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HomeMy WebLinkAboutNo Year S 1 { 1 � n ,t F f 3 1 r^ ; i FN t x s VII 1 Ernplro: Microfilm Company Dallas, Texas 214sw243m6173 t 1 r 5 F+ l u` " : l�Wr't'c �f��r�p�r f k`r � J I fi ril}wyyi to { t 4 il` � ` 7 .1 � 11j}S �.Yt,�,� �.a��.Y'.: may. sr•./e t�l i, Y.:., �1 as , ..F, 1 ! r . Affil• J`'2� � ,..[Y: 7,{ra.. 1 . 3.{i { '+s 71 �.S.:t� e t � t y ^;r { f l�3 , t r1., ,, � .e`J .. 9 +;`S,yy. v S' U;�.-.XYr. ] . ` J .,t 5s 'r �;�?t.,i .[ . s., .�j"I:..:n {y„s,. �5 �! � �t $. n 1.i. 1 p,..i '!.r -i.><u� 9:.t, r i•.�Ir�'yi �'t., !�l�tr �I• `.r1, ,\ .,.,W'.. -2'i. 4,,.) },+y, { M 2a',. ! ![� d1u, iFjr� s �r3�4 kry.�� N tom! t b .l } 7:,,� A ���tir 7�` 3�, rF� I. �4flr f�`'���� � I :c'r 1-•• r l t , I APPLICATION FOR INCORPORATION OP pention HOUSING FINANCE CORPORATION We, the undersigned, citizens ok the mate of Texas, of the age of 18 years or more and residents of the City of nPnf.nn_.r Texas , hereby. file .with the governing body of the City an application in writing seeking{ the incorpora- tion of d housing finance corporation under the prov4si6ns of the "Texas Housing Finance Corporations Act" . The -form , Of articles of incorporation proposed to be used in organizing_ the corporation " are attached hereto , 1 as Exhibit A SIGNED this the 21st day of Au ugt w 1979 . S j t t i pP a ca ft Applicant } r pp cant r { ;I , i `s I � , L I f 1 L _ OEM EXHIBIT A l ARTICLES OF INCORPORATION or Denton- " 'ICUSING FXNANCE CORPORATION THE STATE OF TEMS I COUNTY OF + ante i WE THE UNDERSIGNED, natural, persons of, the age of i eighteen ( 18) years or more., citizens of the State of } t Texas and residents of the City of ',Denton Texas ( the "City" ) , acting as incorporators of a public instrumental- ity and non-profit corporation ( the "Corporation " ) under the Texas Housing Finance Corporations Act, having been granted j authority by the governing body of the City as evidenced by the resolution attached hereto as Exhibit "A" , do hereby acopt the following Arti,clMS of Xncorporat'ion for the Corporation : I ARJ;ICLE ONE f I The name of the Corporation is bentQ0 Housing Finance { -Corporation . I I i ARTICLE TWO The `Corporation is a Public i.nstrUMentality and non I profit corporation , i 1 ARTICLE THREE The period of duration of the Corporation is perpetual , y I tl I r'y`l ARTICLE FOUR The Corporation is organized exclusively for the purpose { of benefiting and accomplishing public , purposes of, and on behalf . of , the City , by financing the cost of residential ownership and j development that will provide, decent , safe and sanitary housing 40 residents of the City at prices they can axsrord. It has been � determined and declared by the Legislature of the State of a Texas that such residential ownership and development will (a) provide for and promote the public health , safety, r„orals , t , and welfare ; (b ) relieve conditions of unemployment and 5 encourage the increase of industry_ and commercial acti,vit j and economic development so as to reduce the evils attendant upon " unei;iployment ; (c) prov3 de for efficient and well-planned urban P 5rowth and development incl uding the elimination and I prevention ' of p�ten'tinl urban blight and the i g proper coordination Of industrial facilities with ublic service es p s , mass trans f pnrtation and residential development; (d) assist persons of i low and riaderate i.-Icome in acquiring and owning decent , safe and sanitary housing which they can afford = and (e ) preserve and increase ad valorem tax bases of local u governmental uni..ss ' i and the . Loregoing have bF,en determined and declared by the Legislature of the Stat4 of Texas to lessen the burden of i government and to be ' t*lic purposes and functions . ARTICLE FIVE The COrporatioij has no members. r I # r ARTICLE SIX These articles of incorporation may at any time and from time to time be amended so as to make any changes therein and add any provisions thereto which might have been included r , i in the articl3s of incorporation in the xirst instance . Any such amendment shall be effected in either of the fPllowing manners : ( i) the members of the board of directors of the I Corporation shall file with th i governing body of the City an application in writing seeking permission to amend the articles of incorporation# spQci £ying in such application the amendment proposed to be made , such governing body shall �. consider such application and , if it shall by appropriate � resolution duly 'find and determine that it is wise , e. oedient , necessary or advisable that the proposed amendment be made and shall authorize the same to be made , and shall approve the i I form of the proposed amendment, then the board of directors of the Corporation may amend the articles of incorporation j by adopting such amendment at a meeting of the boars of dim rectors and delivering articles of amendment to the Secretary of State , or ( ii) the governing body of the City may , at its I � sole discretion , and at any time , alter or change the � I structure , organization , programs , or activities of the Corporation ( includin g the power to 'terminate the Co.+;pora � ti.on ) ► subject to any limitation on the impairment of ,. ..E j contracts entered into by thfa Corporation , by adopting an amendment to the articles of incorporation of the Corporation at ' a meeting of the governing body of the City and delivering articles of amendment to the Secretary of State . i , ARTICLE SEVEN The street address of the initial registered office of i the Corporation is 215 E . McKinney � � Denton Texas , 76201 and the name of its initial registered ,:gent at such address is Brooks Holt ARTICLE EIGHT The affairs of the Corporation shall be managed by a board of directors which shall be composed in , its entirety of persons appointed by the governing body of the City , The number of directors constituting the 'initial board of directors is The names and addresses of the persons who are to sezve as the initial directors , and the dates of expiration of their initial terms as directors , are as follows E j k DATE OP r EXPIRATION OE NAMES ADDRESSES TERM. I Wm . S , Wh 215 E . McKinney ; Denton , Tx . 76201 ,Aug. 1, , 9, Q ' Richard 0'Y Stewart Au" g . 21 , 1980 Dr . ''Hay Stephens „ Aug . 21 , 1981 Dr . Eol,Angd 'Vela n Aug . 21 , 1981 'rBudrr Herisl.ey n Aug . ' 21 , .1981 Chris Hartung Aug . 210 1980 f WM . H . MoNary „ Aug . 21 , ' 1980 i r Each of the in.1.tial directors resides within the City . ` Each directory including the initial directors , shall be ' eligible for reappointment. Directors are removable by the governing bo6y of the City, for cause or at will , and r must not be appointed for a term in excess of six ( 6 ) years . I Any vacancy occurring on the board of directors throveih death, j I resiVation, or othat"wise , shall be filled by appointment' by the governing body of the City to hold office until the expiration of the tern nor which the vacating director had Ibeen appointed. r � � 1 ARTICLE :TINE F The name and street address of each incorporator Name Address � I Chris Hartung 215 E . McKinney, Denton, Tx . 76201 � 1 Wm . H . McNary 215 E . McKinney; Denton , Tx . 76201 • ? William K . Co1e 215 E . McKinney ; Denton , Tx . 76201 Each incorpoat;or resides within the City , ARxICLE TEN r A resolution approving the form of these articles of incorporation has been duly adopted by the governing body of the City . ' The date of the adoption of such resolu- tion is AuSust 21 ;,-1-2 . 7 2 .,.._._�.�.. A copy of the resolution is attached hereto as Exhibit "A. AR'T'ICLE ELEVEN j No dividends shall ever be paid by the Corporation and no part cf its net earnings (beyond that necessary for for tirement of the indebtedness of the Corporation or to impja,:ent` I the public purpose of the City for which the Corporation has 1 been created) shall be distributed to cr in-.ire to ' 'the. benefit Of its directors or Officers or any private person , firm, corporation , or association except in reasonable amounts for services rendered, No substantial part of the Corporation ' s eCtivities shall be carrying on ry' g propaganda , or otherwise attempt j ing to influence legislation, and it shall not participate in , f or intervene in ( including the publishing or distributing of a statements) , any political campaign on behalf of or in opposition to an candidate for Y public oPeice . ARTICLE TWELVE If the Corporation ever should be dissolved when it has , or is entitled to , any interest in any funds ov property r of any kind, real , 'persanal , or mixed , such `u property or party or rights thereto shall not be transfar.ed to private owner- ship , but shall be transferred and delivered to the City , after satisfaction or provision for satisfaction of debts k I and claims , s , r IN WITI ESS WHEREOF , we have hereunto set our hands , this 21st day of. Au , 1979 . i r t k Incorporators F I .f I{ t k f E i 1 � vc 1. F l . Il�J; ! .... .H:-.�tt . ,a;� ! flei.. .. S1 ./ atl•el . :V -�---•� TFM STATE OF COUNTY OF I , the undersigned , a NatarY Public, do hereby cexti ay k that On 'this 21st day of Au use 1979 , Personal ;l1 a PPeared j before me william K . Cole , Qhrig who , each being by ma first duly f sworn , severally declared that they are thu persons who Signed the foregoing docl=ent as incornorato'.rs , and ghat . the statements therein contAined are true . IN WITNESS RFiMOI', I have hereunto set my hand and eal. the day and year above written. � f Notary xo In an br Count T Den on l i' Y � exas , r (NOTARY PUBLIC SEAL) My Commissioi�; Eytplves , r , rr i ' 1 i i r , za , i 1_ DEN1.'ON COUNTY HOUSING VINANCE CORPORATION 612 roseph A , Carroll Courts 8uildinIq 401 Nest Hickory Denton , Texas 76201 k July 15 , 1980 ; Honorable Chris Hartung i! City Managerr , City of Denton i 2113 East McKinney Street Denton , Texas 76201 Dear Chris This letter is to inform you that the Denton Count,v Housing Finance Corporation is scheduled to set the amount of its bond issue on July 28 , 1980 . I have previously ,informed you ghat the City of Denton has 'not been ineludda in our mortgage demand study sinoe you are plarjnin,g to issue bonds for 0? 6 ' same 'Purpose through til,e city of Denton Housing ` Finance Corporation , If the City Counoil wants the City, of Denton to be inoluded in the geographical area, whiah ` qualifies for the low interest loans which will be made as a result of the bond issue , it must pass the attached Resolution in time for us to increase the sizo of the 1+ond i8sue substantially . If the City Council does not want the Denton County Housing Finance Corporation to p grant such -financial assistance is within the city limits of Denton , we would also appreciate a Resolution to that effect , ' r Very truly yours , DENmOH COUNTY HOUSING FINANCE CORPORATION Byi : gA e 'ry Crawford )p aside � I I JJCtj9 CertiPied Mail Return Receipt Requested Deliver to Addressee Only i Enclosure � 1 i a it . f°t A RESOLUTION by the City Council of the City of Denton , Texas , ,relating. to the Denton County Housing Finance Corporation] approving the exercise of the powers of that Corporation within the oorpor- ate l'imi%"k of the City of Denton, Texas ; and ,� .,.., . viding an affective Mate . WHEREAS, the Denton County Housing , Finance Corporation, a r non-profit corporation created under and pursuant to the 'exa5 Houai.ng Finance Corporations Act , " has been organized with the approval and consent of Denton County , Texas , to provide a means y of finanr;irg the costs of residential ownership and development that will provide decent, safe , and sanitary housing for the i 3 residents of Ointon County, Texas , 'at affordable prices; and r WHEREAS , the said Corporation plans to provide financial assistanco with respect to the purohase , improvement , and con- struction of homeIJ located within the City of ' Denton , -tbxas , if I approval thereof required by the aforesaid Act is given by the City Council ; and 3 WHEREAS , the City Council hereby finds and determines that it would be in the best interest of the City and its inhabitant•;s for said Corporation to provide financial assistance with respect i to homes located within the corporate limits of the City, now, ' # therefore , I BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS : ; SDI 1s That approval is hereby given and granted to ! the Denton County Rousing Finance Corporation .to provide financial assistance with respect to purchasing , improving , anJ construct- ing homes located within the corporate limits of the City of Denton, Texas . f y i SECTION 2,s Nothing herein ,shall be construed to, be a waiver of and' d ng code requirements or standards prescribed for homes located within the City in connection with the approval r herein grantod to said Corporation. j SECTION 3s This resolution shall be effective from and after its passagand it is so resolved . PASSED AND APPROVED , this the day of �, 1960 , f Mayer , city o , Den on , Texas f I, ! ATTESTt i C=ty Secretary, City o Denton, Texas (City Seal) f , CITY' ofDENTON, TEXAS MUNICIPAL BUILDING / i)VTON, TEXAS 76201 / TELEPHONE (817) 566-000 Office of the City Manager July 25 , 1980 Honorable Jerry John Crawford . 612 Joseph A. Carroll Court's Building :d f . 401 West Hickory Denton, 'exas 76201 Dear `Jerry John : E S This letter is to ' inform you that the City of Denton has reaffirmed its position to proceed with its own bond issue through the City of Rouging p#nance Carporat #6n1 , This � action was taken at a special called meeting of .the City of I Denton City Council on Jury 22 , - 1980. In addition , the' Council decided to proceed with its own market ! analysis to be performed by the ' firm of Peat , ` Marwick, ' Mitchell & Company, Therefore , it will not by necessary 'for. the County ' to include the City of Denton in its mortgage demand study, # Thank I you for your time and consideration of thin matter, f I. Sincerely �t t{ hxi srtung City Manager j GCHs jm a 1 f c c d 9 ,. .:. ., . c tie. , .leh•t14e , . 1 r s E i � ivvscsi�r.�fi+,�x nA�rcr�siti � MCpCANTILC <iAMk DUiLOIMO i rr+Ar+K �:MoANICK August b, 1980 (a141 742.e401 ` i �RMIOA VIOL Mr4Dt MI i Ir Mr. Chris Cootes, Executive Vice-President i ' Christian Services International, Inc , r 777 Admiral Boulevard Kansas City, MO 64106 f Re F Construction and ,Refinancing Program' for _ � JOHN KNOX VILLAGE of the METROPLEX (Denton, Texas) j r Dear Mr. Coates: During the past several weeks we have again reviewed the considerable f amount of materia) furnished us-and the City of Denton relative to the proposed } financing and development of this project with funds to be provided from a_ tax- , exompt'bond Issue by an issuer authorized to issue revenue bands For projects of t' this nature. We understand you desire the passage and adoption of on inducement resolution by a political entity etxlowed with authority to take octton.and adopt ' proceedings whereby the entity would ocquire, construct and equip, a Life Care Retirement Village In Denton County and then lease the facility to John ;,Knox Village of the Metropley for payments equal to debt service on tax-exempt bonds to be issued, We further understand that CSi Retirement Services would be engaged by the lessee, John Knox Village, to provide turn-key consulting services, on o percentage fee basis, during the entire development and operation of the project { and supervislon of the actual operation for at least five years after completion. " Based on the foregoing, ;would, you please furnish us the following In order that we might iomplete our analysis of this situation and file a report with . appropriate City officials at Denton' , 1 , Copies of Certified Financial Statements of Christian Ser ,lces ' .lnc . 0 19 7B a nd September 30 3 109+ The Se temer for each of the ears ended t5 y 'l latest "stub" figures for 1979/80 would also bt helpful . l r IrIRf3T ,50aatIVea C302SiPANl• { Mr. Chris Coates August 6, 1980 Page Two •''' 2. A statement as to the nature and amount, If any, of the settlement ; agreed to and paid relative to the case styled Coffelt Y. John Knox Village, at al ., i No. CV' 78-1707. t , i 3 . What is the currant status' of Bennett, at 'al . Y. Berg, at ol . , numbered 80-0381-CV-W-2 and Sanford, eta Y . Bergs et al ; No: 80-0459- i CV-W-2? Have these not been dismissed on t e basis of lack of federal Iuris'. f diction ? i 4. Has your relationship with Westminster Manor in Travis County, Texas been terminated? If so, will you please advise us of the circumstances attendant to this happening r ! ' 54 We are hJt clear on the proposed interim construction loan to be repaid from entrance endowment proceeds, Please provide us a more detailed I analysis showing the proposed source of such loan, security for the loan, repay- ow,nt schedule, etc. i 6, On May '14, 1980 we were advised that an economic benefits study was being prepared by your consultant and that a copy would be forwarded us when complete . Perhaps it hot boon misplaced, but we cannot locate it and s would therefore appreciate recelving',a Copy from yon. Upon receipt of th'e above we will complete our evaluation of this j project and submit our firusings to our client, ' Yours very tr y,`` t I Senior Vice Pre i nt € mik i t Copies to; Mr. R. Murray Hatcher E j Mr. Chris` Hartung Mr King Cole 1 . I 1 I r n R I 1 Kidder, Peabody 8 Co, r INCORPORATED i t ' NSW YORK , BOSTON � pNlLAp L'LgHIA r CHIbAOO . ' .. 1747 CITADHI,L PLAZA '+ !AN F'RANCI!lCO. . LOS ANGELES S ATLANTA GAt,�AB ,.. AN ANTONIO, TEXAS 78209 KANSABCIfY, Mo. TRL (S12) 8282802 ' } r I June I , a ii Mr. G. Chris Hartung, City Manager ' j Clty, of Denton r 215 'E. McKinney Street Denton, Taxes 76201 Dinar •Chris: Enclosed with this letter are might copies of the information reseh ed to YOU last gr f r dAk/1 morning We hope this will be useful to you In axpiatnlhg the 3 proam to your City Council on Tuesday night, June 2nd, 'I You will note that the figures 'shown have boon modified to indicate a $20t0a000190' issue which, of course, Denton. can be altered to fit the needs of the City of - rl We look forward to talking with you by telephone on Wedneadsly, June 3rd. . Stnerely yours, KIDDER, PE:ABODY CO. INCORPORATED I BC/nch Bill ' Co rpent << Enclosures Val�T JUN 03 1981 ' I erry OF DENTON j MANAGER'S OFfiO I j 1 00 r f Kidder,Pesbody 9 Co. L leeorparoud I MULTI-FAMILY HOUSING FOR PERSONS OF LOW & MODERATE INCOME TEXAS ISSUERS "LOANS TO LENDERS" PROGRAM i � - i { Kidder, Peabody do Co, Incorporated is offering its underwriting services for "Loans to Lenders" programs for multi-farnily rental housing to provide decent, safe, and ? sanitary housing for persons of low 'and moderate income. This trpproach avoids the restrictions nsscciated with Fed.ral programs while providing attractive financing for high'-quality rental projects. y i PRQCRAM' STRUCTURE r 3. The local Housing F'Inence Corporation created or to be created by Texas cities or counties will sell Its Housing Revenue Bonds' to provide funds to participating lending institutions ("Lenders"). The Lendars then make mortgage loans "to developers of j multi-family housing, using their own standards and procedures.. I i COLLATERAL TO HOUSING FINANCE CORPORATION The L nders are required to doposit, with a Trustee selected by the NFC, colletersl whose current market value is equal to or exceeds the followlrig3 j Type ,of Collateral Collateral Requirertm�t Single Family Miirtgages 150 , "AA-rated" Municipal Bonds 12036 U. S.' Coverriment and/or Agency Securities 120% ► ENT LIMITATION INCOME AND R S_ Federal law requires that 20% of the units In a development be rented to persons �. earning less than 90% of local median income. Many HF'C boards choose to add';. a l requirement that the remaining 80% of the units must ,be rented to persons eerrlIN 15O% 6,e leas of median lncome, In either case, . a max(mum rental of 3036 of maximum indome. is also required. Showing conformity to these requirements Involves only a one form submitted on 'each new,. tenant to the $ond 'Trustem. , Assuming local median lncome Is $18,0 0, income and rent limitations would bet R ..rm vn .+�,4. ..✓:e 1 j u. , ,a.. _ -., - ..i i.,.: a... .? , t v, ,+,° e, tir i5 �r r i 1ti4der,Toabody A Co, t�„r 4 haotroraud { i ' r t Multi-ramify Housing "Loans to Lenders" Program Continued l Units Rented Maximum Income Maximum Monthly Rent 1 , 20% of Units $34 ,400 $360 � 80% of Units $27 ,000 $675 � However, the real rental rate reatriotlon 'is the action of the marketplace; and G prudent lenders will expect p the developer. 'to show that his proposed rental charges j are In conformIcy with the market_. ��MATURJTY AND PREPAYMENT OF LOANS i ' Nagotlation Iemong the parties can alter the maturity of the mortgage; Joarc, but In I general,, a 25-ye6r amortizstlon and an eight-to--twelve-year balloon saems to fit the needs of the developers. Prepayments on mortgage . loans must be used to prepay a Jlke amount of bonds, No prepayments are permitted for 5 years, and a prcpgyment y Y protect the bondholder. Once a rnartcJage is pecan schedule ms be used to prepeld, the project is released from all bond-related requirements. 1 ,t 1 1 �4 1 f , } j i ' p+T�l+l�•J/ �n}.i �..l�Er�ylfi A.i11{l .iJ�iC+f i'SEI.•4�A� »o{6 ,2v f' .64ti, r� r C , j l t ; Vidder,Poffibody 8 Co. � f' •' (asoepr�ted � �I r . F CI1'Y OF DENTON s § MULTI—FAMILY "LOANS TO LENDERS" PROGRAM F 1981 SERIES i ASSUMPTIDNSs $20,000,000 Program f 2 ,000r00fi Debt Service Reserve i $18 000t000 Liability to S be L 600,000 Cost of Issuance $17 =400,OOO Proceeds to S do 1. PRESUMED INTEREST RATESs Bond 'Rate 10100036 Bondholder Service Fes . 12% S L i Portfolio Collateral 1 .00014, S & L a ' Fee j . 'Trustee Fee . 129% Trustee � Mortgage Rate to 11.250% Builder FE=ES Td" S do U First Year i 3% 6.)mmitment `F'ee $ 5220000 1% Portfolio Collateral Fee $ 1740000 t j Arbitrage ! r 1.01 x 12 Mos.> Declining $ 435 ,000 I} $1 1� 31*000 Second Year { 1% Participation Fee $174$000 � 196 Portfolio ,Collateral Fee $174 ,000 jj 1/8% Servicing Fee $ 21 ,750 $3G�„9 ,754 1 � dy1ati fl�ldp!„'xiA.NaT�eFF�'�1`�rg4\rl::§r!f`rt+ iF ' i{ISCr� t 'I'mfa� A ftil �� r I Etidaer,haoay A ao I � lraeryor�kd � t r�r f l � f s Third d Year , I% Portfolio Collateral Fee $174 000 1/8% Servicing ,Fee `{i $ 21`-, 750 r INCOME 1',0 H F Cc Earnings do '$8,7K000 Less Interest' Due ( 396 430.500 3 Mos. 'Earnings on 3% .Deposit g 1396 $ ,16,96q 12 Mon. Arbitrage on Debt Service Reserve+ $ 660�EJ00 4' ( 6 .tii i 120 4'wd 5econ� d year Arbitrage on Debt Se { rules Reserve � 60 000 I, t +�0 o0 FEES PAID BY DEVBLOPERs 396 C_ommltment Fee $522,0Q0 1% Partibipation Fee $174 000 dy6' pQ f ;'I I I 1 � t t , I I I i r , 1 a ,• i'. ' KidderrPeAbody 8 Co. � r ' , ' laaorponted c ' i � FLOW-THROUGH OF FUNDS TO LENDER , $18 ,b00�bb0 10-/'d96 � i Er nojpA.I Interest Tote! r Year 1 1982 $ 180,000 $ 1 ,822 ,500 $ 2 ,1002,500 1983 $ 2pq,000 $ 1 ,801s ,276 $ 2 ,004, 276 1984 $ 221P,000 $ 1 ,7841 2 026 $ 2 t 004 ,026 r 1985 $ 241,000 $ 1 ,761,750 $ 2001 ,750 1986 $ 260, 000 $ 1 737450 �' k 1987 , ► : $ 1 ,997 ,4,x0 i $ 290 ,000 $ 1,71.1,126 2 $ ,001 , 126 % r 1988 $ 320,000, $ 4681,762 ' $ 2,001 ,762' e 1989 $ 3500000 $ 11649,362 $ 10999,362 1990 $ 390,000 $ 1►613926 $ 2,003,926 1991 $ 410 ,000 $ 1 ,574 ,438 ` $ 2,004 438 s f 1992 $.15j170, 000 6 .6504900� 11530,900 $1 ' � , ! TOTAL& $12i000,000 $181671j516 36 671 5X6 #171400 O, 00 21-1 ft I r Year Principal Interest Total � 1982 $ 1500000$ $ 1,9571500 $ 2 107 500 1983 $ 1600000 $ 1►940,626 $ 2,100P626 1984 $ 180,000 $ 11922,626 $ 2 ;102 ,626 1 1985 $ 2000000 $ .1 ,902, 376 $ 2 ,1112,376 1986 $ 2200000 $ 1 ,879 ,876 $ 2►099;876 ► ! 1987 $ 250 ,006 $ '1 ,855 126 $ 2,105 , 126, ! 1988 $ 2800000 $ 1 ,H27 ,b00 $ 2 ,107,00p .1989 $ 310 ,00{3 $ 1 ,795 ,500 $ '2 ,'105,500 k ( 1990 $ 340,0010' $ '10760 ,626 $ 2,1000626. r i 1991 Is 360,000 $ 11722,376 $ 2,T02 ,376 1992 X14 ,930,000 1 ,679,626 ' 16 609 1026 TOTALS $17,460,000 $20, 243,258 $371043 58 1� PROCEEDS TO S tSc Le Flow-Through; $ 971t742 � 1 i 4% Fees 696,000 $L647174 E i 1 1 j ! 3 - 1§ ' � .,iet. =, .., rl';, .. uci. .,. 4 ]P. . .... rl � fl ':,isif ( ifr_d,:. .1. •h 14v��a1? `5�'\'f'�ti� �lr`dti S.�n .. 1, 4'. q r Kidder,?cabody A Co. {{ boorpetAUd f i, r ! INVESTMENT BAk�KING AGREEMENT THIS a ..dl2E�MENT entered Into this day `af , • 1991 � i I between 'Kidderr Peabody do Co, Incorporated, et sl, ("the Managers" and the Housing Finance Corporation. WHEREAS, the Corporation Is deal rous of Implementing a program designed to most the current and potential shortage of housing within Texas (the "Program"); and I WHEREAS, the Managers have high standings In the fields of local ' i government and housing finance and wide and various experience In formulating and marketing public band Issues related thereto; NOW, THEREFORE, In conelderation of the premises and the mutual promises herein contained, the `'partips : hereto agree as follower , ( 1 ) To mako members of their staffs available to the Corporation and Its consultants at 611 reasonable tlme $ In order that — the f financing contem lated P g ma Y proceed with dispatch. ( 2 ) To attend any meeting of the Corporation or of local lending, Institutions when requested In order to assist the Corporation on matters relating to the Program ( 3 ) To 'solicit Interest from and meet with officials 1 of local lending institutions to determine' the degree of'comr'nit.tnent by such local lending Institutions to make mortgage loans under, the ( Program, ' ( 4) Once general agreement is reached between the Corporation and the ' Managers conoerning t the Program, to prepare a detailadr sound, and � feasible financing ' plan Which will pr' Vida the funds necessary to impierhont the Programb 3 E Said 'financing plan thali the udo wivice , ' analysis, and details cono4erning the followings (a) The size of ' the, revenue bond Issue f .j of the Cotpp'ratinn' and the j ► commitments by';the local lending ' i institutions" relied upon to support such isd„e, . h r 1 �,, } . ill 51;4{i;`�Y41C,ydf•'�„i, 3\' L I f+ Kidder,PeabodyACo, i.wrlpor�ad r i (b) The manner In which bond procea3ds ! and revenue will be distribiited and Fry accounted for by a Trustee or Other entity, r ' l (c) All other financial details of any Includln a Dods _ to be .Issued . ., proposed g assumed maturities and lntsrest retest reserve accounts, and I; : r cash flow bssumptions,, and other covenants, termsl' and conditions that will assure ' mark'etability of such bonds. ; Ar (d) Information with respect to the offering of such bonds for sale and the documents and information required to be provided in order to create the most favorable market for such proposed bonds. (e) Information with respect to the j administrative steps required by the Corporation to authorize` and issue such proposed bonds ( 5) To assist in the preparation of documents Fr b or etween local lending institutions end the 1 Corporation and a trust Indenture between the Trustee and the Corporation (6) To pre are � E , p p print, and distribute to prospective � t bond buyers, the Officl81 Statement which will f I fgrm the b'sais of the bond offering, which Qfti+~inl Statement will contaln,' among other thingat I, a : I Deecrlptlon of the bonds to bn i Offered. I (b) Summary of the trust indenture and Pertinent agreements. ' (d) Description of the community and Its-need:'f ortaP j h . o' i r gram, i E The Orite ,r. = ; adapted by thu � CarPnra'. tV6n for Program partlelpa�ldn. , (e) Pertinent his tOrical records of particlpnting local lending Institutions, i R�.�St.d}t'14k .. + ,1:,;}t5.; •n$ tl N: 5 . +. . l wn., 4t=, : , ,, ..l3.:.: p . s Kidder,Peabody 8 Go. ,» i Inoorponted ��i 1 1 J (f} Bond ninturity schedule, i i (q) Proposed dioposition of bond pmceads, ; r l (h) Such other data as deemed advisable t ► and customary In the preparation area•, lan � ?} ` and distribution of an Official 4 • � 1 Statement. r ( 7) To have available melnbers of their staffs to ! j t 1 eatif a 8 expert w itnd y Y p sae$ on any financing r plan at any necessary bond validation or outer legal proceed rigs. r ( �) To oailfer by direct personal ca►titact with the municipal rating services and provide such services with complete information regarding ! the contemplated housing finance program and i the 'community generally In order that they may give the bonds the highest rating possible. ( 9) To prepare computerized cash flow analyses in connection with tho Program structure and eating agency presentations. (1:0) To stimulate a wide interest In the proposed hands 6mong Peospective Institutional bond buyers through direct and i Y g personal contact. (11 ) With respect to the issuance of the debt, at such limel as all pertinent documents and # agrernments have been found by the Corporation A and by the Managers to be acceptable In form and substance for financing purposes and the financing ,ls thought to be feasible and money-market conditions opportuhe; for an offering Of the °° Issu•e, the Managers will submit a' Contract of purchase, in a fcrm . previously agreed to, with respect to the Isbue. i IT IS UNDERSTOOD that the Corporation Is under no obligation to accept any, proposal which the Managers may submit for the said of the .bond lgsue, ' If, j followlntl receipt by the Corporation of any of the Manager g proposals, the ` Corporation, having negotlaled in gaol faith far the sale of the Issue, should fall to reach an agreement with the Managers for such tale, then either, Harty May" disecniinue such negotiations by giving notice to that . effect, end ,a11 obligations would terminate and the Corporation would thereafter be free to market Its bantls in any tanner It deems advisable. It ie further understood and agreed that In such � E instance the Managers. would not be responsible for any expenses of the Corporation or , any of Its representatives, agents, 'or cansuftents or for any printing or engraving expenses ' or any expenses `incurred in connection with aompilnr►oe with State � securlties laws,. It la further understood that In such instance the Corporation would + s . • it y a , M ! Y 1 .3uuylSf¢4.f ifM, ';Vt !il Fa. .,.:a r•a•� ! .rY• ' , • ..Ai" f .li , .1 Up.•s b. is :p i A 12 : V d rlaflNu 4•. , 4NF JY:'�i.n'a, r ! .. .1 t� +r xidaa.,>r;.body$ Co, r i�ogptNed' � �t not be requited ta' pair the Mpnre any fee ,or other c6mpensation or to 'reirnburse F the Managers far bxpensas Incurred In connection with the issue., UPOW EXECUTION AND ACCEPTANCE as indicated below, this Intter will`.constitute a 'acntract between the Corporation and the Managers. KIDDER, PEABODY !!c CO. INCORPORATED t i By= ACCEPTED: HOUSING FINANCE CDRPORATION � ; 4 ! BY' E Chairman DATES 1 ! ` f i 1 r 1 s . . µ L ,a Kidder, Peabody 8 Co, (NCOIttpItATBD � ; NEW YORK + ppSYCIN r'HILADELPHIA 1747 CITAbELL PLAZA E .CHICAOO SAN FNANCISCO LOS ANOCLCS SAN ANTONIO, TeNAs 78209 ATLANTA DALLAS KANSAS CITY, M0. TCL 0512) 8.:8'2802 R. July 140 1981 P Ra k Mr, G,_Chris Hartunq, City Manager, I` city of Denton 215 E. McKinney Street Denton, Texas 76201 Dear Mr. Hartungt Judge George Preston of Denton County has requeated that we Invite you, j your Meynr, and members of your Council to a complimentary luncheon at the i Ramada Inn, 820 Interstate 35 East In Denton, at 11130 aim. on `'Tuesday, July 21st. After lunch, we will discuss the ­)pportunitles available for countles and 1 cities such as yours to participate In a re9lonal Housing Finance Corporation undar H, A 2350, I Through the Essuance of' munlclpal bonds, the Housing. Finarnde Co�rporatibn would be ablRa, to provide mortgage funds In its rrlarket :area at Interest rates that ` make economic sense, 'This program makes housing available to that segment of tine ! citizenry which heq beers eliminated from the market by Gur. inflationary 600hb riy. At the name tlrnd, this program has adt.+lty.onal p'ositivp aspects which benefit other segments of ,.hg" community. It lnareases th = city's tax base w l't o u t , Increasing' tax rates, generates construction act•lvlty Rand ornploymentp as well as cheating additional mortgage business for hanks and savings an.^l loan associations. l Denton County has been Involved In the past In this typ9 of financing and will participate, flgaln an an even larger .scale In additional housing bond. Issues, Or, � December 15, 1960, Denton ,County , Housing Finance Corporation went to mar�.et with a $241655t000 Single Family Mortgage Revenue Bond Issue. This flnancing was t negotiated with Kidder, Peabody and Citibank, N. A., at an Effective Interest Rath of .9.8392%. Upon closing of the bond issue, this placed $21,0000000 in, 11.3596 mortgage money in Denton County, The .. tremendous ,public response and participating lenders' aoceptanoe has proven this type of approach a popular and j ' feasible answer to housing reads. 4. 1 f / ti .I . ..: 1,l pf P{-.i a.. R Kidder;Nobody a Co. - . ;•••��••"0'd Mr. Ci.'. Chris 'Hartung, City: Manager k City of Denton ` t July 140 ' 1"1 Page 2 s P1606 call' at+.dg'e Preston's office, (817) W-1212 -- or 'wilts .hirn a' ` the ' . County Gdurthg6se, Denton; Texas 7520Y,,`to lndieata your interest ' and `the number, attending in your group* free to invite Interested trktiz�ns, particularly builders and sa4ings and loan officials. r For adyanee information on this subject, please call me 'or Fred Baker at (512) 828..1802. Wq look forward to seeing you an lily list, Sincerely yours, l a 1 KIDDE=R, PEABODY & CO. INCORPORATED Bill Carp�Mt�r- r ci { ! F F i' v LL r + P$3 i ,IUL 15 19sr CITY Of DENT'0 J-� �'s owe r,' a i :IHi„l.it ry-isjs;GF. +. ,r r .,.il..F.,.:Y• .H ,[ ,: ,. }. r ,f.. r.,!.i ,�, !. ,.h'}.{,:Jv.s(rE ave.Jl.4. - .. .,. n F KIDDEI2o PEABODY ;i CO, F;RST S.OUTiMST COMPANY INCORPORATED WILLIAM R. 'HOt1GEt i Co j CITIBANK HOWARDO WVIL, LA6OUISS9 FRYEDw"S INC . C_o11t1►--Housing Oin�� a n Loan-To- Lender Revenue Bonds, 1981 Series` A Prelimina ry Time Schedule Rev sed 2 3 , Monday, July 27 A) Discussion of Lender/Developer Interest in Program. B) Passage of Resolutibn declaring Corporation' s intent to authorize the issuance and sale of Bonds to provide financing for 'specific projects. Monday, August iY A) Distribution of revised lender documents describing transaction . BWPreliminary establishment of maxi- mum income limit for tenantr, vo' id- ing in 801 of the units of the 'Pro- 4 ject . C)*Determination by Corporation to ` out-of-county Isnders and/oK developers into Program. DA$ubmission by interested lenders of audited financials to Corpora- tion ('3 copies). f Monday, August kd ;L+ A) Comments on lender documents made by lenders to Corporation . k B) Preliminary establishment of mini- mum mum Lender Loan : Amount pe r nder. i C) Solicit Trustee proposals. Monday, August YY .SI A) Commitment Fees ( 14) on lender loans paid by lender to Corpora. tion ( Good until Nova It 1981 ) . ' B) Lenders submit copies of Mortgage + I File and Government Obligation Pile which are anticipated to be used as ti collateral for Lender Loan ( 3 copies ! of each) . I �' .. .�.+.: in .. . ,.:: r,ix' 11:?A+S r.-:•, na,i.N4:-y tr ,k Stc .,4<.r+f+,�t `.. . ..�l ,q{s•iEkir f i I' r r r' Wednesday, August ,!4P*tI- A) Underwrlters ' eend,' lenQex ( ocuments ' and audited financials to 'reti.ng ' l a�enGies. „� - C B) Select Trustee. Thursday, 'August-*?' tto A) Rating meetings in Nex Rork: Nonday, August 31 t �) Corporation approves m cling of .,. Preliminary official Statement. ry B) Passsage of :Final Resolution by ' 'r Corporation identifying Projects to be funded. r Thursday, September z 17 A) Preliminary Official State- ment is ' Mailed. Wedv isday, September ,3 thru Pridayr September y1 Lr A) Marketing of Bonds Wednesday, September yd 30 A) Bond Saje ` . Wedn4sdayr (October Yet 2. 1 A) Delivery of Bonds I I I { 0 1 x j K IDDER, PEABODY & CO . FIRST $OUTHWEST COMPANY J INCG`RPORATED HOWARD WEILOOLABOtICO. CITIBANK` ISSE t< FRIED41CAS INC. 44� DENTON COUNTY HOUSING FINANCE CORPORATION, TEXAS Preliminary Multi-Family Pr ram Parameters (Rev bed 7/31/81 ) 1 ) Project Criteria f A . Multiple Buildings ( New Construction , Rehabilita- l tion or .Acquisition from an unrelated seller) which are both ! functionally and geographically integrated# such as , a series of buildings consti,tuti`►ug a garden apartment development . E B . . 2Q of the units of the Project must be occupied i or " held vacant for persons of 1'aw and moderate income 808 or less of median family income cf ,S .M.S.A. or County for a f family` of four} for a, petiod of 20 years following availability of Project for occupahcy. C . With respect to 208 re4uiir6m6nt , if, for .example , a ` Project consists of 10 functionally and ' geographioally integrated buildings, with an equal `"umbel` of units in each , top test could be satisfied by' ,aesi4natinq the units in 2 of those, 10 buildings for occupahoy` by those families af ' four, with incomes. of 808 or, less of "mbdian fam.fl,r income of S . M. S.A. or County, rather than requiring 208 of the units of each separate ' I building to be so occupied. D . Each project will be subjected to a deed restriction running with the land, which specifically requires that ( i ) all units oe held as rental property while bonds are outstanding E and ( ii ) 208 of the units in the project be occupied or held vacant for tenants with incomes of 808 or less of median family ' income 'of S M .S .A , or County for a family of four . k E . All Lender and Developer Loans must be closed within six months following delivery of the Bands . F . The Corporation may substitute Projects , Devela pers and Lenders during the first six montrls after delivery of the Bonds6 i k k E f i • f r. f G . Tax exempt bond proceeds may not be used for : i ) refinancing of existing projects) ii ) financing of expenditures i incurred y prior to official action of the Cor 'poration Approving the . Project$ or 1 iii ) financing 0 any Project for which expenditures. have, beon made , or con tracts have been enteied : into, other than for preliminary studies or ac- r quisition of land. 2) income/Rent. Criteria p , A. The maximum income of tenants residing in the units comprising 20B of the total units of the Project will be y . or County for a ? 808 of median ' famil income of the S .M.S .A family of four. E BOk The maximum income of tenants residing in another � . 10% of the units will initially be determined by the corpora- tion; and adjusted upward periodically to reflect at least the p increases in, the consumer , peice index, or aoch' greater 'amount ; a$ the Cor,pnzation may determine in the light of e,c.bnom 10 f eonditions ' 'in effect at the time . C. The remaining 108 of the units may be o,ocupied j by tenants without regard to income . D. There will be no rent restrictions established by the ' Corporation with respect to an•y of the units of the project . 3 ). Loan Criteria ; j A . it is anticipated. that the developer/owner loan will be either a 25 year 'or . 30 year amortization with a balloon: payment due in the 10-15 year ranges B . it is anticipated that the lender loan will mature at the same point in time in which the developer loan becomes due and payable , C . The loan- to- lender is ; equal to total costs of construction of the Project plus lender' s pro-rate. portion of costs of issuance on the bonds , which costs will not exceed 38 of the principal amount of bonds issued . D. The loan to developer/owner is equal to the loan to Tender* f kl n:,n• .! .y,1 :Fl.A'.�2l J.q::'..rr.rCl i ill . . " !U. F 4 ) Collateral Requirements A. Lender Loan Collateral pledged' as security, for the ponds will be valued at least quarterly, and most b4 main tailed ; in amounts at least equal- . to 125% , in , the case of f certain government obligations , : 1408 in the case of curtain ♦ FHA-in$ured ; or VA-guaranteed mortgages, and 150% in the case of a conventional mortgages , of the unpaid principal ' balance of the Lender 'Loan. . R -8 . All mortgages pledged as collateral will have a ]� . one year seasoning requirement . Co The average coupon , on the mortgages pledged as r collateral must no+: exceed the yield on the bonds on a per ; lender basis . D . The .remaining term of the mortgages pledged as collateral ,must, 'be at least equal to the remaining term of the bonds. E E . All mortgages' pledged as collateral must not have been delinquent for thirty days or more during the 1—T months prior to delivery of the bonds. i F. Valuation of Collateral will be done by Citibank,, 5 ), , Origination Fees A: It is anticipated that the lenders will receive 'end ret&in ' a total of. four' points 'from the developer/ownrer( as } :_ J origiha'Oon fees for ' providing both ' the construction loan' ( 2 points ) and the permanent loan ( 2 points) : Cor'4mitmeat Fees ; A It is anticipated that the lender will ', pay ;the: Corl�oration a non refundable 1 % commitment fee prior to ` tha dafl,'e of the sale of the bonds , which the lender may recaptUr'e from the developer/owner of the Project . 7 ), Develope ZOwner Optional Prepayment Provisions A. Developer/Owner Loan ' may be optionally ` prepaid beginning in : the sixth bond,, year, at a prepayment penalty of 5% I declining 1B '_a year for five years . " 8 ) Rating on the Bondi; It is al tiai,pated that the Collateralized Loan-To- Lender .Revenue fonds wzll receive at least a AA rating , pot4h;- tially a AAA ' rating fr-om either or both of the rating '' sen,�lices due to the Citibank collateral market value guarantee: 3 Sr t 1 r 1.r .r .rr..♦ :Irr 1 i �j A RE$Oi,UTION . AUTUiORI ZI'NG AN ISSUE OF t THE ' bENTQN COUNTS' HOUSING FINANCE CORPORATION COLLATER!+LIZED ROAN—TO-LENDER REVENUE BONDS; ! 1981 ;SERIES At 00R .THE PURPOSE OF FINANCING CERTAIN MULTI—FAMILY RENTAL HOUSING PROJECTS t BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TO 'DENTON COUNTY HOUSING FINANCE CORPORATION AS FOLLOWSs i Section 1 . Authorization of an Issue of . Bonds In accordance with the Articles of Incorporation and Bylaws of P° a 35 the Corporation and the ,laws of the State of 2eicas ,. that hereby authorized an issue of bonds of the Corporation`, ' in a ;principal amount presently estimated to be approximately $�� o to be known as "Denton County Hou$ n§ Financq, E Corporation" Collateralized Loan-To-Lender Revenue ' Bonda► 198 € Berries A" ( the Obonds" ) . ,The Bonds are to be issued to provl,de the Corporation with funds to make loans {,r he ,.'�'r;dans" f ti ' " " '� f' certain lending institutions ( the Lenders ) , sy, ' eCt too ' requirement that the proceeds of such Loans bPr u6ec3 ro f construction and permanent loans with respect to multi->CamiIy ' U rental housing projects ( the "Projects" ) meeting the requ3 re--' " ments of the Corporation , The Bonds will be issued upon such terms and conditions as may be agreed upon by the Corporation and the Lenders , the issuance and sale of such Bonds to be . authorized by resolution of the Corporation at a meeting to be held for such purposes ' i ,qt i 1�.rj .r"A NI AJa .. :�... .t. . 1 ' g:r ylkY'a ., te .u> .,fxl:cr..,.lir,k.�Gn <.�...a ' , r Section 2 . . Intent to Issue Seourtties of This Corpora ,t34 to Finance Multi-Family, Projects. The Boafrd" of birectors of this Corrporation does hereby declare its intention to r authorize the issuance and dale of the bonds to provide con- ! r struction and permanent financing for the Projects described in, r , Sihibits A through attached hereto, subject to filial { approval of such projects by the lender and this Corporation . Additional Projects may be approved for inclusion in this financing upon resolution of this Board in the future. i Section 30 Bffectieness of This' Resolution . This - R { a r RResolution shall take effect upon its passage, , Adopted and 'approved "uly 27 , 1981 . t3�a. d W pr# ent f Attests w edretary I t � +I 2 Ij 1 . . �aqs r:.a,t.. :_... .,. ;.w,y .r:,.t.e;.!dt fti r,r,.. qs, u r.,, .. .....• .. .ci .t ±h, .,,s.. 'JPr, ra . i D ERTOfa cap= H WSING rim COPlaOMICN 'IFAMQ.X RrZTF'AL H WSD* P1K7DCT�APPI rAT Nina WA Address of Dnvelopr,IXMer: Ouailcrest Limited 1 346 west'Main + -Suite 101 Lewisville , Texas 7506,1 r ;� Nmn9' and Address of sr==ris* i institution: Korth Texas sgkyjn And Loan POBx65 Deptoo Texts 76203�__�wr__,_ y 1►7Dp 3ect Z73fOT211dt1C1Cf� a) Site Location: Edmonds. & Purnell Street Lewisville Texas by to To 2%o Un1 : C) Appro ilrate'Nwbar of i E3ffiCierfCy units _____........_..._ .. I bedLOm units .,. 2 units' 15b 3 be&OW units 46 I to 'Total i~.os is of Nxchwl� OwnOr'S profit: $ 10 Million � ; naoded for,Y11 11 only bond program) A l P Alvetodm w Time Necessary ' t o Ca�lste C nstYut tloneo 12'Hantr.a .r l represent that the above r t►as undersi exencecl zo ect bc�,zn st ns tied to 'the L nding. Institution for oonsicaraticm ar�d ar�rovr� $s a pal of the;Gozpoxetion'S WdtifaMJ'.:� moans-Tc>-Y�er�d�xs Prtt�r�n. F. g 'lzsti.'t tars ti r I:•t A "OOI&Irld Qr @ib�r , Now t 1 l SS 1 • r i ! 1 , r i 1. w r r , r i , , p r s Y h.i,1'd�i:�. liJ.r,4rat-2.' , 4t5s of BltS 4L :�{Y{t 411\ L�N.\1l ri ,.tA f,. l tl dtlF[,LX rkll. l•• h s • pFTTIt�N c0rmy "OriSM MoNa CORPORATION KJLTIFAIMY PEIT I+ HOUSING 'P P • APPLICATION ess of Wit. h Texas -Savuri s 6�� c Nom : A z otter investors �. P.O. Box 69 ' Wx th Texas Savings Loan Nact and A&lre5s of Sponsoring Jw x�3is:q insti ttution: f P.O. Box 69 Dentcz:a Texas ; Us]project Lzfort ti an: OW ?7 A) sit Deng Texas I A raritn��e Tote < o) p�t.e Nub of efficiency units .� _.�..r.._. 20 G4 2 r .. bedroom units »--------r.- r. sutf bo 'm is • , d) .m�•i.m�.�, rotal Costs of txyxct�,cm Excl.uvling $ 5 mi.1ion d mex' profit: - r i 1' a. ;:p .Ault—:.11141Vrwki ,� {.rz: oA, .iYi•. r tl @J Apprcxbrate TlnL3 Nc .ssaxy 12 months ' r to cmplete Construotioon: 3'h e tm4ers3.gn ed zenresent that the above roferenGed Project has bwn 'str'adtted to the LepcUng Institution fax oonsideraLiG1 and ao royal 5s a part of the 7%" �; Multa f n lX LoarLS-T(>--Ltnders Progr=. Pis nt ide .. ! s For Legdung Ihs tut,iar i 1 � a For g � ^ t i DeVee��Owt- �x � 5 , F ; 1 111 1 1 rT 1 � 1 1 ,1 + 1 , , 1 I j Si J � ( 11 ' i1 Y� 1. ,`.i ...-Y.`;n• '. J♦. ..a tjri � 1- ... ,,, .•I J. :. - r e n i . D pi OOtJN!'Y HOUSING FIIIA2JCE CORPORATI(W yJJ MUL4'TF'7V1TLy RkNPAI, DOUSYNG P1OJWr APPLICATION 1 Name and Address of Devslopor/ weer; Real Estate Services, Inc, r ' P, �0, Box '1307 ' Denton, Texas 76201 Name and Address of Sponsoritxl ' � '..Institutions ' Denton Savzn s A,soGiation P. b, Box 1307 # , f Denton, Texas 76201 R6Ct 100= ti.cn: a) Site rocatict Dal 1zs Chive i ---- -- Denton Texan i b) Nu S zoo C) APPrOximte Nurber of: efficiency units 4 " 1 bec9roam urnits 7S r. bedroom units 100 bedtoatt twits 25 d) . M imate Total Costs of t; -- txt, EcCltacling Owner's , r - is ul .:. `:�•r i,\�tAkFl.:'i'. r f nt . . ;:. � 1 : it 1 L P e) Approximate Time Necessary to Cwplebe Construction: 2 years The un&rsigned represent that the above referenced Project has been submitted to the Lendiml lnstitutim for oonsideration and approval 1 as a part of the Corporations Multifamily Loans-Tb-Zenders Program: j For lnstttution s Lkl' ! F Dev'e er ^ t f s r � 1 f tr { d I4F 3 1 j „k M s C r . � I r r 1 1 ' � 1 AIIJ'XN COUMT HOUSING FINANCE CORPORkrICN �I+Sll7 TIFA!lILX WT1rAL HQUSTNG PRWFCT APPLICATION Name and'Address of Developer/diner Real Estate Services, Inc. l Denton, • Texas 76 02 Nano, and ,address Of Sperosori nq i < , Teal.V Yn Utsationr. Denton Savings Association ' P. 0. Bar 1307. Denton, Texas 76202 t l ' 4 ftojeCtp InfOMOt3on; 4' 288 a) $ate Locati : . � • p Denton, Texas € Total NUqter of Unitsi E c) Approximate 146mber of - efficiency units "_____ .. x beftc m units SO 2 bodra 'units 1'2S 4 bedrooc Xnits 2S a} ZbtaI Costs of true io», Excluding l Uanex's Profi,t. -- E I yp e} Appraximate Time Necessary to Crnplete LStxucLion� x years The imdersighed represent that the above referenced Project has been SO pitted to V*. loxkling Institution for oorLgideration and approval ' aS a part of the Corpor4ti0n's MAUfamily Moans-T f Al nq . r Rw 1embno lmtitut4l6n IN f 'bevel IN t 1 ! /1 .I lt s 1 . •r i '• ti r 1 ` IN ' .. 3 .r2_ r ='{'c•: r >'. �• � �.:d:a , . l...Vin.. a IIIV r. .,.... . r i� 11 u i pENvIiCN OOCWN HOUSIM FTNAtJCE p0}2POR4TTON MUUMAKELY RW-rAL wisim PPOM APKJSATTON Nam apd Ad&eSS oi[ f)evel e : h -C4,0 ICA ' Name and Aw�C3resg of SperosaraM .'ssug l;nstitutiar� ARMERS & �{ criuliAftf'$ StNTc EIANK� 14UAlR TF)(AS 76244 1 C t Project Inforn tiara•" y a) Site rACatifon: I b) i b'tmate Total Units t d ' C) Awroxi►naW Number of I -• effiefency units k ' Y �du Units a .A 2 is ',7 .1 'r S e) mdm to Total COSts Of �onstriu�t�Qn, xrlux3ing Owner 's Pv)frit: �. I � � a 4 ,f .. Ja r. jl[41..aV'e ... • .'. r i r t r1 I E, r �) pproX3 rate Tiffe Necessary to Cad ete Oc Mtz=tibns The unc3exsigned zeoresent that the a�w+�e zeferenc d ro�ect has for, �nsideratiun and approval vux tied tom I ���9 Institution Leans-7co-Ler�tlFxs program rporatian s MUUfamily I part of the ` 9�r4 4< h For lUpex/ tu,on Al evor � e s +1 s [ rR �7 .a i is , 1 I r , ,I II 111 : y *SIGH ,f . .. av +1 r fT ��. h I DSWX)N .00UN`zY Hous= FnwM CORMRATICN 1WLTIMMIL'Y ItEWn HWSM PFROJDC'P APPLICATION } w(a mss of Developer/owner: T�s: ' I r• '�h t i Nam and Address of 5ponsorirq a Lerx irq Institution;, 1 F I tProjec t 3.n for tian: a) Site JOCeatf I + Q� 7e n_ t 7rr' by >itxirnatebtal Nu z o iJnits: cr.,, C) Appraximate Number of: efficiwwy units - 2 bedrom units 4 bedr0 m units d) moxi�nat8 Total Costs of ERE M1 Rccludirig w—lerts Pmfit: $rt� � {s«,.,. ,. . . _iaPtl,.:4Y,-a t.,,$4. i:t, ..,..;..r .. s ..4, r , x,. • A .r ' .s ... 7i, r.'n*. ; n , u , 4'} ' tG Tlire NeC2ssary r CL�t�2et@ Canstrwtj n.. beeq The undexsigned represent that the above z�ef sutmitted to the erez)md Project }� as a part of the Cdrpc,ce { ti tutat for =1sideratton and appre ! Multifamily 1.cans-To- r ' 1 ' mss. procjrams r or lnstxtu on, 4 Far Develoix's/ t , n rs , ,rail 'i r i , r 3 (E� . .2- i 1 1$ YL �Y �til?' „itf S r E�i2A'PICE� � DEN'I'Uy OatJI�II'X fI0i75�hG F�TA�`C� UD.P • i+PJLI'TFA�III,Y Rf' rPJ, 1100STNG L'F8U7EX.T APPLTMIUN Na and Address of NtVeloper/Ownere ;, ✓ / 1--- L� r Name and Address of Sponsoring , I1Stitutfont t, j�IC li�}til� YCYec CBUtttPQ A_ "h P. 0. 80X 69 Site L<y, ' PYri�ect Zntorn�akfoa� .� F • ntraxrncimate Total � �S• f r k ' o) Approximte N%rab.x of: efficiency units 1 bedrw-n wits F. - 2 )Y-4rccm Waits <, ba"'J'ro l 1 �i.bs 1 d) {b:.Ls of ; f c�>v;LriicLionp Bxc'.u:li.nq r, i ' " Ij Fs) Ariprox=o to Tiw Neiessary �• F+ �' XE �?Y'�'71�CX3 .17ro �1'.y rs3 The l n r5]Cjt3C , YG'�XG' X211 t111r t�l, c k7V L S1C{ Yclf:l�l , %%) 'il; suxm tied to tNs Landxtig 7r�skit.0 Un pox cx>r t r �' ly Loans-To - l'�7;1GT5 PKCX �:ct x ti rn s rfult ,family as a� t Corpora vj br 'll C� 1i5�1tL1�OC1 { i , S p " oz Develop/owne�: 1 ' KPH � •I r� 1 , I r 1 � k I } ,� 5a , E S 2� r 11 i lot Denton County Housing' M16nca Cork,.,�ation Cross Spread Distribution r, November .'1, :1",81 17 .31 Ii Expanses. . . 3.19 i;• i. Managamant Fa.. . ♦ . . ♦ . . . . x . . . . 40.60 - 3.00 -' Underwritin 4444 ♦ . « 4444 . . $ 25100 : , t y(A 1 A} j r • {1); Yfdi�•et (23X) ► , Oi t*bank (232) ,• fir.t 560t*mst (292? . �. Hm *rd Vail (iS 5 a . Wi11l s :t« dough (1 ♦S'�� � t r" f t Ij f ir it " • ., ` ".1R'. Lb LN.,:•il I! �nrq`atrti:w�ntA tYi1S,44,{l� /:i,4 Y .i'. ray er. ,.y,4.Ill 4 M ' ' 1 8 DENMN !9 O u OF ISSUANCE f: ILI A Corporation Counsel $ 51000100 Bond Counsel 25.000.00 a Ta�c .Counsel 20 , 000 . 00 Citibank Counsel Legal , Document Printing 7, 500,00 Official Statement Printing 23 000. 0 Rating Agency Fee 130000.00 s f Trnattte Upfront Fee 8 000. 001 .r Computer Fee 80000.00 , Feasibility 4 000. 00 i xhtift Resources 24, 725.Ob Citibank ,CO11 Putch. Feel 21 , 512 . 50 "I ILI, Bond printing & Signature Company 17 76.2 '50 _. ..e 5197 , 500,`0 i I I III u' J 1 1 r I e , x e 1 IIL F Y • • , t 1 r 4 r R t al r NA CAM ti. z f s < i V � r x �SS�i •� f 1� � jj c .q,p ya �e yy rr � i t 4 f L . 1 � I b r ' 1 1 Al qy RENTAL, ROUSING DEMAND ANALYSIS DENTON'C6UIVTY, TEXAS j rJ• 1 Cl f a IC f fG i r Vol 1 J! r s t p p■.; ><.� �,�r .>,{, r\ t , � �., ���'� Prepared.by y}�� F Ni rig rv.i r�.. irir�;lat > �c. it r/ ♦ e � -- { 'r! / + i>t 1 ` ♦C S�^ N Eav of�}'ri .}t_tf (' � 3{��c 1v f � �: ' ��: r. L ra +p C 'Co��/I TTi P 1 986 Boulevard Center Drive, Suite 1 t P..O. Box 62507 Jacksonville, Florida 32201 September, 198 1 r I � 1 I I 1 41& - --- 4 t, WASGTC � CAAA CK . � . FT, LAUDEIGALE ECCrOMIC/MANAGEMENT C04SMUOS 1 September 10 $' 1981 E Mr , Tom Becker ] Vice President , r» Kidder , Peabody 6 Co. , Inc . 10 Hanover Square } �. , New York, New York 10005 a it Dear Mr . Becker: ?4 on July 31) 1081 ; kidder Peabody slid Company, Inc , , retained PLANTM ; Corporation to assess rental . housJ-,A8 demand in Dentop : County . 'After analyzing socioec'onomie trend s ,`' both a bsidiied and unsubaiiliied # apartment rental housing demand , 'apd market r.-nt levels in Denton county, pLANTLC assembled the follownag re,yort . . , This. roport is contittgent upon the following basic gsstimptions : Denton County trill not be subject to major economic changes { i , y pr ; which vary ,�igni.ficantl from projected trends , Iptorr�ation obtained and utilized from both published and un- published` secondary sources is sufficiently accurate to provide a reasonable basis for planning . # 411 proposed projects will be competently' developed , `promoted i � and aunatad in accordance with the most effective planning and marketing'; concepts . i , 4 , p its unl,tss I P#,AIITL�C d4�,� noC warrant the absor tion of these .un :'they ;aze. t4nted- at, coimpet'iiive )rates and '.propikrly located , In addKipp ,' the finanniwl feasibility of, any, rental units built +' ,: bas not bGen , *ddressed here' and coneequthtlp cannot be par a%%tetd. Should any of these assumptions chance significantly, conclusions derived from this analysis will rggiiire review for possible modificat on. 4` t• We have once more• enjoyed ' serving your firm and commend your efforts co t provide financing':�,:for &if'' able rental' housing in Denton County. r FAncerely, s Scott F. . Mittlemau Proje:t Manager SE ' /cb I rf ' Soulersrd Censer Drive, Suitt l 904/ 62011 *, P.O. Box 52507 8fbG6� 000 j kC xn.lie, Florida V201 , f t SUMMARY AND CONCLUSIONS ; The following aformation represents 1 " } g P is the major findings of .this f. 1 a'tody. o Denton County, Texas, experienced an average annual P,444' tion ( � gain of almost 6j750 persons between 1970 and 1980 . Between .J 1980 and 1990, Denton County is expected to Add an average of i . , 8 , 370 persons a year. . ' 0 Employment ¢rowth has been strong in Denton County' over the past de p p oade, .an average of 1 ,850 employed; persons relocated to 7 the county annually during the 1970s . 1 , .. o Several major : ih�lustris8 plan to either locate or expand their I facilities in Din*on County, including , 3M , 'Xerox, and Texa r s Instruments , 1 'r i t t o According to the U. S. De artment p of Housing and Urban Develop- ment (HUD) , the 1991 mediae family income for the Da1 ', at / Ft . Worth SM SA is $2 ,300 , up almost' 20 percent from 1980,r r,- f I � o Denton County contains two major universities , North Texas State and Texas Wanaq' 0 University. With a canbined `enrollm4nt ,: ! to of over 240000 much of the county' s rental stock is stbdent•. oriented and, an a result , is nearly 100 pore occupied for • at least nine ,months' Out of the year , i o Between 1980 and 1990 'housing demand in Denton County should average 3 ,540 units per year , Of this total , annual rental housing demand should average approximately 670 units , or 19 i percent ; ownership housing ; 2 , 620 units , or 74 percent ; and 41 mobile homes 256 units , ar seven percent . ' Pro jeoted rental #yV demand could actually surpass 670 units a year because of the high intorest rates that have forced many families out of the ownership housing market , o PLANTEC ' s survey of rental spartsment complexes in Denton County revRaled an overall vacancy rate of 4 .6 percent . However , this 1 survey was conducted during the 'first week of 'August when many . { students are on euasaer break, so vacancy rates can be expected to drop substantially by September , particularly within the city of Denton. As of the . survey date , the vacancy rate in " Dentoo. `was, 3.4 percent , while Lewisville' s was 6.4 . o A shortage of subsidized hou.,ho, units exists in Denton County; , ' waiting lists on file with -the Denton Housing Authority for the city of Denton alone total over 300 names . { o Denton County rental rates range from $194 to $ 209,, per month �l , for efficiency units; $166 to $355 for ones-bedroom units ; '$183 to $393 for two-bedroom units; $229 tb $480 for three--bedroom ti units ; and approximately $345 per month and up for the , fev four-bedroom units available . z ` ; 'PLA=C believas that during the, next two ylsr,s the Denton County { hausiag• market could use a mortgage bond issue to finance between 800 and . , 1 ,000 new multifamily units , 'their absorption should present no problem. � r • These, aptrtmonts would probably be located, in either Denton , Lewisville , ht or Plover Mound and would satisfy most of the county ' s .projetted rental demand over the next ,wo years , including those families currently on 1 waiting lists for subsidized housing, Assuming that the cost of rental � ) housing construction currently averages around $ 30, 000 a unit ,' or $32 per n t I, 2 r i I !E ,, .,,... _ ... .,.:.., .v.'•.. gin,. . ,,... .. ;,.;. _..... ,,., ,... _, .. . , . . . ,._ .. ,.. , ,. J I square foot for corlstruetion costs plus the additional cost for land # I (ao ;cording to the R- g;: Means Building Construction Cost bata. 'for PL�£C c one ludes that . a bond issae grovidin beNeen $24 and $30 million in financing would be 'nece's;,ary to cor4truct these units l The followit � c � :'.. report details',our findings : 44 t I (( t E I i f 1 EE t I r I � ! t . j , 1 't% f DENTON COUNTY 'RENTAL HOUSING DEMAND . 1 Denton County is one of 11 counties comprisi, o the, Dallas/Fort Worth SMSA. Tho county can be characterized as a middle,, to u'pper•middl'e- , 1 ineome suburb in north •central Texas , about 30 minutes north of Dallas by E car ( Figure 1) , Darin the ' g past two decades , the Dallas/Ft . Worth SMSA. a northerly growth has generated large population increases and many new is ,job opportunities in Denton County, following the acme trends previously experienced in Collin County through the SMSA' s rapid urbstization. : POPULATION AND HOUSEHOLDS r' i t Between 1970 and 1980 Denton County grew from 75 , 633 to 143 , 126 persons , representing an annual average population gain of 6 , 750 (Table 1 ) . This figure does not -include the 24 , 000- plus students attending ;:Norih 'Texas State University and Texas woman' s Univerait y both looted in the 'city of Denton, Many of these students reside in ' the county at least nine months during the E gear , The North Central Texas Council of Governments` roJ' r p _ cti that by 1990 the county will coats in 226 ,800 persons . The 'SMSA grew from 2,4 million persona in. 1970 to 3 .b i million in 1980 and should contain almost 3. 7 million people by 1990. Even though Denton County population growth in the 19706 was s'trcng, j new bouse'nold• formation increased at an even faster pace . This increase � 1 in households is primarily due to the decline in average household size E oecurring in Denton County and nation&sly , a result of more one--person households , divorces , and a generally lower birth rata, Between 1970 and Itrt ' 1980 , Denton County added an average of almost 2 ,860 householde annually, . while the ,Dallas SMSA added almost 31 , 700 households each year , Because growth in households , or occupied housing units p g , approximates new. housing I ' 4 T demand , household growth projected through 1990 yields Denton C�unty' e i estimated average annual housing; demsnd for the 1980s--3 ,540 households . er ea'r , or a totak of 35!,400 , y P of Denton County' s cities , the most populous ,arr Denton, growing from 39 ,874 to 53 , 00 persons between 1976 and 1980 , and 3 Lewisville , increasing from 9 ,264 to 24 , 850 during the game period (Table 2 ) . Highland Villase , Flower''Hound and Lewisville are the county' s fastest , growing municipalities, and are all located in the southernmost portion of tY � .. the county, close to Dallar . s The age of Denton County ' s population is shown in i Table 3 . Betwlen ' 1970 and 1980 :the working- age segment , aged to 64 r - years , ;gsew more quickly than any other segment 'of. the population, with the bulk of the county' s growth coming from this 'group In "fact ,' she f fastest growing age group was the 25-to-34 segment , the group most likely to form new households , A very, small 6 . 1 percent of the population is ' E f. over 'ege' 65;• dropping fr6m' 7 ; 9 percent in 1970 and reaffirming Denton <r County' s Status as a yotn,ger , working-age community . M YHEN SIZ Table .4 shows the grofth'. in the number of employed person .4 in Denton County. Between 1974 and 1980', the county 'added an average of, {. 1 , 850 employed persons each year , and the unemployment rate averaged only 3 , 9 percent . The number of employed persons has continued to grow , reaching 58 ,556 as of May 1981 ; with an average 1981 unemployment rate of j ' 3 . 7 percent , r Table 5 divides Denton County employment into job categories , This differs from the figures in Table 4 , since Table 5 represents people 1 s r r I r i wo king in Denton County, rather than employed persons resitting is the 1 t` { there. Between the third quarters of county but not necessarily working { ' 78 and 1980 , 6 ,852 new jhba were added in Denton County , with alc►oat ),9 two° hirda in either manufacturing or whol`osAle and retail trade . Other ( rapidly grouting employment categories are services ; construction; And finance , insurance , and real estate . A list of Denton County' s msjor manufacturing employet6 , with over 50 employees each, is shown in Tab Ia 6 . The largest employers in the county are Text's Instruments with 20100 employees , Victor Equfpment i Company wiG'n 1 ,004, Moore Business 'Forms w-ith 500 , Krestmark Industries with 400 , Josten' s with 285 , and Russell Newman Manufacturing with 250 employees , Currently, st leant three major firms are planning to locate in Denton Ci Ginty, with a total 'potential employment level of 1 , 400 ! . people , In addition, several ma jor industries , including Texas Instru- mtnts , 3H, and Xerox , 'All of whom own land in the county, are considering t either ikpanding their, facilities or relocating to the area. This ' large amount of new ,eml.oymant growth has brought a strong demand for both owner-?+ccupied unity and rental apartments , The DeperCment of Rousing and Urban Development (9UD) has prepared' { Dallas/Fort Worth SMSA family-income distributions for the years 1969 , y� 1977 , 1979 , 1980, and 1981 (Table 7 ) , The distributions are broken dowi, } by deciles , or ten-percent groupings . During 1981 , for example , 30 percent of the Families residing in the it-county area earned $ 18 , u27 a Ft l 81 IM median family income eras, $ 25 , :300 , an f ; year or less , The 9 f , ( It should be noted that these increase of 19 . 9 percent from 1980 , 5 ; 1 1 r i 4 , p "w t y . figures are ' for the entire 11-c4�4nty SMSA , and not for D,pnton Count , f alone . Per cajaita personal inar+nae is shown iri' "able 8 . for Denton Country Becween '197�r' and` 1979 , Denton County personal income grew at a 13 . 7 - percent compound growth rate', a rate higher than that for either Texas or the nation.,l Denton County' o high growth rate reflects the .n-m 3ratibn ` » of many middle-income families to the area during the . 197ps; As of 2991 Denton Cot>rlty' e per spits personal incfte was higher than both ' aatianal t c and scnte Iliverages . rr. Popul <tion , employment , and income data all illustrate Denton .. Ccunty' a h; gh rate of growth . Located in the rapidly 'grnwing Dallas/ i ' . tort Worth; SMSA , Denton County has greatly benefited from Dallas ' noxthwazd 3?rowth during the pant decade . Because the coudty' s future f � i housin demand should be even' ` :.' growth should surpass the past decade' s , B g ' ; r greater dµx'.ng -the 1980s . With current high interest rates pre ve:iting I many per;sonei from buying homes , many fanDillea. relocating to the area are, ' 4 }IL, LL J cho osing to live in rental apartments . Both this fact and. the, demand for ' I apartmei►ta genexr:ted by North Texas State University and ferns wOmaA' s ' Y - c p tlfsiversity have, led to strong demand for apartments in Aenton County,, t particularly in the cities of Denton and Lewisville . HOUSING An effective way to approxi°ate housing demand is to evaluate an I. area' s household grapth , or the number of additional occupied housing 4 s' units . Although this method does not segment demand by unit type no r it provides an accurate } Workable base fi g ure at for second homes , P 1 for gauging demand for new' year round residences . Between i970 and Ij t Ir I 1 ! f f , Y Y i I' the number of households in Denton County increased by almost 28, 600 , re resentin an annual average p g g Bain of about 2 ,860 , Projections for the i 1980 to 1990 period show an increase of %5 , 400 households , or 3 ,540 units t per year , z According to the North Central Texas Council of Governments , Denton i County contains a housl.,lg mix of 74 percent owner-occupied , single-family ; units ; 19 percent rentAl apartments; and seven percent mobile homes (Table 9 ) , Amisuming that this same ratio will continue throughout the 1980s , the demand for both ownership and rental housing units can be calculated for the 1980-1990 period : 26, 200 , projected single- family f ownership 'units , or 2 ,620 per year ; 6, 700 projected reatal units , or 670 per year-, and 2 , 500 mobile homes , or 250 per year. New rental housing demAnd could actually be higher , however , because of the current t 'J affordability crisis in ownershkp housing and the expected growth in new s employment opportunity. During 1980 the number of building permits ii i y' issued dropped significantly, as high interest rates caused residential w construction to lag substantially behind demand , From 1970 to 1980, ; an annual average of 2 , 081 building permits were l issued in Denton Coow., y ( in cities over 2 ,000 only), 1 , 44$ for single- family detached homes , 538 for multifamily units, and 95 for mobile homes y (It,ble 10) : However , the number of permits issued during the past four j years has been somewhat higher , particularly during 1979 before interest I ( rates becar+2 exorbitant , { Table 11 shows housing conditions for the city of Denton . These F data , taken` from the city' s Housing Assistance Plan (PAP) , show that 5 . 6 } percent of the city' s otcupied dwelling units were in substandard condition as of 1975 , ' Of the total , 4 , 9 percent of the city' s rental 1 i stock and 6 . 7 percent of the city' s owner-occupied housifig were in substandard condition . . r On August 5 , 1981 , PLANTFC surveyed 33 Denton County rental apartment complexes , with a total of almost 4 , 000 units , -to determine s current rental levels and vacancy rates . All complexes were located in either Lewisville or Denton. Table 12 shows Denton Couaty ' s prevailing F r'�ntal rates for all unit sizes , from efficiency to four- bedroom . r Efficiency apartment rates in Denton County range from $ 194 to , $ 209 per month ; one-bedroom units from $166 to $355; two-bedroom units from $189 to $395 ; three-bedroom units from $229 to $480 ; and the few four-bedroom ; units available around $345 per month. i� According to PLAN'1`EC' s survey, the current overall vacancy rate for rental spar"ments in Denton County is 4 . 6 percent ( sea footnote to map / 3 key) . Because this survey 'rya conducted during the first wee of August , j when most of the area' s college students were not in school , this vacancy the end of Se tcrnber .. in the .. substantially b h p ten su Y tighten Y �.: rate will probably 8 i f x city of Denton the vacaney, rate is currently 3 , 4 percent , while Lewis- i ton' s is 6 .4 , as a result )f a number of new x'r.ntal units coaling on the t r market . F ` If a developer were to build low- to moderate-income units in Denton i County, these units would be rapidly absorbed into the market for several ' reasonst ( 1 ) all subsidized apartment complexes surveyed by PLANTEC had , �psiting lists ; ( 2 ) the Denton Housing Authority is encouragin ; the 3 production of subsidized units since there are few existing low-income housing complexes , and demand is high ; and (3) many families currently in substandard housing could relocate to new subsidized units . This E '' filtering process" would continue until many substandard units even- tually became permanently vacant and could bib razed . i ` yigure 2 and its accompanying map key show the 33 apartment r complexes surveyed by TLARTEC, and all , as previously stated , were 'JJJ located in either Lewisville (numbers 1 -9 ) or Denton ( numbers 10-33 ) . The number of units and their estimated years of construction are also f included . Currently, Loewisville' s Foxhaven apartment complex , with 175 s units , is the only complex under construction in the county . Although 1 f another complex is slated for construction in Lewisville , details the not yet availabt.e. �. . with the r,a1141i/Ft . Worth SMA' s continuing northward growth. , both ( ownership and rental housing demand in Denton County should remain strong 4 during the 19808 , However , monthly rental payments necessa.y to justify i i the cost of cnngtrurting new r 6ntal Apartments at current interest rates F would be much highrjr ' than thi1 market can afford. PLAN'i'1rC believes that a k tax-exempt bond issue directed at financing 'multifamily dousing Would 1 help satisfy Denton ountq' a growing demand 6r rental housing . t,. r � . l I !, ( 10 A Figure 1 DENTON COUNTY / DALLAS • FT, WORTH SMSA LOCATION MAP ' r s l.. i �141W NM•V � MriVlryff�'I� f1/ i • 1 `r wJIJ♦ VIMI VV1114. kM la r� • 1 ��� M141 LMW 1 WIMP 1 F l+1ji DENTON COUNTY I 1W1� •MIK, M,.II ..KN VYI Y„ �, �r W11 ti rll 111�D RN II 411,1 VM MVI �V\• .t P E n♦\ .nll 1111`, I ,� 1 Carr 14f\h 1Nbd.1 •1.Mi .y1 ,11111 41 • ' ' IK4.1 1r1 N,4 . Y��I♦ M.la 1MLL IJr+ '�'•"~ ♦� V I 'I•W. Il r• 11N wh Jn iW YYli1 •.•4l1 .IAK. rKa V7V 111. M a11y1 '• (IY E 1! � e trwl 11 ,.11 4h, .✓ 111'n♦ KyM1 1nA1 Off X111 VIM 1� !. Iwl] r F RT * DALLAS .M4n w1y n►yA MyMn w 9rIM R1 w•G � 11u1 1'Ka lMl►' Ills t IlY11A 1 1 ; �; lei} }}} 1•FY �1 �KirO I 'lNN~'i10� •r•• �, 1<I Kprp IwN1 Ip41•G lPl \1'11111>IV1•. ch4V.4 • •�t11i11 •K'1 Jn F wMll� .f •1 � iw� . FYM IfI. iM lirtlrll . '• 1 5+ MIII ✓1p R/i.w Ihl Mll• I wu wlti5 1 1MIIi IM �,. MIVn yPM�. 1I11 IWW `,, In Mti l4Krf1 KrIM1 Mrr u!N AFlll IuIY Wn. yYk Ik. IVM "� I MI>w 1V►1 1P110 IA1111111V Mllh K V•II 1V Vii • fA111h nt�lki Mrfu :. 1nJW llw1 JI 1'�'i4n I�IIh f y W wm I1rM,l rM US N . 4\ JW.1 Y•i1W 1111111 yltw WW1 MIn�FI � �� ,,w Ly1♦. - law If�11,� /,1 1� _ ;.r �Q1 IfAC.•11 „ ,H S N.,�4 I ,� r1 AN A TO Q M ' � JfIR/ rtIIJ W1H,R1 t WJI I •, fNV� J M11 R ,1y ill J 41y 1 v4ttt • � :�� " t.t{1 tlf J..�I"A�. i.'?, •I �41M1. N1K1 _ � c V V �1 {��t s �j•t , }.{ ': {Ilf•'\i :1111 'f / i 1 k ] J �a ! ( SOURCE; PLANTEC Cotporstion, 1g81. ; 1 ' a t i 77 I I I 1 .J r4 ' Tablo 1 . Comparative PopuloLlon Growth Treuda a S Chnnge 1970-1980 ^_ Change 198.0_ 1 90 Compound - Can ixnnl Area 1970 1980 1990 thimher Growth Rate Wmber Growth Rote Denton Count Population 750633 143, 126 226 ,800 67 ,493 6.59% 83 ,674 4.71% ' Ihuseholds 220822 519400 86 , 800 28 , 578 8.46 35 ,400 5. 30 � I Persons/ lbueehold 3.30 2.77 2 .60 (0.53) (0. 17 ) •- E i Dallas StISA* IIII Population 2, 377 ,623 2,974,878 3,670,000 597 ,255 2. 27% 695,122 2 . 12X Ibuaeholds, 752,381 1 ,069 ,000 1 ,368,000 3160619 3.57 2990000 2.50 Persons/ lbusehold 3. 12 2. 75 2,65 (0. 37•) (0. 10) Texas - Population 110198,655 14 ,228 ,383 17 ,000,000 3,029 ,728 2.42% 2,771 ,617 1 .80% Households >3,433 ,996 4,921 ,000 6 , 163 ,000 19487,004 3.66 10242 ,000 2.28 j Persons/ Ibusehold 3. 17 2.82 2. 70 (0. 35) - (0. 12) ' c Dallas — following 1 1 counties: Collin rbllas Denton Ellis , ' Ibod Johnson T`!ie hcillas St1SA consists of the fol aw g ! , , , , , , Kaufidan, Parker, Rockwall , Thrrant , and Wise , d Source: U. S. Bureau of the Census , 1980 Final Population and Ibusi,ng Unit Counts , Texas , Kirch 1981 . �<'� ,,• , North Central Texas Council of Goverments , Population l'rojectlons , 1981 . . I P1.AWM0 Corporation , 1981 . 1 i 1 1 a I , 1 r , i : s Table 2 . Population of Denton County Cities Annual Average Compound y Area 1970 1980 Change ,Growth Rate Denton County 75 , 633 143, 126 6, 250 6, 592 .Carrollton* N/A 13 , 737 N/A N/A The Colony x 0 loay 39 874 53300 1 343 294 FIwe> Mound 1 +685 4 X 550 287, 10;44 Hi. tjlYnd Village 516 2, 500 198 17 . 09 �y Lake Dallas 1 , 431 21700 127 6 , 55 i Levisville 91264 24, 850 10559 10 , 37 Pilot point 1 , 663 21150. 41 2 . 60 Sanger 11603 2 $ 50 75 3 . 90 r +,. Remainder of County 19, 597 26 , 189 2 ,033 7 , 38 * No,t Only a portion of Carrollton is located in Denton County. r L= Source : Notr,th Central Texas Council of Governments , i'opulation'Fsti- mates-Time Series, 1980. . �.; 11 , 3. Bureau of the 'Census , 1980 Final Population and Flouring Unit Counts; Texas , March 1981 . G: PLAMC Corporation, 1981 . f , f � � 1l t f i Table 3. Age Distribution, Denton County r a Age 1970 1980 Croup Numbar Percent Number Percent k 1 M 0-14 18 ,929 24. 9% 29 $ 626 20. 7% �. 15-24 21, 151 26. 0 32,490 22 , 7 25-34 91873 13. 1 290198 20. 4 r 35-44 7 , 303 9 . 7 169030 11 . E 45-64 12,407 16.4 27 ,051 18:9 (' 65+ 5 ,910 7 .9 81731 6 .1 Total 75 , 633 100.0% 143,126 100.0% Source ; %rth Central Texas ;council of Governments , 1980. PLANTEC Corporation, 1481, E I 7 _ M1 I i , r � r l 13 t � Table 4. Labor Force Trends , De0ton County* Annual Avenges Civilian Year Labor Farce Employment Unec log Unemployment ; Empl0 not p ,�raent Rate 1 1974 46, 118 440487 1 ,631 1975 483162 _45,5$8 2' 574 3.5% 1976 46 , 717 44522 ' S. 3 j J 1977 48 , 489 46632 2, 195 4, 7 1979 52,666 500908 1 ,758 3.8 j 55 ,603 53,972 1 , 631 3.3 1.980 , 55 603 2.9 ; ti 57 723 2 , 120 1981 tan 59 ,5$1 57 184 J 59 , 78o ' 2x397 Feb tar � . 57,676 2 ,104 3.S 60,295 58 ,085 2 2i0 Apr 60 545 ' 3.7 may** 61 , 064 58 ,66'4 11931 3.2 38,556 2 ,5p8 4. 1 i * Employment by place of residence . * Preliminary, I Sources Texas Employment CotZission, Labor Force Estlmates for Texas Countits , 1981 . t PLAN1C Corporation. 1981 . 1 i i f. t I . r t • i i E ' 14 r e 5 . Employment by Place of Work, Denton County* C; Change 1978-1980 i 3rd Quarter Compound h Category 1978 1980 Number Growth Rate Total Employment `. 30,864 37 , 716 61852 10. 54X Agricultural 135 190 55 18 . 63 3 Mining N/A 56 N/A N/A 4 j Manufacturing 5, 559 71685 21126 17 .58 � t F Construction 11377 1 ,864 487 16.35 Transportation, Communication, and Public Utilities 1, 217 1 ,285 68 2 .76 Trade 70317 91491 2, 174 13. 89 Finance , Insurance, and , Real Estate 1 ,004 1 ,430 416 19 . 34 Services and Other 3$633 61344 711 9. 35 Local Government 31634 4,083 449 6.00 f (( State Government 6,701 6, 942 241 1 . 78 EEI Civilian Federal Employees 287 346 59 9.80 w These data are for covered employment; and wages , which include all wage and salary employment covered by unemployment insurance laws , Sources Texas Employment Commission, Covered Employment and Wages by Industry and County, 1981 . f P1.9.NTEC Corporation , 1981 . ` f 1 1 15 F Table 6 . Major Manufacturers , Denton County ( 50 or more Employees) Number . Name Employed Acme Brick Company 210 i �. Andrew Corporation 222 Beaman Corporation 76 Denton Record Chronicle 156 Emconite 110 Harley` Corporation 65 Harpool seed, Inc , 67 Josten' s 285 Kolmar Laboratories 85 ^' 1Creataa&rk Induatriee , Inc . 400 ' Moore Business Forma, Inc . 500 Morrison Milling Company 144 Rubber an so Ohio Comp y . 117 Peterrilt Motors Company Russell Newman Mfg 250 r Texas . Instruments 2 , 100 Transport Systems , . Inc . 8o Trinity' industries , Inc . i ' 200 Turbo Refrigeration 138 i Victor Equipment Company 10000 Weaver Manufacturing 50 ' Wittke` iror. Works 55 ` Source: City of Denton Chamber of commerce , Manufacturer ' s Guide , March f 13 , 1981 . F PLANTEC Corporation , 1981 . i � r t 16 r Table 7 . Family Income Distribution, Dallas/Ft , Worth SMSA* r Decile 1969 1977 - 1979 1980 1961 E 10 $ 31468 $ 5 ,712 $ 60300 $ 74132 $ 80552 } 20 5, 613 - 90246 10, 197 11 ,544 13s842 { ' 30 7, 310 12 ,042 13 ,260 15 ,034 18 ,027 40 80762 14,433 15 , 918 18,021 21 , 608 r r- 50 (Median) 10 ,259 16 ,900 18 ,500 213100 25 ,300 3 60 12,009 19,782 210817 ,,4, 699 29, 615 , , 70 13 , 760 22 ,667 24 , 996 28300 33933 I 80 16 ,662 27 ,447 305270 34, 269 41 ,090. � . 90 22,353 36,822 40 , 609 450974 55, 125 E 95+ 26 ,638 430�$Bl 48$ 94 54 , 787 65 ,692 * Denton County is part of the 11-county Dallas/Ft , Worth SMSA, I Source; O. S . Department of Rousing and Urban Development , Fami17 Income i Distribution , 1980 , PIAti'T'BC Corporation , 1901 , 1 . fifi i I { 1 17 Table 8 . Per Capita Personal Income , Denton County, Texas , and the United States , 1974-1979 IN i � .!: . f Denton Coijnty Texas Current Percent Current Percent United States Year Dcllars of U . S, Dollars or" U. S. Current Dollars 1974 $4 , 781 8611% 55 , 041 92 . 9% $5 ,428 1 11375 51536 94 . 5 5 ,583 95 . 3 50861 1976 60272 98 .0 6,175 96 . 5 61401 ; ` 1977 7 ,085 100 , 7 6,911 98. 2 71038 1978 81003 102 , 1 70784 99. 3 71840 r #' { 1979 90088 103 . 8 80778. 100 . 2 81757 Compound Growth Rate r13 . 71z 11 . 73% 10 . 04% { Sources U.S . Ddj �'tment of Commerce, Bureau of Economic Analysis , unpublished data, 1481 . PLANTEC Corporation , 1981 . 1 G f . r 18 y Table 9 . Denton County Market Segmentation 1 1980-1590 Percentage Average Annual Housing Type 1970 1980 Housing Demand (` Single-Family 77% 74% 2 , 620 units Multifamily* 17 19_ 670 z r 'Mobile Howes d 7 250 Total. 100X 100% 3 , 540 units * Notet Multifamily units in Denton County are assumed to be almost all rental units. , 1 Source: • North Central Texas Council of Govermnents , Aegional , Housing E Notes, 1980 . � . PLANTEC Corporation, 1981 . i a , , f ' { 1 Y t I � 19 F 1 i t . Cities over 29000 4h1Y) , Table 104 Building Permits , Demon County 1970-1980 Single lfulti- i;.ybile jj Family - b'aaf.ly }times Total L, Year r 926 962 - 129 2,011 �. 1:97 0 ^ 1 433 643 128 21704 L971 ' 1.972 1 ,290 365 196 1 ,851 f 1973 11889 568 128 2,585 1,971 ' 453 127 2 ,551 1974 f 1975 1,025 133 50 10208 t. 51 1 ,949 1974 1 ,077 221' I 1977 1 ,597 606 0 20203 ; 1978 1 ,939 215 51 20205 � L: 1979 1 ,572 19081 93 2,746 1,207 670 98 11975 i J 1980 k Source-, lbrth Central Tex&$ Co�incil of Govertm►ents . PL,A=c Corporation, 1981 , f r 20 r : F I S r Table 11 . .Housing Conditions , City of Denton* I fa. y Type Total Owner Renter All Occupied Units 17 , 011 10,110 6 , 901 t ; Standard 16 ,057 9477 6,580 E � �. f+ Substandard 954 633 321 Suitable for Rehabilitation. 766 502 264 t * Taken from a 1975 survey. E Source: City of nenton, ' 8ausing Assistance Plan, October 1978-October 1981. E PLANTEC Corporation, 1981. . E � E I` I L., f I f r ` I R S J ,1. I Table 12 , Benton County Rental Rates* }� Monthly Rental Ranges a' Unit Size H� $194-209 4 sj Efficiency ( 166-355 One-Bedroom 183-395 tvo-Bedroom 229-480 i Thret-Bedroom Eye 345± Four-Bedroom k roxisnately 4,000 rental units in Denton County, * Based on a survey of app conducted on August 5, 1981 . Source ; pLAIiMC `Corporation , 1981. (I { E1 { ,F E { � I f ; 22 .yJi Figure 2 SELECTED DENTON COUNTY APARTMENT LOCATIONS I. a Ll' t l It It Aj � � . JIG � � •� , - � \ I J t `' / I !'," � y `. J � .i -r 1 I �.'. ' _ " .I r , -X14 .• __. � t� �, 1.. r. ,_ )y _ �. 3 .. � �I t� � .v' '� � .. i �" J � ,� ( ' — eJ ', r � tai t l•�4'r•;�!- ,M ���,� *� �� �J l r ��"' ti.J� , J, .1 t•{a �; '� . 7-�t 5 1 ' '� ,l;,Si t'. .y •l. J1..14 `' tee- . . � I ( f � � �,�. . f � '�J � � ^.,, R x•11 I 'rfJ Lt'J{ l f 1� � �, �! , 5 r � --�,. , / r. I I� i' � tr . ,.�� 1 �I �j(1 . � 5�! ..l ��• 'f'JII • t C, i j .� , p{ J 1 , � . 1 . • 1S � `'�.. .. .J J,� i7 r � �'�. ` �J _ I•�_l.. .y't1p.'' '\, L t p• ft _ � c. J i I�,�' 11 � ., ti A. r , ,x. ' ( _' J L.; .. pp -r ^� ,... •ti:a �` _ `y ',1 I I. .L � y J' � � r r '{1 � r� flr�_• � ��t ' r f � IV 1}�� y`. '�'� 4i. t �.r J `F ..�. �ti� � �, Lpi ' .. r� •� � + tf, , y�J .�L. Y -� � a e• off �� h . _� i- � .i � i I I I r � �1 `., y )� wi � 1 i � r..w°� liV ,I a ,��� !-��. ,� , f .� + t ' .F rsI i � �.�+.` .•� I f' � t • , r ' ,! fi �. tt, I t r � ��J'��'tf�' 4��' / �ti r . •';, Ir s' •tl' .E C�E I I� ��b� rl ri t I �• ! "to SOURCE: PLANTEb Corporation, 1881, j • , i r •ter 1 Map Key. selected Apartment Complexes*, Denton County Map Number Key Name of Units Year Built I Oakbrook Townhouses 27 1972 2 Arbor Valley Apts . 244 1980 3 lake park Garden Apts . 348 1980/1981 •.4 Lakeview Garden Apts . 152 1971 . 1 5 Old Orchard Apts . 176 1978 _ 6 Timbercreek 240 1980 ti 7 Vienna Village Apt$ . 136 N/A f 8 Basswood Manor 212. 1973 �• 9 Foxhave» 175 Under Construction 10 Alton House West Apts , N/A N/A f 11 Americans Apts , 42 1960 i 12 Bonanza, Apt$ . 62 1962 13 Bonnie Green Apts, 40 1978 14 Cam a Square Apts . 226 1969 s I ton North Apts . 201 1975/1977 15 Den , 16 Gatebo Apts ,; 144 1978 M 17 Holly{';ill Apt$ . 100 - 1973 18 Londonderry oaks Apts . , 161 1971 19 Londonderry Village Apts. 121 1971 r 20 Oakl4wo Gardens 50. 1979 A ta 1 P 21 Timbers Apt$. 184 N/A 1 22 Salem Ridge Apts , 96 1974 23 Stonehill Apti , 88 1965/1970 24 Village Bast' Apts . 132 1970 { 25 Willowwood Village 32 1470 26 Coronado North Apts . 144 1980 27 Greenvay patio Apts . 74 1972 28 La Prairie Apts . 112 1979 29 Loma Del Rey Apts. 160 1971 30 Oak Place 1X 132 N/A 31 Singing Oaks Apts . 126 1971 ? 32 Heritage Oaks 140 1979 33 : Ph,oenik Apt$ . 177 N/A Based on PLAMC ' s survey of almost 4,000 rental units ; the rIahtal apartment vacancy rate in 'Denton' County, as of August 5 , =1981 , was {{ 4 . 6 percent Source ; PLANTF.0 Corporation, 1981 . t � 1.� i 23 _! t I � i;~ 1 b,. l° ;a l 111 tf � f tk II ' E �`l.F�•L�'. � �w H 4 i '"��''.F��'� t �1 L Y r t4i-3 ' ��ir�'�r�,�'���� � � � � 1 A� '+ i , ' ` l i..e• art � " a � F 'Y'r ,�.1 {i(k r a' . �. �'"y a.aY� / 1 ' i f !! i 'Y.>7 itt^ r r•I r 3 �a ii�„++t T yt . 11 It 4. . \ 4 � � l 11 6 y ♦ ., ! IAIl � �Y'� 1 �� t..z.i:�S..hW ri✓ ! C�3N0 CONSULT At f i M1C .1 r ------------ --- ECONOr✓!C/ItiAN1�E1r. NY C(JN5JIT:.t FT, L AU ue.,,' r. 'VA �! August Mr . lbm Becker , Vice President Kidder--peabody, ; Tnc . 10 Fanover` Square ' tie, York, N. Y. 10005 a�! Low-Interest Mortgage progran in for Rate Re : Feasibility Analysis ! � Lenton County, Tetras f Dear Mr . Becker : 'I ! I PLANrEc has conducted a , full ,analysis of the housing and mortgage market of Denton County, Texas , to gauge the feasibility. of providing ; low-interest rate mortgages through a 1981 tax-exempt bond issue in `. accordance with requirements of the Mortgage Subsidy Bond Tax Act of 1980. Thin analysis has entailed a sampling of deed o'f trust recordings , a sales price data, and a atiraeY of rjsunty homebuyers , as w�sll as inter- views rth' planning officials lenders , and real estate developers in Denton County, Texas. The I ilowing report details'' pLANTEC' s methodology and ,,findi.ngs , su=arized in this letter . y� RE UQ IR£ilEtlTS aP THE ACT A major portion of pLANTEC ' s analysis was specifically directed toward satisfying data requirements of the Mortgtage Subsidy Bond Tax !Act of 1980 . The first 'task , the determination of ~average annual Denton County mortgage volume between 1978 and 1980 , was based on a systematic sample of deed recordings for this period which yielded a three-year average annual mortgage volume of $317 . 5 million. To fulfill the legislative requirements related to average area g e , purchase purchase, price , PLANTEC evaluated new and exist n average , prices for the "statistical area" as defined "in the Act , or for all 11 counties in the Dallas-Pt . Worth_ S48AO based on infor>watiari suivplied by the ;%k rth Central 'Texas Council of Governments ( NCTCOG) and the texas Society of Real Estate Appraisers Sales pt' icas from April 1980 to March 1981 for Denton and Dallas 'Co untie n--which account for a sizeable portion of real estate activity in the SMSA---were directly j sampled. Sales prices for the other nine tout Cies were obtained frae► the } i ,7C sample for the 12 months ending in, May of 1980 , and adjusted upward to tual percentage 1981 levels , according to ac increases in sales levels observed in. the Dallas/Denton County sample- 0 6 0 66 8wle.mrd Center Or ae, Suitel 81-656-000 c,^ P,0. Box 64EO � . -i�, :,t -_.-nNist•rrv1'a. .-s.cn sYa -a ..G��:, er-_, ,_ . � v:ivr- e s.r act 1.x b'Ck3V13� 1 , 2Ir . Tow Sek� rar Augk-st 3 , 1981 7 P r^ 2 i Each of the 11 average sales prices for the SMSA was weighted according to the number of transactions estimated by county through the r use of PL_.Qi16C ' s multiple regression model, which helps rank counties by t mortgage activity. The model has been developed from a 50-county data M � base , in which various socioeconomic variables are related to known I . ., J vortgageitoluume ,Althowyhra the lmodecannot accurately predict mortgage , for ranking counties in terms of activity. The } 1 result was an average existing sales 'price of. $59, 600 for .existing A housing , and $71 , 000 for new housing . If the 90-percent ratio were s applied to these prices , then the ceiling on existing housing in the f ... program would be $53 ,640 , while that for new housing would be $630900. PLANTEC examined each census tract in Denton County according to the most recent 1970 dicennial census for income by small area to ' determine .- .. the 'existence of any qualified target areas under the Act requirements . No target areas , i .e. census tracts in which 70 percent of the families f earn up to 80 percent of the statewide median family income , were found 1 .M . , to exist . Upon the request of the underwriter , P1.ANITEC attempted to quantify ..r Denton County' s typical market share of first-time homebuyers , i .e . those potential homebu ers who have, y purchased a hone within the preceding three years. Using a statistically significant sample size , PLANTEC ! conducted ' a telephone survey of 1980 homebuyers in the county-, which yielded the following results over 40 y Y 8 percent of the surveyed home- buyers indicated that they had purchased their first homes in 1980 or had purchased the first homes they had owned since 1970. '.: .. SOCIOECONOMIC OVERVIEW .,. . Denton County is an upper middle- income suburb north of Dallas , characterized by a ,large population of professionals and :white- collar � workers. Between 1970 and 1980 , the county' s population almost doubled , growing from '75 ,633 to 143 , 126 persons . By 1990 the county dill contain 2260800, persons . Souseholds have grown even faster , increasing from fi 22 ,822 to approximately 51 ,400. By 1990 Denton should contain 86 , 800 . 4A households. Because projected household growth closely resembles demand ' for new housing, Denton County housing demand should average over, 3 , 500 units per year throughout the :19809 . The number of employed persons living in Denton County grew by an .� average of 1 ,850 persons a year during the 1970s , with total employment i in 1980 totaling 55 ,603 . While Denton County is generally; perceived to � ., be a bedroom community for persons, employed in Dallas , during the past ..r , few years it has begun, to attract' many jobs of its o*rn. Over 2 , 100 manufacturing ,jobs alone have been generated in Denton County since 1978 . Some of the larger firms operating in Denton County ate Texas ' Instru- ments , Victor Equipment ment Com an Y ► Roore Business Fortis , and Krestmark •I 1.Sr Tot.. °� :'' AuguAt 3 , i9E1 p3ap 3 Industries . Currently , both Xerox and 3M are planning new facil i ties in r , ` j Denton 'County. s Worth-S;tSA ' Incomes in Denton County , as included in the Dallas/ F't i hi ^`� . The 1980 median family r HUD income distribution , are relatively over. 105 percent from 1969 . s ) income for. the Dallas SHSA was $ 0ak apfaster rate in Denton County per capita personal income` has grown than in either the state of Texas or the nation as a whole �entrhigher ' r capita personal income is almost four � � Denton County s Per the disparity is widening . than the national. figure , j Between 1910 and 1980 , there was an average of almost 2inr building s ar and these were for sing le- family Xousingated permits issued each ye ► 26 areas . Of the total , 69 per^ ent were for 8, percent for multiianly housing , and five percent for mobile homes. rate for housing stock in Denton County is low. The The vacancy percent , with five of the county had an overall vacancy ra to of 2 . 25 county' s municipalities exhibiting rates of two percent . ' Most builders surveyed by PLAN'TEC stated that new residential constrtiCtios', the county was virtually at a standstill due to prohi bitive finaiu:ing costs. following subd ts. ivision map and corresponding is taking .� show that most, new residential i souch�ascnportionuofythe county map key _ + place in the city of Denton and ; toward the Dallas County border . that of the Wring the 1980s , housing demand promises to surpass A ,new mortgage band issue would help moderate- income , previous decade. _ first-tine homebuyers afford the benefits of home ownership. J HOUSING AFFORDABILITY AltALYSIS x �w Chapter III of the following report discusses in detail the Denton ility Levels in the County :population' s housing affordab ; taut a d Of current lending criteria , the price of housing , income levels , . � interest rates. I Although the overall size of Denton County' s mortgage volume has increased over the past three years in response to spillover `residential e gtowth from Dallas-Ft . ftmoderate income re f amil.iesiin thetgountY has , home-purchasing power bath new and existing home prices dropped considerably. Fl th30 one year , in Deacon rose by at least 30 pet'cent ( according' to data from the � e2t.� of Real Estate Appraisers) while income` is projected to register increase of only 12 percent. IM s. _.. } y , ±,f � y ' i J Mr LM ire August 3, 1981 u ! Pa ;n !} f The July 1980 median income in the Da .II as/ Ft Worth SMSA was $21 , 100 , according to HUD, and should increase to about $ 23 , 000 by the f e forhousingnwas $67 , 400sinr published . 1980, and typical the EY nedian siles price loan- to-value ratio 8U E percent . Within Chapter III is a discussion of the sensitivity of r 1 home-purchasing power to fluctliations in interest rates . For example , a J ten- percent interest rate with a typical 80--percent mortgage would enable a Denton County family to purchase a horse priced at 2 , 8 times its income, f 4 When these affordability ratios are translated into 1981 Denton County I4•X4 ' market conditions and interest rates , ,'the median- priced $74 , $00 hum's x requires a minimum income of $44 ,524---which only 15 percent of the county I households earn. lbwever , through the 1981 bond program , which could i EN ` - potentially offer a 12. 5-percent interest rate on home mortgages , the 'r same home requires a minimu;n income of $23, 878 and is 'affordable by up to 54 percent of the 'county' s families . ' x The result of a popul'ation' s decreased housing affordability is ultimately a decrease in mortgage market size , if all other conditions r . remain constant. Were there no groutth '.n the county , and if interest ? ' rates remained at 16. 5 percent throughout 1981, Denton County conven- tional mortgage financing could drop by as much, as $ 145 millions--or 64 percent--aver 1980 levels by virtue of rising interest rates alone. r Although federal and s;:atewide legislation will ultimately determine I bond issue size in Denton County' s 1981 program , , PLAYMC believes that up to $70 million in low-interest rate mortgages could readily' be absorbed ti re in Denton County in 1981 , if a 12 . 5-percent interest rate were indeed ' delivered. lbwever , even a low-interest irate mortgage program of much smaller magnitude would help offset current affordability problems in the } county, and is critical in terms of stimulating new housing construction again, I � . If you have any questions or comments regarding PLAMEC' s findings , please call me at our Jacksonville headquarters. A. Y Sincerel �' PLANMC Corporation Marie Speed Project Manager C 1 a YJ w. TA3P7 CF CO NM: ,a8 I `. Chapter Title Paste I Requirements of the kit : Methodology and Conclusion I- Z YI Denton County Overview' IIY Fbusing Affordability and Mortgage Zi rket Size III- 1 IIk�' 1 4 f T I 't a • i t . I i F. t LIST CF "TAB17S r `f� ,r� Page j - Title - • �'• � I` 1 ^ Denton County 1ortgage Vol:urne a I- s , S January 1974-stay 190 2 Average Fbne Price ge Fbmrcase Price, Denton COURty Avers I- 7 3 and Dallas RASA 3 I., I-4 Denton county Target Areas , 1470 9 II- 1 coaprative population Growth Trends IT; 2` II- 4 7 II- 2 Population of Denton County Cities t Denton County t IY- 5 II- 3 Age ,Distribution , - 1 II_ 4 Libnr Force Trends , Denton County Annual II 6 Averages g ti II- 7 j II- 5 employment by Place of Work', Denton County II- 8 Major Manufacturers , Denton County Family Income Distribution , Llsllas/Ft . A II- 7 II-1Q Worth SMl§A - g Per capita personal Income , Denton County; II Ix-11 Texas. , and United States , 1974 1979 XI- 9 Building Permits , Denton County, 1970-1980 II-13 II-10 Denton Cl vacancy Rates for 1980 II- 14 S 1969 and Mstimated 1979 Decile Distribution III 3 of Family Income , Dallas/Ft . Worth SKSA iI,IW 2 Deciton County Mortgage Amount and " Home Price III 5 - I (, Distribution, 1980 3 Impact of Interest Rates on Fbusing Afford- ability at Selected Iran- to-Price Ratios , III- 6 Baton County, Texan III 4 Income Mquired to Afford aingle-yFamily �W housing Delivered in DetItOn COvnty at III- 7 Alternative interest ltat�s , 198Q ';`t LIST CF TABiFS ( Continued) j ' ;a. Nu;iSer Title pp a z III- 5 Income Required to Afford Single-Family 1busing Delivered in Denton county During 1981 at Alternative Interest Rates ITI- 9 I III- b Determination 'of, Potential' Decrease in Mortgage Demand in 1981 Bas ed Upon Greater lbme Prices and Mortgage Interest ` Rates , Denton County, III=10 Ill- 7 Ito rt.ga&e 4;arket , Demand , Single-Famt.ly )busing 'Purchases , Denton County , 1980 III-II ' Mortgage Demand Projections for 1981 Based 03 Al ternaCtve Interest Rates and i Increased Wme Prices , Denton County; III-12 �j i J 1111 I i { 1 J _} �N, sy C11% 117�:P I RE(;Vl-':EXEN'TS OF TH}' ACT t METHODOLOGY APrD C4NCLUB LUGS 1 4 The passc�.ge of the 'Mortgage Subsidy Bend Tax Act af' 1980 in November j. d of last year placed a complex series of new restrictions ;on the use of tax--exempt bonds to finance single-family ownership housing . The Act s data requirements are particularly stringent and have placed an unprece- = dented burden on the researcher to provide public' issuers , as well �As 1 underwriters , with hard information related to mortgage volume , average ti purchase price , and other difficultly quantified ,elements . In accordance with the ,requirements of this Act , PLAYTEC has r undertaken an analysis of the Denton County, Texas , housing ,and mortgage markets . Our study has been conducted with a "good faith" effort to E r satisfy the law' s demands , and PLANMC has tried to obtain primary data whenever possible . B>wever, we cannot warrant the absolute accuracy of data derived from secondary sources , nor can we guarantee thtl t our r'( statistical findings , are within a small percentage of error against actual marketplace conditions . Within a reasonable margin of error i and -'; under limited time and' budget constraints , we do , ' however , believe that our findings reFlect general conditions existing in the Dallas-Fort Worth AM I SMSA, as of May 1981 . The following discussion will outline PLANtEc ' s i methodology and conclusions in meeting the data requirements of the I Mortgage Subsidy Bond Tax Act of 1980. r_ f AVERAGE ANNUAL MORTGAGE VOLUME , 1978-1984 Methodology PLANTEC computed average annual mortgage volume for the past three years for Denton County, Texas , through a systematic five-per"ent sample i i clergy' s office and provided by of deed recordings frocs the: Denton County The .total dollar vol ua of the I�cnton Frinting are �lsl.Ling Sarv .4c.F: . 1}} 1 ,< � avarc d foi the theee-yelr period to i 1978 , 1979 , and 1950 rjortgages t volti : estimate . obtain an average annual mortgage ConclusiOnS In 1978 , ounty mortgage vol 1979 , and 1980 , Denton C ume totaled f and $ 37h . 7 million , respectively (.Table 329 .9 million , $248 .0 mill.ian, $ e volune for ; I-1 } . Therefore , Denton County' s average annual mortoag ; owner-occupied units between 1978 and 1980 was $ 317 . 5 single-family* ti I ion. 'rttis calculation generally excludes construction loans , lot mill at # and commercial transactions and , as a result; may be someah sales , n activity, i, conservative in terms of overall lendinv AVERAGE AREA PURMSE PRICE � e Mortgage Subsidy Bond. Tax Act requires that housing 'programs be g nontar et limited to housing that has certain price restrictions . he maximum purchase price of eligible new or areas , t ' existing housing cannot exceed 90 percent of the average Pu rchase price for new or exist- housing during the preceding 12 months for which data is available in i F ing ho B qualified . target a'�eas , uestion . ibwever , in q i t; 1 the statistical area under q as 110 { it J home price tan be as high ' ible new or existing ti the maximum eligible tome price within the preceding 12 1 ,$ percent of the average new or existing t months for which data is available . j j if a county is located within 7 The language of the Act states ' that , the " statistical area to be reviewed must include all 9 an SMSA, es will ' despite the fact that mortgages titutent counties An fn the SftBA+ the case of Denton cons one of these counties . In , f be originated in only r 1-2 j � F ... .c:. r,. ;�� .r> 4Jtih6is;.. bi.fybl:•:-•,1+ . ' xis 1 i 1 I 1 lily k.�...j M+� 1 ii.A►fY K.iJ t,.w�tI L'.- r :r.. .-I .i.....+� ..A Table I-1 , Duaton County Mortgage Volume Total Mortgage Volume VA Loan Volume r11A Loan Valume' Number &count Number amount � Number hnolint Year of Loaite ($Mlllions) of Loans ( $!'fillions) of hens ( $MiLIio'ns) 1978 5 , 314 $248. 0 747 $28, 5 557 $18.. 9 1979 6, 356 $329 . 9 829 ' $39. 1 734 $30. 9 1980; 6, 940 $374 . 7 719 $41 . 5 919 $47,'7 3—Year f. average 60203 $317, 5 765 $36 . 4 737 $32 . 5 E H Note . The' total mortgage volume for 1978 was estimated based on the correlation of actual mortgage w volume during 1979 and 1980 and the total number of VA loage during the same period , :'1he j ' aortgsge volume for. 1978 was estimated to have been 8 , 7 times as great as the vol,ime, of VA loans;" recorded during 1979 and 19809 Source : Denton County Deed of Trust Records , 1979 and 1980 , U.S.- Deparaaent of (lousing and 'Orban Development ` 'Office of Housing , FHA Home Mort f r , ' g , gags Insurance 1 Operations, 1978, 1979, and 1.980 , Vate,rans Mm inistratlon , Waco, Texas , VA Mortgage Elecords , 1978, 1979, 1980, 'PLANTEW Corporation , 1981, , S ' itc IK( FM i.. -F.-lV1 U,,FSVI �, d 'v'W.•.w:. .�..._ ,.....avr l to a ' County, this task entailed evaluating sales prices for the 11 counties E U comprising the Dallas-Fort 'north SMSA, t i METHHOD01,0CY The North Central Texas Council of Covernnents has provided a sample of transactions derived from data supplied by the Texas Society of Real 1 Estate Appraisers ( $REA) that includes 11 , 736 real estate sates from January .1979 through May 1980 for each county within the 11--county Dallas SAISA. ( This source represented the most recent readily available comparable data on an ut(SA level) . : Additlgnally, a ..sample was taken of Denton and Dallas Counties from April 19?''i ' through Larch V981 , a period s that represents the most recent full year of ;availe',? e data for ),,hose a counties . The SMSA mean sales price for the nine other counties 'N\ra,s t'A's adjusted upward to •reflect the same 12-month price increase thaa he Denton-Dallas County sample experienced . This procedure yielded an estimate , of '' new and . existing" sales prices , all 11 counties, in the SMSA for,, 12 months ending in March 1981 . The average sales price calculated in each of the 11 counties comprising the Dallas VSA was then weighted according to the es'ti'mated s total number of residential real estate transactions occurring in the area . For example , from Table 1-2 it can be seen that 44 . 5 percent of # the SMSA' s total residential transactions during 1980 occurred in Dallas County. f The estimated number o-f transactions was calculated by using 1 ' PIANTEC' s multiple regression 'model which predicts the number of, transac- tions based on various socioeconomic factors ( population, employment , income) . Although its predictive accuracy for counties with popoil,ations t "4i"2 l , p 1 L __ S M1 1 7ebit I-2 . �1:^c : . Er-�^. PricP �.� . January 1979-'flay 1980 t k Exist a New A.11 j s Weighting `— County Factor* ;Mean Mean Mean Collin 7.4% $61 , 702 $76,528 ;#71 , 341 Dallas 44.5 49 , 512 70,956 57 ,895 Denton 619 49 , 19,1 58 , 214 55 ,422 Ellis 2. 7 41 , 462 580471 450303 Hood 1 . 8 27,000 89 , 0001 58 ,000 Johnson 3.3 - 33 , 752 47 ,450 34 , 893 Kaufman 2 .0 31 , 583 38,600 33,922 Parker 2. 3 43,214 41 , 333 42 ,650 Rockwall 1 . 8 65 ,237 73 ,449 71 697 1 Tarrant 2566 36 , 702 67 ,555 46866 Wise 167 34 , 675 39 ,500 35, 640 R Total $45,497 $670012 $53, 811 i * The weighting factor is based on the estimated - caber of total residen- tial real estate transactions occurring in the Dallas RISA in 1980. Source : Society of Real Estate , 3 Appra�.sers 1980. f North . Central Texas Council of Governments , 1982, PIANTEC Corporation, 1981 . Y r r r 4 below 50 000 i T^r ^n n,.,+ , 7 c,f t 'Iv .-: ill...Y'c.i '' � .".!a t]lc i counties in order of magniturle of transactions . ZheSe t•Netgh".ing. factors were then applied to ea,:h county' s average sales pricea for both new and r existing hones. In this manner , the average home prices for the StISA ' were calculated ( Table I-3) . � Conclusions PLANTEC has concluded that the average purchase price in Denton i County within the last year of available data , April 1980 to ;larch 19810 , amounted to $69,800 for existing housing , $15 , 400 for new housing , and i $70,,300 for bor.h. For the Dallas SMiSA as a whole for the same period I a these prices amounted to $59 ,600 , $71 , 000, and $60 ,800 , respectively. If the 90 percent of. purchase price raquire�cent for nontarget areas is applied td' these sales price levels, then the , pric e ceiling for existing housing in the 'S;tSA is $53 ,640 , ,while that forL new' housing is $63 ,900 . i These prices should ' be adjusted to reflect any subsequent price increase t that occurs by the date at which mortgages are actually made available , TARGET AMAS � The Act defines a target area as ( 1 ) a census tract in which 70 f percent of the families have incomes less than or equal to 80 percent of i the statewide median income; and (2 ) an area of chronic economic distress i a as designated by either the state or the Department of tbusing and Urban Development ( MD) . PLANTEC 'Corporation analyzed each of Denton County' s 17 census tracts using 1970 census data , the most recent decennial census for which R such information is available , to ,determine whether any tracts> qualified under the first definition listed above . 3ecause the 1970 statewide y A r - � Y-6 A ,, ..c.i . . ..n e ^ .m. L.A.. Y ..♦tt. M' b' A a ,. . ' 1 t r .✓�� 4F •et(. , , i [�l, ^0.i ' i..rt.s ,i+F�M, �.�.:1.+ 4.::.� Fit/ �.,_...1. �....r.. .....L �Y� �tY �t�.J �.+.w�/ �....rL 1.,.0...E IF...ar� •r..n� let L, Trble 1-3, Average llomL. Purchase Price , Denton County and Dallas SMSA Mean Purchase Prise Jan . 1 , 1979-May 1980 April 1980-March 1901 Area lbciating New Total Existing New Tula! i. Den bn Count $49, 191 $58, 214 $55 , 022 $69,800 $75 , 400 $70, 360' � 4 y � Dallas County 490512 70 , 956 570995 65, 300 75 , 960 660.090 � SA Dallas 9M 45 497 67 , 012 53,811 59, 600 710032 600807 . . Note : The mean tales price of Denton and Dallas Counties uss calculated from a sample taken during the period, fraa April_ 1980 to March 19811 represent-ng the last full year of data. the mean sales l price of the Dallas ' SMSA is based on a sample taken January l; 1980 , through May 19$0 and updated to April 1980 through March 1981 by the same increases as recorded by Drtlias County J during this period . Source : Society 'of Real, Rstato Appraisers , 1980 and 1981 , North Central Texis Council of Governments , 1981 PLANTSC Corporation , 1981 . t w c.t3«irt#1:r 11iniktN&'cSv..,uY,wv s+w., .,.uw..r,i;ffivl'1...'�,sYiati"✓.:SSIP�4.art!"F r... , r .f f. x median f�.lily 'iucu , , .E:,r ,Tet .. .,,. c:,,= $804137 , to q�.i�.l i fy as a target area , a � 70 percent of ttie tcar. t' s families would have to earn $ 6 , 789 or less . � hl Table I-4 , which shows the median family incor,,e and the income of 70 percent of the families for each census tract in Denton County , de,l - onstrates that no tracts in Denton County .meet this criterion. In fact , a 'review of the table reveals that Denton County is a relatively affluent area , FIRST-UNE HOREBUYER RE UIRELkEy"P The Act states that all participants in the proposed pxograa must , not have held title to a home within the preceding three years if the unit purchased is in a nontarget area . Ebwever , if the unit is located in a qualified target area , this requirement is waived , Beeausa no . 6 target '• "eas were identified in Dentun County, this. waiver does not ti apply. Upon the request of the, underwriter , PLANTEC h,$ s undertaken a survey of 1980 homebuyers to help estimate the market share of " first tite" homebuye,rs iu Denton County. . r Methadolo The following standard proportional distribution equatian was used dto derive the number of interviews , nw200 , necessary to achieve a # statistically significant sample of 1980 real estate transactions . contained in the listing of 1980 warranty 'deeds ' for Denton County. n N ( PF 1 D+pq Where : n sample size i r N 8 000 estimated Denton County universe of mortgage � transactions for' 1980 based 9n PLANTEC' s previous' A, 19$0 analysis -h I-a , `t •., 1 4,r t .: r...l .: •R,, a«,tir . .+)�'iY,���.t;l�l•_�a�lf a 52 1.ra T?hI T-4 . Doilton COMty Targett Areaa , 1970 `! Median Family 70 Percent ' Census u Income Dec ile { Tr ac t r 201 $ 7, 653 $ 9 , 911 7o548 11 , 274 e 202 8, 614 11 , 778 . 203 204 10, 288 13 , 589 .� 205 12 , ?19 15, 905 206 8,076 101 %5 201 6, 194 9, 253 8, 947 11 , 327 208 , 209 ` 5 , 739 7 ► 803 210 7 , 787 9, 512 y . 6, 083, 8,490 211 s 1 7 ;1+8 91# 698 212 x 13 12, 376 19, 024 <� 214 9, 495 12, 205 `. � ii , 126 15 , 521 215 i 216 10, 326 13 , 298 r{ 11 , 013 1'3, 732 : .� 217 Pate : A targeted census tract is any census tract sera 70 percent or more of the families .residing there earn below 80, percent of the 1 statewide median family income (80 percent equals $6 , 789 . ) { Source : U. S. Bureau of the Census , Income Characteristics of the Population, ballas , 2'exas , 3M SA Census Tracts , 1970 . nAN`CEC wrporatio�n , 1981 . j �r I � a I- q ; P 0 pop u?.attnn, p—port ton ( iie • ; pro-r,rrI r.r• Fl.ects, K: first-time hom(t .buyers) qa 1 - p D , $2A yv „y ! $ .fly " error toleratice A systematic sample was chosen for the following reasons: F ` ( 1 ) Allows for uniform sample of transactions , and thus elim- inates any oversampling during mi,knths when certain a=.rket characteristics may have influenced the nun,h�r of transactions � r ` completed . i (2) Allows a second sample to be chosen if a larger sample is ' a needed . (3) Elements of the population ere randomly ordered for our. pur- poses . The listing used was broken out on a weekly '_basis and �I } t alphabetized by surname, assumed to have no relation to the type of homebuyer ( i.e . , first- time versus repeat purchaser) . ' Drawing the sample required two steps : ( 1 ) Approximately 700 transactions listed in the 1980 county war- a ranty deeds were selected using a systematic 1 - in- 11 skip r i interval . Seven hundred were drawn , as opposed to 200 , to Xa k ph allow for no response , (i.e'. , wrong phone numbers listed, no E answer , etc ,) . 'these names were recorded . All a), ( 2) Phone numbers and addresses were matched to these names using 4 � the most recent telephone directories available. Telephone inquiries were made until the minimum sample size of 200 was attained. Several attempts were made to contact each parson selected u in the primary sampl6 . Tf there were no response , a, back-up sample list `? �X I- 10 (I r 4in, w: s Ut UiV) ' Ve prnpnrtlocl of first- tine h+(jebuyers in the sample was extrapolatei aga { list the totjl, to arrive at a countywide estilnate. of the market share. ,; CONCLUS If'.,� I Acc.ord ,n to pLANVC s sam le " first— time"' p honebuyers accoiutted for # y 5 t'- t reater than 25 percent of ,Tesi4ential ' transactions made in Denton County i in 1980. Over 40 percent of the homebuyers surveyed indicated that they } had purchased their first home in 1980 (25 . 2 percent ) or had 'purchased a' e the first home they had owned since 1977 '( 16 . 1 percent ) . When this proportion is ex,tripolated against Denton County' s 1980 �ortgage market u, r of $374. 7 million, first- time homehuye: s accounted for appr,oxima'te1'y { A $154.8 million in demand in 1980. It is PLANT8CIs opinion that mortgages offered, through" ro s d bond f ug h the p po 4 issue would be recd!.,! y abaotbed by ,this segment of 'the population in 1981 . E r t. }3;114, ,G a C HAP TE R 11 DF, ,NTUt+ COUNTY OV;" c`l 1"W Denton County, one of 11 countier, in the Dallas/ Fort Wort"' S'"-k) is r upper middle-income suburb in north central Texas , about 30 1 largely an upP Since 1960 , the Dallaq/ i . �► minutes north of Dallas by car ( Figure 1 ) . o j really escalated both population P I Ft . Worth S2jSA' s northerly growth has g experienced in and industrialization in Denton, following the save trends e �P'' ' r ! Collin County Previously through the SI'fSA' s rapid urbanization. t. POPULATION ARID HOUSEHOLDS j from 75 ,633 to 143 From 1970 to 1980 Denton County grew , 126 persons , representing an annual .,average Population gain of 6 , 750 {Table It- 1) . that by 1990 the The North Central Texas Council of Gov ernmenEs projec ts t elation grew from county will contain 226,800 personsR 1970s WA poP million people ciillion' to 3.0 million and shoulc. . ontain almost ' 3 . 7 1 2 .4 � F by 19906 elation growth {m 'the 19708 was strong . . Even though Denton County POP This increase d new household formation increased at an even faster pace . ) the decline in average in households is primarily due to house'nald size , not oaly in Denton County , but also nationally , a result of oeeurring divorces , and a generally lower birth rate . more one-person households , , j i n 1970 and 19$0 , Denton County added an anni.al average of almost !, tetwee eholda , while the Dallas &`iSa added almost 31 , 700 households 2 ,860 hoes „ . units , each year : eeaause the growth in households , or occupied t»using a,Pro)cimates new housing demand , household growth projected through 1990 .1 demand for the i yields Denton County s estimated average annual housing { 1980x--3 ,540 households per year , or a total of 35 ,400 . s a 1 4 Y Figure 1 r ;} DFNTU�! COUNTY l C)ALI.AS FT, WLrR'fhi SA45A l LOCATION MAP 4 f1fw I 1♦ •.\.f J .4 i�'1 I1 L DEN,rON COUNTY w.. I • `y 1�" �i. M 1 ' _— r r.l . I rr':: ..�. /+u'1•�►,'I�r l..• •�• `� "f\, �_ t} 1 w � � � r r 1 . M• j nlrf �1 , � M'1 'M IiNI L.M , M1 1 j� ri1`nH N rw •� 6. H r. rMk Y YW ~ r•1Nr 111 ,yln rru }�•�, rr1• fir. �w'•r� 1111 MrM I'"" .N •W 1 t,l(.� -� 1�A M,H1 ♦� �1`M.` w.wr• fNMM1 .MV •Y,U a1 11•,• � Iw4 _ ". % �. ♦IAI .rr P••• i�".rJr " M11 r 1 n.w•w r.fw•! MW :OM11 JM �.N11A w ] 4L � W1•r �1� ail tw rI•W YY•I i11M1` ,� •!A• t �• '. 14YI1 � � 1 r" , � .: NIY �A rRl , ,i t � M ♦-_ ♦1M I NI �M'1 yln : l .Il1b. M/rlilf. r111Yi �� f.V N1l �Il pr111r{I X11 �1 ...11 HM w 1 " M `•• '' 1�•`• MI, ._ r'JM M,r ..WA f^l\ IMY1 '.✓M r _ `•� � •� �� won � ,q1•'i f••0�11 • I 1 \j y • VAllf J �yy11: �� �1f rrrr it fie. • SOURCE: PLANTEC Corporation, 1961. k7 ./. '•,,.,,, .s`, . a,. .J ., .. ._ ', r.,7:,i1 1 .7.i 1 . 4+J'tic _'iF 51,41'�f� 1 i•.t' t \�a i• ' a. ' �..,,.,,� \.Y.,J �.u..,11 1.....k �..� l ., 1 ,.._,..� ...l.,:a „ _... ,• , H. .d,...i i,�,,.,�,. :: ...�,.1 .,....,, ...._� �._._.J -\_«..� "' ;, Table YI—l .' (;)isiparativa population Growth Trends : Change 1970-1980 e •1980-1990 Compound com lx>lord Area 1970 1980 1990 Number Growth hate Number Grow0l hate Uanton Cou�nt� ' rapu�lstCod 75 , 633 143 126 226, 800 67, 493 6.P') 83 , 674' 4. 71 % IJvuseholds 22, 822 510400 86, 800 28, 57$ 8, +6 35,400 5. 38 persona/Household 3, 30 2; 77 2. 60 UaIlas BNBA* " ! Popu atiun 2; 377, 623 2 , 974 , 678 3, 670, 000 597 , 255 2. 27X 695 , 122 2 , i2% Household 752, 381 1 , 069, 000 11358 , 030 316, 619 3 , 57 299,000 2 , 50 persons/lbusehold 3 . 12 2 . 75 2. 65 , (0, 37) - (0 . 10) F �+ Texa Il l98 b55 14 , 228, 3133 k ?,pnU, 600 3,629, 728 Copulation 2.42x 2 , 771 ,617 , klousehalds 3,433,996 4 , 921 , 000 6, 163,000 1 ,487 ,004 3. 66 10242 ,000 2. 28 persons/household 3. 17 2. 82 2 . 70 (0 , 35) (012) - j * The lk►lla* smsA can 'ists of the following 11 counties : Colltn l°, Ylalias , lknton , Ellis , Hood , Jahnsan , Kaufoan , parker , Rockwall , .Tarrant , and Wise , $ours es U. S. !hlreau of the eel $up , 1980 Final Population 'and housing Unit. Counts , Texas, March 1981 . North Central Texas Council of- Governments , population projections , 1981 . p1.ANT8V Corporation , 1981. } 1 t 1 �'..� ......,..+,w•rt+i n.MhV/Ki+iN...'I.4}4a,•, /.tea • _••Y•.vt+1t[titi:CAVtUC:.v-SIhMFAVW.�tl,- .�� ♦1 Jrvu Ylq.i + ni]l•51W0.b/IY.ry 1 r 1 F , 1 r. it t' t .e �• Of Denton County' s aitiet the tgost populous are Denton , growing from 390874 to 53 , 304 parsons between 1970 and 1980, and Lewtsvill'e , increasing from 9 ,264 to 24 , 850 during the same period ( Table I1=2 ) , t highland Village , Flower Mound , and Lewisville are the county' s fastest glowing municipalities . } The age distribution of Denton County' s population is shown in Table h E 6 II=3 . Between 1970 and 1980 the working- age segment , aged 25 to 64 years , grew more quickly than any other segment of the population , with a _ the bulk of the cotiinty' s growth coming from this group . A very small percentage of the population--oc 6. 1 percent--is over age 65 , dropping f from the 7 .9 percent of the 1970s anal reaffirming Denton County' s stratus t as a younger working-age community. � L.�y nay�,�y�3 j EM?LOYANT YY Table ,I1-r4 shows the growth in the number of employed persons living E in, Denton County. Between 1974 and 1980s the eounty .added an average 'o`f ., ' ' 1 ,850 employed persons each year , and, the unemployment rate averaged only. ' 3. 9 percent. Employment has continued to grow, reaching 58 ,556 persona as of Idly 1981 , rm th an average 1981 unemployment rate of 3, 7 percent . j Table 11-5 divides Denton County employment into job categories . Between thei third quarters of 1978 and 19$0, 6 ,852 new jobs were added in Denton , Couuty , with almost two- thirds in either manufacturing or 'i wholesale and retail trade. Other rapidly growing employment Categories ; are services , construction) and finance , insurance , and real estate. ;. A list of Denton County' s major manufacturing employers , with over 50 employees each, is shown in Table 11-6. The largest employers in the qj county are Texas Iitstruulents with 2 , 100 employees , Victor Equipment _ s 1 t ' 3 11.3 i'N• :ai i jv. Y. rr _ 1 Table IT-2r Po'piilation o ntrtCon County Cities 3 , .1 __ .,_...�. . pnnual. ! I, e a e Avrg po t. Cbm and ; 1980 Change Growth Rate Area 1970 ___---- - 143 , 126' b, 750 6. 59% Denton County 75 , 633 i N/A 10, 800 N.�A N/A, The Colony 53 ; 300 1 , 343 2 :94 Denton 39, 574 287 ! 10. 44 1 , 685 4, 550 17. 09 ir Flower , ;�,ound 516 2, 500 198 ( lighland Village 127 ' 1 -431 2, 700 6 .55 Lake Dallas 9, 264 24,850 1 , 558 10. 37 i Lewisville a, ¢b3 20 ISO 75 2 . 60 € pilot Point ' 2, 350 3. 90 i Sanger 1, b03 � Remainder of 39, Oounty' 19, 597 926 2 , 033 7."38 r _ of Governments , Popuhacioa Esti— Source : Ir1o'rth C4ntr.al .Texan Cp" a► r mate s=Tit4e Series , ,1980. lotion 'and (busing ua 1980 Final Po pu 0. 3.. 8u"reau, of the 'Cerra. > � i t Cfl usits , laexae , Mar ch 1981. F f�,ANTEC Corporation ; 19 61 . „ 1 i 4} }1 5 r a w�/ L ' , t 1 t• �r.SrY S ,, j ' r 11-4 Fy R l r �r M Table 11-3 , Age Distribution, Denton Cnunty i u i970T 1980 Age Number Percent, ,Group Number _ 24. 9% 29 , 626 20, 7% 0-14 1,81929 15-24 21 , 151 28. 0 32 ,"490 22 . 7` k ),l _ 29, L 98 x.0 .4 25--34 ' 91 87.3 13, 1 4 35-44 7 303 9. 7 a 6, 030 11 . 2 , I s 16 . 4 27, 051 18. 9 45-64 12,407 65+ 51970 7 .9 8j7 31 143 126 100.0% " r Total 75 , 633 100;OX 1 ci'1 of Governmei4C3 1980 Source : North Cetitrat Te;kaa Cotrt 1 , A PtANfEC . Corporation , 1981 . , iJ ' ' u 1 1 I lk TIT, r r i t u r o ., r Tah ! a, IT-4 . Labor Forct: Trends, Dmnton County* Annum! Averagas Civilian Unemployment ' s Year labor Corce FYeployMent Un era pl oym en it mate 3 I 1974 46, 118 44 , 487 1 ,,631 3. 5X �•' 19,75 48, 62 45;,588 2 , 574 5: 5< 76 19 46 ' , 717 �r 44, 522 2+ l'95 •4 . 7 i L, 1977 4$,.489 46, 632 1 ,857 3 . 8 1978 52, 666 50 , 908 1 , 758 3 , 3 1979 55, 603 53 , 972 1 , 631 2, 9 , 1,980 571,723 55, 603 2,120 3 .7 1981 Jail , ' 590581 57, 184 J " 24197 4. 0 ky Feb 59, 786 579676 2',.104 3. 5 � E Mar 60 , 295 58, 085 2, 210 '3 . 7 � Apr 60, 595 58, 664 . 1 , 931 3: 2' j $a Y** - `61 , 064 �8y 556 2 , 508 ' 4: 1 „ rI:•: * ;'Em la. ' ent b lace of residence . p 5'm Y p Y 1 - ** �Prel lwj 4oary S . ' yyyp Source : Texas Wployaent Commission , Labor Force Estimates for Texas Coutities , — 1981 ptUf C Co r, rat r. a' n, 1981 . I • \ \ I f 74t I } u 21 I1-6 � i ' t' rs f� Table 11-5 . Fnployn n by Yln of Work, Denton County Chang a 1978-1980 � 3rd Quarter Compound^ f Category 1978 1980 Number Grotith Rate 10. 54% i Total Employment 30, 864 379716 6, 852 } 135 190 55 18. 63 Ag r is ul tur al" Mining Sb 56 Maitufac tur ing 9, 559 7, 685 2 , 126 17. 58 { It 377 11864 487 16. 35 Construction' Tranaportation , ' Cammunicati0n, 'ad 'Public Utilities 10217 10285 68 2. 76 � >; Trade 70 317 9,491 2, 174, 13. 89 Finance , Insurance , and Real 'Eatate 04 1,430 426 19. 34 It 0 .. ery ces and 3; b33 4, 344 711 9. 35 Oth ' 8ier Y 3, 634 4,083 Local Gover=ent 449 b . 00 t State Government 6, 701 6, 942 241 1 . 28 Civilian Federal Employesa 2$7 346 59 9, 80 1 * s data is for eavered en,plolnnent and wages which includes all wage Thi and salary employment covered by unemployment insurance lams vexed Em lo'ment and Wages by Source: Texaa ',Employment C,f)Of laalOn , Co p 1 Industry and ; County , 1981 . i` BjAnEC 'Corporation ,; 1981 . 5 ,s i I ale TI- 7 -1 1 F n Er;pl OP"s Tab te TT 6 , Major ,tanuf�� turars , Demon Co�An y ( 50 or �oi'a _ EM pt0yu,ent Name -----~ g2g10 i p . . 3 Acme' Brick Caca}�anY ' 222 Andrew Corporation 76 ae;man Corpor tion 156 Denton Record Chronicle 110 ZmOonite . 65 Harley Corporation '' 67 Harpool Seed , Irc , 285 , Josten, a Kolma 400 j �rJ'stiiark Industries , Inc . 500 _ 3 .Moore' Business Forms , Inc . 1 t, 144 ,1 t4brr,ison Mill fag Company 80 Ohio Rubb er C6," Y 117 Peterbil t Ma tors ' CampanYu ! 250 .' �u�,aell 1�ewnati`:ltg,� 2;.140 , Instruments , ' 80 'Irs�ns�ot Syst'e�►$ , Trc 240 Trinity 7s�dustries , Inc . 138 ' Turbo Refrigeration ' 1,00.0 "Vic tor Lquipsent , Company 5Q' Weaver ;lanufACturing SS Wittke Iron Works Source ; Citq of Denton, ChamliEr of Coemmerce , ;lanuEacturzr ' s Guide , March �t . 13, 1981 . pLAmC Corporation.,, 1981 . r F 1 ;R f F � i 4y IIrB I ek R 3 r Company with 1 , 000, gore Business Forms with 500, Krestm:ark Industries ° with-400 , Jost an' s with 285 , _' and Russeli Ne ,.wan Manufacturing with 250 employees . Currently, at least three major firms are planning to locate in Denton County , with a total potential employment level of [ , 000 t � t people . In addition , several major industries , including Texas Instru- { ments , 3Pt, and Xerox , all of shorn .own land in the county ,_ are considering ; either exphnding 'their facilities or relocating to the area . t i AYCOME The Department of Housing and Urban Development (HUD ) has prepared Dallas/ Fort Worth WSA . family-income distributions , for the years 1969 , 4 1977 , 19790' and '1 080 (Table II-7 ) . The distributions are-broken" down by deciles , or 10-percent groupings . During 1980? for example , 30• percent 3 of the families residing in the 11-county area earned $ 15 ,;034 a, year or i come was 21 100 an increase o £ `14 ►. . The i�sa s �. less. a MSA median family n $ , > ' percent from 1979 and ' over 105 percent from 19694 Per capita personal income for Denton County is shown in Tabte ,I1-8 . , i ti Between 1974 and 1979 , Denton County ' personal income grew at a 13 , 7- t ft percent compound growth rate , a rate higher than either Texas' or the nation' s . Denton County' s high growth rate reflects the in-migration of many upper middle- income families to the area during the 1970s , As of i 1979, Denton County' s per capita personal income was higher than both the aationat and state averages`. Population , em,ploymfit , and , income data , all illustrate Denton . 3 Count'y' s high rite of growth . Located in the rapidly, growing" Dallas/ Port ' Worth'. SMSA, Denton County has greatly benefitted from Dallas ' . ,a northward growth during the past decade . Because the county' s future 11-9 i u 1s f Yf` M 1 YA Table I1-7 . Family Inc'C'm Distribution , Detllas/Ft . Wort?► SfSA* ,i 1980 Dec i1 e 1969 1977 1979 ;� �---r-------- - — ��. �l 10 $ 3 $ 7 468 $ 5 , 712 $ 6 ,300 , 132 9 ,246 10, 197 11 , 544, . 20 50613 c 30 7y 310 12, 042 13,280 15 034 40 8 762 14, 433 15, 918 18, 02! �, 16 ,900 18 ,500 _21 ,100 30 259 c, S0 (Median) F, 24 699 12,009 19, 782 210817 r C 60 -> 13 760 22j667 24, 998 28, 300 '3 70 � { 80 16, 662 27,447 301'210 340269 { 90 22 , 353 , 36, 822 40; 609 45, 974 W�4 95 2b, 638 43; 881 48, 394 54, 787 * Dentbd, County is pert of the 11-county Da11as/Ft . Worth SM$A. i 5 I . Source ; U. S. De par Cm61it of losing and Urban DevelopmenC , Family Income Distribution , 1980. , 1 PLANTEC Corporation , 19 :1 : j f `F r j 4 ' I 1 ' fij 3 11-10 I ' :5 �ble 1 . 4. Per Capita Perso '� nal Income Denton Courity , Texas , and United 3 States ,_ 1974-1979 jr � 1 t a , Denton Count Texas Current Pe scent Current Percent United States Year Dollars of U. S. Dollars of U8, Cur.rent Da11Rrs 1974 41 781 884 1 51 041 92 . 4 53428 "j 1975 5'� 536 94 , 5 5s 583 95 . 3 5; 861 J F 1976 , 61 272 98. 0 60 175 96 , 5 6 401 t 1977 7 085 100, 7 6 911 98 . 2 7, 038 ` t 's 1978 80003 102 . 1 70 784 99. 3 71840 r JJ 1979 9, 088 103 ,'8 81 778 100. 2 8, 75 7 ` x Can Po and ' wt h , Clete 13. 71 % I1 . 73X 10. 04X 1 r a, Source . U. S. Llepar tin ent of Cormaerce, Bureau of Economic Analysis , un pub 1 i shed ,data , ` 1981 . M. ?LANTEC Corporation , 1981 . . 1 1 � 1 ;i �Iw 11 11 v growth should surpass thti past deca,4e1s , housing dr?m and should be even greater during the . 19.80s , With currcfit high interest rates preventing i i( } many persons from buying tames , 8 new low- interest rate morCgiBQ 'bond f issue would enable. many of these families to a£ Eocd single- family , owner-occupied housing . j HOUSING MAR,ttBT G1iowTH: 1970-1980 } , new household growth can be di,rect� y cor- As previously stated i related with housing demand , New ho ,�jehold formations in Denton County s ann�sa'1'1;.� duri�lg the ,19709 , and 3 , 540 are expected annually averaged 20860 , �! d ur ing the ' 1580s a permits issued in Denton County averaged The ''number of building 2 ,081 per year between 1970 and 1980 (Table It-9) . Of the total , 1 , 447 , or. 69 percent , were fo,, , single- family housing ; 538 , or 26 percent , for multifamily; and 96 , or (1ve percent , , for mobile homes . Because Table 5 ` ! 11-9 shows building permits issued only within cities with over 2 , 000 { people , the difference between the average annual .number of permits M 4 issued--2 , 081--and the county' a average annual number of. new household --con be '-estplained . Texas does not require build }ng 1 formations -2 , 860 ' E `rmits in unincorporated areas . I 'table 10 lists 51,',980 vacancy rates for Denton Coeinty and its eight an overall vacancy rate of 2. 25 percent municipalities . The county had with five of the county' a municipalities exhibiting rates of two percent . Wltiile lake Dallas had Qnly a one- percent vacancy rate , Lewisville and E pilot Point had rates of three and four percent , respectively , With such low vacancy rates , the Denton County housing market remains tight 1 ` approximately 1 ; 000 vacant units as opposed to 51, 400 occupied ( see. 1980 E househoids in Table 11-1 ) . 11-12 I V , f�VrV3 �!-. i j '? Tab IP II-9, 97Building 9Spperts t Count 1970- Denton Y Ci t e S OV er 2 , 000 Oi1,I ) y ) r * ` �+�` %"may_ �'^•'�' ..�. .�..._._.. , Year. . single _—`-`' R ' ; ' i Mist ti- I Y Mo b i Z . . � Family �' 1970 Homes Total 197I 926 967 �-- 1972 # 433 643 129 017 t38 10290. 2, 204 1973, ', 365 1974 10889 568 196 1 , 851 1975 1 , 971 453 128f 2, 585 3 1 976 1 , 025 ! 33 2j 55I 1977 1 , 077 221 50 1 , 208 51 1 , 349 G 1978 1 , 597 606 F 0 1979 1, 939 3! S 2s203 ;. 1980 1 , 5 72 12081 51 2, 205 93 �'. ! , 207 670 2, 746 so urn 98 1 , 975 �atral Texpa �wtcil 1'I•ANP$C co 1481 . of Cover�enta . �t 1 fJ, 11 . 13 7 Table 1f-10, Denton ,County Vacancy FAtes for 1980 � 1980 Vacancy Rates , y Area For All Housing Denton County .2. 25% City of Benton 2 .'00 1 i The Colony 2. 00 Flower Mound 2 . 04 C Lake Dallas 1 1 . 00 , Levisvitle 3 , 00 Pilot Point 4. 00 Sanger 2, 00 Highland Village 2. 00 I Source : &North Central Texas Council of::Covernmtnt , Regional Housing News , August 19794 North Central. Texas. Council of Government , ;personal comm unict- a lion; 1980.' PLANTHG Corporation, 11981 .` �1 r 1 4! LY- 14 OF i t7 a.... 1l h .dM1q v.. ..WUrtV,rz4i tt.'..i)n {..}j. I s r 9.. . ..@N,-"i . ti+• iM1.Nitt9,•• t �{ Denton County growth has led to naw dwellingrunit construction , but ' construction insufficient to meet the strung demand Eigure 2 and the I Y accompanying map .key show the pattern of residential subd iv ision growth in 1480 -1981 . Outside of the developments concentrated' in the city t' limits of Denton , most newer subdivision growth is taking plane in the southeast portions of the county in the vicinity of Lake "Dallas , Lewisville, and Carrollton near the ballas County border . Most " 'sub i divisipns nunber under 100 lots with" prices generally in the $ 65 ; 000 $90 , 000 range . However , several 'builders `surveyed by PLANTEC 'ind icated " ' that most new residential construction was at a standstill in the county,' A ue to prohibitive financing costs. During ;the 1980x , demand for housing in Denton " county promises Ca „ surpass that of the previous decade . A sew mortgage bond i§sueL Wuld; :noej only assist moderate- income , first- time homebuyers , but would al so he,l; ti ° satisfy the strong' demand for ownership housing in Denton County. S r G E , �9 11- 15 ' j v "i „t.4v .= ,. ,xMry,� 4, nnif vai0br }>hs, .. • la •.K: ,YfSV lI? rA [ 6: {r,��rbYruA , , r,.,. . .. .f,. ,; .. . , . -.,,...>. }. >. .. . ,:.-s,,.,,;•E .. -> d;nc, :i?i�}4. t e { r� 1 �� . k I (.,.• ° r '.�I �.r lFl ' f//`(f iF.M,•. '�1 ., I{r�: �1�J11'.:.I•'J'11 „rte -.1r_'.•....`.,� t 1 ;�r/•�_;, -t • 'r F 1. —. Ax j rt`rx f Figure 2 t H^ +--- CdU�TYJiT �f 1 r ' n.l � V J •' L,ySi �. 1 ..�•'�w(r"'�, M �\ L 1 I 1 N.� ' ( i �. Jd ' Y• 1rtl,�s I.. nil.- " ,r , ' , • f Aiw •�I �, �' w ,�a a �' 4.M��•i �� `I rh.�•�frY1nY\�"41 �' ,a r F .1f,',"J�` r. , 11311• 1 1 t{��,,,, N,t, l Jl t 1r • 'r.�F'I f :, `-'.. 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County SubdivisicSns .t ' I. { Sill !. r s 1 , ur J' ' �O1 ' � "" -„,.e- •��+• !• fir. i,i oI It' � �. r..:a .,FnYLY � 1 I S. 1r• lrr y �� �, ' , I F .r 1 1 1,�• 1 1 r I~Fr { 1 1) � It !i ' r .� • 1 + i f .. •tl' 1 �'+t 1 t r r S;'� '•yt y "—�, IAII"F' ;p•� \Wy r !a 1I i f_ �...+ ' -�II � .�r� •jl ,} Mw„ Y '�'T,'' j�Y.`y' �-"'�� , I�y�' <', 1. � ' - •r• � {lr �,. � f 1• -S r I Lr r 'f,�� l ' r' �'� .r. � ��• i` � 1'JM'�r.. 'r Jt� �1 I�. '• 11 Ir1 1 � 1i 1t(�r .l 1 1 1; •r f`` '.i ` l fY `ti�tl.4 I• f rl Wr.�` .rn�f�. .+!., . l i., •�•, 1i' S ..- © + �1,:Sr r �tI +J! 'IJ , .5 ! 'rli ,J —.wry �•�r S. � .yr i,-;a Jai 1 ' a t•} '� ! Iit��! ..., ,1+ �J.� r • .�I11. 1TI1.• ',Y r•' �,,, �,"" �:%r. 4 ` `_ S.ril I ..r y. " 't+i+i�l r.tr ,+` , V ` . `W.' 1 a r� �r.{• 'I I 1!•� ,1 -'rl .rrn �. .rY f � �f' � �LL .i �w N �•�a/Y t L 1 1.. «r�l 1. � I St 1 1f ,\�.'e. I r Y�+ 1 ' 1 . , , r! 'P ., ., ,rl I 1 �f• 1 1? t I. E,. � � 1 S �i t•q I� rwy 1•f Jl�1 ? I tl r � 4�Fl. I � ' �! 11 �� 1, X•�,,Yr"1 11� r ' il,i•"��i,1 t } ,1., .r !� f ' M1 C tJ, + �q�(� ��I 7 r Jl ''. 1�. t � �I 1 rtillt �*I� • ' I r ���"� � J`•,; ( '�) � (l rai \ I,:1 � 1 4' .1, 1 T IVY,/ I r „'� \ � r. 1 � 1 � ,a� ! J � i 1 !.• _ �1 1 q 'IMA,'�i f�71 1.,,.J •+! .5 � � r ft i�: �r{'"• o � I". � ! f f I If•f'fT 1. � r t � Ilr "T' KI. r, � I}' � lA Irl 1. `fj{p[J-t1[J��/rlS�'.1 jtl yyJ�1/ 1 ,�r�` , r� !'rr i'_ t ! i .Lill �'I1 ��, lrl l ' Y,'�.F.e' r'•R.•V ' , It �•«' f �r 77 a..l .l itn��) r � .. ��I{,r �I , y'. 111} I• l+l I •. �, '� 1 1 fJ�l, 4 1 DALLAS 11 If{�yf { 1 it \: 1 ,�I 1. . • °�. 1 ' �1 ,r 1`,.'ft� i � ,I �tlS ” 1 f SJ ,', Inµr 4,nxl .�, J I1NTKI Co�r►eretkon, 1981. ,r. a f ' � : J r atir. � ` �.,ax „ ,. .... •.,.e..w'.n.,es,YA'ASu<3S�.tdtkY..aASltRe;trk+h..a� ,�ypgiLtlYpMik,.Nr.Y•F4'Ps%i•MFl.Va.G iNn+s..+i,..mx.�.r ..._..._ .awnu•a.+a,.annr.rctar-eL�..nc..:.vL. - , f f S' KzY, Active ,Singie- Famil . ? Denton Count y $idential ' Subdivisiun Devzlo iu y N , C , i a. ka p. Kay 4 Devel0paent Estimated 'Es Est (Dated �' 1 ge SoutFunont H� 18 N/A l Forrest ltiilge 3 L SO $200, 000+ L4 tire Addition 142 4 l l ou $56; 900-64, 900 ' wod y T S North 56 $75, 000-95, 000 i Lakes ;Park 6; Oak k0 $ 2,000-85 , 000 i Hill l 7 Wind song Village N/A N/A 53 8 hest $6b,.000+ Southrid 8 e 6,9 ' 9 Stratford $100, 000+' f Y N/A t lb Royal Acres N/A 11 50-100 Kingston trace IX sac" + F 12 Kingston xrace, IV NIA R/A k a N/A 13 p ` Sequoia Park /A f . , 206-300 53 .0 4 $. 00-55, OOQ f Pecan ,Crdek l5 Wimbledon 300 $63, 000=125 ,'000 1 000 1 $651000-8' 09000'+ 6 Manteneaa del-Sur 114 17 Hill Haven $100, QQ0.3Q0, 000 r 18 Y/.1.` :300 $55 , 000+ 100 $45, 000+ i Other Active Sub divisions ' Source: PLAnEc Corporation , field survey, July 1981: ' r I1- 16 l E 4? l .r r Matba'qL p,ayj I 1 r i .r t v' CHAPTER III HOUS INC AFFORDAB IGITY MNALYS IS AP,D MO.IRTUXE <MARKET SIZE A population' s horsing affordability is influenced by a number of r Interrelated factors , such as annual income , in Elation, rising real estate prices , and 'increasing financing costs , As have other areas of the nntion , Denton County experienced rienced hi S h interest rates during the past 12 to 18 months , which have severely affected the ability of moderate•- income f4milies to purchase housing and have inhibited new residential Construction throughout the crunty. j Despite these depressed housing market conditions , the Denton County mortgage market has registered an increase in dollar' volume since 2978 , 'r ( see Table I-1 ) ThIa51 -pevicent ' increase in lending volume probably represents the period ' s increased home prices aac! mortgages , as well as { Y the county' s rapid growth rate as a', suburb of the Dallas/ Ft . Worth metropol itan area The North Central Texas Counc it of Governments' discussion of regional housing trends stated that Denton was one of three cities in' the SRSA " showing a large amount of housing, activity: from 1970 to 1.979" ,lccording to : .Council spokesperson, the' Sy SA has grown as a f ,result of, the gradusI Lrbanliation ,of counties surrounding ' the Aallas/ Tarrant County hub , with the most rapid growth to the 'north in Denton and 611 in Counties . These four counties--Dail as , Tarrant , Collin , and AInEOn-=are economically the 'most directly interrelated within the SMSA. ko�kwalt to the east is a more recreationally-oriented , lakeside }I i4 community, and Kaufman to the southeast is at ightl y sore autonomous . Johnion, Ellis , and parker Counties in the SMSA ' s southern and western PO rtions are still more removed from the SMSA s urbanization , with the r X l rd � ak 7,4`r:i:G:r. rr.IC^wue+#341:g'Ivi., er � . �,�: m;u„ .. ., .i i ,• ): vJ COO, S t M two re^iaining counties , tbod and Wise , largely rural and experiencing, s every little development . r; 'Therefore, Nnton s mortgage volume growth probably results from the , natural axtension of spillover growth from I Dallas/ Ft . Worth. The county' s 1980 mortgage volume' to ..aled $ 374 . 7 million through approx ' `S imately 61944 transactions, approxieatety- 10 percent of which were VA r loans, and 13 percent FHA. Since 1978 , Denton County has experienced a s four-percent decrease in VA and a 65-percent increase An FHA loans . However, the'' dollar volute for both types of loans has increased steadily' i � during the three-year period. The highest average purchase prices for both new and existing homes r in *he SKSA as of May 1980 were in C411in and Rockwall Counties ( refer to Table I-2) . Today Denton County ranks fourth in the $MSA in terms of existing sales prices and sixth in new sales prices. ( Hood County, prices htve been excluded , since there is insufficient data upon which to base k calculations.) The average May 1980 'price for new houses in Denton was $;5892149 with $49 ,191 for existing hones. t In Table 1-3, Chapter •1, these prices are compared With increases •occutiring during `the past year in Denton County,' Dallas County, and the 1 entire SKSA. Within one year Denton County' s average existing and. new home prices rose by 33 percent--to $69 , 800--and 30 percent--to $ 75 ,400- E respectively, reflecting an increased demand for local housing , These rising home prices , coupled with escalating interest rates , are rapidly rodl.ng - the Denton Count), population' s home-purchasing power. As Table' 111-1 shows , Denton County' s median family income levels have not increased as quickly as the cost of housing--a projected income increase of. ' 12 percent for the past 'year compared to a 30-pe:•cent' cost } M-2 { r • a n��; .tna%.L w}*7...+•fi f,i ,NY`i2'dfs - . .i..i ,r: ..r , .t•.1+ '. .. .. r,, . �. . ,u 1, )! !� Table Ilt-1 , 196.9 and EstimAte 1 �j74 Oecile Distribution of F,?M �`ly Incuma , DAt1as/ Fk , Wn4eh SdSA �— Projected* 'i 19b'9 1979 1980 1981 y Income Range Rang e Rang e Range Decile s, $ 317+68 $ 61300 $ 73 132 S 7o964 10X 5 , 613 10, 197 11 , 544 12, 891 20 s, 7, 310 13, 280_ 15, 034 160788 3p ,, . 8;762 15,918 ' 18, 021 20, 124 40 i r 10 0259 18 ;300 21 ,100 23 ,700 Median 50 :__ 12 009 21 , 817 24, 699 27,'581 a 13,760' 24, 998 28, 300 31 , 602 70 16j662 30, 270 340269 - 389268 80 t 22, 353 40, 609 45,974 51 , 339 3 1Q/A 48, 394 546787 61 , 180 95 _ 1 * P .0-CLed 1981 income range has been estimated by PLANTEC' Corporation . based on the ' income change roearded in each group between 197.9 and : Source : NO Office of Economic Affairs , Economic Market and Analysis Division , July, 1979. PLANTEC , Corporation ; 1981 III�3 P, .; 1 Inc rease for the sa« e per {od l ( Bec AUSe the 1981 HUD fa^+ it Inc ome „s a y.. t 3 distribution is not yet available , PLANTEC has projected fanv- incoma ' distribution based on historical annual HUD adjustments .) p . The July 1980 median family income in the Dallas/ Ft ', Forth SlSA was • n,: e " $21 , 100 " and should be approximately $23, 700 by July 198I , Al though 60 r percent of Denton County familie's earn between $ 18, 000 and $ 20,000,. rapid home- price escalation is taxing their r purchasing powers , even without the i q present higher i4terest rates , f Table 111-2 p resents '`the decile distr`ibution _of Denton (�ounty' s 1980 mortgages and sales ,prices . The county' s median sales price was' $67,400, , accompan ed by an 80-percent mortgage 'of ar,proximately $57 , 000. only 20 ; percent of housing del ivered this yep; 'c w'st under $49, 900, with more than 70 percent posting over $3,71550,' Demonstrating the effect of rising interest rates on purchasing I I power , Table' Itt-3 contains a range of ascending interest rates and their 1 corresponding affordability ratios , , based on Denton' s` , locaU lending f guidelines . For example , 10-percent interest rate with a rypi : al $0-percent mortgage would enable a famiiy to afford 'a horde 'priced at' 2, $ Limes its income , However , at the higher 16. S-Ex rnent rate , common Cod ay at :Denton County' s lending institutions`, tl�e same family could afford a home priced at only 1 , 8 tines its income When these' affordability ratios are translated into actual sales prices of housing delivered in the county during 1980 , the gap in affordability between home prices at 12 , 5 -percent versus: 16 , 5- percent financing becomes apparent . 'As" To,ble 111-4. shows , at the currently 1 � prevailing I6. 5-percent interest rate., the median- priced $b7 , 400 tiorue in l E 1II-4 j ' �� ii .t a ., ., • .ra:;ttil,s '"' k i f . IS !I. 'l u3 fi Table III 2 . Denton county Wrk age Anoint and Hume Price pistr,lbutidn , 3 19$0 t ' Mo r tg ag e' T.O an/V 4 Vue t N.ora� Price . $; Ausount Ratio . Dec it e . bb G V 1b S 45, 500 $30,000 i .20 49, 900 35, 800 .72 30 57, 550. 42 ,000 . 73 40 64, 000 47, 500 • .74 St ,900 .77 50 Median 67 400 — 69, 950` 57, 950 60 . 83 70 759354 6t , 830 .82 ! } 83, 954 67 , VljT . 81 I 80 18; 8Ob . 78 90' 1010500 95 112, 500 S8 ,000 .87 F Source: PLALYrEC Corporation , 1981 . } 3 � ' .vl3j�� mS.FFreati!R# J.x:ertii.w.�er h dx.°'"' Sti• _. •i: i Table ICi-3 , Impact of Interest R.at(:s on Housing Afforda$ ility' at ` 44 Selected Loan- t,)-Pr. i,2e R,1t _os , Denton County,' Texas .i� S Home Price/Income Multiplier M Interest Rate _ 80 Percznt V 90-1'erceitt 95-Percent ( 30-Year Mortgage) Mort e $ g e Mortgage Mrrtgaf�e r ► 9 . 5% 2. 93 2 . 60 2 . 49 10.0 2 . 82 2 . 50 2 , 39 10. 5 2 . 72 2. 42 2. 31 x 11 . 0 2 ., . 63 2. 34 • jl { 2. 2 3 } 11 . 5 2 . 54 2 ,25 2 . 15 12 . 0 2 . 46 2. 18 2. 08 t, z JJ 12 , 5 2 . 38 2, 12 2. 02 13 . 0 2. 11 2. 05 1 . 95 t 13. 5 2. 24 1 , 99 1 . 89 1440 2. 17 I . 93 1 . 84 14: 5 2. 11 1. 87 78 i 3 15. 0 2. 05 1 . 82 1 . 73 ! 15 . 5 2. 00 1 . 77 1 . 69 I 16 .0 1 . 94 1 . 72 1 . 64 16. 5 1 . 89 1 . 68 1 . 60 1,� 17. U 1 . 84 1 . 64 1 . 56 31 17. 5 1 . 80 1. 59 1 , _j 52 * Assumes 30-yaar mortgage , PTTI included ; 90 percent and 95percent mortgages include PH1 ; criteria based on 28 percent of grove incase F as maximum PITT atigJble fnr loan , i Sourc6: PLANTEC Corpovition, ` 198L . I . ii 111-6 w 1 lbbie ITE 4. Wcl 1�equtrei � °ronl SJxg1e-Fanil.y Ibustxg 1144 ivercd in Wnton (busty at Alternative Interi4C Ratue, 19F0* I 1980 TmrA a 8r�gkd ements and ?6-,cent of Families Wo t7ualify Patcent of 18rcetrtiC or. It�rcgnt 0S; 198Q Ctequfred 1k11.hr /�t,' 46rth Ioquirq(l Adl.aa/kt. Wbrrh r", uUal na.*/h'. Wcth Sales �tican© DO. (bully Wane DISA County Ilefoe 4SSA Cbuicy sleeps 1'rlce @12.52 1's�tLliea @13.13`X vmiiiies 016.5% h'�►nil.iev 10 $ 45,500 $210462 49z $22,195 47% : $27,083 33% 20 49,900 23,538 43 24,341 41 290702 28 30 51,500 27,146 33 280073 31 340256 20 -40 64,E 300189 27 31,220 25 38,095 17 !r 67 4x10 31 X92 24 32,878 22 40,119 15 H 50 ( leap) _ s� .-- � ,.,_.. � H 60 69,950 32,995 22 34,122 20 4f,637 14 1 70 71 50350 35,542 19 36,756 18 44,851 11 80 83;9% 39,599 15 40,951 14 49,970 10 `r 90 lot 09 1 47,877 9 490512 8 600417 4 I + a 95 112,500 53,x , 6 54,878 5 66,964 3 I s' ' # eW►ent latllrg critert'k of 28 ,*rant 'of fneane far PITT, aid 90 percent loan-tc-value "do. soiree: PI.NNU Cbrporut6j 1961. f 1 ; -v....w.......wr«.ew+s.,niwla:.;a 1ti..,.:e.arwvwrr ,.y,.mA,.. •. �..yui,v/31A1:. afJYe'.} f,,;6Y.'.x raF.C,tG..,h+,r: tit ; - m, -x-r.=a s, ni.ix ,a k1«?n=a'r`. tiA SrA4r.$( +?w.ri3'i!Hr,ad .v e . 1 / Ir - - L1eD,tan Coon; y requires an income of $40 , 114, which only 15 percent of the county' s household9 earn. ibWe.+ver , to purchase the same hou$e under the , 12. 5-percent interest rate would require a P roposed iprogra ► s potential 125-pe 2 which 24 , percent of the county' s faeilies minimum income of $ 31 , 79 , s; k earn. By offering an interest rate of four fewer percentage points, the proposed program would enaLle a considerable number of additional g * families in the county to afford equivalent Musing , Table 111-5 and Figure 3 compare 1980 and 1981 sales prices , according to the income required to afford Denton County housing and using three alternative interest rates . In 1981 , at the cur. ently prevailing 16. 5-percent interest rate , ' the median-- priced $ 74 ,800 home requires a minimum 'income of $44 , 5,24 , which only 15 percent of the ' county' s families earn. ' However , ef, the 136C - percent level i the median-priced home requires a lower $36,488 inenme, which 23 percent of k t ► ,, the county ' a households could afford to pay . At the proposed yy + 12. 5-percent interest rate , however , income requirements are even lower , with one-fourth of Denton County households earning the $359283 minimum income required. Should the bond program be implemented , a greater portion of Denton County' s' families could afford the me dian- priced home at the proposed {; 13-percent interest race i 12, 5-percent rate than were able to in 1980 at a ( Table 111-6) . At the, 16.5- interest rate , there is a 30 16.S-pe r -percent , t � acmes-the-board drop for sack housing price category. a+ > Decreased housing affordability in Denton County will eventually j7 i i erode the overall mortgage market size ( fables It and I7I°8 , Figure ! Howei+er , if 1 4) . MOrtf age volume estimates were $374. 7 mi] lion in 19$0. 4j interest rates remain at Che current 16. 5-percent level , the 1981 volume Table 111-5. Licome Required- to Afford Sifigle-Family kbusing Delivered in Denton County Duving 1981 at � Alternattve fitterest !later. Sales Price Income Ru�wttred' to Afford & Percentage of Families Who Can Afford Units ' 1980 MOO ag81; I a Dectle Sample !981 Egaiv.** (�13^ O � f'd'� .* 012. 5% PC C. @13,07,, Pat . fl6. 5% Pct. , 10 $ 450500 $ 50 ,500 $22 , '95 `47 $230821 50% $24',6311 48% $309060 34% 20 149 ,900 550400 24134': '41 26,132 44 27 , 024 41 32,976 ' 28 30 57,550 63 ,900 28 ,0; 3 31 30, 141 34 31 , 170 31 380036 20 40 64;000 710050 31 ,220 25 33 ,514 27 34,659`` 25 42 , 292 ' 17 50' (Hed an) 67 ,400 74 ,800 32 ,878 22f 95 ,283 24 36 ,498 23 4'4 524 '15 H 60 69,950 771(50 34 , 122 20 36, 627 22 37 ,8;8 21 460220 14' 70 75,350 83,650 360756 18 39 ,457 19 400805 16 490792 11 80 83,95.0 93 , 200 40 ,951 14 431962 16 4%46 14 55 ,476 8 90 101 ,500 112 , 700 49,512 -8 53 , 160 9 54 , 976 , ` 8 67,083 ` 4 'j 95 1120500 124 ,900 54 ,878 5 580915 6 60 ,927 5 74.,345 . 3 I Notes . Aaauwea lending criteria of 28 percent of -income 'fdr PITT and 90-percent loan/value 'ratio . a 1'aroent indicates the percentage of families in Denton County with this level of income uc more, r ** TheL 1981 , hood 'price distributign was raised 11 percent , the some rate of increase in txtme pricer as occurred between 1979 and 1980. Sources PLAWHO Corly,re►tion , 1981 , i ...�... .,. ., no...... r .... r.. .,. _ ..<.-e>a r..yrbi ..l .e•, . . .f os" Tr.:.:; s5 re..'11lYl�dhi.,pY.'a,,42•nT s a5H aI+IFk.§qw:dt[,¢Y4 SiA.h 4}FS°r N.- F` •u... fV Yi#fi`FAg{W' nHN[ i i L INUUML REQUIRED-TO`AFFORD HOUSING IN DENTON COUNTY, TEXAS AT ALTERNATIVE INTEREST RATS DURING 1980 and ?£81 100 i 80 �. 1 D 1 -4 C 70 j A & G s µ a0 ..e e 50 40 I e 30 E 2s] 1 10 A0 - 20 30 40 60 00 TO 80 00 100 110 120 130 .140 160 160 Home Price ( $000 } KEY A - 1880 Income Required 0 13.696 1 8 1981 Income Rsquhed @ 12.696 C 1981 Income Required @ 13496 0,- 1981 Income Required @ 16.696 SOU RM PLANTEC Corporetlon,1981 r I . ff'oV?;hVfl!�`vji Ao'al `�mw+A.'hWFPd'.n ih'r,eli44J:r3 klaWxFxd.K.a..r:+ re - - Ifi Table XI (-6 , Determinatlon of Potential Decrease in Mortgage Domand_ in 1981 Based Upon Creater home 1'r ;eea . and Mort;-',;,ge Interest !lutes , Denton County Percentage of Denton County Families Change in Mortgage**' Equivalent Who Can .Afford 11ousing* Market Size 1980 1981 Rome �1986 •1981 1981va . 1980 Decile Hume Price `Price 13. 0% @12. 5% @13. 0% @16.'5% @12. 5% @13. 0%Y � @16. 5z i l0 $ '45, 500 $ 50, 500 47% 50% 48% 34Z 6% 2% (28X) E 20 490900 55, 400 41 44 41 28 7 0 (32 ) 30 57$ 50 630900 31 34 31, 20 10 0 ' (35) 40 64 , 000 7! , 050 25 27 25 17 8 0 (32 ) H 50 (Median) 67 ,400 741800 22 24 23 15 9 5 (82)_ 0 60 690950 770650 20 22 21 14 10 5 (30) ' 70 75 , 350 83 $ 650 18 19 18 11 0 (39 ) 80 830950 930200 14 16 14 8 14 0 (42 ) i 90 101 , 500 112 , 700 8 9 8 4' 13 0 (50) 95 112 , 500 124, 900 5 6 5 3 20 0 (40) * Assumes lending c►iteria of 26 percent of incomo for PI3'I, And 90: per'c' 'ent loan to value ratio . r **. Implicit in these calculations is the assumption that buyers will "buy down ," I .e ., wi! ! 'purchase less ` costly housing than would be purchase&if lower rates prevailed ..• pbAN1` �C dose not warrcnt the validity ofthls asstmption with rates an volatile as have been seen this year .. Source : PLANTEC Corporation , 1981 . f , I , i V L i Table 111-7 . Mortgage Market Demand , 'Single-Family Housing Purchases , Denton County , 1980 (12 Months) 1980 Average 1980 Mortgage Units Nort$age' Volume ($ Millions) Deeile Sales-Price :mount Purchased 8y'De le Aceuaulative 10 $ 45; 500 $ 300006 656 $ 14, 7 $ ' 19. 1 20 49,900 35 ,800 656 23, 5 43. 2 30 579550 429000 656 27. 5 70. 7 40 64 , 000 47, 500 656 31 , 2 101 . 9 f. 50 (Ned ia7) .67 ,400 51 ,900 656 34 .0 135 .9 60 690950 57,950 656 38. 0 173 . 9 Y w 70 73, 350 61 , 850 656 40, 5 714.4 60 63, 950 67 ,600 656 44 . 3 258. 7 90 ' 1010500 78 ,800 656 51 . 1 310, 4 I 90+ ' 1111500 980000 656 64 .3 374. 7 { Total 6o560 $374 . 7 Source ; . PLANTEG CN'rporation, 1981 . 1 • ,: .. L' . . . .{•rte J ,..•; ,.; \ . ••}i . 5 ?^F' ta': t ..1 4F ' .K IY�ir � , �1�.�ff1, }tilfi'.ft'cWt /;�xal,i[VZ;'r.rtN•K:l tlsPk'�i1+a$uNt�c.ta'laf�/.X�r�,a,+sfll°fi e• , 'y i•: F ,it 14�.:�,Rh�e} .,. tlaYdl rid#�5A'�bs;G�{�Ts'��'?.1�N'��v���r'�+:stsji IdK:;X'�e<`tsi�'`uli +s.411 .isu,{•��d�t''����Rz•"�,5�'e3 . �.a�.r�t�: . ,. .:; . L I 1 Table 1:11-8 . Mortgage Dt.mAnd Projections for 1981 Based On 'Alternative Interest Rates' and Iucrensed I loin e Prices, Denton County 0 Millions) +` i 1980 Mortgage Vol +me 1981 Mortgage Vol umd 1981 Mortgage Volume 1981 mo`;'c 'agg Volans _ @1 3 .0% 12 5X @16 '5X By Ac r, t„ou- ,Hy B Y Accwnu- Ely Accmtr ( � Decile Docile lative Docile lative Dec ile lative Dec ile lative 1 $ 19. 7 $ 19. 7 $ 20. 9 $ 20. 9 $ 21 . 2 $ 21 . 2 _ .$ 14. 2 $ 14. 2 i 20 23. 5 43. 2 2 i 5. 1 46. 0 23. 5 44 . 7 16. 0 30. 2 I 3U 27,, S 1 70. 7 30. 2 76. 2 27 . 5 72. 2 17. 9 48. 1 40 31`. 2 401 . 9 33. 7 10919 31 . 2 103. 4 21 . 2 69. 3 '. 50 j t (Median) 34 . 0 135 .9 37 .0 146 .9 35 ,7 139 .1 23 . 1 92 .4 60 38, 0 173, 9 41 . 8 188, 7 39. 9 179. 0 26. 6 119.4 , I 70 40. 5 214. 4 42 . 9 231 . 6 40, 5 219.5 24. 7 143 . 7 80 44, 3 258. 7 5U . 5 282 . 1 44. 3 263.8 25. 7 16 .'4 90 51 . 7 310. 4 58. 4 340. 5 51 . 7 315. 5 20. 9 190 r 3 90+ 443 374. 7 77 2 '417, 7 64 .3 37918 38 .6 2..x. 9 ' Total $374 :7 $41717 $379. 8 8011rctu ; , PLANT1s'C Corpo'rution , 1981 , i ' K...µ14 Rf.V.,+ee. .♦ .....:. u,.,A'Yii,. ...vxa)11,rr, F�.tN1c @+Jac,�r ,,,r7a,atiia�+f.tirtf;rYfv}z�'trrc�ll�i,;it��3aa�•�.° r, £n , . •. «-i-�.,.-,,�„ Figure 4 i COMPARISON Gr ACTUAL DENTON COUNTY 1980 MORTGAGE � DEMAND WITH 1981 DEMAND BASED ON ALTERNATIVE INTEREST. HATES , ' 400 - i A C 360 i y r\ 2" .0, 280 a a L4 240 D 200 i > 160 120 a 80 1 , 40 T-"""1 10 20 30 40 60 60 70 80 90 100 110 120 130 14U 160 160 Home Price 14000 y l I KuYi A- Actual 1080 Mortuago Volume 013.09b 8 • Projected 1901 Mortgage Volume @"12.5% C •'Pro*tod 1981 Mortgage Volume 0 13.096 ` 0 • Projected 1081 Mortgage Volume 016.696 SOURCE: PLANTEC Corporation, 1981, 4 I f t could drop to $228. 9 million , a figure which could rise to $417 , 7 million z; at a constant 12 , 5-percent interest rate , The trend of the last two i{ years will probably continue , however , with seller financing and k. assumable mortgages at below-market interest rates bolstering the county's total mortgage volLsne . Although these calculations werely illustrate the sensitivity of mortgage demand to fluctuating interest rates , FLANTF.0 believes _that even -a conservatively-sized bond issue would help mitigate Denton County' s I j housing affordability problems , if interest rates could be delivered at 12. 5 percent a With t1:e I9$ !. federal and statewide legislative mortgage cap I ' limitations , PLAN'TCC a ?es not intend to size the Denton County bond # issuF : However , disregarding any restrictions , KAMM concludes that in 1981 an issue size of up to $ 70 mill ion would be warranted in Denton I 1 -up" demand in the marketplace . County simply to. satisfy existing "pent 1 i p $ I r S III- 13 + r R' RAMi Drat MANAGEMENT CONSULTANTS MKSONVILLE - FT, LAUDERDALE' WASHINGTON CAIRO EC ONOM 1' August 7 , 1981 �Ir , -Tom Decker Vice President t Kidder, Peabody & Co. , Inc. i 10_ Hanover Square New fork, thaw Xork ! 0005 Dear Mr , Becke ,�_ on July 31 , 1981 , Kidder Peabody and ` Company , 'Inc . , retained PLANTRC Corporation to assess rental housing demand in Denton County. After analyzing socioeconomic trends , both subsidized and unsubsidized apartment rental housing demand , and market rent 1 tl.s in Denton County, p1ANrEC assembled the following report. y� This report is contingent upon the following basic assumptions : '{ 11 Denton County will not be subject to major economic changes which vary significantly from protected trends . 2. Information obtained and utilized froth both published and un- published secondary sources is sufficiently accurate to provide ;{ a' reasonable basis for planning. 1 3. All proposed projects ,dill be competently developed ; promoted , and managed in accordance with the most effective planning and } marketing conceptu, t 4. PLAMC does not warrant the absorption of these unite unless 4 they are rented at competitive rates and properly located . in addit:inn, the financial feasibility of arty rental uni ► s built ,! has not been aadressed here and consequently cannot be guaranteed change si nificant;ly$ conclusions derived r Should any of thess aspum tion s g from this Analysis will require review for possible raodifir.�.tion. we have once more ehJoyed serving your firm and commend your efforts to provide financing for affordabl e rental housing in Denton Colv)ty. t Sincerely, Y I H s, Scott' E, �tittleman ? Pro,1ect tbnnger SEh4/e b - ' 904/396.2011 r Boulevard Center Drive, Sultel 81-666-000 p.0. Box 52507 imkscxtvillo, plorido 32201 f ' l i J SU'VARY AND CONCLUSIONS ., The following information represents the major findings of this study • Denton County, Texas , experienced an average annual population gain of almost 60750 persons between 1970 and 1980 . Between s 1980 and 1990 , Denton County is expected to add an average of n 8 ,370 persona a year. • Employment growth has been strong in Denton County o, r the past decade; an_avera;;e of 1 ,850 obs were added to the count r � Y i3 annually during the 1970s . A • Several major industries plan to either .locate or expand their facilities in Denton County, including 3M, Xerox , and Texas 's Instruments. 0 Between 1980 and 1990 housing demand in Denton County should t average 3,540 units per year . Annual rental housing demand during this same period should average approximately 670 units , or 19 percent ; ownership housing 2 , 620 units', or, 74 percent ; a and mobile homes 250 units , or seven percent. Projected rental demand could actually surpass 670 units a year because of the i high interest rates that have forced many families out of the ownership housing market. i • Denton County contains two major universities , North Texas State and Texas Woman' s University. With a combined enrollment of over 240000, msch of the county' s rental stock is studant 1 J oriented and, as a result , is nearly at capacity for at least 1 ► nine months out of the year . E i l , r � r r r „r . . .rn "{l.„.r - .. ;,' .. , n if., r . . ..,r. d•. t,.)s4.t.u., . ., —*R. ,r.,v 1 T [ r Vf Ire PLAWEC' s survey of rental apartment complexes in Denton County " revealed a vacancy rate of 4.6 percent . rbwever , this survey was conducted during the first week of August when many if I students are on summer break, so vacancy rates can be expected ? to drop substantially by September, 9 i • A shortage of subsidized Musing unite exists in Denton County; s waiting lists on file with the Denton 1busing ,Authority for the city of Denton alone total over 300 names. • Denton County rental rates range from $ 194 to $ 209 per month for efficiency units; $166 to $355 for one-bedroom unite ; $ 193 ti to $395 for two-bedroom units; $229 to $490 for three-bedroom i units; and approximately $ 345 per month and up for the few four-bedroom units available, i I PIANTEC believes that during the next two years the Denton County i housing market could absorb a multifamily bond issue to finance four to ,l € six apartment complexes containing between 800 and 1 ,000 new units . These apartments would probably be located in Denton , Lewisville , or Plower Mound end would satisfy most of the county's projected rental ' demand over the next two years , including those factilies currently on s' waiting lists for subsidized lousing, Assuming that the cr,st of rental housing construction 'currently averages around $ 30, 000 a unit ( for a 1 ,000-square- foot apartment) , -PirANTEC conclu:;es that a bond issue tot'Aling between $24 and $ 30 million would be necessary to finance these i . unite. The following report details our findings. f r } r 2 l I 1� 1 L v i r S' DENTON COUNTY RENTAL HOUSING DEMAND Denton County is one of 11 counties comprising the Dallas/Fort Worth SMSA. The county can be characterized as a` middle- to upper-middle- t i r income suburb ;ln north central Texas, about 30 minutes north of Dallas by ! car (Figure 1) , During the past two decades, the Dallas/Ft , Worth SFlSA' s norther! , y growth Luis generated large population increases , and many new ; job opportunities in Denton, following', the • i, same trends .experienced in f Collin County previously through the SMSA' s rapid urbanization. 4 POPULATION AND HOUSEHOLDS ; � t Between 1970 and 1980 Denton County grew from 75 ,633 to 143 , 126 ;i persons , representing an annual average g population gain of 6 , 750 f { ( Table 1) . This figure does not include the 24 , 000- plus students attending North Texas State University and Texas Woman' s University, both located -in the city of Denton. Many of these stud6nts reside in the county at least nine months during the year . The hbrth Central Texas Council of Governments projects that by 1990 the county will contain is. 226,800 persons. The 1970s SMSA population grew from 2.4 million to 34 million and should contain almost 3. 7 million ' >' E, people !ry 1990..,. ' Even though Denton County population growth in the. 19708 was strong, new household formation increased at an even faster pace. This increase in households is primarily due to the ' p Y decline in average household size 111 occurring in Denton County and nationally, a result of more one-i'person a households divorcee and r, , a generally lower birth rate , Between 1910 and 1980, Denton County added an average of almost 21$60 households annually; i while the Dallas SMSA added almost 310700 households each year . Because I , ( the growth in households , or occupied hoFising, units , approximates 3 r y . • T 1 f new housing demand , household growth projected through 1990 yields Denton tF County' s estimated average annual housing demand for the 1980x--3 , 5 t: 0 � t ? ' r ft` households per year , or a total of 35 ,400, Of Denton County' s cities , the most populous are Benton, growing from er 39 ,874 to 53 300 sons between 1970 and 1980 , and Lewisville ► ► p , t increasing from 9 , 264 to 24, 850 during the same period (,Table 2 ) . Highland Village , Flower Mound, and Lewisville are the county' s fastest growing municipalities and are all located in the southernmost portion of the county, close to Dallas , , The 'age distribution of Denton County' s population is shown in Table 3. Between 1970 and 1980 the working-age; segment , aged 25 to 64 years , grew more quickly than any <sther segment of the population , with o- the bulk of the county' s growth coming from this group , In fact , the fastest grot#ing age group was the 25-to-34 segment , the group most 'likely to form new households. A very smell percentage of the population--or 6. l percent--is over age 65, dropping from the 7 .9 percent of the 1970s, j t I k and reaffirming Denton County' s status as a younger ,working-age common ity E` 1TLMIT NT Table 4 shows the growth in the number of employed persona living in ` Denton County. Between 1974 and 1980, the county added an average of 1085U employed persons each year , and the unemployment rate averaged only 3,9 percent. EmploymOAL has continued to grow, reaching 580556 persons as of ttay 1981 , with an average 1981 unemployment rate of 3.7 percent , Table 5 divides Denton ;ounty employment into job categories . This; differs from the figures in Table 4, because they xapresent jobs located i L G ' E� 1 } i .�T .0 .941'iaM uS .,Y4 G1.iY A Oar f e..�: .:...'r r ..i.'.'r,. .r.-r i. ..I:IGi .,. T.\ ... t t.�...Si....t lY• ( .".::G hY.tiN• :.rJ in Denton County, rather than employed persons residing in the county but not necessarily working there. Between the third quarters of 1978 and 1980, 6 ,852 new jobs were added in Denton County, with almost two- thirds rr 7 in either manufacturing or wholesale and retail trade. Other rapidly 1 growing employment categories are services , construction , and finance , insurance, and real estate . , a i A list of Denton County's major manufacturing employers , with over i 50 employees each, is shown in Table 6 . The largest employers in the r county are Texas Instruments with 2 ) 100 employees , Victor Equipment Company with 10000, Moore Business Forms with 500, Krestmark Industries g ' with 400, losten' e with 285 , and Russell Newman Manufacturing with 250 ! employbes , Currently, at least three major firms are planning to locate in Denton County, with a total potential employment level of 1 , 000 people. In addition, several major industries , including Texas Instru- j ments , V, and Xerox , all of whom own land in the county, are considering , . either expanding their facilities or relocating to the area . This large amount of new employment growth has brought a strong demand for both owner-occupied units and rental apartments. ' ' INCA The Department of . Housing and Urban Development ( HUD) has prepared Dallas/Fort Worth SHSA family-income distributions for the years 1969 , 1977 , 1979 , and 1980 (Table 7) , The distributions are 'broken down by decile s, or 10-percent groupings, During 19800 for example , 3.0 percent of the families residing in the 11-county area earned $ 15 , 034 a year or leas, The 1980 SMSA median family income was $21 , 100, an increase of 14 percent from 1979 and over 105 percent from i1969.` It should be noted E I` , + r i 1 that these figures are for the entire 11-county SUSA, and not for Renton ' County alone. ,t Per, capita personal income for Benton ,County is shown in fable 8 . Between 1974 and 1979 , Denton County personal income grew at a 13. 7- 1 .,. percent compound ,growth!' rate , a rate higher than those for either Texas or the nation , Denton County' s high growth rate reflects , the " in-migration of many middle-income, families to the area during the 070s . s As of 1979 ► Denton County' s per capita personal income was higher than both national and state averages. 7 populati.on , ' employment , and income data all illustrate Denton County' s high rate of growth Located in the rapidly growing Dallas/ Fort Worth sH$A, Denton County has greatly benefitted from Dallas' 1 northward growth during the past decade. Because the county' s future growth should surpass the past decade' s , housing demand should be even " greater during the 198os, With turront high interest rates preventing many .persons from buying homen, many families relocating to the area are i choosing to ' live in rental apartments . Both this fact And the demand for apartments ,„generated by tbrth,;Texas State University and Texas Woman' s and for a artMent9 in Denton County , University' have led to strong dens p � ,. ;I particularly in the cities of DA-nton and Lewisville. I 1 1 HOUSING ' e wa to approximate housing demand is to evaluate an An effective Y area' s household growth, or the number of additional occupied housing !! i units. Although this method does not segment demand by unit type nor account for second homes , it provides an accurate , workable base figure for gauging demand for new year-round residences . Between 1970 and E 1 6 I .. ./ s d,if,.r.Y.'rt il.r . • .:'rw real ht:li•t, J ` 1980 ber of households in Denton County increased num by almost ► the ections 2$,600, `re presenting an annual average g 6xn Proj of about 2,860. 4f S for the 1980 to 1990 period show an increase of 35 , 400 households , or 3,540 units per year. Il According to the North Central 'Texas Council of CAVerrtments , Renton Preent owner-occupied , single-family County contains a housing mix of 74 P 1 „ rcent mobile homes ental apartments ; +, and seven pe units; 19 percent r this same ratio , the demand for both ownership and s ( Table 9 ) • Using } units can be calculated for the 19801994 P eriodr 26 , x00 rental housing projected single-family ownership units , or 2 , 620 per year ; 6 , 700 o ected rental units , or 670 per year ; and 2 ,500 mobile homely or 250 } pr j per year. Now rental housing demand could ac tually be higher, however , # housing and the t t because of the current affordability crisis in ownership waver , high k opportunities . F expected influx of many new employment, " interest rates have caused residential coi►atruction to lag substantially f behind* emits were From 1970 to 198U, ' an 2 ,081 building Permits, annual average of Issued in Denton County ( in cities ov 2 ,000 on1Y} , 1 1448 fox single-. er 38 for multifamily units , and 95 for mobile hon4es R family detached homes , S issued during the Past four Wwever , the number of permits (Table 10) 6 during 1979 befogs interest rates years is somewhat higher , particularly l G became exarbitanti Table 1: shows housing conditions for the city of Denton. These i data, taken frost ce Plan (NAP) , shave the city' s 1busing Assist"' that 5.6 dwelling unite were in oubstandird I percent of the city' s occupied 4' ' ercent of the county' s rental . condition as of 1976. Of the total 4 .9 p 1' 7 114`F ' l- rt tin. @• . , s4 • >IlI' )f ` ,r f ti:u .e, v ., v,.. rff �t4+{Rt !. r+7♦:f,. 1P ♦'" ,� .. i r.� stock and 4 . 7 percent of the county' s owner-occupied holsping were in substandard condition, On August 5 , 19810 l'LANTXC surveyed over 30 Denton County rental i i5 i apartment complexes , with a total of almost 4 , 000 units , to determine current rent levels and vacancy rates. All complexes were located in ! r I` either Lewisville or Denton, Table 12 shows Denton County'' d_ prevailing rental prices for all unit sixes , from efficianciea 'to four-bedrooms . i Efficiency apartment rates in Denton County range from $ 194 to $ 209 per p i7lonth; ' one-bedroom units from $166 to $355; two-bedroom unite from $ 183 i f to $395; three-bedroom units from $229 to $4$0; and the few four-bedroom J ' units available around $ 345 per month, Currently, the vacancy rate for rental apartments in Denton County is 46 percent ( see footnote to map key) . Because this survey was conducted during the first week of August , when most of the area ' s college students are not in sch,.)ol , this vacancy rate will probably tighten substantially by the end of September , t' If a developer were to build low- to moderate- income units , these units would' be ,rapidly absorbed into the Denton County market for several' reasons: ( 1 ) all subsidized apartment complexes' surveyed by F'LANTgC had waiting lists ; ( 2 ) the Denton Housing Authority is encouraging the production of subsidized units since there are few existing low-income I housing complexes, and demand is high; and (3) many families currently in < j { substandard housing could relocate to new subsidized units . This N filte rin g process" would continue until 1 roar y substandard units I , i eventually; became permanently vacant and could be razed, j � g a 'fit r Figure 2 and its accompanying Map key show the 33 .aF artment ! A ' and sll , as previously stated * Were ! complexes uurveyed by PLAN'fL�C an , gi located ( 1 -9 ) n ( 10-33) . in either Lewisville or Dento The number of uction are also included . units and their estimated years of cunstt' r k with 175 units , is E Currently, jAwisvi.11e' s Foxhaven apartment complex , N uction in the county. the only complex under constr Although another }. 1 complex is slated for construction in Lewisvil.7 e , details are not yet ' t available. r Worth SMSA' s continuing northward growth, both � With the Dallas/Ft. .Wo a ownership and rental housilig demand in Denton County should remain etrattR o justify ; during the. 19808. However, r(Aonthly rental paymonts necespary t „ the co st of constructing new rental apartments at current . interest rates ford , would be much higher than the market can af F1.AIMC belie''ea that a tax-exempt bond issue directed at financing multifamily housing would r demand for rental f>ausing. brlp satisfy Denton County► growing t j I N� E i F k . {. I 1 G •.. a -` .6 a ' .' t r ............... I r. Figure 1 P id .. DENTON COUNTY / DALLAS • FT. WQFi7H SMSA I ` r LOCATION MAP 4; E it l i IMrWI MM i•wy' MI p141�Y it �Mr •Y.:1 ,rr IIrJ DENTON COUNTY Laa rir �rl r ..y YI. av A% , r I wl. YIYr a 1, I ` 9 M Aw.• r AVN 1 Nn Yi li uil ai.y. ' � .rhy „�r M rl.� MT, YI' w N Nlr ..f1 i Y IYV nY �1♦ 'rah M yaMV� V � f..Y Y {i11 MI .�.' 14 Y11i �vtl •HIS YI }r � 1 YI'Y wll w•� g1Y1 1 Y ,Y i1A III y �F�1 1 1.. .. _ '�- Y:.♦ ,X'jY' i w '""�n "y�nh S.p rw d?' 'I, wM 'r.iMa � I �•Y-IY .YAM In 'NYI.�~� ��• �1, 11� Y�IF ivYw 1 1 0_� � f .r14 fYYY :` wY �n nY . r1YY Y•tlY yylyi rM .r Wry I . r rM 11 r fs yl 1 -al Yry NV�. Ay V a�lY //' 1 IpY:�t+ �IIHM V P'1 Yr� Y I J J �. . , I, qW Nu• yp 'hH MYIM. ~W l .t y. .I `IY-. /I,I M` -rwrMM t I- uY•4 __ 1�wi. -�iN r�rN Inl• •IIYI l I 1 Yrw TG tit. MI" MVI Y/Y `!/J �ylY��•` 'YaaYyY \\ Cn«u �^ �s Nlww � •MwY Y \ 1 1!1 Ya.. wl Ir�M I�IYII ..emu �1. � •{ �-� � ' 1 Y� •YY y.µ \Yr. '�Y YIIYII �' rl •11►ia•1^ l Yr4•M `lWh � f w I 1 nnr.Na MYlln 1"� I .M !•�µ \ JAj wra/r 4� • Mw W a 1 �f M AI '1 r II� vN .yel II Iti, i i I SOURCE; PLANTEC Corporadon, 1981 r' 3; .�}�1^�'�Qli(r: 4. �S.lle i,' '.•E Y.`)'slh t�(1. `. 4r: 4} •: ,�.. ,.V. � ..,o_.. ��J ":�U 4444.. a Table 1. Comparative population ^rowth Trends `"` ~ ' Chan a 19701980 Change 1980-1990 Compound 1kimber Growth Rate Nwuber Growth Rate 1970 1980 1990 Area --- �'� ---�- 83 ,674 4.71% 226 ,800 67 ,493 8. 49X 35,400 5436 Denton County 75 ,633 143 , 12b 28 ,578 8.46 _ Population 51 , 400 86,800 (0. 17 ) 4 22 ,822 2.60 (0. 53) '� Households 3. 30 2.77 Persons/ Household 2 27% 695 ,122 2412% Dallas SMSA* 3,670,000 597p255 299 ,OQ0 2.50 opulation 2,377 ,623 2,974',878 316 ,619 3.57 752 ,381 .1 ,069 ,000 1 ,368,000 _ Households 2.75 2.65 (0. 37) 3. 12 Persbr{s/ 1i-Nusehold j 2.42% 2,711 ,617 1 .80X, Texas 14 22E ,383 029,728 1 ,242,000 2.28 ; � ►+ i1, 19'8 ,655 , 17 ,000 ,000 3 � 3.66 o popu titian 4,921 ,009 6 ,163,000 1 ,487 ,004 (0, 12) , Households 3,433 ,996 2.82 2.70 (0. 35) Persona/ Household 3. 17 �,llie l )od , Johnson , r allas , Denton, r the Dallas SMSA Consists of the fallowing 11 counties : Collins Collin Kaufm an, parker } Rocksiall , Mrrant , and Wise. ,t Counts , Texas , March 1981 - Source, U.S, Bureau of the Census, 1980 Final population an3 }busing Ur , North 'Central Texas council of wvernments , Pwalatlon pxojectir,n9 , 1981. pt,&�G Corporation, 19810 4444.. 4444 1 �\{.4.4k1•\•\4N311`dYI IIA!S14hb4YN\11e<{iRl'41f{,ry+j.,'�.f'{� f: l i _ vn,..uaoua�GW.uara l.+ ra.r... ,xinl:i:YM�i .i'i' r. r Table 2, Population of Denton County Cities ',Annual {; Average Compound 2� Area 1970 1980 Change Growth Rate Denton County 75 ,633 143 , 126 6,750 6 .59% The Colony N/A 100800 N/A NSA Denton 39 ,874 53,300 10343 2.94 Flower MoVn<t 1 ,685 4020 287 10.44 Highland Village 516 2, 500 198 17. 09 P Lake Dallas 1,431 2,700 127 6y55- 1, 1�,wiaville 9 ,264 24;850 1 ,559 10.37 Pilot Point 19663 2, 150 49 2.60 Sanger 10603 2 ,350 75 3.90 ' a `. : 'Remainder of County 190597 - 39 ,926 2,033 7.38 E 3ourcet North Centrai Texas Couneil of Governments , Population Esti- mates-Time Series, 1980. qO5, Bureau of the Census, 1980 Final Pgpulation,'and (lousing ' . Unit 'Counts , 'texas , March 1981 . PLANTEC Corporation, 1981 . ,a •3 L I a i I i r , 11 t. r r i tirt�h.ev.P� hr ')'V=t 'i4 �S�i{5(};Alkl,IrL f7J:r'u ml.,n`^ Table 3. Age Distribution, Denton County Abe 1970 1980 Group Number —' Percent Number Percent r _ j M 0`14 18,929 24.9% 29 ,626 0.7% 15-24 210151 28 .0 32,490 22.7: 25-34 9 ;873 13. 1 29 , 198 20.4 35-44 7 303 9.7 16,030 11.2 s k, 45-64 12 ,407 16 .4 27 ,051 18.9 r LL 65+ 5 ,970 7.9 8 ,731 6 . 1 Total 75,633 100.0% 143 , 126 100.0% Sources %rth Central Texas Council of Governments , 19804 a . PLANTEC Corporation, 1981 , 1•. ; .a • • r t : . i t , f • { z t - f- n ,..,rya(+M. .9.. e;�e n �ta ;( :, ,•.r,. Iry„ . .. , t c- .F •. lv. 1, i ,,. .. .,. ., u. A+,. . .J.., :r,. - , Table 4. Labor Force Trends , Denton County* Annual Averages Civilian "Unemployment � Year Labor Force Employment Unemployment Rate i 1974 46 , 128 44;487 10631 3.5X 1475 48, 162 45 ,588 2,574 5.3 1976 46,717 44,522 2,195 4.7 1977 48 ,489 46 ,632 10857 3.8 ' 1978 52,666 so 908 s758 3.3 1979 550603 530972 1 ,631 2.9 1980 57 ,123 55','603 2, 120 3.7 1981 Jan 59 ,581 57,184 20397 4.0 Feb 59 ;780 57 ,676 2, 104 3.5 Mar 60,295 58 ,085 2,210 3.7 Apr 60,595 50 ,664 10931 3.2 may** 61 , 064 58 ,556 2,508. 4. 1 t * Employment by place of reeidence. s►* Preliminatiy. Source : Texas Employment Commission, 1.abor .Force Estimates for Texas Count ea, 1981 P1.A1�T8C CorporatioaP 1981 . E 1 !!S t t{ I r 13 i , p J,t./ �.l 1 ie,,�lle'F v 1;,-y,� °. .x� i,s s:�i� sal Gj y"t1 t1r } , h� Table 5. Em ployment by Place of Wbrk, Denton County* u • F f Chan we 1978-1980 r'• Category 3rd quarter 1978 1980 I�tnbeY impound . + _' Growth' Rate Total "Em to Employment 30,864 370716 6,852 Agricultural 10.342 135 190 i 55 I8.63 Mining Sb 56 Manufacturing 5,559 7,685 2; 126 17658 Construction 1,377 1 , 864 487 16.35 } Transportation, Cohmiunication, ' and Public Utilities 1 , 217 10285 68 2.76 Trade 7,317 9,491 2, 174 13.89 Finance, Insurance, and teal Estate t 1, D04 1 ,430 426 u Services and other 19,34 � 3,633 4, 344 Local Government 711 9635 3,634 4,083 ti 449 6.00 k State Covernmont 6, 701 6,942 241 1,78 Civilian Federal Employees ! 287 346 .- 59 9.80 r * This data is for covered employment and wages which includes all t and salary employment covered b Wage y unemployment insurance laws. Source; Texas t� ploymenC Commission, Cnvered Employment and Wages by Industry and County, 1981 . rr PLANTI,C Corporacion, 1981. I r 14 . )r., aFfAi Ai,4XE�(ilinipii,N(�i3{ 2:�.pc�: \1F ♦ ' . /5 y F a� Table 6 , Major Manufacturers , Denton County (50 or more Employees) r Name Employment Acme Brick Company Andrew Corporation 214 Beaman Corporation 222 ' "A Denton Record Chronicle 76 Emconite 06 Harley Corporation 110 " Narpooi Seed, Inc . 65 Josteril s 67 kolmar Laboratories 285 � restmark Industries, Inc . 400 ti Moore ."uyine•ss Forma , Inc . M6rrison Milling Company 504.; Ohio Rubber Company lk4 peterbiit Motors Companyu 80 117 Russell Newman Mfg, 250 Taxis 'Instruments TrAnsport ,5ysteras, Inc 2, 100 " 80 Trinity ,Yndustries, Inc. 200 1'urbb Ref rigerakion 138 Victor Equi neat Cohlpany Weaver Manufacturing 10440 .. Wittke Iron Works 50 . Source: City 'of Denton Chamber of Commerce, Manufacturer' s rer+ s Guide s March 13p 1981 , PLAftC Corporation , 1981 . l , . ' 1 S i r-A-7- I b' DallRs/Ft. Worth SHSA* Table 7 . Family Income Mstributioa, l , r Docile 1969 1977 1979 1980 712 $; 6300 $ 7 , 132 € 10 $ 31468 $ 5o r z� 5,613 9 ,246 101197 11 ,5.k4 S 20 !' 15 ,034 30 79310 l2,Ok2 13,280 +' 14,433 150918 180021 40 8,762 50 (Medisr) 10 2 9 16 900 18 50Q 21 100 60 12,009 19 ,782 21 ,817 24,699 70 13 ,760 22,667 24,998 28,300 t ' 270447' 30,270 34,269 80 16 ,662 , 36822' 40,609 450974 90 22,353 1 26 ,b38 43,88 ' 48,394 54,1'87 { 95+ t * Dent County is part Of the 11-county Dallas/Ft . Worth SMSA. source;, u.9. Depot and Urban Development , Family Income } Distribution, 19806 A PI,AN C' C,orpbration, 1981 . y k l 1 1 16 i Table So Per Capita Personal. Income , Denton County, Texas , and United States, 1974-1979 i Denton County Texas urrent Percent Current Percent 'united States . ' Year lbllars of U, S. Dollars of j U. S., Current Dollars 1974 $4,781 88. 1 $50041 92.9 55 ,428 1975 5,536 94, 5 5,583 95 . 3 : 5 ,861 •1976 6,272 9810 6t 175 96 ,5 6,401 1971 7,085 100.7 60911 98 .2 7,038 v r � r ' 1978 8 ,003 102. 1 7 ,784 99.3 7 ,840 1979 9,088 103. 8 8778 100. 2 89757 Compound Growth !Rate 13.71% - 11. 73% 10.04% 4 Solirce: U. S, Department of Commerce , Bureau of Economic Analysis , a unpublished data, 1981.. LANTEC Corporation, 1981 . , t 'r G , } i � x 1 � I r to .. ., s .. �.e•. ,4: ..p.J.,..Aq't ••}.fi,:(' v,lY.v'n. z 'able 9. Denton County Market Segmentation , x9$0-1994 Percentage Average Annual Housing Type IM 1980 Housing Demand j t Single Family 77% 74x 2;620 units # Multifamily* 17 . 19 670 r Mobile Homes 7 250 ;. } ' Total 1QOy 100% 3 j,5410 +� Note: Multifamily units in Denton 'C,Osnty are assumed to be almost all rental units. c Source: Nprth Central xeXas Council `�' Governments, Regional .lbusing *tes', 1980. PIANT6C Corporation, 1981 . ILL L f , t 1 r j r 18 r` ,iU„.?«,v. ...fir,t�.i•..'7iit+d h;1,• Table 10. Building Permits', Denton County ( Cities over 2,000 011y)v ► . 1970-1980 r ; t Single- Multi- Mobile Year Family Family Hades Total 1970 926 962 129 2,017 1971 1 ,433 643 128 2,204 ' 1972 . 1, 290 365 196 1 ,851 r, r 1973 1,889 568 128 2,585 i 1974 1 ,971 453 127, 2,551 19'75 10025 133 50 ' 10208 1976 10077, 221 51 1 >349 1977 11597 606 0 20203 ' 1978 1,939 215 51 2,205 � . 1979 1 .572 10081 93 2,746' :. j 19$0 1 ,207 670 98 1 ,975 f 4 !4 Source. Abrth Central: Texas ,Cotmeil of Governments. ; PLARrEC Corporation, 1981, • ij , 19 A•11:1', ..,l_ r rt 1..+1r•.� .i, u...t.r-, N. AI..+.J,'41UW44,.Y.i7! r.31_ w{vtkt; s, Table il . , Housing Conditions, City of Denton* , Type Total Owner !tenter All Occupied Unite 17 ,011 100110 6,901 Standard 16,057 .. 9 ,477 6,580 i Substandard 954 633 321 Suitable for Rehabilitation 766 502 264 j 1 yy * Taken from a 1975 survey. Source : City of Denton; Fhusing Assistance Plan, Chtober 1978-October 1981. PLANTEC Corporation, 1981 . F i #i F ' 20 (Ct+xaed§;lld Vtki#'+;hn4:5} 4 Fdl1''.7.V I :-'.t-tl li•ma'i1R# 2..,i.:.riA. a-. } 1tr lclx r,,p#.°.; i5,, e,l .� .h l:ia aL..e wt.r'.., 9, J,tifk. t ..M °f.: Agar,+ t s:� , 1 i Table' 12. t,enton County Rental Rates* S Monthly. Rental Unit Size Ranges r,. Efficiency j $194-209 I .,... h 166-35 One Bedroom j Two Bedroom 3I' 183-30 i Three Bedroom 229480 Four `Bedroom 345± * Based on a survey of approximately 4 ,000 rental udiits in Dentin County conducted on August S, 1981. I Source : PLANTEC Corporation, 1981. , f 5 ' � I i 1 , r 21 E 1J � �*:aA}z♦ 4...rS Y-%., a ..�. f. ':ht%F4 {f..., .''C• r. .rt �I. I 1 �rrY•- . Figure 2 IA 1 / P ;SELECTED DENTON COUNTY APARTMENT LOCATIONS � ,i I"T ,Zr•�t '(. I .�' , I t / h'. )S >• .i f 1�`� r y -�l.� �•? f/ �,/ `y.. �f / f'{ f �n�r, :{ � .r.� Si r'h''�11 } � � ^� 7 t 'lam '•,J �` {/ l 1 //� I J�M �C Iy. W 1� I t rl'�M�A r t•• r V`> .', ` ! 1` � Cr•rIlww • ,. .\ 1) ' Y rrl•.. r. > h ' \ '1. `` S I t ;,`r1 �•� ' .J.L'.. .W. �.;,,``t. *1ltfi l '/a/•li 1 41 A ILL loxi { 1 1 � �1 2 , � p 1 1 0• (' •• , •..a. , �`,,, /�, j �.. . I t t .. � r r~:1 / � )ti o y - 4r•� 3 C\�ti I,� Y., \ / i n Iri'1L : 1�/ � r� \.� 1 -y. r 1,.,7 I/ ' r ! ff. kl ,� / r'� 1 \ l l' � '• y,'..J i r � �i / /• - , 1 is h�Gh i�� C � ��', � , ♦, sJ� r'r-• I ��t 1 � ♦ �. '' \r . �t i ;I I 111.. � 1 rt 7 � I i,,• _ J' � , � 1.1 r � 1 I •.,I� I 1...Y � �'wr� � . 5.. ft »W;, ,' \�Y*/ ¢j,JC� <)Lln r _ µ..L.1: `....�•.1 .,. � f �• ; ,�..; w A !. _wy.{l7 /1• �. , \ t r:l ..1�1 1}♦ � � ,4C y.� T ��, .�y r S 4 '' « `..� f '. r ,b 1 �� t"' � ., F to \: _��{:?, ,.A„� ��r/.f�('`t' � •1l ` � _., "d �1 1, I ' � ;,••1 r ,;� � 11 '1 A � i 1 2 ,r 1 � 1 � w Y .,•'1'A,,1 r i _M1 Cy W4 t\y �C ,�'��f �' � v� `~� ..•'I4 '' , µ•�� � L•_ ,j �. . .' �r � `� � ' • , y 1 Z 1� • � 1. •1 YN � '�'y l y I �'a: 14{t f -. \ M:.�. ,I ! ,. ;4 � _. (f I. ,.,,�l • - ��>(.I s4 '� I \.,.�_ ..1t- 4,r � _ r w �'\'! L.� f f 1 �. •«• `�. / li, ISpN1 1` ) �.,�, y r 11 c� �' ��F � { 1 3 (r N F 1 - .HB , S�..k+!. �} .`, ,' .I 1�.J r-v'\y`fe —t / .-.! r�' tJ,1j \-,•' } rw.•O 1 �IrN4' -' •�.. .n1 f ) 1.�1 .Gi 4 / lJ,., 4 , s M wr.rW •I 0 MOW" _\ r � , >f. , \ tNN•, s5/q � �•r4k` �. \ I tl 1t. ;L"�,`..:J..•IL ,� t:' `�!�i� rw'M,�,.« f 1• � Y 1 f •��• /�`.1•r,�•• \, \ / �� I,11M[ � 11 'IW.Y Ir,I .... a, y ` � u- J�... ,.. .• r 1 .1•wnr , u.. ,+ tl f ,„ ' l I .lv¢. us feti� �•.� ,. _.,.,.. ,w...GV:Qf . ..-..T a.k� ,. I r , . ` 4 P Map Key. Selected Apartment Complexes* , Denton County Number Map of Units Year Built Key ;arse i 27 19,72 1 Oakbrook Townhooses 244 19$0 r 2 Arbor Val ]ey APtg• 348 1980/ 198/ 2 lake park Garden Apts. 152 1971 n A ts . 4 1�keview Garde p 17b 1918 5 did` Orohard Apts. 240 1980 6 Timbercreek p 7 Vienna Village Al s 14anor , 212 973 traction g Basswood 175 Under Cans z 9 rokhaven N/A N/A 10 Alton, House West Apts. 42 1460 a 11 ' Americana Apts, 82 1962 , 12 Bonanza Apts. 40 1978 13 Bbnnje Green Apts . 226 1969 , 14 opus S4uate Apts. 201 1975/1977 15. Denton i orth �Apts. 144 1978 16 Gavebo Apts. 100 1973 17 HDily Hill Apt$. 161 1971 lg tAdenderry Oaks Apts. 121 1971 19 ,. ° t�ondondetry Village Apts . 197,9 50 20 QIkla+.n1 Gardens, Apts. 184 21 Tio'bers Apts... g6 1974 f 22 Salem Ridge Apts. 88 196 /1976 23 Stonehill Apts 132 1970 24 ; , Village Fast Apts+ 32 19.70 '. 25 , Willovwood Village Coronado North'' Apts ' 144 x984 74 j , 27 , greenway Patio Apta.•_ .. _ .._. . ... 112 1979 ; 28 la prairie Apts. 160 1971 29 Loma Del Rey Apts. 132 NIA 30 Gek place lI 126 1971 31 Singing Oaks Apt$. 140 1979 32 Heritage Oats 177 N/A l 33 phoenix Apts. ! * Based on pLANiEC' s survey bf almost 4 ,000 rental unite , the rentals 4.6 apartment vacancy rate in Dentost Cooney as of August 5 , 1981 , 1 percent Source; PLAN"1'8C Corporation, 19810 22 f . t `4 3C Draft of .1ugust 11, 19�.'� �ll I E DEN MIN COUN'T'Y ('PEA q) 14OUSING FINANCE CORPORA'T'ION as 'Trustee 1 MOT � p 'T�M7 SWURIND $ COLLA`1 RALXZEO IAANS»2b-Lh1DER KOUSINp RFVll1E. HONDS S 'RtrS 1981A i Cited as of October 1 , 1981 s I ,I i y s F ...n. ..a ext .r•V�s6l wirrAO<.�,P.(�tl1rYa�I i , l �' Ya-!u .5 a le .11i Cl ' .iJ,l(„ (y!'•;!+1:. fr , , T,i { t 'TABLE OF CON'TRTI'S t . . . . . . . . . • . 3 . r . . . . r . . . . . r , . . . . . . . . . .. . . . . , . r . . • . . • . . , l . . � . Ebrm ofu Frond , . . ! . . . . . . . . . . . . . . . . . . . . . . . . . l , l � . . , , 9 'por►n oP Trustee's Certificate of Authentications , v• • • • • ,,• • • • • • • . • . • 10 of Tnt�rest CoUpcKl, • . : . r . . . . . . s .. . . . . . 1 . . , . - 06 . . . . . . 10 1 Provision r6r RegtstrattOn ' . . . . . . , . . . . . . s Form or ruily Registered 57 . . r . ! . . 6 13 � Fbrm of(p� "ryustee' sy Chrttficate of Authentication . . oil Form o♦ AsslgnMent l . rss . l . . l . . . . . . , i . , . . . Ir . . 1 , . . 15 yt) ;ranting clauses . . . . . . . . . . . . . l . . r6 4 4 6 . 6 l044 Ut .4ftTT.CLE � � „ S 7 101. (Y--f initlons . . . ARTICLE 11 m BOOS f 23 SECTIQN;,2fll. A��.thorized Araunt of Bonds . .• t . . . . , . . . • • • . • . • • • • • • . . • • 2 SF�CTI( E 202. Issuance of F,ondls . . . . . . . . , . . . . . 25 Sg4fPlCt�f ?03% Regitrat#� ri, »nafor and �".�cchange . . , 1 , . . . . . , .: . . . . . . . .. . . . . SECfIOtt 204 . Exc+C��tion; taimited Obligation . . . .. . . . . . . . . . . . . . .. • • . • • • . . . , . Autleicntin . .,.. OIJ l /K .. . . ... . . . .. . . . . . 11 . . . 1 . . . , 1 . ... 1 . . ..'. , . 22'�8� t . . . 5 CTiON 206: Forrif of: t strf sio — s000 ar�da or�Co,3pons� • • 28 + 'E'Tinf 207. !,itifated�.: y . > SF�TION 209; temporary 'ionda a r4. 2$ SECTION 209• Cadellation and, �7estruc t'ou"pon Bonds Suri'' dered fur exchange , . . : . . , • • .'. . • . . • . . • . . 29 r i vhr of the Bonds l . . . . . . : . ! 29 I)FCTIoN 210. - Y 34 A MIA T11 REM[UrM AND FUNDS 5FPIGN 301. Source of Payment of Bonds . . . . . . . . . . ! . • . • • • . • • • • • • � 30 ^r� CQreation !''�of Amds and Accounts t . too to t . . l . . l : . . • • ...yyy{{{ S+MV ��+v F!1"J•. ,ni.Gial 1�TPosit;ys�,.�,�. 1 . .. : . 1 1 . . . 1 . . 1 . 1 1 1 . . . . . . . . . . . . 1 1 . , . 0 . . ♦ . , ( . . ✓1 ;. SC`"i 305 t t+brtgapSe, rao�fl j�1L M . C 1 . . . . . , ,'. . . . . . . . . . . . ... . . . , . . . . . . ! . l , . . , . L Swn 3 Cost of Issuance F1�d . . . . . . . . . . . . . . . . . . . . . . . . 1 . . . . . . r . . . . . . . . 2 E SF;C'1's.�N 306, Revenue f�2nd , . . . l . l . . . . . . . , . . . . l . . . . . . . . . . . . . . . . . 0 , . 32 SF'1,7i % 3()-j. Pebt service Amd . . . .. . . ! . . . . . , : . . . . . . + . . . . . . . . . . . . . . 33 j (�1 /� r�,7`'.�.tdl. Re , :Fend i�i0TON 36L8 4., r' p . . . , . . ..II . r . . 1 . l L ! l1 . . . . . cj . . . . .Y . . . l . . . 1 r � ; � cJanaral Fti.�sd . . .. . . . . . . . . . . . . . . . . � . . . . 1 . . ,,, . . .,. . . . . , . . . . . r . . . . 33 Final 8M ON 309•; 3 4 r S'SCT10N 3100 L , ts r Page SECTION 3110 Seauriry of 'Funds 1 , • 1 , 1 • , , , • , , 00 0 , , • . . . . . . • , . . � . , . , . . . : . • • • , 35 a SECTION 312. Non-Presentment oti' Ponds . . 0A, 4, . . , . . . . . . . 0 3S SECTION l4. 3. Moneys to bP held in Trust . • . 35 ' ARTICLE I' REVENUES AND APPLICATION °PEtEREOF 0ECTIoN ?301 . Revonues to be Paid Over 't0 'I4K.tntee .: : . . . . . . . . . . : . . . . . • • . . � SFx`�'ION .402• Pa en s o 35 ' < 5� t f prinvipa.l. and Interest . .,. . . . . : . . . . . . : .. . . . . . . . . . � SEG'I'I(?N 403. Reveyues to b@ Held for �1'�80ndholders; Certain Rxeeptions . . 36 `' { ARTr;;LE V op ML WEYS 8F13TION %1. f Investment or i+3oneys . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . , . . . , . : . 36 E ' SVMJONr 02• E ng rrti s and Losses . . . . , . � . . . . . . . . . . . . . : : . . . . 37 1 SECTION 50'3, Investments; Arbitrage; Special Arbitrage Restriction. . , , . . . , 38 ARTICLE VI E RMEN&MON Of, BONDS BM;V RE MA'IlRTTY F .. SEG" ON 6/0� tQmit3ton on Redemption :. . . . . . . . . . . . . . . . . . . . . . . . . . 5'F I(�V 61/ M'!wto. .1lGU Vi +lf . . . . . . • , 0 . . . . . . . . . . . . • . 1 . . . . . . . . . . . . . 3� f j, p SEC'TON 50' . �rti Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . 40 3 C 'x V1. 4V Y . . . . . . . . . . . . . . • .. . . . . , . . . . . 6 0, . , . . . . 41 5 Notice oC RedL�mption 3 . . .. . . . . . . . . . . . . . . . . . . • . . , . . . . 41 SECfrUN 606• Effect U� Redemption . . . . . . . . . . . . . . ., . . . . x . . . . . •`. . 009 q 66 . 9 c G"t ION 60 p 42, 7 Effect of Redwn tion . . . . . . . . . . . . . . • , . . . . . . : 42 ' ARTTCC,E MY PAYM IT FURnM ASSURANCF„S SECTION 7010 Payment of PrinciW or Redemption Price of and Interest S�{CT?:ON 702. orl, 8onds > . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � . . . . . . . . . . . • . . . . . . , .4 Degignation of ,Addit orW Paying e 3 SECrYON 703. Furthet� Y f3 Agents ,43 $80`TICN :7041 LmmnitiAssurances . . . . . . . . . . . . . . . . . . . . , . �, . . . . 43 « s and 'T.imitafions of Responsibility or XssuPr. . . . . . . SECT.10N 7054 pirranc try State F4,f4` 8 FC 710 IN 7 List o.1. Bondholders ,'AQPresyervation of Information, Co�u/ lCation to BonUhol(jerU . • 0 . 0 0 6 1 1 , • . . / : , . . . 0 1• 0 .1 ` 45 All "k ti 6,666 t. 66,,66 . . .. • ., ► page (y � 78 . rt 6 V aV 41 VV a . \� s Proceeds Trustee 47 J TION 79 . Annual, Audit . , . Y . , . , , , . 47 k 1^ SECTION 710 Cash Flow.Statem nts Y . . Y . . , «'. . . ,.Y « Y . Y Y 4 • • • • . • • . • . Y • • Y Y . . . 47 67MON 711. Rights Under the Lender Loan Documents . , . « . . . . .. . . . . . . . . . . 0 o 48 I S"jTON 712, Possess ton' and inspection of Vender Loan Documents„ . .. 6666 , . 48 SECTION V3. Possession of LeA.-ller Liam Collateral ; Administration of Lender Low 6666 . , . , . . « . . , , :Y , 66 : 66 . . « . . , , Y Y , .Y Y Y Y 6666 Y ,6666 48 k 5 r SECTION 714. Rights Under Regulatory Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 49 Y . Y . . . , • . . . . , • , • Y�. 1J . , . . . • Y SF,c,`T�QN 715. 'Rights Under Deed ReStrietions . . , 49 ARTICCY, VITI DEFAULT PROVTSLONS AND RELIES OF TRUSTFE AND BONDHOLDERS 89311710N 801. Desn ,aunts Events of Default ' . . , . , . :' 49 SECTION 802. Acceleration . . : 51 S�E�C�}7`X(Q�N� 5y0 Remedies;ie�sY;�]�Riights of Bondnholpd�ers . 6 . 6 6 6 , c . . . . .: . . . . . . 0 6 6 6 6 1 ;• �'SECTIO.N 804. Right, of Bondholders" to. Direct Proceedings„ . . . 6 , .-. , . • . . . . , • 5�2 S�.`ITON 805. : Application or moneys , o o Y . . Y : Y 52 SECPION'1866. ' R&vdies Vested. In Trustee 666 :6 , , . « . . . : . . . . . ,:. . . . . . 53 S�Ej�fo�N� 8y�0a17. '�?,,y��tyB��Yand �,YRzmediea'�+r ilondhOldet�A 6 : 666 . , . . . . . .•. . . . . . : � . . .`, 53 682VOl• 808. .. Termination or,Proceed s . .Y . . Y . . 6 0 Y Y , .'o . . Y : « :f . . Y Y . 6 . . Y Y . 54 . ` ' ' . 54 S� ION 809. Of Events of Default . , . . . : . , . . . . . . . . . . . . . : . . . . . . . ' ARTICLE IY, �. ` ' TFIE TRUSTEE • 6 E SEXY" ON g61. Acceptance of the Tristo , , . ,' . . , . . « 666 : 6 , . 54 SECTION 902: Corporate Trustee RegUimd; Eligibility 57 "SECTION. 903. Fees,. Charges and Ekpenses of Trustee and Paying Agent: . . . , . 58. SECTION' 904 Notice',to Sondl-oldsrs if Default Occurs . . . . . . . . . . . : . . . . . 58 SECTION 56�. ` Interventlgn by Trustee .. . « 0060 . « . , . SECTION' 906. Suc Teor Jlustee 59 { SECTION 9070 resignation by the Trustee . , . . . . . . . . . . . , . . . . . . . . . , « „ � . , 59 SECTION 908, Removal of the 'Trustee f « , , . . . 6666 .: , „ . , , , , « 6'6,66 , . . 59 ' SF.CMN 909, Appointment of Successor 'Trustee . , . , . . 59 SECMW 910. Concerning any Successor Trustees « 666 « 6 . . 60 " SECTION 911. P"ignati(xl and Suceession'of Paying Agents; Agreement' [ With Paying Agent , , , , 0. , , , I� , I . I . , , , , Y , ., . , , , ,'.1 Y . • , 1 � « , „ , : , "OQ 1. SEEMON 912. Appointment or Co—Trustee , , Y . , , . Y , . . 61 ' 62 ;�:CI`IbN 913. `Trustee protected in Relying Upon Resolution, Etc . 6666 , ., ; SECTION 914. Sucapasor Trustee as the Trustee of the Funds and Accounts., i . Paying Agent and Band Registrar. , . « , , , , , ; , , , , , , , , , , , , , , ., . 6?_ �II f 1 ,�F Ki' :R. ' . .n tr<Y ��,v:1.'9� a.lti+$.riai% tr, •iJ f dc4_ ,1 i` �� ,S° ."4 r,'f L _ r I ARTICLIS X SUPPhF1*NTAL INDWI'U*9 SECTION 10011 Supplemental Indentures" nor, Requiring Consent of ec�ndtlders� . ., . . . . . 1e . . . . . . . . . . . . . . 1 . . . . . 62 SECTION 1002; Indentures Requiring Consent of Bondholders . . . . . 63 SF..C`VION 1003. Consents to Supplemental Indentures I . . . . . . . . . ✓.`. 1 . . . .`/ . 64 ARTICLE XI AMErJO+�7 T OF LF7MOI LOW DOCI�1°4 M ' AM MOFfIC3A GE LOAN DOCJttk�L"e,`� E SECTION 11011 Amendments , Etc . , to thnler Loan and Mortgve Lawn LaocuTtetlts not Requirin Consent of°'Aoridholders , 1 . . . . 4 . 1 65 SECTION 11026 Amen-tnents, Etc 1 to, Tender LOW fke is and Mortgage Loan Docunents Requii "air, G-�rsrlY�t ofd, holders'. . . . . . • . . . " 65 SECTION 1103• RegUtrPCl Opinion of f3on , c;oE�rtsel . . , . ,.Q .: 1 r :. • • • • , • 66 kmCv f SECTION 1201. . Defeasance i • • I . Ire 1 . 411/ fel . i1 . 1 / • 11 ♦ • . . . Ii 1 / 1 / r• 6 0 0 Ire . • . / . 1 66' 3 I� 1. AFTICLE XI , a ►dYSCEL11Af'�7(N!S SECTION 1301: Consents, Etc. , of Bondholders . . . . . Y . . . • . . . I . : . I . II : . rIr ... 69 S��-MLl N 13`x?• +.! 01tatiOn Of 11J� his . � . . Y . , . . . . . . 1:. . , . : . . . . . I • 1 Y1 4�01 . 4 0 1 : Y airlClr i l�,Oe S}�ent rablItty . / { 1 1 . . 1 : . . . . . 1 . / . . . . . . . . . . . . . . . . . . 1 ``, . . 70 ". SEC'=N iJO • Notices `• . { . • 1f y • / • 461f 1,1.�..1�.�gq11 Y1 . • . . :..• Y / 41 Y i 1I . 1 / • ! 19 • Y.. • . • . 11 O SECTION 13054 Payments Due art Sundays and Rolidays . 11 / 1 / IY . . / I 9 11 70 J CTION 1307• Applicable La • . / . . . 1 / . . . . . . . ... Y . 1 0 4 4 1 0 0 0 4 . . • . 1 1 1 . . e . :PY � 7�i1 . . .� 1 / . , . . 1 . / 1 , 71. ' SECTION 106 Counter trts 1 . . . . . . . . . . 1 . . . 11 . . 4411 . . . 11 . . . . . 1 . . . p SECTION 1$081 Captions 71 , ����.�/�1'�}�� /�►} 1 p /f.1 . •(... I I . Y . . f . I r 1 . . i . e . / 1 y.,• • • r e •.. . • • r 1 . • 1 / 1 • • 4444 . 1 ♦ � __'_�i•n7 .L.309.. Caleglation o+ Interest . . . 4:. 0 1 0 . . 4,1 , . . , , . • . 1 . 1 . . . . . ,.1 . Y . . . . ' 7 3FxJ'TION 1310. Cbmplianee Certificates and Opinions 1 . 1 . 14 . . 1 . . 1 SECTION 1311,*311 �j ('bnfliet'With 'I`.vst Indenture Act of 1939# # * 11 • • . • . . e • 14 : • 7/1� S1, IyGryIIA( 1pW P`1ME I r . 1 1 • 1 4 4 4'4 1 . . 1 . 1 1 ! . { e . 1 • 1 . e J 1 1 . . . 1. • • 1 • • 1 1 • / . 1.. 1 . . 1 1 1 1 1 x • . • 7` y t&ARX.. PAGE . . , : ./ . . 1.. 1111 . 1 / . . . . . . 11 • . 111 . 1 •1 / 111411 Y . . . . . . . . e , . . . . . 1 ,. 73 , 3 E r: , VA E THIS CNDF.NIi)RF OF ''MUST, dated as of October 1, 19$10 between the DEAN COUNTY HOUSING FINANCE CORPORAMbN, a public, nonprofit corporation duly crated, organized and existing under the .laws of' .the State of Texas, as` 71rustee, a corporation duly organized, existing and author- y ized to accept and execute trusts of the character herein set out under the laws of the ,UmiEed States of America, with its principal corporate trust office located in r'brt ',forth, Texas; RECITALS: 'rtHFfiFA$, thy) Issuer has been created ;IrA organized rg p�trsuiArrt to and 'in accordance with the p;"ovisions of the iexa^ ,tl'i'5 .rgr Finance Corporations !Acts rrtirle 126917, Varnen's Tbxas' Civil *dtutes," '�3s amgnded, for the purpose of pro- `viding a means of rift ing the cO'sts af, residential ownership amid development that will proviso decent, sA1°s and , a;;�t.;1r,� horsing for pit: rns 'of low and moderate income at pricea or rentals they csh afford; and IVE�igAS, the Act authorizes tc`te Issuer: '(a)` to •;+take 16Ms to any person to provide Cinanolrrg Cor resiriential developments 10cs,t?r1 rrf ,.hin Denton County, 'texas, and: intended to be occOpiod; subatantial'ly' (at least` 40 perderrt) by ;persons of low and moderate income, as determined by the� Zssuer; (b') to issue its revenue bonds', Cor, the purpose of obtaining mnys W me suo ) �M � p ro,hv � de Lt>ano- ing, to establish necessary rese.+ve. fund s artd to,`py a.dndti `tttl�atttl4'' c;S stg F' costs incur r attd cttik�er ri !rt Cpnneotion with; t} , issua ae, ofu+,Yiortc�:f; j7and. 1);;to..jS� Clge, ti l or , part 'dP the' revenues; receipts or .re to 6es er, + ' �t 1 '' a i�o�udi►)ggtN%r,, revgnues and receipts 'to received,, by the,rssr�er' i"rt of �o �•Q�.1dn leans, and to mortge," pledge or grant s�Clity raters",o Ir. ;''t�uaht ', (arts +� � s� r`3 )r o'tl , property 'ot� the Issuer in order to share the par imt of ;thecp�lino tt : or, '-rfede Price of and interest on such bonds; 3nc4 tJH ',Rr^AS the Issuer has heeeto,forl�J da':tlermined iib s',;tdpt; ertd Aliateralized Loans-to-Lenders Aiultt�Fami1' :vill make co�,laterai �zcsd loans'�`to lendi irtstStl'�tions 'ty> >gjW Ala' a ibh leni�ing) ins't.t ks tutions to make Mort, , e loana`' to r�'vide finant,: r� ti'iy r4si� ,en� ga3 p £or ,hAti�ti- far n 'ial �evelnOeMts ;,00ate9 within the County, to be od` p. I u red surstaittial,ly (at tat. 9r)9e') by persons of •low and Modarate income, as deverm.l.nel by 'ttie L, suer; anj tr? � f Occupied f partially (at 'j�.east 20;x) ' by lower.inc*re parsons' within thili misAti r;,g o£ Se'oti�an 3. 167(!c) (3) (8) of, the Xxttetfital Revenue,Code of 1954, as at+ende<9 al's p+irpoae", or asslati t'or 'pubIioJ + p°rsons of ldw and moderate inenme; wi1,hlr; th,a Coup*Y to obtain 9enent, safe and sanitary housing at rentals trey can afford; 'And• E 'rJ ASS the 1�rard of Directors or the Issuer has nY�ire`ssly date'rrnined and neNiby confirms that the-issuance of the Bands and the i..• lementrrtion of'.the Program will;, aeocxnp ish a,'valid public purpose of the Issuer by aslistf, !' moderrate income in the County in obtaining deoent'; safe and saral�taryrho�rsirg,1t11eeby r ,I + 6 .,4 ..,, 41 I . 4 , F P helping to eliminate stuns and blighted areas, ;to relieve unemployment and depressed economic conditions in the hone fsonstruotion industry,' to expand the tax base of the N State 'of 'axas, the County and other political sitbdivisiono, and , to reduce public expenditures for crime prevention and control, public health, welfare and safety and { . . for other purposes; and SJMRF.AS 'the Issuer desires to issue sell and deliver its Collateralized 'Loans-to-lenders Housing Revenue Bonds, Series IOTA, in the aggregate principal { amount, of $ , ' to obtain moneys to carry out the Progr2m, ' to establish certain re9erves or t eenefit •of the holders of the Bonds, and to pay the costs issuing the Fords, all under and in accordance with the Constitution' and laws kL of the State of Tbxas ; and 1 9 ry ' Wl tk�1AS, in order to implement the Program, the Issuer• has homtofore entered into. a Lender Loan Agreement with I each of several qualifigd leinding � institutions pursuant to which the, Issuer has ,geed to make, ind :each Lender, has �a geed to accept, a loan to eiiAble each Lender. to .vako mortgage loans to.provide r financing for 4ua2lfying multifamily residential, develo Lender. is Go be collat4rali2ad b pments, which laPn to each y goyevrtwnt seauritiea or mortgage loans as set forth in such Tlender Loan Agreement; arxi r • ' 'SAS in order to im lenient the P p, Agreement .withtibankl3NuRr ar9 theEtafQt4e u `. tired Into , COilateral Purohase , xstee tint 4 for the purcbdse 'by the, Bank at the . o tion of the Trustee if necessar portions of the collateral for the tAnder ;Loans; and ' Y, of certain WHOD� AS, the execution and delivery or this 'Went,are and the issitactce and sale ot�" the Bonds Lhave been in all respects duly and validly authorized bye written resolution duly adopted by the Board of Directors of the Issuer; and d � �JtiIREAS, the Coupon Bonds, the interest coupons to" ce attached to the Coupon Worlds •ard the i4^ustaa' 's cert.iCiCats pf. authentication to be endorsed thereon) are all to be in substantially the Pollowir* forms, with necessary and appropriate variations, otnissions and insertions as permitted or eequired' by this Indenture, , to wits ii •, I : i 1� { n ryy , .. .,.o• .,,. ..;. .... .... . .. ...r. ,,. }. '-.,. ,r, t ,• ' .. •. _ >iC '.'i N. ..1 v.7i St7 'rr3ti.+dti .Yiatny i r is y r; [FORM OF COUPON P00] $5,000 No. i UNITNT SrATFJS OF A14ERICA 1 STATE OR TEXAS r ; DEIMN COUNTY OUSINO FINANCE CORPOEUTIUN COLLATERA ,ZZFD LOANS-TO-LIMERS RoUS1P1G Ftf,�VTIUE: BOND 1 IiMIKS 1981A r The Denton Cotrttty Housing f jirrance Corporation ('tihe "Issuer") , a public r nprorlt rorpOracion du1Y created, o�ganiZ(2-d and exi"stihi, under the :Laws of the State of T8kas, for value 'received, hereby prorni6es to pay' (bu!. only out of the source hereinaftev provided) to bearer, or if tha bond be r'''BisteredI to the r*egis- terled holder tiareoC on October ;1 1 1 unl.ecs ' ' 91�, this bond ?snail 'have peen o4 led for r^eiernptlott and payment of the redemptl,on .prfoe shall have"'t�eeh duly die or 'provided for; upon 'presentation and surrerrdeO Hereof, the principals sum Of ,Rivg,.'11�ousanc ! . oliars 05,000) arxi to pay b'o bearer ;u * preaantation' and surrender. of the attached coupons representing iriterl3st' sa tine dame respectively fall due (but cinly out of the k s4urGe hereirsafSum froV 't Interest, thereon from the date hereof en the' balarlc of said 'prin`diaa t surA from 'Gime to 'time rimainitig unpaid at tfle rate of ( per annum, payabie on :,lpr'il 1',�and Octpber 1 of each year commencing r,'cent Api'ii 1, 19132, until payment in'`uit of such principal aum and to pay Interest aj� f ove",due oriribipal and, to the extent permitted by law, on overdue interest at the L f x 'per annum, except All the provisions hereinafter set forth with resp�ct trJ 'edf3Mption prtot+ to maturity may became "applic0le hereto; principal of ' if tnyi and intereot' on this bond kbe , prertti(�m i►�g'' p8yabA in lawful nione of the 'CJnited States of ? rica at ;therine.ipal corpgrae trust office of Qr� in the 'Cit, of ' Texas, as trustee, or Its successor in trust (httE� "Tr�istHe!�), or, at the opGLOn ol', the holder hereof at the principal corporate trhr.It Office of Citibank, �J,,q, in tho City of %w York, �tfewl York, as paying agent, F or, any successor paying agent. r ' 'Th2s bond is one ,of an AuthS'rized issue of bonds limited Ln ��!ipal amount to "$ t e to . p 1 ( the "bonds") issued pursuant to a r.0 jution duly ad,a �tesl by tha , Board of i7lrrnators of the Issuer en , a. Al, " and the ttppli� cabJ.e provi3iorlo of the Texas Housing Kl1 tice Corporat ��r�,�t Article' 126g1�7 , : ' 1; �J9ri 'an'9 ' Taxas .Ci(jil St.�utes'; as amenOer) ' (tP7e '(Ac t") ,� and eatecuted' un�9er an Tnclen- ure of 'dust. the ",indenture") dated as`:'oe October ] 1��1 ' bet�reen the issuer and ?fr the �'rUStee, i'or. 'che purpose ;of (1) obtaining funds %to Carry out the Issuer's ` '"oLJatere 1.1 , Sens-to-Leviers �1ti�Fam.ily 14'ousing Program (the` ('Program") under � wh c;h the Issuer has m�c9e collateralived loans 41h4 "bender Loans" ) to various ,4 it 1 -3- u � X11 iti.rr .l i ♦ l . r. 1;4.i i S/ i; lending instituttons}'( the !'Lenders'f) to enable the Lenders' to make mortgage loans (the Mort � . Gage Loans ) to provide construction and � permanent financing to the ow;iers (the "Owners") of multi-family, rental residential develoVtteenrtis (the "Develop- t ments") tO be located within Denton County, Texas (the "County") , to be occupied substantial) (at least, 90%) b Y 9 y persons of low and moderate income, as determined by , the ISSWr, and to be occupied partially (at least 20 %) byy individuals of ► _ow ar moderata income within the meaning of 5eption 167(k) (3)(8) ' of the Internal { ievenue 000 .6f 1954, as amended; (2) establishing certain reserves for. the benefit` Of the holders of the Bonds; and (3) paying certain costs incurred in connection with the 'issuance of the Bonds. The Issuer has made the Lender' Loans _pursuant to arnotdin lee er ,loatthand security documents (the "Lender Loan Documents") by and ; Trustee and the Lenders , and the Lenders will make the Mort.,t gage Loans pursuant to certain mortgage loan and seduri,ty dmujrents (together with s regwatory agreements and the deed restrictions mentioned below, the. "Mortgage Loan Documents") by and between the Lenders and the Owners: In a6dition, the Owners ° will enter into :certain regulatory agreements with the Issuer arid.-the Trustee and ; will record certain deed restrictions setting forth certain ;proVisions relating to E thn acquisition eonste�lctiot and ;operation of the Develapmenta, Reference i& t herby merle to , re Indenture the Lender Loan Dooj.enents and the Mortgage Loan 3 Doc"umenta, obpi'es of %rhieh are 'ori file with the Trustee; for >he provisions, others,. frith rt~'spect to the nature Md ..extent of the ric;hta .�3utles and obligations of the 'issuer; the Trustee, the' mangers the Cwrters and the holders of the Botts and coupons appertaining thereto; the terms Upon .which the i3onds' am issued socured; -the collection and disposition or' revenues; a desoriptibn' of the properties and interests pledged; the modification or amendment of the Indenture, the' Lender j Loan Documents and tne 'Mort a Loan, Documents and other matters to all of which f the owner or holder of this Bond an , pons. pP assent's' and the .interest sou ms appurtenant hereto by the acceptance of this Bond or 'sueh cola The Fonds and any coupons appurtenant thereto are secured by ; '(i) an t assi gmrent and pl&dgs of the revenues and other amottnf,0 received by the Issuer, from or In , epnnection with the Program and the Lender Loans, ' tneludtng .any amounts -obtained through the erercise of the rMCNIies provided upon an event o£ orault under the Lender C,oan Dooliments; and, ( ii) a pledge o£ the moneys held in the funds and accounts established under the Indenture, together with Investment earnings thoreon; except for investment earnings being held for Lendet+s, The Bonds are ! , ligations of_ the Issuer �� ob payable solely from the revenues; funds;:aM Assets of the Issuer pledged under the Indenture and not from any other revenues, funds or asaats of the Issuer. The 'Mortgage Loans are not Pledged as security for the Bonds. This Fond and the series of which it forms a part is a limited obligation ` of the Issuer givipq rise to no >ecuniary `liability of the Issuer nor any charge 4+ �, _ s n y ry t o. r; x against its general credit is hertsof against only sayable solely from and a valataim of the holde y the revenues, funds. and assety: of the issuer pledged under . ' Yrtdenture, does not constitute moral obligation or e pledge or loan rap liability, general, sbseial;or the within the mean of the faith or credit or taxi " r any constitute' uzal or s stutor tower, i or of the State of Texas or any pcs'. E . � Y provision, of the County, Cotmty nor the State of,qbxas nor. ° subdivision thereof, arld neither the, a liable heron political subdivision thereof, shall be and in no event shag this Bond. or ,the " Which it forms a cart be t?aYable ottt of Bonds of the series of I Pledged under the be Pa any funds or 1 properties than 'those 7h11 Bond And appurtenant: coupons are fu �. by deliver fully negotiable and shall pass Y, but this Bond !may be registered as to r r b< oks of the Isau(ir rat the pririai 1 eo Principal on the registration orid Registrar, subJect to }ri rporate trust oft ice of the Trustee, ay rereof'at such office o>" -the indenture f ce and payment o.f the charges py2ded" , upon presentation Bond tibn of su}h registration endor d Bon no Y thereafteW be endorsed hereon t,y the BondtRe 1,9trarur " I registered owner transfprr�ed t>h ouch bd; k$ at the written , and this i 33ke °r` b his quest;of tt�e , n mariner a 'dorsed oautharized attorWy, evidence' of such tr'arts,t'er to ' tra+� 'er`a4111t `b 8uW trine',fer r. be` y . 3+ d�SliverY �t4ll be restored i';sub �Y to bearer, and, 'thereby t regi'atratitlha atrci transfers as before;. ' Jept, t>awever, 'ta guocessive urileas; r'eglstered to darer The prna! s � pal of this gong, if registered registered owrbr, or hxg 1 ' be payable only to,or upon the `order of the ' pe, Mid only dn,' re e ntative. , intenest aaoruing can this `Bond will p actuation and stvgjsder �of' the attached .interest cou they r�spc�atively become due.. . t �; glstr'aticn of this Bond as to print o as � af4"esaid will not affect the sferabillt;l by delivery or suoh cot as Mons, The Fonda are issuable ae coupon Bonds, registrable.'as to orhly, in the denomination of $5,0t!� and as -register�ea the denomination of $5;000 and + Bands without eouo in 1 liniLtations and l ,/ integral MUltihle ,thereof# Subject to the Lends without ceup� sPaYment of the charges provided in the Indenture oa.loon Bonds bu ' be exchanged ear a like .� , registered sting all Unnatured oo,rpons (anc� an regate orincipal amount of far 'a ized aggregate Principal a Y matured Coupons' in default) 'or authorized denominations, � coupon of registered Bonds without coupons of other matured ao,a and-ao�apon Chang rorng All unmatured coupons Po" 1n default) may be exchanged for a like a (and any of' regiatered gongs without coupons of authorized denaninians�e Principal 1 amoutt t Tfie Bonds shall, be subject to mandatory part (in ipy inmount multiple;of $5,000) on OctoberiI,Pl98u AS the (a) !n the ere em i amount of the ends $o 'called' ror redemption, t�} the redemption ?late, in the+ event 'ar7d to the extent that a price equal to Niue ,�cc road interest y tncierr Loan is u t I i r { r .5_ rSi: . n { a t � E s r ; fz , x 3, prepaid ,because funds were .riot advanced b�I such Lender to An Owner pursuant to a Mort e taan prior to At>gust 1, 1984; {b) in' part ( in any integral suLtiple of $5 060) on any interest p�tymv date, at a price equal to the prineipaL amount of g the NQnds so oalked far rede�,a,�Uon, pl.us accrued interest t4 the u redemption 01roon date, . > . in the event and to the 'axtei." that any Fender Loan ifl prepaid under ,oireuay*hces under which the Lender uman txceu�nts de not requi��e the payment of a Pr epayrnAnt �� multiple of $5,000) On any irlterost' payment � penalty; ( c) in pact' ( in any .i.,tegral date, -at a price equal to the prinoipal amount of the Fonds so called for, ' plus the pramium set forth' in the following paragraph (,expressed as: a perCentage of the principa]. 'amourtt of the' t3.onds ' sa called for red mption) , 'any Lerai e'ruL,oa i is pre: � to .the ;r°demptidn date, in the event and td tte extent that any PA under ctrcwAtances under which the Lender �h Documents require peyrnant t and (d) in who on';any date, at 'a price equal to the of a prQpayment Y� plus accrued' interest to >the redemption ?late; in the event roriricipal amount th, "reof, p that .the aggro amotimt on deposit in the Debt Service Fund, the theiprincipalVe F1an,j 'and the Revenue Fund under the Indenture is suffioient to pay of arid interest on all B)rxis that remain outstanding on such date. P ' Vie` ;3ortds maturing on or after Ootober 1, 19, - shall be subject to re9emption on October 1, '19 , or on any interest payment date thereafter, at the option .:of t?tg Issuer, . �n whaoT or in part from moneys derived from the proceeds of s of the Issuer or from any other source, at a price srfy issue of refunding bond. ii i equal to set principal amount of "tile Bonds so called for rederttptiotl; plus the i t of the, principal PM rni�.atl set forth in .the tAble belo,l (express ed as :a percentage tj s►nbunt of the"Honda so called for redemption) , plus accrued Lnterest do the re j&Vtion date: E" Redemption Redemption i < pr d= Dates - Cctober 1, 19 and 19 F � i i j ,1 !I ti(.". ` s X t I f , Notice or each such redemption shall be given by Publication at least one (►,,) time in a newspaper or financial of general circulation in each of the' City of Fort Worth, texas and the City of New York, New,York, -not more than sixty (60) 'arid not less than thirty (30) days prior to the redemption date, and', r . If any of the Bonds to be -redeemed in whole or in pd`rt are registered as to princi- '+ pa.i or are fully registered, by sending such notice,' by registered or certified mail, not more than sixty (6A,) and not less than thirty l30} days prior .to' t he date fixed for redemption, to the registered owner 'of each Bond to be redeemed fn whole or in pert at the address shown on the registration books, and 'to such holders of coupon Bonds to be redeemed who have requested that the Trustee plane f their names on a list of Bondholders under the provisions of the Indenture at the Addresses shown on such list; provided, however, if notice is published as aforesaid, neither a, failure to give notice by snail nor any defeat in any notice so mailed , shall affect the validity of the proceedings for such vedemption. If all of the >nds to be redeemed in whole or in part are at that time registered as to principal (except to bearer) or fully registered.- notice by mailing given 'as aforesaid shall ' be suf£lcient .and � ablished notice of the call for redemption need not be given. Ail Ponds ar, portions thereof so called for redemption will cease to bear 'interest � on the saecified' r♦edemotiOn date provided funds for their redemption are or�,:d3tx+sit at, the principal place of pa$wht :at that time: If, because o£ the teinpora y ar pernarient suspension ;of the publipatioh or general circulation of any newsp per or It financial ,}b i mal or for arty' other reason, f: ,is impossible or impractioai �tb` publish :such notice .o£ Call for redemption in the manner herein provided, .theh such publioation in 'lieu thereof as shall be determined by the ' rustee sha11 cot'�stftute a i fiaient publication of< nbtice� ; IfLiessIthan all of the 9onds are to be redeemed, the particular Ponds s to be redeemed shall be selected as provided in the Indenture. k ! No recourse shall be had for the payment of the principal, at, prenfum, J if an Y, or interest on any of the 'Bonds or for any claim based thereon or upon any { obligatl(m, covenant or agreement in the Tndenture contained, against arty past, present or future member, director, officer, employee or anent of the Dauer, 60 f through the Issuer, or any successor corporation, under any rule of law or equity, statute or constitution or by the enforcement of any, assessment or penalty or otnerwise, .and all such liability of any such 'member, director, pr icer, ,employee or agent as such is 'hereby expressly 'waived and released as a condition of and in consideration for the execution of the Indenture and the` issuance,of any of the Bonds. i E � , -7� C ,. .\4h5 .. :: t ' i .,,......., ( ry -hi. .♦ -. ,,.. . .. ..., �::.. ♦:.i:a . , e &; l. :SFh ..\ ii.Jl�lif:,l.'x. i4 }. Y The holder, of this Rond shall have no right to enforce the provisions of the' Tndenture or to institute action to enrorce the covenants therein, or to take S Prcy action with respect to •any event of default under, the Indenture, or- 'to institute, , appear i-n or defend any suit or other proceedings with respect thereto, except, As provided in the Indenture. ' If an Event of Default as defined in the Indenture occurs, the principal of all Bonds then outstanding issued under the Tjuenturp may be declare(iAt1'. and payabie• upon the conditions and in the mariner and wz¢oh the 1 effect prMided' in the Indenture. The Issuer, the Trustee, any r.ayljy, agent and qny agent n.' the Isliuer or, the Trustee may treat the bearer or this d, or If this Boi,d is res6istered as herein authorized, the person in whose name it is mjilstered, and •the;bGarar of ' may. coupon appert»ining hereto, as the o�r�er hereof and the�'eof for tho purpose r44ce ving paymAnt as herein and therein provid6d �And tot, all other purposes, whet'ner or. r;t this Bond or such coupon be overdue, Md neither the Issuer, ti:e ' TrusteA, an; haying. agent not' any such alter; ' shell be affinted by notice to the contrary, � a t "Ihe Indenture prescribes the mannar in which_it may bed schtrgod, irielud- tng A provision that the Bonds shall be 'deemed to� be paid if tlovernment Obligations, as der rein, maturing as to principal and interest in such art64nte and..et . such tilrids As will be suoh a$ to insure the 'availability of sufficient mer)eys to } PO the principal ot, prldaium if any, and interest on the Bonds and all necess'ry and proper fees compensation and dxpenses of the •'Trustee and arty paying 'agent have bon, depbated with the' 'Trustee; aftzr whi>,;h the Bonds shall. no longer be t %! secured by -or entitled to the benefits of the 1"ndentut"e, except for the purposes F of r°gistration and exchange of Bwuds. and of such pa ymenL. Modifieatione of alterations of the Indenture, be of any supplement's thereto, may be made only to the extent and ir! the circumstances permitted 'by the i y, , ,T'ricienture ATT IS gFRFAX 'MTIFEED3 RFCIVD 'kND DMI ARM that all acts :end conditions required to be perfom. ed precedent to and in the execution and delivery of thca } 'Indenture and the issuance AX, this Bond have been performed in due tf.me,';fom .I.nti manner as required by law; and that , issuance of this Bond and the series of � svhieh it corms apart does not $xced or violate any constitutional or staf(jWcAy limitation. r 'This Bond acid the cop ns a po ppertAining hereto shall not be valid or , become obligatory for any purpose or be entitled to any .security or benefit.,under the Indenture until the certificate of authentication hereon shall have b�An duly I ` executed by the 'Trustee. E � E i t J `f,,. '•1 f.Y.' '+'7: .yr.,t e, .r r a�4 °J , n,iat ry „ ... ., .. .. tit. \` , .zl i L .+N9lP2:v �i Sir : r IN WY'rTlr":gS� WHk �', ` the Dento+� Couf t�� t iisii F`t a�9 .Corpora ot� caused thin Bo'td to be" ekko w 1,n its 'ne,ne ay tyke print CaC iatile. ai �i!a'e . ; or 1ft� PrAsld n� arty atte$ted ,i�y:the:,Printed t'acs'imtie„si�riature �P "itd Seatetary, i Arid "the, £aciinils of its 4crporaGe seal to be itrspressed' or .iinprnte¢. tiereon, aiyd i Y; has caused the interest" coupons attached her�3to to be executed b�+ the printed { .;r C facsimile st�natuc�es Cf said 6fficers, all as of this first day of,f`-tcber, 1981.. ' 1 p DE'K" COUN'T'Y HOUSING FINANCE CORPOJ AmION gy (£aosimixe) � f Preai ent , *�r LrJal ; 4 f 4 (facsiile _ �; Secrergry , [FACSI44ILE SRAL) [ 'GR"4 of .` ?�JST rE'S CE�2'I'tFICATE OF A�'I'E��ITICATX� N) z -his F)ond is one of the Bonds desdr11 d in the within�nentioned. �ndentuie of T ist. Am Trustee � JAuthorized dff'icPr� 1 „ l: f : 1 „ i r CFURN `Op IN7", FX C000N) ! NO _ i! On the first day of $ i CarooratiOn (unless the bond to tTiis eaupot�ta� Denton Count called for previous redem ti y`H°using Finance A oh and pPe twins` shall have been duly Made or provided for? , will of the redemption price shall have been tore,. solely fran the source refer bearer, sub,Jeet to the I surrender of this c�u Provisions of the Inden., Pon At the red to in said Fbtxi u principal cor � presentation and [. successor i in the 0icy of porate trust office of.� n t!^ust' or, at the option of 'lbxas, as ate troast o ffice of Citibank N he hold" hereof, �ustee or its I ent or .A. , in the City of , at the. principal corpora bet set annual successor 'paying agent' the Y New York, New York, as payi ! ! n8 Annual interest then due ' amount shown hereon, as provided in Revenue Bonds, Series i98iA n on its CollateraltZM aM , !.pnbered tests-tb-Lenders Rousing 1 1 (faesi,�le)d . presient -------�.. � ;, (facsimile) PROVISION FOR RMISTfATION � e Ki'thin Rorid rr»ply be r Ot by the AD �istered . in the name of the tt nd R4g strgr•;`as her,aon b to principal onl older on books shall 'bgy the Bond Registrar in the registration Y, such registration be( a h, noted valid' unless made on said bosattherequestbofothe�eer Which no transfer, attorney, duly authorized blank below. but it m ' such transfer 1.s similarly noted ingist red owner or ! kearer after may be discharged from registration by being egistratiaj r Nhich it shal'1 be transferable by daliver "0 transferred to registered as beforw, Y, but it lr.7y .tie ' the registration .of this ,9ond as to print sha, ` in i restrain the negotiability of, the coo Puna by delivery- Date I not" o; Name of f?e�= ration Registered SI -----_.__ armer grtatitre of Bond Registrar j -- Ir A _10- i x WHEREAS, the Fully Registered Bonds, the Trustee'"s ae, tication to be endorsed thereon and the .t`a �tif ¢ate of authen- " Bonds 'Qre to be in substantially the followiing£ o rrgsi, 4rith nec�ssara and a rough f turevariations, aniss on and insertions ''as per Tnitted ox/ required' by this Inde, lure, o wit., (Form of, Fu.l !y Regi tered Bond) the Fbnn of the ftu 'Registered , y Bond shall be ;identiCAI with the`,�`oC1ri Of the Coupon Bond '.. ., ; that the heading and the. flrst fifth, seY9ntaenth� O eighteenth paragraphs and the" form""of interest cou A Bond shall be omitted, and .there shall, be �substitgt� in the form o£ the � 1py r Registered Pond in lieu of the head i Bond the follor�g' heading and ir�g' and corresponding paragraphs of the coupon # paragraphs: t [the following heads ng ad paragraph to ! ba inserted to replace the heading and first paragraph of the Coupon Bond form] No. R.' t UNITED STATES of AMICA S*rAT,'-, OF TEXAS k UEN'IOK COUNTY NOUSjW FINANCE CORPORATION COLLATERALIZED WX15-TO­L8XDKtS 14XSI.Np REVENUE Bpi} SERIES i931A The Denton Count Yousin F'ir,, u Y 4 ante CorporatiOn .(the Xssi.ieru) a rntfylie, nonprofit corpGrat.ion' duly created, organized and ex sting under *he laws or the , State of '�xas,, for value received, hereby promises to source hereinafter provided) to fY (but only out of the October i, lg , unless this bond sha31 nave been called registered and n of the. redemp`�tion price shall have been duly made or provided for u and surrender hereof, the prinoipal si�:n of , pon presentation j {b�lt, only; out "01' the source hereinafter;pravided Dollars ) and for principal sttn fr-OM tine to time remaining unpaid from the of said next preceding the date "of regi$tration :arid authentication.'af this bond)� �,`4tllate this bond is registered and authenticated as oC .�tt interest ss { event this bond shall rear interest frrxn such interest "ent gate, in which • bond is" registered � i authenticated prior to April 1, 19�entndwhiohoev e$a this eventt ` his N ; 1 -11- i i•�E/•?°.. nu. A Ir'r;i+k7 =R.;Rra .,}`i a A Y [ bond shall bear interest f ti^ its date,. or unless, as shown by the recbr4ds of 1 the hereinafter r,ePerrod to Trustee, interest on the here rtaf r Bonds shall be ' in default; .in Which event this bond shall' beatittterestefr�om' t 1 date to whi,eh interest ha' been paid in he k bean id flail; or unless too interest shFtll have bear interest from its date at the t`ate o£ ' :'this bond shall , ' rc on the hereinafter refot'red to Bonds in which event' Annum, payable on April 1 and ootober l of each ar, Per cent ( %) per, € such principal sum and to l�yment n Pull of } per prin b law M interest ott overdue rind 3 Y , on overdue interest at the p ands to the extent the provisions hereinafter set .forth with respect to m% per P",a r to s It ab• f . t may 'fcane applieablA hereto, principal oP , this born be , premium iP an unity g payable in ,lawhtl' mone Y, and; #merest on I principal corporate of the United States Of 4mRrica at the Z city of gate trust offioe of 'Ixas, as trustee, or, its successor intrust (the �_ in the Or, at the option of he holder hereof must. ) , of Citibank, N.A. , at the principal Corporate trust office in the City Of New York, New York, as paying a4;eht, or of art successor paying agent; provided, however. y• S alone she Ll be t�tade to the- registered owner aorfidtshal3mbiearin tai t trtt crest draft M84-led to such registered owner hereof at his a dt^ess as it ad by' check or, registration books of' the Issuer or at such other addres;� is ppears on the Writing 'by such r�eggstered o CdMis wner to the Trustee as Bond Registrar, hed in bistrar. [the roilON iqg "paragraph to be inserted to replace the fifth paragraph of the Coupon Bored forma Th#a Bond i.s transferable by the rew bY, his attorney duly authorised in wr.ttiS4�ered 'owner;hereof iii person or ng at tho principal COrP,601te eras office of •the. ' +uatee but only in the .m t I A"ht, of the •cha annex, subject to the' limit tionei„artI upon rgea provided in .the Indenture and u tior or this Bond. . fJpon such' transfer. a new 'registered Bond ore asthebub � ccupons, of authorized denom k� principal amount wi#1' be tss�jedtto the tranosfFe�in'e�;�}� the se'Aaggregate Mtge here ,or. A [the following tdo paragraphs to be inserted tin replace the seventeenth and eigkoenth pat°agraphs Of the Coupon Bond Porm] This nond shall not be valid or become obl# ” ' be entitled to an Bator fur any t security or benefit under the Indenture unless anti, until the certiricate 'or authenticat#on hereon shall have been duly executed by the Trustee, I n. 1 !1 , I IN WlTN SS '�tf AFt the nt +4 1 0out'tty Housing Firw6ce Corpora,tii�n .has eausej 'this Bored to be executed in its rtsri�e bY_ the printed faosimile �iSftture of ( lts Pi sldent " attested .by the printed t` eslmile signaturr+� of its Secretary, and the t`acsimlle of its corpora seal, to be impressed or Imprinted hereon,, all as of the first clay of 39 • Dr?d'1ON WUN' Y FMSINO FINANCE CORPORATION• By„ �r ( facsimile) AT�sT President ` k 1 I Secretary , I l YET MSPULF SEAL] x ' [POfZht OF `TRUSTEE'S COMFICATS OF A(PI�tRMCATION] t This Bond is one Of the Wtvb desorlbad in the within-r!:ertlane�� .trx entiuCe; . og' Trust. t Date. of registr-ation and authentication: , 19 + as Trustee I s Y„ Authorized fr1cer f 7 C o i ! CFORN1 0P AMTt�NM&�]Tl the Call6wing abbrevi " or this oertirtcate s at ons µshe hall, bR •4' ' n 'tsed in the in�ordptlon on the P&oe accord Grlted ' s tF4ough they were` written, out `in hu11 ! to applicable Yaws 'or reKattons ; MIN Acv—' TEN CdM' .- as tenants in c E "'EN E]" -. as tenants by the entireties Custodian } y SJT ( ' , � as Ju�ht tertar'tts with r Cust s fight . Under Uniform Ins to n6 of survivorship and ,not as Minors r tenants in cow Act Additional abbravtations tea t y also' be used thou h not in 4 ' 'g the above ,list, �H V � transfers unto ALUE IgIVFD, the undersigned sells, assigns 3ncd 4 �a attd Address 'of the within Bond of the 4UrMN irrevocably 'constitite,and a po0Cint O1T HOUSING b'INNB CORPORATIrk and nd`does hereby r ► to trans er" - al '. Bond on the boos kept for ration thereof' srfth t1t11 power of substittltidn in t toted; he Premises, -. signab�re,daa�nteea ; — ----, , t t, 0 sir f appears u xtature to: this 3eai.�Lnent miagt �orrQs and wit pon''the Pace of the within Bond in ever h the name as it qr enlac ement or any change whaterver; and y particular, Without alteration `? A�, the execution 'E ?d deliver of t r`sYe been duly authorized and Y he Bonds' and of the Indenture by the xssuor all . things necessary to makcc Ehe Of the Issuer and authenticated b1 the Trustee, valid mnd_ bi e Bonds) when ex0outed ' and to 'make this In+�enturF• l a valid and binding legaii, strumon forms the security of the Bonds have bey f� RRR � fr l t i t3 i NOW, THERFSORE, MS INDENTURE OF (MUST WMESSETH: That the Issuer, in consideration of the premises, the a¢beptanoe by the Trustee of the Trust's hereby created , the purchase and"acceptance of the Bonds by ,the purchasers thereof., one dollar duly paid to. the Issuer by the Trustee at or berore the execution and delivery of these presents and of other good and valuable considerations,, the receipt of which is hereby acknowledged, and in order to secure the.= payment of the principal, of, premiwn, it any,:and interest on all Bonds out- standing hereunder from time to time, according to their tenor and effect, and to secure the observance and performance by the Issuer of all the covenants expressed or implied herein and in the Bonds , does hereby pledge and assign unto the Trustee, and unto its successors and assigns forever and does hereby grant to. it' and them a security interest in: ORANTINO CLAUSE VIRS'I' } She Lender Loans and the Lender Loan Dot ,rnents, including all 'extensions and renewals, of the term thereof, if any,' together wilii all right; title and inter- est of the, Issuer therein (except for certain rights and privileges of the Issuer thereunder) ineltift*, but; without limiting the generality of the Foregoing, the present and continuing right to receive, receipt for, collect or make claim for any or the moneys, income, revenues, issues , profits and other amounts payable or receivable thereunder, whether payable under the Lender Loan Dooments or otherwise, to bring actions and proceedings thereunder or for the enforcement thereof, and to ,io;any and all things which the Issuer or any other person is or may become' anti t lad to do under the Lender Than Documents; . ORANT'INO CLAUSE SECOND All payments to, be r _ioeived by the Issuer (except.as proyided in the p recpd ing pariagraph}.under the. Lender Moan Documents or the Collateral Purchase Agrsement, '°together with all` other 'Revenues, and alI wheys ,and peeurities h4ld 'by the,Tr.isteein any Fund Or :Account (except as set Corth herein with respect to oArtain :raneys held to the Mortgi,5e Loan Rmd) established pursuant to the terms of the t danrur id I}RAP_fl'INO C14AUSE THSRU l Any and all other Property of each nave and nature from time to time j hereafter by delivery or by writing of any kind pl.edgo or assia71ed as and for � additional security hereunder, by the Issuer or by anyone 'on its behalf or with Its written consent,, to the Trustee, which is hereby at,,thortzed to receive any and all such property at any and All times and to hold and apply the same subject } bo the terms hereof. 1 TO HAVE AND TO HOLD all and sbxulAr the Trust Fatate, whether now owned ,+ l or hereafter acquired, unto the Trustee and its respective auecessors in said . ,rusts and assigns forever! i �I } ,.� !• ?•.p sua;m .. r :r1. 1 LJ .r:;. .d `,.. 4s : ..o . . _. .a.. s fit.s. r .6, ' 3+ 5 IN TRif.ST 1VEVh.�d'i I,F$S, U the the equal and ro terms and ' truBt;Y herein ,spE forth for { p portionate benefit, security and ' rate '�n of It�ture owners 'bf the Borxis or �upons�' Ct�ortt tLne p of ' all. present and k by this It without privile �. **'A,(z+Sued under and secured otherwise o£ arty of the Bonds overanroprthe'othersEOdsUn as to the lien or f # Pft4VIDED, HC1'!�.'VEi, that if the Issuer, its successors or assigns le' I and truly pay, or cause to be paid, the princi , shad ' est and premium if' pal or the Bonds aril the inter— manner mention ' any or to become due thereon, at the tirrte�� and in the i ed in the Bonds, according to the true intent and meaning thereof, and s'nall aau9e the payment3 to be made into the Debt Service Fund as required under Artidle IV `herpof or shall provide, as permitted by:ArtiFun Xas Hereof, , for the payment thereof, and shall well and ,pe keep,the covenants end conditions +;. m p, perform and observe all t pursusliAllo the terms of this Indenture_ to;,',be kept, perfottr�ed.and observed by it; and sl�ll ' C and all Paying Agents all si s of or cause to be paid to t'he �ust�e i with the >terms and " A money due or to become due to it in accordance gra,�tted shall r, provisions hereaf,' then this Indenturre� and the rights hereby ease, determine and be void; otherwise this Indenture, to by remain in full force and affect. and PROVIDED. �It, that the Trustee agrees to accept reoetpt, su¢ject to review stated herein, of the Lender Loan 6)llateral delivered by a Lender pursuant to the• Lender Loan Agreement and; Ehe assignment to herein, and dec:arsg that it holds and will hold fot� the sole benefit of the 8and},olders such documents delivered to it as Trustee. Th Trustee hereby of the Son h approves accepts and agrees to the terms, conditions a t I Lender Loan Agreement ae they relate to it andppo tments aril apnctes of eacri' ' ;1 actions eonteinpLated thereby, The Trustee herE�b parties Lion in the ,trans steps and to record all documents instruments Y agrees to take all actions and or chntinue the Issuer's security interest inthe �nd@r 'necessary' to nerreot .Aan Col;at eral. , that 'a i F?ond issu. WI'MF.S3F;T'H, and it `,is expt�essly decl2tred, S pd and secured heretunder are to be issued, authenttca.rnd and 'eliver.�3 aid the Revenues hereby assi, md and tiledged are to be dealt with rind' disposed or under, upon and subject to the terms, conditions, stipulations, coven- ants, ,agreements, trusts uses and pu rposes as hereinafter expressed, and� the Issuer has agreed, and covenanted, and does hereby agree and covenant with the, Trustee and with the respective holders from time to time or the Bonds, as -."ollows , ARUCLE r uEI MONs SEC1174N 101 . M71NITIONS (A) For all p+irposes 'of this Indenture, excedas otherwise expressly l provIded or unless the context otherwise requires: r y P F� f f ' 1 � i 1 (1) Indenture" means' 'this thst, rVM ent as 'originally $zecuEed or as it may i'rdR; tI-He ;to time be supplemented or amended by one or more indentures 'supK+,le+perrtal hereto entered lrito Putts' art t0 the applleAtile. j provisions hereof. � 2 All ✓ere e "Articles" 1 re 9 i 5r` rZC n this Indenture to designated , �- tiona" and other subdivisions are to the designated Articles; Sections, and j other subdivisions of this Indenture, The words "herein", "hereof", "hereto", 5 1'hereby"O ,,and '11hereunder" and other words of similar import✓ mrer to this J Indenture as a whole and not to any, particular Article, Section or other i subdivision, (3) the terms defined in this Article have the meanings asslgned to `i d them In this Article, and include the plum i as well as the situ�ular. .; (4) All acc0�altlr�q terms not otherwise defined herein have the meanings assigned to them in accordance with sound accounting practices as in effect from time to time. (5) Every "request", "o ler", "demand" , "application", 'rappointalmV , � "notice", "statement", "certificate", "consent", or similar action hereunder bY the Issuer shall, 'unless the form thereof is specifically provided, be in writing signed by a duly authorized officer or agent of the .Issuer. (6) All other terms used herein which are defined in the Tender I,01M Agreement shall have the same meanings assigned them in the Lender Loan .Agree- meet unless .the context otherwise requires, r (, ) For all purposes of this Indenture, except as ptherwise expressly @! provided or, unless the Context otherwise requires ; "Aeaount", means any one or more of the separate special trust aGCOUnts created tn,,Arti,ale III hereof and shall inolude any subaccount or 9ubACCOUnt8 incl'�,ded in su¢h 3�C01$�t "Act". means the Texas H6ustng Finance Corporations Act, Article 12691-7, Vr;rnon's 'Texas Civil Statutes , as rran time to time supplemented and amended. } means Citibank N.A. � r , � 17- r � ' VA x; , ek ±. 1 .,.: n Jj, i r "Bond}' or "Bonds" means any one or more of' the bonds authorized, authenti y Bated and; delivered under this Indenture, "Bond Counsel" P'leans an attorney. at law or a firm of attorneys of nationally r-cognized standing in matters pertaining to ;he tax exempt nAture' 6f interest on bonds issued by states and tk elr political subdivisions 'duly admitted to the practice of law before the highest court of any state of the 'United States of Anerica i t6i- holder" or "holder of Bonds" or "owner of Bonds" means the bearer. s of apy Coupon Bond not registered as to principal or registered to bearer:and } the r*gistored owner of any Fully Regtst'ered Bond or of any Coupon 86nd registered as to principal (except to bearer) ,_ qhe word "holder", when used with reference ; to a '0oupon, means the bearer of such Coupon. a "Capital. Reserve Fund" means the Fund created by Section 302 hereol`. ¢' "Capital Reserve Fund Requirement" means an amount equal to $ � "'Code" means the United States Internal Revenue Code of 1954, as amended, 95 _ "Collateral Nrchase Agreement" means the Collateral Purchase Commitmer:+ Agreement among the trustee, the Issuer and the Bank dated as of October 1, 1981` with respect to the purchase by the Bank, at the option of the Trustee, of a part of the Lender Collateral under certain circumstances. it " "Collateral -Purchase Agreement Fee"' means the semiannual fee to be paid 1 to the Brink pursuant to' the Collateral Purchase Agreement. . # "Commission" means the ,Securities and Exchange C,onmiss ton. j } '"Coninitmerit" means one or more of the lender loan commitment agreements entered into by And between the Issuer and a Lender 'uAMer, the Frrogram. ".'Comttitment Fees" means the fees so designated in the Corm tmi4nts Which have. been' paid by the Lenders in accordance with the Commitments. "Cost of issuance Fund" means the Fund created by Section 302 hereof, "Counsel" means an attorney at law or a firm of attorney. (who may be an employee of or counsel to the Issuer or the Lender or the Trustee) duly admitted p: to the practice or law before the highest court of any state or the United States of America. ► "County" means Denton County, 'Mxas . 1 ► "Cou }� means of the cou'.A. 1 Pon any g issued hereunder evidencing the semi- Pon annual installnents or interest on the applicable Coupon Bond or Bonds, i f " I 2 "Coupon Sand" means any Bond authenticated and delivered with one or . more Coupons appertaining thereto. "Debt 'Service F'uxtd" means the -Rind created by Section 302 hereof. "Default" or "event or default" means an occurrence or event specified Y j in and' ;9efined by Section 801 hereof. "Deed Restrictions" means one or more of the deed restrictiohs, in sub - e the farm attached Co a Lender Loan Agreement as Exhibit I by and betxeen the Issuer and an Owner. "Delivery Date" means the date of delivery of the Binds to the Initial '. ourChaset, or piirchasers thereof in accordance with Section 210 heceor. "Development" means one or more of the multi-family;reaideritial develop- + ' means to be financed with p4ortgage Loarss, as described in each Lender Loan Agreement. "Fxtr'aor3inary, Services" and "F�xtraordinary Expenses"-'mean all services tix rendered and all expenses tncurred under the Indenture other that Ordinary Services and Ordinary Expenses . "!Fair �lerket ��alue" means, as of ^.1y particular time: (a) as' to Government Obligations the bid and asked prices of Nhieh are blished on a regtil.ar basis in the ,dell Street Journal nr 'ihe New fork Times , the bid price for such clove°nment Obligations Street published 'on or most recently prior to the date of valuation by the Trustee;. Or (b) as to GoverPo6nt'Obligations the bid and asked prises of which are not Viblished on R 'regular bo.1s in 'R�g Wa11 Street Journal or 'Ihe view York Timee, the a crag t5id ,price on su,ah (Iovcrnment Obligations at the date of valuation by the Tm4tee as reported to the ''itKxstee by any two dealers in such securities who are mtnbers'�of the°National Association of Seeurtties Dealers. "�)xlly Registered Fond" rneens any; 8ond registered as to both principal " and interest on t,be r�,3g stration books of the Issuer kept for such purpose 'IF+trtd" means any one or more of the separate special trust funds created An Article III hereof. '(leneral 1+Und" means the rand created in Fection 302 hereof. { (a) direct general obligation$ of. the �ovrrnment Obligations" means ; , g ? United States of America, or any obligations uncondlttonally Slaaranteed as to the payment of principal and interest by the full faith and cr�xiit of the United States ,i t t, 1 of ;America; and (b) bonds+ notes or debentures' is'sued by any ono or a obmbittat.ion of any of the following federal Student lean Narlieti Assd agen`�ies: 'Federal Intermediate Credit B � . oiatinh C , Federal National Mort aoverrvnent' National Mortgage Association, ; Sage Assoeiaticn, Bank for Goape WAves, Federal FitnanCirig ''4cme�t,oaneMort Land Etanics 0 Home Loan Ranks Farm Credit System or Fede.m1 t Mortgage Corpotatl.Orr ( including Participation Certificates) . "Interest Acebunt" means the account in the Debt, Service F'urtd by that 3 f name created by Section 302 hereof, 'Investment :Agreement" means the among the Issuer, the 7rUStee and the Bank agreement gated as of October 1, 1981 ' invested at specified rates in interest-bearing deposit arch certain purchases agreements of the Bank. "Issuer" means the Denton County Housing Fine,zce Cot ration suceertsars, and any public body corporate and p?litid resulti , d ifs any consolidation or merger to which it or its suceestors maynbe� rtys�rrviving • "Lender" means one or more a£ the savings mt' c,�al banks paVticipating In the Program, as eviie Fedlbyrthasexecution and II delivery of a "cc*rmi x; tment and a bender Loan 1�xraa_ ,gnt 'cy and between , the issuer and such savings and loan association or commercial bank, "Lender''Loan" means one or more of the 'loan , r conwernplated by a bender from the lssuer to a Lender DAn Agreement in an amount principal r amount of such Lender' s Lender Loan Note, goal t0 97k' o£ the Lender LAan reement" rr 1 dated as of October 1,191, by and betweenethe more andealbenderoan agt+eeinents . "Lender, Loan Collateral,, means the coXlateral pledged and ass ed E tenders to the issuer to secure the i' . . by the with the Lender Loan Payment of the Lender Goan totes in acnordance Agreements. " "Lender Loan Docwents,, means, collectively, the Cor:tnitment. � Loan Agreemer:ts and the Lender Goan Notes , f �, the Lender . "Fender Loan Note", means one or more of the dally the form attached to a Lender Loan promissory notes, in substar�- Lender to the Issuer, evidencing such Wnders�obligationhtol repay maaLender Loan and a portion of the costs of issuance of the 9onds , s : "'4ort grantitt a mort a means one ar more of the deeds of trust and security agreements nom nisi a gaee .on and security interest in the land, buildings And equipment ' P nK Develo�xrient, the the form attached to' a Lender Loan Agree= meet as; bthibit d, made from an Odner to a trustee, for the benefit of a sender, securing the re Payment of rt Mortnage Loan. i E 1 . w "Mortgage Loan" means one or more of the loans to be made by a Lender to an Owner to provide fina,!,cing for a Development. k "Mortgage Loan Documents" means, with respect to a Mortgage Loom, , the Mortgage, the Mortgage Noto, the Regulatory Agreement and the Deed Restrictions pertaining to such Mortgage Loan. IlMortgage' Loan Fund" means the Fund oreated in Section 302 hereof. " ortgage Note" -_'-ans one or mor , of the mortgage notes, in substantially f the form attached to a Lender Loan Agreement as FAbibit H, made from an Owner to a' ,i T-under, evidencing such Owner' s obligation to repay a Mortgage Loan. 4 "Orji.r,%ry Services" and "Ordinary PxpenS ss" mean those services normally rendered and n,ho a expenses, including fees of counsel, normally incurred by a trustee or paying agent under instrumenta similar to this Indenture. "Oatstanding" `or "Bonds outstanding" , In connection with the Bonds means, as of the time in question, all Ponds authenticated and delivered under this Indenture, except ; t s A. Bonds theretofore cancelled or required to be cancelled under Section 209 or 402 hereof; ' B, Bonds which are deemed to have been paid in accorNlance with Article X11 hereof and El 0. Ronds in substitution for which other Bonds have been authenticated and leliva-red pursuant to Articles 11 hereof, unless they are Coupon Bonds 1 which Have been redelivered upon subsequent exchartge's or Fully Registered Sonds for Coupon Fonds as permitted by Section 203 hereof. 4 In determining whether the holders of a requisite aggregate principal imount or i° outstanding Bondi have concurred in any request, ,?emand, authorization, direction, notice, consent or wii•:rr under the provisions of the Indr nture, ?onds cvhich are a owned by the Lender or Any affiliate thereof (fcj, the purpose of this definition am "a;+'filiate" of any specified Person means any other Person directly or indirectly i controlling or .controlled by or under direct or indirect common control with such I specified Persono Fbr purposes of this definition, "control" when used with respect ' . to a . ► specified Person paeans the power to direct the management and policies of I such-Person, directly or indirectly, whether theough the ownership of voting securl- R ties, by contract or otherwise ,, and the terms "controlling" and "controlled" have t` meanings correlative to the foregoing) shall be disregarded aril deemb-d not to be ' outstanding hereunder for the purpose of srny such determination. 1 i 1 L "Owner" means a �-novtg�,gor of a Development who has executed the t90 rtr gage Loan Documents "Paying Agent" means any bank or trust company designated pursuant to this Indenture to serve, in addition to t"e Trustee, as the paying agency or place f of payment for the Bonds . ' "Person" means natural parsons, firms, partnerships, associations, corpor- ations, trusts and public bodies. # :! L "Prepayments" means ; (a) any prepayments paid by a Lender, whether optional or mandatory, of the principal of a Lender Loan; (b) any prepayment penal- ties paid by a Lender on a Lender Loan; and (c) any proceeds or other amounts obtained by the trustee or the Issuer to"ough the exercise of the remedies provided in the tender Loan Documents upon the occurrence of an event of default by a Lender thereunder, including any proceeds derived from the sale, liquidation or other disposition of all or any portion of the Lender Loan Collateral . "Principal Account" means the Account in the Debt Service Fund by that name created by Section 302 hereof. "Program' means the Issuer' s Collateralized Loans- to-Lenders `Qui;2-Famf.ly 'buOting Program, as set forth in this Indenture, the Lender Loan Documents and the { ;;Mortgage Loan Documents . 1 "Redemption Account" means the Account in the Debt Service Fund by that : rWA created b Section 302 hereof, ► � y I "Registered Owner" means the person or persons in whose name or names a Bond shall be registered on books of the Issuer kept for that purpose in accord- ance with the terms of this Indenture:_ s "Regulatory Agreement" mesas any one or more of the regulatory agreements, in substantially the form attached to a Lender loan Agreement as Fxhtbit q, by 'and i the Issuer, the Trustee and an O°Mer« "Resolution" means the resolution duly adopted and approved by the Board of Directors of the Issuer authorizing the issuance and sale of the ,Wds and the execution of this Indenture, "Revenues" means the amounts pledged hereunder to the payment of principal of, premium, if any, and interest on the Bonds, consisting of the following: (i) all -inlounts derived; from or 'in connection with the Program and the Lender Loan DoWments , including amounts obtained thvol,gh the exerciae of the remedies provided in the Lender Loan Documents upon the occurrence of an event of default thereunder, E 3 ( _22- r i r r including amounts recelve14 by the 'trustee pursuant to the Collateral ment, and all receipts of the Trustee credited under the provislonsof thisslnden_ Agree- toge her wit said Investment payable, and (111) moneys held in the Funds and Accounts + together with investment earnings thereon . "Revenue Fund" means the Fund created in Section 302 here 'rSUpplPmental Indenture" means an entered into between the Issuer y agreement hereafter authorized i and the Trustee which amends, vents and modifies or supple- forms a part of this Lndenture. "T'rust'ee" means any successor trustee serving as such pursuant to Sections-or 90 Texas, r e ,y separate or co-trustee serving as such hereunder. , i "Trust Estate" means the property conveyed to the Tnistee i the dranting Clauses nereo£. pursuant to ' r i ARTICLE II f THE BOND SXTION 201. AUT14ORIZFD ,AUM0UNT`OF BONDS. No Ponds may be Issued under the provisions of this Indenture except in accordance with this Article. ; The F total prinoi,pal a.�ount Of Bonds that may be is. � y sue+l is hereby expressly limited to 1 �__10001000, except as provided in Section 207 hareof. ,SECTION 202. ISSUANCE OF BONDS. The Issuer may issue the Bonds follow. ' ing the execution of this Indenture; and the Trustee shall, at the Issuer' s re asst authenticate such Bonds and deliver them as 3,pecified in the request. No additional F Bonds may be issued under this Indenture. County Hous The Bonds shall be designated "Denton Bond � Finance Cornoratlon Collateralized Bonds, ,series 1981A' , The; Bonds shall be tssuabl.e as FU .1y�egistelr�dsPonds�without r coupons in denorninattons of .$5,000 and any integral �mzl.ttple egistef d as coupon Bonnds, registrable as to principal only, ilt the denomination of ,$5,000. Unless the Issuer shall otherwise ster dF direct, the Coupon Bonds 'shall be nunbrared from l upwsrd and the Fully Registered F3onds 'shall be numbered as determined by the Trustee., pro vided the number of each Fully 'itI:glstered Bond shall et prefixed by the letter The Bonds shall be dated as of October 1, lg$1. Interest on the Bonds shall be payable C�, ,poii` Bonds shallnbear April atOfroom theiric9ateh yFachc ncing April 1, 1982, ' I Fully Regtst,�red Pond shall j r ,r 4 -23- r IIJ bear interest from the Interest payment date next preceding the date OrL registra- tion and authentication thereof unless it IS registered and authenticated as of "t an interest; payment date, in which event it shall bear interest from such date`, or unless :Lt Is registered and authenti.cated prior to the first interest k ; date, in 0ich event it shall bear intorest from its date, or unless, as o payment f` by the rea::rdu of the 'Trustee, interest on the Bonds shall be in default, ho ' which event it shall bear interest r in f art the date to which interest has been paid In full, or unless no interest shall have been paid on the Bonds, in whioh event it slall bear interest from its date, 'lfie Trustee shall insert the date of a registration and authentication of each FWly Registered Bond in the place provided ` for such purpose in the form of 'Trustee,s_certificate of authentication to be printed on each Fully Registered Bond, Each Bond shall beae interest on overdue principal and, to the extent permitted by law, on overdue interest at the rate r borne by the Bonds . ` Mhe Bonds shall bear interest at the respective rates set forth in and shall mature on October l of each of the years set forth in and in the principal, amount set forth opposite each year in the follo•,ving'schedule- MAR RATE AMOUM' YEAR RATE Af+tOUNT 1982 y 1988 $. 1983 jg89 1984 1990 1985 1991 4 1986 1987 1992 s 1993 1994 The principal of, premium, if any, and .interest on the Bonds shall be i Pdyable in any coin or currency of the United States of America which, k,jo tshe respective dates of e payment thereof, Is legal tender for. the �.yment of and private debts, and such principal, premirxrtlic um, if any, and interest shapubli payable at the principal corporate trust office of the Trustee in thkh .city of b , Texas, or its successor in trust, or, at the notion of the holder thereof, at the principal corporate trust office of Citibank, N.A. in the city of New 'fork, New York, as Paying Agent, or of any successor Paying Agent designated pursuant to the term of this Indenture; provided, however, payment or Interest on the Coupon Bonds shall he made only upon presentation and surrender of the Collpons representing such interest as the same respeoti.vely Call 'due and pay- ment of interest 'on any �)Wy Registered Bond shall be to n i t thereof and sha,11 be y er Registered Owner paid b cheek or draft mailed to the Registered Owner at his address as it appears on the registration books of the Issuer or at Such other i address as is furnished the Trustee in writing by such Registered Owner at least fifteen (15) days prior to an interest payment date . 1 SECTION 203. RFP'IaMA'.PION f f Ejond unless such Pond Is registered ' TRMIPFER AM FpCCHANQF' Title to` any Coupon any Coupon shall pass by deliver manner hereinafter provided, and to ff Y the T3auer shall cause books for the regis- tration and for the transfer of the Bonds as provided in this Indenture to be kept by the Trustee which is hereby constituted and appointed the Issuer. At the option of the holder, an Pond Rege as of the principal alone on such books u ' Y Coupon Pond may be registered as to ' N H shall make notation of such reglstrationntleireonther�eof to the Trustee which to principal alone may thereafter be transferred only upon Assi registered exe- cuted as t y g ng duly b the Registered Owner or his attorney .duly authorized !n writs in sr form as shall be satis£actor to the Trustee, such transfer to be made on such y books and endorsed on the Bond by the Trustee. thereby transferability by deUvery shall be resSuch trg4bfer may be to bearer and live registrations and transfers a u ject however to succ - As afore. The rinci es registered as to principal alone unless registered to bearer, shall he tyab only to or upon the order of the�Re Registered payable in writing, but the Coupons a B Owner or his attorney duly authorized ' c1 po ppertaining to any Coupon Bond registered as to' prin pal alone shall remain payable to bearer notwithstanding such registration, ►Jpon surrender for transfer of any 'gWly Registered Pond at to principal corporate trust office of the Trustee, duly endorsed for transfer or accomPanied by an ass - merit duly executed by the Registered Owner or his attorney j f writing, the Issuer shall cause to e executed and the Trusteeyshall oauthenticate and deliver in the name of the transferee or transferees a new F)aily Registered Bond ' or Bonds, for a like ' aggregate principal amount. .)Illy Registered Bonds, may be exchanged at the Principal M office of bite 'Trustee for a like same maturity, or fora like aggretearineiinci corporate trust p pal amount of Coupon Bonds of the Of the same maturity of other authorized denominations, and Coupon Bond ds exchanger) at the principal corporate trust office of "te Trustee for r, gate principal amount of Fully Registered Bonds of authorized denominations of t e c ` same maturity, All Coupon Bonds surrendered for exchang shall be accompanied by all unmatured cou n$ a e and delivered In exchange any matured Coupons in default appertaining thereto) ,aini� thereto eshtOgether with executed and the Trustee shall authenticate and deliver Bonds which ttte !'ondholder ,wing the exchange is entitled to receive he The execution by the President and ,Secretary or the Issuer of anr}len outstanding, Bond of any authorized denomination shall constitute cull and due ac y F'u.1. ly Registered such denomination and the Trustee shall thereby authorization of deliver such wily Registered Bond, The Trstee�shall hnot be to authenticate transfer or exchange any Bond daring the period of fifteen 1 Interest payment date of such' Boitd, nor to transfer or exch next preceding any arw;e any Bond after 'the Publication or the mailing or notice ca.tling such pond for redemption has been gi'Ien as herein provi+lad, nor during the the giving o£ such notice of redemption. Period or fifteen (15) ci3ys` next preceding -.25 R S S As to any coupon Bond registered as to principal alone (ot:her than d O to bearer) or as to any Fully Registered Bond, the Registerewner shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Coupon Bond registered as to principal or payment of either principal paI alone, 1 made only to or upon the order of the eRegiste dyOwnerytherreofeordhisnattorney be duly authorized in writing but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability y er ; y eon such Bond to the extent of the sum or sums s� paid . The Issuer, the Trustee and any Paying Agent may deem and treat the bearer of any Coupon Bond { which shall not at the time be registered as to principal (or which shall be regis- tered to bearer), and the bearer of an Coupon a whether such Bond shall. be registered as to princi l�gri ot,pas�theoa absolute of such Bond or Coupon, as the case may be, whether such Bond or Coupon shall be overIlle or not, for the purpose of receiving payment thereof and for all other purposes whatsoever, and the Issuer, the 'Trustee and any Paying Agent shall not be afreeted by any notice to the contrary. The Issuer may charge the sum of $2.00 plijs the cost of printing such } r Bond, if any, for each new Bond issued upon any exchange 4 case of (a) the exchange of temporary mitt e transfer except in the mpo ary Bonds for definitive Bonds or {b) the first exchange or transfer of any Bond or Bonds issued at the time of the original issu- ance of definitive Bonds hereunder. In applying the foregoing provisions, the original issuance of definitive Bonds hereunder shall be deemed to be the 'origInal issuance of the full principal ; amount of definitive Ponds to ' a party r other, than a member of the underwriting syndicate or inali y Parties E so that if a member of the underwritIn Syndicate`Originally Purchasing the Bonds is the original purchaser of de g- y purchasing the Bonds VY is the of this y of the bonds, said Bonds shall be considered for paragraph to have been issued to the first purohasers therefra=. me each case any such first r � ea purchaser shall, certify such fact to the Trustee at �, time Of exchange or transfer and the Trustee shall be entitlsd to rely oonclu_ 1, sively upon any such certificate. Any such certificate , need not be acknowledged. � In each case the 'Trustee shall require the payment by the Bond holder requesting j exchange, transfer, registratlon or discharge from registration of any tax or other 640vernnental charge required to be patd 'With vespect thereto. 3 SFCTION 204. F�(E(3UTION; ' LIMITED OBLIGATION. The on behalf of the Issuer with the printed attested with the facsimile Sign facsimile si.gnatureoflitshp lsbdenteand r; ature of its Secretary and shall have im- pressed or printed thereon a facsimile of the corporate seal of the Issuer, The Coupons attached to the Coupon Bonds shall be executed by the facsimile of the Official signatures of said President and Seeretar , shall have the same force and effect as if said President orthea5ecretary,pstthe I1 (Inse may be, had rttanuali.y signed each of said Bonds or nt or t 1 1 r t tE s. t. _26- r N t ; In case any officer whose signature or a faosimiie of whose signatun, shall appear on the Bonds or Coupons shall cease to be such officer before the delivery of such Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes , the same as if he had remained in office until delivery. 1 The Bonds , together with interest thereon, shall be It obligations ` of the Issuer giving rise to no pecuniary liability of the Issuer nor any charge J against its general credit, shall be payable solely from the Revenues pledged therefor under this Indenture, and shall be a valid claim of the respective holders y: the only against the Revenues. The Bonds 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 { p►�vision, of the County, or of the State of Texas or any political subdivision +` nor the State of Texas nor any political subdivi- thereof, and neither the County, sion thereof, shall be liable thereon, and in no event shall the Bonds be payable out of any funds or properties oth�'r than the Revenues . No recourse shall be had for the payment of the principal of, or premium, if any, or interest on any of the Bonds or for any claim based thereon or upon any obligation ,covenant or agreement in this Indenture eontained, ;against any past, present or future me,nber, director, officer, employee or agent of the Issuer, or any Incorporator) officer, director, member or agent of any successor corporation, as such, either directly or thrc,agh the Issuer or any successor corporation) under any rule of law or equity, statute or constitution or by the enforcement of any assess- y merit or penalty or otherwise, and all such liability of any such incorporator, offi- ce r, director or member as such is hereby expressly waived and released as a condt- tion of and in consideration for the execution of this Indenture and the issuance of any of the Bonds. SWTION 205. AiR'FIEMICATIM No Bond or Coupon appertaining thereto ' shall be valid for any purpose until the certificate of authentication on such f'r�nd shall have been duly executed by the Trustee, and such authentication shalt be conclusive proof that such Bond has been duly authentioated and delivered under this Indenture and that the holder thereof is entitled to the be of the trust zereby created. The 'Trustee' s certificate of authentication on any Pond shall be , ieer,��ci to have' been exec�.�ted by it if (a) signed by an authorized officer of the 4' 'Tojstee, but It shall not be necessary that the same officer sign tre certificate all of the Bonds iss of authentication on ued hereunder, and (b) , but only in the case of n fly Registered florid, the date of registration and authentication of the pally Registered Bond is inserted in the place provided therefor on the Trustee' s certificate of authentication, Before authenticating or deliveri any Coupon , ' 5 Bond, the Trustee shalt detach and cancel all rnatored Coupons not in default, if any, appertaining thereto, and such cancelled roupons snail be cremated or otherwise destroyed by the Trustee in accordance with ,Section 209 hereof. ,I x is it 4 SWTION 206. FURM OF RANDS. rMe Bonds issued under this Indenture and the Coupons attached thereto shall be substantially in the form hereinabove set forth with such appropriate variations, omisstons and insertions as are permitted a or required by this Indenture, n SEI:TION 207. 1KU1'ILATF_D, DESTROYED, LAST OR SIY3LFN BONUS OR COUPONS. In the event any Bond or temporary Bond is mutilated, I.ost, stolen or destroyed, the Issuer may cause to be executed and the Trustee may authenticate a new Bond of like date, maturity, interest rate and denomination as that mutilated, lost, stolen or destroyed (which new Bond shall have attached thereto Coupons corresponding in all respects to those, if any, on the Bond mutilated, lost, stolen or destroyed) ., and in the event any Coupon is mutilated, lost, stolen or destroyed, the Issuer may cause to be executed a new Coupon corresponding in all respects to that mutil aced,- lost, stolen or destroyed; provided that, in 'he case of any mutilated Coupon or Bond, such 'mutilated Coupon or Bond together with all Coupons (if any) appertain- ing thereto shall first te `surrendered 'to the Issuer, and in the case of any ' lost stolen or destroyed Coupon, or Bond, there shall be first furnished to the Isuer, the Lender and the Trustee evidence of such loss, theft or destruction satisfactory ; to them, together with indemnity satisfactory to them# In the event any such Bond or Coupon shall have matured, instead of issuing a duplicate Bond or Coupon , the 5 Issuer may pay the same without surrender thereof, The Issuer and the Trustee may charge the holder or owner of such Bond or Coupon with their reasonable fees and expenses in this connection. The Issuer shall cooperate with tton with the issue of replacement Bonds and Coupons, but nothing Trustee this Sectioon cr ' shall be construed in derogation of any rights which the Issuer or the Trustee may have to receive indemnification against liability, or payment or reimbursement of , expenses, in connection with the issue of a replacement florid or Coupon, ry Every substituted Bond and Coupon issued pursuant to this Section 207 shall constitute an additional contractual obligation of the Issuer, whether or not the Bond or Coupon alleged to have been mutilated, destroyed, lost or stolen shall bs at any time enforceable by anyone, and shall be entitled to all the benefits of x this Indenture equally and proportionately with any and all other Bonds and Coupons duly issued hereunder. ; t r All Bonds and Coupons shall be held and owned upon the express condition F that the foregoing provisions are, to the extent permitted. by law, exclusive with ; respect to the replacement or payment of mutilated, destroyed, lost or stolen Bonds altd Coupons , and shall preclude any and all other rights or remedies , S TZON 208• TEIVORARY BONDS. Pending preparation of definitive Bonds, or by agreement with the purchasers of all Bonds, the Issuer may issue and, upon its request, the Trustee shall authenticate, in l.teu of definitive 'onds, one or 11 It, ; I k written Bonds in denominations of $5,000 or integOal more temporary printed or type' Upon request of the multiples thereof of substantially the tenor recited above. for and upon Issuer, the Trustee shall authenticate definitive Bonds in exchange so exchanged, surrender of an equal principal amount of temporary Bonds. temporary Bonds shall have the same rights, remedies and security hereunder as definitive Bonds . ! SElCTION 209. CANCE LATION AND DES`MWIPION OF SURRENDERED BOiNW fl��nd or COUPONS; COUPON BOOS SURRENDto s FOR be delivered' Rover any appertaining thereto shall be delivered to the amour orointerestlrepre- any Coupon p[�e payment of the prinoipal. amount pursuant to this Indenture, upon rented thereby, or for replacement pursuant to Seo�1the Bonds pursuantito Section E i Coupon shall be detached prior to authdntication °c celled and, if requested by f 205 hereor, such Bond or Coupon shall be ed promptly th the Lender, cremated or otherwise destroChacremationrortatherndestructianrst L be. I, , certificate of destruction evidencing furnished by the Trustee to the Issuer. ! Coupons appertaining thereto surrendered Coupon Bonds and the unmatured Coupe P he held without t to the Trustee for exchange and may tbeoused for subsequent ent excha�es pursuant to cancellation by the Trustee Seotion 203 hereof.: SECTION 210. DEI,IVF'Ry OF M WMS, Upon the exersution and delivery of the Issuer shall execute and deliver to the 'I:*us tee and the Trustee this Indenture, ' hem to the purchasers as directed by the } , I `shall authenticate the Bonds and deliver c Issuer as here inafter in this Section provided. i Prior to the delivery by the reus tee or any of the Bonds there shalL have been filed with the q'ruatee: r duly certified by the Secretary, of the 'tesc,tution adopted ! (1) A Copy, authoNixLng by the Board of Directors of the Issuer on the issuance of the Bonds, the implementation of the ProKr� �n and the execution and delivery of this Indenture. Original ��xtacutad counterpa (2) rts of this Indenture, the COMMItMents t,the of all lenders, tvgeth�r with certified or cashiers checks t¢to<'+�thelCommitments, payment of the Commitment Fees required to be pa puP Lender IOsn Collateral i the Fender roe Agreements, the Lender;Loan Notes, and the and all other materials required by the Lender Loan Agreement, . p t,ollateral Pwchase Agreement. (3) An opinion of Bond Counsel that the Bonds have been validly issued a tu1d«r; the indenture and ll r,yqujrements tinder this Indenture precedent ` the (jellvery of the Sands haVil been satisfied, it I ?i f a k -29. ; L _ -T------•-�^--per (4) A cash flow statement prepared in accordance with Section 710 hereof. (5) A request and authorization to the Trustee on behalf or the Issuer d directing the Trustee as to the 'investment of the proceeds of the Bonds in- s eluding without limitation, the amounts required to be deposited into the r ?brtgage Loan Fund and the Capital Reserve Fund. (6) request and authorization to the Trust2e on behalf or the Issuer, to a:ithenticate and deliver the Bonds to the purchasers therein identified upo�i payment to the Trustee, but for the account of t'iie Issuer, of a sum speai.fted in such request and autwelzation plus accrued interest thereon to the date of delivery. The proceeds of such payment shall bo transferred and deposited pursuant to Article III hereof and as indicated in such request and ,authorization ARTICLE III REVENUES AND FUNDS SECTION 301, SOURCE OF PAYMENT OF BONDS. The Bonds and all payments required of the Issuer hereunder are not general obligations of the Issuer but are limited obligations as described in Section 204 hereof. 4 SECTION 302. CREATION OF FUNDS AND ACCOUNTS. The following; FL ids and Accou;lts of the Issuer are hereby created and established with the Trustee : i (a) the Mortgage Loan Fund; (b the Coat of Issuance Fund ; } (c) the Revenue Fund;, (d) the Debt Service Fund , consisting of the Interest Accoi2it, the Prinotpal `Account and the Redemption Account; (e) the Capital Reserve Fund ; and (f) the General Fund. i Each Fund and Account shall be maintained by the Trustee as a separate and distinct trust rand or account to be held, managed, invested, disbursed and administered as provided in this Indenture . All moneys deposited in the Funds and Accounts shall f be used solely for the purposes set forth in this Indenture. The it�ustee shall 1 keep and. maintain, adequate records pertaintrV to ach E),md and Account, and all disbursements theref:^om. f -30- i S .'TION 303. -191TTAL DEPOSITS. Or, the Qeltver,Y Date, as shall be more fully specified in a written request from the Issuer, the Trustee shall deposit the proceeds receive-1 from the sale of the Bonds as follows ; (a) First, an amount equal to the accrued interest on the Bands from the date thereof until the Delivery Date shall be deposited into the Interest Account; (b) Second, an amount equal to the Capital Reserve Fund Requirement shall be deposited into the Capital Reserve Fund; O Third $ shall be deposited into the Mortgage Loan �tr���1 ( Jti fourth, the balance remaining from the proceeds received from the a rake of the Bonds shall be deposited into the Coster Issuance Fund, t Simultaneously wit)n the foregoing deposits, the Commitment Fees paid to the Issuer by the Lendevs pursuant to the Commitments, together with any interest earnings i thereon, shall be transferred by the issuer to the Trustee and deposited into the Cost of fssuartc e Fund. SEC'T'ION 304. MORTGA0E LOAN IR M), On the Delivery late , the Trustee shall deposit into the Mortgage Loan Fund the amount required b Section ' this Indenture, the Trustee shall thereupon establish within the Mnb,,t 303 an gage Loan i Fluid a separate account for each Lender to whom a Lender Loan is made and shall credit to each such account the principal amount or such Lender Loan (which repre- sents 97% of the principal amount of such Lender' s Lender Loan Note) , Phoneys on deposit in the Mortgage Loan Mind shall be invested at the direction, of the re).aeo- tive Lenrters in accordance with Article V rier,eof, SuOh moneys, ' including interest ' f °arnings thereon, shall be Applied or disbursed in aeQOrdance with the Lender Loan Agreements. Any amounts remaining in the Mortgage Loan Fund on July 1, 1984 shall be transrerred to the ,Redemption Account. fit 3MUON 305, COST OF ISSUANCE PUND. On the Delivery Date, the Trustee E # shall deposit Lnto the Cost of Issuance blond the ,Amount required by Section 303 or l this Indenture, Moneys on deposit in the Cost or Issuance �NMd shall, be applied to pay the costs of issuing the Bonds including, �� , rtg, without limitation, all pri'tting and docment re ration expenses in connection with the Program, the Indentu;+e, F the Lender Loan Dooumentso the Mort Sage Loan Documents, the Bonds and the prelimin- ary official statement and 'official statement pertaining to the Bonds; rating t V [ agency fees; market study fees; legal fees of Bond Counsel, counsel to the Issuer 'and other 'Counsel; any computer and other expenses incurred in eonnectlon with determining ot,' verifying the suffioiency of the Projected cash flOws from the t r; Lender Loans or in determining that the Bonds are not arbitrage bonds; the initial � fees and expenses of the Trustee and any Paying Agent, the initial payment of the Collateral Pxrchase .Agreement Fie; and other fees and expenses incurred in connec- tion with the issuance of the Bonds or the implementation of the Program, to the ++r 1 � f # -31- k ,q r . . r .♦:. ran:;: °. ... ...,. , 1 E i f 1 extent such fees and expenses are approved by the Issuer. Such costs shall .be payable upon submission of a voitten request from the Issuer stating that the } amount indicated thereon is us:� ., ,J ly due and owing, hts not been the subject of another written request which has been paid, and Is a proper cost of issuing the f Bonds or implementing the Program. Any moneys remaining in the Cost of Issuance F Fund on the 180th day following the Delivery Date and believed by the Trustee not to be necessary for the payment of any expenses hereunder or costs of issuance of the Bonds shall be transferred to the Issuer. a ' SECTION 306. REVENUE FJND. The Trustee shall deposit into the Revenue ' Fiord all income, revenues , proceeds and other amounts received from or in conned F Program } {` tion witY the Pr ram and the Fender Loan Documents , including all scheduled pay- ments of the prinoipaal of and interest on the Lender Notes, all Prepayments (.ineltding credited amounts from the Mortgage Loan Fund) , all earrings and gains 4 ' resulting from the investment of the moneys held; in all Funds and Accounts (except earnings and gains resulting from the inveshnent at the direction of Fenders of certain moneys held in the Mortgage Loan Fund) , and any other amounts received by = ' the Trustee which are subject to the lien and pledge or this Indenture, Irrc:;ediately E ' upon receipt or credit of any amounts representing Prepayments, together with f accrued interest to the date of prepayment, the Trustee shall transfer from the Revenue Fluid to the Redemption Account an amount equal to _suoh prepayments and j shall transfer from the Revenue Mzid to the Interest Account an amount equal to t such accrued interest. The Trustee shall apply all other moneys on deposit in the Revenue Fund, on or within five (5) days prior to each scheduled interest payment date on the Bonds , in the order of priority and for the purposes sat forth below; (a) First, to the Interest Account, an amount sufficient to pay the 'E interest becaning due and payable on the Bonds on such date; fv (b) Second, to the Principal Account, 3n amount sufficient to pay the principal of the Bonds maturing on such date, if any; (e) Third, to the Capital Reserve .Fund) the amount required, if any, to ' oestore the amount on deposit in the Capital Reserve Fund to the Capital j Reserve Fund Requirement; and (d) "aurth, to -the General 11)zid, any amounts remaining in the Revenue Rand after,the Nregoing transfers . SECTION 307. DEBT SERVICE FUND. The Trustee shall deposit into the ' Interest Account of the Debt Service Fund, the amounts required by Section 303 and Section 306 of this Indenture. Moneys on deposit in the Interest Account shall be N applied solely to pay the interest on the Bonds as the same bacoies due and payable. On each scheduled interest payment date on the Bonds and on each ;.late fixed for mandatory br optional redemption of the Bonds, the Trustee shall set aside and hold in trust , or remit to any Paying Agant to be held in trust, or in i E 32_ } a , x Af l the oase of any' full ovners of ;itch BondsYistered E3omis, remit b Interest on the &>n,1s ban from the Inte y maid to the respective ing due and rest Account auffioi.ent to` ay th @red { payable an such date. pay the the 'Irus tee shall de .�ltnd the amounts required b Section posit into ied the Prsncipal Account of the Debt the Principal Account shall be app 06 of thi Service the same becomes due and solel 'denture, Moneys on de the Rotids payable atl maturit y to pay the prinoipal of posit in be shall set aside Y. On each princlpal Bonds as Agent to and hold payment date on A the ;arinciPal Of thet trust be mount from the Princtrust, or remit to any Paying Bonds becoming due and ipal Account sufficient to pay ; Payable on such date. s 'mod the arno a 7rus tee 'aha1J. ,fie ' ants required b deposit into Redemption Account of, y Section an �ieposit ' in the Retie 30� and Section the Debt Service ? Of and Premium �F gEtion Account shall be 346 of this, Indent LOU , snY, on the Bonds as the Same becomes to PaY the rinaipalYS ` #, S, redemption or by optional red or optional redemption emption. and pay by mantic- the emit to Trustee :shall each date fixed For such s'l-I't any �y� Agent to be set aside and hold me.ndatov _ent to pay the prinei held in trust, an amount hold trust, or shall r and payable on such data. pal OF and premium, It an Om the Redo"�ption Account Y, on the Fonds becoming due 9 SECTION 30}3 f APxC o Capital Reserve Fund the AG RENh VF, FUND, 'gre Trustee shall �e indentureo mounts required by Section Interest at ti�rt�. 343 �d posit into the , s Aacourtt and from time to time t Section 306 of this PRY the princi ' Principal Account and the he amunta on de v able pal of, premium, if Redemption Account arepinsuft in to 'vhdth�r at maturity or b Y, and interest on the the 0aneral 'rltnd i Y prior redemption Aonds then due and to r n accordance with Seetiort ^4 ' and If the amount transfer remedy such deficlenc �(a) of this red from to the Interest Y, ti�e `Trustee shall t Indenture is insufficient amount Sufficient P, the ,Account or Redsfer from the Capital Reserve tt'.te the uf'ficient to remedy ;itch defialenoy, emptton Account Fund mount on de , as appro.riate, end ° auir 'ment, the�sit 1n the Capital Resew@ � t1me and from time to Revenue ,� amount �ustee shall transfer f exc eels t e n equal to such excess, from the Capital Reyervenital o thee Fund to the SECTION .r'lind the � 309.. OENF,Rgi, F't1Nb, t 2pbl k ants required by Sdatio The O''tstae shall de j y '.coneys on de n 306 of this Indenture, posit into the :general t?osi.t in aenerel tnd spiel for ,�o Trustee shall in accordartae with t��e followir conditions; Y the following p,trpo3as and (a) If at any time and from Interrest Account Principal Account to time the I to I�al Recount and ,cede amounts on deposit in pY the r�rincipal (5f, premium mption Account are the artd , , i f Payable whether at rnaturit y' anti interest on the insufficient transfer From the Genet Y or by prior, red Aonds then due 110demptsion Account, as nl tnd tile Interest pion, the Trustee shall i t deficiency. ppropriate Account p art '11 iOLnt; sufficle'tptonret� •4eco�>nt or ! y such I 1. i R E 1 (b) If at any tim! and from time to time the aiwunt on deposit in the Capital. Reserve Fund is less than the Capital. Reserve Fund ,'iequtrement, the Trustee shall transfer from the General Fund to the Capitai Reserve Fund an amount sufficient to remedy such deficiency . f : (e) Tne Trustee, from time to time, sha.l.l apply moneys on deposit in the General Fund to pay or reimburse ; (i) the Collateral Purchase Agreement Fee to the Bank; and (ii) the Trustee and any Paying Agent for the cost of ' Ordinary Expenses incurred and Ordinary Services rendered; and (iii) the s Trustee and any Paying Agent for the cost of Extraordinary Expenses incurred and Extraordinary Services rendered if said Extraordinary Expenses and Extra- ordinary Services are necessary and reasonable and are not occasioned by the neglect or misconduct of the Trustee or any Paying Agent; and (iv) accounting fees and expenses incurred in connectl�n with the administration of the Lender Loan Agreements; and (v) expenses of the Issuer incurred in connection with the administration of the Program, upon reoeipt of a written request' from the .Issuer stating that the amount indicated thereon is Justly due and owing, has not been the subject of another written request which has been paid, and is' a proper cost of administering the Program; provided, however, that in no event shall the aggregate amount disbursed from the General. Fund during any calendar year pursuant to this subparagraph (o) exceed $ t (d) The Trustee, from time to time, shall, remit moneys on deposit in the General Fund to the Issuer, free and clear of the lien of this Indenture, to be used for any lawful purpose of the Issuer (subject to the obligations of the Issuer under Section .502 of this Indenture) , 1'.n such amounts as may be specified in a° written request from the Issuer; provided, however, ,that : (I) there shall be no deficiency in any Fund or Account and al.'1 costs described in subparagraph (c) above shall have been paid or provided for; (ii) such written request shall be a0monpanied by a cash Plow statement prepared in accordance with Section 710 of the Indenture; and (iii) the aggregate amount on deposit In the Fluids and Accounts at such time (excluding the amount to E be so disbursed) , when added to the aggregate outstanding' principal balance of the bender Loans,- shall be at least equal to 102 percent of the aggregate principal amount of the Bonds then outstanding, SECTION 310. FINAL BALANCES# i moneys sufficient to Upon the deposit with the Trustee of the payment cr the �Y all principal of, premium, if any, and interest on the Bonds, and upon satisfaction of ?ll elaimo against, the Issuer hereunder, including Collateral Purb,zse Agreement Fee and all fees, charges and , expenses of the !stee and any Paying `Agent which are properly due and payable hereunder, or upon the malting of adfaquate provision for the payment of such amounts, as permitted hereby, all moneys remaining in all Funds and Accounts , except moneys necessary to pay princiW of, premium, if any, and interest on the Bonds, which 'f moneys shall be held by the Trustee Arid repaid to the Issuer pursuant to Section 312 hereof, shall be remitted to the Issuer to be used for any lawflil,'purpose . t s. -34- ... . .: .:,.sr ` . . ; .` y e di. .. • _, • rv ,r `:.a ... a . . ) CJ t,ld:u.. '• I : 1 2 SECTION 311 , ,SFCURITY OF FUNDS. All moneys deposited with the Trustee r under this Indenture shall be held in trust and (except for moneys held by the Trustee, as paying agent, or remitted to any Paying Agent for the payment of the principal of, premium, if any, and interest on the Bonds) shall, while held by the Trustee, constitute part or the Trust Estate and shall be and remain entitled to the benefit and 'shall be subject to the security of this Indenture for the equal and proportionate benefit of the holders of all outstanding Bonds. To the j extent not invested as provided in Article V of this Indenture, all such moneys held by the Trustee in excess of the amount insured by the Federal Deposit Insur- # ande, Corporation ;or a successor federal agency shall be continuously, secured, for s the benefit of the Issuer and the holders of the Bonds, by a pledge of securities of the type described in Article V of this ;Indenture, SECTION 312, NON-PRESFNI+MT OF BONDS. In the event any Bond or, Coupon shall not be presented for payment when the; prineipa.1 thereof or interest repre- sented thereby becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof, if moneys sufficient to pay such Bond or Coupon shall have been deposited in the Bond Fund, all liability of the Issuer to the holder thereof for the paym. nt of such Bond or Coupon shall forthwith cease, determine and be i completely discharged, and thereupon it shall be the duty of the Trustee to hold such moneys, without liability for interest thereon, for the benefit of the holder of such Bond or Coupon who shall thereafter be restricted exclusively to such moneys, for any claim of whatever nature on his part under this Indenture or on, or with respect to, said Bond or Coupon, Any moneys so ,deposited with and held by the Trustee not so applied to the payment of Bonds or Coupons, if any, within five (5) years after the date on which the same shall hive become due shall be pain by the Trustee to the Issuer upon receipt of a written request of the Issuer and thereafter Bondholders and holders of Coupons shall be entitled to look only to the Issuer for payment, and + then only to the extent of the amount so repaid, and the Issuer, shall not be liable for any interest thereon and shall- not be regarded as a trustee of such money. SECTION 313• MONEYS TO BE HELD IN TRUST, All moneys required to be 01posited with or 'paid to the Trustee under any provision of this Indf�nture shall { bs! held by the Trustee in trust and applied for the purposes herei.n_speofie,d. ARTICLE .TV RMrENM AND APPLICATION THFREOF SFZftON 401, RE'VWES TO BE PAID OVER TO TRUS`T'EE♦, The Issuer will cause the amounts derived from or in connection with the Program and the Lender Doan Documents, including amotmts obtained through the exercise of the remedies it f i f , r3r i , . _ ._,. . . ., ..�. , .,.. ,.., . .tip.. . ... .... .: .. . .. , . . .. _ .. . . . . L provided in the Lender Loan Docunents upon the occurrence of an event of default thereunder, including amounts obtained from the sale of any portion of the Lender Loan Collateral pursuant to the Collateral Purchase Agreement, to be paid to the Trustee for deposit when necessary in accordance with the terms of this Indenture a to effect payment of the principal of, premium, if any, and interest on the Bonds as the same become due. tSECTION 402. PAYMENTS OF PRINUPAL AND INTEREST. The Trustee shall (, make available to the Paying Agent from the Revenues sufficient amounts to pay the principal or redemption price of, and interest on, the Bonds as the Game became due and payable. If, prior to the maturity of any Bond, a Lender sur- �' renders such Bond to the Trustee, the Trustee shall cancel such Bond SECTION 403. REVENUES TO BE HELD FOR ALL BONDHOLDERS; CERTAIN aCEPTIONS. The Revenues shall, until applied as provided in this Indenture, be held by the n Trustee for the benefit of the holders of all Outstanding Bonds, except that, any F portion of the Revenues representing principal or redemption price of, - arid interest i3�onds ;prev.iously called for redemption in accordance with Article VI of On, any i this Indenture .( previously matured sha1L be held for the benefit of the holders t of such Bonds only and shall not be deposited or invested pursuant to Article V i hereof, notwithstanding any provision of Article V, ARTICLE V INVES'iMENT OF MONEYS j SECTION 501. IPM 24ENT OF' MONEXS, Moneys in all Funds and Accounts � shall be continuously invested and reinvested by the Trustee as provided in this Secti.on 501. until such time or times as said moneys shall be needed for the purposes # for which they were deposited, Moneys on deposit in the Capital Reserve Fund may be invested only, pursuant to the investment Agreement so long as it continues in effect to ether with moneys On deposit in &11 other Funds and Accounts may be invested only in: (a) 0overnment Obligations; or (b) time deposits 1 and thereafter such" moneys, g in or certificates of deposit issued by any bank (inoludi.ng the Trustee, acting 1 ' in its'comneroial banking 0apac ty, but exoluding �' Vender') } having combined ctpit:al, surplus find undivided profits 'of at least $10$0000000, the deposits of which are insured 'by the ,Federal` Deposit Insurance Corporation or any successor agency (the "FDIC" ) , or tire deposits in or certificates of deposit issued by any savings and loan association (excluding any Lender) , the deposits of which are insured by the Federal Savings and Loan Insurance Corporation, or any successor a ncy '(the "FSLIC") , but only to the extent that such time deposits or certificates ; of deposit are either (i) fully insured by the FDIC or the FSLIC, or (ii) secured by Govemnent Obligations held by or pledged to the Trustee and having a Fair Market Value of not less thfin 100% 'or the uninsured amunt of such time deposits or certifi- cates of deposit; or (a) time deposits in, certificates of deposit issued by or re�- purohase agreements with uny bank ( including the Trustee, acting in its eoreneraial banking capacity, but excluding any bender) having combined capital, surplus and 3(}- k .... a..,G`4r• L.rNm.}Kdz< xs�. l:. _, rr r rr S i i undivided profits of at least $75)000)000,5, 00,000, All such investments shalt later, nor, to the extent reasonably practicable) nature not moneys or ihvestrnent proceedo are required for the purposes of the respective earlier than the date such Funds and Accounts. j Moneys in the %rtgage Loan accordance with the preceding Fund shall be Invested by the Trustee in the Lender Loan paragraph in any mariner directed in accordance Agreement b the Lender on whose behalf such moneys are held, In { the absence of such direction by the Lender, the Trustee shall invest in accordance with the Preceding paragraph, such moneys ide Issuer, from time to time and to the maximum extent 'praeticable ; shall provide the Trustee with written requests he max +3vestments to be made with the moneys held in the n the Trustee as to specific, Capital Reserve Fund so lot' as the Investment 'Agreement remains efexcept the except the j%brtgage Loan Fund ect and ten requests, the > provided, however, that 1n the absence fect ah virit- i 7t�ustee shall select the investments to be made with such motleys in accordance with prudent investment standards; and the 501. The Trustee shall have no l.iability 'or responsibility Provisions of this ',Section from any investment made in accordance with the provisions of this �' oss' resulting Section 501, # All the shall constitute a N the moneys used to acquire part of the Fund or Account f reduce to cash a sufficient amount�oftinvestrnentscin a from which ? cash balance therein is insufficient to come. �e '11'ustee Shall sell and from FEartd or Account whenever the xhe 'ustee may pay the amounts required to be paid there- F=d or Account in lieu totpcash when required an Y end or Account to any other 7 this Indenture. Permitted by ti1e provisions of In computing the amount in any Fund or Account other than the Ca ` Reserve Fund, obligations purchased as valued at the marKet price of such obligations pitf�l as investment .of moneys therein shall be f If the market price of such obligations is not$ clud available any accrued interest, shall det ,Mine the value of such obligations ,in an readily ins the amount in the Capital Reserve , the Trus!;ee of moneys therein shall be valued Y reasonable manner. In' eomput- Furti obligations purchased as ar► investment at amortized cost plus ' aocrueQ Interest, SEC1TON 5020 EARNINGS AND LOSSES* All eat earnings resulting from the `investment of moneyspinaalgains except the ybrt a , profits and inten- upon receipt b g&�o T�oan shall be transrerred to the RevenueaAceounts to time the y ttL '�'ustee, provided, however, that if at !frcmiately amount eM deposit in the Capital Reserve Fund is less than the Capital Reserve any anr3 Prom time Fund Require�+tent, all capital sins p 1 from the investment df moneys in the Capital `Re3eM,e and interest earnings resulting Fund until the amount on de Reserve �d ,shall 'aceumulate in such All capital gems, profits and 'interest qualssthe9ca capital Reserve moneys in the ,yns, earnings Fund Requirement gage Loan Fund shall be retained !n sai (corn the investment of In accordance with the Lender Loan Fluid until Ning resulting 1`rO the investment of moneys loss of rind disbursed incurred in' making p purchase value ng or disposing of invesbneansy shall be chaedand any expenses the Fund or;Account from which such investments were made, � ' when incurred, to .37- E, r sEcTION 503. INVES`"Ni'S; ARBITRAGE; SPF.TAL ARBrmoE RIJ7TR1c,,T1UN. The Trustee may make any and all investments pemitted by the provisions of Section 501 hereof through its own bond department , As and when any amount in- vested pursuant to this Article may be needed for disbursement, the Trustee may cause a sufrieient amount of such investments to be sold and reduced to cash to { the credit of such funds. The Trustee covenants that at any time th�t` s`t has discretion as to such investments it will not use or invest the proceeds of the i Bonds in any manner which will cause the Bonds to became "arbitrage bonds" within the meaning of Section 103(c) of the Code, and any lawful regulations promulgated thereunder including Sections 1.103-13, 1.103-14 and 1 ,103-15 of the Income Tax Regulations (26 CFR Part 1) , as the 'same exist on this date, or may from time to time hereafter be amended, supplemented or revised. s' The Issuer covenants with all purchasers and holders of the Bonds from time to time outstanding that so long' as any of the Bonds remain outstanding, { moneys on deposit with the Trustee under the Indenture, whether or not such moneys were derived from the proceeds of the sale of the Blonds or from any other source, will not be used in a manner which will cause the Bonds to be "arbitrage bonds" within the meaning of Section 103(c) of the Code, and any lawful regulations promulgated thereunder including Sections 1,103-13, 1.103-14 and 1,103-15 of the Income 'Wax Regulations (?.6 CF'R- Part 1) , as the same exist on this date, or may from time to time hereat'ter be amended, supplemented or revised. The Issuer reserves` r the right, however, for any investment of such moneys y permitted by Ttxas law to be made, if, when and to the %,dent that said Section 103(c) 'or regulations promul- gated thereunder shall be repealed or relaxed or' shall be held void 'by final Judg- ment of 'a court of competent jurisdiction, but only if any investment made by virtue of such repeal, relaxation or decision would not, in the written opinion of k Bond Counsel, result in making the interest on the Bonds subject to 'federal income r taxation. i F The Issuer further covenants with all purchasers and holders of the { Bonds, from time to time outstanding that so long as any of the Bonds remain outstanding, notwithstanding any other provision of this Indenture, in the event at any time the sum of the amounts on deposit in the Bond Reserve F1,md, together with any amounts remaining on deposit in the Redemption Account and the General FLund for more than thirteen (13) months, exceeds $ , the amount of such excess shall be inveeted at a rate not exceeding 't e yield on `the Bonds, as deter- t mined in accordance with Sect+on 103(c) of the Code and applicable regulations ' f thereunder, unless in the opinion of Bond Counsel, investment of such excess at a rate in excess 4 the yield on the Bonds would not result in making the interest ` on the Bonds subject to federal income taxation. ( . 1 ..3g_ vJ S 3 _ r , } T ARTICLE VI 44 RFMDIPTION OF BONDS BEFORE MATURITY S � SFI.'r['ION 601. LIMITATION ON RF.[)EMPT.[ON. The Bonds shall be sut,Ject to i redemption prior to maturity only as provided in this Article VI , smuoN 602. MANDATORY REDDIP1I0N. The Bonds shall be sub,)ect to mandatary redemption as follows: f (a} The Bond shall be `redeemed in part ( in any integral multiple of s �. $5,000) on October 1, !9840 at a price equal to the principal amount of the J Bonds so called for redemption, without premium, plus a ccrued interest to 1 the redemption date, in the event and to the extent that any Lender's Lender t Iran is prepaid because funds were not advance(I by such Lender to an Omer pursuant to a Mdbtgage Loan prior to July; 10 1984. (b) 'Ihe Bonds shall be redeemed in pa' t (in any Sntegrai multiple of A $5,000) on any interest payment date, at a price equal to the principal amount of the Bonds so-called for redemption, Without premiu;n, plus accrued r Interest to the redemption date, in the event and to the extent that any r Lender Loan is prepaid under circumstances under which the Lender Loan Docu- ( ments do not require the payment of any prepayment penalty and the Trustee transfers such prepayments from the Revenue Fund to the Redemptionl,cnount pursuant to Section 306 of this Indenture, V F ' (e) The Bands shall be _redeemed in whole or in part (in any"' integral. rtiltiple of $5,000) on any intemst payment date, at a price equal' e the principal amount of the Bonds so called for redemption, plus the premium set forth in the schedule below (expressed as a' percentage of the principal �• amount of the Bores so called for redemption) , plus accrued interrest' to the redemption date, in the event and to the extent that any Lender Loan is prepaid under circumstances under which the Lender Loan Documents require . the payment of a prepayment penalty and the .'Iru.stee transfers such ,Prepay- meats r rom the Revenue and to the Redemption Account pursuant to Section 306 of this Indenture: i Redemption Premium Redemption Dates Red ,._.., � October 1, 1986 and April 1, 1987 5% October 1 , 1987 and April 1, 1988 4 October 1, 1988 and April 1, ;1989 3 October 10 1989 and April 1, '1990 2 October 1, 1990 and April 1, 1991 1 October 1, 1991 and thereafter 0 {{ �, . II.. s, - 1 , k i. ' (d) The Bonds shall be redeemed in whole on 'any date, at a price equal to the principal amount thereof, plus accrued interest to the redemption date, in the, event that the aggregate amount on deposit in the Debt Service` Fund, the Capital Reserve Fluid and the Revenue Fund is sufficient to pay the principal of and interest on ail Fxmds that remain outstanding on such date. ; In the event of a redemption in part pursuant to this Section 602, the { Bonds to be redeemed shall be selected by .lot from within a maturity and redeemed on a peasonably proportionate basis from among all the then-existing maturities of the Bonds (excluding from the Bonds maturing on October 1, 1994, an amount equal to the'Capital Reserve Fund Requirement) , such basis to be determined and erfec tuated as nearly as practicable by the 7y-ustee by multiplying the total amount of moneys available to redeem Bonds on the date fixed for redemption (excluding moneys representing prepayment penalties paid by one or more Lenders) by the ratio which i the principal of all Bonds outstanding in each maturity (excluding from the Bond maturing on October 1,. 199 +, an amount equal to the capital Reserve Fund Requirement) bears to the principal amount of all Bonds then outstanding (excludir from the r Bonds matur on October` 1, 1.994, an amount equal to the Capital Reserve Fund ing Requirement) . Bonds shall be redeemed only in integral multiples of $5,000 and, except for redemptions pursuant to subparagraph (a) above, not less than $50,000 principal amount of Bonds shall be redeemed on any date fixed for mandatory 3 redemption# s s on or before the fortieth (40th) day prior to each such mandatory re9emp- tion date, the Trustee may apply moneys on deposit in the Redemption Account to the ptArehase of 'outstanding Bonds subject to such mandatory rederription at a price (excluding accrued interest but including any brokerage or other ahargos) not ex t deeding the principal amount thereof. In such event, the Bonds so purchased shall be cancelled arcd the amount of such mandatory redemption payment shall be reduced by the aggregate principal amount of the Bonds so.pu,rehased and cancelled. i SSMON 603. OPTIONAL MEMPTIONe The Bonds -maturing on or, after October 10 1.9_1 shall be subject to redemption on Oetober' 1, 1.9�, or on any interest payment date thereafter, at the option of the Tssuer, in whole or in part i by lot in such manner as in the Trustee's sole discretion is may deemL appropriate and rain (the Trustee shall promptly notify the Issuer in writing of the Bonds or portions thereof selected for redemption) , from moneys derived from the proceeds of any issue of refunding bonds or the Issuer or from any other source, at a. price equal to the principal amount of the Bonds so called for redemption, plus premium set forth in the following schedule (expressed as a percentage of the principal j amount of the Bonds so called for redemption) , plus accrued interest to the ! redemption date; l r I -40- h , av a n I i1{,. 2 ti h Redemption Dates f Redemption 'remium October 1, 1986 and April 1, 1987 5% October, 1, 1987 and April 11 1988 4 . October 10 1988 and April 1, 1989 y October 1, 1989 and April 10 1;90 2 October 1, 1990 and April 1, 1991 l October 1, 1991 and thereafter 0 S In the event that the Issuer elects to redeem Bonds pursuant to this Section 603, the Issuer shall so notify the Trustee in a written request submitted to the Trustee at least 'forty Five (45) days prior to the applicable redemption date, and shall deposit with the Trustee prior to or upon such redemption date mp n at_ an amount .. .sufficient to effect such redemption. 1 SEMON 604. PARTIAL RFt)VpTION. In the event that a Fully Registered ! ! " Bond subject to redemption pursuant to this Article VI ''is in a denomination larger than $5oMt all or a portion of such Fully Registered Bond may be redeemed, k!k but only in a principal amount equal to $5,000 or an integral multiple thereof, Upon surrender of any Fully Registered Bonet for redemption in part, the Issuer ► shall execute and the Trustee shall authenticate and deliver to the holder thereof, at the expense of the Issuer, a new Bond or Bonds of authorized denominations in ! an aggregate principal amount equal to the unredeemed portion of the Bond so sur- rendered, which Bonds shall, at the option of the holder, be either a Coupon Bond or Bonds with All unmatured Coupons appertaining thereto (and any matured Coupons appertaining thereto in default) or a Fully Registered Bond or Bonds'. { k SECTION 6051 , NO'I'YCg OF RF.bEMPTILON, The Trustee shall give notice Or any � t redemption pursuant to this Article VI by publication' At least one (1) time in a I news paper or financial journal of general circulation in each of the city of Fort Worth, Tbxas and-the city of New Xork, New 'York, not more than sixty (64) days and s not less than thirty (30) days prior to the redemption date, . and, if any of the j Bonds to be redeemed in whole or in part am Coupon Bonds registered :as to' principal (except to bearer) or are Fully Registered Bonds by sending such notice by regis- tared or certified mail, riot more than sixty (60j and not less than thirty (30) days prior to the date fixed for redemption, to the Registered Owner of each such Bond- 'c at the address Shown on the Bond registration books, and to such holders of Coupon Bonds to be redeemed who have requested that the Trustee place their names on a list of }3ondholders under the provisions of Section 203 hereof at the addresses ` Shown on such list, If all of said Bonds to be redeemed in whole or in part are at that time registered as to principal (exc?pt to bearer) or fully registered, € such notice shall be by mailing only In the manner specified in the preceding f -41- 1 L _ f sentence. If 'notice is published as set forth above, neither the failure to give notice by trail nor any defect in any notice so mailed shall affect the validity of JJJ the proceedings for such redemption. Such notices shall state the redemption date, the redemption price, the amount of accrued interest payable on the 'redemp- tion' date, the place at which the Bonds are to be surrendered for payment, that from the redemption date interest on the Bonds will cease to accrue, and, if less than all of the Bonds outstanding are to be redeemed, an identification_ of tYie BOMB' or portions thereof to be redeemed. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Bondholder receives such notice. If, because of the temporary or permanent suspension of the publication Olt general circulation of any newspaper or financial ;journal or for any other reason, it is impossible or impracticable to publish such notice of call for redemp- tion in the manner herein provided, then such publication in lieu thereof as shall be determined by the Trustee shall constitute a sufficient publication of notice. ;.SECTION 606. PAYMENT UPON REDF.,MMON, Prior to each redemption date, s the Trustee shall make provision for the payment of the Bonds to be redeemed on such' date by setting aside and holding in trust, or depositing in trust with any rrx+unt from the Redemption Account or otherwise received by the Paying Agent, an a Trustee from the Issuar sufficient to pay the principal of and premium, if any, on such Bonds. Upon presentation and surrender of any such Bond at the principal corporate trust office of the Trustee or any Paying Agent, as the case may be, on or after the date fixed for redemption, together with all Coupons appurtenant thereto maturing after the date fixed for redemption (unless. sueh Bond is in fully registered form) , the Trustee or any Paying Agent shall pay the principal of and po4rd , it any, on :such Bond, from the moneys set aside for such purpose, If any m Bond that is not fully registered is presented for payment unaccompanied by all Coupons appurtenant thereto maturing after the elate fixed for redemption, the Trustee or any Paying Agent may waive the surrender, of such Go upona if there be furnished such security or indemnity as may be required to save the Issuer, the Trustee uric] any paying Agent harrniess . Interest on any Bond <oalled for redemption maturing prior to or on the date fixed for r be.payable �upa edemption shall n the ; presentation and surrender of the Coupon or Coupons representing such interest at the principal corporate trust office of the Trustee or any Paying Agent; provided, however, that in the ease of a dally Registered Bond, such interest shall be payable only to the Registered Owner of such Bond. 3, SECTION 607. DFEC`i' OF RmFI�pTrON• Notice of redemption having been � given as provided in Section 605 hereof, the Bonds or portions thereof designated for redemption shall he:ome 'due and payable on the date fixed for redemption and, unless the Issuer defaults in the payment of the principal thereof and premium, Y if any, thereon, such Bonds or portions thereof shall cease to bear interest from } t i -42.. 1iiM r I j 1 and after the date fixed for redemption and any Coupons appurtenant thereto motor- Ing after such date shall be void and no longer obligatory upon the Issuer, whuthar � E p ent on such date, Ail un or not such Fronds are resented and surrendered for r paid Coupons which appertain to Coupon Bonds so called for redemption which shall become payable on or prior to the date fixed for redemption shall continue to be payable to the bearers t}iereof upon presentation and surrender of such Coupons as provided in Section 202 hereof• If any Bond or portion thereof called for redemp- is not so paid upon presentation and surrender thereof for .redemption, such tion Bond is portion thereof shall Fontinue to bear interest at the rate set forth thereon until paid or until due provision is made for the payment of same. i APTICIX VII PAYrQF la; FUR'T'HER ASSMANCN.01 E SEC'T'ION 701• PAYNgQ\" OF PRIyCIPAL OR PPDF' ?TION PRICE OF AND It�FI�ERFST R ON BONDS `lhe Issuer shall promptly pay or cause to be paid the principal or redemption price of, and the interest on, every Bond issued hereunder aocordirV to , the terms thereof, but shall be required to make such payment or cause such payment to be made only out of Revenues. ` ` The Issuer hereby ,desipates thentrforithe Bonds E ► porate trust office of the Trustee as the principal Place for theaAonds, such appoint and Coupons, tend the Trustee as princio� Paying Ag » ment and desiGiation to remain in effect until notice of change {s hied with the I' J Trustee. } SECTION 702• DES20NATION OI' 'ADDZI'IONAL PAYING# AGFM80 ?he Issuer hereby } i coV @rants and agrees -to cause the necessary arrangementseto be made through the If Trustee and to be thereafter continued ror the designation of alternal Payinnt of Agents, if Pay, "and for the making- available of funds hereunder for the payme suoh of the Bonds and Coupons appertaining thereto as shall presented ,when due be pres at the prinoipal corporate trust office of the Trustee, or its successor in trust hereunder, or at the principal corporate trust office of said alternate Paying ` . 1 Agents ` G SECTION 703, FUMIM ASSURANCKS4 Rxcept to the extent otherwise provided f in this Indenture, the Issuer shall not enter into any contractor take any action he by which the rights of the Trustee or t Bondholders my be impaired and shay! , from time to time, execute and deliver such further instmentstwis Indenture$ further action as may be required to cart out the purposes The issuer shall< be entitled to reimbursement from the General Fund i 6 . k Se eti n . for any action taken pursuant to this � !z , i 4 -a3- a 7h'fi t r SI C'I'loN 704 , I��G+IUNIT.IF:S AW) LIMITATIONS OF �PCINSIBILIz " OF IS.Silr,Fi, The issuer shall be entitled to the advice of Counsel (who, except as otherwise provided, may be counfel for any Bondholder) , and the Issuer shall be wholly, protected as to action taken or omitted� fitted in good faith in rellanee on such advice, The Issuer may rely conclusively on any communication or other document furn.f.shed € to it hereunder and reasonably believed by it to be genuine. Rhe Issuer shall not be liable for any action (a) taken by it in good faith and reasonably believed by it to be within its discretion or .gowers hereunder, or (b) in good faith omitted E to be taken by it because such action was reasonably believed to be beyond its dis- , eretion or powers hereunder, or (e) taken by it pursuant to any direction or instruction by which it is governed hereunder, or (d) omitted to be taken by it ' by reason of the lack of any direction or instruction required hereby for such i action; nor shall it be responsible for the consequences of any error oPJudgment reasonably made by it. The Issuer shall in no event be liatle for the application or misapplication of funds or for other acts or defaults by any person, except its , own officers and employees. When any payment or consent or other action by it is called for hereby, it may defer such action 5 pending receipt of such evidence (if any) as it may require in support thereof. The Issuer shall not be re uired to take any remedial action ;other than the iv q giving of notice) unless reasonable indei� f nity is furnished for any expense or liability to be incurred thereby, other than liability for failure to meet the standards set forth in this Section. As provided herein and in the Agreement., the Issiler shall be entitled to reimbursement for its expenses reasonably incurred or advaines reasonably made, with interest at the I rate borne by the Bonds, in the exeroise 'of its rights or the performance of its obligations hereunder, to the extent that it acts without previously obtaining inderrinity. No permissive right or power to act which it may have shall be con- f F strued as a requirement to act; and no delay in the exercise of'a right or power shall affect its subsequent exercise of that right or power, SECTION 705, FINANCING STATEMM, The Issuer and the Trustee "shall cause this Indenture or a financing statement relating thereto to be filed in such manner and at such places as may be required by fully to protect the right, ' title and 'interest of the Trustee in and to the Trust laatate or nny part thereof: j 1 From time to time, the Trustee may obtain an opinion of Counsel setting forth what, I ; if any, a.otions by the Issuer or the Trustee should be taken to preserve the lien 1 of this Indenture upon the Trust Estate or an;; part thereof. The Issuer shall execute or cause to be executed any and all further instruments an may be regQirel by law or as shall reasonably be requested by the Trustee;for such protection of the interests of the Trustee and the Bondholders, and shall furnish satisfactory evidence to the Trustee of filing and refling of such instrument and of every y ; additional instrument which shall be necessary to preserve the lien of this Indenture upon the Trust Estate or any part thereof until the principal of and Interest on the Bonds issued hereunder shall have been paid. The Trustee shall, if necessary, execute or join in the .execution of any such further or additional ► " instruments and file or, join in the filing thereof at such time or times and in such place or places As it may be advised by an opinion of Counsel will preserve 4' the lien of this Indenture upon the Trust Estate or any part thereof until the aforesaid principal and interest shall have been paid. i 5 rqq. i I _ ` r L r 'r 1 SECTION 706. LIST OF BONDHOLDFM O PRFSERVATION OF `INFORMATION, CO1VNI- CATION TO BONDHO.LDF.RS. (a) 'Ile Issuer agrees to furnish or to cause to be furnished to the lirostee semiannually, not less than 45 days nor, more than 60 days after each annual, interest payment date, and at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any'.sueh request, a list t ► in euoh Form as the Trustee may reasonably require containing all the information In the possession or control of the Issuer, or any Paying Agent of the Bons (other ,. . than the Trustee) , as to the names and Gddresses of the holders or owners of the Bonds, obtained since the 'date as of :which the next previous Jist, if any, was furnished, prsovided that Any such list may be dated as of a date not more than 15 � . days prior to the time such information is farni,shed or caused to be furnished and need not include information reeeived, after such date. The Trustee shall ,preser've, in as current a form as is reasonably practicable, the names and addresses of Pond k holders contained in the most recent list 'furnished to the Trsustee 'and the names and addresses of Bondholders received by the Trustee in its capacity as Bond Regis- trar 'or otherwise purst,ant to this Indenture, inoluding the names and addresses of all holders of Coupon Bondn who may request that their names and addresses be t placed on said list by filing a written request therefot, with the Trustee, which request shall include a statement of the principal amouric of ,Bonds' held by such holder and the numbers of such Bonds. The Trustee may destroy any list furnished to it upon receipt Of a new list so furnished , (b) If three; or more Bondholders apply in writing to the Trustee', and " furnish to the Trustee reasonable proof that each such Bondholder has owned a I Bond for a period of At least six months preceding the date of such application, and such &pplication states that such Bondholders desire to oomm=Jca,te with other 5ondholders With respect to their rights under this Indenture -or under the Bonds and is accompanied by a copy of the fo'rm.of proxy 'or other communication which `such'Bondholders propose to transmit, then the Trustee shall, within five 1 business days after the receipt: of such application, at its election., either; , (i) afford such Bondholders access to the information preserved at the time by the Tctustee in acoovdance with subsection (a) above, or (ii) inform such Bondholders as to the approximate number of Bondholders whose names and addresses appears in the information preserved at the time by the Trustee in accordance with subsection (a)a above and� as to tapproximate h e pp cost of mailing to such Bondholders tbf., form of proxy or other comnninication, If any, specified in such application. I -s5- , i If the Trustee shall elect not to afford such Bondholders access to such;' information, the Trustee shall., upon the written request of such Bondholders, mail to each fiondhelder whose name and address appears in the information preserved at the time by the Trustee in accordance with subsection (a) above, a;copy of the i form of proxy or other comahieation which is specified in such ;request, with reasonable ,prOmptness after a tender to the Trustee of the material to be mailed - t and of payment, or provision for the payment, of the reasonable expenses of mailing, Al unless within five days after such tender, the Trustee shall mail to such B6ndhold- ers, 'together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the Bondholders or would be in violation of applicable law and the Trustee shall be relieved of any obligation or duty to such applicants respect- ing their .applicat.ion. Such written statement. shall specify the basis or such opinion. If this Indenture Is at the tiine qualified under the Trust Indenture Act r . of 1939, as amended, then the Trustee shall also mail slaoh material to the Connis- E sign. If the Commission, after opportunity for a hearing upon the objeotions specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining gone or more of such ob,�eotions,' the 'Commission shall find, after notice and opportunity pportunity for hearing, that all the objections sc sustained have been met and shall enter, an i order so declaring, the Trustee shalL mail copies of such material to all such Bondholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (e) Every Bondholder, by receiving and holding the same, agrees. with the Issuer, the Lenders and the Trustee that neither `the . Issuer., the fenders nor ., the Trustee shall, be held accountable by reason of the disclosure of any sigh information as to the names and addresses of the Bondholders in accordance with f subseotion {b) above, regardless of the source ' fvom which such information was derived, and, that the Trustee shRil not be held accountable` by reason of mailing y material pursuant to a request made under subsection (b) above , SSMON 707. USE OF PROOms. The Issuer covenants that: (a) at least j ninety percent (90%) of all Lender Loans to be made {other than amounts repres(?nt- ing Lenders ' respective shares of costs or issuance of the Bonds) , by amount of cost outstanding, are and shall be evidences of loans to provide residential rental property, and (b) at least ninety percent (90%) of all of the amounts received by i the Issuer with respect to the Lender Loans shall be used for one or more of the Collowjng purposes ; to pay the principal of or interest or premium, if any, on, or otherwise to sery±ce the debt on, the Bonds; to reimburse the issuer or pay for administrative costs of issuing the Bonds; to reimburse the IssuC,° or to pay for administrative and other costs and anticipated future losses directly related to i I I f i .46. f w. y specified in the Progra , to make additional Lvans�nds at the next�earliestoi�ses s$ils date of the Program; or to redeem and retire way of limitation,' the Issuer represents, redemption. 7xt addition, but not by if any, the Issuer wiit`estab- ; y covenants arnt agrees that t4 the extent necessary for the same general. pur- I (' lish or continue a program for so as to insure compliance with the covenants of ! poses specified in the Pr'Og I. the irmtiediately preceding sentence. St�^TYON 708, REPORTS OF TRUSTEE. Not inter than the ninetieth (94th) each scheduled interest payment date on the Bonds, the Trustee day following forth: ( i) .amountg witty K shall. prepare and file with the Issuer a report sett the balance on deposit 3 r drawn from and deposited in each Fund and Account,payment date for which such report !n each Rind and `Account as of the interest all p obligations ein es redemption { F is prepared ; (iii) a brief description oamountppleriito the 1paym invesUnents 5 in each ,,und and Account; and (iv) the id or t�(Nleemed. of Bonds and a description of w h o�iesrof the nannuaI udit required by Section Copies of r ?cYh reports, along holder of any 70�3 ,of this Ind shall be malted or delivered to any } upon request nd a cost not to`exceed the Trustee' s actual casts of duplication, { and mailing or rdel.ivery. AUDIT. Not later; than the ninetieth (90th) day SECTION 709• ANNUAL AU on the Donds , the Trustee shall cause an a following each principal payment date to the Fonds an annual audit of the books and records of the Issuer perta�laocountant and to # th$ `Program t0 be prepared by an independent certified pu aith copies of the th filed wino Issuer. Copies of such annual audits , ri7ong atlnfil reports required. , Section 708 of'this. Indenture, shall be mailf�d or ganci upon ,request' at a cost not to exceed the �- delivered to any holder of any or del.iveryt I 'Iristeets actual cost of duplication and mailing CASH FLAW STAihmFN` s 'IYte Testier, on or before t'ne DeLiv� SF.�C'I'IOi4 710, which ,the Issuer desires to withdraw moneys fresh the ery 'Date, and at;any Name at Sea tlon 710'•' ¢ 3ener l ,^and in accordance With Sertionr3e�9�n)aacordancen with u�t, sha11, ftie with the Trustee a cash flow statement prepared t;a;o�•ent ?or purpl�ses o£ this Cndenture, a ca rflorx statement f rthlther�scheduled debt `ser- prepared by or on behalf of the Issuer, (i) setting vi.,e on the Fiends .for each, year commencing with the Year ,,,,ring which such state- t is dated and ending with the year of the final ciipated fees and charrgestOf the ~ men, { cip3Had Collateral Purchase Agreement fie , the the anticiplL'eci administrative ©x-� Tr<astee and any Paying Agent for each such year, ear, the salieduled. penses of the Issuer in connection with the Program for each such year,Program re- payments on the Lerider Loans for eachfrom the investmnenteor�theemoneys held in cer ceipts (including earnings resultl g I Lain of the �Urids and Accounts) for each Ouch year; and (11) Mmonstratir�g that r 1 ..47- . i a:r. y ,as a 3 such payments and other revenues wi.l.l bio sufficient to provide for the payment k during each such year of such debt service, fees and charges and administrative expenses. SECTION 711 RIGHTS UNDER THE, LWER LOAN DOC'UMENIS, The Lender Loran I Documents set forth certain covenants and obligations of tho Issuer, the Trustee i and the Lenders, and reference is hereby; made to the Lender Loan Documents for a ; . detailed statement of such covenants and obligations,; So Ion$ as any of the Bonds remain outstanding, the issuer and the Trustee shall faithfully and punctually perform and observe all obligations and undertakings on their part to be performed and observed under the Lender Loan Documents. The Issuer covenants to maintain, at all times, the validity and eftec- tiveness or the� itender shall Loan Documents and (except as expressly permitted by the Lender take no actl,on, shall permit no action to be taken by Lf others and shall not omit to take any action, which action or omission might release any' Lender from its liabilities or obligations- under t;he Lender Loan Documents or result in the surrender, termination, amendment or modifioacion of, , or impair the validity of the Lender Loan Documents . ` The Issuer covenants to diligently enforce all covenants, undertakings and obligations of the Lender under the Lender Loan Documents and hereby authorizes { and directs the Trustee to enforce any and all of its rights, tinder the Lender Load Doctents on behalf of the Issuer and the holders of the Bonds and the Coupons, } SECTION 712. POSSESSION AND INSPECTION OF' LENDER LOAN DOCUMENT'S. The. � t= Trustee shall retain possession of the Lender Loan Docunents on behalf of the ` Issuer and shall release same only in accordance wit'n the provisions thereof. 'The f Lander Moan Documents shall be available for inspection at reasonable times, under reasonable conditions , by the I8suer, the fenders and any holder or owner of any Bond. SECTION 713 , POSSESSION OF LF11DER- LOAN COLLATERCL; ADMTNISPRATI'ION OF i L,EflDER LOAN AORE1r 11FRTS. The Trustee, as provided in the Lender Loan Agreements r 4 Y ri , p shall retain possession of thy. Winder Loan Collgteral., in,.t.a�ir�g any additions Thereto, substitutions therefor and pro^eeds thereof, and all related tlocunents and instrunents required by the Lender Loan Agreements to be deposited with the s Trustee, and shall release dame only in accordance with the Lender Loan Agreements. . The Trustee hereby covenants and agrees to take all actions reasonably required to !, administer the Lender Loan Agreements in accordance with the provisions thereof, including, without limitation, the receiving, holding and release of the Lender i f,oan Collateral, the cooperation with the Bank With respect to its determination of the yield on the Lender Loan Collateral and the valuation of the Lender Loan Cal— 5 lateral, and the disposition of the Lender Loan Collateral upon an event of default under the L;eender W sri Dociiments, including the salA of the Lender Loall Collateral., If appropriate, to the Bank pursuant to the Collateral Purchase Agreement, a r t: QiQi i . i f . a ..> SF,CTION 714, RIOHTS UNDER PMULATORY AORa OM, 'Ire Regulatory Agree ments will set forth certain covenants and obligations of the issuer, the Trustee and the Owners .relating, to the aoquisitton, construotion and operation. of the r' bavelopwnts, 'and, reference i,s'hereby made to the Regulatory Agreements for a detailed statement of such covenants and obligations. , So long as any of the Bonds remain outstanding, the is and the Trustee shall faithfully and punctually } perform and observe all obligations and undertakings on their part to be parformed and observed under the Regulatory Agt' nts The Issuer covenants to (maintain At all times the va,iidit t tivenoss of the Regulatory , y and effec- g y 1�raernents and (except as expressly permitted by the Re�ul.atory Agreements) shall take no action, 'shall permit no aotion to be taken by others aM shal.I not omit to tape any action, which action or omission might j please any Owner rrori its liabilities or obligations under a Regulator Agreement or resuit . in the surrender; terniination, amendment or modification of, or impair the validity ofj a Regulatory Agreement . 'Ire Issuer covenants to enforce diligently all covenants, undertakings and obligations of the owners under the Regulatory Agreements and hereby authorizes reements on 'e Th l. f ee to enforce any and all of its rights -ender the Regulatory and directs the Ti~i,lst of the Issuer and the holders of the Gonda and the Coupom . kOH'I'5 UNDER Dh D RF "t'RIGY['IONS. Ire Deed .Re"st'riations will s set forth certain covenants and obligations oh the Owners relating to the operation t of_ the pevelo�nents; and refereneP is hi r�eby made to the ,Deed R6strict ons for' a detailed ' tatement of such covenants and_ obl.ititions. , The Issuer covenants to main- " taint at all times during the stated terns thereof, the validity and' effectiveness 1 of the tk'ed Restrictions and except as expressly permitted by ttie Deed 'Restrotions) , Shall take° no Action; shall pet",, no aot.ton to', be taken by others and 'shall not r omit to take any aetiony which aotian or+ emission mi t release 7 Bh any crier from its covenants and obligatiorw under any of the Deed Restrictions or vesult in the surrender, termination, amendment or modification of, or, impair the VAltdity of, any of the covenants to enforce di.li.gentl.y ,%11 covenants, 1undertakings and obli -� tions of the Owners under the D,led Pr.;striet+.ons, ARTICLE, VIII i ® DF>,,'FAUUT PROVISIONS AND RijoMigs OF TRUuTk : AND BONDHOLDERS SM`tloN 801 . DFNWI; Wr--I 'S OF Di�YAULT. If any of the following eve ;! nt9 00 curs, it is hereby defined as 'and ,declared to be and fo constitute a default or an event of default ; 1 ! 1 , ,: '- _. ,. . it -; •, . .r... ..._,; , . ., . .:.r. ter;a�Feit?.. . . .t 'aer, i.n';;: #le.. i I r z� (a) Failure to make payment of any in8(alJznent of interest upon any goond when the same shall have become due and payable; (b) Failure to make due and punctual payment of the principal of and ' premiurrl, if any, on any Bond, whether at the stated maturity thereof, or ? upon proceeditngs for redemption thereof or upon the maturity thereof by decl.aratton; (c) Any material breaeh' by the Issuer of any representation or warranty made in this Indenture or the Bonds or failure by the Issuer to observe and 1 perform any covenant, conditton or agreement on its part to be observed or performed under the Indenture or, the Sonds, other than as referred to ttr sub- i sections• (a) or (b)` of this ;.Section, for a ;period of .sixty (50) days after,+ written notice specifying such breach or failure and requesting that ,it be remedied, given to the Iss%ier by the Trustee or by W�e ,h lders of not less than twenty-five percent ('25%) in aggregate principal, amount of the Bonds then oiitst�tndir stnleryc' ,{i) the Trustee shall agree in w►Fir,ir�f to'. gn •extisnsion , of such time prior to its'expira,tion or (ii)` if the t, .grit ;,r tail.ut^e be such ;,'• that it cannot be corrected within the; applicable period ).otichtive` action '8L instituted by the Issuer within the applicable' perirxy end is betrtr dili� { F Sently pursued; provided , however, that a breach of the, covenants ' set; forth f in Sections 503 or 707 hereof or of any other covenant with respect to the tax e�tempt status of interest on the Bornds shah. not constitutE> an event of defa4t hereunder; y (d) An ojMee of relief shall be- issued by the Bankruptcy Court df the � i United States,•bistriet Court, having v�_3.id jurisdiction.* granting the Issuer rel.l.ef' 1,a)der the Bankruptcy Reform Act o.. 1979, as amended, or any other courb having v;4id jurisdiction aliall issue an order or decree under appli cable tell ral ;or state law ,provldIng for the appointment `of a receivert . liquidator, a?t,s,i:gnee, trustee, sequertrator (or other similar orrtclal� of the i3,31xer or tin y slabstan ;Ial, part or ltq property, affairs or assets , and i the conclnuance of arty sucft decree or order unstayed and in effect for a fp.riod of sixty (50) ronseicutive days; or (s) The Issuer shall have consented to the institution of proceedings 1 Lion rkan ragaedi' t , or it shale. have consented to the institu- In baofa yes` pins+ngitg or the Issuer under any federal or state insolvency laws, or ;he Issuer' shall ,have consented to the filing or any petition, applj,(,ation or, o(mplaint_ seelc� the appointment of a reoeiver) liquidator, asitgnee, ; 1+ truaf,6)e, sequestr!sttSr (or other sirntl.a,r olTicial) of the Issuer or of any , substantial partiof its property, affairs or assets'. t I ti t } .50- �F 3 SECTION 802. ACCELERATION. Upon the occurrence or an event of default and so long as such event is continuing the Trustee may, and upon the written request of the holders. of not less than 25% in aggregate principal amount of Bonds then, outstanding, shall, by notice in writirg delivered t4 the Issuer and the Lenders, declare the principal of all Bonds then outstanding and the interest accrued thereon immediately due and payable, and subh principal and interest shall thereupon become and be immediately due and payable, Upon any such declaration, k the 'Trustee shall declare all indebtedness payable under Seotion 7e3 of the I V. Lender Loan Agreements to be immediately due and payable in accordance with ,Seo- ' tion 541 of the Lender Loan Agreements , a � [The above provisions o£ Sections 801 and.802 hereof, however, are sub - The to the conditions that if after the principal of all Bonds then outstanding shall have been so declared to• be due and payable, all arr?ars of interest upon such ?3oonds, and interest on overdue installments of interest (to the extent s permitted by at the rate borne by the Bonds , and the principal and reuemption premium, if any, on all Bonds then outstanding which shall have become due and payable otherwise than by acceleration, and all other sums payable under this r indenture, except the principal of, and interest on, the Bonds which by such deelaraticn shall have become due and payable, shall have been paid by or on behalf of 'the Issuer, together with the reasonable expenses of- the Tvustee:and of the holders of such Bonds , including reasonable attorneys' fees paid or incurred, then and in every such case, but only upon receipt by the' 'Irzstee of, the express prior, written consent if the holders of not less than 25% in aggregate principal i amount of the Bonds then outstarmiing shall have made the ;written request specified in the '£irst paragraph of this s6ction, of the holders of a majority in principal amount of the Bonds then ccrtatanding, the 'Trustee may annul sizeh declaration of maturity and:;lts •ccawuenoes, which waiver r6nd annulment shall be binding upon a'11 Bondholders; bait no such waiver, resoission acid annulment shall extend to or affs,ct any subsequent default or impair any right or remedy consequent thereon. In the • case of any 'such annulment, the Lenders, thr# 'Issuer, "the Ti ustee and the 'Bondholders $ j shall be restored to their former positions• and rights 3.andei^ this Indenture, t Nothing contained in this Sectiori 802, however,' shall- be construed t6 ' allow the 'Trustee to permit its rights on 1>ehalf of the Bondholkiers under the Cal- lateral Purchase Cormi.tment. Agreement to b3 reduced, to lapse or otherwise be � exti,ng� ishe<i. ' ; SECTION 843* RE, EDIFiS; RIOR11b OF BONDHOLD RS, Up,m the occurrence of an event of default the Trustee may pursu,y any available� rmrledy at law or iii equity by suit, action, mandamus or other pro(,eedi.ng to enforce the payment of the principal of, premium, if any, and interest on the Bons than outstanding, acid to enforce and compel the performance of tho dutiE�s and obli.geltions of tho Islg+zer Ens herein set forth. In addition, the Vus?fee may, withalat 'notice ! to the Issr,er "or 1 ... ..the Lenders, exercise any and all remedil,s- raft'orded Issuer tinier ?[qy. Tkjd6r ;: t Loan Agroement or under the Collateral P�vchase A,�rec�0rit in its namfi or bite MWt of the Issuer without the necessity of ,joining, the lamer, ' I �•.aJiJrF l� . j.lrhl+9., rilhk{...h2lvsNil. .5. 1':df...! .L,. ! -. ..Y •IrTOf r,31 f.,�' .X2+1•� 1.3�A , 1 1 a Tf an event of det'ault shall have occurred and be continuing and if requested so to do by the holders of not less than 25% in aggregate principal amount of Bonds then outstanding and indemnifled as ,provided I in Section 901 hereof, ;t y obliged to exercise such one or more of the rights and powers s conferred by b $this Section X03 and Section 802 hereof as the 'L'rustee being advised z e by Counsel shall deem most expedient in the interests of the Bondholders. . No remedy by the terms of this Indenture conferred upon or reserved to j the Trustee (or to the 'fiondholders) is intended to be exclusive of any other remedy, ( but each and every such remedy shall be cumulative and shall be in addition to any other remedy given; to the 'trustee or to the Hondhplders hereunder or now or here- after existing at law or In equity or by statute No lelay or omission to exerctse any right, . power or remedy accruing upon any event or default shall, impair, any such right, power or remedy or shall be con- h $trued to be a waiver of any such event of default or acquiescence therein; and every such right, power or remedy may be 'exercised from time to time and as r oaten as may be deemed expedient, No waiver of any event or default hereunder, whether by the Trustee or by the Bondholders, shall extend to or shall affect any subsequent event of default t F or shall impair any rights or remedies consequent thereon. ' 89 MON 8040 �TQiC!' OF' HONDHOZaDE S `Ii0 OLRDC'l' PROCEI�INr3U. Anything in this Indenturo to the contrary notwithstanding, the holders of not less than a majority iri aggregate principal amount or Bonds then outstanding sh4 have the , h right, at any time, by an instrtanent or instnzz ents in writing executed and Mliv- ered to the 'trustee, to 'dire¢t the time, method and place o£ 'condueting `all proceed ings to be taken in connection with the enforcement of the terms and conditions of this Indenture,' or for the appointment of a receiver or any other proceodings 'here w under; provided, that such direction shall not be otherwise than in aecovdm. ce with s the provisions or law and of this Indenture . r I p to any right given or action taken under the vov aions1of this Article SECTION APPLICATION OF MONEYS, All mnnt s recel eri b t sa pursuant p Article ' shall, after payment of the costs and expenses of the proceedings resulting in the � collection of such moneys and of the expenses, liabilities and advances incurred or made by the 'l'rustee and its Counsel, be deposited in the Debt Service F)zd and all � such moneys to the Debt Service Fund shall be applied to the payment of the pri,nei- i teal ;and premium, it any) and interest then due and unpaid upon the Fonds, without f preference or priority of any kind, ratably, according to the amounts due and 'pay- ; able on such Bonds for principal (and premium, `tr .any) and interest, respectively, to the persons entitled thereto without any dl3crimirtiatton or privilege. aS y 3 ' 9 4 a �52- Whenever moneys are to be applied pursuant to the provisions of this Section, such moneys shall be applied at such times, and from 'time to time, the Trustee shall"detNrmfne. Whenever the 'T'rustee shall apply such moneys, �, shall `fix the date (which shall be an interest payment date unless it shah de am able) upon which such application is to be made and upon ' another date more suit, id on such date shall isease such date interest on the amounts of principal to be pa i to adcrueo' The Trustee shall give such notice as it may deem appropriate of ';he deposit with it of any such moneys and of the fixing of any such date. { Whenever 'all principal of, premium, if any, and interest on all Bonds provisions o have been id ender the f this Section 805 and all. expenses and charges of the Trustae have been paid, any balance remaining in the Tot Service Fund shall 3 be paid to the Issuar as provided in Sec 310 hereof 5FG"t'TON SOb, f t IFS V1?S`i'ED IN TFlUST�. All. rights of action (including the right to file proofs of claims) under this Indenture or under any of the Bonds 7 or Coupons may be enforced by the Trustee without the possession of Any of the Bonds or Ccupons or the production thereof In any, trial: or other proceedings relating thereto and any such suit or proceeding instituted by the 'Trustee ghall be brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any holders of the Bonds or Coupons, and any recovery of Judgment shall be For the equal and ratable benefit of the holders of the outstanding Bonds and Coupons. SBCTI( hN 807 • RI6M AND RR4MIES OF` BONi)xoL IE RS. No holder of any Bond or Coupon shall have any right to .institute any suit, action or proceeding in equity or at law for the enforcement of this Indenture or roe,` the execution of any trust thereof or rot, the appointment of a receiver or any other remedy hereunder, unless (i) a default has occurred of. which 'the Trustee has been notified as provided + in subsection (g) of Soo hereof, (ii) such default sharil have become an in event of derault, ( iii) the holders of not less than twenty-five par. Cent (25�) aggregate principal emou�t of Bond outstanding shall have made written. request to the Trustee, shall have offered the 'Trustee reasonable opportunity either to pro- teed to exercise the powers herein granted or to ,institute such Action, suit of proceeding in its own name, and shall have offered to the Trustee r rerfuse to pro- rtded. in Section y01, an3 (iv)' the 'Trustee sha..U. thereafter fell or refuse to ! exercise the pavrPrs herein granted, or to institute such action, suit or proceeding I in lus own name; and such notification, request and offer of opportunity. and indem- � tltt are hereby declared in every ca at the option of the Trustee to andOtodiantions { y precedent to the execution of the powers and trusts of` this Indanture, Y action or cause of action for the enforcement of this Indenture, or for the appoint t meet of a receiver or for any other remedy hereunder. [No one or more holders of the Bands shell have any right in any manner whatsoever to enforce any right hereunder except in the manner herein provided, and all proceedings At law or in equity Sh JI. be instituted, had and maintained in the manner herein provided and for the � equal and ratable benefit of the holders of all Bor0s and Coupons then outstanding. r �Jothing in this Indenture contained shall, howevdr, affect or impair the right of t of the principal of, rrernium, if any, and any Bondholder to enforce the paymen interest on any Bond at and after the maturity thereof, a r i F.t'k�d7R I f SFCTION 808 . TElttC ATION OF pROCFhq)INOS. In lase the Trustee shall have proceeded to enforce ► any right under this Indenture by the appointment .of a receiver or otherwise, and such proceedings shall have been discontinued or soap doped for any reason, or shall have been determined adversely, then and in every such case the Issuer, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, And all rights, remedies and I r powers of the Trustee Shall continue as if no such proceedings had been taken, 8FXTION 809. WAPMtS by E'VENT'S OF D8FAULT. The Trustee may in its discretion waive any event of default hereunder. ,and rescind its consequences and shall do so upon the written request of the holders of not less than a majority in Wregate principal amount of all fonds then outstanding, provided, however, that there shall not be waived (a) any event of default in the payment of the principal of, or premium on, any outstanding Bonds when due (whether at maturity or by redemp- tion) or (b) any event of default in the payment when due of the interest on any # suchrFonds$ unless prior to such waiver and rescission, all arrears or interest, with interest (to the extent permitted by at the rate borne by the Bonds .on overdue installments of interest and all arrears of principal and premium, if any, when due, as the case may be together with the reasonable expenses' of the Trustee and of the holders of such Bonds,' including .reasonable attorneys' fees paid or, � incurred, shall have been paid or provided tor. In the case of any such waiver and rescission, ar in case any proceeding taken by the Trustee on account of any {� such default shall have been discontinued or abandoned or determined adversely, thar� and in every such case the Issuer, the Trustee and the Bondholders shall, be restored to their former ,Positions and rights hereunder, vespeotively, but no such waiver and rescission shall extend to ,any subsequent or other default, or impair any right consequent thereon. All waivers under this indenture shall be in writings ` and a copy thereof shall be delivered to the Issuer and to the Lenders. s ARTICLE IX THE TRUSTFS $XTION 901. ACCEPTMICE; OF T E TRUSTM, . The Trristee hereby accents the trusts Imposed upon it by this Indenture, represents and novenants that it is fully empowered under the applicable laws and regulations to accept said trusts, and agrees to perform said trusts, but only upon and subject to the following express tetras and conditions, and no implied covenants or obligations shall be ! read into this Indentura against the Trustee; (a) the Trustee may execute any of the trusts or li powers hereof and perform any of its duties by or through attorneys, agents, receivers or employees and shall not be responsible for the acts of any attorneys, agents . or receivers .appointee by it in good faith And without negligence, and ,shall ; be entitled to advice of c',ounsel concerning all matters of trusts hereof and I the duties hereunder, and may in s1.L cases pay such reasonable romponsation jt % I p ¢, to all such attorneys, agents, receivers and `employees as may reasonably be employed in connection with the`trunts hereof, The Trustee may act upon the opinion or advice of Counsel, The Trustee shall not be responsible for any f loss or damage resulting from any action or non-action in good faith in reli- ance upon such opinion or advice. (b) The Trustee shall not be responsible for any recital herein or in the Bonds (except with respect to the certificate of the Trustee endorsed on + the Hands) , or for the validity of the execution by the Issuer of this Inden- ture or any instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended ; to be secured hereby. The Trustee shall not be responsible or liable for any loss suffered i' con- nection' with any investment of funds made by it in accordance with Article V hereof including, without limitation, any loss suffered in connection with the sale of any invesbnent pursuant to Article V hereof. ; (c) The Trustee shall not bG accountable for the use of any Bonds authen- f ticated or delivered hereunder. The Trustee may become the owner of Bonds with the same rights which it would have if it were not Trustee, (d) The Trustee shall be protected in acting. in good faith u notice, request any � , resol tion u , consent, certificate, affidavit, letter, telegram � or other paper or document; or nral communication or direction, believed to lie genuine and correct and to have been signed or, sent or given by the proper , person or, persons, including a certificate to the effect that no Act of �,1ilc ruptcy has occurred . Any action taken by the Trustee pursuant to this Inden- ture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the owner or any Bond shall he conclusive and binding upon all future owners of the spore Fond and upon Bonds issued in exchange therefor oil upon transfer or n pace '� thereof. i l } (e) As to the existence or non-existence of any fact or as to the Sur- ficiency ur validity of any instrument paper or proceeding', the Trustee shall bo` entit.l.ed to rely upon a certificate signed on beha � � if of � ; . the Issuer by its Prestdent, Vice President or Secretary as sufficient evidence of the F: facts therein contained, and prior to the occurrence of a default of which l $' the Trustee has been notified as provided in subsection (g) of this Section, or suboequent to the waiver, rescission or annulment of a default as provided t in Article VIII hereof, shall also be at libefty to accept a similar certifi- cate to the effect that any particular dealing, transaction, or action is ti necessary or expedient, but may at its discretion secure such further evidence � ,r deemed necessary or advisable, but shall in no Case be bound to secure the l same. The 'Trustee may accept a certificate signed on behalf of the Is,31 by the Secretary to the effect that a resolution in the form therein set forth has been adopted by the Issuer as conclusive evidence that such resolution has been duly adopted, and is in full ,force and effect, a t as i n T: 3 r {fJ The, night of the Trustee' to do things enunerated in pemitssive and the Trustee shall not this Irxiernture'shall not be construed as a duty , V, be liable in the performance Of Its obligations hereunder except for its negligence or willful default. f (g) The Trustee snail not be required to take ,notice or be deemed to have notice of any default hereunder except failure'ba tobesmad by Article ha ents to the Trustee 'require I to be made any of,thy. lYm 4 III unless the Trustee shall be s�eoifcally notified infvitr�ting centu(25%) f the Issuer or the holders of at least twenty- Pe default by amount of all Bonds then outstanding• ?s ' in aggregate principal lay, author- , .L an and all reasonable times the Trustee, and resentatives { } A Y engineers, accountants an p C tzed agents, attorneys , experts, eng � ail of the Developments includ-- k shall have the right fully to inspect' any rs and . to or the the from ing 31 books, page t , pertaining to the Develofxn and in regard thereto his may be desired. ( i} e s1:s11 not be required to give any bonds or surety in qhe Tvustp j ct of the execution of its 'trusts and powers hereunder. t respect t ; .Before taking any'Action under Article MI hen eof or Yhiuirecthat ; at the r�equeat or drection 'af the Bondholders, the Trustee may req k a satisfactory� Indemnity bond be furntshed by the Bondholrotect i,t aga�t bursement of a.L expenses to which it may be put and to p all liability, except itability `which :is adjudicated to have t,esulted from action so taken, jk its negligence or wiL] ful default in connection with any. ' 1 A ent shall, until i f. { ) AIL moneys received by the Trustee or any Paying g used or applsed or invested as herein provided, be held in trod 'for romother purp4s s fo.r which they. were received but need iNeitheretheTrustee)nor any +' funds axuept 'to the extent rewired by law, interest on any mt�Aeys received Agent shall. be under any 'liability for t paying g upon, � hereunder except such as may be agreed ' he occurrence of an event of default speci- (l) The mruscee, prior to t of all events of' K Pied in Seotion 801 of this Indenture and after the curing ich may have occurred, tundertakes to perform such duties and default rrh Y set forth in this Indenture , such duties as are specifically the Trustee may conclusively rely, as to absence of bad faith on its part, the trutta of the statements anions furntshednrosthe Ti ustee and gconforming to the . j upon certificates" or p s case of any such requirements of the rovtsion hereof are speelfJoaliy requiredito bees or 1 f opinions which by y p be under a duty to examine js fuvntshed to the Trustee, the Trustee shall i, the I4 1 J I i . r,3. 4t'�, x same to determine whether or not they conform to the requirements of this t Indenture. In case an event of default has occurred (which has not been aired) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of ,are and skill in their exercise, ass prudent man ,would exercise or use under the etroumstances in the conduct of his own affairs, (m) Mo provision or this Indenture shall be construed to relieve the Trustee from ltabt.lity for its own negligent action, its own negligent failure " } to act , or its own wilful misconduct, except that: � ;i) this subsection shall not be construed to limit the effect of subsection (1) of this Section; , ( it) the Trustee shall not be liable for any error of Judgment ; made in good faith by an officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent ; facts; (iii) the '.trustee shall not be liable' with respect to any action taken or omitted to be taken by It in good faith in accordance with the direction or the holders of a ma,lority in aggregate principal amount of the Bonds outstanding relating to the tune, method and 'pLace of conduct— trig any proceeding or anv remedy available to the Trustee, or exercising any trust or power confe`r'ied upon the 'Trustee, under this Tndenture;' and (i,y) no provision 'of this Indenture shall require the TmAstee to expend or _risk its own funds or otherwise incur apy financial liability in the performance of any of its deities hereunder„ or ih the exercise of any of its rights or powers, i,f it shall have reasonable grounds for bellevtna that repayment of such funds or adequate indemnity against such risk orlliabi ,City is not reasonably assured to it. ) SEMON 902. CORPORATE TRU:Y, f�EQUIRM;1 LIlIIE3TLITY. There shai 1. t 11 all times be a 'Trustee hereunder which shall be a corporation organized i3nd doing bustness 'under the laws of the united States or A_merlra or or any state, authorized is under such laws to exercise corporate trust powers, authovtz�A to accept and exer— i ctse the trusts herein provided, having a combined capital and surplus of at Least � ' �#5b;0OO,U00 and subject to supervision or examination by federal or state' authority. If such lortioration publishes reports or conditton'at least annually, pursuant to law or, to the requirements of the aforesaid supervising or examining authority, ; then for the purposes of this Section, the combined capita.1' and s'irplus of such corporation shall be deemed to be its combined capita r�rtd 5urp3 ,ts as set forth in its most recent report of condition so ;published. any tLk.e the Trustee r shall cease to be eligible, in accordance with the provisions of' this "ection, ,it ` shall resign imme-diately in the manner and with the t!:trect;' hereinafter, specified in this Article, and shall immediately provide: notice 7f such resignation by 3 I r ti, 3 `i '' Sr f i s T the Lenders ) the owner of each Bond at 1 re istered, and registered or eerti! led mail to the rsexce rer) required by Section that time registered as to principal (except to bearer} or fully g to each hoi.tier of Bonds as shown by the list of Bondholders 706 hereof , AND PAYING Aar His, CWGES � i;xPrNs��s of musTine IY SECTION 903• Y s be entitled to payment and/or hereundeetnertt Zhe Trustee, and any Paying Agent, hail services rendered hereunder sel Fees and other ordinary F�rpenses reasonably and io nwith , i Pees for its Ordinary from the Issuer for reasonable in 'GOru�e� tiara with and all advances , Coun the 'trustee and any Paying Agent, savily made or incurred by it shall or<ii nary Servlces hereunder and, in t event Extr ordinaryServi.ces, necessary such paying Agent, l� that the Trustee, and any nsation `therek Fran the Issuer, sand pe ; F be entitled to reasonable extra come Extraordinary Expense, reL•nbufse.nent €ran the Issuer for reasonable end necessary +'or Extra - k- that if suer_ Mtmisconduct of they �en�� or ! it connect therewith; p therefor, Expenses are occasioned by the neglect u. ordinary Expense it shall not be entitled W compensation or urreimbursement eme t any Paying Agent) , compensation Trustee shall bbe�ten�l be ov f N' the Revenues as he"In comps entitled to and provided Further that such p rein provide made only rat , and reimburse lent from the Revenues f0� ne the aocccubrenee of aan evernt�I C e with r the Tr+tstee .as;, Bond Registrar for the Bonds. t� its continuance, the .Trustee shall have cip first lip premium, t j defa�llt and during nt on account of, interest or P hereof u of payment prior toy and upon all montjys in Lts oex ensesnincurred.y if any, on ari - ,, advances, fees, costs and exile for the rore� g • of Sectibn 901 hereof rAquilt aECriON 904 NO Zn RONDHOLDMS IF DEFAULT OCCM If a defau� to subsection (g) rovided, curs which the Trustee is by in said subsection (g) P of given as F' take notice or if notice o£ default be rP istered or certified F the Trustee ,shall profiptlY give, written notice thereof by g. to each red within ftCteen (l5) days{unless' suc heelist ofsSondholders required by the Y mail, shown by holder of Bonds then out, of remi,.vn, if any,rMs of Section 706 'hereof to he kept at thetoFoofitheoprincipalsteg,p000vided that, A� tin the case of a default in the I ayment l.r1 such notice to the nondhc.lder9 or interest on any Bond , the Trustee may .nr a trust eom- armittee, , if and so Song as the board of directors, the executive Trustee in good faith tg mittt'e oC ,9lreetors and/or responsible officers, of such notice is in the interests at the flonriholders . ' determine that the withholding udicial proceeding to Sl �TION ti5 • VQdTION By TRUSP Ir► any J G party and which in the Opinion wners or the 6gnds,ethtiTrustee may of which the zasUerr is a P3 on the interests or has a substantial bearing subject to the provisions o£` Section 901001 r intervene on behalf of Bondholders and, 911b, owners of a 'maJority in aoregate . shai .l 10 so if requested in writing principal anrunt of all Bonds then outt standing. C r ...2:dsy, rr..ti'�wyv y A 1 i g SECTION 906. SUCCESSOR TRUSPFY,. Any corporation or association into which the Trustee may be merged, or with which it may be consolidated, or to which it may sell, lease or transfer its corporate trust business and assets as a whole • or substantially as a whole, shall be and became successor Trustee hereunder and j shall be vested with all the trusts , power, rights , obligations , duties' remedies, i bmmnittes and privileges hereunder as was its predecessor, without the execution or 'filing of any Instrument on the parti of any of the parties hereto. ; SECTION 907. RESTONATION BY M TRUSTEE. The Trustee may at any time trusts hereby resign from the y created by giving sixty (60) days Written .notice by ! rabtstered or certified mail to the Issuer, the Lenders , the owner of each Bond at that tL•ne registered as to principal (except to bearer) or fully registered, and to each holder of 'Ponds as shown by the list of 9on9holders required by Section 706 hereof, and such resignation shall take effect at the appointment of a successor Trustee ;;ursuant ` to the provisions of Section 909 hereof and acceptance by the suer cessorll'rustee or such trusts. If no successor Trustee shah, Have been so appointed and havol accepted appointment within sixty (60) days of the giving of written c notice by resigning Trustee as aforesaid the resigning Trustee may I , Sn n6 Y p2tition � any court, of competent ,jurisdiction for the appointment of a successor Trustee, SECTION 908. RFMOV'AL OF THE TRUSTEE. 'be Trustee may be' removed at any , �y instruments in writing delivered, to the Trustee, time � an instrument or concurrent the Is6"uer and the Lenders and signed by the owners of a majority in aggregate principal .amount of Hands then outstanding. Sr�'I'ION 9094 ;APPOItJT%M OF SUCCESSOR '`?RUSTEE. In case the Trustee hereunder shalt; P (a) resign pursuant to Section 902 or '907 hereof; (b) be removed pursuant to Section 908 hereof; or r (e) be dissolved taken under the control of any public officer or officers or of u receiver appointed by a court, or otherwise become incapable ' or ,acting hereunder, a successor shall be appointed by the Issuer, provided, that if a successor Trustee is not so appointed within ten (10) days after notice of resignation if mailed or tnstr,inent of removal is delivered as provided under -Sections 902, .807 and qo8 hereof, respectively, or within ten (10) days of the Issuer' s knowledge 'o£ any of the events specified in (c) hereinabove, then the holders of a' ma,jority in aggregate � Principal, amount of Rands then outstanding, by an .'instrixwnt of concurrent instrue— r tions in writing signed by or on behalf of such holders, 'may designate a successor irustoe. ' Every such successor Trustee appointed pursuant to the 'provisions of E this :etiorz sha11 'he a trust company;or bank in good standing, shall be eligible to, serve as Trustee under the Act, having a repolited capital and surplus of not less than $50,000;000 and willing to accept the trusteeship under the terms and conditions of this Indenture. s` f ' .. ..,?e. ...IriY icy .I tdi .r!.(. .`. Y .. .I l,r. t f'-Wa�c . i. il.f-. • .. ` t 1 1 In case at any time the Trustee shall: resi gn and no successor Trustee shall be made pursuant to the rore appointment of a g o� provisions of this j Article IX prior to the date specified in the notice 7r resignation as the date ; I when such resignation shall take Offeot, the holder of any Pond or the resigning Trustee may apply to any court or,competent Juriadtotion to appoint, a successor 'Trustee. SUeh court may thOM#6n, after such notice, ' tr any, as it may deem 1 proper and prescribe, appoint a successor Trustee. SECTION 9100 CONCERNING ANY SUCCESSOR 'IRUSTEx,S. r Very successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Issuer and the Tenders, an instrument in writing accepting such appoint- ment hereunder, and thereupon such successor, shall become ful,ly', vested with all 5 the trusts, powers, rights, obligatiorus duties, remedies, innMities and privileges r l of its predecessor; but, nevertheless , p ( 1? such rrdecessor 'shall, on the written eliver .an instrument' transferring to such suer cesorTrusttee alluehe trusts and d , request t t, , powers, rights, obligations . duties remedies, :' . tnTtmitiea and privileges of such predecessor hereunder arid. (2) such' predoc6soor shall e3iver all securities and moneys held by it as Trustae ttereunder;'to its " successor. Should any instrument Jn writing Prdm "the Issuer tse ,V,,_��� uired by any 3 a j successor l'rustee. .or more 'fully and certainly Vesting in, such successor th�F trusts, ! Power s, rights, obligations, duties, remedies, immunities ,t,hd ,privilages her'eby , vested in. the predecessor any and all such instruments in writing shall, cnireciuest, be axeauted, 'aotmowledged and delivered by ,the" Issuero The resignation of any 'T'rustee and the instrument or instruments removing any Trustee and anpointins a � Y successor het�eundee,' together with all other instruments provided for in this r Article, shall be filed or recorded by the successor Trustee in each recording office, if any, where the Indenture or a financing statement relating herot shall have been filed or recorded. € SFrTION 911. DESIGNATION A,`!D SUCCESSION OF PAYING AOEMM; AGREP.4nn WITH PAYING AGENT. The 'trustee and the Bank shall be the Payizlg ,Agents for the Bonds. Any bank or trilst company with or into which any raying Agent may be }} verged or consolidated, or to which the assets and business of such Paying .Agent i may be sold, shall be deemed the successor of such Paying Agent for the purposes i of this Indenture,, If the position of Paying Agent; shall become vacant for any reason, the Issuer may appoint a" bank or trust dompany located in the same city. as such Paying Agent to fill such vacancy. The Pa.yingr Agents shall. enjoy the same protective provisior,8 in the Performance of their dutieq hereunder as are specified in Section 901 hereof with respect to the `I4riastee insofar as euch provisions may be applicable. ,. f ti -.60- 1 r ` The Issuer will wise each Paying Agent other than the Trustee to execute and deliver to the Trustee 'ar,i instrunient in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying ,.. Agent will: I (1) ' hold al.� sums held by ,it for the payment of principal of (and pre- y in trust for the benefit or the Bondholders rnium, :if any) or interests. on Bonds entitled thereto until. such sums shall be paid to ' such Bondholders or otherwise disposedIof as herein provided; (2) give the Trustets notioe of any default by the Issuer (or other d obligor upon the Bonds) ir1 the making of any such payment of prinriral (anti premium, if any) or interest; and (3) at any time during the continuance of any such, default, upon the - written request of the Trustee, forthwith pay to the Trustee &LI sums ,so held in trust by Ouch Paying Agent. The Issuen may at any time; for the purpose of obtaining the satisfaction ; y purposA, ,y, or dfrec: any Paying and discharge of-this Indenture or for an other ent to pay, to the Trustee ail sums held in .trust by such Paying Agent, such . sums to be.he'ld .by the Trustee upor� 'the. $an:e trust$ as those upon Which such sums i were held' by such payinggen ' .At; and upon such peymelt by any Plying Agent to the Trustee, such. Paying Agent shall be released from all further liability with respect• r 1 r to such money, m $FCTION 912'. APPO M'! M OF CO-n, U"STEP. It is the purpose of this Indenture that there shall lie no violation of any law of any Jurisdiction (including particularly the law. of Texis) denying oe 'restvicting the right of banking oorpor- ations or associations to transact business as tru$tpe in such juurishctioh. it is recognized tfAt in case of litigation under this T.ndPntu��e or the Lender Loan ,agree- rrer:ts, and in'O�oticuler in case of, the enforcerdent thereof on,default, or in the oa.se the Trixstee deems that by reason of any present or i'uture l.aw of any jurisdic- riom it may not exercise any of the powers rights or vemedies herein rante3 `to , g the Trustee or hold title to the properties , in trust, as herein granted, or take any action which may be desirable or necessary in connection therewith., it may be necessary that the Trustee appoint an additional individual or institution as a separate or or>-trustee. The following provisions of this Section are adapted.'tq ` these ends. In she event thab the Trustee a P ints an 'additional individual or insti- tution as a separate or co-trustee, each and every remedy, 'power, right, claim, ' 11emand, cause of actton, irrhunity, estate, title, ,interest atLd lien expressed or € intended 6y t'hi's Indenture to be exercised by or vested in or 'conveyed to the j � � f t; • k 1 s r r y ''rust0e with rasped thereto ahali be exercisable by and vest in such separate' t or co-trustee but only to the extent necessary to enable such separate or co- trustee to eierctse such powers, rights and remedies , and every covertait and obligation necessary to the exercise thereof by such separate or co-trustee Shall rxi to and be enforceable by either of them. Should any instrument in writing from the Issuer be required by the separate or co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to htm' or it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in wri.t� Shall, request, be executed, acknowledged and delivered by tho Issuer. In ease any separate or co-trustee or a successor to either shall die, become incapable of acting, resign or be remoVed, all the estates , properties, rights, powers, trusts, duties F and obligations of such separate or co-trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate or co-trustee. 4 SECTION 913, TRUSTEE PROMTM IN RELYTa UPON wounioN, EIC. The resolutions, opinions, certificates and other .instruments provided for in this Indenture may be accepted by the Trustee as. conclusive evidence of the facts and conclusions stated therein and shall be full warrant, protection and authority to the Trustee for the release of property and the withdrawal of cash hereunder. SWtION ;914. SUCCESSOR TRU STFE AS THE IRUS'I'EE OF ME FCI M AND ACCOUM, PAYIW Ac3vr ANn BOND..F olM AR. In the .event of a char in :the o 'floe o!' the TMli ee, the predecessor Trustee which has. resigned or been _rertpved ' shall cease to be. Trustee of .the R' hds and Accounts ,oreated hereunder and Bmd Registrar and Paying Agent for;+, incipal of, pr"iim, it any, and interest, on the Bonds, arid the successor Ti�astee shall become such trustee, 13ond Registrar, . Paying 'Agent, ARTICIE X SUPPM 14MTAL INDENTURES S "TION 1001 : SUPPLr �1'I'AL I�fiEtJ'IYtR 'f5: NOT REQUIRING CONSVI' OF L30ND- HOr,MM4 The Issuer and the Trustee 'mey withoue, 'consent of, or notice to, any of the Aondholders enter into ar, indenture or indentures supplemental to this Indenture as shall not be inconsistent with the terms and provisions hareof for VV one or more of the Following purposes: j A. to add to the covenants and agreements of, and limitations and, restrictions upon, the ,Issuer In this Indenture other covenants,; agreements, 1lnatations, and restrictions to be observed;by the 'Issuer which are not i contrary to or inconsistent with this Indenture as the in effect; � r { J Y -62- r , I i B. to gra�lt to or confer or impose upon the Trustee Coll the .beneitt of the Bondh4l.ders any additional rights, remedies, powers`, authority, d security, liabilities or dues which may lawfully be granted, 'confeomd or Imposed and which are not contrary to or inconsistent with this Indenture as tP+eretofore in effect; supplement I a C. to cure any ambiguity or omission or to cure, oorreat ,or ?, any defective provision of this Indenture or otherwise to amend or supplement 1 the Indenture in such manner :-s shall not impair the security hereof or adversely affect the bondholders; rate Trustee or a co-trustee, D. to evidence the appointment of R a aethe nt hereunder; or succession of a n - � now Trustee or paying ' E. to comply with the requirements of the Treat Indenture Act of 1939, as from time to time amended; F. to subject to this Indenture additional rsvenues, proPerties or collateral; or 0. , to modify, alter, amend or supplement this Indenture in any other trwhich' is not materially adverse to the Bondholders (inol:uding` sny respeo respeo rhiah, 'in the opinion of pond Counsel aoceptable, t4L. the Issuer and y the Trustes, ie necessary to comply fully with all applloable rules,, , rui.4tO policies, prgcedurea, regulration6 or other officiaJ .st&tenients pronit gRted 'or b the Department of the Trensury or the Intorrl *3evenue Service Proposed Y pertairaniu obligations issued underr Section .l03(b)( )(A) of.the C,00e) and + which ice's not '�nVoive a -rtuange described in;clauses (a) ,, (0, (c) 'or '(d) of Uectlon 1002 hereof and which, In the judgment of the Trustee, is riot to the t j prejudice of the Trustee. S&ITION 1002, SUP'PL570"AL INDEMI'�JRF�S fit IJIRIN(i CONS�J'T OF E3OND}i0L0ERS. Exclusive of supplemental rode�tut'ea covered by Section ;1001 hereof,and subject to the tarns and provisions contained, in this Section, and not otherwise, the holders of not .Jess than` 60% in a,,V,ogate principal amount of trie Worlds ,,hen out- standing shall, have the right, `' from tune to time, 'a'tything contained in this Indenture to the contrary notwithstanding, to consent to and approve the execution by t;te Tssuer and the Trustee" of such other indenture or indentures supplemental. hereto for the purpose, of modifying, amending, adding to or rescinding, in any particular, any, of the terms or provisions contained in this znjenture; provided, however, th&t nothing In this Section contained shall permit or be eonstrued .as permitting (a) xtension of the maturity date of the;prinopal of or , the inter- an e eat on any Blind issued hereunder, or (b) a reduction in the principal amount of, s + or redemption premium on, any Bond or the rate of interest thereon, nd (c) a ti privilege or priority or any Bond or Bonds over any other Bond or Bonds, or (d) a � . : .' reduction in the regate principal a-nount of the Bonds required for consent to such supplemental indenture E -63- f IrL a 1 it 1 r - - F rj If at any Ume the Issueyr shall request the Trustee to (inter into any such su pp lementa.l indenture for ue the purposes allowed by thj,6 Section, -the , Trustee. shall, at the request of the Issuer and upon being sat sfaotorlly indemw trifled with respect to v penses, cause notice of the proposed execution of such supplemental indenture to be published and mailed in substantially the manner provided in Section 605 hereof with respect to redemption of Bonds. Such notice shall briefly set forth the nature of the proposed supplemental. ,tndenture and shall state that copies thereof are on file at the principal corporate trust ► office of the Trustee for inspection by all Bondholders . If, within sixty (60) } days or such longer period as shall be presoribtd by the Issuer following the mailing and publication of such' noticq, the holders" of,60z in aggregate principal amount of the Bonds outstanding ,at the time of the execution of any such supple mental indenture shall have consented to and approved., the execution thereof as herein provided, no holder of any Bond shall have eny right 'to object to any of k the terms and provisions contained therein, or the operation thereof, or in any Y manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Issuer from executing the same or from ,taking any action f pursuant to the provisions thereof. The Issuer, shall have the rit5ht to extend �? from time to time the period within which such consent and approval may be obtained from Bondholders. Upon the execution oft any such _supple' "nQU indenture as in this Section' permitte4l and provided, this Indenture shall be and be deemed to be modi— ; fied and amerced in accordance. therewith. The Trustee may receive an opinion; of Counsel that any such supplemental indenture entered' Into by the Issuer, and the ' Trustee cotrrpl ea with the provisions of this Article X and the Trustee may rely, upon such opinion. 1 L� If, because of the temporary or paz�naneht suspension of the poblication or general .circulation of any newspaper! or financial Journal or for any other � reason, it is iripossib.le or impractical to publish any, notice required 'in this Section, then such publioation •in' lieu thereof as shall be made by the Trustee shall constitute a sufficient publication of notice. SEC'I`I0N 1003. CONSEF M Tb' SUPPL&T+t "AL. INDgPT(1FtES4 Anything .herein r� to the contrary notwithstanding, A­ supplemental. indenture under this Article X which adversely affects any rights of any Lender, shall not become effective unless and until each affected tender shall 'gave consented ` to. the execution and delivery of such supplemental, indenture, In this regard, the Trustee sha11 cause r notice of the proposed execution and delivery of any ouch supplemental indenture to be mailed by certified or registered mail to each ,. 1fected Lender at least fifteen (15) days prior to the date of the first publication of +lotice of the proposed execution of such supplemental indenture as hereinbefore in Section 1002 provided. F'ach affected Lender shall be deemed to have consented to the execution and delivery of any such supplemental. indenture if the Trustee does not receive a . letter of protest or objection thereto signed by or on behalf of the Company on or before 4;30 o'clock P.M. , Der:`on, Texas time, of the fifteenth (15th) day after ► the mailing of said notice and a copy of the proposed supplemental indenture. ' t k ( f n r I . f ARTICLE XI F AMENVXEN T' OF LENDER IRAN DOCUlVit:WJ1S AND MORTOAOE LOAN WCUMEN ,9 SECTION 1101. AMENMENPS, ETC-, , TO LE.ldDm LOAN DOCt7o.7VTS AND j,40fftIAQE LOAN DOCL4FEIrS NOT REQUIRING CONSENr of BONDHOLDERS, The Issuer and any Tender ;nay, subject to the provisions of Section 1 .03 hereof and with the written consent of the Trustee, but without the consent of or, notice to any of the Bondholders, enter into any amendrent, 'change or modification of the Lender .Loan Documents or the Mort�e Loan Documents as may be ''required (a) by the provisions of the Lender Wan Documents or the Mortgage Loan Documents or this Indenture, (b) for the ; Purpose of curing any anibigitity or formal, defect or onissior�, (c) so as to add additional rights acquired in accordance with the provisions of the Lender Loan `r Documents or the Mortgage Loan Documents, or (d) in 'connection with any other , Nar>ge therein which, in the ',)udgnent of the Trustee, is not to the prejudice of the 'trustee or- the holders of the Bonds, The Issuer and the Trustee shall., without the consent of or notice to any of the Bondholders, enter into any amendment, change or modiftcatlon of the Lender Goan Documents Orr Mortgage Goan Documents as may be ) necessary, in thel opinion of Bond Counsel acceptable to the Issuer and the Trustee, ' to comply fully with all applicable rules, ruingo , policies, procedures, regulations l or other ofrieia: statements promulgated or proposed by the Department of the .Treas ury or the Internal ,Revenue Service pertaining to obligations, isssaed, under Section 103(b) (4)'(A) of the Code. SECTION 11026 A.MNDVNrS, M. , TO LENDER IRAN ih"+Ctj1 ENTS AND MORTNUS WAN DOCO IM RFAULRINO CONSENT OF BONDHOLDEM, except for the amnilienCS, changes or modifications as provided in Section 1101 hereof and subject to the provisions of Section 1103 hereof, `neither the Issuer nor. any Lender, shall enter ; into arty other amendment, change or,modification of the Lender Goan Documents or the ?Mortgage Loan Documents without publication and mailing of notice and the wktten approval or consent of the holders of not less than 60% in aggregate principal amount of the bonds at the time outstanding given and procured as pro- vided in this Section; provided, however, that nothing in this Section or Section 1101 ?hereof shall Permit or be construed as permitting (a) an extension of the time of the Payment of any, amounta payable under a bender Loan Agreement, or (b) a reduction in the amount of any payment or in the total amount d1}e under a Lender s Loan Agreement. If at any time the Ig3uer and any Lender shall request, the consent of 'the Tniste,e to any such ,proposed amendment, change or modification of a Lender Wan Agreement, _ the Trustee shall, at the request of the Issuer and upon t being satisfactorily indemnified with respect to expennes, cause notice or such proposed amendwnt, change or modification to be published and mailed in. the }t same manner as provided by Section 602 hereof with respect to redemption of Bonds. Such notice shall briefly set forth the natare of suoh proposed amen(Ament, change or modification and shall state that copies of the Instrument embodying the. same are on file with the Tnistee for inspection by all Bondholders . 1f, within sikty 60 .1 , I ( ) aJs, or such longer, period as shall be prescribed by the Issuer, following ;} the mailing and publication of such notice, the holders of 60% in aggregate s principal amount of the Bonds outstanding at the tilde of the execution of any such " amendment, change or modification shall have consented to and approved the execu- n tton thereof as herein provided, no holder of any Bond shall have any right to object to any or the Itt�'ms and ,provisions contained therein, or the -Aeration th,.reof, or in any ,r nner to question the propvlety of the execution th)ereor, or to 4' i N t, enjoin or restrain any Lender or the Issuer Cron executing the same or from 'taking any action pursuant to the provisions thereof, or the Trustee from consenting thereto. `Ire Issuer shall have the right to `extend from time to time the period t within which such consent and approval may be obtained from Bondholders . Upon I the execution of any such amendment, change or modification as in this Section permitted and provided, a Lender Loan Agreement shall be and be deemed to be modi Vied', changed and amended in accordance therewith. If, because of the temporary or permanent su.:,pension of the publication j or geheral circulation of any newspaper or financial. ,journal or for any other reason, it is impossible or impractical to publish any notice required in this Section, then such publication in lieu thereof as shall be made by the` Ti%stee shall 'cothstitute a sufficient publication of notice. SECTION 11030 RFAUIRA) OPINION OF BOND COUNSEL. The Issuer and the Trustee shall not enter into or consent to any amendment, change or-modification to any one or more of the Lender Loan Documents or the Mortgage Loan Documents unless the Issuer has received an opinion of Bond 'Counsel acceptable to the Issuer and the Trustee to the effect that such amendment will not Impair the exemption of the interesU on the Bonds from federal income taxation. The Issuer and the' Trustee may rely upon an opinion of Bond Counsel to the 'effect that arty Y such proposed amendment, change or modification will comply with the prrovigions of this Article XI, ARTICLE XII DEPWANCE SECTION 1201 . DF;F'E;ASANCE. If the Issuer shall pay or cause to be g Pa a, or t arui there shall be otherwise paid or provisions for payment ;made to or for the ho 3 owners of the Bonds arxi' Coupons, the principal, ri,u if arty, and interest due or to .become due thereon at the times and in the rraAher atipulited therein,' and if the Issuer shall keep, perform and observe all and singular the covenants and promises in the Bonds and In this Indenture expressed as to be Dept, performed and observed by it or on its part, and Shall pay. or cause to be paid to the 'Trustee and any Paying Agent all sums of money due or to become due.aeoording � to the pre.v sicns hereof, then this Indenture and the lien; rights 'and interests t created hereby shall cease, determine and became null and void (except as to WV i surviving rights of registration, transfer or exchange of Bonds herein provided f for), whereupon the Trustee shall cancel and discharge this Indenture, and execute and deliver to the Issuer such instruments in writing as shall be requested by the Issuer and requisite to discharge this Indenture, and release, assign and deliver < junto the Issuer any and all the estate, right,: title and interest iri and to any and ` all rights assigned or pledged to the Trustee or otherwise subject to this Indenture, axeept moneys or securities held by the Tr,rstee for the p s ent of the prrincipal of, premium, if any, and interest on the Bonds. r 4., of Any 2ond or, in the caee of Fully Registered Bonds, portions or said I Bonds in principal amounts of 000 or an integral multiple thereof, and all ,. Pr P�-1 �5 , y � p , Coupons appertaining to said Bonds, shall, prior to the maturity or redemption r date thereof, be deemed to be paid and defeaeed within the meshing of this Inden- ture when payment of the principal of and the applicable redemption premium, if € any, on such Bond or portion thereof, plus interest thereon t the date thereof (whether such due date be b reason of maturity or upon to redemption as � provided in this Indenture, or otherwise) , either; }} (i) shall have been made or caused to be made in accordance with 1 the terms there{3f, or (ti) shall have been provided for by irrevocably depositing with F the Trustee, in trust and irrevocably setting aside exclusively for such payment; t' (A) moneys which shall be sufficient to make such payment when due, or j (B) non-callable Government Obligations maturing as to prin- 4 oipal and interest in such amounts and at such times as will be such as to insure the availability of sufficient moneys to make such payment, and.a1:1 necessary and proper fees, compensation and expenses of the Trustee and any. Paying Agent pertaining to the Bonds with' respect. to which such ,deposit is made shall have been paid or the payment 'thereor provided for to the satisfaction of the Trustee and an3+ Paying 'Agent. At such time as a fond or portion- thereof shall be deemed to be paid hereunler, as aforesaid, it shall nd. longer be secured by or entitled to the bene- ,; fits of this Indenture, except for the purposes of Section 203 hereof and of any such payment from such moneys or Government Obligations. t Not%rithstanding the Coregoing, no deposit under clause (ii) of the imme- diately preceding paragraph shall be deemed a payment of such 'Bonds or, portion thereof as aforesaid until; ; # (1) proper notice of redemption of such Bonds or portion thereof shall, 1 have been previously given in aa.:ordanee with Article !!I hereof or to the b event said Bonds or portion thereof are not to be redeemed within the next. . succeeding sixty (60) days until the Issuer shall have given the TI ustee, in form,satisfactory: to the Trustee, irrevocable instructions to notify, as soon as practicable, the owners of the Bonds or portions thereof, in accor'd- ance 'with Article',VI hereof, that the deposit required by (ii) above has been ' made with the Trustee end that said Bonds or portions thereof are deemed to have been paid and stating such maturity or redemption date or dates iApon which moneys are to be available for. the payment of the principal or redemp- tion price, if applicable, on said Bonds; or t # .«67.. ,4 0!> ) f. `.\ _, i. at` r .... t 1i .. 1} } 15 �. "+�.t/ 1 s ..41'�;` ..Elva '}�I L�.;ljl.�f•;f`q 1 , (2) the maturity Of such Bonds. ' AnY moneys so deposited kt } at the direction of With the Trustee as provided in this Article may (10" any tender also be invested and reinvested in non-Callable ' 7 t'nment Obligations ma*uri N n8' a me 'amounts and times as heroinbeFore set F forth, and s.11 income.: t�rom all hove pursuant to this ArtJ: -Le which i,q no required Obligations in the hands o Interest and c�uired for the f the Trustee � deposited premium thereon with respect to I payment of the Bonds and shall. be de sited � 4hieh such moneys shell collected For use and pa Posited a ire o herimoneys de been so s Find as and when realized and postted in that fund. 2ha Issuer, to the extent it shall have. an and the Tt'ustee, to the extent it 8?vUl have y control over such deposit, use Of any such de sit po hereby several ' discretion with respect ':to the accepted hereunder or no use ,made of y 0aven3nt that no da a' given which would cause posit will� be made or , ase the any such deposit or direction as to 'suah use meaning of Section 103(c) (2) �s to be classifted as "arbitra r� , 3E ) (�) of the Code and an lawfltl re 6e bonds within the hareunder inol�xiing Sentions 1.10 1 regulations pro, t] aced ; 3- 3, z.lA,3-14 Regulations (26 CPR part l) , as the same exist " 3 ,1A3-15 of the Income Tax time hereafter be amMded su this dater or may f pPlented or revised. Y rpm time to Notwithstarxi ing any" provisions of any other A.rticle 'of this Indenture Which. may be c;ontrar`y to the Obligations set aside arid. held Provisions of this in, trust pursuant to all ' aria for the Article, money's or, Government , pa3+ment of 19onds (inoiud provis.lon�, Or this Ar�'ticl'e be applied to and' usad solely for theme interact and premium r60n if, art interest and premium thereon 1' Myment of the particul re ' Y) shall Ment Obti ations have f any) with res at to Bonds ( including �n so set aside which such moneys and Gevern— i , . In trust. . , Anything in Article X hereof to the or. Gove� ;�ment Obligations' have been deposited onset siotwi hstandi to this Article for the +��, if g*,nays ; Yment oC Bones and intPCPSt he Trustee pursuant and subh Bands shall not have in fac; t)een actually and preml�tm thereon, .!f an y paid in >WI no the provisions of this Article XII shall be made Without the ce of each Bond and Coupon nunant' to' i pon a£Faeted thereby, nsent of the holder 4 ; r t: y , 1 ' ARTICLE XII1 ;! w MISCMLANFXS i SEMON 1301. COMF'.Tft'S, mf 00 BMROLDMS.. Aiy consent, approval, direction or other instrument required by this lnt'enture to be signed and exe- cuted, by the 6ondhoiders may, be in any number of concurrent writings of similar tenor and maybe signed or executed by such Bondholders in person Or Lby agent appointed in wrttin8# Proof of the execution of any such consent, approval, direction or other instr1inent or or the writing appointing any such agent, if mada in the followig manner, shall be sufficient for any of the purposes of this v Irdenture, and shall be conolustve in favor of the Trustee with regard to any action taken under such request or other instrument, namelyi (a) the fact and late of the execution by any Person of any such instrt.ment or writi.r►g may be proved by the certificate or any officer in y jurisdtetion who by law has power to take acknowledgments within such J sdiotion that the Person signing such instrument or writing acknowledged before him the execution thereof, or by affidavit of any witness to such 4 exP,c:ution> � (b) The fact of the holding by any °erson of Ponds or Coupons trans- ferable by delivery and, the amounts and numbers of such Fonds, and the date of the holdings of' the same, may be proved by a certificate, deemed by the Trustee to be satisfactory, executed by any trust company, hank or ► bankers, or any registered dealer in securities, wherever situated stating that At the date thereon the party named therein did exhibit to an officer ? of such trust ampany or bank or to such banker, as the property of such party the Bonds or Coupons therein mentioned, In lieu.of the foregoing the Trustee may accept other proofs -of the foregoing as it shall 1"M appropriate; and (c) Tree fact of ownership of. Bonds registered otherwise than to bearer and the amount or amounts, numbers and other identification of such Sonds, and the date of holding the same shall be provedby the registration books of the Issuer maintained, by the Trustee pursuant to Seotion 203 hereof. For all purposes of this Indenture and of the proceedings for the enforcement hereof, such Person shall be deemed to continue to be the holder of such Bond until the Trustee shall have received notice in writing to the contrary, which notice shall be made in the ruinner prescribed in this Section. SECTION 1302. LIMITATION OF RIGHTS, With the exception, of rights �i herein expressly conferred, nothing expressed or mentioned in or to be Implied from this Indenture or the Bonds is intended or shall be construed to give to any xerson other than the parties hereto, the Lenders, and the holders of the Bands any legal or eguitablg. right remedy or claim under or in respect to this Inden- ture. 'This Indenture and all of the covenants, conditions and provisions hereof L are intended to be and being for the sole and exclusive benefit of the parties � hereto, the holders of the Bonds and the Lenders as herein provided. 9 M f .r k �JktA1 . `�. r . :r.r .4 . {:r.it.. .. car:.. ,r if- ar 1. :3•if1� f� � SWMN 1303. SEVERABILIM If &thy provision of this Indenture shall be invstlid, inoperative ot+ uw.fXoreeabls as applied in any particula 1 cas , in any Jurisdiction Or, Jurisdictions or in all Jurisdictions, or in all case; aeoause ' , Yi it. conflicta with any other provision or proviaions hereof or any constitution or statute or 'policy,, any other reason, such circumstances shall not have of public lia or for shall not have the effect of rendering the provision in question inoperative or its any other case or circumstance, or of rendering any other provi- sion or provisions herein contained invalid, inoperative, or unenforceable to any r extent whatever Tho invalidity of arty one or more phrases, 'sentences, olau.aes or Sections in this Indenture contained, shall, t'.�re, or ar�yr pant not affect the remaining portions of this Tnder- thereof. . s '41'4 1304, RonC�S ' It shall be sufficient service of any notice or, other paper o;, the issuer if the same shall be duly mailed to the Issuer by registered or certified mail addressed to it at Carroll Courts Suildi ng, 401 West Hickory Street, Denton, Texas 76201, Attention: President, or to such address ." the 5 Issuer may from time to time file with the Trustee and the Lenders, It shall be sufficient service of any notiee 'or other paper on any Lender it the same shall be duly mailed by re iatered or certified mail addressed to it at the address set forth in Section 8,1R of the appropriate Lender Loan Agreement, ar to such other address as any Lender may from time to time file with the Issuer ar-3 the Trustee. k. It shall be sufficient service of arty notice or other paper on the Trustee 'If the same shall be duly :nailed to the Trustee by registered or certified mail addressed to it at Texas 76102, Attention: Corporate Trust Office, 'or ,to such othe 3dres g Trustee may from time to ' time .file with the Issuet, and the Lenders, In case by reason of the suspension of registered or certified mail servi,oe, it shall be imp,>actioable to give` natiee by registered or , certified mail of arty event to the holders of any L [Bonds, r to the Issuer or to the Lenders when such notice is required ` . eq to be giv?rn pursuant to any..:. provisions of this Indenture, taken any manner of giving such notice as shall be sat,:tsfactory to the Trustee shall be deemed to be sufficient giving of such notice. 5EC' 'TdPi 1305. , PA` MUS DUS oN SUNDAYS AND HOLIDAYS. In vV case where the date of maturit'sy of interest on or principal of the Bonds or the elate fixed 1 for redemption of ihy Bonds shall be, in the location of the principal;norperate I trust office of the •Trustee, a Saturday, Sunday or a legal holiday or a day on which banking institutions are authorized by law to close, then paYrent of interest or the nextfsuoceed premium, not a 'SatUrde made on such date but may be rri2c�& on p 1 p , any) need not b �g Y ay, Sunday or a legal holiday or a day +upon which banking institutions are authorized` by law to close with the acme force and effect as if made on the date of maturity or the date fixed for redemp- . tion and ho interest shall aconie for the � - period after such date. 1 f f ..70_ ..h, -4 `c. 4rak :..r. •eke tin `t .l .. Y.]la ... r .4 1 . . .. L A k 1 t 4 SQCTION 1306. CoU[ rERpAfi'I'5.;. This; indenture may be simultaneouBly executed ;fin several oaunterparts, eaoh or which shall be an original; and. all of Which 8*4 constitute but one and the same imtrument. .,, $WTION 13074 APPLIOABLI; LAW, This Indenture shall be governed by and constru•�d in accordance with the laws or the State or 'Ibxas, 4 5EG'TYON 1308. CAPTION$. The captions or headings in this Indenture s are fbr convenience only and in no way define, .omit, or describe the scope or intent of any OrOvislons or sections of thin Indentures i� � E SMTION 1309. CALCULATION OF IW'EI Fff, Interest on the Bonds shall be computed upon the basis of a 360-day , y yoar consisting of twelve (12) thirty (3 0) day months . 5ECPION 1; 10. C0INTLIANCE cERTIFICATES AND OPINIONS. Every certificate or Opinion with respect to compliance with a condition or covenant provided for in this Indenture shall incl?,de; F (a) a statement that the Person or Persons making such certificate or c opinion have read such covenant or condition and the defi.nttons herein relating thereto; (b) a brief statement as eo the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or. opinion are based; ' (c) a statement that, In the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to F . enable them to express an inforaed ,opinion as to whether or not such covenant or oondition'has been complied with; and (d) a statement as to whether or not, in the opinion or the signers, such condition or covenant has been complied with. SIWTION 1311. 0NIF'LICT WIgR TRUST INbRMME, ACT OF 1939, . 'If thin Indenture is qualified under the Trust Indenture Act of 1939, as amended, and any ' R provision thereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the Trust Lndenture Act of 1939, as amended, such required provision ,shall control. IN '41M1 9S 4n► OMOF, the Denton County Housing Finance Corporation has Caused these presents to be stgned in its name and bohalf by Its President and its t ]i : i s 1y ..71_ r , • �nkr Ex1.`a5d ,• ., a.J�k i.. G ( e .l't, E. 1L, `;'; n. , -.,.+li'- ...:. i, .At..FY., : > ..x.>, .d fE.. 3•, :E E i 1 i 1 i 1' F OOrporat 3133E 4 to be hereunto affixed aril attested by its Seere •. del11;@ its acceptance of the gets hereby outer! the taryr aria to evi_ Pr' s #ta. to be .aig Lr1 its name 'Ik'uab a has these" oPfiolal scat d behalf by ot* Of its Vlce Presidents, its Vice Presidents a l as or the Pirst�da of MM to be attested by one of i y P October, 1981. is bENT% COUM HOUSIM'FINANCE CORMRATION E i By (SEAL) a AT'I1ES'I` � I� Secretary f 4 , as 'h'ust;ee 9 Fres 1 ent (SEAT,) Ax"'F.ST Pre Oant lb ri r t r , 'i r4 f S"TATF OF TEAS ) SS CWNV OF DEMN ) jr a Notary Public in and for said i s 8efoi'e me, the un�jeraiied authority Jerry John Crawford, President, on this day personally appeared finance Corporation, �. County and State, of the Denton County Housing insts�u- and L1^Yd D, Odle , Secretary, r ses and to me to be the Persons whose �esecuteduthersame forttherpu VPoi� act �? me that they ex d ac3 the it, and acknowledged to in the capacities therein stated, an ednsideratian 'tlnerein expressed, and deed of said corporationo day of October, ' OIVF,N UNDO MY HAND APED SEAL OF OFFYCE, this ' D 'q61 (sV`AL) ` , s t jZtary Pubi c in 2n for E Denton County) Texas E S'TAIFr OF 'IEX4S ) ; 'TARRANT ) d SS O=ff OF the undersikned authorityyO as No Public in and forls5'Iae Before me, rsonally appeared CGUttty' atld State, _On this ,day pe Vice President ar1 ''iist Pz'eaiQenC acid 'It�ust (?t`ficer, aria banking assooistion, Bank 'of 'Fort Worth, anal Snstrsr na1s are subscribed a rational gC;ficerf ofe',I�irist i�tior�l to the. foregoiri�# to.rae to be the persons whose ur ses and 1 to me that they exeeuted ,,the Si ame; for the p as the act ment, and aoknawiege� . ebnsi�eratl4n therein expressea> in the capacities the��ein 'atated, and and deed of said bank. HARD AND SFAL OF o?FICF this clay of October, , (IT%rt Ut1D i MY ' 1 A.D. 191. k Not lie in and for r Tarrant "Aunty, Texas -73- 1 i , DENTON COUNTY HOUSING FINANCE CORPORATION �s August 17 , 1981 S. t Dear Sir : The Denton County' Housing Finance Corporation is in the process of establishing a multi -family rental housing 'program A whereby it will issue revenue bonds , the proceeds of which will } be used to maL4 collateralized loans tb participat-ing; lending t institutions + o, in turn , use the proceeds to snake mortgage loans t .ti deveiapers for the construction or acquisition,rof I multi-family housing gro,)ects within the County . By meana . of this letter Kidder Peabody` & Co . Inc:orpozated and First Southwest Company , as senior managing underwriters for the Corporation , are requesting proposals on behalf of the Corporation from selected basks to, act as Bond Trustee for this program . the Bond Trustee will be responsible for the fiduciary and � corpporate trust functions of the program, including the custody oflthe Mortgage Loan Fund and disbursement of. monies therein to f the, participating lending institutioris, receipt and disburse- ment of mortgage principal and interest payments, custody and the investment , at the 'direction of the respective lenders ,; of funds, and the a lic��at'ion of the -specified bond purchase all f . pp and redemption procedures . Additionally , the Trustee will hold,.f the collateral in Crust for the benefit of the Corpporation, and maintain an accurate record of the collateral including any additions and substitutions . Please finds enclosed herein a draft of a °preliminary Trust Indenture for the above described finaneing�. If you ate it in acting as Bond Trustee for this ragrata, please submit written proposals by 5x00' P . �k. , August 4 toe (b copies) (2 copies) s, Denton County Housing Finance Kidder , Peabody & Co. t Corporation Incorporated Attns Mr . Jerry ,john Crawford , At n : Iohn M . Tillapaugh � g' president 555 California Street x Carroll':('rourts Building San Francisco , CA 94104 401 West Hickory Street Denton, Texas 76201 { k _r . ., .. .,. , n.r , .. ,. k. F e�+� .tir,�CuF S�t, 2.lip,tY, nl+i4.'•;`I 1 c f - 2 - s ;j WiChin your written proposal you should set forth your institMtion ' s 4 uwrificat ro for acting as Bond Trustee , s including, but not limited to the followings its capital Size of your institution as measured by ` . . - Stock on,3 Surplus . t ?� a Number and dollar amount institutionaisa presently y ate. i sue;�) for which y serving as trustees ecif c trustee experience with r t espect to collaCeral- Sp bond isaucs . t -fami l y rental housing ized mul k , Total assets held within your TruEtt DeQartment . , within •.your Trust Departments ' Total assets m anaged r and a&8regat principal amount of single £araily s 'r` • - Naggregate,recently being serviced by your insti- mortgage` loans p I tution. you should indicate your charges for acting in this Also , , y whether there will be an Acceptance F,ee, capacity , specifying the annual administra- E the fees and expenses of your attorney +our for service as ; tive fee for serving as Bond any other costs and expenses anxi- Paying Agent', together with any our charges assume a bond cipated . For put oses of estimating y pp Also indicate whether or ; not _Your, issue _size of $30, 000,-000. to fix d . fee , schedule during the institution would be willing to the, togram • The bond issue is anticipated now , include institution life of P you may maturities of ten to fifteen years . As y { red revenue stream associated otionotosident fyaall tine f i important for the Co p 1 is iaiP programs , s • ro ram. future c0 It' t the on of the P g .,par sting For your information, the 'Corporation and p P 11 Spec a predetermined series of investments and lenders wi P ' so that you should not antici- a tight cash management program y e an meaningful ' ►` float" on any monies held in trust pat Y the will be reviewed by The s Once r. ceived , these proposals al consultants . Crcporation and its final and leg will focus on the demonstrated ability and experience of ' review pro posed , , each institution` and the fees p P } t _ I , 3 a (. lease call Mr . John M Tills if you have Any ' '(212)p I pauggh at (415} 986-2811. or ' Mr . Fred Fuller at (212) 747-2517 We` look forward to he frOO you. ' I Sincerely yours , �.,. erry a n raw or President Denton County Housing Finance Corporatilon Carroll Courts Building 401 West Hickor Street Denton , ' Texas t . � I omas J . ec er Vice,, President Kidder , Peabody & Co. Incorpor,ated 10 Hanover 5quAre New YOrk, N. T 10005 r i y , si A . RLS01111ON AN ENDING AND SUPPLElItNTING THE ' RESOLUTION AUTHORIZING AN I581'.£ (IF THE . DENTON COUNTY HOUSING FINAt�'CE CORf'`ORATION COLLATLF,ALI2ED LOAN�TO-'LENDER REt'ENUE BONDS , 1961 $)R' IE5 ?VFr,SL OT 'INCT,EASING -THE ESTIMATED AMOUNT OF THE BONDS AND INCLUDING ADD1IIONAt. F ),CJECTS WITHIN THE 'PROGRAM , R s Vhereas , on July 270 2981 the Board of Directors has previously adopted a resolution authorizing an Issue of Bonds to be knovn • as• "ten ton County Housing Finance Corporation Collateralised Loan-tb- i Lender Revenue Bonds , 1981 Series A (the "Bonds ") to provide construction and permanent financing for Multi-family rental housing projects ( the "Projects ") including those described in Exhibit, A s through G attached to the Resolution ; and Whereas , the Board of Directors no-*, intends to authorize the r issuance and gale of Bonds to provide construction and permanent ,, financing for other proposed Projoets as described in Exhibits . H: through N as att,oched hereto ; BE IT THEREFORE RESOLVED BY THE BOARD OF DIRECTORS OF THE DENTO:: CObNti'Y HOUSING FINANCE CORPORATION AS FOLLOWS : , The aforementioned Resolution is hereby " amended a'tid' supple taented such that the estimated-'principal amount of the Bondi is hereby increased to be approximately ¢ yq,00g4.u , end The Projects .for which the Board ' intends to ; authorite the issuance and sale of Bonds 'to provide construction and permanent : financing subject: to final approval by the Lender and this to Intlude the Projects described hn Exhibits N through N sttach,ed hereto . This Resolution shall take effect upon its passage . Adonted and , aporovsd August 17 , 1981 . ; i President r ! ► 1 I. ,'.. l'...n.. .r .:p! ,. 6t -y5...3yA\. iP.' \... a4.1.'�t o., •1 ..`,...1 1-n. '..,:.-,., . ... .. r. ; > :• .. ea1 c,.^ t>,.�r std i,.n :� + J,. fl DW" CXWY HOUSING PRIM 'E CORPORATION a f+Irtll'IFAMII,Y FOCAL HOUSING PRa7FX.T APPLICATION I, Name and Address of Developer/Owner: Clear Creek Production Co. ,Inc, P,00 Box 42' Denton, Texas 76201 i Name and Address of Sponsoring Decatur Savings & Loan Assoc. G toendirg Institution: i Highway 380' 3 Decatur, Texas Project Infon-atiion: E r Morse St. & Mayhili Road a) Site Locati.an: Denton , Texas to Tow , 1'60 [?nits c) Approximate Nurer of: efficiency units 16 � I bed -a= units 128 ' 2 bedr'oa'►u Units 16 - 4 bedr cm wits 0 d� r xitnate Total Costs of can, tkcsluding 50210000.00 E u owner's Profits It I 1 Tim Nec s�Y 16 months e) plete C�orstri°ns has prod I lntiu e tef erenQe& side rFrs� s � b s :a ration.4ersig� on far oon- Ui4 1 been Sj)Mitto� r s Multifamily ASSOCT,ATION a put of DECATUR 5AVYNGS A*ID LOAN 1 i RX to — Co Inc . Clear Cr Pr•od ' . ,uct S r j : 5 ' j i } t 4 ti k ' OF r 2-, ! n •fir" A , z. ore } ,r, y SSS At Cx<ae k , Pro(l ?ct 0» ILPILPDX. 4P7 � . Cxti�.ct�s Nationf�l �' �� p • 0. Baic x1977 ` sDenton, TX 7G�:U ` 1 l _................... TI In - ti.t?C r , if! *1 1et1- rvP4: •W�"�A i .... aa,�,. ,,.r \r 7 '. t,., ,a. .- .,. .. ..,.. . � .� � ) i ..-..U.,+ r ...-aa aaut? .. 3•-,6.u.ai+m.ly .. ,.... � 2 I. � p y lr R � , I �1 � I I J` C7 tii�.�>:'+-ri r1i1'(l'C rJ�+11., ;� ✓ �'l;tr.►Cy � )rC'it>•' CA? L L]):'' .t7.11il( )!I };J rs 'r1�C.'r. r } t�f�l: J. +1 .1 U;'1 Ci�a.zrns 4t, t.ional n�,nl. S 21.E � i �i]�'. 0. i'. N ! , xh ?}rodllctior. Co . Inc . i I F 1 I' i r k r P k. k rr l : , nrl f Dr'"1^iTl7.� CXXJ��}T 1' F!O'JS'lic �'I?v'�',?r}E a 1>1 JR I Ip a E M(ff,TMA.'4MY RFNr4Va HOIJSINI�G PRXT7= tVPLTCA_ 1:'Iaq r f NM-e and AC411059 Of Ikv�la ar/G.;x�x: Iiornor I17y _�_ _ 2,108 Hotly Hill Denton, Texas 76202 f ,1 . Nmv.3 and Address of Spon4oring , I,errl ng Institution: Nurt.h Texas Savings & Loan Assn , 321 W. Oak Denton, Texas 76201 • .CnfaiYnatian: � f 1 a) site rjo^ration,; 400 Slk. Bryan Street Denton, Texas f � i a b) A�roxnmte Total 24 Nwbe Untts J c) Approximate Number 'or: I r - - A£fiCiency uuiits � �7L't TfiS1 %mit,5 q _ , w 4 h,r4Z'om units cx�nts of Zrori?:,t.1.'t 655. , f�t,cluairK3 Ow•nox's Profit: $ 500, 000 . 00. - -- 1 E - - p II I `••IP } Tyr ":��II�wRw�t�1gT� , cr�tr ,1et ! Nc I I -- w u��� to ° rEpros t e ry �' , o tip Coy 7xvo are ti S � ut?l ►t 'f `�z,enc ec bra c �S r1LLZ or �.,�;� mj i. and a,, .,,31, z Xhs t t 4in i !, r FAY bev /Owner s 4 1 - ' I!`II 1 I , r I I DrNTON COVWFY HOUSING? )ARIMICE CORPORATION - VULTIFAM LY MENTAL, HOUSYNG PROJECT APPLICATION a Name and Address of Dove lop er/(honer: Rit1< 4 i s td It 'I Nana and Address of Sponsoring, North T 4Y,ing&and LoAn j ' Lending Institution: } _.__P0 Box q9 x Project Information: l A) Site Location : Pecan & Lth and 9th a Elm i r Sanger, Texas ' 76266 -- - - B) A` roximete Total i Number of Units: Pour K I C) Approximate Number of. 1 ..bffiaiency unite d -1 bedroom units 4 -2 bedroom units 4 ` -4 bedroom units o {I D) Approximate Total tests of Construction, Excludin;�; ainara prorit: d,11��pQ7,0I1 E) Appr•Oxirna'te Tine Noc000snry ' to complete Constructlio,i: The und(lrsigned roprosont that the 'abovo raf`:x�;ir,��-� Inc. bws"�>c;c�n rsu?ir�ited�a llti� I)OIdirig YnstltUtlon for considorni'i on and iApll boon'( Pi;,"Ott-Val't rap 1-ho ,oPporat-Ion ' t Mu.lti- gg farai).y Louns-To-Lendois;s Y�rt�grtka, l •j ' Yro Ic+>>c1 P 11S'tl_titT ' Yor Uc:vOloPorl WIMI, i w n, Al ' Y 0~' I"y O VJIA F DDRi''I fJ�a,J.Q'y i III 1LTaTN 17,1 AF2,I 7 L YniSr1vv Ism"LTC7MON r Nam tmc3 Address a4' 0o 'SUmmors Associates, Inc---. 1 6800` b alias l7arkw�tiulte 2 0 Dallas 1 r Jxas 75248 , k NmTe cmd Address of Si`'.o l.o_r- (j y Lemling Ynstitution: North Texas Savings l 110 Pkrer Denton', Texas 76201 i Prd jest 7nformtion. e} Site 7Ax'-au n ' South �lde of �'ax Avenue and west at I-15 E In Lbw,lsvllle, Texas b) Ammdmme Totes] NLtof Urx .ts: 92 Units i C} App=imte hlunba.r of: efficiency imits 24 l be&o:m unit g 72 2 1)'Aroorn lydt& 96 Ix�Clrcr n tmit d) Ap:�ro>:irato Tou.-I Cbst-5 of C`ar,�txucl:.xa�, �Ga.iY�i]1CJ Qm)c�r' e. Profit and Pees Related to the H>~C Loan a f r L' c) kv)--oxilratE1 Virc: tJc�' ��•�,�xy s to Ccx�nlete Cb"1s`z-11-;t<i.cn: COMPletlon in April, 1982 1.1T1:IC'_ r 4 Tip C si1 red c5»1t tlli3t t_h� Ei rGl{e�rerle ;1 n 3 t.h 'i.11'� 1�7 ! 37 t ...1't1G1U:1 1:U!' C•7." 1. . , ; . !U:'! ii'1.. r'.=1 :is I C o'- t}1Y Ctaric�'Cl+.i.anlr) Multifamily 7 Mrs Pxo��:Jrl� f / ♦Y Farirg ution Jim and resident ' I f W7� f , r ' 1 7�. /y.� n 7 .. D1'"Q�,� N Oollgrz 7�O,lJJI`7,J 71,Y.�Z iSl'7'Jt'. C:?iS'7ON 1'}„�'l.• r:t�.l 7 : '?i":�"t' ('i !?. 'r�i��,',�)•1,-�C\.��i�:-x'; .1�a�iX.'1~��.!',17...L?4'VGYOl'�2pC1�t;.. �=CJ,...IC1C � , f � s P . 0 , Box 128 Sanger , TX 76266 r i I' � ) :'ii �r r ,�-.i'_iu.i: Sanger ye Texas t Total 4 I , I t;sitr�:�z oI Unitat 10 _ . C)_ of: I 1 k>�;3rc�a11 unitn 0 2 )x.0ro:'cn tn,it Y: 0 tF, 1 + d) ),},,,ir�ltr ttT! Tot,iI t''c):;U; oT- a\nor'n 1'rr,f i,t.: 31130,000600 F I Y •�, �. n c' rt.` . ,..i �.'.1 ` Ji I ,'•<j, .G! . l'._ .! It _. . . Y '/..J, • r ,+ r Y Tif{1:' ' t to Ccair�lc_'f r� C: `� E.i u�:k5.c>n; x year ' t }A°"11 :tll')ii3i.tJt:� I,.O i'.11 ; F1.'1:Si) li:# ,ri'15i�1t11�'i.(J'1 1:C)1 C7y;l.`,lCa �"Qt ion nild C•3:.i 1 �1-:;'�, -rr)` �',�� e ('qi -: )1•i"t�:.].CT1JF 1� ) :iS r f� 4.. r. ?n••c. r•. . •� ' l Zt:� ��.) .Z) X�xt/� ;--ata^}r .]).a. .� �d r�a..:i;Tl� r f t National Bank of Sailgnr For J.<, -rig Lz ;iittai.aOU bi ino ,Dovelopment CO, Inc , I s 1 III , 1 r 3 1)'r:rhi, CV.! ily lJOUS ,'V ) 1.1'14\' 1�' \a)It141J1'1'7U.1 i y NOW Ml AdruLv'I[: {�� 17 :vcz].ci� 'r./O;,rc .s Clear Crock Pncciuetian ('o, Inc* p.O. Box 427 r _ Denison , Texas 76202 1 j i\i:fi'fl? r^o41 (Ai ' t P 0 Dox 1977 , Denton, TX 76201 i n) Site Ixat�itzn�: : r b) Li'7iv�.ini.-An 'Total c) Ajiprwirriaw NiI+ bor cif: efficiency Luli.ts � - � kr�3t�lcacn units , r r 2 lx.�Uvc ,i ur ft 4 bkd.r ;nl >.mita t�) rr*,7r.r..i.rn:itc� TOtAl Ol St» of N-na ' s Pi1ofi.t: M 160 ,Og0. 40 i II 1 s � S' try CcY.I Aot.Cc rU-Uoh I y 1 z. � J uY X� c 'l�h " vrl�l i �,.f;w� .3 r� ;> �. •,�. t {, t'. rho, I kyx{n ;at , I ! • ; :: a �•l, I':� t' t/.:)'a ll1 }' 711 ,t1L:,il_iCn n,i a �_,..c.t 01' 1.11c ia:».L�?r,it.y.rn�' �a Jltalt..�,i � �i � {•,� Y Ci.t;,Ii. urns t'tr t.1o»a'I {AituLion f f r? Pxz7r�uc on Cc .' c;7a �x t'x ,, Inc if I ' c 1 f f ' 1 Y t I 4 I • 1y� . laa� xf lF +kF �.Y1.illii=•'I�ARI Lsa .BS±11.. 1. , L .' A RESOLUTION AMENDING AND SUPPLEMENTING THE RESOLUTION AUTHOR:+ T2ING AN ISSUE `OF THE DENTON COUNTY HOUSING FINANCE CORPORA OLLATERALIZZO LOAN-TO-LENDER: REVENUE BONDSf 1981 SPRIE$ At FOR THE PURPOSE OF INCREASINCI THE ES'4'IMATED AMOUNT OF THE BONDS AND INCLUDING ADDITrONAL PROJECTS WITHIN THE PROGA M , r f , Whereas , on July 27 and August 17 , 1961; the Board of Directors 3 has previously adopted a resolution authorizing an issue of Bonds,to be known as "Denton ,County Housing Finance Corporation Collateralized Loan-to--bender Revenue Bonds; . 1981 Series AN (the "Bonds" ) to provide construction and permanent financing for Multi-family rental housing rojects (the Projects" ) iniiluding those described ` in Exhibits A through N as attached hereto: ;Y BE IT THEMPORE RESOLVED BY ThE BOARD OF DIRECTORS OF THE DENTON COUNTY HOUSING FINANCE CORPORATIOa 'aS FOLLOWS ; i The aforementioned Resolution is hereby amended and supple- mented such that the estimated principal at cunt of the Bonds 'ia hereby increased to be approximately $.Soax�No and The Projects for which the Board intends to authorize the Issuance and sale of Bonds to provide construction and 'per- menent 'financing subject to final approval 6y- the bender and this to include the Projects described in Exhibits O " through attached hereto. This resolution shall take effect upon its passage. Adopted and approved August 24 , 1981 . " I E i Pr s de ! / f I ' i r I rei:_i 1 :.a.. ,. _...,: . .' H.n.•:j 'i , ti:; . ,. ;-, :;> .. . .r. ,.. ..:. .. rP .:;tih .5 a .FHw :.:q' .Yt '.. ,IIYYI VYVVVr NuV. ( ". hwr/onud �f7d t DENTON COUNTY HOUSING KNANCE CORPORA'T'ION r MULTli'AA4JLY RENTAL HOUSING PRQgC:T A"LICATI'ON , t 7Jame and Address of Dsvelaper/owner: ,rSTr9 y�OC1$7 � �� t 5 7 "13o : 1 Name and Address of Sponsoring Lending Institution:; United Savings of Texas 1117 Bedford Euless Rd. W. Buret. Texas 76453 Protect Information. a) Sit* Location: ��-.�— --- sfhMM x " z r b.) Apnroximnate . Total 150 f Number of Unit �' ' c:) Approximate Number of: j effioferioy units r I bedroom unite � - x .bedroom units 4 units 1. bedrodrn '. d) Appro__pxlmata Total costs of C Pstructlon, Excluding Q 0 ow net'$ Profit: .$ 3- 100 0 Q ---• 4 i 1 ` i rr iI .,err. t� S ,y.,...; +• 'zMplr.. e, n, ,. ... , c - '_ • ,e t.t 4N..,4,.;, . �.o-q`§.ry ha►pnt�A e) Approximate Time Necessary To Complete. Constructloni G 5 C���M yTA �T u . 7b* undersigned represent that the above referenced Project has been submitted fo the Lending Institution for consideration and approval as a part ' of the ,krON- GooAlrY Multifamily Loans-Tn- enders Program.** y ': r H Hari Hall, Jr. r' Yet Vice President For Lending' instAut"Aon�r 7 For Developer/(awn 1 • w * Sucb application i; presently being considered, pending receipt and processing of a formal applicatione No firm comimitm * is to bo implied by **cution of this corm* F Lending lostitution ' 1 t t 4 r Y►ar �avalgper Qimer , , • f l� I , I f ! 3 t , vl:: r } ; r MIMTII'AMMY ' RENTAL HOUSING PRMCT APPLICATION �i Name and Address of Developer,/owner: Name' and Address of Sponsoring ' Lending Institution: 8twIsi, t ` �� E..� wrl�►aej Uyt�Gl;L� i . Project Information: . a) Site Location: J r + b} Apormima a Total Number of Units: a} App= mate Number of efficiency unite , 1 bedroom. unit � I , 2 bedroom units ,�$_ 'i 4 bedroom units, d) An. Total, Coats of Conrtructlono Ecoludinq Owner's I't'oflf: . .... � s .a�. - . i � r 1 e} Approximate Time i`Tedessary { To Complete Construction: °- ' r tie undersigned represent that the above re fare nood Project has been 0 « subm #te to th Lending Institution for consideration and approval as a part of the Multifamily Loans-Td-Lenders Program. For Lendi nstitution i P T�eveloper/ _ r 1 I 1 1 1 7 I M Z M I 1 :.. � ,. -� a .. .:L.'I�f 1 e.•}(`: � .�.1.. s a , 1 �Kud hr Lk f; f DWMN Oa1N'i'Y FMS= FM V=' COM ORATIM ' f Fl.1yP1mmmy PzgrAL Housim Pr6FI APPLItNTICV i Hams and AdBre'ss of Developer/t�emert =4 ► to �r�,�►��t��ti,a,� � I grans and Address Of sponsoring. 1,wAi:v Imtitution: . LLr 25,., '7 .:5 9 4 lnoject Infarmt.fc»t, a)' site Lamdoli: Step f b) Axr. »timete Total Nor ofUnit_a f a) Amite Nurber of i efficiemr units .. i bw1m m tali is h 2 bedroom units -, 4 bd&vm units a) A tc: o of � �n�c� "�. Total Casts on, EatcXu�tr�g pmar g Pzogi t .,,, r i � � . .. .•,a, . .a. . ti.,° .t+fie cr. ..r i , Alta Tim sc� sy x to Meta Constkkctionn: The*� bier► s '' O represent that th& atpa ref�ran�i Pro jeot teas ft a ion for mn idc rr,tion Md approval Bart cf Corpgraticr's x'tultifamily 0 ,=To--Lendexs Progrma. tatu on �vei 1 : 1 a • i a, t y , IF � ,f 1 -2- I 1 yam_ E r . e I : DIIRL7lV COUN" WJSIM rM*CE CORPORATION 'R CATION T X R � 3XIQ 1 Name dnd Ad&es's of Develaer/CA,iner; M I r M Vame Address of &perosoririg Immung xnstituticti: Projedi Info=ticns a) Sit toaatians b) Atrxudmte Totai WUu 64 R Units: . �). dmt@ 14m ber oft t, • i -w' L r. 4 bodraorn nits d) to TOL41 'Costs of C 4WtnZt4Cnt­Exolu&bV Gwnarom Profits Amrmimate Inge Necessary to'Ovrplete Cctistrwtion: �y Lx , The undersigned represent that the above referenced Projoat has been st4lvdttx:d to the xarnling InsUtution for consicio ration and 'a as a part of the Corpoxaation's Multifamily Izans-To-LeMers Prw-rrarn�val : 'V to o 1 For Devex i s • Y • -r r � r , r r . x- S �. {Y.Y,. ....r..,. .. . ..... ... eF,n� .ry{ Ya.i rlJ ..d .a.S• y .. tt.J '3 , 1,, a _ , 1+ Mild' f ' MULTIFAMILY RENTAL 'HOVSINC PROTECT APPLICATION Name and Address of Developer/Owner: ss� ark C ... 11 (r 1. Ir N6me: and Address b Sponsoring ,'r • / Lending Institution: u t��»:.i • { Project Information: p a) Sit¢ Looation: i �O� ' � 44 4) ` b) Mprolmate' Total { Number of" Units.# a) Approximata Number oft I etfic t•snoy unit: « I bedroom units '+ x bedroom units 7 r 4 bedroom units 4) A�ore3jo Total Coats of Constructlurt,, 4aluding Owner'a Profits i v ' .u., .nr,e.. <.,w..x.e. . .z... ai ;.i. .. .. w ,.,>:,..5«, .., i.•y. .#. 7., ,t)! ii,c,pg •YKvtro. ;I ,+ 'ra) Approximate Time Necessary TO complete Construction: x The undersigned represent that the above referenced Pro}er*,`t; en eubniitted to th ` Lending lnatit� :.on for consweratlun. and' approval a's; a pert of the Multifamily Loans-T6-lendors �iogram. . 1 I t •1• , I '. , . ,r L .. , 'Por Lendi ts it,ur tion ? op�r/e r f i i 1 1 1 { I 117 yyJ , 7 F: i ' t 11 I i . I • f ppplll .ks'`.!{,✓.}t 111;.4:�.1:'N��r..Ti�#Xts•�+J,..,�+ ,. FzfNaYy. .e..�.. ,., . , . . ,..� .�.. ;,J,,.nr.t Ir.r.:,•f '. r : 1 .• a ,` , , 1 �+ J «•III 1 , r. MULTIFAMIT.X REMat HOUSING PROTECT APPLICATION ► u y , 1 { 'Name and Address of Developer/Owner; Name and Address of Sponsoring Lending Institutions .._.... �'•�� '"; • ��.- - ,1 project Information: 1T � (; i a) Site Location: � � �, 1�e.•-s.�'� i b) Jp _p LVJA a e Total :1 • „Number of 'Unitst L .: C) ApProximate Number of; .t -„effloianoy units I bedroom units 2 bedroom units Y 4 bedroom units r xi ate TOW Costs of �p_4 R1 Construatfon, . Excluding ' $`"�' Wo Owner's Profit: ;' .. .._ .��... 1 • E, .�,y1al, . . l4 41( +1 'Ya F.,. i` ' :i.. '. • .' . 1., JN i.M..l A 11 .M, I 1 . 1 • e) Approximate Time Necessary 1' To Complete Construction;„ The undersigned represent that the abov.4'' referenced Pro jert`'?ia" submitted to th Gandln9 Institution for consideration and approval as a part of the Multifamily Loans-To-Lendors Program. 1 kk o or X.endi nstitution r, 1 E 11 / beopar/ 1 t � I ,r i W 7 .. 1 '• , '1 N ate. v1,IW�1aM DUMAS, HUGUENIN,, BOOTHMAN &MORROW i 1212 KIAev BUILDING 1509 MAIN STREET j i DALLAS, TEXAS 75201 12141741-3458 , K P. DUNK 11600.10471 - ftE CLAUD Q+ t>.rrnr M.Mowfow hAlTr P lWNITV'I 7 nha OIFI(;t I.,fr swi W1+D i NCH:OW.MAA"10 November 25 , 1991 u,. w.a.,s#T-x «' a f Messrs : Jerry John Crawford Lloyd Odle Wallace Hatey Mark Chew Bill Davis ' Chris Hartung William MCNary George A. Preston Dr , Ray Stephens Switzer j Richard Taliaferro Le f R r„De ton Coun : ation Collateralize ' rzri � .o- en s ff ri I Gentlemen Enclosed herewith is' a draft copy of the Resolution which E will be presented for adoption a.t the meeting of the Board of DirectOrs on Monday, November 30th , br your reviW4, Very Truly yours , i I ! EMM/� s _ Encl. f ; f M1+ r( { I r � ,tai . f r r, r; i A RESOLUTION by the Board of Directors Of the Benton County Housing Finance Corporation authorizing the execution of a Collateral Purchase Agreement, an { Investment Agreement and an Official Statements ' rati.fying, the �keoution of the Preliminary Official Statement in cy'�hnection'with ,the authoriiation, issuance and delivery of $14 , 920 , 000 4bENT6N COUNTY � HOUSING FINANCE CORPORATION COLLATERALIZED LOANS-TO- LENDERS HOUSING REVENUE BONDS , SETtIES 19$1 A""; and resolving other matters in conneotion therewith. WHEREAS , the Denton County Housing. Finance Corporation (the "Corporation",) has heretofore authorized the issuanoe of the Denton County Housing Finance Corporation Collateral12ed Loans-to-Lenders Housing Aevenue' Bonds , Series 1981 A and it is now ,pro per; for -this Board to approve certain additional documents required in the financing ; and s WHEREAS , pursuant to Lender Loan Agreements (the "Lender J Loan Agreement" ) between . the Corporation and' part cipating E savings and loan associations ( the "Lenders " % ,. each Lender' 1 will, receive a loan (the "Lender Loan") and execute a promissory note (the "Lender Note") in a principal amount equal to the amount of the Lender Loan and be credited with proceeds : of the Lender Loan in an amount equal. to 978 of the principal amount of the Lender Loan, the Lender Loan' Agree:Aent, including exhibits ' thereto ; and the Lender Note being herein collectively I called "Lender Loan Documents" ; and WHEREAS , each Lender has entered into a commitment agreement " (the "Loan Commitment Agreement") with the Corporation whereby the tender has committed to make Developer Loans. and has deposited with the Corporation an irrevocable` Commitment r Fee equal, in amount to 1% of the principal amount of its Lender Note and upon the execution of the Lender loan Agreements and the delivery ,of the Bonds, the Lender will be required f to deliver , pledge and assign to the Trustee , for the benefit i of the Bondholders , Collateral to secure the obligation of the Lenders; and i WHEREAS , as part of the security arrangements for the 1 payment of the Lender Notes , at the time of iseuanee of the i Bonds , the Corporation and the Trustee will enter into a Collateral Purchase Commitment agreement (the "Collateral Purchase Agreement" ) with Citibankp N.A. ( "Citibank") providing j for the purchase of Collateral under certain circumstances involving a default by a Lender and acceleration of its, Lender Note whereby, subject to certain conditions ,- Citibank wil'l _ be required to purchase all or a portion of the defaulting Lender 's Collateral; and E r I F t r WHEREAS, it has' also been determined thaz ,'an Investment Agreement (as herein approved) , should Ike executed in order to provide assured investment income with respeot to ' the , . Capital Res6rva Fund and that the certaint ' F i incomE, within the limitations prescribed b Of investment ` of the ,internal Revenue Code of 1954 , as amended 10� (c) � . . , is essential to the financial stability. and' integiity of the program and that the aVailabilit y ,of appioprirte arrangements was a;tso a y major consideration in obtaining a favorable rating on 'che credit worthiness of the Bonds herein authorized to be (, issued; and - i i WHEREAS , it is now a rprypriate. for this Corporation to take further actions required in connection with the issuance and delivery of the Bonds, now, there0ore , J BE .1T RESOLVED BY THE BOARD OF DIRECTORS OF THE. AENTO N � COUNTY HOUSING FINANCE CORPORATION: GEC��xON l : That the Collateral Purchase Agreement, attacrd�Fie1 as Schedule I is hereb • approved and 'substance. ' i f this as to form . The President and Secretary of this Board are hereby authorized and directed to execute and deliver the sat'd documents in Substantially the form set for in Schedule s I as the act and deed of this Corporation and this Board of Directors. SECTION 2s That the investment Agreement,-attached. hereto as Sc� edule II, is hereby Approved as to form and ereb noe and the President and Secretary of this Board are hereby authorized `and directed to execute and deliver >the same in substantially the form set forth in 'Schedule II as P aot and deed of this Cor oration and this Board of ! the., ' Directors . SECTION 3 : That in cone.,) tion with the sale of 1 bonds ; t—t O derwriters have hereto Schedule III . ore distributed a Preliminary ' Official' Statement, a copy of which is attached hereto as It is hereby found and determined that the Preliminary Official Statement (including the statistical and other financial data included therein) , as Of its .date and as of the date hereof, . did not and does not contain any , untrue statement of a material 'fact ' Which should have been included therein for the purpose for 'which the Preliminary official Stateme i tit was 'to be used, or which was necessary n order to make thi' statements contained therein in the light of the circuma°;.:antes under which they were made , not misleading. s r a , i 1 --- ---- { That a proof copy of the Official Statement, attached hereto as Schedule I'V; has: been prepared to Complete pertain final 'details which were not available at the time of preparation o'f . t;he Preliminary Official Sta"tement, and the Official . jjj Statement is to ,be delivered to the purchasers of the bonds , , • ,' It is hereby found. and determined that the Official Statement (including the statisticalrand .other 'financial data included therein) , in suO draft form is , and as of its date, will be M correct and , com� iete , in all material respects and will not j , contain any untrue statement of a material fact or omit to state any material fact which should ',be included therein for the purpose for which the Official Statement is to be used, j or which is necessary in order to make the statements contained therein, in the light of the circumstances under which they, a were made, not misleading . ` If betwaen the date of' the Purchase contract and the date 90 days following the Closing Date an, event occurs r affecting the Corporation, the County, the ' Lenders or any transaction contemplated by the ,Indenture, Lender Loan { Agreements ; the Collateral Purchass Agreement or the. Official Statement which could cause the official Statement to contain an untrue statement of a material fact or to omit to state a i I material fact which should be included therein for the purposes for which the official Statement was to be used or whieh. ;is necessary in order to make the statements therein , ' in the light of the circumstances under which they were made , not misleading , the Corparatinn, hereby 'undertakes to s notify .the perspns=`fir firms executing, the' 'Purphase Contract ! 'i F as Managing '�Underwxlters , (the. "Representatives") ,,. and ii= in i p: the opinion of the Corporation or .the Representatives such { ` event reciu.ires an amendmant or supplement to the official I ` Statement, the Corpbratioh ;will - amend cr supplement the Official, Statement in a form and in a manner acceptable to the Representative . The execution of the Preliminary Official Statement on { behalf of `this Board is hereby ratified, confirmed and accepted as an action on behalf of this Board. The President of this Board of Directors is authorized and directed to sign the final printed copy of the Official Statement as the act and deed of this Corporation . The prior use of "the Preliminary Official Statement by the Representative is hereby approved.' ; SECTION 4 : ' That the foregoing described Schedules i are made- a par t of this Resolution for all intents and purpoaese r 1 f 5 1 Schedule I -- the, Collateral Purchase Agreement Schadule II - the Investment Agreement schedule III -- the Prelimin2try Official Statement ' b Schedule IV -- the official Statement SECTION 5s That each of the recitals , 'determi�atians and j findings co't�tained in '•the preamble of this iesolution axe hereby, i found to be true and are hereby adopted as findings of .fact by f the Board of Directors of this ,Corporation . ; F I SECTION 6,i ' In the,. went ahy' sections prevision or part § ' f of` th B,; Read ,txtion, (including the Schedules)'" 'shall' be held to ii val i d or ineffective for an reason, the remainder of this be Y Resolution shall remain in full force and effect, j • PASSED AND :APPROVEDF a 3 res ehEo Boar BY Director Denton County Housing rinance .Corporatioh ATTES T i a ecretary, Boar o D iec ors t Denton County Housing Finance. Corporation 1 i f f , E k ` • , .,. ,, .oy . u•. c41tN .. JsA4,4 1' qJ:e;, =t a.S. <„�J ..,£ya .. _.... ♦ . .r.g r.0. :.. , .<iW .:hal4 .T 4, .,x...nr ,. i DENTON COUNTY HOUSING FINANCE CORPORATION SINGLE FAMILY MORTGAGE REVENUE BONDS , 1983 SERIES PURCHASE CONTRACT July 29 , 1982 Denton County Housing Finance Corporation Gentlemeno 4 Kidder, Peabody & Co. Incorporated ( " Kidder" ) , and the other dealers lieteo ' as Managers on Sohedule I hereto ( the "Managers" ) , aching not as ficuciaries or agents for you , but on behalf of ourselves and any other dealers listed on Schedule I x hereto as such list may be changed qt or prior; to the Closing; Date hereinafter, referred 'to ( the Managers and said dealers as finally determined being collectively referred to herein as the Y "Purchasers" ) , offer to enter into this Purchase Contract with Denton County Housing Finance ,Corporet:ion ''( the "Issuer" ) , which' wild,, become binding upon You and u p on' the urohasers upon your acceptanc � ;by ' execution of this ' Purchase Contract and its ,delivery ? to the Managers at or prior to 11 : 00 p , m. , ' Texas time , on the date. ' set forth above . 1 . On the basis of the representations and agreemeiits contained herein, but subject to the ' terj'�i and conditions herein set forth , the Purchasers hereby, agree , jointly and severally , to purchase from the Issuer , and the . Issuer here�y, ,agrees to sell to the Purchasers an amount not to exceed $2a , 8561000' 0 aggregate � principal amount of Issuer ' s Single 'Family ', Mortgage' Revenue Bonds ,, 1983 Series ( the +'Bonds " ) ; to be dat,od as rof a ,date to . be determined by mutual agreement by the Issuer and the Managers f Ii (the "Bond Date":) ► with such other terms as 4re ' set. forth in , or deternii.ned in accordance with Schedule IT hereto, at a purchase' pribe approved by the Issuer , providing compeAsation to the ' Purchasers of not more than 5% of the principaly, arhount thereof, 1 f plus accrued interest thereon ( calculated on the basis of ''a 360-day year) from the Bond pate to the Closing ,Date ( as here tnafter defined ) . The Bonds are authorized to be .issued under the Texas Housing Finance Corporation Act , Article 1 '61-71 , Vernon "s Annotated Texas Civil Statutes , as amend+, d ( tie "Act" ) and shall be as described in , and shall be 'issued ', ursuant to , a trust indenture ( the "Indenture " ) dated as of the )dond We ; between the Issuer and the trustee named therein ( the "Trastee" ) . Pursuant to and subject to the terms of this Pur?chase Contract , the Issuer shall be obligated to sell simO tane6usly j all the Sonde to the Purchasers , and the Purchasers ihall be obligated to purchase all the Bonds , and the entire aggregate I principal amount of the Bonds shall be delivered by' th Issuer j and accepted and paid for by the `Purchasers on the Closing f Date . ' . . .0„Oa\_ 'J 2, The Issuer. will deliver the Bonds to the Purchasers in definitive form in New' York, New York, as desoribed ,i.n the following paraaaph'. a�ira$.t , 1 payment off', the puirchase price therefor by check ' or cbeoks payable in Jm�*4f- I farads at the offices of Kidder, Peabody & Co. Incorporated, ately avai 10 HanWer Square, New York, New York at 10,00 &.m. , New York time on suh date " at such time or place as the Managers and the Issuer agree upon; such timta beirg hereinafter referred to as the "Closing Date" or the "Closing, " The 8ondO shall be printed or litho graphed ed bort3ers shall be lithographed On steel ' engraved or litho prepared Arad delivered `as tally registered bonds I F without coupons, in such authorized denominations and registered in such names as the Managers ma) 1 request. The Bonds shall be'available at such place in New York, New York as is rmatually agreeable to the Managers and the issuer' for examination and packagirg by the Managers at least 24 hours prior to the Closing and 'at Closing shall be delivered there to the Managers. I Notwithstanding anything in this Section 2 to the contrary, the Mara- E gars may elect, but shall not be obligated, to take delivery of; the Bonds in i taaporary fontt at Closing. in such event, the Bonds in definitive Porm shall be delivered within 10 days after Closing, i 3. On or pt+lor to the Closing Nate, the Issuer shall deliver to the a Marra�rs : j f (a) three eG ies of the final .Official Statement dated the date hereof (arsd each amendment and supplement thereto) "I$ the Issuer relating to the bonds (the 'IOffieial Statement"), duly executed on behalf of the Issuer by Its President; t (b) three execrated copies of the indenture; � � E t (c) an "execute�3 copy of t2,e separate Sale, Servicing and Adminis- ration Agreements dated as of the Bond Late (the "Agreement") among the Issuer, the Trustee the Administrator or Supervising Amnt named therein (the "Administrator") and the respective lending institutions which are Parties thereto (the "Participants") (which Agreements, together with the Participants' related Offers to Originate Mortgage IAar1S, as revised are referred to as the !'Agreements% pursuant to which Mortga8e Loans (as defined in the Agreement) will be originated and serviced by the Participants and purchased by the Issuer; and (d) arty other do oument reasonably requested by the Managers. The Issuer agrees to ,. o ' additional provide. the Purchasers with a reasonable number Scpies of the rb regoirag 8.q the.:. Purchasers shall reque§t, and the Issuer euttbrizes, ratifies and consents to the use of the foregoing in con-' � . nection with the Offer, sale and distribution ar the Bonds, 1 1 t , r , F 4. The Issuer represents and warrants to and c ovenants with each of the Purchasers that, a . the. 1ssuer is .a, duly Organized Texas public' nonprofit eOCpo has., , 4 Lion or nized and existing' under the laws of the State, of .uthor y ( and at .the ClosiT will have, . full legal ;right, power and authority (i) to ,enter into this Purchase Contract, (ii ) to execute and deliver the i 3 Indenture, the Agreerr,ent and the Investment Agreement pursuant to which inneys on deposit in' certain ,f ,ds" under the Indenture are to be invested (the. "Investment Agreement") , (iii) to issue, Sell and the Mort the .BI.Oa to the Purchasers as provided herein, (iv) to purchase the hlortgae loans " proceeds thereof to secure the Bonds and ,to carry �. and pledg:� them and the pC out and to coneammate the transactions contemplated by this Purchase Contract,' the Indenture, the Official Statement, the ,investment Agreement and the Agreement; (b) the ,Offieial Statement (.including .the statistical, and Ether � financial data included therein) , as of its date and as of the Clcpir� Date, w'�11 be correct and complete in all material respects and wi9;1 not j contain any untrue statement of a material fact or omit to state any material `fact which should be included therein for the purpose for which the Official Statement is to be used , or which is necessary in order to make the 'stateitents contained therein, in the light of the circumstances under which they were made , not misleading; c the Issuer has complied to the extent required as of the date ( ). hereaf,, ,and. will at the Closing be in compliance in all respects, with # the Indenture, the Agreement and the'Aot; ' cQ`ficial' action cQ the Issuer prior, to the Closing, , the Issuer Ike (d) by Quad the Of Statement arri has Will hate duly authorized and appr' with reApect .tfl this:purdlase Contract, and will have v4th respect• to the other dd6uments, duly authorized 'approved the execution and delivery j of and the perforararice ty the Issuer of the obligations on its part in in the Indenture, the Bonds, this Purchase Contract, the Agree- E cont nod rnent and the�Investment Agreerrent; (e) the Issuer is not in breach of or default under any applicable ; law or administrative regulation cd the State of Texas or the United States or arty applicable Judgment or decree or, and loan agreement, note, resolution, agreement or other instr wnt to which the Issuer d a party or to which it or any of its property is otherwise sub3eot; and the execu- k tion and delivery of the Indenture, the Bonds, this purchase Contract, the Agreement 'aril the Investzrrent'Agreement, and the eanpliance with the provisions Cr each thereof, will not conflict with or cor +titute a breach of or default under arb law, administerettiive regulatioinsturumenttto which loan wgement, note, resolution, it property is otherwise i "the Issuer is a party or to which it or orb of it•s , sub jeot ; r t is A t (f) all approvals, consents aril orders of any govermient61. euthorSty, t , board , agency or commission havirg ,jorisdiction rich would constitute ! eor4itions precedent to the performance by the Issuer of its obligations hereunder and under the ''Indenture, the Bonds, the. Agreetrent and the invest ment Agreement have been obtained to the extent required as of ,the date ! hereof' and will have been obtained at or prior to Clcsing to the extent E I required at or prior to Closing;' i (g) the Bonds, the Indenture, 'the Agreement and the Investment Agree j rrent will conform 16 the descriptions thereof contained in the Official ' Statement, and the Borxis,, when issued,> authenticated and delivered in accordance with the Indenture and sold to 'the Purchasers a3 provided herein; will be validly issued ani outstanding revenue obligations of the Issuer entitled to.the be nefits_ & the Indenture, ; (h) the terms and provisions hereof and of the Indenture an9 the Agreement will comply in all respects with the, requirements (f the Act, and this Purchase Contrast, the Indenture and the Agreement when duly exeet,ted . by all parties thereto will constitute the valid, legal aCmd binding special a Obligations of the Ts suer enforceable in accordance with their terms, except as the 'enforceability thereof' may be limited by applicable bankruptcy , insolvency or other similar laws affecting the enforcement of creditprs rights ;Wnerally and by immaterial breaches of the Agreement wriioh may not justify specific performance; there is no action, suit, proceeding, inquiry or investigation, at law or in equity, tefore or by any.,court, ,public board or body, pending or, to the knowledge at the IssUetlo threatened against the Issuer effecting the existence e the Issuer or its governing body or, the titles ' dt. its officers to their respective offices or seeking tg. prohfblt, . restrain ,ar en,�oin the sale, issuance or, delivery of 'the Bonds or..the. revenues 'or assets of the Issuer pledged. or to be pledgpd to pay the prinoipal � , redemption .premium, 'if any, and interest on the Bonds, or the pledge �. there$, 'or in and way aontestirg• or affecting the 'validity dr-ent'oree- 3 r j abiL' ty of the Bonds, the Indenture, this Purchase Contract, the Agreement or the Investment Agrearlent, or contesting the powers of the Issuer or any authority` for the issuance cf the Bonds or execution' and delivery of the Indenture, this Purchase Contract, the Agreement or the investment Agreement; nor, to the knowledge cc the Issuer, is there any basis therefor; (j) the issuance and sale of the Bonds to the Purchasers will not be subject to arV transfer or other documentary stamp taxes cl the State of Texas or arty political subdivision therett; ' � (k) the Issuer has not been notified cC any listing or proposed ! listing by the Internal Revenue Service to the effect thht it is a bond ' issuer whose arbitrap certifications,may not be 'relied upon; { , M ! t -4. and (1):' arry certificate signed , by an authorized officer of the Issuer del-iVered to the -Manageps or the Trustee at or ,pri r to the Closing shall be doeMed a repro$entatjon and W 0 With this Purchase Co avvanty by the , lssUer in 'conheotion statem ntract to the Purchaser'- or the Trustee as tz en ts made therein; 5 the W interest on Mortgage Loam and other income rep, will not be t�ub,lect to arV taXes; and eived by Issuer (n) the Issuem Its bonds in 1983 1 V expects that, in accordance with the Act n an aggregate p it' May issue I a&�tigate Principal amount r'nciPal amount of not less than the of the Bonds, 5. The Issuer also cOvetlants with each e the Purchas e rn, that: (a) if between the date a this Pureha days following I Se Oontraot and t�je the Closing Dat6 an e�-ent occu date go CQU)ItY, the Participants r'8 affecting the Issuer, the the Agree*nt or aT transaction contemplated 'by the Ini or the Official denture statement to�I'c- Statenent which could cau se the Offici ontain an unt' state a rraterjal pact I �hj rue statement Of & Material fact ch Should be included , Or to aml t to for which' the Official Statement was therein fbr th6 Order to =10 the 6tat.etrah to be, used, or which is purposes I ts therein necessary in under which th in ,the light or the cir6wmtanc � I � eY werei made� not Misleading., �he Issuer'. Shall not,f es Manageiist and if in' the opini ' , ce the Is$ on U6r or- the Maijagem S Y the Ui res ah� Menlrent: or su tich ti pple"jit t4o the Official will Nrend Or S'UPP16Vnt the Official Statenent 'Statement,, the Issuer, acceptable, to the Managers; in a :rorm and in a minner (b) the Its Ler will fu�,niih SuchIinformation, execute FentS,,and t&LL I stl(fi� other action P&r tion with the Manageris as the in 0.06 ra ROPresentative rtay reasonably request to sale under the Blue Sky or Oth . qualify the Bonds "fov offer and state er seouritles laws and reVlations at such s and other UVisdiotioju of the Lhit may desigiate; Provided) however, the I ed States as the Representative ssuer shall not be require-j to register as A dealer or broker In arV such state or jurisdiction execute a Special or 8�neral consent to service � nor of pro do business in co cess r qualify to 4 nneotion with arV Such qualification of the sale in any Jurisdiction; and e Bonds for except fOr the Bond-3, t ' or, Othe oblikot,,�jons Por borrowed money he latter Will not issue &rly r bonds notes to Provide fmd�: Pursuant to the Act or otbep fo r hou a irg rwise the funds in. the Acquisition Purposes W until substantially all of Fund created under the Indenture have, been 00Wdttad,,'to Eligible Borrowers under the ram to finamc6 MOr'tgige Loam, (as such terrM are deined in the Indent Of under the Indenture) or (1i) unless the ure 014 Otherwise &$Posed under, a. subsequent ,housing program at the Mortgage 10ans to be Or .t With the Mortgage Loans Sauer would be� none . jinated OmPe tive -5- f 6. The Purchasers may terminate their, obligations hereunder by writtei notice to the Issuer if at any time subsequent to the date hereof `and Pn Or Prior to the Closing Date; (a) ` (I,) legislation shall have been enacted by the Congress; or I ' introduced in the Congress , or reccmwnded, to the Congress for . ? o psage; by J en or the the of the United States or the United States Department Treasury or the Internal Revenue Service or any member of 'the United States Congress, or favorably reported for Passage to either House of Congress by any C*7dttee of such House to which such legislation has been referred for consideration, or (ii`) a decision shall have been rendered by a ates, established under Article III of the Constitution ce the United States, or the United States Tax Court, _or (iii) an orc3Er, rulinig, rep- Or{ lat on or camvn cation (iricludi a j by' the Treasury, n press release) shall have been issued i Y Department of the United States or the Internal Revenue 5 Service,' Or (iv) any action shall be taken or statement made by or on behalf of the President of the United States or the United States Depart- ment of the Treasury or the Internal Revenue Service or any ri�ember a+ the United States Congress which indicates or implies that legislation. will ► be introduced in the next sdzeduled 'Session of the United States Congress, in each case referred to in clauses (i) , (ii) (111) and iv } i purpose or effect; directly or indirectly; of imposing Federal Inc 1 taxation upon interest to be received by arw holders of the Bo nds; or (b) legislation shall be enacted • ; Securities ar�d Exchange any the shall be taken by the { arge C�:�,m.ss�on which, in theopinion of counsel to the ' F ti„ Purchasers, has' the effect of ,requiring the offer or sole f the Bonds to , } be registered under the Sequriti.es Adt of ; Act") , or any other "security". 1933, as amended ( the "Securities c onneot ion with or' as tY", as defined in the Securities Act; 'issued Sn or' the Indenture to be,part ualified asgan indenture Bonds ' to be as 'rqglgtered Act 'Of 1'939 ''as amended; or ure under; the Trust Trldehttkre arty event shall have 'occurred or shall exist +�fch in 'the reasonable ju9grrent the Mara rs I reat in arp� material res ct > makes .untrue .or inoor- pe are+ statement or information contained in the Official Statement` is not reflected in the Official statement but should be reflected therein in order "to make the statements or' informtion contained therein not misleading in any material respect; or (o) in the reasonable Judgment of the Managers it 1s impractical or inadvisable for the Purchasers to market or sell or enforce agreements to sell Bonds because (1) tradir� in securities generally;shall have been suspended on the New York Stock Exchange, lnc. torium.shall have been established by Federal, }New Yorrkk17Or Texass aunthorig i ties; or (ii) the State of Texas shall have tarn any action, whether administrative le ,judicial or otherwise, or (iii) a war involy I 1ng the United States or other national calamity ,shall have occurred; or {d) there shall have occurred in the reasonable ud gPrs a material adverse change in the economic conditionsntheJ $� _ t tlon cf> the Issuer generally or in the affairs or econcmlc condition' of the Administrator or of the Issuer or of any cf the Participants;� pants; or � r .11 i 1 -6- r • I r i 1 (e) there shall have occurred any change Wbieh, in the reasonable Judgment ; of the Managers, makes unreasonable or Unreliable any or the assumptions upon which (1 ) yield for purposes of Ser.tion 103A of the ) internal Revenue Code of 195u, as amended (the "Code") , or (ii) payment 'service on the Bonds, is predicated; (f) ; there shall have oeourred an event described in Section 5(a) hereof hiieh, in the opinion of the Managers, requires or required an arrendirient or supplenv'ht to the Official Statement; or i (g) the Managers shall have reasonably determined, in their sole ; discretion, that the issuance and sale of the Bonds will not males it practicable for the Issuer to carry out a viable single family mortgage ; purchase program., t , 7t Toe obligation of the Purchasers to purchWe and pay for the Bonds is Subject to the acouracy cC the representations and warranties; of the Issuer herein as of the date hereof and as of the Closing Late, to the accuracy of t stat ements. to be made on behalf of the Issuer hereunder, to the 'perf6ftWc.e by the Issuer of its obligations hereunder and to the following additional conditions: (a) at the time of Closing, the Indenture, the Agrement and all 4 official action d the Issuer rotating thereto, shall be in, full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by' the Managers; M (b) at the time of Closing, a "Mortgage Pool Insurance Policyt, . and a "Special Hazard ,Insurance `policy', shall have. been issued and shall be in i'ul1 force an�a effect, providirg far the issuance a'' such irsu,sance on tenm and conditioiv satisfactory to the tanagers; (c) . at the time of Closing, the Issuer shall receive the approving ; opinion of a born counsel satisfactory to< the �+lanagers, dated the 'Closing Date, , and the Managers ,shalI receive, the Supplemental :opiniota of ,said firer,, dated the closing Date, and addressed to the Manaprs , each f a farm satisfactory to the Manages; (d ) at the time of Closing, the Managers shall receive the opinion of counsel to the Ttustee, dated the Closing Date , and addressed to the Managers, in a form satisfactory to the Managers; (e) tt the ti�T 'bf Closing, the Managers shall receive an inducement letter ircm each of the Participants in a 2brm satisfactory ;to the Managers; (f) ` at the tine of Closing, the Managers shall receive the opinion of counsel to each of the Participants, dated the Closing Date, in a furm satisfactory to the teenagers; .7 1 } (g) at the time { epeoial tax o Clctorg, . the tdanagel shall receive the in Q. unsel satiai'actory, to the Marta rs o ion of and addressed to the Isati?r, on their a the Mar arses , dated the Closlrg Late, , xaminatton of laW, review ofai to the effect that, based s$uer.� in reliance upon the n cerCifications me described in the Official' Stdtemsnthenati� . l oalai18r'm de by the such counsel is of under the' e ,r atxi determirltiorts the opinion that option Certain Verifi` rr ' r are sufficiently set forth in such oertifhe tact cations , ^ (i ) the f'aets, estimates and oir' ►w'�ich are necessary to sic , to satin &mstanees bands under fport the Conclusion that the Bonds are no � thereunder, Section th 103(0) Of the Code and the r that the yield on the A1or egulations; l�'amulPted,s Yield on the Bands, by rrpre than tgage Loans does not ex ' the meanug of Section 10 the the that is then seed tti;e 3A(i) of the Permfssib'le to the attention Such counsel which make ►+d thin i .ode, and that no hitters havF cane representations° made"in the aforementioned cerrea reasonable or incot�rectr he , t (h) at the tip of Clc�si , or certificates, dated the Closing the Managers shall I?ate of receive a �ertifiottte f r'y the Managers; , the Administrator in a form (1) at the Gf counsel for tie n Closirg, the Man r {' the Administrator alters shall receive ay opinic,7 j to the Issuer, the Trustee arzi tned: ted the Closing Late [ the Mshaggrs; Managers, ► arx3 addressed f , in a font satisfactafv to (a) at the t E of Gounse icc ca orirg, the Managers 1 to each .ctmparp' p�'o`�di eS shall receive gn ' t and/or Special Hazard ng the Mortgage Pool Insuranc Opinion to the Issuer murance Pol.ioy, dated t}ae C1osi Policy , the P 9nagers, the Trustee and the Adm riistrator,, in a fdnn satisfactat tot Date and Addressed he Managers, (k) at the time oi` Closi dated the Clos.i rg, the Managers staall receive a oertificate + ' ng ,Date and sl ed y in a zbrm satisfacto b an authorized officer of the T satisfactory to the Managers; trustee j (1 ) at the time of C]"c>`s ,. dated the Closing Date si ' the Managers shall receive a certiCieate, satisfactory to the M ' wed by the President of the Issuer a►�ager�; in a for", (m) at the time of C1a41 .r �' the M � donee satisfaotory to the Manage ' angers shall receive written evi_ Issued a rat rg Of "All or bettee onthat Standard & Poor►s corporation has in effect on the Closing Date; the Bonds, and such rata rid hall be (n) at the tSrne c�' C1081 %*Clcei , the Managers shall receive a letter dated ng Late and addressed to the Mans rs Tax Counsel Fran s 1'Sttn lrtde ge , Bond Counsel end S the Nianag�rs, in form satisfactory aoaourttante satisfao any to the Managers, to the effect that- t� ey 'to , 1 , a r \ d r � 4 have reviewed the ass4vtions with regarQ to, the 'investment r�turn on funds held under the Indenture and have verified the matherrr�t cal 'accuracy of: (A) : the ecnputations relating to the sufficiency of the protected Cash flow receipts and disbursements on the t4ortgage Loans and reserve r funds to pay principal of and interet on; the Bonds (assuming varying levels cr the funding of Mortgage Loans and the prepayments thereon, + acceptable to the Managers' , and (B) of the 'canputations relating to the I actuarial yield on the,Mortgage. Loans and an the Bonds supporting the conclusion that he Bonds are not arbitrage bonds under Section 103(c) "f of the Code and do not violate the provisions of Section 103A of the Code; (o ) at, tile, time of Closing, the Managers shall receive' such opinion i of their counsel as they shall reasonably request. In rendering such opinion, counsel rray rely as' to all rrntters of Texas law upon' the opinions i of borvi Counsel , and counsel' to the Administrator , Issuer and Participants; ( (p) at the tune of Closi g, the Investment Agreement will have been exE�uted and delivered to the Trustee on terms satisfactory to tne 'Managers, (. (q) at the time o' Closing, the Managers, the Issuer and the Trustee r shall rkoeir� a certificate dated the Closing Late and `Signed by an author- ized crricer of the issuer of the investment Agreement in a fotsn satisfactory to the Manag�-rs; 1 ( r) at the time & C los i: the Managers, Issuer and Trustee shall receive an-.a5pin1on; dated the Closing Date of counsel I to the " iss.usr o' the Investment Agreenent, in a form satisfactory to' the Mangers;` of C1oni the Issuer, at its expense, shall, fuhiish ('s) at the ,t i r{ie ng, a` or' _cause to be furnished by the Participants such additiona2'. legal opiriior�, ` certificates (inolldirg requisite arbitrage certificates d' ttie:�s$uer) , instiruments and other doaunents aS, Bond Counsel,"or Counsel to the hr irchasers msj+, reasonably req st to, enable such oor.rsel to render' their respective ! oj�inions "onto evidence 'ernrpl once with legal requirC",nts, the truth and : aocuracy , as of the date hereof burg; as o' the elate 'o' the Closing, of the bt the stat representations and warranties contained herein and arnents of�' inforination'cohtalned Sn tise. or fioial Stateme nt and the due perp6rrrance: or satisfacti,)n on or pt!ior to the 'Closirg-Date of all'agreenents t1.en to be performed and all conditions then to be satisfied. All the opinions, letters, certificates instruments and other docu- rents menti6ned above or elsewhere in this purchase Contract shall be, de d f to be in cgmpl�iance with the provisiuns herear if, but only. if, they .are 1(: form.and eUiitance satisfactory to the Mamgers, and the Managers shall shall s ! have the right to waive arty condition set forth in this Section 70 . 1 'i , r9— ^� h t 8. If a Clan shall take p?ace hereunder, 'the Pu rchasers shall. be } under no obli�ton to 'pay , and 'the Issuer shall cause to be paid Out of Bond j proceeds or otherwise, any expenses incident to the performance cd the Issuer's z obligations in connection with the issuance of the Bonds, including, b t not limited to,' printirg costs (including the printing and delivery of the Prelimin- ary and final offidia1 Stateimnts) , costs or reproducing and bindirg. documents, filing and recording fees, in,i vial fees ar►a charges of the Trustee; legal` fees and charges (including Bond Counsel and Speclal 'Tax Counsel), professional consultants' and accountants' fees (for ,verification) , costs of canputer studies, Costs of mrtgage, market analysis , costs of bond ratings, fees and charges for execution, transportation, printing and safekeepir of ,Bonds, costs of any tial insuran��e prettd.ums , and other casts, charges and fees in connection with the foregoil'.g: { r The Participants, the Administrator and the Tru3tee shall pay.. their vwn expenses, including the fees and expenses of their respective counselsp s Th. Purchasers shall pay the legal fees and charges of their counsel and their, out-of-poclet axpenses in connection with the sale off' the'gands. R 9* A notice or other 'cammunication to be given to the Issuer under, ro this. Purdrase Contract may be given, by delivering the. same in writing to :the Issuer it. its address act forth above, and. aid notice :or, other, eararpnication a` to be given to the. Pur: asars ' under this Purchase Contract r{ey.be ' ivrn by it deliv�ring;;t' g8ene in variting''to 'Kidder, Peabody & C04 Incorporated,..Mulicipel a Finance vepp,rtnent, IC hariover Square, Nevi, Mork, New Rork. 'the, aMPCI al" or ottkr &Otion or, exercise cf Judgment, by the.Purchasers . or by the Managers bhalY be .evic9eeneed by a writing signed on their' behalf by Kid& airr3 delivered to' tse Issuer, , 1 10. This Pun°chase Contract is made 'sol ely .fa'r the benefit c ' the Issuer, and the Purchasers (including their successors or assigns) and no other person, shall acquire or"- gave arp� right hereunder or by virtue hereof. All the j repreaentatlons, warrar►ties , Covenants arxl 'agreerents-;contairyed herein sT all ` remain, operative "' in 11dl force.,and ,effect arid. shall survive deiivery ;of ` and "payment for the Hoods hereunder and rep rYiless of arxv investigation mach by the Purchasers or on their behalf. �. a 11. This Purchase Contract shall be governed by the laws of the State of Texas. i , is j -14- I i . f 12. ThiQ Purchase Contract shall beocme effective u Of the aceeptanee hareof by the Issuer. �°n t�� execution Very truly, , _ y' yours I KIDDER, ,PEABODX & CO, INCORK'F�ATED and the Other Managers listed ore Schedule T ; As M rs 7 t T ,5 L Aecepted .by resolution edcpted at Denton, Texas on July'?? , 1g81. ' IENTON f10I)1+1'I' HWST,YQ FINANCE' OaUORAMON I r EsLdent' � E F E 1f; .I r , I -1l- r I { SCHFI)ULF l r: { Man age rs Kidder, Peabody & Co. Incorporated gitibank; N,A. First Swthwest CcxnpariY Hgward, Weil , Labouisse, Friedrichs Incorporated Other Purchasers Y f 11 I 1 Y I 4 - I t t i � r �tI d t •;.es.,,ilea .>.-w . w19 fie .....hc»ad0: .r 7 t k �a n ., ai.{1 r ;; 1.•^}a .i '. III 1 ; i 'me Bonds (i) sha11 boar interest at Various Hates not exceeding ; anritm able annually or serai.4rx Tally on such dates (ii) 15 per cent per P (iii) shall be issued sha'_1 mature oh such dates and in such prshall be to redemption prior to in such eggr' ate principal amount, t re fully maturity and have suds other' terms, all as shad be mi (v) shall s° •�. forth in the bore resolution the Issuer and in the Indenture and all as ; gpproved by the Managers. FS d l µ: 1 . 11 , k I , 1 � l 1 i , a t rl 1 i .i S 1 4 ' 1 I 1 . 1 4 1 , 11 0 a {' 1. ISSUE RATINP; NEW Css ;Yl (see "Rating")Standard & Poor'st AAA In the opinion of Bond Counsel, 'based an existing stalules, regulalion.s, court decisions krid rultngs, reveres!on the Bond+ u exempt from federal income luxation to the exltnt, upon the conditions and subjict to the limitalions se!forth herein under "Max Exemption $8,7509000 .` { Denton County Housing Finance Corporation k 9°h% Development Revenue Bonds i (Scripture Oaks Development) i Series'1988 E Price; 100% (plus accrued Interest from .December 4, 1983) 1 Dated; December 1, 1J83' Due: December 1, 1993 The Bonds will be issued in fully registered form, in the denomination of$5,000 or any integral multiple thereof. Principal of and redemption premium, if any, on the Bonds will be payable at the principal office of InterN irst Bank Fort Worth, N.A., Forth Worth, 'Texas, Trustee and Paying Agent, or its successor. Interest on the Bonds will be payable June l and December 1,of each year, comniencing June 1,'1 9$4, by check or draft mailed by thcT rustee to the persons in whose name the Bonds are registered on the relevant record date described herein. rthe Bonds will be, subject to mandatory and optional redemption and acceleration pttot to maturity, as t described herein undbr "The i Bonds•" The proceeds of the Bonds will be used by the Issuer to make a loan to Scripture Oaks, a Texas general ' partnership (the "Partnership") and to pay the costs of the issue, The Partnership will use the proceeds of the loan 1 ' for acquisition, construction and'equipping of a residential facility including a 125-unit residential rental develop- ment and a 60-bed intermediate care facility, . r The Aonds are litnited obligations of the Issuer, and principal, premiutn, if any, and interest will be payable 3 solely fjo► loan payments made by the Partnership and other amounts pledged therefor under the Indenture• In addition, trustee will hold and may draw under a Letter of Credit. by Home Savings Bank, F.A, (the "Assocratioii ') amounts calculated to be suliicient to pay any principal and interest requirements(but nac redemp t lion premium)ou the Bonds. In connection with the Letter of Credit the Trustee will receive a Surety Bond Issued by Firennan's Fund Insurance Company and its subsidiary, The'Arnerican lnsuranca Company(collectively the "Surety"), fully guaranteeing the obligation i of the Association to honor draws by the Trustee under the Letter of Credit for payment of principal and interest on the Ronds• Under the terms of the Surety Bond, in the event of a failure by the Association to honor draws on the . Letter of Credit, the Surety will be required to makcpaymerus to the Trustee in amounts edjsal to the draws requested by the Trustee for payment of principal and interest on the Bonds and not honored by the Associ�tion,,including i[ principal due by reason of redemption or acceleration under certain conditions as more fully described herein. The p`} ubligations of the Surety under the Surety Bond ate a general obligation of Fireman's Fund Insurance Company and are absolute and irr,wocable and in no way are conditioned upon the continued payment of premiums or any other actions required of the Issuer or the Association In no event shall the Bonds create or constitute an indebtedness, general or special, or liability or moral t obligation or a pledge of the faith'and credit or loan of the credit or taxing power of the State of T6kas or any political i subdivision theireof, The Issuer has no taxing power. The Bonds are offered when, as and if issued and received by the Underwriters and subf ect to tht legal apinion of Fulbright i!i &faworski, Itouston, Texas, ,bond(counsel, as to aalidilyand tax exemption, 0 ain legal matters w' Passed �t uponfor the Partnership by Phillips, Whitt, Danidge, Griffin, Siouan, Eames, Wood&Uuncdnr Denton, ` ;; Texas and for the Underwriters by Chapman and Culler, Chicago, Illinois. It is expected that the . F Bonds will be available for delivery in Dallas, Texas on or about fanuary 16, 1984, j t Y ' Kidder, Peabody L^d'C0. s Incorporated ; Stephens inc. First Southwest Company Dated; December 30, 1 Q6J i 12 t I No dealer, broker,,,salesman om other person hag bfen autho 1%6d, by the 'Issuet�`o;,'�the t!, Uitderwrlters to gi{�e any inforaiatlon`Or to make any cPtesentations A'thef tl ar, those confaiA din this(yflicial S.tatem�nt and, if given ox made: such other infot>aoatit n or epreegntat;ona must nyt be i reli4d upon as having been authorized by any of thee foregoing, This Z fficial Statemeu a.O'0b,rtot constitute an offer to sell or the solicitation of an offer to buy, nor shRil there be any sale of the Bonds by any`person, in any jurisdiction in which it Is unlawful for such person to make such offer,, solicitation or sale, fhc information set forth herein has i?een obtained from the Issuer anO other I ources which are believed to be reliable, bait it is not guaranteed as to accuracy or completeness and is not to be construezi as a representation by the Underwriters, The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official 1 s i Statement nor any sale made hereunder shall, under any eircumstani,es, create any implication that there has been no change In the affairs of such`Issuer or any,'other parties described herein since the I date hereof. #t, ` The Surety assumes no responsibility for and makes nA representation as to the advisability of 1}�t infesting in the Bond s; including the tact-cxetitpt status of the Bonds. Other than the information pertaining to the Surety and the Surety $ond contained Wthis Official Statement,, including the . financial information with respect to the Surety contained in Appendix C to this Official Statement, the Surety neither offers an opinion-nor assumes any responsibility for the We or accuracy of any information contained herein or for the omission of any'information relating hereto. , !y IN'CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT , 11 OR EFFECT-TRANSACTIONS WINCH STABILIZE Olt 1NAINTAIN THE MARKET PRICE dF THE BONDS OFFERED HEREBY AT A LEVEL, ABOVE THAT;WHIC ? MIGHT OTHER- 1� WISE PRlwVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME, TABLE OF CCINTENTS'` ` Introduction . 1 The Issuer Secttity farthe Bonc{d ` The B6nda 4 i Sources and Appiications of Funds . . . . . . . . . . 6 s The Project . „ fi . Thb Association 6 Summary of irovislans of Documents 6 Enforceability ofRetnedles . 6 Tax'Exemption Legal Matters Underwriting . 9 $ Rating { ' 7 S Miscellaneous 8 111 Appendix A" Summary of provisions of Documents , q.1 Appendix B Financial Information with Respect to the Association Appendix C Financial Information with Rrspect tci the Surety . , , . t;-1 t i a. t is rk 5! 4 1 , s,750,000 4 ' Dentoh County Housing Finance Corporation 3' r Development Revenue Bonds (Scripture Oaks Development) Series 1983 INTRODUCTION J ? This Official Statement sets forth certain information relating to the sale by the Denton County i Housing finance Corporation (the "Issuer") of $8,750,400 aggregate principal amount rif-its Development Revenue B�mds (Scripture Oaks Development) Series 1983 (the "Bands''). The Tssuei";f 11 public nonprofit corporation created and existing under the laws of the State of Texas (the li The Bonds are being issued pursuant to the Texas Housing Finance Corporations Act, Article 1269141 Vernon's Texas Civil Statutes, as amended ((he "Act"), a resolution of the Issuer(the "Resolution") and i an Indenture of Trust, dated•as of December 1, 1983 (the "rr.denture"), between the Issuer and InterFirs,t Bank Fort Worth, N,A,, Forth Worth, 'Texas, as trustee (the "Trustee"), to provide funds to make a loan Q (the "Loan") to Scripture Oaks, a Texas general partnership(the "Partnership") and to pay issuance a"rid i certain other costs of the Bonds, The obligation of the Partnership to repay the Loan will be evidenre'd by a promissory note (the "Note") of the Partnership, The Partnership will use the proceeds of its Loan'for 4 acquisition,,construction and equipping of residential rental facility (the "Project"), The Loan will be pk made pursuant to a Loan Agreement (the "Loan Agreement") between the Issuer and the Partnership, On the date of delivery of the Bonds, Home Savings Bank, VA, (the "Associations') and the Issuer wlll enter into a letfer of credit and reimbursement ag eemem dated as of December 1, 1983 (the "Letterof '4 Credit. Agreement") pursuant to which the Association will deliver to the trustee on ,the date aP such \ delivery an irrevocable Letter of Credit under which the Trustee is authorized to draw,`in accordance with the terms and conditions set forth therein, amounts which are sufficient to pay in full the principal and "J interest (but not redemption premium) due on the Bonds, See "Security for the Bonds — The Letter of a Credit" and "The Association." Concurrently with the execution of the Letter of Credit Agreement, the Association will be re uired to q i deliver, to the Trustee, for the benefit of the Bondholders, a surety bond (the "Surety Bond"),issued by j Fireman's Fund Insurance Company and its subsidiary, The American Insurance Company(c¢iie<;twely, the ''Surety") fully guaranteeing the obligations of the Association to make payments under the Letter of 1 1 Credit, Linder the terms of the Surety Bond, in the event of any failure on the part ofthe Awciation to i Mike a payment under the 'Letter of Credit pursuant to its terms and the terms of the Letter of Credit ! Agreeme pt, the Surety will be required to pay to the Trustee, for the benefit of the Bondholders, amounts equal to the!principal and interest on the Bonds and any other amounts due and not paid by the Association under the Lefter of Credit. Subject to certain limitations, in the event of a failure of the Association to make payment under the Letter of Credit, the Surety Bond arrangements grant the Surety the option to require &# the Association's obligations under the Letter of Credit to be accelerated so that a an amount equal to all principal and interest on the Bonds, as of the next interest payment date on such Bonds, would become due, If the Surety requires the acceleration of the Association's obligations, the Surety Bond provides that Yp ,y q payment Surer a to the an amount equal to the a merit. not received from the Association, Under 1 the i the Indenture, the entire principal amount of such Bonds then outstanding would be subject to mdndarory redemption at par on the 30th day after receipt by the Trustee of a written notice from the Surety directing 'redemption of the Bonds. The obligations of the Surety under the Surety Bond are absolute and uncondi- { tional irrespective of any failure ofihe Assoclation to Pay the required premiums on the Surety Bond or to otherwise comply with the terms of its agreements with the Surety, See"Security For The Bonds Surety 'yy Bond" for further information relating to the Surety Bond, i At the time of closing of the Loan, the Partnership will be required to convey a deed of trust lien and a security intercat in the Project pursuant to a Deed of Trust and Security Agreement, See "Appendix A -- Summary of Provisions of Documents •-- The Deed of Trust" for further information relating to the Deed Of Trust. 'I ho Partnership, the issuer, the Trustee, and the Association will also enter into a Regulatory 1 i I F Agreement(the,"Regulatory Agreement") canraining certain representations, warranties and restrictions s' t concerning the acquisition, construction, ownership management and operation of the Project. The Rog• r ulatory Agreement,retlitixcs that the Project be owned, managed and operated as a ''residential develop- mont" as delined in the Act it'icluding a requirement that not less than 90% of the units in the Project be ; occupied by persons whose aggregate gross income for the most recent tax year prior to their initial occupanry did not exceed $44,704. See "Appendix A -The Regulatory Agreement" for further informa- tion relating to the Regulatory Agreement. t Brief descriptions of the Issuer,the Bonds, the security for the .Bonds, (lie Association and the Surety, F' together wish summaries of certain provisions of the Indenture, the Loan Agreement, the Regulatory Agreement, the T , Iter of Credit, the Surety Bond and other documents, follow in this Official Statement. Ail summaries herein of documents and agreements ar'e qualified in their entirety by reference to such documents and agreements, and the summary herein of that Bonds is qualified in its entirety by reference to ` the form thereof i icluded in the Indenture and provisions with respect thereto included in the aforesaid j documents and agreements, copies of which arc available fbr inspection at the principal office of the i Trustee and, prior to sale of the Bon ' at the principal offices of the Underwriters set forth on the cover Fi page hereof, THE ISSUER t I The Issuer is a public nonprofit corporation created and organized pursuant to and in accordance with the Act following the adoption of an approving order by the Commissioners Court of Denton County, Texas. The Issuer is authorized Linder the Act to issue the Bonds, to loan the net proceeds of the Bonds to ` the Partnership for.acquisition, constructing and equipping of the Project and to secure the Bonds by a i pledge by the Issuer of the payments to be received by the Issuer under the Loan'Agreement, .i As more fully provided in the Loan Agreement and the Indenture, neither the Issuer nor its directors and officers aiv personally liable for the obligations of the Issuer under the Bonds or the Loan Agreement, i t the Indenture or the transactions contemplated thereby. SECURITY FOR THE BONDS General . , The Benda are epeeist, limited obligations of the Issuer payable solely from payments on the Note, the Letter of Credit, ?the Surety Bond and any other revenues, funds and assets pledged under the Indenture (and not from any other revenues, funds or assns) and do not constitute an indebtedness or obiigation•of c i, the State of Texas, Denton County, or of any county, city, municipal or political subdivision o6 ho State of Texas, or a loan of credit of any of them, within the meaning of any constitutional or statutory provisions t •y or otherwise. The Issuer has no taxing power, R� The aggregate payments of principal rind interest on the Note and other payments due under the Loan Agreemtnt are scheduled at all limes to equal or exceed debt service requirements on the hoods, including : the possible redemption of such Bonds prior to maturity. Pursuant to the Indenture, the Bonds are secured b an assi nmem pledge nd securit interest ranted b the Issuer in i all of the Issuer's rights under the y g � p � � y g y O g Loan Agreement, including all revenues and other amounts due to the Issuer from or in connection with the Loan and all security granted or held for the payment of the Loan (on a parity with the obligations of the tl t . Issuer under the Letter of Credit Agreement); (il) the moneys held in the funds and accounts of the Issuer established under the, Indenture, together with investment earnings thereon; and (iii) the Issuer's rights i and interests in the Regulatory Agreement; ant: are also secured by the Letter of Credit, the Surety Bond and any amounts realized under the Letter of Credit or the Surety Bond, f � , The Letter of Credit Concurrently with the delivery of the Bonds. the Association will enter into the Letter of Credit {< Agreetnet and will issue a Letter of Credit guaranteeing the payment of principal of and interest on the Bonds io the.extent of the amount of such Letter of Credit, The amount of the Letter of Credit outstanding from tinic to time shall always be art amount equal to the aggregate principal amount of the respective t, Bonds Outstanding and an additional aniount (the "Additional Amount") equal to (1) 279 days' interest t' on such Bonds plus u) if the Partnership has filed or has had pled against it a'petition in bankruptcy, an . � p (��. P K P .' amount equal to the aggregate amount of all payments received by the To from the Partnership which i may be subject to being determined tote voidable as "preference's" or"post petit€on transfers"under the Bankruptcy Code or similar laws which mayapply to the Partnership, plus(iii)an amount equal to the fees due to the Trustee over the next succeeding six month period, The amount of the Letter of Credit for the ensuing six i month period shall be adjusted on May 31 and November 30 of each year by notice from the g' 'n at least 15 days prior to such date'to the Associttion as to the Additional'Amount and as to a the principal amount of the Bonds which are no longer Outstandiug. i I The Indenture directs the Trustee to drari upon the Letter of Credit(i) to pay principal of and interest (but not redemption premium) on 'the Bonds due on any interest payment date, redemption date, or f' acceleration of the Bends to the extent that moneys are not otherwise available under the Indenture, and (ii) to reimburse the Bondholders for any payments of principal of or interest (but not redemption premium) on e Bonds determined to be, or subject to being determined to be, voidable as "preferences' n or for similar reasons, The obligations of the Association under the Letter of Credit shall be absohtteand irrevocable upon issuance of such Letter of Credit, irrespective of any claim for reimbursement or fees is thereunder on the part of the Association. The Letter of Credit 'Agreement further provides for ,f reimbursement to the Association ofany drawings under the Letter of Credit or fees due for providing the Letter of Credit which have not been otherwise paid.'The Letter of Credit Agreement provides that the Association may not exercise any of its rights as a secured party,with respect to the revenues and assets.held under. the Indenture until all of the Bonds have been fully paid within the meaning of the Indenture. t The Surety Bond Upon delivery of the Bonds, the Association will deliver to the Trustee for the benefit "of the k Bondholders a Surety Bond issued by the Surety fully guaranteeing the Association's payments on the { Letter of Credit, In the event of a failure by the Association to make a payment under the Letter of Credit when due, and upon notice by tho Trustee to the Surety that such payment has not been made, the Surety is required under the Surety Bond to make a payment to the Trustee, fnr the benefit of theondholdcrs, in an amount equal to the amount due and not paid by the Association. In the event that the Association shalt fail to make a payment under its Letter of Credits its obligations thereunder shall be accelerated and an arr�Gttnt shall become due thereon equal to all principal amdu )o of the Bonds putstanding;together with all interest due and to becotriei,`due thereon as of t:tp next interest paymettt,dAte on Quch'Bonds, If the,Surety;provldes notice to the Trust&'th'at the Surety, ,Ares that the Association's oblig'66ns under the better of Credit be accelerated. L.rnder the Indenture, s4h,t.veni is an event requiring the mandatory redemption p tl of We, Bonds outstanding on the June 1 or Dec't,mber l immediately following such acceleration at a pried of par j with accrued `interest to the redemption Bate;being paid tG Bondholders of record as of the applicable EE I . Record Date (see "The Bonds Redemption Provisions','). If the Association shall default Ina O' 'aytnent i obligation of'the Letter of Credit, then the Surety in effect has the option, in its sole discretion,' to make i succeeding payments under the Litter of Credit on behalf of the Association or to require the Association's obligations to be accelerated and pay such amounts to the extent not paid by the Association, Under,the terns of the,Indenture, the Trusice is required to provide notice to the Surety immediately - upon anyfailure of the Association to pay any amounts under the Letter of Credit when due and to provide l all showings required under the Surety Bond in order to recover thereunder, at least two business days prior to the related payment date on !hc Bonds, The terms of the Surety Bond 'require the Surety to pay amounts due thereunder within one business day from the time the Trustee supplies the required t indications of nonpayment by the Association. I The Association is required to pay the annual premiums on the Surety Bond and to deliver and pledge ` certain collateral' w the Surety'to secure the Association's obligation to indemnify the Surety for any i s payments the Surety must make under the Surety Bond. The obligations of the Surety under the Surety Bond are ,absolute and irrevocable and are in s l way conditioned upon the continued payment of premiums or the maintenance of any required collateral by the Association, ". 5tx The Surety The requirement to snake payments under the Surety Bond is a general obligation of Fireman's Fund r Insurance Company ("Fireman's Fund") and its wholly owned subsidiary, The American Insuranc: Company. Fireman's Fund was organized in 1£164 as a property casualty insurance company grid is i 3 I incorporated In California. Fireman's Fund is a wholly-dwned subsidiary of and the only material'asset of, Fireman`s Fund/American Express Inez Fireman's Fund/American Express Inc, is a wholly-owned . subsidiary of American > xp'ress Company, Among its principal lines of business are property, casualty, surety,fidelity and inland and ocean marine insurance, On the basis of premium volume, Fireman's Fund is one of the principal property liability insurance companies in the United States; Fireman's Fund's 1982 income was 5244 million on grosi revenues of S3,4 billion; assets at December 31, ( 1982 were 1;6,5 billion; i Further information with respect to the Surety is provided herein n-in Appendix C - Financial 1 !pforroation with Respect to the Surety, Neither the Issuer nor the Underwriters have independently r` y t:,ri ied any of such information nor have they made an independent deter urination of the financial position ; o; the.Surety, or determined whether the Surety is or will be financially capable of fulfilling its obligations under the Surety Bond, There can be no assurance that such information is indicative of the current finan- cial position or future financial performance of the Surety, 1 The Deed of Trust Payment of the principal, premium, if any, and interest due under the Loan Agreement and, on a basis subordinate;thereto, the obligations of the Partnership under the Letter of Credit Agreement will be secured by a first deed of trust lien on and a security interest in the Project, The Issuer will collaterally ' j >+ssign its interest in such lien and security interest, together with the Loan payments they secure, equally and ratably to-the Trustee as security for payment of the Bonds and to the Association as security for the ' obligations of the Issuer under the Letter of Credit Agreement. See Appendix A - '`Summary of Provisions of Documents — The Deed of Trust," f I THE BONDS General The Bonds will bear interest from December 1, 1983, payable semiannually on June 1 and 1 of each year, commencing June 1, 1984) at the rate of 9%p and will mature on D,�icemi:iii 1,' 1995': The : Bonds,Wu6e issued in fully ,registered form'on1y, the denominadoh Of;5,0W or'any integral multiple thereof, The prineipsd and any redemption price of the $gnrls are payable at this principal office of the +' Trustee, Interest'on the Bonds due on any regular interest }payment date will be payable by check or drag I �by the Trustee to the persons in Whose names the Bonds are registered on the regular,record data far such payment, which is the 15th day of the preceding month, except that the Trustee is authorized to jj date' upon notice to the Bondholders' the payment of defaulted interest, i establish a special record da t , �The 'Trustee will serve as transfer agent for the Bonds, Bonds may be transferred or exchanged for a like principal amount of Bonds in other authorized denominations by prewntation at the principal office of ` the Trustee. Bonds to be transferred must be duly endorsed for transfer, or accompanied by aL duly r executed'assignment, by the registered owner or his duly authorized representative;The Trustee will not l ; be required to transfer any Bond during the 15' days immediately preceding the selection of Bonds for redemption or after such Bonds or any portion thereof have been selected for redemption, Redemption Prior to Maturity f The Bonds are subject to redemption as follows: i (1) The Bonds are subject to mandatory redemption, at par plus accrued interest to the, redemption date, as follows: (a) in whole on any date in the event that the Surety directs the Trustee, in writing, to call t the Bonds for redemption, and states that the Association has dishonored in whole or in part any l l draw made by the-Trustee under the Letter of Credit, See "Security for the Bonds The Surety r Bond,'>: t i (b) in part in the event and to the extent that proceeds of the Loan have not been applied to i the acquisition and construction of the Project by the date of its completion, See "The Loan f Agreement --- Revenues and Funds -- Developer Loan Fund" in Appendix A. 4 i I , - - - - s (c) in whole or in'part it!, the,event and to the, extent that the 'Loan is prppald by the Partnership with curtain amounts, received by such Partner ship ay instifioce'proceeds or . condemnation awards, See "The Joan Agreement - Prepayments ',in A'ppond x A. {2) Th'e Bonds are subject'to inundatory redemption within'60 days,after tho occurrence of a Determination ofTaxabilit as defined in Appendix A at a re ,m tion rice et ual to the principal amount thereof plus accrued Taxability to the redemption daft, F p i P (3) The Bonds are subject to redemption in whole on December 1, 1990, or on any date thereafter, at a price equal to the principal amount thereof, plus the premium yet forth in the schedule 1f r below (expressed as a percentage of the principal amount of the Honda so called for redemption), phis `' accrued interest to the redemption date, and mast be so redeemed in the event, of a voluntary prepayment of the Loan see "The Loan A Prepayments" in Appendix A): + { Agree Pre "p Y i k Redemplioa Dues Premipum �+ December 1, 1990 through November 30, 1991 , , . . 3% Member 1, 1991 through November 30, 1992 . . . . ; .; , 2% i ' t December 1, 1992 through November 30, 1993 . . . 1% i 1 Neither the Letter of Credit nor the Surety Bond provides for draws to pay pt,tmkims due in the evert E of such optional redemption,',Such premitnns, if any, are requited to he paid solely to the extent of f money available under the Indenture, ' 9 (4) The Bonds are subject-to redemptionl in whole at par Plus ace,r+3zd interest to the redemption 3' date on any data from an optional prepayment under the Loan Agreement occasioned.by(a)damage or destruction of the Project to_the,extent that i,t catinot, in the reasonable opinion o1 the;Partnership, be restored or rebuilt with available Ainds within, or.norrnal operations will be prevented for it period i of, six months, or(b)'the taking of a1Laf the Project, or the, taking of Aubstantially all of such Project, ; thm'rtgh the'e vise of the power of eminent domain that results or is likely to result, Lithe reasonable . opinion of the hi Partriershi , in such Partnership p bein g prevented from carrying on normal operations for a perioo of at least Nix'months, (c) changes in the cconomic 414ilabilky of mat4+rlstls,'sypplies or other ltemp tWeaaaiy for the efficient operation',of''the Project shall • have 6cCu4ed or auch techrdlogteal of other ehahges shall have occurred which in the Partnership's judgment render the Project'ttnec'ettornic�, ar (d) changes,in federal or.state law or adniinistratNe action which render the ; hoan A meat void or unenforceable or im t#t posaibla'of performance or which,'in the opinion N'the s y Partnership, impose'or will in pose'unreasonable burdens or excessive liabilities on the Partnership ,with respect to such Project, rNotice of redemption mu-I be mailed to the registered owners of Bonds being redeemed not more than 60 nor less than 20 days prior to the date of redemption, Failure to mail such notice or any defect therein l with respctt to any,Bond shall not affect the validity of the redemption of any other Bonds, Additional Bonds itionalBOnds on parity with the Bonds, The Indenture does not authorizc the issuance of add I j I i SOURQFS AND APPLICATIONS OF FUNDS The following tab)e'sets forth the estimated sources and applications of funds with respect to the Bonds, excluslve of accrued in on the Bonds which will 1 ,e deposited into the Interest Account of the Y Debt Service Fund; SOURCES: jr Principal Amount of Bonds . . , . . =8;750,000 ti t APPLICATIONS: i Loan o0roceeds to partnership . , , S8,246,230 Underwriters discount 293o629 E Costs nl' 0iaance . , . . . . . 210,I41. k $8,750,000 i THE PROJECT � The Project to be financed with the Bonds is the acquisition, construction and equipping of a t resid;ntial development, including a 125o.mit residential rental development ands 60-bed intermediate care facility, to be occupied by.persons of low and moderate income as determined by the Issuer, See "The ` i Regulatory Agreeme:it - Rental Requirements" in Appendix A, The Partnership was formed solely to t i acquire, construct and own the Project and does not have al ky operating history or management experience with any other develop'rnei nt, Neither the Issuer nor the Underwriters have undertaken any'feasibility ' study with respect to the Project: Failure by the Partnership to operate the Project in accordance with soui:d business practices could lead to early redemption of the Bonds, , i THE ASSOCIATION �^ r i The Association, Hom,s Savings Bank, F.A. , is.a federal n? savings bank orgated and existing under ti n f the laws of the United States of America, At November 30, 1983, the Association load total assets in excess of $250,000,090 as calculated in accordance with regulatory accounting principles. Certain financial information with respect to tha Association has been provi6ti by the Association for inciusiun'herein and is contained in Apptndix B. Neither the Issuer nor the'Underwriters have independently verified any of such information nor have they made an independent determination bf the financial position of the Association, or determined whether the Association is or will jse financially capable of fulalling its obligations tinder the Letter of Credit. There can be no assurance that Vich information is indicative of''the current financial f j pos4ion or future financial performance of the Association; SUMMARY OF PROVISIONS OF DGCUMRNTS Summaries of provisions of certain documents relating to the Bonds are included herein as Appendix A, s j ENFORCEABILI'T'Y OF REMEDIES The remedies'available to the Trustee and the owners of the Bonds upon an event of default I' rider the Loan Agreement and the Indenture are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing law and judicial decisimis, the remedies provided for under ' the Loan Agreement and the Indenture may not be readily available or may be limited, The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to enforceability of the various legal inotruments by limitations imposed by, among other things, bankruptcy, reorganization, i insolvency or other similar laws affecting the rights of creditors generally, 1 i ! 6 J j + TAX'EXRMPTION s > In the opinion of Bond Counsel, based on existing statutes, regulations, court decisions and rulings, Interest on the,Bonds is not includable In the'federal;grbss income of the owners of the Bonds jand f ,'- consequently is exempt "rn'federal Income taxation), assuming eantiqu;ng compliance, subsequent`to the issuance of the`Bonda, wifti the re urremente ofSecttbns•lt)3 b $ and 103 c bf the lnttrnaAeirettue` F t q O( )• O , Coda 6f 1954, air Amended (the;' Code''), and except'(a) with respect; to any Bond for an}+ period tl6 In whlch'such Band is oWncd by a '`sulistan'tial user" of any facility finariced:Mth the prgc6di of`the Bonds or r ( a "related person" as Such terms are used in Section It) (b)'(1 )`ofthe Code', and (b) in`the event'tltrat the j l i Parthe'r§hi¢ or�;arinther person causes the t1o,000,b04 limitatiori 'ot cApital azpendituceh cohtained in Secti6n•I03(6)(6)(D) of such Crxle to be exceeded, In rendering such opinion;:Bond Counsel will rely upon and assume to be' correct information and representations furnished by and on beha)f o( tkr'e Partnership, Including particularly.a Tax Lettor of Representation, with respect to certain material facts y which are solely'within the knowledge of the Partnership, relating to the use of the proceeds of the Bonds, y P certain characteristics of the facilities to be provided with such proceeds, and previous expenditure's by the Partnership that affect such exemption and certain other matters. The statutes, regulations', rulings and 1 R , court decisions upon which such opinion is based are subject to change, f Receipt or accrual of interest on the Bonds by individuals who are also recipients of certain Social Security and railroad retirement benefits may result in federal income taxation of a portion of such benefits I which would not otherwise be subject to tax. Recipients of such benefits should consult with their tax advisors concerning the federal income tax consequences of investment in the Bonds In their particular circumstances. i LEGAL MATTERS Legal matters incident to the authorization and issuance of the Bonds are subject to the legal opinion i of Fulbright&Jaworski, Houston, 'Texas, Bond Counsel; Certain legal matters will be passed upon for the } Underwriters by Chapman and Cutler, Chicano, Illinois, and for the Partnership by Phillips, White, Davidge, Griffin, ,Shelton, Eames, Wood & Duncan, Denton, Texas, n i t UNDERWRITING The .UnderM ricers, Kidder, Peabody & Co: Incorporated, Stephens Inc, and First Southwest 3{ tom an have jointly and so erall '' reed subject to certain conditions;'to purchase the Bonds at a price Comp an ' J Y Y g s equal to 96:6441% of the principal a4 r,tnnt thereof, plus accrued interest, The Underwriters are committed to purchase all of the Bonds if any of the Bonds are purchased, The$orrds arc offered for sale at the prices or yields stated on the cover page of this CXficial Statement. The initial offering prices or yields set forth on the cover page may be changed, from lime to time, by the Underwriters: The Partnership has agreed to Indemnify the Issuer•and the Underwriters for certain liabilities that arise under this official Statement, i RATING The Bonds have been rated AAA by Standard & Poor's Corporation. Such rating reflects only the view ofsuch organization at the time such rating is given, and the Issuer makes no repasentation as to the appropriateness of such rating An explanation of the signifieanceof such rating may be obtainers only from such organization: The Issuer furnished to the rating agency certain information and materials with respectto the Bonds, Generally, a rating agency bases its ratings on such information and materials and on � investigation, studies and assumptions by the rating agency, 'I here is no assul ance that such rating will x: continue for any given period of time or that it will not be revised downward or withdrawn entirely if, in 0ir judgment of such rating agency, circumstances so warrant. A downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds: 7 s; `` :"hi'�`r ' u„ •. .. _„h, , t. i•Jl�. r, . ,srr , ldr ,1• tr . :.Er' Y .ra.:.. t • •i u r r ,.1 At , A , r 1. N,[ISCELLANIOUS E j Any statements in this Official Staterr(rnt involiving matters of opinion, whether or n t expressly so E trtnted a1e'intended as such and not as repreVnta0lons of fac(. This Official Statement'is not to be construed as a contractor agreement between the Issuer or.the Underwriters and the purchasers or holders of any of I the Borsch t The. nformattonheren concerning the$ttrety acid the Surety Bonds has been stjpplst by the 5u'rety, ' the infprmrtson, here in ,eoncerning the .t►'esCpatEon and the Letter af,t:rcdit has been sN ?plted b)�'tfse Association, and the 'snformatlon herein concerning the Partiwrship'and'the )?r 'Jib ' have'been supplied by ,. the Partnership. The. Issuer makes no rapresentations ao to the accuracy or cAmpleteneA;a pf'such { informatttsn, This Official Statement has been authorized by the Issuer for distribution, r , 'DON ON COUNTY HousIN0 I''INANOP. CORPORATION ti tR A By /g/ 3ERRYJOHN C,RAWFOR>1 ' F I S i l s Ims Prrlitlet �r F { r� t � i y I r r y M1F i • � • 4 'x 11 t � E v . f k . . I 1 ! A* t ; , I Y 1 r E r I ' r r r v � t , r APPENDIX A r k a,- SUMMARY Oip PROVISIONS Olw DOCUMENTS 1 k Following is a summary of selected provisions of the Indenture, the Loan i Agreement, the Regulatory Agreement, and tht Deed of Trust and certain definitions utted in such summaries. Such summaries do not purport to be ' complete, and reference is hereby mAde to the instruments themselves(copies of !' which are un file with the `Trustee) fora full description of their provisions, f it 1 fit? ?,,>; 1 i r �e. a . . ♦ r ni. iv I _.v ...r. .. TABLE OF CONTENTS per, {. Definitions I ,`I A-2 Thelndentwe . . r . ; �4y I t The Loan Agreetnant l . . . . . . . . . . .. A=10 The Regulatory'Agreement ; , , . A=14 Tho Dee4 ot`'l"rust A-16 , �r l 1, d I it pDDp 5 r 5 , 5 � 4 r � v. , r g i { i 1 ' f , a � f 4 A., 3 a { DEFINITIONS "A Business Day"- Earh day or part thereof on which the Association is open to the public for carrying on substantially all of its deposit and loan functions. "Determinalion V Taxaailily'y?, - Any determination, decision, or decree by' the Commissioner of internal Revenue, any District Director of internal Revenue, or aoIy 4ouh 6fcompetent jurladictiots� or an opinion obtained by the Partnership of coo nsel qunhfied in such matt `D and 4ecC ptable to tho Trustee, that the interest payable on the Bonds is includable in the grossincom' ,(as defined in $acti6n'61`of the Code)of an owner of the Bonds (other than an owner who is a '`substantial user" of the Projector "related person" as described in section_103(b) of the Code) as a result of the.occurrence of a Taxable Event, A Determina- ! j ?;c tion of Taxability shall be deemed to have occurred on the first to occur of the following; ! t (a) on that date when the Partnership files any statement, supplemental stateinent, or other tax t schedule, return, or document which discloses that a Taxable Event 'shall have occured; ate when the Partnership, the Issuer, th {b) on that d 'p, a Trustee, or the Association shall be advised by the Commissioner of Internal Revenue or any District Director of Internal Revenue that, based upon'(i) filings of the Partnership, (ii) any review or audit of the partnership, or(iii) any ground whatsoever, a Taxable Event shall have occurred; or (c) on that date when the partnership shall receive notice front the Issuer, the Trustee, the'Asso- ciation, or the owner of any Bond that it or he has been advised: (i) that the Internal Revenue Service has assessed as includable in the gross income(as defined in Section 61 of the Code) of any Bond owner any interest on any Bond held by such Bond owner due to the occurrence of a Taxable Event; or(ii)by' the Commissioner or any District Director of Internal Revenue that the interest on any of the Bonds is includable'in the gross income of any owner of any Bond due to the occurrence of a Taxable Event; "Goveinmenial Obligations" -- Direct 'obligationa of, or obligations the.'timelypayment'of principal of and interest on which are fully and unconditionally guaranteed by, the United States of America, which i are non-callable and which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein, "Prepayments" -T Any prepayments paid by or on behalf of the Partnership, whether optional or mandatory, of the principal of the Partnership's promissory note, including all prepayment premiums and accrued or prrpuid interest thereon paid in connection therewith. { f`Qtwlifred=7'e+►ant".- One or more persons who occupy a Unit and whose aggregate adjusted grass income,i as d:.finedvn the Code, for the most recent tax year ending prior to the date of their initial " 6e,�upancy of the Unit, does not exceed $44,700.or such other amount as may be established from time to time by the Isstter In accordance with the Act as the maximum amount constituting moderate income and, f for any daiendar year in which the Issuer fails to establish the maximum amount:constituting moderate income (or for an)� portion of such calendar year`priov to the time the Issuer establishes such maximum l r; amount), the niat;imum`amount for purposes of this definition will be determined b)-adjusting the last I maximum amount established by the Issuer by the change in the"Consumer Price Index--Housing" for i i Denton County, Texas, "Swely Business Day" - A day on which both the principal office of the Trustee is open for business t and on which the Surer is open at its office on 777 San Mario Drive, Novato, California for the purpose of � y p �° a conducting its business, i f f'Caxable Earn!" — Either of the following; (a) the application of the proceeds of the Bonds in such manner that the Bonds become "arbitrage 1 bonds" within the meaning of section 103(c) of the Code, and with the result that interest on the Bonds is or becomes includable in the gross income (as defined in section 61 of the Code) of one or more owners of the Bonds; or r (b) the application of the proceeds of the Bonds in such manners or the occurrence or non•occur. ' rence of any event (excluding specifically the enactment of any federal legislation after the date of the Uan Agreement), whether'within or without the control of the Partnership, with the result that, ? A•2 • 1 i V under the Code and the regulations promulgated thereunder, the interest on the Bonds is or becomes includable in the gross income (as defined in section 61 of the Code) of an owner of the Bonds (other than an owner who is a substantial itser of the Project or a related person as described in section 103(b) of the Codc). .t "Unit" A unit of accommodation within the Project which may be used on temporary or transient f 1 basis by the occupant or occupants thereof, and which;may or may not contain separate and complete j facilities for living, sleeping, eating, cooking, and sanitation. ' THE INDENTURE i Payment of the Bonds f The Issuer will agree that it will duly and punctually pay or cause to be paid the principal of, i premium, if any, and interest on the Bonds at the place, on the dates, and in the manner provided in the >t Indenture, but solely from the sources described in the Bonds and the Indenture.The payments, revenues, a and receipts assigned for payment of the Bonds, as well as the terms and conditions for payment, are ° Y described in the Official Statement under "The Bonds" and "Security for the Bonds," ! Revenues and Funds M The Indenture establishes a Revenue Fund, a Debt Service Fund, a Costs of Issuance Fund and a General Fund of the Issuer, a Developer Loan Fund of tht partnership, and a Letter of Credit and Surety t Bond Fund of the Bondholders, all to be held in trust by the Trustee, Such funds are to be funded and i E disbursed,as follows: R Developer Loan Fund, On the date of delivery of the Bonds, the'''i�ustee will be required to deposit the balance'of the proceeds of the sale of the,Bonds in the Developer loan Fund after deposits of ' accrued interest:o the Interest A -aunt rf the Debt Service Fund and of estimated costs of issuance of the Bonds to the Costs of Issuance k and Such deposit to the Developer Loan Fund will constitute the disbursal by the Issuer of the Loan, The Trustee is required to disburse funds held for the rsredlt of the Developer Loan t'und at the direction of the Partnership,pursuant to requisitions approved m the Association and submitted in accordanre with the Loan Agreement and the Regulatory Agreement, Upon completion of the Project and paymentof all Project costs; the Partnership Is required to { file with the Trustee a certificate in form required by the Regulatory Agreement, As soon as practi cable, and in any'event within five days; following the receipt of such certificate the Trustee is required I to trap ter any balance remaining in the Developer Loan Fund(other than'arnounts to be retained by the Trustee pursuant to such certificate), including any itnliquivated investments made with moneys E' theretofore deposited it the Developer Loan Fund, to the Redemption Account and to apply such °funds so transferred to the redemption of Bonds, i Cbsts of IsJMWO Fund. Estimated costs of issuance of the Bonds are required to bg deposited m the Coats of.Issuance Fund'simultaneously with'the delivery ol'the Bonds. The Trustee has been authorized, ' upon the receipt of written instructions from the Issuer, to pay from the Costs of Yssuatnce Fund lusts incurred in connection with issuance of the Bonds. Any funds on deposit in the Costs of Issuance Fund on the 180th day following the data of delivery of the Bonds are required to be transferred by the . ; Trustee to the General Fund if the Trustee determines'that such funds are not necessary for the I payment of costs of issuance of the Bonds. >'itaeaue Fund. The Trustee will be required to deposit to the Reven%.te Fund all Loan payments and any other amounts received by the Trustee which are subject to the Nett and pledge of tl�e Indenture, to the extent not required to be deivnsited in other funds and accounts treated under the Indenture. The Trustee will be required to apply all money on deposit in the Revenue Fund, other than amounts representingl'repayment8, not later than the 4th Association Business Day prior to the 2nd Surety Busiaess Da prior to each interest payment date'onthe Bonds, in the order of priority and for the ' yP purposas,as follows; i (1) 140, to the Interest Accr unt, an antount sufficient to pay the interest becoming due and 1. ' payable on thb Bonds on such ddte; r F f ` A.3 1 (2) 'Second, to the Principal Account, an amount sufficien+ to pay the principal of the Bonds with a stated maturity on such date, if any and } (3) Third, to the General Fund, any amounts remaining in the Revenue Fund after the fore- 6 going transfers, Amounts deposited in the Revenue Fund representing Prepayments shall be immediately applied as follows; (1) First, to the Interest.Account, the prepaid interest received with such payment; and ' r (2) Second, to the Redemption Account, the balance of tho Prepayment. ' Debt Service Fund. The Trustee will be required to deposit to tbq Interest Account of the Debt {` Service Fund simultaneously with the delivery of the Bonds an amount equal to accrued interest received upon the sale of the Bonds and, thereafter, will be required to transfer amounts deposited in E the Revenue Fund to the Ltterest Account, the Principal Account, and the Redemption Account of the Debt Service Fund as hereinabove required. Money on�•leposit in the Interest Account,;the Princi- pal Account, and the Redemption Account is required to be set aside by the Trustee or deposited in trust with the Paying Agents in sufficient amount to pay the interest on the Bonds a3 the same becomes due and payable, the principal of the Bonds as the same becomes due and payable at the stated maturity of tho Bonds, and the principal of and premium, if any,on the Bonds as the same becomes due and payable upon mandatory or optional redemption of the Bonds, respectively, General Fund. On the 180th day following the date of delivery of the Bonds,:the 'Trustee w111 be l' required to deposit to the General Fund any money remaining in the Costs of issuant a Fund determined s t " by the'Trustee not to be necessary for the payment of costs of issuance of the Bonds, In addi,ion, the Trustee will be required,to transfer certain amounts deposited in the Revenue Fund to the General Fund as set forth in "Revenues and Funds — 'Revenue Fund" above. The Trustee is required to { apply,money on deposit in the General Fund solely for the following purposes in the following order of priority and in accordance with the following conditions; ► (1)' If, at the openingof business (a) on the 16th`dav ofthe mor,tk next preceding any stated interest payment date on the Bonds, (b) the 15th day prior to any date on which Bonds are due upon call for redemption, and c the declaration of accele:ation of the principal of the Bonds, to deposit P { ) Principal Redemption Account, and available fo such t urrnse, are insufficient omake uch payment,th a Trustee is requh-ed to P Po 4 ; transfer from the General Fund to the Interest Account, Principal`Account, or Redemption r Account, as appropriate, an amount sufficient to remedy such deficiency. i (2) The Trustee, from"time to time, is required to apply-money orideposit in the General Fund to pay or reimburse the Trustee and any PayingAgeht for the cost ofexpenses incurred and I services rendered under the Indentu a if said expenses and services are necessary and reasonable I i ad Are not occasioned by ,the neglect or misconduct of the Trustee or any Paying Agent, ' If (3)' on an y date, the balance of the funds on deposit in the General Fund after giving ; effect to the transfers required under paragraphs (1) and (2) above exceeds 11,26,5,000, the t E- Trustee is required to immediately transfer such funds from the General Fund to the Partnership t to the extent necessary to reduce the balance of funds then on deposit in to General Fund to an amount less than or equal to $1,265,000, l Lefler of Credit and Surety Bond Fund. The Trustee will be required to make claim under the Lette► of Credit if(t) on the open ing of business on the 10th day prior to the date on which the principal ofor `• interest on Bonds Is due at their stated maturity oi' upon declaration of acceleration orcall for redenip- tion, there are Insufficient aggregate funds (which are not legally enjoined, restrained or stayed from 1 I such purpose) in the Debt Servicc Fund, to General Fund, the Revenue Fund, and the Letter of I Credit and Surety'Bond Fund to make such payment or(2) on the elate for such payment the balances (which are not legally enjoined, restrained or stayed from such purpose) of the Debt Service Fund, the General Fund, and the Revenue Fund, when added to the balance of the Letter of Credit and Surety , Bond Fund, arc insufficient to make such payment, The Trustee is required o draw under the Letter . . ' . a } A-4 Of Credit in either such case the amount necessary to cure such insufficienCes and is required to use the proceeds of such claim, togetht.:with money in the aforementioned funds, to make such payments If a petition for relief under the federal Bankruptcy Code(ur any other bankruptcy or similar,act of the United States of America or any state which may now or hereafter be enacted) is filed by or tithe issuer or,the.Partnership or any general partner of the Partnership, as debtor, prior to or i within 123 days'after any payment(other than from amounts drawn under the.Let(er of Credit or paid t under the Suret; Bond,'referred to herein as "Non-Recoverable Arrtounts") by the.'Issuer of the h principal of, premium) if any, 6r interest on any Bond, or(ii) the Trustee fails to receive written ce 'tifr• } Cation of the Partnel`ship'subsequentto the 91•day period commeticing on the stated maWelty.of the i k� Bonds, but prior to the 4th Association By iiness Day prior to the 2nd Surety Business Day prior to the A t expiration of the Surety Bond,to the eff'ec(that no such petition has been filed, the Trustee is required to file in the court in which the case commer,ced by such`a petition rs pending, on behalf of the owner's, of such Boiids, a petition interpleading the debtor in such proceeding, the Association, and the Surety as to i r whether any such payments are recoverable. In the event liability of any Bondholder is established by court order which is unappealable.or from which the'oeriod for appeal has.expired, or the letter of Credit will expire prior to a final determination in any such proceeding,the Trustee will be required to :x draw under the Vetter of Credit(or make clain) under the Surety Bond to the extent of a' dishonor by the Association of such draw under the Letter of Credit) to the exte0required to satisfy such liability(or to establish a reserve against the maximum possible liability) and to pay the amounts received into court for previously Bondholders., the account of such Bondholders or, if reviousl satisfied to reimburse such Bondhol Investments, Service Fund from and including the 4th Association Business' Day priori to tt credit he 2nd Surety Business Day prior to each date on which the principal of, premium, if any, or l interest on Bonds is due and payable, to and Including the;date for such payment, or held for the credit of the [.etter of Credit and Surety Bond Fund, must be continuously invested and reinvested by the Trustee in Governmerital'Obligations maturing not more than 30 days after the date of purchase and,to the extent i such Governmental Obligations so maturing are not reasonably available, such money must be held by the 00 Trustee without'invest.'ment and continuously secured by a perfected security interest in Governmental Obligations or direct and general`obligations of any state, municipality, or political subdivision rated in either of the two higl,ea bond rating categories by Standard & Poor's Corporation. i Money held for the credit of all other funds and accounts created under the Indenture or for the credit I of the Debt Service Fund at any time other than during the period of time described in thc:immediately a g preceding paragraph must be invested in certain securities and obligations as required by the Indenture. ; All income (net of losses) realized from investment of money held for the credit of the Debt S'Orvice Fund, the General Fund, and the Revenue Fu,td shall be transferred by the Trustee to the Revenue Fund. Any profit realized from investments of money hold for the credit of all other funds and accounts created under thelndenture and in accruing thereon shall be credited to the fund or account from which such investments were made, and any loss resulting from such investment shalt be charged to such fund or account. ?t Uafaults and Remedies �. Each of the following constitutes an "event of default" under the Indenture: (1) failure by the Issuer to make due and punctual payment of the principal of, premium, if any, ' or interest on any Bond, whether at the stated maturity thereof or upor;call for redemption or declara Lion of acceleration; or '(2) default in the performance, or breach, of certain covenants or warranties of the Issuer relat- ing to the tax-exempt status of interest on the Bonds and continuance of such default or breach for a °? period of 60 days after there is given, by registered or certified mail, to the Issuer and the Partnership ► by the Trustee, or by the owners of at least 25% in principal amount of the outstanding Bonds With a i copy to the Trustee, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "notice of default under th is indenture; or C r A-5 1 r ( 4 r y tL11 r P h,rt : - 1. f , (3) an "event of a default", as therein oyf the Loan payments as therein permitted, ut only f Agreement and the declaration of acceleration such acceleration could, in accordance with the provisions of the Loan Agreement,have been declare j without the direCtior'or. consent ofved by he Trustee orvthe owners of the ape fled percentage in Loan Agreement is;cured and wat Y therein principal amount ofhhe debt E the Indenture by re onttahereof will b(hde medilikewissto have permuted, then the'default under been'cured acid waived; or' i j , (4) default in tho: payment by the, Surety of any ciai,n made by the Trustee under the Surety Bond within the time'provided for therein; or � 1 b (5), the entry of a decree or order by a court having jurisother a�n iicable federal or set to iawpeor of the Surety under't)re federal Bankruptcy Cade or any Pl' . 'appointing a'custodian, receiver, liquidator, assignee,crties of the Surety or o dering the windy r up or or for th,- Surety, or any substantial part of the p p , liquidation of the affairs of the Surety, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or {fti) the comrrlencement by the sta�e!aw of sim Sae import a or Lee consent or acquiescence Cby the . any other applicable Federal ointment of or taking'pos- i Surer to the commencement of a case under such Code or law or to the app k 1 session by a custodian, receiver, liquidator, assignee, trustee, sequestrator, or other slmlar official of the Surety, or any substantial part of the properties s an b Surety, he Surety in wr t ngn f is inability to pay assignment for the benefit of creditors, or the a Y its debts generally as they become due, or the taking ofcorporate action by the Surety to furtherance of t i any such action. If an "event of default" described in paragraphs {f} and (�) above occurs and is c5notri6r strove in Trustee will be required to, and if an "event of default" described in paragraphs (2), (3), ( ) ( ) occurs and is confinuing,,the Trustee may, and upon written Bane event of default" under paragraph aph�(4) t_ aggregate principal amount of the Bonds then outstand g( ; occurs) will be regurred to, declare the principal of all the Bonds to be due and payable immediately, by notice in writing delivered to the Issuer, the P e si and payable.Association Trustee s ent titled to, pnd upon lip the t declaration such principal will become immediately the written request'of the owners of at lea no such waiver of an event nt of default undetr paragraph(1)arbovve l mount of ' required to waive an event of default, but, i i can occur without the written request of the owners of all Bonds outstanding. Upon the occurrence and continuance of an "evclow, the Trustee under the(l) is required to draw under the ! ' the rights Of he owners Hof the Bonds, as described Wow, cls Letter,of Creditor make claim under the Surety Boring when an a celerattiion of her Loan paymen skto the Letter of Credit and Surety Bond Funds (2) Y i h extent ;permitted under 'the Loan Agreementi and d a ercise its i proceed otherwise ttoeprotect and Agreement and the Deed of Trust and dh in enforce its rights and the rights of the Bondholders by Bale pursuant tojudicial proceeding or by suit, action ; or proceeding in equity or at law or otherwise. l Right-of Subrogation Any payment made by the Surety to the Trustee pursuant to the Surety Bond will be in satisfaction e any unpaid obligation of the Association to the Trustee to honor draws under the Letter of G`redit to the any u of such obligation agent,and the Surety will thhe Trun become subrogated to the rights of the Issuer and the t 'Trustee to such obligation to the extent of such payment on the Surety Bond. .,I II Rights, 1lZe mediee, and Limitations of Bondholders p f default," anti tf requested to do so by the o.vners of not less than U nn the'uccurr,ence of an`,`event o t l aggregate rind al amowit of Bonds then outs r.Jing, and upon bring offered satlsfactory,indem 25% in aggr B P p nity, the Trustee must exercise one or more of the remedies conferred by the Indenture as the Trustee, being advised by counsel, deems most expedient in the interests of the Bondholders, f A6 I E r , L 1"V, I Upon the occurrence and continuance otaii "event of default" under(he-Indenturc, the owners of not less than-a majority in aggregate principal amount of Bonds then outstanding will have the right, at any 0 tlme� by an instrument or iristruments ,in writing executed and delivered.to theTrusice, to direct 'he method and pl ace of c onducting all proceedings to be taken in connection with the en6rcemOit of the terms I I .,­ , I I Ing and'c6fiditiorts of the indet4urq, or for the appointment of a"receivercir 'any s "der,the er�'tulre; c he' T Ind n but4ticir direc"ticin must c6rnp-ly Whfi, (he pmOsions.otlaw and tho'lnclen; tiu� ec, Ifrt rustee he OWI,ers recoives 'confl'i6iinj AtrUctionsfroin t of the Bonds, the'Tru'st�e must fol ow e instruc ns of 5 5o.6f the the ct"�rs4the'groatost principal amount of Bonds if the greatest principal amou at lea' S t Bonds t he n cuts:ta n ding" A aVe it), ti(Utr 11[h a s e No o�yner of any'Rond wi n� right to any suit, action or proceeding in equity oi'at law for the eriforcementof the Indenture or for the execution of any'trust creme d thereunder'or for,the appoint- ment of a receiver or any othee remedy thereunder, unless., (1) an event of default,occurs of which the Trustee is notified or is deeme d to have notice under the In denture; (2) the owners of riot less than 25% in aggregate priiicipal,anio6nt of Bonds'thcn outstanding request the Trustee, in writing, a nd offer itree�on- able opoortuniiy, either to proceed to exercise the powers under the Indenture or to institute such action, suit or proceedinjIn the name or names of such owners, land, concurrently with such request, such Bond- holders offer satisfactory indemnity to,the Truatee; and (3) the Trustee fails or refuses -to exercise the powers under the Indenture, or to institute such acdon, suit :,or proceeding in ,its own name wit I hin a ithout complying with any of the foregoing masonable time, Each owner of a Bond may, however, wi provisions, enforce past due payments with respect to his Bonds. The Trust" Except during the continuance of an "event otclefault" under the Indenture, the Trustee is required to perform o* such duties as are specifically set forth in the Indenture. In case. an "cvcnt 'of default" thereunder has occurred (which has not been cured or,waived) the Trustee will be required to exerche such of the rights And powers vested in it by the Indenture, and use the same degree'of care and skill in their -In the corduct of his own affairs. exercise, as a prudent man would exercisij or use under the circumstances The Trustee is entitled to perform any of its du(,­,A under the Indenture'by or through attorneys, 'able for the conduct of the same in accordancewith acrents, r"eivers or4employees, but will be held account the standa,,,d specified in the immediately preceding paragraph, and 1.4 entitled :to' advice' of, c'ounsel concerniritt all' matters of trust and duties under the Indenture, arid in all cases may pay such reasonable compensation to all sUA attorneys, agents, rcceivers'and cmployees as may reason ahl y be employod in connection,with the trust otthe Indenture, The Trustee is entitled to act upon the opinivn or advice Ofany attorneys approved by the Trustee in the exercise of reasonable care. The Indehture provides that-the Trustee,and art), Paying Agent will be entitled to payment and feim- burnment fiom the Partnership for reasonable lfces for their services rendered ther-2under and aWcounsel �ees and other fees, charges, and expenses reasonably and necessarily made or incurred by the Trustee and an), Paying Agent in connection with such services. In the event any such fees remain unpaid�O days.after invoice to the Partnersh,$'i the'Trustee is allowed to draw for the unpaid amount (but not more than one- half of its annuni fee) ur�der the Letter of Credit and, to the extent such draw is dishonored, may,%nake claim therefor under the Surety Bond, Upon an "event of(lefauli" under the Indenture, tl�e Trustee and any Paying Agent'wiR have a lien on the 8CCUrity pledged under the Indenture with right of payment for the foregoing f�c3, charges, and expense,4 incurred by them, respectively, subordinate, in the case of tees and charp..s (but riot expenses) to the lien secur;ng the Bonds (1) from and including the 4th Association Business Day prior to the 2nd Surety Business Day prior to, to and including, ea(,.h date on which the principal of, proinium, if any, or interest on Bonds is due and payable, (2) as to all sums which are segregated by the Trustee or depo3ited in trust with any o1lice Paylag Agent to pay the principal of, premium, if'any, or interest on any Bonds then due, (3) during the subsistence of such all "event of default," and (4) as to the. amounts held for the credit of the Leiter of Credit and Surety Bond Fond, and otherwise prior to the lien securing thr Bonds, The Trustee inay in good faith buy, sell and own arty of the Bonds and mRyj'oj'n in any action which �A' il any Bondholder ri'lay be entitled to take with like effect as if the Trustee were not a paoj to the' Indenture. 2 The Trustee is protected if it acts upon any notice, 'request, consent', certificate, or(lv.r,, affidavit', letter, telegram or other paper or document believed to be genuine and correct and believed to have been signed A-7 �z V,, r or sent by the proper person or persons, The right of the Trustee to perform any discretionary acts enumerated in the Indenture will not be construed as a ,'luty and the Trustee will not be answerable for fi other than its gross negligence or willful misconduct in the performance of such acts. t The Trustee will not be required i ed to take notice or.be deemed to have notice of any default under he Indenture except for the failure by the Issuer to cause to be made any of the payments to the Trustee r requircil to be made, by the`Tridenture from the suurces'therein described, the failure of the Associatlojp X honor a draw under the Letter of Creatt, the failure of the Surety to satisfy a claim under the SuKe+:y Bond, t or the failure'of the Issuer ,the Partnership, the'Association or tha Surety to file with the Trusteesany i Yt document required by the Indenture, the Loan Agreement or the RegulatoryAgreernent to be so filed by a _ 1 speei►ic dale subsequent to the delivery ot"the Bonds, unless 1 the Trustee shall be specifically notlfietl in writing of such default by the Issuer, the Association, the Surety or the owners of at least 25% in aggregate ' principal amount of Bonds then outstanding, f The Trustee may at any time resign from the truss created under, the Indenture by giving 30 days' ` w er itten notice to the Tssu ,'the'Partnership, the Association, and the Surety, and by registered or certified i ma,i il to each owner of any Bonds then outstanding. The Trustee's resignation will take effect at the end of s i such 30-day period, or upon the earlier appoiritment of a successor Truklce by the Bondholders or by the Issuer, which appointment must be satisfactory to the Partnership, the Association; and the Suretyr 4y The owners of,a majority in aggregate pis;'-^ipal amount of Bonds then outstanding are entitled to remove the Trustee at any time by an instrument or substantially concurrent instruments in writing delivered to the Trustee, the Issuer, the Partnership, the Association, and the Surety. In the event the ?1 Trustee resigns, is removed, dissolves, is in course of dissolution or otherwise becomes incapable of acting under the Indenture, or if theTrustee is taken under the control of any public officer or officers or a receiver �r is appointed by a court, a successor Trustee can be appointed by the owners of a majority in aggregate I` principal amount of Bonds then outstanding, by an instrument or substantially concurrent instruments in writing executed by such owners, but the Issuer may appoint a temporary Trustee satisfactory to the ' Partnership; the Association, and the Surety to fill any vacancy until a successor Trustee is appointed by the Bondholders, Discharge of the Indenture On any date when the'fssucr pays or causes to be paid, or provision for payment is,inade to or for`the owners of all Bonds,the principal of, premium, if any, and interest due or to become due thereon from the sources, at the times, and in manner stipulated therein, and if the Issuer is not then in default in any of i t its other covenants and promises in the Bonds and in the Indenture, and if the,Issuer pays or causes to be paid to the `Trustee and any Paying Agent all sums of money due or to become due according to the provi- sions of the Indenture, then the lien, rights, and interests created thereby will cease, determine, and be void t and the Trustee must thereupon cancel and discharge the lien of the Indenture, and release, assign, and r deliver unto, the Partnership'atiy and all the estate, right, title, and interest in and to any aud:711 rights assigned to the Trustee or otherwise subject to the lien of the Indenture, except moneys or seeurities held by the Trustee for the payment of the principal of, premium, if any, and intereston the Bonds or for reim- t bucement of the Bondholders as described in the next succeeding paragraphs However, the Inde»ture will not cease; determine, or be void and will remain in effect until it is •deter- mined by the Trustee that(1) no petition for relief under the federal Bankruptcy Code is riled by or against the Issuer, the Partnership or a general partner of the Partnership within 123 days after the Issuer pays,or causes to be paid, or provisions for payment are made to or for the owners of all Bonds, the principal of, premium, if any, and interest on the Bonds due or to become due, as described in the preceding paragraph, or_(2) such petition is filed within such 123-day period but thereafter(a) a final order(not subject to appeal) is entered by a court of competent Jurisdiction holding that, after taking into consideration the provisions of i the federal Bankruptcy Code as thon in fore.; and effect, the owners of the Bonds (or the Trustee on their i behalf) rnay retain such final payment thereon, or(b) the Trustee receives funds sufficient to reimburse the i owners of the Bonds for any amounts of principal, premium, and interest they are forced to repay because of the filing of such petition, or (c) all applicable statutes of limitation relating to the federal Bankruptcy Code have expired without any suitor other proceeding to recover such payment under said Bankruptcy r �` Code having theretofore been filed, t A-8 i If moneys or Governmental Obligations are irrevocably deposited with the Trustee and thereafter irrevocably set aside by the Trustee to pay, when due, the principal of and the applicable redemption premium, if an,,,, on the Bonds, piue interest thereon to the due date thereof, no such deposit will be deemed a payment of such Bonds as aforesaid, (1) unless the Trustee receives an opinion of nationally recognized bond counsel to the effect that such use of such deposit will not adversely affect any exemption from federal `s income taxation of the interest on the outstanding Bonds and (2) until the earlier of; (a) proper notice of such redemption of such Bonds has been given in accordance with the Indenture, or in the event said Bonds j are not by their t'c.rms subject to redemption within the next succeeding 60 days, until the Partnership gives irrevocable instructions to the Trustee to notify, as soon as ;practicable, Bondholders that such deposit has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with the Indenture and stating such maturity a, redemption date upon which moneys are to be available for the of the principal or redemption rice if applicable, on said Bonds or (b) the maturity of such payment 1 P I P � PI Bonds. y n Supplemental Indentures Without the consent of the owner of any Bond, the. Issuer and the Trustee may from time to time, '! upon receipt of consent of the Partnership, the Associatiosi, ;md the Surety, enter into one or more supple- ' mental indentures for any of the following purposes; t !s (1) to cure any ambiguity or formal defect or omission in the Indenture; or (2) to grant to or confer upon the 'Trustee for the benefit of the Bondholders any additional :! rights, remedies, powers, or authorities that may lawfully be granted to or conferred upon the Bond- `` holders or the Trustee; or E i (3) to subje.i additional revenues, properties,or collateral to the provisions of the Indenture; or (4) to modify, amend, or supplement the Indenture, or any supplemental indenture, in such manner as to permit the qualification of the Indenture and any supplemental indentures under the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect or to permit the qualifica- lion of the Bonds for sale under the securities laws of any of the states of the United States, and, if the Issuer and the Trustee so determine, to add to the Indenture or any supplemental indenture such d other terms, conditions, and provisions as maybe permitted by said Trust Indenture Act of 1939 or similar federal statute; or (5) to add to the covenants and agreements of the Issuer contained in the Indenture other ti covenants and agreements thereafter to be observed for the protection of the .Bondholders, or to surrender or limit any right, power, or authority in the Indenture reserved w or conferred upon the 3 tq5 Issuer, t With the consent of the owners of not less than 66%Jo in aggregate principal amount of the Bonds then s ag outstanding; the Issuer and the Trustee may from time to time, upon receipt of consent of the Partnership, I ' ;r the Assvetation, and the Surety, enter into one or more supplemental indentures for the purpose of modify- ing, alte.fng, amending, adding to, or rescinding any of the terms or provisions of the Indenture, but the I( 4r3 owners of all Bonds then outstanding must consent to the execution and delivery of any supplemental s indenture which would (1) extend the maturity of the principal of or the payment of interest on any Bond ` issued under the Indenture, or reduce the principal amount or any Bond or the rate of interest or redemp lion premium thereon; (2) grata a privilege or priority of any Bond or Bonds over any o''!her Bond or Bonds; (3) reduce the aggregate pritu .pal amount of the Bongs required for consent to such supplemental inden- t ture; (4) deprive the owner of any Bond then outstanding or tire lion created by the Indenture; (5) change the requirements for the Letter of Credit from those set forth in the Indenture and in the Loan Agreement; s' (6) change the requirements for the Surety Bond from those set forth in the L,denture and in the Loan Agreement; or (7) alter the Partnership's obligation to pay, when due, Loan payments. i A-9 i f '"#N ( I THE LOAN AGREEMENT Construction of the Project The Partnership will agree to acquire, construct, reconstruct, rehabilitate, repair, alter, improve or 'V extend, as the case may be, the Project with due diligence until completion, but in the event there is a delay in acquiring, constructing, reconstructing, rehabilitating, repairing, .altering, improving or extending the Project or the Project is not completed, the Partnership will remain unconditionally obligated to make Loan payments, at hereinafter described. The Partnership will covenant to obtain all necessary licenses or permits for the acquisition, construction, and operation of the Project, The Partnership will further covenant that; (i) substantially till of the Project will at all times consist of(a) land or (b) property which is subject to the allowance for depreciation provided in section 167 of the Code; (2) at least 90% of the sum of (a) the proceeds of the Bonds and (b) earnings from the investment of such proceeds prior to use for the purposes for which the Bonds are being issued will be used to defray costs of acquiring, constructing, equipping, or installing the Project incurred after Muy 9, 1983, and all of the proceeds of the Bonds will be used for purposes permitted by the Act; (3)all expenditures to be paid or reimbursed out of the proceeds of the Bonds, including expenditures for interest payable on the ponds, will be chargeable; to capital or similar accounts of the Partnership for federal income tax purposes, or would be so chargeable either with a proper election by the Partnership or but for a proper election by the Partnership to deduct such amounts; and(4)not more than 10% of the proceeds of the Bonds will be used to provide working caps; it for the Project. Loan to Partnership ` Pursuant to the Loan Agreement, the Issuer will issue the Bonds to provide funds for the. acquisition, i construction, equipping, and furnishing of the Project and will loan the proceeds from the sale of the Bonds to the Partnership by depositing such proceeds (after deposits to the Cost of issuance Fund and the Interest Account required by the Indenture) in the Developer Loan Fund, All amountsheld for the credit of the Developer Loan Fund will be invested as provided in the Indenture. The Loan will be in the same initial stated amount as (he principal amount of the Bonds and will bear Interest on the unpaid principal suer from the date of issuance of the Bonds at the per annum rate {including intereat;an overdue payments of principal, premium, if any, and, to the extent that payment of l }uch interest is legally enforceable,on overdue interest} borne by the Bonds The Partnership's obligation ' to make Loan payments in connet Lion with Bonds will be evidenced by the Partnership's;creation and t issuance of its promissory note, dated the date of issuance of the Bonds and payable to the order of the Issuer'.As security For repayment of such Note and performance of the Partnership's obligations under'the Loan Agreement,the Partnership will pledge, set over, assign, and grant a security interest to the Issuer in all funds at any time deposited in the Developer Loan Fund. The Partnership will authorize and direct the Trustee to hold'such funds as bailee and custodian for the Partnership in accordance with the provisions of the"Texas Business & Commerce Code, as amended, and to invest and disburse such funds in accordance with the Indenture and the Loan Agreement. Payment of Loin Payments In consideration of tite Loan to the Partnership of the proceeds of the Bonds and of the covenants and agreements act forth in tire Loan Agreement, the Partnership will agree to pay Loan payments to the Association, as the Collection and servicing agent of the Trustee, for the account of the Issuer. The - Association is required to transfer each Loan payment to the Trustee, for the account of the Issuer, within 15 days of receiving each such Loan payment, for doposit by the Trustee to the Revenue Fund. On the date any Bonds are defeased or redeemed pursuant to the Indenture, the principal amount owing on the Note and the Loan evidenced thereby will be reduced by the principal amount of any such a' Bonds so defeased or redeemed. All such reductions tit the principal sum of the Loan will be applied to installments of such principal in inverse order of maturity, The Loan to the Partnership will mature as to principal pursuant to a schedule of equal monthly payments of principal and interest on a 30-year amortization schedule commencing November 1, 1985; and, consequently, investment earnings on principal payments would be required to produce sufficient f.Inds to pay In full the interest on the Bonds during the later years in their term. The Partnership has there fore agreed in the Loan Agreement that, if on the 16th day of the month next preceding any stated interest payment date, on the Bonds, or on the 15th day preceding any other payment date on the Bonds, after i A-10 giving effect to the transfers required pursuant to paragraph (1) under. "THE INDENTURE — the General Fund", the balance of the accounts of the Debt Scrvice Fund available for pa.yrnent of the principal of, premium, if any, and interest on the Bonds due on such payment date is insufficient for any reason to pay in full such amount so due, the Partnership will pay to the Trustee upon 24 hours notice, in immedi- ately available funds, the amount required to cure such insufficiency, in addition to and without credit against the amounts clue under the Note (except to the extent of amounts then owing thereunder by the stated terns thereof), as additional Loan payments on the Loan, The Loan payments to be made by the Partnership, the promissory note delivered by the Partnership to the Issuer, and certain rights oi' the ;issuer unctsr the Loan Agreement will be pledged and collaterally i}, assigned by the Issuer to the `T'ru,itee pursuant to the Indenture. it Prepayment of Loan Paymetrr 1, The Partnership will be required to prepay the Loan (1) in a principal amount equal to the greatest l multiple of$5,000 which will not , xrccd, and upon the receipt of, any casualty insurance or condemnation awards received as a result Or A martial or total destruction or condemnation of the Project,unless the Partnership (with the consent of 1ha :Association) elects in writing delivered to the Trustee to apply such receipts to the repair, rescoratiln, or replacement of the Project, and (2) in full on the earliest practicable date, and in all events within 30`d• yi','following a Determination of Taxability, The Partnership may pretiay the Loan, at its option, as a whole oil any date on or after (and in no event prior to) November 1, 090, not less than 100 days after payment of the prepayment premiums (expressed as percentages Qf it principal suzn so to be prepaid) specified below if prepaid during the 12-month period beginning flovetnber'1, Year Percentage 1990. , , , . . , 3 �� I991•, . . . 2 ,� i 1992 . . 1 r ti The Partnership may prepay tine Loar,, at its option, in full on any date not more than 180 days after the occurrence of an event het':inafter described, if (.1) the Project or any portion thereof is damaged of `f ( destroyed to the extent that, in the re fsonable jut lgme,r I o£the Partnership, the repair of the Prs jeer of such` x I portion cannot b+: restored or rebuilt with avarlf46,e funds within, or normal operations will te'prevonted for a period of, six months, or(a) title,to the Proii ct or §ubstantially all of the Projert is taken oP condemned or,an the authority forrapublic use or sir ose to such an extent that the Partnership I§prevented 1 y competent , f six months o amnrer tor� :�v would r''es tin e eronomicf availability of materials, tli judgment I , Y Y 8 1j } operations for a'period o r , (''') g supplies, or other items necessary for the efficient operation of the Project nccir or such technological or other changes occur which, in the Partnerships reasonable judgment, render the Project uneconomic, or a (4) changes in federal or state law or administrative action render the Loan Agreement void or f i unenforceable or Impossible of performance or which, in the opinion of the Partnership, impose or will a s impose unreasonable burdens or excessive liabilities on the Partnership with respect to the Project, lEach such prepayment of ttte Loan must be accompanied by unpaid interest on the principal sure so prepaid accrued and to accrue to the 30th day following such prepayt,ient. The Association will be authorized to receive all such prepayments of Loan payments, whether i mandatory or optional, as collection agent of the Trustee. The Association will be required to transfer all ? such prepayments to the Trustee for the account of the Issuer, All such prepayments must be applied to i redeem the Bonds, as described in the Official Statement under "THE BONDS -- Redemption Prior to Maturity." The Loan Agreement provides that the obligations of the Partnership to pay Loan paymentsr ee make the other payments pursuant to the Loan Agreement, and to perform and observe the other agreements t and covenants on its part contained therein are absolute and unconditional and are not subject to any diminution, abatcment, set-off, or counter-claim Until such time as the principal of, premium, if any, and A-II 1t Y, i interest on the Bonds has been fully paid or provision for the payment thcreol'has been made in accordance ' with the Indenture, the,Partnership (1) will not be allowed to suspend or discontinue paynient of Loan payments or any other payments pursuant to the Loan Agteemrrtt, (2) will be required,to perform and i S; observe all of its covenants, conditions, and agreements contained in the Loan Agreement, and (3), except t. as otherwise allowed under the Loan Agreement, will not be allowed to terminate the Loan Agreement for ! any cause. i i �t Right of Subrogation Any payment made by the Association to the 'Trustee pursuant to the Letter of Credit will be in satisfaction of the obligation of the Partnership to the Issuer and the Trustee to pay past due Loan payments to the extent of such payment, and the Association will thereupon become subrogated to the t l r rights of the Issuer and the Trustee to such past clue Loan payments to the extent of such payment under r the Leiter of Credit. r d Assignment The Partnership may assign its interest in the Loan Agreement but any such assignment will not relieve the Partnership from primary responsibility and liability for all of its obligations under the Loan Agreement, including, particularly, the making of the Loup payments when due. .a ( Certain Tax Covenants ' k The Partnership will represent and warrant in the Loan Agreement that it,h<<s not taken and will covenant and agree,(hat it will not take any action or omit to take any action which vlould cause interest on the Bonds to become includable in the gross income (as defined in the Code) of the owners of the Bonds f (other than an own, t ho is a "substantial user" of the Project or "related person" as described in the Code), The Partnership and the Issuer will covenant in the Loan Agreement that they will not take any action, nor will the Partnership approve the Trustee's taking any action or making any investment or use of �' the proceeds of the Bonds, which would cause the Bonds to be "arbitrage bonds" in (he hands of any owner (hereof within the meaning of the Code, . Defaults and Remedies t Each of the following constitutes an "event of default" under the Loan Agreement; j (1) default by the Partnership in the payment of Loan payments when and to the extent due and ! t continuance of such default for a period of rive (5) clays after there is given, by registered or certified I r mail, simultaneously to the Partnership, the Association, and the Surety by the Issuer or the Trustee j or to the Partnership, the Issuer, the Trustee, and the Surety by the Association, written notice t specifying such default and requiring it to be remedied and stating that such notice is a "notice or default" thereunder; or (2) faibrs•e by the Partnership to observe or perform any covenant, condition, or agreement on its � part to be observed or performed under the Loan Agreement, the Regulatory Agreement, or the Deed of Trust, other than as referred to in paragraph' (1) above, or failure to remedy any material misrepresentation or comply with any warranty made in the Loan Agreement, the Regulatory t j Agreement, or the Deed of Trust, for a period of 15 days after there is given, by registered or certified G mail, simultaneously to the Partnership, the Association, and the Surety by the Trustee or the Issuer ' t or to the Partnership, the Issuer, the Trustee, and the Surety by the Association, written notice f specifying such failure and requiring that it be rernedied, and stating i hat such notice is a "notice of default" thereunder, but i f the failure stated in such notice cannot be corrected within the applicable f period but can be corrected, and the Association agrees in writing to tin extension of such period, then it will not constitute an "event of default"thereunder until the expir,ulnm of such period if corrective action is instituted by the Partnership or the Association within the a; pijeable period and is diligently pursued until such default is cefrrec'ed; or i (3) the dissolution or liquidation of the Partnership at- the filin,y by the Partnership or a general i t partner of the Partnership of n voluntary petition for relief, the entry of mi order or decree for relief in A- 12 r a - - .. an involuntary case, or the entry of an order or decree for dissolution, liquidation, or winding up of the affairs of the Partnership under any applicable bankruptcy, insolvency, or ,similar law now or hereafter in effect, and such order or decree remains unstayed and in effect ibr a period of 45 consecutive days, or the Partnership consents to or a competent court decrees or orders the E appointment of and taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar official of the Partnership, of any substantial part of its property or the Project, or the Partnership makes any general assignment for the benefit of creditors or fails generally ' to pay its debts as they become due or takes any partnership action in furtherance of any of the i foregoing (and, for such purpose, the term"dissolution or liquidation" shall not be construed to include the cessation of the partnership existence of the Partnership or thq combination of the Partnership into or with a corporation or a dissolution or liquidation of the Partnership following the transfer of all or substantially all of its assets as an entirety, as permitted under the Lo.:tn Agreement; or Sr. v (4) an "event of default" described in paragraph (1), (2) or (4) trotter the section of this Appendix entitled "THE INDENTURE, -- Defaults and Remedies" and the expiration' of the applicable period of grace, if any, but if any such "event of default" under the Indenture is cured and waived by the persons specified therein, as therein permitted, then the default udder the Loan Agree- ' ment by reason thereof shall be deemed likewise to have been cured and waived, P The Trustee will not be required to take notice of any "event of default" under't lie Loan Agreement except to the extent it would have or be deemed to have notice of an "event of;default" under the Indenture. Upon the occurrence and continuance of an "event of default" under the Loan Agreement, then and in every such case the Issuer (or the Trustee acting on behalf of the Issuer in accordance with the s Indenture) will be entitled to, with the written consent of the Association (except in the case of certain AV defaults relating to the tax-exempt status of the Bonds, arbitrage covenants, and indemnification), and upon receipt of the written direction of the Association will be required to, declare the principal of the Partnership's promissory note to be due and payable immediately, by a notice in writing to the Partner- ship, the Issuer, and the Surety, and upon any such declaration such principal will become immediately due and payable. At any time after any such declaration of acceleration has been made, but before any sale of any t property pledged to secure the Partnership's promissory note or any judgment or decree lbr enforcement thereof is obtained by the Trustee, the person declaring such acceleration will be entitled to, with the written consent of the Association, by written notice to the Issuer,the Partnership,and the Surety, rescind and annul such declaration and its consequences if, (1) a sum sufficient to pay all sums paid or advanced by the Issuer or the Trustee under the Loan Agreement and the reasonable compensation, expenses, disbursements, or advances of the Trustee, the Issuer, and its agents and counsel is deposited with the Trustee; s, (2) all "events of def Cult" are cured or waived in accordance with the Loan Agreement; °t ' (3) any deciaration of acceleration of payment of the principal of the Bonds is annulled and t rescinded as permitted in the Indenture; and Q (4) no notice of mandatory redemption of Bonds is given, I S`k All rights and remedies of the Trustee under the Loan Agreement are subject to the control of the ?R Bondholders to the same extent as described in this Appendix under "THE INDENTURE Rights, ` Remedies, and Limitations of Bondholders." The Trustee is entitled, on behalf of the Issuer, with the l written consent of the Association, to waive any past default under the Loan Agreement and its ' consequences upon the same conditions upon which a declaration of acceleration may be rescinded and I annulled. Upon any such waiver, such default will cease to exist, and any "event of default" arising �,. l Ni therefrom will be deemed to be cured, for every purpose of the Loan Agreement;but no such waiver will I txtend to any subsequent or other default or impair any right consequent thereon, A-13 t i i A,mendmcnts to Loan Agreement The Loan Agreement provides that it maf not be amended except in accordance with the procedures set forth in the Indenture for supplemental indentures; however, the Goan Agreement Further provides such eby if such x it may not be amended, without the consent of the owner of each outstanding Bond affected ther E amendment would: �s (t) alter the obligation of the Partnership to pay Loan payments when dale, ; h (2) change or affect certain provisions of the Loan Agreement relating to the Letter of Credit, the ` y payment prepayment P' Y P Y expenses of the Surer Bond a ment and of Loan a menu a merit of the fees and Trustee and Paying Agent, the existence of the Partnership, assignment by the Partnership of the a Loan Agreement, the tax-exempt status of the Bonds, 'payment of taxes, and indemnification, (3) terminate or cancel the Loan Agreement, or (4) decrease the minimum percentage of the principal amount of the Bonds the owners of which '? must consent to any such amendment, THE REGULA'T'ORY AGREEMENT Rental Requirements The Project will be required lobe operated and leased by the Partnership and its successors and assigns in such a manner that the interest on the Bonds will continue to be exempt from federal income taxation under the Code, The Partnership will covenant and warrant that the Project will be owned, managed, and operated by or on behalf of the Partnership as a "residential development," as defined in r� the Act,, so long as any of the Bonds remain outstanding, and, without limiting the generality of the foregoing, the Partnership will further covenant and warrant that; fi cant and available for � (1) not less than 90% of the Units within the Project will be occupied, or va occupancy, by Qualified Tenants; ' (2) no Unit within the Project will contain separate and complete facilities for eating and cooking, but Units may contain kitchenettes, which kitchenettes are required to be limited to the �'I+ F i following appointments- sinks; small bar-sized refrigerators; cabinet space; and hot .plates with burners; ' (3) at least 10% of the Units within the Project will not contain any kitchen facilities; (4) the Partnership will in, by not later than the date of initial occupancy of any Unit or the h date of execution of a lease for any Unit, whichever is earlier, in compliance with the provisions of k paragraph (1) above, an income certification'in the form required by the Regulatory Agreement; and ! P (5) the Partnership will file with the Association (a) a copy of each income certification obtained by the Partnership, together with a written certification by the Partnership identifying each Unit for which an income certification has been obtained, and (b) by not later than the 15th day of the month iH next succeeding the date of delivery of the Bonds and on each anniversary of such date thereafter, a written certificate executed by the Partnership separately staging the number of and identifying the t; Units within the Project which, as of the first day of the month in which such certificate is filed, comply with the provisions of paragraph(1) above and the percentage of the total number of Units within the fl Project occupied or available for occupancy by Qualified Tenants. Such written certificates must additionally be filed with the Association by not later than the 15th day of each month during which a change in the percentage of the total number of Units within the Project occupied or available for } occupancy by Qualified Tenants has occurred subsequent to the last such written certificate filed with t the Association, tr ul By executing and delivering the Regulatory Agreement, the Partnership automatically imposes, agrees to, and declares the imposition of the restrictions set forth in paragraphs (1), (2), (3), (4), and (5) above as covenants binding upon the Partnership, its successors and assigns, until such time as such restrictions expire under their own terms or the Trustee consents in writing to tale release of such A-14 restrictions, The Trustee will not be permitted to consent to any such release, partial or entire, unless, in the opinion or bond counsel, delivered to the Trustee and the Issuer, the restrictions to he released need n.> longer be complied with in order to maintain any exemption from federal income taxation of interest on the s Bonds, ! Duties of the Association The Association is required to oversee the Project, on behalf of the Issuer, in order to assure compli- ance with the provisions of the Regulatory Agreement, and, without limitation, must (1) review the plans and specifications for the Project; (2) review all reports with respect to the Project delivered to the Assoeia- tioti; (3) review all income certifications delivered to the Association; and(4) rile semiannually (or upon the - discovery of a default by the Partnership the with the Issuer, the ' rustee, tltc Partnership, and the Surety, a report setting forth its actions and examinations pursuant to the Regulatory Agreement and the )f s results of such actions and examinations, Defaults and Remedies r "Event of default" under the Regulatory Agreement ineans either of the following; ' ,.;t { } y t warranty of the Partnership in the i° 1 default in the performance, or breach, of an covenant or war Regulatory Agreement and continuance of such default or breach fcs a period of 15 days alter there is given, by registered or certified mail, simultaneously to the'PalttSership, the Association, and the X. Surety by the Trustee or the Issuer or to the Partnership, the Issuer, the'rrustee,and the Surety by the ( l' Association a written notice specifying such default or bteach and requiring it to be remedied and t t stating that such notice is a "notice of default" thereunder, but if the fallure'stated irk said notice cannot be corrected within the applicable period but can be corrected, and if the Issuer and the Trustee agree in Writing to an extension of such period prior to its expiration (which agreement shall I until the expiration of not be unreasonably Withheld), then it will not constitute an '`event of default" i ', such period if corrective action is instituted by the Partnership or the Association, on behalf of the 9 Partnership,within the applicable period and diligently pursued until such default is corrected; or I y (2) an "event of default" described in paragraph (3) of the section in this Appendix entitled � "THE LOAN AGREEMENT — Defaults and Remedies", s If an "event of default" under the Regulatory Agreement occurs and is continuing, the Issuer (or the f Trustee on behalf of the Issuer) will have available to it the same rights and remedies as provided under the Loan Agreement in the event of an "event of default" thereunder, r F } l { P { F i i 3 i 1 A 15 k1 �t 1 i f c THE DEED OF TRUST 4 .' l Deed of Trust ?Lien and Security Interest I provisions Fans of the Deed of first,the Partnership will convey a deed of trust lien on and. Pursuant to the rovist ¢ a security interest in the Project for the benefit of, first, the Issuer as security for its obligations under the Loan Agreement, iiycluding its obligation to make Loan payments hereunder, and, second, the Associa lion as security for the obligations of n the f such Loan payments and he Trusteetis Agreement in the event the thereby required to draw, Partnership default's in the payment P Y under the titter of Credit, The Issuer will collaterally assign its right, title, and interest in and to the Decd of Trust to the 'Trustee and the Association to secure, equally and ratably, its obligations under he Indenture and the Reimbursement Agreement. Foreclosure of In the event an "event of default" occurs and !s continuing under the hereb Agreement, and he selling f d the Trust provides for foreclosure of the lien and security interest created t Y a J nsistent with applicable laws of the State of premises or any part thereof by the deed of trust truste.c, co a Of i Texas. Defeasance Upon tlayment of all indebtedness under the Loan Agreement, the Reimbursement Agreement, and he Indenctire, the satisfaction of all promises under such documents, and if the Partnership has kept, performed, and observed its covenants and promises in the Loan`Agreement and the Deed of Trust, the lien and security interest conveyed coed pursuant to the Deed of Trust will terminate and the trust estate created under the Deed of Trust . nv revert to the Partnership, and the Partnership will be released from the . covenants,agretrnents, and obligations of the Partnership contained in the Deed of Trust, s, 1. - P - A-16 APPENDIX B r i 4 N t rt FINANCIAL. INFORMATION WITH RESPECT TO THE ASSOCIATION The following financial information has been provided,by Home Savings f! Bank, F,A. for inclusion herein. Neither the Issuer, the Underwriters nor any of their counsel have independently verified any of suci, information nor have they made an independent determination of the financial position of the Association, t# There can be no assurance that the following information is indicative of the �. current finail�ial position or future financial performance of the Association, • r k t I I 4 i" P HOME SAVINGS BANK, F,A (LAWTON, 'OKLAHOMA) A, CONDENSED CONSOLIDATED} STATEMENT OF CONDITION ' 11 mono!rp�rtod 12.nwnthrtod Y Oi 400 I November 90, December 31, ► i;', 1983(1) 1942 r i S, Aaactat Cash and Investments . , . E r . . . . $ 18,481,938 $ 20,554,523 j I' Loans Receivable. . . , . , . . , 213 983 376 • ' " . � . . , 176,098996 Goodwill and OtherIntangiltles , , , , , . . . . •0- -0_ j Deferred Losses . ,0_ -0- i r ' Other Assets . , . . . . . . . . . . . lfi,127,027 111084,884 c t . Stock in Federal Home Loan Bank. 2,178,000 2,178,000 y 'Total . . , . , $250,770,341 $209,916,403 3 4. Liabilities and Net Worth: Deposits . . . . . . . . . . . . , . $206,548,855 $148,786,008 Advances From Federal Home Loan Bank . . . 28,14000 43,180,000 i Other Borrowings 2,957,585 61522,005 Other Liabilities and Defrrred Credits. , . , 3,566,438 2,991,043 Regulatory Net Worth . . , , 9,557,463 8,437;347 Total $250,7701341 09 916 (1) Unaudited j it ( i i f i i i 'l�. t HOME SAVINGS BANK, F.A. (LAWTON, OKLAHOMA) CONDENSED CONSOLIDATED STATEMENT OF CONDITION I l month period 12 month ptrlod M of as o November 30, J943(1) December 31, 1987 Earnings Data: Interest Loans $22,922,822 $21,006,546 ' Interest on Investments . 2,264,077 1,476,271 Loan Origination and Commitment Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 2,094,051 10762,241 Other Income . ; , . . . . . , , . . r . 1,205,363 1,605,998 Total Income , _ $ , , � . . . . . . . . , ;28,486,313 ;25,854,516 Interest Expense . . . 22,010,920 24,908,423 Other Expense . . . . , r . . . , . . . 4,662,598 � _ 3,565,621 { Total Expense . . . ... . . . . . . . . . . . . $26,6730518 5214741044 Income Before Taxes (includes extra•• ordinary items) . . . . . . . . . . . . . . . . . . 1,812,795 1,376,472 Income Tax Expense . . . . . . 692,679 323;697 Nei Incomt(Loss) , . . . . , , 6 1,120,116 S 1,052,775 (1) Unaudited $ Fy t.; I 1 i gA %t. k ! r L f f i r t APPENDIX C ► `k i r r FINANCIAL INFORMATION WITH RESPECT TO THE SURETY The following financial information has been provided by the Surety for i inclusion herein, Neither the Issuer, the Underwrites nor any of their counsels have independently verified any of such information nor have they made an I independent determination verion of the financial position of the Surety. There can be tiorris indicative of the current no assurance that the following informa financial , position or future financial performance of the Surety. The included financial information of Fireman's Fund/American Express Inc. has been represented by officials of Fireman's Fund as reflecting the finan cial condition of the Surety as of the applicable dates and periods, Fireman's Fund is a wholly-owned subsidiary and the only material asset of Fireman's Fund/American Express Inc. 4 l: i. i j f fs � . t ,,..✓:r.n� H :':i..Pt, .. .: ..,. eti u..1+ d'1. ..+ rtv - 1 1 . 70UH2 ARTHUR YOUNG d COVDAhv } 1 POST STREET i SAN FRANCISCO, CALIFOANIA 94104 : NP )i The Board of Directors " � Fireman'u Fund/American Expreos Inc. rzti We have examined, the accompanying consolidated balance sheet of Fireman's Fund/Arrtsrican fit' Express Inc. at December 31, 1982 and 1981 , and the consolidate d statements of income, hareholder's equity and changes in financial position for each of the three years in the period ended December 3)', 1982. :4 Our exansinations were made in accordance with generally accepted auditing standards and, accordingly, included such rusts of the accounting records and such other auditing procedures as we considered " t necessary in the circumstances,' ". }t In our opinion, the statements mentioned above present fairly the consolidated financial position of iircman's Fund/American Express Inc, at December 31 , 1982 and 1981 , and the consolidated results of €} operations and changes in consolidated financial position for each of the three years in the period ended December 31, 1982, inconformity with generally accepted accounting principles applied osx a consistent basis, t ) , �%, s t February 4, 1983 ' 1 I i c ii ka C'-1 l 7 T , 4 'I ^ 3 i I .' FIREMAN'S FUND/AMERICAN EXPRESS INC i CONSOLIDATED BALANCE SHEET December 31, 1982 and 08I ' l (Dollars in millions) 1982 198[ 198: 1981 ' � ASSET'S LIABILITIES AND Cash . , , , . . . . . . . . . . , , . , . $ 21 $ 10 SHAREHOLDER'S EQUITY Time deI)osits , , . . , . . . . . . . • , 86 215 + �+ lnvestmant securities - at cost Reserves for: U.S..l:overnment obligations too 150 Property liability losses and loss expenses , , . , . . , $2,808 $2,749 Unearned premiums 1 139 1067 U,S, Government agencies' obligations , , , . 42 122 > State and municipal obligations , . . , , , , , , , , 3,287 2,657 Life And`disabiiit7 policies 376 294 Other bonds and obligations , , • , , 425 491 Accounts payable , , , , , 161 133 Deferred income h axes 222 ! 22 Total (market; 1982 — $3,227; 407 -433 1 1981 = $21194) . , , , , , , �, �, 3,854 liabilities . . , ,854 3,420 �• Investment securities a t market. Total liabilities 5,113 4,888 t Preferred stocks. . , , , , 61 57 Shareholder's equity; I Common stocks. . . . , , , , , , . , , , , , 238 594 Common stock --- authorized and issued Total (cost; 1982 — $233; 1981 — $505) , . , , 294 6,51 1,000 shares at $1 par value (200,000 Loans and discounts , , , , , , , , , , . , 106 94 shares Class A and 5,000 shares of Class B, Accounts receivable and accrued interest, less both at$15 par value in 1981) and j reserves(1982-- $7; 1981 - $6) , , , , . 1 ,099 984 capital surplus., 263 -252 j 1Land, buildings w; d equipment-at cost, less accumu- Net unrcidized securities gains • , . . , , 54 112 E lated depreciation(1982—$65; 1981-$50) , 230 153 Foreign currency translation adjustment (3) (1) Prepaid policy acquisition expenses. , , , . . 359 298, Retained earnings ],086 936 Other assets . , . , , . , _ 464 352 Total shareholder's equity 1,400 1299 r i6,513 $6,137 $6,,513 See accompanying notes, 1 1 1 Ens �� - �' Wnter,Y V.war.-..-.,..�rw.M.1kA424`X'd1"d�"fitlt�tiai-tii'yi�YitFiK` �k1R�`s'M �uUifdH.:r.`,Yaau�s+fiertitnt .,• � • kI i I dO iE FIREMAN'S FUND/AMERICAN EXPRESS INC, CONSOLIDATED STATEMENT OF INCOME Years ended December 31, 1982, 1981 and 1980 (Dollars in millions) 1482 1981 1990 Revenues; -- -- - ; ! Property — liability and life insurance premiums , ' , , ' , , , , , $2,932 $2,730 $2,589 Interest . , . , , , . . . . 333 294 249 a; Dividends and other, . . . . . , . . . . . . . . . . . . . . . 91 _ 80 _ 76 , Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,356 3,104 2,914 Expenses; Provision for losses , , , , . , , , , • , , . . . . . 1;733 1;593 11545 Commissions and brokerage r ' , , , ' , ' ' , 409 396 403 � " Salaries and"employee benefits 387 341 311 { 4 , Claims adjustment services , , . , . , . , , . . 145 103 78 I Taxes other than income taxes , , , , , , , 93 85 87 k Occupancy and equipment . . . . . . . . . . . . . . . . . 106 84 63 i e Advertising and promotion , 15 14 11 - Other . . . . . . . . . . . . . . . . . . . . . . . . 248 238 201 Y Total 31136 2,854 _2,699 , 'pretaxincomc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 -250 215 k 1 Income'tax provision(benelit) . . . (24) 19 _ 5 G` 1 Net income , . . . . . . . . . . . . . . . . . . . . . . . 44 $ 2 $ 231 $ 210 Set.. accompanying notes, i f Y C-3 1 , ( FIREMAN'$ FUND/AMERICAN EXPRESS INC, yi i ,CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY ~ f Three years ended December 31, 1982 �= (I ollars in millions) I =� common S stock Net ttorctga and unrealised currency capital security translation Retained surTius _ gains adjustment earnin;s Total ` Balances at December,31, 1979 . . . . . . . . . . $259 ;128 u — S 654 $1 ,041 ' Net income . . . . 210 210 Increase in net unrealized gains on securities carried at market , . • . . . . 93 93 Adjustment of capital contribution . . . . . . . (7) (7) — 4; s Cash dividends . . . . . . . . • . . _ (75) (75) December 3l, 1984 • . . • 252 228 _' 1,2 Ms 789 69 Balances at Dec 231 231 ` Net income . . Decrease in net unrealized gains on #` securities carried at market . , . (116) (116) 1; Cashdividends (84) (84) f< Foreign currency translation adjustment : Balance at December 31, 1981 , , . . 252 112 (1) 936 1,299 Net income, ' ; . . , . 244 244 Decrease in net unrealized gains on (58) (58) securities carried at marks! . tea Cash dividends and dividends in kind (94) (94) t Capital contribution 11 i 1 ik foreign currency translation adjustment r 2) �� (2) t`+ Balance at December 31, 1982 • . . . . . $263 $ 5'1 _ ;1,086 #1,400 ` See accompanying notes, f )5 r; l C•4 t� .. z, I V FIREMAN'S )FUND/AMERICAN EXPRESS-INC. CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION Years ended December 31, 1982, 1981; and 1980 e (Dollars in millions) 1 1992 1981 1980 { Financial resources provided by: . Net income Increase in: $244 S 231 $210 Reserve for property — liability losses and loss expenses, and life and disability policies 141 195 257 it A ` Reserve foz unearned premiums . • . . . . • . . Depreciation,`deferred income taxes and other itelats . , , , i 64 g9 16 Accounts payable and other items 2 88 95 f Decrease(increase)in cash and time deposits . . . , *' . . . . . , • . • . , . , 118 (153) 3 $641 $ 451 $615 r Financial resources used for; r; Increase (decrease) in; Investment serurities . . . 7 Accounts receivable , , x(105) $ It 393 , . , . , 115 183 92 Prepaid policy acquisition expenses, and loans and discounts • . . , , . . . 73 39 42 t i Other assets . . . • . , 112 29 115 k Net decrease increase to unrealized security gains . . , , , , . • . (increase) Y 6 62 161 (139) t Purchases of land, buildings and equipment . . . . , , ; 90 60 37 1 Cash dividends - , i $641 S 451 $615 i See accompanying notes, t i . 1 f j F 4 i \11j E C•5' s ,, FIREMAN'S FUND/AMERICAN EXPRESS INC. NOTES TO CONSOLIDATED FINANCIAL. STATEMENTS 1, Summary of significant accounting policies Organization and principles of consolidation , Fireman's Fund/American Express Inc. (Fireman's Fund), a wholly-owned subsidiary of American • ' Express Company, was formed through the issuance of 1 ,000 shares of common stock to acquire Fireman's Fund Insurance Company,The consolidated financial statements include the accounts of Fireman's Fund and its subsidiaries,: which are substantially wholly owned. Unless the context otherwise requires, all 'references herein to Fireman's Fund also refer to Fireman's Fund's subsidiaries, �. Investment securities Investment securities other than stocks are carried at amortized cost, except where there is a permanent impairment of value, in which case they are carried at estimated realizable value. Preferred and common stocks are carried at market, 7 1 Realized gains and losses result from the sales of investment securities or from permanent 5; impairments of value, The immaterial net amounts are included in other income, Prepaid policy acquisition expenses l The costs associated with the acquisition of new business are deferred and amortized over the terms of the related policies. Such deferred policy acquisition costs consist of commissions, premium taxes, and t other variable policy issuance and underwriting expenses. Reserves for losses and loss expenses and l`e and disabilit y policies. 7 r Reserves for 1oS3eS and loss expenses include the accumulation of case estimates for losses reportedy estimates for losses incurred but not reported, and estimates ofexpenses for investigating and adjusting 01 i incurred losses; less amounts estimated for salvage and subrogation recoverable of$100 million for 1982, ; $94 million for 1981, and $88 million for 19$0, and less deductions for ceded reinsurance. Life and disability benefits are generally calculated on the basis of actual experience and, where appropriate., standard industry tables, Premiums I ] Premium revenues on property and liability policies are reported as earned on a pro rata basis over the applicable policy period, Premiums due beyond one year on multi-year installment premium policies and the related commissions and premium taxes are reported in the policy years to which they apply rather than in the year the policy is written. Premium revenues on life insurance policies are reported as earned when due. k 2. Investment securities gains (losses),es), net of related income taxes, are summarized below (millions): Unrealized investment ions m� �� 1984 1981 1980 l q, Net change in unrealized security gains , , . . $(82) $'(161) $ 139 s' i Applicable deferred income tax provision , , . . . . , . . 24 45 (39) (k8) (6) 100 Adjustment of capital contribution -- — (7) Net increase (decrease) in unrealized security gains' . (58) (116) 93 Net change in difference between amortized cost and market value of bonds, after estimated tax benefits of $168 million in 1982, $75 million in 1981 and$147 million in 1980 ; . . , , ; 431 (196) (379) _ Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $373 $(312) $(286) P t I (t C•6 e" r FIREMAN'S FUND/AMERICAN EXPRESS INC. s° NOTES TO CONSOLIDATED -- Continued 2, Investment securities (continued) ` r ; Net unrealized security gains reflected in shareholder's equity are as follows (trillions); � � ) 11 1982 198E 1980 Unrealized gains . . . . . . . . . $93 $207 $359 .i. Unrealized losses . . . . . . . . , . . (19) (51) (42) y i Net unrealized gains . . , . . . . . a , , , . 74 156 317 ;5 Related deferred income taxes . . . . . a . (''10) (44) (89) f , Total , , . , . . . . . . . a . . , . $54 $112 $228 f 3. Income taxes c" Fireruan's Fund and its domestic insurance`subsidiaries are included in the consolidmed federal i ; ? income tax return of American Express Company, The foreign subsidiaries file separate tax returns, ' q ' The U.S, income tax provision is computed on a separate return .basis, except that benefit is w .r recognized for operating losses and foreign and investment tax credits expected to be used in the consolidated return, } The income tax provisions consist of the following (millions); 1982 1981 1980 4 Federal income tax provision (benefit) , $(26) $24 $10 Foreign tar. provision (benefit).. . a . 2 _(5) 0) Total $(24) $19 $ 5 f Deferred income taxes are provided on timing differences in the recognition of income for income tax and financial statement purposes, The source and tax effect of these timing differences in the provisions are v` as follows (millions); 1989 1981 1980 g Prepaid policy acquisition expenses. . . . . . . $22 $$99 $13 F i 7 (6) Pension and other benefit expenses , . i Policyholder dividends . ... a . . , , , . . . , , . (1.0) (3) (5) Salvage and subrogation 3 3 6 Other., . . 9 (2) �4) Total $30 $14 $ 4 The principal reasons that the aggregate income tax provision is less than the 46 pei cent U.S. statutory rate are reflected below (millions); 1982 1981 1980 i i. Income tax provision , , . . , . , $(24) $ 19 $ 5 s, Reduction in taxes resulting from; Tax exempt interest income . , . , , 102 71 69 Tax exempt element of dividend income . . 8 13 13 4 Other . a 15 12 12 Combined tax at U.S, statutory rate. , E1 ;5 $99 $101 r ' C7 FIREMAN'S FVND/AMERICAN EXPRESS INC. i NOTES TO CONSOLIDATED FINANCIAL STA'T'EMENTS - Continued 4, Pension plans Fireman's Fund has several pension plans under which the cost or retirement benefits for eligible rx employees, measured by length of service, compensation and other factors, is accrued and funded currently. Total pension expense related to such plans amounted to $18 million, $19 million and $16 million for the years 1982, 1981 and 1980, respectively, including amortization of past service costs generally over 30 years. t A comparison of accumulated plan benefits and plan net assets for Fireman's Fund defined benefit plan is presented below (millions): { January 1, ` 1982 1981 Actuarial present value of accumulated z plan benefits; Vested $117 $ 92 Nonvested , . . . . 13 10 Total $130 $102 Net plan assets available for benefits . . . $217 166 I l The data presented above is the most current actuarial data available, The assumed rate used in i determining th e actuarial present value of accumulated plan benefits presented above was 8.5% . J. 5. Lease commitments Fireman's Fund leases certain office facilities and operating equipment under cancellable and non- cancellable agreements. Total rental expense amounted to $75 nil] Ion in 1982, $55 million in 1981 and $44 t million in 1980. At December 31, 1982, the Ininiinum aggregate rental commitment under all noncan, ' tellable leases was as fellows millions : 1983, $301`1984) $24; 1;+185, $19; 1986, $15;,1987, $13; and $23 for I future years. Certain of these leases provide for additional rentals based on increases in property taxes or r IN the general cost of living index,or for payment of property taxes and other operating expenses by the lessee. { Most leases contain standard renewal clauses, s; 6. Iadul<try segments and geographical operations j Industry segments 1 Fireman's Fund principally is in the business of providing property-1 ability insurance and life and i disability insurance in the United States and Canada. In addition, Fireman's Fund provides certain other a services, which in the aggregate account for less than 10% of consolidated revenues, net income and assets, i Segment information is comprised of the following for the years December 31, 1982, 1981 and 1980 �3,{ l v { (millions), fs All Property-liability Commmial Personal Investment t Tina lines income Total Life Other Contoltdated 1982. � .�.. � Revenues $1,947 $640 $348 $2,935 $386 $35 $3,356 t 1 Pretax income (loss) (95) (22) 328 21 t 21 (12) 220 F 1981: Revenues _ 11805 626 312 2,743 334 27 30104 f� Pretax income(1088) . . . . . . . . . . . . (49) (29) 310 232 18 250 4 i 1980; Revenues . . 1,768 626 278 2,672 225 17 2,914 (� Pretax income(loss) , , . . (39) (39) 273 195 19 1 215 v f G•8 ' t s • / L ;i HhEMAN'S FUND/AMERICAN EXPIMSS INC, :.! NOTES TO CONSOLIDATED FINANCIAL STAT'.MENTS — Continued 6, Industry segments and geographical operations (continued „i Geographical ofieralions The following table presents certain information regarding the operations of Fireman's Fund in y different geographical re Ions at December 31 1982 1981 and 1980 and for the years then ended 1 g� , f (millions), tY+ .e United All Conolb M States Consd4 other dated 1982: $3, Pretax income(loss) . . . . . . . . . . . . . . 263$ 15 85 $140 1)$ 3 220 M Net operating income . . . . . . . . . . . . 236 7 1 244 fK? Assets . 6,053 257 203 6,513 fi 1981 : �a? Revenues . . . . , . . . 2,846 132 126 3,104 3 Pretax income,(loss) . . . . . . . . . . . . . . 257 (2) (5) 250 F Net operating income(loss) 231 2 (2) 231 ; 3 Assets . . . . . . . . . . 5,768 241 178 6,187 1980: Y. Revenues " 21664 141 109 2,914 444 Pretax income . . . . . . . . . . . . . . 206 6 3 215 Net operating income . . . . . . . . . . . . 196 9 5 210 Assets . . . . . . . . . . . . . . . . . . . . . . . . . 5,442 249 155 5,846 Mos; services of Fireman's Fund are provided in the United States and Canada, Fireman's Fund is 1 1 ,1 also involved in international insurance markets through its participation in APIA Worldwide Insurance and nominal operations of subsidiaries, Because of the integration of domestic and foreign services, It is not i E°f practical to precisely separate domestic services from the portion resulting from operations in foreign F countries, Accordingly, the separation set forth in the above table is based upon internal allocations, which ' necessarily involve certain management judgments, based principally upon the location of insured risks . and assets. 9 r 1 7. Reinsurance r Fireman's Fund asssumes,xo odes reinsurance as a party to several reinsurance agreements and is,a member of various pools and;OV' ,4tions. Most of the reinsurance assumed is on a pro.rata bads and is assumed front;many compatlii .. reinsurance ceded is principally on an excess of loss basis, Certain of i Fireman's Fund's ceded rein6:,",crice contracts are designed to protect the Company against loss events of a r catastrophic nature. Ceded premiums related to such contracts were $15 million in 1982, $16 million in 1981, and $15 million in 1980. Recoveries under those contracts were $22 million in 1982, $4 million in 4 1981 and $1 million in 1980. t, Fireman's Fund financiAl, statements are presented after deductions for reinsurance ceded which could become a liability'of the Company in the event that any reinsurer is unable to fulfill the obligations assumed under the agreements, Atrvunts deducted under property-liability reinsurance'agreements in the ` accompanying financial statements are as follows for the years ended December 31 (millions); y � i9dY 1981- 19110 Total premiums earned . . . . . . . . . . $541 $528 $407 Incurred losses and loss expenses . . . . . . . . . , 418 358 265 Other expenses' . . . . . . . . . . . . . . . . . . 128 131 86 Reported and estimated loss and claims. . . . . . . . 502 398 348 .✓ unearned premiums . . . 160 158 132 I' a t I C-9 t `, ; { - 1 ATTORNEYS AND C61ONSELOFIS AT LAW T.MLLER,DAVIOOE;JR. M.P. DUNCAN,III LAWYERS BUILDING TELEPHONE; (8171 866,1010 B. r ROBERT N. EAMES 401 N METRO: 12141 454.1176 ELM r MIKE GRIFFIN DENTON,TEXAS 76201 - WILLIAM P, PHWPS, JR, DECATUR OFFICE: ' GRAY W. SHELTON 106 W. MAIN ST: DAVID C, WHITE March 23 , 1983 DECATUR,TEXAS 76234 R. WILLIAM WOOD TELEPHONE; (817) 827.6946 I 1 Kidder Peabody & Co . , Inc. 10 Hanover Square New York , New York 10005 ATTENTION : Tom Becker i a i Dear Mr. Becker : Enclosed is information concerning the Life Care project in Benton, Texas , As you may recall , you requested that I send you [ information so that you could present it to the Denton City/County � f So fling' Corporation et its meeting on April 'S . It is my understand- ink that after the pi"esentation , you or are will request a special meeting to consider our project separatel s P j y, ea as to confuse 'it with the other projects presently being coniiidered by the Corporation. i, If p ;you need any additional information, lease do not j hesitate to give me a call . incereAy yours , l e 'd vi MD/Mm G Enclosure ' E E c I f � } 4 r . •F'k. z i., i..=>1. ..b� _ AL r L. j , Tj]fj LiJ I 1 l ' L p L I I3AtiF+ATIVE or ppacm PSI , 1 i I r , I i �tt ql A I I I nn TIVE OF P '12AM � , have Carefully examined and studied the services whiLh one of your related caVW es is currently providing in the field of Health Care; e anization, ; such as, acute care services► Health l�intenanc Org i Clinic services and Hc[W Health. with this Health on , network already i established, we feel that the proposed facility would most bonefit the ent retiree market. therefore, the proposed facility should + health dependent �y t li be ctnfoaned to a more mPO ,cally dependent, slightly older resident who E I s would desire to reside within tris Health Care cangx� s, It is our opi,uor, I services: that the prospective resident would be interested In the following sec.-unity good nutritious Peals; " Health Care On 'situ aria ocnr Portable, Vaity housing. We feel a rental pro9 ram with a membexship fee* as opposed to an endowment piogramr would be more conducive to this type of 3 I resident riue to their health and finairial status, a flexible program of F this type is needed, E t Hate that by initially serving this particular mar- It is igportan The future addition of ! ket, g fatal Health Care CavWs can be developed. t [Jpd1 full oc- ! • on site will only enhance the total program., acute care beds cupu-ay of the pry facility, the sponsor might crnsider developing additional living units on the adjacent land. Zfiese units would provide duplexes or an additional level of t living, such as cottages, ' townhouses. As the total Health Care �� beccxr►es more fully developed, we feel there will be a market tar your retirees who will be cognizant Of 'their future Health Care needs-. These individuals ceulA be adequately "neighborhood" of various served -attached housing t served by the addition of a a I on the adjoining parcel of land. I � .a h j r — i L t — - ! • r 1 . ; 3 , I 1: r' r } f g� I 1 e � C f I� I Y 11 VI 1 ..+ • >�r ST J tom, ' FAMISM PF(SECT a 1 1 V 1 i I RA'ME 0P PAQ�POSID PPC�TDCI'. y We reccsm d that the proposed retirenent ca unity include a total { r of 12S amts situation in a six to seven-sto ry mitt rise building. _ les as follows: � !. We suggest a mixture of five (5) apex try t s}Y { STYLE APPRi�XIMATE 9R. k`T. Z�D'J7�►L 9Q. FT. 24 Sf udio 450 10,800 72 One Bedrocm 625 95,000 I 12 One Bearom/De 875 10,500 i, 12 Two Bedroa:► 925 11 ,240 1 5 ` Two Bedroom/Dear-IL-1-0-0 51500 12� A�� SNX 795 72,100 7hese proposed ly larger tliari what many of the c m"- 1 units are slight 'rable facil: leo offer. We feel from our~ exper 3ence in the rerirrnt in�- dustry that older citizens still value and appreciate adequate living space and lazier units will attract a greater Percentage of the middle to upper insane level retiree. We also encourage the use of patios and balconies in approximately half of the units. The residential units should include fully i equipped kitchens to include garbage disposal and dishwasher, wall to wall canxting o smoke detectors, Moxgency call system, and individually Cwtrolled I i heating and cooling systems. Aowbi.nation masonary-steel structure should be considered for the suggested mid-rise facility. We to the na taus of the immedi ate neigh- boyhood, we feel. that extensive landscaPI'?9 should be considered to assist in creating a private residezntial feeling. Large unity terraces and t garden plots should be incorporated in the landscape Plan We Propose the camnn areas (preferably on grow fioar) to be appzw� e 12 500 feet a ►d include a central dining room, full service imately ,, . t residents and health center patients) , a i kitchen (to serve apart wn i" a J private dinim row, y; beauty/barber area, mridries; shop, library/ 1 I , .. ... i lounge, and an activities room. PThe ccmnw area should also include a crnmencial la diy, two elevators, a health club, resident storage lockers, rec:e;t,ian axea, mail morn, and all adrreftiigtrative offices. On earn residential floor there should be a small elevator lowxge or lobby. It is our experience that this provides each floor a smil0 semi. I private.living area vkich becomes an extention of the resider tial units. Coin-cperated laundries 'stMld be plwuvd in various convenient locaticxss ,I J cs' residen6,al levels. We� Sezvlaes � ,' ` i Ft = the followiry services to be sided as part of the Atoaithly Two (2) ;Gals per day Utilities (except phony/cable TV) i ']at l rom service (weekly) mmnty-fotw (24) hwx emergency call system Scheduled trerssportaticn by facility van Pwreational/activities r Security HHD menbership s 1 Administrative services ► Access to immediate Health 'Case facility 3 i Bi`bknthly Hbusekeepinq ' f ( ` ft i I E M r I 1 1 i 1 s 4 NAmTnE "cr Pfoposm CENMMI I. /a • f: � I 1 I r , i. • 45 i 7 f 3 i I + i 1 PiiLlPp6fD HF�h'rii CARE C�1'I'FR It is our opinion that a 60 bed Intermediate Care facility should be incorporated as part of the total project. Ibis facility should be lWated I ' in a semi-attached structure with the main kitchen serving the patient roans and dining room. A separate exterior entrance and additional exterior I i terraoea shmId be designed far the health facility, A total of 60 beds j will be located in private roans. The total Health Care facility will be s I approximately 22,500 square feet. 7here should be, however, an easy access Y I fran the residential uni.ts. 2w Health` Care facility shall be built according to the highest ;known and 'y StrUCtura s facility Should incorporate a 4 sprinkler system with smoke detesters and fire door exists places awarding to ?ocal state, and federal codes. I The overall facility should incorporate in its plans a cattt� dining an i s roam, functional and attractive lounges, and recreational areas. A nurses office (which could be utilized as a Home *,elth office) , an ou ninational roam, and a physical therap , zorm should be included in the overall plan. d t The Health Center should provide the following services: Twenty-four (24) hour nursing care (Registered, LPw staffed as required) 'rime (3) meals daily Airical n rapt' Physician Services radical Records E Recreational/Social Services 0:)mvtltant Pu=wist s Poutine Housekeeping Utilization Review �dmnittee Maintowise laatmdxy E Medical Director h Therapy I r `I I F L , 1 - E t � j � S E ` r 1 , sxa E F � P # . ro �'1?y4TF9Im'tG E5 t i 1 _ , f l _ j l } E , 1 3 \ 4 f � II I,t ! FIIFICIl a '1ML MVELaMM COST ° $200,963,100.00*. LiilM 2.2 86.900.00 t7EVELCPHNP S I m MST $33,250,000.04 LESS C1157i S ,%um 2,65Q,000.00 t Tom Mcm 70 Im F $1006000000.00 * ImIudift & aot COntirKjency • i i i f f it f . f , t r MARY JOFFN CRAWPIORp, cokc, l ,>fte;7.��.;,a• :4.t � x „� k wmro�eNnX � /II W6T MAIN SUIT■ 140 - r ,. k L[WI*VIL4[ %t YL10 41. «n � (1141 AXI•//// i November 15 , 1983 s n' N 0 T I C i There will be a meeting of the Board of Directors of ! ' Denton County Hauling Fin ance , Corporation on Mosiday, 1 Nov'embex 21 , 1993 ; at 1130 p .m. in the Denton County ' Coanmisaioner ' a Court ttoom , 6th Floor , Carroll Courts + Building , Denton , Texas . The purpose of the meeting will be to receive a { report from PLANTEC Corporation concerning the demand f for first-time home buyers in Denton County , Texas , and I to' genrally discuss the proposed 1984 single family housing f bond issue in the amount of $25 ;000000 . I I We will also hear a request from Carrollton PArthers, Ltd , Project to amend its Trust Indenture'* y i E k �y r l�dt � J �� , f V, ell FULIBRIGHT & JAWORSKI r DANK Of'TN[ SOUTIIWRST DUILDINO HOUSTON, TCKA6 7700= I 11'10 CONNtCTICUT AVty N.W TtL[RNONt 0131 W-0101 LANDMARK DU4PIM0. Built t00 I ! WAlµIN070N,O C•10030 1101 CAST 04OUSTON AVCNUK t 3 191.9144ek9 mow 401,4000 TtLtK 70'3021 SAN ANTONIO,TCXAF YAtO■ TtLRK �1►<OBOl T[LC/NONC fSiSl ft4.6079 3 IN DALLAS ANt111CAN SANK TOMBS, W17t 1750 CUM", "UOU[NIN,DOOTMNAN i MORROW 3 N JAM SWI MLAC[ { Sti W957 SI%TN $TP190 AND LONDON, DWIA 1N► (` AUSTIN,TSKAS 70701 PULDRIOMT i JAWOROKI T�Lt RNONt 8511 N!•MD7 T[Lt*NOM9 (SIM 474.0101. 2001 BRYAN 70W[R,SUIT[ MOO TtL[K tSilO DALLAS.T[KAS 791101 ! TtL[RNON[ 1114)000.0060 WNSILM1 T[L[rNONt{tWe&*•IB00 (IN? - 5 January 11, 1984 Re: Bond Purchase Contracts Executed by Benton County Housing .Finance Corporation and Poinhandle Regional Housing Finance Corporation J_ .................................................... ...r ...........................r te...^.........w... `< Mr . Tom Becker Kidder, Peabody. & Co, Incorporated l2th '''Fhbor, - Public Finance 10 Hanover Square Hew`. York, _New York 10005 5 Dear Mr. Heckers As �o. rwteifederal iislat3 on proposes to extend the sunset issued under section I03A Fa of the Internal Revenue Code of 1954 , as amended, for an Additional five-year period. Assuming the Congress passes such a tax bill extending the sunset on mortgage subsidy bonds, the relevant provisions of Article 12691-8, vernon ' s Texas Civil Statuteo , (specifically , the statutory formula for allocating the state ceiling and the method of processing reservation requests filed by local issuers of mortgage subsidy bonds) become inopera'cive by the express terms of the statute on and after January 1 , 1984 . ' Under Article 12691-8 , the Executive Director of the Texas l Department of community Affairs (the "TDCA" ) is charged with the duty of receiving reservation requests and 'issuing reservation certificates. Assuming further that the ineffi- cacy of Article 12691-8 is remedied by the Texas legislature, ? thus enabling the processing of reservation requests and the issuance of reservation certificates during the calendar year 1984 , certain questions have arisen regarding the f effectiveness of the respective bond purchase contracts f executed by the captioned housing finance corporations. The purpose of this letter is to answer those questions t r k r «. 1 L j Mr . Tom Becker January 11, 1984 Page 2 During a recent discussion with Mr. Douglas Brown , the Executive Director of the TDC"A, ,the cogent facts relating to the captioned bond purchase contracts were related to Mr. grown. In the first situation, the Denton County Housing Finance Corporation executed a bond 'purchase contract ` on - au1y 29, 1982, Such bond purchase contract recites that the Denton County Housing Finance Corporation agrees to "sell 'its : Series 1983 mortgage subsidy bonds in an aggregate principal amount not to exceed $250050 , 000. During the calendar year 1983, Denton County Housing Finance Corporation did not submit a reservation request to the TDCA, and consequently, s' did not issue mortgage subsidy bonds during 1983 , I In the opinion of Mr. Brown, speaking on behalf of the TDCA, such bond purchase contract is still valid and could be submitted to the TDCA with an accompanying reserva- tion request during this calendar year if the Denton County LI Housing Finance Corporation desires to issue mortgage subsidy bonds during 1984 . Under ,present Texas law; if two or more reservation ;requests are filed with the TDCA on the same date, . reservation' Certificates will be issued by the TDCA in the order of the date of execution of the bond purchase t contracts accompanying such reservation certificates . ' Thus; F assuming Texas law. does not change significantly, if ,two ,or more reservation requests are fi ed' on the same date, the bond purchase contract of the Denton County Housing Finance I Corporation, dated July 29, 19820 would take precedence over bond purchase contracts executed subsequent to July 29 , 1982. Clearly , such bond purchase contract places the ! Denton County Housing finance Corporation in an advantageous position since most reservation requests submitted to the TDCA this y ear will refer to bond purchase contracts executed in 1983 or 1984 . ! Mir. Brown cautioned that currently under section 5 (b) of Article 12691-8, if a reservation_request is filed prior` to June 1 of a calendar year, the maximum amount of the { local share which may be reserved by a housing finance r corporation' may not exceed an amount determined by multiplying ► j $150 , $200P or $300 (depending upon the size of the " local population, " as hereinafter ` defined) times the "local popu- - 1 lations " The "local population" is defined as tNe population in the local governmental unit or units on whose: behalf the housing finance corporation is created. If the Denton r :; } I f Mr . Tom Becker January , 1 , 1984 Page 3 i County Housing Finance Corporation files a reservation f request prior to June 1, 1984 based upon its duly 29 , 1982 bond purchase contract, the maximum amount of the local share which it can reserve may be less than $25 , 850 , 000 , depending ,upon the amount arrived at by applying the statutory formula set forth above. In the second situation, the Panhandle Regional Housing Finance Corporation executed a. bond purchase contract on July 28, 1982. Such bond purchase contract recites that the Panhandle Regional Housing Finance Corporation agrees to sell its mortgage subsidy bonds in an aggregate principal amount not to exceed $30, 000, 000 . The Panhandle Regional Housing Finance Corporation received a reservation certificate from the Execuuive bireotor of the TACA based upon a reser- vation request filed on January. 31, 1983. During the 'calendar year 1983. the Panhandle Regional Housing Finance Corporation issued mortgage subsidy bonds in the aggregate principal �. amount of $18, 985,000 . Based upon the foregoing facts , Mr . Brown concluded ! that under section 5 (e) of Article 12691-8, the reservation r certificate lapsed as to the remaining. W11, 015, 000 aggregate principal amount of unissued mortgage subsidy bonds upon the expiration of. 45 days following the date of filing such reservation request. Therefore , Mr. Brown concluded that such bond purchase contract could not be resubmitted to the TDCA with an accompanying reservation request as to the unissued $11, 015 , 000 aggregate principal amount of mortgage ` subsidy bonds. Mr. Brown suggested that the Panhandle Regional housing Finance Corporation execute a new bond purchase contract as soon as possible if it intends to issue mortgage subsidy bonds this year, l f If you should have any questions or comments concerning the conclusions outlined herein, please do not r hesitate to contact us . very truly ours ' ' Jill A. McDonald { For the Firm i - � JAM. das fi cc: Mr. Bill Carpenter 1 � I E f .TBIRT�X' JrO iN R'A• WPO$D.r;c. INC• J t 141 WK9T MAIN i.KWI/V1LLK,� 9U1YK 140 t 7KXA9 70067 ��2�}.•V(r���.(L � . ' �214� 2R1.6d6C ,.� January .17 , 1.984 N o T 1 C E` There will be a meeting of the board of Directo 1 . . Denton County Housing Finance Corporation on rs of Monda January 23 , 1984 , at 1 : 30 CO, isSioner' s Ccurt Room, p6th door CarronlCo County ` ing, Denton, Texas , rts Build- J s . , prpose . o 'the meeting will be to tho proposed 1984 single-family housin generally disdusa amount of, $25 g bond issue in. the ' i 'eabod re , 000 000 and to reaeive' a report from Kiddar 3' garding response of lenders to he issue. proposed bond We ' Will also Consider comply amending certain loan documents to with amendments to the Treasur the ' 1991 ' multi-family bonds . Treasury . Re regarding For each Director I have enclosed minutes of meeting on becember 12th ' held and December 19 , 1983 . g i i I have updated ation and have Your notebook financial and other inform- enrlosed copies for you to rdplace and updte Your personal notebook book will also be updated.The Public Access Director ' s Not ,` f This Pu1�1ic Access Notebook is kept on file at the Court Ho ' I use , .: � -e have enclosed pies the financial institutions , � Year-end statement f' or Your review . WC DENTON COUNTY HOUSING . FINANCE CORPORATIQN' IWOME/EXPEN"E STATEMENT AS OF DECEMBER 31, 1983 INCOME; 1981 s Program fees I $ 20 ,920,68 k nterest Pilot ; Point National Bank 326.48 TO'T'AL 1981 INCOME 21 ;247.16 ' $ 21 ,247. 16 3 EXPENS S - 1981 j Supplies 7-27-81 Supplies 11-24-81` $ 75.10 147.00 _ . Bank Service Charge- 3 months 24.00 • 'PO'PAI, 1981 EXPENSES 247'11 } 4•1 - $ NET INCOME 1981 21 , fd�.5 982 INCOME - 1 - . Into est ti } k Nbrth Texas Savings & Loan Association 1 1,478.54 InterestF Denton Savir c �s Assoc. 3 705 49 Program 25,909. 77. TOTAL 1982 INCOME $ 31,094.80 31 ,1�94i80 ' EXPENSES - 1982 $ NET INCOME FOR X982 31 F $ 9.80 INCOME - 2983 A 011cation Fees $ 2;08 .0G1 Interest - North Texens Savings "In Association 6►214428 } Xni�rest Ggntan, Savangs Assoc, l0 S26. 35 Ytatsa gt �, C 1Gr�fa3' SaVings.:b Loan ;659'.64 T'rograitt 'PartGipation Fee 84,�5g.0(i 84 PrYn `Participation Pee ,50fd.00 Frogrdm ParticipationLFee 21,787.50 ; PiOgtam. Patticipatton Fee 26,51`2.50 � 1'O^At, 1983 INCOMI $143,965.7 8183 ,965. 27 1 t r i DCHrC INCOME/EXPENSE STATEMENT - Page ] 5 .. ;p, a �.')t - .•, .,,. TOTAL NE`P INCOME TO DATE (For 1983) $183 ,965 .27 3 EXPENSES - 1983 150 .00 E HUD Ins. Application Fee $ 250.00. Telephone; Postage 75.00 Offic e S�pl.iea 261.76 ! Newspoper Not ice-A 112,33 Copy Expense 5,250.00 ! Contract Services 150 .00 C.P:A. Fee 100.00 i Membership Fee ` { # { TOTAL 1983 WtEnees ae of May 31st 6 r 99.0 $ 60349.09 !! NET INCOME INC FOR 1993 'I'0 NOVEMB� 30, 1983 $ 77,616.18 1 I I 1991: Or XNCOME 31,09A .80 1992 .NEI' I 177,615:18,; 1983 Oft ,INCOME $2290711.03 ! i NET INCOME To ! i I A I � 1 't I } 1 s 'l Page 7. DCHFC INCOME/EXPENSE STATEMENT - i s ? NORTH TEXAS SAW NGB AND LOAN .,r i DATE TRANSACTION CHECKING SAVINGS SAVINGS TOTAL f ACCOUNT NO. ACCOUNT NO. AC3CWNT NO. z i 02-0100026-9 7981-057,02-3 024100060-7 3-31-82 . Transfer from Pilot Point Checking $ 252.89` $ 252 .89 3-31-82 Transfer�, Denton Savings Interest 1,668.79 1,921.68 :.. , � j 4-25-82 thru 12-26-82 - in c, l Z 7.09 200 8.'77 7 8 Program i�&t't. Fee $25,909.77 271948.54 1 7=3182 thru - �. 123142 'Interest 1,361.45 i 29,309.99 12-17-82 Transferred -- I 7081-057-62-3 to New Account .00 X27,271`.22 29,399.99 12=304216terest 91065 29,491.64 E 1-23-83 , Interest 178.62 29,580.26 " ! 2-21-83 : Interest , 1 209.05 29,789431 3-20-83 Interest y 187,94 290977.25 3-15-83 Telpphonef ; Posv- e,, (125.00) 29,852.25 3,41,5 83. Publ#C' Notice Carrollton (192.90) 29;749 .85 3-15-83 Public Notice - { Leader ( 81 . 36) 29,668 .49 3-15-83 Public Notice - Record Chronicle: ( 78. 00) 29 ,590 .49 k 1 NORTH TBXAS SAVINGS AND LOAN Page 1 L lr r l Y F r ( ' ra r , 291465 .49 3-15-83 Telephone; Postage (125.00) 213,42 129067,8 .91 3 4-20-83 Interest $ 31x678 .91 ' t . �9-83 APp $ 2,000 ,00 i 1, Fees 31,653.91 .� . : 5-9-83, " Copies ( 25.00) 1 31 ,403991 ► 5--9-83 J J Crawford (250,00) t 29,903.91 i 500 .00) 5-9-fl3 J J Crawford ('l r 12-27-82 1 ' 129,937.30 thru � i 4-25-83 Interest to Date 33 .39 i $210787,50 „ 51,724.80 rat zxpense Fee 'S-1393 Prbg 26,5 30 12.59 , 5-1' Program Fee 78�967 ,,3 e (150.04!) 5-15.83 Degt: df, HM 7g,`ty95.73 A '43 „I ' 5: 25.93 interest 78, 29.65 333 .92 i 5-22-83 Interest . 78 976-36' ' 7.69 54x1.02 6-20-83 Interest I 6-27-93 'Transfer from 17�f3go go 96x979.36 Dent06 ' Savings 3,000 .08 F 661.61 . 99 ,639.97, 1 740-83 interest ! 990659,068 19 .71 725-83 Interest 761.30 100,4,20.98 ; g..2 t t 100,4x42.14 } 8-25-83 Interest 21. 16 ! '116.12 9-240-63 interest ) 9 4 5-83 Interest 21,16 10=15193 xransfer to Co106ia1 (5 000.0W) 96 ,181.52 11 Savings & Goan Ng� 3. 96,900.03 718.51 10-20-83 interest 96,920 .70 10-25-83 Interest 20.67 NORTH TEXAS SAVINGS AND LOAN - page 2 t 14 5 97 635 .15 t ) Interest 7 4 �1-Zp-B3 Int e ► 11-27-83 Interest 22.84 F 97, 651.99 _ t 1240-83 Interest', 696.75 98,354 .74 12=2683 Interest 20.16 98,374 .90 90777. 2 $0,597d5oi, $98t37 40 y ,4 r i i i i NORTH TEXAS SAVINGS AND LOAN Page 3 - ES r l r: .y..• • el. .ir; , i,, ni. ... ..., .:++! . ,tq(,i^-ie vt ,y I {4i,,id•i•T„1+n W t ��• Lf ZVI f I COLONIAL SAVINUS & WAN ASSOCIATION A TION 1 SAVINGS ACCUM NO TOTAL DATt mANSACI'ION 03-931786-0 10-17-83 peglnning ba,laiwe �ronsferred fran NTS&L $5000.00 $5,000.00 } 10-17-83 Trsnswred from lj �l00.00 35, 8l .00 t Oenton. Sdvings f 18-29.83 Interest` ,; 105.88 35,105.98 11-38-83 Interest 278 .10 35$38398 ; R 12-31-•83 Interest ' 275.66 35,659.64 } , I , i 1 , _ t COLONIAL SAVINGS & LOAN ASSOCIA'T'ION - Page 1 � I f I lc v • DENTON� COUNTX, HOUSING � E ' FINANCE CORPORATION ' E 4' ASSETS DE:CEMtR 31 , 1583 G E 4 North, -Texas .Savings & Loan 'Association (; Checking Account $ 41777.32 j Savings Account 93 59,7, 58;, Colonial Savings & Lomn Association 35',6'9,64 DentoW,Savirgs Association Savings Account 23,35759' Snvinge ,Amount 38,56 , 13 a 4 Savings Account 34,196 ' 3 yl1 TOTAL ASSETS 230,155.97 . r t t 'E 1 r I I i DCHFC ASSETS Paige 1 E ; - y a , DFNTON SklINGS ASSOCIATION . :.> TOTAL DATE 'MNSACTION SAVINGS SAVINGS SAVINGS I a ACCOUNT NO. ACCOUNT NO. ACCOUNT NO 063876-4 03-001355-6 03-001356-4 I y, 03.001374-0 4 . 241 o 747 7-24-81 Initial Delwsit $ 20, 147.16 $ :16' y Trongfer from Pilot point Sank 1 ,22-82 Interest 11532':90 22, - 380.06 f 22,415.95 ' E 1-26-82 Interest 35 ;89 ;s F 209747.16 2-12-82 'Transfer to, (1,668 ,79) N4'S6L Checking 7-3iI Inter" • 1,445.36 �'22,192.52 r t 592.34 22,784:$6 . ',11 29 82 interest " 1B7i444��6 i l-] 7-83. 'InitiAZ' Deposit $840660 00 � 'Program Part: Fee, ` 1-17..83, r`riitial Deposit $31,68QJ:Q0 139,044 .86 iogr'm Part. Fee 1-28=83 Interest 462.55 19,507..41' 1-28-83 Interest 101:46 I390608.87 E t { 1-28.83 Interest 271.81 139,880:68 2' H-83 Interest 174 .53 1400055:21 s A 2.26 -83 Interest 229.47 140,2 04 .68 . 2-26-83 Interest 614.77 140x899.45 Z 83 Interest " 209.91 141',109'j6 i 141 671.01' 3.26.83 ' Interest 561.$5 � 3-26-83 Interest 153.83 141 ,824 .84 c � DENTON SAVINGS ASSOCIATION - Page 1 ' i 1 t G 1 . 4a, rnp atSt ah .. ,. r.0 .,e q •m. -.. .., l..r. . a .... .. .: .. ., ,' . r r F j 4-13-83 CK #90 {1,500 .00} 140;324.84 J. Crawford ! 4-13 783 CK ))91 (250.00) 140,074484 J. J. Crawford '1 r f 4-28-83 Interest -175.34 140, 250 . 18 4-28-83 Interest $ 664.29 140,914 .47 4-28-83 Interest $ 247.95 141,162.42 j 5-28-83 Interest 141,750.42 5-28-83 .Interest 219.47 ' 141,969.89 r j . - 3 Interest 149.09 142,118:98 I ' ,G � 5.28-83 28 8.� i 6-8-83 Ck. #91 J. J. Crawford {1,500.60} 140,618.98 6-843 . Ck. ,492 259.00) 140,368 .98 �. Crawford . 1 { '.: � . 6-8»83 Ck.. 93 , 75,00) 140293.98 f 3. J. Crawford ' 6-26-83 Interest 564631 149878.29 -83 interest. 220.96 141r099 .2a 6-26 .. 6-x6.83 Interest. 150:10 249.'35 141 6-27-83 Ck. #94' Transfer to NT3&L {20 ,0P10.00) 121;249.35 7-29-83 interest 180 .66 549 .73 265.95 1?2 2j5.69 8-3143 .'Interest 183.67 544 .70 270039 123,'444,45 � } 9-27-83 . interest 151.39 123'1395.84 � 111 { 448.98 123;844.82' 9-27-83 Interest 9-27-83 Interest 222.87 124;067 .69'. # 10-15-83 Ck #95, I B Fe�y,sley & Smith, 150.00) 123.91.7.69 C. .A. �. : DENTON SAVINGS ASSOCIATION - Page 2 i T „t f t t j I i l 14 -1583 Ck #96 - Transfer to Colonial Savings & (30,000 ,00) ,69 t Loan Assn, 93,917 10-29-83 Interest 176.33 450.63 25948 94 ,8d4.23 11-30-83 Ck 90 - 'Jerry John Crawford (87633) 94,716,90 Reimbursement E 181,66 299.95 267.10 95,465,61 11-30-83 Interest 12-15-83 Ck 91 - Ma ibership (1801400) 95,365,61 See Assoc, of HFC 12-31-83 Interest 183,58 303,11 2b9.13 96,12 1 43 $230357,59 $38 ,567.13 $34r196.71 $ 96,121,43 ' 3 k s. { i ( i I 1 ] F t i DE'NTON SAVINGS ASSOCIATION W Page 3 1 i r ,I STATEMENT O + and I Ion Assocl at l orr ACCOUNT ACTIVITY P.O. Box 2968 fort Wnrlh, IeXBS 78113 MF ACCOUNT N r UMBER y ,;0 �931'(,Qt; CYCLE PERIOD F ROM t !R4 r YOUR BALANCE ON `} 11r: @3,; OF M OO PENTON COUNTY HOUSING FINANCE CORP T LESS j Np^ -'E' CHECKS WRITTEN r FOR 1348 SAN AN70NE LS$S lhNQl' OTHEfl WITHbRAWALS FOR LEWISVILLE TX 75087 DEPOSIT AND CREDITS' FOR 3 s 94 PLUS Nor S• i PLUS `?`� 14TEAESTC CREDIT FOR EQUALS YOUR aqLANCE >#, OF ,n�,°g 311560;64 .1 *** TAX INFORMATION *+ TOTAL INTO'RNST RARN I) '> F14$ I5 5Sd;6q " PAGE i OF 1 YOUR AVERAGE DAILY BALANCE fOfl THIS 'FERIOD WAS "35,383' 80 ' + TOTAL ;INTEREST EARNED THIS YEAR IS •„ `' f15� 6q„ " ! ' GtIE ;°' '`,, ^" hr' rRA�'3A4iipN AR9QRI.PT ON',iaY, ` t :<' . C14s1 OTl�6g <}t>,pfi�4liT , j 1 V.lTHDRAW.Ar+S; AN8 < T RAl /°N4 s v Y : ,` fi 9rERC1� c+1�+k4 +� r`IIaNO}C�tEQIr; ,>s { B14LAkC I}LASr TAJEHEMT rz $�I. I I 1MYE9FSf: cRCD1r I, 1 1 ( 1 1 1 1 1 1 I 11 1 I : I 11 .1 r 361 a8, , bALAMCE 1H1 ............ Jy E9 q ,�. s sitit; xfi�r ` 11 11 „I, I 1 I , r, r 11 1 I, t 1 . �I� 3$ 6 9 6�i 1 1 I n I 11 1 r 1 1 o 1 u) U 1 1 Q ........ 1 1 I 1 1 1 1 1 III I II 1 .................... I II 11 ......... I 1 I!I 1. 1 ..... q q ......r'.... 1 11 1 I r 1 I 11-1 I 1/IV q I .. , I II 1 I P!1 I` In 1 1............................... I I 1 1 ! I 1 } 1 r 1 11 1 1 1 111 ( ! 1 11 1 1/ .... I 1 , 1 , I. '•1 f r 1 tlI f ..........: I :. 1 ! 1 111. I I I I H I l f l r 1 ................ ...... 1 1 ' 1 ............ I .........I 1 r ' , r '1A I 1 1 1 11 11 N .......11 1 1 I I ,, I r 1 I 1 1 1 1 II rl 11 r I II 1 I. 1 (l II ................. I ........ r f II 1 ( II ............ 1 1 1 1 11 I............... 111111 1 ........................ 1 11 1111111 1 ' 1 I 1 1 111 ................. 1, 111 1 1 I 1 Ilk( 1 1 1 1 1 .. 11 11 u 1 ' 1 I r I I I I 1 1 I r ......................1 11 I I I I ........................................ r I j 1 I 1 e 1 7 I 111 1 I 1 I ........................................... I 1 ` ' 1 1 r 1 1 .. n 1 I li 11 1 II l t C 1 r1 , I { 1 1 1 rl 1 1. 1 1 1 1 II 1 I ........r I I 1 1 1 1 1 11111 11 1 I r1 1 1 1 1 1 11' .......... I.1 II ........ 1 I ' 1 111 111 1 1 11 .i ................ 1111 . 1 1 y1 1 1 I ........ t .......... f ! .................... .q. .. .�. ..1, 11 i 1 1 PI 'll.•j 111 ..1 ...f. I 1 1 '^' ............. u , 7 1 .. r. .: ... ............ .I,t n ................... 'I 11 rqy ..1 I.1 a ..1 .. 1 ................. I.. ................ ... u r .. CKS �RC.�tv�i�,' $Y ;.COCK NUNtA)rR , � � ,� •' =. NUMdCR, fAM'AUNP HLIMU6R '43 {,AMQUt :pllY�lHFi OUI(T t 4JdQUtJ fll1JASgkR , 1 ek Aaios�r.r I . ..1111 ..Ir.,1 . 1 111 I I I I I 1.11 11 11 1 1111 N I I 111,) n. 1 1 I I 11 I II II II 1 1 II 11 1 I 1 1 1 1 I 11 11 I 11 1 I 1 ...........1 ....................... 11 11n ' I 1 I11 (I 1 I 11 .1 1 11 11. P ' 1 I p 1 n 1 . .I,... 1 1 ' 1 ' °II l r i 1 .........,f 1 r 111 1 J 1 1 .............1 .................. 1 r 1 .................. ` I•r 'L• ••' luj. ..1 1 111y .I I I Ilpnl .......... ul .l. IJ. Lfl..t lalq l� 1u pl•Ilb 1� 11 !1 <CI`S£ C r F s ..i >ri lk S..ki` hns lfi' AIL >} �yy. 11 y 5 <,'� "j�%171���?, , <I `�pAYi: ' � ,�`�A7F��1�" r; � 7P k 7b� � ,>, �; ----�-I• 1 11�3b .....9 s RATE is bl' 93 gl 3 0 ,040 12 103 a �s4 1 ob 4� i d� 93' ' � .66 6% i2 i9 93 9 9�bt7 1 283 � ;�5b� I. 14 b2 a3 9 00bi� i2 sb 93 9 obti°ti..,a a . &. . . 1203'-83 9 000°4 i2 it 93 ' !} 0bb� ' { '.i69a......4,61h�09G ' I 12=2'7'-93 8. � 12 44-97 9' 044°k i2 12 'a3 0, 060 1 ^b�l I i2 b5 '83 ... ..$ 0od , ..i.2_13�s3, '60°� °12 21 93 8 950°b 12 23 at 9 '7Li0 Li 2 b6�a3 9.....0009c " 12 �d'-93 sllll '93 9 hso°ti' 12 30 6S ` 9195b,t' " " "' 2=07-83 g", ObO% ' 12-1E =83 . ..9 ,960x..1 ,.1.220.^R.2 9"'96o9c' 1'2^b{._$..a. ,.I..$:. .. .. ,'960 ."' , COLONIAL; SAVINGS CHECKING ACCOUNT CUSTOMERS .ReceNe Attractive hates On Constttncr Loans p y, t .. sans Arid More ' Antos*)3onts*'Vans+R`V'sfMotorc rllcs*T'lome' T�In rovement Loans Call Our Consumer Loan Department at (817) :1a 2391 Today, Por' More Detalis se7 r Ir i, � 1 ' ` u �y ',,IUIZTiI, I kA9� SAV1 !4G1 AN 1OA1J , O60C1 {>ENT0(1t.' TEKA 62u1 r < < S TATEMENT O F A "COUNT `lk � `E,�; n,li � ! � TH! s s 'J'AI EMI r+ T, ANU I� E'.P08T � �ni�Y r n�12�RS I c � ��AN, 1a Nii1` T11 , .i,EXh5 8AVI J n r ?S rll 'T llliN t1► ; uAY� �°��s rE:h 1tEcklh' T ` t)F 8TA1htlktJT , f.r1 ( �1II UUIIy'f Y � i(101810 � I �, I r , , r + ' pp y yy k6no �� J 10AU , IaUUhIT 41ALIt IC uhf ! yyy GK �II1i ! , THAIIaAf,I� I )�la r ,. ,.•. ; > Ak Y � � r�9l1f�Fli� 'E1�1!'! EY 'f'I il�t;�' f U�II,� ' t�iAI, APIG� h (lNNEAftfl t 11+� �'I<C ;i 1L ,Fr Etk'NF:� � Ur.f» 1, 12KE b�!(o 75+ '� S jL AfiNUAL4: f' R C E TA V KA1'k; ( A �� + f'' .�3 ! r� At t E(o' TZ rr �,; �� pp� p / y kTFk F I .f t t , iI- C l lj gOt) 'li ' i 1 r 802 03 r' y , l I / /Y �: ,• ' i :1. it ,.,' f ° �r i h1 G7 Up-� yfo EEAI Y „ 4• } CU .T,��IiE �] CII ,CK `� IT I1b ��AY 0 ALA14CE;I'„ Eigl:n�,ILF S , f t +' r i �y s)2 , 9� U � fl ��' 3 Ir � r I r I , t t . 1 I k r ,.r. , s- , 1 ' 11. 1 ' 1 r 3 0 � r)ufh'Ttl ' TEX'A9 ''SIryI (100 AND. LOAK ASSUC1A'r�'tU14 f ?+ c1 , f 1, eH Ne f? St � �' 0T0f� �.' TEkAS: t 1 � 1 ,', 11 ' 1 �,•' ,., !ll r � � I � '� ' � �'t' �'� nya JvhAllX �� MA�'rf 'al�7C� Ur'tfiYa�+.r ef: aiqs T u;� '�,E� . r� ,� , s 5A�) ttvu � � ' ��la'Ea � 'N , ra ;' w)x 4e>' PENT , r . rE:kA0 ;r1 TO ilH 10 DAYS AFTER RECEIPT OF S TAr(MCNr � lrrlaTt/)v C ( !)'J r ` ' giW�, � illt rruu I !)A1lCk G(IN f) 1 0 31 r1 "Ail TUMC ,Xb tip' ge l i,i S, i WIL"TO Any" 7 _ PAG Ch ' 114JIf Yi� Ali s1SOF�IS Al4�UtVT dAJ»Ar►Cf:' I: J''fit VZl)t1,5, 0014rti C ';F:CKxNG Ai AIICt: 14 , atal'k' 11E :1T �'Atf!'�EGt� �CrIE0K ti puI)11S R,U . ib+ 4 77 qq �it HTSC LUEsir II7' p�, AY 11aIl. r . �EHa:i ! 'ffl Crtr, C� � X7El+19 0AY'.;u'ALItNCE' gac,ntit�:E U t1i757 ; 16 +1i 757 t t i I � 14 L . ,. .v. Y l f STATEMENT,` OF fvJ 511 Jr ACCOUN ACTIVITY I , 7 1 ' DENTON SAVINGS ASSN> " 80X. 1307 i'` + ' MF " ACCOUNT, NUMDER v03tQ410 of NrON,' Tx 76201 1CYCLE `PEAIOD FROy1 ' Ti�3pti� TO;'Q�*O1BA ; 11 , 84 a2 t; la YOUR BALANCE 'ON Q�'< O&1141 "� F t s I1 DENTON CO HO};TiYk4 FINANAE CbRP4 ' T LESS <�Iq�$s CHECKS -WRITTEN FOR it ' r` : >, t00. { i992 ' SERIES q:, ' 4ESSt1Q;1 �, OTHER'WITHOHAWALS 00 PLUS NyO� . + DEPOSITS AVD CREDIT$ 'f0A 401 WLHOICKORY,I�JLL COURTS SLOG PLUS " N'i�`;9 s ''SNTERESS EREOIT FOR DENTON, TX 78201 lrt3`3 EQUALS LYOUR'BALANCE UNiYt, Of tMM TAX ,INFORMATION, *** TOTAL' INTEREST EARNEb 19�� k9 41882 i3 E DAILY BALANCE FOR THIS P$RI00 WAS :PAGE . 1 OF 1 YOUfl AVERAO TOTAL INTEREST-EARNED THIS,YEAR 15 „I sv?; , BBB 13 II _ U Tar t } � ' � R H$AOTION AESORIP'fkANs > ; ' .I. .I. ., ul BALANCE :LAS1 S1rAUMM.1�r 111 Il,:i II 1 I ,`, tl 1 r , I I II . I I 1 (l 1 4 1 1 1 II 11,1' , Sd� 1.1 i ' , ,:• ' M9.,.�fi9♦ i� ' I ` INf EhEST°�REO+u,I + ..... ....1 I, Yt •1•••� I'i 11 r .�, Ir r 1 11111 1.� 1 1 �• , 1, 11 1 1 111111 I 1. '1 + 38 , B6'� 13 t BALAN� TH15 iIA� HEN7 ,l ff ' ................... ........ ' 1 2 f I 1 1 1 I 1 11 1 1 1 1 1 r 11 1 { 1 ry 1 1 1 I l .. 1 1 I r 1 1 1 V 1 J 1 11 I 1 11 11 I l II 1! 1 111 1 1 1 11 1 1 } iru 1 . . 1..11 I n y r 1 1 .p111 I 1 1.1 11 r 1 1 1 r 1 I 1 1 111. 1 11 1 11 1 1 ` I•nl Liu P . . . III wiq ll l lu ul 1(1 r 11. Ilu I II 1111 H III 1 1 11 II II I 1 1 1 1!11, 1 1 1 1 • ' ' m '1 1 1 1 rql 1 1 1. 1 ) l , 1 11 1 1 11 r 1 I 1 1 4 1 1 1 1 I 11 1 1. 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HOUSING FINANCE CORPor T. lES5 NO Y '1 6TH FLOOR CARROLL COURTS 8400 : .,3 CHECKS'WRITTEN FOR E , ? > ;';` 00 ' LESS sNQ: t N K 401 W HICKORY s� IOTHER .WlTHOAAWALS ' ,FOR 0lNTON TX PLUS 1� > DEPOSITS AND.CREDITS' FOR 3 a, 7Q201 LESS `£AI�1z\; ,SERVICE CHAROES FOA ns` sOp ': r �r`, , F5T •CREDIT ' f'OR .z 0 a. PLUS INTER EQUALS.YOUR BALANCE ONy,. ityB '; OF r X23°FQSh s Be t ; + + .TAX INFORMATIDN ttlr TOTAL INTERESI', ¢ARN¢O IN. TQe IS .4: 16 PRO¢ 1 OF, , YOUfl AVERAGE DAILY BALANCE FOR, PERIOD WAS' `If' 3}`i7+J I ' TOTACI INTEREST EAANW�THIS YEAR IS 1 OnPE J r`{ sI„ £< }\TNANS(,[�"I(ON oYS�t1pTJ0y \ ) s. ITNdkAYl�151 ANl a ' \pkP.QETE ! 1= +p< y IALANCE LAU STAIEH Ni iJRYJGk I­t INTF�EST CbEDIi 111 1� 1 �� � f79�0yL1 ti dAtANCE TJfIS STATEMENT ' 1. 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Y Y , ' l� fw�l:}� 1 �LS 1��" >Itv�� la V VL.I �l '+' ' Yla b��.fr �' l� (' } ,'- S3 00 1�1 0 8F1-%9 8 000 12-16,83 a O.0% 12-2 G OC 12 bi 1$S bbbSt 1'� b e� 9 abbe i2 1y $ 0049 i§ 2a;1�$'31I O bbb96 { i7 0§ 93x11. .,§ obr % 13-101 $� 'rli0 . 0b� i2 16 .$3 . , 000°�c 1�r7d $b 14 ;bob% Ir ; ..11. 11 12 9x4 $�,.; 6 ,bb ,bl l ��il...96*.. .. b,lrb h..... 1�42o^93x1 ... r.ob4 h 1§ 63 $3 s bbQb i2 1i $3 9 obo% 1 i9 $3 bbb° .2r$3 9 bbb9 6B $'3 $ 1060°% i! .13 $� 9 OCIb°10 12 2i g3 9 .006°x i2 2g A3 9 ,66bx „I., ,..Irr. rl,. i2 -ba 63 9 666 i7�1a' $� 6.6 6% i3 �3 $3 g 'bbb� 1�! 30 'B3 9 obb il1 ti2'�b''1-fr3 9 o'bb is�'i�'-'$3 9 obb i'�'=3 '-'$ 1 ' ....0-6b b°ir i2 'b'i�'s3 �.r,lbbb 1 { 51� � .:,:✓i ..rr r. q.'jM r ' 1111. Nr. ��'�. JERRY YOHN Ci9AWl1'ORD1P. ' � ATt`O�N1oY 041 WIOV MAIN 4UIY4i 140 1 4RWISViL4a, TLXA4 70047. 4t P'r March 5 , 198 MAID t Am ESC . E !ll ; i N 0 T I E There will be a ri6eting of the Board of Directors of ' Denton . 0,6unty Housing Vinance . Corporation on Monday,, March 1984 , at 100 p .m, in the Denton County Commissioner ' s Court , Room, 6.th Floor ,, Carroll Caurts Building, Denton $ Texato The .porpose,.of the meeting ; wil]. be to genes' ally discuss the propo6ed '1984 :single=fami3y 'housing bond issue I n 'the amount of $25 , 000 ,400 and to .receive a report froin Kirdder , , i Peabody regarding the bond rating Nearing . ` } f 1a s tf r F� R. iN t� a. t y M s, �r i r I � , h v p KUTAK ROCK & HUIE eel { ATLANTA DENVER OMAHA WASHINGTON, D.C. �Af� I HOUSING NEWSLETTSA NO. 14 ` w , Housing Finance May Esoape the IDS Axe As the Congrea ',eontinues to inch toward enactment of major tax Inc rease legislation, the housing finarve Wmmul,ity sa far has emorged relatively unscathed from the 'attack on other forms of tax-exem pt finance. Separate tax bills reported by the tax-writing committees are now awaiting floor debate in each house. The are the developments as the House and Senate proposed their tax bills for floor debate: s oI In a closed markup session on Wednesday, February 29, the 1-louse Ways and Means Committee reaffirmed the concessions made to the housing community last November in the eo'mntittee's unsuccessful effort to get a rule approved for debate j of the tax bill by the full House. While .agreeing to impose extended straight-line depreciation lives and tough new restrictions on arbitrage on all other IDHs the Senate Finance Committee { specifically exempted multifamily housing from the proposed changes to current law. ° Both bills endorse an e� tension of the single-family mortgage revenue bond program , with no new restrictions on the issuance of such bonds. ° The House Ways and Means ;Gommittee bill provides an -explicit authorisation for the continued use of certain federal guarantee programs in housing finance, despite Treasury Department opposition, o roved new limits on partnership syndications which could Both committees app severely limit housing syndications. 5 Special Status for MultifalURY Housing 'Under H,R. 4170 .71JGVlP.4 V.o. 2 On March 5, the Ways and Means Committee reported a major tax bill in-the form of an amendment to H.R. 4170, the tax increase bill which the House refused to consider last fall,, e part because of the IDS restrictions it contained. The new:amendment peorporates almost the IDS curbs originally contained In H.R. 4170 ; but also includes the exemption for multifamily housing train most of those curbs approved by the Ways and Means Committee last fall. l ' The ne�1N committee amendment provides: ° I � A sifie exemption for multifamily housing from the state cap on all other IDs. Spec sued under 103(b)(4)(A) of the Intarnal Revenue Code r, A S exemption includes hands is E i and I1(b) of the Housing Act of 1931. 0 Continuation of accelerated depreciation for IL)L-•financed multifamily housing. All i other IUB use would be subject to straight-line depreciation. 1 ° An exception . for both multifamily IDBs and 11(b) bonds from MRB 'arbitrage lllBs. restrictions which would be imposed on all other ) f r' l >1 i tion for bonds issued with certain federal o A specific authorization of tax-9xenp �# uaranteea. The, Treasury Department had reco„mu'Anded the elimination of newly f4 developed housing finanoa instruments which use securities guaranteed by t i Federal National Mortgage Association, the. Federal Fto,ne Loan 'Mortgage , Corporation and ,the (IOvern;nent National ,jjortgagb Association. The Committee amendment expressly permits "these financings to continue: The Ways and gleans plan also would continue the use of Veterans Administration FSLIC andaFDIC backed Adsninistratbr, guarantees for MRB-assisted mortgag „ { bonds would bE prohibited for all IDB-financed facilities. E ,I A 25 percent lii�,iit on the proceeds of an individual IDB which may be used to purchase land* o existing facilities purchased with IDS financing be rehabilitated A requirement that to ;'the extent of at least 15 percent of .:the cost of acquiring the facility. The ` rehabilitation expenditures must be made within two years by "the purchaser ni the facility, but need not be financed out of bond proceeds. ed The new Ways and Means propoultifamil clarifies housing "mixed faoilitiestcouldbee combined i with tax-exempt IDSs. Thus, both y ` in one building, but only the housing units could be financed with housing bonds. Multifamily Housing Exem ted From Most Senate IDB Curbs E roved exemptions for multifamily housing j on March 150 the Finance Committee app I finance from the two major new IDB restrictions in the Senate bill a Multifamily housing and the other IDBs which use ACRE benefits under current law I would continue to do so. Depreciation periods for other IDB projects would be extended. j ! ' 1 to housin bonds. j ltestriations to be imposed on arbitrage apparently would not apply E; I financed with IDBs would be su*ct to the Under the Senate biu, housing projects I following 'restriotions, both of which are substantially similar to enti-IDB provisions in the j latest version of 114 tt. 4170: _ The etc i hat ed. h % The use of FSI;IC and`Fp10 guarantees with IDB finance would be M committee ignored the Treasury request that the use of VNiv1A, FHLfAC' and GN,v1A guarantees In association with tax-exempt housing finance be prohlbited, but does g , not provide an exception for VA do FHA. j Che bonds of the District of Columbia and U.S. territories would have to comply ! with Section 1034 M As in`H.Et. 4170, these provisions would be effective retroactively. The !:chance Committee also approved a change in the depreciation period for all m 15,to 20 •ears, regar!ilass of the form of financing used. According that any struetures from Y i Finance Committue 'press! reloase of February, 28, however too low-income howling as defined change . with r6W et to ACRS deductions would not app y, , in section 1250(ea(i)(L).u, 'i'hat section of the Internal Revenue Code includes projects which 4 ti i 1 3 haves l , r o A mortgage insured under section 221(d)(3) or 236 of the National housing Aots 1 o At least 85 percent of units set aside for Sectlon $-eligible households; c Low-income rental housing as described to Section 167(k)(3)(b) of the Code; r o A loan made or insured under Title V of the Housing Act Of 3949. } Mortgage Revenue Bond Sunset Suspension Advances On Tuesdays=March 20, the Senate finance Committee approved a tax bill which extends the single family mortgage revenue bond program to December 31, 1987, with no new federal restrictions on eligible 'reo[pientS. �jejrnbers of the Senate sunset repeal coalition, led by f ` Senators William` Roth' (R-Del.) and George Nested b (Dthe Finance Committee staff were committee members that income restrictions suggested Y unwarranted. The committee's extension of the jARB program is one year shorter than that recommended by the Ways and Means COMM The Finance Committee plan would impose two new requirements on issuers of mortgage j 5 revenue bonds: o encies would' have to file "information reports" on Mlt6 issues and Housing ag programs With the Federal"Government. The infounced. n to be collected' ollected and the repository of the inforrnation has not yet been announced. a R o Governors and local officials would be required to release annual receded b� Public hearings--describing the policies to be followed k statement$-p 3 when dit�4ibuting loans from MRB proceeds. tional Mort a credit The coinmittee also endorsed Chairman Robert Dale's {R-1{an.) op gaff certificate '(N1CC) plan, which is already included in the House bill, Under the MCC program, state and'' local agencies could exchange some or, all of their authority to , Issue mortgage revenue ,bonds for authority to. issue 1ACCs to homebuyers )n�lieu of direct mortgage loans. The certificates would reduce mortgage interest costs 6y providing `a nonrefundable federal tax credit to the reoipient. The value of the ` MCC would vary from 10 `to 50 'pee issuer. of the recipient's mortgage interest. The percentage for each taxpayer would be set by he issuer. t between the two versions of the NiCC grog ram. Under differences bond, There are important dif n I the.Senate proposal, agencies would receive $20 million in`MCCs for every be 10o million authority surrendould restrictueligibility for vlCC$ to first-time homebuyers whose Income is at The Senate bill w Y s and Means plan imposes no j or'below the local median, adjustdd for fe a size. Individuals who buy homes with a income limit on recipients, but would limit purchase price less than 110 percent of the area average. s j .. Both bills provide that the authority to Issue ;ViCCs would lapse with the `sunset of single-family MRBs. The Ways and Means proposal—but not the Senate bill—would require that states with Veterans mortgage bond programs include such bonds In their annual allocation under the MRB a -3- l c { cap. In such states, each years iORB allocation would be reduced by the volume of veterans i bonds issued in the previous year. Staff members of the Joint Committee on Taxation and Ways and Vlaans urged committee members to apply the ;v1313`, cap to veterans bonds In order to control future growth in that program. Members of the Finance Committee did not follow the ' House lead, leaving veterans mortgage bonds out of the 11488 state cap, I � Both Tax Committees Attack Syndications While housing fared reasonably well in connection with the proposed changes in tax-exempt financing, both' ' tax-writing committees proposed tough Oestrictions on all f syndications, including housing. ; The new rules would: ° Require all members of a partnership to recognize, as income payments made by any partner in connection with the partnership when the payments are actually, made or { when the other partners accrue the liability. . Current law allows;partners to use { differing accounting methods and to defer tax liabilities by 'mismatchirig th', timing I of income and deductions. ° Expand the original issue discount rules to include notes exchanged for piop&ty. ! Therefore, recipients of such notes will be required to recognize as income periodic Interest payments, evert though actual cash payments are not received. { While the Finance Committee version of the first rule includes an axe'inption ` forl I lowAncom.e housing, it is the second rule which carries the most severe impact for low=income housing, hese changes could significantly hamper current methods of flna�lelniz low-income G housing projects because it would be difficult to generate income sufficient to . encourage investment. The 'first change is effective for accruals after 1983, except for certain interest which must have been accrued prior to September 29, 1983, The second change is generally effective il, after December 31, 1981" The Calendar for Consideration Senate i ' ate lnanee Committee Chalrinan bole wants the Senate to consider his o „mittee's o. m � f piss ;the week of April, 1 but eonsrderetiori of the bill may be delayed While a parliamentary prpiilem with the method by which he wishes to consider it is solved. House action on the: Ways ► and Means.CoiAw tee amendment .to H,R6 4170: is expected to occur during the week of;A While both tax plans are likely to engender lively debate, there is a strong possibility that i they will be passed by each house by the time the Congress recesses April 13 for Easter and ? Passover. The !Host serious jeopardy to the enactment of a tax bill lies in the. House, where a r rtiw division about .how deeply to out defense spending as part of 'a deficit reduction , a r. ► presently pa program could if.unresolved lead to a rejection of a tax increase bill TPie odds resent! favor finAl;congressional action on a tax bill, including a conference to resolve the differences between the two bills, by rnid-May. j March 30, 1984 C `a_ r f L . - - { Chapman and Cutler ' Draft of March 9, 1884 WPC 17/SLC/390872-&/020784/2000 PRELIMINARY OFFICIAL STATFMENT DATED f 1989 Ratings NEW ISSUE Standard do Poor'ss (See "Rating" herein) 4, 1 In the opinion of Bond Counsel, under existing :statutes, regulations, { published rulings and judicial decisions, interest on the Bonds is exempt from all present j federal income taxes, assuming compliance with certain conditions imposed by the ' Internal Revenue Code of 19540 as amended, as described under "Legality and Tax ,y Exemption" herein. $25,850,000• DENTON COUNTY HOUSING FINANCE CORPORATION } Benton County, Texas Single Family Mortgage Revenue Bands, Series 1984 J. L Khdak Mortgage SerAee Corporation - Administrator r E: Date& March 10 1964 Duet March t and September 1 Ir as shown below s 1 Interest on the Current Interest Paying Ponds is payable March 1 and " September 1 of each year, commencing September 1, 1984. The Bonds are being issued only as* fully register, d bonds In the denomination of $51000 for Current interest Paying Bonds and in $5,000 maturity amounts, for .Compound Interest Bonds or In integral multiples thereof. InterFirst Bank Fort Worth,' N.A., Fort' Worth, Texas, is the Trustee r and paying agent. The Bonds are subject to redemption prior to maturity' on the terms described herein.' It is pkpected that.a portion of the Bonds will be redeemed without , premium prior to their respeotive stated maturities, SUMMARY OF MATURITY SCHEDULE CURRENT INTEREST PAYING BONDS COMPOUND INTEREST BONDS Ir � k , , .. . ..a ... ,.+arc y 1•,, ... .ti:: „ .,,. -... .. '.:;; ,. ,. - i. ' , , �' : I urahase from Pirtle lenders provide funds to P ied one The Bonds are rued to P eligible borrowers ' finance icasexoluding those ' Loans that have teen. thous g k mortgage fan" residentiei housing within Denton County, e t unit single e Cities of Dal16�s, piano and Carrollton Carrotiton looated in Denton Courity)• nonce t 'k i portions of the ousing Fi The Bonds are limited OlIgations of the Denton Count ipts and rftouraea I! "corporation") payable solely from the revenues, E ' Corporation Zthe under the lndrnture, ind.btedne" obligation o Corpo not from any other 14 of i, of the Corporation pledged and do not aonet'itute an political corporations or is of the Corporation, or other municipal or,po Qen 'Count (or my other eitti+ county, or a loan o! oredit of any o! r o! Texas) a' of the St' o! Texas, visions• '� Corporation subdivIsIons of the $tat4 ccnstitutiont_l or statutory pro them, within the meaning o! any has no tazing Pourer. E V, d if Issued and received by the Underwriters, and when, as Morrow, Dallas+ The Bonds are. offered Dumas, Huguenin, Boothman subject is the approving opinion of tax , emption. Certain iegal matters will be si as to 'vatidity � o llltnois, `Counset to 1'exas�, to a Unclerwr'it �r,7'1y Chapmatn and Cutlsr, Chicdig , or delivery in New p cte<s that the Bonds will De avuiiabte f i the .Underwriters. It is exps 1989. York, Now York, on or about March �+ s ., First Southwest Company Hidderd r` Led Co. lx IYLurCh 1984 �Y r= Gated r i X J *Subject to change r L ` , r r MATURITY SCHEDULE s` w Current intimst Laying Bons Serial Bonds 1 r, Price (Pereent bf , C Interest Principal Amount + Maturity Amount Rate - — ----� March i, • : . . . . . . . . . . . . . . 1 September It , . • . . . • t . March Is # , too , f " September'1, . . . . • • • • . j ` Mash it September 19 , . . . . . . . • . . . Mash 19 • . . . . . . . . . . . . . . . . . . . 4 Sept0Mber:l► • . March 1, . . . �'• 4 • . . . . . . . . . 4 . . . . • . . . September 1 March 1, . . . . . • . . . ;;. i September 19 • . • , • . . . . . . • E March Is . . . o • + ' September it • . . . . . . . . • . . • • • 1 . • • . March 1, • • . : . . . . . . . . . . • , . . . . . . . . September I, . . • . : . . . . . • Is . . . . . . ; 1 : % Term Bonds Maturing March It at 96 added Arued interest, if any, to be 1 cc J. �----- - Compound Interedr 90n& It Original principal Amount I I Purchase Price F Per 511000 Yield to Total at Maturity Maturity Mat rit I March it . . . . . . . .,. . . . . , . . . . . . . x September It March 1, . • . . . . . . • . . . . . . . September ,i, • . . . . . . . . . . . . . . . . . . . . i Match i • . • . . . • . . . . . . . . . . . . . September Is • . . . . . . . . . . . . . > . . . . . Math 1, . . . . . . . . .'. . . . . . . . . . . September 1, . . . . . . . . . . . . . . . • . i Match i, 4 Is so so to 1 • . , { September 1, . . • . . . . . . . . . . . . . March 1, . . . . . . : . . . . September It . . . . . . . . , . E y ( `fl '', 1 I i No dealer, broker, salesmen or other person has been authorized by the Corporation or the Underwriters to give any information or to make any representations r other than those contained in this Official Statement, and, if given or made, such other Information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there by any sale of the Bonds by any person In any jurisdiction In which It is unlawful for such person to make such offer, solicitation or sale. The Information set forth herein has been obtained from the Corporation and other t " sources which are believed to be reliable, but It is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Underwriters, The Information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any' sa.le made hereunder shallp under any circumstances, create any Implication that there has been no change in the affairs of the Corporation or any other parties described herein since the date as of which such Information Is presented. IN CONNECTION WITH THIS , OFFERINGt THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WMCH STABILIZE OR MAINTAIN THE MARKED' ORICL OF THE BONDS OFFERED HEREBY AT A 4E 7E16 ABOVE THAT WHICH MIGHT OTHERWISE PRI~VAIL IN THE OPEN MARKET. SUCH STABILIZINGo IF j COMMENCED0 MAY BE DISCONTINUED AT ANY TIME. ; j TABLE OF COWtZNTS f I Pa a .; Summary Statement . • . • • . . . . . • . . • . • . . . . . . . , , fi Introduction . . . . . • . . , , • • r � • , i • , • • , � • . , • • • , � � . . , . . , . , � . , . . . . , • • 1 111( The Corporation . , •. • , , , . • , • . . ,. • . . . „ • . . . . . . . . • . . , . , • , , . • , . . , • . , 3 Sources and Uaes of Funds , 4 Seoparlty for the Bonds . . . . . . . . . , • . , • , . . . . . , . • • , . • , , • . . • . 0 , , , . . • . 6 `$ r The Bonds I Certain Assumptions as to Revenues, Cash Flow, Debt ; Service and Program Expenses , . . • . , , , • , , . • . • , , 12 The Program 14 , The Participants . , • . . , . . . . . • . , . . . . . . . • . , • . , . • . . .. . . .., . • , , , . , .• • , 19 r% i i The Administrator . . . . . . . . . • . . . • • . . • . . . , . � , , . . . . . . . . . . � , . . . . , . . �2 t Insurance . . . . •., , , ,. , , , , , . . Y , , , , , , , , , , , , , • • , •'4 , , , . . . . . . , , 1 • . 6 , . 23 ;{ ` Summary of Certain Provisions of the Agreement . . . . , . • , , , • 1 , , , , • 1 0 4 29 Sum maryof the Agreement , • , , • , . • . . , • : • : , . , , , , , • , , • . • 14 , , • 6 . . o , 36 s Summary of Certain Provisions of the Indenture . . , . . , . , , , , , , , 46 r Legality and Tux Exemption , . • • : • • . , 64 i. Absence of Litigation . . . , , . , , . . . . , . , 0 , . , , . 66 Uriderwriting : , . , , . , , . . . . . • • s , . , , . . . . . , . � . , : . . . . : . . . • , . , , 68 Rating 66 Certain Verifications . . . . . . . . . . . . . . • . . . . : . . . , , , . . . • , . . , , . . 67 Additional Information . . . . • . • . . . , , • • . . . . . , , . . . . . . . 67 Appendix A--Study of Potential. Demand For Single Family � Mortgage Funds E I � rir � r� R� P 1 ! I P ) i ' SUMMARY STATEMENT (Subject to additional and more complete information as set forth in this Official State- r ment) } Certain capitalized terms appearing in this Summary statement have the meanings set forth under "Summary of Certain Provisions of the Agreement--Definitions" In this Official Statement. The Bonds The Bonds are being issued In the form of Current Interest Pe.ying Bonds and , Compound interest Bonds as shown on the cover page only as fully registered bonds in the denominadon of $5,000 for Current Interest Paying Bonds and In $5,000 maturity amounts fur Compound Interest Bonds or any integral multiple thereof, In the aggregate principal amount of $261850,000*. The Bonds may be transferred without charge at the office of the Trustee as more fully discussed herein. Of the proceeds of the Bonds and In Program Participation Fees collected by the Corporation, w{ll b deposited into the Acquisition Fund which will be used in purchas- i in(; Mortgage Loans from pnrticlpating lending institutions; $ will be > deposited into the Mbrte age Reserve fund to fund the Mortgage Reserve Fund Requirement; and $ will be used to pay costs associated with the issuance a of the Bonds> including Underwriters'discount. Security The Bonds are limited obligations of the Corporation payable solely from the j revenues, receipts and resources of the Corporation pledged under the Indenture and not j from any other revenues, funds or assets of the Corporation and do not constitute 'en ? Indebtedness or obligation of Denton County (or any other city, county, ° or other municipal or political corporations or subdivisions of the State of Texas) or of the State or Texas, or a loan of credit of any of them, within the meaning of any constitutional or s statutory provisions. The Corporation has no taxing power. i Redemption of Bonds I The Bonds are subjent to redemption without premium prior to maturity at the times described herein, Including (a) sinking fund redemption of Term Bonds and (b) special mandatory redemption In whole or In part from prepayments on the Mortgage Loans, undisbursed Bond proceeds reserved for the purpose of purchasing Mortgage Loans and moneys reealvod from certain other sources. It Is anticipated that a portion of the Bonds may be redeemed without premium prior to their scheduled maturity or sinking *Subject to change -fi- 1 � a tt I � I fund redemption dates pursuant to the special mandatory redemption provisions provided rr , by the Indenture. i ! The Mortgage Loan Program The'Bonds are being issued by Denton County housing Finance Corporation �+ to provide funds to purchase certain conventional Mortgage Loans secured by mortgages on one unit owner-oodupled residential housing located In Denton County, Texas. Each Mortgage Loan will bear interest at the rate of % per annum; will be for a term o,1 30 years; Will be made to a Mortgagor who is a First Time hom.ebuyer who Intends to occupy principal 9 Y exceed ` the residence as a` rinaf aI residence and whose Adjusted Family lncomo does not ex 4 544,7001 and will be secured by a Mortgage Loan on a Residence having an Acquisition Cost not in excess of 110% of the Average Area Purchase Price. The current Maximum Acquisition Costs determined by the Corporation area $112,420 for new one-family residences and $1051820 for existing one-family residences. See "The Program I ' Mortgage Loans" herein, Mortgage and Property Insurance With respect to the Mortgage Loans, there Is required to be maintained Insurance as follows: (1) On each Mortgage Loan having a principal balance in excess of $096 Of the lesser of the Sales Price or appraised value of the property, private mortgage Insurance to be paid for by each Mortgagor In an amount such that the uninsured portion of the Mortgage Loan does not exceed 7296 of the lesser of the Sales Price or appraised value of the mortgaged prop- t arty, Mortgage Loans having a loarr-to-value ratio of 80% or lass will not I be required to be covered by private mortgage Insurance. ' (2) Mortgage pool Insurance covering 10096 of all losses by reason of defaults by Mortgagors up to a pool limit equaling 20% of the aggregate !? maximum principal amount of the Mortgage Loans, to be paid for by the Trustee from Revenues of tho Program, {; With respect to Residences, there Is required to be maintained insurance as follows! (1) Standard hazard insurance with extended coverage to be paid for by each Mortgagor in an amount which is not less than the maximum E insurable value of the property securing the Mortgage Loan or the unpaid principal amount of the Mortgage Loan, whichever is less. (2) Special hazard Insurance, with a policy limit of 1% oi` the i aggregate Initial principal amount of Mortgage Loans to be originated and _ I F -Iii- :, t { If i purchased or twice the initial principal amount of +' Z largest Mortgage Loan, whichever Is greater, covering certain othery . a uninsured hazard j risks and co-lnsuranoe losses to be paid for by the Trustee from Revenues of the Program. t Participants The Mortgage Loans will be originated by eleven lending institutions doing business in Denton County, Texas. In originating Mortgage Loans, these Participants will f be required to utilize underwriting and .servicing Criteria set forth in the Sale, Servicing and Administration Agreement, which incorporates the FNMA and V14LM sellers' guides, the FNMA servieers' guides and current industry standards. The Participants have severally agreed to use their best efforts to sell to the Corporation, within 16 months of delivery of the 13onds, Mortgage Loans in the amounts allocated to them. Administrator J. I. Kislak Mortgage Service Corporation will serve as Administrator and as Fs such will have general responsibility for administering the Corporation's Single Family Mortgage 1'urehase Program. The Administrator's responsibilities will include certain obligations. to monitor (i)'the origination and servicing performance of the Participants, IE (li) the remSttanee of .payments made with respect to the Mortgage Loans and (iii) the submission of reports pertaining to moneys remitted o the Trustee by the Participants. The ,Administrator will also be required to assume or assign the responsibility for for {{f Corporation! servicing Mortgage Loans` n! any Participant that is terminnted by I failure to properly service Mortgage Loans. 1 i Tax Exemption i The exemption from foderal income taxation of interest on the Bonds is dependents in part, upon continuing compliance with Section 103A of the Internal Revenue,Code of 1964, is amended (the "Code"). The Corporation believes that it has } established procedures to comply with the requirements of Section 103A of the Code but . i no assurance Can be made regarding compliance with such requirements. See "Legality and Tax Exemption" herein. 1 i I investments ' I pursuant to an investment Agreement with , the moneys in the I various fonds and accounts established under the indenture wild be invested at rates i ranging from _96 to A6 per annum, I E -lv- r M f i OFFICIAL STATEMENT ; w #25,850,000' llENTON COUNTY HOUSING FINANCE CORPORATION Single Family Mortgage Revenue Bonds, Series 1984 J. 1. Kislak Mortgage Service Corporation—Administrator INTRODUCTION 1 This Official Statement sets forth certain Information relating to the sale'by +, Denton County Housing Finance Corporation (the "Corporation") of $25,960,000* aggregate pr#na#pal _amount of its Single Family Mortgage Revenue Bonds, Series 1,984 ,5 (the "Bonds"), which are being Issued In connection with the Corporation's Single` Family Mortgage Purchase Program (the "Program"), The Bonds are Issued pursuant to authority contained In the Texas Housing Finance Corporations Act, Certain capitalized terms used in this Clffin',al Statement have the meanings set forth herein under the caption "Summary of Certain Provisions of the Agreement--Definitions. The Bonds are being issued pursuant to a Trust Indenture, dated as of s March 1, 1984 (the "Indenture"), between the' Corporation and lnterFirst Bank Fort Worth, N,A., Fort Worth, Texas, as trustee (the "Trustee"), to provide funds to purchase mortgage notes and related mortgagee (the "Mortgage Loans") secured by first mortgage [j lions (subject to certain permitted encumbrances) on owner-occupied, one family rest dances (the "Residences"), within the boundaries of Denton County (the "County") excluding those portions of the Cities of Carrollton, Dallas and Plano located In the County (the "Eligible Loan Area"), to make deposits to certain reserve funds and to pay e Bond Issuance expenses and certain other costs. Pursuant to separate but Identical Sale, Servicing and Administration Agreements, each dated as of March It 1984 (the "Agreement"), among theCorporation# � the Trustee; J, Is Kislak Mortgage Service Corporation (the "Administrator") and certain lending institutions (the "Participants"), each Participant Is obligated' to use Its best c efforts to enter into firm commitments with Eligible Borrowers, as defined In the Agreement, within 12 months from the date of delivery of the Bonds and to originate and sell to the Corporation Mortgage Loans within 18 months from the date of delivery of the Bonds in the allocated amounts shown under the caption "The Participants." The aggre- gate amount of such allocations will be $261000,000*, Each Mortgage Loan must have a � term of 30 years and must, among other things, be for the permanent financing of the f *Subject to change i 3 -1r i i r 1 purchase of a Residence or for the take-out of a construction loan in connection with a p urchasee which is located within the Eligible Loan Area and Is to be occupied by an Eligible Borrower. No Mortgage Loan made to finance the take-out of a construction loan will be purchased until construction has been completed. The financing of trailers j and mobile homes is prohibited. k The amount of any Mortgage Loan must conform to the eligibility and credit underwriting standards specified In the Agreement and the applieat � limitations of the private mortgage insurer as of the closing date of the Mortgage Loan. The maximum G price of a Residence financed under the:'?rogram may not exceed 110 of the average price of residences located re full dtescr(ibed Iunder"The�Progrtam--Mortgage Loans." In ,f County is located, all as m Y er under the Program, the Adjusted Family Income order to qualify as an Eligible Borrow of the Eligible Borrower, which Includes the total of the adjusted gross ens rots d g t riding to or such more recent year for which a tax return has been flied, of all persons rote i 4,700. In addition, the Eligible reside In the Residence, must not have exceeded $4 Borrower must be a First Time Homebuyer who intends to occupy the home as his or her p principal residence within 60 days after the final closing of the Mortgage Loan. f Under the Agreements the Administrator Is responsibld for reviewing the Mortgage Loan documents submitted by the Participants to determine that each Mortgage Loan submitted for purchase meets the ff t guidelines rmined that Program, Is monitoring the performance of the participants. not setdoing Mortgage Loans In compliance with the„terms of the Agreement, such he Corportios Participant may be terminated by t servt edaby nsu hi Participant ew lln beoassumedj o of the Mortgage Loans previously asstgned by the Administrator. pursuant to the Agreement, each Participant is appointed as the servieer of i the Mortgage Loans which it originates, subject to an optional or mandatory assignment of Its servicing rights and obligations to another Participant who consents to such ► assignment as more fully described under "Summary of Certain provisions of the Agree ment-�-ServtoIng of Mortgage Loans.” Brief descriptions of the Corporation, the Bonds and the Program, together with summaries of certain provisions of the Indenture and the Agreement, follow In this Official Statement All summaries herein of documents and agreements are qualified In ` their entireties by reference to such documents and agreements, and all summaries c, herein of the Bonds are quadithe In herein with trespect ref0enee to the. forms hereto Included in the afore- Included t Included in the Indenture an p 1 said documents and agreements, copies of which are available for Inspection at the offices of Kidder, Peabody do Co. Incorporated, 10 Hanover Square, New York, New York � . and First Southwest Company, 800 Mercantile Bank Building, 'Dallas, Texas. AL i ' 1 i { r � i R 1 F 11. I l ; h THE CORPORATION i The Corporation was incorporated January 17, 1980 as a public nonprofit corporation in accordance with the Texas Housing Finance Corporations Act, Article i 12891-7, Vernon's Annotated Texas Civil Statutes, as amended (the "Act"). Under the Act, the Corporation is authorized to issue its bonds for the purpose, among others, of purchasing home mortgages. Pursuant to the Act, the aggregate principal amount of such bonds Issued by the Corporation In any calendar year may not exceed the total of (a) -i the costs of issuance of such bonds, any reserves or capitalized interest required by the resolution authorizing such bonds, plus any bond discounts, and (b) the greater of (t) $20,0001000, (11) a figure determined by multiplying $150 times the population of the ' County, or (lit) an amount equal to 25 percent of the total dollar amount of the market demand for home mortgages wfthln the Eligible Loan Area as determined by the i Corporation. The proposed principal amount of the Bonds is less than the maximum amount that may be allocated to the Corporation pursuant to legislation enacted by the Texas legislature in 1981 (Article 12891-8, Vernon's Annotated Texas Civil Statutes), Providing the allocation in Texas of the "State Ceiling" provisions of Section 103A of the ' Internal Revenue Code of 1654, as amended ("Section 103A"). The Corporation commissioned a study of the potential demand within the Eligible Loan Area for single I i Tamil residential mortgage funds within the Corporation's guidelines. Such study is 1 attached hereto as Appendix A and should be read to Its entirety. l The Corporation has previousl y Issued $24,865,000 Single Family Mortgage Revenue Bonds, Series 1980, of which $23,"75000 are presently outstanding, and $26,860,000 Single Family Mortgage Revenue Banda, Series 1982, of which $13,785,000 I are presently outstanding. The Corporation has no experience in originating, 8�!rvieing or administering mortgage loans of any type. To enable the Corporation to administer Its Program for i purchasing Mortgage Loans, the Administrator has agreed to monitor and supervise the origination, sale and servicing of the Mortgage Loans by the Participants, and the Participants have agreed to originate and sell the Mortgage Loans to the Trustee on behalf of the Corporation and, subject to assignment thereof as caption � described under the `€ ption Summary of Certain Provialons of the Agreement," to service the Mortgage Loans each originates for the Corporation, The Participants have agreed periodically to transfer Mortgage Loan payments to the Trustee. The Corporation will have no responsi- bility with respect to originating or servicing the Mortgage Loans or the collection, transfer or payment of any moneys derived from the Mortgage Loans, The Board of Directors of the Corporation consists of eleven Directors, who ' are appointed by the governing body of the County, The Directors are removable by the governing body of the County, for cause or at will, and voting member Directors may not be appointed for a term in excess of six years. Directors are eligible to succeed them- f selves. The present Directors, whose terms expire as Indicated, area i i C { j ' , Name Term Expires Jerry John Crawford, President . . , . . , . . , . • • , • • December 31, 1982 Chris Hartung, Vice President . , . , . . . . , . August 9, 1987 Buddy Cole, Secretary , , , . . • • , December 31, 1987 3 Jack Barton . , . , , , . , August 9, 1987 s Wallace Batey i 1, , , . 0 0 . , 4 . . , . . . . . December 31st 1987 Mark Chew . , , , . , August 9, 1987 Sandy Jacobs , . . . . . . , . December 319 1987 Dr6 A. Ray Stephens 6 1, 1 . . . , , . August 9, 1987 B. E. Switzer . . . . . . . . . . . . . . 0 . . . . 1 , , . , December 310 1987 Richard Tallaferro 4 . . August 90 1987 Lee Walker . . , , , . . December 319 1987 SOURCES AND USES OF FUNDS* The sources and uses of funds, exclusive of accrued interest, are estimated to be as followas t Sources of Funds► i l` Proceeds of the Bonds . . . . . . . . . . . . . . . . . . . . . , 4 0 a 4 6 1 0 • 0 . , . t25,850,000* Program Pfa *cipation Fees from Varticlpants . . . . _ (1) TO}lrti.4 AEI , . .. 6 , 1 4 , 1 . . 1 : . , , . ,,.. . , . 1 , .. . , 1 0 , , , , . , . , Uses of Funds For the purchase of Mortgage Loans . . 6 4 . . • • • • • . • 4 • • • 4 • • • Mortgage.R.yeserve .Fun , . . , , . ,. : 6 6 1 4 , . , , , , 0 , 1 4 . , , , , 0 , . , .Interest Account . . . . . � . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Program Expense Fund . . , , , 0 0 1 F . , . # , , , . 4 6 , . , . , 4 d 4 . . 1 . 4 , �(2) a Underwriters' discount . . . . . . . . . . . . . • • • • . A 1 • • , , • 0 • 1 I • • • • _ f t TOTAL , 6 0 6661 . 6666 , . , . . . . 16 . . . . , , , . a m.�.... (1) Each Participant has deposited with the Corporation aanonrefundable Program i �' .. Participation Fee equal, to 3-1/296 of the amount of its allocation for a total of Amount deposited in the Program Expense Fund will be used to pay certain costs associated with the issuance of the Bonds. r � � *Subject to change .4r N a SECURITY FOR THE BONDS r , General i� The Bonds are limited obligations of the Corporation payable solely from the revenues, receipts and resources of the Corporation pledged under the Indenture and not from any other revenues, funds or assets of the Corporation and do not constitute an Indebtedness or oWiaadon of the County (or any other city, county, or other municipal or polltical iiubdivlsion of the State of Texas) or of the State or Texas, or a loan of credit of r any of them, within the meaning of any constitutional or statutory provisions, The Corporation has no taxing power. Pursuant to the Indenture, the Bonds are secured by an assignment and pledge of and security Interest in (I) the unexpended proceeds of the Bonds, (11) all Mortgage Loans and the Income therefrom (including all insurance proceeds with respect to the Mortgage Loans), (iii) the Corporation's rights and interests In the Agreemett a;id (lv) all moneys and securities held under the Indenture, Including moneys in the funds and aocotints created pursuant thereto (excluding certain moneys representing Excess Investment Earnings, It any, required to be remitted to the United States Government In accordance with the Indenture). See "Summary of Certain Provisions of the indenture," The Mortgage Loans will be secured by first mortgage liens (subject to certain permitted encumbrances) on one family Residences. With respect to each Mortgage Loan there is required to be maintained the insurance described herein under r the caption "Insurance." The terms on which Mortgage Loans are made must meet or exceed pertain criteria as discussed herein (see "The "Program"). The Mortgage Reserve Fund has been established under the Indenture as a reserve to assist in payment of princl- pal and interest Installments In the event the flow of revenues with respect to the j Mortgage Loans proves to be temporarily insufficient. Each Participant has deposited s with the Corporation a Program Participation Fee equal to 3/1-295 of the principal amount of the Mortgage Loans the Participant is to originate under thu Agreement. In the event of non-origination of Mortgage Loans, the Program Participation Fees, together with anticipated Investment Income earned In the funds and accounts held, by the Trustee, are calculated to provide sufficient funds, along with unused Bond proceeds, to enable the Corporation to redeem Bonds, If necessary, In accordance with the speaixl i mandatory redemption provisions of the Indenture, However, should one or more of the other assumptions described under "Certain Assumptions as to Revenue, Cash Flow, Debt f Service and Program Expenses" prove to be substantially inaccurate the Corporation may be unable to make full or punctual payment of debt service on the Bonds. The remedies available to the huiders of the Bonds, upon an event of default o i under the Indenture or other documents described herein and policies of insurance i referred to herein are in many respects dependent upon judicial actions which L?e often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code, the remedies specified by the federal bankruptcy code, the Indenture and the various program a i 3 t i 1 � i { 4 ' documents and policies of Insurance refs,;°red to herein may not be readily available or may be limited. The various legal opiniory€ to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, Insolvency or other similar laws affecting the rights of creditors generally, I i Revenues ( ' Amounts received by the Trustee on behalf of the Corporation with respect to any Mortgage Loan, the Agreement or any policy of Insurance in connection with any Mortgage Loan, 'inoludi.ng scheduled payment^, of principal and interest on Mortgage Loans, prepayments tad all interest (except Excess Investment Earnings, If any, as here- inafter described) derived frorx amounts he)d In any fund or account established pursuant to the Indenture, constitute Revenues pledged to payment of the Bonds.- Revenues do i not, however, Include Escrow Payments, amounts retained by the Participants as late ! charges, Service Fees and other permitted fees. All Revenues, except as set forth In the Indenture, will be deposited in the Revenue Fund and applied monthly in the manner and for the purposes set forth below: (1) First, to the Debt Service Fund, as follows: (a) all Principal Prepayments to the Redemption Account tow, use In the redemption of Bonds under the special mandatory redemption provisions of the Indenture; (b) one-sixth of the amount of Interest due on the ` nett lntereat payment date to the Interest Account, except as u provided In the Indenture for the first such payment date; and (o) commencing six months prior to the first principal payment date and sinking fund payment date, respectively, one-sixth of the principal amount or Compounded Amount (as hereinafter defined) of. Bonds s, maturing or scheduled for sinking fund redemption on the next principal or sinking fund payment date to the Principal Account, except as provided In the Indenture for the first such payment date; , (2) Second, to the Special Expense Fund, to pay Program expenses for insurance premiums and to pay fees and expenses of the Administrator; (3) Third, to the Mortgage Reserve Fund to the extent required; 1 f i ;P 3 j i 1 fees and (4) Fourth, to the Program Expense Fund, to pay i k expenses of the Trustee and any eo-paying agent, and an amount not to exceed $59000 Per annum to pay or rehLiburse reasonable and necessary fees i► �, and expenses of the Corporation in connection with the Program; and E (5) Tho balance to the Redemption Account in the Debt Service j 4 Fund. 3 + I Mortgage Reserve Fund The Indenture creates the Mortgage Reserve Fund ank. requires that It contain, during the origin ation Period, an amount at least equal to 96 of the amo��nt of the Initially deposited In the Acquisition Fun ending nstout tendin an as ofamount 1 tdequal t aof calculation ! unpaid principal amount of all Mortgage g ! (the "Mortgage Reserve Fund Requirement"), The Mortgage Reserve Fund initially will roeeeds or Program Participation Fees to the an.ount set forth from Bond Reserve be funded I? �� he Mort e R under the caption "Sources, and Uses of Funds", Any moneys to t gab' k` ' I Fund in excess Hof the Mortgage Reserve Fund Requirement on and after August ,1, 1985 i shall be transferred monthly to the Revenue i''und. R In accordance with the Indenture, moneys in the Mortgage Reserve Fund shall be used only for the following purposes: (1) To pay the principal of and interest on the Bonds when certain other funds are not available therefor pursuant to the Indenture; � (2) To make up any deficiencies In the Special Expense Fund and , the Program Expense Fundt and (3) To redeem the Bonds in accordance with the Indenture (see ItT'he Bonds--Redemption Provisional'), j Moneys in the Mortgage Reserve Fund shall be used -to pay prineipal and bt Service Fund and any advance claim I eat on the Bonds only after moneys In the lUp; n have been pay described herein 1 Insurance Policy payments received under the Mortgage Poo f• exhausted. gxceas Investment Earnings Under the Indenture, the Trustee is directed to act aside in a spacial amitnt I rvfe all Excess investment Earnings, If any, regaired to be re In the Debt Service Fund ec mitted to the United es government In accordance with Section 103A of the Code and to pay , such investment earn;ngs to the United States of America not less frequently than once each five years following the date of delivery of the Bonds in an amount equal to 9046 of K the aggregate Excess Investment Earnings earned during such period (and not theretofore paid to the United States of America), and, 100% thereof not later than 30 days after the final payment of the Bonds, »7- 's i THE BONDS i Description of the Bonds The Bonds will be dated, will bear Interest at the d inside front ico ertof this the dates and in the amounts set forth on t a able semiannually an, r�larch and Official Statement. The Serial Bonds and Term Bonds (Q011eatively, the "Current Interest i Bonds") will bear interest from their mbersIt 1984. The Compound interest Bonds Pay n$ year eommenaing Sep September 1 of each y or redemption at the rates per annum which provide -the ; Will be payable at maturity ended' amounts set forth below The "Compounded Amount Oar each March l and �f Compound interest Bon'rs" at the nompound interest yield from the compounded'1 Is specified Undar "Compounded Amounts of Comp , ! i984). The Compounded Amount includes both below and is based on semiannual .compounding l date of issuance of such Bonds (March __, the. principal amount of a Bond and Interest accrued thereon to the Indicated de denomination of The Bonds will be issued as fully registered bonds, in th =6,000 for the Current interest Paying Bonds and in $5,000 maturity a oruredefmption Compound Interest Bonds, or any integral maitlple thereof. Thep p Bonds and the Compounded and payment e l prise of the Current Interest paying at the offices of the Trustee, . Compound Interest Bonds will be payable the Trustee to the i the SntOrest on each Current Interest c check oridraftt mailed lto such registered owner thereof registered owner of such Bond by istration books, at his address as it appears on the reg Compounded Amounts of Compound intest Bonds Compound Interest Bands, the Compounded Amount (Which includes k For the Comp per 81,000 of` maturity amount, bath the p rinclpal aniount and accrued interest) p shall be as set Earth belaws x Compounded Amount for Compound interest Bonds Maturing i ( 4 i .a� k } � t 1_ I j Com ounded Amount for Cotnpaund_Interest_Bonds Matures I Mar. 19 Sept. f, Mar. 10 Sept. 1, Mar, It Sept. 1, Mar. 1, Sept. 10 Mar, 1, Sept. '1, f Date _ Max. Map r, 1 a Sept, 1 Max. 1 Sept. i Mar. 1 Sept. l Mar. 1 Sept. 1 Mar. 1 Sept. 1 E << I Redemption Provisions i Spqolal Mandatory Redemption: = The Bonds are subject to special mandatory redemption in whole or In part on the dates described below at a redemption price equal to the principal amount of the Current Interest Paying Blinds plus accrued interest to the redemption date or the Compounded Amount of the CGmpound Interest Bonds to the I redemption date, from and to the extent there are moneys In the Redemption Account i ` ` deposited therein from the following so u rces:_ (1) on September It 1985 from moneys in; the Acquisition Fund which have not been used to purchase Mortgage Loans within 16 months after the date of delivery of the Bonds; (2) on September It 1984 and on each interest payment Qate thereafter, from moneys oWdeposit in the Redomptlot,t Account, including certain investment, earnings and Principal Prepayments of Mortgage Loans (including prepayments attributable to insurance proceeds relating to, and i 1 liquidation of, Mortgage Loans), In additionp at any time the sum of moneys in the, Mortgage Reserve. Fund � and the f)ebt Service Fund equals or exceeds the principal amount of the then outstand� ing Current interest Paying Bonds, plus accrued interest therein and the Compounded Amount of all Compound interest Bonds, In each ease to the nr#xt earliest redenlpHon date of the Bonds,' and all fees and expenses of-the Trustee•and Administrator, the Bonds will 'be redeemed from such moneys on the next Interest payml�nf date'ln whole at a redemption price equal to the principal amount thereat pins adorued interest or the Compounded Amount, as the case may be, to such redemption date, 3 d s : : Y 1 Bscause the Bonds are subject to special mandatory redemption as aforesaid, It is expected that a �;yottlon of the Bonds will be redeemed without premium prior to their stated mataritles or ,sinking fund redemption dates. For a description of the uncertainties Inherent Iii predicting the avensge life of the Mortgage Loans (which In turn affects the effective average life of the Bonds), see "Certain Assumptions as to i Revenues, Cash Flow, Debt Service and Program Expenses--Redemption of Bonds Prior ' to Maturity"' i Optional Redemptiono Bonds maturing after March 1, ,, are subject j to redemption on March 1, ' or on any Interest payment date thereafter, at the option of he Corporation, In whole or In part, and by lot within a single maturity, from << moneys derived from any source, at a price'_ equal to the principal amount pr the then Compounded Amount of the Bonds so called for redemption, plus the premium set forth r' below (expressed as a percentage of the principal amount or Compounded Amount of the Current interest Paying Bonds and the Compound interest Bends, respectively) so called for redemption), plus accrued interest on the Curren; interest Paying Bonds to the i redemption date: Redemption Dates Redemption Premium r I March 1, and September 1, March 1, and September 1, _ 2% March it and thereafter 0 Method of Redemptions All special mandatory and optionol redemptions of less than all Bonds she l be applied on a proportionate basis to all the outstanding maturities',of Bonds and by lot within a maturity. Redemptions shall be ;rounded to the ` nearest integral multiple of ;5,000 for Current interest Paying Hoi nds, and shall be In the Compounded Amounts of Compound interest Bonds based on maturity amounts rounded to the nearest Integral multiple of ;50000. . Sinkin Fund` Redem tion: The Term Bonds maturing on March 1, are subject to mandatory s nking and redemption in part by lot, from funds in the Debt Service Fund on , , and on each March l and September 1 thereafter, at the principal amount thereof and accrued Interest thereon in the years and amounts ` set forth beiowt It i . I ' 3 t e hI , -14 I L/ f i I i j Sinking Fund ! Redemption Date Installment f k 5 To the extent that Term Bonds maturing on March 11 _ have been previously called for redemption or purchased and retired in part and otherwise than from sinking fund redemption, each annual sinking fund payment shall be reduced by the amount obtained by multiplying the principal amount so previously purchased and retired or called for redemption, by the ratio which each such annual sinking fund payment bears; to the total sinking frond payments, .and by rounding each such sinking fund payment to the nearest integral multiple of #8400. Not less than thirty days prior to, each such sinking fund payment date, the Trustee will select for redemption (by lot in such manner as the Trustee may determine) from all outstanding Honda subject to fu nd redemption on such date a principal ' �j t amount of such Bonds equal to the aggregate principal amount of such Bonds redeemable i with the required sinking fund s ment end will'call such Bonds or thereof for � g q y � [� redemption from the Debt Service Fund on the next sinking fund payment date. 1 Purchase of Bonds in Lieu of Redemption: Under the lndenturet the 'Trustee Is required to endeavot to apply moneys in the Principal Account held for sinking fund redemption of Bonds oa the purchase of s tobjO which are to be applied to the � p po � principal} et �to redemption at 'e price not In excess of the Com untied Amount thereof or amount thereof plus accrued ' interest, as the case may be, and upon such purchase such Bonds shall be canceled and i the amount of such sinking fund payment or special mandatory redemption payment shall thereupon be reduced by the princlpal amount or Compounded Amount$ as the case may ba, of such Bonds so purchased and canceled. !� Notice of Redemptlont Notice of redemption is to be given by the Trustee by mailing a copy of the redemption notice not less than 16 nor more than 30 days prior to the date fixed for redemption to the reg'stered owner of each of the Bonds to be redeemed. Failure to give such notice by mailing or any defect therein, however, shall not affect the validity of any proceedings for the redemption of Bonds. I Or -11- I t i tt • '' 4 Additional Honda IThe Indenture does not permit the issuance of additional bonds secured by 1 the lien of the Indenture. The Corporation has covenanted in the Indenture that it will not issue any other obligations to' flnance loans for housing purposes pursuant to any similar grogram (1) until at least 90% of the monr-ys In the Acquisition Fund have been committed to Eligible Borrowers under the Program to finance Mortgage'Loans or other- corn disposed of under the Indenture, or (ii) unless the mortgage loans to be originated under a subsequent housing program of the Corporation would be noncompetitive with the 'Mortgage Loans. The Corporation has covenanted under the Agreement that any vid+ial who has been given a firm commitment under the Program will not be eligible for the next housing program of the Corporation In the event the Corporation determines to issue additional mortgage revenue bonds to finance such a subsequent housing program• i CERTAIN ASSUmpTIONS AS TO REVEN!UM CASH FLAW, i DEBT SERVICE AND PROGRAM EXPENSES j Revenues, Program Expenses and Cash Flow The ability of the Corporation to pay principal of and interest on the Bonds , depends upon the receipt of sufficient payments of prineipal and interest on Mortgage c, 1 Loans Required with Bond proceeds and, to a lesser It is anticipated that such sources will meet of moneys held pursuant ' to the Indenture, Y . dn;a timely basis the principal of and interest on the Bonds,_.as well be sufficient to pay , as the premiums;on thei Mortgage Pool,Insurance Policy and the Special hazard Insurance i Polley, and the fees and expenses of the Corporatlon$ Adminlstrator, .Trustee and any other paying agents, based, among other things~ on the fees pays and therithe Program, of ` an annual Interest rate on the Mortgage Loans of _.,�_ _ 96, per annum I until I moneys In the Acquisition Fund at a rate of Sn the Mortgage Reserve Fund at e rate o! % per annum 1110t 1 � and per annum theres ter, and in the Revenue Fund, Debt Sery ee Fund and Speol(subject to it Fund'at a rate of 96 per annum until t _.__�__..�__y--. -. the terms of the investment' Agreement), Liowever, to the extent that, among other things, one or more of the events set forth below o revenues from such sources may ccara, be insufficient for the payment of debt service on the Bonds and operation of the I i programs i (a) delinquencies In the payment of principal and Interest with respect to Mortgage Loans exceed the amount on deposit in the Mortgage Reserve Fund; 4 i ? I (b) Investment income on moneys in funds and accounts 4s less than assumed above; k -12- ;k 1 - - r , f o falls to perform its obligations under the investment Agreement; or ' (d) losses on Mortgage Loans exceed the limit of liability of the applicable insurance polictes. r ; upon issuance of the Bonds and from time to time thereafter, the Trustee will invest moneys on deposit and to be deposited in the Acquisition Fund, Mortgage Reserve Funds Debt Service Fund, Special Expense Fund and Rovenue Fund pursuant to the Investment Agreement under which the provider of the Investment Agreement will be obligated to provide repayment to the Trustee of such mcr^eys for the use of such funds and to pay Interest thereon at the rates for such funds set forth above, Redemption of Fonds Prior to Maturity Principal Installments for the Current Interest Paying Bonds, including 4 sinking fund installments, and maturity amounts for the Compound Interest Bonds, have been established in such a way that regularly scheduled principal payments with respect to the Mortgage Loans (assuming no prepayments in full or other tga early erminations of Morge Loans on an utrderlying pool of thirty years pay tga in substantially equal monthly Installments) will result in the redemption prior to maturity of all the Bonds without premium. i Mortgage Loans may be terrninated prior to final maturity as a result of prepayment, default, sale, condemnation or ceAualty loss. All prepayments in full or other payments In respect of early terrninationc will be deposited In the Redemption Acooun� And are expected to be used to redeem Bonds without premium prior to their scheduled maturitles. f There Is no completely reliable statistical base with which to predict the level of prepayment in Pull or ,ther early termination of the Mortgage Loans and the ^ resulting;effect on the average life of the Bonds. The most widely-utilized mortgage Industry standard for prepayment experience is the past experience of the 'Federal Housing Administration ("FHA") relating to insured single family mortgage loans at various interest rates with original maturities of twenty-six to thirty years. The FHA experience Is that, white some of such mortgage loans remain outstanding until scheduled maturity, a pool of loans will, on the average, produce a "yield" equivalent to, that of a ; single join which amortizes according to the prescribed thirty-year amortization` schedule and then totally prepays in the twelfth year, This twelsre-yee►r prepayment i assumption Is used in most generally accepted "yield" tables. The Corporation's expert- i arise with the Mortgage Loans, however, may not be similar to the FHA experience which 1. i is based upon mortgage;instruments which differ from the Mortgage Loans as to interest rates] initial maturities, assumption provislons, insurance coverage and other terms. t i I ,. '. In addition, if among other things$ before the Participants are able to originate all the Mortgage Loans, funds to make mortgage loans become available in the I County at rates _ competitive with those specified for the Mortgage Loans, the Participants may not be able to originate all the Mortgage Loans; as a result there could be`a redemption of Bonds without premium from unused Bond proceeds and other Ponds j on September 1, 1985. THE PROGRAM 1 � 1 General ` tion has established the The Corpora Program pursuant to the Act as a means of financing the cost of residential ownership which will provide decent, safe and f+ sanitary housing at affordable prices for residents of the Eligible Loan Area, F The Corporation will commit to purchase Conventional Mortgage Loans from ; the Participants In the amounts set forth under the caption "The Participants". The Participants have offered to originate, yell to the Corporation and service Mortgage Loans according to th e terms and conditions set forth in the Agreement. Each Participant has deposited with the Corporation a nonrefundable 'program participation Fee equal to 3-1/2% of the amount;of its allocation, which will be deposited with Lthe ; Trustee and applied as described herein under "Sources and uses of Funds". ' Information regarding the potential demand for mortgage loans in the County is set forth in the "study of Potential Demand for Single Family Mortgage Funds" attached hereto as Appendix a, which analysis should be read in its entirety. j l Otlgiaation and Purchase � to use its best efforts to originate y, i Each Participant will be required 4 Mortgage Loans, which must be in aaoordanee with the requirements established by the f Age+ementti including the then current loan origination, eligibility, Credit underwriting and a prat*,al standards of the Federal National Mortgage Association ("FNMA") or the p me Loan ;Mort age Corporation ("FY31,MC ). Participants are required to Federal Ho g commit the funds to Eligible Borrowers within 12 months after the dote of delivery of i the Bonds (the "Issuance Date'% and to deliver the Mortgage Loans to be purchased within 16 months after the Issuance Date. A Partleipant may, with the consent of the Administrator, transfer its allocation to another:ilarticipent or to the Administrator, as 1 1 the A eement but may not be com6'$nsated for such transfer In excess of provided in gr r the Program Participation Fee. Participants are required to consider all applications In the order in which 1 they are reoelved, provided, however, that each Participant may reserve any portion of l Its allocation to make Mortgage Loans on newly constructed Residences for a period of i C nine months after the issuance Date. In no event may any Participant make { i ` -14- r 1 a r � i I I commitments to a single builder, or its related entities, In such a way that the aggregate ' commitments received by such builder from all Participants exceed 10% of the total amount of allocations under the Program. Each Participant may also use no more than an aggregate of 1096 of its allocation to finance units in qualified Condominium i Developments, No Mortgage Loan on a newly constructed Residence will be purchased 1 by the Corporation until such construction has been completed, Qualified Condominium Developments must meet the following criteria as set forth in the Agreements (1) at least 6096nit arevioiuslynsold are eownoer occupied, f the old it at least 75% o P 5 ) Loans en ( .previously be � and (iii) no more than 28% of the units previously sold are financed by Mortgage , purchased by the Corporation* in connection with the origination of each Mortgage Loan, a Participant may charge and collect from Mortgagor or seller or builder of a Eesidence (i) certain costs which are paid or incurred by the Participant for hazard or mortgage insurance premiums, surveys, title insurance and appraisal fees and (ii) certain other charges as a permitted by law, which shall not exceed $100 per Mortgage Loan. !n addition, the Participant may collect from each Mortgagor or seller or builder an Origination Fee in an amount not to exceed 1% of the original principal amount Of the Mortgage Loan and a 4 fee not o exceed 3-1/296 of the original principal amount of the Mortgage Loan. 1 14 Mortgage Loans Moneys in the Acquisition Fund will be used to purchase Conventional 4 Mortgage Loans consisting eapr Each Mortgage Loan originated d by trust pa tic pant must within the Eligible Loan Ar The Mortgage Loans will 1 I meet the origination standards set forth in the Agreement,be made to Eligible bear interest at a rate of 9b per annum 44 7001 Each Mortgage Loan will haver I t . whose Adjusted Family Income does not exceed q manta of rinoi al and term of 30 years, will provide for substantial) equal monthly pay P p Interest to be made on the first day t f each month and will be in a prSnafpal amount not ; t to exceed such amount as applicable tionoftt eligibility p private mortgage rinsuger,aas of the i, the Agreement and the applloab_ I closing date of the Mortgage Loans The seller of the Residence will be permitted to buy down the interest rate on a Mortgage Loan thereby reducing the monthly amount payable i by the the for a period not to'exceed three years, subject to compliance 'with the provisions of the Agreement, No buy down plan shall be permitted which results in any year in an increase In a Mortgagor's monthly payments of principal and Interest under the i Mortgage Loan greater than 7. 1/2% of such payments due in the next succeeding year. The Acquisition Cost of a Residence may not exceed 110% of the Average Is Ical Area Purchase the n single grt- in the standard of the averagetarea purchasetprices 1 area of which the County is a part. Y � the standard metropolitan statistical area of which the County is a part, as set forth In In the Department of the Treasury as "safe harbor" guidelines are $ 112,420 for newly t -"OUT— — e I r constructed one-family Residences, and $105,820 for existing one-family Residences. i J 'There are no areas in the County 1.9hieh qualify under Section 103A of the Code as iII "targeted areas". l The principal amount of' each 1' g Any Mortgage Loan with a lesser of the Sales Price or appraised value of the Itestdeneema not exceed 96%�value I loan-to-value ratio in excess of 8096 of the lesser of the sales price or appraised must be covered by a private mortgage insurance policy so that the uninsured portion does not exceed 7296 of the lesser of the Sales Price or appraised value of the Residence, Private mortgage insurance must be maintained until ouch loan-to-value ratio Is reduced to 80% of the original Sales Price or appraised value (whichever is less). The Trustee will maintain a special hazard insurance policy and a mortgage pool insurance policy with respect to the Corporation's portfolio of Mortgage Loans. The mortgage pool insuranoe,polley will provide a procedure whereby the insurer will advance payments representing past due payments of principal and interest on Mortgage Loans on which a sum equal to three (3) monthly payments of principal and interest are past due, to the extent that such amounts are necessary for the punctual payment of principal and Interest on the Bonds, subject to certain conditions. Each Mortgagor Is required to maintain a standard hazard insurance policy. See "Insurance". Upon submission of each Mortgage Loan for purchase by the Corporation$ the , Participant will warrant as to each Mortgage Loan, among other things, that (1) it has k been made to an Eligible Borrower, (tl) it is secured by a valid first lion on a Residence t subject only to permitted encumbrances, (ill) it, Is not usurious, (IV) all required guaranties, titles and mortgage and hazard Insurance have been obtained, (v) the property being financed is free of material damage and is generally In good repair, NO the Acquisition Cost of the Residence does not exceed 11096 of the Average Area Purchase 1 Price and (vN) no facts have come to the attention of the,Participant as a result of the investigation required to be conducted by it or otherwise which would cause the Participant to disbelieve or doubt the truth of any affidavit or portion thereof submitted by the Mortgagor or the seller of the Residence. n With respect to each Mortgage Loan, the Mortgagor and the seller of the Residence are required to submit to the Corporation and the Trustee affidavits under J penalty of law certifying facets and in which 4xhibit the Mortgagor's Compliance (or Intentions to comply) with the requirements of treetion 103A of the Code including I intent to occupy the unit U a principal resl�encfi; no present .ownership Interest In a principal.residence for the prior three years (with limited exceptions)t acquisition poet r limitations on the price of the Resldenoet non-replacement of an existing mortgage loan; I �. and certain restrictions on future assumptions. (See "i'ummary of Certain Prnvislbns he ' ` the Indenture--Aequisltibn Fund" for a more detalled description of such affidavits.) The Agreement also prescribes various procedures to be followed by the Participants and the i Administrator in reviewing qnd verifying the affidavits and Information provided by the prospective Mortgagor and seller. z i j 1 E f Servioing and Administration l In order to service Mortgage Loans, a Participant must be an approved FHLMC or FNMA seller-servleer. The Agreement establishes basic obligations between the Corporation and the Participants and incorporates the standard FNMA guidelines for servicing, whioh may be revised from time to time, as amended to conform with the Program. The Administrator will monitor the Participants' performance and compliance s with the Agreement on behalf of the Corporation. The Corporation, upon recommenda- tion of the Administrator, may terminate the Agreement as to servicing by a Participant. A Participant may, with consent of the Corporation and the Administrator, assign its servicing rights anal obligations to another Participant or to the Administrator as provided in the Agreement. upon removal or resignation of any Participant as servicer, the Administrator will i,ssign or assume the responsibility for servicing the Mortgage Loans. In accordance with the Agreement, each Participant servicing Mortgage ` Loans is responsible for collecting and remitting to the Corporation the principal and Interest payments on the Mortgage Loans and any other sums paid by Mortgagors which the Agreement requires to be remitted. Revenues received by the Participants with respect to Mortgage Loans will be held in a Custodial Account by each Participant, with withdrawal rights vested In the Trustee, in addition, the Participant Is required to account for and manage escrows of sums paid by Mortgagors for payment of taxes, assessments, mortgage and hazard insurance premiums and other expenses, For servicing y each Mortgage Loan, the Participant Is entitled to retain from each monthly 'payment a fee equal to 1/12th of 0.30% of the outstanding principsa amount of each Mortgage Loan serviced. ' Each Participant servicing Mortgage Loans must maintain in effect at ali f E times and at Its expense a blanket fidelity bond and an errors and omissions,insurance ( policy covering all officers, employees and other persons acting on behalf. ' of the `Particlpant, Issued by a,company approved by FNMA and in an amount which would be , required by FNMA for such purpose for loans serviced for FNMA. Each Participant is responsible for requiring that standard hazard Insurance meeting the requirements set forth in the Agreement is at all times maintaineli with respect to each Mortgage Loan it services. The Participant has agreed to indemnify the Corporation for any loss suffered by the Corporation as a result of fallure to maintain suchlnsuranoe. The Participant must take such appropriate action with respect to delinquencies as it would take with respect to loans serviced for->iNMA 'or held for its own account. The Administrator will be available for consultation and advice and May take cation as necessary' In connection with a Mortgage Loan in foreclosure in granting appropriate relief, In the employment of attorneys and in other matters pertaining to delinquency and foreclosure proceedings, 9 1 -17- f s 1 Y T. I i s { e Loans and transfers mayar le$Residences 'Mortgagor permitted his Assumptions of Mortgage A Participant may the subject to the following conditions. tPa agreement is entered into by person provide they (I an assume i Obligation p the rigor+gage Loan continues to be Js iseassum d byba r assuming the Mortg Si raement, and (111) such Mortgage h required under the terms of the Ag ible BorroweruiresnentsreoPart lcipandavimust notify the t person who qualifSes as an Eltg or la released, The interest p program rarer r q meets and complies with all p S3 such transfer.Dt the Administrataraoe Loan rWSll not bee'Changed in connection Mortgagor any rate on Mortgage Prepayments of Mortgage Loans in whole or in part are perm under the l Program without penalty. d )foreclosure Lays or defaults on a Mortgage Loan- and foreclosure or other if a Mortgag a e Loans to recovery proceedings are instituted, it is likely thsthavailablebfrom Mortgag in caliee- ,' Lions. These delays eoul�l disrupt the flow of revenues e debt service on the ends if such defaults occur with respect to a substantial pay the Loans number of Mortgage Mortgage instruments utilized in the State of a deed of trust a staining the Mortgages Non-judicial foreclosure proceedings are es to be used in the Program take the or amended, Non-J which power< of non-Judicial foreclosure and sale' contractual Netts if such instruments so governed by Article 3810, Vernan's Atnor other Texas Civil Statutes, as go rocedure for the conduct of non- authorizes sales under deeds of trust only be made in the event of a provide and sets the minim 6aleea indef thisnArticlenM Y _judicial toredtosure 'sales, nonducted by the trustee default under the indebtedness secured or under euredt must }�e contained to the dewed be trust and acceleration of the debt whloh Is is a eeed- t Sated in the deed of trust or other lien instr ru a sad sales at`lessts21 days pr y appointed stir Written notida of the P Pp is$ in which the conductec! only after posting he sale at the courthouse doer{s) of er of the debt tot Nhich the power of fag the mate oft the hold pra¢erty to be sold is located. Addttionslly, sed sale by certified rnatl on 'eaeh to the most receribe conducted only between at sale relates must serve y the debt, aeeiording the prapo written debtor obligated to pay the date of the sale. The saled igt►ated 'in the notice of sale. least 21 days preceding certain hours on the first Tuesday of the month, as which ro erl been held li front orrother 110 instrument by hick After the foreclosure sale visions of t e d of Article 3810 and the p right ht to reinstat federal debt ax llenllaws,�tare ext nguished# a power of sale is granted, any g t any, under except rights of the United States, i power o{ sale is invalids i Anon-jud ieiel foreclosure' sale which has not been conducted in accordance with Article i 3810. and the provisions of the lien instrument grantSng the Po I C ; I ; r , r f Texas courts have In the past strictly construed the power of sale created b deeds of trust or other lien Instruments and, where both contractual and statutory proviy sions for non-judicial foreclosure have not been precisely followed, hive declared non- �'' ` judicial foreclosure sales to be Invalid. In addition, although the Texas statute providing standards for non-judicial foreclosures has previously survived challenges that It is unconstitutional, there can be no assurance that such a challenge in the future will not be successful. A foreclosure sale of property on which the United States claims a lien for ` Federal Income tax collection, and with respect to which the United States has filed a notice in the manner prescribed in the Federal Tax Lien Act, will be made subject to and without disturbing the federal tax lien, unless proper notice Is properly given to the Internal Revenue Servioe at least 25 days prior to the sale. Even when such notice is I properly given, the United States may redeem such property within 120 days from the date of sale, upon payment of the'amount paid or credited at the sale, Interest thereon at 6% per annum from the date of sale and any cost in owning property In excess of derived Intwme, The remedy of non-judicial foreclosure may be limited, restricted or denied, not only by bankruptcy or other debtor relief pr^ceedings, but also by death of a mortgagor t with probate proceedings that are not independent of the probate court or appointment Of a receiver'by the court' in connection with a divorce action involving husband-wife mortgagors, The remedies afforded the holder of the mortgage debt in the events mentioned In the preceding sentence require judicial action either as a prerequisite to the valid exercise of non-judlelal foreclosure or°-in the naturp' of a Judicial Poieolosure proceeding or sale through the legal representative Involved with the sanction of the court. ,r As stated above, foreclosure of mortgage liens on real property, also may be accomplished,by judicial proceedings. In foreclosure pursuant to judicial proceedings, a right of redemption exists prior to the sale of the property, and, except for federal tax w liens as disoussed Above, the redemption rights of all parties are extinguished bye ,. properly conducted judicial foreclosure sales `i'HE PARTICIPAN" General y Each Participant servicing Mortgage Loans Is required to be an FNMA or FHLMC-approved seller and,servicer of conventional mortgage loans for as long as the Participant services any Mortgage Loans. A Participant not so qualified to 'service conventional mortgage loans may nevertheless originate, Mortgage Loans if It is an Insti- tution the deposits of which are insured by FDIC or FSLIC, provided, however, that it } must assign Its servicing rights and qualifications set forth above. obligations to another Participant who meets the During the Commitment Period; a Participant may, with the written consent of the Administrator, transfer any or all of Its allocation to ` one or tmore other Participants or to the Administrator, In no event may a Participant charge or receive SAY fee or remuneration from any other Participant to WHO an allocation is transferred In excess of the Program Participation Fee paid by such Participant with respect to the allocation, so transferred. j V M' i L 1 The following tables set forth the names of the Partielpants, the amount allocated to each Participant for the origination of Mortgage Loans, and certain origina- tion and servicing data on each Participant. The allocations set forth below are subject 1 to change prior to delivery of the Bonds upon approval by the Corporation. There can be no assurance that delinquency and foreclosure loss experience for She Mortgage loans will be the same as or similar to the information set forth below. Each Participant has provided the Information regarding itself and Is solely responsible for the accuracy and r completeness of such information. Neither the Corporation nor the Underwriters have f independently,verified the accuracy of the following information, f i Mortgage Loan Orlglnhtion Rxperfence t` i Total Mortgage Loan Originations in Requested Mortgage Loan Denton Coy.U } I Alloca- Alloca- Originations Participant lion lion in 1983 1983 1902 1981 Allstate Enterprises �il Mortgage Corp. !"Allstate") 32,5001000 $100000000 :539,175,800 351183,200 ;4,893,100 33,382,400 ; Colonial Savings eit Assn. i ("Colonial") 100000,000 4,0000000 688,5750497 19,018,887 130288,230 120956,973 Commonwealth Mbrtgago Corpo- ration ("Common- wealth") 500,000 500,000 42706680917 332 000 219,000 6010090 Denton Savings ' Aun' ("Denton") 2500000000 8,000,000 2,2UtS82 20236,882 9,143,186 15,547,450 Justice Mortgage Coo, Inc. ("Justice") 80200,000 10000,000 60,0830346 2,0$1,000 359000 20790,000 The Lomas Qc il Nettleton Compa- ny ("Lomas") 1809000000 4,500,000 2,394,127,000 10,288,544 6,244 076 1 008 Mortgage do ► Trust Inc. } ("Mortgage's 5,0000000 1,000,000 285,548,000 ` 'he Murray 1,532,300 1,760,000 203b0,0¢0 InVi"Onent Co. i i ("Murray") 30400,000 Sav- North Tow 1,000,000 2380388,348 5,902,200 21250,000 3,900,900 ' lags & Loan Assn.; ("North i Texas"), 4,815,000 4,000,000 11,211,503 10,994,503 5,677,408 3,823,225 11?laveo Mortgage ((( Co., Inc. 2,000,000 4000,000 211,382,086 37,287,316 15,837,800 988,750 f Ryland Mbrt� 37, gage Company ("Ryland") 2,500,000 1,000,Ou0 2421600,000 8,320,422 1,179,550 -0- Total 382,715,000 325,Oo0,0o0 Mortgage Loan Servicing Experience r Number of Mortgage Loans Delinquent ' as of December 31,1983 (Expressed as a Percent of Total Number) r Principal Amount of �_!_ Days Dollar Amount of Loans Mortgage Loans Serviced in Foreclosure Proceedings 'r Partici ant As of December 31, 1983 31-60 81-90 90+ as of December 31, 1983 i --- --� Allstate 320242,869,211 2.68% 0.66% 0447% $16,220,218 Colonial 191609889,391 1.78 0.41 0.12 16,09,534 � Comofonwealth 40428,9739000 6000 2.02 0.76 70100020(6 ` Denton 118,6350312 4.70 0.60 0.10 0= Justice 2980894,613 248 0180 0432 11720,091 Lomas (1) Not Applicable - Servicing Assigned Mortgage 20241,800,000 4.00 1.10 - 0.04 6,726,000 Murray 1,328,8460168 0.71 0027 0.21 382,650 North Texas 88,3601964 0.00 0.00 0.17 -0- } Plevoo (2) Not Applicable - Servicing Assigned 1 ;Ryland 180,614,202 1100 0.00 0.00 819000 w (1) Particlpanthas assigned,servicing duties to the Administrator, (2) Participant has assigned servicing duties to Murray. l Errors and Omissions Insuranw and Fidelity Sonde Each Participant aothig as'a serviaer of Mortgage Loans will be obligated to ' perform its servicing duties in a manner which will preserve all'claims,agaln'at insurers, Including the requirement that each Mortgagor maintain &'private mortgage .insurance policyo it and so long as required, and the standard hazard insurance policy. Subject 'to certain limitations, if any Partiolpant falls to perform these or certain ether obligations j due to an error or omission of its officerp, or employees, coverage will be provided by the errors and omissions insurance policy required to be maintained by each Participant. Subject to certain llmitations, if any officer or employee of a Participant misappro- priates funds from s'ach Particlptant, coverage therefor will be provided by the fidelity bond required to be maintained by each Participant. Each Participant shall pay the g 3 premiums for its errors and omissions insurance policy and Its fidelity bond. Any i amounts eolleoted by the Participant under any such policy or bond with respect to related losses on the Mortgage Loans or revenues therefrom are required to be remitted i i to the Trustee to be applied pursuant to the Indenture. Both the errors and omissions insurance p,.silcy and the fidelity bond must be j In the form and substance required by FNMA- Such policy and bond are subject to certain limitations as to amounts of coverage, deductible i\mouitts, conditions, exclusions - J -21- 1 e .1 5 r�1 rs k and exceptione. Accordingly, stioh coverage against all losses which may iecsustained as arresulttiof lerrors,� omissions o� f ' misappropriations, In the event either the errors and omissions insurance poll' cy or th delity Fi bond required to be maintained by any Participant shall cease to be In effect each Participant Is required to obtain from another 'Insurance company• acceptable to the j IT Trustee a comparable replacement therefor. C I THE ADMINISTRATOR_ General The Administrator, J._ 1. Kislak Mortgage Service 'Corporation, a Florida ' . . t corporation, is a wholly owned subsidiary of J, 1, Klslak Mortgage Corporation, s Florida jz i corporation, which guarantees the performance by the Adminisirator`of its duties and i obligations under the Agreement. As of December 31, 1983, the rator f Its had totel assets of approximately $36.4 million and a net'Worth of approximately$12 million, The Administrator is presently acting in an "administrative capacity for 16 k mortgage revenue bond programs in various states with an ` $1 billion In mortgages, s aggregate of approximately E FThe prineipgl responsibllittes of ` provisions of the Agreement are as follows: the Administrator to accordance with the ?' (a) review of Mortgage Loan documents Por aomplianee with the terms and conditions of the Program and the Agreement prior 'to purchase of the Mortgage Loans by the Trustee on ":ehalf of the Corporation; i (b) collection of informatlon and submission of reports pertaining r to the Mortgage Loans and to mrrieys remitted to the Trustee by the s Participant; ' l r 1 (e) periodic review of the performance of each Participant to r determine compliance with the terms and conditions of the Agreement; t: (d) review of and recommendations as to Mortgage Loan ! sattsfaotlons, fire tos$es, easement problems and condemnation, delinquency and foreclosure procedures,; (e) review of Participants, delinquency and foreblosure reports on the k1or,+.gage Loans; 1, r i i 5 J s r i f ' (f) assumption or. assignment of the responsibility t of servicing � service Mortgage Loans under he Agreement; a' Mortgage and o Properly Mort a e .Loans of an Participant which is removed for failure t (g) eonaultatic.I with the Corporation and the Trustee regarding any aspects of the Program, The Agreement provides for the removal of the Administrator, by the Trustee and -the Corporation udder certain conditions In the event , of default by the Administrator. if the Administrator Is removed, the Trustee Is obligated to act In the , Capacity of administrator until. the appointment by the . Trustee of a successor administrator. Under the Agreement, the Administrator may not resign except upon failure of the Trustee or the Corporation to make payment of any moneys due to the Administrator under the Agreement or such other breach of the 'Agreement by the Trustee or the Corporation which adversely affects the Administrator, which failure or breach shall continue for a period In excess of 30 days. t The Agreement requires the Administrator to" obtain and maintain at its own expense throughout the term of the Agreement a blanket fidelity bond and an error's and omissions Insurance policy covering the Administrator's officers and employees and other .. persons acting on behalf of the Administrator under the Agreement. The amount of coverage must be at least equal to the coverage that would be required by FNMA If the Administrator were servicing the Mortgage Loans for FNMA, In the event that any such bond or policy shall cease to be effective, the Administrator is required to obtain from herefor, i Any amounts 4ollected bytthe Administrator replacement nee company e 'Trustee a comparable p in the Revenue Fund and applied or policy shall be remitted to the Trustee and` de osy't strator under such bond Indenture. d pursuant to the z The Agreement provides that the Administrator shall not be responsible for the performange of the duties of any other party thereto and shall utilize `reasonable efforts end duP diligence to carry out Its duties thereunder In no event and i I Administrator have any responsibility for the loss of the tax-exempt status of the interest on the Bonds or the curing or repurchase of any defective event that any sot, error, mistake, omiss;on or failure of the Ad Mortgage Loan. in the Mortgage results Ina loss with respect to a particular Mortgage Loan, the Trustee shall have limited l upon the authorized acceleration of a Mortgage Loan, under either or both recourse,the MortgagA Pool Insurance pulley (to the extent of 2096 of he aggregate original principal E amount of all Mortgage Loans) and the respnetive private Mortgage Insurance Policies, I INSURANCE ' The following description of certain mortgage and homeowners' Insurance I policies and guarantees Is only a brief outline and does not purport to summarize or i describe all of the provisions_thereof. For a more complete deseription'of the terms of i jr I'l Maw , f r P i t i these policies and guarantees, reference is made to the provisions thereof and to the I provisions of the Agreement and the Indenture relating thereto. Private Mortgage Insurance Policies ! For Mortgage Loans the principal amount of which exceeds 8046 of the lesser s of the Sales Price or the Initial appraised value, a Private Mortgage Insurance Policy will be required In an amount such that the uninsured portion of such Mortgage Loan does not exceed 72% of the lesser of the Sales Price or the initial appraised value of such prop- erty, balancet Mortgage Polley oftheMortgage Loan is be maintained t 0% orlessof the Sales outstanding Price or initial I appraised value of the property, whichever Is less, The Private Mortgage Insurance Policy Insures against certain losses sus- tamed by .reason of defaults In payments by Mortgagors. The Participants are authorized to 'obtain such Insurance from Verex Assurance, Ine.; Mortgage Guaranty Insurance, Corporation; American Mortgage Insurance Company of Korth Carolina; United Guaranty Residential Insurance Company of Iowa; Investors Mortgage Inauranee Company; Ticor Mortgage Insurance Company; Home Guarantee Insurance Company; PMI Mortgage insurance .Company; Foremost Guaranty Insurance Company; or Republic Mortgage Insurance .Corporation or such other insurers ad would not Impair the initial rating on the Bonds, as determined by the Trustee. In the event that an insurer of a Private Mortgage Insurance °Polley shall cease to be licensed In the State of Texas and approved by FHLMC or cease to be acceptable to the Trustee or Participant, the Participant shall exercise its best reasonable efforts to obtain from another insurer licensed in the State of Texas and approved by FHLMC and the Trustee, a replacement policy comparable, to the_Private Mortgage Insurance Policy. Pursuant to the _Agreement, any amounts collected by the ` Participant under any such policy shall be deposited into the Custodial Account, The cost of maintaining any such insurance shall be paid by each Mortgagor 'of a Mortgage 4. Loan which requires such insurance. ` ! The form of Private Mortgage Insurance Policies expected to be used with respect to the Mortgage Loans presently contains provisions substantially as follows: f (I) under the policies a claim includes unpaid prinelpal, accrued Interest to the date of t l i tender of the property to the Insurer and eeptain expenses; (1I) for a ,Participant to i i present a claim, such Participant, on behalf of the Corporation, must have acquired, and tendered to the insurer$ good and merchantable title to the property, free and clear of all I liens and encumbrances, Including all right of redemption by the Mortgagor; (Iii) when e I claim Is presented$ the insurer will have the option of paying the claim In full, taking title to the property and arranging for its sale, or paying the insured percentage of the claim and allowing the Corporation to retain title to the property; (iv) a claim must be made within 80 clays after the Participant, on behalf of the Corporation, has acquired good and merchantable title to the property; and (v) a claim; must be paid within 30 days after the claim Is made by such Participant. No payment for a loss will be made unless + the property financed by the defaulted Mortgage Loan is In the same condition as when } the Mortgage Loan was originally insured, subject to reasonable wear and tear. I -24- a i I 7 A a r r Mortgage Pool Insurance Policy The Mortgage Pool Insurance Policy will be obtained from Verex Assurance, i Inc. and will cover 100% of ,the loss by reason of default (either a monetary default or any non-monetary default which would he the basis for foreclosure) on any Mortgage Loan up to an aggregate limit of coverage equal to 20% of the aggregate original principal amount of all Mortgage Loans, Under an endorsement to the policy, Verex Assurance, Inc, will, under the circumstances described below, make advances In amounts equal to delinquent payments of principal and internist on each Mortgage Loan'on which a sum equal to three (3) monthly payments of principal and Interest are past due. Advance claims payments will continue only so long as foreclosure procedures are being diligently Z pursued. The ft'Aicipants have agreed not to take,any action which would result In the Mortgage Pool Insurance Policy's not being maintained and will present claims thereunder to the Insurer on behalf of the Trustee, The Mortgage Pool Insurance' Polley will be issued to the Trustee, and the premiums for the Mortgage Pool Insurance policy shall be paid by the Trustee Initially from the Program Espense Fund and thereafter' from the Special Expense Fund, pursuant to the Indenture.' in the event that the Issuer of the '• Mortgage Pool 'Insurance Policy shall cease to be', licensed in the State of Texas and approved by FHLMC, the Trustee shall exercise Its best reasonable efforts to obtain a z comparable replacement policy with a total coverage equal to the then existing coverage of the Mortgage Pool Insurance Policy, The Mortgage Pool Insurance Polley Is not a blanket policy against` all losses, since claims thereunder may only be made respecting ;1 particular defaulted Mortgage Loans and only upon the satisfaction of certain conditionsF precedent 'described below. It is a requirement of the Mortgage Pool Insurance Policy F that certain guarantees or Insurance be maintained as provided' In the Agreement. s The ' Mortgage Pool Insurance Polley provides that no claim may be paid thereunder unless (1) a Private Mortgage Insurance Policy if required as described above, .+ has been kept in force, (11) premiums on the Standard Hazard Insurance Polley on the { property securing the defaulted Mort other foreelosure, Mortgage .Loan- have been paid and nth protection and preservation expenses have been paid by the Participant and (iii) if there has been physical loss or damage to the mortgaged property, it has been restored to its condition at the time the Mortgage Loan was made, subject to reasonable wear and 4 tear, Assuming the satisfaction of these conditions, the insurer has the option, after expiration of any applicable redemption period, to either (1) purchase the property secur•• i ing the defaulted Mortgage Loan at a, price equal to the principal balance thereof plus accrued and unpaid Interest at the mortgage rate to the date of purchase and certain expenses on condition that the insurer must be provided with good and merchantable title I to the mortgaged property (unless the property has been conveyed pursuant to the ttiems of the applicable mortgage insurance policy) or (11) pay the amount by which the slim of s the principal balance of the defaulted Mortgage Loan plus accrued';and unpaid interest at the mortgage rate to the date of the payment of the claim plus certain expenses exceeds ( the proceeds received from a sale of the property which the Insurer of the, Mortgage Pool 1 Insurance Polley has approved. In both (I) and (fl)* the amount of payment is reduced by the amount of loss paid under the applicable Private Mortgage Insurance Policy plus any i advance claim payments made. -25- 1 i s i F � A claim under the Mortgage Pool insurance Policy must be filed (i) within 60 � - days after the claim for loss has been settled or paid under the mortgage insurance policy - or (11) within 60 days after the Trustee has conveyed title to the property ' In $ sale approved by the issuer of the Mortgage Pool Insurance Polley, whichever is later. Since the property subject to a defaulted Mortgage Loan must, If It has been s: , damaged, be restored to its original condition at the time of_the Issuance of the policy (reasonable wear and tear excepted) prior to making a claim against the insurer, the Mortgage Pool Insurance Policy does not provide coverage against casualty losses.' The amount of coverage under the Mortgage pool Insurance Policy wilt e reduced over the life of the Bonds by the dollar amount of claims paid less amollats realized by the insurer upon disposition of mortgaged properties, The amount of claims paid includes certain expenses incurred by the Participants as well as accrued interest on delinquent Mortgage Cosner Including interest accrued through completion of foreclosure I proceedings (seethe caption "The Program -- Foreclosure Laws" herein). Accordingly, if 1 sggregate,;reooveries under the Mortgage Pool Insurance Policy reach the policy limit, 3. coverage under the Mortgage Pool insurance Policy will be exhausted and any further losses will be borne by the holders of the Bonds to the extent reMiaining moneys held under the Indenture are Inadequate to pay principal of and interest on the Bonds. 1 An endorsement to the Mortgage Pool insurance Policy will provide for, a v; procedure pursuant to which the insurer is required to make payments to the Insured with respect to a Mortgage Loan on which a sum equal to three (3) "monthly payments of } principal and interest are past due. Under this procedures the Insured reports the w amounts of advance payments it is requesting with respect to any Mortgage Loans on which a'sum equal to three (3) monthly payments of principal and Interest are past due s and within ten days after receiving notification, the insurer pays to the insured an amount equal to the aggregate unpaid monthly Installments of 'principal and interest on such delinquent Mortgage Loans, subject to and not exceeding the limits of coverage provided under the Mortgage Pool Insurance Policy. As a condition to such advancement with respect to a Mortgage Loans foreclosure proceedings ' must have been initiated and s diligently pursued. The insurer will make such advanced claim payments on a monthly basis. The Insurer will be reimbursed for such advance payments made on a Mortgage Loan either from payments received by the Insured on account of any such Mortgage Loan from the Mortgagor or an insurer of the mortgaged property or from the proceeds of the mortgaged rty. Any unreimbursed ed prope of the foreclosure sale or conveyance g g I advance payment will be offset against any claim payment to the insured under the I Mortgage Pool Insurance Policy. The coverage available under the advance claim payment procedure equals ' the limit' of coverage provided under the Mortgage Pool Insurance` Policy, Advances for ! which the' insurer is ultimately reimbursed are not charged against the limit of coverage i under such policy. Although no assurance can be made herein that private mortgage Insurance policies,will in all cases cover defaults resulting from acceleration of Mortgage i )roans due to the provisions of Section 103A, the Mortgage Pool Insurance Polley will � cover such non-monetary defaults up to the policy limit. s f s -26- ,a 1 r r r �t 1 i "Verex") will issue the Mortgage Pool insurance I i Verex Assurance, Inc. ( ' owned subsidiary of Verex Policy. Verex is s Wisconsin corporation and a wholly i i oration, 'itself a Wholly Own ed subsidiary oen a ed prig cipa principally Cn the business i of Corp Verex Is g g ment by the principal offices in Mad{son, WI$eonsln. insuring mortgage `loanse�ber 3den1983,� Verexiereportedti insurance In force covering mortgagor. As of Dec es. As of the same date, approximately $23.8 billion of individual residential mortgag roximately $2816 million,, capital and surplus Verex reported total assets of apl? contingency reserve's of $134.6 million, resulting . aggregiting $49.5 million and statutory In total policy holders' reserves of approximately ;184.1 million: C ' Standard Hazard Insurance Policies ! Each Participant acting as a servleer will cause to be maintained by the i . e Loan fire {nsuranee with extended coverage on the Mortgagor for each Mortgag pope " in an amount which is not less the ` mortgaged;property (a "standard Hazard lnsuraneg Y ) than the maximum insurable value of the proptr�the lawsro'Qthel ststAaof Texsn any Mortgage i.oan, whichever is less. Subject such polioy will ` be deposited in the ► a; Participant under any z amounts collected by Custodial Account subject to reimbursement pursuant to the Agreement. Such insurance roved by FNMA or FHLMC. 1 shall be with Insurers app a lio covers r In general, s standard form of fire and extended corer fr e, l{ghttsing> i? hysleal damage to or destruction of the Improvements an time'property ,by to the condi- explosion, smoke,:windstorm, hail, riot, strike and civil 1t amFtesidence is located in ,s. 1 tions and exclusions particularized nce shall be lrequired to be maintained, and If not designated` flood area, f covered by other insurance under eaet3h Residence nto Insurance extent shall be deemedgadvisable by aihe r talned' for wind `damage on policies relating to different Mortgage Loans Administrator from time to time. Although po have minor Insurance companies and, therefore, may s typically different Policie if � d law may be issues by Taxes differences In coverage, the basic �r 11e dictated by war► revolution, governmental i exclude physical damage resulting earthquakes, actions, floods and other water-re�aetap ionsg wet or dryorot,nvermiln�lrodents, insects or landslides and mudflows), nuclear domestic animals, theft and, In certain eases, vandalism. ach!n lieu of a Standard Hazard InsLir�ance pQ llnterest Hazard ilnsurancenPolfc servieer may maintain and keep a Mortgag throughout the term of the Agreement. The Mortgagee Single Interest Hazard Insurance provides term o nth against losses sustained by a participant or other Insureds in Policy fails to maintain a Standard Ha2ard' Insurance Policy and f the event the Mortgagor premium for the Mortgagee physical damage occurs. Each Participant agrees to pay resortbed by the polfay. Any Single interest Hazard Insurance Policy an the basis p e bens , the Participant .under such policy relating to the Mortgage amounts collected by the Participant rubteet to will be deposited in the Custodial Account maintained b;� 4 withdrawal by the Trustee. ; 1` -27_ g i r 4 Y t i Speoilil Hazard insurance Policy ' The Trustee will obtain a special hazard credit insurance policy (the "Special Hazard insurance policy") from Commerce and Industry Insurance Company, a New York (nsv„„'canoe company, to provide protection with respect to flood, earthquake, building col14pse (to a limited extent) and other losses `(except those specifically excluded in the ! pa4ioy) with respect to a defaulted loan secured by a damaged property. The Trustee will pay the initial premium for the Special Hazard Insurance Polley from the Program Expense Fund and, thereafter, will pay the aanuai premium from the Special `8xpense kund. The Special (hazard Insurance Policy will cover a loss resulting from a risk covered by the policy upon a default by a Mortgagor. The Insurer will pay the lesser of (1) the m of (a) the unpaid principal balance of the Mortgage Loan at cost of repair or (it) the su f: he time the property is acquired by the Trustee due to a default by the Mortgagor, (!�) accumulated and delinquent interest to the date of payment of a claim and (e) hazard Insurance premiums and, as necessary and approved in advance by the insurer,.real estate Y property taxes, property protection and preservation expenses and foreclosure coats, in each ease less the amount due from any other insurance covering the same peril. Asa condition precedent to payment of any claim in accordance` with (11) above, the Trustee on behalf of the Corporation must provide the insurer with good and merchantable title to the property, I A claim under the Special Hazard Insurance Policy must be made within 80 1t days after the Insured has acquired good and merchantable title to the property or within ” 60 days of the damage if at that time such title was held by the Trustee due to a default ` by 'the Mortgagor, A clulm Is payable within 30 days;atter,the claim is received by the Insurer. .The Apeclat Hazard Insurance Policy will provide that no claim may be paid on the property, securing a defaulted Mortgage Loan unless hazard insurance premiums and, as netsasaary, real estate 'property taxes, property protection and preservation expenses and foreclosure costs are advanced by the Trustee. In the event that the Speeiai Hazard insurance Policy cease to be in effect, the Trustee Is required to exercise its best reasonable efforts to obtain a comparable replacement policy. 1` f The maximum amount payable under the Special Hazard Insurance Policy t will be the greater of (1) 1% of the total Initial principal amount of all Mortgage Loans purchased or (11) twice the initial principal amount of the largest Mortgage Loan 111 purchased. The residual coverage under suph policy will be reduced by the dollar amount elainis paid,, less the amount realized by the insurer on disposition of damaged prop- of 4 cl . if aggregate the equal the policy limit, no further payments will be made k i G b the Insurer, and any losses resulting thereafter will be borne by the holders to the i i y ' Bonds to the extent that remaining moneys held by the Trustee are inadequate to pay principal of and Interest on the Bonds. j At December, 31, 1983, Commerce.and Industry Insurance Company had total ► assete of approximatel y $9.85 billion and policyholders' surplus of approximately $2.55 r billion. l � t , u .. v's'. d•y. , ..n .. q te, 1i -ANt ' [eti4 rr;}1 ju 1 1 1 Limited Purpose Bond The Trustee will obtain a limited purpose bond (the "Limited Purpose Bond") for Chapters 7, 11 and 13 proceedings under Title 11 of the United States Code (the ! ! "Bankruptcy, Code") from insurance Company; of Borth America, a Pennsylvania b a Mortgagor corporation, to provide protection for losses resulting from the filing y under Chapter 7, 1l or 13 of the Bankruptcy Code that results Ina decrease In the principal and/or Interest payable under a Mortgage Loam The mrustee will pay the initial EF premium for the Limited purpose Bon frorri the `Program Expense Fund and, thereafter will pay the annual premium from the special Expense Fund. rr Payment of Insurance mortgage insurer No representation is made as to the ability of any p rivate ( or issuer of any standard hazard, special hazard, mortgagee single Interest hazard or 1 insurance, limited purpose bond' or serviaer indemnity bond to make mortgage Pool h ayments under their respective Insurance polices or guarantees at the times and in the amounts specified in such policies or guarantees,' .i t SU11lliARY OF C ERTAIN PROVISIONS OP THE AGREEMENT The following is a summary of certain provisions of the Agreement, and such summary is qualified In its entirety by reference to the Agreement. l Definitiomt The following is a summary of certain of the terms used in the Agreement i ' and the Indenture, "Acquisition Cost" means the cost to a Mortgagor of acquiring a Residence from the seller; as a completed residential unit, inoludingc (i) al' amounts heI Mortgagor)either sash or In Ieind, by the Mortgagor (or a related party or for the benefit of ! to the seller (or a related person or for the benefit of the seller) as consideration for the Residence; (iI) If the Residence Is Incomplete, the reasonable cost of completing It (so that occupancy thereof to legally permitted); and (iii) if the Residence is purchased } subject to a ground rent, the capitalized value of the ground rent calculated, using a ; discount rsite equal to the Yield on the Bonus; but exclusive of: (a) usual and reasonable ! settlem6nt;or financing costs (but only to the extent that such amounts do not exceed the usual and reasonable costs which would be paid by the Mortgagor where financing is not prc;4lded through bonds the Interest on which is excludable from the gross Income of the i recipient for federal income tax purposes), (b) the value of services performed by the Mortgagor or members of his or her family in completing the Residence, and (c) the cost -29- , � l 1 E s ' I i 5 of land which has been owned by the Mortgagor for at least two years before the date on l which construction of the Residence begins. I ' Adjusted Family Income" means total income of a person (together with I total incomes of all persons who Intend to reside with such person in one dwelling unit) I for the immediately preceding taxable year, as shown on line 32 of IRS Form 10400;1 ne i 10 of IRS Form 1040A or line 3 of IRS Form 1040EZ (in any case the most recent tax return required to be filed'by law), or as otherwise evidenced to the ;satisfaction of the Trustee and the Administrator and determined at the time the Mortgagor submits an -application to a Participant. 3 "Agreements" means the Agreement, the Indenture and all other agreements, contracts or Instruments contemplated by or related to the foregoing, t� "Allocation Amount" means the aggregate principal amount of Mortgage Loans which each Participant may submit for Purchase by the Corporation, as deter- mined by the Corporation pursuant to the Agreement, ; 7 "Average Area Purchase Price" means, with respect to any Residence either of the following. (a) the most 'eurrent average purchase price of',single-family residences In' the statistical area In which the Residence Is located from time to time published by the"D epartment of Treasury for the standard metro�olltan statistical area ("SMSA") or other appllcable r area of which the County is`a part, or (b) such amount as shall be deter- mined by the Corporation as the average area purchase price of all single family rest- denoes in . the County for the most recent twelve-minth period for which suffielent ` statistical information Is available, based upon a comprehensive survey of residential hounding sales In the applicable, area and the opinion of bond counsel that the purchase prices so'dutermined by the Corporation shall not cause the interest 6h the Bonds to be subject to Federal ineome taxation. , The Average Area Purchase Pride shall be stated separately with respect to one-family residences which have not been previously , occupied and one-family residences which have been previously occupied. l "Closing" means the origination and funding of a Mortgage Loan by a Participant pursuant to the terms of the Agreement. I "Closing Date" means the date of any Closing. s "Commitment" means a binding written commitment executed by a ' Participant, in the form customarily used by the Participant In Its 'owner-occupied home } { lending practice or in a form customarily used in the mortgage lending industry as may be specified by the Administrator, to a particular Eligible Borrower to make a Qualified i Mortgage Loan on a particular Residence, which commitment shall be for a stated period 1 I of time, for a stated amount and for the stated interest rate established for the Program r pursuant to the Agreement. ` "Commitment Date" means the date on which a Participant issues a l Commitment town Eligible Borrower. I i ` h L 1 j ttr i a I "Commitment Period" means a period commencing on the Issuance Date and ending 12 months thereafter, "Conventional Mortgage Loan" means a Mortgage Loan which is not ..:.. s guaranteed by 1,he Veteran's Administration or insured by the Federal Housing Administration. "County" means Denton County, Texas. i "Custodial Account" means an account maintained In trust by a'l articipant pursuant to the Agreement, to which all Revenues received by such Participant, are deposited. i "Eligible Borrower" weans a First Time Homebuyer complying with the requirements eat forth in Section *103A of the Code Including the representations set , �. forth in the Mortgagor's under "Surnm QuallfiedrMnrtgageaLoan�Vw�honhas not F i Indenture-Aaquisitian Fund" Adjusted Family previously reoelved a Mortgage Loan under the Program, and, w Income did not excised ;49,700 or such other amount as may be `itetermined by the { Corporation In accordance with the Acts "Escrow Payments" means all moneys acllect3d, or required to be collected, Ivate by Participants to obtain or maintain tpof taxes or other gove menta�or similarfcharges other hazard insurance, or for payment loans or the mortgaged It Customarily `required to be escrowed with respect to mortgage f { 's properties securing such loans. , O'Exee'" Investment Earnings" means the sum oft (A) the excess of (i) the net Vnts on` amounts earned on' the t nrestl►annthef Excess Investment pEarntngsi1elCGountneetabliahed , r ' 1 under the Indenture other pursuant to the Indenture over (ii) the amount which would have been earned if such amounts were invested at s rate equal to the Bond$tihedlndentur�e,intarest earnings, if ' any, on the Excess Investment Earnings Account � "First Time Homebuyer" means an individual who has not had a Present Ownership Interest in his or her prinacipatimeidurl during three-year period ending onet e E Take-Out Loan Is being provided) at y 4 date he or she executes or assumes a Qualified Mortgage Loan. i "Insurance Proceeds"means payments received with respect to the Mortgage Loans under any insurance policy required ar permitted to be maintained under the Agreement. ; "Investment Agreement" means an agreement dated as of March 1, 1984 ursuant to which certain between the Trustee, the Corporation knd p funds are invested at specified' rates,' or any addittonel, supplemental, or successor agreement thereto between the Trustee, the Corporation and or (a) such -31- i s � i I i other bank as may be designated by the Trustee, such bank to be a member of the Federal Deposit Insunnes Corporation or the debt of which is rated at least as high as r the rating on the Bonds, or (b) an Institution not subject to bankruptcy whose obligations under the investment Agreement are collateralized by United States government oblige-, I!((k tians� � "Investment Obligations" means any of the following which at the time of ; Investment are regal Investments under the laws of the State of Texas for the moneys y proposed to be invested therein. t (1) Obligations of, or guaranteed as to principal and Interest by, j the United, States of America or any 'agency or instrumentality thereof . when such obligations are backed by the full faith and credit of the United ' r States of America; I � (2) Federal Home Loen' Mortgage Corporation (FHLMC) and ;Farm Credit Banks (Federal Land »anks, Federal` Intermediate'Credit Banks for Cooperatives) participation certificates and senior debt obligations; (3) `Federal National Mortgage Association's (FNMA) mortgage- + backed'securities and senior debt obligations; (4) .Student Loan Marketing Association (Sallie Mae) letter of credit-backed issues and senior debt obligations; (b) Federal funds; certificates of deposit, time depcslts and ' . bankers' aceeptanees.(having original maturities of not more than 365 days) of any bank the debt obligations of which (or, in the oase.of the principal bank in a bank holding company, debt, obligations 'of the bank holding company) have been rated "A,-1+" by Standard and Poor's Corporation; ($) Commercial piper (having original maturities. of not more than 386 days) rated 11A-1+"by Standard and Poor's Corporation; 1 (7) Obligations rated "AA" or better by Standard and Poor's Corporation (or those investments specified In (2) above with banks which have debt obligations rated "AA" or better); E _ i (8) Deposits which are fully insured by the Federal Savings and Loan insurance Corporation (FSLIC) or the Federal Deposit Insurance I Corporation (FDIC); I (0) Repurchase agreements with any institution whose debt obligations arm rated"AA" or better by Standard and Poor's Corporation; (10) Repurchase agreements with financial institutions inured by the Federal Deposit Insurance Corporation or the Federal: Savings and Loan 3 17G , I I I , n � , Insurance Corporation provided such repurchase agreements are in I accordance with applicable guidelines promulgated by Standard and Poor's 's Corporation; and y (11) Obligations of or of other ' Institutions whose debt obligations arcs rLted "AA" or better by Standard and Poor's Corporation pursuant to the itivestment Agreement. "Issuance Date" means the date of payment for, and delivery of, the Bonds, z "Liquidation Proceeds" means money {other than Insurance Proceeds) received In connection with the liquidation of defaulted Mortgage Loans, whether through trustee'3 sale, foreclosure sale or otherwise. "Maximum Acquisition Cost" means an amount which does not exceed 110% of the Average Area Purchase Price as shall be in effect for the category of a Residence. The Maximum Acquisition Cost shall be determined as of the earlier of the t date the Partleipant makes a Commitment or the date the Residence is purchased. . ' "Mortgage" means the Instrument securin g a Mort g a g e Loan 'which creates a _ ' first lien on a Residence subject to certain permitted encumbrances, which shall be in the form as set forth in the Agreement. I i "Mortgage Loan" mea 1s any loan evidenced by a Mortgage Note which is i secured by the -:elated Mortgage 'or the purpose of financing (a the pure hase by an Eligible Borrower of, or' (b) the take-out of a *onstruction period ,loan bridge.loan or k similar temporary financing with an original term not In ;excess of 24 ', months by an i '"ligible Borrower on, a Residence, and which loan Is being presented to the Trustee for k Purchase or has been Purchased by the Trus,.ee pursuant to the Agreement, E "Mortgage Note" means the promissory note evidencing the obligation to 4 repay the Mortgage Loan, payable to the order of a Participant ands prior to Purchase, assigned to the Trustee, on behalf of the Corporation, executed by an Eligible Borrower to evidence such Eligible Borrower's obligation to repay the Mortgage Loan, which shall j i Agreement. be In a form described: in the A 1 . "Mortgagor" means the obligor{s) on a Mortgage Note who has executed the Mortgage, and/or a subsequent purchaser of a Residence who h.ps purchased same subject # to the Mortgage ' G "Officer" means any duly appointed and authorized officer of a Participant involved in, or r,�sponsible for, the origination, sale or servicing of the Mortgage Loans,' whose name appears on a' list furnished to the Administrator and the Trustee, by e Participant, as such list may from time to time be amended and, with respect to the Administrator, any duly authorized officer of the Administrator whose name appears on a list furnished to the Trustee by such party, as such list may from time to time be amended by written notice sent to the Administrator, the Corporation and the Trustee. -33- x l t ' "Officer's Certification" means the certification on the mortgage submission J voucher for each Mortgage Loan execs ttp,t by an Officer of a Participant which shall represent such Participant's warranty with respect to all of the terms and conditions as { specified In the Agreement for the Mortgage Loan submltted for Purchase by the 1 Corporation. j "Origination, Fee" means a fee, not to exceed 1% of the original principal I amount of the Mortgage Loan, which may be charged by Participants, as permitted by ' law, 'to Eligible Borrowers or the sellers or builders of Residences, in connection with i each Mortgage Loan purchased by the Trustee. "Origination Period" means a period commencing on the Issuance; Date and ending sixteen months thereafter during which Mortgage Loans are purchased by the Trustee. ; s, s "Present Ownership interest" means (1) a fee simple interest; (ii) a joint `t t tenancy, a tenancy In common, or tenancy by the entirety; (111) the interest of a tenant- shareholder in the cooperative housing corporation;`(iv) a life estate; (v)'a'land contract or agreement for deed (i.e., a•contract pursuant to which possession and the benefits and burdens of owwnership are transferred 'although legal title is not transferred until -some i time later); and (vl) tin Interest held In trust for the -Mortgagor (whether or not oreated 4 by the Mortgagor) that rwould constitute a present ownership interest if held directly by c the' Mortgagor. The tern "Present Ownership Interest" excludes (1) a remainder Interest; } (11)`a lease with or without an option to, purchase; ( ii).a mere expectancy to inherit an Interest in a principal residence; (Iv) the interest that a purchaser of a residence;acquires,, i on the execution of a,purchase contract; and (v) an interest in other than a principal !J residence during the previous three years, } "Principal Prepayment;" means any Mortgagor payment or other recovery of i principal on a Mortgage Loan which is not applied by the Participant collecting tlali4s a to a i scheduled payment under the Mortgage Loan erid the portion of any insurance; Proceeds, Liquidation Proceeds or other collections representing similar payments, other than such amounts which, pursuant to the Agreement, will be used, to the extent possible, to f Purchase Mortgage Loans. "Program Participation Fee" means the fee, paid or to be paid to the J Corporation by each Participant In an amount equal to 3-1/2% of such Participant's Allocation Amountp which fee Is not refundable except as provided in the Agreement. "Purchase" ineans the purchase of a Mortgage Loan by the Trustee on behalf of the Corporation from a Participant as specified In the Agreement. ' "Purchase L=ate" means the date of any Purchase, "Qualified Condominium Development" means a condominium development or completed phase of development In which (1) at least 50% of all units are under bona fide contracts for sale prior to the Purchase of any Mortgage Loan on any unit therein by 3 -34 i i d s f 4 the Trustee; (H) at least 75% of the units previousi under bona fide contracts for salt P y are to be occupied by the owners thereof; and (iii) no more than 26% of the units provide security for Mortgage Loans under the Program. t "Qualified Condominium Unit" means a unit in a Qualified Condominium ' Development, but only if the amount of the Mortgage Loan thereon, when added to the aggregate ` amount of all Mortgage Loans on Qualified 'Condominium Units previously purchased by the Trustee from the ,same Participant, does not exceed 10% of the Participant's Allocation Amount. "Residence" means real property and improvements permanently affixed thereon within the Eligible Loan Area, which shall be 'a single family detached or ' attached structure intended for residential housing for one family(including a Qualified ' Condominium Unit)l which is reasonably expected to become the principal residence of si the Mortgagor within a reasonable period of time not exceeding 60 days after the ; Mortgage ,Loan is, made to the Mortgagor. The term Residence includes land appurtenant to the Resideneti,,but only if such land will be used to maintain the basic livability of the Residence Mortgagor,and 'does not provide, other than incidental) , a source of income to the i P y "Revenues" --'m�ians all moneys reeetved by the Participant, representing principal and interest payments on Mortgage Loaft after the Purchase Date, including Principal Prepayments, insurance Proceeds and Liquidation proceeds, net of Service Fees and Escrow Payments. ) "Sales Price" means the salos price` of a Residence as Indicated in .the eontraot of sale between the Eligible Borrower'and the seller or builder of the Residenoe, ' exclusive of any closing costs as set forth in the Agreement s "Service Fee" means a monthly, amount equal to .025% of the unpaid lr principal balance on each Mortgage Loan as of the day preceding the last day on which a r scheduled payment of principal was paid. "Take-Out Loan" means any Mortgage Loan for the purpose of taking out a period , dg ► porary f Hanoi g has a ter, of 24 months' construction period loan, or bridge loan or similar temporary finanoin which construe 4 tlon riod_losn or bridge loan, or similar tam or leas, and which qualifies as such pursuant to the Agreement; a Take-Out' Loan shall be deemed to be a Mortgage Loan to finance the purchase of a Residence. "Yield on the Bonds" means the 'yield thereon as determined by the Corporation in accordance with the Internal Revenue Code of 1954, as amended. i f � -35- i , r I v i I i , } SUMMARY OF THE AGREEMENT Origination of Mortgage Loans r 1 The Corporation will agree to Purchase, solely from Bond proceeds or other E moneys in the Acquisition Fund, and the Participants will agree to use .their best efforts ; to Issue Commitments and sell to the Corporation during the Origination Period, Conventional Mortgage Loans at their unpaid principal balances, r Prior to delivery of the Bonds, the Corporation will receive from each i Participant a Program Participation Fee In an amount equal to 3-1/2% of such Participant's Allocation Amount. Bond proceeds and the Program Participation Fees will be, deposited In the funds and account established pursuant to the Indenture as described under "Sources and Uses of Funds," The Participant is permitted to charge certain closing costs set forth in the Agreement. In addition, the Participant is permitted to charge the seller or Mortgagor E Origination Fee not In excess of 1% of the original principal amount of the Mortgage an L01kh and,e ,foe of 3-1/2WAs.a pro rata recovgry of Its Program participation Fee., In some' inatanees, the amount of costs and fees charged by a Participant may be limited by ` Texas usury laws. . At least five business days prior to 'a Purchase'Date, the Participants shall , submit to the Administrator the Mortgage Loan file, including a copy of the executed 't it Moitgagt Note, the executed Mortgage:-and the assignment 'to the "Trustee, the doou- ments described herein under "Su.nmiry of Certain Provisions of the Indenture-Acquisition Fund" and satisfactory evidence that all required insurance has been :obtained and that the Mortgage Loan has been made in compliance, with the i Agreement. The Trustee shall' Purchase on behalf of the Corporation, on each Purchase Date, from moneys available therefor, each Mortgage Loan which is approved for Purchase by the Administrator under the terms and conditions specified In the Agreement, i Purchase b R All Mortgage Loans originated for. y the Corporation must be committed in accordance with the ),)an origination, eligibility and credit underwriting standards in effect during the Origination Period under the Program as set forth it the I FNMA ,Conventional Home Mortgage Selling Contract Supplement or the F'HLMC Seller's Guide Conventional Mortgages with such exceptions or "additional guidelines, as appropriate, as provided In the Agreement. { ► At the rend of the Commitment Period, the Corporation' shall terminate all unfulfilled allocations for which no Commitments have been made by Participants as of j the end of the Commitment Period and may, to the extent permitted under the Indenture and in accordance with the Agreement, reallocate such unfulfilled allocations, { 4 If any document or documents constituting a part of a Mortgage Loan file are, In the judgment of the Administrator, defective or Inaccurate In any material 1 I i L E respect, or any representation or warranty of a Participant is, in the Judgment ! Administrator, untrue U to any material matter, the affected participat shall defeat the r defeat within a period of 60 days from the time the affected Participant is no e f the existence of the defect or inaoouraay or such shorter period as be' regt�ired 'b law. Each Participant agrees that, If any material defect or inaccuracy cannot be cured I` within such 60-da i not later than 90 daysiafterrthe Tr stee$s notice 'toiptprespeetinl)such defect Participant will, curacy as to a Mortgage Loan with an outstanding g . ect or "rose s 1? related Mortgage Loan from the Corporation at a p iceiequalltoa(1) 10056 repurchase the unpaid � principal balance of such Mort gage Loan p lus O ii any accrued and unpaid interest at the annual rate borne by the Mortgage Note to the date of the repurchase, and (2) In all ewes, whether or not the Mortgage Loan has been repaid or otherwise satisfied,It will c Indemnify and hold harmless the Corporation, the Trustee and the Administrator f doss, forfeiture, penalty,,, dam expenses ( or any age:. or including reasonable attorneys' fees) incurre,) by them with respect to the defective Mort a e Loan, representation by a Mort t respect g g However, the falsity Participant Is `entitled to rely upon under the provisions of the Agreemaent, (11)Which is Ofisuch nature that, although false, the security of any person to whom the pertinent Mortgage Loan is due Is not thereby adversely affected, (Iii) Is relied upon by;the Participant in good faith and (Iv) in the opinion of bond counsel..does not affect the tax-exempt status of the Bonds, shall not be deemed a material defeat or Inaccuracy, I Notwithstanding,anything set forth In the reaedin the .Administrator, the Trustee, the Co p g paragraph, In the event Sequent to the Purchase of an Mortgage Corporation t or the Partietpant becomes aware sub- I of the Mort y BaB'e Loan that one or more portions of any affidavit gegor or the seller of a Residence required by the Indenture contains a i Materially Incorrect statement of fact, the Trustee or the Administrator shatl provide written notice to the Participant to, of the Participant upon becoming so aware shall, r Provide written notice of default to the MortgaCor, declare the entire unpaid balance of the Mortgage Loan due and payable within ten days of said notice. Bervioing of Mortgage Loans f 1 Subject to the provisions for assignment described below, each Participant y y Corporation shall service the Mortgage Loans sold b it to the Cor ration and shall have full end authority, acting alone, to do an and all things In connection with such servicing Which It may deem necessary or desirable to carry out its serviaing responsibtlEt,es, unless contrary `to the express provisions of the Agreement, As compensation for such services, a Partiaipant,(and any successor) shall be entitled to receive the Service Fee, In addition, except as `limited by applicable law and available funds, each Participant j shay] be entitled to reimbursement to the extent approved by the Trustee for expenses incurred by It in connection with foreclosure proceedings, the receipt of Insurance Proceeds or the receipt of Liquidation Proceeds upon requisition therefor, which requisi- tion shall be submitted to the Administrator and delivered to the Trustee with the f Administrator's recommendation, In accordance with the Agreement. Additional servic- Ing compensation In the form of assumption fees, late payment charges otherwise may es or k f -3 7- x I s a ;f i i be received by a Participant to the extent permitted by law and to the extent not ' contrary to the terms of the Agreement. A Participant shall be required to pay all expenses Incurred by It in connec- tion with its servicing activities under the Agreement (including maintenance of its errors and omissions Insurance policy and fidelity bond) and shall not be entitled to ; reimbursement therefor, except as specifically provided in the Agreement. Any Participant may, with the consent of the Corporation and the Administrator, assign- or sell, all of its servicing rights and obligations under this Agreement to a related entity or to any other qualified Participant or to the Administrator. Any agreement to assign servicing rights and obligations shall provide ; { that the assignee must assume the servicing obligations of the Agreement with respect to k the assigned Mortgage_ Loans for the same Service Fee that would otherwise have been paid to the assignor and that the assignor Participant shall receive no remuneration with l respect to such transferp provided, however that the obligations set forth in the Agreement described under, "Origination of Mortgage Loans" with respect t� the ; repurchase of defective Mortgage Loans by the originating Participant shall survive such assignment as obligations of the originating Participant. s Each servleing Participant shall service Mortgage Loans in accordance with the servicing standards as set forth In the FNMA;.Home Mortgage Servicing Contract i Supp lement ,as it may be in effect' during the terms of the Program (the "Servicing Ouidei"), L as such standards may be specifically modified in the Agreement or may j be contrary th '#;e express terms of the Agreement, The servicing Participants shall not, uir however, be reqed to prepare, submit or file any forms or other documents required by such Servicing Guides except -as time referenced in the Agreement or as may reasonably be required from time to time by the Trustee, the Corporation or the ;1 Administrator. y All moneys collected by any Participant servicing Mortgage T.,oans pertaining to the Mortgage Loans may be deposited into a clearing account maintained by such Participant' and all Revenues shall be promptly deposited In a Custodial Account on a # ( daily basla, subject to withdrawal on the demand 'of the Trustee at any time, The, deposits in such accounts shall be insured by FDIC or FSLIC. The Participant shall remit to the 'Trustee for application in accordance with the Indenture after deduction of its ; Service Fee, on or before the fifteenth day and on or before the twenty-fifth day of each s calendar month,' all moneys'`deposited or held In the Custodial; Account, except that (1) any insurance Prooeeds shall be held in the Custodial Account pending the determina- tion of whether such moneys; shall be applied to the repair of the related property or l constitute Principal Prepayments, (ii) any Principal Prepayment representing payment in fi full'of a''Mortgage Loan shall be remitted, within five business days after recelpt� to the t c�rued'on a Trustee for application In accordance with the Indenture, and (III) interest any l Mortgage Loan for the ,period between the Closing Date and the Purchase Date shall be retained by the Participant. notwithstanding the foregoing, if at any time the amount on r { deposit in the Custodial Account shall exceed the lesser of $100,000 or the amount l f insured by FDIC or FSLIC, as the case may be, the Participant shall Immediately remit i C -38- I f I L } l ` the entire amount on deposit In the Custodial Account to the Trustee for application in ! accordance with the Indenture. All moneys received as Escrow Payments by the Participant shall be received in trust for the Corporation and the applicable Mortgagor k - and shall be deposited by the Participant in such escrow account or accounts as the ! i, Participant is required to maintain for like payments made with respect to mortgages :. which are being serviced for FNMA in the event any Mortgagor's escrow account Is iriaufficient for a payment required to be made from such account, the Participant shall ( advance such money to make the required payment. { The Participant shall be responsible for determining, the necessity of i instituting foreclosure action with respect to any Mortgage Loan, which it is servicing. The Participant shall submit a recommendation to the Administrator at such time as In the opinion of the Participant, foreclosure of a Mortgage Loan shall be necessary. If the Administrator concurs with such recommendation, the Participant shall >conduct all N I foreclosure procedures in accordance with the terms of the Agreement, . On . or ,before, the fifth business day of each month, the Participant shall submit to the Administrator a report containing information as to each Mortgage Loan it t is servicing -whici' A delinquent as of the last day of the preceding month, Mortgage ► Loans delinquent for sixty`days or more and the Participant's activity concerning such delinqueneyt and certain reports with respect :to collection and disburserrlent activities a and a; statement for the Custodial Account maintained by_ the Participant. Each . Participant shall also provide to the Corporation, the Trustee and the Administrator such other reports or information regarding the -Mortgage 'Loans being serviced by such s Participant as may be reasonably requested by any of them. On or. before 120 days after the end of a Participant's fiscal year, a servicing Participant at Its expense shall furnish . to the Trustee, the Corporation and the Administrator (i) an opinion by a firm of independent certified public accountants on the financial position of the ,participant at the end of its fiscal year and the results of operations and changes in financial position of the Participant for such year then ended on the basis of an examination conducted in accordance with generally accepted auditing standards and (if) a statement from the independent certified public accountants i l concerning oomplianee with servicing standards on the basis of an examination conducted substantially in compliance with the audit program for mortgages serviced for FNMA, h the United States Department of Housing and Urban Development Mortgage Audit ! Standards or the Uniform Single Audit Program for Mortgage Bankers. ' f On or before April 30 of each year, each Participant shall furnish "the Administrator with a sta',pment with respect to all Mortgage Loans being serviced by 1 such Pirtleipantt certified by 'an officer of the Participant; certifying that (1) all insur- i &nee Is, being maintained, is fully paid and complies with the Agreement, (ii) all taxes have been paid as and when duct (Iii) all Inspections have been made as required and (Iv) analysis has been made for each Mortgage Loan to insure sufficient moneys are being collected In escrow for the current year. j i -39- a' i .4 \FJ j : Termination of a Participant The Corporation and the Administrator shall periodically review the performance of each Participant to determine if the Participant Is performing in aecnr- 1 if the Corporation or the dance, with the standards required by the Agreement. Administrator determine that any Participant is not performing in accordance with such standards, the Corporation or Administrator shall notify the Participant of any such deficiency, and if such deficiency Is deemed by the Corporation to be sufficient to warrant termination of the Participant, the Corporation shall notify` such Participant the are`terminating.the services of such Participant and the date on which such tha t y termination shall be°effective. upon the happening of any one or more of the following events, the Corporation, upon the reeommendstio3t of the Administrator may terminate the ; Agreement with respect to any Participant: .' 1, failure by the Participant (if servicing Mortgage Loans) to remit to the Trustee for deposit in accordance with the indenture any Revenues received by such participant as required by the Agreement; 2, any representation of or warranty by the Participant to the ' Corporation, the Trustee or the Administrator shall be false in any material respect; 3. failure of the Participant to remit the Program Participation a ,; Fee, and the resolutions of the board of Directors of the participant, or to deliver the opinfong`of counsel and the Agreement, executed by a duly ' author}zed officer of the Participant; , 4. failure of the Participant to comply in all respects with its Obligations concerning the origination and closing of Mortgage Loans as set i forth in the Agreement; S. failure by the participant duly to observe or perform in any material respect any other covenant, condition or agreement in the Agreement to be observed or performed, other than an referred to In para� i graph (1}, (2), (3} or (4} above, for a period of 3.0 dvys after written notice to such Participant from either the Corporatiot,� the, Trustee or the Administrator; specifying such failure and requesting that it be remedied; E provided, however, if the failure stated in the notice cannot be corrected I within the applicable period, the person giving such notice,shall.conaent to a.reeaonabie extension of such time if corrective'aetion`18 instituted by the • Participant within the applicable period and diligently pursued until' fully i f ,; corrected# 6, a decree, order or determination of a court, agency , or r supervlsor 7 authority having Jurisdiction in the premises taking possession f { , at the Participant or its asset° r for the appointment of a conservator, receiver or ,liquidator In any it vency, readjustment of debt, marshalling of assets and liabilities orlsis ,�� proceeding affecting the Participant or substantially all Of its propertu , . 'or for the winding up or liquidation of its 6 affairs, if such decree or order shell have remained in force, 'undischarged i or`unstayed for a period of 60 days; 7, consent by the participant t the appointment of a conserva� , ( iI receiver or liquidator in any insolvency, readjustment of debt, tor, marshalling of assets and liabilities or similar proceedings affecting such ro erties; Participant or substantially all of its p p 8. -admission in writing' by the participant of its inability to pay Its debts generally as they become due, or the filing of a petition to take applicable bankruptcy or 'insolvency statute, or the Advantage of any pp i making of an assignment for the benefit of its crt ditofs; or g. the Participant . sha11 experience a delinquency ratio., for Mortgage Loons 80 days or more delinquent greater, than either ( i)_double the Average delinquency ratio of;,the other participants (comparisons being made on bank-to-other-banks, oavin6� and loan aa9ociation�to-other-savings and loan associations or prlvuto mortgage lending company-t�th{or j ' lendtn eampanfes basis, as the case may be) . for p"rivate mortgage ratio for Mortgage Loans 60 days, delinquent, tar (31) double the,delinquenoy conventional mortgage l6ans on ones-to-four unit dwellings `60 days delin- € uent set forth from tf6e to tune h% the Federal 11ome Lawn Bank "Board q rt containing "such data prepared by the News or any similar p'ublioatfo Statistical Divisio office ideltnquenoy ratio lsegreater; dandl such double Bank Board, whichever j delinquency ratio continues for d fne(5) above, t re tifyaits delinquency 30-'day cure period, p ratio. 1 Upon; termination of the Ag reement with respect to any Participant, such participant shall, within 30 days, deliver or cause to delivered to the .os all ieed by row such Participant, all moneys Revenues received byesuoin Part cipaMt Mortgage, remitted such pertiolpant ands all to''the, Ttustee, The paarticipant wi11 indetnnind all loss, d tnageoa d expenses (irtdluding the Trustee and/or the' Administrator harmless frosty any a incur in securing the 'deiivery of all reasonable Attorneys' fees) that any of them may ' the transfer of All escrows or the 'remittance b such 1?artioipant caved by the i !flea, Mortgage Loan serviced y _ ! Participant with respect to any I I. I I � i f v r � t i Y r ` Merger or Consolidation of a Participant Y Each Participant will agree that during the term of the Agreement It will remain to good standing under the laws governing its creation and existence and qualified , f under the laws of the State of Texas to do business, in the State of Texas, It will not dissolve or otherwise dispose .'of all or substantially all of Its assets and it will not J or more voluntarily consolidate with or merge into any that the partpoipant may, without or entities to consolidate with or merge Into it; provided i violating such agreement, consolidate with or merge into another entity, or permit one or more entities to consolidate with or merge Into 'it, or sell or otherwise transfer to another such entity all or substantially all of its assets as an entirety and thereafter dissolve, provided the surviving, resulting or transferee entity, as the case may be, shall have a net worth equal to or greater than that of the Participant immediately prior to such acquisition, consolidation or merger, shall be qualified under the laws of the State 4 of Texas to do business in the State of Texas, shall be qualified under the laws and have the necessary approvals required of the Participant under the Agreement to perform the f' { oblige- Participants duties under the Agreement and shall assume to writing all of the ; tions of the Participant under the Agreement. a � a Administration of the Program 1 t The Administrator shall have general responsibility for 'supervising the i, i program, for and on be of the (A)rporation, In accordance with the terms of the ' Agreemen and perform any and all things t., The Administrator shall have full power and authority, acting alone, to do ' which it may deem necessary or desirable to carry out its duties and responsibllltles, unless contrary to the express provisions of the Agreement. 'The Administrator shall be irrevocably authorized and empowered by the Corporation to } f execute and deliver nor and on behalf of the Corporation, with respect to the Mortgage '[.cans, the prop fiver encumbered by the Mortgages and any sots to be performed by the Administrator' unde3, the Agreement, any and all instruments, documents and writings necessary or desirable to fulfill its duties and responsibilities as Administrator of the program. On or before the fifteenth business day of each month, the Administrator shell provide to the Trustee, with a copy to the Corporation, a report based upon reports ; from,the Participants as to the total Service Fees retained by the participants and the f the collections remitted the Participants to the Trustee and deposited in the nature o i Revenue Fund on or before the fifth day of the current month. a tion The Administrator shall also be responsible for reporting to the "Corpora he compliance by each Participant with the Agreements. In the revie and the Trustee the w of each Participant's activities in connection with the T'rogram the Administrator may R rely upon a certificate executed by an Officer of the Participant with regard to such participant's compliance with the terms of the Agreements. The Administrator will, during the Origination Period, provide the Trustee and Corporeatii n n or bef al ore amoun fifth business day of each month a report indicating the egg g P of -42- i3 ----------- i l G Mortgage Loans Purchased during the origination Period from each Particlpant and from a all Participants as a group. Following the Purchase of any Mortgage Loans, the quarterly during the term Administrator will furnish to the report oof iservicecseand, whenever,I according to such of the Program an evaluation t report, the performance of such PartieSpanconsistently in the fallsrtooheotp minim consistently fails to comply with the Agreements ar sibilities for. dealing with delinquencies 9thet ilthehAdminiGtrtr shall` not so notify the a the Participant of such failure, axe p such Participant if to the Administrator's opinion, the procedures ithe delSnquencies. b in the Participant are adequate and Itsj efficient gmentedetermines that a Participant should be ; ud Its � In ' g 1 fnSstrator, j Administrator steal. terminated In accordance with the terms of the Agreement, the Adm , he Corporation and the Trustee and issue such other notice or recommend such action to t propriate in accordance with the Agreement. take such other si .don as may be ap s f. The Administrator shall provide to the Corporation and the Trustee a Jelin- uency report and a' foreclosure report on or before the fifteenth also day of o aor 9 the term of the Program. ; The Administrator w.Ih also provide any ;. : month during ram wht,:•'; may' be reasonably requested by the special reports relating to the l?rog Corporation or_ the' Trustee. In addition, the Administrator will notify participants able to r changes in the Average Area Purchase Price and Maximum Acquisition Cost app each Mortgage Loan upon its receipt of notice. The Administrator will review the Mortgage Loan file p ertaining to each � Mortgage Lean submitted by each a MccPage fl,onn Purchase fiietheyMorigageLoaniois in ;- determine rVhether, according to the e Loan, file pertaining to any complianea,„with the Agreement. In the event the Mortgag Mortgage 'Loan is in the Administrator's Judgment, defective .or the Mortgage Loan is i otherwise not acceptable for Purchase Mortgage o accordance with the terms ot the Loan file to the Participant that submitted It the Administrator may return the Specifying to the Trustee the defect and the action, if any, Which uch 4 for curative action, uch defect be taken Tarn i!iiegpend pending correction of the'diefect�as specified In ainotice may or otherwise l eomm+ nicated to the Participant. ure of At such time as a Participant she'lsubmit sits frecommendation Nto gtihe ; t Loan is necessary, the Part p , Adiistrator. mhe Administrator shall, within business days of the rece mn hin ten ipt of a In a aht's recommendtion, either approve or reject such recommendation and notify Part p ble for toe Participant and the Trustee of Itci(ant 000naerningdthenemploym employment attorineys, the � eonsultation and advice to any Participant Institution of legal proceedings, the collection of any deficiency Judgment, the acep- ¢ i tame of any compromise proposal and any other matter pertaining to a delinquent t f Mortgage Loan. { € suggested a nby Administrator rpartSc pant available made to any tproperty advice In regard encumbered byta any repairs i l -43- r a f f s 1 Mortgage on any foreclosed property, Including any repairs to be made to property damaged by fire, wind, water or other cause, whether or not covered by any Insurance; i however, when the amount of the damages exceeds $2,500, the Participant will submit to the Administrator the Participant's recommendation regarding the repal: of the property, I;' the Administrator concurs with the Participant's recommendation that repairs should be undertaken, and if the cost of such repairs Is not fully covered. by Insurance Proceeds, the Adn?:nistrator will make Its recommendation to the Trustee regarding the disbursement of funds by the Trustee to the Participant for such repairs ; and the amount of such funds, If no insurance policy is in effect covering such loss ' because of Participant's negligent failure to keep the requires policies in for<le, then the ! Participant must pay for such repairs, The Trustee shall not be obligated t:l disburs(' any funds If such disbursement would prejudice any payments to the Bondholders required by the Indenture. { The Administrator will obtain and maintain at its own expense a blanket a, fld ,ity bond and an errors and omissions Insutlanee polley, in ;full force and 'effect { OL )ughout the term of the Agreement, covering the Administrator's officers, employees { and other persons acting on behalf of the Administrator In Its capacity as Administrator under the Agreement. The amount of coverage shall be at least equal to the coverage that would be required by FNMA, with respect to the Administrator if the Administrator were servicing the Mortgage Lonna for FNMA in addition ' to other mortwages .bang serviced by the Administrator for FNMA, In the event that any such bond or policy shall cease to be in'effect, the Administrator shall obtain from an issuer or lnsurer-i licensed In the $tate of Texas and 'acceptable to' the Trustee a comparable replacement bond or policy; as the case maybe. Any amounts collected by the Administrator under any such bond or policy relating to the Mortgage moan shall be deposited in the Revenue Fund and applied pursuant to the Indenture. �# y The Administrator shall be required to pay all expenses Incurred by It in 5 connection, with Its supervisory activities and shall not be entitled to reimbursement th.`k (for, unless funds Are available and reimbursement is permitted under the terms of ; the Agreement. The Administrator also agrees to pay (1) all costs and expenses'Incurred i by the Trustee or the Corporation in investigating the Administrator's activities when, In the opinion of the Trustee or the Corporation, such investigation is warranted on the basis of adverse information about the Administrator and (11) all costs and expenk�es Incurred by the Trustee or Corporation in replacing the Administrator In the event. o' default of the Administrator under the terms and conditions of the Agreement. On or before 120 days after the end of the Administrator's fiscal year, the Administrator, at its expehse, shall furnish to the Trustee and the Corporation (i); an s opinion, by a firm, of Independent certified public accountants on the financial position of l ' the Administrator at the end of Its fiscal year and the results of operations and 6hanges j in financial position of the Administrator for such year then ended on the basis of an examination conducted n accordance with generally accepted auditing standards and j (ii) if the Administrator is then servicing any Mortgage Loans a statement from the independent certified public accountants concerning compliance with servicing standards on the basis of an examination conducted substantially in compliance with the audit -44- I t i E program for mortgages serviced for FNMA or FHLMC, the United States Department of i Housing and Urban Development Mortgage Audit Standards, or the Uniform SIng1P Audit Program for Mortgage Bankers. . i The Administrator may accept the assignment of any Participant's servicing rights and obligations under the Agreement and will assume the servicing rights and i. obligations of any Participant whose servicing obligations are terminated pursuant to the ' l Agreement, in which event the d-.ties and obligations to service the Mortgage Loans \ previously serviced by such Participant shall thereafter be cpplicable to and carried out 5 by the Administrator, under . the terms and conditions applicable to any other Partiei,�ant. in performing its obligation and duties in connection with the servicing of i any Mortgage Loans under the Agreement, and for purposes,of certain provisions of the t gr capacity as ' . A eement, the Adrnfnistratur will be considered to be acting in its 1 f Administrator. The Administrator shall be entitled :o the same Service Fee that other- wise would have been retained b a Participant with respect t r f. t of such I? Y SUMMARY OF CERTAIN PROVISIONS OF TINE INDENTURE f The following Is a summary of certain provisions of the Indenture and is qualified in its entirety by reference to the Indenture. For a de46r3ption of certain provisions of the Indenture relating to funds, accounts and the .ftow of 'funds, see "Security For The Bonds." I Assipment and Security i Pursupnt to the Indenture, the Coryoration will assign 911 mnrleys, securities and funds 'held by the 'Trustee LVnder and subject to the Indenture . (�xoluding Ekeess Investment Earnings, If any, required to be remitted to the United ,States government ` pursuant to the Indenture) and alilts rights under the Agreement to the•.Trustee for the benefit of the Bondholders. In addition, the Corporation will 'essign'all of Its right,'.title and interest in the Mortgage Loans to the Trustee for the benefit of' the Bondholders together with all principal and Interest received by the Corporation on or with respect to ` the Mortgage Loans. Revenues 'received by the Participants with respect to the Mortgage Loans wili"be held in a Custodial Account by each Participant, with withdrswal rights;vested only In the Trustee, The Trustee undertakes to perform only such dutt6s as I are specifically set -forth in the Indenture and the Agreement. Aeduiaition Fund J Moneys in the Acquisition Fund are to be used to purchase Mortgage Loans y E in the submission of the documents by Participants as required by, and upon the terms And conditions spe�afied In the Indenture and the Agreement. Any amounts in the Acquisition Fund not used to pufchase Mortgage. Loans within 16 months of the date of 1 I il.liTir f...:. ...... .. • /fir..: 4 f Y r I E delivery of the Bonds, are to be transferred to the . Redemption Account to be used to redeem_Bonds# interest earned on amounts�� of eachiyearn Fund is to be transferred to the Revenue Fund on March 1 and sep ally prior to Application of moneYse Acquisition espeet to such Mortgage Loan and und to the purchase Mortgage Loan, the Trustee is to have received ent of such Mortgage Loans to the Residence securing repaym 1 (A) An affidavit executed by the Mortgagor in which the Mortgagor certifies, under penalty of perjury, that the following is true and correct, namely:_ {1) that the Residence is a one-family Residence, and if a newly constructed Residence, the construction of such Residence is complete; 13 or wlll 00 M that the Mortgagor nupy the Residence as his principal (Z) ; residence within a reasonable time not to exceed 80 days after final closing N of the Mortgage Loan; that the Mortgagor will maintain the Residence as his or her (3) r principal residence so long as the Mortgagor is the Mortgagor on the Mortgage Loan; I {4? that she land appurtenant to the Residence wiw 'not use maintain tile beam livability of the Residence; the Mortgagor i more than 1896 ot` tite total area of the Residence in his or her trade or ' use the I'ti^sidenee as an investment property or as a x business ""or to 4 recreational o 11 a other hti(an e and the land inoidecftally, aapsourcenof to to the R k will not prov Mortgage-; ,; ' '(5) the Residence is located within the Eligible Loan Areal {8) that the Mortgagor has had no Present.ownership Interest In i a principal residence at any time during the 3--year period prior to the date ' on which the Mortgage is executed or in the case of an assumption of a 1 Mortgage Loan under the Prgrram+ assumed by the Mortgagor; y (1) that the Acquisition COs' of the Residence does not exceed i I 110% of the Average Area Purchase Price; (' ($j that the Mortgagor has not entered into any aCree erntwit i the sRller of the Residence, any developer, contractors y moneys In excess of the T f pursuant to which the Mortgagor has agreed to Pay �f the Acquisition Cost of the Residence or pursuant to which any " Residence has been left unfinished or any fixtures or, other srah3tectural a pointments have been omitted or removed from the Residence in order to reduce the Acquisition Cost; _4g- 4 4 1 r I a {9) that the Mortgagor has not been a party to a deed of trust, ' p g ' a in escrow or an oonditiona sales contra actp in d e agreement to hold title y at any, time prior to executf n of thee Mort of paid off) on the Residence Take-Out Loan; gage, except in the case of a f (10) that the Mortgagor will not use an ' the Mortgage L,)an to acquire or replace an existing imor gtageproceeds o eed of trust under which the Mortgagor may be obli E Take-Out Loan; gated, except In the case of a , I, (11) that the Mortgagor has read and understood the affidavit and the definitions of Acquisition Cost, Average 'Area Purchase Price, Maximum Acquisition Cost, Present Ownership Interest and Take-Out Loan # ' attached to the affidavit; t (12) that the Residence is'not located on leased land; (13} that the Mortgagor has been informed and understands that authorized representatives of the Partioipar;' intend to conduct investigate } { tions to assure the truth of the aforementioned certifications at` I� of execution of the Mortgage and that the, Mort the time such in[ormatlon or access to such Information, Inc d Including but not limited to 4` I utility service billings, Income tax returns and employer records as will assist the Participant in Its investigation; I (14) the Mortgagor understands that at a ( any t Possession Y ransfer Po. n o of f ti the. Residence may result in the entire unpaid balan�1 of the I Mortgage Lbar, becoming immediately due and payable, (b) any assumption Of the Mortgage which secures the Mortgage Loan may result in the entire .III unpaid balance of the Mortgage 1 payable and (e) any untrue or correct statement in such affidavit mau result in the entire unpaid balance oP said Mort Immediately due and payable; and gaffe ' Loan beeominb s f I (15} that the Mortgagor has no reason to believe that the affidavit Is false and he has been Informed and understands that perjury is punishable a by Imprisonment in the f4 to prison for a period of years or a fine or both; t (E} An affidavit`executed by the Seller of the Residence in which the seller certifies, under emit of p Y perjury, that the following is true and correct, namely: (1) that the Reside ( nce is a one-family Residence and if a newly Constructed house, the construction of such hou%e is complete; -47- e aj 11 11Q96 q! the Avera a Area Purchase Cost of the Residence does ,cot exceed { (2} that the Ac Gisition {{ , g e Price; i (3) that the settlement and financing costs do not exceed, the i usual and reason0le costs that would be paid by the Mortgagor where financing was not provided through the Bonds; (4) that the seller has not entered into any agreement with the Mortgagor pursuant to which the Mortgagor has agreed to pay moneys in excess of the Acquisition Cost of the Residence or pursuant to which any Portion of the Residence has been left unfinished or any fixtures or other architectural appointments have ' been omitted or removed from the Residence in order to reduce the Acquisition Cost; l • (5) that the Residence is located within the Eligible Loan Area; (6) hat the Residence Is not located on leased land; r h (7) that the seller has read and understood the affidavit and the definitions of Acquisition Cost, Maximum Acquisition Cost and Take-Out : Loans and Average Area Purchase Price attached to the affidavit; x (8) that no portion of the proceeds of the Mortgage Loan will be ' used to acquire or replace an existing mortgage or deed of trust under ! which the Mortgagor may be obligated, except in the case of a Take-Out r , Loan; . {9) that the seller has been informed and understands that authorized representatives of the participant intend to conduct investiga- tions to assure the truth of the aforementioned cerilfieations at the time of execution by the seller of the affidavit and that the seller,.agries to 11 provide such information or access to information, including but not limited to business records of the seller, as will assist the Participant in its Investigation.- and i (14) that the seller has no reason to believe that the affidavit Is false and he has been informed and understands that perjury is punishiAble by Imprisonment in the state prison fora period of years, s fine, or uoth; j (C) A certificate executed by an authorized officer of the Administrator i on a date prior to the date of Purchase of the Mortgage Loan stating: (1) that he has read the affidavits referenced in paragraphs (A) and (8) above; i (2) that he is informed that the applicable Participant has con- ducted an investigation regarding the truth of the facts set forth in said affidavits; and / -43- P s it . i i (3) that no facts have corne to the attention of the authorized ' officer executin the officer's certificate which would' cause him im to I disbelieve or doubt the truth of the affidavits or of any portion thereof; (D) A certificate of representation and warranty executed by an ' 4 authorized representative of the Participant from whom the Trustee is purchasing the _ Mort gaga.. Loan sta tl n t i (1) that he has read the affidavits referenced in paragraphs (A) � and (B) above; i (2) that he has conducted or has caused to be conducted an Investigation regarding the truth of the i`aetr set forth In said affidavit (the nature of which investigation shaft be describod'in 'detail in said representa- tion and warranty), which Investigation complies with the requirements of the Agreement to which said Participant Is a party; , (3),' , that no facts have come to the attention of said authorized representative as a result of said investigation or otherwise which would �. cause him 0 disbelieve or doubt the truth of the affidavit or of any portion thereof; and I (4) that the Mortgagor Is a First Time Homebuyer. (E) Copies of executed income tax returns filed by the Mortgagor with the internal Revenue Service for the three years prior to execution of the Mortgage, Loan or an affidavit of the Mortgagor stating that he was not required to file such a return for any applicable year. Certaln Tu Coveftnts 1 The indenture provides that, in order to insure compliance with Section 103A of the Code: (1) the Corporation Is to cause each Participant to Investigate diligently the truth and validity of each affidavit executed by a Mortgagor and a seller in accordance with the Agreement; (11) If the Corporation or the Trustee becomes aware subsequent to the purchase of a Mortgage Loan that the Mortgage Loan does not comply with the j requirements of Section 103A of the Code or the Agreement, the 'trustee is promptly to i pursue the remedies specified In the Agreement; (III) Upon payment of the principal of [ and premium, if any, and interest on the Bonds, and any expenses and other amounts F required to be paid under the Indenture, the Corporation and the Trustee are to execute such documents or do such other things as may be necessary to discharge the Indebted- ness then represented by the Mortgage Loans and to , repay to the Mortgagors any amounts received from them but not required to be used to pay the principal of and Interest on the Bonds or any such expenses or other. amounts; and (tv) at no,time 'during the Bond Year .shall the Trustee pe,�mlt the aggregate` amount of nonmortgage i -49- i I � f t. , -,^.,r . .. .,..• `F !h.,e • ' ., , .. — .i.1 . .f1+1;. 1 .[ti:}t -vL.:y. ri r. 4 a hivertments held under the Indenture having a yield in excess of the Yield on the Bonds to exceed 150% of the annual debt service on the Bonds. u J Investment of Funds and Accounts s Up ofi Issuance of the Bonds and from time to time thereafter, the Trustee will Invest moneys on deposit and,to be deposited In the Acquisition Fund, Mortgage ; Reserve -Fund, Deb! Service Fundy Special Expense Fund and Revenue rand pursuant to the Investment Agreement. Pursuant to the Indenture, the Trustee will be directed to Invest and reinvest any other moneys held by It in any fund or account €n Investment Obligations. investments not made under the Investment Agreement shall be made under prudent investment standards`reasonably expected to produce the greatest :investment Yield. Earningson any such investments will be first used to offset any investment losses In the fund or account from which the moneys used to acquire the Investments, have ' come, and then Will be credited to the Revenue Fund. For any purpose required or permitted under the Indenture, the investments ! held In any fund,'or account are to be valued by the Trustee at the; market price thereof, except that amounts held under the Investment Agreement are to he valued at the lesser of the par value or the purchase price of such Investments, exclusive thereon, of accrued interest K Disebrrge of Lien of Indenture If the Corporation shall pay Or cause to be paid, or there shall'be otherwise paid, tp or for the owners of the Bonds ,tho principal of and interest due or to become due thereon at the t�imes and In the manner stipulated therein, and shall pay or cause to be i paid to the Trustee all sums of moneys due or to become due according to the provisions e of the Indenture, then the estate and rights created thereby wily terminate, except with i respect to moneys or securities held by the Trustee for the payment of the principal of . and interest on the Bonds. Default and Remedies i indenture: Any of the following events constitutes an "event of default" under the i 1. Default in the due and punctual payment of any interest on any Bondi 2. DefauR in the due and punctual payment of the principal of any Hoed, Whether at the stated, maturity thereof or when called for redemption (including any sinking fund redemption); or i -50- i tr c t ; f F � { t � ` 3. Default in the performance or obsery once of any other of the I covenants, agreements or conditions on the' part of the Corporation contained In the Indenture or in the Bonds and failure to remedy the same after notice thereof pursuant to l r the Indenture. I J No default under (3) above shall constitute an event of default until actual notice of such default by first class mail, (postage prepaid) shall be .given to the L po y y than 25% In aggregate principal Corporation b the Trustee or the Owners of not less amount and Compounded Amount of the Bonds then outstanding and the Corporation shall have had 60 days after receipt of such notice to correct such default or cause such default to be correctedp and shall not have corrected such default or caused such default to be corrected within the applicable period; provided, however, if such default cannot be corrected with the applicable' period, It shall not constitute Ain event of default if corrective action Is instituted by the Corporation within the applicable period and diligently pursued until the default is correct, Upon the occurrence of an event of default, the Trustee may pursue any F available remedy at law or in equity to enforce the payment of the principal of an t Interest on ,the Bonds then outstanding, including enforcement of any rights of the ;! Corporation under the Agreement* ' If an event of default shall have occurred, and If requested so to do by the holders o* no less than 25% in aggregate principal amount and Compounded Amount of the Bonds then outstanding, and, indemnified as provided In the Indenture, the Trustee a shall be..obligated to exercise one or more of the rights and powers set forth In the s Indenture as the Trustees being advised by counsel, shall deem most expedient In the . Interests of the Bondholders. # f Amount of Bonds then of a majority, in aggregate principal amount and Compounded ` The ow en outstanding shall hate the right, at any time, by an instrument or Instruments in writing executed and delivered to the Trusteep to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of ; the terms and conditions of the Indenture, or for the appointment of a receiver or any other proceedings thereunder; provided that such direction shall not be otherwise than in ; accordance with the provisions of law and of the Indenture. j Waivers of Events of Default The Trustee may at Its discretion waive any event of default and its consequences and shall do so upon the written`request of the owners of (1) more than 66.2/396 in 'aggregate principal amount and Compounded Amount of all the Bonds then outstanding in respect of which default in the payment of principal or Interest, or both, exists, or (11) more than 60%In aggregate principal amount and Compounded Amount of all Bonds then outstanding in the case of any other default; provided, however, that there shall not be'walved '(1) any event of default in the payment of the principal of any`out - standing Bonds at the date of maturity specif led therein or (2) any default In the payment I i j { i � . wtt$n due of the interest on any such Bonds unless, prior to such waiver or rescission, all arrears of interest or all arrears of payments of principal when duet as the case of the ; with Interest on overdue principal at the rate borne by the Bonds, a 1d's11 tort and III Trustee in connection with such defoaruljn shall ease have y proceedings taieen by the Trustee on of any such waiver or reseissien, such ease the Corporation, the Trustee %ned or determined � i' such date ult shall have been discontinued or shat ',en'} the Bondholders i account of any adversely, then and in ever, sitians and rights under the indenture, but no such it shall be restored to their former Pa waiver or rescission shall extend to any subsequent or other default, or impair any right consequent or other default. i- i A hta and Remedies of Hordlwlders nd shall have No owner of any Bove any right to institute any suit, action or proceeding e►t law or inequity for the enter notified4ashgrovideduin 'theelndentureeor of P ;i has occurred of which the Trustee has b.en an which the Tr not deemed to have than2}254bh3nefaggreB el principal a me an ountVthe of default' and the owners of Compounded Amo4nt of $ond& then outstandingr�unity either to proceed to exiereise the Trustee and shall have offered,it, reasonable oppo i In Indenture or to institute such action, suit or. proceeding in their powers granted rovided In the own name or names, (3) they have offered to the Trustee indemnity asp s indenture, ;and (4) the Trustee ;shall thereafter edit or in its awn name. All proceedings grented, or to institute such action, suit or proceeding or En; equity at lave snail be instituted, had and •maintained for the equal and ratable iF ' ttenetit of the owners of all Bonds then outstanding. However, nothing contained In the Indenture shall affect or impair'the right of 'any Bondholder to enforce the payment a-of y F the princlpei of an interest on any Bond at and after the maturit a thereof, or the oblige- t ti of of the Corporation to pay the principal of and interest on each of the Bonds to the . re ative owners thereof at the time, place,: from the source and in the manner in the Bonds expressed. ' &Vplemental hoentures j The corporation and the Trustee may enter into indentures supplemental nt Bonds for an one or more of the following purposes: the Indenture, but not inconsisteen tenth the terms of the Indenture, without the consent I of, or notice to, the owners of th i (l) To 'cure any ambiguity or formal defect or omission i7 the , { Indentures (2) To grant to or gunfer upon the Trustee for the benefit e ft the ! holders of the Bonds any additSonal benefits, rights, remedies, powers e authorities that may lawfully e granted ake any hangetwhi h, inothe �udgmenrt of the Bonds or he Trustee S of the Trustee, is not to the prejudice of the holders of the Bonds; -52 l i 1 (3) To subject to Oe Indenture additional revenues, properties or collateral; (4) To comply with the provisions of Section 103A of the Internal ! Revenue Code of 1954, as now or here after amended, and any applicable regulations or rul.,tgs promulgated or issued thereunder if such amendment, In the opinion of nationally recognized counsel experienced in the area' of municipal bonds, will assist in clarifying the applicability of said Section 103A to the Mortgage Loans and to the Bonds or will insure that the kk tax-exempt status of interest on the Bonds is not impaired; { I (5) To modify, amend or supplement the indenture or any inden- ture supplemental thereto in such manner as to permit the qualification thereof 'under the, Trust Indenture Act of . 1939 ;or any similar federal statute then in effect or to ,permit the qualification of the Bonds for sale under the securities laws of the states of the United States of America, F and, if they so determine, to add to the Indenture or any Indenture supple- mental ,'thereto such other terms, conditions and provisions as may be permitted by the Trust Indenture Act of 1939 or similar federal statute; or r; To evidence the appointment of a separate trustee, 8 ;{ ! co-trustee or the succession of a new trustee or paying agent under the ; i Indenture. : !` Exclusive of supplemental indentures for the p u rposes set forth in the � I' previous °paragraph, .the, consent of the owners of not less than 66-2/3% in aggregate principal amount and Compounded Amount of the Bonds then outstanding is required to approve any supplemental indenture, except no supplemental indenture shall permit without the consent of the owners of all Bonds outstanding (1) an extension of the maturity date or mandatory sinking 'fund redemption date of the principal of or the interest on any Bonds, or (il) a' reduction In the principal amount of any Bona or the rate of interest or Compounded Amounts or sinking fund redemption requirements thereon, or „ii0 a prwilege or priority of any Bond or Bonds over any ether Bond or Bonds, or (iv) a i reduction In the aggregate principal amount and Compounded Amount of the Bonds' required for consent to such supplemental indenture, or (v) the creation of any lien other than a Ilen ratably securing all of the Bonds at any time outstanding, or (vi) anymodifi-• r cation of the trusts, 'powers, rights, obligations, duties, Oemedies, immunities and ; privileges of the Trustee without the written consent of the Trustee. I If a Participant is not in default under the Agreement at such `time, no f supplemental indenture affecting the Participant's rights or obligations or in any way f changing the priority or use of moneys under the Indenture or the Agreement will become ! effective<unless and until the Participant shall have consented to the-execution-and i 1 delivery thereof, I i i { E f s f i! Amendment of Agreement The Corporation and the Trustee shall without the consent of or, notice to # the Bondholders consent to any` amendment, change or modification of the Agreement r (but only upon the prior consent of the Administrator) as may be required (1) by the { defect n omtasion, g(iit) so as provisions. of the A reement, (11) for the purpose of curing any ambiguity or formal to add additional rights acquired In accordance with the • provisions of the Agreement which, in the Judgment of the Trustee, are not to the e p,oejudIce of the 'Trustee or the'owners of the Bonds, (IV) to assure that interest on the Bonds is exempt from federal Income taxation or (v) in connection with any other change t. therein which, In the judgment of the Trustee, is not to the prejudice of the Trustee or the owners of the Bonds. Except for the amendments, changes or modifications as provided In the p receding paragraph, neither the Corporation nor the Trustee shall consent to any other n ndment, change or modification of the Agreement without the prior consent of each P Participant and the Administrator and the giving of notice and the written approval or f consent of the owners of not less than 66-2/3% in aggregate principal amount and Compounded Amount of the Bonds at the time outstanding given and procured as provided in the Indenture. Nothing contained In the Indenture_, shall permit or be construed as permitting a reduction of the aggregate principal amount and Compounded Amount lot Bonds,' a reduction in the percentage; the owners of which are required to f consent to any amendment, change or modification of the Agreement or a reduction in,' . or a postponement of, the payments: under the Agreement without the 'consent of the owners of all of the Bonds then outstanding. For purposes of all actions by holders of a specified principal amount of Bonds under the Indenture, the Compounded Amount of Compound Interest Bonds shall be deemed to be the principal amount of such Bones. LEGA1W`PY AND TAR R%IfMP"oN 1 All legal matters In connection with the issuance of the Bonds are subject to the approval of Dumas, Huguenin, Boothman & Morrow, Dallas, Texas, Bond Counsel. In their ophilon, under existing statutes, regulations, published rulings and judicial decisions, j interest on the Bonds is exempt from all present federal Income taxes, assuming compli- ance with certain provisions of the Mortgage Subsidy Bond Tax Act of 18809 as described below. Certain legal matters will be passed upon for the Underwriters by Chapman and Cutl6r, Chicago, Illinois,,Counsel to the Underwriters. Fees payable to Bond Counsel and Counsel to the Underwriters are contingent upon the sale and delivery of the Bonds. Section 103A of the Internal Revenue Code of 1964, as amended (the "Code"), provides that the interest on the Bonds will be excluded from gross ',income E under Section 103 of the Code If certain requirements are met, The exemption of the Interest on the Bonds from federal income taxutlon is dependent, in part, upon the Corporation's performance of certain covenants and requirements in the Indenture, f , F -54- I ! I i 7 t k 2 r attempt in good faith to meet certain require- b � , 3 Corporation must (a) ? 1 the Corpo Lo are made, Including establishment a� 5peoif ical y• rooedures to Ensure compliance, and (b) insure that at least 9646 ; ments'of Section 103A before the Mortgage reasonable p Upon discovery that, on the`basis', the true Mortgage Loans Mee�,oanhdoesLknot nnfact meet the requirements of Section' 103At the faits, the Mortgag 4 is required to take corrective action within a reasonable period. r Corporation Regulations under ,. 'l'ttie +'sa{e harbor" provisions of the Temporary Treasury met on the basis Of i provides in ef{eet, that the g5`� requirement may nanced by the Mortgage Seetton 103A p o and sailers of trie residences being ; affidavits of all mortgagors plc s end certain information_ shown on the Federal income tax returns of the Loan even though the relevant information in such affidavits and returns should mortgagors ' and The Agreement a R t u!tionst under QctIon 103A safe ultimately prove to be untrue. ra Treasury f%g a Loans (and harbor'" proeedure3 of the Temporary ; require certain affidavits anvuractes of such affidavits and certifications) by the penalties for inaccuracies provide p ort a ors, the sellers 04 the ,Residences that the requirements Corporation, of Section Corporation, the i g g ,the Corporation to_establish aceurste, are believed by a Loans I ;11 be sattaf led. a II 103A relating to the Mortgag other requirements relating to, the i e earnings (i{ Section 103A also contains Berta;.. structure of the program, the terms �Ef t rest on Mortgage ie Sonde will be excluded f from gross sir et to certain funds. The ood faith to meet these jonal any) with respe ration has attempted in g to Comply with ! Income only if the Corpo eed.to take all steps necessary requirements and the Corporation has age ration to meet these requirements Is due trements and any {allure by the Corporation l with such requirements. these requ i to an inad`+erteht error after taking reasonable steps to campy + ar to comply with these requirements so i ration has also covenanted in the lndnture to meet these requirements and the" The Corpo greed to take an steps necessary Corporation has age s_ long as any of tkle Bonds are ou"�standing Section 103A. In the'oolnion of Bond The Corp)ratton believes that the procedures and covenants described above n compliance should assure ooMplfat�ce with the requirements o! Section 10 t will be satisfied. Counsel, the Agreement and the Indentu re have ofe 8erafted so that, up° *a comply Coun r the require with the terms thereof, time that the Corporation has flailed Nevertheless, if it is determined at any interest on the Bonds will be includable ,Sn gross with the requirements of Section 103 s, ; income for federal Income tax purposes. Compound Interest Bonds r Tax Aceounti% Treatment of interest on Compo and Interest Bonds are less I The initial public offering prices o4 the Campo a An amount not less than the difference betwren� , than the amount pRyabie at maturity, Initial public offering price, es set forth on the Dover herev4, of the Compot the tt p able at maturity constitutes interest. interest Bonds and the amount pay 1 1 -55- ; i 4 _ 'S r E g ' r , i There nre no provisions of the Internal Revenue Code, the Treasury i regulations thereunder or rulings of the Internal Revenue Service that expressly apply to th apportionment of Interest in the case of tax exempt securities Issued as or In the form of the Compound Interest Bonds described herein. Owners of Compound Interest Bonds should consult their own tax advisors with respect to the determination for federal Income tax purposes of interest accrued upon sale or redemption of such Bonds and with respect to the state and local tax consequences of owning Compound Interest Bonds. t ABSENCE OF LITIGATION It Is one of the several conditions to the Underwriters' duty to accept the r Bonds at closing that the Corporation deliver a eertificate stating among other things that there Is no proceeding pending or threatened to restrain or enjoin the issuance, sate or delivery of the Bondsi or in any way 11ontesting or affecting the validity of the Bonds or any proceedings of the Corporation taken with respect to the Issuance or sale hereof, the pledge or application of any moneys or securities provided for the payment of the Y Bonds or the existence or powers of the Corporation Insofar: as they relate: to the authorization, sale and issuance of the Bonds or sash le t or a p dg application of moneys and securities. s - { i 4 1 UNDERWRITING The Underwriters, for whom Kidder, Peabody dr Co. Incorporated and First Z Southwost Company are Acting as Managers, have jointly and severally agreed, subject to certain conditions, to purchase the Bonds from the Corporation at an aggregate discount; F of $ from the initial`public offering prices set forth on the Dover page of, this Official Statement. The obligation of the Underwriters to purchase the Bonds is subject f to certain terms and conditions set forth In the purchase contract.entered Into between; the Underwriters and the Corporation. The Bonds may be offered and sold to certain . dealers, hanks and others at prices lower than the Initial offering prices, and such initial i offering prices may be changed, from time to time, by the Managers* k r i RATING I i The Bonds have been rated (#) by Standard d Foor's i Corporation. The double dagger (t) Indicates that continuance -+f the rating Is contingent upon receipt by Standard dr Poor's Corporation of closing documents confirming Investment rates and other matters, Such rating reflects only the view of such organization at the time such rating is given, and the Corporation makes no i representation as to the appropriateness of the rating, Any explanation of the significance, of such rating may be obtained only from such organization; There is no assurance that such rating will continue for any given period of time or that It will not be revised downward or withdrawn entirely by such organization, if In the jujgment of said organization, Circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds: f i E i A 1 CERTAIN VERIFICATIONS i Feat, Marwick, Mitchell & Co., a firm of Independent certified public accountants, upon delivery of the Bonds will deliver an opinion stating that they-have reviewed the mathematical accuracy of the computations relating to (a) the sufficiency t of projected cash flow receipts and disbursements oti the Mortgage Loans and reserve funds to pay the principal of and Interest on the Hoii0 as set forth in the estimates and I conclusions under the captioih "Certain Assumptions as to Revenues, Cash Flow, Debt ' ! Service and Program Expenses" and (b) the actuarial yield on the Mortgage Loans and on the Bonds. Such verification of the mathematical accuracy of the computations will`ba c ba4ed solely uCo� data and assumptions supplied by the Corporation. The scope of Peat, ,e13 Co seengagement does 'not include review cP the data, assumptions, f Lek`-Mit Y & � ` Marty ► I or Interpret et Ions to determine whether they constitute reasonable bases for preparation k ) of the Information. Bond Counsel has relied upon such yield calculations in support of I their conclusions that the Bonds are not arbitrage bonds within the meaning of Section ! 103(c) of the Internal Revenue Code of 1954, as amended, and do not violate the provi- sions of Section 103(A)(I) of the Internal Revenue Code of 1954, as amended, relating, to " arbitrage. ADDITIONAL INFORMATION I Certain provisions of the Act, the Indenture and the Agreement are definitive is Official Ste atment. Such summaries do not purport to be comprehen- sive "Is made to such documents for a full and complete ' statement of their respective provisions The information contained above is subject to t i change without notice and no implication is to be derived t'sIserefrom or from the sale of the Bonds that there has been no change In the affairs of the Corporation from the date of such information. 1 } This Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, as a whole or in part, for any other purpose. Any statements to this Offi6al Statement involving matters of opinions;whether or not expressly so stated, are intended as such and not as representa- tions of fact, This Official Statement is not to be construed as a contract or agreement between the Corporation and the purchaser or owners of any of the Bonds. DENTON COUNTY HOUSING FINANCE " CORPORATION Byi - — i President k � I -w- r I _ - i i � I r APPENDIX A I } R I ; 3 t E " i t I 1 { t � k t PUBLIC NOTICE OF MEETING ; NOTICE OF ORGANIZATIONAL MEETING DENTON HOUSING FINANCE. CORPORATION r We , a majority of the incorporators of the corporation, hereby call an organization meeting of the Board of Directors named in the Articles of Incorporation of said corporation , for the purpose of adopting By Laws , electing officers and considering the adoption of a Resolution Taking Specific ; Official Action with Respect to a Particular Tax Exempt Single Family Mortgage Revenue Bond issue . Indicating an intent and a decision to actually issue that particular bond issue and authorizing the hiring of bond underwriters and bond counsel to take steps necessary , for the issuance of that particular bond issue , and for such other purposes as may come, before the leeetting, Such meeting will be held on the 31st day of December , at the City Hall, 215 E. McKinney, Denton , Texas 76201 at 6 $ 00 PIM,, Cis Hi stung ' Gt1"`J1 Wm. H, McNary s? �" K + '-- R . L William K,, Cole .7 s k c, D i 1k. ii ,'A. 1 i F 4 }° Minutes of the City of Denton Housing Finance Corporation December 31, 1979 The following Directors were in attendances Bill Nash Bud Hensley; A. Ray Stephens Roland Vela Chris Hartung Bill McNary Bill Nash was appointed Chairman and Bill McNary was appointed Secretary $ officers were elected to serve until the annual meeting of the Board of Directors in 1981 . The following were unanimously elected : Chris Hartung - President 4 A. Ray Stephens - Vice President - Bill ;McNary Secretary/Treasurer 3 E i z Q 1 1 n r i • 1 DENTON COUNTY HOUSING FINANCE CORPORATION Meeting of Board of Directors August .10, 1981 i 1 . CONVENING OF MEETING , A meeting of the Board of Directors of the t5-riton County Housing Finance Corporation was scheduled for August 3, 1981 , at 1 : 30 P . M. Howevur, due to the air controllers strike several persons who were to make reports were unable to attend and the { meeting was postponed until today, August 10, 1981 , The meeting was in the Denton County Commissioner's Courtroom, 'Joseph A. Carroll Courts Building, Denton, Texas, pursuant to oral notification to all Directors . 4 All of the Directors of the corporation were present. 24 EXPANSI.ONN OF_THL-; BOARD OF DIRECTORS . The ehait'man next stated that. it had been tho consensus of the directors to expand the board of directors and to amend the By-Laws to reflect such change . Thereafter on motion by Mr. Switzer and seconded by Mr . `Odle, with all voting "aye" , it was resolved that the corporation make application to the Commissioners `Court of Denton County, Texas, to amend the By-Laws of the Housing Finance Corporation to expand the Board of Directors from 7 members to 12 and to provide that 5 of the directors shall be appointed' by the Commissioners Court who are residents of the city of Denton. 3, NEW DIRECTOR!? . The chairman next reported that the Commissioners Court Fir d.appravod�the By-laws change and had appointed as 5 new directors, Chris Hartung, Bill McANary, Dr. Ray Stephens, Richard Talia- i ferro, and Mark Chew . All 5 new directors were present and joined the meeting at that time, and the Board of Directors unanimously ' ratified' the appointment of such directors. 4. REPORT rROM THOMAS BECKER OF KIDDER PEABODY . Thomas Hecker next moderated t e next part of t�mee�tTiig. H�•�--c Mien called on Scott Mittlemasl, of Plantec , for a prellminary report on Denton County for the current and future needs of rental units. Mr . Mlttleman's report is in the files of the corporation : The summary of Mr . A41ttleman's report was that ! Denton County could safely absorb 600 rental units over the next 18 to 24 I months and most likely could absorb 800 to 1000 new rental units. Becker next stated that the corporation needs to tentatively set Income levels for the apartment program. Thereafter on motion by Mr. Odle and seconded by i n shall establish 150$ of the Mr. Preston, it was resolved that the corporatio i I housing and urban development median family Income for the 11 county area I as the limit of income that ran be csaened by occupants of 70% of the units � t €n a complex and that 1 oa of the units have no limit on the income of occupants and that 20% of the units be occupied oil held vacant by persons earning 80$ I I of the above described median income, which ' Is reported to be estimated for 1981 to be $25, 00o, 00. Mr . Becker further presented a revised Copy of ?,may, ii,tt, the new program perimeters . The copy of the rc port is in the corporation's file. Mr. Becker further reported that our program parameters, especially the collateral provided by C€tif3<ink Insures us of at leasta double A bond rating from the New York rating agencies . ` i ' 3. EXTENSION OF APPLICATION OOF�rROG-- ---- 0 OUT OF COUNTY LENDERS F Amp p ur�h 0 discussion and receiving various comments from the audience fur r disc Jim including comments from Brandon Rlgney -Frank Martino, loss Coffee+ regarding i f Benny Snider, and Jerry Gag. Hardy; Charles,Glasgow, -Imo Brown , to out of county lend and whether or not the program should be opened up , on hearing no opposition from the savings and , loan and developers developers, up on oration by Bill Swiixer and seconded by Mark r who were In the audience, 'up ram be open to those lenders and Chew, it' was resolved that the famlly'prog P developers residing in the eleven county SMSA . All members voted "aye" ' except Mrs , Lee Walker and Wallace Batey . 6. ADJOURNMENT. There being no fu ther business to come before the meeting, ' It was` aurned. r ` I n an e ry J o r$w or , C -t oy d e,-Secretary l W4 4 y Ia l 4 i 1 • i t DENTON COUNTY HOUSING FINANCE^CORPORATION Meeting of Board of Directors September 21 , "981 1 . CONVENING OF MEETING . A meeting of the Board of Directors of the Denton County HovsTng-liYnance Corporation convened at 1 : 30 1',M. on September 21 , 1981 pursuant to notice to all the directors , The meeting was in the Denton Courtroom , Joseph A, Carroll Courts Building , Denton, County Commissioner's I Texas, and seven directors were present, constituting a quorum , Chris Hartung, v Mark Chew, Dr. Ray Stevens, Richard Tallaferro, • and Bill Davis, not being present when the meeting was convened . a 2. MINUTES OF PRIOR MEETING , 'the Secretary next read the minutes of the —TI . — meet ng e d on 'September 9, 981 , and upon motion by Mr. Switzer, and seco ded by Bill McNary , with ail directors voting "aye" , the minutes were approved as read. 3. REPORT FROM TOM B1;CKER , Mr, Becker next gave general comments regarding E he Boncf`farkFt. a stated tfiut Tn June when we started the proceedings , 'the S bond rates were fair. In July, the rates became very unfavorable, but he now feels that the eventual mortgage rate to the developers wiii be-,,12 7/8°a. Mr. Becker next called: for any ftirther commlttments from the audience and reported that Metropolitan Savings and Loan had presented, an application for 160 units 1 In Carrollton with -the developer' being Sommer-Glenn Ltd , This new application t would cover a lender Joan of 4 million dollars, making the developer " hard t cost" ',$16; 704, 000 and that the multi family units requested had increased from ► 608 to 768 county,wide. Mr. Becker reported that this would constitute a 20 million dollar bond issue. An a 'motion by Bill McNary and seconded by Lloyd Odle, exhibit II.V" approving the above described project was approved with all directors voting "aye" . The chairman next declared that applications were closed. Chris Hartung, Richard Taliaferro, and Dr. Ray Stevens entered ' the meeting at this time. i 4. REViEW OF FINAL MULTI-FAMILY PROGRAM , Mr . Taliaferro next asked the kk chairman to review T the number o Iasi ts , thelr financial institution backer and i' the location of the multi-family units. Set forth below is a listing which was i l presented by Mr . Becker : i UNIT5 FINANCIAL INSTITUTION LOCATION • North rth TIeI xas SavIiI ngs Loan Denton 200 gg II i r E 12 11 II " ". 11 t 2 „ „ ,I II " Sanger # ' „ 11 of If " Lewisville ' 126 Commerce Savings Denton 98 Commerce Savings Denton r: 5� Commerce Savings Benton 160 Metropolitan Savings Carrollton Mark Chew entered the meeting at tills time. { I I ; : 5, THIRD REPORT FROM TOM BECKER , Tom Becker next stated that he was wor rntf''�g on the Pr el m nar Off clal Statement and that they would give It to the rating,'agencies on September 22, 1981. He further stated that we woulti need to meet as a Board of Directors to approve the mailing of the Prellminar'y Offlcial Statement to the prospective purchasers of the bond on October 6, 1981 at 1 ; 30 P. M . Tom Becker also reported that Trammel Crow Company had requested to be included in any future bond Issue that the corporation might Issue. They 4. requested that the board pass an inducement resolution to include their project In any future issue. Harry Down also, requested that his project for a new apartment be Included In any 'future bond Issue. Upon' motion by Mr. Odle and seconded by Mr. Taliaferro, the motion noting that the resolution would ` y not be binding on the corporation to Issue any bonds, and that the apartment ll projects would be subject to any pro rata set by the board of directors, and further, Including that all developers would be accepted at any time the board i meets in the future, with all members voting "aye" , the projects presented by the two above developers were approved. 6. ADJOURNMENT , There being no further business to coma befcre the meeting,, upon mot on by Mr. Swit2er and seconded by Mr. Chew, the meeting was adjourned until Tuesday, October 6, 1981 at 1 : 3o P. M . 1 G, Lloyd Odle, Secretary Jerry Jahn Crawford, Chairman 5 a i j , i i f 1 i Y r 1 is 3 DENTON COUNTY HOUSING FINANCE CORPORATION Meeting of Board of Directors August 240 1981 CONVENING OF MEE�iI_ N�-e Corporation convened datf 1DOOePtoM. on the Denton County Housing t August 24, 1981 pursuant to notice to all the directors. The meeting was In the Denton County Commisslalledirectors weo� present exceptrBift Davis 5 I• Building, Denton, Texas, and 3 and Mark Chew , 2 . MINUTES OF PRIOR MEETING , The Secretary nextM�eaTaliaferro,tandf the meet ng held on August 17, 1981 , and upon motion by i seconded by Mr. Switzer, the minutes were unanimously approved . and 3. BILLS AND EXPENStS . The Chairman 662"65 dueaVerelxsAsslurance lncorp,n ated, payabla- by the C�rporatlon Including $1 3 for fee $1, 436. 89 due The First National Bank of Fort Woo to Verexf Assurance sIncorporated •from January 1 , 1981 ,to March 31 , 1981 , for pool Insurance for June, $10, 294. 1.5 to Verex Assurance, incorporated for psi Insurance for May , $1 , 488. 82 to Dumas, Huguenin , Boothman and Morrow for legal expenses, and the Chairman reported that , hfrom the bond proceeds�and ► m on motion by of the cast of Issuing the bonds and were pay . ` not from the general assets of the Corpton, with allVoting " Y" the bills Mr. SV.Itzer , and seconded by Mr. Preston, as yea+I were approved. 4. FINANCIAL ACCOUNTS OF THE CO�sent hand a check!Chairman next account balance ! to the creators that the CV p tlon pre y D , in the amount of Of $323. 89 at the Pilot Point NalAssocBiation .n The Chairman was reporting this for $200747- 16 with Denton Saving previously had ! Information for the newly elected directors who may not have p Y j ! ' lnformatlon concerning our financial status. I 5. REPORT FROM TOM BECKER. Mr. Becker of Kidder-Peabody ,attaching Waxy pre- REPORT sente t e Boar of irectors with an additional tlheeunliverse of the l Issue if } for multi-family construction to be Inc 4 the now and i such projects were finaiixed . Mr. United 5aV ng that Comme ce Savings tlonat I' ! projects ;Included new lenders being end Murray Savings. Mr. Becker pofntc;d out these were the only three out of county financial Institutions that were participating In the bon approximately `Ibis ' time. Mr. Becker stated that the applications now totaled app I 36� 9 million for projects from developers and lenders iocatedlenders outside l County and, approximately 1 Q million dollars represented by ; of Denton County financing both Denton County and out of counA�tp°1eys�for Hecker next Introduced Dan Bird, of Chapman and Cutler, I Air. Mr. the Underwriters for the trustees who were prasentlna the audience.Sept. 3, our trustee to prospect) Mr. Becker next reported that Chew joined the meeting at this tin' was the date set for the return of loan commitments by the lenders and I of Directors should set the size of t31 Bond issue fter further select that the Board 1 . the trust for the Issue at Its meeting on August 31 , 1 � Mr Taliaferro, discussion, and upon motion by MIA d�rectorsc la ed dtho period within which with all directors voting Y I 4 applications to be included in the Bond Issue could be received by the Corporation. a Mr. Berker next reported that the Corporation had applications covering 1 , 666 apartment units. However, Mr . Becker reported that his opinion Is that d we will have only 600 to 800 units requested when the commitment fees are required. After further discussion,' and upon motion by Mr . Odle, and seconded by Mr. Switzer, with all directors voting "aye" the directors approved the resolution to Increase the universe of the bond Issue to 50 million dollars It being understood that the directors might decrease this at a later meeting when the final ,olze of the Issue is determined . 6. OVERSUBSCRIPTION OF BONA PROGRAM , Mr. Tallaferro next pointed t out that t e directori needs to conside,, It of the minutes of the meeting ' of August 17, 1981 which provided that the directors would today decide how to handle oversubscription of the bond program, over and above 'the'amount of the bond issue set by the directors. After further discussion; and upon motion by Mr . T allaferro and seconded by Mr.; Chew, with all directors voting "aye", it was decided to postpone this matter until a later date. 7. ADJOURNMENT. There being no further business to come before the meet nn , er announcement that the next meeting would be on August 31, 1961 , t f at 12P. M ,, in the Denton County Commissioner's Courtroom, and with all M [ members voting "aye" , the meeting was adjourned . f i . oyd Odle, gecretary Jerry Jon imrawfora, ChalrFnin i } i I j I � i C M k DENTON COUNTY HOUSING FINANCE CORPORATION . - Meeting of Board of Directors . August 17, 1981 F 1 . CONVENING OF MEETING . A meeting of the Board of Directors of the Denton County Housing Finance Corporation convened at 1 : 30 P. M. on August 17, 1981 pursuant to notice to all the directors . The meeting was in the Denton County Commissioner's Courtroom, Joseph A . Carroll � Court: Building, Denton , Texas, and all directors were present except l -s Dr. Ray Stevens and Bill Davis . 2. " MINUTES OF PRIOR MEETING . The Chairman next read the minutes of the meeting held on August 10th, 1981 , and upon motion by Mr. Preston }: ' and seconded by Mr. McNary, the minutes were approved unanimously as '+ presented. 3,t 3. REPORT FROM TOM BECKER . Tom Becker of Kidder Peabody next distributed a copy of the resolution previously approved on July 27, 1981 for information to the new directors. This resolution identified multi- family projects that had been identified as being within the mu ti family program as of that date. Mr. Becker next• presented the directors a new t # resolution with Exhibits "H" through "N", 'which covers new projects which had 19 applied for Becker In the multi-family bond programs since August 10, explained that the purpose of the proposed resolution was to qualify these additional projects to be covered for all costL incurred from this date forward, Should the applicants go, forward with the proposal . l Mr. Becker further reported that the savings associations now Involved in the proposed multi-family bond issue are North Texas Savings and Loan Association, Denton Savlpgs Association, Farmers and Merchants Sank,lst State Bank of Decatur Savings and Loan, Citizens National Bank, and First National Denton, Bank of Sanger. Mr. Becker reported that the total amount of bonds requested for projects was now In e9cess of 36 million dollars and that the resolution would show 40 million to cover reserves and expenses. Mr. Becker further reported that the meeting on August 24, 1081 , would close the tigne for receiving applications, for Inclusion In the multi- family bond program . -Thereafter, upon resolution by Mr. Switzer and fseconded by Mr. Hartung with all members voting "aye". the resolution t r with exhibits "H" through "N" was passed by a unanimous vote. f i 4. PROPOSALS FROM TRUSTEES , Mr. Beaker next reported that the Corporat 7n needed to solicit proposals from those individuals who wished to serve ,gs trustee for the bond program . Mr. Becker presented a form j of letter to be sent to various`proposed trustees. The firms who have Indicated an Interest in serving as trustee and who wish to receive a copy of the notice for our proposal are Mercantile National Bank, Dallas, Republic National Bank, Dallas, First National Bank of Fort Worth, Fort Worth, First City National Bank of Houston , and 'Texas Commerce Bank of Houston . l i' Mr. Becker asked if the Board had other banks they wished to be considered as trustee. The audience was also asked if they had any suggestions. Neither the Board of Directors nor the audience had any further names to suggest. Thereafter, upon motion made by Mr. Talllaferro, seconded by Mr . Chew , and with all directors voting "aye" , the corporation authorized } Kidder Peabody to send the letter soliciting bids from trustees. S. PROPOSED PROGRAM DOCUMENTS_, Mr . Bedker next presented copies +: of proposecT documents to be used in the program and asked lenders to ! come forward to receive their copy pf the draft. The draft is to be studied by the financial Institutions during the next week to see if they have any questions from Kidder Peabody, tne.bond attorneys, or other financial advisors at the meetin g to be held next week . Drafts of the loan cammlttment 'agreement, regulatory agreement, and loan agreement were presented to North Texas Savings and Loan, Denton Savings Association , Farmers and ;Merchants State Bank, First State Bank of Denton, DecatUT* Savings and Loan, Citizens National Bank and First National Bank of Sanger. b. REPORT ON COLLATERAL FOR FONDS . Mr. Becker next reported that the Harris County h u t,: Fam Iy Bond Program and the Sexar County Multi- I Family Program had run Into some problem In that none of the loans that they wish to use as collateral would qualify for certain Federal Loan Guaranty Programs . Mr. Becker reporter) that the rating agencies had stated that all three types of collateral which may be used by the Savings and Loans for the bond program will be required to be at 1 SO% of the actual bond proceeds received by t the financial Institutions. ' It had been reported earlier that various types of 1 collateral would qualify for a lesser amount. i T. OVERSUBSCRIPTION OF BOND PROGRAM. Mr. ' Becker next asked the dlr¢c ors how they wishe to -Sandie a possi le oversubscription of proceeds of the bond program. He stated that it could be handled either on a pro- rata basis or on some type of lot program. This would be necessary In the event that lenders subscribed for more of the bond proceeds than the directors 1 were willing to include In the total bond program. After some discussion , it l Was the consensus of the board of directors that they would decide this matter at the next meeting, August 24, 1081 , and ,that it would most likely be left to the discression of the directors in tho event the program was oversubscribes,. In any event, it was a consensus of the directors that committment fees would be returned to those Individuals who made application and did not receive approval due to the program being oversubscribed, l 8. ADJOURNMENT. There being no further, business to come before the meeting, after announcement that the next meeting would be on August 240 1981 , at j 1 : 00 P. M . In the Denton County Commissioners Court Room , upon motion by Mrs Chew and seconded by Mr. McNary , and all members voting "aye" , the meeting was adjourned. I 1 t I --- °— Jerry John Crawford, Chairman. Lloy Odle, Secretary Y i G I page 2 a l r i DENTON COUNTY HOUSING FINANCE CORPORATION JJ Meeting of Board of Directors a August at , 1981 I . CONVENING OF MEETING'. A meeting of the Board of Directors of the ; Derif'oncounty Hou ing Finance Corporation convened at 1 : 30 P. M. on F_ August 31, 1981 pursuant to notice to all the directors , The meeting was • In the Denton County Commissioner's Courtroom , Joseph A. Carroll Courts # A Building, Denton, Texas', and all directors were present except 13111 Davis , and Mark Chew . 2. MINUTES OF PRIOR MEETING , The Secretary next read the minutes of the e� meeting held on Aijgust 24, ,1981 , and upon motion by Mr'. Switzer and seconded by Mr. Preston, with all members voting "aye", the minutes were unanimously approved as read, 5 3, REPORT FROM TOM DECKER , Tom Becker of Kidder-Peabody , next gave the rec3i—tors a`status report regarding the selection of a trustee for the proposed bond Issue. :Mr. Becker next called on the proposed trustees who were present { to make an oral presentation slang with their written presentation . The directors ' heard either an oral or written report from Republic National BaroEc, First National Bank of Fort Werth, Me,cantile National Bank of Dallas, and Texas Commerce Bank of Houston . Mr. Backer' further reported In connection with the bond Issue that Trammel Craw Company had, through Richardson Savings and Loan l Association asked to be' considered In the bond issue with a 9. 2 million dollar r i project. The representatives of Trammel Crow stated that they had not known that the bond Issue had. been,opened up to out of county developers and tenders t and this whc; the reason for them asking to be considered at this time even though ti M the directors had terminated the time for inclusion in the issue . F The directors next took no aCtlnn an the above matters,. but announced that. they disrnlss would ' untii 'the'elective session to consider a selection of the trustee proposals.als. After meeting In executive session and 'returriing to'the public f meeting, and after further discussion, and upon motion by Mr'. Switzer and t seconded by Mr , Hartung, with all directors present voting "aye" , Pirst National t Bank of•Fort Worth was selected as trustee. s. SIZING OF THE BOND ISSUE . The Chairman next stated that it was necessary for the direct6rs to esta5lish a maximum size of the bond Issue. Thereafter, upon t motloh`by Mr. Tallaferrc arrd seconded by Mr. McNary ,' with all directors present I l voting "aye" , the size of the bond Issue which would cover "builder hard cost" s was set at 35 million dollars. l � t 5. TRAMMEL CROW REQUEST . After further discussion of the request from Trammel Crow ompany, uponina an�y Mr, Odle and seconded by Mr . Stephens, with all i directors voting "aye" , Exhibit "U" was ,approved to be included in the universe of the, band Issue such ap plication and exhibit receiving no priority but being only a i a backup in the event the other lenders who had Indicated an Interest to be included I In the bond Issue did not finalize by putting up the required commitment fee, } f 1 r t , 1, is ? 6. REPORT' FROM TOM BE,CKER Mr, Becker next reported to the directors that all lenders would Se required to put 1up their commitment fee at 1 : 30 P. M. on Thursday; and that the next board meeting -would be at 1 : 30 P. M . on September 0th,_ 198E a4 at the Commissioner's C allocation of funds Courtroom , bond m Mr. Becker further reported that in the event Issue needed to be `decided due to an oversub- scription, tha t would have to be d decided at the September 9th meeting, v f J 7, ADJOURNMENT, There bein'j no further business to come before the meeting, a mot on by. Mr. CTdfe and seconded by Mr. Taiiaferro, with all directors voting r "AYE" , the meeting was adjourned. . k oyd Odle, Secretary Jerry John Crawford, Chairman : 6 • a • i E � 1 E t 4 DENTON COUNTY HOUSING FiNANCE C ORPORATION Meeting of Board of Directors j September 9, 1981 i 3 1 . CONVENING OF MEETING . A meeting of the Board of Directors of the Denton i County ousing F Hance Corporation convened at 1 : 30 P . M . on September 9, 1981 pursuant to notice to all the directors, The meeting was in the Denton County Comm(ssioner's Gourtraom, Joseph A. Carroll Courts Building , Denton, ' Texas; s and all directors were present except Biii Davis and Georga'preston. 2. MINUTES OF PRIOR MEETiNG . The Secretary next read the minutes of the meet ng held on August 31r 1981 , and upon motion by Mr. Switzer and seconded by Mr. Hartung , with all directors voting "aye" except Mr. Chew who abstained sin: a he had not joined the meeting in time to hear a reading of the entire _minutes, the minutes were approved as read. FROM TOM BlrCKER . Mr . Becker next presented the Board of 3. REPORT FR Directors with OM O rough "T " which had previously been approved by the Board. However, since the. Board had not receiv.3d a copy of these, Mr Becker wanted to present them at this time. Mr. Becker further reported that only two financial institutions ,had tendered their commlttment fees by r` the required deadline and such fees covered developer hard costs of $120815- 000 ; F? which when added to the reserves and other costs would make the band issue total at this time $15;400, 440. 00. The multi-family prnjects which are covered , by the rommittment fees which have been tendered at this time are shown on xhibits, which Mr . Becker delivered to each director . A copy of the Exhibits i' will be placed ,In the 'records of the corporation. Mr. Becker reported that ; 608 units were subscribed at this time. Mr. Becker reported that some of the lenders who had decided not to prodeed forward, with the program had expressed opinions that they needed more time to study the documents. Other lenders and developers said the corporation read given too much 4 flexibility in the p;�ogram causing lenders to be concerned and needing had [George` Prestoi? time to study the entire program , Mr. Becker further repo o .hear this week regarding entered the t Ij met with both rating agentles and he expected t s a rating for the bonds. Mr . Becker next requested that the two #Inaricial meeting) institutions that had tendered the,committment fee to comment as to whether or hot-they had any abjection to titre corporation extending the time period ` In Which applicatlons and committment fees could be received. Mr. C . `B. a the time for hail of Commerce Savings said he had no objection to extending applications so long as they retained their full request snd would not be i 1 subject to any prorata cutback In the event the program became over- M Tal€aferro, s'aid subscribed , One of the directors of the corporation, r . he had ome problem with extending the time since we had been under con-- sideration for some two months , Bennie Snider of North TeVas Savings, and ;1 Loan Association stated that he had no objection to the extenslon of the time period so long as it was extended no longer than one to one and a half weeks . There were those In the audience who expressed a concern and desire that the time be extended. Jim Hardy of Summers Asgociates Stated he was still 3 Interested to proceeding with ills Carrollton project of 16o units which would involve builder's hard cost of approximately 4 million dollars. Charles Holbrook of Trammel Crow Company requested additional time for his Carrollton f l n E r dollars . Brandon Rigney stated'he had no comm..nt` regarding his project of 360 units and stated that his builder hard cost would be approximately 9, 2 million Denton project of 150 units Involving builder hard cost of approximately 2 million I 700 thousand, but if the time were extended he would continue to work on his -` project. However, he stated that he would not make a final committment as to whether or not he would tender the committment feu If the time period were } extended . Mr. Becker stated that the extension of time would not change the time period for the previously established selling dates for the bonds. There- after, upon motion by Mr. Odle, and seconded by Mr. Chew, with all directors voting "aye" except Mr. Switzer who voted "no" , the time period for tendering committment fees and receiving applications was extended to 1 : 30 P. M. September y 21, 1981. :' The directors by a consensus of opinion stated that those whose ' committment was already 1n cannot .be reduced and that the maximum builder ' },a d ost Is stiill se at 5 illlon dddila s i C Prk rirfy would be given o Lose fthan�lat institutlons and developers who already had an application turned in but who had not tendered a .committment f fee. , It was agreed that any additional request over and above those which were already received 'would have the lowest priority to be fullfllled in the bond issue. t q. STATEMENT OF WITHDRAWAL OF COMMITTMENT FEE. After some further ' discuss on concerning the committment fee, t e oarddoo "d�i�rectors indicated t that the Ienders had until the approval of the mailing of the Prelim�nory ' Statement to withdraw their committment fee. However, It was agrl!ed that the lenders would be committed thereafter until December 1 , 1J81 , the proposed sale date for the bonds, and could withdraw their committment fee i If the bonds were not said on that date. r s S. ADJOURNMENT, Upon motion by `Mr. Odle and seconded by Mr. Parturag, with all rectors voting "aye" , the meeting was adjourned until 1 : 30 F'. M. `r on September 21 , 1981 . Lloyd Odle, Secretary Jerry John Craw or ecre ary ' j d r i, j { 11 1 DENTON COUNTY HOUSING FINANCE CORPORATION Meeting of Board of Directors `t October 20, 1981 T. CONVENING OF MEETING . A meeting of the Board of Directors of the Penton Count N lsig Finance Corporation convened at 11 : 00 Al M. Oct aber 24� 1981 pursuant to notice to all the directors . The meeting was in the Denton County Commissioner's Courtroom , Joseph A. Carroll Courts Building, Denton , Texas and all directors were present except Chris Hartung and Bill Davis. The Chairman announced that a quorum was present and that the meeting could proceed d. 2. MINUTES OF PRIOR MEETINGS. The Secretary next read the minutes of the meeting of Directors held on October' 6, 1981 and October 13, 1981 , and there being no questions or corrections, upon motion by Mr. Taiiaferro , and } seconded by Mr. E3atey, all members voting aye except Mr. Switzer who ab- stained because he was absent from one of the meetings, the minutes were j! approved as read) 3. REPORT FRUM TOM BECKER . Mr. Becker next reports d to the Board that ,i the final Issue size for the m�u tT-family bond Issue would be $19,780, 000, Mr . Becker also reported that the rating agency had asked for more information before giving the rating and this Additional information ics rating being given time but today._ Mr. Becker said he feat we could get a 'AA Becker further, stated that that he was attempting to get a AAA rating . Mr, the bond market was improving and that the bond would be sold as soon as Kidder -Peabody can be reasonably assured that they can get the 12 718$ rate as the final rate to developers. Mr. Becker next reported on the possibliity of a single family housing band Issue. Mr. Becker stated that if we proceed now with an Issue, we can issue between 50 vnd 70 million worth of bonds for this project. However, If we Walt until January 1982, we will be limited by law to Issuing 26 million dollars in 'bond kjnti the single 82o y project, This 28 million dollars limit would be i a 12 month limit . Mr. Becker previous siinnglef milt' issue wiith the iexception' � that had been Involved in the pre g would be of Pilot' Point National Bank, who he could not contatlaortizat on meat gage with In favor of a program calling fora 24 year straight am a home owner Interest rate of 13 to 131 per cent. Mr. Becker further reported that It would be more difficult to issue the bonds this time than previously since i more restrictions had been placed upon this type of an issue. } Mr.' Becker summarized the single family issue In general In stating we that the 'maxlmum Income of the homeowners' would be $37 , 500, since m had established this rate for the multi-family program , that the hams mortgage rate would be between 13 to 134 per cent Interest and the mortage would be a t 2 20 year fixed rate mortgage and it would be basically for new construction In order for this type of program to work. i C Y i ,i 1 F Mr. Decker further stated In response to an Inquiry, that he knows of no single family public. Issue being considered at this time 1n the United States . r} He did say that some state agencies are trying to Issue single family bonds for is single family mortgages. t After further discussion by the Board concerning the single family issue, r upon motion by !fir, Stevens and seconded by Mr.Cdihw with all members voting aye, Kidder-Peabody was Instructed to proceed with attempting to study the possibility of Issuing single farally bonds prior to December 31 , 1981 . Mr. Becker next stated that he had further information'regarding the Trammel ,Crow's request fora private placement through the housing finance corporation. Mr, Louis Bunch of First Southwest Corporation reported on the Trammel Grow project and spoke in favor of the project .which would be located In Carrollton: Jim Hardy of Summer-G[en Ltd, . spoke against the proposal since,,., waslilot a part of the overall Issue and since Trammel Crow should have male the sai,re deadline as ever else; Charles Holbrook of the Trammel Crow s Company spoke in favor of the project and reported on the M/PF Research, Inc. report on apartment absorption rate In the Carrollton Area and the North F, Dallas area. Jerry L. Smith' with Metropolitan Savings s Loan Association also spoke against the Trammel Crow proposal. } After discussion among the Board members, upon motlolt by Mr. Switzer and seconded by Mrs Taliaferro, to pass but not table titre request , resulting In the Board taking no action upon the request, and with all members voting "aye" except Mr. Odle and Mr. Preston, the Board voted to take no action on the request at this time. 4. ADJOURNMENT . There being no further business to come before the meeting, upon motlo by-Mr. Chew , and seconded =by Mr. Swlt er, after noting that the next meeting would be Tuesday Oct. 27, 1981 at 1 , 30 P . M . in the Commissioner's CourtrooM, the meeting was adjourned . ER JOAN CR FORD,CHAIR N LL YU ODL CRSTARY t 1 I a;Ito `f y JERRY JOAN CRAWFORD, r.c„ INC, "ffr+ Oi..'fi e,'; IM1 WKar MAIN YUITZ 140 •; --t t r,".,' J*. r,(. t I,KWI{VILLK.TEXAS 96067 May 2 , '1983 (l I i N 0 T X C E There will be a meeting of the Board of Directors of • Denton 'County Housing Finanoe Corporation 'on Monday, May 91 I 1983 at 1 : 15 1 , p .m. in the Denton County Commissioners � Court Room, 6th Floor, Carroll Courts Building, Denton, Texas . -It IA- 1 R � I f � f f b E k a.. ”• a, I 1 DENTON COUNTY HOUSING FINANCE CORPORATION Meeting of Board of Directors April `.51 1983 ' r 1 , CONVENING OF MESTTNG . A meeting —of the Board of Directors o the Denton County Housing Finance Corporation ' convened at' 1 . 00 P .M. on April 5 , 1983 . . The meeting was in the Denton County `Commissinner ' fi Courtroom, ,J'oseph A. Carroll ;Courts Building, Denton County, ' Texas ► The meeting was called c to order ,by ferry John Crawford, President of the Corporation. All members were present except Judge Buddy Cole, Dick f Taliaferro," Sandy Jdcob+o and Bill Switzer . The President announced a quorum was present and that , the meeting could proceed . } 4 2 . READING OF TFTE MINUTES . Upon motion by Mr . Hartung and c .. seconded y . < C eew_`wi`t a 1 members voting aye , the reading of s the minutes of the meeting held on March 22 , 1983 was postponed until the next meeting. 3 . PUBLIC HEARING . . The President next stated that the required , notice of the meeting held today had been properly , published in the Denton Record Chronicle and that a Publishers Affidavit' was available for inspection showing the publication of the . notice . A copy of the notice will be �. . attached to the minutes of this meeting. 4 ., REPORT FROM TOM BECKER► Tom Becker , Vice-President ak i Kidder; Pea y, Inc, next can ucted a report by the three l proposed apartment ' developers 'for the pending multi`-family issug. The Corporation and the pubic hearing, heard a report from a multi-family Unit project located on State fIighway 123' in Lewisville, Texas , being built by the Lewisville Apartments , � I Ltd $ and being 258 units at a cost of $ 6 , 225sWe' a report from i American Land and Exploration Company who intended to build 262 .• unitson, McKinney street at Mack Park in Denton , Texas , same b4thg ' $7 ;575s000 and a report from Thompsnn . Propertiea , Tnc. to build multi-family units on ' East University Drive in Denton , Texas being a project consisting , of 78 ' units , e 36 units , 32 units , and 48 units . After a presentation by the .three developerso the President called for comment . Mr . Dalton L` Gregory presented petitions signed by many residents ill `the area located around the Thompson Properties project and also read a letter from Mr . Robert Gorton . During the .course ' of the meeting which lasted approximately two ' hours , the Board of Direotors heard objections to the Thompson Property pro3eet from the f ' , public who stated that there would be traffic , drainage, crime rate influence and.' other problems associated with he properly . .which would be located either near a well established single family developed area . The Board heard from G eorge Organ , Balton Gregory, Gary Cook, . JanTittim, ' Jan Wellborn, Marian Baker and others concerning objections to , the proj'act . The if 'B Corporation also received one complaint regarding the project . on McKinney Street ; Mark Chew and Ray Stephens were _ in favor of a ? 3 ` postponement or a recess to review the Thompson Property. more 4 d, closely . However, after much discuss ion 1, ahoy withdrew their motion ' and second and the meeting proceeded with further, discussion. Wallace, Batey stated that we< had had many public hearings concerning thes yp a matters and to :date , we had more ` support for; this : t a of financing than against it . After i further .die,cussion , .,upon . motion by Mr'. Chew that the directors .'accept ' all ` projeats . except the Thompson Properties, .Inc, project , said , motion • being seconded by .Mr. McNary, with all members voting , aye exoept 'Mrs . Walker who; voted no against all projects, the two" previously mentioned projects were finallyapproved with the ;Iti,ik r Thompson , Properties•.project being denied . , Upon motion . by Mr . Hartung '. and , eeconded :by Mr . Chew with cal l - member s ' voting aye the direatotis '.unanimously', approved.` the closing of , the pubiia i ,' hearing .' Upon motion by 'Mr .: McNary and seconded by Mr . Hartung with all members voting aye a resolution which was reviewed by the Board was passed stating that the public hearing was conducted in a manner that provided a reasonable opportunity for persons of differing views on both issuances of the bond and the ' e location and nature of the project to be heard . A . copy of the 4 ; resolution is attached to these minutes . After further discussion , and a review ' of the Resolution to Issue the multi -family bonds for the `two remaining projects , Upon , motion by ;,Mr. Chew and seconded .by Mr . Stephens with all members voting except Mrs . `Walker who voted i1o , the resolution I approving the . projeot ' for multi-family , units to be constructed , E , in , Lewis•vil1e on`' Highway 121 and in Menton on McKinney Street as , previously reported to the board`, such resolution, was approved. A copy of, the resolution will be attached to the minutes of the 'meeting. z 50 Su lesrental indenture; per 1980. S_i_n_�le 'Family E i. Mort age evenue son sue. a President next stated that the rustee ad requesteci a change in the Indenture regarding the f 1980 Series Single Family Revenue : Bonds 6 change the day that, money :was transferred from various accounts to meet the ? obligations of the Corporation under • the terms of the bond issue. The representative of, the Trustee '`;stated that ,it was necessary to amend the indentu re, so that the funds could be transferred without having to be borrowed for• one or two days . Thereafter, upon motion by Mr ; McNary' and seconded by Mr . Chew with all members voting aye, the first supplemental indenture to ; the Single Family Mortgage Revenue Bands , Series 1980, dated f February, 2,5; 1983 was approved , 'A copy of the resolution will be attached to the minutes of this meeting. 2 .. C ! i r 6. Bills of the Cor, oration . The ,Chairman next, presented a statement"fro m Denton County, n the amount of $ 25 . 00 to cover xerox copies , required by the Corporation. Upon motion by Mr , McNary and seconded by Mr. Stephens with all members voting aye , the President was authorized to pay the statement of $ 25 . 00 from Denton County, 7. Report on Issuance of Bonds . Piro Becker next presented summaries o t e cost o ssuance and other comparisons concerning the present bond issue . Mr . Becker reviewed these j with the Corporation and the President stated that these reports would be inserted in the Minute Book following the minutes of ! this meeting. 8 . Private Placement Request , Mr . Becker next presented to the Directors a ,request rnm M3'ller Davage representing a local organization wishing to engage in a private placement of bonds for the construction of a life care project in Denton, Texas . Mr . ;pecker requested that the board members review the request for consideration at a ,'future meeting . 9 . Return; of Commitment Fee . Ater discussion regarding the denie of t e T ompson Properties, ,upon motion by Mr'. Hartung and seconded by Mr . Chew with all members voting aye , the Trustee was authorized to return the Commitment fee, plus interest if any, deposited by ,Thompson Properties , Inc . in r connection with its request for funding by the Corporation . IO . � Ad ournment;. , There being no further business to come i before the meeting, it was adjourned.' EL Yom,`S cretary i � JE12�tXuJOHN CRAWFt�RD, Cha�rrian j • l f y J)3RRY JOHN CRAWFORD, r.r1no. �u�' r• ,ts,. t 641 WCIT MAIN 5VIY[ 140 v LItWISVi�.L4', K A976067 (If4) 221-0658 May 24 , 1983_ I � , It I N A T T C E There will be a meeting of the Board of Directors of Denton County dousing Finance Corporation on Tuesday , May 31 , 1983 , at 1 : 04 p .m. in the Denton County Commissioner ' s Court Room, 6th Floor , Carroll Courts Building, Denton , Texas . - is P I I 1 r DENTON COUNTY HOUSING FINANCE CORPORATION Meeting of Board of Directors May 9 , 1983 } 1. CONVENING OF MEETING. A meeting of the Board of Directors ui the uenton County Finance Corporation convened at 1 : 15 p.m. on May 9 ► 1983, The meeting was called to order by } Jerry John Crawford, president of the Corporation. _ A11 .members I were present except Sandy Jacobs ] Lee Walker and Judge Cale E entered the meeting after the consideration of the ' minutes of the prior meetings. The president announced a quorum was present and that the meeting could proceed. 2 , READING OF THE MINUTES. The presideiA stated that he ; had sent the minutes Ot the April 5 , 1983 . meeting of the Directors to all D irectors for reviews All Directors stated that they had received a copy of the mi -,utes, Upon motion by Mr. Chew and seconded by Mr, Taliaferro, with all members voting aye, the minutes of the prior meetings, March If 1983, March 221. 1983 and April 51 1983 were instructed to be ` inserted in the Minute Book. No Director expressed any question concerning the minutes of such meetings, Mrs. Walker and Judge Cole did not vote on the matters regarding the minutes since they entered the meeting after the discussion of such minutes . z 3. BILLS. The president next presented a bill f rom tiro First 'Nat�na.l Bank of ' Fort Worth for fees for services as Trustee. for the period from October 1, 1982 through December 31 , 1.983 , such Lill being in the amount o f $1,349.$0. The president a stated; that the bill was proper and should be paid. Thereafter , upon motion by Mr , Hartung and seconded by Mr . Chew with all members voting aye, a bill ,presented ' from the First National Bank of Fort Worth in the amount of , $ 1 , 3 $ 9 . 80 was approved for payment, The Trustee was instructed to take the fee out of the funds held by the Trustee on behalf of the Corporation . 9. SUBSTITUTION OF � COLLATERAL AGREEMENTS. The president next presence several agreements whereby Metropolitan Savings and Loan had requested that some of its loans previously pledged i fund and that as collateral be released froyn such collateral other loans substituted in their place. These loans and mortgages b , loans as collateral are all in connection with the single family bond issue whereby the savings and loan were requires' to pledge € certain of their portfolio mortgages as collateral , After discussion and upon motion by Mr . hicNary and seconded by Mr . Hartung with all members voting aye, the request for release of collateral and substitution of collateral dated April 11, 19831 i April 12t 1983, November lb , 1982 and January' 12, 1983 requesting the substitution of various mortgages, namely being Mr, and Mrs. Typing, Jr„ Mr. and Mrs. Burgham, Mr, and Mrs, Brendle, Mr. and Mrs', Kaplan, Mr , and Mrs. Sokol , Mr, and Mrs. Blose, Mr , and Mrs. Murray and Mr, and Mrs. Alexander , were all approved and the r President was authorized to sign the substitution of colateral agreements . 5. PROGRAM PARTICIPATION FEES. The President next stated that the Coxporation''s share of'_ the - Progrnm participation :'es for the _just completed multi-family bond issue could be delivered i to. the Corporation if the Corporation approved the requisition of funds from the First National Bank of Fort Worth. The President stated that the COrporaticn' s share of the Fees was $ 21 ,787. 50 aria $26, 512.50. Thereafter , upon motion by Mr. Chew and seconded by Mr . McNary with all members voting aye ' the President was authorized to sign the requisition for the Corporation' s share of the Program Participation Fees of the last multi-family bond P issue . 1 tt � 6. R PORT FROM TON[ BECKER, Mr . Becker next presented a ; request from Seripture, oaki7e-' irement Center , Denton, Texas, and introduced Mr. Bill Jones, partner in the development rand his attorneys, Mr. Mike Griffin and Mr. Miller Davidge. Jones # made a general, presentation regarding the building of a 'praposed I rental , retirement center ,' such proposal being the game narrative of the proposed , development as presented to the Board of Direct<)rs at its .meeting on April 5f 1983. Mr . , Jones also z presented a feasibility study from American Retirement Corporation for the review of the Directors. The project will be s located at Bonnie Brae and Ouk Street on approximately Five acres of land. Miller. °Davidge, representing Mr. ` Jones stated that t;ie } financial institutions who ' noemally assist Mr. Jones with his various projects have said they ..cannot finance ,the ' project as is unless they ree'eive the bac3; i.ng of 'the Denton County housing Finance Corporation. The financial institutions have stated that this As the only way the project can be feasible at . this time in Y the present financial market. Mr. Davidge also presented an oral report from - an article prepared by Thomas W. Balderston showing that the United States will have an increasing need for t 'e elderly each year for some time to dome. Dick Taliaferro ,wanted to know whether or not John Knox Village of the metkoplex and E Good Samaritan Village, two residential living projects in the j Denton area would abject to us financing such a project. Mr . Griffin, attorney for m� . Jones stated that this project would 1 not compete in that this is strictly a rental type project and not an endowment type of project . Bill Switzer left the meeting , at this time informing the President that he had a previous commitment for another meeting 1 j out of town and stated that he would have to be excused . at this ` time , Elbert Morrow , Bond Counsel for the Corporation , made a presentation stating that the Corporation can approve this type r of financing through the Corporation and that he would do all things , necessary to make, sueii the bond complied with all t, requirements of law to maintain it as a tax exempt 'bond . r i I 2 - ��� E f After furthex discussion, upon motion b . Y Mr Taliaferro and seconded by Mr. Chew with all members voting aye, the Corporation approved an , inducement resolution for the Scripture oaks Retirement Center Development as presented, and Mr, Morrow was instructed to prepare a public notice of the Meeting to be held on May 31, 1983 at 100 p.m. ` in the Commissioner's Court . Room , At which time the Corporation would receive any public input and E . finally vote to approve or disapprove , the Scripture Oaks {, Retirement Center Project, d approved by the Board is attachedpto of copy of these minutes along with a copy of tha legal deecr`iption of the project and along aith a residential development financing questionnaire , F { 70 ADJOURN ENT. The president noted. that the next meeting , would be on N7iy . . y , 1983 at i: 00 p.m. in the Commissioaer' s ` Court Room. There being no Further business to come before the r 'i meetng, upon motion b Mr. I y Taliafexxo and seconded by Mr. Chew � with all members voting aye the meeting adjourned i E . , SILL McNARY, Secretary f � v 1 f JERRY JOHN CRA-WFORD O Choanon t ' I II I i I 3 , call JERRY JOHN OUAWFORb,r.c„ INC. �/ f ,. wzhcosx�Y W41 WLtT MAIN tU1Tt 144 L[WISVI LLt,TIEXAN 70047 ' x. (214) 21144iE i 4 a N O T I C E I There will be a meeting of the Board of Directors of Denton County Housing Finance Corporation on Monday , � E Yr November 14 , 1991 , at 1 : 30 p .m . in the Denton County COmmissionerls Court Room, 6th Floor , Carroll CauXts k i Building , - Denton, Texas . 1 9 I f " I { i j j 1 1 i I I 1 , 4 � i e 1 1 r � UENTON COUNTY HOUSING FINANCE CORPORATION Meeting of Board of 'Directors November. 21 , 196: 1, CONVENING OF MEETING . A meeting of the Board of Direotq-rs of the Denton County Housing Finance Corporation convened at 101$ } p m . on November , 210 1983 . The meeting was in ,the Denton countk Commissioner ' s Courtroom , Joseph A . Carroll Courts Building, { Denton County , Texas . The meeting was called to order by Jerry John Crawford , President of the Corporation , All members were f present except Wallace Batey , Lee Walker , Dr , Ray Stephens and Dick Taliaferro . The President announced a quorum was present and that the meeting could proceed . s 4 i 2 , READING OF THE MINUTES . The Directors in attendance had copies of the minutes of the meeting held on November 14 , 1983 , and. upon motion by Mr , Switzer and seconded by Mr, Barton with all members voting aye , the reading of the minutes for such meeting was waived , all Directors stating that they generally approved s Z the minutes as presented . 3 .= CARROLLTON "PARMRS LTD . RB VEST . Mr . Louis , H'unch, �'representtng;Cour,tney Statioh 'Apartments , located in north UarkbI ton, owned by Carrollton Partners Ltd , , next stated that r the apartment project was finanoed by bonds issued through, a Denton County finance corporation and that the " project was ;now E 95 occupied Mr . Bunch stated that the holders, of the bond had requested a cash payment from the partnership and had offered to reduce 'the interest on the bonds from `13% to 11% . Mr , Bunch stated that such change in the indenture securing the bonds would require the corporation ' s approval . After discussion and 'upon motion by Mr . Switzer and seconded by Mr . Chew with all members voting aye , the approval to reduce the interest rate b; • amending the ,trust indenture wa«' approved subject to Elbert Morrow, Bond Counsel for the Corporation, approving the change and amendment ` and subject to Carrollton Partners Ltd . being responsible for all legal expenses incurred on behalf of the Corporation to effect the r bond indenture amendment. 4 . PL TEC CORPORATION REPORT , Mr . Becker next presented Scott Mittl�man of Planteo Corporation who generally reviewed the preliminary housing and mortgage market analysis `dated 'November 101 1983 . The Director generally` disoussed the report with Mr , ' Mittleman and the report is in the Corporation ' s ; files . Mr / Becker was next asked the question ; if, duplexes were to be included in a proposed 1984 bond issue. Mr . Becker stated that the duplexes were `not 'included but that con.dfminiums 'and townhouses were included so long as not more than ten percent ( 10% ) of a lender ' s share of the bond issue proceeds are used for such condi- miniums . :f 's 1 :. .. - . .. . ... . 'parr • .e. 1 i r I \) APPROVALS FROM CITIES . The President next stated that the City of Denton has approved the placement of loans inside its ' city limits for the 1584 bond issues ;; if, the issues in fact 4' finalize. , '11he President further stated that .the City 'of Lewisville +would 'c6hsider the approval . of placement of Mortgages within its i city 'limits at its City Council meeting on November '22 , 1983 . The Preaident finally reported that the City of Carrollton has not r considered the resolution at this time , j p 6 . ADJOURNMENT , The President noted that the next meeting r would he on December l,< , 1.983 at 1: 30 p .m. Thereafter , upon motion by Mr Chew, and seconded by Mr . ;Barton with all members voting aye,, I the meeting was ' Adjourned R { r WHY COLE , Secretary { I JERRY JOHN CRAW' RD; �Chai =roan/President i ii , � i r l Y I f I . I 1 I" z I f ODR TO ORIGINATE MORTGAGE LOANS Denton County Housing Finance Corporation Carroll Courts Building 401 West Hickory Street i Denton, Texas 76201 Attn., Mr, ZTerry John Crawford; President I i D�,ar sirs: We ad<nowledge r )ceipt of your Invitation to Originate Mortgage Loans ( the "Invitation") and the fond of Sale, Servicing and Administration Agreement (the "Agreement") which pertain to the Dentor County Housing Finance Corporation's (the "Corporation") .19814 Single Family Mortgage Purchase Program (the "Program") . t We have reviewed the Invitation and understand that it is incorporated by reference herein as if fully set forth. We have also reviewed the Agreement, and we understand its term. Unless otherwise defined herein, all terms shall have the , meanings set forth in the Agreement. { OFFER ] .- We hereby offer,to originate 'in accordance with the Agreement and the Invitation $. Jn Mortgage, Uens ,(the, "Requested Allocation Amount") or y gueh 'lesser mckrrtt as ma lbe allocated. to us as hereinafter provided. In consideration i of being permitted to p$,J)icipate in the Program, and subject;to your acceptance of j our offer we hereby agre4 that this offer 'to originate shall remain irrevocable until the close of bjsiness oh1latroh 29, 1984+ 4 . In the event ,thlit this offer is not formally accepted by March 29; 1984 or` the interest rate on the fortgage Loans is to be In excess of the offer trade herein may be withdnawn at our option without further lia ilit�y, and the Program Participation Pee as hereinafter discussed will be returned to us without interest. We understand ( ,that our offer t4 originate. is aub�ect to your review aJld that f our Requested Allocation ,Amount may be reduced, but in no ease to less than $500 ,000 , after consideration of various factors, including, but not limited to, our originating experience, si;atutory limitations on the amount of Ronda that the Corporation may issue and the amount of, t,he Bonds that the eorporation is able to 'sell. As of December 31, 1982, we had originated $ principal amount of j. .. mortgage loans within Denton County, Texas. ` In-accordance with the conditions pi,eeedent to participate in the Program outlined in the Invitation, we hereby enclose: I (1) our certified or cashier' s check in clearing house funds in the amount of $ , repres0inting one percent (1% ) of the aggregate principal amount of Mortgage Loans which mi have offered to originate herein as payment of a porltion of a three and one-half p( scent (3 1/2$ ) Program Participation Fee (the "Program Parti- cipation Fee") , the balance of which is to be paid at a later date as hereinafter' provided; i r � 1 4 - i i (2) Resolutions of our Board of Directors in the form of Exhibit Q to the Agreement, certified by one of our officers empowered to sign this document; and f j 3) our audited financial statements for the three immediately preceding fiscal j ( yeaf's' i We understand that: i r s {1) on the seventh day next preceding the date scheduled for tho ,sale and purchase of the Bolds (of which date the Corporation will provide us with approximately two ' f weekg' advance notice) we will deliver to the Corporation our eertrified or cashier' s check Clet�1Y1g house funds in an emount equal to tw ek i lL o and one-tu�l f percent (2 ck of the principal amount of Mortgage Loans which we have offered to originate herein (representing the balance of the three and one-half percent; (3 1/2%) Program s ! Participation 'Fee) ; ! ! (2) if the amount of our Requested Allocation Amount is reduced, the excess Program f Participation Fee will he returned to us without interest; 1 I (3) the' Corporation wit] deposit the cheek presented herewith WI the check delivered nt of the Program Participation lee and invest the proceeds at its � as final payment 3 discretion; (4 ) if prior to the issuance of the Bonds we breach the terms of this offer and the Invitation) then we will forfeit the Program Participation Fee as liquidated d"ma es; the Corporation G (5) if after the issuance of the Bonds and prior to the ,purahase by of`our of all of the Mortgage TAans we hereby offer' to originate," we default 'i.n any obligations udder , the Agreement relating to origination or delivery of Mortgage< of Mortgage ins, we will forfeit as liquidated damages for such default , the .ProgYam participation Fee allocable to Mortgage Loans not so_ ptu^cha$ed, together with interest earnings thereon; ! (6 ) we may charge the Mortgagor or the seller of each Residence a fee of three and j R one-half percent (3 1/2Z) of the amount of the Mortgage Loan (in addition to our, one percent (3) Origination Fee) to recover the Program Participation Fee allocable a to such loan; NEWLY CON STRUCTID RESIDEriCES` The Agreement allows us to reserve any or all of our allocation far q, The manta to builders or developers of Newly Constructed Residences as defined therein, but in no event in excess of ten percent (10%) of the amount reserve to ;" allocat on builder or dev6]opero We propose to allocate r'' for Newly Constructed Residences. We agree that f arty portion f such amount; is not used to finance Mortgage Loans or made the subject of CcLidtments to ,El.igiiO Borrowers within. nine `months, we will make such portion Available to Eligible 13ormwers ` on,a strictly first name, first served basis for the remainder of `the CommiU10tit ! Period, We also agree to the reduction of such amounts reserved for anyone b'ailder or deveiopOr' if the A niniatrator determines that such builder has allocirted to itself' or its entity an amount exceeding such ten percent (lOz) limit. 2 _ , i -I SMOINQ (Please check one) { ) We are full R ' • ' i for Y ,qualified 1Rf�1A, or FFflMC`mortgage seNvi"cers, as applicable . the type(s) of Mortgage Loans we Intend to originate, a I all Mortgage and we intend to service tgage Loans that we originate under the Program. { ) We do not wish to service the Mortgage Loans that we originate under i the Program and have arraz's with, and hereby designate G' to undertake the servicing responsibilities on the rtg age Loans which we or te. We understand that the Corparft'tion, after review of our servicing experience may decide in its Is discretion to assign the s6rvioing responsibilities for the Mortgage Loans which we originate to another Participant or to the Administrator. ' e Our Offer to.Originate Mortgage Loans will not be revoked irrespective of whether we � are chosen as servioer for' such loans. f i { MISCELr,ANEOUS i We expect that: (1) we will receive ti)e 'Notioe of Allocation promptly after sale of ! the Bonds as well &a notice of the availability of funds promptly after the issuance of the Bonds; f (2) .you will forward to us with the ?totice of Allocatior,` definitive forma :of•the Agreement "for execution, ' and we hereby agree to remit to the dor�oratiori 'within five (5?"-days of receipt thereof i} all five G ' (5) executed copies of the Agreement in final form, (l i}' t4ie Ldt�ce- vent Letter in the forth attached to the Invitation as Ulibit One, artd (iii) an opinion of our counsel in the form of Exhib,'It N to the Agreement; and (3 ) you will forward to us an executed counterpart of jhe Agreement upon issuance of the Bonds. All Notices may, be given to us at the ' addreas listed below. The effective date of this Offer. to Originate mortgage T,Oans is January l8, 19F4, i Very truly yours, 3 i Participant B .title 4 i Address a 3 s i Denton County Housing Finance Corporation 1984 Single Family Mortgage Purchase Program invitation to Originate Mortgage Loans ; i i The Denton County Housing Finance Corporation (the "Corporation") here- f by invites you to apply for participation in the Corporations's 1984 Single Family Mortgage Purchase Program (the "Program") . The Corporation intends to issue its Single' Family Mortgage Revenue Bonds, Series 1984 (the "Bonds") to provide funds for the "Mortgage " lance the 1 cq base of mortgagE, loans (the Mo a Loans. ) to fig p� le unit owner-ooccupied residences qualifying under the Pro- gram ("Residences") within the Limits of Denton 'County, 7lexas (the "County") , ' excluding those portions of the r�itiea of Dallas and Plano located in Denton ' County. Mortgage Loans will be originated and serviced by lending institutions participating in the Program (the "Participants" ) . The Corporation reserves the right to require a Participant to assign its servicing responsibilities to another participant or the Administrator if in the Corporation' s sole discretion, �,. such assigrment is in the best interests of the program. Qualifying Mortgage. Loans will be Conventional Mortgage Loans which are made to Eligible Borrowers in the County whose Adjusted Family ,lneome, as p t defined in the Sale, Servicing and Administration Agreement (the "Agmewnt") ' does not exceed $44 ,7OO Tn addition, qualifying Mortgage Loans are subject to certain purchase price limitations and certain loan-to-value ratios and insur- ance ;requirements and other conditions of the Corporation as more completely described in the, Agreenent, She Agreement, a''proposed form of which is enclosed ' herewith, is the principal doeument 'setting forth the rights and obligations of the Participant under the Program. F Commitment Procedure On January 18, 1984 , each lending institution desiring to become a` Participant in the Program is required to submit to the Corporation an executed copy of the Offer to Originate Mortgage Loaris ( the "Offer" ) enclosed herewith, indicating therein: 4 (i) the aggregate principal amount (not less than $500,000) of Mort- ' i gage Loans which such lending institution is offering to originate and I 3 servioe, subject to assignment as set forth in the Agreement, for the � Corporation (the "Requested Allocation Amount"); (ii) the percentage (if any) of the Requested Allocation Amount which the lending institution expects to reserve for Newly Constructed Resi- dences for nine months, as provided in the Loan Origination Guidelines i set forth as FAhibit D to the Agreement; and 1 (iii) if the lending institution does not intend to servioe the Mortgage Loans which it originates, the name of the institution (which ,r-at be 3 4 another Participant or the Administrator) which has been engage:A to service ? F its Mortgage Loanso a f r I � In addition to the ,institution's executed Offer the Corporation must receive at the same time; E j (i) a certified or cashier' s check in clearing house funds ;payable to the order of the Corporation in an amount equal to one percent (1% ) of the amount of such institution's Requested Allocation hwunt (constitut- ing a portion of the three and one-half percent (3 1/2%) Program Participation Fee); j (i ) Resolution of the Board of Directors of such institution in the t I form of Exhibit R to the Agreement, certified by an officer of the { I ibSti�ution; and C (iii) financial statements of the institution for each of the three immediately preceding fiscal years. i The offer and all other materials de,u,ribed above must be received, not later than January 1$, 1984 , to: Denton ;County Housing Finance Corporation Carroll Courts Ra ldi.ng t 401, West Hickory Street Denton, 'tans 75201 Attn: Mr, Jerry John Crawford, President E Fbllowing, submission of the Offers by the lending institutions, the Corpo k ration will review the qualifications and experience of each lending institution and ' its ability to originate and service Mortgage Loans in accordance with the terms and conditions set forth in the Agreement. E The Corporation will allocate the proceeds of the Bonds determined to be available for the purchase of Mortgage Loans among the lending institutions found acceptable by the Corporation. If your Offer is accepted by the Corporation, the i corporation will inform you as soon as possible of the probable aggregate amount of Mortgage Loans which you may submit for purchase by the Corporation, i f Approximately two weeks prior to the date on which the Purchase Con- ract Pursuant Sant which the Bonds are to be sold (the "Purchase Date" ) the Corpora- tion � you of the scheduled Purchase Date. On preceding the scheduled Purchase Date the Co the seventh day next Corporation must receive from each lending institution whose Offer has been accepted by the Corporation a cetified or cashier' s check in clear house � funds payable to the order of the Corporation t in ari amount equal to two and one-half percent (2 112%) of the amouunt of such ' institution' s Requested Allocation Amount (constituting the balance of the three and one-Wf percent (3 1/2%) Program Participation pee) . i Upon sale of the Bonds, presently expected to be on or about February 23, { the Corporation shall make its final determination of the aggregate prin- cipal amount of' `Mortgage Loans which each Participant may submit for purchase by the Corporation under the Program (the "Allocation Amount") and shall rail by certified mail, return receipt requested, or deliver to each lending instiw tution accepted,'for participation in the program, a notice of allocation (the "Notice of Allocation") and five (5) copies Of the Agreement in final form, At .2- i 1 1 1 , r the same time, the Corporation will tender to each Participant a refund of any excess Amount Participation Fee based upon such Participant' s actual Alloca- l' � In determining the Allocation Amount the Corporation, in its sole dis- I oretion, may reduce but will not Increase, your Requested Allocation Amount as r set forth ,in the Offer. In no event shall the amount of any Participants Allocation Amount be reduced to less the $5003004, Each Notice of Allocation shall state (i) the Participant's Allocation Amount and (it) the interest rate on the Mortgage Loans. Upon receipt of a Notice of Allocation, each lending institution shall be committed to Use its beat efforts to sell to the Corporation an aggregate I Principal amount. of Mortgage Loans equal to its Allocation Amount as specified I in its Notice of'Allocation and to service (if such Participant is to service Mortgage Loans) all Mortgage Loans sold by it to tha Corporation subject to the following conditions: (i) that the Corporation has notified Participants of the availability Of funds for the purchase of Mortgage Loans on or before March 29, r 1984 ; , (ii) that the interest rate o)r the Mortgage Loans does not exceod %; and (iii) that the Agreement delivered to each lending institution with the Notice of Allocation shall be in substantially the same form as the Agree- ment delivered with this Invitation to Originate Mortgage Loans, with only such changes as do not materially adversely alter the righta, duties and obligations of the Participants. Each Participant shall deliver to the Corpoeatiori'at the address set forth for receipt of the executed Offer, within five (5) business days from the date.of . 1 receipt of the Notice of Allocation, (i) all rive (5) executed copies of the P.gree- ment in final form, (ii) the Inducement Letter in the ,form of Exhibit One attached 1 hereto, and (III) an Opinion of Counsel to the institution in the form of Exhibit N to the Agreement. Upon delivery of the bonds or as soon thereafter as possible, the Corpo- ration will return to each Participant a fully executed counterpart of the Agree- ments The failure by any Participant timely to delivery the executed' Agreement as set forth above may be considered a default by such Participant in its obligations under the Offer and the Corporation may retain. the Program Participation Fee as liquidated damages. i NO APPLICATIONS MR MOR'=GF, TRANS MAY. BE ACCEPTED PRIOR TO RFCFIPT OF THE, NOTICE OF ALLOCATION AND ALL AMICATIONS RECEIVED Tf4Fm,A MUST BE PROCESSED ON A` FIRST W48 FIRST SERVED BASIS SU5JECT TO THE RESERVATIONS OF FUNDS DESCRIBED IN ' PA.RAORAPH (3) BF,LOWO NO CCMMIRT'MNTS 14AY BE MADE PRIOR TO NOTIFICATION BY THE COR- PORATION OF AVAILABILITY OF FUNDS, -3- i SumrnarY of the Program She following is intended only as a summary of certain provisions of the Program and is subject to the More complete description of the rights, duties 3 • and obligations of the Participants, the Administrator, the Corporation ar�d the Trustee contained in the enclosed Agreement. In the event of any conflict between the provisions Of this Invitation and the Offer and the Agreement , Agreement, the will control,, THE AQRERM4T AND THE OFFER SHOULD BE READ CAREFULLY IN Ir4m ( ENr!"!RE'r' 6 (1 ) Origination Generally: All Mortgage .Loans to be purchased by the Corporation must be originated in accordance with the provisions of the Agreement, and each Participant, to be eligible for participaticn in the Program, must have originated mortgage loans within Denton County., Texar,, prior to January 1, 1983, All Mortgage Loans must be submitted with the documentation required by the Agree- E' meat, The Administrator will review the Mortgage Loan files pertaining to all Mortgage Loans prior to their purchase and shall return to Participants Mortgage Loans with respect to which the Mortgage Loan files are deemed to be defective, for correction of such defect, if possible, Any Mortgage Loan purchased by the I Corporation which is subsequently found to be materially defective must be re- purchased by the Participant originating such loan ,unless the defeat is promptly corrected. (2) Prosram Participation Fees, Origination Fees and Purchase Price E forrm house , Each Participant must,supply certified or' cas erfs checks In clearing ing qua funds (in the amounts and at the times specified ira the 'In vitation to Originate Mortgage Loans) in, aggregate amount of its Program Participation Fee, All :Al,location Amouns must be committed to Eligible Borrowers within 12 months of delivery of the Bonds, and delivered for purchase � I by Corporation within 16 months following delivery of the Bonds. 1 _ f Participant may collect from the Mortgagor+ or seller, Origination Fees of not more than one percent (3) and a fee equal to three and one-half percent (3 112%) of the principal amount of the Mortgage Loan which equals the amount of the Program Participation Fee attributable to the Mortgage Loan, Participant f must sell each mortgage Loan to the Corporation at a; price of l00% of the` principal amount of the Mortgage Loan, thus resulting in a net Origination Fee for the I Participant of one percent (3) . f (3) Newly Constructed Residences, Each Participant may reserve all or any 1 portion of its Allocation Amount for commitments to builders or developers of Newly, constructed Residences for nine months following delivery of the Bonds, In no event may any Participant make commitments to a single builder or developer or its related s entities, such that the aggregate commitments received by such builder from ail Parti cipants exceeds ten percent (10% ) of the total amount approved by the Corporation for reservations for Newly Constructed 'Residences, Any amounts of the participant' s j allocation for Newly Constructed Residences which has not been used to finance Mortgage Loans or made the subject of a Commitment to an Eligible Borrower for I i -4- { i I LO the making of a Mortgage Loan .within nine months following delivery of the bonds must. be made available for Commitment to W Eligible Borrower on a. first came, first served basis. (4 Mdowns, A nbuydown" is Permitted under the Program, however, , E buydowns are It ted to a maximum three (3) year period no buydown plan shall be Permitted which 'r'esulte in any year in an increase in a Mortgagor's monthly payments of principal and interest under the Mortgage Loan greater than seven and one-half peraent .(7 .i/2Z) of such payments due in the next succeed year. The entire buydown amount must be deposited in escrow with the Trustee at the time of purchase of the Mortgage Loan, The escrow account must bear interest at a' rate which is usual and custar6ry. No earnings on such escrowed amounts may be transferred to l or used to the benefit of any Participcnt, the Trustee or the Corporations. moat inure to the, benefit of the person rovid f Mort but such .amount. If a Mortgage � Loan is prepaid, the escrow aocount; including earl returned to the person providing thereon shall be ; p i.rrg such escrowed aniaunt, i J , (5) Co. $, Condominiums may be firirtoed Urder� the Program subjeot to the folio i f wing limitations: (i) no more than ten percent (10x) of the Participant's Allocation Amount may be used for Mortgage Loans for Condcmniuns pin I Qualified tho ccindt+niniun must t� located in a @uaiif9ed Condaiiiniun be�rkopnent, Qualit'ied Condominium Development means a condominium develo . . { phase of developrnant, in which (i) at least fl-ft piit) O all completed y percent (50") of all units are s undet- th re rtAbytthetTrfor sale prior to t ei,Pur6th-feive a� Mortgage Loan or Y P units previously under bona fide contracts k'or sale; y percent d, b of the owners thereof and (iii) no more than twenty-five are to be occupied, by the ? Provide wurit for Mortgage y' percent (25z) of the units ty tgage Loan under the f",ram. , I (6) Purchase bates. Dates for the urb p base of Mortgage Loans from Participants will be established by the Trustee on or after delivery of the In no case will there' be less than one (1) Purchase bate per week during the Origination Period. (7 ) _Origination Period, All Mortgage IAaiLs must be originated and sold to the Corporation on or before the last day of the sixteenth lironth folio j the d,l.ivery of the Bonds, (8) T Xpts or Loans. Mortgage Loans must have terms of thirty (30) years, and must be Convent=ional. The amount of any conventional, Mortgage Loan may not exceed ninaty-five percent (95%) of the lesser of Sales Pvice ,or appraised 'value of a Residence. Any Conventional Mortgage Loan with a loan to value ratio in excess of eighty percent (80%) must be covered by a private,mortgage € insurance pbl.iay, so` that the uninsut!ed portion of the loan does not exceed seventy- two percent (73) of the lesser of Sales Price or appraised value of the Residence. � (9) E ligibility iLP�Mimum Income Maxbmsrn Purchase price and Maximum Loan Amo�rnt As de� ined in t , _ gage Loans must be made to � he Agr�;ement Mort n igible Borrowers who are First Time Homebuyers whose total Adjusted Family lnc(xne does not Exceed $44 ,700. The Acquisition Cost of a Residence may not exceed $1121420 for newly constructed Resideeces and $105,820 for existing 3 Residences and the maximum P4ortgag0, Loan amount may not exceed amounts which j conform to the eligibility and credit underwriting standards specified in the s , -5.. 3 1 a i i Agreement and the applicable requirements of the private most i ceeds of the Mort gage insurer. Pro,. mortgage age Lams way not be used to acquire or replace any existing tgage or deed of trust. f (10) PrePa�rm�nt Penalties, Mortgage < payment Penalties. r��e Loarx,� will not be subject to pre- (11) Serviciiix with current lo Qenerally. Mortgage Loans must be serviced in accordance an servicing requirements of FWA or FMMC, as set forth in the I F14A/FHLWIC Servic0rs Ouides and the provisions of the 1 the Mortgage Loans, Participants are Agreement. In servicing Payments on` the'Mo required to collect principal and interest Mortgage Loans, including prepayments insurance proceeds and E liquidation proceeds, am to forward such p the fifth and fifteenth days of each month, as and 3 report such remit ' dances to the Administrator in the marmer provided in the ' Agreement. In addition, Participants are required to escrow c and to advance certain moneys as provided in ertain the payments � 1 a Participant fails to perform its sel±vie Agreement. In the event that t Agr'ewment, such Participants �6 duties in accordance with the, the Coi*poration. greem t with Corporation may be term -ated by k r (12) Service Fee. maoh Participant sha11 Service k 1, ititled to a monthly serviced b equal to ,025 of the unpaid balance of a&vn` Mortgage,Loan being Y such Participant. Participants are entitled to receive additional canpensati4ri in the. form of a fee for each J�iortgage Loan `assumed ve a`ditional to a Mortgagor " ursuant successor p to a written assumption and release, 'and a latj payment charge, in arnqunts not in '"cess of customary charges permitted by xTMA and N FfIMC. Participants may also be entitled to receive reimbursement far certain expenses as provided in the Agreement. (13) Assumptions. Mortgage Loans gagor, as defined in the p4Y be assumed by a subsequent Mort- Eligible �3orrower and the om-ement, provided that the proposed mortgagor is an ! Mortgage t Loan continues to comply in all other respects ' With the terms and conditions 4f the Agreement. Any questions with respect to the foregoing directed to: mooing or the financing should be Kidder, Peabody & Co. Incorporated 10 Hanover Square New York, New York 10005 THE ASCRIPTIONS GF ALTS, TERMS OF 'IHE PROGRAM HEREIN ARE QUALIPIEU D1 THFII� Fr�i'IR�,TT " Y OFFER, THE AORP204T AND THE ACCOMPANyINO EXHIBITS, T71F, RESMV.ES' THE P10HT TO REACT ANY AND ALL OFFERS M ORIO INATE MORZAGE LOANSCORPORATiON � i i DEEM110N COUNN HOUSING FINANCE CORPORATION E f Dated ! - r 3 �r ff t e WIBIT ONE (NAME OF PARTICIPANT) IMxX;WN2' LETTER Denton County Housing Finance Corporation Denton, Texas Kidder, Peabody & Co. Incorporated First Southwest Company and other Purchasers named in the Purchase Contract dated February , 1984 Dear Sirs; a This letter is -delivered to induce Kilder, Peabody & Co. Incorporated and First SouthWst .Co*w*t as Managers of s glv6up of underwriters (the "Purchasers") and the Denton County Housing 3inance Corporation (the "Issuer") to enter into a` ` Purchase Contract dated the date hereof (the i;'Purchase Contract") wherein the Purchasers are listed, relating to .Puziahaes by the Purchasers and the :sale b i the Issuer of the Xssuer!s Single Family MortgaLetevenue Gonda, Series 198!1 (the 'Borids� ) to be 'issued under a Trust Indenture datod.as 'of March 1, 1984, (the "Indenture") between the Issuer and InterAret Bank F6rt,Worth, MA. ., Fort Worth, Texas, as Trustee ( the "Trustee") . A portion of the proceeds of the Bonds are 9 to be used to fund certain mortgage loans (the 111brtgage Loans") pursuant to a f Sale, Servicing and Administration Agreement. dated as of March 1, 1984, .among the Issuer, the Trustee, the J. I. Kislak Mortgage Service Corporation (the ,,Acimini$trator,% and ourselves (the "Agreement") . Pursuant to the Agreement we n n will also service such Mortgage Loans on behalf of the , Issuer unless.we assign j such nerviding to an?)ther Participant under, the Agreement. the Purchasers propose licit offers to purchase the Bonds by using the preliminary official statement dated , February , 1984 , (the "Preliminary Official Statement") prepared by the Issuer with our assistance describing the bonds and the Issuer+s mortgage loan program. In consideration of the execution and delivery of the Purchase Contract and the sale of the Bonds, we represent and warrant to, and covenant with, the Issuer and the Purchasers as follows; I . (a) There have been no material adverse charges. in our financial posi- tion, business) properties, resua.ts of operation or, mortgage loarl:origi- nation and 'servio.ng experience since , the end of our last fiscal year with respect to which audited iinanoial statements # are available. I r 3 1 .Jo- i I t I� A j ! (b) The description ion and int'orr ratio n ficial Statement which contained in the Prelitninaxy Of- relate to fo end to our loan origination, ser vioing, delinquency, default and foreclosure ,experience are 'true and do any not contain any untrue statement of a material fact or cffat to state material fact which should be included therein for the' ixarposes for which the preliminary Official Statement is to be used or which is M necessary in order to make the statements made, in the light of the f circumstanoea under which they were made, not misleading, ' (e) We will not take or omit to take any action Which will in any way I result in the proceeds from the sale of the bonds being used in a manner inconsistent with the the rovisions of the Indenture and p Agreement. (d) Except as set forth in the Preliminary is no action, suit, proceed irY Or official Statement,. there equity, or before or b , inquiry or investigation at` law or, in j Y public board or body, Pend knowledge threatened or to Pur kMwledge, any basis t�refororwheerein awn to favor ble decision f rll or finding would adversely affect the transactions contemplated by the r Cotttraht ar the Prelims Purchase nary Official. Statement or the validity l r eability of the Bonds; the Indenture, :the Agreement, this. or enforceability,Letter (or any letter reaffirtming this Inducement Letter) or the Purchase Contract. ' (e) ire , � Agr`e ment, when executed and delivered by us, will be our 1 , valid and binding- obl teisr►s, except to the extent enforcement thereof accordance with its I r'q t0 may be limited by :bank- I gene Ypi solvency or other similar laws affecting ereditors� rights 4 5 I (f} The execution and delivery of the Agreement and this Inducement Letter (and any letter'reaffirming this Inducement Letter) , and the Pe rformance by us of our obligations under the Aforementioned do not and will not violate our Charter or By-Laws or we are bound, order by which � under , and such actions do not and will not constitute a default any agreement, indenture, martg%ge, lease, note or other obligation or instrument to which tre are subject by and no approval or other action [ theghvernmental authority or agency is` required. in connection (g) We have delivered or will deliver or cause to be delivered all opinions, letters and other dootments as O" r�ste Mortgage Loan and the wired of b in the Offpr to Agreement, including, but not limited toa n opinion of our counsel in substantially the form as aired the Agreement, by i (h) We agree to Pay our own expenses, including the fees and expenses i Of our counsel, in connection with all transactions relating to the Mortgage Loan Progr8n. t ► -8- L r We ngreo to inform you immediately of any development or prospec- tive develo pttn riot to the date would cause any which. p of the statements in this Inducement Lett er of issuance of the Bonds to be un.. true as of such date. ; j The agreements, reprres ntations, warranties and covenants contained in E this Inducement Letter shall survive the Closi ng ':under the Purchase Contract, the sale by the Issuer to the Purchasers and resale by the Purchasers of the aonds, i ar1d any imestiga ld, by the�,Issue'r or the" Purchasers of . , . or related to the 'transaations covered by this Inducement tter,�thedPur hale Contract, the Indenture, the Agreement or the Prelimina We r specifically ui�dertalce `to advise you of ry official Statement, statement of a material fact in the Preliminary en" which would Stat make ent untrue any t Would be necessary to make the statements made in t1�iPreltatement, or whioh g meat in 1 iminary Official` State- . fight of the cirev�lstanees, not mislead . contained herein shall be considered to be accurate until gohttLne as advise YOU to the contrary in writing. This Xnduo Issuer and the ement Letter is given, however, solely for the benefit oP the other Purchai�ers their respects►e successors and assigns no any r petrson, including any holder of the Bonds as such, shall acx�uire o rt �re fish under, or by virtue' of this Ind+,tcemt Vetter. . This Indlc t Letter shall be f Texas. by the Laws of the State of Very truly: yours., [Name of Participant] t BY� Title 4� I 3 E , -9- j �f 4 r , o - l!"' Ali JOHYy C1' 'AWFbRn, r,c., Nvt, ,�Qji1_% , t ra, Wor r"+ iilH ' :rlurrpt 144 1 IF r icwrevil,�K; r , Oecem))4I r 1963 I t I i r tit r rr+wr.Y Imo, ««f t " e a m�. I ins Cf the Baarfl of D �reetors of ; I . r T'`�ore Vi 1. 1 1� 3 ' a `i X ousi31g r"ihl�na�3 C;oq� ora ic,r� on i ot►8ay, , Denton ("1,0Un r5, I� . l F,. .nton 1C�Unty ni, ir► the eril, 1201'1943 at It"W Teeemb I IF I r t 111 I J nor+ Caurt'` taom , �tlt Floor , Glrrol.l .Courts I'' r I Tt?�I,;�s � t L I i •r xtSel' :u�t'p,ly a 11 be to gtnerall Y dia ting wiof Ole';Aee 6 s r 4 b. 'ed 1989 �Oingl,e- fami1Y housing bond issue 1 r in �1rl� ama�' n of $25 ,iplrp , 000 O,: We wili1 A1410 cort:cluct a public hearing re4arding the y Ltd 'r 11 fon Partners , . , Project to amend ret4l ks t frog I �z o f, IF i ra eot already i t:s a 'rust Ih(Aentlire covering a multi-family p j• ,I �;onfitiructed; , ` , S ; r , Pr I 111111tttttt� t � a I ,I 1 Y L i , 6 ' r DFNTON COUNTY HOUSING FINANCE CORPORATXON Me etin g `of Board of Directors 1gB3 December 12 , l { of the Board of bisectors ! I MtETING . A meeting ! I 1 , CO�'� �� Finance Corporation convened at 1 ; 30 of the Denton County Rousing wa;) in the Denton County on December 112 F oom i . The meeting Carrol'!r Courts Building cP .m Josep , JERRY. ommissioner s The meeting was cal'l,ed to order by. Denten County , Texas , A11 members were presidptSt of the Corporation . Jaok. Raxtan , JOHN, CRAWrORD , RaY" g �ephons',` nick Taliaferr0 , resent and present except The President announced a (quorum was p Sandy f { Jacobi • could poceed , ' that the meeting The President o 2 CONSIDERATION O--y�mEnut~-es� me ting held on . copy .of t text handed out :a and after the Di.r'ecto:ts had considered ithsalll November, 21 ,. 1983 , Mi. . Hatey, l upon Vnot ioz , by Mr . Switzer ' and seconded by 1983 , ; v - exCdpt,,Lee Walker who abstained because 211 she members voting the minutes. of the meeting held on November was aklsento resented'. were approved as ' p . . The Pres- y kCITIB ' WI'�K OVER ?O t 00rid�s4ssueefor' single i w 3 , OPROVAL Q ' ro used bA r tat tha 1 84 p p' 1 `'of all 6'ities in Denton . ident .next stated. . aired `the apprav� to; spprove the £amity : es' req eo 1e'► mnrtgag he event the Caunty ;having population of over 20 ,i1b41 plimitt3 , orted j placement of mortgages within their 'ci !j royal ` bonds are in fact issued . the preaidE►nt further rep f mortgaga iven 'their app uest at E that the cities of Lgwarrolltonnhadenc t�acted gonathe refs were t' and that the. city Of' the Denton and i,ewisville minute a£ this time , A. copy � resented and requested to be inserted in the minute book • j p The $, R'ROLY,TON PROPERTIES TRUST I}VL�ENTURE AMENDMENT . CA state thaw° °� tk e 15uxp s f.odays meeting 4 next regarding the amendment to t, r president. public hearing was '-to conduct a pub ro erties fox a multi'-�ticyhearing trust indi06ture n£ Carrollton.ltThe' President opened t:he p Lewis Y. eak in favor °,of 'the request , jecti, in North C.arronetto sp ro erties spoke in ar,d : called for any the owners of Carrollton p , p # g" �nah representing that the. hbidor o£ the bonds wouerCent 1 , ercent , to eleven Percent' £ixvor of ' the request stating frorit ' p ro erties pay such bond holders up published reduce thei r. ritereet rate from thirteen p had been p to the A provided Carrollton Properties published riot cep had eeprr,esidentrnext asked Mr . Bunch state d that theepnotiea of" the 15ehad b as and tha Elbert MorrOW4 rp osed corporation ' s bnndadditional comments for or against the p p i.f there were any mendment to the triosfurtaertucmmeuts change which would require an , and hearing .�i presently existing on the Property a a r ! J►f ter further f the President declared the pu'alic he nloseoT, m< tion by Mr - the o nirectars , and up t discussion among the B w with all . membfrf! vt5ting ayes , Switzer and seconded by Mr . Che the,. req e� pr15ject knovaC� uested amendment to the trust indentur�� o� Gyro a the bond issue to oui ld � w. prriperties regarding artraents ► locatbd in north ,Carrollton , as, Courtney Station Ap &P royal and review of the documents w; s approved , subject to . f�,nai p ~oration . ,,A Elbert. MorroW., bond c�our sal for the Corporation - roved , l SCRIPTURE 0}�K13 g� TIREM NT App�TM NT FACIbScriptureiOaks i f letion of tho -b0d issues . Mr . ' Carpentersof K d er ► aeabody next stated that t e 1 facility was staged fdr comp arches+ors of the pri"tely { Carpenter stated that the necessary p ed that the bond a placed bonds had been located and it was hCp urchase agreement authorized , issue coulddbbetahlUS+2d and a bond p V d at e Corp ration atCarpeeti,n to ,be 6d the Dlrect.ors and signs Y 1 ent`f r ' req u sted a ,m. on DeC�in►ber. 1'9 , w to pal l ,a m��etirig at that time to aansic4��r th�� bt�nd purchase agreement. ` ha f�ixther business to Iconie 0 RANENT . . ,Th�t� being ext nleetirig o,f ;;the d At3J after noting that the; n 4 s rnles4 rather r1 before the:, sleet ng , 00 a , u M . ; Directors would 'be, bh Deoember 19tgat3yland seconde3 by was ad jo'ucne on� motion by Mr • d• wiso notified , up a e ,' the meeting. Switzer with all members voting Y HUAt'�y COLE , Secretary y' I jrmar " I ;JLARY dOFiN CRpWFO�tD , Cha " 1 j r � z 4 DENTON COUNTY HOUSING FINANCE CORPORAT,10N Meeting of Board of Directors December 19 , 1983 1 . CONVENING OF MEETING , A meeting of the Board of Directors s of the Denton County Housing Finance Corporation convened at 1 : 30 p .m, on December 19 , 1983 . The meeting was in the Denton County { Commissioner ' s Courtroom ,' Joseph A , Carroll , Courts Btiildinge De:►ton County , Texas , The meeting was called' to order. by Jerry John Crawford , President of the' Corporation. All members were present except :Dick Taliaferroo The President announced a quorum was present s and that the meeting could proceed . s 2, READING OF THE MINUTES . The minutes for the meeting held on December 12 , 1983 were not read at this time and would be avail- able at the next meeting of the Directors . 1 1 3 . -SCRIP�TUFB OMS'AETIREMENT APARTMENT FACILITY. Bill Carpenters esentat.ive of Xidder Peabo y, x c . next presented I . a fazm of .bond purchase agreement to be used in the financing of; i the Scripture Oaks Re.trement Apartmenti Facility :in nenton, ;,TBxas , such bond$ , t.a be .issued' in the amount of $ 8 , 750 , 000 "At ;a rate of , , 9. 5/88 for a ;ten year ' f,ixed, 'term. Mr , Carpenter stated that the, Corporation needed .to approve a' commitment agreement dated December 16 1983 from ,HoM6 Savings Banks Lawton ,' Oklahoma , which is La , letter of credit to the issuer , Denton LCounty . Housing <Finance Corporation , ' to indemn fy ' it ' in the event of aAefault on the bonds by not only the apartment owner , the savings and loan participant, but also the Fireman' s Fund Insurance Company who issued the surety bond banking the bond issue. p Y g The Chairman tie read a form of resolution for the Scripture (aa�li .Retirement A artment Faoilit financing and asked Clint ,a 1 Braz' ,oton , representing Elbert Morrow , the Corporation' s bond counsel , E if ' "%-n agreements presented here today , as get out , in the resolution , r had: been reviewed and . approved by Blbert Morrow ' s law firm. Mr , f Brazleton stated that }he. agreements complied with all applicable lags . The Chairman next stated that the ,hearing here today was open to ,the 'public and asked for ,any comments from the public regarding F.the iesu4,nce. of these .bonds , mhe Chaizman. urther stated that .,the required' 'pulsl'i c , hearfn' g 'prior to the approval of this project by the ; dorporation .�had been conducted several months ago and that this was only .the' final financing of the project , There were no comments from the public but Director , Mark Chew asked the property owner ' s representative , Bill ,zones , if the Retirement Apartment Facility would be a new hospital which he had read about in the paper a few days ago . Mr . Jones stated that the Retirement facility had nothing to do with the proposed hospital expansion nea.: the property and f � r that the facilitiy would not ,be converted into a hospital . After j further discussion and upon motion by Lee Walker and seconded by € Jack Barton With all members voting aye except Sandy Jacobs. and Bill Switzer who voted no , the Chairman acting in his oapacity as E President was authorized , to sign the commitment agreement for the ' issuance of a letter of credit from Home Savings Bank in Lawton , Oklahoma and to sign any and all documents necessary to effectuate j the issuance of the $8 , 750 , 000 bond issue described at the meeting today , in order to permit the owners of Scripture bake to proceed with the construotion of the Retirement Facility , The name reso lution also authorized the Vice-president and Secretary of the i Corporation to sign all doeuments .as necessary to finalize the issuance of the bonds . Bill Carpenter stated that the commitment of Kidder ' Peabody , ' Inc . to finalize the purchase of the bonds was contingent upon the I bonds receiving a AM raving. 4 . ADJOURNMENT . There being no .further busimes ; to come AD before the meet~upon riwti..or by Mx . 'Ch'ew and seconded~ by Mr . i y ng was adjourned fiartung �.wxth all members voting'' aye , the `meet 1 BUDDY COLE , ecxetary JEW aOHN CRAWFORD, Chairman/Pxe'sident ? t tk 2 > 7 EXECUTIVE SUMMARY J DENTON HOUSING STUDY �} This section summarizes the conclusions of the Denton ,E Housing Study that is reported in full by the following K Final Report. The major questions raised by the study directive were : s F I. what is the projected housing demand in Denton, ` s Texas for the next six ( 6) years? M II. what are the identifiable gaps between home I .. production and demand? ' E III. Why here Y are gaps in meeting housing demand? IV. What are some housing programs that can help � meet the anticipated housing demand? I. Projected H Demand ougina ¢ ' The approacu used to answer these questions Con- sisted . of a three-phase stud P y. The first phase was the projected housing demand. The demand was judged by an analysis of a range of projections based upon different projection methodologies . These' methodologies consisted of: l A. A trend line projection H. A linear regression projection Co A .'current trend projection based upon.,. traditional . . market responses to sudden demand increases and i its normal cycling 1.ffect . I . b. A aohort ' survival population projection A projection based upon Denton ' s percent share of the Metroplex population projection . .r tl 4 1 r L ation projection based upon known new F • A pop ul ortunities and their multiplier employment opp k effect* population pprojection based upon new employ- �' ` ;pop rtunitisa , their multiplier effect ment appo JJ and a continuation of these rates over the next s s X years. ra ections created a �:iinge of r The result of these p j k projections for 1985 pop ulation;; from 65 , 000 to 86 , 900 • e resent the number of house These population projections r p ' eAded over the holds or housing units n next six l6) years ranging from' 5 , 9.$0 to 11 ,730 additional units. t � ed by assessing a series � The anticipated demand is develop f realization factors on the maximum potential demand. o I t Such factors include the followings f 1• pesire of some people to live outside Benton. 2* prospects that' the current high new employment ` rate of growth will not be maintained. 3 . the prospects that the full multiplier affect �1 of the change in economic base will not be � achieved• 4. The effects of the current high interest rate F � and its dampening effect on the econon►y• ` eraentage ssigned a proj ected These factors were a p i lied to the maximum realization which was OUM app ; ' " then reprP- ' potential demand, The resulting Projection seats the anticipated housing need for Denton, Texas by 19$56 This is an average of 1, 230 units per year , which year over the 1970-1978 t is an increase of 590 units p�+L y E roduction of 640 housing units * average p s is to The next step in projecting the housing nee establish the .jousing ty� that are needed by 1985 . r s 2 _ _ S. Population and Household Growth Pro ection� assumptions that Growth projections involve m4ny variables and must be analYxed as much as possible in order to provide true a, potential for an area . This cross verifica- ' picture of the growth p tion was accomial,ished by making three different projections based on # ' ies and comparing the results . This approach 1� different methodologies •.. provides a range of possible population and household growth. The � first projection utilized was a trend projection . The results of the trend pr:}jection indicated the conservative estimate and the � Projection low low and of the rang'p • The second method utilized the p based on the multiplier effect of employment . The results of this j projection indicated the most optimistic estimate and established high End of the range . The third projection utilized was a the g ectir�n for `both Denton County and the City of Denton . cohort p ro j The results of this projection indicated amore moderatA io n and xepresgnted the mid-range of the 'overall pr o ect f 7 projections . 1 , Trend protection - A linear regression (trend line) prajectior� was calaulat®d based on 1960--1578 population data. The linear regression indicates a very cpnserva '3 tine 5 rowth of 53 , 000 by 1980 and 59 , 600 by 1985 : MbS is of the opinion that such a projection is unrealistically 'f low and therefore divcarded this projection. A proi,-ction based on the 3 . 4% compound annual growth ulation growth as rate from 1970 to `1978 indicates pop � shown in Exhibit 1-24 This is considered the low end of the range of p otential growth. 'this low range estimate should be achievable with no change in growth policies . t Initact, the identifiable new employment of the industries t r lavating in Denton alone generate a potential gruoth that s exceeds this conservative projection . 1 3 I k L v EXHIBIT 1 -2 POPULATION AND HOUSEHOLD GROWTH ' 4 TREND PROJECTION AYI. City o C Denton k I First Annual of Annual Household Annual Fami1,; Year Population Growth Rate Households Increase Grower Size 1970 39,874 ,1IP ;374 a ', '.' 3.22 i 1975 46,750 3.41 1 ;`7278 3$1 3.06 3.27 • 1976 41,000 63 159263 985 6 .90 3.08 } 1977 47,900 1091 16 ,161 89a 5188 2.96 '.. 1978 51 ,550 7.62 16.890 724 4.51 3.05 s 1979 331,300 3.40 171,580 690 4.10 3.03 ' i 1980 55,110 3.40 18,300 720 4.10 i ' 3 .01 1981 56,990 3.40 19,050 750 4. 10 2699 y 1482 58.930 3.40 19,830 184 4.10 2.97 1483 ' 60,930 3.40 "O,b40 810 4010 2:45 1984 63,000 3.40 21 ,490 850 4.10 2.93 1986 66,14b 3.40 2, 1,370 880 4.10 24,91 Household Increase 1970-1978 - 4,516 1978-1985 - 5,480 11 This projection ohoutd be considered the conservative' f growth p,otenttat . This growth can be expected to 'oaour , ex g p with no change in efforts to attract industry or generate other empZoyment opportunities . ` Source: MDS esttrret-is based' on trend of`growth 1970-1978 4 � k k i E - l i. , Of these housing gaps, the most significant housing � i . problem is housing under $40 ,000. This was judged the tai r' most significant since the rising asst to produce a hZiuse is increasing the difficulty to provide this housing. Current trends indicate that this type of housing is E i becoming non-existent. For example, the chart in appendix A-lz f single family housin g types indicates the percentage o produced in Denton► Dallas ► and Tarrant Counties in 1977 ' ' and 1978 . The significant cost in housing is most vividly { i indicated by the reduction in housing under $30 , 000 from # approximately ,68 in 1977 to, zero in 1978s The gaps identified by these projections indicate major problems in housing under $40 ,000 cost, with acute ; problems in housing demand under $30 , 000. Production of housing ti under 30 ,000 is expected to be minimal , if any , with demand s upwards to 500 additional units by 1985 . • Other Gars ► 1. An apartment demand of 40025 units by 1985 compared to current production trend of only 31000' units by 198x . 2. Projections in all other price ranges indicate a gap between current production practices ana the demand. Y . ' YII . Why Are There Gaps in Housing Demands and Current -Production Prac s? 1 . For the most significant problem (the laousinq under A30 000) ► the primary reason is the economics n { ,. pr�oduc ng this type of unit . They cannot be C s profitably produced.' 2 . As to the a���pg__a__rt�� me��nt gap , it is a combination of factors sins the lack of outside E knowledge of the Denton apartment market, the image of a college town among lenders , tight money market , and traditional lag in market meeting demand. r gaps are realized by 3 . xi her income hour: rketr traditional con- current tig t money demand and housing tion lgOs competitive housing they are 'y. ytruc � because s produotionr more attractive lack of y are currently and better known► market a proven market i s owledge of area bui housing hindustrY a` in ` knowledge and, existing smal [}glltOnr and other £versus deemgnd' housing gaps of Production i f ated ` r S pro rams That Can Hel Meet th'e. Antiai IV. ontie Housin Demand 4 Housin 40 000 Housin Demand Under $ . help A. _.- programs that can outlines various P gneed of this housing The following for individuals in roblem is provide housing the most severe housing p ra rajas t e• Although suggested that P ghis under $30 ► a00r it is under $44x400. housing housing demand range/din d has be grouped A d since this price der $30 , 000 ,since is recomnnended with demand un Will be forced to paY • z tremendous unable traditional ability s le to find this housing Will and more as . someuPeslight l y above their t -realized to y movement is its toll . This upward continues to take housing inflation existing Die jor emphasis on preserving l • stack. plan that idertif'os a -based p rservation. t Develop a caramunity hborhood at rioxitigs far Haig and 'sets P licias that b• Major emp hisis on zoning hP° s . stabilize older neighbor unity facilities* e . Hmphasis on upgrading community _ and development lodes 'in building Evaluate encouraging neighborhood re' d• light of of forts • vitalization Programs for local rant e. Expand federal 5 e enforcement city r. rehabilitation and Cod a wide. j 4 i ossibility of the C .D .B.G• '. 2 . Explore the P lots available for the program making market - low priced housing m r.. time to reccg cognize include cost to assemble �Constructian lags time and rocessingr Dressing market demand , overnmental P landr secure financing ► g etc . streets , Y seouring utilities and � . A 6 — — Initiate an active community lending program 3 . market. for new construction fox this housing 4 • Encourage construction of innovative ama►ller units or ", starter houses . S . Evaluate additional city assistance in cast community sharing for facilities , utilitiesr eta.- and governmental processing. i 6• n active in program with provide a y area builders and developers'i i' } F D�gadcl for Apartment Unity t g t par help increase The following Programs will , in the rate of apartment unit production. E ico rata about Denton' s I Active education Pr emphasis. ons 1• d with amp j apartment deman , Lenders outside Denton- a' a ertraFsnt developers b. D/FWD p f f 40 000 �. D nd For Housin Over t t help increase i in party E, The Fallowing pros rams will , production* z the , rate of higher` in ctsme housing r rams with area builders Active informational p aJ and developers. } 2. Evaluate additional city assist nce in co a st a t and goverru+aental processing. � sharing ' <. assistance and lending, ingotional i 3, Active rograms• This report developeconclusion d a detailed study of the housing ro actions . market potential for the City Of Denton. Thep l � tes will not ,*►eat projected indicated current production ra demands. This report also analysed in detailed current s in comparison to common � development controls and program inflivated E practice in the Dallas/Fort Worth area . The survey E p #� R r 7 Denton's standards are very competitive with area cities j . howeVer' adjustments were suggested as part of a reoommended continuing update process . The study "concludes with an over- view J of , possible housing ,programs to address the re mo significant ; gaps ,ia ' housing production. The i programs suggested, were based on an assumed community development goal as outlined in ' the study 'assignmeit . The study team recognized that alternative programs are Possible and gave an overview assessment of the alternative programs . The report concludes x by recognizing that the final selection and the priority 4 ! given housing programs rest on the basis of Denton 's own s r ; desired Community character and not on 'teehnSCal factors C that can be quantified. Therefore ,' the 'ultimate results Of the projections made by this study ,rest, in large part, with the citizens of Denton. R '4 i 5 4; 8 .....-.� ..mow �+.► .'_"�_ ti+� � EXHIBIT 1-9 1 PR(W�D HQUSING G i� ;i I mini ro ected 0 ond Household a of Housin Price in a0sa ds �, .--. ' r ~ ^ Eel- First earaf o ulat un Ho seh 11 Gr h �t�- -- 61 1 1978 51 , 650 16,890 690 19 9 1 1979 53,300 l'7 SO 720 135 48 1i6 86 20 10 6 2 1980 650110 18►300 750 4;52 60 121 89 10 6 2 4 56►990 19,054 410 62 126 93 21 t 1981 . 19$830 780 96 22 11 +� 580g�0 7 2 1982 810 489 54 60,930 200 512 57 131 ' 101 23 11 7 63,040 21 ,490 LO-5 24 11 880 530 . 65►140 22,370 44 12 i; 1986 5,480 30304 366 883 652 148 71 Tota] 100% 60 .4% 6 . 7% 16.1% 11 .9% 2.7% 1 .3% M 2% + ' Percent Distribution ,6% ` 1 > , 2 .176 16 ,8x 40.6% 30;0% 6.8% 3.3% 2.0% Single F&M11Y _•,� 100% Distribution S ; II . „Maxi ►t Potential 40 ' 61 X560 16,890 _ 431 63 147 ' 144 92 . 95 � 1978 54, 51'0 17,950 1 LOGO 947 117 325 318 204 211 ]29 55 1979 20,290 2 0340 197 126 131 66 1 �8p 61 ,600 10450 586 151 1981 66 ►010 21 ,740 1 ►730 700 87 240 235 133 138 84 58 71 ,260 23,47Q 619 77 213 208 96 67 1983 26,000 1 ,50 243 238 152 158.; 750890 a 0 757 94 260 254 1663 168 26,750 10750 'j 1984 81 ,200 28,G20 1 , ! 708 1986 86,890 630 1 ,594 10021 1 ,057 645 446 . ' Total 11 .730 4 ,748 589 ] 6% 8.7% � 9:0% ' 5.576 38ii ; �+ tion 100% 40. 5%` 5.0% 13.996 ] 3., ;v percent 'qi stribu 6'.4% 6 ,982 1 Single Family 100% 8.4% 23.3% 22 .;8% ]4.6% 16,1% 9.2% Distribution - a y=Pshk,.r.=ei+sA.v,'ati=st•v.rvr.+1e rw te r.... vkis.t4 .4r..w0lhvYf,•1.a•' , b w♦r.xr t4ayryn$+:aeFila�Hi.dnNr.r-.A . a Exhibit 1-9 Protected dousing Demand `111 - Anticig§ted Demand t First of Household Type of Housing Price in T o sands Y— e LQPUI&Ltion Households Growth pt, -5 0-40 0-6 60-75 1976 610550 16X890 1979 530810 170760 830 420 50 130 115 55 50 30 20 1980 58 0710 190510 1 ,530 690 85 220 200 110 110 70 45 1981 610640 20►515 10105 520 60 160 145 75 70 45 30 , 1982 64►920 21 ►860 1 ,245 585 70 185 105 85 85 35 35 . ; ' 1983 670940 23x030 1070 565 65 170 150 80 75 45 30 , 1964 71 ,300 24,335 10305 610 75 190 170 90 85 50 35 1985 74,820 269710 1 ,375 645 75 200 180 95 90 55 35 Total 8,600 41025 . 480 1 ,255 1 ,125 590 565 330 230 : Percent Distribution 100% 46.8% 5.6% 14 .6% 13 .1 % 6.9% 66% 3. 4% 2.8% rl ' a Singl e; Family 4, 675 Distt'ibutian 100% 10. 5% ; 27,4% 24.6% 12.9% 12.3 7.2% S.Ox , 1.. r ^r•.h+a+'.. ...�„,,,,,,,,,w,,...,.'+SF+Twa..., .,pupnw. ..�„wn.... ...pl�lT "• T!!w. ' wwr ,..,w.... �igan,M•w.wirYl er�.n-,,...e._. .. .«..:..,,-a+rrK,w..w..... r.:.r,w . _ _ . ,, ' A=='`XsYrl jai'lGfk.ls{ux1Vt#3r\F'sfk.f{pr: ut:er.,t.aM`”tTeS'eSIL'.4S1F�a/r'e�.*-':,x!aWYM-#]ra s4u u...�:.... r..,r.e.,.n'.k,l\YHrfe`a;2AY..H�.ft"s:4-+iFM.r vrs-... i r L.,l 5 TEXAS HOUSY NG ACENCY' The- 66th Session of the Texas Legislature passed legislation creating ; the Texas Housing Agency (THA).. Governor William P, Clements, Jr, si§ned E . the bill into law on June 74tho 1479, The Agency was formed to provide i public assistance to low and moderate income families in need of decent, . safe and sanitary housing. YHA is empowered to issue tax-exempt, mortgage revenue bonds. . Bond ' proceeds can 'then b,e used .to purchase mortgage loans currently in lend institutions' portfolios, to urchase new mortgage loans originated by qualified lenders or to, f The loans can be for both 1ow and mod- ' ?'eaate income'faraily ownership or rental. The public purposes and objectives of the Texas Housing Agency i4clude: (1 ) increasing the su ply of sanitary and safe housing units for eligible i families in Texas; (2� providing short and long term mortgage financing of 1 housing at affordable y rates; (3) -supporting, encouraging and su lamenting pppp (4) of str resources that provide housing units for eligible families; i 4) helpin implement the goals and objectives of the Texas State Hopsing Plan; ;and ?5) operating the Agency without requiring assistance from�State tax revenues. i The Governor appoints Board 'membars to the Agency. The board: is com- posed of appointees having specific le islatively defined backgrounds. The r Individuals will be ' fields: persons with exper once in the following professional ; Place l - Housing Development Administration Place 2 - Commercial Banking # Place 3 ,. Real Estate 'Operations Place' 4 - Home Building Place 6 - Apartment Construction or twmership Place 6 - Mortgage Banking Place 7 - Savin'ggs & Loan Operation's Place $ - Municipal or County. 6overnments.: Place S' = Housing Problems.of Persons and Families of Low Income and Families of Moderate Income f The Chairperson of the THA Board is also the Executive Director of the Texas Department of Community Affairs. The Chairperson is a non-voting , ox-officio member of the Board. Governor Clements has presently appointed the following persons to serve on the THA Boards 9 De Mr, Sidney M. Wieser, Chairman Mr. Ricks Wilson, Place 5 ,Mr. Salvador Canchoia, Place I Mr, Wade T. Nowlin, Place 6 Mr. Bookman Peters , Place 2 Mr. Ray P. Moudy, Place 7 Mr. James P. Ritter, Place 3 Mr. C.W. .Hetherly, Place 8 Mr. Doyle Stuckey, Place_4 Ms Katherine Crumley, Place 9 ' i h 'For more information you can contact Ms . Earline Jewett or Mr. 'Jim Williams ' of the Taxes Deppartment; of Community Affairs Housing Division. They can be reached 'at (800) ; 262-9641 or (512) 475.3383. The mailing address is P.06 Box ? 1$160, Capitol Station, Austin, Texas 7 ll . } t r i 1 1 2 ;q • r MU I FHCT.�+ 57 FITTBB'URG H0U:tING;, ;. I a NY 0IF?; ) --I4 DER11 WITTER RE'i'NC711. S—SWRO GROUP PURCHA' ED vlo t-lEG TIHTIbN $50 MILLI011 F'ITVIIWRI, '(CONTRA CO$T8Ii_CIINATY) .t CAL . � 19,3►+ HOME MORTGAGE ,REYENUE 8CthIDS . THE 801; 16 1-1ERE F' T =c-i �� FOR $9 . $35 `MILLION . CF DFC, 1s 198/ 34/ 98 , a , cr Al Af . t RQR Jr�#�1 � tr THE 1933—I;6 MATi3RT f AT pfiRJ. THE 1997 8E3� YHL AT 9:� . M- H3 t I s A 0 D 1998 A '39J CIA; H,, t 16. r THE I:3SUE 1 $ `PLATED ' ,r R „ BY Mi�1iriT+ S INVE'3TOR'3 8EF�'UCE. REO F'ERVIG .SCALE FLIP THE BERIAL.' f 8. 750 . 00 5i 50s75s 10 . OOP 15s34s ' ,t 45� 6s�17m. b6+�+s'9EU 11'. l3�sGra)"iLJ C`•i NGE8SI+aN :3'4 111` i983�-'851 '!ND 1 (OME) POINT IN 1986-98 HND 2012 . OR IEPS O 1992-94 ' AND 1996 .91 IST COMES IST aERYED , 111'06: 12AM 24 ', NOV61BER I ., i I, E � i , I I r OOti13i;E'3'311)I'IIAI +:OFJr'ERCCS RESTRICT USE OF 110RTGAOE BONDS HOUSE-SE11ATE CONFEPEES TOI=A`I AOP EFJ 0 IJ L id`T."s�TT?�T�T i)-A '�1 R"I +��' 1'f{ U*a�-u F�"t RYti'=F" c �"BONDS FUR '� L ►.+J�'�I": +: I:'3 iloal. I EB THAT STATE AND LOCAL G+)fJERhitfl4 '+ k,'3 1'1A'i I ' '7+IE ±4+] ok) Bous tIT I L 'wi h 1 : T T kiTl�I]t1C'` s) ii� r'E;?iMNENi RULl-- IIGREE11 upi.ItI Tuf�H ', � 'C � , ,, s• RrENVIT + WHICH C4i'IE3 lip,. FART 131 I r � '� 1. 13 J .'� 11Ci11Cr, I »I�, r � J r I IHC ill;►;+111+: II» IA r i +)tt i ILL + THE VOLUME OF NOR T Ii 6E :301IIIS D i1ITIf i','+ li +) I �iwtf i T ATE IN 'A 61L). tI `SEAN rlri'i t101 'E ,tCEt D i _ FI R I T + F 'sit r�LE—F All 1E_ ;,4,.— i1 +:Y�.'tti�_ )r.Lt3i._ 11I. t `1 Jii+] "S 1) +, 1rJII1l :� TL fit! R ;TATc � U ESTAaL I SH ATI ANNUAL ETA 'J;WMC +:tih '3r 20 �iIILII +]tI , � W -11-211 02DEST „ 1 t 0,139 eti " " s I I"I j Y.i�. :5 RESTRICT USE F 11 o G i B ' „j I' 1 T10N It'i STAT LE +] 1 -3LATU^ ' ' : TRIES Ht+D • ' . 1 ;' ,�,EClT1.Ifja .J r' —T3i1LUtlE ' N A 50� � +:� LOCA1 IT11»'a !11311+ B :Pr I I THE +5�l,:RIA?L� .r ;nr I , f f ,, r ! f AUTf u <I 1 I I I,I �t.rt, t I �'. ] s T N 1i" +]d I]kI`�B r C Ia T �.1{? ?Ir l i N Ci THAT f4 0 4'l O R 7 G ' w ,N10�w�� k,J. ` tot IHOUT aPECYr" t +: `G, S\l GAG liv , 1;1a{IIJ1�,I: a•9 111 111E APR?tjll{At, l K iHl; l�L" G I'3iC?;« BI]It'� R 'al r# IprMENT IN THE HOUSE ptA:�SEYI C i.iw✓ BILL " UOULB hl!'AI- 'i AFTE? -;11N , J + l a �w_f UNDEP THE C�ilii'ROMI ' C THE I;I]iVI- I.N;L" E'3 ` A='REEB TO I ROP ENTIRELY FF:OM THE 110R,T+]t?I� » ~,&r3f1,7 I:I)i'iiastil3lll ' � TH COMF'LE .{ Y111:Ohfc -Llhl'iT prIf3lJ Ity,113s13 1 I r il: iiI]Lj 1 I'lA;; :;EI� 1s 1LL , THE `r „ I ^I: i� T iC L ► r`I I l i,I THC FINAL f ACKHut t l! ?l; 1,I� FXO.it THE THE O ilia, 0"C-i 3 iA03 DCLCr � B THE Hi�UaE ' FRa11I 'SIf tJ P1� lalw, Ihi+] i� i31. r11'.' I: O.f? Y1] 1tiF!TII� 3 It) h1O ? TuAOE sO1+Tl EAL '� A'll3 �, t Cir il, Tj ! H!• R �+]1J II� :PICtIT THAT ALL IIOr,Ti,AuE ;I:ItIU 1 .�'3UE :i I IiL,S ] a - :1k' I�tl%I��;►7U1 � ]i't' 1J+3,Tt"a . nj-11-21 13 29E'3T + r i I WASH (1 PX ) --THE APPROVED RULES SAY T R may` E 4' I ! 9tP . fif i I o H T tfl7F TGHI;E RG�r fILIF I`rhJl]',, I:- :;�I IF�TI,_ r .4 f= ir TA*ABLE� +. t 01d I "s �,',1.IElI UHLER TIME ';'CI TE AFT •r HLJV,-$%E PRICE LIMITS NIID � ' h1ITH7ICIJd, WILL BE ON A TAX-EXEMPT BAS 1,8 THRC+LIG'H i '3:rS, THE; COh1F`.h1114I '.,E LETS MCIRTOAGE I FOND ISSUES UNDER EITHER THE HCiU� E 11MIS Ah111 hiE1111S I:OI' MI TTEE CIJIDELINE!13 OR THE F;fw9;OLLITIOI-j PASSED BY THE SENATE COME 1'17 11H'Rj ET TAX-EXEMPT 'THR'I`IIJIIH 1988.:4 EIHAL ArPRO� AL OFITHE AUDGETI'RE"OtIC. ILIATIOth INCLUDING THE 1-IORTGArE REVENUE BCttJD L~Oh1PROp1 Y c;E p 13 EXPECTED THE F IR'BT WEEK OF DECEMBER � I HC+LIE STAFF AIDES SAID. 1 : NrATE t I111 { 5o to : :37F'h1 21 NOVEMBER I 5121 s rICIPM CLEAR 23-? NEXT I 1 MUNIFWTL 23-" t a MORTGAGE OatgT+w (o) i QlFX,) --NEAF'LY FILL THE RESTRIC;TIOH'n' IN THE HOLL-E'4nA ;; ED SILL 1-uf' ' ? NcL IT'I'll IN THE OCIM ROMISF.t E �.�I_ i r INCO �. , . „ . „ . IIC L. II�IIT,:,� A �ki7I.IIF:El11 ��1'f THAT NI.IM V L1vtI11FF;.. JOIN IA ' hir:rFT�,HI.,Ir EIC+III1 AR'QIGF<AI,J, H1-111 MITE APPROVRL 1:1f ALi.. hlCiltT'+;FIr�E: ;` SOI•ID 1 `:ZUF, ThIB REEnTRICT101-1 THHT MULTI--FW-1101 HCJJSII.II; GOULD BE N L.11-J, IF AT LEA;,;T' 1M L r' "THE I.H1I T: Nr E OG+1IJ1' I f.11 BY 1,011 At-111 P1171+URATL ItICO11E V ARNB RS) I,a IS RCLtiXE 7 �l Ai.LCiN 15% G)LOT10H 0 ELIGIk? II, I 'r1' Rr,,c., JIPEMFNT FOR K'uL:T'I'D FtF`F'I`I I I ^' TIM W ''OKLY DOND GUYER Odober 130 1080 o t ' R wenu# raising packske, the NouM ' Senate Task Force Recommend incorporated its mort,9890 bond bill so the coliferertr tliuwt now take up the Targeted Use of Mort aye Bonds „r� i� theaYem�er lrme �ek b Ntornwhile, dy, h; eaded.Senf. BjGrcChcllChelP Lloyd Ientaen�U Tr hairman o the Joint Etonomse Gommittee,is in- tended as the Utmopratse rvxponM to t� WASIIING"N — A task fora of about the statua'of these bonds, W. Republican efforts to cut taxes as a i h 25 Democratic senators recommended gress must adopt legislation specs• solution to monamic problems, i N that tax-exempt mortgage revenue fving what the perms+able usek of `rne task force banded tngother In 1' bonds he tar Feted and that ('drigrees these bonds will he." June and developed stn recommends 4 i Spot adappt �rgislatton outlining the Although the !douse hay paettid a pions Independently of the Cortor Ad• t "permissable uses' of the financing bill restricting mortgage bonds, the ministration although the sugstestiona Senate has not yet consider.<i the and to resemble White !louse pnliey. 1 The economi� report set forth issue Hut,`the panel takes a Ivis aco sit r� t►eriesol ccanamic Ms Icy rccommenda• attitude about lnduhtrisll development ? Pions and included the brief mortgage The Garter Administration opposes and presses upon the need to shift to t.. t;} bond {n d Intl in the housing and con- mortgage bonds and the Trvao*ury Do- innovative production strateinck for � A bond l r geirl . partment has lobbied Congress to ban firms in basic industries rather than ;L A the the financing tool, subsidize jobs or working capitail for l Specificallythe report said, "The However, j targeted use of Stain and heal tax• the question may he re- unprofitable firms u t exempt mortvage revenue lwnds can solved as pars of the budget reroncil• • be anaphor means of providing most. iatiun .process. Althouwht the Senate The task force also calla for a major �raaggee credit to lower-income house- did not include any °mnrtgage bond tax cut in lost aimed at stimulating holds at below market interest rates, provisions in its spontling cut and business and productivity. 1 Because of the t1orrent uncertainty Contsntml41n twOl14 Furthermore, thN Senators said the � Federal Govern merit should, eoncen• into on langer-terrn. Steady cconomlc µpolitics. in this tr'itard, the U-4 force id the Ftdoril"Itese;ve hoard should � avoid stop-and-go twlicies, emphasinix c;1 that money rates and credit I is pgreiwthshould not be brought to their i c ultimate long-run growth rates° too quickly. "Since wage and price inflation show considerable momentum, the growth of the supp y of n Mortgage Volume-,,,, De{� ` i r,f the { Bond \j /ne'7 burden Of an} aitrU t wncV and Jess Continue to Increase iWit mould fall an pad n inflation and 3 etnploZ'mcni rather than an inflation Will! the 'report said. i 71re. ta_+k force also lashed `obit �y..,1%NO.i06MO w solnaCroturning to the gold standard ; I i as a means of stabhzing the dollar, i WASHINGTON--Theelnale-farm- mortgages that Mould be higher than eying such eugxestions are '"ill- morigage ro-onue bond picture ton. 9.;i'r, market sources noted. founded and Ill-advised.' times to look dismal as issues con- Furthermore, the l'uluykl issue tlnue to trickle into the"marketpla e, would let salad udder the so�'ulled lung I J With interest rates climbing up resolution which gives the issue some wards, poor market conditions slid uncertainty, The resolution by Senate ; votertainty about pending God• finance (gnimrttev Chairman Russell grc*sional legislation intended to re• Long, U•La.,allows mortgage bonds to strict the financing tool, very' few be bold without restriction' for the Issue* have 6ensold over the past remainder of this year and requires three months, morwage commitniontt to be made During the first sir months this within one year. However, despito the ; I yy•ecar, $6,172,170,000 of issues clearly Senator's bntention to olKn up' the identitled as single•fainiN, mortgage mortgage bond market, buyers are bonds were sold coru unu arva to the past shying away, from the Long issues, throe months of issues amang to particularly in the secondary market $10745,020,000. Last yoar's'tot aI of all In the meantime thq interest rates he sing bonds came to more than $12 on bond issues are starting to creep biIlon,., upward amain. Stptombor writhe worxtmonth for The Mvear revenue bond Index has ortgage bonds with only Seven kin- jumped 163 bails taints Mato June e-family lilacs totaling EJtw,0h0,000 and the yields on hi,using bonds have sold, August was almost as dienial been as high as llar'i'. The til-yenr with seven Issues marketed amount- revenue band av'eruge is currently i ing to V195.040,000 million. In Julv, 9,911.r, only slightiy. lower than the ; seven Issues were sold equaling 059 April recoril high of 10.25% I ` million, including a E« O Alaska Hous• In this regard, a $125 million East Ing Flonnce Agency, !!aeon kougv, moats .,L a �aue twnd is• Those !ceases are it far cry from the suo %-as sold with a 1U.:i'A interest I June peak when 15 single-family is- rate in late Augu+t dvspite a double sues sold bringin the month's dollar "A" rating from MooKdy's Inventor's volume to 51,12 million, Service, Inc., and Standard ds i'oor'a I $ A number of Issues have been Post- Corp. l' poned,'canceled or sized down during the past six weeks. 11 *use of current eonditlam affce• For oxnmple a single-famlly !glue ting the tuind niarkct and t he lingering , In Cleveland ('aunty, llkla„ N'us sized niortitage lKind legislalsun, invesiment t downlront M1 million to tCa miliiun bankers art, now necking new ways to while a hIldlilnd, Tex,. issue wrot re- nlarket the issues doted from Ot.) million to million Street talk Indicates that some In. i AkI ,? and an Urnngv (ounts, Calif, iv,ue vestnirnl bnnkerk are tuvmg Nn}, Is• wAs deopp ed from f•M inlbioit to$100 suing short•leros IMUUIs phut ruuld ba milliom lakrn out in It) yearn even thotwh the is In addition. n St:!tlt) nt1111nn I'ulisxkl IKxlitB N'nUhl bl' KtrIH'IUr1'Id lo lnllkl'�IU• Counly, Ark, worigoge holed ir�xu(1 hax )VAr HIM tgngv lulu+a, 'Three tvyies of beta on hold for weeks wailing for saxuvx would d be Kmrdl Iti (11111-It Kitt! 1!' better ninrket conditions. There hue beeuuxe funds would IS' needed us piny Isrtn n istntkvt rcluddanra to orceut off the Ininde in lu years I � 3 L-4 ri t } 60 00 O N N W lA N C : r 00 �fi 1r N O V „ z �r rids > � pi R I F � t� l ]t *1 �i { i� : f i a r r} y V Y S Sk ki I ti y S t? rY WA r I t�: , j � p k to , 1 4 r 5. 5' • «i �? 5 III I Q, 1 1�� �' M H jj NJ JVP { ; II s [; �4�, N � �► o u � � � �n '� �. : 1, ~ �Y ON 1� n 1 31 �► o w w w n Ltl l i' I V W N N p � ✓ f �S I �Iti M+ W N r V y v0 `0 N r I f f ch tj Do t\