Section 23.72 - Homebuyer Assistance with New Construction (HANC) Administrative Requirements(a) Commitment or Reservation of Funds. The Administrator must submit the true and complete information, certified as such, with a request for the Commitment or Reservation of Funds as described in paragraphs (1) - (15) of this subsection:(1) Head of Household name and address of housing unit for which assistance is being requested;(2) A budget that includes the amount of Activity funds specifying the acquisition costs, construction costs, soft costs and administrative costs requested, a maximum of five percent of hard construction costs for contingency items, proposed Match to be provided, evidence that Direct Activity Cost and Soft Cost limitations are not exceeded, and evidence that any duplication of benefit is addressed;(3) Verification of environmental clearance from the Department;(4) A copy of the Household's intake application on a form prescribed by the Department;(5) Certification of the income eligibility of the Household signed by the Administrator and all Household members age 18 or over, and including the date of the income eligibility determination. All documentation used to determine the income of the Household must be provided;(6) Project cost estimates, construction contracts, and other construction documents necessary to ensure applicable property standard requirements will be met at completion;(7) Identification of any Lead-Based Paint (LBP) if activity involves an existing unit and certification that LBP will be mitigated as required by 24 CFR § 92.355;(8) Evidence that the housing unit will be located outside of the 100-year floodplain;(9) If applicable, documentation to address or resolve any potential conflict of interest, Identity of Interest, or duplication of benefit;(10) Information necessary to draft Mortgage Loan documents, including issuance of an SOL;(11) Life event documentation, as applicable, and all information necessary to prepare any applicable affidavits such as marital status and heirship;(12) Documentation of homebuyer completion of a homebuyer counseling program/class provided by a HUD certified housing counselor;(13) For Activities involving acquisition of real property:(A) A title commitment to issue a title policy that evidences that the property will transfer with no tax lien, child support lien, mechanics or materialman's lien or any other restrictions or encumbrances that impair the good and marketable nature of title to the ownership interest and that the definition of Homeownership will be met. The effective date of the title commitment must be no more than 60 days prior to the date of project submission. Commitments that expire prior to execution of closing must be updated at closing and must not have any adverse changes in order to close;(B) Executed sales contract; and(C) A loan estimate or letter from any other lender confirming that the loan terms and closing costs will be consistent with the executed sales contract, the first lien Mortgage Loan requirements, and the requirements of this Chapter;(14) For Activities that do not involve acquisition of real property:(A) A title commitment or policy, or a down date endorsement to an existing title policy, and the actual documents, or legible copies thereof, establishing the Household's ownership, such as a warranty deed or ground lease for a 99-year leasehold. The effective date of the title commitment must be no more than 60 days prior to of the date of project submission. Title commitments for loan projects that expire prior to the loan closing date must be updated and must not have any adverse changes. These documents must evidence the definition of Homeownership is met;(B) A tax certificate that evidences a current paid status;(C) Written consent from all Persons who have a valid lien or ownership interest in the Property;(D) Consent to demolish from any existing Mortgage Loan lien holders and consent to subordinate to the Department's loan, if applicable; and(15) Any other documentation necessary to evidence that the Activity meets the Program requirements.(b) Loan closing. In addition to the documents required under subsection (a) of this section, the Administrator must submit the appraisal or other valuation method approved by the Department which establishes the post construction value of improvements prior to the issuance of loan documents by the Department.(c) Disbursement of funds. The Administrator must comply with all of the requirements described in paragraphs (1) - (11) of this subsection, for a request for disbursement of funds to reimburse eligible costs incurred. Submission of additional documentation related to the Administrator's compliance with requirements described in paragraphs (1) - (11) of this subsection, may be required with a request for disbursement: (1) For construction costs that are part of a loan subject to the requirements of this subsection, a down date endorsement to the title policy not older than the date of the last disbursement of funds or 45 days, whichever is later, is required. For release of retainage, the down date endorsement must be dated at least 40 days after the Construction Completion Date;(2) If applicable, a maximum of 50 percent of Activity funds for an Activity may be drawn before providing evidence of Match. Thereafter, each Administrator must provide evidence of Match, including the date of provision, in accordance with the percentage of Activity funds disbursed;(3) Property inspections, including photographs of the front, back, and side elevations of the housing unit and at least one picture of each of the kitchen, family room, each bedroom, and each bathroom with date and property address reflected on each photo, are required to be submitted. The inspection must be signed and dated by the inspector and Administrator;(4) Certification of the following is required:(A) That its fiscal control and fund accounting procedures are adequate to assure the proper disbursal of, and accounting for, funds provided;(B) That no Person that would benefit from the award of HOME funds has satisfied the Applicant's cash reserve obligation or made promises in connection therewith;(C) That each request for disbursement of HOME funds is for the actual cost of providing a service; and(D) That the service does not violate any conflict of interest provisions;(5) Original, fully executed, legally enforceable loan documents for each assisted Household containing remedies adequate to enforce any applicable affordability requirements are required. Certified copies of fully executed, recorded loan documents that are required to be recorded in the real property records of the county in which the housing unit is located must be returned to the Department, duly certified as to recordation by the appropriate county official. This documentation prior to disbursement is not applicable for funds made available at the loan closing;(6) Expenditures must be allowable and reasonable in accordance with federal, state, and local rules and regulations. The Department shall determine the reasonableness for expenditures submitted for reimbursement. The Department may request Administrator to make modifications to the disbursement request and is authorized to modify the disbursement procedures set forth herein and to establish such additional requirements for payment of HOME funds to Administrator as may be necessary or advisable for compliance with all program requirements;(7) The request for funds for administrative costs must be proportionate to the amount of Direct Activity Costs requested or already disbursed;(8) Disbursement requests must include the withholding of ten percent of hard construction costs for retainage. Retainage will be held until at least 40 days after the Construction Completion Date;(9) For final disbursement requests, the following is required: (A) Submission of documentation required for Activity completion reports and evidence that the demolition or, if an MHU, salvage and disposal of all dilapidated housing units on the lot;(B) Certification or other evidence acceptable to Department that the replacement house, whether site-built or MHU, was constructed or placed on and within the same lot for which ownership was established and on and within the same lot secured by the loan; and(C) A final appraisal of the property after completion of improvements;(10) The final request for disbursement must be submitted to the Department with support documentation no later than 60 days after the termination date of the Contract in order to remain in compliance with the Contract and eligible for future funding. The Department shall not be obligated to pay for costs incurred or performances rendered after the termination date of a Contract; and(11) For costs associated with insurance policies, including title policies and homeowner insurance policies charged as Activity costs, evidence of payment of the cost must be submitted with the retainage request.10 Tex. Admin. Code § 23.72
The provisions of this §23.72 adopted to be effective October 31, 2012, 37 TexReg 8492; amended to be effective January 5, 2014, 38 TexReg 9498; Adopted by Texas Register, Volume 40, Number 34, August 21, 2015, TexReg 5328, eff. 8/30/2015; Amended by Texas Register, Volume 41, Number 07, February 12, 2016, TexReg 1116, eff. 2/21/2016; Adopted by Texas Register, Volume 42, Number 30, July 28, 2017, TexReg 3767, eff. 8/3/2017; Adopted by Texas Register, Volume 45, Number 47, November 20, 2020, TexReg 8332, eff. 11/26/2020; Adopted by Texas Register, Volume 49, Number 12, March 22, 2024, TexReg 1906, eff. 3/28/2024