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Presentation, discussion, and possible action on an order proposing the repeal of 10 TAC Chapter 24, Texas Bootstrap Loan Program Rule, and an order proposing new 10 TAC Chapter 24, Texas Bootstrap Loan Program Rule, and directing their publication for public comment in the Texas Register
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RECOMMENDED ACTION
recommendation
WHEREAS, pursuant to Tex. Gov’t Code §2306.053, the Texas Department of Housing and Community Affairs (the Department) is authorized to adopt rules governing the administration of the Department and its programs; and
WHEREAS, pursuant to Tex. Gov't Code §2306.752, the Department is required to establish, operate, monitor, and fund an Owner-Builder Loan Program to enable Owner- Builders to purchase or refinance real property on which to build new residential housing or improve existing residential housing, and the Texas Bootstrap Loan Program fulfills this statutory requirement;
WHEREAS, the proposed new 10 TAC Chapter 24, Texas Bootstrap Loan Program Rule, further clarifies program administration and Administrator certification requirements, updates terminology and housing counseling requirements, and defines income calculation requirements; and
WHEREAS, upon Board approval, the proposed new rule will be submitted to the Texas Register to be published for public comment, which will be accepted December 22, 2023 to January 22, 2024.
NOW, therefore, it is hereby
RESOLVED, that the Executive Director and his designees, be and each of them hereby are authorized, empowered and directed, for and on behalf of the Department to cause the proposed repeal of 10 TAC Chapter 24 and proposed new 10 TAC Chapter 24, regarding the Texas Bootstrap Loan Program, in the form presented to this meeting, to be published in the Texas Register for public comment and in connection therewith, make such non-substantive technical corrections as they may deem necessary to effectuate the foregoing, including the preparation of the subchapter specific preambles.
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BACKGROUND
The purpose of repealing 10 TAC Chapter 24, Texas Bootstrap Loan Program Rule and proposing a new 10 TAC Chapter 24, is to update and clarify administrative requirements, refine the Administrator certification process, and update housing counseling requirements. Changes are proposed for several sections in the Chapter; therefore, the Department proposes repeal and replacement instead of amending the existing chapter, which also allows for public comment on all sections of the proposed new rule. Staff has summarized the significant changes proposed to the Texas Bootstrap Loan Program Rule below. A blackline version with all changes is attached and will be available on the Department’s website during the public comment period.
The Department held a virtual roundtable discussion on November 10, 2023, regarding the Texas Bootstrap Loan Program Rule and other single family rules being presented under separate items at this meeting. Comments and suggestions received from the roundtable discussions were taken into consideration during the preparation of the proposed Texas Bootstrap Loan Program Rule as presented at this meeting.
The blackline proposed rule is attached to indicate to the Board and the public what is being changed. The significant updates proposed to 10 TAC Chapter 24 are:
• Definitions
o Loan Commitment replaces Applicant Eligibility Letter.
o Reservation Agreement replaces Loan Agreement.
• Program Administration
o Administrator certification for loan servicing agreement expires yearly and must be renewed annually by submission of a Recertification Application provided by the Loan Servicing section of TDHCA.
• Owner-Builder Qualifications
o For eligibility determination of a Household, two months proof of annual income is required. Annual income is defined at 24 CFR §5.619 using guidelines in most recent HUD 4350 Handbook.
• Administrator Certification
o Administrators must submit a new Application every three years to be issued a Reservation Agreement, which confirms their certification.
o Application would require submission of a plan for provision of HUD approved housing counseling for all Owner-Builders.