| (a) The Department may perform an onsite monitoring
review, a mail in desk review and physical inspection of any Development,
and review and photocopy all documents and records supporting compliance
with Departmental programs through the end of the Compliance Period
or the end of the period covered by the LURA, whichever is later.
The Development Owner shall permit the Department access to the Development
premises and records.
(b) The Department will perform monitoring reviews
of each low-income Development. The Department will conduct:
(1) The first review of HTC Developments by the end
of the second calendar year following the year the last building in
the Development is placed in service;
(2) The first review of all Developments, other than
those described in paragraph (1) of this subsection, as leasing commences;
(3) During the Federal Compliance Period subsequent
reviews will be conducted at least once every three years;
(4) After the Federal Compliance Period, Developments
will be monitored in accordance with §10.623 of this chapter
(relating to Monitoring Procedures for Housing Tax Credit Properties
After the Compliance Period);
(5) A physical inspection of the Development including
the exterior of the Development, Development amenities, and an interior
inspection of a sample of Units;
(6) Limited reviews of physical conditions, including
follow-up inspections to verify completion of reported corrective
action, may be conducted without prior notice (unless access to tenant
units is required, in which case at least 48 hours notice will be
provided); and
(7) Reviews, meetings, and other appropriate activity
in response to complaints or investigations.
(c) The Department will perform onsite file reviews
or a mail in desk review and monitor:
(1) Low-income resident files in each Development,
and review the Income Certifications;
(2) The documentation the Development Owner has received
to support the certifications;
(3) The rent records; and
(4) Any additional aspects of the Development or its
operation that the Department deems necessary or appropriate.
(d) The LURA for most HOME, NSP, TCAP RF, NHTF, and
HOME-ARP Developments specifies a required Unit Mix and income level.
During the monitoring review it will be determined if the minimum
number of affordable Units and exact square footage has been provided.
Failure to provide the exact square footage listed in the LURA will
be cited as "Failure to provide correct square footage". Failure to
provide the required number of Units required by the LURA will be
cited as "Household income above income limit upon initial occupancy".
(1) Example 2. A TCAP RF LURA requires eight low-income
units at 60% AMI with the following Unit mix:
(A) Three one bedroom, one bath units with a Net Rentable
Area (NRA) of 770 sq ft;
(B) One two bedroom one bath units with a NRA of 900
sq ft; and
(C) Four three bedroom two bath units with a NRA of
1000 sq ft.
(2) If during the monitoring review the Development
has eight units designated as TCAP RF, but is not exactly the Units
and square footage mix shown in subparagraphs (A) - (C) of this paragraph
in Example 612(2) (even if the actual square footage provided is greater)
the noncompliance "Failure to provide correct square footage" will
be cited.
(e) At times other than monitoring reviews, the Department
may request for review, in a format designated by the Department,
information on tenant income and rent for each Low-Income Unit and
may require a Development Owner to submit copies of the tenant files,
including copies of the Income Certification, the documentation the
Development Owner has received to support that certification, and
the rent record for any low-income tenant.
(f) The Department will select the Low-Income Units
and tenant records that are to be inspected and reviewed. Original
records are required for review. The Department will not give Development
Owners advance notice that a particular Unit, tenant record, or a
particular year will be inspected or reviewed. However, the Department
will give reasonable notice, as defined in Treasury Regulation 1.42-5,
to the Development Owner that an onsite inspection or a tenant record
review will occur so the Development Owner may notify tenants of the
inspection or assemble original tenant records for review. If a credible
complaint of fraud or other egregious alleged or suspected noncompliance
is received, the Department reserves the right to conduct unannounced
onsite monitoring visits and/or physical inspections.
(g) In order to prepare for monitoring reviews and
physical inspections and to reduce the amount of time spent onsite,
Department staff must review certain requested documentation described
in the notification. Owners are required to submit documentation by
the required deadline indicated in the notification. Failure to submit
required documentation will result in a finding of noncompliance.
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| Source Note: The provisions of this §10.618 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 |
