1. (a) Program funds under this subchapter are limited to the acquisition or acquisition and Rehabilitation for accessibility modifications of single family housing units.
2. (b) The Household must complete a homebuyer counseling program/class.

3. (c) Direct Activity Costs, exclusive of Match funds, are limited to:

   1. (1) acquisition and closing costs: the lesser of $20,000 or the amount necessary as determined by an affordability analysis that evidences the total estimated housing payment (including principal, interest, property taxes, insurance, and any other homebuyer assistance) is no less than 20 percent of the Household's gross monthly income based on a thirty (30) year amortization schedule. If the estimated housing payment will be less than 20 percent, the Department shall reduce the amount of downpayment assistance to the homebuyer such that the total estimated housing payment is no less than 20 percent of the homebuyer's gross income; or
   2. (2) closing costs and downpayment: the lesser of $6,000 or the total estimated settlement charges shown on the closing disclosure that are paid by the buyer at closing which are not paid by the buyer's contribution. Households assisted under this paragraph who, at the time of application, have assets which may be liquidated without a federal income tax penalty and which exceed three (3) months of estimated principal, interest, property tax, and property insurance payments for the unit to be purchased as shown in the truth-in-lending statement must contribute the excess funds to the total estimated settlement charges as shown on the good faith estimate; and
   3. (3) Rehabilitation for accessibility modifications: $20,000.
   4. (4) No funds shall be disbursed to the assisted Household at closing. The HOME assistance shall be reduced in the amount necessary to prevent the Household's direct receipt of funds if the closing disclosure shows funds to be provided to the buyer at closing.
   5. (5) Total assistance to the Household must be in an amount of no less than $1,000. Households who are not eligible for at least $1,000 in total homebuyer assistance are ineligible for assistance under this subchapter.

4. (d) Activity soft costs eligible for reimbursement for Activities of the following types are limited to:

   1. (1) acquisition and closing costs: no more than $1,500 per housing unit; and
   2. (2) Rehabilitation for accessibility modifications: $5,000 per housing unit.
5. (e) Funds for Administrative costs are limited to no more than 4 percent of the Direct Activity Costs, exclusive of Match funds.
6. (f) The assistance to an eligible Household shall be in the form of a loan in the amount of the Direct Activity Costs, excluding Match funds. The loan will be at zero percent interest and include deferral of payment and annual pro rata forgiveness with a term based on the federal affordability requirements as defined in 24 CFR §92.254.
7. (g) Any forgiveness of the loan must follow §23.30 of this Chapter.
8. (h) To ensure affordability, the Department will impose the recapture provisions established in this Chapter.
9. (i) Housing that is Rehabilitated under this Chapter must meet the Texas Minimum Construction Standards (TMCS) and all other applicable local codes, Rehabilitation standards, ordinances, and zoning ordinances in accordance with the HOME Final Rule, and Chapter 21 of this title. Housing units that are provided assistance for acquisition only must meet all applicable state and local housing quality standards and code requirements. In the absence of such standards and requirements, the housing units must meet the Housing Quality Standards (HQS) in 24 CFR §982.401.

Source Note:The provisions of this §23.41 adopted to be effective August 3, 2017, 42 TexReg 3747.