| (a) 10% Test (Competitive HTC Only). No later than
July 1 of the year following the submission of the Carryover Allocation
Agreement or as otherwise specified in the applicable year's Qualified
Allocation Plan, documentation must be submitted to the Department
verifying that the Development Owner has expended more than 10% of
the Development Owner's reasonably expected basis, pursuant to §42(h)(1)(E)(i)
and (ii) of the Code and Treasury Regulations, 26 CFR §1.42-6.
The Development Owner must submit, in the form prescribed by the Department,
documentation evidencing paragraphs (1) - (7) of this subsection,
along with all information outlined in the Post Award Activities Manual.
Satisfaction of the 10% Test will be contingent upon the submission
of the items described in paragraphs (1) - (7) of this subsection
as well as all other conditions placed upon the Application in the
Commitment. Requests for an extension will be reviewed on a case by
case basis as addressed in §10.405(c) of this subchapter and
§11.2 of this title, as applicable, and a point deduction evaluation
will be completed in accordance with Tex. Gov't Code §2306.6710(b)(2)
and §11.9(f) of this title. Documentation to be submitted for
the 10% Test includes:
(1) An Independent Accountant's Report and Taxpayer's
Basis Schedule form. The report must be prepared on the accounting
firm's letterhead and addressed to the Development Owner or an Affiliate
of the Development Owner. The Independent Accountant's Report and
Taxpayers Basis Schedule form must be signed by the Development Owner.
If, at the time the accountant is reviewing and preparing their report,
the accountant has concluded that the taxpayer's reasonably expected
basis is different from the amount reflected in the Carryover Allocation
agreement, then the accountant's report should reflect the taxpayer's
reasonably expected basis as of the time the report is being prepared;
(2) Any conditions of the Commitment or Real Estate
Analysis underwriting report due at the time of 10% Test submission;
(3) Evidence that the Development Owner has purchased,
transferred, leased, or otherwise has ownership of the Development
Site and a current title policy. The Development Site must be identical
to the Development Site that was submitted at the time of Application
submission. For purposes of this paragraph, any changes to the Development
Site acreage between Application and 10% Test must be addressed by
written explanation or, as appropriate, in accordance with §10.405
of this subchapter (relating to Amendments and Extensions);
(4) A current survey or plat of the Development Site,
prepared and certified by a duly licensed Texas Registered Professional
Land Surveyor. The survey or plat must clearly delineate the flood
plain boundary lines and show all easements and encroachments;
(5) For New Construction, Reconstruction, and Adaptive
Reuse Developments, a certification from a Third Party civil engineer
or architect stating that all necessary utilities will be available
at the Development Site and that there are no easements, licenses,
royalties, or other conditions on or affecting the Development that
would materially or adversely impact the ability to acquire, develop,
and operate as set forth in the Application. Copies of supporting
documents may be required by the Department;
(6) For the Development Owner and on-site or regional
property manager, training certificate(s) from a Department approved
"property owner and manager Fair Housing trainer" showing that a controlling
Principal in the Development Owner structure and an on-site or regional
property manager attended and passed at least five hours of Fair Housing
training. For architects and engineers, training certificate(s) from
a Department approved "architect and engineer Fair Housing trainer"
showing that the lead architect or engineer responsible for certifying
compliance with the Department's accessibility and construction standards
has attended and passed at least five hours of Fair Housing training.
Certifications required under this paragraph must not be older than
three years from the date of submission of the 10% Test Documentation,
and must verify that all parts or phases of the offered training have
been completed; two certificates supplied for the same part or phase
of an offered training will not be counted towards the five hour required
minimum, even if they were attended on different dates; and
(7) A Certification from the lender and syndicator
identifying all known Guarantors. If identified Guarantors have changed
from the Guarantors or Principals identified at the time of Application,
a non-material amendment may be required in accordance with §10.405
of this subchapter (relating to Amendments and Extensions), and the
new Guarantors or Principals must be reviewed in accordance with Chapter
1, Subchapter C of this title (relating to Previous Participation
and Executive Award Review and Advisory Committee).
(8) Evidence of submission of the CMTS Filing Agreement
pursuant to §10.607(a) of this title (relating to Reporting Requirements).
(b) Construction Status Report (All Multifamily Developments).
All multifamily Developments must submit a construction status report.
Construction status reports shall be due by the tenth day of the month
following each reporting quarter's end (January, April, July, and
October) and continue on a quarterly basis until the entire Development
is complete as evidenced by one of the following: Certificates of
occupancy for each building, the Architect's Certificate(s) of Substantial
Completion (AIA Document G704 or equivalent form) for the entire Development,
the final Application and Certificate for Payment (AIA Document G702
and G703), or an equivalent form approved for submission by the construction
lender and/or investor. For Competitive Housing Tax Credit Developments,
the initial report is due by October 10th following the year of award
(this includes Developments funded with HTC and TDHCA Multifamily
Direct Loans), and for Developments awarded under the Department's
Multifamily Direct Loan programs only, the initial report is due by
the 90th calendar day after loan closing. For Tax Exempt Bond Developments,
the initial construction status report must be submitted as part of
the Post Bond Closing Documentation and is due by the 60th calendar
day following closing on the bonds. A Construction Status Report not
submitted by the due date will incur an extension fee in accordance
with §11.901 of this title (relating to Fee Schedule). The initial
report for all multifamily Developments shall consist of the items
identified in paragraphs (1) - (6) of this subsection, unless stated
otherwise. All subsequent reports shall contain items identified in
paragraphs (4) - (6) of this paragraph and must include any changes
or amendments to items in paragraphs (1) - (3) if applicable:
(1) The executed partnership agreement with the investor
or, for Developments receiving an award only from the Department's
Direct Loan Program, other documents setting forth the legal structure
and ownership. If identified Guarantors or Principals of a Guarantor
entity were not already identified as a Principal of the Owner, Developer,
or Guarantor at the time of Application, a non-material amendment
must be requested in accordance with §10.405 of this subchapter,
and the new Guarantors and all of its Principals, as applicable, must
be reviewed in accordance with Chapter 1, Subchapter C of this title
(relating to Previous Participation and Executive Award Review and
Advisory Committee);
(2) The executed construction contract for the General
Contractor, prime subcontractor(s) and Affiliates or Related Party
subcontractor(s);
(3) The construction loan agreement. If the loan has
not closed, the anticipated closing date must be provided and, upon
closing, the agreement must be provided to the Department;
(4) The most recent Application and Certificate for
Payment (AIA Document G702 and G703) certified by the Architect of
Record (or equivalent form approved for submission by the construction
lender and/or investor) for the General Contractor, prime subcontractor(s)
and Affiliates or Related Party subcontractor(s);
(5) All Third Party construction inspection reports
not previously submitted. If the lender and/or investor does not require
third party construction inspection reports, the Development Owner
must hire a third party inspector to perform these inspections on
a quarterly basis and submit the reports to the Department. Third
Party construction inspection reports must include, at a minimum,
the date construction started (initial submission only), a discussion
of site conditions as of the date of the site visit, current photographs
of the construction site and exterior and interior of buildings, an
estimated percentage of construction completion as of the date of
the site visit, identification of construction delays and other relevant
progress issues, if any, and the anticipated construction completion
date; and
Cont'd... |
