Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017 Page: 5,928
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but not limited t,] property taxes, [and] interest expense or any other
cost associated with the operations of the buildings.
(C) [(iii)] In no instance will the acquisition cost uti-
lized by the Underwriter exceed the lesser of the original acquisition
cost evidenced by clause (ii)(I) of this subparagraph plus costs iden-
tified in clause (ii)(II)(-b-) of this subparagraph, or if applicable the
"as-is" value conclusion evidenced by clause (ii)(II)(-a-) of this sub-
paragraph. Acquisition cost is limited to appraised land value for trans-
actions which include existing buildings that will be demolished. The
resulting acquisition cost will be referred to as the "Adjusted Acquisi-
tion Cost."
(D) [(C)] Eligible Basis on Acquisition of Buildings.
Building acquisition cost will be included in the underwritten Eligi-
ble Basis if the Applicant provided an appraisal that meets the Depart-
ment's Appraisal Rules and Guidelines as described in @10.304 of this
chapter. The underwritten eligible building cost will be the lowest of
the values determined based on clauses (i) - (iii) of this subparagraph:
(i) the Applicant's stated eligible building acquisi-
tion cost;
(ii) the total acquisition cost reflected in the Site
Control document(s), or the Adjusted Acquisition Cost (as defined in
subparagraph (B)(iii) of this paragraph), prorated using the relative
land and building values indicated by the applicable appraised value;
(iii) total acquisition cost reflected in the Site Con-
trol document(s), or the Adjusted Acquisition Cost (as defined in sub-
paragraph (B)(iii) of this paragraph), less the appraised "as-vacant"
land value; or
(iv) the Underwriter will use the value that best cor-
responds to the circumstances presently affecting the Development that
will continue to affect the Development after transfer to the new owner
in determining the building value. These circumstances include but
are not limited to operating subsidies, rental assistance and/or property
tax exemptions. Any value of existing favorable financing will be at-
tributed prorata to the land and buildings.
(2) Off-Site Costs. The Underwriter will only consider
costs of Off-Site Construction that are well documented and certified
to by a Third Party engineer on the required Application forms with
supporting documentation.
(3) Site Work Costs. The Underwriter will only consider
costs of Site Work that are well documented and certified to by a Third
Party engineer on the required Application forms with supporting doc-
umentation.
(4) Building Costs.
(A) New Construction and Reconstruction. The Un-
derwriter will use the Marshall and Swift Residential Cost Handbook,
other comparable published Third-Party cost estimating data sources,
historical final cost certifications of previous Housing Tax Credit de-
velopments and other acceptable cost data available to the Underwriter
to estimate Building Cost. Generally, the "Average Quality" multiple,
townhouse, or single family costs, as appropriate, from the Marshall
and Swift Residential Cost Handbook or other comparable published
Third-Party data source, will be used based upon details provided in
the Application and particularly building plans and elevations. The
Underwriter will consider amenities, specifications and development
types not included in the Average Quality standard. The Underwriter
may consider a sales tax exemption for nonprofit General Contractors.
(B) Rehabilitation and Adaptive Reuse.(i) The Applicant must provide a [detailed narrative
descr-ption of the] scope of work and narrative description of the work
to be completed. The narrative should speak to all off-site, site work,
building components including finishes and equipment, and develop-
ment amenities. The narrative should be in sufficient detail so that the
reader can understand the work and it should generally be arranged
consistent with the line-items on the PCA Cost Schedule Supplement
and must also be consistent with the development cost schedule of the
Application [for the proposed rehabilitation] .
(ii) The Underwriter will use cost data provided on
the PCA Cost Schedule Supplement.
(5) Contingency. Total contingency, including any soft
cost contingency, will be limited to a maximum of 7 percent of
Building Cost plus Site Work and off-sites for New Construction
and Reconstruction Developments, and 10 percent of Building Cost
plus Site Work and off-sites for Rehabilitation and Adaptive Reuse
Developments. For Housing Tax Credit Developments, the percentage
is applied to the sum of the eligible Building Cost, eligible Site Work
costs and eligible off-site costs in calculating the eligible contingency
cost.
(6) General Contractor Fee. General Contractor fees
include general requirements, contractor overhead, and contractor
profit. General requirements include, but are not limited to, on-site
supervision or construction management, off-site supervision and
overhead, jobsite security, equipment rental, storage, temporary util-
ities, and other indirect costs. General Contractor fees are limited to
a total of 14 percent on Developments with Hard Costs of $3 million
or greater, the lesser of $420,000 or 16 percent on Developments with
Hard Costs less than $3 million and greater than $2 million, and the
lesser of $320,000 or 18 percent on Developments with Hard Costs at
$2 million or less. Any contractor fees to Affiliates or Related Party
subcontractors regardless of the percentage of the contract sum in the
construction contract(s) will be treated collectively with the General
Contractor Fee limitations. For Housing Tax Credit [tax credit] Devel-
opments, the percentages are applied to the sum of the Eligible Hard
Costs in calculating the eligible contractor fees. For Developments
also receiving financing from USDA, the combination of builder's
general requirements, builder's overhead, and builder's profit should
not exceed the lower of TDHCA or USDA requirements. Additional
fees for ineligible costs will be limited to the same percentage of
ineligible Hard Costs but will not be included in Eligible Basis.
(7) Developer Fee.
(A) For Housing Tax Credit Developments, the Devel-
oper Fee included in Eligible Basis cannot exceed 15 percent of the
project's eligible costs, less Developer fees, for Developments propos-
ing fifty (50) Units or more and 20 percent of the project's eligible costs,
less Developer fees, for Developments proposing forty-nine (49) Units
or less. For Public Housing Authority Developments for conversion
under the HUD Rental Assistance Demonstration ("RAD") program
that will be financed using tax-exempt mortgage revenue bonds, the
Developer Fee cannot exceed 20 percent of the project's eligible cost
less Developer Fee.
(B) Any additional Developer fee claimed for ineligible
costs will be limited to the same percentage but applied only to ineli-
gible Hard Costs (15 percent for Developments with fifty (50) or more
Units, or 20 percent for Developments with forty-nine (49) or fewer
Units). Any Developer fee above this limit will be excluded from To-
tal Housing Development Costs. All fees to Affiliates and/or Related
Parties for work or guarantees determined by the Underwriter to be
typically completed or provided by the Developer or Principal(s) of
the Developer will be considered part of Developer fee.42 TexReg 5928 October 27, 2017 Texas Register
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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/m1/16/?q=%22%22~1&rotate=90: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.