Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017 Page: 5,970
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f ) [(k)] Repayment will be required on a per Unit basis for
Units that have not been rented to eligible households within eighteen
(18) months of the final Direct Loan draw.
(m) [(1)] Termination of the Direct Loan award and repayment
of all disbursed funds will be required for any Development that is not
completed within four (4) years of the effective date of a Direct Loan
Contract.
(n} [(m)] Closing Deadline: Awards will be made subject to
[hard] closing deadlines established at the time of award by the Board
subject to the conditions in 13.8(a), which may only be extended in
accordance with 13.12 [by additional Board action] on the basis of
delays caused by circumstances outside the control of the applicant or
constraints in arranging a multiple source closing. An extension will
not be available if an Applicant has:
(1) failed to timely begin or complete processes required to
close; including
(A) finalizing all equity and debt financing; or
(B) the environmental review process; or
(2) made changes to the Development that require addi-
tional underwriting by the Department without sufficient time to com-
plete the review.
(p} [(n)] Loan Closing: In preparation for closing any Direct
Loan, the Development Owner must submit the items described in
paragraphs (1) - (7) of this subsection:
(1) Documentation of the prior closing or concurrent clos-
ing with all sources of funds necessary for the long-term financial fea-
sibility of the Development.
(2) Due diligence determined by the Department to be pru-
dent and necessary to meet the Department's rules and to secure the
interests of the Department.
(3) Where the Department will have a first lien position and
the Applicant provides personal guarantees from all principals as well
as [and] documentation that closing on other sources is reasonably ex-
pected to occur within three (3) months, the Executive Director or au-
thorized designee may approve a closing to move forward without the
closing on other sources. The Executive Director as the authorized de-
signee of the Department must require a personal guarantee, in form
and substance acceptable to the Department, from a Principal of the
Development Owner for the interim period;
(4) When Department funds have a first lien position, as-
surance of completion of the Development in the form of payment and
performance bonds in the full amount of the construction contract or
equivalent guarantee in the sole determination of the Department is re-
quired. Such assurance of completion will run to the Department as
obligee. Development Owners utilizing the USDA 515 program are
exempt from this requirement but must meet the alternative require-
ments set forth by USDA;
(5) Documentation required for closing includes, but is not
limited to:
(A) Draft Owner/General Contractor agreement and
draft Owner/Architect agreement prior to closing with final executed
copies required by the day of closing;
(B) survey of the Property that includes a certification
to the Department, Development Owner, Title Company, and other
lenders;
(C) plans and specifications for review by the Depart-
ment's inspection staff. Inspection staff will issue a plan review let-ter that is intended to [will] assist in identifying early concerns as-
sociated with [preparation for] the Department's [development's] final
construction requirements [inspeeon];
(D) if layered with Housing Tax Credits, a fully exe-
cuted limited partnership agreement between the General Partner and
the tax credit investor entity (may be provided concurrent with clos-
ing);
(E) final Development information, including but not
limited to a final development cost schedule, sources and uses, operat-
ing proforma, annual operating expenses, cost categories for the Direct
Loan funds, updated written financial commitments or term sheets and
any additional financing exhibits that have changed since the time of
application;
t(F) If the changes to the budget or sources of funds re-
fleet material changes to the transaction approved by the Board doc-
umentation to ensure that the Development continues to meet the re-
quirements of this chapter must be provided and material changes to
the application must be approved by the Board.Material changes i-
elude but are not limited to any increase in debt payment for superior
lien loans and a greater than a 4-0 percent change in any of the follow-
ing }
{-1 Total Housing Development Cests;
{-{iS deferred developer fee amount;
{ii superior lean amountsy);-
(6) if required by the fund source, prior to Contract Execu-
tion, unless an earlier period is described in Chapter 10 of this title, the
Development Owner must provide verification of:
(A) environmental clearance;
(B) Site and Neighborhood clearance;
(C) documentation necessary to show compliance with
the Uniform Relocation Assistance and Property Act and any other re-
location requirements that may apply; and
(D) any other documentation that is necessary or pru-
dent to meet program requirements or state or federal law in the sole
determination of the Department.
(7) The Direct Loan Contract as executed, which will be
drafted by counsel for the Department. No changes proposed by the
Developer or Developer's counsel will be accepted unless approved by
the Department's Legal Division.
(pj [(e)] Loan Documents. The Development Owner is re-
quired to execute all loan closing documents required by and in form
and substance acceptable to the Department's Legal Division
(1) Loan closing documents include but are not limited to
a promissory note, deed of trust, construction loan agreement (if the
proceeds of the loan are to be used for construction), LURA, Architect
and/or licensed engineer certification of understanding to complete en-
vironmental mitigation if such mitigation is identified in HUD's envi-
ronmental clearance or the Real Estate Analysis Division (REA) and
assignment and security instruments whereby the Developer, the De-
velopment Owner, and/or any Affiliates (if applicable) grants the De-
partment their respective right, title, and interest in and to other collat-
eral, including without limitation the Owner/Architect agreement and
the Owner/General Contractor agreement, to secure the payment and
performance of the Development Owner's obligations under the loan
documents. In the event the Development receives funding that re-
quires the Department's funding to be in a subordinate position, the
individual who is able to control the Development (all such individu-42 TexReg 5970 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/m1/58/?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.