Official Board Packet

Transcription

1 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 Thursday, January 19, :30 p.m.

2 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 January 19, 2006 at 12:30 pm AGENDA CALL TO ORDER, ROLL CALL CERTIFICATION OF QUORUM Jerry Romero 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 David Long Executive Vice President s Report Katherine Closmann Single Family Lending Report Paige McGilloway Multifamily Lending Report Katherine Closmann Asset Oversight & Compliance Report Emily Lah Annual Asset Oversight Report 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 December 9, Tab 2 Tab 3 Tab 4 Presentation, Discussion and Possible Approval of a Resolution Authorizing the Issuance, Sale and Delivery of Single Family Mortgage Revenue Bonds (Professional Educator Home Loan Program) Series 2006A; Authorizing a Trust Indenture, an Origination, Sale and Servicing Agreement, Purchase Contract and Continuing Disclosure Agreement, Making Certain Findings and Determinations; Authorizing the Execution of Documents and Instruments Necessary or Convenient to Carry Out a 2006 Texas State Affordable Housing Corporation Professional Educator Home Loan Program and Containing Other Matters Incident and Related Thereto. Presentation, Discussion and Possible Approval of a Resolution relating to the Corporation's Professional Nursing Program Faculty Home Loan Program and Containing Matters Incident and Related Thereto Presentation, Discussion, and Possible Approval of a Resolution Approving Amendments to the Trust Indenture Executed in Connection with the Corporation's Multifamily Housing Revenue Bonds (American Housing Foundation Portfolio) Series 2002; and Other Matters Related Thereto. CLOSED MEETING Consultation with legal counsel on legal matters Texas Government Code Deliberation regarding purchase, exchange, lease, or value of real property Texas Government Code Deliberation regarding prospective gift or donation to the state or Texas State Affordable Housing Corporation Texas Government Code Personnel Matters Texas Government Code Implementation of security personnel or devices Texas Government Code 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 Smith, ADA Responsible Employee, at

3 , x 400 or Relay Texas at 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.

4 President s Report Discussion

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9 Month Texas State Affordable Housing Corporation's 2005A Professional Educators As of July 18, 2005 thru January 5, 2006 % of # of Loans Total Loans Total Originated % of Total Origination Jun % $ 1,303,437 7% Jul % $ 2,211,792 12% Aug % $ 3,127,246 18% Sep % $ 4,128,732 23% Oct % $ 2,971,645 17% Nov % $ 2,986,371 17% Dec % $ 942,824 5% Jan % $ 150,000 1% Feb % 0% Mar % 0% Apr % 0% Totals % $ 17,822, % $ 0 Originated Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Total Total % Ft. Worth Mortgage $ 297, % Valley Mortgage Corp $ 178, % CTX Mortgage Corp $ 318, % Countrywide Funding Corp $ 2,707, % Ryland Mortgage $ 385, % Wells Fargo Home Mtg $ 1,702, % Texas Captial $ 794, % Willow Bend Mtg $ 255, % 1st Nat'l Bk dba 1st Comm $ 112, % SFMC - Service 1st Mtg $ 441, % First Continental Mortgage $ 268, % NTFN Inc./ Premier Nat'l $ 94, % Northstar Bank of TX $ 101, % New Century Mortgage $ 124, % Fairway Independent Mtg $ 76, % Home Loan Corp $ 862, % Market Street Mortgage $ 1,536, % Hammersmith Financial $ 288, % Rocky Mountian Mortgage $ 905, % RBC $ 212, % Judith O. Smith Mtg $ 578, % First Horizon Home Loan $ 502, % Cornerstone Mortgage Co. $ 253, % McAfee $ 319, % Chase Manhattan Mtg $ 98, % DHI Mortgage Co $ 501, % Milestone Mortgage $ 327, % Universal American Mtg $ 311, % Wachovia Mtg Corp $ 945, % WR Starkey $ 491, % Prime Lending Inc $ 804, % Residental Home Lending $ 1,022, % Total Committed $ 17,822, % Un-committed allocation Non-Targeted Amount $ 1,313,953

10 2005 PE Loan Chart $20,000,000 $18,000,000 $17,822,047 $16,000,000 $14,000,000 $12,000,000 $10,000,000 Bond Closed July 27th, 2005 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 $1,303,437 $2,211,792 $3,127,246 $4,128,732 $2,971,645 $2,986,371 $942, $150,000 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 Totals

11 Month # of Loans Texas State Affordable Housing Corporation's 2005B Homes for Heroes As of October 25, 2005 thru January 5, 2006 % of Total Total Loans Originated % of Total Origination Sep % $ 277,073 5% Oct % $ 1,040,076 17% Nov % $ 3,164,757 52% Dec % $ 1,502,971 25% Jan % $ 84,333 1% Feb % 0% Mar % 0% Apr % 0% May % 0% Jun % 0% Jul % 0% Aug % 0% Totals % $ 6,069, % $ 0 Originated Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Total Total % Ft. Worth Mortgage 0 0% Valley Mortgage Corp $ 75, % CTX Mortgage Corp $ 600, % Countrywide Funding Corp $ 1,517, % Ryland Mortgage $ 151, % Wells Fargo Home Mtg $ 487, % Texas Captial 0 0% 1st Nat'l Bk dba 1st Comm 0 0% SFMC - Service 1st Mtg $ 153, % NTFM Inc./ Premier Nat'l $ 133, % New Century Mortgage $ 98, % Home Loan Corp. $ 88, % Market Street Mortgage $ 195, % Cornerstone Mtg $ 83, % McAfee $ 1,278, % Chase $ 84, % Milestone Mtg $ 112, % Universal American Mtg $ 234, % Wachovia Mtg Corp $ 126, % American Home Mortgage $ 282, % Residental Home Lending $ 364, % Total Committed $ 6,069, %

12 2005B Homes for Heroes Loan Chart $7,000,000 $6,000,000 $6,069,210 $5,000,000 Bond Closed October 25, 2005 $4,000,000 $3,164,757 $3,000,000 $2,000,000 $1,000,000 $0 $277,073 $1,040,076 $1,502,971 $84, Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Totals

13 Multifamily Lending Report Discussion

14 Agape Ashton/Woodstock, Inc. Ashton Place Woodstock LI Occupancy 75% 84% VLI Occupancy 34% 61% NHT/GTEX Project Portfolio Quarterly Compliance Status for TSAHC As of Second Quarter Ending Ashley Park Champions Green Chelsea Court Kressington Place Victoria Place Riverwalk Timberlodge LI Occupancy 75% 76% 75% 76% 76% 75% 75% VLI Occupancy 33% 22% 20% 21% 20% 21% 20% HIC Arborstone Baybrook, LLC Arborstone Baybrook Crescent Oaks LI Occupancy 87% 87% 95% VLI Occupancy 22% 23% 22% White Rock LI Occupancy 76% VLI Occupancy 22% Commonwealth Multifamily (White Rock), LLC American Housing Foundation Settler's Cove Cimarron Park Pine Creek Stony Creek Bent Creek Creekwood Village Shadowridge LI Occupancy 79% 87% 81% 78% 83% 93% 87% VLI Occupancy 46% 42% 57% 51% 65% 62% 63% Aston Brook Northwoods One Willow Chase One Willow Park Woodedge Fountaingate LI Occupancy 79% 81% 79% 82% 80% 79% VLI Occupancy 52% 33% 55% 59% 41% 23% South Texas Affordable Properties Corporation Charleston Remington Summer Oaks The Rafters The Wharf Willowick LI Occupancy 80% 80% 79% 78% 78% 79% VLI Occupancy 24% 23% 29% 24% 22% 22% American Opportunity for Housing, Inc. Clover Hill Hillcrest Briarcrest Mill Creek One Westfield LI Occupancy 86% 81% 77% 90% 83% VLI Occupancy 55% 55% 41% 53% 45% San Antonio Low Income Housing, LLC Aguila Oaks LI Occupancy 79% VLI Occupancy 23% * LI Occupancy statistic is inclusive of the VLI Occupancy statistic.

15 American Agape Foundation Inc. Property Name # of Units Location Ashton Place Lasker Dr. Galveston TX TSAHC Asset Oversight Portfolio 2005 Annual Report Audit Date Occup. as of Nov. 15 th Avg. Occup. Annual Summary 4/25/05 93% N/A Finding: Variance reports and YTD financial statements were not provided. All requested financial reports must be submitted to TSAHC staff no later then May 25, (Completed 6/16/05) There is currently $5, owed in delinquent water bills. The manager must provide TSAHC with a write plan of action on how they will collect the outstanding balances no later then May 25, (Completed 12/21/05) Observations: None of the pre-audit reports were submitted before the audit. It is suggested that next year all of the requested reports be submitted prior to the deadline. Pool chemicals are being stored in the pool pump room which is in the boiler room. The maintenance staff removed the chemicals to a storage room while the audit was still being done. The laundry room had graffiti and a broken window. This is going to be addressed by the management. Staff needs proper fair housing and compliance training. It is suggested that the maintenance staff also attend the fair housing training and the office staff should attend compliance training. The property is having trouble keeping up with all the new move ins. It is suggested that they use contractors to help get the units ready. The keys are not being logged out and in. It is suggested that all keys that are handed out to staff, vendors, and residents are properly signed out and in. The vendor locks are marked red. It is suggested that the staff remove the paint for safety issues. Woodstock Apartments Washington Cir. Arlington TX /18/05 67% 51%* 7 month avg. Findings: NSF records were not provided. All requested NSF reports and ledgers must be submitted to TSAHC staff no later then May 18, (Completed 12/21/2005) Variance reports and YTD financial statements were not provided. All requested financial reports must be submitted to TSAHC staff no later then May 18, (Completed 6/16/05) Manager does not have a system for tracking lease expirations, monitoring their renewal status or a process for trying to get resident to renew. The staff must start to track lease expirations and put a program in place for the complete renewal process. A letter on property letterhead must be sent to TSAHC no later then May 18, 2005 detailing what changes have been made to the renewal process. (Completed 12/21/2005) 1

16 Observations: Work orders can not be tracked or monitored. It is recommended that the property use a work order log so that they can properly track work orders. None of the pre-audit reports were submitted before the audit. It is suggested that next year all of the requested reports be submitted prior to the deadline. Staff needs proper fair housing and compliance training. It is suggested that the maintenance staff also attend the fair housing training. One of 53 vacant units is make ready. It is suggested that staff have more units made ready to so that they can capture more leases and have more units to show prospective residents. American Housing Foundation Property Name # of Units Location Aston Brook Apartments Walters Rd Houston TX Audit Date 1 st Visit 2/8/05 12/5/05 Occup. as of Nov. 15 th Avg. Occup. 96% 1 st Visit 92% 94% Annual Summary First Visit Observations: Unit 211 (Boswell) had 3 NSF checks during a period of nine months and has not been put on a cash account. Unit 314 (Shitiabayi) also had 3 NSF checks and has not be put on a cash only account. The key tags had the apartment number written on them in pencil. This was corrected before the end of the audit. The pool pump room was not locked. Both doors need to be locked. There also was a flammable product being stored next to the pump. That needs to be removed. Both of these issues were corrected while the auditor was still on property. Second Visit Finding: The electrical outlet in Boiler Room #1 needs to be repaired. There is a gap between the electrical outlet and the wall. This is a safety issue and must be repaired within 24 hours. In response to this review, Property Manager must submit to TSAHC, no later than 1/6/06, a statement on company letterhead that states that this has been corrected and photographs of the repair. (Completed 12/13/05) Observations: Part of the counter top in the 2 nd laundry room was removed over the weekend. It is recommended that the laundry facilities are clean and maintained. There is a large hole next to the water drain near building 8. The day of the review, the hole was repaired. Property staff submitted pictures of the repair and a statement from Property Manager stating that the repair was made. No further action. There was an exposed cable wire protruding through a water drain. The maintenance staff immediately found that the cable wire was not in use and removed the cable wire so that it was no longer a tripping hazard. It is strongly recommended that Property staff walk the property on a daily basis to ensure that there is no tripping hazards or any other issues that may need to be addressed. 2

17 Part of the counter top in the 2 nd laundry room was removed over the weekend. It is recommended that the laundry facilities are clean and maintained. Property unit keys are coded; however there is an obvious pattern. Property key codes need to be changed to a random pattern. Currently any vendors, past employees, and others would be able to identify the unit number of the keys. This is a major safety concern. Work order log has a column for the date the work orders were followed up on; however staff is not utilizing the column. It is recommended that staff begin utilizing this column. YARDI does not allow work order reports to be printed. Staff is entering work orders in YARDI. It is recommended that YARDI be updated so that a report can be printed to track work orders. Property Maintains a work order log; however work order log does not have sufficient information to determine who long it is taking staff to complete a work order. It is recommended that the log be modified to include the date that the resident reported the work order. Bent Creek Apartments Forest Ln Dallas TX st Visit 1/11/05 6/23/05 80% 1 st Visit 79% N/A First Visit Observations: Carports are not being properly maintained. It is suggested that the property evaluate the condition of all carports and make the needed repairs. Management has worked with the residents who had trouble paying their December rent. Any balances that are still outstanding by the end of January will be filed on. It is highly recommended that the staff follow through with this plan. Second Visit Observations: There are lots of sections of soil that is exposed and eroding. It is suggested that the property reseed the grounds. Both laundry rooms are missing their smoke alarms. It is strong recommended that they be replaced. There are a lot of ants in the office. It is suggested that the staff have their pest control services spray the office. Extremely high amount of delinquent rent for the end of the month and for the low occupancy. It is strongly recommended that every unit how owes rent is walked and for the units that are not vacant they are filed on. Outstanding NSF checks from April have not been collected. It is suggested that the staff start the eviction process for the two residents with the outstanding NSF checks from April and nonpayment of rent for May. The property has been audited three times in the past 1 ½ years. Every time there has been a different staff and regional manager. The property is suffering and a stable management team would help this property overcome its problems. Cimarron Park Apartments Montgomery Park Blvd. Conroe TX st Visit 1/25/05 7/7/05 91% 1 st Visit 95% 96% First Visit Finding: The playground is dangerous due to no rails on the upper walkway, missing wood in the walkway, and the slide is coming apart. The playground needs to roped off with caution tape within 24 hours along with signs warning the residents that it is dangerous to use. The equipment 3

18 must be removed within 60 days. A letter on company letterhead must be sent to Emily Lah with TSAHC no later then 65 days from the date of the finding. This letter must state what action has been taken and be accompanied by a photo of what the playground area now looks like. (Completed 2/12/05) Second Visit Observations: The staff was not tracking renewals. The property needs to be doing a renewal binder so that they can track renewal trends. The property has a very low renewal rate. It is suggested that the property try new renewal tactics to get residents to renew. The staff is either not documenting traffic or has extremely low traffic. It is recommended that the staff track all traffic correctly. Work orders are taking over 72 hours to complete. It is suggested that work orders be completed in a timely manner. The property does not have a community crime prevention group. It is suggested that the property staff start holding crime watch meetings every month with their residents to help prevent crime. In the area of the property where the old playground was located there is a very large dead tree. This should be removed for safety reasons. Creekwood Village Apartments Audelia Ln Dallas TX st Visit 1/10/05 5/9/05 93% 1 st Visit 82% 85% First Visit Observation: Trees need trimmed. Regional manager stated that it will be done this year. It is recommended that the property follow through with this decision. Second Visit Observations: Property is not tracking renewals on the computer or in a written log. It is suggested that staff create a way to track renewals. There is an extremely high number of vacant unmade ready units. It is suggested that more units be made ready so that leasing staff has a variety of units to show and ones that are ready for imminent move in. Work orders are not being completed and updated in a timely manner. Unit 1616 has the back windows blocked out and security cameras in the front and back windows. It is recommended that staff ask the resident to remove the window coverings and cameras from the windows. The property has some minor and major repairs that need to be done. It is suggested that all repairs that can be done within the budget and with capital reserve funds are done as soon as possible. Fountaingate Apartments Tower Dr Wichita Falls TX st Visit 3/28/05 91% 1 st Visit 93% First Visit Observations: Pool and hot water heater area is a safety hazard. Recommended that the maintain staff clean and organize the area. 4

19 9/19/05 93% Staff is smoking in the door way of the office, office smells of smoke. Recommended that the staff find a area away from door to smoke. Units are being shown that are not ready. Recommended that each unit floor plan is available to show prospects. The delinquency report is extremely high. Recommended that all resident account ledgers be audited and corrected. Second Visit Finding: Units 2/158 and 2/119 are both down units due to water damage coming through the exterior walls. The property is required to get both units corrected and made ready no later then October 20, A letter notifying TSAHC of their completion along with photographs and other documentation needs to be received by October 24, (Completed 11/2/05) Observations: The buildings have problems with wood rot, and poor paint. It is strongly recommended that the buildings have the wood and siding corrected and then a full paint job. The roads on the property have large pot holes and are cracking. It is suggested that the roads be repaired properly. Northwoods Apartments Cypress Trace Houston TX st Visit 1/18/05 8/1/05 96% 1 st Visit 91% 90% First Visit Finding: A tree in the playground area was broken off but was propped up on another tree. This is a huge safety issue since it could fall on a child. This must be removed within 24 hours. A letter stating that it is complete should be sent to TSAHC within 48 hours. (Completed 12/12/05) Observations: The playground had 2 broken swings. It is suggested that the swings be fixed. Work orders are not being completed in the system. It is recommended that the staff complete work orders in the system on a regular basis. Evictions have not been filed for the month and it is after the 15 th. Several are from December. It is highly recommended that the property file evictions on the 15 th of every month. Make ready dates are not accurate on reports. It is recommended that the dates be corrected. NSF check policy not being followed. The NSF check policy should be followed. All staff needs to attend Fair Housing training. It is huge risk to not have staff properly trained in Fair Housing. The property has had an excusive amount of stolen vehicles and vehicle break-ins. It is highly suggested that the property staff come up with a 12 month action plan to curb crime on the property. Second Visit: Finding: Property did not provide a copy of the police report. Property submitted crime statistics; however it does not state what area this is for and it is not in the standard police report format for the City of Houston. In response to this review, provide a copy of the police report for the months of May 2005 July Ensure that this report is for the property location; and that you have documentation to 5

20 support that this information was provided by the City of Houston police department. (Completed 10/18/05) Observations: The property signs do not have the EHO logo. A temporary copy can be downloaded at and temporarily place on the window next to the front door of the Property office. You should also place an order with HUD s free direct distribution center at The EHO logo s item identification is Once the EHO logo is received from HUD, you should permanently place either on the Property sign or on the window next to the front door of the Property office. Property staff was using key track but is now manually keeping track of work orders. Work order log is missing the dates the work orders were completed; therefore unable to determine how long it took to respond to work orders. Units are not turned in a timely manner. 84 % of the vacant units are not ready. Ensure that units are turned in a timely manner. Property is not updated Yardi software with the correct ready status of the units. Property needs to ensure YARDI is updated to reflect the correct ready status. The make ready status board does not correspond with the vacancy report. Update the make ready status board and/or vacancy report so that the correct vacant units are reflected. The Lease expiration report does not reflect the correct month-to-month leases. Update the Lease Expiration report to reflect the correct number of month-to-month leases. Lease Expiration report does not reflect the correct number of lease expirations. Property provided copies of lease renewal logs for the months of January 2005 July 2005 which show the leases that expired for each of the months, but do not indicate which leases renewed. Lease renewal binder should track not only how many leases are expiring, but it should also track how many leases were renewed on a monthly basis. These records must be maintained for a minimum of 12 months. Property has a high number of month-to-month leases. Property does not have an effective lease renewal program in place. Develop and implement a lease renewal program that will be effective at your property. Maintenance staff does not have IDs or name badges. Property states that they have been ordered. Ensure that either name tags or photo IDs are worn by all property staff and maintenance staff. One Willow Chase Apartments Willow Place Dr. South Houston TX st Visit 1/25/05 7/7/05 100% 1 st Visit 92% 94% First Visit: Observations: The parking lot is deter rating. The parking lot needs to be patched or resurfaced. The fence has lots of boards missing out of it. It is recommended that the fence be properly fixed. The hand rails has paint that is cracking and pealing off. The rails need to be repainted. The retaining wall around the parking lot is deter rating. It is suggested that it is fixed. The laundry room has the glass broken out of the window. It is suggested that it is fixed as soon as possible. Units re not being turned in a timely manner. There are no units to show prospects. It is suggested that there are at least one of every available floor plan made ready to show prospects. 6

21 Low number of residents being renewed. It is suggested that staff start working renewals at least 90 days out. NSF checks are not being handled correctly. The staff should be more detailed when entering checks into AMSI. Second Visit: Finding: Building 5 s laundry room is missing a smoke detector and/or fire extinguisher along with an outlet cover. This must be corrected within 24 hours due to it being a safety issue. In response to this review, the Manager must sign a letter on company letterhead stating that this has been corrected and submit to TSAHC along with pictures that this has been corrected no later than 8/20/05. (Action Pending, extended to 1/6/06) Observations: All of the boiler rooms are being used for storage. This is can very dangerous. It is very strongly recommended that all of the boiler rooms be cleaned out and no longer used for storage. Work orders are not being completed in the system. It is suggested that staff go though the outstanding work orders to check for completion. Unit 401 had two NSF checks within one month s time period and paid the second with another personal check. It is highly recommended that the staff follow the company policy on NSF checks to insure compliance with Fair Housing laws. Maintenance personal do not have any identification on them. It is strong recommended that all maintenance staff have photo id badges. One Willow Park Apartments Willow Place Dr. North Houston TX st Visit 1/24/05 7/7/05 100% 1 st Visit 91% 92% First Visit: Observations: Work orders are not being completed in the system when they are done. Work orders should be completed in system in a timely manner. 10% of residents are on MTM leases. This is to high of a percentage. The staff should encourage residents to renew and up the MTM fee to $75. It is also important for the staff to get the residents in to sign their renewal paper work. Second Visit Findings: Due to major drainage/ run off issues, there are lots of exposed cable and phone wires throughout the property. This is a major safety concern. The Property Manager has received bids to have the drainage and landscaping corrected during this fiscal year. She is waiting for approval from AHF. In response to this review, the Owner must sign a certification that this has been corrected and submit to TSAHC no later than 8/14/05. (Completed 8/9/05) The Laundry room 2 is missing a smoke detector and/or fire extinguisher. This must be corrected within 24 hours due to it being a safety issue. In response to this review, the Owner must sign a certification that this has been corrected and submit to TSAHC no later than 8/14/05. (Completed 8/9/05) Observations: All of the boiler rooms are being used for storage. This is can very dangerous. It is very strongly recommended that all of the boiler rooms be cleaned out and no longer used for storage. 7

22 Property does not have a program in place to follow-up on work orders. Property should develop and implement a program to utilize staff to follow up on work orders. Seventeen work orders are outstanding on the YARDI system. Property is not completing work orders in the YARDI system. Ensure that the YARDI system is updated on a daily basis. This was an issue during the September 2004 review and continues to be an issue. Unit 1406 has a low battery in the smoke detector. This must be replaced as soon as possible. Property is not taking legal action against delinquent accounts. Property staff should file evictions in a timely manner not letting accounts be over 60 days past due. Maintenance personal do not have any identification on them. It is strong recommended that all maintenance staff have photo ID badges. Pine Creek Village Apartments I-45 North Conroe TX st Visit 1/25/05 7/8/05 90% 1 st Visit 87% 85% First Visit Observation: Due to the amount of criminal activity on the property it is suggested that the property take more action to prevent burglary. This could include adding a gated entrance, security cameras, crime watch meetings, and/or security patrol. Second Visit Findings: Maintenance shop in building 7 has a rotting floor that needs to be repaired, this is dangerous. In response to this review, Property Manager must submit a photograph that this has been repaired and sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 10/13/05. (Completed 10/19/05) Property is overcharging NSF fees. Company policy states that the NSF fee is $25; however unit 106, 601, 702, 808, 916, 1008, and 1406 were charged $35. For March 2005, unit 601 was charged $50 for the NSF. Either refund or credit the residents who have been overcharged. In response to this review, submit a copy of the letter notifying the residents of the overcharge, and either a copy of the check that shows the refund, or the resident ledger that shows the credit no later than 10/13/05. (Completed 10/19/05) Observations: Make ready board only includes those units that have been vacant the longest. Ensure that the units on the status board correspond with the units on the availability report. Units are not being turned in a timely manner. 90% of the vacant units are not ready. Ensure that units are turned in a timely manner. Property does not have an effective lease renewal program in place. Develop and implement a lease renewal program that will be effective at your property. Property did not access late charges for units 601, 611, 1008, 1406, and 1505; all households had NSF checks. Resident files did not have any documentation as to why late charges were not accessed. Ensure that all late charges are charged as they occurred. Property is not following company policy on NSF fees. Company policy states that after two NSF checks during one year, no more checks will be accepted. The household in unit 601 had three NSF checks in one year. 8

23 Property did not access a NSF fee for unit 611. Company policy states that the NSF is $25; however nothing was charged for this household and there were no exceptions noted in the resident file. Settler s Cove Apartments Treadway Beaumont TX st Visit 3/7/05 97% 1 st Visit 90% First Visit No Findings or Observations. 9/19/05 95% Second Visit Findings: The laundry room does not have a smoke detector or fire extinguisher. This must be corrected within 24 hours because this is a safety issue. Ensure that you are following local property code. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/9/05. (Completed 12/22/2005) Unit 1602 does not have a functioning smoke detector. There is no electricity in this vacant unit; the smoke detector is hard wired and does not have a battery. This must be corrected within 24 hours because this is a safety issue. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/9/05. (Completed 12/22/05) The make ready board does not correspond with the Availability Report. The make ready board reflects units that are ready that do not show ready on the Availability Report. Property Manager states that she has not walked these units and is not sure if they are truly ready. Property staff needs to inspect all vacant units to find out the status of these units and update the Availability report and the make ready board. It is recommended that after the Maintenance staff make ready a unit, that Property Manager or leasing staff walk the unit to confirm that the unit is indeed ready prior to entering a make ready date on the Availability Report or updating the make ready board. In response to this review, Property Manager must submit a current Availability Report that reflects the current availability no later than 12/9/05. (Completed 12/12/05) Delinquency report needs to be updated, it shows incorrect entries. Water is entered as rent owed. Update the delinquency report to reflect the correct delinquency. In response to this review, submit a copy of the updated Delinquency Report no later than 12/9/05. (Completed 12/12/05) Observations: The storage/maintenance area is not clean or organized. It is recommended that all storage/maintenance areas are clean, maintained and organized. Property unit keys are coded; however, there is an obvious pattern. Property key codes need to be changed to a random pattern. Currently any vendors, past employees, and others would be able to identify the unit number of the keys. Shadowridge Village Apartments W. Ferris Branch Blvd. Dallas TX st Visit 1/10/05 5/23/05 95% 1 st Visit 93% N/A First Visit Observation: Not all vacant floor plans have units available to show. All available floor plans should have a unit to show. Second Visit Observation: Work orders are not being completed in the system. It is suggested that the staff complete all work orders in the system as they are completed. 9

24 Stony Creek Apartments I-45 North Conroe TX st Visit 1/25/05 7/8/05 90% 1 st Visit 90% 85% The manager is not tracking renewals. It is suggested that the manager start using the NSF binder to track renewals. First Visit Observations: NSF checks are not being handled correctly. It is suggested that staff follow the company policy for handling NSF checks. Due to the amount of criminal activity on the property it is suggested that the property take more action to prevent burglary. This could include adding a gated entrance, security cameras, crime watch meetings, and/or security patrol. Second Visit Findings: The playground is dangerous. The swing is broken and a piece of wood came off. Property Manager has already received bids and is in the process of fixing. The playground has already been roped off with caution tape; however a sign warning residents that it is dangerous to use must be posted within 24 hours. The equipment must be replaced within 60 days. In response to this review, manager must submit a photograph of the new playground and sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 10/13/05. (Completed 10/19/05) Property is overcharging NSF fees. Company policy states that the NSF fee is $25; however unit 2106 was charged $35. Either refund or credit the residents who have been overcharged. In response to this review, submit a copy of the letter notifying the residents of the overcharge, and either a copy of the check that shows the refund, or the resident ledger that shows the credit no later than 10/13/05. (Completed 10/19/05) Observations: Make ready only includes those units that have been vacant the longest. Ensure that the units on the status board correspond with the units on the availability report. Units are not being turned in a timely manner. 80% of the vacant units are turned in a timely manner. Property does not have an effective lease renewal program in place. Develop and implement a lease renewal program that will be effective at your property. Property did not access late charges for units and 2613; both households had NSF checks. Resident files did not have any documentation as to why late charges were not accessed. Ensure that all late charges are charged as they occurred. Woodedge Apartments Green Creek Dr. Houston TX st Visit 1/18/05 8/1/05 96% 1 st Visit 87% 94% First Visit Observations: Hours sign is broken. It is recommended that the sign be fixed as soon as possible. Building 3 s siding is falling into the building. The property should consider doing repairs to the siding throughout the property that needs repairs. Work orders are not being completed in a timely manner. It is suggested that the manager take a more active role in supervising the completion times. 10

25 Second Visit Findings: Ceiling in boiler room has a leak. This needs to be repaired immediately. In response to this review, the Property Manager must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 10/12/05. (Completed 11/8/05) Police report search blank for the months of May July 2005; however copies of several incident reports indicate that the police were called to the property in the months of July. One of the copies indicates that the Harris County Sheriff s Department filed a report for theft from a motor vehicle on May Provide a copy of the police report that includes the report of the theft of a motor vehicle with your response to this review no later than 10/12/05. (Completed 11/8/05) Property did not provide sufficient documentation to determine the lease renewal percentages. Property switched software. In your response to this review; provide a copy of your lease renewal report that includes the leases that expired during each of the months between August July 2005 and the number of residents that renewed for each of those months no later than 10/12/05. (Completed 11/8/05) Observations: The property signs do not have the EHO logo. It is suggested that an EHO logo be ordered. Once the EHO logo is received from HUD, you should permanently place either on the Property sign or on the window next to the front door of the Property office. Make ready board does not correspond with Unit Availability Report. Unit 214 and Unit 211 are occupied and show not ready on the report. Update the Unit Availability Detail Report to indicate that these units are ready. Property provides 30 days written notification for lease renewals. Ensure that residents receive at a minimum days notification for lease renewals and rental increases. Maintenance staff and leasing staff do not have photo IDs; however Management Company has ordered them. Ensure that photo IDs are worn by all property staff and maintenance staff. American Opportunity for Housing Property Name # of Units Location Briarcrest Apartments I-45 Spring TX Audit Date 1 st Visit 1/17/05 10/17/05 Occup. as of Nov. 15 th Avg. Occup. 98% 1 st Visit 90% 87% Annual Summary First Visit Observation: Leasing staff has not received any recent training. Ownership should consider sending staff to training regarding leasing and occupancy practices and fair housing laws. Second Visit Findings: Laundry room #3 does not have a functioning smoke detector or fire extinguisher. This must be corrected within 24 hours because this is a safety issue. Ensure that you are following local property code. In response to this review, the Manager must submit a photograph and must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/23/05. (Completed 12/30/2005) 11

26 Laundry room #2 has a functioning smoke detector but does not have a fire extinguisher. This must be corrected within 24 hours because this is a safety issue. Ensure that you are following local property code. In response to this review, the Manager must submit a photograph and must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/23/05. (Completed 12/30/2005) Boiler room #2 has a leak. Repair the leak. In response to this review, the Manager must submit a photograph and must sign a letter, on company letterhead, stating that this has been repaired and submit to TSAHC no later than 12/23/05. (Completed 12/30/2005) Delinquency report is not accurate. From , Management posted incorrectly. Update the delinquency report to reflect the correct delinquency. In response to this review, submit a copy of the updated Delinquency Report no later than 12/23/05. (Completed 12/30/2005) Observations: All of the parking lots and driveways located throughout the property have a large amount of pot holes and cracks. It is recommended that all of the parking lots and all of the drive-ways be resurfaced. Several sections of fencing located throughout the property are in need of repair. Some sections of the fence have fallen and in some areas several boards are missing. It is recommended that the debris from the falling fence be immediately removed because this is a safety issue and that the different sections of the fence that are in need of repair be repaired. The playground has graffiti. Graffiti must be removed immediately. Ensure that the property is free from graffiti. It is important for staff to paint over or power wash graffiti immediately. Property has the English version of the Fair Housing poster; however property staff states that they receive a large amount of Spanish speaking applicants. It is recommended that Property order a Spanish Fair Housing poster. The day of the review, the key was locked; however the key was in the key hole of the box. Property staff removed the key. It is recommended that the key box is not only locked but also secured. The day of the review, the key codes were maintained next to the key box. Property staff placed the key codes in a different location. It is recommended that the key codes be maintained separate from the key box. Property is not entering work orders on E-site. It is recommended that work order requests be entered in E-site. Property provided copies of work orders. These work orders do not have sufficient information to determine if the service requests were responded to within 24 hours and whether staff is following up on work orders. Some of the work orders do not have the dates the work order requests are completed. Ensure that all work orders are completed in their entirety. It is important to include the date the work order was completed and when staff followed up on the work order. It is strongly recommended that Property maintain a work order log that reflects the date the resident submitted the work order request and the date the work order was completed. Unit 501 is a down unit. This unit has been vacant for 2 years. This unit is used for storage. It is recommended that this unit be cleaned and made ready for occupancy. 12

27 A large amount of kitchen cabinets are being stored in Unit 501 instead of being used. In an effort to avoid continuing to store these cabinets, it is recommended that Property staff not only replace the kitchen cabinet doors when the units are turned but also replace these doors for the residents who sign a lease renewal. This will be an added incentive for the residents signing lease renewals, and should aid in the retention of current residents thus avoiding occupancy issues. This will also improve the overall appearance of the vacant units and aid in attracting prospective residents. Unit 501 is not on the availability report. It is recommended that the availability report be updated to reflect unit 501 as vacant. The vacancy report does not reflect the make ready dates. It is recommended that the E-site software is updated to reflect the correct ready status. None of the vacant units are ready for occupancy. Units are not being turned in a timely manner. It is recommended that Property turn units in a timely manner. The availability report does not correspond with the make ready status board. It is recommended that the units on the status board correspond with the vacancy report. Property is not following company policy on returned checks. The households in units 1218 and 1501 were allowed to pay with a check after each household had two returned checks. Company policy is that after two returned checks; they can not accept anymore checks from that resident. Property needs to follow their NSF policy. Property staff does not have name tags or photo ID s. It is recommended that either name tags or photo IDs are worn by all property staff and maintenance staff. New Maintenance staff has not had Fair Housing training. It is recommended that all staff attend Fair Housing training. Clover Hill Apartments Road to Six Flags West Arlington TX st Visit 1/27/05 10/10/05 90% 1 st Visit 80% 75% First Visit Observations: The property does not currently maintain a computerized tracking system to identify the status of work orders. However, upon completion of a work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. These follow-up calls are logged on a tracking log. However, the dates are not displayed. While there was no evidence of deferred maintenance requests, management should consider implementing a computerized tracking system to document completion times on a single log to accurately display those work orders that are pending. The property is actively marketing vacant units, however they are over budget by $2, in this category. Management may want to consider other low-cost advertising tactics such as balloons and flyers or networking with the local apartment agencies. Second Visit Findings: The cable box on Bldg. 26 is hanging and it looks like it is fixing to fall off. This is a safety issue and must be corrected within 24 hours. In response to this review, the Manager must submit a photograph and sign a letter, on company letterhead, stating that this has been repaired and submit to TSAHC no later than 12/23/05. (Completed 1/6/2006) 13

28 Unit 3621 does not have a functioning smoke alarm. This must be corrected within 24 hours because this is a safety issue. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been repaired and leased and submit to TSAHC no later than 12/23/05. (Completed 1/6/2006) Unit 4103 has been down for 436 days. The unit above it 4123 flooded and damaged this unit. Repair this unit. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been repaired and submit to TSAHC no later than 12/23/05. (Completed 1/6/2006) Unit 4123 has been down for 487 days. It flooded and damaged the unit below. Repair this unit. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been repaired and leased and submit to TSAHC no later than 12/23/05. (Completed 1/6/2006) Unit 3121 has been down for 884 days. This unit is currently stripped. It has no appliances, cabinets, or carpet. It used to be used as a storage unit. This unit needs to be repaired. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been repaired and submit to TSAHC no later than 12/23/05. (Completed 1/6/2006) Unit 4408 has been down for 453 days. This unit is also currently stripped. During last winter, appliances, and parts were removed and placed in the unit. This unit needs to be repaired. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been repaired and submit to TSAHC no later than 12/23/05. (Completed 1/6/2006) The Delinquency report is inaccurate, delinquency rent is listed under current instead of the correct time period; yet the rent is delinquent. Update the delinquency report. In response to this review, submit a copy of the delinquency report with the past due rent under the right time period, no later than 12/23/05. (Completed 1/6/2006) Property is charging the incorrect NSF fee. The leases for the residents in units 2402, 3002, and 4324 list the NSF fee as $35; however, these residents were charged $25. In response to this review, the Manager must sign a letter, on company letterhead, stating that they will begin following company policy and submit to TSAHC no later than 12/23/05. (Completed 1/6/2006) Observations: The retaining wall on corner of Clover hill & Springhill is missing a board. It is recommended that the wall be correctly repaired. The fence by the swimming pool is missing one of the boards. It is suggested that the fence be repaired and properly maintained. The wall was patched for Bldg. 26 for an AC repair; however, it was not cosmetically repaired. It is suggested that the patch be cleaned up to look more appealing. The majority of the landscaping around the property sign is dead and/or bare. It is strongly recommended that the area be filled with colorful flowers to draw positive attention to the property. The day of the review, the key box was locked; however the key was in key hole of the box. Property staff removed the key. Ensure that they key box is not only locked but also secured. Property unit keys are coded; however there is an obvious pattern. Property key codes need to be changed to a random pattern. Currently any vendors, past employees, and others would be able to identify the unit number of the keys. This is a major safety concern. 14

29 Property provided copies of work order. These work orders are not completed in their entirety. It is important to include the date the work was responded to within 24 hours. Ensure that all work orders are completed in their entirety. It is important to include the date the work order was completed and when staff followed up on the work order. It is strongly recommended that Property maintain a work order log that reflects the date the resident submitted the work order request and the date the work order was completed. During the last review, it was noted that property does not currently maintain a computerized tracking system to identify the status of work orders. However, upon completion of a work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. These follow-up calls are logged on a tracking log. However, the dates are not displayed. The work order requests are still not entered into the system. It is recommended that work orders be either entered into the system or that a work order log is maintained. The vacancy report does not correspond with the make ready board. Some households moved out over the weekend. The make ready board shows some units as vacant that are still occupied. It is recommended that the make ready board be updated daily. 85% of the vacant units are not ready. Units are not being turned in a timely manner. It is recommended that the property turn 2 units a day until they get caught up. Property maintains a lease renewal binder; however the binder is incomplete. Property provided copies of lease renewal binder; however, the months of February 2005, October 2004, November 2004 and December 2004 were not provided. Ensure that the renewal binder is maintained and that these records are maintained for a minimum of 12 months. Property does not have an effective lease renewal program in place. TSAHC recommends that Property create a renewal policy/ action plan that encourages residents to continue living at the property. Property is not following company policy on returned checks. The household in unit 3002 had 3 NSF s. Property staff must follow company policy on returned checks. Leasing staff do not have any IDs or name tags. Property Manager states that they will be getting uniforms that will have the company name and the staff s name on the front of the shirt. She states that they are currently trying this out in San Antonio offices. It is suggested that either name tags or photo IDs are worn by all property staff and maintenance staff. Hillcrest Apartments West Tarrant Rd. Grand Prairie TX st Visit 1/11/05 10/10/05 85% 1 st Visit 62% 74% First Visit Observations: This property is suffering from excessive vacancies due to the decline in the surrounding area. The property is aggressively trying to fill these vacancies and is over budget for advertising and promotion expenses. The current marketing program is aggressive. Management should continue to aggressively market the community and consider additional tactics to attract applicants. This could entail contacting the local Apartment Assoc. and networking with other industry groups. Management is also encouraged to hire a leasing consultant with a proven track record for increasing occupancy in the past and is specialized in leasing strategies and resident retention. The property does not currently maintain a tracking system to identify the status of work orders. Upon completion of a work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. However, no log is maintained to indicate pending work orders. Wile there was no evidence of deferred maintenance requests, management should consider implementing a tracking system to document completion times on a single log to accurately display those work orders that are pending. 15

30 Leasing staff has not received any recent training. Ownership should consider sending staff to training regarding leasing and occupancy practices and fair housing laws. Second Visit Finding: The wooden ramp to the storage building has begun to rot and is broken. Some of the boards are no longer nailed. It is strongly recommended that the ramp be repaired. This is a safety issue and must be corrected within 24 hours. In response to this review, the Manager must submit a photograph and sign a letter, on company letterhead, stating that this has been repaired and submit to TSAHC no later than 12/23/05. (Completed 1/12/2006) The ceiling of the boiler room has caved in. Repair the ceiling. In response to this review, the Manager must submit a photograph and sign a letter, on company letterhead, stating that this has been repaired and submit to TSAHC no later than 12/23/05. (Completed 1/9/06) Unit 2209 has been vacant for 447 days. This unit is used as storage. It unit has old appliances in the unit. This unit needs to be cleaned and made ready. In response to this review, the Manager must sign a letter, on company letterhead, stating that this unit has been made ready and submit to TSAHC no later than 12/23/05. (Completed 1/12/2006) Unit 1603 has been vacant for 685 days; unit 301 has been vacant for 516 days. These units need minor cleaning. These units need to be cleaned and made ready. In response to this review, the Manager must sign a letter, on company letterhead, stating that these units have been made ready and submit to TSAHC no later than 12/23/05. (Completed 1/12/06) Property states NSF fee is $50; resident leases reflect $50; however resident account ledger indicates that residents were charged $25. The manager stated that the residents are paying $50 but they do not enter the entire $50 into their account ledgers. The resident account ledgers need to be updated to reflect the $50 NSF charge and the $50 NSF payment so that there is no question as to what is happening to the other $25. In response to this review, submit an updated resident account ledger for all of the NSFs for the months of July, August and September 2005, no later than 12/23/05. (Completed 1/12/2006) Observations: A board is falling off of the retaining walls in buildings 7, and between 10 & 11. It is recommended that the wall be repaired. The water meter cover on the side of building 19 has cracked and is no longer properly covering the water meter. It is recommended that the cover be replaced. The storage/maintenance areas are not clean or organized. It is recommended that all storage/maintenance areas are clean, maintained and organized. There is a hole in the exterior wall of Building 22. It is recommended that the hole be repaired. During the last review, it was noted that the property is suffering from excessive vacancies due to the decline in the surrounding area. The property is aggressively trying to fill these vacancies and is over budget for advertising and promotion expenses. Although Property has increased occupancy, it is recommended that Property continue working on increasing occupancy. Current Property Manager was hired June 2005, she states that the problem is because people were moving in on a special and then moving out before they have to pay anything else. Property was without a Manager for a few months and now the residents do not want to follow rules as far as paying rent, etc. In an effort to try to increase occupancy, property is lowering rental prices. 16

31 Property uses Key Trak; however there are about 20 keys that were not entered into Key Trak because they ran out of key tags. She has ordered and received the key tags. The 20 keys that are in that extra key box have the unit number written on them. It is strongly recommended that the unit numbers be removed from the key tags. This is a major safety concern. Property has two key boxes. The extra key box with the 20 keys that were not entered into Key Trak does not lock. This is a major safety concern. It is recommended that the key box is locked and secured. During the last review, it was noted that property does not currently maintain a tracking system to identify the status of work orders. Upon completion of work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. However, no log is maintained to indicate the pending work order. While there was no evidence of deferred maintenance requests, management should consider implementing a tracking system to document completion times on a single log to accurately display those work orders that are pending. Currently, Property maintains a follow-up work order log; however the log does not have the date the work order was received or when the work order was completed. Property does not enter work orders into the E-site computer system. No other work order log is maintained. It is strongly recommended that property maintain a work order log that reflects the date the resident submitted the work order request and the date the work order was completed. The vacancy report does not reflect the make ready dates. Property uses E-site and does not know how to enter the dates. It is recommended that the E-site software is updated to reflect the correct ready status. The number of make ready units does not correspond with the status board. Not all of the vacant units fit on the make ready board, so the property did not include the units that did not fit on the board. It is recommended that the units on the status board correspond with the vacancy report. 85% of the vacant units are not ready. Units are not being turned in a timely manner. It is recommended that Property turn all units in a timely manner. The make ready status board reflects that unit 1206 is a ready unit; however the unit is not ready. It is recommended that the make ready board and vacancy report be updated to reflect that this unit is not ready. Property did not provide lease expiration renewal worksheet for the months of October It is recommended that Property begin maintaining a lease expiration binder that will track the lease renewals for the property and maintain for a minimum of 12 months. Property does not have an effective lease renewal program in place. It is recommended that Property create a renewal policy/action plan that encourages residents to continue living at the property. Delinquency report is not accurate. Delinquency report reflects $4580 in current rent for unit Property Manager states that she has already corrected this; however it is still reflected on the report. Also, several other units have incorrect entries. It is strongly recommended that Property audit all entries on delinquency report, and update the report to reflect correct information. The NSF ledger for Unit 1107 indicates that the debt was written off; however the resident is a current resident. It is highly recommended that Property staff do not write off the debt for residents that are currently residing on the property. It is recommended that Property staff needs to first file the evictions for these residents, and then once the resident has moved out, the debt should be written off. 17

32 Mill Creek Apartments Stuebner Airline Rd Spring TX st Visit 1/18/05 93% 1 st Visit 90% Property staff does not have name tags or photo ID s. It is recommended that either name tags or photo IDs are worn by all property staff and maintenance staff. First Visit No Findings or Observations. 10/17/05 NA Second Visit Findings: Laundry room for Bldg. #12 does not have a functioning smoke detector. It has a fire extinguisher. This must be corrected within 24 hours because this is a safety issue. Ensure that you are following local property code. In response to this review, the Manager must submit a photograph and must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/28/05. (Completed 1/6/2006) Property did not provide monthly occupancy for the months of August 2005, November 2004 and December Property must begin maintaining monthly occupancy documentation and maintain for a minimum of 12 months. In response to this review, Property must provide the average monthly occupancy for the months of August 2005, November 2004, and December 2004 no later than 12/28/05. (Completed 1/6/2006) Copies of work orders for the month of September were not provided; therefore TSAHC was unable to determine whether work order requests are responded to within 24 hours, or the number of work orders completed for the month of September. In response to this review, Property must provide copies of all the work orders for the month of September 2005 no later than 12/28/05. (Completed 1/6/2006) Copies of resident ledgers for 10 units with returned checks for the months of July, August, and September 2005 were not provided. In response to this review, provide the resident ledgers for 10 units with returned checks for the months of July, August and September 2005, no later than 12/28/05. (Completed 1/6/2006) Observations: Several boards are falling off of the pool storage. It is recommended that this be repaired. A section of fencing located on the property is in need of repair. One section of the fence has fallen and several boards are missing from a different section of the fence. It is recommended that the debris from the falling fence be immediately removed because this is a safety issue and that the different sections of the fence that are in need of repair be repaired. The property signs do not have the EHO logo. An EHO logo was provided to the Manager the day of the review. It is recommended that property staff permanently place the EHO logo either on the Property sign or on the window next to the front door of the Property s leasing office. This is a gated community; access gates currently do not work but Manager states that they are in the process of getting bids to repair the gate. It is recommended that the access gate be repaired. The day of the review the emergency phone numbers were not posted; however, Property staff posted a temporary sign with the emergency phone numbers. It is recommended that a permanent sign with the emergency phone number be posted immediately. Some of the Property unit keys have the unit numbers written on them. This is a safety concern. It is recommended that the unit numbers be removed from the unit keys. 18

33 Not all work orders are entered into Key Trak; therefore Key Trak work order report is inaccurate. It is recommended that all work orders be entered into Key Trak, or that a work order log be maintained to track work orders. Property is not following company policy on returned checks. The household in unit 108 was allowed to pay with a check after they had two returned checks. Property staff must follow company policy on returned checks. Property staff does not have name tags or photo ID s. It is recommended that either name tags or photo IDs are worn by all property staff and maintenance staff. Availability report does not show make ready dates. Property does not enter the make ready dates into the system. Property Manager states that the reason that they have not entered the make ready dates is because they have been really busy getting units ready for Hurricane evacuees. It is recommended that the make ready dates be entered into the system. One Westfield Lake Apartments Hirschfield Spring TX st Visit 1/18/05 10/17/05 93% 1 st Visit 91% 69% First Visit Observations: The property does not currently maintain a tracking system to identify the status of work orders. Upon completion of a work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. However, no log is maintained to indicate pending work orders. While there was no evidence of deferred maintenance requests, management should consider implementing a tracking system to documents completion times on a single log to accurately display those work order that are pending. Leasing staff has not received any recent training. Ownership should consider sending staff to training regarding leasing and occupancy practices and fair housing laws. Second Visit Findings: The Delinquency report is inaccurate, delinquency rent is listed under current instead of the correct time period; yet the rent is delinquent. Housing overpayment account is listed under Community Center. Delinquency report includes prepays. Update the delinquency report. In response to this review, submit a copy of the updated delinquency report with the past due rent under the right time period, no later than 12/28/05. (Completed 12/22/2005) Observations: Property has English version of Fair Housing poster, Property Manager states that they have some Spanish speaking traffic. It is recommended that Property order a Spanish Fair Housing poster. Property unit keys have the unit numbers written on them. This is a safety concern. It is recommended that the unit numbers be removed from the unit keys. The day of the review, the key box was not locked. It is recommended that the key box is locked and secured. During the last review, it was noted that property does not currently maintain a tracking system to identify the status of work orders. Upon completion of a work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. However, no log is maintained to indicate pending work orders. Property has not implemented a log and does not have a tracking system to identify the status of work orders. Property staff provided copies of work orders; however, these work orders do not have sufficient information to determine how long it took Property staff to complete service requests or identify the status of the work orders. It is important to include the date the work order was completed and when staff followed up on the work order. It is 19

34 GTEX Property Name Ashley Park Townhomes # of Units Location Ashley Park Dr. Plano TX Audit Date Occup. as of Nov. 15 th Avg. Occup. strongly recommended that Property maintain a work order log that reflects the date the resident submitted the work order request and the date the work order was completed. Property is not entering work orders on E-site. It is recommended that work order requests be entered in E-site. Unit A171 is a down unit. This unit has been vacant for over a year. This unit has a leak in the wall due to the foundation. It is recommended that this unit be repaired and made ready for occupancy. Unit C 41 is a down unit. This unit has been vacant for over 2 months. This unit has a foundation problem that is affecting the floor. It is recommended that this unit be repaired and made ready for occupancy. Availability report does reflects future make ready dates. Property is entering future make ready dates into the system. It is strongly recommended that the date the unit is made ready is the date that is entered into the system. Property maintains a lease renewal binder; however the binder is not current. Property provided copies of lease renewal binder; however, the renewal worksheets are incomplete and TSAHC can not calculate the percentages of residents that renewed last month, the past six months or the past twelve months. Ensure that the renewal binder is maintained and that these records are maintained for a minimum of 12 months. E-site does not print a lease expiration report that accurately lists the leases that expired and the residents that renewed on a monthly basis. Property is not following company policy on returned checks. Company policy is that after two NSF checks Property can not accept anymore checks from that resident. The household in unit 0091 had two returned checks and was allowed to pay with a check. It is recommended that Property staff follow company policy on returned checks. Property leasing staff and Maintenance staff does not have name tags, but will be receiving uniforms and name tags first week of January. Maintenance staff does not have uniforms. It is recommended that either name tags or photo IDs be worn by all property staff and maintenance staff. Annual Summary 4/11/05 99% 96% No Findings or Observations. Champions Green Apartments Champions Dr. Houston TX /19/05 93% 92% Observation: The property does not currently maintain a tracking system to identify the status of work orders. Upon completion of a work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. However, no log is maintained. While there was no evidence of deferred maintenance requests, management should consider implementing a tracking system to document completion times on a single log to accurately display those work order than are pending. 20

35 Chelsea Court Briar Forest Houston TX /7/05 92% 88% Findings: The property is suffering from crime. It is required that the management create a detailed action plan on how they will combat the problem, the time frame for the action, and how they will measure the results. This action plan must be submitted to TSAHC no later then March 14, (Completed 12/16/2006) Sidewalks in several areas are underwater. The auditor noticed that at least three residents had to walk through standing water and mud to get to their apartments. This is a major safety issue. This must be addressed within 30 days. A letter should be sent to TSAHC no later then March 14, 2005 stating what action was taken. (Not Completed due to lack of funding) The 911 phone at pool 4 was stolen and the 911 phone at pool number 3 had the wires cut. It is required that both pools have working 911 phones. A letter should be sent to TSAHC no later then March 14, 2005 stating what action was taken. (Completed 12/16/2006) Observations: Pool number two has a leak so the water is partially drained. The property is suffering from crime. Management should start to take action to stop it before the property becomes a haven for criminals. It is suggested that the property remove all vending machines from the laundry facilities. The washers and dryers should be changed out to the models that only accept the vending cards, no coins. If problems continue the laundry room should have doors added to them that are locked at all times so that residents must check out keys from the office to gain access to the facilities. It would also be beneficial to start a crime watch group on the property. It was noted that several residents come into the leasing office to take care of business such as sign renewals and had to wait for over 30 minutes to be helped. It is suggested that all residents be greeted when they enter the office and be helped in a timely manner. Work orders are not being tracked. It is suggested that the property keep a work order log so that they can track and manage work orders. An African American man in a wheelchair came in to discuss Fair Housing issues. The assistant manager stood over him in the main leasing area and talked down to him. The manager came up behind him and did not introduce herself nor take control of the situation. He was never asked to come back to the manager s office so the whole heated discussion took place in front of a resident and some one who came in to sign her new lease. It is STONGLY suggested that the manager take the lead on issues as fair housing and do so in their office in a non-degrading way. A resident used a personal check to reimburse an NSF check. Extremely low renewal rates. Once the crime and costumer service issues are addressed the renewal rate should increase. Kressington Place Oakwood Glen Blvd. Spring TX /19/05 93% 93% Observations: The property does not currently maintain a tracking system to identify the status of work orders. Upon completion of a work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. However, no log is maintained. While there was no evidence of deferred maintenance requests, management should consider implementing a tracking system to document completion times on a single log to accurately display those work order than are pending. Leasing staff has not received any recent training. Ownership should consider sending staff to training regarding leasing and occupancy practices and fair housing laws. 21

36 Riverwalk Apartments Timberlodge Apartments Victoria Place Apartments HIC/ABC Property Name Arborstone Apartments Audelia Rd. Dallas TX Audelia Rd. Dallas TX Westheimer Rd. Houston TX # of Units Location S. Cockrell Hill Rd. Dallas TX /27/05 97% 91% Observation: The property does not currently maintain a tracking system to identify the status of work orders. Upon completion of a work order, the leasing staff contacts the resident to confirm satisfaction regarding repairs. However, no log is maintained. While there was no evidence of deferred maintenance requests, management should consider implementing a tracking system to document completion times on a single log to accurately display those work order than are pending. 5/24/05 96% 90% Observations: The property has a down unit. It is recommended that the property make the necessary repairs to the unit so that they can put it back on the market. Property has a high turnover rate. It is suggested that the staff focus on resident retention. 1/10/05 98% 90% Observations: The property does not currently maintain a tracking system to identify the status of work orders. Upon completion of a work order, the leasing staff contacts t he resident to confirm satisfaction regarding repairs. However, no log is maintained. While there was no evidence of deferred maintenance requests, management should consider implementing a tracking system to document completion times on a single log to accurately display those work orders that are pending. Leasing staff has not received any recent training. Ownership should consider sending staff to training regarding leasing and occupancy practices and fair housing laws. Audit Date Occup. as of Nov. 15 th Avg. Occup. Annual Summary 5/9/05 89% 83% Observations: The NSF log is not being properly used. It is recommended to use the NSF log correctly and to update it through out the month. The laundry rooms had vandalism. It is suggested that both laundries are repaired. Baybrook Village W. Bay Area Blvd. Webster TX /18/05 96% 80% Observations: Units are not being turned in a timely matter. Recommended that one of each unit be available to show at all times. Crescent Oaks Apartments DeMoss Rd. Houston TX /22/05 97% 94% No Findings or Observations. The delinquency report is high. Recommended that all resident account ledgers be audited and corrected. Work orders are being done through rent roll. Management stated that the maintenance staff had not turned in completed work orders. Management is working on controlling this issue. 22

37 South Texas Affordable Properties Property Name # of Units Location Remington Apartments Thousand Oaks Dr. San Antonio TX Audit Date 1 st Visit 3/14/05 10/11/05 Occup. as of Nov. 15 th Avg. Occup. 93% 1 st Visit 93% 94% Annual Summary First Visit Observation: Low number of residents being renewed. It is suggested that staff start working renewals at least 90 days out. Second Visit Observation: The lease renewal rates over the past 12 months have not been strong. It is suggested that the staff investigate why people are moving out and create an action plan that helps them retain their residents. Summer Oaks Apartments Patricia Ln. San Antonio TX st Visit 3/14/05 10/11/05 94% 1 st Visit 93% 92% First Visit Observations: Refrigerator, washer and dryer needs to be removed this is a safety hazard. Maintains removed these items before audit was over. Low number of residents being renewed. It is suggested that staff start working renewals at least 90 days out. Property has a large number of work orders due to staff shortage. It is suggested that management track the work order closer. It is also recommended that the management staff have compliance training. Second Visit Observation: The property has a high amount of family violence calls to the police. It is recommended that the staff start providing information to the residents on what to do if you think your neighbor is being abused and what to do if you are a victim. The Charleston Apartments Dairy Ashford Cranbrook TX st Visit 2/21/05 89% 1 st Visit 88% First Visit No Findings or Observations. 11/18/05 88% Second Visit Observation: Unit 1904 is starting to have problems in the kitchen and bathroom. It is recommended that the property fix the issue if funding is available. The Rafters Apartments I-37 Corpus Christi TX st Visit 6/27/05 10/4/05 88% 1 st Visit 86% 93% First Visit Observations: The property has low renewal rates. It is suggested that staff start working on retaining residents from the day they move in until the day they move out. 23

38 There is no resident crime prevention program in place. It is recommended that management start a Crime Watch group for the property. Second Visit Finding: Flooring in storage room is weather worn. This is a safety issue. Repair flooring. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/10/05. (Completed 12/13/05) Observations: The storage area is not clean or organized. It is recommended that all storage areas are clean, maintained and organized. The phone has been removed from the pay phone box that is close to the swimming pool area. Property Manager states that a new phone will be installed in the box. Ensure that either a new pay phone is installed or the pay phone box is removed from the property. 37% of work order requests were not responded to within 24 hours. It is strongly recommended that all work order requests be responded to timely, with the exception of when Property must order parts or equipment. 72% of the vacant units are not ready. Units are not being turned in a timely manner. Property needs to ensure that all units are turned in a timely manner. Property does not use a make ready board; they use a vacancy list to track vacancies. It is recommended that Property begin tracking ready status on a make ready board. During the last review, it was noted that there were low lease renewal rates; this continues to be an issue. It was suggested that staff start working on retaining residents from the day they move in until the day they move out. Property needs to create a renewal policy/ action plan that encourages residents to continue living at the property. Property is currently not maintaining documentation for lease renewals. In addition to creating a renewal policy/ action plan that encourages residents to continue living at the property, Property should maintain documentation to effectively monitor the lease renewal program. Maintenance staff does not have ID badges. Property Manager states that they have been ordered. Ensure that either name tags or photo IDs are worn by all property staff and maintenance staff. The Wharf Apartments South Padre Island Dr. Corpus Christi TX st Visit 6/28/05 10/4/05 96% 1 st Visit 97% 97% First Visit Observations: The boiler room next to the maintenance shop has sheetrock that has serious water damage and is falling on the boiler room equipment. This is a safety issue. It was corrected before the auditor left the property. There are no resident crime prevention programs in place at the property. It is suggested that the staff start a crime watch group on the property. Second Visit Finding: Boiler in Bldg. 3 has a leak. Repair the leak. In response to this review, the Property Manager must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/10/05. (Completed 12/1/05) 24

39 Observations: Some of the Property unit keys have the unit numbers written on the key tags. The unit numbers need to be removed from the key tags. Currently anyone would be able to identify the unit number of the keys. This is a major safety concern. 41% of the work orders were not responded to within 24 hours. It is strongly recommended that all work order requests be responded to timely, with the exception of when Property must order parts or equipment. Property does not have an effective lease renewal program in place. TSAHC recommends that Property create a renewal policy/ action plan that encourages residents to continue living at the property. Property is not following company policy on returned checks. The household in unit 2104 was allowed to pay with a check after the household had two returned checks. Property states that the software needs to be updated, it is currently allowing staff to post check payments even if the households already have two NSF s. Property needs to follow their NSF policy. Property Manager is not wearing her name tag, she states that the backing came off and she has not had it replaced. Ensure that either name tags or photo IDs are worn by all property staff and maintenance staff. Willowick Apartments Everhart Rd. Corpus Christi TX st Visit 6/28/05 94% 1 st Visit 94% First Visit There are no Findings or Observations. 10/4/05 93% Second Visit Findings: The smoke alarm in the laundry room has been painted over. There is a fire extinguisher in the laundry room. This must be corrected within 24 hours because this is a safety issue. Ensure that you are following local code. In response to this review, the Manager must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/10/05. (Completed 12/1/05) Boiler in Bldg. 29 has a leak. Repair the leak. In response to this review, the Property Manager must sign a letter, on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/10/05. (Completed 12/1/05) Unit 3308 has been vacant 276 days. The floor needs to be replaced, other units were easier to turn than this unit and this is why it has been vacant. Repair the floor and lease the unit. Property needs to ensure that all units are turned in a timely manner. In response to this review, the Manager must sign a letter on company letterhead, stating that this has been corrected and submit to TSAHC no later than 12/10/05. (Completed 12/1/05) Observations: Storage room area is not clean or organized. It is recommended that all storage/maintenance areas are clean, maintained and organized. Property unit keys have the unit numbers written on the key tags, due to the recent Hurricane in the area. The unit numbers need to be removed from the key tags. 20% of the work orders were not responded to within 24 hours. It is strongly recommended that all work order requests be responded to timely, with the exception of when Property must order parts or equipment. 25

40 Property does not have an effective lease renewals program. TSAHC recommends that Property create a renewal policy/ action plan that encourages residents to continue living at the property. Property is not following company policy on returned checks. The households in units 2401, and 1303 were allowed to pay with a check after each household had two returned checks. Property staff states that the software needs to be updated, it is currently allowing staff to post check payments even if the households already have two NSF s. White Rock Property Name White Rock Apartments Worthing Oaks Property Name # of Units Location Thousand Oaks San Antonio TX # of Units Location Aguila Oaks Nacogdoches San Antonio TX Audit Date Occup. as of Nov. 15 th Avg. Occup. Annual Summary 3/21/05 95% 94% There are no Findings or Observations. Audit Date 1 st Visit 3/22/05 10/11/05 Occup. as of Nov. 15 th Avg. Occup. 96% 1 st Visit 90% 92% Annual Summary First Visit Observations: Boiler room is a safety hazard. flammable materials. It is suggested that the maintain staff remove all paint items and Key box not locked and key log not available. It is suggested that the key box be keep locked and the key log available. Units are not being turned in a timely manner. It is suggested that there are at least one of every available floor plan made ready to show prospects. Second Visit Findings: The railings throughout the property are rusting completely through the metal. This is a safety issue. All railings and fences need to be inspected for damages. All damaged/rusted rails must be repaired or replaced so that they are in good condition. This must be completed no later than November 17, Proper documentation of the action taken must also be submitted to TSAHC by this date. The documentation should include a list of all repaired and replaced items (including the building numbers or location on the property), copies of invoices for the materials or contracts used, and photographs documenting the correction. (Action Pending, extended to ) Month to month leases are not accurate in the system. It is showing more MTM units then what are truly MTM. The property must submit a new MTM report showing the accurate number of MTM leases no later than 11/17/05 to TSAHC. (Action Pending, extended to ) Of the 21 vacant units none of them where made ready. The property is not turning vacant units in a timely manner. The property is required to update their make ready status board to include all vacant units and the projected completion date for each of the tasks for each unit. At least 18 of these units must be made ready no later then November 17, The property is required to submit a new unit detail status report showing the completion of the units, along with documentation of the status board changes no later than November 17, (Action Pending, extended to ) 26

41 Observations: EHO logo missing on the front of the building. The manager was given an EHO sticker the day of the audit. She did place it in the front door. Some of the roofs appear to be aging. It is suggested that the roofs be inspected and proper repairs be made. The front monument sign as you enter the property has a raised flower bed. The brick surround appears to have been hit by a vehicle. This is a major eye soar and makes the property look ran down. It strongly recommended that the brick surround be rebuild. The property currently does not provide crime watch meetings or building captains. It is recommended that the property start taking a proactive approach to preventing crime in the community. Occupancy qualifications were missing from leasing office. It is required that they are posted for all prospects to see when they visit the property. The property staff is not consistently entering traffic information into the computer. Most traffic only have a name, address and phone number. About half of them have more information. It is strongly recommended that all traffic information be entered into the system for every prospect. There is an abnormally high amount of outstanding rent and a high amount of prepaid rent. It is strongly suggest that the staff audit each account to insure accuracy. 27

42 Texas State Affordable Housing Corporation Resident Service Summary Fourth Quarter December 2005 American Housing Foundation One Willow Chase Apartments: Houston Oct: Personal Protection, home safety Halloween Safety Nov: Homework Night Stop the Violence Flu Shots Dec: Personal Protection provided by Holiday Travel CARES Team Safety & Your Christmas Tree provided by CARES Team Cold Prevention provided by CARES Team One Willow Park Apartment: Houston Oct: Personal Protection, Home Safety Halloween Safety Nov: Homework Night Stop the Violence Flu Shots Dec: Personal Protection provided by Holiday Travel CARES Team Safety & Your Christmas Tree provided by CARES Team Cold Prevention provided by CARES Team Woodedge Apartment: Houston Oct: Halloween Safety Program Nov: Kitchen Safety Flu Shots Dec: Crime Watch meeting Personal Protection and Holiday Safety On-site Flu shots provided by AHF Fountaingate Apartment: Wichita Falls Oct: After School Nov: After School Great American Smoke Out Turkey Drawing Dec: After School Crime Watch for New Years Settler s Cove Apartment: Beaumont Oct: After School Snacks Halloween Safety Party (4 Attended) (14 Attended) (3 Attended) (7 Attended) (11 Attended) (9 Attended) (0 Attended) (2 Attended) (1 Attended) (25 Attended) (0 Attended) (8 Attended) (5 Attended) (10 Attended) (7 Attended) (2 Attended) (11 Attended) (4 Attended) (2 Attended) (4 Attended) (4 Attended) (0 Attended) (10 Attended) (10 Attended) (7 Attended) (7 Attended) (10 Attended) (2 Attended) (2 Attended) (6 Attended)

43 Crime Watch (10 Attended) Fitness Center (7 Attended) Nov: After School Snacks (11 Attended) Crime Watch Meeting (0 Attended) Health & Nutritional Class (9 Attended) Fitness Center (13 Attended) Dec: After School Snacks (5 Attended) Children s Book Distribution (11 Attended) Crime Watch Meeting (1 Attended) Fitness Center (10 Attended) Cimarron Park Apartment: Conroe Oct: Halloween Safety Meeting Senior Meals FEMA Pizza Party Nov: Crime Watch Great American Smokeout Senior Meals Flu Shots Dec: National Book Reading Day Senior Meals Computer Facilities Stony Creek Apartment: Conroe Oct: Crime Watch Halloween Safety Nov: Flu Shots Great American Smoke Out Dec: Children s Book Distribution Crime Watch Pine Creek Village Apartment: Conroe Oct: Crime Watch Halloween Safety Nov: Flu Shots Great American Smoke Out Dec: Children s Book Distribution Crime Watch Shadowridge Village Apartment: Dallas Oct: Crime Watch provided by DPD Halloween Safety Nov: Dallas Library on Wheels provided by the Public Library Crime Watch Flu Shots Thanksgiving Color Contest (9 Attended) (2 Attended) (8 Attended) (9 Attended) (1 Attended) (3 Attended) (5 Attended) (20 Attended) (6 Attended) (4 Attended) (3 Attended) (4 Attended) (3 Attended) (2 Attended) (4 Attended) (2 Attended) (3 Attended) (4 Attended) (2 Attended) (3 Attended) (4 Attended) (2 Attended) (16 Attended) (12 Attended) (10 Attended) (6 Attended) (4 Attended) (6 Attended)

44 Dec: After School Holiday Program Holiday Safety Meeting Educational Resources Creekwood Village Apartment: Dallas Oct: Halloween Safety Nov: Milk Matters w/ Brush Buddy Flu Vaccines Dec: Crime Watch Bent Creek Apartment: Dallas Oct: Crime Watch provided by Dallas Police Dept. Halloween Safety Nov: Crime Watch Personal Protection Utility Assistance Flu Shots Dec: After School Holiday Safety Meeting Crime Watch Utilities Assistance Counseling Services regarding FEMA needs Northwoods Apartment: Houston Oct: Crime Watch, A.R.O.W. Meeting Halloween Safety Nov: After School Snacks Crime Watch, A.R.O.W Meeting Cooking Safety Flu Shots Dec: Crime Watch A.R.O.W. Meeting Insurance Vocational Development Computer Facilities Emergency Services Aston Brook Apartment: Houston Oct: Halloween Safety Fitness Room Nov: Kitchen Safety Crime Watch provided by Harris County PD Flu Shots Dec: Crime Watch provided by Harris County Sheriff Office (5 Attended) (12 Attended) (1 Attended) (7 Attended) (15 Attended) (7 Attended) (12 Attended) (20 Attended) (17 Attended) (45 Attended) (7 Attended) (30 Attended) (19 Attended) (15 Attended) (19 Attended) (31 Attended) (30 Attended) (25 Attended) (10 Attended) (42 Attended) (17 Attended) (6 Attended) (6 Attended) (7 Attended) (11 Attended) (1 Attended) (1 Attended) (2 Attended) (1 Attended) (24 Attended) (15 Attended) (10 Attended) (15 Attended) (3 Attended) (15 Attended)

45 South Texas Affordable Properties The Charleston Apartment: Cranbrook Oct: After school fruit snacks Halloween safety tips Resident relief project Nov: After school fruit snacks Holiday Safety Dec: Friday Fruit Mold Prevention The Wharf Apartment: Corpus Christi Oct: Baking Class After school fruit snacks Halloween Safety Fire Prevention Nov: After school fruit snacks Holiday Safety Dec: Friday Fruit Mold Prevention Willowick Apartment: Corpus Christi Oct: Halloween Safety provided by CC Police Dept. Fire Prevention provided by Red Cross Nov: Holiday Safety Dec: Mold Prevention The Rafters Apartment: Corpus Christi Oct: Fire Prevention Event After school fruit snacks Halloween Safety provided by CC Police Dept. Nov: Truancy Seminar provided by Truancy Officer After school fruit snacks Holiday Safety Dec: Friday Fruit Mold Prevention (45 Attended) (45 Attended) (13 Attended) (45 Attended) (Door Fliers) (45 Attended) (Door Fliers) (12 Attended) (25 Attended) (Door Fliers) (Door Fliers) (25 Attended) (Door Fliers) (25 Attended) (Door Flier) (31 Attended) (Door Flier) (Door Flier) (Door Flier) (Door Fliers) (40 Attended) (4 Attended) (0 Attended) (40 Attended) (Door Fliers) (40 Attended) (Door Fliers) Remington Apartment: San Antonio Oct: Hurricane Relief (0 Attended) Nov: Holiday Safety fliers (Every Door) Health & Nutritional Class (0 Attended) Dec: Manual Material Handling (Every Door) Health and Nutritional Courses provided by Holly Johnson, esthetician (0 Attended)

46 Summer Oaks Apartment: San Antonio Oct: Donations to Hurricane Families (2 Attended) Nov: Truancy Presentation provided by Truancy Officer (0 Attended) After school fruit snacks (40 Attended) Holiday Safety (Door Flier) Dec: Manual Material Handling (Every Door) Health and Nutritional Courses provided by Holly Johnson, esthetician (0 Attended) IDA Program provided by the City of San Antonio IDA Program (1 Attended) American Opportunity for Housing Briarcest Apartment: Spring Oct: None provided Nov: None provided Dec: Crime Watch (22 Attended) Clover Hill Apartment: Arlington Oct/Nov/Dec None provided. Hillcrest Apartment: Grand Praire Oct/Nov/Dec None provided. Mill Creek Apartment: Spring Oct/Nov/Dec None provided. One Westfield Lake Apartment: Spring Oct: None provided Nov: None provided Dec: After School program (12 Attended) GTEX Chelsea Court Apartment: Houston Oct: Personal Protection provided by Southcross Security Nov: Dental Exams Dec: Technical College Information provided by ITT (6 Attended) (18 Attended) (25 Attended) Kressington Place Apartment: Spring Oct: Halloween Safety (25 Attended) Nov: Fitness Class (10 Attended) Dec: Mental Health/Stress Management Class provided by the Red Cross (1 Attended) Victoria Place Apartment: Houston Oct: Health & Nutritional Class provided by Memorial SW Nov: Utility Assistance Dec: Stress Management (2 Attended) (1 Attended) (0 Attended)

47 Champions Green Apartment: Houston Oct: Personal Protection provided by Harris County Sheriffs Dept. Nov: Kick Boxing & Ab Toning Class Dec: Stress Management Class provided by American Red Cross Riverwalk Apartment: Dallas Oct: Halloween Safety Class provided by DPD Nov: Retirement Planning Seminar provided by a Financial Advisor Dec: Crime Watch provided by DPD Timberlodge Apartment: Dallas Oct: Child Safety provided by Child Protective Services Nov: Crime Watch provided by DPD Dec: Crime Watch provided by Crime Strike Ashley Park Apartment: Plano Oct: Children s Arts & Crafts Nov: Financial Planning Workshop (provided by American Express) Dec: Senior Holiday Meal AGAPE ASHTON / WOODSTOCK Ashton Place Apartment: Galveston Oct: After School Program Nov: After School Program Dec: After School Program (15 Attended) (0 Attended) (1 Attended) (29 Attended) (6 Attended) (6 Attended) (7 Attended) (8 Attended) (1 Attended) (52 Attended) (21 Attended) (32 Attended) (6 Attended) (7 Attended) (8 Attended) Woodstock Apartment: Arlington Oct/Nov/Dec: None provided. Common Wealth White Rock Apartment: San Antonio Oct: Tutoring twice a week Halloween Safety Hurricane Relief Nov: Children s Thanksgiving Crafts Tutoring twice a week Holiday Safety Dec: After School Christmas Activity Educational/Scholastic Tutoring Personal Protection and Holiday Saftey HIC/ABC Arborstone Apartment: Dallas Oct: Safety Nov: Safety (7 Attended) (1 Attended) (0 Attended) (5 Attended) (9 Attended) (Door Flier) (6 Attended) (8 Attended) (26 Attended) (7 Attended) (7 Attended)

48 Dec: Personal Protection (7 Attended) Baybrook Village Apartment: Webster Oct: Financial Planning provided by Wells Fargo Bank (18 Attended) Health & Nutritional provided by Texas Development & Counseling ( 22 Attended) Nov: Personal Protection provided by Harris Co. Sheriffs Dept. (10 Attended) Dec: Crime Watch (2 Attended) Computer Facilities (2 Attended) Resident Council (4 Attended) Cresent Oaks Apartment: Houston Oct: Halloween Candy Resident Council Nov: Resident Council Dec: Resident Council SOA Aquila Oaks Apartment: San Antonio Oct: Yoga Nov: Yoga Dec: Yoga (35 Attended) (4 Attended) (4 Attended) (5 Attended) (2 Attended) (2 Attended) (4 Attended)

49 TEXAS STATE AFFORDABLE HOUSING CORPORATION COMPARISON OF BUDGETED TO ACTUAL OPERATING ACTIVITY (For the Three Month Period Ending November 30, 2005) FY 2006 % of Annual Revenues Budget Actual Budget Servicing Revenue, Net of Subservicer Fees 425, , % Multifamily Revenue 650, , % TDHCA Asset Oversight Revenue 509, , % Investment Revenue 120,000 21, % Grant/Fundraising Income % TOTAL REVENUES 1,704, , % Expenditures Salaries & Payroll Related Expenditures 860, , % Professional Services - Legal, Audit & IT 177,000 21, % Office & Equipment Lease 124,000 24, % Travel & Meals 72,000 26, % Interest on FHLB Notes 67,000 16, % Marketing & Sponsorships 23,000 (19) -0.08% Insurance 23,600 3, % Professional Dues & Training 12,000 3, % Communication 12,000 3, % Bank Fees & Charges 8,000 1, % Office Supplies 8,000 2, % Publications, Subscriptions, Office Maintenance 5,300 1, % Freight, Delivery & Postage 6,000 1, % Furniture, Equipment, & Software 20,000 2, % Printing 1, % Program and Loan Administration 4, % TOTAL EXPENDITURES 1,423, , % NET INCOME 280, , % Target Percentage = 25%

50 TEXAS STATE AFFORDABLE HOUSING CORPORATION COMPARISON OF BUDGETED TO ACTUAL OPERATING ACTIVITY (For the Three Month Period Ending November 30, 2005)

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59 Call to Order, Roll Call Certification of Quorum 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 December 9, 2005 at 11:30 am Summary of Minutes The Board Meeting of the Texas State Affordable Housing Corporation (the Corporation ) was called to order by Jerry Romero, Chair, at 11:30 a.m., on December 9, 2005, at the offices of Texas State Affordable Housing Corporation, 1005 Congress Avenue Suite B-10 Conference Room, Austin, TX Roll Call certified that a quorum was present. Members Present Jerry Romero, Chair Thomas A. Leeper, Vice Chair Charles G. Rencher, Member Jesse A. Coffey, Member (non voting) Members Absent Jo Van Hovel, Member Staff Present David Long, President Melinda Smith, Chief Financial Officer Katherine Closmann, Executive Vice President Cari Garcia, Multifamily Finance Manager Emily Lah, Asset Oversight & Compliance Manager Laura Smith, Corporate Secretary Public Comment Special Guests Bob Coleman, Morgan Keegan Stacy Houston, Morgan Keegan Don Mikeska, Mikeska, Monahan & Peckham Kent Smith, Jackson Walker LLP Open Meeting Mr. Romero began by welcoming Mr. Coffey as the Corporation s newest Board Member. Mr. Romero followed by stating that because procedural requirements were not yet completed

60 regarding his appointment, Mr. Coffey would be participating as a non-voting member this month. Mr. Coffey stated his happiness that the Governor appointed him to the Board and that he would do his best for the Corporation. Mr. Coffey was welcomed by Mr. Rencher and Mr. Leeper. Reports All reports were tabled. Tab 1 Presentation, Discussion and Possible Approval of Minutes of the Board Meeting held on November 4, Mr. Rencher made a motion to approve the minutes of the Board Meeting held on November 4, Mr. Leeper seconded the motion. Motion passed unanimously. Tab 2 Presentation, Discussion and Possible Approval of the Fiscal Year Ending August 31, 2005 Annual Financial Audit Report. Mr. Leeper reported to the Board that the Audit Committee had met prior to the Board meeting, at which time Mr. Mikeska with Mikeska, Monahan and Peckham had presented the audit. Mr. Leeper informed the Board that the Audit Committee had passed a resolution recommending that the Board accept the Corporation s Fiscal Year Ending August 31, 2005 Annual Financial Audit Report. Mr. Mikeska introduced himself to the Board. Mr. Mikeska noted that he was presenting an unqualified opinion to the Corporation and explained that this meant the financial statements were prepared in accordance with generally accepted auditing principles. Mr. Mikeska thanked Ms. Smith and her staff, Mr. Long and Ms. Closmann for all their help. Mr. Rencher made a motion to approve the fiscal year ending August 31, 2005 Annual Financial Audit. Mr. Leeper seconded the motion. Motion passed unanimously. Tab 3 Presentation, Discussion and Possible Approval of the Auditor s Report on Compliance with the Public Funds Investment Act. Mr. Mikeska briefly explained that the Corporation was required every two years to have an auditor or the state auditor perform an audit under the Texas Public Funds Investment Act. Mr. Romero inquired whether this was part the Corporation s financial audit. Mr. Mikeska explained that it would be a separate letter issued to the State Auditor s Office. Mr. Leeper made a motion to approve the Auditor s report on compliance with the Public Funds Investment Act. Mr. Rencher seconded the motion. Motion passed unanimously. Tab 4 Presentation, Discussion, and Possible Approval of a Resolution Approving Amendments to the Trust Indenture Executed in Connection with the Corporation's Multifamily Housing Revenue Bonds (American Housing Foundation Portfolio) Series 2002; and Other Matters Related Thereto. Withdrawn 2

61 Open Meeting Mr. Romero thanked Mr. Long and the Corporation s staff for the work accomplished in Mr. Romero wished everyone a happy holiday season. Closed Meeting Board Chair Mr. Jerry Romero, called the Board into Executive Session at 11:45 am. Mr. Romero resumed the Board Meeting at 12:01 pm. Open Meeting Adjournment Mr. Leeper made a motion to adjourn the meeting. Mr. Rencher seconded the motion. Motion passed unanimously. The Texas State Affordable Housing Corporation Board Meeting was officially adjourned at 12:04 pm. Respectfully submitted by Laura Smith, Corporate Secretary 3

62 RESOLUTION NO. 06- TEXAS STATE AFFORDABLE HOUSING CORPORATION Resolution Authorizing the Issuance, Sale and Delivery of Single Family Mortgage Revenue Bonds (Professional Educators Home Loan Program) Series 2006A; Authorizing a Trust Indenture, an Origination, Sale and Servicing Agreement, Purchase Contract and Continuing Disclosure Agreement, Making Certain Findings and Determinations; Authorizing the Execution of Documents and Instruments Necessary or Convenient to Carry Out a 2006 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 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 2006 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 owneroccupied residences shall be exempt from federal income taxation if such issue meets certain requirements set forth in said section 143; and WHEREAS, in order to carry out the Program, the Issuer, Wells Fargo Bank, National Association (the Trustee), CitiMortgage, Inc., as Servicer/Administrator (the Servicer/Administrator) and various commercial lending institutions doing business in the State of Texas (the Participants), propose to enter into an Origination, Sale and 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 mortgagebacked 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 has agreed to 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 has agreed to accept general responsibility 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 have agreed to originate and sell the Mortgage Loans; and (e) the Issuer, the Trustee, and the Servicer/Administrator and the Participants each agree to perform certain /

63 actions and to 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 shall issue its Single Family Mortgage Revenue Bonds (Professional Educators Home Loan Program) (the Bonds), in the maximum aggregate principal amount of not to exceed $25,000,000 pursuant to and as generally described in one or more Trust Indentures prepared in connection with the issuance of the Bonds (the Indenture), by and between the Issuer and the Trustee, 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. d/b/a RBC Capital Markets, Morgan Keegan & Company, Inc. and any associates 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 Indenture; 2. the Agreement; and 3. the Continuing Disclosure Agreement by and between the Issuer and the Trustee (the Disclosure Agreement). 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 /

64 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 one or more series in the maximum aggregate principal amount of not to exceed $25,000,000 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 Indenture. That the Indenture, 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 Indenture 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 Indenture and to deliver the Indenture 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. 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 Contact 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 /

65 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 Offering Document. The Board hereby authorizes and approves the preparation of a Preliminary Official Statement and the changes to the Preliminary Official Statement which will result in the final Official Statement proposed to be delivered in connection with the sale of the Bonds (the Official Statement), 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 or Executive Vice President of the Issuer is hereby authorized and directed, for and on behalf of the Issuer, to execute the Preliminary Official Statement and the Official Statement. Delivery to the Purchaser of the Preliminary Official Statement and the Official Statement 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 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 and maturity of the Bonds to be issued pursuant to this Resolution, 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 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 /

66 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 teachers 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. Authorization of Application for Allocation of Private Activity Bonds to the Texas Bond Review Board; Notice of Intention to Issue Bonds and State Bond Application. That the Board of Directors of the Issuer hereby authorizes the Chairperson, Vice Chairperson, President or Executive Vice President to execute and deliver a 2006 Application for Allocation of Private Activity Bonds to the Texas Bond Review Board in connection with requesting an allocation for the Bonds, together with any documents, certificates or instruments related thereto. The Board satisfies and confirms the filing with the Texas Bond Review Board by the President of the Notice of Intent to Issue Bonds and authorizes the directs the filing with the Texas Bond Review Board by the President the State Bond Application and the request that the application be approved by the Executive Director of the Texas Bond Review Board in accordance with Section 181.9(e) of the Rules of the Texas Bond Review Board. Section 19. Effective Date. That this Resolution shall be in full force and effect from and upon its adoption. [Remainder of page intentionally left blank] /

67 PASSED, APPROVED AND EFFECTIVE this January 19, TEXAS STATE AFFORDABLE HOUSING CORPORATION ATTEST: Chairperson Secretary / S-1

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