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The TDHCA convened its board meeting at 10am, September 1, 2022 at the Capital Extension, Hearing Room E2.030, 1100 Congress Avenue, Austin, Texas 78701

September 1st Meeting Summary

TAAHP Staff attended the board meeting and have summarized its main takeaways. TDHCA has uploaded the video recording if you would like to watch the meeting.

ANNOUNCEMENTS

Governing Board of the Texas Department of Housing and Community Affairs does hereby celebrate October 2022 as 16 Energy Awareness Month in Texas.

EXECUTIVE DIRECTOR’S REPORT

Bobby Wilkinson, Executive Director

  • Homeowner assistance fund (HAF) is active – disbursed $98.5 million, serving 3,500 households. $16 million in process. Average assistance amount is $8,125 per applicant. Top three counties are Hidalgo, Bexar, and Harris. 69 percent of the applicants assisted so far have income of 50 percent or below area median income.
  • Texas Rent Relief –They have distributed $2 billion since the start of the program. Few weeks ago, rent relief received an additional $100 million or so from Treasury. We are going to process existing applications. We still have over 50,000 in queue.
  • Texas Supreme Court emergency order establishing eviction dispersion program extended through November 1, 2022. There are funds available at the local level.
  • Compliance monitoring section is doing a brand new virtual training on September 13 on monitoring reviews, start to finish. The training covers what happens before, during, and after monitoring review.
  • New appointments
    • Lisa Johnson will be serving as our Interim Director of Home Ownership Programs.
    • Joe Guevara will be our Interim Director of Administration.
    • Rosalio Banuelos is serving as Interim Deputy Executive Director.

 

MULTIFAMILY FINANCE

TERESA MORALES; DIRECTOR OF MULTIFAMILY BONDS

Item 6, Presentation, discussion, and possible action on an order proposing the repeal of 10 TAC Chapter 12, concerning the Multifamily Housing Revenue Bond rules, and an order proposing new 10 TAC Chapter 12 concerning the same, and directing their publication for public comment in the Texas Register.

  • The proposed changes primarily include modifications to existing scoring items and proposes to introduce one new scoring item.
  • These proposed changes would not affect the prioritization of the 2023 lottery applicants, as the lottery is held in November, it would be applicable to those applying in 2024, should we still be in a competitive bond environment.
  • Preservation initiative scoring – Reduce the points from 10 points to 3 points. The change would reduce the significant point discrepancy between existing developments and those proposing new construction.
  • The waiting list scoring item has also been modified to introduce a tiered approach to points claimed. It would allow those pre-applications that have been on the waiting list for a longer period of time to achieve a higher number of points. The waiting list scoring item was new for 2022.
  • The new scoring item relates to assisting households with children. A pre-application can now be eligible for points if at least 15 percent of the units in the development contain three or more bedrooms.

 

MULTIFAMILY PROGRAMS

CODY CAMPBELL; DIRECTOR OF MULTIFAMILY PROGRAMS

Presentation, discussion, and possible action on the proposed repeal of 10 TAC Chapter 11 concerning the Housing Tax Credit program Qualified Allocation Plan, otherwise known as the QAP. And proposed new 10 TAC Chapter 11 concerning the same, and regarding their publication for public comment in the Texas Register.

The draft rules will be published in the Texas Register for public comment from September 16th through October 7th, after which the rule will be returned to the Board for final adoption at the meeting to be held in November.

  • The Draft QAP addresses the definition of administrative deficiency.
  • The QAP now requires the automatic award to the highest scoring application in a subregion that is benefitting from a HUD choice neighborhood grant. This requirement only applies to subregions with a county that has a population of at least 950,000. those smaller subregions, you will often only see one award.
  • Cost of developer per square foot increased by approximately 51 percent. This item now includes a requirement that the Department adjust the allowable costs annually, based on a construction price index.
  • Required minimum square footage for efficiency and one bedroom units have been lowered by 50 square feet for both threshold and scoring purposes. The existing requirements for two-, three-, and four-bedroom units appear to be in line with market standards, so no change was made for those.
  • Required number of common amenities that must be provided has been lowered slightly.
  • Proximity to jobs scoring item, which is one of the scoring items that has significant influence on which sites are selected to compete in the program. Previously, to score the maximum 7 points, a development site would have needed to be within two miles of 16,500 jobs. This has been lowered to 10,000, and the other tiers within the scoring item have been similarly lowered.
  • Underserved areas point category – this scoring item incentivizes developments in areas that are historically underserved by tax credit developments. Several of these thresholds have been lowered. For example, from 20 years to 15 years. And from 15 to ten, with the intention of allowing more census tracts to score well
  • Readiness to readiness to proceed – This point item has been reinstated under the QAP, having previously been suspended due to the pandemic. This item awards points to applications who certify that funding will be closed and that the construction contract will be signed by the end of November in the year that the award is made. This item also requires that all appropriate zoning be in place at the time of the award and allows the Board to penalize any applicant that certifies to meet these deadlines and then fails to do so.
  • Neighborhood risk factors. School ratings have been reinstated as a potential risk in an application for this year. The Texas Education Agency has now released their 2022 school ratings, and the QAP has been updated to reflect the current scoring system that they use, which includes letter grades A, B, and C, and several different types of Not Rated. The QAP now specifically identifies that schools that receive a score of Not Rated due to Senate Bill 1365, meaning that the school was not rated because it would have scored below a C, are required to provide appropriate mitigation.
  • Site eligibility – New item has been added that makes any application ineligible if it proposes more than 30 percent of the units as efficiencies and/or one bedrooms. Elderly supportive housing and rehabilitation deals are excluded from this requirement.
  • Supplemental housing tax credits have been added back into the QAP. Primarily, rather than having a flat cap on how much is available in supplemental credits, the QAP proposes that applications from the 2021 round and only from the 2021 round would be able to request a percentage of their amount. The draft does not specify what this percentage is, but rather establishes that it will be no more than 15 percent with a final amount to be announced by the Department no later than December 1. The elevated value of supplemental credits which will count towards each developer’s annual $3 million cap on tax credits will be announced on the same 14 day, and will not exceed $2 for every $1 of supplemental credits received
  • Urban core definition – TDHCA removed it from the QAP.
  • Supportive housing – Public comment did not support Supportive housing projects receiving an automatic award. They have removed it.
  • Special Housing Needs – Discussed two new point categories under the residents with special housing needs scoring category. 1) assisting families with children, where an application would have qualified for points for committing to have no more than 30 percent of the units be zero or one bedrooms. 2) assisting families with incomes above the housing tax credit income limits.
  • HUBs – Whether an applicant should be able to participate on an application as their own HUB. Public disagreed. Removed.

 

The next TDHCA board meeting is on October 13, 2022.