Exhibit A-8 to Subpart E of Part 1944 - Outline of Professional Market Study

Market studies which do not address all segments of this outline will not be considered acceptable and may adversely affect the processing of pre-applications. Preapplications with unacceptable market studies may be returned, deferred, or rejected, as determined appropriate by the servicing office.

The following information is to be used by analysts in the preparation of market studies for the Section 515 housing program. It generally contains the type and depth of information which Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 requires for evaluating the feasibility of prospective housing developments. The analyst will be expected to provide sufficient quantitative data (such as census tables), primary data (such as survey of existing comparables), and qualitative data (such as local contacts in the community) to support the conclusions reached. The analyst may present any other discussions and/or data which will help support the complete analysis of the market.

The outline provides for the demonstration of historical trends and allows the analyst to project into the 2 years beyond the last actual year of record. Additional guidance is offered in individual segments of the outline. You will need to provide a statement of your experience and why you think you are qualified to prepare such a study.

Determination of need and demand will be derived for prospective rental tenants only from: (1) Persons migrating into the area, (2) persons dwelling in family units who desire to move into their own units (elderly living with family members will only be considered if evidence of their interest in moving into the project is furnished with the market study), (3) conservative estimate (not to exceed 20 percent) of households living in substandard rental housing, (4) demolition of rental stock, (5) allowance for a 5 percent vacancy rate, and (6) conservative estimate (not to exceed 20 percent) of households experiencing rent overburden provided the analyst has made a determination there are sufficient households in the market area to occupy any rental units vacated by those lower income persons who choose to move into the proposed project from the existing units. Substandard is defined as (1) Units lacking complete plumbing and (2) overcrowded (1.01 or more persons per room).

For proposed congregate projects, the analyst will be responsible for researching the current need for, and usage of, services in the market area. The types of services being used, the provider of the services, and their location will be included.

Homeowners will not be included in the determination of need and demand for rental units. The analyst will discuss the current market for single family houses and how sales, or the lack of, will affect the demand for elderly rental units. If the economic conditions reflect a trend toward normal selling times for houses in the market area, then the discussion should point to how elderly homeowners may reinforce the need, but only as a secondary market and not as the primary market.

A statement, with signature, certifying that the analyst (including an individual under contract to the analyst's company) actually traveled to and physically surveyed the community where the proposed project will be located is also required.

I. Market Area—General

The market area will be the community where the project will be located and only those outlying rural areas which will be impacted by the project (excluding all other established communities). Except in specific cases of congregate housing projects where an expanded market may be justified, the market area will not include the entire county (or parish, township, or other subdivision). Any deviation from this definition must be coordinated with the servicing office. The market area must be realistic. The criteria for selection should be described by the analyst. A map showing the market area will be required. The following is an example of a market area description:

A. Based on an analysis of population and housing development patterns, major employers and commuting patterns, the effective market area for the subject proposal is defined to include all of (Name), 35 percent of (Name) and 25 percent of (Name) census divisions. This area is shown on Map 2 following Table 4 (page 11) in Section II of this report. In 1980, this geographic market area contained an estimated 6,350 persons (6.1 percent of the county total of 103,829 persons). During the 1970's decade, the overall market area experienced growth of 1,253 persons (representing 13.5 percent of total gains in the county). In 1990, the (Name) market area population of 7,603 represented 6.7 percent of the county population of 113,086. (See Table 4 and Map 2 in Section II for details.)

B. The effective market area for the subject proposal includes the town of (Name) and a portion of the unincorporated areas to the east and south. The (Name) River forms a natural barrier restricting development to the west. Housing development and population growth have occurred along major transportation corridors, particularly Interstate 81 and U.S. 11 between (Name) and (Name). Secondary growth has occurred along State Roads 63 and 68 to the northwest and southeast of (Name). The Interstate Industrial Park, with 16 employers providing 999 jobs, is centrally located within the market area.

II. Site

This section will contain a full description of the site, its position in the community and location with respect to residential support services.

A. The proposed site is located in the eastern section of (Town) on (Major Thoroughfare). The area surrounding the site is predominantly comprised of modest single family dwellings. The terrain is gently sloped, with grass, oak trees, and some shrubs.

B. The site is currently zoned for commercial business and is currently owned by a local car dealer.

C. The site is approximately .3 mile east of the heart of town which contains a grocery store, drugstore, restaurants, banking facilities, the post office, and town hall. Other shopping is available .2 mile south at (Town) Plaza.

D. The medical clinic, which provides services of an osteopath, X-ray technician, a physician's assistant, and a nurse, is approximately .8 mile north of this site. This clinic is open daily and also provides 24-hour emergency service. The nearest hospitals are (Large Town) and (Town).

E. All public services are available at the site.

F. Photographs of the site are required.

G. Communities suitable for multi-family projects may have certain smaller businesses necessary for the day-to-day living convenience of the tenants and to supplement the employment base. For example, these may include, but not be limited to, pharmacy, restaurants and fast food establishments, grocery and department stores, hardware and sundries, etc. A representative number of these businesses are to be listed (by name) and location with respect to the proposed site.

Name of business and street address III. Demographic Characteristics

A. Economic profile.

1. Labor force and employment trends between 1980 and the present year. This will provide current year estimates and projected changes at the county level.

Civilian Labor Force and Employment Trends and Forecasts, _______ County, 1980-19__

199019_119_Civilian Labor Force 2UnemploymentRate of UnemploymentEmploymentChange in Total Employment Number Percent TotalAnnualTotalAnnual1980-19901990-19_19_-19_ (2-year projection)1 Preliminary—based on monthly data through _____.2 Data based on place of residence. Source

2. Employment data. In order to determine how employment affects the market area, it will be necessary to show the number of employed persons for a 3-year period up to the current year, the increase and/or decrease and the percentage of unemployed at the county level. The employment figures can be obtained from the State Employment Commission.

Example County YearNumberChangeUnemployment %19_19_19_19_ (through current year) Source

3. Major employers. This section will contain information pertinent to an analysis of the economic stability of the town. The major employers within the town and market area, the product or service offered by each employer, location of employer, and year each employer was established are types of data FmHA or its successor agency under Public Law 103-354 will need to evaluate. It is also important to know if the larger employers intend to increase or decrease number of employees in the immediate future or if there have been any significant recent changes in number of employees.

Example EmployerProduct/ServiceLocationYear EstablishedWashington Aircraft Crop DustingTown1957

In addition, the study will include the number of employees and average weekly salary listed in the place of work employment data for the classification groups of manufacturing; construction; trade; services; transportation, communications, and utilities (TCU); finance, insurance, and real estate (FIRE); and government.

4. Employment outside of county. The analyst will give the percentage of persons employed inside the county and driving times, if appropriate.

Source

B. Demographic profile.

1. Population. The analyst will need to show population changes between 1980 and 1990, the reasons for the changes, the current year estimate and projected change. This information will be provided for the town, the market area, and the county. Any change in the County subdivisions (CCD, Township, Election District, etc.) between census years will have to be explained. These are to be shown in numeric characters as well as percentages.

Example YearTotalNo.Change%AnnualChange%1980199019_ (current estimate)Projected: 19_ (2 years)

2. Age characteristics.

AgeTown, 1980-199019801990ChangeCounty, 1980-199019801990ChangeUnder 1819-3435-5455-6162-7475-8485+

3. Households. A breakdown by town, market area, and county for last 2 census years, a current year estimate and a projection to the year the housing would be built (24 months) will have to be illustrated so that household formations can be tracked. This data will tell us what portion of a housing demand is being created by an increase in numbers of new households.

Year*In groupPopulationQuartersHouseholdsPersons per household1980199019_Projected: 19_ (2 years)

4. Households by Size/Type/Age of Members (elderly and congregate projects).

MarketTownAreaCountyHouseholds with:1 or more age 60 years and over1 person household2 or more persons (family)2 or more persons (nonfamily)1 or more age 65 and over1 person household2 or more persons (family)2 or more persons (nonfamily)

5. Household type and relationship—Persons 65+ (elderly and congregate projects).

MarketTownAreaCountyTotalIn HouseholdsIn Family HouseholdsHouseholderSpouseOther RelativesNonrelativesIn Nonfamily HouseholdsMale HouseholderLiving AloneNot Living AloneFemale HouseholderLiving AloneNot Living AloneNonrelativesIn Group QuartersInstitution (persons)Other Persons in Group Quarters

6. Households by tenure. This section is one of the more important aspects of the market analysis. This information will enable FmHA or its successor agency under Public Law 103-354 to more closely pinpoint the number of households which would comprise the target group of its evaluation. If the projected percentage of renters exceeds the historic percentage of renters, the analyst will have to explain why there is an increase. The information will be provided for town, market area, and county.

Example YearTotal householdsOwnerPercentRenterPercent19801990Estimate: 19 _Projected: 19 _ (2 years)

7. Households by size. The study will provide number of households by household size for the town, market area, and county.

8. Tenure by age. Tenure by age of householder for town, market area, and county (elderly and congregate projects).

OwnerRenterTotal55-6465-7475 years +

9. Households by income group. With the advent of Low Income Housing Tax Credits (LIHTC), we have found that more emphasis must be placed on analyzing persons whose incomes qualify for LIHTC. This means families who earn 60 percent or less of the median income as established by the U. S. Department of Housing and Urban Development (HUD). Therefore, feasibility for projects expecting to receive tax credits will also be based on the incomes required to support the tax credits. This could mean a level of incomes either slightly lower or higher than FmHA or its successor agency under Public Law 103-354 very low-incomes. For those tax credit units occupied by low-income families, the monthly gross rent cannot exceed 30 percent of the family income. Gross rent includes utilities, but excludes payments of rental assistance by Federal, State, and local entities. The applicant will be responsible for notifying FmHA or its successor agency under Public Law 103-354 and the market analyst of the amount of tax credits being requested, the income percentage on which the credits will be based, and the percentage of project units targeted for tax credit eligible persons. In those cases where less than 100 percent of the units will be designated for tax credit eligible persons, the incomes needed to support the non-LIHTC units will need to be analyzed. Income data will be shown for total and renter households. This information will be presented as follows: (It is recommended that decile distribution of incomes be obtained from HUD. Other sources are acceptable and must be identified.)

Incomes Needed to Support Proposed Rents + Utilities (without LIHTC): 1-Bedroom2-Bedroom3-Bedroom4-Bedroom$___$___$___$___ Number of Tax Credit Units Requested for Project: Percentage of Units to be Designated for Tax Credit Eligible Persons: _____________ Tax Credit Eligible Incomes: (based on 50% [] or 60% [] of income) $___$___$___$___ Tax Credit Eligible Rents: $___$___$___$___ Proposed Project Rents: $___$___$___$___ Town or Market Area Household income groupsAll householdsNumberPercentRenter householdsNumberPercentLess than $000$000-$000$000-$000$000-$000$000-$000TotalMedianElderly Household Income Groups:Less than $$000-$000$000-$000$000-$000$000-$000Total

Incomes of those eligible to live in the proposed project, considering tax credits and availability of rental assistance (RA):

$000-$000 $000-$000 Source County Household income groupsAll householdsNumberPercentRenter householdsNumberPercentLess than $000$000-$000$000-$000$000-$000$000-$000TotalMedianElderly Household Income Groups:Less than $$000-$000$000-$000$000-$000$000-$000Total

Incomes of those eligible to live in the proposed project, considering tax credits and availability of RA:

$000-$000 $000-$000 Source C. Housing supply profile

1. Building permits issued for the last 10 years. The Housing Units Authorized by Building Permits and Public Contracts (C-40 Construction Report), furnished by the Bureau of the Census, provides a list of permits issued in all reporting jurisdictions. This publication is printed monthly and annually. If available, the number of units which have been demolished over the last 5 years will be needed.

Example YearTownSingle familyMultifamilyDemol.CountySingle familyMultiFamilyDemol.19___19___19___19___Through current year

2. Housing stock. The study must include the number of units within the town and county (where available), both single family and multi-family, the number of mobile homes by tenure, along with the number of substandard units by tenure, based on the most recent census data. Occasionally, a situation will exist within a community where a number of detached single family homes are standing vacant. How this condition may affect the rental market must be evaluated and discussed.

Example Inventory Change Profile Single familyMultifamilyMobile homeOwnRent1980 Stock1990 Stock AnnualPercentChange in Number of Units

3. Existing rental housing. The analyst must determine where the proposed project will fit into the present housing stock. To accomplish this, the analyst will survey the existing units and will discuss how they (a) would be comparable with the proposed project in overall appeal; (b) are less than desirable because of the age factor or upkeep; (c) are inconveniently located; (d) do not provide the appropriate bedroom mix for the community need, etc.

4. Details of existing stock.

a. Additional narrative which describes the rental stock and provides tenant characteristics may be included. The survey will include both subsidized and nonsubsidized rentals. In those communities containing too many rental properties to list, all subsidized and a representative number of conventional projects will be included. Those conventional projects which have rent levels comparable to the proposed project will be listed. Because elderly persons may reside in family designated projects, the analyst will need to list all existing units and not just the existing elderly units. Photographs of the comparables are required.

b. The analyst will explore the availability of individual Section 8 certificates with the local housing authority since they can be used on any project to bring the existing rents into an affordable range. For instance, 10 to 15 available Section 8 certificates in a community could have an influence on the determination for new units and the number should be reduced to correspond to this availability. However, before automatically reducing the number of proposed units to match the number of available Section 8 units, the reason the certificates are available must be explored, (e.g., owners of non-Government subsidized units will not accept the certificates). (The bedroom sizes which the certificates cover must match the prospective bedroom sizes in the proposed project bedroom mix.)

c. The information needed in the survey must include the characteristics shown below. In conjunction with the survey, the analyst is expected to discuss the reasons for extended vacancies, either in individual developments or in the community in general. The data needed are:

Name of Project No. of Units Bedroom Mix Amenities: (if available) Drapes Carpet Type (i.e., family, elderly) Year Built Rent levels Vacancies Location Central Cooling Dishwasher Garbage Disposal TV Cable IV. Housing Demand Forecasts

The analyst must give a projection of the housing needs for a specified forecast period. The information should include the following as a minimum:

Sources of demandTown renterMarket area renterNew Households (from the most recent census year plus 2-year projection)________.20 of Households in Substandard Rental Units+____+____Plus Demolition of Rental Stock+____+____.20 of Households Experiencing Rent Overburden+____+____Plus Vacancy (.05 of New Household Growth)+____+____Total demand________Number of Total Demand Determined Income Eligible (tax credit eligible, if applicable)________Less Number of Units in Planning Stage (FmHA/HUD)−____−____Net Demand________

If a penetration percentage is used in the study analysis, explain how that particular percentage was chosen.

Recommended Number by UnitSizeOneTwoThreeFour____________

Names and positions of individuals in the community who provided information for the study:

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