Ten years ago Senator Eddie Lucio (D-Brownsville) authored and passed legislation that has built hundreds of affordable homes in Texas, and has served as an example of what can be accomplished with inspiration, ingenuity, and modest state funding.
Most importantly it shows us that successful affordable housing programs recognize the dreams and aspirations of the poor and create a way to help them work to help themselves to realize their dreams.
This legislation — SB 1287 — established and created under Chapter 2306, Subchapter FF of the Texas Government Code, the Texas Bootstrap Loan Program. This initiative –administered by the Texas Department of Housing and Community Affairs (TDHCA) – was designed to promote and enhance homeownership opportunities for very low income Texans. SB 1287 required the Department to establish a new and innovative mortgage loan program.
Today, through this program, certified nonprofit organizations work alongside low-income Texas families to build simple, single-family homes the families can afford. The families contribute 60 percent of the “self-help” labor toward building a new home or rehabilitating an existing home that is broken and worn down by poverty. In exchange for this sweat equity families contribute, which dramatically drives down the cost of construction, the Department provides a zero-interest mortgage loan that families can afford.
The Texas Bootstrap Loan Program is required under the Texas Government Code, to make $3 million available through the Housing Trust Fund for mortgage loans to very low-income families (60% Area Median Family Income). The state loan cannot exceed $30,000 per home, and all combined loans including the state loan and other private sources cannot exceed $60,000 per home.
This year we supported, and the Texas Legislature enacted, changes to the Bootstrap program through SB 679 to allow the maximum loan to increase from $30,000 to $45,000 and the maximum value of the house to increase from $60,000 to $90,000. These changes are necessary to keep up with land and building material cost increases over the past decade.
The Housing Trust Fund makes up the state’s only funding for affordable homes. Of the far too meager funds the Legislature appropriates, the majority of the Housing Trust Fund has historically been set aside to allow the Bootstrap Program to flourish in the poorest parts of our state. The Department is required to set aside at least two-thirds of the $3 million for families whose property is located in an Economically Distressed Area Program (EDAP) counties.
Texans pride themselves on their ability to pull themselves up by their bootstraps in times of adversity. For ten years, the Bootstrap Program has illustrated this sentiment, becoming a national model of how with state support, even the lowest income families can pick up a hammer and nails and begin building a great asset: their home.
Since the inception of the Program, TDHCA has expended more than $20 million dollars and helped 859 families become home owners through this Program. The average annual household income of a participant under this Program is $18,340.
A decade ago, Senator Lucio championed the seemingly impossible: a program that allows the poorest among us to build a home, and to live out their lives in decency and with security. Perhaps this feat seems even more impossible today, as low and middle-income families across the nation are crippled under the weight of homes they cannot afford, and countless are facing foreclosure. Yet the Bootstrap Program shines on as an example of how state funding and legislative ingenuity can let the American Dream thrive, even in our poorest communities.
The Bootstrap Program builds. It builds homes. It builds hope. And it builds more investment in affordable homes. In the last 10 years, nonprofit organizations that have partnered with TDHCA through the Program have leveraged more than $20 million with other funding sources such as private lending institutions and units of local government for the Bootstrap Program. Considering that the Housing Trust Fund, which supports the Bootstrap Program, has historically only been funded at about $3 to $5 million per year, this is impressive.
As we celebrate the establishment of the Bootstrap Program, we should also be mindful of the vast potential for this program, which would be made possible by an increase in funding for the Housing Trust Fund.
Thank you to Senator Lucio and to the Legislature for supporting the Bootstrap Program and the Housing Trust Fund. Thanks to TDHCA and to the nonprofits that operate the program. But more importantly, thank you to all the hardworking families out there whose sheer determination to own a home has transformed lives and communities across the state. It it your hard work that has made this program such a remarkable success.