| (a) Filing and Term of Regulatory Agreement. A Bond
Regulatory and Land Use Restriction Agreement will be filed in the
property records of the county in which the Development is located
for each Development financed from the proceeds of Bonds issued by
the Department. Such Regulatory and Land Use Restriction Agreement
shall include provisions relating to the Qualified Project Period,
the State Restrictive Period, along with points claimed for other
provisions that will be required to be monitored throughout the State
Restrictive Period, and shall also include provisions relating to
Persons with Special Needs. The minimum term of the Regulatory Agreement
will be based on the criteria as described in paragraphs (1) - (3)
of this subsection, as applicable:
(1) 30 years, or such longer period as elected under §12.6(4)
of this chapter (relating to Extended Affordability), from the date
the Development Owner takes legal possession of the Development;
(2) The end of the remaining term of the existing federal
government assistance pursuant to Tex. Gov't Code, §2306.185;
or
(3) The period required by the Code.
(b) Federal Set Aside Requirements.
(1) Developments which are financed from the proceeds
of Private Activity Bonds must be restricted under one of the two
minimum set-asides as described in subparagraphs (A) and (B) of this
paragraph. Regardless of an election that may be made under Section
42 of the Code relating to income averaging, a Development will be
required under the Bond Regulatory and Land Use Restriction Agreement
to meet one of the two minimum set-asides described in subparagraphs
(A) and (B) of this paragraph. Any proposed market rate Units shall
be limited to 140% of the area median income and be considered restricted
units under the Bond Regulatory and Land Use Restriction Agreement
for purposes of using Bond proceeds to construct such Units.
(A) At least 20% of the Units within the Development
shall be occupied or held vacant and available for occupancy at all
times by persons or families whose income does not exceed 50% of the
area median income; or
(B) At least 40% of the Units within the Development
shall be occupied or held vacant and available for occupancy at all
times by persons or families whose income does not exceed 60% of the
area median income.
(2) The Development Owner must, at the time of Application,
indicate which of the two federal set-asides will apply to the Development
and must also designate the selected priority for the Development
in accordance with Tex. Gov't Code, §1372.0321. Units intended
to satisfy set-aside requirements must be distributed equally throughout
the Development, and must include a reasonably proportionate amount
of each type of Unit available in the Development.
(3) No tenant qualifying under either of the minimum
federal set-asides shall be denied continued occupancy of a Unit in
the Development because, after commencement of such occupancy, such
tenant's income increases to exceed the qualifying limit. However,
should a tenant's income, as of the most recent determination thereof,
exceed 140% of the applicable federal set-aside income limit and such
tenant constitutes a portion of the set-aside requirement of this
section, then such tenant shall only continue to qualify for so long
as no Unit of comparable or smaller size is rented to a tenant that
does not qualify as a Low-Income Tenant.
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