Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017 Page: 5,931
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(A) Except when underwritten at cost certification, the
first year stabilized pro forma operating expense divided by the first
year stabilized pro forma Effective Gross Income is greater than 68
percent for Rural Developments 36 Units or less and 65 percent for all
other Developments.
(B) The first year DCR is below 1.15 (1.00 for USDA
Developments).
(5) Long Term Feasibility. The Long Term Pro forma at
any time during years two through fifteen, as defined in subsection
(d)(5) of this section, reflects:
(A) a Debt Coverage Ratio below 1.15; or,
(B) negative cash flow (throughout the term of a Direct
Loan).
(6) Exceptions. The infeasibility conclusions may be ex-
cepted when:
(A) Waived by the Executive Director of the Depart-
ment or by the Committee if documentation is submitted by the Appli-
cant to support unique circumstances that would provide mitigation.
(B) Developments not meeting the requirements of one
or more of paragraphs (3), (4)(A) or (5) of this subsection will be
re-characterized as feasible if one or more of clauses (i) - (v) of this
subparagraph apply. A Development financed with a Direct Loan will
not be re-characterized as feasible with respect to (5)(B).
(i) The Development will receive Project-based
Section 8 Rental Assistance or the HUD Rental Assistance Demon-
stration Program for at least 50 percent of the Units and a firm
commitment, with terms including Contract Rent and number of Units,
is submitted at Application.
(ii) The Development will receive rental assistance
for at least 50 percent of the Units in association with USDA financing.
(iii) The Development will be characterized as pub-
lic housing as defined by HUD for at least 50 percent of the Units.
(iv) The Development will be characterized as Sup-
portive Housing for at least 50 percent of the Units and evidence of
adequate financial support for the long term viability of the Develop-
ment is provided.
(v) The Development has other long term project
based restrictions on rents for at least 50 percent of the Units that allow
rents to increase based upon expenses and the Applicant's proposed
rents are at least 10 percent lower than both the Net Program Rent and
Market Rent.
10.303. Market Analysis Rules and Guidelines.
(a) General Provision. A Market Analysis prepared for the De-
partment must evaluate the need for decent, safe, and sanitary housing
at rental rates or sales prices that eligible tenants can afford. The analy-
sis must determine the feasibility of the subject Property rental rates or
sales price and state conclusions as to the impact of the Property with
respect to the determined housing needs. The Market Analysis must in-
clude a statement that the report preparer has read and understood the
requirements of this section. The Market Analysis must also include a
statement that the person or company preparing the Market Analysis is
a disinterested party and will not materially benefit from the Develop-
ment in any other way than receiving a fee for performing the Market
Analysis, and that the fee is in no way contingent upon the outcome of
the Market Analysis.
(b) Self-Contained. A Market Analysis prepared for the De-
partment must allow the reader to understand the market data presented,the analysis of the data, and the conclusions derived from such data. All
data presented should reflect the most current information available and
the report must provide a parenthetical (in-text) citation or footnote de-
scribing the data source. The analysis must clearly lead the reader to
the same or similar conclusions reached by the Market Analyst. All
steps leading to a calculated figure must be presented in the body of
the report.
(c) Market Analyst Qualifications. A Market Analysis submit-
ted to the Department must be prepared and certified by an approved
Qualified Market Analyst. ( 2306.67055) The Department will main-
tain an approved Market Analyst list based on the guidelines set forth
in paragraphs (1) - (3) of this subsection.
(1) The approved Qualified Market Analyst list will be up-
dated and published annually on or about October 1st. If not listed as
an approved Qualified Market Analyst by the Department, a Market
Analyst may request approval by submitting items in subparagraphs
(A) - (F) of this paragraph at least thirty (30) calendar days prior to the
first day of the competitive tax credit Application Acceptance Period
or thirty (30) calendar days prior to submission of any other application
for funding for which the Market Analyst must be approved.
(A) Franchise Tax Account Status from the Texas
Comptroller of Public Accounts (not applicable for sole proprietor-
ships).
(B) A current organization chart or list reflecting all
members of the firm who may author or sign the Market Analysis.
A firm with multiple offices or locations must indicate all members
expected to be providing Market Analysis.
(C) Resumes for all members of the firm or subcontrac-
tors who may author or sign the Market Analysis.
(D) General information regarding the firm's experi-
ence including references, the number of previous similar assignments
and timeframes in which previous assignments were completed.
(E) Certification from an authorized representative of
the firm that the services to be provided will conform to the Depart-
ment's Market Analysis Rules and Guidelines, as described in this sec-
tion, in effect for the Application Round in which each Market Analysis
is submitted.
(F) A sample Market Analysis that conforms to the De-
partment's Market Analysis Rules and Guidelines, as described in this
section, in effect for the year in which the sample Market Analysis is
submitted. An already approved Qualified Market Analyst will remain
on the list so long as at least one (1) Market Analysis has been sub-
mitted to the Department in the previous 12 months or items (A), (B),
(C) and (E) are submitted prior to October 1st. Otherwise, the Market
Analyst will automatically be removed from the list.
(2) During the underwriting process each Market Analysis
will be reviewed and any discrepancies with the rules and guidelines
set forth in this section may be identified and require timely correc-
tion. Subsequent to the completion of the Application Round and as
time permits, staff or a review appraiser will re-review a sample set
of submitted market analyses to ensure that the Department's Market
Analysis Rules and Guidelines are met. If it is found that a Market
Analyst has not conformed to the Department's Market Analysis Rules
and Guidelines, as certified to, the Market Analyst will be notified of
the discrepancies in the Market Analysis and will be removed from the
approved Qualified Market Analyst list.
(A) In and of itself, removal from the list of approved
Market Analysts will not invalidate a Market Analysis commissionedPROPOSED RULES October 27, 2017 42 TexReg 5931
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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/m1/19/?q=%22%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.