january board meeting to be held at the offices of texas ... · 1/23/2014 · january board...

January Board Meeting To be held at the offices of

Texas State Affordable Housing Corporation 2200 East Martin Luther King Jr. Blvd.

Austin, TX 78702

Thursday, January 23, 2014

10:30 a.m.

BOARD MEETING TEXAS STATE AFFORDABLE HOUSING CORPORATION

To be held at the offices of Texas State Affordable Housing Corporation

2200 East Martin Luther King Jr. Blvd Austin, Texas 78702

January 23, 2014 at 10:30 am CALL TO ORDER, ROLL CALL Bob Jones CERTIFICATION OF QUORUM Chair The Board of Directors of Texas State Affordable Housing Corporation will meet to consider and possibly act on the following: PUBLIC COMMENT PRESIDENT’S REPORT David Long

Tab A: Homeownership Finance Report Tab B: Development Finance Report Tab C: Marketing and Development Report Tab D: Monthly Budget and Investment Reports

ACTION ITEMS IN OPEN MEETING: Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board Meeting held on December 12, 2013. Tab 2 Presentation, Discussion and Possible Approval of a Resolution to Appoint Mr. Julian Alvarez as a Member of the

Advisory Council for the Texas Foundations Fund, to Remove Mr. Donald R. Bethel as a Member of Said Advisory Council, and to Restate, Ratify and Affirm the Persons Holding the Position of Member of Said Advisory Council.

Tab 3 Presentation, Discussion and Possible Approval of the Appointment of Members to the Board of Directors of Texas

Community Capital, LLC. Tab 4 Presentation, Discussion and Possible Approval of the Release of the Corporation’s Request for Proposal for

Independent Financial Auditor. Tab 5 Presentation, Discussion and Possible Approval of the Release of the Corporation’s Request for Proposal for Single

Family Trustee Services. Tab 6 Review, Discussion and Possible Approval of the 2013 Annual Performance Review of the President of the

Corporation and related actions. CLOSED MEETING Consultation with legal counsel on legal matters – Texas Government Code § 551.071 Deliberation regarding purchase, exchange, lease, or value of real property – Texas Government Code § 551.072 Deliberation regarding prospective gift or donation to the state or Texas State Affordable Housing Corporation – Texas Government Code § 551.073 Personnel Matters – Texas Government Code § 551.074 Implementation of security personnel or devices – Texas Government Code § 551.076 Other matters authorized under the Texas Government Code OPEN MEETING Action in Open Meeting on Items Discussed in Closed Meeting ADJOURN Individuals who require auxiliary aids or services for this meeting should contact Laura Ross, ADA Responsible Employee, at 512-477-3560 or Relay Texas at 1-800-735-2989 at least two days before the meeting so that the appropriate arrangements can be made. Texas State Affordable Housing Corporation reserves the right to recess this meeting (without adjourning) and convene at a later stated time, if and to the extent allowed by law. If Texas State Affordable Housing Corporation adjourns this meeting and reconvenes at a later time, the later meeting will be held in the same location as this meeting. Texas State Affordable Housing Corporation also reserves the right to proceed into a closed meeting during the meeting in accordance with the Open Meetings Act, Chapter 551 of the Texas Government Code. If permitted by the Open Meetings Act, Chapter 551 of the Texas Government Code, any item on this Agenda to be discussed in open meeting may also be discussed by the Board (and any other authorized persons) in closed meeting.

PRESIDENT’S REPORT

Homeownership Program with Downpayment AssistanceJanuary 1, 2013 to January 13, 2014

Month Originated # of Loans % Total At a Glance January 13 $14,114,326 114 6% Total Amount Originated $232,831,819February 13 $14,398,644 115 6% Average Annual Income $41,970March 13 $18,899,330 160 8% Average Purchase Price $124,857April 13 $20,349,116 170 9% Average Loan Amount $122,093May 13 $27,458,490 229 12% Average Household Size 2June 13 $27,276,171 221 12% Interest Rates % # of LoansJuly 13 $20,315,595 169 9% 3.5 36August 13 $17,899,097 149 8% 3.75 258September 13 $16,613,222 137 7% 3.875 108October 13 $19,408,940 156 8% 4 360November 13 $13,867,428 108 6% 4.25 16December 13 $17,649,093 143 7% 4.375 55January 14 $4,582,367 36 2% 4.5 213Totals $232,831,819 1907 100% 4.625 3

4.75 213Lender Originated # of Loans % Total 4.875 104

Cornerstone Home Lending, Inc. $43,185,784 342 18% 5 323NTFN, Inc. $21,216,784 176 9% 5.125 30Guild Mortgage Corporaton $15,725,197 131 7% 5.25 188Rocky Mountain Mortgage Company $14,745,199 125 7% Program %Everett Financial dba Supreme Lending $11,797,326 91 5% Home Sweet Texas (80% AMFI) 61.93%First CommunityMortgage $10,769,626 104 5% Homes for Texas Heroes 38.07%Houstonian Mortgage Group, Inc. $10,186,154 95 5% Teacher 25.90%DHI Mortgage Company, Ltd. $8,373,429 59 3% Peace Officer 3.62%PrimeLending $7,680,166 67 4% Fire Fighter 2.99%Pulte Mortgage LLC $7,227,275 50 3% Corrections Officer 2.05%WR Starkey Mortgage, LLP $7,162,503 65 3% Public Security Officer 0.58%Universal American Mortgage Company $6,085,768 42 2% EMS Personnel 0.58%Gateway Mortgage Group, LLC $5,886,129 54 3% Professional Nursing Faculty 0.52%Affiliated Bank $5,633,579 45 2% Teacher's Aide 0.47%Fairway Independent Mortgage Corporation $5,560,863 49 3% School Librarian 0.26%Interlinc Mortgage Services, LLC $4,728,837 36 2% County Jailer 0.21%Wells Fargo Bank, N.A. $4,375,464 38 2% School Nurse 0.16%Primary Residential Mortgage, Inc. $4,361,131 36 2% School Counselor 0.16%Aspire Financial, Inc. $4,168,830 36 2% Allied Health Faculty 0.16%Nationstar Mortgage LLC $3,657,806 28 1% Veteran 0.00%Envoy Mortgage $2,420,794 20 1% New/Existing HomeHometrust Mortgage Company $1,938,531 17 1% Existing 69.38%Network Funding, LP $1,753,496 13 1% New 30.62%TXL Mortgage Corp. dba Baymont Financial $1,727,279 12 1% Type of LoanAcademy Mortgage Corporation $1,709,004 16 1% FHA Purchase 97.17%Ark La Tex Financial dba Benchmark Mortgage $1,627,843 12 1% VA Purchase 1.42%Georgetown Mortgage, LLC $1,604,894 13 1% USDA RHS Purch. 1.36%iMortgage.com, Inc. $1,591,330 10 1% FHA Refinance 0.05%SFMC, LP (Service First Mortgage) $1,517,402 12 1% EthnicityOne Mortgage, Inc. $1,354,939 10 1% White 43.35%SWBC Mortgage Corporation $1,179,691 10 1% Hispanic 34.29%Movement Mortgage, LLC $1,155,782 9 0% Black 17.81%Resmac, Inc. $1,145,998 9 0% Not Defined 2.24%Cendera Funding, Inc. $1,007,555 7 0% Asian/Pacific Islander 1.73%Republic StateMortgage Company $937,339 8 0% American Indian/Alaskan Native 0.34%Castle and Cooke Mortgage $923,330 8 0% Other 0.24%Colonial Savings, F.A. $914,116 7 0% Top 20 Originating Counties # of LoansHome Financing Unlimited, Inc. $841,979 5 0% Harris 350K Hovnanian American Mortgage, LLC $774,976 5 0% El Paso 255First National Bank $727,183 7 0% Tarrant 193Evolve Bank & Trust $512,817 4 0% Dallas 183IberiaBank Mortgage Company $470,322 5 0% Bexar 152Sun West Mortgage Company, Inc. $454,987 3 0% Travis 117Sente Mortgage Inc. $421,032 3 0% Cameron 79Real Estate Mortgage Network, Inc. $379,792 3 0% Williamson 65Global Advisory Group, Inc. $349,540 3 0% Hidalgo 57RMCMortgage Corporation $332,391 2 0% Fort Bend 51The Lending Partners, LLC $250,381 2 0% Collin 49Open Mortgage LLC $119,691 1 0% Denton 36LHM Financial Corporation dba CNNMortgage $87,387 1 0% Bell 35Highlands Residential Mortgage $72,168 1 0% Galveston 30Total Committed $232,831,819 1907 100% Montgomery 26

Brazoria 21Ellis 19Johnson 19Comal 18Hays 12

2012BMortgage Credit Certificate ProgramFebruary 1, 2013 to January 13, 2014

Month Originated # of Loans % Total At a Glance January 13 $249,399 1 0% Total Amount Originated $61,584,613February 13 $3,096,216 23 5% Average Annual Income $40,089March 13 $3,579,823 28 6% Average Purchase Price $136,027April 13 $4,885,495 38 8% Average Loan Amount $131,310May 13 $5,078,298 39 8% Average Household Size 2June 13 $7,314,783 54 12% Average Interest Rate 4.409July 13 $7,154,868 54 12% Program %August 13 $6,796,737 52 11% Home Sweet Texas (80% AMFI) 76.12%September 13 $5,884,711 45 10% Homes for Texas Heroes 23.88%October 13 $6,798,176 54 12% Teacher 15.35%November 13 $6,054,060 45 10% Peace Officer 3.20%December 13 $3,970,078 30 6% Professional Nursing Faculty 1.28%January 14 $721,969 6 1% Corrections Officer 1.07%

Totals $61,584,613 469 100% Fire Fighter 0.64%School Librarian 0.64%

Lender Originated # of Loans % Total Teacher's Aide 0.64%Cornerstone Home Lending, Inc. $15,851,213 121 26% Allied Health Faculty 0.43%Universal American Mortgage Company $8,871,379 57 12% EMS Personnel 0.21%Guild Mortgage Corporation $4,505,236 37 8% School Counselor 0.21%Everett Financial dba Supreme Lending $3,940,266 29 6% Public Security Officer 0.21%Nationstar Mortgage LLC $3,156,658 23 5% County Jailer 0.00%DHI Mortgage Company, Ltd. $3,052,570 21 4% School Nurse 0.00%Aspire Financial, Inc. $2,936,913 25 5% Veteran 0.00%Interlinc Mortgage Services, LLC $1,729,874 11 2% New/Existing HomeGateway Mortgage Group, LLC $1,696,958 15 3% Existing 55.65%NTFN, Inc. $1,405,892 11 2% New 44.35%WR Starkey Mortgage, LLP $1,212,890 11 2% Type of LoanHoustonian Mortgage Group, Inc. $1,201,905 12 3% FHA Purchase 82.09%Wells Fargo Bank, N.A. $1,108,092 10 2% USDA RHS Purch. 11.30%Primary Residential Mortgage, Inc. $1,041,512 9 2% Conv. Purch. 4.69%Hometrust Mortgage Company $895,602 8 2% VA Purchase 1.92%Bank of America, N.A. $842,796 8 2% EthnicityPrimeLending $688,547 6 1% White 41.61%Affiliated Bank $677,237 5 1% Hispanic 27.09%TXL Mortgage Corporation dba Baymont Financial $649,257 4 1% Black 25.38%Sun West Mortgage Company, Inc. $592,237 4 1% Asian/Pacific Islander 2.38%One Mortgage, Inc. $544,610 4 1% Not Defined 1.89%Movement Mortgage, LLC $521,870 4 1% Other 1.18%Republic State Mortgage Company $464,862 4 1% American Indian/Alaskan Native 0.47%Network Funding, LP $416,308 3 1% Top 20 Originating Counties # of LoansiMortgage.com, Inc. $406,501 2 0% Harris 170Georgetown Mortgage, LLC $338,202 3 1% Travis 51C&T Mortgage $295,264 2 0% Dallas 32Ark La Tex Financial dba Benchmark Mortgage $279,902 2 0% Williamson 31Real EstateMortgage Network, Inc. $254,111 2 0% Bexar 29AmeriPro Funding, Inc. $229,318 2 0% Tarrant 28SWBC Mortgage Corporation $206,496 1 0% Fort Bend 24Capstar Lending, LLC $198,400 1 0% Hays 13IberiaBank Mortgage Company $185,576 2 0% Collin 12Fairway Independent Mortgage Corporation $181,724 1 0% Galveston 11Sente Mortgage Inc. $168,393 1 0% Brazoria 8Security National Mortgage Company $141,784 1 0% Denton 8Nations Reliable Lending, LLC $133,536 1 0% Montgomery 8Resmac, Inc. $120,280 1 0% Hidalgo 5SFMC, LP (Service First Mortgage) $117,826 1 0% Kaufman 4First National Bank $95,733 1 0% Bastrop 3The Lending Partners, LLC $93,279 1 0% Comal 3Highlands Residential Mortgage $72,168 1 0% Guadalupe 2Castle and Cooke Mortgage $61,436 1 0% Houston 2Total Committed $61,584,613 469 100% Wood 2

Total Allocation $69,722,531Remaining to Commit $8,137,918

Texas State Affordable Housing Corporation Development Finance Programs Report

January 2014

Affordable Communities of Texas Program As expected, our land banking activity slowed considerably over the holiday season. Acquisitions were slow with only 3 new properties closed and one new sales contract accepted. Staff did complete the sale of 5 homes, including one Texas NSP property in Bryan, Texas, and has 5 additional sales scheduled to close by the end of February. Staff is also coordinating with the National Community Stabilization Trust and Bank of America for onsite program visits to be held at our offices in late February. We are excited by the opportunity to show off our program success and hope to become a best practice example for other partners in this national initiative. Here is a summary of our current portfolio.

ACT Current Portfolio Program Units Value

ACT Land Bank 97 $1,286,496 ACT Land Trust 60 $650,000 Texas NSP 268 $5,116,337 Veteran's Initiative 39 $3,362,640

Totals 464 $10,415,473 Lending Programs The Corporation’s loan committee plans to review one new application for our interim construction and land acquisition program (ICAP) that was submitted in December 2013. The potential new line of credit would be used to fund the renovation of more than 10 homes, most participating in our ACT Veterans Initiative and located in the Houston metro area. The applicant, Woman Inc., has been providing supportive services and housing to low-income women and their families for nearly 20 years. Multifamily Bond Programs Activity in the Corporation’s bond program has been focused on existing portfolios. The refinancing of Aguila Oaks is moving forward with final documentation. The plan for disposing of the HDSA portfolio is moving forward, but progress was slow over the holiday break. We are hopeful that a final agreement will be completed sometime in February. Staff also received notice from the South Texas Affordable Housing Project (STAHP) that they are planning to sell the portfolio this year. The portfolio consists of 6 properties financed in 2001 through the Corporation’s 501(c)3 bond program. The owner began marketing the properties for sale in December 2013, and we hope to have a resolution authorizing the Corporation to negotiate and move forward with the disposition at our February board meeting.

Texas State Affordable Housing Corporation

Marketing/Development Activity Report October – December 2013

Date Category Activity Summary

October - December

Marketing Staff continues to promote the homeownership programs by presenting to realtor and lender groups across the state. Staff made 5 presentations during this report’s time period.

October Development Staff submits a $10,000 grant request to State Farm to support TSHEP.

November Marketing Staff begins work on a search engine optimization project for TSAHC’s website, to be complete by June 2014.

November Development TSAHC receives a $150,000 grant from Wells Fargo’s Priority Markets program. The grant will be used for acquisition or rehabilitation of blighted or foreclosed properties in San Antonio and El Paso as part of TSAHC’s ACT program.

November Marketing Staff begins work on creating an online application for the Texas Foundations Fund program.

November Development TSAHC receives a $5000 charitable contribution from Advisory Council member Chris Bergmann for support of the Texas Foundations Fund.

December Marketing Staff meets with Veterans Land Board to increase awareness of the homes available under the ACT-Vet program.

December Marketing Staff works with Trademark Media to migrate the Texas Financial Toolbox website to a more user-friendly content management system.

December Marketing Staff begins works with Trademark Media to create the Counselor Connection forum on TSAHC’s website.

December Development TSAHC receives a $15,000 grant from Wells Fargo for foreclosure prevention and related activities.

December Development TSAHC creates a sponsorship program for the Texas Financial Toolbox site targeted to realtors.

December Development TSAHC receives a $30,000 grant from the Texas Financial Education Endowment for funding of TSHEP in 2014.

Ongoing Development Staff continues to meet with Advisory Council members to discuss fundraising plans in 2014.

Ongoing Development Staff continues to submit progress reports required by funders for grants received.

Ongoing Government Relations Staff continues to respond to information requests from legislative offices.

Ongoing Marketing Staff continues to advertise homebuyer programs on Google Ads.

Texas State Affordable Housing Corporation

Marketing/Development Activity Report October – December 2013

Ongoing Marketing Staff continues to advertise TSAHC’s homebuyer programs in the newsletters and websites of the following organizations: Texas Jail Association, Texas Municipal Police Association, Association of Texas Professional Educators, State Fireman’s and Fire Marshall’s Association of Texas, Texas Commission on Law Enforcement Officer Standards and Education and Texas State Firefighters’ Association.

TEXAS STATE AFFORDABLE HOUSING CORPORATIONSTATEMENT OF NET ASSETS (unaudited)As of November 30, 2013

ASSETSCurrent Assets

Cash and Cash Equivalents $ 5,564,654Restricted Assets Held by Bond Trustee:

Cash and Cash Equivalents 6,035,795Short-term Investments, at Fair Market Value -Accrued Interest 295,038

Custodial Cash and Cash Equivalents 296,169Investments, at Fair Market Value 2,123,900Accounts Receivable & Accrued Revenue, Net of uncollectible amts. of $874,372 73,889Accrued Interest Receivable 52,137Loans Receivable, Current Portion 81,000Notes Receivable, Current Portion 132,369Downpayment Assistance, Current Portion 2,312,265Prepaid Expenses 47,754

Total Current Assets: 17,014,970

Noncurrent AssetsLoans Receivable, Net of uncollectible amounts of $91,726 730,005Notes Receivable 4,107,212Investments, at Fair Market Value 510,248Mortgage Servicing Rights, Net of Accumulated Amortization of $2,232,555 490,047Fixed Assets, Net of Accumulated Depreciation of $407,710 1,543,864Owned Real Estate, Federal & Other Programs 9,969,640Bond Issuance Costs, Net of Amortization of $4,495,642 2,688,320Downpayment Assistance 3,669,787Restricted Investments Held by Bond Trustee, at Fair Market Value 177,267,858

Total Noncurrent Assets: 200,976,981

TOTAL ASSETS $ 217,991,951

(continued)

TEXAS STATE AFFORDABLE HOUSING CORPORATIONSTATEMENT OF NET ASSETS - Continued (unaudited)As of November 30, 2013

LIABILITIES Current Liabilities

Accounts Payable and Accrued Expenses $ 125,884Notes Payable, Current Portion 648,255Custodial Reserve Funds 297,629Other Current Liabilities 54,327Payable from Restricted Assets Held by Bond Trustee:

Bonds Payable, Current Portion 2,107,579Accrued Interest on Bonds 1,318,576

Total Current Liabilities: 4,552,250Noncurrent Liabilities

Notes Payable 3,178,210Revenue Bonds Payable 173,394,174Due to Federal Programs 4,134,227Deferred Revenue 328,531

Total Noncurrent Liabilities: 181,035,142

Total Liabilities: 185,587,392NET POSITION

Invested in Capital Assets 1,543,864Restricted Assets 15,754,312Unrestricted Net Assets 15,106,383

Total Net Position: $ 32,404,559

TEXAS STATE AFFORDABLE HOUSING CORPORATIONSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (unaudited)for the 3 months ending November 30, 2013

Operating Revenues Interest and Investment Income $ 2,102,568 Net Increase (Decrease) in Fair Value of Investments 318,751 Single Family Income 621,290 Asset Oversight and Compliance Fees 84,600 Loan Servicing Fees, Net of subservicer fees of $13,337 37,591 Multifamily Income 91,476 Public Support Federal Grants 85,541 Contributions 675,955 Other Operating Revenue 226,626 Total Operating Revenues $ 4,244,398

Operating Expenses Interest Expense on Bonds and Notes Payable $ 2,009,548 Salaries, Wages and Payroll Related Costs 508,242 Professional Fees and Services 45,498 Amortization 327,963 Office and Equipment Rental and Maintenance 8,727 Travel and Meals 24,021 Depreciation 27,780 Program and Loan Administration 399,013 Grant Expenditures 48,138 Foundation Fund Grants 255,000 Other Operating Expenses 60,485 Total Operating Expenses $ 3,714,415

Net Income 529,983

Total Net Position, Beginning 31,874,576

Total Net Position, Ending $ 32,404,559

BOARD MEETING TEXAS STATE AFFORDABLE HOUSING CORPORATION

Held at the offices of Texas State Affordable Housing Corporation

2200 E. Martin Luther King Jr. Blvd. Austin, TX 78702

December 12, 2013 at 10:30 am

Summary of Minutes

Call to Order, Roll Call Certification of Quorum The Board Meeting of the Texas State Affordable Housing Corporation (the “Corporation”) was called to order by Bob Jones, Chair, at 10:35 am, on December 12, 2013, at the offices of Texas State Affordable Housing Corporation, 2200 E. Martin Luther King Jr. Blvd, Austin, TX 78702. Roll Call certified that a quorum was present. Members Present Bob Jones, Chair Bill Dietz, Vice Chair Jerry Romero, Member Gerry Evenwel, Member Members Absent Alex Meade, Member Staff Present Betsy Aldrich, Senior Accountant Tim Almquist, Single Family Compliance Manager Liz Bayless, Executive Vice President David Danenfelzer, Manager of Development Finance Delia Davila, Single Family Compliance Specialist Sarah Ellinor, Homeownership Programs Coordinator Katie Howard, Senior Development Coordinator Nick Lawrence, Controller Charlie Leal, Government Relations Specialist David Long, President Paige Omohundro, Homeownership Finance Manager Laura Ross, Corporate Secretary Melinda Smith, Chief Financial Officer Janie Taylor, Development & Strategic Communications Manager Mindy Taylor, Manager of Multifamily Oversight Guests Steven Bolden, Mahomes Bolden Bill Gehrig, Greenberg Traurig

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Katy Livingston, Greenberg Traurig Don Mikeska, Mikeska Monahan & Peckham Robin Miller, First Southwest Company Public Comment No public comment was given. Audit Committee Report Mr. Dietz and Ms. Smith reported that during their meeting that morning, the Audit Committee had reviewed the financial audit for fiscal year 2013 and voted to approve it for presentation to the full board. Mr. Mikeska had presented the audit to the Committee and would also provide a short presentation to the board under Tab 2. Ms. Smith noted that the Audit Committee had also discussed changes to the Guidelines that had been suggested by the Committee at the previous meeting held in August. Mr. Dietz reported that the Committee had approved those changes and the revised Guidelines would be presented to the board under Tab 3. President’s Report Mr. Long referred the board to program reports included in the board packet and asked for any questions. He informed the board that staff was moving forward with creating an online application for the Texas Foundations Fund. He explained that because so many applications had been received during the previous funding round, staff felt an online application would be more efficient and would streamline the application process for future funding rounds. Mr. Long reported that he, Mr. Meade and Mr. Romero had met with a potential candidate to serve on the Foundation’s Fund Advisory Council representing South Texas. Mr. Long stated that Ms. Bayless had been in contact and had forwarded him an informational packet regarding the position. Mr. Long informed the board that the Corporation continued to administer the National Foreclosure Mitigation Counseling (NFMC) program in partnership with TDHCA. We were currently in the 7th round of funding, which would extend through June 30, 2014. Mr. Long informed the board that under Round 7, $325,000 in funding had been awarded which would go to reimburse 10 partner counseling organizations for their counseling services, as well as provide program related support funding. Mr. Long informed the board that Ms. Omohundro and Ms. Ellinor continued to participate in the Texas Association of Realtors United Texas trainings. He stated that the Corporation had recently sponsored an Austin National Association of Hispanic Real Estate Professionals homebuyer event, which staff also attended. Mr. Long reported that 13 individuals had registered so far for the February 2014 training of the Texas Statewide Homebuyer Education Program (TSHEP). Mr. Long informed the board of guests in attendance at the meeting today: Ms. Livingston and Mr. Gehrig, both with Greenberg Traurig; Mr. Miller with First Southwest Company; Mr. Bolden with Mahomes Bolden; and Mr. Mikeska with Mikeska Monahan and Peckham.

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Regarding the next Board Meeting, Mr. Long pointed out that the second Thursday fell very early in January so he suggested they move the meeting to later in the month. Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board

Meeting held on November 14, 2013. Mr. Jones referred to page 4 of the minutes, and discussed how the language could better highlight the Corporation’s gain on the investment portfolio, and how the gain was commendable given our strict investment guidelines and the low performing market. Mr. Jones did not request that the minutes be changed. Turning to the last page, Mr. Jones asked that the Court Reporter’s name (Ms. Penny Bynum) be specified in the paragraph under Open Meeting. Also referring to the last page, discussion briefly turned to staff presentations on the Corporation’s programs. Mr. Long noted that staff would always be available to meet if a board member wanted to learn more about the programs, and that staff would provide information to the full board about significant updates and changes to the programs. Mr. Jones noted that the staff presentations during the meeting had been very beneficial. Mr. Long left it to the board’s discretion, but added that in addition to one-on-one meetings at our offices, staff could also travel to meet with the members in their hometowns. Mr. Evenwel made a motion to approve the minutes with the inclusion of the court reporter’s name. Mr. Romero seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken and the motion passed unanimously. Tab 2 Presentation, Discussion and Possible Approval of the Annual Independent

Financial Audit for the Fiscal Year Ending August 31, 2013. Ms. Smith informed the board that Corporation’s annual financial audit was due to the Comptroller of Public Accounts on December 20, 2013. She explained that the Corporation is considered a component of the State of Texas and because of this, the Corporation’s audit would be included in the statewide financial statements issued in January or February. Mr. Mikeska, the Corporation’s auditor, explained that the Corporation is considered a component of the state because the board is appointed by the Governor. As auditor, he would report directly to the State Auditor’s Office (SAO), who is responsible for all entities and agencies that were part of the statewide financial statements. His work papers would also be open to review by the SAO. Turning to the audit, Mr. Mikeska stated that the independent auditor’s opinion was a clean, unmodified opinion. This meant there was no reason to qualify the opinion and there were no findings or questioned costs. Moving on to the yellow book opinion, the audit conducted in accordance with Government Auditing Standards, he stated that it contained no findings related to compliance with laws, grievance contracts and other requirements that could have a bearing on the financial statements. Lastly, Mr. Mikeska turned to the Single Audit which was conducted in accordance with OMB-A133. The major federal program audited this year was NFMC and he reported that there were no findings or questioned costs. Mr. Mikeska briefly discussed the financial statements beginning with the Statement of Net Position. He pointed out that the largest asset were the bonds held by the bond trustee for the single family bond program. Also of note under Assets were the cash and cash equivalents

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totaling $3 million, as well as investments totaling $3.5 million. Under noncurrent assets, he pointed out that owned real estate had grown substantially to $10 million - $6.6 million were properties donated to the Corporation by Bank of America and the remainder were properties acquired under the Neighborhood Stabilization Program (NSP). All told, the line item encompassed 500 properties. Turning to liabilities, he pointed out that current liabilities totaled $5.8 million while current assets totaled $23 million. He noted the biggest liabilities were related to the single family bond program. Current bonds payable equaled $2.4 million and long term bonds payable equaled $191 million. The net position of the Corporation was $31 million. This included $1.5 million invested in capital assets such as the office building, furniture and computer equipment. Also included were restricted assets for debt service totaling $16 million and unrestricted assets totaling $14 million. He then briefly went over the Statement of Revenues, Expenses and Changes in Net Position. He noted the biggest item under Revenues was the interest earned on the mortgage backed securities (MBS) totaling $10 million. He also pointed out the decrease in fair value investments of $11 million, which reflected the marking to market of the MBS. This year there was a decline in the fair market value of the securities which was why the statement reflected a loss. Mr. Mikeska recalled that this was an issue the Corporation faced every year, because they were required by Governmental Auditing Standards bulletin (GASB) 31 to record assets at fair market value. He explained that the loss would not be realized as long as the Corporation intends to hold the MBS until they are paid off. By holding the securities to maturity, the Corporation would receive face value for the securities, not fair market value. Still on the topic of Revenue, Mr. Mikeska pointed out $3.9 million in single family income due largely to the TBA program, as well as $577,000 in federal grants that represented the NFMC and NSP programs. Lastly, he discussed the $6.6 million representing the properties donated to the Corporation by Bank of America for the ACT Veterans program. Turning to the Expenses, he pointed out that the largest expense was the interest paid on the single family bonds, followed by salaries and wages. He then went over the rest of the expenses, including $300,000 for grants issued under the Texas Foundations Fund, as well as funds expended under the NFMC and NSP programs. He turned to the Cash Flow Statement and discussed it in detail, noting the net decrease in cash of $17 million, which was attributable to the normal paydowns in the Single Family bond program. Mr. Mikeska then turned to the footnotes. He referred the board to “Note 24: Subsequent Events” on pages 41 and 42 and stated that the only noteworthy subsequent event was the multifamily bond issue in Georgetown, which occurred after the end of the fiscal year. Turning to “Note 25: Non-cash Contributions”, he explained that these were primarily the home donations made by Bank of America and Wells Fargo. “Note 26: Continuance Subject to Review” explained that the Corporation would be reviewed by the Sunset Advisory Commission in September 2023. Mr. Mikeska then turned to “Schedule of Expenditures of Federal Awards” on page 44. He stated that this was made up of the NSP and the NFMC programs. He noted that the NSP program was winding down and wouldn’t receive any more funds. Also, Round 7 of NFMC would be wrapping up in 2014. Page 46 contained the yellow book opinion, which was the audit conducted

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in accordance with Governmental Auditing Standards. He noted again that it was an unmodified, clean report with no findings. Mr. Jones asked about the Management letter. Mr. Mikeska explained that it was a “non-management” management letter because there were no findings, no questioned costs and no significant deficiencies or material weaknesses in internal control. Mr. Mikeska stated that typically a management letter would not be issued if there were no findings, questioned costs or issues that needed to be reported. He explained that he was supplying the letter to the Corporation because grantors like to see one when reviewing audits and grant applications. The letter stated that there were no material weaknesses or significant deficiencies. Mr. Mikeska added that the language included in the opinion letters and non-management management letter were similar because they reflected standard language issued by the American Institute of Certified Public Accountants. Mr. Mikeska briefly discussed internal controls. He noted that the Corporation wasn’t required to have an audit of internal controls, however they were reviewed as they applied to compliance with laws, regulations, grants and other agreements. While an opinion would not be issued, he stated that he had found no material weaknesses or significant deficiencies of internal control during the audit testing process. Turning to pages 47 and 48, Mr. Mikeska noted this was the Single Audit Opinion. It stated what management’s responsibility was for compliance and what the auditor’s responsibility was for detecting material fraud or abuse. He read into the record “It is our opinion that Texas State Affordable Housing Corporation complied in all material respects with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs”. He noted that there were no findings and it was a clean opinion. He briefly spoke about the auditor’s required communication with the Audit Committee. He noted that at the August Audit Committee meeting, he had discussed the preliminary plan for the audit and the responsibilities of the auditor and management, as well as the responsibilities of the Audit Committee. The letter before the board today was a follow-up to that, indicating that there were no findings, no questioned costs, and no difficulties dealing with management. It also notes that some significant estimates had been used in preparing the financial statements, specifically in valuing donated properties, in which case staff used BPOs (Brokers Price Opinions). Mr. Mikeska thanked the staff for their cooperation and help during the audit. Mr. Romero made a motion to approve the Annual Independent Financial Audit for the fiscal year ending August 31, 2013. Mr. Evenwel seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken and the motion passed unanimously. Tab 3 Presentation, Discussion and Possible Approval of the Audit Committee

Guidelines. Ms. Smith explained that at the last Audit Committee meeting, the Committee had discussed that it was not specifically stated in the Audit Committee Guidelines that the Audit Committee reviewed the budget as part of their responsibilities. As a result of that discussion, staff modified the Guidelines to clarify that the Audit Committee was responsible for reviewing and approving the operating budget and submitting it to the board for final approval. She also noted that the Audit Committee’s responsibility for reviewing and approving the annual audit for submission to

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the board of directors was further clarified in the Guidelines. Ms. Smith stated that those changes could be found on page 1 under Purposes and pages 2 and 3 under Responsibilities and Duties. Mr. Dietz made a motion to approve the Audit Committee Guidelines. Mr. Evenwel seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken and the motion passed unanimously. Following the vote, Ms. Smith thanked Mr. Lawrence, Ms. Aldrich and Ms. Gonzales for all their hard work on the audit. Tab 4 Presentation, Discussion and Possible Approval of a Resolution Consenting

to the Liquidation of the Properties and Assets Securing the Texas State Affordable Housing Corporation Multifamily Housing Revenue Bonds (HDSA Texas Affordable Housing Pool Project) Senior Series 2011A, Taxable Series 2011A-T, Subordinate Series 2011B and Junior Subordinate Series 2011C and Authorizing the Execution of a Settlement Agreement, Amendments to the Trust Indenture and Regulatory Agreement, and Other Documents and Instruments Necessary or Convenient to carry out the same.

Mr. Danenfelzer explained that the original portfolio referred to in the resolution had been financed by the Corporation in 2002 as a 501(c)(3) bond portfolio. The portfolio had been refinanced in 2011 with the hope that it would help preserve the long term affordability of the units. Due to several reasons outlined in the staff write-up, staff was seeking board consent to liquidate the portfolio. He highlighted the most significant reason for the request which was the financial effect of advancing tax payments while pursuing expected tax exemptions that were denied by all but one county in which the properties were located. Due to this financial hardship, the long term financial feasibility of the properties had declined. Mr. Danenfelzer explained that after consultation with bond holders and the trustee, it was determined that the best solution for the portfolio was to liquidate. He noted that board consent of the liquidation was needed before they could move forward. Mr. Danenfelzer noted that Mr. Bolden with Mahomes Bolden, the Corporation’s issuer counsel, was present at the meeting to answer any of the board’s questions. He added that Mr. Bolden had represented the Corporation during ongoing talks with the trustee and borrower. Mr. Jones asked what the basis was for denying the tax exemptions on the properties, if the exemptions were to have passed through to the new owners. Mr. Danenfelzer explained that under the Tax Code the exemption would be granted, provided that the property was purchased by a qualifying tax-exempt entity. He explained that the purchasing entity had been a qualifying tax-exempt entity and they had obtained legal opinions regarding their right to the tax exemptions. Unfortunately, the tax exemptions were ultimately denied because Texas Foreclosure Law required that the foreclosed property be transferred to a holding entity at foreclosure and then sold from that entity to the buying entity. The tax-exemption statute didn’t take this into consideration, so the taxing entities argued that because the interim holding entity was not qualified to receive the exemption, the exemption was canceled and the entity buying it from the holding company was no longer exempt. He noted that the court in Dallas County had ruled in favor of the properties, citing that it was always the intent for the property to be sold by a Community Housing Development Organization (CHDO) to another CHDO. Unfortunately, the other courts had not yet ruled and it was unknown how they would rule or when. Mr. Jones recognized that because of this and the fact they had to set aside funds to pay the taxes

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regardless, the owner didn’t have enough funds to maintain the properties. Mr. Jones asked if the Corporation would lose anything with the liquidation. Mr. Danenfelzer explained that we had no real liabilities, only the potential ongoing income from issuer and asset oversight and compliance fees. This was something staff would look at during negotiations. If additional funds were available after the bonds were paid off, the Corporation might be able to collect some of those fees. Mr. Danenfelzer explained that the properties would be sold separately and there was no promise that they would become affordable or maintain affordability. Mr. Evenwel asked if it was anticipated that the proceeds from the sale would fully pay off the bonds. Mr. Danenfelzer stated that based on evaluations they had obtained from the bond holders, it was agreed that liquidation was the best opportunity for them to pay off 100 percent of the A bonds and 100 percent of the B bonds, as well as some of the fees owed to us and the trustee. He noted that the Corporation had received a commitment from the trustee that our issuer counsel fee, as well as any other fees and expenses incurred for the process, would be paid out of the proceeds from the sale. He added that it was unknown at this time exactly what the proceeds would be. Mr. Jones asked what had led counsel to this recommendation. Mr. Bolden stated that the trustee had recommended liquidating and based on that and a review of the situation, he had recommended the same. Mr. Danenfelzer added that the borrower, trustee and bond holders all looked at the circumstances and came to the same conclusion, that liquidation was the best option, at which time they proposed it to the Corporation. Mr. Bolden confirmed for the board that he had reviewed all of the documentation to ensure that it was in the Corporation’s interest to agree. He was currently reviewing additional documentation to ensure that everything was correct and proper. Mr. Danenfelzer added that Mr. Dransfield, the Corporation’s bond counsel with Norton Rose Fulbright, might also be asked to provide opinions on the matter. Mr. Dietz asked if there was a provision allowing for special event redemptions of the bonds and Mr. Danenfelzer said there was. It was noted that the bonds would be sold at a premium because of the early redemption. Mr. Danenfelzer stated that if the board consented to the liquidation, they would expect to begin marketing the properties before the end of the year. Referring to the staff write-up, Mr. Romero asked if the $5 million in expenditures had been audited and Mr. Danenfelzer stated that staff had reviewed the expenditure reports from both the trustee and the borrower which included line item expenses and budgets. Staff was prepared to request additional detail where necessary to ensure expenses were handled appropriately. Mr. Romero made a motion to approve the resolution as presented. Mr. Dietz seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken and the motion passed unanimously. Tab 5 Presentation, Discussion and Possible Approval of the Guidelines, Scoring

Criteria and Targeted Housing Needs for the Allocation of Qualified Residential Rental Project Tax Exempt Bond Funds under the Multifamily Housing Private Activity Bond Program Request for Proposals and the 501(c)(3) Bond Program Policies for Calendar Year 2014.

Mr. Danenfelzer explained that statute requires that the scoring and targeted needs for the bond policies and RFP be reviewed every year. Staff had conducted this review in October. He noted that the draft of the policies had been posted for public comment for over 30 days and no public

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comment had been received. He stated that comment had been received from our professional service providers (bond issuer, bond counsel, issuer counsel and financial advisor) and based on comment received, staff had made a few changes to the policies. Mr. Danenfelzer noted that some of the comments were technical changes to ensure the policies agreed with the agreements in place with bond counsel and financial advisor. He stated that one comment had suggested adding more specific language about what would be accepted under the letters of support section. This change would coincide with a statutory change regarding requirements for tax credit properties. Finally, Mr. Danenfelzer noted that the Corporation’s issuer closing fee was increased in order to recover all costs associated with staff time and other overhead associated with the closing process. Mr. Jones asked if staff anticipated any applications under the 501(c)(3) program in 2014 and Mr. Danenfelzer stated it was unlikely. He added that even though this was the case, we were statutorily required to have the policy in place and have it updated annually. Mr. Evenwel made a motion to approve the Guidelines, Scoring Criteria and Targeted Housing Needs for the allocation of Qualified Residential Rental Project Tax Exempt Bond funds under the Multifamily Housing Private Activity Bond Program Request for Proposals and the 501(c)(3) Bond Program Policies for calendar year 2014. Mr. Romero seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken and it passed unanimously. Tab 6 Presentation, Discussion and Possible Approval for Publication and Public

Comment on the Draft of the Texas State Affordable Housing Corporation 2014 Annual Action Plan.

Mr. Jones commented that he found the Annual Action Plan very useful when talking to others about the Corporation. Mr. Leal explained that the Corporation is required by statute to produce the Annual Action Plan every year. He noted that the Plan offered the Governor, legislature, housing stakeholders and general public a comprehensive look at the actions of the Corporation during the previous year in addition to laying out the projected activities of the Corporation for the year ahead. He thanked the program managers and staff, and executive staff for their assistance and input in formulating this year’s Plan. He explained that statute requires that the Corporation submit the Plan to the Texas Department of Housing and Community Affairs (TDHCA) who in turn includes it in the annual State Low Income Housing Plan (SLIHP). The SLIHP is comprised of the Corporation’s plan along with TDHCA’s plan to address the issue of housing statewide. After the two are combined, the SLIHP will be submitted to the Governor, Lieutenant Governor and the Speaker of the House. Mr. Leal explained that staff was requesting the Board’s approval of the publication for public comment of the draft 2014 Annual Action Plan. Staff was recommending a public comment period beginning December 27, 2013 and ending January 27, 2014. He noted that during the public comment period, the Corporation and TDHCA would hold a joint public hearing scheduled for 10:30am on January 16, 2014 in Austin. The hearing would provide an opportunity for anyone to provide public comment in person. He added that comments could also be submitted via email, phone or mail. He noted that staff anticipated bringing those comments and the final Annual Action Plan to the board for final approval at the February meeting.

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Mr. Romero made a motion to approve the publication for public comment of the Draft of the Texas State Affordable Housing Corporation’s 2014 Annual Action Plan. Mr. Evenwel seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken and the motion passed unanimously. Closed meeting Mr. Jones called the board into closed meeting in accordance with Texas Government Code Section 551-071 and Texas Government Code 551-074. The time was 11:35 am. Open Meeting The board came out of closed meeting and back into open meeting at 12:18 pm. Mr. Jones acknowledged that Mr. Dietz had stepped out of the meeting and would return shortly. He noted that no decisions had been made during the closed meeting. Discussion turned to the January board meeting. Mr. Long agreed to follow-up with the board to schedule a date for the meeting. Mr. Jones thanked the court reporter, Mr. Joe Schaeffer, for his work today. He also thanked staff and professionals for their hard work. Adjournment Mr. Jones adjourned the meeting at 12:20 pm. Respectfully submitted by________________________________________________ Laura Ross, Corporate Secretary

MINUTES AND CERTIFICATION

THE STATE OF TEXAS § § TEXAS STATE AFFORDABLE § HOUSING CORPORATION §

I, the undersigned officer of the Texas State Affordable Housing Corporation (the

“Corporation”), do hereby certify as follows:

The Board of Directors of the Corporation (the “Board”) convened on the 23rd day of January, 2014, at the designated meeting place in Austin, Texas, and the roll was called of the duly constituted Members of said Board and officers, to wit:

BOARD OF DIRECTORS Name Office Robert Elliott Jones Chairperson William H. Dietz Vice Chairperson Jerry Romero Director Alejandro (Alex) Meade Gerry Evenwel

Director Director

OFFICERS Name Office David Long President (non-Board member) Elizabeth Bayless Executive Vice President (non-Board member) Melinda Smith Chief Financial Officer (non-Board member) Laura Ross Secretary (non-Board member) Cynthia Gonzales Assistant Secretary (non-Board member)

and all of said Members of the Board were present except _____________, thus constituting a quorum. Whereupon, among other business, the following was transacted, to-wit: a written resolution (the “Resolution”) bearing the following caption was introduced:

RESOLUTION NO. 14-____

TEXAS STATE AFFORDABLE HOUSING CORPORATION

“Resolution to appoint Mr. Julian Alvarez as a Member of the Advisory Council for the Texas Foundations Fund, to remove Mr. Donald R. Bethel as a Member of said Advisory Council, and to restate, ratify and affirm the persons holding the position of Member of said Advisory Council”

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was duly introduced for the consideration of said Board and read in full. It was then duly moved and seconded that said Resolution be adopted; and, after due discussion, said motion carrying with it the adoption of said Resolution, prevailed and carried by the following vote:

AYES NOES ABSTENTIONS

2. That a true, full and correct copy of the aforesaid Resolution [as modified to

reflect discussion by said Board] adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that said Resolution has been duly recorded in said Board’s minutes of said meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said Board’s minutes of said meeting pertaining to the adoption of said Resolution; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers of the Corporation and Members of said Board as indicated therein; that each of the officers and Members of said Board was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid meeting, and that said Resolution would be introduced and considered for adoption at said meeting, and each of said officers and Members of said Board consented, in advance, to the holding of said meeting for such purpose.

SIGNED this 23rd day of January, 2014.

Secretary, Texas State Affordable Housing Corporation

RESOLUTION NUMBER 13-__

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BOARD RESOLUTION OF

TEXAS STATE AFFORDABLE HOUSING CORPORATION

RESOLUTION TO APPOINT MR. JULIAN ALVAREZ AS A MEMBER OF THE ADVISORY COUNCIL FOR THE TEXAS FOUNDATIONS FUND, TO REMOVE MR.

DONALD R. BETHEL AS A MEMBER OF SAID ADVISORY COUNCIL, AND TO RESTATE, RATIFY, AND AFFIRM THE PERSONS HOLDING THE POSITION OF

MEMBER OF SAID ADVISORY COUNCIL

WHEREAS, Texas State Affordable Housing Corporation (the “Corporation”) has been duly created and organized pursuant to and in accordance with the provisions of the Texas Non-Profit Corporation Act, Article 1396-1.01 et. seq., now codified as the Texas Business Organizations Code, including Chapter 22 thereof, as amended, and under the authority of Texas Government Code, Title 10, Chapter 2306, Subchapter Y, as amended;

WHEREAS, on February 15, 2008, the Corporation, upon resolution duly adopted by the Board of Directors of the Corporation (the “Board of Directors”), did create the Texas Foundation Fund (“TFF”) as a segregated fund of the Corporation to be used to provide grants that benefit Texas residents of very low-income and extremely low-income with respect to various housing needs;

WHEREAS, in connection with the creation of the TFF, the Board of Directors approved the creation of the Advisory Council to the TFF (the “Advisory Council”), with the Advisory Council to be comprised of five Texas residents, and by Resolution Number 12-14, the Board of Directors did increase such membership to a total of ten (each, a “Member” and collectively, “Members”) appointed by the Board of Directors, with one of said Members to also be a current member of the Board of Directors (the “Board Member”), and seven members to be residents of the State of Texas;

WHEREAS, in connection with the adoption of Resolution Number 12-14, the Board of Directors also recommended that the Members be selected from different geographic areas of the State of Texas;

WHEREAS, after due consideration, the Board of Directors has determined that Mr. Julian Alvarez is a Texas resident living in the Rio Grande Valley area and is qualified and willing to serve as a Member of the Advisory Council of the TFF;

WHEREAS, Mr. Donald R. Bethel has notified the other Members of the Advisory Council that he does not wish to continue serving on the Advisory Council and therefore the Board of Directors must remove Mr. Bethel from his position as Member thereby creating a vacancy with respect to the West Texas/Panhandle area Member position, and;

WHEREAS, the Board of Directors, for the avoidance of doubt, wishes to restate, ratify and affirm the persons holding a position as Member of the Advisory Council;

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NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TEXAS STATE AFFORDABLE HOUSING CORPORATION: that Julian Alvarez is hereby appointed as a Member of the Advisory Council for a term of three (3) years commencing on February 1, 2014, that Donald R. Bethel is hereby removed as a Member of the Advisory Council effective immediately upon the adoption of this resolution thereby creating a vacancy with respect to the West Texas/Panhandle area Member position, and that the following persons are hereby restated, ratified and affirmed as the Members of the Advisory Council:

Chairman (Austin area) Edwina Carrington Member (El Paso area) Russell Vandenburg Member (At-Large) Steven A. Carriker Member (West Texas/Panhandle area) Vacant Member (Dallas/Fort Worth area) William D. Albers

Member (Houston area) Christopher J. Bergmann Member (San Antonio area) Kenneth J. Olson Member (Rio Grande Valley area) Julian Alvarez Board Member Jerry Romero

Corporate Member Elizabeth Bayless

APPROVED AND EFFECTIVE this 23rd day of January, 2014.

______________________________________ Texas State Affordable Housing Corporation ATTEST: __________________________________ Laura Ross Secretary to the Board of Directors

* * * * * * * * * * * * * * * * * * * * * * * * * * * *

Agenda Item Presentation, Discussion and Possible Approval of the Release of the Corporation’s Request for Proposal for Independent Financial Auditor.

Summary In accordance with the Corporation’s governing statute, we are required to hire an independent Certified Public Accountant (CPA) to audit the Corporation’s books and accounts each fiscal year. The Corporation most recently contracted with the CPA firm of Mikeska, Monahan and Peckham, PC for audit and tax services. Effective April 30, 2014, however, the firm’s audit partner, Don Mikeska, is retiring and the firm will not continue to provide auditing services in the future. To facilitate the selection of a new independent auditor the Corporation would like to release a Request for Proposals (RFP) for audit, tax and accounting consulting services for the three fiscal years ending August 31, 2014, 2015 and 2016. The scope of services requested in the RFP would be as follows:

A. Performance of the annual financial audit for the three (3) fiscal years ending August 31, 2014; August 31, 2015 and August 31, 2016. The audits should be conducted in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Consolidated Audit Guide for Audits of HUD Programs, and the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.

A draft of the audit report must be completed by November 20th of each year for submission to the Comptroller of Public Accounts. All audit field work must be completed and the final audit report issued no later than December 7th of each year.

B. Performance of review for compliance with the Texas Public Funds Investment Act (Chapter 2256,

Texas Government Code) using the guidelines provided by the Texas State Auditor’s Office for the fiscal year ending August 31, 2015.

C. Preparation of the Corporation’s annual Form 990 tax return for the three (3) fiscal years ending

August 31, 2014; August 31, 2015 and August 31, 2016. D. Provision of consultation and technical assistance on general accounting and tax issues.

If approved, the RFP will be posted on the Corporation’s website and in the Texas Register. Additionally the RFP will be distributed to CPA firms with experience auditing governmental non-profit corporations.

Staff Recommendation Staff recommends that the Board approve the release of the Corporation’s Request for Proposal for Independent Financial Auditor.

RFP and Application for Private Activity Bond Program Professional Services

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Agenda Item Presentation, Discussion and Possible Approval of the Release of the Corporation’s Request for Proposals for Single Family Trustee Services.

Summary

The Texas State Affordable Housing Corporation has approximately $194 million in single family mortgage revenue bonds payable which are secured by approximately $202 million in cash, investments and mortgage backed securities. Bond funds are held by Well Fargo Bank, N.A. as Trustee for the Corporation’s Single Family Mortgage Revenue Bond Program.

All of the Corporation’s professional services contracts are reviewed on a periodic basis. To evaluate trustee services available in the marketplace the Corporation would like to release a Request for Proposals (RFP) for Single Family Trustee Services for the three fiscal years ending August 31, 2014, 2015 and 2016. Additionally the RFP will provide for a two year option to renew for fiscal years ending August 31, 2017 and 2018 based on satisfactory performance. The Trustee acts in a fiduciary capacity on behalf of the Corporation and should provide the following minimum services.

1. Assist the Corporation, Bond Counsel and Financial Advisor with structuring bond financings and preparing bond documents.

2. Investment and transfer of bond proceeds and other funds in accordance with the Corporation’s instructions and the requirements of the indentures.

3. Ensure that bond principal and interest payments are made as scheduled.

4. Establish and maintain bank and investment accounts as required to manage each bond program.

5. Maintain financial accounting records for all bond related transactions.

6. Provide reports on bond issues and fund balances to the Corporation on a quarterly basis, semi-annual basis, or as otherwise requested by the Corporation or indenture.

7. Prepare debt service schedules quarterly for each bond indenture.

8. Prepare schedules, confirmations or other information requested by the Corporation’s independent financial auditor.

9. Make disclosures and notifications to bondholders, the Corporation and others in compliance with the indentures.

10. Participate and assist rating agencies with any review of the Corporation’s Bond Program activities.

RFP and Application for Private Activity Bond Program Professional Services

Page 2 of 2

If approved, the RFP will be posted on the Corporation’s website and in the Texas Register. Additionally the RFP will be distributed to financial institutions with experience providing trustee services to state or local housing finance agencies.

Staff Recommendation Staff recommends that the Board approve the release of the Corporation’s Request for Proposal for Single Family Trustee Services.