Texas Administrative Code › Title 10 - COMMUNITY DEVELOPMENT › Part 1 - TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS › Chapter 13 - MULTIFAMILY DIRECT LOAN RULE › Section 13.13 - Post-Closing Amendments to Direct Loan Terms

Current through Reg. 49, No. 28; July 12, 2024
(a) Good Cause Extensions. The Executive
				Director or authorized designee may approve extensions of up to 12 months under
				10 TAC §
									13.11(c)(7) - (8)
				or (14)(L) of this chapter (relating to Post-Award Requirements) based on
				documentation that there is good cause for the extension and cause the
				Department to violate or be at risk of violating a federal requirement or
				deadline.
(b) Amendments to MFDL
				Awards. Except in cases of Force Majeure, changes to terms of awards subject to
				mandatory HUD reporting requirements will only be processed after the
				Construction Completion is reported to the federal oversight entity as
				completed, and the last of the MFDL funds have been drawn.
(c) Executive Amendments. The Executive
				Director or authorized designee may approve amendments to loan terms
				post-closing as described in paragraphs (1) - (3) of this subsection. Board
				approval is necessary for any other changes post-closing.
(1) Changes in Terms. Changes to the
				amortization or maturity date to accommodate the requirements of other lenders
				or maintain parity of term may be approved post-closing, provided the changes
				result in the Direct Loan continuing to meet the requirements of 10 TAC §
										13.8(c)(1) and
				(3) of this chapter (relating to Loan
				Structure and Underwriting Requirements), and NOFA requirements.
(2) Post-Closing Subordinations or
				Re-subordinations of MFDL Liens. Re-subordination of the Direct Loan in
				conjunction with refinancing may be approved post-closing, provided the
				conditions in subparagraphs (A) - (E) of this paragraph are met:
(A) The Borrower is current with loan
				payments to the Department, and no notice has been given of any Event of
				Default on any MFDL loan. Histories of late or non-payment on any other MFDL
				loan may result in denial of the request;
(B) The refinance does not propose payment to
				any of the Development Owner or Developer parties (including the Limited
				Partners);
(C) A proposal for
				partial repayment of the MFDL lien is made with the request;
(D) The new superior lien is in an amount
				that is equal to or less than the original senior lien and does not negatively
				affect the financial feasibility of the Development.
(i) For purposes of this section, a negative
				effect on the financial feasibility of the Development shall mean a reduction
				in the total Debt Coverage Ratio (DCR) of more than 0.05, or if the DCR no
				longer meets the requirements of 10 TAC §
												11.302 of this title;
				and
(ii) Changes to accommodate
				refinancing with a new superior lien that is in an amount that exceeds the
				original senior lien and which will be directly applied to property
				improvements, as evidenced by the loan or security agreements (exclusive of
				fees associated with the refinance and any required reserves), will be
				considered on a case by case basis; and
(E) The subordination or re-subordination
				request does not include a request to subordinate or resubordinate any MFDL
				LURA, with the exception of partial subordination or re-subordination of
				receivership rights (subject to the prosed receiver entity or Affiliate not
				having been Debarred by the Department or on the Federal Suspended or Debarred
				Listing).
(3) Workout
				Arrangements. Changes required to the Department's loan terms or amounts that
				are part of an approved Asset Management Division work out arrangement may be
				approved after Construction Completion.