|(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
(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 Loan
Origination Agreement. The Department may terminate the Loan Origination
Agreement in whole or in part if the Administrator has not performed
as outlined in the Program Rule, NOFA, Loan Origination Agreement,
or Program Manual.
(d) If the Owner-Builder Applicant qualifies for the
Program, the Department will issue an Applicant eligibility letter
which reserves up to $45,000 in funds for 12 months from the date
of the Applicant eligibility letter. The Owner-Builder Applicant will
not be required to re-qualify if the Owner-Builder Applicant closes
by the expiration date on the Applicant eligibility letter. 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 Applicant eligibility letter. 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;
(3) Supervise and assist Owner-Builders to build or
(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.
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.