Housing Assistance Council

Model Loan Program Provides Housing Financing to Colonia Residents

Tejas Community Credit Opportunity, Inc. (Tejas) is a regional nonprofit organization which was organized for the purpose of serving the needs of people living in colonia communities in the US/Mexico border region, which has experienced tremendous economic and population growth recently while at the same time being home to some of the worst living conditions in the United States.

Tejas, in collaboration with a number of housing service providers who are active in colonias communities and with national intermediary organizations, has developed a model loan program to provide housing financing to colonia residents. This model would provide new construction and rehabilitation loans to families, with the goals of (1) providing decent, safe and affordable housing to colonia residents; and (2) assisting residents in acquiring the skills and tools necessary to graduate to mainstream financial markets. The loan program will enable colonia residents to establish positive credit histories and eventually become successful borrowers from commercial lenders. Tejas will be the depository institution for this loan program, with the goal of providing services border-wide as a truly regional CDFI.

• HAC's Capacity Building Initiatives
• Partnerships in Action

• National Office
• Midwest Regional Office
• Southest Regional Office
• Southwest Regional Office
• Western Regional Office

HAC has provided technical assistance and support to the Board and staff of Tejas to establish the organization. Tejas, has since evolved into an opportunity for several Lower Rio Grande Valley housing organizations to work together towards a shared and mutual goal, that of providing housing opportunities to low and very-low income Colonia families. Tejas, CDC of South Texas, and McAllen Affordable Homes have joined together in partnership to utilize Rural Housing and Economic Development (RHED) grant funds through Tejas and provide affordable housing finance for low-income families with CDC of South Texas as developer and McAllen Affordable Homes as servicing agent.

The current financing model utilizes Tejas RHED funding, resulting in lower interest rates, currently four percent, and varying options for secondary market sales or refinance after year ten of a twenty year loan.