Lesson 3: The Reservation System and the four stages

Reading

Every AYBR dollar moves through one online tool, the Reservation System, and every household project moves through the same four stages inside it. If you know the stages, what each one needs, and which clocks are running, you can tell at any moment where a project stands and what could go wrong. This lesson is the map of that journey. The detail of each stage comes in later lessons.

The four stages and the HAC

Stage 0 is onboarding: becoming an RSP, which Lesson 2 covered. After that, each household project has four stages with a contract in the middle. The Department reviews each stage, and you should not start a stage until the Department approves the one before.

In the system you enter household information and budget detail, then upload the "Reservation Setup Documents" (HTF Reservation System User Guide pp7 to 12). Each document is its own PDF, one PDF per document, under 10MB. After you submit, the data "cannot be edited without contacting HTF staff," so check it before you click. The setup then shows "Pending PM Approval." Login names are not to be shared; the Contract Reservation System Access Form lists who is authorized (Program Manual p17).

Order, no guarantee, and the stage rule

Two sentences in 10 TAC 26.24(d) set expectations for everyone. Reservations "will be processed in the order submitted on the Reservation System," and submission "does not guarantee funding." The NOFA repeats it: participation "is not a guarantee of funding availability" (section 5(j)). A household that is eligible may still find that the money is gone. Tell applicants this early and in writing.

Rule 26.24(e) adds that all stages must be completed on or before the expiration of the HAC. That is why the stage rule matters. A delay at Stage 2 uses up time that Stage 4 needs.

Review time and the cure period

There are two different 14-day numbers, and people mix them up.

• The review target. The manual says the Department "will attempt to review" each stage within 14 calendar days (Program Manual p18, p19, p24, p27). It is a target stated in the manual. The rule sets no review time. Never tell a household or a contractor that approval is guaranteed in 14 days.
• The cure period. This one is in the rule. A request that is substantially incomplete will not be reviewed. For an administrative deficiency, the Administrator gets "a cure period of 14 calendar days," counted from the first day after the Administrator is notified (10 TAC 26.24(f)). After that the Department may disapprove the request, and a disapproved request "shall not constitute a Reservation of Funds." The manual says a Stage 1 request may be disapproved and a request at Stages 2 to 4 may be cancelled, and that the reservation "may be resubmitted if funding permits."

The HAC term and amendments

After Stage 1 approval the Department issues the HAC through DocuSign. It reflects the maximum award permitted under the NOFA in Project Costs plus an administrative fee of 10 percent of the combined Hard and Soft Costs, "funding permitting" (10 TAC 26.24(g)). The term "may not exceed 12 months unless amended," and the manual says the timeline begins when the HAC is fully executed. The adopted rule has no 90-day clock from bid approval and no automatic 30-day extension, so do not use either number as law. Always read the expiration date on the HAC itself.

Amendments are how you handle delays. The Executive Director's designee may approve up to three months more term, up to three months more draw period, or more Project funds (26.24(h)). The Executive Director may approve other amendments, except extending the term by more than 12 months (26.24(i)). The manual is inconsistent here: p10 says "ONE TIME 3 MONTH EXTENSION AMENDMENT," while p27 describes a one-time 30-calendar-day extension. Treat the extension limit as an open item. Ask early, ask in writing, and ask before the HAC expires.

The manual's request procedure is a letter on the Administrator's letterhead, signed by the Administrator's executive director, and sent (electronic is fine) to the Single Family and Homelessness Programs Director.

One more date belongs on your calendar from day one. The draw request must be submitted not more than 60 calendar days after the HAC expires (10 TAC 26.28(a)). Lesson 11 shows what goes in it.

When the money is released

Funds are released in waves so that every part of the state has a chance. The rule sets the limits (10 TAC 26.22(a)): an initial period of not less than 30 days by rural and urban subregion, a regional period not to exceed 90 calendar days, and then statewide first-come, first-served no more than 180 calendar days after the initial release. Added funds, such as repayments, interest or deobligations, may be reprogrammed at the Department's discretion (26.22(b)). The manual's wording on this (p17) does not match the rule. Follow the rule and the NOFA.

The big date for 2026 is this: funds not reserved on or before Friday, November 27, 2026, at 5:00 p.m. Central Time may be reprogrammed (NOFA section 5(f)). The NOFA also says the Department may reprogram at any time (5(g)), and that Reservations may be submitted at any time during the RSP term while funds are available (5(j)). In the added-funds phase, "Closed and canceled activities shall not constitute a Reservation," so they do not count against the fifteen. For the reservation limit in any other phase, read the current NOFA, because the rule leaves the count to the NOFA (26.24(b)).

The Hard and Soft split at the maximum

When you reserve the full $22,500, the system defaults to Hard Costs of $20,455 and Soft Costs of $2,045 (User Guide p7 and p10; Program Manual p9). Soft Costs cannot exceed 10 percent of Hard Costs, which is why you divide the total by 11, not by 10. If you draw less than you reserved, the Soft Costs you request must not exceed 10 percent of the Hard Costs you request (User Guide p10 and p18). Reserve the full amount only when the job needs it.

Before you press submit

Most cure notices come from a handful of avoidable problems, and several are about dates. A Certification of Disability must not be more than 12 months old on the date of Reservation System submission, and income support documents must be not more than 180 days old on that date (Program Manual p13). A document that was current when the applicant handed it over can expire while you wait. Check the date on every document the day you upload, not the day you receive it.

Also confirm that each document is its own PDF under 10MB, that signatures and dates are complete (the manual says to strike through and initial, never use correction fluid), and that the budget in the system matches the paperwork. Before reserving for the first time, the manual expects you to have reviewed the Program Rules, the RSP Agreement, the HAC, the NOFA and the manual (Program Manual p17).

Planning backward from the HAC

The HAC term is one long clock that all four stages share, so plan backward. If the Department meets its 14-day target, Stages 2 and 3 alone use about four weeks of the term before construction can begin, and every cure period or amendment request adds to that. Construction must finish before the HAC expires, and the draw follows within 60 calendar days. A project that sits for six weeks waiting on one missing signature is a project that may not finish. Build float into every schedule, and put the HAC expiration date, the day-60 draw date and any cure deadline on a shared calendar the day each becomes known.

Staying in good standing

Your access to the system depends on GCHS's own compliance. If participation is out of good standing, it "will be suspended and may result in termination" (10 TAC 26.24(c)). The manual is specific: no access until past-due audits or Audit Certification Forms are submitted "with no unresolved findings" (Program Manual p17). That is why Lesson 2's audit calendar belongs to the reservation team, not just to the accountant.

Reading the status labels

The system tells you where each project stands. After submission, Stage 1 shows "Pending PM Approval." Later stages show labels such as "Pending Stage 2 Documents / Approval." Treat a label as a to-do for either you or the Department. If the label says documents are pending and you have not uploaded them, the Department is not the one holding things up. The Department commits administrative funds only after the HAC is fully executed (Program Manual p18), so a HAC that sits unsigned delays both the project and the fee.

A worked example

On Monday, October 5, 2026, GCHS submits a Stage 1 request for a made-up household. The Household Income Certification is missing a page. On Monday, October 12, the Department notifies GCHS of the deficiency. The cure period counts from the first day after notice, so Tuesday, October 13 is day 1 and Monday, October 26 is day 14. GCHS uploads the corrected certification on October 20 and the request moves forward. Had it missed October 26, the Department could have disapproved the request, and GCHS would have had to resubmit, and only if funds remained. The household would have been placed behind every other Reservation filed in the meantime. A calendar entry on the day of the notice, with the day 14 date in the title, is the cheapest insurance in the program.

Practice questions

Glossary

Reservation System

TDHCA's online system, also called the Housing Contract System, where stages are submitted and reviewed.

Reservation

A request that sets aside funds for one eligible Household; it is not a guarantee of funding.

Stage 1

Reservation setup: the intake, disability, income and property documents are uploaded.

HAC term

Up to 12 months from full execution unless amended; all stages must finish within it.

Cure period

The 14 calendar days to fix an administrative deficiency after the Administrator is notified.

Review target

The Department's stated aim, in the manual, of reviewing each stage within 14 calendar days.

Amendment

A written change to the HAC, such as up to three more months of term or draw period.

Geographic dispersion

Releasing funds first by subregion, then by region, then statewide.

Reprogram

To move unreserved or returned funds to other uses at the Department's discretion.

OSSF

On-site sewage facility, meaning a septic system; its inspection report is uploaded at Stage 2.