USDA Section 538 Feasibility Study Case Study: A 60-Unit Family Apartment Community on Kent Road in Tifton, Georgia, Not Feasible as a Market-Rate Section 538 Loan at 90 Percent of Cost and Feasible as Restructured with 4 Percent Housing Credits

A 60-unit garden walk-up family apartment community proposed on a 6.33-acre tract at 0 Kent Road in Tifton, Tift County, Georgia, listed at $610,500 with public water and sewer available, about 1,040 feet of road frontage and a stated R-P zoning district, under half a mile from the Southwell regional medical campus and the county high school, in a non-metropolitan county seat of about 17,600 residents whose Section 538 rent ceilings at 115 percent of a $74,700 median income sit 65 to 99 percent above the county's fair market rents. The sponsor proposed a market-rate community within the 115 percent income limits financed with a Section 538 guaranteed loan at 90 percent of a $13,165,000 total development cost. At the study's market rents of $1,025 to $1,425, the 60 units produce about $490,000 of cash flow after reserve in Year 2 against $895,000 of debt service, a coverage of 0.55x, and the program's own 90 percent loan-to-value limit on a $7,260,000 market-rent value would cap the loan at $6,534,000, at which the coverage is 0.99x against the 1.15x floor. Restructured as a 4 percent housing credit community with tax-exempt bonds, a $3,072,000 Section 538 guaranteed permanent loan sized to Georgia DCA's 1.20x floor at 60 percent rents, $3,737,000 of federal credit equity, $2,569,000 of Georgia state credit equity, a $682,500 deferred developer fee and a $2,857,000 soft gap source, the community covers at 1.20x in Year 2, 1.21x in Year 3, 1.22x in Year 4 and 1.23x in Year 5 and holds at or above 1.20x through Year 15. Determination: not feasible as proposed; feasible as restructured, conditioned on the USDA multifamily eligibility map result for the parcel, a City of Tifton zoning verification letter placing the tract in R-P with apartments permitted, the utility department's capacity commitment, a committed soft source of not less than $2,857,000, a DCA-approved market analyst's study clearing the 10 percent rent differential and the 35 percent capture tests, and a 2027 DCA 4 percent round award.

Model study prepared by MMCG Invest | Michal Mohelsky, J.D., FMVA | October 3, 2026

MMCG concludes that the proposed 60-unit family apartment community on Kent Road in Tifton, Georgia is not feasible as a market-rate Section 538 loan at 90 percent of cost and is feasible as restructured with 4 percent housing credits. The site and the program eligibility are sound. The tract is flat, utility-served and the right size for 60 garden units at 9.5 units per acre, it sits within walking distance of the region's hospital campus and the county high school, the city's own 2026 planning record ties its stated R-P district to apartments, and Tift County is a non-metropolitan county whose seat held 17,045 residents at the 2020 Census, inside the Section 538 rural definition subject to the eligibility map. The proposal fails on the rent. The Section 538 rent ceilings at 30 percent of 115 percent of area median income, about $1,610 for a one-bedroom, $1,932 for a two-bedroom and $2,233 for a three-bedroom, sit 65 to 99 percent above the county's fiscal 2026 fair market rents of $821, $973 and $1,174, and the sponsor's pro forma used that headroom. The market does not. The study's achievable market rents for a new garden community in Tifton, $1,025, $1,225 and $1,425, carried as an MMCG assumption pending the market-rate rent census, produce $508,000 of net operating income in Year 2, a 3.9 percent yield on a $13,165,000 cost, and about $490,000 of cash flow after reserve against $895,000 of debt service on an $11,849,000 loan at 6.75 percent over 40 years with the annual guarantee fee, a coverage of 0.55x. The program's own 90 percent loan-to-value limit would never permit that loan: at a 7.0 percent capitalization rate the market-rent value is about $7,260,000 and the maximum loan $6,534,000, at which the coverage is 0.99x against the 1.15x floor and the sponsor's equity rises from $1,316,000 to $6,631,000 for a 3.9 percent yield. Neither structure is one a Section 538 lender can certify.

Restructured as a 4 percent housing credit community under Georgia DCA's 2027 4 percent round, with 60 units at 60 percent of area median income, tax-exempt bonds sized to the 25 percent test and redeemed at conversion, a $3,072,000 Section 538 guaranteed permanent loan sized to DCA's 1.20x coverage floor, $3,737,000 of federal credit equity at $0.80, $2,569,000 of Georgia state credit equity at $0.55, a $682,500 deferred developer fee and a $2,857,000 soft gap source, the same 60 units on net rents of $745, $890 and $1,030 cover at 1.20x in Year 2, 1.21x in Year 3, 1.22x in Year 4 and 1.23x in Year 5, and hold at or above 1.20x in every year through Year 15, which is the test DCA applies. The restructured credit is one a Section 538 lender and a DCA underwriter can approve: the loan is 23.8 percent of cost and about 70 percent of the restricted-rent value, the operating deficit reserve carries the lease-up year, the 60 percent rents sit $335 to $395 below the study's market rents and so clear DCA's 10 percent differential test with room, and the program's 115 percent income limit, its rent ceilings and its 15 percent vacancy test are all met inside the DCA structure. The determination is conditioned on the USDA multifamily eligibility map result for the parcel, which also decides DCA's Rural Pool; on a City of Tifton zoning verification letter placing the tract in R-P with apartments permitted and stating the density, height, setback and parking standards; on the Tifton-Tift County Utilities Department's written capacity commitment for 60 units; on a committed soft source of not less than $2,857,000; on a DCA-approved market analyst's study clearing the 10 percent rent differential and the 35 percent capture tests; and on a 2027 DCA 4 percent round award with a bond inducement resolution.

This is an MMCG model study: a complete feasibility analysis performed on a real, publicly marketed parcel using public data, prepared to show Section 538 lenders, Rural Development state offices, tax credit syndicators and rural developers how MMCG tests a family apartment community against the market's rent, the state agency's underwriting rules and the program before a lender commitment is sought. It is not a client engagement. MMCG has no relationship with the landowner, the listing brokers, the City of Tifton, Georgia DCA, USDA Rural Development or any prospective developer, and the analysis does not represent an offer, an appraisal or a recommendation to buy the parcel. Figures drawn from the listing, the City of Tifton's Land Development Code and fee schedule, the city's planning and zoning agenda, HUD's fiscal 2026 fair market rents and income limits, the published 2025 and 2026 county, city and school levies, Georgia DCA's 2026-2027 Qualified Allocation Plan, USDA's multifamily rental inventory and the Federal Register notices on the Section 538 fee structure are identified as such. Figures labeled MMCG assumption are underwriting inputs set by MMCG from industry benchmarks, including the October 1, 2026 rate deck, the Rider Levett Bucknall first-quarter 2026 cost ranges escalated to the third quarter, the national apartment operating expense survey and current Section 538 lender pricing. Items that could not be verified from a primary source at the study date are listed in the Conditions and Limitations section rather than estimated silently: in particular, the USDA eligibility map result, the R-P use and dimensional tables, the parcel's jurisdiction and assessor record, the 2026 county levy, the FEMA flood status, the market-rate apartment census, the ACS tenure and income tables, USDA's own Section 538 income limits and the competing tax credit properties' rents and occupancies. This study is the lender's feasibility study and the Section 538 market study in the HB-1-3565 Exhibit 3-8 order; it does not replace the market study that Georgia DCA requires from a DCA-approved analyst, which is a condition.

The Project will operate as a 60-unit garden walk-up family apartment community on the 6.33-acre tract at 0 Kent Road in Tifton, Tift County, Georgia, under a single-asset limited partnership that borrows the Section 538 guaranteed permanent loan, issues the tax-exempt bonds through the Tifton-Tift County Development Authority or the Georgia Housing and Finance Authority, admits the credit investor as the limited partner and holds the land, the buildings and the operating business. The physical program comprises three three-story walk-up buildings of 62,500 gross square feet with 60 units, 12 one-bedroom units of 650 square feet, 36 two-bedroom units of 950 square feet and 12 three-bedroom units of 1,150 square feet, for 55,800 net rentable square feet, with a 2,500 square foot clubhouse containing the leasing office, a community room, a fitness room, a computer lab and the maintenance shop, 110 surface parking spaces at 1.83 spaces per unit, a playground, a covered picnic area and a dog run, on a site plan that places the buildings on the Kent Road frontage with parking between and behind them and the stormwater pond at the rear. The unit mix meets DCA's family minimum of 10 percent one-bedroom units at 20 percent and its three-bedroom tiebreaker of 20 percent at 20 percent. All 60 units are set aside at 60 percent of area median income under the restructured program, with 5 percent of units mobility-accessible and 2 percent sensory-accessible under DCA's threshold, and the buildings are designed to the EarthCraft Multifamily or Enterprise Green Communities standard the QAP requires. The community will be managed by a third-party management agent with a DCA-approved compliance record, with a full-time community manager, a leasing consultant and a maintenance technician on site, for about 3 full-time equivalents. The sponsor contributes the development and 50 percent of the developer fee is deferred and paid from cash flow within 15 years, as the QAP permits.

Marketing and Sales Strategy

Pre-leasing begins six months before completion from a leasing trailer on the site and from the management agent's regional waiting lists, aimed at the three segments the trade area supplies: the hospital campus, whose 2,714 Southwell employees across the Tifton and Adel hospitals include the nursing, technical and support households whose incomes sit inside the 60 percent band and whose shifts favor a community within walking distance; the county's distribution, agricultural research and education employers, led by the Target distribution center's 800 jobs, the University of Georgia Tifton campus's 600 and the county school system; and the households on the Tifton Housing Authority's waiting lists and in the county's older tax credit inventory, three-quarters of which was placed in service before 2008. Outreach runs through the hospital's human resources office, the school system's benefits office, the housing authority and the churches and community organizations whose support letters DCA scores. Retention runs through the newest family product in the county, the clubhouse program, the in-unit washer and dryer connections and the compliance-managed rent, which rises with the income limits rather than the market.

Amenities

The parcel is a 6.329-acre tract at 0 Kent Road, Tifton, Georgia 31794, listed at $610,500, or $96,461 per acre, through MLS 10507650 with Keller Williams Georgia Communities, and as a 6.153-acre tract at $598,066, or $97,198 per acre, on the Southeast Realty and Pope Real Estate Company sites, which the study reads as the same land re-surveyed or split and which the plat must resolve. The listing states the zoning as RP, says the tract could be rezoned to Multi Family or CC and that RP, Multi Family and CC lie across the street, states that public water and sewer are available, describes the tract as flat with about 1,040 feet of road frontage that can be bought together or split, and places it under half a mile from the hospital, the doctors' offices and the high school; the Southwell medical offices are at 39 Kent Road. One listing data field shows "Water Front: Yes," which the study treats as a possible creek or pond frontage until the FEMA flood insurance rate map is checked. The tract's live status is not confirmed as of October 3, 2026: a broker page showed it active at four days on the market and one aggregator shows the 6.33-acre version as off-market, so the land contract is the first condition of the restructured program.

Tifton is the seat of Tift County in south-central Georgia on Interstate 75, about 180 miles south of Atlanta and 60 miles north of the Florida line, with 17,045 residents at the 2020 Census and 17,595 at the Census Bureau's 2025 estimate, in a county of 42,254. The county is not part of any metropolitan statistical area; HUD's fiscal 2026 fair market rent schedule lists Tift under Georgia's nonmetropolitan counties, and the city's population falls inside the 10,000 to 20,000 band that the Section 538 rural definition admits for places outside a metropolitan area, subject to the eligibility map. The county's economy is health care, distribution, agricultural research and education: Southwell, the health system built around Tift Regional Medical Center, employs 2,714 full- and part-time staff across its Tifton and Adel hospitals and supports about 5,800 jobs in Tift and Cook counties according to the Georgia Hospital Association data reported in September 2026; the Target distribution center, 1.5 million square feet, is the county's largest private employer at about 800 jobs; the University of Georgia's Tifton campus employs about 600; Abraham Baldwin Agricultural College and the county school system, which describes itself as the county's second-largest employer, complete the base. The county's unemployment rate was 3.1 percent in July 2026.

The site's three liabilities are its jurisdiction, because the listing pairs the city's R-P label with a county district name and the applicable ordinance is not settled until the zoning verification letter is issued; the pipeline, because a 460-unit planned development on the county's west side and a second multifamily rezoning on the city's south side were both in the public record in 2026; and the thin rent advantage of a 60 percent tax credit rent against a fair market rent that sits within 4 percent of it for a two-bedroom, which is the test the DCA market study must clear and which this study clears against the market-rate rent rather than the fair market rent.

The governing ordinance, if the tract lies inside the city limits as the R-P label indicates, is the City of Tifton Code of Ordinances, Appendix A, the Land Development Code. Chapter 2, Section 2.01.00, establishes the zoning districts; Chapter 8, Section 8.02.00, governs the Planning and Zoning Commission; and Chapter 11, Section 11.02.00, sets the residential design standards for multiple residences in one development. The listing's district is R-P, Residential-Professional. The city's Planning and Zoning Commission agenda for June 23, 2026 carried petition PP26-0008, by Stafford Kunes Investments for Map and Parcel 0046 001H on South Carpenter Road, to rezone from WLI to R-P "to allow for Multi-Family Apartments," which the study reads as the city's own confirmation that the R-P district accommodates apartments. The R-P use table, the density, height, setback and parking standards and the site plan review procedure are not confirmed from the code's Chapter 2 and are carried as a condition; the program's 9.5 units per acre, three stories and 1.83 spaces per unit are set at levels a Residential-Professional district in a south Georgia county seat would ordinarily admit and must be confirmed against the dimensional table. If the tract lies in unincorporated Tift County, the Greater Tift County zoning ordinance governs instead, and the study's levy calculation changes as set out below.

The entitlement path is a zoning verification letter from the city, which DCA requires to be dated within six months of the application and which the city's posted application form supports, followed by site plan review under Chapter 11 and a land disturbance permit. The city's fee schedule, updated July 2023, sets a rezoning application at $200, a conditional use permit at $200, a land disturbance permit at $40 per acre above one acre and land disturbance plan review at $250. No rezoning is assumed. The land contract should be contingent on the zoning verification letter, and the DCA application cannot be filed without it.

Water, sewer and natural gas are provided by the Tifton-Tift County Utilities Department, the combined city and county utility; the broker states that public water and sewer are available at the tract, and the department's written capacity commitment for 60 units, which DCA requires as a utility commitment letter without an annexation contingency, is a condition. The electric provider for the parcel, Georgia Power or an electric membership corporation, was not confirmed. The city's fee schedule sets water taps at $790 for a three-quarter-inch meter, $1,010 for a one-inch, $2,730 for a one-and-a-half-inch and $3,195 for a two-inch meter; sewer taps at $690 for a four-inch and $735 for a six-inch; gas meters at $980 to $2,770 by size; a basin-specific fee of $1,050 per lot; and a commercial building permit at 1 percent of project value above $10,000, about $87,000 on the building contract. The code's Section 62-372 authorizes an impact fee by resolution on an equivalent residential dwelling unit basis, and none appears on the fee schedule. The study carries $165,000 for taps, meters, the basin fee and service extensions, with the basin fee carried per unit rather than per lot as the conservative reading, and the building permit inside the architecture, engineering and permits line. Commercial water and sewer service on a two-inch meter inside the city is billed at $40.13 and $61.52 per month base plus $1.22 for water and $2.43 for sewer per 1,000 gallons.

Property tax is computed from the published levies at Georgia's 40 percent assessment ratio. The Tift County Board of Education adopted 11.777 mills for 2026 at its September 10, 2026 meeting, the rollback rate, down from 12.275 in 2025; the City of Tifton adopted 6.114 mills for 2026, down from 6.262; and the Tift County Board of Commissioners set 8.427 mills for 2025 by Resolution 2025-25 for the incorporated and unincorporated county, with a 1.116-mill Special Service Tax District whose boundary the resolution does not state, and the 2026 county rate was not found. The state levy is zero. Inside the city the combined rate is 26.318 mills, or $10.53 per $1,000 of market value; in the unincorporated county it would be 21.320 mills, or $8.53. Georgia law at O.C.G.A. Section 48-5-2 directs assessors to consider the rent restrictions on Section 42 properties in valuation, and DCA requires the tax estimate to be supported by the taxes paid by other tax credit properties in the same assessment area. The study carries a restricted-rent value of $4,500,000 (MMCG assumption), about $75,000 per unit, for a Year 1 tax of $47,400, and runs the full market valuation of $6,500,000, $68,400, as a sensitivity. The assessor's parcel identification, the current assessed value and the 2026 county levy are conditions.

The primary market area is Tift County, a single-county trade area centered on Tifton with the hospital campus, the Interstate 75 interchanges and the university and college campuses inside the city, and the secondary area the adjoining counties whose residents commute to the hospital and the distribution center. The county held about 15,600 households at the latest American Community Survey five-year estimate, with a median household income of $53,255 on the ACS and $57,048 on the Census Bureau's 2024 small-area estimate, a county population of 42,254 at the 2025 estimate and a July 2026 unemployment rate of 3.1 percent. HUD's fiscal 2026 median family income for the county is $74,700, effective May 1, 2026; the extremely low income limits run $16,200 for one person to $33,000 for four, with the two- to six-person figures reflecting HUD's poverty-guideline floor. MMCG's estimate of the 100 percent and 115 percent area median income by household size, built from the $74,700 four-person figure with HUD's standard family-size factors, runs $52,290 and $60,134 for one person, $59,760 and $68,724 for two, $67,230 and $77,315 for three, $74,700 and $85,905 for four and $80,676 and $92,777 for five; the 60 percent limits on the same basis run $31,374 for one person to $44,820 for four and $48,406 for five. USDA Rural Development's own published Section 538 limits govern and replace these estimates when the lender application is filed. The ACS tenure, income-by-tenure, rent burden and rent-by-bedroom tables, the 2010 to 2020 household change and the Census building permit series for the county are conditions; the demand analysis below is built from the county household count and MMCG's estimates of the renter share and the income distribution, and is identified as such.

The study's demand for 60 units at 60 percent of area median income is built from the income-qualified renter household pool rather than from employment alone. The qualifying band runs from the minimum income at which the one-bedroom gross rent of $840 is 35 percent of income, about $28,800, to the 60 percent limit of $44,820 for four persons and $48,406 for five. Of the county's 15,600 households, the study carries 38 percent as renters, about 5,900 renter households (MMCG estimate pending the B25003 table), and 22 percent of renter households, about 1,300, inside the qualifying band (MMCG estimate pending the B25118 table), before any allowance for income-eligible owner households or in-migration from the hospital's hiring. The 60 units are 4.6 percent of that pool, against DCA's Rural Pool capture ceilings of 35 percent for one- and two-bedroom units, 40 percent for three-bedroom units and 35 percent overall, and the study's own penetration test of 10 percent for a rural family product. The segment evidence is consistent with the pool: Southwell's 2,714 employees across two hospitals, the Target distribution center's 800 jobs, the university's 600 and the school system's staff supply the nursing, technical, warehouse, clerical and classroom households whose incomes fall inside the band; the Tifton Housing Authority's public housing inventory at Bellview Circle, Golden Homes, Hill Homes, J.M. Deas Homes and its other sites carries waiting lists whose length is not published; and the county's existing family tax credit inventory of about 640 units is, with two exceptions, more than 18 years old.

Three supply-side facts temper the demand. The HM Tifton LLC planned unit development on 48.9 acres in the county, approved for multifamily and student housing, was amended in 2026 to reduce its apartments from 553 to 460 units, and the city's own 2026 rezoning on South Carpenter Road added a second multifamily site; both are market-rate or student product and neither competes for the 60 percent household directly, but both will absorb the county's renter growth during the subject's lease-up. The JMG Family Farms rezoning of 68.4 acres from agricultural to R-8 in May 2026 adds single-family supply. No announced employer expansion was confirmed from an official source in 2024 to 2026, so the study carries no employment-driven household growth and sizes the capture from the existing pool, the approach of MMCG's Section 538 study in Brownsville, Tennessee.

Tift County's USDA multifamily inventory is two properties, Wildwood Apartments in Tifton and Meadow Crossing Apartments in Omega, and no Section 514 or Section 538 property was found in the county, so the Section 538 15 percent vacancy test at 7 CFR 3565.213 turns on Wildwood and on any Section 538 loan in the primary market area. The county's tax credit inventory is eleven properties with about 677 units, 40 of them senior, drawn from aggregators that mirror HUD's database and unverified against the HUD LIHTC database and DCA's award lists, which is a condition. Market-rate communities of 20 or more units were not found at the study date; the market-rate rent census is the first task of the DCA analyst's study and a condition of this one. The five properties that set the subject's competitive position are described below; rents, occupancies, assessor records and the rental assistance counts are not confirmed on the communities' own sites or the assessor's records and are disclosed.

Competitor Number 1

Brookfield Mews, 99 Tifton Eldorado Road, Tifton, is the county's newest large family tax credit community: 120 units, all low-income, in 32 one-bedroom, 64 two-bedroom, 18 three-bedroom and 6 four-bedroom units, placed in service in 2017 under a 4 percent allocation in a qualified census tract. It is the direct comparable for the subject's product, rent structure and tenant profile, and its occupancy is the first entry in DCA's test that no more than two DCA-funded properties in the primary market area sit below 90 percent. Rents, occupancy and rental assistance are not confirmed. Real estate taxes are not confirmed.

Competitor Number 2

South Tifton Development, 310 Old Omega Road, Tifton, is the county's most recent delivery: 56 low-income units placed in service in 2023 under HUD identification GAA20230036. Its unit mix, rents and occupancy are not confirmed. It is the evidence that DCA has funded new family product in Tifton within the last three years and that the market absorbed it, and its lease-up pace, once obtained from DCA's compliance records, is the best local absorption evidence available. Real estate taxes are not confirmed.

Competitor Number 3

Wildwood Apartments, 1220 Sussex Drive, Tifton, is the county's Section 515 property: 88 units, 87 of them low-income, in 72 two-bedroom and 16 three-bedroom units, originally financed under Section 515 and rehabilitated with 4 percent credits with a 2007 placed-in-service date, carrying Section 521 rental assistance on a number of units that is not published. It serves the deeper-income household that the subject's 60 percent rents do not reach, and its vacancy is the figure the Section 538 15 percent test requires; it was not published. Real estate taxes are not confirmed.

Competitor Number 4

The Groves Apartments and Groves Place, 2822 and 2840 Rainwater Road, Tifton, are an adjoining pair: 96 units with 76 low-income under a 2006 4 percent allocation, and 56 units whose allocation year was not found. Together they are the largest tax credit concentration in the county and, at about 20 years old, the inventory whose turnover and condition the subject's new product competes against. Unit mixes, rents and occupancies are not confirmed. Real estate taxes are not confirmed.

Competitor Number 5

The county's older inventory comprises Magnolia Place, 4 Pertilla Place, 36 units under a 1996 4 percent allocation; Tiffany Square, 1430 Prince Avenue, 46 units in 2 one-bedroom and 44 two-bedroom units under a 1997 nonprofit 9 percent acquisition and rehabilitation; Harbor Pointe, 88 Richards Drive, 56 units with 44 low-income; The Residences at West Haven, 2700 E.B. Hamilton Drive, 49 units; West Haven Senior Village, 2760 E.B. Hamilton Drive, 40 two-bedroom senior units; and Tifton Estates, 1510 Coley Avenue, 34 units. Rents and occupancies are not confirmed, and one aggregator entry duplicates Magnolia Place's data under Brookfield Mews, which the study has corrected to the 120-unit figure. Real estate taxes are not confirmed.

The pipeline is the HM Tifton planned development at 460 market-rate and student units, the South Carpenter Road R-P rezoning for apartments and the JMG Family Farms single-family rezoning. None is a tax credit application, and DCA's 2026 4 percent round, which closed September 25, 2026, had no Tifton award found at the study date.

The subject's rents are set from three ceilings and one floor. The Section 538 ceilings, at 30 percent of 115 percent of area median income for any unit and 30 percent of 100 percent on average, are about $1,610 and $1,400 for a one-bedroom, $1,932 and $1,680 for a two-bedroom and $2,233 and $1,942 for a three-bedroom, on MMCG's estimate from HUD's $74,700 median at 1.5 persons per bedroom; USDA's own published limits govern. The fiscal 2026 fair market rents are $821, $973 and $1,174. The 60 percent tax credit gross rents, on MMCG's estimate from the same median pending HUD's multifamily tax subsidy project table, are $840, $1,008 and $1,165, and the utility allowances for tenant-paid electric heat, cooling, cooking, lights and water heating are carried at $95, $118 and $135 (MMCG assumption pending the Tifton Housing Authority schedule), for net rents of $745, $890 and $1,030. The market floor is the study's achievable rent for a new garden community in Tifton, $1,025, $1,225 and $1,425 (MMCG assumption pending the market-rate census), set below the national effective rent of $1,726 and the national 3 Star asking rent, and consistent with a county whose two-bedroom fair market rent is $973. The 60 percent net rents sit 27 percent below the study's market rents for a one-bedroom, 27 percent for a two-bedroom and 28 percent for a three-bedroom, clearing DCA's 10 percent rent differential test; measured against the fair market rent, the two-bedroom 60 percent gross rent is 3.6 percent above it, which is why the DCA analyst's study must document the market-rate comparables rather than rely on the fair market rent. Other income, which comprises application and late fees, pet fees and laundry, is carried at $25 per unit per month. As proposed, the sponsor's market-rate rents are carried at the study's market rents, not at the program ceilings.

Georgia DCA's 2027 4 percent round opens with a pre-application on July 23, 2027 and an application on September 24, 2027, with threshold review by April 21, 2028. The study carries a DCA award and bond inducement in mid-2028, a closing in the fourth quarter of 2028, a 14-month construction period and completion in the first quarter of 2030, with 2030 carried as Year 1. Lease-up runs at seven units per month to 93 percent physical occupancy in nine months, inside DCA's 24-month absorption limit and consistent with the 56-unit 2023 delivery's presence in the market.

Rents trend at 2 percent and expenses at 3 percent, DCA's required trends, and economic occupancy is held at 93 percent, DCA's stabilized minimum, which is a 7 percent vacancy and collection loss against the national 7.8 percent vacancy and the 9.5 percent for 4 and 5 Star product in the October 2026 national data. The Year 1 shortfall of $99,875 against the restructured debt service is funded from the operating deficit reserve, and the rent-up reserve carries the three months of expenses before the first rents.

Location: 0 Kent Road, Tifton, GA 31794 Size in SF (Gross): 65,000 Units: 60

Source: Marshall & Swift CoreLogic, MMCG

Total project cost of $215,305 per unit sits at the lower end of recent Georgia rural tax credit awards, with land at $10,675 per unit and a building cost of $105 per gross square foot for three-story wood-frame walk-up construction on a flat, utility-served site, escalated from the first-quarter 2026 regional cost ranges by the 2.4 percent rise in the national index to the third quarter; the builder's profit, overhead and general requirements are carried inside the building line at DCA's 6, 2 and 6 percent limits. The developer fee of $1,365,000 is within DCA's 4 percent limit, the lesser of 13 percent of total development cost excluding the fee and reserves, which is $1,453,000, $4,500,000 and $30,000 per unit, which is $1,800,000; half of it is deferred. The operating deficit reserve is six months of Year 2 expenses, reserve and debt service and the rent-up reserve three months of expenses, both at DCA's requirement, and together they exceed the Section 538 reserve requirement of 2 percent of the loan. The guarantee fee is carried on the restructured loan; as proposed it is $69,300 on the $11,849,000 loan, and the operating deficit reserve on that loan is $629,600, which is why the as-proposed cost is $13,165,000. The eligible basis for the 4 percent credit excludes land, the reserves, the bond cost of issuance, the guarantee fee, syndication and marketing, and is $11,678,875.

Loan Assumptions (as proposed)

Loan Assumptions (restructured)

The restructuring replaces the sponsor's 90 percent loan with the capital stack that rural Georgia family product has carried since the program's own lending ceased to pencil at 2026 costs: the credits carry about 49 percent of the cost, the guaranteed loan 24 percent, the deferred fee 5 percent and a soft source 22 percent. The soft source is the condition on which the restructured determination turns; a DCA HOME or National Housing Trust Fund loan paired with the 4 percent award, a local or foundation source, or an equivalent, in the amount of $2,857,000, must be committed before the bond inducement. If USDA's lender commitment confirms the program's 1.15x floor and DCA accepts it, as the QAP permits where another government program's requirement is documented, the loan rises to about $3,206,000 and the gap falls to about $2,723,000; the study holds the DCA floor as the base case.

The Project is an eligible rural rental housing project under 7 CFR Part 3565 subject to the eligibility map: Tifton's 2020 population of 17,045 falls inside the rural definition's 10,000 to 20,000 band for places outside a metropolitan statistical area, and the eligibility map printout for the parcel is the first condition, because it also decides whether the tract falls in DCA's Rural Pool, which the QAP defines by the same map. The guaranteed loan is sized at 23.8 percent of cost and about 70 percent of the restricted-rent value, inside the 90 percent loan-to-value limit for a for-profit borrower, and the 1.20x coverage in Year 2 exceeds the 1.15x the lender certifies at guarantee issuance under Section 3565.303. Tenant incomes at initial occupancy do not exceed 115 percent of area median income because the 60 percent credit restriction is stricter, and the rents of $840 to $1,165 gross sit below the program's 30 percent of 115 percent ceiling for any unit and its 30 percent of 100 percent average. The term and amortization are 40 years, inside the 25 to 40 year range. The reserves exceed 2 percent of the loan. The initial guarantee fee of 65 basis points and the annual fee of 35 basis points on the guaranteed balance are the standard tier of the fiscal 2026 schedule under the March 2022 notice at 87 FR 12077, carried as an MMCG assumption pending the fiscal 2027 fee notice; the study runs a reduced tier of 60 and 25 basis points as a sensitivity. The Section 538 market study is prepared in the HB-1-3565 Exhibit 3-8 order, and the 15 percent vacancy test at Section 3565.213 depends on Wildwood's vacancy, which is a condition. The study is written as if RIN 0575-AD42, the proposed rule requiring the lender to submit a market study with a complete application, were final, because it is a credible lender requirement either way.

Under DCA's 2026-2027 Qualified Allocation Plan the Project is a Rural Pool 4 percent application for the 2027 round: the 60 percent rents, the 1.20x coverage for 15 years, the 1.10 ratio of effective gross income to expenses at 1.91, the 2 and 3 percent trends, the 7 percent vacancy, the $300 per unit reserve escalating 3 percent, the six-month operating deficit reserve, the three-month rent-up reserve, the $5,454 per unit operating expenses against the Rural Pool minimum of $4,250, the 5 percent hard cost contingency, the developer fee inside the 13 percent, $4,500,000 and $30,000 per unit caps with 50 percent deferred, the bond request inside the $25,000,000 cap and the 30 percent of aggregate basis limit, the 10 percent one-bedroom minimum and the 20 percent three-bedroom tiebreaker, the green certification and the accessibility set-asides are each met. The QAP requires the market study from a DCA-approved analyst in the DCA format dated within six months of the application, with capture rates at or below 35 percent for one- and two-bedroom units and 40 percent for three-bedroom units, absorption under 24 months, a 10 percent rent differential, no more than two DCA-funded properties in the primary market area under 90 percent occupancy and the tax estimate supported by other tax credit properties' taxes in the assessment area. The Section 538 lender's commitment must state the guarantee, the fees and whether the annual fee is paid from the lender's principal and interest, which the study's debt service line does. DCA's test that hard cost not exceed 90 percent of the as-completed appraised value turns on the appraiser's treatment of the credits and the restricted rents and is a condition. The study presents the sensitivities a DCA underwriter and a Section 538 lender expect: rent, occupancy, expense, tax valuation and interest rate cases, the combined case and the as-proposed case.

The Year 2 operating budget, the first stabilized year, at 93 percent economic occupancy on the 60 percent rents is built by line for a 60-unit garden community in Tift County at DCA's 3 percent escalation from the Year 1 budget.

Total operating expenses of $5,454 per unit sit above DCA's Rural Pool minimum of $4,250 and below the national all-product average of $8,657, as a new, tax-advantaged, owner-managed garden community in a low-cost south Georgia county should. Property tax reflects the 2026 school and city levies and the 2025 county levy at the 40 percent ratio on a restricted-rent value, with the full market valuation run as a sensitivity; insurance is carried at $800 per unit in Year 1 for a new sprinklered wood-frame community in inland Georgia with no coastal loading, escalating 3 percent against the national $777 average that rose 10.8 percent in the latest survey; payroll carries the community manager, leasing consultant and maintenance technician; utilities carry the owner-paid water, sewer and trash and the common-area electric with tenants paying in-unit electric; and the management fee is carried at 5 percent of effective gross income for a compliance-managed tax credit community. As proposed, the market-rate budget differs only in the tax line, $70,500 on a $6,500,000 value, the absence of compliance fees and a 4 percent management fee.

The Year 1 shortfall of $99,875 is the lease-up year and is funded from the $288,900 operating deficit reserve; the permanent loan converts at stabilization and the construction loan's lease-up interest is inside the capitalized interest line. The community covers at 1.20x in Year 2, the DCA floor to which the loan is sized, and builds by about one point a year as rents trend at 2 percent against expenses at 3 percent and the annual guarantee fee declines with the balance, reaching 1.25x in Year 7, 1.30x in Year 12 and 1.32x in Year 15, which is the 15-year schedule DCA underwrites. The Year 2 yield on total project cost of 2.3 percent is the yield a 60 percent rent community earns at $215,000 per unit, which is why the credits and the soft source carry 71 percent of the cost and the guaranteed loan 24 percent. As proposed at 90 percent leverage on market rents, the same site and building produce $508,000 of net operating income and $490,000 of cash flow after reserve in Year 2 against $895,000 of debt service, a coverage of 0.55x that reaches only 0.57x by Year 5; at the program's 90 percent loan-to-value limit of $6,534,000 the coverage is 0.99x, below the 1.15x floor, with $6,631,000 of equity earning 3.9 percent. The as-proposed rows are the determination.

At Year 2 rates, the restructured community's fixed operating cost is $314,600, comprising taxes, insurance, payroll, repairs, utilities, marketing, compliance and the replacement reserve, and its variable cost is the 5 percent management fee on effective gross income.

The loan is sized to 1.20x at the forecast occupancy. The 1.00x threshold at 85.7 percent is seven points below the forecast and about five points below the occupancy implied by the national 9.5 percent vacancy for 4 and 5 Star product, and the operating break-even at 49.3 percent is the statement of a low-leverage credit: the community pays its expenses at half occupancy and its debt at 86 percent, and the restricted rent, which rises with the income limits rather than the market, is what holds the schedule.

The restructured community holds coverage above 1.0x in every single-factor case and at 1.0x in the combined case, which is the shape of a tax credit loan sized to a 1.20x floor at 24 percent leverage: it survives a rent miss, an occupancy miss, an expense overrun, a tax valuation at market or a rate move, and it survives two of them together at exactly its debt. The property tax case matters because the assessor's treatment of the rent restriction under O.C.G.A. Section 48-5-2 is the largest single variance in a Georgia tax credit budget, and the 5 percent rent case matters because the 60 percent rents are MMCG's estimate from HUD's median pending the multifamily tax subsidy project table. The as-proposed structure fails in the base case at either loan amount.

The determination of not feasible as proposed and feasible as restructured is subject to the following conditions precedent on the restructured program:

The following items could not be verified from a primary source at the study date and are disclosed: the USDA eligibility map result; the R-P use table and the density, height, setback and parking standards in Chapter 2 of the Land Development Code; whether the tract lies inside the city limits; the Tift County assessor's parcel identification and assessed value; the 2026 county levy and the boundary of the Special Service Tax District; the exact text of O.C.G.A. Section 48-5-2 on restricted-rent valuation; the FEMA flood status; the electric provider; USDA Rural Development's own Section 538 income limits and HUD's fiscal 2026 multifamily tax subsidy project limits for Tift County, which the study estimates from the $74,700 median; the Tifton Housing Authority's utility allowance schedule and waiting list; the ACS tenure, income-by-tenure, rent burden and rent-by-bedroom tables and the Census building permit series, from which the study's renter share and qualifying-band estimates would be replaced; the market-rate apartment census; the rents, occupancies, unit mixes, rental assistance counts and assessor records of the eleven tax credit communities and Wildwood's vacancy; HUD's 2026 total development cost limits for the Albany metropolitan area as applied by DCA to the Rural Pool; and the fiscal 2027 Section 538 guarantee fee notice, pending which the study carries the 2022 fee structure.

This model study applies the methodology described on MMCG's USDA multifamily feasibility study, LIHTC and affordable housing feasibility study and multifamily feasibility study pages. MMCG prepares multifamily feasibility studies and Section 538 market studies for USDA Rural Development lenders, tax credit syndicators, HUD, agency and bank lenders nationwide, including in Georgia, with engagements from $4,900 and delivery in 9 to 16 business days.