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HHFC seeks committee support to assign $65 million in single-family mortgage volume cap to TDHCA
Summary
Houston Housing Finance Corporation and the Texas Department of Housing and Community Affairs asked the City of Houston committee to support a resolution assigning $65 million in single-family mortgage revenue bond volume cap to TDHCA, which officials said would fund local loans, down payment assistance and marketing for first-time buyers.
Houston Housing Finance Corporation asked the City of Houston Housing and Affordability Committee to endorse a resolution authorizing HHFC to assign $65 million of its single-family mortgage revenue bond volume cap to the Texas Department of Housing and Community Affairs so TDHCA can issue mortgage revenue bonds and originate loans on HHFC's behalf.
Richard Mudd, executive director of the Houston Housing Finance Corporation, told the committee the partnership “offers a meaningful opportunity for HHFC and TDHCA to share resources, expand capacity, and increase affordable single family home ownership opportunities for family in the Houston area.” He asked members to move the resolution forward to full council.
Scott Fletcher, deputy executive director of housing finance at TDHCA, explained that volume cap is the federal authorization that allows tax-exempt private activity bonds and that Texas received “just over $4,000,000,000” in volume cap last year. He described TDHCA's program as one that issues mortgage revenue bonds, funds down payment assistance (DPA), manages lender relationships and provides marketing and education on behalf of local Housing Finance Corporations.
Fletcher provided Houston-specific figures to illustrate likely program impact: TDHCA has made about $92,000,000 in single-family mortgage loans in Houston over roughly the last two years (about 374 loans), made 161 market-based loans tied to DPA programs, and funded roughly $3,700,000 in total DPA in Houston with an average DPA of about $7,900 per borrower. He said the agency tracks activity and provides quarterly reports to local HFCs.
On potential scale, Fletcher said the proposed assignment of $65,000,000 in volume cap would enable TDHCA to originate approximately that amount in loans in Houston and noted the volume cap reservation lasts for three years. Council members asked whether the city’s own down payment assistance could be stacked with TDHCA programs; Fletcher confirmed program stacking and local partnerships are supported, and that TDHCA would continue marketing and lender outreach locally.
The presenters said TDHCA assumes issuance and compliance risk and charges HFCs a 4.75 basis-point fee on funds utilized, and that the assignment is intended to ensure Houston-assigned cap is used within the city's jurisdiction. HHFC and TDHCA officials said they would be available to brief colleagues who did not attend before the item reaches the full city council.
Next steps: presenters requested committee support to refer the resolution to full council for final approval. If approved, the assignment would allow TDHCA to originate loans and provide DPA and outreach in Houston under the assigned cap.
