1. (a) Affidavit of eligible borrower--An affidavit substantially in the form of Exhibit A of the master mortgage origination agreement.
2. (b) Area median family income--The Department's determination, as permitted by §2306.123 of the Texas Government Code, of the median income of a family for an area using a source or methodology acceptable under federal law or rule. Percentages of the area median family income, as updated from time to time, may be found on the department's website in the "Combined Income and Purchase Price Limits Table."
3. (c) Areas of chronic economic distress--Those areas in the state, whether one or more, designated from time to time as areas of chronic economic distress by the state and approved by the Secretaries of Treasury and Housing and Urban Development pursuant to 26 USC §143(j), as amended from time to time, and related regulations.
4. (d) Contract for deed exception--The exception for certain mortgage loan eligibility requirements, as provided in the master mortgage origination agreement, available with respect to a principal residence owned under a contract for deed by a person whose family income is not more than 50% of the applicable median family income.
5. (e) Department--The Texas Department of Housing and Community Affairs.

6. (f) First-time homebuyer--A person who:

   1. (1) resides in this state on the date on which an application is filed; and
   2. (2) has not owned a home during the three years preceding the date on which an application under this program is filed, except if the application is with respect to a home in a targeted area. A person will be considered to have owned a home if the person had a present ownership interest in a home during the three years preceding the date on which the application was filed. In the event there is more than one person applying with respect to a home, each applicant must separately meet this three year requirement.
7. (g) Home--A dwelling in this state in which a first-time homebuyer intends to reside as the homebuyer's principal residence.
8. (h) Master mortgage origination agreement--The contract between the department and a mortgage lender, together with any amendments thereto, setting forth certain terms and conditions relating to the origination and sale of mortgage loans by the mortgage lender and the financing of such mortgage loans by the department.
9. (i) Maximum purchase price limit--The purchase price limits published and updated from time to time in the "Combined Income and Purchase Price Limits Table" found on the department's website.

10. (j) Mortgage credit certificate--Any certificate which:

    1. (1) is issued under a qualified mortgage credit certificate program by the department;
    2. (2) is issued to the first-time homebuyer/taxpayer in connection with the acquisition of the first-time homebuyer/taxpayer's principal residence; and
    3. (3) specifies the certificate credit rate, and the certified indebtedness amount.
11. (k) Mortgage lender--A bank, trust company, savings bank, mortgage company, mortgage banker, credit union, national banking association, savings and loan association, life insurance company, or other financial institution authorized to transact business in this state and approved as a mortgage lender by the department.

12. (l) Present ownership interest--

    1. (1) a fee simple interest;
    2. (2) a joint tenancy, a tenancy in common or tenancy by the entirety;
    3. (3) the interest of a tenant shareholder in a cooperative;
    4. (4) a life estate;
    5. (5) a land contract which does not fall within the contract for deed exception; or
    6. (6) an interest held in trust for an a person that would constitute a present ownership interest if held directly by such person. The term, "present ownership interest" does not include:
    7. (7) a remainder interest;
    8. (8) a lease with or without an option to purchase;
    9. (9) a mere expectancy to inherit an interest in a principal residence;
    10. (10) the interest that a purchaser of a residence acquires on the execution of a purchase contract;
    11. (11) a land contract which falls within the contract for deed exception; or
    12. (12) an interest in other than a principal residence.
13. (m) Program--The Texas First-Time Homebuyer Program.
14. (n) Targeted areas--A census tract, as designated by the United States Secretary of Commerce, in which 70% or more of the families have incomes that are 80% or less of the statewide median income, such median income to be determined on the basis of the most recent decennial census for which data are available, or an area of chronic economic distress.

Source Note:The provisions of this §7.2 adopted to be effective December 2, 2007, 32 TexReg 8436.