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Presentation, discussion, and possible action on the draft 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;
NOW, therefore, it is hereby
RESOLVED, that the Executive Director and his designees are authorized and empowered to publish the draft 2026 Regional Allocation Formula Methodologies for the HOME, HTC, and, as applicable, HTF programs in the Texas Register for public comment and, in connection therewith, to make such non-substantive grammatical and technical changes as they deem necessary or advisable.
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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 Urban Rural designation process for the RAF has been impacted by Maverick and Aransas counties for which their designations were switched from rural to urban due to the use of the updated 2023 MSA list from the US Census, which is the most recent MSA list available. The 2026 Urban Rural process used the U.S. Census Bureau’s American Community Survey (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 draft 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.
Upon approval by the Board, the draft RAF will be available for public comment on the TDHCA Public Comment Center at <https://www.tdhca.texas.gov/tdhca-public-comment-center>. A public comment period will be open from Monday, May 19, 2025, through Tuesday, June 17, 2025, at 5:00 pm Central Time. A public hearing for the draft 2026 RAF Methodology will be held at 2:00 p.m. Central Time on Wednesday, June 4, 2025, at the Stephen F. Austin Building, Room 172, 1700 Congress Ave, Austin, Texas 78701. Comment may also be provided in writing via mail to Housing Resource Center, TDHCA, P.O. Box 13941, Austin, TX 78711-3941 or email to info@tdhca.texas.gov <mailto:info@tdhca.texas.gov>.
The following Attachments are provided:
A. Draft 2026 RAF Methodology
B. Draft Example 2026 HOME SF RAF
C. Draft Example 2065 HTF RAF
D. Draft Example 2026 HOME MF RAF
E. Draft 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 publication of the proposed methodology for public comment, not specific allocation amounts.