Breaking Ground, Volume 3, Number 2, June/July 1998 Page: 3
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Breaking Ground
1998 HOME Program Cycle
Nears CompletionThe Department's 1998 allocation
from the U.S. Department of.
Housing and Urban Development'
for HOME (Home Investment
Partnerships) programs and activities is
$3,664,200.
The breakdown of the funds by
program activity includes: 1) 15 percent
for Owner-Occupied Rehabilitation; 2)
20 percent for Homebuyer Assistance;
3) Seven percent for Tenant-Based
Rental Assistance; 4) 10 percent for
Interim Construction; 5) 20 percent for
Rental Projects; and 6) 28 percent for a
Housing Demonstration Fund. This fund
includes Down Payment Assistance, Low
Income Housing Tax Credits and a
Colonias Bond Reserve that will be usedmar and Nancy Hernandez
recently realized their dream of
owning property. They
participated in the Contract-for-Deed Conversion
Initiative implemented by Texas State
Affordable Housing Corporation (TSAHC)
and-the Texas Department of Housing and
Community Affairs.
They will now have the title for their
property recorded in their name in the
county records; previously, it was in the
name of the subdivision's developer. Mr.
and Mrs. Hernandez realized they would
benefit greatly by participating in this
initiative..
"We wanted to take advantage of the
grant that was provided for the closing
costs" Mr. Hernandez said.
The new homeowners realized a
lower, fixed interest rate of eight percent,
which reduced their monthly principal and
interest payment. With the conversion
nowccomplete, the Hernandez family can
take advantage of financing for home
improvements.
The Department offers two programs
designed to convert contracts-for-deed to
traditional mortgages: the Contract-for-Deed-
Conversion Program and the Contract-for-Deed
Conversion Initiative. Both have the same
basic guidelines. The difference between
the two is that the Contract-for-Deed
Conversion Program is for individual
contract conversions, while the Initiative
program is designed for bulk purchase'
The Department is currently
identifying developers interested in
participating in the Contract-for-Deed
Conversion Initiative. Under this ~
initiative, developers may propose to sell
their portfolio of contracts-for-deed to thefor the conversion of contracts-for-deed.
he HOME staff received 217
applications by the May 15 deadline
after conducting workshops throughout
Texas in March and April. Applicants a-re
seeking $77,756,013 in funds for the
development of 5.,638 affordable
housing units. Based on historical
trencs, TDHCA staff estimates that
about 70 to 90 of the applicants will
receive funding.
Scoring of the applications began
May 20th and ended June 26th, and the
reconciliation process is currently
underway. The process will culminate
with HOME Program staff
recommendations to the TDHCA's
governing board in July and August.Department. Pricing for the portfolio will
be negotiated between the Department
and the holder of the contracts-for-deed.
The conversion rate for the initiative is a
fixed interest rate of eight percent, and
closing costs will be granted up to $2000.
The Department has also set aside
$200,000 for the Self-Help Centers to use
in converting individual contracts-for-
deed in their service area. This will give
colonia residents the opportunity to take
advantage of the program if the holder of
the contract'is not participating in the
bulk conversion initiative.'The conversion
rate will also be fixed at eight percent, and
the existing balance of the contract-for-
deed will determine pricing. Closing costs
will also be granted up to $2000.
Borrowers participating in.either the
Conract-for-Deed Conversion Program
or Initiative'must be permanent residents
or citizens of the U. S. Qualified'
borrowers will be eligible for other
programs if their gross income is 80
percent or below the Area Median Family
Income (AMFI). Priority is given to
borrowers earning 60 percent or less of
AMFI-iin compliance with state
mandates.
Properties must be located in a
.coloiia---as identified by the Texas Water
Development Board's colonia list-or in
an area that meets the Department's
definition. All colonia properties must
meet Colonia Housing Standards (CHS)
to be eligible for conversion.
Anyone interested in participating in
the conversion initiative can call,
TDHCAs Office of Colonia Initiatives
toll-Tee at 1-800-462-4251.TDHCA Governing
Board to AllocateTax Credits
More than 190 applications
seeking nearly $1 15 million in credits
through the Low Income Housing
Tax Credit Program (LIHTC) were
received prior to the Department's
May deadline.
In 1998, TDHCA will allocate
approximately $22.3 million in tax
credits. There was also a dramatic
two-fold increase in proposals-
seeking to build properties for low
income senior citizens - from 23
proposals submitted in 1997 to 47
proposals in 1998.
The Department conducted three
public LIHTC hearings in Dallas,
Houston and San Antonio, with a
combined total attendance estimated
at more than 600 persons. As was the
case last-year, the vast majority of
citizens spoke in support of proposed
tax credit developments.
The TDHCA Governing Board
will vote to allocate credits at their
July 24 meeting. Prior to that
meeting, TDHCA staff will submit
their recommendations to the tax
credit committee. In turn, the
committee will make their recom-
mendations to the Board for final
approval.
The LIHTC program was created
through the Feder'al Tax Relief Act of
1986 and is the primary financial
incentive dedicated toward the
private sector development of
'affordable housing. Since 1987, the
LIHTC program has provided for the
creation of more than 74,000 units of
affordable housing in Texas and
nearly 1 million nationwide.Program Helps Colonia Residents
Convert Contract-for-Deeds0C
. 1
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Texas. Department of Housing and Community Affairs. Breaking Ground, Volume 3, Number 2, June/July 1998, periodical, June 1998; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1587231/m1/3/: accessed July 7, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.