Relating to the allocation of low income housing tax credits.
Summary
SB 898 amends the Texas Government Code provisions governing the Texas Department of Housing and Community Affairs’ allocation of low income housing tax credits. The bill changes the cap on credits that may be awarded in a single application round, raising the maximum amount for an individual development from $2 million to $3 million, while retaining the existing $6 million cap for an applicant in a single application round. It also keeps the requirement that the board not allocate credits in any unnecessary amount, consistent with the department’s underwriting policy and federal law.
The bill applies prospectively only to applications submitted during an application cycle based on the 2026 qualified allocation plan or a later plan. Applications under earlier plans remain governed by prior law. The act takes effect September 1, 2025.
Impact
SB 898 directly amends Section 2306.6711(b), Government Code, which governs how the state housing agency issues commitments for low income housing tax credits. Its practical effect is to allow larger credit awards to individual developments, potentially increasing the size or financial feasibility of affordable housing projects, while preserving the overall per-applicant cap and the agency’s discretion to avoid unnecessary allocations. The bill affects developers, housing finance applicants, and the Texas Department of Housing and Community Affairs, and it will apply only to future application cycles tied to the 2026 qualified allocation plan or later.
Sentiment
The available legislative history suggests the bill moved forward without recorded opposition in the provided vote data, and there are no committee transcript excerpts indicating controversy. The measure appears to have been treated as a technical policy adjustment to the state’s low income housing tax credit allocation framework. Its progression to the House General State Calendar indicates it received sufficient support to advance through the process.
Contention
The main substantive issue is the increase in the maximum credit amount for an individual development from $2 million to $3 million. Supporters would likely view this as a way to better match project costs and improve affordability financing, while any concerns would center on whether larger awards reduce the number of projects that can be funded overall or concentrate credits in fewer developments. The bill also preserves agency underwriting discretion and federal-law limits, which may reduce contention by keeping the allocation process constrained.
Relating to a set-aside of low income housing tax credits for at-risk housing developments and to the allocation of housing tax credits to those developments and certain other developments.