1. (a) Eligible activities are limited to:

   1. (1) acquisition or acquisition and Rehabilitation, Reconstruction, or New Construction of single family housing units occupied by the purchaser as shown on an executory contract for conveyance; or
   2. (2) refinance with Rehabilitation, Reconstruction, or New Construction of single family housing units occupied by the purchaser as shown on an executory contract for conveyance provided construction costs exceed the amount of debt that is to be refinanced;
2. (b) An MHU is not an eligible property type for Rehabilitation. MHUs must be installed according to the manufacturer's installation instructions and in accordance with Federal and State laws and regulations.
3. (c) The Household's income must not exceed 60 percent (AMFI) and the Household must complete a homebuyer counseling program/class.
4. (d) The property assisted must be located in a Colonia as defined in Texas Government Code, Chapter 2306. The Colonia must have a Colonia Classification Number, as assigned by the Office of the Texas Secretary of the State.
5. (e) The Department will require a first lien position.

6. (f) Direct Project Costs, exclusive of Match funds, are limited to:

   1. (1) refinance, acquisition and closing costs: $35,000. In the case of a contract for deed housing unit that involves the refinance or acquisition of a loan on an existing MHU and/or the loan for the associated land, the Executive Director may grant an exception to exceed this amount, however, the Executive Director will not grant an exception to exceed $40,000 of assistance;
   2. (2) Reconstruction and New Construction of site-built housing: the lesser of $78 per square foot or $85,000, or for Households of five or more Persons the lesser of $78 per square foot or $90,000;
   3. (3) replacement with an energy efficient MHU: $75,000; and
   4. (4) rehabilitation that is not Reconstruction: $40,000.

7. (g) In addition to the Direct Project Costs allowable under subsection (d) of this section, a sum not to exceed $5,000 may be used to pay for any of the following:

   1. (1) necessary environmental mitigation as identified during the Environmental review process; or
   2. (2) homeowner requests for accessibility features.

8. (h) Project Soft Costs are limited to:

   1. (1) acquisition and closing costs: no more than $1,500 per housing unit;
   2. (2) Reconstruction or New Construction: no more than $9,000 per housing unit;
   3. (3) replacement with an MHU: no more than $3,500 per housing unit; and
   4. (4) rehabilitation that is not Reconstruction: $5,000 per housing unit. This limit may be exceeded for lead-based remediation and only upon prior approval of the Division Director. The costs of testing and assessments for lead-based paint are not eligible Project Soft Costs for housing units that are reconstructed or if the existing housing unit was built after December 31, 1977.
9. (i) Funds for administrative costs are limited to no more than 4 percent of the Direct Project Costs, exclusive of Match funds.
10. (j) The assistance to an eligible Household shall be in the form of a loan in the amount of the Direct Project 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. For refinancing activities, the minimum loan term and affordability period is 15 years, regardless of the amount of HOME assistance.
11. (k) To ensure affordability, the Department will impose resale and recapture provisions established in this chapter.
12. (l) For Reconstruction and New Construction, site-built housing units must meet or exceed the 2000 International Residential Code and all applicable local codes, standards, ordinances, and zoning requirements. In addition, Reconstruction and New Construction housing is required to meet §92.25 1(a)(2) as applicable. 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. 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.

13. (m) Each unit must meet the design and quality requirements described in paragraphs (1) - (4) of this subsection:

    1. (1) include the following amenities: Wired with RG-6 COAX or better and CAT3 phone cable or better to each bedroom and living room; Blinds or window coverings for all windows; Oven/Range; Exhaust/vent fans (vented to the outside) in bathrooms; Energy-Star or equivalently rated lighting in all rooms, which may include compact florescent bulbs. The living room and each bedroom must contain at least one ceiling lighting fixture and wiring must be capable of supporting ceiling fans;
    2. (2) contain no less than two bedrooms. Each unit must contain complete physical facilities and fixtures for living, sleeping, eating, cooking, and sanitation;
    3. (3) each bedroom must be no less than 100 square feet; have a length or width no less than 8 feet; be self contained with a door; have at least one window that provides exterior access; and have at least one closet that is not less than 2 feet deep and 3 feet wide and high enough to contain at least 5 feet of hanging space; and
    4. (4) be no less than 800 total net square feet for a two bedroom home; no less than 1,000 total net square feet for a three bedroom and two bathroom home; and no less than 1,200 total net square feet for a four bedroom and two bathroom home.

14. (n) Housing proposed to be constructed under this Activity must meet the requirements of Chapters 20 and 21 of this title and must be certified by a licensed architect or engineer.

    1. (1) The Department will reimburse only for the first time a set of architectural plans are used, unless any subsequent site specific fees are paid to a Third Party architect, or a licensed engineer; and
    2. (2) A NOFA may include incentives or otherwise require architectural plans to incorporate "green building" elements.

Source Note:The provisions of this §23.51 adopted to be effective August 30, 2015, 40 TexReg 5324; amended to be effective February 21, 2016, 41 TexReg 1116.