(a) The department may establish the minimum amount of a loan under this subchapter, but a loan made by the department may not exceed $45,000.
(b) If it is not possible for an owner-builder to purchase necessary real property and build or rehabilitate adequate housing for $45,000, the owner-builder must obtain the amount necessary that exceeds $45,000 from other sources of funds.
(c) A loan made by the department under this subchapter:
(1) may not exceed a term of 30 years;
(2) may bear interest at a fixed rate of not more than three percent or bear interest in the following manner:
(A) no interest for the first two years of the loan;
(B) beginning with the second anniversary of the date the loan was made, interest at the rate of one percent a year;
(C) beginning on the third anniversary of the date the loan was made and ending on the sixth anniversary of the date the loan was made, interest at a rate that is one percent greater than the rate borne in the preceding year; and
(D) beginning on the sixth anniversary of the date the loan was made and continuing through the remainder of the loan term, interest at the rate of five percent; and
(3) shall be secured by:
(A) a first lien by the department on the real property if the loan is the largest amortized, repayable loan secured by the real property; or
(B) a co-first lien or subordinate lien as determined by department rule, if the loan is not the largest loan as described by Paragraph (A).
(d) If an owner-builder is purchasing real property under a contract for deed, the department may not disburse any portion of a loan made under this subchapter until the owner-builder:
(1) fully completes the owner-builder's obligation under the contract and receives a deed to the property; or
(2) refinances the owner-builder's obligation under the contract and converts the obligation to a note secured by a deed of trust.