Community Housing Development

“The form 990 is approved by the board of directors prior to filing.”

“The board of directors annually sign a conflict of interest statement.”

“A comparability study is performed and then the salaries are reviewed and approved by the board of directors.”

“Available upon request at trellis co.'s office.”

“The process has not changed from the prior year.”

“Chdc redeemers llc, a tax-exempt controlled entity, which is the managing general partner of chdc redeemers, hereby elects, pursuant to irc section 168(h)(6)(f)(ii), not to be treated as a tax-exempt entity under the rules of section 168(h)(6)(f) beginning with the tax year ending december 31, 2023. Any gain recognized on the disposition by trellis co., the controlling tax-exempt entity, of its interest in chdc redeemers llc or any dividend or interest received by trellis co. From chdc redeemers llc related to this investment will be treated as unrelated business taxable income for purposes of section 511. Accordingly, the residential rental property owned by chdc redeemers will not be considered tax-exempt use property under section 168(h).”

“Chdc redeemers llc, a minnesota nonprofit limited liability company ("chdc redeemers"), owned real property and improvements located at 313 dale street north, saint paul, minnesota (the "property"). Chdc redeemers financed its acquisition and ownership of the real property through, in part, (i) a loan from the united states department of housing and urban development ("hud"), pursuant to the federal flexible subsidy fund program, which loan had an outstanding principal amount as of january 18, 2023 of $2,071,497.00 and (ii) a loan from minnesota housing finance agency, a public body corporate and politic of the state of minnesota ("mhfa"), pursuant to the housing trust fund long-term homelessness program, which loan had an outstanding principal amount as of january 18, 2023 of $598,568.00 (collectively, the original unmodified debt instruments"). Trellis co., a minnesota nonprofit corporation ("trellis and, collectively with chdc redeemers, the "seller"), is the sole member of chdc redeemers. Chdc redeemers has not elected to be taxed as a corporation for income tax purposes. As such, chdc redeemers is disregarded for income tax purposes as an entity that is separate from trellis, and trellis was treated as owning the property, and as having been the borrower of the original unmodified debt instruments and the seller of the property to the buyer, for income tax purposes. On january 18, 2023, the seller assigned to dale street limited partnership, a minnesota limited partnership (the "buyer"), all of the seller's rights under the original unmodified debt instruments, and the buyer accepted the assignment from the seller of all of the seller's rights under the original unmodified debt instruments and assumed all of the seller's obligations under the original unmodified debt instruments, in connection with, and as partial consideration for, the seller's sale to the buyer, and the buyer's purchase from the seller, of the property. Concurrently with the assignment to, the acceptance by, and the assumption by the buyer of all of the seller's rights and obligations under the original unmodified debt instruments, the buyer and each of hud and mhfa, respectively, modified the terms of the respective original unmodified debt instruments. The seller knew about the modifications of the original unmodified debt instruments. Pursuant to treas. Reg. 1.1274-5(b)(2), the seller and the buyer jointly elect to treat the above transactions as ones in which the buyer first assumed the original unmodified debt instruments and then subsequently modified the original unmodified debt instruments and, as such, to treat the modifications of the original unmodified debt instruments as separate transactions that took place immediately after the sale and the purchase of the property. Each of the seller and the buyer will report for income tax purposes the sale and the purchase of the property and the modifications of the original unmodified debt instruments consistently with the preceding paragraph. Each of the seller and the buyer will attach a copy of this signed election to its federal income tax return for its taxable year in which the sale and the purchase of the property occurred and will file timely such federal income tax return.”