Innovative Bond Financing Nets TDHCA $10 Million in Flexible Funding
(AUSTIN - 3/29/02) - The Texas Department of Housing and Community Affairs (TDHCA) announced March 27 that it closed its $10 million Taxable Junior Lien Single Family Mortgage Revenue Bonds, Series 2002A. This transaction will provide the Department with funds far more flexible than the tax-exempt single family mortgage revenue bonds TDHCA typically issues.
The Department, as a result, will be able to use these dollars on a wider array of housing programs targeting populations with the greatest need but which are often the most difficult to serve.
The Internal Revenue Code restricts the use of tax-exempt bond proceeds to funding below-market rate mortgage loans for low- and moderate-income households purchasing their first home. Because TDHCA's recent bond transaction involved taxable bonds, there is no such restriction on the proceeds. The Department is free to move these funds into other programs targeting difficult to serve populations.
The $10 million will be earmarked to serve:
- Extremely low-income households (0-30 percent of the area median family income)
- Low-income individuals with special needs (the elderly, frail elderly, persons with disabilities, persons with AIDS, persons with alcohol and/or drug addiction, victims of domestic abuse, and public housing residents)
- Colonia residents, persons living in substandard housing developments most often located along the Texas-Mexico border
- Homeless persons
Additionally, the Department intends to focus on preserving existing affordable housing and increasing homeownership opportunities for low-income households.
Some of the Department's programs the $10 million will be channeled into include: the Texas Bootstrap Owner/Builder Program, which provides homeownership opportunities primarily among colonia residents; the Down Payment Assistance Program, increasing homeownership opportunities among low-income households statewide; the Statewide Architectural Barrier Removal Program, which develops and promotes housing accessible to persons with disabilities; and transitional housing pilot programs primarily serving homeless persons.