Travis County Commssioners Court
December 10, 2002
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Housing Finance Corporation
Now let's call to order the Travis County housing finance corporation. Three items, 1. Public hearing related to issuance of Travis County housing finance corporation single family mortgage revenue and refunding bonds (gnma mortgage-backed securities program) series 2002a in an aggregate principal amount not to exceed $25,000,000.
>> move that the public hearing be opened.
>> second?
>> all in favor? That passes by unanimous vote.
>> cliff blunt with thompson co, I would just like to state that notice of this public hearing was published in the american-statesman as required by the internal revenue code. I believe it was exactly 14 days ago. And -- and I'm not sure if you all have any questions on -- at this point. But it's on as item no. 2 for an action item.
>> it is posted for public hearing at 9:00 or 1:30.
>> at 1:30.
>> is there anyone who would like to give testimony during this public hearing? What is this in simple, straightforward english?
>> this is a new transaction to issue mortgage revenue bonds to allow funds to make mortgage loans to low to moderate income home buyers in Travis County. Probably as short as I can say it. It is a program that we have done -- we have done programs like this about once a year for the last four or five years, I believe, so --
>> okay. This is a public hearing to receive input on whether or not we ought to do this issuance.
>> anyone here to give public testimony?
>> move that the public hearing be closed.
>> second.
>> all in favor? That passes by unanimous vote. 2. Approve resolution authorizing and approving the issuance, sale and delivery of Travis County housing finance corporation single family mortgage revenue and refunding bonds (gnma mortgage-backed securities program) series 2002a in an aggregate principal amount not to exceed $25,000,000, approving the form and substance of and authorizing the execution and delivery of documents and instruments pertaining thereto; authorizing other actions and documents; and containing other provisions relating to the subject, and take appropriate action.
>> move approval.
>> second.
>> this is a routine -- [ laughter ]
>> pretty quick there on the item. Can we give you a quick overview of what's happened, what we have done.
>> go ahead.
>> I'm lad patilla the financial advisor to the Travis County housing finance corporation, this is the item that we brought to you in early October where we told you that we had, I believe, it was close to 25 million in recycled proceeds from prior deals that we could then use to -- to actually create out of -- if you will whole cloth there or own new mortgage revenue bond program for single family housing, we had lender meetings and found $16 million in interest from the local lenders that have paid the commitment fee to join in. I would like to -- we have handed you a recap sheet and would like to introduce to you the people that participated here. Mark o'brien from morgan keagan, of course cliff blunt your general counsel, debbie ramirez is here today representing vinson and elkins. Mark can give you a real quick where we are. This is scheduled to close next Tuesday, mark?
>> uh-huh.
>> but we are doing it in --
>> thank you, lad, judge, commissioners, marks o'brien, bond placement agent for the program. I have given you a one-page summary which you got in your packet from harvey Davis last Thursday. Issuer is Travis County hfc, issuance size $16 million. 24.5 million in the recycling program right now. The lender demand for this program was 16 million, that will be it, this is all recycled, of course these are triple a rated revenue bonds [inaudible] professionals listed there, of course, thompson co, vinson and elkins, debbie's firm as bond counsel, lad patillo financial advisor, morgan keegan, trustee bank of new york, servicer will be first bank of new york, bond purchaser will once again be fannie mae. I have listed for you ... For a total of $16 million of lender demand. Our anticipated closing date as lad mentioned, judge, is next Tuesday, December 17th here at vinson and elkins offices. Origination period will be approximately 24 months, it's extendible if we haven't used it all. If it obviously gets out in 12 months or 18 months, the program will terminate as soon as we have used all of the funds. The loan area as before will be Travis County. Our last program did not include Austin. Austin has -- we will pass a resolution on Thursday to allow lending of these funds within the city required by law for any city over 20,000 people. But it won't be until the earlier of the -- the completion of their mcc program, which is ongoing right now and ends on December 31st of next year. Or the -- or November 30th of next year. So we will have Austin into the program, it's a question of when.
>> let me interrupt you. Pretty significant [inaudible] for the past, if a person is within the city of Austin they would not have been able to -- in the past would have been eligible for this particular program; is that correct.
>> each time we do a program the city has to approve.
>> have to approve.
>> last year they did not. Someone they did not.
>> of course. -- 2001 they did not.
>> of course at this time we don't know whether they are going to be on board or not.
>> the resolution is scheduled for Thursday to be passed and they will be in, it depends on one of two things. Either if they -- if their mcc program is say done in March or April, they will come in immediately. If their mcc program does not come in that early, they will come in at the latest next year. They will be in.
>> that's a different type of housing assistance program through these same corporations that they have.
>> so Austin will be in. At the latest will be December of next year, but could be earlier depending on if they get their other program finished.
>> meanwhile, everybody else throughout the county will still be eligible.
>> from day 1.
>> make that distinction.
>> that's correct, sir.
>> all right, thank you.
>> can you tell me why they didn't do it last year, just for knowledge?
>> yes, commissioner. When -- the city of Austin has their own housing finance corporation and does these type of programs. Because last year it was a -- we got new money allocation from the state, had they come in, it would have hurt their place in line to get -- every two to three years they get an allocation to do a single family program. Had they come in last year when it was a new money program, it would hurt their place in line. This program, on other hand, commissioner daugherty is a refunding bind. Recycled, not new allocation from the state, this will not affect their place in line, that's why they approved it this time or intend to on Thursday.
>> what mortgage interest rate do we anticipate?
>> judge, this will be, rather than the whole thing being issued at one time, the -- that's how we have done it in the past, we've had for a 12 or 18 two-year origination period we have set a mortgage rate. Because short-term interest rates are so low, we have what we call negative arbitrage, it would cost the hfc a negative amount of money to put it in for a six fixed -- what we are doing is forward delivery. On the closing date, we will have the whole [inaudible] available, then we will set it in two to $3 million pieces for a 4 month origination pieces. Probably next week we will set the interest rate on the next two or $3 million, a commitment lot, four months to originate, four -- two months if it's all committed in two months, we will set another rate, keep on doing that until all 16 million are used, judge, and the anticipated mortgage rate for the first commitment lot, if we were to do it today, probably about 650, 660. That's with the 4% of down payment assistance. The commission rates today are around six and a quarter. In other words slightly above market rate, but with 4% down payment assistance grant from the bond premium. So $100,000 loan, that home buyer would get, say, the 650 mortgage rate plus $4,000 of down payment in closing cost assistance.
>> director Gomez moved approval.
>> uh-huh.
>> commissioner Davis seconded that motion. Any more discussion? All in favor? That passes by unanimous vote. 3. Approve minutes for board of directors meetings for October 22 and October 29, 2002.
>> move approval.
>> second.
>> all in favor, signify by saying aye. That passes by unanimous vote.
>> move we adjourn.
>> second, all in favor? That passes by unanimous vote.
Last Modified: Wednesday, April 2, 2003 10:25 AM