1. (a) Direct Loan funds may be made available through a Notice of Funding Availability ("NOFA") or other similar governing document that includes the basic Application and funding requirements. MFDL funds may be used to directly assist distressed developments previously funded by the Department when approved by specific action of the Department's Governing Board ("Board").
2. (b) Direct Loan funds are composed of annual HOME and National Housing Trust Fund allocations from HUD, repayment of TCAP loans, HOME Program Income and any other similarly encumbered funding that may become available, except as otherwise noted in this Chapter. Similar funds include any funds that are required to be to be loaned or granted for the development of multifamily property and are not governed by another Chapter in this Title.
3. (c) Direct Loan funds may be used for the acquisition, new construction, reconstruction, or rehabilitation 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.

4. (d) 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, 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) Commercial Space costs;
   8. (8) Reserve accounts not related to NHTF;
   9. (9) TDHCA fees;
   10. (10) Delinquent fees, taxes, or charges;
   11. (11) Costs incurred more than 24 months prior to the effective date of the Direct Loan Contract unless the Application is awarded TCAP Loan Repayment funds;
   12. (12) 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 January 8, 2017, 41 TexReg 10589.