Ithaca Urban Renewal Agency

108 East Green Street Ithaca, New York 14850 (607) 274-6565 AGENDA IURA Neighborhood Investment Committee (NIC) 8:30 am, Friday, February 8, 2019 Common Council Chambers, Third Floor City Hall, 108 E. Green St., Ithaca, NY 14850

I. Call to Order

II. Changes/Additions to Agenda

III. Public Comment

IV. Review of Minutes – Minutes for January 11, 2019

V. New Business A. Update: Homelessness in City of Ithaca: Danielle Harrington, Director of Housing, TCAction

B. Update: INHS Mini-Repair – Program and 2017 Contract, Loralee Morrow, Director of Construction Services, Ithaca Neighborhood Housing Services

C. Action Items: 1. Proposed Resolution – Designation of INHS as CHDO 2. Proposed Resolution – Amendment or Extension to INHS 2017 Mini-Repair Activity

VI. Other Business A. IURA Grant Summary B. Staff Report C. Next Meeting: March 8, 2019

VII. Motion to Adjourn

If you have a disability and require accommodations in order to fully participate, please contact the IURA at 274-6559 at least 48 hours prior to the meeting.

Ithaca Urban Renewal Agency

108 East Green Street Ithaca, New York 14850 (607) 274-6565 DRAFT MINUTES IURA Neighborhood Investment Committee (NIC) 8:30 am, Friday, January 11, 2019 Common Council Chambers, Third Floor City Hall, 108 E. Green St., Ithaca, NY 14850

In attendance: Karl Graham, Chair; Tracy Farrell, Vice Chair; Paulette Manos; Fernando de Aragon. Excused: Teresa Halpert Staff : Nels Bohn; Anisa Mendizabal Guests: Johanna Anderson, CEO, INHS

I. Call to Order Chair Graham called the meeting to order at 8:30 a.m.

II. Public Comment None

III. Changes/Additions to Agenda Since Ms. Anderson of INHS was present, Chair Graham suggested re-ordering of the agenda to place the Q & A with her first.

IV. New Business A. Q & A with Johanna Anderson, Executive Director, Ithaca Neighborhood Housing Services

Ms. Anderson introduced herself and spoke about some of INHS’ key accomplishments, as well as changes, in the past year.

Farrell expressed interest in homebuyer loan activity. Anderson answered there are a handful of loans as part of the Community Housing Trust. The “lending ring” is around the County. INHS will provide loans to qualified applicants with incomes up to 120% AMI. For a family of three, that is about $80,000. What INHS sees is not just a lack of housing stock but potential homebuyers competing with cash buyers—“there is nothing you can do when you are competing against buyers that do not need an appraisal or to conform to the usual timelines.”

Anderson spoke of the plans for homebuyer housing at 402 S. Cayuga (partially funded the 2018 Action Plan). This is a site where INHS is able to bring down the square-foot cost with a new construction method. INHS is also going to offer two of the units (not subsidized with HUD funding) at 100% AMI. This is a strategy to try to address the “missing middle” and create homes that are permanently affordable (through the Community Housing Trust) at different levels. It’s slated for November 2019 completion.

707 Hancock will be the first 4-bedroom in the CHT.

310 S. Corn Street, a 2-bedroom, 1 bath home—is an example of INHS’ commitment in the community. INHS has touched this house 5 different times over the past 40 years.

Anderson reported that INHS is working in the community to get the word out they are interested in rehabbing foreclosed properties to offer as affordable homes. Also, as INHS’ service area grows (through merger will Better Housing), a farm house in Ovid will be their first CHT home in Seneca County.

De Aragon brought up energy efficiencies and sustainability. Is INHS open to using heat pumps instead of gas? Anderson replied that INHS “has always led the charge with sustainability.” INHS is now looking at making a spec book because it realizes the City is promoting green standards and wants to be not just conforming, but leading there.

The discussion moved to homebuyer trainings. In conjunction with Alternatives, INHS does a preparation course to determine whether homeownership is currently viable for individuals. The 8-hour course orients people to the process of homeownership and demystifies it. It’s one of the biggest decisions/purchases in life, and also something that people usually only do a few times in life. Each person gets an additional 2 hours of (individual) counselling. There is also a course on inspections.

De Aragon continued, “I’m coming from the transportation purchase [angle]. Buying a car is the second largest purchase.” De Aragon suggested the inclusion of lifestyle decisions such as car ownership in homebuyer education classes. Deciding not to buy a car, for example, allows people more available money for a home. Way to Go could be a good partner for this awareness effort. The True Cost Tompkins study is also a good resource.

Graham returned to Anderson’s earlier statement that INHS home loans are geographically in the outer ring of Tompkins County, saying he assumed this had to do with affordability. This also normalizes a commute of 45 minutes. Anderson said INHS also noted this pattern and was trying to find ways to move homebuyership geographically closer [to employment center(s)]. Some buyers feel it is more economical to have a 45 minute drive.

Manos asked about specific homebuyer numbers in the City. Is there an effort to encourage homeownership within the City? Anderson: Yes, but again, the challenge is cash buyers have an advantage.

Farrell wondered if people cited taxes as a reason for not living in the City. Anderson noted Trumansburg has comparably high taxes. Others noted that the Town of Ithaca is often cited as having lower taxes.

The discussion turned to Mini-Repair. Graham noted the Committee’s interest in it. Anderson agreed—it’s one of INHS’ favorite programs, it’s very mission-driving. She also noted that when she came aboard, there was very little marketing of it, which has now changed with a full-time person for marketing who is connecting with GIAC and other agencies. Similarly, there is a new Director of Construction Services. “The new team is doing an amazing job.” They have set a goal of increase Mini-Repair by 25% inside the City. Also, behind the scenes, INHS can increase its emergency materials fund, which is when INHS provides the materials for Mini-Repair clients. (The program generally works as free labor and the client buys the materials). Justina Fetterly in the new Communications Director and can send Mini-Repair materials.

The Committee indicated interest in knowing more about the Immaculate Conception school site. INHS submitted a proposal on October 31, and learned after Thanksgiving that they wer designated the preferred developer. INHS now has 120 days to complete an environmental review on the site. Lynn Truame is the Project Manager. INHS would like to submit tax credit application in December. Community engagement sessions are very important, and because of the tax credit deadline, it would need to become one of INHS fastest moving projects. INHS is working with as many different nonprofits as possible. The initial plan for the gymnasium has been to separate it from the complex and make it stand alone in order to sell it to GIAC. INHS would like to do façade improvements to the main entrance of the gym. INHS is looking about how to make the rest of the site feasible. There are some single family homes on the site. These could be preserved, or they could be demolished and replaced. It depends on the community engagement input as well as the condition of the homes. INHS is exploring a variety of proportions of for-sale and for-rent units.

There is more emotion tied to this site, as a former school site, than there was with 210 Hancock.

De Aragon pointed out, “We are building now for the next 70-80 year. I would push for as much housing as can be built. On the transportation side, there is so much opportunity to be car-free.” De Aragon could help INHS find families that don’t want or need cars. The location is optimal for density.

Mendizabal commented that the 2017 Assessment of Fair Housing analyzes access to opportunity. Ithaca is considered a high-opportunity area. More affordable housing, especially at such as centrally located, walkable site, would go along way to achieving some of the stated goals of the City’s AFH.

How does INHS handle Housing Choice Vouchers (HCV)? Tenant income verification occurs yearly to ensure the household income qualifies (there may be change to household size, for example). This is done through a third party. If the household income rises above the allowable for the apartment size and the household is no longer eligible for the unit, INHS can help find another [eligible unit]. If the household becomes “over income” (no longer LMI), INHS can try to help locate a market rate unit.

The Committee wanted to know if, in these cases of rising income, if homeownership were also encouraged. Anderson answered that within INHS housing portfolio, the organization believes in having mixed-income, including market rate, so that people have the ability to move [within the INHS portfolio]. Homebuyer classes are offered in the community space of some of the larger INHS buildings.

How did the INHS/Better Housing merger impact the organization? Anderson: There are two separate organizations with two separate boards. The two organizations have shared services agreements. All property management staff are employed by Better Housing. The two organizations decided upon this in order to continue their work and public-facing activities in the least confusing way.

Graham brought up the 209 rental units planned for the Vecino/Green Street Garage development. There, INHS had expressed concerns about lease-up. Does the organization have similar concerns for the Immaculate Conception project? Anderson anticipates the desire to be near BJM and GIAC will override possible lease-up difficulties. At 210 Hancock there was a waitlist of 150 people but the vast majority dropped off the list, whether because not able to meet income standards, a background check, no longer available, or another reason.

Graham asked about the rental standard assumptions. How does a criminal record impact ability to rent? Anderson said that convictions for sex offenses and manufacture of methamphetamine preclude being able to rent, but those are among the few convictions that do so. Anderson and Phoebe Brown have been working together on this issue.

Anderson stated that she would like to make a practice of coming to the City at the beginning of each year to discuss annual goals. For example, INHS wants to discuss its response to climate change, being a mission-driven lender, and what it means to be a social enterprise.

V. Review of Minutes – Minutes for November 9, 2018

Farrell moved; De Aragon seconded.

Approved 4-0.

VI. New Business, continued:

A. Organizational Meeting for the 2019-2024 Consolidated Plan and 2019 Action Plan Mendizabal distributed information and schedule related to 2019-2023 Consolidated Plan and 2019 Action Plan.

She gave a summary of the purpose of the Consolidated Plan, discussed the regulatory requirements, provided an overview of the public engagement process, and reviewed important milestones. She noted that the 2017 AFH will be included in the Consolidated Plan, as originally mandated. She also shared early information from community consultations, such as needs identified for attention to and prevention of homelessness (from Southwest Park meetings).

C. Q & A with Nels Bohn, Director of Community Development, IURA Bohn updated the Committee about several issues of interest including: Vecino Group designated preferred developer for Green Street garage; possibility for incorporation of housing onto Sears St/Tioga parcel; INHS working with Nate’s Floral Estates (could be a CDBG- eligible project); INHS tax credit application for Elm Street; Park Grove submitted plans for 40 units across from Aldi; Lakeview submitted tax credit application for West End Heights; Ithaca townhomes on Rte. 96 at old School of Massage, where an old subdivision had been approved; the BUILD application to NYS for Route 13 was not funded.

De Aragon departed at 10:25 A.M.

VII. Other Business 1. IURA Grant Summary 2. Staff Report Mendizabal reported on ongoing meetings convened by the Fire Chief regarding homeless encampment in Southwest Park portion of the City. Need for homeless services is high, and many activities that have been proposed in the meetings are on the spectrum of what the HUD Entitlement Program funds.

IURA and City staff had tour of Press Bay Court (IURA provided a Community Development Loan). Rents for new apartments above the first-floor commercial are comparable to older downtown apartment rents.

IURA received requests for and granted extensions to some 2017 funded activities, including Spencer Road Sidewalks, Chartwell House, TCAT Bus Stop and Amenities Upgrades, and a few others.

The Aurora Street MOU is being drafted.

TCAction’s Amici House is set to open in February.

An ordinance and enforcement process for Source of Income (SOI) Protection is a goal of the City’s AFH. A CIPA student was engaged by the CoC, IURA, and County Legislature to explore other SOI ordinances in the region. He reported his findings to the Legislature. Mendizabal will follow up with call to CNY Fair Housing.

CoC staff member Tierra Labrada, who the Committee heard from at a 2018 meeting, has taken a position with an organization in NYC. Liddy Barger, currently CCTT Samaritan Center Director has been chosen to fill the role.

IURA Contracts Monitor, Charles Pyott, is updating IURA’s Affirmative Marketing Materials. Also, Mendizabal will conduct his review soon. Mendizabal reports he is doing a very good job.

3. Next Meeting: February 8, 2019

VII. Motion to Adjourn Adjourned by consensus at 10:25 A.M.

Proposed Resolution IURA Neighborhood Investment Committee February 8, 2019

2019 Designation of INHS as a Community Housing Development Organization (CHDO)

WHEREAS, the Ithaca Urban Renewal Agency (IURA) has been designated by the City of Ithaca as the Lead Agency to develop, administer and implement the HUD Entitlement grant program, including funds received through the Home Investment Partnerships (HOME) program, and

WHEREAS, grant recipients under the HOME program are termed Participating Jurisdictions (PJs), and

WHEREAS, PJs must reserve not less than 15% of their HOME allocation for investment in housing to be developed, sponsored, or owned by Community Housing Development Organizations (CHDOs), and

WHEREAS, each PJ must identify annually CHDOs that are capable of carrying out projects to address priority housing needs identified in the Consolidated Plan, and

WHEREAS, a CHDO is a specific type of community-based nonprofit organization as defined in 24 CFR §92.2, and

WHEREAS, a PJ may use HOME funds to provide special assistance to CHDOs, including: • Project pre-development loans; • Operating assistance; • Use of HOME project proceeds; • Capacity-building assistance; and

WHEREAS, on January 16, 2019, Ithaca Neighborhood Housing Services, Inc. (INHS) submitted materials documenting their qualification and requested renewal of their designation as a CHDO by the IURA, and

WHEREAS, at its February 8, 2019 meeting, the Neighborhood Investment Committee of the Ithaca Urban Renewal Agency compared submitted materials against CHDO criteria and recommends the following; now, therefore be it

RESOLVED, that the IURA, acting in its capacity as the Lead Agency for the Participating Jurisdiction of the City of Ithaca, hereby renews its designation of Ithaca Neighborhood Housing Services, Inc. as a CHDO for the 2019 Action Plan.

j:\planning\community development\entitlement grants\cdbg 2019\chdos\resolution - designation of inhs as chdo - 02-08-19.doc IURA Grants Summary December 2018

ON TOTAL # SCHEDULE HUD ENTITLEMENT ACTIVITIES SPONSOR BUDGET EXPENDED UNEXPENDED % SPENT 2015 CDBG Activities 2521 complete 1.0 Hancock Street INHS 250,403.50 250,403.50 0.00 100% 2522 complete 2.0 Mini Repair INHS 35,000.00 35,000.00 0.00 100% 2531 complete 6.0 Temporary Ramp Loan Program Finger Lakes Ind. Center 20,000.00 20,000.00 0.00 100% 2532 complete 7.0 Hospitality Employment Training Program GIAC 109,372.86 109,372.86 0.00 100% 2523 complete 8.0 Work Preserve Job Training Program Historic Ithaca 87,500.00 87,500.00 0.00 100% 2524 NO 9.0 Spencer Road Sidewalks City of Ithaca 100,000.00 28,106.50 71,893.50 28% 2525 complete 10.0 2-1-1/I&R Service Human Services Coalition 20,000.00 20,000.00 0.00 100% 2526 complete 11.0 Building for the Future7 Southside Community Center 21,227.76 21,227.76 0.00 100% 2527 complete 12.0 Immigrant Services Catholic Charities 16,000.00 16,000.00 0.00 100% 2528 complete 13.0 A+ Tuition Assistance BJM Enrichment Program 17,410.00 17,410.00 0.00 100% 2529 complete 14.0 ReSET Job Training Expansion Finger Lakes ReUse 23,759.00 23,759.00 0.00 100% 2530 complete 15.0 CDBG Grant Administration IURA 134,329.20 134,329.20 0.00 100% 2912 complete Unallocated 2015 CDBG7 N/A 0.00 0.00 0.00 N/A Total 835,002.32 763,108.82 71,893.50 91%

2016 CDBG Activities 1913 ok Unallocated 2016 CDBG 18, 20, 25 N/A 1,390.00 0.00 1,390.00 N/A Total 1,390.00 0.00 1,390.00 0%

2016 HOME Activities 2758 complete 5.0 202 Hancock Townhouses 26 INHS 317,768.64 317,768.64 0.00 100% Total 317,768.64 317,768.64 0.00 100%

2017 CDBG Activities 2561 NO 1.0 Chartwell House Tompkins Community Action 22,000.00 0.00 22,000.00 0% 2562 NO 2.0 2017 Homeowner Rehab INHS 75,000.00 0.00 75,000.00 0% 2563 ok 6.0 Mini Repair INHS 26,000.00 23,590.44 2,409.56 91% 2564 complete 7.0 Hospitality Employment Training Program GIAC 100,000.00 100,000.00 0.00 100% 2565 canceled 8.0 Ithaca ReUse Center Expansion Finger Lakes ReUse, Inc. 0.00 0.00 0.00 100% 2566 ok 10.0 Work Preserve Job Training: Job Placements Historic Ithaca 67,500.00 44,942.64 22,557.36 67% 2567 ok 11.0 Food Entrepreneurship CCE of Tompkins County 36,587.00 26,204.89 10,382.11 72% 2568 NO 12.0 Urban Bus Stop Signage & Amenities TCAT 25,000.00 0.00 25,000.00 0% 2569 complete 13.0 DICC Heating & Roofing Replacement6, 7, 19 DICC 49,000.00 49,000.00 0.00 100% 2570 complete 14.0 Immigrant Services Catholic Charities 30,000.00 30,000.00 0.00 100% 2571 ok 15.0 Work Preserve Job Readiness Historic Ithaca 20,000.00 13,020.16 6,979.84 65% 2572 complete 16.0 2-1-1 Info and Referral Human Services Coalition 20,000.00 20,000.00 0.00 100% 2573 complete 17.0 A Place To Stay: Supportive Services Catholic Charities 15,925.00 15,925.00 0.00 100% 2574 ok 18.0 Housing For School Success: Year #2 ICSD 13,280.00 13,018.46 261.54 98% 2575 complete 19.0 CDBG Admin IURA 128,882.00 128,882.00 0.00 100% ok 22.0 Economic Development Loan Fund IURA 56,886.24 0.00 56,886.24 0% complete 9.0 Harriet Gianellis Child Care Center Tompkins Community Action 84,200.00 84,200.00 0.00 100% ok Unallocated 2017 CDBG16, 19, 25 N/A 0.00 0.00 0.00 N/A Total 770,260.24 548,783.59 221,476.65 71%

2017 HOME Activities 2767 canceled 3.0 402 South Cayuga Street17 Habitat for Humanity 0.00 0.00 0.00 100% 2768 ok 4.0 Housing Scholarship Program11 The Learning Web 65,592.00 52,119.08 13,472.92 79% 2769 ok 5.0 Security Deposit Assistance Catholic Charities 62,700.70 62,125.20 575.50 99.08% 2770 complete 21.0 828 Hector Street (CHDO) 23 INHS 41,378.00 41,378.00 0.00 100% 2771 complete 20.0 HOME Admin IURA 27,565.10 27,565.10 0.00 100% 2807 ok Unallocated 2017 HOME12, 17, 23, 24 N/A 4,314.08 0.00 4,314.08 N/A complete Home Admin (PI)22 N/A 2,217.30 2,217.30 0.00 100% ok Recaptured Funds (HP)15 N/A 5,000.00 0.00 5,000.00 N/A ok Unanticipated Program Income (PI)8 N/A 21,545.00 0.00 21,545.00 N/A Total 230,312.18 185,404.68 44,907.50 81%

2018 CDBG Activities 6002 ok 1.0 Neighbor to Neighbor Home Rehab Love Knows No Bounds 40,000.00 0.00 40,000.00 0% 6003 ok 2.0 Chartwell House Tompkins Community Action 200,000.00 0.00 200,000.00 0% 6004 ok 8.0 Ramp Loan Program FLIC 25,000.00 0.00 25,000.00 0% 6005 ok 9.0 Mini Repair INHS 32,500.00 0.00 32,500.00 0% 6006 ok 11.0 Hospitality Employment Training Program GIAC 110,000.00 0.00 110,000.00 0% 6007 ok 13.0 Volunteer Worker & Job Skill Training Finger Lakes ReUse, Inc. 71,800.00 0.00 71,800.00 0% 6008 ok 14.0 Work Preserve Job Training Historic Ithaca 67,500.00 0.00 67,500.00 0% 6009 ok 16.0 Targeted Urban Bus Stop Upgrades TCAT 13,500.00 0.00 13,500.00 0% 6010 ok 19.0 Immigrant Services Catholic Charities 30,000.00 5,000.00 25,000.00 17%

Page 1 of 2 IURA Grants Summary December 2018

ON TOTAL # SCHEDULE HUD ENTITLEMENT ACTIVITIES SPONSOR BUDGET EXPENDED UNEXPENDED % SPENT 6011 ok 20.0 Work Preserve Job Readiness Historic Ithaca 20,000.00 0.00 20,000.00 0% 6012 ok 21.0 2-1-1 Info and Referral Human Services Coalition 20,000.00 8,483.60 11,516.40 42% 6013 ok 22.0 Housing For School Success Year #3 Ithaca City School District (ICSD) 27,005.00 0.00 27,005.00 0% 6014 ok 23.0 CDBG Admin IURA 137,214.00 0.00 137,214.00 0% 6015 ok 25.0 Economic Development Loan Fund IURA 26,052.00 0.00 26,052.00 0% 6016 ok 17.0 Final Phase: Heating & Roofing 25 DICC 29,300.00 0.00 29,300.00 0% 6017 ok 18.0 Domestic Violence Center Renovation 25 Advocacy Center 9,960.72 0.00 9,960.72 0% ok Unallocated 2018 CDBG N/A 25,000.00 0.00 25,000.00 N/A Total 884,831.72 13,483.60 871,348.12 2%

2018 HOME Activities 8002 ok 3.0 402 South Cayuga Street INHS 150,000.00 0.00 150,000.00 0% 8003 ok 4.0 Housing Scholarship Program The Learning Web 65,592.00 0.00 65,592.00 0% 8004 ok 5.0 Security Deposit Assistance 24 Catholic Charities 48,250.00 10,803.00 37,447.00 22% 8004a ok 6.0 Security Deposit Inspections 24 TCA 2,500.00 0.00 2,500.00 0% 8005 ok 7.0 INHS Scattered Site 2 (CHDO) 24 IURA 100,000.00 0.00 100,000.00 0% 8006 ok 10.0 Additional Reserve (CHDO) 24, 26 TBD 95,730.84 0.00 95,730.84 0% 8007 ok Home Admin IURA 36,880.30 0.00 36,880.30 0% Total 498,953.14 10,803.00 488,150.14 2%

CDBG Spend Down Ratio (must be less than 1.5 by June 1st of each year (60 days prior to program year): CDBG Spend Down Ratio = total unexpended CDBG funds/most recent annual CDBG award NO Current Method: Total Unexpended CDBG funds: Line of Credit + CDBG Revolving Loan Fund: 1.639 Maximum Unexpended CDBG Funds to Satisfy 1.5 CDBG Spend Down Ratio 1,029,107 Amount Required to be Expended by 6/1 to Meet CDBG Spend Down Ratio of 1.5: 319,730

Total Unexpended HUD Entitlement Funds CDBG Activities 941,527.03 CDBG Program Income Activities 224,581.24 CDBG Revolving Loan Fund Balance 407,309.79 HOME Activities 533,057.64 HOME Program Income Activities 0.00 HOME Program Income Unassigned 0.00 Total Unexpended HUD Entitlement (Including PI) Funds 1,881,894.46

Page 2 of 2

Organizational Chart

Johanna Anderson Executive Director

Joe Bowes Patty Paolangeli Loralee Morrow Delia Yarrow Melody Susco LoraleeScott Reynolds Morrow Dir. of Real Estate Finance Director Dir. of Construction Dir. of Lending Dir. of Property Dir.Deputy of Construction Director Services Management Services Development

- Finance Manager: (1) - Construction - Loan Officer (1) - Development - Property Manager (4) - Operations/ - Sr. Real Estate - Accounting Manager Manager (1) - Lending Assistant (1) Manager (1) - Leasing Assistants (2) Programs Analyst (1) Developer (1) for the Org: (1) - Home Repair - Lending Associate - Strategic - Compliance Mngr (1) - Real Estate - Accounting Manager Specialists (2) (1) Communications - Maintenance (10) Developer (1) for PM: (1) - Construction - Receptionist (1) Manager (1) - Rental Assistant (1) - RED Associate (1) - Accounting Services Associates (1) - PM Specialist (1) - RED Project Associates: (3) Manager (1) CHDO Staff Experience & Organizational Capacity Checklist - Program Year 2019 CHDO Funding Check if See (Applicant name and date here) Adequate CHDO Staff & Experience Documentation (identify) Notes Comments: Capacity CHDO has paid staff to manage development project 1

Paid full-time staff 1a (payroll, w-2, w-4) previously submitted; please advise if required to submit again

Paid part-time staff 1a (payroll, w-2, w-4)

Contracted staff 1b (contract, w-9, 1099)

Lynn Truame, Senior Real Estate Developer, has relevant experience in: 2 resume attached

Homeownership development 2a (resume, other)

Rental development 2b

Other real estate development and management

Rehabilitation & other housing program administration

Other relevant experience ______

Joe Bowes, Director of R.E. Development has relevant experience in: 2 resume attached

Homeownership development 2a

Rental development 2b

Other real estate development and management

Rehabilitation & other housing program administration

Other relevant experience ______

CHDO Developer Capacity & Fiscal Soundness

Past and Current Performance 3 narratives attached

HOME / CHDO project performance 3a

Past development performance 3a

Housing program & Federal grant management performance 3b

Developer Capacity - CHDO 4 narratives attached Organizational structure to support development 4a

Management structure to support development 4b

Current pipeline / backlog 4c

Staff capacity (or consultant contract/plan to train) 4d

Board expertise / oversight 4e

Skills/capacity to market(for-sale) or manage (rental) units 4f

Developer Capacity - Development Team 5 narratives attached

All development team roles filled with qualified firms/persons 5a

Partners/consultants enhance CHDO capacity (if needed) 5b not applicable

Prior experience - Team successfully developed similar projects 5c

Team has demonstrated capacity to work together 5d

Fiscal Soundness 6 audit attached

Financial management 6a

Financial stability 6b

Liquidity 6c

Audit and reporting 6d

Portfolio & corporate liabilities 6e

Other Factors 7 narratives attached

Community relations 7a

PJ relations 7b

Lender relations 7d

Project-specific skills/capacity______

Certification Signature & Date The Community Housing Development Organization has documented it has staff with development experience; and has the organizational capacity and development team to implement the proposed CHDO project. JOHANNA B. ANDERSON 2321 AGARD ROAD, TRUMANSBURG, NY 14886 PHONE: 607-222-7140 · E-MAIL: [email protected] Provides leadership and management to advance the mission and vision of Ithaca Neighborhood Housing Services. Experienced in all aspects of nonprofit affordable housing development and programming that promote financial skills and stability for families and individuals. Proven ability to support and motivate staff through positive and professional direction to achieve organizational success. PROFESSIONAL EXPERIENCE Executive Director 2017 – Present Ithaca Neighborhood Housing Services, Ithaca, NY • Create the strategic vision that advances INHS’ mission and energizes all those associated with it, including Board members, staff, and community member and funders • Lead the development of organizational strategy and strategic planning, and communicate them clearly to stakeholders • Design, implement and monitor performance of program operating plans that provide clearly articulated goals and outcomes • Provide leadership and participation in organizations at the local, regional, state and national levels that promote and advance affordable housing and community development funding and programs • Build and maintain productive relationships with individuals, corporations, agencies and government bodies that provide funding and support to INHS • Represent INHS in communications with community members, stakeholders and funders • Ensure compliance with contracts, agreements and regulations relating to INHS programs • Maintain effective working relationships with professional consultants that provide services to INHS, including legal, accounting, audit and similar professionals • Provide vision and strategy for resource development programs and initiatives • Develop and implement short- and long-term plans for resource development • Supervise the preparation of capital and operating funding applications, including grants, loans and program-related investments • Provide administrative and leadership support to the INHS Board of Directors, its committees and its subsidiary corporations • Coordinate the development and refinement of corporate policies and procedures • Provide training opportunities for board and committee members that help to advance the mission • Oversee the general supervision of all INHS staff and program areas • Provide direct supervision for all six INHS program managers • Lead the INHS management team in program development, implementation and problem solving • Manage INHS relationships with funders and program stakeholders • Oversee financial and contract management systems • Work to maintain diversity of staff and Board. Implement Equal Opportunity guidelines • Participate in professional programs, conferences, and educational opportunities, as appropriate, within time and budget constraints Chief Credit Officer 2017 Home HeadQuarters, Inc., Syracuse, NY • Managed the process and production of all lending products • Provided oversight for an effective credit approval process that supports the credit risk appetite of the organization while also facilitating desired asset growth objectives • Implemented a system of credit analysis and quality assurance • Supervised the full range of managerial duties for the loan review, compliance, collections and credit analysis functions including adherence to policies and practices of the organization and applicable regulatory and governmental agencies • Examined files periodically for regulatory compliance and loan policy conformance • Developed and maintained reporting mechanisms that allowed for accurate and timely identification of risk profile in all credit categories • Provided quarterly analyses of the adequacy of the allowance for loan losses in conjunction with the CFO • Developed predictive models to increase efficiencies and improve the effectiveness of origination, compliance, servicing and portfolio management • Evaluated and recommended policy changes based on compliance or loan reviews and the dissemination of other pertinent facts • Responsible for the development of new loan products and explaining those product to customers and contractors Director of Community Development 2011 – 2017 Four Directions Development Corporation, Orono, ME • Managed operations, program and project priorities for a Native community development financial institution • Developed and maintained organizational and programmatic policies (including loan policies) to ensure consistent, high-quality program delivery • Oversaw compliance and implementation of federal programs (CDFI Fund, HUD, USDA) • Assisted the Executive Director with Board relations, community relations, and interagency relations that affect key outcomes and working partnerships • Managed and cultivated relationships with funders to secure and expand funding / revenue streams • Assessed market needs and conducted research towards designing new or improved loan and technical assistance products and services • Oversaw all aspects of residential program, including lending, counseling and educational services • Managed loan portfolio consisting of residential, small-business, consumer, and community development loans • Participated in residential, community outreach and financial education coalitions • Oversaw all loan processing and underwriting activities • Oversaw financial education and outreach to the five Native communities in Maine • Developed group and individual financial education curriculum • Responsible for the collection of delinquent accounts, loan modifications, and foreclosure activities • Oversaw VITA clinics and follow-up activities Pilot Program Administrator 2011 HIP Services, Inc., Hyattsville, MD • Designed and implemented an award-winning curriculum to strengthen the financial stability of homeowners who recently received loan modifications and/or emergency mortgage assistance • Created evaluation mechanisms to track the success of program participants and report impact to funders • Managed staff that provided program services in Washington, D.C. and surrounding counties Emerging Markets Officer, Southwest MN 2009 – 2010 Three Rivers Community Action, Inc. & Southwest MN Housing Partnership, Southwest MN • Provided outreach and financial education to East African, Latino, and Southeast Asian population, including presentations on affordable housing finance products and emerging issues • Initiated and fostered relationships with agencies and organizations to promote homeownership among diverse populations in a 21-county region • Assessed and filled gaps in communities for culturally-tailored lending products, financial education, homebuyer education, and individual counseling provided in Spanish, and multiple East African and Southeast Asian languages Project Coordinator 2006 – 2008 Project for Pride in Living, Inc., Minneapolis, MN • Collaborated on property acquisition, planning, financing, design, construction, marketing, and asset management of development projects • Managed department-wide design standards incorporating sustainable products and techniques • Designed, created, and tracked department and project-specific spreadsheets, including pro formas, budgets, and cash flow projections for single-family and multi-family projects • Managed grant reporting and program development updates for project funders • Supervised National Civilian Community Corps (12 – 15 people per season) • Authored multiple narratives for project-related and organizational websites • Drafted grant proposals, budget explanations, and print marketing pieces • Organized and coordinated public events to foster awareness and interest in affordable housing and sustainable development Affordable Housing Consultant 2006 Affordable Housing Resources, Denver, CO • Informed prospective home buyers of lending products available and matched into housing opportunities Communications Liaison 2005 – 2006 Forest City Enterprises Inc., Denver, CO • Served as point of contact for prospective and existing residents regarding redevelopment of Stapleton Airport into a master-planned sustainable community, specializing in affordable housing components EDUCATION Masters of Business Administration, Nonprofit Management Husson University, Bangor, ME Bachelor of Arts, English Literature Colorado State University, Fort Collins, CO CERTIFICATIONS Housing Development Finance Professional National Development Council, St. Paul, MN Affordable Housing Development: Funding & Finance NeighborWorks America, Multi-State Post-Purchase Homeownership Counseling NCHEC, Washington, DC Compliance with State and Federal Regulation NCHEC, Orono, ME Pre-Purchase Homeownership Counseling NCHEC, Memphis, TN Pre-Purchase Homeownership Education NCHEC, Chicago, IL Four Cornerstones Financial Literacy MN Office of Economic Opportunity, St. Cloud, MN

Scott D. Reynolds 929 Tioga St. Ithaca, NY 14850 (607) 379-2029 ______

SKILL SUMMARY

I have over 30 years experience in affordable housing doing homeowner lending, construction project management, and real estate development using all types of county/state/federal funding including Low Income Housing Tax Credits, NYS Housing Trust Funds, Community Development Block Grants, and HOME funds.

I am a successful and experienced grant writer, grant compliance administrator, and contracts manager for homeowner purchase, homeowner construction, and real estate development projects. I am an experienced real estate project developer for for-sale and rental projects from $100K to $15MM. I am an experienced construction project manager for both residential and light commercial construction with extensive experience with and a focus on sustainable building techniques including obtaining LEED and Energy Star certifications.

I am an advanced user/programmer for spreadsheet, word processing, computer-aided-design, database, desktop publishing, and system backup software. I can administer, support, and troubleshoot PC networks including software/hardware installation and support. I have eight years of professional experience in chemical engineering process research and scale-up, experiment design and coordination, and data collection and analysis.

I am adept at working unsupervised on many different and unrelated tasks and can learn new techniques/skills quickly with minimal training and support. I am able to schedule, prioritize, and perform varied tasks simultaneously under intense pressure from staff/funders/customers.

I work well in both team/group as well as hierarchical environments. I have supervised and trained other staff including engineers and technicians. I have extensive experience with internal agency communications including technical reports and external communication with customers and the community.

PROFESSIONAL EXPERIENCE

Deputy Director Ithaca Neighborhood Housing Services 06/16-present Ithaca, NY * Oversee all of INHS’s business and strategic planning as well as the day-to-day management of INHS’s computer and data systems. * Responsible for all agency policy compliance * Write grants * Report to funders, board, and committees. * Support a 30+ computer server based network including day-to-day troubleshooting and software/hardware purchase and installation. * Build and troubleshoot custom Access databases and other software solutions for the entire agency. * Develop and maintain complex financial models for the entire agency. * Collect data for the agency. Analyze data and write summary reports.

Director for Real Estate Development Ithaca Neighborhood Housing Services 01/10-06/16 Ithaca, NY * Responsible for all agency real estate development including all predevelopment, creating proformas, writing grants, development team assembly and supervision, construction project monitoring, and closeout. * Developed over $75MM in real estate. * Report to funders, board, and committees. * Support a 30+ computer server based network including day-to-day troubleshooting and software/hardware purchase and installation. * Build and troubleshoot custom Access databases and other software solutions for the entire agency. * Develop and maintain complex financial models for the entire agency. * Collect data for the agency. Analyze data and write summary reports.

Director of Construction Services Ithaca Neighborhood Housing Services 6/06-12/09 Ithaca, NY * Supervised 4 staff as well as manage a full construction management workload. * Responsible for $2,000,000 of yearly construction including reporting to funders, board, and committees. * Support a 15 computer NT server based network including day-to-day troubleshooting and software/hardware purchase and installation. * Build and troubleshoot custom Access databases and other software solutions for the entire agency. * Develop and maintain complex financial modeling for the entire agency. * Collect data for the agency. Analyze data and write summary reports.

Construction Manager Ithaca Neighborhood Housing Services 9/94-6/06 Ithaca, NY * Supervised numerous residential construction projects including specification writing, making CAD and hand drawings, contractor hiring, and overall project supervision. * Supported a 12 computer NT server based network including day-to-day troubleshooting and software/hardware purchase and installation. * Built and troubleshot custom Access databases and other software solutions for the entire agency.

Mini-Repair Specialist Ithaca Neighborhood Housing Services 9/92-9/94 Ithaca, NY * Responsible for the entire MiniRepair program, working with elderly/disabled clients to improve their housing and general living situations, including inspections and intake, repairs, and billing. * Supported a 10 computer Mac/PC hybrid network including day-to-day troubleshooting and software/hardware purchase and installation.

Carpenter Various firms 10/87-9/92 Ithaca, NY

Chemical Engineer Rohm and Haas Company 6/79-8/87 Philadelphia, Pa. 19137 * Designed, performed, and reported on experimental programs on a wide variety of chemicals and product lines. Successfully brought two projects to plant production. * Computer modeled and optimized both steady-state and dynamic processes for scale-up using statistical and regression techniques. * Conducted economic feasibility and cost/benefit analyses. * Coordinated and supervised numerous European vendor equipment trials for process scale-up. * Supervised one engineer and technician. * Provided technical assistance for chemical scale-up and start-ups both in the USA and on a six month assignment in France.

EDUCATION

B.S. Chemical Engineering, 1979 The Ohio State University, Columbus, OH Joseph L. Bowes, M.R.P. Director of Real Estate Development Ithaca Neighborhood Housing Services, Inc [email protected] ~ 607-277-4500x204

Professional Experience • Fourteen years of experience working in affordable housing. • Twelve years planning and project managing multi-million dollar affordable rental housing developments. • Responsibilities include: o deal structuring, o land acquisition, o municipal approvals, o loan closings and o construction management. • Financing experience with: o 9% and 4% Low Income Housing Tax Credits, NYS Housing Trust Funds, Community Development Block Grant, HOME, Tax Credit Assistance Program, Federal Home Loan Bank, HUD Section 202, Mitchell-Llama, HUD Section 236, Tax Exempt Bonds and Section 4 financing. • Project management experience with: o developments in a variety of settings and styles including housing for seniors and families, rehab, refinancing and new construction, single family, town house and multi- family construction in urban, suburban and rural settings.

July 2016 – Present Director of Real Estate Development, Ithaca Neighborhood Housing Services, Ithaca, NY. • Supervise two Real Estate Development staff members. • Develop long term real estate goals, prioritize projects and allocate real estate department staff and resources to specific projects; • Develop new projects that meet INHS’s mission to maintain a healthy, growing real estate development pipeline. Present new projects to INHS’s real estate development committee and Board for their consideration; • Monitor spending, contracts, project design, etc. of all INHS projects to ensure INHS policy and outside funder compliance; • Project manage the development of real estate for families, seniors and people with special needs - utilizing local, state, federal and private financing. • Prepare feasibility studies including analysis of zoning laws and building codes. • Present development proposals to municipal planning and zoning boards. • Coordinate architects, engineers, general contractors, development consultants and financing partners. • Prepare funding applications and structure multi-layered financing proformas. • Manage the closing and construction team for the owner/developer. • Sit on Board of Directors of Limited Liability Corporations, Limited Partnerships and Housing Development Fund Corporations charged with owning real estate developments. 1

Joseph L. Bowes, M.R.P. Director of Real Estate Development Ithaca Neighborhood Housing Services, Inc [email protected] ~ 607-277-4500x204

April 2014 – June 2016 Senior Real Estate Developer, Ithaca Neighborhood Housing Services, Ithaca, NY. • Project manage the development of multi-million dollar real estate for families and seniors combining local, state, federal and private funding sources. • Prepare feasibility studies including analysis of zoning laws and building codes. • Present development proposals to municipal planning and zoning boards. • Coordinate architects, engineers, general contractors, development consultants and financing partners. • Prepare funding applications and structure multi-layered financing proformas. • Manage the closing and construction team for the owner/developer. • Present real estate development projects and resolutions to internal Real Estate Development Committee and not-for-profit Board of Directors. • Sit on Board of Directors of Limited Liability Corporations, Limited Partnerships and Housing Development Fund Corporations charged with owning real estate developments.

2005-March 2013 Senior Real Estate Developer, PathStone Corporation, Rochester, NY. • Project manage the development of multi-million dollar real estate for families and seniors combining local, state, federal and private funding sources. • Prepare feasibility studies including analysis of zoning laws and building codes. • Present development proposals to municipal planning and zoning boards. • Coordinate architects, engineers, general contractors, development consultants and financing partners. • Prepare funding applications and structure multi-layered financing proformas. • Manage the closing and construction team for the owner/developer. • Supervise and provide technical assistance to junior developers and support staff. • Present real estate development projects and resolutions to internal Asset Management Committee and not-for-profit Board of Directors. • Sit on Board of Directors of Limited Liability Corporations, Limited Partnerships and Housing Development Fund Corporations charged with owning real estate developments.

June 1 to July 2013 Interim Senior Vice President for Real Estate Development, PathStone Corporation, Rochester, NY. • Appointed to the position of Senior Vice President during a 1.5 month leadership transition. Responsible for overseeing four Real Estate Developers and two support staff in New York, Pennsylvania, Puerto Rico and Indiana and managing a pipeline of 35 affordable housing projects totaling 260 million dollars of real estate development.

Spring 2005: Visiting Lecturer, Cornell University Dept. of City and Regional Planning, Ithaca, NY. • Co-taught a course entitled, Affordable Housing Policies and Programs to graduate and undergraduate students.

2

Joseph L. Bowes, M.R.P. Director of Real Estate Development Ithaca Neighborhood Housing Services, Inc [email protected] ~ 607-277-4500x204

Education

2000-2002: Cornell University, Masters in City and Regional Planning Department of City and Regional Planning, Concentration in Community Economic Development • Awarded the Michele Rapuano Award for Distinction in Design by Cornell University. • Received the American Planning Association Student Project Award. • Third Place finalist in the JP Morgan Chase Community Development Competition.

2001-2002: Graduate TA, Neighborhood Planning, Cornell University, Ithaca, NY. • Developed a plan to re-design a neighborhood food market and adjoining retail space. • Coordinated a group of fifteen graduate and undergraduate students working closely with business owners, neighborhood residents, architects, and financial institutions. • Won third place at the JP Morgan Chase Community Development Competition.

Summer 2000: Neighborhood Planner Intern, City of Ithaca Planning and Development, Ithaca, NY. • Worked with neighborhood planners, historic preservationist, city officials, business leaders and neighborhood residents to implement the city’s first neighborhood planning process. • Researched and analyzed socioeconomic and geographic data. • Organized and facilitated neighborhood meetings.

1994-1998: Syracuse University, Bachelor of Arts, Magna cum laude Maxwell School of Citizenship and Public Affairs; major Sociology with a minor in Economics. • Awarded an academic grant to study at Syracuse’s London, England campus.

Continuing Education & Affiliations • 2015-Present: Appointed Member of the Tompkins County Planning Advisory Board • 2015-Present: Board of Directors – Ithaca CarShare • 2012: Real Estate Symposium -- NeighborWorks® Training Institute • 2008: Using Bonds to Finance Affordable Housing – NeighborWorks® Training Institute • 2007-present: Member of the American Planning Association: Upstate Chapter • 2007: Preservation of Affordable Housing – Enterprise Foundation • 2006: State Environmental Quality Review – Lorman Institute • 2002: Financing Affordable Housing - Neighborhood Reinvestment Corporation

References Available Upon Request

Example Real Estate Development Projects Available Upon Request

3 LYNN CUNNINGHAM TRUAME 3287 Dubois Rd • Ithaca, NY 14850 • (607) 342-4548 • thetruames @gmail.com

Summary of Qualifications Sixteen years of progressively responsible experience in the development of publicly-funded affordable housing, including grant writing and administration, regulatory compliance, project and construction management, and collaboration with community-based organizations. Two years’ experience administering the HUD Entitlement Program for the City of Ithaca. Two additional years’ municipal government experience, serving as the staff link between the public and a volunteer board. Excellent written and oral communication skills. Demonstrated ability to work independently and manage multiple complex projects simultaneously.

Professional Experience Senior Housing Developer, Ithaca Neighborhood Housing Services, Ithaca, NY, August 2016-present • Responsible for evaluating feasibility, preparing funding applications, completing due diligence and closing bridge and permanent financing from a variety of public and private funding sources including HUD (HOME, CDBG); state, county, and municipal governments; commercial banks; Federal Home Loan Bank; and Low Income Housing Tax Credit and Historic Rehab Tax Credit equity partnerships. • Hire consultants and contractors, review specifications, oversee construction, develop and maintain project budgets. Complete project close-outs and maintain compliance with all funder reporting requirements.

Community Development Planner, Ithaca Urban Renewal Agency, Ithaca, NY April 2014-August 2016 • Manage the City of Ithaca’s HUD Entitlement Grant program and ensure compliance with all federal regulations and HUD requirements. • Develop and administer the 5-year Consolidated Plan, identifying priority community investment needs based on an analysis of ACS, census, and other data, consultation with community organizations, and extensive public outreach. • Prepare and implement the Annual Action Plan, complete NEPA environmental review on proposed projects, complete project set-up on HUD’s on-line Integrated Disbursement & Information System (IDIS), and oversee performance monitoring. Prepare and submit the Consolidated Annual Performance and Evaluation Report (CAPER). • Conduct community outreach activities to identify and jointly develop programs that will address unmet priority community development needs. • Manage the drafting of funding agreements to implement projects, in collaboration with legal counsel. • Provide staff support to IURA committees. • Supervise the IURA Contracts Monitor position.

Historic Preservation Planner, City of Ithaca, Ithaca, NY 2011-April 2014 • Coordinated all aspects of the City of Ithaca’s historic preservation program and ensured compliance with all NYS Certified Local Government (CLG) requirements. Achieved exemplary rating on 2012 CLG audit. • Devised and implemented new systems and procedures to improve the transparency and effectiveness of the regulatory process and increase public understanding of program benefits and requirements. Completed a major revision of the landmarks ordinance, wrote and published the City’s first historic district design guidelines, overhauled the ILPC web page, and developed a highly effective working relationship with the Building Division. • Served as staff to the Ithaca Landmarks Preservation Commission and the MLK Freedom Walkway Committee. Maintained updated commission training handbook, prepared and distributed monthly meeting packets, drafted resolutions, and ensured adherence to procedural requirements. • Worked closely with applicants to help define their projects and develop proposals that achieve the applicant’s goals while complying with program requirements. Increased average annual approval rate to 90%. • Worked closely with other City staff and with Common Council to ensure the consideration of preservation goals in such broader efforts as the Comprehensive Plan, the Collegetown Form Based Code, rezoning efforts, and the treatment of unsafe structures.

Construction and Project Management Consultant, Beacon Development Group, Seattle, WA 2004-2011 • Working remotely, supported and served as a resource to Seattle-based staff in the development of affordable housing projects. • Oversaw the work of the Construction Management team to ensure compliance with company standards. • Managed the contracting process with general contractors and project consultants, maintained standard company contract templates, and oversaw contract negotiations to ensure company-wide consistency. • Assisted in evaluating project feasibility, preparing funding applications, and completing due diligence. • Developed and maintained company marketing materials and prepared responses to Requests for Proposals. LYNN CUNNINGHAM TRUAME 3287 Dubois Rd • Ithaca, NY 14850 • (607) 342-4548 • [email protected] Professional Experience, continued

Construction Manager/Housing Developer, Beacon Development Group, Seattle, WA 2001-2004 • Developed 276 units of affordable housing in new construction, moderate rehab, and certified historic rehabilitation projects, with budgets totaling in excess of $51 million. • Evaluated feasibility, prepared funding applications, completed due diligence and closed bridge and permanent financing from a variety of public and private funding sources including HUD (HOME, CDBG); state, county, and municipal governments; commercial banks; Federal Home Loan Bank; and Low Income Housing Tax Credit and Historic Rehab Tax Credit equity partnerships. • Hired consultants and contractors, reviewed specifications, oversaw construction, developed and maintained project budgets, prepared monthly draws to a variety of public and private funders, and ensured regulatory and reporting compliance. • Provided technical back-up to other Beacon Project and Construction Managers during the construction process and oversaw their work to insure compliance with Beacon standards and procedures. • Provided project supervision and technical assistance to non-profit organizations engaged in housing development and supportive service activities.

Senior Housing Developer, Low Income Housing Institute, Seattle, WA, 2000 (promoted from Housing Developer, 1998-2000) • Managed new construction and rehabilitation projects, owned by the Low Income Housing Institute or by client organizations, with budgets totaling in excess of $15 million. • Wrote grant and loan applications that resulted in over $1.5 million in awarded funding. • Completed due diligence and closed bridge and permanent financing from a variety of funding sources.

Director of Preservation Services, Historic Ithaca, Inc., Ithaca, NY, 1993-1998 (promoted from Architectural Conservator, 1989-1993) • Secured financing for and managed construction and maintenance projects at properties owned by Historic Ithaca, Inc. • Headed Technical Assistance Program that provided information, guidance and support to hundreds of individuals annually and helped over 450 building owners research, plan, and carry out the renovation or repair of their homes. • Managed revolving fund that provided low interest loans to assist homeowners with rehabilitation costs. • Initiated the successful campaign to create state enabling legislation and the first local law in New York State to provide property tax incentives for the rehabilitation of historic buildings.

Trainings Undoing Racism, 2012, the People’s Institute for Survival and Beyond Energy Conservation in Historic Buildings, 2011, NYSERDA/Preservation League of New York State Green Strategies for Historic Buildings, 2009, National Preservation Institute Project Management, Design Development, Design Review, and Cost Reduction Techniques for Project Managers, 2002, Impact Capital Assessing Capital Needs and Replacement Reserve Levels, 2001, Impact Capital Building Envelope Technology, 2000, Walsh Construction Company Multi-family Housing Finance, 1999, National Development Council Low Income Housing Tax Credit Compliance, 1999, Washington State Housing Finance Commission Planning for Relocation, 1999, King County, WA

Education Master of Arts, Cornell University, Ithaca, NY, 1991 City and Regional Planning, Program in Historic Preservation Planning

Bachelor of Arts, Cum Laude, Michigan State University, East Lansing, MI, 1986 Double major English and History, with departmental specialization in Historic Preservation Phi Beta Kappa, Phi Kappa Phi, Golden Key National Honor Society Appointments and Publications Member, Application Review Committee, Tompkins County Housing Affordability and Trust Fund, 2010. Commissioner, Ithaca Landmarks Preservation Commission. 2005-2009. Truame, Lynn C. and Carol Kammen. Architectural Heritage of Tompkins County. Ithaca, NY: DeWitt Historical Society, 2002. 275 S. VanDorn Road 607-280-1441 Cell Ithaca, NY 14850 [email protected] Patricia Paolangeli

Education Graduate Ithaca High School Ithaca, NY Graduate T-S-T Boces Cosmetology Ithaca, NY 2003 to 2005 Phoenix University (Online) Business Management courses (24 credits)

Certifications 2000 New York State Notary Public 2002 Nonprofit Housing Management Specialist, (NHMS®) Consortium for Housing & Asset Management Former Accredited Residential Manager, (ARM®) with Institute of Real Estate Management (1998 to 2009)

Additional Neighborhood Works of America ® Training Institute Courses: Training CFO Convening workshops annually. (Budgeting, Cash Flow Analysis, Consolidating Financial Reports, Financial Ratios, Audited Financial Statement, & Property & Asset Management workshops). Financial Management for Decision Makers, Housing Management for a Nonprofit, Using Community Development Block Grants (Federal Funding) & Using HOME Program funds (Federal Funding), & other IREM courses. New York Tenant and Landlord Law (Lorman Training) Lead-Safe Work practices training/certifications (HUD sponsored) How to Handle people with tact and skill (Fred Pryor Seminar)

Experience 2005 to Present Ithaca Neighborhood Housing Ithaca, NY Director of Finance This position reports directly to the Executive Director. Budgeting, forecasting and strategic planning; preparation of financial statements; supervision of payments and collections; credit risk and treasury management; chief liaison with external auditing firms, government agencies, and financial institutions. Daily responsibilities highlighted below. • Manage 25+ Million dollar asset portfolio (Loan & Note Receivables and Real Estate) • Produce monthly financial statements for Finance Committee & Board. • Escrow and reserve analysis for rental property portfolios. • Grant contract compliance, monitoring & reporting. (Federal & State) • Maintain general ledger in MIP Fund Accounting software. • Accounts payable & accounts receivable (Cash & Accrual). • Manage bank accounts with monthly reconciliation to General Ledger. • Human Resource Manager- Payroll, Benefits, 403b, FSA and SEP IRA’s. • Maintain agency’s insurance policies including, Health, Life, & Property. • Annual Financial Audit’s. Parent Organization, subsidiaries & LIHTC LLC’s • Track and monitor loan receivables, pre-development & construction ledgers. • Cash flow projections. • Prepare annual budgets with monthly budget to actual monitoring & reporting.

1997–2005 Ithaca Neighborhood Housing Ithaca, NY Assistant Property Manager • Responsible for accounts payable & receivable for all rental properties (Process receipts, purchase offers, invoices, checks & filing). • Pull end of month reports and close general ledger monthly and yearly. • Process and track tenant security deposits. • Process and make necessary journal entries and adjustments to general ledger. • Track and maintain applicants, tenant records, property files, lease-ups. • Track and maintain maintenance work orders. Generate monthly and quarter reports.

1995 to 1997 RABCO Management Ithaca, NY Office Manager/Bookkeeper • Account payable & receivable including payroll. • Track and maintain and reconcile 5 bank accounts for different rental properties. • Generate monthly operating statements for 4 different rental properties (380 Units).

1992 to 1995 Atlantic Mortgage Banking Ithaca, NY Office Manager/Property Manager • Accounts payable & receivable. Escrow Analysis. Process mortgage payments.

• Bank reconciliation for multiple accounts. Payroll and payroll reports

• Monitor assets & liabilities. Monthly account back up & reporting. • Generate reports for U.S. Treasury Dept. & NYS Banking Department.

• Worked directly with accountants and participated in financial audits.

Skills Proficient with the following PC Software programs and applications: Sage software (MIP Fund Accounting), Giftworks (Donor Software), Yardi Property Management (accounting), Quick Books Pro and all Microsoft Office programs. Extensive knowledge of Federal Procurement Standards and Contract compliance; including NYS Affordable Housing Corp., Community Development Block Grants and HOME Program funds. Excellent communication and time management skills.

References Professional & Personal references available upon request.

Ithaca Neighborhood Housing Services

CHDO Development Experience

Please see the Statement of Qualifications that was submitted in satisfaction of the Community Service Experience narrative requirement for a more detailed description of INHS’ development project experience to date. Below is a list of completed projects dating to 2009.

Completed Projects: 2009 – 2018

Project Name Location Project Type # of Units Completion Date Ithaca City Apartments City of Ithaca Rental 98 12-31-18 828 Hector City of Ithaca For Sale 1 8-1-2018 304 Hector City of Ithaca For Sale 1 12-15-17 202 Hancock TH City of Ithaca For Sale 7 9-1-17 210 Hancock MFA City of Ithaca Rental 59 9-15-17 203 Third Street City of Ithaca For Sale 1 03-01-16 Stone Quarry Apartments City of Ithaca Rental 35 09-01-15 314 S. Plain St. City of Ithaca For Sale 1 9-30-14 214 Second St. City of Ithaca For Sale 2 9-30-14 Holly Creek Phase II Town of Ithaca For Sale 11 06-30-14 Breckenridge Place City of Ithaca Rental 50 12-31-13 Poets Landing Village of Dryden Rental 72 6-30-13 10 Hawthorne Circle City of Ithaca For Sale 1 6-15-13 Holly Creek Phase I Town of Ithaca For Sale 11 12-31-12 305 E. Falls St. City of Ithaca For Sale 2 11-15-12 528-30 Chestnut St. City of Ithaca For Sale 4 6-15-12 711 Hancock St. City of Ithaca For Sale 1 3-15-12 709 Hancock St City of Ithaca For Sale 1 6-18-11 313-317 S. Corn St. City of Ithaca For Sale 4 6-30-10 407-09 Elm St. City of Ithaca For Sale 3 6-30-10 515 W. Clinton St City of Ithaca For Sale 1 1-18-10 Cedar Creek City of Ithaca Rental 39 9-1-09 106 Westfield Dr. City of Ithaca For Sale 1 6-16-09 Total Units 406

STATEMENT OF QUALIFICATIONS

OVERVIEW Ithaca Neighborhood Housing Services (INHS) is a 501(c)(3) corporation that was established in 1976 to revitalize Ithaca’s downtown neighborhoods and promote affordable housing. Over the past four decades, INHS has significantly expanded its services, service area and resources including affiliating 2014 with Better Housing for Tompkins County (BHTC), another affordable housing not-for-profit. Today, INHS and BHTC are a $43 million affordable housing provider that operates a comprehensive array of housing programs in Tompkins County and adjacent counties.

PROFESSIONAL AFFILIATIONS AND CERTIFICATIONS • Certified by the U.S. Department of Treasury as a Community Development Financial Institution (CDFI). • Licensed by the New York State Department of Financial Services as an Exempt Mortgage Banker. • Certified as both a Community Housing Development Organization (CHDO) and a Community Based Development Organization (CBDO). • Certified by the U.S. Department of Housing and Urban Development as a HUD Counseling Agency. • Chartered by NeighborWorks America as a NeighborWorks Organization. • Certified by the Neighborhood Reinvestment Corporation as a Full Cycle Lender. • Certified by the U.S. Environmental Protection Agency as an Energy Star builder.

PROGRAMS AND SERVICES Loan Programs

• Total Lending: INHS-BHTC have closed over $58 million in loans. These loans have leveraged over $99 million in conventional financing. Its delinquency and default rates are well below the national averages for market rate prime loans.

• Purchase Assistance to First Time Homebuyers: Second mortgage financing in tandem with first mortgages from banks, credit unions and SONYMA. Products include amortizing, deferred and forgivable loans. INHS-BHTC have assisted over 1,100 first time homebuyers with loans that total nearly $26 million. These funds have leveraged nearly $81 million in conventional first mortgage loans and homebuyer equity.

• Home Improvement Loans to Existing Homeowners: INHS-BHTC provides low cost financing and technical assistance with construction to address a broad range of structural, energy conservation, and capital needs for existing homeowners. INHS-BHTC have assisted over 1,300 clients for over $27 million.

• Rental Housing Development: INHS/BHTC have provided loans to private and non-profit developers to finance affordable rental housing. Loans totaling over $14 million have helped to produce 740 new rental units.

Education and Counseling Programs

• Homebuyer Education: INHS provides nationally certified classroom training and one-to-one counseling to position renters to become successful homebuyers. Pre-purchase classes are offered in both eight hour group and online versions. INHS has provided education and one-on-one counseling to nearly 5,800 households.

Real Estate Development

• Overall: INHS/BHTC have been the sole developer or partnered with non-profit and for profit developers to create over 925 units of housing for over $155 million.

• Rental Housing Development: INHS/BHTC have been the sole developer or partnered with non- profit and for profit developers to create 740 units of rental housing. INHS services included pre- development planning, grant writing, construction management, financing, property management and contract compliance. Currently, INHS/BHTC have 120 new rental units under construction and over 350 new rental units in predevelopment.

• For Sale Housing Development: INHS develops new one- and two-family detached homes and multiunit attached homes that are developed as permanently affordable housing under a Community Land Trust model. INHS has completed 42 units Energy Star or LEED-certified homes. INHS has 1 unit under construction and 16 new units in predevelopment. All homes developed by INHS are sold to low-income first time homebuyers and placed into its Community Housing Trust.

• Community Housing Trust: INHS places the for sale housing it creates into a trust to create homes that remain permanently affordable to future homebuyers. INHS uses grants and subsidies to sell the homes at well below market prices while retaining ownership of the land. Buyers of CHT homes buy the home and lease the land from INHS. Buyers agree to sell their homes only to other low to moderate income buyers and to return excess gains on sale to the trust. There are currently 58 homes in the trust.

• House Recycling: INHS targets eyesore properties for acquisition, rehabilitation and sale as part of its neighborhood revitalization strategy. INHS/BHTC have completed 167 House Recycling units, primarily in the City of Ithaca, and has 2 new units in predevelopment. All of these homes have been sold to low- income first time homebuyers. INHS also provides low-cost financing to enhance affordability.

Rental Housing Management

• Full Service Property Management: INHS-BHTC owns or manages 474 units of residential, community and commercial spaces in 67 buildings in 35 locations. All rentals serve a low and moderate- income market. Many INHS buildings were previously dilapidated and were extensively renovated by INHS as part of a neighborhood revitalization strategy. The property management staff is LIHTC certified.

Repairs Program

• Elderly and Disabled Homeowners: INHS_BHTC provides emergency or small repairs that enable these at risk homeowners to safely remain in their homes. INHS/BHTC have provided over 8,000 household repairs.

FINANCIAL STRENGTH INHS and BHTC together form a complex, multi-faceted business that includes 4 lines of business and nearly 30 affiliated companies and corporations, both for-profit and not-for-profit.

INHS and BHTC are very strong and stable organizations that have $43 million in total assets and $36 million in net assets. INHS-BHTC have over $14 million in assets that are dedicated solely to lending, including unrestricted funds that may be used for a wide variety of purposes and in a large geographic area.

INHS and BHTC regularly receive unqualified opinions from their auditors. They have successfully managed tens of millions of dollars of contracts from state and Federal housing agencies, non-profit corporations and private entities.

ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

Ithaca, New York

FINANCIAL REPORT

For the Years Ended December 31, 2017 and 2016

ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

TABLE OF CONTENTS DECEMBER 31, 2017 AND 2016

Independent Auditor’s Report ...... 1-2

Audited Financial Statements:

Consolidated Statements of Financial Position ...... 3 Consolidated Statements of Activities ...... 4 Consolidated Statements of Functional Expenses ...... 5-5a Consolidated Statements of Cash Flows ...... 6-6a

Notes to Financial Statements ...... 7-43

Supplementary Financial Information:

Consolidating Schedule of Financial Position - 2017 ...... 44-44a Consolidating Schedule of Financial Position - 2016 ...... 45-45a Consolidating Schedule of Activities - 2017 ...... 46-46a Consolidating Schedule of Activities - 2016 ...... 47-47a Consolidating Schedule of Functional Expenses - 2017 ...... 48-48a Consolidating Schedule of Functional Expenses - 2016 ...... 49-49a

Report Required Under Government Auditing Standards:

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...... 50-51

Reports Required Under the Uniform Guidance:

Independent Auditor's Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by Uniform Guidance ...... 52-53

Schedule of Expenditures of Federal Awards ...... 54

Notes to Schedule of Expenditures of Federal Awards ...... 55

Schedule of Findings and Questioned Costs ...... 56

INDEPENDENT AUDITOR’S REPORT

Board of Directors Ithaca Neighborhood Housing Services, Inc. and Subsidiaries Ithaca, New York

Report on the Financial Statements We have audited the accompanying consolidated financial statements of Ithaca Neighborhood Housing Services, Inc. and Subsidiaries, which comprise the Consolidated Statements of Financial Position as of December 31, 2017 and 2016, and the related Consolidated Statements of Activities, Functional Expenses, and Cash Flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the standards prescribed by the New York State Division of Housing and Community Renewal, 1995 edition, and the New York State Affordable Housing Corporation. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Insero & Co . CPAs, LLP Rochester | Ithaca | Corning | Cortland | Watkins Glen | (800) 232-9547 | www.inserocpa.com

Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Ithaca Neighborhood Housing Services, Inc. and Subsidiaries as of December 31, 2017 and 2016 and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The consolidating schedules on pages 44-49a are presented for purposes of additional analysis and are not part of the basic financial statements. The Schedule of Expenditures of Federal Awards on page 54, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Consolidating Schedules and the Schedule of Expenditures of Federal Awards are fairly stated, in all material respects, in relation to the consolidated financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 12, 2018 on our consideration of Ithaca Neighborhood Housing Services, Inc. and Subsidiaries’ internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Ithaca Neighborhood Housing Services, Inc. and Subsidiaries’ internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Ithaca Neighborhood Housing Services, Inc. and Subsidiaries' internal control over financing reporting and compliance.

Respectfully Submitted,

Insero & Co. CPAs, LLP Certified Public Accountants

Ithaca, New York April 12, 2018

2 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION DECEMBER 31, ASSETS 2017 2016 Current Assets Cash and Cash Equivalents: Checking Accounts: Unrestricted $ 7,810,576 $ 2,746,536 Restricted 1,219,073 693,327 Real estate tax escrow 190,130 150,189 Reserve for capital improvements 644,595 625,594 Reserve for operations 580,695 561,378 Total Cash and Cash Equivalents 10,445,069 4,777,024 Accounts receivable 278,586 227,529 Developer fees receivable, current portion 2,051,573 15,616 Loans receivable, current portion 418,089 414,693 Prepaid expenses 49,916 102,687 Buildings held for resale 515,000 292,000 Pre-development costs 496,953 153,330 Total Current Assets 14,255,186 5,982,879 Loans receivable, net, noncurrent portion 8,021,509 7,555,333 Mortgage origination fees, net - 47,099 Notes receivable 8,223,104 3,544,721 Accrued interest receivable 910,540 744,450 Other receivables 937,933 199,139 Developer fees receivable, net of current portion 937,135 231,491 Investment in subsidiaries 74,658 74,840 Construction in progress 1,004,345 392,297 Fixed assets, net 2,550,334 4,298,001 Total Assets $ 36,914,744 $ 23,070,250 LIABILITIES AND NET ASSETS/STOCKHOLDER'S EQUITY Current Liabilities Accounts payable $ 283,310 $ 85,368 Accrued liabilities 26,648 57,102 Restricted grant income/unearned income 5,375 7,604 Due to affiliate 14,737 773 Deferred revenue 46,689 78,824 Security deposits payable 89,682 122,045 Line-of-credit payable 300,000 200,000 Mortgages, notes and loans payable, current portion 1,020,267 707,605 Total Current Liabilities 1,786,708 1,259,321 Mortgages, notes and loans payable, net of current portion 618,086 2,122,833 Compensated absences 41,056 41,081 Total Liabilities 2,445,850 3,423,235 Net Assets Unrestricted - Undesignated 25,732,591 11,341,897 - Board designated 1,225,290 1,186,972 Temporarily restricted 5,766,016 4,825,601 Permanently restricted 1,491,983 2,131,404 Total Net Assets 34,215,880 19,485,874 Total Stockholder's Equity 253,014 161,141 Total Liabilities and Net Assets/Stockholder's Equity $ 36,914,744 $ 23,070,250 See Notes to Financial Statements 3 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED DECEMBER 31,

CHANGES IN UNRESTRICTED NET ASSETS 2017 2016 Public Support Contributions $ 165,368 $ 173,680 Revenue Program income 51,863 68,135 Rental income 1,460,285 1,499,455 Interest income 234,122 174,478 Management fees 348,621 561,432 Gain on sale of fixed assets 5,228,570 - Developer fees 4,118,437 683,503 Other 144,633 108,582 Net assets released from restrictions 7,177,576 3,369,676 Total Unrestricted Support and Revenue 18,929,475 6,638,941 Expenses Program expenses 2,610,730 3,560,132 Management and general 1,789,587 1,603,516 Fundraising 8,091 14,159 Total Expenses 4,408,408 5,177,807 TOTAL CHANGES IN UNRESTRICTED NET ASSETS/ STOCKHOLDER'S EQUITY 14,521,067 1,461,134 CHANGES IN TEMPORARILY RESTRICTED NET ASSETS Public Support City of Ithaca: Community Development Block Grant 30,000 35,000 Home Investment Partnership Program 393,907 245,919 Contributions 116,666 23,333 Tompkins County Affordable Housing 340,000 580,000 Tompkins County Community Housing Trust Program 446,107 488,505 NYS Division of Housing and Community Renewal 91,526 93,054 Neighborhood Reinvestment Corporation 1,047,758 154,719 Affordable Housing Corporation 128,400 - HOME Program - 39,936 Local Initiatives Support Corporation 4,000,000 - NYS Energy Research and Development Authroity 454,026 - Other grants 9,985 9,517 Revenue Interest income 130,195 115,633 Program income - 15,999 Net assets released from restrictions (6,248,155) (3,342,979) TOTAL CHANGES IN TEMPORARILY RESTRICTED NET ASSETS 940,415 (1,541,364) CHANGES IN PERMANENTLY RESTRICTED NET ASSETS Public Support Neighborhood Reinvestment Corporation Capital Grant 290,000 425,000 Net assets released from restrictions (929,421) (26,697) TOTAL CHANGES IN PERMANENTLY RESTRICTED NET ASSETS (639,421) 398,303 TOTAL CHANGES IN NET ASSETS/STOCKHOLDER'S EQUITY 14,822,061 318,073 NET ASSETS/STOCKHOLDER'S EQUITY, BEGINNING OF YEAR 19,647,015 19,328,975 OTHER CHANGES IN NET ASSETS/STOCKHOLDER'S EQUITY (182) (33) NET ASSETS/STOCKHOLDER'S EQUITY, END OF YEAR $ 34,468,894 $ 19,647,015

See Notes to Financial Statements 4 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FUNCTIONAL EXPENSES FOR THE YEARS ENDED DECEMBER 31,

2017 Program Management Services and General Fundraising Total

Salaries $ 401,469 $ 578,032 $ $ 979,501 Pension expense 40,943 70,419 111,362 Employee benefits 132,537 132,537 Payroll taxes 90,136 90,136 Total Salaries and Related Expenses 442,412 871,124 - 1,313,536 Professional fees 31,070 105,576 136,646 Contract services 30,418 493,849 524,267 Purchases and supplies 4,848 50,312 55,160 Telephone 2,287 8,859 11,146 Postage and shipping 3,038 6,639 9,677 Printing and copying expense 15,748 15,748 Occupancy 9,584 220 9,804

Building maintenance and service 115,164 854 116,018 Utilities 131,472 7,451 138,923 Equipment maintenance and repairs 16,556 16,556 Property taxes 316,654 316,654 Grants 654,936 24,773 679,709 Dues and subscriptions expense 7,872 15,781 23,653 Travel and meetings 652 38,372 39,024 Truck expense 85 21,041 21,126 Tools 50 4,166 4,216 Insurance 74,092 22,417 96,509 Interest 105,216 105,216 Neighborhood activities 24,151 24,151 Miscellaneous 132,071 13,643 145,714 Marketing 7,770 7,770 Fundraising 8,091 8,091 Loans forgiven 211,142 211,142 Loss on sale of buildings - Construction development write-offs 51,281 51,281 Bad debts 44,197 200 44,397 Income tax 25 25 Total Expenses Before Depreciation and Amortization 2,368,566 1,749,502 8,091 4,126,159 Depreciation and Amortization 242,164 40,085 282,249 Total Expenses $ 2,610,730 $ 1,789,587 $ 8,091 $ 4,408,408

See Notes to Financial Statements

5

2016 Program Management Services and General Fundraising Total

$ 429,638 $ 572,155 $ $ 1,001,793 81,349 81,349 177,360 177,360 119,938 119,938 429,638 950,802 - 1,380,440 48,445 74,765 123,210 8,882 286,996 295,878 513 46,914 47,427 257 9,039 9,296 371 9,143 9,514 398 13,742 14,140 - 149,262 103 149,365 115,567 6,832 122,399 12,727 12,727 265,751 265,751 587,806 6,108 593,914 3,700 13,822 17,522 966 36,942 37,908 19,114 19,114 402 442 844 84,742 31,860 116,602 131,789 131,789 13,194 13,194 142,953 7,410 150,363 499 20,253 20,752 14,159 14,159 235,969 235,969 264,006 264,006 817,455 817,455 15,967 500 16,467 438 438

3,305,776 1,560,708 14,159 4,880,643 254,356 42,808 297,164 $ 3,560,132 $ 1,603,516 $ 14,159 $ 5,177,807

5a ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,

2017 2016 Cash Flows from Operating Activities Changes in net assets and stockholder's equity $ 14,821,879 $ 318,040 Adjustments to reconcile changes in net assets to net cash provided by operating activities: Depreciation and amortization 282,249 297,164 Loss in subsidiary 182 33 Loss on disposal of construction in process, net 53,494 816,496 (Gain) on sale of fixed assets (5,228,570) - Loans receivable forgiven 211,142 235,971 Loans payable forgiven (116,666) (23,333) (Increase) decrease in: Accounts receivable (51,057) 38,278 Developer fees receivable (2,741,601) 460,007 Other receivables (738,794) (99,139) Accrued interest receivable (166,090) (117,209) Prepaid expenses 52,771 (2,469) Increase (decrease) in: Accounts payable 197,942 (49,394) Accrued liabilities/Due to affiliate (16,490) 5,452 Restricted grant income/Unearned income (2,229) (6,296) Deferred revenue (32,135) (11,926) Security deposits (32,363) 8,933 Compensated absences (25) (19,914) Net Cash Provided by Operating Activities 6,493,639 1,850,694 Cash Flows from Investing Activities Purchase/Construction of buildings held for resale (884,000) (421,000) Pre-development expenditures (1,030,965) (1,253,240) Pre-development cost proceeds 687,342 2,236,138 Construction in progress expenditures (1,370,783) (1,090,800) Purchase of fixed assets (262,864) (375,708) Proceeds from sale of mortgage origination costs 41,075 - Proceeds from sale of fixed assets 6,962,876 - Proceeds from sale of buildings held for resale 661,000 129,000 Proceeds from sale of houses/construction in progress 705,241 2,213,164 New notes receivable (4,678,383) (924,721) New loans granted (1,421,693) (1,534,389) Principal collected on loans receivable 740,979 776,977 Net Cash Provided (Used) by Investing Activities 149,825 (244,579)

See Notes to Financial Statements

6 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,

2017 2016 Cash Flows from Financing Activities Payments on line-of-credit $ (200,000) $ (251,000) Proceeds from line-of-credit 300,000 451,000 Proceeds from mortgages/loans 1,387,353 120,000 Mortgage payable repayments (2,462,772) (2,204,126)

Net Cash (Used) by Financing Activities (975,419) (1,884,126)

NET CHANGE IN CASH AND CASH EQUIVALENTS 5,668,045 (278,011)

Cash and Cash Equivalents, January 1, 4,777,024 5,055,035

Cash and Cash Equivalents, December 31, $ 10,445,069 $ 4,777,024

Supplemental Information Interest paid $ 105,216 $ 131,789 Loans receivable forgiven 211,142 235,971 Loans payable forgiven 116,666 23,333 Income tax paid on behalf of subsidiaries 2,411 2,858

See Notes to Financial Statements

6a ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies

Organizational Information and Mission Ithaca Neighborhood Housing Services (INHS) was established in 1976 to expand housing opportunities for low and moderate income people, revitalize deteriorated buildings and neighborhoods and develop and manage affordable homes. Its primary service area is the City of Ithaca, but its full service area includes Tompkins County and the six counties surrounding Tompkins County.

INHS is a Type B Corporation established under Section 201 of New York Not For Profit Corporation law. INHS is recognized by the Internal Revenue Service as exempt under Section 501(c)(3) of the Internal Revenue Code.

Professional Affiliations and Certifications

 Certified by the U.S. Department of Treasury as a Community Development Financial Institution (CDFI).

 Licensed by the New York State Department of Financial Services as an Exempt Mortgage Lender.

 Certified by the City of Ithaca and New York State as a Community Housing Development Organization (CDHO).

 Certified by the City of Ithaca as a Community Based Development Organization (CBDO).

 Certified by the U.S. Department of Housing and Urban Development as a HUD Counseling Agency.

 Chartered by NeighborWorks America as a NeighborWorks® Organization.

Nature of Operations

Home Ownership Promotion Home Purchase Loans - INHS provides financing for homebuyers seeking to buy a home. INHS loans are typically second mortgage loans which finance down-payment and closing costs; eliminate the need for Private Mortgage Insurance; or fund housing rehabilitation projects. These loans are usually packaged with first mortgage loans from conventional lenders.

Homebuyer Education - INHS offers homebuyer education classes and one-to-one counseling that provides a comprehensive overview of the information people need to become successful homebuyers.

7 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies - Continued

Homeownership Preservation Home Improvement Loans - INHS provides low-interest loans or grants for a wide variety of home improvement projects. INHS stresses the correction of health and safety issues, energy conservation improvements, and long-term building maintenance.

Mini-Repair Program - The Mini-Repair program is designed to assist very low-income elderly and handicapped homeowners with small or emergency repairs. The goal is to keep small problems from becoming big problems, especially if these problems could threaten the health and safety of the occupant.

Real Estate Development For Sale Housing - INHS develops for sale homes through either new construction or substantial rehabilitation and sells them to first time homebuyers. All new or renovated single family homes are sold under its Community Housing Trust program. The Community Housing Trust is designed to ensure properties sold to first time homebuyers remain permanently affordable to future generations of buyers. This is accomplished through the use of housing subsidies and deed restrictions.

Rental Housing Development - INHS develops new rental housing on its own or in partnership with other developers. Some rental properties developed by INHS are owned by subsidiary corporations in which INHS has an ownership interest. In addition to its role as developer, INHS often also functions as a lender for some of these projects.

All new construction projects are built to Energy Star and LEED standards. The LEED program requires a comprehensive approach to design and construction that promotes long- term sustainability in building and community design.

Asset and Property Management INHS owns and manages a portfolio of affordable rental housing, office and retail space located in Tompkins County. INHS rental properties are designed to be rented to low or moderate income households at below market rate rents intended to remain permanently affordable.

INHS has property management agreements to manage rental housing owned by subsidiary corporations in which INHS holds an ownership interest. These properties are managed in accordance with the provisions of long-term regulatory agreements created by funding agencies and according to low income housing tax credit programs.

8 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies - Continued

Basis of Accounting The financial statements of INHS have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities.

Principles of Consolidation The 2017 and 2016 consolidated financial statements include the accounts of INHS, NHS Housing Corp, INHS Breckenridge, Incorporated and INHS Poets Landing, Incorporated, INHS Stone Quarry, Incorporated, and INHS Hancock, Incorporated. All significant inter- company accounts and transactions have been eliminated in consolidation.

INHS Subsidiary Corporations Subsidiary corporations both not-for profit and for-profit are created for the development of affordable housing units. Please refer to Principles of Consolidation and Investments in Subsidiaries for further financial information. The following entities are subsidiaries of INHS.

NHS Housing Corporation - For-profit subsidiary corporation established in 2005. INHS is the sole shareholder in the corporation. In 2007, NHS Housing Corporation became a co- managing member and .00051% owner of Cedar Creek Housing, LLC, which owns a 39- unit low income tax credit project.

Cedar Creek Housing LLC - Limited liability corporation partially owned by the NHS Housing Corporation and Marketview Housing, a subsidiary of Pathstone Development Corporation (a partner in the project). In 2009, INHS started managing the 39-unit complex under the federal low income tax credit housing program. Cedar Creek Housing, LLC pays INHS a monthly management fee and maintenance reimbursements.

INHS Breckenridge Incorporated - For-profit subsidiary corporation established in 2012. INHS is the sole shareholder in the Corporation. INHS Breckenridge, Inc. is the co- managing member of Breckenridge on Seneca, LLC, which owns the 50-unit Breckenridge Place project.

Breckenridge on Seneca LLC - A limited liability corporation partially owned by INHS Breckenridge Inc., and INHS Pathstone Inc, a subsidiary of Pathstone Development Corporation (a partner in the project). Construction to build the 50-unit high-rise apartment building, referred to as Breckenridge Place, under the federal low income tax credit housing program, started in 2012 and was completed in 2013.

9 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies - Continued

INHS Subsidiary Corporations - Continued

Finger Lakes Housing Development Fund Corporation - Not-for-profit corporation established in 2007. INHS is the sole member of the Corporation. Finger Lakes HDFC owns the land under the Breckenridge Place project and leases it to Breckenridge on Seneca, LLC.

INHS Stone Quarry Incorporated - For-profit subsidiary corporation established in 2014. INHS is the sole shareholder in the corporation. INHS Stone Quarry, Inc. is the co- managing member of Stone Quarry Apartments, LLC, which owns the 35-unit Stone Quarry Project.

Stone Quarry Apartments LLC - a limited liability corporation partially owned by INHS Stone Quarry Inc., and Pathstone Stone Quarry Inc, a subsidiary of Pathstone Development Corporation (a partner in the project). Construction to build the 35-unit apartment complex, under the federal low income tax credit housing program, started in 2014 and was completed in 2015.

INHS Poet’s Landing Incorporated - For-profit subsidiary corporation established in 2012. INHS is the sole shareholder in the corporation. INHS Poets Landing, Inc. is the co- managing member of Poets Landing, LLC, which owns the 72-unit Poets Landing project.

Poet’s Landing Housing Development Fund Corporation - Not-for-profit Corporation established in 2012. INHS is the sole member of the Corporation. Poets Landing HDFC owns the land under the Poets Landing project and leases it to Poets Landing, LLC.

Poet’s Landing, LLC - a limited liability corporation, established in 2010 to develop 72 affordable housing units in Dryden, New York, under the federal low income tax credit housing program. The project was completed in 2013 and is managed by Conifer Realty.

The following subsidiary corporations had no financial activity during the 2017 and 2016 fiscal years:

INHS Hancock Incorporated - For-profit subsidiary corporation established in 2015. INHS is the sole shareholder in the corporation. INHS Hancock Inc. is the managing member of Hancock & First, LLC.

10 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies - Continued

INHS Subsidiary Corporations - Continued

Hancock & First Housing Development Fund Corporation - Not-for-profit corporation established in 2015. INHS is the sole member of the corporation. Hancock & First HDFC will own the land under the 210 Hancock Project and will lease it to Hancock & First, LLC.

Hancock & First, LLC - a limited liability corporation partially owned by INHS Hancock Inc., established in 2015 to develop a 50-unit apartment complex, under the federal low income tax credit housing program. The apartment complex was constructed during 2017.

Overlook At West Hill I Housing Development Fund Corporation - In 2005, INHS partnered with a private developer to build the 64-unit Overlook at West Hill apartments. Overlook at West Hill HDFC is a not-for-profit corporation established in 2006. INHS is the sole member of the corporation. Overlook at West Hill HDFC owns the land under the Overlook at West Hill Phase I Project and leases it to Overlook at West Hill II, LP.

Overlook At West Hill II Housing Development Fund Corporation - Overlook at West Hill II is the second phase of the Overlook project. It contains 64 apartment units. Overlook at West Hill II HDFC is a not-for-profit corporation established in 2005. INHS is the sole member of the corporation. Overlook at West Hill HDFC owns the land under the Overlook at West Hill Phase I Project and leases it to Overlook at West Hill, LP.

INHS Poet’s Landing II Incorporated - For-profit subsidiary corporation established in 2016. INHS is the sole shareholder in the corporation. INHS Poets Landing II, Inc. is the co-managing member of Poets Landing II, LLC, which owns the 48-unit Poets Landing project.

Poet’s Landing II Housing Development Fund Corporation - Not-for-profit corporation established in 2016. INHS is the sole member of the corporation. Poets Landing II HDFC owns the land under the Poets Landing II project and leases it to Poets Landing II, LLC.

Poet’s Landing II, LLC - a limited liability corporation, established in 2016 to develop 48 affordable housing units in Dryden, New York, under the federal low income tax credit housing program. The project will be managed by Conifer Realty. Construction of the housing units began in 2017.

11 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies - Continued

INHS Subsidiary Corporations - Continued

Ithaca City Apartments MM, LLC - a limited liability corporation established in 2017. INHS is the sole member of the corporation. Ithaca City Apts, MM, LLC is the managing member of Ithaca City Apartments, LLC, which owns the 98- unit scattered site project.

Ithaca City Apartments Housing Development Fund Corporation - Not-for-profit Corporation established in 2017. INHS is the sole member of the Corporation. Ithaca City Apts, HDFC owns the land under the Ithaca City Apartments project and leases it to Ithaca City Apartments, LLC..

Ithaca City Apartments, LLC - a limited liability corporation partially owned by Ithaca City Apartment MM, LLC., established in 2017 to rehab 98 scattered site units, under federal low income tax credit housing program.

Fund Accounting To ensure observance of limitations and restrictions placed on the use of resources available to INHS, the accounts of INHS are maintained in accordance with the principles of fund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds established according to their nature and purposes. Separate accounts are maintained for each fund.

The assets, liabilities, and net assets of INHS are reported in 17 self-balancing fund groups as follows:

 Operating Fund - Represents the portion of expendable and reserve funds available for support of INHS operations.

 Loan Fund - A restricted revolving loan fund capitalized by Community Development Block Grant funds for lending, pre-development, or housing development projects in the City of Ithaca for eligible activities.

 Neighborhood Reinvestment Capital Grant Fund (NRC Grant Fund) - A restricted revolving loan fund capitalized exclusively by funds provided by Neighborhood Reinvestment Corporation dba NeighborWorks® America, and specifically designated as capital funds to be used for lending, pre-development, acquisition, or housing development.

 Affordable Housing Corporation (AHC) Project Fund - A grant receiving fund for New York State Affordable Housing Corporation grants. Grants are for specific projects such as homeownership improvement grants (which are forgiven over time) and housing development subsidies for new construction projects.

12 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies - Continued

Fund Accounting - Continued

 General Loan Fund - An unrestricted revolving loan fund for lending, pre-development, or housing development projects.

 HOME Program Fund - A grant receiving fund for Federal Home grants awarded through the New York State Homes and Community Renewal HOME program fund for eligible purchase assistance or home improvement loans.

 Real Estate Development Fund - Established for pre-development, purchase, and rehabilitation of properties for homeownership or rental housing.

 Community Development Financial Institution (CDFI) Fund - A grant receiving fund for grants from the U.S. Department of Treasury Community Development Financial Institution Fund. It is available for lending to activities deemed eligible by the CDFI fund.

 Rental Management Fund - Contains rental income and reserve funds from rental properties owned and managed by INHS.

 Cascadilla Green II Fund - Contains rental income and reserve funds for 14 units, governed by a regulatory funding agreement.

 CLF Loan Fund - A grant receiving fund for grants from the Tompkins County Community Development Block Grants awarded through NYS for eligible purchase assistance or home improvement loans.

 PRI Loan Fund - A loan fund capitalized exclusively by Project Reinvest: Homeownership funds provided by a federal government settlement with Bank of America, to be used only for homeownership down payment assistance.

 NHS Housing Corp Fund - Wholly owned subsidiary established as co-managing member of Cedar Creek Housing, LLC, a LIHTC affordable housing development.

 INHS Breckenridge Inc. Fund - Wholly owned subsidiary established as co-managing member of Breckenridge on Seneca, LLC, a LIHTC affordable housing development.

 INHS Stone Quarry Inc. Fund - Wholly owned subsidiary established as co-managing member of Stone Quarry Apartments, LLC, a LIHTC affordable housing development.

 INHS Poets Landing Inc. Fund - Wholly owned subsidiary established as co-managing member of Poets Landing, LLC, a LIHTC affordable housing development.

 INHS Hancock Inc. Fund - Wholly owned subsidiary established as co-managing member of Hancock, LLC, a LIHTC affordable housing development.

13 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies - Continued

Financial Statement Presentation Financial statement presentation follows the recommendations of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 958 “Not-for-Profit Entities.” Under FASB ASC 958, INHS is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

Contributions INHS accounts for contributions in accordance with the recommendations of FASB ASC 958 “Not-for-Profit Entities.” In accordance with FASB ASC 958, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted.

Donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished) temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Consolidated Statements of Activities as net assets released from restrictions.

Gifts of Cash and Other Assets INHS reports gifts of cash and other assets as restricted support if they are received with donor stipulations limiting the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Consolidated Statements of Activities as net assets released from restrictions.

INHS reports gifts of land, buildings, and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, INHS reports expirations of donor restrictions when the donated or acquired long-lived assets are placed in service.

Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may vary.

14 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 1 Summary of Significant Accounting Policies - Continued

Cash and Cash Equivalents Cash and cash equivalents include all monies in banks and highly liquid investments with original maturities of three months or less.

Promises to Give Unconditional promises to give are recognized as revenues in the period received and as assets, decreases in liabilities, or expenses depending on the form of the benefits received. All pledges are deemed collectible. Conditional promises to give are recognized when the conditions on which they depend are substantially met.

Fixed Assets Land, building, furniture, equipment, and vehicles are stated at cost and items with costs in excess of the capitalization threshold are depreciated over their estimated useful lives by the straight-line method (Note 9). INHS capitalizes assets with a useful life of at least one year and building and land improvements with costs over $5,000 and all other capital expenditures with costs over $2,000. Betterments and improvements are capitalized, whereas expenditures for repairs and maintenance are charged to expense as incurred.

Mortgage Origination Fees Mortgage origination fees are capitalized and amortized over the term of each specific loan.

Temporarily Restricted Net Assets Temporarily restricted net assets represent funds restricted for the purpose of grant requirements not yet fulfilled.

Permanently Restricted Net Assets Permanently restricted net assets represent NRC Capital Grant funds.

Tax Exemption INHS is exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code and has been classified as an organization other than private foundations. All other subsidiary corporations are taxable corporations and file IRS Form 1120.

Expense Allocation The costs of providing various programs and other activities have been summarized on a functional basis in the Consolidated Statements of Activities and in the Consolidated Statements of Functional Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

Reclassifications Certain amounts presented for the year ended December 31, 2016 have been reclassified to conform to the current year’s presentation. These reclassification had no effect on the December 31, 2016 ending net position.

15 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 2 Loans Receivable Loans receivable are as follows: 2017 2016 Loan Fund: Community Development Block Grant (CDBG) Loans $ 1,078,684 $ 1,312,820 HOME loans 569,517 656,552 Total Loans Receivable - Loan Fund 1,648,201 1,969,372 Less: Reserve for bad debts (21,574) (26,256) Net Loans Receivable - Loan Fund 1,626,627 1,943,116

NRC Grant Fund: Loans to individuals 95,371 246,254 Less: Reserve for bad debts (1,907) (4,925) Net Loans Receivable - NRC Grant Fund 93,464 241,329

General Loan Fund: Loans to individuals 4,929,035 4,650,454 Less: Reserve for bad debts (98,581) (93,009) Less: Loan escrow (2,516) - Net Loans Receivable - General Loan Fund 4,827,938 4,557,445

HOME Program Fund: Loans to individuals 747,069 815,786

CLF Fund: Loans to individuals 756,000 412,350

PRI Project Fund: Loans to individuals 388,500 -

Net Loans Receivable - All Funds $ 8,439,598 $ 7,970,026

Deferred Revenue Mortgages had been sold at book value to Neighborhood Housing Services of America (NHSA) in order to obtain funds to provide additional loans to homeowners. In 2010, NHSA went out of business. INHS repurchased mortgages for $287,150 from NHSA at a discount for a total principal amount of $500,026, less discount of $248,910. INHS recorded 2% of principal ($10,001) as reserve for bad debts, resulting in deferred revenue of $202,876 in 2010. The loans and deferred revenue are recorded in the General Loan Fund. The deferred revenue has been recognized proportionally with the reduction in underlying loan values. The related deferred revenue balance in the General Loan Fund amounted to $44,762 and $58,717 at December 31, 2017 and 2016, respectively.

16 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 2 Loans Receivable - Continued

Bad Debt Allowance INHS has a policy to establish a reserve for bad debts for an amount equal to 2% of outstanding loan balances for those loans which are not forgivable. The 2% reserve for bad debts is derived from the average write off over a seven-year period. Reserve amounts are disclosed by Fund in the preceding chart. No reserves are deemed necessary for the AHC Project Fund, CLF Loan Fund, PRI Loan Fund, and HOME Program Fund, as these receivables are deemed fully collectible.

The loans have been committed at interest rates and repayment periods varying from 0% to 5% and one to 30 years, respectively.

Total net assets of the Loan Fund are classified as temporarily restricted net assets, as all proceeds received from repayment of such loans are required to be used for new loans under various programs of the Loan Fund.

Note 3 Notes Receivable Notes receivable at December 31, are as follows:

2017 2016 NRC granted INHS capital grants totaling $312,000 to provide a loan to the Cedar Creek Housing project. INHS has a note receivable with the Cedar Creek Housing, LLC for $312,000. The note is secured by assets, leases, and contracts of Cedar Creek Housing, LLC. The note, with accrued interest, is due 30 years after origination of the note (June 2038). The note bears an interest rate of 5% compounded annually. Interest is to be paid annually from excess cash flow. $ 312,000 $ 312,000

NRC granted INHS capital grants totaling $390,000 to provide a loan to Overlook at West Hill. INHS has a note receivable with Overlook at West Hill for $390,000. The note is secured by assets, leases, and contracts of Overlook at West Hill. The note, with accrued interest, is due 30 years after origination of the note (September 2035). The note bears an interest rate of 4.33% compounded annually. Interest is to be paid annually from excess cash flow. 390,000 390,000

17 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 3 Notes Receivable - Continued

2017 2016 NRC granted INHS capital grants totaling $298,000 to provide a loan to Overlook at West Hill. INHS has a note receivable with Overlook at West Hill II for $298,000. The note is secured by assets, leases, and contracts of Overlook at West Hill. The note, with accrued interest, is due 30 years after origination of the note (December 2036). The note bears an interest rate of 4.90% compounded annually. Interest is to be paid annually from excess cash flow. $ 298,000 $ 298,000

Non-recourse note payable to NHS Housing Corp. for $270,000. The note is secured by a mortgage (Cedar Creek Housing, LLC.). The note bears an interest rate of .25% compounded annually. The entire principal amount, together with deferred interest thereon, is due 30 years after origination of the note (June 2038). 270,000 270,000

Non-recourse note payable to INHS Breckenridge Inc. for $500,000. The note is secured by a mortgage (Breckenridge on Seneca, LLC.). The note bears an interest rate of 3% (loan rate), compounded annually. Interest accrued through construction. Payment of 1% of the original principal balance is due annually upon the start of the permanent loan commencement date of (July 2014), subject to cash flow. The entire principal amount, together with accrued interest thereon, is due 30 years from permanent loan closing (July 2044). 500,000 500,000

Non-recourse note payable to INHS Breckenridge Inc. for $550,000. The note is secured by a mortgage (Breckenridge on Seneca, LLC). The note bears an interest rate of 3% compounded annually. Payment of 1% of the original principal balance is due annually upon, subject to available cash flow. The entire principal amount, together with accrued interest thereon, is due 30 years after origination of the note (May 2042). 550,000 550,000

18 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 3 Notes Receivable - Continued

2017 2016 Non-recourse note payable to INHS Stone Quarry Inc. for $200,000. The note is secured by a mortgage (Stone Quarry Apartments, LLC.). The note bears an interest rate of 3.5% (loan rate), compounded annually. During the construction loan term, interest shall accrue at the loan rate, compounded annually on the date of disbursement (September 2014). There shall be no principal or interest payable during the construction period. The note shall be for the term of 30 years commencing on the permanent commencement date. Borrower shall make annual payments of 1% of the original principal indebtedness on each anniversary of the permanent loan commencement date, subject to available cash flow. $ 200,000 $ 200,000

Non-recourse note payable to INHS Stone Quarry Inc. for $100,000. The note is secured by a mortgage (Stone Quarry Apartments, LLC.). The note bears an interest rate of 3.5% (loan rate), compounded annually. During the construction loan term, interest shall accrue at the loan rate, compounded annually on the date of disbursement (September 2014). There shall be no principal or interest payable during the construction period. The note shall be for the term of 30 years commencing on the permanent commencement date. 100,000 100,000

Non-recourse note payable to INHS Hancock, Inc. for $300,000. The note is secured by a mortgage (Hancock & First, LLC.). The note bears an interest rate of 3.5% (loan rate), compounded annually. During the construction loan term, interest shall accrue at the loan rate, compounded annually on the date of disbursement (June 2016). There shall be no principal or interest payable during the construction period. The note shall be for the term of 30 years commencing on the permanent commencement date. Borrower shall make annual payments of 1% of the original principal indebtedness on each anniversary of the permanent loan commencement date, subject to available cash flow. 300,000 300,000

19 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 3 Notes Receivable - Continued

2017 2016 Non-recourse note payable to INHS Hancock, Inc. for $120,000. The note is secured by a mortgage (Hancock & First, LLC.). The note bears an interest rate of 3.5% (loan rate), compounded annually. During the construction loan term, interest shall accrue at the loan rate, compounded annually on the date of disbursement (June 2016). There shall be no principal or interest payable during the construction period. Commencing on the permanent commencement date, the borrower shall make annual principal and interest payments, based on a 30 year amortization, due on each anniversary of the permanent loan commencement date, subject to available cash flow. $ 120,000 $ 120,000

Non-recourse note payable to INHS Hancock, Inc. for $292,100. The note is secured by a mortgage (Hancock & First, LLC.). The note bears an interest rate of 3.5% (loan rate), compounded annually. During the construction loan term, interest shall accrue at the Loan Rate, compounded annually on the date of disbursement (June 2016). There shall be no principal or interest payable during the construction period. The note shall be for the term of 30 years commencing on the permanent commencement date. Borrower shall make annual payments of 2% of the original principal indebtedness on each anniversary of the permanent loan commencement date, subject to available cash flow. 292,100 292,100

Non-recourse note payable to INHS Hancock, Inc. for $136,271. The note is secured by a mortgage (Hancock & First, LLC.). The note bears an interest rate of 3.5% (loan rate), compounded annually. During the construction loan term, interest shall accrue at the loan rate, compounded annually on the date of disbursement (June 2016). There shall be no principal or interest payable during the construction period. The note shall be for the term of 30 years commencing on the permanent commencement date. Borrower shall make annual payments of 1% of the original principal indebtedness on each anniversary of the permanent loan commencement date, subject to available cash flow. 136,271 136,271

20 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 3 Notes Receivable - Continued

2017 2016 Note payable to INHS from Better Housing of Tompkins County (BHTC) for $76,350. The note is construction loan to assist BHTC in its development of 48 unit apartment project (Pine View Circle) in the town of Tyre, NY. The note bears 0% interest for a deferred term of 30 years. $ 76,350 $ 76,350

Note payable to INHS from Ithaca City Apartments, LLC (ICA) for $3,285,014. The note was executed to provide ICA with funds necessary for the rehabilitation of properties previously owned by INHS. The note calls for annual payments of principal and interest at a rate of 4.40% compounded annually for a term of 30 years, subject to available cash flow. 3,285,014 -

Note payable to INHS from Ithaca City Apartments, LLC (ICA) for $939,343. The note was executed to affirm the INHS's and IHI's development service agreement. The note bears no interest and calls for annual payments of principal for a term of 15 years, subject to available cash flow. 939,343 -

Note payable to INHS from INHS Hancock, Inc. (IHI) for $516,674. The note was executed to provide IHI with funds necessary for the construction of the 210 Hancock project. The note calls for interest only payments at a rate of 3.50% compounded annually for a term of 30 years, with the unpaid principal and interest balance due at maturity. The remaining portion of this note will be disbursed in 2018. 454,026 -

Total Notes Receivable $ 8,223,104 $ 3,544,721

See Note 20 for interfund loans receivable.

21 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 4 Investment in Subsidiary Corporations

NHS Housing Corp. In 2008, INHS received a $270,000 grant from the Federal Home Loan Bank for the development of a 39 unit low-income tax credit project. INHS used these funds and an additional $2,000 as a capital contribution to INHS’ wholly owned subsidiary corporation, which loaned the funds to Cedar Creek Housing, LLC for the development.

INHS Breckenridge Inc. In 2013, INHS received a $550,000 grant from the Federal Home Loan Bank for the development of a 50 unit low-income tax credit project. INHS transferred the funds as a capital contribution to INHS’ wholly owned subsidiary corporation, which loaned the funds to Breckenridge on Seneca, LLC for the development.

In 2012, INHS provided a $500,000 capital contribution to INHS’ wholly owned subsidiary corporation, which loaned the funds to Breckenridge on Seneca, LLC for the development of a 50 unit low-income housing tax credit project.

In 2012, Tompkins County Affordable Housing Program provided a $75,000 grant to INHS as a capital contribution to INHS’ wholly owned subsidiary corporation, which granted the funds to Breckenridge on Seneca, LLC for the development of a 50 unit low-income housing tax credit project.

INHS Stone Quarry Inc. In 2014, INHS provided a $100,000 capital contribution to INHS’ wholly owned subsidiary corporation, which loaned the funds to Stone Quarry Apartments, LLC for the development of a 35 unit low-income housing tax credit project.

In 2014, Tompkins County Affordable Housing Program provided a $200,000 grant to INHS as a capital contribution to INHS’ wholly owned subsidiary corporation, which loaned the funds to Stone Quarry Apartments, LLC for the development of a 35 unit low- income housing tax credit project.

INHS Hancock & First LLC In 2016, INHS received a $300,000 grant from Tompkins County for the redevelopment of a property located at 210 Hancock. INHS transferred the funds as a capital contribution to INHS’ wholly owned subsidiary corporation, which loaned the funds to Hancock & First, LLC for the development.

In 2016, INHS received a $120,000 loan from Ithaca Urban Renewal Agency for the redevelopment of 210 Hancock. See Note 5 for repayment terms. INHS transferred the funds as a capital contribution to INHS’ wholly owned subsidiary corporation, which loaned the funds to Hancock & First, LLC for the development.

In 2016, INHS transferred $428,371 of available funds as a capital contribution to INHS’ wholly owned subsidiary corporation, which loaned the funds to Hancock & First, LLC for the development.

22 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 4 Investment in Subsidiary Corporations - Continued In 2017, INHS received $454,026 of a of $516,674 grant from New York State Research and Development Authority for the development of 210 Hancock. See note 5 for repayment terms. INHS transferred the funds as a capital contribution to INHS’ wholly owned subsidiary which loaned the funds to Hancock & First, LLC for development.

Note 5 Mortgages and Loans Payable INHS had the following mortgages and loans outstanding as of December 31:

Interest Due Rate Date 2017 2016

General Loan Fund 2010 Park Foundation, Inc. Interest only payments 1.50% 11/2022 $ 500,000 $ 500,000

Real Estate Development Fund Ithaca Urban Renewal Agency Construction Loans: 210 Hancock Street 3.50% 2/2048 120,000 120,000 Construction Loan: 202 Hancock Street 4.50% 1/2019 1,018,353 - Total Real Estate Development Fund 1,138,353 120,000 Rental Management Fund (See Note Below) City of Ithaca - Cascadilla Green I 3%-7% 01/2017 45,000 2004 IURA HOME Deferred Loan - 356 Floral Ave. N/A 06/2021 100,000 2004 IURA HOME Deferred Loan - 356 Floral Ave. N/A 07/2021 16,666 2013 Tompkins Trust Company - Multiple locations 4.20% 02/2033 1,867,097 Total Rental Management Fund - 2,028,763 Cascadilla Green II Fund M&T 8.50% 07/2022 85,849 City of Ithaca 3%-7% 01/2017 45,000 Housing Trust Fund 0.00% 12/2033 50,826 Total Cascadilla Green II Fund - 181,675 Total Mortgages and Loans Payable 1,638,353 2,830,438 Less current portion 1,020,267 707,605 Total Mortgages and Loans Payable, Net of Current Portion $ 618,086 $ 2,122,833

23 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 5 Mortgages and Loans Payable - Continued For Rental Management Fund, specific real estate has been pledged as collateral.

Future scheduled principal reductions are as follows for Rental Management Fund, General Loan Fund, Cascadillla Green II, and Real Estate Development Funds:

Payable 2018 $ 1,020,267 2019 2,371 2020 2,455 2021 2,543 2022 502,633 2023-2027 14,639 2028-2032 17,434 2033-2037 20,762 2038-2042 24,727 2043-2047 29,449 2048 1,073

Total $ 1,638,353

Interest expense amounted to $105,216 and $ 131,789 for the years ended December 31, 2017 and 2016, respectively.

General Loan Fund In 2010, INHS borrowed $500,000 from Park Foundation, Inc. via a 7 year loan with an interest rate of 1.5%, interest due monthly; principal balance due at maturity. The loan is to be used for lending, real estate development, property management, and home repair services. In 2017, the loan was extended an additional 5 years. As of December 31, 2017 and 2016, principal due was $500,000.

Real Estate Development Fund In 2016, INHS borrowed $120,000 from the Ithaca Urban Renewal Agency at 3.5% to be used for construction costs related to the redevelopment of property located at 210 Hancock Street in the City of Ithaca. The loan accrues interest during the construction period with no payments due. After the construction period, the loan amortizes over 30 years with even monthly principal and interest payments. As of December 31, 2017 and 2016, the principal balance due was $120,000, with payments beginning in 2018.

24 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 5 Mortgages and Loans Payable - Continued

Real Estate Development Fund - Continued In 2017, INHS entered into a construction loan agreement to borrow up to $1,581,796 to finance the construction of for sale townhomes located at 202 Hancock Street in the City of Ithaca. The agreement calls for an interest rate at the greater of 4.50% or 1.00% plus the Wall Street Journal Prime Rate compounded daily. Commencing February 1, 2017, monthly payments of principal and interest are due with a final maturity date of January 23, 2019. As of December 31, 2017, principal balance due was $1,018,353.

Rental Management Fund In 2013, INHS was assigned loans and mortgages with the acquisition of Cascadilla Green, formerly known as the Mutual Housing Association of Tompkins County.

INHS was assigned a $90,000 mortgage with the City of Ithaca for rental property known as Cascadilla Green. Interest only is to be paid on a monthly basis at the rate of 3% for a period of 12 years, at which time the $45,000 balance will be amortized over the following 12 years with a an interest rate of 7%. This mortgage has been divided between Rental Management and Cascadilla Green II, each responsible for $45,000. The outstanding balance on these loans was paid off during the year ended December 31, 2017.

In 2006, the City of Ithaca granted INHS two HOME deferred loans totaling $350,000 for 356 Floral Avenue. These loans are amortizable over 15 years. These loans had balances of $-0- and $116,666 at December 31, 2017 and 2016, respectively and amounts forgiven were $116,666 and $23,333 for the years ended December 31, 2017 and 2016, respectively.

In 2013, INHS entered into a mortgage agreement to borrow up to $2,150,000 to refinance INHS’ wholly owned rental properties located at various locations in the City of Ithaca. The agreement calls for an interest rate of 4.25%. Commencing March 4, 2013, monthly payments of principal and interest are due with a final maturity date of February 1, 2033. As of December 31, 2016, the principal balance due was $1,867,097. The outstanding balance on the loan was paid off during the year ended December 31, 2017.

Cascadilla Green II Fund In 2013, INHS was assigned two loans totaling $200,000 from M&T Bank for Cascadilla Green Phase II. The loans have interest rates of 8.5% and monthly payments are $1,882. As of December 31, 2016, the principal balance due was $85,849. The outstanding balance was paid off during the year ended December 31, 2017.

In 2013, INHS was assigned a $50,826 loan from the Housing Trust Fund Corporation for Cascadilla Green Phase II. Payments on the loan will begin in 2033, 30 years after final disbursement of the award. The outstanding balance was paid off during the year ended December 31, 2017.

25 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 6 Donated Materials and Services Donated materials are recorded at fair value at date of receipt. No amounts have been reflected in the statements for donated services in as much as no objective basis is available to measure the value of such services; however, a substantial number of volunteers have donated significant amounts of their time to INHS’ program services.

Note 7 Public Support

City of Ithaca INHS is awarded Home Investment Partnership Program grants (HOME) and Community Development Block Grants (CDBG), through the Ithaca Urban Renewal Agency, for eligible projects in the City of Ithaca.

Remaining Grant Funds Spent Spent Spent Description Amount at 12/31/17 2017 2016 Prior Year(s) 2017 HOME 210 Hancock $ 91,417 $ $ 91,417 $ $ 2016 HOME 210 Hancock- CHDO 530,000 215,875 191,060 123,065 2017 CDBG Mini Repair 30,000 30,000 2016 HOME 304 Hector - CHDO 100,000 3,570 96,430 HOME Rehab (recaptured & relent) N/A 15,000 2016 CDBG Mini Repair 35,000 35,000 2010 HOME Rehab (recaptured & relent) N/A 15,000 2014 CDBG Rehab Loans 123,259 107,854 15,405

Total City of Ithaca Pass Through $ 909,676 $ 219,445 $ 423,907 $ 280,919 $ 15,405

Contributions from the City of Ithaca Rental management loans forgiven $ 350,000 $ - $ 116,666 $ 23,334 $ 210,000

Total City of Ithaca Contributions $ 350,000 $ - $ 116,666 $ 23,334 $ 210,000

Deferred loans of $116,666 and $23,333 from the City of Ithaca were forgiven for the years ended December 31, 2017 and 2016, respectively.

26 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 7 Public Support - Continued

NYS Housing and Community Renewal Neighborhood Preservation Program INHS received $91,256 during 2017 and $93,054 during 2016 from the Neighborhood Preservation Program of the NYS Division of Housing and Community Renewal. This cash is restricted and only to be used for administration of Neighborhood Preservation Projects.

Description 2017 2016 2018 NPP Grant 07/01/17 - 12/31/17 $ 60,000 $ 2017 NPP Grant 01/01/17 - 06/30/17 31,256 2017 NPP Grant 07/01/16 - 12/31/16 60,000 2016 NPP Grant 01/01/16 - 06/30/16 33,054

Total DHCR Grants $ 91,256 $ 93,054

NYS Housing and Community Renewal HOME Program INHS is awarded grants from the Housing and Urban Development HOME Program through the New York State Housing Trust Fund Corporation for eligible projects in Tompkins County. Remaining Grant Funds Spent Spent Spent Description Amount at 12/31/17 2017 2016 Prior Year(s) 2012 Purchase - County $ 400,000 $ $ $ 239,350 $ 160,650 2011 Construction Holly Creek II 550,000 400,000 150,000

Total $ 950,000 $ - $ - $ 639,350 $ 310,650

Neighborhood Reinvestment Corporation (NeighborWorks America®) INHS is awarded capital investment grants through NeighborWorks America for eligible projects in Tompkins County. Remaining Grant Funds Spent Spent Spent Description Amount at 12/31/17 2017 2016 Prior Year(s) 2017 Predevelopment - Rental II $ 290,000 $ $ 290,000 $ $ 2017 Portfolio Strengthening 100,000 100,000 2016 Predevelopment - Rental 100,000 28,359 71,641 2016 Predevelopment - Pine View 175,000 78,295 96,705 2016 Purchase Loans 150,000 124,453 25,547 2015 Purchase Loans 135,000 5,000 130,000

Total NRC Neighborworks® $ 950,000 $ 124,453 $ 527,201 $ 298,346 $ -

27 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 7 Public Support - Continued

Operating Support: INHS is awarded expendable grants through NeighborWorks America® for operating support and technical assistance support. Funds are temporarily restricted until expensed.

INHS recognized the following grant revenues from Neighborhood Reinvestment Corporation (NRC): Grant Funds Spent Spent Description Amount at 12/31/17 2017 2016 2017 House Counseling $ 57,118 $ $ 57,118 $ 2017 Operating 157,500 157,500 2017 Small design grant 10,000 10,000 2017 Travel Reimbursement 2,640 2,640 2017 Citi Foundation 500 500 2016 Executive Director Search 10,000 10,000 2016 40th Anniversary 5,000 5,000 2016 Operating 110,000 110,000 2016 House Counseling 29,719 29,719

Total Operating Fund $ 382,477 $ 2,640 $ 225,118 $ 154,719

In addition, contributions designated for operation expenses have been received from Tompkins County, local businesses, financial and educational institutions, foundations, and private individuals.

New York State Affordable Housing Corporation INHS receives grant funding from New York State Affordable Housing Corporation for eligible activities in Tompkins County. All loans are 0% interest and have a forgivable period based on level of financing provide to the homeowner.

Remaining Grant Funds Spent Spent Spent Description Amount Advanced at 12/31/17 2017 2016 Prior Year(s) 2017 Admin - 210 Hancock $ 8,400 $ $ - $ 8,400 $ $ 2017 Construction - 210 Hancock 280,000 160,000 120,000 2012 Acquisition/Rehab 400,000 400,000 - 7,797 392,203 Total New York State Affordable Housing Corporation $ 688,400 $ 400,000 $ 160,000 $ 128,400 $ 7,797 $ 392,203

28 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 7 Public Support - Continued

Community Development Financial Institution Fund INHS has received grant funding from the Community Development Financial Institution Fund. Funds can be used for purchase or home improvement loans to eligible homeowners in Tompkins County. Funding is advanced to INHS over a period of time and INHS is given a three year period to expend the funds. Each grant allows funds to be used as administrative support and can be transferred to operations.

Remaining Grant Funds Spent Spent Spent Description Amount Advanced at 12/31/17 2017 2016 Prior Year(s) 2014 Lending $ 2,000,000 $ 2,000,000 $ - $ 25,001 $ 1,031,550 $ 943,449

Total CDFI $ 2,000,000 $ 2,000,000 $ - $ 25,001 $ 1,031,550 $ 943,449

Project Reinvest: Homeownership (NeighborWorks America®) INHS has received grant funding from NeighborWorks America®. Funds can be used for purchase or refinancing of existing loans to eligible homeowners in Tompkins County. Funding is advanced to INHS over a period of time and INHS is given a two year period to expend the funds. The grant allows a portion of the funds to be used as administrative support and can be transferred to operations.

Remaining Grant Funds Advanced Advanced Amount at 12/31/17 2017 2016 2017 Homeownership $ 1,200,000 $ 480,000 $ 720,000 $

Total Tompkins County $ 1,200,000 $ 480,000 $ 720,000 $ -

29 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 7 Public Support - Continued

Tompkins County Affordable Housing INHS receives Housing and Urban Development grants through the Tompkins County Affordable Housing Program. The grant funds are to assist INHS in the acquisition of land for development of new affordable housing units.

Remaining Grant Funds Spent Spent Spent Amount at 12/31/17 2017 2016 Prior Year(s) 2017 Home Rehab - CDBG $ 300,000 $ - $ 300,000 $ $ 2015 - TC AHP 202 and 210 Hancock, 304 Hector 620,000 40,000 580,000 -

Total Tompkins County Affordable Housing $ 920,000 $ - $ 340,000 $ 580,000 $ -

Tompkins County INHS receives Community Development Block grants through the Tompkins County Home Ownership Program. The grant funds are used for purchase assistance loans to eligible households in Tompkins County.

Remaining Grant Funds Spent Spent Amount at 12/31/17 2017 2016 2017 TC Home Ownership Lending Program- $ 400,000 $ 156,888 $ 243,112 $ 2016 TC Home Ownership Lending Program- 691,500 - 202,995 488,505

Total Tompkins County $ 1,091,500 $ 156,888 $ 446,107 $ 488,505

Note 8 Credit Risk All of INHS’ cash is held in various banking institutions. Collateral agreements have been enacted on INHS’ behalf to secure any amounts in excess of $250,000 with M&T Bank and Tompkins Trust Company. Other funds are insured by the Federal Deposit Insurance Corporation up to $250,000. At December 31, 2017 and 2016, $253,842 and $407,329 was uninsured. The uninsured balance is part of INHS’s unrestricted replacement reserves in the Property Management Fund, held at Key Bank.

30 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 9 Property and Equipment and Mortgage Origination Fees

2017 2016 Accumulated Accumulated Property and Equipment Cost Depreciation Cost Depreciation Operating Fund: Building and improvements $ 578,946 $ 202,236 $ 560,946 $ 174,938 Furniture and equipment 67,922 63,527 61,337 57,491 Computers 61,402 60,162 61,402 58,277 Trucks 35,892 30,208 35,892 25,343 Total Operating 744,162 356,133 719,577 316,049

Loan Fund: Land 635,800 - 633,560 -

NRC Fund: Building and improvements 55,428 42,867 55,428 40,650

General Loan Fund: Land 603,158 - 603,158 -

Real Estate Development Fund: Land 10,528 - 10,537 -

Rental Management Fund: Land - - 81,100 - Building and improvements 3,424,891 2,527,643 7,013,244 4,726,105 Trucks 29,990 29,990 29,990 29,990 Computers 13,874 10,864 26,054 14,922 Total Rental Management 3,468,755 2,568,497 7,150,388 4,771,017

Cascadilla Green II Fund: Building and improvements - - 301,220 48,151

Total Property and Equipment $ 5,517,831 $ 2,967,497 $ 9,473,868 $ 5,175,867

Mortgage Origination Fees Rental Management Fund $ - $ - $ 102,106 $ 55,007

Total Mortgage Origination Fees $ - $ - $ 102,106 $ 55,007

Depreciation and amortization expense was $276,225 and $6,024 for a total of $282,249 for the year ended December 31, 2017, and $291,140 and $6,024 for a total of $297,164 for the year ended December 31, 2016.

31 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 10 Buildings Held for Resale At December 31, 2017, INHS held four properties for resale at a combined value of $515,000. At December 31, 2016, INHS held two properties for resale at a combined value of $292,000.

Note 11 Pre-development Costs Pre-development costs amounted to $496,953 and $153,330 at December 31, 2017 and 2016, respectively. The balance represents costs associated with potential real estate development projects. As of December 31, 2017, eight potential real estate development projects were in the pre-development stage. As of December 31, 2016, one potential real estate development project was in the pre-development stage.

Note 12 Construction in Progress Construction in progress amounted to $1,004,345 and $392,297 at December 31, 2017 and 2016, respectively. The balance represents acquisition of vacant land, architectural and professional fees, construction and soft costs related to real estate development projects currently underway. As of December 31, 2017, INHS bought single family home at 828 Hector St., to rehab and resell, built a for sale single family home at 304 Hector St., and completed the construction of 7 for sale townhomes at 202 Hancock (4 of 7 were sold in 2017).

Note 13 Other Changes in Net Assets Other changes in net assets during 2017 and 2016 represented losses in INHS’s investments in subsidiaries. Additionally, the 2017 and 2016 amounts included additional capital contributions to INHS Hancock, Inc. from the Real Estate Development Fund.

32 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 14 Unrestricted Undesignated Net Assets Unrestricted, undesignated net assets are comprised of the following:

2017 2016 Operating Fund: Net fixed assets $ 388,029 $ 403,528 Undesignated 1,139,832 1,340,182 Total Operating Fund 1,527,861 1,743,710

NRC Grant Fund: Undesignated 148,521 292,566

AHC Project Fund/House Recycling: Undesignated 100 100

General Loan Fund: Undesignated 5,974,214 5,981,818

HOME Program Fund: Undesignated 100,335 100,311

Real Estate Development Fund: Undesignated 16,794,134 2,509,026

CDFI Fund: Undesignated 1,278 1,496

Rental Management: Net fixed assets 900,258 2,379,371 Undesignated 203,277 (1,844,723) Total Rental Management 1,103,535 534,648

Cascadilla Green II: Net fixed assets - 253,069 Undesignated 82,613 (74,847) Total Cascadilla Green II 82,613 178,222

Total $ 25,732,591 $ 11,341,897

33 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 14 Unrestricted Net Assets - Continued Unrestricted board designated net assets are comprised of the following:

2017 2016 Operating Fund reserve for operations $ 522,465 $ 512,056 Operating Fund replacement reserve 69,382 126,270 Rental Management Fund reserve for operations 48,361 41,506 Rental Management Fund replacement reserve 544,546 474,802 Cascadilla Green II reserve for operations 9,869 7,816 Cascadilla Green II replacement reserve 30,667 24,522

Total $ 1,225,290 $ 1,186,972

Note 15 Restricted Net Assets Temporarily restricted net assets are classified as follows:

2017 2016 Loan Fund: Net loans receivable (See Note 2) $ 1,626,627 $ 1,943,116 Buildings held for resale/construction in progress, net of related debt 330,501 262,019 Land 635,800 633,560 Net reserved 608,913 552,548 Total Loan Fund 3,201,841 3,391,243

Operating Fund - unspent grant proceeds 46,439 38,828

HOME Program Fund - restricted for loans 897,236 952,353

CFDI Fund - restricted for loans - 30,827

CLF Fund - restricted for loans 956,000 412,350

PRI Fund - restricted for loans 664,500 -

Total $ 5,766,016 $ 4,825,601

34 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 15 Restricted Net Assets - Continued Permanently restricted net assets are classified as follows:

2017 2016 NRC Capital Grant $ 1,491,983 $ 2,131,404

Note 16 Permanently Restricted Net Assets Permanently restricted net assets in the amounts of $1,491,983 and $2,131,404, at December 31, 2017 and 2016, respectively, were fully recoverable by NRC.

In 2009, NeighborWorks® America allowed network organizations to reclassify a portion of their permanently restricted capital for a broad array of unrestricted uses which support the strategic plan and mission delivery of the network organization.

Approved Capital conversion requests amounted to $639,421 and $507,851 at December 31, 2017 and 2016, respectively.

Note 17 Compensated Absences Employees are entitled to paid vacation depending on length of service and other factors. At December 31, the value of accumulated vacation leave is estimated to be $41,056 for 2017 and $41,081 for 2016.

Note 18 Pension Employees of INHS are able to participate in a SEP IRA savings plan. Ithaca Neighborhood Housing Services, Inc. made a contribution equivalent to 7% of employees' salaries in both 2017 and 2016. Employer contributions amounted to $70,419 in 2017 and $81,349 in 2016.

Note 19 Revolving Line-of-Credit During 2014, INHS renewed its $800,000 revolving line-of-credit. Bank advances on the credit line are payable on demand, however, if no demand is made, interest only payments are required monthly. A final payment of the unpaid principal balance plus accrued interest is due and payable on September 30, 2019. Advances carry an initial interest rate 4.50%, and shall increase or decrease without prior notice by the same number of percentage points and on the same date as the prime rate published in the Wall Street Journal. The credit line is secured by substantially all assets of INHS.

The outstanding balance was $300,000 and $200,000 at December 31, 2017 and 2016, respectively. Interest in the amount of $8,392 and $5,834 was paid in 2017 and 2016, respectively.

35 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 20 Interfund Balances and Activity Interfund balances at December 31, 2017, are as follows:

Interfund Interfund Interfund Interfund Receivable Payable Revenues Expenditures Operating Fund $ 26,244 $ 1,085 $ 404,342 $ Loan Fund 141,020 260,583 NRC Fund 100,176 2,643 1,150,411 General Loan Fund 258,753 10,854 210,591 324,593 Real Estate Development Fund 7,121 241,019 5,715,806 434,534 CDFI Loan Fund 30,761 CLF Fund 200,000 PRI Fund 9,000 Rental Management Fund 1,078 30 2,160,933 6,626,964 Cascadilla Green II Fund 2,057 124,409 INHS Hancock Inc. 7,121

Total $ 534,392 $ 534,392 $ 8,691,672 $ 8,691,672

Interfund receivables and payables are eliminated in the consolidated financial statements.

INHS interfund receivables and payables are temporary cash transfers and/or short-term loans for various real estate projects.

Interfund receivables and payables  Operating Fund a total receivable due of $26,244; from lending interest transfers from the Loan Fund of $1,837, General Loan Fund of $10,677 and NRC fund of $3, Site Management fee INHS SS (CGII) of $2,057, Return overpayment INHS SS of $30, NWA travel cost advance of $2,640. Project Reinvest Admin draw of $9,000, Operating Fund total payable of 1,085; Property Management Fund for laundry quarters of $1,077, GLF Fund Interim Loan interest of $8 .

 Loan Fund total receivable due of $141,020; from INHS Scattered Site CG Loan payoff. Loan Fund total payable of $260,583; Loan Interest to Operating Fund of $1,837, General Loan Fund of $101,348, and NRC of $72, loan payoff to General Loan Fund of $157,326.

36 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 20 Interfund Balances and Activity - Continued

Interfund receivables and payables - Continued

 NRC Fund total receivable due of 100,176; from pre-development costs from Real Estate Development for Portfolio Strengthening $100,000, loan repayments from General Loan Fund of $72, and Loan repayments from GLF Fund of $104. NRC Fund total payable of $2,643; NWA travel cost of $2,640 and loan interest transfer of $3 due to Operating Fund.

 Project Reinvest Fund total payable of $9,000; Admin transfer to Operating Fund.

 General Loan Fund total receivable due of $258,753: loan payoff from Loan Fund of $157,326, Loan payments from Loan Fund of $101,348, Interim loan interest from Operating fund of $8. General Loan Fund total payables of $10,854; due to Operating Fund for interest transfer of $10,678, Loan interest due to NRC Fund of $176,

 Real Estate Fund total payable of $241,019; portfolio strengthening grant due to NRC Fund of $100,000 and loan payoff proceeds INHS SS CG of $141,019.

 Rental Management Fund receivable of $1,078 due from Operating fund for laundry quarters. Rental Management Fund payable $2,087; overpayment on laundry quarters due to Operating Fund of $30, Site management fee due to Operating of $2,057.

Interfund Revenues and Interfund Expenditures

 NRC Fund interfund expenditures of 1,150,411; Loan receivables transferred to General Loan Fund of $179,830, Transferred note receivable and accrued interest to Real Estate Development Fund for $503,832 and forgive interfund payable of $465K (Pine View 175K, Scattered Site Refi Phase I and Trumansburg 290K)

 GLF Fund interfund revenue of 210,591; Loan receivables transferred from NRC Fund of $179,830, from CDFI Fund of $30,761. GLF interfund expenditures of $200,000; transfer cash for new County Revolving Loan Fund (CRLF).

 CRLF Fund interfund revenue of $200,000 cash transfer from General Loan Fund.

 Real Estate Development Fund interfund revenue of 5,715,806; Transferred note receivable and accrued interest from NRC Fund of $503,833 and forgive interfund payable of $465K (Pine View 175K, Scattered Site Refi Phase I and Trumansburg 290K). Transfer sale proceeds for INHS SS 98 Units to ICA, LLC $4,746,973. Real Estate Fund interfund expense of $156,534 HSJ office renovation to INHS SS.

37 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 20 Interfund Balances and Activity - Continued

Interfund Revenues and Interfund Expenditures - Continued  CDFI Fund interfund expenditure of $30,761 loan receivable transfer to GLF Fund.

 INHS Scattered Site Fund interfund revenue of 2,160,933; transfer office renovations from RED Fund of $156,534, ICA, LLC sale proceeds for 98 Units from RED Fund $2,004,399. INHS SS interfund expenditure of $6,751,373; Sold 98 units to ICA, LLC, Building & Improvement disposal and recognize gain on sale.

Interfund balances at December 31, 2016, are as follows:

Interfund Interfund Interfund Interfund Receivable Payable Revenues Expenditures Operating Fund $ 50,695 $ 1,390 $ 134,333 $ 697,107 Loan Fund 153,155 245,304 174,613 100,000 NRC Fund 275,363 132 380,733 General Loan Fund 211,455 48,210 863,000 515,552 Real Estate Development Fund 25,372 275,000 1,577,107 192,661 CDFI Loan Fund 5,761 863,000 Rental Management Fund 606 152,371

Total $ 722,407 $ 722,407 $ 2,749,053 $ 2,749,053

Interfund receivables and payables are eliminated in the consolidated financial statements.

INHS interfund receivables and payables are temporary cash transfers and or short-term loans for various real estate projects.

Interfund receivables and payables  Operating Fund a total receivable due of $50,695; from lending interest transfers from the Loan Fund of $3,224, General Loan Fund of $9,836 and NRC fund of $132, TCHO Admin Draw from General Loan Fund of $32,613, Real Estate Transfer Fee from Loan Fund of $4,890. Operating Fund total payable of 1,390; Property Management Fund for laundry quarters of $606, Loan Fund for advertising reimbursement of $784.

 Loan Fund total receivable due of $784; from Operating Fund reimbursement for advertising expense. Loan Fund total payable of $245,304; Loan payments to Operating Fund of $3,224, General Loan Fund of $54,129, and NRC of $363, Developer Fee (203 3rd St) to Real Estate Development Fund of $25,372, R.E. transfer fee to Operating Fund of $4,890 and loan payoff to General Loan Fund of $157,326. 38 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 20 Interfund Balances and Activity - Continued

Interfund receivables and payables - Continued  NRC Fund total receivable due of 275,363; from pre-development costs from Real Estate Development for Pine View Circle of $175,000, Rental Refi of $100,000 and loan repayments from Loan Fund of $364. NRC Fund payable due to Operating Fund for interest transfer of $132.

 General Loan Fund total receivable due of $211,455: loan payoff from Loan Fund of $157,326, Loan payments from Loan Fund of $54,129. General Loan Fund total payables of $48,210; due to Operating Fund for interest transfer of $9,836, Operating Fund TCHO Admin draw $32,613 and CDFI Fund loan repayment of $5,761.

 Real Estate Development Fund total receivables due of $25,372 from Loan Fund for 203 3rd St. developer fee. Real Estate Fund total payable of $275,000; pre-development cost due to NRC Fund for Pine View Circle of $175,000 and Rental Refi Phase I of $100,000.

 Rental Management Fund receivable of $606 due from Operating Fund for laundry quarters.

Interfund Revenues and Interfund Expenditures

 Operating Fund total interfund expenditures of $697,107; Stone Quarry Developer Fee transferred to Real Estate Development of $450,000, Cedar Creek and Breckenridge long-term developer fee receivables to Real Estate Development of $247,107.

 Loan Fund interfund expenditure to Real Estate Development to forgive interfund payable for 210 Hancock pre-development costs of $100,000.

 NRC Fund interfund expenditure to Real Estate Development to forgive interfund payable for Greenways ($200,000) and 210 Hancock ($180,000) predevelopment costs totaling $380,000.

 General Loan Fund total interfund revenue of $863,000; transferred loan receivables from CDFI. Interfund expenditure of $401,952; cash transferred to Real Estate Development of $400,000 and client direct grant of $1,952.

 Real Estate Developer Fund total interfund revenue of $1,577,107; Cash from General Loan Fund $400,000, Stone Quarry Developer Fee from Operating Fund $450,000, Cedar Creek and Breckenridge long-term developer fee receivable from Operating Fund of $247,107, Forgiven interfund payables for Greenways predevelopment costs write off from NeighborWorks Fund of $200,000. 210 Hancock pre-development costs write off interfund loan from Loan Fund of $100,000 and NeighborWorks fund of $180,000. Interfund expenditure of $172,661 transfer balance due on CHC loan for 210 Hancock to Loan Fund.

39 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 21 Commitments and Contingencies INHS is obligated to Cedar Creek Housing, LLC to provide funds for operating deficits and credit adjusters. We were not able to estimate these amounts at December 31, 2017, or at the date of this report.

INHS is obligated to Breckenridge on Seneca, LLC to provide funds for operating deficits and credit adjusters. We were not able to estimate these amounts at December 31, 2017, or at the date of this report.

INHS is obligated to Stone Quarry Apartments, LLC to provide funds for any development and operating deficits, credit adjusters, and additional advance guaranty. These amounts were not able to be estimated at December 31, 2017 or the date of this report.

INHS is obligated to Hancock & First, LLC to provide funds for any development and operating deficits, credit adjusters and additional advance guaranty. These amounts were not able to be estimated at December 31, 2017 or the date of this report.

INHS has an agreement with Pine View Circle, LLC, to provide funds for any development and operating deficits, credit adjusters and additional advance guaranty. These amounts are not able to be estimated at December 31, 2017 or the date of this report.

INHS has an agreement with Ithaca City Apartments, LLC, to provide funds for any development and operating deficits, credit adjusters, and additional advance guaranty. These amounts are not able to be estimated at December 31, 2017 or the date of this report.

Note 22 Better Housing of Tompkins County Affiliation Effective July 1, 2015, Better Housing of Tompkins County (BHTC) and INHS completed their affiliation and reorganized certain staffing and operational processes to operate jointly. Under the affiliation agreement BHTC was retained as a corporation with governance and management responsibilities being transferred to INHS. Additionally, all property management employees became employees of BHTC with INHS reimbursing BHTC monthly for personnel and other administrative services.

40 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 22 Better Housing of Tompkins County Affiliation - Continued

 Developer Fees Receivable - INHS holds minority ownership stakes in the related parties listed below. These companies have been formed to develop affordable housing rental units using the federal low income housing tax credit program. INHS records earned developer fees as receivables according as outlined in development services agreements by project. Amounts receivable at December 31, 2017 and 2016 were as follows:

2017 2016 Cedar Creek Housing, LLC $ 140,458 $ 151,104 Breckenridge on Seneca, LLC 91,033 96,003 Hancock & First, LLC 1,233,443 Ithaca City Apartments, LLC 742,460 Pine View Circle, LLC 781,314 Total Developer Fees Receivable $ 2,988,708 $ 247,107

Less current portion 2,051,573 15,616

Total Developer Fees Receivable, Net of Current Portion $ 937,135 $ 231,491

Note 23 Related Party and Affiliate Transactions  Other receivables - INHS occasionally provides temporary funding to its affiliated organization and related parties. The funds are primarily used to purchase materials and pay for closing costs for various construction projects and will be paid back when the projects are completed and permanent financing is established. Additionally, INHS executed a note agreement with BHTC in 2015 to provide operating support. The note bears no interest and is anticipated to be paid in full in fiscal year 2018. Other receivables at December 31, 2017 and 2016 were as follows:

Entity Purpose 2017 2016 BHTC Operating support - note $ 29,168 $ 100,000 BHTC Construction 426,500 BHTC Other 2,726 Hancock & First, LLC Construction 244,139 99,139 Pine View Circle, LLC Construction 235,000 Ithaca City Apartments, LLC Other 400 Total $ 937,933 $ 199,139

Due to Affiliate - At December 31, 2017 and 2016 INHS owed BHTC a net amount of $14,737 and $773, respectively, for payments collected on behalf of BHTC and reimbursements of costs.

41 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 23 Related Party and Affiliate Transactions - Continued

 Notes Receivable - INHS holds minority ownership stakes in the related parties listed below. These companies have been formed to facilitate the construction of various development projects. Amounts receivable at December 31, 2017 and 2016 were as follows: 2017 2016 Related Parties: Cedar Creek Housing, LLC $ 312,000 $ 312,000 Cedar Creek Housing, LLC 270,000 270,000 Overlook at West Hill 390,000 390,000 Overlook at West Hill II 298,000 298,000 Breckenridge on Seneca, LLC 500,000 500,000 Breckenridge on Seneca, LLC 550,000 550,000 Stone Quarry Apartments, LLC 200,000 200,000 Stone Quarry Apartments, LLC 100,000 100,000 Hancock & First, LLC 300,000 300,000 Hancock & First, LLC 120,000 120,000 Hancock & First, LLC 292,100 292,100 Hancock & First, LLC 136,271 136,271 Hancock & First, LLC 454,026 Ithaca City Apartments, LLC 939,343 Ithaca City Apartments, LLC 3,285,014 Affiliate: Better Housing of Tompkins County 76,350 76,350 Total $ 8,223,104 $ 3,544,721

See Note 3 for additional disclosures related to the above notes receivable balances.

 Other Affiliate Transactions - For the years ended December 31, 2017 and 2016, INHS billed BHTC $11,885 and $296,136, respectively, to compensate INHS for personnel and administrative services. During 2017 and 2016, INHS paid BHTC $402,134 and $241,463 respectively, as reimbursement for employee related expenses.

During 2016, INHS secured a $130,404 loan from the Ithaca Urban Renewal Agency (IURA) to assist with costs associated with the construction of the 210 Hancock project. Effective June 30, 2016, INHS executed a note receivable agreement to relend the funds to Hancock & First, LLC to be used for the project. INHS then completed an assignment agreement transferring its interest in the note to the IURA. As a result, no financial activity relating to these agreements is shown in the INHS financial statements.

42 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

Note 23 Related Party and Affiliate Transactions - Continued During 2016, INHS secured a $516,000 loan with First Niagara Bank, N.A. (FNB) through the Federal Home Loan Bank of New York Affordable Housing Program, to assist with costs associated with the construction of the Poets Landing Phase II Project. Effective September 1, 2016, INHS executed a note receivable agreement to relend the funds to Poets Landing Phase II, LLC to be used for the project. INHS then completed an assignment agreement transferring its interest in the note to FNB. As a result, no financial activity relating to these agreements is shown in the INHS financial statements.

During 2015 and 2016, INHS incurred and accumulated costs related to the 210 Hancock project. During 2016, the property was sold to Hancock & First, LLC, a related party, for $1,070,000.

 Other transactions - On December 27, 2017, INHS sold 98 affordable housing units of its wholly owned properties to Ithaca City Apartments, LLC for $6,962,876. See Note 1 for more information regarding Ithaca City Apartments, LLC. This sale included the following properties: 602 W. Green St., 216 Cascadilla St., 402 Center St., 402 W. Seneca St., 107 Fourth St., 113 Fourth St., 418-420 Cascadilla St., 316-318 S. Corn St., 110-112 Esty St., 380-390 Floral Ave., 356 Floral Ave., 417 Cascadilla St., 108 N. Corn St., 105 Fourth St. At the time of the sale, the properties had a carrying value of $1,734,306, resulting in a gain on disposal of $5,228,570. These units will be substantially renovated with funds from the NYS Housing Finance Agency and the federal low income housing tax credit program. Additionally, $3,285,014 of the sale proceeds were in the form of a seller’s note, See Note 3 for more information.

Note 24 Subsequent Events Ithaca Neighborhood Housing Services, Inc. and Subsidiaries have evaluated subsequent events through April 12, 2018, the date which the financial statements were available to be issued.

Notes Receivable – Ithaca City Apartments, LLC In 2017, INHS was awarded and received a $4,000,000 grant award from City of Ithaca, NYS Stabilization funds provided by Local Initiatives Support Corporation (LISC). On December 27, 2017, Ithaca City Apartments, LLC (ICA) signed a note payable to INHS for $4,000,000. The note was executed to provide ICA with funds necessary for the rehabilitation of properties previously owned by INHS. The note bears no interest and calls for annual payments of principal for a term of 30 years, subject to available cash flow. The $4,000,000 was disbursed to ICA in January 2018.

In 2016, INHS was awarded and received a $300,000 grant award from the Tompkins County Affordable Housing Trust Program. On December 27, 2017, Ithaca City Apartments, LLC (ICA) signed a note payable to INHS for $300,000. The note was executed to provide ICA with funds necessary for the rehabilitation of properties previously owned by INHS. The note calls for annual payments of principal and interest at a rate of 1.00% compounded annually for a term of 30 years, subject to available cash flow. The $300,000 was disbursed to ICA in January 2018. 43 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATING SCHEDULE OF FINANCIAL POSITION FOR THE YEAR ENDED DECEMBER 31, 2017

NRC AHC General HOME Real Estate CDFI Operating Loan Grant Project Loan Program Development Loan Fund Fund Fund Fund Fund Fund Fund Fund ASSETS Current Assets Cash and Cash Equivalents: Checking Accounts: Unrestricted $ 97,816 $ $ $ $ 812,923 $ $ 6,721,441 $ Restricted 236,017 185,617 100 250,502 1,278 Real estate tax escrow Reserve for capital improvements 69,382 Reserve for operations 522,465 Total Cash and Cash Equivalents 689,663 236,017 185,617 100 812,923 250,502 6,721,441 1,278 Accounts receivable 30,635 775 197,943 Developer fee receivable, current portion 2,051,573 Loans receivable, current portion 190,923 172,049 55,117 Prepaid expenses 28,565 Due from other funds 26,244 141,020 100,176 258,753 7,121 Buildings held for resale 515,000 Pre-development costs 496,953 Total Current Assets 775,107 568,735 285,793 100 1,243,725 305,619 9,990,031 1,278 Loans receivable, net, noncurrent portion 1,435,704 93,464 4,655,889 691,952 Notes receivable 688,000 4,612,707 Accrued interest receivable 463,329 191,832 Other receivables 2,726 29,168 905,639 Developer fee receivable, net of current portion 937,135 Investment in subsidiaries 1,099,000 500,000 100,000 1,302,397 Construction in progress 330,501 673,844 Fixed assets, net 388,029 635,800 12,561 603,158 10,528 Total Assets $ 2,264,862 $ 3,470,740 $ 1,643,147 $ 100 $ 6,531,940 $ 997,571 $ 18,624,113 $ 1,278 LIABILITIES AND NET ASSETS/ STOCKHOLDER'S EQUITY Current Liabilities Accounts payable $ 22,923 $ 7,589 $ $ $ 2,110 $ $ 150,607 $ Accrued liabilities 19,583 58 Restricted grant income/Unearned income Due to other funds 1,085 260,583 2,643 10,854 241,019 Due to affiliate 14,068 669 Deferred revenue 44,762 Security deposits payable Line-of-credit payable 300,000 Mortgages, notes and loans payable, current portion - 1,020,267 Total Current Liabilities 57,659 268,899 2,643 - 57,726 - 1,711,893 - Mortgages, notes and loans payable, net of current portion 500,000 118,086 Compensated absences 41,056 Total Liabilities 98,715 268,899 2,643 - 557,726 - 1,829,979 - Net Assets Unrestricted - Undesignated 1,527,861 148,521 100 5,974,214 100,335 16,794,134 1,278 - Board designated 591,847 Temporarily restricted 46,439 3,201,841 897,236 Permanently restricted 1,491,983 Total Net Assets 2,166,147 3,201,841 1,640,504 100 5,974,214 997,571 16,794,134 1,278 Stockholder's Equity Common stock 10 shares issued and outstanding Contributed capital Retained Earnings Total Stockholder's Equity ------Total Liabilities and Net Assets/ Stockholder's Equity $ 2,264,862 $ 3,470,740 $ 1,643,147 $ 100 $ 6,531,940 $ 997,571 $ 18,624,113 $ 1,278 See Independent Auditor's Report

44

Rental Cascadilla CLF PRI NHS INHS INHS Poets INHS Management Green II Loan Loan Housing Breckenridge Stone Quarry Landing Hancock Fund Fund Fund Fund Corp. Inc. Inc. Inc. Inc. Subtotal Eliminations Total

$ 54,863 $ 112,985 $ $ $ 611 $ $ 1,063 $ 950 $ 7,924 $ 7,810,576 $ $ 7,810,576 89,682 170,877 285,000 1,219,073 1,219,073 161,256 28,874 190,130 190,130 544,546 30,667 644,595 644,595 48,361 9,869 580,695 580,695 898,708 182,395 170,877 285,000 611 - 1,063 950 7,924 10,445,069 - 10,445,069 16,111 2,018 29,123 1,981 278,586 278,586 2,051,573 2,051,573 418,089 418,089 21,351 49,916 49,916 1,078 534,392 (534,392) - 515,000 515,000 496,953 496,953 - 937,248 184,413 200,000 285,000 611 - 3,044 950 7,924 14,789,578 (534,392) 14,255,186 756,000 388,500 8,021,509 8,021,509 270,000 1,050,000 300,000 1,302,397 8,223,104 8,223,104 6,511 168,447 35,362 45,059 910,540 910,540 400 937,933 937,933 937,135 937,135 (103) 74,943 (25) (157) 3,076,055 (3,001,397) 74,658 1,004,345 1,004,345 900,258 2,550,334 2,550,334 $ 1,837,906 $ 184,413 $ 956,000 $ 673,500 $ 277,019 $ 1,293,390 $ 338,381 $ 793 $ 1,355,380 $ 40,450,533 $ (3,535,789) $ 36,914,744

$ 39,370 $ 59,207 $ $ $ $ $ $ $ 1,504 $ 283,310 $ $ 283,310 7,007 26,648 26,648 5,375 5,375 5,375 30 2,057 9,000 7,121 534,392 (534,392) - 14,737 14,737 1,927 46,689 46,689 89,682 89,682 89,682 300,000 300,000 1,020,267 1,020,267 141,464 61,264 - 9,000 - - - - 10,552 2,321,100 (534,392) 1,786,708

618,086 618,086 41,056 41,056 141,464 61,264 - 9,000 - - - - 10,552 2,980,242 (534,392) 2,445,850

1,103,535 82,613 25,732,591 25,732,591 592,907 40,536 1,225,290 1,225,290 956,000 664,500 5,766,016 5,766,016 1,491,983 1,491,983 1,696,442 123,149 956,000 664,500 - - - - - 34,215,880 - 34,215,880

2,000 2,000 (2,000) - 272,000 1,125,000 300,000 1,302,397 2,999,397 (2,999,397) - 3,019 168,390 38,381 793 42,431 253,014 253,014 - - - - 277,019 1,293,390 338,381 793 1,344,828 3,254,411 (3,001,397) 253,014

$ 1,837,906 $ 184,413 $ 956,000 $ 673,500 $ 277,019 $ 1,293,390 $ 338,381 $ 793 $ 1,355,380 $ 40,450,533 $ (3,535,789) $ 36,914,744

44a ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATING SCHEDULE OF FINANCIAL POSITION FOR THE YEAR ENDED DECEMBER 31, 2016

NRC AHC General HOME Real Estate CDFI Operating Loan Grant Project Loan Program Development Loan Fund Fund Fund Fund Fund Fund Fund Fund ASSETS Current Assets Cash and Cash Equivalents: Checking Accounts: Unrestricted $ 273,575 $ $ $ $ 1,031,579 $ $ 1,236,006 $ Restricted 95,885 211,857 100 236,878 26,562 Real estate tax escrow Reserve for capital improvements 126,270 Reserve for operations 512,056 Total Cash and Cash Equivalents 911,901 95,885 211,857 100 1,031,579 236,878 1,236,006 26,562 Accounts receivable 28,266 73,258 85,108 5,049 Developer fee receivable, current portion 15,616 Loans receivable, current portion 187,936 171,640 55,117 Prepaid expenses 25,662 Due from other funds 50,695 153,155 275,363 211,455 25,372 5,761 Buildings held for resale 292,000 Pre-development costs 153,330 Total Current Assets 1,016,524 802,234 487,220 100 1,499,782 291,995 1,435,373 32,323 Loans receivable, net, noncurrent portion 1,755,180 241,329 4,385,805 760,669 Mortgage origination fees, net Notes receivable 1,000,000 76,350 Accrued interest receivable 580,775 Other receivables 100,000 99,139 Developer fee receivable, net of current portion 231,491 Investment in subsidiaries 1,099,000 500,000 100,000 848,371 Construction in progress 170,019 222,278 Fixed assets, net 403,528 633,560 14,778 603,158 10,537 Total Assets $ 2,519,052 $ 3,860,993 $ 2,424,102 $ 100 $ 6,588,745 $ 1,052,664 $ 2,923,539 $ 32,323 LIABILITIES AND NET ASSETS/ STOCKHOLDER'S EQUITY Current Liabilities Accounts payable $ 35,297 $ 3,566 $ $ $ $ $ 19,513 $ Accrued liabilities 20,420 Restricted grant income/Unearned income Due to other funds 1,390 245,304 132 48,210 275,000 Due to affiliate 773 Deferred revenue 20,107 58,717 Security deposits payable Line-of-credit payable 200,000 Mortgages, notes and loans payable, current portion 500,000 Total Current Liabilities 57,107 469,750 132 - 606,927 - 294,513 - Mortgages, notes and loans payable, net of current portion 120,000 Compensated absences 41,081 Total Liabilities 98,188 469,750 132 - 606,927 - 414,513 - Net Assets Unrestricted - Undesignated 1,743,710 292,566 100 5,981,818 100,311 2,509,026 1,496 - Board designated 638,326 Temporarily restricted 38,828 3,391,243 952,353 30,827 Permanently restricted 2,131,404 Total Net Assets 2,420,864 3,391,243 2,423,970 100 5,981,818 1,052,664 2,509,026 32,323 Stockholder's Equity Common stock 10 shares issued and outstanding Contributed capital Retained Earnings Total Stockholder's Equity ------Total Liabilities and Net Assets/ Stockholder's Equity $ 2,519,052 $ 3,860,993 $ 2,424,102 $ 100 6,588,745 $ 1,052,664 $ 2,923,539 $ 32,323 See Independent Auditor's Report

45

Rental Cascadilla CLF NHS INHS INHS Poets INHS Management Green II Loan Housing Breckenridge Stone Quarry Landing Hancock Fund Fund Fund Corp. Inc. Inc. Inc. Inc. Subtotal Eliminations Total

$ 111,047 $ 92,703 $ $ 651 $ $ $ 975 $ $ 2,746,536 $ $ 2,746,536 112,133 9,912 693,327 693,327 130,345 19,844 150,189 150,189 474,802 24,522 625,594 625,594 41,506 7,816 561,378 561,378 869,833 154,797 - 651 - - 975 - 4,777,024 - 4,777,024 31,964 3,884 227,529 227,529 15,616 15,616 414,693 414,693 70,864 6,161 102,687 102,687 606 722,407 (722,407) - 292,000 292,000 153,330 153,330 973,267 164,842 - 651 - - 975 - 6,705,286 (722,407) 5,982,879 412,350 7,555,333 7,555,333 47,099 47,099 47,099 270,000 1,050,000 300,000 848,371 3,544,721 3,544,721 5,822 133,781 24,072 744,450 744,450 199,139 199,139 231,491 231,491 (91) 74,943 (12) 2,622,211 (2,547,371) 74,840 392,297 392,297 2,379,371 253,069 4,298,001 4,298,001 $ 3,399,737 $ 417,911 $ 412,350 $ 276,382 $ 1,258,724 $ 324,060 $ 975 $ 848,371 $ 26,340,028 $ (3,269,778) $ 23,070,250

$ 26,298 $ 694 $ $ $ $ $ $ $ 85,368 $ $ 85,368 22,057 14,625 57,102 57,102 7,159 445 7,604 7,604 152,371 722,407 (722,407) - 773 773 78,824 78,824 112,133 9,912 122,045 122,045 200,000 200,000 150,097 57,508 707,605 707,605 470,115 83,184 ------1,981,728 (722,407) 1,259,321

1,878,666 124,167 2,122,833 2,122,833 41,081 41,081 2,348,781 207,351 ------4,145,642 (722,407) 3,423,235

534,648 178,222 11,341,897 11,341,897 516,308 32,338 1,186,972 1,186,972 412,350 4,825,601 4,825,601 2,131,404 2,131,404 1,050,956 210,560 412,350 - - - - - 19,485,874 - 19,485,874

2,000 2,000 (2,000) - 272,000 1,125,000 300,000 848,371 2,545,371 (2,545,371) - 2,382 133,724 24,060 975 161,141 161,141 - - - 276,382 1,258,724 324,060 975 848,371 2,708,512 (2,547,371) 161,141

$ 3,399,737 $ 417,911 $ 412,350 $ 276,382 $ 1,258,724 $ 324,060 $ 975 $ 848,371 $ 26,340,028 $ (3,269,778) $ 23,070,250

45a ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATING SCHEDULE OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2017

NRC AHC General HOME Real Estate CDFI Operating Loan Grant Project Loan Program Development Loan Fund Fund Fund Fund Fund Fund Fund Fund CHANGES IN UNRESTRICTED NET ASSETS Public Support Contributions $ 165,368 $ $ $ $ $ $ $ Revenue Program income 51,863 Rental income Interest income 2,963 138,931 24 48 Developer fees 4,118,437 Management Fees 458,633 Interfund revenue 404,342 210,591 5,715,806 Gain on sale of fixed assets Other 27,430 10,038 3,018 53,573 Net assets released from restrictions 424,751 486,301 1,005,564 - 55,117 5,165,086 30,827

Total Unrestricted Support and Revenue 1,535,350 496,339 1,008,582 - 349,522 55,141 15,052,950 30,827

Expenses Program expenses 496,339 1,152,627 - 357,126 55,117 767,842 31,045 Management and general 1,789,587 Fundraising 8,091

Total Expenses 1,797,678 496,339 1,152,627 - 357,126 55,117 767,842 31,045

TOTAL CHANGES IN UNRESTRICTED NET ASSETS/ STOCKHOLDER'S EQUITY (262,328) - (144,045) - (7,604) 24 14,285,108 (218)

CHANGES IN TEMPORARILY RESTRICTED NET ASSETS Public Support City of Ithaca: Community Development Block Grant 30,000 Home Investment Partnership Program 202,847 191,060 Contributions Tompkins County Affordable Housing 40,000 300,000 Tompkins County Community Housing Trust Program 64,693 NYS Division of Housing and Community Renewal 91,526 Neighborhood Reinvestment Corporation 227,758 100,000 Affordable Housing Corporation 8,400 120,000 Local Initiatives Support Corporation 4,000,000 NYS Energy Research and Development Authority 454,026 Other grants 9,985 Revenue Contributions Interest income 54,052 76,143 Net assets released from restrictions (424,751) (486,301) (76,143) - - (55,117) (5,165,086) (30,827)

TOTAL CHANGES IN TEMPORARILY RESTRICTED NET ASSETS 7,611 (189,402) - - - (55,117) - (30,827)

CHANGES IN PERMANENTLY RESTRICTED NET ASSETS Public Support Neighborhood Reinvestment Corporation Capital Grant 290,000 Net assets released from restrictions (929,421)

TOTAL CHANGES IN PERMANENTLY RESTRICTED NET ASSETS - - (639,421) - - - - -

CHANGES IN NET ASSETS/STOCKHOLDER'S EQUITY (254,717) (189,402) (783,466) - (7,604) (55,093) 14,285,108 (31,045)

NET ASSETS/EQUITY, BEGINNING OF YEAR 2,420,864 3,391,243 2,423,970 100 5,981,818 1,052,664 2,509,026 32,323

OTHER CHANGES IN NET ASSETS/EQUITY

NET ASSETS/EQUITY, END OF YEAR $ 2,166,147 $ 3,201,841 $ 1,640,504 $ 100 $ 5,974,214 $ 997,571 $ 16,794,134 $ 1,278

46

Rental Cascadilla CLF PRI NHS INHS INHS Poets INHS Management Green II Loan Loan Housing Breckenridge Stone Quarry Landing Hancock Fund Fund Fund Fund Corp. Inc. Inc. Inc. Inc. Subtotal Eliminations Total

$ $ $ $ $ $ $ $ $ $ 165,368 $ $ 165,368

51,863 51,863 1,317,038 132,646 10,601 1,460,285 1,460,285 451 690 34,666 11,290 45,059 234,122 234,122 4,118,437 4,118,437 3,068 461,701 (113,080) 348,621 2,160,933 200,000 8,691,672 (8,691,672) - 5,228,570 5,228,570 5,228,570 34,352 16,222 144,633 144,633 116,666 (162,236) 55,500 7,177,576 7,177,576

8,858,010 148,868 37,764 55,500 690 34,666 14,358 - 55,660 27,734,227 (8,804,752) 18,929,475

8,212,524 236,279 37,764 55,500 41 - 24 25 13,229 11,415,482 (8,804,752) 2,610,730 1,789,587 - 1,789,587 8,091 8,091

8,212,524 236,279 37,764 55,500 41 - 24 25 13,229 13,213,160 (8,804,752) 4,408,408

645,486 (87,411) - - 649 34,666 14,334 (25) 42,431 14,521,067 - 14,521,067

30,000 30,000 393,907 393,907 116,666 116,666 116,666 340,000 340,000 381,414 446,107 446,107 91,526 91,526 720,000 1,047,758 1,047,758 128,400 128,400 4,000,000 4,000,000 454,026 454,026 9,985 9,985

130,195 130,195 (116,666) - 162,236 (55,500) (6,248,155) (6,248,155)

- - 543,650 664,500 - - - - - 940,415 - 940,415

290,000 290,000 (929,421) (929,421)

------(639,421) - (639,421)

645,486 (87,411) 543,650 664,500 649 34,666 14,334 (25) 42,431 14,822,061 - 14,822,061

1,050,956 210,560 412,350 - 276,382 1,258,724 324,060 975 848,371 22,194,386 (2,547,371) 19,647,015

(12) (13) (157) 454,026 453,844 (454,026) (182)

$ 1,696,442 $ 123,149 $ 956,000 $ 664,500 $ 277,019 $ 1,293,390 $ 338,381 $ 793 $ 1,344,828 $ 37,470,291 $ (3,001,397) $ 34,468,894

46a ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATING SCHEDULE OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2016

NRC AHC General HOME Real Estate CDFI Operating Loan Grant Project Loan Program Development Loan Fund Fund Fund Fund Fund Fund Fund Fund CHANGES IN UNRESTRICTED NET ASSETS Public Support Contributions $ 173,680 $ $ $ $ $ $ $ Revenue Program income 68,135 Rental income Interest income 685 126,613 20 272 230 Developer fees 6,232 677,271 Management fees 673,419 Interfund revenue 134,333 174,613 863,000 1,577,107 Other 30,138 7,217 27,057 Net assets released from restrictions 368,628 1,050,444 98,587 7,797 85,347 703,065 1,031,550 Total Unrestricted Support and Revenue 1,455,250 1,232,274 98,587 7,797 989,613 85,367 2,984,772 1,031,780

Expenses Program expenses 1,232,274 385,215 7,797 544,190 85,347 920,964 1,031,550 Management and general 2,300,623 Fundraising 14,159

Total Expenses 2,314,782 1,232,274 385,215 7,797 544,190 85,347 920,964 1,031,550

TOTAL CHANGES IN UNRESTRICTED NET ASSETS/ STOCKHOLDER'S EQUITY (859,532) - (286,628) - 445,423 20 2,063,808 230

CHANGES IN TEMPORARILY RESTRICTED NET ASSETS Public Support City of Ithaca: Community Development Block Grant 35,000 Home Investment Partnership Program 122,854 123,065 Contributions Tompkins County Affordable Housing 580,000 Tompkins County Community Housing Trust Program 75,230 NYS Division of Housing and Community Renewal 93,054 Neighborhood Reinvestment Corporation 154,719 HOME Program 39,936 Other grants 9,517 Revenue Interest income 43,743 71,890 Program income 15,999 Net assets released from restrictions (368,628) (1,050,444) (71,890) (7,797) (85,347) (703,065) (1,031,550)

TOTAL CHANGES IN TEMPORARILY RESTRICTED NET ASSETS 38,828 (867,848) - (7,797) - (85,347) - (1,031,550)

CHANGES IN PERMANENTLY RESTRICTED NET ASSETS Public Support Neighborhood Reinvestment Corporation 425,000 Net assets released from restrictions (26,697)

CHANGES IN PERMANENTLY RESTRICTED NET ASSETS - - 398,303 - - - - -

TOTAL CHANGES IN NET ASSETS/EQUITY (820,704) (867,848) 111,675 (7,797) 445,423 (85,327) 2,063,808 (1,031,320)

NET ASSETS/EQUITY, BEGINNING OF YEAR 3,241,568 4,259,091 2,312,295 7,897 5,536,395 1,137,991 445,218 1,063,643

OTHER CHANGES IN NET ASSETS/EQUITY

NET ASSETS/EQUITY, END OF YEAR $ 2,420,864 $ 3,391,243 $ 2,423,970 $ 100 $ 5,981,818 $ 1,052,664 $ 2,509,026 $ 32,323

47

Rental Cascadilla CLF NHS INHS INHS Poets INHS Management Green II Loan Housing Breckenridge Stone Quarry Landing Hancock Fund Fund Fund Corp. Inc. Inc. Inc. Inc. Subtotal Eliminations Total

$ $ $ $ $ $ $ $ 173,680 $ $ 173,680

68,135 68,135 1,366,237 133,218 1,499,455 1,499,455 479 688 34,479 11,012 174,478 174,478 683,503 683,503 673,419 (111,987) 561,432 2,749,053 (2,749,053) - 32,228 9,242 2,700 108,582 108,582 23,333 925 3,369,676 3,369,676 1,422,277 142,460 925 688 34,479 11,012 2,700 - 9,499,981 (2,861,040) 6,638,941

1,408,502 101,863 925 413 - - 5,025 - 5,724,065 (2,163,933) 3,560,132 2,300,623 (697,107) 1,603,516 14,159 14,159

1,408,502 101,863 925 413 - - 5,025 - 8,038,847 (2,861,040) 5,177,807

13,775 40,597 - 275 34,479 11,012 (2,325) - 1,461,134 - 1,461,134

35,000 35,000 245,919 245,919 23,333 23,333 23,333 580,000 580,000 413,275 488,505 488,505 93,054 93,054 154,719 154,719 39,936 39,936 9,517 9,517

115,633 115,633 15,999 15,999 (23,333) (925) (3,342,979) (3,342,979)

- - 412,350 - - - - - (1,541,364) - (1,541,364)

425,000 425,000 (26,697) (26,697)

------398,303 - 398,303

13,775 40,597 412,350 275 34,479 11,012 (2,325) - 318,073 - 318,073

1,037,181 169,963 276,122 1,224,263 313,048 3,300 21,027,975 (1,699,000) 19,328,975

(15) (18) 848,371 848,338 (848,371) (33)

$ 1,050,956 $ 210,560 412,350 $ 276,382 $ 1,258,724 $ 324,060 $ 975 $ 848,371 22,194,386 $ (2,547,371) $ 19,647,015

47a ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATING SCHEDULE OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2017

NRC AHC General HOME Real Estate CDFI Rental Operating Loan Grant Project Loan Program Development Loan Management Fund Fund Fund Fund Fund Fund Fund Fund Fund

Salaries $ 578,032 $ 33,624 $ $ $ $ $ $ $ 365,441 Pension expense 70,419 39,939 Employee benefits 132,537 Payroll taxes 90,136

Total Salaries and Related Expenses 871,124 33,624 ------405,380

Management fees (revenues) 103,280 Professional fees 105,576 9,580 18,802 2,543 Contract services 493,849 30,047 Purchases and supplies 50,312 4,491

Telephone 8,859 1,925 Postage and shipping 6,639 2,780 Printing and copying expense 15,748 Occupancy 220

Building maintenance and service 854 102,813 Utilities 7,451 119,870 Equipment maintenance and repairs 16,556

Property taxes 291,132 Grants 24,773 249,342 1,270 311,060 Dues and subscriptions expense 15,781 6,482

Travel and meetings 38,372 306 330 Truck expense 21,041 85 Tools 4,166 50

Insurance 22,417 49,900 Interest 1,759 7,500 861 92,957 Neighborhood activities 24,151

Miscellaneous 13,643 10,875 7,616 2,279 284 110,325 Marketing 7,770 Fundraising 8,091

Interfund expenses 1,150,411 324,593 434,534 30,761 6,626,964 Loans forgiven 139,878 16,147 55,117

Construction development write-offs 51,281 Bad debts 200 33,271 Income tax

Total Expenses Before Depreciation and Amortization 1,757,593 496,339 1,150,411 - 357,126 55,117 767,842 31,045 7,984,625

Depreciation and Amortization 40,085 2,216 227,899

Total Expenses $ 1,797,678 $ 496,339 $ 1,152,627 - $ 357,126 $ 55,117 $ 767,842 $ 31,045 $ 8,212,524

See Independent Auditor's Report

48

Cascadilla CLF PRI NHS INHS INHS Poets INHS Green II Loan Loan Housing Breckenridge Stone Quarry Landing Hancock Fund Fund Fund Corp. Inc. Inc. Inc. Inc. Subtotal Eliminations Total

$ 2,404 $ $ $ $ $ $ $ $ 979,501 $ $ 979,501 1,004 111,362 111,362 132,537 132,537 90,136 90,136

3,408 - - - - - 1,313,536 - 1,313,536

9,800 113,080 (113,080) - 145 136,646 136,646 371 524,267 524,267 357 55,160 55,160

362 11,146 11,146 258 9,677 9,677 15,748 15,748 9,584 9,804 9,804

12,351 116,018 116,018 11,602 138,923 138,923 16,556 16,556

25,522 316,654 316,654 37,764 55,500 679,709 679,709 1,390 23,653 23,653

16 39,024 39,024 21,126 21,126 4,216 4,216

20,571 3,621 96,509 96,509 2,139 105,216 105,216 24,151 24,151

603 41 24 24 145,714 145,714 7,770 7,770 8,091 8,091

124,409 8,691,672 (8,691,672) - 211,142 211,142

51,281 51,281 10,926 44,397 44,397 25 25 25

224,230 37,764 55,500 41 - 24 25 13,229 12,930,911 (8,804,752) 4,126,159

12,049 282,249 282,249

$ 236,279 $ 37,764 $ 55,500 $ 41 $ - $ 24 $ 25 $ 13,229 $ 13,213,160 $ (8,804,752) $ 4,408,408

48a ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATING SCHEDULE OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2016

NRC AHC General HOME Real Estate CDFI Rental Operating Loan Grant Project Loan Program Development Loan Management Fund Fund Fund Fund Fund Fund Fund Fund Fund

Salaries $ 572,155 $ 43,218 $ $ $ $ $ $ $ 381,838 Pension expense 81,349 Employee benefits 177,360 Payroll taxes 119,938

Total Salaries and Related Expenses 950,802 43,218 ------381,838

Management fees 101,470 Professional fees 74,765 7,597 377 36,291 3,580 Contract services 286,996 8,337 Purchases and supplies 46,914

Telephone 9,039 Postage and shipping 9,143 Printing and copying expense 13,742 398

Building maintenance and service 103 130,914 Utilities 6,832 104,651 Equipment maintenance and repairs 12,727

Property taxes 244,215 Grants 6,108 7,797 7,469 403,065 168,550 Dues and subscriptions expense 13,822 3,103

Travel and meetings 36,942 42 911 Truck expense 19,114 Tools 442 402

Insurance 31,860 73,878 Interest 7,108 7,701 10,450 97,347 Neighborhood activities 13,194

Miscellaneous 7,410 110,207 2,265 9,158 14,449 902 Marketing 20,253 499 Fundraising 14,159

Interfund expenses 697,107 100,000 380,733 515,552 192,661 863,000 Loans forgiven 146,689 3,933 85,347 Loss on sale of buildings 264,006

Construction development write-offs 817,455 Bad debts 500 15,967 Income tax

Total Expenses Before Depreciation and Amortization 2,271,974 1,232,274 382,998 7,797 544,190 85,347 920,964 1,031,550 1,168,412

Depreciation and Amortization 42,808 2,217 240,090

Total Expenses $ 2,314,782 $ 1,232,274 $ 385,215 $ 7,797 $ 544,190 $ 85,347 $ 920,964 $ 1,031,550 $ 1,408,502

See Independent Auditor's Report

49

Cascadilla CLF NHS INHS INHS Poets INHS Green II Loan Housing Breckenridge Stone Quarry Landing Hancock Fund Fund Corp. Inc. Inc. Inc. Inc. Subtotal Eliminations Total

$ 4,582 $ $ $ $ $ $ $ 1,001,793 $ $ 1,001,793 81,349 81,349 177,360 177,360 119,938 119,938

4,582 ------1,380,440 - 1,380,440

10,517 111,987 (111,987) 600 123,210 123,210 545 295,878 295,878 513 47,427 47,427

257 9,296 9,296 371 9,514 9,514 14,140 14,140

18,348 149,365 149,365 10,916 122,399 122,399 12,727 12,727

21,536 265,751 265,751 925 593,914 593,914 597 17,522 17,522

13 37,908 37,908 19,114 19,114 844 844

10,864 116,602 116,602 9,183 131,789 131,789 13,194 13,194

972 5,000 150,363 150,363 20,752 20,752 14,159 14,159

2,749,053 (2,749,053) 235,969 235,969 264,006 264,006

817,455 817,455 16,467 16,467 413 25 438 438

89,814 925 413 - - 5,025 - 7,741,683 (2,861,040) 4,880,643

12,049 297,164 297,164

$ 101,863 $ 925 $ 413 $ - $ - $ 5,025 $ - $ 8,038,847 $ (2,861,040) $ 5,177,807

49a

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of Directors Ithaca Neighborhood Housing Services, Inc. and Subsidiaries Ithaca, New York

We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the consolidated financial statements of Ithaca Neighborhood Housing Services, Inc. (a nonprofit organization) and Subsidiaries (INHS), which comprise the Consolidated Statements of Financial Position as of December 31, 2017, and the related Consolidated Statements of Activities, Functional Expenses, and Cash Flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated April 12, 2018.

Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered INHS’ internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of INHS’ internal control. Accordingly, we do not express an opinion on the effectiveness of the INHS’ internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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Insero & Co . CPAs, LLP Rochester | Ithaca | Corning | Cortland | Watkins Glen | (800) 232-9547 | www.inserocpa.com

Compliance and Other Matters As part of obtaining reasonable assurance about whether INHS’ financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of INHS’ internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering INHS’ internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Respectfully Submitted,

Insero & Co. CPAs, LLP Certified Public Accountants

Ithaca, New York April 12, 2018

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INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY UNIFORM GUIDANCE

Board of Directors Ithaca Neighborhood Housing Services, Inc. and Subsidiaries Ithaca, New York

Report on Compliance for Each Major Federal Program We have audited Ithaca Neighborhood Housing Services, Inc. and Subsidiaries’ (INHS) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of INHS’ major federal programs for the year ended December 31, 2017. INHS’ major federal programs are identified in the summary of auditor’s results section of the accompanying Schedule of Findings and Questioned Costs.

Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of INHS’ major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about INHS’ compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination on Ithaca Neighborhood Housing Services, Inc. and Subsidiaries’ compliance.

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Insero & Co. CPAs, LLP Rochester | Ithaca | Corning | Cortland | Watkins Glen | (800) 232-9547 | www.inserocpa.com

Opinion on Each Major Federal Program In our opinion, Ithaca Neighborhood Housing Services, Inc. and Subsidiaries’ complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2017.

Report on Internal Control Over Compliance Management of INHS is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered INHS’ internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of INHS’ internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Respectfully Submitted,

Insero & Co. CPAs, LLP Certified Public Accountants

Ithaca, New York April 12, 2018

53 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS DECEMBER 31, 2017

Federal Grantor/ Federal Pass-Through Expenditures to Pass-Through Grantor Program Title CFDA # Grantor No. Subrecipients Expenditures

U.S. Department of Housing and Urban Development

CDBG - Entitlement Grants Cluster: Passed Through the County of Tompkins: Community Development Block Grant/Entitlement 14.218 (1) Grants $ $ 787,32 0

Passed Through the City of Ithaca: Community Development Block Grant/Entitlement

Grants 14.218 (1) 446,107 Total CDBG - Entitlement Grants Cluster 1,233,427

Passed Through the City of Ithaca: Home Investments Partnership Program 14.239 (1) 317,440

Total U.S. Department of Housing and

Urban Development 1,550,777

U.S. Department of the Treasury Community Development Financial Institution 21.020 N/A 30,761 NeighborWorks® America 21.000 N/A 828,135

Total U.S. Department of the Treasury 858,896

Total Expenditures of Federal Awards $ $ 2,409,763

(1) - Denotes Unable to Obtain Pass-Through Grantor No.

N/A - Denotes Not Applicable (Direct Award)

See Notes to Schedule of Expenditures of Federal Awards

54 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS DECEMBER 31, 2017

Note 1 Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal awards programs administered by INHS, an entity as defined in Note 1 to INHS’ financial statements. Federal awards received directly from federal agencies, as well as federal awards passed through from other government agencies, are included on the Schedule of Expenditures of Federal Awards.

Note 2 Basis of Accounting The basis of accounting varies by federal program consistent with the underlying regulations pertaining to each program.

The amounts reported as federal expenditures generally were obtained from the appropriate federal financial reports for the applicable program and periods. The amounts reported in these federal financial reports are prepared from records maintained for each program. These records are periodically reconciled to the general ledger, which is the source of the financial statements.

Note 3 Indirect Costs Indirect costs are included in the reported expenditures to the extent they are included in the federal financial reports used as the source for the data presented. INHS did not elect to use the deminimus indirect cost rate permitted under the Uniform Guidance.

Note 4 Matching Costs Matching costs, i.e., INHS’ share of certain program costs, are not included in the reported expenditures.

Note 5 Purpose of the Grants The purpose of the grants is to enable INHS to procure, repair, and recycle housing for low- income individuals and families. The Community Development Block Grant reflects rent monies received from housing previously restored by federal grant money.

55 ITHACA NEIGHBORHOOD HOUSING SERVICES, INC. AND SUBSIDIARIES

SCHEDULE OF FINDINGS AND QUESTIONED COSTS DECEMBER 31, 2017

I. Summary of auditor’s results

a. Type of report issued on financial statements of auditee - unmodified.

b. Significant deficiencies in internal control were not disclosed by the audit of the financial statements.

c. The audit of the financial statements disclosed no noncompliance that is material to the financial statements of the auditee.

d. No significant deficiencies in internal control over major programs were disclosed by the audit.

e. Type of report issued on compliance for major programs - unmodified.

f. No audit findings under Uniform Guidance §200.516(a) were disclosed.

g. Major programs are as follows:

U.S. Department of Treasury: NeighborWorks® America CFDA #21.000

h. The dollar threshold used is $750,000 to distinguish between Type A and Type B programs.

i. The auditee qualified as a low-risk auditee.

II. Findings required to be reported under GAGAS None

III. Findings required to be reported under Uniform Guidance None

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