TX HB2985

Expands the definition of "at-risk development" for low income housing tax credits to include properties receiving assistance under two additional HUD Section 8 programs: the Housing Assistance Payments Program for New Construction (24 C.F.R. Part 880) and the Housing Assistance Payments Program for Substantial Rehabilitation (24 C.F.R. Part 881)

Clarifies that developments qualify as at-risk regardless of whether they propose new construction, rehabilitation, or reconstruction at the same location as the original development site

Allows developments that construct or reconstruct housing at a different location than the original site to still qualify as at-risk if they either earn points on the opportunity index under department rules or receive support via resolution from the local municipality or county governing body

Applies only to low income housing tax credit applications submitted under the 2026 qualified allocation plan or subsequent plans adopted by the Texas Department of Housing and Community Affairs

Takes effect September 1, 2025