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Presentation, discussion, and possible action on Resolution No.25-014 approving a financial advisory services agreement; authorizing the execution of documents and instruments necessary or convenient to carry out the purposes of this resolution; and containing other provisions relating to the subject
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RECOMMENDED ACTION
Adopt attached resolution.
BACKGROUND
TDHCA issues revenue bonds from time to time, as authorized by Tex. Gov’t Code §2306.353. Issuance is done in either the TDHCA Single Family Mortgage Revenue Bond Indenture or the Residential Mortgage Revenue Bond Indenture. Bond proceeds are used to fund below market mortgage loans for qualified low, very low, and moderate-income first-time homebuyers across the State of Texas. These indentures have grown to a Fair Market Value of over $3.6 billion as of August 31, 2024.
TDHCA also operates a TBA mortgage program whereby the Department makes mortgage loans and provides Down Payment Assistance to qualified low, very low, and moderate-income Texas homebuyers. These loans are priced, pooled, and sold in the open market.
Tex. Gov’t Code §2306.053 paragraph 9, outlines that the Department may appoint and determine the qualifications, duties, and tenure of professional advisors and financial consultants. TDHCA has utilized the services of financial advisory firms since the inception of the program.
On September 15, 2024, the Department issued a Request for Proposals (RFP) for firms interested in serving as Financial Advisor for both Single-Family and Multi-family Bond Finance. The RFP had a submission deadline of October 18, 2024. The Department received proposals from four firms: Caine Mitter, CSG, CfX, and Stifel Nicolaus by the due date.
A review team of seven Department staff from both Single Family and Multifamily Bond Finance evaluated the responses and selected CSG to serve as Financial Advisor to the Department.
The contract is expected to begin on January 17, 2025. The term of the award is two years, with the ability to renew and extend for one year per renewal, for a maximum of three consecutive renewal years.
TDHCA has the right to terminate the agreement, in whole or in part, with 30 day’s notice.
The value of the contract is expected to be approximately $1 million per year, depending on the Department’s level of bond issuance and additional services requested of and provided by the Financial Advisor.
Financial Advisor fees will be paid either with bond proceeds or indenture excess revenue.
Services to be provided are provided in the Board Book in the document entitled ‘CSG Proposed Services’.