June 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, June 16, 2016 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

June 16, 2016 at 10:30am 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: Monthly Financial Reports ACTION ITEMS IN OPEN MEETING: Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board Meeting held on May 19, 2016. Tab 2 Presentation and Discussion of Recent Updates to the Corporation’s Asset Oversight and Compliance, Single Family

Rental and Multifamily Rental Programs. Tab 3 Presentation, Discussion and Possible Approval of an Increase from $250,000 to $500,000 to a Revolving Line of

Credit to Builders of Hope CDC through the Texas Housing Impact Fund for the Purpose of Building or Rehabilitating Housing Units for Sale to Qualified Low and Moderate-Income Households.

Tab 4 Presentation, Discussion and Possible Approval of an Increase from $250,000 to $450,000 to a Revolving Line of

Credit to Tender Loving Care for Children, d.b.a. Legacy CDC, through the Texas Housing Impact Fund for the Purpose of Building or Rehabilitating Housing Units for Sale to Qualified Low and Moderate-Income Households.

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. Section 46.035 of the Texas Penal Code prohibits handgun licensees from carrying their handguns at government meetings such as this one. This prohibition applies to both concealed carry and open carry by handgun licensees. Handgun licensees are required by law to refrain from carrying their handguns at this meeting. 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

Tab A

Month Closed # of Loans % Total At a Glance

Program %Lender Closed # of Loans % Total

New/Existing Home

Type of Loan

Ethnicity

Top 20 Originating Counties # of Loans

Month Closed # of Loans % Total At a Glance

Program %Home Sweet Texas (80% AMFI) 69.25%Homes for Texas Heroes 30.75%

Totals $47,346,690 348 100%

Lender Closed # of Loans % Total

New/Existing Home

Type of Loan

Ethnicity

Top 20 Originating Counties # of Loans

Total Committed $47,346,690 348 100%

Total Allocation $125,000,000Remaining to Commit $77,653,310

Tab B

Texas State Affordable Housing Corporation Development Finance Programs Report

June 2016

Affordable Communities of Texas Program

Spring is the busiest season of the year for real estate sales, so processing contracts under the ACT Land Bank, ACT-VET, and Texas NSP initiatives has taken up more staff time than usual this month. There is currently one ACT-VET Property under contract for sale, with another two contracts in negotiations, but the majority of our sales pipeline is in Texas NSP homes. There are currently 17 open sales contracts on Texas NSP homes. This includes all seven units of interim rental housing being sold to Accessible Housing Austin (AHA) for permanent rental to very low-income families with disabilities. Additionally, we completed the first sale of a home in Harlingen, Texas that was funded through the Texas Community Bank Equity Equivalent Investment awarded last fall. Two additional homes in Harlingen are listed for sale, and we’re working on purchasing another home in Mission, Texas for rehabilitation. This property’s rehabilitation and resale will be managed by our Local Partner, Affordable Homes of South Texas. Here is a summary of our current portfolio numbers.

Program Portfolio as of May 1, 2016 Acquired Sold Current

Portfolio Current Portfolio Value

ACT Land Bank 93 0 1 92 $1,563,524.67 ACT Land Trust 60 0 0 60 $650,000.00 Texas NSP 238 0 0 238 $4,271,355.67 Veteran's Initiative 4 0 0 4 $237,510.00 Totals 395 0 1 394 $6,722,390.34

Texas Housing Impact Fund

Staff has been busy working on three applications for new funding. All three have been presented to the Loan Committee, and two will be presented to the Board at this meeting for further review and approval. Here is a brief summary of the loans. Builders of Hope: Builders of Hope has requested an increase to their existing line of credit. They are currently in the first year of a 2-year revolving line of credit with a maximum loan limit of $250,000. Builders of Hope is TSAHC’s primary local partner in Dallas. They build new homes in the Creekside subdivision, a Texas NSP property. They have requested an increase in their current line of credit to $500,000. More information on their request is included in the full write-up behind Tab 3. Legacy CDC: Tender Loving Care for Children, d.b.a. Legacy CDC (“Legacy CDC”) has requested an increase to their existing line of credit. They are currently in the first year of a 2-year revolving line of credit with a maximum loan limit of $250,000. Legacy CDC is TSAHC’s local partner in the Beaumont/Port Arthur area. They are the developer for a project spearheaded by the City of Port Arthur, where they will be building seven new homes in a mixed-income development. Legacy CDC has requested an increase in their

Texas State Affordable Housing Corporation Development Finance Programs Report

June 2016

current line of credit to $450,000. More information on their request is included in the full write-up behind Tab 4. Woman Inc: Woman Inc. has requested a new line of credit in the amount of $250,000. They are the primary ACT local partner in the Houston area and successfully used a $200,000 line from TSAHC to complete ten homes under the ACT-VET program. They are interested in taking out a new line of credit to continue their affordable housing redevelopment activities in the greater Houston MSA. The Loan Committee has asked for additional documentation and will reconsider this request pursuant to the program guidelines permitting approval of loans at or below $250,000 without further Board action. Multifamily Bond Programs

Staff is currently working with two potential applicants for multifamily private activity bonds. If applications are received by June 10th staff intends to bring inducement resolutions to the Board at the July meeting. The proposed applications include one acquisition/rehabilitation of an existing affordable housing project and the new construction of affordable units in a small urban area. Staff anticipates that if the applications move forward smoothly they will close sometime in late November or December of this year.

Tab C

TEXAS STATE AFFORDABLE HOUSING CORPORATIONSTATEMENT OF NET ASSETS (unaudited)As of April 30, 2016

ASSETSCurrent Assets

Cash and Cash Equivalents $ 1,535,221Restricted Assets Held by Bond Trustee:

Cash and Cash Equivalents 2,619,788Short-term Investments, at Fair Market Value 278,023Accrued Interest 168,410

Custodial Cash and Cash Equivalents 324,747Investments, at Fair Market Value 5,231,934Accounts Receivable & Accrued Revenue, Net of uncollectible amts. of $22,956 191,737Accrued Interest Receivable 48,126Loans Receivable, Current Portion 65,000Notes Receivable, Current Portion 681,741Down Payment Assistance, Current Portion 1,705,579Prepaid Expenses 26,158

Total Current Assets: 12,876,464

Noncurrent AssetsLoans Receivable, Net of uncollectible amounts of $91,726 574,852Notes Receivable 4,711,605Investments, at Fair Market Value 3,785,016Mortgage Servicing Rights, Net of Accumulated Amortization of $2,387,801 340,260Fixed Assets, Net of Accumulated Depreciation of $661,795 1,411,644Owned Real Estate, Federal & Other Programs Net of Accum Amort $162,428 11,607,707Down Payment Assistance 1,463,366Restricted Investments Held by Bond Trustee, at Fair Market Value 91,259,548

Total Noncurrent Assets: 115,153,998

TOTAL ASSETS $ 128,030,462

(continued)

TEXAS STATE AFFORDABLE HOUSING CORPORATIONSTATEMENT OF NET ASSETS - Continued (unaudited)As of April 30, 2016

LIABILITIES Current Liabilities

Accounts Payable and Accrued Expenses $ 228,644Notes Payable, Current Portion 45,598Custodial Reserve Funds 324,747Other Current Liabilities 162,783Payable from Restricted Assets Held by Bond Trustee:

Bonds Payable, Current Portion 1,621,441Accrued Interest on Bonds 469,669

Total Current Liabilities: 2,852,882Noncurrent Liabilities

Notes Payable 3,676,070Revenue Bonds Payable 89,735,805Due to Federal Programs 3,527,455Unearned Revenue 205,894

Total Noncurrent Liabilities: 97,145,224

Total Liabilities: 99,998,106

DEFERRED INFLOWS OF RESOURCESDeferred Revenue 216,935

Total Deferred Inflows of Resources 216,935

NET POSITIONInvested in Capital Assets 1,411,644Restricted for:

Debt Service 5,667,800Other Purposes 66,576

Unrestricted 20,669,401

Total Net Position: $ 27,815,421

TEXAS STATE AFFORDABLE HOUSING CORPORATIONSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (unaudited)for the 8 months ending April 30, 2016

Operating Revenues Interest and Investment Income $ 3,013,632 Net Increase (Decrease) in Fair Value of Investments (1,003,138) Single Family Income 1,550,170 Asset Oversight and Compliance Fees 159,507 Loan Servicing Fees 73,252 Multifamily Income 136,075 Land Bank Income 201,427 Public Support Federal & State Grants 7,220 Contributions 608,554 Other Operating Revenue 277,391 Total Operating Revenues $ 5,024,090

Operating Expenses Interest Expense on Bonds and Notes Payable $ 2,226,614 Salaries, Wages and Payroll Related Costs 1,506,644 Professional Fees and Services 180,582 Amortization 172,727 Office and Equipment Rental and Maintenance 64,909 Travel and Meals 63,932 Depreciation 158,050 Program and Loan Administration 448,719 Grant Expenditures 48,570 Foundation Fund Grants 360,500 Other Operating Expenses 229,736 Total Operating Expenses $ 5,460,983

Net Loss (436,893)

Total Net Position, Beginning 28,252,314

Total Net Position, Ending $ 27,815,421

Annual Budget Actual

Percent of Annual Budget Reference

RevenueServicing Revenue, Net of Subservicer Fees 121,000 123,269 102%Single Family 3,498,000 3,353,629 96%Multifamily Program Revenue 410,000 332,279 81%Lending Program Revenue 289,000 556,340 193%ACT Program Revenue 276,000 145,738 53%Grants & Donations 740,000 47,642 6%Federal & State Grants 192,000 122,603 64%Investment Revenue 45,000 48,238 107%Tenant Revenue 357,000 266,434 75% Total Revenue 5,928,000 4,996,171 84%

ExpendituresSalaries & Payroll Related Expenditures 2,371,000 1,506,644 64%Professional Services 365,000 148,823 41%Foundation Fund Grants 350,000 360,500 103%Principal & Interest on Notes Payable 155,000 103,426 67%Travel & Meals 129,000 63,932 50%Furniture, Equipment, & Software 37,000 23,951 65%Building Maintenance 43,000 32,263 75%Insurance 114,000 56,757 50%Marketing 115,000 44,662 39%Professional Dues, Conferences & Training 27,000 15,843 59%Communication 18,000 11,818 66%Sponsorships 15,000 12,625 84%Printing & Office Supplies 9,000 2,120 24%Freight, Delivery, Postage & Storage 6,000 3,245 54%Publications, Subscriptions & Other Office Expenditures 8,000 6,218 78%Bank Fees & Charges 19,000 13,862 73%Single Family/Multifamily Program Expenditures 1,501,000 792,670 53%Federal & State Grant Expenditures 141,000 27,314 19% Total Expenditures 5,423,000 3,226,672 59%

Net Income 505,000 1,769,499

Average Percent Expended = 67%

Loan Servicing income is higher than budgeted because there has been less run off associated with the subserviced loans in Bond

Programs 52, 53 and 54. Consequently we are receiving considerably more income than anticipated.

Budgeted Single Family Revenue appears high because of the timing of down payment assistance reimbursements made to

the Corporation. Through April 30, 2016 the Corporation has received $1.1 million in DPA reimbursement.

Multifamily income through April appears high because the majority of the Corporation's asset oversight and compliance

contracts call for annual payments to be made in the month of January each year. The largest payments scheduled for FY2016

were $136,153 from Dalcor; $84,369 from Rainbow; and $27,509 from Palladium. As of April 30th all of these payments plus

several other smaller receivables had been collected in full. Additionally we recovered a receivable of $17,873 which originated

in 2008 & 2009. Betsy was able to collect the outstanding balance by diligently invoicing and communicating with both the

Borrower and Trustee.

Lending Program revenue exceeds the budget due to the unexpected payoff of a Direct Lending Program note totaling $291,107.

The FY2016 Grants & Donations budget includes a $500,000 Equity Equivalent Investment (EQ2). Staff has been working

with two financial institutions interested in possibly making an EQ2 investment to TSAHC.

All Foundation Fund grants were approved by the Board in September 2015 and disbursed to recipients by the first week in

November 2015. Additionally the Corporation received donations (and consequently matching funds were allocated) for the

Foundation Fund that were not anticipated at the time the budget was prepared resulting in $10,500 in additional Foundation

Fund Grant expenditures.

Federal & State Grant expenditures are lower than budgeted due to the timing of expenditures by the Corporation's local partners.

We expect this line item to be on budget by year end.

TAB 1

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

May 19, 2016 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 10:33am, on May 19, 2016, 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 Gerry Evenwel, Member Alex Meade, Member Jerry Romero, Member Members Absent Bill Dietz, Vice Chair Staff Present Betsy Aldrich, Senior Accountant Liz Bayless, Executive Vice President Katie Claflin, Senior Development Coordinator Joniel Crim, Homeownership Programs Manager David Danenfelzer, Manager of Development Finance Sarah Ellinor, Homeownership Programs Specialist Jo Keene, Senior Coordinator of Development Finance Programs Nick Lawrence, Controller David Long, President James Matias, Senior Multifamily Analyst Celina Mizcles, Senior Multifamily Analyst Laura Ross, Corporate Secretary Jesse Sepeda, Lead Maintenance Technician Melinda Smith, Chief Financial Officer Janie Taylor, Manager of Communications & Development Michael Wilt, External Relations Specialist Guests Seth Crone, Bank of New York Greg Hasty, Willington Trust

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Cynthia Leon, Board Member of Texas Community Capital Tim Nelson, First Southwest Company Eric Pike, First Southwest Company Katie Van Dyk, Greenberg Traurig Public Comment No public comment was provided at the beginning of the meeting. President’s Report Mr. Long referred the board to the program reports in the board packet. He noted that the Quarterly Compliance and Resident Services reports were included this month. He also noted that the Development Finance Report would be discussed under Tab 4 and the Budget Report would be discussed in further detail under Tab 5. Mr. Long and Ms. Bayless introduced to the board the Corporation’s newest employees: Jesse Sepeda, Lead Maintenance Technician, and Joniel Crim, Homeownership Programs Manager. Mr. Long then recognized and complemented the accounting staff on the Corporation’s compliance report included in the State Auditor’s office review of compliancy with certain laws and statutes. He noted that 14 state agencies, 7 universities and 50 community colleges were reviewed by the State Auditor’s office. Mr. Long thanked Ms. Smith, Mr. Lawrence, and Ms. Aldrich for all of the hard work and diligence in ensuring the Corporation remained in compliance with standards set forth in those laws and statutes. Mr. Long informed the board of activities the homeownership team was participating in, including webinars, trainings and classes for lenders, realtors and housing counselors. He also noted that Ms. Claflin and Ms. Taylor had attended a Veteran’s Housing Summit in San Antonio. Mr. Long stated that the Corporation had received $7,500 in grants and donations since the last board meeting in March. The funds had come from organizations including Insperity, Frost Bank, Down Payment Resource, and MGIC, as well as several individuals working with the homeownership programs. Mr. Long noted that staff had met with Mr. Julian Alvarez, member of the Texas Foundations Fund Advisory Council. Mr. Alvarez had recently been appointed by the Governor as a Commissioner for the Texas Workforce Commission. Because of this new role, Mr. Alvarez would likely step down from the TFF Advisory Council. Mr. Long and Mr. Wilt also met with legislators and partner organizations. Staff had attended conferences and summits, including the Fannie Mae HFA Summit in Washington, DC, the National Association of Local Housing Finance Agencies (NAHLFA) Conference in Dallas along with a Fannie Mae Roundtable where staff had been invited to meet and talk with Fannie’s Mae’s primary partners in the HFA program. Mr. Long informed the board that in June, in honor of National Homeownership Month, the Corporation would be launching our first consumer webinars that would discuss the ten steps to

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buying a home. The webinars would include information about TSAHC’s homeownership programs and would be offered every Wednesday in June. Also in June, the homeownership team would be teaching the “Overcoming the Down Payment Hurdle” class in Laredo along with attending homeownership fairs in McAllen, Dallas and Arlington, and conducting lender trainings. Mr. Long made the board aware that the Corporation had been invited by the Federal Reserve Bank to participate in the upcoming Colonias Conference. He noted that the Corporation had been a sponsor for the original conference on the topic last year and in June 2016 the Federal Reserve Bank would be holding the Southwest Border Colonias: Housing and Sustainable Development in the 21st Century conference in El Paso, part of the United Nations Habitat III US Regional Conference. The Corporation had again been asked to be a partner and sponsor for the event. Mr. Long introduced the guests and professionals in attendance at the meeting, including Ms. Leon, former TSAHC board member and current TSAHC-appointed board member of Texas Community Capital (TCC). Mr. Long noted that the board meeting in June would either be held on Thursday, June 9th or Thursday, June 16th. Lastly, Mr. Long stated that the Loan Committee had met to review three loan requests and staff expected at least one to be ready for presentation to the board in June. Mr. Long noted that the Loan Committee was comprised of Mr. Long, Mr. Danenfelzer, Ms. Keene, Mr. Matias, Ms. Mizcles, Ms. Smith and Mr. Lawrence, along with Mr. Romero, as board representative on the Loan Committee. Mr. Jones complemented Mr. Danenfelzer on the presentation he had made at a conference held in Corpus Christi. Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board

Meeting held on March 24, 2016. Mr. Jones thanked Mr. Romero for chairing the March Board Meeting. Mr. Evenwel made a motion to approve the minutes of the board meeting held on March 24, 2016. Mr. Meade 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 a Resolution Regarding

the Submission of One or More Applications for Allocation of Private Activity Bonds to the Texas Bond Review Board for Qualified Mortgage Bonds and Containing Other Matters Incident and Related Thereto.

Ms. Crim informed the board that as of April 30th only $84 million of authority remained in the Corporation’s Mortgage Credit Certificates (MCC) Program. Due to recent changes implemented to the MCC Program, staff anticipated an increase in the MCC volume each month. Staff felt the current funding for the program would be fully utilized before the end of 2016. To ensure that we

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continue to meet the demand for the program, staff requested approval of a resolution allowing the Corporation to submit an application to the Bond Review Board (BRB) for a bond allocation under our single family bond cap in an amount not to exceed $200 million. The resolution provided for the application be submitted in 2016, however the exact timing of the application was not yet determined. Ms. Crim clarified that while Tabs 2 and 3 were being discussed together, the board would need to vote on each resolution separately; Tab 2, Authorization to submit an application for an allocation of Private Activity Bond (PAB) and Tab 3, Authorization to convert the PAB to MCC’s. Ms. Crim noted that $200 million in bonds would convert to approximately $125 million in MCCs. Mr. Long recalled that in the past the resolutions for application and conversion had been presented to the board in one resolution, however in order to provide greater flexibility in determining when to convert, two separate resolutions were being presented for approval. Mr. Long noted that the additional MCCs would provide funding under the program through 2017. Mr. Jones asked how long we had to use the bonds and Mr. Long responded 3 years. Mr. Romero made a motion to approve a resolution regarding the submission of one or more applications for allocation of Private Activity Bonds to the Texas Bond Review Board for qualified mortgage bonds and containing other matters incident and related thereto. Mr. Meade seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken and it passed unanimously. Tab 3 Presentation, Discussion and Possible Approval of a Resolution Regarding

the Conversion of Allocation for Private Activity Bonds to Mortgage Credit Certificates and Containing Other Matters Incident and Related Thereto.

Mr. Romero made a motion to approve the resolution regarding the conversion of allocation for private activity bonds to mortgage credit certificates and containing other matters incident and related thereto. Mr. Meade seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken on the motion and it passed unanimously. Tab 4 Presentation and Discussion of Recent Updates to the Corporation’s

Development Finance Programs. Mr. Danenfelzer provided an update on the Affordable Communities of Texas (ACT) Program. Since 2008, the Corporation had acquired 560 vacated and foreclosed properties under the program. 137 homes had been renovated and sold to low and moderate income households. Seven very low income households had obtained rental housing through the portfolio. More than 70 veteran families had been helped with low cost or mortgage-free housing. 22 properties were currently for sale and 8 were under contract. Staff was currently focused on the redevelopment of properties the Corporation acquired under the Texas Neighborhood Stabilization Program (NSP) with funding we received in 2008 and 2009. To date, 42 properties acquired using NSP funding had been sold. In addition to redevelopment, staff was also looking into ways the properties could be used by participating local partners as rental housing.

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Mr. Danenfelzer noted staff was also focused on increasing production in new markets. In 2015, the Corporation received a $500,000 equity investment from Texas Community Bank based in Laredo. Staff was tasked with deploying those funds in the areas served by the bank which included Del Rio, Harlingen, Brownsville, San Antonio, Atascosa County, Hidalgo County, Cameron County and Laredo. Mr. Danenfelzer then provided an update on the Texas Housing Impact Fund, which consists of the Corporation’s direct lending programs. Since 2003, the multifamily funding has aided both the Corporation and our local partners in leveraging resources to produce affordable multifamily housing. In 2007, the Corporation started the single family interim construction program which increased the credit available to smaller non-profits. Under this program, we funded the building and rehabilitation of 123 homes for low and moderate income homebuyers. Of those, 66 had also been assisted by the Corporation’s ACT program. Over $3 million has been issued for construction and rehab. For permanent rental, $4.4 million in loans has been issued worth more than $36 million in property value. The Corporation’s portion of the overall financing was small, however it was integral in making deals possible in communities without access to traditional financing. Lastly, Mr. Danenfelzer provided an update on the Multifamily Private Activity Bond (PAB) Program. Statute requires the Corporation to designate 4 targeted areas for the program. The targeted areas currently designated for the program were at-risk preservation and rehabilitation of existing affordable housing, rural and smaller urban markets, senior and service-enriched housing, and disaster-relief housing. Nearly all projects under the program required 4 percent Housing Tax Credits and were therefore reviewed through the Texas Department of Housing and Community Affairs (TDHCA) underwriting process. In addition to this review, Corporation staff performs a significant underwriting review to ensure feasibility. Mr. Jones asked about the disaster relief targeted area. Mr. Danenfelzer explained that it had been added in 2009 after Hurricanes Rita and Dolly. Funding awarded under this distinction would not directly assist households or properties impacted by the disaster, but would rather help the community replace the housing units they had lost. Mr. Danenfelzer stated that a partial application had been submitted under this targeted area for a development in Rowlett, Texas where a tornado had destroyed more than 1,000 homes and apartments in December 2015. The applicant was currently looking for other funding sources in order to complete an application package. Mr. Danenfelzer stated that he was frequently asked to speak on boards and panels about housing bonds and in doing research to prepare for those presentations he had come across some interesting trends he wanted to share with the board. Over the last 18 months, 20 of the 25 applications reviewed for 4 percent tax credits were in the largest metropolitan areas of Texas. 8 of the developments targeted senior housing. Only 7 of the applications were for acquisition and rehab; the majority was new construction. Only 5 were projects that included service enriched and supportive housing which accounted for just 73 of the 5000 total units being approved or reviewed. Lastly, only 3 developments were in counties where the population was under 400,000. He pointed out that this showed the Corporation’s program offered funding for needs not being met by the rest of the market.

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Mr. Jones thanked Mr. Danenfelzer for his presentation. Tab 5 Presentation, Discussion and Review of the Fiscal Year 2016 Operating

Budget. Mr. Long explained that the comparison of budget to actual revenue and expenditures for the month ended March 31, 2016 was included on the agenda today as a follow-up to the board’s approval in March for funding additional renovations to Rollins Martin Apartments. He noted that the board had authorized the additional allocation of $225,000 without a formal budget amendment, because staff had determined the funding was available from four other budget items. At Mr. Romero’s request and for the board’s benefit, staff was providing the budget report at the meeting today to summarize and clarify the source of funding availability. Mr. Romero explained that he had requested this report to better document where the funding approved in March would come from within the approved budget. Anyone reviewing the budget report would be able to see what money had been allocated to fund the additional $225,000 for Rollins Martin Apartments. Mr. Long noted that the $225,000 would be allocated from the following budget items: salaries, professional fees, insurance, and program expenses. The final $41,000 needed to complete the renovations was available from funds already allocated, but not yet utilized, for Rollins Martin Apartments. Mr. Long explained that given the high lease renewal rate at Rollins Martin, renovations on the units would likely not be completed this fiscal year. The proposed renovations can only be completed when residents move out and units become available, therefore, the Corporation wouldn’t likely expend those monies in the current budget year. Mr. Romero noted the importance of monitoring the budget progress throughout the year and noted that Ms. Smith always made it clear in the footnotes why any variances occurred. Mr. Jones asked how the allocated funds would be reflected in future budgets and Mr. Long stated next year’s budget would include the allocated funding on the specific line item for the Rollins Martin Apartments renovations. Ms. Smith briefly went over the budget report. She noted that total expenditures were at 52% which was right where they should be for 7 months into the fiscal year. For revenues, we were over budget on several line items. She anticipated the Corporation would be on target for the year overall. Mr. Romero spoke about the Grants and Donations revenue line item, noting that it was only at 3% of the total budgeted amount. He requested at the next board meeting the program development staff give an update on plans for meeting our budgeted amount for Grants and Donations. Ms. Smith stated that the Corporation had received $24,000 in donations in April and had applied for another equity investment. Mr. Long added that the staff continued to look for grants and opportunities for EQ2s and PRIs that were relevant to the programs and resources that we provided. Mr. Jones commented that equity investments were a positive method of increasing our available funding.

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Tab 6 Presentation, Discussion and Possible Approval of the Appointment of a Member to the Board of Directors of Texas Community Capital, LLC.

Mr. Long introduced Ms. Cynthia Leon, noting the Corporation and the Texas Association of Community Development Corporations (TACDC) partnership for the administration of Texas Community Capital, LLC (TCC) and defined the board membership. The Corporation was responsible for filling two of the five positions on the TCC Board of Directors. Ms. Cynthia Leon, former TSAHC board member, filled one of those positions. The other position had been held by Mr. Romero until he stepped down from the board in 2015. TCC was a nonprofit that could be utilized for community development, economic development and housing related resources. Mr. Long stated that over the years TCC had expanded its capacity and resources specific to community development through a small dollar loan program which provided an alternative to payday and title lending. One of the original goals for TCC had been to obtain CDFI certification. An application had been submitted in 2011, but it had been declined because of TCC’s lack of resources. The success of the small dollar loan program had improved TCC’s financial capacity and it was now in a better position to reapply. It was important to have a full board membership when a new application was submitted. Mr. Long noted that Ms. Leon would continue serving on the board. The final TCC board position could be filled by a TSAHC board member or a person the TSAHC board appointed. Mr. Jones asked about the time commitment required to serve on the TCC board. Mr. Long explained that the board met every other month and had the ability to meet over the phone. He then deferred to Ms. Leon who introduced herself to the board. She thanked them for appointing her and for the opportunity to serve. She stated that TCC was hitting its stride after substantial effort and was ready to submit a CDFI application within the next few months. She noted that the time commitment for board members was low. They met every two months, mostly by phone. When they met in person, it was usually on the day of the Corporation’s board meeting. The board members were provided with the reports and materials in advance of each meeting and the information was easy to follow and absorb. Mr. Jones asked what would happen if the new CDFI application was also declined. Mr. Long stated that TCC would continue, however the Corporation would reevaluate its involvement because the primary reason for TSAHC participation was based on TCC obtaining the CDFI certification to leverage dollars from the CDFI Fund in support of our affordable housing mission. Mr. Jones asked if any of the members would like to serve. Mr. Romero said he would be willing if no other member wanted to. He explained why he had originally resigned. He had felt at the time that the small dollar loan program didn’t fall under the umbrella of services that TSAHC provided. Affordable housing initiatives could be created if TCC were able to obtain CDFI funding, which would then fall under the Corporation’s mission, so he now felt the partnership with TACDC on TCC should continue.

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Mr. Long briefly explained the makeup of the board. He noted that the Corporation appointed two board members, TACDC appointed two board members and those four board members selected the fifth member. After discussion, the board determined that Mr. Romero would be the board’s appointee to the TCC board. Ms. Leon stated that he would be a tremendous asset to continue his service on the board. Mr. Long thanked Ms. Leon for serving as a member of the TCC Board. Mr. Meade made a motion to appoint Mr. Romero as a member of the Board of Directors of Texas Community Capital, LLC. Mr. Evenwel seconded the motion. Mr. Jones asked for public comment and none was given. A vote was taken and the motion passed unanimously. Public Comment Mr. Long provided the board with an update on the Texas Statewide Homebuyer Education Program (TSHEP). He noted that the Corporation served as the administrator of TSHEP and over the years, the trainings had been successful and well attended. The first round of training for 2016 had taken place in San Antonio at the Federal Reserve Bank of Dallas, San Antonio branch. 27 counselors had attended, representing 20 organizations from 15 different cities across the state. 100 percent of the counselors said they would recommend the training to others. Mr. Long commented this said a lot about the program itself and about the wonderful job that Ms. Ellinor did in putting the trainings together. He recognized Ms. Ellinor for her role in not only planning the event and making it a success, but also attending and participating as well. Mr. Long also informed the board that staff had made a presentation on the Mortgage Credit Certificate program at the request of the Lt. Governor’s office to the Texas Association of Realtors (TAR), the Texas Builders Association (TBA) and the Lt. Governor’s office. He complemented Mr. Almquist, Ms. Crim and Ms. Taylor on their excellent presentation. Open Meeting Mr. Jones welcomed new staff members Ms. Crim and Mr. Sepeda to the Corporation. He thanked Mr. Long and staff for their work and Mr. Joe Schafer, the court reporter. He also thanked the board for their work and due diligence. Adjournment Mr. Jones adjourned the meeting at 11:40 am. Respectfully submitted by________________________________________________ Laura Ross, Corporate Secretary

TAB 2

Portfolio /Developer Property Location Financing Units Set Aside requirementsDALCOR Pine Club Beaumont 232

Ridgewood HuntsvilleSaddlewood Club BryanTealwood Club Wichita FallsWillowgreen HoustonWoodglen Park Dallas

Worthing Oaks Aguila Oaks San Antonio 346

White Rock White Rock San Antonio 336

Marshall Meadows Marshall Meadows San Antonio 250 40% @ 60% AMI

Mary Lee Foundation The Willows Direct Lending 64

Rainbow Housing Chaparral Village Odessa 80 100% @ 60% AMICove Village Copperas Cove 50El Nido El Paso 104Garden Lubbock 62High Plains Lubbock 50Jose Antonio Escajeda El Paso 88Los Ebanos Brownsville 65Peppertree Fort Worth 148River Park Lampasas 50Salem Village Victoria 105Sierra Vista El Paso 106Spring Terrace Amarillo 50Win-Lin Village Amarillo 50

Rita Blanca Dalhart Direct Lending 28

Gateway Georgetown 180 40% @ 60% AMI

Palladium Midland Midland 264 40% @ 60% AMI

Woodside Village Palestine 92 100% @ 60% AMI

Sage Brush Brady Direct Lending 60 NA

Bunkerhill Senior Village Stephenville Direct Lending 44 NA

Residential Los Robles LTD Residence at the Oaks Dallas NA 212 100% @ 60% AMITDHCA Property TOTAL: 30 Properties 3,106

20% @50% AMI & 75% @ 80% AMI

20% @50% AMI & 75%@ 80% AMI

Multifamily Tax-Exempt Housing Bonds

Palladium Affordable Housing Development , Inc.

Multifamily Tax-Exempt Housing Bonds

DHI Woodside Apartments, LLCDF Affordable Housing Partners

DF Affordable Housing Partners

Texas Housing Foundation

Multifamily Tax-Exempt Housing Bonds

40% @ 60% AMI & Remainder(100%) @ 80% AMI

Multifamily Tax-Exempt Housing Bonds

Multifamily Tax-Exempt Housing Bonds

Guadalupe Economic Service Corporation (GESC)

Asset Oversight & Compliance

20% @50% AMI & Remainder(100%) @ 80% AMI

Multifamily Tax-Exempt Housing Bonds

Multifamily Tax-Exempt Housing BondsMultifamily Tax-Exempt Housing Bonds

40% @ 60% AMI & Remainder(100%) @ 80% AMI

Property Type Size Location Acquisition date Rent Lease end dateHome 3 BR & 2 Bath Round Rock 6/28/2013 1,214.00$ 11/30/2016Home 3 BR & 2 Bath Cedar park 1/28/2014 1,198.00$ 3/31/2017Home 3 BR & 2 Bath Cedar Park 2/25/2014 1,176.00$ 6/30/2016Home 3 BR & 2 Bath Georgetown 5/6/2014 1,198.00$ 1/31/2017Home 3 BR & 2 Bath Buda 10/1/2014 1,198.00$ 10/31/2016Home 3 BR & 2 Bath Leander 1/20/2015 1,198.00$ 1/31/2017Home 4 BR & 2 Bath Pflugerville 6/6/2013 1,336.00$ 11/30/2016Home 4 BR & 2 Bath Round Rock 3/26/2014 1,336.00$ 5/31/2017Home 4 BR & 2 Bath Manor 1/7/2016 1,336.00$ 12/31/2016Home 4 BR & 2 Bath Buda 1/16/2014 1,336.00$ 11/30/2016Home 4 BR & 2 Bath Georgetown 11/7/2014 1,336.00$ 10/31/2016Home 4 BR & 2 Bath Leander 1/2/2014 1,336.00$ 4/30/2017Duplex 3 BR & 2 Bath (x 2) South Austin 3/31/2015 2,412.00$ 4/30/2017 & 11/30/2016Condo 2 BR & 1 Bath South Austin 8/27/2013 1,000.00$ 10/31/2016

Property Location Size Location Unit Type Occupany Rehabbed1172 Webberville Rd 15 Units Austin 3 BR & 2 Bath 93.3% (14/15) 13.3% (2/15)

Property Location Size Location2200 E MLK JR Blvd 7,917 sq ft Austin1910 E MLK JR Blvd 3,259 sq ft Austin

Work Orders Opend Work Orders ClosedUnder 48 Hours

120 120 (100%) 49 (40.8%)

Commercial Properties

Multifamily Rental Program (MFRP)

Maintenance Program (YTD)

Single Family Rental Program (SFRP)

Note: 1 additional unit is being rehabbed at this time

TAB 3

TAB 4