| (a) Texas Bootstrap Loan Program funds may be used
to finance affordable housing and promote homeownership through acquisition,
New Construction, or Rehabilitation of single family residential housing.
Administrators may reserve funds by submitting a loan application
on behalf of an Owner-Builder Applicant for the Texas Bootstrap Loan
Program.
(b) Manufactured Housing Units are not eligible housing
types for the Texas Bootstrap Loan Program.
(c) All Bootstrap Program Loans will be evidenced by
a promissory note and will be secured by a lien on the subject property.
The following Activities are permitted by the Department under the
Program:
(1) Purchase Money Loans. All Program funds are used
to finance the purchase of a single-family dwelling unit and/or a
piece of real property. The Department makes a loan to the Owner-Builder
and the Owner-Builder's repayment obligation begins immediately. In
certain situations, eligible closing costs may be financed by the
loan proceeds;
(2) Residential Construction Loans. This transaction
is treated as a purchase money loan and is a one-time closing with
the Owner-Builder. Construction period may be up to 12 months;
(3) Interim Construction (Closing with Administrator)
Loans. Interim construction is a commercial transaction between the
Administrator and the Department that is with respect to a specific
Owner-Builder. The construction period may be up to 12 months. Once
the construction of the home is completed, the closing with the Owner-Builder
will take place as a purchase money loan; and
(4) Purchase of Mortgage Loans. The Department may
purchase and take assignments from Mortgage lenders of notes and other
obligations evidencing loans or interest in loans for purchase money
transactions as described in paragraph (1) of this subsection or for
residential construction transactions as described in paragraph (2)
of this subsection.
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