Housing Finance Corporation Compliance Monitoring

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

Audit Information

Annual Service Fee Submissions

HFC Users are required to submit a service fee to the Department by June 1 annually, as provided in Title 10 of the Texas Administrative Code, Chapter 10, Subchapter J §10.1204(2).

• Service Fee Submission Instructions
• HFC Annual Service Fee Form (Excel Version)

Submissions must be received by June 1 (not postmarked).

Deliver to:
221 E. 11th St.
Austin, TX 78701

Mail to:
PO Box 13941
Austin, TX 78711-3941

Extension Requests

Housing Finance Corporation (HFC) multifamily developments may request an extension to submit their annual Audit Report, as provided in Title 10 of the Texas Administrative Code, Chapter 10, Subchapter J, §10.1203(1)(B).

Extension requests must be submitted to the Department at hfc@tdhca.texas.gov no later than May 1 of the applicable reporting year.

Extension requests must include:

• Reason for the request
• Requested submission date (not to exceed 60 days beyond the June 1 Audit Report due date)
• Property Name
• Property Address
• HFC User/Operator Name
• HFC User/Operator Email Address

The Department will review each request and respond within seven days.

Serve-U Account

All HFC Audit Reports and corresponding Corrective Action documentation must be submitted to the Department via Serv-U account.

Submit the following information to the Department at hfc@tdhca.texas.gov to request a Serv-U account.

• Individual’s Contact Name
• Email
• Phone Number
• Company Name
• Website

The Department will issue your login credentials once your account has been established.

Auditor’s List

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