"We like the site. What does Texas actually require to lock it up, and what happens if we're still under contract when the Bond Review Board's calendar runs out?"
You are buying time, not land — and the instrument list is short and specific
Texas faces the identical structural inversion the California brief opens with: the developer almost never closes on land before the subsidy award exists, because the 9% credit or the 4% credit paired with a Texas Bond Review Board private-activity-bond reservation is the capital that pays for the land. The dominant instrument is still a long-dated option or contract with an extension ladder, not a 30–60 day escrow.
But the Texas Department of Housing and Community Affairs (TDHCA) defines site control more narrowly than California's stack. 10 TAC Section 11.1(122) of the 2026 Qualified Allocation Plan ("QAP") defines it as ownership or a current contract that is "legally enforceable giving the Applicant the ability, not subject to any legal defense by the Owner or anyone else, to develop and operate a Property and subject it to a LURA." Section 11.204(9)(B) then lists exactly three acceptable forms — narrower than CTCAC's four-plus-catchall and CDLAC's six, and with no HCD-style DDA/ENA category and no CDLAC-style chain-of-agreements or eminent-domain category anywhere in the QAP.
| Form | What it must include |
|---|---|
| Fee ownership, or an existing lease with at least 45 years remaining | A recorded warranty deed vesting indefeasible title, with a settlement statement — or the functional equivalent for a lease already running 45 years or more |
| A contract or option for lease | A minimum term of 45 years, a price, legal description, proof of consideration, and an expiration date |
| A contract for sale, or an option to purchase | A price, legal description, proof of consideration, and an expiration date |
The 45-year minimum lease term is a flat, hard number with no California analog — CA's instruments key to "the regulatory period," a variable.
Proof of consideration is not incidental in Texas practice. Texas commercial contracts characteristically use a distinct, small "option fee" — as opposed to earnest money — paid for an unrestricted right to terminate during a negotiated option period, a term of art specific to Texas contract practice. That option fee is very likely what satisfies the QAP's proof-of-consideration requirement, and it is a different mechanic from California's deposit/extension-fee ladder. No published benchmark exists for a typical Texas option-fee amount or option-period length; treat it as a deal-by-deal negotiation, not a rule of thumb to build into underwriting.
One vintage caution worth carrying the way the California brief carries its CDLAC-renumbering warning: the 2026 QAP was approved by the TDHCA Board on November 6, 2025 and approved by the Governor — with a substantive modification to Section 11.202(1)(O) — on December 1, 2025. Gubernatorial approval after public hearing is a federal requirement under IRC Section 42(m)(1)(A)(i), not a Texas invention, but the fact that the Governor's office made a real edit on the exact document TDHCA staff drafted means the QAP is not fully settled until early December of the prior year, and a mid-cycle correction in any given round is plausible.
A bond deal runs two site-control clocks, not one
For a 4% credit paired with private-activity bonds, Texas runs two separate site-control checks in sequence — one at TDHCA, one at the Texas Bond Review Board (TBRB) — and they are not the same requirement.
| Gate | Requirement | Citation |
|---|---|---|
| TDHCA | Pre-application Site Control under Section 11.204(9) must be valid through the date of both the Board meeting at which the inducement resolution is considered and, if applicable, the subsequent submission of the application to the TBRB | 10 TAC Section 12.5(3), 2026 Multifamily Housing Revenue Bond Rules |
| TBRB (Lottery applications) | An active executed earnest money contract, effective at submission, expiring no earlier than December 1 of the preceding year, with an option to extend through March 1 of the program year conditioned only on additional earnest money or extension fees | 34 TAC Section 190.3(b)(13) |
Within three business days of a reservation notification, the borrower must then either show a filed LIHTC application with TDHCA or prove the earnest money contract is still in full force, or the bond reservation automatically expires. This has no California parallel — CDLAC does not run an annual lottery with a fixed calendar-date contract-expiration rule.
The software-relevant consequence: a bond deal's site-control ledger needs two rows, not one — a TDHCA-facing validity window that moves with the deal's own board-meeting timeline, and a TBRB-facing validity window keyed to fixed calendar dates (December 1 / March 1) that do not move at all.
Sequence, and the clock you do not control
The working sequence mirrors California's: LOI, negotiated contract or option with an extension ladder, then a diligence period against go/no-go gates. Signed LOI to executed contract or option runs a comparable 2–8 weeks, longer for a public-agency seller — a practitioner heuristic, not codified anywhere, the same caveat the California brief attaches to its own elapsed-time table.
TDHCA's Program Calendar for Housing Tax Credits (QAP Section 11.2) publishes Competitive HTC deadlines, Pre-Application dates, Third Party Report Delivery dates, and Full Application dates each cycle. These change every year and the toolkit must read them, never hardcode them, exactly as the California brief insists for CTCAC, CDLAC, and HCD dates. Layered on top of that, for a bond deal, is the TBRB's own calendar-year private-activity-bond lottery with its own hard dates — a second, Texas-specific calendar a 4% deal must satisfy simultaneously with the QAP calendar.
Like CTCAC, TDHCA does not extend Application deadlines for a missing third-party report. QAP Section 11.205 states plainly that for Competitive HTC Applications, "if the reports, in their entirety, are not received by the deadline, the Application may be terminated."
One title clock, not three — and a bring-down letter instead of a fresh order
QAP Section 11.204(11) requires a title commitment or policy, with a legal description consistent with the Site Control document. If the title commitment or policy is dated more than six months prior to Application submission, a letter from the title company stating that nothing further has transpired during that six-month period is required instead of a fresh order. Tax-Exempt Bond Developments that do not request a Direct Loan, and where TDHCA is not the issuer, are exempt from the requirement entirely.
This is structurally different from California's regime in two ways. First, it is one rule, not three — a hybrid California deal must satisfy CTCAC's 90 days, CDLAC's 90 days, and HCD's 30 days simultaneously; Texas runs a single six-month clock across its own programs. Second, Texas offers a bring-down letter rather than a hard reorder — where California requires an entirely fresh report past its window, Texas lets the same title company certify that nothing has changed, which is cheaper and faster but shifts the risk of an undisclosed change onto that certification rather than a fresh search.
Whether TDHCA offers a California-style one-time reuse of a stale title report or ESA from an unsuccessful prior-cycle Application was not confirmed in the research behind this guide — no reuse or carryover language turned up in the sections searched, but the QAP was not read exhaustively for this specific mechanism. Treat this as an open question to verify directly, not a settled "no."
There is no vintage lock on federal geography designations
The California brief's single most valuable finding in this domain is that a site-control execution date can lock in a favorable Opportunity Area map designation for up to seven years. Texas has no comparable mechanism. TDHCA's own scoring items that depend on federally-defined geography — Qualified Census Tract, non-metro Difficult Development Area, Small Area DDA, Qualified Opportunity Zone, and the QAP's own Opportunity Index — key off the program year in which the Certificate of Reservation or Application is submitted, not off the date the applicant first obtained site control.
QAP Section 11.6(3)(4) addresses this directly for bond deals: a QCT/DDA/SADDA designation must coincide with the program year the Certificate of Reservation is issued for the 30% basis boost to apply, with a narrow one-year grace rule tied to federal designation-effective-date guidance — itself a federal mechanic, not a Texas invention. This is a genuine negative finding, not an oversight: do not port California's site-control-date vintage-lock feature into a Texas build. There is nothing in Texas's rules for it to compute.
The acquisition price you underwrite is the number in the site control document
QAP Section 11.302(d)(1)(A): for a non-identity-of-interest acquisition with no building-acquisition cost in basis, the underwritten acquisition cost is the amount reflected in the Site Control document for the Property. At cost certification, that figure is replaced by the actual amount paid per the settlement statement. For an identity-of-interest acquisition, or one triggering the Uniform Relocation Assistance Act's appraisal requirement, the underwritten cost is the lesser of the Site Control price or an appraised value meeting Section 11.304.
California's comparable rule is about when an appraisal's date of value must fall relative to the site-control document's execution date. Texas's rule is different in kind: outside identity-of-interest deals, Texas often does not require an appraisal to set acquisition-cost basis at all — the contract price is the number, subject to true-up at cost certification. The software-relevant check in Texas is therefore not "is the appraisal date inside a window," it is "does the Development Cost Schedule's acquisition-cost line item match the Site Control document's stated price" — a data-consistency check, not a date-window check, and one TDHCA underwriters currently catch by hand.
Appraisals are still required, under Section 11.205(4), for any Application claiming building acquisition in Eligible Basis or for identity-of-interest transactions, and must not be dated more than six months prior to Application submission, with a USDA carve-out. Section 11.304 requires USPAP conformance, a Texas Appraisal Licensing and Certification Board general certified appraiser, a disinterested-party statement, and — where URA applies — conformance to 49 CFR Part 24 and HUD Handbook 1378.
An ESA is required on every Texas Application, and it must contain seven things ASTM doesn't
This is the cleanest inversion of the California rule in the whole domain. CTCAC does not require a Phase I Environmental Site Assessment at application; Texas requires one for every single Development, at every funding source, with no CTCAC-style exception. QAP Section 11.205(1): the ESA, "required for all Developments," must not be dated more than 12 months prior to Application submission. If that window is exceeded, a letter or updated report dated not more than six months prior, reaffirming the conclusions of the initial report, is required instead. Existing USDA-funded Developments are exempt from the submission requirement but remain responsible for actual compliance.
Section 11.305 sets a substantive standard richer than the ASTM baseline. Its stated baseline is ASTM E1527-13 "or any subsequent standards as published" — the QAP text has not been updated to name E1527-21 on its face, even though the federal AAI rule sunset E1527-13 for AAI purposes on February 13, 2024. The "or any subsequent standards" clause almost certainly folds in E1527-21 by reference, but a user reading the regulation literally would order to the wrong edition.
| Added component |
|---|
| A HUD-guideline noise-source proximity statement |
| A copy of the current survey and the current FEMA FIRM panel, with the site boundary superimposed |
| A lead-based-paint / asbestos consideration for any pre-existing improvements or debris |
| A lead-in-drinking-water consideration — mandatory on plumbing for all Rehabilitation Developments |
| A radon assessment |
| An oil/gas/chemical-pipeline and blast-zone identification per HUD guidelines |
| A vapor encroachment screening under ASTM E2600-10, which is not part of a standard Phase I scope at all |
Section 11.305(c) is a softer cure standard than HCD MHP's hard, non-curable ineligibility trigger for toxic waste that cannot be mitigated: if the ESA recommends further study or finds a hazard, the Development Owner must act on the recommendation or provide a plan for abatement or elimination at Application. The functional equivalent of a hard disqualifier lives elsewhere in the QAP, in the Undesirable Site Features catch-all at Section 11.101(a)(2)(E)(xi) — a site deemed unacceptable which cannot be adequately mitigated. Section 11.305(e) lets a HUD-conforming environmental assessment substitute for the ESA on developments with first-lien HUD financing.
Federal All Appropriate Inquiries under 40 CFR Part 312 applies exactly as it does in California — ASTM E1527-21, the one-year overall window, the 180-day component-refresh clock for interviews, lien searches, records reviews, site inspections, and the environmental professional's declaration, and the reliance-letter mechanic for reusing a prior report. Because TDHCA's own ESA clock (12 months, extendable via a six-month bring-down letter) is longer than the federal AAI rule's 180-day component-refresh requirement, an ESA ordered to satisfy the QAP threshold can be AAI-stale well before it is QAP-stale. The update or reliance letter is a recurring budget line here exactly as it is in California.
Federal money constrains the close identically to California: 24 CFR Section 58.22 bars committing HUD or non-HUD funds to a choice-limiting activity — expressly including acquisition of land, closing on loans, signing a contract, or commencing construction — until the environmental Request for Release of Funds is approved, on any deal touching HOME, CDBG, HTF, Section 8, or another Section 58.1(b) program. Section 58.22(d)'s option-agreement exception applies the same way, and "nominal portion of the purchase price" remains undefined in the regulation with no published HUD numeric threshold — a flag for counsel, not a computation, in Texas exactly as in California.
No CEQA, no statewide zoning, and in Houston no zoning at all
Texas has no CEQA-equivalent state law requiring an environmental impact analysis or public comment process for a private multifamily development. Federal NEPA and 24 CFR Part 58 review still apply when HUD funds are in the stack, and TCEQ regulates specific media — water discharge, air permits, waste management — project by project, but there is no general-purpose state impact-review gate a Texas LIHTC deal must clear.
Zoning authority in Texas is a municipal grant, not a general police power. Local Government Code Chapter 211 lets home-rule municipalities zone, and general-law municipalities may zone if they choose. Texas counties have no general zoning authority — Chapter 231 grants it only in narrow, legislatively-named circumstances, such as a specific subchapter for the Padre Island area of Cameron and Willacy Counties. The narrow county-zoning grants themselves were confirmed directly; the broader "counties generally lack zoning power" principle rests on consistent CLE and policy-brief secondary sources rather than a directly quoted constitutional or case-law holding, so treat it as reliable but not independently verified this session.
Houston is the largest city in the United States with no zoning ordinance at all — voters rejected one in 1948, 1962, and 1993. Development inside Houston is instead governed by the city's Chapter 42 subdivision/development code and by private deed restrictions, which reporting estimates cover something like a quarter to nearly half of the city's land area depending on definition and source vintage — a range this guide has not reconciled to one authoritative figure.
This is a live, recurring TDHCA threshold item, not trivia: QAP Section 11.204(10) requires, for every Application, one of four zoning-status letters, including "No Zoning Ordinance in Effect" — a letter from a local government official confirming the site sits in a jurisdiction with no zoning. That letter must be updated annually for no-zoning jurisdictions, versus a six-month shelf life for the other three letter types.
Extraterritorial jurisdiction (ETJ) is a further Texas-specific wrinkle with no California parallel. Local Government Code Chapter 42 lets a municipality require plat and subdivision compliance in a ring around its borders — historically up to five miles for large cities — without having zoning authority there. A parcel can therefore be inside a city's platting jurisdiction and simultaneously outside its zoning jurisdiction. Senate Bill 2038 (88th Legislature, 2023, effective September 1, 2023) added new subchapters to Chapter 42 letting residents in areas under 200 population, or a majority-in-value of landowners, petition or vote to release land from a municipality's ETJ outright.
No Alquist-Priolo or Seismic Hazards Mapping Act equivalent was found in a search of the QAP for fault, seismic, or liquefaction language — Texas is not broadly subject to the kind of mapped active-fault and liquefaction zoning California has. The comparable Texas foundation-cost driver is expansive, shrink-swell clay soil, addressed through ordinary geotechnical practice rather than a statewide regulatory hazard-zone map — a well-known industry fact, not one sourced to a primary geotechnical standard here.
Utilities run on an exclusive franchise territory, not a priority statute
California's Government Code Section 65589.7 creates a priority duty for water and sewer providers to serve affordable housing, without standardizing turnaround time or fee. No Texas equivalent was found — no state statute requires Texas water or sewer utilities to prioritize service to income-restricted housing.
What governs instead is a fundamentally different mechanism: the Certificate of Convenience and Necessity (CCN) system under Texas Water Code Chapter 13 and 16 TAC Section 24.225, administered by the Public Utility Commission of Texas. A CCN grants one retail public utility the exclusive right to serve a defined geographic territory; a utility generally may not provide retail water or sewer service without first holding a CCN for that area.
The due-diligence question is therefore not "will the utility prioritize us," it is which CCN holder has the exclusive legal right to serve this specific tract, whether that holder has built capacity nearby, and — if the parcel sits in a CCN gap or under a different holder's certificate — whether closing the deal requires a CCN amendment or decertification proceeding at the Public Utility Commission: a state administrative-law process with its own timeline, not a request letter. A live, authoritative, statewide CCN GIS endpoint was not confirmed this session — treat CCN-boundary lookup as an open item to verify against the Commission's own resources rather than a solved data feed.
Hazards, occupants, and the ag-land rollback tax nobody sees until closing
Texas's functional counterpart to California's SB 35/AB 2011 exclusion list is not a separate statute — it is written directly into QAP Section 11.101(a)(2)–(3) as Undesirable Site Features and Neighborhood Risk Factors, and it is harsher than California's framing in one specific way: an undisclosed qualifying feature discovered by staff terminates a Competitive HTC Application outright. It is not a curable deficiency the way a mitigated exclusion is.
| Feature | Buffer | Notes |
|---|---|---|
| Junkyard (Texas Transportation Code Section 396.001 definition) | 300 ft | |
| Active solid-waste facility, sanitary landfill, waste transfer station, illegal dump | 300 ft | |
| Sexually-oriented business (Local Government Code Section 243.002 definition) | 300 ft | |
| Active railroad tracks | 500 ft | Cured by a Railroad Quiet Zone, a HUD-standard noise mitigation commitment, or the line being commuter/light rail |
| Heavy industry (extensive land/machinery use, high external noise, fuel storage) | 500 ft | Gas stations expressly excluded from the definition |
| Nuclear plant | 10 miles | |
| Airport accident potential zone / runway clear zone | site-specific | Measured to the building footprint, not the parcel boundary |
| Pipeline carrying highly volatile liquids, on/off-site or adjacent easement | site-specific | Requires a PIPA-conforming mitigation plan |
| Refinery capable of more than 100,000 barrels/day | 2 miles | |
| Military installation Clear Zone / Accident Potential Zone / 65 dB+ noise contour | site-specific | 65–70 dB curable via a HUD-standard noise assessment and mitigation commitment |
Neighborhood Risk Factors, under Section 11.101(a)(3)(D), are socioeconomic rather than physical, and one names a specific commercial data vendor inside the regulation itself: a census tract poverty rate above 40% (55% in TDHCA Regions 11 and 13); for new construction or reconstruction in an urban area, a Part I violent crime rate above 18 per 1,000 persons "as reported on neighborhoodscout.com"; and a Development Site in the attendance zone of a school rated "Not Rated: Senate Bill 1365" by the Texas Education Agency for 2022 — the 2026 QAP text still names 2022 as the reference year, and whether that is a deliberate freeze or stale carried-forward text is unclear, so confirm the current reference year each cycle rather than assuming it. All three factors are curable with documented mitigation, matching the same clear/conditional/hard-exclusion structure the California brief recommends.
Occupied sites pull into relocation obligations through a narrower route than California's. Federal URA (42 U.S.C. Section 4601 et seq., 49 CFR Part 24) applies identically whenever HUD or other federal funds are in the deal — no difference from California. But Texas has no broad, freestanding state relocation statute analogous to California's Relocation Assistance Act. What it has instead is a QAP-embedded hook: for any occupied Development Site, Section 11.204(9)(G) requires, under Government Code Section 2306.6705(6), a tenant-notification narrative and a relocation plan with an identified funding source, and — if Direct Loan funds are requested — full URA and Section 104(d) compliance, on pain of Direct Loan ineligibility. A relocation plan is therefore required for essentially every occupied-site Texas application regardless of federal funding, even though it flows from a single Government Code cross-reference inside the QAP rather than a comprehensive standalone relocation-benefits statute.
A parcel carrying an open-space, agricultural-use, or timberland special valuation under Tax Code Chapter 23 triggers a rollback tax on change of use — the chief appraiser assesses the difference between taxes actually paid and what would have been owed at market value, plus interest, for a fixed look-back period. House Bill 1743 (86th Legislature, effective September 1, 2019) reduced this from a five-year lookback at 7% annual interest to a three-year lookback at 5% annual interest. This is a real, common, entirely foreseeable acquisition-budget line item for exurban and rural Texas sites with no equivalent in the California brief: does this parcel currently carry an ag/open-space/timber valuation, and what is the current three-year rollback exposure at the county appraisal district's certified market value.
Parcel records themselves sit with a Central Appraisal District (CAD) — one per county, 254 in total, each a political subdivision of the state under Tax Code Section 6.01. Owner-of-record data here is far more open than California's current over-compliance posture: Tax Code Section 25.025 confidentially protects only a narrow, named, opt-in list of occupations — peace officers and their families, county jailers, TDCJ employees, commissioned security officers, and judges — and outside that list, a CAD's appraisal roll, including owner name and mailing address, is standard public information, searchable free on essentially every county's own CAD website.
Where this goes wrong
- The earnest money contract expires under the TBRB lottery's fixed December 1 / March 1 calendar dates (34 TAC Section 190.3(b)(13)) — a purely calendar-driven failure with no analog on a 9% deal.
- Site control lapses before both the TDHCA inducement-resolution board meeting and the subsequent TBRB submission on a bond deal (10 TAC Section 12.5(3)) — two separate gates, and missing either one kills the reservation.
- The Development Cost Schedule's acquisition-cost line item doesn't match the amount stated in the Site Control document (QAP Section 11.302(d)(1)(A)) — Texas has no appraisal-date-window trap the way California does, but it has this data-consistency failure instead, and TDHCA underwriters catch it by hand today.
- The ESA is fresh enough for the QAP's 12-month/6-month-bring-down clock but stale under the separate federal All Appropriate Inquiries 180-day component-refresh clock, discovered only when a lender's counsel checks AAI compliance separately.
- The QAP's own baseline text — ASTM E1527-13 "or any subsequent standards" — is read literally, and a Phase I is ordered to the wrong edition for federal AAI purposes, which requires E1527-21.
- An Undesirable Site Feature or Neighborhood Risk Factor is discovered, or simply not disclosed, after Application submission (QAP Section 11.101(a)(2)–(3)) — an undisclosed one is an automatic termination for a Competitive HTC Application, not a curable deficiency.
- A no-zoning-ordinance letter is submitted stale because the team assumed the same six-month shelf life that applies to a zoning-in-effect letter — no-zoning letters must be renewed annually under QAP Section 11.204(10).
- A private deed restriction, not a zoning ordinance, bars multifamily use — discovered only by reading recorded instruments in a jurisdiction, often Houston, that has no zoning ordinance to check against in the first place.
- The team assumes "no zoning here" means no land-use approval process at all, missing that the parcel sits inside a city's extraterritorial jurisdiction and is still subject to plat and subdivision compliance under Local Government Code Chapter 42.
- A rollback tax on an agricultural or open-space valuation surfaces at closing (Tax Code Section 23.55(a)) — three years of deferred tax plus 5% annual interest, discovered late because it lives in the county appraisal district's valuation history, not in a title exception.
- The parcel sits outside a CCN holder's built infrastructure, and the deal team discovers only at this point that a Public Utility Commission certificate amendment or decertification proceeding — a state administrative process with its own timeline — is a precondition to water or sewer service, not a request letter.
- An occupied structure triggers the QAP's Government Code Section 2306.6705(6) relocation-plan requirement, which the team assumed didn't apply because no federal funds were in the capital stack — the QAP-level trigger is broader than the federal URA trigger alone.
- A Schedule B / recorded-instrument exception, or an identity-of-interest relationship with the seller, is discovered late — Texas's identity-of-interest acquisition-cost restrictions under Section 11.302(d)(1)(A)(iii) make this a heavily regulated, late-discoverable trap.
- Land is acquired, or a loan is closed, before HUD environmental clearance where federal money is in the stack, disqualifying the source under 24 CFR Section 58.22(a) — an identical federal trap to California, with no Texas-specific exception.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies