By Lucio S.B. No. 1287
76R9018 ESH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to housing loans to low income families.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 2306, Government Code, is amended by
1-5 adding Subchapter FF to read as follows:
1-6 SUBCHAPTER FF. OWNER-BUILDER LOAN PROGRAM
1-7 Sec. 2306.751. DEFINITION. In this subchapter,
1-8 "owner-builder" means a person who owns or purchases a piece of
1-9 real property, either through a contract for deed or a warranty
1-10 deed, and who undertakes to make improvements to that property.
1-11 The term does not include a person who owns or operates a
1-12 construction business.
1-13 Sec. 2306.752. OWNER-BUILDER LOAN PROGRAM. (a) To provide
1-14 for the development of affordable housing in this state, the
1-15 department, through the colonia self-help centers established under
1-16 Subchapter Z, shall make loans for owner-builders to enable them
1-17 to:
1-18 (1) purchase real property on which to build new
1-19 residential housing; and
1-20 (2) build new residential housing.
1-21 (b) The department may adopt rules necessary to accomplish
1-22 the purposes of this subchapter.
1-23 Sec. 2306.753. OWNER-BUILDER ELIGIBILITY. (a) Subject to
1-24 this section, the department shall establish eligibility
2-1 requirements for an owner-builder to receive a loan under this
2-2 subchapter. The eligibility requirements must provide that at
2-3 least 50 percent of the loans made under this subchapter be made to
2-4 owner-builders with an annual income, as determined under
2-5 Subsection (b)(2), of less than $17,500.
2-6 (b) To be eligible for a loan under this subchapter, an
2-7 owner-builder:
2-8 (1) must reside with at least two other persons
2-9 related to the owner-builder in the first degree of consanguinity
2-10 or affinity, as determined under Subchapter B, Chapter 573;
2-11 (2) may not have an annual income that exceeds
2-12 $25,000, when combined with the income of any person who resides
2-13 with the owner-builder;
2-14 (3) may not have owned a home in the preceding 10
2-15 years;
2-16 (4) must have resided in this state for the preceding
2-17 six months;
2-18 (5) must have successfully completed a home buyer
2-19 education class under Section 2306.756; and
2-20 (6) must agree to:
2-21 (A) provide at least 60 percent of the labor
2-22 necessary to build the proposed housing by working through a
2-23 state-certified owner-builder housing program; or
2-24 (B) provide an amount of labor equivalent to the
2-25 amount required under Paragraph (A) in connection with building
2-26 housing for others through a state-certified nonprofit
2-27 owner-builder housing program.
3-1 (c) The department may select nonprofit owner-builder
3-2 housing programs to certify the eligibility of owner-builders to
3-3 receive a loan under this subchapter. A nonprofit housing
3-4 assistance organization selected by the department shall use the
3-5 eligibility requirements established by the department to certify
3-6 the eligibility of an owner-builder for the program.
3-7 Sec. 2306.754. AMOUNT OF LOAN; LOAN TERMS. (a) The amount
3-8 of a loan made by the department under this subchapter may not
3-9 exceed $25,000.
3-10 (b) If it is not possible for an owner-builder to purchase
3-11 necessary real property and build adequate housing for $25,000, the
3-12 owner-builder must obtain the amount necessary that exceeds $25,000
3-13 from one or more local governmental entities, nonprofit
3-14 organizations, or private lenders. The total amount of loans made
3-15 by the department and other entities under this subchapter may not
3-16 exceed $60,000.
3-17 (c) A loan made by the department under this subchapter:
3-18 (1) must have a term of 30 years;
3-19 (2) may not provide for a payment in excess of $70 per
3-20 month for the first 10 years of the loan;
3-21 (3) may not provide for a payment in excess of $134
3-22 per month for the loan term remaining after the first 10 years;
3-23 (4) may not bear interest for the first two years of
3-24 the loan;
3-25 (5) beginning with the second anniversary of the date
3-26 the loan was made, must bear interest at the rate of one percent a
3-27 year;
4-1 (6) 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; and
4-5 (7) 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.
4-8 Sec. 2306.755. NONPROFIT OWNER-BUILDER HOUSING PROGRAMS.
4-9 The department may certify nonprofit owner-builder housing programs
4-10 to:
4-11 (1) qualify potential owner-builders for loans under
4-12 this subchapter;
4-13 (2) provide home buyer education classes under Section
4-14 2306.756;
4-15 (3) assist owner-builders in building housing; and
4-16 (4) administer loans made by the department under this
4-17 subchapter.
4-18 Sec. 2306.756. HOME BUYER EDUCATION CLASSES. (a) A
4-19 state-certified nonprofit owner-builder housing program shall offer
4-20 owner-builder education classes to potential owner-builders. A
4-21 class under this section must provide information on:
4-22 (1) the financial responsibilities of an owner-builder
4-23 under this subchapter, including the consequences of an
4-24 owner-builder's failure to meet those responsibilities;
4-25 (2) the building of housing by owner-builders;
4-26 (3) resources for low-cost building materials
4-27 available to owner-builders; and
5-1 (4) resources for building assistance available to
5-2 owner-builders.
5-3 (b) A nonprofit owner-builder housing program may charge a
5-4 potential owner-builder who enrolls in a class under this section a
5-5 reasonable fee not to exceed $50 to offset the program's costs in
5-6 providing the class.
5-7 Sec. 2306.757. WAIVER OF LOCAL GOVERNMENT FEES. The
5-8 department may not make a loan under this subchapter unless the
5-9 county or municipality in which the real property as to which the
5-10 loan is made agrees in writing to waive all capital recovery fees,
5-11 building permit fees, inspection fees, or other fees related to the
5-12 building of the housing to be built with the loan proceeds.
5-13 Sec. 2306.758. FUNDING. (a) The department shall solicit
5-14 gifts and grants to make loans under this subchapter.
5-15 (b) The department may also make loans under this subchapter
5-16 from:
5-17 (1) available funds in the housing trust fund
5-18 established under Section 2306.201;
5-19 (2) federal block grants that may be used for the
5-20 purposes of this subchapter;
5-21 (3) the proceeds of state general obligation bonds
5-22 that may be used for the purposes of this subchapter; and
5-23 (4) amounts received by the department in repayment of
5-24 loans made under this subchapter.
5-25 Sec. 2306.759. MAXIMUM NUMBER OF LOANS. (a) For the state
5-26 fiscal year ending August 31, 2000, the department may not make
5-27 more than 500 loans under this subchapter.
6-1 (b) For the state fiscal year ending August 31, 2001, the
6-2 department may not make more than 1,000 loans under this
6-3 subchapter.
6-4 Sec. 2306.760. REPORTING DUTIES. The department shall:
6-5 (1) prepare a report that evaluates the repayment
6-6 history of owner-builders who receive loans under this subchapter;
6-7 and
6-8 (2) deliver a copy of the report to the governor, the
6-9 lieutenant governor, and the speaker of the house of
6-10 representatives not later than November 15, 2000.
6-11 Sec. 2306.761. EXPIRATION. This subchapter expires
6-12 September 1, 2001.
6-13 SECTION 2. This Act takes effect September 1, 1999.
6-14 SECTION 3. The importance of this legislation and the
6-15 crowded condition of the calendars in both houses create an
6-16 emergency and an imperative public necessity that the
6-17 constitutional rule requiring bills to be read on three several
6-18 days in each house be suspended, and this rule is hereby suspended.