Texas Department of Housing & Community Affairs - Building Homes and Strengthening Communities
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tcavanag

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Posts: 4
 #1 
(i)     If the DCR is less than the minimum, the recommendations of the Report may be based on an assumed reduction to debt service and the Underwriter will make adjustments to the assumed financing structure in the order presented in subclauses (I) - (IV) of this clause subject to a Direct Loan NOFA and program rules:

(I)          a reduction of the principal amount of a Direct Loan;

(II)         a reduction of the interest rate or an increase in the amortization period for Direct Loans;

(III)       a reclassification of Direct Loans to reflect grants, 

(IV)       a reduction in the permanent loan amount for non-Department funded loans based upon the rates and terms in the permanent loan term sheet(s) as long as they are within the ranges in subparagraphs (A) and (B) of this paragraph.
JamieR

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Posts: 3
 #2 
So it looks like (I) and (II) changed.  So rather than reduce the debt service by reducing the interest rate or increasing the amortization period to solve the <1.15 problem, the new Department preference would be to reduce principal and presumably cause a GAP in financing to be filled with more DDF? 
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