texas state affordable housing corporation board meeting · 2005. 11. 4. · tab 2 presentation and...

Official Board Packet

Texas State Affordable Housing Corporation

Board Meeting

To be held at the offices of Texas State Affordable Housing Corporation

1005 Congress Avenue – Suite B-10 Conference Room Austin Texas 78701

Friday, November 4, 2005 10:30 a.m.

BOARD MEETING TEXAS STATE AFFORDABLE HOUSING CORPORATION

To be held at the offices of Texas State Affordable Housing Corporation


November 4, 2005 at 10:30 am

AGENDA CALL TO ORDER, ROLL CALL Jerry Romero CERTIFICATION OF QUORUM Chair The Board of Directors of Texas State Affordable Housing Corporation will meet to consider and possibly act on the following: PUBLIC COMMENT REPORTS

♦ Audit Committee Report Thomas Leeper ♦ President’s Report David Long ♦ Executive Vice President’s Report Katherine Closmann ♦ Single Family Lending Report Cathleen Dean ♦ Multifamily Lending Report Cari Garcia ♦ Asset Oversight & Compliance Report Katherine Closmann

♦ Quarterly Compliance Update ♦ Quarterly Residence Services Update

♦ Financial Report Melinda Smith ♦ Presentation of Financial Statements and Budget Report

ACTION ITEMS IN OPEN MEETING Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board Meeting held on October 14, 2005. Tab 2 Presentation and Discussion of the Texas State Affordable Housing Corporation Single Family Mortgage

Revenue Bonds (Firefighter and Law Enforcement or Security Officer Home Loan Program) Series 2005B Transaction.

Tab 3 Presentation, Discussion and Possible Approval of the Texas State Affordable Housing Corporation 2006

Annual Action Plan. Tab 4 Presentation, Discussion and Possible Approval of Final Scoring Criteria Governing the Method by which

the Corporation Scores and Ranks Applications for an Allocation Under the Corporation’s 2006 Multifamily Private Activity Bond Program.

Tab 5 Presentation, Discussion and Possible Approval of the Requests for Proposals for Housing Developments in

Areas Targeted Under the Corporation's 2006 Multifamily Private Activity Bond Program. Tab 6 Presentation, Discussion and Possible Approval of Amended Guidelines and Criteria Relating to the 2006

Multifamily Private Activity Bond Program. CLOSED MEETING Consultation with legal counsel on legal matters – Texas Government Code § 551.071 Deliberation regarding purchase, exchange, lease, or value of real property – Texas Government Code § 551.072 Deliberation regarding prospective gift or donation to the state or Texas State Affordable Housing Corporation – Texas Government Code § 551.073 Personnel Matters – Texas Government Code § 551.074 Implementation of security personnel or devices – Texas Government Code § 551.076 Other matters authorized under the Texas Government Code OPEN MEETING Action in Open Meeting on Items Discussed in Closed Meeting ADJOURN Individuals who require auxiliary aids or services for this meeting should contact Laura Smith, ADA Responsible Employee, at 512-477-3555, x 400 or Relay Texas at 1-800-735-2989 at least two days before the meeting so that the appropriate arrangements can be made.

Texas State Affordable Housing Corporation reserves the right to recess this meeting (without adjourning) and convene at a later stated time, if and to the extent allowed by law. If Texas State Affordable Housing Corporation adjourns this meeting and reconvenes at a later time, the later meeting will be held in the same location as this meeting. Texas State Affordable Housing Corporation also reserves the right to proceed into a closed meeting during the meeting in accordance with the Open Meetings Act, Chapter 551 of the Texas Government Code. If permitted by the Open Meetings Act, Chapter 551 of the Texas Government Code, any item on this Agenda to be discussed in open meeting may also be discussed by the Board (and any other authorized persons) in closed meeting.

Audit Committee Report

Discussion

President’s Report

Discussion

Executive Vice President’s Report

Discussion

Single Family Lending Report

Handouts will be provided at the meeting

Multifamily Lending Report

Discussion

Texas State Affordable Housing Corporation Resident Service Summary

Third Quarter September 2005 American Housing Foundation One Willow Chase Apartments: Houston July: Back to School Safety (provided by HPD) (6 attended) Poison Control (3 attended) School Supplies (17 attended) Aug: Crime Watch meeting (provided by HPD) (3 attended) National Night Out (provided by KRBE) (26 attended) Sept: Fire Safety (provided by Houston Fire Dept.) (18 attended) Donation Center (provided by Metropolitan Baptist Church) (8 attended) One Willow Park Apartment: Houston July: Back to School Safety (provided by HPD) (3 attended) Poison Control (1 attended) School Supplies (7 attended) Aug: Crime Watch (provided by HPD) (1 attended) National Night Out (provided by KRBE) (17 attended) Sept: Fire Safety (provided by Houston Fire Dept.) (2 attended) Donation Center (provided by Metropolitan Baptist Church) (2 attended) Woodedge Apartment: Houston July: School Supplies (35 attended) Aug: Crime Watch (15 attended) Child ID Kits (15 attended) Sept: Children’s Health Insurance Program (1 attended) Fountaingate Apartment: Wichita Falls July: Movie Time (8 attended) School Supplies (25 attended) Aug: Movie Time (10 attended) School Supplies for Katrina Residents (4 attended) Crime Watch (20 attended) Sept: Movie Time (10 attended) Settler’s Cove Apartment: Beaumont July: School Supplies (30 attended) Fitness Center (17 attended) Aug: Crime Watch (provided by courtesy officer) (2 attended) School Bus Safety Flyer (182 distributed) Fitness Center (22 attended) Sept: Planned activities cancelled due to Hurricane Rita

Cimarron Park Apartment: Conroe July: School Supplies (16 attended) Senior Meals (4 attended) Computer Facilities (9 attended) Aug: Crime Watch (19 attended) Senior Meals (4 attended) Computer Facilities (4 attended) Sept: Crime Watch (9 attended) Senior Meals (5 attended) Computer Facilities (8 attended) Stony Creek Apartment: Conroe July: Identity Theft (provided by PrePaid Legal Services) (10 attended) School Supplies (75 attended) Aug: Splash Day (provided by Conroe Fire Dept.) (25 attended) Crime Watch (15 attended) Sept: Crime Watch (10 attended) Voter Registration (5 attended) Pine Creek Village Apartment: Conroe July: Identity Theft (provided by PrePaid Legal Services) (10 attended) School Supplies (75 attended) Aug: Splash Day (provided by Conroe Fire Dept.) (25 attended) Crime Watch (15 attended) Sept: Crime Watch (10 attended) Voter Registration (5 attended) Shadowridge Village Apartment: Dallas July: Fire Safety (provided by Dallas Fire & Rescue Unit) (17 attended) Fitness Center (2 attended) Business Center (10 attended) Aug: School Supplies (29 attended) Fitness Center (3 attended) Business Center (7 attended) Sept: Children’s Book Distribution (16 attended) Business Center (11 attended) Fitness Center (7 attended) Creekwood Apartment: Dallas July: School Supplies (35 attended) Dart Bus Passes (25 attended) Aug: Crime Watch/ National Night Out (20 attended) Sept: Voter’s Registration (5 attended)

Bent Creek Apartment: Dallas July: Crime Watch (provided by DPD) (10 attended) Aug: School Supplies (50 attended) Sept: Children’s Health Insurance (provided by CHIPS) (10 attended) Northwoods Apartment: Houston July: School Supplies (7 attended) Referral to NWAM for rent assistance (2 attended) Distributed Zoo Tickets (43 attended) Aug: School Supplies to Katrina families (15 attended) National Night Out (provided by Sheriff’s Dept) (50 attended) Sept: Children’s Activities: Afternoon snacks (23 attended) Crime Watch & Personal Protection (ARROW meeting) (7 attended) Children’s ID Kits (32 attended) FEMA Referrals (10 attended) Aston Brook Apartment: Houston July: Firework Safety (3 attended) School Supplies (35 attended) Aug: National Night Out (provided by Sheriff’s Dept) (100 attended) Sept: Donations for Katrina Victims (15 attended) Children’s Health Insurance (1 attended) South Texas Affordable Properties The Charleston Apartment: Cranbrook July: Day Camp (provided by Council on Alcohol & Dug Abuse) (18 attended) Aug: Safety Awareness Class (38 attended) Vision Screen (provided by Prevent Blindness Texas) (26 attended) Sept: Breakfast on the Go w/ Abused Women Resource Handouts (100 attended) Town Hall Meeting (8 attended) Hurricane Relief (7 attended)

Remington Apartment: San Antonio July: Blood Drive (provided by South Texas Blood & Tissue Center) (0 attended) Aug: Financial Literacy (provided by CCCS) (7 attended) Personal Protection (provided by Krav Maga) (0 attended) Town Hall Meeting (1 attended) Sept: Hurricane Relief Effort (1 attended) Tutoring (0 attended)

The Wharf Apartment: Corpus Christi July: Swimming Lessons (0 attended) Yoga (provided by Yoga Studio) (0 attended) Aug: Fruit on Fridays (25 attended) Two Week Swimming Camp (provided by Aquatic Solutions) (8 attended) Town Hall Meeting (20 attended) Yoga (provided by Yoga Studio) (3 attended) Sept: Fruit on Fridays (25 attended) Crime Watch (provided by courtesy officer) (13 attended) Hurricane Information distribution (250 attended) Hurricane Relief Effort (3 attended) Other activities postponed due to Hurricane Rita evacuation. Willowick Apartment: Corpus Christi July: Expanded Nutrition for Kids (0 attended) Aug: Expanded Nutrition for Kids (0 attended) Town Hall Meeting (8 attended) Sept: Swimming Lessons (provided by Aquatic Solutions) (10 attended) Hurricane Information distribution (250 attended) The Rafters Apartment: Corpus Christi July: Crime Watch (provided by CCPD, NOW program) (0 attended) Aug: Children’s Activities: Life Skills Training (13 attended) Sept: Maintenance Classes (16 attended) Fruit on Fridays (40 attended) Nutrition & Cooking Camp (provided by Texas Co-op Ext) (0 attended) Renters Insurance Seminar (0 attended) Town Hall Meeting (4 attended) Summer Oaks Apartment: San Antonio July: Organization (provided by Michael’s) (4 attended) Blood Drive (provided by South Texas Blood & Tissue Center) (17 attended) Aug: Financial Planning Class (provided by CitiGroup) (3 attended) Town Hall Meeting (10 attended) Vision Screening (provided by Prevent Blindness Texas) (1 attended) Relaxation Seminar (4 attended) Sept: Hurricane Relief Effort (0 attended) Vision Screening (provided by Prevent Blindness Texas) (0 attended) American Opportunity for Housing Briarcest Apartment: Spring July/Aug/Sept None provided Clover Hill Apartment: Arlington July/Aug/Sept None provided.

Hillcrest Apartment: Grand Praire July/Aug/Sept None provided. Mill Creek Apartment: Spring July/Aug/Sept None provided. One Westfield Lake Apartment: Spring July/Aug/Sept None provided. GTEX Chelsea Court Apartment: Houston July: Self Defense (American Martial Arts Academy) (9 attended) Aug: Back to School Treat (provided by Cold Stone Creamery) (2 attended) Crime Watch ( provided by HPD Positive Interaction Program) (8 attended) Sept: Housing Hurricane Katrina evacuees & providing assistance (110 attended) Kressington Place Apartment: Spring July: Swimming Lessons (6 attended) Aug: Crime Watch (provided by police dept) (2 attended) Sept: Child Care class cancelled due to Hurricane Rita Victoria Place Apartment: Houston July: Child Care (provided by Piney Point Day Care) (2 attended) Aug: Health & Nutritional Courses (provided by Dr. Smooke) (4 attended) Sept: After School Activities (provided by YMCA) (3 attended) Champions Green Apartment: Houston July: Personal Protection (provided by Sherriff’s Dept) (5 attended) Aug: Personal Protection (provided by Fire Dept.) (0 attended) Sept: Child Care (provided by Victory Academy) (0 attended) Riverwalk Apartment: Dallas July: Job Skill Seminar (provided by Richland College/Workforce Dev.) (2 attended) Aug: Auto Theft Prevention (provided by DPD) (6 attended) Sept: Financial Planning Workshop (provided by American Express) (4 attended) Timberlodge Apartment: Dallas July: Crime Watch (provided by Crime Strike) (6 attended) Aug: Health and Nutritional Class (4 attended) Sept: Donation Drive for evacuees living on property (15 attended) Ashley Park Apartment: Plano July: Maintenance Awareness (46 attended) Aug: Crime Prevention (provided by Police Dept) (25 attended) Sept: Neighborhood Watch (provided by Third Eye Surveillance) (28 attended)

AGAPE ASHTON / WOODSTOCK Ashton Place Apartment: Galveston July: Children’s Activities: After School (7 attended) Aug: Children’s Activities: After School (7 attended) National Night Out (20 attended) Sept: Children’s Activities: After School (8 attended) Woodstock Apartment: Arlington July: No Resident Services Provided Aug: No Resident Services Provided Sept: No Resident Services Provided Common Wealth White Rock Apartment: San Antonio July: Organization Class (provided by Michael’s) (4 attended) Youth Program twice a week (provided by SACADA) (7 attended) Renters Insurance (provided by Farmers Insurance) (0 attended) Aug: Financial Planning (provided by Bank One) (1 attended) Self Defense Techniques (provided by Krav Maga) (0 attended) Renter’s Insurance Brunch (14 attended) Relaxation Seminar (3 attended) Sept: Tutoring twice a week (6 attended) Hurricane Relief Efforts (22 attended) Vision Screening (provided by prevent blindness Texas) (0 attended) HIC/ABC Arborstone Apartment: Dallas July: No Resident Services Provided Aug: Crime Watch Building Captain’s Meeting (7 attended) Sept: Crime Watch Building Captain’s Meeting (7 attended) Baybrook Village Apartment: Webster July: Fitness/Aerobics (6 attended) Resident Council (7 attended) Computer Facilities (43 attended) Aug: Aerobics (8 attended) Senior Game Day (8 attended) Computer Facilities (36 attended) Resident Council (10 attended) Sept: Financial Planning Courses (provided by Wells Fargo) (10 attended)

Cresent Oaks Apartment: Houston July: After school care (35 attended) Tutoring (12 attended) Summer Food Program (provided by Houston Parks & Rec) (35 attended) Resident Council (4 attended) WIC/CHIPS program (provided by Health & Human Services) (2 attended) Immigration Presentation (provided by Catholic Charities) (5 attended) Senior Day (1 attended) Computer Facilities (14 attended) Educational Resources (2 attended) Aug: Financial Planning (provided by Laredo National Bank) (7 attended) After School care (35 attended) Tutoring (12 attended) Summer Food Program (provided by Houston Parks & Recreation) (35 attended) Resident Council (4 attended) Health and Nutritional Class (provided by Texas Co-op Ext) (5 attended) Senior Day (1 attended) Computer Facilities (9 attended) Sept: Resident Council (4 attended) Health and Nutritional Class (provided by Texas Co-op Ext) (5 attended) Computer Facilities (10 attended) SOA Aquila Oaks Apartment: San Antonio July: Youth Program (20 attended) Yoga (3 attended) Aug: Yoga (3 attended) Youth Program (20 attended) Sept: Yoga (2 attended)

Agape Ashton/Woodstock, Inc.

Ashton Place WoodstockLI Occupancy 77% 84%VLI Occupancy 33% 62%

NHT/GTEX Project Portfolio

Ashley Park Champions Green Chelsea Court Kressington Place Victoria Place Riverwalk TimberlodgeLI Occupancy 75% 76% 75% 76% 75% 76% 75%VLI Occupancy 33% 22% 20% 21% 20% 20% 20%

HIC Arborstone Baybrook, LLC

Arborstone Baybrook Crescent OaksLI Occupancy 87% 85% 95%VLI Occupancy 22% 23% 22%

Commonwealth Multifamily (White Rock), LLC

White RockLI Occupancy 75%VLI Occupancy 20%

American Housing Foundation

Settler's Cove Cimarron Park Pine Creek Stony Creek Bent Creek Creekwood Village Shadowridge LI Occupancy 81% 85% 81% 80% 88% 90% 83%VLI Occupancy 51% 40% 55% 49% 66% 63% 57%

Aston Brook Northwoods One Willow Chase One Willow Park Woodedge FountaingateLI Occupancy 80% 80% 79% 77% 81% 79%VLI Occupancy 41% 34% 47% 50% 42% 23%

South Texas Affordable Properties Corporation

Charleston Remington Summer Oaks The Rafters The Wharf WillowickLI Occupancy 80% 82% 78% 79% 78% 79%VLI Occupancy 23% 23% 31% 22% 21% 23%

American Opportunity for Housing, Inc.

Clover Hill Hillcrest Briarcrest Mill Creek One WestfieldLI Occupancy 82% 85% 80% 77% 79%VLI Occupancy 51% 55% 38% 39% 31%

San Antonio Low Income Housing, LLC

Aguila OaksLI Occupancy 79%VLI Occupancy 24% * LI Occupancy statistic is inclusive of the VLI Occupancy statistic.

Quarterly Compliance Status for TSAHCAs of Second Quarter Ending 9-30-05

TEXAS STATE AFFORDABLE HOUSING CORPORATIONCOMPARISON OF BUDGETED TO ACTUAL OPERATING ACTIVITY

(For the One Month Period Ending September 30, 2005)

% of AnnualRevenues Budget Actual Budget

Servicing Revenue, Net of Subservicer Fees 425,000 45,316 10.66% Note 1Multifamily Revenue 650,000 59,171 9.10%TDHCA Asset Oversight Revenue 509,000 42,852 8.42%Investment Revenue 120,000 13,718 11.43% Note 2Grant/Fundraising Income - - 0.00%TOTAL REVENUES 1,704,000 161,057 9.45%

ExpendituresSalaries & Payroll Related Expenditures 860,000 70,857 8.24%Professional Services - Legal, Audit & IT 177,000 3,744 2.12%Office & Equipment Lease 124,000 10,434 8.41%Travel & Meals 72,000 7,257 10.08%Interest on FHLB Notes 67,000 5,579 8.33%Marketing & Sponsorships 23,000 (1,076) -4.68% Note 3Insurance 23,600 1,911 8.10%Professional Dues & Training 12,000 (45) -0.38% Note 4Communication 12,000 1,152 9.60%Bank Fees & Charges 8,000 940 11.75% Note 5Office Supplies 8,000 775 9.69%Publications, Subscriptions, Office Maintenance 5,300 350 6.60%Freight, Delivery & Postage 6,000 364 6.07%Furniture, Equipment, & Software 20,000 264 1.32%Printing 1,500 - 0.00%Program and Loan Administration 4,000 - 0.00%TOTAL EXPENDITURES 1,423,400 102,506 7.20%

NET INCOME 280,600 58,551 20.87%

Target Percentage = 8.33%

FY 2006

TEXAS STATE AFFORDABLE HOUSING CORPORATIONCOMPARISON OF BUDGETED TO ACTUAL OPERATING ACTIVITY

(For the One Month Period Ended September 30, 2005)

Note 1 The majority of servicing revenue is related to the Countrywide portfolio. Revenue is tied directly to loan principal payments and is expected to exceed monthly budget estimates during the first part of FY 2006 and decline as the outstanding loan balances decrease and pay off.

Note 2 Investment Revenue will vary monthly during the year based on the number of securities maturing each month. Revenue in September is higher than that budgeted for one month due to the maturity of two securities during the month.

Note 3 Marketing and Sponsorship expenditures for September equaled $674. Expenditureswere offset by Single Family lender contributions of $1,750 resulting in a credit to this budget line item of $1,076.

Note 4 Expenditures for Professional Dues & Training totaled $190 for September. These expenses were offset by a $235 refund received due to the cancellation of aseminar that was paid for in a previous month.

Note 5 Banking fees for September exceed budget estimates. In an effort to decrease thesecosts staff met with bank representatives and identified several options for fee savings.Total banking fees are not expected to exceed budget estimates for FY2006.

BOARD MEETING TEXAS STATE AFFORDABLE HOUSING CORPORATION

Held at the Offices of Texas State Affordable Housing Corporation


October 14, 2005 at 10:30 am

Summary of Minutes Call to Order, Roll Call Certification of Quorum The Board Meeting of the Texas State Affordable Housing Corporation (the “Corporation”) was called to order by Jerry Romero, Chair, at 10:30 a.m., on October 14, 2005, at the offices of Texas State Affordable Housing Corporation, 1005 Congress Avenue – Suite B-10 Conference Room, Austin, TX 78701. Roll Call certified that a quorum was present. Members Present Jerry Romero, Chair Thomas A. Leeper, Vice Chair Charles G. Rencher, Member Members Absent Jo Van Hovel, Member Staff Present David Long, President Melinda Smith, Chief Financial Officer Katherine Closmann, Executive Vice President Cari Garcia, Manager of Multifamily Finance Emily Lah, Asset Oversight and Compliance Manager Laura Smith, Corporate Secretary Public Comment Special Guests Mary Bert-Koelling, First Southwest Company Elena Pienado, Texas Department of Housing and Community Affairs Kent Smith, Jackson Walker LLP Reports President Report

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Mr. Long began by informing the Board that he and Ms. Garcia attended the NCSHA conference in Boston. Mr. Long then stated that he attended the Texas Community Economic Development Summit. Mr. Long stated that the Texas Association of Local Housing Finance Agencies (TALHFA) Conference would be held later this month in Corpus Christi and the National Association of Local Housing Finance Agencies (NALHFA) Conference would be held in San Francisco in November. Mr. Long stated that he and Ms. Closmann had attended a hurricane survivors summit at the Capitol that was put on by Texas State Low Income Information Services. Mr. Long stated that pros and cons of the state’s reaction to the recent hurricanes were discussed as well as a future plan of action. Mr. Long informed the Board that he and Ms. Smith had traveled to Houston the previous month to volunteer at the George R. Brown center, which was being used as a temporary shelter for victims of Hurricane Katrina. Mr. Long stated that Ms. Lah continued to help place those who called our offices in apartments across the state. Mr. Long informed the Board that staff had attended the13 Consolidated Public Hearings regarding the State Low Income Housing Plan. Mr. Long turned the Board’s attention to the fact that the Annual Financial Audit would soon be conducted. Mr. Long brought to the Board’s attention that Ms. Dean had resigned her position with the Corporation in order to relocate to Chicago. Single Family Report Mr. Long turned the Board’s attention to the spreadsheets handed out prior to the meeting that contained current information regarding the single family bond programs. Mr. Long proceeded to go through and explained the information included in the reports. Mr. Long briefly discussed the 2005B Firefighter, Law Enforcement or Security Officer Home Loan Program transaction that would close on October 25, 2005. Mr. Long stated that a presentation would be made and a summary handed out at the November meeting. Mr. Romero requested that the information included in the spreadsheets be broken out by program year. Mr. Long informed the Board that Ms. Dean had made visits across the state to offices of the Texas Department of Criminal Justice (TDCJ), and had made presentations regarding the Firefighter, Law Enforcement or Security Officer (Homes for Heroes) Home Loan Program. Mr. Long thanked Mr. Leeper for his participation in the Huntsville presentation. Mr. Long stated that Ms. Dean attended the Realtors Conference in Galveston in September and was currently attending the Combined Law Enforcement Agencies of Texas (CLEAT) conference in El Paso. Mr. Rencher inquired when the Mortgage Brokers Conference was rescheduled to and Mr. Long stated that he would find out and let him know. Mr. Rencher inquired as to who organized the meetings and presentations that Ms. Dean attended with TDCJ, and Mr. Long responded that they were set up through TDCJ’s human resources department. Mr. Rencher stated that he would like for Ms. Dean to visit Fort Bend county and give a presentation there. Mr. Rencher asked what the steps for setting up a presentation would be and Mr. Long explained the steps taken to spread the word about the Homes for Heroes program. Mr. Rencher inquired as to how many people usually attended these meetings, and Mr. Long stated that it depended on the nature of the meeting and whether or not a formal presentation was made.

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Executive Vice President’s Report Ms. Closmann began by updating the Board on the Corporation’s grant and fundraising initiative. Ms. Closmann stated that Greenlights for NonProfit Success had been contracted to do an action plan workshop, which gave the staff an opportunity to lay out goals for the initiative. Ms. Closmann stated that they were in the process of doing the action plan right now, which would seek out grants to fulfill those goals and then to apply for them. Ms. Closmann stated that she anticipated contracting with Greenlights for six months to prospect for grants for the Corporation. Ms. Closmann stated that at the end of the six months, it could then be decided whether to move forward with Greenlights or to bring the process in-house. Mr. Romero inquired about the timeline for the process. Ms. Closmann stated that she anticipated the contract and action plan would be in place in 2 weeks, and afterwards the grant prospecting would begin. Discussion followed between Mr. Romero and Ms. Closmann regarding the timeline for the Grant and Fundraising program. Ms. Closmann then turned the Board’s attention to the American Housing Foundation’s refinance, and stated that there were some compliance issues, and so therefore the original closing date was not anticipated to be met. Ms. Closmann discussed the refinancing further. General Multifamily Lending Report Ms. Garcia began by informing the Board that she had been able to attend the Rural Rental Housing Association’s conference, where she was able to meet with representatives from USDA office’s in Washington DC and Texas regarding the Corporation’s rural initiatives. Ms. Garcia explained the meeting further. Ms. Garcia stated that she had attended the NCSHA conference in Boston with Mr. Long, and while there she was able to meet with Brian Gallagher with Community Development Trust. Ms. Garcia stated that they discussed the Corporation’s Direct Lending Program. Ms. Garcia stated that a training via telephone teleconference had been set up for she, Mr. Long and Ms. Closmann, that gave insight to changes that had been made to the program since the Corporation had last been able to use it. Ms. Garcia informed the Board of the Consolidated Public Hearings that she attended on behalf of the Corporation. Ms. Garcia also brought to the Board’s attention that she would be attending the TALHFA Conference and would likely sit on a Multifamily panel. Ms. Garcia stated that she and Ms. Closmann would be working on RFPs to be issued in conjunction with the 2006 Private Activity Bond Program. Mr. Romero inquired whether USDA rural lending programs had been discussed when Ms. Garcia had met with the representatives from USDA. Ms. Garcia stated that they had talked about various loan programs. Ms. Garcia informed the Board which programs were discussed regarding new construction and preservation. Financial Report Ms. Smith began by referring the Board’s attention to the Comparison of Budgeted to Actual Expenditures, that were as of fiscal year end August 31, 2005. Ms. Smith proceeded to explain in detail the numbers included on the financial statement.

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Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board

Meeting held on September 9, 2005. Mr. Leeper made a motion to approve the Minutes of the Board Meeting held on September 9, 2005. Mr. Rencher seconded the motion. Motion passed. Tab 2 Presentation, Discussion and Possible Approval of Final Guidelines and

Criteria Relating to the 2006 Multifamily Private Activity Bond Program. Ms. Garcia refreshed the Board’s memory that the draft guidelines for the 2006 Private Activity Bond program had been discussed at the previous meeting. Ms.Garcia stated that they were published on the Corporation’s website and had received no public comment. Ms. Garcia asked for the Board’s approval of the final guidelines. Mr. Romero made a motion to approve the final guidelines and criteria relating to the 2006 multifamily private activity bond program. Mr. Rencher seconded the motion. Motion passed unanimously. Tab 3 Presentation, Discussion and Possible Approval for Public Comment of the

Draft Scoring Criteria Governing the Method by which the Corporation Scores and Ranks Applications for an Allocation Under the Corporation’s 2006 Multifamily Private Activity Bond Program.

Ms. Garcia began by referring the Board’s attention to the draft scoring criteria included in the Board packet. Ms. Garcia explained that this was the draft that would be out for public comment. Ms. Garcia then referred the Board to the handout she had given them at the beginning of the meeting. Ms. Garcia explained that the handout reflected the changes that were made to the 2005 scoring criteria. Ms. Garcia proceeded to go through and explain all the suggested changes. Ms. Garcia clarified for the Board which items stayed the same and which ones were deleted. Ms. Garcia also explained the change in how the criteria was formatted and organized. Mr. Romero inquired about the amenities package item. Ms. Garcia explained that the city originally provided the scoring on the quality and amenity package and since it would be difficult for the staff to provide a score on it, the item was deleted from the scoring criteria. Ms. Garcia stated that it was assumed that this detail would be discussed before the city of county approved a resolution supporting the development, which would be required for the transaction. Mr. Romero inquired whether developers were required to meet building requirements regarding quality and amenities and Ms. Closmann stated that there were building codes that would have to be followed in each of the cities. Ms. Closmann further stated that under the qualified allocation plan for the 4 percent tax credits, there were threshold criteria that must be met which included amenities in the apartment units. Ms. Closmann also referred the Board’s attention to the new line item concerning green building aspect. Ms. Garcia continued to explain the handout concerning items in the scoring criteria that had been revised.

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Mr. Rencher inquired whether the Corporation received comments on things that were put out for public comment on the Corporation’s website. Ms. Garcia stated that this would be an item that developers would likely want to comment on. Ms. Closmann also stated that the staff would also send out the draft scoring criteria to developers as not only a way to solicit comment but also as a marketing tool for the RFPs that would be coming out the following month. Mr. Romero inquired whether there were requirements for publishing draft criteria for public comment. Ms. Closmann stated that there weren’t specific requirements for publishing the draft criteria, that typically the website and word of mouth were good ways to get the information out there. Ms. Garcia also stated that the programs criteria and guidelines would also be discussed at the coming TALHFA conference. Mr. Rencher made a motion to approve publishing for public comment the draft scoring criteria governing the method by which the Corporation scores and ranks applications for an allocation under the Corporation’s 2006 Multifamily Private Activity Bond. Mr. Leeper seconded the motion. Motion passed unanimously. Tab 4 Presentation, Discussion and Possible Approval of Target Areas of Housing

Need for the 2006 Multifamily Private Activity Bond Program. Ms. Garcia began by refreshing the Board’s memory that at the Board retreat it was discussed that the target areas for the Private Activity Bond Program be changed to housing areas of need. Ms. Garcia stated that after much research had been done, it was determined there was still a need for affordable housing in rehabilitation, senior housing and rural housing. Ms. Garcia brought to the Board’s attention that the Texas Department of Housing and Community Affairs (TDHCA) had recently put out a request for proposal for a market analysis for housing need in the Houston area. Ms. Garcia explained that while staff was recommending the aforementioned target areas, staff would pay special attention to the report due in January to see if another RFP should be issued for that area. Mr. Romero inquired how monies for this program would be split between the 3 areas, and this possible 4th area. Ms. Garcia briefly explained how the funding would work and the monies would be made available for the individual areas. Mr. Romero inquired whether additional funds could be requested of the Bond Review Board (BRB). Ms. Closmann explained that from August 15th until September 1st, monies would be available specifically for multifamily programs. Ms. Closmann stated that a waiting list could be created if all the Corporation’s funds for the program were used prior to August 15th. Ms. Closmann stated that once this date was reached, and if the alternates hadn’t been able to find funding elsewhere, the Corporation could take an application to the BRB for additional funds. Mr. Leeper made a motion to approve the target areas of housing need for the 2006 Mulifamily Private Activity Bond Program. Mr. Romero seconded the motion. Motion passed. Tab 5 Presentation and Discussion of the Texas State Affordable Housing

Corporation Draft 2006 Annual Action Plan. Mr. Long explained that the Corporation’s 2006 Draft Annual Action plan included in the Board packet was discussed at the consolidated pubic hearings and was currently out for public comment. Mr. Long proceeded to explain the document and stated that the plan would be

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brought before the Board in November for final approval. Mr. Long stated that any comments the Board may have on the Plan would be appreciated. Mr. Romero inquired whether there were any questions regarding the Corporation’s plan at the consolidated hearings. Ms. Closmann stated that there weren’t any comments about the Corporation’s plan at the hearings. Tab 6 Presentation, Discussion and Possible Approval of the Corporation’s 2005-

2007 Business Plan. Mr. Long referred the Board’s attention to the final version of the Corporation’s 2005-2007 Business Plan. Mr. Long briefly went through the plan, explaining the differences between it and the Annual Action plan. Mr. Long commended the staff for their work in getting the information together and making sure that all goals were realistic and obtainable. Mr. Romero asked whether this was a live document that could be revised in future if the need arose. Mr. Long stated that it was. Mr. Rencher stated his approval of the plan and complemented Ms. Lah on the pictures she was able to use in the layout. Mr. Rencher inquired how the Corporation would go about replacing Ms. Dean. Mr. Long explained that the job posting would be sent to Administaff and placed on the Corporation’s website that day. Mr. Long stated that it would also be placed in various industry publications. Mr. Long stated that he would email the Board members a copy of the job posting. Mr. Rencher made a motion to accept the Corporation’s 2005-2007 Business Plan. Mr. Romero seconded the motion. Motion passed unanimously. Closed Meeting Board Chair Mr. Jerry Romero called the Board into Executive Session at 11:19 a.m. Mr. Romero resumed the Board Meeting at 11:30 a.m. Tab 7 Presentation, Discussion and Possible Ratification of Settlement of Litigation

styled Texas State Affordable Housing Corporation v. WestEnd Properties, Inc.

Mr. Romero made a motion to ratify the settlement of litigation styled Texas State Affordable Housing Corporation v. West End Properties, Inc. Mr. Rencher seconded the motion. Motion passed unanimously. Open Meeting Mr. Long asked for confirmation regarding the November meeting. It was decided that the November meeting would take place on November 4, 2005 at 10:30 am. Adjournment Mr. Rencher made a motion to adjourn the meeting. Mr. Romero seconded the motion. Motion passed unanimously.

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The Texas State Affordable Housing Corporation Board Meeting was officially adjourned at 11:31a.m. Respectfully submitted by________________________________________________ Laura Smith, Corporate Secretary

Tab 2

Presentation and Discussion of the Texas State Affordable Housing Corporation Single Family Mortgage Revenue Bonds (Firefighter and

Law Enforcement or Security Officer Home Loan Program) Series 2005B Transaction

Discussion

2006 TSAHC Annual Action Plan 1

TEXAS STATE AFFORDABLE HOUSING CORPORATION 2006 ANNUAL ACTION PLAN


TEXAS STATE AFFORDABLE HOUSING CORPORATION 2006 ANNUAL ACTION PLAN

TABLE OF CONTENTS OVERVIEW................................................................................................................................................................ 2 NEEDS ASSESSMENT REVIEW ............................................................................................................................ 3

GENERAL HOUSING NEEDS....................................................................................................................................... 4 SINGLE FAMILY HOUSING NEEDS ............................................................................................................................. 4 MULTIFAMILY HOUSING NEEDS ............................................................................................................................... 5

TSAHC PROGRAM DESCRIPTIONS.................................................................................................................... 7 TEXAS PROFESSIONAL EDUCATORS HOME LOAN PROGRAM .................................................................................... 7 TEXAS FIRE FIGHTER AND LAW ENFORCEMENT OR SECURITY OFFICE HOME LOAN PROGRAM ............................... 7 NURSING FACULTY HOME LOAN PROGRAM ............................................................................................................. 7 AFFORDABLE HOMEOWNERSHIP PROGRAM FOR TEXAS ........................................................................................... 8 MULTIFAMILY PRIVATE ACTIVITY BOND PROGRAM ................................................................................................ 9 MULTIFAMILY 501(C)(3) BOND PROGRAM ............................................................................................................. 11 MULTIFAMILY DIRECT LENDING PROGRAM ........................................................................................................... 11 ASSET OVERSIGHT AND COMPLIANCE .................................................................................................................... 12 GRANT PROGRAM ................................................................................................................................................... 12

Sec. 2306.566 of the Texas Government Code reads:

COORDINATION REGARDING STATE LOW INCOME HOUSING PLAN. (a) The corporation shall review the needs assessment information provided to the

corporation by the department under Section 2306.0722(b). (b) The corporation shall develop a plan to meet the state's most pressing housing

needs identified in the needs assessment information and provide the plan to the department for incorporation into the state low income housing plan.

(c) The corporation's plan must include specific proposals to help serve rural and other underserved areas of the state.

OVERVIEW This report is prepared in accordance with SB 284, 78th Session, which requires the Texas Department of Housing and Community Affairs (“TDHCA”) and the Texas State Affordable Housing Corporation (“Corporation”) to coordinate regarding the State Low Income Housing Plan (“SLIHP”). The bill amends Section 2306.0722(b) to require TDHCA to provide the needs assessment information compiled for the report and plan to the Corporation. Section 2306.566 is added to require the Corporation to then review the information and develop a plan to meet "the state's most pressing housing needs identified in the need assessment information" and provide the plan to TDHCA for incorporation into the resource allocation plan in the SLIHP. The Corporation's plan must include specific proposals to help


serve rural and other underserved areas of the state and provide affordable housing through methods that do not duplicate those of TDHCA or local housing organizations. The bill also adds Section 2306.0721(h) to require TDHCA to incorporate the specific results of the Corporation's programs in TDHCA's estimate and analysis of housing supply in each uniform state service region under Section 2306.0721(c)(9).

HISTORY OF THE CORPORATION The Texas State Legislature created the Corporation as a self-sustaining non-profit entity to facilitate the provision of affordable housing for low income Texans who do not have comparable housing options through conventional financial channels. Enabling legislation, as amended, may be found in the Texas Government Code, Chapter 2306, Subchapter Y, Sections 2306.551 et seq. All operations of the Corporation are conducted within the state of Texas. Corporate offices are located in Austin, Texas. A five-member board of directors appointed by the Governor with the advice and consent of the Senate oversees the business of the Corporation.

The Corporation issues mortgage revenue bonds and private activity bonds to finance the creation of affordable multifamily housing units, and to finance the purchase of single-family homes under three separate programs: (1) the Professional Educators Home Loan Program, (2) the Fire Fighter and Law Enforcement or Security Officer Home Loan Program, and the newest program, (3) the Nursing Faculty Home Loan Program. Since April 2001, the corporation has issued over $600 million in single-family and multifamily mortgage revenue bonds. To date, the Corporation has provided over 8,362 units of affordable multifamily housing to low income Texans. The Corporation has also served 570 income eligible individuals and/or families through its first-time homebuyer single-family programs. This affordable housing has been provided at no cost to the state and its taxpayers. The Corporation does not receive any state funding, and is not subject to the legislative appropriations process.

The Corporation is organized, operated, and administered in accordance with its enabling legislation as a 501(c)(3) nonprofit corporation in order to access additional sources of funding to accomplish its mission. The Corporation is an approved originating seller/servicer for single family loans with Fannie Mae, Freddie Mac, Ginnie Mae, U.S. Rural Development, FHA, and VA. The Corporation has conduit sales agreements with Countrywide Home Loans, Inc., and Wells Fargo Funding, and with the Community Development Trust, Inc., for multifamily mortgage loans. The Corporation is also a non-member borrower of the Federal Home Loan Bank of Dallas.

NEEDS ASSESSMENT REVIEW According to an analysis of the Texas Department of Housing and Community Affairs’ (TDHCA) Needs Assessment and other published studies on the subject, the following represent the most pressing housing needs in the state:


GENERAL HOUSING NEEDS • By 2000, Texas had the second largest total population, 20.9 million, among the states in

the United States. By 2010, the population is projected to be between 24.2 million and 25.9 million and by 2040 between 35.0 million and 50.6 million.1

• As a result of the growing population, housing demands will change substantially in the coming years with both owner and renter housing growing at nearly equal rates.2

• Affordable housing is in short supply for the extremely low, very low, low, and moderate income brackets, which was caused primarily by the private sector’s concentration of development, both single family and multifamily development, in larger metropolitan areas and targeting higher income individuals and families.3

• Many HUD-financed or HUD-subsidized properties, which represent a significant portion of the state’s affordable housing portfolio, are at risk of becoming market rate properties.4

SINGLE FAMILY HOUSING NEEDS • Texas may add nearly 3.8 million more students over the next 40 years placing a high

demand for educators.5

• Population growth will mean increased public service demands and expanding markets for Texas.6

• Lack of funds for down payment and closing costs has created one of the greatest obstacles that prevent first-time homebuyers of low-to-moderate-income families, such as the teachers, police officers, and firefighters, from achieving the American dream of owning a home.7

• The Texas Education Code establishes a state minimum salary schedule that must be accommodated by all Texas schools for specific public education professionals. The state minimum salary for 2004-2005 ranges from $24,240 per year for 0 years experience to $40,800 per year for 20 or more years of experience.8

1 Texas Department of Housing and Community Affairs, Center for Housing Research, Planning, and Communications, 2005 State of Texas Low Income Housing Plan and Annual Report (Austin, TX: Texas Department of Housing and Community Affairs, 2004). 2 Texas A&M University, Center for Demographic and Socioeconomic Research and Education, A Summary of the Texas Challenge in the Twenty-First Century: Implications of Population Change for the Future of Texas, 2002. 3 Texas Department of Housing and Community Affairs, Center for Housing Research, Planning, and Communications, 2005 State of Texas Low Income Housing Plan and Annual Report (Austin, TX: Texas Department of Housing and Community Affairs, 2004). 4 Ibid. 5 Texas A&M University, Center for Demographic and Socioeconomic Research and Education, A Summary of the Texas Challenge in the Twenty-First Century: Implications of Population Change for the Future of Texas, 2002. 6 Ibid 7 National Association of Home Builders, News Details; March 24, 2004. 8 Texas Classroom Teachers Association: State Minimum for 2004 year.


• A base salary chart for Texas police officers ranges from $32,944 per year to $46,644.9

• A base salary chart for Texas firefighters ranges from $24,944 per year to $41,573. 10

• The Texas nursing education system is operating close to capacity and faces several impediments to producing more graduates—faculty shortages due to retirement, inadequate salaries, and fewer faculty applicants.11

MULTIFAMILY HOUSING NEEDS • Renter households are, on average, a lower income group than owner households.

More than 37 percent of renter households earn less than 50 percent of the Area Median Family Income, compared to only 16.3 percent of owner households. As a result, renter households are more likely to be in need of housing assistance.12

• According to the results of the 2003 Community Needs Survey distributed by TDHCA to cities, counties, local housing departments, public housing authorities, and the US Department of Agriculture/Rural Development field offices, approximately 78 percent of respondents felt that there was a severe or significant affordable housing problem in their area and that new rental housing development and the renovation of existing multifamily housing are more important than rental payment assistance.13

• The lack of affordable housing opportunities leads to severe and extreme housing cost burdens for lower-income groups; in particular, extremely low-income renter households.14

• Overcrowding may indicate a general lack of affordable housing in a community and lower income renter households experience overcrowded conditions more frequently than higher income households.15

• In the 2005-2009 State of Texas Consolidated Plan, it is estimated that 2 million people or 9.9% of the total population are 65 years of age and older. The Texas Department of Aging and Disability Services estimates that by year 2040, individuals age 60 and over will comprise 23 percent of the population in Texas. Though the majority of the elderly Texans live in urban areas, rural areas have a higher percentage of elderly relative to the local population. According to the 2000 Census, 13.1 percent of seniors age 65 and over in Texas live below the poverty level. Approximately 30% of all elderly households pay more than 30% of their income on housing with 14% paying more than 50% of their

9 Salary.com 10 Ibid. 11 Health and Nurses in Texas – The Future of Nursing: Data for Action (Vol. 3 No. 1. 2000. San Antonio, TX: The Center for Health Economics and Policy (CHEP), the University of Texas Health Science Center at San Antonio). 12 Texas Department of Housing and Community Affairs, Center for Housing Research, Planning, and Communications, 2005 State of Texas Low Income Housing Plan and Annual Report (Austin, TX: Texas Department of Housing and Community Affairs, 2004). 13 Ibid. 14 Ibid. 15 Ibid.


income on housing. Lower incomes combined with rising healthcare costs contribute to the burden of paying for housing.16

• There is a shortage of affordable housing in the extremely low, very low, low and moderate income brackets. This is primarily caused by the private sector’s concentration of development in larger metropolitan areas and targeting higher income individuals and families.17 Cities with populations between 20,000 and 50,000 have a particularly hard time accessing funds. They cannot access USDA funding and are too small to effectively compete for other funding opportunities.18

• According to the US Census Related Comprehensive Housing Affordability Strategy (CHAS) Data, there are approximately 2,903,671 people living in rural areas of Texas. Of these, 574,843 people or 20% are living below the poverty level; 83,454 low income households live with the cost burden of paying more than 30% of their income on housing expenses; 26,999 occupied units are “overcrowded”; and 5,211 units were found to have substandard conditions such as lack of piped water, utilities, and waste facilities.19

• Preservation of existing affordable and subsidized housing stock is an important element of providing safe, decent and affordable housing. The explosive population growth in the metropolitan areas as well as the lack of new construction during the late 80’s and early 90’s created a huge demand for housing at all income levels. Adding to this problem is the loss of units in the federally subsidized Section 8 portfolio, the USDA/Rural Development portfolio and the pools of tax credit units that have reached their 15 year affordability periods. The USDA/Rural Development portfolio contains smaller rural rental properties which, in many cases, represent the sole affordable housing stock in Texas’ smallest towns.20

• As of the most recent statistical information available, there were 2,676,060 renter occupied housing units in Texas. Eighty-four percent of these were constructed before 1990 with the highest production of rental housing (50.8%) built between 1970 and 1989. Therefore, the majority of rental housing stock in Texas is between 15-35 years old and may be in need of some type of moderate to substantial rehabilitation in order to preserve its functionality.21

The Corporation will address these pressing housing needs through the following single family, multifamily, and grant programs for 2006. The following summary of Corporation programs gives the history and accomplishments of our programs to date and a plan for

16 Texas Department of Community Affairs, 2005-2009 State of Texas Consolidated Plan (Austin, Texas, February 2005). 17 Texas Department of Housing and Community Affairs, Strategic Plan for Fiscal Years 2005-2009. 18 Texas Department of Housing and Community Affairs, Report on the 2004 Regional Advisory Committee Meetings on Affordable Housing and Community Services Issues, November 2004. 19 2000 U.S. CHAS Data, Texas Department of Housing and Community Affairs 20 Texas Department of Community Affairs, 2005-2009 State of Texas Consolidated Plan (Austin, Texas, February 2005). 21 2000 U.S. Census Data


achieving greater success with these programs in 2006. A few of the programs mentioned are mandated by the state legislature, as noted, and a few have been undertaken upon our own initiative to fulfill housing needs for identified underserved areas of the state.

TSAHC PROGRAM DESCRIPTIONS TEXAS PROFESSIONAL EDUCATORS HOME LOAN PROGRAM TEXAS FIRE FIGHTER AND LAW ENFORCEMENT OR SECURITY OFFICE HOME LOAN PROGRAM NURSING FACULTY HOME LOAN PROGRAM These Programs are the Corporation’s Single Family Mortgage Revenue Private Activity Bond Programs. The Programs were established by the Legislature in 2001, 2003, and 2005, respectively, and allocate a total of $55 million of the State's Ceiling for Private Activity Bond Cap for the exclusive purpose of making single-family mortgage loans to Texas Professional Educators ($25 million), Fire Fighters, Law Enforcement Officers, and Corrections Officers ($25 million), and Nursing Faculty ($5 million) who are first-time home buyers.

The Programs are available statewide on a first come, first-served basis, to first-time homebuyers who wish to purchase a newly constructed or existing home. Through each Program, eligible borrowers are able to apply for a 30 year fixed rate mortgage loan and receive 5 percent down payment assistance of the mortgage loan amount in the form of a grant. The programs are accessible to eligible borrowers by directly contacting a trained, participating mortgage lender.

The 2004 Professional Educator Home Loan Program fully originated the $25,000,000 bond fund allocation. In July 2005, the Corporation issued $25,000,000 in mortgage revenue private activity bonds for additional loans to professional educators, of which, $8,956,000 is already committed for new loans. Since its inception in 2001, the program has financed 418 homes for professional educators.

As of September 2005, the Fire Fighters and Law Enforcement or Security Officers Home Loan Program had issued $15,500,000 in loan commitments, which has or will finance 152 homes. The Nursing Faculty Home Loan Program was established by the Legislature in 2005. The Corporation plans to issue bonds to fund the program this year.

2006 IMPLEMENTATION PLAN The Corporation’s primary goal for 2006 will be to continue to develop a financing structure that minimizes the Programs’ mortgage interest rate and offers the best possible down payment assistance grant to the borrowers. Down payment assistance is especially critical when the spread between conventional mortgage rates and tax-exempt mortgage rates have reached historical lows. The Corporation will also continue to advertise and to receive input about the Programs by attending teacher, police officer, firefighter, home builder, real estate agent, and lender association conventions and trade shows in 2005 and 2006.


The eligibility for the Fire Fighter and Law Enforcement or Security Officer Home Loan Program was expanded by the Legislature in 2005 to include county law enforcement officers and to include corrections officers. As a result, the Corporation has and will continue to reach out to these newly eligible homebuyers through meetings with the Texas Department of Criminal Justice and county law enforcement organizations. The Corporation will also provide information to the nursing faculty centers across the state to let their educators know that they are now eligible for a home loan through the Nursing Faculty Home Loan Program. In addition, the Corporation will continue to train and develop relationships with mortgage lenders who represent the Programs to the borrowers.

AFFORDABLE HOMEOWNERSHIP PROGRAM FOR TEXAS One of the Corporation’s main initiatives is to provide housing opportunities to Texans that do not have comparable housing options through conventional financial channels. Many families throughout Texas seeking to purchase a home are not able to meet the traditional lending requirements and, up to now, have had no other option than to rent. In order to meet this need and provide deserving families with a financing alternative for achieving the American dream of homeownership, the Corporation developed the Affordable Homeownership Program for Texas (“Program”).

The Program, developed through a partnership between Ameriquest Mortgage Company (“Ameriquest”) and the Corporation, provides borrowers with an affordable mortgage financing option that will allow them the opportunity to achieve homeownership. As a result of this partnership, Ameriquest has committed up to $100 million dollars for mortgage loans and the Corporation has committed $1 million dollars for down payment assistance to the Program.

The Program was established to serve those individuals and/or families in Texas that have FICO scores between 525 and 610 and that are at or below 80% of the AMFI by providing them access to an affordable mortgage loan product and down payment assistance in an amount up to seven percent (7%) of the mortgage loan amount. In addition, the Program rewards borrowers who make timely mortgage payments with lower interest rates and lower mortgage payments. Borrowers will receive a 50 basis point (.5%) reduction in their mortgage interest rate for every 12 months of on-time payments. As a result, Borrowers can reduce their mortgage interest rate by up to two percent (2%) during the first 48 months of their mortgage loan.

The Corporation and Ameriquest believe home buyer education is an essential component to the success of home ownership. Under the Program, borrowers will be provided pre and post-closing Home Buyer Education Training by ACORN Housing. ACORN Housing is a national housing counseling organization, helping low and moderate income homebuyers and homeowners since 1986. Additionally, borrowers will have intervention assistance


available to them during the life of the mortgage loan. We believe this training and assistance is crucial to the success of this Program.

Since 2004, the Program has provided 36 loans to individuals and families who otherwise might not have achieved the dream of home ownership.

2006 IMPLEMENTATION PLAN The initial release of the Program in 2004 was limited to south Texas through a local affordable housing provider (CDC Brownsville). In 2005, the Corporation released the Program statewide and continues to market the program to local community development corporations, non-profits and other entities involved in affordable housing. The Corporation will also begin an aggressive marketing campaign in 2006, by starting a 1-800 phone number in conjunction with an on-line application system and through the issuance of press releases and other marketing materials.

MULTIFAMILY PRIVATE ACTIVITY BOND PROGRAM The Texas Legislature in 2003 allocated 10 percent of the multifamily private activity bond cap to the Corporation so that local governments could be more involved in assessing and addressing their own local multifamily housing needs and at the same time could use the expertise of the state to issue the bonds. The available amount for funding in 2005 was approximately $40 million, and a similar amount will be available for 2006. Nonprofit and for profit developers can use the funds to finance acquisition and rehabilitation or new construction of multifamily residential rental units across the state. Developers are encouraged to leverage the private activity bond funds by using Low Income Housing Tax Credits (LIHTC) available through TDHCA.

The Corporation’s Private Activity Bond program statute requires the Corporation to target areas with the greatest housing need that have expressed local community support for affordable multifamily housing. The statute also requires the Corporation to solicit proposals from developers to provide the specific housing development addressing the targeted housing need outlined in the request, whether for senior, rehabilitation, rural, migrant farm worker, or other specific housing need. Applications received in response to the request for proposal issued by the Corporation will be scored and ranked using criteria which analyzes financial feasibility and overall quality of the proposed Development. Tax-exempt private activity bond financing will be allocated to the highest-scoring proposal that meets the identified housing needs of the RFP, subject to available allocation.

The Corporation issued requests for proposals in 2005 for Arlington, Corpus Christi, and El Paso. The Corporation received an application for development under the Corpus Christi RFP. The development known as the North Side Manor Apartments was not induced due to federal subsidy factors that made the transaction financially infeasible.


2006 IMPLEMENTATION PLAN In previous years, the Corporation targeted multifamily housing by specific geographic areas based on local need and community support from local government. However, targeting specific geographic areas has limited the Corporation’s ability to meet the housing needs of the state and discouraged many developer organizations from applying. For the 2006 program, the Corporation is targeting specific areas of housing need for which current funding sources are insufficient or not readily available. The targeted areas of housing need might include targets such as rehabilitation, senior housing, rural housing pools, or migrant farm worker housing that would be solicited through a statewide request for proposal.

This new program focus is based on current research and information received during the two previous year’s solicitations. In 2004 and 2005 the Corporation solicited participation in the private activity bond program by sending letters to mayors of all cities with a population over 10,000 people and all county judges. Discussing the various needs with each interested city and county highlighted the diversity of needs for different areas of Texas. The larger metropolitan areas believed they were saturated with multifamily housing, but were interested in rehabilitation or redevelopment of existing multifamily housing that had fallen into disrepair. Cities with a lower population, generally not in urban areas, expressed interest in developing new multifamily housing to fill their affordable housing needs. However, addressing these needs on a geographic, city by city, basis was not practical. For instance, the development of affordable housing units in rural areas was requested, but a single rural development of approximately 40 units could not realistically be financed with bonds.

However, by pooling together several rural developments and using these economies of scale, a rural pool bond transaction could meet the financial feasibility test and would meet the needs of several rural communities. This need could be met in a specific “rural pool” request for proposal. Similarly, Corporation staff has identified senior housing and migrant farmworker housing as potential target areas for which specific requests for proposals could be issued.

For some of the targeted areas of housing need mentioned above, 4 percent tax credits and tax-exempt bonds together are not sufficient to provide a positive cash flow to developments in areas where the area median income is lower than the state average. Funding sources from outside these traditional financing methods must be obtained. Possible sources of funds may include monies from the HOME and Housing Trust Fund programs, USDA/Rural Housing Service, and grants from other interested groups specific to the housing need.

The Corporation will target areas of housing need in October and November of 2005 and will issue requests for proposals to meet those housing needs by January 2006. The deadline to turn in a proposal will be outlined in the specific request. We anticipate a submission deadline for all proposals between December of 2005 and March of 2006.


MULTIFAMILY 501(C)(3) BOND PROGRAM The Corporation's 501(c)(3) Multifamily Bond Program was created to finance the acquisition and rehabilitation, or new construction, of affordable multifamily housing units throughout the state of Texas. Unlike the Corporation’s PAB program, 501(c)(3) financing does not use volume cap allocation and applications can be considered year-round. Also different from the PAB program is that 501(c)(3) financing may not be used in conjunction with low income housing tax credits. Only qualified nonprofit developers, designated under the internal revenue code as 501(c)(3) organizations, are eligible to apply for 501(c)(3) financing.

In addition to providing safe, decent, and affordable rental housing to residents of the state of Texas, recipients of 501(c)(3) financing must adopt a dollar-for-dollar public benefit program, investing at least one dollar in rent reduction, capital improvement projects, or social, educational, or economic development services for every dollar of abated property tax revenue they receive.

In 2001 and 2002 the Corporation provided $487 million in financing for the preservation or creation of 7,700 units of affordable housing in the state of Texas. Since 2002 the Corporation has not considered applications or issued bonds under the 501(c)(3) program as a result of market changes and legislatively mandated changes requiring that any benefit of abated property tax must be transferred dollar-for-dollar into a public benefit program. In sum, the 501(c)(3) bond program has become inactive for many reasons, including the softening of the market for affordable housing in metropolitan areas, the fact that 4 percent tax credits cannot be used, and that abated property taxes cannot be used to pay off debt service.

2006 IMPLEMENTATION PLAN The Corporation will monitor market conditions and will reactivate the program if demand shows the need for this type of financing to create needed multifamily affordable housing. Non-profit developers may choose to apply under the Corporation’s Multifamily Private Activity Bond Program to be eligible for bond financing in addition to 4 percent tax credit equity.

MULTIFAMILY DIRECT LENDING PROGRAM The Corporation’s Multifamily Direct Lending Program provides permanent financing for the purpose of increasing and preserving the stock of affordable multifamily housing units throughout the state of Texas. The major focus of this program is to provide financing for smaller developments in rural and underserved areas of the state where bond financing is not practical. The Corporation’s ability to offer permanent financing is facilitated through existing relationships with real estate investment companies that invest in affordable multifamily housing. The Community Development Trust, Inc. and the Federal Home Loan Bank of Dallas have been the Corporation’s principal partners for this program.


In 2003 and 2004, the Corporation provided permanent financing in the aggregate amount of $5,628,000 for five (5) separate developments in Odessa, Wichita Falls, Big Spring, Brady, and Stephenville. These developments have provided 412 units of affordable housing to low income Texans.

2006 IMPLEMENTATION PLAN The Corporation is committed to administering and marketing our capabilities under this program in 2006. To this effort, the Corporation will market the program on its website and at public hearings across the state and will provide information to current and previous clients of the Corporation. In addition, our principal partners in this program will refer Texas based clients to the Corporation to meet their financing needs on the local level. Since the Federal Home Loan Bank requires a 25 percent risk sharing component on each loan, the Corporation will pursue this program primarily through the Community Development Trust, Inc. so as not to restrict the Corporations ability to use available financial resources for other programs.

ASSET OVERSIGHT AND COMPLIANCE Asset Oversight of properties is required by many issuers of bonds, including the Corporation and TDHCA, to monitor the financial and physical health of a property and ensure that the bonds can be repaid at the rate required in the bond documents. Compliance monitoring ensures that the borrowers are providing the required number of affordable units to income eligible households and that quality resident services are provided to all residents of the property. Periodic on-site inspections and resident file review of affordable units ensure that all federal requirements relating to the tax-exempt status of the bonds are strictly adhered to.

The Corporation is currently providing asset oversight for 86 properties and compliance oversight for 38 properties. The Corporation staff performs yearly on-site compliance reviews and at least yearly on-site asset oversight reviews for these properties.

2006 IMPLEMENTATION PLAN The Corporation will continue to provide asset oversight and compliance monitoring for our current portfolio. The Corporation will also work to contract with other entities to expand our asset oversight and compliance monitoring portfolio of business. Compliance monitoring and asset oversight revenues would continue to be used to fund current single family and multifamily programs.

GRANT PROGRAM Although the Corporation has been a 501(c)(3) nonprofit entity since 2001, the Corporation has not actively pursued fundraising and grant opportunities. However, the Corporation provided the Single Family Professional Educator, Fire Fighter, Police Officer and Security Officer Programs $400,000 from its cash reserves for down payment assistance in 2002,


$200,000 in 2004, and over $400,000 in 2005. For the 2004 Private Activity Bond Program the Corporation provided from cash reserves a $500,000 soft second loan for the Providence at Marshall Meadows development in San Antonio. The Corporation does not receive state appropriations and cannot sustain this level of subsidy for its programs and continue to stay in business. Both of these experiences, as well as reviewing other critical unmet housing needs identified by TDHCA and the Corporation, have prompted us to pursue the creation of a Grant Program to fund the following programs: Single Family Down Payment Assistance, Multifamily Gap Financing Assistance, Homebuyer Education, and an Interim Construction and Land Acquisition Program.

2006 IMPLEMENTATION PLAN The Corporation’s mission of affordable housing matches many foundation and grant objectives, and provides multiple opportunities for corporate sponsorship and cross-promoting. In 2006 the Corporation will create a Fundraising and Grant Program Action Plan that includes specific multifamily and single family needs, matches them with appropriate corporate, foundation, or grant resources, and establishes activities and a timeline within which to pursue those resources.

For instance, the Corporation will solicit corporate partners in the home improvement, home appliance, and large retail business sectors for down payment assistance for our Professional Educator, Fire Fighter, Police Officer, Security Officer, and Nursing Faculty bond programs. We will request a grant for down payment assistance and coupons for participating borrowers, such as $50 off a refrigerator, or a $100 coupon to the home improvement store. The Corporation will also work with national computer manufacturers to contribute a computer to every teacher, firefighter, police officer, corrections officer, or nurse educator that closes a loan through our program, and negotiate with telecommunications companies to contribute phone/internet service packages. These are just a few of the fundraising activities and initiatives that the Corporation will undertake in 2006.

In addition, the Corporation will apply for HUD grants and other government grants that target rural housing, or other housing need that the Corporation targets for its Private Activity Bond Program.

Proposed 10-14-05

Texas State Affordable Housing Corporation Appendix A

Scoring Criteria

Financial Feasibility

A. The lowest cost per unit (includes direct construction hard costs, site work, contingency, contractor profit, overhead and general requirements) of a proposed housing development that meets the specifications in the Request for Proposal (RFP). The minimum hard cost per unit must meet the requirements of the TDHCA QAP. 20 points total 20 points – lowest per unit construction cost 15 points – next lowest per unit construction cost 10 points – next lowest per unit construction cost 5 points – next lowest per unit construction cost 0 points – next lowest per unit construction cost

B. The proposed unit rents meet or exceed the low-rent requirements in the RFP.

20 points total 20 points – meets rent requirements 0 points – does not meet rent requirements

C. The proposal meets the low-income set aside requirements in the RFP for the proposed

housing development. 20 points total 20 points – meets minimum low-income set aside requirements 0 points – does not meet minimum low-income set aside requirements

D. A strong pro-forma, as evidenced by a high debt service coverage ratio (DSCR). The DSCR should be 1.10 to 1.30 in the first year of stabilized operations and maintained no lower than 1.10 over the 30-year operating proforma. 20 points total 20 points – 1.25 to 1.30 DSCR 10 points – 1.16 to 1.24 DSCR 5 points – 1.11 to 1.15 DSCR 0 points – 1.10 DSCR

E. The reasonableness of any deferred developer fees as compared to other submissions and/or similar projects. 15 points total 15 points – lowest percent of developer fee deferred 10 points – next lowest percent of developer fee deferred 0 points – next lowest percent of developer fee deferred

F. The financial participation of other entities, specifically, the highest proposed grant contribution (excluding rental assistance) by any entity relative to other submissions. 10 points total 10 points – highest amount of grant proposed 5 points – highest amount of grant proposed 0 points – highest amount of grant proposed

Proposed 10-14-05

G. The financial participation of other entities, specifically, the lowest proposed cash value contribution by TSAHC relative to other submissions. 10 points total 10 points – lowest amount of financial assistance proposed 5 points – next lowest amount of financial assistance proposed 0 points – next lowest amount of financial assistance proposed

H. The financial participation of other entities in the form of a rental assistance operating subsidy such as HUD Section 8, Rural Development Rental Assistance or other funds specifically set aside by the developer for rental assistance. To qualify for points, funds set aside out of cash flow to be used for rental assistance should be allocated for a period of ten years and identified in the proforma as such. 20 points total 20 points – 80-100% of the units have rental assistance 15 points – 50-79% of the units have rental assistance 10 points – 25-49% of the units have rental assistance 5 points – 5-9% of the units have rental assistance

Development Characteristics

I. The Development provides quality resident services to all households at the Development

as outlined in the TSAHC Resident Services Program Guidelines (Appendix B). 15 points total 10 points – maximum of 10 points with one point for each service provided 5 points- additional 5 points for certification by respondent that a Resident Council will be formed within six months of achieving stabilized occupancy (90% occupancy)

J. The Development will have staff and accommodations to provide resident services on-

site or will budget for transportation to an off site location. 20 points total 10 points – Resident Services Coordinator position in budget and certification by owner that this position will be posted and/or filled within six months of achieving stabilized occupancy (90% occupancy) 10 points- additional 10 points for submitting a plan which identifies space at the property to provide the services identified in Section I. and/or describes how the services are to be provided to the residents (i.e. transportation) if off site

0 points – no space set aside for resident services and no plan for transportation off site

K. The Development utilizes green building in the construction/rehabilitation of the property and is working to promote energy efficiency and green building initiatives at the property. 10 points total 10 points – letter from green building organization approving proposed plan of action and budget for green building initiative 5 points – narrative of green building and/or energy efficiency methods used by the developer which are consistent with line item expenses identified in the Development and/or operating budget.

0 points – no energy efficiency or green building techniques in proposal

Proposed 10-14-05

L. The Development is located near appropriate amenities that can be easily accessed by the tenant population (elderly, special needs, families, etc.). To count for points, the amenity must be located within a one or two mile radius of the Development (as specified in the RFP) and identified on a local area map. For purposes of this section, amenities include: grocery store, pharmacy, convenience store, department/retail store, bank, restaurant, indoor or outdoor recreation facilities, hospital/medical clinics, public schools, senior center, daycares, and social service offices. 10 points total 10 points – Six (6) or more local amenities nearby 5 points – Three (3) or more local amenities nearby

0 points – Fewer than three (3) amenities nearby

M. The Development provides security or courtesy officer at the property. 10 points total 10 points – Certification that security or courtesy officer will be provided and plan to compensate this position (consistent with budgeted expenses or rent concessions)

0 points – No security or courtesy officer in operation plan

Experience and Local Support

N. The proposal demonstrates the experience and qualifications of the Respondent and team members as evidenced by the completion of multifamily housing rental developments using bond financing and/or Low Income Housing Tax Credits (LIHTC). 20 points total 20 points – 4+multifamily developments completed using bond financing and LIHTC 15 points – 1-3 multifamily developments completed using bond financing and LIHTC 10 points – 4+ multifamily developments completed using bond financing or LIHTC 5 points – 1-3 multifamily developments completed using bond financing or LIHTC 0 points – no multifamily developments completed using bond financing or LIHTC

O. Experience working on affordable housing developments with cities or other local government entities, as evidenced by the receipt of HOME funds, CDBG funds, PHA funds, real estate, or some other substantial contribution from the local gov’t entity. 10 points total 10 points– 4+ multifamily projects completed with the participation of a local gov’t entity 5 points – 1-3 multifamily projects completed with the participation of a local gov’t entity 0 points – 0 multifamily projects completed with the participation of a local gov’t entity

P. The development team has provided for Historically Underutilized Business (HUB)

participation on its last two developments. 10 points total 10 points – HUB participation 0 points – no HUB participation

Q. The financial capacity of the Respondent has been established, as evidenced by an

absence of any negative findings on audited financial statements (that have not been explained to the Corporation’s satisfaction). 10 points total 10 points – financial capacity of the Respondent or Guarantor established 0 points – financial capacity of the Respondent or Guarantor not established

TOTAL POSSIBLE POINTS: 250


Request for Proposals for

Multi-Family Developers for the New Construction or Rehabilitation of

Senior Multifamily Housing in Texas using Tax-Exempt Bond Financing


1005 Congress Avenue, Suite 500 Austin, Texas 78701

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Request for Proposals

The Texas State Affordable Housing Corporation (The “Corporation”) is requesting proposals (the “RFP”) from qualified firms (the “Respondents”) interested in working with the Corporation for the new construction or substantial rehabilitation of a senior multifamily Development in any area of the State of Texas using private activity bonds and low income housing tax credits (HTC). For the purpose of this RFP, a qualified senior development will be defined as:

A Development which meets the requirements of the federal Fair Housing Act and: a) Is specifically designed for and occupied by persons who are 62 years of age or older; or b) Is designed and operated for occupancy by at least one person who is 55 years of age or

older per Unit, where at least 80% of the total housing units are occupied by at least one individual who is 55 years of age or older; and where the Development owner publishes and adheres to policies and procedures which demonstrate an intent by the owner and manager to provide housing for individuals 55 years of age or older.

Questions about the RFP can be directed in writing to: Ms. Cari Garcia Texas State Affordable Housing Corporation


Telephone (512) 477-3555, Ext. 413 Fax (512) 477-3557

Email: [email protected] All questions and responses will be posted on the Corporation’s web site (www.tsahc.org) within the Multifamily Bond Programs section. Questions and Answers from the previous program years that are applicable to the 2006 Program will be posted in that section as well. New Questions will be accepted until 5:00 p.m. on Friday, January 6, 2006. Respondents will be held responsible for information posted to the website related to the RFP. Submissions are due by not later than 2:00 P.M. Central Standard Time on Friday, January 20, 2006.

General Information The Corporation is interested in contracting with a firm that is experienced, qualified, and interested in partnering with the Corporation for the new construction or rehabilitation of senior apartments in Texas. If a proposed Development is approved by the Corporation, the Texas Attorney General, and (if required) the Texas Bond Review Board, the selected Respondent will receive a tax-exempt private activity bond allocation that the Corporation has reserved specifically for the selected Development. In addition, the selected Respondent will be eligible to apply for 4 percent HTC allocation through the Texas Department of Housing and Community Affairs (TDHCA).

The Development and the proposed financing must comply with all state and federal requirements, including without limitation the Internal Revenue Code and related regulations and requirements relating to low income housing tax credits.

mailto:[email protected]

http://www.tsahc.org

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Detailed Development Description

Requirements: 1) Up to three (3) developments may be pooled together under one bond issuance, but the total bond

request must not exceed $13.3 million dollars. (If additional properties could be added to the pool, they should be presented in a secondary proposal to be funded in the event that other RFPs do not receive qualified proposals.)

2) Submitted proposals must meet local standards for multi-family development found in the City’s respective zoning ordinances.

3) Proposals must comply with requirements of the Qualified Allocation Plan of TDHCA relating to an issuance of tax-exempt bond financing.

4) Respondents must submit evidence of local support in the form of a Resolution (see Submission Requirement #8).

Proposals not meeting the requirements above will not be scored or presented to the Board.

The Roles of the Corporation The Corporation may assemble a team of consultants for legal and financial planning to assist in the implementation of this initiative, and to the maximum extent, their costs will be paid from the tax-exempt bond and tax credit financing. Upon selection, the Respondent is responsible for preparing a HTC application for 4 percent tax credits and timely submitting it to TDHCA and providing a copy of such application to the Corporation, when completed. The Corporation will assume the following roles for the selected Development:

A. Bond Issuer. Private activity bond volume cap funds from the Corporation will be made available for use by the Respondent for the construction and permanent financing of the Development. The Corporation has been given volume cap allocation by statute that will be used for the selected Development. The Corporation is not a participant in the State of Texas private activity bond lottery administered by the Bond Review Board.

B. Asset/Compliance Manager. The Corporation will monitor and enforce the terms of all Regulatory and Operating Agreements for any multi-family units considered “affordable.” The Corporation will receive a fee for this service that will be paid from the project revenues.

C. Management. The Corporation does not intend to have significant involvement in the day-to-day operation/management activities; aside from asset oversight and compliance monitoring. The Respondent will negotiate the terms of the management of the property, which is expected to be done by an experienced property management firm. The Corporation must approve the initial selection of a management company and all subsequent changes in management agent during the term while the bonds are outstanding.

Respondent’s Role The responsibilities of the selected Respondent(s) will include, but are not limited to, the following:

• Insure that the Development meets all of the Corporation’s requirements for affordable multifamily financing and that the rehabilitation complies with local codes and requirements.

• Undertake predevelopment activities.

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• Develop architectural plans consistent with this RFP and guidelines, and obtain City and other required approvals and permits.

• Gain local community support for the proposal.

• Develop and manage an implementation schedule.

• Obtain additional leveraged funds from other sources, if needed.

• Prepare and submit a Low Income Housing Tax Credit application to TDHCA for 4 percent tax credits.

• Develop a project budget.

• Coordinate all development activities, including reporting and budget requirements, as required by each jurisdiction.

• Determine a general management structure, prepare a management plan for the property, and recommend a property manager, subject to approval by the Corporation.

• Provide all necessary financial guarantees and assurances to the lenders and tax credit investors.

• Solicit construction bids and enter into a contract for construction.

• Oversee construction and ensure completion in a timely manner.

• Obtain commitments from lenders and tax credit investors for financing the Development, such commitments to be with parties acceptable to the Corporation.

• Deliver units consistent with Federal, State, and City requirements and guidelines.

• Maintain compliance with all regulatory and operating agreements.

Income Structure and Use Restrictions

The Corporation seeks to provide housing to a mix of eligible households, including the low and very low income. A Respondent will be disqualified from consideration if any of the requirements below are not met. At a minimum, all proposals will be required to meet the following income and rent restrictions:

(a) Minimum Income Restrictions. A minimum of twenty percent (20%) of the units in a Qualified Residential Rental Project must have Gross Rents that are restricted to households with incomes no greater than fifty percent (50%) of the Area Median Income (“AMI”), adjusted for family size, or at least forty percent (40%) of the units in the project must be affordable to families with incomes at or below sixty percent (60%) of the AMI, adjusted for family size.

(b) Rent Restrictions. Gross monthly rent charged on an income restricted unit will not exceed 30% of the applicable AMI including utility allowances for each unit size.

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(c) Minimum Term of Restrictions. Income and rent restrictions must be maintained for a qualified project period to be determined in accordance with federal and state law.

All applications must comply with the TDHCA Qualified Allocation Plan and Rules pertaining to the Low Income Housing Tax Credit Program in effect at the time of response in order to apply for 4% tax credits.

Development Design Review The Development must obtain all required City permits including all building permits and must be appropriately zoned and platted.

Submission Requirements

The objective of the RFP is to determine respondent interest and to consider the selection of a qualified respondent. Submissions to this RFP must include brief summary responses to the following in the order listed along with each section tabbed. If any item listed below is not included in the submission, please provide a written explanation behind the tabbed section. The Corporation reserves the right to request additional information upon review of initial submissions.

1. Title page & Application Form

2. Maps: A location map showing the location and approximate outline of the tracts involved along with the location of any and all amenities, for which the respondent is claiming points, which are located near the Development. To be eligible for points, amenities should be located within a one mile radius of a Development in urban/exurban areas and a two mile radius of the Development in rural areas. A zoning map showing the existing zoning of the property and surrounding areas, demonstrating that the Development, as proposed, is zoned for the intended use, or a letter indicating that a zoning change has been requested. Zoning must be approved for the Development within 45 days of receiving a reservation for allocation of bond cap.

3. Site Control: Evidence that the Respondent either (i) owns the site for the proposed Development

or (ii) has a contract or an option to purchase the Development site covering the time period that the application is under review or that has an “option to extend” clause covering the same time period.

4. Audited financial statements of the Respondent for the last three years. These statements should

demonstrate the financial capacity of the Respondent, or the entity that would most likely be responsible for executing all applicable guarantees (“Guarantor”). The Respondent shall fully explain any negative audit findings. Provide the names of three banks or other financial institutions that can provide business references and the names and telephone numbers of contact persons. Respondents should be aware that the Corporation is subject to the provisions of the Texas Public Information Act, and that information received by the Corporation may be subject to open records requests.

5. An estimated construction schedule. If rehabilitation is proposed, submit a physical condition assessment report (“PCA”) completed on the property which confirms the cost of rehabilitation. The PCA must not be older than 6 months prior to the application date.

6. Submit a market study showing the need in the area for new construction or rehabilitated

affordable housing as proposed.

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7. Photographs of the proposed site for new construction and/or of the Development which identify

the need for rehabilitation. 8. Evidence of local support for the Development from the City/County in the form of a resolution

of support by the City Council and/or County Commissioner’s Court. The resolution must clearly state that local officials support the Development as proposed. (Proposals will not be scored or presented to the Board without this submission.)

9. Provide an organizational chart of the proposed ownership structure and identify the various legal

entities to be involved in the construction, ownership, operation, and management of the improvements and the nature of their involvement. With respect to the development entity and/or the management agent, a precise description of any joint venture arrangements, including respective equity and decision making interests shall be provided. Describe the roles and responsibilities of each team member on this Development and provide resumes that include qualifying experience. Provide certification by the Respondent stating the nature of any relationship, business or otherwise, (for example, common or related board members) between or among the team members, including the Respondent, the proposed management company (if acquisition), the seller(s) of property, the underwriter or placement agent, and any other party related to the transaction.

10. Certifications:

a. Certification by the Respondent and Respondent’s principal(s) that they are in good

standing with the Corporation, TDHCA, and the City, do not have any outstanding compliance issues with the Corporation, TDHCA, or the City, and have not had any compliance issues in the last three years, or full disclosure of any problems and issues. As part of the evaluation process, the Corporation will request information from TDHCA’s Compliance Division and review any internal compliance records on each principal of the Applicant.

b. Certification by the Respondent and any underwriter or placement agent for the bonds

stating that they have read and understand the Corporation’s Guidelines and the RFP and acknowledging (a) that all exceptions to the Guidelines and RFP must be requested in writing by the Applicant with an explanation of the need for the exception, (b) that all exceptions to the Guidelines and RFP are subject to the review and/or approval by the Board of Directors of the Corporation, and (c) that complying with the Guidelines and RFP does not guarantee approval of the transaction by either the Corporation’s Board of Directors or the Texas Bond Review Board.

c. Certification by the Respondent and Respondent’s principal(s) that they have not been

involved during the past five years and are not currently involved in litigation regarding the development and/or financing of a property under the Corporation’s or TDHCA’s multifamily bond programs, the LIHTC program, or any City program, or full disclosure of any litigation.

d. Certification by the Respondent and Respondent’s principal(s) that they do not have

outstanding issues with the Internal Revenue Service regarding tax-exempt bond financed or LIHTC properties, or full disclosure of any outstanding issues.

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e. If claiming points for providing a security or courtesy officer on site, the respondent must submit a certification stating that the proposal contains such a provision and a description of the budgeted line item that will compensate this expense.

11. If applicable, describe and provide supporting evidence (e.g., certification by a governmental

agency) of the status as a Historically Underutilized Business (HUB), minority business enterprise (MBE) and/or women owned business enterprise (WBE), or, if applicable, describe the Respondent’s or the general contractor’s history of utilizing HUB’s.

12. Describe past experience working on affordable housing developments with TDHCA, the

Corporation, and local government entities, including cities or local housing finance corporations. Include a description of the work, and name and telephone number for a contact representative at each (maximum of 4 examples for each government entity with which you worked). The submitted documents must support points claimed for this item under the scoring criteria.

13. Describe experience in the development of properties using tax-exempt bond financing and/or

LIHTC. Include the name and address of the property(s), property description, whether new construction or acquisition and rehabilitation, whether 9% or 4% LIHTC and allocation year, description of the participation of the Respondent, identification of any participation by a housing- related nonprofit or City or other public entity where the property is located, and the name and telephone number of a reference person(s) for each property (maximum of 4 examples of properties completed using both LIHTC and tax-exempt bond financing, and if no properties completed using both financing methods, list a maximum of 4 properties completed using either tax-exempt bond financing or LIHTC and specify which was used). The submitted documents must support points claimed for this item under the scoring criteria.

14. Financial Spreadsheets:

a. Rent/Expense Analysis identifying the proposed rent structure and any components to

this structure such as utility allowances and source, vacancy and collections loss and other exceptions to the rent and secondary income of the property. All operating expenses should be identified and included to determine the Net Operating Income of the property and financial ability to repay bonds in the amount required. For pooled transactions, information should be submitted for each property.

b. Development Cost Schedule identifying all anticipated Development costs associated

with the transaction in consistency with the Sources and Uses of Funds report. For pooled transactions, information should be submitted for each property.

c. 30-year Operating Proforma which substantiates that the property will maintain a

minimum debt coverage ratio of 1.10 over the 30 year period. Any deferred developer fee proposed in the transaction should be shown in the proforma as fully repayable within 10 years. For pooled transactions, information should be submitted for each property along with a combined proforma identifying the entire cross collateralized transaction.

d. Sources and Uses of Funds Schedule for the bond transaction that identifies by name all

companies or individuals to receive payments, including, but not limited to, developer’s fees, real estate commissions, underwriting fees, operating working capital (if any) and borrower’s working capital(if any), and should specify whether the payments will be from bond proceeds or other proceeds.

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e. Operating Statements for each property consisting of the previous twelve (12) consecutive months ending not more than three (3) months from the date of submission; the two most recent consecutive annual operating statement summaries; and a rent roll not more than six (6) months old at the time of response submission. (rehabilitation only)

15. A narrative of the financing plan which clearly identifies the amount of outside resources

necessary to make the Development financially feasible, if applicable, as well as the amount of tax-exempt volume cap allocation and Low-Income Housing Tax Credits and other private resources that will likely be available for the Development. The plan should also identify any anticipated cash investment by the Respondent.

16. Commitment letters from all financial entities (including rental assistance and grant funds) involved in the financing of the proposed development. Commitment letters should be consistent with the amount of funds on the sources and uses form. Verification of rental assistance in the form of an approved contract between the proposed ownership entity and the provider.

17. Provide a list of all properties for which the Respondent or Respondent’s principals have received TDHCA housing construction or rehabilitation funding. Please list the property name, the name of the legal owner of the property, the type of funding, and the city where the property is located.

18. A resident services plan which clearly identifies the resident services to be provided at the Development. The plan must state how services will be determined, who will be providing the services, transportation arrangements (if applicable), and available/proposed space to be used for the provision of resident services. The narrative must support points claimed for these items under the scoring criteria.

19. If the Development utilizes green building in the construction/rehabilitation of the property, the response must contain a letter or certification from the green building organization approving the proposed plan of action and budget. If the Development is proposing specific items to promote energy efficiency, the proposal must contain a narrative of the energy efficiency methods proposed. All green building and/or energy efficiency features identified should correspond with line items expenses identified in the development and/or operating budget. Information in this section must support points claimed for these items under the scoring criteria.

20. A copy of the tax credit application to the Texas Department of Housing and Community Affairs, as soon as it is submitted.

One response should be submitted for the entire proposal. If the response includes more than one property, there are various sections of the response that are property specific and should be submitted for each property. These items may include but are not limited to. Property Specific Submissions • Application Form • Maps • Site Control (unless all properties are contained within one purchase agreement) • Market Study • Photographs of the Development • Evidence of local support • Financial Spreadsheets (by property and as pooled, if applicable) • Resident Services Plan

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• Housing Tax Credit Application • Green Building Information (if applicable)

Response Submission and Approval Procedures Response Filing Requirements A Respondent desiring to respond to this RFP shall complete and file with the Corporation one (1) original and five (5) copies of the RFP response (the “Response”). The Response (original and five copies) shall be filed with the Corporation by mailing or delivering the same to the following address:

Ms. Cari Garcia Texas State Affordable Housing Corporation 1005 Congress Avenue, Suite 500 Austin, Texas 78701 (512) 477-3555, Ext. 413 (512) 477-3557 (Fax)

Preliminary Official Action. Upon compliance with the response requirements set forth in the RFP, the Corporation will

conduct a preliminary review of all Responses. If all of the Response requirements are met and the proposed Development meets the Corporation’s purposes and guidelines, the Development will be scored by the Corporation in accordance with the criteria identified in Appendix A. The Applicant will be notified in writing of any deficiencies identified in the application and will be provided a timeframe to correct noted deficiencies. If the deficiencies are not corrected to the satisfaction of the Corporation within the allotted timeframe, the application will not be considered by the board for allocation and an alternate application will be underwritten.

The Corporation’s Board of Directors (the “Board”) will have an opportunity to call any

Respondent before the Board (at the Board’s discretion) to review the following items: • The amount of volume cap that will reasonably support the financing structure

(recognizing the limits of the Corporation’s allocation); • Evidence of community support for the Development; • Qualifications of Development team; • Evidence of financial feasibility of the Development and cost efficiency of bond

financing structure – The Corporation reserves the right to impose a cap on any volume cap requests;

• Evidence of commitment of all long term development financing sources; • Evidence of long term affordability of rents for persons with low income; • Evidence and support of adequate market for the units; • Demonstration that the Development will not adversely impact existing affordable

housing properties in the identified market area; and • Other information relating to the RFP, the proposed Development, or the Respondent.

The Corporation reserves the right in its sole discretion to modify, suspend or amend this

program at any time, with or without further notice to any interested party. All costs incurred in the response or development process are the sole responsibility of the Respondent. All decisions of the Corporation are subject to such additional conditions, restrictions and requirements as determined by the Corporation in its sole discretion. In addition, the Corporation’s selection of

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Developments for possible allocation of private activity bond cap is subject to final allocation approval by the Texas Bond Review Board.

At the same Board meeting at which oral presentations are made, the Board may select

Development(s) and alternate Developments based on the final scores of the Responses. The Corporation reserves the right not to approve any Responses, even one that is awarded the most points in the initial or final scoring of the Responses. The Corporation also reserves the right to approve more than one Response. After the Developments are chosen, the Corporation, in coordination with the Respondent(s), will hold the required TEFRA hearings.

At the Board’s next meeting following the TEFRA hearing for a Development, the Board may

take preliminary official action to adopt an inducement resolution evidencing the Corporation’s intent to issue obligations with respect to the Development, if all the requirements set forth herein are met and the public comment at the TEFRA hearings shows sufficient support for the Development. In order for the Board to take preliminary official action, the preliminary review of the Response must demonstrate with reasonable certainty that:

(a) the Response, the obligations, and the Development will qualify for final approval by the Corporation in accordance with the RFP and the requirements set forth in Appendix C; and

(b) all governmental approvals with respect to the obligations, the HTC, and the

Development will be obtained.

If the Corporation does not grant preliminary approval of the Response, the Corporation will so advise the Respondent. Any preliminary official action of the Corporation should not be construed as an indication as to the marketability of obligations, or as the final approval of the Development by the Corporation, its Financial Advisor or Bond Counsel. Rather, it is an indication that the Corporation will attempt to issue its obligations for the Development subject to, (i) a readiness to proceed by the Respondent with financing structure approval process, (ii) the Respondent’s continuing compliance with these Regulations and cooperation in providing any and all requested information to the Corporation, (iii) approval by the Texas Bond Review Board of the sale of obligations, (iv) market conditions and terms acceptable to the Corporation and to its staff and consultants, and (v) acceptable evidence of local support for the Development and approval by the Texas Attorney General of the issuance of the obligations.

AFTER THE CORPORATION’S ADOPTION OF THE INDUCEMENT RESOLUTION, IT IS THE RESPONDENT’S RESPONSIBILITY TO PROCEED WITH REASONABLE DISPATCH TO COMPLETE THE BOND FINANCING PROCESS IN A TIMELY MANNER, INCLUDING, BUT NOT LIMITED TO, THE PAYMENT OF ANY FEE DEPOSITED AND THE PROVISION OF REQUIRED INFORMATION, DOCUMENTS, ETC. NECESSARY TO PROCEED.

See Appendix C for a detailed discussion of these items:

I. Subsequent filing requirement, public hearings and document preparation II. Final Approval and Closing III. Sale of Bonds IV. Fees and Other Costs V. Miscellaneous

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Appendix A Scoring Criteria


A. The lowest cost per unit (includes direct construction hard costs, site work, contingency, contractor profit,

overhead and general requirements) of a proposed housing development that meets the specifications in the Request for Proposal (RFP). The minimum hard cost per unit must meet the requirements of the TDHCA QAP. 20 points total 20 points – lowest per unit construction cost 15 points – next lowest per unit construction cost 10 points – next lowest per unit construction cost 5 points – next lowest per unit construction cost 0 points – next lowest per unit construction cost



C. The proposal meets the low-income set aside requirements in the RFP for the proposed housing

development. 20 points total 20 points – meets minimum low-income set aside requirements 0 points – does not meet minimum low-income set aside requirements



F. The financial participation of other entities specifically, the highest proposed grant contribution (excluding rental assistance) by any entity other than TSAHC, relative to other submissions. 10 points total 10 points – highest amount of grant proposed 5 points – highest amount of grant proposed 0 points – highest amount of grant proposed

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I. The Development provides quality resident services to all households at the Development as

outlined in the TSAHC Resident Services Program Guidelines (Appendix B). 15 points total 10 points – maximum of 10 points with one point for each service provided 5 points- additional 5 points for certification by respondent that a Resident Council will be formed within six months of achieving stabilized occupancy (90% occupancy)

J. The Development will have staff and accommodations to provide resident services on-site or will

budget for transportation to an off site location. 20 points total 10 points – Resident Services Coordinator position in budget and certification by owner that this position will be posted and/or filled within six months of achieving stabilized occupancy (90% occupancy) 10 points- additional 10 points for submitting a plan which identifies space at the property to provide the services identified in Section I. and/or describes how the services are to be provided to the residents (i.e. transportation) if off site




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Q. The financial capacity of the Respondent has been established, as evidenced by an absence of any

negative findings on audited financial statements (that have not been explained to the Corporation’s satisfaction). 10 points total 10 points – financial capacity of the Respondent or Guarantor established 0 points – financial capacity of the Respondent or Guarantor not established


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APPENDIX B

TSAHC Resident Services Program Guidelines It is the Texas State Affordable Housing Corp.’s goal to have the nation’s leading Resident Services Program. To reach this goal, and better serve your residents, we need your help on site. TSAHC has created basic guidelines and report systems to help with this process. The following is a list of activities/courses that can be implemented. If you are interested in starting an activity or course that is not on the list, make sure that it will encourage economic self sufficiency and/or promote homeownership opportunities.

• Career Services 1. Computer Literacy 2. GED Classes 3. Job Skills/Training 4. Resume/ Job Search Workshop 5. Job Fair

• Children’s Services 1. After School Care 2. Swimming Lessons 3. On-site Daycare 4. On-site Tutoring Sessions 5. Performing Arts 6. Halloween Safety 7. Site library

• Community Awareness 1. Crime Watch 2. Self Defense Course 3. Child Id/Fingerprinting Program 4. Fire Safety 5. Domestic Violence Shelter/ Programs 6. Host Support Groups Such as AA, Anger Management, etc. 7. Community Gardens 8. Community Service Activities (i.e. Habitat for Humanity)

• Domestic Skills

1. Budgeting 2. Tax Prep. Courses 3. Low Cost Healthy Cooking 4. Organization Classes 5. Cleaning Supply Safety

• Medical and Health Services 1. Basic First Aid and CPR 2. Caring for the Disabled 3. Health and Screening Services 4. HIV/AIDS Classes

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5. Vaccinations/ Flu Shots 6. Weight Lose Club 7. Diabetes/ Heart Disease Courses 8. Babysitting Safety Courses

• Personal Development 1. Counseling Services 2. Credit Counseling 3. English as a Second Language Courses 4. Home Ownership Counseling 5. Parenting Classes 6. Anger Management Courses 7. Family Counseling

• Transportation Services

1. Grocery Store 2. Library 3. Medical Visits 4. Cultural Events

Inappropriate activities include children’s movie time, patio decorating contests, gambling trips, resident parties, Easter Egg Hunts or other activities along these lines. Properties are welcome to offer these activities but they will not count towards fulfilling the Resident Services obligation.

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APPENDIX C I. Subsequent Filing Requirements, Public Hearings and Document Preparation

1. Subsequent Filing Requirements. Prior to review of the Response for final approval by the Corporation, and prior to review by the Texas Bond Review Board, the Respondent may file such additional documents or statements in support thereof as the Respondent shall consider relevant and appropriate and shall file the following:

(a) such additional information as is requested by the Corporation, the

Financial Advisor, or Bond Counsel; (b) a proforma copy of any official statement, prospectus, or other offering

memoranda, through the use of which the proposed obligations are to be offered, sold, or placed with any lender, purchaser, or investor, which offering, sale, or placement material shall contain prominent disclosure substantially to the effect that:

(i) neither the Corporation nor the State has undertaken to review or

has assumed any responsibility for the matters contained therein except solely as to matters relating to the Corporation and to a description of the obligations being offered thereby;

(ii) all findings and determinations by the Corporation and the State,

respectively, are and have been made by each for its own internal uses and purposes in performing its duties under the legislation enabling the Corporation and these Regulations;

(iii) notwithstanding its approval of the obligations and the

Development, neither the State, nor the Corporation endorses or in any manner, directly or indirectly, guarantees or promises to pay such obligations from any source of funds of either or guarantees, warrants, or endorses the creditworthiness or credit standing of the Respondent or of any Guarantor of such obligations, or in any manner guarantees, warrants, or endorses the investment quality or value of such obligations; and

(iv) such obligations are payable solely from funds and secured

solely by property furnished and to be furnished and provided by the Respondent and any Guarantor and are not in any manner payable wholly or partially from any funds or properties otherwise belonging to the Corporation or the State.

2. Public Hearings and Meetings. The Corporation is required to hold certain

public hearings and meetings prior to final approval by the Corporation’s Board and by the Texas Bond Review Board. With respect to the public hearing required under federal tax law by the Tax Equity and Fiscal Responsibility Act (“TEFRA”), the Corporation is required to hold such hearing (the “TEFRA Hearing”) in the jurisdiction in which the Development is to be located. The Corporation must publish notice in the Texas Register and the local newspapers of general circulation in the participating jurisdictions at least seven (7) days and twenty-one (21) days prior to the TEFRA hearing. The Texas Register is published only on Fridays and such notice must be provided to the Texas Register no later than noon on the Wednesday which is ten (10) days preceding the Friday in which the publication is requested. The Texas Register provides no exceptions to this deadline. Accordingly, the Corporation will require

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the Respondent to provide an appropriate location, date and time for TEFRA hearings as approved by the Corporation and transmit this information to the Corporation at least 7 days prior to the date notice is required to be published in the Texas Register. The TEFRA Hearing may not be held (and notice of such Hearing may not be published) prior to the date a Development is selected by the Corporation; provided, however, that such hearings may be scheduled and publication of notice of such hearings may be provided for prior to selection as long as (a) the Corporation’s staff determines that such action is appropriate, (b) the hearing and publication of notice do not actually occur until after selection by the Corporation and (c) the Borrower provides the deposit to the Corporation set forth in Section IV.A.1. (d) below.

The Corporation must also provide notice of the TEFRA hearing(s) to certain members of the

Texas Legislature, local public libraries, homeowners’ associations or other recognized neighborhood organizations or groups within a one mile radius of the Development(s), county and city officials, residents of the Development(s) (if occupied), and other interested parties designated by the Corporation. The Corporation will not publish notice of a public hearing until it has received from the Respondent:

(a) the names and addresses of any affected homeowners’ associations, and

(b) the names of the state legislators, the city council members and the county

commissioners in whose district or precinct (as applicable) the Development(s) are located.

THE INFORMATION REQUIRED BY THE CORPORATION TO GIVE NOTICE OF THE TEFRA HEARING IS AVAILABLE FROM THE CORPORATION. A HEARING INFORMATION FORM MUST BE RETURNED TO THE CORPORATION AT LEAST 7 DAYS PRIOR TO THE DATE NOTICE MUST BE PROVIDED TO THE TEXAS REGISTER. FAILURE TO TIMELY PROVIDE THIS INFORMATION TO THE CORPORATION MAY RESULT IN A DELAY IN PUBLIC NOTICE AND ACCORDINGLY, A DELAY IN THE CLOSING OF THE DEVELOPMENT.

3. Bond Review Board Approval. Obligations issued by the Corporation are subject to approval by the Texas Bond Review Board (the “BRB”). BRB rules provide an exemption from the formal approval process for Texas State Affordable Housing Corporation Multifamily conduit transactions unless such transactions involve an ad valorem tax reduction or exemption. No ad valorem tax exemption or reduction is expected to be requested with respect to the Development; therefore, the formal BRB approval process should not be required. However, if one or more BRB members request it, the formal BRB approval process must be followed. If so, representatives of the Respondent are expected to attend the BRB planning session and the BRB meeting at which the Development will be considered for approval. Additional information may be requested by BRB members and the Respondent’s cooperation in providing this information is required.

If the formal BRB approval process is required, the Corporation, with the assistance of its Bond Counsel, will prepare and file the notice of intent and the BRB Application for the Development. The Corporation will file the notice of intent and the BRB Application with the BRB only if it has timely received all required information and documentation for the completion of the BRB Application from the Respondent and/or its consultants.

4. Document Preparation. Bond Counsel shall have the primary responsibility for the preparation of the legal instruments and documents to be utilized in connection with the financing of the Development by the Corporation. No bonds or other obligations will be sold or delivered unless the legality and validity thereof have been approved by Bond Counsel. The Respondent and its legal counsel shall cooperate fully with Bond Counsel, the Financial Advisor, the Issuer’s Counsel and the Corporation’s agents in the preparation of such materials.

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5. Material Changes to Financing Structure. Any and all material proposed changes to the financing structure, ownership of the Development, or scope or materials of or for the proposed Development, from that set forth in the Response must be disclosed to the Corporation immediately in writing and approved by the Corporation. In the event that the Development does not close within the time frame established by the Corporation, the Corporation reserves the right to terminate its participation in the financing. See Section V.B. below. II. Final Approval and Closing

1. Final Approval by the Corporation. The Board will consider final action on the Response after the completion of the public hearings and at the recommendation by the Corporation’s staff. If approved, the Board shall adopt a resolution, in such form as is recommended by Bond Counsel, authorizing the issuance of obligations to provide financing for the Development. Final approval will be granted only upon:

(a) receipt by the Board of evidence satisfactory to it that the Respondent has

complied in all material respects with these Regulations not otherwise waived by the Board; and

(b) an affirmative determination of the Board that:

(i) all requirements for and prerequisites to final approval under these Regulations have either been satisfied or waived and are in form and substance satisfactory to the Board; and

(ii) the operation of the Development(s) will constitute a lawful activity, is

qualified for approval by the State, complies with and promotes the purposes of the Corporation and satisfies the requirements of the Corporation.

2. Closing of the Development. Following the public hearing(s) and final approval by the Corporation and the BRB (if necessary), the Corporation will proceed to close the financing in accordance with the documents approved by the Corporation and when finally approved by the Texas Attorney General and Bond Counsel in accordance with the terms of the sale or placement.

III. Sale of Bonds

A. Structure of the Development. There are a variety of bond financing structures and credit enhancements that may be utilized by the Respondent such as letters of credit, mortgage insurance and surety bonds. Prospective Respondents are encouraged to contact the Corporation’s Financial Advisor for further information regarding financing structures prior to submission of a Response. The Respondent is required to execute an agreement awarding the sale of the Corporation’s obligations to an underwriter or to an institutional purchaser through a private placement which obligates the Respondent to the payment of the costs of issuing such obligations as more fully described herein.

B. Environmental Review. Prior to the sale of the obligations, the Respondent will

be required to conduct a Phase I Environmental Site Assessment. At bond closing, the Respondent will be required to provide an environmental indemnity clause in the form to be provided by Bond Counsel.

C. Public Sale Requirements.

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1. If the obligations are to be publicly sold, whether by competitive bid or

negotiated sale, the bond issue must be structured so as to receive an investment grade rating of “BBB-” or higher by a nationally recognized rating agency acceptable to the Corporation and its Financial Advisor. If a credit enhancement is being provided, obligations may be credit-enhanced by an institution that is acceptable to the Corporation and its Financial Advisor.

The Response must indicate the type and nature of the proposed credit enhancement or surety, and the name and telephone number of a contact person (if known at time of submission) at such institution.

2. Obligations with an investment grade rating of “AA” or higher may be in minimum denominations of $5,000. For the Corporation to approve transactions that are rated “BBB-” or higher but less than “AA,” the obligations must be sold in minimum initial denominations of $100,000 and $5,000 thereafter.

D. Limited Offering Requirements. If the obligations do not have an investment

grade rating of BBB- or higher, the Corporation will consider such obligations to be non-rated for purposes of this subsection D. The Corporation may require that the obligations be rated or permit, at its sole discretion, the issuance of the obligations without a rating. The Corporation requires that non-rated obligations be privately placed or offered on a limited basis with restrictions. In order for a non-rated transaction to be considered by the Corporation, the placement must comply with the following minimum requirements: (i) the sale must be made to a “qualified institutional buyer” as defined in Rule 144(a) of the Securities Act of 1933 (a “QIB”) or an “accredited investor” as defined in Regulation D under such act (an “Accredited Investor”) and cannot be an underwriting or purchase with an intent to resell any portion of the obligations, (ii) if they are sold to QIBs, the obligations must be issued in minimum denominations of not less than $250,000, and if they are sold to Accredited Investors, the obligations must be issued in such higher minimum denomination as the Corporation may require, (iii) at such time as the bond financing is presented to the Corporation for final approval, the Respondent (or placement agent, if applicable) must (a) identify the Purchaser of the obligations and (b) provide a written commitment from the Purchaser in form and content customarily used by real estate lending institutions outlining the terms and conditions of such commitment to purchase the obligations, (c) the Purchaser must represent that it is in the business of originating or acquiring and owning for its account, tax-exempt bonds or mortgage loans on multifamily rental housing properties, (d) there shall be no offering statement of the Corporation, or when a placement agent is involved in the sale of the obligations, there may be a placement memorandum prepared by the agent for the Purchaser, and (e) the Corporation may require that one physical obligation be issued with a legend stating that the initial and any subsequent purchaser(s) of such bond shall be a QIB or an Accredited Investor, as applicable. In the case of a private placement transaction, the Respondent or placement agent, upon delivery of the obligations, shall provide the Corporation with an executed investment letter from the investor purchasing the obligations substantially to the effect that: (1) it is engaged in the business, among others, of investing in tax-exempt securities and is a QIB or an Accredited Investor, as applicable; (2) it has made an independent investigation into the financial position and business condition of the Respondent and therefore waives any right to receive such information; and (3) it has received copies of the financing documents pursuant to which such obligations are issued. A form of such investment letter will be provided by the Corporation. Any variation to the requirements set forth above must be requested in writing by the Respondent and must be approved by the Corporation, and be acceptable to the Bond Counsel, Financial Advisor, and Issuer’s Counsel. IV. FEES AND OTHER COSTS.

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The Respondent will be responsible for all fees and expenses in connection with all bonds issued

on its behalf. Such expenses, where eligible under the Code, may be financed through bond proceeds and will be considered part of the obligations authorized for issuance by the Corporation. Federal tax law provides that only two (2%) percent of the proceeds of a tax exempt bond offering may be used to pay “costs of issuance.” The Respondent commits to pay from other sources any costs of issuance not payable from tax-exempt bond proceeds. The following fees are payable at the times and in the amounts as described below. ALL FEES ARE NONREFUNDABLE, EXCEPT AS OTHERWISE PROVIDED HEREIN.

A. Processing Fees, Closing Fees and Costs.

1. Processing Fees.

(a) Within 5 business days after the date of the board meeting at which the Development is selected by the Board of the Corporation, the Respondent shall make an initial deposit for expenses related to public hearings and application for private activity bond allocation. Such deposit shall be $7,500.

Following the issuance of a reservation for bond cap from the Bond Review

Board, the Respondent shall make another deposit with the Corporation which shall be credited against fees and expenses incurred by Bond Counsel, the Financial Advisor and Issuer’s Counsel in connection with the proposed financing. Such deposit shall be $27,500, which represents a $12,500 deposit for Bond Counsel fees, a $10,000 deposit for Financial Advisor’s fees, and a $5,000 deposit for Issuer’s Counsel fees. All fees and expenses incurred by Bond Counsel, the Financial Advisor and Issuer’s Counsel in connection with the Respondent’s transaction shall be deducted from such deposit whether or not the obligations are issued and the remaining balance, if any, shall be refunded to the Respondent.

(b) The Respondent shall reimburse the Corporation for all costs and

expenditures incurred by the Corporation, prior to and after the selection of the Development by the board, to analyze the appropriateness and willingness of the Corporation to provide bond financing for the Respondent’s transaction, including, but not limited to, the reimbursement of costs and expenditures for (i) on-site visitation of multifamily residential developments to be financed (or the site(s) therefore), (ii) any reports deemed necessary or appropriate by the Corporation and not otherwise provided by the Respondent, (iii) all costs and expenses (including travel and related expenses) of conducting public hearings and related meetings (described herein) and (iv) such other activities, inspections and investigations as are deemed necessary or appropriate by the Corporation in connection with its determination of the suitability of the proposed development for financing assistance to be offered by the Corporation. The Corporation will invoice the Respondent for such costs and expenditures, and the Respondent shall pay such invoices within ten (10) days of receipt. Failure to make prompt payment of such invoices may result in a termination of the participation of the Corporation and its consultants in the financing.

2. Closing Fees. Concurrently with the closing of the financing, the Respondent shall pay or cause to be paid all fees and expenses in connection with the issuance of the obligations including, but not limited to, the following professional fees and other costs:

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(a) all fees and expenses of Bond Counsel (to the extent such fees and

expenses have not been covered by the above referenced deposit); (b) all fees and expenses of the Financial Advisor (to the extent such fees

and expenses have not been covered by the above-referenced deposit) or other consultants, for services rendered to the Corporation in connection with the Development or the issuance of the obligations;

(c) all fees and expenses of Issuer’s Counsel (to the extent not covered by

the above-referenced deposit); (d) the actual amount of any closing or acceptance fees of any trustee for the

obligations, any fees and premiums for casualty and title insurance, any security filing costs, any fees for placing the obligations, any fees and expenses of any compliance agent appointed in connection with the review of any property, any out-of-pocket expenses incurred by professionals acting on behalf of the Corporation, and any other costs and expenses, including issuance expenses, relating to the obligations, their security, and the Development;

(e) a closing fee to the Corporation of $0.50 per $1,000 principal amount of

obligations issued, with a minimum closing fee of $5,000; (f) a closing fee to the Texas Bond Review Board of $1,000 or 0.025% of

the principal amount of the bonds certified as provided by §1372.039(a)(1), Government Code, whichever is greater.

3. Financial Advisor Fees. The fee to be paid to the Corporation’s Financial Advisor shall be 1) for the first $15,000,000 of bond principal, the fee shall be $10,000 plus $2.00/$1,000 of the principal amount of debt issued with a minimum fee of $20,000 (unless otherwise agreed to by the Corporation’s Financial Advisor) and 2) for amounts above $15,000,000 the fee shall be reduced to $1/1000 for that amount over $15,000,000. In addition, the Corporation’s Financial Adviser shall also serve as the bidding agent for an additional fee with respect to all investment contracts to be entered into in connection with the investment of bond proceeds and revenues of the Developments. 4. Bond Counsel Fees. The fee to be paid to Bond Counsel shall be $6.00/$1,000 of the principal amount of debt issued for the first $20,000,000 of the principal amount of debt issued, $3.00/$1,000 of the principal amount of debt issued for the next $20,000,000 of the principal amount of debt issued, and $0.75/$1,000 of the principal amount of debt issued thereafter, with a minimum fee of $75,000 (unless otherwise agreed to by Bond Counsel). In addition to the fees paid to Bond Counsel, the Respondent will reimburse Bond Counsel for all out-of-pocket expenses incurred by Bond Counsel in connection with the Development. Such expenses include Bond Counsel fees in connection with the TEFRA Hearings and preparation and publication of notices thereof and the preparation and filing of the BRB Applications and supplements thereto. 5. Issuer’s Counsel Fees. The fee to be paid to Issuer’s Counsel shall be $2.00/$1,000 of the principal amount of debt issued for the first $20,000,000, $0.75/$1,000 of the principal

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amount of debt issued for the next $20,000,000, and $0.50/$1,000 of the principal amount of debt issued thereafter, with a minimum fee of $20,000 (unless otherwise agreed to by Issuer’s Counsel.) In addition to the fees paid to Issuer’s Counsel, the Respondent will reimburse Issuer’s Counsel for all out-of-pocket expenses incurred by Issuer’s Counsel in connection with the Development.

6. Administrative Fee. Until the final maturity of the obligations, the Respondent will pay an Administrative Fee, remitted through the respective bond trustee to the Corporation on such basis as designated by the Corporation, in an amount equal to ten (10) basis points annually of the aggregate principal amount of the obligations outstanding, with a minimum annual fee of $5,000. The Administrative Fee is exclusive of the trustee’s fee, compliance agent fee, rebate analysts’ fee, asset-oversight management fee (if required), audit fee, independent analyst fee, and any other costs or extraordinary costs as permitted under the respective bond documents. Payment of the Administrative Fee is to be covered by the bond credit enhancement and/or secured under the first mortgage on the property assigned to the bond trustee. The Corporation may require the payment of the Administrative Fee to be guaranteed by the Development owner and/or general partner(s). 7. Trustee’s Fees. The Respondent shall select a bond trustee from a list of bond trustees approved by the Corporation to administer the funds and accounts pursuant to the trust indenture between the Corporation and the trustee bank. All trustee fees and expenses, including fees of trustee’s counsel, shall be approved by the Corporation, and will be paid by the Respondent. 8. Auditor’s Fees. The Corporation may at any time over the life of the project appoint an auditor to review the financial transactions under the bond documents, the compliance agent, and a rebate analyst to perform an analysis of rebate requirements with respect to the issue. Such fees and costs shall be paid by the Respondent.

B. Continuing Costs.

Each Respondent shall pay to the Corporation, in the manner described in the Development documents, the following amounts:

1. An annual asset oversight fee equal to $25 per unit for the Development (as such fee may be adjusted in accordance with the Asset Oversight Agreement),

2. An annual compliance fee equal to $20 per unit for the Development (as such fee may be adjusted in accordance with the Compliance Agreement),

3. Any amounts payable pursuant to any indemnity contract or agreement executed in connection with any financing of the Corporation completed as herein contemplated, and

4. The amount allocable to each Respondent (whose financing has been completed)

of costs and expenses incurred by the Corporation in the administration of the indemnity contract or agreement, any program established in connection with the financing of a Development, and any obligations of the Corporation, including an annual accounting and/or audit of the financial records and affairs of the Corporation. The amount of costs or expenses paid or incurred by the Corporation under this clause shall be divided and allocated equally among all Respondents whose financings have been completed.

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C. Changes in Fees. The Corporation reserves the right at any time to change, increase or reduce the fees payable under these Regulations. All fees imposed subsequent to closing by the Corporation under these Regulations will be imposed in such amounts as will provide funds, as nearly as may be practical, equal to that amount necessary to pay the administrative costs of conducting the business and affairs of the Corporation, plus reasonable reserves therefore.

D. Failure to Timely Pay Fees and Costs. The Corporation will not consider

submissions for future transactions proposed by Respondents who are delinquent in the payment of any fees described in this Section IV.

V. MISCELLANEOUS.

A. Unauthorized Representations and Bond Marketing Practices. 1. Required Approvals. No Respondent, or any representative of any Respondent

or the Corporation, shall represent, directly or indirectly, to any lender (interim or otherwise) supplier, contractor, or other person, firm, or entity that the Corporation has agreed or is firmly committed to issue any obligations in relation to any Development or Response until the Board has given final approvals for the issuance thereof under these Regulations, and then subject to the governmental approvals required by these Regulations and the approval of the Attorney General of the State of Texas, the approval of Bond Counsel and subject to any requirements imposed by the Corporation’s Articles of Incorporation.

2. Offering Statement. No Respondent, or any representative of the Respondent

or the Corporation, shall ever make any representation, directly or indirectly, express or implied, of any fact contrary to the disclosures required to be made by paragraph II.C.1.(b) of these Regulations (regarding an offering statement, prospectus or other offering memoranda).

3. Registration. Neither the Respondent nor any securities firm, underwriter,

broker, dealer, salesman, or other person, firm, or entity shall offer, sell, distribute, or place any obligations authorized by the Corporation by any process, method, or technique or in any manner, transaction, or circumstances or to any person or persons, the effect of which would be to require such obligations to be registered or would require filings to be made with regard thereto under the laws of the state or jurisdiction where such offer, sale, distribution, or placement is made without first registering the same or making the filings regarding the same required by such laws.

B. Failure to Comply with these Regulations. The Corporation will not consider

submissions from Respondents for a potential Development if the Respondent is a borrower (or a related party thereto) in connection with obligations previously issued by the Corporation and such borrower (or related party) is not in compliance with the requirements set forth in these Regulations or is delinquent in the payment of any fees or costs set forth in these Regulations with respect to such prior issued obligations of the Corporation.

C. OTHER REQUIREMENTS. THE CORPORATION MAY

IMPOSE ADDITIONAL OR DIFFERENT REQUIREMENTS ON A RESPONDENT THAN THOSE PROVIDED IN THESE REGULATIONS IN THE EVENT THAT THESE ADDITIONAL OR DIFFERENT REQUIREMENTS BECOME NECESSARY TO PROVIDE THE BEST OPPORTUNITY FOR APPROVAL BY THE CORPORATION’S BOARD OF DIRECTORS AND/OR THE TEXAS BOND REVIEW BOARD.



Multi-Family Developers for the New Construction or Rehabilitation of

Rural Multifamily Housing in Texas using Tax-Exempt Bond Financing



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The Texas State Affordable Housing Corporation (The “Corporation”) is requesting proposals (the “RFP”) from qualified firms (the “Respondents”) interested in working with the Corporation for the new construction and/or substantial rehabilitation of multifamily Developments in any rural area of the State of Texas using private activity bonds and low income housing tax credits (HTC). Eligible responses under this RFP will pool together a number of properties sufficient to make the transaction financially feasible under one bond issuance. All properties will be cross collateralized. For the purpose of this RFP, rural will be defined as:

An area that is: a) Outside the boundaries of a metropolitan statistical area (MSA); or b) Within the boundaries of an MSA, if the area has a population of 20,000 or less and does not

share a boundary with an area that has a population greater than 20,000; or c) In an area that is eligible for New Construction or Rehabilitation funding by the U.S.

Department of Agriculture-Rural Housing Service. Area definition: An incorporated place or Census Designated Place as defined by the US Census Bureau. Developments located outside the boundaries of a place shall use the Area definition of the closest place.

Questions about the RFP can be directed in writing to: Ms. Cari Garcia Texas State Affordable Housing Corporation



Email: [email protected] All questions and responses will be posted on the Corporation’s web site (www.tsahc.org) within the Multifamily Bond Programs section. Questions and Answers from the previous program years that are applicable to the 2006 Program will be posted in that section as well. New Questions will be accepted until 5:00 p.m. on Friday, February 10, 2006. Respondents will be held responsible for information posted to the website related to the RFP. Submissions are due by not later than 2:00 P.M. Central Standard Time on Friday, March 10, 2006.

General Information The Corporation is interested in contracting with a firm that is experienced, qualified, and interested in partnering with the Corporation for the new construction and/or rehabilitation of apartments in rural areas of Texas. If a proposed Development is approved by the Corporation, the Texas Attorney General, and (if required) the Texas Bond Review Board, the selected Respondent will receive a tax-exempt private activity bond allocation that the Corporation has reserved specifically for the selected Development pool. In addition, the selected Respondent will be eligible to apply for four percent HTC allocation through the Texas Department of Housing and Community Affairs (TDHCA).



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Due to the complex nature of a proposal under this RFP, it is likely that the transaction will require some type of gap financing to evidence financial feasibility over the portfolio. The Corporation encourages respondents to apply to other funding entities for gap financing, in addition to tax credits. For example, TDHCA has a HOME open cycle which offers financing for multifamily Development. Under the proposed HOME rules for 2006, there is approximately $3M available to non-CHDO entities and an additional $2M for preservation activities. This application cycle may be an opportunity for gap financing under this RFP. TDHCA will accept applications from December 2005 to August 2006 and will make allocations on a “first come, first serve” basis. Other gap financing alternatives are currently under Development in the Corporation’s Grant and Fundraising initiatives which are outlined in the 2005-2007 Business Plan.


Requirements: 1) Several developments may be pooled together under one bond issuance, but the total bond request

must not exceed $13.3 million dollars. (If additional properties could be added to the pool, they should be presented in a secondary proposal to be funded in the event that other RFPs do not receive qualified proposals.)

2) Submitted proposals must meet local standards for each multi-family development found in the City’s respective zoning ordinances.


4) Respondents must submit evidence of local support for each property in the form of a Resolution (see Submission Requirement #8).


The Roles of the Corporation The Corporation may assemble a team of consultants for legal and financial planning to assist in the implementation of this initiative, and to the maximum extent, their costs will be paid from the tax-exempt bond and tax credit financing. Upon selection, the Respondent is responsible for preparing an HTC application for 4 percent tax credits and timely submitting it to TDHCA in accordance to the rules in effect at the time of inducement. Provide a copy of each tax credit application to the Corporation, when completed. The Corporation will assume the following roles for the selected Development:



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• Insure that the Development meets all of the Corporation’s requirements for affordable multifamily financing and that the construction or rehabilitation complies with local codes and requirements.
















5


The Corporation seeks to provide housing to a mix of eligible households, including the low and very low income. A Respondent will be disqualified from consideration if any of the requirements below are not met. At a minimum, all proposals will be required to meet the following income and rent restrictions per property:





Development Design Review The Developments must obtain all required City permits including all building permits and must be appropriately zoned and platted.




2. Maps: A location map showing the location and approximate outline of the tracts involved along with the location of any and all amenities, for which the respondent is claiming points, which are located within a two mile radius of the Development. A zoning map showing the existing zoning of the property and surrounding areas, demonstrating that the Development, as proposed, is zoned for the intended use, or a letter indicating that a zoning change has been requested. Zoning must be approved for the Development within 45 days of receiving a reservation for allocation of bond cap.



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6. Submit a market study showing the need in the area for new construction or rehabilitated

affordable housing as proposed. 7. Photographs of the proposed site for new construction and/or of the Development which identify

the need for rehabilitation. 8. Evidence of local support for the Development from the City/County in the form of a resolution

of support by the City Council and/or County Commissioner’s Court. The resolution must clearly state that local officials support the Development as proposed. (Proposals will not be scored or presented to the Board without this submission.)



10. Certifications:




stating that they have read and understand the Corporation’s Guidelines and the RFP and acknowledging (a) that all exceptions to the Guidelines and RFP must be requested in writing by the Applicant with an explanation of the need for the exception, (b) that all

7

exceptions to the Guidelines and RFP are subject to the review and/or approval by the Board of Directors of the Corporation, and (c) that complying with the Guidelines and RFP does not guarantee approval of the transaction by either the Corporation’s Board of Directors or the Texas Bond Review Board.





e. If claiming points for providing a security or courtesy officer on site, the respondent must

submit a certification stating that the proposal contains such a provision and a description of the budgeted line item that will compensate this expense.

11. If applicable, describe and provide supporting evidence (e.g., certification by a governmental

agency) of the status as a Historically Underutilized Business (HUB), minority business enterprise (MBE) and/or women owned business enterprise (WBE), or, if applicable, describe the Respondent’s or the general contractor’s history of utilizing HUB’s.








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b. Development Cost Schedule identifying all anticipated Development costs associated with the transaction in consistency with the Sources and Uses of Funds report. For pooled transactions, information should be submitted for each property.





e. Operating Statements for each property consisting of the previous twelve (12)

consecutive months ending not more than three (3) months from the date of submission; the two most recent consecutive annual operating statement summaries; and a rent roll not more than six (6) months old at the time of response submission. (rehabilitation only)







9


One response should be submitted for the entire proposal. However, there are various sections of the response that are property specific and should be submitted for each property. These items are identified below. Property Specific Submissions • Application Form • Maps • Site Control (unless all properties are contained within one purchase agreement) • Market Study • Photographs of the Development • Evidence of local support • Financial Spreadsheets (by property and as pooled) • Resident Services Plan • Housing Tax Credit Application • Green Building Information (if applicable)







(recognizing the limits of the Corporation’s allocation); • Evidence of community support for the Development;

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• Qualifications of Development team; • Evidence of financial feasibility of the Development and cost efficiency of bond





program at any time, with or without further notice to any interested party. All costs incurred in the response or development process are the sole responsibility of the Respondent. All decisions of the Corporation are subject to such additional conditions, restrictions and requirements as determined by the Corporation in its sole discretion. In addition, the Corporation’s selection of Developments for possible allocation of private activity bond cap is subject to final allocation approval by the Texas Bond Review Board.








If the Corporation does not grant preliminary approval of the Response, the Corporation will so advise the Respondent. Any preliminary official action of the Corporation should not be construed as an indication as to the marketability of obligations, or as the final approval of the Development by the Corporation, its Financial Advisor or Bond Counsel. Rather, it is an indication that the Corporation will attempt to issue its obligations for the Development subject to, (i) a readiness to proceed by the Respondent with financing structure approval process, (ii) the Respondent’s continuing compliance with these Regulations and cooperation in providing any and all requested information to the Corporation, (iii) approval by the Texas Bond Review Board of the sale of obligations, (iv) market conditions and terms acceptable to the

11

Corporation and to its staff and consultants, and (v) acceptable evidence of local support for the Development and approval by the Texas Attorney General of the issuance of the obligations.



I. Subsequent filing requirement, public hearings and document preparation II. Final Approval and Closing III. Sale of Bonds IV. Fees and Other Costs V. Miscellaneous

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13











14













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APPENDIX B





• Domestic Skills



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17
















18











19










III. Sale of Bonds





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21




1. Processing Fees.







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23










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V. MISCELLANEOUS.













Multi-Family Developers for the Rehabilitation of Multifamily Housing

In Texas using Tax-Exempt Bond Financing



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The Texas State Affordable Housing Corporation (The “Corporation”) is requesting proposals (the “RFP”) from qualified firms (the “Respondents”) interested in working with the Corporation for the substantial rehabilitation or demolition and reconstruction of an existing multifamily Development in any area of the State of Texas using private activity bonds and low income housing tax credits (HTC). Questions about the RFP can be directed in writing to: Ms. Cari Garcia Texas State Affordable Housing Corporation



Email: [email protected] All questions and responses will be posted on the Corporation’s web site (www.tsahc.org) within the Multifamily Bond Programs section. Questions and Answers from the previous program years that are applicable to the 2006 Program will be posted in that section as well. New Questions will be accepted until 5:00 p.m. on Friday, January 6, 2006. Respondents will be held responsible for information posted to the website related to the RFP. Submissions are due by not later than 2:00 P.M. Central Standard Time on Friday, January 20, 2006.

General Information The Corporation is interested in contracting with a firm that is experienced, qualified, and interested in partnering with the Corporation for the rehabilitation of apartments in Texas. If a proposed Development is approved by the Corporation, the Texas Attorney General, and (if required) the Texas Bond Review Board, the selected Respondent will receive a tax-exempt private activity bond allocation that the Corporation has reserved specifically for the selected Development. In addition, the selected Respondent will be eligible to apply for 4 percent HTC allocation through the Texas Department of Housing and Community Affairs (TDHCA).



Requirements: 1) Submitted proposals shall be limited to rehabilitation of existing multi-family units or

demolition/reconstruction of an existing multi-family development on a unit-for-unit replacement basis, with no additional units added without approval by the City and/or County affected.



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2) Up to three (3) developments may be pooled together under one bond issuance, but the total bond request must not exceed $13.3 million dollars. (If additional properties could be added to the pool, they should be presented in a secondary proposal to be funded in the event that other RFPs do not receive qualified proposals.)

3) Submitted proposals must meet local standards for multi-family development found in the City’s respective zoning ordinances.


5) Respondents must submit evidence of local support in the form of a Resolution (see Submission Requirement #8).


The Roles of the Corporation The Corporation may assemble a team of consultants for legal and financial planning to assist in the implementation of this initiative, and to the maximum extent, their costs will be paid from the tax-exempt bond and tax credit financing. Upon selection, the Respondent is responsible for preparing an HTC application for 4 percent tax credits and timely submitting it to TDHCA and providing a copy of such application to the Corporation, when completed. The Corporation will assume the following roles for the selected Development:





• Insure that the Development meets all of the Corporation’s requirements for affordable multifamily financing and that the rehabilitation complies with local codes and requirements.



4















The Corporation seeks to provide housing to a mix of eligible households, including the low and very low income. A Respondent will be disqualified from consideration if any of the requirements below are not met. At a minimum, all proposals will be required to meet the following income and rent restrictions:




5


Development Design Review The Development must obtain all required City permits including all building permits and must be appropriately zoned and platted.










6. Submit a market study showing the need in the area for rehabilitated affordable housing as

proposed. 7. Photographs of the Development which identify the need for rehabilitation.

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8. Evidence of local support for the Development from the City/County in the form of a resolution of support by the City Council and/or County Commissioner’s Court. The resolution must clearly state that local officials support the Development as proposed. (Proposals will not be scored or presented to the Board without this submission.)



10. Certifications:




stating that they have read and understand the Corporation’s Guidelines and the RFP and acknowledging (a) that all exceptions to the Guidelines and RFP must be requested in writing by the Applicant with an explanation of the need for the exception, (b) that all exceptions to the Guidelines and RFP are subject to the review and/or approval by the Board of Directors of the Corporation, and (c) that complying with the Guidelines and RFP does not guarantee approval of the transaction by either the Corporation’s Board of Directors or the Texas Bond Review Board.





e. If claiming points for providing a security or courtesy officer on site, the respondent must

submit a certification stating that the proposal contains such a provision and a description of the budgeted line item that will compensate this expense.

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11. If applicable, describe and provide supporting evidence (e.g., certification by a governmental agency) of the status as a Historically Underutilized Business (HUB), minority business enterprise (MBE) and/or women owned business enterprise (WBE), or, if applicable, describe the Respondent’s or the general contractor’s history of utilizing HUB’s.








b. Development Cost Schedule identifying all anticipated Development costs associated

with the transaction in consistency with the Sources and Uses of Funds report. For pooled transactions, information should be submitted for each property.







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One response should be submitted for the entire proposal. If the response includes more than one property, there are various sections of the response that are property specific and should be submitted for each property. These items may include but are not limited to. Property Specific Submissions • Application Form • Maps • Site Control (unless all properties are contained within one purchase agreement) • Market Study • Photographs of the Development • Evidence of local support • Financial Spreadsheets (by property and as pooled) • Resident Services Plan • Housing Tax Credit Application • Green Building Information (if applicable)

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program at any time, with or without further notice to any interested party. All costs incurred in the response or development process are the sole responsibility of the Respondent. All decisions of the Corporation are subject to such additional conditions, restrictions and requirements as

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determined by the Corporation in its sole discretion. In addition, the Corporation’s selection of Developments for possible allocation of private activity bond cap is subject to final allocation approval by the Texas Bond Review Board.











I. Subsequent filing requirement, public hearings and document preparation II. Final Approval and Closing III. Sale of Bonds IV. Fees and Other Costs

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V. Miscellaneous

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APPENDIX B





• Domestic Skills



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III. Sale of Bonds





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1. Processing Fees.







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V. MISCELLANEOUS.











Proposed 09-9-05 Final 10-14-05

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Amended Guidelines for the Texas State Affordable Housing Corporation

2006 Private Activity Bond Program

INTRODUCTION

The Texas State Affordable Housing Corporation (the “Corporation”) will be soliciting proposals for multifamily housing properties seeking to use private activity bond cap in the calendar year 2006. All potential Respondents (“Respondents”) are urged to submit complete proposals as early during the acceptance period as possible to ensure adequate review time. Background – Private activity bonds to finance qualified residential rental facilities are subject to the limitations imposed by federal and state regulations pertaining to private activity bond cap (“volume cap”). In the 78th Regular Session (2003), the Texas Legislature passed S.B. 284, which, among other purposes, awarded 10 percent (10%) of the State’s multifamily volume cap to the Corporation. For 2006, that amount is estimated to be approximately $40 million. Although volume cap is limited, the Corporation encourages proposals from developers of new and existing multifamily properties and will use its best efforts to provide bond financing to as many qualified properties as reasonably feasible in target areas identified by the Corporation. A Request for Proposals (“RFP”) procedure has been designed to establish a process for inviting, evaluating, and selecting qualified tax exempt residential rental facilities seeking allocations of volume cap in 2006.

PROGRAM OUTLINE

Research and Identification of Targeted Areas– The Corporation’s Board of Directors (“Board”) will identify specific areas of housing need across the state where the allocations will be targeted. The Corporation must be able to identify specific affordable housing needs and verify local community support for any potential affordable housing development. This will be achieved by: 1. Coordinating with the Texas Department of Housing and Community Affairs (“TDHCA)

and other state and federal agencies and reviewing relevant needs assessment; 2. Soliciting information regarding housing needs from local and regional housing

organizations; 3. Researching information on a statewide and national level to identify affordable housing

trends and solutions to meeting the needs of targeted areas in Texas; 4. Consulting with the appropriate local political entities and their representatives (e.g. city

council, mayor, county commissioner, county judge, etc.); 5. Meeting with experienced affordable housing developers in the state and recognized

professionals in the industry to determine target areas of housing need in their areas of expertise


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The Corporation may also specify the most appropriate development characteristics for each targeted area. This may include, but is not limited to, income levels, special needs population served, project amenities, and social services. Request for Proposals – Once the Corporation has identified targeted areas of housing need and development characteristics, an RFP will be issued for each targeted area. The required development characteristics, or technical specifications, and submission deadline for each targeted area will be set forth in its respective RFP. RFP’s may be issued at different times during the year with the last response deadline being no later than April 1, 2006. Evaluation and Allocation – The Corporation will accept proposals in response to the RFPs during a specified submission period. Each proposal will be evaluated and scored, with the highest ranking proposals being presented to the Corporation’s Board for approval. There is no assurance that the Corporation will select a proposal in each targeted area, even if the Corporation receives proposals for housing developments in each targeted area. The Corporation may approve more than one proposal in a particular targeted area. If there is more than one RFP issued by the Corporation, the available amount of PAB allocation will initially be divided equally among each RFP. If one targeted area is oversubscribed a waiting list will be determined based upon highest score. After the final RFP submission deadline, if no responses have been received or the recommended amount of allocation does not use all the money in that specific RFP, the Corporation will reallocate any remaining funds to the next highest scoring response in any of the targeted areas of need. This may result in a disproportionate amount of funds being allocated in one area depending upon RFP response.

PROGRAM DEADLINES

Time deadlines (as and if amended) for the proposal evaluation and selection process will be strictly adhered to by the Corporation. Respondents are advised to evaluate their financing goals and development preparedness prior to applying for private activity bond volume cap. The Corporation will reject proposals not meeting the minimum technical specifications or otherwise failing to evidence an ability to meet each of the deadlines set forth below. The current schedule for the process is shown below. The Corporation may amend this schedule by posting the revised schedule on its website (www.tsahc.org). August/October 2005 The Corporation’s Staff conducts research to determine specific

areas of housing need. September 2005 The Corporation’s Board publishes the 2006 PAB Guidelines for

comment. October 2005 The Corporation’s Board adopts the 2006 PAB Guidelines,

designates the target areas for the 2006 program year and approves the issuance of RFP’s for each targeted area.

October 05/January 06 The Corporation issues RFP’s for specific targeted areas.

http://www.tsahc.org)


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January/April 2006 Proposals must be received by the Corporation according to the deadline set out in each respective RFP.

January/April 2006 Proposals are evaluated, scored, and ranked by the Corporation’s

Staff. High Scoring Respondents will be notified to appear at the Corporation’s next scheduled Board meeting. Respondents with the highest ranking proposals make oral presentations to the Corporation’s Board;

April 2006 Corporation selects Developments that it intends to fund in 2006

(if any), plus one (1) alternate for each targeted area (where possible).

April/May 2006 Respondents and Corporation conduct public hearings. June 2006 Corporation provides public comment to the Board and requests

inducement resolutions for the selected developments that it intends to fund in 2006.

July/August 2006 Corporation staff submits list of inducements to the Texas Bond

Review Board. August 15, 2006 Last date to procure volume cap from the Texas Bond Review

Board; Texas Bond Review Board recaptures any unreserved allocations

Once the Corporation provides a preliminary allocation of volume cap for a housing

development, the Respondent must work with the Corporation to issue bonds within the time frames set forth above and in Appendix B to the Corporation’s RFP. Failure to finalize all aspects of development and bond financings within this time period and to submit all required pre-closing and closing documentation to the Corporation will result in recapture of the allocation. Respondents are advised to review funding sources, commitments and financing structures to ensure they can meet these deadlines for year 2006 submissions. In addition to meeting all requirements relating to private activity bonds set forth in the Internal Revenue Code, as amended, developments using federal Low Income Housing Tax Credits (“LIHTC”) in their financing plan must also meet all requirements of Section 42 of the Code, as amended, the United States Fair Housing Act, and all applicable State of Texas laws pertaining to multifamily housing. While the amount of volume cap available from the Corporation for multifamily developments is limited, the Corporation does encourage applications from multifamily developers and will use its best efforts to fund as many qualified projects as are reasonably feasible. Respondents are advised that the allocation of funds will be competitive and otherwise qualified developments may not receive funding due to the limited amount of available volume cap. Any and all costs incurred in this RFP process are the sole responsibility of the Respondent.


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Fees charged by the Corporation and its financing team for review of applications are nonrefundable. Bond allocations made available under this program are limited to residential rental facilities that meet all relevant qualifications of the Code. Such facilities may involve the rehabilitation of existing rental facilities, new construction of facilities, modernization of public housing facilities, and construction of qualified ‘assisted living’ housing.

SUBMISSION OF PROPOSALS




3. Site Control: Evidence that the Respondent either (i) owns the site for the proposed

Development or (ii) has a contract or an option to purchase the Development site covering the time period that the application is under review or that has an “option to extend” clause covering the same time period.

4. Audited financial statements of the Respondent for the last three years. These statements

should demonstrate the financial capacity of the Respondent, or the entity that would most likely be responsible for executing all applicable guarantees (“Guarantor”). The Respondent shall fully explain any negative audit findings. Provide the names of three banks or other financial institutions that can provide business references and the names and telephone numbers of contact persons. Respondents should be aware that the Corporation is subject to the provisions of the Texas Public Information Act, and that information received by the Corporation may be subject to open records requests.



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6. Submit a market study showing the need in the area for rehabilitated affordable housing

as proposed. 7. Photographs of the Development which identify the need for rehabilitation.

8. Evidence of local support for the Development from the City/County in the form of a

resolution of support by the City Council and/or County Commissioner’s Court. The resolution must clearly state that local officials support the Development as proposed. (Proposals will not be scored or presented to the Board without this submission.)

9. Provide an organizational chart of the proposed ownership structure and identify the

various legal entities to be involved in the construction, ownership, operation, and management of the improvements and the nature of their involvement. With respect to the development entity and/or the management agent, a precise description of any joint venture arrangements, including respective equity and decision making interests shall be provided. Describe the roles and responsibilities of each team member on this Development and provide resumes that include qualifying experience. Provide certification by the Respondent stating the nature of any relationship, business or otherwise, (for example, common or related board members) between or among the team members, including the Respondent, the proposed management company (if acquisition), the seller(s) of property, the underwriter or placement agent, and any other party related to the transaction.

10. Certifications:

a. Certification by the Respondent and Respondent’s principal(s) that they are in

good standing with the Corporation, TDHCA, and the City, do not have any outstanding compliance issues with the Corporation, TDHCA, or the City, and have not had any compliance issues in the last three years, or full disclosure of any problems and issues. As part of the evaluation process, the Corporation will request information from TDHCA’s Compliance Division and review any internal compliance records on each principal of the Applicant.

b. Certification by the Respondent and any underwriter or placement agent for the

bonds stating that they have read and understand the Corporation’s Guidelines and the RFP and acknowledging (a) that all exceptions to the Guidelines and RFP must be requested in writing by the Applicant with an explanation of the need for the exception, (b) that all exceptions to the Guidelines and RFP are subject to the review and/or approval by the Board of Directors of the Corporation, and (c) that complying with the Guidelines and RFP does not guarantee approval of the transaction by either the Corporation’s Board of Directors or the Texas Bond Review Board.

c. Certification by the Respondent and Respondent’s principal(s) that they have not

been involved during the past five years and are not currently involved in


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litigation regarding the development and/or financing of a property under the Corporation’s or TDHCA’s multifamily bond programs, the LIHTC program, or any City program, or full disclosure of any litigation.

d. Certification by the Respondent and Respondent’s principal(s) that they do not

have outstanding issues with the Internal Revenue Service regarding tax-exempt bond financed or LIHTC properties, or full disclosure of any outstanding issues.

e. If claiming points for providing a security or courtesy officer on site, the

respondent must submit a certification stating that the proposal contains such a provision and a description of the budgeted line item that will compensate this expense.

11. If applicable, describe and provide supporting evidence (e.g., certification by a

governmental agency) of the status as a Historically Underutilized Business (HUB), minority business enterprise (MBE) and/or women owned business enterprise (WBE), or, if applicable, describe the Respondent’s or the general contractor’s history of utilizing HUB’s.



13. Describe experience in the development of properties using tax-exempt bond financing

and/or LIHTC. Include the name and address of the property(s), property description, whether new construction or acquisition and rehabilitation, whether 9% or 4% LIHTC and allocation year, description of the participation of the Respondent, identification of any participation by a housing- related nonprofit or City or other public entity where the property is located, and the name and telephone number of a reference person(s) for each property (maximum of 4 examples of properties completed using both LIHTC and tax-exempt bond financing, and if no properties completed using both financing methods, list a maximum of 4 properties completed using either tax-exempt bond financing or LIHTC and specify which was used). The submitted documents must support points claimed for this item under the scoring criteria.


a. Rent/Expense Analysis identifying the proposed rent structure and any

components to this structure such as utility allowances and source, vacancy and collections loss and other exceptions to the rent and secondary income of the property. All operating expenses should be identified and included to determine the Net Operating Income of the property and financial ability to repay bonds in


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the amount required. For pooled transactions, information should be submitted for each property.

b. Development Cost Schedule identifying all anticipated Development costs

associated with the transaction in consistency with the Sources and Uses of Funds report. For pooled transactions, information should be submitted for each property.

c. 30-year Operating Proforma which substantiates that the property will maintain

a minimum debt coverage ratio of 1.10 over the 30 year period. Any deferred developer fee proposed in the transaction should be shown in the proforma as fully repayable within 10 years. For pooled transactions, information should be submitted for each property along with a combined proforma identifying the entire cross collateralized transaction.

d. Sources and Uses of Funds Schedule for the bond transaction that identifies by

name all companies or individuals to receive payments, including, but not limited to, developer’s fees, real estate commissions, underwriting fees, operating working capital (if any) and borrower’s working capital(if any), and should specify whether the payments will be from bond proceeds or other proceeds.







18. A resident services plan which clearly identifies the resident services to be provided at the Development. The plan must state how services will be determined, who will be


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providing the services, transportation arrangements (if applicable), and available/proposed space to be used for the provision of resident services. The narrative must support points claimed for these items under the scoring criteria.



PROPOSAL EVALUATION AND SELECTION PROCESS

Upon compliance with the response requirements set forth in the RFP, the Corporation

will conduct a preliminary review of all Responses. If all of the Response requirements are met and the proposed Development meets the Corporation’s purposes and guidelines, the Development will be scored by the Corporation in accordance with the criteria identified in Appendix A. The Applicant will be notified in writing of any deficiencies identified in the application and will be provided a timeframe to correct noted deficiencies. If the deficiencies are not corrected to the satisfaction of the Corporation within the allotted timeframe, the application will not be considered by the board for allocation and an alternate application will be underwritten.






housing properties in the identified market area; and • Other information relating to the RFP, the proposed Development, or the

Respondent.


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The Corporation reserves the right in its sole discretion to modify, suspend or amend this program at any time, with or without further notice to any interested party. All costs incurred in the response or development process are the sole responsibility of the Respondent. All decisions of the Corporation are subject to such additional conditions, restrictions and requirements as determined by the Corporation in its sole discretion. In addition, the Corporation’s selection of Developments for possible allocation of private activity bond cap is subject to final allocation approval by the Texas Bond Review Board.



At the Board’s next meeting following the TEFRA hearing for a Development, the Board

may take preliminary official action to adopt an inducement resolution evidencing the Corporation’s intent to issue obligations with respect to the Development, if all the requirements set forth herein are met and the public comment at the TEFRA hearings shows sufficient support for the Development. In order for the Board to take preliminary official action, the preliminary review of the Response must demonstrate with reasonable certainty that:


(b) all governmental approvals with respect to the obligations, the HTC, and

the Development will be obtained.


AFTER THE CORPORATION’S ADOPTION OF THE INDUCEMENT RESOLUTION, IT IS THE RESPONDENT’S RESPONSIBILITY TO PROCEED WITH REASONABLE DISPATCH TO COMPLETE THE BOND FINANCING PROCESS IN A TIMELY


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MANNER, INCLUDING, BUT NOT LIMITED TO, THE PAYMENT OF ANY FEE DEPOSITED AND THE PROVISION OF REQUIRED INFORMATION, DOCUMENTS, ETC. NECESSARY TO PROCEED.

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