Travis County Commssioners Court
March 25, 2003
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Housing Finance Corporation
Now let's call to order the Travis County housing finance corporation. First item, consider and take appropriate action on request to terminate restrictive covenants related to churchill crossing apartments.
>> good afternoon. Cliff blunt. This is a project originally financed by the housing finance corporation in 1985. Back in the fall these bonds were refinanced with a non-bond financed structure, and so the request has come to terminate the derestrictions and they have action spierd so this would just be approval of a document to release those restrictions and get them off of the county records.
>> that's why I move approval.
>> second.
>> any more discussion? Seconded by everybody on the board. All in favor? That passes by unanimous vote. 2 we do not need today. Going to be back on next week. 3, consider execution of grant application for home buyer assistance program funded by the Texas department of house ng and community affairs and take appropriate action.
>> good afternoon. I'm harshy Davis, manager for the corngs, and I'm here -- corporation, and miem here with my colleague, mary mays. I would like to give a description of the program design that we're asking the board to approve. The size of the grant would be $297,000 to provide 60 loans to first-time home buyers to provide downpayment and closing costs assistance. They would be 54 loans for people at 80% of Austin area median family income, and six loans for families at 60% or less of Austin area median income, and to give you an idea of what -- how those translate into dollars, the Austin area median income for 2003 overall is 66 #- hundred dollars. For a family of one, the 80% amount is $39,550. And for a family of four, the 80% amount is $56,500. The 60% amount for a family of one is $29,880, and for a family of four, it's $42,660. So those are the -- you know, the general income categories of families that this grant is designed to assist. We have a match component of this grant that is different than what we've had in the past. The last grant in which we were successful in getting funding for, we matched funds with our single-family bond programs and earned points that enabled us to be awarded grant funds. The state has changed the rules to where they do not allow matches of your bond programs. And so -- and we felt that obtaining a match was critical for us to have enough points to be awarded a grant because these are very competitive. So we -- we went to two sources for possible match funding and have secured $80,000 in match funding. The first source was the home builders. We went to the home builders that are in our bond program that have supported our bond program that we started in December. And there were two home builders, main street homes and milburn homes. And both of them were -- wanted to provide match funds, and so they have agreed to provide each $37,500 in match fund, and then they would have each 30 of the loans to make -- to use for selling homes in their development. So that would translate to $1,250 in a downpayment grant per loan. The other source, we talked to several area banks and asked them as part of their community reinvestment act programs in Austin if they were interested in providing matching funds for this program. And bank one has agreed to provide $5,000 in c.r.a. Funds for the program. Certainly appreciate very much bank one's contribution. There's really no restrictions on the use of these funds other than to -- you know, it has to be used to help families buy homes. So we have -- in our design have increased the downpayment assistance for the six loans of people at 60% or less of area median income to help them qualify, and so they would get -- receive an additional $833 in downpayment assistance. So what that translates to is that the home buyer, the 54 home buyers at 80% area median income would receive $5,800 in downpayment assistance, and the six families at 60% or less of median income would receive $6,633 in downpayment assistance. The home component of this assistance would be in the form of -- of a ten-year forgivable loan. So if they move in the first five years, then they would have to repay all the home funds. If they -- then from year 6 through 10, it's forgiven -- I think at 20% each year. So atist end of six years then, the full amount of the loan would be forgiven. Another component of the program is that the home buyer, in order to receive these funds works have to complete an eight-hour home buyer education course. And we have as part of the grant a memorandum of understanding with consumer credit counseling that has agreed to provide this course. The charge, which would be paid by the home buyer, would be $75 based on a class size of at least eight families. And so they would have to complete and get a certificate that they have completed this course, otherwise they would not be able to receive these funds. And consumer credit counseling will also provide post-homeownership counseling at no charge to these home buyers. So if they have issues or questions or problems after they move into the home, then they can call consumer credit counseling and get assistance. So that is basically the program design of this grant application. I feel that this is -- if the board approves this application, that it's going to be -- you know, that we have a really good chance of being awarded funds. It's a strong application. I certainly appreciate both main street and milburn homes for providing the matching funds and bank one for their contribution of the -- as part of their c.r.a. Program. With a that, I would be open to any questions.
>> so what the county is putting in or the corporation is a little labor really.
>> well, we're paying the consultant, the grant writer.
>> right.
>> we're paying the application fee for the grant.
>> how much is that?
>> $30. And we -- once -- assuming we are awarded funds, I mean there's a -- we have to, you know, make sure the money is there in a timely manner at closing. We have to help coordinate with the builders the setting up of these classes for the home buyers education. Consumer credit counseling did say that they didn't have space and asked if we could help provide space, so we either have to ask Travis County for use of space or one of the home builders at least, and I think the other one will too does have space and can provide space, so I don't think that's a problem. So I think we will provide quite a bit of labor for the grant, yes.
>> okay.
>> to clarify that answer, also the application fee is $30. There is an additional fee to the consultant who is preparing the grant. And that, I believe, harvey, was $950. Believe meerks it's a bargain.
>> next time figure out a way to squeeze a little money to reimburse the corporation while you are divvying up the $200,000.
>> actually the corporation on each of these loans gets $50.
>> what does that add up to? About a thousand?
>> $3,000. [inaudible].
>> you did much better than I gave you credit for.
>> thank you. [laughter]
>> so we have covered our costs and get a little extra, yes.
>> well, we did a good job of hustling up the money from main street, milburn and bank one.
>> second.
>> let me ask a question.
>> second the motion. Mr. Director daugherty.
>> harvey, how long have we been involved with this program, the county? In year.
>> in the past we have gotten two grants, and the first one was in 1995. That one was -- we had the assistance of the city of Austin, who did most of the work of making the loans and the paperwork and finding the buyers and it was more of a city -- I think it was more of a city-county kind of coordination. And then we had a small grant approximately two and a half years ago, maybe three years, in which the same consultant, hunter and hunter, helped us on the granted and administering it.
>> in the 1995 program, how many homes did we help? How many families did we help?
>> there were 77 homes.
>> what kind of history do you have on those 77 loans, I mean as to where they are today?
>> well, they are being repaid in a rapid manner. I mean you remember i've come to the board almost on a weekly basis with reimbursements and releases of liens, and all those are related to the '95 program.
>> [inaudible] represent refinancing? Not all selling their homes, but refinance sale.
>> so we have zero default in 70-something homes that we would have assisted people on buying?
>> I'm not aware of any defaults. The more recent program, the -- and this was certainly a big improvement, the second lien is actually to the state. So the state receives the money directly. I mean, it's sort of use less for us to be getting a check and then having to turn around and write the state a check. So they streamlined a little bit, so I don't know that we would necessarily be aware if a home was foreclosed on, you know, somebody declared bankruptcy and defaulted on the loan. But I have not been aware of that in any situation.
>> I just -- it would be interesting to me, I mean, to know if anything like that has taken place or has happened sovment if there's any -- there's a place that you could go and let me know that, I would like to.
>> okay. I can ask the state and see what kind of records they have on defaults.
>> see what process they have in place to follow up on --
>> I think with a program like this, the people -- the home buyer has a better chance of succeeding because, I mean, this assistance gives them a position to have some real equity in a house. There is a a downpayment, fan they stay there there sufficient time, of course they have the opportunity for the home portion of the grant to be forgiven. Now, the builders' grant and the bang one portion are grants. Those will not -- would not have to be repaid. Of course, and this -- if we're successful in this program and the home buyer can also use our bond program takes mortgage source and get a downpayment assistance grant on top of these forces, so they can really have a substantial -- you know, up in the $10,000 range of downpayment on a $100,000 home, and that's a pretty good deal.
>> yeah, no, I think that it's a great program for people to, you know, get involved and to buy their first home, no doubt about that. My interest would be how does that really get them kick started. I mean, obviously you look forward in helping people get into a first home. You would like to know how that program is really working. I mean, sometimes you allow people to buy things that regardless of what you allow them to do they can't really afford, you know, even with the great deals. But obviously these things with not having to repay partial amounts and this and that certainly would push people on the way of --
>> yeah. And it might make sense, say we do this program and after it's completed that we go back to the home buyers and do a survey and get some information about how -- how meaningful these funds were. How much of a difference this really made. And let me add, I didn't mention this in my presentation, these are for home buyers that are buying homes in Travis County, but outside the city limits of Austin, and the city has home funds and programs for -- good programs for first-time home buyers in these income categories that are buy ago home in the city, and we're trying to provide a program for the county residents because there's not a program out there. We don't get funds directly from h.u.d. Because we are not a participating jurisdiction like the city is, and so we have to go to the state and compete for these funds. And it's the very competitive.
>> very competitive.
>> thanks.
>> there's a motion and second. Any more discussion? All in favor?
>> move adjourn.
>> that passes by unanimous vote. All in favor? That passes by unanimous vote also.
Last Modified: Wednesday, April 2, 2003 10:25 AM