The bill amends the Finance Code and Local Government Code to establish new regulations for housing finance corporations in Texas. It introduces Section 341.407, which prohibits authorized lenders from making loans to housing finance corporations unless they provide proof of compliance with specific local government code sections. Additionally, it modifies Section 394.031 to define the operational areas of housing finance corporations based on their sponsoring municipalities or counties, and it requires resolutions from local governing bodies for operations outside these areas. The bill also mandates that housing finance corporations submit annual audit reports for compliance with exemption conditions, detailing the audit process and consequences for noncompliance.

Further amendments include clarifying the exemption from taxes and fees for housing finance corporations, which is contingent upon the property being located within authorized operational areas or having approval from relevant governing bodies. The bill specifies that these changes apply only to actions taken after its effective date, with provisions for existing developments. The act will take effect immediately upon receiving a two-thirds vote from both houses or on September 1, 2025, if that threshold is not met.

Statutes affected:
Introduced: Local Government Code 394.031, Local Government Code 394.032, Local Government Code 394.039, Local Government Code 394.9025, Local Government Code 394.903, Local Government Code 394.905 (Local Government Code 394)