Affordable Housing Production in the Rio Grande Valley, Texas

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Affordable Housing Production in the Rio Grande
Valley, Texas

• Rio Grande Valley Multibank CDFI
• Presented by
• Manny Casanova, Executive Vice President,
  BBVA/Laredo National Bank

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Rio Grande Valley Multibank CDFI

• Founded in 1995
• Founding Investors Wells Fargo, JP Morgan/Chase,
  Bank of America, International Bank of Commerce,
  Texas State Bank, National Cooperative Bank
  Development Corp.
• Expansion Investors Frost Bank, IBOC-McAllen,
  Lone Star National Bank
• Equity Capital - 1.6 Million
• Notes Payable - 12.736 Million

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RGV Multibank Equity Investors

• INVESTOR
• Frost National
• IBC Brownsville
• Wells Fargo
• Texas State Bank
• JP Morgan/Chase
• Bank of America
• Lone Star National
• IBC McAllen
• National Coop. Dev.
• TOTAL

• SHARE
• 100,000
• 250,000
• 300,000
• 100,000
• 300,000
• 250,000
• 100,000
• 100,000
• 100,000
• 1.6 Million

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RGV Multibank Mission

• The mission of the Rio Grande Valley Multibank
  is
• Promote, develop and improve the economic
  conditions of people in the Rio Grande Valley of
  Texas.
• Encourage and assist through loans, investments
  and other business transactions, an increase in
  the investment in small businesses and the supply
  of jobs including jobs for low to moderate income
  persons. For small business or economic
  development activities undertaken by the
  Corporation, the beneficiaries will be small
  business, including minority small businesses,
  and low to moderate income persons who are
  employed in such businesses.
• Encourage and assist through loans, investments
  and other business transactions, an increase in
  the supply of affordable housing, including
  housing for low and moderate income persons. For
  housing activities undertaken by the Corporation,
  the beneficiaries will include low to moderate
  income persons who live in the housing financed
  by the Corporation.
• Improve through the cooperative efforts of the
  banking institutions, which are shareholders of
  this corporation, economic conditions in the
  area.

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CDFI Eligibility Criteria

• The organization individually and with Affiliates
  collectively must have a primary mission of
  promoting community development
• The organization must be a Financial Entity
• The organization must principally serve a Target
  Market
• The organization must provide Development
  Services in conjunction with its financial
  activities
• The organization must maintain Accountability to
  its defined Target Market and
• The organization must be a Non-Governmental
  entity, and must not be controlled by one or more
  governmental entities.

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Structure Investment

• For Profit Institution
• Minimum Investment of 100,000 in equity.
• Loans to Multibank only accepted from equity
  investor institutions.
• No Dividends paid out for first three years.
• Administrative and Compliance Services performed
  by third party.

7
Board Composition

• One vote to each stockholder institution.
• Minimum stockholder investment - 100,000.
• 25 of Board must be representatives of serviced
  community.
• Community Board Members elected to one year terms.

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Project Decisions

• RGV Multibank serves as vehicle for bank
  participation.
• Board must approve all projects and underwriting.
• Individual banks make decision on participation
  in each project based on their own interest, risk
  level and service area.

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RGV Multibank Interim Lending

• 250,000 Unsecured Line Colonia Construction
• 400,000 Warehouse Line for RCLP Loans before
  Participations Sold
• 250,000 Interim Line for South Texas CDC

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RGV Multibank Portfolio LendingLong Term
Commitments

• 3.2 Million (1998-2001) Portfolio Loans AHLP
  Brownsville
• 2.4 Million (2001-2004) Rural Colonia Loan
  Program
• 11.637 Million (2001-2006) Portfolio Loans
  McAllen/Brownsville AHLP

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Rural Colonia Loan Program
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Rural Colonia Loan Program

• Limited Credit Underwriting Based on Disposable
  Income
• 20 Year Fixed Rate Loan
• 50/50 Split RGV Multibank Paid out in 10 Years
• Loss Reserve, Payment Reserve, Servicing Fees-HUD
  RHED Grant
• Warehouse Line 400,000 RGV Multibank
• Loan Participation Pools of 10 loans

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Rural Colonia Loan Program

• Target Pop. Families Living in Rural
  Colonia areas
• Loan Amount 28,000 36,000
• Qualifying Disposable Income Driven
• Average AMFI 11,000 or 34 (Family of 4)

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Rural Colonia Loan Program (RCLP)
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Rural Colonia Loan Program (RCLP)
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Rural Colonia Loan Program (RCLP)