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Presentation, discussion, and possible action regarding a Material Application Amendment to the Housing Tax Credit Application for Stella Haven (HTC #24146)
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RECOMMENDED ACTION
recommendation
WHEREAS, Stella Haven (the Development) received a 9% Housing Tax Credit (HTC) award in 2024 for the new construction of 88 units of multifamily housing in Denton, Denton County;
WHEREAS, due to the need to fill a funding gap, which is expected to be filled by obtaining Multifamily Direct Loan (MFDL) funding from the Department, Stella Haven, LP (the Applicant) requests approval to change the income and rent limit elections in order to continue to have an average income of 54% or lower and qualify for the National Housing Trust Fund loan, which requires 21 units at 30% of Area Median Income (AMI);
WHEREAS, because the City of Denton (the City) has requested the Applicant to preserve existing trees on the Development site and the parking requirement changed to one parking space per unit, the building footprint will be reduced and the number of parking spaces will decrease from 139 to 88;
WHEREAS, the Common Area will be reduced from 24,007 square feet at Application to 21,264 square feet, a reduction of 2,743 square feet or 11.43%;
WHEREAS, Board approval is required for a reduction of 3% or more in the square footage of common areas as directed by Tex. Gov’t Code §2306.6712(d)(4) and 10 TAC §10.405(a)(4)(D), and the Applicant has complied with the amendment requirements therein; and
WHEREAS, the requested changes do not negatively affect the Development, impact the viability of the transaction, impact the scoring of the Application, or impact the HTC award;
NOW, therefore, it is hereby
RESOLVED, that the requested material amendment to the Application for Stella Haven is approved as presented at this meeting, and the Executive Director and his designees are each authorized, directed, and empowered to take all necessary action to effectuate the foregoing.
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BACKGROUND
Stella Haven (HTC #24146) was approved for a 9% HTC award in 2024 for the new construction of 88 units for the general population in Denton, Denton County. Construction of the Development has not begun. The Applicant elected Average Income as the Qualified Low Income Housing Development Election, with an average income of 54% or lower, which would allow the property to serve households with incomes ranging from 30% to 80% of the Area Median Income (AMI).
In a letter as of May 22, 2025, Abby Penner, the representative for the Applicant, requested approval for an amendment to the Application to revise the income and rent designations in order to qualify for the National Housing Trust Fund loan. With this change, the Development must have 21 units at 30% AMI, but the average income would still be 54% or lower. This change is not considered a material amendment because the average income election is not changing. Additionally, due to the City of Denton requesting the developer to preserve existing trees on the Development site and with a reduction to the parking requirement to one parking space per unit, the building footprint will be reduced. The Development was proposed to have four stories on one half and five stories on the other half to accommodate 139 parking spaces. The amendment proposes to reduce the number of parking spaces to a total of 88 open spaces, which includes seven accessible spaces. The building will now be only four stories.
Due to the modifications by the City, the Common Area will be decreased from 24,007 square feet to 21,264 square feet, a decrease of 2,743 square feet or 11.43%. The Applicant indicated that the majority of this decrease is due to the 20% decrease in breezeway square footage due to a reduction in the overall building footprint and change to four floors. The only other common areas to experience a decrease in square footage are the entry reception, manager office, coffee bar, and restrooms. All other common area spaces will either stay the same or increase slightly in size. In total, if the changes to the breezeway are disregarded, the common area space is increased by 269 square feet. Thus, although percentage wise there appears to be a larger decrease in the common area square footage, this proposed change actually would provide the tenants with more useable common area spaces.
The Development was re-underwritten based on the proposed income and rent limits and revised financial information that was submitted. The analysis supports no change to the HTC allocation and demonstrates the Development remains feasible with the additional proposed changes to the financing structure. Additionally, staff reviewed the original Application and scoring documentation against this amendment request and has concluded that none of the changes would have resulted in selection or threshold criteria changes that would have affected the selection of the Application in the competitive round. The recommendation for the direct loan funds from the Department will be presented separately from this amendment to the HTC Application.
Staff recommends approval of the material amendment request.