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Presentation, discussion, and possible action on an order proposing the repeal of 10 TAC Chapter 23, Single Family HOME Program, Subchapter B, and Subchapter F; an order proposing new 10 TAC Chapter 23, Single Family HOME Program, Subchapter B and Subchapter F; and an order 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, staff has assessed 10 TAC Chapter 23, Single Family HOME Program, Subchapter B, Availability of Funds, Application Requirements, Review and Award Procedures, General Administrative Requirements, and Resale and Recapture of Funds, and Subchapter F, Single Family Development Program, and recommends amendments to clarify requirements, update threshold requirements, and update requirements for the Single Family Development Program to reduce administrative burden and align with existing loan closing procedures;
WHEREAS, such revisions are being proposed through the repeal of the current rule and a simultaneous new rule to be proposed in its place; and
WHEREAS, upon Board approval, such proposed rulemaking will be published in the Texas Register for public comment from June 19, 2026, through July 20, 2026, 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 hereby are authorized, empowered, and directed, for and on behalf of the Department, to cause the proposed actions herein 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 as they may deem necessary to effectuate the foregoing including any requested revisions to the preambles.
The Single Family HOME Program offers the Single Family Development (SFD) program activity to increase the supply of quality affordable housing. SFD offers HOME Program funds in the form of a deferred zero percent interest interim construction loan to developers of affordable housing for low-income homebuyers. To further support the development, funds are offered for developer fees, and the interim loan may be converted into permanent mortgage financing for the homebuyer. The permanent financing is a monthly amortizing loan. Additional funds for the homebuyer may be offered as a separate deferred forgivable loan for closing cost assistance and principal reduction in order to increase affordability, depending on the needs of the homebuyer.
The rule revisions include updates to Subchapter B, related to Availability of Funds, Application Requirements, Review and Award Procedures, General Administrative Requirements, and Resale and Recapture of Funds, and Subchapter F, related specifically to SFD. Changes to Subchapter B focus on updates to threshold requirements for projects and applicants, updates to contract terms and benchmarks, clarifications to allowable costs for construction projects, and removal of minimum size requirements for housing constructed with HOME funds. Changes to Subchapter F related to Single Family Development focus on expanding the program to incorporate flexibilities and incentives for developers of self-help housing, as well as updating the rule to conform to existing loan closing procedures.
The rule, as proposed, will be released for public comment from June 19, 2026, through July 20, 2026, and returned to the Board for final approval.
A summary of substantive changes is as follows:
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Subchapter B, Availability of Funds, Application Requirements, Review and Award Procedures, General Administrative Requirements, and Resale and Recapture of Funds
§23.23(a)(5)(A)
Includes Single Family Development as a program activity subject to the existing Match requirements.
§23.23(a)(5)
Increases the cash reserve required for an entity applying for HOME funds to $100,000 from $80,000 for program activities involving construction and from $30,000 to $50,000 for tenant-based rental assistance. This increase reflects the need for Administrator’s to have cash on hand to effectively operate the programs prior to reimbursement.
§23.23(a)(10)
Incorporates a threshold requirement related to prior monitoring. The new requirement considers as ineligible Applicants who have had closed, unresolved monitoring findings with disallowed costs in excess of $5,000 in the past 3 years, even if they are already in a repayment plan.
§23.24(b) and (c)
Extends term for contracts, including benchmarks within the contract, to incorporate extended deadlines now permitted in federal regulations.
§23.27(f)
Allows for additional hard costs for abatement of hazardous conditions on the site other than those identified in the environmental review but that would cause a code violation, such as abandoning disused wells and filling in cisterns.
§23.28(a)(6)
Removes minimum unit size requirements for single family construction.
Subchapter F, Single Family Development Program
§23.60(b)
Moves requirements necessary for a commitment of funds for Single Family Development contracts into the application requirements to ensure that awards are made only for projects that are ready for the commitment of funds.
§23.60(c)(2)
Incorporates a provision allowing for a preference for self-help housing models for award.
§23.60(f)
Incorporates a provision that would allow for the value of volunteer labor and donated materials to be included in the calculation for the developer fee, increasing the available fee for developers utilizing these components in the project.
§23.60(h-i)
Allows for construction to commence prior to identification and qualification of an eligible buyer.
§23.60(j)
Clarifies that Developer’s estimated costs to close the interim loan may be included in the interim construction loan if they are HOME eligible costs.
§23.60(k)
Removes the requirement for the HOME permanent loan to be in first or second lien position and defers to the lien position requirements as outlined in the Single Family Umbrella rule.
§23.60(k)(1)(C)
Removes the required front-end ratio for households with income exceeding 50% of Area Median Family Income.
§23.61
Changes to the overall structure of the rule to align with the existing loan closing process and to conform to changes allowing construction to commence prior to identifying the homebuyer.