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Presentation, discussion, and possible action on an order proposing new 10 Texas Administrative Code Chapter 10, Uniform Multifamily Rules, Subchapter J, Housing Finance Corporation Compliance Monitoring and directing its 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 proposed new rule is responsive to the passage of HB 21 (89th Reg. Session), which granted the Texas Department of Housing and Community Affairs (the Department) compliance monitoring oversight of all Housing Finance Corporation developments;
WHEREAS, HB 21 requires the Department to adopt rules necessary to implement §394.9026 and 394.9027 of Chapter 394 Local Government Code;
WHEREAS, in October 2025, the Board approved a draft rule for release for public comment, but as a result of publication errors there was inconsistency in what was published, and to ensure that the public is able to comment on a correct Board-approved version, the proposed new rule is being returned to the Board for approval and a new public comment period; and
WHEREAS, such new proposed rulemaking will be published in the Texas Register for public comment and 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 hereby are authorized, empowered, and directed, for and on behalf of the Department to cause the proposed new rule of 10 TAC Subchapter J, Housing Finance Corporation Compliance Monitoring, in the form presented to this meeting, to be published in the Texas Register and in connection therewith, make such non-substantive technical corrections as they may deem necessary to effectuate the foregoing, including the preparation of the subchapter specific preambles.
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BACKGROUND
The Texas Department of Housing and Community Affairs (the Department) through legislative action in HB 21 (89th Reg. Session) has been tasked with the compliance monitoring oversight of all Housing Finance Corporation (HFC) multifamily residential developments. The bill requires the Department to adopt rules related to the new compliance monitoring function by January 1, 2026. The law amends Texas Local Government Code Chapter 394 to apply to all HFC-owned multifamily residential developments that do not have low-income housing tax credits under Subchapter DD, Chapter 2306, Government Code, the Low-Income Housing Tax Credit program.
The law requires HFC multifamily residential developments to submit an audit report to the Department. The first audit reports for the HFC developments subject to the new law are required to be submitted to the Department by June 1, 2026. Subsequent reports are due to the Department no later than June 1 of each year.
Additionally, on September 10, 2025, Department staff met with a group of interested parties and stakeholders on the proposed HFC rule to review, discuss and receive feedback on the proposed rule prior to the rule being presented to the TDHCA Board.
At its October 2025 Board meeting the Board approved a draft rule. The rule was submitted to the Texas Register and also published on the Department’s website. Inadvertently, there were inconsistencies between what was published in the Board materials, what was published on the website for comment, and what was submitted to the Texas Register. To ensure that all parties are working from the same one version of a draft rule, staff felt it was most prudent to return to the Board with a proposed new rule for approval and release for comment. Because some comment had already been received during the period the rule was available, some revisions have been made to the rule attached from the version presented in October.
Upon Board approval, the new rulemaking will be published in the Texas Register and released for public comment from December 26, 2025, through January 26, 2026. Staff will return to the Board for final adoption of the rules.