By: Lucio, Truan S.B. No. 1287
Shapleigh, Zaffirini
A BILL TO BE ENTITLED
AN ACT
1-1 relating to housing loans to low-income families.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Chapter 2306, Government Code, is amended by
1-4 adding Subchapter FF to read as follows:
1-5 SUBCHAPTER FF. OWNER-BUILDER LOAN PROGRAM
1-6 Sec. 2306.751. DEFINITION. In this subchapter,
1-7 "owner-builder" means a person, other than a person who owns or
1-8 operates a construction business:
1-9 (1) who:
1-10 (A) owns or purchases a piece of real property
1-11 through a warranty deed or a warranty deed and deed of trust; or
1-12 (B) is purchasing a piece of real property under
1-13 a contract for deed entered into before January 1, 1999; and
1-14 (2) who undertakes to make improvements to that
1-15 property.
1-16 Sec. 2306.752. OWNER-BUILDER LOAN PROGRAM. (a) To provide
1-17 for the development of affordable housing in this state, the
1-18 department, through the colonia self-help centers established under
1-19 Subchapter Z and nonprofit organizations identified by the
1-20 department, shall make loans for owner-builders to enable them to:
1-21 (1) purchase or refinance real property on which to
1-22 build new residential housing;
1-23 (2) build new residential housing; or
1-24 (3) improve existing residential housing.
2-1 (b) The department may adopt rules necessary to accomplish
2-2 the purposes of this subchapter.
2-3 Sec. 2306.753. OWNER-BUILDER ELIGIBILITY. (a) Subject to
2-4 this section, the department shall establish eligibility
2-5 requirements for an owner-builder to receive a loan under this
2-6 subchapter. The eligibility requirements must provide that at
2-7 least 50 percent of the loans made under this subchapter be made to
2-8 owner-builders with an annual income, as determined under
2-9 Subsection (b)(2), of less than $17,500.
2-10 (b) To be eligible for a loan under this subchapter, an
2-11 owner-builder:
2-12 (1) must reside with at least two other persons
2-13 related to the owner-builder in the first degree by consanguinity
2-14 or affinity, as determined under Subchapter B, Chapter 573;
2-15 (2) may not have an annual income that exceeds
2-16 $25,000, when combined with the income of any person who resides
2-17 with the owner-builder;
2-18 (3) must have resided in this state for the preceding
2-19 six months;
2-20 (4) must have successfully completed an owner-builder
2-21 education class under Section 2306.756; and
2-22 (5) must agree to:
2-23 (A) provide at least 60 percent of the labor
2-24 necessary to build the proposed housing by working through a
2-25 state-certified owner-builder housing program; or
2-26 (B) provide an amount of labor equivalent to the
3-1 amount required under Paragraph (A) in connection with building
3-2 housing for others through a state-certified nonprofit
3-3 owner-builder housing program.
3-4 (c) The department may select nonprofit owner-builder
3-5 housing programs to certify the eligibility of owner-builders to
3-6 receive a loan under this subchapter. A nonprofit housing
3-7 assistance organization selected by the department shall use the
3-8 eligibility requirements established by the department to certify
3-9 the eligibility of an owner-builder for the program.
3-10 Sec. 2306.754. AMOUNT OF LOAN; LOAN TERMS. (a) The
3-11 department may establish the minimum amount of a loan under this
3-12 subchapter, but a loan may not exceed $25,000.
3-13 (b) If it is not possible for an owner-builder to purchase
3-14 necessary real property and build adequate housing for $25,000, the
3-15 owner-builder must obtain the amount necessary that exceeds $25,000
3-16 from one or more local governmental entities, nonprofit
3-17 organizations, or private lenders. The total amount of loans made
3-18 by the department and other entities to an owner-builder under this
3-19 subchapter may not exceed $60,000.
3-20 (c) A loan made by the department under this subchapter:
3-21 (1) may not exceed a term of 30 years;
3-22 (2) may not bear interest for the first two years of
3-23 the loan;
3-24 (3) beginning with the second anniversary of the date
3-25 the loan was made, must bear interest at the rate of one percent a
3-26 year;
4-1 (4) beginning on the third anniversary of the date the
4-2 loan was made and ending on the seventh anniversary of the date the
4-3 loan was made, must bear interest at a rate that is one percent
4-4 greater than the rate borne in the preceding year;
4-5 (5) beginning on the seventh anniversary of the date
4-6 the loan was made and continuing through the remainder of the loan
4-7 term, must bear interest at the rate of five percent; and
4-8 (6) may be secured by a lien on the real property,
4-9 including a lien that is subordinate to a lien that secures a loan
4-10 made under Subsection (b) and that is greater than the department's
4-11 lien.
4-12 (d) If an owner-builder is purchasing real property under a
4-13 contract for deed, the department may not disburse any portion of a
4-14 loan made under this subchapter until the owner-builder:
4-15 (1) fully completes the owner-builder's obligation
4-16 under the contract and receives a deed to the property; or
4-17 (2) refinances the owner-builder's obligation under
4-18 the contract and converts the obligation to a note secured by a
4-19 deed of trust.
4-20 Sec. 2306.755. NONPROFIT OWNER-BUILDER HOUSING PROGRAMS.
4-21 The department may certify nonprofit owner-builder housing programs
4-22 to:
4-23 (1) qualify potential owner-builders for loans under
4-24 this subchapter;
4-25 (2) provide owner-builder education classes under
4-26 Section 2306.756;
5-1 (3) assist owner-builders in building housing; and
5-2 (4) administer loans made by the department under this
5-3 subchapter.
5-4 Sec. 2306.756. OWNER-BUILDER EDUCATION CLASSES. (a) A
5-5 state-certified nonprofit owner-builder housing program shall offer
5-6 owner-builder education classes to potential owner-builders. A
5-7 class under this section must provide information on:
5-8 (1) the financial responsibilities of an owner-builder
5-9 under this subchapter, including the consequences of an
5-10 owner-builder's failure to meet those responsibilities;
5-11 (2) the building of housing by owner-builders;
5-12 (3) resources for low-cost building materials
5-13 available to owner-builders; and
5-14 (4) resources for building assistance available to
5-15 owner-builders.
5-16 (b) A nonprofit owner-builder housing program may charge a
5-17 potential owner-builder who enrolls in a class under this section a
5-18 reasonable fee not to exceed $50 to offset the program's costs in
5-19 providing the class.
5-20 Sec. 2306.757. LOAN PRIORITY FOR WAIVER OF LOCAL GOVERNMENT
5-21 FEES. In making loans under this subchapter, the department shall
5-22 give priority to loans to owner-builders who will reside in
5-23 counties or municipalities that agree in writing to waive capital
5-24 recovery fees, building permit fees, inspection fees, or other fees
5-25 related to the building of the housing to be built with the loan
5-26 proceeds.
6-1 Sec. 2306.758. FUNDING. (a) The department shall solicit
6-2 gifts and grants to make loans under this subchapter.
6-3 (b) The department may also make loans under this subchapter
6-4 from:
6-5 (1) available funds in the housing trust fund
6-6 established under Section 2306.201;
6-7 (2) federal block grants that may be used for the
6-8 purposes of this subchapter;
6-9 (3) the proceeds of state general obligation bonds
6-10 that may be used for the purposes of this subchapter; and
6-11 (4) amounts received by the department in repayment of
6-12 loans made under this subchapter.
6-13 Sec. 2306.759. REPORTING DUTIES. The department shall:
6-14 (1) prepare a report that evaluates the repayment
6-15 history of owner-builders who receive loans under this subchapter;
6-16 and
6-17 (2) deliver a copy of the report to the governor, the
6-18 lieutenant governor, and the speaker of the house of
6-19 representatives not later than November 15, 2000.
6-20 Sec. 2306.760. EXPIRATION. This subchapter expires
6-21 September 1, 2005.
6-22 SECTION 2. Except as provided by Section 3 of this Act, this
6-23 Act takes effect January 1, 2000, but only if the constitutional
6-24 amendment proposed by S.J.R. No. 34, 76th Legislature, Regular
6-25 Session, 1999, is approved by the voters. If the proposed
6-26 amendment is not approved by the voters, this Act has no effect.
7-1 SECTION 3. This Act takes effect only if a specific
7-2 appropriation for the implementation of this Act is provided in
7-3 H.B. No. 1 (General Appropriations Act), Acts of the 76th
7-4 Legislature, Regular Session, 1999. If no specific appropriation
7-5 is provided in H.B. No. 1, the General Appropriations Act, this Act
7-6 has no effect.
7-7 SECTION 4. The office of the secretary of state shall assist
7-8 the Texas Department of Housing and Community Affairs in
7-9 administering the owner-builder loan program under Subchapter FF,
7-10 Chapter 2306, Government Code, as added by this Act, until August
7-11 31, 2000. Beginning on September 1, 2000, the Texas Department of
7-12 Housing and Community Affairs shall administer the owner-builder
7-13 loan program.
7-14 SECTION 5. The importance of this legislation and the
7-15 crowded condition of the calendars in both houses create an
7-16 emergency and an imperative public necessity that the
7-17 constitutional rule requiring bills to be read on three several
7-18 days in each house be suspended, and this rule is hereby suspended.