Sec. 162.011. LOANS. (a) The board shall make or acquire loans with money from the veterans' housing assistance fund in accordance with this chapter and the rules adopted by the board.

(b) To qualify for a loan under this chapter, a person must be a veteran at the time the person applies for the loan. If an eligible veteran dies after filing an application, the surviving spouse may complete the transaction.

(c) The final principal payment on any loan under this chapter shall be made not later than 40 years after the date of the loan. The board shall determine the maximum principal amount of loans to any veteran that may be outstanding at any time, except that amounts allocable to a home mortgage loan may not exceed the maximum amount allowable for a similar home mortgage loan through the United States Department of Veterans Affairs or any successor agency.

(d) The board shall obtain insurance covering at least 50 percent of all losses anticipated in connection with veteran payment defaults on loans secured by first or second mortgages, based upon the advice of one or more qualified consultants to the board as to potential losses which may be reasonably expected on the loans as determined by analysis, including but not limited to actual experience in the residential mortgage lending industry on similar types of mortgage loans, or, in the alternative, the board shall obtain insurance which shall insure repayment of at least 50 percent of the outstanding principal amount of all loans in the event of the nonpayment of the loans by the veterans.

(e) All fees to be charged to a veteran receiving a loan under this chapter must be approved by the board. The board may enter into contracts with lending institutions to assist in processing, originating, servicing, or administering loans under this chapter. Any fees and expenses incurred in connection with a loan, including the cost of insurance, may be charged to the veteran and made a part of the veteran's payments.

(f) The board may by rule determine, from time to time, the number of loans that a veteran may receive under this chapter.

Added by Acts 1983, 68th Leg., p. 547, ch. 115, Sec. 1. Amended by Acts 1985, 69th Leg., ch. 798, Sec. 21, eff. Sept. 1, 1985; Acts 1991, 72nd Leg., ch. 160, Sec. 3, eff. Aug. 26, 1991; Acts 1993, 73rd Leg., ch. 242, Sec. 2.07, eff. Aug. 30, 1993; Acts 1999, 76th Leg., ch. 133, Sec. 2, eff. May 20, 1999.