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e e SOUTHEAS'f TEXAS HOUSING FINANCE CORPORATION Bill Eiland Executive Director October 20, 1993 CERTIFIED MAIL RETURN RECEIPT REQUESTED TO: MA YORS OR COUNTY JUDGES OF SPONSORING GOVERNMENTAL BODIES OF THE SOUTHEAST TEXAS HOUSING FINANCE CORPORATION The Southeast Texas Housing Finance Corporation ("Southeast Texas") needs your help to undertake two new programs designed to make housing more affordable to persons of low and moderate income in your jurisdiction. The first program is a trad,itional single family mortgage revenue bond program. Southeast Texas recently received authority.from the State of Texas to issue up to $30 million aggregate principal amount of tax-exempt single family mortgage revenue bonds to raise money to make below-market-rate mortgage loans to qualified low and moderate income individuals and families in Southeast Texas' jurisdiction; including your city or county. Like any of Southeast Texas' bonds, pursuant to state law, the proposed bonds would not be a debt or obligation of your jurisdiction and would be payable only from payments received from the mortgage loans made with the proceeds of the proposed bonds. The second program is a mortgage credit certificate program. Southeast Texas may, under federal law, exchange all or a portion of the bond authority that it recently received for authority to issue mortgage credit certificates to qualified low and moderate income home buyers in its jurisdiction. Mortgage credit certificates would permit home buyers to receive credits against their federal income taxes for a specified portion of the interest payments on their mortgage loans, thereby enabling them to better afford their mortgage payments. Southeast Texas presently plans to issue $25 million aggregate principal amount of tax- exempt single family mortgage revenue bonds and exchange the remaining $5 million of its bond authority for mortgage credit certi ficate authority; however, if market conditions so warrant, it may issue a greater amount or a lesser amount of bonds unused bond authority to mortgage credit certificate authority. In any event, as I noted earlier, Southeast Texas needs your help to undertake these programs. Under state law, Southeast Texas' bonds must be approved by the Texas Attorney General. As part of his approval process, he requires certain certifications regarding Southeast Texas from each of its sponsoring political subdivisions. In addition, pursuant to the so-called "TEFRA" hearing and approval requirements of the Internal Revenue Code, the highest elected official in each of Southeast Texas' sponsoring local governmental units (i.e.,. you and the other mayors and county judges) must approve the single family bond program and the mortgage credit certificate program in order for these programs to comply with the. 4620 Fairmont Parkway · Suite 201 · Pasadena, Texas 77504 (713) 487-8772 .. FAX (713) 487-9574