(a) Under the Code, HTC Development Owners may elect
20% of the Units restricted at the 50% income and rent limits (20/50),
40% of the Units restricted at the 60% income and rent limits (40/60)
or the average income minimum set aside. Many Developments have additional
income and rent requirements (e.g., 30%, 40% and 50%) that are lower
than or in addition to the election requirement. This requirement
is referred to as "additional occupancy restrictions" and is reflected
in the Development's LURA.
(b) A Development with additional rent and occupancy
restrictions must maintain a waiting list for their lower rent restricted
Units. The Development's waitlist policy must inform applicants and
current residents of the availability of lower rent Units and the
process for renting a lower rent Unit. Unless otherwise approved at
Application, underwriting, and cost certification, all Unit sizes
must be available at the lower rent limits. The waitlist policy for
Developments with lower rent restricted Units must address how the
waiting list for their lower rent restricted Units will be managed.
The policy must not give a preference to prospective applicants over
existing households. However, a Development may, but is not required
to, prioritize existing households over prospective applicants.
(c) The Department will examine the actual gross rent
(tenant portion of rent plus utility allowance plus any mandatory
fees) and income levels of all households to determine if the additional
income and rent requirements of the LURA are met. Until and unless
the Internal Revenue Service or Treasury Department issue conflicting
guidance, the Department will examine the actual gross rent and income
of all households to determine if Developments that elected the average
income minimum set aside have met the federal requirements and any
lower additional occupancy restriction reflected in the Development's
LURA.
(d) Until and unless the Internal Revenue Service or
the Treasury Department issue conflicting or additional guidance,
the Department will monitor the Available Unit Rule in the following
manner for Developments that elected the average income minimum set
aside:
(1) If the income of the household who, at the last
certification, had an income and rent less than the 60% limits exceeds
140% of the 60% limit, the household must be redesignated as over
income.
(2) If the income of a household with an income or
rent above the 60% level and less than or equal to the 70% limits
exceeds 140% of the 70% limit, the household must be designated as
over income.
(3) If the income of a household with an income or
rent above the 70% level and less than or equal to the 80% limits
exceeds 140% of the 80% limit, the household must be designated as
over income.
(4) Owners are not required to terminate the tenancy
of over income households. When the Unit occupied by an over income
household is vacated, it must be reoccupied by a household with an
income and rent level equal to or less than the rent level of the
household that went over income. In addition, the Unit must be reoccupied
by a household that restores the low income average of the project
to 60% or less.
(e) Units at 80% area median income and rent on HTC
Developments. In certain years, the Department's Qualified Allocation
Plan provided incentives to lease 10% of the Development's Market
Rate Units to households at 80% income and rents. This section provides
guidance for implementation. If the LURA requires 10% of the Market
Rate Units be leased to households at 80% income and rent limits,
the Owner must certify the 80% households at the time of move in only.
Recertifications will not be required. Student rules do not apply
to Units occupied by 80% households. Noncompliance with the requirement
to lease to 80% households is not reportable to the IRS on IRS Form
8823 but will be cited as noncompliance under the event "Development
failed to meet additional state required rent and occupancy restrictions."
(f) The Department does not require Developments to
lease more Units under the additional occupancy restrictions than
established in their LURA. However, if a Development inadvertently
designates more households than required under the additional rent
and occupancy restrictions, they may only decrease to the minimum
number through attrition and new move ins, not by removing designations.
(g) Developments where 100% of the households pay rent
equal to 30% of their adjusted income are not required to comply with §10.615(b)
regarding wait lists for lower designated Units. In addition, Developments where 100% of the households pay rent equal to
30% of their adjusted income will not be required to change designations
if the tenant portion of rent increases because of an increase in
household income. Compliance will be evaluated without regard for
how the owner designated the households on the Income Certification
or the Unit Status Report. Instead, for Developments where 100% of
the households pay rent equal to 30% of their adjusted income, compliance
with additional rent and occupancy restrictions will be determined
by a review of the actual incomes and rents charged.
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Source Note: The provisions of this §10.615 adopted to be effective February 11, 2019, 44 TexReg 560; amended to be effective May 17, 2020, 45 TexReg 3036; amended to be effective November 3, 2022, 47 TexReg 7271 |