Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017 Page: 5,930
5913-6056 p. ; 28 cm.View a full description of this periodical.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
(C) the Development must be proposed to be designed
to comply with the QAP, Program Rules and NOFA, and applicable
Federal or state requirements.
(2) Proximity to Other Developments. The Underwriter
will identify in the Report any developments funded or known and an-
ticipated to be eligible for funding within one linear mile of the subject.
Distance is measured in a straight line from nearest boundary point to
nearest boundary point.
(3) Supportive Housing. The unique development and op-
erating characteristics of Supportive Housing Developments may re-
quire special consideration in these areas:
(A) Operating Income. The extremely-low-income ten-
ant population typically targeted by a Supportive Housing Develop-
ment may include deep-skewing of rents to well below the 50 percent
AMGI level or other maximum rent limits established by the Depart-
ment. The Underwriter should utilize the Applicant's proposed rents
in the Report as long as such rents are at or below the maximum rent
limit proposed for the units or [and] equal to any project based rental
subsidy rent to be utilized for the Development if higher than the max-
imum rent limits;
(B) Operating Expenses. A Supportive Housing Devel-
opment may have significantly higher expenses for payroll, manage-
ment fee, security, resident support services, or other items than typi-
cal affordable housing developments. The Underwriter will rely heav-
ily upon the historical operating expenses of other Supportive Housing
Developments affiliated with the Applicant or otherwise available to
the Underwriter. Expense estimates must be categorized as outlined in
subsection (d)(2) of this section;
(C) DCR and Long Term Feasibility. Supportive Hous-
ing Developments may be exempted from the DCR requirements of
subsection (d)(4)(D) of this section if the Development is anticipated to
operate without conventional or "must-pay" debt. Applicants must pro-
vide evidence of sufficient financial resources to offset any projected
15-year cumulative negative Cash Flow. Such evidence will be eval-
uated by the Underwriter on a case-by-case basis to satisfy the De-
partment's long term feasibility requirements and may take the form of
one or a combination of: executed subsidy commitment(s); set-aside
of Applicant's financial resources to be substantiated by current finan-
cial statements evidencing sufficient resources; and/or proof of annual
fundraising success sufficient to fill anticipated operating losses. If ei-
ther a set aside of financial resources or annual fundraising are used
to evidence the long term feasibility of a Supportive Housing Devel-
opment, a resolution from the Applicant's governing board must be
provided confirming their irrevocable commitment to the provision of
these funds and activities; and/or
(D) Total Housing Development Costs. For Supportive
Housing Developments designed with only Efficiency Units, the Un-
derwriter may use "Average Quality" dormitory costs, or costs of other
appropriate design styles from the Marshall & Swift Valuation Service,
with adjustments for amenities and/or quality as evidenced in the Ap-
plication, as a base cost in evaluating the reasonableness of the Appli-
cant's Building Cost estimate for New Construction Developments.
(h) Work Out Development. Developments that are underwrit-
ten subsequent to Board approval in order to refinance or gain relief
from restrictions may be considered infeasible based on the guidelines
in this section, but may be characterized as "the best available option"
or "acceptable available option" depending on the circumstances and
subject to the discretion of the Underwriter as long as the option an-
alyzed and recommended is more likely to achieve a better financial
outcome for the property and the Department than the status quo.(i) Feasibility Conclusion. An infeasible Development will
not be recommended for a Grant, Direct Loan or Housing Credit Al-
location unless the Underwriter can determine an alternative structure
and/or conditions the recommendations of the Report upon receipt of
documentation supporting an alternative structure. A Development
will be characterized as infeasible if paragraph (1) or (2) of this sub-
section applies. The Development will be characterized as infeasible
if one or more of paragraphs (3) - (5) of this subsection applies unless
paragraph (6)(B) of this subsection also applies.
(1) Gross Capture Rate, AMGI Band Capture Rates, and
Individual Unit Capture Rate. The method for determining capture
rates for a Development is defined in @10.303 of this chapter. The Un-
derwriter will independently verify all components and conclusions of
the capture rates and may, at their discretion, use independently ac-
quired demographic data to calculate demand and may make a deter-
mination of the capture rates based upon an analysis of the Sub-market.
The Development:
(A) is characterized as an Elderly Development and the
Gross Capture Rate or any AMGI band capture rate exceeds 10 percent
[for the total proposed Unis]; or
(B) is outside a Rural Area and targets the general pop-
ulation, and the Gross Capture Rate or any AMGI band capture rate
exceeds 10 percent [for the total proposed Unis]; or
(C) is in a Rural Area and targets the general population,
and the Gross Capture Rate or any AMGI band capture rate exceeds 30
percent; or
(D) is Supportive Housing and the Gross Capture Rate
or any AMGI band capture rate exceeds 30 percent; or,
(E) has an Individual Unit Capture Rate for any Unit
Type greater than 65 [-75] percent.
(F) Developments meeting the requirements of sub-
paragraph (A), (B), (C), (D) or (E) of this paragraph may avoid being
characterized as infeasible if clause (i) or (ii) of this subparagraph
apply.
(i) Replacement Housing. The proposed Develop-
ment is comprised of affordable housing which replaces previously ex-
isting affordable housing within the Primary Market Area as defined
in 10.303 of this chapter on a Unit for Unit basis, and gives the dis-
placed tenants of the previously existing affordable housing a leasing
preference.
(ii) Existing Housing. The proposed Development
is comprised of existing affordable housing, whether defined by an ex-
isting land use and rent restriction agreement or if the subject rents are
at or below 50% AMI rents, which is at least 50 percent occupied and
gives displaced existing tenants a leasing preference as stated in a re-
location plan.
(2) Deferred Developer Fee. Applicants requesting an allo-
cation of tax credits where the estimated deferred Developer Fee, based
on the underwritten capitalization structure, is not repayable from Cash
Flow within the first fifteen (15) years of the long term pro forma as de-
scribed in subsection (d)(5) of this section.
(3) Pro Forma Rent. The Pro Forma Rent for Units with
rents restricted at 60 percent of AMGI is less than the Net Program Rent
for Units with rents restricted at or below 50 percent of AMGI unless
the Applicant accepts the Underwriter's recommendation, if any, that
all restricted units have rents and incomes restricted at or below the 50
percent of AMGI level.
(4) Initial Feasibility.42 TexReg 5930 October 27, 2017 Texas Register
Upcoming Pages
Here’s what’s next.
Search Inside
This issue can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Periodical.
Texas. Secretary of State. Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017, periodical, October 27, 2017; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth897027/m1/18/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.