1. (a) Initial Inspections.

   1. (1) An initial inspection report must be provided to both the Department and the homeowner or homebuyer for all construction projects. A rehabilitation project is eligible for Reconstruction if the initial inspection report estimates that the cost to rehabilitate exceeds the rehabilitation threshold, which shall be $40,000, or the pre-rehabilitation value of the structure to be rehabilitated, whichever is less.
   2. (2) All deficiencies identified in the initial inspection report shall be addressed in the work write-up for rehabilitation projects.

2. (b) Construction Completion Requirements and Final Inspections.

   1. (1) Compliance with Accessibility Requirements--Applicant must submit one of the documents described in subparagraph (A) or (B) of this paragraph to ensure that requirements of Texas Government Code, §2306.514 and other Program Rules are met.

      1. (A) A copy of the proposed plans and specifications for Reconstruction and New Construction of Single Family Units. All plans submitted must be prepared and executed by an architect licensed by the state of Texas; or
      2. (B) A certification of compliance which includes the seal of the architect.
   2. (2) Final inspections are required for all rehabilitation, reconstruction or new construction activities and must ensure that the construction on the Single Family Housing Unit is complete and meets all applicable state and local codes, and have no observed deficiencies related to health and safety standards.
   3. (3) A copy of the final inspection report must be provided to the Department and the Household for rehabilitation, reconstruction and new construction activities.
   4. (4) A Certificate of occupancy shall be issued prior to final payment for construction, as applicable. If no certificate of occupancy is available from an incorporated area, a document from the local government entity showing that the Single Family Housing Unit has passed all required building codes must be obtained and provided to the Department.
   5. (5) Any deficiencies noted on the certificate of occupancy or the inspector's report must be corrected prior to the final Draw.
   6. (6) Cosmetic issues such as paint, wall texture, etc. will not be required to be corrected if utilizing a self-help construction program.

3. (c) Requirements for Use of professional inspectors or qualified inspection individuals.

   1. (1) Professional home inspectors or qualified inspection individuals shall conduct all initial and final inspections for new construction, reconstruction and rehabilitation activities utilizing the Department's single family program funds.
   2. (2) Municipal code officials, as applicable, shall conduct inspections inside of city limits and extraterritorial jurisdictions.

   3. (3) Professional home inspector requirements.

      1. (A) Inspections may be conducted by a professional home inspector as evidenced by the Administrator to ensure inspections are performed by a person who has received current and comprehensive training to enable them to conduct effective inspections. Completion of the training required to be a licensed TREC inspector would be acceptable evidence of such training.
      2. (B) The professional home inspector may be a staff member of the Administrator.

   4. (4) Qualified inspection individual Requirements.

      1. (A) Inspections may be conducted by a qualified inspection individual if certified by the Administrator that the individual has professional certifications, relevant education or minimum five (5) years experience in a field directly related to home inspection, including but not limited to installing, servicing, repairing or maintaining the structural, mechanical, plumbing and electrical systems found in Single Family Housing Units, as evidenced by inspection logs, certifications, training courses or other documentation.
      2. (B) Inspections may be performed by qualified inspection individuals if allowed by the Program Rules or NOFA.
      3. (C) Qualified inspection individuals may be a staff member of the Administrator.

4. (d) Other inspection requirements.

   1. (1) All inspectors shall inspect properties utilizing applicable construction standards prescribed by the Department; and
   2. (2) All inspectors shall utilize Department approved and prescribed inspection forms/checklists for applicable inspections.
5. (e) Single Family Housing Units receiving only utility connections under the Colonia Self Help Center Program are exempt from inspection requirements.

Source Note:The provisions of this §20.10 adopted to be effective November 1, 2012, 37 TexReg 8470.