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Report relating to the conclusion of the 2025 Non-competitive 4% Housing Tax Credit Program and an update on the 2026 Non-competitive 4% Housing Tax Credit Program.
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BACKGROUND
The 4% Housing Tax Credit (HTC) applications are reviewed by program, underwriting, and compliance staff within an approximately 90-day period, and Determination Notices are issued once all reviews are complete and the underwriting report is posted to the Department’s website. Applications are submitted at the beginning of each month and are then slated for a Determination Notice to be issued approximately 90 days later, which generally coincides with the Board meeting calendar, in order to provide internal and external expectations regarding the Determination Notice issuance date.
2025 Application Log Summary
The 2025 Private Activity Bond (PAB) program annual ceiling amount was $3.8 billion, and as of January 8, 2026, eligible requests totaled approximately $9.7 billion, with much of the requests coming from multifamily issuers. The 2025 4% HTC Application Log is included as Exhibit A and reflects those applications that were submitted to TDHCA from December 2024 through December 2025 in conjunction with the issuance of bond reservations from the Bond Review Board.
Currently, there are 10 applications that have been approved, and have had Determination Notices issued, but have yet to close. Those approved applications represent total issuances of more than $16M in 4% Housing Tax Credits, and 1,684 total units. Additionally, the log reflects 43 applications that have closed on their respective bond allocations. Those projects that have closed represent 9,753 units and over $108 million in 4% Housing Tax Credits. Altogether, when considering what has closed, and been approved, the total number of units is 11,485, and approximately $124 million in 4% tax credits.
Also reflected on the log are three pre-applications that were submitted to TDHCA and added to the Department’s waiting list for a bond reservation during the 2025 program year.
Finally, the log reflects those applications that were submitted to TDHCA but subsequently withdrawn. This represents a total of 8,366 units. The reasoning behind these withdrawals were varied, but most involved feasibility and timing concerns.
The 2025 program year has effectively concluded, and the figures represented herein are considered final.
2026 Application Log Summary
The 2026 PAB program has an annual ceiling amount of approximately $4.2 billion, and as of May 7, 2026, eligible requests total approximately $3.2 billion, with much of the requests coming from multifamily issuers. The 2026 4% HTC Application Log is included as Exhibit B and reflects those applications that were submitted to TDHCA from January 2025 through June 2026 in conjunction with the issuance of bond reservations from the Bond Review Board.
Currently, there are 21 applications under review for a total of 4,368 units, and approximately $58M in requested 4% Housing Tax Credits. Additionally, reflected on the log are nine applications that have been approved, and have had Determination Notices issued, but have yet to close. Those approved applications represent total issuances of more than $21M in 4% Housing Tax Credits, and 1,829 total units. Finally, the log reflects two applications that have closed on their respective bond allocations. Altogether, when considering what has closed, been approved, and is currently active, the total number of units is 6,673.
Also reflected on the log are two pre-applications that were submitted to TDHCA and added to the Department’s waiting list for a bond reservation thus far in the 2026 program year.
The start of the 2026 program year was different from prior years in that the PAB ceiling was not over-subscribed and the level of participation is considerably lower. As bond reservations from the lottery were issued, they were subsequently withdrawn and applications re-filed with the Bond Review Board for reservations to be issued on a timeline that was more conducive to the transaction. This resulted in fewer 4% HTC applications being submitted in January. The reasons behind the decline are varied, but include a decrease in credit pricing, a decrease in interest among tax credit syndicators, volatile interest rates and a softening of rental rates in some urban markets.
Although it is still too early to predict the total production of 4% HTC units in the 2026 program year, in order to provide perspective on how the 4% HTC program has performed in each of the previous five years, a graph has been included as Exhibit C.
The total number of units peaked in 2021, most likely due to very low interest rates and a more favorable tax credit market. Overall activity in the 4% program, and in turn, total units, stabilized between 2022 and 2025.
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