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Presentation, discussion, and possible action authorizing the Executive Director to approve a National Housing Trust Fund Notice of Funding Availability for certain declared disaster counties, subject to the approval of necessary waivers by HUD
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RECOMMENDED ACTION
recommendation
WHEREAS, the Department’s 2025-1 National Housing Trust Fund Notice of Funding Availability (NHTF NOFA) was released earlier this year, which made available $20,033,361 of NHTF, which is the amount that must be committed in order for the Department to meet the commitment deadline for its 2023 NHTF grant, which is August 3, 2025;
WHEREAS, an Application was withdrawn recently, and the Department will have approximately $5,902,070 in uncommitted NHTF as of the deadline, which would likely cause the funds to be recaptured by HUD;
WHEREAS, staff desires to request a waiver of certain provisions from HUD, which may allow the Department to commit these funds to a qualified rental project in a disaster declared county related to the recent floods;
WHEREAS, as part of the waiver, staff would use the Governing Board’s approval of this item as evidence of a commitment on behalf of TDHCA; and
WHEREAS, in the event that HUD approves the waiver request, the Department would release a NOFA similar to the 2025-1 NHTF NOFA, which is attached to this item for review;
NOW, therefore, it is hereby
RESOLVED, that the commitment of $5,902,070 in NHTF is approved to be committed to qualified rental projects in a disaster declared county as described in DR-4879-TX, and that the Executive Director is authorized to approve a Notice of Funding Availability for these funds (and at his discretion any available NHTF program income), subject to the approval of necessary waivers by HUD.
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BACKGROUND
The Department receives grants of National Housing Trust Fund from the U.S. Department of Housing and Urban Development (HUD). These grants are typically received annually, and each grant carries a specific date by which the funds must be committed to projects, otherwise the funds may be recaptured by HUD. Earlier this year, the Department released its 2025-1 NHTF NOFA, which made available $20,033,361, which was the amount necessary to meet this year’s deadline, which is August 3, 2025. An Applicant has recently withdrawn from that NOFA, which leaves $5,902,070 in NHTF that cannot be committed to a project by the deadline following the Department’s typical processes.
While it is impossible to guarantee at this point that the funds won’t be recaptured by HUD, staff intends to request a waiver from HUD that may allow for an alternative commitment. While HUD maintains that the commitment deadline itself cannot be waived, staff has identified that it may be possible for certain definitions related to the commitment of the funds to a specific local project to be waived. Because of this, staff intends to request that HUD waive these regulatory definitions to allow the Department to commit these funds for use in counties affected by recent floods.
Board approval is necessary to proceed with this course of action for two reasons. First, it is necessary to demonstrate to HUD that, should the waiver be granted, the funds were committed by the Department prior to the deadline. Should this item be approved, then that approval will be used to demonstrate commitment. Second, to ensure that the funds move as quickly as possible in the event that the requested waiver is granted, staff is requesting that the Executive Director be authorized to approve and release a NOFA for the funds. This NOFA would be structured similar to the Department 2025-1 NHTF NOFA, which is attached to this item. That NOFA made these funds available as fully amortizing loans at 2% interest, although the Board could direct the Executive Director to offer more advantageous loan terms if desired.