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Presentation, discussion, and possible action on a scoring appeal for Meadow Heights (25065)
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RECOMMENDED ACTION
recommendation
WHEREAS, Meadow Heights, LP submitted a 2025 9% Housing Tax Credit Application claiming points under the Quantity of Low-Income Units scoring item;
WHEREAS, to qualify for two points in this subregion, an Application must provide 104 low-income units, and the Meadow Heights Application only provides 95;
WHEREAS, the Department issued a Limited Scoring Notice on May 21, 2025, which in part reduced the Application’s score by the two points associated with this scoring item, as the Application did not provide a sufficient number of low-income units to qualify;
WHEREAS, the Applicant appealed this scoring reduction, acknowledging the error but asserting that the matter should be resolved through the Administrative Deficiency process;
WHEREAS, the Executive Director issued a response on June 5, 2025, denying the request to revise the Application to add additional low-income units, citing that such a change is prohibited under 10 TAC §11.1(d)(2)(B)(ii);
WHEREAS, the Applicant has requested to appeal the denial regarding Quantity of Low-Income Units to the Governing Board;
NOW, therefore, it is hereby
RESOLVED, that the appeal of the staff determination related to the Quantity of Low-Income Units scoring item for Meadow Heights is hereby denied.
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BACKGROUND
Meadow Heights is a 2025 9% housing tax credit Application that proposes the reconstruction of 95 low-income and 19 market-rate units in Pharr, Hidalgo County. The Applicant claimed two points under the Quantity of Low-Income Units scoring item, which awards points to Applications that propose a certain number of low-income units. To qualify for two points in this subregion, the Application must provide at least 104 low-income units. Because the Application only provides 95 low-income units, staff issued a limited scoring notice to notify the Applicant that the two points in question had been deducted.
The Applicant appealed this notice, acknowledging the error and requesting to revise the Application to convert nine market-rate units to low-income units. The appeal references other Applications that were allowed to correct documentation related to Proximity to Jobs, which awards points to Applications that are located within close proximity to jobs as determined by Census data, and draws a comparison to those corrections; however, there is a clear difference between these two situations under the existing rules.
Tex. Gov’t Code §2306.6708 prohibits Applicants from changing or supplementing an Applicant after the filing deadline, except for correcting Administrative Deficiencies. 10 TAC §11.1(d)(2) defines “Administrative Deficiency,” and establishes the types of issues that are and are not correctable through that process. In accordance with that definition, the following is curable:
(II) For scoring items that are predicated solely on third-party data, characteristics inherent to the proposed Development Site, or are otherwise not influenced by the actions of the Applicant, the Application's eligibility for these points can be clearly established to have existed prior to the Full Application Delivery Date (Competitive HTC) or the Application Acceptance Date (Direct Loan), and the submission of the documents does not necessitate additional changes in the Application to qualify for the points.
The data used to determine whether a Development Site is within proximity to a qualifying number of jobs is published by the Census annually, and is not influenced by the actions of the Applicant. Whether a tract of land is within proximity to a qualifying number of jobs as of the Full Application Delivery Date is a matter of objective fact, and the substantiation of eligibility for points related to that scoring item is clearly established within the rules to be allowable through the Administrative Deficiency process so long as no changes are made to the Application.
In contrast, 10 TAC §11.1(d)(2) explicitly prohibits the following from being corrected through the Administrative Deficiency process:
(ii) Changes to the Application that are submitted only to qualify for points claimed in the Application.
The Meadow Heights Application does not provide enough low-income units to qualify for Quantity of Low-Income Units points. Revising the Meadow Heights unit restrictions to meet a scoring threshold would be a change made to the Application only to qualify for points, and is therefore prohibited by the rules. Because of this, staff recommends that the appeal be denied.