                         Alpharetta, Georgia 30009
                                      678.867.2333
April 15, 2010
Ms. Laura Nicholson
Tax Credit Program Manager
SC State Housing Finance & Development Authority
300-C Outlet Pointe Blvd
Columbia, SC 29210

Re:      Market Study for Legacy Apartments I, Conway, South Carolina


Dear Ms. Nicholson:
At your request, Novogradac & Company LLP performed a study of the multifamily rental housing
market in the Conway, Horry County, South Carolina area relative to the above-proposed Low-
Income Housing Tax Credit (LIHTC) project known as Legacy Apartments I (the Subject).
The purpose of this market study is to assess the viability of Legacy Apartments I, an existing
development consisting of 90 units. The property will offer affordable rental units restricted to
households earning 50 and 60 percent or less of the Area Median Gross Income (AMI). 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 South Carolina State Housing Finance & Development Authority
(SCSHFDA), 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 levels for the market area.
•     Investigating the health and conditions of the multifamily housing 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 Parkway, Suite 450, Alpharetta, Georgia 30009
                                   Telephone 678.867.2333, Fax 678.867.2366
                                                 Novoco.com
SCSHFDA
Legacy Apartments I
April 15, 2010
Cover Letter 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.
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,
Novogradac & Company LLP




H. Blair Kincer, MAI
Partner
Novogradac & Company LLP




Michalena M. Sukenik
Manager
Novogradac & Company LLP




Kristina V. Garcia
Real Estate Analyst




                        2325 Lakeview Parkway, Suite 450, Alpharetta, Georgia 30009
                                Telephone 678.867.2333, Fax 678.867.2366
                                              Novoco.com
                                                        Table of Contents
EXECUTIVE SUMMARY………………………………………………………...…………….….1
A. PROJECT DESCRIPTION……………………………………………………………………...7
B. SITE DESCRIPTION ...................................................................................................................12
C. MARKET AREA ..........................................................................................................................18
   Primary Market Area ...................................................................................................................... 19
D. MARKET AREA ECONOMY ....................................................................................................23
   Regional and Local Economic Overview ....................................................................................... 24
   Commuting Patterns........................................................................................................................ 29
   Conclusions ..................................................................................................................................... 29
E. COMMUNITY DEMOGRAPHIC DATA ..................................................................................30
   Household Trends ........................................................................................................................... 32
   Renter Households by Number of Persons in the Household ......................................................... 34
   Conclusion ...................................................................................................................................... 34
F. PROJECT-SPECIFIC DEMAND ANALYSIS ..........................................................................35
G. SUPPLY ANALYSIS....................................................................................................................58
   Survey of Comparable Projects ...................................................................................................... 59
   Reasonability of Rents .................................................................................................................... 73
   Summary Evaluation of the Proposed Project ................................................................................ 77
H. INTERVIEWS .............................................................................................................................78
I. RECOMMENDATIONS ..............................................................................................................80
J. SIGNED STATEMENT REQUIREMENTS ..............................................................................82
Addenda ..............................................................................................................................................84
EXECUTIVE SUMMARY
                                                                        Legacy Apartments I - Conway, SC – Market Study


PROPERTY SUMMARY OF SUBJECT

  Subject Property Overview:                     Legacy Apartments I, the Subject, is an existing 90-unit
                                                 LIHTC family property that is being proposed for
                                                 rehabilitation. The Subject currently offers two- and three-
                                                 bedroom units at 50 and 60 percent AMI. If allocated, the
                                                 Subject will continue to offer two- and three-bedroom units at
                                                 50 and 60 percent AMI without any additional subsidies. The
                                                 Subject is located at 1001 Singleton Ridge Road in Conway,
                                                 SC. The Subject, post-renovation, will consist of seven three-
                                                 story garden style residential buildings and one community
                                                 building. The Subject is currently 93 percent occupied.

  Targeted Tenancy:                              Family.

  Proposed Rents, Unit Mix,
  and Utility Allowance:                         The following table details the Subject’s proposed rents, utility
                                                 allowances, and unit mix.


                                                    PROPOSED RENTS
                                                                                          LIHTC
                                                            Utility                      Maximum      HUD Fair
                                    Number of             Allowance             Gross    Allowable     Market
              Unit Type               Units   Asking Rent     (1)               Rent     Gross Rent    Rents
                                                      50% AMI
                 2BR                   18        $480        $101               $581        $590         $786
                 3BR                   18        $560        $120               $680        $681         $939
                                                      60% AMI
                 2BR                   24        $595        $101               $696        $708         $786
                 3BR                   30        $650        $120               $770        $817         $939
                 Total                 90
     Notes (1) Source of Utility Allowance provided by the Developer.


                                                 The Subject is currently 93 percent occupied. Management is
                                                 offering concessions for the two-bedroom units at 60 percent
                                                 AMI and the three-bedroom units. The Subject’s proposed
                                                 rents at 50 percent AMI will be zero to 12 percent greater than
                                                 current concessed rents and the Subject’s 60 percent AMI units
                                                 will be 13 to 24 percent greater than the Subject’s current
                                                 concessed rents.




Novogradac & Company LLP                                                                                   1
                                                             Legacy Apartments I - Conway, SC – Market Study




Market Vacancy                           The following table illustrates the market vacancy at the
                                         comparable properties.


                                                  Vacancy (All)
                                                                                                       Vacancy
             Property Name            Rent Structure        Location      Total Units   Vacant Units     Rate
            Bells Bay Landing            LIHTC              Conway            60             1           1.7%
           Crabtree Commons              LIHTC              Conway            48             0           0.0%
         Legacy Apartments II         LIHTC, Market         Conway           112            10           8.9%
      Flintlake Apartment Homes          Market            Myrtle Beach      272            22           8.1%
             Patriot's Hollow            Market             Conway            53             3           5.7%
              River Landing              Market            Myrtle Beach      340            37          10.9%
  The Abbey At Ridgewood Plantation      Market            Myrtle Beach      180            14           7.8%
                  Total                                                     1,065           87          8.2%

                                          Vacancy (LIHTC Properties)
                                                                                                       Vacancy
             Property Name            Rent Structure         Location     Total Units   Vacant Units    Rate
            Bells Bay Landing            LIHTC               Conway           60             1          1.7%
           Crabtree Commons              LIHTC               Conway           48             0          0.0%
          Legacy Apartments II*       LIHTC, Market          Conway           60             5          8.3%
                  Total                                                      168             6          3.6%
*LIHT C units only


                                          Vacancy (Market Properties)
                                                                                                       Vacancy
             Property Name            Rent Structure        Location      Total Units   Vacant Units     Rate
        Legacy Apartments II*         LIHTC, Market         Conway            52             5           9.6%
      Flintlake Apartment Homes          Market            Myrtle Beach      272            22           8.1%
             Patriot's Hollow            Market             Conway            53             3           5.7%
              River Landing              Market            Myrtle Beach      340            37          10.9%
  The Abbey At Ridgewood Plantation      Market            Myrtle Beach      180            14           7.8%
                  Total                                                      897            81          9.0%
*Market rate units only



                                         Average vacancy in the market is moderate at 8.2 percent. The
                                         average LIHTC vacancy rate at 3.6 percent is significantly
                                         lower when compared to market rate vacancy at 9.0 percent.
                                         Legacy II has the highest LIHTC vacancy rate among the
                                         LIHTC comparables. The property manager indicated that the
                                         management company changed in January 2010 at which time
                                         there were a significant number of evictions because the prior
                                         management company reportedly carried delinquencies or non-
                                         payments of rent for an extended period of time. When the new
                                         management took over in January 2010, the property
                                         maintained a vacancy rate of 17 to 21 percent due to evictions.
                                         Currently, vacancy has decreased to eight percent. Further,
                                         despite the good condition of the property’s exteriors,
                                         management indicated that the property’s interiors suffer from
Novogradac & Company LLP                                                                           2
                                            Legacy Apartments I - Conway, SC – Market Study


                           some deferred maintenance and require renovations, which has
                           affected the property’s vacancy rate. It also appears that
                           Legacy II has the highest vacancy rate because the property
                           offers the highest LIHTC rents in the market. We believe
                           tenants are currently price sensitive as the Subject is in good
                           condition, offers an excellent location, and offers both
                           comparable unit sizes and amenity package. Post-renovation,
                           the Subject will be in excellent condition. Crabtree Commons
                           is in excellent condition as well as it was built in 2007 and it
                           offers a competitive amenity package and is located within
                           close proximity to retail. In contrast to Legacy II, Crabtree
                           Commons is maintaining a zero percent vacancy rate, which is
                           largely due to the property’s very low rents. Currently, Legacy
                           I and II are offering concessions on its units at 50 percent AMI
                           and on its three-bedroom units in order to increase occupancy.
                           These concessed rents are above Crabtree Commons. Bells Bay
                           Landing is also maintaining a very low vacancy rate at less
                           than two percent. The concessed LIHTC rents at Legacy I and
                           II for the 50 percent AMI units are above those at Bells Bay
                           Landing and the concessed rents for the 60 percent units are
                           below Bells Bay Landing, which is in good condition and
                           offers a good location. The property is likely achieving a lower
                           vacancy rate than the Subject and Legacy II for several
                           reasons:

                           • Bells Bay Landing offers fewer units total (60 versus 90 at
                             Legacy I and 112 at Legacy II)
                           • Bells Bay Landing offers four-bedroom units, which are rare
                             in the market and therefore lack competition. Management
                             indicated that these units rarely become available.
                           • Bells Bay Landing only offers 11 units at 60 percent of AMI
                             total versus 72 at Legacy I and 35 at Legacy II.

                           Average vacancy among market rate units is moderate at 9.0
                           percent. Three of the four market rate properties are located in
                           Myrtle Beach, which is saturated with market rate properties.
                           Management at properties such as Flintlake Apartments
                           indicated that there is significant market rate competition in
                           Myrtle Beach, which exacerbates vacancy issues during
                           economic downturns such as the current one. Further, market
                           rents are significantly higher than LIHTC rents as they are
                           above the maximum allowable LIHTC rents. Average market
                           rents among the comparables are 52.8 to 70.6 percent greater
                           than the average two- and three-bedroom LIHTC rents. River
                           Landing is maintaining the highest vacancy rate of all of the
                           comparables. Management reported higher turnover at the
                           property due to the local economy’s reliance on the tourism
Novogradac & Company LLP                                                       3
                                                       Legacy Apartments I - Conway, SC – Market Study


                                      and food/accommodations industries. Further, although River
                                      Landing has good visibility from Edward E. Burroughs
                                      Highway (aka Highway 501), the property offers an inferior
                                      location than the Subject as it is isolated and is not located in
                                      close proximity to retail. The Subject will also be superior to
                                      River Landing in age/condition as it will undergo significant
                                      renovations including new roofs, flooring, siding, and
                                      appliances.

                                      There are five vacant market rate units at Legacy II.
                                      Management indicated that the current vacancy rate is typical
                                      for the property due to the current economy. Further,
                                      management is not offering a concession on the market rate
                                      units as there are only five vacancies among these units total.
                                      The current vacancy rate at Legacy I is 6.7 percent. As the rent
                                      discussion will illustrate, we recommend that the Subject’s
                                      proposed rents at 60 percent AMI be lowered. With
                                      renovations and lowered rents, we believe the Subject can
                                      maintain a vacancy rate of five percent or less.

Capture Rates:                        The following tables illustrate the capture rates for the Subject
                                      for both scenarios “As Proposed” and “As NOVOCO
                                      Recommended” with lower rents at 60 percent AMI.


                       SUBJECT CAPTURE RATES - AS PROPOSED
 Unit Type             Total Demand      Supply   Net Demand       Units Proposed     Capture Rate
 2BR at 50% AMI             667            0          667                18               2.7%
 3BR at 50% AMI             507            0          507                18               3.5%
 2BR at 60% AMI             185            0          185                24              13.0%
 3BR at 60% AMI             140            0          140                30              21.4%
 Overall                    483            0          483                90              18.6%

             SUBJECT CAPTURE RATES - AS NOVOCO RECOMMENDED
 Unit Type                 Total Demand      Supply   Net Demand     Units Proposed    Capture Rate
 2BR at 50% AMI                 727            0          727              18              2.5%
 3BR at 50% AMI                 556            0          556              18              3.2%
 2BR at 60% AMI                 244            0          244              24              9.8%
 3BR at 60% AMI                 187            0          187              30             16.0%
 Overall                        537            0          537              90             16.8%

                                      As the previous tables illustrate, demand for the Subject based
                                      on capture rates alone is considered adequate in both scenarios.

Projected Absorption
Period:                               The Subject is currently 93 percent occupied. The demand
                                      analysis illustrated that the Subject’s capture rates (as
                                      proposed) vary from 2.7 to 21.4 percent with an overall capture
Novogradac & Company LLP                                                                   4
                                                           Legacy Apartments I - Conway, SC – Market Study


                                      rate of 18.6 percent. We were able to obtain absorption
                                      information on three properties, two in Conway and one in
                                      Myrtle Beach. The following table illustrates their absorption
                                      information.

                                                            Number of  Absorption
   Year Opened       Name           Location       Type       Units       Period       Absorption Rate
      2007     Crabtree Commons Conway            LIHTC        48         10 days      > 48 units/month
      2008     Monticello Park III Myrtle Beach   LIHTC        56        5 months      10.4 units/month
      2009      Patriot's Hollow    Conway        Market       53     10 - 12 months    4-5 units/month

                                      The Subject will undergo renovations with tenants in place.
                                      Therefore, the property will not undergo a re-absorption period.
                                      However, if the property were to undergo a re-absorption
                                      period, we believe it would re-absorb at a quicker pace than at
                                      Patriot’s Hollow but slightly slower than Monticello Park III as
                                      Monticello Park III is located in Myrtle Beach, a slightly
                                      superior submarket. Therefore, we estimate that the Subject
                                      will re-absorb at a pace of nine units per month for a period of
                                      nine months.


Market Conclusions:                   Average vacancy in the market is moderate at approximately
                                      8.2 percent with LIHTC vacancy at 3.6 percent. The Subject’s
                                      biggest strengths are: condition post-renovation, location, and
                                      current tenant base, which will be retained post-renovation. In
                                      general, the Subject is expected to be competitive in the
                                      market. We do not believe, however, that the Subject’s rents at
                                      60 percent AMI are feasible as proposed.

                                      The local economy relies on heavily on the retail trade,
                                      construction, and tourism industries, which are particularly
                                      susceptible due to the current economic climate. At least two of
                                      Conway’s employers experienced layoffs in 2009: Goody’s
                                      Family Clothing and the Pepsi Bottling Company. In addition
                                      to these, several employers in the Myrtle Beach area have
                                      experienced layoffs, resulting in a job loss of 366 in 2009 and
                                      2010. These job losses combined with a significant number of
                                      market rate properties have particularly affected market rate
                                      vacancy, while overall LIHTC vacancy remains low at 3.6
                                      percent.

Recommendations:                      Due to concessions currently being offered at the Subject and
                                      the relatively low occupancy rate at the Subject and the
                                      Subject’s second phase, we recommend that the 60 percent
                                      AMI rents be reduced. As proposed, these rents will be
                                      significantly higher than current LIHTC rents in the market.
                                      These conclusions are summarized in the following table.
Novogradac & Company LLP                                                                      5
                                                Legacy Apartments I - Conway, SC – Market Study




                               Achievable LIHTC Rents

                                Type           Achievable Rent
                           2BR at 50% AMI           $480
                           2BR at 60% AMI           $550
                           3BR at 50% AMI           $560
                           3BR at 60% AMI           $625



Long Term Impact on Existing
LIHTC Properties in PMA:       Capture rates for the Subject are considered adequate for all
                               units and LIHTC vacancy in the market is low at 3.6 percent.
                               The Subject is existing and is 93 percent occupied.
                               Renovations will occur with tenants in place. Further, market
                               rents are higher than the maximum allowable rents and
                               therefore are not providing additional competition to existing
                               affordable units in the market. Overall, we believe that the
                               Subject will not have a negative effect on other affordable units
                               in the market post-renovation.




Novogradac & Company LLP                                                            6
       S-2 RENT CALCULATION WORKSHEET



Legacy I - As Proposed

                          Proposed         Gross                       Gross
             Bedroom      Tax Credit    Potential TC    Adjusted      Potential     Tax Credit Gross
 # Units      Type       Tenant Rent    Tenant Rent    Market Rent   Market Rent    Rent Advantage
   18          2 BR         $480          $8,640          $692        $12,456           30.64%
   24          2 BR         $595          $14,280         $692        $16,608           14.02%
   18          3 BR         $560          $10,080         $875        $15,750           36.00%
   30          3 BR         $650          $19,500         $875        $26,250           25.71%
   90                                     $52,500                     $71,064           26.12%




Threshold Criteria Summary:

1. Does the development have a minimum 10% market rate advantage? __X__yes ____ no

2. Family development- Is the absorption/lease-up period 12 months or less? __X__ yes ____no ____ n/a

3. Older/ Elderly development- Is the absorption/lease-up period 16 months or less? ____yes ____no __X__n/a

4. Is the overall capture rate 40% or more? ____yes __X__no

5. Is the overall LIHTC unit vacancy rate, in the market area, 10% or greater? ____yes __X__no
12-14-09

            2010 EXHIBIT S – 2 SCSHFDA PRIMARY MARKET AREA ANALYSIS SUMMARY: (APPENDIX C)
  Development Name:             Legacy Apartments I – As Proposed                                                      Total # Units: 90
  Location:                     1001 Singleton Ridge Road                                                            # LIHTC Units: 90
  PMA Boundary:                 Highway 22 (North); Horry County line (West); Borders of census tracts 0604.02 and 0604.01
  (Southeast); US-19 (Northeast); Gilbert Rd/Browns Chapel Ave (North)                Farthest Boundary Distance to Subject:              16.0 miles

                                               RENTAL HOUSING STOCK (found on page __)
Type                                              # Properties           Total Units              Vacant Units               Average
                                                                                                                            Occupancy*
All Rental Housing                                       7                   1,065                      87                      91.8%
Market-Rate Housing1                                     5                    897                       81                      91.0%
Assisted/Subsidized Housing not to                       -                     -                         -                         -
include LIHTC
LIHTC (All that are stabilized)**                        3                      168                     6                           96.4%
Stabilized Comps***                                      7                   1,065                      87                          91.8%
Non-stabilized Comps                                     -                     -                         -                            -
* Average Occupancy percentages will be determined by using the second and fourth quarter rates reported for 2009.
** Stabilized occupancy of at least 93%.
*** Comps are those comparable to the subject and those that compete at nearly the same rent levels and tenant profile, such as age, family and income.
1
  Includes market rate units at LIHTC properties

                     Subject Development                                           Adjusted Market Rent                       Highest Unadjusted
                                                                                                                                  Comp Rent
   #             #                                        Proposed           Per Unit          Per SF         Advantage        Per Unit        Per SF
  Units      Bedrooms        Baths       Size (SF)       Tenant Rent
   18             2         2       1,080                   $480              $692             $0.64           44.1%             $815          $0.71
   18             3         2       1,322                   $560              $875             $0.66           56.3%             $915          $0.70
   24             2         2       1,080                   $595              $692             $0.64           16.3%             $815          $0.71
   30             3         2       1,322                   $650              $875             $0.66           34.6%             $915          $0.70
           ****Gross Potential Rent Monthly                $52,500           $71,064                           26.12%
****Gross Potential Rent Monthly is calculated by multiplying the number of units for each bedroom type by the proposed tenant rent by bedroom. Sum of
those is the Gross Potential Rent.

                                            DEMOGRAPHIC DATA (found on pages 28 and 41)
                                                               2000                                2009                               2014
Renter Households                        4,021                        24.8%               5,478              25.8%          6,364             25.9%
Income-Qualified Renter HHs (LIHTC)       957                         23.8%               1,303              23.8%          1,515             23.8%
Income-Qualified Renter HHs (MR)    (if applicable)                     -                   -                  -              -                 -

                TARGETED INCOME-QUALIFIED RENTER HOUSEHOLD DEMAND (found on pages 36,39, 42)
                                                            Market-
             Type of Demand             50%        60%                Other:__    Other:__                                                   Overall
                                                             rate
Renter Household Growth                                  912              253                                                                   375
Existing Households (Overburd + Substand)                966              268                                                                   397
Homeowner conversion (Seniors)
Other:
Less Comparable/Competitive Supply                         0                0                                                                    0
Net Income-qualified Renter HHs                         1,877             520                                                                   772
                                               CAPTURE RATES (found on pages 36, 39, 42)
                                                                          Market-
            Targeted Population                      50%         60%                   Other:__                            Other:__          Overall
                                                                            rate
 Capture Rate                                       3.1%        16.6%                                                                         18.6%
                               ABSORPTION RATE (found on page 4 and 52)
 Absorption Rate ___9____months
       S-2 RENT CALCULATION WORKSHEET



Legacy I - As NOVOCO Recommended

                          Proposed         Gross                       Gross
             Bedroom      Tax Credit    Potential TC    Adjusted      Potential     Tax Credit Gross
 # Units      Type       Tenant Rent    Tenant Rent    Market Rent   Market Rent    Rent Advantage
   18          2 BR         $480          $8,640          $692        $12,456           30.64%
   24          2 BR         $550          $13,200         $692        $16,608           20.52%
   18          3 BR         $560          $10,080         $875        $15,750           36.00%
   30          3 BR         $625          $18,750         $875        $26,250           28.57%
   90                                     $50,670                     $71,064           28.70%




Threshold Criteria Summary:

1. Does the development have a minimum 10% market rate advantage? __X__yes ____ no

2. Family development- Is the absorption/lease-up period 12 months or less? __X__yes ____no ____ n/a

3. Older/ Elderly development- Is the absorption/lease-up period 16 months or less? ____yes ____no __X__n/a

4. Is the overall capture rate 40% or more? ____yes __X__no

5. Is the overall LIHTC unit vacancy rate, in the market area, 10% or greater? ____yes __X__no
12-14-09

            2010 EXHIBIT S – 2 SCSHFDA PRIMARY MARKET AREA ANALYSIS SUMMARY: (APPENDIX C)
  Development Name:             Legacy Apartments I – As NOVOCO Recommended                                            Total # Units: 90
  Location:                     1001 Singleton Ridge Road                                                            # LIHTC Units: 90
  PMA Boundary:                 Highway 22 (North); Horry County line (West); Borders of census tracts 0604.02 and 0604.01
  (Southeast); US-19 (Northeast); Gilbert Rd/Browns Chapel Ave (North)                Farthest Boundary Distance to Subject:              16.0 miles

                                                RENTAL HOUSING STOCK (found on page 2)
Type                                              # Properties           Total Units              Vacant Units               Average
                                                                                                                            Occupancy*
All Rental Housing                                       7                   1,065                      87                      91.8%
Market-Rate Housing1                                     5                    897                       81                      91.0%
Assisted/Subsidized Housing not to                       -                     -                         -                         -
include LIHTC
LIHTC (All that are stabilized)**                        3                      168                     6                           96.4%
Stabilized Comps***                                      7                   1,065                      87                          91.8%
Non-stabilized Comps                                     -                     -                         -                            -
* Average Occupancy percentages will be determined by using the second and fourth quarter rates reported for 2009.
** Stabilized occupancy of at least 93%.
*** Comps are those comparable to the subject and those that compete at nearly the same rent levels and tenant profile, such as age, family and income.
1
  Includes market rate units at LIHTC properties

                     Subject Development                                           Adjusted Market Rent                       Highest Unadjusted
                                                                                                                                  Comp Rent
   #             #                                        Proposed           Per Unit          Per SF         Advantage        Per Unit        Per SF
  Units      Bedrooms        Baths       Size (SF)       Tenant Rent
   18             2         2       1,080                   $480              $692             $0.64           30.64%            $815          $0.71
   18             3         2       1,322                   $560              $875             $0.66           36.00%            $915          $0.70
   24             2         2       1,080                   $550              $692             $0.64           20.52%            $815          $0.71
   30             3         2       1,322                   $625              $875             $0.66           28.57%            $915          $0.70
           ****Gross Potential Rent Monthly                $50,670           $71,064                           28.70%
****Gross Potential Rent Monthly is calculated by multiplying the number of units for each bedroom type by the proposed tenant rent by bedroom. Sum of
those is the Gross Potential Rent.

                                            DEMOGRAPHIC DATA (found on pages 33 and 50)
                                                               2000                                2009                               2014
Renter Households                        4,021                        24.8%               5,478              25.8%          6,364             25.9%
Income-Qualified Renter HHs (LIHTC)       937                         23.3%               1,276              23.3%          1,483             23.3%
Income-Qualified Renter HHs (MR)    (if applicable)                     -                   -                  -              -                 -

                 TARGETED INCOME-QUALIFIED RENTER HOUSEHOLD DEMAND (found on pages 38-56)
                                                           Market-
             Type of Demand            50%         60%                Other:__   Other:__                                                    Overall
                                                             rate
Renter Household Growth                                 1,074             361                                                                   450
Existing Households (Overburd + Substand)                988              332                                                                   413
Homeowner conversion (Seniors)
Other:
Less Comparable/Competitive Supply                         0                0                                                                    0
Net Income-qualified Renter HHs                         2,062             693                                                                   863
                                                  CAPTURE RATES (found on pages 38-56)
                                                                            Market-
            Targeted Population                       50%         60%                  Other:__                            Other:__          Overall
                                                                             rate
 Capture Rate                                         2.8%      12.5%                                                                         16.8%
                              ABSORPTION RATE (found on pages 4 and 52)
 Absorption Rate ___9____months
A. PROJECT DESCRIPTION
                                                Legacy Apartments I - Conway, SC – Market Study


                             PROPERTY DESCRIPTION
Development Location:         The Subject is an existing property located at 1001 Singleton
                              Ridge Road in Conway, Horry County, South Carolina.

Construction Type:            The Subject is the proposed renovation of the first phase of an
                              existing property that consists of two phases. The buildings are
                              three-story, walk-up, garden style buildings that consist of
                              vinyl siding and brick veneer.

Occupancy Type:               Family.
Target Income Group:          The Subject currently targets households earning 50 to 60
                              percent of AMI or less. Post renovation, the Subject will be
                              restricted to general households earning 50 to 60 percent of
                              AMI or less. The Subject will target tenants earning from
                              $19,920 (minimum income for a two-bedroom unit at 50
                              percent AMI) to $32,700 (average of a four and five-person
                              household in a three-bedroom unit at 60 percent AMI).

Special Population Target:    According to data provided in the SCSHFDA application, 48
                              units will be three-bedroom units that will target large families.

Number of Units by
Unit Type:                    See Subject Profile.

Number of Buildings
And Stories:                  The Subject consists of seven residential, three-story, garden-
                              style, walk-up residential buildings and one 2,132 square foot
                              community building.

Unit Size:                    See Subject Profile.

Structure Type/Design:        The Subject consists of seven residential, three-story walk-up,
                              garden style buidings that consist of vinyl siding and brick
                              veneer.

Proposed Rents and
  Utility Allowance:          The following table details the Subject’s proposed rents and
                              utility allowances. The utility description is located in the
                              property profile.




Novogradac & Company LLP                                                            7
                                                                         Legacy Apartments – Conway, SC – Market Study




                                                     PROPOSED RENTS
                                                                                          LIHTC
                                                             Utility                     Maximum      HUD Fair
                                     Number of             Allowance           Gross     Allowable     Market
               Unit Type               Units   Asking Rent     (1)             Rent      Gross Rent    Rents
                                                       50% AMI
                  2BR                   18        $480        $101              $581        $590        $786
                  3BR                   18        $560        $120              $680        $681        $939
                                                       60% AMI
                  2BR                   24        $595        $101              $696        $708        $786
                  3BR                   30        $650        $120              $770        $817        $939
                  Total                 90
      Notes (1) Source of Utility Allowance provided by the Developer.


Existing or Proposed
Project Based Rental Assistance: The Subject is existing and will not receive project-based rental
                                 assistance in addition to low-income housing tax credits.

                                                      CURRENT RENTS
                                                                                          LIHTC
                                                             Utility                     Maximum      HUD Fair
                                     Number of             Allowance           Gross     Allowable     Market
               Unit Type               Units   Asking Rent     (1)             Rent      Gross Rent    Rents
                                                       50% AMI
                  2BR                   9         $479        $101              $580        $590        $786
                  3BR                   9         $500        $120              $620        $681        $939
                                                       60% AMI
                  2BR                   33        $525        $101              $626        $708        $786
                  3BR                   39        $525        $120              $645        $817        $939
                  Total                 90
      Notes (1) Source of Utility Allowance provided by the Developer.

                                                  There are currently concessions for the two-bedroom units at
                                                  60 percent AMI and the three-bedroom units. The Subject’s
                                                  proposed rents at 50 percent AMI will be zero to 12 percent
                                                  greater than current concessed rents and the Subject’s 60
                                                  percent AMI units will be 13 to 24 percent greater than the
                                                  Subject’s current concessed rents.
Community Amenities:                              See Subject Profile.

Unit Amenities:                                   See Subject Profile.

Scope of Renovation:                              The Subject was allocated in 1996 and placed in service in
                                                  1998. The developer did not provide an estimated renovation
                                                  cost. The proposed scope of renovations will include, but will
                                                  not be limited to:
Novogradac & Company LLP                                                                                  8
                                              Legacy Apartments – Conway, SC – Market Study




                           •      Replacing the HVAC systems
                           •      Installing Energy Star rated dishwashers
                           •      Installing new siding
                           •      Installing new roofs
                           •      Installing new floor coverings and appliances

                           Legacy I and II currently operates as one property and is
                           currently 92 percent occupied and in good condition. Legacy I
                           consists of 90 units (all restricted to 50 or 60 percent of AMI or
                           less) and is currently 93 percent occupied.




Novogradac & Company LLP                                                         9
                                                                           Legacy Apartments – Conway, SC – Market Study


Subject Profile

                                              Legacy Apartments I (As Renovated)
Comp #             Subject
Effective Rent     4/2/2010
Date

Location                           1001 Singleton Ridge Rd;
                                   204 Legacy Way
                                   Conway, SC 29526
                                   Horry County
Distance                           n/a
Units                              90
Vacant Units                       N/A
Vacancy Rate                       N/A
Type                               Garden
                                   (3 stories)
Year Built / Renovated             1998 / 2012
Contact Name                       Property Manager
Phone                              (843) 374-2185

                                                      Unit Mix (face rent)
 Beds      Baths          Type      Units     Size     Rent     Concession      Restriction Waiting Vacant Vacancy    Max
                                              (SF)               (monthly)                   List           Rate     rent?
   2           2       Garden         18      1,080    $480         $0            @50%       n/a     N/A    N/A       N/A
                     (3 stories)
   2           2       Garden         24      1,080     $595          $0          @60%       n/a    N/A     N/A      N/A
                     (3 stories)
   3           2       Garden         18      1,322     $560          $0          @50%       n/a    N/A     N/A      N/A
                     (3 stories)
   3           2       Garden         30      1,322     $650          $0          @60%       n/a    N/A     N/A      N/A
                     (3 stories)

                                                              Amenities
In-Unit            Balcony/Patio                                 Security                  none
                   Blinds
                   Carpeting
                   Central A/C
                   Dishwasher
                   Ceiling Fan
                   Garbage Disposal
                   Microwave
                   Oven
                   Refrigerator
                   Washer/Dryer hookup

Property           Clubhouse/Meeting                             Premium                   none
                   Room/Community Room
                   Central Laundry
                   Off-Street Parking
                   On-Site Management

Services           none                                          Other                     none



Conclusion:                                    The Subject will be an excellent -quality brick and vinyl siding
                                               three-story walk-up, garden style apartment complex,
Novogradac & Company LLP                                                                                      10
                                             Legacy Apartments – Conway, SC – Market Study


                           comparable to most of the inventory in the area. As renovated,
                           the Subject will not suffer from deferred maintenance,
                           functional obsolescence, or physical obsolescence.




Novogradac & Company LLP                                                      11
B. SITE DESCRIPTION
                                                        Legacy Apartments - Conway, SC – Market Study


The location of a multifamily property can have a substantial negative or positive impact upon the
performance, safety and appeal of the project. The site description discusses the physical features of
the site, as well as the layout, access issues, and traffic flow.
Date of Site Visit:                  March 25, 2010 by Kristina Garcia.

Physical Features of Site:           The Subject site is generally level and is improved with Legacy
                                     Apartments I and II.
Surrounding Land Uses:               The following map and pictures illustrate the surrounding land
                                     uses.




The Subject is located in a mixed-use neighborhood and is in close proximity to major
thoroughfares, medical facilities, mixed residential uses, and retail centers. Single-family homes and
condominiums in the neighborhood range from good to excellent condition and the Subject has good
overall visibility and traffic flow.




Novogradac & Company LLP                                                                  13
                                                          Legacy Apartments - Conway, SC – Market Study


Pictures of Site and Adjacent Uses




                       Subject                                       View of Subject Entrance




         View of Subject from Singleton Road                    View Southwest on Singleton Road




      View of Single-Family Home from Subject                 Medical offices on Singleton Ridge Road


Visibility/Views:                       The Subject has views of Legacy II and views to the north and
                                        southwest of single-family homes that consist of one- to two-
Novogradac & Company LLP                                                                        14
                                                  Legacy Apartments - Conway, SC – Market Study


                               stories and are in good condition. Views to the northeast are of
                               medical facilities along Singleton Ridge Road that are in good
                               condition. The Subject is located on Singleton Ridge Road,
                               which is a two-lane, well-trafficked thoroughfare due to its
                               proximity to the Conway Medical Center and its connection to
                               heavily trafficked roads such as Highways 544 and 501.
                               Overall, views and visibility are considered good.

Detrimental Influences:        No significant detrimental influences.

Proximity to Local Services:   The Subject is located in reasonable proximity to local services
                               including medical services and retail. The following table
                               details the Subject’s distance from key locational amenities. A
                               Locational Amenities Map, corresponding to the following
                               table is below.




Novogradac & Company LLP                                                           15
                                                      Legacy Apartments - Conway, SC – Market Study




                                 LOCATIONAL AMENITIES
                    Map Number     Service or Amenity      Miles From Subject
                         1        Waccamaw Elementary              3.8
                         2          Blackwater Middle              4.5
                         3      Early College High School          3.0
                         4            Food Lion Store              1.2
                         5               Rite Aid                  1.2
                         6            Kimbel Library               2.1
                         7          Employment Center              6.4
                         8     Parks and Recreation Conway         6.3
                         9           Conway Hospital               1.2
                        10         Public Transportation           1.2


Availability of Public
Transportation:                    There is a bus stop at the Conway Hospital, located 1.2 miles
                                   east of the Subject.

Road/Infrastructure
Proposed Improvements:             We witnessed no current road improvements within the
                                   Subject’s immediate neighborhood.


Novogradac & Company LLP                                                               16
                                                   Legacy Apartments - Conway, SC – Market Study


Crime Rates:                    Based upon site inspection, there appeared to be no crime
                                issues in the Subject’s neighborhood and property managers
                                did not report having issues with crime.

Access and Traffic Flow:        The Subject site is located on Singleton Road between
                                Highways 544 and 501. This area consists of various uses
                                including: a medical center, accessory medical offices, single-
                                family homes in good condition, and retail. Singleton Road is a
                                two-lane road that is moderately trafficked due to the hospital,
                                neighborhood retail, and its access to Highways 544 and 501.
                                Access and traffic flow are considered to be adequate for the
                                Subject.

Positive/Negative Attributes:   The Subject’s location provides the Subject with a marketing
                                advantage as the Subject is located within close proximity to
                                the Conway Medical Center, which is located 1.2 miles from
                                the Subject. Although a two-lane road, Singleton Road
                                experiences moderate traffic because it connects two major
                                neighborhood thoroughfares: Highway 544 and Highway 501
                                or Edward E. Burroughs Highway, which are lined with retail.
                                Further, the Subject has excellent visibility from Singleton
                                Road.

Conclusion:                     The Subject’s location is excellent. The Subject is located
                                within 1.2 miles from the Conway Medical Center, which
                                increases traffic along Singleton Road and the Subject’s
                                visibility. The Subject’s views are of single-family homes
                                ranging in condition from good to excellent and of medical
                                offices in good condition that are well-occupied. Further,
                                Singleton Road connects to major commercial corridors in the
                                neighborhood, Highways 544 and 501, which also experience
                                high traffic counts based upon site inspection. Overall, the
                                Subject’s location is excellent.




Novogradac & Company LLP                                                            17
C. MARKET AREA
                                                      Legacy Apartments - Conway, SC – Market Study


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.

The Primary Market Area has been approved by SCSHFDA on March 17, 2010.                        The
correspondence is in the addenda of the report.




The proposed Subject is a 90-unit family development to be renovated in Conway, South Carolina.
The PMA is defined as the greater Conway area. The boundaries are defined by Highway 22 to the
north, the Horry County line to the west, the borders of census tracts 0604.02 and 0604.01 to the
southeast, Highway 19 to the northeast, and Gilbert Road and Browns Chapel Avenue to the south.
Overall, the census tracts that are located in the PMA consist of a total of 25,708 households.



Novogradac & Company LLP                                                               19
                                                             Legacy Apartments -Conway, SC – Market Study




The PMA includes all or part of the following census tracts:

                                              Census Tract
                               450510601.00                  450510704.00
                               450510604.01                  450510705.00
                               450510604.02                  450510706.00
                               450510701.00                  450510707.00
                               450510702.00                  450510802.00
                               450510703.00                       -

Property managers at LIHTC properties in the market indicated that the majority of tenants come
from Horry County; and within Horry County, tenants primarily come from Conway and Myrtle
Beach. There are two phases of Legacy Apartments. The Subject is the proposed renovation of the
first phase. The property manager of both phases at Legacy Apartments reported that there is tenant
exchange between Conway and Myrtle Beach. However, we have not included Myrtle Beach in the
PMA as the area is located along the coast and is a tourist destination. While we believe the majority
of tenants will originate from within these boundaries, we do expect some leakage since several
property managers indicated that several tenants are from out of state.

The following map outlines the PMA and identifies the census tracts included within these
boundaries.




Novogradac & Company LLP                                                                     20
                                Legacy Apartments - Conway, SC – Market Study




Novogradac & Company LLP   21
>>> "Nicholson, Laura 6-9190" <Laura.Nicholson@schousing.com> 3/22/2010 11:39
AM >>>
I approved all PMAs last week so you may begin work on the study.


       Laura Nicholson
       Tax Credit Program Manager
       SC State Housing Finance & Development Authority
       300-C Outlet Pointe Blvd
       Columbia, SC 29210
       Ph: 803-896-9190
       Email: laura.nicholson@schousing.com
C. MARKET AREA ECONOMY
                                                       Legacy Apartments - Conway, SC – Market Study




                                 MARKET AREA ECONOMY
REGIONAL AND LOCAL ECONOMIC OVERVIEW

Horry County was named after Peter Horry (1743-1815), who was a Revolutionary War hero. It was
declared a county in 1801, with the county seat located in the city of Conway. Horry County
consists of 1,134 square miles. In 2008, Horry County was the fifth largest county in terms of
population with 257,380 persons. The county has ranked in the top ten of counties in South Carolina
with regards to number of jobs and annual job growth since 1980. In fact, Horry County has
maintained the highest percentage of annual job growth since 1980 among all counties of the state.
In addition, the city of Myrtle Beach is a popular vacation destination and has a large seasonal
employment base.

Map of Employment Centers
The following map illustrates the Subject’s location compared to major employment centers in the
county, including Conway and Myrtle Beach.




Novogradac & Company LLP                                                                24
                                                                          Legacy Apartments - Conway, SC – Market Study


Employment by Industry
The following table exhibits unemployment by industry for the PMA.

                                           2009 EMPLOYMENT BY INDUSTRY
                                                                PMA                                USA
               Industry                  Number Employed          Percent Employed   Number Employed Percent Employed
Retail Trade                                  3,778                     15.9%           15,556,730         11.4%
Construction                                  3,256                     13.7%            9,397,965          6.9%
Accommodation/Food Services                   2,510                     10.6%            9,074,374          6.6%
Educational Services                          2,189                      9.2%           13,964,919         10.2%
Health Care/Social Assistance                 2,121                      8.9%           18,626,199         13.6%
Manufacturing                                 1,592                      6.7%           13,133,247         9.6%
Public Administration                         1,131                      4.8%            6,937,191          5.1%
Finance/Insurance                              977                       4.1%            7,029,908          5.1%
Arts/Entertainment/Recreation                  966                       4.1%            2,645,225          1.9%
Other Services (excl Publ Adm)                 946                       4.0%            6,741,735          4.9%
Admin/Support/Waste Mgmt Srvcs                 707                       3.0%            4,835,591          3.5%
Prof/Scientific/Tech Services                  690                       2.9%            8,589,168         6.3%
Transportation/Warehousing                     652                       2.7%            5,642,080          4.1%
Real Estate/Rental/Leasing                     593                       2.5%            2,904,074         2.1%
Information                                    580                       2.4%            3,259,257          2.4%
Wholesale Trade                                496                       2.1%            4,427,582         3.2%
Utilities                                      330                       1.4%            1,123,532          0.8%
Agric/Forestry/Fishing/Hunting                 224                       0.9%            1,826,578          1.3%
Mining                                          27                       0.1%             683,158          0.5%
Mgmt of Companies/Enterprises                   19                       0.1%             203,879           0.1%
Total Employment                             23,784                    100.0%          136,602,392        100.0%
Source: ESRI Demographics 2009; Novogradac & Company LLP, March 2010


Employment within the PMA is concentrated in the retail trade, construction, and
accommodation/food services, which together account for 40.2 percent of the employment within the
PMA. The construction and retail sectors have been two of the hardest hit industries during the
current national recession. Areas with a large employment base in these sectors can expect to be
negatively impacted by a recession, such as the one the nation is currently suffering.




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                                                                        Legacy Apartments - Conway, SC – Market Study


Major Employers
The table below shows the largest employers in the area.

                                               MAJOR EMPLOYERS
                                             Horry County, SC
                          Employer                         Industry                      Number Employed
             Horry County Department of Education          Education                          4,400
                   Wal-Mart Associates, Inc.              Retail Trade                        2,100
                   Horry County Government                Government                          1,480
             Grand Strand Regional Medical Center          Healthcare                         1,280
                    Conway Medical Center                  Healthcare                         1,100
                       AVX Corporation                   Manufacturing                        1,100
                     City of Myrtle Beach                 Government                          1,076
                 Coastal Carolina University               Education                           984
                 Blue Cross Blue Shield                    Insurance                           825
              Burroughs and Chapin Company, Inc.    Real Estate Development                    700
          Source: Myrtle Beach Regional Economic Development Corporation, 3/2010.


According to the Myrtle Beach Regional Economic Development Corporation, the major employers
within the county are in the education, retail, government, and health care industries. The health
care industry tends to remain strong during a time of recession, while retail tends to be negatively
impacted by recession. As illustrated in the locational amenities, the Conway Hospital is located 1.2
miles from the Subject.

Expansions/Contractions
We spoke with Joe Ward of the South Carolina Commerce Workforce to obtain information
regarding expanding and contracting businesses within Horry County. The following table
illustrates the contractions to the county’s economy provided to us by Mr. Ward.

                         HORRY COUNTY LAYOFFS/CLOSURES 2009-2010
                                                                                                   Number of Jobs
             Company Name                   City                          Date    Closure/Layoff     Affected
         Goody's Family Clothing           Conway                       3/15/2009     closure           40
         Goody's Family Clothing        Myrtle Beach                    3/15/2009     closure           30
                Circuit City            Myrtle Beach                    3/31/2009     closure           40
              The Sun News              Myrtle Beach                     4/5/2009      layoff           58
            Atlantic SE Airlines        Myrtle Beach                    5/18/2009     closure           33
              The Sun News              Myrtle Beach                     5/2/2009      layoff           23
              Boater's World            Myrtle Beach                    6/30/2009     closure           16
              Boater's World            Murrells Inlet                  6/30/2009     closure           16
           KIA of Myrtle Beach          Myrtle Beach                    7/15/2009     closure           14
              Zales Jewelers            Myrtle Beach                    7/18/2009     closure            7
             Shadowline Sales           Myrtle Beach                     9/1/2009     closure            7
                AVX Corp.               Myrtle Beach                    10/1/2009      layoff           5
      Piggly Wiggly (Carolina Forest)   Myrtle Beach                    11/7/2009     closure           42
         Pepsi Bottling Company            Conway                        4/1/2010      layoff           35
                 TOTAL                                                                                 366
     Source: South Carolina Commerce Workforce, 3/2010.

As the table depicts, most of the layoffs and closures in Horry County occurred in Myrtle Beach.
There was one layoff in 2010 in Conway in the manufacturing industry. The closure of Goody’s was
Novogradac & Company LLP                                                                                   26
                                                                   Legacy Apartments - Conway, SC – Market Study


due to the nationwide closure of Goody’s Family Clothing. In Conway, a total of 75 jobs were
affected between 2009 and 2010 according to the South Carolina Commerce Workforce. Mr. Ward
could not report any new employers moving into the area. Mr. Ward reported that Horry County
was currently one of the better performing counties in South Carolina, but still suffering from the
nation-wide recession.

Employment and Unemployment Trends
The following table details employment and unemployment trends for Horry County from 1999 to
2010 (through January).

        EMPLOYMENT & UNEMPLOYMENT TRENDS (NOT SEASONALLY ADJUSTED)
                                       Myrtle Beach-North Myrtle Beach-Conway, SC MSA               USA
       Year                  Total Employment      % Change Unemployment Rate       Change    Unemployment Rate
       1999                       100,234               -              3.6%              -          4.2%
       2000                       102,698            2.5%              3.5%           -0.1%         4.0%
       2001                        97,400            -5.2%             4.9%           1.4%          4.7%
       2002                       100,043            2.7%              5.2%           0.3%          5.8%
       2003                       105,203            5.2%              5.7%           0.5%          6.0%
       2004                       109,090            3.7%              5.9%           0.2%          5.5%
       2005                       114,297            4.8%              5.8%           -0.1%         5.1%
       2006                       121,150            6.0%              5.4%           -0.4%         4.6%
       2007                       123,373            1.8%              5.0%           -0.4%         4.6%
       2008                       122,061            -1.1%             7.2%           2.2%          5.8%
       2009                       115,244            -5.6%            12.2%           5.0%          9.3%
2010 YTD Average*                 106,335            -7.7%            16.5%           4.3%         10.6%
     Jan-2009                     108,103               -             14.3%              -          8.5%
     Jan-2010                     106,335            -1.6%            16.5%           2.2%         10.6%
Source: U.S. Bureau of Labor Statistics
*2010 data is through Jan


Horry County experienced total employment declines in 2009 and year to date 2010, which were
greater than the nation’s total employment decrease of 2.6 percent. In 2009, the total employment in
the MSA decreased 5.6 percent, and decreased another 7.7 percent based on the year to date average
in 2010. According the Bureau of Labor and Statistics, the nation’s total employment decreased 2.5
percent in 2009, from 140,436,000 in January 2009 to 136,809,000 in January 2010. Between
January 2009 and January 2010, total employment in the MSA decreased 1.6 percent, compared to
the nation’s decrease of 2.6 percent for the same period. Additionally, although unemployment has
historically fluctuated in comparison to the national levels, the 2009 and 2010 figures indicate a
sizeable increase in the local unemployment rate. The unemployment rate increased 2.2 percentage
points between January 2009 and January 2010, and ended with an unemployment rate of 16.5
percent, almost six percentage points above the nation. This deep negative impact is most likely due
to the area’s dependency on construction and retail employment.

Myrtle Beach relies heavily on its tourism for retail trade and accommodation and food services
industries. The following table illustrates the most recent information available regarding the tourist
population in Myrtle Beach. As illustrated, the number of tourists decreased by 500,000 from 2007
to 2008. According to Mr. Scotch with the Myrtle Beach Chamber of Commerce, the tourist count
for 2009 are expected to be equal to or slightly higher than 2008. Mr. Scotch expects this positive
trend to continue through 2010.


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                                                                  Legacy Apartments - Conway, SC – Market Study


                                TOURIST POPULATION ESTIMATES
                                Year                                 Number of Tourists
                                2000                                    13.8 million
                                2001                                    11.9 million
                                2002                                    12.7 million
                                2003                                    12.8 million
                                2004                                    13.2 million
                                2005                                    13.8 million
                                2006                                    14.6 million
                                2007                                    15.2 million
                                2008                                    14.7 million
              Source: Myrtle Beach Area Chamber of Commerce, most recent information as of 3/2010.


Housing and Economy
Overall, it appears as if the city of Conway and Horry County have been significantly impacted by
the national recession. The unemployment rate in the county has increased from 7.2 percent in 2008
to 16.5 percent 2010’s year to date average, more than doubling in two years.

According to RealtyTrac’s February 2010 count, one in every 784 houses in Conway, South
Carolina has been foreclosed. The median home value in Conway is $127,537 according to
RealtyTrac, slightly under the $146,046 median home value of Horry County. Conway has the
second largest foreclosure rate in Horry County, right behind Myrtle Beach, South Carolina. Horry
has the fifth greatest foreclosure rate in the state of South Carolina, behind Greenville, Charleston,
Richland, and Beaufort.

It appears that the majority of LIHTC properties in Horry County have been unaffected by the
recession. Management at the market rate properties reported that they have been negatively
impacted by the current downturn in the local economy. Numerous tenants have lost their jobs or
been forced to move-in with family members. Therefore, Conway has clearly been negatively
impacted by the effects of the recession.




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                                                                  Legacy Apartments - Conway, SC – Market Study


Commuting Patterns
The following table details travel time to work for residents within the PMA as of 2000. The
average travel time is 27.9 minutes, which limits residents to travel in Horry County. It should be
noted that approximately 50 percent of workers have a commute time of less than 25 minutes.

                                  2000 TRAVEL TIME TO WORK
                                  Travel Time               Number of Households
                             Average Travel Time                   27.9
                              Travel Time <5 min                    384
                              Travel Time 5-9 min                  1214
                             Travel Time 10-14 min                 2129
                             Travel Time 15-19 min                 2282
                             Travel Time 20-24 min                 2316
                             Travel Time 25-29 min                  886
                             Travel Time 30-34 min                 3087
                             Travel Time 35-39 min                  475
                             Travel Time 40-44 min                  626
                             Travel Time 45-59 min                 2065
                             Travel Time 60-89 min                  770
                              Travel Time 90+ min                   388
                            Source: EBIS, Novogradac & Co, LLP, 03/2010.


Conclusions
In general, the economy in the Conway area has been weakened by the current national recession.
Total employment decreased throughout 2009 and continues to decrease through January 2010.
Additionally, the unemployment rate in the MSA has increased dramatically from 2009 to 2010, and
is currently almost six percentage points higher than the nation. Several layoffs in Myrtle Beach,
particularly in the retail/tourism industries, have contributed to this increase. Many large employers
such as the construction and retail businesses help to provide an unstable workforce within the area.
With an unstable local economy, affordable housing developments like the Subject will become a
more attractive option.




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E. COMMUNITY DEMOGRAPHIC DATA
                                                                            Legacy Apartments – Conway, SC – Market Study


                                        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 Myrtle Beach-Conway-North Myrtle Beach, SC MSA 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 MSA.
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 2014.

                                                             POPULATION

                                                                       Myrtle Beach-North Myrtle
          Year                               PMA                        Beach-Conway, SC MSA                     USA
                                Number          Annual Change          Number      Annual Change    Number        Annual Change
          1990                   31,155                   -            144,053           -         248,709,873          -
          2000                   43,641                 4.0%           196,629         3.6%        281,421,906        1.3%
          2009                   54,320                 2.6%           264,423         3.7%        309,731,508        1.1%
     Prj Mrkt Entry
                                 58,353                 2.8%           287,304         3.2%        317,374,802        0.9%
      March 2012
          2014                   61,881                 2.8%           307,325         3.2%        324,062,684        0.9%
Source: ESRI Demographics 2009; Novogradac & Company LLP, March 2010



                                              POPULATION BY AGE IN 2009
                                                                 Myrtle Beach-North Myrtle
     Age Cohort                    PMA                            Beach-Conway, SC MSA                 USA
                            Number   Percentage                    Number      Percentage    Number      Percentage
          0-4                3,570      6.6%                       15,335         5.8%      21,181,266      6.8%
          5-9                3,496      6.4%                       14,773         5.6%      20,712,631      6.7%
         10-14               3,448      6.3%                       14,847         5.6%      20,573,534      6.6%
         15-19               4,196      7.7%                       15,697         5.9%      22,032,155      7.1%
         20-24               3,830      7.1%                       16,234         6.1%      21,435,060      6.9%
         25-29               3,598      6.6%                       17,792         6.7%      21,430,451      6.9%
         30-34               3,501      6.4%                       16,847         6.4%      19,638,502      6.3%
         35-39               3,535      6.5%                       17,354         6.6%      20,871,431      6.7%
         40-44               3,722      6.9%                       18,043         6.8%      21,613,152      7.0%
         45-49               4,152      7.6%                       19,557         7.4%      23,379,099      7.5%
         50-54               3,836      7.1%                       18,891         7.1%      21,971,669      7.1%
         55-59               3,391      6.2%                       18,404         7.0%      19,430,413      6.3%
         60-64               2,889      5.3%                       17,174         6.5%      15,842,266      5.1%
         65-69               2,217      4.1%                       13,857         5.2%      11,565,200      3.7%
         70-74               1,828      3.4%                       10,969         4.1%      8,860,255       2.9%
         75-79               1,410      2.6%                        8,662         3.3%      7,378,104       2.4%
         80-84                950       1.7%                        5,850         2.2%      5,936,584       1.9%
          85+                 752       1.4%                        4,137         1.6%      5,879,736       1.9%
         Total              54,320     100.0%                      264,423      100.0%     309,731,508     100.0%
 Source: ESRI Demographics 2009; Novogradac & Company LLP, March 2010




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                                                                        Legacy Apartments – Conway, SC – Market Study


The population in the PMA and MSA are both increasing at a faster rate than the nation, but the
PMA slightly lags the MSA. There is a higher percentage of children ages 0 to 19 in the PMA than
the MSA, and more than 53 percent of the PMA’s population is under the age of 40, indicating a
presence of families with children. This bodes well for the Subject’s two and three-bedroom unit
mix. Between 2000 and 2009 the population of the PMA increased 2.6 percent, while it is projected
to increase 2.8 percent between 2009 and 2012, almost two percentage points greater than the nation
over the same period.

Household Trends

Total Number of Households, Average Household Size, and Group Quarters.

                                                    HOUSEHOLDS
                                                          Myrtle Beach-North Myrtle
        Year                    PMA                        Beach-Conway, SC MSA                 USA
                         Number  Annual Change              Number       Change       Number     Annual Change
        1990             11,306         -                   55,764           -      91,947,410          -
        2000             16,194      4.3%                    81,800        4.7%     105,480,101      1.5%
        2009             21,243      3.4%                   115,373        4.4%     116,523,156      1.1%
   Prj Mrkt Entry
                          23,043            3.2%            126,303           3.6%         119,502,512        1.0%
    March 2012
        2014              24,618            3.2%            135,866           3.6%         122,109,448        1.0%
 Source: ESRI Demographics 2009; Novogradac & Company LLP, March 2009


                                         AVERAGE HOUSEHOLD SIZE
                                               Myrtle Beach-North Myrtle
        Year                    PMA             Beach-Conway, SC MSA                                     USA
                         Number  Annual Change   Number       Change                            Number    Annual Change
        1990              2.69          -         2.52            -                              2.63            -
        2000              2.58       -0.4%        2.37         -0.6%                             2.59         -0.2%
        2009              2.47       -0.5%        2.27         -0.5%                             2.59         0.0%
   Prj Mrkt Entry
                           2.45             -0.2%             2.25            -0.3%              2.59         0.0%
    March 2012
        2014               2.44             -0.2%             2.24            -0.3%              2.59         0.0%
 Source: ESRI Demographics 2009; Novogradac & Company LLP, March 2010


                                    POPULATION IN GROUP QUARTERS
                             Year                   PMA                             MSA
                             2000           1,807             -             2,505
                             2009           1,798          3.31%            2,495              0.94%
                        Source: ESRI Demographics 2009; Novogradac & Company LLP, March 2010


The total number of households in the PMA and MSA has been increasing since 1990, and both are
expected to continue to increase through 2014. The percentage of household growth in both the
PMA and the MSA was substantially larger than the nation in 2009, and this trend is projected to
continue until 2014. The number of households has been increasing faster than the population,
leading to a decrease in the average household size between 2000 and 2009 in both the PMA and
MSA, while it remained constant at the national level. This trend is projected to continue over the
next five years. The number of persons living in group quarters is quite large for the PMA at 3.31
Novogradac & Company LLP                                                                                      32
                                                                                        Legacy Apartments – Conway, SC – Market Study


percent, and reflects the presence of Coastal Carolina University.                                              An increasing number of
households bodes well for the proposed Subject.

Households by Tenure
The table below depicts household growth by tenure from 1990 through 2014

                                                            TENURE PATTERNS PMA
                                      Owner-Occupied                     Percentage Owner-      Renter-Occupied            Percentage Renter-
          Year                            Units                              Occupied                Units                     Occupied
           1990                           8,401                               74.31%                 2,905                      25.69%
           2000                           12,173                              75.17%                 4,021                      24.83%
           2009                           15,765                              74.21%                 5,478                      25.79%
      Prj Mrkt Entry
       March 2012                             17,092                          74.18%                    5,951                    25.82%
           2014                               18,254                          74.15%                    6,364                    25.85%
Source: ESRI Demographics 2009; Novogradac & Company LLP, March 2010


As the table illustrates, households within the PMA reside in predominately owner occupied
residences. The number of renters is projected to remain stable over the next five years.

Household Income
The following table depicts household income in the MSA and PMA, and nation for years 2000,
2009, 2012, and 2014.

                                                     MEDIAN HOUSEHOLD INCOME
                                                                            Myrtle Beach-North Myrtle
           Year                           PMA                                Beach-Conway, SC MSA                           USA
                                  Amount   Annual Change                      Amount       Change                Amount      Annual Change
         2000                     $34,426         -                           $36,524          -                 $42,164            -
         2009                     $43,953      3.0%                           $46,996        3.1%                $54,719         3.2%
    Prj Mrkt Entry
     March 2012                   $45,475                   1.3%              $48,023           0.8%             $55,902            0.8%
         2014                     $46,806                   1.3%              $48,922           0.8%             $56,938            0.8%
 Source: ESRI Demographics 2009; Novogradac & Company LLP, March 2010


                                                                HOUSEHOLD INCOME PMA
                                                                               PMA
      Income Cohort                   2009                      Prj Mrkt Entry March 2012             2014             Annual Change 2009 to 2014
                                 Number    Percentage            Number       Percentage     Number       Percentage   Number      Percentage
         $0-9,999                 1,961       9.2%                2025           8.8%         2,081          8.5%        24            1.2%
      $10,000-19,999              2,598      12.2%                2633          11.4%         2,664         10.8%        13            0.5%
      $20,000-29,999              3,197      15.0%                3231          14.0%         3,260         13.2%        13            0.4%
      $30,000-39,999              2,853      13.4%                3017          13.1%         3,160         12.8%        61            2.2%
      $40,000-49,999              2,269      10.7%                2482          10.8%         2,669         10.8%        80            3.5%
      $50,000-59,999              1,905       9.0%                2058           8.9%         2,193          8.9%        58            3.0%
      $60,000-74,999              2,746      12.9%                2873          12.5%         2,985         12.1%        48            1.7%
      $75,000-99,999              1,978       9.3%                2461          10.7%         2,884         11.7%        181           9.2%
        $100,000+                 1,736       8.2%                2262           9.8%         2,722         11.1%        197          11.4%
           Total                 21,243     100.0%               23,043        100.0%        24,618        100.0%
Source: Ribbon Demographics 2007; Novogradac & Company LLP, March 2010



As the tables above depicts, the median household income of the PMA is expected to increase over
the next five years. The PMA is expected to grow more than the MSA and the nation. The largest
income cohort in the PMA in 2009 is the $20,000 to $29,999, and remains the largest income cohort
Novogradac & Company LLP                                                                                                            33
                                                                                     Legacy Apartments – Conway, SC – Market Study


for the next five years. The Subject will target tenants earning from $19,920 to $32,700. In 2009,
28.4 percent of the PMA population earned between $19,999 and $39,999. This high percentage of
low income residents bodes well for the Subject.

Renter Households by Number of Persons in the Household
The following table illustrates household size for all households in 2000, 2009, 2012, and 2014. To
determine the number of renter households by number of persons per household, the total number of
households is adjusted by the percentage of renter households. As stated, the majority of households
within the PMA are owner-occupied.

                                  RENTER HOUSEHOLDS BY NUMBER OF PERSONS - PMA
                                           2000                           2009            Prj Mrkt Entry March 2012            2014
                                 Number        Percentage       Number       Percentage    Number       Percentage    Number        Percentage
With 1 Person                      1,071          26.6%           1,543          28.2%      1,702        28.6%         1,841          28.9%
With 2 Persons                     1,104          27.5%           1,485          27.1%      1,600        26.9%         1,700          26.7%
With 3 Persons                      787           19.6%           1,014          18.5%      1,081        18.2%         1,140          17.9%
With 4 Persons                      533           13.3%            698           12.7%       754         12.7%          804           12.6%
With 5+ Persons                     525           13.1%            738           13.5%       814         13.7%          879           13.8%
Total Renter Households            4,021          100.0%          5,478          100.0%     5,951        100.0%        6,364          100.0%
Source: Ribbon Demographics 2007; Novogradac & Company LLP, March 2010



Conclusion
The Horry County population and number of households have been increasing since 1990 in both the
PMA and MSA, and are expected to continue to increase through 2014 in both areas. The majority
of the population in Horry County are living in owner-occupied residents; however, the number of
renters is expected to remain stable over the next five years. There is a higher percentage of persons
ages 0 to 19 in the PMA than the MSA, indicating the presence of families with children. This
bodes well for the Subject’s two and three bedroom unit mix.




Novogradac & Company LLP                                                                                                       34
F. PROJECT-SPECIFIC DEMAND ANALYSIS
                                                       Legacy Apartments – Conway, SC – Market Study




                         PROJECT SPECIFIC DEMAND ANALYSIS
The following demand analysis evaluates the potential amount of qualified households, which the
Subject would have a fair chance at capturing. The structure of the analysis is based on the
guidelines provided by SCSHFDA.
1. Income Restrictions
LIHTC rents are based upon a percentage of the Area Median Gross Income (AMI), adjusted for
household size and utilities. South Carolina State Housing and Finance Development Authority
(SCSHFDA) will estimate the relevant income levels, with annual updates. The rents are calculated
assuming that the maximum net rent a household will pay is 35 percent of its household income at
the appropriate AMI level.
According to SCSHFDA, household size is assumed to be 1.5 persons per bedroom for LIHTC rent
calculation purposes. For example, the maximum rent for a four-person household in a two-
bedroom unit is based on an assumed household size of three persons (1.5 per bedroom).
To assess the likely number of tenants in the market area eligible to live in the Subject, we use
Census information as provided by ESRI Business Information Solutions to estimate the number of
potential tenants who would qualify to occupy the Subject as a LIHTC project.
The maximum income levels are based upon information obtained from the Rent and Income Limits
Guidelines Table as accessed from the SCSHFDA website.

2. Affordability
As discussed above, the maximum income is set by SCSHFDA while the minimum is based upon
the minimum income needed to support affordability. This is based upon a standard of 35 percent.
Lower and moderate-income families typically spend greater that 30 percent of their income on
housing. These expenditure amounts can range higher than 50 percent depending upon market area.
However, the 30 to 40 percent range is generally considered a reasonable range of affordability.
SCSHFDA guidelines utilize 35 for families and 40 percent for senior households, which we will use
to set the minimum income levels for the demand analysis.
3. Demand
The demand for the Subject will be derived from two sources: existing households and new
households. These calculations are illustrated on the attached table.
3a. Demand from New Renter Households
The number of new households entering the market is the first level of demand calculated.
SCSHFDA has requested that we utilize 2009 as the base year for the analysis. This is considered the
gross potential demand for the Subject property. This number is adjusted for income eligibility and
renter tenure. In the following tables this calculation is identified as Step 1.

3b. Demand from Existing Households
Demand for existing households is estimated by summing three sources of potential tenants. (2a)
The first source is tenants who are rent overburdened. These are households who are paying over 35
percent of their income in housing costs. This number is estimated using census 2000 data. (2b)
The second source is households living in substandard housing. This number is estimated using
census 2000 data. (2c) The third source is those seniors likely to move from their own homes into
Novogradac & Company LLP                                                                36
                                                       Legacy Apartments – Conway, SC – Market Study


rental housing. Based on the advisory memo provided by the SCSHFDA we will use the following
factors to estimate demand, 5.0 percent for rural properties and 2.0 for urban properties.

Additions to Supply
According to SCSHFDA’s LIHTC allocations lists, there have been no LIHTC allocations in the
PMA since 2006.

4 and 5. Capture Rates
The above calculations and derived capture rates are illustrated in the following tables for both the
Subject as proposed and for the Subject with lowered rents at 60 percent AMI (as recommended).




Novogradac & Company LLP                                                                 37
                                                                                                    Legacy Apartments – Conway, SC – Market Study


                                                 Renter Household Income Distribution 2000 to Projected Market Entry March 2012
                                                                              Legacy Apartments
                                                                                     PMA

                                                                                                                              Prj Mrkt Entry
                                          2000                                         2009                                    March 2012                         Percent
                                #                     %                      #                      %                    #                     %                  Growth
$0-9,999                                 867                21.6%                   1,057                 19.3%                1,107                18.6%                    4.5%
$10,000-19,999                         1,050                26.1%                   1,213                 22.2%                1,245                20.9%                    2.6%
$20,000-29,999                           797                19.8%                   1,087                 19.8%                1,134                19.1%                    4.2%
$30,000-39,999                           549                13.6%                     805                 14.7%                  900                15.1%                   10.6%
$40,000-49,999                           268                 6.7%                     391                  7.1%                  441                 7.4%                   11.4%
$50,000-59,999                           187                 4.7%                     269                  4.9%                  302                 5.1%                   11.0%
$60,000-74,999                           134                 3.3%                     279                  5.1%                  309                 5.2%                    9.7%
$75,000-99,999                            92                 2.3%                     201                  3.7%                  266                 4.5%                   24.6%
$100,000+                                 78                 1.9%                     176                  3.2%                  245                 4.1%                   28.1%
Total                                  4,021               100.0%                   5,478                100.0%                5,951               100.0%                    7.9%
                                                      OK                                            OK

         Renter Household Income Distribution Projected Market Entry March 2012
                                 Legacy Apartments
                                                     PMA
                                                                       Change 2000 to
                                    Prj Mrkt Entry                 Prj Mrkt Entry March
                                      March 2012                            2012
                               #                      %                      #
$0-9,999                              1,107                 18.6%                     359
$10,000-19,999                        1,245                 20.9%                     404
$20,000-29,999                        1,134                 19.1%                     368
$30,000-39,999                          900                 15.1%                     292
$40,000-49,999                          441                  7.4%                     143
$50,000-59,999                          302                  5.1%                      98
$60,000-74,999                          309                  5.2%                     100
$75,000-99,999                          266                  4.5%                      86
$100,000+                               245                  4.1%                      79
Total                                 5,951                100.0%                   1,930

      Tenure Prj Mrkt Entry March 2012
Renter                                25.8%                   2736
Owner                                 74.2%                   3947
Total                                100.0%


        Renter Household Size for Prj Mrkt Entry March 2012                                                 Renter Household Size for 2000
Size                         Number                Percentage                               Size                      Number               Percentage
1                                       1,702                28.6%                          1                                   1,071                26.6%
2                                       1,600                26.9%                          2                                   1,104                27.5%
3                                       1,081                18.2%                          3                                     787                19.6%
4                                         754                12.7%                          4                                     533                13.3%
5+                                        814                13.7%                          5+                                    525                13.1%
Total                                   5,951               100.0%                          Total                               4,021               100.0%




Novogradac & Company LLP                                                                                                                                     38
                                                                                                                     Legacy Apartments – Conway, SC – Market Study


                                                                     Demand at 50% AMI (As Proposed)
Calculation of Potential Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                 50%
Minimum Income Limit                                                                                                $19,920
Maximum Income Limit                                                                                                $27,250
                                                                  New Renter
                                                             Households - Total
                                                                   Change in
                                                              Households PMA
                                                            2000 to Prj Mrkt Entry                                                                     Renter Households
                     Income Category                              March 2010                             Income Brackets    Percent within Cohort        within Bracket
                          $0-9,999                                    301                        19.1%                                       0.0%               0
                       $10,000-19,999                                 344                        21.8%               19,999                200.0%              688
                       $20,000-29,999                                 309                        19.6%                7,250                 72.5%              224
                       $30,000-39,999                                 233                        14.8%                                       0.0%               0
                       $40,000-49,999                                 114                         7.2%                                       0.0%               0
                       $50,000-59,999                                  78                         5.0%                                       0.0%               0
                       $60,000-74,999                                  81                         5.1%                                       0.0%               0
                       $75,000-99,999                                  61                         3.9%                                       0.0%               0
                         $100,000+                                     54                         3.5%                                       0.0%               0
                                                                     1,575                      100.0%                                                                  912
Percent of renter households within limits versus total number of renter households                                                                                 57.89%
Check                                                                                                                               Problem


Calculation of New Renter Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                 50%                                                         0%
Minimum Income Limit                                                                                                $19,920                                                                     $0
Maximum Income Limit                                                                                                $27,250                                                                     $0
                                                                 Total Renter
                                                            Households PMA Prj
                                                              Mrkt Entry March                                                                         Households within
                     Income Category                                 2010                                Income Brackets      Percent within Cohort        Bracket            Income Brackets
                          $0-9,999                                   1,070                       19.1%                    0                    0.0%                       0                     0
                       $10,000-19,999                                1,221                       21.8%               19,999                  200.0%                   2,443                     0
                       $20,000-29,999                                1,098                       19.6%                7,250                   72.5%                     796                     0
                       $30,000-39,999                                 829                        14.8%                    0                    0.0%                       0                     0
                       $40,000-49,999                                 404                         7.2%                    0                    0.0%                       0                     0
                       $50,000-59,999                                 277                         5.0%                    0                    0.0%                       0                     0
                       $60,000-74,999                                 286                         5.1%                    0                    0.0%                       0
                       $75,000-99,999                                 217                         3.9%                    0                    0.0%                       0
                         $100,000+                                    193                         3.5%                    0                    0.0%                       0
                                                                     5,596                      100.0%                                                                3,239
Percent of renter households within limits versus total number of renter households                                                                                 57.89%
Check                                                                                                                               Problem


Does the Project Benefit from Rent Subsidy? (Y/N)                    No
Type of Housing (Family vs Senior)                                 Family
Location of Subject (Rural versus Urban)                            Rural
Percent of Income for Housing                                                 35%
2000 Median Income                                                        $34,426
Prj Mrkt Entry March 2010 Median Income                                   $44,333
Change from 2000 to Prj Mrkt Entry March 2010                              $9,907
Total Percent Change                                                        28.8%
Average Annual Change                                                        4.8%
Inflation Rate                                                               4.8% Two year adjustment                                         1.0000
Maximum Allowable Income                                                   $27,250
Maximum Allowable Income Inflation Adjusted                                $27,250
Maximum Number of Occupants                                                      5
Rent Income Categories                                                        50%
Initial Gross Rent for Smallest Unit                                          $581
Initial Gross Rent for Smallest Unit Inflation Adjusted                    $581.00

                   Persons in Household                             0BR                   1BR                 2BR                     3BR                     4BR                  5BR                Total
                             1                                      0%                    90%                 10%                     0%                      0%                   0%                 100%
                             2                                      0%                    20%                 80%                     0%                      0%                   0%                 100%
                             3                                      0%                     0%                 60%                     40%                     0%                   0%                 100%
                             4                                      0%                     0%                 0%                      80%                     20%                  0%                 100%
                             5+                                     0%                     0%                 0%                      70%                     30%                  0%                 100%




Novogradac & Company LLP                                                                                                                                                                        39
                                                                Legacy Apartments – Conway, SC – Market Study


      STEP 1 Please refer to text for complete explanation.
      Demand from New Renter Households 2000 to Prj Mrkt Entry March 2010
      Income Target Population                                                             50%
      New Renter Households PMA                                                           1,575
      Percent Income Qualified                                                            57.9%
      New Renter Income Qualified Households                                                912

      STEP 2a. Please refer to text for complete explanation.
      Demand from Existing Households 2000
      Demand form Rent Overburdened Households
      Income Target Population                                                             50%
      Total Existing Demand                                                               5,596
      Income Qualified                                                                    57.9%
      Income Qualified Renter Households                                                  3,239
      Percent Rent Overburdened Prj Mrkt Entry March 2010                                 29.3%
      Rent Overburdened Households                                                         950

      STEP 2b. Please refer to text for complete explanation.
      Demand from Living in Substandard Housing
      Income Qualified Renter Households                                                  3,239
      Percent Living in Substandard Housing                                               0.5%
      Households Living in Substandard Housing                                              16

      STEP 2c. Please refer to text for complete explanation.
      Senior Households Converting from Homeownership
      Income Target Population                                                             50%
      Total Senior Homeowners                                                                0
      Rural Versus Urban                                                      5.0%
      Senior Demand Converting from Homeownership                                           0

      Total Demand
      Total Demand from Existing Households                                                966
      Total New Demand                                                                     912
      Total Demand (New Plus Existing Households)                                         1,877

      By Bedroom Demand
      One Person                                                              28.3%        531
      Two Persons                                                             27.0%        508
      Three Persons                                                           18.4%        346
      Four Persons                                                            12.7%        239
      Five Persons                                                            13.5%        254
      Total                                                                  100.0%       1,877




Novogradac & Company LLP                                                                          40
                                                              Legacy Apartments – Conway, SC – Market Study


      To place Person Demand into Bedroom Type Units
      Of one-person households in 1BR units                                  90%         478
      Of two-person households in 1BR units                                  20%         102
      Of three-person households in 1BR units                                 0%           0
      Of four-person households in 1BR units                                  0%           0
      Of five-person households in 1BR units                                  0%           0
      Of one-person households in 2BR units                                  10%          53
      Of two-person households in 2BR units                                  80%         406
      Of three-person households in 2BR units                                60%         208
      Of four-person households in 2BR units                                  0%           0
      Of five-person households in 2BR units                                  0%           0
      Of one-person households in 3BR units                                   0%           0
      Of two-person households in 3BR units                                   0%           0
      Of three-person households in 3BR units                                40%         138
      Of four-person households in 3BR units                                 80%         191
      Of five-person households in 3BR units                                 70%         178
      Of one-person households in 4BR units                                   0%           0
      Of two-person households in 4BR units                                   0%           0
      Of three-person households in 4BR units                                 0%           0
      Of four-person households in 4BR units                                 20%          48
      Of five-person households in 4BR units                                 30%          76
      Total Demand                                                                      1,877
      Check                                                                              OK

      Total Demand by Bedroom                                                           50%
      2 BR                                                                               667
      3 BR                                                                               507
      Total Demand                                                                      1,174

      Additions To Supply 2000 to Prj Mrkt Entry March 2010                              50%
      2 BR                                                                                 0
      3 BR                                                                                 0
      Total                                                                                0

      Net Demand                                                                        50%
      2 BR                                                                               667
      3 BR                                                                               507
      Total                                                                             1,174


      Developer's Unit Mix                                                               50%
      2 BR                                                                                18
      3 BR                                                                                18
      Total                                                                               36

      Capture Rate Analysis                                                              50%
      2 BR                                                                               2.7%
      3 BR                                                                               3.5%
      Total                                                                              3.1%



Novogradac & Company LLP                                                                        41
                                                                                                                          Legacy Apartments – Conway, SC – Market Study


                                                                        Demand at 60% AMI (As Proposed)
Calculation of Potential Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                       60%
Minimum Income Limit                                                                                                      $23,863
Maximum Income Limit                                                                                                      $32,700
                                                                      New Renter
                                                                   Households - Total
                                                                       Change in
                                                                   Households PMA
                                                                 2000 to Prj Mrkt Entry                                                                     Renter Households
                       Income Category                                March 2010                               Income Brackets    Percent within Cohort       within Bracket
                            $0-9,999                                       301                         19.1%                                       0.0%               0
                         $10,000-19,999                                    344                         21.8%                                       0.0%               0
                         $20,000-29,999                                    309                         19.6%                6,136                 61.4%             190
                         $30,000-39,999                                    233                         14.8%                2,700                 27.0%              63
                         $40,000-49,999                                    114                          7.2%                                       0.0%               0
                         $50,000-59,999                                     78                          5.0%                                       0.0%               0
                         $60,000-74,999                                     81                          5.1%                                       0.0%               0
                         $75,000-99,999                                     61                          3.9%                                       0.0%               0
                           $100,000+                                        54                          3.5%                                       0.0%               0
                                                                          1,575                       100.0%                                                                 253
Percent of renter households within limits versus total number of renter households                                                                                      16.04%
Check                                                                                                                                       OK


Calculation of New Renter Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                       60%                                                        0%
Minimum Income Limit                                                                                                      $23,863                                                                    $0
Maximum Income Limit                                                                                                      $32,700                                                                    $0
                                                                      Total Renter
                                                                 Households PMA Prj
                                                                   Mrkt Entry March                                                                         Households within
                       Income Category                                    2010                                 Income Brackets      Percent within Cohort       Bracket            Income Brackets
                            $0-9,999                                      1,070                        19.1%                    0                    0.0%                      0                     0
                         $10,000-19,999                                   1,221                        21.8%                    0                    0.0%                      0                     0
                         $20,000-29,999                                   1,098                        19.6%                6,136                   61.4%                    674                     0
                         $30,000-39,999                                    829                         14.8%                2,700                   27.0%                    224                     0
                         $40,000-49,999                                    404                          7.2%                    0                    0.0%                      0                     0
                         $50,000-59,999                                    277                          5.0%                    0                    0.0%                      0                     0
                         $60,000-74,999                                    286                          5.1%                    0                    0.0%                      0
                         $75,000-99,999                                    217                          3.9%                    0                    0.0%                      0
                           $100,000+                                       193                          3.5%                    0                    0.0%                      0
                                                                          5,596                       100.0%                                                                 898
Percent of renter households within limits versus total number of renter households                                                                                      16.04%
Check                                                                                                                                       OK


Does the Project Benefit from Rent Subsidy? (Y/N)                         No
Type of Housing (Family vs Senior)                                      Family
Location of Subject (Rural versus Urban)                                 Rural
Percent of Income for Housing                                                       35%
2000 Median Income                                                              $34,426
Prj Mrkt Entry March 2010 Median Income                                         $44,333
Change from 2000 to Prj Mrkt Entry March 2010                                    $9,907
Total Percent Change                                                              28.8%
Average Annual Change                                                              4.8%
Inflation Rate                                                                     4.8% Two year adjustment                                        1.0000
Maximum Allowable Income                                                         $32,700
Maximum Allowable Income Inflation Adjusted                                      $32,700
Maximum Number of Occupants                                                            5
Rent Income Categories                                                              60%
Initial Gross Rent for Smallest Unit                                                $696
Initial Gross Rent for Smallest Unit Inflation Adjusted                          $696.00

                     Persons in Household                                 0BR                   1BR                 2BR                     3BR                    4BR                  5BR                Total
                               1                                          0%                    90%                 10%                      0%                     0%                  0%                 100%
                               2                                          0%                    20%                 80%                      0%                     0%                  0%                 100%
                               3                                          0%                     0%                 60%                     40%                    0%                   0%                 100%
                               4                                          0%                     0%                  0%                     80%                    20%                  0%                 100%
                               5+                                         0%                     0%                  0%                     70%                    30%                  0%                 100%




Novogradac & Company LLP                                                                                                                                                                             42
                                                              Legacy Apartments – Conway, SC – Market Study


    STEP 1 Please refer to text for complete explanation.
    Demand from New Renter Households 2000 to Prj Mrkt Entry March 2010
    Income Target Population                                                               60%
    New Renter Households PMA                                                             1,575
    Percent Income Qualified                                                              16.0%
    New Renter Income Qualified Households                                                  253

    STEP 2a. Please refer to text for complete explanation.
    Demand from Existing Households 2000
    Demand form Rent Overburdened Households
    Income Target Population                                                               60%
    Total Existing Demand                                                                 5,596
    Income Qualified                                                                      16.0%
    Income Qualified Renter Households                                                      898
    Percent Rent Overburdened Prj Mrkt Entry March 2010                                   29.3%
    Rent Overburdened Households                                                           263

    STEP 2b. Please refer to text for complete explanation.
    Demand from Living in Substandard Housing
    Income Qualified Renter Households                                                     898
    Percent Living in Substandard Housing                                                 0.5%
    Households Living in Substandard Housing                                                4

    STEP 2c. Please refer to text for complete explanation.
    Senior Households Converting from Homeownership
    Income Target Population                                                               60%
    Total Senior Homeowners                                                                  0
    Rural Versus Urban                                                        5.0%
    Senior Demand Converting from Homeownership                                             0

    Total Demand
    Total Demand from Existing Households                                                  268
    Total New Demand                                                                       253
    Total Demand (New Plus Existing Households)                                            520

    By Bedroom Demand
    One Person                                                               28.3%         147
    Two Persons                                                              27.0%         141
    Three Persons                                                            18.4%         96
    Four Persons                                                             12.7%         66
    Five Persons                                                             13.5%         70
    Total                                                                   100.0%         520




Novogradac & Company LLP                                                                          43
                                                            Legacy Apartments – Conway, SC – Market Study


    To place Person Demand into Bedroom Type Units
    Of one-person households in 1BR units                                    90%         132
    Of two-person households in 1BR units                                    20%         28
    Of three-person households in 1BR units                                   0%          0
    Of four-person households in 1BR units                                    0%          0
    Of five-person households in 1BR units                                    0%          0
    Of one-person households in 2BR units                                    10%         15
    Of two-person households in 2BR units                                    80%         113
    Of three-person households in 2BR units                                  60%         57
    Of four-person households in 2BR units                                    0%          0
    Of five-person households in 2BR units                                    0%          0
    Of one-person households in 3BR units                                     0%          0
    Of two-person households in 3BR units                                     0%          0
    Of three-person households in 3BR units                                  40%         38
    Of four-person households in 3BR units                                   80%         53
    Of five-person households in 3BR units                                   70%         49
    Of one-person households in 4BR units                                     0%          0
    Of two-person households in 4BR units                                     0%          0
    Of three-person households in 4BR units                                   0%          0
    Of four-person households in 4BR units                                   20%         13
    Of five-person households in 4BR units                                   30%         21
    Total Demand                                                                         520
    Check                                                                                OK

    Total Demand by Bedroom                                                              60%
    2 BR                                                                                  185
    3 BR                                                                                  140
    Total Demand                                                                          325

    Additions To Supply 2000 to Prj Mrkt Entry March 2010                                60%
    2 BR                                                                                   0
    3 BR                                                                                   0
    Total                                                                                  0

    Net Demand                                                                           60%
    2 BR                                                                                  185
    3 BR                                                                                  140
    Total                                                                                 325

    Developer's Unit Mix                                                                 60%
    2 BR                                                                                  24
    3 BR                                                                                  30
    Total                                                                                 54

    Capture Rate Analysis                                                                60%
    2 BR                                                                                13.0%
    3 BR                                                                                21.4%
    Total                                                                               16.6%




Novogradac & Company LLP                                                                        44
                                                                                                                   Legacy Apartments – Conway, SC – Market Study


                                                                        Overall Demand (As Proposed)
Calculation of Potential Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                 Overall
Minimum Income Limit                                                                                                      $19,920
Maximum Income Limit                                                                                                      $32,700
                                                                       New Renter
                                                                   Households - Total
                                                                       Change in
                                                                   Households PMA                                                                        Renter
                                                                 2000 to Prj Mrkt Entry                                             Percent within    Households
                       Income Category                                 March 2010                              Income Brackets         Cohort        within Bracket
                            $0-9,999                                       301                         19.1%                                    0.0%        0
                         $10,000-19,999                                    344                         21.8%                   79               0.8%        3
                         $20,000-29,999                                    309                         19.6%                9,999             100.0%      309
                         $30,000-39,999                                    233                         14.8%                2,700              27.0%       63
                         $40,000-49,999                                    114                          7.2%                                    0.0%        0
                         $50,000-59,999                                     78                          5.0%                                    0.0%        0
                         $60,000-74,999                                     81                          5.1%                                    0.0%        0
                         $75,000-99,999                                     61                          3.9%                                    0.0%        0
                           $100,000+                                        54                          3.5%                                    0.0%        0
                                                                          1,575                       100.0%                                                      375
Percent of renter households within limits versus total number of renter households                                                                           23.80%
Check                                                                                                                                    OK


Calculation of New Renter Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                 Overall                                           0%
Minimum Income Limit                                                                                                      $19,920                                                $0
Maximum Income Limit                                                                                                      $32,700                                                $0
                                                                      Total Renter
                                                                 Households PMA Prj
                                                                   Mrkt Entry March                                                 Percent within    Households
                       Income Category                                    2010                                 Income Brackets         Cohort        within Bracket Income Brackets
                            $0-9,999                                      1,070                        19.1%                    0               0.0%               0               0
                         $10,000-19,999                                   1,221                        21.8%                   79               0.8%              10               0
                         $20,000-29,999                                   1,098                        19.6%                9,999             100.0%           1,098               0
                         $30,000-39,999                                    829                         14.8%                2,700              27.0%             224               0
                         $40,000-49,999                                    404                          7.2%                    0               0.0%               0               0
                         $50,000-59,999                                    277                          5.0%                    0               0.0%               0               0
                         $60,000-74,999                                    286                          5.1%                    0               0.0%               0
                         $75,000-99,999                                    217                          3.9%                    0               0.0%               0
                           $100,000+                                       193                          3.5%                    0               0.0%               0
                                                                          5,596                       100.0%                                                   1,332
Percent of renter households within limits versus total number of renter households                                                                          23.80%
Check                                                                                                                                    OK


Does the Project Benefit from Rent Subsidy? (Y/N)                         No
Type of Housing (Family vs Senior)                                      Family
Location of Subject (Rural versus Urban)                                 Rural
Percent of Income for Housing                                                       35%
2000 Median Income                                                              $34,426
Prj Mrkt Entry March 2010 Median Income                                         $44,333
Change from 2000 to Prj Mrkt Entry March 2010                                    $9,907
Total Percent Change                                                              28.8%
Average Annual Change                                                              4.8%
Inflation Rate                                                                     4.8% Two year adjustment                                    1.0000
Maximum Allowable Income                                                         $32,700
Maximum Allowable Income Inflation Adjusted                                      $32,700
Maximum Number of Occupants                                                            5
Rent Income Categories                                                           Overall
Initial Gross Rent for Smallest Unit                                                $581
Initial Gross Rent for Smallest Unit Inflation Adjusted                          $581.00

                     Persons in Household                                 0BR                   1BR                 2BR                 3BR                4BR            5BR               Total
                               1                                          0%                    90%                 10%                  0%                 0%            0%                100%
                               2                                          0%                    20%                 80%                  0%                 0%            0%                100%
                               3                                          0%                     0%                 60%                 40%                 0%            0%                100%
                               4                                          0%                     0%                  0%                 80%                20%            0%                100%
                               5+                                         0%                     0%                  0%                 70%                30%            0%                100%




Novogradac & Company LLP                                                                                                                                                               45
                                                              Legacy Apartments – Conway, SC – Market Study


    STEP 1 Please refer to text for complete explanation.
    Demand from New Renter Households 2000 to Prj Mrkt Entry March 2010
    Income Target Population                                                              Overall
    New Renter Households PMA                                                              1,575
    Percent Income Qualified                                                              23.8%
    New Renter Income Qualified Households                                                  375

    STEP 2a. Please refer to text for complete explanation.
    Demand from Existing Households 2000
    Demand form Rent Overburdened Households
    Income Target Population                                                              Overall
    Total Existing Demand                                                                  5,596
    Income Qualified                                                                      23.8%
    Income Qualified Renter Households                                                     1,332
    Percent Rent Overburdened Prj Mrkt Entry March 2010                                   29.3%
    Rent Overburdened Households                                                            390

    STEP 2b. Please refer to text for complete explanation.
    Demand from Living in Substandard Housing
    Income Qualified Renter Households                                                    1,332
    Percent Living in Substandard Housing                                                 0.5%
    Households Living in Substandard Housing                                                7

    STEP 2c. Please refer to text for complete explanation.
    Senior Households Converting from Homeownership
    Income Target Population                                                              Overall
    Total Senior Homeowners                                                                 0
    Rural Versus Urban                                                        5.0%
    Senior Demand Converting from Homeownership                                             0

    Total Demand
    Total Demand from Existing Households                                                  397
    Total New Demand                                                                       375
    Total Demand (New Plus Existing Households)                                            772

    By Bedroom Demand
    One Person                                                               28.3%         218
    Two Persons                                                              27.0%         209
    Three Persons                                                            18.4%         142
    Four Persons                                                             12.7%         98
    Five Persons                                                             13.5%         104
    Total                                                                   100.0%         772




Novogradac & Company LLP                                                                          46
                                                            Legacy Apartments – Conway, SC – Market Study


    To place Person Demand into Bedroom Type Units
    Of one-person households in 1BR units                                    90%         197
    Of two-person households in 1BR units                                    20%         42
    Of three-person households in 1BR units                                   0%          0
    Of four-person households in 1BR units                                    0%          0
    Of five-person households in 1BR units                                    0%          0
    Of one-person households in 2BR units                                    10%         22
    Of two-person households in 2BR units                                    80%         167
    Of three-person households in 2BR units                                  60%         85
    Of four-person households in 2BR units                                    0%          0
    Of five-person households in 2BR units                                    0%          0
    Of one-person households in 3BR units                                     0%          0
    Of two-person households in 3BR units                                     0%          0
    Of three-person households in 3BR units                                  40%         57
    Of four-person households in 3BR units                                   80%         79
    Of five-person households in 3BR units                                   70%         73
    Of one-person households in 4BR units                                     0%          0
    Of two-person households in 4BR units                                     0%          0
    Of three-person households in 4BR units                                   0%          0
    Of four-person households in 4BR units                                   20%         20
    Of five-person households in 4BR units                                   30%         31
    Total Demand                                                                         772
    Check                                                                                OK

    Total Demand by Bedroom                                                             Overall
    2 BR                                                                                 274
    3 BR                                                                                 209
    Total Demand                                                                         483

    Additions To Supply 2000 to Prj Mrkt Entry March 2010                               Overall
    2 BR                                                                                  0
    3 BR                                                                                  0
    Total                                                                                 0

    Net Demand                                                                          Overall
    2 BR                                                                                 274
    3 BR                                                                                 209
    Total                                                                                483

    Developer's Unit Mix                                                                Overall
    2 BR                                                                                  42
    3 BR                                                                                  48
    Total                                                                                 90

    Capture Rate Analysis                                                               Overall
    2 BR                                                                                15.3%
    3 BR                                                                                23.0%
    Total                                                                               18.6%




Novogradac & Company LLP                                                                       47
                                                                                                                     Legacy Apartments – Conway, SC – Market Study


                                                     Demand at 50% AMI (As NOVOCO Recommended)
Calculation of Potential Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                 50%
Minimum Income Limit                                                                                                $19,920
Maximum Income Limit                                                                                                $27,250
                                                                  New Renter
                                                             Households - Total
                                                                   Change in
                                                              Households PMA
                                                            2000 to Prj Mrkt Entry                                                                     Renter Households
                     Income Category                              March 2012                             Income Brackets    Percent within Cohort        within Bracket
                          $0-9,999                                    359                        18.6%                                       0.0%               0
                       $10,000-19,999                                 404                        20.9%               19,999                200.0%              808
                       $20,000-29,999                                 368                        19.1%                7,250                 72.5%              267
                       $30,000-39,999                                 292                        15.1%                                       0.0%               0
                       $40,000-49,999                                 143                         7.4%                                       0.0%               0
                       $50,000-59,999                                  98                         5.1%                                       0.0%               0
                       $60,000-74,999                                 100                         5.2%                                       0.0%               0
                       $75,000-99,999                                  86                         4.5%                                       0.0%               0
                         $100,000+                                     79                         4.1%                                       0.0%               0
                                                                     1,930                      100.0%                                                                1,074
Percent of renter households within limits versus total number of renter households                                                                                 55.68%
Check                                                                                                                               Problem


Calculation of New Renter Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                 50%                                                         0%
Minimum Income Limit                                                                                                $19,920                                                                     $0
Maximum Income Limit                                                                                                $27,250                                                                     $0
                                                                 Total Renter
                                                            Households PMA Prj
                                                              Mrkt Entry March                                                                         Households within
                     Income Category                                 2012                                Income Brackets      Percent within Cohort        Bracket            Income Brackets
                          $0-9,999                                   1,107                       18.6%                    0                    0.0%                       0                     0
                       $10,000-19,999                                1,245                       20.9%               19,999                  200.0%                   2,491                     0
                       $20,000-29,999                                1,134                       19.1%                7,250                   72.5%                     822                     0
                       $30,000-39,999                                 900                        15.1%                    0                    0.0%                       0                     0
                       $40,000-49,999                                 441                         7.4%                    0                    0.0%                       0                     0
                       $50,000-59,999                                 302                         5.1%                    0                    0.0%                       0                     0
                       $60,000-74,999                                 309                         5.2%                    0                    0.0%                       0
                       $75,000-99,999                                 266                         4.5%                    0                    0.0%                       0
                         $100,000+                                    245                         4.1%                    0                    0.0%                       0
                                                                     5,951                      100.0%                                                                3,313
Percent of renter households within limits versus total number of renter households                                                                                 55.68%
Check                                                                                                                               Problem


Does the Project Benefit from Rent Subsidy? (Y/N)                    No
Type of Housing (Family vs Senior)                                 Family
Location of Subject (Rural versus Urban)                            Rural
Percent of Income for Housing                                                 35%
2000 Median Income                                                        $34,426
Prj Mrkt Entry March 2012 Median Income                                   $45,475
Change from 2000 to Prj Mrkt Entry March 2012                             $11,049
Total Percent Change                                                        32.1%
Average Annual Change                                                        5.3%
Inflation Rate                                                               5.3% Two year adjustment                                         1.0000
Maximum Allowable Income                                                   $27,250
Maximum Allowable Income Inflation Adjusted                                $27,250
Maximum Number of Occupants                                                      5
Rent Income Categories                                                        50%
Initial Gross Rent for Smallest Unit                                          $581
Initial Gross Rent for Smallest Unit Inflation Adjusted                    $581.00

                   Persons in Household                             0BR                   1BR                 2BR                     3BR                     4BR                  5BR                Total
                             1                                      0%                    90%                 10%                     0%                      0%                   0%                 100%
                             2                                      0%                    20%                 80%                     0%                      0%                   0%                 100%
                             3                                      0%                     0%                 60%                     40%                     0%                   0%                 100%
                             4                                      0%                     0%                 0%                      80%                     20%                  0%                 100%
                             5+                                     0%                     0%                 0%                      70%                     30%                  0%                 100%




Novogradac & Company LLP                                                                                                                                                                        48
                                                                Legacy Apartments – Conway, SC – Market Study


      STEP 1 Please refer to text for complete explanation.
      Demand from New Renter Households 2000 to Prj Mrkt Entry March 2012
      Income Target Population                                                             50%
      New Renter Households PMA                                                           1,930
      Percent Income Qualified                                                            55.7%
      New Renter Income Qualified Households                                              1,074

      STEP 2a. Please refer to text for complete explanation.
      Demand from Existing Households 2000
      Demand form Rent Overburdened Households
      Income Target Population                                                             50%
      Total Existing Demand                                                               5,951
      Income Qualified                                                                    55.7%
      Income Qualified Renter Households                                                  3,313
      Percent Rent Overburdened Prj Mrkt Entry March 2012                                 29.3%
      Rent Overburdened Households                                                         971

      STEP 2b. Please refer to text for complete explanation.
      Demand from Living in Substandard Housing
      Income Qualified Renter Households                                                  3,313
      Percent Living in Substandard Housing                                               0.5%
      Households Living in Substandard Housing                                              16

      STEP 2c. Please refer to text for complete explanation.
      Senior Households Converting from Homeownership
      Income Target Population                                                             50%
      Total Senior Homeowners                                                                0
      Rural Versus Urban                                                      5.0%
      Senior Demand Converting from Homeownership                                           0

      Total Demand
      Total Demand from Existing Households                                                988
      Total New Demand                                                                    1,074
      Total Demand (New Plus Existing Households)                                         2,062

      By Bedroom Demand
      One Person                                                              28.6%        590
      Two Persons                                                             26.9%        554
      Three Persons                                                           18.2%        375
      Four Persons                                                            12.7%        261
      Five Persons                                                            13.7%        282
      Total                                                                  100.0%       2,062




Novogradac & Company LLP                                                                          49
                                                              Legacy Apartments – Conway, SC – Market Study


      To place Person Demand into Bedroom Type Units
      Of one-person households in 1BR units                                  90%         531
      Of two-person households in 1BR units                                  20%         111
      Of three-person households in 1BR units                                 0%           0
      Of four-person households in 1BR units                                  0%           0
      Of five-person households in 1BR units                                  0%           0
      Of one-person households in 2BR units                                  10%          59
      Of two-person households in 2BR units                                  80%         443
      Of three-person households in 2BR units                                60%         225
      Of four-person households in 2BR units                                  0%           0
      Of five-person households in 2BR units                                  0%           0
      Of one-person households in 3BR units                                   0%           0
      Of two-person households in 3BR units                                   0%           0
      Of three-person households in 3BR units                                40%         150
      Of four-person households in 3BR units                                 80%         209
      Of five-person households in 3BR units                                 70%         197
      Of one-person households in 4BR units                                   0%           0
      Of two-person households in 4BR units                                   0%           0
      Of three-person households in 4BR units                                 0%           0
      Of four-person households in 4BR units                                 20%          52
      Of five-person households in 4BR units                                 30%          85
      Total Demand                                                                      2,062
      Check                                                                              OK

      Total Demand by Bedroom                                                           50%
      2 BR                                                                               727
      3 BR                                                                               556
      Total Demand                                                                      1,284

      Additions To Supply 2000 to Prj Mrkt Entry March 2012                              50%
      2 BR                                                                                 0
      3 BR                                                                                 0
      Total                                                                                0

      Net Demand                                                                        50%
      2 BR                                                                               727
      3 BR                                                                               556
      Total                                                                             1,284


      Developer's Unit Mix                                                               50%
      2 BR                                                                                18
      3 BR                                                                                18
      Total                                                                               36

      Capture Rate Analysis                                                              50%
      2 BR                                                                               2.5%
      3 BR                                                                               3.2%
      Total                                                                              2.8%



Novogradac & Company LLP                                                                        50
                                                                                                                          Legacy Apartments – Conway, SC – Market Study


                                                      Demand at 60% AMI (As NOVOCO Recommended)
Calculation of Potential Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                       60%
Minimum Income Limit                                                                                                      $22,320
Maximum Income Limit                                                                                                      $32,700
                                                                      New Renter
                                                                   Households - Total
                                                                       Change in
                                                                   Households PMA
                                                                 2000 to Prj Mrkt Entry                                                                     Renter Households
                       Income Category                                March 2012                               Income Brackets    Percent within Cohort       within Bracket
                            $0-9,999                                       359                         18.6%                                       0.0%               0
                         $10,000-19,999                                    404                         20.9%                                       0.0%               0
                         $20,000-29,999                                    368                         19.1%                7,679                 76.8%             282
                         $30,000-39,999                                    292                         15.1%                2,700                 27.0%              79
                         $40,000-49,999                                    143                          7.4%                                       0.0%               0
                         $50,000-59,999                                     98                          5.1%                                       0.0%               0
                         $60,000-74,999                                    100                          5.2%                                       0.0%               0
                         $75,000-99,999                                     86                          4.5%                                       0.0%               0
                           $100,000+                                        79                          4.1%                                       0.0%               0
                                                                          1,930                       100.0%                                                                 361
Percent of renter households within limits versus total number of renter households                                                                                      18.72%
Check                                                                                                                                       OK


Calculation of New Renter Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                       60%                                                        0%
Minimum Income Limit                                                                                                      $22,320                                                                    $0
Maximum Income Limit                                                                                                      $32,700                                                                    $0
                                                                      Total Renter
                                                                 Households PMA Prj
                                                                   Mrkt Entry March                                                                         Households within
                       Income Category                                    2012                                 Income Brackets      Percent within Cohort       Bracket            Income Brackets
                            $0-9,999                                      1,107                        18.6%                    0                    0.0%                      0                     0
                         $10,000-19,999                                   1,245                        20.9%                    0                    0.0%                      0                     0
                         $20,000-29,999                                   1,134                        19.1%                7,679                   76.8%                    871                     0
                         $30,000-39,999                                    900                         15.1%                2,700                   27.0%                    243                     0
                         $40,000-49,999                                    441                          7.4%                    0                    0.0%                      0                     0
                         $50,000-59,999                                    302                          5.1%                    0                    0.0%                      0                     0
                         $60,000-74,999                                    309                          5.2%                    0                    0.0%                      0
                         $75,000-99,999                                    266                          4.5%                    0                    0.0%                      0
                           $100,000+                                       245                          4.1%                    0                    0.0%                      0
                                                                          5,951                       100.0%                                                               1,114
Percent of renter households within limits versus total number of renter households                                                                                      18.72%
Check                                                                                                                                       OK


Does the Project Benefit from Rent Subsidy? (Y/N)                         No
Type of Housing (Family vs Senior)                                      Family
Location of Subject (Rural versus Urban)                                 Rural
Percent of Income for Housing                                                       35%
2000 Median Income                                                              $34,426
Prj Mrkt Entry March 2012 Median Income                                         $45,475
Change from 2000 to Prj Mrkt Entry March 2012                                   $11,049
Total Percent Change                                                              32.1%
Average Annual Change                                                              5.3%
Inflation Rate                                                                     5.3% Two year adjustment                                        1.0000
Maximum Allowable Income                                                         $32,700
Maximum Allowable Income Inflation Adjusted                                      $32,700
Maximum Number of Occupants                                                            5
Rent Income Categories                                                              60%
Initial Gross Rent for Smallest Unit                                                $651
Initial Gross Rent for Smallest Unit Inflation Adjusted                          $651.00

                     Persons in Household                                 0BR                   1BR                 2BR                     3BR                    4BR                  5BR                Total
                               1                                          0%                    90%                 10%                      0%                     0%                  0%                 100%
                               2                                          0%                    20%                 80%                      0%                     0%                  0%                 100%
                               3                                          0%                     0%                 60%                     40%                    0%                   0%                 100%
                               4                                          0%                     0%                  0%                     80%                    20%                  0%                 100%
                               5+                                         0%                     0%                  0%                     70%                    30%                  0%                 100%




Novogradac & Company LLP                                                                                                                                                                             51
                                                              Legacy Apartments – Conway, SC – Market Study


    STEP 1 Please refer to text for complete explanation.
    Demand from New Renter Households 2000 to Prj Mrkt Entry March 2012
    Income Target Population                                                               60%
    New Renter Households PMA                                                             1,930
    Percent Income Qualified                                                              18.7%
    New Renter Income Qualified Households                                                  361

    STEP 2a. Please refer to text for complete explanation.
    Demand from Existing Households 2000
    Demand form Rent Overburdened Households
    Income Target Population                                                               60%
    Total Existing Demand                                                                 5,951
    Income Qualified                                                                      18.7%
    Income Qualified Renter Households                                                    1,114
    Percent Rent Overburdened Prj Mrkt Entry March 2012                                   29.3%
    Rent Overburdened Households                                                           326

    STEP 2b. Please refer to text for complete explanation.
    Demand from Living in Substandard Housing
    Income Qualified Renter Households                                                    1,114
    Percent Living in Substandard Housing                                                 0.5%
    Households Living in Substandard Housing                                                6

    STEP 2c. Please refer to text for complete explanation.
    Senior Households Converting from Homeownership
    Income Target Population                                                               60%
    Total Senior Homeowners                                                                  0
    Rural Versus Urban                                                        5.0%
    Senior Demand Converting from Homeownership                                             0

    Total Demand
    Total Demand from Existing Households                                                  332
    Total New Demand                                                                       361
    Total Demand (New Plus Existing Households)                                            693

    By Bedroom Demand
    One Person                                                               28.6%         198
    Two Persons                                                              26.9%         186
    Three Persons                                                            18.2%         126
    Four Persons                                                             12.7%         88
    Five Persons                                                             13.7%         95
    Total                                                                   100.0%         693




Novogradac & Company LLP                                                                          52
                                                            Legacy Apartments – Conway, SC – Market Study


    To place Person Demand into Bedroom Type Units
    Of one-person households in 1BR units                                    90%         178
    Of two-person households in 1BR units                                    20%         37
    Of three-person households in 1BR units                                   0%          0
    Of four-person households in 1BR units                                    0%          0
    Of five-person households in 1BR units                                    0%          0
    Of one-person households in 2BR units                                    10%         20
    Of two-person households in 2BR units                                    80%         149
    Of three-person households in 2BR units                                  60%         76
    Of four-person households in 2BR units                                    0%          0
    Of five-person households in 2BR units                                    0%          0
    Of one-person households in 3BR units                                     0%          0
    Of two-person households in 3BR units                                     0%          0
    Of three-person households in 3BR units                                  40%         50
    Of four-person households in 3BR units                                   80%         70
    Of five-person households in 3BR units                                   70%         66
    Of one-person households in 4BR units                                     0%          0
    Of two-person households in 4BR units                                     0%          0
    Of three-person households in 4BR units                                   0%          0
    Of four-person households in 4BR units                                   20%         18
    Of five-person households in 4BR units                                   30%         28
    Total Demand                                                                         693
    Check                                                                                OK

    Total Demand by Bedroom                                                              60%
    2 BR                                                                                  244
    3 BR                                                                                  187
    Total Demand                                                                          431

    Additions To Supply 2000 to Prj Mrkt Entry March 2012                                60%
    2 BR                                                                                   0
    3 BR                                                                                   0
    Total                                                                                  0

    Net Demand                                                                           60%
    2 BR                                                                                  244
    3 BR                                                                                  187
    Total                                                                                 431

    Developer's Unit Mix                                                                 60%
    2 BR                                                                                  24
    3 BR                                                                                  30
    Total                                                                                 54

    Capture Rate Analysis                                                                60%
    2 BR                                                                                 9.8%
    3 BR                                                                                16.0%
    Total                                                                               12.5%




Novogradac & Company LLP                                                                        53
                                                                                                                   Legacy Apartments – Conway, SC – Market Study


                                                          Overall Demand (As NOVOCO Recommended)
Calculation of Potential Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                 Overall
Minimum Income Limit                                                                                                      $19,920
Maximum Income Limit                                                                                                      $32,700
                                                                       New Renter
                                                                   Households - Total
                                                                       Change in
                                                                   Households PMA                                                                        Renter
                                                                 2000 to Prj Mrkt Entry                                             Percent within    Households
                       Income Category                                 March 2012                              Income Brackets         Cohort        within Bracket
                            $0-9,999                                       359                         18.6%                                    0.0%        0
                         $10,000-19,999                                    404                         20.9%                   79               0.8%        3
                         $20,000-29,999                                    368                         19.1%                9,999             100.0%      368
                         $30,000-39,999                                    292                         15.1%                2,700              27.0%       79
                         $40,000-49,999                                    143                          7.4%                                    0.0%        0
                         $50,000-59,999                                     98                          5.1%                                    0.0%        0
                         $60,000-74,999                                    100                          5.2%                                    0.0%        0
                         $75,000-99,999                                     86                          4.5%                                    0.0%        0
                           $100,000+                                        79                          4.1%                                    0.0%        0
                                                                          1,930                       100.0%                                                      450
Percent of renter households within limits versus total number of renter households                                                                           23.30%
Check                                                                                                                                    OK


Calculation of New Renter Household Demand by Income Cohort by % of AMI
Percent of AMI Level                                                                                                                 Overall                                           0%
Minimum Income Limit                                                                                                      $19,920                                                $0
Maximum Income Limit                                                                                                      $32,700                                                $0
                                                                      Total Renter
                                                                 Households PMA Prj
                                                                   Mrkt Entry March                                                 Percent within    Households
                       Income Category                                    2012                                 Income Brackets         Cohort        within Bracket Income Brackets
                            $0-9,999                                      1,107                        18.6%                    0               0.0%               0               0
                         $10,000-19,999                                   1,245                        20.9%                   79               0.8%              10               0
                         $20,000-29,999                                   1,134                        19.1%                9,999             100.0%           1,134               0
                         $30,000-39,999                                    900                         15.1%                2,700              27.0%             243               0
                         $40,000-49,999                                    441                          7.4%                    0               0.0%               0               0
                         $50,000-59,999                                    302                          5.1%                    0               0.0%               0               0
                         $60,000-74,999                                    309                          5.2%                    0               0.0%               0
                         $75,000-99,999                                    266                          4.5%                    0               0.0%               0
                           $100,000+                                       245                          4.1%                    0               0.0%               0
                                                                          5,951                       100.0%                                                   1,387
Percent of renter households within limits versus total number of renter households                                                                          23.30%
Check                                                                                                                                    OK


Does the Project Benefit from Rent Subsidy? (Y/N)                         No
Type of Housing (Family vs Senior)                                      Family
Location of Subject (Rural versus Urban)                                 Rural
Percent of Income for Housing                                                       35%
2000 Median Income                                                              $34,426
Prj Mrkt Entry March 2012 Median Income                                         $45,475
Change from 2000 to Prj Mrkt Entry March 2012                                   $11,049
Total Percent Change                                                              32.1%
Average Annual Change                                                              5.3%
Inflation Rate                                                                     5.3% Two year adjustment                                    1.0000
Maximum Allowable Income                                                         $32,700
Maximum Allowable Income Inflation Adjusted                                      $32,700
Maximum Number of Occupants                                                            5
Rent Income Categories                                                           Overall
Initial Gross Rent for Smallest Unit                                                $581
Initial Gross Rent for Smallest Unit Inflation Adjusted                          $581.00

                     Persons in Household                                 0BR                   1BR                 2BR                 3BR                4BR            5BR               Total
                               1                                          0%                    90%                 10%                  0%                 0%            0%                100%
                               2                                          0%                    20%                 80%                  0%                 0%            0%                100%
                               3                                          0%                     0%                 60%                 40%                 0%            0%                100%
                               4                                          0%                     0%                  0%                 80%                20%            0%                100%
                               5+                                         0%                     0%                  0%                 70%                30%            0%                100%




Novogradac & Company LLP                                                                                                                                                               54
                                                              Legacy Apartments – Conway, SC – Market Study


    STEP 1 Please refer to text for complete explanation.
    Demand from New Renter Households 2000 to Prj Mrkt Entry March 2012
    Income Target Population                                                              Overall
    New Renter Households PMA                                                              1,930
    Percent Income Qualified                                                              23.3%
    New Renter Income Qualified Households                                                  450

    STEP 2a. Please refer to text for complete explanation.
    Demand from Existing Households 2000
    Demand form Rent Overburdened Households
    Income Target Population                                                              Overall
    Total Existing Demand                                                                  5,951
    Income Qualified                                                                      23.3%
    Income Qualified Renter Households                                                     1,387
    Percent Rent Overburdened Prj Mrkt Entry March 2012                                   29.3%
    Rent Overburdened Households                                                            406

    STEP 2b. Please refer to text for complete explanation.
    Demand from Living in Substandard Housing
    Income Qualified Renter Households                                                    1,387
    Percent Living in Substandard Housing                                                 0.5%
    Households Living in Substandard Housing                                                7

    STEP 2c. Please refer to text for complete explanation.
    Senior Households Converting from Homeownership
    Income Target Population                                                              Overall
    Total Senior Homeowners                                                                 0
    Rural Versus Urban                                                        5.0%
    Senior Demand Converting from Homeownership                                             0

    Total Demand
    Total Demand from Existing Households                                                  413
    Total New Demand                                                                       450
    Total Demand (New Plus Existing Households)                                            863

    By Bedroom Demand
    One Person                                                               28.6%         247
    Two Persons                                                              26.9%         232
    Three Persons                                                            18.2%         157
    Four Persons                                                             12.7%         109
    Five Persons                                                             13.7%         118
    Total                                                                   100.0%         863




Novogradac & Company LLP                                                                          55
                                                            Legacy Apartments – Conway, SC – Market Study


    To place Person Demand into Bedroom Type Units
    Of one-person households in 1BR units                                    90%         222
    Of two-person households in 1BR units                                    20%         46
    Of three-person households in 1BR units                                   0%          0
    Of four-person households in 1BR units                                    0%          0
    Of five-person households in 1BR units                                    0%          0
    Of one-person households in 2BR units                                    10%         25
    Of two-person households in 2BR units                                    80%         186
    Of three-person households in 2BR units                                  60%         94
    Of four-person households in 2BR units                                    0%          0
    Of five-person households in 2BR units                                    0%          0
    Of one-person households in 3BR units                                     0%          0
    Of two-person households in 3BR units                                     0%          0
    Of three-person households in 3BR units                                  40%         63
    Of four-person households in 3BR units                                   80%         88
    Of five-person households in 3BR units                                   70%         83
    Of one-person households in 4BR units                                     0%          0
    Of two-person households in 4BR units                                     0%          0
    Of three-person households in 4BR units                                   0%          0
    Of four-person households in 4BR units                                   20%         22
    Of five-person households in 4BR units                                   30%         35
    Total Demand                                                                         863
    Check                                                                                OK

    Total Demand by Bedroom                                                             Overall
    2 BR                                                                                 304
    3 BR                                                                                 233
    Total Demand                                                                         537

    Additions To Supply 2000 to Prj Mrkt Entry March 2012                               Overall
    2 BR                                                                                  0
    3 BR                                                                                  0
    Total                                                                                 0

    Net Demand                                                                          Overall
    2 BR                                                                                 304
    3 BR                                                                                 233
    Total                                                                                537

    Developer's Unit Mix                                                                Overall
    2 BR                                                                                  42
    3 BR                                                                                  48
    Total                                                                                 90

    Capture Rate Analysis                                                               Overall
    2 BR                                                                                13.8%
    3 BR                                                                                20.6%
    Total                                                                               16.8%




Novogradac & Company LLP                                                                       56
                                                            Legacy Apartments – Conway, SC – Market Study


Conclusions
The following table summarizes the capture rates for the Subject.

                         SUBJECT CAPTURE RATES - AS PROPOSED
  Unit Type              Total Demand     Supply     Net Demand       Units Proposed       Capture Rate
  2BR at 50% AMI              667           0            667                18                 2.7%
  3BR at 50% AMI              507           0            507                18                 3.5%
  2BR at 60% AMI              185           0            185                24                13.0%
  3BR at 60% AMI              140           0            140                30                21.4%
  Overall                     483           0            483                90                18.6%

As the analysis illustrates, the Subject’s capture rates vary from 2.7 to 21.4 percent with an overall
capture rate of 18.6 percent. The overall capture rate is considered moderate. The Subject is
currently 93 percent occupied and renovations will occur with tenants in place. Therefore, demand
for the Subject based on capture rates alone is considered adequate.

               SUBJECT CAPTURE RATES - AS NOVOCO RECOMMENDED
 Unit Type                    Total Demand    Supply    Net Demand      Units Proposed      Capture Rate
 2BR at 50% AMI                    727          0           727               18                2.5%
 3BR at 50% AMI                    556          0           556               18                3.2%
 2BR at 60% AMI                    244          0           244               24                9.8%
 3BR at 60% AMI                    187          0           187               30               16.0%
 Overall                           537          0           537               90               16.8%

As the previous table illustrates, the Subject’s revised capture rates, with lower rents at 60 percent of
AMI, range from 2.5 to 16.0 percent with an overall capture rate of 16.8 percent. As previously
stated, the Subject is currently 93 percent occupied and renovations will occur with tenants in place.
Therefore, demand for the Subject based on capture rates alone is considered adequate in both
scenarios.

Absorption Rate
The demand analysis illustrated that the Subject’s capture rates (as proposed) vary from 2.7 to 21.4
percent with an overall capture rate of 18.6 percent. We were able to obtain absorption information
on three properties, two in Conway and one in Myrtle Beach. The following table illustrates their
absorption information.

                                                            Number of  Absorption
   Year Opened       Name           Location        Type      Units       Period         Absorption Rate
      2007     Crabtree Commons Conway             LIHTC       48         10 days        > 48 units/month
      2008     Monticello Park III Myrtle Beach    LIHTC       56        5 months        10.4 units/month
      2009      Patriot's Hollow    Conway         Market      53     10 - 12 months      4-5 units/month

The Subject will undergo renovations with tenants in place. Therefore, the property will not undergo
a re-absorption period. However, if the property were to undergo a re-absorption period, we believe
it would re-absorb at a quicker pace than at Patriot’s Hollow but slightly slower than Monticello
Park III as Monticello Park III is located in Myrtle Beach, a slightly superior submarket. Therefore,
we estimate that the Subject will re-absorb at a pace of nine units per month for a period of nine
months.
Novogradac & Company LLP                                                                        57
G. SUPPLY ANALYSIS
                                                            Legacy Apartments – Conway, SC – Market Study


                                        SUPPLY ANALYSIS

SURVEY OF COMPARABLE PROJECTS
Comparable properties are examined on the basis of physical characteristics, i.e. building type,
age/quality, level of common amenities, absorption, as well as similarity in rent. We attempted to
compare the Subject to complexes from the competing market to provide a broader picture of the
health and available supply in the market. We surveyed many properties that we chose not to use in
the survey because they were not as comparable to the Subject as others that were selected.
Description of Property Types Surveyed/Determination of Number of Tax Credit Units
We interviewed numerous properties to determine which ones were considered “true” competition
for the Subject. Several properties in the market area were interviewed and not included because of
their dissimilarity or other factors. Subsidized properties were excluded due to differing rent
structures from the Subject without a subsidy; however, it should be noted that subsidized properties
in the market area were found to have stable occupancies. The following table illustrates the
excluded properties.

                                       EXCLUDED PROPERTIES
              Name               City             Type      Tenancy               Reason for Exclusion
          Crane Creek          Conway          LIHTC/RD      Family          Rent structure not comparable
        Blackwater Cove        Conway          LIHTC/RD      Family          Rent structure not comparable
      Raintree Apartments      Conway          LIHTC/RD      Family          Rent structure not comparable
     North Oaks Apartments     Conway          LIHTC/RD      Family          Rent structure not comparable
    Shady Moss Townhomes       Conway              RD        Family          Rent structure not comparable
            The Oaks           Conway              RD        Family          Rent structure not comparable
         Gate Bay I & II       Conway              RD        Family          Rent structure not comparable
   EME Apartments of Conway    Conway           Section 8    Family          Rent structure not comparable
      Leehaven & Sanders       Conway           Section 8    Family          Rent structure not comparable
      Noel Villa Apartments    Conway           Section 8    Elderly    Tenancy and rent structure not comparable
     Crossings Apartments      Conway        Condominiums     N/Av            Converted to condominiums
    Alexan Withers Preserve   Myrtle Beach       Market      Family                    In lease up
         Magnolia Lane         Conway            Market     Students    Targets students; Rents units by bedroom


LIHTC Competition
According to SCSHFDA’s LIHTC allocation lists, there are only three family LIHTC properties in
the PMA that do not operate with additional subsidy, including the Subject and its phase II. There
have been no LIHTC allocations in the Subject’s PMA since 2006.

Pipeline Construction
According to SCSHFDA’s LIHTC allocation lists, there have been no LIHTC allocations in the
Subject’s PMA since 2006; therefore, the most recent addition to supply is Crabtree Commons,
which was allocated in 2006 and opened in 2008. The property has stabilized.

Comparable Properties
Property managers and realtors were interviewed for information on unit mix, size, absorption, unit
features and project amenities, tenant profiles, and market trends in general. Our competitive survey
includes seven “true” comparable properties containing 1,155 units. There is adequate LIHTC data
in the PMA but limited market rate data; therefore, we have included market rate comparables in
Myrtle Beach to supplement the market rate discussion. These properties are located approximately
four to nine miles from the Subject.


Novogradac & Company LLP                                                                             59
                                                        Legacy Apartments - Conway, SC – Market Study


A detailed matrix describing the individual competitive properties as well as the proposed Subject is
provided on the following pages. A Comparable Properties Map, illustrating the location of the
Subject in relation to comparable properties is also provided on the following page. The properties
are further profiled in the write-ups following. The property descriptions include information on
vacancy, turnover, absorption, age, competition, and the general health of the rental market, when
available. The comparables were approved by SCSHFDA on April 7, 2010. The following email
illustrates this approval.




Novogradac & Company LLP                                                                 60
                                                                                                                                       Page 1 of 1



 The revisions are fine.

        -----Original Message-----
        From: Kristina Garcia [mailto:Kristina.Garcia@novoco.com]
        Sent: Wednesday, April 07, 2010 5:30 PM
        To: Nicholson, Laura 6-9190
        Subject: Comparable property approval - Cherokee and Horry counties

        Hi Laura,

        I had to revise the comparable property list for:

        - Bay Pointe II (Myrtle Beach) because one of the market rate properties (Patriot's Way fka The Carlyle)
        refused to participate and therefore I can no longer use it as a comparable

        - Trails at Westbrooke (Gaffney) - I need to add Iveywood Park Apartments

        Attached are the revised comparable property lists.

        Thanks,


        Kristina Garcia
        Novogradac & Company LLP
        Valuation Services
        2325 Lakeview Parkway, Suite 450
        Alpharetta, Georgia 30009
        Phone: 678.867.2333
        Fax : 678.867.2366
        Kristina.Garcia@novoco.com




        *********************************************
        Novogradac & Company LLP Disclaimer

        Notice pursuant to IRS regulations: Any U.S. federal tax advice contained in this correspondence (including any attachments/enclosures) is
        not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties under the Internal Revenue Code; nor
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        correspondence is limited to the federal tax issues addressed in it. Additional issues may exist outside the limited scope of any advice
        provided - any such advice does not consider or provide a conclusion with respect to any additional issues.


        The information in this email is confidential and is intended solely for the addressee. Access to this email by anyone else is unauthorized. If
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file://C:\Documents and Settings\garckri\Local Settings\Temp\XPgrpwise\4BBD6E49NOV... 4/8/2010
                                                        Legacy Apartments - Conway, SC – Market Study




COMPARABLE RENTAL PROPERTY MAP




                                 COMPARABLE PROPERTIES
     #                  Property Name                City             Type              Distance
     1                 Bells Bay Landing           Conway            LIHTC              8.1 miles
     2                Crabtree Commons             Conway            LIHTC              9.3 miles
     3               Legacy Apartments II          Conway         LIHTC, Market         0.0 miles
     4            Flintlake Apartment Homes       Myrtle Beach       Market             9.3 miles
     5                  Patriot's Hollow           Conway            Market             2.0 miles
     6                   River Landing            Myrtle Beach       Market             8.2 miles
     7        The Abbey At Ridgewood Plantation   Myrtle Beach       Market             4.0 miles

The following tables illustrate unit mix by bedroom type and income level, square footage by
bedroom type, year built, common area and in-unit amenities, rent per square foot, monthly rents and
utilities included, and vacancy information for the comparable properties and the Subject in a
comparative framework.

Novogradac & Company LLP                                                                 62
Comp #            Project            Distance    Type / Built /     Market /       Units       #      %      Restriction    Rent    Size    Max     Wait     Units Vacancy
                                                  Renovated         Subsidy                                                (Adj.)                           Vacant  Rate
                                                                                                                                    (SF)    Rent?   List?
Subject   Legacy Apartments I (As      n/a          Garden        @50%, @60%    2BR / 2BA     18    20.00%     @50%        $480     1,080    n/a             N/A    N/A
          Renovated)
          1001 Singleton Ridge Rd;                (3 stories)                   2BR / 2BA     24    26.70%     @60%        $595     1,080    n/a             N/A    N/A
          204 Legacy Way
          Conway, SC 29526                        1998/2012                     3BR / 2BA     18    20.00%     @50%        $560     1,322    n/a             N/A    N/A
          Horry County                                                          3BR / 2BA     30    33.30%     @60%        $650     1,322    n/a             N/A    N/A


                                                                                              90     100%                                                    N/A     N/A
  1       Bells Bay Landing          8.1 miles      Garden        @50%, @60%    3BR / 2BA      48   80.00%     @50%        $505     1,153    no     Yes       1     2.10%
          2321 Wright Boulevard                      2000                       3BR / 2BA     N/A     N/A      @60%        $644     1,153    no     Yes       0      N/A
          Conway, SC 29526                                                      4BR / 2BA      12   20.00%     @50%        $563     1,353    no     Yes       0     0.00%
          Horry County                                                          4BR / 2BA     N/A     N/A      @60%        $718     1,353    no     Yes       0      N/A


                                                                                              60     100%                                                     1     1.70%
  2       Crabtree Commons           9.3 miles     Garden         @50%, @60%    2BR / 2BA      24   50.00%     @50%        $365      926     no     Yes       0     0.00%
          301 El Bethel Rd                        (2 stories)                   2BR / 2BA     N/A     N/A      @60%        $465      976     no     Yes       0      N/A
          Conway, SC 29527                           2007                       3BR / 2BA     24    50.00%     @50%        $390     1,197    no     Yes       0     0.00%
          Horry County                                                          3BR / 2BA     N/A     N/A      @60%        $490     1,197    no     No        0      N/A


                                                                                              48     100%                                                     0    0.00%
  3       Legacy Apartments II       0.0 miles     Garden         @50%, @60%,   2BR / 2BA     13    11.60%     @50%        $479     1,080    yes     No       2    15.40%
          204 Legacy Way                          (2 stories)        Market     2BR / 2BA     11     9.80%     @60%        $500     1,080    yes     No       1    9.10%
          Conway, SC 29527                        1997/1999                     2BR / 2BA     30    26.80%     Market      $625     1,080    n/a     No       2    6.70%
          Horry County                                                          3BR / 2BA     12    10.70%     @50%        $525     1,337    yes     No       1    8.30%
                                                                                3BR / 2BA     24    21.40%     @60%        $525     1,337    yes     No       1    4.20%
                                                                                3BR / 2BA     22    19.60%     Market      $725     1,337    n/a     No       3    13.60%


                                                                                              112    100%                                                    10     8.93%
  4       Flintlake Apartment        9.3 miles      Garden          Market      1BR / 1BA      48   17.60%     Market      $640     810      n/a     No      N/A     N/A
          Homes
          650 West Flintlake Court                (2 stories)                   2BR / 2BA     145   53.30%     Market      $697     1,086    n/a     No      N/A    N/A

          Myrtle Beach, SC 29579                     1998                       2BR / 2BA     N/A    N/A       Market      $727     1,145    n/a     No      N/A    N/A

          Horry County                                                          3BR / 2.5BA   64    23.50%     Market      $953     1,508    n/a     No      N/A    N/A


                                                                                              272    100%                                                    22     8.10%
  5       Patriot's Hollow           2.0 miles     Garden           Market      1BR / 1BA      5    9.40%      Market      $639     N/A      n/a    Yes       0     0.00%
               Patriot s
          300 Patriot's Hollow Way                (3 stories)                   2BR / 2BA      42   79.20%     Market      $752     N/A      n/a    No        3     7.10%

          Conway, SC 29526                           2009                       3BR / 2BA      6    11.30%     Market      $1,037   N/A      n/a     No       0     0.00%
          Horry County

                                                                                              53    100%                                                      3     5.70%
  6       River Landing              8.2 miles     Garden           Market      1BR / 1BA     N/A    N/A       Market      $520     695      n/a     No       0      N/A
          200 River Landing                       (3 stories)                   1BR / 1BA     N/A    N/A       Market      $550     771      n/a     No       0      N/A
          Boulevard
          Myrtle Beach, SC 29588                     2002                       2BR / 2BA     N/A    N/A       Market      $620     950      n/a     No      N/A    N/A

          Horry County                                                          2BR / 2BA     N/A    N/A       Market      $650     1,035    n/a     No      N/A    N/A
                                                                                3BR / 2BA     N/A    N/A       Market
                                                                                                               M k t       $800     1,456
                                                                                                                                    1 456     /
                                                                                                                                             n/a     N
                                                                                                                                                     No      N/A    N/A


                                                                                              340   100%                                                     37    10.90%
  7       The Abbey At               4.0 miles      Garden          Market      2BR / 2BA     N/A    N/A       Market      $770     1,140    n/a     No      N/A    N/A
          Ridgewood Plantation
          4911 Signature Dr                       (3 stories)                   3BR / 2BA     N/A    N/A       Market      $862     1,315    n/a     No      N/A    N/A
          Myrtle Beach, SC 29579                     1998

          Horry County
                                                                                              180   100%                                                     24    13.30%
                                                                                                            UNIT MATRIX REPORT

           2BR / 2BA               Legacy Apartments I (as Proposed)   Bells Bay Landing   Crabtree Commons        Legacy Apartments II   Flintlake Apartment Homes   Patriot's Hollow    River Landing       The Abbey At Ridgewood Plantation
             Comp #                            Subject                          1                  2                        3                          4                      5                  6                            7
      Distance from Subject                      n/a                           n/a                n/a                      n/a                        n/a                    n/a                n/a                          n/a

                                                                                                                     Unit Types
             Market
         Bath/Bedroom                              --                         --                    --                  2BR / 2BA                 2BR / 2BA              2BR / 2BA          2BR / 2BA                     2BR / 2BA
        Base Rent/Month                            --                         --                    --                    $625                    $729 - $759              $825             $620 - $650                     $815
         Unit GLA (SF)                             --                         --                    --                    1,080                  1,086 - 1,145             N/A              950 - 1,035                     1,140
    Adjusted Utility Base Rent                     --                         --                    --                    $625                    $697 - $727              $752             $620 - $650                     $725

             @50%
         Bath/Bedroom                         2BR / 2BA                       --               2BR / 2BA                2BR / 2BA                      --                    --                  --                            --
        Base Rent/Month                         $480                          --                 $365                     $479                         --                    --                  --                            --
         Unit GLA (SF)                          1,080                         --                  926                     1,080                        --                    --                  --                            --
    Adjusted Utility Base Rent                  $480                          --                 $365                     $479                         --                    --                  --                            --

             @60%
         Bath/Bedroom                         2BR / 2BA                       --               2BR / 2BA                2BR / 2BA                      --                    --                  --                            --
        Base Rent/Month                         $595                          --                 $465                     $595                         --                    --                  --                            --
         Unit GLA (SF)                          1,080                         --                  976                     1,080                        --                    --                  --                            --
    Adjusted Utility Base Rent                  $595                          --                 $465                     $525                         --                    --                  --                            --

                                                                                                                 Property Information
         Property Type                     Garden (3 stories)              Garden           Garden (2 stories)       Garden (3 stories)        Garden (2 stories)     Garden (3 stories) Garden (3 stories)            Garden (3 stories)
            Year Built                        1998 / n/a                  2000 / n/a           2007 / n/a                1999 / n/a               1998 / n/a             2009 / n/a         2002 / n/a                    1998 / n/a
   Market (Conv.)/Subsidy Type              @50%, @60%                   @50%, @60%          @50%, @60%            @50%, @60%, Market              Market                 Market             Market                        Market

                                                                                                                   Unit Information
           Total Units                            42                          0                   N/A                        54                      N/A                     42                 N/A                          N/A
            Vacant                               N/A                          0                    0                          5                      N/A                      3                 N/A                          N/A
          Vacancy Rate                           N/A                         N/A                  N/A                      9.30%                     N/A                   7.10%                N/A                          N/A

                                                                                                                       Utilities
               A/C                              central                     central              central                  central                   central                central             central                      central
                                                 tenant                      tenant               tenant                   tenant                    tenant               landlord              tenant                       tenant
             Cooking                            electric                    electric             electric                 electric                  electric               electric            electric                     electric
                                                 tenant                      tenant               tenant                   tenant                    tenant               landlord              tenant                       tenant
           Water Heat                           electric                    electric             electric                 electric                  electric               electric            electric                     electric
                                                 tenant                      tenant               tenant                   tenant                    tenant               landlord              tenant                       tenant
               Heat                             electric                    electric             electric                 electric                  electric               electric            electric                     electric
                                                 tenant                      tenant               tenant                   tenant                    tenant               landlord              tenant                       tenant
          Other Electric                         tenant                      tenant               tenant                   tenant                    tenant                 tenant              tenant                       tenant
             Water                               tenant                      tenant               tenant                   tenant                  landlord               landlord              tenant                       tenant
             Sewer                               tenant                      tenant               tenant                   tenant                  landlord               landlord              tenant                       tenant
         Trash Collection                      landlord                    landlord               tenant                 landlord                  landlord               landlord            landlord                      tenant

                                                                                                                  In-Unit Amenities
          Balcony/Patio                           yes                         no                   yes                     yes                        yes                    yes                no                            yes
              Blinds                              yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
      Cable/Satellite/Internet                    no                          no                   yes                     no                         no                     no                 no                            no
        Carpet/Hardwood                           no                          no                   yes                     no                         no                     no                 no                            no
            Carpeting                             yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
           Central A/C                            yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
           Coat Closet                            no                          yes                  yes                     no                         yes                    no                 yes                           yes
           Dishwasher                             yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
        Exterior Storage                          no                          no                   no                      no                         yes                    no                 yes                           yes
           Ceiling Fan                            yes                         no                   yes                     no                         yes                    no                 yes                           no
        Garbage Disposal                          yes                         yes                  no                      yes                        yes                    yes                yes                           yes
           Microwave                              yes                         no                   yes                     no                         no                     no                 yes                           no
              Oven                                yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
           Refrigerator                           yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
         Vaulted Ceilings                         no                          no                   no                      no                         yes                    no                 no                            no
         Walk-In Closet                           no                          no                   yes                     no                         yes                    no                 no                            yes
          Washer/Dryer                            no                          no                   no                      no                         yes                    yes                no                            no
      Washer/Dryer hookup                         yes                         yes                  yes                     yes                        no                     yes                yes                           yes

                                                                                                                 Property Amenities
          Basketball Court                        no                          no                   no                      no                         no                     yes                 no                           no
   Business Center/Computer Lab                   no                          no                   yes                     no                         yes                    no                  no                           no
              Car Wash                            no                          no                   no                      no                         yes                    no                  no                           no
Clubhouse/Meeting Room/Community
                Room                              yes                         yes                  yes                      yes                      yes                     yes                no                            yes
          Exercise Facility                       no                          no                   yes                      yes                      yes                     yes               yes                            yes
               Garage                             no                          no                   no                       no                       yes                     no                yes                            no
          Central Laundry                         yes                         yes                  yes                      yes                       no                     no                yes                            yes
         Off-Street Parking                       yes                         yes                  yes                      yes                      yes                     yes               yes                            yes
        On-Site Management                        yes                         yes                  yes                      yes                      yes                     yes               yes                            yes
             Picnic Area                          no                          no                   no                       no                        no                     yes               yes                            no
             Playground                           no                          yes                  no                       yes                       no                     no                yes                            no
            Sport Court                           no                          no                   no                       no                       yes                     no                 no                            no
          Swimming Pool                           no                          yes                  no                       no                        no                     no                yes                            yes
            Tennis Court                          no                          no                   no                       no                        no                     no                yes                            yes
          Volleyball Court                        no                          no                   no                       no                        no                     no                 no                            yes
             Garage Fee                            --                          --                   --                       --                     $50.00                    --              $95.00                           --

                                                                                                                       Services

                                                                                                                       Security
              Patrol                              no                          no                   no                       no                        no                     yes                yes                           no

                                                                                                                 Premium Amenities

                                                                                                                   Other Amenities
              Other                               n/a                         n/a                  n/a                     n/a                        n/a                    n/a                n/a                           n/a
                                                                                                            UNIT MATRIX REPORT

           3BR / 2BA               Legacy Apartments I (as Proposed)   Bells Bay Landing   Crabtree Commons        Legacy Apartments II   Flintlake Apartment Homes   Patriot's Hollow    River Landing       The Abbey At Ridgewood Plantation
             Comp #                            Subject                          1                  2                        3                          4                      5                  6                            7
      Distance from Subject                      n/a                           n/a                n/a                      n/a                        n/a                    n/a                n/a                          n/a

                                                                                                                     Unit Types
             Market
         Bath/Bedroom                              --                         --                    --                  3BR / 2BA                3BR / 2.5BA             3BR / 2BA          3BR / 2BA                     3BR / 2BA
        Base Rent/Month                            --                         --                    --                    $725                      $989                   $1,125             $800                          $915
         Unit GLA (SF)                             --                         --                    --                    1,337                    1,508                    N/A               1,456                         1,315
    Adjusted Utility Base Rent                     --                         --                    --                    $725                      $953                   $1,037             $800                          $825

             @50%
         Bath/Bedroom                         3BR / 2BA                   3BR / 2BA            3BR / 2BA                3BR / 2BA                      --                    --                  --                            --
        Base Rent/Month                         $560                        $505                 $390                     $549                         --                    --                  --                            --
         Unit GLA (SF)                          1,322                       1,153                1,197                    1,337                        --                    --                  --                            --
    Adjusted Utility Base Rent                  $560                        $505                 $390                     $525                         --                    --                  --                            --

             @60%
         Bath/Bedroom                         3BR / 2BA                   3BR / 2BA            3BR / 2BA                3BR / 2BA                      --                    --                  --                            --
        Base Rent/Month                         $650                        $644                 $490                     $683                         --                    --                  --                            --
         Unit GLA (SF)                          1,322                       1,153                1,197                    1,337                        --                    --                  --                            --
    Adjusted Utility Base Rent                  $650                        $644                 $490                     $525                         --                    --                  --                            --

                                                                                                                 Property Information
         Property Type                     Garden (3 stories)              Garden           Garden (2 stories)       Garden (3 stories)        Garden (2 stories)     Garden (3 stories) Garden (3 stories)            Garden (3 stories)
            Year Built                        1998 / n/a                  2000 / n/a           2007 / n/a                1999 / n/a               1998 / n/a             2009 / n/a         2002 / n/a                    1998 / n/a
   Market (Conv.)/Subsidy Type              @50%, @60%                   @50%, @60%          @50%, @60%            @50%, @60%, Market              Market                 Market             Market                        Market

                                                                                                                   Unit Information
           Total Units                            48                         N/A                  N/A                        58                      64                       6                 N/A                          N/A
            Vacant                               N/A                          1                    0                          5                      N/A                      0                 N/A                          N/A
          Vacancy Rate                           N/A                         N/A                  N/A                      8.60%                     N/A                   0.00%                N/A                          N/A

                                                                                                                       Utilities
               A/C                              central                     central              central                  central                   central                central             central                      central
                                                 tenant                      tenant               tenant                   tenant                    tenant               landlord              tenant                       tenant
             Cooking                            electric                    electric             electric                 electric                  electric               electric            electric                     electric
                                                 tenant                      tenant               tenant                   tenant                    tenant               landlord              tenant                       tenant
           Water Heat                           electric                    electric             electric                 electric                  electric               electric            electric                     electric
                                                 tenant                      tenant               tenant                   tenant                    tenant               landlord              tenant                       tenant
               Heat                             electric                    electric             electric                 electric                  electric               electric            electric                     electric
                                                 tenant                      tenant               tenant                   tenant                    tenant               landlord              tenant                       tenant
          Other Electric                         tenant                      tenant               tenant                   tenant                    tenant                 tenant              tenant                       tenant
             Water                               tenant                      tenant               tenant                   tenant                  landlord               landlord              tenant                       tenant
             Sewer                               tenant                      tenant               tenant                   tenant                  landlord               landlord              tenant                       tenant
         Trash Collection                      landlord                    landlord               tenant                 landlord                  landlord               landlord            landlord                      tenant

                                                                                                                  In-Unit Amenities
          Balcony/Patio                           yes                         no                   yes                     yes                        yes                    yes                no                            yes
              Blinds                              yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
      Cable/Satellite/Internet                    no                          no                   yes                     no                         no                     no                 no                            no
        Carpet/Hardwood                           no                          no                   yes                     no                         no                     no                 no                            no
            Carpeting                             yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
           Central A/C                            yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
           Coat Closet                            no                          yes                  yes                     no                         yes                    no                 yes                           yes
           Dishwasher                             yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
        Exterior Storage                          no                          no                   no                      no                         yes                    no                 yes                           yes
           Ceiling Fan                            yes                         no                   yes                     no                         yes                    no                 yes                           no
        Garbage Disposal                          yes                         yes                  no                      yes                        yes                    yes                yes                           yes
           Microwave                              yes                         no                   yes                     no                         no                     no                 yes                           no
              Oven                                yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
           Refrigerator                           yes                         yes                  yes                     yes                        yes                    yes                yes                           yes
         Vaulted Ceilings                         no                          no                   no                      no                         yes                    no                 no                            no
         Walk-In Closet                           no                          no                   yes                     no                         yes                    no                 no                            yes
          Washer/Dryer                            no                          no                   no                      no                         yes                    yes                no                            no
      Washer/Dryer hookup                         yes                         yes                  yes                     yes                        no                     yes                yes                           yes

                                                                                                                 Property Amenities
          Basketball Court                        no                          no                   no                      no                         no                     yes                 no                           no
   Business Center/Computer Lab                   no                          no                   yes                     no                         yes                    no                  no                           no
              Car Wash                            no                          no                   no                      no                         yes                    no                  no                           no
Clubhouse/Meeting Room/Community
                Room                              yes                         yes                  yes                      yes                      yes                     yes                no                            yes
          Exercise Facility                       no                          no                   yes                      yes                      yes                     yes               yes                            yes
               Garage                             no                          no                   no                       no                       yes                     no                yes                            no
          Central Laundry                         yes                         yes                  yes                      yes                       no                     no                yes                            yes
         Off-Street Parking                       yes                         yes                  yes                      yes                      yes                     yes               yes                            yes
        On-Site Management                        yes                         yes                  yes                      yes                      yes                     yes               yes                            yes
             Picnic Area                          no                          no                   no                       no                        no                     yes               yes                            no
             Playground                           no                          yes                  no                       yes                       no                     no                yes                            no
            Sport Court                           no                          no                   no                       no                       yes                     no                 no                            no
          Swimming Pool                           no                          yes                  no                       no                        no                     no                yes                            yes
            Tennis Court                          no                          no                   no                       no                        no                     no                yes                            yes
          Volleyball Court                        no                          no                   no                       no                        no                     no                 no                            yes
             Garage Fee                            --                          --                   --                       --                     $50.00                    --              $95.00                           --

                                                                                                                       Services

                                                                                                                       Security
              Patrol                              no                          no                   no                       no                        no                     yes                yes                           no

                                                                                                                 Premium Amenities

                                                                                                                   Other Amenities
              Other                               n/a                         n/a                  n/a                     n/a                        n/a                    n/a                n/a                           n/a
                               RENT AND SQUARE FOOTAGE RANKING -- All rents adjusted for utilities and concessions extracted from the market.
                         Effective Rent Date:                 Apr-10                     Units Surveyed:                 1065            Weighted Occupancy:   91.80%
                                                                                           Market Rate                   845                 Market Rate       91.00%
                                                                                            Tax Credit                   220                  Tax Credit       95.00%
                               Two Bedrooms Two Bath                                       Three Bedrooms Two Bath                                        -

                               Property                       Average                        Property                   Average                 Property       Average
      RENT                  Patriot's Hollow                   $752                       Patriot's Hollow               $1,037
                      Flintlake Apartment Homes                $727             Flintlake Apartment Homes (2.5BA)         $953
                  The Abbey At Ridgewood Plantation            $725             The Abbey At Ridgewood Plantation         $825
                      Flintlake Apartment Homes                $697                        River Landing                  $800
                             River Landing                     $650                 Legacy Apartments II * (M)            $725
                      Legacy Apartments II * (M)               $625         Legacy Apartments I (as Proposed) * (60%)    $650
                            River Landing                      $620                 Bells Bay Landing * (60%)            $644
              Legacy Apartments I (as Proposed) * (60%)        $595         Legacy Apartments I (as Proposed) * (50%)    $560
                     Legacy Apartments II * (60%)              $525                Legacy Apartments II * (50%)          $525
              Legacy Apartments I (as Proposed) * (50%)        $480                Legacy Apartments II * (60%)          $525
                     Legacy Apartments II * (50%)              $479                 Bells Bay Landing * (50%)            $505
                      Crabtree Commons * (60%)                 $465                 Crabtree Commons * (60%)             $490
                      Crabtree Commons * (50%)                 $365                 Crabtree Commons * (50%)             $390

    SQUARE
                      Flintlake Apartment Homes                1,145            Flintlake Apartment Homes (2.5BA)        1,508
   FOOTAGE
                  The Abbey At Ridgewood Plantation            1,140                      River Landing                  1,456
                      Flintlake Apartment Homes                1,086               Legacy Apartments II * (50%)          1,337
              Legacy Apartments I (as Proposed) * (50%)        1,080               Legacy Apartments II * (60%)          1,337
              Legacy Apartments I (as Proposed) * (60%)        1,080                Legacy Apartments II * (M)           1,337
                     Legacy Apartments II * (50%)              1,080        Legacy Apartments I (as Proposed) * (50%)    1,322

                     Legacy Apartments II * (60%)              1,080        Legacy Apartments I (as Proposed) * (60%)    1,322
                      Legacy Apartments II * (M)               1,080            The Abbey At Ridgewood Plantation        1,315
                             River Landing                     1,035                Crabtree Commons * (50%)             1,197
                      Crabtree Commons * (60%)                  976                 Crabtree Commons * (60%)             1,197
                             River Landing                      950                 Bells Bay Landing * (50%)            1,153
                      Crabtree Commons * (50%)                  926                 Bells Bay Landing * (60%)            1,153
                            Patriot's Hollow                    N/A                       Patriot's Hollow                N/A

   RENT PER
SQUARE FOOT                 River Landing                      $0.65            Flintlake Apartment Homes (2.5BA)        $0.63

                      Flintlake Apartment Homes                $0.64            The Abbey At Ridgewood Plantation        $0.63
                  The Abbey At Ridgewood Plantation            $0.64                Bells Bay Landing * (60%)            $0.56
                      Flintlake Apartment Homes                $0.63                      River Landing                  $0.55
                             River Landing                     $0.63                Legacy Apartments II * (M)           $0.54
                      Legacy Apartments II * (M)               $0.58        Legacy Apartments I (as Proposed) * (60%)    $0.49
              Legacy Apartments I (as Proposed) * (60%)        $0.55                Bells Bay Landing * (50%)            $0.44
                     Legacy Apartments II * (60%)              $0.49        Legacy Apartments I (as Proposed) * (50%)    $0.42
                      Crabtree Commons * (60%)                 $0.48                Crabtree Commons * (60%)             $0.41
              Legacy Apartments I (as Proposed) * (50%)        $0.44               Legacy Apartments II * (50%)          $0.39
                     Legacy Apartments II * (50%)              $0.44               Legacy Apartments II * (60%)          $0.39
                      Crabtree Commons * (50%)                 $0.39                Crabtree Commons * (50%)             $0.33
                            Patriot's Hollow                    N/A                       Patriot's Hollow                N/A
                                                    PROPERTY PROFILE REPORT
                                                                    Bells Bay Landing
Effective Rent Date            4/06/2010

Location                       2321 Wright Boulevard
                               Conway, SC 29526
                               Horry County
Distance                       N/A
Units                          60
Vacant Units                   1
Vacancy Rate                   1.7%
Type                           Garden
Year Built/Renovated           2000 / N/A
Marketing Began                N/A
Leasing Began                  N/A
Last Unit Leased               N/A
Major Competitors              Blackwater Cove, Crabtree Commons
Tenant Characteristics         Mostly families
Contact Name                   Regina
Phone                          843.397.7024


Market Information                                                                  Utilities
Program                        @50%, @60%                                           A/C                        not included -- central
Annual Turnover Rate           10%                                                  Cooking                    not included -- electric
Units/Month Absorbed           N/A                                                  Water Heat                 not included -- electric
HCV Tenants                    20%                                                  Heat                       not included -- electric
Leasing Pace                   Prelease (3-5 days)                                  Other Electric             not included
Annual Chg. in Rent            None                                                 Water                      not included
Concession                     None                                                 Sewer                      not included
                                                                                    Trash Collection           included


Unit Mix (face rent)
   Beds         Baths       Type           Units      Size (SF)     Rent      Concession   Restriction    Waiting     Vacant           Vacancy Max Rent?     Range
                                                                              (monthly)                    List                         Rate
     3               2      Garden          48          1,153       $505         $0             @50%       Yes              1           2.1%      no          None
     3               2      Garden         N/A          1,153       $644         $0             @60%       Yes              0           N/A       no          None
     4               2      Garden          12          1,353       $563         $0             @50%       Yes              0           0.0%      no          None
     4               2      Garden         N/A          1,353       $718         $0             @60%       Yes              0           N/A       no          None


Unit Mix
@50%            Face Rent    Conc.    Concd. Rent        Util.    Adj. Rent         @60%           Face Rent        Conc.       Concd. Rent     Util.   Adj. Rent
3BR / 2BA            $505      $0          $505           $0        $505            3BR / 2BA          $644          $0                $644      $0        $644
4BR / 2BA            $563      $0          $563           $0        $563            4BR / 2BA          $718          $0                $718      $0        $718


Amenities
In-Unit                                                                             Security                                     Services
Blinds                                 Carpeting                                    None                                        None
Central A/C                            Coat Closet
Dishwasher                             Garbage Disposal
Oven                                   Refrigerator
Washer/Dryer hookup


Property                                                                            Premium                                      Other
Clubhouse/Meeting                      Central Laundry                              None                                         None
Off-Street Parking                     On-Site Management
Playground                             Swimming Pool




                                                   © Novogradac & Company LLP 2008 - All Rights Reserved.
Bells Bay Landing, continued

Comments
The property manager could not provide a breakdown by unit type but indicated that there are 48 one- and 12 two-bedroom units and that there are 49 units at 50
percent AMI and 11 units at 60 percent AMI. Management just purged the waiting list; therefore, the waiting list currently consists of 10 households. The property
manager reported that there is demand for LIHTC housing in Conway but not in the property's neighborhood as there are two other LIHTC properties within close
proximity to Bells Bay Landing.




                                                  © Novogradac & Company LLP 2008 - All Rights Reserved.
Bells Bay Landing, continued

Trend Report
Vacancy Rates
4Q04               1Q06            1Q08              2Q10
5.0%               5.0%            5.0%              1.7%


Trend: @50%                                                                        Trend: @60%
3BR / 2BA                                                                         3BR / 2BA
Year QT     Vac.      Face Rent      Conc.     Concd. Rent        Adj. Rent       Year QT       Vac.       Face Rent     Conc.     Concd. Rent        Adj. Rent
2004   4    6.2%          $520         $0          $520              $520         2004     4     N/A          $635         $0           $635             $635
2006   1    6.2%          $507         $0          $507              $507         2006     1     N/A          $641         $0           $641             $641
2008   1    N/A           $507         $0          $507              $507         2008     1     N/A          $641         $0           $641             $641
2010   2    2.1%          $505         $0          $505              $505         2010     2     N/A          $644         $0           $644             $644


4BR / 2BA                                                                         4BR / 2BA
Year QT     Vac.      Face Rent      Conc.     Concd. Rent        Adj. Rent       Year QT       Vac.       Face Rent     Conc.     Concd. Rent        Adj. Rent
2004   4    0.0%          $575         $0          $575              $575         2004     4     N/A          $695         $0           $695             $695
2006   1    0.0%          $566         $0          $566              $566         2006     1     N/A          $715         $0           $715             $715
2008   1    N/A           $566         $0          $566              $566         2008     1     N/A          $715         $0           $715             $715
2010   2    0.0%          $563         $0          $563              $563         2010     2     N/A          $718         $0           $718             $718




Trend: Comments
4Q04        Bells Bay Landing Apartments is a LIHTC property offering 60 units. The three and four-bedroom units are offered at 50 and 60 percent of AMI. There
            are no concessions being offered and the rents have increased 1-2 percent in the last year. The leasing pace is typically within a week and turnover is
            approximately 20 percent according to management. Currently, the occupancy rate is 95 percent. Reportedly, occupancy rates typically range between 95
            to 100 percent occupied through out the year.

1Q06        Bells Bay Landing Apartments is a LIHTC property offering 60 units. The three and four-bedroom units are offered at 50 and 60 percent of AMI. There
            are no concessions being offered. We previously interviewed this property in December 2004. Since then the rents have slightly decreased due to high
            utility allowances. The property is currently charging the maximum allowable rents. The leasing pace is typically within a week and turnover is
            approximately 20 percent according to management. Currently, the occupancy rate is 95 percent. Reportedly, occupancy rates typically range between 95
            to 100 percent occupied through out the year.


1Q08        Contact sis not have any further information at this time.

2Q10        The property manager could not provide a breakdown by unit type but indicated that there are 48 one- and 12 two-bedroom units and that there are 49 units
            at 50 percent AMI and 11 units at 60 percent AMI. Management just purged the waiting list; therefore, the waiting list currently consists of 10 households.
            The property manager reported that there is demand for LIHTC housing in Conway but not in the property's neighborhood as there are two other LIHTC
            properties within close proximity to Bells Bay Landing.




                                                 © Novogradac & Company LLP 2008 - All Rights Reserved.
                                                    PROPERTY PROFILE REPORT
                                                                   Crabtree Commons
Effective Rent Date            3/31/2010

Location                       301 El Bethel Rd
                               Conway, SC 29527
                               Horry County
Distance                       N/A
Units                          48
Vacant Units                   0
Vacancy Rate                   0.0%
Type                           Garden (2 stories)
Year Built/Renovated           2007 / N/A
Marketing Began                11/01/2007
Leasing Began                  3/01/2008
Last Unit Leased               11/10/2007
Major Competitors              N/A
Tenant Characteristics         Small families
Contact Name                   Erica
Phone                          (843) 369-7367


Market Information                                                                    Utilities
Program                         @50%, @60%                                            A/C                         not included -- central
Annual Turnover Rate            13%                                                   Cooking                     not included -- electric
Units/Month Absorbed            N/A                                                   Water Heat                  not included -- electric
HCV Tenants                     2%                                                    Heat                        not included -- electric
Leasing Pace                    3 days                                                Other Electric              not included
Annual Chg. in Rent             Prices decreased in January 2010                      Water                       not included
Concession                      None                                                  Sewer                       not included
                                                                                      Trash Collection            not included


Unit Mix (face rent)
   Beds       Baths         Type           Units      Size (SF)     Rent      Concession    Restriction     Waiting      Vacant      Vacancy Max Rent?       Range
                                                                              (monthly)                      List                     Rate
     2          2          Garden           24           926        $365         $0               @50%       Yes              0       0.0%      no           None
                          (2 stories)
     2          2          Garden          N/A           976        $465         $0               @60%          Yes           0        N/A         no        None
                          (2 stories)
     3          2          Garden           24          1,197       $390         $0               @50%          Yes           0        0.0%        no        None
                          (2 stories)
     3          2          Garden          N/A          1,197       $490         $0               @60%          No            0        N/A         no        None
                          (2 stories)


Unit Mix
@50%          Face Rent      Conc.      Concd. Rent      Util.    Adj. Rent           @60%           Face Rent        Conc.       Concd. Rent   Util.   Adj. Rent
2BR / 2BA        $365           $0         $365           $0        $365              2BR / 2BA          $465           $0           $465        $0       $465
3BR / 2BA        $390           $0         $390           $0        $390              3BR / 2BA          $490           $0           $490        $0       $490




                                                   © Novogradac & Company LLP 2008 - All Rights Reserved.
Crabtree Commons, continued

Amenities
In-Unit                                                                            Security                                  Services
Balcony/Patio                            Blinds                                    None                                    None
Cable/Satellite/Internet                 Carpet/Hardwood
Carpeting                                Central A/C
Coat Closet                              Dishwasher
Ceiling Fan                              Microwave
Oven                                     Refrigerator
Walk-In Closet                           Washer/Dryer hookup


Property                                                                           Premium                                   Other
Business Center/Computer Lab             Clubhouse/Meeting                         None                                      None
Exercise Facility                        Central Laundry
Off-Street Parking                       On-Site Management


Comments
The contact indicated that the property has remained at 100 percent occupancy for a few months. The property provides cable for an additional $40 per month. There
are approximately 10 to 15 persons on the waiting list.




                                                 © Novogradac & Company LLP 2008 - All Rights Reserved.
Crabtree Commons, continued

Trend Report
Vacancy Rates
2Q09               1Q10
4.2%               0.0%


Trend: @50%                                                                         Trend: @60%
2BR / 2BA                                                                          2BR / 2BA
Year QT     Vac.      Face Rent     Conc.     Concd. Rent        Adj. Rent         Year QT       Vac.       Face Rent      Conc.     Concd. Rent       Adj. Rent
2009   2    0.0%          $385        $0           $385             $385           2009    2     N/A           $485          $0          $485             $485
2010   1    0.0%          $365        $0           $365             $365           2010    1     N/A           $465          $0          $465             $465


3BR / 2BA                                                                          3BR / 2BA
Year QT     Vac.      Face Rent     Conc.     Concd. Rent        Adj. Rent         Year QT       Vac.       Face Rent      Conc.     Concd. Rent       Adj. Rent
2009   2    0.0%          $425        $0           $425             $425           2009    2     N/A           $525          $0          $525             $525
2010   1    0.0%          $390        $0           $390             $390           2010    1     N/A           $490          $0          $490             $490




Trend: Comments
2Q09        The rents listed in the unit mix include cable which is an additional monthly fee of $35. According to management, all residents residing at the property
            have opted to include this in their rent.

            The property began pre-leasing units on November 1, 2007. According to the property manager, all units were pre-leased within 10 day even though the
            property did not open until March 2008. This indicates a strong need for affordable housing units in Conway.


1Q10        The contact indicated that the property has remained at 100 percent occupancy for a few months. The property provides cable for an additional $40 per
            month. There are approximately 10 to 15 persons on the waiting list.




                                                © Novogradac & Company LLP 2008 - All Rights Reserved.
                                                     PROPERTY PROFILE REPORT
                                                                   Legacy Apartments II
Effective Rent Date             4/06/2010

Location                        204 Legacy Way
                                Conway, SC 29527
                                Horry County
Distance                        N/A
Units                           112
Vacant Units                    10
Vacancy Rate                    8.9%
Type                            Garden (3 stories)
Year Built/Renovated            1999 / N/A
Marketing Began                 N/A
Leasing Began                   N/A
Last Unit Leased                N/A
Major Competitors               Legacy I, Crabtree Commons, Bells Bay Landing

Tenant Characteristics          Majority families; Less than 10% from Myrtle
                                Beach; Some students
Contact Name                    Jessica, Patrick
Phone                           (843) 347-2185


Market Information                                                                     Utilities
Program                          @50%, @60%, Market                                    A/C                        not included -- central
Annual Turnover Rate             25%                                                   Cooking                    not included -- electric
Units/Month Absorbed             N/A                                                   Water Heat                 not included -- electric
HCV Tenants                      20%                                                   Heat                       not included -- electric
Leasing Pace                     2-4 weeks                                             Other Electric             not included
Annual Chg. in Rent              LIHTC dec.; MKT inc.                                  Water                      not included
Concession                       Reduced rents on select unit types                    Sewer                      not included
                                                                                       Trash Collection           included


Unit Mix (face rent)
   Beds        Baths         Type           Units      Size (SF)      Rent     Concession    Restriction     Waiting     Vacant       Vacancy Max Rent?       Range
                                                                               (monthly)                      List                      Rate
     2          2           Garden           13          1,080        $479        $0               @50%       No               2       15.4%    N/A           None
                           (3 stories)
     2          2           Garden           11          1,080        $595        $70              @60%          No            1        9.1%       N/A        None
                           (3 stories)
     2          2           Garden           30          1,080        $625        $0           Market            No            2        6.7%       N/A        None
                           (3 stories)
     3          2           Garden           12          1,337        $549        $24              @50%          No            1        8.3%       N/A        None
                           (3 stories)
     3          2           Garden           24          1,337        $683       $158              @60%          No            1        4.2%       N/A        None
                           (3 stories)
     3          2           Garden           22          1,337        $725        $0           Market            No            3       13.6%       N/A        None
                           (3 stories)


Unit Mix
@50%           Face Rent      Conc.      Concd. Rent      Util.    Adj. Rent           @60%           Face Rent        Conc.       Concd. Rent   Util.   Adj. Rent
2BR / 2BA        $479            $0         $479           $0         $479             2BR / 2BA          $595          $70           $525        $0       $525
3BR / 2BA        $549           $24         $525           $0         $525             3BR / 2BA          $683         $158           $525        $0       $525


Market         Face Rent      Conc.      Concd. Rent      Util.    Adj. Rent
2BR / 2BA        $625            $0         $625           $0         $625
3BR / 2BA        $725            $0         $725           $0         $725




                                                    © Novogradac & Company LLP 2008 - All Rights Reserved.
Legacy Apartments II, continued

Amenities
In-Unit                                                                            Security                                  Services
Balcony/Patio                            Blinds                                    None                                    None
Carpeting                                Central A/C
Dishwasher                               Garbage Disposal
Oven                                     Refrigerator
Washer/Dryer hookup


Property                                                                           Premium                                   Other
Clubhouse/Meeting                        Exercise Facility                         None                                      None
Central Laundry                          Off-Street Parking
On-Site Management                       Playground


Comments
Management indicated that the property has remained 88 percent occupied or greater since Fall 2009. Turnover has increased due to job loss and reduction in work
hours.




                                                  © Novogradac & Company LLP 2008 - All Rights Reserved.
                                                       PROPERTY PROFILE REPORT
                                                                Flintlake Apartment Homes
Effective Rent Date              3/26/2010

Location                         650 West Flintlake Court
                                 Myrtle Beach, SC 29579
                                 Horry County
Distance                         N/A
Units                            272
Vacant Units                     22
Vacancy Rate                     8.1%
Type                             Garden (2 stories)
Year Built/Renovated             1998 / N/A
Marketing Began                  N/A
Leasing Began                    N/A
Last Unit Leased                 N/A
Major Competitors                Meadow Pointe
Tenant Characteristics           Mixture of Tenants; 10% Seniors
Contact Name                     Leasing agent
Phone                            843.236.5735


Market Information                                                                          Utilities
Program                           Market                                                    A/C                     not included -- central
Annual Turnover Rate              N/A                                                       Cooking                 not included -- electric
Units/Month Absorbed              N/A                                                       Water Heat              not included -- electric
HCV Tenants                       0%                                                        Heat                    not included -- electric
Leasing Pace                      1-2 months                                                Other Electric          not included
Annual Chg. in Rent               Rents change daily                                        Water                   included
Concession                        Reduced move-in costs                                     Sewer                   included
                                                                                            Trash Collection        included


Unit Mix (face rent)
   Beds       Baths           Type            Units       Size (SF)     Rent        Concession    Restriction   Waiting    Vacant     Vacancy Max Rent?   Range
                                                                                    (monthly)                    List                  Rate
     1          1            Garden            48           810         $669           $0           Market       No         N/A        N/A      N/A       None
                            (2 stories)
     2          2            Garden            145         1,086        $729           $0           Market        No        N/A          N/A     N/A      None
                            (2 stories)
     2          2            Garden           N/A          1,145        $759           $0           Market        No        N/A          N/A     N/A      None
                            (2 stories)
     3         2.5           Garden            64          1,508        $989           $0           Market        No        N/A          N/A     N/A      None
                            (2 stories)


Unit Mix
Market        Face Rent        Conc.       Concd. Rent      Util.     Adj. Rent
1BR / 1BA        $669             $0           $669         -$29         $640
2BR / 2BA     $729 - $759         $0        $729 - $759     -$32      $697 - $727
3BR / 2.5BA      $989             $0           $989         -$36         $953




                                                      © Novogradac & Company LLP 2008 - All Rights Reserved.
Flintlake Apartment Homes, continued

Amenities
In-Unit                                                                              Security                                   Services
Balcony/Patio                             Blinds                                     None                                     None
Carpeting                                 Central A/C
Coat Closet                               Dishwasher
Exterior Storage                          Ceiling Fan
Garbage Disposal                          Oven
Refrigerator                              Vaulted Ceilings
Walk-In Closet                            Washer/Dryer


Property                                                                             Premium                                    Other
Business Center/Computer Lab              Car Wash                                   None                                       None
Clubhouse/Meeting                         Exercise Facility
Garage                                    Off-Street Parking
On-Site Management                        Sport Court


Comments
The contact reported that the property was now using Lease Rent Optimizer software, which has significantly increased its occupancy as it adjusts daily to the market.
This is why the one-bedroom units are priced above some of the two-bedroom units. With this system, rents are changed every week based on supply and demand.
Overall, rents are down roughly 10 to 20 percent from the rents reported back in April 2009. Now the property reports 94 percent occupancy and is 96 percent pre-
leased. The contact noted a decline in occupancy in the fall when many layoffs occured, but occupancy has recovered since. The contact stated that it was still a soft
market, as evidenced by the low rents, but is still constantly changing. The property does not accept voucher tenants. The contact did not know the annual turnover rate.




                                                   © Novogradac & Company LLP 2008 - All Rights Reserved.
Flintlake Apartment Homes, continued

Trend Report
Vacancy Rates
1Q08                 2Q09             4Q09              2Q10
6.2%                 14.0%            5.9%              8.1%


Trend: Market
1BR / 1BA
Year QT       Vac.      Face Rent      Conc.       Concd. Rent      Adj. Rent
2008   1      N/A            $725        $60           $665             $636
2009   2      N/A            $745        $62           $683             $654
2009   4      N/A            $679        $0            $679             $650
2010   2      N/A            $669        $0            $669             $640


2BR / 2BA
Year QT       Vac.      Face Rent      Conc.       Concd. Rent      Adj. Rent
2008   1      N/A       $825 - $865   $69 - $72     $756 - $793     $724 - $761
2009   2      N/A       $835 - $875   $73 - $139    $696 - $802     $664 - $770
2009   4      N/A       $659 - $689      $0         $659 - $689     $627 - $657
2010   2      N/A       $729 - $759      $0         $729 - $759     $697 - $727


3BR / 2.5BA
Year QT       Vac.      Face Rent      Conc.       Concd. Rent      Adj. Rent
2008   1      N/A            $1,035      $86           $949             $913
2009   2      N/A            $1,035     $173           $862             $826
2009   4      N/A            $869        $0            $869             $833
2010   2      N/A            $989        $0            $989             $953




Trend: Comments
1Q08          Contact was unaware of annual turnover rate.

2Q09          The rent concession currently being offered varies depending upon the unit type. One-bedroom units and larger two-bedroom units have a one month free
              concession. Smaller two-bedroom units and three-bedroom units currently have a two month rent fre concession. As a result, the rent changes vary upon the
              unit type. One-bedroom units experienced a 2.7 percent increase, which is extremely rare in the current state of the market. Larger two-bedroom units
              remained unchanged. However, smaller two-bedroom units experienced a 7.9 percent decrease and three-bedroom units decreased 10.1 percent.


4Q09          The contact reported that the property was now using Lease Rent Optimizer software which has significantly increased its occupancy and reducing its rents.
              This is why the one-bedroom units are priced above some of the two-bedroom units. With this system, rents are changed every week based on supply and
              demand. Overall, rents are down roughly 10 to 20 percent from the rents reported back in April 2009. Now the property reports 94 percent occupancy and
              is 96 percent preleased. The contact noted a decline in occupancy in the fall when many layoffs occured, but occupancy is back up currently. The contact
              stated that it was still a soft market, as evidenced by the low rents, but is still constantly changing. The property does not accept voucher tenants. The
              contact did not know the annual turnover rate.


2Q10          The contact reported that the property was now using Lease Rent Optimizer software, which has significantly increased its occupancy as it adjusts daily to
              the market. This is why the one-bedroom units are priced above some of the two-bedroom units. With this system, rents are changed every week based on
              supply and demand. Overall, rents are down roughly 10 to 20 percent from the rents reported back in April 2009. Now the property reports 94 percent
              occupancy and is 96 percent pre-leased. The contact noted a decline in occupancy in the fall when many layoffs occured, but occupancy has recovered
              since. The contact stated that it was still a soft market, as evidenced by the low rents, but is still constantly changing. The property does not accept voucher
              tenants. The contact did not know the annual turnover rate.




                                                    © Novogradac & Company LLP 2008 - All Rights Reserved.
                                                      PROPERTY PROFILE REPORT
                                                                        Patriot's Hollow
Effective Rent Date            4/02/2010

Location                       300 Patriot's Hollow Way
                               Conway, SC 29526
                               Horry County
Distance                       N/A
Units                          53
Vacant Units                   3
Vacancy Rate                   5.7%
Type                           Garden (3 stories)
Year Built/Renovated           2009 / N/A
Marketing Began                N/A
Leasing Began                  N/A
Last Unit Leased               N/A
Major Competitors              College campus housing
Tenant Characteristics         60% students
Contact Name                   Ronda Hardee
Phone                          (843) 349-0015


Market Information                                                                      Utilities
Program                         Market                                                  A/C                     included -- central
Annual Turnover Rate            0%                                                      Cooking                 included -- electric
Units/Month Absorbed            4-5                                                     Water Heat              included -- electric
HCV Tenants                     0%                                                      Heat                    included -- electric
Leasing Pace                    In lease up                                             Other Electric          not included
Annual Chg. in Rent             2BR dec. 8% 2009                                        Water                   included
Concession                      None                                                    Sewer                   included
                                                                                        Trash Collection        included


Unit Mix (face rent)
   Beds       Baths         Type           Units        Size (SF)     Rent      Concession    Restriction   Waiting    Vacant     Vacancy Max Rent?   Range
                                                                                (monthly)                    List                  Rate
     1          1          Garden             5            N/A        $700         $0           Market       Yes          0        0.0%     N/A       None
                          (3 stories)
     2          2          Garden            42            N/A        $825         $0           Market       None         3            7.1%   N/A     None
                          (3 stories)
     3          2          Garden             6            N/A       $1,125        $0           Market       None         0            0.0%   N/A     None
                          (3 stories)


Unit Mix
Market        Face Rent      Conc.       Concd. Rent       Util.    Adj. Rent
1BR / 1BA        $700           $0          $700           -$61       $639
2BR / 2BA        $825           $0          $825           -$73       $752
3BR / 2BA       $1,125          $0          $1,125         -$88      $1,037




                                                     © Novogradac & Company LLP 2008 - All Rights Reserved.
Patriot's Hollow, continued

Amenities
In-Unit                                                                               Security                                   Services
Balcony/Patio                             Blinds                                      Patrol                                   None
Carpeting                                 Central A/C
Dishwasher                                Garbage Disposal
Oven                                      Refrigerator
Washer/Dryer                              Washer/Dryer hookup


Property                                                                              Premium                                    Other
Basketball Court                          Clubhouse/Meeting                           None                                       None
Exercise Facility                         Off-Street Parking
On-Site Management                        Picnic Area


Comments
The property manager reported that absorption was slow primarily because the property is set back from the road and because the property opened in the middle of the
school year. The property is located walking distance from Coastal Carolina University and thereofre has a significant student tenancy. However, management
confirmed that the property is not affiliated with the university and does have tenants that are not students or professors. The property manager also indicated that once
prices were lowered from their initial rates at opening, leasing accelerated.




                                                   © Novogradac & Company LLP 2008 - All Rights Reserved.
                                                       PROPERTY PROFILE REPORT
                                                                            River Landing
Effective Rent Date              3/19/2010

Location                         200 River Landing Boulevard
                                 Myrtle Beach, SC 29588
                                 Horry County
Distance                         N/A
Units                            340
Vacant Units                     37
Vacancy Rate                     10.9%
Type                             Garden (3 stories)
Year Built/Renovated             2002 / N/A
Marketing Began                  N/A
Leasing Began                    N/A
Last Unit Leased                 N/A
Major Competitors                Seaside Grove
Tenant Characteristics           15% Seniors
Contact Name                     Misty
Phone                            843.903.3434


Market Information                                                                          Utilities
Program                           Market                                                    A/C                     not included -- central
Annual Turnover Rate              18%                                                       Cooking                 not included -- electric
Units/Month Absorbed              N/A                                                       Water Heat              not included -- electric
HCV Tenants                       N/A                                                       Heat                    not included -- electric
Leasing Pace                      4 months                                                  Other Electric          not included
Annual Chg. in Rent               Rents increased 1% since last year                        Water                   not included
Concession                        Reduced Rents                                             Sewer                   not included
                                                                                            Trash Collection        included


Unit Mix (face rent)
   Beds       Baths           Type            Units       Size (SF)     Rent        Concession    Restriction   Waiting    Vacant     Vacancy Max Rent?   Range
                                                                                    (monthly)                    List                  Rate
     1          1            Garden           N/A           695         $520           $0           Market       No           0        N/A      N/A       None
                            (3 stories)
     1          1            Garden           N/A           771         $550           $0           Market        No          0          N/A     N/A      None
                            (3 stories)
     2          2            Garden           N/A           950         $620           $0           Market        No        N/A          N/A     N/A      None
                            (3 stories)
     2          2            Garden           N/A          1,035        $650           $0           Market        No        N/A          N/A     N/A      None
                            (3 stories)
     3          2            Garden           N/A          1,456        $800           $0           Market        No        N/A          N/A     N/A      None
                            (3 stories)


Unit Mix
Market        Face Rent        Conc.       Concd. Rent      Util.     Adj. Rent
1BR / 1BA     $520 - $550         $0        $520 - $550      $0       $520 - $550
2BR / 2BA     $620 - $650         $0        $620 - $650      $0       $620 - $650
3BR / 2BA        $800             $0           $800          $0          $800




                                                      © Novogradac & Company LLP 2008 - All Rights Reserved.
River Landing, continued

Amenities
In-Unit                                                                             Security                                   Services
Blinds                                    Carpeting                                 Patrol                                   None
Central A/C                               Coat Closet
Dishwasher                                Exterior Storage
Ceiling Fan                               Garbage Disposal
Microwave                                 Oven
Refrigerator                              Washer/Dryer hookup


Property                                                                            Premium                                    Other
Exercise Facility                         Garage                                    None                                       None
Central Laundry                           Off-Street Parking
On-Site Management                        Picnic Area
Playground                                Swimming Pool
Tennis Court


Comments
The contact reported that there were 104 one-bedroom units, 192 two-bedroom units, and 44 three-bedroom units. The contact estimated that the property was
operating at 89 percent occupancy, and estimated that there were no vacant one-bedrooms, and more vacant two-bedrooms than three-bedrooms. The contact indicated
that the occupancy was typical for the property, if not better than average due to the nation-wide recession. The contact indicated there were more moveouts in October
2009 than normal, due to the economy, and that seasonal jobs were harder to find this year.




                                                   © Novogradac & Company LLP 2008 - All Rights Reserved.
River Landing, continued

Trend Report
Vacancy Rates
3Q08               2Q09             4Q09              1Q10
10.3%              15.0%            17.1%             10.9%


Trend: Market
1BR / 1BA
Year QT     Vac.      Face Rent      Conc.       Concd. Rent     Adj. Rent
2008    3   N/A       $635 - $685   $53 - $57     $582 - $628    $582 - $628
2009    2   N/A       $640 - $690   $98 - $106    $542 - $584    $542 - $584
2009    4   N/A       $640 - $690 $106 - $115     $534 - $575    $534 - $575
2010    1   N/A       $520 - $550      $0         $520 - $550    $520 - $550


2BR / 2BA
Year QT     Vac.      Face Rent      Conc.       Concd. Rent     Adj. Rent
2008    3   N/A       $725 - $785   $60 - $65     $665 - $720    $665 - $720
2009    2   N/A       $730 - $790 $112 - $122     $618 - $668    $618 - $668
2009    4   N/A       $730 - $790 $121 - $132     $609 - $658    $609 - $658
2010    1   N/A       $620 - $650      $0         $620 - $650    $620 - $650


3BR / 2BA
Year QT     Vac.      Face Rent      Conc.       Concd. Rent     Adj. Rent
2008    3   N/A            $955        $80           $875           $875
2009    2   N/A            $960       $148           $812           $812
2009    4   N/A            $960       $160           $800           $800
2010    1   N/A            $800        $0            $800           $800




Trend: Comments
3Q08        Contact stated that 12 of the 35 vacancies have applications on them. There was a three percent increase on the one and two-bedroom units, and a one
            percent increase on the three-bedroom units.

2Q09        The property manager stated that there is a $50 premium for units located on the water way. Typical occupancy for the property is around 90 percent.
            However, the market has been slow especially during this past winter season.

4Q09        The contact reported that there are 30 garages offered for $115 per month. The concession offered was two months free for a 12 month lease. The contact
            stated that the property was being hurt by the ghost market of individually owned condos and houses. He stated that the property has remained at around 85
            percent occupancy for the past year. The rents remain unchanged from the previous interview in April.


1Q10        The contact reported that there were 104 one-bedroom units, 192 two-bedroom units, and 44 three-bedroom units. The contact estimated that the property
            was operating at 89 percent occupancy, and estimated that there were no vacant one-bedrooms, and more vacant two-bedrooms than three-bedrooms. The
            contact indicated that the occupancy was typical for the property, if not better than average due to the nation-wide recession. The contact indicated there
            were more moveouts in October 2009 than normal, due to the economy, and that seasonal jobs were harder to find this year.




                                                  © Novogradac & Company LLP 2008 - All Rights Reserved.
                                                          PROPERTY PROFILE REPORT
                                                            The Abbey At Ridgewood Plantation
Effective Rent Date                 4/07/2010

Location                            4911 Signature Dr
                                    Myrtle Beach, SC 29579
                                    Horry County
Distance                            N/A
Units                               180
Vacant Units                        14
Vacancy Rate                        7.8%
Type                                Garden (3 stories)
Year Built/Renovated                1998 / N/A
Marketing Began                     N/A
Leasing Began                       N/A
Last Unit Leased                    N/A
Major Competitors                   N/A
Tenant Characteristics              Small families
Contact Name                        Leasing agent
Phone                               (843) 347-3565


Market Information                                                                         Utilities
Program                              Market                                                A/C                      not included -- central
Annual Turnover Rate                 N/A                                                   Cooking                  not included -- electric
Units/Month Absorbed                 N/A                                                   Water Heat               not included -- electric
HCV Tenants                          N/A                                                   Heat                     not included -- electric
Leasing Pace                         Varies on season & unit type                          Other Electric           not included
Annual Chg. in Rent                  Dec. 3%                                               Water                    not included
Concession                           None                                                  Sewer                    not included
                                                                                           Trash Collection         not included


Unit Mix (face rent)
    Beds           Baths         Type            Units       Size (SF)     Rent      Concession   Restriction   Waiting    Vacant        Vacancy Max Rent?   Range
                                                                                     (monthly)                   List                     Rate
      2             2           Garden           N/A           1,140       $815         $90           Market     None       N/A           N/A      N/A       None
                               (3 stories)
      3             2           Garden           N/A           1,315       $915         $90           Market      No        N/A            N/A      N/A      None
                               (3 stories)


Unit Mix
Market             Face Rent      Conc.       Concd. Rent      Util.     Adj. Rent
2BR / 2BA            $815           $90           $725              $0     $725
3BR / 2BA            $915           $90           $825              $0     $825


Amenities
In-Unit                                                                                    Security                                 Services
Balcony/Patio                                  Blinds                                      None                                   None
Carpeting                                      Central A/C
Coat Closet                                    Dishwasher
Exterior Storage                               Garbage Disposal
Oven                                           Refrigerator
Walk-In Closet                                 Washer/Dryer hookup


Property                                                                                   Premium                                  Other
Clubhouse/Meeting                              Exercise Facility                           None                                     None
Central Laundry                                Off-Street Parking
On-Site Management                             Swimming Pool
Tennis Court                                   Volleyball Court




                                                         © Novogradac & Company LLP 2008 - All Rights Reserved.
The Abbey At Ridgewood Plantation, continued

Comments
This property was formerly known as Alexander Spring Apartments. The property is 92 percent occupied and 98 percent leased. The property manager could not
provide the unit mix or vacancy by unit type. Occupancy has increased since the property lowered rents via concessions.




                                                © Novogradac & Company LLP 2008 - All Rights Reserved.
The Abbey At Ridgewood Plantation, continued

Trend Report
Vacancy Rates
2Q09               2Q10
13.3%              7.8%


Trend: Market
2BR / 2BA
Year QT     Vac.     Face Rent     Conc.    Concd. Rent       Adj. Rent
2009    2   N/A           $840      $70          $770            $770
2010    2   N/A           $815      $90          $725            $725


3BR / 2BA
Year QT     Vac.     Face Rent     Conc.    Concd. Rent       Adj. Rent
2009    2   N/A           $940      $78          $862            $862
2010    2   N/A           $915      $90          $825            $825




Trend: Comments
2Q09        This property was formerly known as Alexnader Spring Apartments.

2Q10        This property was formerly known as Alexander Spring Apartments. The property is 92 percent occupied and 98 percent leased. The property manager
            could not provide the unit mix or vacancy by unit type. Occupancy has increased since the property lowered rents via concessions.




                                              © Novogradac & Company LLP 2008 - All Rights Reserved.
                                                                  Legacy Apartments - Conway, SC – Market Study


Comparable Property Analysis

Vacancy
The following tables summarize overall vacancy rates for the comparable properties.

                                                  Vacancy (All)
                                                                                                            Vacancy
             Property Name            Rent Structure        Location          Total Units   Vacant Units      Rate
            Bells Bay Landing            LIHTC              Conway                60             1            1.7%
           Crabtree Commons              LIHTC              Conway                48             0            0.0%
         Legacy Apartments II         LIHTC, Market         Conway               112            10            8.9%
      Flintlake Apartment Homes          Market            Myrtle Beach          272            22            8.1%
             Patriot's Hollow            Market             Conway                53             3            5.7%
              River Landing              Market            Myrtle Beach          340            37           10.9%
  The Abbey At Ridgewood Plantation      Market            Myrtle Beach          180            14            7.8%
                  Total                                                         1,065           87           8.2%

                                          Vacancy (LIHTC Properties)
                                                                                                            Vacancy
             Property Name            Rent Structure         Location         Total Units   Vacant Units     Rate
            Bells Bay Landing            LIHTC               Conway               60             1           1.7%
           Crabtree Commons              LIHTC               Conway               48             0           0.0%
          Legacy Apartments II*       LIHTC, Market          Conway               60             5           8.3%
                  Total                                                          168             6           3.6%
*LIHT C units only


                                          Vacancy (Market Properties)
                                                                                                            Vacancy
             Property Name            Rent Structure        Location          Total Units   Vacant Units      Rate
        Legacy Apartments II*         LIHTC, Market         Conway                52             5            9.6%
      Flintlake Apartment Homes          Market            Myrtle Beach          272            22            8.1%
             Patriot's Hollow            Market             Conway                53             3            5.7%
              River Landing              Market            Myrtle Beach          340            37           10.9%
  The Abbey At Ridgewood Plantation      Market            Myrtle Beach          180            14            7.8%
                  Total                                                          897            81           9.0%
*Market rate units only



Average vacancy in the market is moderate at 8.2 percent. The average LIHTC vacancy rate at 3.6
percent is significantly lower when compared to market rate vacancy at 9.0 percent. Legacy II has
the highest LIHTC vacancy rate among the LIHTC comparables. The property manager indicated
that the management company changed in January 2010 at which time there were a significant
number of evictions because the prior management company reportedly carried delinquencies or
non-payments of rent for an extended period of time. When the new management took over in
January 2010, the property maintained a vacancy rate of 17 to 21 percent due to evictions. Currently,
vacancy has decreased to eight percent. Further, despite the good condition of the property’s
exteriors, management indicated that the property’s interiors suffer from some deferred maintenance
and require renovations, which has affected the property’s vacancy rate. It also appears that Legacy
II has the highest vacancy rate because the property offers the highest LIHTC rents in the market.
We believe tenants are currently price sensitive as the Subject is in good condition, offers an
excellent location, and offers both comparable unit sizes and amenity package. Post-renovation, the
Subject will be in excellent condition. Crabtree Commons is in excellent condition as well as it was
built in 2007 and it offers a competitive amenity package and is located within close proximity to
Novogradac & Company LLP                                                                               71
                                                         Legacy Apartments - Conway, SC – Market Study


retail. In contrast to Legacy II, Crabtree Commons is maintaining a zero percent vacancy rate, which
is largely due to the property’s very low rents. Currently, Legacy I and II are offering concessions on
its units at 50 percent AMI and on its three-bedroom units in order to increase occupancy. These
concessed rents are above Crabtree Commons. Bells Bay Landing is also maintaining a very low
vacancy rate at less than two percent. The concessed LIHTC rents at Legacy I and II for the 50
percent AMI units are above those at Bells Bay Landing and the concessed rents for the 60 percent
units are below Bells Bay Landing, which is in good condition and offers a good location. The
property is likely achieving a lower vacancy rate than the Subject and Legacy II for several reasons:

    • Bells Bay Landing offers fewer units total (60 versus 90 at Legacy I and 112 at Legacy II)
    • Bells Bay Landing offers four-bedroom units, which are rare in the market and therefore lack
      competition. Management indicated that these units rarely become available.
    • Bells Bay Landing only offers 11 units at 60 percent of AMI total versus 72 at Legacy I and
      35 at Legacy II.

Average vacancy among market rate units is moderate at 9.0 percent. Three of the four market rate
properties are located in Myrtle Beach, which is saturated with market rate properties. Management
at properties such as Flintlake Apartments indicated that there is significant market rate competition
in Myrtle Beach, which drives up vacancy during economic downturns such as the current one.
Further, market rents are significantly higher than LIHTC rents as they are above the maximum
allowable LIHTC rents. Average market rents among the comparables are 52.8 to 70.6 percent
greater than the average two- and three-bedroom LIHTC rents. River Landing is maintaining the
highest vacancy rate of all of the comparables. Management reported higher turnover at the property
due to the local economy’s reliance on the tourism and food/accommodations industries. Further,
although River Landing has good visibility from Edward E. Burroughs Highway (aka Highway 501),
the property offers an inferior location than the Subject as it is isolated and is not located in close
proximity to retail. The Subject will also be superior to River Landing in age/condition as it will
undergo significant renovations including new roofs, flooring, siding, and appliances.

There are five vacant market rate units at Legacy II. Management indicated that the current vacancy
rate is typical for the property due to the current economy. Further, management is not offering a
concession on the market rate units as there are only five vacancies among these units total. The
current vacancy rate at Legacy I is 6.7 percent. As the rent discussion will illustrate, we recommend
that the Subject’s proposed rents at 60 percent AMI be lowered. With renovations and lowered rents,
we believe the Subject can maintain a vacancy rate of five percent or less.

The following table illustrates vacancy in the market by unit type. It should be noted that the
property managers at River Landing, The Abbey at Ridgewood Plantation, and Flintlake Apartments
could not report unit mix and/or vacancy by unit type. Therefore, these units are not included in the
following table.

                                         Weighted Vacancy
                              Unit                                 Percent
                              Type    Total Units   Vacant Units   Vacant
                              2 BR       162            13          8.02%
                              3 BR       184             7          3.80%
                              Total      346            20         5.78%


Novogradac & Company LLP                                                                   72
                                                                Legacy Apartments - Conway, SC – Market Study


When analyzing vacancy by unit type, vacancy appears to be higher in the two-bedroom units.
The Subject is currently 93 percent occupied. With lower proposed rents at 60 percent AMI, we
believe the Subject can maintain a vacancy rate of five percent or less.
The following table illustrates historical vacancy at the comparables.

                                            Historical Vacancy
                                                                                2nd Quarter 2nd Quarter
           Comparable Property                 Type               Location          2009        2010
              Bells Bay Landing               LIHTC               Conway            N/A        1.7%
             Crabtree Commons                 LIHTC               Conway           4.2%        0.0%
            Legacy Apartments II           LIHTC, Market          Conway            N/A        8.9%
         Flintlake Apartment Homes            Market             Myrtle Beach      14.0%       8.1%
               Patriot's Hollow               Market              Conway            N/A        5.7%
                River Landing                 Market             Myrtle Beach      15.0%       10.9%
     The Abbey At Ridgewood Plantation        Market             Myrtle Beach      13.3%       7.8%
             Average Vacancy                                                      11.6%        6.2%

As illustrated, the current vacancy rate has improved since second quarter 2009. The current LIHTC
vacancy rate of 3.6 percent is considered healthy.
Reasonability of Rents
This report is written to SCSHFDA guidelines. Therefore, the conclusions contained herein may not
be replicated by a more stringent analysis. We recommend that the sponsor understand the
guidelines of all those underwriting the Subject development to ensure the proposed rents are
acceptable to all.

Rents provided by property managers at some properties may include all utilities while others may
require tenants to pay all utilities. The Subject will not include any utilities. To make a fair
comparison of the Subject rent levels to comparable properties, rents at comparable properties are
typically adjusted to be consistent with the Subject. Adjustments are made using Section 8 Utility
Allowances for Horry County. The rent analysis is based on net rents at the Subject as well as
surveyed properties.

                                LIHTC Rent Comparison - 50% AMI
                              Property Name                          2BR            3BR
                  Legacy Apartments I (as Proposed) (Subject)        $480           $560
                          LIHTC Maximum (Net)                        $489           $563
                             Bells Bay Landing                         -            $505
                       Legacy Apartments I & II (As Is)              $479           $525
                             Crabtree Commons                        $365           $390
                        Average (excluding Subject)                  $422           $473

                                LIHTC Rent Comparison - 60% AMI
                              Property Name                          2BR            3BR
                  Legacy Apartments I (as Proposed) (Subject)        $595           $650
                          LIHTC Maximum (Net)                        $607           $699
                             Bells Bay Landing                         -            $644
                       Legacy Apartments I & II (As Is)              $500           $525

Novogradac & Company LLP                                                                         73
                                                         Legacy Apartments - Conway, SC – Market Study


                            Crabtree Commons                   $465           $490
                        Average (excluding Subject)            $483           $553

None of the comparables are achieving the LIHTC maximum allowable rents. The Subject’s
proposed rents for the two- and three-bedroom units at 50 and 60 percent AMI will be the highest in
the market. The rents at Legacy II are the highest among the comparables at the 50 percent AMI
level and the rents at the 60 percent AMI level are the highest for the two-bedroom units. As
previously stated, the Subject’s proposed rent will be the highest in the market. Post-renovation, the
Subject will be in excellent condition, will offer a good location, and currently, average LIHTC
vacancy in the market is low at 3.6 percent. However, the Subject’s rents at 60 percent AMI appear
to be too high for the current market.

Current tenants appear to be prioritizing rent levels over other property features due to poor
economic conditions. Legacy I and Legacy II are offering the highest rents among the LIHTC
comparables and are maintaining the highest vacancy rates. Legacy I and II are currently in good
condition, offer a competitive amenity package, and offer an excellent location. Therefore, the price
difference between Legacy II and the two other LIHTC comparables—Bells Bay Landing and
Crabtree Commons—appears to be the most significant difference. Bells Bay Landing and Crabtree
Commons have vacancy rates of 1.7 and zero percent, respectively, and their rents are lower than the
Subject’s proposed rents. Crabtree Commons’ two- and three-bedroom rents at 50 and 60 percent
AMI are 22 to 30 percent lower than the Subject’s rents and the rents at Bells Bay Landing are one
to 10 percent lower. The Subject’s proposed 50 percent AMI rents are 0.2 to seven percent greater
than current levels while the Subject’s proposed 60 percent AMI rents are 13 to 24 percent greater
than current levels. The Subject is currently offering concessions on select units. There are only
three vacant two- and one vacant three-bedroom units at 50 percent AMI at Legacy I and II at the
properties’ current rent levels; therefore, we believe the Subject’s proposed 50 percent AMI rents
will be achievable post-renovation.

The Subject’s proposed rents at 60 percent AMI, however, appear too high at an increase of 13 to 24
percent greater than current levels. From 2009 to 2010, LIHTC comparables in the market either
experienced zero or negative rent growth, indicating there is little room for rent growth in the current
market. Although the Subject will undergo extensive renovations, the market does not appear to
support 13 to 24 percent rent growth. Given the Subject’s current vacancy rate among the 60 percent
AMI units, we believe the Subject’s proposed two-bedroom rent at 60 percent AMI should be
lowered to $550.

Bells Bay Landing is achieving the highest three-bedroom rent at 60 percent AMI. The Subject will
offer larger unit sizes and superior condition post-renovation than Bell’s Bay Landing. However,
Bells Bay Landing only offers a total of 11 units at 60 percent AMI versus 30 three-bedroom units at
60 percent AMI at the Subject. Therefore, we do not believe a rent of $650 will be achievable at the
Subject. We believe the Subject will be able to maintain a healthy three-bedroom vacancy rate if the
Subject’s proposed three-bedroom rent at 60 percent AMI were lowered to $625.

These conclusions are summarized in the following table.




Novogradac & Company LLP                                                                    74
                                                                 Legacy Apartments - Conway, SC – Market Study




                                               Achievable LIHTC Rents

                                              Type             Achievable Rent
                                         2BR at 50% AMI             $480
                                         2BR at 60% AMI             $550
                                         3BR at 50% AMI             $560
                                         3BR at 60% AMI             $625

      The following table compares the Subject’s proposed LIHTC rents to market rents.

            Subject Rents at   Subject Rents      Comparable       Comparable        Comparable            Subject Rent
Unit Type      50% AMI          at 60% AMI     Property Minimum Property Maximum   Property Average         Advantage
  2 BR            $480              $595              $620             $770              $692                14 - 31%
  3 BR            $560              $650              $725            $1,037             $875                26 - 36%


      The Subject’s proposed LIHTC rents are set below the minimum surveyed market rents for both the
      two- and three-bedroom units. As noted in the vacancy section, vacancy at the market rate
      comparables (9.0 percent) is considerably higher than that of the LIHTC units at 3.6 percent. The
      market rents are significantly higher than the maximum allowable LIHTC rents, which LIHTC
      properties are not achieving. Higher rents at market rate properties and the abundance of market rate
      properties in Myrtle Beach contribute to the higher vacancy rate among market rate properties.
      Because the Subject’s proposed LIHTC rents are well below market rents, we believe the Subject’s
      rents, with the lowered 60 percent AMI rents, are achievable as proposed.

      Cost and Availability of Homeownership
      We performed a rent/buy analysis. Based upon site inspection, mobile or manufactured homes are
      common in the Subjects’ market. Therefore, to be conservative, we have used estimates for three-
      bedroom mobile homes in Conway. Our inputs assume a three-bedroom mobile or manufactured
      home with a purchase price of $85,000 and an interest rate of 5.25 percent for a 30-year fixed
      mortgage with a five percent down payment. This was compared to the cost of renting the Subject’s
      three-bedroom unit set at 60 percent AMI. This analysis indicates that with a monthly differential of
      approximately $105, it is more affordable to own a three-bedroom mobile home in Conway than rent
      a three-bedroom unit at 60 percent AMI at the Subject. However, competition from homeownership
      will be limited based on the following factors. First, many of the Subject’s tenants may lack
      acceptable credit rating for homeownership. Second, the cash due at occupancy of $6,800 is a barrier
      for many households. The rent buy analysis is illustrated in the following table.




      Novogradac & Company LLP                                                                        75
                                                                    Legacy Apartments - Conway, SC – Market Study




                                      RENT BUY ANALYSIS
                                 RENT BUY ANALYSIS - Conway, SC

Inputs                                     Ownership       Rental Notes

Average Price                                  $85,000              Estimate for 3BR mobile/manufactured home
Closing Costs                       3%           $2,550
Downpayment                         5%        $4,250.00
Principal                                    $80,750.00
Interest Rate                    5.25%                              Estimate from www.bankrate.com
Amortization period                  30
Monthly Payment                                $445.90
Annual Payment                                $5,350.85
Real Estate Taxes                 1.25%          $1,063
Private Mortgage Insurance        0.50%        $403.75
Homeowner's Insurance             0.50%            $300
Utilities                                          $204             Trash estimated cost for one year (costs included in rent)
Maintanance and Repairs           1.00%            $850             Assumes a 1% cost for maintanance and repairs.
Marginal Tax Bracket                28%
Annual Interest                                   $4,239            Assumes first year
Annual Tax Savings                           ($1,484.53)

Rental Costs
Annual Rent                                                 $7,800 3BR Rent at 60% AMI
Insurance (renter)                                           $150

Total Annual Cost                                $6,687 $7,950
Total Monthly Cost                                $557   $663
Differential per year           ($1,263)
Differential per month         ($105.29)
Cash Due at Occupancy                            $6,800      $950

   Effect of Subject on Other Affordable Units in Market
   Capture rates for the Subject are considered adequate for all units and LIHTC vacancy in the market
   is low at 3.6 percent. The Subject is existing and is 93 percent occupied. Renovations will occur with
   tenants in place. Further, market rents are higher than the maximum allowable rents and therefore
   are not providing additional competition to existing affordable units in the market. Overall, we
   believe that the Subject will not have a negative effect on other affordable units in the market post-
   renovation.

   Availability of Affordable Housing Options
   There are only three family LIHTC properties currently operating in the PMA that do not operate
   with additional subsidy including the Subject and its second phase. Overall, the availability of
   affordable housing in the PMA is considered good. As the market rent comparison demonstrated,
   LIHTC rents in the market do not compete with the rents at the market rate properties as these are
   above the LIHTC maximum allowable levels. All of the Subject’s proposed rents are below the
   minimum observed market rents. Although the rent/buy analysis yields a minimal monthly
   Novogradac & Company LLP                                                                                            76
                                                        Legacy Apartments - Conway, SC – Market Study


differential of $105 per month between buying a starter home and renting the Subject’s three-
bedroom 60 percent AMI units, we believe that the cash due at occupancy of $6,800 will likely be a
barrier for many low income families. Additionally, credit markets have tightened due to the national
recession and it is likely that many low income families lack an acceptable credit rating for
homeownership. Therefore, we do not believe that homeownership will compete with affordable
rental housing in the local market.

Primary Housing Voids
Vacancy at the LIHTC comparables is low at less than five percent and the Subject’s capture rates
are low, indicating additional demand. The Subject is existing and is 93 percent occupied; therefore,
the Subject is currently filling a housing void and will continue to do so as renovated.

Summary Evaluation of the Proposed Project
Average LIHTC vacancy in the market is healthy at 3.6 percent among LIHTC units. In contrast to
the LIHTC units, average market rate vacancy in the market is moderate at 9.0 percent, which
indicates that the local economy is disproportionately affecting market rate properties. This result
can be attributed to the rents at the market rate properties, which are significantly higher than the
LIHTC maximum allowable, which none of the comparables are achieving. Therefore, market rate
rents are not affecting LIHTC rents or occupancy.

The Subject is currently 93 percent occupied and will be renovated with tenants in place. The
Subject’s biggest strength will be its condition post-renovation, its location, and its current tenant
base. The Subject is located on a heavily trafficked road that provides access to good quality retail
along Highways 501 and 544. Further, the Subject offers large unit sizes and the Subject’s capture
rates indicate adequate demand. In general, the Subject is expected to be competitive in the market.




Novogradac & Company LLP                                                                  77
H. INTERVIEWS
                                                        Legacy Apartments – Conway, SC – Market Study


INTERVIEWS

Planning
We spoke with Michael Leinwand, Planning Director with the City of Conway Planning Department
to obtain information regarding current development within the city limits. Currently there is one
multifamily development that is under construction. University Suite, located along Technology
Boulevard approximately 1.5 miles from the Subject, is an apartment development targeted towards
students. There will be nine total buildings when the development is completed, with six to eight
units per building. Mr. Leinwand reported that many of the buildings are already complete, but was
not sure it was 100 percent complete. Mr. Leinwand also reported that there was one gas station,
Murphy Oil, under construction on Church Street. He reported that there were no other commercial
developments proposed or under construction, and that nothing commercial had been built within the
city limits in over one year.

Section 8/Public Housing
We contacted the Housing Authority of the city of Conway to obtain information regarding the
Housing Choice voucher program in the area. Currently, the organization allocated 368 vouchers to
Conway residents and residents of adjacent areas. All vouchers are currently in use and the waiting
list has been closed since October 2007. There are currently no plans to open the waiting list in the
near future, as there are as many as 400 persons on the waiting list for vouchers. The following table
illustrates the payment standards for the area.

                                Payment Standard-City of Conway
                                       One-Bedroom                  $616
                                      Two-Bedroom                   $712
                                      Three-Bedroom                 $851
                                      Four-Bedroom                 $1,031

The Subject’s proposed gross rents at both the 50 percent and 60 percent level of AMI are below the
payment standards for the city of Conway.




Novogradac & Company LLP                                                                  79
I. RECOMMENDATIONS
                                                       Legacy Apartments - Conway, SC – Market Study


Recommendations
We recommend that the Subject be allocated tax credits for renovation; however, we also
recommend that the Subject’s rents at 60 percent AMI be lowered. The Subject’s strengths are its
location, its condition post-renovation, and the fact that it is existing and maintaining a somewhat
healthy occupancy rate at 93 percent. Renovating the Subject will not add any units to the LIHTC
market, which is currently maintaining a healthy vacancy rate of less than five percent. However,
because the newest LIHTC comparable in the market, Crabtree Commons, is offering rents that are
well below those proposed for the Subject, we recommend lowering the Subject’s 60 percent AMI
rents to $550 and $625 for the two- and three-bedroom units respectively. The following tables
illustrate the Subject’s capture rates for both scenarios: the Subject as proposed and the Subject as
NOVOCO recommended.

                        SUBJECT CAPTURE RATES - AS PROPOSED
 Unit Type              Total Demand    Supply    Net Demand      Units Proposed     Capture Rate
 2BR at 50% AMI              667          0           667               18              2.7%
 3BR at 50% AMI              507          0           507               18              3.5%
 2BR at 60% AMI              185          0           185               24              13.0%
 3BR at 60% AMI              140          0           140               30              21.4%
 Overall                     483          0           483               90              18.6%


              SUBJECT CAPTURE RATES - AS NOVOCO RECOMMENDED
 Unit Type                   Total Demand   Supply   Net Demand     Units Proposed   Capture Rate
 2BR at 50% AMI                   727         0          727              18             2.5%
 3BR at 50% AMI                   556         0          556              18             3.2%
 2BR at 60% AMI                   244         0          244              24             9.8%
 3BR at 60% AMI                   187         0          187              30            16.0%
 Overall                          537         0          537              90            16.8%

The Subject’s capture rates remain adequate in both scenarios. Overall, we recommend the Subject
be allocated with lower rents at 60 percent AMI.




Novogradac & Company LLP                                                                  81
J. SIGNED STATEMENT REQUIREMENTS
I affirm that I have made a physical inspection of the market and surrounding area and the
information obtained in the field has been used to determine the need and demand for new rental
LIHTC units. I understand that any misrepresentation of this statement may result in denial of further
participation in the South Carolina State Housing Finance and Development Authority’s programs. I
also affirm that I have no interest in the project or current business relationship with the ownership
entity and my compensation is not contingent on this project being funded. This report was written
according to the SCHFDA’s market study requirements. The information included is accurate and
can be relied upon by SCSHFDA to present a true assessment of the low-income housing rental
market.




H. Blair Kincer, MAI
Partner
Novogradac & Company LLP

April 15, 2010
Date




Michalena M. Sukenik
Manager
Novogradac & Company LLP

April 15, 2010
Date




Kristina V. Garcia
Real Estate Analyst

April 15, 2010
Date
                           ADDENDA




Novogradac & Company LLP      84
         Addendum A: Subject and Neighborhood Photos




                Subject                          View of Subject Entrance




  View of Subject from Singleton Road       View Southwest on Singleton Road




View of Single-Family Home from Subject   Medical offices on Singleton Ridge Road
                      Addendum B: Analyst Qualifications




Novogradac & Company LLP                                   86
         STATEMENT OF PROFESSIONAL QUALIFICATIONS
                   H. BLAIR KINCER, MAI

I. Education

      Duquesne University, Pittsburgh, Pennsylvania
      Masters in Business Administration
      Graduated Summa Cum Laude

      West Virginia University, Morgantown, West Virginia
      Bachelor of Science in Business Administration
      Graduated Magna Cum Laude

II. Licensing and Professional Affiliation

      Member of the Appraisal Institute (MAI)
      Past Member Frostburg Housing Authority
      Certified General Real Estate Appraiser, No. 31534 – State of Arizona
      Certified General Real Estate Appraiser, No. RCG1046 – State of Connecticut
      Certified General Real Estate Appraiser, No. CG100026242 – State of Colorado
      Certified General Real Estate Appraiser, No 4206 – State of Kentucky
      Certified General Real Estate Appraiser, No. 1326 – State of Maryland
      Certified General Real Estate Appraiser, No. 1201073262 – State of Michigan
      Certified General Real Estate Appraiser, No. GA-805 – State of Mississippi
      Certified General Real Estate Appraiser, No. 46000039124 – State of New York
      Certified General Real Estate Appraiser, No. A6765 – State of North Carolina
      Certified General Real Estate Appraiser, No. GA001407L – Commonwealth of Pennsylvania
      Certified General Real Estate Appraiser, No. 5930 – State of South Carolina
      Certified General Real Estate Appraiser, No. 3918 – State of Tennessee
      Certified General Real Estate Appraiser, No. 4001004822 – Commonwealth of Virginia
      Certified General Real Estate Appraiser, No. 1101008 – State of Washington
      Certified General Real Estate Appraiser, No. CG360 – State of West Virginia

III. Professional Experience

     Partner, Novogradac & Company LLP
     Vice President, Capital Realty Advisors, Inc.
     Vice President - Acquisitions, The Community Partners Development Group, LLC
     Commercial Loan Officer/Work-Out Specialist, First Federal Savings Bank of Western MD
     Manager - Real Estate Valuation Services, Ernst & Young LLP
     Senior Associate, Joseph J. Blake and Associates, Inc.
     Senior Appraiser, Chevy Chase, F.S.B.
     Senior Consultant, Pannell Kerr Forster

IV. Professional Training

     Have presented at and attended various IPED and Novogradac conferences regarding the
     affordable housing industry. Have done presentations on the appraisal and market
 H. Blair Kincer
 Qualifications
 Page 2

         analysis of Section 8 and 42 properties. Have spoken regarding general market analysis
         topics.
         Obtained the MAI designation in 1998 and maintained continuing education requirements
         since.

V.       Real Estate Assignments – Examples

In general, have managed and conducted numerous market analyses and appraisals for all types of
commercial real estate since 1988.

     •   Performed numerous appraisals for the US Army Corps of Engineers US Geological Survey
         and the GSA. Property types included Office, Hotel, Residential, Land, Gymnasium,
         warehouse space, border patrol office. Properties located in varied locations such as the
         Washington, DC area, Yuma, AZ, Moscow, ID, Blaine, WA, Lakewood, CO, Seattle, WA

     •   Performed appraisals of commercial properties such as hotels, retail strip centers, grocery
         stores, shopping centers etc for properties in various locations throughout Pennsylvania, New
         Jersey, Maryland, New York for Holiday, Fenoglio, Fowler, LP and Three Rivers Bank.

     •   Have managed and conducted numerous market and feasibility studies for affordable
         housing. Properties are generally Section 42 Low Income Housing Tax Credit Properties.
         Local housing authorities, developers, syndicators and lenders have used these studies to
         assist in the financial underwriting and design of LIHTC properties. Analysis typically
         includes; unit mix determination, demand projections, rental rate analysis, competitive
         property surveying and overall market analysis. An area of special concentration has been the
         category of Senior Independent living properties. Work has been national in scope.

     •   Provided appraisal and market studies for a large portfolio of properties located throughout
         the United States. The reports provided included a variety of property types including vacant
         land, office buildings, multifamily rental properties, gas stations, hotels, retail buildings,
         industrial and warehouse space, country clubs and golf courses, etc. The portfolio included
         more than 150 assets and the work was performed for the SBA through Metec Asset
         Management LLP.

     •   Have managed and conducted numerous appraisals of affordable housing (primarily LIHTC
         developments). Appraisal assignments typically involved determining the as is, as if
         complete and the as if complete and stabilized values. Additionally, encumbered (LIHTC)
         and unencumbered values were typically derived. The three traditional approaches to value
         are developed with special methodologies included to value tax credit equity, below market
         financing and Pilot agreements.

     •   Performed numerous appraisals in 17 states of proposed new construction and existing
         properties under the HUD Multifamily Accelerated Processing program. These appraisals
         meet the requirements outlined in HUD Handbook 4465.1 and Chapter 7 of the HUD MAP
         Guide.
H. Blair Kincer
Qualifications
Page 3

    •   Performed numerous market study/appraisals assignments for USDA RD properties in
        several states in conjunction with acquisition rehabilitation redevelopments. Documents are
        used by states, FannieMae, USDA and the developer in the underwriting process. Market
        studies are compliant to State, FannieMae and USDA requirements. Appraisals are
        compliant to FannieMae and USDA HB-1-3560 Chapter 7 and Attachments.

    •   Completed numerous FannieMae appraisals of affordable and market rate multi-family
        properties for Fannie DUS Lenders. Currently have ongoing assignment relationships with
        several DUS Lenders.

    •   In accordance with HUD’s Section 8 Renewal Policy and Chapter 9, Mr. Kincer has
        completed numerous Rent Comparability Studies for various property owners and local
        housing authorities. The properties were typically undergoing recertification under HUD’s
        Mark to Market Program.
                               MICHALENA M. SUKENIK

I.         Education
           Union College, Schenectady, New York
           Bachelor of Arts in Cultural Anthropology
           Union College Study Abroad, St. Lucy, Barbados

II.        Professional Experience
           Manager, Novogradac & Company LLP (Start date: September 2002 - present)
           Dallas / Fort Worth and Atlanta Research Manager, CoStar Group, Inc.
           Senior Research Analyst / Newswire Editor, CoStar Group, Inc.

III.       Professional Training and Continuing Education
           Member, National Council of Affordable Housing Market Analysts (NCAHMA)
           Attended HUD Community Development Block Grant (CDBG) 30th Anniversary
           Conference, September 13-14, 2004, Washington, DC
           Successfully completed “Introduction to Commercial Real Estate Analysis” and
           “Financial Analysis for Commercial Real Estate Investment”

IV.        Real Estate Assignments
           A representative sample of Due Diligence, Consulting, or Valuation Engagements includes:
       •   Conducted numerous market and feasibility studies for affordable housing. Properties are
           generally Section 42 Low Income Housing Tax Credit Properties. Local housing authorities,
           developers, syndicators and lenders have used these studies to assist in the financial
           underwriting and design of LIHTC properties. Analysis typically includes; unit mix
           determination, demand projections, rental rate analysis, competitive property surveying and
           overall market analysis.
       •   Prepared a comprehensive city wide housing market analysis for the City of Biloxi, MS
           which included a housing needs assessment.
       •   Prepared a comprehensive neighborhood housing market analysis for the New Orleans East
           neighborhood in New Orleans, LA for the Louisiana Housing and Finance Agency. The
           study focused on the housing and economic trends Pre- and Post- Hurricane Katrina and
           overall housing needs in that neighborhood.
       •   Assisted in preparing an approved HUD Consolidated Plan for the City of Gainesville, GA;
           which included a housing and homeless needs assessment, market analysis, non-housing
           needs analysis, and a strategic plan, which conformed to 24CFR Part 91, Consolidated Plan
           Regulations for the ensuing five-year period (2004-2009).
       •   Assisted in preparing a comprehensive senior housing study in Seattle, Washington for the
           Seattle Housing Authority. This study evaluated the Seattle Housing Authority’s affordable
           senior housing project for their position within the entire city’s senior housing market. The
           research involved analysis of the senior population by neighborhood, income, household size,
           racial composition, and tenure.
       •   Conducted market studies for senior projects in Alabama, Alaska, Arizona, California,
           Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana,
           Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Jersey,
           New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah,
           Virginia, West Virginia, Washington, and Wisconsin.
       •   Assisted in appraisals of proposed new construction and existing Low-Income Housing Tax
           Credit properties.
       •   Assisted in the preparation of Rent Comparability Studies and HUD MAP Market Studies
           according to HUD guidelines.
STATEMENT OF PROFESSIONAL QUALIFICATIONS
               NICOLE KELLEY


I.         Education
           Auburn University, Auburn, Alabama
           Bachelor of Science in Business Administration
           Auburn University, Auburn, Alabama
           Mater of Business Administration

II.        Professional Experience
           Analyst, Novogradac & Company LLP (Start Date: May 2006 – Present)
           Intern, Bullock Mannelly Partners
           Graduate Assistant, Auburn University College of Business

III.       Research Assignments

A representative sample of Due Diligence, Consulting, or Valuation Engagements
includes:

•          Assisted with market studies of proposed new construction and existing Low-
           Income Housing Tax Credit (LIHTC) properties. Market analysis includes
           preliminary property screenings, market analysis, comparable rent surveys, and
           demand analysis.

•          Assisted in appraisals of proposed new construction and existing Low-Income
           Housing Tax Credit properties.

       •   Assisted in the preparation of Rent Comparability Studies according to HUD
           guidelines.
      STATEMENT OF PROFESSIONAL QUALIFICATIONS
                     KRISTINA V. GARCIA
      I.       Education
               Emory University, Atlanta, Georgia
               Bachelor of Arts

      II.      Professional Experience
               Researcher, Novogradac & Company LLP (April 2007 – Present)

      III.     Assignments
      •        Conducts and assists with market feasibility studies of proposed new construction and existing
               Low-Income Housing Tax Credit (LIHTC) properties. Local housing authorities, developers,
               syndicators and lenders have used these studies to assist in the financial underwriting and design
               of LIHTC properties. Market analysis typically includes: physical inspection of site and market,
               demand projections, rental rate analysis, competitive property surveying and overall market
               analysis.

      •        Assists with appraisals of existing and proposed Low-Income Housing Tax Credit properties,
               Rural Development properties, and Section 8 properties.

      •        Conducts and assists with the preparation of Rent Comparability Studies according to HUD
               guidelines.

      REPRESENTATIVE SAMPLE OF ENGAGEMENTS
      Market Study Experience—Proposed LIHTC New Construction and Rehabilitation Developments:
      Analyst has conducted research for market studies within the following states and U.S. territories:

• Alabama               • Guam                   • Michigan                • Oklahoma              • Texas
• Arizona               • Illinois               • Mississippi             • Pennsylvania          • Utah
• Arkansas              • Indiana                • New York                • Puerto Rico           • Virginia
• California            • Kentucky               • New Jersey              • Rhode Island          • Washington
• Florida               • Louisiana              • North Carolina          • South Carolina        • West Virginia
• Georgia               • Massachusetts          • North Dakota            • Tennessee
      HUD Rent Comparability Study Experience:
      Analyst has conducted research for rent comparability studies within the following states:

       • Alabama           • Florida        • Georgia         • New York      • South Carolina      • Texas

      Appraisal Research Experience:
      Analyst has conducted research for appraisals within the following states:

       • Alabama      • Florida   • Georgia     • Louisiana      • New York     • South Carolina    • Virginia

      Miscellaneous Housing Studies:
      • Conducted research for a comprehensive citywide housing market analysis for the City of Biloxi, MS
         which included a housing needs assessment.
      • Conducted research for comprehensive neighborhood housing market analysis for the New Orleans
         East neighborhood in New Orleans, LA for the Louisiana Housing and Finance Agency. regarding
         housing needs and economic trends Pre- and Post- Hurricane Katrina
      • Conducted research for mixed-use HOPE VI redevelopment plan for Tindall Heights Macon Housing
         Authority’s Tindall Heights Public Housing

								
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