The TDHCA convened its board meeting at 10:00 am on July 6, 2023, at the TxDOT Greer Building, Williamson Board Room 125 E. 11th Street, Austin, TX. Consent Agenda & Consent Report approved.
July 6 Meeting Summary
TAAHP Staff attended the board meeting and summarized its main takeaways.
AGENDA ITEM 15: Executive Director’s Report
Bobby Wilkinson Executive Director, TDHCA
- Texas Rent Relief is near the end. TDHCA is working to disperse 2.4 million in remaining funds.
- Homeowner assistance fund (HAF) is active. The HAF program is federally funded that can help Texan residents with overdue mortgage payments, property tax, homeowners’ insurance, HOA fees and now recently utilities assistance. TDHCA has approved funding for 43,000 households. They have disbursed over $484 million, with an additional $1.2 million in progress. Average $11,151 assistance per household. Shutting down intake centers because program is becoming oversubscribed.
- The Governor did not veto any TDHCA related legislation. TDHCA has begun working on the implementation of the bills passed.
ACTION REPORT ITEMS
AGENDA ITEM 16: Quarterly report relating to staff-issued Determination Notices for 2022 and 2023 Non-competitive 4% Housing Tax Credit applications.
Teresa Morales, Director of Multifamily Bonds
- Thirteen determination notices issued which represent approximately 2,600 total units and $28.6 million in annual 4% HTCs.
- The 2023 credit activity bond ceiling is $3.6 billion and there are approximately $5.4 billion in eligible requests with many of those being multifamily.
- TDHCA is currently reviewing 43 applications for a total of 9,232 units.
- For this year, there are 31 new construction projects and 28 acquisition rehabs.
Multifamily Finance
Cody Campbell & Colin Nickells
Agenda Item 13: Presentation, discussion, and possible action on an award of Emergency Rental Assistance (ERA2) funds for Freedom’s Path at Waco (23500)
- Staff recommends an ERA2 funds loan and the amount of $1,550,000 for Freedoms Path at Waco, a multifamily housing development located in Waco, Texas.
- Adaptive reuse of 34 units that will serve an unhoused veteran population. This development will be entirely efficiency units with rent income levels from 30 to 60% of the area median income or AMI. Out of the total 34 units, 20 will be ERA2 units restricted to 50% of the AMI, all of which carry a 30-year affordability.
- This deal is a part of the U.S. Department of Veterans Affairs to help end homelessness amongveterans by converting unused portions of VA campuses to functional housing.
- Twenty six of the 34 units will be located within the three renovated historic structures located on the site that the VA donated to the development. Among the Department of Veterans Affairs and TDHCA, the Waco Housing Authority, Stan Parker Foundation, Doris Miller VA Medical Center, the Heart of Texas Veterans One Stop program and the Heart of Texas Homelessness Coalition are all working in tandem.
- Board unanimously approves staff recommendation on Item 13, to award ERA2 funds to Freedom’s Path at Waco (23500)
Agenda Item 15: Presentation, discussion, and possible action on multiple requests for return and reallocation of tax credits under 10 TAC §11.6(5) related to Credit Returns Resulting from Force Majeure Events for Applications previously awarded 9% housing tax credits
- Nine requests to return and reallocate credits under the department’s force majeure rule.
- These requests are similar to those for the requests approved during the previous board meeting and include rising interest rates and inflation supply chain disruptions and labor shortages as significant contributing factors.
- The volume of requests over the last couple months is consistent with the results conduct of a survey conducted by the Texas Affiliation of Affordable Housing Providers, which concluded that 80% of respondents with an allocation of 2022 credits said that they expect to request force majeure treatment.
- Staff has begun thinking of ways to mitigate against future force majeure requests by bringing back the concept of readiness to proceed by offering a point incentive for applicants that agree not to request force majeure.
- This calendar year, TDHCA has approved 23 requests for force majeure treatment. That’s around half of the awards that were made in 2022.
- The Board unanimously approves staff recommendation to approve the force majuererequests.
Meeting adjourned at 10:38 am
The next TDHCA board meeting is on July 27, 2023.
July 27 Meeting Summary
The TDHCA convened its board meeting at 10:00 am on July 27, 2023, at the TxDOT Greer Building, Williamson Board Room 125 E. 11th Street, Austin, TX. Consent Agenda & Consent Report approved.
AGENDA ITEM 10: Executive Director’s Report
Bobby Wilkinson Executive Director, TDHCA
- Texas Rent Relief has ended. TDHCA distributed 2.2 billion in temporary federal rent and utility assistance to more than 323,000 Texas households impacted by COVID 19.
- The Texas Eviction Diversion program, which was a subset of rent relief, was a partnership between the Supreme Court, Texas, the Office of Court Administration and TDHCA has now ended as well. The program was the first statewide eviction diversion program in Texas, and through it more than 25,000 renter households that were facing eviction received more than 243 million in rent, and utility assistance had their evictions stopped, and had their court records made confidential.
- Homeowner assistance fund (HAF) is active. Expended about 72% of the total allocation so far. TDHCA has approved funding for 45,000 households. They have disbursed over $505 million, with an additional $1.4 million in progress from 360 households. Average $11,106 assistance per household.
- Texas Utility Help Program has distributed to date a hundred million, helping about 41,500 households with the average amount of assistance around $2,485. The program roughly has about 35 million left available in funding.
ASSET MANAGEMENT
AGENDA ITEM 22: Presentation, discussion, and possible action regarding an increase to the Housing Tax Credit amount for Tays North (HTC #18439)
Teresa Morales, Director of Multifamily Bonds
- The development incurred increased cost during construction. The comparison of the development cost from the time of application in 2018 to cost certification indicates that the total development cost increased approximately $22.7 million or 46.77% from $48.5 million to $71.2 million.
- The recommended developer fee increased approximately $3.9 million from $5.7 million to $9.6 million, which is the amount limited by the rules and lower than the developer fee claimed by the owner. The recommended deferred developer fee increased from $974,000 approximately to $2.9 million.
- The board discussed how the higher cost structure led to an increase in the developer fee.
- “They are getting a higher interest rate realized on their note which triggers higher developer fees of which they share in the developer fees”
- The board asked staff to consider a future rule that would limit the increase in the developer fee.
- The Board approves the request from Tays North (#18439) for an increase in 4% housing tax credits
Housing Resource Center
AGENDA ITEM 27: Presentation, discussion, and possible action on the 2024 Regional Allocation Formula Methodology
- The RAF methodology measures the need for housing assistance, availability of housing resources and other factors relevant to the equitable distribution of housing funds in both urban and rural areas of the state.
- The draft was approved in May, held a 30-day public comment period, had a public hearing, and was shared on the listservs. No public comment was provided.
- The Board approves the 2024 Regional Allocation Formula (RAF) Methodology.
Legal
AGENDA ITEM 30: Presentation, discussion, and possible action on recommendation to debar Jared Remington for conduct relating to Hillcrest Apartments (HTC 060615 / 060615B / CMTS 4342)
- TDHCA’s enforcement committee recommends that Jared Remington receive a 10-year department debarment with a partial possible probationary reinstatement after five years.
- The purpose of debarment is to bar non-performing owners from future participation in department programs for a specified term, preventing them from applying for new funding opportunities or purchasing further properties monitored by the department during that term. It would not cause an owner to lose any of their existing properties, nor would it prevent that owner from participating further in any existing engagements that have already been funded. It also does not limit their responsibilities or duties at any of their current properties.
- The committee did not find malicious intent by Mr. Remington, but they found that he reacted poorly to a distressed property, failed to ensure proper management and resources. He did not ensure adequate training and he failed to provide any meaningful oversight over his property managers.
- >T>he Board affirms staff recommendation to debar Jared Remington for conduct relating to Hillcrest Apartments>.
Multifamily Finance
AGENDA ITEM 33: Presentation, discussion, and possible action on multiple requests for return and reallocation of tax credits under 10 TAC §11.6(5) related to Credit Returns Resulting from Force Majeure Events for Applications previously awarded 9% housing tax credits 22090 Lofts at Hartsook 22091 Oak Lofts Crossing 22135 Red Oaks
- Three requests to return and be reallocated credits under the department’s force majeure rule.
- Reasons for seeking force majeures include rising interest rates and inflation, supply chain disruptions and labor shortages as significant contributing factors and are similar to the requests that were approved by the board in recent meetings.
- The board approved these requests and staff will now execute a 2023 carryover allocation agreement for each. That will extend the placed-in-service deadline to December 31st, 2025.
- >T>he Board approves the three requests in Item 33 for the return and reallocation of tax credits under 10 TAC §11.6(5) related to Credit Returns Resulting from Force Majeure Events for Applications previously awarded 9% housing tax credits.
AGENDA ITEM 34: Presentation, discussion, and possible action regarding awards to 2023 State Competitive Housing Tax Credit Applicants and approval of the waiting list for the 2023 Competitive Housing Tax Credit Application Round
- 92 full applications were submitted in March, 85 of which are still active. This is a significant reduction from 2022 when 127 full applications were submitted.
- The 85 applications collectively request approximately $121 million in tax credits.
- Staff is recommending 54 applications for an award of funding. These 54 awards plus the supplemental credits awarded earlier this year totaled just over $86 million, which has a 10-year value of about $860 million.
- Represent financing for about 3,100 low-income units.
- About a thousand of these are rehabilitation or reconstruction and the remaining 2,100 are new construction.
- The average total 10-year tax credit per door this year is about $240,000 and the average award is approximately $1.4 million.
- These numbers represent a noticeable change from last year when the awards total to about 4,000 low-income units averaging to about $180,000 per door with an average award of $1.2 million.
- The largest amounts that were available this year were in the Dallas and Houston regions, each of which initially got about $16 million in credits.
- There were four full credit returns totaling 4.5 million in credits that served as an additionalsource of funding for this year’s awards.
- Staff identified one forward commitment of 2024 tax credits for an application in the urban subregion.
- As determined solely by the board, staff is recommending that the board consider this forward commitment on the basis that the underperforming school that you may remember discussed at the June board meeting not being reported on the district’s website was unforeseen and could be considered extenuating.
- The Board approves the recommended 9% competitive housing tax credit awards and waiting list from staff for the 2023 round.
Meeting adjourned at 1:31 PM
Next TDHCA Meeting: Thursday, September 7, 2023