TX HB1342

Creates new second priority status for qualified residential rental project bond reservations for projects with applications filed on or before October 20 two years prior that were not withdrawn and did not receive a bond reservation, provided they meet certain affordability requirements and have binding construction contracts or significant expenditures exceeding $500,000 or 10% of project cost

Shifts existing priority categories down one level: former second priority becomes third, former third becomes fourth, and former fourth becomes fifth priority

Raises income eligibility thresholds for certain priority project categories from 60% to 80% of area median income for non-deeply-affordable units

Adds "on average" language to rent and income restrictions for projects with 100% affordable units at 60% AMI and projects with 80% or more units at 60% AMI, providing flexibility in unit-level pricing

Removes requirement for issuers of first, second, or third priority projects to submit evidence of low-income housing tax credit approval from TDHCA at bond closing

Takes effect September 1, 2025, with changes applying to state ceiling allocation beginning with the 2026 program year