TAAHP’s Recommendations Reflected in the Official 2026 QAP Draft

TAAHP’s QAP Committee continues to lead one of our most important advocacy efforts—shaping the Qualified Allocation Plan (QAP) that governs how affordable housing is scored, financed, and developed across Texas.

Following the September Rules Committee and Board meetings, TDHCA released the official 2026 QAP Draft, incorporating multiple revisions shaped by extensive industry feedback and TAAHP recommendations. The result is a more balanced, flexible, and production-focused plan that better reflects today’s financing and construction realities.

Major Wins from the Staff Draft to the Official Draft

Quantity of Low-Income Units – Initially proposed for full reinstatement, this item was ultimately preserved only as a secondary tiebreaker (after proximity to school). This compromise avoids returning to an incentive structure that pushed developers to overpromise units at the expense of financial feasibility.

Tiebreaker Clarification – Updated to reflect the closest Independent School District (ISD) school, not just the nearest elementary school, creating a more consistent and measurable application standard.

Opportunity Zones in CRP – Opportunity Zones were added as an eligible category under Concerted Revitalization Plans (CRP), expanding qualifying geographies and aligning Texas housing policy with federal investment priorities.

Administrative Force Majeure – TDHCA staff may now approve limited “administrative force majeure” relief prior to closing without requiring full board action. This streamlines timelines, reduces uncertainty, and prevents deals from unraveling over procedural delays.

Acquisition/Rehabilitation Projects – 9% HTC applications must now involve properties at least 20 years old at the time of application, while 4% bond deals remain exempt—a change reflecting TAAHP’s recommendation to focus limited 9% resources on deep-preservation projects.

Cash-Out Refinancing – Restrictions were narrowed to competitive (9%) deals only, ensuring public equity remains invested in affordability while preserving flexibility for 4% bond transactions to recapitalize and reinvest in future development.

Continuum of Care (CoC) – Hold time requirements for CoC-designated units were reduced from 12 and 6 months to 6 and 3 months.

Other Notable Updates

Sponsor Characteristics

• Four paths remain with point parity: HUB, Nonprofit, Housing Authority/Instrumentality, or Paying Property Taxes.
• HUB participation is now limited to 10 cost-certified deals, ensuring points target emerging HUB developers while maintaining a competitive balance.
• A new scoring option awards one point for forgoing a property tax exemption during the 15-year compliance period, rewarding projects that contribute to local tax bases.

Eligibility Thresholds

• Minimum Score: 150 points required for 9% eligibility, ensuring awards go to stronger-scoring applications.
• Cost Cap: $500,000 per-unit maximum to address outlier costs and maintain program credibility.
• Force Majeure: Two events on a single project (including staff extensions) render an applicant temporarily ineligible until the project is placed in service.

Award Methodology

• The long-standing 50% rehabilitation cap was removed, giving TDHCA full flexibility to allocate credits where most needed—whether for new construction or preservation.

Remaining Issues to Watch

Cash-Out Refinance Provisions: Some stakeholders have raised concerns about whether the current language adequately accommodates seller note provisions, which are critical to maintaining feasible transactions.

Sales Tax-Exemption Fees: TDHCA’s proposal to count sales tax-exemption fees toward the 14% General Contractor Fee cap remains an active issue under review, as it could reduce margins and complicate HUB participation.

TAAHP’s 2025 QAP Advocacy Timeline