(a) The veterans housing assistance fund is defined by Natural Resources Code, §162.002, and Subchapter C (§§162.031-162.050).      
        (b) The proceeds from each bond sale shall be part of the fund and shall first be used for the following purposes:        
          (1) to satisfy the reserve requirements of the particular covenants associated with the sale;          
            (2) to set up the initial debt repayment associated with each sale.            
              (c) After the requirements of subsection (b) of this section have been satisfied,  the board, with the assistance of the administrator, shall monitor the cash flow requirements of the program and shall administer the fund to:              
                (1) meet all bond repayment requirements; and                
                  (2) make money available as needed by the program to make or acquire home loans as provided by Natural Resources Code, Chapter 162, and this Chapter; and                  
                    (3) make money available as needed by the program to make home improvement loans as provided by § 177.8 of this title (relating to Qualifying Homes).                    
                      (d) Any money in the fund not immediately needed for the purposes described in subsections (b) and (c) of this section, nor immediately committed to paying principal of and interest on the bonds, nor the payment of expenses as provided in Natural Resources Code, Chapter 162, or this chapter, may be invested in bonds or obligations of the United States or in any other way not in conflict with the covenants or the Constitution and laws of the State of Texas until needed for these purposes.                      
                        (e) The board may use money in the fund attributable to bonds issued and sold to pay:                        
                          (1) expenses incidental and necessary to the sale and delivery of the bonds, including but not limited to the following:                                                      (A) fees for legal and financial advice;                                                          (B) the expense of publishing notice of sale of an installment of bonds;                                                              (C) the expense of printing the bonds;                                                                  (D) the expense of delivering the bonds, including the costs of travel, lodging, and meals of officers or employees of the board, the state comptroller, the state treasurer, and the attorney general, that are necessary in the opinion of the board to effectuate the delivery of bonds;                                                                      (E) remuneration to any agent employed by the board to pay the principal and interest on the bonds; and                                                                          (F) any other expenses deemed by the board to be reasonable and necessary.                                      
                                        (2) expenses and fees of the administrator for any additional services requested by the board which are not described in the board's contract with the administrator as part of the administrator's standard services.  These additional services must not be in conflict with any existing covenants or anyboard resolutions affecting the sale of bonds or administration of the fund. All such additional services must be authorized and requested by a resolution of the board.                                        
                                          (f) Money in the fund that is not spent for the purposes provided in Natural Resources Code, Chapter 162, or this chapter, shall remain in the fund until there is sufficient money to retire fully bonds issued and sold by the board.                                          
                                            (g) The board may by resolution make provisions for the administration of the fund.  In the event of any conflict between these rules and the provisions of a resolution of the board pertaining to the administration of the fund, the provisions of the board's resolution shall control.                                           
     Source Note:        The provisions of this § 177.3 adopted to be effective May 4, 1984, 9 TexReg 2263; amended to be effective August 28, 1985, 10 TexReg 3090.