The capitalized terms or phrases used herein are defined in this title. Any other capitalized terms in the subchapter shall have the meaning defined in Chapter 2306 of the Texas Government Code, Chapter 394, Texas Local Government Code, and other state or Department rules, as applicable. Defined terms, when not capitalized, are to be read in context and construed according to common usage.

1. (1) Audit Report--A report required by Section 394.9027 of Texas Local Government Code completed by an Auditor in a manner and format prescribed by the Department.
2. (2) Auditor--An individual who is an independent auditor or a compliance expert with an established history of providing similar audits on housing compliance matters, meeting the criteria established herein.
3. (3) Board--The governing board of the Texas Department of Housing and Community Affairs.
4. (4) Chief Appraiser--The chief appraiser of any appraisal district in which a Development is located.
5. (5) Department--The Texas Department of Housing and Community Affairs.
6. (6) Housing Choice Voucher Program--The housing choice voucher program under Section 8, United States Housing Act of 1937 (42 U.S.C. Section 1437(f)).
7. (7) Housing Finance Corporation (HFC)--A public, nonprofit corporation created under Chapter 394, of the Texas Local Government Code. This includes an instrumentality created by the HFC.
8. (8) Housing Finance Corporation User or HFC User--A Housing Finance Corporation; or for a Multifamily Residential Development that is not owned directly by a Housing Finance Corporation, a public-private partnership entity or a developer or other person or entity that has an ownership interest or a leasehold or other possessory interest in a Multifamily Residential Development financed or supported by a Housing Finance Corporation.
9. (9) HUD--The United States Department of Housing and Urban Development.
10. (10) Lower Income Housing Unit--A residential unit reserved for occupancy by an individual or family earning not more than 60 percent of the area median income, adjusted for family size.
11. (11) Maximum Market Rent--With respect to a particular Restricted Unit Type, the average annual Rent charged for all non-income-restricted units in the Development having the same or substantially similar floor plan as the Restricted Unit Type.
12. (12) Middle Income Housing Unit--A residential unit reserved for occupancy by an individual or family earning not more than 100 percent of the area median income, adjusted for family size.
13. (13) Moderate Income Housing Unit--A residential unit reserved for occupancy by an individual or family earning not more than 80 percent of the area median income, adjusted for family size.
14. (14) Multifamily Residential Development--(also called Development) Any residential development consisting of four or more residential units intended for occupancy as rentals, regardless of whether the units are attached or detached. If multiple Developments are owned by the same HFC with the same HFC User under one single-purpose ownership entity, are within the same jurisdictional boundaries pursuant to Section 394.031 of the Texas Local Government Code, and are bound under one Regulatory Agreement, it will be considered as one singular Multifamily Residential Development.
15. (15) Regulatory Agreement--A Land Use Restriction Agreement (LURA), Ground Lease, Deed Restriction, or any similar restrictive instrument that is recorded in the real property records of the county in which the Development is located or an agreement between the HFC and HFC User which is not recorded in the real property records.
16. (16) Rent--Any recurring fee or charge a tenant is required to pay as a condition of occupancy, including a fee or charge for the use of a common area, amenity, or facility reasonably associated with the residential rental property. The term does not include fees for services or amenities that are optional for a tenant, such as pet fees and fees for storage or covered parking. For Developments acquired prior to May 28, 2025, starting with reporting year 2026, the Development must comply with this rent definition.
17. (17) Rent Reduction--The projected difference between the annual Rent charged for a Restricted Unit and the Maximum Market Rent that could be charged for that same unit without the income restrictions.
18. (18) Responsible Parties--The Housing Finance Corporation that owns or is associated with the Development, the Housing Finance Corporation User of the Development, the Texas Comptroller, and the governing body of the Sponsor.
19. (19) Restricted Unit--A residential unit in a Multifamily Residential Development that is reserved for or occupied by a household meeting certain income limitations established in the Regulatory Agreement, in accordance with Section 394.9026(c)(1) of Texas Local Government Code, with Rent for such unit restricted as set forth in these rules. Restricted Units may float in a Development and need not be permanently fixed.
20. (20) Sponsor--A municipality, county or collection of municipalities and counties that causes a corporation to be created to act in accordance with Chapter 394, of the Texas Local Government Code.
21. (21) Substantially Similar Floor Plan--Means a Unit Type.
22. (22) Tax Year--Is a calendar year. For the purposes of all provisions within the rule, the terms "Tax Year" and "Calendar Year" shall have the same meaning and shall be interchangeable.
23. (23) Unit Type--Means the type of unit determined by the number of bedrooms.
24. (24) Very Low Income Housing Unit--A residential unit reserved for occupancy by an individual or family earning not more than 50 percent of the area median income, adjusted for family size.

Source Note:The provisions of this §10.1202 adopted to be effective March 26, 2026, 51 TexReg 1836.