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Report regarding a Request for Proposal for Underwriters issued by the Texas Department of Housing and Community Affairs
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BACKGROUND
The Texas Department of Housing and Community Affairs (the Department) issues Mortgage Revenue Bonds to provide mortgage financing opportunities to low, very low, and moderate income homebuyers, and to refund existing debt for savings or other benefits.
Mortgage Revenue Bonds (MRBs) are the primary financing mechanism for the Department’s homeownership programs as mortgage loans funded with MRBs typically result in lower rates than can be achieved through the Departments TMP (or TBA) program. Additionally, premium realized on the sale of MRBs has been used to fund down payment and closing cost assistance as well as of the lender compensation for the related mortgage loans. This allows the Department to manage its liquidity position, ensuring the long-term viability of the single-family program. In fiscal year 2025, the Department issued $675 million in MRBs.
The Department last issued a Request for Proposal (RFP) for Underwriters in 2023, where 9 firms were selected to be part of TDHCA’s Underwriting team. Looking to enhance our retail distribution, the Department issued an RFP on September 1, 2025 to add to the existing underwriting team. Thirteen (13) responses were received. A review team of Department staff evaluated the eligible responses, and added the following two firms to serve as Underwriters (the Underwriting Team):
Bank of America Securities
Fidelity Capital Markets
Staff, in consultation with the Department’s financial advisor, will select which firms on the Underwriting Team will serve as Senior Manager and Co-Managers for each bond issue on a transaction-by-transaction basis. Underwriter roles for each transaction will be based on a combination of factors, including past performance, creative and viable recommendations and ideas, proposed for structures which meet the Department’s financing needs, specific experience or expertise with the proposed financing structure, and other relevant considerations.
The term of this award is two years, with no ability to renew.