ILLINOIS HOUSING DEVELOPMENT AUTHORITY December 16, Those present (unless otherwise noted below as absent): Member (telephonic participation)

Transcription

1 ILLINOIS HOUSING DEVELOPMENT AUTHORITY Pursuant to notification given December 14, 2016, the Members of the Illinois Housing Development Authority (the Authority ) met for a regular scheduled meeting on, at the offices of the Authority, 111 East Wacker Drive, Suite 1000, Chicago, Illinois. Those present (unless otherwise noted below as absent): BOARD: King Harris Karen Davis Cristina Castro Mary Kane Harlan Karp William Malleris Alyssa Rapp Sam Tornatore STAFF: Audra Hamernik Debbie Olson Maureen Ohle Nandini Natarajan Colleen Synowiecki Christine Moran Michelle Adams Neil O Callaghan Vanessa Boykin Nicki Pecori Fioretti Tim Veenstra Tracy Wortham Peter Sellke John Chung Monica Enriquez Gabe Herrero Matthew Rangel Michael Ansani GUESTS: Rachel Smith Scott Schmitt Barbara Feldon Jennifer Fredericks Mike Countryman Merci Stahl Rose Bohm Jusplci Rez Chairman Vice Chairperson Member Member Member Member (telephonic participation) Member (telephonic participation) Member Executive Director Chief of Staff General Counsel Chief Financial Officer Executive Coordinator Director, Multifamily Financing Director, Administrative Services Managing Director, Information Technology Comptroller Director, Community Affairs Director, Asset Management Director, Human Resources Director, Hardest Hit Fund Assistant Director, Finance Structuring Assistant Director, Community Affairs Multifamily Financing Multifamily Financing Asset Management Mayer Brown U.S. Bank BAML BNYM BNYM BNYM BNYM BNYM

2 Page 2 of 11 Brian Hollenback Josie Kotsioris Scott Ruffer Jeff Head Kim McInver Bill Klaus Hallas Kossel David Block KWGO Linda Fulkerson James Boulk GROWTH Baker Tilley Gardner Capital Habitat Habitat Habita Evergreen Churchill Brinshore Development NWSHC I. Call to Order & Roll Call With a physical quorum consisting of Chairman Harris, Vice Chairperson Davis, Ms. Castro, Ms. Kane, Mr. Karp and Mr. Tornatore, Chairman Harris called the meeting to order at 10:00 a.m. Ms. Rapp joined the meeting via conference call via ****. Mr. Malleris joined the meeting via conference call via ****. A roll call was taken. Chairman Harris congratulated Ms. Castro on her election to the Illinois State Senate. He stated that this would be Ms. Castro s last meeting to serve as a member of the Authority s Board of Directors and thanked her for her years of service. Chairman Harris introduced the Leadership Academy participants and congratulated them. II. Consent Agenda: Chairman Harris noted that there were seven (7) Resolutions on the consent agenda. He asked the Members if anyone had comments or wanted to remove any resolution from the consent agenda. Mr. Malleris stated that he is pleased that the Section 811 Program will continue with the rental assistance. He said this is an important program and was part of a large effort that he dedicated himself to over the years. Mr. Malleris also said he is pleased about the on-going efforts of the Rental Housing Support Program and the efforts to establish a reserve are very important. A motion to adopt the Consent Agenda Resolutions was made by Mr. Malleris and seconded by Ms. Davis; roll call was taken and seven (7) Resolutions noted below were adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Karp, Mr. Malleris, Mr. Tornatore and Ms. Rapp. 1. Minutes A. 16-IHDA-180: Resolution Approving the Minutes of the Meeting of the Members of the Illinois Housing Development Authority held on November 18, 2016.

3 Page 3 of General Administrative Matters A. 16-IHDA-181: Resolution Electing Secretary of the Authority. 3. Other Matters A IHDA-182: Resolution Authorizing Extension of the Closing Dates and an increase in Rental Assistance Amounts for All Approved Section 811 Rental Assistance Projects. B IHDA-183: Resolution Amending and Authorizing Federal Tax Credits for Huntington and Wheeling Tower. C IHDA-184: Resolution Amending Funding Allocations for a Permanent Supportive Housing Development Program. D. 20-IHDA-185: Amendment to Resolution Regarding the Cook County Foreclosure Mediation Program. E IHDA-186: Resolution Authorizing the Requisition and Disbursement of Funds under the Rental Housing Support Program for the Program Reserve. III. Chairman Harris indicated that the Additional Resolutions noted on the Agenda would now be discussed. 1. Grant Programs A. Executive Director Hamernik introduced the following agenda item: 16-IHDA-187 Resolution Authorizing Grants for Counseling and Education Services under the Foreclosure Prevention Program. Ms. Enriquez stated that the Authority is the administrator of the Foreclosure Prevention Program ( Program ) and the Illinois Mortgage Foreclosure Act requires a fee to be paid into the Foreclosure Prevention Fund ( Fund ) in connection with residential real estate foreclosures. She then stated that pursuant to the Program, the Authority intends utilize an amount not to exceed $4,140,000 ( Grants ) from the Fund and distribute the funds to housing counseling agencies, non-for-profit community based organizations, and the City of Chicago to provide education about the foreclosure process and counseling to homeowners through in-person contact, as well as training for counseling staff (collectively, Counseling and Education Services ). She further stated that the counseling agencies, not-for profit community based organizations, and the City of Chicago as described on Exhibit B attached to the Resolution, (collectively, Recipients ) have applied to the Authority (or, in the case of the City of Chicago, a statutory distribution) for Grants from the Program to cover costs of the Counseling and Education Services; a summary of the Program is described in Exhibit A attached to the Resolution.

4 Page 4 of 11 Ms. Enriquez stated that the Grants will have terms of one year and prior to the expiration of the term, the Authority will assess the performance of each of the Recipients and if the performance is satisfactory, as determined by the Authority in the Authority s sole discretion, the Authority may extend the term of any Grant for an additional one year; provided however, that the extension of the term of any Grant shall be pursuant to a resolution passed by a majority of the Members of the Authority. A motion to adopt the Resolution was made by Ms. Kane and seconded by Ms. Davis; roll B. Executive Director Hamernik introduced the following agenda item: 16-IHDA-188 Resolution Authorizing Grants under the Affordable Housing Trust Fund Home Accessibility Program. Ms. Enriquez stated that the Authority has been designated the program administrator of the Illinois Affordable Housing Program ( Trust Fund Program ) and that the Authority has developed an accessibility repair program ( Home Accessibility Program ) to be active for a total of ten years to occur in two-year terms and each two-year term will be subject to a resolution passed by a majority of the Members of the Authority. She then stated that the Authority will offer grants ( Grants ) through the Home Accessibility Program on the terms and conditions described in Exhibit A ( Summary ) attached to the Resolution to units of local government and non-profit organizations ( Sponsors ) which will provide financing to senior citizens and persons with disabilities for repairs that will allow them to remain in their homes. She further stated that pursuant to Resolution No IHDA-066, the Authority approved the use of $3,000, of funds from the Trust Fund Program to carry out the purposes of the Home Accessibility Program for the first two-year term of the Home Accessibility Program ( First Term ) and the Sponsors set forth on the attached Exhibit B have applied to the Authority for Grants from the Home Accessibility Program s First Term to provide the Financing to eligible households. Chairman Harris thanked Mr. Malleris and all of the advocacy groups for pushing this program through. Mr. Malleris stated that 16 years ago, December of 2000, this effort was initiated by the Illinois Housing Task Force (a consumer task force of persons with disabilities, chaired by Lester Pritchard). In 2001, the bill was passed, but no funds were available, in 2003 $1 million was taken away from the program, in 2006 the Authority approved funding. Today there is a 10 year commitment. This was a tremendous effort and he appreciates it. A motion to adopt the Resolution was made by Mr. Malleris and seconded by Chairman Harris; roll call was taken the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Karp, Mr. Malleris, Mr. Tornatore and Ms. Rapp. Out of an abundance of caution Ms. Olson did not participate in the Loan Committee discussion regarding these Grants.

5 Page 5 of Multifamily Transactions A. Executive Director Hamernik introduced the following agenda item: 16-IHDA-189 Resolution Authorizing State Tax Credits for Habitat Northern Mr. Herrero stated that Authority is the agency ( State Tax Credit Agency ) to allocate State of Illinois Affordable Housing Tax Credits ( State Tax Credits ) to housing projects. He then stated that Habitat for Humanity of Northern Fox Valley ( Owner ) has applied to the Authority for FY17 State Tax Credits in connection with the Habitat Northern 2016 Project in the amount 185,663. Mr. Malleris stated that he is pleased with the number adaptable & accessible units. A motion to adopt the Resolution was made by Ms. Castro and seconded by Mr. Karp; roll B. Executive Director Hamernik introduced the following agenda item: 16-IHDA-190 Resolution Authorizing a Conduit Loan, State Tax Credits and Permanent Loan for Brewster-Hosmer RAD Conversion. Mr. Rangel stated that the Authority administers a program known as the Multifamily Housing Revenue Note Program whereby the Authority acquires funds to make loans (individually, a Conduit Loan ) for affordable housing developments through the issuance of tax exempt multifamily housing notes ( Notes ); immediately upon the closing of a Conduit Loan, such Conduit Loan is assigned to a third party, to be determined on or before the closing date of such Conduit Loan. He also stated that the Authority administers a program known as the Risk Sharing Program wherein the Authority makes mortgage loans to borrowers, which loans are credit enhanced through insurance provided by the United States Department of Housing and Urban Development ( HUD ). He then stated that Freeport RAD I, LLC ( Owner ) has requested that the Authority make a Conduit Loan, in an amount not to exceed $13,000,000.00, for the acquisition and rehabilitation of a multifamily housing development described in Exhibit A attached to the Resolution and known as Brewster-Hosmer RAD Conversions ( Project ). Mr. Rangel further stated that the Owner has applied to the Authority for FY17 State Tax Credits in connection with the Project in the amount 3,605,000. He then stated that the Owner has requested the Authority make a first position permanent loan upon construction completion under the FFB/542(c) Risk Sharing Program from funds provided by FFB and credit enhanced under the FFB/542(c) Risk Sharing Program, in an

6 Page 6 of 11 amount not to exceed $2,400, ( FFB Risk Sharing Loan ) for the permanent financing of the Project. Mr. Malleris stated that he was pleased with the 100% adaptable and accessible units. A motion to adopt the Resolution was made by Mr. Malleris and seconded by Mr. Karp; roll 3. Bond Transactions A. Executive Director Hamernik introduced the following agenda item: 16-IHDA-191 Resolution Authorizing the Issuance of Not to Exceed $13,000,000 Aggregate Principal Amount of Multifamily Housing Revenue Bonds, Series 2016 (Brewster-Hosmer Apartments). Mr. Chung stated that this Resolution authorizes the issuance by the Authority of not to exceed $13,000,000 in aggregate principal amount of its Multifamily Housing Revenue Bonds, 2016 Series (Brewster-Hosmer Apartments) (the Bonds ). This Resolution also authorizes the Authority to enter into a Bond Issuance Agreement, Loan Agreement and Tax Regulatory Agreement in substantially the forms attached to this Resolution, setting forth the terms of the Bonds She then stated that the Bonds would be issued to provide funds to be applied to make a loan to Freeport RAD I, LLC (the Borrower ), to finance the acquisition, construction and equipping of the Brewster Apartments and the Mary Hosmer Apartments which will then be issued as variable rate Bonds with interest rates and a final maturity date to be established. The Bonds will be a special limited obligation and will not be a general obligation of the Authority. She further stated that issuance of the Bonds will require the use of volume cap in an aggregate amount not to exceed $13,000,000. A motion to adopt the Resolution was made by Ms. Kane and seconded by Mr. Karp; roll B. Executive Director Hamernik introduced the following agenda item: 16-IHDA-192 Resolution Authorizing the Issuance of Not to Exceed $75,000,000 Housing Bonds, Series 2017A. Mr. Chung stated that this Resolution authorizes the issuance of not to exceed $75,000,000 Housing Bonds, 2017 Series A (the 2017A Bonds ). The 2017 Series A Bonds would be issued to provide funds to be applied, together with other available funds, for the purpose of any or all of the following: (a) refunding existing bonds with respect to existing mortgage loans pertaining to the developments listed on Exhibit E to this Resolution; (b) making a Reserve Fund deposit or paying the cost of a Cash Equivalent for the Reserve Fund; and (c) paying costs of issuance of the 2017 Series A Bonds.

7 Page 7 of 11 The 2017 Series A Bonds will be general obligations of the Authority. This Resolution also authorizes the selection of one or more credit enhancement facilities and providers for the 2017 Series A Bonds. The forms of credit enhancement for the 2017 Series A Bonds may be, if determined to be beneficial, bond insurance, debt service reserve surety bonds, liquidity facilities, interest rate caps or swaps, and/or letters of credit. To the extent the 2017 Series A Bonds are issued as variable rate bonds, this Resolution also authorizes the selection of one or more remarketing agents for the 2017 Series A Bonds. This is a delegation Resolution. A motion to adopt the Resolution was made by Ms. Davis and seconded by Ms. Kane; roll C. Executive Director Hamernik introduced the following agenda item: 16-IHDA-193 Resolution Authorizing the Issuance of Not to Exceed $100,000,000 Revenue Bonds, Series 2017 Series A and 2017 Series B. Mr. Chung stated that this Resolution authorizes the issuance of not to exceed $100,000,000 aggregate principal amount of its Revenue Bonds, Series 2017A (MBS Pass-Through Program) (the 2017 Series A Bonds ) and 2017 Series B (the 2017 Series B Bonds, and together with the 2017 Series A Bonds, the 2017 Series A and B Bonds ) in one or more series at the same time or at different times. This Resolution is a delegation resolution. The 2017 Series A and B Bonds are to be issued on or before September 30, 2017 pursuant to a Revenue Bonds General Indenture (the General Indenture ). He further stated that the General Indenture authorized by Resolution 2016-IHDA-008 adopted February 19, 2016 permits the issuance of multiple series of bonds from time to time (the Bonds ), including the 2017 Series A and B Bonds, as special limited obligations, with a claim to payment solely from, and secured on a parity with each other by, property and revenues pledged under the General Indenture. Mr. Chung then stated that this Resolution authorizes the use of amounts from the Administrative Fund of the Authority or other sources available to the Authority to pay costs of issuance of the 2017 Series A and B Bonds and to make contributions to the various funds and accounts held under the General Indenture, including contributions to pay costs of issuance of, and capitalized interest on, the 2017 Series A and B Bonds and other necessary costs or expenses relating thereto, a contribution in the form of cash or securities for deposit to the credit of the appropriate fund or funds held under the General Indenture, including the sale or other transfer of Mortgage-Backed Securities (or participation interest therein) owned and held by the Authority in its Administrative Fund or other Authority funds, and a contribution to pay all or a part of the cost of acquiring one or more Mortgage-Backed Securities (or participation interest therein) owned and held by the Authority in its Administrative Fund or other Authority funds. This Resolution also authorizes the setting aside of amounts in the Administrative Fund equal to up to twenty percent of the proceeds of the 2017 Series A and B Bonds for up to one year from the date of issuance of the 2017 Series A and B Bonds for use to finance mortgage loans (or mortgage-backed securities backed by mortgage loans) in areas of the State qualifying as targeted areas under the Internal Revenue Code, in order to satisfy applicable requirements for issuing the

8 Page 8 of Series A and B Bonds on a tax-exempt basis. The proceeds of the sale of the 2017 Series A and B Bonds, together with other available funds, may be used (i) to finance previously originated qualifying mortgage loans through the purchase of Mortgage-Backed Securities owned and held by the Authority in its Administrative Fund or other Authority funds (or participation interests in such Mortgage-Backed Securities), (ii) to pay the costs of issuing the 2017 Series A and B Bonds, (iii) to pay accrued interest and capitalized interest on the 2017 Series A and B Bonds, if required, and/or (iv) to finance second-lien loans for down payment assistance or closing cost assistance that will not be subject to the lien and pledge of the General Indenture. The 2017 Series A and B Bonds, if issued on a tax-exempt basis, would be expected to use volume cap from the Authority s 2014 or 2015, as applicable, carryforward in an amount not exceeding $100,000,000. A motion to adopt the Resolution was made by Chairman Harris and seconded by Ms. Castro; roll call was taken the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Karp, Mr. Malleris, Mr. Tornatore and Ms. Rapp. 4. Asset Management Transactions. A. Executive Director Hamernik introduced the following agenda item: 16-IHDA-194 Resolution Authorizing Transfer of Physical Assets, Assignment and Assumption and Modification of Loan and Regulatory Agreement, Short Term Subordination and Pay Down of Principal for East Park Apartments. Mr. Ansani stated that on September 27, 1994, the Authority made a mortgage loan under the HOME Investment Partnerships Program in the original principal amount of $4,285,676 ( Loan ) to East Park Limited Partnership ( Owner ) for the acquisition, construction and permanent financing of a housing development commonly known as East Park Apartments located in Chicago, Illinois ( Project ). He then stated that pursuant to the terms of the Loan, the Loan accrues interest at.50% per annum ( Interest Rate ), the Owner is required to make an annual payment in an amount equal to 50% of the net cash flow, if any, from the Project ( Repayment Terms ), and the outstanding balance of the Loan is scheduled to mature on September 1, 2024 ( Maturity Date ) and that the Owner is requesting to transfer 100% of its ownership interest in the Project to East Park Redevelopment Limited Partnership ( New Owner ), and New Owner desires to assume the obligations of the Owner under the Loan, the Regulatory Agreement governing the Project, and all other documents evidencing the Loan ( Transfer and Assumption ). Mr. Ansani further stated that in connection with the Transfer and Assumption, the Regulatory Agreement executed by the Owner in connection with the Loan, shall be amended to require a replacement reserve to be held by the Authority (the Regulatory Amendment ) and that the New Owner has requested that the Authority modify the Loan, simultaneously with the closing of the Transfer and Assumption, for the purpose of improving operations at the Project and addressing items in need of rehabilitation, as follows: (i) amend the Interest Rate to 2.20% per annum; (ii) amend the Repayment Terms

9 5. Other IHDA Board Meeting Page 9 of 11 to require an annual payment in an amount equal to 75% of net cash flow, if any, from the Project; and (iii) extend the Maturity Date to September 1, 2054 (collectively, with the Regulatory Amendment, the Loan Modification ), all as more fully described in the summary of the Project ( Summary ) attached to the Resolution. He also stated that the New Owner has requested that the Authority agree to subordinate the Loan simultaneously with and effective as of the closing of the Transfer and Assumption to an equity bridge loan in the amount of $9,164, during the term of the rehabilitation of the Project ( Construction Subordination ); upon completion of such rehabilitation, the Loan will revert to a first position lien on the Project and the New Owner will pay down the outstanding principal balance of the Loan to a reduced outstanding principal balance of $3,775,676 ( Pay Down ). Mr. Malleris inquired about the number of units that would be upgraded. The sponsor stated that those upgrades are outlined in the renovation details and that the units are all different. A motion to adopt the Resolution was made by Chairman Harris and seconded by Mr. Karp; roll call was taken the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Karp, Mr. Malleris and Mr. Tornatore. Ms. Rapp abstained from voting. A. Resolution Authorizing the Development of the Hardest Hit Fund Reverse Mortgage Assistance Program. Mr. Sellke stated that the Authority submitted a successful proposal to Treasury for the use of funds allocated to the HHF Program to develop and implement the Illinois Hardest Hit Fund Homeowner Emergency Loan Program ( HHF HELP ) in order to help prevent foreclosures and stabilize housing markets in Illinois. He then stated that the Authority and Treasury entered into that certain Commitment to Purchase Financial Instrument and HFA Participation Agreement, as amended and as may be further amended from time to time (collectively, HFA Agreement ) and that the Authority is requesting to make certain changes to the terms and conditions of HELP. He further stated that the Authority submitted a proposal to the Treasury requesting to access funds allocated to HELP to establish a program known as the HHF Reverse Mortgage Assistance Program ( RMA Program ), whereby the Authority would make short term forgivable loans to assist qualified homeowners with a reverse mortgage in paying off any property expense arrearage and up to two years of projected property expenses of a primary residence in Illinois, up to a maximum of $35, and the Authority has determined it is in its best interest to establish the RMA Program and access the funds from HELP for the RMA Program, subject to the terms and conditions set forth on Service Schedule B-1, which is attached to the Resolution as Exhibit A ( Term Sheet ), that sets forth the material terms and conditions of the RMA Program; the Term Sheet is currently under review by Treasury

10 Page 10 of 11 and such terms and conditions may hereafter be revised pursuant to modifications requested by Treasury. Mr. Tornatore asked if this mortgage program is helping people who already have reverse mortgages. Chairman Harris asked what would happen after the 2 year period. Mr. Sellke stated that this is to help folks already in a reverse mortgage, as defined by HUD. The Authority has housing counselors and would help homeowners go through their financials to discuss options. Mr. Malleris stated that this program is very flexible and helps people with disabilities. He is happy the Authority is offering this program especially with the rise in interest rates. Ms. Davis asked how many households would qualify for this program. Mr. Sellke stated approximately would qualify, but the Authority will only have the capability to assist 500. Mr. Tornatore stated that this is a great program to assist those homeowners in need, but asked if there are any laws to protect against predatory lenders. Chairman Harris stated that the settlement funds the Attorney General s office received have been used to help with this situation and they have held the banks involved responsible. A motion to adopt the Resolution was made by Mr. Malleris and seconded by Chairman King; roll call was taken the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Karp, Mr. Malleris, Mr. Tornatore and Ms. Rapp. IV. Chairman Harris indicated that the Committee Minutes would now be considered. 1. Finance Committee Report, Ms. Kane presented the Finance Committee Report from the meeting. Ms. Kane recommended the Members approval of the minutes from the November 18, 2016 Finance Committee meeting. A motion to adopt the Resolution was made by Ms. Kane and seconded by Mr. Tornatore; roll 2. Audit Committee Report, Vice-Chair Davis presented the Audit Committee Report from the meeting. Vice-Chair Davis recommended the Members approval of the minutes from the September 16, 2016 Asset Management Committee meeting. A motion to adopt the Resolution was made by Vice-Chair Davis and seconded by Mr. Tornatore; roll call was taken the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Karp, Mr. Malleris, Mr. Tornatore and Ms. Rapp.

11 Page 11 of 11 V. Written Reports: Chairman Harris referred the Members to the electronic Board book material for the following reports: Hardest Hit Fund, Authority Financial Statements, Contract List, and IHDA Investment Portfolio. VI. VII. Public Comments other than responses to Member questions during the course of the meeting, no public comments were made. Adjournment: Chairman Harris adjourned the meeting at 10:45 a.m.