VHFC Financial Update

January 7, 2022

Victoria Housing Finance Corporation

The Victoria Housing Finance Corporation (VHFC) was established in 1979, pursuant to the Texas Housing Finance Corporations Act as a separate not-for-profit entity to provide safe, decent and sanitary housing for persons of low and moderate income.

The Corporation is exempt from federal income tax, and from state and local taxes. It is authorized to issue debt/bonds for the purpose of supporting affordable single-family home mortgages, and issue private activity bonds to provide financing for multifamily housing projects for low and moderate-income owners. It can also serve as a general partner in multi-family housing projects.

The financial information below is consolidated between VHFC (parent) and its subsidiaries: VTX Enchanted Gardens Contractor, LLC; VTX Enchanted Gardens Co-development, LLC; VTX Enchanted Gardens Holdings, LLC: and, VTX Enchanted Gardens GP, LLC.

Enchanted Gardens Apartments

Enchanted Gardens Project

Construction on a new, affordable workforce housing development, Enchanted Gardens Apartment, began in August 2021. Realtex Development Corporation purchased the property on North Ben Jordan Street from the City in July. The $32 million project is primarily financed through bonds issued by the Victoria Housing Finance Corporation, a nonprofit housing finance corporation led by a board of three City Council members, and through the Texas Department of Housing and Community Affairs’ noncompetitive 4% housing tax credit program. Enchanted Gardens will be Victoria’s first new housing development since 2007 to leverage federal low‐cost housing tax incentives. The development will create 168 housing units and more than 200 temporary construction jobs. The complex is expected to begin leasing units in July 2022 with construction being completed in October 2022. Housing at Enchanted Gardens will be reserved for residents who earn up to 60% of Victoria’s median family income, which is about $43,300 for a family of four, according to the U.S. Department of Housing and Urban Development.

Click here for additional information on this project.

Odem Street Project

The NRP Group, a multi‐family residential developer, is proposing to build a new 324‐unit workforce housing community on the southside in the Silver City neighborhood. The development is called Odem Street Apartments and will be located on an 18.5 acre tract at 2303 Odem Street. It is hoped that this development will serve as a catalyst for revitalizing the Southside of the City. The development will have 12 three‐story buildings with 1‐4 bedrooms. It will also have a standalone clubhouse with state‐of-the‐art amenities and resident services to include a business center, 24/7 fitness center, swimming pool, children's activity room, community room & kitchen, washer & dryer connections, package concierge, granite countertops, modern cabinetry & flooring, energy‐star appliances, walk‐in closets, 9' ceilings, and spacious balconies. The total development cost is estimated at $57,000,000. The development will be financed by the State's non‐competitive 4% Housing Tax Credits program managed the Texas Department of Housing and Community Affairs (TDHCA) and Private Activity Bonds issued by the Victoria Housing Finance Corporation. The 324‐unit mixed‐income community will have rents ranging from market rate to affordable for those individuals and families earning at or below 70% of the area median income. Monthly rent will range from about $320 for a 1‐bedroom unit to about $1,300 for a 4‐bedroom unit. The project is being built to target working individuals and families in need of affordable housing near their place of work. If approved, construction is scheduled to begin summer 2022.

HFC Land Bank Program

To promote homeownership, an HFC Land Bank Program, or "Infill Development Program", is being proposed with the objective of acquiring vacant, problem, or distressed properties within existing urban areas that are already largely developed, and return them to productive use for affordable homeownership opportunities. There are significant amounts of vacant and underdeveloped land in the inner-city, especially in older areas on the south side of town, which can be utilized for affordable housing. The Program will allow the City to achieve the following:

  • Identify exiting vacant or under-utilized sites or parcels within the inner-city in order to establish a land bank.
  • Hire a land use attorney in order to create a legal framework to allow infill residential development through the City Code and create a strategy to clear up property title issues and address property liens
  • Evaluate a tax rebate program to promote affordable housing and non-profit development

Shown above are the cash balances as of September 30, 2021 and December 31, 2021 for the Victoria Housing Finance Corporation and the Enchanted Gardens subsidiary accounts.

FY 2021 Activity

  • Revenues (Other Financing Sources) and expenditures (Maintenance and Operations) include $132,500 of transfers between VHFC and its subsidiaries (net effect equals zero). These transactions were recorded to provide seed money to the subsidiary bank accounts and transfer the Developer Fee paid at closing from the Co-development subsidiary to VHFC.
  • Miscellaneous revenues include $80,000 for bond issuance fees, $36,000 for administrative fees, and $112,500 for Developer Fees paid at bond closing by RealTex Development Corporation.
  • Due to FY2021 being the first year of accounting transactions, the ending fund balance for VHFC is the net difference between revenues and expenditures for the current year, which was $233,985.

FY 2022 Activity

  • Current expenditures include a survey on 24 acres of land on Ben Jordan near the Enchanted Gardens project, which was being considered for a future affordable housing project.
  • The HFC Land Bank Program would require expenditures related to legal fees and the costs of purchasing the land.
  • There is no financial activity related to the Odem Street Project anticipated in FY 2022.