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FIVE YEAR SUPPORTIVE HOUSING PLAN <br /> FINAL REPORT <br /> the extent possible, to generate project proceeds and to establish an operating deficit <br /> reserve. Each of these is described below. <br /> • Project Proceeds. To maximize leveraging, a portion of the $500,000 HOME funds <br /> may be used as interim or permanent financing. In the event that project proceeds <br /> are generated, NHDC will submit appropriate documentation to the City of Decatur <br /> regarding the proposed use of these funds. <br /> • Operating Deficit Reserve. Annual renewals of operating and rental subsidies have <br /> typically remained flat or increased at a rate significantly less than operating <br /> expenses. Although financing will be structured to eliminate or minimize debt <br /> repayment, escalating expenses over revenue will result in substantial operating <br /> deficits during the affordability period. An operating deficit reserve must be funded at <br /> closing from development financing and/or over time from net income to address <br /> these deficits in later years. <br /> Local Caaacitv <br /> Housing Providers. The City of Decatur has three well respected and recognized local <br /> organizations with demonstrated capacity in housing development. A brief description of <br /> each agency follows: <br /> • Neighborhood Housing Development Corporation (NHDC) was formed in <br /> 1989 by local residents to respond to the growing need for a community based, <br /> nonprofit affordable housing group that would promote revitalization of a target <br /> area on the east side of Decatur, Illinois. Its mission is to enhance the quality of <br /> life and fiving conditions for lower income families and to promote self-help and <br /> empowerment in low and moderate income neighborhoods through a <br /> comprehensive community development approach involving neighborhood <br /> residents and other stakeholders in the development of affordable housing and <br /> PAGE 3S <br />