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Texas Department of Housing & Community Affairs - Building Homes and Strengthening Communities

Environmental Review and Clearance

All HUD-funded federally-assisted projects are subject to the requirements for environmental review and documentation as outlined in 24 CFR Part 58 (www.ecfr.gov)

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Programs Administered by the Department that Require Environmental Clearance

  • HOME Investment Partnerships
  • Office of Colonia Initiatives (CDBG funds)
  • Emergency Shelter Grant (ESG)
  • Neighborhood Stabilization Program (NSP)

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Mandatory Submission Format

Mandatory Format for Submitting Environmental Review Documents Required for Multifamily Projects (August 2013)

HUD Part 58 Environmental Review always suggested a certain format.  TDHCA now makes this formatting mandatory.  All HUD Part 58 Environmental Review Submissions must follow the prescribed format and document order as explained in the following documents:

Effective August 1, 2013, all environmental review submissions MUST adhere to this format or the Department will reject the submission and return it to the submitter.  This requirement should enable the Department to provide a quicker and more streamlined review for our multifamily partners.

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Vapor Encroachment Screening

Project applicants must screen for vapor encroachment as part of the Phase I ESA following ASTM 2600-10.  If the project applicant did not perform a vapor encroachment screening as part of the original Phase I ESA, the applicant must perform an update to include this additional scope item.

These requirements apply to all projects with HOME funding not yet "closed on" as of August 1, 2013.

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General Environmental Process Timeline for Non-Tiered Construction Projects
(Timeline May Differ Depending on Level of Review)

  • Project Description, Determine Level of Environmental Review, (1 day to 1 week)
  • Contact all appropriate agencies, gather mapping, other information for environmental review, complete checklists utilizing information gathered (60 to 120 days)
  • Publish Required Notification (1 week)
  • Local Comment Period (7 to 18 days)
  • Federal Comment Period (15 days)
  • Authority to Use Grant Funds issued

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Limitations on Activities Prior to Environmental Clearance

Awardees cannot engage in any choice-limiting activities prior to environmental clearance per 24 CFR 58.22. Choice-limiting activities include but are not limited to these examples:

  • Acquisition of land, except through the use of an option agreement, regardless of funding source;
  • Closing on loans including loans for interim financing;
  • Signing a construction contract.

Subrecipients must not sign agreements, close on loans or begin construction on any portion of a project until TDHCA environmentally reviews and clears all portions.

This regulation extends to the use of other funds utilized for the same project regardless of whether those funds are private funds or funds received through another entity and already environmentally cleared through that entity.

Subrecipients that prematurely engage in a choice-limiting activity will not be reimbursed for that activity, and the entire project becomes ineligible for environmental clearance which makes the project ineligible for reimbursement from the funding program.

Choice Limiting Actions - Don't Jeopardize your Project!

A signed Certification is a part of all applications. Signing this certification affirms an awareness of and intention not to take any "choice limiting" actions until environmental clearance from TDHCA is obtained. The consequences to moving forward on a project without environmental clearance are both time and loss of funding.

Does this apply to my project?

If the answer is yes to either of the questions posed below, then you must not take any choice limiting actions prior to environmental clearance or project funds will be placed in jeopardy.

  • Was an application submitted for funding (Tax Credit or other) that includes federal funds (HOME, CDBG, NSP), or
  • Was an award received that includes federal funds (HOME, CDBG, NSP) including federal funds from a locality rather than TDHCA?

What are choice limiting actions?

U.S. Department of Housing and Urban Development regulations provide guidance as follows:

  • Neither a recipient nor any participant in the development process, including public or private nonprofit or for-profit entities, or any of their contractors, may commit HUD assistance before receiving environmental clearance.
  • In addition, neither a recipient nor any participant in the development process may commit non-HUD funds on or undertake an activity or project or limit the choice of reasonable alternatives before receiving environmental clearance..

What does all that mean?

Bottom Line: Participants in TDHCA programs using federal funds cannot take a "choice limiting action" until a Part 58 environmental clearance is received from TDHCA. In addition, the environmental requirements are not met solely by the Phase I ESA nor are they related to the Site and Neighborhood Requirements (this requirement is dealt with within the Multifamily Division).

What are Some Examples of Choice Limiting Actions? (The definition has been expanded)

The following actions are restricted after submission of an application but before environmental clearance occurs. It includes all funding (not just the portion paid by federal funds).

  • Closing on land or signing a lease regardless of price or funding source.
  • Signing contracts for construction or purchasing materials for any portion of project including those items not paid for by federal funds.
  • Transfer or sale of property between any entity within the ownership structure regardless of funding source.

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Environmental Clearance Background

In 1969 the National Environmental Policy Act (NEPA) was enacted by Congress. This regulation required all federal agencies to ensure that their federal dollars did not have an adverse impact on the environment. Through the years since this regulation came to pass, Congress and the various Presidents have also enacted a series of statutes dealing with specific environmental issues. As a result of all this legislation, each Federal agency was charged with creating their own guidelines to meet all the requirements for environmental review. The U.S. Department of Housing and Urban Development (HUD) regulations are outlined in 24 Code of Federal Regulations (CFR) Part 58. All federally-assisted HUD projects are subject to these requirements for environmental review and documentation.

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How Environmental Clearance Affects a Project

No activities, including loan closure, land acquisition, and contracts for construction related to a federally funded project, may occur prior to environmental clearance. Many of the housing programs implemented by the Texas Department of Housing and Community Affairs (Department) are federally funded including the HOME program, CDBG Disaster Program, Neighborhood Stabilization Program, Office of Colonia Initiatives programs, and the Emergency Solutions Grants program. If an awardee obtains funds from any of these programs please note that no activities, including loan closure, land acquisition, and contracts for construction related to a federally funded project, may occur prior to environmental clearance including all activities funded by other sources.

Additionally with the Passage of the American Recovery and Reinvestment Act of 2009 (ARRA), the Environmental Clearance apply to the Tax Credit Assistance Program (TCAP), which is administered by HUD. For information regarding this process, applicable forms, federal rules and guidelines, as well as contact information, visit the Environmental Forms page.

For additional guidance contact the environmental team by e-mail at environmental@tdhca.state.tx.us

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