Emergency Sections
An agency may adopt a new or amended section or repeal an existing section on an 
emergency basis if it determines that such action is necessary for the public 
health, safety, or welfare of this state. The section may become effective 
immediately upon filing with the Texas Register, or on a stated date less than 
20 days after filing, for no more than 120 days. The emergency action is 
renewable once for no more than 60 days.
Symbology in amended emergency sections. New language added to an existing 
section is indicated by the use of bold text. [Brackets] indicate deletion of 
existing material within a section.
TITLE 10. COMMUNITY DEVELOPMENT
Part I. Texas Department of Housing and Community Affairs
Chapter 49. Low Income Rental Housing Tax Credit Rules
10 TAC sec.sec.49.1-49.13
The Texas Department of Housing and Community Affairs (the department) adopts on 
an emergency basis the repeal of sec. s49.1-49.13, concerning low-income rental 
housing tax credits. The sections are repealed in order to enact new sections 
which conform to the requirements of new regulations enacted under the Internal 
Revenue Code, sec.42, as amended, which provides for credit against federal 
income taxes for owners of qualified low-income rental housing projects. It is 
necessary to repeal, on an emergency basis former rules to ensure the 
department's compliance with applicable federal and state law, and to avoid loss 
of state allocation authority and possible disruption of the state's low-income 
rental housing tax credit program. This year, Congress extended this program 
only through June 30, 1992. Thus, emergency repeal is necessary to meet this 
congressional deadline.
The repeals are adopted on an emergency basis under Texas Civil Statutes, 
Article 4413(501), which provide the department with the authority to adopt 
rules governing the administration of the department and its programs; Executive 
Order AWR-91-4 (June 17, 1991), which provides the department with the authority 
to make housing credit allocations for the State of Texas; and the low income 
rental housing tax credit state allocation plan approved by the governor of 
Texas which defines the procedures for the allocation of housing tax credits 
among projects.
sec.49.1 Scope.
sec.49.2. Definitions.
sec.49.3. State Housing Credit Ceiling.
sec.49.4. Applications; Market Study; Reservations; Notifications; Commitments; 
Extensions; Carryover Allocations; Agreements and Elections; Extended 
Commitments.
sec.49.5. Set-Asides, Reservations, and Preference.
sec.49.6. Threshold Criteria; Evaluation Factors; Selection Criteria; Bonus 
Points; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects.
sec.49.7. Housing Credit Allocations.
sec.49.8. Agency Records, Certain Required Filings.
sec.49.9. Agency Responsibilities.
sec.49.10. Applications, Reservation, and Extension Fees.
sec.49.11. Manner and Place of Filing Applications.
sec.49.12. Withdrawals, Amendments, Cancellations.
sec.49.13. Waiver and Amendment of Rules.
Issued in Austin, Texas on March 27, 1992.
TRD-9204427
Mario Aguilar
Attorney
Texas Department of Housing and Community Affairs
Effective date: March 31, 1992
Expiration date: July 29, 1992
For further information, please call: (512) 474-2974
       
10 TAC sec.sec.49.1-49.14
The Texas Department of Housing and Community Affairs (the department) adopts on 
an emergency basis new sec.sec.49.1-49.14, concerning low-income rental housing 
tax credits. The new sections provide procedures for the allocation by the 
department of certain low-income rental housing tax credits available under 
federal income tax laws to owners of qualified low-income rental housing 
projects. It is necessary to replace on an emergency basis former rules, which 
are repealed by simultaneous publication on emergency basis, to ensure the 
department's compliance with applicable federal and state law, and to avoid loss 
of state allocation authority and possible disruption of the state's low-income 
rental housing tax credit program. This year, Congress extended this program 
only through June 30, 1992. Thus, emergency adoption is necessary to meet this 
congressional deadline.
The new sections are adopted on an emergency basis under Texas Civil Statutes, 
Article 4413(501), which provide the department with the authority to adopt 
rules governing the administration of the department and its programs; Executive 
Order AWR-91-4 (June 17, 1991), which provides the department with the authority 
to make housing credit allocations for the State of Texas; and the low income 
rental housing tax credit state allocation plan approved by the governor of 
Texas which defines the procedures for the allocation of housing tax credits 
among projects.
sec.49.1. Scope. The rules in this chapter apply to the allocation by the Texas 
Department of Housing and Community Affairs of certain low-income rental housing 
tax credits authorized by applicable federal income tax laws. The Internal 
Revenue Code of 1986, sec.42, as amended, provides for credits against federal 
income taxes for owners of qualified low-income rental housing projects. That 
Section provides for the allocation of the available tax credit amount by state 
housing credit agencies. Pursuant to Executive Order AWR-91-4 (June 17, 1991), 
the Texas Department of Housing and Community Affairs was authorized to make 
housing credit allocations for the State of Texas. As required by the Code, 
sec.42(m)(1), the department developed a qualified allocation plan which is set 
forth in sec.49.6 of this title (relating to Threshold Criteria; Evaluation 
Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond 
Financed Projects) and  s49.7 of this title (relating to Compliance Monitoring). 
The qualified allocation plan was adopted by the governor of Texas on February 
25, 1992. Therefore, the purpose of the sections in this chapter is to establish 
procedures for applying for and obtaining an allocation of the low-income rental 
housing tax credit, along with insuring that the proper selection criteria, 
priorities, and preferences are followed in making such allocations. It is a 
goal of this department, through these sections, to encourage diversity through 
broad geographic allocation of tax credits within the state. The sections are 
intended to promote maximum utilization of the available tax credit amount, 
consistent with ensuring that the tax credits are allocated to owners of 
projects that will serve the department's public policy objectives and federal 
requirements to provide housing to persons and families of low income.
sec.49.2. Definitions.  The following words and terms, when used in this 
chapter, shall have the following meanings, unless the context clearly indicates 
otherwise.
 Agreement and election statement-An agreement between the department, the 
project owner, and all successors in interest to the project owner as to the 
aggregate housing credit allocation amount that will be allocated to the 
building or buildings comprising the project, and an irrevocable election by the 
project owner to fix the applicable credit percentage(s) for the project in the 
month in which the commitment is issued.
 Applicable fraction -The fraction used to determine the qualified basis of the 
qualified low-income building, which is the smaller of the unit fraction or the 
floor space fraction, as defined more fully in the Code, sec.42(c)(1).
 Applicable percentage -The percentage used to determine the amount of the low-
income housing tax credit, as defined more fully in the Code,  s42(b).
 Application-An application in the form prescribed by the department, including 
any required exhibits or other supporting materials, filed with the department 
by a project owner requesting a housing credit allocation.
 Board-The board of directors of the department.
 Building in default project-A project where the building(s) is acquired from an 
insured depository institution in default (as defined in the Federal Deposit 
Insurance Act,  s3) or from a receiver or conservator of such an institution.
 Carryover allocation -An allocation of current year tax credit authority by the 
department pursuant to the provisions of the Code, sec.42(h)(1)(E).
 Carryover allocation document-A carryover allocation document issued by the 
department to a project owner pursuant to sec.49.4(1) and (m) of this title 
(relating to Applications; Market Study; Reservations; Notifications; 
Commitments; Extensions; Carryover; Allocations; Agreement and Elections; 
Extended Commitments).
 Code-The Internal Revenue Code of 1986, as the same may be amended from time to 
time, together with any applicable regulations, rules, rulings, revenue 
procedures, information statements, or other official pronouncements issued 
thereunder by the United States Department of the Treasury or the Internal 
Revenue Service relating to the low-income rental housing tax credit program 
authorized by sec.42 thereof.
 Commitment notice -A commitment notice issued by the department to a project 
owner pursuant to sec.49.4(j) of this title.
 Compliance period -With respect to a project, the period of 15 taxable years 
beginning with the first taxable year of the credit period with respect to the 
project, during which the project owner is required by the Code, sec.42, to 
maintain the project as rental property and to satisfy certain low-income 
occupancy requirements, as more fully defined in the Code, sec.42(i)(1) .
 Credit period-With respect to a building within a project, the period of 10 
taxable years beginning with the taxable year the building is placed in service 
or, at the election of the project owner, the succeeding taxable year, as more 
fully defined in the Code, sec.42(f)(1).
 Department-The Texas Department of Housing and Community Affairs, a public and 
official governmental Department of the State of Texas created and organized 
under Texas Civil Statutes, Article 4413(501).
 Eligible basis -With respect to a building within a project, the building's 
eligible basis as defined in the Code, sec.42(d).
 Extended low-income housing commitment agreement-An agreement between the 
department, the project owner, and all successors in interest to the project 
owner concerning the extended low-income housing use of buildings within the 
project as provided in the Code, sec.42(h)(6). This period shall commence on the 
first day of the compliance period and end on the date which is 30 years after 
said commencement date.
 Governmental contribution -Any form of financial assistance or insurance made 
available by any federal or state or local governmental unit to a project owner 
in connection with a project, provided that the amount of such assistance or 
insurance equals or exceeds 5.0% of the total development cost of the project, 
and provided further that any project financed under the Housing Act of 1949, 
which includes, but is not limited to, FmHA sec.515, shall be deemed to have 
received a governmental contribution.
 Handicapped person -A person having an impairment that is expected to be of 
long-continued and indefinite duration, is a substantial impediment to his or 
her ability to live independently, and is of a nature that the ability to live 
independently could be improved by a stable residential situation, as more fully 
defined in 24 Code of Federal Regulations, sec.841.1.
 Homeless person -An individual or family that lacks a fixed, regular, and 
adequate nighttime residence as more fully defined in 24 Code of Federal 
Regulations, sec.841.1.
 Housing credit allocation-An allocation by the department to a project owner of 
a low-income rental housing tax credit in accordance with sec.49.8 of this title 
(relating to Housing Credit Allocations).
 Housing credit allocation amount-With respect to a building within a project, 
the product of the applicable percentage and the qualified basis specified by 
the department in making a housing credit allocation to the project owner.
 Local tax-exempt organization-A project owner which is described in the Code, 
sec.501(c)(3) or (4), and which has a scope of business operation limited to the 
State of Texas or the governmental unit wherein the project will be situated.
 Project-A low-income rental housing project the owner of which represents to be 
a qualified low-income housing project within the meaning of the Code, 
sec.42(g).
 Project owner-Any individual, joint venture, partnership, corporation, 
cooperative, trust, or other person or entity that owns a project or expects to 
acquire a project pursuant to a purchase contract satisfactory to the 
department.
 Qualified Allocation Plan-An allocation plan which sets forth the selection 
criteria, priorities, and preferences provided in the Code, sec.42(m)(1).
 Qualified basis -With respect to a building within a project, the building's 
eligible basis multiplied by the applicable fraction, as more fully defined in 
the Code, sec.42(c).
 Qualified nonprofit organization-An organization that is described in the Code, 
sec.501(c)(3) or (4), that is exempt from federal income taxation under the 
Code, sec.501(a), and includes as one of its exempt purposes the fostering of 
low-income housing, as more fully defined in the Code, sec.42(h) (5)(C), and 
Temporary Treasury Regulation, sec.1.42-1T(c)(5)(ii).
 Qualified nonprofit project-A project with respect to which a qualified 
nonprofit organization is to materially participate (within the meaning of the 
Code, sec.469(h)) in the development and continuing operation of the project 
throughout the compliance period.
 Rehabilitation expenditure -Amounts incurred in connection with the 
rehabilitation of a project the owner of which represents to be "rehabilitation 
expenditures" within the meaning of the Code, sec.42(e). The minimum 
expenditures to qualify are the greater of $3,000 per unit or 10% of the 
adjusted basis of the building.
 Reservation notice -A reservation notice issued by the department to a project 
owner pursuant to sec.49.4(h) of this title.
 Rural project-A project located either outside the boundaries of any 
metropolitan statistical area (MSA) or primary metropolitan statistical area 
(PMSA) or within the boundaries of an MSA or a PMSA designated by the Farmers 
Home Administration (FmHA) as an eligible area for purposes of FmHA housing 
assistance programs.
 Selection criteria -The criteria used to determine housing priorities of the 
department which are appropriate to conditions in the state.
 State housing credit ceiling-The limitation imposed by the Code, sec.42(h), on 
the aggregate amount of housing credit allocations that may be made by the 
department during any calendar year, as determined from time to time by the 
department in accordance with the Code, sec.42(h).
 Sustaining occupancy -The figure at which occupancy income is equal to all 
expenses and debt service.
 Threshold criteria -Criteria used to determine the application's qualifications 
which are the minimum level of acceptability for consideration under the low-
income housing tax credit program.
 Total housing development cost-The total of all costs incurred by the project 
owner in acquiring, constructing, rehabilitating, and financing a project, as 
determined by the department based on the information contained in the project 
owner's application.
 Unit-Any self-contained component for occupancy within a project which 
contains, at a minimum, kitchen facilities, bathroom facilities, and utilities.
sec.49.3. State Housing Credit Ceiling.
(a) The department shall determine the state housing credit ceiling for each 
calendar year as provided in the Code, sec.42(h)(3)(C).
(b) The department shall publish each such determination in the Texas 
Register<ol> as soon as may be practicable after the making of such 
determination.
(c) The aggregate amount of housing credit allocations made by the department 
during any calendar year shall not exceed the state housing credit ceiling for 
such year as provided in the Code.
sec.49.4. Applications; Market Study; Reservations; Notification; Commitments; 
Extensions; Carryover Allocations; Agreements and Elections; Extended 
Commitments.
(a) Any project owner requesting a housing credit allocation for a project must 
submit an application to the department which application shall be executed by 
an authorized representative of the project owner, and said application is 
hereby incorporated as part of this chapter by reference. This application shall 
contain full and complete information as to each item specified in the 
application. When any item is marked "not applicable, " the project owner shall 
explain in detail why such item is "not applicable." The department reserves the 
right to request the project owner to provide any additional information it 
deems relevant as an addendum to the application.
(b) Prior to the awarding of any low-income housing tax credits on a project, 
the applicant must submit a Phase I environmental assessment of the property. 
This environmental assessment should include, but is not limited to, a review of 
records, interviews with people knowledgeable about the property, an inspection 
of the property, the building(s), the fence line, and adjoining properties. If 
the report establishes that environmental hazards currently exist on the 
property, then the project owner must provide either:
(1) a plan for the abatement of the hazard; or
(2) an operation and maintenance plan for the control of the hazard.
(c) The environmental assessment shall be conducted by an individual who has 
been properly certified to perform this analysis, and be prepared at the expense 
of the project owner. It is important to note that costs associated with either 
the abatement or encapsulation of environmental hazards may be eligible for tax 
credits.
(d)  Properties financed through FmHA or properties with four units or less will 
not be required to supply this information; however, the project owners are 
hereby notified that it is their responsibility to ensure that the property is 
maintained in compliance with all state and federal environmental hazard 
requirements.
(e) The market study requirement in the application shall comply with paragraphs 
(1)-(4) of this subsection as applicable.
(1) A market study prepared by a qualified market appraiser is required as part 
of the complete application when the project is either new construction or the 
rehabilitation of an existing project which is currently below 70% occupancy. 
The market study shall be prepared at the expense of the project owner and which 
shall include, at a minimum, the following information:
(A) an evaluation of the existing occupancy rates in comparable multifamily 
rental residential developments in the same market area as the proposed project;
(B) project absorption rates for at least one year from the date of the study 
for units in comparable multifamily rental residential developments in the same 
market area as the project that are suitable for occupancy by low- and very low-
income tenants. Further, provide a projection of the time necessary for the 
project to achieve sustaining occupancy;
(C) an evaluation of the current physical condition of existing low- income 
rental housing units in the market area;
(D) an evaluation of the need for affordable housing within the project market 
area;
(E) an evaluation of the appropriateness of the unit size, in terms of number of 
bedrooms, for the low-income housing market area;
(F) an evaluation of the appropriateness of the location and per unit cost of 
the project for the low-income target population;
(G) a summary of qualifications for the individuals who participated in the 
development of the market appraisal;
(H) a statement from the market appraiser concerning any identity of interest in 
the development of the property;
(I) such other matters as the department, in its sole discretion, may determine 
to be relevant to the department's evaluation of the need for the project and 
the allocation of the requested housing credit allocation amount.
(2) The department reserves the right to require that the project owner obtain a 
market study even if current occupancy is above 70%.
(3) A written certification is required, from the market appraiser who prepared 
the market study required under the preceding paragraph, stating that:
(A) the projected total housing development costs of the proposed project 
are/are not reasonable;
(B)  the proposed project, in light of vacancy and absorption rates for the 
applicable market area, is/is not likely to result in a vacancy rate for 
comparable units within such market area (i.e., standard, well-maintained units 
within such market area that are reserved for occupancy by low- and very low-
income tenants) that is unreasonable for such market area;
(C) the projected initial rents for the project are/are not reasonably 
affordable by low- and very low-income tenants and within the rental range for 
the comparable projects within the market area; and
(D) the information submitted by the project owner with respect to the project 
is/is not credible and reasonably accurate (with any exceptions noted);
(E) project reserves are/are not adequate to cover operating shortfalls until 
project achieves sustaining occupancy;
(F) the project does/does not require publicly supported subsidies in order to 
be viable.
(4) If a project owner requests a waiver of the required market study, the 
project owner shall provide the department a separate written document, with any 
support information attached thereto, setting forth the exact reasons why such 
waiver is requested. The department, at the pleasure of the board, may, in its 
discretion, waive any of the provisions of subsection (e)(1) of this section.
(f) A project owner may file an application at any time through April 30, 1992. 
The department reserves the right to extend the application acceptance cycle.
(g) The department will reject any application that is incomplete or that is not 
accompanied by the application fee specified in sec.49.11 of this title 
(relating to Program Fees).
(h) Within a reasonable amount of time after evaluation, ranking, and 
underwriting of an application as provided in  s49.6 of this title (relating to 
Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; 
Credit Ranking; Credit Amount; Tax Exempt Bond Financed Projects), the 
department shall respond to the project owner in accordance with paragraphs (1), 
(2), or (3) of this subsection, as applicable.
(1)  Unless the entire state housing credit ceiling for the applicable calendar 
year has been reserved, committed, or allocated in accordance with this chapter, 
owners receiving a total of 14 points or more, will be eligible for an 
evaluation by an underwriter as provided in sec.49.6(b) of this title. If such 
evaluation warrants, a reservation notice shall be issued. The reservation 
notice:
(A) shall confirm that the department has received the project owner's 
application and has found the application to be in satisfactory form and to 
contain either all required information or shall clearly specify any remaining 
conditions which are in need of being resolved prior to the presentation of the 
application to the Ad Hoc Tax Credit Committee; and
(B)  shall reserve to the project owner the housing credit allocation amount 
specified therein, subject to the conditions set forth in sec.49.8(a) of this 
title (relating to Housing Credit Allocations), and compliance by the project 
owner with the remaining requirements of this chapter, and subject further to 
approval by the board of the project owner's application. The reservation notice 
shall expire on the date specified therein.
(2) If the entire state housing credit ceiling for the applicable calendar year 
has then been reserved, committed, or allocated in accordance with this chapter, 
the department shall place an application receiving a total of 14 points or more 
as prescribed in sec.49.6(b) of this title on a waiting list and shall issue to 
the project owner a written notice of that action. If at any time prior to the 
last business day of the applicable calendar year, one or more reservation 
notices, commitment notices, or carryover allocation documents expire and a 
sufficient amount of the state housing credit ceiling becomes available, then 
the department shall issue a reservation notice to the project owner in the 
manner and with the effect described in paragraph (1) of this subsection.
(3) Applications not receiving a total of 14 points but meeting threshold 
criteria will be held in reserve until such time as all other applications which 
scored more points have been considered and considered at such time for the 
issuance of a reservation notice as provided in sec.49.6(b) of this title if a 
sufficient amount of the state housing credit ceiling is available.
(i) On the date an application is received, the department shall notify in 
writing the mayor or other equivalent chief executive officer if the project or 
a part thereof is located in a municipality, otherwise the department shall 
notify the chief executive officer of the county in which the project or a part 
thereof is located, to advise such individual that the project or a part thereof 
will be located in his/her jurisdiction and request any comments which such 
individual may have concerning such project. Such comments shall be part of the 
documents required to be reviewed by the board if received by the department 
within 20 days after same are mailed to said individual; otherwise, if comments 
are received by the department after 20 days, same may be reviewed at the 
discretion of the board.
(j) As soon as may be practicable following issuance of a reservation notice the 
department shall place the application on the agenda for review by the board at 
the next meeting of the board at which applications will be considered. Within 
10 calendar days after the board reviews the application, the department shall 
act upon the application in accordance with either paragraph (1) or paragraph 
(2) of this subsection, as applicable.
(1) If the board approves the application, the department shall issue a 
commitment notice to the project owner which commitment notice:
(A) shall confirm that the department has approved the application; and
(B) shall state the department's commitment to make a housing credit allocation 
to the project owner in a specified amount, subject to the conditions set forth 
in sec.49.8(a) of this title, and compliance by the project owner with the 
remaining requirements of this chapter. This commitment notice shall expire on 
the date specified therein.
(2) If the board disapproves or fails to act upon the application, the 
department shall issue to the project owner a written notice so stating.
(k) A project owner may request the department to extend the expiration date of 
a commitment notice which has not expired, by submitting a written request for 
such action, accompanied by the extension fee specified in sec.49.11 of this 
title. The request shall specify the term of the extension requested and the 
reason or reasons why the project owner has been unable to satisfy the 
requirements of this chapter prior to the original expiration date; provided, 
however, that the commitment fee specified in sec.49.11 of this title, has been 
received by the department. The department may consider and grant such extension 
requests in its sole discretion; provided, however, that in no event shall the 
expiration date of a commitment notice be extended beyond the last business day 
of the applicable calendar year.
(l) A project owner, who has been issued a commitment notice which has not 
expired, may request the department to execute an agreement and election 
statement which has been duly dated and signed by the project owner and received 
by the department prior to the end of the month in which said agreement and 
election statement was so dated and signed by the project owner, provided, 
however, that the commitment fee specified in sec.49. 11 of this title has been 
received by the department. Upon receipt thereof, the department shall, if the 
project owner is in full compliance with the rules in this chapter and the 
commitment notice, execute such agreement and return a copy to the project 
owner.
(m) Prior to the expiration of the commitment notice a project owner who has 
been issued a commitment notice may request the department to execute a 
carryover allocation document which has been properly completed, signed, dated 
and notarized by the project owner and delivered to the department along with 
evidence supporting at least a 10% expenditure in accumulated basis. The 
commitment fee as specified in sec.49.11 of this title, must be received by the 
department prior to the processing of any carryover allocation documentation.
(n) Prior to the issuance of a housing credit allocation to a project owner, the 
project owner shall date, sign, and acknowledge before a notary, an extended 
low-income housing commitment agreement and deliver same to the department. The 
property owner shall then record said extended low-income housing commitment 
agreement in the real property records of the county where the project is 
located and return the original document, duly certified as to recordation by 
the appropriate county official, to the department. Receipt of such certified 
recorded original by the department is required prior to issuance of the housing 
credit allocation.
sec.49.5. Set-Asides, Reservations, and Preferences.
(a) 10.0% of the state housing credit ceiling for each calendar year shall be 
set aside exclusively for qualified nonprofit projects.
(b) 90.0% of the state housing credit ceiling for each calendar year shall be 
available for all projects (including qualified nonprofit projects).
(c) No reservation notice or commitment notice shall be issued with respect to 
any project, of which the total development cost, as determined by the 
department, or the acquisition, construction, or rehabilitation cost (excluding 
financing and other soft costs) exceed the square foot limitations established 
from time to time by the board.
(d) The department reserves the right to adopt and implement such other set-
asides, reservations, and preferences as the department may deem appropriate in 
connection with the making of housing credit allocations.
sec.49.6. Threshold Criteria; Evaluation Factors; Selection Criteria; Final 
Ranking; Credit Amount; Tax Exempt Bond Financed Projects.
(a)  Threshold criteria. To be considered for a reservation of tax credits, a 
project must first demonstrate that it meets the threshold criteria set forth as 
follows:
(1) certification from the project owner that the application that has been 
filed with the department is in conformance with the provisions of both the 
Code, sec.42, and this chapter;
(2) detailed narrative from the project owner which discusses at a minimum the 
following topics:
(A)  describe in detail the reasons why the applicant's request for low- income 
housing tax credits is necessary to provide the planned affordable housing;
(B) describe in detail the reasons why the applicant's request for low- income 
housing tax credits is necessary in order to make the project viable;
(C) describe in detail the construction costs associated with the proposed new 
construction or rehabilitation;
(3) readiness to proceed as documented by:
(A) evidence of site control in the form of a deed, or contract for sale, or 
option to purchase agreement;
(B) zoning approval evidence of current zoning from the appropriate municipal 
authority. If the property is currently a non-conforming use, as per zoning 
regulations, then the project owner must provide the following information from 
said municipal authority:
(i) nature of non-conformance;
(ii)  applicable destruction threshold;
(iii) owners rights to reconstruct in event of damage;
(C) evidence of all necessary utilities extended to the site; and
(D) evidence of conditional or firm financing commitment. In order to qualify as 
a conditional or firm financial commitment, the commitment should include, at a 
minimum, the following items (initial letters of interest from a financial 
institution will not satisfy this requirement):
(i) written evidence of commitment from the financial institution along with a 
contact person (commitment letters contingent upon receipt of tax credits are 
acceptable);
(ii) terms of the financing including, but not limited to, the original amount 
of financing, amortization period, interest rate, balloon term, and monthly 
payment;
(iii)  listing of all conditions which must be met prior to the issuance of a 
firm commitment or the closing of said firm commitment and the date by which all 
conditions must be satisfied;
(4) a statement signed by the project owner stating that he or she intends to 
enter into an extended low-income housing commitment (declaration of land use 
restrictive covenants) with the department as provided in the Code, sec.42(h)(6) 
prior to the allocation of tax credits to the project;
(5) a statement signed by the first lienholder stating that he or she is aware 
of the declaration of land use restrictive covenants and accept its terms and 
provisions as a restrictive covenant on the property.
(6) for nonprofit projects:
(A) the nonprofit must be a qualified nonprofit organization as defined in the 
Code, sec.42(h)(5)(C), and must submit a copy of their nonprofit certification 
documents;
(B)  a statement that the nonprofit will regularly, continuously, and 
substantially participate in the development and operation of the project 
throughout the compliance period;
(7) project owner must provide current financial statements of any and all 
project owners and/or its general partners;
(8) only those applications meeting threshold criteria will be further 
considered. Project owners whose applications do not meet threshold criteria 
will be so informed in writing.
(b) Evaluation factors. The department will consider applications for a housing 
credit allocation using the following evaluation and point system.
(1) Applications will be evaluated against the threshold criteria as they are 
received in the department during the application cycle. Applications not 
meeting the threshold criteria will be cancelled and returned to the applicant 
without further review.
(2)  Applications not meeting the threshold criteria may be revised and 
subsequently reapply to the department along with a new application fee.
(3) The applications will then be ranked according to the seven selection 
criteria hereinafter set forth.
(4) The application will either receive a "yes" (one point unless otherwise 
indicated) or "no" (zero point) in each of the subcategories of the seven 
selection criteria.
(5)  Applications, other than the types of housing proposed in paragraph (6) of 
this subsection, receiving a total of 14 points, if a sufficient amount of state 
housing credit ceiling is available, will be eligible for an evaluation by an 
underwriter. If such evaluation warrants, a reservation notice will be issued as 
provided in sec.49.4(e) of this title (relating to Applications; Market Study; 
Reservations; Notifications; Commitments; Extensions; Carryover; Allocations; 
Agreement and Elections; Extended Commitments), and the application will be 
scheduled for review by Ad Hoc Tax Credit Committee and a recommendation by such 
committee to the board concerning the issuance of a commitment notice at the 
next scheduled board meeting.
(6) Applications for projects developed for special housing needs 
characteristics that include mental health/mental retardation projects, group 
homes, housing for homeless, transitional housing, and congregate care 
facilities receiving a total of eight points, if sufficient amount of state 
housing credit ceiling is available, will be eligible for an evaluation by an 
underwriter. If such evaluation warrants, a reservation notice will be issued as 
provided in sec.49.4(e) of this title, and the application will be scheduled for 
review by the Ad Hoc Tax Credit Committee, and a recommendation made by such 
committee to the board concerning the issuance of a commitment notice at a 
scheduled board meeting.
(7) Applications not meeting the required number of points and not receiving a 
reservation notice will not be rejected, but, provided that a sufficient amount 
of state housing credit is available, will be held in reserve until such time as 
all other applications which scored more points have been considered.
(8) Applications not meeting the required number of points and not receiving a 
reservation notice may be withdrawn, and reapply to the department if so 
desired.
(c)  Selection criteria. The seven selection criteria, and subcategories 
thereof, are:
(1) Project location.
(A) Project is located in a difficult development area or qualified census tract 
as defined by the secretary of HUD as an area with high construction costs, land 
and utility costs relative to area median gross income, and qualifies for the 
130% credit allowance, as per the Code, sec.42(d)(5)(C) (two points). If 
answering yes, the project owner must provide the census tract number of the 
project which corresponds with the census tract number designated by HUD. A copy 
of the census map and city or location map is required, which indicates the 
location of the project.
(B)  Project contributes significantly to the economic development of the 
community by supporting neighborhood conservation in a targeted community 
development block grant area. If answering yes, the project owner must provide 
evidence from the appropriate authority in the form of a letter, on the 
appropriate letterhead, and a copy of the census map, showing the project is 
within a targeted community development block grant area.
(C) Project is a rural project as such term is defined in the rules.
(D) Project is located within one of the 20 poorest counties in Texas as listed 
by the department (two points).
(E) Project provides desegregated housing opportunities for low-income occupancy 
outside of qualified census tracts, difficult development areas, locally 
targeted areas, etc. If answering yes, the project owner must provide evidence 
from the city/county office in the form of a letter, on the appropriate 
letterhead, stating that the project will be a low-income project located in an 
area not normally considered to be low-income, and that it provides housing for 
low-income citizens which will desegregate the area and is outside a target 
area.
(F) Project is located within a designated enterprise zone. If answering yes, 
the project owner must provide evidence from the local city/county authority in 
the form of a letter, on the appropriate letterhead, stating that the project is 
located within a designated enterprise zone.
(G) Project represents new construction in an area in which there is a 
measurable need. If answering yes, provide a letter from the city/county 
authority which clearly documents the need for new construction of affordable 
rental housing.
(2) Housing needs characteristics.
(A)  Project is located in a county in which more than 28% of the rental units 
are occupied by tenants at or below the poverty level (two points). If answering 
yes, the project owner must provide the appropriate percentage for the county in 
which the project is located, using the Texas Department of Housing and 
Community Affairs County Data Elements Guide (Exhibit A).
(B) Project is located in a county in which more than 35% of the rental units 
have one or more problems as defined in the Texas Department of Housing and 
Community Affairs County Data Elements Guide (Exhibit A). If answering yes, the 
project owner must provide the appropriate percentage for the county in which 
the project is located, using the Texas Department of Housing and Community 
Affairs County Data Elements Guide (Exhibit A).
(C) Project is located in counties of the state where more than 39% of the 
occupied housing units are renter occupied. If answering yes, the project owner 
must provide the percentage of renter occupied units in the project county by 
following the Texas Department of Housing and Community Affairs County Data 
Elements Guide (Exhibit A).
(3) Project characteristics.
(A) Project is a federally assisted building in danger of having the mortgage 
assigned to HUD, FmHA, or a federal mortgage insurance fund. If answering yes, 
the project owner must provide evidence in the form of a letter from the 
institution which the project is in danger of being assigned to.
(B) Project is a low-income building eligible for prepayment of mortgage as 
provided in the Code, sec.42(d)(6)(C). If answering yes, the project owner must 
provide either the deed, deed of trust, or a letter from the lending institution 
evidencing the prepayment clause to be in compliance with the requirement of the 
Code.
(C) Property is owned by an insured depository institution in default, or by a 
receiver or conservator of such an institution, or is an REO property held by 
Fannie Mae, FHLMC, federally chartered banks, or by a federally approved 
mortgage company or savings and loan association. If answering yes, the project 
owner must submit sufficient documentation in order to support this point.
(D) Project is housing that provides supportive services which may include, but 
are not limited to, meals, elderly and/or child day care, and transportation. 
The project owner must provide a letter from the appropriate professional entity 
that is providing these services stating the extent to which these services are 
to be provided.
(E) Project composition offers a unit mix which is conducive to family housing. 
Selection criteria points will be awarded based upon the following percentages 
of two bedroom and greater size units as compared to the total number of units: 
30-40% -one point; 41% +two points. If answering yes, the project owner must 
set-aside a proportional number of these units for occupancy by very low or low-
income tenants.
(F) The project will be placed in service prior to December 31, 1992. If 
answering yes, the project owner must certify as to the date by which all 
construction and/or rehabilitation will be completed.
(G) Project design promotes energy conservation. If answering yes, the project 
owner must provide documentation from the engineering or architectural firm 
performing the work describing the components to be installed, and that the 
installation of these materials will promote energy conservation. In order to 
claim this point, the energy conservation measures must be a portion of the work 
to be performed on the project.
(H)  Project retains existing federal, state, and local subsidies, or HOME funds 
through the additional assistance of the tax credit as an area targeted for 
special assistance through some recognized local plan (two points). If answering 
yes, the project owner must provide documentation from the entity providing the 
subsidy, on appropriate letterhead, that the project is receiving the subsidies.
(I) Project provides scattered site, low density housing (less than 10 units per 
acre).
(J) Evidence of syndication commitment on the subject property (two points). If 
answering yes, provide a copy of the syndication commitment.
(K) Evidence of a letter of intent for the syndication of the tax credit for the 
subject property. If answering yes, provide a copy of the syndication letter of 
intent.
(4) Sponsor (project owner) characteristics.
(A) Project owner has a track record in successfully developing and placing in 
service housing of the type the project owner is proposing. If answering yes, 
the project owner must provide a schedule which should indicate the location of 
each project, the number of units and whether a project is dedicated "affordable 
housing."
(B) The management agent designated by the project owner has successful previous 
experience in continuing management of the housing type being proposed. If 
answering yes, the project owner must provide a schedule of the management 
agent's experience, which should indicate the location of each project, the 
number of units, and whether a project is dedicated "affordable housing."
(C) Project owner has entered into a management agreement that specifies how the 
project will be managed. If answering yes, the project owner must provide a copy 
of the management agreement for the project, prepared by the management agent 
and signed by both the project owner and management agent.
(D) Project owner offers a right of first refusal to tenants of the property to 
purchase the property after the end of the compliance period. If answering yes, 
the project owner must provide a notarized certification outlining his or her 
intention to offer the right of first refusal to the tenants at the end of the 
compliance period.
(5) Participation of local tax exempt organizations.
(A)  Project owner has a community based board and/or the project is sponsored 
and developed by a community development corporation (two points). If answering 
yes, the project owner must provide a schedule of board members names, 
addresses, telephone numbers, occupations, and position titles.
(B) Project is a joint venture project between a local tax-exempt organization 
and private for profit entity with experience in the type of housing being 
proposed in this application (two points). If answering yes, the project owner 
must provide a copy of the agreement between the two entities, along with 
sufficient information concerning the previous experience of the for profit 
entity.
(6) Tenant populations with special housing needs.
(A) Project is located in an area in which more than 14% of the population is 
over 65 years of age as indicated in the Texas Department of Housing and 
Community Affairs County Data Elements Guide (Exhibit A). The project must be 
designed and equipped for elderly tenants. This point is only eligible for 
senior rental housing applications. If answering yes, the project owner must 
provide evidence that the previously stated age threshold has been met. The 
applicant must also submit evidence that the project design is supportive of 
elderly tenants.
(B) The project provides for at least 10% of the units to be accessible to 
handicapped persons. The project owner understands that these units must meet 
ANSI building standards. The project owner must provide design plans for the 
units that are handicapped accessible including, but not limited to, the number 
of wheelchair ramps, entryway dimensions, cabinet and doorway dimensions, and 
restroom dimensions and features. These features must be certified in writing, 
and the department must be provided with a sketch plan of each handicapped unit.
(C) Project is a rural project which is intended to assist in the housing for 
agricultural workers. The project owner must submit a marketing plan that 
indicates a strategy for attracting these tenants. Project is considered a rural 
project if it meets the definition within the rules.
(D) Property provides transitional housing for homeless persons, on a non-
transient basis, with supportive services designed to assist tenants in locating 
and retaining permanent housing (two points). If answering yes, the project 
owner must provide a marketing plan indicating the strategy to attract homeless 
persons. The marketing plan must also include a descriptive narrative of the 
types of services provided and the qualification measures used to determine 
these services and the recipients of such services.
(7) Public housing waiting lists.
(A) The project owner has received a letter from the appropriate authority 
citing the need for additional affordable housing units within its jurisdiction 
as evidenced by existing housing waiting lists. If answering yes, provide a copy 
of such letter.
(B) Project owner has committed in writing to the local public housing authority 
of availability of units and agrees it will consider those households on the 
public housing authority waiting list for the occupancy of such units. Project 
owner has prepared a marketing plan with details and provided a copy to the 
local public housing authority and the department. If answering yes, provide a 
copy of your letter to the public housing authority, along with a marketing plan 
for the project.
(d) Final ranking. The department will evaluate projects according to the 
strength of the project to meet the selection criteria. The results of the 
evaluation will be determined by the department in its sole discretion and will 
not be subject to challenge or contest by any applicant. After evaluating and 
scoring all applications received, the department will rank such applications 
according to the number of points received. Among those applications scoring 14 
points or greater, the department will give preference in allocating credit 
dollar amounts to projects:
(1) which spend the highest percentage on project costs other than the costs of 
intermediaries;
(2) serve the lowest income tenants; and/or
(3) obligate the project owner (as evidenced by some type of agreement) to serve 
qualified tenants for the longest period of time.
(e) Project owner's history. In reaching the final ranking of an application, 
the department will take into consideration the project owner's history of 
placing into service projects which have been awarded tax credits. The 
department reserves the right to deduct up to three points from the final score 
pursuant to this review.
(f) Credit amount. The department shall issue tax credits only in the amount 
needed for the financial feasibility and viability of a project throughout the 
credit period. The issuance of tax credits or the determination of any 
allocation amount in no way represents or purports to warrant the feasibility or 
viability of the project by the department.
(g) Tax exempt bond financed projects. Tax exempt bond financed projects which 
will not receive tax credits through the state allocation authority are also 
subject to the requirements for the allocation of a housing credit dollar amount 
under the qualified allocation plan.
sec.49.7. Compliance Monitoring. <ol> The Code, sec.42(m)(1)(B)(iii) requires 
state allocating agencies to monitor compliance on all tax credit projects, and 
to notify the IRS in cases of noncompliance which the department becomes aware 
of. In connection with this requirement, the department requires the following.
(1) Recordkeeping provision. The owner of a low-income housing project must keep 
records for each qualified low-income building in the project showing:
(A) the total number of residential rental units in the building;
(B) the percentage of residential rental units in the building that are low-
income units;
(C) the rent charged on each residential unit in the building;
(D) the low-income unit vacancies in the building and the rentals of the next 
available units;
(E) the income certifications of each low-income tenant;
(F) documentation to support each low-income tenant's income certification (for 
example, a copy of the tenant's federal income tax return, or verifications from 
third parties);
(G) the character and use of the nonresidential portion of the building included 
in the building's eligible basis under the Code, sec.42(d); and
(H)  a tenant statistical summary in a form prescribed by the department.
(2) Record retention provision. The owner of a low-income housing project is 
required to retain the records described in subsection (a) of this section, for 
each building in the project for at least six years beyond the end of the 
compliance period of the building.
(3) Certification and review.
(A) Certification. The owner of a low-income housing project must certify to the 
following items under penalty of perjury, on the forms provided by the 
department:
(i) that the project meets the minimum set aside test which is applicable to the 
project;
(ii) that the owner has received an annual income certification from each low-
income tenant and documentation to support that certification;
(iii) that each low-income unit in the project is rent-restricted under the 
Code, sec.42(g)(2);
(iv) that all units in the project are for use by the general public and are 
used on a nontransient basis;
(v) that each building in the project is suitable for occupancy, taking into 
account local health, safety, and building codes;
(vi) either that there has been no change in the eligible basis as defined in 
the Code, sec.42(d), of any building in the project, or that there has been a 
change, and the nature of the change;
(vii)  that all tenant facilities included in the eligible basis under the Code, 
sec.42(d), of any building in the project, such as swimming pools, other 
recreational facilities, and parking areas, are provided on a comparable basis 
without charge to all tenants in the building;
(viii) that if a low-income unit in the project became vacant during the year, 
reasonable attempts were made to rent that unit to tenants having a qualifying 
income and while the unit was vacant, no units of comparable or smaller size 
were rented to tenants not having a qualifying income; and
(ix) that if the income of tenants of a low-income unit in the project increased 
above the limit allowed in the Code, sec.42(g)(2)(D)(ii), the next available 
unit of comparable or smaller size in the project was rented to tenants having a 
qualified income.
(B) Review. The department requires an owner of a low-income housing project to 
submit to the department each year during the compliance period, at the time 
prescribed by the department:
(i) the owner's certification as described in subparagraph (A) of this 
paragraph;
(ii)  a copy of the annual income certification from each low-income tenant 
occupying a low-income unit during the previous year;
(iii) a copy of the documentation the owner has received to support that tenant 
income certification; and
(vi) the tenant statistical summary described in paragraph (1)(H) of this 
section.
(4) Exception. Buildings financed by the Farmers Home Administration (FmHA) 
under its sec.515 program are exempt from the requirements of paragraph (3) of 
this section. However, an owner of a low-income housing project financed by FmHA  
s515 must certify to the department under penalty of perjury, on the form 
provided by the department, that:
(A) each building complies with the requirements for FmHA assistance;
(B) each building also meets the minimum set-aside, income, rent, and 
suitability for occupancy requirements of the Code, sec.42;
(C)  the owner would be able to make all of the certifications otherwise 
required under paragraph (3)(A) of this section; and
(D) the tenant statistical summary described in paragraph (1)(H) of this 
section.
(5) Auditing provision. The department retains the right to perform an audit of 
any low-income housing project through the end of the compliance period of the 
buildings in the project. An audit would include an inspection of any building 
in the project, as well as a review of the records described in paragraphs (1) 
and (3) of this section.
(6) Notification of noncompliance.
(A)  Notice to owner.
(i) The department will provide prompt written notice to the owner of a low-
income housing project if the department does not receive the certification 
described in paragraph (3)(A) or (4) of this section, or discovers through 
audit, inspection, review, or any other manner, that the project is not in 
compliance with the provisions of the Code, sec.42.
(ii)  Correction period. The correction period shall not exceed 90 days from the 
date of the notice to owner described in clause (i) of this subparagraph. During 
the correction period, an owner must supply any missing certifications and bring 
the project into compliance with the provisions of the Code, sec.42. The 
department may extend the correction period for up to six months if it 
determines there is good cause for granting an extension.
(B) Notice to the Internal Revenue Service. The department is required to file 
Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance, with the 
Internal Revenue Service no later than 45 days after the end of the correction 
period as described previously, including any extension, whether or not the 
noncompliance or failure to certify is corrected.
(7) Notices to the department.
(A) An owner of a low-income housing project must notify the department in 
writing prior to any sale, transfer, or exchange of the project or any portion 
of the project.
(B) An owner of a low-income housing project must notify the department in 
writing to designate any further or different address to which subsequent 
notices or communications shall be sent.
(8)  Liability. Compliance with the requirements of the Code, sec.42, is the 
responsibility of the owner of the building for which the credit is allowable. 
The department's obligation to monitor for compliance does not make the 
department liable for an owner's noncompliance.
(9) These provisions apply to all buildings for which a low-income housing 
credit is, or has been, allowable at any time. However, these regulations do not 
require monitoring for whether a building or project was in compliance with the 
requirements of the Code, sec.42, prior to January 1, 1992.
sec.49.8. Housing Credit Allocations.
(a) The housing credit allocation amount shall not exceed the dollar amount the 
department determines is necessary for the financial feasibility of the project 
and its viability as a project throughout the credit period. Such determination 
shall be made by the department at the time of issuance of the reservation 
notice, at the time of review by the board prior to issuance of commitment 
notice, at the time the department makes a housing credit allocation and the 
date the building is placed in service. Any housing credit allocation amount 
specified in a reservation notice, commitment notice, allocation, and/or 
carryover allocation document is subject to change by the department dependent 
upon such determination. Such a determination shall be made solely at the 
discretion of the department, considering the items specified in the Code, 
sec.42(m)(2)(B), and the department in no way or manner represents or warrants 
to any project owner, sponsor, investor, lender, or other entity that the 
project is, in fact, possible or viable.
(b) The department shall make a housing credit allocation to any project owner 
who holds a commitment notice which has not expired, and which all fees as 
specified in sec.49.11 of this title (relating to Program Fees), have been 
received by the department, upon receipt from the project owner of evidence 
satisfactory to the department that one or more buildings within the project are 
completed and have been placed in service, and compliance with the department's 
placement in service procedures. The department shall make each such housing 
credit allocation by mailing or delivering IRS Form 8609 (or any successor form 
adopted by the Internal Revenue Service) to the project owner, with Part I 
thereof completed in all respects and signed by an authorized official of the 
department. The delivery of the IRS Form 8609 will only occur after the project 
owner has attended a compliance monitoring workshop conducted by the department. 
A separate housing credit allocation shall be made with respect to each building 
within a project which is eligible for a housing credit.
(c) The department shall execute, when the project owner is in full compliance 
with the rules in this chapter and the commitment notice and all fees as 
specified within sec.49.11 of this title, have been received by the department, 
a carryover allocation document which has been properly completed, executed, and 
notarized by the project owner, along with evidence supporting at least a 10% 
expenditure in accumulated basis and return one executed copy to the project 
owner. In this situation, the department shall, pursuant to the Code, 
sec.42(h)(1)(E), mail or deliver IRS Form 8609 (or any successor form adopted by 
the Internal Revenue Service) to the project owner, with Part I thereof 
completed in all respects and signed by an authorized official of the 
department, in the calendar year that such buildings are placed in service 
provided that such buildings may not be placed in service later than the close 
of the second calendar year following the calendar year in which the allocation 
is made.
(d) In making a housing credit allocation, the department shall specify a 
maximum applicable percentage, not to exceed the applicable percentage for the 
building permitted by the Code, sec.42(b), and a maximum qualified basis amount. 
In specifying the maximum applicable percentage and the maximum qualified basis 
amount, the department shall disregard the first-year conventions described in 
the Code, sec.42(f)(2)(A) and sec.42(f)(3)(B). The housing credit allocation 
made by the department shall not exceed the amount necessary to support the 
extended low-income housing commitment specified in the Code, 
sec.42(h)(6)(C)(i).
sec.49.9. Department Records; Certain Required Filings.
(a) At all times during each calendar year, the department shall maintain a 
record of the following:
(1) the cumulative amount of the state housing credit ceiling that has been 
reserved pursuant to reservation notices during such calendar year;
(2) the cumulative amount of the state housing credit ceiling that has been 
committed pursuant to commitment notices during such calendar year;
(3) the cumulative amount of the state housing credit ceiling that has been 
committed pursuant to carryover allocation documents during such calendar year;
(4) the cumulative amount of housing credit allocations made during such 
calendar years; and
(5) the remaining unused portion of the state housing credit ceiling for such 
calendar year.
(b) Not less frequently than quarterly during each calendar year, the department 
shall publish in the Texas Register<ol> each of the items of information 
referred to in subsection (a) of this section.
(c) The department shall mail to the Internal Revenue Service, not later than 
the 28th day of the second calendar month after the close of each calendar year 
during which the department makes housing credit allocations, the original of 
each completed (as to Part I) IRS Form 8609, a copy of which was mailed or 
delivered by the department to a project owner during such calendar year, along 
with a single completed IRS Form 8610, Annual Low-Income Housing Credit Agencies 
Report. When a carryover allocation is made by the department, a copy of Form 
8609 will be mailed or delivered to the project owner by the department in the 
year in which the building(s) is placed in service, and thereafter the original 
will be mailed to the Internal Revenue Service in the time sequence previously 
mentioned. The original of the carryover allocation document will be filed by 
the department with IRS Form 8610 for the year in which the allocation is made. 
The original of all executed agreement and election statements shall be filed by 
the department with the department's IRS Form 8610 for the year a housing credit 
allocation is made as provided in this section.
(d) The project owner shall be responsible to furnish to the department by May 
31 following each calendar year during the compliance period copies of the 
completed Form 8609 with Schedule A, Annual Statement, and Form 8586 (or any 
successor form adopted by the IRS) filed with the IRS for the preceding tax 
year.
(e) Project inspections may be required to show that the project is built 
according to required plans and specifications. A copy of all project 
inspections required and accepted by the lender financing the project shall be 
acceptable to the department as a certification that the project is built to 
plans and specifications if such inspections are required by the lender during 
the construction of the project. At a minimum to be acceptable to the 
department, such inspections may include an inspection at the start-up phase, 
the interim phase, and a final inspection at the time the project is placed in 
service. If no project inspections are required by the lender financing the 
project, the department may require at least three inspections be made of the 
project; such inspections shall be at the start-up phase, the interim phase, and 
a final inspection at the time the project is placed in service, and shall be 
performed by an independent, third party inspector hired by the department. The 
project owner shall pay all fees to cover the cost of said inspections.
(f) At the time each building in the project is placed in service, the project 
owner shall be responsible to furnish the department a certified statement as to 
the costs attributable to said building. The department reserves the right to 
require copies of receipts and statements for materials and labor utilized for 
the new construction or rehabilitation and, if applicable, a closing statement 
for the acquisition of the project.
sec.49.10. Department Responsibilities. <ol> In making a housing credit 
allocation under this chapter, the department shall rely upon information 
contained in the project owner's application to determine whether a building is 
eligible for the credit under the Code, sec.42. The project owner shall bear 
full responsibility for claiming the credit and assuring that the project 
complies with the requirements of the Code, sec.42, provided, however, that the 
department will carry out its responsibilities under sec.49.7 of this title 
(relating to Compliance Monitoring). The department shall have no responsibility 
for ensuring that a project owner who receives a housing credit allocation from 
the department will qualify for the housing credit.
sec.49.11. Program Fees.
(a) Each project owner that submits an application shall submit to the 
department, along with such application, a nonrefundable application fee, in the 
form of a certified check, in an amount equal to the following number of units: 
one-40-$200; 41-100 -$500; 101 +$5. 00 per unit.
(b) Each project owner that receives a commitment notice from the for profit 
category shall submit to the department, not later than the expiration date on 
the commitment billing notice, a nonrefundable commitment fee in an amount equal 
to the greater of $1,000 or 4.0% of the housing credit allocation amount. The 
commitment fee shall be paid by certified check. Each project owner that 
receives a commitment notice from the nonprofit category shall submit to the 
department, not later than the expiration date on the commitment billing notice, 
a nonrefundable commitment fee in an amount equal to the greater of $1,000 or 
2.0% of the housing credit allocation amount. The commitment fee shall be paid 
by certified check.
(c) Each project owner that requests an extension of the expiration date of a 
commitment notice shall submit to the department, along with such request, a 
nonrefundable extension fee in an amount equal to the greater of $200 or $5.00 
multiplied by the number of dwelling units in the project, and shall be paid by 
certified check. Such extension shall only be granted at the sole discretion of 
the department, and only after the commitment fee described in subsection (b) of 
this section has been properly paid.
(d) Upon the project being placed in service, the project owner will pay a 
compliance monitoring fee in the form of a certified check in an amount equal to 
the following:
(1) for projects of 10 units or less, financed through the FmHA sec.515, or 
purchased from the RTC under the Affordable Housing Disposition Program and 
currently paying the required compliance monitoring fee as outlined within that 
program, the amount will be equal to the following: one-10-$100; 11-100 -$200; 
100 +2.00 per unit;
(2) for all other projects not covered under paragraph (1) of this subsection, 
the compliance monitoring fee will be equal to the following: 11-100-$500; 101 
+$5.00 per unit; This annual fee will be multiplied by 15 years and discounted 
at 7.0%; the resultant present value will be assessed up front. The project 
owner will satisfy the requirement prior to the release of the IRS Form 8609 on 
the project.
(e) Public information requests will be processed by the department in 
accordance with the provisions of Texas Civil Statutes, Article 6252-17a. The 
State Purchasing and General Services Commission determines the cost of copying.
(f) The amounts of the application fee, commitment fee, compliance monitoring 
fee, and extension fee specified in this section may be revised by the 
department from time to time as necessary to ensure that such fees cover the 
department's administrative expenses.
sec.49.12. Manner and Place of Filing Applications.
(a) All applications, letters, documents, or other papers filed with the 
department will be received only between the hours of 8 a.m. and 5 p.m. on any 
day which is not a Saturday, Sunday, or a holiday established by law for state 
employees.
(b) All items submitted to the department shall be mailed or delivered to Low-
Income Housing Tax Credit Program, Texas Department of Housing and Community 
Affairs, 811 Barton Springs Road, Suite 300, Austin, Texas 78704.
sec.49.13. Withdrawals, Amendments, Cancellations.
(a) A project owner may withdraw or amend an application prior to receiving a 
reservation, commitment, carryover allocation document or housing credit 
allocation, or may cancel a reservation notice or commitment notice by 
submitting to the department a notice, as applicable, of withdrawal, amendment, 
or cancellation.
(b) An amendment of an application that results in an increase in the requested 
housing credit allocation amount or increase in points shall cause the 
application to be treated as having been filed on the date of the amendment.
sec.49.14. Waiver and Amendment of Rules.
(a) The board, in its discretion, may waive any one or more of these rules in 
cases of natural disasters such as fires, hurricanes, tornados, earthquakes, or 
other acts of nature as declared by federal or state authorities.
(b) The department may amend this chapter at any time in accordance with the 
provisions of Texas Civil Statutes, Article 6252-13a.
Issued in Austin, Texas, on Friday, March 27, 1992.
TRD-9204426
Mario Aguilar
Attorney
Texas Department of Housing and Community Affairs
Effective date: March 3, 1992
Expiration date: July 29, 1992
For further information, please call: (512) 474-2974