This project was developed by the current owner, Winton Woods Associates AWLP (Shelter Resources Inc. + Limited Partners) back
in 1988. The project was originally financed under a federal affordable housing program which promoted affordable housing in more
rural markets of which the community of Poulsbo qualified - the Rural Development 515 Housing Program. This program gave certain
benefits to the sponsor-owner in exchange for making affordable rents available to low to moderate income tenants. You will note that
the program approved “basic rents” now charged by the owner are considerably below what could be charged for these units in the
open marketplace. The owner has applied to the Federal Mortgagee for the right to prepay this federal loan and convert the project to
“market rate” apartments and approval for this change in status has been issued. This now allows the project, after paying off the
existing balance of the USDA 515 program loan ($1,217,491 as of EOM Sept 2018), to charge whatever market rents the owners deem
appropriate and rent to whomever they believe meets their rental criteria pursuant to Federal and Local Housing Laws.
Unit Mix & Projected Market Rents (per survey):
10 one bdrm one bath units @ 650 sq ft - Current Federal program rent @ $660/mo. + elec. Utility. Current Market Rent on
comparable units @ $ 1230/mo.
27 two bdrm one bath units @ 905 sq ft - Current Federal program rent @ $718/mo + elec. Utility. Current Market Rent on
comparable units @ $ 1295/mo.
2 Three bdrm two bath units @ 1075 sq ft - Current Federal Program rent @ $785/mo + elec. Utility. Current Market Rent on
comparable units @ $ 1815/mo.
39 Total Units in 7 buildings
Phase 1 and Phase 2 to be Sold as a “Package”:
While Winton Woods 1 and Winton Woods 2 are owned by separate and distinct Limited Partnership entities, ownership’s current
position is that the two complexes be sold together and the physical plants are best operated in conjunction with one another.
Landscaping and maintenance are currently shared expenses, the management office is physically located on the Winton Woods 2 side
of the project ( actually services tenancy in both of the phases) and the access drive Winton Lane, accesses both complexes via
separate driveways. This also enables Purchasers to accumulate a greater number of units and affect certain economies of scale in
project operations. While accounting functions will need to be collected and reported independently due to the Phase 2 Regulatory
obligations under the tax credit program, project operations are best addressed both physically and economically with common
ownership. At this time we will not be accepting offers for anything but both properties simultaneously. We will work with the
Purchaser to obtain the necessary approvals for ownership transfer from any Regulatory Agencies that have oversight authority.
Project Operating Expenses (Historical):
The project has experienced annual operating expenses of $216,459/year in 2015, $220,224/year in 2016, $219,102/year in 2017 or an
average of $5,605 per unit per year. You will note that the anticipated operating expenses going forward after purchase (2018) are
projected in our attached financial pro forma at approx.. $5,191 per unit per year or $202,460 annually. The slight reduction is due to the
conversion out of the Federal loan program - we expect that maintenance payroll will be reduced to reflect market rate experience,
there will be no federal CPA audit to expense, and the Replacement Reserve deposit set aside required by a conventional lender is
Property Physical Condition:
This property has been maintained in accordance with Federal requirements and annually inspected for program compliance. Three of
the 10 buildings have roofs that are approximately seven years old. The other seven buildings received new roofing in 2007. The
physical plant was regularly scheduled for typical repairs and maintenance - pressure washing of the siding, roof repairs, tree trimming,
parking lot seal coating, trim painting, and other necessary improvements. This purchase as dictated by the Purchase and Sale
Agreement will be an “As Is” sale wherein the Purchaser has full rights to inspect the subject property during the designated
“Feasibility Period”, but no re-trading on the purchase price is anticipated.
Address: 20043 Winton Lane NW, Poulsbo, Wash.
The project property is a beautifully treed lot with a slight slope from West to East. Large Evergreen trees provide some shade &
privacy to the property and enhance the setting for the project. Adjacent to the North is the second phase of this residential community,
Winton Woods 2, another family type community with 43 rental apartments. The subject shares an office with Phase 2 which is situated
on the Winton Woods 2 site, with reasonably ready access from all dwelling units. Commercial uses are located to the East and south of
the subject, including a full scale movie theatre ½ block south. Major shopping conveniences and schools are very close by within a 5
minute drive, as is downtown Poulsbo.
Federal Program (USDA) - Existing Tenant Protection:
When a property such as Winton Woods 1 gains approval to exit the Federal mortgage program (USDA 515 loan program) it is issued
approval with the understanding that the owners will honor the leases of the existing tenants (rents paid by said tenants cannot be
increased during the term of the lease remaining). Also, if the owner (or in this case a “new Buyer”) choses, the current low to
moderate-income tenants can be offered “Federal Renter Vouchers” to supplement their ability to pay for rent. The availability of
vouchers enables the project to stay full and not be immediately vacated by lower income tenants unable to pay their monthly rent. It
also provides those same tenants an ability to affect a reasonable transition to a more affordable housing alternative. Assuming the
purchaser elects to accept Federal Renter Vouchers, the project will be assigned a USDA determined market rate standard (approved
market rent) for each bedroom type and the tenant will continue paying what they were paying for rent prior to the “sale of the project”
until their lease expiration. USDA will pay the difference between the tenant contribution and the approved market rent. The subsidy
will generally be available to tenants who opt to take it for the duration of their stay at the property. As rental rates go up in the future
the tenant will need to decide whether they can pay the extra new rate, as their voucher allowance will not go up. The purchaser needs
to be aware that there may be some project rental income difference for the project between the rents set by the USDA “market rate
standard” and what they may believe the potential rents could be. The voucher program will need to be discussed with the broker,
current owners, and may affect the underwriting for new financing desired by the purchaser to finance the purchase transaction.
All federal rental assistance subsidy now enjoyed by tenants enabling their low rent payments will be canceled once the existing USDA
515 program debt is paid off by the Purchaser via the sale closing - except those opting to sign up for the above referenced voucher
program. Please see the Purchase and Sale Agreement Addendum that will be a required attachment to the Purchase Agreement
between Seller and Purchaser.