Travis County Commissioners Court
October 17, 2006
Housing Finance Corporation
Now let's call to order the Travis County housing finance corporation. Item no. 1 consider results of compliance audit of $4.4 million multi-familiar revenue bonds series ben oaks apartment probable cause, take appropriate action.
>> good morning, I'm harvey Davis, here for the corporation. Mike gonzalez and myself did a compliance audit at bent oaks, a 146 unit apartment. The corporation issued $4,400,000 in bonds in 1994. For these apartments. We are -- our audit was -- we looked at whether they were in compliance with the requirement to lease 20% of the units to -- to tenants whose income is below 50% of the Austin area median income. And 90% of the units have to be leased to tenants whose income is less than 120% of the Austin area median income. Five percent of the units have to be leased to the -- to elderly who are tenants above 55 years old. Our conclusion of the audit is that they are not no compliance with the low and eligible tenant leasing requirements. We -- we examined 30 files and -- and 21 of them did not -- did not -- were disqualified. 18 of the files were disqualified because they did not have proper income certification forms completed. Which is -- which is -- as required in the regulatory -- our agreement with the owners of the apartment complexes. Three of them were not qualified because they were -- because they then didn't qualify as low income tenants, because they were full-time students. You cannot be a full-time student and be a qualified low income tenant, even if your income is below 50%.
>> that's a federal standard? That's not us, that's the federal standard?
>> and that is the -- the -- in our agreement with the --
>> okay.
>> that's right.
>> it is federal -- okay.
>> so what -- what we are asking the board to approve is for our attorney to -- to issue them a letter giving them 60 days to regain compliance and in your backup exhibit a is -- is -- is a copy of a draft of that letter, that I will add that we did an examination and -- in 1999 and 2002 and this apartment complex at that time was not -- had the same issues and the same reason which was basically poor record keeping. And changeover in management staff and new staff coming in and not understanding the -- the rules of -- of bond projects, of affordable housing that you do have this record keeping requirement. And they have to be, you know, it takes them knowledge and attention to the detail of -- of keeping these records. So -- so if -- if -- what we recommend is that you -- that you authorize our attorney to issue the letter, mr. Blunt's reviewed all of this and concurs with -- this is the proper course of action. Then after the 60 day period as -- has run, then we would go back and do a follow-up audit and come back and make a report to you.
>> move that we approve the recommended letter, plus the attachment, authorizing mr. Blunt to send that to the -- to the apartment complex.
>> second.
>> any more discussion? All in favor? That passes by unanimous vote. 2. Consider and take appropriate action on request to approve (a) contract for construction management between Travis County and the Travis County housing finance corporation, and (b) agreement with Texas -- do we need to hold off on 2 until we do the county's part.
>> yes, sir, we do.
>> that makes sense to me. We will have two back on, probably next week, okay?
>> okay. 3. Consider and take appropriate action on request to (a) approve resolution authorizing filing of application with and paying application fee to the Texas bond review board to obtain an allocation of state volume cap for a single family mortgage revenue bond program in 2007, and (b) receive an update on the 2006 single family mortgage revenue bond program.
>> and I'm with -- with stacy houston from morgan keegan from dallas is here. She will address b and I will go over a with you. What -- what we are asking approval is to -- to make an application with the Texas bond review board to -- to get on the list to receive an allocation of private activity bonds with the -- with the -- with the possibility of doing a 2007 single family bond program. The application fee is $500. It allows the corporation to -- to be on the list with other housing finance corporations, and the -- they basically the state, the -- the allocation is given to -- to -- to local corporations, just they go down the list until the money runs out. You are on the list, the top one on the list is the entities that have been the longest time without receiving an allocation. This corporation received an allocation last spring. If a whole bunch of people get on the list, we would probably be further down than some of the other people that hadn't gotten an allocation recently. In the past, couple of years because of the interrate market. There has not been sufficient demand for funds. Less demand than funds. So it's been easy to receive an allocation we recommend -- we haven't gone and put in an application to be on the list during the period when you are -- when you are -- when you make an application. The dead line is October the 22nd. We have -- because there was excess funds you could get on the list whenever you are ready to do the program. Because interest rates have risen, there's more demand to -- and need of these funds, so we recommend going ahead and getting on the list so that -- so that there's a better chance of receiving an allocation. Because of our 2006 bond program has done so well that it may well make sense to do another single family bond program in 2007. And I will say that our financial advisor and -- and cliff blunt, our attorney, concur with the recommendation.
>> that's why our financial advisor is here today.
>> yes, sir.
>> I wondered.
>> why he stayed, yes, sir.
>> ms. Houston, welcome.
>> yes, thank you very much. Thanks, harvey, thank you very much to be here, I just wanted to go over the handout that I believe harvey handed out earlier to you. Just a quick summary to the board about the 2006 a single family bond program that we are working on right now or that is actually pretty much over for the most part. As you will see at the top, issuer, Travis County housing finance corporation. As far as professionals, knee man how we will, financial advisor, mr. Patillo ... Trustee wells forgive go and servicer city mortgage. The closing date was just a little over six months ago, which was April 4th of '06. As far as the rate and the down payment assistance, we received below market rate of a 595 mortgage rate thairks long with 4 points of down payment assistance, a non-repayable grant. Actually, by way of comparison, rates are about 635 to 640 at the moment, this is still very competitive program and a great rate. Especially when you add in that down payment assistance. As far as eligible loans, there's fha, va, rhs, the former usda, fannie mae twengsnal loans at a 30 year fixed rate mortgage. Our origination period was approximately 12 months. Again we close April 4th. We have until April 4th of '07 to go through this program. As you will see down here, we are already 91% originated through the program. Which is an excellent start, definitely an excellent program. As you are very aware of, there are three program requirements that we have listed here for you. Obviously first time home buyer, there's an income limit and a purchase price limit. And finally, just 10 lenders that are participating in this program. Some of the more notable lenders who have done extremely well in this program and have exceeded some of their allocation amounts, country-wide, dhi, home 1, 2, 3, they have all been excellent lenders in this program. We hope to get them for further programs of course. And in total over 102 loans have been originated in this program, so we have talked to over 100 families in the county in just six months. Those loans have totaled about over 13 million in funds and allocation for the program, which is like I mentioned earlier, 91% of the program has been originated in six months, I believe harvey added on there nine million of that money has been closed. So that's an excellent rate. All of the loans are now on a first come, first serve pool as it is mentioned on there. Which means that all of the lenders have access to all of the remaining funds, so we have been able to move that, move the funds a lot quicker. And pretty much the program is effectively completed except for the small targeted area reservation, which is held through the one year origination period. So through April. That -- that little amount that is remaining is just held specifically for those targeted areas. So --
>> so we have $1.4 million left.
>> remaining in it, exactly.
>> for targeted areas.
>> for the targeted areas, exactly.
>> all of the participating lenders know about the amount and the --
>> they are aware of it. We have definitely -- I have worked with the lenders for the most part and market the program. So whenever we have lender meetings and things like that, we also keep in touch with the lenders on a good basis as far as phone call, e-mails, letting them know that the funds are on a first come, first serve pool. There are still some targeted area funds reserved. So it's definitely one of the many things that harvey can tell you, we definitely keep in good touch with the lenders, they have been excellent lenders to have. We greatly appreciate the opportunity to serve the hfc, though.
>> the targeted areas are six, I believe it's six census tracts, all within the city of Austin and the eastern part of the city.
>> it's hard to move homes in those areas, that's why they are targeted, right if.
>> right. They are targeted because of the income of the census tract. But we have -- in this program we have done one loan so far in the targeted area.
>> do we think -- do we need to take more specific action or actions to promote the use of this money in the targeted areas? Or do we think it will happen whether we -- whether we proactively promote it or not?
>> well, we -- we proactively promote it as much as we are able to. In that -- in that certainly our office receives calls every day from -- from realtors, home buyers and some of the mortgage companies and will make them aware that they are funds remaining in the targeted areas and that we have made at least one loan in the targeted area so that they are -- I mean, there are homes there. I think realistically it would -- I don't believe we will be able to -- to make loans that we use all these funds in the targeted areas.
>> if we -- if we have 102 102 loans, only one in the targeted area, that tells me that somebody needs to do more to move them in the targeted areas. Otherwise we will have $1.4 million at the end of the program. Our goal is to spend 100% of the funds, right? Now, what happens at the end of the program if we still have 1.4 million left? Does that then become usable anywhere in Travis County?
>> well, you would have the option of extending the program and -- and by extending it, then after the one year -- after one year, those funds can be used in non-targeted areas. So the board could extend the program. The pros and cons of it, is it worth -- it's the cost of extending the program worth it for that amount of money.
>> I just think we ought to, if there are things that we can do, to -- to interest these lenders, or prospective buyers in purchasing in targeted areas we ought to do them. If there are not things that we can do, we ought to sadly sit by and wait until the expiration of the loan period. Just food for thought.
>> that's a good point, judge. Frankly I have not actually gone and driven through the targeted areas. I have looked at them on a map. So I'm, you know, generally aware of it. There's -- they are sort of scattered in other words targeted census tracts is not in one solid area, they are kind of scattered. I will do a little bit more work in finding, you know, kind of going and driving by, seeing if there -- there are really some good possibilities of -- of homes to purchase in those areas.
>> do you have the $500 in your budget, mr. Davis? To file the application for the --
>> it was -- we have sufficient funds to --
>> that's why I move approval.
>> second.
>> ms. Houston yes or no would help sometimes here at the Commissioners court. Mr. Davis doesn't like to do that. He likes to explain his answers, I don't blame him. All in favor? That passes by unanimous vote.
>> thank you all very much. 4. Consider and take appropriate action on request to approve minutes of board of directors meeting of July 18, 2006.
>> judge so move with the correction to the spelling of my last name in the body of the minutes.
>> all in favor? With the correction. That passes unanimously. Did you spell my name correctly in.
>> always, judge.
>> always.
>>
>> [indiscernible]
>> I second that. All in favor? That passes unanimous.
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Last Modified:
Tuesday, October 17, 2006 4:29 PM