Bill Text: TX SB1731 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to the establishment, fiscal oversight and administration of the Texas secure loan pilot program by the Texas Department of Housing and Community Affairs.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-04-24 - Left pending in committee [SB1731 Detail]
Download: Texas-2013-SB1731-Introduced.html
By: Lucio | S.B. No. 1731 | |
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relating to the establishment, fiscal oversight and administration | ||
of the Texas secure loan pilot program by the Texas Department of | ||
Housing and Community Affairs. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 2306, Government Code, is amended by | ||
adding Subchapter OO to read as follows: | ||
SUBCHAPTER OO. TEXAS SECURE LOAN PILOT PROGRAM | ||
Sec. 2306.1081. DEFINITION. In this subchapter, "program" | ||
means the Texas secure loan pilot program. | ||
Sec. 2306.1082. TEXAS SECURE LOAN PILOT PROGRAM. (a) The | ||
department shall establish the Texas secure loan pilot program to | ||
provide first lien single-family mortgage loans to individuals and | ||
families of low income. | ||
(b) The program may include the provision of down payment | ||
and closing cost assistance. | ||
Sec. 2306.1083. ADMINISTRATION OF PROGRAM; RULES. (a) The | ||
department shall administer the program. | ||
(b) The board shall adopt rules governing: | ||
(1) the administration of the program, including the | ||
origination of loans under the program; | ||
(2) the criteria for approving another entity to | ||
service loans originated under the program; | ||
(3) the use of insurance on the loans and the homes | ||
financed under the program, as considered appropriate by the board | ||
to provide additional security for the loans; | ||
(4) the verification of occupancy of the home by the | ||
homebuyer as the homebuyer's principal residence; and | ||
(5) the terms of any memorandum of understanding or | ||
contract with another entity for processing, servicing, or | ||
administering the loans. | ||
(c) The department may adopt rules governing loan | ||
modifications, including specific criteria for authorizing the | ||
modification of loan terms for homebuyers whose income is adversely | ||
affected by circumstances such as unemployment, a reduction of | ||
wages or hours of employment, illness, or the death of a spouse or | ||
other person contributing to the income of a homebuyer. | ||
Sec. 2306.1084. ELIGIBILITY. (a) To be eligible for a | ||
mortgage loan issued by the department under this subchapter, a | ||
homebuyer must: | ||
(1) earn an income, adjusted for family size, of not | ||
more than: | ||
(A) 80 percent of the area median income if the | ||
homebuyer lives in a rural area; or | ||
(B) 60 percent of the area median income if the | ||
homebuyer lives in an urban area; | ||
(2) intend to occupy, as the homebuyer's principal | ||
residence, the home for which the mortgage loan is issued; and | ||
(3) meet any additional eligibility requirements or | ||
limitations prescribed by the department. | ||
(b) The department may enter into memoranda of | ||
understanding with other agencies of the state or may contract with | ||
private entities to process, service, or administer all or a | ||
portion of the loans issued under this subchapter. | ||
Sec. 2306.1085. ALLOCATION OF LOANS. The department shall | ||
issue at least 50 percent of all loans under this subchapter to | ||
homebuyers whose incomes do not exceed 60 percent of area median | ||
family income, adjusted for family size. | ||
Sec. 2306.1086. LOAN TERMS; RECOVERY OF PRINCIPAL. | ||
(a) The department shall establish reasonable interest rates for | ||
mortgage loans under this subchapter to allow full repayment of | ||
those loans by low-income homebuyers. | ||
(b) The department shall recover the full amount of the | ||
principal of a loan issued under this subchapter. | ||
Sec. 2306.1087. MODIFICATION OF LOAN TERMS. If a | ||
homebuyer meets the criteria adopted by the department under | ||
Section 2306.1083(b)(6), the department or other servicer of the | ||
loan may modify the terms of the loan by: | ||
(1) suspending payments for a specific period; | ||
(2) extending the term of the loan to reduce the amount | ||
of the payments; or | ||
(3) lowering the interest rate to reduce the amount of | ||
the payments. | ||
Sec. 2306.1088. INITIATION OF MODIFIED LOAN TERMS. | ||
(a) Regardless of whether a loan payment is missed, the | ||
modification of loan terms under Section 2306.1087 may be requested | ||
by the homebuyer or initiated by the department or other servicer of | ||
the loan. | ||
(b) If a homebuyer misses a scheduled payment for a loan | ||
under this subchapter, the department or other servicer of the loan | ||
shall contact the homebuyer and determine the reason for the missed | ||
payment. If the payment was missed for a reason meeting the | ||
criteria adopted by the board under Section 2306.1083(b)(6), the | ||
department or servicer may modify the terms of the loan under | ||
Section 2306.1087. | ||
Sec. 2306.1089. EDUCATION SERVICES FOR HOMEBUYERS. The | ||
department shall provide homebuyer and homeowner education and | ||
counseling services to persons receiving loans under this | ||
subchapter. | ||
Sec. 2306.1090. FUNDING. (a) The department shall ensure | ||
that a loan issued under this subchapter is structured in a way that | ||
complies with any requirements associated with the source of the | ||
funds used for the loan. | ||
(b) In addition to funds set aside for the program under | ||
Section 1372.023 and any other available funds, including | ||
legislative appropriations, the department may solicit and accept | ||
gifts and grants for the purposes of this subchapter. | ||
(c) The department may package, securitize, and sell the | ||
loans issued under this subchapter and use the proceeds of the sale | ||
to issue additional loans. | ||
SECTION 2. The Texas Department of Housing and Community | ||
Affairs shall adopt the rules required by Subchapter OO, Government | ||
Code, as added by this Act, not later than October 1, 2013, and | ||
shall begin issuing loans under the Texas secure loan pilot program | ||
not later than January 1, 2013. | ||
SECTION 3. This Act takes effect September 1, 2013. |