Official Board Packet

Texas State Affordable Housing Corporation

Board Meeting

To be held at the offices of Texas State Affordable Housing Corporation

1005 Congress Avenue – Suite B-10 Conference Room Austin Texas 78701

Friday, May 11, 2007 10:30 a.m.

BOARD MEETING TEXAS STATE AFFORDABLE HOUSING CORPORATION

To be held at the offices of Texas State Affordable Housing Corporation

1005 Congress Avenue – Suite B-10 Conference Room Austin, Texas 78701

May 11, 2007 at 10:30 am

AGENDA CALL TO ORDER, ROLL CALL Jerry Romero CERTIFICATION OF QUORUM Chair The Board of Directors of Texas State Affordable Housing Corporation will meet to consider and possibly act on the following: PUBLIC COMMENT REPORTS

♦ President’s Report Katherine Closmann ♦ Executive Vice President’s Report Katherine Closmann ♦ Single Family Lending Report Paige McGilloway ♦ Multifamily Lending Report David Danenfelzer ♦ Marketing and Development Report Janie Taylor

♦ Legislative Report ♦ Asset Oversight and Compliance Report Pat Corser

♦ Quarterly Compliance Update ♦ Quarterly Residence Services Update

♦ Financial Report Melinda Smith ♦ Presentation of Financial Statements and Budget Report

ACTION ITEMS IN OPEN MEETING Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board Meeting held on April 13, 2007. Tab 2 Presentation, Discussion and Possible Approval of a Resolution Authorizing the Remarketing, Sale and

Delivery of Single Family Mortgage Revenue Bonds (Professional Educators Home Loan Program) Series 2007A-3; Authorizing a Remarketing Memorandum, a Series Supplement, an Origination, Sale and Servicing Agreement, Bond Purchase Agreement and Continuing Disclosure Agreement, Making Certain Findings and Determinations; Authorizing the Execution of Documents and Instruments Necessary or Convenient to Carry Out the related 2007 Texas State Affordable Housing Corporation Professional Educators Home Loan Program; and Containing Other Matters Incident and Related Thereto.

CLOSED MEETING Consultation with legal counsel on legal matters – Texas Government Code § 551.071 Deliberation regarding purchase, exchange, lease, or value of real property – Texas Government Code § 551.072 Deliberation regarding prospective gift or donation to the state or Texas State Affordable Housing Corporation – Texas Government Code § 551.073 Personnel Matters – Texas Government Code § 551.074 Implementation of security personnel or devices – Texas Government Code § 551.076 Other matters authorized under the Texas Government Code OPEN MEETING Action in Open Meeting on Items Discussed in Closed Meeting. ADJOURN Individuals who require auxiliary aids or services for this meeting should contact Laura Ross, ADA Responsible Employee, at 512-477-3555, x 400 or Relay Texas at 1-800-735-2989 at least two days before the meeting so that the appropriate arrangements can be made. Texas State Affordable Housing Corporation reserves the right to recess this meeting (without adjourning) and convene at a later stated time, if and to the extent allowed by law. If Texas State Affordable Housing Corporation adjourns this meeting and reconvenes at a later time, the later meeting will be held in the same location as this meeting. Texas State Affordable Housing Corporation also reserves the right to proceed into a closed meeting during the meeting in accordance with the Open Meetings Act, Chapter 551 of the Texas Government Code. If permitted by the Open Meetings Act, Chapter 551 of the Texas

Government Code, any item on this Agenda to be discussed in open meeting may also be discussed by the Board (and any other authorized persons) in closed meeting.

President’s Report

Discussion

Executive Vice President’s Report

Discussion

Texas State Affordable Housing Corporation'sProfessional Educators Home Loan Program Series 2007A

As of February 22, 2007 through May 2, 2007

Month# of

Loans

% ofTotal

LoansTotal

Originated At a Glance Feb-07 26 12% 3,080,457$ Total Amount Originated $27,216,775Mar-07 112 51% 13,998,273$ Average Annual Income $44,598Apr-07 74 34% 9,190,264$ Average Purchase Price $125,531May-07 8 4% 947,781$ Average Loan Amount $123,713

Totals 220 100% 27,216,775$ Average Household Size 2New/Existing

Lender Originated # of Loans Total % Existing 64%Countrywide Home Loans, Inc. $4,020,954.00 36 16% New 36%

Cornerstone Mortgage Company $3,114,068.00 22 10% Professional BreakdownWells Fargo Home Mtg- $2,265,298.00 17 8% Teacher 96.82%

Hammersmith Financial, L.P. $1,970,650.00 14 6% Teacher Aide 1.82%Rocky Mountain Mortgage Co. $1,918,745.00 15 7% School Counselor 0.91%

Universal American Mortgage Co $1,836,587.00 13 6% School Nurse 0.45%WR Starkey Mortgage $1,784,505.00 15 7% School Librarian 0.00%

Market Street Mortgage Corp. $1,757,758.00 13 6% Type of LoanDHI Mortgage Company, Ltd. $1,450,151.00 10 5% FHA 47%

Wachovia Mortgage Corporation $1,437,310.00 13 6% Conventional 34%Valley Mortgage Co., Inc. $823,852.00 9 4% VA 1.36%

Service First Mortgage $751,417.00 7 3% USDA-RD 17.73%CTX Mortgage Company, LLC $724,295.00 6 3% Ethnicity

Home Loan Corporation $509,710.00 4 2% American Indian/Alaskan Native 0.00%Hometrust Mortgage Company $404,000.00 4 2% Asian or Pacific Islander 0.91%

First National Bank Texas $312,102.00 3 1% Black 17.73%R. H. Lending, Inc $283,700.00 2 1% Hispanic 8.18%

First Continental Mortgage Ltd $272,990.00 2 1% White 60.00%Willow Bend Mortgage $258,400.00 2 1% Other 11.82%

Colonial Savings, FA $234,750.00 2 1% Not Defined 1.36%PrimeLending, A PlainsCptl Co. $183,500.00 2 1% Top Originating Counties # of LoansFirst Horizon Home Lns-Sunbelt $179,116.00 2 1% Harris 54

GMAC Mortgage, LLC $132,215.00 1 0% Dallas 24JP Morgan Chase Bank, NA $128,000.00 1 0% El Paso 16

Countrywide - Wholesale $125,400.00 1 0% Tarrant 15New South Federal Savings Bank $119,000.00 1 0% Bexar 11

First United Bank & Trust Co. $107,000.00 1 0% Fort Bend 10Premier Nationwide Lending $76,302.00 1 0% Travis 9

American Bank - TX $35,000.00 1 0% Hidalgo 9Total Committed $27,216,775 220 100% Collin 8

Williamson 7Total Allocation $35,000,000 Denton 5

Remaining to Commit $7,783,225 Brazoria 5Montgomery 4

Kaufman 3Jefferson 3Galveston 3Cameron 3

Tom Green 2Lubbock 2

Hunt 2Guadalupe 2

Bell 2

Texas State Affordable Housing Corporation'sProfessional Educators Home Loan Program Series 2007A

As of February 22, 2007 through May 2, 2007

Monthly Origination

26 112 74 8 220$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

Feb-07 Mar-07 Apr-07 May-07 Totals

Bond ClosedFebruary 22, 2007

Occupational Origination Amounts

$0.00

$551,209.00

$227,900.00$151,500.00

$26,286,166.00

TeacherTeacher AideSchool CounselorSchool LibrarianSchool Nurse

Texas State Affordable Housing Corporation'sFire Fighter and Law Enforcement or Security Officer Home Loan Program Series 2007C

As of April 9, 2007 through May 3, 2007

Month# of

Loans

% ofTotalLoans

TotalOriginated At a Glance

Apr-07 29 100% 3,209,926$ Total Amount Originated $3,209,926Totals 29 100% 3,209,926$ Average Annual Income $43,899

Average Purchase Price $112,298Lender Originated # of Loans Total % Average Loan Amount $110,687

WR Starkey Mortgage $548,246.00 5 17% Average Household Size 5R. H. Lending, Inc $481,403.00 3 10% New/Existing

Rocky Mountain Mortgage Co. $324,850.00 3 10% Existing 66%Wachovia Mortgage Corporation $296,168.00 3 10% New 34%

Universal American Mortgage Co $263,225.00 2 7% Professional BreakdownCornerstone Mortgage Company $225,000.00 2 7% Correctional Officer 14%

CTX Mortgage Company, LLC $175,534.00 1 3% Peace Officer 7%Countrywide Home Loans, Inc. $161,964.00 2 7% Fire Fighter 21%

Houstonian Mortgage Group Inc. $130,000.00 1 3% County Jailer 0%City Bank $114,146.00 1 3% Public Security Officer 0%

Home Loan Corporation $107,000.00 1 3% Not Specified 59%First National Bank Texas $96,485.00 1 3% Type of Loan

Castle & Cooke Mortgage, LLC $91,500.00 1 3% FHA 45%American Bank - TX $80,000.00 1 3% Conventional 48%

Valley Mortgage Co., Inc. $58,805.00 1 3% VA 0%Countrywide - Wholesale $55,600.00 1 3% USDA-RD 7%

Total Committed $3,209,926 29 100% EthnicityAmerican Indian/Alaskan Native 0.00%

Total Allocation $23,529,000 Asian or Pacific Islander 0.00%Remaining to Commit $20,319,074 Black 10.34%

Hispanic 6.90%White 75.86%Other 6.90%

Not Defined 0.00%Top Origination Counties # of Loans

Fort Bend 4Harris 3

El Paso 3Coryell 2Collin 2Bexar 2Travis 1Titus 1

Tarrant 1Randall 1Nueces 1Moore 1Jasper 1Hidalgo 1Hardin 1Gregg 1Dallam 1

Cameron 1Bell 1

Texas State Affordable Housing Corporation'sFire Fighter and Law Enforcement or Security Officer Home Loan Program Series 2007C

As of April 9, 2007 through May 3, 2007

Monthly Origination

29 29$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Apr-07 Totals

Occupational Origination Amounts

$0.00

$170,400.00

$605,225.00

$0.00

$442,384.00

$1,991,917.00 Correctional OfficerPeace OfficerFire FighterCounty JailerPublic Security OfficerNot Specified

Texas State Affordable Housing Corporation Report on Multifamily Programs

May 11, 2007

Agenda Item: Multifamily Lending Report Summary: Staff has split time between the private activity bond program, multifamily direct lending and other duties in the past month. A significant amount of progress has been made in the Rainbow Texas Portfolio project. After the Board’s approval of the inducement resolution in April, staff has worked with bond counsel and the borrower to schedule TEFRA hearings for all 13 properties, prepared reservation applications to the Texas Bond Review Board and assisted the borrower with their application for housing tax credits to the TDHCA. Staff has also been seeking additional applications for the remaining $8 million in private activity bond volume cap. One application was submitted, but has since been withdrawn by the applicant. In order to ensure that the Corporation can review, induce and submit reservations applications to the Texas Bond Review Board, staff will be updating the Request for Proposals to ensure that complete application, reservation detail packages and other supporting materials are submitted by applicants prior to the June board meeting. In regards to the multifamily direct lending program staff is continuing to work with a nonprofit developer that is investigating the preservation and rehabilitation of affordable rental properties in south Texas. No formal applications have been made, but staff is anticipating some in the near future. Additionally, we’ve been updating the program’s term sheet and overall lending policies.

Marketing and Development Report

Discussion

Agape Ashton/Woodstock, Inc.

Ashton Place WoodstockLI Occupancy 83% 82%VLI Occupancy 47% 59%

NHT/GTEX Project Portfolio

Ashley Park Champions Green Chelsea Court Kressington Place Victoria Place Riverwalk TimberlodgeLI Occupancy 75% 73% 75% 77% 75% 75% 70%VLI Occupancy 22% 27% 20% 23% 22% 20% 21%

Commonwealth Multifamily (White Rock), LLC

White RockLI Occupancy 79%VLI Occupancy 23%

American Housing Foundation

Settler's Cove Cimarron Park Pine Creek Stony Creek Bent Creek Creekwood Village Shadowridge LI Occupancy 74% 75% 78% 74% 87% 90% 74%VLI Occupancy 36% 41% 33% 30% 68% 63% 51%

Aston Brook Northwoods One Willow Chase One Willow Park Woodedge FountaingateLI Occupancy 74% 74% 81% 79% 76% 76%VLI Occupancy 42% 52% 43% 42% 37% 35%

South Texas Affordable Properties Corporation

Charleston Remington Summer Oaks The Rafters The Wharf WillowickLI Occupancy 78% 75% 77% 77% 74% 78%VLI Occupancy 38% 23% 22% 23% 23% 24%

American Opportunity for Housing, Inc.

Clover Hill Hillcrest Briarcrest Mill Creek One WestfieldLI Occupancy 90% 85% 81% 77% 81%VLI Occupancy 57% 53% 33% 42% 44%

San Antonio Low Income Housing, LLC

Aguila OaksLI Occupancy 92% VLI Occupancy 24% * LI Occupancy statistic is inclusive of the VLI Occupancy statistic.

Quarterly Compliance Status for TSAHCAs of the First Quarter Ending 03/31/2007

Texas State Affordable Housing Corporation

Resident Service Summary First Quarter – March 2007

American Housing Foundation One Willow Chase Apartments: Houston Jan: Tax Preparation information – HABC/AHF/WAG (136 Distributed) Crime Watch – WAG/AHF (3 Attended) Word Readiness Training – Houston Urban League/AHF/WAG (4 Attended) Fax, copier – WAG/AHF (9 Attended) Metro Bus Tokens – AHF/WAG (1 Attended) Feb: Black History Month Book Give Away – AHF/WAG (16 Attended) Healthy Heart Valentine Party – WAG/AHF (2 Attended) Phone, fax, copier, computer – WAG (1 Attended) Dental Health Program – AHF/WAG (16 Attended) Learning Medial – Rock n’ Learn/WAG (5 Attended) Community Get Together / pizza – AHF/WAG (9 Attended) Metro Bus Tokens – AHF/WAG (1 Attended) Mar: Spring Break Lunches – AHF/WAG (28 Attended) Book Give Away – WAG/AHF (3 Attended) Crime Watch – WAG/AHF (3 Attended) Breast Cancer Awareness – The Rose/WAG/AHF (7 Attended) Fax, copier, phone – AHF/WAG (3 Attended) Bus Tokens – AHF/WAG (4 Attended) One Willow Park Apartment: Houston Jan: Free tax information (178 distributed) Crime Watch (2 Attended) Work Readiness Training by Houston Urban League (5 Attended) Business Center-fax/copier) (6 utilized) Bus Tokens (6 Attended) Feb: Black History Month Book Giveaway – AHF (5 Attended) Healthy Heart – Valentine Party (0 Attended)

Crime Watch – AHF / WAG (1 Attended) Business Center (3 Attended) Dental Health by Dr. Barron (1 Attended) Bus Tokens – AHF / WAG (3 Attended) Learning Media – Rock n’ Learn (3 Attended) Community Get Together (pizza) (5 Attended) Mar: Spring Break Lunches – AHF / WAG (4 Attended) Books – AHF / WAG (1 Attended) Crime Watch (1 Attended) Breast Cancer Awareness – The Rose / AHF / WAG (3 Attended) Bus Tokens – AHF / WAG (4 Attended) Business Center (1 Attended) Woodedge Apartment: Houston Jan: Organize bill paying – AHF (4 Attended) Day Care Assistance – Asante Angels Daycare referral (3 Attended) Tax preparation assistance – NABC / AHF (100 distributed) CHIPS applications– TDHS / AHF (100 distributed) Phone, fax, copier (4 Attended) Bus Tokens – AHF (2 Attended)

Feb: Healthy Heart Valentine Program (0 Attended) Black History Month Book Give Away (2 Attended) Educational Media – Rock n’ Learn (4 Attended) CHIPS applications – AHF (2 Attended) National Dental Health Month – Dr. Barron (1 Attended) Phone, fax, copier, computer – WAG (6 Attended) Pizza Social – AHF / WAG (3 Attended) Bus Tokens – AHF / Woodedge (3 Attended) Mar: Spring Break Lunches – AHF / Woodedge (28 Attended) Tax Preparation Information – NABC (5 Attended) Breast Cancer Awareness – The Rose (4 Attended) Copier, fax, phone (8 Attended) Bus Tokens – AHF (4 Attended) Fountaingate Apartment: Wichita Falls Jan: Bible Study – Reach Team (4 Attended) Crime Watch (10 Attended) Fax, copier (3 Attended) Health and Nutrition – Reach Team (4 Attended) Feb: After School – Reach Team / Dottie & Keith Yarbrough (19 Attended) Kids Club & Teen Time – Reach Team/Dottie & Keith Yarbrough (48 Attended) Tax Referral – Reach Team / Dottie & Keith Yarbrough (0 Attended) Bible Story – Reach Team / Dottie & Keith Yarbrough (1 Attended) Valentine Party – Fountaingate (19 Attended) Mar: Kids Club – Reach Team (15 Attended) Teen Time – Reach Team (14 Attended) Spring Break Lunches – Baptist Church (30 Attended) Resident Meeting – Reach Team (15 Attended) Bible Study – Reach Team (17 Attended) Settler’s Cove Apartment: Beaumont Jan: Crime Watch – Sheriff (0 Attended) Preparing Taxes – Best Years Center - referrals (2 Attended) Health and Nutrition – Drug Prevention Class – Jefferson County (6 Attended) Fitness Center – AHF (26 Attended) Copier, fax (3 Attended) Feb: Financial Planning (7 Attended) Youth Program (Black History Book Give Away – AHF (12 Attended) Healthy Heart Valentine Program – AHF (4 Attended) Fitness Center (16 Attended) Business Center (7 Attended) Bus Tokens – AHF (2 Attended) Mar: Spring Break Lunches – AHF (14 Attended) Food Pyramid – Staff (14 Attended) Crime Watch – Courtesy Officer (0 Attended) Child ID Kits – Staff (3 Attended) Fitness Center (20 Attended) Educational Media – Rock n’ Learn (4 Attended) Business Center (5 Attended) Bus Tokens – AHF (5 Attended) Cimarron Park Apartment: Conroe Jan: Organize bill paying – AHF (6 Attended) CHIPS – AHF (6 Attended) Senior Meals – Cimarron (3 Attended) Phone, fax, computer (4 Attended)

Feb: Tax Information handouts – AARP / AHF (4 Attended) Healthy Heart Valentine Party – AHF (5 Attended) Black History Month Book Give Away (3 Attended) Educational Media – Rock n’ Learn (7 Attended) Dental Health Program – Dr. Barron / AHF (7 Attended) Mar: Senior Meals – Cimarron (3 Attended) Spring Break Lunches – AHF (23 Attended) Nutrition Program (6 Attended) CHIPS Insurance Applications – AHF (0 Attended) Computer (3 Attended) Bible Study (5 Attended) Stony Creek Apartment: Conroe Jan: Organize bill paying (15 Attended) Coloring Pages (10 Attended) Crime Watch (7 Attended) Phone, fax, copier (17 Attended) Tax Assistance (4 Attended) CHIPS Health Insurance (7 Attended) Feb: Healthy Heart Valentine (0 Attended) National Dental Health Month – AHF / Dr. Barron (1 Attended) Phone, fax, copier (9 Attended) Mar: Spring Break Lunches – AHF / staff (37 Attended) Educational Media – Rock n’ Learn (7 Attended) Children’s Books – First Book / AHF (8 Attended) Pool Safety – staff (20 Attended) Phone, fax, copier (20 Attended) CHIPS Applications – staff (3 Attended) Food Nutrition Pyramid – staff (3 Attended) Pine Creek Village Apartment: Conroe Jan: Budgeting – AHF / Stoneridge (9 Attended) Crime Watch – AHF / Stoneridge (2 Attended) Phone, copier, fax (7 Attended) CHIPS Health Insurance – THHSC / AHF / Stoneridge (1 Attended) Tax Assistance – MCL / Stoneridge (1 Attended) Feb: Healthy Heart Valentine Program – AHF (0 Attended) National Dental Month – AHF (1 Attended) Phone, fax, copier – Staff (3 Attended) Mar: Spring Break Lunches – AHF / Staff (37 Attended) Educational Media – Rock n’ Learn (7 Attended) Children’s Books – First Book / AHF (8 Attended) Pool Safety – Staff (3 Attended) Nutritional Food Pyramid (4 Attended) CHIPS – Applications – Staff (4 Attended) Phone, copier, fax – Staff (21 Attended) Shadowridge Village Apartment: Dallas Jan: Heroes Essay – AHF (0 Attended) Phone, fax, copier – WAG (3 Attended) Healthy Family Newsletter – WIC (0 Attended) Bus Tokens – DART (0 Attended) Feb: Black History Month – coloring pages – AHF (15 Attended) Fax, copier, phone – WAG (4 Attended) Dental Awareness – Dr. Barron (14 Attended) Tax Preparation Information – AHF (0 Attended)

Bus Tokens – DART (0 Attended) Mar: Financial Empowerment – YWCA (2 Attended) Spring Break Lunches - staff (16 Attended) KICK BUTTS DAY – Campaign for Tobacco Free Kids (0 Attended) Business Center – staff (3 Attended) Creekwood Village Apartment: Dallas Jan: Youth Program (Big Brothers/Big Sisters (1Attended) Heroes Essay - AHF (7 Attended) Bus Tokens – DART (0 Attended) Healthy Families - WIC (0 Attended) Computer Facilities – AHF (9 Attended) Phone, fax, copier – WAG (11 Attended) Feb: Financial Planning Courses - YWCA (8 Attended) Pizza Party – YWCA (13 Attended) Black History Month (coloring pages) – AHF (15Attended) Dental Awareness – Dr. Barron (6 Attended) Computer Facilities – AHF / WAG (19 Attended) Phone, fax, copier – WAG (2 Attended) Free tax preparation information – AHF (0 Attended) Bus Passes – DART (0 Attended) Mar: Financial Planning Courses - YWCA (8 Attended) Spring Break Lunches – AHF (8 Attended) Crime watch by WAG (15 Attended) KICK BUTTS DAY – Campaign for tobacco free kids (8 Attended) Utilities Assistance (3 Attended) Computer Facilities – AHF (17 Attended) Business Center – WAG (4 Attended) Poison Prevention Week – Texas Poison Center Network (0 Attended) Bent Creek Apartment: Dallas Jan: Financial Planning – YWCA / Citigroup (2 Attended) Parenting Classes – Dallas Association for Parent Education (3 Attended) Crime Watch – WAG (26 Attended) Health and Nutrition – American Cancer Society (26 Attended) Hero Essay – AHF (6 Attended) Bus Tokens – DART (30 Attended) Computer Facilities – AHF (44 Attended) Phone, fax, copier – WAG (12 Attended) Feb: Financial Planning – YWCA (2 Attended) Tax Preparation information – AHF (0 Attended) Dental Awareness Program – Dr. Barron (16 Attended) Parenting (grief) – Dallas Assoc. for Parent Education (1 Attended) Black History Month coloring pages – AHF (5 Attended) Phone, fax, copier – WAG (4 Attended) Computer Facilities – AHF / WAG (50 Attended) Bus Tokens – DART (10 Attended) Mar: Spring Break Lunches – AHF (24 Attended) Crime Watch – WAG (30 Attended) Computer Facilities – AHF (18 Attended) Phone, copy, fax – WAG (23 Attended) KICK BUTTS DAY – Campaign for Tobacco Free Kids (0 Attended) Substance Abuse referrals – Texas Poison Center Network (1 Attended)

Northwoods Apartment: Houston Jan: Tax Preparation information – Houston Asset Building Coalition (180 distributed) Education / Tutoring – Northwoods (15 Attended) Utility Assistance – NAM Referrals (20 Attended) Free Child Care Referral – Angels Daycare (20 Attended) CHIPS Applications – AHF (12 Attended) Copier, phone, fax (41 Attended) Bus Tokens – AHF (60 Attended) Feb: Education / Tutoring – Northwoods (13 Attended) Healthy Heart Valentine party – AHF (70 Attended) Respect: Dating with Respect – NWAM (22 Attended) Referrals to NWAM (9 Attended) Dental Health (children) – Dr. Barron (38 Attended) Phone, fax, copier – Northwoods (48 Attended) Senior Meals – Meals on Wheels (3 Attended) Houston Aeros – United Way (17 Attended) Bus Tokens – AHF (48 Attended) Mar: Education / Tutoring – Northwoods (44 Attended)

Spring Break Lunches – AHF (492 Attended) Fax, copier, computer, phone (52 Attended) Job Referrals – NAM (5 Attended) Rodeo Tickets – Golden Creek Carpet (2 Attended) Utility Referrals – Neighborhood Center (4 Attended) Bus Tokens – AHF (78 Attended) Aston Brook Apartment: Houston Jan: Tax Payer Flyers – Houston Asset Building Coalition / AHF (152 Distributed) Child ID Kits – AHF / staff (7 Attended) Fax, copier (20 Attended) CHIPS insurance applications – AHF / staff (6 Attended) Computer Facilities (2 Attended) Bus Tokens – AHF / Aston Brook (38 Attended) Feb: Better Health and You – NIDDK (4 Attended) Black History Month Book Give Away – AHF (10 Attended) Computer, phone, fax, copier – staff (16 Attended) National Dental Health Month – Dr. Barron/AHF (3 Attended) Educational media – Rock n’ Learn (10 Attended) Metro Bus Tokens – AHF (10 Attended) Mar: CHIPS applications (5 Attended) Spring Break Lunches – AHF / Aston Brook (25 Attended) Educational Media – Rock n’ Learn (22 Attended) Phone, fax (12 Attended) Bus Tokens – AHF (15 Attended) South Texas Affordable Properties The Charleston Apartment: Cranbrook Jan: Personal Protection (winter safety) (10 Attended) Health and Nutrition (5 Attended) Feb: After School Valentine Cards (12 Attended) Personal Protections (15 Attended) Mar: Personal Protections (9 Attended) The Wharf Apartment: Corpus Christi Jan: Auto emissions check – TX A&M (33 Attended) Strengthening Families – South Texas Family Connection (0 Attended)

Feb: Strengthening Families – South Texas Family Connection (0 Attended) Mar: Tax Preparation – H&R Block (0 Attended) Parenting (24 Attended) Willowick Apartment: Corpus Christi Jan: Youth Program (Tuesdays) (15 Attended) National Go-Red-Campaign – American Heart Assoc. (15 Attended) Feb: Youth Program (4 Attended) Strengthening Families by South Texas Family Connection (0 Attended) Mar: Youth Program (Tuesdays) (16 Attended) Tax preparation by H&R Block (0 Attended) The Rafters Apartment: Corpus Christi Jan: Computer Literary Classes – AT&T Get Connected (0 Attended) Health Screening – Blood Drive Registration (0 Attended) National Go-Red-Campaign - American Heart Assoc. (0 Attended) Strengthening Families – South Texas Family Coalition (5 Attended) Feb: Computer Literary Classes – AT&T Smart Moves (12 Attended) Tax Preparation information (Distributed to all) Town Hall Meeting (12 Attended) Blood Drive (5 Attended) Mar: Tax Preparation – H&R Block (0 Attended) After School Program (5 Attended) Blood Drive – Coastal Bend Blood Center (5 Attended) Remington Apartment: San Antonio Jan: Financial Planning – Volunteer Income Tax Asst. Program (7 Attended) Health and Nutrition – Bally Total Fitness (10 Attended) National Go Red Day – American Heart Association (156 flyers distributed) Feb: Tax preparation – City of San Antonio Community Initiatives (9 Attended) After School Valentines (0 Attended) Crime Watch (5 Attended) Mar: Tax Preparation – H&R Block (1 Attended) Personal Protection (15 Attended) Health and Nutrition Courses (3 Attended) Summer Oaks Apartment: San Antonio Jan: Crime Watch (cancelled due to severe weather) Health and Nutrition – Bally Fitness (3 Attended) Vocational Development (3 Attended) Feb: Crime Watch (9 Attended) Package delivery (1 Attended) Fax, phone, copier (6 Attended) Mar: Tax Preparation – H&R Block (1 Attended) Health and Nutrition (50 Attended) Organization Tips (6 Attended) American Opportunity for Housing Briarcrest Apartment: Spring Jan/Feb: No submissions Mar: After School (0 Attended)

Clover Hill Apartment: Arlington Jan/Feb: No Submissions Mar: None Provided Hillcrest Apartment: Grand Prairie Jan/Feb: No Submissions Mar: None provided. Summer youth program commencing in May of 2007. Mill Creek Apartment: Spring Jan/Feb: None provided. Mar: None provided. Notification of an after school tutoring program in April. One Westfield Lake Apartment: Spring Jan: None provided. Feb: After school program – Spring CDC/AHF (8 Attended) Mar: None provided GTEX Chelsea Court Apartment: Houston Jan: Town Hall Meeting (20 Attended) Job Skills – Shaun Larks Community Resource Center (20 Attended) Feb: Meet Your Neighbor Valentine Party - staff (20 Attended) Mar: Crime Watch – staff (20Attended) Kressington Place Apartment: Spring Jan: None provided Feb: None provided Mar: Fire Safety – Klein Fire Dept. (9 Attended) Victoria Place Apartment: Houston Jan: None provided Feb: Crime Watch – HPD (11 Attended) Mar: Yoga training – Melissa Bailey (0 Attended) Champions Green Apartment: Houston Jan: None provided Feb: None provided Mar: Personal protection – Houston Sheriff Dept. (4 Attended) Riverwalk Apartment: Dallas Jan: Financial Planning – H&R Block (7 Attended) Feb: None Provided Mar: Senior Meals – Riverwalk (10 Attended) Timberlodge Apartment: Dallas Jan: Crime Watch – Metro Private Security (6 Attended) Feb: None Provided Mar: Crime Watch – Dallas Police Dept. (5 Attended) Ashley Park Apartment: Plano Jan: Senior Meals (16 Attended) Feb: How to Open Accounts – Capital One (3 Attended) Mar: Community Gardens (0 Attended/rained out)

AGAPE ASHTON / WOODSTOCK Ashton Place Apartment: Galveston Jan: After School by American Agape Foundation (5 Attended) Feb: After School (6 Attended) Mar: After School (5 Attended) Woodstock Apartment: Arlington Jan: None provided. (Lack of Funding) Feb: None provided. (Lack of Funding) Mar: Submitted notice of future service: after school tutoring within 90 days Common Wealth White Rock Apartment: San Antonio Jan: Tax Preparation Assistance – City of San Antonio (6 Attended) Health Screening – Bally Fitness (0 Attended) Go Red for Women – American Heart Association (0 Attended) Feb: Tax Preparation Assistance (0 Attended) After School Valentine Day (8 Attended) Crime Watch (6 Attended) Community Events (low cost/free) (0 Attended) Mar: Tax Preparation – H&R Block (0 Attended) Spring Break Lunch Program (2 Attended) Nutrition and Health Courses (8 Attended) SOA Aguila Oaks Apartment: San Antonio Jan/Feb/Mar: No submissions

TEXAS STATE AFFORDABLE HOUSING CORPORATIONCOMPARISON OF BUDGETED TO ACTUAL OPERATING ACTIVITY

(For the Seven Months Ending March 31, 2007)

% of Annual

Revenues Budget Actual Budget

Servicing Revenue, Net of Subservicer Fees 427,000 248,668 58.24%

Multifamily Revenue 329,000 193,388 58.78%

Federal Home Loan Bank Note Income 110,000 60,094 54.63%

Asset Oversight Revenue 650,000 314,544 48.39%

Investment Revenue 160,000 184,546 115.34% jSingle Family 150,000 68,995 46.00%

TOTAL REVENUES 1,826,000 1,070,235 58.61%

ExpendituresSalaries & Payroll Related Expenditures 1,014,000 566,585 55.88%

Professional Services - Legal, Audit & IT 210,000 94,625 45.06%

Office & Equipment Lease 134,000 75,250 56.16%

Travel & Meals 98,000 37,114 37.87%

Interest on FHLB/Wells Fargo CDC Notes 75,000 48,468 64.62%

Sponsorships & Grants 12,500 3,950 31.60%

Marketing 30,500 4,331 14.20%

Insurance 23,500 13,384 56.95%

Professional Dues & Training 21,000 5,908 28.13%

Communication 16,000 10,750 67.19% kBank Fees & Charges 10,000 5,369 53.69%

Office Supplies 9,000 3,455 38.39%

Publications, Subscriptions, Office Maintenance 4,000 3,111 77.78%

Freight, Delivery & Postage 7,500 3,899 51.99%

Furniture, Equipment, & Software 10,000 15,416 154.16% lPrinting 3,000 608 20.27%

Program and Loan Administration 7,000 830 11.86%TOTAL EXPENDITURES 1,685,000 893,053 53.00%

NET INCOME 141,000 177,182 125.66%

Target Percentage = 58%

FY 2007

TEXAS STATE AFFORDABLE HOUSING CORPORATIONCOMPARISON OF BUDGETED TO ACTUAL OPERATING ACTIVITY

(For the Seven Months Ending March 31, 2007)

Explanation of Budget Variances:

j Revenue projections for Investment Income have been revised to $260,000 as budgeted revenue was too low.

Investment revenue as a percentage of the revised estimate equals 60% compared to the target of 50%.

k Communications expenditures through March are slightly over budget due to installation charges associated

with the change in long distance and internet providers from SBC to Time Warner Telecom.

The new contract with Time Warner Telecom, however, is expected to result in a saving of approximately

$431 per month as charges will decrease from approximately $900 to $469 per month. The savings will be

reflected in the second half of the budget year.

l The majority of the Corporation's fixed asset purchases were made during the first four months of FY 2007.

Additionally the Corporation incurred $4,270 in March to redesign the website which was not included

in the budget.

BOARD MEETING TEXAS STATE AFFORDABLE HOUSING CORPORATION

Held at the Offices of Texas State Affordable Housing Corporation

1005 Congress Avenue – Suite B-10 Conference Room Austin Texas 78701

April 13, 2007 at 10:30 am

Summary of Minutes Call to Order The Board Meeting of the Texas State Affordable Housing Corporation (the “Corporation”) was called to order by Jerry Romero, Chair, at 10:30 a.m., on April 13, 2007, at the offices of Texas State Affordable Housing Corporation, 1005 Congress Avenue – Suite B-10 Conference Room, Austin, TX 78701. Members Present Jerry Romero, Chair Jesse A. Coffey, Member Jo Van Hovel, Member Members Absent Thomas A. Leeper, Vice Chair Charles G. Rencher, Member Staff Present David Long, President Katherine Closmann, Executive Vice President Melinda Smith, Chief Financial Officer Paige McGilloway, Single Family Programs Manager David Danenfelzer, Multifamily Programs Manager Janie Taylor, Manager of Marketing and Development Pat Corser, Asset Oversight & Compliance Manager Gracie Jackson, Asset Oversight & Compliance Specialist Laura Ross, Corporate Secretary Cynthia Gonzales, Assistant Corporate Secretary Public Comment Please refer to Tab 3. Special Guests Bob Cole, AG Edwards Rob Dubbelde, Greenberg Traurig Elena Pienado, Texas Department of Housing and Community Affairs (TDHCA) Joseph Sherman, Rainbow Housing Assistance Corporation

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Reports Executive Vice President’s Report Ms. Closmann began by giving an update on the 501(c)(3) portfolio. Ms. Closmann referred the Board to the handout regarding the default notices. Ms. Closmann proceeded to go through the notices for the Board’s benefit. Ms. Closmann then turned the Board’s attention to the article that appeared in the Fort Worth Star Telegram called ‘Welcome to the Neighborhood’. Ms. Closmann noted that many of the assertions made in the article were incorrect. Ms. Closmann stated that staff had had a chance to meet with Representative Menendez about the article and he had requested that staff write a letter that pointed out the misstatements and set forth all the actions the Corporation had taken to rectify the problem. Ms. Closmann referred the Board to that letter which had been handed out along with a copy of the article. Ms. Closmann proceeded to go over the most important misstatements made in the article. Ms. Closmann pointed out that in the article the properties were referred to as “TSAHC-backed properties” when in fact the Corporation was a conduit issuer and did not have any ownership or management control over the properties. Ms. Closmann also noted that the article asserted that 93 % of the units were in default or foreclosure, which was an unfair depiction because it implied that 93% of the units were down and not in use. Ms. Closmann stated that this was not the case, that in fact the properties were up and running and the units were open to the residents. Ms. Closmann explained that 86% of the total outstanding debt for the 501(c)(3) properties was in first lien position and was not in default, but the remaining 14% of outstanding debt that was held in the subordinate position was where they were having problems making the debt service. Ms. Closmann pointed out that the article made an unfair comparison of the issuance costs for the program. Ms. Closmann noted that the article compared the issuance costs of the 501(c)(3) bonds to all state-wide bonds issued, which if compared to the issuance fees for housing bonds that were issued by TDHCA they were very comparable if not a little bit less. Ms. Closmann noted that the Corporation had not issued these bonds since 2002 because it became apparent that the structure was not feasible in the market. In light of questions that were raised during hearings and committee meetings, Mr. Romero asked for a few things to be cleared up. Mr. Romero asked for clarification as to the number of units in the portfolio and the number that were offline due to maintenance and Ms. Closmann confirmed that the 501(c)(3) portfolio had 8,700 units of which only 1 percent was offline. Ms. Closmann followed by explaining that most of those units taken offline were to be converted to multi-bedroom type apartments. Mr. Romero asked about the crime at these properties and Ms. Closmann confirmed that properties in the same area had similar crime rates and a comparable number of reports. Ms. Closmann further stated that the Corporation had added security measures to the asset oversight reports where each property was required to give Corporation staff their police report, and if problems were present then a crime prevention plan was required. Mr. Romero brought up one final point, a belief put forth at the various hearings that not enough had been done by the Corporation for these properties. Ms. Closmann stated that the Corporation had gone to the full length of their powers as a conduit issuer. Ms. Closmann pointed out that the bond documents gave the Corporation certain powers to do the compliance and asset oversight reviews, but that the Corporation didn’t have management control, ownership rights or foreclosure control. Ms. Closmann stated that the people who put up money for the bonds, the people at risk, were the ones that had the power to make those types of changes. Mr. Dubbelde with Greenberg Traurig continued to speak to this point.

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Ms. Closmann thanked the Asset Oversight and Compliance staff for the excellent job that they had done. Ms. Closmann stated that Mr. Dubbelde was going to help look into best practices from other states with regard to the conduit issuer’s role and rights. Ms. Closmann stated that in the next few months staff would be coming back before the Board with some policies to be adopted that would go in the next Request for Proposals (“RFP”) for the Multifamily Private Activity Bond (“PAB”) Program. Ms. Van Hovel inquired about the article, and Ms. Closmann explained that its author was Ms. Berard, a reporter for the Fort Worth Star Telegram. Ms. Closmann stated that Corporation had been speaking with Ms. Berard since October 2006. Ms. Closmann pointed out the misconception made in the article that Mr. Long wouldn’t meet with her when in fact staff had spoken with her several times. Ms. Closmann stated that she had been sent all the asset oversight reports and she had come to the Corporation’s office to review the financing documents and ask questions. Ms. Van Hovel inquired if she had spoken with staff further, and Ms. Closmann said that she had but that she wasn’t sure if Ms. Berard had fully understood the situation. Ms. Closmann confirmed that Ms. Berard had spoken with the property owners, as well as Standard & Poors. Mr. Dubbelde pointed out that the transactions were reviewed by several entities including Standard & Poors and MBIA and all had gone forward with the transaction. Mr. Romero inquired whether staff had heard back from any of the people the article and rebuttal had been sent to, and Ms. Closmann stated that at committee hearings people had recognized how the article had presented an unfair characterization of the situation. Ms. Closmann then turned the Board’s attention to the 501(c)(3) PILOT payments. Ms. Closmann refreshed the Board’s memory that many of the properties were not cash flowing, and so therefore they were not making the required PILOT payments. Ms. Closmann reiterated that the Corporation did not grant the property tax exemption, that it was granted under 11.182 of the Property Tax Code that granted property tax exemptions to Community Housing Development Organizations (“CHDOs”). Ms. Closmann stated that the deals financed under the 501(c)(3) program took advantage of this law, but during the financing of the properties, they were required by the Corporation to pay 25% to the taxing entities of what they would have owed in taxes. Ms. Closmann refreshed the Board’s memory to the PILOT payments compliance process that was passed by the Board last fall. Ms. Closmann confirmed that only one owner complied with the process, so the amount of money owed was unknown for the other properties. Ms. Closmann stated the importance of having that information so that if the property was sold or refinanced the title company would see that the payments needed to be paid off. Mr. Dubbelde noted that these payments would be recorded against the property as a credit lien. Discussion followed. Mr. Romero inquired and Mr. Dubbelde and Ms. Closmann confirmed that the PILOT program was not a requirement of this type of deal and that the Corporation had been the initial organization to institute the PILOT program to give money back to the communities. Ms. Closmann then turned the Board’s attention to a new single family bond program that staff was developing called the Homeworks Loan Program. Ms. Closmann explained it would be an employer-assisted home loan program for people at 80 percent and below AMFI who work for a company signed up to participate in the program. Ms. Closmann continued to explain the program. Ms. Closmann stated that staff was still doing market research and speaking with potential interested employers about their needs, and staff would come back to the Board soon to get approval on the mechanics of the program. President’s Report

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Mr. Long began by thanking the staff for all their hard work during session. Mr. Long thanked the Board for their commitment to the Corporation. Mr. Long reported that staff had been meeting with legislators regarding the bills that impacted the Corporation, as well as attending committee meetings and providing testimony. Ms. Van Hovel thanked Mr. Romero and Corporation staff for all their hard work during session. Single Family Lending Report Ms. McGilloway stated what a pleasure it was to work for the Corporation and with fellow staff. Ms. McGilloway expressed her appreciation in being able to do what the Corporation does for the State of Texas. Ms. McGilloway turned the Board’s attention to the single family programs, stating that since the Professional Educators Home Loan Program (“Professional Educators Program”) had been released on February 21, over $21 million of the $35 million had been committed. Ms. McGilloway stated that at this rate the $35 million would be fully funded in the next month. Ms. McGilloway refreshed the Board’s memory as to the $76 million in additional funds that had been awarded for the Professional Educators Program. Ms. McGilloway stated that calls had been conducted to finalize the release of the remaining $40 million of that award and noted that the Corporation still had access to the annual allotment of $25 million for the program so in addition to the remaining $40 million the $25 million would be released for a grand total of over $101 million for the 2007 Professional Educators Program. Ms. McGilloway stated her belief that these funds would likely last through November or December of this year. Ms. McGilloway then made the Board aware that the 2007 Firefighters and Law Enforcement or Security Officers Home Loan Program (“Homes for Texas Heroes Program”)had been released the previous Monday. Ms. McGilloway stated that the pricing had gone well, and the rate for the program was 6.15% which mirrored the Professional Educators Program. Ms. McGilloway informed the Board that she and Mr. Long would be attending the National Association of Local Housing Finance Agencies (“NALHFA”) Conference the following week in Seattle. Discussion followed regarding funding for the programs. Multifamily Lending Report Mr. Danenfelzer reported that staff had worked hard over the last month to put together the $36 million allocation under the PAB Program that was awarded to Rainbow Housing Assistance Corporation during the January Board Meeting. Mr. Danenfelzer informed the Board that the other awardee, NuRock Companies, had rescinded their award, because they were unable to secure site control over enough properties. Mr. Danenfelzer stated that these funds would be re-released with the deadline of May 27, 2007 for new submissions and responses to the RFP. Mr. Danenfelzer stated that staff was currently reviewing the 501(c)(3) Bond Program guidelines, as was statutorily required on an annual basis. Mr. Danenfelzer expressed staff’s desire that though the program wasn’t active at this time, it be made better and stronger every year. Mr. Danenfelzer stated his hope to bring these guidelines before the Board in May or June for their approval.

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Mr. Danenfelzer also informed the Board that he was working on the Direct Lending Program and the Interim Construction Land Acquisition Loan Program. Marketing and Development Report Ms. Taylor began by informing the Board that she, Ms. McGilloway and Ms. Ross had maintained a booth at the Association of Texas Professional Educators (“ATPE”) conference the previous month. Ms. Taylor stated that they had held a drawing for an IPod Nano which drew people to the booth and gave them an opportunity to hand out information on the Professional Educators Program. Ms. Taylor informed the Board that a half page ad would appear in both the May and August issues of ATPE’s publication. Ms. Taylor stated that she had also contacted the Texas Classroom Teachers Association who had added information on the program and the Corporation to their website. Ms. Taylor followed by noting that information on the program had been included in the March newsletter for the Texas Federation of Teachers. Ms. Taylor stated that once the funds were released for the Homes for Texas Heroes program, a press release would be issued. Ms. Taylor noted that staff would be attending the Texas Jail Association Conference in May. Ms. Taylor reminded the Board that this organization was comprised of 97% county jailers, a group eligible under the Homes for Texas Heroes program that had participated the least. Ms. Taylor also stated that she was working on a direct mail piece that would go out to all the members of the Texas Firefighters Association, as well as members of various law enforcement associations. Ms. Taylor announced to the Board that the Corporation would be receiving a $5,000 donation from Countrywide and Freddie Mac to use for marketing purposes. Ms. Taylor stated that staff was still discussing how to best use those funds. Ms. Taylor informed the Board that she would be attending the National Council of State Housing Agencies (NCSHA) Conference. Ms. Taylor stated that the conference would include a section on communications that she was looking forward to attending. Mr. Romero inquired if as a 501(c)(3) the Corporation could have sponsors for the website. Discussion followed, ending with staff stating they would look into that possibility. Mr. Long thanked the lenders for the huge role that they played in the programs. Mr. Long also thanked Ms. Ray with Cornerstone and Mr. Suddeth with WR Starkey for providing testimony at one of the committee hearings. Ms. Taylor then proceeded to go through the status of the legislative bills that staff had been tracking. Mr. Romero thanked Ms. Taylor and staff members for all their hard work during session. Financial Report Ms. Smith reported that through the end of February 2007 the Corporation had a profit of $187,000. Ms. Smith noted that the budget contained in the board packet did not reflect the single family program or related income and expenses. Ms. Smith stated that with the single family program included the Corporation had a profit of $471,000. Mr. Romero inquired about the single family line item, and Ms. Smith stated that this was attributed to issuer fees and lender contributions. Ms. Smith noted that all line items were on budget with the exception of the investment revenue which was over budget and fixed asset expenditures which was also over

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budget due to a purchase made at the beginning of the year. Ms. Smith noted that the communication line item was a little over budget, but the recent change in phone service would see a decrease in that number. Ms. Van Hovel requested that the communications line item be labeled in more detail so that it would be more easily know what it was referring to. After the financial report was given, Mr. Romero called for a brief recess at 11:30 am. Roll Call, Certification of Quorum The board meeting reconvened at 11:40 am and roll call was taken and it was certified that a quorum was present. Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board

Meeting held on March 9, 2007. Mr. Romero made a motion to approve the minutes of the Board Meeting held on March 9, 2007. Mr. Coffey seconded the motion. Motion passed unanimously. Tab 2 Presentation, Discussion and Possible Approval of a Resolution to Amend the

Alternative Lending Program (also known as the Single Family Affordable Homeownership Program for Texas) to Permit Access to such Program's funds by the Corporation's program known as the Single Family Interim Construction/Land Acquisition Loan Program.

Mr. Long began by refreshing the Board’s memory as to the history of the Affordable Homeownership Program. Mr. Long stated that the Corporation had worked with Ameriquest to create the program, where Ameriquest had agreed to commit $100 million in first lien loans while the Corporation would commit up to $2 million for down payment assistance in the way of repayable second lien loans. Mr. Long stated that due to current market conditions Ameriquest had decided to step back and reevaluate the program, which raised the possibility that they would withdraw from the program. Mr. Long informed the Board that if this occurred another mortgage partner would be sought by the Corporation for the program. Mr. Long stated that in the meantime, staff was asking that the $2 million be made available to Interim Construction Land Acquisition Program, which had been approved as one of the uses for the $1,050,000 award from Wells Fargo. Mr. Long recounted that those funds had been split between 3 different programs: down payment assistance, gap financing for the PAB Program, and the Interim Construction Land Acquisition Loan Program (“Interim Construction Program”). Mr. Long noted that because the set aside amounts were specified in the award, funds were limited for the Interim Construction Program. Mr. Long gave the Board a brief summary of the Interim Construction Program which would serve small projects that lacked the essential financial resources to complete construction. Mr. Long stated that the demand for this program was higher then the funds available to it could cover. Mr. Long confirmed that it was not staff’s intention to do away with the Affordable Homeownership Program. Mr. Long confirmed that staff was asking for the original $2 million that was authorized by the Board to be set aside for the Affordable Homeownership Program be also made available to the Interim Construction Program. Mr. Long confirmed that Ameriquest would not be involved in the Interim Construction Program. Discussion followed. Mr. Romero stated that the Board’s approval would not be necessary to make the deals, but requested that the

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Board be informed when deals were closed under the program. Discussion continued regarding the program. Mr. Romero made a motion to approve a resolution to amend the Alternative Lending Program (also known as the Single Family Affordable Homeownership Program for Texas) to permit access to such program's funds by the Corporation's program known as the Single Family Interim Construction/Land Acquisition Loan Program. Ms. Van Hovel seconded the motion. Motion passed unanimously. Tab 3 Presentation, Discussion and Possible Approval of a Resolution Regarding

the Submission of a calendar year 2007 Application for Allocation of Private Activity Bonds, Notice of Intention to Issue Bonds and State Bond Application to the Texas Bond Review Board and Declaration of Expectation to Reimburse Expenditures with Proceeds of Future Debt for the Rainbow/Texas Portfolio Project and other matters incident and related thereto.

Mr. Danenfelzer began by giving a summary of the transaction, beginning with refreshing the Board’s memory as to the award of $35 million made by the Board at the January meeting to Rainbow Housing Assistance Corporation. Mr. Danenfelzer noted that at that time the borrower had proposed to use the money for 12 properties and had since changed that to 13 properties totaling 1,014 units. Mr. Danenfelzer explained that all units involved were acquisition rehab properties with Section 8 housing assistance program vouchers. Mr. Danenfelzer explained the financing for the transaction as well as gave the description of and the location information for the properties involved. Mr. Danenfelzer also spoke to the borrower’s experience and what they were committed to providing. Mr. Danenfelzer stated that after staff reviewed the original response to the RFP along with all the documentation regarding the individual properties, it was the staff’s belief that the project would be financially feasible as proposed. Mr. Danenfelzer noted that staff did not have access to market analysis, appraisals or property condition assessments, but they would be getting that information along with doing the full underwriting of the properties prior to bringing it back before the Board for the final vote. Mr. Danenfelzer stated that while the Corporation had not received any direct letters showing community support, a vote by proxy of the residents of the properties had shown overwhelming support for the rehabilitation. Mr. Danenfelzer informed the Board that TEFRA hearings would be conducted throughout the month of May and possibly into June with regard to each of the 13 properties. Mr. Romero inquired how the process for the PAB Program was different from that of the 501(c)(3) bond program. Mr. Danenfelzer explained that the difference lay in the financial structure. Mr. Danenfelzer spoke to this in more detail. Discussion followed. Mr. Romero asked Ms. Closmann if the new guidelines for Asset Oversight and Compliance would be in effect for use at these properties and Ms. Closmann stated her hope that they would. Ms. Closmann noted that staff was working with general counsel about other measures to make sure that enforcement and compliance was as good as it could be in the conduit issuer position. Ms. Van Hovel inquired about whether the Corporation would have the power to change the management and Ms. Closmann spoke to this, stating that staff had made sure to include a clause giving the Corporation the right to consent on the management in the RFP. Ms. Closmann reiterated the scope of the Corporation’s power with regard to the 501(c)(3) properties.

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Mr. Dubbelde stated that staff was looking into what the possibilities were for an organization in the Corporation’s position. Mr. Dubbelde stated the Corporation would not be in the position to switch out management but there would be consent rights over new managers. Mr. Coffey inquired after the rate on the subordinate bonds and Mr. Dubbelde explained that the final rates were not yet known. Discussion followed. Mr. Sherman made a presentation to the Board regarding the transaction and the properties involved and proceeded to answer the Board’s questions. Mr. Danenfelzer stated that staff recommended the Board approve the inducement resolution regarding the submission of a calendar year 2007 application for allocation of private activity bonds, notice of intention to issue bonds and state bond application to the Texas Bond Review Board and declaration of expectation to reimburse expenditures with proceeds of future debt for the Rainbow Texas Portfolio Project. Ms. Van Hovel made a motion to approve the resolution regarding the submission of a calendar year 2007 application for allocation of private activity bonds, notice of intention to issue bonds and state bond application to the Texas Bond Review Board and declaration of expectation to reimburse expenditures with proceeds of future debt for the Rainbow/Texas Portfolio Project and other matters incident and related thereto. Mr. Coffey seconded the motion. Motion passed unanimously. Tab 4 Presentation, Discussion and Possible Approval of the Texas State

Affordable Housing Corporation Investment Policy. Ms. Smith explained that the Public Funds Investment Act required that the board approve the Corporation’s Investment Policy on an annual basis. Ms. Smith noted that there had not been any changes made to the Policy and there had not been any changes made to the Act that would require changes being made to the Policy. Mr. Coffey made a motion to approve the Texas State Affordable Housing Corporation Investment Policy. Ms. Van Hovel seconded the motion. Mr. Romero asked that the dates that the Policy was approved by the Board be added to the Policy. Motion passed unanimously. Tab 5 Presentation, Discussion and Possible Approval of the Texas State

Affordable Housing Corporation’s Investment Broker Listing. Ms. Smith noted that the Public Funds Investment Act required that the Board approve the Corporation’s Investment Broker Listing. Ms. Smith explained that these were brokers the Corporation’s investment advisor had recommended that the Corporation use. Ms. Smith made the Board aware that Bank of America had accidentally been left off the list and was meant to be included. Ms. Van Hovel made a motion to approve the Texas State Affordable Housing Corporation’s Investment Broker Listing including Bank of America. Mr. Coffey seconded the motion. Mr. Romero abstained from voting. Motion passed. Tab 6 Presentation and Discussion of the Corporation’s 2006 Annual Report.

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Ms. Taylor asked the Board to review the Annual Report and let her know of any comments or questions they might have. Mr. Romero suggested that another paragraph identifying the total amount of grants and contributions received by the Corporation be listed under the ‘Other Services’ page. Mr. Romero also asked that the Annual Report be sent electronically to the Board Members not present at the meeting so that their input could be provided. Tab 7 Presentation, Discussion, and Possible Approval to Confirm Laura Ross

(previously Laura Smith) as Secretary of the Corporation. Mr. Long explained that the resolution was just an opportunity to make all documents consistent with Ms. Ross’s married name. Mr. Romero made a motion to approve the confirmation of Laura Ross (previously Laura Smith) as Secretary of the Corporation. Ms. Van Hovel seconded the motion. Motion passed unanimously. Open Meeting After discussion, it was determined that the next Board Meeting would be held on May 11, 2007, at 10:30 am. Mr. Long noted that he would not be present at the meeting, but that Ms. Closmann would be there in his place. Mr. Romero asked that the meeting time be confirmed with the Board Members not present at the meeting. Adjournment Mr. Coffey made a motion to adjourn the meeting. Ms. Van Hovel seconded the motion. Motion passed unanimously. The Texas State Affordable Housing Corporation Board Meeting was officially adjourned at 12:50 pm. Respectfully submitted by________________________________________________ Laura Ross, Corporate Secretary

45909642.1/10615592

RESOLUTION NO. 07-__

TEXAS STATE AFFORDABLE HOUSING CORPORATION

Resolution Authorizing the Remarketing, Sale and Delivery of Single Family Mortgage Revenue Bonds (Professional Educators Home Loan Program) Series 2007A-3; Authorizing a Remarketing Memorandum, a Series Supplement, an Origination, Sale and Servicing Agreement, a Bond Purchase Agreement and Continuing Disclosure Agreement, Making Certain Findings and Determinations; Authorizing the Execution of Documents and Instruments Necessary or Convenient to Carry Out the related 2007 Texas State Affordable Housing Corporation Professional Educators Home Loan Program; and Containing Other Matters Incident and Related Thereto

WHEREAS, the Texas State Affordable Housing Corporation (the �Issuer�) has been duly created and organized pursuant to and in accordance with the provisions of the Texas Non-Profit Corporation Act, Article 1396-1.01 et seq. Vernon's Annotated Texas Civil Statutes, as amended and under the authority of Subchapter Y of Chapter 2306, Texas Government Code, as amended (the �Act�), the Issuer is authorized to establish a program to provide eligible professional educators whose income does not exceed 115 percent of the area median family income, adjusted for family size, with low-interest home mortgage loans; and

WHEREAS, the Board of Directors of the Issuer has heretofore determined to adopt and implement a 2007 Texas State Affordable Housing Corporation Professional Educators Home Loan Program (the �Program�) to provide eligible professional educators meeting the requirements of the Act with low interest home mortgage loans; and

WHEREAS, section 103(a) and section 143 of the Internal Revenue Code of 1986, as amended (the �Code�), provide that the interest on obligations issued by or on behalf of a state or a political subdivision thereof the proceeds of which are to be used to finance owner-occupied residences shall be exempt from federal income taxation if such issue meets certain requirements set forth in said section 143; and

WHEREAS, the Issuer issued its Single Family Mortgage Revenue Bonds (Professional Educators Home Loan Program) Series 2007A-2 in the aggregate principal amount of $39,563,000 (the �Series 2007A-2 Bonds�) pursuant to a Trust Indenture dated as of February 1, 2007 (the �Original Indenture�) between the Issuer and Wells Fargo Bank, National Association, as trustee (the �Trustee�); and

WHEREAS, the Issuer desires to remarket the Series 2007A-2 Bonds into Long-Term Bonds (as defined in the Original Indenture) and hereinafter defined as the Bonds, as provided in the Original Indenture as supplemented by a 2007A-3 Series Supplement dated as of June 1, 2007 between the Issuer and the Trustee (the �Series Supplement� and together with the Original Indenture, the �Indenture�); and

WHEREAS, in order to carry out the Program, the Issuer, Wells Fargo Bank, National Association (the �Trustee�), a servicer/administrator to be determined by the Issuer, as Servicer/Administrator (the �Servicer/Administrator�) and various commercial lending institutions doing business in the State of Texas (the �Participants�), will enter into an Origination, Sale and

45909642.1/10615592 2

Servicing Agreement (the �Agreement�), pursuant to which: (a) the Issuer will indicate its intent to issue its bonds in an amount sufficient to enable the Issuer to acquire Government National Mortgage Association mortgage-backed certificates (the �GNMA Certificates�), Fannie Mae mortgage-backed securities (the �Fannie Mae Certificates�) and Freddie Mac mortgage-backed securities (the "Freddie Mac Certificates") each backed by certain qualified home mortgage loans made to eligible professional educators (the �Mortgage Loans�); (b) the Trustee will disburse funds on behalf of the Issuer to acquire the GNMA Certificates, the Fannie Mae Certificates and the Freddie Mac Certificates and to perform certain other duties in connection with the Program; (c) the Servicer/Administrator will be responsible for monitoring the Participants� performance, preparing certain periodic reports, and performing certain other duties, including servicing the Mortgage Loans, in connection with the Program; (d) the Participants will originate and sell the Mortgage Loans; and (e) the Issuer, the Trustee, and the Servicer/Administrator and the Participants will each perform certain actions and follow reasonable procedures to ensure compliance with Section 143 of the Code and the Act; and

WHEREAS, the Program has been designed to provide down payment and closing cost assistance to the mortgagors as provided in the Agreement; and

WHEREAS, the Issuer believes that the addition of the down payment assistance feature and the interest rate or rates associated with the Mortgage Loans will make the Program attractive to potential mortgagors; and

WHEREAS, in order to carry out the Program, the Board of Directors of the Issuer has determined that the Issuer presently intends to remarket and cancel the Series 2007A-2 Bonds through the issuance of its Single Family Mortgage Revenue Bonds (Professional Educators Home Loan Program) Series 2007A-3 (the �Bonds�), in the maximum aggregate principal amount of not to exceed $39,563,000 pursuant to and as generally described in the Indenture, thereby making funds available for acquiring GNMA Certificates, Fannie Mae Certificates and Freddie Mac Certificates, all under and in accordance with the Constitution and laws of the State of Texas; and

WHEREAS, the Issuer further proposes to sell the Bonds, upon the issuance thereof, to RBC Dain Rauscher Inc., Morgan Keegan & Company, Inc. and any other firms designated in the Bond Purchase Agreement hereinafter defined (collectively, the "Purchaser"), all as referenced in the Bond Purchase Agreement between the Issuer and the Purchaser (the "Purchase Agreement"); and

WHEREAS, there have been presented to the Issuer and its advisors proposed forms of each of the following and all of which comprise a part of this Resolution:

1. the Series Supplement;

2. the Agreement;

3. the Continuing Disclosure Agreement by and between the Issuer and the Trustee (the �Disclosure Agreement�);

4. the Purchase Agreement; and

5. the Remarketing Memorandum relating to the Bonds (the �Remarketing Memorandum�).

45909642.1/10615592 3

WHEREAS, the Issuer finds the form and substance of the above-listed documents (hereinafter, collectively the �Bond Documents�) to be satisfactory and proper and finds the recitals with regard to the Issuer contained therein to be true, correct and complete and hereby determines to proceed with the issuance and sale of the Bonds to carry out the Program, the execution of such documents and the taking of such other actions as may be necessary and appropriate in connection therewith;

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE TEXAS STATE AFFORDABLE HOUSING CORPORATION:

Section 1. Approval of Program. That the Issuer hereby expresses its intent to implement the Program, as described more fully in the Agreement, under which the Trustee, on behalf of the Issuer, will acquire GNMA Certificates, Fannie Mae Certificates and Freddie Mac Certificates, backed by mortgages on residences in the State of Texas owned and occupied by eligible professional educators.

Section 2. Public Purposes of Program and Bonds. That the Issuer hereby finds, determines, recites and declares that the adoption and implementation of the Program, including the down payment assistance and the interest rate or rates to be borne by the Mortgage Loans, and the issuance of the Bonds will promote the public purposes set forth in the Act, including, without limitation, assisting eligible professional educators in acquiring and owning adequate, safe and sanitary housing.

Section 3. Issuance, Execution and Delivery of the Bonds. That the issuance of the Bonds in the maximum aggregate principal amount of not to exceed $39,563,000 is hereby authorized, all under and in accordance with the Indenture, and that, upon execution and delivery of the Indenture, the officers of the Issuer are each hereby authorized to execute and attest the Bonds and to deliver the Bonds to the Trustee for authentication all as provided in the Indenture. The Bonds shall mature on the date or dates and in the amounts, shall bear interest and shall be subject to redemption prior to maturity on the date or dates and in the amounts as specified in the Indenture.

Section 4. Approval, Execution and Delivery of the Series Supplement. That the Series Supplement, in substantially the form and substance as presented to the Board of Directors at the meeting at which this Resolution was considered, with such changes or additions thereto as may be approved by the Chairperson, Vice Chairperson, President or Executive Vice President of the Issuer (upon the advice of bond counsel to the Issuer), as evidenced by the execution of the Series Supplement by said Chairperson, Vice Chairperson, President or Executive Vice President, is hereby approved and that the proper officers of the Issuer are each hereby authorized and directed to execute and attest the Series Supplement and to deliver the Series Supplement to the Trustee.

Section 5. Approval, Execution and Delivery of the Agreement. That the Agreement in substantially the form and substance of the Agreement presented to the Board of Directors at the meeting at which this Resolution was considered, with such changes or additions thereto as may be approved by the Chairperson, Vice Chairperson, President or Executive Vice President of the Issuer (upon the advice of bond counsel to the Issuer), as evidenced by the execution of the Agreement by said Chairperson, Vice Chairperson, President or Executive Vice President, is hereby approved and that the proper officers of the Issuer are each hereby authorized and directed to execute and attest the Agreement and to deliver the Agreement to the Trustee, the Servicer/Administrator and each Participant.

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Section 6. Purchase Agreement and Sale of Bonds. That the sale and delivery of the Bonds to the Purchaser, upon the terms and conditions set forth in the Purchase Agreement between the Issuer and the Purchaser is hereby authorized and approved. The Bonds shall be sold to the Purchaser at the purchase price specified in the Purchase Agreement. The Issuer hereby authorizes the Chairperson, Vice Chairperson, President or Executive Vice President of the Issuer, either individually or in any combination of such officers, for and on behalf of the Issuer, to determine the actual Purchaser and the terms of the Purchase Agreement and to execute and deliver the Purchase Agreement. Upon execution by the parties thereto and delivery thereof, the Purchase Agreement shall be binding upon the Issuer in accordance with the terms and provisions thereof. In addition, the officers of the Issuer are each authorized and directed to execute any necessary certificates evidencing approval of any or all of the matters set forth in this Section 6. In the event it becomes necessary to engage any other investment banking firm or investment banking firms to assist in the sale of the Bonds, the President or the Executive Vice President of the Issuer shall be and hereby is authorized to engage the services of any such investment banking firm or firms.

Section 7. Approval, Execution and Delivery of the Disclosure Agreement. That the Disclosure Agreement, in substantially the form and substance of the Disclosure Agreement presented to the Board of Directors at the meeting at which this Resolution was considered, with such changes or additions thereto as may be approved by the Chairperson, Vice Chairperson, President or Executive Vice President of the Issuer (upon the advice of bond counsel to the Issuer), as evidenced by the execution of the Disclosure Agreement by said Chairperson, Vice Chairperson, President or Executive Vice President, is hereby approved and that the proper officers of the Issuer are each hereby authorized and directed to execute and attest the Disclosure Agreement and to deliver the Disclosure Agreement to the Trustee.

Section 8. Approval, Execution, Use and Distribution of Remarketing Memorandum.The Board hereby authorizes and approves the Preliminary Remarketing Memorandum and the changes to the Preliminary Remarketing Memorandum which will result in the final Remarketing Memorandum proposed to be delivered in connection with the sale of the Bonds (the �Official Statements�), in substantially the form and substance approved by the Chairperson, Vice Chairperson, President or Executive Vice President of the Issuer (upon advice of bond counsel to the Issuer) as evidenced by their execution thereof and the Chairperson, Vice Chairperson, President and Executive Vice President of the Issuer are each, individually, hereby authorized and directed, for and on behalf of the Issuer, to execute the Preliminary Remarketing Memorandum and the Remarketing Memorandum. Delivery to the Purchaser of the Preliminary Remarketing Memorandum and the Remarketing Memorandum is hereby authorized.

Section 9. Execution and Delivery of Other Documents. That the officers of the Issuer are each hereby authorized to consent to, accept, execute and attest such other agreements, investment agreements, assignments, bonds, certificates, contracts, documents, instruments, releases, financing statements, offering documents, letters of instruction, written requests and other papers, whether or not mentioned herein, as may be necessary or convenient to carry out or assist in carrying out the purposes of this Resolution, the Program and the issuance, sale and delivery of the Bonds.

Section 10. Power to Revise Form of Documents. That, notwithstanding any other provision of this Resolution, the Chairperson, Vice Chairperson, President, Executive Vice President, Secretary and any Assistant Secretary of the Issuer are each hereby authorized to make or approve such revisions in the form of the Bond Documents as, in the opinion of counsel

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to the Issuer or bond counsel, may be necessary or convenient to carry out or assist in carrying out the purposes of this Resolution and the Program.

Section 11. Delegation to President or Executive Vice President. The President and Executive Vice President of the Issuer, either individually or jointly, are hereby authorized to approve the principal amount(s), maturity or maturities and designation(s) of the Bonds to be issued pursuant to this Resolution, in one or more series or subseries, to establish the interest rate or rates to be borne by the Bonds, provided, however, that the interest rate shall never exceed 15% per annum and to determine the rate or rates on the Mortgage Loans, provided however, that such rate shall not exceed 10% per annum. The President and Executive Vice President of the Issuer, either individually or jointly, are further authorized to engage the services of consultants that may be needed, in the opinion of such officer, to fully complete the issuance and delivery of the Bonds.

Section 12. Ratification of Certain Prior Actions. That all prior actions taken by or on behalf of the Issuer in connection with the Program and the Bonds, are hereby authorized, ratified, confirmed and approved.

Section 13. Purposes of Resolution. That the Board of Directors of the Issuer has expressly determined and hereby confirms that the issuance of the Bonds and the implementation of the Program accomplish a valid public purpose of the Issuer by assisting eligible professional educators in the State of Texas to obtain adequate, safe and sanitary housing, thereby promoting the public health, welfare and safety for professional educators in the State of Texas.

Section 14. Limited Obligations. That the Bonds and the interest thereon shall be limited obligations of the Issuer payable solely from the revenues, funds and assets pledged under the Indenture to secure payment of the Bonds and under no circumstances shall the Bonds be payable from any other revenues, funds, assets or income of the Issuer.

Section 15. Obligations of Issuer Only. That the Bonds and the interest thereon shall not constitute an indebtedness, liability, general, special or moral obligation or a pledge or loan of the faith or credit or taxing power, within the meaning of any constitutional or statutory provision whatsoever, of the State of Texas or any other political subdivision or governmental unit of the State of Texas.

Section 16. Conflicting Prior Actions. That all orders, resolutions, or any actions or parts thereof of the Board of Directors of the Issuer in conflict herewith are hereby expressly repealed to the extent of any such conflict.

Section 17. Authorization of Investment. That the Board of Directors of the Issuer hereby authorizes the Chairperson, Vice Chairperson, President or Executive Vice President of the Issuer to direct the Trustee to invest any funds received by the Trustee pursuant to the Indenture in Investment Securities specified in the Indenture.

Section 18. Effective Date. That this Resolution shall be in full force and effect from and upon its adoption.

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PASSED, APPROVED AND EFFECTIVE this May 11, 2007.

TEXAS STATE AFFORDABLE HOUSING CORPORATION

______________________________Chairperson

ATTEST:

______________________________Secretary