Title
Consider/Discuss/Act on a Resolution Approving Assignment of Private Activity Bond Authority to the Texas Department of Housing and Community Affairs; and Containing Other Provisions Relating to the Subject
Summary
COUNCIL GOAL: Direction for Strategic and Economic Growth (1B: Provide a strong city economy by implementing a Global Housing Strategy with a focus on affordable housing and facilitating a balance between industrial, commercial, residential, and open space)
MEETING DATE: August 18, 2026
DEPARTMENT: Housing and Community Development
CONTACT: Cristel Todd, Affordable Housing Administrator
Margaret Li, Director of Housing and Community Development
RECOMMENDED CITY COUNCIL ACTION:
• Approve Resolution
ITEM SUMMARY:
• Chapter 1372 of the Texas Government Code (the Texas Private Activity Bond Allocation Act) is the state law that allows Housing Finance Corporations (HFCs) to apply for and receive a portion of Texas's annual tax-exempt bonding authority (state ceiling).
• The McKinney Housing Finance Corporation (MHFC) will apply to the Texas Bond Review Board (TBRB) for $6,000,000 in Private Activity Bonds (PAB) volume cap and assign the authority to the Texas Department of Housing and Community Affairs (TDHCA) to administer tax-exempt bond program and Mortgage Credit Certificates (MCCs) locally.
• Qualified first-time homebuyers will gain access to below-market interest rate mortgages, MCC tax credits, and TDHCA’s Down Payment Assistance (DPA) program.
• The MHFC will provide an additional $5,000 in local DPA per homebuyer to enhance affordability for McKinney residents.
• TDHCA handles all homebuyer qualifications, lender network management, loan servicing, reporting, and compliance. The MHFC’s role is limited to applying for the allocation and executing an agreement with TDHCA.
• The MHFC is not required to qualify homebuyers, service loans or do anything beyond applying for PAB cap and executing an agreement with TDHCA.
• TDHCA will pay the $500 application fee.
BACKGROUND INFORMATION:
• The MHFC has successfully partnered with TDHCA on this initiative over the last four years. Continuing this established partnership allows the MHFC to leverage TDHCA’s statewide lender network, marketing infrastructure, and administrative capacity-maximizing local homebuyer participation, streamlining compliance, and delivering enhanced down payment assistance without adding municipal staff overhead.
• To date, the MHFC has assigned $10,000,000 to TDHCA, with 73% of funds successfully utilized and $2,686,866 currently remaining for local homebuyer assistance.
FINANCIAL SUMMARY:
• The MHFC will receive an ongoing annual fee of 4.75 basis points, determined by the total loan production volume within McKinney.
• The MHFC DPA funding ($5,000 per homebuyer) will be drawn from dedicated MHFC funds. There is no impact on the General Fund.
BOARD OR COMMISSION RECOMMENDATION:
• On July 24, 2026 (special board meeting), the MHFC approved a Resolution approving delegation of bond issuance authority and assignment of PAB Authority to TDHCA.