Texas Bootstrap Loan Program

Documents

Purpose

Senate Bill 1287 requires TDHCA to establish a loan program, working through certified nonprofit organizations, enabling Owner-Builders (individuals and families) to purchase real estate, construct a home, or renovate a home; and to solicit gifts and grants to fund the program.

In 2001, the 77th Legislature amended this program under Senate Bill 322, a legislative directive that requires the continuation of an Owner-Builder Loan Program. This program, herein after referred to as the Texas Bootstrap Loan Program, is designed to promote and enhance homeownership for low, very low, and extremely low income Texans by providing loan funds to purchase or refinance real property on which to build new residential housing or improve existing residential housing throughout Texas.

The new legislation removes the requirement that the Owner-Builder must reside with two other family members, increases the loan amount to $45,000 per household, total loan amount from TDHCA and other entities cannot exceed $90,000 per household.

Funding

The Texas Bootstrap Loan Program is required under Subchapter FF, Chapter 2306, Texas Government Code, to make available $3 million for mortgage loans to very low-income families (60% Area Median Family Income) not to exceed $45,000 per unit. This program is a self-help construction program, which is designed to provide very low-income families an opportunity to help themselves through the form of sweat equity. All participants under this program are required to provide at least 65% of the labor that is necessary to construct or rehabilitate the home. All applicable building codes will be adhered to; under this program. In addition, nonprofit organizations can combine these funds with other sources such as those from private lending institutions, local governments, or any other sources. However, all combined loans can not exceed $90,000 per unit.

In accordance with Section 2306.753(d) of the Texas Government Code, Title 10, as amended, TDHCA shall set aside at least two-thirds of the available funds for owner-builders whose property is located in an Economically Distressed Area Program (EDAP) counties, as defined under Subchapter K, Chapter 17, Water Code. The remainder of the funding will be available to Department funded Colonia Self-Help Centers and TDHCA certified nonprofit Owner-Builder Housing Programs in the State of Texas.

Eligible Applicants

Colonia Self-Help Centers and Nonprofit organization (501 (c) (3).

Program Activities

All of the eligible activities under this program require that an owner-builder (the borrower) provide at least 65% of the labor necessary to build the proposed housing or provide an amount of labor equivalent to the amount required to build the proposed housing by working through a state-certified owner-builder program. Eligible activities include: (1) Purchase or refinance real property on which to build new residential housing or (2) improve existing residential housing.

For additional information, please contact Raul Gonzales at raul.gonzales@tdhca.state.tx.us, or visit related links for more information