ESBD_377241_1726852573903_332-RFP24-1014 Financial Advisor 2024_ESBD Final.pdf

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Request for Proposals 332-RFP24-1014 for

FINANCIAL ADVISOR SERVICES

By Texas Department of Housing and Community Affairs

Anticipated Schedule of Events Date RFP Issuance: September 20, 2024 Written Questions Due: September 27, 2024 Response to Questions Post: October 02, 2024 Proposals Due: October 18, 2024 (2PM) Contract Execution: November 15, 2024 Commencement of Work: December 1, 2024

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TABLE OF CONTENTS

PART I GENERAL INFORMATION

1.1 Introduction

1.2 Background

PART II SCOPE OF WORK

2.1 Service Description

2.2 Term of Contract

2.3 Limitation of Authority

PART III GENERAL INFORMATION

3.1 Authority

3.2 TDHCA Rights

3.3 Respondent Obligations

3.4 Successful Respondent Obligations

3.5 Schedule of Events

3.6 Issuing Office

3.7 Submission of Questions

3.8 Deadline for Submission of Proposals; Delivery Instructions; Number of Copies Required

3.9 Confidential Information; Nondisclosure; Open Records

3.10 Media Releases

3.11 Non-exclusivity

3.12 Incorporation of Exhibits

3.13 Transition of Services

3.14 Payment and Invoices

PART IV PROPOSAL FORMAT

4.1 Introduction

4.2 General Organization of Proposal Contents

PART V PROPOSAL EVALUATION AND SELECTION

5.1 Evaluation Process

5.2 Selection Criteria

5.3 Respondent’s Past Performance

5.4 Protest Procedures

EXHIBIT A TERMS AND CONDITIONS

EXHIBIT B EXECUTION OF PROPOSAL

EXHIBIT C HUB SUBCONTRACTING PLAN

EXHIBIT D NONDISCLOSURE AGREEMENT

EXHIBIT E CONFLICT OF INTEREST STATEMENT

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EXHIBIT F CERTIFICATION REGARDING PUBLIC NATURE OF THE PROPOSAL

EXHIBIT G VENDOR REFERENCE QUESTIONNAIRE

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PART I

GENERAL INFORMATION

1.1 Introduction

The Texas Department of Housing and Community Affairs ("TDHCA" and the “Department”) was created pursuant to Chapter 762, Acts of the Seventy-second Legislature of the State of Texas, Regular Session, 1991, as designated in Chapter 2306, Government Code in part to increase the supply of affordable housing for low- and moderate-income Texans. The Bond Finance and Multifamily Bond Divisions of TDHCA issue tax-exempt and taxable bonds as well as other alternative types of funding to finance single-family and multifamily housing.

TDHCA is governed by a six-member Board appointed by the Governor with the advice and consent of the Senate serving staggered six-year terms with the terms of three directors expiring on January 31 of each odd-numbered year. Members may be re-appointed.

As a result of this RFP, the Department anticipates executing a contract with the successful respondent to perform the services and the contract, if any, resulting from it (the “Contract”). The time and number of contracts resulting from this RFP and all procedures relating to such contracts are within the discretion of the Department. Successful respondent, as an independent contractor, shall provide services under the contract, at its facilities and with its own personnel.

1.2 Background

TDHCA is issuing this RFP for Financial Advisory Services to the Department for its single family home ownership programs and its multifamily mortgage revenue bond new issues and/or refundings. The Financial Advisor will serve as the Department’s independent registered municipal advisor pursuant to the United States Securities and Exchange Commission Municipal Advisor Rule.

DESCRIPTION OF THE TEXAS DEPARTMENT OF HOUSING & COMMUNITY AFFAIRS

TDHCA, a public and official governmental agency of the State of Texas (the “State”), was created pursuant to and in accordance with Chapter 2306, Texas Government Code, as amended from time to time (together with other laws of the State applicable to the Department, the “Act”). TDHCA is the successor agency to the Texas Housing Agency (the “Agency”) and the Texas Department of Community Affairs (the “TDCA”), both of which were abolished by the Act and their functions and obligations transferred to TDHCA.

One of the purposes of TDHCA is to provide for the housing needs of individuals and families of very low, low, and moderate income and families of moderate income in the State. Pursuant to the Act, TDHCA may issue bonds, notes, or other obligations to finance or refinance residential housing and to refund bonds previously issued by the Agency, TDHCA, or certain other quasi-governmental issuers.

Single Family Homeownership Program

The Department has a robust single family homeownership program, through which mortgage loans are originated through a network of participating lenders. Tax exempt financing (bond and MCC) is made available to low to moderate income first-time homebuyers that meet IRS requirements for tax exempt bond programs, including purchase price and income limits. Taxable loans originated through the Department’s program have higher income limits (125% for non-targeted area loans and 140% for targeted area loans), and do not have a purchase price limit overlay.

TDHCA’s Single Family Mortgage Loan Program provides first and second lien mortgage loans the My First Texas Home Program (“MFTH”) and the My Choice Texas Home Program (“MCTH”). Historically, TDHCA has used single family mortgage revenue bonds (“SFMRBs”) and a TBA Program to finance loans.

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Eligible mortgage loans include FHA, VA, USDA-RD, and conventional loans eligible for the Fannie Mae or Freddie Mac Preferred Programs. All first mortgages are pooled into Ginnie Mae, Fannie Mae, or Freddie Mac mortgage backed securities (“MBS”). Loan and financing structures are subject to change by TDHCA at any time. The Department’s Financial Advisor will assist the Department in evaluation loan and financing structure options under consideration by staff or proposed by financing team members.

The two primary mechanisms used by the Department are:

TBA The TBA Program is an adaption of a private sector mortgage model generally referred to as a To Be Announced (“TBA”) program, by which a third party (the “TBA Provider”) agrees to purchase MBS backed by Ginnie Mae, Fannie Mae, or Freddie Mac, at an agreed upon price and within a certain timeframe in the future.

Currently, the TBA Provider issues daily price quotes for the future delivery of the MBS, depending on the underlying mortgage rates, and the Department sets the rates for its single family program accordingly. The mortgage loans are then originated, secured into MBS, and delivered to the TBA Provider at the agreed upon price.

The Department’s current TBA Provider is Hilltop Securities. The Department has integrated the Program with its single family indentures. A portion of the second mortgage loan is funded by one of the Department’s two single family indentures (Residential Mortgage Revenue Bond “RMRB” Indenture and Single Family Mortgage Revenue Bond “SFMRB” Indenture), allowing the Department to offer the lowest possible mortgage rates to low and moderate income homebuyers.

In return, the indenture receives MSR either in up front, or through ongoing excess servicing fees against the related first mortgage, and the return of second mortgage loan principal, as applicable, when the first mortgage is repaid.

Currently, all mortgage loans originated through the TBA Program are accompanied by a DPA Loan through which the mortgagor receives funds for down payment and closing cost assistance in the form of a 0%, non-amortizing, three year forgivable or 30-year second loan that is due on sale or refinance. Mortgage loans originated through the TBA Program are pooled into mortgage-backed securities that are sold to third-party investors.

Bonds The Department issues tax exempt bonds for new origination on a regular basis, and has been moving toward the goal of making available a constant supply of tax exempt bond proceeds, which would require close monitoring of the use of existing bond proceeds, and careful planning with respect to the size and timing of each new bond issue.

The Department also issues taxable refunding bonds, and junior lien bonds, when circumstances warrant. The Department currently has an underwriting team that consists of eight underwriters, all of which are eligible to be senior, book-running manager, or co-senior manager; all eight firms are eligible to serve as a co-manager for a bond issuance.

Currently, all mortgage loans originated through the issuance of bonds are either unassisted (no DPA) or are accompanied by a repayable, 0% non-amortizing, 30-year second loan that is due on sale or refinance.

Detail for financing method for the past three years:

TBA

Tax Exempt & Taxable Bond Total

2024 thru May 104,097,737 207,038,624 311,136,361 2023 656,936,588 982,155,933 1,639,092,521 2022 538,053,306 873,221,091 1,411,274,397 2021 1,454,253,734 259,041,420 1,713,295,154

2,753,341,365 2,321,457,068 5,074,798,433

Single Family Loans Purchased by Financing Method

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Indentures and Excess Servicing

As previously noted, the Department has two single family indentures, the RMRB and SFMRB indentures. In addition to being used to issue tax exempt bonds for new origination, both indentures invest in DPA and excess servicing fees. Full sets of cash flows are submitted to the rating agencies (Moody’s and S&P) at least annually. Cash flows include the receipt of excess servicing fees, but exclude any expected return of DPA. Excess servicing fees are modeled for all mortgage loans currently serviced by Idaho HFA, the Department’s master servicer.

Currently, the Department has over $8.7 billion in mortgage loans (approximately 47,000 loans) against which excess servicing fees must be modeled and included in the appropriate indenture cash flows. The financial advisor is responsible for modeling the excess servicing fees, using Bloomberg as a source, and including the appropriate level of excess servicing fee for each mortgage loan.

Indenture summaries:

Multifamily Bond Program

The Department is a conduit issuer for the State of Texas with statewide authority to issue tax-exempt and taxable Multifamily Mortgage Revenue Bonds as well as Qualified 501(c)(3) Bonds (together, the “Bonds”). The Bonds are used to fund loans for the acquisition and rehabilitation or new construction of affordable rental developments. The Multifamily Bond Program is coupled with the Non-competitive (4%) Housing Tax Credit program when the bonds finance at least 50% of the cost of the land and buildings in the development.

Other types of financial subsidy may be used in the capital structure whether provided by the Department (e.g., Department-administered Multifamily Direct Loan funds) or others (e.g. HUD, local funds). Applications for financing are submitted to the Multifamily Programs Division for review. They also undergo underwriting in accordance with the Department’s Real Estate Analysis rules as approved annually as part of the Department’s Qualified Allocation Plan. A recommendation to issue Bonds is made to the TDHCA Governing Board. Properties financed through the Multifamily Bond Program are subject to unit set aside requirements, maximum rents, and other program requirements established by the TDHCA Governing Board.

ASSETS SFMRB RMRB

Cash and Investments 224,599,549 42,307,376$ Mortgage Backed Securities 1,345,730,471 1,040,747,667$ Accrued Interest Receivable 5,101,460 4,410,198$

TOTAL PARITY ASSETS 1,575,431,480$ 1,087,465,241$

LIABILITIES SFMRB RMRB

Senior Lien Bonds Payable 1,496,274,840 1,036,867,677$ Subordinate Lien Notes Payable - 10,000,000$ Accrued Interest Payable 29,679,469 11,972,937$

TOTAL PARITY LIABILITIES 1,525,954,309$ 1,058,840,614$

Equity 49,477,171$ 28,624,627$

PARITY (%) 103.24% 102.70%

Down Payment Assistance Loans 217,573,629 161,362,751

Assets and Liabilities of Indentures as of February 29, 2024

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PART II

SCOPE OF WORK

2.1 Service Description

Respondents would be expected to be prepared to provide services as necessary and to assign experienced professionals employed by the company who are best suited to respond to TDHCA’s requirements. The Department expects the respondents to provide services related primarily to its single family bond finance activities and TBA program; and/or multifamily bond finance activities as outlined herein.

The general anticipated scope of services to be provided to TDHCA in connection with this assignment is to provide the Department with knowledgeable and prudent advice and recommendations in connection with the structuring, issuing and managing of its bond indentures, TBA program, and related instruments to effectuate the Department’s objectives and avoid inappropriate risks or costs. Such services may include, but are not limited to, the following:

SINGLE FAMILY

Financial Advisor Services:

a. Advise as to appropriate timing and provide comprehensive MRB structuring alternatives for issuance of debt.

b. Review the bond financing documents, as applicable.

c. Assist with the selection of underwriting team, credit enhancement providers, and other parties.

d. Rating Agency consulting and relationship management.

e. Provide comprehensive TDHCA financial and capital adequacy analysis and reporting and assist leadership with strategic planning initiatives, including program design recommendations.

f. Attend Texas Bond Review Board and TDHCA Board meetings as required.

g. Provide other financial advisory services as requested by the Department.

Quantitative:

The Department is seeking HFA best-in-class quantitative analytics and reporting. Where applicable, please provide samples of your reporting capabilities for each item below.

a. Analyze and advise on proposed structure, pricing, expenses, underwriter’s compensation, and attributes of proposed issuances, including any new single family bond structures of the Department. Review ratings, including rating agency stress tests and other evaluative criteria, and assisting in developing, as needed, strategies to achieve and maintain ratings that are consistent with ratings objectives of the Department and the State of Texas. Prepare rating agency and management cash flows which incorporate all rating agency requirements and TDHCA bond indenture provisions and certificate Cash Flows for Bond Resolution compliance.

2023 217,640,000 2022 162,551,000 2021 357,849,000

Multifamily Bonds/Notes Issued

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b. Assist the Department in evaluation and development of DPA funding solutions.

c. Analyze options to monetize DPA second loans to increase liquidity for ongoing operations.

d. Provide models to assist in mortgage rate setting, current and future mortgage pipeline management, and well as pipeline performance monitoring.

e. Analyze and Assist in identifying refunding, defeasance, exercise of options, cross-call or other opportunities for existing debt.

f. Provide database tools to acquire, store, and translate HFA, trustee, and third party data into usable and actionable reporting.

g. Calculate bond and mortgage yields and universal cap compliance.

h. Store refunding genealogy, compute and monitor 32- and 10-year rule compliance.

i. Analyze prepayment speed analytics under various economic scenarios.

j. Recommend and implement bond redemption strategies.

k. Please provide pricing for Arbitrage Rebate Services if provided by your firm.

TBA Program:

The Department is contemplating transitioning to an in-house TBA program which may require varying service levels over time to assist in that transition including: Where applicable, please provide samples of your reporting capabilities for each item below.

a. Consultation on program structure and product offerings.

b. Provide daily mortgage pricing / rate sheets.

c. Rate lock commitment and mortgage pipeline data processing.

d. Risk analysis, dynamic portfolio hedging, and daily reporting.

e. Portfolio valuation and margin verification.

f. Trade record keeping, settlement processing, and other portfolio maintenance (rolls, assignments, swaps, etc.)

g. Market informed pooling instructions for pay up optimization.

Swap Services:

TDHCA has two remnant swaps within the Single Family indenture and a short term plan to take them out. However, 332-RFP24-1014 Page 9 of 44 additional Swap transactions may be necessary in the future.

Immediate needs:

a. Assist with quarterly swap mark-to-market reports and annual GASB #53 and GASB #72 reports.

b. Valuation and accounting calculations.

Potential needs:

a. Assist in price verification and competitive bidding on new swaps.

b. Counterparty selection and ongoing monitoring.

c. Document review and negotiation.

d. Valuation and accounting calculations.

e. Swap performance / risk assessment.

f. Federal Tax law compliance calculations

g. Market opportunities and option exercise recommendations.

h. Derivative structure consultation for housing finance synergy.

i. Regulatory guidance.

Investment Services

a. Act as bidding agent for Guaranteed Investment Contracts (GICs), repurchase agreements, and securities.

b. Maintain records of investment agreement provider credit ratings.

c. Monitor rating agency investment criteria.

d. Assist in analysis of negative arbitrage, arbitrage rebate analysis and rating agency investment methodology.

MULTIFAMILY

Financial Advisory & Quantitative:

a. Provide recommendations to the TDHCA Board relating to the bond issuance and structure of the transaction.

b. Review bond financing documents.

c. Analyze and advise on proposed structure, pricing, and attributes of proposed issuances, including any new bond structures.

d. Rating Agency consulting and relationship management.

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e. Program design recommendations.

f. Review and assist with possible modifications to the Department’s form of institutional investor letter.

g. Research and advise on layering third party assistance programs (e.g., HUD subsidy programs).

h. Provide a final transaction closing report for each multifamily issuance.

i. Attend Texas Bond Review Board and TDHCA Board meetings.

j. Assist, when necessary, with bond closings.

k. Provide other financial advisory services as requested by the Department.

l. Assist and advise, upon request, regarding multifamily workouts and restructurings.

m. Provide reports (quarterly or as agreed upon) detailing interest rates, trends, volume and structure of multifamily transactions closed in the market, etc.

n. Review ratings, including rating agency stress tests and other evaluative criteria, and assisting in developing, as needed, strategies to achieve and maintain ratings that are consistent with ratings objectives of the Department and the State of Texas.

o. Provide cash flow analytics/yield calculations.

2.1.1 Minimum Requirements

The Financial Advisor must be an independent municipal advisor and/or a registered broker dealer. The Financial Advisor must have a minimum 5 years experience working with State single family home ownership programs, and multifamily bond programs including 1) complex housing finance experience with the ability to evaluate the economic feasibility of proposed debt issuances; 2) experience with housing finance mortgage lending programs to assist the Department in the financial analysis of current programs and the development of new programs; 3) considerable experience working with, analyzing, and monitoring secondary market financing/TBA programs, including pipeline management; and 4) experience with swaps as they are used in conjunction with single family mortgage revenue bonds. The Financial Advisor must have exceptional analytical, quantitative, and reporting capabilities as evidenced by examples in the RFP response.

TDHCA has the option to notify vendor of any failure to provide deliverables within the agreed upon deadlines or failure to meet performance standards as outlined below. Failure to meet performance standards will result in a notification from the Department requesting resolution within ten (10) calendar days of said notification. TDHCA may exercise any other right, remedy, or privilege which may be available to it under applicable law of the state and any other applicable law or may proceed by appropriate court action to enforce the provisions of the contract.

2.2 Term of Contract

If a contract is awarded, the initial term of the contract is expected to begin December 1, 2024, or as soon thereafter as practical, and to terminate November 30, 2026. In accordance with the terms of the contract, the Department has the option, in its sole discretion, upon 30 days written notice, to extend the contract for three (3) additional one (1) year periods, one

(1) year at a time through November 30, 2029.

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A contract awarded under this RFP, if any, shall incorporate this entire RFP. The Department reserves the right, in its sole discretion, to make a contract award without negotiation of these provisions. In the event the Department requires negotiations with respondents, any modifications or clarifications agreed to with successful respondent during contract negotiations shall also be incorporated into the final, executed contract. Each respondent must review these terms and conditions in Exhibit A and otherwise in this RFP and must address any concerns or issues in its transmittal letter. Terms and conditions not specifically objected to in the transmittal letter will be deemed to be accepted by respondent. The Department has final approval of any contract awarded as a result of this RFP.

2.3 Limitation of Authority

Successful respondent shall have no authority to act for or on behalf of the Department, or the State of Texas except as expressly provided for in the contract; no other authority, power, use, or joint enterprise is granted or implied. Successful respondent may not incur any debts, obligations, expenses, or liabilities of any kind on behalf of the Department or State of Texas.

PART III

GENERAL INFORMATION

3.1 Authority

The Texas Department of Housing and Community Affairs (“TDHCA”) was created pursuant to Chapter 762, Acts of the 72nd Legislature of the State of Texas, Regular Session, 1991, as designated in Chapter 2306, Government Code in part to provide affordable homeownership opportunities to individuals and families of low and moderate income in the State of Texas (the “State”).

The Texas Homeownership Division of TDHCA works closely with private sector financial and lending institutions participating in TDHCA’s single family programs (“Participating Lenders”) to offer financing options to low and moderate income homebuyers throughout the State. Participating Lenders originate mortgage loans through TDHCA’s homeownership programs on a servicing released basis.

The Bond Finance Division of TDHCA is responsible for providing the financing to support the activities of the Texas Homeownership Division.

3.2 TDHCA Rights

In the best interest of the Department and the State, the Department, in its sole discretion, may amend or modify any provisions of this RFP, or withdraw this RFP at any time prior to award of a contract. The Department reserves the right, in its sole discretion, to reject any or all submitted proposals or to select one or more qualified respondents to this RFP without discussion of proposals with the respective respondents. The decision of the Department, or its designee with regard to the above, shall be administratively final. The Department, in its sole discretion, may waive administrative deficiencies and/or minor technicalities in proposals received. All proposals shall become a part of the Department’s official procurement files and may be available for public inspection upon request after the Procurement process is completed.

3.3 Respondent Obligations

Respondents to this RFP are responsible for any expense related to the preparation and submission of a proposal. The Department shall not pay for any cost that is incurred by successful respondent prior to the effective date of the contract.

Qualified firms with the requisite experience are invited to submit proposals in accordance with this RFP. Proposals must address all requirements and/or specifications.

3.4 Successful Respondent Obligations

The Department shall look solely to successful respondent for performance of the contract. Successful respondent shall provide the requested services under the direction of the Department. Successful respondent shall be the sole point of contact

332-RFP24-1014 Page 12 of 44 responsibility. Successful respondent shall be liable, both individually and severally, for the performance of all obligations under the awarded contract and shall not be relieved of the non-performance of any subcontractor.

3.5 Schedule of Events

The Department anticipates that the selection of successful respondent and execution of the contract, if any, will proceed according to the following approximate schedule:

September 20, 2024 - Issuance of RFP (after 10:00 a.m. CT)

September 27, 2024 - Deadline for Submission of Questions (2:00 p.m. CT)

October 02, 2024 - Electronic Posting of Official Responses to Questions (or as soon thereafter as practical)

October 18, 2024 - Deadline for Submission of Proposals (2:00 p.m. CT) (Late Proposals will not be considered)

November 15, 2024 - Contract Execution (or as soon thereafter as practical)

December 1, 2024 - Commencement of Work (or as soon thereafter as practical)

The times stated in this document refer to Central Time (“CT”), Austin, Texas, where appropriate. The Department’s regular office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday, except national and official State of Texas holidays. All deadlines are subject to change at the Department’s sole discretion.

Notices of changes to items directly impacting the original RFP or proposal process will be posted on the ESBD at:

http://www.txsmartbuy.com/esbd. Any amendment to this solicitation will be posted as an addendum on the ESBD. It is the responsibility of interested parties to periodically check the ESBD for updates to the procurement prior to submitting a Proposal. Respondent’s failure to periodically check the ESBD for updates will in no way release successful respondent from compliance with any requirements in the “addenda or additional information,” even if such compliance results in additional costs to meet the requirements.

3.6 Issuing Office

The Department, through its Purchasing Section, is the Issuing Office and the sole point of contact for this RFP. The Purchasing Section is the only office authorized to clarify, modify, amend, alter, or withdraw the specifications, terms, and conditions of this RFP and any contract awarded as a result of this RFP. Upon issuance of this RFP, other employees and representatives of the Department shall not answer questions or otherwise discuss the contents of this RFP with any respondents or their representatives. Failure to observe this restriction may result in disqualification of any pending or subsequent proposal. This restriction does not preclude discussions unrelated to this RFP or questions relating to completing the HUB documents required in Section 4.2.M. Except as otherwise indicated, all communications concerning this procurement must be in writing and addressed to the Issuing Office as follows:

Cheryl D. Robinson-Mathis, CTCD, CTCM E-mail: cheryl.mathis@tdhca.texas.gov

Mailing address: (USPS, Courier or Hand Delivery)

Cheryl D. Robinson-Mathis, Purchaser Texas Department of Housing and Community Affairs

Attention: Purchasing #332-RFP24-1014 221 E 11th Street

Austin, Texas 78701

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3.7 Submission of Questions

Respondents may submit questions by email to the Issuing Office no later than 2:00 p.m. by the deadline set forth in the Schedule of Events. Questions concerning this RFP must be in writing and addressed to the Issuing Office at the above email address. On or about the date set forth in the Schedule of Events, the Department expects to electronically post answers to the written questions on the ESBD located at: http://www.txsmartbuy.com/esbd.

3.8 Deadline for Submission of Proposals; Delivery Instructions; Number of Copies Required

One (1) original hard copy, three (3) digital copies of the response in PDF format on thumb drives must be submitted to the mailing address in Section 3.6 (Issuing Office). The response must be received in the Issuing Office no later than 2:00 p.m.

on the deadline set forth in the Schedule of Events. Facsimiles will not be accepted.

Late Proposals will not be considered under any circumstances.

Respondents are solely responsible for verifying the Department’s receipt of all Proposals by the deadline specified above.

The Department shall not be liable or responsible for any costs whatsoever incurred in submission of a Proposal.

Faxed Proposals are not acceptable and will not be considered.

If sending a proposal via USPS by regular mail, certified mail, or express mail, it is incumbent upon respondent to allow sufficient time to permit timely delivery by the USPS and by mail services internal to the Department. A USPS postmark or round validation stamp, a mail receipt with the date of mailing stamped by the USPS, a dated shipping label, invoice, or receipt from a commercial carrier, or any other documentation in lieu of the Issuing Office on-site time stamp WILL NOT be accepted.

Under Section 322.020 of the Texas Government Code, the Legislative Budget Board (“LBB”) has implemented a database of State agency contracts. (See the LBB website at www.lbb.texas.gov.) The Department will upload to the LBB’s contract database the text of the complete contract, including successful respondent’s proposal (with limited redaction and appendix) after the date of contract award. In submitting a proposal, respondent acknowledges that it understands and accepts this requirement.

3.9 Confidential Information; Nondisclosure; Open Records

All information gathered, produced, derived, obtained, analyzed, controlled or accessed by respondent in connection with a contract resulting from this RFP (“Confidential Information”) shall be and remain Confidential Information and shall not be released or disclosed by respondent without the prior written consent of the Department. Such consent must specifically identify the Confidential Information allowed to be disclosed by respondent and the nature of the disclosure allowed.

Respondent must execute and return with its proposal a Nondisclosure Agreement with the Department, in the form of Exhibit E attached hereto.

Following the award of a contract, proposals are subject to release as public information unless the proposal or specific parts of the proposal can be shown to be exempt from the Texas Public Information Act. All respondents are advised to consult with their legal counsel regarding disclosure issues and take the appropriate precautions to safeguard trade secrets or any other proprietary information disclosed in their proposals. The Department assumes no obligation or responsibility relating to the disclosure or nondisclosure of information submitted by respondents.

If a respondent believes that any portion of a proposal is confidential, then respondent must so specify. Respondent must stamp in bold red letters the term “CONFIDENTIAL” on that specific part or page of the proposal that respondent believes to be confidential. Respondent must submit in writing specific, detailed reasons, including any relevant legal authority, stating why respondent believes the material to be confidential. Vague and general claims of confidentiality will not be accepted. The Department will be the sole judge of whether a claim is general and/or vague in nature. All proposals and parts of proposals that are not marked as confidential will be automatically considered public information after the contract is awarded. A proposal resulting in an award may be considered public information even though parts are marked confidential.

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In the event the Department receives portions of a proposal marked “CONFIDENTIAL” as specified above, the Department shall forward such request to the Office of the Attorney General of Texas (“Attorney General”) for an opinion on whether such information may be withheld from disclosure under the Texas Public Information Act. The Department will notify respondent whose proposal is the subject of the request when the information is forwarded to the Attorney General. The Department assumes no obligation for asserting legal arguments on behalf of respondent. Respondents are advised that the Department is obligated to comply with the decision of the Attorney General, including any decision calling for the release of information marked “CONFIDENTIAL” by a respondent.

Copyrighted proposals are unacceptable and are subject to disqualification as non-responsive.

3.10 Media Releases

The Department does not endorse any vendor, commodity, or service. Media releases pertaining to this RFP, the contract, if any, or the services to which they relate shall not be made without the prior written consent of the Department. The disclosure of the contents of proposals prior to the award of the contract, if any, or any other violation of this section, may result in disqualification.

3.11 Non-exclusivity

This RFP is not exclusive, and the Department reserves the right to issue additional solicitations regarding the services described in this RFP or similar services at any time.

3.12 Incorporation of Exhibits

Exhibits A, B, C, D, E, F and G are attached hereto and incorporated as part of this RFP for all purposes.

3.13 Transition of Services

Upon termination of the contract for any reason, the contractor shall, in good faith and with reasonable cooperation, aid in the transition to any new arrangement and provider. The contractor shall deliver to the Department or its’ new contractor all completed, or partially completed, work and any and all documentation or other products and results of these services.

3.14 Payment and Invoices

Contractor’s total compensation under this contract shall not exceed the pricing set forth in the proposal unless agreed upon by both parties. Contractor shall be required to submit detailed invoices to support payments. Contractor’s invoices must be complete with reasonable supporting documentation and submitted within fifteen (15) calendar days after month end for Services provided in the preceding month.

In submitting an invoice to the Department, contractor certifies to the following: that the invoice has been carefully reviewed for detailed description of the Services performed; that the Services have been performed in compliance with this contract;

that the amount of the invoice and all previous invoices together do not exceed the contractual cap of the contract or contractor’s negotiated fees; that the charges and expenses shown on the invoices are reasonable and necessary; and that all appropriate and required supporting documentation is attached. The Department may, in its sole discretion, require additional documentation to support payment and contractor shall respond to any such requests within five (5) business days of receipt.

Payment shall be made in accordance with Texas Prompt Payment Act, Chapter 2251 of the Texas Government Code. The Department shall not pay any amounts for any purpose to contractor or any other entity, except as expressly provided for in this contract. The Department reserves the right to make payments only upon receipt of a correct invoice, including all of the required supporting documentation. The Department also reserves the right to refuse payments for invoices that exceed the rates specified in this contract or if the Department disputes an invoice in writing for Services that were not provided in a satisfactory manner.

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PART IV

PROPOSAL FORMAT

4.1 Introduction

Each original proposal and copy shall contain a cover sheet with the following: “332-RFP24-1014 Financial Advisor” and the name and address of respondent. Proposal pages must be numbered consecutively.

Proposals must be organized as described in Section 4.2. Proposals not organized in this manner may be subject to disqualification. Conciseness and clarity of content are required; vague and general proposals may be considered non-responsive, which may result in disqualification of such proposals. Proposals must be complete; failure to provide all required information may result in the disqualification of the proposal. Responses should be submitted by individual firms only, no joint proposals will be accepted.

ALL EXHIBITS TO THIS RFP ARE PREPARED EXCLUSIVELY FOR THIS RFP. RESPONDENT’S

SUBMISSION OF OTHER EXHIBITS OR DOCUMENTS, INCLUDING PRIOR RFP EXHIBITS, MAY RESULT

IN DISQUALIFICATION OF THE PROPOSAL.

4.2 General Organization of Proposal Contents

Please indicate if your firm wishes to be considered as Financial Advisor for both Single Family and Multifamily Programs, or if you would like to limit your firm’s consideration to one or the other.

Proposals must be organized as follows:

a) Transmittal Letter;

b) Executive Summary;

c) Table of Contents;

d) Respondent Identifying Information;

e) Proposed Subcontractor(s) Identifying Information;

f) Respondent Overview, Qualifications and Experience;

g) Proposed Personnel;

h) Respondent Narrative and Preliminary Work Plan;

i) Proposed Fee;

j) TDHCA Liability

k) Financial Statements;

l) Execution of Proposal;

m) Historically Underutilized Businesses Subcontracting Plan;

n) Criminal Conviction Certification;

o) Nondisclosure Agreement;

p) Conflict of Interest Statement;

q) Certification Regarding Public Nature of the Proposal; and

r) Vendor Reference Questionnaire.

A description of the information required for each of the items listed above is set forth below.

4.2.A Transmittal Letter

Respondent must submit a transmittal letter that identifies the entity submitting the proposal and includes a commitment by that entity to provide the Services required by the Department. The transmittal letter must state that the proposal is valid for one hundred eighty (180) days from the deadline for delivery of proposals to the Department. Any proposal containing a term of less than one hundred eighty (180) days for acceptance from this deadline will be rejected as non-responsive.

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The transmittal letter must be signed by a person legally authorized to bind respondent. Respondent also must indicate in its transmittal letter why it believes it is the most qualified to provide the requisite Services and why it believes its proposed services best meet the Department’s objectives and RFP requirements.

The transmittal letter must include a statement of acceptance of the terms and conditions located in Exhibit A to the RFP. If a respondent takes exception to any of the proposed terms and conditions, respondent must identify the exception(s) specifically and clearly in the transmittal letter and explain both (1) the reason for the requested change and (2) proposed alternative language. Failure to accept the terms and conditions as set forth in Exhibit A may result in disqualification of the Proposal.

4.2.B Executive Summary

Respondent must provide an executive summary of its proposal and a representation that the proposal addresses all of the requirements of this RFP. The executive summary must not exceed three (3) pages and must represent a full and concise summary of the contents of the proposal. Respondent must identify any Services that are provided beyond those specifically requested. If respondent is providing Services that do not meet the specific requirements of this RFP but in the opinion of respondent are equivalent or superior to those specifically requested, any such differences must be noted in the executive summary. Failure to provide the services specifically required may result in disqualification of the proposal.

4.2.C Table of Contents

Each proposal must be submitted with a table of contents that clearly identifies and denotes by page number each section of the proposal and the location of all enclosures of the proposal. The table of contents must follow the RFP’s structure as much as possible.

4.2.D Respondent Identifying Information

Respondent must provide the following identifying information:

· name and address of business entity submitting the proposal;

· type of business entity (e.g., corporation, partnership, etc.);

· state of incorporation or organization and principal place of business;

· name and location of Texas offices, other major offices, and other facilities that relate to respondent’s performance under this RFP;

· name, address and telephone number for the contact person in your firm authorized to negotiate agreement terms and render binding decisions on contract matters.

· location of the office that will administer the program. Indicate the number of and identify the positions of personnel that will be available to answer questions during the term of the contract.

· Respondent’s Federal Employer Identification Number (“FEIN” or “EIN”) and Texas Tax

Identification/Registration Number, if any;

· all affiliated companies and subsidiaries, or any joint ventures or other affiliations;

· detail if respondent, any predecessor of respondent, or any member of respondent been the subject of any disciplinary action by any regulatory agency or professional organization within the last five (5) years;

· detail of any firm ownership changes which have occurred in the last five (5) years, including changes pending;

· detail whether, within the last five years, respondent, any predecessor of respondent, or any member of respondent has been a party to any litigation directly or indirectly related to the conduct of respondent’s business; and

· indicate whether respondent, any predecessor of respondent, or any member of respondent is currently a party to litigation in process; if so, identify the parties, jurisdiction, case number, and subject matter.

4.2.E Proposed Subcontractor(s) Identifying Information

The Proposal must identify any subcontractors and outline the contractual relationship between respondent and each proposed subcontractor. The respondent is solely responsible for any proposed subcontractor’s work performed under any contract resulting from this RFP.

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4.2.F Respondent Overview of Firm, Qualifications and Experience

The Financial Advisor must have documented experience working with State-wide single family home ownership programs, and multifamily bond programs. The Financial Advisor must have exceptional Analytical, Quantitative, and Reporting capabilities. The Financial Advisor must have considerable experience working with, analyzing, and monitoring TBA programs, including pipeline management.

Provide an overview of your firm. Describe, in general terms, your firm’s organizational structure, the size of your team dedicated to State HFAs, and your experience working with State HFA single family and multifamily programs as Financial Advisor. Provide a general overview of your company’s policy on background checks of employees and how your company handles confidential documents.

Please indicate if your firm has dedicated internal resources for maintaining a specialty group focused solely on serving single family mortgage revenue bonds and/or multifamily mortgage revenue clients. If yes, provide a brief description and specify how long this group has been in operation, the number of professionals (analyst level or above, full-time employees) specializing in housing finance. Describe the organizational structure of this group and provide support that demonstrates a commitment to municipal housing finance by this group and the firm as a whole.

Single Family. For the past two calendar years (2022 and 2023), list in table format the firm’s experience as financial advisor with State HFAs on negotiated, new money, and refunding single family mortgage revenue bond transactions.

Column Headings Date of Issue Name of Issuer Issue Description Issue Size Financial Advisory Fee (Total $) Financial Advisory Fee ($/per bond) Other Transaction Related Expenses/Fees

Multifamily. For the past two calendar years (2022 and 2023), list in table format the firm’s experience as financial advisor with State HFAs on negotiated, new money, and refunding multifamily mortgage revenue bond transactions.

Respondents may also include, for the past two calendar years (2022 and 2023), the firm’s experience as financial advisor with local housing bond issuer clients, however, such local issuers must be specific to Texas.

Column Headings Date of Issue Name of Issuer Issue Description Issue Size Financial Advisory Fee (Total $) Financial Advisory Fee ($/per bond) Other Transaction Related Expenses/Fees

4.2.G Proposed Personnel

The proposal must identify all key personnel who are to be part of the proposed team and detail their experience. Please include brief resumes of all key personnel that will be involved in performing the Services.

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· full name (including full middle name)

· specific description of relevant experience and skills that person has with the required services.

· professional certifications and licenses, if applicable

· specific indication of what role the individual will have in this relationship; and

· any additional pertinent information to indicate the individual's ability to aid respondent in successfully completing the required Services (limit to one page).

In addition, respondent must provide an organizational chart indicating lines of authority, names, titles, and functions of individuals responsible for the Services.

4.2.H Respondent Narrative and Preliminary Work Plan

Important: Provide a narrative of your ability to perform all activities described in PART II, SCOPE OF WORK, Section

2.1 Service Description, providing examples of proposed work product and/or reporting where applicable.PART II, SCOPE OF WORK, Section 2.1 IS THE OUTLINE FOR YOUR RFP RESPONSE.

Additionally, describe in detail any products or programs that you think would be of particular interest to the Department.

Discuss your firm’s creativity and innovativeness in developing solutions that could add value to TDHCA’s capital markets initiative.

Due to recent increases in mortgage loan volume, the availability of funds for down payment assistance is a challenge.

Please discuss your firm’s experience in working with issuers to generate funds to be used for down payment assistance.

Provide specific examples where this has been successfully achieved for your clients, and the methods used.

Describe your firm’s general review process and detailed analysis for multifamily transactions involving the issuance of conduit debt. Such review process and analysis may be differentiated based on the structure of the transaction (e.g. rated or unrated debt).

4.2.I Proposed Fees

Single Family

Provide your firm’s fee structure to include compensation based on flat fees (specifying such fees), percentage of issuance amount, hourly rates (with or without cap), as well as how other services are to be compensated. Please include as much specificity as possible.

Multifamily

Provide your firm’s fee structure to include compensation based on flat fees (specifying such fees), percentage of issuance amount, hourly rates (with or without cap), how fees might be allocated in the case of portfolio transactions, as well as how other services are to be compensated, including but not limited to refunding or supplemental bond transactions, and yield calculations on previously issued transactions due to structuring changes. Please include as much specificity as possible.

4.2.J Insurance

Respondent must provide a statement of its intent to obtain and maintain for the term of the contract the minimum insurance and bond coverage specified in the RFP. Respondent should also describe insurance and bond coverage maintained by respondent in the ordinary course of business and provide proof of same in its proposal. Proof of insurance and bond coverage may be provided in the form of current certificates of insurance.

4.2.K Financial Statements

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In its proposal, respondent and its parent company, if applicable, must provide evidence of financial stability by providing audited financial statements for each of the last two (2) years of respondent’s operations or, in the alternative, financial statements compiled, reviewed and attested by an independent certified public accountant or certified public accounting firm.

In lieu of providing financial statements in its proposal, a respondent may provide a statement regarding the respondent’s financial stability and viability to perform under any resulting contract. If respondent elects this approach rather than audited financial statements, the respondent must submit a statement, with appropriate supporting documentation, sufficiently detailed to demonstrate financial solvency, and to verify the capacity to fulfill the requirements of this RFP.

4.2.L Execution of Proposal

Exhibit B must be completed and signed by respondent.

4.2.M Historically Underutilized Businesses Subcontracting Plan

The State of Texas and the Department are committed to assisting Historically Underutilized Businesses (HUBs) through the procurement process. In accordance with Sections 2161.181 and 2161.182, Texas Government Code, each state agency shall make a good faith effort to increase the contract awards for the purchase of goods or services to HUBs based on rules adopted to implement the disparity study described by Section 2161.002(c), Texas Government Code. In accordance with Section 2161.252, Texas Government Code and 34 Texas Administrative Code §20.285, each state agency (including institutions of higher education) as defined by Section 2151.002, Texas Government Code that considers entering into a contract with an expected value of $100,000 or more shall, before the agency solicits bids, proposals, offers, or other applicable expressions of interest, determine whether subcontracting opportunities are probable under the contract.