"Rethink the Rental" is a unique program providing one of the lowest possible financing rates for the development, purchase and installation of HUD-Code and manufactured homes on single or multiple development tracts. Attractive developer packages and interest rates are realized through tax credits, tax-exempt bond structure and mortgage loan guarantees under the USDA 538 Rural Rental Housing Program.

	Level debt service
	Up to 40-yr amortization

Out-of-pocket and development costs are reimbursed, while a Developer Fee is paid from bond proceeds at closing or during construction period. The Developer may also take back a deferred developer fee or subordinated taxable or tax-exempt bonds and may have identity of interest with Contractor and Manager.

	Developer identifies the site, and with the help of KND, conducts a preliminary due diligence including USDA designated area determination. A qualified USDA Lender is engaged to apply for a USDA 538 Rural Rental Housing Program guaranteed loan.
	KND and Peck, Shaffer & Williams, LLP assist the Developer with an application for tax-exempt bond volume allocation, selection of tax-credit investor proceeds, and identification of a municipal bond Issuer.
	Bond Issuer issues tax-exempt bonds (up to 40-yr amortization), KND sells the bonds, and the bond sale proceeds are given to the Lender who then makes a direct loan to the Partnership. Bond obligation and USDA loss reimbursement are typically non-recourse obligations of the Partnership and General Partner.

In addition to earning a Developer Fee, the Developer may serve as the General Partner in a newly created tax-credit limited partnership serving as the development's ownership entity. One or more Limited Partners (so called "tax-credit investors," which may include Developer or affiliates) are admitted to the limited partnership for equity investment. The General Partner typically receives the following, subject to final negotiations with Limited Partners:

	Partnership or Asset Management Fee in a fixed amount based on size of development
	Interest in Excess Cash Flow from operations of the development as a horizontal rental community
	Property Management Fees in an amount equal to 4%-8% of gross receipts
	Reimbursement for administrative costs of development oversight
	Residual interest in community upon sale of fee simple title to each home at end of 15-yr period

With bond proceeds and tax credit equity secured and funded, the Developer proceeds with site improvements using HUD Code or manufactured homes on each lot. The Developer may also be reimbursed for certain other out-of-pocket costs, as approved by the Lender. Individual homes are then leased to qualified residents. For as long as bonds remain outstanding, homes are available for rent at affordable rent levels. Rental receipts fund bond debt service, servicing and guarantor fees on underlying mortgage loan, community operating costs and ongoing property management fees. During the projected rental period (typically 15 years), the General Partner and Limited Partners share distributable cash flow and partnership or asset management fees. At approximately year 15 (following tax credit compliance period), the renter or other interested party may be granted the option to purchase the home at the then current market value. The secondary market sale proceeds are applied to repay the underlying mortgage and bonds, with all surplus or residual allocated to the Partners. Alternatively, the USDA loan guarantee and underlying tax-exempt bond financing can be maintained or refinanced at the Partnership's discretion.