Texas Administrative Code › Title 10 - COMMUNITY DEVELOPMENT › Part 1 - TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS › Chapter 10 - UNIFORM MULTIFAMILY RULES › Subchapter E - POST AWARD AND ASSET MANAGEMENT REQUIREMENTS › Section 10.405 - Amendments and Extensions

Current through Reg. 49, No. 28; July 12, 2024
(a) Amendments to
				  Housing Tax Credit (HTC) Application or Award Prior to Land Use Restriction
				  Agreement (LURA) recording or amendments that do not result in a change to the
				  LURA (§2306.6712). The Department expects the Development Owner to
				  construct or rehabilitate, operate, and own the Development consistent with the
				  representations in the Application. The Department must receive notification of
				  any amendments to the Application. Regardless of development stage, the Board
				  shall re-evaluate a Development that undergoes a material change, as identified
				  in paragraph (3) of this subsection at any time after the initial Board
				  approval of the Development (§2306.6731(b)). The Board may deny an
				  amendment request and subsequently may rescind any Commitment or Determination
				  Notice issued for an Application, and may reallocate the credits to other
				  Applicants on the waiting list.
(1) Requesting
				  an amendment. The Department shall require the Applicant to file a formal,
				  written request for an amendment to the Application. Such request must include
				  a detailed explanation of the amendment request and other information as
				  determined to be necessary by the Department, and the applicable fee as
				  identified in Chapter 11, Subchapter E of this title (relating to Fee Schedule,
				  Appeals, and other Provisions) in order to be received and processed by the
				  Department. Department staff will evaluate the amendment request to determine
				  if the change would affect an allocation of Housing Tax Credits by changing any
				  item that received points, by significantly affecting the most recent
				  underwriting analysis, or by materially altering the Development as further
				  described in this subsection.
(2)
				  Notification Items. The Department must be notified of the changes described in
				  subparagraphs (A) - (F) of this paragraph. The changes identified are subject
				  to staff agreement based on a review of the amendment request and any
				  additional information or documentation requested. Notification items will be
				  considered satisfied when an acknowledgment of the specific change(s) is
				  received from the Department and include:
(A)
				  Changes to Development Site acreage required by the City or other local
				  governmental authority, or changes resulting from survey discrepancies, as long
				  as such change does not also result in a modification to the residential
				  density of more than 5%;
(B) Minor
				  modifications to the site plan that will not significantly impact development
				  costs, including, but not limited to, relocation or rearrangement of buildings
				  on the site (as long as the number of residential and non-residential buildings
				  remains the same), and movement, addition, or deletion of ingress/egress to the
				  site;
(C) Increases or decreases in
				  net rentable square footage or common areas that do not result in a material
				  amendment under paragraph (4) of this subsection;
(D) Changes in amenities that do not require
				  a change to the recorded LURA and do not negatively impact scoring, including
				  changes to outdated amenities that could be replaced by an amenity with equal
				  benefit to the resident community;
(E) Changes in Developers or Guarantors
				  (notifications for changes in Guarantors that are also the General Contractor
				  or are only providing guaranties during the construction period are not
				  required) with no new Principals (who were not previously checked by Previous
				  Participation review that retain the natural person(s) used to meet the
				  experience requirement in Chapter 11 of this title (relating to Qualified
				  Allocation Plan)); and
(F) Any
				  other amendment not identified in paragraphs (3) and (4) of this
				  subsection.
(3)
				  Non-material amendments. The Executive Director or designee may
				  administratively approve all non-material amendments, including, but not
				  limited to:
(A) Any amendment that is
				  determined by staff to exceed the scope of notification acknowledgement, as
				  identified in paragraph (2) of this subsection but not to rise to a material
				  alteration, as identified in paragraph (4) of this subsection;
(B) Changes in Developers or Guarantors
				  (excluding changes in Guarantors that are also the General Contractor or are
				  only providing guaranties during the construction period) not addressed in
				  §10.405(a)(2)(E). Changes in Developers or Guarantors will be subject to
				  Previous Participation requirements as further described in Chapter 11 of this
				  title and the credit limitation described in §
												11.4(a) of this
				  title; and
(C) For Exchange
				  Developments only, requests to change elections made on line 8(b) of the IRS
				  Form(s) 8609 to group buildings together into one or more multiple building
				  projects. The request must include an attached statement identifying the
				  buildings in the project. The change to the election may only be made once
				  during the Compliance Period.
(4) Material amendments. Amendments
				  considered material pursuant to this paragraph must be approved by the Board.
				  When an amendment request requires Board approval, the Development Owner must
				  submit the request and all required documentation necessary for staff's review
				  of the request to the Department at least 45 calendar days prior to the Board
				  meeting in which the amendment is anticipated to be considered. Before the 15th
				  day preceding the date of Board action on the amendment, notice of an amendment
				  and the recommendation of the Executive Director and Department staff regarding
				  the amendment will be posted to the Department's website and the Applicant will
				  be notified of the posting (§2306.6717(a)(4)). Material Amendment requests
				  may be denied if the Board determines that the modification proposed in the
				  amendment would materially alter the Development in a negative manner or would
				  have adversely affected the selection of the Application in the Application
				  Round. Material alteration of a Development includes, but is not limited to:
(A) A significant modification of the site
				  plan;
(B) A modification of the
				  number of Units or bedroom mix of Units;
(C) A substantive modification of the scope
				  of tenant services;
(D) A reduction
				  of 3% or more in the square footage of the Units or common areas;
(E) A significant modification of the
				  architectural design of the Development;
(F) A modification of the residential density
				  of at least 5%;
(G) A request to
				  implement a revised election under §42(g) of the Code prior to filing of
				  IRS Form(s) 8609;
(H) Exclusion of
				  any requirements as identified in Chapter 11, Subchapter B of this title
				  (relating to Site and Development Requirements and Restrictions) and Chapter
				  11, Subchapter C of this title (relating to Application Submission
				  Requirements, Ineligibility Criteria, Board Decisions and Waiver of Rules);
				  or
(I) Any other modification
				  considered material by the staff and therefore required to be presented to the
				  Board as such.
(5)
				  Amendment requests will be denied if the Department finds that the request
				  would have changed the scoring of an Application in the competitive process
				  such that the Application would not have received a funding award or if the
				  need for the proposed modification was reasonably foreseeable or preventable by
				  the Applicant at the time the Application was submitted, unless good cause is
				  found for the approval of the amendment.
(6) This section shall be administered in a
				  manner that is consistent with §42 of the Code. If a Development has any
				  uncorrected issues of noncompliance outside of the corrective action period
				  (other than the provision being amended) or otherwise owes fees to the
				  Department, such non-compliance or outstanding payment must be resolved to the
				  satisfaction of the Department before a request for amendment will be acted
				  upon.
(7) In the event that an
				  Applicant or Developer seeks to be released from the commitment to serve the
				  income level of tenants identified in the Application and Credit Underwriting
				  Analysis Report at the time of award and as approved by the Board, the
				  procedure described in subparagraphs (A) and (B) of this paragraph will apply
				  to the extent such request is not prohibited based on statutory and/or
				  regulatory provisions:
(A) For amendments that
				  involve a reduction in the total number of Low-Income Units, or a reduction in
				  the number of Low-Income Units at any rent or income level, as approved by the
				  Board, evidence noted in either clause (i) or (ii) of this subparagraph must be
				  presented to the Department to support the amendment:
(i) In the event of a request to implement
				  (rent to a household at an income or rent level that exceeds the approved AMI
				  limits established by the minimum election within the Development's Application
				  or LURA) a revised election under §42(g) of the Code prior to an Owner's
				  submission of IRS Form(s) 8609 to the IRS, Owners must submit updated
				  information and exhibits to the Application as required by the Department and
				  all lenders and the syndicator must submit written acknowledgement that they
				  are aware of the changes being requested and confirm any changes in terms as a
				  result of the new election; or
(ii)
				  For all other requests for reductions in the total number of Low-Income Units
				  or reductions in the number of Low-Income Units at any rent or income level,
				  prior to issuance of IRS Form(s) 8609 by the Department, the lender and
				  syndicator must submit written confirmation that the Development is infeasible
				  without the adjustment in Units. The Board may or may not approve the amendment
				  request; however, any affirmative recommendation to the Board is contingent
				  upon concurrence from Department staff that the Unit adjustment is necessary
				  for the continued financial feasibility of the Development; and
(B) If it is determined by the
				  Department that the loss of low-income targeting points would have resulted in
				  the Application not receiving an award in the year of allocation, and the
				  amendment is approved by the Board, the approved amendment will carry a penalty
				  that prohibits the Applicant and all Persons or entities with any ownership
				  interest in the Application (excluding any tax credit purchaser/syndicator),
				  from participation in the Housing Tax Credit Program (for both the Competitive
				  Housing Tax Credit Developments and Tax-Exempt Bond Developments) for 24 months
				  from the time that the amendment is approved.