Exhibit H-1 to Subpart C of Part 1930 - Example of Interest Credit Determination for Rural Rental Housing or Rural Cooperative Housing Projects (Plan II)

$260,000 loan—approved during 1987 fiscal year project contains four 1-bedroom units (600 sq. ft. each) and four 2-bedroom units (700 sq. ft. each) total floor area = 5200 sq. ft.

Budget for note rate rent**aBudget for basic rent**Operating, maintenance, vacancy and contingency allowance, reserve and return to investor, if applicable: $10,560Operating, maintenance, vacancy and contingency allowance, reserve and return to investor, if applicable: $10,560Loan repayment at 91/2% interest: $260M × $95.88 b $24,929Loan repayment at 1% interest: $260M × $25.44 b $6,615Total annual cost $35,489Total annual cost $17,175$35,489 ÷ 12 = $2958* cost/month$17,175 ÷ 12= $1432* cost/monthOne bedroom rent: 600/5200 = .1154 × 2958 = 341.35One bedroom rent: 600/5200 = .1154 × 1432 = 165.25Two bedroom rent: 700/5200 = .1346 × 2958 = 398.15Two bedroom rent: 700/5200 = .1346 × 1432 = 192.75(341.35 × 4) + (398.15 × 4) = $2,958 monthly income(165.25 × 4) + (192.75 × 4) = $1432 monthly income$35,489 ÷ 12 = $2958* cost/mo.$17,175 ÷ 12 = $1432* cost/mo.a One budget form reflecting two rent levels must be prepared; one level for the note rate rent and another level for the basic rent. (The expense items in the budgets shown in this illustration are only for illustration purposes and are not itemized.)b Annual amount using monthly amortization factor for 50 years. If the regular installment on the note was amortized using a factor for less than 50 years, substitute the appropriate factor for a corresponding number of years.* Rounded to the nearest dollar.** In cooperatives, the term “rent” shall mean “occupancy charge.”