Source: The Real Deal, “Austin apartment loan flagged for special servicing in fallout from HB 21” by Jess Hardin (September 24, 2025) Read the full article here.
A recent report from The Real Deal highlights one of the first major financial ripple effects of Texas’ new housing finance corporation law, HB 21. The $60 million CMBS loan tied to Langdon at Walnut Park in Austin was transferred to special servicing after the property lost its affordable housing tax exemption—an exemption the borrower had relied on when underwriting the deal.
According to the report, Langdon Street Capital agreed to reduce its loan principal if the exemption was not granted by August 29 but failed to do so after the exemption was denied. The property, valued at $90.1 million with the exemption, fell to $67.1 million without it.
The case illustrates how some appraisal districts are interpreting HB 21 as providing authority to deny or revoke exemptions for developments that previously used the “traveling” housing finance corporation structure. These deals often paired apartment owners with distant HFCs to obtain property tax exemptions without local municipal approval.
HB 21, authored by Rep. Gary Gates (R-Richmond), now requires that HFC partnerships occur within the same jurisdiction and include additional affordability standards. Although the law gives existing deals until 2027 to comply, appraisal districts appear to be acting sooner, denying exemptions for 2025 and 2026 in several counties.
A related lawsuit filed by the Texas Workforce Housing Commission and the Willowbend Apartments ground-lease tenant in San Antonio argues that these early denials place current exemptions “in jeopardy.” The outcome of that case could determine whether appraisal districts have the authority to enforce HB 21 before its compliance period begins.
When asked about the trend, Rep. Gates said:
“I could see where an appraisal district would take the position: we think your deal is a scam, and we’re not going to give a tax exemption until you have a court determine that it’s a valid HFC. I think they have every right to deny it.”