The post-award clock: award to carryover — Texas

Award day splits into two separate systems

The 9% competitive credit runs on a single annual cycle: one Application Acceptance Period, one Full Application deadline, one Board award meeting in July, with no Round 2 to fall back on. The 4%/bond credit runs all year with no fixed round at all — TDHCA scores and ranks bond pre-applications monthly, and a separate state agency, the Texas Bond Review Board, holds one annual lottery to set queue order for the new year's volume cap. These are two different regulatory architectures sharing one QAP, not one calendar with two credit types.

Treat that hit rate as a single-cycle snapshot computed directly from TDHCA's own dated Application Submission Log and Award and Waiting List Recommendations files, not an audited multi-year rate — and there is no single published statewide 9% credit-ceiling figure to compute a clean oversubscription multiple against the way some other states' annual reports allow.

The single-round design raises the stakes of every date on that table. A deal that is not ready by February 27, or that is not eligible or competitive by the July 31 Board meeting, has no in-year second attempt — the only within-year recourse is the Waiting List, which depends entirely on other applicants' credit being returned.

The Readiness to Proceed election — one point, a deadline the Board will not move

Readiness to Proceed is an elective scoring item worth a single point (unavailable in the At-Risk or USDA set-asides), not a mandatory threshold category. Electing it means certifying that site acquisition and building-permit submission will occur on or before the last day of March of the year following award — March 31, 2027 for a July 2026 award, roughly eight months out.

The QAP states plainly that the Board "cannot and will not waive the deadline" once elected. Waiting List awardees get the March deadline extended by however long they sat on the waiting list before their Commitment issued. Missing it, elected or not chosen carefully, triggers the future-round point penalty described below.

TDHCA's own numbering for this rule is not fully consistent across the document: its Application Submission Log legend cites it as Section 11.9(e)(8), while the QAP's own running text cross-references the same rule once, from within Section 11.9(f)(3) — the future-round-penalty section — as Section 11.9(c)(9). Treat the AppLog citation as the more reliable of the two until the official Texas Administrative Code text resolves which is correct — the same kind of "which artifact actually governs" question worth checking before scheduling anything off a single citation.

Carryover and the 10 percent test

For a 2026 award: Carryover Documentation is due November 2, 2026, and the 10% Test Documentation Delivery Date is fixed at July 1, 2027. That is a single calendar date set by TDHCA's own rule, not simply "12 months from the Carryover Allocation Agreement" — Texas's rule text explicitly incorporates the federal standard (IRC Section 42(h)(1)(E)(i), (ii); 26 CFR Section 1.42-6) rather than restating its own substantive test.

Depending on exactly when the Carryover Allocation Agreement is executed relative to when the federal statute treats the allocation as "made," TDHCA's fixed July 1 date could in some years fall short of the full 12 months the federal statute otherwise allows. This interaction has not been independently resolved here — work to TDHCA's fixed date rather than assuming a full 12 months is guaranteed.

A vintage flag worth carrying into any live deal: the Post Award and Asset Management Requirements chapter that contains this rule (10 TAC Chapter 10, Subchapter E) is not necessarily re-adopted every program year the way the QAP itself is — the version behind this guide is filenamed as a 2025 revision. Confirm a 2026-specific update has not superseded a cited fee or day-count before relying on it in a live deal.

Further out, Cost Certification — the point at which the actual HTC amount is fixed, since the Determination Notice figure is only an estimate until then — is due May 15 following the first year of the credit period.

The bond side: no round, a lottery, and a 180-day closing clock

TDHCA accepts multifamily bond pre-applications monthly, scores and ranks each month's batch, and presents winners to its Board the following month for an inducement resolution — which does not itself guarantee final Board approval of the Bond Application.

Separately, the Texas Bond Review Board holds one Private Activity Bond lottery per year to set queue order for the new year's volume cap. For the 2026 program year, the window to file for lottery inclusion ran October 5–20, 2025; the lottery itself was held November 12, 2025 at 1:00 p.m.; and the earliest date reservations begin issuing is January 2. A project needs an adopted Inducement Resolution before it can even enter the lottery.

Priority 1 and 2 lottery applicants get an email when they are next in line, then have exactly 3 business days to have TDHCA staff — not the applicant — confirm the HTC application was submitted; miss it and the Bond Review Board cancels the slot and moves to the next applicant in line, with no further warning. Priority 3 applicants get their reservation first and may file the HTC application whenever they choose. Every application that misses the lottery window is queued strictly by order of receipt afterward and, by statute, ranks below every lottery participant regardless of the Priority tier it would otherwise have carried.

That is a live, weekly-updated 2026 snapshot, not an annual figure. But the pattern is real: the actual competitive bottleneck in Texas's bond program sits specifically inside the local housing-finance-corporation 70% share, not the program as a whole — a developer who assumes "bonds are non-competitive in Texas" because the headline program looks undersubscribed is wrong if filing through the dominant local-HFC channel in a high-demand region.

Once a reservation issues, the closing clock is hard: 180 days for qualified residential-rental-project bonds (150 days for most other issuer categories, 210 days for state-voted, qualified student-loan, and qualified mortgage bond issues).

If the deadline would run past December 31, the issuer may notify the Bond Review Board in writing before December 24 of an election to carry the reservation forward; the Board itself may not file that carryforward election after February 15 of the following year. Within 5 business days of bond closing, the issuer must submit written notice of the delivery date, principal amount, and certified bond documents to the Board.

The closing fee itself is small relative to what is at stake: the greater of $1,000 or 0.025% of the certified bond principal. That is a much lighter financial consequence for walking away than a deposit sized as a percentage of the credit request, and it appears to show up in real behavior — two different cuts of the 2026 Bond Review Board data each show heavy reservation churn, though they do not agree on a single rate: a Dallas/Fort Worth and Houston regional sample found 20 of 33 line items (61%) marked withdrawn, representing $384,000,000 in requested volume against only $300,274,039 that reached closed status across 8 line items; a separate statewide post-regional-collapse tab found a 20% outright-withdrawal rate among 30 applications. Treat both as evidence that reservations are frequently abandoned before closing, not as a single audited annual rate.

There is a real, conditional cap on bond size worth checking before assuming Texas has none: in any year where cumulative reservation requests for qualified residential-rental-project bonds exceed 55.75% of the state ceiling as of October 20, bonds issued for an individual project cannot exceed 55% of its reasonably expected aggregate basis plus land. Below that threshold, there is no percentage cap beyond the federal bond-financing test itself. Whether the 55.75% trigger is currently active is unclear — the Bond Review Board's own program-year page cites an October 20, 2024 figure on a page describing the 2026 program year, which reads as a stale, uncorrected carryover rather than a deliberate lookback; confirm the current-year figure directly before sizing a bond issuance against this cap.

Local building permits follow the same deferred-past-the-gate pattern the 9% side uses for zoning: permits, or evidence they are obtainable subject only to fee payment, are required before bond closing, not before the pre-application, and TDHCA may allow closing to proceed without them case-by-case if lender and investor comfort letters are provided.

Escape hatches: waiting list, force majeure, and short-term delay relief

Force Majeure is defined with real specificity — acts of God including "significant and unusual rainfall or subfreezing temperatures," loss of utility access from severe weather, explosion, vandalism, military orders, unrelated-party litigation, law changes, national emergency, riot, terrorism, supplier failure, or material/labor shortages — and explicitly excludes anything caused by the Development Owner's own negligence or willful act. The Owner must show construction had already commenced, that reasonable mitigation was taken, that every obligation not impeded by the event was fulfilled, that proper insurance was in place, and that timely notice was given — and must bring the request to the Board within 180 days of the applicable placed-in-service deadline.

Both relief provisions borrow the same federal timing fiction: credit returned after September 30 of the prior program year may be treated as returned on January 1 of the current year.

What failure costs, and who pays it

Texas does not run a single unified negative-points ledger. It uses two narrower, differently shaped mechanisms.

An Adherence to Obligations finding can itself trigger administrative penalties or a point reduction on every application involving that party for the next two rounds — the consequence follows the person and the firm, not just the dead deal, on a narrower and shorter fuse than a points-per-violation regime run indefinitely.

Extension requests for Carryover, the 10% Test, Construction Status Reports, or Cost Certification filed at least 30 calendar days before the original deadline carry no fee; late or last-minute requests cost $2,500, escalating $500 per subsequent extension on the same activity — and a Carryover extension can never be pushed past December 1 of the year the Commitment was issued.

The Compliance Monitoring Fee is smaller than some other states' equivalent, but it is structured differently, not just priced lower: it is an annual recurring fee, not a one-time capitalized cost. For HTC-only developments it is $40 per low-income unit, first invoiced before Form 8609 issuance and collected retroactively from the first year of the credit period, then billed again every year afterward on an anniversary date tied to the month the first building was placed in service. A separate unused-credit penalty of 10% of the unused amount applies if cost certification shows less credit was used than allocated and the excess is not returned, once Form 8609s are issued more than 180 days after the end of the first credit-period year.

Where the window actually breaks

The single-round design turns an ordinary underwriting slip into a full-year loss. Real, named terminations from the 2026 cycle carry explicit "Withdrawn" status in TDHCA's own application log — Legacy Park (Houston), Knoxwood Crossing (College Station), and Desert Springs (Del Rio) among them — though the file that flags the status does not disclose the underlying reason for any one of them.

The notification-not-approval gate at filing does not disappear after award; it resurfaces once construction activity actually starts. Because the threshold requirement is to notify — not to secure sign-off from — the mayor, school district, county, and state legislators, a deal that satisfied the notification rule to the letter can still walk into a hostile council or an unresolved density-based resolution vote once real money is on the table.

Zoning risk resurfaces at exactly the moment this phase is measuring. A site filed under the "pending zoning change" posture has its final approval documentation due at the Commitment or Determination Notice stage, not at Application — so a slow city council can still blow up a deal here, after real money and time have already gone into it, just later in the process than a jurisdiction that required zoning finality before filing at all.

Extension-fee escalation is a slow bleed, not a single failure. Quarterly Construction Status Reports are due the 10th of the month following each calendar quarter (January, April, July, October) until the development is complete, and a late report triggers an automatic fee regardless of whether an extension was requested — a deal team that stops tracking that cadence after initial lease-up can accumulate avoidable fees for the life of the compliance period.

The tail runs past this phase but is set inside it. Placed-in-service closes at the end of the second calendar year following the allocation year — December 31, 2028 for a 2026 award. Extended affordability is elective past that point, not a mandatory state floor: Texas's Extended Use Period is defined exactly at the federal 30-year minimum, with 35, 40, and 45-year commitments available only as scoring points a developer can decline.