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Presentation, discussion, and possible action on an extension of the development period and a waiver of 10 TAC §13.11(c)(8) for Manor Place Town Apartments Phase 2
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RECOMMENDED ACTION
recommendation
WHEREAS, Manor Place Town Apartments Phase 2 executed a contract for $3,352,213 in National Housing Trust Fund (NHTF) funds, effective July 2, 2021, with an allowable Development Period of up to 36 months from the loan closing date,
WHEREAS, the final construction inspection has been requested, and upon issuance of that inspection report, the Owner will have 90 days to complete any required corrective action;
WHEREAS, this Development received funds from the Department’s 2020 NHTF grant, which has an expenditure deadline of August 12, 2025, and the project must be closed out in HUD’s online reporting system within 120 days of the final disbursement of funds;
WHEREAS, 10 TAC §13.11(c)(8) requires that the final construction schedule be closed out prior to the final disbursement of funds, which is not possible given these deadlines;
WHEREAS, staff is requesting approval to extend the Development Period to December 1, 2025, and for a waiver of 10 TAC §13.11(c)(8) to allow for the final disbursement of funds prior to the final construction inspection being closed; and
WHEREAS, such extension will not cause the Department to miss any federal deadlines, so long as the Owner follows the timeframes outlined below;
NOW, therefore, it is hereby
RESOLVED, staff is approved to extend the Development Period for Manor Place Town Apartments Phase 2 until December 1, 2025; and
FURTHER RESOLVED, that the waiver of 10 TAC §13.11(c)(8) is approved, allowing for the final disbursement of funds prior to the closeout of the final construction inspection.
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BACKGROUND
Manor Place Town Apartments Phase 2 received a loan of $3,352,213 for the rehabilitation of a 20-unit affordable housing development in Manor, Travis County. The contract was effective July 2, 2021, and allows for a Development Period of up to 36 months. Construction is substantially complete, and the Owner has requested the final construction inspection. Once issued, that inspection report will allow for 90 days for the Owner to make any necessary corrections and submit supporting documentation to the Department for review. 10 TAC §13.11(c)(8) requires that this inspection be closed out prior to the final disbursement of funds for the project.
The Development received funds from the Department’s 2021 NHTF grant, which has an expenditure deadline of August 12, 2025, meaning that those funds must be drawn down from HUD and disbursed to the Owner prior to that date. In addition, 24 CFR §93.402(d) requires that the project be reported as completed in HUD’s Integrated Disbursement and Information system within 120 days of the date of the final project drawdown.
It is not possible for the Development or the Department to meet all the deadlines and requirements above. If the final disbursement of funds is held until the final construction inspection is closed out, then the Department will miss the expenditure deadline. Because of this, staff is requesting a waiver of 10 TAC §13.11(c)(8) to allow for the final disbursement of funds prior to the final construction inspection being closed out. While it is generally the best practice to hold the final disbursement to ensure that any necessary corrections related to the inspection are completed timely, the Department still has its normal enforcement processes, including referral to the Enforcement Committee, to ensure compliance.
Staff is also requesting approval to extend the Development Period to December 1, 2025. This will allow time for the final funds to be disbursed, the construction inspection to be closed out, and the project to be reported as completed to HUD.
It is incumbent upon the owner to expedite all matters related to this Development and this loan. The request for the final disbursement of funds must be received by the Department no later than July 25, 2025. In addition, any necessary corrective action resulting from the final construction inspection must be addressed expeditiously, as it is unlikely that the Department will be able to grant any extensions to the 90-day deadline.