Information on Multifamily Affordable Housing from the
Texas Department of Housing and Community Affairs (TDHCA)
TDHCA has prepared this information to describe its Multifamily Mortgage Revenue Bond (MRB) and Housing Tax Credit (HTC) Programs.
Q: Just what does “affordable housing” mean?
A: It means that the rent is affordable for the residents, with rent payments not greater than 30 percent of the resident’s annual in-come. For example, a resident with a yearly family income of $30,000 would pay no more than $9000 annually on rent or $750 a month.
Q:Where does the money to build an affordable housing development come from?
A: With the MRB Program, the Texas Bond Review Board makes available tax- exempt mortgage revenue bonds, which are purchased by private investors or in- vestment firms. The proceeds from the sale of these bonds go toward low-interest loans to the developers of the properties. The lower interest rate allows for the development of high quality properties at a lower cost, and enables the property to offer rents that are below traditional market rate units.
With the HTC Program, housing tax credits are awarded to a developer, who in turn sells the credits to investors. The investors then use the credits to lower their federal tax liability. The investment of capital (money) enables the developer to build high quality proper- ties and offer rents that are below traditional market rate units.
In addition to lower rents, these properties offer valuable services to tenants that range from after-school programs, family activity centers, computer labs, and literacy programs, to matched savings plans that can be used to purchase a home or fund educational opportunities.
Q: What income levels do the bond and tax credit properties serve?
A: In general, the programs target households earning no more than 60 percent of the area median family income (AMFI). For example, using the statewide AMFI of $53,000, a family of four at 60 percent AMFI would earn $31,800. However, some properties place a priority on targeting households at lower incomes while others may choose to have a mix of low income units and market rate units.
Q: Who actually lives in affordable housing?
A: Individuals and families who earn or receive an income but who still have a hard time finding decent housing that they can afford. This includes employees in service-related industries, single parents, persons with disabilities, elderly and retired individuals, and others of modest means.
Because developers have a significant financial investment, they want to keep the property in good condition and lease to tenants who will do the same. As with traditional market rate properties, tenants are subject to income and employment requirements, and property managers may perform criminal background checks on potential tenants.
Q: What is the State’s role in these developments?
A: The State oversees the allocation and administration of the MRB and HTC Programs, ensuring that the public need for affordable housing is met. The State of Texas does not build, own, or manage these properties, but TDHCA does have long-term oversight over tax credit–and bond-financed properties for a minimum of 30 years. This really means that TDHCA has oversight on these properties for the life of the development.
Long-term oversight responsibilities include making certain that repair reserve accounts are established and funded; properties are well maintained; units are only occupied by eligible households; rents are capped at appropriate levels; tenants are living in a safe, healthy environment; and the programs’ many rules and regulations are being enforced.
Q: Does tax-exempt bond financing mean the development won’t be paying property taxes?
A: No, the tax-exempt nature of the bonds benefits the investor, person, or entity purchasing the bonds; it has nothing to do with property taxes. While some bonds are issued to certain 501(c)(3) nonprofit organizations exempt from some property taxes, the vast majority of MRB properties pay significant amounts of property taxes each year.
Q: How can I have input into the development process?
A: Because of their significant long-term financial investment into the development and community, developers in most cases want to work with area citizens and be a good neighbor. Therefore it is not uncommon for developers to make changes in response to the concerns of area neighbors.
In addition to attending and commenting at public hearings on a particular development such as this, individuals and neighborhood organizations are encouraged to work directly with the developer to gain a better understanding of a particular development. Open community meetings offer an opportunity to ask questions, express concerns, and have a productive dialogue between the developer and community.
Q: I still have concerns. What can I do to make sure my voice is heard by TDHCA?
A: Individuals and organizations are encouraged to submit questions and concerns to TDHCA’s Multifamily Finance Production Division via phone, fax, traditional mail, email, or directly to the TDHCA Governing Board at its monthly meetings.
http://www.tdhca.state.tx.us/neighborhoodresearch/
Still have questions or comments? Contact us!
TDHCA Multifamily Finance Production Division
PO Box 13941 Austin, TX 78711-3941
Phone: (512) 475-3340
http://www.tdhca.state.tx.us
For MRB:robbye.meyer@tdhca.state.tx.us |
