McKinney Housing Finance Corporation

What is the McKinney Housing Finance Corporation (MHFC)?

MHFC is a public, non-profit corporation that was established in 1980 under the provisions of the Texas Housing Finance Corporation Act, Chapter 394, Local Government Code, as amended, for the purpose of benefiting and accomplishing public purposes of and on behalf of the city of McKinney, Texas. Such purposes include financing the cost of residential ownership and development that will provide decent, safe, and sanitary housing for residents of the city at prices they can afford. The corporation is exempt from federal taxation under the Internal Revenue Code.

The primary activity of MHFC is to issue tax-exempt single-family mortgage revenue bonds and bonds for affordable multi-family housing projects. This brings in revenue for the MHFC to create and promote affordable housing opportunities.

The MHFC board includes seven volunteer residents of McKinney appointed by the McKinney City Council. Each member may serve up to two, two-year terms.

What is the function of the McKinney Housing Finance Corporation (MHFC)?

MHFC provides single-family homeownership and multi-family rental opportunities to persons meeting specific income requirements. Our services include the following:

Single-family housing – We provide assistance to first-time homebuyers with our Down Payment Assistance Program and Mortgage Credit Certificate Program. These programs help families achieve homeownership by decreasing the financial burden of mortgage and related purchase costs.
Multi-family housing – We also finance the construction or acquisition of multi-family communities designed to provide below-market-rate rental opportunities. As appropriate, we co-develop and assume an ownership role.

FAQs regarding MHFC as a co-developer

What does it mean for the MHFC to Co-develop?

When co-developing a deal, the MHFC assumes an ownership role in the project. This allows the MHFC to play a role in decision making and make money from the developer fee, cash flow, and sales tax savings.

Is City Council in favor of the MHFC serving in a co-development role?

Yes. City Council is in favor of the MHFC being a Co-developer and issuing a Request for Qualifications (RFQ) to select a developer to partner with on multi-family development.

Sep. 18, 2017 – CC WS Agenda item – Consider/Discuss Low Income Housing Tax Credit (LIHTC) Funding and the McKinney Housing Finance Corporation Role in Providing Affordable Housing Options.

How does the process begin?

An MHFC Subcommittee was appointed to help create the RFQ that would be issued to find qualified developers to partner on an Affordable Housing Development.

The subcommittee included City Council member Scott Elliott and three members of the MHFC board, President Harry Hickey, Vice President Bridgette Wallis, and Treasurer James Brensnahan.

Oct. 27, 2017 – MHFC Agenda item - Consider/Discuss/Act on Appointment of Three MHFC Subcommittee members to develop an RFQ for Future Affordable Housing Development Utilizing Public-Private Partnerships with the MHFC
Feb. 5, 2018 - MHFC Subcommittee met and gave city staff direction on the RFQ.
April 13, 2018 - MHFC Agenda item – Update on RFQ for Future Affordable Housing Development Utilizing Public-Private Partnerships with the MHFC.
June 29, 2018 - MHFC Subcommittee met and reviewed the RFQ.
July 13, 2018 - MHFC Agenda item – Consider/Discuss/Act on a Recommendation to Council for Request for Qualifications (RFQ) for Future Affordable Housing Development Utilizing Public-Private Partnership with the McKinney Housing Finance Corporation.
- Tabled the RFQ until Aug. 10, 2018 meeting for the subcommittee to meet and make changes and bring back to the MHFC.
July 18, 2018 - MHFC Subcommittee met and discussed a new RFQ for review and revisions.

When was the RFQ approved?

The McKinney Flats RFQ was approved and recommended to City Council for approval by the MHFC at the Sep. 14, 2018 board meeting.

Sep. 14, 2018 – MHFC Agenda item - Consider/Discuss/Act on a Recommendation to Council for Request for Qualifications (RFQ) for Future Affordable Housing Development Utilizing Public-Private Partnership with the McKinney Housing Finance Corporation.

Did City Council Approve the RFQ that was published?

Yes. City Council approved the RFQ at the Oct. 2, 2018, City Council Meeting. They also requested that city staff member Trish Jackson, facilities construction manager, be on the selection committee due to her vast knowledge of construction projects.

Oct. 2, 2018 - CC Agenda item – Consider/Discuss/Act on Request for Qualifications for the Future Affordable Housing Development Utilizing Public-Private Partnership with the McKinney Housing Finance Corporation

When was the RFQ published?

The RFQ was published on Oct. 14, 2018, with a second run on Oct. 21, 2018.

What was the deadline for the RFQ?

The submissions were due on Nov. 1, 2018, no later than 1 p.m.

Who responded to the RFQ?

The NRP Group LLC - San Antonio
Pedcor Investments LLC – Indiana
Brinshore Development LLC – Illinois
Charleston Residential Properties – Dallas
KRR Construction LTD & DFW Advisors – Duncanville

What developer was selected through the RFQ process?

The NRP Group LLC was selected to partner with the MHFC.

When did the MHFC know about the selection?

The MHFC was updated on the selection of NRP by the subcommittee at the Jan. 11, 2019 board meeting.

Jan. 11, 2019 – MHFC Agenda item – Update on the Request for Qualifications (RFQ) for Future Affordable Housing Development Utilizing Public-Private Partnership with the McKinney Housing Finance Corporation

When did MHFC hire Counsel?

MHFC hired partnership Counsel to negotiate on behalf of the MHFC at the Jan. 11, 2019 meeting.

Jan. 11, 2019 -- MHFC Agenda item -- Consider/Discuss/Act on Chapman and Cutler LLP as Counsel to the Corporation in its Capacity as General Partner for Affordable Housing Development Partnership Project

Does City Council know The NRP Group LLC was selected for the partnership?

Yes. City Council was updated. The process of selection was praised.

Jan. 15, 2019 – CC WS Agenda item – Update on Request for Qualifications for Future Affordable Housing Development Utilizing Public-Private Partnership with the McKinney Housing Finance Corporation

Who is The NRP Group LLC?

They are a national multifamily developer, general contractor and property manager founded in 1995. They have developed over 28,000 units in 15 states, and managed over 20,000 residential units. The group has more than 300 years of collective executive team experience, and over 700+ employees nationwide. They have an annual building revenue of over $300 million and closed over $5 billion in real estate, $3 billion since 2009.

Development – NRP Development handles every aspect of development from concept to completion. They are an experienced multifamily developer of market-rate, affordable and senior housing projects along with significant experience in single-family infill housing.
Construction – NRP Contractors is a full-service general contractor, licensed in 12 states, providing professional construction services for multifamily and single-family homes. Over 28,000 units have been built since inception.
Property Management – NRP Management is a full-service property manager with over 18,000 market rate, affordable and senior rental units under management.
Investment Services – NaviStone is a financial company and consultancy, owned by the principals of NRP, tasked with providing financial certainty for tax credit properties as a tax credit purchaser and tax-exempt bond buyer.
Development Team – The NRP Group Development, NRP Management LLC, Cross Civil Engineers (out of McKinney) Munoz & Company Architects/Womack Hampton Architects (out of Dallas)
Financing Experience – NRP has closed 67 Low Income Housing Tax Credit transactions in Texas over 15 years with various institutions ranging from Bank of America to Texas Capital Bank. Some of their non-profit partners include San Antonio Housing Trust; Travis County Housing Finance Corporation; Fort Worth Housing Finance Corporation; Austin Housing Finance Corporation; Denton Housing Authority; Dallas Housing Finance Corporation; Community Housing Resource Partners, Prospera Housing and Community Services.

Why was the Memorandum of Understanding tabled?

The Memorandum of Understanding was tabled because it wasn’t completed by the April 12, 2019, MHFC board meeting.

April 12, 2019 – MHFC Agenda item – Consider/Discuss/Act on a Memorandum of Understanding (MOU) for a Potential Multifamily Partnership with NRP Holdings LLC.

Where will the development occur?

Two possible property locations were presented to the MHFC board that are both west of 75 and in the Difficult Development Area (DDA).

April 12, 2019 – MHFC Agenda item – Executive Session – C. Sec 551.072. Deliberations about Real Property. Project# 18-28RFQ

What is a Difficult Development Area (DDA)?

DDAs are areas, defined by U.S. Department of Housing & Urban Development (HUD), with high land, construction and utility cost relative to the area median income and are based on a number of other factors.

Where is the DDA?

The current DDA is south of Virginia, west of 75, north of 121 and east of Custer.

Do you have to build in the DDA?

It is not required to be in the DDA but finding a suitable site within a DDA qualifies the project for an additional 30% tax boost in tax credits, thereby reducing funding gaps. This is especially important in McKinney where land values are high.

Does City Council know about the DDA?

Yes, City Council was updated on the DDA at the May 7, 2019 work session. City Council didn’t express any objection.

May 7, 2019 – CC WS Agenda item – Update on Site Selection for Affordable Housing Development through a Public/Private Partnership with the McKinney Housing Finance Corporation and NRP Group.

When was City Council updated on the DDA?

MHFC Board was updated on the DDA presentation made to City Council at the May 7, 2019 work session.

May 10, 2019 – MHFC Agenda item – Update on City Council Work Session Item on Affordable Housing Development through a Public/Private Partnership with the McKinney Housing Finance Corporation and NRP Group.

Does the MHFC have an agreement in place with NRP?

Yes, a Memorandum of Understanding (MOU) was approved at the June 27, 2019 board meeting.

June 27, 2019 – MHFC Agenda item – Consider/Discuss/Act on a Memorandum of Understanding (MOU) for a Potential Multifamily Partnership with NRP Holdings, LLC.

Is the location for the development known?

There is a location that has been put under contract.

July 12, 2019 – MHFC Agenda item – Discuss Project #18-28RFQ
Aug. 8, 2019 - MHFC Agenda item - Discuss Project #18-28RFQ (Contract and slope analysis)

Have Private Activity Bonds been approved?

Aug. 9, 2019 - An inducement resolution has been approved. MHFC Agenda item - Consider/Discuss/Act on All Maters Incident and Related to the Submission of an Application or Applications for Allocation of Private Activity Bonds to the Texas Bond Review Board and Declaration of Expectation to Reimburse Expenditures with Proceeds of Future Debt for the McKinney Flats Project, Including the adoption of A Resolution Containing Other Matters Incident and Related Thereto.

Will rezoning be required?

Yes, the letter of intent was submitted on September 3, 2019. The zoning case number is Zone2019-0087.

Timeline of events related to co-development

Sep. 18, 2017- City Council is in favor of the MHFC being a co-developer and issuing a Request for Qualifications (RFQ) to select a developer to partner with on a multi-family development
Oct. 27, 2017 - MHFC Subcommittee was appointed
Feb. 5, 2018 – MHFC Subcommittee met and gave city staff direction on the RFQ
April 13, 2018– MHFC updated on the RFQ
June 29, 2018 – MHFC Subcommittee met and reviewed the RFQ
July 13, 2018 – MHFC Tabled the RFQ until next meeting for the subcommittee to meet and make changes and bring back to the MHFC
July 18, 2018 – MHFC Subcommittee met and discussed a new RFQ for review and revisions
Sep. 14, 2018 – MHFC approved and recommended the RFQ to City Council for approval
Oct. 2, 2018 - City Council approved the RFQ. They also requested that city staff member Trish Jackson, facilities construction manager, be on the selection committee.
Oct. 14, 2018 - The RFQ was published with a second run on Oct. 21, 2018
Nov. 1, 2018 – RFQ deadline. Submissions due no later than 1 p.m.
Jan. 11, 2019 - MHFC was updated on the selection of NRP by the subcommittee
Jan. 11, 2019 – MHFC engaged Chapman and Cutler LLP as Counsel to the Corporation in its capacity as General Partner for Affordable Housing Development Partnership project.
Jan. 15, 2019 - City Council was updated on the selection of the NRP Group, LLC. for the partnership.
April 12, 2019 - The MHFC tabled the approval of the Memorandum of Understanding (MOU)
April 12, 2019 – MHFC learned about two possible property locations and Difficult Development Areas (DDA)
May 7, 2019 - City Council was provided information about the DDA, and two possible site locations west of 75 had been located.
May 10, 2019 – MHFC Board was updated on the DDA presentation made to City Council at the May 7, 2019 work session.
June 27, 2019 – MHFC approved the Memorandum of Understanding (MOU) for a Multifamily Partnership with NRP Holdings, LLC.
July 12, 2019 – MHFC was provided possible development location that has been put under contract
Aug. 9, 2019 - Property contract and slope analysis were provided to MHFC
Aug. 9, 2019 - Inducement resolution was passed
Sep. 3, 2019 - Letter of intent for rezoning was submitted
Nov. 8, 2019 - MHFC Board met and discussed project update (site plan, affordability, unit breakdown, timeline-rezone resolution of no objection).
Dec. 3, 2019 - City Council approved Rezone
Dec. 17, 2019 - City Council approved Resolution with No Objection
Dec. 20, 2019 - MHFC Board met and approved the resolution. The participation resolution approved for the tax credit application.