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Presentation, discussion, and possible action on the 2026 Regional Allocation Formula Methodology
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RECOMMENDED ACTION
recommendation
WHEREAS, Tex. Gov’t Code §§2306.1115 and 2306.111(d) require that the Texas Department of Housing and Community Affairs (TDHCA or the Department) use a Regional Allocation Formula (RAF) to allocate its HOME Investment Partnerships (HOME) Program, Housing Tax Credit (HTC) Program, and under certain circumstances, the Texas Housing Trust Fund (HTF) Program funding; and
WHEREAS, the proposed RAF Methodology utilizes appropriate statistical data to measure affordable housing needs, available housing resources, and other factors determined by the Department to be relevant to the equitable distribution of housing funds in the urban and rural areas of the 13 State Service Regions used for planning purposes; and
WHEREAS, the proposed RAF Methodology was approved by the Governing Board at its meeting on May 8, 2025, and was available for public comment through June 17, 2025, and no public comment was received;
NOW, therefore, it is hereby
RESOLVED, that the 2026 Regional Allocation Formula Methodologies for the HOME, HTC, and, as applicable, HTF programs, in the form presented at this meeting, is hereby approved.
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BACKGROUND
The Department uses the RAF for planning purposes by utilizing appropriate statistical data to measure the affordable housing need and available resources in the 13 State Service Regions. The RAF also guides the allocation of funding to rural and urban areas within each region. The Department has flexibility in determining variables to be used in the RAF, per Tex. Gov’t Code §2306.1115(a)(3), “the department shall develop a formula that…includes other factors determined by the department to be relevant to the equitable distribution of housing funds.”
The Department revises the RAF annually to reflect current data, respond to public comment, and better assess regional housing needs and available resources. In prior RAF cycles, the RAF Methodology was updated to refine the use of Metropolitan Statistical Areas (MSAs) by using “MSA counties with urban places” and “Non-MSA counties or counties with only rural places” instead of using just MSA and Non-MSA counties to allocate between urban and rural areas. This accounts for the fact that even though a county may be a part of an MSA, all the places within that county may meet the definition of rural per Tex. Gov’t Code §2306.004(28-a). The 2026 RAF has been impacted by Maverick and Aransas counties switch from rural to urban due to the use of the updated 2023 MSA list, which is the most recent MSA list available, in the Urban Rural designation process. The 2026 Urban Rural process used the ACS 5-year 2019-2023 data. The 2026 RAF was also impacted by the addition of HOME Participating Jurisdictions by HUD, which included Travis County.
Factors for lack of kitchen and plumbing facilities are used to measure housing need for Single Family activities, as well as an additional factor for Single Family Activities called the Regional Coverage. The Regional Coverage Factor takes into account the smaller populations of rural areas as well as scattered locations of single family projects, instead of relying solely on population as an absolute.
The 2026 RAF Methodology explains the use of factors, in keeping with the statutory requirements, which include the need for housing assistance, the availability of housing resources, and other factors relevant to the equitable distribution of housing funds in urban and rural areas of the state.
The Single Family HOME, Multifamily HOME, HTC, and HTF program RAFs each use slightly different formulas because the programs have different eligible activities, households, and geographical service areas. For example, Tex. Gov’t Code §2306.111(c) requires that 95% of HOME funding be set aside for non-participating jurisdictions (non-PJs). Therefore, the Single Family and Multifamily HOME RAFs only use need and available resource data for non-PJs.
The draft RAF was available for public comment on the TDHCA Public Comment Center at <https://www.tdhca.texas.gov/tdhca-public-comment-center>. A public comment period was open from Monday, May 19, 2025, through Tuesday, June 17, 2025 at 5:00 pm Austin local time. A public hearing for the draft 2026 RAF Methodology was held at 2:00 p.m. Austin local time on Wednesday, June 4, 2025. No Public Comment was received.
The following Attachments are provided:
A. 2026 RAF Methodology
B. Example 2026 HOME SF RAF
C. Example 2065 HTF RAF
D. Example 2026 HOME MF RAF
E. Example 2026 HTC RAF
Once approved, the final 2026 RAF Methodology will be published on the Department’s website. It should be noted with this action that the Board is approving the methodology, not specific allocation amounts.
To the extent funds received/proposed to be used fall below the statutory minimum for any program/activity, or if the proposed activities fall into a statutory exception, the RAF will not be used for the program/activity in question.