Grand Prairie council hears overview of Housing Finance Corporation rules, HB 21 changes and local impacts

Grand Prairie city officials presented an overview of the Grand Prairie Housing Finance Corporation (HFC) and recent state law changes during a council meeting, outlining new limits on where HFCs may own or develop property, added affordability rules for tax exemptions and new reporting and audit requirements.

City Attorney Melissa McGinnis told the council the Texas Local Government Code authorizes cities and counties to create HFCs to “promote the public health, safety and welfare of the citizens” and to finance residential development on behalf of their sponsoring local government. McGinnis said HB 21 made several “significant changes” to HFC law, including geographic limits, an affordability threshold and new transparency obligations.

The changes matter because they directly affect whether HFC-owned properties can be tax exempt and where bonds may be issued, McGinnis said. “The new law limits the areas in which an HFC may own real property for residential development or engage in residential development,” she said, adding that projects outside a sponsoring city’s boundaries now require a separate local-government resolution to proceed.

Under HB 21, HFC developments seeking property-tax abatement must meet an affordability test that includes a 50% affordability threshold and a rent-reduction calculation that shows public savings compared with leaving properties on the tax rolls, McGinnis said. The law also expressly subjects HFCs to the Texas Open Meetings Act and the Public Information Act, requires underwriting assessments and…