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HRA / Program foundations

Lesson 1: What HRA is and how the money flows

14 practice questions · Sources reviewed October 4, 2026

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Start with the program, not a promise

Homeowner Reconstruction Assistance (HRA) uses federal HOME Investment Partnerships Program funding administered by the Texas Department of Housing and Community Affairs (TDHCA). It helps eligible low-income owners replace qualifying housing. It is not an unrestricted home-improvement account. Staff must establish the household, property, activity, service area and funding eligibility before telling anyone that a replacement home has been approved. An interested household, a completed application and an approved reservation are three different states.

What HRA is and how the money flows: four decision stagesHUD / HOME: Federal funding establishes the HOME requirements; state administration adds applicable conditions.; TDHCA: The Department authorizes participation, reviews the activity and approves eligible reimbursement.; Administrator: Staff document eligibility, clearances, competition, inspections and payment support.; Household / home: Approved work and assistance documents create ongoing owner responsibilities.01HUD / HOME02TDHCA03Administrator04Household / home
What HRA is and how the money flows: use each stage with its evidence before advancing.
  1. HUD / HOME. Federal funding establishes the HOME requirements; state administration adds applicable conditions.
  2. TDHCA. The Department authorizes participation, reviews the activity and approves eligible reimbursement.
  3. Administrator. Staff document eligibility, clearances, competition, inspections and payment support.
  4. Household / home. Approved work and assistance documents create ongoing owner responsibilities.

GCHS's research describes an organization preparing to administer HRA. This course does not establish that GCHS has an executed HRA Reservation System Participant agreement or an available allocation. Check those documents before conducting a funded intake. The procedures and worksheets in this course are proposed working controls for staff training. They become organizational procedures only after GCHS approves them. An AYBR agreement does not establish HRA authority.

Follow the money and the responsibility

HUD provides HOME funds to participating jurisdictions, including the state. TDHCA establishes the state program requirements and reviews reservations, documents and reimbursement requests. An approved Administrator manages intake, eligibility, environmental documentation, procurement, construction oversight and the file. Independent designers, contractors, inspectors and closing professionals perform their contracted roles. The household provides accurate information, makes required choices and signs approved documents. None of these roles can substitute for another's approval.

HRA reimbursement follows eligible costs incurred and supported by documentation. A contractor's invoice alone does not demonstrate that work is complete, that the price is allowable, or that title and lien requirements were satisfied. The Administrator needs a cash-flow plan as well as a project budget. A reservation is not cash in the bank. The current construction cash-reserve threshold is covered in Lesson 3; the retainage rules in Lesson 13 create an additional timing issue.

Classify the activity correctly

Reconstruction generally rebuilds housing on the same lot under the HOME definition, with new-construction property standards. TDHCA's HRA rule distinguishes particular replacement activities. A site-built home replaced on the same site and an MHU replaced with an MHU can fit reconstruction. Replacing an MHU with a site-built home is classified under HRA New Construction. Moving replacement housing to another site requires the applicable Department approval and a separate review of site ownership, demolition and financing. A staff preference for a different lot does not create eligibility.

Destroyed or uninhabitable homes have special conditions. Do not apply the ordinary standing-home rule to a disaster case without reading 10 TAC 23.30 and obtaining supporting records. The timing of destruction, principal residence, reservation and commitment can affect the allowable route. Document the applicable paragraph rather than simply marking the file "disaster." Disaster set-aside exceptions also depend on the funding source, not just the condition of the house.

Explain grant and loan responsibilities

Under 10 TAC 23.30, HRA Reconstruction uses a grant agreement with a five-year affordability period. HRA New Construction uses a zero-interest deferred loan with pro rata forgiveness and an applicable affordability term. "Grant" does not mean that the household has no obligations, and "zero interest" does not mean that a loan has no lien or repayment conditions. Use TDHCA's actual approved documents to explain occupancy, transfer, insurance and remedies. Do not promise that every HRA transaction has the same term.

The household should understand the proposed assistance before moving out or signing a construction arrangement. Provide information in an accessible form and through the language assistance process when needed. A useful explanation answers four questions: what work is proposed, who approves it, what the owner signs, and what the owner must do afterward. Keep the explanation and the executed agreement together, but do not treat a staff summary as a replacement for the agreement.

Separate eligibility from funding availability

The published 2026 General Set-Aside window is historical, not evidence that funds remain open today. The 2027 Single Family Development application on TDHCA's website is a different program; it does not establish a new HRA window. Check the current HRA NOFA and reservation availability directly. An RSP agreement does not guarantee funds. Likewise, a property located in Region 6 is not automatically eligible: participating-jurisdiction restrictions and approved service-area boundaries matter.

For the first conversation, collect only what is needed to route the inquiry. Describe the program accurately, identify an accessible contact method, explain that eligibility and funding are separate checks, and avoid collecting sensitive identity documents in ordinary email. Record the inquiry date and the next action. If HRA cannot serve the address, provide an appropriate referral without promising another organization's approval.

Work the case

A homeowner hears that GCHS runs AYBR and asks for a replacement home next month. A contractor offers to start demolition immediately.

Review the decision

Explain that HRA is a separate federal program. Verify GCHS participation, the funding window and the address before taking a funded application. Do not authorize demolition. Environmental clearance, assistance documents and construction start conditions remain unresolved. Record the inquiry and referral or follow-up without promising a construction date.

Apply it in the file

Authorities for this lesson

Practice questions

1. Which program funds HRA?

  1. Federal HOME
  2. Texas AYBR funds
  3. Private mortgage insurance
  4. Local building permit fees

2. An AYBR agreement proves which HRA status?

  1. Automatic HRA participation
  2. None by itself
  3. An HRA allocation
  4. Approval of every replacement

3. What does an executed RSP agreement guarantee?

  1. Cash for every eligible inquiry
  2. A contractor's first payment
  3. Participation subject to its terms
  4. Unlimited county reservations

4. How are eligible HRA costs ordinarily paid?

  1. As an unrestricted homeowner advance
  2. By waiving every contractor invoice
  3. Through a guaranteed deposit at intake
  4. Through documented reimbursement

5. Who manages the household activity file?

  1. The Administrator
  2. Only the homeowner
  3. Only the demolition contractor
  4. Only the permit office

6. Same-site replacement of an MHU with a site-built home uses which HRA category?

  1. Ordinary MHU reconstruction
  2. New Construction
  3. Tenant-based rental assistance
  4. AYBR barrier removal

7. An owner wants replacement on another lot. What comes first?

  1. Treat it as automatic reconstruction
  2. Reserve demolition money immediately
  3. Review the applicable approval route
  4. Ignore the original site's ownership

8. Reconstruction assistance under 23.30 generally uses what?

  1. An unrestricted gift without conditions
  2. A market-rate mortgage loan
  3. A tenant lease subsidy
  4. A grant with a five-year affordability period

9. HRA New Construction assistance generally uses what?

  1. A zero-interest deferred loan
  2. An unrestricted cash prize
  3. A commercial revolving credit card
  4. An automatic one-year grant

10. What is the safest response to a promised start date before clearance?

  1. Start with non-HOME money
  2. Do not authorize the start
  3. Let the owner demolish first
  4. Ask the contractor to backdate a contract

11. Does a Region 6 address alone prove eligibility?

  1. Yes; every address qualifies
  2. Yes; county names replace boundaries
  3. No; service-area and PJ checks remain
  4. Yes; owner income is irrelevant

12. A 2027 SFD application establishes what for HRA?

  1. Automatic HRA funding renewal
  2. A new HRA grant award
  3. Removal of HRA requirements
  4. No HRA funding window by itself

13. What does a signed invoice prove by itself?

  1. A billing claim was presented
  2. All construction is acceptable
  3. All title requirements are satisfied
  4. Every billed cost is reimbursable

14. What belongs in an initial program explanation?

  1. An unconditional promise of funding
  2. Work, approvals, documents and owner duties
  3. A guarantee of the final home value
  4. A contractor selection before intake

Glossary

HRA
TDHCA Homeowner Reconstruction Assistance.
HOME
The federal HOME Investment Partnerships Program.
Administrator
An approved entity responsible for program administration.
Reservation
A request and approval process for a specific household activity.
Reconstruction
Rebuilding under the applicable same-site HOME and HRA definitions.
Affordability period
The period during which applicable assistance restrictions continue.
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