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Presentation, discussion, and possible action on an order proposing the repeal of 10 TAC Chapter 12, concerning the Multifamily Housing Revenue Bond Rules, and an order proposing new 10 TAC Chapter 12 concerning the Multifamily Housing Revenue Bond Rules, 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, the Department is authorized to issue multifamily housing revenue bonds for the State of Texas by Tex. Gov’t Code §2306.351 and Tex. Gov’t Code §2306.359 requires the Department to provide for specific scoring criteria and underwriting considerations for multifamily private activity bond activities;
WHEREAS, the Department developed the Multifamily Housing Revenue Bond Rules to establish the procedures and requirements relating to the issuance of bonds; and
WHEREAS, such proposed rulemaking will be published in the Texas Register for public comment and subsequently 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 are hereby authorized, empowered, and directed for and on behalf of the Department, to cause the proposed repeal of the current 10 TAC Chapter 12, Multifamily Housing Revenue Bond Rules, and the proposed new 10 TAC Chapter 12, Multifamily Housing Revenue Bond Rules, together with the preambles in the form presented to this meeting, to be published in the Texas Register for public comment and, in connection therewith, make non-substantive technical corrections as they may deem necessary to effectuate the foregoing including any requested revisions to the preambles.
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BACKGROUND
Attached to the Board Action Request is a draft that reflects the proposed changes to the 2026 Draft Multifamily Housing Revenue Bond Rules, and incorporates staff’s recommendations for the Board’s consideration. The proposed changes primarily include inclusion of the potential for Qualified 501(c)(3) bond issuances and requirements associated with them. Staff notes that the provision for issuing Qualified 501(c)(3) Bonds has been in the Bond Rules previously, but was removed several years ago as the Department shifted away from such issuances. The reintroduction of the Qualified 501(c)(3) Multifamily Bond Program concept would provide financing to nonprofit developers of new or existing multifamily rental properties to generate or preserve affordable rental housing.
Moreover, the scoring item relating to the 50% test has been removed. Shortly after this scoring item was included in the rule, state law was changed to allow for a maximum 55% test when the bond ceiling is oversubscribed and there have been recent changes to federal law that lowers this threshold to 25%. Staff has removed this item pending how the industry responds to the new lower limit before bringing the scoring item back into the rule.