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Frequently Asked Questions

Why does the Austin Housing Finance Corporation (AHFC) exist?

In 1978, the Texas Legislature created Section 394 of the local government code to assist cities in forming specialized Local Housing Finance Corporations with great latitude to issue housing bonds. The Austin City council formed the Austin Housing Finance Corporation (AHFC) in 1979 and appointed itself as its governing body.

The mission of the AHFC is to facilitate the financing and construction of rental and owner occupied decent, safe and sanitary affordable accessible housing for low and moderate-income residents of Austin.

What are the financial capabilities of AHFC?

As an established non-profit, with the ability to issue tax-exempt bonds AHFC has unlimited financial capabilities to be a major player as a developer and financier of affordable housing.

What are the potential benefits of combining the financial capabilities of the City of Austin and the AHFC for increasing housing production in Austin?

1. Advantages to the City of Austin
• Puts the city in the forefront as an active player in development of reasonably priced housing
• Creates tax base in the city instead the surrounding communities
• Allows the city to use tools not available to other entities without unduly enriching private investors (TIF and Refund Contracts)
• Leverages resources not encumbered by costly federal regulations.
• Provides HOME match funds
• Demonstrates a commitment to solving a central issue in Austin - affordable housing
• Provides more reasonably priced housing stock for citizens of Austin
• Prevents increases in traffic congestion from commuters that now have to find housing in surrounding bedroom communities.
• Increases Sales Tax revenues generated by consumers living inside the city limits.
2. Other potential benefits to the community include:
   • Provides much needed entry level housing
   • Creates mixed income communities addressing several rungs in the housing continuum
   • Creates livable communities thereby reducing crime and vandalism.
   • Reclaims abandoned pieces of vacant land and puts city surplus land to work in providing housing.

What is the structure of the AHFC?

AHFC is a non-profit corporation with the City Council as its governing Board. The Board grants authority to the City Manager who serves as the General Manager of the Corporation. The General Manager delegates the authority to an Assistant City Manager who supervises the Executive Director of the corporation. The Executive Director directs the daily activities of the corporation and operates under an annual contract with the City. The city provides staff assigned to the corporation to conduct its programs and the corporation reimburses the city from grant proceeds, sale proceeds or its own Housing Assistance Fund. The Board approves the programs and budget and the General Manager is provided with great latitude to operate the corporation within the Board approved budget and programs.

What is the Role of the AHFC Board Member and how does it differ from the City Council’s role?

• To oversee AHFC’s ability to issue housing bonds, to receive transfers of City surplus property, to buy and sell property, to act as a non-profit developer and development partner, to develop public and private housing partnerships. The strategy is to find other ways to make AHFC an entrepreneurial extension of the City as a key player in the financing, development and production of affordable housing for low- and moderate-income households in the dynamic Austin economy.
• To approve specific contracts beyond the General Manager’s contract limit, and awards, loans or grants for gap financing from Federal and City Housing Trust Funds.
• To develop and establish criteria for local housing bond programs which promote the mission of AHFC and keep AHFC competitive with other local issuers.

Why did The City of Austin create the AHFC as the production arm for housing in Austin?

AHFC was the perfect vehicle for the operation of the City’s housing programs because:

• AHFC is an established non-profit
• AHFC has more flexibility to act on the development of housing
• It puts AHFC in the driver’s seat to negotiate joint ventures and partnerships by providing the working capital.
• Ability to issue tax exempt bonds
• Administers the city’s Housing Trust Fund
• Administers the Multi-family Bond programs

How will AHFC support the development of non-profit housing providers in Austin?

There are several ways in which AHFC supports non-profit providers of reasonably priced housing in Austin. Through its CHDO program, AHFC is implementing an outcome-based results oriented funding process for the allocation of CHDO Funds. AHFC has staffed up to deliver technical assistance to non-profit CHDO’s to develop housing in their neighborhoods. Non-profits seeking to acquire and rehabilitate or construct apartment complexes can apply anytime during the year to secure 501 c 3 tax-exempt bond financing to finance their projects.

How do these investment plans eliminate the need for General Obligation Bonds from the City of Austin?

As AHFC becomes a more active developer, AHFC will be able to issue essential purpose bonds to finance the development of affordable rentals without the need for the city to issue General Obligations Bonds to finance the units.

Who else does what AHFC does?

Competition for the issuance of multifamily tax-exempt bonds is provided by three other entities within the City limits. They are the Texas Department of Housing and Community Affairs (TDHCA); the Travis County Housing Finance Corporation; and the Texas State Affordable Housing Corporation originally operated by the TDHCA. Since all have the authority to issue multifamily bonds for projects within the Austin City limits, it is imperative that AHFC bond rules remain competitive, the process flexible, and the fees reasonable to attract applicants to use the AHFC as their multifamily Bond issuer.

Who are its potential partners?

Potential partners include landowners with tracks of land suitable for residential development, developers of multifamily projects that were unsuccessful either in the state’s Low Income Housing Tax Credit competition or in their applications for volume cap in the Texas Bond Review Board Lottery. Other potential partners are developers that bring projects in for S.M.A.R.T. Housing consideration, lenders or other non profit organizations.