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These cases tell the story of the complications which arise when a major state government agency attempts to use a nonprofit community-based organization as the means to implement an important new state program: low-cost, modestly-subsidized new housing on the Texas-Mexico border. The border region had become notorious for expanses of so-called "colonias"--informal, inexpensive and arguably substandard housing for Mexican immigrants and Mexican-Americans. The cases focus specifically on the relationship between a Texas state agency--the Department of Housing and Community Affairs--and Proyecto Azteca, a small nonprofit organization which began as a way to offer carpentry and home improvement assistance on a small scale in the colonias. The (A) case focuses on Proyecto Azteca''s decision to seek to seek public funds and greatly expand the range of its effort--and ultimately on the resulting complications which arise as a result of its contract with the state and which threaten to undermine the organization. The (B) case looks at the strategic implementation questions then faced by the Department of Housing and Community Affairs when its reliance on nonprofit community groups to construct housing appears to be foundering, and the department is under political pressure to show results. Supported by a grant from the Fannie Mae Foundation; written for the Hauser Center for Nonprofit Institutions.