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Presentation and Discussion of Texas Housing Trust Fund (Texas HTF).
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BACKGROUND
The Texas Legislature established the Housing Trust Fund in 1993 to provide state general revenue for affordable housing activities. The program receives state appropriations, which include loan repayments from previous Texas HTF projects, to fund the Texas HTF. The Department awards funding in the form of grants and/or loans to nonprofits, units of local government, councils of government, local mental health authorities, other public agencies, and public housing agencies to serve low-income households. State statute does not direct the specific activities that are to be implemented but requires the publication of a biennial plan that details how the Department will program and expend the funds. Over the years, the Department implemented a diversity of programs with Texas HTF resources to varying success. The Texas HTF has now evolved to focus on two successful primary programs: the Texas Bootstrap Loan Program, which satisfies the statutory requirement to operate an owner-builder loan program, and the Amy Young Barrier Removal Program.
Texas Bootstrap Loan Program (Bootstrap)
• Bootstrap is funded by a portion of the Texas HTF, including new allocations of state revenue and proceeds from prior Bootstrap loans. A minimum of $3 million per year must be made available for Bootstrap per TDHCA’s governing statute.
• Bootstrap is administered through subrecipients that provide self-help housing utilizing a reservation system. The majority of Bootstrap administrators are Habitat for Humanity affiliates.
• Bootstrap provides repayable loans of up to $45,000 to low-income households. The funds may be utilized for construction loans or permanent financing to purchase and construct new housing or rehabilitate existing housing. The loans are provided at 0% interest, and the household must contribute at least 65% of the labor required for construction.
• Two-thirds of Bootstrap funds must be programmed to census tracts where the median household income is less than or equal to 75% of the median state household income.
• Further priority is granted to households whose income is less than $17,500 per year, or if the property is located in an area where Capitol Recovery Fees, building permit fees, or other fees related to the home to be built are waived.
• Households must be at or below 80% AMFI for the county in which they reside, or the state median, whichever is greater.
Amy Young Barrier Removal Program (AYBR)
• AYBR is funded by the remainder of the Texas HTF, including excess non-Bootstrap proceeds paid into the Texas HTF and new allocations of state revenue. The allocation is about $1.6 million per year.
• AYBR is administered through subrecipients and provides grants of up to $22,500 per household for accessibility modifications for both tenant and owner-occupied properties. Up to 25% of the $22,500 may be utilized for repairs to mitigate life-threatening hazards in owner-occupied housing.
• Funds are regionally allocated.
• At least one household member must be a person with a disability.
• Funds may not be utilized for general repairs unless they present an immediate threat to life, health, and safety; these repairs may not make up more than 25% of the total project budget.
• If the home is a rental, the owner must agree to tenant’s participation.
• Households must be at or below 80% AMFI for the county in which they reside, or the state median, whichever is greater.
Texas Housing Trust Fund Funding and Allocation
Funds may be awarded through a reservation system agreement via periodic NOFA announcements. A reservation system allows eligible subrecipients to access a pool of funding and reserve a portion of the pool for activities for individual households as the need arises. A reservation system agreement does not go before the Board as it does not award a specified amount of funds, but merely authorizes the potential to access funds. The reservation system allows for funds to be utilized for the activities with the highest demand. The Texas HTF Plan was approved by the Board on September 4, 2025, and includes the following programming plan for the fund.
2026-2027 HTF Biennial Allocation
|
Use of Funds |
SFY 2026 |
SFY 2027 |
Amount |
|
Total Biennial Appropriation |
$5,028,454 |
$5,030,221 |
$10,058,675 |
|
Programming Plan |
|
Texas Bootstrap Loan Program Appropriation |
$3,300,480 |
$3,300,480 |
$6,600,960 |
|
Department Administration |
($330,048) |
($330,048) |
($660,096) |
|
Funds for Programming |
($2,970,432) |
($2,970,432) |
($5,940,864) |
|
Remaining Balance |
$0 |
$0 |
$0 |
|
Amy Young Barrier Removal Program Appropriation |
$1,727,974 |
$1,729,741 |
$3,457,715 |
|
Department Administration |
($172,797) |
($172,974) |
($345,771) |
|
Funds for Programming |
($1,555,177) |
($1,556,767) |
($3,111,944) |
|
Remaining Balance |
$0 |
$0 |
$0 |
Texas Housing Trust Fund Impact
The Department considers home ownership fundamentally important in supporting Texans. This is confirmed when evaluating the programmatic impact of the Texas HTF Bootstrap Program. Since its inception, 232 Texas families transitioned out of tenancy into home ownership. A majority of these Texans now pay a lower mortgage than their previous rental payments. Homeownership provides these families, many of whom live in very low-income communities, who would likely be unable to attain a traditional mortgage, with equity and stability. The Division considers this positive generational impact on participating households as a critical accomplishment of the program.
Some highlights of the program are as follows.
• ~$12,497,520 in program funds utilized
• ~$10,000,000 of the funds utilized came from principal repayment
• There have been 0 foreclosures since 2020 and less than a 0.01% foreclosure/charged off rate since 2010 (6 out of 1180 loans)
The impact of the Amy Young Barrier Removal Program is concentrated on homeowners as well. 98% of all AYBR participants own their home. The majority of participants are aged 60-93, which reflects that the program supports a vulnerable aging population, prone to higher needs of accessibility. Furthermore, these participants reside in some of the most disadvantaged areas, earning an average of 34% of the state’s median family income, as measured in the last five years. During this time, the AYBR served 421 households. These households are ones that require the most assistance with incomes that are not keeping pace with inflation. While limited by the scope of funds each year, this program does not lack demand. Funds are fully depleted after each funding cycle, and these funds are critical to helping the growing aging population in Texas age in place.