2005S0571-1 03/10/05
By: Lucio S.B. No. 1637
A BILL TO BE ENTITLED
AN ACT
relating to housing assistance and other assistance provided by the
Texas Department of Housing and Community Affairs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (a), Section 1372.006, Government
Code, is amended to read as follows:
(a) An application for a reservation under Subchapter B or a
carryforward designation under Subchapter C must be accompanied by
a nonrefundable fee in the amount of $500, except that for issuers
of qualified residential rental project bonds the application must
be accompanied by a nonrefundable fee of $5,000, of which the board
shall retain $1,000 to offset the costs of the private activity bond
allocation program and the administration of that program and of
which the board shall transfer $4,000 through an interagency
agreement to the Texas Department of Housing and Community Affairs
for use in the affordable housing research and information programs
[program] as provided by Sections [Section] 2306.259 and 2306.260.
SECTION 2. Section 2306.142, Government Code, is amended by
adding Subsections (p) and (q) to read as follows:
(p) The department shall provide credit enhancements and
guarantees to ensure that bonds issued under this section are
continuously rated not less than AAA or its equivalent by at least
one nationally recognized investment rating firm.
(q) The department shall supplement the single-family
mortgage revenue bond loan program under this section by allocating
home mortgage loan volume, creating alternate loan products, and
providing other related assistance to meet the credit needs of the
individuals and families of low and very low income who reside in
the region of the state adjacent to the international border of the
state. The department shall provide assistance under the
supplemental loan program to borrowers who would be ineligible for
assistance under the other provisions of this section. The
department by rule shall determine the appropriate manner for
administering the assistance authorized by this subsection and
provide eligibility standards for borrowers participating in the
supplemental loan program. The department shall fund the
supplemental loan program using money appropriated to the
department that may be used for this purpose.
SECTION 3. Subchapter H, Chapter 2306, Government Code, is
amended by adding Section 2306.1712 to read as follows:
Sec. 2306.1712. ANNUAL HOUSING ASSISTANCE GOAL. (a) The
department shall adopt an annual goal to apply not less than $30
million of the money available through the housing trust fund
program, the HOME investment partnerships program, the low income
housing tax credit program, the Section 8 housing assistance
payments program, and the multifamily housing and single-family
housing mortgage revenue bond programs toward housing assistance
for individuals and families earning not more than 30 percent of the
area median income.
(b) Notwithstanding Section 2306.123, for the purpose of
establishing eligibility for assistance under a program identified
by Subsection (a), the department in implementing this section
shall determine for each county the median income of an individual
or family. The department shall determine the statewide median
income of an individual or family based on the median income for
each county. If the statewide median income is higher than the
median income for a county, the department shall use the statewide
median income for the purpose of establishing eligibility for
assistance in that county for the applicable program.
(c) Not later than September 1 of each year, the department
shall report to the Legislative Budget Board its expenditures for
that year in the income category described by this section.
SECTION 4. Subchapter K, Chapter 2306, Government Code, is
amended by adding Sections 2306.2595 and 2306.260 to read as
follows:
Sec. 2306.2595. BORDER REGION FIRST MORTGAGE PROGRAM.
(a) The department shall develop a program to provide assistance
for the purchase of single-family homes to first-time homebuyers
who reside in a county adjacent to an international border of this
state.
(b) As part of the program, the department shall offer a
three-year balloon mortgage loan product to first-time homebuyers
described by Subsection (a) who, because of a low credit score or
the inability to make a down payment, cannot qualify for a mortgage
loan product offered by the conventional, Fannie Mae, Freddie Mac,
or Federal Housing Administration home mortgage lending industry or
by housing finance corporations organized under Chapter 394, Local
Government Code, and who:
(1) complete:
(A) a credit counseling program; and
(B) a homebuyer education program;
(2) have a depository relationship with a financial
institution;
(3) demonstrate the willingness and ability to make
monthly payments on a mortgage loan; and
(4) meet other eligibility requirements considered
appropriate by the department.
(c) As part of the program, the department shall:
(1) during the loan period, provide continued credit
counseling to recipients of the mortgage loans; and
(2) actively assist the recipients of the mortgage
loans as they prepare to refinance at the end of the three-year
period into an alternative mortgage loan described by Subsection
(b).
(d) The department may extend the period of a mortgage loan
made under this section on a year-to-year basis for not more than an
additional two years to further assist a loan recipient with the
transition to an alternative mortgage loan described by Subsection
(b).
(e) The department may contract with a nonprofit
organization to provide the counseling and education programs
required by this section.
(f) In evaluating applications for mortgage loans under
this section, the department shall accept alternative credit
information, such as written evidence that the applicant has paid
rent or utility, telephone, or other bills in a timely manner.
Sec. 2306.260. FINANCIAL LITERACY EDUCATION PROGRAM:
BORDER RESIDENTS. (a) In this section:
(1) "Public junior college" has the meaning assigned
by Section 61.003, Education Code.
(2) "Texas-Mexico border region" has the meaning
assigned by Section 2056.002.
(b) With money available under Section 1372.006(a), the
department shall:
(1) solicit participation by appropriate nonprofit
organizations and public entities, including public junior
colleges and school districts, in a financial literacy education
program for individuals and families of low income who reside in the
Texas-Mexico border region; and
(2) collaborate with those entities to develop and
establish the program.
(c) The financial literacy education program established by
the department and appropriate entities under this section must
emphasize teaching individuals and families of low income to make
informed financial decisions regarding the purchase or ownership of
homes in the region. As part of the program, the department and the
entities shall develop and distribute educational materials
addressing the financial issues most relevant to home ownership by
individuals and families of low income, including materials
regarding:
(1) how to eliminate credit card debt, establish good
credit, and become a low-risk borrower;
(2) how to manage money;
(3) how to be a prudent investor and begin a savings
program;
(4) how to avoid bankruptcy;
(5) the types of bank accounts available to consumers
and the benefits of maintaining a bank account; and
(6) the types of loans available to consumers.
SECTION 5. Subchapter M, Chapter 2306, Government Code, is
amended by adding Section 2306.298 to read as follows:
Sec. 2306.298. SECONDARY MORTGAGE MARKET. (a) The
department shall authorize colonia self-help centers and any other
appropriate community-based, nonprofit institutions to originate
mortgage loans on behalf of the department for individuals and
families of low income and families of moderate income who have a
credit rating of less than "B-" according to Standard and Poor's
credit underwriting criteria and who meet other eligibility
criteria adopted by board rule. The department may require that
lenders who originate mortgage loans under this section meet
appropriate eligibility requirements as determined under Section
2306.142(n).
(b) The department shall purchase and service a mortgage
loan originated under this section and may sell the loan to a
mortgage lender or the federal government after the second
anniversary of the date of origination.
(c) Proceeds from the sale of mortgage loans under this
section shall be used to make additional mortgage loans on behalf of
the department.
(d) After public notice and comment, the board shall adopt
rules creating underwriting standards and borrower eligibility
standards for mortgage loans originated under this section.
SECTION 6. The Texas Department of Housing and Community
Affairs and appropriate nonprofit organizations and public
entities shall establish the financial literacy education program
under Section 2306.260, Government Code, as added by this Act, not
later than January 1, 2006.
SECTION 7. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.