| (a) Direct Loan awardees must satisfactorily complete
the Post-Award Requirements identified in this section after the Board
approval date.
(b) If a Direct Loan award is declined by the Direct
Loan awardee and returned after Board approval, or if the Direct Loan
awardee or Affiliates fail to timely enter into the Contract, close
the loan, begin and complete construction, or leave a portion of the
Direct Loan award unexpended, penalties may apply under 10 TAC §11.9(f)
(relating to Competitive HTC Selection Criteria), and/or the Department
may prohibit the Applicant and all Affiliates from applying for MFDL
funds for a period of two years.
(c) Benchmarks. Extensions to the benchmarks in paragraphs
(1) - (8) of this subsection may only be approved by the Executive
Director or authorized designee in accordance with §13.12 or
§13.13 of this chapter (relating to Pre-Closing and Post-Closing
Amendments), as applicable.
(1) Environmental Clearance. In order to obtain environmental
clearance required by the National Environmental Policy Act (NEPA)
and other related Federal and state environmental laws (if applicable),
Direct Loan Applicants, including those previously awarded HTC, must
submit a fully completed environmental review, including any applicable
reports to the Department within 90 days of the Application Acceptance
Date.
(2) Contract Execution. After a Development receives
environmental clearance (if applicable), the Department will draft
a Contract to be emailed to the Direct Loan awardee. Direct Loan awardees
must execute and return a Contract to the Department within 30 calendar
days after receipt of the Contract.
(3) Loan Closing and Construction Commencement. Loan
closing must occur and construction must begin on or before the dates
described in the Contract. If construction has not commenced within
12 months of the Contract Effective Date, the award may be terminated.
(4) Loan Closing. In preparation for closing any Direct
Loan, the Development Owner must submit the items described in subparagraphs
(A) - (F) of this paragraph. Providing incomplete documents, or not
responding timely to subsequent Department requests for materials
needed to facilitate closing, may significantly delay closing. Any
request to change the financing structure of the Development, or the
ownership structure, will in most cases extend the amount of time
it will take for the Department to meet closing timelines, and may
move prioritization of the closing below that of other Developments.
(A) Documentation of the prior closing or concurrent
closing with all sources of funds necessary for the long-term financial
feasibility of the Development.
(B) Due diligence items determined by the Department
to be prudent and necessary to meet the Department's rules and to
secure the interests of the Department, as requested by Staff.
(C) When Department funds have a first lien position
during the construction term, or if the Development is a public work
under state law, assurance of completion of the Development in the
form of payment and performance bonds in the full amount of the construction
contract or equivalent guarantee as allowable under state law in the
sole determination of the Department is required. Development Owners
utilizing the USDA §515 program for a Development that is not
a public work are exempt from this requirement, but must meet the
alternative requirements set forth by USDA.
(D) Documentation required for preparation of closing
loan documents includes, but is not limited to:
(i) Substantially final information necessary for REA
staff to reevaluate the transaction prior to loan closing, including
but not limited to a substantially final development cost schedule,
sources and uses, operating pro forma, annual operating expenses,
rent schedule, updated written financial commitments or term sheets,
and any additional financing exhibits that have changed since the
time of Application;
(ii) Substantially final Draft Owner/General Contractor
agreement and draft Owner/Architect agreement prior to closing with
final executed copies required by the day of closing;
(iii) Survey of the Property that includes a certification
to the Department, Development Owner, Title Company, and other lenders;
(iv) Plans and specifications for review by the Department's
inspection staff. Inspection staff will issue a plan review letter
that is intended to assist in identifying early concerns associated
with the Department's final construction requirements; and
(v) If layered with Housing Tax Credits, a substantially
final draft limited partnership agreement between the General Partner
and the tax credit investor entity.
(E) If required by the fund source, prior to Contract
Execution unless an earlier period is described in Chapters 10, 11,
or 12 of this title, the Development Owner must provide verification
of:
(i) Environmental clearance from the Department or
HUD, as applicable;
(ii) Site and Neighborhood clearance from the Department;
(iii) Documentation necessary to show compliance with
the Uniform Relocation Assistance and Property Act and any other relocation
requirements that may apply;
(iv) Title Insurance Commitment or Policy showing the
Department as Lender, with copies of all Schedule B documents; and
(v) Any other documentation that is necessary or prudent
to meet program requirements or state or federal law in the sole determination
of the Department.
(F) The Direct Loan Contract as executed, which will
be drafted by the Department's counsel or its designee for the Department.
No changes proposed by the Developer or Developer's counsel will be
accepted unless approved by the Department's Legal Division or its
designee.
(6) Loan Documents. The Development Owner is required
to execute all loan closing documents required by and in the form
and substance acceptable to the Department's Legal Division.
(A) Loan closing documents include but are not limited
to a promissory note, deed of trust, construction loan agreement (if
the proceeds of the loan are to be used for construction), LURA, Architect
and/or licensed engineer certification of understanding to complete
environmental mitigation if such mitigation is identified in HUD's
environmental clearance or the Underwriting Report and assignment
and security instruments whereby the Developer, the Development Owner,
and/or any Affiliates (if applicable) grants the Department their
respective right, title, and interest in and to other collateral,
including without limitation the Owner/Architect agreement and the
Owner/General Contractor agreement, to secure the payment and performance
of the Development Owner's obligations under the loan documents. Additional
loan terms and conditions may be imposed by the loan closing documents.
(B) Loan terms and conditions may vary based on the
type of Development, Real Estate Analysis Underwriting Report, and
the Set-Aside under which the award was made.
(7) Quarterly Construction Status Reports. The Development
Owner is required to submit quarterly Construction Status Reports
to the Asset Management Division as described and by the deadlines
specified in 10 TAC §10.401(e) of this title (relating to Construction
Status Report).
(8) Mid-Construction Development Inspection Letter.
In addition to any other obligations required as the result of any
other Department funding sources, the Development Owner must submit
a Mid-Construction Development Inspection Request once the Development
has met at least 25% construction completion as indicated on the G703
Continuation Sheet or HUD equivalent form. Department inspection staff
will issue a Mid-Construction Development Inspection Letter that confirms
work is being done in accordance with the applicable codes, the construction
contract, and construction documents.
(9) Construction Completion. Construction must be completed,
as reflected by the Development's certificate(s) of occupancy (if
new construction and/or reconstruction) and Certificate of Substantial
Completion (AIA Form G704) or Form HUD-92485 for instances in which
a federally insured HUD loan is being utilized, within the construction
term of any superior construction loan(s) or up to 36 months of the
actual loan closing date if no superior construction loan(s) exists,
unless a shorter timeline is necessitated by the federal funding source.
(10) Closed Final Development Inspection Letter. The
Closed Final Development Inspection Letter must be issued by the Department
within 36 months of loan closing. This letter will verify committed
amenities have been provided and confirm compliance with all applicable
accessibility requirements; this letter may include deficiencies that
require resolution. The Closed Final Development Inspection may be
conducted concurrently with a NSPIRE inspection. However, any letters
associated with a NSPIRE inspection will not satisfy the Closed Final
Development Inspection Letter required by this subsection.
Cont'd... |
