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Presentation, discussion, and possible action on the proposed repeal of 10 TAC §10.802, Written Policies and Procedures; proposed new 10 TAC §10.802, Written Policies and Procedures; and directing their publication for public comment in the Texas Register
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RECOMMENDED ACTION
recommendation
WHEREAS, pursuant to Tex. Gov’t Code §2306.053, the Texas Department of Housing and Community Affairs (the Department) is authorized to adopt rules governing the administration of the Department and its programs;
WHEREAS, staff proposes changes to 10 TAC §10.802, Written Policies and Procedures to incorporate changes made by the U.S. Department of Housing and Urban Development (HUD) to 24 CFR Part 92 by the 2025 HOME Final Rule;
WHEREAS, the proposed changes to 10 TAC §10.802 clarify notification requirements to tenants that reside in units governed under the HOME program, and revise the number of methods of contact for a HOME property that must be in a Developments Written Policies and Procedures;
WHEREAS, staff is also recommending a change to the means by which a property owner with multifamily development loan funds which utilize Contracts, can effectuate a tenant leasing preference that is not required by the Department or another fund source, but impacts Department units, to make this process less onerous; and
WHEREAS, such proposed rulemaking will be published in the Texas Register to receive public comment from January 30, 2026, to March 3, 2026, and returned to the Board for final adoption;
NOW, therefore, it is hereby
RESOLVED, that the Executive Director and his designees, be and each of them hereby are authorized, empowered, and directed, for and on behalf of the Department, to cause the proposed repeal of 10 TAC §10.802 Written Policies and Procedures, and the proposed new 10 TAC §10.802 Written Policies and Procedures, are approved for publication in the Texas Register for public comment, and in connection therewith, make such non-substantive technical corrections as they may deem necessary to effectuate the foregoing, including the preparation of the subchapter specific preambles and any requested changes to the preambles.
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BACKGROUND
The purpose of the changes proposed to 10 TAC §10.802 is to comply with the HOME final rule published in the Federal Register on January 6, 2025. The final rule was originally scheduled to take effect February 5, 2025; however, on February 3, 2025, HUD delayed the effective date of the HOME Final Rule until April 20, 2025, consistent with the President's January 20, 2025, memorandum titled “Regulatory Freeze Pending Review.” The compliance dates detailed in various paragraphs of 24 CFR §92.3 of the HOME Final Rule are being revised to April 30, 2026, to ensure participating jurisdictions have a 1-year compliance period, as originally described in the HOME Final Rule.
Staff are proposing these changes now in order to have the necessary changes in effect by April 30, 2026, deadline to be in compliance with the HOME final rule.
Changes to the Written Policies and Procedures rule require a development owner to:
• Addition at §10.802(g)(2)(E) - Provide non-renewal and termination notices to TDHCA before delivering them to tenants of HOME units, HOME match units, and TCAP-RF units used as HOME match units.
• Addition at §10.802(k) - Requires Developments funded via Direct Loan and that have HOME Match units to list at least two methods to contact the property in the Development’s written policies and procedures.
Additionally, one other change is being made. Over the last two years the Department has consistently been asked by one supportive housing developer to change §10.802(b)(2)(A) of this rule so that the process for a property that wants to put in place a voluntary preference tied to another non-Department funding source is less challenging. Currently when a property wants to add a voluntary preference (such as for homeless families) they must get Department permission and have it recorded in the Land Use Restriction Agreement (LURA). This is because Section 2306.185(d) of the Tex. Gov’t Code, requires that a LURA have provisions that allow Section 2306.269 (concerning tenant selection criteria) to be enforceable by third-parties. The Owner has represented that a LURA amendment is a time-consuming process that requires the Developer to get concurrence from all parties to the transaction including lenders and investors and can take up to a year to effectuate.
This rule is in place to ensure that there is a written agreement between the property and the Department relating to tenant preferences as required by federal funding requirements, and to ensure that properties are not applying preferences without Department authority which may be in conflict in some cases with fair housing laws and IRS general public use rules. It should be noted that the Department does not enforce the Fair Housing Act in Texas, but rather Texas Workforce Commission does so. Staff feels strongly that all such preferences still must require Department authorization and that they be in a written agreement, however staff is suggesting a revision that this agreement may be a Contract between the Department and the Owner so long as the Contract is in effect.
Upon Board approval, the proposed rule actions will be published in the Texas Register and released for public comment from January 30, 2026, to March 3, 2026. Behind the preamble is a copy of the rule in blackline form reflecting the changes being proposed from the current version of the rule.