Available for Loan Requests up to $500,000

Small Loan Program Available for loan requests up to $500,000

Dear Prospective Borrower,

Apartment Bank is excited to introduce our Small Loan Program “SLP”. Our goal is to provide you with the highest level of service while keeping the process as simple as possible through our streamlined submission process. We are proud to offer you two options: 1. A 3-Year Fixed Hybrid or a 5-Year Fixed Hybrid. 2. Submit your complete “SLP” loan application along with all of the requested personal and property information as outlined at the end of this letter along with your application deposit. 3. Once a complete “SLP” package is received, it will be reviewed ithin 48 hours. 4. If the initial review appears to support your request, we will move forward by ordering third party reports. 5. If we determine the request does not meet our gelines, we will send your check and package back to you. 6. This letter is not to be construed as an offer to lend and is subject to change.

GETTING STARTED 1. Let us know how much you want and which loan program you prefer Loan Amount Requested (please write in your request): $ Loan Amount (Check the Boxes) $100,000-$299,999 $300,000-$499,999

3 Year Fixed Hybrid . Rate: 5.06% . Rate: 4.86% . Prepay: 3-2-1 . Prepay: 3-2-1 5 Year Fixed Hybrid . Rate: 5.17% . Rate: 4.97% . Prepay” 5-4-3-2-1 . Prepay: 5-4-3-2-1 2. Tell us why you want the loan (there is no gaurentee that your loan will achieve these LTV’s) Loan Purpose Purchase Refi- Rate & Term Refi- Cash Out

Maximum LTV 75% 75% 70% Debt Service Coverage Minimum 1.25% 3. Here are the terms Margin . 3.50% Index . 6 month LIBOR Rate/Payment Adjustment Frequency . Every 6 months, after initial fixed rate period Loan/Amortization Term . 360 months / 360 months 4. Keeping it simple: Individuals Only (No LLCs, Trusts or Partnerships) Recourse . Personal Guarantee Required 5. 3rd Party Reports, Appraisal, Environmental Assessment, Property Inspection, Credit Report(s), Flood Assessment, others may be required as needed. 6. Lender Fees Processing/Underwriting $ 2,500 Origination Fee $ 2,500 or 1% of loan amount, whichever is Lender Fees higher Loan Documents Minimum $680

Applicant Initial: ______

Program rate and terms subject to change. Lender acceptance of application deposit does not ensure Lender will approve your request for credit or that Lender will grant you a loan under the terms requested. Page 1 of 4

Small Loan Application Letter: AB October 10,2012 7. Assemble your Loan Package. Here’s what you need to send:  Current Rent Roll for the subject property

 Prior two (2) years and current year-to-date Profit & Loss Statements

 Small Loan Program Application (property information)

 Personal Financial Statement or you may submit a Fannie Mae 1003

 Schedule of Real Estate Owned

 Credit Authorization & Consent

 Insurance Requirements

 W-9, federal form

 4506T, federal form

 Purchase contract (if purchase)

 Title/Escrow Company Contact

 Most recent 2 years’ Tax Returns

 Application Deposit check in the amount of $3,500

Please Note: Everything must be submitted on an Apartment Bank Form (unless otherwise noted) and every form must be signed and dated. Failure to sign/date and provide the required form will result in a delay of the processing of your potential loan application. Forms are attached for your convenience. Your Application Deposit is not refundable if you fail to proceed with or cooperate in the application process, or cancel or withdraw your application for any reason, In the event your application is denied, Apartment Bank will deduct from your Application Deposit the costs that were incurred and refund the difference to you within 30 days of our decision.

If you wish to proceed with an application for the loan described herein, please execute the following acknowledgment and initial each page of this letter. In addition, return this letter along with an Application Deposit Check and Completed Loan Application Package as well as any requested documentation (described above in the “Assemble your Loan Package” section). In the event you submit an incomplete package, we will contact

Small Loan Application Letter: AB October 10,2012 you to request the missing items. If the additional items requested are not received 7 business days from the date of the request, no further consideration to your loan request will be provided and you package will be returned. Interest rates for these and any other loan programs offered by Apartment Bank are subject to change.

You have the right to receive a copy of the appraisal report to be obtained in connection with the loan for which you are applying, provided you have paid for the appraisal. We must receive your written request no later than 90 days after we notify you of the action taken on your application or you withdraw your application. The appraisal report will be mailed or delivered within 15 days from receipt of the request, provided payment for the appraisal has been received. If you would like a copy of the appraisal report, contact: Apartment Bank at 4350 La Jolla Village Drive, Suite 140, Mail Stop IPL-6, San Diego, California, 92122.

This letter supersedes any and all prior or contemporaneous discussions, representations, offers, or statements whether written or oral, made by Apartment Bank or by anyone acting or purporting to act for or on behalf of Apartment Bank to you or your agents. No commitments, oral or written, are intended or exist and no oral commitments can or will be issued.

Small Loan Application Letter: AB October 10,2012 Each of the undersigned borrower(s) hereby acknowledges that (i) they have read and understood the foregoing Express Loan Package letter, (ii) if approved by Apartment Bank, borrower would accept a loan at the “General Loan Terms” previously described, and subject to any conditions Apartment Bank typically requires for similar loans, including, but not limited to, specific Insurance Requirements and more. The undersigned hereby request Apartment Bank to commence its loan underwriting process and agrees to be bound by all terms and conditions set forth herein.

______Borrower Name Borrower Name

Property Inspection / Appraiser Contact Information Property Contact /Onsite Manager: ______Phone: ______

Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal Law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

If your application is denied during the underwriting process, you have the right to a written statement of the specific reasons for the denial. You will also be provided with documentation of any deposit made, and details of the specific deductions for vendor services rendered. To obtain the statement, please contact Apartment Bank at 4350 La Jolla Village Drive, Suite 140, Mail Stop IPL-6, San Diego, California, 92122 within 60 days from the date you were notified of our decision. We will send you a written statement of reasons for the denial within 30 days of receiving your request for a statement.

Initial Here ___

The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law is the Office of the Comptroller of the Currency, Customer Assistance Group, 1301 McKinney Street, Suite #3450, Houston, TX 77010.

Initial Here____

All forms are attached for your convenience.

Small Loan Application Letter: AB October 10,2012