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Presentation, discussion, and possible action on Resolution No. 25-021 amending previously adopted resolution relating to the Issuance of Multifamily Housing Revenue Bonds (The Ridge at Loop 12) Series 2025A-1, Series 2025A-2, and Taxable Bonds Series 2025B
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RECOMMENDED ACTION
recommendation
WHEREAS, the Board previously approved Resolution No. 25-013 (“Original Resolution”) at the Board meeting of January 16, 2025, for the issuance of Multifamily Housing Revenue Bonds (The Ridge at Loop 12) Series 2025A-1, Series 2025A-2, in the total amount of $50,000,000 and taxable bonds Series 2025B, in the amount of $11,914,000, for an aggregate principal amount of $61,914,000;
WHEREAS, subsequent to Board approval a request to amend the Original Resolution to accept a revision to the principal amounts of the Bonds, was received by the Department;
WHEREAS, the Board approved Resolution No. 25-017 at the Board meeting of April 10, 2025, which modified the amount of Bonds for The Ridge at Loop 12, Series 2025A-1, Series 2025A-2, in the total amount of $50,000,000 for Tax-Exempt Bonds and Taxable Bonds Series 2025B, in the amount of $9,702,000, resulting in an aggregate principal amount of $59,702,000;
WHEREAS, based on a myriad of factors, including but not limited to, updated construction numbers, recent release of the 2025 Income and Rent Limits, and movement in interest rates, the Department received a request for a second amendment to the Original Resolution that further revises the principal amounts of the Bonds to be issued;
WHEREAS, in accordance with Texas state law requiring the Board to set the terms for unrated bonds, Section 1.2 of Resolution No. 25-013 identified a formula for determining the respective principal amount of each series of the Bonds by reference to a schedule attached as Exhibit B to the Original Resolution;
WHEREAS, Resolution No. 25-013 (as amended by Resolution No. 25-017, dated as of April 10, 2025), is hereby further amended to modify the amount of Series 2025A-1, Series 2025A-2 and Series 2025B Bonds to be issued as reflected herein as Exhibit B; and
WHEREAS, underwriting and program staff will re-evaluate such change to ensure an increase in TCAP-RF units is not needed;.
NOW, therefore, it is hereby
RESOLVED, that Resolution No. 25-021 as the second amendment to the Original Resolution relating to Multifamily Housing Revenue Bonds (The Ridge at Loop 12) Series 2025A-1, Series 2025A-2, and Taxable Bonds Series 2025B, is hereby approved in the form presented to this meeting; and
FURTHER RESOLVED, that if approved, staff is authorized, empowered, and directed, for and on behalf of the Department to execute such documents, instruments and writings and perform such acts and deeds as may be necessary to effectuate the foregoing.
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BACKGROUND
General Information: The Bonds will be issued in accordance with Tex. Gov’t Code §2306.353 et seq., which authorizes the Department to issue revenue bonds for its public purposes, as defined therein. Tex. Gov’t Code §2306.472 provides that the Department’s revenue bonds are solely obligations of the Department, and do not create an obligation, debt or liability of the State of Texas or a pledge or loan of faith, credit or taxing power of the State of Texas.
Where the bonds will be unrated and privately placed, as is the case with The Ridge at Loop 12, the Department cannot rely on authority under Tex. Gov’t Code Chapter 1371, that authorizes the Board to delegate the determination of the final terms to an authorized officer of the Department, but must instead rely on the authority under Tex. Gov’t Code §2306.393 that requires the Board to set the terms.
The issuance of unrated, fixed rate tax-exempt bonds as Series 2025A-1, Series 2025A-2, and Taxable Bonds Series 2025B for The Ridge at Loop 12, in the aggregate principal amount of $61,914,000 was previously approved at the Board meeting of January 16, 2025. Subsequently, the Board approved a request to modify the amount of the Taxable Bonds at the Board meeting of April 10, 2025, at which the amount of the Taxable Bonds was approved to be reduced from $11,914,000 to $9,702,000, resulting in an aggregate principal amount of Bonds to be issued of $59,702,000.
Since the Board meeting of April 10, 2025, there have been additional factors that have resulted in changes to the schedule attached as Exhibit B to the previously amended resolution. Such factors include, but are not limited to updated construction numbers, recent release of the 2025 Income and Rent Limits, and movement in interest rates which makes the sliding scale of possible interest rates and corresponding loan amounts no longer applicable. Attached as Exhibit B to Resolution No. 25-021 is a revised schedule that reflects changes across all Series of the bonds and increased the total amount to be issued from $59,702,000 back to $61,914,000. While the tax-exempt amount to be issued remains the same at $50,000,000, the Taxable Bonds (Series 2025B) is increased from $9,702,000 to $11,914,000. The bonds will be initially purchased by NewPoint Real Estate Capital as previously presented. The amount of 4% Housing Tax Credits ($4,343,053) remained unchanged as well as the formula for determining the interest rate and maturity date.
Staff will re-evaluate this change to ensure an increase in TCAP-RF units is not needed, and that the loan still meets the Department’s rules.