title
Presentation, discussion, and possible action on the proposed repeal of 10 TAC Chapter 11 concerning the Housing Tax Credit Program Qualified Allocation Plan, proposed new 10 TAC Chapter 11 concerning the Housing Tax Credit Program Qualified Allocation Plan, and directing their publication for public comment in the Texas Register
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RECOMMENDED ACTION
recommendation
WHEREAS, the Texas Department of Housing and Community Affairs (the Department) is authorized by Tex. Gov’t Code Ch. 2306, Subchapter DD, to make Housing Tax Credit allocations for the State of Texas;
WHEREAS, pursuant to Tex. Gov’t Code §2306.053 the Department is authorized to adopt rules governing the administration of the Department and its programs;
WHEREAS, the Department, as required by §42(m)(1) of the Internal Revenue Code and Tex. Gov’t Code §2306.67022, developed this proposed Qualified Allocation Plan (QAP) to establish the procedures and requirements relating to an allocation of Housing Tax Credits;
WHEREAS, upon approval of the proposed QAP, the rule will be made available for public comment in the Texas Register through October 9, 2026, and then returned to the Board for final approval; and
WHEREAS, pursuant to Tex. Gov’t Code §2306.6724, the Board shall adopt a proposed Qualified Allocation Plan no later than September 30 and, on or before November 15, submit it to the Governor to approve, reject, or modify and approve no later than December 1;
NOW, therefore, it is hereby
RESOLVED, that the proposed repeal of 10 TAC Chapter 11, and a proposed new 10 TAC Chapter 11 concerning the Housing Tax Credit Qualified Allocation Plan together with the preambles presented to this meeting, are hereby approved for publication in the Texas Register for public comment; and
FURTHER 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 Qualified Allocation Plan, together with the changes, if any, made at this meeting and the preambles, in the form presented to this meeting, to be published in the Texas Register for public comment and, in connection therewith, make such non-substantive technical corrections, including any required revisions to the preambles, as they may deem necessary to effectuate the foregoing.
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BACKGROUND
General Information: Attached to this Board Action Request is the Qualified Allocation Plan (QAP), which reflects staff’s recommendations for the Board’s consideration. The attached QAP identifies the differences between the 2026 QAP and the proposed 2027 QAP in blackline format. The QAP submitted to the Texas Register will be a proposed new version of the 2027 QAP and will not identify changes between 2026 and 2027. The Department’s Public Comment page will also include a blackline version of the proposed 2027 QAP, as approved by the Board to facilitate stakeholders’ engagement with the changes.
The QAP and Rules Committee of the Governing Board held a public meeting on June 3, 2026, during which Committee members received comment from the public regarding potential changes to the QAP. The draft 2027 QAP presented to the Board today incorporates the changes the Rules Committee instructed staff to bring forward for consideration by the Board and publication for public comment.
Rule-Making Timeline: Upon Board approval, the 2027 proposed QAP will be posted to the Department’s website and published in the Texas Register. Public comment will be accepted from September 18, 2026, to October 9, 2026. Staff will then consider and prepare reasoned responses to public comment as part of the final action of the QAP that will be brought before the Board on November 5, 2026, for approval. Subsequently, the QAP will be submitted to the Officer of the Governor not later than November 15, 2026, for him to approve, approve with changes, or reject. Upon the Governor’s approval, approval with modifications, or rejection, which must occur no later than December 1, 2026, the adopted 2027 QAP will be published in the Texas Register and posted to the Department’s website. In May 2026, staff met with stakeholders to discuss the 2026 QAP. Discussions occurred in-person. Staff and stakeholders discussed items such as Minimum Rehabilitation Standards, Neighborhood Risk Factors/Undesirable Site Features, and Tiebreakers. In June 2026, staff met with tenants and stakeholders to discuss the 2026 QAP. Discussions occurred virtually through a workgroup. Staff, tenants, and stakeholders discussed items such as tenant specific requests for developments, and amenities that should be priorities for tenants.
Summary of Proposed Changes:
While not inclusive of all changes proposed, a description of the more significant recommendations that are considered changes of policy are described below. The vast majority of changes to the 2027 QAP Draft are copy-edits for clarity and readability. As such, they will not be included in the summary below. Should any conflict exist between this summary and the proposed text of the rule, the rule itself will be controlling.
10 TAC Chapter 11, Subchapter A
§11.6(d)(1) Definitions: Achievable Affordable Rent- Added a new definition.
§11.6(d)(22) Definitions: Common Area- Added additional clarifying language to the Common Area definition.
§11.6(d)(92) Definitions: Parcel- Added a new definition.
§11.6(d)(102) Definitions: Pro Forma Rent- Added Achievable Affordable Rent to the definition.
§11.6(d)(122) Definitions: Site Demographics Characteristics Report- Added a new definition.
§11.2(a) Program Calendar for Housing Tax Credits- This section has been modified to reflect dates for the 2027 Application round.
§11.5(3)(F) At-Risk Set-Aside- Condensed language to simply reference Code §42.
§11.6(3) Award Recommendation Methodology- Added clarifying language regarding Staff Application review process.
§11.7(2)(iii) Tie Breaker Factors: Full-Service Grocery Store- Removed language for grocery stores to require selling seafood to be considered eligible as a tiebreaker option.
§11.7(2)(v) Tie Breaker Factors: Pharmacy- Added a new tiebreaker. Added language listing requirements for a pharmacy to be considered eligible as a tiebreaker option.
10 TAC Chapter 11, Subchapter B
§11.101(a)(2)(E) HUD Mitigation- Added language stating the Department will accept mitigation efforts directly from the cited HUD source.
§11.101(a)(3)(C) Crime- Added language for Reconstruction Applications to be excluded from being exempt for triggering a Crime NRF.
§11.101(b)(1)(A)(xi) Ineligible Developments- Added language that a Site located in a census tract with a poverty rate above 40% (or 55% in regions 11 and 13) will be considered ineligible unless a resolution from the Governing Body is provided.
§11.101(b)(4)(K) Mandatory Development Amenities- Replaced language to lighting for this amenity.
§11.101(b)(4)(L) Mandatory Development Amenities- Added language to require all heating and air-conditioning to be provided by an electric heat pump system. Added language to give exemptions for Rehabilitation Developments, but excluding Reconstruction Developments from the exemption.
§11.101(b)(5)(C)(iv)(VIII) Community Space for Resident Supportive Services: Design/Landscaping amenities- Added a new 1-point scoring item for including at least two elevators for Sites that have each unit above the first floor.
§11.101(b)(7) Resident Supportive Services- Added language to require a 45-day notice be issued to tenants on any supportive service changes.
10 TAC Chapter 11, Subchapter C
§11.204(6)(B) Gap Financing- Added language requiring all soft or below market rate financing to be committed by a 10% test for Competitive Applications.
10 TAC Chapter 11, Subchapter D
§11.302(d)(1) Operating Feasibility: Income- Added Achievable Affordable Rent to the section.
§11.302(d)(1)(iii) Operating Feasibility: Achievable Affordable Rents- Added Achievable Affordable Rent for Underwriter tests on a Development’s operating feasibility.
§11.302(d)(1)(viii) Operating Feasibility: Achievable Affordable Rents- Added Achievable Affordable Rent to the section.
§11.302(i)(1) Feasibility Conclusion: Added new language and chart for Capture Rates.
§11.303(c)(1) Market Analyst Qualifications: Replaced language to 24 months for Market Analysis submission window. Added clarifying language to October 1st of the second year following the analyst’s most recent submission.
§11.303(d)(10)(B) Market Analysis Contents- Added Achievable Affordable Rent to the section.
§11.303(d)(10)(B)(vi) Market Analysis Contents- Added Achievable Affordable Rent to the section.
10 TAC Chapter 11, Subchapter E
§11.901(2) Refund of Competitive HTC Pre-Application Fees- Added language that after February 1 the Department will not issue a refund for Pre-Application fees.
10 TAC Chapter 11, Subchapter F
No major changes to the QAP in this subchapter.
Attachment 1: Preamble, including required analysis, for proposed repeal of 10 TAC Chapter 11, Qualified Allocation Plan
The Texas Department of Housing and Community (the Department) proposes the repeal of 10 TAC Chapter 11, Qualified Allocation Plan (QAP). The purpose of the proposed repeal is to eliminate an outdated rule while adopting a new updated rule under separate action.
The Department has analyzed this proposed rulemaking and the analysis is described below for each category of analysis performed.
a. GOVERNMENT GROWTH IMPACT STATEMENT REQUIRED BY TEX GOV’T CODE §2001.0221.
1. Mr. Bobby Wilkinson, Executive Director, has determined that, for the first five years the proposed repeal would be in effect, the proposed repeal does not create or eliminate a government program, but relates to the repeal, and simultaneous readoption making changes to an existing activity, concerning the allocation of Low-Income Housing Tax Credits (LIHTC).
2. The proposed repeal does not require a change in work that would require the creation of new employee positions, nor is the proposed repeal significant enough to reduce work load to a degree that any existing employee positions are eliminated.
3. The proposed repeal does not require additional future legislative appropriations.
4. The proposed repeal does not result in an increase in fees paid to the Department or in a decrease in fees paid to the Department.
5. The proposed repeal is not creating a new regulation, except that it is being replaced by a new rule simultaneously to provide for revisions.
6. The proposed action will repeal an existing regulation, but is associated with a simultaneous adoption of the subchapters in 10 TAC Chapter 11, the Qualified Allocation Plan, in order to better address the requirements of Tex. Gov’t Code Ch. 2306, Subchapter DD.
7. The proposed repeal will not increase or decrease the number of individuals subject to the rule’s applicability.
8. The proposed repeal will not negatively or positively affect this state’s economy.
b. ADVERSE ECONOMIC IMPACT ON SMALL OR MICRO-BUSINESS OR RURAL COMMUNITIES AND REUGLATORY FLEXIBILITY REQUIRED BY TEX. GOV’T CODE §2006.002.
The Department has evaluated this proposed repeal and determined that the proposed repeal will not create an economic effect on small or micro-businesses or rural communities.
c. TAKINGS IMPACT ASSESSMENT REQUIRED BY TEX GOV’T CODE §2007.043.
The proposed repeal does not contemplate or authorize a takings by the Department; therefore, no Takins Impact Assessment is required.
d. LOCAL EMPLOYMENT IMPACT STATEMENTS REQUIRED BY TEX GOV’T CODE §2001.024(a)(6).
The Department has evaluated the proposed repeal would be in effect there would be no economic effect on local employment; therefore no local employment impact statement is required to be prepared for the rule.
e. PUBLIC BENEFIT/COST NOTE REQUIRED BY TEX GOV’T CODE §2001.024(a)(5).
Mr. Wilkinson has also determined that, for each year of the first five years the proposed repeal is in effect, the public benefit anticipated as a result of the repealed section would be an updated and more germane rule for administering the allocation of LIHTC. There will not be economic costs to individuals required to comply with the repealed section.
f. FISCAL NOTE REQUIRED BY TEX GOV’T CODE §2001.024(a)(4).
Mr. Wilkinson has determined that for each year of the first give years the proposed repeal is in effect, enforcing or administering the repeal does not have any foreseeable implications related to costs or revenues of the state or local governments.
REQUEST FOR PUBLIC COMMENT. The public comment period will be held September 18, 2026 and October 9, 2026, to receive stakeholder comment on the proposed repealed section. Written comments may be submitted to the Texas Department of Housing and Community Affairs, Attn: Dominic DeNiro, QAP Public Comments, or by email to dominic.deniro@tdhca.texas.gov <mailto:dominic.deniro@tdhca.texas.gov>. ALL COMMENTS MUST BE RECEIVED BY 5:00 P.M. Austin local (Central) time OCTOBER 9, 2026.
STATUTORY AUTHORITY. The proposed repeal is made to pursuant to Tex. Gov’t Code §2306.053, which authorizes the Department to adopt rules. Except as described herein the proposed repealed sections affect no other code, article, or statute.
10 TAC Chapter 11, Qualified Allocation Plan
SUBCHAPTER A
§11.1 General
§11.2 Program Calendar for Housing Tax Credits
§11.3 Housing De-Concentration Factors
§11.4 Tax Credit Request and Award Limits
§11.5 Competitive HTC Set-Asides. (§2306.111(d))
§11.6 Competitive HTC Allocation Process
§11.7 Tie Breaker Factors
§11.8 Pre-Application Requirements (Competitive HTC Only)
§11.9 Competitive HTC Selection Criteria
§11.10 Third Party Request for Administrative Deficiency for Competitive HTC Applications
SUBCHAPTER B
§11.101 Site and Development Requirements and Restrictions
SUBCHAPTER C
§11.201 Procedural Requirements for Application Submission
§11.202 Ineligible Applicants and Applications
§11.203 Public Notifications (§2306.6705(9))
§11.204 Required Documentation for Application Submission
§11.205 Required Third Party Reports
§11.206 Board Decisions (§§2306.6725(c); 2306.6731; and 42(m)(1)(A)(iv))
§11.207 Waiver of Rules
SUBCHAPTER D
§11.301 General Provisions
§11.302 Underwriting Rules and Guidelines
§11.303 Markey Analysis Rules and Guidelines
§11.304 Appraisal Rules and Guidelines
§11.305 Environmental Site Assessment Rules and Guidelines
§11.306 Property Condition Assessment Guidelines
SUBCHAPTER E
§11.901 Fee Schedule
§11.902 Appeals Process
§11.903 Adherence to Obligations
§11.904 Alternative Dispute Resolution (ADR) Policy
§11.905 General Information for Commitments or Determination Notices
§11.906 Commitment and Determination Notice General Requirements and Required Documentation
§11.907 Carryover Agreement General Requirements and Required Documentation
SUBCHAPTER F
§11.1001 General
§11.1002 Program Calendar for State Housing Tax Credits Associated with Competitive HTC Applications
§11.1003 Set-Aside for Previously Awarded Developments for Competitive HTC Applications
§11.1004 Procedural Requirements for Requests for State Housing Tax Credits Associated with Competitive HTC Applications
§11.1005 Required Documentation for State Housing Tax Credit Request Submission Associated with Competitive HTC Applications
§11.1006 State Housing Tax Credits Underwriting and Loan Policy Associated with Competitive HTC
§11.1007 State Housing Tax Credits Selection Criteria Associated with Competitive HTC Applications
§11.1008 State Housing Tax Credits for Tax-Exempt Bond Developments
Attachment 2 Preamble, including required analysis, for proposed new 10 TAC Chapter 11, Qualified Allocation Plan
The Texas Department of Housing and Community Affairs (the “Department”) proposes new 10 TAC Chapter 11, Qualified Allocation Plan (QAP). The purpose of the proposed new section is to provide compliance with Tex. Gov’t Code §2306.67022 and to update the rule to: add new definitions; clarify multiple definitions; update the Program Calendar; modify requirements for grocery store tiebreaker eligibility; add Pharmacies as a new tiebreaker; update Mandatory Amenity Requirements; require Development Staff to provide a 45-day notice to tenants for changes in supportive services; and to significantly reduce the reduce wordcount for readability. increase Eligible building costs to respond to inflation; and update various financing and term sheet requirements.
Tex. Gov’t Code §2001.0045(b) does not apply to the rule proposed for action for two reasons: 1) the state’s adoption of the QAP is necessary to comply with IRC §42; and 2) the state’s adoption of the QAP is necessary to comply with Tex. Gov’t Code §2306.67022. The Department has analyzed this proposed rulemaking and the analysis is described below for each category of analysis performed.
a. GOVERNMENT GROWTH IMPACT STATEMENT REQUIRED BY TEX GOV’T CODE §2001.0221.
Mr. Bobby Wilkinson, Executive Director, has determined that, for the first five years the proposed new rule would be in effect:
1. The proposed rule does not create or eliminate a government program, but relates to the readoption of this rule, which makes changes to an existing activity, concerning the allocation of Low Income Housing Tax Credits (LIHTC).
2. The proposed new rule does not require a change in work that would require the creation of new employee positions, nor are the rule changes significant enough to reduce work load to a degree that eliminates any existing employee positions.
3. The proposed rule changes do not require additional future legislative appropriations.
4. The rule changes will not result in any increases or decreases in fees.
5. The proposed rule is not creating a new regulation, except that it is replacing a rule being repealed simultaneously to provide for revisions.
6. The proposed rule will not limit or repeal an existing regulation, but can be considered to “expand” the existing regulations on this activity because the proposed rule has sought to clarify Application requirements. Some “expansions” are offset by corresponding “contractions” in the rules, compared to the 2026 QAP. Notably, the Department has sought to remove superfluous language wherever possible and to consolidate rules to reflect current process. These additions, removals, and revisions to the QAP are necessary to ensure compliance with IRC §42 and Tex. Gov’t Code §2306.67022.
7. The proposed rule will not increase or decrease the number of individuals subject to the rule’s applicability; and
8. The proposed rule will not negatively affect the state’s economy, and may be considered to have a positive effect on the state’s economy because changes at 10 TAC §11.9(c)(7), Proximity to Job Areas, may help to encourage the Development of affordable multifamily housing in robust markets with strong and growing economies.
b. ADVERSE ECONOMIC IMPACT ON SMALL OR MICRO-BUSINESSES OR RURAL COMMUNITIES AND REGULATORY FELXIBILITY REQUIRED BY TEX GOV’T CODE §2006.002. The Department, in drafting this proposed rule, has attempted to reduce any adverse economic effect on small or micro-business or rural communities while remaining consistent with the statutory requirements of Tex. Gov’t Code §2306.67022. Some stakeholders have reported that their average cost of filing an Application is between $50,000 and $60,000, which may vary depending on the specific type of Application, location of the Development Site, and other non-state of Texas funding sources utilized. The proposed rules do not, on average, result in an increased cost of filing an application as compared to the existing program rules.
1. The Department has evaluated this rule and determined that none of the adverse effect strategies outlined in Tex. Gov’t Code §2006.002(b) are applicable.
2. There are approximately 100 to 150 small or micro-businesses subject to the proposed rule for which the economic impact of the rule may range from $480 to many thousands of dollars, just to submit an Application for Competitive or non-Competitive HTCs. The Department bases this estimate on the potential number of Applicants and their related parties who may submit applications to TDHCA for LIHTC. The fee for submitting an Application for LIHTC is $30 per unit, and all Applicants are required to propose constructing, at a minimum, 16 Units. While, in theory, there is no limit to the number of Units that could be proposed in a single Application, practically speaking, the Department sees few proposed Developments larger than 350 Units, which, by way of example, would carry a fee schedule of $10,500. These Application Fee costs are not inclusive of external costs required by the basic business necessities underlying any real estate transaction, from placing earnest money on land, conducting an Environmental Site Assessment, conducting a market study, potentially retaining counsel, hiring an architect and an engineer to construct basic site designs and elevations, and paying any other related, third-party fees for securing the necessary financing to construct multifamily housing. Nor does this estimate include fees from the Department for Applications that successfully attain an award.
There are approximately 1,376 rural communities potentially subject to the proposed rule for which the economic impact of the rule is projected to be $0. The proposed rule places no financial burdens on rural communities, as the costs associated with submitting an Application are born entirely by private parties. If anything, a rural community securing a LIHTC Development will experience an economic benefit, not least among which is the potential increased property tax revenue from a large multifamily Development.
3. The Department has determined that because there are rural tax credit awardees, this program helps promote construction activities and long term tax base in rural areas of Texas. Aside from the fees and costs associated with submitting an Application, there is a probable positive economic effect on small or micro-businesses or rural communities that receive LIHTC awards and successfully use those awards to construct multifamily housing, although the specific impact is not able to be quantified in advance.
c. TAKINGS IMPACT ASSESSMENT REQUIRED BY TEX GOV’T CODE §2007.043. The proposed rule does not contemplate or authorize a takings by the Department. Therefore, no Takings Impact Assessment is required.
d. LOCAL EMPLOYMENT IMPACT STATEMENTS REQUIRED BY TEX GOV’T CODE §2001.024(a)(6). The Department has evaluated the rule as to its possible effects on local economies and has determined that for the first five years the rule will be in effect the proposed rule may provide a possible positive economic effect on local employment in association with this rule since LIHTC Developments often involve a total input of, typically at a minimum, $5 million in capital, but often an input of $10 million - $30 million. Such a capital investment has concrete direct, indirect, and induced effects on the local and regional economies. However, because the exact location of where program funds and development are directed is not determined in rule, there is no way to determine during rulemaking where the positive effects may occur. Furthermore, while the Department knows that any and all impacts are positive, that impact is not able to be quantified for any given community until a proposed Development is actually awarded LIHTC, given the unique characteristics of each proposed multifamily Development and region in which it is being developed.
Texas Gov’t Code §2001.022(a) states that this “impact statement must describe in detail the probable effect of the rule on employment in each geographic region affected by this rule…” Considering that significant construction activity is associated with any LIHTC Development and that each apartment community significantly increases the property value of the land being developed, there are no probable negative effects of the new rule on particular geographic regions. If anything, positive effects will ensue in those communities where developers receive LIHTC awards.
e. PUBLIC BENEFIT/COST NOTE REQUIRED BY TEX GOV’T CODE §2001.024(a)(5). Mr. Wilkinson has determined that, for each year of the first five years the new section is in effect, the public benefit anticipated as a result of the new section will be an updated and more germane rule for administering the allocation of LIHTC with considerations made for applicants as it relates to the impact of the COVID-19 pandemic on the application process. Other than the fees mentioned in section a4 above, there is no change to the economic cost to any individuals required to comply with the new section because the same processes described by the rule have already been in place through the rule found at this section being repealed. The average cost of filing an application remains between $50,000 and $60,000, which may vary depending on the specific type of application, location of the development site, and other non-state of Texas funding sources utilized. The proposed rules do not, on average, result in an increased cost of filing an application as compared to the existing program rules.
f. FISCAL NOTE REQUIRED BY TEX GOV’T CODE §2001.024(a)(4). Mr. Wilkinson also has determined that for each year of the first five years the new section is in effect, enforcing or administering the new section does not have any foreseeable implications related to costs or revenues of the state or local governments because the same processes described by the rule have already been in place through the rule found at this section being repealed. If anything, Departmental revenues may increase due to a comparatively higher volume of Applications, which slightly increases the amount of fees TDHCA receives.
REQUEST FOR PUBLIC COMMENT AND INFORMATION RELATED TO COST, BENEFIT OR EFFECT. The Department requests comments on the rule and also requests information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis from any person required to comply with the proposed rule or any other interested person. The public comment period will be held from September 18, 2026, to October 9, 2026 to receive stakeholder comment on the new proposed section. Written comments may be submitted to the Texas Department of Housing and Community Affairs, Attn: Dominic DeNiro, QAP Public Comment, P.O. Box 13941, Austin, Texas 78711-3941, or by fax to (512) 475-1895, attn: Dominic DeNiro, QAP Public Comments, or by email to dominic.deniro@tdhca.texas.gov <mailto:dominic.deniro@tdhca.texas.gov>. ALL COMMENTS AND INFORMATION MUST BE RECEIVED BY 5:00 P.M. Austin local (Central) time October 9, 2026.
STATUTORY AUTHORITY. The new sections are proposed pursuant to Texas Government Code, §2306.053, which authorizes the Department to adopt rules. Except as described herein the proposed new sections affect no other code, article, or statute.