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The Texas Department of Housing and Community Affairs (TDHCA) was tasked with compliance monitoring oversight of Housing Finance Corporation (HFC) Multifamily Residential Developments that are required to comply with §394.9026 and §394.9027 of Chapter 394, Texas Local Government Code, as amended by House Bill 21 (HB 21), effective May 28, 2025. Pursuant to Chapter 394, §394.9026 and §394.9027 do not apply during any period that a Development is the recipient of a low income housing tax credit allocated under Subchapter DD, Chapter 2306, Government Code.
The first audit reports for the HFC developments subject to the new law are required to be submitted to the TDHCA by June 1, 2026. Subsequent reports are due to the Department no later than June 1 of each year.
Purpose
House Bill 21 amends the Texas Housing Finance Corporations Act in Chapter 394 of the Texas Local Government Code to revise the statutory framework governing Housing Finance Corporation (HFC) multifamily residential developments and their eligibility for property tax exemptions. The bill provides statutory reforms to enhance oversight, ensure that tax-exempt HFC developments deliver intended public benefits, and strengthen accountability by requiring compliance audits, tenant protections, and affordability standards for certain HFC multifamily developments. Among other provisions, HB 21 establishes additional conditions for beneficial tax treatment, clarifies the eligibility criteria for exempt developments, and requires annual audit reporting to the Texas Department of Housing and Community Affairs (TDHCA) to monitor compliance with the new statutory requirements. HB 21 became law on May 28, 2025, and applies to HFC multifamily residential developments claiming property tax exemptions under Chapter 394 of the Local Government Code.
HFC Monitoring Regulations
- §10.1201 Purpose and Applicability
- §10.1202 Definitions
- §10.1203 Reporting Requirements
- §10.1204 Audit Requirements
- §10.1205 Income and Rent Calculations
- §10.1206 Penalties
- §10.1207 Options for Review
- HB 21
- Chapter 394
- Section 8 Program for income determination and or link to 24 CFR §5.609
Forms
- HFC Audit Workbook
- HFC TIC (PDF) or (DOCX)
- HFC TIC Instructions
- Rent Reduction & Benefit Test Certification Form
Auditor’s List
Education and Training
- Lunch and Learn Series Coming Soon
- Office Hours- HFC Update, March 13, 2025
- TDHCA Youtube Channel
- Income Determination Training
- Compliance Training Presentations
HFC Developments
TBD
Submission of completed Auditor Reports and supporting documentation must be submitted to the following email address: hfc@tdhca.texas.gov
Please direct questions or comments to: wendy.quackenbush@tdhca.texas.gov or amy.hammond@tdhca.texas.gov