SB 208

relating to the establishment of the workforce housing capital
investment fund program to fund the development of workforce
housing in this state; authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  The legislature finds that:
(1)  the creation of the workforce housing capital
investment fund and use of the fund under Subchapter EE, Chapter
2306, Government Code, as added by this Act, will substantially
increase the development of workforce housing for households that
earn between 30 and 80 percent of the area median income;
(2)  the workforce housing capital investment fund will
enable loan recipients to access needed capital to plan for future
(3)  the creation of more housing options in this state
(A)  help stabilize the state economy and local
economies across this state; and
(B)  reduce the need for other services provided
by this state and political subdivisions of this state;
(4)  skilled construction and trade labor shortages
impact the cost of housing at all income levels; and
(5)  the use of the workforce housing capital
investment fund for the purposes of and in the manner described by
Subchapter EE, Chapter 2306, Government Code, as added by this Act,
(A)  in furtherance of the public purposes of
mitigating housing deficits and providing housing to a critical
segment of this state's population that is not often served by
(B)  for the benefit of both this state and
political subdivisions of this state that are impacted by a lack of
workforce housing to provide to qualified homebuyers.
SECTION 2.  Chapter 2306, Government Code, is amended by
adding Subchapter EE to read as follows:
SUBCHAPTER EE.  WORKFORCE HOUSING CAPITAL INVESTMENT FUND PROGRAM
Sec. 2306.701.  DEFINITIONS.  In this subchapter:
(1)  "Fund" means the workforce housing capital
investment fund established under this subchapter.
(2)  "Program" means the workforce housing capital
investment fund program established under this subchapter.
(3)  "Program administrator" means the nonprofit
housing organization with which the department contracts to
administer the program under Section 2306.703.
(4)  "Program recipient" means a loan recipient under
Sec. 2306.702.  WORKFORCE HOUSING CAPITAL INVESTMENT FUND.
(a)  The workforce housing capital investment fund is a special fund
in the state treasury outside the general revenue fund.
(1)  gifts, grants, and donations received by this
state for the purposes of the fund;
(2)  legislative appropriations for the purposes of
(3)  any fees or other sources of revenue that the
legislature dedicates for deposit to the fund;
(4)  repayments of loans made from the fund; and
(5)  interest earned on money deposited to the fund.
Sec. 2306.703.  PROGRAM ADMINISTRATION.  (a)  The department
shall contract with a nonprofit housing organization through a
one-time competitive procurement process to administer the program
in accordance with this subchapter.
(b)  The nonprofit housing organization with which the
department contracts under this section must be a nonprofit
organization designated as a Section 501(c)(3) organization by the
(1)  has a statewide service area with organizational
(2)  provides to organizations designated as Section
501(c)(3) organizations training and technical support, resource
development, mortgage services, and disaster preparedness and
(3)  provides financial literacy education to
(4)  builds single-family residential homes; and
(5)  works with homebuyers who contribute to the
construction of their home or the rehabilitation of another
individual's home, including as a certified nonprofit
owner-builder housing program provider under Subchapter FF with not
less than 15 years of experience.
Sec. 2306.704.  USE OF FUND.  (a)  The department shall
provide money from the fund to the program administrator to make and
disburse zero-interest loans to program recipients in accordance
(b)  Money provided from the fund to program recipients may
be used only to pay the costs associated with the development and
construction of workforce, single-family housing projects
primarily for households that earn between 30 and 80 percent of the
(1)  planning and design costs;
(3)  impact fees and permitting costs;
(4)  costs associated with flood mitigation, water
quality, and environmental controls; and
(5)  costs associated with infrastructure, including
roads, sidewalks, utilities, and broadband service.
(c)  Interest earned on money deposited to the fund may be
used by the program administrator for:
(1)  program staffing and other related costs
associated with administering the program; and
(2)  training programs associated with the purposes of
Sec. 2306.705.  APPLICATION REQUIREMENTS; PROGRAM RECIPIENT
SELECTION.  (a)  The department shall prescribe the form and manner
for an applicant to apply for a loan under the program.
(b)  An application must satisfy the requirements prescribed
by the department and demonstrate that the applicant:
(1)  is incorporated under this state's laws as a
(2)  is organized for the purpose of building
owner-occupied residential homes for households that earn between
30 and 80 percent of the area median income and has carried out that
purpose for not less than 15 years; and
(3)  has experience in providing training and technical
support, resource development, mortgage services, and disaster
preparedness and response resources that expand the applicant's
capacity to serve communities in this state.
(c)  The program administrator shall review applications and
select applicants to provide loans to under the program.  In
selecting applicants, the program administrator:
(1)  shall consider the quality of the application and
the applicant's ability to carry out the purposes of this
(2)  may give priority to applicants that partner with
organizations that provide training opportunities to construction
(d)  The program administrator may require an applicant to
pay an origination fee on a loan application.
Sec. 2306.706.  ANNUAL REPORT; INTERNET POSTING.  (a)  The
program administrator shall prepare and submit to the department an
annual report on the program.  The report must include:
(1)  information on the program recipients that
received a loan under the program during the preceding year;
(2)  a description of each workforce housing project
funded by a loan under the program, including:
(A)  the project's expected completion date and
information on the progress made during the preceding year toward
(B)  the number of families the project is
(C)  the total amount and repayment status of the
(3)  other information the department requires.
(b)  The department shall post on the department's Internet
website the information submitted to the department under this
Sec. 2306.707.  INDEPENDENT FINANCIAL AUDIT.  (a)  The
program administrator shall annually commission from a certified
public accounting firm an independent financial audit of the
program administrator's financial activities in relation to the
program and the use of money in the fund.  The program administrator
shall provide the results of the audit to the department for the
department's review and evaluation.
(b)  In the event the department determines from the results
of the audit that money from the fund has not been used in
accordance with the purposes of this subchapter, the department may
require repayment of the money over a period and in the manner the
Sec. 2306.708.  RULES.  The department shall adopt rules to
implement the program and carry out this subchapter, including
(1)  application procedures and requirements for an
applicant to receive a loan under the program;
(2)  the investment of money in the fund; and
(3)  the administration of the fund.
SECTION 3.  As soon as practicable after the effective date
of this Act, the Texas Department of Housing and Community Affairs
shall adopt rules to implement Subchapter EE, Chapter 2306,
Government Code, as added by this Act.
SECTION 4.  This Act takes effect September 1, 2025.