Glossary of Terms

Affordable Housing
Housing where the occupant is paying no more than 30 percent (of gross income for gross housing costs, including utility costs. Housing that is for purchase (with or without rehabilitation) qualifies as affordable housing if it (1) is purchased by a low-income, first-time home buyer who will make the housing his or her principal residence; and (2) has a sale price that does not exceed the mortgages limit for type of single family housing for the area under HUD's single family insuring authority under the National Housing Act.

AMFI
Area Median Family Income

Amortization
The process of paying the principal amount of an issue of bonds by periodic payments either directly to bondholders or to a sinking fund for the benefit of bondholders. Payments are usually calculated to include interest in addition to a partial payment of the original principal amount.

Arbitrage
Generally, transactions by which securities are bought and sold in different markets at the same time for the sake of the profit arising from a difference in the two markets. With respect to the issuance of municipal bonds, arbitrage usually refers to the difference between the interest paid on the bonds issued and the interest earned by investing the bond proceeds in other securities. Arbitrage profits are permitted on bond proceeds for various temporary periods after issuance of municipal bonds. Internal Revenue Service regulations govern arbitrage of municipal bond proceeds.

Asset Oversight
Duties performed in conjunction with multifamily bond financed properties. Asset oversight typically entails monitoring aspects relating to the property and periodically reporting that information to the owner of the property as well as other parties that may be involved. Asset oversight duties are primarily restricted to defined physical audits of the property and monitoring the financial covenants and agreements in applicable loan agreements.

Basis Point
A measure of interest rate equal to 0.01% (or .0001). Basis Points are typically used to describe the difference between two interest rate indices or to express the changes in any one index from one point in time to another.

Bond
An instrument which evidences a debt obligation between the Issuer and Investor.

Bond Review Board (Texas)
The Bond Review Board's mission is to ensure that debt financing is used prudently to meet Texas' infrastructure needs and other public purposes, to support and enhance the debt issuance and debt management functions of state and local entities, and to administer the state's private activity bond allocation.

Capacity Building
Educational and organizational support assistance to promote the ability of community housing development organizations and nonprofit organizations to maintain, rehabilitate and construct housing for low and very low-income person and families. This activity may include, but is not limited to: 1) Organizational support to cover expenses for training, technical, and other assistance to the board of directors, staff, and members of the non-profit organization or community housing development organization, 2) Program support including technical assistance and training related to housing development, housing management, or other subjects related to the provision of housing or housing services, and 3) Studies and analyses of housing needs.

CDBG
Community Development Block Grant.

CDC
Community Development Corporation.

CDFI
Community Development Financial Institution

CHDO or CHODO
Community Housing Development Organizations.

Colonia
An identifiable unincorporated area located within one hundred and fifty (150) miles of the Texas-Mexico border that lacks infrastructure and decent housing.

Commitment Fee
A fee paid to the Issuer by a lender to secure the right to originate a specific portion of the available program funds. Typically these funds are used by the Issuer to pay all or a portion of the costs of issuance of the issue.

Contract for Deed
A financing arrangement for the sale of property whereby land ownership remains with the seller until the total purchase price is paid.

Cost of Issuance
The cost associated with the issuance of a single family mortgage revenue bond issue or a multifamily revenue bond issue. Costs of issuance typically include Bond Counsel Fees, Financial Advisory Fees, Issuer Counsel Fees, Trustee's Fees, and Trustee's Counsel Fees.

Disability
According to the U.S. Department of Housing and Urban Development, a person shall be considered to have a disability if the person is determined to have a physical, mental, or emotional impairment that: (1) is expected to be of long-continued and indefinite duration, (2) substantially impeded his or her ability to live independently, and (3) is of such a nature that the ability could be improved by more suitable housing conditions. A person shall also be considered to have a disability or he or she has a developmental disability as defined in the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6001-6006). The term also includes the surviving member or members or any household described in the first sentence of this paragraph who were living in an assisted unit with the deceased member of the household at the time of his or her death. According to the ICIDH disabilities reflects the consequences of a bodily impairment in terms of functional performance.

Down Payment Assistance
Funds which are provided by the Issuer or another third party which can be used to offset a portion of the borrower's down payment.

Elderly Household
A family in which the head of the household or a spouse is at least sixty-two years of age.

Existing Homeowner
An owner-occupant of residential property who holds legal title to the property and who uses the property as his or her principal residence.

Extremely Low Income
Household Incomes less than or equal to 30 percent of AMFI.

Fair Housing Act
Title VIII of the Federal Civil Rights Act of 1968, as amended in 1988 (the Fair Housing Amendments Act of 1988, 42 U.S.C., section 3601, et. seq).

Family
A household comprised of one or more individuals. (The National Affordable Housing Act (NAHA) definition required to be used in the CHAS rule - equivalent to Census definition of householder (head of household) and one or more other persons living in the same household who are related by birth, marriage or adoption. The term "household" is used in combination with the term "related" in the CHAS instructions, when compatibility with the Census definition of family (for reports and data available from the Census based upon that definition) is dictated.

Federal Housing Administration (FHA)
An agency of the Federal Government whose charge is to assist in providing housing for underprivileged citizens.

FHEO
Office of Fair Housing and Equal Opportunity

FHLB
Federal Home Loan Bank

Financial Advisor
An individual or group of individuals who are hired by the Issuer to represent their interests in structuring a single family mortgage revenue bond issue or a multifamily revenue bond issue.

Fire Fighter
Program definition - a paid firefighter working for a fire department of a municipality in the State of Texas. Firefighter includes employees who perform: fire suppression, fire prevention, fire training, fire safety education, fire maintenance, fire communications, fire medical emergency technology, fire photography, fire administration, or fire arson investigation.

First-Time Home Buyer
A first-time homebuyer is an individual or family that has not owned or had ownership interest in any residence during the last three years preceding closing. An exception to this requirement exists only if the home to be purchased is located in a targeted area.

FNMA
Federal National Mortgage Association (Fannie Mae) is one of two private corporations whose charter is authorized and guaranteed by the Federal Government. Their charge is to provide liquidity to mortgage lenders by providing a guaranty to mortgage loans which gives them liquidity in the secondary mortgage markets.

GNMA
Government National Mortgage Association (Ginnie Mae) is a wholly-owned corporate instrumentality of the United States within the Department of Housing and Urban Development (HUD). GNMA is charged with providing a guaranty to mortgage-backed securities which are backed by a pool of mortgage loans insured by FHA, VA, or USRD.

Grant
An award of financial assistance the principal purpose of which is to transfer a thing of value from a Federal/State agency to a recipient to carry out a public purpose.

Guaranteed Investment Agreement/Contract (GIC)
An Agreement between a private corporation and the Trustee pursuant to which funds held under the Indenture are invested. Funds invested in a GIC are secured by the full faith and credit of the provider of the Agreement. Since GICs involve a significant portion of the assets of the Indenture, the rating on the bonds is often dependent upon the credit rating of the GIC provider.

HOME
The HOME Investment Partnerships Act, which is Title II of the National Affordable Housing Act.

Household
One or more persons occupying a housing unit (U.S. Census definition). (See also "Family.")

Housing Unit
An occupied or vacant house, apartment, or a single room (SRO Housing) that is intended as separate living quarters (U.S. Census definition).

HTF
Housing Trust fund

HUB
Historically Underutilized Business. A HUB is defined as a business entity that is at least 51 percent owned by an African American, Hispanic, American, Asian-Pacific American, Native American, or a woman of any ethnicity.

HUD
The United States Department of Housing and Urban Development.

Interest Rate
The annual percentage of the principal amount payable for the use of borrowed money.

Issuer
A government instrumentality which is authorized to sell bonds to investors and to obligate themselves or enter into Indentures for the repayment of bonds.

Lender
An intermediary which is authorized to underwrite mortgage loans to either FHA, VA, USRD, FNMA, or FHLMC standards, to fund such mortgage loans, and to sell them to a secondary market source.

LIHTC
(Federal) Low-income Housing Tax Credit administered in Texas by the Texas Department of Housing and Community Affairs.

Local Government
A county; an incorporated municipality; a special district; any other legally constituted political subdivision of the State; a public, nonprofit housing finance corporation created under Chapter 394, Local Government code Texas revised Civil Statues; or a combination of any of the entities described here.

Low Income
Household whose incomes do not exceed 80 percent of the median income for the area, as determined by HUD with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 80 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes. NOTE: HUD income limits are updated annually and are available from local HUD offices for the appropriate jurisdictions.

Moderate Income
Households whose incomes are between 81 percent and 95 percent of the median income for the area, as determined by HUD, with adjustments for smaller or larger families, except that HUD may establish income ceilings higher or lower than 95 percent of the prevailing levels of construction costs or fair market rents, or unusually high of low family incomes. (This definition is unique to the CHAS).

Owner
A household that owns the housing unit it occupies. (U.S. Census definition).

Participating Jurisdiction
Any jurisdiction that has been so designated by HUD in accordance with 92.105.

PHA
Public Housing Agency

Police Officer
Program definition - be a full time paid police officer working for a police department of a municipality in the state of Texas.

Primary Residence
A primary or principal residence is the home in which you intend to live in on a permanent basis.

Professional Educator
For purposes of this program, a professional educator is a teacher, full-time paid teacher’s aide, librarian, school counselor, and school nurse, as defined by Subchapter B., Chapter 21 of the Texas Education Code.

Project-Based (Rental Assistance)
Rental Assistance provided for a project, not for a specific tenant. Tenants receiving project-based rental assistance give up the right to that assistance upon moving from the project.

Public Housing
Any state, county, municipality or other government entity or public body (or its agency or instrumentality) that is authorized to engage in or assist in the development or operation of low-income housing.

Revenue Bonds
Bonds payable from a specific source of revenue and which do not pledge the full faith and credit of the Issuer. Revenue bonds do not permit the bondholders to compel taxation or legislative appropriation of funds not pledged for payment of debt service. Pledged revenues may be derived from the operation of the financed project, grants, and excise or other specified non-ad valorem taxes. Generally, no election is required prior to issuance or validation of revenue bonds.

RFP
Request For Proposals

Rural
(Population) Rural is a type-of-area concept rather than a specific area outlined on a map. As defined by the Census Bureau, an urban population comprises all persons living in urbanized areas (UA's) and in places 2,500 or more inhabitants outside UA's. The rural population consists of everyone else. Therefore, a rural classification need not imply farm residence or a sparsely settled area, since a small city or town is rural as long as it is outside a UA and has fewer than 2,500 inhabitants.

SLIHP
State Low Income Housing Plan and Annual Report

Targeted Area
That part of the Eligible Loan Area that has been or may be designated from time to time as a qualified census tract or an area of chronic economic distress in accordance with section 143(j)(3) of the IRS Code or as a qualified census tract in accordance with section 143(i)(2) of the IRS Code. Not all counties have targeted areas.

TDHCA
Texas Department of Housing and Community Affairs

TEA
Texas Education Agency

TSAHC
Texas State Affordable Housing Corporation

TSHEP
Texas Statewide Homebuyer Education Programs

Urban and Rural
(Population) Urban is a type of area concept rather than a specific area outlined on a map. As defined by the Census Bureau, the urban population comprises all persons living in urbanized areas (UAs) and in places of 2,500 or more inhabitants outside UA's. The rural population consists of everyone else.

VA
Veterans' Administration, an agency of the United States of America