Module 1: Program foundations · 14 practice questions
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Reading
AYBR is not governed by one rulebook. It is governed by a statute, three groups of rules, a yearly notice, two contracts and a manual, and each one answers different questions. New staff lose hours looking in the wrong place. This lesson gives you a map: which document controls what, which parts of the big rule chapters matter for AYBR, what GCHS had to prove to become a Reservation System Participant (RSP), and where each kind of paper lives at GCHS.
The order of authority
The teaching order is the one in the figure: the Texas Government Code Chapter 2306, then the administrative rules, then the 2026 AYBR NOFA, then the RSP Agreement and the Household Assistance Contract (HAC), then the AYBR Program Manual (May 2025) and the forms. We use this as a teaching frame. In fact every one of them binds an Administrator: 10 TAC 26.23(c) requires Administrators to follow the processes and procedures the Department requires, and its list includes the statute, the rules, the reservation agreement, the Program Manual, the forms and the NOFA. The manual itself says it guides Administrators "in accordance with Title 10, Part 1 of the Texas Administrative Code" and supplements the NOFA.
So when do you use the order? Whenever two sources say different things. Teach the higher source and note the lower text. The manual, for example, is full of useful procedure, but it has a few places where it disagrees with the rule or with itself. Program Manual p10 says "ONE TIME 3 MONTH EXTENSION AMENDMENT," while p27 of the same manual describes a one-time 30-calendar-day extension. The rule, 10 TAC 26.24(h), lets the Executive Director's designee approve up to three months more term. Cite the rule, mention the manual text, and ask TDHCA before you rely on an extension. Lesson 3 returns to this.
Two more ground rules. First, reservations are "subject to the provisions of this chapter in effect as of the date of submission" (10 TAC 26.24(a)), and the NOFA says the same (section 1(c)). The rule you check is the one in force when you submit, not the one you read last year. Second, use the right edition of the manual. The current one says "Updated 5/2025" and states that it supersedes any previous manual. An older manual is stale; do not use it.
A simple way to look something up keeps you out of trouble:
For this year's dollar amounts, dates and limits, start with the 2026 AYBR NOFA.
For what you may or must do, find the section of Chapter 26, then Chapter 20 and Chapter 1, and read the exact subsection.
For how to do it step by step, use the Program Manual and the forms, and check that the manual's text does not conflict with the rule.
For deadlines and duties that belong to one household or to GCHS, read the HAC and the RSP Agreement.
Write down which source you used in the Activity File note or the email. A one-line citation such as "10 TAC 26.25(c)" saves a long conversation later.
Why this matters
An audit finding usually starts with a staff member following the manual where the rule says something stricter, or following an old edition. When you can say "10 TAC 26.27(d) says this, and the manual says this, and we followed the rule," you are defensible.
Chapter 26, Subchapter B, section by section
The AYBR rules are in 10 TAC Chapter 26, Subchapter B, sections 26.20 to 26.28, effective July 4, 2024. Every adopted title begins "Amy Young Barrier Removal Program." Section 26.21 also points to Chapters 1, 2, 20 and 21 and to Subchapter A.
Section
What it governs
Where we teach it
26.20 Purpose
One-time grants in combined Hard and Soft Costs
Lesson 1
26.21 Definitions
Low-Income, Project Costs, the 10 percent administrative fee
Lessons 1, 6, 9
26.22 Geographic Dispersion
Release of funds by subregion, region, then statewide
Lesson 3
26.23 Administrative Requirements
Who may be an Administrator and what the RSP application must show
This lesson
26.24 Reservation System Requirements
Order of processing, cure period, HAC term and amendments, RSP term
Lesson 3
26.25 Household Eligibility
Person with Disabilities, Low-Income, $25,000 liquid assets, state debt
Lesson 6
26.26 Property Eligibility
Owner-occupied and rental rules
Lesson 6
26.27 Construction Requirements
Inspections, codes, hazard caps, bids
Lessons 8 and 9
26.28 Project Completion Requirements
Finishing the work and drawing funds
Lesson 11
The five tiers are all binding, but when they differ you cite and teach the higher tier first.
Chapter 20 fills the gaps, with exceptions
Chapter 20 is the general single family chapter. Section 20.2(a) says it applies only to single family programs, and where a program rule "is less restrictive," Chapter 20 governs. Section 20.1 lists the Texas HTF among those programs. For AYBR, the Chapter 20 sections you will meet are 20.3 (definitions, including Persons with Disabilities), 20.7 (property taxes and liens), 20.8 (fair housing), 20.14 (monitoring) and 20.15 (appeals).
Two exceptions matter. First, section 20.9, the construction inspection section, applies to all construction "except for the Amy Young Barrier Removal Program, to the extent funded with Texas HTF" (20.9(a)). AYBR inspection rules are in 26.27(a) and the manual, not in 20.9. Second, 20.8(c) and (d), the waitlist policy and the Affirmative Fair Housing Marketing Plan (AFHMP), say "An Administrator receiving Federal funds." AYBR money is state money, so as written they are not required. Whether they reach an Administrator that also holds federal funds under another Department contract is an open question. Lesson 4 explains what to do in the meantime.
The Chapter 1 and Chapter 21 pieces
1.402, cost principles. Use the Texas Grant Management Standards (TxGMS) or UGMS, keep separation of duties, and note that organizations with fewer than five paid employees must show sufficient controls. Watch the trap: 1.402(a) exempts the National Housing Trust Fund from TxGMS, not the Texas HTF. AYBR is Texas HTF, and the NOFA lists TxGMS.
1.403, single audit. Required at $1,000,000 or more in federal and/or state awards for fiscal years starting on or after October 1, 2024. The Audit Certification Form is due within two months after the end of the fiscal year (1.403(d)). The report is due by the earlier of 30 days after the auditor's report or nine months after year end (1.403(e)). The manual (p31) says 60 days and nine months.
1.406, fidelity bond. See the onboarding list below.
1.409, records (Lesson 7) and 1.410, alien status (next section).
1.7, appeals of Department staff decisions, 1.17 alternative dispute resolution, 1.2 complaints, and 1.204 reasonable accommodation (Lessons 4 and 5).
1.302 and 1.303, previous participation. The RSP application includes a Uniform Previous Participation Form covering three years.
Chapter 21, energy. 10 TAC 26.27(c)(3) says Administrators must adhere to Chapter 21, and the manual names Rule 21.6 for housing rehabilitation. Lesson 8 covers it.
Citizenship verification: what the sources say
This is a question where the sources do not give one clean answer, so teach it as open. Section 1.410 (effective September 26, 2024) treats State Housing Trust Funds given to a subrecipient that is a public organization, or acting for one, and distributed directly to individuals as a state public benefit. If no exemption applies, the subrecipient must verify citizen, national or qualified-alien status using SAVE (1.410(e)). A nonprofit charitable organization is exempt where a federal program requires it (1.410(f)(1)), and the Department may add duties in the contract (1.410(g)). The 2026 NOFA says Administrators "may also be required to verify" status. Neither the Program Manual nor the RSP application contains a verification step.
GCHS procedure: GCHS elected SAVE Option 1, which means GCHS verifies citizenship or qualified-alien status itself through SAVE, and GCHS's designated SAVE Supervisor runs it. ("Option 1" is GCHS's own election; the lettered options in 10 TAC 1.410(f)(2) are written for other Department programs.) Follow that election, keep the documents only in the Restricted library, and ask TDHCA in writing when a case is unclear. Lesson 6 shows where the step fits in eligibility.
RSP onboarding items that must stay current
To become an RSP, GCHS submitted an application with these items (Reservation System Access Application, February 2026, and 10 TAC 26.23(b)):
A Board or Council resolution, signed within six months, naming the person who signs.
The Uniform Previous Participation Form, covering three years.
A summary of at least two years of housing rehabilitation experience in Texas.
Qualified Inspector Certification form(s).
An audited financial statement, or a board resolution on accounting procedures signed within six months.
A fidelity bond, for non-governmental Administrators.
A same-day wire memo on letterhead, within six months, and the AP-152 Payee ID form.
The Language Access Plan (Lesson 4).
The 501(c)(3) determination letter. A pending application "cannot be used to comply with the tax status requirement."
Consultant contracts, if any.
The rule adds good standing with the Secretary of State and the Comptroller (26.23(b)(2)), and says IRS exemption "must be effective throughout the term of the RSP Agreement" (26.23(b)(1)). That last point is a continuing duty. Staff should never treat the application as a one-time hurdle.
Four items need a calendar. The IRS exemption must stay effective all term. Good standing can be lost: if audits or Audit Certification Forms are past due, access to the Reservation System is suspended and may lead to termination (26.24(c); manual p17). The fidelity bond has two figures in the sources: the application says at least the greater of $50,000 or 10 percent of total funds reserved, while 1.406(2) sets a default of at least 5 percent of the contract amount when the contract does not prescribe an amount. The application and the contract amount govern. The RSP term is the lesser of 36 months or the term limit in the NOFA, and signing the agreement "does not guarantee the availability of funds" (26.24(a)).
After approval, the manual lists four more items: the RSP Agreement, the Audit Certification Form, the Same-Day Wire Transfer Information Memo and the Contract Reservation System Access Form, which lists the staff authorized to use the system (Program Manual p5).
Where each document lives at GCHS (GCHS procedure)
Applicant records, meaning Social Security numbers, income documents and citizenship documents, live only in the GCHS Restricted SharePoint library. Program forms, policies and templates live in the shared AYBR Working-Files folder. The Program File that the manual requires holds the NOFA, the agreement and amendments, the accounting records, the policies and the marketing records. When you are unsure where something goes, ask yourself whether it identifies one applicant. If it does, it belongs in the Restricted library and in that applicant's Activity File.
A worked example
A new administrative assistant, Priya (made-up), is checking a made-up applicant's file and finds that the household's property taxes were delinquent when the application was signed in March, but were paid in full in June, before the HAC was issued. Rule 20.7(b) and (c) tie the tax and lien tests to a date "prior to" the effective date of the grant agreement. The Program Manual (p12) ties them to the date of the application. Which date does she use? The two are not in direct conflict. The rule sets the last date, the HAC. The manual sets an earlier checkpoint, the application date, and the manual also binds an Administrator (10 TAC 26.23(c)). Following the earlier date satisfies both, so GCHS teaches it as the safe practice. Priya does not put this household forward on its March application. She records the reason in the Activity File, checks the three installment and deferral exceptions in 20.7(b), and asks TDHCA in writing how it wants a household that paid up after applying to be handled. Lesson 6 treats the right date as an open question for the Department.
Practice questions
1. Program Manual p27 describes a one-time 30-calendar-day extension, but 10 TAC 26.24(h) lets the Executive Director's designee extend the HAC term up to three months. Which approach does this course teach?
Follow the manual, because it was updated in May 2025 and is the more recent of the two documents involved
Follow whichever number is shorter, so the household cannot say GCHS held its HAC open too long
Cite the rule first, note the manual text, and ask TDHCA in writing before relying on an extension
Treat the manual as controlling, because it is procedure written specifically for Administrators
Answer: c. The order of authority puts rules above the manual (10 TAC 26.23(c); Program Manual p4). Program Manual p10 says three months and p27 says 30 days, so the manual conflicts with itself. This is an open item.
2. Which list puts the AYBR documents in the correct order of authority, highest first?
Government Code Chapter 2306, the administrative rules, the NOFA, the RSP Agreement and HAC, then the Program Manual and forms
The Program Manual and forms, the NOFA, the administrative rules, the RSP Agreement and HAC, then Government Code Chapter 2306 last
The NOFA, the Program Manual and forms, Government Code Chapter 2306, the administrative rules, then the RSP Agreement and HAC
The RSP Agreement and HAC, the NOFA, the administrative rules, Government Code Chapter 2306, then the Program Manual and forms
Answer: a. Teaching frame built from 10 TAC 26.23(c) and Program Manual p4. All five are binding; the ranking tells you which to teach when they differ.
3. A Reservation is submitted in October. The rule is amended the following spring. Which version of the rule applies to that Reservation?
The newest amendment, applied to all open reservations
The version in effect when the HAC is fully executed
The version in effect when the RSP Agreement was signed
The provisions in effect on the date of submission
Answer: d. 10 TAC 26.24(a) and 2026 AYBR NOFA section 1(c): "rules in effect at the time of submission of a Reservation."
4. A staff member plans to cite 10 TAC 20.9(g) as the required AYBR inspector standard. What is wrong with that?
Section 20.9 applies only to federally funded construction, and AYBR is partly federal, so the HUD inspector standard governs instead
Section 20.9(a) excludes the Amy Young Barrier Removal Program, so AYBR inspection rules are in 26.27(a) and the manual
Section 20.9(g) was repealed when the AYBR rules took effect on July 4, 2024, so there is no inspector standard at all
Section 20.9 applies to AYBR, but only to the final inspection and not to the initial inspection or work write-up
Answer: b. 10 TAC 20.9(a): the section applies to all construction "except for the Amy Young Barrier Removal Program." Program Manual p22 to p23 says AYBR is "specifically excluded."
5. A coworker says AYBR must use a 21-day acceptance period and random selection because 10 TAC 20.8(c) requires it. What is the best response?
As written, 20.8(c) and (d) apply to Administrators receiving federal funds; AYBR is state money, though the effect on an Administrator with other federal contracts is an open question
20.8(c) and (d) apply to every Administrator in every program
They apply only in rural counties
They apply to AYBR but only for households over a set income
Answer: a. 10 TAC 20.8(c): "An Administrator receiving Federal funds must have a Waitlist Policy"; 20.8(d) is similar for the AFHMP. 20.8(a), (b) and (f) to (j) do apply to AYBR.
6. A coworker says AYBR is exempt from TxGMS cost principles because 10 TAC 1.402(a) exempts the Housing Trust Fund. What is the problem?
The exemption applies only to loan programs and not to grants, and AYBR is a one-time grant made directly to households
The exemption expired on October 1, 2024 when the new single audit threshold took effect for Administrators
The exemption names the National Housing Trust Fund, not the Texas HTF that pays for AYBR, and the NOFA lists TxGMS
The exemption applies only to Administrators with five or more paid employees, and GCHS has fewer than that
Answer: c. 10 TAC 1.402(a) and 2026 AYBR NOFA p1. Also note 1.402(c): organizations with fewer than five paid employees must show sufficient controls.
7. Under 10 TAC 1.403, when is a single audit required, and when is the Audit Certification Form due?
At $500,000 in federal awards only; the form is due with the audit report
At $1,000,000 or more in federal and/or state awards for fiscal years starting on or after October 1, 2024; the form is due within two months after fiscal year end
At $1,000,000 in federal awards only; the form is due within nine months
At any award over $25,000; the form is due 30 days after fiscal year end
Answer: b. 10 TAC 1.403(d) and (e); Program Manual p31 (which says 60 days and nine months). The report is due by the earlier of 30 days after the auditor's report or nine months after year end.
8. The RSP application says a fidelity bond must be at least the greater of $50,000 or 10 percent of total funds reserved, while 10 TAC 1.406(2) gives a 5 percent default. Which governs?
The 5 percent figure always governs, because a rule outranks any application form or contract amount
The $50,000 figure governs only for governmental Administrators, who are the only ones that must carry a bond
Neither figure governs until the Administrator submits its first draw package to the Department
The application and contract amount govern; 5 percent is only a default when the contract sets no amount
Answer: d. Reservation System Access Application pp3 to 4 and 10 TAC 1.406(2), which sets a 5 percent minimum when the bond amount "is not prescribed in the contract."
9. A new hire asks whether GCHS must verify an applicant's citizenship or qualified-alien status. What does this course teach?
The manual and application have no verification step, 10 TAC 1.410 and the NOFA say it may be required, so GCHS follows its SAVE Option 1 election and asks TDHCA when unsure
It is never required of nonprofits, so GCHS skips it
It is always required, and the manual lists the exact form
It is required only for rental applicants
Answer: a. 10 TAC 1.410(d) to (h) and NOFA pp1 to 2. Whether a private nonprofit must verify is a reading, not a settled answer, so this is an open item. GCHS procedure: SAVE Option 1.
10. For how long must GCHS's IRS tax-exempt status stay effective?
Only on the day the application is submitted
Until the first Reservation is approved
Throughout the term of the RSP Agreement
Until the first draw is paid
Answer: c. 10 TAC 26.23(b)(1): exemption "must be effective throughout the term of the RSP Agreement." A pending determination letter cannot satisfy the requirement (Reservation System Access Application).
11. What is the RSP term under 10 TAC 26.24(a)?
Exactly 36 months, with a guarantee that the Administrator will receive at least one Reservation
The same as the HAC term, up to 12 months from full execution, renewable once by amendment
Five years, matching the records-retention period, unless the NOFA sets a shorter limit
The lesser of 36 months or the NOFA term limit; the agreement does not guarantee funds
Answer: d. 10 TAC 26.24(a): "lesser of 36 months, or the term limitation defined in the NOFA"; execution "does not guarantee the availability of funds."
12. Which pair of RSP application items must be dated or signed within six months of the application?
The AP-152 Payee ID form and the Language Access Plan, which must both be re-signed every six months
The Board resolution naming the signer and the same-day wire memo
The Uniform Previous Participation Form and the 501(c)(3) determination letter, both dated within six months
The Qualified Inspector Certification form and the fidelity bond, both issued within six months
Answer: b. Reservation System Access Application pp2 to 5 and 10 TAC 26.23(b). The Uniform Previous Participation Form covers three years, which is a different period.
13. Where does GCHS keep a household's pay stubs and citizenship documents?
In the shared AYBR Working-Files folder, next to the blank forms and policies the whole team uses
In the staff member's email folder for that applicant, so it is easy to find during the next review
Only in the Restricted SharePoint library, in that applicant's Activity File
On a local computer, with a backup copy on a USB drive kept in the staff member's desk
Answer: c. GCHS procedure. Applicant records live only in the Restricted library; program forms and policies live in the AYBR Working-Files folder. 10 TAC 1.409(a) requires privacy and secure storage.
14. Taxes on an applicant's home were delinquent on the application date and were paid in full before the HAC. Rule 20.7(b) measures to the effective date of the grant agreement, and the manual (p12) measures to the application date. What does GCHS teach?
Treat the manual's earlier application date as the safe test, record the issue in the Activity File, and ask TDHCA in writing before putting the household forward
Use the later HAC date and disregard the manual, because the rule outranks the manual and the taxes were paid before the HAC
Use whichever of the two dates helps the household qualify, and then note which date was chosen in the Activity File
Ignore the date entirely, because a delinquency that is later paid in full can always be cured
Answer: a. 10 TAC 20.7(b) and Program Manual p12. Both bind an Administrator (10 TAC 26.23(c)) and the earlier date satisfies both. TDHCA has not said which date it applies, so this is an open item (Lesson 6). The installment and deferral exceptions are in 20.7(b).
Glossary
Chapter 2306
The Texas Government Code chapter on the Department, the top tier of authority for AYBR.
10 TAC 26.20 to 26.28
The adopted AYBR rules, Subchapter B of Chapter 26, effective July 4, 2024.
NOFA
Notice of Funding Availability; the 2026 AYBR NOFA sets yearly amounts, dates and limits.
RSP Agreement
The contract that makes GCHS a Reservation System Participant; it does not guarantee funds.
HAC
Household Assistance Contract, issued for each household project.
Program Manual
The Updated 5/2025 AYBR manual, which supplements the rules but yields to them.
TxGMS
Texas Grant Management Standards, the cost principles that 10 TAC 1.402 requires.
Single audit
An audit required at $1,000,000 or more in federal and/or state awards (10 TAC 1.403).
Fidelity bond
Insurance against employee theft required of non-governmental Administrators; amount set by the application and contract.
SAVE
The federal system used to verify citizenship or qualified-alien status; GCHS elected Option 1.
Restricted library
The GCHS SharePoint library where applicant records such as SSNs and income documents live.
AFHMP
Affirmative Fair Housing Marketing Plan, required by 20.8(d) only of Administrators receiving federal funds.