1. (a) Notice of Funding Availability (NOFA). All MFDL funds from the annual allocation will be distributed pursuant to the terms of a published NOFA that provides the specific collapse dates and deadlines as well as set-aside and RAF amounts applicable to the MFDL program, along with scoring criteria, priorities, award limits, and other Application information. Other funds may be distributed by NOFA or through other lawful methods approved by the Board. Set-aside, RAF, and total funding amounts may increase or decrease in accordance with the provisions herein without further Board action as long as the NOFA itself did not require Board action.
2. (b) Date of Receipt. Applications will be considered received on the business day of receipt. If an application is received after 5:00 p.m., Austin local time, it will be determined to have been received on the following business day. Applications received on a non-business day will be considered received on the next day the Department is open. Applications will be considered complete at the time all required third party reports and application fee(s), in addition to the application, are received by the Department. Within certain set-asides, the date of receipt may be fixed, regardless of the earlier actual date a complete application is received. If multiple applications are received on the same date, in the same region, and within the same set-aside, then score and tiebreaker factors, as described in §13.6 of this chapter (relating to Selection Criteria) for MFDL or 10 TAC §11.7 and §11.9 of this title (relating to Tie Breaker Factors and Competitive HTC Selection Criteria, respectively) for Applications layered with 9% HTC, will be used to determine the Application's rank.
3. (c) Applications. MFDL Applicants must follow the applicable requirements in 10 TAC Chapter 11 Subchapter C, (relating to Application Submission Requirements, Ineligibility Criteria, Board Decisions and Waiver of Rules). Failure to timely respond to any notice of Deficiency will result in suspension of the Application and reestablishment of the date of receipt of the Application to the final date at which the cure to the notice was received by the Department. If the date of receipt of the Application is reestablished, an Application could be de-prioritized in favor of another Application received prior to the new submission date.
4. (d) Market Analysis. Applications proposing Rehabilitation that request MFDL as the only source of Department funding may be exempted from the Market Analysis requirement in 10 TAC §11.205(2) (relating to Required Third Party Reports) if the Development's rent rolls for the most recent six months reflect occupancy of at least 80%.
5. (e) Environmental clearance. The Department shall use its best efforts to conclude the environmental review of the property expeditiously. All applicants for MFDL funds, regardless of whether or not the Development Site is in a Participating Jurisdiction, must include the following language in the purchase contract or site control agreement: "(1) Notwithstanding any other provision of this Contract, Purchaser shall have no obligation to purchase the Property, and no transfer of title to the Purchaser may occur, unless and until the Department has provided Purchaser and/or Seller with a written notification that: (A) It has completed a federally required environmental review and its request for release of federal funds has been approved and, subject to any other Contingencies in this Contract, (i) the purchase may proceed, or (ii) the purchase may proceed only if certain conditions to address issues in the environmental review shall be satisfied before or after the purchase of the property; or (B) It has determined that the purchase is exempt from federal environmental review and a request for release of funds is not required."
6. (f) Oversubscribed funds for 9% layered Applications. Applications also requesting 9% HTC may have the ability to revise financing prior to award should MFDL funds be oversubscribed in a set-aside or for a fund source that has geographic limitations within a set-aside. The Department will provide notice to all impacted Applicants in the case of over-subscription.

7. (g) Source of Direct Loan funds. When determining the source of funds that an Application will receive when recommended for an award from a set-aside that has multiple sources of funds, the Department will prioritize sources of funds for recommended Applications in the order described in paragraphs (1) - (3) of this subsection, which may be limited by the type of activity an Application is proposing and/or the Development Site of an Application. The funds may further be prioritized or assigned to an Application based on limiting repayment risk and other considerations:

   1. (1) Federal funds that have commitment and expenditure deadlines;
   2. (2) Federal funds that do not have commitment and expenditure deadlines;
   3. (3) Nonfederal funds that do not have commitment and expenditure deadlines.

8. (h) Eligibility Criteria. The Department will evaluate the Application for eligibility and threshold at the time of full Application pursuant to the requirements of this chapter and Chapter 11 of this title (relating to the Qualified Allocation Plan). If there are changes to the Application at any point prior to MFDL loan closing that have an adverse effect on the score and ranking order and that would have resulted in the application being ranked below another application in the ranking, the Department may terminate the Application.

   1. (1) Applicants requesting MFDL as the only source of Department funds may meet the Experience Requirement under 10 TAC §11.204(6) of this title (relating to Required Documentation for Application Submission) or by providing evidence of the successful development, and operation for at least five years, of at least twice as many affordability restricted units as requested in the Application.

   2. (2) Applications for Developments previously given awards from the Department, or where construction has already started or been completed, regardless of fund source and are not proposing acquisition and rehabilitation, must be found eligible by the Board. The Board may find other applicants eligible for good cause such as Developments assisted by the Department that have encountered adverse factors beyond their control that could materially impair their ability to provide the affordable housing. An application that requires a finding of eligibility by the Board must identify that fact in their application so that the staff may present the matter to the Board for an eligibility determination. A finding of eligibility under this section does not guarantee an award. In general, these applications will not be funded with HOME or NHTF funds.

      1. (A) Requests for eligibility determinations under this paragraph must be received with the Application, so that staff may present the matter to the Board for an eligibility determination, and will not be considered more than 30 calendar days prior to the first Application acceptance date published in the NOFA.

      2. (B) Criteria for the Board to consider would include clauses (i) - (iii) of this subparagraph:

         1. (i) evidence of circumstances beyond the Applicant's control which could not have been prevented by timely start of construction; or
         2. (ii) Force Majeure events; and
         3. (iii) evidence that no further exceptional conditions exist that will delay or cause further cost increases.
      3. (C) Applications for Developments previously given awards from the Department that have not yet achieved Construction Completion, Applications will be evaluated at no more than the amount of Developer Fee proposed in the original Application. MFDL funds may not be used to fund increased Developer Fee, regardless of the allowability of the increase under other Department rules.
9. (i) The contractual terms of an award will be governed by and reflect the rules in effect at the time of application; provided, however, that any changes in federal requirements will be reflected in the contractual terms and further provided, that if, prior to execution of such contract, there are new rules in effect, the Applicant may elect to be governed by the new rules.

Source Note:The provisions of this §13.5 adopted to be effective December 30, 2018, 43 TexReg 8414.