Travis County Commissioners Court
June 10, 2008
Housing Finance Corporation
Let's call to order the Travis County housing finance corporation. Item number 1 is to consider and take appropriate action on request to execute a partial release of lien on 4600 acres lane in Austin colony only by Austin habitat for humanity, inc.
>> good afternoon, my name is mike gonzalez. Senior financial analyst with the corporation. Austin has been bat is closing on another lot and they are requesting a partial release of lien. As you remember back in July of 2006, the board approved 100,000-dollar grant to Austin has been bat for humanity for the -- habitat for humanity for eight lots in the Austin colony. As the lots are sold to home buyers, the lien is forgiven on that specific lot. You may remember in may of this year staff conducted a compliance review of the grant, and we found that no issues were cited and in fact there were doing an excellent job of qualifying and documenting all the home buyers. This one specifically is for mildred Davis. They're set to close on 4600 acres lane later this month. Ms. Davis first applied for the program back in April of 2007. By August 2007 she was what they call lot qualified. That means that her and her daughter completed 200 hours of volunteer work on homes, and also had completed 12 classes. By April 5th, 2008 they had completed all 400 hours that are required and 24 classes that are mandatory for her to complete. The Davis -- as the program administer's say, ms. Davis has become a good advocate for the program. She's gone around with different organizations speaking about how good the program is. And she's even showed interest in being a family partner. Family partners are individuals that actually come back and help other homeowners build their homes. It's been a great program. The house itself, the mortgage is going to be about 62,800, including the closing costs. The appraised value of the home will be approximately near 100,000. It's a three-bedroom, two bathhouse with 1,095 square feet. Staff has reviewed all the documents submitted by Austin habitat and recommend the release of lien be executed.
>> with that -- it's a great program and I’m really excited, especially in that particular area where that has really been a good location I think to autopsy a -- to raise a family and have this type of setting that has been embarked on. It's great -- I move approval of it. And looking forward to all the rest of these things that they're doing to make housing affordable, especially with the sweat equity phase of it. And it's a great program.
>> any more discussion?
>> let's make sure that nobody got in on this thing late and thought that this money went to 4600 acres. 4600 acres lane. Let's make sure somebody doesn't think that somebody just cashed in on 4600 acres.
>> lane, yeah.
>> it's 4600 acres lane.
>> that's a street.
>> that's a pretty good deal on that parcel, I guess.
>> 4600 acres.
>> all in favor? That passes by unanimous vote. Number 2 is to consider and take appropriate on action to refund wells fargo bank $6,773.30 due to overpayment of issuer fees for the 2006 single-family mortgage loan program.
>> harvey Davis, manager of the corporation. And if you recall, our 2006 single-family bond program was very successful. It was -- the amount of the program was $15 million, and we were oversubscribed by less than $200,000. The interest rate was 5.95% so with the four percent grant. So it was a good program, a great deal for the home buyer, especially in today's market where mortgage rates are going up. However, the trustee calculated our -- incorrectly calculated our issuer fee. We had an issuer fee of five percent, which is five percent of the amount of the pooled mortgage funds were paid a check each month. And the trustee used a nine percent issuer fee instead of a five percent issuer fee. She did send all the -- she paid us the incorrect issuer fee from November '06 to may of '08, so she had been paying it for a long time. And I have reviewed the calculation. She sent me all the backup of how the fee was determined each month, and I agree that -- in fact, we were overpaid by that amount and recommend that we comply with her request and send back $6,773.30.
>> so moved.
>> second.
>> she's not trying to hint to us that we ought to have a fee of nine percent instead of five, is she, mr. Davis?
>> no, she didn't mention that to us.
>> all in favor? That passes by unanimous vote. And item number 3, the final item today, consider and take appropriate action on request to approve resolution consenting to transfer of arboretum oaks apartments, f/k/a hamilton's mark apartments to ibk arboretum lp and approving the execution and delivery of an assignment, assumption and consent agreement between Travis County housing finance corporation, the trustee, the seller and the purchaser.
>> good afternoon, clint bluff with anyway man smith, how many and lee. Until yesterday it was a routine request to release the apartments incumbered by our bond program. I’ll let harvey speak in a minute, but harvey and mike gonzalez went out yesterday and performed an audit and there were I think some discrepancies would be the best way to say it in the record keeping. I’ve spoken with counsel for the seller, and they have requested that we go ahead and consent to this transfer, contingent upon completing the requirements for harvey's audit to be clean, I guess would be the best way to say it. I don't know, harvey, if you want to talk about what you found yesterday.
>> yeah. We were notified of this request early last week, so we were sort of on a short time line. As we try to do where there's a change of ownership -- and in fact, the current owner is a large, national housing company, developer, and the new owner is also a large, well qualified housing developer. But we go out and do an audit and see how things are in compliance. These bonds were issued in 1983, so it was a long time ago. And they are -- so their affordable housing requirements are under the old law. The law substantially changed in 1986, and so their requirements are that 20% of the tenants' income has to be less than 80% of the Austin area median family income, which is a lot higher than current requirements, which is less than 50% of the Austin area median family income. 50 or 60%. So like for a single person, that's 39,900, something like that. So it's quite easy to regain compliance. However when we went out there, the record keeping was not what it should be. As you are probably aware, to qualify the person, they have to fill out an income certification stating their income, they're not a full-time student, and this form normally is notarized. So it has to be properly done and then they have to have the backup records of pay stubs or tax return to substantiate that the income that's put on the income certification. But when we went out there, we found files that didn't have the income certification filled out or it had it filled out with only the tenant signing it, but no other information on it. And also, for the lower income tenants, they are required to recertify each year. They have to recertify at least once a year. And what they were doing out there is just doing an income certification, and then leaving it. And this is -- arboretum oaks is a very nice apartment complex. It's right next to the arboretum shopping center, so it's a great location. And so a lot of tenants stay in there a long time, so if they're not -- so there were a lot of tenants that were classified as low income that maybe did their income certification in the '90's and things like that. So they are -- I have put this issue on the agenda for week, but there are certainly compliance issues they need to address out there.
>> our approval is required?
>> the document -- the bond documents require our approval for transfer of the apartments. I think the issues on the certification and so forth are going to exist whether the current owner owns it or the new owner. What they've requested is just the formal approval today, and without delivery of the signed agreement until things are taken care of. But that's obviously your decision in how you want to --
>> this complex is 25 years old. We remain involved how long?
>> we remain involved for 15 years or until the bonds are paid off.
>> the refinance was in 1996, so it would be 15 years from 1996 if the bonds are paid off from them. If the bonds remain outstanding, then it will continue until that happens. Six with the refinancing the -- so with the refinancing, the original date of purchase of 1983 becomes irrelevant.
>> yes, the refinancing was 1996.
>> so we're in it until at least 2011.
>> yes.
>> move conditional improvement, authorize the president to with withhold zoning district.
>> can I make one other request?
>> I may not get a second to this motion.
>> [ laughter ]
>> second.
>> all right. That's conditional approval with the withholding the president's signature. And the third part we ought to add is...
>> and our request is that we charge a 3,000-dollar processing fee for our effort in considering their request.
>> do they know about that?
>> they know there's a fee. I don't believe I’ve communicated the amount, but I don't anticipate that that will be an issue. Our documents authorize a little bit more, but I think harvey has determined that that would be a reasonable amount for the time involved.
>> that we impose a 3,000-dollar fee.
>> sure.
>> our normal and routine fee.
>> yes, sir.
>> can I ask a question?
>> yes, sir.
>> so how difficult is it for them to actually turn around and get in compliance? Or do we with think that they are, they just don't have the documentation? Obviously you may have -- are they 98% occupied? Their occupancy is probably pretty great.
>> I believe the occupancy is very high. Our experience with similar knobs the past has been just the documentation was not being done correctly. And when the management came in and was made aware of the problem, they fairly easily got recertified. It's just a matter of getting those tenants into the office and having them do the recertification and providing the backup, which somebody could handle it in one afternoon or they may drag on for days or weeks getting that documentation in.
>> it just seems like that you're in an area out there where they very well could not have the folks that meet the threshold of the income limit.
>> well, this complex has 252 units, and so they have to have 50 low income units. And their reports they believe -- their latest reports had 168 tenants that they said fit that. And in my opinion it's -- that's fairly accurate.
>> wow.
>> isn't this a federal requirement?
>> yes, sir. First quarter they fail to meet the requirement, what happens to them?
>> it could ultimately affect the tax exempt status of the bonds. They have every incentive to go in there and get this corrected quickly.
>> when is the last time this had to come before the court for any sort of action?
>> we did an audit in 2004, and that was -- we gave them a good report in that audit. And we did an audit in 1999. And the issue at that time was they had too many -- they had too many very high income tenants, because you couldn't have more than 10 percent tenants be high income and that was defined as over 120% of the Austin area median family income.
>> and that's the reason I asked that question because I probably thought that's what you would find out there. But you're thinking that over half of their folks that live there, harvey, really will comply. Okay.
>> and that is, again, because the 80% figure is a pretty high figure.
>> you're not thinking that, they said that. Right?
>> right.
>> and from my looking at files and things.
>> three-part motion. All in favor? That passes by unanimous vote.
>> thank y'all.
>> move adjournment.
>> second.
>> all in favor? That passes by unanimous vote.
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Last Modified:
Tuesday, June 10, 2008 2:31 PM