Section 10.1004 - Housing Tax Credit Properties, TCAP, Exchange and SHTF(a) Except for certain rural properties, Housing Tax Credit, TCAP, Exchange, and SHTF Developments must use the Multifamily Tax Subsidy Program (MTSP) income limits released by HUD, generally, on an annual basis. The MTSP limit tables include:(1) The 50% and 60% Area Median Gross Income (AMGI) by household size.(2) In areas where the income limits did not decrease in 2007 and 2008 because of HUD's hold harmless policy, a HERA Special 50% and HERA Special 60% income limit by household size. These higher limits can only be used if at least one building in the Project (as defined on line 8b on Form 8609) was placed in service on or before December 31, 2008.(b) If HUD releases a 20%, 30%, 40%, 60%, 70% or 80% income limit in the MTSP charts, the Department will use that data. Otherwise, the following calculation will be used, without rounding, to determine additional income limits:(1) To calculate the 20% AMGI, the 50% AMGI limit will be multiplied by.40 or 40%.(2) To calculate the 30% AMGI, the 50% AMGI limit will be multiplied by.60 or 60%.(3) To calculate the 40% AMGI, the 50% AMGI limit will be multiplied by.80 or 80%.(4) To calculate the 60% AMGI, the 50% AMGI limit will be multiplied by 1.2 or 120%.(5) To calculate the 70% AMGI, the 50% AMGI limit will be multiplied by 1.4 or 140%.(6) To calculate the 80% AMGI, the 50% AMGI limit will be multiplied by 1.6 or 160%.(c) Treatment of Rural Properties. Section 42(i)(8) of the Code permits certain Housing Tax Credit, Exchange, and Tax Credit Assistance properties to use the national non-metropolitan median income limit when the area median gross income limit for a place is less than the national non-metropolitan median income.(1) The Department will identify rural eligible places in accordance with: (A) Section 520 of the Housing Act of 1949, as amended from time to time; and(B) Chapter 2306 of the Texas Government Code, as amended from time to time.(2) The Department allows the use of rural income limits for SHTF multifamily rental Developments that are considered rural using the process described in this subsection.(d) Rent limits are a calculation of income limits and cannot exceed 30% of the applicable Imputed Income Limit. Rent limits are published by number of bedrooms and will be rounded down to the nearest dollar.(1) Example 1004(1): To calculate the 30% 1 bedroom rent limit:(A) Determine the imputed income limited by multiplying the number of bedrooms by 1.5: 1 bedroom x 1.5 persons = 1.5.(B) To calculate the 1.5 person income limit, average the 1 person and 2 person income limits: If the 1 person 30% income limit is $12,000 and the 2 person 30% income limit is $19,000, the imputed income limit would be $15,500 ($12,000 + $19,000 = $31,000/2 = $15,500).(C) To calculate the 30% 1 bedroom rent limit, multiply the imputed income limit of $15,500 by 30%, then divide by 12 months and round down. In this example, the 30% 1 bedroom limit is $387 ($15,500 times 30% divided by 12 = $387.50 per month. Rounded down the limit is $387).(2) Example 1004(2): to calculate the 50% 2 bedroom rent limit: (A) Determine the imputed income limited to be calculated by multiplying the number of bedrooms by 1.5: 2 bedrooms x 1.5 persons = 3.(B) The 3 person income limit is already published; for this example the applicable 3 person 50% income limit is $27,000.(C) To calculate the 50% 2 bedroom rent limit, multiply $27,000 by 30%, then divide by 12. In this example, the 50% 2 bedroom limit is $675 ($27,000 times 30% divided by 12 = $675. No rounding is needed since the calculation yields a whole number).(e) The Department releases rent limits assuming that the gross rent floor is set by the date the Housing Tax Credits were allocated. (1) For a 9% Housing Tax Credit, the allocation date is the date the Carryover Agreement is signed by the Department.(2) For a 4% Housing Tax Credit, the allocation date is the date of the Determination Notice.(3) For TCAP, the allocation date is the date the accompanied credit was allocated.(4) For Exchange, the allocation date is the effective date of the Subaward agreement.(f) Revenue Procedure 94-57 permits, but does not require, owners to set the gross rent floor to the limits that are in effect at the time the Project (as defined on line 8b on Form 8609) places in service. However, this election must be made prior to the Placed in Service Date. A Gross Rent Floor Election form is available on the Department's website. Unless otherwise elected, the initial date of allocation described in subsection (e) of this section will be used. (1) In the event an owner elects to set the gross rent floor based on the income limits that are in effect at the time the Project places in service and wishes to revoke such election, prior approval from the Department is required. The request will be treated as non-material amendment, subject to the fee described in § 11.901 of this title (relating to Fee Schedule) and the process described in § 10.405 of this chapter (relating to Amendments and Extensions).(2) An owner may request to change the election only once during the Compliance Period.(g) For the SHTF program, the date the LURA is executed is the date that sets the gross rent floor.(h) Held Harmless Policy. (1) In accordance with Section 3009 of the Housing and Economic Recovery Act of 2008, once a Project (as defined on line 8b on Form 8609) places in service, the income limits shall not be less than those in effect in the preceding year.(2) Unless other guidance is received from the U.S. Treasury Department, in the event that a place no longer qualifies as rural, a Project that was placed in service prior to loss of rural designation can continue to use the rural income limits that were in effect before the place lost such designation for the purposes of determining the applicable income and rent limit. However, if in any subsequent year the rural income limits increase, the existing project cannot use the increased rural limits. Example 1004(3): Project A was placed in service in 2010. At that time, the place was classified as Rural. In 2012 that place lost its rural designation. The rural income limits increased in 2013. Project A can continue to use the rural income limits in effect in 2012 but cannot use the higher 2013 rural income limits. For owners that execute a carryover for a Project located in a rural place that loses such designation prior to the placed in service date, unless other guidance is received from the U.S. Treasury Department, the Department will monitor using the rent limits calculated from the rural limits that were in effect at the time of the carryover. However, for the purposes of determining household eligibility, such Project must use the applicable MTSP income limits published by HUD.10 Tex. Admin. Code § 10.1004
The provisions of this §10.1004 adopted to be effective August 21, 2014, 39 TexReg 6221; Adopted by Texas Register, Volume 44, Number 30, July 26, 2019, TexReg 3801, eff. 7/29/2019; Adopted by Texas Register, Volume 48, Number 17, April 28, 2023, TexReg 2182, eff. 5/4/2023