(a) Pursuant to Tex. Gov't Code §2306.754(b),
the Department shall not exceed $45,000 in household assistance for
any Texas Bootstrap Loan Program loan. If it is not possible for an
Owner-Builder to purchase necessary real property and build or rehabilitate
adequate housing for $45,000, the Owner-Builder must obtain the additional
amounts necessary from other sources, which may include other types
of Department funds, excluding Texas HTF.
(b) The Department shall make loans for Owner-Builder
Applicants to enable them to:
(1) Build new residential housing, including the purchase
or refinance of real property, if needed, on which to undertake such
Activity; or
(2) Improve existing residential housing, including
the purchase or refinance of real property, if needed, on which to
undertake such Activity.
(c) Upon approval by the Department, the Administrator
shall enter into, execute, and deliver to the Department the Reservation
Agreement. The Department may terminate the Reservation Agreement
in whole or in part if the Administrator has not performed as outlined
in the Program Rule, NOFA, Reservation Agreement, or Program Manual.
(d) If the Owner-Builder Applicant qualifies for the
Program, the Department will issue a Loan Commitment which reserves
up to $45,000 in funds for 12 months from the date of the Loan Commitment.
The Owner-Builder Applicant will not be required to re-qualify if
the Owner-Builder Applicant closes by the expiration date on the Loan
Commitment. If an Owner-Builder Applicant does not close by the expiration
date, the Owner-Builder Applicant must re-qualify for the Program;
however, the Department may grant an extension of up to 180 days from
the expiration date on the original Loan Commitment. If the Owner-Builder
Applicant fails to close on the loan after the extension is granted
the Reservation or loan will be cancelled.
(e) Roles and responsibilities for administering the
Program Contract. Administrators are required to:
(1) Qualify potential Owner-Builders for loans;
(2) Provide Owner-Builder homeownership education classes
and ensure provision of HUD-certified housing counseling;
(3) Supervise and assist Owner-Builders to build or
Rehabilitate housing;
(4) Facilitate loans made or purchased by the Department
under the Program; and
(5) Implement and administer the Program on behalf
of the Department.
(f) Loan Servicing Agreement. Administrators may service
Program loans originated on behalf of the Department. Administrators
servicing Program loans on behalf of the Department must obtain prior
approval and enter into a loan servicing agreement with the Department.
Administrator certification for a loan servicing agreement expires
annually, after which an Administrator in good standing with the Department
may apply for recertification of the loan servicing agreement utilizing
the recertification application provided by the Department's Loan
Servicing section. Loan servicing agreements may be reevaluated from
time to time and may be terminated at the discretion of the Department.
(g) First Year Consultation Agreement. If the Department
notifies the Administrator that an Owner-Builder has failed to make
a scheduled payment due under the Program loan, or other payments
due under the Program loan documents, within the first 12 months of
funding, the Administrator must meet with the Owner-Builder and provide
counseling to assist in bringing the payments current. After such
consultation and in the event that the Department and Administrator
are not able to bring the Program loan current, the Department in
accordance with its administrative rules, may apply appropriate graduated
sanctions leading up to, but not limited to, deobligation of funds
and future debarment from participation in the Program.
(h) Administrative Fee. The Administrator will be granted
a 10% administrative fee upon completion of the house and funding
of each Mortgage Loan.
(i) Construction Plans. If the activity is New Construction
or reconstruction, Administrator must submit a legible copy of the
proposed construction plans for approval by the Department prior to
the Administrator accepting applications for Owner-Builder Applicants.
(j) Work Write-up. If Administrator's activity is Rehabilitation,
Administrator must adhere to TMCS and submit work write-ups and cost
estimates for Department approval prior to construction.
(k) Loan Program Requirements. The Department may purchase
or originate loans that conform to the lending parameters and the
specific loan Program requirements as described in paragraphs (1)
- (6) of this subsection:
(1) Minimum loan amount is $1,000;
(2) Loan term may not exceed 30 years;
(3) Loan term may not be less than five years;
(4) Loan must be at zero percent (0%) interest for
the entire loan term;
(5) When refinancing a Contract for Deed, the Department
will not disburse any portion of the Department's loan until the Owner-Builder
receives a deed to the property; and
(6) Owner-Builder must have resided in Texas for the
preceding six months prior to the date of loan application.
(l) Loan Assumption. A Program loan is assumable if
the Department determines that the Owner-Builder Applicant complies
with all Program requirements in effect at the time of the assumption.
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