SRC-JXG S.B. 1287 76(R)BILL ANALYSIS Senate Research CenterS.B. 1287 By: Lucio Border Affairs - Special 7/12/1999 Enrolled DIGEST Currently, housing loans are difficult to attain for low-income families. S.B. 1287 will allow the Texas Department of Housing and Community Affairs to provide housing loans to residents of lowincome families. PURPOSE As enrolled, S.B. 1287 sets forth provisions for housing loans for low-income families. RULEMAKING AUTHORITY Rulemaking authority is granted to the Texas Department of Housing and Community Affairs in SECTION 1 (Section 2306.752(b), Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 2306, Government Code, by adding Subchapter FF, as follows: SUBCHAPTER FF. OWNER-BUILDER LOAN PROGRAM Sec. 2306.751. DEFINITION. Defines "owner-builder." Sec. 2306.752. OWNER-BUILDER LOAN PROGRAM. Requires the Texas Department of Housing and Community Affairs (TDHCA), through the colonia self-help centers established under Subchapter Z or a nonprofit organizations certified by TDHCA as a nonprofit owner-builder housing program, to make loans for owner-builders to enable them to purchase or refinance real property on which to build new residential housing, build new residential housing, or improve existing residential housing, to provide for the development of affordable housing in this state. Authorizes TDHCA to adopt rules necessary to accomplish the purposes of this subchapter. Sec. 2306.753. OWNER-BUILDER ELIGIBILITY. Requires TDHCA to establish eligibility requirements for an owner-builder to receive a loan under this subchapter, subject to this section. Requires the eligibility requirements to establish a priority for loans made under this subchapter to owner-builders with an annual income, as determined under Subsection (b)(2), of less than $17,500. Sets forth eligibility requirements for a loan under this subchapter. Authorizes TDHCA to select nonprofit owner-builder housing programs to certify the eligibility of owner-builders to receive a loan under this subchapter. Requires a nonprofit housing assistance organization selected by TDHCA to use the eligibility requirements established by TDHCA to certify the eligibility of an owner-builder for the program. Requires at least two-thirds of the dollar amount of loans made under this subchapter in each fiscal year to be made to borrowers whose property is located in a county that is eligible to receive financial assistance under Chapter 17K, Water Code. Sec. 2306.754. AMOUNT OF LOAN; LOAN TERMS. Authorizes TDHCA to establish the minimum amount of a loan under this subchapter, but a loan may not exceed $25,000. Requires the owner-builder to obtain the amount necessary that exceeds $25,000 from one or more local governmental entities, nonprofit organizations, or private lenders, if it is not possible for an owner-builder to purchase necessary real property and build adequate housing for $25,000. Prohibits the total amount of loans made by TDHCA and other entities under this subchapter from exceeding $60,000. Sets forth requirements for a loan made by TDHCA under this subchapter. Prohibits TDHCA from disbursing any portion of a loan made under this subchapter until the owner-builder fully completes the owner-builder's obligation under the contract and receives a deed to the property, or refinances the owner-builder's obligation under the contract and converts the obligation to a note secured by a deed of trust, if an owner-builder is purchasing real property under a contract for deed. Sec. 2306.755. NONPROFIT OWNER-BUILDER HOUSING PROGRAMS. Authorizes TDHCA to certify nonprofit owner-builder housing programs to qualify potential ownerbuilders for loans under this subchapter, provide owner-builder education classes under Section 2306.756, assist owner-builders in building housing, and administer loans made by TDHCA under this subchapter. Sec. 2306.756. HOME BUYER EDUCATION CLASSES. Requires a state-certified nonprofit owner-builder housing program to offer owner-builder education classes to potential owner-builders. Sets forth requirements for a class under this section. Authorizes a nonprofit owner-builder housing program to charge a potential owner-builder who enrolls in a class under this section a reasonable fee not to exceed $50 to offset the program's costs in providing the class. Sec. 2306.757. LOAN PRIORITY FOR WAIVER OF LOCAL GOVERNMENT FEES. Requires TDHCA to give priority to loans to owner-builders who will reside in counties or municipalities that agree in writing to waive capital recovery fees, building permit fees, inspection fees, or other fees related to the building of the housing to be built with the loan proceeds, in making loans under this subchapter. Sec. 2306.758. FUNDING. Requires TDHCA to solicit gifts and grants to make loans under this subchapter. Authorizes TDHCA to also make loans under this subchapter from certain funds. Sec. 2306.759. REPORTING DUTIES. Requires TDHCA to prepare a report that evaluates the repayment history of owner-builders who receive loans under this subchapter, and deliver a copy of the report to the governor, the lieutenant governor, and the speaker of the house of representatives, no later than November 15, 2000. Sec. 2306.760. EXPIRATION. Provides that this subchapter expires September 1, 2005. SECTION 2. Requires TDHCA to use no more than $2.8 million from funds allocated to the housing trust fund established under Section 2306.201, Government Code, and no less than $2.8 million from any other source available to TDHCA to make loans under Chapter 2306FF, Government Code, as added by this Act, for the state fiscal biennium ending August 31, 2001. SECTION 3. Requires the office of the secretary of state to assist TDHCA in administering the owner-builder loan program under Subchapter FF, Chapter 2306, Government Code, as added by this Act, until August 31, 2000. Requires TDHCA to administer the owner-builder loan program, beginning on September 1, 2000. SECTION 4. Emergency clause. Effective date: 90 days after adjournment.