1. (a) Purpose. This section governs disbursements made from the MGF to provide grants for financial education relating to mortgage loans, as provided by Finance Code §156.554(b)(1).
2. (b) Grant Cycle. The fund may have one competitive grant cycle every two years. A new grant cycle begins on January 1 of every odd-numbered year. An applicant may choose to apply for a one-year grant or a two-year grant. The grant cycle for a one-year grant begins on January 1 and ends on December 31 of the odd-numbered year for the applicable cycle. The grant cycle for a two-year grant begins on January 1 of the odd-numbered year and ends on December 31 of the following even-numbered year for the applicable cycle.
3. (c) Eligibility. A grant may only be given to a company licensed by SML as an auxiliary mortgage loan activity company, a nonprofit organization, or a political subdivision of this state. Grant funding is not available to entities licensed by or registered with SML other than auxiliary mortgage loan activity companies and residential mortgage loan servicers that operate as a nonprofit organization.
4. (d) Grant Application. To be considered for the grant program, an applicant must submit a completed grant application by the deadline and in accordance with the instructions for the applicable grant cycle. Late or incomplete grant applications will not be accepted. Meeting eligibility criteria and timely submission of a grant application does not guarantee a grant award.
5. (e) Review and Approval. The Commissioner, after considering the recommendations of the MGAC and the Grant Coordinator, will review timely and complete applications and determine the grants awarded.
6. (f) Grant Agreement. To participate in the grant program, a grantee approved by the Commissioner to receive a grant must execute the grant agreement approved by the Commissioner for the applicable grant cycle and tailored to that grantee (grant agreement).

7. (g) Grantee Compliance. A grantee must comply with applicable financial, administrative, and programmatic terms and conditions, and exercise proper stewardship over grant funds. A grantee must use awarded funds in compliance with the following in effect for the applicable grant cycle:

   1. (1) all applicable state laws and regulations;
   2. (2) all applicable federal laws and regulations;
   3. (3) the MGAM;
   4. (4) the grant agreement signed by the Commissioner or the Commissioner's designee and the grantee;
   5. (5) all reporting and monitoring requirements, as outlined in the grant agreement; and
   6. (6) any other guidance documents posted on the MGF webpage for the applicable grant cycle.

8. (h) Reporting and Monitoring.

   1. (1) General reporting requirements. To receive reimbursement of grant expenses a grantee must:

      1. (A) submit periodic grant reports as provided by the grant agreement;
      2. (B) maintain satisfactory compliance with the grant agreement including the grantee's goals approved for funding in the grant agreement; and
      3. (C) identify, track, and report performance measures.
   2. (2) Progress Reports. A grantee must submit progress reports that demonstrate performance outcomes over the term of the grant in accordance with and by the deadlines specified in the grant agreement.

   3. (3) Monitoring. The Grant Coordinator may use the following methods to monitor a grantee's performance and expenditures:

      1. (A) Audit. The Commissioner or Grant Coordinator may audit a grantee to review and compare individual source documentation and materials to summary data provided during the reporting process; or
      2. (B) Site Visits. The Commissioner or Grant Coordinator may visit a grantee's place of business or other place where grant activities are conducted to evaluate performance and determine compliance.

9. (i) Reimbursement.

   1. (1) Eligibility. To be eligible for reimbursement, a grantee must comply with the grant agreement and all other items listed in subsection (g) of this section. To ensure that grant funds are used for a public purpose as provided by Finance Code §156.556(1), grant funds will only be awarded on a cost reimbursement basis for actual, allowable, and allocable costs incurred by a grantee pursuant to the grant agreement. Expenses incurred before the beginning of or after termination of the grant agreement are not eligible for reimbursement. The Commissioner may withhold reimbursements when a grantee is not in compliance with the grant agreement or other items listed in subsection (g) of this section.
   2. (2) Procedure. To request reimbursement, a grantee must submit a progress report and reimbursement request in accordance with and by the deadlines specified in the grant agreement. The progress report and reimbursement request must be made using the current forms prescribed by the Commissioner for the applicable grant cycle. The progress report must be detailed and include supporting documentation to justify the reimbursement request. SML will review and approve requests for reimbursement that satisfy the requirements and promptly disburse funds for approved requests.

10. (j) Misuse of Grant Funds. The Commissioner may require a refund of grant funds already disbursed to the grantee and may cancel the grant agreement or disqualify the grantee from receiving future grants if:

    1. (1) grant funds are not used for a public purpose allowable under Finance Code §156.554(b)(1);
    2. (2) grant funds are used in an illegal manner;
    3. (3) the grantee violates the grant agreement or other items listed in subsection (g) of this section; or
    4. (4) the Commissioner determines that the grantee made a material misrepresentation in obtaining the grant or in seeking reimbursement of grant funds.

Source Note:The provisions of this §52.6 adopted to be effective July 10, 2025, 50 TexReg 3870.