1. (a) Direct Loan funds may be made available through a NOFA or other similar governing document that includes the basic Application and funding requirements.
2. (b) Direct Loan funds may not be awarded if an underwriting report that has been issued by the Department's Real Estate Analysis Division has become final and concludes that the Development does not need the MDFL funding for which it has applied because it is over sourced.
3. (c) Direct Loan funds are composed of annual HOME and National Housing Trust Fund allocations from HUD, repayment of TCAP loans, HOME Program Income, NSP Program Income, and any other similarly encumbered funding that may become available by the Department's Governing Boards (Board) action, except as otherwise noted in this chapter. Similar funds include any funds that are required to be loaned or granted for the development of multifamily property and are not governed by another chapter in this title.
4. (d) Direct Loan funds may be used for the predevelopment, acquisition, new construction, reconstruction, rehabilitation, or preservation of affordable housing with suitable amenities, including real property acquisition, site improvements, conversion, demolition, or operating cost reserves, all subject to HUD guidance. Other expenses, such as financing costs, relocation expenses of any displaced persons, families, businesses, or organizations may be included. MFDL funds may be used to assist distressed developments previously funded by the Department when approved by specific action of the Board.

5. (e) While all costs associated with the Development and known by the sponsor must be disclosed as part of the Application, costs ineligible for reimbursement with Direct Loan funds in accordance with 24 CFR Part 91, Part 92, Part 93, Part 570, and 2 CFR Part 200, as federally required or identified in the NOFA include but are not limited to:

   1. (1) Offsite costs;
   2. (2) Stored Materials;
   3. (3) Site Amenities;
   4. (4) Detached Community Buildings;
   5. (5) Carports and/or garages;
   6. (6) Parking garages;
   7. (7) Swimming pools;
   8. (8) Commercial Space costs;
   9. (9) Reserve accounts not related to NHTF;
   10. (10) TDHCA fees;
   11. (11) Syndication and organizational costs;
   12. (12) Delinquent fees, taxes, or charges;
   13. (13) Costs incurred more than 24 months prior to the effective date of the Direct Loan Contract unless the Application is awarded TCAP RF;
   14. (14) Costs that have been allocated to or paid by another fund source;
   15. (15) Deferred Developer fee; and
   16. (16) Other costs limited by Award or NOFA, or as established by the Board.

Source Note:The provisions of this §13.3 adopted to be effective December 30, 2018, 43 TexReg 8414.