Neighborhood Finance Corporation

“Neighborhood finance corporation's officers, directors and finance/audit committee receive the form 990 before the final version is submitted to the irs. Neighborhood finance corporation's management kept the officers, directors and finance/audit committee informed throughout the process by having our independent third party tax advisory firm update the officers, directors, finance/audit committee, and/or management of the changes to the form 990 as they became final. This allowed all those involved in the review process time to understand the expectations the form 990 would require of them. After management worked with our independent third party tax advisory firm to complete the final draft of the form 990, the final draft was mailed to each director, officer and finance/audit committee prior to the july 31, 2014 board of directors meeting. This allowed the officers, directors and finance/audit committee adequate time to read through the draft and come to the board of directors meeting with an understanding of what is being filed. The independent third party tax advisory firm and management attended the july 31, 2014, board of directors meeting to discuss the form 990 and answer questions. The result of this discussion was approval to submit the form 990 to irs. This discussion was documented in the minutes of the july 31, 2014, board of directors meeting.”

“Neighborhood finance corporation officers, directors, or trustees, and key employees are required to complete our conflict of interest statement annually. All of these statements are received by and maintained by the neighborhood finance corporation's vice president finance and administration. The executive director is usually made aware of the board of directors members' affiliations and potential conflicts. Moreover, as issues are discussed throughout the year, our board of directors members voluntarily recuse themselves from voting on issues that may pose a conflict of interest.”

“Neighborhood finance corporation engaged verisight, inc, an independent third party firm, to complete a key executive and all non-key executive compensation market analysis in july 2011. The key executives in this study were the neighborhood finance corporation's executive director, vice president loans, and vice president finance & administration. Neighborhood finance corporation provided the requested information for the analysis while the executive committee of the neighborhood finance corporation board of directors were the overseers of the process. Verisight's point of contact for this study was the neighborhood finance corporation executive committee. The completed market analysis was reviewed and approved by the executive committee as reasonable, accurate and complete. The report outcomes were discussed in a closed session of the 2011 september executive committee meeting and the september board of directors meeting without the key executives present at either session. The report was finalized in the september 2011 board of directors meeting. This report is now used as the key executive compensation benchmark for comparison with future key executive compensation changes. Note each year the executive committee of the board of directors is responsible for approving all management compensation levels, including the key executives. No change to management compensation is made without executive committee approval. The level of increase for employee pay rates is determined by the nfc budget, which is approved by the board. The reasonableness of the rate increases is obtained after an informal discussion with verisight, inc. Actual increases are performance based within the budgeted amount. All exceptions are approved by the board. Documentation of this process is maintained in the executive committee meeting minutes. The next formal study is currently in process for 2014.”

“Neighborhood finance corporation makes its governing documents, conflict of interest policy, and financial statements (audited or unaudited) available to the general public upon request and at the discretion of neighborhood finance corporation.”

“Determination of volunteer estimate: board of directors=15;residential loan committee members=5;commercial loan committee members=2; real estate development committee members=3. Note that certain volunteers are on more than one committee. These volunteers are only counted once.”

“The organization receives audited gaap financial statements on an annual basis from independent auditors. The financial statement includes nfc properties llc which is a disregarded entity for tax purposes and is included in the form 990.”

“Savings and temporary cash investments: as of december 31, 2013, approximately $1 million of the investments had been committed, through nfc board voting actions, to fund forgivable loans and loan loss reserves related to specific loan participation offerings subsequent to year end. The majority of the remaining funds are restricted for similar purposes per an external agreement that neighborhood finance corporation has with the city of des moines and polk county.”