Frequently Asked Questions for the Media

What makes your agency and its programs different from others, such as the Texas Department of Housing and Community Affairs?
While the bond financing mechanism of MRB single family homebuying programs are very similar, the intended targets the programs are designed to reach often vary, from a very general scope of low-to-moderate income homebuyers, to a more narrowly defined potential homebuyer description. In this case, the intended target for the TSAHC single family programs has been narrowly defined to include only professional educators, firefighters, and police officers as designated by the Texas Legislature to reward and encourage persons working in these professions to continue by offering them a greater chance of achieving homeownership.

For our multifamily programs, TSAHC researches and then identifies the areas of the state with the greatest housing needs, and with local agencies, determines which tenant populations to reach, what services would best meet their needs, and so on. TSAHC then states those requirements in Request for Proposals (RFPs) that it issues prior to taking applications from developers. This method differs from other multifamily programs, which traditionally have been largely developer-driven; that is, a developer decided where to provide the development and simply requested funding or tax credits.

How are you self-supporting?
TSAHC generates revenue from program fees, investment income, and some grants, so there is no state appropriation for our operations, and no obligations on behalf of the state to repay our bonds. Our bondholders are paid from program proceeds, such as rental income that is derived from the multifamily housing.

I’m new to the world of bond programs and don’t understand some of the terms. Is there a resource available to me to assist us in writing about your program?
A Glossary of frequently referenced terms can be found here.

Why would a lender want to participate? Do they make money off this program?
As with any loan financing, a lender receives some processing and origination fees. TSAHC verifies fees charged by lenders and does not allow for any excessive fees. The Lender also sells its loans to a Master Servicer that actually services the loan to the homebuyer.

Are lenders given a specific reserved amount that they are allowed to issue as home loans?
No, there are no reserved allocations under this program; all loans are issued under a first-come, first-served basis.

Aren’t foreclosure rates higher under bond programs or assisted programs, than regular conventional mortgages?
There is no evidence to suggest that single family bond programs experience a higher incidence of foreclosures than conventional home financing. Foreclosures are often dictated by periods of economic uncertainty, and thus cut across many incomes and geographical regions.

TSAHC homebuying programs adhere to standard underwriting procedures set by each participating lender. As such, the lenders underwriting and credit criteria is the same for a TSAHC program loan as it is for a conventional program loan. What makes qualification and thus homebuying easier under our programs is primarily the lower interest rate offered by the MRB funding, and other enhancements such as down payment and/or closing cost assistance.

Where can I find a listing of upcoming Board meetings, or other public meetings held throughout the state?
A listing of all public meetings can be found on our website, or click here. Agendas for the board meetings can also be found here.

How much in bonds have you issued since you started bond programs?
As of the last calendar quarter of 2003, TSAHC has issued $487 million in MRBs that have been used to finance multifamily development. For its single family programs, TSAHC receives an allocation of bonds issued by the state and has so far issued $25 million.

Why is the target for the single-family programs so narrow?
The Texas Legislature determined that a concentrated focus on a special population would round out available state programs. Firefighters and police officers, and professional educators, were selected for their necessary service to the state, and the devotion it takes to continue in these professions at pay scales that frequently presentbarriers to homeownership. These two homebuying programs are designed to reward this devotion, provide an incentive to continue working in these noble professions, and stimulate homebuying in the communities where these professionals work.

Where does TSAHC get its authority?
TSAHC’s powers are authorized in the Texas Administrative Code §2306.555.

Who oversees your agency?
Oversight of TSAHC operations is provided legislatively through Sunset Review, but also through adherence to state and federal laws. As a bond-issuing agency, TSAHC must follow federal laws that dictate MRB programs, and both the Texas Bond Review Board and the Texas Attorney General must approve TSAHC bond obligations prior to their issuance.

How has the state bond cap been allocated?
Provisions to SB 284 allocate 10 percent of the State’s private activity bond (PAB) cap for multifamily affordable housing to TSAHC, thus reducing the allocations to TDHCA and local housing finance corporations.

Does TSAHC have sole discretion in its award of PABs?
TSAHC recommends to the Bond Review Board (BRB) what projects should be funded with its share of the private activity bonds. The BRB reviews and approves all recommendations. The Texas Attorney General also reviews and approves bond obligations before they are issued.

Also, TSAHC shares compliance information with TDHCA if an applicant has a history with one or both organizations, and that overall compliance history with either or both agencies is considered before funds are awarded.