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Presentation, discussion, and possible action on an order adopting new 10 Texas Administrative Code Chapter 10, Uniform Multifamily Rules, Subchapter J, Housing Finance Corporation Compliance Monitoring and directing its publication in the Texas Register
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RECOMMENDED ACTION
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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 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, Texas Local Government Code;
WHEREAS, public comment was accepted from December 26, 2025, through January 26, 2026, staff received comment from 10 entities, and has prepared a reasoned response in the attached preamble; and
WHEREAS, the adoption of the new rule will be published in the Texas Register;
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 adopted 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. At the October 2025 meeting, the Board approved a draft rule for release for public comment, but as a result of publication errors, there were inconsistencies in what was published. To ensure that public comment on the correct version was returned to the Board for approval, a new public comment period was initiated.
The law amends Texas Local Government Code Chapter 394 to apply to all HFC 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.
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 the December 11, 2025, Board Meeting the Board approved the publication of the proposed new 10 Texas Administrative Code, Chapter 10, Uniform Multifamily Rules, Subchapter J, Housing Finance Corporation Compliance Monitoring in the Texas Register.
The proposed new rule was published in the Texas Register and released for public comment from December 26, 2025, through January 26, 2026. Public comment was received from 10 commenters as further described in the preamble attached; the Department’s reasoned response to the comment is also provided.
Behind the preamble for the proposed new adoption action, a draft of the rule is shown. To assist reviewers with understanding what has changed from the version of the rule last posted in the Texas Register, a black lined version of the amended section is provided, reflecting the change proposed by the Department after consideration of public comment.