1. (a) All assisted properties must be located in eligible areas as defined by HUD and by the applicable NOFA.
2. (b) The Contract term is based upon varying types of activities included in the Contract between the Department and the Department's Subgrantee. Exhibit C, Project Implementation Schedule, of the contract, provides an outline of specific timelines, milestones and thresholds. Performance under the contract will be evaluated according to the benchmarks described in each Contract.

3. (c) Administrative Threshold. Administrative draw requests are funded from the administration or developer fee line item in Exhibit B, Budget, of the Contract. Reimbursement of eligible administrative expenses is regulated as described in paragraphs (1) - (5) of this subsection:

   1. (1) Threshold 1. Cumulative administrative draw requests may allow up to 10 percent of the administration or developer fee line item to be drawn down prior to the start of any project activity included in the performance statement of the contract (provided that all pre-draw requirements, as described in the Contract, for administration have been met). This draw may be limited by NOFA, underwriting report, or by Contract. Subsequent administrative expenditures will be reimbursed in the percentage amounts indicated, provided that all Contract benchmark requirements have been met, as identified in subsection (b) of this section;
   2. (2) Threshold 2. Subsequent administrative draw requests are allowed in proportion to the direct project funds drawn on the contract; up to 90 percent of the total administration or developer fee line item. The cumulative total percentage of administrative funds requested may not exceed the cumulative total percentage of project funds expended for hard and/or soft costs directly attributable to activities under the Contract;
   3. (3) Threshold 3. The final 10 percent of the administration or developer fee line item is the administrative retainage. Half of the retainage or, in other words, an additional 5 percent (95 percent of the total), may be drawn down after submission of complete Contract close-out documents;
   4. (4) Threshold 4. The final 5 percent (100 percent of the total), less any administrative funds reserved for audit costs as noted on the project completion report, may be drawn down following receipt of the programmatic Contract close-out letter issued by the Department; and
   5. (5) Threshold 5. Any funds reserved for audit costs will be released upon completion and submission of an acceptable audit and a documented drawdown request for the expenses. Only the portion of audit expenses reasonably attributable to the contract is eligible.
4. (d) Forbearances. Contract expenditure thresholds and milestones are included in Exhibit C, Project Implementation Schedule, of the contract; violations of which will subject the Subgrantee to the requirements found in this chapter. At the Department's discretion, forbearances of thresholds and milestones may be granted upon request and documentation of extenuating circumstances.
5. (e) Waivers. Program administrative regulations set forth in any Texas SFNSP NOFA by the Department's Governing Board or terms in the contract may be waived by the Department, acting by and through its Executive Director or his/her designee, up to the limits of Texas SFNSP regulations and guidance as previously established, periodically updated, or updated in the future by HUD. The Executive Director or his/her designee may waive the Texas SFNSP purchase discount to the limits of the purchase discount as allowed by the NSP Bridge Notice. The Texas NSP NOFA and the NSP Federal Register Notice (Docket No. FR-5255-N-01) published in the Federal Register (73 FR 58330), require a minimum discount of 5 percent for any individual property and 15 percent for a portfolio of properties to be acquired utilizing Texas SFNSP funds. (If only acquiring one property, the one property constitutes a portfolio.) The NSP Bridge Notice allows for up to a 1 percent discount for individual properties and portfolios.

Source Note:The provisions of this §29.3 adopted to be effective November 1, 2012, 37 TexReg 8504.