Texas Administrative Code › Title 10 - COMMUNITY DEVELOPMENT › Part 1 - TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS › Chapter 13 - MULTIFAMILY DIRECT LOAN RULE › Section 13.3 - General Loan Requirements

Current through Reg. 49, No. 28; July 12, 2024
(a)
				Funding Availability. Direct Loan funds may be made available through a NOFA or
				other similar governing document that includes the method for applying for
				funds and funding requirements.
(b)
				Oversourced Developments. A Direct Loan request may be reduced or not
				recommended if the Department's Underwriting Report concludes the Development
				does not need all or part of the MFDL funds requested in the Application
				because it is oversourced, and for which a timely appeal has been completed, as
				provided in 10 TAC §
									1.7 of this title (relating to
				Appeals Process) or 10 TAC §
									11.902 of this title (relating to
				Appeals Process for Competitive HTC Applications), as applicable.
(c) Funding Sources. Direct Loan funds are
				composed of annual HOME and National Housing Trust Fund (NHTF) allocations from
				HUD and associated Program Income, repayment of TCAP or TCAP RF loans, HOME
				Program Income, NSP Program Income (NSP PI or NSP), and any other similarly
				encumbered funding that may become available, except as otherwise noted in this
				chapter. Similar funds include any funds that are identified by the Board to be
				loaned or granted for the development of multifamily property and are not
				governed by another chapter in this title, with the exception of State funds
				appropriated for a specific purpose.
(d) Eligible and Ineligible Activities.
(1) Eligible Activities. Direct Loan funds
				may be used for the predevelopment, acquisition, New Construction,
				reconstruction, Adaptive Reuse, rehabilitation, or preservation of affordable
				housing with suitable amenities, including real property acquisition, site
				improvements, conversion, demolition, or operating cost reserves, subject to
				applicable HUD guidance. Other expenses, such as financing costs, relocation
				expenses of any displaced persons, families, businesses, or organizations may
				be included. MFDL funds may be used to assist Developments previously awarded
				by the Department when approved by specific action of the Board. Eligible
				Activities may have fund source restrictions or may be restricted by a
				NOFA.
(2) Ineligible Activities.
				Direct Loan funds may not be awarded to a Development:
(A) Layered with Housing Tax Credits that
				have elected the income averaging election under Section 42(g)(1)(C) of the
				Internal Revenue Code that have more than 15% of the Units designated as Market
				Rate Units;
(B) In which the
				Applicant will not be directly leasing Units to residents, except as
				specifically described in the NOFA;
(C) Applicants applying for HOME or NSP funds
				may not commit any choice limiting activities as defined by HUD in 24 CFR Part
				58 prior to obtaining environmental clearance, and will be subject to
				termination of the Direct Loan award if such action is undertaken. For an
				Applicant applying for NHTF funds, choice limiting activities prior to full
				execution of a Contract with the Department are not prohibited, unless the
				Development also has sources requiring environmental review under 24 CFR Part
				50 or Part 58, but the eligibility of costs associated with these activities
				will be impacted in keeping with
				24 CFR §
												93.201(h) and all applicable
				federal regulations. Furthermore, certain activities which prohibit
				environmental mitigation may cause the Development to be ineligible and will
				cause the termination of the Direct Loan award.