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Presentation and discussion regarding the issuance of Texas Department of Housing and Community Affairs Residential Mortgage Revenue Bonds, Series 2025A (Non-AMT)
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BACKGROUND
On October 10, 2024, the TDHCA Governing Board approved Resolution 25-004 authorizing issuance of Mortgage Revenue Bonds by the Department in an amount not to exceed $1.1 billion for Fiscal Year 2025. After the issuance of RMRB 2025A, the Department will have $925 million of issuance authority remaining.
On June 25, 2024, the Department issued $150 million Residential Mortgage Revenue Bonds, Series 2024 C (Non-AMT) and $100 million Residential Mortgage Revenue Bonds Series 2024 D (Taxable). The bonds settled on July 18, 2024. These funds are now fully reserved.
Market conditions remain reasonably conducive to the issuance of additional series of tax-exempt mortgage revenue bonds under the Department's Residential Mortgage Revenue Bond Trust Indenture (RMRB) to finance mortgage loans for very low, low, and moderate income homebuyers. We currently estimate mortgage rates around 25 to 50 basis points lower than rates available under the TMP (aka TBA) Program.
Demand has slowed and as a result, the Department is doing a smaller issue of $175 million and is issuing only Tax-Exempt bonds to ensure the lowest possible mortgage rates. Staff is looking to issue Texas Department of Housing and Community Affairs, Residential Mortgage Revenue Bonds, 2025 A (Non-AMT).
A portion of the proceeds, not to exceed par of $150,000,000 and premium of $12,000,000 will utilize new private activity volume cap.
A portion of the proceeds, not to exceed par of $40,000,000, will utilize recycled volume cap and will be used to repay amounts owed under the Advances and Security Agreement between the Federal Home Loan Bank and the Department representing recycled repayments from September 1, 2024, through January 1, 2025.
2025A Bonds
The 2025A Bonds will be issued in a maximum par amount o...
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