Illinois Housing Development Authority Finance Committee met Feb. 21.
Here is the minutes provided by the committee:
The meeting of the Finance Committee of the Illinois Housing Development Authority took place on February 21, 2020 at 111 East Wacker Drive, Chicago, Illinois at 10:00 a.m. Attending the meeting were Mr. King Harris, Mr. Darrell R. Hubbard, Ms. Sonia Berg, Mr. Sam Tornatore, and Mr. Thomas Morsch for the Members. Also attending the meeting were Mr. Peter Weiss of J.P. Morgan, Ms. Stephanie Konrath and Ms. April Lepic of Zions Bank, Mr. Jonathan Glover of BNY Mellon, Mr. Nick Vallorano of Mayer Brown LLP, Ms. Merci Stahl and Mr. Patrick McCluskey of U.S. Bank, Ms. Susan Jun of Citi, Mr. Kevin Barney of Kutak Rock LLP, Mr. Scott Graham of Wilmington Trust, N.A., Mr. Paul Haley and Mr. Albert Luong of Barclays, and Mr. Nick Fluehr of Wells Fargo. For the Authority staff, Ms. Kristin Faust, Ms. Tracy Grimm, Ms. Tara Pavlik, Mr. Tim Hicks, Ms. Maureen Ohle, Ms. Debbie Olsen, Mr. Andrew Nestlehut, Ms. Christine Moran, Mr. Timothy Klont, Mr. Richard Ess, and Mr. Tim Veenstra.
Mr. Hubbard called the meeting to order at 10:08 a.m.
Mr. Hubbard motioned to approve the January 17, 2020 Finance Committee Meeting minutes as presented.
ONGOING ACTIVITIES
Discussion: Monthly Interim Financial Statements.
Mr. Hicks stated: Operating Revenues for YTD are $30.6M which is $4.3M favorable to budget and Administrative Reimbursements YTD are $9.6M which is $1.0M favorable to budget. Key Drivers for the favorability in Operating Revenues is Investment Income of $4.6M offset by lower Origination Fees down $0.4M and Ongoing Fees down $0.1M.
Mr. Hicks continued: Operating Expenses for the Admin Fund YTD are $26.2M which is $5.0M favorable to budget while the Operating Expenses for the Government Funds YTD are $7.7M which is $0.9M favorable to budget. For the Admin Fund the key drivers for being favorable to budget are driven for Salaries and Benefits $2.3M, Professional Fees $1.7M, Financing Costs $0.7M, and Training & Public Relations favorable $0.3M. For the Government Funds the key driver is Salaries and Benefits which is favorable $1.2M offset by Professional Fees which is unfavorable by $0.4M.
Mr. Hicks concluded: Operating Revenues for the Admin Fund and Administrative Reimbursements are favorable $0.8M and $1.1M respectively. Operating Expenses for the Admin Fund are flat to prior year while the Expenses for the Governmental Funds are favorable to prior year by $0.9M. Favorability for the Government Fund is driven by Professional Fees $0.1, Financing Cost $0.2M, Office Administration $0.3, and Technology Management $0.1M which are mostly related to the wind down of the Hardest Hit Fund Program.
Discussion: Multifamily Update.
Ms. Moran stated: Since the last board meeting, we went to loan committee with our preliminary project assessments which is the pre-application for the 9% housing tax credit rounds. Those applications will be due on March 23. That is a program that is three times over-subscribed. We expect to receive about 60 or so applications and hopefully fund 20-22 projects depending on the resource requests.
Discussion: Homeownership Mortgage Program Update.
Ms. Pavlik stated: Reservations for January 2020 were at 525 first mortgage loans or $74.97 million, 298 or $45.17 million for GNMA and 227 or $29.80 million for Fannie Mae. Prior year reservation comparisons for the month of December were at $40.93 million, $24.38 million for GNMA and $16.55 million for Fannie Mae.
Ms. Pavlik continued: For January 2020, IHDA Mortgage Statistics consisted of 257 Access Mortgage Loans accounting for 49% or $35.79 million, 261 1stHomeIllinois loans accounting for 50% or $38.52 million, and 7 I-Refi loans accounting for 1% or $0.66 million with a total of 525 loans and $74.97 million. Within the Access Mortgage Program usage is as follows: 4% Forgivable accounted for 73%, 5% Deferred accounted for 15%, and 10% Repayable accounted for 12%. Program percentages were 10% for the Central, 63% for Chicago, 17% for the Northwest, and 10% for the Southern regions respectively.
Ms. Pavlik concluded: There are 1,407 loans in the pipeline at a total of $198.87 million. Timing from reservation to approved for purchase is 48 days average, 55 days average from reservation to purchase.
NEW BUSINESS
Resolution Authorizing the Issuance of Revenue Bonds 2020 Series A.
Mr. Nestlehut stated: The 2020 Series A Bonds is a tax-exempt new money bond (“Offered Bonds”) and include tax-exempt fixed rate bonds The Offered Bonds are special limited obligations of the Authority. The collateral supporting the Series A bonds are single family mortgage backed securities. The Offered Bonds will be issued on a parity basis with all previously issued Bonds in Revenue Bonds indenture. The purpose of the Offered Bonds is to facilitate new money to redeploy capital for future originations and lock in long-term spread for the Authority. The Offered Bonds will create additional subsidy for future use of the Authority.
Mr. Nestlehut continued: The 2020 Series A Bonds are Fixed Rate debt with new money issuance with AAA rated securities and a Planned Amortization Class (“PAC”) Bond. The 2020 Series A Bonds are not to exceed $150,000,000 in aggregate principle with a final maturity date no later than 35 years after issuance. The bond interest rate is not to exceed 5.5% per annum. A projected schedule and list of transaction participants was shared.
Resolution Ratifying Establishment of Loan Loss Reserve.
Mr. Hicks stated: The loan loss went up about $30K for the Proprietary Fund, the Governmental Fund is going up about $334K attributable mainly to one project, the Brown Shoe factory loan. Overall the total loan loss for all funds is $66.7 million. In the Mortgage Participation Certificate Program, the loan loss is coming down from $1.9 million to $1.7 million, with a total loan loss of $68.5 million.
Resolution Authorizing the Issuance of Multifamily Housing Revenue Bonds Series 2020 (Park Tower).
Mr. Ess stated: IHDA will issue Multifamily Housing Revenue Bonds, Series 2020 (Park Tower) to finance the acquisition and rehabilitation of Park Tower containing 134 units located in Joliet. The Bonds will be collateralized by cash proceeds of an FHA-insured loan pursuant to the 223(f) insurance program. This is conduit financing; publicly offered, fixed rate, short-term tax-exempt bonds expected to have a AAA rating by Moody’s. These are limited obligation with no credit risk to the Authority (no IHDA G.O.).
Mr. Ess continued: The issuance of MHRB Series 2020 (Park Tower) in aggregate not to exceed $12,500,000. The issue will have a final maturity no later than March 1, 2025 with an interest rate not to exceed 5% per annum. A projected schedule and list of transaction participants was also shared.
Mr. Hubbard adjourned the meeting at 10:21 a.m.
https://www.ihda.org/wp-content/uploads/2020/04/Finance-Committee-Minutes.pdf
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