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Windows Server 2008 R2 Delegate Account Creation - Access Denied

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I have setup an non-admin user to have the ability to create/delete user accounts in a given OU by way of delegate control. In this OU is a template that is to be used to create the user accounts which includes various group membership and also sets the new user's home directory to the drive U:\users\%username%.

The user is able to create the new account using the template, but will get the following error:
the \\servername\users\username home folder was not created because: access is denied. The user account has been created with the new home folder value but you must create the folder manually.

When I check, the folder is actually created but the problem is the new user was not given rights to the folder. If I use the template as a full admin user, everything works just fine. I figure I must be missing some rights the delegated user needs. It already has rights to the folder where the accounts are being created. Not sure what else is needed. I haven't been able to find anything in my searches.


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