Title
Consider/Discuss/Act on a Resolution of the McKinney Housing Finance Corporation Approving Delegation of Bond Issuance Authority and Assignment of Private Activity Bond Authority to Texas Department of Housing and Community Affairs; Authorizing the Execution and Delivery of an Assignment Agreement; and Containing other Provisions Relating to the Subject
Summary
COUNCIL GOAL: Goal#1. 1: Provide a Strong Economy by Creating a Global Housing Strategy and Facilitating a Balance Between Industrial, Commercial, Residential, and Open Space.
MEETING DATE: July 24, 2026
DEPARTMENT: Housing and Community Development
CONTACT: Cristel Todd, Affordable Housing Administrator
Margaret Li, Housing and Community Development Director
RECOMMENDED BOARD ACTION:
• Approve Resolution.
ITEM SUMMARY:
• The proposed Resolution authorizes the delegation of single-family bond issuance authority and the irrevocable assignment of $6,000,000 in Private Activity Bond (PAB) allocation to the Texas Department of Housing and Community Affairs (TDHCA).
• Enables TDHCA to act on behalf of the McKinney Housing Finance Corporation (MHFC) to finance affordable home mortgages for low- and moderate-income residents within McKinney, or to exchange the bond allocation for Mortgage Credit Certificates (MCCs) which provide direct tax credits to qualifying first-time homebuyers.
• Texas Local Government Code § 394.032(e): Authorizes the Corporation to delegate its housing finance powers and bond issuance authority to the state department (TDHCA).
• The Texas Government Code Chapter 1372 (Allocation Act): Permits the Corporation to transfer its state-ceiling volume cap reservation to another authorized public issuer.
• The MHFC’s governing body will be required to approve the assignment.
• TDHCA estimates sufficient demand to support a 2026 Volume Cap assignment of up to $6,000,000. As in prior years, TDHCA will cover the Bond Review Board (BRB) application and filing fees on behalf of the MHFC.
BACKGROUND INFORMATION:
• TDHCA appreciates its continued partnership with MHFC. Since inception, MHFC has assigned approximately $10,000,000 in PAB Volume Cap to TDHCA.
• As of March 31, 2026, approximately 62.13% of these funds have been utilized to provide below-market mortgage loans and Mortgage Credit Certificates to first-time homebuyers within City of McKinney. Demand for these programs has increased significantly over the past year.
FINANCIAL SUMMARY:
• TDHCA will pay an ongoing fee of 4.75 basis points against the aggregate outstanding balance of MHFC Loans that have been pooled into mortgage-backed securities or for which an MCC has been issued.
• The MHFC Fees will be paid for a period of ten years for each loan originated under the Assignment Agreement, that is not more than 30-days delinquent at the time the Pooled Loan Fee is calculated.