Current through Reg. 49, No. 38; September 20, 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.
(e) Ineligible Costs. All costs associated
with the Development and known by the Applicant must be disclosed as part of
the Application. Other federal funds will be included in the Final Direct Loan
Eligible Costs located in Table 1 of the Direct Loan Calculator as part of the
required per-unit subsidy limit calculation. Costs ineligible for reimbursement
with Direct Loan funds in accordance with 24 CFR Parts 91, 92, 93, and 570, and
2 CFR Part 200, as federally required or identified in the NOFA, include but
are not limited to:
(1) Offsite
costs;
(2) Stored
Materials;
(3) Site Amenities, such
as swimming pools and decking, landscaping, playgrounds, and athletic
courts;
(4) The purchase of
equipment required for construction;
(5) Furnishings and Furniture, Fixtures and
Equipment (FF&E) required for the Development;
(6) Detached Community Buildings;
(7) Carports and/or parking garages, unless
attached as a feature of the Unit;
(8) Commercial Space costs;
(9) Personal Property Taxes;
(10) TDHCA fees;
(11) Syndication and organizational
costs;
(12) Reserve Accounts,
except Initial Operating Deficit Reserve Accounts;
(13) Delinquent fees, taxes, or
charges;
(14) Costs incurred more
than 24 months prior to the effective date of the Direct Loan Contract, unless
the Application is awarded TCAP RF, and if specifically allowed by the
Board;
(15) Costs that have been
allocated to or paid by another fund source (except for soft costs that are
attributable to the entire project as specifically identified in the applicable
federal rule, or for TCAP RF if specifically allowed by the NOFA), including
but not limited to, contingency, including soft cost contingency, and general
partner loans and advances;
(16)
Deferred Developer Fee;
(17) Texas
Bond Review Board (BRB) fees;
(18)
Community Facility spaces that are not for the exclusive use of tenants and
their guests;
(19) The portion of
soft costs that are allocated to support ineligible hard costs;
(20) Other costs limited by Award or NOFA, or
as established by the Board;
(21)
Interest on Construction Loans; and
(22) Acquisition that occurred before the
Application Acceptance Date and environmental clearance for HOME and NSP
projects. For NHTF, acquisition that occurred prior to Contract
signing.
