A. NOTIFICATION.

Notification, via ADFA's website at www.arkansas.gov/adfa, will be sent to all developers and affordable housing professionals advising them of the availability of volume cap and the process for submission of applications.

B. SUBMISSION OF APPLICATION.

The Applicant, developer or its representative shall submit a completed 2009 Multi- Family Housing Application, including all required documentation and exhibits with the application fee to ADFA.

C. REVIEW OF APPLICATION.

Applications are reviewed by ADFA's Multi-Family Housing Staff for completeness and compliance with all requirements of these 2009 Bond Guidelines for Residential Rental Housing and the QAP. Pursuant to Section 42(m)(1)(D) of the Internal Revenue Code, the application will be evaluated for compliance with the THRESHOLD REQUIREMENTS set forth in Section VI.B. of the QAP and the ADDITIONAL REQUIREMENTS FOR A COMPLETE APPLICATION set forth in Section VI.C. of the QAP. ADFA's Multi-Family Housing staff will conduct a review of the Applicant's previous performance related to ADFA and other programs. The Applicant's performance under the Bond Program to close previous bond transactions within the program requirements will be reviewed and could impact the funding decision. In addition, unsatisfactory performance, as determined by the Board Housing Review Committee on previous developments, or delinquencies in payments will result in disqualification of an application by the ADFA Board Housing Review Committee.

All information submitted to ADFA along with ADFA staff findings and notes may be shared with any issuing entity to assist the issuing entity with funding decisions.

D. COVENANT TO EXECUTE CERTIFICATE OF BOND PROCEEDS EXPENDITURE.

With its application, the applicant must covenant that the borrower/user of the bond proceeds will, by the earlier of:

FURTHER, at bond issuance/closing, the BORROWER/USER will execute a separate document/letter declaring the above covenant. Such document/letter will be included with all other bond closing documentation.

E. EXTENSIONS OF THE CLOSING DATE.

The bond closing must take place prior to the expiration of the “Reservation Period”, as extended, as provided for in Section 5 of the Volume Cap Rules and Regulations.

F. CREDIT ENHANCEMENT OR PRIVATE PLACEMENT (ADFA ISSUES ONLY).

All multi-family transactions must be either Credit Enhanced or placed with a bank, registered investment company, insurance company or “Accredited Investors”, as defined in Rule 501 of Regulation D of the U.S. Securities and Exchange Commission, (“Qualified Investors”) who are willing to sign Investor Letters stating their qualifications to analyze and gauge risk relating to their investment in such issues. The minimum rating requirement for Credit Enhancement to be eligible for multi-family Bond Issues would be “A” or better by Moodys Investor Service or “A” or better by Standard and Poor's at the time of closing. Bonds issued and placed with “Accredited Investors,” as defined above, would be issued in initial minimum denominations of $100,000 or any integral multiples of $5,000 in excess thereof.

G. FORMAL PRESENTATION BEFORE BOARD HOUSING REVIEW COMMITTEE.

All applicants will be required to make a formal presentation before ADFA's Board Housing Review Committee. Applicants will be notified by ADFA staff of the schedule for making the formal presentation. The presentation shall include, but is not limited to, discussion of the following:

H. DECISION OF BOARD HOUSING REVIEW COMMITTEE.

The Board Housing Review Committee will make its recommendation of selected applications to the Board of Directors. The Board of Directors will approve selected applications at a regular Board meeting.

I. CHANGES TO THE ORIGINAL APPLICATION.

Any change to the original application must be submitted to ADFA in writing at least thirty (30) days prior to the desired effective date of the change. All changes must be reviewed and approved by ADFA's Multi-Family Housing Staff or ADFA's Board of Directors. Any change to the original application made without approval from ADFA will be null and void.

J. RESERVATION OF VOLUME CAP BY ADFA.

All reservations of volume cap made by ADFA will be made for the purpose of providing bond financing for a specific development on a specific site. Any change in the development site, the applicant entity, the ownership entity or the size, nature or other characteristics of the development may, in ADFA's sole discretion, invalidate the reservation. The applicant is obligated to report any changes to ADFA. Should the highest elected official withdraw the letter of support for the development at any time prior to the bond closing, ADFA will invalidate the reservation for volume cap. Revocation of the letter of support at any time after the bond closing will not affect the reservation for volume cap.