10 TAC §§60.2 - 60.4, 60.6 - 60.13, 60.17, 60.18
The Department of Housing and Community Affairs (the Department)
proposes amendments to §§60.2 - 60.4, 60.6 - 60.13, 60.17, and 60.18,
concerning monitoring of compliance. Definitions required by other changes
are added to §60.2. The Department has determined new procedures regarding
monitoring of Housing Tax Credit developments after the extended use period
are needed and are added in §60.7. Provisions of 10 TAC §§1.11,
1.13, and 1.14, which are proposed for repeal, have been incorporated into
the compliance rules. Requirements for physical inspection reporting are clarified
in §60.12. Clarification of Utility Allowances is incorporated in §60.17.
Minor changes have been made to correct grammar, update formatting, and add
clarifying language.
Michael Gerber, Executive Director, has determined that for the first five-year
period the amendments as proposed will be in effect there will be no fiscal
implications for state or local government as a result of administering or
enforcing the amendments.
Mr. Gerber has also determined that for each year of the first five years
the amendments as proposed will be in effect the public benefit anticipated
as a result of the amendments will be more logically organized and readily
available rules for developers, management organizations, and tenants. There
is no additional anticipated cost to persons who are required to comply with
the amendments as proposed. There will be no adverse economic effect on small
or micro businesses.
Comments on the proposed amendments may be submitted in writing to Mike
Garrett, Compliance Monitor, Texas Department of Housing and Community Development,
P.O. Box 13941, Austin, Texas 78711-3941, or by e-mail to michael.garrett@tdhca.state.tx.us.
To be considered, a written comment must be received on or before the 31st
day after the date the proposed amendments are published in the
Texas Register.
Public hearings were held across the state between September 21 and October
18, 2006 to receive input on the proposed amended rules. Changes have been
made in response to comments received from the public and from the Department's
Board.
At the conclusion of the 31st day after the proposed amendments are published
in the
Texas Register,
no further written
comments will be considered or accepted by the commission.
The amendments are proposed under Texas Government Code, Chapter
2306.
No other code, article, or statute is affected by the proposed amendments.
§60.2.Definitions.
The following words and terms, when used in this section, shall have
the following meanings, unless the context clearly indicates otherwise.
(1)
Affordability Period--the affordability period commences
as specified in the
Land Use Restriction Agreement (LURA)
[
LURA
], or federal regulation or commences on the first day of the compliance
period as defined by §42(i)(1) of the Internal Revenue Code (IRC) and
continues through the appropriate program's affordability requirements or
termination of the LURA, whichever is later. The term of the affordability
period shall be imposed by LURA or other deed restriction and may be terminated
upon foreclosure. During this period the Department shall monitor to ensure
compliance with programmatic rules, regulations, and application representations.
(2)
Application--an application,
in the form prescribed by the Department, filed with the Department by an
Applicant, including any exhibits or other supporting material. (§2306.6702)
(3)
[
(2)
] Board--the governing board
of the Texas Department of Housing and Community Affairs.
(4)
Code--the U.S. Internal Revenue Code
of 1986, as amended from time-to-time, together with any applicable regulations,
rules, rulings, revenue procedures, information statements or other official
pronouncements issued by the United States Department of the Treasury or the
Internal Revenue Service.
(5)
[
(3)
] Department--the Texas Department
of Housing and Community Affairs, an official and public agency of the State
of Texas pursuant to Chapter 2306, Texas Government Code.
(6)
[
(4)
] Development--a property or
work or a project, building, structure, facility, or undertaking, whether
existing, new construction, remodeling, improvement, or rehabilitation, that
meets or is designed to meet minimum property standards required by the Department
and that is financed under the provisions of Chapter 2306, Texas Government
Code
.
[
, for the primary purpose of providing sanitary, decent,
and safe dwelling accommodations for rent, lease, use, or purchase by individuals
and families of low and very low income and families of moderate income in
need of housing. The term includes:
]
[
(A)
buildings, structures, land,
equipment, facilities, or other real or personal properties that are necessary,
convenient, or desirable appurtenances, including 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;]
[
(B)
single and multifamily dwellings
in rural, urban/exurban areas; and]
[
(C)
a proposed qualified low income
housing project, as defined by §42(g), of the IRC 1986 (26 U.S.C. §42(g)),
that consists of one or more buildings containing multiple units, that is
financed under a common plan, and that is owned by the same person(s) for
federal tax purposes, including a project consisting of multiple buildings
that are located on scattered sites and contain only rent-restricted units.]
(7)
Housing sponsor--
(A)
an individual, including an individual or family
of low and very low income or family of moderate income, joint venture, partnership,
limited partnership, trust, firm, corporation, or cooperative that is approved
by the department as qualified to own, construct, acquire, rehabilitate, operate,
manage, or maintain a housing Development, subject to the regulatory powers
of the department and other laws; or
(B)
in an economically depressed or blighted area,
or in a federally assisted new community located within a home-rule municipality,
the term may include an individual or family whose income exceeds the moderate
income level if at least 90% of the total mortgage amount available under
a mortgage revenue bond issue is designed for individuals and families of
low income or families of moderate income.
(8)
HTC Development--A Development
using Housing Tax Credits allocated by the Department.
(9)
[
(5)
] Low Income Unit--a unit that
is intended for occupancy by an income eligible household
, as defined
by the Department or the Code.
(10)
[
(6)
] Land Use Restriction Agreement
(LURA)--an agreement between the Department and the Development Owner which
is
a
binding
covenant
upon the Development Owner's successors
in interest, that encumbers the Development with respect to the requirements
of this chapter, Chapter 2306, Texas Government Code;
the Code
[
§42 of the IRC
]; and the requirements of the various programs administered
or funded by the Department.
(11)
[
(7)
] Material Noncompliance--
(A)
a
Housing Tax Credit Development
[
HTC development
] located within the state of Texas will be classified
by the Department as being in material noncompliance status if the noncompliance
score for such
Development
[
development
] is equal to
or exceeds a threshold of 30 points in accordance with the material noncompliance
provisions, methodology, and point system of this title [
or, if the HTC
development is located outside the state of Texas, and noncompliance is reported
to the Department that would be equal to or exceed a noncompliance threshold
score of 30 points if measured in accordance with the methodology and point
system set forth in this subsection
].
(B)
Non HTC Developments monitored by the Department
with 1 to 50 low income units will be classified as being in material noncompliance
status if the noncompliance score is equal to or exceeds a threshold of 30
points. Non HTC Developments monitored by the Department with 51 to 200 low
income units will be classified as being in material noncompliance status
if the noncompliance score is equal to or exceeds a threshold of 120 points.
Non HTC Developments monitored by the Department with 201 or more low income
units will be classified as being in material noncompliance status if the
noncompliance score is equal to or exceeds a threshold of 150 points.
(C)
For all programs, a Development will be in material
noncompliance if the noncompliance is stated in §60.18 of this chapter
to be material noncompliance.
Each Development will be scored for each
program for which funding was allocated by the Department.
(12)
Non HTC--any Development not
utilizing Housing Tax Credits.
(13)
[
(8)
] Unit--any residential rental
unit in a
Development
[
development
] consisting of an
accommodation, including a single room used as an accommodation on a non-transient
basis, that contains complete physical facilities and fixtures for living,
sleeping, eating, cooking, and sanitation.
§60.3.Development Inspections.
The Department[
, through PMC,
] shall conduct
or may
contract for
inspections during the construction and rehabilitation
process and at final construction completion to monitor for compliance with
all program requirements, including construction threshold criteria and application
Development characteristics associated with any Development funded or administered
by the Department. Development inspections will be conducted by the Department
or by an independent third party inspector acceptable to the Department and
will include a construction quality evaluation. (§2306.081, Texas Government
Code)
(1)
Inspection procedures for HTC Developments include:
(A)
A review of the evidence of commencement of substantial
construction. The minimum activity necessary to meet the requirement of substantial
construction for new Developments will be defined as having expended 10% of
the construction contract amount for the Development, adjusted for any change
orders, and as documented by both the most recent Application and Certification
for Payment (or equivalent) and the inspecting architect. The minimum activity
necessary to meet the requirement of substantial construction for rehabilitation
Developments will be defined as having expended 10% of the construction budget
as documented by the inspecting architect. Evidence of such activity shall
be provided in a format prescribed by the Department.
(B)
An
initial Development
[
interim development
] inspection to be conducted
between 45 to 90 days after the earlier
of the submittal or the due date of commencement of substantial construction.
[
within two years of the award.
]
(C)
A final Development inspection performed at construction
completion. Evidence of construction completion must be submitted within thirty
days of completion and shall be provided in a format prescribed by the Department.
(2)
Development inspection procedures for non-HTC multifamily
Developments include:
(A)
An initial
Development
[
development
]
inspection to be conducted
between 45 to 90 days from issuance of notice
to proceed.
[
within two years from award.
]
(B)
A final Development inspection performed at construction
completion. Evidence of completion must be submitted within thirty days of
completion and shall be provided in a format prescribed by the Department.
The inspection is required by the Department in order to release retainage.
(3)
The Department may require a copy of all reports from all
construction inspections performed on behalf of the Applicant as needed. Those
reports must indicate that the Department may rely on the information provided
in the reports
and the inspector is properly credentialed
.
(4)
Additional inspections may be conducted by the Department
or by an independent third party Inspector acceptable to the Department during
the construction process, if necessary, based on the level of risk associated
with the Development, as determined by the
Department. The Department
[
Real Estate Analysis Division or PMC. PMC
] identifies HTC
Developments to be at high risk if inspections identify issues with construction
threshold criteria
,
[
and
] Development characteristics
identified at application
or past performance problems
. The
Department
[
PMC
] identifies non-HTC Developments to be at
high risk if inspections conducted during the construction process identify
issues with program requirements or Development characteristics identified
at application.
(5)
Applicable Laws. An applicant
may not receive funds or other assistance from the Department until the Department
receives a properly completed certification from the applicant that the housing
development is, or will be upon completion of construction, in compliance
with the following housing laws:
(A)
state and federal fair housing laws, including
Chapter 301, Property Code, the Texas Fair Housing Act, Title VIII of the
Civil Rights Act of 1968 (42 U.S.C. §3601, et seq.), and the Fair Housing
Amendments of 1988 (42 U.S.C. §3601, et seq.);
(B)
the Civil Rights Act of 1964 (42 U.S.C. §2000a,
et seq.);
(C)
the Americans with Disabilities Act of 1990
(42 U.S.C. 12101, et seq.); and
(D)
Section 504, Rehabilitation Act of 1973 (29
U.S.C. §701, et seq.). (§2306.257)
[
(5)
Developments having financing
from the United States Department of Agriculture Rural Development (TX-USDA-RHS)
will be exempt from these inspections, provided that the Development Owner
provides to the Department copies of all inspections made by TX-USDA-RHS throughout
the construction of the Development.]
§60.4.Monitoring During the Affordability Period.
(a)
The Department will monitor
for
compliance
with representations made by the Development Owner in the Application and
in the LURA, whether required by the applicable program rules, regulations,
including HOME Final Rule,
the Code
[
§42 of the IRC, §142(d)
of the IRC, Treasury Regulations or other rulings of the IRS
], the U.
S. Department of Housing and Urban Development (HUD) Community Planning and
Development (CPD) Notices
, the Texas Government Code §2306.001 et.
seq., or
[
and
] Chapters 51 and 53 of this title.
(b)
The Department periodically
monitors Developments for compliance with the fair housing requirements specified
in §60.3(5) of this chapter. Monitoring may occur during construction
or during the affordability period.
(1)
The monitoring level for each housing Development
is based on the amount of risk of noncompliance with the requirements specified
in §60.3(5) of this chapter associated with the Development.
(2)
The Department shall notify the recipient in
writing of an apparent violation of fair housing laws and shall afford the
recipient a reasonable amount of time, as determined by the Department, to
correct the identified violation, if possible, prior to the imposition of
any sanction.
(3)
The Department shall notify the Texas Workforce
Commission, Civil Rights Division as required in the Texas Government Code §2306.257(d),
with a copy to the Development owner in the event:
(A)
no response to the Department's notice of apparent
violation is received during the response period;
(B)
the owner concurs with the Department's assessment
and indicates they are unable or unwilling to correct the violation(s); or
(C)
the owner and the Department are unable to agree
if the identified issue is a violation.
(4)
If fair housing violations are identified prior
to the issuance of forms 8609 (For HTC Developments) or release of final retainage,
no forms 8609 will be issued or retainage will not be released until the violations
are corrected to the Department's satisfaction.
(c)
Sanctions. The Department
may impose one or more of the following sanctions depending on the severity
of the violation of a law specified in §60.3(5) of this chapter, and
as further described in subsections (a) and (b) of this section, by a recipient
of housing tax credits, housing funds or other assistance from the Department:
(1)
termination of assistance,
(2)
deobligation of funds, if available, and
(3)
a bar on future eligibility for assistance through a housing
program administered by the Department. A bar shall be in place for at least
one calendar year from the date of imposition by the Department and may not
last for more than three calendar years from the date of correction.
§60.6.Section 8 Voucher Holders and Tenant Selection.
(a)
The Department will monitor to ensure
Development
[
development
] owners comply with [
§1.14
of this title regarding residents receiving rental assistance under Section
8, United States Housing Act of 1937 (42 U.S.C. §1437F).(
] §2306.269
and §2306.6728, Texas Government Code[
)
]
regarding residents
receiving rental assistance under Section 8, United States Housing Act of
1937 (42 U.S.C. §1437F)
.
(b)
Applicability. The policies,
standards, and sanctions established by this section apply only to:
(1)
multifamily housing Developments that receive
the following assistance from the Department on or after January 1, 2002:
(§2306.185)
(A)
a loan or grant in an amount greater than 33%
of the market value of the Development on the date the recipient took legal
possession of the Development; or
(B)
a loan guarantee for a loan in an amount greater
than 33% of the market value of the Development on the date the recipient
took legal title to the Development;
(2)
multifamily rental housing Developments that
applied for and were awarded housing tax credits after 1992.
(3)
housing Developments that benefit from the incentive
program under §2306.805 of the Texas Government Code.
(c)
Housing sponsors of multifamily
rental housing Developments described in subsection (b) of this section are
prohibited from:
(1)
excluding an individual or family from admission
to the Development because the individual or family participates in the housing
choice voucher program under Section 8, United States Housing Act of 1937
(42 U.S.C. §1437f); and
(2)
using a financial or minimum income standard
for an individual or family participating in the voucher program that requires
the individual or family to have a monthly income of more than 2.5 times the
individual's or family's share of the total monthly rent payable to the owner
of the Development. A household participating in the voucher program or receiving
any other type of rental assistance may not be required to have a minimum
income exceeding $2,500 per year.
(d)
To demonstrate compliance with
this section housing sponsors shall:
(1)
State in their leasing criteria that Section
8 voucher or certificate holders are welcome to apply and will be provided
the same consideration for occupancy as any other prospective tenant;
(2)
State in their leasing criteria that the Development
will comply with state and federal fair housing and antidiscrimination laws;
(3)
Apply all other screening criteria, including
employment policies or procedures and other leasing criteria (such as rental
history, credit history, criminal history, etc.) uniformly and in a manner
consistent with the Texas and Federal Fair Housing Acts, program guidelines,
and the Department's rules;
(4)
Approve and distribute an Affirmative Marketing
Plan. The Affirmative Marketing plan must be provided to the property management
and onsite staff. Housing Sponsors are encouraged to use HUD form 935.2 or
successors as applicable. The Affirmative Marketing Plan must identify methods
to market the property to persons with disabilities. Additionally, the Affirmative
Marketing plan must be displayed in the leasing office and available to the
public on request.
§60.7.Monitoring for [ of ] Compliance.
(a)
Monitoring after the Compliance
Period: Housing Tax Credit properties allocated credit in 1990 and after are
required under the Code (§42(h)(6)) to record an Extended Use Agreement
as part of the LURA restricting the property for 30 years. Section 42(i)(1)
defines the Compliance Period as the first 15 years of the extended use period.
Various sections of the Code specify monitoring rules State Housing Finance
Agencies must implement during the Compliance Period.
(b)
After the first 15 years of
the extended use period, the Department will continue to monitor Housing Tax
Credit Developments using the rules detailed in paragraphs (1) - (15) of this
subsection.
(1)
On site monitoring visits will continue to be
conducted approximately every three years, unless the Department determines
that a more frequent schedule is necessary.
(2)
In general, the Department will review 10% of
the low-income files. No less than 5 files and no more than 20 files will
be reviewed.
(3)
A minimum of five units will be inspected. Additional
units may be inspected if warranted by conditions discovered in the initial
units inspected.
(4)
A physical inspection of each unit shall be
conducted by the owner each year using criteria set forth in the Department
of Housing and Urban Development's Housing Quality Standards (HQS). Any deficiencies
must be corrected and copies of the inspections and verification of repairs
shall be maintained in the unit file.
(5)
An inspection of all common spaces, grounds,
building exteriors and building systems will be performed annually using HUD's
HQS. Deficiencies must be corrected and records of the corrections must be
maintained for review by Department staff.
(6)
Each Development shall submit an annual report
in the format prescribed by the Department.
(7)
Reports to the Department must be submitted
electronically as required in §60.9 of this chapter.
(8)
Compliance monitoring fees will continue to
be submitted to the Department annually in the amount stated in the LURA.
(9)
All households must be income qualified upon
initial occupancy of any low-income unit. Proper verifications of income are
required, and the Department's Income Certification form must be completed
unless the Development participates in the Rural Rental Housing Program or
a project based HUD program.
(10)
Rents will remain restricted for all low-income
units. The tenant paid portion of the rent plus the applicable utility allowance
must not exceed the applicable limit.
(11)
Owners and managers must continue to screen
households for income, assets, and household size on an annual basis. In addition,
an Income Certification form must be completed on an annual basis.
(12)
All additional income and rent restrictions
defined in the LURA remain in effect.
(13)
Other requirements defined in the LURA, such
as the provision of social services or serving special needs households, will
remain in effect unless specifically waived by the Department.
(14)
The owner shall not terminate the lease or
evict the resident or refuse to renew the lease except for material noncompliance
with the lease or other good cause.
(15)
The total number of required low income units
must be maintained Development wide.
(c)
After the first 15 years of
the extended use period, certain requirements will not be monitored as detailed
in paragraphs (1) - (5) of this subsection.
(1)
At recertification verification of income and
assets will not be required.
(2)
The student restrictions found in §42(i)(3)(D)
of the Code. An income qualified household consisting entirely of full time
students may occupy a low-income unit.
(3)
The requirement to treat transfers from building
to building as a new move in. Transfers within the Development will not require
household requalification.
(4)
The Available Unit Rule found in Treasury Regulation §1.42-15.
(5)
The building applicable fraction found in the
Development's Cost Certification and/or the LURA. Low income occupancy requirements
will be monitored Development wide, not building by building.
(d)
Unless specifically noted in
this section, all requirements of this Chapter 60 and §42 of the Internal
Revenue Code remain in effect for the Extended Use Period. These Post Year
15 Monitoring Rules apply only to the Housing Tax Credit Developments administered
by the Department. Participation in other programs administered by the Department
may require additional monitoring to ensure compliance with the requirements
of those programs.
(e)
The Department may contract with an independent
third party to monitor a Development during construction or rehabilitation
and during operation for compliance with any conditions imposed by the Department
in connection with funding or other Department oversight and appropriate state
and federal laws, as required by other state law or by the Board. (§2306.6719,
Texas Government Code).
§60.8.Recordkeeping.
All Development Owners must comply with program recordkeeping requirements.
Records must include sufficient information to comply with the Reporting requirements
of §60.9 of this chapter and any additional programmatic requirements.
Records
[
In addition, records including items listed in paragraphs
(1) - (12) of this section
] must be kept for each qualified low income
rental unit and building in the Development, commencing with lease up activities
and continuing on a monthly basis until the end of the affordability period.
Housing Tax Credit owners should refer to Treasury Regulation 1.42-5 for more
information about record keeping requirements.
[
The Department requires
any reports to be submitted electronically and in the format prescribed by
the Department. Records must include:
]
[
(1)
the total number of residential
rental units in the Development, including the number of bedrooms;]
[
(2)
the move in and move out date
for each residential rental unit in the Development;]
[
(3)
which residential rental units
are low income units and the income level of the residents broken into 30,
40, 50, 60, or 80 percent of the area median income;]
[
(4)
the rent charged for each
residential rental unit including, with respect to low income units, documentation
to support the utility allowance applicable to such unit and any rental assistance
received;]
[
(5)
the number of occupants in
each low income unit;]
[
(6)
the low income rental unit
vacancies and information that shows when and to whom all available units
were rented;]
[
(7)
the annual income certification
of each tenant of a low income unit, in the form designated by the Department,
as may be modified from time to time;]
[
(8)
documentation to support each
low income tenant's income certification, consistent with the determination
of annual income and verification procedures under Section 8 of the United
States Housing Act of 1937 (Section 8);]
[
(9)
the total number of units,
reported by bedroom size, designed for individuals who are physically challenged
or who have special needs and the number of these individuals served annually;]
[
(10)
the race and ethnicity of
the residents of each Development;]
[
(11)
the number of units occupied
by households receiving government-supported housing assistance and the type
of assistance received; and]
[
(12)
any additional information
as required by the Department.]
§60.9.Reporting.
(a)
Each Development shall submit reports as required
by the Department. Each Development that receives financial assistance or
is administered by the Department, including the FDIC's
Affordable Housing
Program (AHP)
[
AHP
], shall submit the information required
under this
section
[
Section
] which describes the Annual
Owner's Compliance Report (AOCR) required by §2306.0724, Texas Government
Code. The Department requires this information be submitted electronically
and in the format prescribed by the Department.
Section 60.10
[
1.11
] of this
chapter
[
title
] contains
rules
[
procedures
] regarding filing and penalties for failure
to file reports.
The first AOCR is due the year following award.
(b)
[
(1)
] Part A, the ''Owner's Certification
of Program Compliance''; Part B, the ''Unit Status Report''; and Part C, ''Tenant
Services Provided Report'' of the AOCR, must be provided to the Department
no later than March 1st of each year, reporting data current as of
December
31 of the previous year (the reporting year)
[
January 1 of each
reporting year
]. Part D, ''Owner's Financial Certification'', which
includes the current audited financial statements and income and expenses
of the Development for the prior year, shall be delivered to the Department
no later than the last day in April each year. A full description of the AOCR
is contained in §60.10 of this chapter.
(c)
[
(2)
] The Department maintains the
information reported by the AOCR pursuant to §2306.0724(c), Texas Government
Code in electronic and hard-copy formats available at no charge to the public.
(d)
[
(3)
] Rental
Developments
[
developments
] funded or administered by the Department, including HOME,
Housing Trust Fund (HTF)
[
HTF
], the FDIC's AHP, and any other
rental programs funded or administered
through
[
by
]
the Department shall provide tenant information provided on Part B, ''Unit
Status Report,'' at least quarterly during lease up and until occupancy requirements
are achieved. Once the Department has determined that all occupancy requirements
are satisfied, the Development shall submit the Unit Status Report at least
annually and as required by this section.
(e)
[
(4)
] Developments financed by tax
exempt bonds issued by the Department shall report quarterly throughout the
Qualified Project Period unless notified by the Department of a change in
the reporting frequency.
(f)
[
(6)
] Information regarding housing
for persons with disabilities. Owners of state or federally assisted housing
Developments
[
developments
] with 20 or more housing units
must report information regarding housing units designed for persons with
disabilities pursuant to §2306.078, Texas Government Code. This information
will be reported on the Department's website and will include the following:
(1)
[
(A)
] the name, if any, of the
Development
[
development
];
(2)
[
(B)
] the street address of the
Development
[
development
];
(3)
[
(C)
] the number of housing units
in the
Development
[
development
] that are designed for
persons with disabilities and that are available for lease;
(4)
[
(D)
] the number of bedrooms in each
housing units designed for a person with a disability;
(5)
[
(E)
] the special features that characterize
each housing unit's suitability for a person with a disability;
(6)
[
(F)
] the rent for each housing unit
designed for a person with a disability; and
(7)
[
(G)
] the telephone number and name
of the
Development
[
development
] manager or agent to
whom inquiries by prospective tenants may be made.
(g)
[
(5)
] The Department requires all
Owners of properties administered by the Department to submit the Unit Status
Report in the electronic format developed by the Department. The Electronic
Compliance Reporting Filing Agreement and the Owner's Designation of Administrator
of Accounts forms must be filed no later than January 31st of the year following
the award. The Department will provide general instruction regarding the electronic
transfer of data. The Department may, at its discretion, waive the online
reporting requirements. In the absence of a written waiver, all
Developments
[
developments
] are required to submit
Reports
[
the Unit Status Report
] online.
(h)
Data submitted to the Department
by the owner of a Development that contains relevant information pursuant
to §2306.072(c)(6) and §2306.0724 of the Texas Government Code shall
at a minimum include:
(1)
the street address and municipality or county
in which the property is located;
(2)
the telephone number of the property management
or leasing agent;
(3)
the total number of units, reported by bedroom
size;
(4)
the move in and move out date for each residential
rental unit in the Development;
(5)
the number of occupants in each low income unit;
(6)
the total number of units, reported by bedroom
size, designed for individuals who are physically challenged or who have special
needs and the number of these individuals served annually;
(7)
the rent for each type of rental unit, reported
by bedroom size;
(8)
the race or ethnic makeup of the residents of
each project;
(9)
the number of units occupied by individuals
receiving government-supported housing assistance and the type of assistance
received;
(10)
the number of units occupied by individuals
and families of extremely low income, very low income, low income, moderate
income, and other levels of income, reported as 30, 40, 50, 60 or 80% of the
area median income;
(11)
a statement as to whether the property has
been notified of a violation of the fair housing law that has been filed with
the United States Department of Housing and Urban Development, the Civil Rights
Division of the Texas Workforce Commission, or the United States Department
of Justice;
(12)
a statement as to whether the Development has
any instances of material noncompliance with bond indentures or deed restrictions
discovered through the normal monitoring activities that include meeting occupancy
requirements or rent restrictions imposed by deed restriction or finance agreements;
and
(13)
the annual number of low income unit vacancies
and information that shows when and to whom available units were rented.
§60.10.Annual Owner's Compliance Report Certification and Review.
(a)
On or before February 1st of each year of the
Affordability
Period
[
affordability period
], the Department will send [
each rental Development Owner
] a reminder that the
Report required
by §2306.0724 of the Texas Government Code (to be titled the Annual Owner's
Compliance Report (AOCR)
[
AOCR
] must be completed by the
Owner and submitted to the Department on or before the applicable deadline.
This reminder may be sent via email or by posting on the Department's website.
The Department requires the AOCR to be submitted electronically. The
AOCR shall consist of:
(1)
Part A, ''Owner's Certification of Program Compliance'';
(2)
Part B, ''Unit Status Report'';
(3)
Part C, ''Tenant Services Provided Report''; and
(4)
Part D, ''Owner's Financial Certification''.
[
(b)
Penalties and sanctions are
assessed in accordance with §1.11(d) of this title for failure to provide
the AOCR in part or entirety, including administrative penalties and denial
of future requests for Department funding.]
(b)
[
(c)
] Any Development for which the
AOCR, Part A, ''Owner Certification of Program Compliance,'' is not received
or is received past the due date will be considered not in compliance with
these rules. If Part A is incomplete, improperly completed or not signed by
the Development Owner, it will be considered not received and not in compliance
with these rules. The Department will report to the IRS via form 8823, Low-Income
Housing Credit Agencies Report of noncompliance or Building Disposition, any
HTC
Development
[
development
] that fails to comply with
this section. The AOCR Part A shall include at a minimum the following statements
by the Development Owner:
(1)
the Development met the minimum set aside test which was
applicable to the Development;
(2)
there was no change in the Applicable Fraction or low income
set aside of any building, or if there was such a change, the actual Applicable
Fraction is reported to the Department (HTC only);
(3)
the Development Owner has received an annual income certification
from each low income resident and documentation to support that certification,
in the manner and form required by the Department's Compliance Manual(s),
as may be amended from time to time;
(4)
documentation is maintained to support each low income
tenant's income certification, consistent with the determination of annual
income and verification procedures under Section 8 of the United States Housing
Act of 1937 (Section 8), notwithstanding any rules to the contrary for the
determination of gross income for federal income tax purposes. In the case
of a tenant receiving housing assistance payments under Section 8, the documentation
requirement is satisfied if the public housing authority provides a statement
to the Development Owner declaring that the tenant's income does not exceed
the applicable income limit under §42(g) of the IRC as described in the
Compliance Manual(s);
(5)
each low income unit in the Development was rent-restricted
under the LURA and applicable program regulations, including §42(g)(2)
of the IRC, or 24 CFR Part 92, and the owner maintained documentation to support
the utility allowance applicable to such unit;
(6)
all low income units in the Development are and have been
for use by the general public and used on a non-transient basis (except for
transitional housing for the homeless provided under §42(i)(3)(B)(iii))
of the IRC (HTC and BOND only);
(7)
no finding of discrimination under the Fair Housing Act,
42 U.S.C. 3601-3619, has occurred for this Development. A finding of discrimination
includes an adverse final decision by the Secretary of HUD, 24 CFR 180.680,
an adverse final decision by a substantially equivalent state or local fair
housing agency, 42 U.S.C. 3616a(a)(1), or an adverse judgment from a federal
court;
(8)
each unit or building in the Development is, and has been,
suitable for occupancy, taking into account Uniform Physical Condition Standards
(UPCS) (24 CFR 5.703) or local health, safety, and building codes, and the
state or local government unit responsible for making building code inspections
did not issue a report of a violation for any building or low income unit
in the Development during this reporting period. If a violation report or
notice was issued by the governmental unit during this reporting period, the
Development Owner must provide the Department with a copy of the violation
report or notice. In addition, the Development Owner must state whether the
violation has been corrected;
(9)
each unit has been inspected annually and each unit meets
conditions set by HUD Housing Quality Standards (HOME only);
(10)
there has been no change in the Eligible Basis (as defined
by
the Code
[
§42(d) of the IRC
]) for any building
in the Development since the last certification or, if change(s), the nature
of the change (HTC only);
(11)
all tenant facilities included in the original application,
such as swimming pools, other recreational facilities, washer/dryer hook ups,
appliances and parking areas, were provided on a comparable basis to any tenants
in the Development;
(12)
Residents have not been charged for the use of any nonresidential
portion of the building that was included in the building's Eligible Basis
under
the Code
[
§42(d) of the IRC
] (HTC only);
(13)
if a low income unit in the Development became vacant
during the year, reasonable attempts were made, or are made, to rent that
unit or the next available unit of comparable or smaller size to a qualifying
low income household before any other units in the Development were, or will
be, rented to non low income households (HTC and BOND only);
(14)
if the income of tenants of a low income unit in the Development
increased above the appropriate limit allowed, the next available unit of
comparable or smaller size was, or will be, rented to residents having a qualifying
income;
(15)
a LURA including an Extended Low Income Housing Commitment
as described in §42(h)(6) of the
Code
[
IRC
] was
in effect for buildings subject to §7108(c)(1) of the Omnibus Budget
Reconciliation Act of 1989, 103 Stat. 2106, 2308 - 2311, including the requirement
under §42(h)(6)(B)(iv) of the
Code
[
IRC
], that
a Development Owner cannot refuse to lease a unit in the Development to an
applicant because the applicant holds a voucher or certificate of eligibility
under Section 8 of the United States Housing Act of 1937, 42 U.S.C. 1437f
(for buildings subject to §1314c(b)(4) of the Omnibus Budget Reconciliation
Act of 1993, 107 Stat. 312, 438 - 439) (HTC only);
(16)
the Development Owner has not been notified by the IRS
that the Development is no longer ''a qualified low income housing Development''
within the meaning of
the Code
[
§42 of the IRC
]
(HTC only);
(17)
if the Development Owner is required to be a Qualified
Nonprofit Organization under §42(h)(5)
of the Code
[
IRC
], that a Qualified Nonprofit Organization owned an interest in and
materially participated in the operation of the Development within the meaning
under §469(h) of the
Code
[
IRC
] (HTC only);
(18)
no low income units in the Development were occupied by
ineligible full time student households (HTC and BOND only);
(19)
no change in the ownership of the Development has occurred
during the reporting period or changes and transfers were or are reported;
(20)
the Development met all representations of the Development
Owner in the Application and complied with all terms and conditions which
were recorded in the LURA;
(21)
the Development has made all required lender deposits,
including annual reserve deposits;
(22)
the street address and municipality or county in which
the Development is located;
(23)
the name, address, contact person, and telephone number
of the property management or leasing agent;
(24)
that no tenants in low-income units were evicted or had
their tenancies terminated, including non-renewal of a lease, other than for
good cause and that no tenants had an increase in the gross rent with respect
to a low-income unit not otherwise permitted under
the Code
[
§42 of the IRC
] (HTC and HOME only);
(25)
The name and mailing address
of the syndicator and lender (HTC only);
(26)
[
(25)
] any additional information
as required by the Department.
(c)
[
(d)
] Review. Department staff will
review Part A of the AOCR for compliance with the requirements of the appropriate
program including
the Code
[
§42 of the IRC
].
(d)
Sanctions.
(1)
If the report is not received on or before March
1, a notice of noncompliance will be sent to the owner specifying a reasonable
amount of time, as determined by the Department, to submit the report prior
to the imposition of any sanction.
(2)
If the report is not received on or before the
corrective action deadline the Department shall:
(A)
For all HTC properties, issue form 8823 notifying
the Internal Revenue Service of the violation.
(B)
For all properties, score the noncompliance
in accordance with §60.18 of this chapter.
(3)
In addition, in accordance with the provisions
of §2306.0724 of the Texas Government Code, the Executive Director of
the Department may assess and enforce the following sanctions against a housing
sponsor who fails to submit the AOCR on or before March 1 of each year. These
sanctions will only be assessed for multiple, consistent and/or repeated violations
of failure to submit the AOCR by March 1 of each year.
(A)
Impose a late processing fee in an amount equal
to $1,000;
(B)
Subject the Housing Sponsor to 10 TAC §1.13;
or
(C)
An HTC Development that three years in a row
fails to submit required information to the Department may be reported to
the Internal Revenue Service as no longer in compliance and never expected
to comply.
§60.11.Record Retention Provisions.
(a)
Each Development that is administered by the
Department including the FDIC's AHP is required to retain the records as required
by the specific funding program rules and regulations. In general, retention
schedules include but are not limited to the provision of
subsections
(b) - (e)
[
paragraphs (1) - (4)
] of this section.
(b)
[
(1)
] HTC records, as described in §60.8
of this chapter, must be retained for at least six years after the due date
(with extensions) for filing the federal income tax return for that year;
however, the records for the first year of the Credit Period must be retained
for at least six years beyond the due date (with extensions) for filing the
federal income tax return for the last year of the Compliance Period of the
building.
(c)
[
(2)
] Retention of records for HOME
rental
Developments
[
developments
] must comply with
the provisions of 24 CFR 92.508(c) which generally requires retention of rental
housing records for five years after the affordability period terminates.
(d)
[
(3)
]
Housing Trust Fund (HTF)
[
HTF
] rental
Developments
[
developments
] must retain tenant files for at least three years beyond the date
the tenant moves from the
Development
[
development
].
Records pertinent to the funding of the award, including but not limited to
the application, development costs and documentation, must be retained for
at least five years after the affordability period terminates.
(e)
[
(4)
] Other rental Developments funded
or administered in whole or in part by the Department must comply with record
retention requirements as required by rule or deed restriction.
§60.12.Inspection Provision.
(a)
The Department retains the right to perform
an on-site inspection of any low income 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 any Extended Low Income Housing Commitment, whichever is later.
(b)
[
(1)
] The Department will perform
on-site inspections and file reviews of each low income Development. The Department
will conduct 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. The Department will schedule the first review of all other Developments
as leasing commences. Subsequent reviews will occur at least once every three
years during the
Affordability Period
[
compliance period
].
The Department will monitor
a sampling
[
at least 15%
]
of the low income resident files in each Development, and review the income
certifications, the documentation the Development Owner has received to support
the certifications, the rent records and any additional information that the
Department deems necessary. The Department will also conduct a physical inspection
of the Development including the exterior of the
Development
[
development
], development amenities, and an interior inspection of a
sample of units.
(c)
[
(2)
] The Department may, at the
time and in the form designated by the Department, require the Development
Owners to submit 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.
(d)
[
(3)
] 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 records, or a particular
year will be inspected or reviewed. However, the Department will give reasonable
notice to the Development Owner that an on-site 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.
(e)
[
(4)
] The Department will conduct
a limited inspection for compliance with accessibility requirements under
the Fair Housing Act or §504 of the Rehabilitation Act of 1973. If determined
necessary the Department may make referrals to appropriate federal and state
agencies or order third-party inspections to be paid for by the Development
owner.
(f)
[
(5)
] Exception: The Department may,
at its discretion, enter into a Memorandum of Understanding with the TX-USDA-RHS,
whereby the TX-USDA-RHS agrees to provide to the Department information concerning
the income and rent of the tenants in buildings financed under its Section
515 program. Owners of such buildings may be exempted from the inspection
provisions; however, if the information provided by TX-USDA-RHS is not sufficient
for the Department to make a determination that the income limitation and
rent restrictions are met, the Development Owner must provide the Department
with additional information, or the Department will inspect according to the
provisions contained herein. TX-USDA-RHS Developments satisfy the definition
of Qualified Elderly Development if they meet the definition for elderly used
by TX-USDA-RHS, which includes persons with disabilities.
§60.13.Inspection Standard.
(a)
Developments must be maintained
to be decent, safe, sanitary and in good repair throughout the affordability
period. For all programs, the Department will use HUD's Uniform Physical Condition
Standards (UPCS) to determine compliance with property condition. In addition,
Developments must comply with all local heath, safety, and building codes.
The Department may contract with a third party to complete UPCS inspections.
HTC Developments that fail to comply with local codes or UPCS must be reported
to the IRS.
(b)
To determine compliance with property condition
standards the Department
will
[
shall
] review any local
health, safety, or building code violation reports, or notices in the absence
of local health, safety and building code violation reports. If deemed necessary
by the Department, inspections by third-party inspectors may be requested
and will be relied upon to determine compliance with property condition standards.
In addition to the review of any local health, safety or building code violation
reports, the Department may conduct inspections of the units using HUD's Housing
Quality Standards or UPCS and may use those standards to determine compliance
with property condition standards. Developments must be maintained to be decent,
safe, sanitary and in good repair throughout the affordability period. HTC
Developments that fail to comply with local codes or UPCS must be reported
to the IRS.
(c)
The Department will evaluate
UPCS reports in the following manner:
(1)
A finding of Major Violations will be assessed
if:
(A)
Any life threatening health, safety, or fire
safety hazards are reported on the Notification of Exigent and Fire Safety
Hazards Observed form in any building exterior, building system, common area,
site, or dwelling unit; or
(B)
25% or more of buildings or dwelling units inspected
have the same reported health or safety deficiencies
(2)
A finding of Minor Violations will be assessed
if:
(A)
The same Level two or Level three deficiency
(not a health or safety deficiency) is listed for 25% or more of the buildings
or dwelling units inspected; or
(B)
An overall UPCS score of less than 60% (59%
or below) is reported.
(3)
Findings of both Major and Minor Violations
may be assessed if deficiencies reported meet the criteria for both.
(4)
Property representatives will have an opportunity
to correct deficiencies while the inspector is on site. Such corrected items
will not be assessed a finding unless there is a pattern of the same violation
(25% or more of dwelling units or buildings inspected with the same deficiency).
(5)
Acceptable evidence of correction of deficiencies
is a certification from an appropriate licensed professional that the item
now complies with the inspection standard or other documentation that the
violation has been corrected.
(6)
For Developments with no findings of Major or
Minor Violations, the review letter will state that the owner is responsible
for correcting any items noted in the report. However, the letter will not
require the owner to report back that the items have been cured.
(7)
If there are findings of noncompliance, the
Department will provide a standard 90 day corrective action period. The Department
will grant up to an additional 90 day extension if there is good cause and
the owner clearly requests an extension.
§60.17.Utility Allowances.
(a)
The Department will monitor to determine if HTC and BOND
properties comply with published rent limits, which include an allowance for
utilities. If residents are responsible for some or all utilities, Development
owners must use a Utility Allowance that complies with §1.42-10 of the
IRC. [
If there is more than one entity (Section 8 administrator, public
housing authority) responsible for setting the utility allowance(s) in the
area of the Development location, then the Utility Allowance selected must
be the one which most closely reflects the actual utility costs in that Development
area. In this case, documentation from the local utility provider supporting
the selection must be provided.
]
(b)
Properties within the operational
area of a municipal housing authority must use the allowance issued by that
municipal housing authority if they select the PHA method for establishing
a utility allowance. (See Local Government Code Chapter 392)
(c)
Properties outside the operational
area of a municipal housing authority and within the operational area of a
county housing authority must use the utility allowance issued by the county
housing authority if they select the PHA method for establishing a utility
allowance. (See Local Government Code Chapter 392)
(d)
[
(b)
] The Department will monitor
to determine if HOME and HTF Developments comply with published rent limits,
which include an allowance for utilities. Unless otherwise approved by the
Department, HOME and HTF Developments must use the utility allowance established
by the applicable housing authority. Changes in utility allowances must be
implemented on the published effective date.
(e)
HTC developments that elect
to use a written local estimate must obtain a written update within one year
of the last written update. Developments that fail to obtain an update will
be monitored using the applicable Public Housing Authority allowance 90 days
after the written local estimate expires.
(f)
If the applicable Public Housing
Authority adopts an ''energy efficient'' utility allowance and an allowance
for all other properties, the ''energy efficient'' allowance is valid until
the applicable Public Housing Authority adopts new allowances. If the applicable
Public Housing Authority subsequently adopts an allowance without regard for
energy efficiency, the Development must implement that allowance within 90
days of the change.
(g)
If the applicable Public Housing
Authority lists flat fees for any utility, those flat fees must be included
in the calculation of the utility allowance if the resident is responsible
for that utility. This does not apply if the Development uses a written local
estimate in accordance with Treasury Regulation 1.42-10.
§60.18.Material Noncompliance.
(a)
For all programs, a Development will be in material
noncompliance if the noncompliance is stated in this section to be material
noncompliance. Developments with more than one program administered by the
Department will be scored by program. The Development will be considered in
material noncompliance if the score for any single program exceeds the noncompliance
limit for that program. The Department may take into consideration the representations
of the Applicant regarding compliance violations; however, the records of
the Department are controlling.
(b)
[
(1)
] Each
Development
[
development
] that is funded or administered by the Department will be
scored according to the type and number of noncompliance events as it relates
to the HTC program or other Department programs. All Developments, regardless
of status, that are or have been administered, funded, or monitored by the
Department are scored even if the
Development
[
development
] no longer actively participates in the program. Unless otherwise specified
below, under the HTC program, noncompliance events issued on Form 8823 are
assigned point values. For other programs administered by the Department,
unless otherwise specified below, noncompliance events identified during on-site
monitoring reviews are assigned point values.
(c)
[
(2)
] Uncorrected noncompliance
, if applicable to the Development,
will carry the maximum number of
points until the noncompliance event has been reported corrected by the Department.
Once reported corrected by the Department, the score will be reduced to the
''corrected value''. Corrected noncompliance will no longer be included in
the Development score three years after the date the noncompliance was reported
corrected by the Department.
(1)
[
(A)
] Under the HTC program, noncompliance
events that occurred and were identified by the Department through the issuance
of the IRS Form 8823 prior to January 1, 1998, are assigned corrected point
values to each noncompliance event. The score for these events will no longer
be included in the Development's score.
(2)
[
(B)
] The score in effect on May
1st of the year the HTC program application is submitted, during final application
for Developments applying for participation in the BOND program, HOME program
or HTF program, or during application review of any other program funded or
administered by the Department will determine if any
Development
[
rental development
] disclosed on previous participation forms is in
material noncompliance.
(3)
[
(C)
] The Department will not execute
a Carryover Allocation Agreement with any Owner in Material Noncompliance
on October 1,
2007
[
2006
].
(4)
[
(D)
] Any corrective action documentation
affecting the compliance status score must be received by the Department thirty
days prior to the
application deadline for HTC applications,
[
date the HTC program Application Round closes,
] thirty days prior to
the submission of Volume I of the application for a BOND Development, or thirty
days before the submission of an application for any other program funded
or administered by the Department.
(5)
The Department will not approve
the transfer of ownership of any property regulated by the Department to a
party in Material Noncompliance.
(d)
A Development's score will
be reduced by the number of points needed to be one point under the Material
Noncompliance threshold under the following circumstances:
(1)
the Development has no uncorrected issues of
noncompliance, and
(2)
all issues of noncompliance were corrected during
the corrective action period, and
(3)
all corrective action documentation was provided
to the Department during the corrective action period.
(e)
treatment of previously owned
Developments during a Previous Participation review.
(1)
The Department will not take into consideration
the score of a Development transferred by the applicant over three years ago.
(2)
If the property was transferred less than three
years ago, the Department will determine the score for the noncompliance events
with a date of noncompliance identified during the applicant's period of ownership.
If the points associated with the noncompliance events identified during the
applicant's period of ownership exceed the threshold for Material Noncompliance,
the application will not be recommended.
(f)
[
(3)
] Events of noncompliance are
categorized as either ''development events'' or ''unit/building events''.
Development events of noncompliance affect some or all the buildings in the
Development
[
development
]; however, the
Development
[
development
] will receive only one score for the event rather than a
score for each building. Other types of noncompliance are identified individually
by unit. This type of noncompliance will receive the appropriate score for
each unit cited with an event. The unit scores and the
Development
[
development
] scores accumulate towards the total score of the Development.
Violations under the HTC program are identified by unit; however, the building
is scored rather than the unit and the building will receive the noncompliance
score if one or more of the units are in noncompliance.
(g)
[
(4)
] Each type of noncompliance
is assigned a point value. The point value for noncompliance is reduced upon
correction of the noncompliance. The scoring point system and values are as
described in
subsections (h) and (i) of this section
[
subparagraphs
(A) and (B) of this paragraph
]. The point system weighs certain types
of noncompliance more heavily than others; therefore certain noncompliance
events automatically place the
Development
[
development
]
in Material Noncompliance. However, other types of noncompliance
,
by
themselves
,
do not warrant the classification of Material Noncompliance.
Multiple occurrences of these types of noncompliance events may produce enough
points to cause the
Development
[
development
] to be
in Material Noncompliance.
(h)
[
(A)
] Development Noncompliance items
are identified in
paragraphs (1) - (27) of this subsection
[
clauses (i) - (xviii) of this subparagraph
].
(1)
[
(i)
] Major property condition violations.
The
property condition does not meet Uniform Physical Condition Standards
as described in §60.13 of this chapter or
[
development
]
displays major violations of health, safety and building codes. Uncorrected,
this is material noncompliance. Uncorrected is equal to the material noncompliance
status threshold score as defined in
§60.2(11)
[
(7)
]
of this chapter. Corrected is 10 points.
(2)
[
(ii)
] Owner refused to lease to
a holder of rental assistance certificate/voucher because of the status of
the prospective tenant as such a holder. Uncorrected, this is material noncompliance.
Uncorrected is equal to the material noncompliance status threshold score
as defined in
§60.2(11)
[
(7)
] of this chapter. Corrected
is 10 points.
(3)
[
(iii)
] Development is not available
to general public. The IRS will be notified of HTC
Developments
[
developments
] reported to the Department, according to the Memorandum
of Understanding among the U.S. Department of Treasury, the Department of
Housing and Urban Development, and the Department of Justice, to be under
investigation of possible violations of the Fair Housing Act. No points are
imposed.
(4)
[
(iv)
] Determination of a violation
under the Fair Housing Act. Uncorrected, this is material noncompliance. Uncorrected
is equal to the material noncompliance status threshold score as defined in
§60.2(11)
[
(7)
] of this chapter. Corrected is 10 points.
(5)
[
(v)
] Development is out of compliance
and never expected to comply. Uncorrected, this is material noncompliance.
Uncorrected is equal to the material noncompliance status threshold score
as defined in
§60.2(11)
[
(7)
] of this chapter. No
correction is possible; no corrected score assigned.
(6)
[
(vi)
] Owner failed to pay fees or
allow on-site monitoring review. Points will be assigned to this event after
written notification to the Development owner. Uncorrected, this is material
noncompliance. Uncorrected is equal to the material noncompliance status threshold
score as defined in
§60.2(11)
[
(7)
] of this chapter.
Corrected is 5 points.
(7)
[
(vii)
] LURA not in effect. The LURA
was not executed within the required time period. Uncorrected, this is material
noncompliance. This event will be assigned points upon written notification
to the owner. Uncorrected is equal to the material noncompliance status threshold
score as defined in
§60.2(11)
[
(7)
] of this chapter.
Corrected is 5 points.
(8)
[
(viii)
] Developments awarded HTC
January 1, 2004, or later, that are foreclosed by a lender, or the General
Partner is removed by a syndicator due to reasons other than market conditions.
Points associated with a foreclosure will be assigned at the time the 8823
is sent to the IRS. Points associated with the removal of the General Partner
will be assigned upon written notification to the former General Partner.
25 points. No correction is possible; no corrected score assigned.
(9)
[
(ix)
] Development failed to meet
minimum low-income occupancy levels. Development failed to meet required minimum
low-income occupancy levels of 20/50 (20% of the units occupied by tenants
with household incomes of less than or equal to 50% of Area Median Gross Income)
or 40/60. Uncorrected is 20 points. Corrected is 10 points. (HTC and BOND
only)
(10)
[
(x)
] No evidence of, or failure
to certify to, non-profit material participation for an Owner having received
an allocation from the Nonprofit Set-Aside. Uncorrected is 10 points. Corrected
is 3 points.
(11)
[
(xi)
] The Development failed to
meet additional State required rent and occupancy restrictions. The LURA requires
the Development to lease units to low income households at multiple income
and rent tiers. This event refers to the condition when the lower tiers are
not satisfied. Uncorrected is 10 points. Corrected is 3 points.
(12)
[
(xii)
] The Development failed to
provide required supportive services as promised at Application. Uncorrected
is 10 points. Corrected is 3 points.
(13)
[
(xiii)
] The Development failed
to provide housing to the elderly as promised at Application. Uncorrected
is 10 points. Corrected is 3 points.
(14)
[
(xiv)
] Failure to provide special
needs housing. Development has failed to provide housing for tenants with
special needs as promised at Application. Uncorrected is 10 points. Corrected
is 3 points.
[
(xv)
The Development Owner failed
to provide required annual notification to the local administering agency
for the Section 8 program. Uncorrected is 5 points. Corrected is 2 points.]
(15)
[
(xvi)
] Changes in Eligible Basis.
Changes occur when common areas become commercial, fees are charged for facilities,
etc. Uncorrected is 10 points. Corrected is 3 points. (HTC only)
[
(xvii)
Owner failed to post Fair
Housing Logo and/or poster in leasing offices. Uncorrected is 3 points. Corrected
is 1 point.]
(16)
[
(xviii)
] Failure to submit part
or all of the AOCR or failure to submit any other annual, monthly, or quarterly
report required by the Department. Uncorrected is 10 points. Corrected is
3 points.
[
(xix)
Owner failed to make available
or maintain a management plan with required language as required under §1.14
of this title. Uncorrected is 3 points. Corrected is 1 point.]
(17)
[
(xx)
] Owner failed to approve and
distribute an Affirmative Marketing Plan as required under
§60.6
[
§1.14
] of this
chapter
[
title
].
Uncorrected is 3 points. Corrected is 1 point.
(18)
[
(xxi)
] Pattern of minor property
condition violations. Development
does not meet Uniform Physical Condition
Standards as described in §60.13 of this chapter or
displays a
pattern of property violations; however, those violations do not impair essential
services and safeguards for tenants. Uncorrected is 10 points. Corrected is
5 points.
(19)
[
(xxii)
] Development failed to comply
with requirements limiting minimum income standards for Section 8 residents.
Complaints verified by the Department regarding violations of the income standard
which cause exclusion from admission of Section 8 resident(s) results in a
violation. Uncorrected score 10 points. Corrected 3 points.
(20)
[
(xxiii)
] Owner defaults on payments
of Department loans for a period exceeding 90 days. Uncorrected, this is material
noncompliance. Points will be assigned under this event after written notice
to the Development Owner. Uncorrected is equal to the material noncompliance
status threshold score as defined in §60.2
(11)
[
(7)
]
of this chapter. Corrected is 10 points.
(21)
[
(xxiv)
] Utility Allowance not calculated
properly. Uncorrected 3 points. Corrected 1 point.
(22)
[
(xxv)
] Failure to comply with the
Next Available Qualifying Unit Rule. Uncorrected 3 points. Corrected 1 point.
(23)
[
(xxvi)
] Owner failed to execute
required lease provisions or exclude prohibited lease language. Uncorrected
3 points. Corrected 1 point (All programs except HTC)
(24)
[
(xxvii)
] Failure to provide annual
Housing Quality Standards inspection. Uncorrected 10 points. Corrected 3 points.
(HOME
and post compliance period HTC properties
Only)
(25)
[
(xxviii)
] Development has failed
to establish and maintain a reserve account in accordance with §1.37
of this title. Points will be assigned under this event after written notice
to the Development Owner. Uncorrected, this is material noncompliance. Uncorrected
is equal to the material noncompliance status threshold score as defined in
[
paragraph
] §60.2
(11)
[
(7)
] of this chapter.
Corrected is 10 points.
(26)
Development substantially
changed the scope of services as presented at initial application without
prior department approval. Uncorrected 4 points. Corrected 0 points.
(27)
Change in ownership or General
Partner without proper notification to and approval of Department. Uncorrected
4 points, corrected 0 points.
(i)
[
(B)
] Unit Noncompliance items are
identified in
paragraphs (1) - (12)
[
clauses (i) - (xi)
]
of this
subsection
[
subparagraph
].
(1)
[
(i)
] Unit not leased to Low Income
Household. Development has units that are leased to households whose income
was above the income limit upon initial occupancy. Uncorrected is
5
[
3
] points. Corrected is 1 point.
(2)
[
(ii)
] Low-income units occupied
by nonqualified full-time students. Uncorrected is 3 points. Corrected is
1 point. (HTC
Developments during the Compliance Period
and BOND
only)
(3)
[
(iii)
] Low income units used on
transient basis. Uncorrected is 3 points. Corrected is 1 point. (HTC and BOND
only)
(4)
[
(iv)
] Household income increased
above the re-certification limit and an available Unit was rented to a market
tenant.
(HTC Developments during the Compliance Period).
Uncorrected
is 3 points. Corrected is 1 point.
(5)
[
(v)
] Gross rent exceeds the highest
rent allowed under the LURA or other deed restriction. Uncorrected is
5
[
3
] points. Corrected is 1 point.
(6)
[
(vi)
] Failure to maintain or provide
tenant income certification and documentation. Uncorrected is 3 points. Corrected
is 1 point.
(7)
[
(vii)
] Casualty loss. Units not
available for occupancy due to natural disaster or hazard due to no fault
of the Owner. This carries no point value. Casualty losses are reported to
the IRS on HTC Developments.
(8)
[
(viii)
] When a low income Unit became
vacant, owner failed to lease (or make reasonable efforts to lease) to a low
income household before any units were rented to tenants not having a qualifying
income. Uncorrected is 3 points. Corrected is 1 point.
(9)
[
(ix)
] Unit not available for rent.
Unit is used for nonresidential purposes excluding unavailable Units due to
casualty and manager-occupied Units. Uncorrected is 3 points. Corrected is
1 point.
(10)
[
(x)
] Qualifying unit designation
removed from household. Uncorrected is 3 points. Corrected is 1 point. (FDIC's
AHP only)
(11)
[
(xi)
] Development evicted or terminated
the tenancy of a low income tenant for other than good cause. Uncorrected
is 10 points. Corrected is 3 points. (HTC and HOME only)
(12)
Household income increased
above 80% at recertification and owner failed to properly determine rent.
(HOME only) Uncorrected 3 points. Corrected 1 point.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on December 22, 2006.
TRD-200606893
Michael Gerber
Executive Director
Texas Department of Housing and Community Affairs
Earliest possible date of adoption: February 4, 2007
For further information, please call: (512) 475-4595