(a) A principal or stockholder of a housing sponsor may not earn, accept, or receive a per annum return on an investment in a housing development financed by the department greater than that allowed by department rule.
(b) A housing sponsor’s equity in a housing development is the difference between the mortgage loan and the total housing development cost.

Terms Used In Texas Government Code 2306.272

  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Rule: includes regulation. See Texas Government Code 311.005

(c) The department shall establish a housing sponsor’s equity when the final mortgage advance is made.
(d) For the purposes of this section, the amount established under Subsection (c) remains constant during the life of the department’s mortgage on the development, except for additional equity investment made by the sponsor with the department’s approval or at its order.
(e) In this section, “housing development costs” has the meaning assigned by § 2306.271(d).

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