How to Participate in A TSAHC Multifamily Private Activity Bond Program

Forms and Fees

After identifying targeted geographic areas across the state, TSAHC will issue a request for proposal (RFP) for multifamily developments in each targeted area. The RFP will set forth the required development characteristics, and must follow these steps to determine if the general guidelines (applicable to both TSAHC's general Private Activity Bond (PAB) and 501(c)(3) programs) have been met. Specific program information can be found by clicking here for PAB and clicking here for 501(c)(3).

In addition to meeting these guidelines, the applicant must pay all costs with the awarded bond financing. While some costs may be financed through bond proceeds and will be considered part of the authorized issued obligations, federal tax law provides that only two percent of the proceeds of a tax-exempt bond offering may be used to pay “costs of issuance.” All other fees – processing, closing, administrative, trustee and review – are your responsibility and are due within 10 days of receiving an invoice from TSAHC or its advisors.

A list of some of these fees and expenses follows:

Processing Fees

• $500 per multifamily development unit, with a minimum of $1000, payable to TSAHC.

• $2000 each to TSAHC's financial advisor and bond counsel.

• Single property – $35,000 ($20,000 for bond counsel, $10,000 for financial advisor, and $5,000 for issuer's counsel).

• Multiple properties – $50,000 ($30,000 for bond counsel, $10,000 for financial advisor, $5,000 for issuer's counsel).

• All costs and expenditures incurred by TSAHC during application review (e.g., fees for on-site visits; reports not otherwise supplied; public hearings and related meetings; and any other activities, investigations, or inspections).

Closing Fees (not meant to be inclusive)

Includes fees and expenses not covered by deposits to bond counsel, financial advisor, issuer's counsel, or other consultants; any closing or acceptance fees of any trustee for the obligations; fees and premiums for casualty and title insurance; compliance agent fees; or any other out-of-pocket expenses occurred by professionals acting on behalf of TSAHC, or other costs and expenses related to issuance of the bonds, their security, and the transaction. Additionally, a closing fee of .40 per $1,000 principal amount of obligations issued (minimum $5000) must be paid to TSAHC.

Administrative Fees

The applicant pays TSAHC an administrative fee – generally through the bond trustee – until the final maturity of the obligations. The amount of this fee is equal to 10 basis points annually of the aggregate outstanding principal, with a minimum annual of $5,000. The payment is covered by the bond credit enhancement and/or secured under the first mortgage on the property assigned to the bond trustee. TSAHC may require that payment of this fee be guaranteed by the development owner and/or general partner(s). This fee does not include the trustee's fee, compliance fee, rebate analyst's fee, asset oversight management fee (if required), audit fee, independent analyst fee, or any other costs or extraordinary costs permitted under the bond documents, as noted below.

Trustee's Fees

You will select a bond trustee from a list of TSAHC-approved trustees to administer the funds and accounts pursuant to the trust indenture between TSAHC and the trustee bank. Fees and expenses (including those of trustee's counsel) are approved by TSAHC and the applicant.

Other Review Fees

TSAHC may find it necessary to engage other professional services for auditing, compliance, or analysis. The applicant will be responsible for these fees and costs.

Step 1: Submitting a Proposal

We will accept proposals in response to the RFPs during a specified submission period. Click here for an application. Each proposal will be evaluated and scored, with the highest-ranking proposals being presented to the TSAHC Board for approval. There is no assurance that we will select a proposal in each targeted area, even if proposals for housing developments in each targeted area are received.

TSAHC's Board of Directors will interview those applicants receiving the highest scoring or ranking, as determined by TSAHC staff.

Step 2: Board Interviews

Applicants selected for the initial Board interviews can expect to review information with the board such as financial feasibility of the proposed development; commitment of long-term development financing sources; long-term affordability of rents for low-income tenants; and related affordable housing priorities. Priority will be given to those developments that demonstrate best evidence of meeting those criteria, and may increase or decrease the original staff scoring.

Step 3: Preliminary Approval

The Board may take official action in the form of a preliminary approval known as an “inducement resolution.” This means TSAHC will adopt what's known as an “inducement resolution” of its intent to issue obligations to finance the proposed development if all requirements are met. This period is valid for 12 months, and extensions are only provided under certain conditions. Applicants not given this preliminary approval will be notified.

Step 4: Public Notices

TSAHC is required to hold public meetings and hearings prior to final approval from its Board. For detailed information on the requirements of the Texas Equity and Fiscal Responsibility Act (TEFRA) and other required notices, click here .

If either TSAHC or the applicant becomes aware of any concerns or opposition from the residents or any member(s) of the public, the applicant must address these concerns and coordinate meetings – with a TSAHC representative in attendance – at or near the development so that questions and/or concerns can be aired and discussed.

Step 5: Final Approval

Only after the public hearings will the Board take final action on an application. With TSAHC staff input and recommendations, an application will be considered for approval only if the Board is satisfied that all requirements have been met, and that the operation of the proposed development is lawful, qualified, and furthers TSAHC's mission.

Step 6: Know Your Continuing Costs

The following is paid to TSAHC (standard amounts listed unless otherwise modified in individual agreements):

Annual
Oversight fee - $25 per unit
Compliance fee - $20 per unit
Other fees or administrative costs as required.

We will also charge a minimum of $1500, plus expenses, for any assumption of an outstanding bond issue for a development previously financed by us.

Step 7: Compliance

TSAHC has devised a convenient way for you to submit your compliance reports online. It is imperative that the compliance reports be filed in a timely manner. Your ability to comply with the necessary monitoring and reporting requirements could affect future financing considerations with TSAHC as well as with other housing finance agencies in Texas .