10 TAC §§51.1 - 51.3, 51.5 - 51.14, 51.17, 51.18
The Texas Department of Housing and Community Affairs (the
Department) adopts, with changes, amendments to §§51.1 - 51.3; 51.5
- 51.14; and 51.17 - 51.18, concerning the Housing Trust Fund Rules, as published
in the December 10, 1999,
Texas Register
(24
TexReg 11050).
The amendments were adopted by the Department to provide procedures for
the allocation of Housing Trust funds available under state law to eligible
public entities, nonprofit organizations, for profit entities, and persons
and families, to provide safe, decent, and sanitary housing for low, very
low, and extremely low income families and individuals and persons with special
needs.
The amendments were adopted to provide clarification and corrections and
to provide for the allocation of Housing Trust funds.
SUMMARY OF COMMENTS RECEIVED UPON PUBLICATION OF THE PROPOSED RULES IN
THE TEXAS REGISTER AND COMMENTS PROVIDED AT PUBLIC HEARINGS HELD BY THE DEPARTMENT
On December 10, 1999, the proposed Housing Trust Fund Rules were published
in the
Texas Register
thereby commencing the
required 30 day comment period. Said comment period ended January 9, 2000.
The Department held public hearings in Fort Worth, Corpus Christi and Austin.
In addition to the public hearings, the Department received a number of written
comments.
The scope of public comment concerning the Housing Trust Fund ("HTF") Rules
pertain to the following sections:
Section 51.5; Allocation of Housing Trust Funds
Comment: It was suggested by Mental Health Housing Development Corporation
that the HTF program use forgivable loans.
Department/Staff Response: Section 51.5(2) of the HTF Rules currently allows
the Department to waive repayment of any loans. Also, in the HTF program application,
the HTF program staff has the discretion to consider making recommendations
for forgivable loans to applicants who substantially target extremely low
income individuals and families.
Board Response: Department/Staff's response accepted.
Comment: It was suggested to include in HTF's Capacity Building/Technical
Assistance programs a consumer driven architectural barrier removal program
for people with disabilities.
Department/Staff Response: The Department concurs and will include in the
guidelines of HTF's Capacity Building/Technical Assistance programs a consumer
driven architectural barrier removal program for people with disabilities.
Board Response: Department/Staff's response accepted.
Section 51.6; Basic Eligible Activities
Comment: A number of comments were made regarding adding rental assistance
with an emphasis on assistance to extremely low income Texans as an eligible
activity.
Department/Staff Response: The Department concurs with this comment. The
current HTF rules do not prohibit rental assistance; however, the Department
suggests the following:
Section 51.6; Basic Eligible Activities
The Department shall make grants and loans from the Housing Trust to Eligible
Applicants for purposes consistent with § 51.2 of this title (related
to Program Goals and Objectives). Eligible uses of trust funds include, but
are not limited to the following:
(1) To fund housing development costs for a housing project or to provide
down-payment assistance, rental assistance, credit enhancement, direct loans
and interest rate reduction assistance to low, very low, and extremely low
income individuals and families, and persons with special needs.
Board Response: Department/Staff's response accepted.
Section 51.9; Application Procedure and Requirements
Comment: It was suggested to add provisions to this section "Application
Procedure and Requirements" to allow applications for rental assistance activities
Department/Staff Response: The Department concurs with this comment and
suggests adding new subsection (e) as follows:
Section; 51.9; Application Procedure and Requirements
(e) Rental assistance applicants will be required to submit a specific
application as outlined in the Program Guidelines as amended each program
cycle.
Board Response: Department/Staff's response accepted.
Comment: It was suggested by Disability Policy Consortium to include a
requirement for a "self-evaluation" of accessibility prior to funding.
Department/Staff Response: The Department wishes to further research the
issues of "self-evaluation" of accessibility in order to better understand
process prior to including it in the HTF program rules.
Board Response: Department/Staff's response accepted.
Application Process
Comment: It was suggested that the application period coincide with other
Department program application periods.
Department/Staff Response: The Department does not believe a rule change
is necessary. The HTF rules do not limit or specify dates for program application
periods. The Department makes every effort to coincide its application periods
with other Department program application periods when feasible and when practical.
Board Response: Department/Staff's response accepted.
Comment: It was suggested that there be two (2) rounds of application funding
cycles.
Department/Staff Response: The Department does not believe that a rule
change is necessary. The HTF rules do not limit the number of application
funding cycles.
Board Response: Department/Staff's response accepted.
Section 51.10; Criteria for Funding
Comment: It was suggested to adjust this section, "Criteria for Funding,"
to allow projects for rental assistance to achieve competitive scores.
Department/Staff Response: The Department concurs with this comment and
will consider adding these provisions to the HTF program guidelines.
Board Response: Department/Staff's response accepted.
Comment: A number of comments were made as to the need for education and
enforcement regarding disability requirements. It was suggested to make compliance
with federal laws such as the Fair Housing Act, §504 of the Rehabilitation
Act of 1973 and the American with Disabilities Act a threshold requirement.
Department/Staff Response: The disability requirements are currently in
the HTF Quality Housing Standards which are attached to program application,
guidelines, and the HTF contracts. The Federal laws cited apply of their own
accord.
Board Response: Department/Staff's response accepted.
Comment: A number of comments were made as to the construction requirements
of SB 623. It was suggested that SB 623 construction requirements be a requirement
under Funding and Threshold Criteria.
Department/Staff Response: SB 623 added new §2306.514, Government
Code to the Department's enabling statute effective September 1, 1999. §2306.514
applies to all awards of state or federal funds by the Department after the
effective date for construction of single family affordable housing. This
is therefore a statutory requirement and is currently in the HTF guidelines
and construction award agreements and contracts.
Board Response: Department/Staff's response accepted.
Comment: It was suggested that extra points be awarded for urban distressed
areas in order to put more emphasis on the low income housing needs in those
areas.
Department/Staff Response: The Department does not believe a change in
the rules is necessary. The allocation process under new §2306.111(d),
(e) and (f), Government Code (added by SB 1112), to be effective September
1, 2000, once implemented, will require the allocation of HTF funds to each
uniform service area based on need for housing assistance and was designed
to accommodate those needs through the application process.
Board Response: Department/Staff's response accepted.
Section 51.11; Prohibition against Discrimination
Comment: A number of comments were made that the term "disability" should
be added to the subsection (a) prohibition against discrimination.
Department/Staff Response: The Department believes that the additional
language would have the effect of impermissibly expanding the meaning Section
2306.065 of the Government Code, from which §51.11 was derived.
Board Response: Department/Staff's response accepted.
Comment: It was suggested by Texas Apartment Association that the proposed
provision that no group or person receiving funds from the Housing Trust Fund
could refuse to rent to someone who is a participant in the Section 8 program
should be deleted because it forces applicants to participate in the Section
8 program. It was also suggested that this provision gives preference to those
applicants that participate in the Section 8 program.
Department/Staff Response: The Department agrees that the proposed rule
is ambiguous as written and is withdrawing it from consideration.
Board Response: Department/Staff's response accepted.
Section 51.12; Other Program Requirements
Comment: It was suggested to replace the word "handicap" with the word
"disability."
Department/Staff Response: The Department concurs that the word "disability"
rather than "handicap" is used in the state law governing employment discrimination
(Texas Commission on Human Rights Act, §§21.001
et. seq
., Labor Code) and suggests the following change to §51.12(a)(1):
Section 51.12; Other Program Requirements
(a) Employment opportunities.
(1)No person shall be discriminated against on the basis of race, color,
disability, religion, sex, or national origin in all phases of employment
during the performance of contracts as assisted with housing trust funds made
available under the Act.
Board Response: Department/Staff's response accepted.
Section 51.18; Waiver
Comment: It was suggested by Texas Council for Developmental Disabilities
that this waiver provision is too broad and should be narrowed by including
the term "public good" in the language.
Department/Staff Response: The Department believes that a waiver of rules
for a "compelling circumstance" is a waiver for the "public good."
Board Response: Department/Staff's response accepted.
PUBLIC COMMENT AND DEPARTMENTAL RESPONSE ON ITEMS OUTSIDE OF THE DRAFT
RULES
This section discusses items that are not specifically addressed in the
proposed HTF Rules published for public comment.
Implementation of HTF program
Comment: It was suggested that the Department follow a strict protocol
concerning implementation of its programs (i.e., Public Comment on proposed
program changes should come before NOFA's are issued.)
Department/Staff Response: The Department concurs with this comment and
is making every effort to follow the program rules and guidelines in effect
at the time notices of funding are issued when implementing its programs.
Board Response: Department/Staff's response accepted.
Comment: It was suggested that the Department make its Standard Operating
Procedures and application scores open to the public and explain any subjective
criteria involving the HTF.
Department/Staff Response: Standard Operating Procedures and application
scores received after the scoring process is complete are public information
and are subject to public disclosure. Any and all subjective criteria under
the HTF program are published in the HTF rules and program guidelines, all
of which are public information.
Board Response: Department/Staff's response accepted.
Comment: It was suggested that the needs-based allocation process required
by SB 1112 should be implemented now as to the HTF instead of waiting until
the effective date next year.
Department/Staff Response: The formula for the uniform state service regions
required in new §2306.111(d), (e) and (f) Government Code (added by SB
1112), effective September 1, 2000, was included in the proposed State Low
Income Housing Plan for which public comments have now been received. The
formula will be developed pursuant to this process.
Board Response: Department/Staff's response accepted.
Comment: It was suggested that HTF allocations be targeted to persons earning
0 - 60% of AMFI in order to help the Department meet the allocation goal of
Rider 3.
Department/Staff Response: The provisions of the Department's enabling
legislation specifically applicable to HTF (§§2306.201 - 2306207,
Government Code), require the use of funds to be limited to assistance to
individuals and families of low income (80% and below) and very low income
(60% and below). Section 2306.202 of the Government Code limits the use of
HTF funds to individuals and families of low income, but §2306.203(3)(C)
of the Government Code provides that the Board shall adopt rules providing
that the criteria used to rank HTF proposals will include the extent to which
individuals and families of very low income are served. Section 51.10(a)(2)(B)(iii)
of the HTF Rules currently provides that proposals will be ranked to target
individuals and families of very low income.
Board Response: Department/Staff's response accepted.
Comment: It was suggested that the Department direct the 10% capacity building
set-aside to a comprehensive capacity building program which includes five
components of capacity: planning; resource development; internal operations
and governance; program delivery; and networking.
Department/Staff Response: The Department will consider including some,
if not all, of the referenced five components of capacity when developing
its program guidelines for capacity building.
Board Response: Department/Staff's response accepted.
Comment: It was suggested by Enterprise Foundation that HTF adopt a concept
of visitability similar to the City of Austin ordinance.
Department/Staff Response: The Department staff believes the requirements
for single family affordable housing in the Department's enabling statute, §2306.513,
Government Code, contain similar provisions to those found in The City of
Austin Visitability Ordinance (Ordinance No. 981007-A).
Board Response: Department/Staff's response accepted.
Comment: It was suggested that language be added to the rules assuring
relevant stakeholders that they will be advised of the Department's intent
to revise the rules and invite public comment on proposed changes.
Department/Staff Response: Department program rules are revised in accordance
with the Administrative Procedures Act which requires publication of proposed
rules and public comment. The HTF program adheres to this rule-making process
as statutorily required and therefore the suggested provision to HTF rules
is not necessary. Furthermore, the HTF maintains a mailing list database which
is continuously updated. This mailing list is also used to notify relevant
stakeholders of all HTF program activities.
Board Response: Department/Staff's response accepted.
The amended sections are adopted under the Texas Government Code,
Chapter 2306, which provides the Texas Department of Housing and Community
Affairs with the authority to adopt rules governing the administration of
the department and its programs.
§51.1.Purpose.
This part describes policies and procedures applicable to the distribution
of funds pursuant to the Housing Trust Fund authorized under Texas Government
Code, Chapter 2306, Subchapter I.
§51.2.Program Goals and Objectives.
(a)
The Housing Trust Fund is used by the Department to provide
loans, grants, or other comparable forms of assistance to local units of government,
public housing authorities, community housing development organizations, nonprofit
organizations, for profit entities, and income-eligible persons, families,
and households to finance, acquire, rehabilitate, and develop affordable,
decent, safe, and sanitary housing.
(b)
The Housing Trust Fund is used by the Department to provide
assistance for persons and families of low, very low, and extremely low income
in financing, acquiring, rehabilitating, and developing affordable, decent,
safe, and sanitary housing.
(c)
The Housing Trust Fund is used by the Department to provide
technical assistance and capacity building to nonprofit organizations, and
community housing development organizations engaged in developing affordable
housing for persons and families of low, very low, and extremely low income.
§51.3.Definitions.
The following words and terms, when used in this part, shall have the
following meanings, unless the context clearly indicates otherwise.
(1)
Act--Texas Government Code, Chapter 2306, Subchapter I.
(2)
Affordable Housing--Housing for which low, very low,
and extremely low income families are not required to pay more than 30% of
monthly adjusted income for the mortgage payment and utilities, or rent and
utilities, computed in accordance with the federal regulations for the Section
8 Existing Housing Program set forth in the Code of Federal Regulations, Title
24, Part 5, Subpart F.
(3)
Board--The governing board of the Department.
(4)
Capacity Building--Educational and organizational
support assistance to promote the ability of community housing development
organizations and nonprofit organizations to maintain, rehabilitate and construct
housing for low, very low, and extremely low income persons and families.
This activity may include but is not limited to:
(A)
organizational support to cover expenses for training,
technical and other assistance to the board of directors, staff, and members
of the nonprofit organizations or community housing development organization;
(B)
program support including technical assistance and training
related to housing development, housing management, or other subjects related
to the provision of housing or housing services; or
(C)
studies and analyses of housing needs.
(5)
Community Housing Development Organizations--A
nonprofit organization that satisfies the requirements of 24 CFR 92.2, as
certified by the Department.
(6)
Department--The Texas Department of Housing and Community
Affairs.
(7)
Eligible Applicants--Local units of government, public
housing authorities, community housing development organizations, nonprofit
organizations, for profit entities, persons and families of low, very low,
and extremely low income, and persons with special needs.
(8)
Extremely Low Income Persons and Families--Persons
and families earning not more than 30% of the area median income as determined
by the United States Department of Housing and Urban Development, with allowances
for family size.
(9)
Housing Development Costs--The total of all costs
incurred in financing, creating, or purchasing any housing development, including,
but not limited to, a single-family dwelling, which are approved by the Department
as reasonable and necessary. The costs may include, but are not limited to:
(A)
the value of land and any buildings on the land owned by
the sponsor, or the cost of land acquisition and any buildings on the land,
including payments for options, deposits, or contracts to purchase properties
on the proposed housing sites;
(B)
cost of site preparation, demolition, and development;
(C)
fees paid or payable in connection with the planning, execution,
and financing of the housing development, such as those to the architects,
engineers, attorneys, accountants;
(D)
cost of necessary studies, surveys, plans, permits, insurance,
interest, financing, tax and assessment costs, and other operating and carrying
costs during construction;
(E)
cost of construction, rehabilitation, reconstruction, fixtures,
equipment, machinery, and apparatus related to the real property;
(F)
cost of land improvements, including landscaping, whether
or not the costs have been paid in cash or in a form other than cash;
(G)
necessary expenses in connection with initial occupancy
of the housing development;
(H)
an allowance established by the Department for contingency
reserves and reserves for any anticipated operating deficits during the first
two years of occupancy; and
(I)
the cost of the other items, including tenant relocation,
if tenant relocation costs are not otherwise being provided for, as the Department
shall determine to be reasonable and necessary for the development of the
housing development, less any and all net rents and other net revenues received
from the operation of the real and personal property on the development site
during construction.
(10)
Housing Development or Housing Project--Any
real or personal property, project, building, structure, facilities, work,
or undertaking, whether existing, new construction, remodeling, improvement,
or rehabilitation, which meets or is designed to meet minimum property standards
consistent with those prescribed in the Housing Trust Fund Property Standards,
found in the Program Guidelines, for the primary purpose of providing sanitary,
decent, and safe dwelling accommodations for rent, lease, use, or purchase
by persons and families of low, very low, and extremely low income, and persons
with special needs. The term may include buildings, structures, land, equipment,
facilities, or other real or personal properties which are necessary, convenient,
or desirable appurtenances, such as but not limited to streets, water, sewers,
utilities, parks, site preparation, landscaping, stores, offices, and other
non-housing facilities, such as administrative, community and recreational
facilities the Department determines to be necessary, convenient, or desirable
appurtenances.
(11)
Housing Finance Division--The division of the Department
responsible for the administration of the Housing Trust Fund.
(12)
Joint Venture--An agreement between a lead applicant
and a cooperating entity formed to administer or implement a Housing Trust
Fund project.
(13)
Lead Applicant--An Eligible Applicant designated
in a Housing Trust Fund application to assume contractual liability and legal
responsibility as the Recipient executing the written agreement with the State.
(14)
Local Units of Government--A county; an incorporated
municipality; a special district; a council of governments; any other legally
constituted political subdivision of the state; a public, nonprofit housing
finance corporation created under the Local Government Code, Chapter 394;
or a combination of any of the entities described here.
(15)
Low Income Persons and Families--Persons and families
earning not more than 80% of the area median income as determined by the United
States Department of Housing and Urban Development, with allowances for family
size.
(16)
Metropolitan and Metro--Areas designated by the Bureau
of the Census as metropolitan statistical areas (MSA) or primary metropolitan
statistical areas (PMSA) in the most recent decennial census.
(17)
Non-metropolitan and Non-Metro--Refers to all areas
outside those areas designated as MSAs by the Bureau of the Census in the
most recent decennial census.
(18)
Nonprofit Organization--Any public or private, nonprofit
organization that:
(A)
is organized under state or local laws;
(B)
has no part of its net earnings inuring to the benefit
of any member, founder, contributor, or individual; and
(C)
has a tax exemption ruling from the Internal Revenue Service
under the Internal Revenue Code of 1986, § 501(c), as amended.
(19)
Person with Special Needs-An individual who:
(A)
is considered disabled under a state or federal law;
(B)
is elderly (age 60+);
(C)
is designated by the Board as experiencing a unique need
for affordable, decent, safe housing that is not being met adequately by private
enterprise; or
(D)
is legally responsible for caring for an individual described
by subparagraphs (A), (B) or (C) of this paragraph and meets the income guidelines
of a person of low, very low or extremely low income.
(20)
Predevelopment Costs--Reimbursable costs related
to a specific eligible housing project including:
(A)
Predevelopment housing project costs that the Department
determines to be customary and reasonable, including but not limited to consulting
fees, costs of preliminary financial applications, legal fees, architectural
fees, engineering fees, engagement of a development team, site control, and
title clearance;
(B)
Pre-construction housing project costs that the Department
determines to be customary and reasonable, including but not limited to, the
costs of obtaining firm construction loan commitments architectural plans
and specifications, zoning approvals, engineering studies and legal fees.
(C)
Predevelopment costs do not include general operational
or administrative cost.
(21)
Public Housing Authority--A housing authority
established under the Texas Local Government Code, Chapter 392.
(22)
Real Property--All land, including improvements and
fixtures and property of any nature appurtenant, or used in connection therewith,
and every estate, interest, and right, legal or equitable therein, including
leasehold interests, terms for years, and liens by way of judgment, mortgage
or otherwise.
(23)
Recipient--Community housing development organization,
nonprofit organization, for profit entity, local unit of government, or public
housing authority that is approved by the Department to receive and administer
housing trust funds in accordance with these rules.
(24)
Rural Project--A project located within an area which:
(A)
is situated outside the boundaries of a PMSA or MSA; or
(B)
is situated within the boundaries of a PMSA or MSA if it
has a population of not more than 20,000, and does not share boundaries with
an urbanized area; or
(C)
has received financing or has received a commitment for
financing from Texas Rural Development.
(25)
State--The State of Texas.
(26)
Total Bond Indebtedness--All single-family mortgage
revenue bonds (including collateralized mortgage obligations), multifamily
mortgage revenue bonds and other debt obligations issued or assumed by the
Department and outstanding as of August 31 of the year of calculation, excluding:
(A)
all such bonds rated Aaa by Moody's Investors Service or
AAA by Standard Poor's Corporation for which the Department has no direct
or indirect financial liability from the Department's unencumbered fund balances;
and
(B)
all other such bonds, whether rated or unrated, for which
the Department has no direct or indirect financial liability from the Department's
unencumbered fund balances, unless Moody's or Standard Poor's has advised
the Department in writing that all or a portion of the bonds excluded by this
clause should be included in a determination of total bond indebtedness.
(27)
Unencumbered Fund Balances--Uncommitted amounts
on deposit in each independent or separate unrestricted fund established by
the housing finance division or its administrative component units.
(28)
Very low Income Persons and Families--Persons and
families earning not more than 60% of the area median income as determined
by the United States Department of Housing and Urban Development, with allowances
for family size.
§51.5.Allocation of Housing Trust Funds.
(a)
Funds shall be allocated to achieve a broad geographical
distribution taking into account the number and percentage of low, very low,
and extremely low income persons and families in different geographical areas
of the State.
(b)
In allocating funds under the Housing Trust Fund, special
attention shall be paid to equitably serving the housing needs of low, very
low, and extremely low income persons and families residing in rural and non-metropolitan
areas.
(c)
No more than 10% of the housing trust funds allocated each
fiscal year shall be distributed to community housing development organizations
and nonprofit organizations for capacity building.
(d)
At least 35% of the housing trust funds allocated each
funding cycle shall be distributed to community housing development organizations.
This 35% will be based on the amount of funds remaining after funds identified
in subsection (c) of this section are allocated. In the event that there is
an insufficient number of qualifying applicants for this allocation, any remaining
funds will then be made available to other qualifying applicants, as outlined
in the eligibility section of the Program Guidelines as amended each program
cycle.
(e)
The Department shall utilize its best efforts to apply
at least 50% of the housing trust funds allocated each funding cycle to non-metropolitan
areas of the state.
(f)
No more than 10% of the yearly balance of the housing trust
fund may be used by the Department to acquire real property.
(g)
The Department shall utilize its best efforts to apply
at least 15% of the housing trust funds allocated each fiscal year to housing
assistance for individuals and families earning less than 30% of median family
income, and a minimum of 20% of the allocated funds for individuals and families
earning between 31 and 60% of median family income.
(h)
Bond indenture requirements governing expenditure of bond
proceeds deposited in the housing trust fund shall govern and prevail over
all other allocation requirements established in this section. However, the
Department shall distribute these funds in accordance with the requirements
of this section to the extent possible.
(i)
Not more than 10% of any biennium allocation of Housing
Trust Fund program funds may be set aside to create a pre-development loan
fund to be used as matching funds with outside funds.
§51.6.Basic Eligible Activities.
The Department shall make grants and loans from the Housing Trust to
Eligible Applicants for purposes consistent with § 51.2 of this title
(related to Program Goals and Objectives). Eligible uses of trust funds include,
but are not limited to the following:
(1)
To fund housing development costs for a housing project
or to provide down-payment assistance, rental assistance, credit enhancement,
direct loans and interest rate reduction assistance to low, very low, and
extremely low income persons and families, and persons with special needs.
(2)
To provide predevelopment costs for eligible housing
projects. Such assistance shall be provided in the form of a loan to be repaid
to the housing trust fund from construction loan proceeds or other project
income. The Board may waive repayment of the loan, in whole or in part, if
there are impediments to project development that the Board determines are
reasonably beyond the control of the applicant.
(3)
To provide for capacity building for community housing
development and nonprofit organizations that show sufficient evidence of having
strong community support and a strong likelihood of producing housing for
low, very low, and extremely low income persons and families within two years
of the date that assistance is provided. Where possible, the Recipient of
funds under this subsection will build in fees, or other ongoing sources of
income, into the services that they provide, so that repeated support will
not be needed.
§51.7.Ineligible Activities and Restrictions.
Any activity is ineligible for housing trust funds unless the activity
will result in the financing, acquisition, rehabilitation, or development
of affordable, decent, safe, and sanitary housing for low, very low, and extremely
low income persons or families, or will provide capacity building to community
housing development organizations and nonprofit organizations engaged in developing
housing for low, very low, and extremely low income persons and families.
Ineligible activities and restrictions include the following:
(1)
General Government Expenses. Housing trust funds may not
be used to carry out the regular responsibilities of the local unit of government.
(2)
Political Activities. Housing trust funds may not
be used to finance the use of facilities or equipment for political purposes
or to engage in other partisan political activities, such as candidate forums,
voter transportation, or voter registration.
(3)
Relocation and Prohibition against Involuntary Displacement.
Housing trust funds shall not be utilized on a project that has the effect
of permanently and involuntarily displacing low, very low, and extremely low
income persons and families. All such persons and families who are resident
tenants of a project development or building prior to the submission of a
Housing Trust Fund application must be provided the opportunity to lease and
occupy a suitable, decent, safe, sanitary and affordable dwelling unit in
the building or development upon completion of the project. The property owners
must provide all persons and families affected by project development with
the following:
(A)
Written notices of the right to remain or the need to relocate;
(B)
Payment of the costs of temporary relocation; and
(C)
Payments for those persons and families which are required
to move permanently.
(4)
Restriction on Affordability of Multifamily Housing.
Any multifamily housing developed or rehabilitated with housing trust funds,
in whole or in part, shall remain affordable to income-qualified households
for at least 20 years.
§51.8.Maintenance of Effort.
(a)
Housing Trust Fund monies shall not be used to supplant
or replace existing housing funds for housing for low, very low, and extremely
low income persons and families.
(b)
If other federal funds are available to a local unit of
government applicant for any proposed housing project, the local unit of government
applicant shall affirmatively show that it has undertaken reasonable efforts
to secure such funding for the proposed housing project.
§51.9.Application Procedure and Requirements.
(a)
The Department shall, from time to time, solicit applications
for loans and grants from Eligible Applicants.
(b)
Housing development applicants shall submit, in an application
form and process prescribed by the Department, project information including,
but not limited to:
(1)
A written description of the housing project including
but not limited to, the number of units, unit mix, roposed rents or mortgage
payments, site location, the proposed program of services to occupants and
the availability of these services in the future, project amenities, names
and addresses of all individuals with any financial interest in the proposed
housing project, personal and organizational financial statements and audit
reports, and any other information the Board may require;
(2)
A statement of housing project purpose indicating
the housing type and tenants or homeowners to be housed, and the length of
time the units will be committed available for low, very low, and extremely
low income households;
(3)
A statement describing the need for the proposed housing
development given existing housing and economic conditions in the service
area;
(4)
A projection of housing project expenses and income;
(5)
Grant or loan amount requested and total housing project
development costs, including a description of all committed or anticipated
project funding and funding sources, and a statement describing efforts to
secure other sources of funding, including federal funds and funds from private
sources;
(6)
A narrative describing the housing project sponsor/developer/owner/manager
experience in developing and operating housing projects;
(7)
A description of any temporary displacement resulting
from the proposed housing project, including a statement whether the housing
project has the effect of permanently and involuntarily displacing persons
and families of low income;
(8)
The geographical area of the state in which the project
will occur;
(9)
A narrative describing how the proposed project addresses
each of the evaluation factors listed in §51.10 of this title (relating
to Criteria for Funding);
(10)
The affirmative marketing plan of the housing project
sponsor on marketing to racial and ethnic minorities and person with special
needs;
(11)
Project completion schedule;
(12)
Non-discrimination statements.
(c)
An individual or family who is an Eligible Applicant shall
submit a request for funding in an application form and process prescribed
by the Department to include the items listed in subsection (b) of this section
that are relevant to individuals and persons applying for loans and grants.
(d)
Capacity building and technical assistance applicants will
be required to submit a specific application as outlined in the Program Guidelines
as amended each program cycle.
(e)
Rental assistance applicants will be required to submit
a specific application as outlined in the Program Guidelines as amended each
program cycle.
§51.10.Criteria for Funding.
(a)
In considering applications for funding, the Department
considers the following:
(1)
Threshold Criteria. To be considered for funding, a housing
project must first demonstrate that it meets each of the following threshold
criteria:
(A)
The project is consistent with the requirements established
in this rule.
(B)
The applicant provides evidence of its ability to carry
out the project in the areas of financing, acquiring, rehabilitating, developing
or managing affordable housing development.
(C)
The project addresses and identifies housing need. This
assessment will be based on statistical data, surveys and other indicators
of need as appropriate.
(2)
Evaluation Factors. The Board and Department
considers applications for housing trust funds using the following system:
(A)
Applications are evaluated against the threshold criteria
during each funding cycle. Applications not meeting the threshold criteria
are returned to the applicant without further review.
(B)
Applications are ranked according to the criteria hereinafter
set forth:
(i)
leveraging of funds: the extent to which the project will
leverage State funds with other resources, including federal resources, and
private sector funds;
(ii)
community involvement: the extent to which the project
involves a broad range of community representatives, including low, very low,
and extremely low income individuals who may expect to reside in the proposed
housing project, in the design and development of the proposed housing project;
(iii)
very low income targeting: the extent to which the project
will provide safe, decent and affordable housing to very low income persons
and families;
(iv)
long term affordability: the extent to which the project
will ensure the longest possible use of assisted units as affordable housing
for low, very low, and extremely low income persons and families;
(v)
housing need: the geographical area of the State to be
served and the extent to which there is a need for safe, decent, and affordable
housing in this area;
(vi)
special housing needs: the extent to which the project
provides affordable housing and services for persons with special needs;
(vii)
financial feasibility: the extent to which the project
is financially feasible, taking into consideration the contribution of housing
trust funds, as determined in accordance with generally accepted underwriting
standards as promulgated by federal insurers or other similar guarantors of
such projects;
(viii)
need for funds: the extent to which other resources
are not available in the locality to carry out the housing project;
(ix)
minority participation: the extent to which the project
has minorities and/or women participating in the ownership, development or
management of the project;
(x)
energy conservation: the extent to which the project design
promotes energy and/or water conservation with the result of reducing residents'
utility costs;
(xi)
innovation: the extent to which the project involves a
new or particularly innovative approach for meeting housing needs in the area
being served;
(xii)
services: the extent to which the project includes a
program of services for occupants of the proposed housing including, but not
limited to, programs that address home health care, mental health service,
alcohol and drug treatment, job training, child care and case management and
provides for tenant involvement in the development and administration of the
services;
(xiii)
cost-effectiveness: the extent to which the project
is cost-effective and provides the greatest number of affordable, decent,
safe and sanitary low, very low, and extremely low income housing units for
the least amount of housing trust funds expended or committed;
(xiv)
barriers to affordable housing: the extent to which local
governments propose to eliminate or reduce barriers to affordable housing
created by existing public policies, such as zoning regulations, building
permit requirements, etc.;
(xv)
geographic balance: the extent to which the project will
contribute to achieving a fair and equitable geographic distribution of housing
trust funds.
(C)
An application that does not meet the threshold criteria
may be revised and resubmitted for consideration in subsequent funding cycles.
(3)
The Department will not recommend an application
for funding if it includes a principal who is or has been:
(A)
Barred, suspended, or terminated from procurement in a
state or federal program and listed in the List of Parties Excluded from Federal
Procurement of Non-procurement Programs;
(B)
The subject of enforcement action under state or federal
securities law, or is the subject of an enforcement proceeding with a state
or federal agency or another governmental entity; or
(C)
If the applicant has unresolved compliance or audit findings
related to previous or current funding agreements with the Department.
(b)
The Department assigns a weight to the evaluation factors
in subsection (a)(2)(B) of this section and gives priority to funding applications
according to the weight assigned.
(c)
The Board has final approval on all recommendations for
funding.
(d)
Eligible Applicants that have been approved for funding
and that require a material change in the project description must provide
a written request for the material change to the Department prior to implementing
the change.
(1)
A material change may include, but is not limited to, the
following:
(A)
Change in project site;
(B)
Change in the number of units or set asides; and
(C)
Increase in funding.
(2)
Failure to comply with this subsection may result
in the termination of funding to the applicant.
(e)
The Executive Director of the Department may approve nonmaterial
changes in the project description and in the scope of work to be performed
for clarification and necessary administrative adjustments, provided that
any such change does not increase the dollar amount of the original award
of funds.
§51.11.Prohibition against Discrimination.
(a)
No person shall on the ground of race, color, family composition
(reasonable occupancy standards are cceptable), national origin or sex, be
excluded from participation in, be denied the benefits of, or be subjected
to discrimination under any program or activity funded in whole or in part
with housing trust funds made available under the Act.
(b)
Whenever the Department determines that a Recipient of
housing trust funds has failed to comply with subsection (a) of this section,
the Department shall attempt to secure compliance. If within a reasonable
period of time the Recipient fails to comply, the Department may:
(1)
refer the matter to the State Attorney General or the Texas
Commission on Human Rights, whichever is applicable and in accordance with
the laws of the State of Texas, with a recommendation that an appropriate
civil action be instituted; or
(2)
take such other action as may be provided by law.
§51.12.Other Program Requirements.
(a)
Employment opportunities.
(1)
No person shall be discriminated against on the basis of
race, color, disability, religion, sex, or national origin in all phases of
employment during the performance of contracts as assisted with housing trust
funds made available under the Act.
(2)
Contractors and subcontractors on Housing Trust Fund
assisted contracts shall take affirmative action to ensure fair treatment
in employment, upgrading, demotion, or transfer, recruitment or recruitment
advertising, layoff or termination, rates of pay or other forms of compensation
and selection for training or apprenticeship.
(3)
In connection with the planning and carrying out of
any project assisted under the Act, to the greatest extent feasible, opportunities
for training and employment shall be given to low, very low, and extremely
low income persons residing within the area in which the project is located.
(b)
Conflict of Interest.
(1)
Conflict Prohibited. No person described in paragraph (2)
of this subsection who exercises or has xercised any functions or responsibilities
with respect to Housing Trust Fund activities under the Act or who is in a
position to participate in a decision making process or gain inside information
with regard to such activities, may obtain a personal or financial interest
or benefit from a Housing Trust Fund assisted activity, or have an interest
in any Housing Trust Fund contract, subcontract or agreement or the proceeds
thereunder, either for themselves or those with whom they have family or business
ties, during their tenure or for one year thereafter.
(2)
Persons Covered. The conflict of interest provisions
of paragraph (1) of this subsection apply to any person who is an employee,
agent, consultant, officer, elected official or appointed official of the
Recipient.
(c)
Right to Inspect and Monitor.
(1)
The Department may, at any time, inspect and monitor the
records and the work of the project so as to ascertain the level of project
completion, quality of work performed, inventory levels of stored material,
compliance with the approval plans and specifications, property standards,
and program rules and requirements.
(2)
Any unsatisfactory findings in the inspection may
result in a reduction in the amount of funds requested or termination of funding.
(3)
Within 45 days of completion of any construction,
and before the release of any retainage funds, Recipients are required to
notify the Department of the completion by submitting a certificate of completion
and any other documents required by program guidelines, including, but not
limited to, the following:
(A)
Architect's Certification of Substantial Compliance;
(B)
Recipient's Certificate of Substantial Completion; and
(C)
Recipient's and supplier's Release of Lien and warrantee.
(4)
The Department performs a final close-out visit
and assists owners in preparing for long-term compliance requirements upon
completion of project development.
(d)
Compliance.
(1)
Recipient must maintain compliance with each of its written
agreements with the Department.
(2)
Restrictions are stated and enforced through a regulatory
agreement.
(3)
These restrictions include, but are not limited to
the following:
(A)
Rent restrictions;
(B)
Record keeping and reporting; and
(C)
Income targeting of tenants.
(4)
The Department monitors compliance with project
restrictions and any other covenants by Recipient in any Housing Trust Fund
agreement. An annual per unit compliance fee is charge for this review.
(5)
Prior to the leasing of any units, project owners
are provided guidance and training by the Department to assist project owners
in adhering to restriction and reporting requirements.
§51.13.Citizen Participation.
(a)
The Department holds at least one public hearing annually,
and additional public hearings prior to consideration of any proposed significant
changes to these rules, to solicit comments from the public, eligible applicants,
and Recipients on the Department's rule, guidelines, and procedures for the
Housing Trust Fund.
(b)
The Department considers the comments it receives at public
hearings. The Board annually reviews the performance, administration, and
implementation of the Housing Trust Fund in light of the comments it receives.
At this time the Board also reviews funding goals and set-asides established
in § 51.5 of this title (relating to Allocation of Housing Trust Funds).
(c)
Applications for housing trust funds are public information
and the Department shall afford the public an opportunity to comment on proposed
housing projects prior to making awards.
(d)
Applicants will be notified as to whether or not they are
being recommended for funding seven days prior to the date recommendations
are made to the Board. Applicants may appeal the funding recommendation to
the Board at the meeting of the Board at which the recommendations are presented.
(e)
Complaints will be handled in accordance with the Department's
complaint procedures of 10 TAC §1.2.
§51.14.Records To Be Maintained.
(a)
Recipients are required, at least on an annual basis, to
submit to the Department information including, but not limited to:
(1)
such information as may be necessary to determine whether
a project funded with housing trust is benefiting low, very low, and extremely
low income persons and families;
(2)
the monthly rent or mortgage payment for each dwelling
unit in each structure assisted with housing trust funds;
(3)
such information as may be necessary to determine
whether Recipients have carried out their housing activities in accordance
with the requirements and primary objectives of the housing trust fund and
implementing regulations;
(4)
The size and income of the household for each unit
occupied by a low, very low, or extremely low income person or family;
(5)
Data on the extent to which each racial and ethnic
group and single-headed households (by gender of household head) have applied
for and benefited from any project or activity funded in whole or in part
with housing trust funds made available under the Act. This data shall be
updated annually; and
(6)
A final statement of accounting upon completion of
the project.
(b)
Recipients shall maintain records pertinent to the tenant's
files for a period of at least three years.
(c)
Recipients shall maintain records pertinent to Housing
Trust Fund funding awards including but not limited to project costs and certification
work papers for a period of at least five years.
(d)
Recipient shall maintain records in an accessible location.
§51.17.Funding Cap.
No more than 25% of the housing trust funds may be allocated to any
single project for each/any calendar year.
§51.18.Waiver .
The Board may, in its discretion, waive any one or more of the rules
set forth in this chapter to accomplish its legislative mandates or for other
compelling circumstances.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on March 30, 2000.
TRD-200002283
Daisy A. Stiner
Executive Director
Texas Department of Housing and Community Affairs
Effective date: April 19, 2000
Proposal publication date: December 10, 1999
For further information, please call: (512) 475-3726
10 TAC §§51.4, 51.15, 51.16
The Texas Department of Housing and Community Affairs (the
Department) adopts the repeal of §§51.4; 51.15 - 51.16, without
changes, as published in the December 10, 1999, issue of the
Texas Register
(24 TexReg 11056) concerning the Housing Trust Fund
Rules.
The sections are repealed to provide clarification and corrections for
the allocation of Housing Trust funds.
No comments have been received regarding adoption of the repeals.
The repeal is adopted under the Texas Government Code, Chapter
2306, which provides the Texas Department of Housing and Community Affairs
with the authority to adopt rules governing the administration of the department
and its programs.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on March 30, 2000.
TRD-200002284
Daisy A. Stiner
Executive Director
Texas Department of Housing and Community Affairs
Effective date: April 19, 2000
Proposal publication date: December 10, 1999
For further information, please call: (512) 475-3726