What is SunAmerica Affordable Housing Partners' business?
SunAmerica is the nation's leading investor in low-income housing tax credits provided under Section 42 of the Internal Revenue Code. SunAmerica has invested in more than 1,200 properties in 48 states and the Virgin Islands, comprising more than 146,000 units of affordable housing.

How long has SunAmerica Affordable Housing Partners been involved in Affordable Housing transactions?
SunAmerica has invested continuously in low-income housing tax credits since 1988.

How many tax credit deals does SunAmerica Affordable Housing Partners do each year?
While there is no limit on the number of transactions in which SunAmerica will invest, SunAmerica typically invests in 70-100 deals per year. SunAmerica has invested in transactions with more than $1.5 billion dollars of credits over the last three years.

What types of tax credit deals are of greatest interest to SunAmerica Affordable Housing Partners?
SunAmerica has invested and will continue to invest in all types of low-income housing tax credit transactions, including HOPE VI transactions, bond deals, acquisition rehabs, inner city and rural, and properties having historic or state credits. The typical transaction has annual credits of $300,000 or more, but SunAmerica has done smaller deals for its developer partners.

What is SunAmerica's relationship with AIG and how is that relationship beneficial to developers?
SunAmerica is an indirect wholly-owned subsidiary of AIG, one of the highest capitalized companies in any industry. AIG's financial strength allows SunAmerica to offer exceptional debt programs to its developer partners.

How does SunAmerica Affordable Housing Partners bring additional value in the areas of construction and asset management?
SunAmerica has 7 senior professionals in its Construction Services department and 9 senior professionals in its Asset Management department. Each of these individuals has over 15 years of experience and, as requested, will provide input to developers on the asset manager, contractor, development plans, market, unit layouts, operations and other "best practices" ideas.

Why is integrity at the core of every potential SunAmerica investment?
More than 80% of SunAmerica's business comes from current developer partners. SunAmerica, and each of its senior managers, is dedicated to the principle that its developers must be able to rely on SunAmerica's commitments without reservation. In 2004, SunAmerica was voted by the readers of Affordable Housing Finance as the nation's leading equity investor in low-income housing tax credit investments. By stressing integrity, SunAmerica deepens existing relationships and fosters an environment to create new ones.

How is SunAmerica Affordable Housing Partners different from other investors?
SunAmerica invests as a principal using its own funds. As a result, SunAmerica is free to structure its investment in any manner acceptable to SunAmerica and its development partners. SunAmerica has financial resources unmatched in the industry. Its parent corporation, AIG is one of the strongest and most stable insurance and financial services organizations in the world having more than $950 billion in assets and approximately $102 billion of shareholders' equity as of December 31, 2006. In all of its investments, SunAmerica focuses on whether the development is a smart real estate investment.

What are SunAmerica Affordable Housing Partners' core values and what do they mean to developer partners?
SunAmerica's core values are predictability, reliability and a real estate focus. When combined with its substantial financial resources and innovative approaches, SunAmerica seeks to be an exceptional partner for its developers.

What are some of the new products and programs being offered by SunAmerica Affordable Housing Partners?
SunAmerica presents solutions to the entire financing of a tax credit project - debt and equity. Unlike some of its competitors, SunAmerica has one profit center and does not have competing internal interests between its debt and its equity personnel. SunAmerica offers its developers new proprietary debt programs and, in certain cases when desired by its partners, will make the construction or permanent loan. Recent debt programs allow the developer the flexibility of a floating rate construction loan coupled with a fixed rate permanent loan. Of course, the developer is free to select SunAmerica's debt products or use other debt in the market.

Since SunAmerica Affordable Housing Partners is a large investor, how can I be sure it can move fast enough to help me respond to the challenges with any deal.
A developer's primary contact at SunAmerica is SunAmerica's acquisition officer who will ensure the developer's issues get timely raised and resolved. SunAmerica's developers are not turned over to a closing department, a disbursement officer or other representative and asked to fend for itself. SunAmerica's acquisition officers will work with their developers on the full gamut of deal issues, including initial structuring, construction draws, and lease-up and permanent loan issues.

Does SunAmerica resell its equity exclusively on a guaranteed basis?
Yes, SunAmerica has resold more than $6 billion of tax credits exclusively on a guaranteed basis. SunAmerica's guarantees are the most encompassing in the industry and consist of the following components: (1) a construction completion guarantee which protects against cost-overruns which could jeopardize a project's completion or its ability to obtain long term financing; (2) an operating deficit guarantee which protects against foreclosure which could cause loss of future tax credits and/or recapture; and (3) base IRR (yield) guarantee which assures the investor will receive a priority distribution in an amount, if necessary, for the investor to receive tax benefits (comprised of tax credits and tax losses) and cash distributions equal to the agreed upon IRR.

Where does SunAmerica Affordable Housing Partners operate and how can I get in touch with a SAHP Acquisition Officer?
SunAmerica has offices throughout the United States and our acquisition personnel may be reached at the phone numbers listed later on this website.

SunAmerica's affordable housing investment began in 1988 when it sought to reduce its own federal tax liability. Initially, SunAmerica was investing in affordable housing in order to use the tax credit for its own tax planning. However, after having formed strong relationships with affordable housing developers and having created a significant pipeline of future tax credit transactions, SunAmerica wanted to maintain its production capacity that had taken a few years to build and began to explore ways in which it could continue to acquire tax credit properties without being limited by its finite tax appetite. In the beginning of 1991, SunAmerica adopted a new business plan that offered other corporate investors the opportunity to repurchase portions of SunAmerica's affordable housing portfolio with SunAmerica's investment grade credit enhancement backing significant investment guarantees. By the summer of 1991, SunAmerica's institutional syndication business was operational and in 1992 the first guaranteed tax credit transaction was closed.

Today, SunAmerica is the largest investors in multifamily housing in the country. To date, SunAmerica has invested in over 1,200 properties qualifying for affordable housing tax credits. These properties represent over 146,000 units nationwide with total development costs of about $12 billion and tax credits in excess of $6 billion. In addition, the strong institutional response to SunAmerica's program has made it one of the industry's largest recipients of corporate equity investments with over $5.5 billion raised to date.

In just over 15 years, the staff of SunAmerica has grown from three employees to 178 employees. In addition to its headquarters in Los Angeles, the company has eleven regional offices that acquire and monitor properties, with offices located in Charlotte, North Carolina; Dallas, Texas; Indianapolis, Indiana; Richmond, Virginia; Bethesda, Maryland; St. Charles, Missouri; Minneapolis, Minnesota; Kennesaw, Georgia; Tampa, Florida; Walnut Creek, California; and Alpharetta, Georgia.

SunAmerica's program offers advantages for qualifying developers which include:

·  Competitive pricing per tax credit dollar.
·  Ability to acquire multiple properties from developers, which is not restricted by geographical diversification limitations imposed by other investors.
·  Investing up to 80% of its equity during the construction period.
·  Collateralizing its future equity fundings on behalf of the construction lender to expedite construction financing.
·  Acquiring properties without permanent loan commitments in place.
·  Not requiring a permanent mortgage commitment allowing developers and their projects to avoid the high cost of "forward commitment" fees or "interest rate locks" (which normally will only be funded to a loan amount that meets the lender's stabilized underwriting criteria).
·  Providing the construction lender with a permanent loan take-out agreement to facilitate an early construction.
·  Allowing developers to obtain a permanent loan after project completion while other developers cannot start construction until they obtain their initial permanent loan/equity combination Early construction starts not only make the tax credit time limits achievable, but also depending upon inflation, may save the project 3-5% in rising costs by avoiding the long delays associated with securing standard equity and permanent debt commitments.
·  Providing guarantees to mortgage lenders to allow more favorable loan terms to our developers. The guarantees are backed by AIG's multi-billion dollar net worth and investment-grade ratings.
·  Making special third-party permanent loan programs available to our developers, which provide better than "market" terms and rates due to the lower risk profile resulting from our credit enhancement.

Developers who work with SunAmerica seldom fail to complete projects that have been allocated tax credits due to economic pressures or financing difficulties. Consequently, state-allocating agencies can enjoy greater certainty that these projects will be placed in service and will be financially viable for the entire 15-year compliance period. SunAmerica's equity commitment and financial strength have made good, sound developments happen that otherwise may have failed because of the slow timing or unavailability of other financial sources.

As part of its affordable housing program, SunAmerica resells portions of its portfolio to other corporations who receive returns on their investment backed by certain guarantees from SunAmerica and American International Group, Inc. (AIG). SunAmerica transfers a portion of its ownership interest in its tax credit properties to newly created investment partnerships in which other corporations may invest as limited partners. SunAmerica and AIG then "credit-enhances" these investments to its investors by providing operating deficit guarantees, construction completion guarantees and after-tax yield guarantees. Since this resale program began in early 1991, corporations have made equity investments in excess of $5.5 billion in SunAmerica's guaranteed affordable housing program.

AIG is the world's leading international insurance and financial services organization, with operations in approximately 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property casualty and life insurance networks of any insurer. In the United States, AIG companies are the largest underwriters of commercial and industrial insurance. AIG's global businesses also include financial services, retirement services and asset management. AIG is one of the highest capitalized companies in insurance and any industry.

Since 1993, SunAmerica has engaged JP Morgan (f/k/a/ Banc One Capital Corporation) as its exclusive agent and advisor to arrange the sale of limited partnership interests to qualified corporate investors.

Interested in learning how this SunAmerica program works?

For more information, contact James N. Eligator, Managing Director at (312) 732-8738 or James.Eligator@JPMorgan.com.