2005-01-22 Back up for Special Called City Council Retreat Meeting of La Porte City Council

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• drat rs �fforda6x TDHCA has prepared this flyer to help you gain a better understanding of our Multifamily Mortgage Revenue Bond (MRB) and Housing Tax Credit (HTC) Programs. Pletave note: This document does not address the details of a specific development. Q: Just what does "affordable housing" mean? A: It means that the rent is affordable for the residents, with rent payments not greater than 30 percent of the resident's annual in- come. For example, a resident with a yearly family income of $30,000 would pay no more than $750 a month for rent. Q: Where does the money to build an affordable housing development come from? A: With the M.RB Program, the Texas Bond Review Board makes available tax- exempt mortgage revenue bonds, which are purchased by private investors or in- vestment firms. The proceeds from the sale of these bonds go toward low -inter- est loans to the developers of the properties. The lower interest rate allows for the development of high quality properties at a lower cost, and enables the property to offer rents that are below tradi- tional market rate units. With the HTC Program, housing tax credits are awarded to a devel- oper, who in turn sells the credits to investors. The investors then use the credits to lower their federal tax liability. The investment of capital (money) enables the developer to build high quality proper- ties and offer rents that are below traditional market rate units. In addition to lower rents, these properties offer valuable services to tenants that range from after -school programs, family activity centers, computer labs, and literacy programs, to matched savings plans that can be used to purchase a home or fund educational op- portunities. Q: What income levels do the bond and tax credit properties serve? A: In general, the programs target households earning no more than 60 percent of the area median family income (AMFI). For TEXAS DEPARTMENT OF HOUSING AND OMMUNITY AFFAIR$ example, using the statewide AM.FI of $53,000, a family of four at 60 percent A.MFI would earn $31,800. However, some properties place a priority on targeting households at lower incomes while oth- ers may choose to have a mix of low income units and market rate units. Q: Who actually lives in affordable housing? A: Individuals and families who earn or receive an income but who still have a hard time finding decent housing that they can afford. This includes employees in service -related industries, single par- ents, persons with disabilities, elderly and retired individuals, and others of modest means. Because developers have a significant fi- nancial investment, they want to keep the property in good condition and lease to tenants who will do the same. As with tra- ditional market rate properties, tenants are subject to income and employment re- quirements, and property managers may perform criminal background checks on potential tenants. Q: Is this Section 8 housing? A: NO, this is very different from the project -based Section 8 Pro- gram, now known as the Housing Choice Voucher Program. Tenants of MRB/HTC properties must pay their rent in full each month — there is no tenant subsidy. The programs' benefit is high quality hous- ing with monthly rents that are below the market rate. Note: Holders of a Housing Choice Kmcher muv rent at an MRB or //TC properi , just as they maj, rent anY traditional market rate unit in the Us. but they must meet the some tenant requirements described above.