AYBR Program Administration
Money is where many program mistakes begin, and it is also where they are easiest to prevent. This lesson shows how the grant is split, how to price a job, and how to buy the work in a way the Department will accept. Lesson 8 ended with an approved work write-up. Everything here happens after that and before any contractor starts work.
Each household can receive a one-time grant of up to $22,500 in combined Hard and Soft Costs. The 2026 AYBR NOFA sets that limit, and the Program Manual repeats it. The rule leaves the number to the NOFA, so the NOFA is where you check it each year.
The administrative fee is separate. Under 10 TAC 26.21 and the Program Manual, the fee is 10 percent of the Project Costs (Hard plus Soft) and it is paid "in addition to the grant amount." The most the fee can be on a full $22,500 project is $2,250. The fee is figured on what you actually draw, not on what you reserved. GCHS charges applicants no fees of any kind (GCHS procedure).
The rule defines Hard Costs as site-specific costs incurred during construction, including permits, a jobsite toilet, a dumpster, demolition, materials and labor. Soft Costs are costs related to a specific unit that are other than construction costs. The Program Manual gives examples, and the table below sorts the common ones.
| Cost | Category | Note |
|---|---|---|
| Permits, jobsite toilet, dumpster | Hard | Named in the rule's definition |
| Demolition, materials, labor | Hard | Part of the construction contract |
| Administrator staff or consultant time with the household | Soft | Document it in the Activity File |
| Administrator staff mileage | Soft | Claimed on the Soft Cost invoice |
| Consultant mileage | Not a Soft Cost | The manual excludes it |
| Septic inspection, lead testing | Soft | Manual examples |
| Contracting out the inspection or the work write-up | Soft | Manual, page 23 |
Soft Costs are optional. If you use them, they cannot exceed 10 percent of Hard Costs. The quick way to find the ceiling on a reservation is to divide the total by 11. At the maximum that gives Hard Costs of $20,455 and Soft Costs of $2,045 (the manual shows the exact Soft figure as $2,045.45). Soft Costs are claimed on the Activity Soft Cost Invoice and supported by documents in the Activity File.
When a final draw is smaller than the reservation, the test follows the draw: the Soft Costs you request must not exceed 10 percent of the Hard Costs you request. Check the numbers yourself before you submit.
Why this matters
The Department enters the administrative fee when the reservation is set up, but it pays only on what you actually draw. Reserving $22,500 for a $17,000 job does not create a $2,250 fee. Staff who assume it does will promise a number the final draw cannot deliver.
Ms. Delgado (a made-up household) lives in a 1962 owner-occupied house in Montgomery County. Her inspection calls for a roll-in shower, grab bars and a wider bathroom door. GCHS reserved the full $22,500: Hard $20,455 and Soft $2,045.
The Hard Costs figure also drives the hazard caps from Lesson 8. The sources do not say whether the caps use the reserved Hard Costs or a smaller final contract, so the cautious practice is to use the lower figure. Twenty-five percent of $17,600 is $4,400, and the 40 percent combined ceiling is $7,040. Sizing the caps on the reserved $20,455 instead would allow $5,113.75 and $8,182, which could overspend on hazards without anyone noticing.
The Program Manual says all Administrators must establish written procurement policies, and Lesson 5 listed it among the policies to adopt before taking applications. The policy must follow the Chapter 1 cost principles (10 TAC 1.402 requires TxGMS or UGMS). The manual also points to Local Government Code 262.003(a) for counties, 252.021(a) for cities, Government Code Chapter 2254 for professional services, and TxGMS. Its rule of thumb is that Administrators must meet the most stringent procurement requirement that applies to them.
The manual lays out the sequence. The Administrator, not the household or the contractor, runs it.
Notice what is missing: a number of bids. No rule, manual page or NOFA sets one. The manual says "multiple." Follow your written policy and any stricter law that applies to you, and write the number you use into the policy so you can show it later.
You solicit bids only after the Department has reviewed the work write-up and cost estimate (10 TAC 26.27(e)). Soliciting early means pricing a scope that may change.
10 TAC 26.27(f) says "Lump sum bids will not be accepted." The manual adds that lump-sum quotes and bids will be rejected and that zero-line items are not acceptable. The reasons are practical. Line items give the Department something to review, give you a price basis for change orders, and give future estimators real unit costs. Give contractors a bid form built from the approved write-up so every bidder prices the same lines.
Suppose GCHS's policy calls for three line-item bids on the Delgado bathroom (the AYBR documents set no number, so this is the policy talking). The independent cost estimate comes in at $17,900. The bids arrive as follows.
Contractor C is out before price is discussed, because a zero-line item is not acceptable. Contractor B is complete but above the estimate. Contractor A is complete and a little under the estimate, so A is the natural selection. The point is not the arithmetic. The point is the file: it should show the three bids, the estimate, the comparison and the reason for the choice. That comparison is how you show the price is reasonable. The documents give no percentage that makes a bid "too high," so if you want a trigger for re-soliciting, state it in your policy. For anything else, check the current Program Manual.
The manual offers a pre-qualification checklist as an example, not a rule: years of residential rehabilitation experience, registration with the Secretary of State and Comptroller, general liability and workers' compensation certificates, EPA lead (RRP) certification, financial strength to carry the job without prepayment, and references. Pre-bid site visits are an optional best practice.
On debarment, the NOFA and the manual both tell Applicants to familiarize themselves with the Department's certification and debarment policies, and 10 TAC 20.6(b)(2) says an Applicant debarred by HUD or the Department may be ineligible. The sources do not give a step-by-step contractor check, so build one into your policy and keep a dated record of it in the file. That is good practice, not a TDHCA requirement.
Independence matters as much as price. GCHS provides inspection, estimating and construction management, not hands-on repair labor. GCHS staff who inspect or estimate a job never bid on it, and the contractors are independent firms (GCHS procedure). The manual goes further for outside help: an inspector, and any specialist who helps, must be excluded from consideration as a contractor on that activity.
Stage 3 is the procurement review. You upload the selected line-item quote or bid, signed by the Head of Household and the Contractor, with the construction contract and its checklist. The Department aims to review within 14 calendar days, and an administrative deficiency has the usual 14-day cure period. Do not let the contractor begin until the Department tells you to proceed. Lesson 10 covers that step. Treat the 14 days as a planning figure, not a promise: the manual says the Department "will attempt" to meet it, and the rule sets no review time at all.
Suppose the lowest line-item bid exceeds the money reserved and the scope includes hazard repairs. You cannot trim the hazard work to fit. The manual says hazard work may not be deleted because of budget limitations or lack of applicant consent. You must commit supplemental funding or risk cancellation, and sometimes the right answer is the walk-away policy you adopted in Lesson 5, with a written notice to the household.
A quick illustration: the lowest complete bid on another job is $21,300 against $20,455 of reserved Hard Costs, a gap of $845, and the scope includes an unsafe electrical panel. The panel stays in. GCHS either commits $845 of its own supplemental funding or follows its walk-away policy and tells the household in writing. Quietly trimming the panel from the scope is not an option, and GCHS charges applicants no fees, so the gap does not go to the household (GCHS procedure).
Keep the written procurement policy in the Program File, in the section for procurement and eligibility policies, and keep each household's bids, estimate comparison and signed Stage 3 documents in that household's Activity File. At GCHS, program forms and policies sit in the shared AYBR Working-Files folder. Anything holding a Social Security number, income detail or citizenship document stays in the GCHS Restricted SharePoint library and never goes into the shared folder (GCHS procedure).
These are teaching examples drawn from the requirements, not TDHCA findings data.
1. Under the 2026 NOFA, what is the most that can be spent on one household's Project Costs, and where does the administrative fee fall?
2. A household is reserved at the $22,500 maximum. What are the default Hard and Soft Cost amounts?
3. Which of these is a Soft Cost under the Program Manual?
4. GCHS reserved $22,500, but the final draw is Hard Costs of $17,000 and Soft Costs of $1,500. What is the administrative fee?
5. A final draw requests Hard Costs of $16,400. What is the most Soft Costs that can be requested with it?
6. A contractor's bid gives one lump-sum price for a bathroom modification plus a line showing $0 for debris haul-off. What should GCHS do?
7. When may GCHS solicit bids for a household's work?
8. How many bids must GCHS collect for each job?
9. Which statement about the written procurement policy is correct?
10. An outside specialist who helped the inspector evaluate a problem and recommend a fix on the Alvarez household's job asks to bid as the contractor on that same job. What is the answer?
11. What do the AYBR documents say about checking contractors for debarment?
12. What does the Department review at Stage 3, procurement review?
13. A household's Hard Costs budget is $18,000. Before alarm-type exceptions or a Department-approved different ratio, what is the most that may go to life-threatening hazard and unsafe-condition repairs?
14. The approved estimate is higher than the money reserved, and the scope includes hazard repairs. What does the Program Manual say about those repairs?