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Presentation, discussion, and possible action on the approval of a loan for Waverly North
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RECOMMENDED ACTION
recommendation
WHEREAS, the above listed development was awarded 9% housing tax credits during the 2025 competitive Application round;
WHEREAS, the Developer applied for additional funds under the Department’s 2026-1 National Housing Trust Fund (NHTF) Notice of Funding Availability;
WHEREAS, the Department is now recommending approval of a loan in the amount of $5,800,000, with proposed loan terms and details concerning the Development’s financials outlined below; and
WHEREAS, this recommendation is being presented to the Board prior to the issuance of the Real Estate Analysis Underwriting Report and a necessary amendment to the original Application, and as a result, is conditioned upon the satisfactory completion of both of those processes;
NOW, therefore, it is hereby
RESOLVED, that the loan of $5,800,000 of NHTF to Waverly North is approved, subject to conditions that may be applicable as found in the Real Estate Analysis Underwriting Report when it is issued, any HUD required environmental conditions, obtaining approval for a necessary amendment to the original Application, and the conditions as outlined herein.
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BACKGROUND
Development Information: Waverly North is to be located in Austin, Travis County, and proposes the adaptive reuse of 76 units that will serve the general population. The Development will serve households with incomes at or below 30% to 80% of Area Median Family Income (AMFI).
The Development was initially proposed to have 17 30% AMFI units in its 2025 9% housing tax credit Application. As a result of this loan, the Development will have no less than 28 30% Units.
In accordance with 24 CFR § 93.302, for 30% units under the Direct Loan LURA, the rent is, “not exceed the greater of 30 percent of the federal poverty line or 30 percent of the income of a family whose annual income equals 30 percent of the median income for the geographic area, as determined by HUD, with adjustments for the number of bedrooms in the unit.”
Financial Information: The Department’s $5,800,000 NHTF loan is to be structured as repayable at 2.00% interest and monthly payments and is in first-lien position during the permanent period. Subject to the final underwriting, the loan is currently anticipated to have a 40-year term with 40-year amortization, although this could shift if needed to meet the Department’s underwriting criteria.
The Development was initially awarded $1,990,204 in federal housing tax credits in 2025. Since the last underwriting, total development costs have remained generally consistent at approximately $32 million. Credit pricing has decreased from $0.86 to $0.80, which is still comparatively strong. The proposed financing structure for the project has substantially changed since the initial Application, and the Department’s loan will be joined by several forms of tax credit equity (9% housing tax credits and both state and federal historic tax credits) and several private loans.
Timeline and Conditions: This loan is being presented to the Governing Board for approval earlier than would be typical. The Department is still finalizing the project’s underwriting, and an amendment to the initial Application will be necessary due to changes required as part of the historic tax credit process. That amendment is scheduled to be presented at the meeting to be held on September 3, 2026. The Developer is anticipating closing with equity in August, which cannot occur without approval of this loan. To facilitate this closing, staff recommends that the Board condition this award on the successful completion of underwriting and approval of the necessary amendment to the original Application. Should either of those processes not complete successfully, the Department will not move forward with this loan.
The funds from this loan are sourced from the Department’s 2024 NHTF grant, which has a business federal commitment deadline of September 4, 2026. Regardless of whether a rule would provide additional time, the Borrower must submit all required due diligence and provide timely comments on the draft NHTF Contract to ensure execution of the Contract by both parties no later than August 21, 2026. Failure to meet this deadline may result in termination of the award, which will not be appealable to the Board of Directors if the Department no longer has access to the 2024 NHTF funds. The Borrower may also be subject to penalties under 10 TAC §13.11(b).