This section identifies the statutorily-mandated Set-asides
which the Department is required to administer. An Applicant may elect
to compete in each of the Set-asides for which the proposed Development
qualifies. In order to be eligible to compete in the Set-aside, the
Application must meet the requirements of the Set-aside as of the
Full Application Delivery Date. Election to compete in a Set-aside
does not constitute eligibility to compete in the Set-aside, and Applicants
who are ultimately deemed not to qualify to compete in the Set-aside
will be considered not to be participating in the Set- aside for purposes
of qualifying for points under §11.9(e)(3) of this chapter (related
to Criteria promoting the efficient use of limited resources and applicant
accountability). Commitments of Competitive HTCs issued by the Board
in the current program year will be applied to each Set-aside, Rural
regional allocation, Urban regional allocation, and USDA Set-aside
for the current Application round as appropriate.
(1) Nonprofit Set-Aside. (§2306.6729 and §2306.6706(b)).
At least 10% of the State Housing Credit Ceiling for each calendar
year shall be allocated to Qualified Nonprofit Developments which
meet the requirements of Code, §42(h)(5) and Tex. Gov't Code §2306.6729
and §2306.6706(b). Qualified Nonprofit Organizations must have
the controlling interest in the Development Owner applying for this
Set-aside (i.e., greater than 50% ownership in the General Partner).
If the Application is filed on behalf of a limited partnership, the
Qualified Nonprofit Organization must be the manager of the Managing
General Partner. If the Application is filed on behalf of a limited
liability company, the Qualified Nonprofit Organization must be the
Manager of the controlling Managing Member. Additionally, for Qualified
Nonprofit Development in the Nonprofit Set-aside the nonprofit entity
or its nonprofit Affiliate or subsidiary must be the Developer or
a co-Developer as evidenced in the development agreement. An Applicant
that meets the requirements to be in the Qualified Nonprofit Set-aside
is deemed to be applying under that Set-aside unless their Application
specifically includes an affirmative election to not be treated under
that Set-aside and a certification that they do not expect to receive
a benefit in the allocation of tax credits as a result of being affiliated
with a nonprofit. The Department reserves the right to request a change
in this election or to not recommend credits for those unwilling to
change elections if insufficient Applications in the Nonprofit Set-Aside
are received. Applicants may not use different organizations to satisfy
the state and federal requirements of the Set-aside.
(2) USDA Set-Aside. (§2306.111(d-2)). 5% of the
State Housing Credit Ceiling for each calendar year shall be allocated
to Rural Developments which are financed through USDA. If an Application
in this Set-aside involves Rehabilitation it will be attributed to
and come from the At- Risk Development Set-aside; if an Application
in this set-aside involves New Construction it will be attributed
to and come from the applicable Uniform State Service Region and will
compete within the applicable subregion unless the Application is
receiving USDA Section 514 funding. Applications must also meet all
requirements of Tex. Gov't Code §2306.111(d-2).
(A) Eligibility of Certain Developments to Participate
in the USDA or Rural Set-asides. (§2306.111 (d-4)). A proposed
or Existing Residential Development that, before September 1, 2013,
has been awarded or has received federal financial assistance provided
under §§514, 515, or 516 of the Housing Act of 1949 (42
U.S.C. §§1484, 1485, or 1486) may be attributed to and come
from the At-Risk Development Set-aside or the Uniform State Service
Region in which the Development is located, regardless of whether
the Development is located in a Rural Area.
(B) All Applications that are eligible to participate
under the USDA Set-aside will be considered Rural for all scoring
items under this chapter. If a Property receiving USDA financing is
unable to participate under the USDA Set-aside and it is located in
an Urban subregion, it will be scored as Urban.
(3) At-Risk Set-Aside. (§2306.6714; §2306.6702).
(A) At least 15% of the State Housing Credit Ceiling
for each calendar year will be allocated under the At-Risk Development
Set-aside and will be deducted from the State Housing Credit Ceiling
prior to the application of the regional allocation formula required
under §11.6 of this chapter (relating to Competitive HTC Allocation
Process). Through this Set-aside, the Department, to the extent possible,
shall allocate credits to Applications involving the preservation
of Developments identified as At-Risk Developments. (§2306.6714)
5% of the State Housing Credit Ceiling associated with this Set- aside
will be given as priority to Rehabilitation Developments under the
USDA Set-aside; any Applications submitted under the USDA Set-Aside
in excess of this 5% priority may compete within the At-Risk Set-Aside
only if they meet the definition for an At-Risk Development and have
submitted sufficient supporting documentation within the Application
to demonstrate qualification as an At-Risk Development. Applications
submitted under the USDA Set-Aside in excess of the 5% priority that
do not meet the definition for an At-Risk Development do not qualify
for the At-Risk Set-Aside.
(B) An At-Risk Development qualifying under Tex. Gov't
Code §2306.6702(a)(5)(A) must meet the following requirements:
(i) Pursuant to Tex. Gov't Code §2306.6702(a)(5)(A)(i),
a Development must have received the benefit of a subsidy in the form
of a qualified below-market interest rate loan, interest rate reduction,
rental subsidy, Section 8 housing assistance payment, rental supplement
payment, rental assistance payment, or equity incentive from any of
the programs provided in subclauses (I) to (VIII) of this clause.
Applications participating in the At-Risk Set-Aside must include evidence
of the qualifying subsidy.
(I) Sections 221(d)(3) and (5), National Housing Act
(12 U.S.C. §1715l);
(II) Section 236, National Housing Act (12 U.S.C. §1715z-1);
(III) Section 202, Housing Act of 1959 (1 2 U.S.C. §1701q);
(IV) Section 101, Housing and Urban Development Act
of 1965 (12 U.S.C. §1701s);
(V) the Section 8 Additional Assistance Program for
housing developments with HUD-Insured and HUD-Held Mortgages administered
by the United States Department of Housing and Urban Development as
specified by 24 CFR Part 886, Subpart A;
(VI) the Section 8 Housing Assistance Program for the
Disposition of HUD-Owned Projects administered by the United States
Department of Housing and Urban Development as specified by 24 CFR
Part 886, Subpart C; (VII) §§514, 515, and 516, Housing
Act of 1949 (42 U.S.C. §§1484, 1485, and 1486);
(VII) §§514, 515, and 516, Housing Act of
1949 (42 U.S.C. §§1484, 1485, and 1486); or
(VIII) §42, Internal Revenue Code of 1986.
(ii) Any stipulation to maintain affordability in the
contract granting the subsidy or any HUD-insured or HUD-held mortgage
as described in §2306.6702(a)(5)(A)(ii)(a) will be considered
to be nearing expiration or nearing the end of its term if the contract
expiration will occur or the term will end within two years of July
31 of the year the Application is submitted. Developments with HUD-insured
or HUD-held mortgages qualifying as At-Risk under §2306.6702(a)(5)(A)(ii)(b)
will be considered eligible if the HUD-insured or HUD-held mortgage
is eligible for prepayment.
(iii) Developments with existing Department LIHTC LURAs
must have completed all applicable Right of First Refusal procedures
prior to the pre-application Final Delivery Date.
(C) An At-Risk Development qualifying under Tex. Gov't
Code §2306.6702(a)(5)(B) must meet one of the requirements under
clause (i), (ii) or (iii) of this subparagraph and also meet the stipulations
noted in clause (iv) of this subparagraph:
(i) Units to be Rehabilitated or Reconstructed must
be owned by a public housing authority or a public facility corporation
created by a public housing authority under Chapter 303, Local Government
Code and received assistance under §9, United States Housing
Act of 1937 (42 U.S.C. §1437g); or
(ii) Units to be Rehabilitated or Reconstructed must
have been proposed to be disposed of or demolished, or already disposed
or demolished within the two-year period preceding the date the Application
is submitted, by a public housing authority or public facility corporation
created by a public housing authority under Chapter 303, Local Government
Code and received assistance under §9, United States Housing
Act of 1937 (42 U.S.C. §1437g); or
Cont'd... |