Relating to underwriting standards for evaluating applications for low income housing tax credits.
Impact
The implementation of SB1989 significantly alters the evaluation process for low income housing developments. By introducing a maximum debt coverage ratio requirement and revising how income and expenses are calculated, this bill aims to enhance the accuracy of financial assessments. Additionally, it fosters consistency in evaluating applications during the funding cycle, which can lead to a more strategic allocation of state resources toward economically sustainable projects.
Summary
SB1989 is a legislative act that addresses the underwriting standards necessary for evaluating applications for low income housing tax credits in Texas. The bill amends specific sections of the Government Code to refine the criteria under which the Texas Department of Housing and Community Affairs assesses housing development proposals. It emphasizes a thorough feasibility assessment focused on actual net operating income and standardized debt coverage ratios, which serves to ensure that only financially viable projects receive support.
Sentiment
General sentiment around SB1989 appears to be favorable among legislators who prioritize the efficient use of state funds and the promotion of viable housing projects. It has garnered broad support, evidenced by a unanimous vote of 139 to 0 during its third reading in the House. This overwhelming approval reflects a consensus regarding the necessity of establishing sound financial practices in the allocation of housing tax credits.
Contention
While significant support exists for SB1989, potential contention lies within the specifics of its underwriting standards. Critics may argue that stringent financial criteria could unintentionally dissuade developers from pursuing low income housing projects, particularly in economically challenged areas. Such concerns highlight the balance that must be struck between maintaining fiscal responsibility and encouraging the development of affordable housing options across Texas.
Relating to the requirements for applications for low income housing tax credits for certain developments financed through the private activity bond program.
Relating to the issuance by the Texas Department of Housing and Community Affairs of certain federal forms for purposes of allocating low income housing tax credits; authorizing an administrative penalty.