Purpose
Senate Bill 1287 requires TDHCA to establish a loan program, working through
certified nonprofit organizations, enabling Owner-Builders (individuals and
families) to purchase real estate, construct a home, or renovate a home; and to
solicit gifts and grants to fund the program.
In 2001, the 77th Legislature amended this program under Senate Bill 322, a
legislative directive that requires the continuation of an Owner-Builder Loan
Program. This program, herein after referred to as the Texas Bootstrap Loan
Program, is designed to promote and enhance homeownership for low, very low, and
extremely low income Texans by providing loan funds to purchase or refinance
real property on which to build new residential housing or improve existing
residential housing throughout Texas.
The new legislation removes the requirement that the Owner-Builder must
reside with two other family members, increases the loan amount to $30,000 per
household, total loan amount from TDHCA and other entities cannot exceed $60,000
per household.
Funding
The Texas Bootstrap Loan Program is required under Subchapter FF, Chapter
2306, Texas Government Code, to make available $3 million for mortgage loans to
very low-income families (60% Area Median Family Income) not to exceed $30,000
per unit. ?This program is a self-help construction program, which is designed
to provide very low-income families an opportunity to help themselves through
the form of sweat equity. ?All participants under this program are required to
provide at least 60 percent of labor that is necessary to construct or
rehabilitate the home. ?All applicable building codes will be adhered to; under
this program. ?In addition, nonprofit organizations can combine these funds
with other sources such as those from private lending institutions, local
governments, or any other sources. ?However, all combined loans can not exceed
$60,000 per unit.
In accordance with Section 2306.753(d) of the Texas Government Code, Title
10, as amended, TDHCA shall set aside at least two-thirds of the available funds
for owner-builders whose property is located in an Economically Distressed Area
Program (EDAP) counties, as defined under Subchapter K, Chapter 17, Water Code.
The remainder of the funding will be available to Department funded Colonia
Self-Help Centers and TDHCA certified non-profit Owner-Builder Housing Programs
in the State of Texas.
The maximum amount of funding per organization will be $600,000. TDHCA may,
at its discretion, award funds above the maximum award limit to an organization
that has demonstrated successful implementation of this initiative. Projects
needing additional non-departmental resources will be required to provide
additional documentation identifying the source(s) of these additional funds and
provide information about their rates and terms.
For FY 2005, $3 million will be provided from the Housing Trust Fund.
Compliance with Housing Trust Fund rules and regulations is also required.
Eligible Applicants
Colonia Sef-Help Centers and Non-profit organization (501 (c) (3).
Program Activities
All of the eligible activities under this program require that an
owner-builder (the borrower) provide at least 60% of the labor necessary to
build the proposed housing or provide an amount of labor equivalent to the
amount required to build the proposed housing by working through a
state-certified owner-builder program. Eligible activities include: (1) Purchase
or refinance real property on which to build new residential housing or (2)
improve existing residential housing.
