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Tennessee Housing Development Agency - Board of Directors

Meeting Materials May 23, 2017

Tab 1 – Agenda

Tab 2 –Memo from Ralph Perrey, Service Award Recipients

Tab 3 - Board Meeting Minutes

from March 28, 2017

Tab 4 – Tax Credit Committee Meeting Materials

Tab 5 – Bond Finance Committee Meeting Materials

Tab 6 – Grants Committee Meeting Materials

Tab 7 – Lending Committee Meeting Materials

Tab 8 – Rental Assistance Committee Meeting Materials

Tab # 1 Items:

Agenda

THDA Board of Directors Meeting

May 23, 2017—1:00 p.m. Central Time

William R. Snodgrass -Tennessee Tower

312 Rosa L Parks Avenue, Third Floor

Nashville, Tennessee 37243

All meetings will be held in The Nashville Room

AGENDA (Tab #1)

Public Comment to the Board Bills, Perrey, Board Members

A. Opening Comments and Introductions ....................................................................................................... Bills

B. Staff Recognition (Directors) (Tab #2) .................................................................................................... Perrey

C. Approval of Minutes from March 28, 2017, Meeting (Tab #3) ................................................................. Bills

D. Executive Director’s Report (Tab #2) ...................................................................................................... Perrey

E. Committee Reports and Committee Matters

1. Tax Credit Committee (Monday, May 22—1:00 pm CT) (Tab #4) ................................................... Tully

* a. 2016 Competitive Low-Income Housing Credit Exchange Waiver Requests ............................... Duarte

b. Discussion of 2018 Low Income Housing Tax Credit Qualified Allocation Plan ........................ Duarte

2. Bond Finance Committee (May 17 at 4:30 pm or May 18 at 1:30 pm State Capitol Room G-11)

(Tab #5) ................................................................................................................................................. Bills

* a. Consideration of Sale of Issue 2017-2 ............................................................................................ Miller

* b. Issue 2017-1 State Form CT-0253 .................................................................................................. Miller

* c. Fiscal Year 2017-2018 Schedule of Financing ............................................................................... Miller

* d. Bond Counsel Selection .................................................................................................................. Miller

* e. Public Records Policy ..................................................................................................................... Miller

f. THDA Debt Management Policy ................................................................................................... Miller

3. Grants Committee (Tuesday, May 23—10:00 am CT) (Tab #6) ............................................. van Vuuren

* a. Housing Trust Fund Challenge Grant Program Description ............................................................ Watt

* b. Request for Extension of 2012 and 2013 HOME Grants ................................................................. Watt

* c. Request for Extension of 2017 Emergency Repair Program Grant Agreements .............................. Watt

* d. Request to Issue 2017 HOME CHDO Mini-Round Program Description ....................................... Watt

e. Update on HOME, ESG and HTF Competitive Grant Awards (verbal) .......................................... Watt

f. Sumner County 2011 HOME Project Update (verbal) ..................................................................... Watt

4. Lending Committee (Tuesday, May 23, 2017—10:15 am CT) (Tab #7) ....................................... Cleaves

* a. Great Choice Program Income Limits ............................................................................................... Arik

b. HHF / DPA Program Updates (verbal) .............................................................................................. Hall

5. Rental Assistance Committee (Tuesday, May 23, 2017—10:30 am CT) (Tab #8) ........................ Brown

a. Section 8 Rental Assistance Program Update ................................................................................. Ridley

* Indicates Board Action Required ? Indicates Discussion Which Might Result In Board Action

Tab # 2 Items:

Memo from Ralph M. Perrey, Executive Director

Service Award Recipients

Bill Haslam Ralph M. Perrey Governor Executive Director

www.THDA.org - (615) 815-2200 - Toll Free: 800-228-THDA

Tennessee Housing Development Agency

Andrew Jackson Building Third Floor 502 Deaderick St., Nashville, TN 37243

To: THDA Board of Directors From: Ralph M. Perrey, Executive Director Date: May 10, 2017 THDA Board Members: Our meeting of May 23 will be Brian Bills’ last as THDA Board Chairman. I am personally grateful for the opportunity to serve with Brian, first as a Board member and, since late 2012, as Executive Director. His steady leadership and sound judgment served THDA well on a number of occasions these last seven years. Please join THDA’s Senior Leadership as we thank Brian for his service. We will offer light refreshments for an informal get-together in his honor on Monday, May 22 at 4:00 pm Central Time in the conference room of our Volunteer Mortgage Loan Servicing offices (14th floor, Parkway Towers). I hope you will be able to join us. For the board meeting itself, several action items await your consideration:

Bond Finance Committee, meeting on either May 17 or 18 following pricing of Issue 2017-2, will also take up the Scheduling of Financing for FY 2017-18 and the selection of THDA’s Bond Counsel.

Grants Committee will consider our proposal to create Housing Trust Fund Challenge Grant program, as well as a pair of extension requests for HOME grants and the ERP program description for grants we will award later this year.

Depending on the timing of Federal determinations regarding income limits for eligibility for Great Choice mortgage loans, we may need to ask Board ratification of changes. If so, Lending Committee will take this up first.

We will also provide updates on the successful start to our HHF Down Payment Program, and the Rental Assistance Committee will get an update on organizational and process changes we have implanted in our Housing Choice Voucher program. We look forward to seeing in Nashville later this month. As always, please feel free to contact me with any questions or concerns, and let Cindy Ripley know if you need assistance with logistics and travel.

Celebrating Years of Service

5 Years

Deanna Poole Rental Assistance Specialist

Section 8 Rental Assistance

THDA Hire Date: May 1, 2012

10 Years

Annette Walker Fss & Homeownership Voucher Specialist



10 Years

Velma Kemp Rental Assistance Coordinator



15 Years

Sophia Massey Senior Internal Auditor

Internal Auditor

State Hire Date: June 1, 1998

THDA Hire Date: October 1, 2007

Rehire Date: December 6, 2010

Tab # 3 Items:

Board Meeting Minutes from March 28, 2017

TENNESSEE HOUSING DEVELOPMENT AGENCY

BOARD OF DIRECTORS

March 28, 2017

Pursuant to the call of the Chairman, the Tennessee Housing Development Agency Board of

Directors met in regular session on Tuesday, March 28, 2017, at 1:00 p.m. Central Time, in the William R.

Snodgrass Tennessee Tower, The Nashville Room, Nashville, Tennessee.

The following Board members were present: Brian Bills (Chair), Kim Grant Brown, Dorothy

Cleaves, Secretary of State Tre Hargett, Regina Hubbard, Treasurer David Lillard, Greg Turner for

Commissioner of Finance & Administration Larry Martin, Lynn Tully, Todd Skelton and Ann Butterworth

for the Comptroller of the Treasury Justin Wilson. The following Board members were absent: Ron Jones,

Daisy Fields and Pieter van Vuuren.

Chairman Bills recognized Ralph Perrey, Executive Director, who recognized the following THDA

staff members for their years of service:

Kevin Rogers Information Technology 5 years

Stan Pack Multifamily Development 10 years

Chuck Pickering Single Family Programs 15 years

Mr. Perrey then recognized Tanya Davis-Barlar, who is retiring, for her 31 years of service to the

State and THDA, particularly with respect to training and development and the THDA Leadership

Academy.

Chairman Bills, seeing a quorum present, called the meeting to order and offered a time for public

comment. With no one wishing to address the Board, Chairman Bills called for consideration of minutes

from the January 24, 2017, meeting. Upon motion by Chairman Bills, second by Mr. Skelton, amended

minutes to be corrected for grammatical errors were approved.

Chairman Bills recognized Mr. Perrey who presented the Executive Director’s report covering the

following matters:

Jim Sattler resigned from the THDA Board of Directors.

Bringing loan servicing in-house is a very significant undertaking. Staff expects to begin

servicing THDA loans on a flow basis this spring with transfer of the balance of the portfolio

beginning later this summer.

2016 Single Family Loan Report detailed production is up 31% statewide since 2014,

especially in East Tennessee. In spite of challenges in serving rural communities, loan volume

in those areas has doubled over the last three years. First quarter production for this year is

running just slightly above 15% last years’ numbers which was 7% better than the year before.

Great Choice Tours will continue in April in Knoxville, Memphis, Chattanooga, and Middle

Tennessee markets.

Rebuild and Recover Program in the Grants Committee involves a proposed amendment to

make Sevier County eligible to apply for federal funds to assist in providing affordable housing

as a result of the wild fires that took place in the County.

A video about Sevier County was shown in connection with the assistance THDA is providing

in Sevier County due to the fall 2016 wild fires.

2

Chairman Bills reported on the Bond Finance Committee meeting and recognized Lynn Miller,

THDA Chief Legal Counsel, to address authorization of Issue 2017-2. Ms. Miller referenced the following

documents in the Board materials:

● a memorandum from Lynn Miller, dated March 15, 2017, that described (1) the documents to

be considered, (2) how the authorization for Issue 2017-2 complied with THDA’s Debt

Management Policy, (3) the rotation for the bookrunning senior manager, (4) the selling group

member that would fill the rotating co-manager position, and (5) the selling group members;

● a memorandum from CSG Advisors (“CSG”), THDA’s financial advisor, dated

March 13, 2017, that recommended authorization of this transaction, through a negotiated sale,

in an aggregate principal amount not to exceed $200 million under the 2013 General

Resolution;

● the Plan of Financing for Issue 2017-2 in an aggregate principal amount not to exceed

$200 million (“Plan of Financing”);

● the Resolution of the Board of Directors authorizing the issuance and sale of Issue 2017-2 under

the 2013 General Resolution, and delegating authority to the Bond Finance Committee to

determine all final terms and conditions of the Issue 2017-2 bonds (the “Authorizing

Resolution”);

● the form of Series Resolution for Issue 2017-2; and,

● the Resolution of the Board of Directors authorizing reimbursement of THDA from proceeds

of Issue 2017-2 in an amount not to exceed $60 million (the “Reimbursement Resolution”).

Ms. Miller indicated that Issue 2017-1 would close on March 30, 2017, however, loans in the amount of

approximately $60 million have been purchased, leaving approximately $40 million in available proceeds

from Issue 2017-1. She noted production for January through March exceeded the projections made in

December.

Chairman Bills noted that the Bond Finance Committee approved a process for selecting bond

counsel and approved a Request for Qualifications.

Chairman Bills then recognized Kim Grant Brown to report on the Rental Assistance Committee

meeting. Ms. Brown indicated that Trent Ridley, Chief Financial Officer, provided an update on the Section

8 Housing Choice Voucher (HCV) program and Project Based Contract Administration (PBCA), but that

there were no action items.

Chairman Bills reported on the Grants Committee meeting and recognized Don Watt, Director of

Community Programs, who presented the following Committee recommended changes to the Rebuild and

Recover Program Description as described in his memo dated March 15, 2017:

Allow communities with a declared federal disaster declaration to be assisted when the impact

to housing is so severe that additional resources are necessary.

Require assisted units to meet THDA’s Design Standards for Rehabilitation, or, for

reconstruction, THDA’s Design Standards for New Construction.

Require that all work be inspected by a qualified inspector as defined by THDA.

Add a compliance period that is comparable to the compliance period established for THDA’s

HOME program.

Upon motion by Chairman Bills, second by Ms. Butterworth, the recommended changes were approved.

3

Chairman Bills next called on Mr. Watt to discuss authorization to submit the 2017 Weatherization

Assistance Program (WAP) application to the U.S. Department of Energy. Mr. Watt referenced his memo

dated March 15, 2017 and noted that the application deadline is May 1, 2017. He explained that the

Committee recommended the following:

Increase the maximum amount of assistance per unit from $7,105 to $7,212.

Authorize staff to submit the WAP application by the May 1 deadline.

Authorize the Executive Director to approve changes as necessary to meet changes in program

requirements and to not submit an application if it is determined that the application is not in

the best interest of THDA.

Upon motion by Chairman Bills, second by Ms. Cleaves, the Committee recommendations were approved.

Chairman Bills next called on Mr. Watt to present a request from Cannon County involving Cannon

County’s 2012 HOME grant. Mr. Watt reference his memo dated March 22, 2017 and noted that, due to

the extent of termite damage discovered when demolition for rehabilitation began on a unit at 508 West

High Street, Woodbury, Cannon County is requesting a waiver of the 2012 HOME Program Description

and a change to the 2012 HOME Working Agreement to allow for reconstruction of this unit. He reported

that the Committee recommended a waiver of the 2012 HOME Program Description and a change to the

2012 Cannon County Working Agreement to allow the requested reconstruction subject to the following

conditions:

The number of housing units on the lot may not be decreased or increased as part of the

reconstruction project. However, the number of rooms per unit may be increased or decreased

depending upon the needs and the size of the household.

The reconstructed housing will have a compliance period of 15 years, secured by a deed of

trust and a note with 6.67% of the amount of HOME funds used forgiven annually.

The unit must be constructed in accordance with THDA’s Design Standards for New

Construction.

Cannon County must apply $15,000 in USDA-Rural Development Housing Preservation funds

towards reconstruction of the unit and be responsible for all cost overruns over the permitted

amount of HOME assistance.

Upon motion by Chairman Bills, second by Ms. Butterworth, a waiver to the 2012 HOME Program

Description and a change to the Cannon County Working Agreement as described, was approved, subject

to the specified conditions and subject to a requirement that the Cannon County Commission approve the

reconstruction.

Chairman Bills called on Mr. Watt who provided an update on the 2011 Sumner County HOME

grant and reported that Bettie Teasley from Research and Planning presented the HOME Beneficiary Report

for fiscal year 2016, which is posted on the THDA website.

Chairman Bills then recognized Ms. Dorothy Cleaves to report on the Lending Committee meeting.

Ms. Cleaves recognized Lindsay Hall, Chief Administrative Officer of Single Family, who referenced her

memo dated March 6, 2017, titled “Proposed THDA Originating Agent Allowable Fee Change”, included

with the Board materials. Ms. Hall explained that the Committee recommended eliminating the .25%

discount point, but retaining the origination fee of up to 2%, along with all other normal and customary

fees, for all THDA loans. Upon motion by Ms. Cleaves, second by Chairman Bills, motion carried to

approve the described fee proposal.

Ms. Cleaves next recognized Ms. Hall who referenced her memo dated March 13, 2017, regarding

an application for THDA designation as a HUD Housing Counseling Agency. Ms. Hall explained that by

having certified HUD foreclosure prevention counselors on staff, THDA can better meet the critical

4

challenge of working with delinquent borrowers and can stay apprised of funding opportunities through

HUD. Upon motion by Ms. Cleaves, second by Chairman Bills, the application described in the referenced

memo was approved.

Chairman Cleaves called on Ms. Miller who referenced her memo dated

March 22, 2017, regarding THDA income limits. Ms. Miller explained that staff has some, but not all, of

the information needed to calculate revised income limits for 2017 THDA mortgage loans, however,

revisions may need to be made prior to the May meeting. She noted that staff would expect to follow the

approach used in the past to set income limits that represent the best combination of most increases and

fewest decreases. Upon motion by Ms. Cleaves, second by Chairman Bills, staff was authorized to set

income limits, consistent with Rev. Proc. 2017-27 and other necessary information from HUD and the IRS,

that offer the best combination of maximum income limit increases and minimum income limit reductions.

Ms. Cleaves next called Ms. Hall who provided an update on the Hardest Hit Fund (HHF)

Programs.

Chairman Bills next recognized Lynn Tully to report on the Tax Credit Committee meeting.

Ms. Tully indicated that the Committee recommended four 2017 Multifamily Tax-Exempt Bond Authority

(“MTBA”) wavier requests for Wedgewood Flats (TN17-203), Hermitage Flats (TN17-207), Haynes

Garden (TN17-208) and Forum Flats (TN17-210) for the reasons described in a memo from Donna Duarte,

Director of Multifamily Development dated March 15, 2017. Upon motion by Ms. Tully, second by

Chairman Bills, the described waivers were approved.

Ms. Tully also reported that the Committee heard an update on 2016 competitive and

noncompetitive credit equity pricing from Donna Duarte, Director of Multifamily Development.

Chairman Bills recognized Secretary Hargett who announced the appointment of Kim Brown to

serve on the Audit & Budget Committee going forward.

With no further business, the meeting was adjourned.

Respectfully submitted,

Ralph M. Perrey

Executive Director

Approved the ___ day of May 2017.

Tab # 4 Items:

Tax Credit Committee Meeting Materials


Tax Credit Committee

May 22, 2017

1:00 p.m. Central Time

AGENDA

1. Call to Order .................................................................................................................. Tully

2. Approval of Minutes from March 28, 2017 ................................................................... Tully

3. Amendment to Low-Income Housing Tax Credit 2017 Qualified Allocation Plan ...... Duarte

4. 2016 Competitive Low-Income Housing Credit Exchange Waiver Requests .............. Duarte

5. Proposed Changes for the Draft 2018 Low Income Housing Tax Credit Qualified

Allocation Plan ............................................................................................................. Duarte

6. Adjourn .......................................................................................................................... Tully

LOCATION COMMITTEE MEMBERS

William R. Snodgrass Tennessee Tower Lynn Tully, Chair

312 Rosa L. Parks Avenue, Third Floor Kim Grant Brown

Nashville, TN 37243 Ron Jones

David Lillard

The Nashville Room Larry Martin

Todd Skelton


TAX CREDIT COMMITTEE

March 28, 2017

Pursuant to the call of the Chairman, the Tax Credit Committee of the Tennessee Housing

Development Agency Board of Directors met, in regular session, on Tuesday, March 28, 2017 at 11:43 a.m.

Central Time at the William R Snodgrass Tennessee Tower, Third Floor, Nashville Room, Nashville,

Tennessee.

The following Committee members were present: Lynn Tully (Chair), Brian Bills, Kim Grant

Brown, Courtney Hess for Treasurer David Lillard, Greg Turner for Commissioner of Finance &

Administration Larry Martin and Todd Skelton. Ron Jones was absent from the meeting. Other members

present were: Keith Boring for Secretary Tre Hargett, Dorothy Cleaves and Regina Hubbard.

Seeing a quorum present, Chairman Tully called the meeting to order and called for consideration

of the minutes from January 24, 2017. Upon motion by Mr. Bills, second by Ms. Hess the minutes were

approved.

Chairman Tully noted the first item of discussion is a 2017 Multifamily Tax-Exempt Bond

Authority (“MTBA”) Wavier Requests. Ms. Tully recognized Donna Duarte, Director of Multifamily

Programs who then deferred to Ed Yandell, Senior Housing Credit Advisor, to present all four requests for

consideration at one time. Mr. Yandell proceeded to present the requests as follows along with staff

recommendations:

1. Wedgewood Flats (TN17-203) Request for waiver of per development cap. The request from

C. Hunter Nelson of Elmington Capital Group described a proposal for new construction

development with 170 units in Nashville, which in Mr. Nelson’s estimation, would need up to

$22 million in MTBA in order to be feasible.

Staff recommendation: Staff requested that the Tax Credit Committee and the Board of

Directors authorize staff to allocate up to, but not more than, $22 million in MTBA to the

proposed development. Any allocation in excess of the established per development limits

would be contingent upon submission of all required applications and supporting

documentation, satisfaction of all applicable requirements of the 2017 PD, the staff’s

concurrence that the development requires amounts of MTBA greater than the established per

development limit.

2. Hermitage Flats (TN17-207) Request for waiver of per development cap. The request from

Tony Woodham of Woodbine Community Organization described a proposal for new

construction development of 266 units in Nashville, which in Mr. Woodham’s estimation,

would need up to $25 million in MTBA and up to $1,631,961 per year of noncompetitive

LIHTC in order to be feasible.


Directors authorize staff to allocate up to, but not more than, $25 million in MTBA and up to,

but not more than, $1,631,961 per year of noncompetitive LIHTC to the proposed development.

Any allocation in excess of the established per development limits would be contingent upon

submission of all required applications and supporting documentation, satisfaction of all

applicable requirements of the 2017 PD and the 2017 QAP, and staff’s concurrence that he

development requires amounts of MTBA and noncompetitive LIHTC greater than the

established per development limits.

2

3. Haynes Garden (TN17-208) Request for waiver of per development cap. The request from

Phyllis Vaughn of Vaughn Development Group, Inc. described an existing 208 unit

development in Nashville that, in Ms. Vaughn’s estimation would need up to $28.5 million in

MTBA and up to $1,765,000 per year of noncompetitive LIHTC in order to be feasible.


Directors authorize staff to allocate up to, but not more than, $28.5 million in MTBA and up

to, but not more than, $1,765,000 per year of noncompetitive LIHTC to the proposed

development. Any allocation in excess of the established per development limits would be

contingent upon submission of all required applications and supporting documentation,

satisfaction of all applicable requirements of the 2017 PD and the 2017 QAP, and staff’s

concurrence that he development requires amounts of MTBA and noncompetitive LIHTC

greater than the established per development limits.

4. Forum Flats (TN17-210) Request for waiver of per development cap. The request from C.

Hunter Nelson of Elmington Capital Group described a proposal for new construction

development with 202 units in Memphis that, in Mr. Nelson’s estimation, would need up to

$1,122,842 per year of noncompetitive HIHTC in order to be feasible.


Directors authorize staff to allocate up to, but not more than, $1,122,842 per year of

noncompetitive LIHTC to the proposed development. Any allocation in excess of the

established per development limits would be contingent upon submission of all required

applications and supporting documentation, satisfaction of all applicable requirements of the

2017 PD and the 2017 QAP, and staff’s concurrence that he development requires amounts of

noncompetitive LIHTC greater than the established per development limits.

By offer of a motion by Mr. Bills, second by Mr. Skelton, motion carries to approve waivers as

outlined by staff.

Chairman Tully, continued to the last item, verbal update on the 2016 Competitive and

Noncompetitive Credit Equity Pricing and recognized Ms. Duarte to present that update.

With no further business to come before the Committee, the meeting was adjourned.


Ralph M. Perrey

Executive Director

Approved the ____ day of May 2017.


THDA.org - (615) 815-2200 - Toll Free: 800-228-THDA


Andrew Jackson Building Third Floor

502 Deaderick St., Nashville, TN 37243

MEMORANDUM

TO: THDA Board of Directors FROM: Donna Duarte Director of Multifamily Programs SUBJECT: Amendment to Low-Income Housing Tax Credit 2017 Qualified Allocation Plan DATE: May 10, 2017 Multiple proposed developments that have already received an allocation of 2015 or 2016 Tax Credits are currently in danger of failing due to a variety of circumstances, including uncertainty in the equity market and requirements of federal housing programs (other than the Low-Income Housing Tax Credit Program) in which the proposed developments are participating. Staff believes the best way to facilitate these proposed developments reaching completion and providing much needed affordable rental housing is to allow the proposed developments to exchange previously allocated 2015 or 2016 Tax Credits for 2017 Tax Credits. The Low-Income Housing Tax Credit 2017 Qualified Allocation Plan (the “2017 QAP”) does not contain language allowing a proposed development to exchange Tax Credits allocated in 2015 or 2016 for 2017 Tax Credits. Staff proposes the following amendment to Part XIV: Amendments/Modifications/Deadlines of the 2017 QAP as a framework for these requests. The specific language of the Amendment is attached. The proposed amendment would, if approved, give staff discretion to approve exchanges under the circumstances and conditions specified in the proposed amendment, much the same way staff already has discretion regarding other modifications to the development. Please contact me or Ed Yandell if you have questions.

http://www.thda.org/

D. Exchange

THDA may, in its sole discretion, approve requests to exchange Tax Credits from 2015 or 2016 to 2017.

1. Eligibility

a. The proposed development must have a valid allocation of competitive 2015 Tax Credits or competitive 2016 Tax Credits.

2. Process

a. A request to exchange must be submitted in writing to the Director of Multifamily Programs, describing in detail:

(i) Current status of development construction including overall percentage of completion; and

(ii) The nature and timing of circumstances and events preventing the completion of the proposed development by the original Placed-In-Service deadline; and

(iii) Current status of financing commitment/negotiations; and

(iv) Current status of syndication commitment/negotiations; and

(v) Current status of local approvals (e.g. zoning, PILOT, utility availability, site plan); and

(vi) Current composition of development team including, as applicable, accountant attorney, consultant, contractor, developer, engineer, etc.; and

(vii) Current composition of ownership entity (Attachment 16); and

(viii) Current composition of developer entity (Attachment 17); and

(ix) Proposed development timeline if exchange is approved.

b. THDA will notify the applicant in writing of the determination in regard to the request to exchange.

3. Special Conditions

a. Exchange under this Part XIV-D may be made only with the express written approval of THDA, which approval may be granted or denied, in THDA’s sole discretion.

b. No person or entity shall be entitled to rely on any approval for exchange previously granted for the purpose of obtaining subsequent approval for exchange.

c. Proposed developments approved for exchange shall be subject to this 2017 QAP.

d. Other proposed developments involving any individual listed on Attachment 16 or Attachment 17 of a proposed development approved for exchange may be ineligible for Sponsor Characteristics points as described in Part VII-B-3 of this 2017 QAP with regard to competitive applications for Tax Credits under the 2017 QAP, the 2018 QAP (if applicable), and the 2019 QAP (if applicable).

e. Tax Credits returned for exchange will not increase the amount of 2017 Tax Credits available under Part III of this 2017 QAP.

f. Tax Credits allocated pursuant to this Part XIV-D will count against the Set-Asides as described in Part III-B of this 2017 QAP and the General Pool as described in Part VIII-E-8 of this 2017 QAP.

g. Tax Credits allocated pursuant to this Part XIV-D will count against the county caps specified in Part IV-A of this 2017 QAP.

h. Tax Credits allocated pursuant to this Part XIV-D will count against the developer or related party cap specified in Part IV-C of this 2017 QAP.

i. Tax Credits allocated pursuant to this Part XIV-D will count against the aggregate QCT cap specified in Part IV-D-1 of this 2017 QAP.

j. For purposes of this Part XIV-D, items 3-e through 3-i above do not apply to RAD developments as described in Part VII-A-3 of this 2017 QAP or CNI developments as described in Part VIII-E-2 of this 2017 QAP.

k. Proposed developments approved for exchange will not be permitted to substantially modify the development as determined by THDA in its sole discretion.

l. Proposed developments approved for exchange will not be permitted to receive an allocation of 2017 Tax Credits greater than the amount of 2015 Tax Credits or 2016 Tax Credits (as applicable) returned by the proposed development.






MEMORANDUM

TO: THDA Board of Directors FROM: Donna Duarte Director of Multifamily Programs SUBJECT: Requests to Exchange 2016 LIHTC for 2017 LIHTC

TN16-010 Dunbar Apartments TN16-021 South City I Apartments TN16-055 CP II Apartments

DATE: May 10, 2017 The three proposed developments listed above have requested approval to return their respective allocations of competitive 2016 Low-Income Housing Tax Credit (“LIHTC”) and receive in return an allocation of competitive 2017 LIHTC in an amount equal to the returned 2016 LIHTC. Approval of the requests will not adversely affect the amount of competitive 2017 LIHTC available to the pool of applications submitted by May 1, 2017. All three proposed developments utilize either the Rental Assistance Demonstration (“RAD”) program or the Choice Neighborhoods Initiative (“CNI”) program. Beginning in 2015, the LIHTC Qualified Allocation Plan has included a strong commitment to proposed developments utilizing RAD or CNI. Staff recommends approval of each request subject to the amendment to Part XIV of the 2017 QAP. The details of the circumstances leading to each request are addressed in the request documents following this memo. Additional information about each development: TN16-010 Dunbar Apartments – RAD Johnson City, Washington County 100 units, 100% LIHTC units $1,099,853 annual LIHTC TN16-021 South City phase I – CNI Memphis, Shelby County 114 units, 60% LIHTC units $1,100,000 annual LIHTC



TN16-055 CP II Apartments – RAD Nashville, Davidson County 100 units, 80% LIHTC units $1,100,000 annual LIHTC Given that the proposed amendment to Part XIV of the 2017 QAP was not in place at the time these requests were made, staff felt it prudent to bring these requests to the Tax Credit Committee and Board. If the proposed amendment to Part XIV of the 2017 QAP is approved, staff’s intent is to handle approval or denial of subsequent requests at the staff level. Please contact me or Ed Yandell if you have questions.


901 PARDEE ST. P.O. Box 59

JOHNSON CITY. TN. 37605-0059

Office 423.232.4784 Fax 423.232.4789 TDD: 1-800-545-1833, EXT. 762

jchousing.org

May 4, 2017

TN16-10 Dunbar project request to exchange 2016 tax credits

1. Current status of development construction including overall percentage of completion;

JCHA’s RAD project was awarded a RCC by HUD on March 21, 2017 with a scheduled close date by November 2017. JCHA has begun tenant relocation in preparation for demolition of the existing 30 units with about 50% of the 27 existing occupied units relocated to other public housing units. Construction cannot begin before HUD closes the transaction. The construction plans are complete and are ready to be presented to the City of Johnson City Planning Department for approval. Current construction percent complete =0%.

2. Circumstances preventing the completion of the development by December 31, 2018; The project has been delayed pending HUD RAD program approval. Tenant relocation was not allowed until the RCC was issued March 21, 2017. The tenants are allowed 90 days to plan their relocation following the RCC issuance. The site demolition is not allowed until HUD closes the transaction and approves the Declaration of Trust release on the existing public housing property. The site demolition is expected to begin by January 2018 and could take up to six months to complete which does not allow sufficient time (12 months) to complete the construction by December 31, 2018.

3. Current status of financing commitment/negotiation; Regions Bank issued a Letter of Intent on July 25, 2016 for $1.03 funding per tax credit. The funding has been reduced to $0.99 recently and the terms of the deal has tightened significantly due to market conditions.

4. Current status of syndication commitment/negotiation; The financing commitment and negotiation for the project has been impacted by the recent changes in the tax credit funding market due to pending federal tax reform. The investor, Regions Bank experienced a change in leadership in the tax credit department which has brought on delays in negotiation of the terms of the deal. There is a general lack of knowledge in working with public housing authorities within Regions Bank tax credit department’s leadership team. We have been asked to accept contract terms by the investor that are unusual and are essentially impossible and/or impractical to meet. The demands for ownership change, tax credit compliance guaranty, and change in operating management entity has stalled negotiations and placed the development at risk without any hope of meeting the 10% expenditure requirements.




jchousing.org

5. Current status of local approvals (e.g. zoning, PILOT, utility availability, site plan);

The City of Johnson City has approved the zoning and a PILOT agreement for the development. The utilities are available to support the development. The local electricity provider Johnson City Power Board has reviewed the site plans and is preparing plans to demo the existing services and to provide services for the new construction. The City plans to coordinate efforts to replace storm water sewer lines in the development area while the construction is taking place. It is unknown if the coordinated construction projects will impact the overall development construction timeline. The site plan is complete and is ready to be presented for approval by the City Planning Department.

6. Current composition of development team including, as applicable, accountant attorney, consultant, contractor, developer, engineer, etc.; and The development entity is JCHA Dunbar, LLC, which is composed of a partnership between Johnson City Housing Authority and DPKY Development Company, LLC. DPKY ‘s principal team members are David Psimer, Kevin Young, and Jesse Bowman and the JCHA team includes Richard McClain (ED), Mark Markland, Robin Walker, and Sherry Trent. Contractor: DP Builders, LLC; David Psimer who is a member of DPKY Development Company, LLC. The architecture firm is a partnership between Bernard Weinstein (Nashville) and Uwe Rothe (Johnson City) named The Weinstein-Rothe Joint Venture. Civil Engineers are W. Scott Williams and Associates, Knoxville, TN Landscape Architect: Herbert Ball Land Design, Franklin, TN Structural Engineer: Engineered Solutions, Goodlettsville, TN Mechanical Engineers: F.W. Keeney & Associates, Atlanta GA Fire Protection Engineer: T.K. Engineering PLLC, Goodlettsville, TN Electrical Engineer: Parsons Engineering, INC. Legal Services are provided by the following: Julie McGovern and Dwayne Barrett, Reno Cavanaugh; Washington D.C. and Nashville, TN Andy Wampler, Wilson Worley Gamble Stout PC; Kingsport, TN Rick Bearfield; Penn Stuart; Johnson City, TN CPA: Phillip C. Jarrell PLC; Hazlehurst, GA




jchousing.org

7. Proposed development timeline if exchange approved. Financial and HUD close by November 15, 2017 Begin site demolition by January 2, 2018 Complete site demolition May 31, 2018 Begin Construction by June 1, 2018 Complete construction by August 31, 2019 Lease up by November 30, 2019

1

Ed Yandell

From: Phyllis Vaughn <[email protected]>Sent: Friday, May 05, 2017 1:53 PMTo: Ed Yandell; Donna DuarteCc: Jim Thiltgen; Phillip VaughnSubject: RE: TN16-055, CPII Apartments request

Categories: BOD STUFF

Ed and Donna, CP II Apartments, Nashville, is a 2016 deal that has been caught in the middle of the credit pricing drop that happened in November, 2016. We had shopped credit syndicators for the best pricing for a couple of months, and were ready to sign for a $1.12 price per dollar of credits. When we indicated to the syndicator we were ready to sign, they rescinded the offer, as their credit investor backed out. We continue to stay in contact with several syndicators, to gauge pricing, and we do have interested buyers available at a much lower price than pre‐November. CP II Apartments is planned for a prime downtown Nashville real estate location owned by MDHA, and will be a part of the public housing authority’s RAD conversion process. The property is much too valuable to simply reduce our total units, which would add more credits to help alleviate the reduction in credit equity. The construction will consist of 100 units + a parking garage; not typical of a regular TN tax credit development, but necessary in a downtown Nashville parcel. In addition to being more expensive, that type of construction is also more time intensive. MDHA will be putting several million dollars into this development. We have begun a $891,000 utility relocation contract which is presently underway. Zoning is in place, and we are negotiating a property tax PILOT. Our time has run out to close the financing and complete the construction of the development by December 31, 2018, for the 100 units + parking structure. We had hoped the volatile credit market at the end of 2016 would calm, and pricing would increase. It has calmed somewhat, but credit pricing remains low. Given the market not increasing as much as we would like, we will put more money into the development to make up the difference in the loss of credit equity. Pinnacle Bank will be financing the development through the TN Community Investment Tax Credit program administered through THDA and the Department of Revenue. We are requesting the agency to allow MDHA to return the existing 2016 Carryover Allocation Agreement of credits, and to issue a new 2017 Carryover Allocation of credits to CP II Apartments. We have an experienced tax credit development team in place to complete this project, given additional time. Vaughn Development ‐ consultants, Reno & Cavanaugh – attorneys, Rubin Brown – accountants, Kline Sweeny – architects, Levy Place MDHA, LLC – Developer. Allowing the return does not harm the agency in any way, and does not cost the agency anything. We only have a small window of opportunity for the RAD conversion of public housing to Housing Assistance Payment Contracts, and would appreciate the agency helping us work though this situation that was completely out of our control. Once we receive a new allocation of credits, syndicators will begin negotiations once again and we can complete that process within two months, close within two additional months, and should be able to start construction by September, 2017. Eighteen months of construction time should finish the project by March, 2019, and be ready for occupancy by tenants no later than April, 2019. If you need more information, please let me know and we will provide. Thank you so much for your consideration of our request. Thanks,






MEMORANDUM TO: THDA Board of Directors FROM: Donna Duarte Director of Multifamily Development SUBJECT: Proposed Changes for the Draft 2018 Qualified Allocation Plan DATE: May 10, 2017 In April, THDA staff released Preliminary Proposed Changes for the Draft Low-Income Housing Tax Credit 2018 Qualified Allocation Plan (the “2018 Preliminary Proposed Changes”) for comment. The 2018 Preliminary Proposed Changes were posted to THDA’s website on April 5, 2017 and staff requested written feedback and comments by May 1, 2017. Additionally, staff held a Developer Forum/Public Hearing on April 24, 2017 seeking feedback and comments. Responses to the 2018 Proposed Preliminary Changes were mostly positive. Staff considered those comments and incorporated changes staff felt were appropriate. Attached are the Proposed Changes to the draft 2018 Qualified Allocation Plan developed from the 2018 Preliminary Proposed Changes and taking into account feedback and comments as staff deemed appropriate. Staff will discuss the changes and address questions at the Tax Credit Committee meeting on Monday, May 22.

Once the Committee provides direction as to the changes to be made in preparing the 2018 Qualified Allocation Plan, staff will prepare the necessary revisions and create a draft 2018 Qualified Allocation Plan. The draft 2018 Qualified Allocation Plan will be posted on the THDA web site and will be presented for consideration by the Committee and the THDA Board of Directors in July.

Please contact me if you have concerns with the Proposed Changes or developer feedback.


TENNESSEE HOUSING DEVELOPMENT AGENCY LOW-INCOME HOUSING TAX CREDIT 2018 QUALIFIED ALLOCATION PLAN

PROPOSED CHANGES

May 10, 2017

1

1) Remove Tennessee and overall developer experience points.

Background: Developer experience points were added to THDA’s QAPs in order to encourage the participation of experienced developers in the Low-Income Housing Tax Credit (“LIHTC”) program. Comments and feedback from the development community expressed concerns on removing developer experience points. They contend removing developer experience points would allow new and inexperienced developers to participate in Tennessee’s LIHTC program. Developer experience points adversely impacted public housing authorities (“PHAs”) who had been provided a RAD Set-Aside but were unable to qualify for developer experience points. This required PHAs to contract with experienced Tennessee developers in order to qualify for the developer experience points. PHA commenters asked for relief from the developer experience points based on their public housing experience and since they have been paying developers to secure these points.

Staff recommends removing Tennessee and overall developer experience points. The criteria included in developer experience points is included in several other areas of the QAP. Staff believes specific developer experience is contained in the Sponsor Characteristics scoring criterion. Additionally, language currently in the QAP limits a new developer to receiving one allocation and placing that development in service, prior to being eligible for a subsequent award and addresses the development community’s concerns.


PROPOSED CHANGES

May 10, 2017

2

2) Modify the language in Sponsor Characteristics from failing to fulfill obligations to fulfilling obligations and add a five year look back. Background: Sponsor Characteristics points are awarded to developers unless

they fail to meet obligations. This process had the effect of allowing new and inexperienced developers to achieve maximum Sponsor Characteristics scores because the new and inexperienced developers did not fail to meet any obligations. Comments and feedback from the development community portrayed an inherent unfairness in rewarding a developer with no Tennessee experience the same points as a developer with successful Tennessee experience. Additionally, developer comments and feedback requested staff review other states’ developer experience characteristics. Staff contacted contiguous states and found new and inexperienced developers were adversely impacted within their QAPs.

Staff recommends modifying the language in Sponsor

Characteristics to reflect the developers experience in fulfilling development obligations, including noncompetitive LIHTC applications, and extending the look back period to five years. We also recommend exempting PHAs from Sponsor Characteristics. This change will adversely impact new or inexperienced developers in Tennessee. However, new or inexperienced developers are not prohibited from participating in the Multifamily Tax-Exempt Bond Authority program and receiving LIHTC experience by participating in the noncompetitive award process. Additionally, staff will continue to review developer experience characteristics for a fuller discussion in the 2019 QAP. Finally, Tennessee PHAs will be exempt from the Sponsor Characteristics points.


PROPOSED CHANGES

May 10, 2017

3

3) Updated County Needs Scores and Opportunity Score by Census Tract.

Background: IRC Section 42 m (1) (C) requires states to include project location criteria in their QAP. To satisfy that requirement, THDA has utilized county needs scores in the QAP. Staff considered adjusting the point structure for the county needs score, in conjunction with a new opportunity score. Commenters expressed overwhelming disappointment with county needs scores noting there was no striation for reservations within the state. Developers suggested we reconsider the methodology and application of county needs scores based on development type (new construction, rehabilitation).

Additionally, in order to prevent over concentrations of LIHTC within a county, THDA proposed adding an opportunity score which would be used in conjunction with the county needs score. Comments and feedback from the development community were mixed. Many commenters agreed with the concept of the opportunity score but expressed cost concerns about developments which would be located in high opportunity areas. Other commenters suggested the opportunity scores would not address the real needs of project location without addressing market study elements. Most commenters agreed THDA should limit reservations within census tracts to avoid over concentration.

Staff only recommends the county needs scores with an annual update and no change in points for the 2018 QAP. Further discussions surrounding the county needs scores and opportunity scores by census tract require more research based on the comments and feedback received. Staff will analyze the county needs scores and the opportunity scores and provide a recommendation for the 2019 QAP.


PROPOSED CHANGES

May 10, 2017

4

4) Change the name of the RAD Set-Aside to PHA Set-Aside, lower the set-aside amount from 30% to 15% and maintain preferences for CNI and RAD developments within the PHA Set-Aside.

Background: THDA has maintained a preference for PHAs receiving HUD Choice Neighborhoods Initiative Implementation Grants (“CNI”) and HUD Rental Assistance Demonstration Commitment to enter into a Housing Assistance Payment Contract (“RAD”) over the past three years. This preference has supported the construction and renovation of 894 units of low-income housing for residents of public housing and applicants on public housing waiting lists. Commenters opposed to the set-aside reduction included PHAs who expressed concerns that reducing the set-aside amount would present problems as they continued with their RAD developments. Additional comments concerned the ability of small PHAs to compete with larger PHAs in the set-aside.

Staff recommends changing the RAD Set-Aside to PHA Set-Aside, setting the amount at 15%, and retaining the CNI and RAD preference. Staff also recommends exempting the PHAs from the Sponsor Characteristics scoring criterion and adding a section in scoring which would provide the maximum Sponsor Characteristics points to PHAs based on Attachment 26 and an additional point for PHAs that have received a CNI Grant or a HUD RAD Commitment to enter into a Housing Assistance Payment Contract. Since HUD is very involved in both the CNI and RAD developments, staff is confident in the success of PHAs. This change will allow PHAs to fully participate in Tennessee’s LIHTC program without having to purchase developer experience or Sponsor Characteristics points from developers.


PROPOSED CHANGES

May 10, 2017

5

5) Add an option to remove Opt Out provisions for developments in the competitive LIHTC cycle.

Background: THDA allows up to five points for developments that delay the time from three to five years in which owners can Opt Out of the LIHTC program. Recently, THDA has received Opt Out requests from owners of properties in areas where affordable housing is in short supply. There were developer comments which suggested THDA eliminate the ability for all properties to Opt Out.

Staff recommends adding a higher point option which removes the Opt Out provision for competitive developments. THDA recognizes the scarcity of affordable housing in some markets and in conjunction with a commitment to preserve affordable housing, this provides a mechanism to achieve that goal. This also allows developers multiple choices to consider based on their need to exit the program.


PROPOSED CHANGES

May 10, 2017

6

6) Add cost control measures; per unit caps and a ratio of hard costs to total development costs, to address concerns at the national level regarding public perception of high costs for affordable housing.

Background: The only form of cost containment in the current QAP is the tie-breaker. Staff developed two ideas for consideration: per unit caps and a ratio of hard costs to total development costs. Comments and feedback received from the development community opposed both ideas. Most commenters suggested THDA was a historically low cost development state. They also noted the rising costs of developing affordable housing in hot markets. They suggested the caps and ratios would have the unintended effect of reducing quality throughout the state. If cost caps were implemented feedback suggested the use of FHA multifamily lending limits.

Staff recommends accepting the following per unit caps as a cost control measure in the 2018 QAP:

Urban / New Construction = $180,000 per unit

Urban / All Other Development = $120,000 per unit

Rural / New Construction = $160,000 per unit

Rural / All Other Development = $95,000 per unit

These recommendations are based on total development costs provided in cost certifications from developments that were placed in service in 2014, 2015 and 2016. The caps are set at approximately 120% of the average total development cost per unit for each category.

Staff does not recommend accepting the ratio of hard costs to total development costs at this time.


PROPOSED CHANGES

May 10, 2017

7

7) Revise Innovation Round Set-Aside to include Scholar House applications and language which permits THDA to select up to two Innovation Round applications to receive a reservation notice from the Innovation Set-Aside, and add annual themes to preference developments.

Background: Scholar House applications are negatively impacted in the current QAP because they are not eligible to receive a full award of LIHTC. In order to allow the Scholar House applications a full award of LIHTC, it was logical to include these developments in the Innovation Round. Most developer comments were supportive of the Innovation Round but they preferred to limit Innovation Round reservations. The theme concept was also supported.

Staff recommends absorbing Scholar House applications in a themed Innovation Round and reserving the option to select up to two Innovation Round applications for a reservation notice. The themed rounds will begin in 2018 with the Scholar House.


PROPOSED CHANGES

May 10, 2017

8

8) Changes Affecting Rural Developments in Part VIII: Initial Application, Eligibility and Scoring Review.

Background: In order to assist developments in rural counties and allow a greater mix of geographic locations to be successful in the competitive LIHTC cycle, staff suggested changes to the application of limits and ranking for applications. Two developer comments were received, one supporting the changes and one opposed to the changes because there was a set-aside for rural developments.

Staff recommends the following changes to the ranking for rural developments: remove rural cross-counting provisions and allow rural new construction developments to participate in the General Pool. Staff believes these changes will allow for a greater mix of development types and geographic locations to be successful.


PROPOSED CHANGES

May 10, 2017

9

9) Change compliance requirements in Part XIII Compliance Monitoring.

Background: Timeframes for noncompliance cure periods were expanded to allow owners more flexibility to address noncompliance issues and bring the correction periods in line with the timeframes in the federal regulations. Only one comment was received on this change and it was in support of the change.

Staff recommends amending the language in Part XIII Compliance Monitoring to change the initial correction period to 90 days, change the extended correction period to 180 days and remove requirements for owners to post the THDA Customer Response Center poster. This will allow owners more flexibility in addressing noncompliance issues.


PROPOSED CHANGES

May 10, 2017

10

10) Modify all parts of the proposed 2018 QAP as necessary to accommodate electronic submission of applications in the new Tennessee Housing Online Management Application System (“THOMAS”).

Background: THDA is implementing the THOMAS system which will replace the current on-line application system and database. Developer comments and feedback were supportive of enhancements.

Staff recommends authorization to modify all parts of the QAP which are affected by the development and implementation of THOMAS.


PROPOSED CHANGES

May 10, 2017

11

11) Comments and feedback on other items:

a. Reconstruct or replace the tie-breaker. The developer community overwhelmingly expressed displeasure with the tie-breaker. Commenters provided various alternatives for the tie-breaker which they identified as rewarding developments building the cheapest product possible at the expense of quality. None of the alternatives recommended a tie-breaker which addressed cost containment. In light of the FRONTLINE presentation on the LIHTC program and LIHTC allocating agency’s needs to control costs, staff recommends maintaining the current tie-breaker and revisiting this topic in the 2019 QAP.

b. Different scoring mechanisms for new construction and acquisition rehabilitation. A few developers commented on the difference between the types of developments and suggested changes. Staff recommends a further review of the scoring system in the 2019 QAP with a proposal to differentiate scoring and competition based on the development type.

c. Add amenity points back to the scoring process. A few developers provided comments indicating a preference for development’s proximity amenities points. The Enterprise Green Certification to which all 2016 competitive allocations are subject, includes amenity proximity so staff does not recommend revisiting this issue.

d. Increase/reduce the number of set-asides and the amount of set-asides. A few developers commented on reducing or removing set-asides while a few others commented on adding or increasing the amount of set-asides. There appeared to be no consistency within these comments. Staff does not recommend revisiting these issues at this time.

e. Increase/reduce caps; county, developer, and related parties. A few developers provided comments in support of increased and reduced county, developer and related party caps. Staff does not recommend revisiting these issues at this time.


PROPOSED CHANGES

May 10, 2017

12

12) Housekeeping items. Background: THDA has always been given the authority during the QAP

development and finalization process to perform housekeeping which would include ensuring references in the QAP are in agreement, QAP discrepancies are addressed and draft language is corrected.

Staff recommends this process be continued.

Tab # 5 Items:

Bond Finance Committee Meeting Materials

Tennessee Housing Development Agency Bond Finance Committee

May 17, 2017, at 4:30 P.M.*

or

May 18, 2017, at 1:30 P.M.

AGENDA

1. Call to Order ............................................................................................... Wilson

2. Approval of Minutes from March 27, 2017 ............................................... Wilson

3. Consideration of Sale of Issue 2017-2 .......................................................... Miller

4. Issue 2017-1 State Form CT-0253 ................................................................ Miller

5. Fiscal Year 2017-2018 Schedule of Financing ............................................. Miller

6. Bond Counsel Selection ................................................................................ Miller

7. Public Records Policy ................................................................................... Miller

8. THDA Debt Management Policy ................................................................. Miller

9. Adjourn ....................................................................................................... Wilson


State Capitol Brian Bills, Chair Conference Room G-11 Tre Hargett Nashville, Tennessee 37243 David Lillard Larry Martin Justin Wilson

***************************************** It will be approximately 2:00 PM CDT on May 17

before the actual meeting date will be known.

TENNESSEE HOUSING DEVELOPMENT AGENCY BOND FINANCE COMMITTEE

March 27, 2017

Pursuant to the call of the Chairman, the Bond Finance Committee of the Tennessee Housing Development Agency Board of Directors met on Monday, March 27, 2017, at 2:00 P.M. in Conference Room G-11, State Capitol, Nashville, Tennessee. The following members were present: Brian Bills (Chairman), Secretary of State Tre Hargett, Treasurer David Lillard, Greg Turner (for Commissioner of Finance & Administration Larry Martin), and Comptroller Justin Wilson (Secretary).

Recognizing a quorum present, Chairman Bills called the meeting to order and asked for approval of the minutes of the February 22, 2017, meeting. Upon motion by Mr. Wilson, second by Mr. Lilliard, the minutes were approved.

Chairman Bills indicated the next item for consideration was authorization of Issue 2017-2. He recognized Lynn Miller, THDA Chief Legal Counsel, who referenced the following documents in the Board materials:

● a memorandum from Lynn Miller, dated March 15, 2017, that described (1) the documents to be considered, (2) how the authorization for Issue 2017-2 complied with THDA’s Debt Management Policy, (3) the rotation for the bookrunning senior manager, (4) the selling group member that would fill the rotating co-manager position, and (5) the selling group members;

● a memorandum from CSG Advisors (“CSG”), THDA’s financial advisor, dated March 13, 2017, that recommended authorization of this transaction, through a negotiated sale, in an aggregate principal amount not to exceed $200 million under the 2013 General Resolution;

● the Plan of Financing for Issue 2017-2 in an aggregate principal amount not to exceed $200 million (“Plan of Financing”);

● the Resolution of the Board of Directors authorizing the issuance and sale of Issue 2017-2 under the 2013 General Resolution, and delegating authority to the Bond Finance Committee to determine all final terms and conditions of the Issue 2017-2 bonds (the “Authorizing Resolution”);

● the form of Series Resolution for Issue 2017-2; and,

● the Resolution of the Board of Directors authorizing reimbursement of THDA from proceeds of Issue 2017-2 in an amount not to exceed $60 million (the “Reimbursement Resolution”).

Ms. Miller indicated that Issue 2017-1 would close on March 30, 2017, however, loans in the amount of approximately $60 million had already been purchased, leaving approximately $40 million in available proceeds. She noted production for January through March exceeded the projections made in December. Mr. Wilson commented on the $200 million authorization being requested in terms of the possibility of negative arbitrage and noted there is no commitment to issue the full $200 million. Upon motion by Mr. Wilson, second by Chairman Bills, the Committee approved the Issue 2017-2 Plan of Financing. Upon motion by Mr. Wilson, seconded by Mr. Lillard, the Committee recommended the Issue 2017-2 transaction and the Issue 2017-2 Board Authorizing Resolution and Reimbursement Resolution to the Board for approval.

Chairman Bills then recognized Ms. Miller to present the Bond Counsel Request for Qualifications (the “RFQ”). Ms. Miller referred to the RFQ that was circulated to the Committee by email on March 24, 2017. She indicated the current Bond Counsel contract expires on June 30, 2017. She also noted that there is no dissatisfaction with the current bond counsel, Kutak Rock. Ms. Miller along with Sandi Thompson

2

and Steve Osborne, with the Office of State and Local Finance, prepared the RFQ based on the one previously used and Mr. Osborne developed the proposed distribution list. She referenced the proposed timetable and explained that responses will be reviewed by staff of the Bond Finance Committee and THDA, with a recommendation to be made at the May meeting. Treasurer Lillard asked if Tennessee-based firms were included in the distribution list. Ms. Miller answered in the affirmative. Upon motion by Chairman Bills, seconded by Mr. Lillard, the Committee authorized staff to pursue the RFQ process for bond counsel.

There being no further business, Chairman Bills adjourned the meeting.

Respectfully submitted, ______________________________________ Assistant Secretary

Approved the ____ day of May, 2017.

Not Available At This Time

Bond Finance Committee Agenda Item No.

3. Consideration of Sale of Issue 2017-2

Documentation for this item will be provided at the Committee meeting.

Tennessee Housing Development AgencyAndrew Jackson Building, Third Floor

502 Deaderick Street, Nashville, TN 37243

Bill HaslamGovernor

Ralph M. PerreyExecutive Director

MEMORANDUMDATE: May 10,2017

TO: Bond Finance CommitteeBoard of Directors

FROM: Lynn E. Miller, Chief Legal Counsel

SUBJECT: Issue 2017-l State Form CT-0253 (the "State Form")

Attached please find the State Form for Issue 2017-l that priced on February 22,2017, and closed March 30,

2017. The State Form was filed with the Offrce of the Comptroller within the required time period on April 21,

2017.

The form, with attachments, provides basic information including maturity dates, amounts and interest rates forthe bonds. It also shows the costs associated with the transaction in Item I I of the form. These costs are consistentwith costs of prior transactions and, in general, are on the lower end of costs for the industry.

This chart compares fee and expense information for the most recent bond issue and the three prior bond issues.

FeesÆxpensesr Paid To$100,000,000

Issue 2017-l$62,000,000

Issue 2016-3$125,000,000Issue 2016-2

$125,000,000Issue 2016-l

Financial Advisor $ 60,000 $ 47,500 $ 60,000 $ 70,000

Bond Counsel 35,000 35,000 35,000 35,000

Trustee 5,000 3,1 00 6,250 6,250Bookrunning Underwriter 608,338 371,379 759,426 7s9.203Moody's 70,000 45,000 76,000 76,000

Standard & Poor's s7,600 33,000 60,000 60,000i-Deal 1,500 1,500 1,500 1,500

General Services Print Shop 1,408 1,387 I,348 t,339Total Fees/Expenses

Per Bond Issue $838,846 $537,866 $999,524 sL,009,292

1. rounded to the nearest S

If you have questions, please call me at 615-815-2025 or by email at [email protected]

LEM/ds

Attachment

TIIDA.ore - (615) 815-2200 - Toll Free: 800-228-THDA

$

$

%

TIC NIC

Variable: Index plus

Variable: Remarketing Agent

Other:

CON

GAN

Bond Loan Agreement Capital Lease

Standard & Poor's

%

%

%

%

%

Loan Program

General Government

(Pursuant to Tennessee Code Annotated Section 9‐21‐151)

REPORT ON DEBT OBLIGATION

Unrated

FitchMoody's

Dated Date: Issue/Closing Date:

8. Type of Sale:

Competitive Public Sale

Negotiated Sale

Informal Bid

Interfund Loan

9. Date:

TaxableTax‐exempt

4. Debt Obligation:

TRAN

3. Interest Cost:

basis points; or

If any of the notes listed above are issued pursuant to Title 9, Chapter 21, enclose a copy of the executed note

with the filing with the Office of State and Local Finance (“OSLF”).

BAN

RAN

CRAN

Page 1 of 3

If disclosing initially for a program, attach the form specified for updates, indicating the frequency required.

1. Public Entity:

2. Face Amount:

Debt Issue Name:

Name:

Address

State Form No. CT‐0253

Revised Effective 1/1/14

Premium/Discount:

General Obligation + Revenue/Tax

Other (Describe):

5. Ratings:

BRIEF DESCRIPTION

7. Security:

General Obligation

Revenue

Annual Appropriation (Capital Lease Only)

6. Purpose:

Refunding/Renewal

Other

Utilities

Education

Tax Increment Financing (TIF)

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

$ % $ %

AMOUNT

$

$

Bond Counsel $

Issuer’s Counsel $

Trustee’s Counsel $

Bank Counsel $

Disclosure Counsel $

________________________ $

$

$

$

$

$

$

$

$

Take Down $

Management Fee $

Risk Premium $

Underwriter’s Counsel $

Other expenses $

$

$

$

Sponsorship/Referral Fee $

$

$

Legal Fees

Financial Advisor Fees

Paying Agent Fees

Underwriter’s Discount ________%

Trustee Fees

Remarketing Agent Fees

Liquidity Fees

Rating Agency Fees

Credit Enhancement Fees

Bank Closing Costs

(Round to nearest $)

Amount

Registrar Fees

11. Cost of Issuance and Professionals:

No costs or professionals

* This section is not applicable to the Initial Report for a Borrowing Program.

Printing and Advertising Fees

Issuer/Administrator Program Fees

Real Estate Fees

Year Year

If more space is needed, attach an additional sheet.

Amount

Interest

Rate

Interest

Rate

If (1) the debt has a final maturity of 31 or more years from the date of issuance, (2) principal repayment is delayed for two or more years, or (3) debt service

payments are not level throughout the retirement period, then a cumulative repayment schedule (grouped in 5 year increments out to 30 years) including this and all

other entity debt secured by the same source MUST BE PREPARED AND ATTACHED. For purposes of this form, debt secured by an ad valorem tax pledge and debt

secured by a dual ad valorem tax and revenue pledge are secured by the same source. Also, debt secured by the same revenue stream, no matter what lien level, is

considered secured by the same source.

TOTAL COSTS

State Form No. CT‐0253


10. Maturity Dates, Amounts and Interest Rates *:

Page 2 of 3

FIRM NAME

Other Costs ____________________

REPORT ON DEBT OBLIGATION(Pursuant to Tennessee Code Annotated Section 9‐21‐151)

of 3

REPORT ON DEBT OBLIGATION (Pursuant to Tennessee Code Annotated Section 9-21-151)

12. Recurring Costs:

IZ!No Recurring Costs

Remarketing Agent

Paying Agent I Registrar

Trustee

Liquidity I Credit Enhancement

Escrow Agent

Sponsorship I Program I Admin

Other----------

13. Disclosure Document I Official Statement:

FIRM NAME (If different from #11)

State Form No. CT-0253


ONone Prepared

DEMMA link

12Jcopy attached

See Attachment 3: Issue 2017-1 Supplemental Resolution _a_n_d_A_t_ta_c_h_m_e_n_t_4_:_1s_s_u_e_2_0_1_7_-1 __ 0_ff_ic_ia_I_S_t_at_e_m_e_n_t ______________ or

14. Continuing Disclosure Obligations: Is there an existing continuing disclosure obligation related to the security for this debt? 12Jves

Is there a continuing disclosure obligation agreement related to this debt? 12Jves

If yes to either question, date that disclosure is due 210 days after end of each Fiscal Year Name and title of person responsible for compliance Trent Ridley, Chief Financial Officer/Lynn Miller, Chief Legal Counsel

15. Written Debt Management Policy:

Governing Body's approval date of the current version ofthe written debt management policy 11/28/2011 1 as amended

Is the debt obligation in compliance with and clearly authorized under the policy? IZ!Yes 0No

16. Written Derivative Management Policy:

IZ!No derivative

Governing Body's approval date of the current version of the written derivative management policy

Date of Letter of Compliance for derivative

Is the derivative in compliance with and clearly authorized under the policy?

17. Submission of Report:

To the Governing Body: on 05/12/2017 and presented at public meeting held on

Copy to Director to OSLF: on 04/21/2017 either by:

OMailto: OR ll)Email to:

05/23/2017

505 Deaderick Street, Suite 1600 James K. Polk State Office Building Nashville, TN 37243-1402

[email protected]

Name

Title

Firm

Email

Date

PREPARER

Lynn E. Miller Chief Legal Counsel Tennessee Housing Development Agency [email protected]

03/30/2017

THDA Issue 2017-1 ATTACHMENT 1

State Form CT-0253

2. PREMIUM/DISCOUNT:

Includes the $3,376,699.00 original issue premium on the Issue 2017-1 PAC Bonds

maturing July 1, 2042.

THDA Issue 2017-1 ATTACHMENT 2 State Form CT-0253

10. MATURITY DATES, AMOUNTS AND INTEREST RATES

$100,000,000 Issue 2017-1 (Non-AMT)†

$23,190,000 Serial Bonds Principal Principal Amount Due Interest CUSIP Amount Due Interest CUSIP Year January 1 Rate Number(1) July 1 Rate Number(1)

2018 $ 825,000 0.950% 880461MN5 $ 950,000 1.050% 880461MP0

2019 960,000 1.250 880461MQ8 965,000 1.350 880461MR6

2020 975,000 1.450 880461MS4 980,000 1.550 880461MT2

2021 990,000 1.700 880461MU9 1,005,000 1.800 880461MV7

2022 1,015,000 1.950 880461MW5 1,025,000 2.000 880461MX3

2023 1,040,000 2.250 880461MY1 1,050,000 2.300 880461MZ8

2024 1,065,000 2.450 880461NA2 1,080,000 2.500 880461NB0

2025 1,095,000 2.750 880461NC8 1,115,000 2.800 880461ND6

2026 1,130,000 2.950 880461NE4 1,145,000 2.950 880461NF1

2027 1,165,000 3.050 880461NG9 1,185,000 3.050 880461NH7

2028 1,205,000 3.150 880461NM6 1,225,000 3.150 880461NN4

$76,810,000 Term Bonds Principal Interest CUSIP Maturity Date Amount Due Rate Number(1)

July 1, 2032 $10,740,000 3.625% 880461NJ3

July 1, 2039 22,370,000 4.000 880461NK0

July 1, 2042 (PAC) 43,700,000 4.000 880461NL8

PRICE OF ISSUE 2017-1 BONDS DUE JULY 1, 2042 (PAC): 107.727%

PRICE OF ALL REMAINING ISSUE 2017-1 BONDS: 100.000%

____________________ (1) The CUSIP Numbers have been assigned to this issue by an organization not affiliated with THDA and are included solely for the convenience of

the bondholders. Neither THDA nor the Underwriters shall be responsible for the selection or use of these CUSIP Numbers nor is any representation

made as to their correctness on the bonds or as indicated herein. † Interest on the Issue 2017-1 Bonds is not included in corporations’ calculations of adjusted current earnings under the alternative minimum tax

provisions of the Code.

THDA Issue 2017-1State Form CT-0253

13. DISCLOSURE DOCUMENT:


A Supplemental Resolution

Authorizing the Sale of

Residentíal Finance Program Bonds

$100,000,000 Issue 2017 -1 (Non-AMT)

Adopted January 24, 2017

as amended and supplementedby the Bond Finance Committeeof THDA on February 22,2017

ATTACHMENT 3

482s-t964-9091.4

i 4825-1964-9091.4

ARTICLE I

DEFINITIONS AND AUTHORITY

Section 1.01. Short Title ........................................................................................................ 1

Section 1.02. Definitions........................................................................................................ 1

Section 1.03. Authority for this Resolution ........................................................................... 4

ARTICLE II

TERMS AND ISSUANCE

Section 2.01. Issue Amount and Designation ........................................................................ 4

Section 2.02. Purposes ........................................................................................................... 4

Section 2.03. Amounts, Maturities and Interest Rates ........................................................... 4

Section 2.04. Denominations, Numbers and Letters.............................................................. 6

Section 2.05. Paying Agent .................................................................................................... 6

Section 2.06. Execution of Bonds .......................................................................................... 6

Section 2.07. Place of Payment; Record Date ....................................................................... 6

Section 2.08. Sinking Fund Redemption Provisions ............................................................. 7

Section 2.09. Optional Redemption ....................................................................................... 8

Section 2.10. Special Optional Redemption .......................................................................... 9

Section 2.11. Special Mandatory Redemptions ................................................................... 10

Section 2.12. Selection by Lot ............................................................................................. 12

Section 2.13. Purchase of Bonds by THDA or Trustee ....................................................... 12

ARTICLE III

SALE AND DELIVERY

Section 3.01. Sale ................................................................................................................. 12

ARTICLE IV

DISPOSITION OF PROCEEDS AND OTHER MONEYS

Section 4.01. Loan Fund; Bond Reserve Fund Requirement............................................... 12

Section 4.02. Proceeds of Issue 2017-1 Bonds .................................................................... 13

Section 4.03. Program Loan Determinations ....................................................................... 13

ARTICLE V

FORM OF BONDS, AND TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Section 5.01. Form of Bonds ............................................................................................... 14

Section 5.02. Form of Trustee’s and Authenticating Agent’s Certificate of

Authentication ................................................................................................ 14

ARTICLE VI

MISCELLANEOUS

Section 6.01. No Recourse Against Members or Other Persons ......................................... 15

ii 4825-1964-9091.4

Section 6.02. Bonds not Debt, Liability or Obligation of the State or the United

States of America ........................................................................................... 15

Section 6.03. Delivery of Projected Cash Flow Statements ................................................ 15

Section 6.04. Authorized Officers ....................................................................................... 15

Section 6.05. Authorized Trustee......................................................................................... 16

Section 6.06. Covenant to Comply with Federal Tax Law Requirements........................... 16

Section 6.07. Continuing Disclosure Undertaking .............................................................. 16

Section 6.08. Confirmation and Adjustment of Terms by Committee ................................ 19

Section 6.09. Effective Date ................................................................................................ 19

EXHIBIT A BOND PURCHASE AGREEMENT

EXHIBIT B PLANNED AMORTIZATION AMOUNTS FOR ISSUE 2017-1 PAC

BONDS AND 400% PSA PREPAYMENT AMOUNT TABLE

EXHIBIT C FORM OF BOND

4825-1964-9091.4

A SUPPLEMENTAL RESOLUTION AUTHORIZING THE SALE OF

RESIDENTIAL FINANCE PROGRAM BONDS

$100,000,000 ISSUE 2017-1 (Non-AMT)

BE IT RESOLVED by the Board of Directors of the TENNESSEE HOUSING

DEVELOPMENT AGENCY (“THDA”) as follows:

ARTICLE I

DEFINITIONS AND AUTHORITY

Section 1.01. Short Title. This resolution may hereafter be cited by THDA as the Issue

2017-1 Supplemental Residential Finance Program Bond Resolution.

Section 1.02. Definitions.

(a) All terms which are defined in Section 1.2 of the resolution of THDA

adopted January 29, 2013, as amended and supplemented by the Bond Finance

Committee on April 18, 2013, and entitled “General Residential Finance Program Bond

Resolution” (the “General Resolution”) have the same meanings in this Resolution as

such terms are given in Section 1.2 of the General Resolution.

(b) In addition, as used in this Resolution, unless the context otherwise

requires, the following terms have the following respective meanings:

“400% PSA Prepayment Amount” means the cumulative amount of

principal prepayments on the Program Loans allocable to the Issue 2017-1 Bonds

at a rate equal to 400% PSA, as set forth in Exhibit B hereto.

“Allocated Program Loans” means the Program Loans transferred from

the General Homeownership Program Bond Resolution adopted by THDA on

June 6, 1985 (as amended, the “1985 Resolution”) and allocated to the Issue

2017-1 Bonds upon the issuance of the Issue 2017-1 Bonds as identified by

THDA on or before March 30, 2017.

“Bond Purchase Agreement” means the contract for the purchase of the

Issue 2017-1 Bonds between THDA and the Underwriters, in substantially the

form attached hereto as Exhibit A.

“Business Day” shall mean any day except for a Saturday, Sunday or any

day on which banks in Tennessee or New York are required or authorized to be

closed.

“Co-Managers” means FTN Financial Capital Markets, J.P. Morgan

Securities LLC, Avondale Partners, LLC, and Wells Fargo Bank, National

Association.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

2 4825-1964-9091.4

“DTC” means The Depository Trust Company, New York, New York, a

limited-purpose trust company organized under the laws of the State of New

York, and its successors and assigns.

“Excess 2017-1 Principal Payments” means, as of any date of

computation, 100% of all regularly scheduled principal payments and

prepayments on Program Loans, or portions thereof, allocable to the Issue 2017-1

Bonds to the extent such regularly scheduled principal payments and prepayments

are not required to make regularly scheduled principal payments, including

Sinking Fund Payments, on the Issue 2017-1 Bonds.

“Issue 2017-1 Bonds” means the Issue 2017-1 Bonds of THDA authorized

by this Resolution pursuant to the Plan of Financing.

“Issue 2017-1 PAC Bonds Planned Amortization Amount” means the

cumulative amount of PAC Bonds expected to be redeemed upon the receipt of

Excess Principal Payments at a rate equal to 100% PSA, as set forth in Exhibit B

hereto.

“Issue Date” means the date on which the Issue 2017-1 Bonds are issued

by THDA and delivered to the Underwriters, expected to occur on March 30,

2017.

“MSRB” means the Municipal Securities Rulemaking Board by operation

of its Electronic Municipal Market Access System.

“Official Statement” means the Official Statement dated February 22,

2017 used in connection with the sale of the Issue 2017-1 Bonds.

“PAC Bonds” means the Issue 2017-1 Bonds in the aggregate principal of

$43,700,000 maturing July 1, 2042.

“Preliminary Official Statement” means the Preliminary Official

Statement dated February 14, 2017 used in connection with the offering of the

Issue 2017-1 Bonds.

“Rating Agency” shall mean Moody’s Investors Service, Inc. (or any

successor thereto), and Standard & Poor’s Ratings Services, a Standard & Poor’s

Financial Services LLP business (or any successor thereto).

“Resolution” means this Supplemental Resolution adopted by THDA on

January 24, 2017 as amended and supplemented by the Bond Finance Committee

on February 22, 2017.

“Serial Bonds” means the Issue 2017-1 Bonds which are not Term Bonds.

“Term Bonds” means, collectively, the Issue 2017-1 Bonds maturing July

1, 2032, July 1, 2039 and July 1, 2042.

3 4825-1964-9091.4

“Underwriters” means, collectively, RBC Capital Markets, LLC,

Citigroup Global Markets Inc., and Raymond James & Associates, Inc., and their

respective successors and assigns, and the Co-Managers as purchasers of the Issue

2017-1 Bonds.

(c) Unless the context otherwise indicates, words of the masculine gender will

be deemed and construed to include correlative words of feminine and neuter genders,

words importing the singular number include the plural number and vice versa, and

words importing persons include firms, associations, partnerships (including limited

partnerships), trusts, corporations and other legal entities, including public bodies, as well

as natural persons.

(d) The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any

similar terms as used in this Resolution refer to this Resolution and such terms used in the

form of registered bond herein refer to such bonds.

(e) Unless the context otherwise indicates, the term “Program Loan” as used

herein shall include Allocated Program Loans and Program Securities and the phrase

“Program Loans allocable to the Issue 2017-1 Bonds” shall include the Allocated

Program Loans as well as any new Program Loans and Program Securities acquired with

proceeds of the Issue 2017-1 Bonds.

Section 1.03. Authority for this Resolution. This Resolution is adopted pursuant to the

provisions of the Act and the General Resolution.

ARTICLE II

TERMS AND ISSUANCE

Section 2.01. Issue Amount and Designation. In order to provide funds necessary for

the Residential Finance Program in accordance with and subject to the terms, conditions and

limitations established herein and in the General Resolution, Residential Finance Program

Bonds, Issue 2017-1 are hereby authorized to be issued in the aggregate principal amount of

$100,000,000. In addition to the title “Residential Finance Program Bond,” the Issue 2017-1

Bonds will bear the additional designation “Issue 2017-1 (Non-AMT)”. The Issue 2017-1 Bonds

shall be issued only in fully registered form. The Issue 2017-1 Bonds will consist of

$23,190,000 principal amount of Serial Bonds and $76,810,000 principal amount of Term

Bonds.

Section 2.02. Purposes. The Issue 2017-1 Bonds are being issued (a) to finance

Program Loans, or participations therein, on single family residences located within the State,

(b) if required, to pay capitalized interest on the Issue 2017-1 Bonds, (c) if required, to make a

deposit in the Bond Reserve Fund, and (d) if required, to pay certain costs of issuance relating to

the Issue 2017-1 Bonds.

The proceeds of the Issue 2017-1 Bonds shall be applied in accordance with Article IV

hereof.

4 4825-1964-9091.4

Section 2.03. Amounts, Maturities and Interest Rates.

(a) The Issue 2017-1 Bonds will mature on the dates, in the principal amounts

and bear interest from their Issue Date, calculated on the basis of a 360-day year of

twelve 30-day months, payable semi-annually on each January 1 and July 1, commencing

July 1, 2017, at the rate set opposite such date in the following tables:

Issue 2017 (Non-AMT)

Serial Bonds

Maturity

Date

Principal

Amount

Interest

Rate

Maturity

Date

Principal

Amount

Interest

Rate

January 1, 2018 $ 825,000 0.95% July 1, 2023 $ 1,050,000 2.30%

July 1, 2018 950,000 1.05 January 1, 2024 1,065,000 2.45

January 1, 2019 960,000 1.25 July 1, 2024 1,080,000 2.50

July 1, 2019 965,000 1.35 January 1, 2025 1,095,000 2.75

January 1, 2020 975,000 1.45 July 1, 2025 1,115,000 2.80

July 1, 2020 980,000 1.55 January 1, 2026 1,130,000 2.95

January 1, 2021 990,000 1.70 July 1, 2026 1,145,000 2.95

July 1, 2021 1,005,000 1.80 January 1, 2027 1,165,000 3.05

January 1, 2022 1,015,000 1.95 July 1, 2027 1,185,000 3.05

July 1, 2022 1,025,000 2.00 January 1, 2028 1,205,000 3.15

January 1, 2023 1,040,000 2.25 July 1, 2028 1,225,000 3.15

Term Bonds

Maturity

Date

Principal

Amount

Interest

Rate

July 1, 2032 $10,740,000 3.625%

July 1, 2039 22,370,000 4.00

July 1, 2042 (PAC) 43,700,000 4.00

(b) Whenever the due date for payment of interest on or principal of the Issue

2017-1 Bonds or the date fixed for redemption of any Issue 2017-1 Bond shall be a day

which is not a Business Day, then payment of such interest, principal or Redemption

Price need not be made on such date, but may be made on the next succeeding Business

Day, with the same force and effect as if made on the due date for payment of principal,

interest or Redemption Price and no additional interest shall be payable on such Business

Day which, merely by operation of this paragraph, may have accrued after the original

due date.

Section 2.04. Denominations, Numbers and Letters.

(a) The Issue 2017-1 Bonds maturing in each year are to be issued in

denominations of $5,000 or any integral multiple thereof not exceeding the aggregate

5 4825-1964-9091.4

principal amount of Issue 2017-1 Bonds maturing in such year. The Issue 2017-1 Bonds

are to be lettered “R” and numbered separately from 1 consecutively upwards.

(b) The Issue 2017-1 Bonds, when issued, will be registered in the name of

Cede & Co., as nominee of DTC. Only one Issue 2017-1 Bond will be outstanding for

each maturity and interest rate of the Issue 2017-1 Bonds in the aggregate principal

amount of such maturity and interest rate. Subject to the provisions of the General

Resolution, purchases of ownership interests in the Issue 2017-1 Bonds will be made in

book-entry form only in authorized denominations set forth in Section 2.04(a).

Beneficial owners of the Issue 2017-1 Bonds will not receive certificates representing

their interest in the Issue 2017-1 Bonds. So long as Cede & Co. shall be the registered

owner of the Issue 2017-1 Bonds, THDA will deem and treat Cede & Co. as the sole and

exclusive owner of the Issue 2017-1 Bonds and THDA will have no responsibility to any

DTC participant or beneficial owner thereof.

Section 2.05. Paying Agent. The Trustee is hereby appointed as paying agent for the

Issue 2017-1 Bonds pursuant to Section 11.2 of the General Resolution. The Trustee may

appoint an agent for presentation of transfers in New York, New York and DTC may act as such

agent.

Section 2.06. Execution of Bonds. The Issue 2017-1 Bonds shall be executed by the

manual or facsimile signature of the Chairperson or Vice Chairperson and the seal of THDA or a

facsimile thereof shall be imprinted, impressed or otherwise reproduced on the Issue 2017-1

Bonds and attested by the manual or facsimile signature of the Executive Director or Secretary of

THDA. The Issue 2017-1 Bonds shall be delivered to the Trustee for proper authentication and

delivered to DTC pursuant to the DTC FAST delivery program, as the registered owner of the

Issue 2017-1 Bonds upon instructions from THDA to that effect.

Section 2.07. Place of Payment; Record Date. While the Issue 2017-1 Bonds are

registered in book-entry only form in the name of Cede & Co. as nominee of DTC, payments of

principal, Redemption Price and interest on the Issue 2017-1 Bonds shall be made in accordance

with the procedures of DTC. In the event the Issue 2017-1 Bonds are no longer held in

book-entry only form, the principal and Redemption Price of all Issue 2017-1 Bonds shall be

payable at the designated corporate trust office of the Trustee. Interest on the Issue 2017-1

Bonds will be paid by check mailed by the Trustee to the registered owner thereof. Any

registered owner of the Issue 2017-1 Bonds in a principal amount equal to or exceeding

$1,000,000 may receive payments of interest by wire transfer if written notice is given to the

Trustee at least ten Business Days before an applicable Interest Payment Date. The Record Date

for payment of interest on the Issue 2017-1 Bonds shall be the 15th day of the month next

preceding an Interest Payment Date.

Section 2.08. Sinking Fund Redemption Provisions.

(a) The Issue 2017-1 Bonds that are Term Bonds are subject to redemption in

part by lot on the dates set forth below for such maturity of Issue 2017-1 Bonds at a

Redemption Price equal to 100% of the principal amount thereof from mandatory Sinking

Fund Payments in the principal amounts for each of the dates set forth below:

6 4825-1964-9091.4

Issue 2017-1 Term Bonds due July 1, 2032

Maturity

Date

Amount

Due

Maturity

Date

Principal

Amount

January 1, 2029 $1,250,000 January 1, 2031 $1,355,000

July 1, 2029 1,275,000 July 1, 2031 1,385,000

January 1, 2030 1,305,000 January 1, 2032 1,410,000

July 1, 2030 1,325,000 July 1, 2032* 1,435,000

*Maturity


Maturity

Date

Amount

Due

Maturity

Date

Principal

Amount

January 1, 2033 $1,465,000 July 1, 2036 $1,695,000

July 1, 2033 1,495,000 January 1, 2037 1,735,000

January 1, 2034 1,525,000 July 1, 2037 1,765,000

July 1, 2034 1,560,000 January 1, 2038 1,805,000

January 1, 2035 1,590,000 July 1, 2038 1,745,000

July 1, 2035 1,625,000 January 1, 2039 1,590,000

January 1, 2036 1,660,000 July 1, 2039* 1,115,000

*Maturity

7 4825-1964-9091.4


Maturity

Date

Amount

Due

Maturity

Date

Principal

Amount

January 1, 2018 $515,000 July 1, 2030 $845,000

July 1, 2018 525,000 January 1, 2031 860,000

January 1, 2019 535,000 July 1, 2031 875,000

July 1, 2019 545,000 January 1, 2032 895,000

January 1, 2020 555,000 July 1, 2032 915,000

July 1, 2020 570,000 January 1, 2033 930,000

January 1, 2021 580,000 July 1, 2033 950,000

July 1, 2021 590,000 January 1, 2034 970,000

January 1, 2022 600,000 July 1, 2034 990,000

July 1, 2022 615,000 January 1, 2035 1,010,000

January 1, 2023 625,000 July 1, 2035 1,030,000

July 1, 2023 640,000 January 1, 2036 1,050,000

January 1, 2024 650,000 July 1, 2036 1,120,000

July 1 2024 665,000 January 1, 2037 1,140,000

January 1, 2025 680,000 July 1, 2037 1,165,000

July 1, 2025 690,000 January 1, 2038 1,185,000

January 1, 2026 705,000 July 1, 2038 1,160,000

July 1, 2026 720,000 January 1, 2039 1,230,000

January 1, 2027 735,000 July 1, 2039 1,255,000

July 1, 2027

January 1, 2028

July 1, 2028

January 1, 2029

July 1, 2029

January 1, 2030

750,000

765,000

780,000

795,000

810,000

825,000

January 1, 2040

July 1, 2040

January 1, 2041

July 1, 2041

January 1, 2042

July 1, 2042

1,215,000

1,240,000

1,260,000

1,290,000

1,315,000

1,340,000

*Maturity

(b) Upon the purchase or redemption of Issue 2017-1 Bonds of any maturity

for which Sinking Fund Payments have been established other than by application of

Sinking Fund Payments, each future Sinking Fund Payment for such Issue 2017-1 Bonds

maturity will be credited by an amount bearing the same ratio to such Sinking Fund

Payment as the total principal amount of such Issue 2017-1 Bonds of such maturity to be

purchased or redeemed bears to the total amount of all Sinking Fund Payments for such

maturity of Issue 2017-1 Bonds, unless otherwise directed by THDA in accordance with

the General Resolution.

Section 2.09. Optional Redemption. The Issue 2017-1 Bonds maturing on and after

January 1, 2027 are subject to redemption at the option of THDA prior to their respective

maturities, either as a whole or in part at any time, on or after July 1, 2026 (any such date to be

determined by THDA or selected by the Trustee subject to the provisions of and in accordance

with the General Resolution, and when so determined or selected will be deemed and is hereby

set forth as the redemption date), upon notice as provided in Article VI of the General

8 4825-1964-9091.4

Resolution, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued

interest to the date of redemption.

Section 2.10. Special Optional Redemption. The Issue 2017-1 Bonds are subject to

redemption, at the option of THDA, as a whole or in part at any time prior to maturity, in

accordance with the provisions of the General Resolution, in an amount equal to amounts

available for such purpose from (i) proceeds of the Issue 2017-1 Bonds not expected to be

applied to the financing of Program Loans, (ii) repayments and prepayments of Program Loans

allocated to the Issue 2017-1 Bonds not otherwise required to be applied to the special

mandatory redemption of the Issue 2017-1 Bonds as described in Sections 2.11(b) or 2.11(c)

hereof or to make regularly scheduled principal payments, including Sinking Fund Payments, on

the Issue 2017-1 Bonds, (iii) repayments and prepayments of Program Loans made with the

proceeds of any other Bonds issued under the General Resolution, subject to limitations

contained in the Code, (iv) other amounts on deposit in the Revenue Fund in excess of the

amounts required for the payment of Debt Service and Program Expenses, and (v) amounts on

deposit in the Bond Reserve Fund in excess of the Bond Reserve Requirement; provided

however, that the PAC Bonds (A) are only subject to redemption as described in clause (ii)

above as described in Section 2.11(b) hereof and (B) shall not be subject to redemption as

described in clauses (iii), (iv) and (v) above if such redemption would cause amortization of the

PAC Bond to exceed the Issue 2017-1 PAC Bonds Planned Amortization Amount.

The date of redemption pursuant to this Section 2.10 shall be determined by the Trustee

upon the direction of THDA subject to the provisions of and in accordance with the General

Resolution (and when so determined such date will be deemed and is hereby set forth as the

redemption date). The Issue 2017-1 Bonds to be so redeemed shall be redeemed at a

Redemption Price of 100% of the principal amount thereof, plus interest accrued to the

redemption date, if applicable; provided, however, that the Redemption Price for the PAC Bonds

in the event of a redemption described in clause (i) of the paragraph above shall be the issue

price thereof (par plus premium), plus accrued interest to the redemption date.

The Issue 2017-1 Bonds to be redeemed pursuant to this Section 2.10 shall be selected by

THDA in its sole discretion; provided, however, that the PAC Bonds may not be redeemed in an

amount in excess of their proportionate amount of all Issue 2017-1 Bonds then Outstanding in

the event of any redemption pursuant to clause (i) of the first paragraph of this Section 2.10.

Section 2.11. Special Mandatory Redemptions.

(a) Unexpended Proceeds. The Issue 2017-1 Bonds are subject to mandatory

redemption on December 1, 2017 in the event and to the extent that there are unexpended

proceeds of the Issue 2017-1 Bonds on deposit in the Issue 2017-1 Subaccount of the

Loan Fund on November 1, 2017; provided that such redemption date may be extended,

at the option of THDA, and subject to the satisfaction of the conditions set forth in

Section 4.01 hereof.

Notwithstanding any extension of the redemption date described above, in order

to satisfy requirements of the Code, the Issue 2017-1 Bonds are subject to mandatory

redemption on September 1, 2020, to the extent any amounts remain on deposit in the

Issue 2017-1 Subaccount of the Loan Fund on August 1, 2020.

9 4825-1964-9091.4

The redemption price of the Issue 2017-1 Bonds to be so redeemed shall be 100%

of the principal amount thereof plus interest accrued to the date of redemption, if

applicable; provided, however, that the redemption price for the PAC Bonds shall be the

issue price thereof (par plus premium) plus accrued interest to the redemption date. The

Issue 2017-1 Bonds to be redeemed shall be selected by THDA in its sole discretion;

provided, however, that the PAC Bonds may not be redeemed in an amount in excess of

their proportionate amount of all Issue 2017-1 Bonds then Outstanding.

(b) Excess 2017-1 Principal Payments (PAC Bonds). The PAC Bonds are

subject to redemption prior to their maturity, in whole or in part at a Redemption Price of

100% of the principal amount of such PAC Bonds to be redeemed, plus interest accrued

to the date of redemption, from amounts transferred to the Redemption Account

representing Excess 2017-1 Principal Payments. Any Excess 2017-1 Principal Payments

so deposited in the Redemption Account shall be applied to the redemption of PAC

Bonds on any Interest Payment Date commencing July 1, 2017; provided, however, that

PAC Bonds may be redeemed between Interest Payment Dates on the first Business Day

of any month for which adequate notice of redemption may be given.

While any PAC Bonds remain Outstanding, Excess 2017-1 Principal Payments

shall be used as follows:

FIRST, if principal prepayments on the Program Loans allocable to the Issue

2017-1 Bonds are equal to or less than the 400% PSA Prepayment Amount, as

determined by THDA, then available Excess 2017-1 Principal Payments shall first be

applied to redeem the PAC Bonds up to an amount correlating to the Issue 2017-1 PAC

Bonds Planned Amortization Amount and, subject to Section 2.11(c) below, the

remainder may be applied by THDA for any purpose permissible under the Resolution,

including the redemption of any Bonds under the Resolution, other than the PAC Bonds.

SECOND, if principal prepayments on the Program Loans allocable to the Issue

2017-1 Bonds are in excess of the 400% PSA Prepayment Amount, as determined by

THDA, then available Excess 2017-1 Principal Payments shall first be applied to redeem

PAC Bonds up to an amount correlating to the Issue 2017-1 PAC Bonds Planned

Amortization Amount (as set forth in “FIRST” above) and, subject to Section 2.11(c)

below, the remainder may be applied by THDA for any purpose permissible under the

Resolution, including the redemption of any Bonds issued under the Resolution,

including the PAC Bonds (any such remainder used to redeem PAC Bonds being an

“Excess Principal PAC Bond Redemption”); provided, however, that (i) the source of an

Excess Principal PAC Bond Redemption is restricted to that portion of available Excess

2017-1 Principal Payments which is in excess of 400% PSA and (ii) the principal amount

of an Excess Principal PAC Bond Redemption may not be an amount in excess of the

PAC Bonds’ proportionate amount of all Issue 2017-1 Bonds then Outstanding.

The Issue 2017-1 PAC Bonds Planned Amortization Amount and the 400% PSA

Prepayment Amount set forth in Exhibit B hereto are each subject to proportionate

reduction to the extent PAC Bonds are redeemed from amounts on deposit in the Issue

2017-1 Subaccount of the Loan Fund which are not applied to finance Program Loans in

accordance with Section 2.11(a) hereof.

10 4825-1964-9091.4

(c) Ten Year Rule.

(i) To the extent not required to make regularly scheduled principal

payments on the Issue 2017-1 Bonds (including Sinking Fund Payments) or

otherwise required to be used to redeem the PAC Bonds as described in

Section 2.11 (b) above, repayments and prepayments of principal on the Program

Loans, or portions thereof, financed with proceeds of the Issue 2017-1 Bonds

(including Program Securities, if any) received more than ten years after the Issue

Date of the Issue 2017-1 Bonds (or the date of original issuance of the bonds

refunded by the Issue 2017-1 Bonds, directly or through a series of refundings)

shall be applied to redeem the Issue 2017-1 Bonds on or before the next Interest

Payment Date with respect to the Issue 2017-1 Bonds, which Interest Payment

Date is at least six months from the date of receipt of such Program Loan

principal payments, in such principal amounts as required to satisfy requirements

of the Code. This requirement does not apply to the Allocated Program Loans.

The Redemption Price of Issue 2017-1 Bonds so redeemed shall be 100% of the

principal amount thereof, plus interest accrued to the redemption date, if

applicable.

(ii) THDA shall advise the Trustee of the appropriate Redemption

Date for any redemption pursuant to this Section 2.11(c). The Issue 2017-1

Bonds to be redeemed shall be selected by THDA in its sole discretion; provided

however, that the PAC Bonds may be redeemed in an amount that exceeds the

Issue 2017-1 PAC Bonds Planned Amortization Amount only if there are no other

Issue 2017-1 Bonds Outstanding.

Section 2.12. Selection by Lot. If less than all of the Issue 2017-1 Bonds of like Series

and maturity are to be redeemed, the particular bonds of such maturity to be redeemed shall be

selected by lot in accordance with Section 6.4 of the General Resolution.

Section 2.13. Purchase of Bonds by THDA or Trustee. Whenever moneys are

available for redemption of Bonds under Sections 2.08, 2.09, 2.10 or 2.11 above, THDA or the

Trustee is authorized to purchase Bonds at a price not to exceed the applicable Redemption

Price.

ARTICLE III

SALE AND DELIVERY

Section 3.01. Sale.

(a) The Issue 2017-1 Bonds are hereby authorized to be sold to the

Underwriters at the prices and on the terms and conditions set forth in the Bond Purchase

Agreement and upon the basis of the representations, warranties and agreements therein

set forth. The Chairman, Secretary or Assistant Secretary of the Bond Finance

Committee and the Executive Director of THDA are hereby authorized to execute the

Bond Purchase Agreement. The Board of Directors of THDA hereby authorizes the

Committee to adopt a resolution approving the purchase price of the Issue 2017-1 Bonds.

11 4825-1964-9091.4

(b) The Secretary of the Bond Finance Committee of THDA is hereby

authorized to make public and to authorize distribution of the Official Statement relating

to the Issue 2017-1 Bonds in substantially the form presented to THDA with such

changes, omissions, insertions and revisions as such officer shall deem advisable. The

Chairman, Vice Chairman, Executive Director and Secretary of the Bond Finance

Committee are hereby authorized to sign and deliver such Official Statement to the

Underwriters. The distribution of the Preliminary Official Statement relating to the Issue

2017-1 Bonds to the public is hereby authorized and approved.

(c) The Issue 2017-1 Bonds shall be delivered to the Underwriters in

accordance with the terms of the Bond Purchase Agreement and this 2017-1

Supplemental Resolution.

12 4825-1964-9091.4

ARTICLE IV

DISPOSITION OF PROCEEDS AND OTHER MONEYS

Section 4.01. Loan Fund; Bond Reserve Fund Requirement. Upon receipt of the

proceeds of the sale of the Issue 2017-1 Bonds, THDA shall deposit such proceeds, together with

any contribution from THDA of available THDA funds, in the Issue 2017-1 Bond Subaccount of

the Loan Fund and in the Bond Reserve Fund, if applicable, as shall be set forth in a certificate of

THDA delivered on or prior to the date of issuance of the Issue 2017-1 Bonds. Amounts on

deposit in the Issue 2017-1 Bond Subaccount of the Loan Fund shall be applied to (i) the

financing of Program Loans (including Program Securities, if any), or participations therein, in

accordance with the provisions of the General Resolution and Section 4.03 hereof, (ii) fund

deposits to the Bond Reserve Fund and the Debt Service and Expense Account of the Revenue

Fund, (iii) the payment of Costs of Issuance and (iv) the payment of capitalized interest to the

extent, if any, specified by written instructions of an Authorized Officer.

Amounts on deposit in the Issue 2017-1 Subaccount of the Loan Fund shall be withdrawn

therefrom and applied to the mandatory redemption of Issue 2017-1 Bonds as described in

Section 2.11(a) hereof. The date of such redemption provided in Section 2.11(a) may be

extended upon the delivery by THDA to the Trustee and the Rating Agency of a Projected Cash

Flow Statement which satisfies the requirements of Section 7.11 of the General Resolution;

provided further that the date of such redemption shall not be extended beyond the date set forth

in the second paragraph of Section 2.11(a) unless THDA is in receipt of an opinion of Bond

Counsel to the effect that such extension will not adversely affect the exclusion of interest on the

Issue 2017-1 Bonds from the income of the owners thereof for federal income tax purposes. The

amount of funds on deposit in the Issue 2017-1 Bond Subaccount of the Loan Fund to be used to

pay Costs of Issuance with respect to the Issue 2017-1 Bonds shall not exceed 2% of the

proceeds of the Issue 2017-1 Bonds.

THDA hereby covenants that an amount equal to twenty percent (20%) of the funds

deposited in the Issue 2017-1 Bond Subaccount of the Loan Fund which are to be used to finance

Program Loans (or other available funds of THDA), shall be made available for owner financing

of “targeted area residences” (as defined in Section 143(j) of the Code) until March 30, 2018.

The Bond Reserve Fund Requirement with respect to the Issue 2017-1 Bonds shall be an

amount equal to 3% of the then current balance of Program Loans (other than Program Loans

underlying Program Securities) allocable to the Issue 2017-1 Bonds plus the amount on deposit

in the Issue 2017-1 Subaccount of the Loan Fund which has not been designated to provide for

the payment of Costs of Issuance or capitalized interest. On the Issue Date, THDA shall deposit

an amount in the Bond Reserve Fund to satisfy the Bond Reserve Requirement.

Section 4.02. Proceeds of Issue 2017-1 Bonds; Allocated Program Loans. Proceeds

of the Issue 2017-1 Bonds initially shall be deposited in the Issue 2017-1 Bond Subaccount of

the Loan Fund. On the Issuance Date, TDHA shall cause the Allocated Program Loans to be

transferred to the General Resolution and such Allocated Program Loans shall be credited to the

Issue 2017-1 Bond Subaccount of the Loan Fund.

13 4825-1964-9091.4

Section 4.03. Program Loan Determinations. No Program Loan shall be financed

with proceeds of the Issue 2017-1 Bonds unless (i) such Program Loan is made for the

acquisition of residential housing for occupancy by not more than four families and (ii) the deed

of trust securing such Program Loan shall constitute and create a first lien subject only to

Permitted Encumbrances, on the real property or on the interest in the real property constituting a

part of the residential housing with respect to which the Program Loan secured thereby is made

and on the fixtures acquired with the proceeds of the Program Loan attached to or used in

connection with such residential housing.

In addition, the Program Loan must either:

(a) have been pooled into a Program Security; or

(b) have been insured or guaranteed by the Federal Housing Administration,

the Farmers Home Administration, the Veteran’s Administration, or another agency or

instrumentality of the United States or the State to which the powers of any of them have

been transferred, or which is exercising similar powers with reference to the insurance or

guaranty of Program Loans; or

(c) have a principal balance not exceeding 78% of the value, as determined in

an appraisal by or acceptable to THDA, or the purchase price of the property securing the

Program Loan, whichever is less; or

(d) be made in an amount not exceeding the value, as determined in an

appraisal by or acceptable to THDA, or purchase price of the property securing the

Program Loan, whichever is less, but only if (i) THDA is issued a mortgage insurance

policy by a private mortgage insurance company, qualified to do business in the State and

the claims paying ability of which private mortgage insurer is rated by each Rating

Agency in a rating category at least as high as the then current rating assigned to the

Bonds, under which the insurer, upon foreclosure of the property securing the Program

Loan, must pay the holder of the Program Loan the unrecovered balance of a claim

including unpaid principal, accrued interest, taxes, insurance premiums, and expenses of

foreclosure, if any, or in lieu thereof may permit the holder of the Program Loan to retain

title and may pay an agreed insured percentage of such claim; and (ii) the insured

percentage of the Program Loan equals the amount by which the original principal

amount of the Program Loan exceeds 78% of the value, as determined by an appraisal by

or acceptable to THDA or purchase price of the property securing the Program Loan,

whichever is less.

ARTICLE V

FORM OF BONDS, AND

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Section 5.01. Form of Bonds. Subject to the provisions of the General Resolution, the

Issue 2017-1 Bonds in fully registered form shall be in substantially the form attached hereto as

Exhibit C, with such variations as shall be appropriate in order to conform to the terms and

provisions of the General Resolution and this Resolution.

14 4825-1964-9091.4

Section 5.02. Form of Trustee’s and Authenticating Agent’s Certificate of

Authentication. The Issue 2017-1 Bonds shall not be valid or become obligatory for any

purpose unless there shall have been endorsed thereon a certificate of authentication in

substantially the following form:

(FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION)

This bond is one of the bonds described in the within-mentioned Resolutions and is one

of the Residential Finance Program Bonds, Issue 2017-1 (Non-AMT) of the Tennessee Housing

Development Agency.

U.S. BANK NATIONAL ASSOCIATION, as

Trustee

By

Authorized Officer

ARTICLE VI

MISCELLANEOUS

Section 6.01. No Recourse Against Members or Other Persons. No recourse may be

had for the payment of principal of or premium or interest on the Issue 2017-1 Bonds or for any

claim based thereon or on this Resolution against any member of THDA or any person executing

the Issue 2017-1 Bonds and neither the members of THDA nor any person executing the Issue

2017-1 Bonds may be liable personally on the Issue 2017-1 Bonds or be subject to any personal

liability or accountability by reason of the execution thereof.

Section 6.02. Bonds not Debt, Liability or Obligation of the State or the United

States of America. The Issue 2017-1 Bonds are not a debt, liability or the obligation of the State

or any other political subdivision thereof. Neither the full faith and credit nor the taxing power

of the State, or of any other political subdivision thereof, is pledged for the payment of the

principal of or interest on the Issue 2017-1 Bonds. The Issue 2017-1 Bonds are not a debt,

liability or obligation of the United States of America or any agency thereof. Neither the full

faith and credit nor the taxing power of the United States of America is pledged for payment of

the principal of or interest on the Issue 2017-1 Bonds.

Section 6.03. Delivery of Projected Cash Flow Statements. THDA shall deliver such

Projected Cash Flow Statements at the times and on the occasions set forth in the General

Resolution or this Resolution.

Section 6.04. Authorized Officers. The Chairman, Vice Chairman, Executive Director,

General Counsel, Deputy Executive Director and Secretary of THDA and the Secretary and any

Assistant Secretary of the Bond Finance Committee and any other proper officer of THDA, be,

and each of them hereby is, authorized and directed to execute and deliver any and all documents

and instruments and to do and cause to be done any and all acts and things necessary or proper

15 4825-1964-9091.4

for carrying out the transactions contemplated by this Resolution, the General Resolution and the

Official Statement.

Section 6.05. Authorized Trustee. THDA authorizes and directs the Trustee to perform

any and all acts contemplated to be performed by the Trustee pursuant to the terms and

provisions of this Resolution.

Section 6.06. Covenant to Comply with Federal Tax Law Requirements. THDA

hereby covenants to comply with all applicable requirements of the Code so that interest on the

Issue 2017-1 Bonds will be excluded from gross income of the holders thereof for federal

income tax purposes, including the rebate requirement of Section 148(f) of the Code. THDA

also covenants to pay any interest or penalty imposed by the United States for failure to comply

with said rebate requirements. In accordance with the rebate requirement, THDA agrees that

there will be paid from time to time all amounts required to be rebated to the United States

pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury

Regulations as may be applicable to the Issue 2017-1 Bonds from time to time.

Section 6.07. Continuing Disclosure Undertaking.

(a) THDA shall deliver to the MSRB, within 210 days after the end of each

Fiscal Year:

(i) a copy of the annual financial statements of THDA prepared in

accordance with generally accepted accounting principles as prescribed by the

Governmental Accounting Standards Board; and

(ii) an annual update of the type of information in the Official

Statement (A) contained in Appendix F, (B) regarding annual required

contributions for employee pension plan and other post-employment benefits to

the extent not included in annual financial statements and (C) of the nature

disclosed under the following headings (including, without limitation, information

with respect to the outstanding balances of Program Loans, by mortgage type,

delinquency information, acquisition costs and income limits):

(A) Residential Finance Program Bonds; and

(B) Residential Finance Program Loans.

The information described in this subsection (a) may be provided by specific reference to

documents (including official statements, to the extent the official statements include the

information described in this subsection (a)) previously provided to the MSRB or filed with the

Securities and Exchange Commission.

If unaudited financial statements are provided as part of the information required to be

delivered under this subsection (a) within the time period specified above, THDA shall provide,

when and if available, a copy of THDA’s audited financial statements to the MSRB.

(b) THDA shall deliver to the MSRB and the Trustee, in a timely manner not

in excess of 10 business days after the occurrence of the event, notice of the occurrence

of any of the following events (if applicable) with respect to the Issue 2017-1 Bonds:

16 4825-1964-9091.4

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults, if material;

(iii) unscheduled draws on the Bond Reserve Fund (or other debt

service reserves) reflecting financial difficulties;

(iv) unscheduled draws on any credit enhancements reflecting financial

difficulties;

(v) substitution of any credit or liquidity provider, or their failure to

perform;

(vi) adverse tax opinions, the issuance by the Internal Revenue Service

of proposed or final determinations of taxability, Notices of Proposed Issue (IRS

Form 5701-TEB) or other material notices or determinations with respect to the

tax status of the Issue 2017-1 Bonds, or other material events affecting the tax

status of the Issue 2017-1 Bonds;

(vii) modifications to rights of the holders of the Issue 2017-1 Bonds, if

material;

(viii) bond calls, if material, and tender offers;

(ix) defeasances;

(x) release, substitution or sale of property securing repayment of the

Issue 2017-1 Bonds, if material;

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership or similar event of THDA

(which event is considered to occur when any of the following occur: the

appointment of a receiver, fiscal agent or similar officer for THDA in a

proceeding under the U.S. Bankruptcy Code or in any other proceeding under

state or federal law in which a court or governmental authority has assumed

jurisdiction over substantially all of the assets or business of THDA, or if such

jurisdiction has been assumed by leaving the existing governing body and

officials or officers in possession but subject to the supervision and orders of a

court or governmental authority, or the entry of an order confirming a plan of

reorganization, arrangement or liquidation by a court or governmental authority

having supervision or jurisdiction over substantially all of the assets or business of

THDA);

(xiii) The consummation of a merger, consolidation or acquisition

involving THDA or the sale of all or substantially all of the assets of THDA, other

than in the ordinary course of business, the entry into a definitive agreement to

undertake such an action or the termination of a definitive agreement relating to

any such actions, other than pursuant to its terms, if material; and

17 4825-1964-9091.4

(xiv) Appointment of a successor or additional trustee or the change of

name of a trustee, if material.

Notwithstanding the foregoing, notice of optional or unscheduled redemption of

any Issue 2017-1 Bonds or defeasance of any Issue 2017-1 Bonds need not be

given pursuant to this Section 6.07 any earlier than the notice (if any) of such

redemption or defeasance is given to the owners of the Issue 2017-1 Bonds

pursuant to the Resolution.

(c) THDA shall give notice to the Trustee and the MSRB in a timely manner

of any failure by THDA to provide any information required pursuant to subsection (a)

above within the time limit specified therein.

(d) All notices, documents and information provided to the MSRB shall be

provided in an electronic format as prescribed by the MSRB and shall be accompanied by

identifying information as prescribed by the MSRB.

(e) THDA agrees that the provisions of this Section 6.07 shall be for the

benefit of the beneficial owners of the Issue 2017-1 Bonds whether or not the Rule (as

defined below) applies to such Issue 2017-1 Bonds.

(f) THDA may amend this Resolution with respect to the above agreements,

without the consent of the beneficial owners of the Issue 2017-1 Bonds (except to the

extent required under clause (iv)(B) below), if all of the following conditions are

satisfied: (i) such amendment is made in connection with a change in circumstances that

arises from a change in legal (including regulatory) requirements, a change in law

(including rules or regulations) or in interpretations thereof, or a change in the identity,

nature or status of THDA or the type of business conducted thereby; (ii) these agreements

as so amended would have complied with the requirements of Rule 15c2-12 (the “Rule”)

as of the date of this Resolution, after taking into account any amendments or

interpretations of the Rule, as well as any change in circumstances; (iii) THDA shall have

delivered to the Trustee an opinion of counsel, addressed to THDA and the Trustee, to

the same effect as set forth in clause (ii) above; (iv) either (A) THDA shall deliver to the

Trustee an opinion of or determination by a person unaffiliated with THDA (which may

include the Trustee or bond counsel), acceptable to THDA and the Trustee, addressed to

THDA and the Trustee, to the effect that the amendment does not materially impair the

interests of the holders of the Issue 2017-1 Bonds or (B) the holders of the Issue 2017-1

Bonds consent to the amendment pursuant to the same procedures as are required for

amendments to the General Resolution with consent of the holders of Bonds pursuant to

the General Resolution as in effect on the date of this Resolution; and (v) THDA shall

have delivered copies of such opinion(s) and the amendment to the MSRB.

(g) THDA’s obligations with respect to the beneficial owners of the Issue

2017-1 Bonds under these agreements as set forth above terminate upon a legal

defeasance pursuant to the General Resolution, prior redemption or payment in full of all

of the Issue 2017-1 Bonds. THDA shall give notice of any such termination to the

MSRB.

18 4825-1964-9091.4

(h) Failure by THDA to comply with this Section 6.07 shall not constitute an

Event of Default under the General Resolution but the undertaking in this Section 6.07

may be enforced by any beneficial owner of the Issue 2017-1 Bonds exclusively by an

action for specific performance. The obligations of THDA in this Section 6.07 shall be

construed and interpreted in accordance with the laws of the State, and any suits and

actions arising out of the obligations under this Section 6.07 shall be instituted in a court

of competent jurisdiction in the State.

Section 6.08. Confirmation and Adjustment of Terms by Committee. The terms of

the Issue 2017-1 Bonds are herein established subject to confirmation by the Committee upon the

sale of the Issue 2017-1 Bonds by the Committee. The Committee is hereby authorized to make

such changes or modifications in the principal amounts, maturities and interest rates for the Issue

2017-1 Bonds and in the application of the proceeds thereof, paying agents, terms of redemption

and the schedule of prepayment amounts to be used for accrued principal installments in such

manner as the Committee determines to be necessary or convenient to better achieve the

purposes of the Act and in the best interests of THDA.

Section 6.09. Effective Date. This Resolution will take effect immediately.

1 4825-1964-9091.4

EXHIBIT A

BOND PURCHASE AGREEMENT

1 4825-1964-9091.4

EXHIBIT B

PLANNED AMORTIZATION AMOUNTS FOR PAC BONDS

Date Issue 2017-1 PAC Bonds

Planned Amortization

Amount

July 1, 2017 $ 360,000

January 1, 2018 1,410,000

July 1, 2018 3,015,000

January 1, 2019 5,160,000

July 1, 2019 7,820,000

January 1, 2020 10,935,000

July 1, 2020 14,175,000

January 1, 2021 17,275,000

July 1, 2021 20,230,000

January 1, 2022 23,045,000

July 1, 2022 25,725,000

January 1, 2023 28,270,000

July 1, 2023 30,685,000

January 1, 2024 32,975,000

July 1, 2024 35,140,000

January 1, 2025 37,185,000

July 1, 2025 39,105,000

January 1, 2026 40,910,000

July 1, 2026 42,605,000

January 1, 2027 43,700,000

2 4825-1964-9091.4

400% PSA PREPAYMENT AMOUNTS

FOR ISSUE 2017-1 BONDS

Date

Cumulative

Amount

Date

Cumulative

Amount

July 1, 2017 $ 1,433,235

January 1, 2033 $ 107,221,596

January 1, 2018 5,504,629

July 1, 2033 107,394,004

July 1, 2018 11,591,365

January 1, 2034 107,539,798

January 1, 2019 19,520,483

July 1, 2034 107,662,877

July 1, 2019 28,950,455

January 1, 2035 107,766,588

January 1, 2020 39,313,049

July 1, 2035 107,853,799

July 1, 2020 48,962,280

January 1, 2036 107,926,971

January 1, 2021 57,289,018

July 1, 2036 107,988,212

July 1, 2021 64,469,632

January 1, 2037 108,039,327

January 1, 2022 70,659,568

July 1, 2037 108,081,858

July 1, 2022 75,993,421

January 1, 2038 108,117,125

January 1, 2023 80,587,708

July 1, 2038 108,146,254

July 1, 2023 84,543,274

January 1, 2039 108,170,230

January 1, 2024 87,947,385

July 1, 2039 108,190,046

July 1, 2024 90,875,534

January 1, 2040 108,206,421

January 1, 2025 93,393,018

July 1, 2040 108,219,898

July 1, 2025 95,556,297

January 1, 2041 108,230,937

January 1, 2026 97,414,183

July 1, 2041 108,239,927

July 1, 2026 99,008,861

January 1, 2042 108,247,202

January 1, 2027 100,376,778

July 1, 2042 108,253,042

July 1, 2027 101,549,418

January 1, 2043 108,257,687

January 1, 2028 102,553,966

July 1, 2043 108,261,339

July 1, 2028 103,413,891

January 1, 2044 108,264,169

January 1, 2029 104,149,444

July 1, 2044 108,266,320

July 1, 2029 104,778,095

January 1, 2045 108,267,915

January 1, 2030 105,314,910

July 1, 2045 108,269,056

July 1, 2030 105,772,876

January 1, 2046 108,269,828

January 1, 2031 106,163,184

July 1, 2046 108,270,303

July 1, 2031 106,495,474

January 1, 2047 108,270,541

January 1, 2032 106,778,044

July 1, 2047 108,270,597

July 1, 2032 107,018,037

January 1, 2048 108,270,598

1 4825-1964-9091.4

EXHIBIT C

FORM OF BOND

REGISTERED

R-1 $[_________]


RESIDENTIAL FINANCE PROGRAM BOND

ISSUE 2017-1 (Non-AMT)

Interest Rate Dated Date Maturity Date Cusip

[___]% March 30, 2017 [_____]

880461[___]

REGISTERED OWNER: CEDE & CO.

PRINCIPAL SUM: [_________]

TENNESSEE HOUSING DEVELOPMENT AGENCY (hereinafter sometimes called

“THDA”), a body politic and corporate and a political subdivision of the State of Tennessee

(herein called the “State”), created and existing under and by virtue of the laws of the State,

acknowledges itself indebted, and for value received hereby promises to pay to the Registered

Owner (shown above), or registered assigns, the principal sum (shown above), on the maturity

date specified above, and to pay interest on said principal sum to the Registered Owner of this

Bond from the dated date hereof until THDA’s obligation with respect to the payment of said

principal sum shall be discharged, at the rate per annum specified above payable on each

January 1 and July 1 commencing July 1, 2017. The principal of and interest on this Bond are

payable at the designated corporate trust office of U.S. Bank National Association, Nashville,

Tennessee in any coin or currency of the United States of America, which, on the respective

dates of payment thereof shall be legal tender for the payment of public and private debts.

This Bond is one of the bonds of THDA designated “Residential Finance Program

Bonds” (herein called the “Bonds”) authorized to be issued in various series under and pursuant

to the Tennessee Housing Development Agency Act, Sections 13-23-101 et seq., of the

Tennessee Code Annotated, as amended (herein called the “Act”), a resolution of THDA adopted

January 29, 2013, as amended and supplemented by the Bond Finance Committee on April 18,

2013, and entitled “Residential Housing Finance Resolution” (herein called the “General

Resolution”) and a supplemental resolution authorizing each issue. As provided in the General

Resolution, the Bonds may be issued from time to time in one or more series of various principal

2 4825-1964-9091.4

amounts, may bear interest at different rates and subject to the provisions thereof, may otherwise

vary. All Bonds issued and to be issued under the General Resolution are and will be equally

secured by the pledges and covenants made therein, except as otherwise expressly provided or

permitted in the General Resolution.

This bond is one of a series of bonds additionally designated “Issue 2017-1” (herein

called the “Bonds”) issued in the aggregate principal amount of $100,000,000 under the General

Resolution, a resolution of THDA adopted on January 24, 2017, as amended and supplemented

by the Bond Finance Committee on February 22, 2017 (collectively with the General Resolution,

the “Resolutions”). Copies of the Resolutions are on file at the office of THDA in Nashville,

Tennessee and at the principal corporate trust office of U.S. Bank National Association,

Nashville, Tennessee, as trustee under the General Resolution (said trustee under the General

Resolution being called herein the “Trustee”) and reference to the Resolutions and any and all

supplements thereto and modifications and amendments thereof and to the Act is made for a

description of the pledges and covenants securing the Bonds, the nature, extent and manner of

enforcement of such pledges, the rights and remedies of the bearers or registered owners of the

Bonds with respect thereto and the terms and conditions upon which the Bonds have been issued

and may be issued thereunder.

To the extent and in the manner permitted by the terms of the Resolutions, the provisions

of the Resolutions or any resolution amendatory thereof or supplemental thereto may be

modified or amended by THDA with the written consent of the holders of at least two-thirds in

principal amount of the Bonds then outstanding, and, in case less than all of the several series of

Bonds would be affected thereby, with such consent of the holders of at least two-thirds in

principal amount of the Bonds of each series so affected then outstanding. If such modification

or amendment will by its terms not take effect so long as any Bonds of any specified like series

and maturity remain outstanding, however, the consent of the holders of such Bonds shall not be

required. In addition, certain other modifications or amendments to the Resolutions can be made

which are not contrary to or inconsistent with the Resolutions without the consent of the

Bondholders.

The holder of this Bond shall have no right to enforce the provisions of the Resolutions,

to institute actions to enforce the provisions of the Resolutions or to institute, appear in or defend

any suit or other proceeding with respect thereto, except as provided in the General Resolution.

In certain events, on the conditions, in the manner and with the effect set forth in the General

Resolution, the principal of all the Bonds issued thereunder and then outstanding, together with

accrued interest thereon, may become or may be declared due and payable before the maturity

thereof.

This Bond is transferable, as provided in the Resolutions, only upon the books of THDA

kept for that purpose at the office of the Trustee by the registered owner hereof in person or by

such owner’s attorney duly authorized in writing, upon surrender of this Bond together with a

written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or

such owner’s attorney duly authorized in writing, and thereupon a new registered Bond or Bonds

in the same aggregate principal amount and of the same subseries and maturity shall be issued to

the transferee in exchange therefor as provided in the General Resolution and upon the payment

of the charges, if any, therein prescribed. THDA and the Trustee may treat and consider the

3 4825-1964-9091.4

person in whose name this Bond is registered as the absolute owner hereof for the purpose of

receiving payment of, or on account of, the principal or redemption price, if any, hereof and

interest due hereon and for all other purposes whatsoever.

This Bond is a special limited obligation of THDA payable solely from the revenues and

assets pledged therefor pursuant to the General Resolution.

The Bonds are issued as fully registered bonds in the denomination of $5,000 or any

integral multiple thereof.

The Bonds are subject to optional, mandatory and sinking fund redemption as described

in the Resolutions.

This Bond does not constitute a debt, liability or other obligation of the State or any

political subdivision thereof other than THDA and neither the State nor any political subdivision

thereof shall be obligated to pay the principal of the Bonds or the interest thereon. Neither the

faith and credit nor the taxing power of the State or of any political subdivision thereof is

pledged to the payment of the principal of or interest on the Bonds.

This Bond shall not be valid or become obligatory for any other purpose or be entitled to

any security or benefit under the Resolutions until the Certificate of Authentication hereon shall

have been signed by the Trustee.

The Act provides that neither the members of THDA nor any person executing this Bond

shall be liable personally hereon or shall be subject to any personal liability or accountability by

reason of its execution.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and

things required by the Constitution or statutes of the State and the Resolutions to exist, to have

happened or to have been performed precedent to or in the issuance of this Bond, exist, have

happened and have been performed in due time, form and manner as required by law and that the

issuance of the Bonds, together with all other indebtedness, of THDA, is within every debt and

other limit prescribed by law.

[Remainder of page intentionally left blank]

4 4825-1964-9091.4

IN WITNESS WHEREOF, TENNESSEE HOUSING DEVELOPMENT AGENCY has

caused this Bond to be executed in its name by the manual or facsimile signature of its Chairman

and its corporate seal (or a facsimile thereof) to be affixed, imprinted, engraved or otherwise

reproduced hereon and attested by the manual or facsimile signature of its Executive Director, all

as of the dated date shown above.

TENNESSEE HOUSING DEVELOPMENT

AGENCY

By

Brian Bills

Chairman

[SEAL]

Attest:

By

Ralph M. Perrey

Executive Director

5 4825-1964-9091.4

CERTIFICATE OF AUTHENTICATION

This bond is one of the bonds described in the within-mentioned Resolutions and is one

of the Residential Finance Program Bonds, Issue 2017-1 (Non-AMT) of the Tennessee Housing

Development Agency.

U.S. BANK NATIONAL ASSOCIATION, as

Trustee

By

Authorized Signatory

Dated: March 30, 2017

6 4825-1964-9091.4

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the within Bond,

shall be construed as though they were written out in full according to applicable laws or

regulations.

TEN COM - as tenants in common

TEN ENT - as tenants by the entireties

JT TEN - as joint tenants with the

right of survivorship and

not as tenants in common

UNIFORM GIFT MIN ACT - Custodian

(Cust) (Minor)

under Uniform Gifts to Minors

Act

(State)

Additional Abbreviations may also be used though

not in the above list

ASSIGNMENT

For value received, the undersigned hereby sells, assigns and transfers unto

the within Bond and all rights thereunder, and hereby irrevocably constitutes and

appoints , attorney to transfer the said Bond on the bond register, with full power

of substitution in the premises.

Dated:

Social Security Number or

Employer Identification

Number of Transferred:

Signature guaranteed:

NOTICE: The assignor’s signature to this Assignment must correspond with the name as it

appears on the face of the within Bond in every particular without alteration or any change

whatever.

THDA Issue 2017-1 ATTACHMENT 4

State Form CT-0253

13. OFFICIAL STATEMENT:

May Be Viewed On The Investors Webpage at THDA’s Website At THDA.org

https://thda.org/

Bill Haslam Governor

Tennessee Housing Development Agency Andrew Jackson Building, Third Floor


MEMORANDUM

DATE:

TO:

FROM:

SUBJECT:

May 10, 2017

THDA Board of Directors t\

Lynn E. Miller I fiJ\ Chief Legal Coun~~

Schedule of Financing for Fiscal Year 2017-2018

Ralph M. Perrey Executive Director

The attached Schedule of Financing is required by Tennessee Code Annotated Section 13-23-120(e)(l). The statutory language directs THDA to submit a Schedule of Financing to the State Funding Board showing the financings THDA proposes during the fiscal year. While the preparation of a Schedule of Financing is required, THDA is not required to carry out its financings precisely as shown on the attached Schedule. The attached Schedule is THDA's best estimate with respect to the financings for the upcoming fiscal year.

Both the Bond Finance Committee and the Board will be asked to review and approve this Schedule of Financing. Assuming such approval occurs, the Schedule will be forwarded to the State Funding Board for their consideration.

LEM/ds

Attachment

THDA.org- (615) 815-2200- Toll Free: 800-228-THDA


SCHEDULE OF FINANCING FISCAL YEAR 2017-2018

SUMMARY The Tennessee Housing Development Agency (“THDA”) is required, under Tennessee Code Annotated Section 13-23-120(e)(1), to submit a schedule to the State Funding Board showing financings proposed for the fiscal year. The proposed schedule for fiscal year 2017-2018 is attached.

Total amount of bonds or notes reflected on Schedule of Financing for Fiscal Year 2017-2018: $ 410,000,000

Total amount of bonds reflected on schedule, designed to produce proceeds for mortgage loans: $ 357,895,000

Total amount of bonds or notes reflected on schedule related to refunding (not expected to produce proceeds for mortgage loans this fiscal year): $ 52,105,000

2


SCHEDULE OF FINANCING FISCAL YEAR 2017-2018

ISSUE 2017-3 - RESIDENTIAL FINANCE PROGRAM BONDS –NEW VOLUME CAP/REFUNDING September 2017

Sources of Funds

Proceeds of the Issue $ 155,000,000

Uses of Funds

To Purchase Mortgage Loans or Refund Outstanding Bonds $ 155,000,000

Bond Reserve Funds ) Underwriting Fee/Bond Discount ) $ THDA contribution, or no more than 1% of Capitalized Interest ) bond proceeds, or a combination thereof Cost of Issuance )

ISSUE 2018-1 - RESIDENTIAL FINANCE PROGRAM BONDS –NEW VOLUME CAP February 2018

Sources of Funds


Uses of Funds



3

ISSUE 2018-2 - RESIDENTIAL FINANCE BONDS –NEW VOLUME CAP/REFUNDING June 2018

Sources of Funds


Uses of Funds



Single Family Bonds Sold in FY 2016-2017

$ 125,000,000 Issue 2016-2 Residential Finance Program Bonds, Dated October 18, 2016

$ 62,000,000 Issue 2016-3 Residential Finance Program Bonds, Dated November 17, 2016

$ 100,000,000 Issue 2017-1 Residential Finance Program Bonds, Dated March 30, 2017

$ 175,000,000 Issue 2017-2 Residential Finance Program Bonds, Dated June 27, 2017

TOTAL $ 462,000,000 (includes approximately $109,615,000 in refundings) Multifamily Bonds Sold in FY 2015-2016 $ 0 Volume Cap Used by Local Issuers For Multi-Family Housing in 2016 $ 165,873,000 From THDA’s 2016 Volume Cap Allocation Volume Cap Available to Local Issuers For Multi-Family Housing in 2017 $ 210,000,000 From THDA’s 2017 Volume Cap Allocation

4

ASSUMPTIONS

1. A bond issue may include any structure authorized by the Board and approved by the Bond Finance Committee, including, without limitation, convertible option bonds, short term notes, variable rate debt, taxable debt, planned amortization class bonds.

2. Dates of bond issues are based on estimated absorption of available funds and expected need for additional funds for three to four months, subject to the actual rate at which mortgage loans are currently being purchased.

3. THDA anticipates taking the maximum spread allowed under federal law for each bond issue, which is 112 basis points. The maximum spread could, however, be reduced based on program requirements at the time of sale. Interest rates for THDA loans could be further subsidized.

4. THDA anticipates future bonds will be issued under the 2013 General Resolution to continue to reduce the moral obligation of the state for THDA bonds.

5. The volume cap assumption is that 35% of the annual total tax-exempt bond authority amount available in Tennessee is made available to THDA at the beginning of each calendar year. This is the allocation to THDA for all tax-exempt housing bond issuance in the state in the current Department of Economic and Community Development plan. For bond issues in calendar year 2017, volume cap carried forward from 2014 will be used. THDA currently has $624,523,000 in 2014 carried forward volume cap available. For bond issues in calendar year 2018, volume cap THDA carried forward from 2015 will be used. THDA currently has $536,842,000 in 2015 carried forward volume cap available. Unused 2014 volume cap will be made available for the THDA Mortgage Credit Certificate Program by making the required elections on or before December 31, 2017.

6. A THDA contribution may be made with each bond issue as needed to over-collateralize the bond issue for the benefit of THDA borrowers, to fund required reserves, to pay cost of issuance and to ensure that the maximum amount of bond proceeds is used to fund mortgage loans. The amount and source of the THDA contribution is determined at the time it is needed. The amount of the contribution, if needed, is based on the structure of the bond issues, an analysis of debt service requirements of the general resolution under which the bonds are issued, the fee paid to underwriters and an estimate of other costs of issuance expected to be incurred. The source of such THDA contribution is assets available for such purpose under the 2013 General Resolution, 1985 General Resolution or the 2009 General Resolution.

Not Available At This Time

Bond Finance Committee Agenda Item No.

6. Bond Counsel Selection

The memo regarding this item will be provided at the Committee meeting.

Tennessee Housing l)evelopment AgencyAndrew Jackson Building, Third Floor


Bill HaslamGovernor


MEMORANDUM

DATE: I|l4ay 10,2017

TO: THDA Board of Directors

FROM: Lynn E. Miller, Chief Legal Counse[ffiBruce Balcom, Assistant Chief Legal Coun "Ø

SUBJECT: THDA Public Records Policy (the "Policy")

Although THDA staff follows a wriffen public records policy originally developed in 2008, changes made

to the T"rrn"sr"" public records law in 2016 require that THDA establish a written public records policy

that is adopted by the THDA Board of Directors. The Policy proposed by staff to meet this statutory

requirement is attached.

This Policy was developed using the suggested policy developed by the State of Tennessee Comptroller ofthe Treasury Offrce of the Open Records Counsel with modifications designed to tailor the policy

specifically to THDA.

The 2016 statutory changes require that this policy be in place no later than July 1,2017 . Consequently,

staff recommends that the attached policy be adopted at the May 23,2017, THDA Board meeting.

LEM/ds

Attachment

THDA.ore - (615) 815-2200 - Toll Free: 800-228-THDA

of 5

PUBLIC RECORDS POLICY FOR


Pursuant to Tenn. Code Ann. § 10-7-503(g), the following Public Records Policy for Tennessee Housing Development Agency (“THDA”) is hereby adopted to provide economical and efficient access to public records as provided under the Tennessee Public Records Act (“TPRA”) in Tenn. Code Ann. § 10-7-501, et seq.

The TPRA provides that all state, county and municipal records shall, at all times during business hours, be open for personal inspection by any citizen of this state, and those in charge of the records shall not refuse such right of inspection to any citizen, unless otherwise provided by state law. See Tenn. Code Ann. § 10-7-503(a)(2)(A). Accordingly, the public records of THDA are presumed to be open for inspection unless otherwise provided by law.

Personnel of THDA, through the THDA Public Records Request Coordinator identified in Section III, A.3 below, shall timely and efficiently provide access and assistance to persons requesting to view or receive copies of public records. No provisions of this Policy shall be used to hinder access to open public records. However, the integrity and organization of public records, as well as the efficient and safe operation of THDA, shall be protected as provided by current law. Concerns about this Policy should be addressed to the Public Records Request Coordinator for THDA or to the Tennessee Office of Open Records Counsel (“OORC”).

This Policy is posted online at www.thda.org. This Policy shall be applied consistently throughout THDA. This Policy shall be reviewed every two years.

I. Definitions:

A. Records Custodian (“RC”): The office, official or employee lawfully responsible for the direct custody and care of a public record. See Tenn. Code Ann. § 10-7-503(a)(1)(C). The Records Custodian is not necessarily the original preparer or receiver of the record.

B. Public Records: All documents, papers, letters, maps, books, photographs, microfilms, electronic data processing files and output, films, sound recordings, or other material, regardless of physical form or characteristics, made or received pursuant to law or ordinance or in connection with the transaction of official business by any governmental agency. See Tenn. Code Ann. § 10-7-503(a)(1)(A).

C. Public Records Request Coordinator (“PRRC”): The individual, or individuals, designated in Section III, A.3 of this Policy who has, or have, the responsibility to ensure public record requests are routed to the appropriate Records Custodian and are fulfilled in accordance with the TPRA. See Tenn. Code Ann. § 10-7-503(a)(1)(B). The PRRC may also be an RC.

D. Requestor: A person seeking access to a public record, whether it is for inspection or duplication.

II. Requesting Access to Public Records

A. Public record requests shall be made to the PRRC or his/her designee in order to ensure public record requests are routed to the appropriate RC and fulfilled in a timely manner.

B. Requests for inspection may be made orally or in writing using the attached Public Records Request Form to the attention of the PRRC and at the address identified in Section III, A.4 of this Policy. The PRRC should request a mailing or email address from the Requestor for providing any written communication required under the TPRA. The PRRC shall complete the form if a person is making an oral request, and

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shall request a phone number and mailing address or email address for providing written communication required under the TPRA.

C. Requests for copies, or requests for inspection and copies, shall be made in writing using the attached Public Records Request Form, signed by the Requestor, to the attention of the PRRC and at the address identified in Section III, A.4 of this Policy. THDA will accept completed forms submitted as an attachment via email.

D. Proof of Tennessee citizenship by presentation of a valid Tennessee driver’s license (or alternative acceptable form of ID) is required as a condition to inspect or receive copies of public records.

E. As provided in Tenn. Code Ann. § 10-7-503(a)(4), THDA shall not be required to sort through files to compile information or to create or recreate a record that does not exist to respond to a request.

III. Responding to Public Records Requests

A. Public Record Request Coordinator

1. The PRRC shall review the Public Record Request Form and make an initial determination of the following:

a. If the Requestor provided evidence of Tennessee citizenship;

b. If the records requested are described with sufficient specificity to identify them; and

c. If THDA is the custodian of the records.

2. The PRRC shall acknowledge receipt of the request and take any of the following appropriate action(s):

a. Advise the Requestor of this Policy and the elections made regarding:

i. Proof of Tennessee citizenship;

ii. Form(s) required for copies;

iii. Fees (and labor threshold and waivers, if applicable).

b. If appropriate, deny the request in writing, providing the appropriate ground such as one of the following:

i. The Requestor is not, or has not, presented evidence of being a Tennessee citizen.

ii. The request lacks specificity.

iii. An exemption makes the record not subject to disclosure under the TPRA.

iv. THDA is not the custodian of the requested records.

v. The records do not exist.

c. If the PRRC denies a public record request, he or she shall deny the request in writing as provided in Section III.A.2.b using the Public Records Request Response Form.

d. If appropriate, the PRRC shall contact the Requestor to see if the request can be narrowed.

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e. If not practicable to promptly provide requested records because additional time is necessary to determine whether the requested records exist; to search for, retrieve, or otherwise gain access to records; to determine whether the records are open; to redact records; or for other similar reasons, then the PRRC shall, within seven (7) business days from the receipt of the request, send the Requestor a completed Public Records Request Response Form.

f. If the PRRC reasonably determines production of records should be segmented because the records request is for a large volume of records, or additional time is necessary to prepare the records for access, the PRRC shall use the Public Records Request Response Form to notify the Requestor that production of the records will be in segments and that a records production schedule will be provided as expeditiously as practicable.

g. If the PRRC subsequently discovers records responsive to a records request were omitted, the PRRC should contact the Requestor concerning the omission and produce the records as quickly as possible.

h. If appropriate, direct the Requestor to the location on the THDA website at www.thda.org where relevant materials have already been made available to the public, rather than provide such materials as otherwise specified in this Policy.

3. The PRRC shall also:

a. Work with the RC to assure all records responsive to the request are gathered.

b. Serve as liaison between the Requestor and RC, providing all responses to records requests, including providing copies, and working with THDA staff to provide access to records for inspection.

4. The THDA designated PRRC is:

Bruce Balcom or Charity Miles Williams Andrew Jackson Building, Third Floor 502 Deaderick Street Nashville, Tennessee 37243 615-815-2200

B. Records Custodian

1. Upon receiving a public records request, an RC shall promptly make the requested public records available to the PRRC to assure compliance with TPRA.

2. Each division within THDA shall designate an RC and shall provide that information to the PRRC.

3. Any THDA staff member who receives a request to inspect or a request for copies of THDA records shall promptly relay that request to their RC or to the PRRC.

C. Redaction

1. If a record contains confidential information or information that is not open for public inspection, the PRRC shall prepare a redacted copy prior to providing access. If questions arise concerning redaction, the PRRC shall coordinate with counsel or other appropriate parties regarding review and redaction of records. The PRRC and the RC may also consult with the OORC or with the Office of the Attorney General and Reporter.

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2. Whenever a redacted record is provided, the PRRC should provide the Requestor with the basis for redaction, if requested by the Requestor. The basis given for redaction shall be general in nature and not disclose confidential information, including without limitation, personally identifiable information.

IV. Inspection of Records

A. There shall be no charge for inspection of open public records.

B. The location for inspection of records within the offices of THDA shall be determined by the PRRC. The inspection of the public records shall be supervised by appropriate THDA staff.

C. Under reasonable circumstances, the PRRC shall require an appointment for inspection made in advance or may require inspection of records at an alternate location.

V. Copies of Records

A. The PRRC shall promptly respond to a public record request for copies in the most economic and efficient manner practicable. The RC and staff for each division shall assist the PRRC in copying the public records.

B. Copies will be available for pickup at a location specified by the PRRC.

C. Upon payment for postage, copies will be delivered to the Requestor’s home or business address by the United States Postal Service. Additional permitted means of delivery are UPS and FedEx, pre-paid label required.

D. A Requestor is allowed to make copies of records with personal equipment.

VI. Fees and Charges and Procedures for Billing and Payment

A. PRRC shall provide Requestors with an itemized estimate of the charges on the attached Public Records Cost Estimate Form prior to producing copies of records and shall require pre-payment of such charges before producing requested records.

B. All time spent locating, retrieving, reviewing, redacting, and reproducing records shall be recorded by THDA staff and reported to the PRRC. The PRRC shall determine the appropriate labor charges based upon the base hourly salary of staff involved in providing the copies. Labor costs shall exclude the first hour spent fulfilling the request. Should the time required to fulfill the request exceed one hour, the hour excluded shall be the hour that represents the highest base salary. Charges for labor shall only be required when copies are requested. A Requestor may always request paper copies, however, THDA shall determine whether electronic copies are available and shall offer the Requestor that option, if available.

C. Fees and charges for copies are as follows:

1. $0.15 per page for letter- and legal-size black and white copies.

2. $0.50 per page for letter- and legal-size color copies.

3. Labor when time exceeds one (1) hour.

4. If an outside vendor is used, the actual costs assessed by the vendor.

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5. Any additional costs in excess of the charges identified in this Policy which are directly related to the copying of the public records.

D. No duplication costs will be charged for requests for less than one hundred (100) pages of black and white copies.

E. Payment shall be made in cash, by attorney check, by cashier’s check, or by money order payable to THDA and presented to the PRRC.

F. Payment in advance is required before copies will be made.

G. Aggregation of Frequent and Multiple Requests

1. THDA will aggregate record requests in accordance with the Frequent and Multiple Request Policy promulgated by the OORC when more than four (4) requests are received within a calendar month (either from a single individual or a group of individuals deemed working in concert).

2. If aggregating requests, the following shall apply:

a. Records requests will be aggregated at the agency level.

b. The PRRC shall determine whether more than four (4) requests are received within a calendar month from a single individual or a group of individuals deemed working in concert. The PRRC shall inform the individuals that they have been deemed to be working in concert and that they have the right to appeal the decision to the OORC.

c. Routinely released and readily accessible records excluded from aggregation include, but are not limited to, records made available to the public on THDA’s website, at www.thda.org.

VII. Amendments and Adoption

A. This Policy may be amended at any time at the discretion of the THDA Board of Directors. Should this Policy conflict with subsequent changes to the TPRA, this Policy shall be modified only to the extent required to comply with the TPRA, as amended.

B. This Policy was considered by the Bond Finance Committee at its meeting on May [17 or 18], 2017, and approved by the Board at its meeting on May 23, 2017.

(05.09.2017)

PUBLIC RECORDS REQUEST FORM

The Tennessee Public Records Act (TPRA) grants Tennessee citizens the right to access open public records that exist at the time of the request. The TPRA does not require Records Custodians to compile information or create or recreate records that do not exist.

To: Tennessee Housing Development Agency, 502 Deaderick Street, 3rd Floor, Nashville, TN 37243-0200, Attn: Charity Williams.

From: Requestor’s Name and Contact Information for any TPRA required written response:

Name: ___________________________________________________________________________

Address: _________________________________________________________________________

Phone No: ________________________________________________________________________

Email Address: ___________________________________________________________________

Is the Requestor a Tennessee citizen? Yes No If yes, provide proof.

Request: Inspection (The TPRA does not permit fees or require a written request for inspection only.)

Copy/Duplication

If costs for copies are assessed, the Requestor has a right to receive an estimate. Do you wish to waive your right to an estimate and agree to pay copying and duplication costs in an amount not to exceed $_____________? If so, initial here: ___________.

Delivery preference: On-Site Pick-Up USPS First-Class Mail Electronic Other: _____________________

Records Requested: Provide a detailed description of the record(s) requested, including: (1) type of record; (2) timeframe or dates for the records sought; and (3) subject matter or key words related to the records. Under the TPRA, record requests must be sufficiently detailed to enable a governmental entity to identify the specific records sought. As such, your record request must provide enough detail to enable the Records Custodian responding to the request to identify the specific records you are seeking.

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________ ________________________________________ ________________________________________ Signature of Requestor Signature of Public Records Request Coordinator and Date Submitted: _____________________ and Date Received: ________________________

_________________________ 1If all requested records do not have the same response, so indicate. (05.09.2017)

PUBLIC RECORD REQUEST RESPONSE FORM

Tennessee Housing Development Agency Andrew Jackson Building, Third Floor

502 Deaderick Street Nashville, Tennessee 37243

[Date]

[Requestor’s Name and Contact Information]:

In response to your records request received on [Date Request Received], our office is taking the action(s)1 indicated below:

☐ The public record(s) responsive to your request will be made available for inspection:

Location: _______________________________________________________________________________

Date & Time: _______________________________

☐ Copies of public record(s) responsive to your request are:

☐ Attached;

☐ Available for pickup at the following location: __________________________________________________________________________________; or

☐ Being delivered via: ☐ USPS First-Class Mail ☐ Electronically ☐ Other: ___________________

☐ Your request is denied on the following grounds:

☐ Your request was not sufficiently detailed to enable identification of the specific requested record(s). Please provide additional information to identify the requested records(s).

☐ No such record(s) exists or this office does not maintain record(s) responsive to your request.

☐ No proof of Tennessee citizenship was presented with your request. Your request will be reconsidered upon presentation of an adequate form of identification.

☐ You are not a Tennessee citizen.

☐ You have not paid the estimated copying/production fees.

☐ The following state, federal, or other applicable law prohibits disclosure of the requested records: _____________________________________________________________________________________

☐ It is not practicable for the records you requested to be made promptly available for inspection and/or copying because:

☐ It has not yet been determined that records responsive to your request exist; or

☐ This office is still in the process of retrieving, reviewing, and/or redacting the requested records.

Public Records Response Form Page 2

The time reasonably necessary to produce the record(s) or information and/or to make a determination of a proper response to your request is: _____________________________________________________________________.

If you have any additional questions regarding your record request, please contact Public Records Request Coordinator at the address above.

Sincerely, Public Record Request Coordinator

(05.09.2017)

PUBLIC RECORDS REQUEST COST ESTIMATE FORM

Name of Requestor: __________________________________________________________________________ 1. Costs:

a. $15.00 Minimum threshold cost for copies - (fees waived if 100 copies or less)

b. Estimated number of black-and-white pages to be copied: __________ @ 15¢ per page = $__________

c. Estimated number of color pages to be copied: __________ @ 50¢ per page = $__________

d. $_________ Total cost of copies

e. Labor cost to produce the copies: Labor at $_______/hour for _______ hour(s)

Labor at $_______/hour for _______ hour(s)

Labor at $_______/hour for _______ hour(s)

f. $_________ Estimate of labor costs to produce the copies: (for time exceeding 1 hour)

g. $_________ Additional costs directly related to the copying or production of records:

U.S.P.S. Other: FedEx/UPS

h. $_________ Estimate of total cost provided to requestor

In person U.S.P.S. Phone Email Other: ____________________

2. Form, Amount & Date of Payment:

a. Form of payment: Cash Cashier’s Check Money Order

Attorney Check Other: ____________________________________

b. Amount of payment: $______________________

c. Date of payment: _______________________

3. Receipt of Delivery of Records:

_____________________________________________________ _______________________ Signature of Requestor Accepting Receipt of Records Date Records Received

_____________________________________________________ _______________________ Signature of Records Custodian, or Designee, Delivering Records Date Records Delivered

Tennessee Housing l)evelopment AgencyAndrew Jackson Building, Third Floor


Bill HaslamGovernor


MEMORANDUMDATE: May 10,2017

TO: Bond Finance CommitteeTHDA Board of Directors

FR.M: LîïJr?-Hi'¿:,",þftt

SUBJECT: Revisions to the Debt Management Policy

Section XXIII of the current THDA Debt Management Policy (the "Policy") requires annual review of the

Policy at the same time the annual Schedule of Financing is considered. To comply with this requirement,

THDA staff and staff of the Office of State and Local Finance reviewed the current Policy and recommend

the changes as shown on the attached version of the Policy.

The recommended changes address THDA taxable bond issues, if any.

Staff recommends that the Bond Finance Committee recommend these changes to the Board. Staff also

recommends that the Board approve these changes.

LEMids

Attachment

THDA.orq - (61Ð 8f 5-2200 - Toll Free: 800-228-THDA

Tennessee Housing Development Agency Debt Management Policy

Table of Contents

I. Background ...................................................................................................................... 1

II. Purpose ............................................................................................................................. 1

III. Policy ................................................................................................................................ 1

IV. Long-Term Financial Objectives ..................................................................................... 2

V. Long-Range Financial Planning ....................................................................................... 2

VI. Finance Team ................................................................................................................... 2

VII. Conflicts ........................................................................................................................... 4

VIII. Statutory Debt Limit ......................................................................................................... 4

IX. Schedule of Financing ...................................................................................................... 4

X. Bond Issue Planning, Method of Sale, Structuring, and Execution ................................. 4

XI. Investment of Proceeds .................................................................................................... 6

XII. Debt Issuance Review ...................................................................................................... 6

XIII. Initial and On-going Federal Compliance ........................................................................ 6

XIV. Short-Term Financings ..................................................................................................... 6

XV. Types of Bonds ................................................................................................................ 7

XVI. Refundings ....................................................................................................................... 9

XVII. Redemptions ..................................................................................................................... 9

XVIII. Transparency .................................................................................................................... 9

XIX. Interest Rate and Forward Purchase Agreements ........................................................... 10

XX. Conduit Debt .................................................................................................................. 10

XXI. Variable Rate Debt ......................................................................................................... 10

XXII. Taxable Debt .................................................................................................................. 10

XXIII. State Moral Obligation Pledge ....................................................................................... 10

XXIV. Adoption and Amendment ............................................................................................. 10


__________________

Debt Management Policy

__________________

Approved November 29, 2011 Amended July 29, 2014, May 24, 2016, May 23, 2017

1

Tennessee Housing Development Agency Debt Management Policy

Approved November 29, 2011 Amended July 29, 2014, May 24, 2016, May 23, 2017

I. Background

The Tennessee Housing Development Agency (“THDA”) is a body, politic and corporate, and a political subdivision and instrumentality of the State of Tennessee (“State”). THDA was established under TCA Section 13-23-101 et seq. for the purpose, among other things, of raising capital through the issuance of its bonds and notes to assure a steady flow of production of new housing units for lower and moderate income persons and families. THDA’s mission is to create safe, sound, and affordable housing opportunities across the State by providing competitive interest rates on a variety of mortgage loan products approved by THDA’s Board of Directors (“Board”). THDA’s mortgage loans, resulting revenues, and any other assets under THDA’s bond resolutions are pledged assets for the payment of principal and interest on THDA bonds.

The Bond Finance Committee of the Board (“BFC”) is responsible for, among other things, overseeing THDA debt issuance. In this capacity, the BFC approves a Plan of Financing for each THDA bond issue and recommends the proposed debt issuance transaction to the Board for consideration. Upon the Board’s authorization, the sale of the debt proceeds under BFC oversight. The BFC is also authorized to approve the pricing of a debt issuance on behalf of THDA. The Secretary of the BFC, subject to this Debt Management Policy (“Policy”) and other policies of the Board and the BFC, is responsible for the execution of all matters relating to the issuance and servicing of the debt of THDA.

THDA debt is payable solely from the revenues or assets of THDA available therefore and pledged to the bondholders under the terms of THDA’s general bond resolutions. THDA debt is not a debt, liability, or obligation of the State or of any other political subdivision of the State. THDA debt is not secured by a pledge of the full faith and credit of the State or of any other political subdivision of the State.

II. Purpose

In December 2010, the Tennessee State Funding Board adopted a statement on debt management directing governmental entities in Tennessee to draft and adopt their own debt management policies. All public entities incurring or issuing debt, including THDA, are required to adopt a debt management policy by January 1, 2012. This Policy provides clear objectives for THDA’s debt transactions and transparency as to what is being considered, including the associated cost and risks. It also establishes requirements to assist in avoiding conflicts of interest.

III. Policy

THDA’s goal is to raise capital to maintain a steadily available supply of funds to finance its mortgage loan programs at cost levels that provide competitive, fixed interest rate mortgage loans that benefit low and moderate income families, while maintaining or improving THDA’s overall financial strength and flexibility, managing associated risks and complying with all applicable federal and state laws.

To achieve this goal, THDA will:

1. Maintain a conservative approach relative to debt financing and financial decisions.

2

2. Maintain at least a five year Strategic Financial Plan, with at least annual updates, inclusive of the general financial objectives as set forth in this Policy, which may change in response to economic and other factors.

3. Maintain a debt management policy that provides for optimally-structured financing options, giving consideration to associated risks of debt structure components and current market conditions, while enabling broad distribution capabilities, both to institutional and retail investors.

4. Maintain compliance with requirements of the Internal Revenue Code of 1986, as amended (the “Code”), as applicable to THDA’s bonds and mortgage loans financed with the proceeds of such bonds.

IV. Long-Term Financial Objectives

1. Maintain financial self-sufficiency.

2. Effectively balance the use of financial resources to fund mortgage loans and other initiatives that fulfill THDA’s statutory purpose and mission without compromising THDA’s financial strength.

3. Maintain or improve the current credit ratings for each THDA bond resolution.

4. Maintain financial flexibility.

5. Whenever possible, maximize yield spread between mortgage loan interest rates and the cost of debt to provide program and operational sustainability and resources for other investments in affordable housing.

6. Effectively balance financial creativity and risks.

7. Whenever possible, seek to reduce the extent of the State’s moral obligation pledge with respect to THDA debt.

V. Long-Range Financial Planning

THDA will maintain a five year Strategic Financial Plan (Plan) to be used as a liquidity analysis tool for decision-making purposes. At a minimum, this Plan will incorporate projections and assumptions for mortgage loan production, resources (including, but not limited to volume cap, tax-exempt debt, and taxable debt), costs and expenses of anticipated debt issuance, other housing program and operational liquidity needs, and liquidity and balance sheet analyses to assess the long-term financial position of THDA. The Plan will be developed and maintained by THDA in cooperation with the Financial Advisor and the Office of State and Local Finance and will incorporate the financial objectives listed in this Policy. THDA anticipates at least annual updates to the Plan.

VI. Finance Team

THDA will maintain a team of finance professionals consisting of internal and external experts for the purpose of executing and maintaining debt financings and other financings as may be approved by the Board. The team will include THDA staff (including at least the THDA Executive Director, Chief Legal Counsel and Chief Financial Officer), underwriters (when appropriate), Bond Counsel, underwriter’s counsel (when appropriate), Financial Advisor, and Office of State and Local Finance staff.

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All non-employee professionals engaged in the THDA debt issuance process shall clearly disclose all compensation and consideration received related to services provided in the THDA debt issuance process. This includes “soft” costs or compensations in lieu of direct payments.

The time period over which Bond Counsel, Financial Advisor, and potential underwriters serve shall end in staggered fiscal years in order to avoid disruption by either transition or selection processes. Contracts or agreements, if any, shall reflect such terms.

Bond Counsel: THDA shall enter into an engagement letter agreement with each lawyer or law firm representing THDA as bond counsel or tax counsel in a debt transaction. Bond Counsel shall be selected by the BFC pursuant to a Request for Proposal Process primarily weighted towards qualifications and price. Bond Counsel shall serve for a stated period of time. The Bond Counsel team shall include at least one lawyer who is licensed to practice in Tennessee and who is involved in all analysis and opinions regarding the Tennessee Constitution and Tennessee law arising in the course of Bond Counsel’s engagement.

Financial Advisor: THDA shall utilize the services of an independent financial advisor, who is registered with the Securities and Exchange Commission (“SEC”) and the Municipal Securities Rulemaking Board (“MSRB”) as a registered municipal advisor. The Financial Advisor shall enter into a written agreement with the Office of the Comptroller of the Treasury for debt management and transaction services for a stated period of time, however, the Financial Advisor shall have a fiduciary responsibility to THDA. The Financial Advisor shall be selected by the Board pursuant to a Request for Proposal Process primarily weighted towards qualifications and price. The Financial Advisor shall have demonstrated expertise in providing financial advice on housing related debt and financial planning on projects of state housing finance agencies, completely independent of the underwriting of municipal securities by banks and securities dealers.

Whether in a competitive or negotiated sale, a financial advisor shall not bid on, privately place or underwrite a THDA debt issue if it is or has been providing advisory services for the same THDA debt issue.

Underwriter: THDA shall utilize the services of a pool of potential underwriters for a stated period of time for negotiated sales. BFC shall select underwriters pursuant to a Request for Proposal/Request for Qualifications Process primarily weighted toward qualifications. Each underwriter in a negotiated sale shall clearly identify itself in writing e.g., in a response to a request for proposals or in promotional materials provided to THDA as an underwriter and not as a financial advisor from the earliest stages of its relationship with THDA with respect to that issue. Each underwriter must clarify its primary role as a purchaser of securities in an arm’s-length commercial transaction and that it has financial and other interests that differ from those of THDA. In the context of negotiated sales, THDA will evaluate structuring or other proposals only from members of its pool of underwriters. Underwriters may include senior managers (including a bookrunning senior manager), co-managers and selling group members, all as determined by the BFC.

Underwriter’s Counsel: While underwriter’s counsel is part of the financing team in connection with a negotiated bond issuance, such counsel is selected by the bookrunning senior manager with input from the BFC.

Trustee: The BFC shall periodically review and evaluate the performance of the Trustee and report its findings to the Board.

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VII. Conflicts

Professionals involved in a debt transaction hired or compensated by THDA shall disclose to THDA existing client and business relationships between and among the professionals to a transaction (including but not limited to financial advisor, swap advisor, bond counsel, swap counsel, trustee, paying agent, underwriter, counterparty, and remarketing agent), as well as conduit issuers, sponsoring organizations and program administrators. This disclosure shall include that information reasonably sufficient to allow THDA to appreciate the significance of the relationships.

Professionals who become involved in the debt transaction as a result of a bid submitted in a widely and publicly advertised competitive sale conducted using an industry standard, electronic bidding platform are not subject to this disclosure. No disclosure is required that would violate any rule or regulation of professional conduct.

VIII. Statutory Debt Limit

THDA shall not issue bonds and notes in an aggregate principal amount that at any one time exceeds the statutory debt limit established in TCA Section 13-23-121. No less than annually, THDA staff shall assess THDA’s potential of reaching this limit within a 24 month period following the assessment. THDA staff shall communicate this assessment to the BFC and Board.

IX. Schedule of Financing

Pursuant to TCA Section 13-23-120(e), THDA shall submit a Schedule of Financing to the State Funding Board, prior to the beginning of each fiscal year of the State. The Schedule of Financing will be THDA’s best estimate of the financings required for the upcoming fiscal year and will contain the required information as set forth in the statute. The Schedule of Financing will contain assumptions as necessary to understand the proposed financings and resources.

X. Bond Issue Planning, Method of Sale, Structuring, and Execution

THDA’s general strategy is to determine the par amount of bonds to be issued based on financing three to four months of mortgage loan production and the availability of refunding opportunities. However, the size and timing of a particular bond issue may vary depending on mortgage loan production levels, other programmatic requirements or current market conditions.

Before a bond issue is authorized, THDA staff will monitor mortgage loan production, available resources, and market conditions and provide such information to Financial Advisor and the Office of State and Local Finance. When it is determined that authorization of a new bond issue is appropriate, whether for a new bond issue or an economic refunding, THDA staff in coordination with the Assistant Secretary of the BFC will prepare all authorizing documentation and circulate such documentation, along with necessary documentation from Bond Counsel and Financial Advisor, to the BFC and the Board. The Financial Advisor will prepare memoranda containing information about market conditions and various recommendations, including method of sale and possible bond issue size. All authorizing documentation and memoranda, including, without limitation, a Plan of Financing which shall specify the expected costs of issuance, capitalized interest, interest rates, redemption terms, and all other items required by TCA Section 13-23-120(e)(4), will be submitted to the Board and BFC. Following approval of a Plan of Financing by the BFC and authorization of a debt issuance by the Board, the BFC will be authorized to proceed with the sale of debt obligations on behalf of THDA.

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Since 2002, THDA debt issuance has occurred via negotiated sale. THDA, however, intends to consider the method of sale for each debt issuance on a case by case basis with consideration of a number of factors, including without limitation, the following factors:

Complexity of the transaction, including whether the debt issuance incorporates structured bond components (such as planned amortization class bonds) and, generally, more complex redemption features.

Including AMT or taxable components.

Complexity of credit features, including multiple collateral pools and detailed loan portfolio histories, performance, and mortgage insurance characteristics.

Importance of retail sales and institutional pre-marketing as part of the marketing plan.

Volatility of bond market and other market conditions.

Degree of investor concern about housing-backed transactions – especially secured by “whole loans.”

Confidence in the rating agencies’ ability to evaluate structured credits.

While the above factors may favor negotiated sales, THDA reserves the right to consider the use of competitive sales at any time on a case by case basis. The determination of method of sale shall rest with the BFC with advice and recommendations from THDA staff, the Office of State and Local Finance staff and the Financial Advisor.

Before pricing, THDA staff and the Office of State and Local Finance staff will consider bond structure options prepared by the Financial Advisor and recommend the bond structure determined to be most beneficial to THDA based on bond yield, programmatic considerations and other financial considerations. The Office of State and Local Finance staff will informally circulate the recommended bond structure to BFC members individually and, with THDA staff and Financial Advisor, address issues or concerns raised. Thereafter, THDA staff, Office of State and Local Finance staff, Bond Counsel and Financial Advisor will carry out the pricing process, either competitive or negotiated, as determined by the BFC.

The Financial Advisor will clearly communicate the benefits and risks of each bond type used in the bond structure options. The THDA staff and the Office of State and Local Finance staff will consult with Financial Advisor, and the bookrunning senior manager for negotiated sales, to determine a pricing strategy designed to yield the best results given the then current market conditions.

For negotiated sales, the pricing will generally be handled by conference calls involving THDA staff, Office of State and Local Finance staff, Financial Advisor, as well as Bond Counsel and underwriters, as appropriate. THDA staff and the Office of State and Local Finance staff, with the advice of Financial Advisor, will have primary responsibility for making pricing determinations to be presented to the BFC for approval. The Financial Advisor will provide THDA staff and the Office of State and Local Finance staff with summary information regarding all pertinent aspects of a financing and will make specific recommendations regarding the acceptance of a pricing. This information, along with all other pertinent pricing documents, will be submitted to the BFC, which shall meet to consider approval of the debt sale. If the pricing is approved by the BFC, the results will be communicated to the Board. In the alternative, the Board may, as specified in Tennessee Code Annotated Section 13-23-120(c) and on a case by case basis, delegate authority to an office of THDA the power to issue bonds or notes and determine all of the final terms and conditions of such bonds or notes based on the recommendations of Financial Advisor, THDA staff and Office of State and Local Finance staff.

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A formal post-sale analysis will be prepared by the Financial Advisor and reviewed with the BFC. The post-sale analysis shall include sufficient information to permit the BFC to judge the performance of the underwriters.

XI. Investment of Proceeds

The proceeds of each THDA bond issue shall be invested as provided in each series resolution applicable to a particular debt issuance, the relevant general resolution under which the debt issuance occurred, applicable state law, and the Tennessee Housing Development Agency Investment Policy dated September 14, 1993, as amended.

XII. Debt Issuance Review

The Financial Advisor will prepare a report in cooperation with THDA staff and the Office of State and Local Finance staff that shows the results of THDA’s debt issuance and the performance of underwriters to be reviewed by the BFC on no less than an annual basis.

XIII. Initial and On-going Federal Compliance

THDA staff will work with Bond Counsel and Financial Advisor to ensure initial bond offerings comply with all applicable federal laws and program requirements. The THDA Executive Director, working with this group will be responsible for continued compliance with such federal laws and program requirements including, among other things, post issuance compliance, arbitrage rules, 10 Year and 32 Year rules, maintenance of records, and continuing disclosure requirements.

Secondary Market Disclosure: THDA is currently disseminating and presently intends to continue to disseminate information relating to its various single-family mortgage revenue bonds in accordance with the quarterly secondary market disclosure project sponsored by the National Council of State Housing Agencies. THDA has filed quarterly reports, beginning with the quarter ending June 30, 1994, with each then nationally recognized municipal securities information repository and currently with the MSRB through its Electronic Municipal Market Access (“EMMA”) system. THDA also expects that its official statements, which contain audited financial information about THDA, with respect to debt issued under the General Residential Finance Program Bond Resolution (“2013 General Resolution”), the General Homeownership Program Bond Resolution (“1985 General Resolution”), and the General Housing Finance Resolution (“2009 General Resolution”) will be filed with the MSRB through its EMMA system if and when debt is so issued. It is the present intent of THDA to continue making voluntary secondary market disclosure as described above.

Continuing Disclosure Undertaking: THDA shall include in each series resolution applicable to a particular debt issuance a continuing disclosure undertaking designed to meet the requirements of SEC Rule 15c2-12 (“Rule”), if and to the extent required by the Rule. Thereafter, THDA shall meet its continuing disclosure undertaking and comply with the Rule. Bond Counsel shall provide necessary guidance regarding requirements to be met and compliance with the Rule.

XIV. Short-Term Financings

Depending on market conditions, the availability of liquidity, or Board-approved housing programs, THDA may borrow funds on a short-term basis from a bank or other financial institution or entity. Before any such undertaking, THDA staff and the Office of State and Local Finance staff, together with Financial Advisor and Bond Counsel, as needed, will consult to determine the feasibility of such short-term borrowings and present to the BFC and Board the benefits, risks, and impact of such short-term borrowings. In connection with short term financings, the Board may establish guidelines pursuant to which the Executive Director may cause THDA to enter into any such short-term borrowing.

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Any such borrowing may be secured by collateral consisting of mortgage loans or other assets of THDA to be specifically pledged thereto, but may not be secured by the general obligation of THDA or be evidenced by a bond or note, unless approved by resolution of the Board. The BFC and Board shall approve the principal amount of such borrowings that may be outstanding at any one time. Tennessee law as set forth in TCA Section 13-23-121 will determine if any short-term borrowings will count against THDA’s statutory debt limit.

XV. Types of Bonds

Pursuant to TCA Section 13-23-115(15), THDA is authorized to borrow money and to enter into debt for its authorized purposes. THDA debt may include bonds or notes which may be tax-exempt or taxable and secured by the general obligation of THDA, by specific revenues of THDA, by any combination thereof, or as may otherwise be provided in TCA Section 13-23-120(b). Under TCA Section 13-23-120(b), THDA may issue such types of bonds or notes as it may determine, including without limitation, the following:

1. Serial Bonds mature in such manner that principal amounts become due and payable on specified dates, usually every 6 or 12 months. Serial Bonds are Bonds of an issue in which some Bonds mature in successive years without interruption. Generally, Serial Bonds comprise the first 8 to 12 years of a bond issue and are sold to private individuals (retail).

2. Term Bonds come due in a single maturity at intervals of greater than one year after the last Serial Bond’s maturity and usually comprise a large part of each particular issue. The Issuer usually agrees to make periodic payments into a sinking fund for mandatory annual or semiannual redemption of a portion of the Term Bonds before maturity or for payment at maturity. A housing Bond issue is generally structured with an intermediate Term Bond maturity around year 20 and a final Term Bond maturity in year 32 of the issue; other Term Bond maturities are often added which are designed at the request of major purchasers.

3. Floating (Variable) Rate Demand (“Lower Floater”) Bonds are Bonds which bear interest at a floating rate, usually set every week by an investment banker (as remarketing agent) at the fair market rate for seven–day–maturity debt. Such Bonds can normally be tendered by the owner (strictly at its option) to a tender agent (usually the trustee) at par after giving seven days’ notice; the Bonds are then remarketed to new investors by the investment banker, as remarketing agent. A bank typically agrees to buy tendered Bonds if they cannot be otherwise sold to new investors. These Floating Rate Demand Bonds are usually sold to money market funds.

4. Current Interest Bonds (“CIBs”) are the most common type of housing Bonds. Interest is paid every six months until the Bond matures or is retired early from optional or mandatory redemption.

5. Zero Coupon Bonds

a. Capital Appreciation Bonds (“CABs”). Payment of the semiannual interest is deferred until maturity or redemption with Capital Appreciation Bonds. The payment made at maturity or on the redemption date consists of principal and compounded semiannual interest. CABs are sold to investors at a large discount and accrete to par value at maturity.

b. CAB Converters. Interest on CAB Converters is deferred and semiannually until the Conversion Date—the date when the Bond converts to a current interest paying Bond and thereafter interest is earned and paid semiannually on the accreted value.

c. CABs and CAB Converters both reduce interest cost by enabling the issue to be structured with lower interest rate Serial Bonds in the early years. Zero Coupon Bonds are sometimes priced at higher yields than Current Interest Bonds of the same maturity and generally require higher fees to bond salesmen to be effectively marketed.

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6. Original Issue Premium Bonds are fixed rate Bonds (sometimes PAC Bonds) sold at a price greater than 100% of their par value (the “premium”). The interest rates on Premium Bonds are somewhat higher than the rates on comparable Bonds sold at 100% of their par value, but when the premium is taken into account, the effective interest cost to the Issuer is less than the interest cost on a traditional Bond.

7. Original Issue Discount (“OID”) Bonds are Term Bonds sold at a price less than 100% of their initial par value. They are sold at a slightly lower yield and are used as a marketing device to institutional investors. OIDs sometimes require an Issuer contribution to the cash flows. They are rarely used for single–family Bonds due to the risk of early redemption at par from unexpended proceeds and prepayments.

8. Super Sinker Bonds are term Bonds which are redeemed before any other maturity from mortgage prepayments and, occasionally, excess revenues. While a super sinker will have a stated maturity of 10 to 20 years, the average life of a super sinker at 100% of the FHA mortgage prepayment experience will be approximately three to five years. A super sinker provides other Bonds in the issue with limited call protection because the super sinker is redeemed first. Super sinkers are priced at a lower yield than a regular Bond of the same stated maturity and are priced off their average life as opposed to their stated maturity. Super sinkers also require special rating agency cash flow stress tests. If the Bond issue receives prepayments at a rate less than 100% of the FHA experience, the actual average life of the Super Sinker Bonds will be extended. This average life risk is borne by the buyers of the Super Sinkers.

9. Planned–Amortization Class Bonds (“PACs”), typically used only in a single family issue, are a type of Super Sinker Bonds in that they are the first Bonds within the Bond issue to be called from mortgage prepayments, but unlike Super Sinkers there is a limit on how quickly they can be redeemed. PACs may also have a stated maturity of 10 to 30 years, but based on a specified Securities Industry and Financial Markets Association (“SIFMA”) mortgage prepayment speed, their average life is approximately three to five years. PACs are priced at a lower yield than a regular Bond of the same stated maturity and are priced off their average life as opposed to their stated maturity. If the average life is determined at a percentage of the SIFMA prepayment rates, prepayments above that amount are allocated to redeem Bonds other than the PAC Bonds. If the bond issue receives prepayments at a rate less than the predetermined SIFMA rate, the actual average life of the PAC Bonds will be extended. However, if the prepayments are higher than the predetermined of the SIFMA rate, the average life is not reduced. Thus, the average life of the PAC is less volatile than for Super Sinker Bonds, and, as a result, investors are willing to accept a slightly lower yield.

10. Convertible Option Bonds (“COBs”) are marketed for an initial short–term period (usually six to 12 months) and may, at the Issuer’s option, be reoffered or converted into additional short–term remarketings or converted and remarketed or refunded as long–term, fixed rate Serial and Term Bonds. The interest on COBs converts from a short–term interest rate to a long–term interest rate on the conversion date. The single–family mortgage rates are also determined upon a conversion date. Conversion dates occur upon predetermined dates or upon the occurrence of certain events. Until the conversion date, Bond proceeds are invested in securities or a guaranteed investment contract and are not available for the purchase of loans until the COB is remarketed or refunded. COBs are used by the Issuer to preserve single–family bonding authority from loss due to various legal reasons. However, federal tax law changes in 1997 eliminated many of the tax advantages of COBs and have resulted in the increased use of short–term (one– to two–year) notes which are then simply refunded by long–term bonds instead of being “converted” to long–term Bonds.

11. Call Protected Bonds (Lockout Bonds), typically used only in a single family issue, are protected from early redemption for a specified period, usually five or 10 years. The Issuer agrees to not call these Bonds from prepayments or excess revenues for a specified number of years. The investor will generally accept a lower yield for these Call Protected Bonds. This structure reduces the

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prepayment call risk borne by the investor (Bonds may otherwise be called earlier than their stated maturity because of mortgage prepayments), and thus results in lower Bond rates.

12. Other Bonds, other bonds may be included in the structure of any bond issue at the discretion of BFC and the Board.

XVI. Refundings

THDA staff, together with Office of State & Local Finance staff, Financial Advisor and Bond Counsel, shall regularly analyze outstanding bond issues for refunding opportunities and shall evaluate refunding proposals submitted by underwriters. The Financial Advisor shall analyze outstanding bond issues at least semiannually and report to THDA staff and Office of State & Local Finance staff if a potential refunding issue appears viable. The applicable provisions of this Policy shall apply to a refunding bond issue in a similar manner as set forth herein for a bond issue designed to produce proceeds for THDA mortgage loan programs.

The following issues shall be considered in connection with evaluating refunding opportunities:

Whether a refunding results in an aggregate present value savings deemed sufficient by the BFC; or

Whether a refunding is necessary due to a change in tax status of the bonds; or

Whether a refunding is necessary to further THDA program objectives; or

Whether a refunding is necessary to preserve volume cap; or

Whether a refunding results in a reduction of the State’s moral obligation pledge with respect to THDA debt obligations.

Refunding bonds will be structured to meet then applicable Code requirements and to provide maximum benefit within the general resolution under which the refunding bonds are to be issued.

XVII. Redemptions

To the extent THDA has discretion to redeem bonds and select the maturities and issues to be redeemed, THDA will first redeem those bonds bearing the highest interest rate; however, due to universal cap considerations, THDA will call term bonds on a pro-rata basis within bond issues or redeem the highest coupon serial bonds when the result will be to reduce debt service requirements. When making a redemption decision, THDA will consider, among other applicable things, (i) restrictions or limitations imposed by the Code including, but not limited to, 10-year rule requirements and universal cap considerations; (ii) limitations or restrictions imposed by THDA resolutions including, but not limited to, redemption provisions; (iii) economic considerations; (iv) cash flow requirements; and (v) the amount of prepayments and other monies available to THDA for optional redemption of Bonds.

XVIII. Transparency

THDA shall comply with state and federal legal requirements for notice and for public meetings related to debt issuance. In the interest of transparency, all costs (including interest, issuance, continuing, and one-time) shall be disclosed to the BFC and Board in a timely manner. In connection with each THDA bond issue, THDA staff shall complete and file with the Office of State and Local Finance the most current version of the required Report on Debt Obligation (State Form CT-0253) (“Report”) and shall present such Report to the BFC and the Board at public meetings within the required time periods to meet this disclosure obligation.

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XIX. Interest Rate and Forward Purchase Agreements

Pursuant to TCA Section 13-23-120(a)(2) and (3), THDA is authorized to enter into interest rate and forward purchase agreements. At such time as the BFC and Board determine it is in the best interest of THDA to enter into such agreements, appropriate amendments to this Policy will be considered and submitted to the BFC and Board for consideration and approval.

XX. Conduit Debt

For purposes of this section, a “conduit bond issue” is a bond issue in which the obligation of THDA as the issuer to pay principal of and interest on the bonds is limited to the payments it receives from a private third-party under a loan relating to revenues derived from the facilities financed or other assets of the third-party borrower. At such time as the BFC and Board determine it is in the best interest of THDA to enter into such financing agreements, appropriate amendments to this Policy will be considered and submitted to the BFC and Board for consideration and approval.

XXI. Variable Rate Debt

At such time as the BFC and Board determine it is in the best interest of THDA to enter into variable rate debt, appropriate amendments to this Policy will be considered and submitted to the BFC and Board for consideration and approval.

XXII. Taxable Debt

At such time as the BFC and Board determine it is in the best interest of THDA to enter into taxable debt, the BFC and Board shall consider all facts and circumstances deemed relevant in determining the appropriateness and efficacy of a tax exempt financingappropriate amendments to this Policy will be considered and submitted to the BFC and Board for consideration and approval.

XXIII. State Moral Obligation Pledge

All THDA debt currently outstanding under the 1985 General Resolution is secured by, among other things, the moral obligation pledge of the State of Tennessee. It is THDA’s present intent to issue future debt obligations under the 2009 General Resolution or the 2013 General Resolution, neither of which carry the State’s moral obligation pledge. In the event THDA creates additional resolutions under which debt obligations are sold, such resolutions are expected to not carry the State’s moral obligation pledge. It is also THDA’s present intent to evaluate, in connection with each debt issuance, whether debt obligations outstanding under the 1985 General Resolution are eligible for refunding to, among other things, remove additional debt obligations from the State’s moral obligation pledge.

XXIV. Adoption and Amendment

This Policy was considered by the BFC at its meeting on November 28, 2011, and approved by the Board at its meeting on November 29, 2011. Amendments to the Policy were considered by the BFC at its meetings on July 28, 2014, and on May 23, 2016, and on May 17 or 18, 2017, and approved by the Board at its meetings on July 29, 2014, and on May 24, 2016, and on May 23, 2017. The Policy shall be reviewed at least annually by the BFC at the time of consideration of the Schedule of Financing. Any amendments shall be considered and approved in the same process as the initial adoption of this Policy.

Tab # 6 Items:

Grants Committee Meeting Materials


Grants Committee May 23, 2017

10:00 a.m. Central Time

AGENDA

1. Call to Order ................................................................................... Van Vuuren

2. Approval of Minutes for March 28, 2017 Meeting ........................ Van Vuuren

3. FY 2018 Housing Trust Fund Challenge Grant Program Description

............................................................................................................. Watt

4. Request for Approval to Extend 2012 and 2013 HOME Grant Agreements

..................................................................................................................... Watt

5. Request for Approval to Extend 2017 Emergency Repair Program (ERP) Grant Agreements ...................................................................................... Watt

6. Request to Issue 2017 HOME CHDO Mini-Round Program Description

...................................................................................................................... Watt

7. Update on 2017 HOME and 2017 ESG Grant Awards (verbal) ............... Watt

8. Sumner County 2011 HOME Project Update (verbal) .............................. Watt

9. Adjourn ............................................................................................ Van Vuuren


William R. Snodgrass Tennessee Tower Pieter van Vuuren, Chair 312 Rosa L. Parks Avenue, Third Floor Kim Grant Brown Nashville, TN 37243 Tre Hargett Ron Jones The Nashville Room Lynn Tully

Justin Wilson

TENNESSEE HOUSING DEVELOPMENT AGENCY GRANTS COMMITTEE

March 28, 2017

Pursuant to the call of the Chairman, the Grants Committee of the Tennessee Housing Development Agency Board of Directors met in regular session Tuesday, March 28, 2017, at 10:15 a.m. Central Time in the Nashville Room at the William R. Snodgrass Tennessee Tower, 312 Rosa L. Parks Avenue, Nashville, Tennessee.

The following Committee members were present: Kim Grant Brown, Lynn Tully, Keith Boring

(for Secretary of State Tre Hargett) and Ann Butterworth (for Comptroller Justin Wilson). Other Board members attending were: Todd Skelton, Courtney Hess (for Treasurer David Lillard), Brian Bills, Dorothy Cleaves, and Greg Turner (for Commissioner of Finance and Administration Larry Martin).

Chairman Bills called the meeting to order and called for consideration of the minutes from the

January 24, 2017, meeting. Upon motion by Mr. Boring, second by Ms. Butterworth, the minutes were approved.

Chairman Bills recognized Don Watt, Director of Community Programs, to present staff

recommended changes to the Rebuild and Recover Program Description. He reminded the Committee that the Rebuild and Recover Program was authorized in March 2013 to provide funding to assist a local community’s recovery from weather related incidents when it was doubtful that the damage would qualify for assistance from either the Federal Emergency Management Agency (FEMA) or the Tennessee Emergency Management Agency (TEMA). He noted that, in connection with the wildfires in Sevier County in the fall of 2016, the severity of the disaster may create a need for additional assistance, particularly when available federal funds, private insurance proceeds, and local resources are insufficient to assist low income homeowners in recovering from the disaster. He explained that THDA assistance could fill a critical funding gap with the following changes to the Rebuild and Recover Program Description:

• Allow communities with a declared federal disaster declaration to be assisted when the impact to housing is so severe that additional resources are necessary.

• Require assisted units to meet THDA’s Design Standards for Rehabilitation, or, for reconstruction, THDA’s Design Standards for New Construction.

• Require that all work be inspected by a qualified inspector as defined by THDA. • Add a compliance period that is comparable to the compliance period established for THDA’s

HOME program.

After a brief discussion, upon motion by Mr. Bills, second by Ms. Butterworth, the Committee recommended the described Rebuild and Recover Program Description changes to the Board.

Chairman Bills next called on Mr. Watt to discuss authorization to submit the 2017 Weatherization Assistance Program (WAP) application to the U.S. Department of Energy. Mr. Watt noted that the application deadline is May 1, 2017, and that WAP provides funding for energy efficiency improvements to homes of low income families. He explained that the 2017 WAP funding for THDA is unknown and is subject to a federal continuing resolution, however, based on 2016 WAP funding, staff anticipates approximately $4,036,000 in 2017 WAP funding. In anticipation of the application deadline, staff recommends that the maximum amount of assistance per unit be increased from $7,105 to $7,212 in accordance with the increase to the limit set annually by DOE. Staff also recommends that staff be authorized to submit the WAP application by the May 1 deadline and that the Executive Director be authorized to approve changes as necessary to meet changes in program requirements and to determine that the application is not in the best interest of THDA. Upon motion by Mr. Bills, second by Ms. Brown, the staff recommendation was approved for recommendation to the Board.

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Chairman Bills next called on Mr. Watt to present a request from Cannon County involving Cannon County’s 2012 HOME grant. Mr. Watt explained that the $413,380 HOME grant is for homeowner rehabilitation and, to date, $163,560 has been expended to assist 4 homeowners, with $249,820 remaining to assist other homeowners. He indicated that when demolition work began on the unit at 508 West High Street in Woodbury, the contractor and the County recognized that, due to the extent of termite damage, the rehabilitation costs far exceed the established program cap of $40,000 for hard construction costs, with no way to know how much the rehabilitation costs will increase as work continues. He noted that under these circumstances, Cannon County is requesting a waiver of the 2012 HOME Program Description and a change to the 2012 HOME Working Agreement to allow for reconstruction of this unit. Mr. Watt also noted that Cannon County secured the homeowner’s consent to reconstruct the unit, that there is no debt secured by the home, and that $15,000 in USDA funding is available to assist with reconstruction costs. Staff recommended a waiver of the 2012 HOME Program Description and change to the 2012 Cannon County Working Agreement to allow reconstruction of the home at 508 West High Street in Woodbury, subject to the following conditions:

• The number of housing units on the lot may not be decreased or increased as part of the

reconstruction project. However, the number of rooms per unit may be increased or decreased depending upon the needs and the size of the household.

• The reconstructed housing will have a compliance period of 15 years, secured by a deed of trust and a note with 6.67% of the amount of HOME funds used forgiven annually.

• The unit must be constructed in accordance with THDA’s Design Standards for New Construction.

• Cannon County must apply $15,000 in USDA-Rural Development Housing Preservation funds towards reconstruction of the unit and be responsible for all cost overruns over the permitted amount of HOME assistance.

Following discussion, upon motion by Mr. Bills, second by Ms. Tully, recommended the waiver to the 2012 HOME Program Description and the change to the Cannon County Working Agreement as described and subject to the specified conditions noted above for reconstruction of the unit located at 508 West High Street in Cannon County and adding a condition that the County Commission must approve the reconstruction of the unit.

Chairman Bills called on Mr. Watt who provided an update on the 2011 Sumner County HOME

grant. The case is still pending scheduling on the court docket. Finally, Bettie Teasley from Research and Planning presented the HOME Beneficiary Report for

fiscal year 2016. She noted that 99 affordable housing units were completed using the HOME allocations for years 2011-2014, with 63 units rehabilitated and 15 units newly constructed or acquisition and rehabilitation.

There being no further business to come before the Committee, the meeting was adjourned.

Respectfully submitted, Ralph M. Perrey Executive Director Approved the _____ day of _____, 2017.





M E M O R A N D U M

TO: Grants Committee and Board of Directors

FROM: Don Watt, Director of Community Programs

DATE: May 9, 2017

RE: Request for Approval of THDA Challenge Grant Program Description

Staff is recommending for the Board’s consideration the creation of the THDA Challenge Grant Program to provide initial seed funding to support the fundraising efforts of nonprofit organizations across Tennessee to implement housing activities that represent unique milestones, are part of a broad community initiative, or are part of a significant expansion of work outside the normal day to day activities of the organization. Modeled in part after THDA’s contribution to Habitat for Humanity of Greater Memphis in 2016, the THDA Challenge Grant Program will formalize a process for solicitation, review, and selection of similar initiatives for THDA’s financial support and participation. The THDA Challenge Grant Program requires that selected proposals must generate cash leverage of at least 500% within nine months of THDA’s commitment of Challenge Grant resources to the housing initiative. This program is intended only for unique opportunities and not for proposals that would otherwise be eligible for other program resources available from THDA. By approving this program, THDA is not committing to funding of a particular amount each year or approval of any applications in any particular year. The proposed housing activity must involve one of the following broad goals:

• Significantly expand or preserve the supply of housing for sale to low and moderate income home buyers, including new construction, reconstruction, and rehabilitation of housing.

• Significantly expand or preserve the supply of rental housing for low and moderate income households, including new construction and rehabilitation of rental housing.

• Significantly reduce the number of individuals who are homeless or move a significant number of a more vulnerable population into housing.



For Fiscal Year 2018, staff also requests that the Board allocate $1 million in additional funds to the Tennessee Housing Trust Fund to implement the THDA Challenge Grant Program. THDA may, but is not required to, allocate up to $500,000 to any single initiative proposed. Proposals will be reviewed by senior staff at THDA and a recommendation made to the Executive Director for funding consideration. The THDA Executive Director, in his sole discretion, will make the final determination of funding. THDA reserves the right not to select any proposal submitted.


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TENNESSEE HOUSING TRUST FUND

THDA CHALLENGE GRANT PROGRAM

FY 2018 PROGRAM DESCRIPTION The THDA Challenge Grant Program provides initial seed funding to support the fundraising efforts of nonprofit organizations across Tennessee to implement housing activities that represent unique milestones, are part of a broad community initiative, or are part of a significant expansion of work outside the normal day to day activities of the organization. Selected proposals must generate cash leverage of at least 500% within nine months of THDA’s commitment of Challenge Grant resources to the housing initiative. A. ELIGIBLE APPLICANTS

To be eligible, an organization must meet all of the following:

• Be organized and existing under the laws of the State of Tennessee or organized and existing under the laws of another state, but authorized to do business in Tennessee;

• Have a 501(c)3 designation from the Internal Revenue Service; and • Be in good program standing with THDA.

B. FUNDS AVAILABLE

THDA will determine the funding amount to be made available annually for THDA Challenge Grants and, in any given year, may determine that funding will not be available. THDA has allocated $1,000,000 to this program for FY2018, however, THDA reserves the right to not make any awards for FY 2018.

C. MAXIMUM GRANT

The maximum grant awarded is $500,000 and the minimum grant is $50,000.

THDA will determine, in its sole discretion, whether any THDA Challenge Grant will be awarded in any given year and may determine, in its sole discretion, to not award any Challenge Grant in any given year.

D. ELIGIBLE ACTIVITIES

The housing activity proposed must be outside of the normal business of the applicant and not part of an ongoing or existing project. The activity must represent a unique milestone or opportunity for the applicant and for Tennessee. The scope of the housing activity must demonstrate broad community support and result in a significant community or regional impact.

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The housing activity must involve one of the following broad goals:

• Significantly expand or preserve the supply of housing for sale to low and moderate income home buyers, including new construction, reconstruction, and rehabilitation of housing.

• Significantly expand or preserve the supply of rental housing for low and moderate income households, including new construction and rehabilitation of rental housing.

• Significantly reduce the number of individuals who are homeless or move a significant number of a more vulnerable population into housing.

Applications are more likely to be successful if the housing activity:

• Is part of a comprehensive community development initiative that integrates infrastructure improvements, neighborhood development or redevelopment, commercial development or the provision of services; OR

• Supports the implementation of a comprehensive community-wide initiative that delivers housing and related services to the homeless or other vulnerable populations.

A THDA Challenge Grant shall only be used for the implementation of the housing activity approved. Funds may be used for demolition that is undertaken as part of the approved housing activity. E. PROHIBITED ACTIVITIES No portion of a THDA Challenge Grant shall be used for the following activities or costs:

1. Administrative costs of the applicant or any other participant in the proposed project 2. Non-housing costs associated with the approved housing activity 3. Acquisition of land or housing 4. Rental assistance

F. LEVERAGE

The THDA Challenge Grant is designed to encourage the commitment of additional funds to support the proposed housing activity. THDA requires the nonprofit to leverage cash in an amount equal to 500% of the value of the THDA Challenge Grant provided for the proposed housing activity. The leveraged resources must be cash and be used for the approved housing activity. The applicant must present a fundraising plan to generate the cash leverage requirement. All cash contributions eligible for leverage must be from a third party entity with no expectation of repayment by the third party contributor. All cash must be secured through formal documentation provided within nine (9) months of THDA’s commitment to the proposal. No

3

THDA funds will be disbursed by THDA prior to THDA’s receipt of formal, third party documentation demonstrating a binding commitment of resources and any associated terms. The following resources will not be considered towards the leverage requirements for this program:

1. Administrative costs of the applicant or its partners in the initiative. 2. Other funds of the applicant that are currently on hand. 3. Project resources provided through any other programs administered by THDA. 4. Donated materials, land or services. 5. In-kind services. 6. Funds invested in earlier phases of a project or committed to the activity prior to

THDA’s commitment of the THDA Challenge Grant. 7. Costs of infrastructure, development or redevelopment activities not directly associated

with the housing activity supported by the THDA Challenge Grant.

G. MARKETING REQUIREMENTS

Each successful applicant shall work with the Industry and Government Affairs Division and the Communications Division of THDA to publicize the housing activity and the involvement of THDA. This marketing can include, but is not limited to, photo opportunities and beneficiary stories. THDA shall be listed on all marketing and signage as a contributor of funds in support of the approved housing activity.

H. REPORTING

The THDA Executive Director shall periodically report to the THDA Board of Directors regarding THDA Challenge Grants awarded. Each report shall include information about the eligible housing activity, the successful applicant and local community involved, the amount of the Challenge Grant awarded, progress made by the applicant in fundraising and in implementation of the approved housing activity, and, following completion, the impact of the approved housing activity. Grantees shall provide all data, in a form and with the substance as requested by THDA, in its sole discretion.

I. APPLICATION PROCESS AND REVIEW THDA will offer a single application process for FY2018. THDA will release information on its website regarding the application process by Friday, June 16, 2017. Applications must be submitted by 4:00 PM on Monday, July 31, 2017. Applications will be reviewed by designated senior staff of THDA and a recommendation for funding consideration will be made to the THDA Executive Director. The THDA Executive Director, in his sole discretion, will make the final determination of funding. THDA reserves the right not to select any proposal submitted.

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THDA will provide a preference for applications that:

• Are unique opportunities for the organization; • Incorporate volunteerism as a key component of the project; • Result in neighborhood-wide or area-wide redevelopment; • Address a significant challenge to the community; • Benefit vulnerable populations, including the homeless, individuals with a disability, youth

aging out of foster care, and ex-offenders; • Have a robust fundraising plan; and, • Propose the generation of cash leverage in excess of the program requirements.





M E M O R A N D U M

TO: Grants Committee and Board of Directors

FROM: Don Watt, Director of Community Programs

DATE: May 9, 2017

RE: Request for Approval to Extend 2012 and 2013 HOME Grants

THDA awarded 61 HOME grants for the 2012 and 2013 HOME Program years with grant agreements effective from July 1, 2014 through June 30, 2017. The attached tables document the completion status of each grant. To date, 18 grants have completed grant close-out and 43 remain active with grant implementation. Staff recommends that the Board authorize staff to provide a 12-month extension to the 43 grantees currently underway in order to allow for the completion of all development activities and close-out of each grant. Approval of this request will allow for THDA to meet its federal HOME commitment requirements for its 1992 – 2014 funds. By July 31, 2017, THDA must have all funds received between 1992 and 2014 committed to activities using the cumulative method for calculating commitment. Any funds not committed after July 31, 2017, will be recaptured by and must be returned to the U.S. Department of Housing and Urban Development. By providing extensions to these 2012 and 2013 agreements, these resources can be expended for eligible activities in Tennessee. Additionally, implementation of certain grants were slowed as a result of THDA’s request that eight of the 2012 and 2013 grantees hold their programs in abeyance as THDA worked to resolve the issues associated with the inspection of units in jurisdictions which have opted out of the State’s building code requirements. With passage of legislation to allow state certified inspectors to complete inspections in opt out communities at the request of a homeowner, this issue is nearing resolution. The requested abeyance period lasted eight months



and, therefore, the 12 month extension should provide sufficient time for each to complete the activities proposed. Please note that the $241,005.19 in funds associated with completed 2012 and 2013 grants will be reallocated to new programs through the 2017 HOME Program Description award process. Execution of 2017 grant awards will allow these funds to be meet the definition of commitment by the July 31, 2017 deadline.


Grants Committee

Tab # 6

Agenda Items No.

E. Request to Issue 2017 HOME CHDO Mini-Round Program

Description (blue folder item – to be sent under separate cover)

F. Update on 2017 HOME and 2017 ESG Grant Awards (verbal)

G. Sumner County 2011 HOME Project Update (verbal)

.

Tab # 7 Items:

Lending Committee Meeting Materials


Lending Committee

May 23, 2017


AGENDA

1. Call to Order ............................................................................................................... Cleaves

2. Approval of Minutes for March 28, 2017 Meeting .................................................... Cleaves

3. Great Choice Program Income Limits ........................................................................... Arik

4. HHF / DPA Program Updates (verbal) .......................................................................... Hall

5. Adjourn ....................................................................................................................... Cleaves


William R. Snodgrass Tennessee Tower Dorothy Cleaves, Chair

312 Rosa L. Parks Avenue, Third Floor Regina Hubbard

Nashville, TN 37243 Larry Martin

Todd Skelton

The Nashville Room


LENDING COMMITTEE

March 28, 2017

Pursuant to the call of Chairman, the Lending Committee of the Tennessee Housing Development

Agency Board of Directors met in regular session on Tuesday, March 28, 2017, at 10:30 a.m. Central Time

in the Nashville Room at the Snodgrass Tennessee Tower, 312 Rosa L. Parks Ave., Nashville, Tennessee.

The following Committee members were present: Dorothy Cleaves (Chair), Regina Hubbard, Greg

Turner (for Commissioner of Finance & Administration Larry Martin), and Todd Skelton. Board members

also present were: Daisy Fields, Kim Brown, Lynn Tully, Brian Bills, Courtney Hess, Keith Boring, and

Ann Butterworth.

Chairman Cleaves called the meeting to order and called for consideration of the minutes from the

January 24, 2017, meeting. Upon motion by Mr. Skelton, second by Mr. Turner, the minutes were approved.

Chairman Cleaves called on Lindsay Hall, Chief Administrative Officer of Single Family, to

present the first item on the agenda regarding a change in allowable lender fees. Ms. Hall referenced her

memo dated March 6, 2017, titled “Proposed THDA Originating Agent Allowable Fee Change”, included

with the Board materials. Ms. Hall explained that in 2011 THDA modified compensation to THDA

Originating Agents (“OAs”), due to the Dodd Frank Wall Street Reform Act of 2010, to allow up to a 2%

origination fee and a .25% in discount points. She explained that THDA staff reviewed the allowable fees

against actual fees and found that many OAs are not charging the allowable discount and the overall average

fee was 1.41%. She noted that, after discussing proposed changes with bond counsel and THDA’s Housing

Industry Advisory Board, staff is recommending the .25% discount point be eliminated, but that the

origination fee of up to 2%, along with all other normal and customary fees, be retained for all THDA loans.

Upon motion by Mr. Turner, second by Mr. Skelton, this fee proposal was recommended to the Board for

the reasons mentioned in the referenced memo.

Chairman Cleaves next called on Ms. Hall who referencing her memo dated March 13, 2017,

regarding an application for THDA designation as a HUD Housing Counseling Agency. Ms. Hall explained

that by having certified HUD foreclosure prevention counselors on staff, THDA can better meet the critical

challenge of working with delinquent borrowers in the mortgage loan servicing division and can stay

apprised of funding opportunities through HUD. Upon motion by Mr. Bills, second by Mr. Turner, the

application described in the referenced memo was recommended to the Board.

Chairman Cleaves called on Lynn Miller, Chief Legal Counsel, to present the next item on the

agenda, THDA Income Limits. Referencing her memo dated March 22, 2017, Ms. Miller explained that

staff has some, but not all, of the information needed to calculate revised income limits for 2017 THDA

mortgage loans, however, revisions may need to be made prior to the May meeting. She noted that staff

would expect to follow the approach used in the past where the data selected to set the income limits results

in the best combination of most increases and fewest decreases. Upon motion by Mr. Bills, second by

Ms. Hubbard, the Committee recommended that staff be authorized to calculate revised income limits

consistent with Rev. Proc. 2017-27 and other necessary information from HUD and the IRS and to select

for use, beginning no later than May 16, 2017, the set of income limits that offers the best combination of

maximum income limit increases and minimum income limit reductions.

Chairman Cleaves next called Ms. Hall for an update on the Hardest Hit Fund (HHF) Programs.

Ms. Hall reminded the Committee that THDA received additional HHF funding for the HHF Down

Payment Assistance (DPA) Program and the Principal Reduction/Recast Program with Loan

Extinguishment (PRRPLE). She reported that, prior to the March 1, start of the HHF DPA Program, which

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offers $15,000 in down payment assistance in 55 targeted zip codes across the state where the housing

market recovery has lagged, staff visited various regions across the state to introduce the new program to

local participating lenders, real estate professionals, and government representatives. She noted 92

applications have been received since March 1, and, at this level of interest, staff expects the $60 million

in funding to be used in 2 to 2 ½ years.

For the Principal Reduction/Recast Program with Loan Extinguishment, Ms. Hall reported that

$10,700,000 was made available beginning March 8, 2017. She noted that, to date, 249 homeowners

participated in the prescreening questionnaire, with 166 moving to the stages of assembling required

documentation and preparing applications.

Chairman Cleaves called on Dr. Hulya Arik, THDA Economist, to present the final agenda item,

the Calendar Year End Report. Dr. Arik noted that the full report was available in the board materials and

discussed the following highlights:

In 2016, THDA funded 2,003 first loans for a total dollar amount of approximately $258

million. The number of first loans was 12% less than the number of first loans in 2015, but it

was 18% higher than 2014 production.

In 2016, 1,911 downpayment assistance loans in the amount of $10 million were funded.

34 veterans took advantage of lower interest rate offered in the Homeownership for the Brave

Loan Program.

On average, THDA borrowers paid nearly $132,000 for their home, which was 5% higher than

in 2015.

The average annual income for THDA borrowers was $50,768, which was slightly higher than

the 2015 average income of $50,276.

12% of THDA borrowers purchased a home in a targeted area in 2016.

24 THDA borrowers in 2016 were not first time homebuyers and purchased a home in a

targeted area. In 2015, only 2 borrowers were not first time homebuyers.

Approximately 76% of THDA borrowers in 2016 identified themselves as white and 3.9%

identified themselves as of Hispanic origin.

48% of THDA borrowers in 2016 purchased a home in Middle Tennessee. In East Tennessee,

THDA borrowers increased from 30% in 2015 to 36% in 2016.

There being no further business, Chairman Cleaves adjourned the meeting.


Ralph M. Perrey

Executive Director

Approved the day of May, 2017.






MEMORANDUM:

DATE: May 10, 2017

TO: THDA Board of Directors

FROM: Hulya Arik, Economist

Bettie Teasley, Director of Research and Planning

SUBJECT: Single Family Mortgage Loan Program Income Limits

Determination of income limits for THDA’s Single Family Mortgage Loan Program requires two pieces of

information: Area Gross Median Income (AGMI) released by the U.S. Department of Housing and Urban

Development (HUD) and Average Area Purchase Prices (AAPP) released by the Internal Revenue Service

(IRS). The IRS released Revenue Procedure 2017-27 updating average area and nationwide purchase prices

for the Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate programs on April 3, 2017. The

Department of Housing and Urban Development (HUD) released the FY17 median income figures on April

14, 2017. IRS Revenue Procedure, Rev. Proc. 2017-35, released May 2, 2017, directs issuers of MRB,

including THDA, to use either FY17 Income Figures or previously available income figures from 2016

(“FY16 Income Figures”) as the basis for calculating new income limits, including income limits for high

cost areas.

Current THDA income limits as shown on the attached chart are based on FY2016 Income Figures, but

must be recalculated to take into account new average area purchase prices and the median income figures.

The recommended income limits, also shown on the attached chart, are based on the FY17 Income Figures.

Based on authorization granted by the Board in March 2017, staff selected the income limits based on the

FY17 Income Figures as the set of income limits that maximizes increases and minimizes decreases in

THDA income limits. These income limits are higher for 72 counties (the counties with the increasing limits

are highlighted darker). Although 22 counties have reduced income limits (the counties with declining

limits are highlighted lighter), 15 counties have a smaller reduction than if the income limits for those

counties were based on FY16 Income Figures. Finally, for one county (italicized and bold), using FY17

Income Figures will result in higher income limits for small families, but lower income limits for large

families.

Based on the prior staff determination as authorized by the Board, staff requests ratification of the attached

income limits based on 2017 Income Figures that will be effective as of May 24, 2017.


Current Staff-Selected

Limits

Difference between Current limits and Limits if we use 16 AMI and 17 AAPP

Difference between Current limits and

Staff-Selected Limits

County 1-2 person

3+ person

1-2 person

3+ person

1-2 person

3+ person

1-2 person

3+ person

Anderson $61,900 $71,185 $63,900 $73,485 $0 $0 $2,000 $2,300

Bedford $58,800 $68,600 $59,040 $68,557 -$1,494 -$2,698 $240 -$43

Benton $56,100 $64,960 $57,480 $67,060 $0 $0 $1,380 $2,100

Bledsoe $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Blount $61,900 $71,185 $63,900 $73,485 $0 $0 $2,000 $2,300

Bradley $59,773 $68,739 $59,015 $67,867 -$2,927 -$3,366 -$758 -$872

Campbell $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Cannon $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Carroll $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Carter $59,760 $69,084 $59,095 $67,959 -$2,614 -$3,366 -$665 -$1,125

Cheatham $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Chester $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Claiborne $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Clay $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Cocke $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Coffee $59,693 $68,647 $59,175 $68,051 -$2,927 -$3,366 -$518 -$596

Crockett $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Cumberland $56,100 $64,960 $57,480 $67,060 $0 $0 $1,380 $2,100

Davidson $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Decatur $59,280 $69,160 $57,480 $67,060 -$2,054 -$3,350 -$1,800 -$2,100

DeKalb $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Dickson $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Dyer $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Fayette $72,120 $84,140 $72,000 $84,000 $0 $0 -$120 -$140

Fentress $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Franklin $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Gibson $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Giles $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Grainger $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Greene $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Grundy $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Hamblen $59,520 $69,130 $59,040 $68,557 -$2,334 -$3,366 -$480 -$573

Hamilton $61,200 $70,380 $59,500 $68,425 $0 $0 -$1,700 -$1,955

Hancock $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Hardeman $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Hardin $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Hawkins $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680


Limits




County 1-2 person

3+ person

1-2 person

3+ person

1-2 person

3+ person

1-2 person

3+ person

Haywood $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Henderson $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Henry $60,013 $69,015 $59,520 $68,465 -$2,927 -$3,366 -$493 -$550

Hickman $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Houston $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Humphreys $58,853 $67,681 $58,355 $67,108 -$2,753 -$3,166 -$498 -$573

Jackson $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Jefferson $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Johnson $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Knox $61,900 $71,185 $63,900 $73,485 $0 $0 $2,000 $2,300

Lake $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Lauderdale $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Lawrence $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Lewis $56,100 $64,960 $57,480 $67,060 $0 $0 $1,380 $2,100

Lincoln $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Loudon $74,280 $86,660 $76,680 $89,460 $0 $0 $2,400 $2,800

Macon $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Madison $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Marion $73,440 $85,680 $71,400 $83,300 $0 $0 -$2,040 -$2,380

Marshall $59,373 $68,279 $59,175 $68,051 -$2,927 -$3,366 -$198 -$228

Maury $67,440 $78,680 $72,120 $84,140 $0 $0 $4,680 $5,460

McMinn $59,880 $69,061 $59,135 $68,005 -$2,754 -$3,366 -$745 -$1,056

McNairy $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Meigs $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Monroe $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Montgomery $59,253 $68,141 $58,295 $67,039 -$2,927 -$3,366 -$958 -$1,102

Moore $61,000 $70,150 $58,000 $66,700 $0 $0 -$3,000 -$3,450

Morgan $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Obion $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Overton $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Perry $56,100 $64,960 $57,480 $67,060 $0 $0 $1,380 $2,100

Pickett $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Polk $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Putnam $56,100 $64,960 $59,520 $68,465 $0 $0 $3,420 $3,505

Rhea $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Roane $59,213 $68,095 $58,475 $67,246 -$2,927 -$3,366 -$738 -$849

Robertson $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280


Limits




County 1-2 person

3+ person

1-2 person

3+ person

1-2 person

3+ person

1-2 person

3+ person

Rutherford $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Scott $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Sequatchie $73,440 $85,680 $71,400 $83,300 $0 $0 -$2,040 -$2,380

Sevier $59,713 $68,670 $58,935 $67,775 -$2,927 -$3,366 -$778 -$895

Shelby $60,100 $69,115 $60,000 $69,000 $0 $0 -$100 -$115

Smith $64,800 $75,600 $67,200 $78,400 $0 $0 $2,400 $2,800

Stewart $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Sullivan $59,893 $68,877 $58,615 $67,407 -$2,927 -$3,366 -$1,278 -$1,470

Sumner $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Tipton $72,120 $84,140 $72,000 $84,000 $0 $0 -$120 -$140

Trousdale $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Unicoi $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Union $74,280 $86,660 $76,680 $89,460 $0 $0 $2,400 $2,800

Van Buren $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Warren $56,100 $64,960 $57,480 $67,060 $0 $0 $1,380 $2,100

Washington $59,760 $69,084 $59,095 $67,959 -$2,614 -$3,366 -$665 -$1,125

Wayne $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Weakley $59,633 $68,578 $58,975 $67,821 -$2,927 -$3,366 -$658 -$757

White $67,320 $78,540 $68,760 $80,220 $0 $0 $1,440 $1,680

Williamson $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Wilson $82,200 $95,900 $82,440 $96,180 $0 $0 $240 $280

Tab # 8 Items:

Rental Assistance Committee Meeting Materials


Rental Assistance Committee May 23, 2017


AGENDA

1. Call to Order ............................................................................................ Brown

2. Approval of Minutes from March 28, 2017 ............................................ Brown

3. Section 8 Rental Assistance Programs Update (verbal) ........................ Ridley

4. Adjourn ..................................................................................................... Brown


William R Snodgrass Tennessee Tower Kim Grant Brown, Chair

312 Rosa L Parks Avenue, Third Floor Daisy Fields

Nashville, TN 37243 Regina Hubbard

Todd Skelton

The Nashville Room

TENNESS HOUSING DEVELOPMENT AGENCY

RENTAL ASSISTANCE COMMITTEE

March 28, 2017

Pursuant to the call of Chairman, the Rental Assistance Committee of the Tennessee Housing

Development Agency Board of Directors met on Tuesday, March 28, 2017, at 10:00 a.m. Central Time in

the Nashville Room at the William R. Snodgrass Tennessee Tower, 312 Rosa L. Parks Avenue in Nashville,

Tennessee.

The following members were present: Kimberly Grant Brown (Chair), Daisy Fields, and Todd

Skelton. The following Committee members were absent: Regina Hubbard. Other board members present:

Ann Butterworth for the Comptroller of the Treasury Justin Wilson, Greg Turner for the Commissioner of

Finance and Administration Larry Martin, Dorothy L. Cleaves, Lynn Tully, Courtney Hess for the Treasurer

David Lillard, and Chairman of the Board Brian Bills.

Chairman Grant Brown called the meeting to order. Seeing a quorum present, she called for

consideration of the minutes from July 26, 2016. Upon motion by Chairman Grant Brown, second by

Mr. Bills, the minutes were approved. Chairman Grant Brown called for consideration of the minutes from

November 15, 2016. Upon motion by Chairman Grant Brown, second by Mr. Skelton, the minutes were

approved.

Chairman Grant Brown recognized Trent Ridley, THDA Chief Financial Officer to provide an

update on the Section 8 Housing Choice Voucher (HCV) program and Project-Based Contract

Administration (PBCA). Mr. Ridley explained that the President proposed a $6 billion cut to HUD funding;

but not for subsidized housing programs or HAP programs. He indicated that it is still too early to know if

this proposal will change. He pointed out that these programs are currently operating under a Continuing

Resolution that expires on April 28, 2017, but if a budget is not approved at that time, THDA expects

another Continuing Resolution. Mr. Ridley noted that, after many delays, protests and court challenges,

HUD expects to rebid and award the contract for PBCA by September 30, 2017, and as a result, staff is

working on items that are expected to be in the rebidding process. He reported that THDA has started the

Management Occupancy Reviews (MOR) for HUD under the current PBCA contract and that, by the end

of March, 85 MORs will be completed, with the work covered by fees paid by HUD, yielding an additional

$345,000 in revenue for THDA. He also reported that the annual audit conducted by the Comptroller’s

office showed no audit findings for PBCA. Lynn Miller, THDA Chief Legal Counsel, and Mr. Ridley

explained that the current contract with HUD has been extended to December 31, 2017, and that if the re-

bid process is not complete by then, the expectation would be for another series of extensions from HUD.

Mr. Ridley then explained that the HCV program is managed by the Section 8 Rental Assistance

Division on a fee basis and has been a Section Eight Management Assessment Program (SEMAP) 100%

High Performer for four of the last five years. He noted that administrative revenue is based on lease up

and discussed direct revenue and direct expenses for the program. He also explained that THDA is unable

to earn maximum fees because HUD prorates fees based on its budget rather than costs actually incurred to

administer the program. He explained that although THDA has reduced administrative expenses over the

last five years to be within revenue, HUD has penalized THDA for reducing expenses by continuing to

reduce administrative revenue. He noted that the HCV program and PBCA contribute to THDA’s bottom

line and stressed the importance of HCV’s contribution margin.

Chairman Grant Brown questioned staff’s forecast regarding future cuts. Mr. Ridley responded

that efficiency and expenses can always be improved, but that the issue is on the revenue side of the HCV

program. He noted that as long as HUD continues to prorate and not allow THDA to earn full fees, the

overall net effect is negative for the HCV program, but the program still has a positive contribution margin.

Mr. Ridley reported that PBCA serves approximately 56,000 Tennesseans and the HCV program

serves approximately 18,000 Tennesseans with approximately 24,000 of the total being children under 17

years of age. Chair Grant Brown questioned how THDA compares to other states. Mr. Ridley explained

that this information has only been tracked since January 2017 and has not been compared to other states.

There being no further business, Chairman Grant Brown adjourned the meeting.


Ralph M. Perrey

Executive Director

Approved the ___ day of May, 2017

Rental Assistance Committee

Tab # 8

Agenda Items No.

C. Section 8 Rental Assistance Program Update (Verbal)

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