By Farrar H.B. No. 421
75R1569 KKA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to financial assistance for very low income first-time
1-3 home buyers funded through the imposition of a fee on certain real
1-4 estate transactions.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Chapter 5, Property Code, is amended by adding
1-7 Subchapter Z to read as follows:
1-8 SUBCHAPTER Z. MISCELLANEOUS PROVISIONS RELATING TO CONVEYANCES
1-9 Sec. 5.901. HOME OWNERSHIP ASSISTANCE FEE. (a) This
1-10 section applies to a conveyance of real property by sale for a
1-11 purchase price of $80,000 or more.
1-12 (b) A title company or other closing agent shall collect at
1-13 the closing of the purchase of property subject to this section a
1-14 fee of $10.
1-15 (c) A fee collected under this section shall be deposited in
1-16 the housing trust fund in accordance with Section 2306.2021,
1-17 Government Code.
1-18 SECTION 2. Section 2306.201(b), Government Code, is amended
1-19 to read as follows:
1-20 (b) The fund consists of:
1-21 (1) appropriations or transfers made to the fund;
1-22 (2) unencumbered fund balances; [and]
1-23 (3) money deposited under Section 5.901, Property
1-24 Code; and
2-1 (4) public or private gifts or grants.
2-2 SECTION 3. Section 2306.202(b), Government Code, is amended
2-3 to read as follows:
2-4 (b) Use of the fund is limited to providing:
2-5 (1) assistance for individuals and families of low and
2-6 very low income, including assistance provided under Section
2-7 2306.2021; and
2-8 (2) technical assistance and capacity building to
2-9 nonprofit organizations engaged in developing housing for
2-10 individuals and families of low and very low income.
2-11 SECTION 4. Subchapter I, Chapter 2306, Government Code, is
2-12 amended by adding Section 2306.2021 to read as follows:
2-13 Sec. 2306.2021. DOWN PAYMENT AND CLOSING COSTS ASSISTANCE.
2-14 (a) The department, through the housing finance division, shall
2-15 use money deposited in the housing trust fund under Section 5.901,
2-16 Property Code, to make grants to individuals and families of very
2-17 low income for the payment of down payment and closing costs
2-18 associated with the purchase of a home in this state. The
2-19 department may use a portion of the money to pay the costs of
2-20 administering the grants.
2-21 (b) The department may not:
2-22 (1) make a grant to a person who has previously owned
2-23 a home; or
2-24 (2) make a grant in excess of $10,000 to a single
2-25 individual or family.
2-26 (c) If a person sells the home purchased with the assistance
2-27 of a grant before the fifth anniversary of the purchase date, the
3-1 person shall reimburse the department the following amount to be
3-2 deposited in the housing trust fund for use in accordance with this
3-3 section:
3-4 Time elapsed since date of purchase % of grant to be reimbursed
3-5 Less than one year 100
3-6 One year or longer, but less than
3-7 two years 80
3-8 Two years or longer, but less than
3-9 three years 60
3-10 Three years or longer, but less than
3-11 four years 40
3-12 Four years or longer, but less than
3-13 five years 20
3-14 (d) The department has a lien against a home purchased with
3-15 the assistance of a grant made under this section. The grant
3-16 constitutes part of the purchase money used to acquire the home for
3-17 purposes of any provision in the Texas Constitution relating to
3-18 homestead property. The amount of the lien corresponds to the
3-19 amount required to be reimbursed to the department under the
3-20 schedule set out in Subsection (c). The lien expires on the fifth
3-21 anniversary of the purchase date of the home. Any money received
3-22 by the department arising from a lien under this section shall be
3-23 deposited in the housing trust fund for use in accordance with this
3-24 section.
3-25 (e) The department shall file a written notice of a lien
3-26 created under Subsection (d) in recordable form in the office of
3-27 the county clerk of the county in which the home is located. The
4-1 notice must contain a legal description of the home.
4-2 (f) The department:
4-3 (1) shall file a notice releasing a lien created under
4-4 Subsection (d) with the county clerk of the county in which the
4-5 lien notice was filed not later than the 30th day after the earlier
4-6 of:
4-7 (A) the fifth anniversary of the purchase date
4-8 of the home secured by the lien; or
4-9 (B) the date on which the amount required to be
4-10 paid under Subsection (c) is received by the department; and
4-11 (2) may file a notice releasing the lien before the
4-12 fifth anniversary of the purchase date of the home secured by the
4-13 lien without receiving the amount required to be paid under
4-14 Subsection (c) if the department determines that:
4-15 (A) the proposed transfer of the home secured by
4-16 the lien is reasonable; and
4-17 (B) money is unavailable to pay the lien.
4-18 (g) The board shall adopt rules governing the administration
4-19 of grants as provided by Section 2306.203. The board may determine
4-20 that a rule specifically required by Section 2306.203 is
4-21 inappropriate and inapplicable to the administration of grants
4-22 under this section.
4-23 (h) In this section, "home" means real property and
4-24 improvements on that property consisting of not more than four
4-25 dwelling units, including a condominium unit, in which a person
4-26 intends to reside as the person's principal residence.
4-27 SECTION 5. This Act takes effect January 1, 1998, but only
5-1 if the constitutional amendment proposed by the 75th Legislature,
5-2 Regular Session, 1997, authorizing the state to provide grants to
5-3 assist persons of low or very low income in purchasing homes is
5-4 approved by the voters. If that amendment is not approved by the
5-5 voters, this Act has no effect.
5-6 SECTION 6. The importance of this legislation and the
5-7 crowded condition of the calendars in both houses create an
5-8 emergency and an imperative public necessity that the
5-9 constitutional rule requiring bills to be read on three several
5-10 days in each house be suspended, and this rule is hereby suspended.