Travis County Commissioners Court
July 22, 2008
Housing Finance Corporation
>> [captions began at 1:43 pm, one minute and thirty seconds into the meeting.] ...and these are revenue bonds, of course, not obligations of the housing finance corporation or Travis County, just payable from the mortgage assets. Your professional team is listed including mr. Blunt who was unable to join us today, he is out of town this week, but also, of course, our financial advisor who is with us here today, our bond counsel, wells fargo is our trustees, and city mortgage. We closed this on just almost exactly a year ago, July 26th of last year. In terms of the rate and the downpayment, we did a publicly sold premium synthetic step structure. The result was the issuer didn't have to put any money in to get the program closed and we were able to achieve a remarkable below market 30-year fixed rate. Each loan comes with 4% grant for downpayment closing cost assistance. I might mention by the way because so many issuers are concerned about the subprime crisis, how does this fit into this. We've mentioned this before, but this program is one of the tools against the subprime foreclosure crisis because these are a quality borrowers getting the loans. Number 2, you are giving them a 30-year fixed rate product. It's below market. And with the downpayment grant you are giving them instant equity. You are putting home buyers into a good position for long-term ownership in Travis County and the city of Austin. Our eligible loans are listed there, all 30-year fixed rate. Origination period was 12 months. It ends early next month and that's why we're here again today, number 1, to give you an update and number 2 to see if the board may 'to extend this program a few more months. Our program requirements, as you recall, section 143 of the federal tax code gives us three requirements for these programs listed there, income, purchase price and first time home buyer. At the bottom of the page most importantly lists our lenders, their original allocation and the amount they've used. The bottom line on your summary, of the 15.5 million we've done so far in the past 11 months, 96 loans totaling 12.9 million or 83% of the issue. All of these loans are on a first come, first served pool. Since we provided this report to you last week, actually the origination has jumped up to 86% so it's moving very well right now. In terms of the rate, conventional rates are absolutely above the 630 so with the downpayment grant it remains competitive. On the second page just a little additional summary gives you some of the demographics of our 2007 Travis County hfc program. I might draw your attention to the household income amount, 48,000. That is close to 80% of area median family income for a family of two in the household so you are hitting a good demographic of low to moderate income of first time homeowners. The loan types are listed for you. They are obviously doing more fha than conventional. And a breakdown by mailing address and the city and the county and only thing I might add about that is of our almost 100 loans to date, approximately 70% in the city of Austin. So we do, judge and Commissioners, appreciate the partnership with the city of Austin and appreciate them working with the housing finance corporation and look forward to continuing that beneficial partnership. I want to thank you for the opportunity for our team to work with the county on this. They've been wonderful programs. Obviously you've put a lot of first time home buyers into the american dream of homeownership. Congratulations. I'd be happy to chance any questions about the program. Thank you.
>> questions? Okay. Let's go to number 2 which is consider and take appropriate action on request to approve a resolution extending the mortgage loan origination period for the $15.5 million Travis County housing finance corporation single-family mortgage revenue and refunding bonds. Series 2007-8.
>> and what we're asking the board to approve is a six-month extension, and let me briefly go over the reasons why we believe an extension should be given of this program. First of all, as mark has explained, the mortgage rate is below market. The freddie mac on their website they have the 30-year rate. It's 6.37. The second reason is that there is -- because of the market conditions, they are not really other bond programs available to home buyers. So to use a bond program this is in effect the only game in town. The state often has bond programs that sometimes have better rates, but they do not have a bond program at this time or a competitive one. This -- the extension -- the main reason is that we feel really confident that we can fully originate the $15.5 million, and like the prior year, the '06 program, we extended it and fully originated the $15 million for that program. And the corporation does receive small income stream, and, of course, if the corporation makes more mortgages, then that issuer fee is a little bit higher. And then finally, the cost to extend the program is small. I estimate that it would be no more than $4,000, which is the rating service of $1,500, and there may be a bond counsel fee, but otherwise everyone else is -- you know, they were paid at the time of the bonds were issued and there were not be other professional fees.
>> questions?
>> move approval.
>> second.
>> discussion? All in favor? That passes by unanimous vote. With director eckhardt absent. 3 is consider and take appropriate action on request to approve invoice for legal services rendered and expenses incurred.
>> this is an invoice from fulbright and jaworski for their examination of the lake view apartment bonds. If you recall, we hired fulbright for those -- for that audit. The amount of the invoice is 3,474.18 cents. $3,474.18. I do represent to the board that her time is reasonable. We have -- I worked very closely with her an extensive amount of time in June to prepare and send the appropriate information to the agent, and it was quite a bit of work so I do feel that her time was very reasonable as far as the hours that were put in. I must say the staff put in a lot more hours than that too.
>> move approval.
>> second.
>> is that the hourly rate we agreed to?
>> yes, sir.
>> that was reported to us before we approved it?
>> yes, I'll double-check. I'm certain that there are was the hourly rate.
>> I know we took one week to --
>> right, and we did a survey of other -- what other firms charge, but attorneys aren't cheap.
>> there's money to be made in the legal field.
>> we might go back to it, judge.
>> [laughter]
>> all in favor? That passes by unanimous vote.
>> move adjourn.
>> second.
>> all in favor? That passes by unanimous vote.
>> thank you all.
>> thank you all very much. Just a little note there, Commissioner Daugherty, that capital metro vacancy meeting is Friday, 9:30 a.m. I think it's here in the courtroom.
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Last Modified:
Tuesday, July 22, 2008 1:51 PM