STRATEGIC PRIORITY: Growing
AGENDA DATE: June 25, 2025
COUNCIL DISTRICT(S): 6, 7
DEPARTMENT: Department of Housing and Community Development
EXECUTIVE: Robin Bentley
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SUBJECT
Title
Authorize the (1) sale of up to five Land Bank Program lots from the Dallas Housing Acquisition and Development Corporation to Murai Homes, LLC, and/or its affiliates (Developer) subject to restrictive covenants, a right of reverter, and execution of all necessary documents, pursuant to the City’s Land Bank Program; and (2) execution of a developmental agreement with Developer for the construction of up to five single family homes on the Land Bank Program lots - Financing: No cost consideration to the City (see Fiscal Information)
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BACKGROUND
On January 28, 2004, the City Council designated the Dallas Housing Acquisition and Development Corporation (DHADC) as its Land Bank for the purpose of acquiring, holding and transferring unimproved real property. The objective of the Land Bank Program is to: (1) reclaim vacant real property from tax delinquency status; and (2) use such property to develop affordable housing for low-income households or for commercial purposes. The resale of such property will enable the development of new single-family homeownership or rental units to serve low-income households or the development of commercial uses that stabilize distressed communities. This Program is implemented via a statutorily authorized tax foreclosure process for properties with five or more years of delinquent property taxes. In order to achieve the public purpose of creating affordable housing for low-income households, all residential properties sold by DHADC will be deed restricted to require the development and sale, rental, or lease-purchase to low-income households, meaning households with a gross income of not greater than 115.00% of the Area Median Income (AMI). Properties intended for commercial use that are acquired and resold by DHADC need only serve the public purpose of economic development.
The developer being considered for the sale of five lots is Murai Homes, LLC, and/or its affiliates (Developer). In February of 2023, a qualified participating developer, Developer, submitted an application (Proposal) to purchase five Land Bank Program lots. The Department of Housing and Community Development (Housing) evaluated the application pursuant to the standards set forth in the Land Bank Program guidelines, which included determining whether the Developer met the eligibility standards to be deemed a “Qualified Participating Developer” and underwriting the Proposal. The application was determined to be “complete” and met the minimum score to be eligible. Housing collaborated with the Developer regarding the terms of sale of the vacant lots as well as the terms related to the construction and subsequent sale of single-family housing units to income eligible homebuyers.
The Developer is a domestic liability company formed in Texas in 2018 and based in Grapevine. The Managing Partner of the Developer is Mustafa Jawaldwala. He has more than six years of homebuilding experience and has built 14 homes in the Land Transfer Program, thereby exceeding the developer criteria set forth in the Land Bank Program. The Developer has provided evidence of cash reserves and lines of credit to complete these five homes.
1. The proposal indicates the construction of five single family units ranging from approximately 1,200 square feet to 1,350 square feet with a minimum of three bedrooms and two baths each. The price range of the proposed units will have a maximum sales price of:
a. 85.00% of the U.S. Department of Housing and Urban Development (HUD) HOME homeownership sales price (HUD Price) for the Dallas, Texas HUD Metro Fair Market Rents Area for the year in which the affordable housing unit is sold for those units targeting homebuyers in the 81.00% - 115.00% AMI range (currently $290,700.00).
b. 75.00% of the HUD Price for the Dallas, Texas HUD Metro Fair Market Rents Area for the year in which the affordable housing unit is sold for those units targeting homebuyers at an AMI of 61.00% - 80.00% (currently $202,500.00).
c. 60.00% of the HUD Price for the Dallas, Texas HUD Metro Fair Market Rents Area for the year in which the affordable housing unit is sold for those units targeting homebuyers at an AMI of 60.00% and below (currently $202,500.00).
2. Two units will target homebuyers in the 81.00% to 115.00% AMI range, two units will target homebuyers in the 61.00% to 80.00% AMI range, and one unit will target a homebuyer in the 60.00% and below AMI range.
The development terms applicable to each lot are as follows:
• Vacant Lot Sales Price: Attached as Exhibit A.
• Single-Family Home Sales Price: The sales price of the home cannot exceed the current HUD HOME homeownership sales price for the Dallas, TX HUD Metro Fair Market Rents Area and must be affordable based on the income of the targeted homebuyer.
• Targeted Income of Homebuyer: 115.00% and below.
• Construction Timeframe: Developer must apply for a construction permit and close on any construction financing within 120 days of purchase from the DHADC. In addition, Developer should complete construction and sale of each affordable housing unit to an income eligible homebuyer within two years of the date of acquisition of the vacant lot utilized for construction of the unit. Developer should complete construction and sale on at least one affordable housing unit to an income eligible homebuyer within seven months of the date of acquisition from the DHADC.
• Restrictive Covenants: Developer must (1) sell each lot to an income eligible household and (2) prior to the sale, must provide Housing staff with written documentation of the income of the proposed purchaser and the sales price. After sale of the home, the property must be occupied as an income eligible household’s principal residence during the entire term of the affordability period.
• Affordability Period: Once the property is sold to an income eligible household, it must be occupied as the household’s principal place of residence for at least five years. If the original purchaser re-sells the property during the affordability period, the property may only be sold to another income eligible household.
• Right of Reverter: Title to the property will revert to the DHADC if Developer does not apply for a construction permit and close on any construction financing within 120 days of purchase from the DHADC or does not complete the construction and sale of the affordable housing unit to an income eligible homebuyer within two years.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Housing and Homelessness Solutions Committee was briefed by memorandum regarding this matter on May 27, 2025. <https://dallascityhall.com/government/citymanager/Documents/Council%20Materials/Upcoming%20Agenda%20Item%20-%20HCD%20Land%20Banks.pdf>
FISCAL INFORMATION
Estimated Revenue: Dallas Housing Acquisition and Development Corporation Operating Fund Account $79,500.00
There will be no fiscal impact to the City of Dallas General Fund. Exhibit A details the estimated revenue the Dallas Housing Acquisition and Development Corporation (DHADC) will receive from the sale of lots in the amount of $79,500.00. For Land Bank properties, the sales price for each lot varies depending on the targeted AMI tier of the property. DHADC will also collect applicable recording fees at closing to ensure all legal documents are properly recorded. No revenue is foregone as non-tax privileged liens are no longer collectible after the date of the foreclosure judgment.
DEVELOPER/EXECUTIVE
Murai Homes, LLC
Mustafa Jawaldwala, Managing Partner
MAP
Attached