| (ii) For all other requests for reductions in the total
number of Low-Income Units or reductions in the number of Low-Income
Units at any rent or income level, prior to issuance of IRS Form(s)
8609 by the Department, the lender and syndicator must submit written
confirmation that the Development is infeasible without the adjustment
in Units. The Board may or may not approve the amendment request;
however, any affirmative recommendation to the Board is contingent
upon concurrence from Department staff that the Unit adjustment is
necessary for the continued financial feasibility of the Development;
and
(B) If it is determined by the Department that the
loss of low-income targeting points would have resulted in the Application
not receiving an award in the year of allocation, and the amendment
is approved by the Board, the approved amendment will carry a penalty
that prohibits the Applicant and all Persons or entities with any
ownership interest in the Application (excluding any tax credit purchaser/syndicator),
from participation in the Housing Tax Credit Program (for both the
Competitive Housing Tax Credit Developments and Tax-Exempt Bond Developments)
for 24 months from the time that the amendment is approved.
(b) Amendments to the LURA. Department approval shall
be required for any amendment to a LURA in accordance with this section.
An amendment request shall be submitted in writing, containing a detailed
explanation of the request, the reason the change is necessary, the
good cause for the change, financial information related to any financial
impact on the Development, information related to whether the necessity
of the amendment was reasonably foreseeable at the time of application,
and other information as determined to be necessary by the Department,
along with any applicable fee as identified in Chapter 11, Subchapter
E of this title (relating to Fee Schedule, Appeals, and other Provisions).
The Department may order or require the Development Owner to order
a Market Study or appraisal at the Development Owner's expense. If
a Development has any uncorrected issues of noncompliance outside
of the corrective action period (other than the provision being amended)
or otherwise owes fees to the Department, such non-compliance or outstanding
payment must be resolved to the satisfaction of the Department, before
a request for amendment will be acted upon. The Department will not
approve changes that would violate state or federal laws including
the requirements of §42 of the Code, 24 CFR Part 92 (HOME Final
Rule), 24 CFR Part 93 (NHTF Interim Rule), Chapter 1 of this title
(relating to Administrative Requirements), Chapter 11 of this title
(relating to Qualified Allocation Plan), Chapter 12 of this title
(relating to Multifamily Housing Revenue Bond Rules), Chapter 13 of
this title (relating to Multifamily Direct Loan Rule), Tex. Gov't
Code, Chapter 2306, and the Fair Housing Act. For Tax-Exempt Bond
Developments, compliance with their Regulatory Agreement and corresponding
bond financing documents. Prior to staff taking a recommendation to
the Board for consideration, the procedures described in paragraph
(3) of this subsection must be followed.
(1) Non-Material LURA Amendments. The Executive Director
or designee may administratively approve all LURA amendments not defined
as Material LURA Amendments pursuant to paragraph (2) of this subsection.
A non-material LURA amendment may include but is not limited to:
(A) HUB participation removal. Removal of a HUB participation
requirement will only be processed as a non-material LURA amendment
after the issuance of IRS Form(s) 8609 and requires that the Department
find that:
(i) The HUB is requesting removal of its own volition
or is being removed as the result of a default under the organizational
documents of the Development Owner;
(ii) the participation by the HUB has been substantive
and meaningful, or would have been substantive or meaningful had the
HUB not defaulted under the organizational documents of the Development
Owner, enabling it to realize not only financial benefit but to acquire
skills relating to the ownership and operating of affordable housing;
and
(iii) where the HUB will be replaced as a general partner
or special limited partner that is not a HUB and will sell its ownership
interest, an ownership transfer request must be submitted as described
in §10.406 of this subchapter;
(B) A change resulting from a Department work out arrangement
as recommended by the Department's Asset Management Division;
(C) A change in the Right of First Refusal period as
described in amended §2306.6726 of the Tex. Gov't Code;
(D) Where the Board has approved a de minimis modification
of the Unit Mix or bedroom mix of Units to increase the Development's
accessibility;
(E) In accordance with HOMEFires, Vol. 17 No. 1 (January
2023, as may be amended from time to time) bifurcation of the term
of a HOME or NSP LURA with the Department that requires a longer affordability
period than the minimum federal requirement, into a federal and state
affordability period; or
(F) A correction of error.
(2) Material LURA Amendments. Development Owners seeking
LURA amendment requests that require Board approval must submit the
request and all required documentation necessary for staff's review
of the request to the Department at least 45 calendar days prior to
the Board meeting at which the amendment is anticipated to be considered.
Before the 15th day preceding the date of Board action on the amendment,
notice of an amendment and the recommendation of the Executive Director
and Department staff regarding the amendment will be posted to the
Department's website and the Applicant will be notified of the posting.
(§2306.6717(a)(4)). The Board must consider the following material
LURA amendments:
(A) Reductions to the number of Low-Income Units;
(B) Changes to the income or rent restrictions;
(C) Changes to the Target Population;
(D) The removal of material participation by a Nonprofit
Organization as further described in §10.406 of this subchapter;
(E) The removal of material participation by a HUB
prior to filing of IRS Form(s) 8609;
(F) Any amendment that affects a right enforceable
by a tenant or other third party under the LURA; or
(G) Any LURA amendment deemed material by the Executive
Director.
(3) Prior to staff taking a recommendation to the Board
for consideration, the Development Owner must provide reasonable notice
and hold a public hearing regarding the requested amendment(s) at
least 20 business days prior to the scheduled Board meeting where
the request will be considered. Development Owners will be required
to submit a copy of the notification with the amendment request. If
a LURA amendment is requested prior to issuance of IRS Form(s) 8609
by the Department, notification must be provided to the recipients
described in subparagraphs (A) - (E) of this paragraph. If an amendment
is requested after issuance of IRS Form(s) 8609 by the Department,
notification must be provided to the recipients described in subparagraph
(A) - (B) of this paragraph. Notifications include:
(A) Each tenant of the Development;
(B) The current lender(s) and investor(s);
(C) The State Senator and State Representative of the
districts whose boundaries include the Development Site;
(D) The chief elected official for the municipality
(if the Development Site is within a municipality or its extraterritorial
jurisdiction); and
(E) The county commissioners of the county in which
the Development Site is located (if the Development Site is located
outside of a municipality).
(4) Contents of Notification. The notification must
include, at a minimum, all of the information described in subparagraphs
(A) - (D) of this paragraph:
(A) The Development Owner's name, address and an individual
contact name and phone number;
(B) The Development's name, address, and city;
(C) The change(s) requested; and
(D) The date, time and location of the public hearing
where the change(s) will be discussed.
(5) Verification of public hearing. Minutes of the
public hearing and attendance sheet must be submitted to the Department
within three business days after the date of the public hearing.
(6) Approval. Once the LURA Amendment has been approved
administratively or by the Board, as applicable, Department staff
will provide the Development Owner with a LURA amendment for execution
and recording in the county where the Development is located.
Cont'd... |
