10 TAC §§51.1-51.18
The Texas Department of Housing and Community Affairs (the
Department) is adopting, with changes, §§51.1-51.14 and new §§51.16-51.18,
as published in the
Texas Register
, (22 TexReg
10484), on October 24, 1997, concerning the Housing Trust Fund Rules. The
sections are being adopted in final form to provide procedures for the allocation
by the Department of certain funds available under state laws to qualified
public entities, nonprofit organizations, for profit entities, and persons
and families, to provide safe, decent, and sanitary housing for low, very
low, and extremely low income families and individuals and persons with special
needs.
On October 24, 1997, the proposed new and amended rules were published
in the
Texas Register
, (22 TexReg 10484),
thereby commencing the required 30 day public comment period. Said public
comment period ended on November 24, 1997.
The Department sent out 354 notices of the proposed rule changes. Staff
received approximately 25 requests for copies of the proposed rules from
the public. The Department sent out approximately 1,500 notices of public
hearings to be held regarding the proposed rule changes. Copies of the proposed
rules and notices of the public hearings were also sent to all members of
the State Legislature.
During the public comment period, and at the public hearings, the Department
received both oral and written comments from the public. The scope of public
comments concerning the rules pertain to the following issues:
Proposed Income Targeting (§51.5(f))- The proposed amendment would
have the Housing Trust Fund apply at least 15% of funds to individuals and
families earning less than 30% of median family income, and a minimum of
20% of funds to individuals and families earning between 31 and 60% of median
family income. A comment was made that this will cut the support targeted
to lower income families in half.
Department's Response - The Housing Trust Fund has made this change in
an effort to comply with Rider 3 of the Department's appropriation, General
Appropriations Act of the 1998-1999 biennium. The Rider states:
"The housing finance division shall adopt a goal to apply a minimum of
15% of the division's total housing funds toward housing assistance for individuals
and families earning less than 30% of median family income. No less than
20% of the division's total housing funds shall be spent for individuals
and families earning between 31% and 60% of median family income."
It is not the intent of the Program to produce fewer very low income and/or
extremely low income housing units as a result of this change. The Housing
Trust Fund is committed to serving these income groups to the greatest extent
possible. These percentages are "minimums" and should not be interpreted
as a change in program policy. The Housing Trust Fund provides scoring incentives
to applicants that assist these income groups.
Board Recommendation - The Department's response is accepted.
CHDO Set-aside (§51.5 (d) original)- The proposed amendment would
eliminate the 35% CHDO set-aside. It is argued that this will disadvantage
community-based nonprofit organizations.
Department's Response - The CHDO set aside has had very little participation
in past funding cycles. Additionally, non-profit organizations are eligible
to compete for all Housing Trust Fund project funds. The Housing Trust Fund
awards points to those applicants who are able to demonstrate a high level
of community involvement both in the development of the proposed project,
as well as in their historical commitment to the community.
Board Recommendation - The CHDO set-aside will remain intact. It will be
calculated as part of the $2.6 million available to nonprofit organizations,
units of local government, public housing authorities and community housing
development organizations. In the event that there is an insufficient number
of qualifying applicants for this allocation, any remaining funds will then
be made available to other qualifying applicants.
Non-metropolitan Area Targeting (§51.5 (d)) - The proposed amendment
reduces non-metropolitan targeting from 70% of funds to 50% of funds. A comment
was made that a high percentage of HTF funds should remain targeted to non-metropolitan
areas of the state, because metropolitan areas have other funding sources
available.
Department's Response - Because of the limited amount of funding available
to the Housing Trust Fund and a low level of participation by organizations
proposing non-metropolitan projects, the Program has generally seen only
40-50% of project funds go to non-metropolitan areas. The Program hopes to
see more non-metropolitan applications and will provide scoring incentives
in order to encourage greater participation.
Board Recommendation - The Department's response is accepted.
Housing Development and Pre-development costs (§51.3) - The proposed
amendments eliminate certain pre-development costs as eligible activities
for HTF funds. A comment was made that the elimination of these costs will
disadvantage organizations which do not have financial reserves, or other
means of covering these costs.
Department's Response - It is the Program's opinion that it should be more
selective in paying for pre-development and/or development costs. The costs
in question are incurred at the developmental stage of the project when there
is less assurance that the project will go forward. One of the objectives
of the Department is to be paid back for the public funds that are invested
into a project. This provides for the recycling of funds into future Housing
Trust Fund projects. As a repayable source of gap financing, the Program
would like to see funding of hard costs associated with actual housing production.
Board Recommendation - Predevelopment costs will remain intact, as reimbursable
expenses. In addition, up to 10% of any biennium allocation of Housing Trust
Fund program funds may be set aside to create a pre-development loan fund
to be used for matching funds with outside funds.
Extremely Low Income Category - The proposed amendments define "extremely
low income" as families and persons earning less than 30% of area median
family income. Several groups expressed concern regarding the difficulty
of addressing the housing needs of the extremely low income.
Department's Response - The extremely low income category was defined by
the Legislature in the 1997 amendments to Section 2306 (House Bill 2577),
as a targeted income group. The Department is charged with addressing the
needs of these individuals and families.
Board Recommendation - The Department's response is accepted.
The Department has made corrections.
The amended and new sections are proposed for final adoption
pursuant to the Texas Government Code, Chapter 2306, which provides the Texas
Department of Housing and Community Affairs with the authority to adopt rules
governing the administration of the department and its programs.
§51.1.Purpose.
This part describes policies and procedures applicable to the Housing
Trust Fund authorized under Texas Government Code, Chapter 2306, Subchapter
I.
§51.2. Program Goals and Objectives.
(a)
The Housing Trust Fund shall be used by the Department
to provide loans, grants, or other comparable forms of assistance to local
units of government, the Department, public housing authorities, community
housing development organizations, nonprofit organizations, for profit entities,
and income-eligible persons, families, and households to finance, acquire,
rehabilitate, and develop affordable, decent, safe, and sanitary housing.
(b)
The Housing Trust Fund shall be used by the Department
to provide assistance for persons and families of low, very low, and extremely
low income in financing, acquiring, rehabilitating, and developing affordable,
decent, safe, and sanitary housing.
(c)
The Housing Trust Fund shall be used by the Department
to provide technical assistance and capacity building to nonprofit organizations,
and community housing development organizations engaged in developing affordable
housing for persons and families of low, very low, and extremely low income.
§51.3. Definitions.
The following words and terms, when used in this part, shall have the
following meaning, unless the context clearly indicates otherwise.
Act
- Texas Government Code, Chapter 2306, Subchapter I.
Affordable Housing
- Housing for which low, very low, and
extremely low income families are not required to pay more than 30% of monthly
adjusted income for the mortgage payment and utilities, or rent and utilities,
computed in accordance with the federal regulations for the Section 8 Existing
Housing Program set forth in the Code of Federal Regulations, Title 24, Part
5, Subpart F.
Board
- The governing board of the Department.
Capacity Building
- Educational and organizational support
assistance to promote the ability of community housing development organizations
and nonprofit organizations to maintain, rehabilitate and construct housing
for low, very low, and extremely low income persons and families. This activity
may include but is not limited to:
(A)
organizational support to cover expenses for
training, technical and other assistance to the board of directors, staff,
and members of the nonprofit organizations or community housing development
organization;
(B)
program support including technical assistance and
training related to housing development, housing management, or other subjects
related to the provision of housing or housing services; or
(C)
studies and analyses of housing needs.
Community Housing Development Organizations
- A nonprofit
organization that satisfies the requirements of 24 CFR92.2, as amended, as
certified by a HOME Program.
Department
- The Texas Department of Housing and Community
Affairs.
Eligible Applicants
- Local units of government, public housing
authorities, community housing development organizations, nonprofit organizations,
for profit entities, persons and families of low, very low, and extremely
low income, and persons with special needs.
Extremely Low Income Persons and Families
- Persons and families
earning not more than 30% of the area median income as determined by the
United States Department of Housing and Urban Development, with allowances
for family size.
Federal Government
- The United States of America or any department,
division, agency or instrumentality, corporate or otherwise, of the United
States of America.
Housing Development Costs
- The total of all costs incurred
in financing, creating, or purchasing any housing development, including,
but not limited to, a single-family dwelling, which are approved by the Department
as reasonable and necessary. The costs may include, but are not limited to:
(A)
the value of land and any buildings on the land
owned by the sponsor, or the cost of land acquisition and any buildings on
the land, including payments for options, deposits, or contracts to purchase
properties on the proposed housing sites;
(B)
cost of site preparation, demolition, and development;
(C)
fees paid or payable in connection with the planning,
execution, and financing of the housing development, such as those to the
architects, engineers, attorneys, accountants;
(D)
cost of necessary studies, surveys, plans, permits,
insurance, interest, financing, tax and assessment costs, and other operating
and carrying costs during construction;
(E)
cost of construction, rehabilitation, reconstruction,
fixtures, furnishings, equipment, machinery, and apparatus related to the
real property;
(F)
cost of land improvements, including without limitation,
landscaping and off-site improvements, whether or not the costs have been
paid in cash or in a form other than cash;
(G)
necessary expenses in connection with initial occupancy
of the housing development;
(H)
an allowance established by the Department for contingency
reserves and reserves for any anticipated operating deficits during the first
two years of occupancy; and
(I)
the cost of the other items, including tenant relocation,
if tenant relocation costs are not otherwise being provided for, as the Department
shall determine to be reasonable and necessary for the development of the
housing development, less any and all net rents and other net revenues received
from the operation of the real and personal property on the development site
during construction.
Housing Development or Housing Project
- Any real or personal
property, project, building, structure, facilities, work, or undertaking,
whether existing, new construction, remodeling, improvement, or rehabilitation,
which meets or is designed to meet minimum property standards consistent
with those prescribed in the Housing Trust Fund Property Standards, found
in the Program Guidelines, for the primary purpose of providing sanitary,
decent, and safe dwelling accommodations for rent, lease, use, or purchase
by persons and families of low, very low, and extremely low income, and persons
with special needs. The term may include buildings, structures, land, equipment,
facilities, or other real or personal properties which are necessary, convenient,
or desirable appurtenances, such as but not limited to streets, water, sewers,
utilities, parks, site preparation, landscaping, stores, offices, and other
non-housing facilities, such as administrative, community and recreational
facilities the Department determines to be necessary, convenient, or desirable
appurtenances.
Housing Finance Division
- The division or divisions of the
Department responsible for the administration of the Housing Trust Fund.
Joint Venture
- An agreement between a lead applicant and
a cooperating entity formed to administer or implement a Housing Trust Fund
project.
Lead Applicant
- An Eligible Applicant designated in a Housing
Trust Fund application to assume contractual liability and legal responsibility
as the Recipient executing the written agreement with the State.
Local Government
- A county; an incorporated municipality;
a special district; any other legally constituted political subdivision of
the state; a public, nonprofit housing finance corporation created under
the Local Government Code, Chapter 394; or a combination of any of the entities
described here.
Low Income Persons and Families
- Persons and families earning
not more than 80% of the area median income as determined by the United States
Department of Housing and Urban Development, with allowances for family size.
Metropolitan and Metro
- Areas designated by the Bureau of
the Census as metropolitan statistical areas (MSA) in the most recent decennial
census.
Non-metropolitan and Non-Metro
- Refers to all areas outside
those areas designated as MSAs by the Bureau of the Census in the most recent
decennial census.
Nonprofit Organization
- Any public or private, nonprofit
organization that:
(A)
is organized under state or local laws;
(B)
has no part of its net earnings inuring to the benefit
of any member, founder, contributor, or individual;
(C)
is neither controlled by, nor under the direction
of, individuals or entities seeking to derive profit or gain from the organization.
A nonprofit organization may be sponsored in part by a for-profit entity,
but:
(i)
the for-profit entity
may not be an entity whose primary purpose is the development or management
of housing, such as a builder, developer, or real estate management firm;
(ii)
the for-profit entity
may not have the right to appoint more than one-third of the membership of
the organization's governing body. Board members appointed by the for-profit
entity may not appoint the remaining two thirds of the board members; and
(iii)
the organization must
be free to contract for goods and services from vendors of its own choosing;
(D)
has a tax exemption ruling from the Internal
Revenue Service under the Internal Revenue code of 1986, §501(c), as
amended;
(E)
does not include a public body (including the participation
jurisdiction) or an instrumentality of a public body. An organization that
is state or locally chartered may qualify as a nonprofit organization; however,
the state or local government may not have the right to appoint more than
one-third of the membership of the organization's governing body and no more
than one-third of the Board members can be public officials;
(F)
has standards of financial accountability that conform
to Attachment F of the Office of Management and Budget, Circular Number A-100
(revised) "Standards for Financial Management Systems"; and
(G)
has among its purposes, the provision of decent housing
that is affordable to low, very low, and extremely low income persons, as
evidenced by its charter, articles of incorporation, resolutions or by-laws.
Person with Special Needs
- A person or family of low, very
low, or extremely low income who:
(A)
is considered disabled under a state or federal
law;
(B)
is elderly (age 60+);
(C)
is designated by the Board as experiencing a unique
need for affordable, decent, safe housing that is not being met adequately
by private enterprise.
Predevelopment Costs
- Reimbursable costs related to a specific
eligible housing project including:
(A)
Predevelopment housing project costs that the
Department determines to be customary and reasonable, including but not limited
to consulting fees, costs of preliminary financial applications, legal fees,
architectural fees, engineering fees, engagement of a development team, site
control, and title clearance;
(B)
Preconstruction housing project costs that the Department
determines to be customary and reasonable, including but not limited to,
the costs of obtaining firm construction loan commitments architectural plans
and specifications, zoning approvals, engineering studies and legal fees.
(C)
Predevelopment costs do not include general operational
or administrative cost.
Public Housing Authority
- A housing authority established
under the Texas Local Government Code, Chapter 392.
Real Property
- All land, including improvements and fixtures
and property of any nature appurtenant, or used in connection therewith,
and every estate, interest, and right, legal or equitable therein, including
leasehold interests, terms for years, and liens by way of judgment, mortgage
or otherwise.
Recipient
- Community housing development organization, nonprofit
organization, for profit entity, local unit of government, or public housing
authority that is approved by the Department to receive and administer housing
trust funds in accordance with these rules.
Rural Project
- A project located within an area which:
(A)
is situated outside the boundaries of a PMSA
or MSA; or
(B)
is situated within the boundaries of a PMSA or MSA
if it has a population of not more than 20,000, and does not share boundaries
with an urbanized area; or
(C)
has received financing or has received a commitment
for financing from Texas Rural Development.
State
- The State of Texas.
Total Bond Indebtedness
- All single-family mortgage revenue
bonds (including collateralized mortgage obligations), multifamily mortgage
revenue bonds and other debt obligations issued or assumed by the Department
and outstanding as of August 31 of the year of calculation, excluding:
(A)
all such bonds rated Aaa by Moody's Investors
Service or AAA by Standard & Poor's Corporation for which the Department
has no direct or indirect financial liability from the Department's unencumbered
fund balances; and
(B)
all other such bonds, whether rated or unrated, for
which the Department has no direct or indirect financial liability from the
Department's unencumbered fund balances, unless Moody's or Standard &
Poor's has advised the Department in writing that all or a portion of the
bonds excluded by this clause should be included in a determination of total
bond indebtedness.
Unencumbered Fund Balances
-
(A)
the sum of the balances resulting at the end
of each Department fiscal year from deducting the sum of bond indenture and
credit rating restrictions and liabilities from the sum of amounts on deposit
in indenture funds and other tangible and intangible assets of each Department
housing bond program; and
(B)
uncommitted amounts on deposit in each independent
or separate unrestricted fund established by the housing finance division
or its administrative component units.
Very low Income Persons and Families
- Persons and families
earning not more than 60% of the area median income as determined by the
United States Department of Housing and Urban Development, with allowances
for family size.
§51.4. Availability of Funds and Schedule.
(a)
The Housing Trust Fund consists of appropriations or transfers
made to the fund, unencumbered fund balances, and public or private gifts
or grants. Assets in the fund may be used only to carry out the purposes
of this rule.
(b)
An independent auditor shall annually conduct an audit
to determine the amount of unencumbered fund balances of all housing finance
division funds. The independent auditor shall submit the audit report to
the Board before January 1 of each year. After the report has been received
by the Board, copies of the auditor's determination of unencumbered fund
balances shall be made available to the public at the Department's offices,
without cost to the public.
(c)
Staff of the Department's housing finance division shall,
on or before January 1 of each year, compute the total bond indebtedness
of the Department and shall prepare worksheets explaining the calculation
of 2.0% of total bond indebtedness. Copies of these worksheets shall be made
available to the public at the Department's offices, without cost to the
public.
(d)
Based on the audit report, the Department's Board shall
verify the computations made by housing finance division staff and, by resolution
shall authorize the transfer, except as provided by subsections (e)-(g) of
this section, to the Housing Trust Fund on or before January 10 of each year
an amount equal to one-half of the housing finance division's unencumbered
fund balances in excess of 2.0% of total bond indebtedness.
(e)
If, at the time any annual audit required by subsection
(b) of this section is concluded, the housing finance division's unencumbered
fund balances exceed 4.0% of its total bond indebtedness, the amount transferred
on or before the next January 10 shall consist of all amounts in excess of
that 4.0%.
(f)
Notwithstanding subsection (e) of this section, if, at
the time any annual audit required by subsection (b) of this section is concluded,
a nationally recognized rating agency has recommended the housing finance
division to maintain unencumbered fund balances in excess of the amount permitted
by subsection (d) of this section to be maintained as unencumbered fund balances,
as a condition to achieving or maintaining a rating of at least Aa/A+ on
all or a portion of the bond indebtedness of the housing finance division
that is issued under an open indenture or an open flow of funds, the amount
transferred on or before each January 10 shall consist of all funds in excess
of the amount required by the rating agency to be held as unencumbered fund
balances.
(g)
Not withstanding subsection (e) of this section, if, at
the time any annual audit required by subsection (b) of this section is concluded,
a nationally recognized rating agency has recommended the housing finance
division to increase the amount of its unencumbered fund balances to achieve
or maintain a financially sound condition or to prevent a decrease in the
long-term debt rating maintained on all or a portion of the bond indebtedness,
the Department may not make further annual transfers to the Housing Trust
Fund until all requirements and conditions of the rating agency have been
met.
(h)
In addition to the money transferred into the housing
trust fund under this section, the Department shall transfer into the fund
the amount of any origination fee, asset oversight fee, and servicing fee
the Department or the Texas State Affordable Housing Corporation receives
in relation to the administration of its 501 (c) (3) bond program established
pursuant to §2306.358 that exceeds the amount needed by the Department
or the Texas State Affordable Housing Corporation to pay its operating and
overhead costs and fund reserves, including an insurance reserve or credit
enhancement reserve established by the Board in administering the program.
(i)
Interest earned by the Capital Trust Fund shall be deposited
to the credit of the Housing Trust Fund.
(j)
The Housing Trust Fund provided for by this section is
not subject to the Texas Trust Code (Property Code §111.001, et seq.).
§51.5. Allocation of Housing Trust Funds.
(a)
Funds shall be allocated to achieve a broad geographical
distribution taking into account the number and percentage of low, very low,
and extremely low income persons and families in different geographical areas
of the State.
(b)
In allocating funds under the Housing Trust Fund, special
attention shall be paid to equitably serving the housing needs of low, very
low, and extremely low income persons and families residing in rural and
non-metropolitan areas.
(c)
No more than 10% of the housing trust funds allocated
each fiscal year shall be distributed to community housing development organizations
and nonprofit organizations for capacity building.
(d)
At least 35% of the housing trust funds allocated each
funding cycle shall be distributed to community housing development organizations.
This 35% will be based on the amount of funds remaining after funds identified
in subsection (c) of this section are allocated. In the event that there
is an insufficient number of qualifying applicants for this allocation, any
remaining funds will then be made available to other qualifying applicants,
as specified in the Program Guidelines.
(e)
The Department shall utilize its best efforts to apply
at least 50% of the housing trust funds allocated each funding cycle to non-metropolitan
areas of the state.
(f)
No more than 10% of the yearly balance of the housing
trust fund may be used by the Department to acquire real property.
(g)
The Department shall utilize its best efforts to apply
at least 15% of the housing trust funds allocated each fiscal year to housing
assistance for individuals and families earning less than 30% of median family
income, and a minimum of 20% of the allocated funds for individuals and families
earning between 31 and 60% of median family income.
(h)
Bond indenture requirements governing expenditure of bond
proceeds deposited in the housing trust fund shall govern and prevail over
all other allocation requirements established in this section. However, the
Department shall distribute these funds in accordance with the requirements
of this section to the extent possible.
(i)
Not more than 10% of any biennium allocation of Housing
Trust Fund program funds may be set aside to create a pre-development loan
fund to be used as matching funds with outside funds.
§51.6. Basic Eligible Activities.
The Department shall make grants and loans from the Housing Trust to
Eligible Applicants for purposes consistent with §5.2 of this title
(related to Program Goals and Objectives). Eligible uses of trust funds include,
but are not limited to the following:
(1)
To fund housing development costs for a housing project
or to provide down-payment assistance, credit enhancement, direct loans and
interest rate reduction assistance to low, very low, and extremely low income
persons and families, and persons with special needs.
(2)
To provide predevelopment costs for eligible housing
projects. Such assistance shall be provided in the form of a loan to be repaid
to the housing trust fund from construction loan proceeds or other project
income. The Board may waive repayment of the loan, in whole or in part, if
there are impediments to project development that the Board determines are
reasonably beyond the control of the applicant.
(3)
To provide for capacity building for community housing
development and nonprofit organizations that show sufficient evidence of
having strong community support and a strong likelihood of producing housing
for low, very low, and extremely low income persons and families within two
years of the date that assistance is provided. Where possible, the Recipient
of funds under this subsection will build in fees, or other ongoing sources
of income, into the services that they provide, so that repeated support
will not be needed.
(4)
To support Department sponsored activities authorized
under the Act, subject to the requirements of the Housing Trust Fund and
implementing regulations.
§51.7. Ineligible Activities and Restrictions.
Any activity is ineligible for housing trust funds unless the activity
will result in the financing, acquisition, rehabilitation, or development
of affordable, decent, safe, and sanitary housing for low, very low, and
extremely low income persons or families, or will provide capacity building
to community housing development organizations and nonprofit organizations
engaged in developing housing for low, very low, and extremely low income
persons and families.
(1)
General Government Expenses. Housing trust funds may not
be used to carry out the regular responsibilities of the unit of general
local government.
(2)
Political Activities. Housing trust funds may not
be used to finance the use of facilities or equipment for political purposes
or to engage in other partisan political activities, such as candidate forums,
voter transportation, or voter registration.
(3)
Prohibition against Involuntary Displacement. Housing
trust funds shall not be utilized on a project that has the effect of permanently
and involuntarily displacing low, very low, and extremely low income persons
and families.
(4)
Restriction on Affordability of Multifamily Housing.
Any multifamily housing developed or rehabilitated with housing trust funds,
in whole or in part, shall remain affordable to income-qualified households
for at least 20 years.
§51.8. Maintenance of Effort.
(a)
Housing trust funds shall not be used by local government
to supplant or replace existing housing funds for housing for low, very low,
and extremely low income persons and families.
(b)
If other federal funds are available to a local government
applicant for any proposed housing project, the local government applicant
shall affirmatively show that it has undertaken reasonable efforts to secure
such funding for the proposed housing project.
§51.9. Application Procedure and Requirements.
(a)
The Department shall, from time to time, solicit applications
for loans and grants from Eligible Applicants.
(b)
The applicant shall submit, in an application form and
process prescribed by the Department, project information including, but
not limited to:
(1)
A written description of the housing project including
but not limited to, the number of units, unit mix, proposed rents or mortgage
payments, site location, the proposed program of services to occupants and
the availability of these services in the future, project amenities, names
and addresses of all individuals with any financial interest in the proposed
housing project, personal and organizational financial statements and audit
reports, and any other information the Board may require;
(2)
A statement of housing project purpose indicating
the housing type and tenants or homeowners to be housed, and the length of
time the units will be committed available for low, very low, and extremely
low income households;
(3)
A statement describing the need for the proposed
housing development given existing housing and economic conditions in the
service area;
(4)
A projection of housing project expenses and income;
(5)
Grant or loan amount requested and total housing
project development costs, including a description of all committed or anticipated
project funding and funding sources, and a statement describing efforts to
secure other sources of funding, including federal funds and funds from private
sources;
(6)
A narrative describing the housing project sponsor/developer/owner/
manager experience in developing and operating housing projects;
(7)
A description of any temporary displacement resulting
from the proposed housing project, including a statement whether the housing
project has the effect of permanently and involuntarily displacing persons
and families of low income;
(8)
The geographical area of the state in which the project
will occur;
(9)
A narrative describing how the proposed project addresses
each of the evaluation factors listed in §51.10 of this title (relating
to Criteria for Funding);
(10)
The affirmative marketing plan of the housing project
sponsor on marketing to racial and ethnic minorities and person with special
needs;
(11)
Project completion schedule;
(12)
Non-discrimination statements;
(c)
An individual or family who is an Eligible Applicant shall
submit a request for funding in an application form and process prescribed
by the Department to include the items listed in subsection (b) of this section
that are relevant to individuals and persons applying for loans and grants.
(d)
Capacity building applicants will be required to submit
a specific application form that will follow guidelines prescribed by the
Department.
§51.10.Criteria for Funding.
(a)
In considering applications for funding, the Department
and Board shall consider the following:
(1)
Threshold Criteria. To be considered for funding, a housing
project must first demonstrate that it meets all the threshold criteria set
forth as follows:
(A)
The project is consistent with the requirements established
in this rule.
(B)
The applicant provides evidence of their ability to carry
out the project in the areas of financing, acquiring, rehabilitating, developing
or managing affordable housing development.
(C)
The project addresses and identifies housing need. This
assessment will be based on statistical data, surveys and other indicators
of need as appropriate.
(2)
Evaluation Factors. The Board and Department
will consider applications for housing trust funds using the following system:
(A)
Applications will be evaluated against the threshold criteria
during each funding cycle. Applications not meeting the threshold criteria
will be returned to the applicant without further review.
(B)
Applications not meeting the threshold criteria may be
revised and subsequently resubmitted for consideration.
(C)
Applications will then be ranked according to the criteria
hereinafter set forth:
(i)
leveraging of funds: the extent to which the project will
leverage State funds with other resources, including federal resources, and
private sector funds;
(ii)
community involvement: the extent to which the project
involves a broad range of community representatives, including low, very
low, and extremely low income individuals who may expect to reside in the
proposed housing project, in the design and development of the proposed housing
project;
(iii)
very low income targeting: the extent to which the project
will provide safe, decent and affordable housing to very low income persons
and families;
(iv)
long term affordability: the extent to which the project
will ensure the longest possible use of assisted units as affordable housing
for low, very low, and extremely low income persons and families;
(v)
housing need: the geographical area of the State to be
served and the extent to which there is a need for safe, decent, and affordable
housing in this area;
(vi)
special housing needs: the extent to which the project
provides affordable housing and services for persons with special needs;
(vii)
financial feasibility: the extent to which the project
is financially feasible, taking into consideration the contribution of housing
trust funds, as determined in accordance with generally accepted underwriting
standards as promulgated by federal insurers or other similar guarantors
of such projects;
(viii)
need for funds: the extent to which other resources
are not available in the locality to carry out the housing project;
(ix)
minority participation: the extent to which the project
has minorities and/or women participating in the ownership, development or
management of the project;
(x)
energy conservation: the extent to which the project design
promotes energy and/or water conservation with the result of reducing residents'
utility costs;
(xi)
innovation: the extent to which the project involves
a new or particularly innovative approach for meeting housing needs in the
area being served;
(xii)
services: the extent to which the project includes a
program of services for occupants of the proposed housing including, but
not limited to, programs that address home health care, mental health service,
alcohol and drug treatment, job training, child care and case management
and provides for tenant involvement in the development and administration
of the services;
(xiii)
cost-effectiveness: the extent to which the project
is cost-effective and provides the greatest number of affordable, decent,
safe and sanitary low, very low , and extremely low income housing units
for the least amount of housing trust funds expended or committed;
(xiv)
barriers to affordable housing: the extent to which
local governments propose to eliminate or reduce barriers to affordable housing
created by existing public policies, such as zoning regulations, building
permit requirements, etc.;
(xv)
geographic balance: the extent to which the project will
contribute to achieving a fair and equitable geographic distribution of housing
trust funds.
(b)
The Department shall establish a system for assigning
a weight to the preceding evaluation factors and giving priority to funding
application according to the weight assigned.
(c)
The Board shall have final approval on all recommendations
for funding.
§51.11.Prohibition Against Discrimination.
(a)
No person shall on the ground of race, color, family composition
(reasonable occupancy standards are acceptable), national origin or sex,
be excluded for participation in, be denied the benefits of, or be subjected
to discrimination under any program or activity funded in whole or in part
with housing trust funds made available under the Act.
(b)
Whenever the Department determines that a Recipient of
housing trust funds has failed to comply with paragraph (a) of this subsection,
the Department shall attempt to secure compliance. If within a reasonable
period of time the Recipient fails to comply, the Department may:
(1)
refer the matter to the State Attorney General with a
recommendation that an appropriate civil action be instituted; or
(2)
take such other action as may be provided by law.
§51.12. Other Program Requirements.
(a)
Employment opportunities.
(1)
No person shall be discriminated against on the basis
of race, color, handicap, religion, sex, or national origin in all phases
of employment during the performance of contracts as assisted with housing
trust funds made available under the Act.
(2)
Contractors and subcontractors on Housing Trust Fund
assisted contracts shall take affirmative action to ensure fair treatment
in employment, upgrading, demotion, or transfer, recruitment or recruitment
advertising, layoff or termination, rates of pay or other forms of compensation
and selection for training or apprenticeship.
(3)
In connection with the planning and carrying out
of any project assisted under the Act, to the greatest extent feasible, opportunities
for training and employment shall be given to low, very low, and extremely
low income persons residing within the area in which the project is located.
(b)
Conflict of Interest.
(1)
Conflict Prohibited. No person described in paragraph
(2) of this subsection who exercises or has exercised any functions or responsibilities
with respect to Housing Trust Fund activities under the Act or who is in
a position to participate in a decision making process or gain inside information
with regard to such activities, may obtain a personal or financial interest
or benefit from a Housing Trust Fund assisted activity, or have an interest
in any Housing Trust Fund contract, subcontract or agreement or the proceeds
thereunder, either for themselves or those with whom they have family or
business ties, during their tenure or for one year thereafter.
(2)
Persons Covered. The conflict of interest provisions
of paragraph (1) of this subsection apply to any person who is an employee,
agent, consultant, officer, elected official or appointed official of the
Department or State of Texas. These provisions shall not however, restrict
the Department from utilizing trust funds as authorized under §51.6(d)
of this title (relating to Basic Eligible Activities).
§51.13. Citizen Participation.
(a)
The Department shall hold at least one public hearing
annually, and additional public hearings prior to consideration if any proposed
significant changes to these rules, to solicit comments from the public,
eligible applicants, and Recipients on the Department's rule, guidelines,
and procedures for the Housing Trust Fund.
(b)
The Department shall consider the comments it receives
at public hearings. The Board shall annually review the performance, administration,
and implementation of the Housing Trust Fund in light of the comments it
receives. At this time the Board shall also review funding goals and set-asides
established in §51.5. of this title (relating to Allocation of Housing
Trust Funds).
(c)
Applications for housing trust funds are public information
and the Department shall afford the public an opportunity to comment on proposed
housing projects prior to making awards.
(d)
Complaints will be handled in accordance with the Departments
complaint procedures of 10 TAC, §12.
§51.14. Records to be Maintained.
(a)
The Department shall maintain the following records on
projects assisted with housing trust funds:
(1)
A copy of all applications submitted in response to a
request for funding proposals;
(2)
A copy of a written agreement with each Recipient
of housing trust funds indicating the total number of dwelling units which
will be financed, rehabilitated, acquired, constructed, or assisted with
housing trust funds;
(3)
The total cost of the project, including both housing
trust funds and other funds;
(4)
The agreement with the Recipient on the affordability
of the dwelling unit;
(5)
The size and income of the household for each unit
occupied by a low, very low, or extremely low income person or family;
(6)
Data on the extent to which each racial and ethnic
group and single-headed households (by gender of household head) have applied
for and benefited from any project or activity funded in whole or in part
with housing trust funds made available under the Act. These data shall be
updated annually.
(b)
The Department shall also require, at least on an annual
basis, a report from Recipients of housing trust funds. This report shall
provide information including, but not limited to:
(1)
such information as may be necessary to determine whether
a project funded with housing trust is benefiting low, very low, and extremely
low income persons and families;
(2)
the monthly rent or mortgage payment for each dwelling
unit in each structure assisted with housing trust funds, and
(3)
such information as may be necessary to determine
whether Recipients have carried out their housing activities in accordance
with the requirements and primary objectives of the housing trust fund and
implementing regulations.
§51.16. Department Funding.
Notwithstanding the application procedures set forth under §51.9
of this title (relating to Application Procedure and Requirements), the Board,
in its discretion may allocate funds to the Department to acquire real property
to endow the housing trust fund.
§51.17. Funding Cap.
No more than 25% of the housing trust funds may be allocated to any
single project for each/any calendar year. The Board in its discretion, may
waive the provision of this section.
§51.18.Waiver.
The Board may, in its discretion, waive any one or more of the rules
set forth in this chapter to accomplish its legislative mandates and/or bond
criteria.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January
16, 1998.
TRD-9800737
Larry Paul Manley
Executive Director
Texas Department of Housing and Community Affairs
Effective date: February 5, 1998
Proposal publication date: October 24, 1997
For further information, please call: (512) 475-3726