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Presentation, discussion, and possible action on the 2026-2027 Texas Housing Trust Fund Biennial Plan.
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RECOMMENDED ACTION
recommendation
WHEREAS, the General Appropriations Act (GAA) enacted by the 89th Legislature appropriated the Texas Department of Housing and Community Affairs (the Department) $10,058,675 of General Revenue for the Texas Housing Trust Fund (Texas HTF) 2026-2027 biennium;
WHEREAS, Rider 9(c) of the GAA requires the Department to provide a biennial report to the Legislative Budget Board, the House Committee on Appropriations, and the Senate Committee on Finance, no later than October 1 detailing the Department’s plan to expend funds from the Texas HTF;
WHEREAS, to promote transparency and the expeditious use of these funds, the Department publishes this biennial report detailing its plan for each year’s expenditure of the Texas HTF biennial appropriation;
WHEREAS, the Texas Bootstrap Loan Program (Bootstrap Program) is a Texas HTF program for self-help housing construction in which very low-income households purchase or refinance real property on which to build new housing or repair existing homes by providing at least 65% of the necessary labor;
WHEREAS, the Amy Young Barrier Removal Program (AYBR) is a Texas HTF Program for home modification grants that increase accessibility for homeowners, tenants, and members of their household who are Persons with Disabilities, in addition to correcting other hazardous and unsafe housing conditions, as approved by the Department;
WHEREAS, the Board previously authorized the Department to retain funds in the amount of $250,000 per biennium of additional Texas HTF loan repayments to be able to address unforeseen obstacles that may arise on existing Department contracts, activities, or assets during the course of Single Family program administration, and the Department seeks to retain this authority for the 2026-2027 biennium; and
WHEREAS, staff recommends that the activities noted above warrant continuation through the 2026-2027 Texas HTF Plan as reflected in the attached plan;
NOW, therefore, it is hereby
RESOLVED, that the proposed 2026-2027 Texas Housing Trust Fund Biennial Plan, as presented, is approved and staff is authorized and directed to submit the Texas HTF Plan to appropriate legislative offices and take any other necessary actions to effectuate the foregoing; and
FURTHER RESOLVED, that the Executive Director and his designees be authorized and directed, for and on behalf of the Department, to draft and release Notices of Funding Availability based on programming as outlined in the Texas HTF Plan and Texas HTF Rule.
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BACKGROUND
The Texas Legislature established the Housing Trust Fund in 1993 to provide general revenue funds for affordable housing activities. The program receives state appropriations, which include loan repayments from previous Texas HTF projects, to fund the Texas HTF. The Department awards funding in the form of grants and/or loans to nonprofits, units of local government, councils of government, local mental health authorities, other public agencies, and public housing agencies to serve low-income households. State statute does not direct the specific activities that are to be implemented but requires the publication of a plan that details how the Department will program and expend the funds. Over the years, the Department implemented a diversity of programs with Texas HTF resources to varying success. The Texas HTF has now evolved to focus on two successful primary programs: the Bootstrap Program, which satisfies the statutory requirement to operate an owner-builder loan program, and the Amy Young Barrier Removal Program.
The GAA requires that the Department provide a biennial report to the Legislative Budget Board, the House Committee on Appropriations, and the Senate Committee on Finance, no later than October 1 detailing the Department’s plan to expend funds from the Texas Housing Trust Fund. The Texas HTF Biennial Plan is summarized below and the Plan is attached.
During the Regular Session of the 89th Legislature, the Texas HTF was appropriated $10,058,675 in General Revenue for the 2026-2027 biennium. The funding shall be utilized as follows:
The Texas HTF plan identifies various requirements from riders in the GAA and in sections of Tex. Gov’t Code Chapter 2306 that pertain to the administration of the Texas HTF. These are:
• Rider 8 which requires that $2.8 million in anticipated interest earnings and loan repayments received by the Department be included in the dollar amount appropriated each fiscal year under the Texas HTF;
• Rider 9(a) which requires that all fund deposits to the Texas HTF must be made to the Texas Treasury Safekeeping Trust Company during September of each fiscal year;
• Tex. Gov't Code §2306.111(d-1) which describes when the Regional Allocation Formula is applicable to the Texas HTF; and
• Tex. Gov't Code §2306.202 which specifies that the first $2.6 million of Texas HTF funds must be made available exclusively to units of local government, public housing authorities, and nonprofit organizations.
The Texas HTF plan includes program descriptions for the two Texas HTF-funded programs, program budgets, maximum assistance amounts, eligibility requirements, administrative funding, and applicability of regional allocation of funding.
The Texas HTF plan also describes administrative processes and funding considerations that facilitate Single Family operations over the course of the biennium. For example, the Texas HTF plan utilizes no more than $250,000 per biennium of the Texas HTF loan repayments that exceed the requirements under Rider 8 of the GAA for practical solutions and development workouts that are not readily addressed with federal funds. The Texas HTF plan also establishes the use of late fees collected from Texas HTF borrowers for conducting certain Single Family asset management transactions for which there are few other Department funds available. Such administrative elements of the Texas HTF Plan allow the Department to better manage risk and fulfill its mission.
The Texas HTF Plan authorizes staff to proceed with issuing Notices of Funding Availability (NOFAs) to expedite utilization of funds, as long as those NOFAs are reflective of the Texas HTF Plan and Texas HTF Rules. Staff will commit and expend funds via contracts and reservation agreements and may amend NOFAs from time to time. Funds will be released consistent with the annual appropriations of $5,028,454 for FY 2026 and $5,030,221 for FY 2027 (less funds for state administrative expenses), with additional funding available from interest and earnings as described in the Texas HTF Plan.
Staff recommends that the board approve, or approve with amendments, the proposed 2026-2027 Texas HTF Biennial Plan for staff to submit to the Legislative Budget Board, the House Appropriations committee, and the Senate Finance committee, and authorize staff to draft and release NOFAs based on programming outlined in the Texas HTF Plan and Texas HTF Rule.