Sec. 2306.754. AMOUNT OF LOAN; LOAN TERMS. (a) The department may establish the minimum amount of a loan under this subchapter, but a loan made by the department may not exceed $45,000.
(b) If it is not possible for an owner-builder to purchase necessary real property and build or rehabilitate adequate housing for $45,000, the owner-builder must obtain the amount necessary that exceeds $45,000 from other sources of funds. The total amount of amortized, repayable loans made by the department and other entities to an owner-builder under this subchapter may not exceed $90,000.
(c) A loan made by the department under this subchapter:
(1) may not exceed a term of 30 years;
(2) may bear interest at a fixed rate of not more than three percent or bear interest in the following manner:
(A) no interest for the first two years of the loan;
(B) beginning with the second anniversary of the date the loan was made, interest at the rate of one percent a year;
(C) beginning on the third anniversary of the date the loan was made and ending on the sixth anniversary of the date the loan was made, interest at a rate that is one percent greater than the rate borne in the preceding year; and
(D) beginning on the sixth anniversary of the date the loan was made and continuing through the remainder of the loan term, interest at the rate of five percent; and
(3) shall be secured by:
(A) a first lien by the department on the real property if the loan is the largest amortized, repayable loan secured by the real property; or
(B) a co-first lien or subordinate lien as determined by department rule, if the loan is not the largest loan as described by Paragraph (A).
(d) If an owner-builder is purchasing real property under a contract for deed, the department may not disburse any portion of a loan made under this subchapter until the owner-builder:
(1) fully completes the owner-builder's obligation under the contract and receives a deed to the property; or
(2) refinances the owner-builder's obligation under the contract and converts the obligation to a note secured by a deed of trust.
Added by Acts 1999, 76th Leg., ch. 1548, Sec. 1, eff. Aug. 30, 1999. Amended by Acts 2001, 77th Leg., ch. 1367, Sec. 2.09, eff. Sept. 1, 2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1365 (S.B. 679), Sec. 5, eff. June 19, 2009.
Section: Previous 2306.6737 2306.6738 2306.6739 2306.6740 2306.751 2306.752 2306.753 2306.754 2306.755 2306.756 2306.757 2306.758 2306.7581 2306.781 2306.782 NextLast modified: September 28, 2016