HCDA -- H.R. Rep. 102-760 (7/30/92)


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 NOTE: THIS FILE CONTAINS PAGES 1-189 OF THE HOUSE COMMITTEE
REPORT (102-760) FOR H.R. 5334, WHICH LEAD TO THE HCD ACT OF
1992.  THE REMAINDER OF THE HOUSE REPORT (PAGES 189-501)
PRINCIPALLY CONSISTS OF THE "RAMSAYER" AND ADDITIONAL VIEWS OF
MEMBERS AND IS NOT INCLUDED IN DAS.

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102d Congress       HOUSE OF REPRESENTATIVES           REPORT
2d Session                                             102-760

               HOUSING AND COMMUNITY DEVELOPMENT
                          ACT OF 1992

                   --------------------------

  July 30, 1992.-Committed to the Committee of the Whole House
                   on the State of the Union
                   and ordered to be printed

      Mr. Gonzalez, from the Committee on Banking, Finance
           and Urban Affairs, submitted the following

                             REPORT

                         together with

                 MINORITY AND DISSENTING VIEWS

                     To accompany H.R. 5334

   Including cost estimate of the Congressional Budget Office

The Committee on Banking, Finance and Urban Affairs, to whom was
referred the bill (H.R. 5334) to amend and extend certain laws
relating to housing and community development, and for other
purposes, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do pass.

The amendment strikes out all after the enacting clause of the
bill and inserts a new text which appears in italic type in the
reported bill.

           SECTION-BY-SECTION ANALYSIS OF H.R. 5334,
       THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992
            AS REPORTED BY THE COMMITTEE ON BANKING,
                   FINANCE AND URBAN AFFAIRS

TITLE I-HOUSING ASSISTANCE

Sec. 1. Short title and table of contents

Provides that the Act may be cited as the Housing and Community
Development Act of 1992.

Sec. 2. Effective Date.

TITLE I-HOUSING ASSISTANCE

Subtitle A-General Provisions

Sec. 101. Low-income housing authorization

Provides additional aggregate budget authority for subsidized
housing programs of $15,158,946,956 for Fiscal Year (FY) 1993.

These totals include:

 Public housing grants, $844,792,000 (of which $247,312,000 is
available for Indian housing);

 Section 8 certificates, $2,039,232,000 (of which such sums as
may be necessary are authorized for 15-year contracts for
project-based assistance for a multicultural tenant empowerment
and homeownership project located in the District of Columbia);

 Comprehensive improvement assistance grants, $2,332,200,000;

 Section 8 assistance for property disposition, $455,624,000;

 Section 8 assistance for loan management, $173,576,000;

 Extensions of expiring section 8 contracts, $7,261,632,000;

 Section 8 contract amendments, $1,918,800,550;

 Public housing lease adjustments and amendments, $21,755,000;

 Public housing replacement activities, $85,800,000 (of which
$32,175,000 shall be for 15-year Section 8 project-based
assistance);

 Conversions from Section 23 leased housing to Section 8,
$25,535,406.

Sec. 102. Extension of ceiling rents

Removes the 5 year limit on the application of ceiling rents and
extends ceiling rents in effect prior to December 15, 1989,
without time limitation and strikes the inapplicability of the 5
year limit to Indian housing authorities. Prohibits the Secretary
from inputting debt to a project that is not actually outstanding
for the project for the purpose of determining ceiling rents.

Sec. 103. Income and definitions application to Indian Housing
programs

Includes the following deductions, subject to appropriations,
from a tenant's income for Indian families: child care expenses
incurred to enable another family member to work or attend school
and excessive travel expenses, not to exceed 25 per week,
incurred for employment or education.

Requires that the following provisions of NAHA also apply to
Indian public housing: change the term ``lower'' to ``low'';
expand the definition of ``family'' to include single persons;
that amend the calculation of income to raise the dependent
allowance to $550 from $480, add limited allowances for medical
and attendant care expenses, earned income and child support or
alimony payments and nullify the effect of the temporary absence
from the home of a foster child on determining family composition
and size.

Sec. 104. Public and section 8 housing tenant preference rules

Requires that the Secretary issue regulations for effect after
notice and public comment, based on negotiated rulemaking
procedures, within 180 days of enactment of this act to implement
sections 501 and 545 of NAHA with regard to the increased
exemption from federal tenant preferences to 30 percent in public
housing and the Section 8 programs.

Sec. 105. Income eligibility for assisted housing

Authorizes PHAs the ability to select relatively higher income
persons (i.e. these persons with incomes between 50 percent-80
percent of area median income as opposed to those below 50
percent) for tenancy regardless of their position on the public
housing waiting list for the 30 percent of tenants selected under
local preferences.

Sec. 106. Family self-sufficiency program

Authorizes the use of $25,000,000 of any funds appropriated for
public housing operating subsidies for service coordinators for
the family self-sufficiency program (section 554 of NAHA).

Amends the purpose clause of the program to state that the
purpose of the program is to promote the development of local
strategies to coordinate housing assistance with services to
enable families to improve their educational and employment
status and achieve a greater measure of economic independence.

Defines the circumstances under which a PHA can certify that the
establishment and operation of a self-sufficiency program is not
feasible as a lack of supportive services (including insufficient
resources for programs under JOBS or JTPA); lack of cooperation
by other units of State or local government and other
circumstance that the Secretary may consider appropriate.

Prohibits the Secretary from denying assistance that otherwise
would have been provided to a PHA because the PHA has certified
that a self-sufficiency program is not feasible.

Limits the scope of the self-sufficiency program to 50 percent of
the incremental section 8 assistance received by a PHA each year
and by excluding from the definition of incremental section 8
assistance, all section 8 assistance provided for: the property
disposition program, loan management, family unification, the
Low-Income Housing Preservation Act of 1990 of the Emergency Low
Income Housing Preservation Act of 1987, any units required by an
agency to carry out its allocation plan for elderly and disabled
housing and Section 23 conversions.

Defines incremental units for public housing as excluding any
unit that has been vacant and is returned to occupancy, any unit
provided for replacement for a unit demolished or disposed of,
and any unit in a project designated and approved for occupancy
by elderly families.

Provides that a family that receives assistance under section 8
in connection with a family self-sufficiency program may not use
such assistance for any dwelling unit not located within the
jurisdiction of the PHA providing the section 8 assistance.

Requires that the contract for participation establish specific
interim and final goals by which compliance with and performance
of the contract may be measured. Such goals may not include
requiring the participating family to refuse all Federal, State
or local housing assistance as a condition of withdrawing amounts
in an escrow savings account.

Provides that the contract shall provide that the PHA may
withhold and terminate section 8 assistance if the PHA determines
through an administrative grievance procedure that the family has
failed to comply with the requirements of the contract without
good cause.

Amends the escrow provisions to establish allowable incentives
for participation in family self sufficiency pursuant to an
action plan prepared by a PHA and approved by the Secretary which
describes such incentives. Such incentives may include limitation
on the rent of participating families; the establishment of
escrow savings accounts, which escrow amounts shall be available
to all participating families upon completion of the goals
established in the contract of participation or earlier, upon
attainment of interim goals; and any other incentives as
determined by the PHA. Requires that Escrow amounts must be used
by participating families for purposes consistent with the
contract of participation.

Provides that the family self-sufficiency program is voluntary
for Indian Housing Authorities.

Deletes the incentive allocation system established for Fiscal
Years 1991 and 1992.

              Subtitle B-Public and Indian Housing

Sec. 111. Major reconstruction of obsolete projects

Authorizes up to 20 percent of public housing development funds
to be used for the Major Reconstruction of Obsolete Projects
(MROP) program in order to provide for the substantial redesign,
reconstruction, or redevelopment of existing public housing
projects and for costs of improving the management and operation
of projects undergoing redesign, reconstruction, or redevelopment
in order to maintain the physical improvements.

Defines eligible projects: (1) as projects that have more than 25
percent of units vacant; or (2) that have costs for redesign,
reconstruction or redevelopment, including costs for lead-based
paint abatement and asbestos removal, that exceed 70 percent of
the cost limits for the public housing development program, and
has an occupancy density or building height that is in excess of
those in the neighborhood, a bedroom configuration that could
better serve families, or significant security problems, physical
deterioration or inefficient energy and utility systems.

Requires HUD to allocate MROP assistance on a competition basis
based on a PHA's management capability, the expected useful term
of the project, and the likelihood of achieving full occupancy.

Requires HUD to establish limitations on total project costs for
redesign, reconstruction and redevelopment; however, requires
that these cost limitations shall not be related to total
development costs for new development or modernization and shall
recognize the higher direct costs of such work. Requires HUD to
take into account the overall reconstruction costs on the site
compared to the costs of developing an equivalent number of
units.

Prohibits MROP assistance for any project or building assisted
under the Sec. 14 public housing modernization program and
prohibits the approval of a demolition or disposition application
of a public housing project which has received MROP assistance
unless the property's retention is not in the best interests of
tenants because of extraordinary changes in the area surrounding
the project or in the project itself.

Requires negotiated rule making to implement this provision.

Sec. 112. Public housing tenant preferences

Amends the public housing preference rules for public housing of
25 units or more to increase the local preference from 30 percent
to 50 percent of the units that become available for occupancy in
any one year.

Sec. 113. Public housing operating subsidies

Authorizes for public housing operating subsidies, $2,169,440,000
for FY 1993 and authorizes such sums as may be necessary to
provide each public housing agency (PHA) with all funds in excess
to those appropriated in FY 1993 which the PHA is eligible to
receive under the performance funding system without adjustments
for estimated or unrealized savings.

Requires that the Secretary of Housing and Urban Development
(HUD) use the Negotiated Rulemaking Act of 1990 (P.L. 101-552) if
the Secretary seeks to amend the Performance Funding System to
account for vacant units.

Authorizes such sums as may be necessary for the adjustments to
income authorized in section 573 of NAHA.

Sec. 114. Public housing vacancy reduction

Authorizes a set-aside of 9 percent of the vacancy reduction
program (section 14 (p)) of any amounts appropriated for large
PHAs under the comprehensive modernization grant program (section
14 of the United States Housing Act of 1937 (the 1937 Housing
Act)). Provides that the amounts appropriated for this program
can be used by the Secretary for any travel and administrative
expenses of any assessment team provided under the program.

Sec. 115. Public housing demolition and disposition

Clarifies that consultation under the public housing demolition
and disposition requirements under Sec. 18(b) of the 1937 Housing
Act must occur with the tenants of the project or portion of the
project covered by the demolition and disposition application.

Sec. 116. Public housing resident management

Authorizes for the public housing resident management program
(section 20 of the 1937 Housing Act), such sums as may be
necessary for FY 1993. Requires HUD to develop and publish in the
Federal Register indicators and procedures by which to assess the
management performance of resident management corporations which
shall be based, to the extent practicable, on the same indicators
and procedures established under Sec. 6(j) of the 1937 Housing
Act which are used to assess PHAs. Requires HUD to annually
report to Congress on the results and performance of RMCs.

Sec. 117. Public housing homeownership

Makes technical corrections to the termination provisions of the
section 21 homeownership demonstration (section 21 of the 1937
Act).

Sec. 118. Public housing family investment centers

Authorizes for public housing family investment centers (section
22 of the 1937 Housing Act) $27,144,000 for FY 1993.

Sec. 119. Public housing early childhood development services

Authorizes for public housing early childhood development grants
(section 222 of the Housing and Urban-Rural Recovery Act of 1983)
$21,736,000 for FY 1993.

Sec. 120. Indian housing early childhood development services

Authorizes for Indian housing early childhood development grants
(section 518 of the Cranston-Gonzalez National Affordable Housing
Act (NAHA)) such sums as may be necessary for FY 1993.

Amends section 518 to authorize the Secretary to make grants
under the program to Indian housing authorities and Indian
tribes.

Sec. 121. Exemption of Indian housing program from new
construction limitation

Exempts the Indian housing program from any limitation on new
construction.

Sec. 122. Public housing one-step perinatal services
demonstration

Authorizes for the public housing one-step perinatal services
demonstration program (section 521 of NAHA) such sums as may be
necessary for FY 1993.

Sec. 123. National Commission on Distressed Public Housing

Extends the National Commission on Distressed Public Housing
(section 507 of the Department of Housing and Urban Development
Reform Act of 1989 (HUD Reform Act)) until September 30, 1992.

Sec. 124. National Commission on American Indian, Alaska Native,
and Native Hawaiian Housing

Authorizes for the National Commission on American Indian, Alaska
Native, and Native Hawaiian Housing (section 605 of the HUD
Reform Act) such sums as may be necessary for FY 1993. Extends
the Commission until the end of FY 1993.

Sec. 125. Public housing homeownership demonstration

Authorizes HUD to carry out a 10 year housing homeownership
demonstration program administered by the Housing Authority of
the City of Omaha, Nebraska. Authorizes the Housing Authority to
designate single-family housing units for homeownership and
limits the demonstration program to not more than 20 percent of
the total number of the Housing Authority's public housing units
over the term of the demonstration. Prohibits the involuntary
relocation or displacement of tenants as a result of the
demonstration program. Requires the Housing Authority to
establish criteria for participating families based on factors
that (1) reasonably predict an individual's ability to
successfully complete the program's requirements, (2) include
evidence of the family's interest in homeownership, (3) include
the employment status and history and (4) include the family's
maintenance history of the previous dwelling. Requires the
Housing Authority to ensure the availability of supportive
services to each participating family through its own resources
and through coordination with federal, state, and local agencies
and private entities. Requires HUD to report to Congress after
each 2 year period during the term of the demonstration program
and requires HUD to issue program regulations within 90 days of
the enactment date of this Act.

Sec. 126. Sale of certain scattered site housing

Authorizes the sale of scattered site housing in Delaware by the
Delaware Housing Authority under section 5(h) of the 1937 Act and
the use of the proceeds of such sale to provide replacement
housing. Provides that such replacement housing will be provided
operating subsidies by HUD.

                Subtitle C-Section 8 Assistance

Sec. 141. Restatement and revision of section 8 rental assistance
program

Amends Section 8 of 1937 Act by combining and restating the
section to remove outdated provisions, to streamline and clarify
the provision, and to create a single tenant-based rental
assistance program.

Authorizes the establishment of fair market rents and maximum
monthly rents as under current law and requires the annual
adjustment of such rents.

Provides that the rent paid by a low-income person assisted under
Section 8 will be the difference between 30 percent of the
family's monthly adjusted income and the applicable maximum
monthly rent except that for up to 50 percent of the PHA's
tenant-based rental assistance, tenants can request to pay more
than 30 percent of their income toward rent, and with PHA
approval, can pay up to 40 percent of adjusted income toward rent
if the PHA determines that the unit rent and the family's rental
payments are reasonable.

Requires that the tenant selection procedures of the Section 8
project-based rental assistance be in writing, reasonably related
to program eligibility and provide for written notice to the
applicant of any rejections.

Provides that if an owner fails to maintain the assisted units in
accordance with housing quality standards, the PHA may withhold
assistance and repair the property with such funds.

Provides that if a person assisted with tenant-based assistance
receives authorization to pay more than 30 percent of income for
rent that person may not use such assistance out of the issuing
PHA's jurisdiction.  Gives the PHAs the discretion to allow
families to rent units with the PHAs assistance outside its
jurisdiction as long as families have rented and occupied units
within the PHAs jurisdiction for not less than 12 months.
Authorizes PHAs, that offer more than 300 units of Section 8
assistance, the ability to restrict this portability of
assistance through a residency requirement for 90 percent of the
units, the other 10 percent would be portable.

Requires HUD to reserve 5 percent of the rental assistance budget
authority to provide additional units to PHAs affected by these
portability provisions. However, requires PHAs to absorb incoming
families in an amount equal to 5 percent of the PHA's total
Section 8 allocation.

Authorizes Section 8 owners the ability to terminate tenancy for
any criminal activity of tenants that threatens the health,
safety, or right to peaceful enjoyment of residences of persons
residing in the immediate vicinity of the premises.

Amends the definition of termination of assistance to mean
termination of tenancy by an owner for business reasons.

Amends the definition of owner under the Section 8 program to
clarify that principals, general partners, primary shareholders
and other similar participants in any entity a multifamily
housing project is included in such definition.

Authorizes an increase of $36,400,000 for FY 1993 in the budget
authority for tenant-based rental assistance for the family
unification program (section 553 of NAHA).

Sec. 142. Implementation of amendments to project-based
certificate program

Requires that the Secretary implement the provisions of section
547 of NAHA within 180 days of enactment of this Act. Section 547
provides for revisions to the project-based Section 8 program
including requirements for the adoption of tenant selection
procedures by owners.

Sec. 143. Effectiveness of section 8 assistance for PHA-owned
units

Requires that the amendments made by Section 548 of NAHA shall be
effective notwithstanding the absence of any regulations to
implement these provisions. Section 548 authorizes the use of
Section 8 assistance for PHA-owned units.

Sec. 144. Non-discrimination against certificate and voucher
holders

Amends section 183(c) of the Housing and Community Development
Act of 1987, which prohibits owners of multifamily housing from
discriminating against persons assisted under Section 8, to
clarify that ``owner'' includes persons controlling the entity
that has ownership of such housing.

Sec. 145. Implementation of income eligibility provisions for
section 8 new construction units

Requires that the Secretary implement the provisions of section
555 of NAHA regarding the income eligibility in Section 8 new
construction within 180 days of enactment of this Act.

Sec. 146. Moving to opportunity for fair housing

Authorizes the Secretary to implement a demonstration program to
provide Section 8 assistance and housing counseling to very low
income families residing in public housing in areas of high
concentrations of persons in poverty to move to areas with low
concentration of very low income persons. Requires the Secretary
to carry out the demonstration in five cities with populations in
excess of 350,000 and Los Angeles, California.

Requires the Secretary to enter into contracts with nonprofit
housing counseling agencies and to report to Congress not later
than September 30, 2004, on the long term housing, employment,
and educational achievements of families assisted under this
demonstration.

Authorizes for appropriation for tenant-based Section 8
assistance such sums as may be necessary for FY 1993 and such
sums as may be necessary for housing counseling in connection
with this demonstration.

Requires regulations subject to 15 day comment period by Congress
and requires HUD to publish a notice to establish program
requirements within 90 days of the enactment of this Act.

                   Subtitle D-Other Programs

Sec. 161. Public and assisted housing drug elimination

Authorizes for the public and assisted housing drug elimination
grant program (section 5130(a) of the Anti-Drug Abuse Act of
1988) $173,576,000 for FY 1993. Makes technical corrections to
the youth sports set aside to make clear that the set advise is
for 5 percent of the amounts appropriated. Includes for funding
housing projects which are owned by PHAs but are not funded by
the federal government and which are located in high drug
intensity and crime ridden areas.

Sec. 162. Flexible subsidy program

Authorizes for the flexible subsidy program (section 201 of the
Housing and Community Development Amendments of 1978) $54,288,000
for FY 1993. Extends the transfer of excess section 236 rents to
the flexible subsidy program through FY 1993.

Provides that the Secretary has 30 days to review the management
improvement and operating plan provided for under the flexible
subsidy program.

Sec. 163. Housing counseling

Authorizes $3,848,000 for FY 1993 for housing counseling services
(section 106(a) of the Housing and Urban Development Act of 1968
(the 1968 Act)). Authorizes $7,280,000 for FY 1993 for emergency
homeownership counseling grants (106(c) of the 1968 Act), of
which $1,000,000 will be available for the toll free number for
housing counseling services. Extends the emergency homeownership
counseling provision until the end of FY 1993. Authorizes for
$379,600 for FY 1993 for the prepurchase and
foreclosure-prevention counseling demonstration program (section
106(d) of the 1968 Act.) Authorizes as an additional selection
criteria used to determine funding to HUD-approved housing
counseling agencies that priority be given under the housing
counseling program to areas that have a high incidence of
mortgages involving principal obligations that are in excess of
97 percent of the property's appraised value.

Expands program eligibility to include mortgage applicants that
have mortgages involving a principal obligation in excess of 97
percent of the property's appraised value.

Amend the notification requirement in existing law to require
that an eligible mortgage applicant for a mortgage involving a
principal obligation in excess of 97 percent of the property's
appraisal value is notified that completion of a counseling
program is required for FHA mortgage insurance.

Requires HUD to annually update the list of counseling
organizations for the toll-free telephone number.

Sec. 164. Use of funds recaptured from refinancing state and
local finance projects

Amends section 1012 of the Stewart B. McKinney Homeless
Assistance Amendments Act of 1988 to allow State housing finance
agencies and PHAs to retain 50 percent of any amounts recaptured
upon the refinancing of debt issued in connection with any
section 8 new construction entered into between January 1, 1979,
and December 31, 1984, subject to appropriations.

Applies the recapture sharing provisions of section 1012
retroactively to the extent that amounts are made available in
appropriation acts for this purpose.

Sec. 165. HOPE for Youth: Youthbuild

Establishes new HOPE Subtitle-HOPE for Youth: Youthbuild-whose
purposes include expanding the supply of permanent affordable
housing for homeless and low and very low income families by
employing disadvantaged young adults; providing opportunities to
young adults for meaningful work and services to their
communities; enabling economically disadvantaged youth to obtain
training education and skills; and to further leadership skills
and commitment to community development among the young adults.

Authorizes the Secretary to make planning and implementation
grants to develop and carry out Youthbuild programs.

Authorizes the Secretary to provide planning grants not to exceed
$150,000, although the Secretary may grant a higher amount, for
feasibility studies; establishing consortia between youth
training programs and housing organizations; site identification
and selection; preliminary architectural and engineering work;
staff selection and training; planning, training, technical
assistance with respect to education, job training, or other
services; and preparation of an implementation grant.

Requires the Secretary to establish procedures for submitting a
planning grant application which shall contain at a minimum a
request for assistance specifying activities and schedule and
personnel necessary to complete the activities; a description of
the applicant and qualifications and experience with regard to
housing, youth training, and local unions and apprenticeship
programs; site identification and a description of construction
activities, youth recruitment, job training, and educational
activities, and coordination efforts among federal, state, and
local housing and youth education and employment training
activities; CHAS certification; and certification of compliance
with Fair Housing, title VI of Civil Rights Act of 1964, section
504 of the Rehabilitation Act of 1973 and the Age Discrimination
Act of 1975.

Requires the Secretary to establish selection criteria by
regulation for a national competition which shall include the
qualifications or potential capabilities of the applicant; the
potential of the applicant for developing a successful and
affordable Youthbuild program; the need for the prospective
program, as determined by the degree of economic distress of the
community to be served by the Youthbuild program, including among
the eligible youth and in the housing stock; and such other
pertinent factors that the Secretary determines.

Authorizes the Secretary to make implementation grants to
applicants to carry out Youthbuild programs which include the
following activities: architectural and engineering work;
acquisition, rehabilitation, acquisition and rehabilitation, or
construction of housing and related facilities providing
homeownership under the HOPE II and III programs, housing for
homeless and low- and very low-income families, or transitional
housing for persons who are homeless, handicapped, or disabled;
administrative costs not to exceed 15 percent of the amount of
assistance or such higher percentage as determined by the
Secretary; education, skills, counseling, and job training
services and activities including stipends during training and in
transition to the workforce; wage stipends and benefits; funding
of operating expenses and replacement reserves of the property
covered by the Youthbuild program; and legal fees and costs for
the ongoing training and technical assistance needs of program
recipients.

Requires each recipient to provide not less than 10 percent of
the grant amounts as match excluding any amounts provide for
post-sale operating expenses. Such matching contributions may be
in the form acceptable to the Secretary, including cash
contributions from non-Federal resources, including CDBG funds;
payment of administrative expenses, from non-Federal resources,
including CDBG funds, the value of taxes, fees, or other charges
that are normally and customarily imposed but are waived,
foregone, or deferred; the value of land or other real property;
the value of investment in on-site and off-site infrastructure;
the value of property or services from non-Federal resources;
cash contributions from Federal resources that are earmarked to
provide the education and job training services and activities;
or such other in-kind contributions as the Secretary may approve.
Requires that contributions for administrative expenses shall be
recognized only up to an amount equal to 7 percent of the total
amount of grants made available under this section.

Requires the applicant to submit an application in such form and
in accordance with such procedures as the Secretary shall
establish to include at a minimum a request for an implementation
grant, specifying the amount of the grant requested and its
proposed uses; a description of the applicant and a statement of
its qualifications, and past experience with housing youth
education and employment training programs, local unions and
apprenticeship programs, and other community groups; a
description of the proposed site; a description of the
educational and job training activities, work opportunities, and
other services; a description of the proposed construction or
rehabilitation activities and a completion schedule; a
description of a recruitment and selection plan for including
eligible youths; a description of cooperation agreements with
State and local educational agencies, public assistance agencies,
the courts of jurisdiction for status and youth offenders,
shelters for homeless individuals and other agencies that serve
homeless youth, foster care agencies, and other appropriate
public and private agencies; a description of the special
outreach for women (including young women with dependent
children); a description of how the proposed program will be
coordinated with other Federal, State, and local activities,
including vocational, adult and bilingual education programs, job
training under the Job Training Partnership Act and the Family
Support Act of 1988, housing and economic development, and
programs that receive housing counseling assistance; assurances
that there will be a sufficient number of adequately trained
supervisory personnel in the program who have attained the level
of journeyman or its equivlent; a description of the applicant's
relationship with local building trade unions regarding training,
and apprenticeship programs; a description of leadership skills
training; a detailed budget and auditing and accountability
procedures that will be used to ensure fiscal soundness; a
description of and commitment for matching funding and any other
resources; identification and description of the financing
proposed for housing rehabilitation, acquisition, and
construction; identification and description of the entity that
will operate and manage the property; a CHAS certification; a
compliance certification with the requirements of the Fair
Housing Act, title VI of the Civil Rights Act of 1964, section
504 of the Rehabilitation Act of 1973, and the Age Discrimination
Act of 1975.

Requires the Secretary to establish selection criteria for
assistance including: The qualifications or potential
capabilities of the applicant; the feasibility of the Youthbuild
program; the potential for developing a successful and
cost-effective Youthbuild program; the need for the prospective
project, as determined by the degree of economic distress of the
community including among the eligible youth and in the housing
stock; the commitment of the applicant to leadership development,
education, and training of participants; preferences for tenant
selection, including priority to tenants who were previously
homeless and who have incomes of less than 40 percent of the area
median income and such other factors as the Secretary determines
appropriate.

Requires the Secretary to notify each applicant, not later than 4
months after the date of the submission of the application,
whether the application is approved or not approved.

Requires the Secretary to develop a procedure under which an
applicant may apply a the same time and in a single application
for a planning grant and an implementation grant, with receipt of
the implementation grant conditioned on successful completion of
the activities funded by the planning grant. Establishes program
requirements for rental housing projects receiving assistance
including that at least 90 percent of the units shall be
occupied, or available for occupancy, by individuals and families
with income less than 60 percent of the area median income,
adjusted for family size; and the remaining units shall be
occupied, or available for occupancy, by low-income families that
tenant protections with regard to leases and evictions be in
place. The lease between a tenant and an owner of residential
rental housing shall be for not less than 1 year, unless
otherwise mutually agreed to by the tenant and the owner, and
shall contain such terms and conditions as the Secretary shall
determine to be appropriate.

An owner shall not terminate the tenancy or refuse to renew the
lease of a tenant of rental housing except with good cause, and
only upon 30 days written notice specifying the grounds for the
action.

Requires the owner of rental housing to maintain the premises in
compliance with all applicable housing quality standards and
local code requirements.

Requires the owner to adopt written tenant selection policies and
criteria that are consistent with the purpose of providing
housing for very low-income and low-income families and
individuals; are reasonably related to program eligibility and
the applicant's ability to perform the obligations of the lease;
give reasonable consideration to federal preferences; and provide
for the selection of tenants from a written waiting list in the
chronological order of their application, to the extent
practicable, and for the prompt notification in writing of any
rejected applicant of the grounds for any rejection.

Limits rental payments to those provided under section 3(a) of
the United States Housing Act of 1937.

Provides a plan for a program of tenant participation in
management decisions, for projects owned by nonprofit
organizations. Prohibits discrimination against those families
holding Section 8 tenant-based assistance in program units.
Provides that transitional housing project shall adhere to the
requirements regarding service delivery, housing standards, and
rent limitations applicable to comparable housing receiving
assistance under title IV of the Stewart B. McKinney Homeless
Assistance Act.

Limits profits for rental and transitional housing. Provides that
aggregate monthly rent roll may not exceed the operating costs of
the project (including debt service, management, adequate
reserves, and other operating costs) and a 6 percent return on
any equity investment of the project owner. Requires a nonprofit
sponsor to use any profit received from the operation, sale, or
other disposition of the project for the purpose of providing
housing for low- and moderate-income families. Authorizes
profit-motivated partners in a nonprofit partnership to receive
not more than a 6 percent return on their equity investment and
upon disposition of the project, not more than an amount equal to
their initial equity investment plus a return on that investment
equal to the increase in the Consumer Price Index for the
geographic location of the project since the time of the initial
investment of such partner in the project.  Requires
homeownership projects to comply with the requirements of HOPE II
and III. Restricts transfer of ownership interests such that the
instrument of conveyance requires a subsequent owner to comply
with the same restrictions imposed upon the original owner.
Permits the conversion of a transitional housing project to a
permanent housing project only is such housing would meet the
requirements for residential rental housing specified in this
section.

Requires projects receiving assistance to comply with the
requirements of this section for the remaining useful life of the
property. Establishes eligible participants as individuals who
are 16 to 24 years of age, inclusive; a very low-income
individual or a member of a very low-income family; and an
individual who has dropped out of high school.

Provides the eligibility requirements for exceptions of not more
than 25 percent of the participants. Excepted individuals may be
from low income families and meet the age and school drop out
requirement or are not school drop outs but meet the age and very
low income family requirement and have educational and job
training needs despite the attainment of a high school diploma or
its equivalent.

Establishes participation limit of not less than 6 months and not
more than 24 months. Requires that each Youthbuild program be
structured so that 50 percent of the time spent by participants
in the program is devoted to educational services and activities.
Restricts federal intervention over the curriculum, program of
instruction, administration, or personnel of any educational
institution, school, or school system, or over the selection of
library resources, textbooks, or other printed or published
instructional materials by any educational institution or school
system.

Requires that all educational programs and activities supported
by Youthbuild program funds are consistent with applicable State
and local educational standards, including awarding of academic
credit and certifying educational attainment.

Conforms provisions of Youthbuild with sections 142, 143, and 167
of the Job Training Partnership Act, relating to wages and
benefits, labor standards, and nondiscrimination to the extent
practicable. Permits a recipient of a grant to use funds from
non-Federal sources to increase wages and benefits if
appropriate.

Provides program definitions.

Requires the Secretary to enter into contracts with a qualified
public or private nonprofit agency to provide appropriate
training, information, and technical assistance to sponsors of
programs.

Provides that technical assistance in the development of program
proposals and the preparation of applications for assistance be
available and that community-based organizations shall be given
first priority in the provision of such assistance.

Requires the Secretary to reserve 5 percent of the amounts
available for technical assistance.

Requires each Youthbuild program to implement their program
directly or through arrangements or under contracts with
administrative entities designated under section 103(b)(1)(B) of
the Job Training Partnership Act, with State and local
educational agencies, institutions of higher education, State and
local housing development agencies, or with other public agencies
and private organizations.

Requires the Secretary to issue regulations for effect subject to
notice and comment not later than 180 days after the enactment of
this Act.

Authorizes for appropriation, until expended, such sums as may be
necessary for Fiscal Year 1993 for the Youthbuild program.

               Subtitle E-Homeownership Programs

Sec. 181. HOPE homeownership programs

Authorizes $100,000,000 for FY 1993 for HOPE for Public and
Indian Homeownership (HOPE I); $100,000,000 for HOPE for
Homeownership of Multifamily Units (HOPE II); and $200,000,000
for HOPE for Homeownership of Single Family Homes (HOPE III).

Strikes the word ``appreciably'' as it modifies ``reduce the
availability of affordable housing'' in the selection criteria
for the HOPE I program under Sec. 303(e)(8). Prohibits the
approval of a HOPE I program by HUD unless the public housing
agency receives fair market compensation for the transfer of the
project. Provides that housing owned by a PHA but is not
federally assisted public housing is eligible under the HOPE II
Multi-family program.

Provides that mutual housing associations are eligible applicants
under the HOPE II Multi-family program and establishes a
preference for public and Indian housing residents in the HOPE
III Single-family program.

Sec. 182. National Homeownership Trust demonstration

Extends the National Homeownership Trust demonstration (Title
III, subtitle A of NAHA) until the end of FY 1994. Authorizes for
the Trust, $542,360,000 for FY 1993, of which such sums as may be
necessary for use in conjunction with housing financed by
mortgage revenue bonds. Authorizes to be appropriated such sums
as may be necessary for FY 1993 to cover the credit costs
associated with this program.

Provides for coordination between the Trust and the mortgage
revenue bond program to permit an interest rate buydown of 2
percent of the principal during the first year, 1.5 percent
during the second, 1 percent during the third year and .5 percent
during the fourth year, and to provide downpayment assistance
equal to an amount no greater than 2.5 percent of the mortgage
principal. Makes the owner of a substandard manufactured home
eligible, who meets the other criteria, as a first time
homebuyer.

Requires HUD to issue regulations necessary to implement the
National Homeownership Trust Demonstration within 180 days of the
enactment of this Act.

Sec. 183. Nehemiah housing opportunity grants

Authorizes nonprofit organization grantees to provide that, upon
the sale or transfer of a property purchased with a loan made
under the Nehemiah program, any proceeds remaining after repaying
the first mortgage shall be distributed (1) to repay the seller's
downpayment; (2) to then share equally remaining proceeds between
the Secretary and the seller or transferor, but only to the
extent that the Secretary recovers the Nehemiah loan. (If
remaining amounts are insufficient for the Secretary to recover
the full amount of the Nehemiah loan, the second mortgage held by
the Secretary shall remain on the property to the extent of the
amount unrecovered until the loan is paid in full from any sale
or transfer proceeds); and (3) then any remaining amounts as
profit to the seller.

Provides that these recapture provisions apply to any Nehemiah
loan made after July 1, 1990.

Sec. 184. Loan guarantees for Indian housing

Authorizes the Secretary to guarantee 100 percent of the unpaid
principal and interest due on any eligible loan made to an Indian
family or Indian housing authority.

Provides that eligible borrowers are Indian families or Indian
housing authorities. Provides that guaranteed loans shall be used
to construct, acquire, or rehabilitate standard 1- to 4-family
dwellings located on trust land or land located in an Indian or
Alaska Native area.

Provides that the loan may be secured by any collateral
authorized under existing Federal law or applicable State or
tribal law. Requires that loans be made only by lenders approved
by and meeting qualifications established by the Secretary, for
this program. Authorizes that the following lenders are deemed to
be approved: any mortgagee approved by the Secretary for
participation in the single family mortgage insurance program
under title II of the National Housing Act; any lender whose
housing loans under chapter 37 of title 38, United States Code
are automatically guaranteed pursuant to section 1802(d) of such
title; any lender approved by the Secretary of Agriculture to
make section 502 guaranteed loans; and any other lender that is
supervised, approved, regulated, or insured by any agency of the
Federal government.

Requires loans to be made for a term not exceeding 30 years; bear
interest (exclusive of the guarantee fee and service charges, if
any) at a rate agreed upon by the borrower and the lender and
determined by the Secretary to be reasonable, which may not
exceed the rate generally charged in the area (as determined by
the Secretary) for home mortgage loans not guaranteed or insured
by any agency or instrumentality of the Federal government; to
involve a principal obligation not exceeding an amount equal to
the sum of 97 percent of $25,000 of the appraised value of the
property, as of the date the loan is accepted for guarantee, and
95 percent of such value in excess of $25,000, and the amount
approved by the Secretary and to involve a payment on account of
the property in cash or its equivalent, or through the value of
any improvements to the property made through the borrower's
sweat equity.

Requires the Secretary to issue a certificate as evidence of the
guarantee, subject to the Secretary's review and approval of the
lender's loan application. Authorizes the Secretary to approve a
loan for guarantee and issue a certificate only if the Secretary
determines there is a reasonable prospect of repayment of the
loan. Requires that the issuance of a certificate of guarantee by
the Secretary provides incontestable evidence that the full faith
and credit of the United States is pledged to the payment of all
amounts agreed to be paid by the Secretary as security for such
obligations.

Authorizes the Secretary to establish defenses against the
original lender based on fraud or material misrepresentation and
to establish by regulation in effect on the date of issuance or
disbursement, whichever is earlier, partial defenses to the
amount payable on the guarantee. Requires the Secretary to fix
and collect a guarantee fee for the guarantee of loans which may
not exceed the amount equal to 1 percent of the principal
obligation of the loan. Requires that the fee is to be paid by
the lender at time of issuance of the guarantee and shall be
adequate, to cover expenses and probable losses. Requires the
Secretary to deposit any guarantee fees in the Indian Housing
Loan Guarantee Fund.

Provides that the liability under a guarantee shall decrease or
increase on a pro rata basis according to any decrease or
increase in the amount of the unpaid obligation under the
provisions of the loan agreement.

Provides for sale or assignment of any loan, including the
security for the loan, by the lender to any financial institution
subject to examination and supervision by an agency of the
Federal Government or of any State or the District of Columbia.

Authorizes the Secretary to refuse, either temporarily or
permanently, to guarantee any further loans made by the lenders
or holders; to bar the lenders or holders from acquiring
additional loans guaranteed; and to require the lenders or
holders to assume not less than 10 percent of any loss on further
loans made or held by the lender or holder that are guaranteed if
the Secretary determines that the lender or holder has poor
accounting records, has failed to adequately service loans, has
failed to underwrite loans properly, or otherwise has engaged in
detrimental activities.

Authorizes the Secretary to impose a civil money penalty if the
Secretary determines that any lender or holder of a guarantee
certificate has intentionally failed to maintain adequate
accounting records, to adequately service loans guaranteed under
this section, or to exercise proper credit or underwriting
judgement. Prohibits the Secretary from refusing to pay pursuant
to a valid guarantee on loans of a lender or holder barred if the
loans were previously made in good faith.

Establishes procedures for payment in the event of default after
written notice to the Secretary. Requires the Secretary to pay to
the holder of the certificate the pro rata portion of the amount
guaranteed plus reasonable fees and expenses as approved by the
Secretary, upon a final order by a court authorizing foreclosure
and submission to the Secretary of a claim for payment under the
guarantee. The Secretary shall be subrogated to the rights of the
holder of the guarantee and the lender or holder shall assign the
obligation and security to the Secretary.

Requires the Secretary to only pay for a loss on any single loan
an amount equal to 90 percent of the pro rata portion of the
amount guaranteed in the event that no judicial foreclosure is
sought or granted in excess of one year. Requires the Secretary
to subrogate the rights of the holder of the guarantee and
requires the holder to assign the obligation and security to the
Secretary. Requires the holder of the guarantee to exhaust all
reasonable possibilities of collection, before requesting
payment. Requires upon payment, in whole or in part, to the
holder, the note or judgement to be assigned to the United States
for the Secretary to take appropriate action to collect and
provides that the holder shall have no further claim against the
borrower of the United States.

Upon receiving notice of default on a guaranteed loan from the
holder of the guarantee, authorizes the Secretary to accept
assignment of the loan if the Secretary determines that the
assignment is in the best interests of the United States.
Requires the Secretary, upon assignment, to pay to the holder of
the guarantee the pro rata portion of the amount guaranteed.
Requires that the Secretary shall be subrogated to the rights of
the holder of the guarantee and that the holder shall assign the
obligation and security to the Secretary.

Requires the Secretary, in the event of a default involving a
security interest in tribal allotted or trust land, to pursue
liquidation only after offering to transfer the account to an
eligible tribal member, the tribe, or the Indian housing
authority serving the tribe or tribes. Prohibits the Secretary
from selling, transferring, or otherwise disposing of or
alienating the property except to a tribal member, the tribe, or
the Indian housing authority.

Establishes the Indian Housing Loan Guarantee Fund in the
Treasury of the United States. Provides that the Guarantee Fund
shall be credited with any amounts, claims, notes, mortgages,
contracts, and property acquired by the Secretary and any
collections and proceeds therefrom; any amounts appropriated; any
guarantee fees collected; and any interest or earnings on amounts
invested.

Requires, subject to appropriations, amounts in the Guarantee
fund to be available, for: fulfilling any loan guarantee
obligations including the credit costs; paying taxes, insurance,
prior liens, expenses necessary to make fiscal adjustment in
connection with the application and transmittal of collections,
and other expenses and advances to protect the Secretary for
loans which are guaranteed under this section or held by the
Secretary; acquiring such security property at foreclosure sales
or otherwise; paying administrative expenses; and reasonable and
necessary costs or rehabilitation and repair to properties with
guaranteed loans that the Secretary holds or owns. Authorizes the
Secretary to invest in obligations of the United States, any
amounts in excess of those needed for the guarantee fund.

Authorizes, subject to appropriations, that the Secretary may
enter into commitments to guarantee loans under this section such
amount as may be provided in Appropriation Acts for each fiscal
year 1993 and 1994. Authorizes to cover the costs of
appropriation to the Guarantee Fund to carry out this section,
such sums as may be necessary for each of fiscal years 1993,
1994, and 1995.

Requires the Secretary by regulation, to establish housing safety
and quality standards which provide sufficient flexibility to
permit the use of various designs and materials in housing
acquired with guaranteed loans. Requires housing to be decent,
safe, sanitary, and modest in size and design; conform with
applicable general construction standards for the region; contain
a standard, safe and adequate heating system; contain a safe,
adequate and standard plumbing system; contain an electrical
system using wiring and

p. 19

equipment properly installed to safely supply electrical energy
for adequate lighting and for operation of appliances that
conforms to any applicable tribal or other code; include adequate
square footage for the family size from 570 square feet for 4
person family, 850 square feet for family between 5 and 7 persons
and 1020 square feet for family of 8, unless the Secretary grants
a waiver; and conform with the energy performance requirements
for new construction established by the Secretary.

Provides definitions for the Indian Guaranteed Loan Program.

Requires the Secretary to issue regulations subject to public
notice and comment.

Sec. 185. Assistance under section 8 for homeownership

Authorizes the use of section 8 program assistance for
homeownership if a family: is a first-time homeowner;
participates in the family self-sufficiency program or
demonstrates that the family has income from employment or other
sources (other than public assistance), as determined in
accordance with requirements of the Secretary, that is not less
than twice the payment standard established by the public housing
agency (or such other amount as may be established by the
Secretary); demonstrates at the time that family initially
receives assistance that one or more adult members of the family
have achieved employment for the period as required by the
Secretary; a family who participates in a homeownership and
housing counseling program provided by the agency; and meets any
other initial or continuing requirements created by the public
housing agency in accordance with requirements created by the
Secretary.

Provides for monthly assistance payments in an amount equal to
the difference between the fair market rent for the area and 30
percent of the family's monthly adjusted income; not to exceed
the difference between monthly homeownership expense and 10
percent of the family's monthly income. Prohibits the Secretary
from including in family income an amount imputed from the equity
of the family in determining assistance.

Requires the Secretary to recapture from any net proceeds the
amount of additional assistance (as determined in accordance with
the requirements established by the Secretary) paid to or on
behalf of the eligible family upon sale of the dwelling by the
family. Requires PHAs to ensure that each family assisted shall
provide from its own resources at least 80 percent of any
downpayment, including amounts from any escrow account for the
family established under family self-sufficiency. Requires that
not more than 20 percent of the downpayment may be provided from
other sources, such as from nonprofit entities and programs of
States and units of general local government.

Prohibits a family from receiving section 8 homeownership
assistance during any period when assistance is being provided
for the family under other Federal homeownership assistance
programs, including assistance under the HOME and HOPE programs,
title II of the Housing and Community Development Act of 1987,
and the Farmers Home Administration (FmHA) section 502 program.
Makes inapplicable provisions of the section 8 program which are
applicable only to rental housing.  Provides conditions in the
event of a default. Provides that for an FHA-insured mortgage,
the family may not continue to receive rental assistance under
this section unless: the family transfers to the Secretary
marketable title to the dwelling; moves from the dwelling within
the period established or approved by the Secretary; and agrees
that any amounts the family is required to pay to reimburse the
family self-sufficiency escrow account may be deducted by the
public housing agency from the assistance payment otherwise
payable on behalf of the family.

Provides that for other mortgages, if a family defaults the
family may not continue to receive rental assistance under this
section unless it complies with requirements established by the
Secretary. Provides that for all mortgages, if a family defaults
the family may not receive assistance for occupancy of another
dwelling owned by one or more members of the family.

Provides a definition of first-time homeowner as a family, no
member of which has had a present ownership interest in a
principal residence during the 3 years preceding the date on
which the family initially receives assistance for homeownership;
and any other family, as the Secretary may prescribe.

Requires HUD to ensure that the total number of dwellings
assisted through this homeownership option under the Section 8
program may not exceed 10,000 at any one time.

Provides for the use of 50 percent of the escrow savings accounts
under the family self sufficiency program for downpayments under
this section 8 homeownership option and authorizes any amounts
remaining in the escrow account to cover the costs of major
repair and replacement needs of the dwelling. Requires the
Secretary to recapture any remaining amounts in the event of a
default.

Provides use for the FHA insurance with section 8 homeownership
by amending section 203 of the National Housing Act to require
that such assistance shall be the obligation of the General
Insurance Fund and any payments or excess amounts shall be
retained in the General Insurance Fund.

                   Subtitle F-Implementation

Sec. 191. Implementation

Requires HUD to issue any final regulations necessary to
implement the provisions of this title and the amendments made by
this title not later than the expiration of the 180-day period
beginning of the date of the enactment of this Act, except as
expressly provided otherwise in this title and the amendments
made by this title. Such regulations must be issued after notice
and opportunity for public comment.

              Title II-Home Investment Partnership

Sec. 201. Authorization of appropriations

Authorizes for the HOME Investment Partnerships program (Title II
of NAHA) $2,169,440,000 for FY 1993; of which not more than
$14,560,000 is available for community housing partnership
activities under section 233 of NAHA and $11,440,000 for state
and local government activities under Title II, subtitle C of
NAHA.

Sec. 202. Elimination of restrictions of new construction

Eliminates the restrictions in the HOME program on new
construction and deletes the special new construction allocation
system.

Sec. 203. Use of tenant-based rental assistance amounts for
security deposits

Amends eligible activities to include loans and grants for
security deposits as a form of tenant based rental assistance.
Provides that families receiving security deposit assistance do
not have to be from section 8 waiting lists. Provides that an
eligible family may receive security deposit assistance, rental
assistance or both.

Sec. 204. McKinney Act activities for homeless persons as
eligible use of investment

Amends eligible activities to include activities under Title IV
of the McKinney Homeless Assistance Act. Provides that a
participating jurisdiction may chose to carry out such activities
pursuant to the McKinney Act requirements except that emergency
shelter projects may only be carried out if the jurisdiction's
CHAS includes a plan for meeting emergency shelter needs with
transitional or permanent housing within 5 years.

Sec. 205. Percent cost limits

Amends cost limits requirements to establish minimum cost limits
equal to the per unit dollar limitation for the section 221(d)(3)
program, as adjusted, except that in high cost areas where costs
exceed the national average, the limit shall be increased by an
amount not to exceed 140 percent. Requires the Secretary to
implement the increase in the limits by regulation.

Prohibits the Secretary from carry out or making final the
maximum per-unit subsidy provisions of 24 C.F.R. Section 92.250
as provided in the interim HOME rules. Such provisions limited
per unit investments under HOME to 67 percent of the limits
applicable to section 221(d)(3) projects and required a reduction
in the HOME subsidy for projects using HOME funds and the LIHTC.

Sec. 206. Administrative costs as eligible use of investment

Provides that each participating jurisdiction may use not more
than 10% of the HOME funds for administrative costs. Prohibits
the use of CDBG administrative funds as eligible match for HOME
funds.

Sec. 207. Qualifications as affordable rental housing

Amends the requirements for affordable housing to make current
rules apply only to housing that is not assisted by the Low
Income Housing Tax Credit (LIHTC) and provides an exception to
the rent rules such that families pay the lesser of rents under
the HOME program or rents required under state or local laws.

Adds as affordable housing (1) housing assisted by the LIHTC if
the housing meets the targeting and rent restrictions of the
LIHTC and (2) housing in a qualified census tract and has not
more than 33% of the units occupied by families with incomes at
or below 100% of area median who pay as rent an amount not
exceeding 30% of the adjusted income of a family whose income
equals 80% of the area median income; and 10 percent of the units
occupied by families with incomes not more than 35 percent of the
area median, paying rent in an amount not exceeding 30 percent of
the adjusted income of a family whose income equals 35% of the
area median.

Defines ``qualified census tract'' to mean any census tract in
which 50 percent or more of the households have an income which
is less than 60 percent of the median family income for the area.

Sec. 208. Resale of homeownership housing

Amends the HOME resale provisions to delete the existing
requirements and to create a lien on the property transferred for
homeownership equal to the amount of HOME funds attributable to
the property. Provides that the lien be satisfied from the net
proceeds, if any, that result from the subsequent sale of the
property.

Sec. 209. Matching requirements

Provides for a flat match of 10 percent for all activities under
the HOME program and makes cash obtained from public debt
financing and public bond issuances eligible as match so long as
such cash is provided to HOME housing.

Expands the forms of eligible match to include donated materials
or labor provided for HOME housing.

Amends the requirement for a reduction of match to require a
waiver of all matching requirements for a participating
jurisdiction that is not a State, if such jurisdiction certifies
that any 3 of the following 5 requirements are met:

(1) The average unemployment rate in the jurisdiction for the
calendar year immediately preceding the year in which such fiscal
year begins was equal to or greater than 150 percent of the
average national unemployment rate during such calendar year (as
determined according to information of the Bureau of Labor
Statistics of the Department of Labor).

(2) The rate of growth in the labor force in the jurisdiction for
the 2 calendar years immediately preceding the year in which such
fiscal year begins was less than 75 percent of the rate of growth
in the national labor force during the same 2-year period (as
determined according to information of the Bureau of Labor
Statistics of the Department of Labor).

(3) The ratio of the amount of tax revenue collected per capita
in the jurisdiction to the per capita income in the jurisdiction
(as determined by the jurisdiction) for the calendar year
immediately preceding the year in which such fiscal year begins
was equal to or greater than 150 percent of the average for all
participating jurisdiction of the ratio of tax revenue collected
per capita in the participating jurisdictions to the per capita
income in all participating jurisdictions (as determined
according to information on the Bureau of the Census).

(4) The average poverty rate in the jurisdiction for the calendar
year immediately preceding the year in which such fiscal year
begins was equal to or greater than 125 percent of the average
national poverty rate during such calendar year (as determined
according to information of the Bureau of the Census).

(5) The average per capital income in the jurisdiction for the
calendar year immediately preceding the year in which such fiscal
year begins was less than 75 percent of the average national per
capita income during such calendar year (as determined according
to information of the Bureau of the Census).

Provides that to obtain a match waiver a jurisdiction may also
certify that(1) the average poverty rate in the jurisdiction for
the calendar year immediately preceding the year in which such
fiscal year begins was equal to or greater than 150 percent of
the average national poverty rate during such calendar year (as
determined according to information of the Bureau of the Census);
or (2) the average per capita income in the jurisdiction for the
calendar year immediately preceding the year in which such fiscal
year begins was less than 50 percent of the average national per
capita income during such calendar year (as determined according
to information of the Bureau of the Census) and obtain such a
waiver.

Sec. 210. Assistance for insular areas under the HOME Investment
Partnerships Act

Provides that insular areas (Guam, the Virgin Islands, American
Samoa and the Northern Marianas) shall receive from any funds
appropriated for the HOME program the greater of $750,000 or .2
percent of appropriated amounts.

Sec. 211. Use of assistance to establish community housing
development organizations

Provides that if there is no community housing development
organizations is a participating jurisdiction, such jurisdiction
can use 5 percent of its HOME funds for technical assistance to
create such entity and if such an entity is created within 18
months after the initial reservation of HOME funds then the
jurisdiction and the CHDO have an additional 18 months to invest
the necessary CHDO set-aside funds in affordable housing.

Sec. 212. Housing education and organizational support for
community land trusts

Amends the housing education and organizational support grant
program to add community land trusts as an eligible activity.
Provides that not less than 10 percent of the funds made
available for this section shall be made available only for
eligible contractors with specific expertise in the
establishment, organization, and management of community land
trusts.

Defines ``community land trust'' as a community housing
development organization that is not sponsored by a for-profit
organization; that is established to acquire parcels of land,
held in perpetuity, primarily for conveyance under long-term
ground leases; transfers ownership of any structural improvements
located on such leased parcels to the lessees; and retain a
preemptive option to purchase any such structural improvement at
a price determined by formula that is designed to ensure that the
improvement remains affordable to low- and moderate-income
families in perpetuity; whose corporate membership is open to any
adult resident of a particular geographic are specified in the
bylaws of the organization; and whose board of directors includes
a majority of members who are elected by the corporate
membership; and is composed of equal numbers of lessees,
corporate members who are not lessees, and any other category of
persons described in the bylaws of the organization. Requires the
Secretary to issue regulations subject to public notice and
comment not later than the expiration of the 120-day period
beginning on the date of the enactment of this Act.

Amends housing education and organizational support grants
further to add technical assistance grants to promote women in
homebuilding. Provides that grants may be made available to
businesses, unions, builders and contractors involved in the
production of housing for low- and moderate-income families to
assist women obtain jobs in the non-traditional construction
trades. Provides for pre-employment training, apprenticeships,
and continuing support to women employed in the construction
trades including materials and tools in an amount not to exceed
10 percent of any grant. Requires the Secretary to give priority
to grant applications for organizations rehabilitating housing
owned or controlled by the Secretary pursuant to Title II of the
National Housing Act and which have 25 percent or less women
employees.

Defines eligible grant recipients as community based
organizations as defined under the Job Training Partnership Act
or public housing agency with experience in apprenticeship
training or other construction training for women.

Requires the Secretary to provide assistance in each of the HUD
regions unless there are no applications filed.

Sec. 213. Land bank redevelopment

Amends priorities for the capacity development under Subtitle
C-Other Support for State and Local Housing Strategies to include
the development of land bank programs operated by local
governments to clear title of vacant or abandoned parcels for use
or disposition by the local government. Requires that not less
than 5 percent of the funds under this section shall be used for
this purpose each fiscal year.

Sec. 214. Research in providing affordable housing through
innovative building techniques and technology

Amends the authorization for research on housing affordability to
include cost-saving innovative building technology and
construction techniques.

Sec. 215. Use of innovative building technologies to provide
cost-saving housing opportunities

Requires the Secretary to make available a model program to
utilize cost-saving building technologies and construction
techniques for purposes of providing homeownership and rental
opportunities for eligible families. Requires the Secretary to
establish selection criteria for projects including the extent to
which innovative, cost-saving building and construction
technologies and techniques are utilized; the extent to which
units will be made available to low-income families and
individuals; the extent to which non-Federal public or private
assistance is utilized; and any other factor, determined by the
Secretary to be appropriate. Requires the Secretary to publish
guidelines for the model program not later than 180 days after
the date of the enactment of this Act, and to submit a biennial
report to Congress on the results of the model program.

Sec. 216. Definition of community housing development
organization

Prohibits the Secretary for limiting compliance with the
definition of community housing development organization (CHDO)
to a single criterion based on the number or percentage of
low-income residents serving on the Board of Directors. Prohibits
the Secretary from requiring board membership from low-income
residents of each county served in the case of multi-county
CHDOs.

Sec. 217. Inclusion of ECHO housing in definition of housing

Amends the definition of manufactured housing to include Elder
Cottage Housing Opportunities (ECHO) which are small free
standing units installed adjacent to existing family dwelling.

Sec. 218. Eligibility of manufactured homeowners as first time
homebuyers

Provides that any individual who owns or owned a manufactured
home during the most recent 3 year period can be considered a
first time homebuyer.

Sec. 219. Eligibility for assistance and contents of strategies

Requires that the Comprehensive Housing Assistance Strategy
include tabular information on the extent of homelessness in the
jurisdiction.

Requires that in its CHAS a jurisdiction must certify that it has
in place and is following a residential antidisplacement and
relocation assistance plan that in the case of any displacement
that results from HOME activities will provide the same rights
and require the same actions as are provided and required in
connection with a displacement under the CDBG program.

Requires that in its CHAS a jurisdiction must describe its goals,
programs, and policies for addressing the needs of households
below the poverty line.

Sec. 220. Regulations

Requires the Secretary to issue any regulations to implement the
provisions of the title within 180 days subject to notice and
comment unless otherwise provided in this title.

          TITLE III-PRESERVATION OF LOW-INCOME HOUSING

Sec. 301. Authorization of appropriations

Authorizes $892,320,000 for the preservation program under title
II of the Housing and Community Development Act of 1987 for FY
1993, of which $100,000,000 is authorized for preservation
grants.

Sec. 302. Revision of short title

Deletes ``Resident Homeownership'' for the title of the 1990
amendments and makes conforming changes. The revised short title
is the Low Income Housing Preservation Act of 1990.

Sec. 303. Residual receipts and reserve for replacement accounts

Amends preservation value for purposes of transferring the
property to include reserves for replacement. Amends incentives
for transfer to qualified purchasers to permit owners to retrain
residual receipts upon transfer without deduction from the sales
price. Amends incentives to extend low income use to prohibit the
Secretary from reducing an owner's annual return as a result of
the release of residual receipts.

Sec. 304. Submission of information to tenants

Amends the Low Income Housing Preservation Act of 1990 to require
owners to submit to the tenants all supporting information
sufficient to prepare a plan and bid for purchasing the housing,
including appraisals. Amends the Emergency Low Income Housing
Preservation Act of 1987 to require owners to submit to tenants
the plan of action with supporting information including
appraisals sufficient to prepare a plan and bid for purchasing
the housing.

Sec. 305. Approval of plan of action

Requires the Secretary to base written findings for prepayment on
an analysis of documented evidence and to develop by regulation,
subject to notice and comment, a procedure for such analysis,
requirements for specific evidence, and criteria for making such
written findings.

Sec. 306. Receipt of incentives to extend low-income use

Requires the Secretary to provide incentives for each year after
the approval of the plan of action.

Sec. 307. Elimination of windfall profits test

Eliminates the windfall profit test.

Sec. 308. Unit rent criteria for approval of plan of action

Requires the Secretary to approve a plan of action only upon a
finding that, to the extent practicable, rents for units will be
available and affordable in the same proportions (very
low-income, low-income and moderate-income families or persons)
as resided in the housing as of one year before filing of the
notice of intent or approval of the plan of action, whichever
date results in the higher proportion of low-income families.

Sec. 309. Resident homeownership program

Limits the Secretary's approval authority of resident
homeownership programs by prohibiting the Secretary from
requiring the prepayment of the assisted mortgage and the
termination of affordability restrictions as a condition of
approval of plans of action for resident homeownership programs.

Provides that affordability restrictions continue to apply as
long as housing remains rental housing.

Provides that limited equity cooperatives are not required to
transfer ownership to individual tenants under a resident
homeownership program.

Sec. 310. Incentives under Emergency Low Income Housing
Preservation Act

Prohibits the Secretary from denying any incentive to an owner
that files a plan of action under the 1987 Act based solely on
the date the plan was filed.

Sec. 311. Delegated responsibility to State agencies

Requires the Secretary to publish specific regulations for notice
and comment for the delegated processing of preservation programs
by State agencies.

Sec. 312. Insurance for second mortgage financing

Provides that Section 241(f) equity loans shall have a term of 40
years and that the Secretary shall combine Section 241
rehabilitation loans with section 241 equity and acquisition
loans, if appropriate.

Establishes a transition rule for those projects that elect to be
subject to the Emergency Low Income Housing Preservation Act of
1987 such that the provisions of the equity take out loans which
predate the enactment of NAHA will apply to such eligible
property.

Requires that the Secretary issue regulations within 45 days to
implement the risk sharing with State agency provisions for
second mortgage financing and the other provisions of section
241(f).

Sec. 313. Supplemental loans

Requires that the Secretary insure or make commitments to insure
multifamily projects in amounts up to 100 percent of the
replacement cost if the loan is in conjunction with an approved
plan of action under the Low-Income Housing Preservation Act of
1990.

Sec. 314. Technical amendments

Corrects section references and typographical errors.

Sec. 315. Regulations

Requires the publication of regulations within 30 days of
enactment of this Act to implement the provisions of this Act.

Sec. 316. Study of projects assisted under flexible subsidy
program

Requires the Secretary to conduct a study of housing projects
assisted under sections 236 and 221(d)(5) that are receiving
flexible subsidy and that are partially assisted to determine the
cost of providing such projects with incentives under the
Low-Income Housing Preservation Act of 1990 and to report to
Congress within one year after enactment.

TITLE IV-MULTIFAMILY HOUSING PLANNING AND INVESTMENT STRATEGIES

Sec. 401. Required submission

Requires the owner of each covered multifamily housing property
and each covered multifamily property for the elderly to submit
to the Secretary a comprehensive needs assessment of the property
under this subtitle.

Requires the Secretary to require the owners of approximately
one-third of the aggregate number of covered multifamily housing
properties and covered multifamily housing for the elderly to
submit the comprehensive needs assessments under this section for
the properties in each of fiscal years 1993, 1994, and 1995, in a
manner designed to ensure that upon the conclusion of fiscal year
1995 the assessments for all such properties have been submitted.

Sec. 402. Contents

Provides that each comprehensive needs assessment must contain:

(1) A description of any financial or other assistance currently
needed for the property to ensure that the property is maintained
in a livable condition and to ensure the financial viability of
the project.

(2) A description of any financial or other service assistance
for the property that, at the time of the assessment, is
reasonably foreseeable as necessary to ensure that the property
is maintained in a livable condition and to ensure the continued
financial viability of the project during the remaining useful
life of the property.

(3) A description of any resources available for meeting the
current and future needs of the property described under
paragraphs (1) and (2) and the likelihood of obtaining such
resources.

(4) A description of applications and requests for any assistance
for the property made available under programs administered by
the Secretary.

Requires for covered multifamily projects for the elderly in
addition that the comprehensive needs assessment include (1) a
description of supportive services needs of residents and
services provided; (2) a description of modernization needs and
activities; (3) a description of personnel needs.

Sec. 403. Submission and review

Authorizes the Secretary to establish to form and manner of
submission of the comprehensive needs assessments under this
subtitle, and to require each owner to make available to the
residents the comprehensive needs assessment. Requires that such
residents be given an opportunity to submit comments and opinions
regarding the assessment.

Provides that if a covered multifamily housing or covered
multifamily housing property for the elderly is financed or
assisted by a State housing finance agency, the Secretary must
require the owner of the property to submit the comprehensive
needs assessment for the property to the State housing finance
agency upon submitting the assessment to the Secretary.

Provides that the Secretary review each comprehensive needs
assessment and approve the assessment before the expiration of
the 90-day period beginning upon the receipt of the assessment,
unless the Secretary determines that the assessment has not been
provided in a substantially complete manner.

Requires the Secretary to consider the cost of preparing the
comprehensive needs, not to exceed $5000, as an eligible project
expense except that owners may not request rent increases to
cover the cost of assessment.

Requires the Secretary to immediately notify each owner
submitting a comprehensive needs assessment of the approval or
disapproval of the assessment upon making such determination.
Provides for written notice of the disapproval and a resubmission
process.

Requires the Secretary annually to conduct a review of (1)
funding levels necessary to fully address the needs of covered
multifamily housing properties for the elderly as to repairs
retrofitting, and amenities; (2) adequacy of the geographic
targeting of resources provided by HUD programs with respect to
covered housing for the elderly; and (3) local housing market
needs resources, and costs of multifamily housing for the elderly
persons and families, including review of CHAS documents.

Requires the Secretary to submit a report to Congress describing
the assessments and annual reviews, methodology used by owners
and any recommendations.

Sec. 404. Definitions

Provides that ``covered multifamily housing property'' means any
housing that is reserved for occupancy by very low-income elderly
persons pursuant to section 202(d)(1) of the Housing Act of 1959;
financed by a loan or mortgage insured, assisted, or held by the
Secretary or a State or State agency under section 236 of the
National Housing Act; or financed by a loan or mortgage insured
or held by the Secretary pursuant to section 221(d)(3) of the
National Housing Act; and hat is not eligible for assistance
under the Low-Income Housing Preservation and Resident
Homeownership Act of 1990; the provisions of the Emergency Low
Income Housing Preservation Act of 1987 (as in effect immediately
before the date of the enactment of the Cranston-Gonzalez
National Affordable Housing Act); or the HOME Investment
Partnerships Act.

    TITLE V-MORTGAGE INSURANCE AND SECONDARY MORTGAGE MARKET

           Subtitle A-FHA Mortgage Insurance Programs

Sec. 501. Limitation on FHA insurance authority

Limits aggregate FHA mortgage insurance authority to
$66,184,980,000 for FY 1993. Authorizes $631,800,000, to cover
the costs of FHA insurance obligations.

Sec. 502. Federal Housing Administration Advisory Board

Extends the Federal Housing Administration Advisory Board until
January 1, 1995.

Sec. 503. Maximum mortgage amount

Provides that the maximum loan obligation for mortgages on single
family residences insured under the Mutual Mortgage Insurance
Fund is an amount not to exceed the lesser of 95% of the median
one-family house prices in the area or 75% of the FHLMC
limitation, adjusted annually, except that no area may have a
maximum mortgage amount less than the area's limitation in effect
on May 12, 1992.

Provides further that the principal obligation may not exceed 97%
of $25,000 of the appraised value, 95% of such value in excess of
$25,000 but not exceeding $125,000, and 90% of such value in
excess of 125,000. Provides conforming amendments.

Sec. 504. Maximum principal obligation of FHA mortgages for
veterans

Restores the veteran exemption from the FHA equity requirements.

Sec. 505. Prohibition on limitation of closing costs financed

Prohibits the Secretary from using discretionary authority to
establish any limit on the amount of closing costs that can be
financed under an FHA insured single family loan.

Sec. 506. Prepurchase counseling requirement

Prohibits the Secretary from insuring, or entering into a
commitment to insure, a mortgage that involves a principal
obligation (including such initial service charges, appraisal,
inspection, and other fees as the Secretary shall approve) in
excess of 97 percent of the appraised value of the property
unless the mortgagor has completed a program of counseling with
respect to the responsibilities and financial management involved
in homeownership that is approved by the Secretary. Authorizes
the Secretary to waive the applicability of this requirement.
Makes this effective 1 year from the date of enactment.

Sec. 507. Authority to decrease insurance premium charges

Provides the Secretary with authority to decrease insurance
premium charges.

Sec. 508. Statute of limitations for distributive shares

Prohibits Secretary from making any distributions from the MMI
Fund if a mortgagor does not apply for such distribution within
10 years from the date that the Secretary sends notification to
the mortgagor of eligibility to the last known address.

Sec. 509. Mortgage limits for multifamily projects

Increases mortgage limits by 20% and requires that such dollar
amount limitations be increased on an annual basis by a factor
corresponding to the Consumer Price Index for the following FHA
multifamily programs: Sec. 207, Sec. 213, Sec. 220, Sec.
221(d)(3), Sec. 221(d)(4), Sec. 231, and Sec. 234. Provides
conforming amendments.

Sec. 510. Insurance of loans for operating losses of multifamily
projects

Prohibits the Secretary from reducing the amount of operating
loss loan to be insured solely to reflect any amounts placed in
escrow (at the time the existing project mortgage was insured)
for initial operating deficits.

Sec. 511. Eligibility of assisted living facilities for mortgage
insurance under section 232.

Makes eligible for FHA mortgage insurance, the development of
assisted living facilities for the care of frail elderly persons.
Defines the term ``assisted living facility'' to mean a public
facility, proprietary facility, or facility of a private
nonprofit corporation that (A) is licensed and regulated by the
State (or if there is no State law providing for such licensing
and regulation by the State, by the municipality or other
political subdivision in which the facility is located); (B)
makes available to residents supportive services to assist the
residents in carrying out activities of daily living, such as
bathing, dressing, eating, getting in and out of bed or chairs,
walking, going outdoors, using the toilet, laundry, home
management, preparing meals, shopping for personal items,
obtaining and taking medication, managing money, using the
telephone, or performing light or heavy housework, and which may
make available to residents home health care services, such as
nursing and therapy; and (C) provides separate dwelling units for
residents, each of which contains a full kitchen and bathroom,
and which includes common rooms and other facilities appropriate
for the provision of supportive services to the residents of the
facility.

Prohibits the Secretary from insuring any mortgage with respect
to assisted living facilities or any such facility combined with
any other home or facility unless-(i) the Secretary determines
that the level of financing acquired by the mortgagor and any
other resources available for the facility will be sufficient to
ensure that the facility contains dwelling units and facilities
for the provision of supportive services; (ii) the mortgagor
provides assurances satisfactory to the Secretary that each
dwelling unit in the facility will not be occupied by more than 1
person without the consent of all such occupants; and (ii) the
appropriate State licensing agency for the State, municipality,
or other political subdivision in which the facility is or is to
be located provides such assurances as the Secretary considers
necessary that the facility will comply with any applicable
standards and requirements for such facilities.

Requires the Secretary to submit a report to the Congress
annually describing such schedules and deadlines and the extent
of compliance by the Department with the schedules and deadlines
during the year.

Sec. 512. Authorization of appropriations for multifamily housing
mortgage insurance field office staff

Authorizes $100,000,000 for FY 1992, to be used to provide staff
in regional, field, or zone offices of HUD to review, process,
approve, and service applications for mortgage insurance under
title II of NAHA for housing consisting of 5 or more dwelling
units.

Sec. 513. Expediting insurance for acquisition of RTC property

Requires the Secretary to establish an expedited procedure to
ensure the timely processing of applications for FHA insurance of
loans and mortgages that will be used to purchase multifamily
residential property from the RTC. Requires the Secretary to
issue interim regulations within 90 days of enactment.

Sec. 514. Energy efficient mortgage pilot program

Requires the Secretary to establish an energy efficient mortgage
pilot program in 5 States to promote the purchase of new and
existing energy efficient residential buildings and the
installation of cost effective improvements in existing
residential buildings. Requires that, to be eligible, (1) the
base loan must be an FHA insured mortgage; (2) the mortgagor must
have a satisfactory income and credit record and must have an
approved application for a base loan; and (3) the costs of
cost-effective energy efficiency improvements to the mortgaged
property do not exceed 5% of the value of the property (not to
exceed $8,000) or $4,000, whichever is greater.

Authorizes the Secretary to insure energy efficient mortgages
under the pilot program and to grant mortgagees the authority to
(1) permit the total loan amount covered by the mortgage to
exceed the maximum allowable amount under FHA by an amount not to
exeed 100% of the cost of the cost-effective energy efficiency
improvements, provided that the mortgagor's request to add the
cost of such improvements is recieved by the mortgagee before
funding the base loan; (2) hold in escrow all funds provided to
the mortgagor to undertake the energy efficiency improvements
until such improvements are actually installed; (3) transfer or
sell the energy efficient mortgage to an appropriate secondary
market agency after the mortgage is issued but before the energy
efficiency improvements are actually installed.

Requires the Secretary to promote participation in this program
by (1) making information available to lending agencies and other
appropriate authorities regarding the availability and benefits
of energy efficient mortgages; (2) requiring mortgagees and
designated lending authorities to provide written notice of the
availability and benefits of the pilot program to mortgagors
applying for financing in States designated by the Secretary for
participation in the pilot program; (3) requiring all applicants
for FHA mortgage insurance in participating States to sign a
statement stating that they have been informed of the program and
understand the procedures and benefits of the program.

Requires the Secretary, in consultation with the National Home
Energy Rating System Council and other appropriate organizations,
to establish and implement a program for training personnel at
lending institutions, real estate companies, and other
appropriate organizations, regarding the benefits of energy
efficient mortgages and the operation of the pilot program.

Requires the Secretary to submit a report on the program and an
assessment of potential for expansion within 18 months of
enactment.

Requires that, within 2 years beginning on the date of
implementation, the Secretary expand the pilot program on a
nationwide basis, unless he or she determines that such an
extension would not be practicable and has submitted to Congress
a report explaining why the program should not be expanded.

Provides definitions.

Authorizes to be appropriated such sums as may be necessary.

Sec. 515. Title I manufactured home loan insurance limits

Increase the Title I manufactured home loan insurance limits to
70% of the median 1-family house price in the area for financing
the purchase of a manufactured home; 80% of the median 1-family
house price in the area for financing the purchase of a
manufactured home and a suitably developed lot; and the greater
of (i) 20% of the median 1-family house price in the area or (ii)
$13,500 to purchase, by an owner of a manufactured home, which is
the principle residence of the owner, of a suitably developed lot
on which to place that manufactured home on the lot acquired with
such loan within 6 months after the date of such loan.

Sec. 516. Study regarding home warranty plans

Requires the Secretary to conduct a study of warranties and
protection plans regarding the construction of, and materials
used in, 1- to 4-family dwellings subject to mortgages insured
under title II of NAHA. Requires that the study analyze the
extent to which home sellers and builders use such warranties and
plans, how such warranties and plans affect the single family
mortgage insurance program under NAHA and the solvency of the MMI
Fund, any effects on homeowners reliance upon such warranties and
plans, the cost of inspections of mortgaged homes not covered by
such warranties or plans, and any other issues relating to such
warranties and plans that the Secretary considers appropriate.
Requires the Secretary to submit a report to Congress regarding
the findings of the study and any recommendations of the
Secretary resulting from the study, not later than the expiration
of the 12-month period beginning on the date of the enactment of
this Act.

         Subtitle B-Secondary Mortgages Market Programs

Sec. 531. Limitation on GNMA guarantees of mortgages-backed
securities

Limits aggregate GNMA mortgage-backed security guarantee
authority to $77,700,000,000 for FY 1993. Authorizes $6,936,000
to cover the costs of such guarantees.

Sec. 532. Authority for GNMA to make hardship interest payments

Authorizes GNMA to make payments of interest on the guaranteed
security in any case in which Federal law requires the reduction
of the interest rate on any mortgage backing a security
guaranteed by GNMA and under which the mortgagor is a person in
the military service in amounts not exceeding the difference
between the amount payable under the interest rate on the
mortgage and under such reduced interest rate.

TITLE VI-HOUSING FOR ELDERLY PERSONS, HANDICAPPED PERSONS, AND
PERSONS WITH DISABILITIES

Subtitle A-Supportive Housing Programs

Sec. 601. Supportive housing for the elderly

Authorizes for the new 202 program (section 202 of the Housing
Act of 1959 as amended by Section 801 of NAHA) $685,000,000 for
FY 1993 for project advances and authorizes the reservation of
$765,722,496 in rental assistance for such projects. Makes
technical corrections in the authorizing statute.

Requires ECHO housing demonstration of 200 units, 100 each under
the section 202 program and the section 811 program for persons
with disabilities. Requires report to Congress and regulations
within 6 months to implement the demonstration.

Requires the Secretary to authorize owners to use residual
receipts in excess of $500 per unit for retrofitting renovations,
service coordinators, and supportive services and requires owners
to submit a report to the Secretary of such usage.

Requires Secretary to convert a previously approved section 202
project in Torrington, Wyoming for the Torrington Volunteers of
America from the old section 202 program to the revised section
202 program of capital advances and rental assistance.

Sec. 602. Supportive housing for persons with disabilities

Authorizes for supportive housing for person with disabilities
(section 811 of NAHA) $281,840,000 for FY 1993 for project
advances and authorizes the reservation of $325,122,688 in rental
assistance for such projects.

Sec. 603. Revised congregate housing services program

Authorizes for the revised congregate housing services program
(section 803 of NAHA) $27,144,000 for FY 1993. Requires the
Secretary to issue regulations for the revised program not later
than 75 days after enactment of this Act.

Sec. 604. HOPE for independence of elderly persons and persons
with disabilities

Authorizes for the HOPE for independence of elderly persons and
persons with disabilities demonstration (section 802 of NAHA) an
increase above current section 8 funding levels provided in this
bill of $36,920,000 in the low-income housing account for
assistance under section 8 and authorizes $10,816,000 for
supportive services. Provides that the demonstration period will
be a full five years. Amends the demonstration to include persons
with disabilities as eligible receipts of assistance in addition
to frail elderly persons.

Sec. 605. Housing opportunities for persons with AIDS

Authorizes for the various AIDS housing programs (Title VIII,
subtitle D of NAHA) $162,760,000 for FY 1993.

Amends the AIDS housing program to make technical corrections to
the formula allocation system; to allow the families of persons
with AIDS to receive housing assistance under the programs; to
allow grantees to use up to 3% of grant amounts for
administrative expenses and to limit a project sponsor's
administrative expenses to 7% of grant funds; and to make other
technical and clarifying corrections.

SUBTITLE B-AUTHORITY FOR PUBLIC HOUSING AGENCIES TO PROVIDE
DESIGNATED PUBLIC HOUSING AND ASSISTANCE FOR HANDICAPPED AND
DISABLED FAMILIES

Sec. 621. Definitions.

Amends the definition of eligible persons and families in the
United States Housing Act of 1937 to include a single person
consisting of an elderly person, a disabled person, a handicapped
person, a displaced person, the remaining member of a tenant
family, and any other single persons, except that any single
person who is not elderly, disabled, handicapped or displaced can
be provided a housing unit of 2 or more bedrooms. Requires the
Secretary to give preference to single persons who are elderly,
disabled, handicapped, or displaced persons before other single
persons.

Amends the definition of ``families'', in the cases of elderly
families, near-elderly families, disabled families, and
handicapped families, means families whose heads (or their
spouses), or whose sole members, are elderly, near-elderly,
disabled, or handicapped persons, respectively. The term
includes, 2 or more elderly, near-elderly, disabled, or
handicapped individuals living together, and 1 or more such
individuals living with 1 or more persons determined under the
regulations of the Secretary to be essential to their care or
well-being.

Provides that the temporary absence of a child from the home due
to placement in foster care shall not be considered in
determining family composition and family size.

Defines ``elderly person'' as a person who is at least 62 years
of age; ``disabled person'' as a person who is under a disability
as defined in section 223 of the Social Security Act or who has a
developmental disability as defined in section 102 of the
Developmental Disabilities Assistance and Bill of Rights Act;
handicapped person as a person who is determined, pursuant to
regulations issued by the Secretary, to have an impairment which
is expected to be of long-continued and indefinite duration,
substantially impedes such person's ability to live
independently, and is of such a nature that such ability could be
improved by more suitable housing conditions; ``displaced
person'' as a person displaced by governmental action, or a
person whose dwelling has been extensively damaged or destroyed
as a result of a disaster declared or otherwise formally
recognized pursuant to Federal disaster relief laws;
``near-elderly person'' as a person who is at least 50 years of
age but below the age of 62.''

Sec. 622. Authority

Authorizes a public housing agency whose allocation plan (and any
annual update) has been approved by the Secretary to provide
public housing projects (or portions of projects) designed or
designated for occupancy by only elderly families, only disabled
families, only handicapped families, or any combination of such
families to the extent identified in the allocation plan.

Authorizes the public housing agency to make units in such
designated projects (or portions) available only to the types of
families for whom the project is designated. Requires that for
such types of families, preference for occupancy in such projects
(or portions) shall be given according to the federal preferences
for occupancy.

Requires a public housing agency providing a project (or portion
of a project) designed or designated for occupancy to make units
in such projects (or portions) available to other types of
families, as provided in the allocation plan, if there are
insufficient numbers of such types of families to fill all the
units in the project (or portion).

Authorizes the PHA, pursuant to the approved allocation plan, to
provide that near-elderly families may occupy dwelling units in
the project (or portion) if there are insufficient numbers of
elderly families to fill all the units in a project (or portion
of a project) designated for the elderly.

Requires a public housing agency to make any dwelling unit in a
designated project that has been vacant for more than 60
consecutive days generally available for occupancy, except that
for the first 2 years after such designation a PHA may maintain
an occupancy rate of 90 percent for 60 days before making units
generally available. Requires the PHA to maintain a tenant's
place on the waiting list if the tenant chooses not to occupy a
unit offered unless the decision is based on race, color, or
national origin of the other occupants in the area.

Requires a public housing agency to offer occupancy in dwelling
unit of appropriate size for the family. Prohibits any PHA from
evicting or otherwise requiring any tenant to vacate any unit
because of any designation. Authorizes a public housing agency to
transfer tenants to another dwelling unit if the tenant is not
the type of family for whom the project is designated at the
request of the tenant.

Authorizes each public housing agency to meet the housing and
service needs of eligible families applying for assistance, as
provided in any allocation plan of the agency by providing
housing in which supportive services are provided, facilitated,
or coordinated, mixed housing, shared housing, family housing,
group homes, congregate housing, and other housing as the public
housing agency considers appropriate; by carrying out major
reconstruction of obsolete public housing projects and
reconfiguration of public housing dwelling units; and by
providing assistance under Section 8.

Defines ``congregate housing'' as low-rent housing with a central
dining facility where operating costs in connection with the
operation of a central dining facility other than cost of food
and service are considered eligible expenditures.

Requires a public housing agency to submit an allocation plan to
be eligible to designate projects. Provides that an allocation
plan shall provide a tenant profile; provide a profile of the
pool of applicants for such housing; provide a profile of the
estimated pool of applicants for such housing for the ensuing
5-year period as included in the CHAS; identify the projects or
portions of projects (including the buildings or floors) to be
designated for occupancy for only certain types of families;
provide a vacancy analysis for the preceding year and the ensuing
2 years; provide a plan for ensuring that designating projects
(or portions of projects) for occupancy will not, to the extent
practicable, result in the public housing agency providing public
housing units or assistance for fewer handicapped and disabled
families than were assisted by the agency before such designation
unless the allocation plan indicates the need for a reduction;
describe how the public housing agency will meet the needs of any
families who are residing in a designated project (or portion but
are not the type of family for whom the project (or portion) is
designated, including describing any incentives that will be made
available to such families to voluntarily move from such projects
(or portions); state the amount of section 8, major
reconstruction of obsolete projects and development or
acquisition assistance that the public housing agency will
reserve or apply for during the ensuring 2 fiscal years for
elderly, handicapped and disabled families.

Requires a public housing agency to consult with the State or
unit of general local government and to hold 1 or more public
hearings to obtain the view of citizens, public agencies,
advocates for the interests of elderly persons, handicapped
persons, and disabled persons, and other interested parties in
developing the allocation plan.

Requires the Secretary to approve an allocation plan if the
Secretary determines that: the information is complete and
accurate and the projections are reasonable; and implementation
of the plan will not result in excessive vacany rates in projects
(or portions of projects) and the plan reasonably ensures
maintenance of effort for disabled and handicapped families.

Requires the Secretary to notify each public housing agency in
writing of approval or disapproval of the plan, except that the
plan shall be considered to be approved after 45 days, if no
notice is provided. Requires each public housing agency to update
the allocation plan to the same criteria not less than once every
2 years, as the Secretary shall provide. Requires the Secretary
to notify each public housing agency in writing of approval or
disapproval of the plan, except that the updated plan shall be
considered to be approved after 45 days if no notice is received.
Requires the Secretary to permit amendments to, or the
resubmission of the updated allocation plan for 45 days after
notice of disapproval. Provides that approval of an allocation
plan or update shall not constitute approval for a request of
assistance under MROP or new development.

Sec. 623. Section 8 assistance for handicapped and disabled
families

Requires each public housing agency that designates any public
housing project (or portion of a project) for occupancy to apply
for the amount of tenant- and project-based assistance necessary
as determined under the allocation plan for handicapped and
disabled families and to apply the federal preferences.

Sec. 624. Development and reconstruction of housing for
handicapped and disabled families

Requires the Secretary to commit not less than 5 percent of any
amounts reserved under the major reconstruction of obsolete
projects for public housing agencies that have designated
projects (or portions of projects) for occupancy for use only for
the reconfiguration of portions of public housing projects into
dwelling units of sizes appropriate for single persons who are
not elderly persons and groups of such single persons. Requires
the Secretary to consider the need for any such amounts as
identified in the allocation plans submitted by agencies.

Requires the Secretary to reserve not less than 5 percent of any
amounts approved in appropriation Acts for such fiscal year for
public housing development grants that are not designated for the
substantial redesign, reconstruction, or redevelopment of
existing public housing projects, buildings, or units for public
housing agencies that have designated projects (or portions of
projects) for occupancy for use only for the costs of development
or acquisition of public housing projects or buildings designed
to meet the special needs of handicapped and disabled families
who are not elderly families.

Requires the Secretary to carry out a competition for such budget
authority and to allocate such budget authority to public housing
agencies pursuant to the competition, based on the need of the
agency for such assistance (taking into consideration the
allocation plans and the commitments that have been made to
provide appropriate supportive services to the tenants in
proposed projects.

The term ``appropriate supportive services'' means services
designed to meet the special needs of tenants, and may include
meal services, health-related services, mental health services,
services for nonmedical counseling, meals, transportation,
personal care, bathing, toileting, housekeeping, chore
assistance, safety, group and socialization activities,
assistance with medications (in accordance with any applicable
State laws), case management, personal emergency response, and
other appropriate services.

Sec. 625. Conforming amendments

Sec. 626. Inapplicability to Indian public housing

Makes this subtitle inapplicable to Indian public housing.

Subtitle C-Standards and Obligations of Residency in
Federally-Assisted Housing

Sec. 641. Compliance by owners as condition of Federal assistance

Requires owners of Federally-assisted housing, as a condition of
receiving the housing assistance for such housing, to comply with
the procedures and requirements established for tenant selection
and eviction.

Sec. 642. Compliance criteria for occupancy as requirement for
tenancy

Requires an owner to select only applicants who comply with the
criteria for occupancy in Federally-assisted housing established
by the Secretary, by regulation. Authorizes an owner to deny an
applicant occupancy, if the owner determines that an applicant
does not meet such criteria.

Sec. 643. Establishment of criteria for occupancy

Requires the Secretary to establish a task force to review all
rules, policy statements, handbooks, technical assistance
memoranda, and other relevant documents issued by the Department
of Housing and Urban Development on the standards and obligations
governing residency in Federally-assisted housing and make
recommendations to the Secretary for the establishment of such
criteria for occupancy.

Requires the Secretary to appoint members to the task force,
which shall include individuals representing the interests of
owners, managers, and tenants of Federally-assisted housing,
owner and tenant advocacy organizations, public housing agencies,
organizations assisting homeless individuals, and social service,
mental health, and other nonprofit service providers who serve
Federally-assisted housing.

Prohibits members of the task force from receiving compensation
for serving on the task force.

Requires the task force to conduct a study of the existing
standards and obligations governing occupancy in
Federally-assisted housing; develop a comprehensive list of
clarifications on such standards and obligations; draft proposed
criteria for occupancy in Federally-assisted housing to ensure
that such housing is decent, safe, and sanitary, and the right to
peaceful enjoyment of the housing and the health, safety, and
welfare of other tenants, are not impaired, and setting forth
standards for the reasonable performance and behavior of tenants
and procedures for eviction of tenants not complying with such
standards; and report to the Congress on its findings.

Requires the task force to hold public hearings and receive
written comments for a period of not less than 60 days.

Requires the Secretary to cooperate fully with the task force and
to provide support staff and office space to assist the task
force in carrying out its duties.

Requires the task force to submit to the Secretary and the
Congress a preliminary report describing its initial actions not
later than 3 months after the date of enactment of this Act.

Requires the task force to submit a report to the Secretary and
the Congress, which shall include a description of its findings,
a summary of its findings suitable for use by public housing
managers, a set of proposed criteria for occupancy in
Federally-assisted housing, and a set of proposed criteria for
eviction of residents from Federally-assisted housing, not later
than six months after date of enactment.

Requires the Secretary, by regulation, to issue regulations
establishing criteria for occupancy in Federally-assisted housing
and for eviction of tenants from such housing.

Provides that the criteria shall be sufficient to ensure that
such housing is decent, safe, and sanitary, and the right to
peaceful enjoyment of the housing and the health, safety, and
welfare of other tenants, is not impaired and shall set forth
standards for the reasonable performance and behavior of tenants.
Requires the criteria to be consistent with the lease and
grievance procedures required under the public housing and
section 8 programs. Requires the Secretary to consider the
proposed standards contained in the report of the task force.

Requires the Secretary to issue a notice of proposed rule-making
of the regulations subject to public notice and comment for a
period not less than 60 days nor later than 90 days after
submission of task force's final report. Requires the Secretary
to issue final regulations not later than the expiration of the
60 day period beginning on the conclusion of the public comment
period.

Sec. 644. Assisted applications

Requires the Secretary to provide for an assisted application
which includes information regarding a family member, friend, or
caregiver. Requires the Secretary to require the owner of any
Federally-assisted housing receiving an assisted application to
maintain such information for any applicants who become tenants
of the housing, for the purposes of facilitating contact by the
owner with such person or organization to assist in providing any
services or special care for the tenant and assist in resolving
any relevant tenancy issues arising during the tenancy of such
tenant.

Subtitle D-Authority to Provide Preference for Elderly Residents
and Units for Handicapped and Disabled Residents

Sec. 651. Authority

Permits an owner of federally assisted housing designed primarily
for occupancy by elderly families to give a preference to elderly
families in selecting tenants for vacancies, subject to this
subtitle's requirements.

Sec. 652. Reservation of units for handicapped and disabled
families

Requires an owner to reserve units for non-elderly and
non-near-elderly handicapped and disabled families in an amount
not less than the higher of the percent of units occupied by
handicapped and disabled families upon enactment or January 1,
1992 and 10 percent of units.

Sec. 653. Secondary preferences

Permits owners to give a secondary preference for occupancy to
near-elderly handicapped and disabled families if there are
insufficient elderly families to fill vacancies, if the reserve
requirement has been met, and if the owner has given preferences
for elderly families. Permits owners to give a secondary
preference under the reservation of assistance for non-elderly
and non-near-elderly handicapped and disabled families to
near-elderly handicapped and disabled families with applications
filed for occupancy.

Sec. 654. General availability of units

Requires owners to make units generally available to eligible
families who have applied for occupancy if there are insufficient
families to occupy vacant units in the project under either the
primary or secondary preferences under the authority to give
preference to the elderly or the reservation assistance for
non-elderly or non-near-elderly handicapped and disabled
families.

Sec. 655. Preference within groups

Provides that the section 8 federal preferences shall apply to
elderly families, near-elderly families, and handicapped and
disabled families within each group.

Sec. 656. Prohibition of evictions

Prohibits an owner from evicting current residents who are
lawfully occupying units because of the reservation or
preferences for assistance.

Sec. 657. Covered federally assisted housing

Excludes public housing and the section 202 housing program under
the 1959 Act prior to the enactment of NAHA as covered federally
assisted housing under this subtitle.

Sec. 658. Rule of construction

Provides that this subtitle applies only to any covered federally
assisted housing for which an owner elects to provide a
preference for elderly families under these provisions.

Subtitle E-Service Coordinators for Elderly, Handicapped, and
Disabled Residents of Federally Assisted Housing

Sec. 661. Requirement to provide service coordinators

Subject to appropriations, requires the Secretary to require
owners of Federally-assisted housing projects to provide for
employing or otherwise retaining the services of one or more
individuals to coordinate the provision of supportive services
for older and disabled families residing in the projects.

Provides that each service coordinator shall consult with the
owner of the housing, tenants, any tenant organizations, any
resident management organizations, service providers, and any
other appropriate persons, to identify the particular needs and
characteristics of older families and disabled families who
reside in the project and any supportive services related to such
needs and characteristics; shall manage and coordinate the
provision of such services for residents of the project; may
provide training to tenants of the project in the obligations of
tenancy or coordinate such training; and may carry out other
appropriate activities for residents of the project.

Provides that supportive services may include health-related
services, mental health services, services for nonmedical
counseling, meals, transportation, personal care, bathing,
toileting, housekeeping, chore assistance, safety, group and
socialization activities, assistance with medications (in
accordance with any applicable State laws), case management,
personal emergency response, and other appropriate services, and
may be provided through any agency of the Federal Government or
any other public or private department, agency, or organization.

Sec. 662. Required training of service coordinators

Amends the revised congregate housing services program to require
service coordinators to receive training in the aging process,
elder services, federal and state entitlement programs, legal
liability, drug and alcohol abuse and mental health issues
relating to elderly.

Sec. 663. Cost of providing service coordinators in public
housing

Authorizes for public housing that annual contributions may be
used, for the cost of employing or otherwise retaining the
services of one or more service coordinators and expenses for not
more than 15 percent of the cost of the provision of such
services. Prohibits funding under both this Act and the
congregate housing services programs. Authorizes new budget
authority, under Section 5(c) of the 1937 Housing Act, of
$30,000,000 on or after October 1, 1992, for service coordinators
in public housing.

Sec. 664. Cost of providing service coordinators in project-based
section 8 housing

Authorizes the Secretary to consider and annually adjust rents
for the cost of employing or otherwise retaining the services of
one or more service coordinators in determining the amount of
assistance for project-based section 8 assistance. Authorizes
increases in the budget authority for annual contributions
contracts under Sec. 5(c) of the 1937 Housing Act, of $5,000,000
on or after October 1, 1992, for service coordinators in
project-based section 8 housing.

Sec. 665. Costs of providing service coordinators for residents
of tenant-based section 8 housing

Authorizes fees under tenant-based section 8 assistance to be
used for the costs of employing or otherwise retaining the
services of one or more service coordinators. Subject to
appropriations, requires the Secretary to increase fees to
provide for the costs of such service coordinators for public
housing agencies. Authorizes an increase in the budget authority
for annual contributions contracts under Sec. 5(c) of the 1937
Housing Act, of $15,000,000 on or after October 1, 1992, for
service coordinators in tenant-based section 8 housing.

Sec. 666. Grants for costs of providing service coordinators in
multifamily housing assisted under National Housing Act

Authorizes the Secretary to make grants to owners of section
221(d)(3) and section 236 projects for the costs of employing or
otherwise retaining the services of one or more service
coordinators. Requires the Secretary to provide for the form and
manner of applications for grants and for selection of applicants
to receive such grants. Authorizes for appropriation such sums as
may be necessary for grants for service coordinators in
multifamily housing projects.

Sec. 667. Expanded responsibilities of service coordinators in
section 202 housing

Amends the service coordinator for frail elderly in the section
202 program. Provides for expanded service coordinator
responsibilities to address the service needs of mixed
populations. Provides that if a project is receiving congregate
housing services assistance, the amount of costs provided for the
project service coordinator may not exceed the additional amount
necessary to cover the costs of providing for the coordination of
services for residents of the project who are not eligible
residents under the congregate housing services program.

Requires the Secretary to consider (and annually adjust for) the
costs of employing or otherwise retaining the services of one or
more service coordinators and the provision of such services, not
to exceed 15 percent of the cost of the provision of services for
the old section 202/8 projects.

Limits additional congregate housing services assistance to the
difference between the cost of servicing all frail elderly and
mixed populations.

                 Subtitle F-General Provisions

Sec. 681. Comprehensive housing affordability strategies

Amends CHAS requirement under the HOME program to require
submission of detailed information regarding the nature and
extend of housing needs of elderly, handicapped, and disabled
families.

Sec. 682. Clearinghouses

Requires the Secretary to provide information on the available
affordable housing opportunities to clearinghouses which may
include the applicable area agency on aging, housing agencies,
tax credit allocating agencies, and service providers, for the
purpose of providing such information to elderly, handicapped and
disabled families for referral.

Sec. 683. Conforming amendments

Sec. 684. Definitions

Defines ``disabled family'' as any family that has a member who
has a disability as defined in section 223 of the Social Security
Act or a developmental disability as defined in section 102(7) of
the  Developmental Disabilities Assistance and Bill of Rights
Act, or who is determined (pursuant to regulations issued by the
Secretary) to have a physical, mental, or emotional impairment
that is expected to be of long-continued and indefinite duration,
substantially impedes such person's ability to live
independently, and is of such a nature that such ability could be
improved by more suitable housing conditions.

Defines ``Federally-assisted housing'' and ``project'' as a
public housing project (as such term is defined in section 3(b)
of the United States Housing Act of 1937); housing for which
project-based assistance is provided under section of 8 of the
United States Housing Act of 1937; housing that is assisted under
section 202 of the Housing Act of 1959 (as amended by section 801
of the Cranston-Gonzalez National Affordable Housing Act);
housing that is assisted under section 202 of the Housing Act of
1959, as such section existed before the enactment of the
Cranston-Gonzalez National Affordable Housing Act; housing
financed by a loan or mortgage insured under section 221(d)(3) of
the National Housing Act and housing insured, assisted, or held
by the Secretary or a State or State agency under section 236 of
the National Housing Act; and housing constructed or
rehabilitated under section 8(b)(2) of the United States Housing
Act of 1937, as such section existed prior to October 1, 1983.

Sec. 685. Applicability

Makes the provisions apply upon the six month period beginning on
the date of enactment of the Act.

Sec. 686. Regulations

                    TITLE VII-RURAL HOUSING

Sec. 701. Program authorizations

Provides the Secretary of Agriculture with aggregate loan
insurance and guarantee authority of $2,305,836,000 for FY 1993.
Aggregate amounts include:

 Section 502 low-income loans, $1,509,144,000;

 Section 502(h) guaranteed loans, such sums may be appropriated;

 Section 504 home improvement loans, $12,896,000;

 Section 514 farm labor housing loans, $13,000,000;

 Section 515 rental housing loans, $769,080,000;

 Section 523(b)(1)(B) mutual housing and self-help loans,
$832,000;

 Section 524 site loans, $884,000;

Authorizes for credit costs as required by section 502 of the
Congressional Budget Act of 1974:

 $283,719,072 for Section 502 loans;

 $5,596,864 for Section 504 loans;

 $7,358,160 for Section 514 loans;

 $398,845,488 for Section 515 loans;

 $106,500 for Section 523(b) loans; and

 $19,500 for Section 524 loans.

Authorizes for appropriations for FY 1993:

 For section 502(f)(1) grants, $1,144,000;

 For section 502(g)(3) such sums as may be necessary;

 For section 504 grants, $21,944,000;

 For correcting defective housing under section 509(c), $624,000;

 For project preparation grants under section 509(f)(6),
$5,512,000;

 For section 511 notes and obligations such sums as are equal to
the aggregate of the credit contributions made by the Secretary
of Agriculture for principal payments under section 503 and any
interest due;

 For grants for service coordinators under section 515(x), sums
as may be necessary.

 For farm labor rental assistance under section 516(a)-(j),
$22,568,000;

 For housing for rural homeless and migrant farmworkers under
section 516(k), $10,920,000;

 For section 523(f) mutual and self-help housing grants,
$14,456,000; and

 For section 533 housing preservation grants, $23,032,000.

Authorizes Section 521 rental assistance payment contracts of
$430,664,000 for FY 1993.

Authorizes supplemental rental assistance contracts for section
513(d) to total $5,720,000 for FY 1993.

Sec. 702. Eligibility of homes on leased land owned by community
land trusts for section 502 loans

Authorizes loans to be made for the purchase of a dwelling
located on land owned by a community land trust.

Defines the term ``community land trust'' to mean a community
housing development organization that is not sponsored by a
for-profit organization; that is established to acquire parcels
of land, held in perpetuity, primarily for conveyance under
long-term ground leases, to transfer ownership of any structural
improvements located on such leased parcels to the lessees, and
to retain a preemptive option to purchase any such structural
improvement at a price determined by formula that is designed to
ensure that the improvement remains affordable to low- and
moderate-income families in perpetuity; and whose corporate
membership is open to any adult resident of a particular
geographic area specified in the bylaws of the organization.

Provides for recapture of any appreciation of a dwelling located
on land owned by a community land trust, based on any agreement
between the borrower and the community land trust that limits the
sale price or appreciation of the dwelling.

Sec. 703. Maximum income of borrowers under guaranteed loans

Makes persons whose income does not exceed 115% of area median
income eligible for section 502 guaranteed loans.

Sec. 704. Remote rural areas

Amends definition to include tribal allotted or Indian trust
lands.

Sec. 705. Designation of underserved areas and reservation of
assistance

Reauthorizes designation of underserved areas to require the
Secretary to include not less than 5 counties or communities that
contain tribal allotted or Indian trust land. Authorizes a
reservation of 5% of the aggregate amount of lending authority
under sections 502, 504, 514, 515, and 524 for assistance in
targeted underserved areas and colonias. Amends the definition of
colonias to delete requirement for State designation and
requirement of prior recognition.

Sec. 706. Rural housing voucher demonstration

Provides authorization for the rural housing voucher
demonstration program for FY 1993 and strikes the 5 state
limitation for targeting the demonstration.

Sec. 707. Rental housing loans

Extends the authority for the rural rental housing program to
September 30, 1993. Amends the definition of development costs to
include impact fees and local charges for the installation,
provision or use of infrastructure and local assessments for
public improvements and services. Excludes initial operating
expenses from the definition of development cost for nonprofit
corporations or consumer cooperatives which have been allocated
low-income housing tax credits.

Requires that the Secretary of Agriculture coordinate the
processing of section 515 applications with the provision of any
rental assistance necessary for the project.

Deletes changes in income targeting exception for LIHTC projects
with vacancies of at least 6 months which threaten the financial
viability of the project.

Reauthorizes the set aside for nonprofits for 1993. Amends the
section 515 non-profit set aside provision to allow coordination
of the program with the non-profit set aside in the Low Income
Housing Tax Credit program.

Provides such sums as are necessary to fund grants for service
coordinators in developments with a sufficient number of frail
elderly residents. Provides that the service coordinator will be
required to assess supportive services needs of frail elderly,
work with service providers and secure resources to meet needs of
frail elderly and monitor and evaluate services to ensure that
the services will enable frail elderly persons to live
independently. Requires the Secretary to provide for the form and
manner of the grant application process.

Prohibits the Secretary from denying assistance to projects
solely because they are located in excessively rural or remote
locations.

Prohibits the Secretary from providing any preference for
assistance based on the availability of any particular essential
service such as postal services, groceries, pharmacies, schools,
and health services.

Prohibits the Secretary from granting or denying loans based on
the geographic location of a project, except requires the
Secretary to give preference to any application from a community
located 20 miles or more from an urban area.

Requires the Secretary to publish regulations within 45 days of
enactment of this Act and to provide a copy of the proposed
regulation to the Congress for comment within 30 days of
enactment of this Act. Such regulation shall not be subject to
notice and comment rulemaking.

Sec. 708. Consideration of certain rural areas as rural areas

Provides that Plainview, Texas, be considered a rural area for
purposes of the FmHA programs.

Sec. 709. Mutual and self-help housing grant and loan authority

Extends mutual and self-help housing program through FY 1993.

Sec. 710. Housing preservation grants for replacement of housing

Amends the Housing Preservation Grants program to permit loans
and grants, not to exceed $15,000, to owners of single family
housing to replace existing housing if the Secretary determines
that repair or rehabilitation of the housing is infeasible or
that the owner can not afford a loan under the FmHA single family
loan program.

Requires a grantee using funds for replacement housing to certify
to the Secretary that rehabilitation is not economically
feasible, that the owner can not qualify for or afford assistance
under the FmHA single family housing programs and that the
grantee will make funds available for replacement housing on
terms that owners requesting such assistance can afford.

Makes technical and conforming changes.

                TITLE VIII-COMMUNITY DEVELOPMENT

Sec. 801. Community development authorizations

Authorizes the Community Development Block Grant Program (Title I
of the Housing and Community Development Act of 1974) for
$3,402,880,000 for FY 1993. Authorizes the section 108 guarantee
authority $312,000,000 for FY 1993. Authorizes for CDBG for
section 107 special purpose grants from the total CDBG
authorization the following amounts:

 $7,280,000 for CDBG work study programs;

 $6,760,000 for historically black colleges;

 $3,120,000 for insular areas; and

 Such sums as may be necessary for community-university
partnerships.

 Such sums as may be necessary to City of Bridgeport,
Connecticut, subject to appropriations and binding commitments by
the City of Bridgeport and the State of Connecticut to each
supplement such amount with an additional $2,000,000.

 Such sums as may be necessary for a) the provision of technical
assistance and b) reallocations as necessary to correct
miscalculations of allocated funds.

Sec. 802. Units of local government

Deletes requirement that the Secretary approve combinations of
units of local government under the State program.

Sec. 803. Urban counties

Extends eligibility requirements for an entity to qualify to
receive CDBG funds as an urban county.

Sec. 804. Retention of CDBG program income

Authorizes retention of program income by units of local
government only if the income is used for CDBG eligible
activities.

Sec. 805. State community development plans and reports

Requires that the Secretary annually summarize by state the
non-housing community development reports submitted to the
Department and report the same annually to Congress.

Sec. 806. Eligible activities

Authorizes additional eligible activities including (1) extending
to 25% of any amount of assistance (including program income) in
each of fiscal years 1993 through 1997 to the City of Los Angeles
and the County of Los Angeles for public service activities; (2)
assistance to institutions of higher education having a
demonstrated capacity to carry out eligible activities; and (3)
provision of assistance of public and private organizations,
agencies, and other entities (including nonprofit and for-profit
entities) to enable such entities to facilitate economic
development by providing direct loans and loan guarantees,
establishing revolving loan funds, and facilitating peer lending
programs) for the establishment, stabilization, expansion of
microenterprises; providing technical assistance, advice and
business support services (including assistance, advice, and
support relating to developing business plans, securing funding,
conducting marketing, and otherwise engaging in small business
activities) to owners of microenterprises and persons developing
microenterprises; and providing general support (such as peer
support programs and counseling) to owners of microenterprises
and persons developing microenterprises.

Extends direct homeownership assistance as an eligible activity
until October 1, 1993. Defines microenterprise to mean a
commercial enterprise that has 5 or fewer employees, 1 or more of
whom owns the enterprise. Provides a Sense of Congress that each
grantee should reserve 1 percent of any grant amounts received in
each fiscal year for the purpose of providing assistance to
facilitate economic development through commercial
microenterprises.

Sec. 807. CDBG special purpose grants

Authorizes the use of special purpose grants (1) for technical
assistance grants by States for the purpose of providing
technical assistance to units of local government; (2) to States
and units of general local government and institutions of higher
education having a demonstrated capacity to carry out eligible
activities under this title; except that the Secretary may make a
grant under this paragraph only to a State or unit of general
local government that jointly, with an institution of higher
education, has prepared and submitted to the Secretary an
application for such grant, as the Secretary shall by regulation
require; and (3) in each of fiscal years 1993 through 1998, to
units of general local government in non-entitlement areas for
planning community adjustments and economic diversification
activities, which may include any CDBG eligible activities
required by the proposed or actual establishment, realignment, or
closure of a military installation; by the cancellation or
termination of a Department of Defense contract or the failure to
proceed with an approved major weapon system program; or by a
publicly-announced planned major reduction in Department of
Defense spending that would directly and adversely affect a unit
of general local government and will result in the loss of 1,000
or more full-time Department of Defense and contractor employee
positions over a 5-year period in the unit of general local
government and the surrounding area, or if the Secretary (in
consultation with the Secretary of Defense) determines that any
of the above listed is likely to have a direct and significant
adverse consequence on the unit of general local government.
Requires regulations.

Sec. 808. Technical amendments

Makes technical and conforming changes.

Sec. 809. CDBG assistance for colonias

Amends the eligible activities under the CDBG colonias provision
to include acquisition, construction, reconstruction,
rehabilitation, or installation of public water projects and
public sewage projects, including any activities necessary to
furnish water and sewage services to persons of low- or
moderate-income.

Amends the definition of colonias to delete the requirements for
State designation and prior recognition.

Subtitle B-Other Community Development Programs

Sec. 831. Computerized database of community development needs

Requires the Secretary, within 1-year of enactment, to establish
and implement a program to assist the States and units of general
local government to develop methods, utilizing contemporary
computer technology, to: monitor, inventory, and maintain current
listings of the community development and infrastructure needs of
the States and units of general local government; coordinate
strategies within States (especially among various units of
general local governments) for meeting such needs; and coordinate
strategies among States for meeting such needs.

Requires the Secretary to provide for the development of an
integrated database system and computer mapping tool designed to
efficiently collect, store, process, and retrieve information
relating to community development and infrastructure needs within
States, and coordinate strategies for meeting such needs.

Requires this integrated database system and computer mapping
tool to be designed in a manner to coordinate and facilitate the
preparation of community development plans and to process any
information necessary for such plans. Requires the Secretary to
make the integrated database system and computer mapping tool
available to States without charge. Requires the Secretary to
provide consultation and advice to States and units of general
local government regarding the capabilities and advantages of the
integrated database system and computer mapping tool and
assistance in installing and using the database system and
mapping tool. Requires the Secretary, to the extent amounts are
appropriated to make grants to States for capital costs relating
to installation and use of the integrated database system and
computer mapping tool. Prohibits the Secretary from making more
than one grant to any single State or from making a grant to any
single State in an amount exceeding $1,000,000.

Establishes an application and selection procedure for States to
receive grants and gives priority to States having, on a
long-term basis, levels of unemployment above the national
average level. Authorizes to be appropriated for fiscal year
1993: Such sum as may be necessary for the Secretary to carry out
the program; grants to States.

Sec. 832. Neighborhood Reinvestment Corporation

Authorizes for the Neighborhood Reinvestment Corporation (NRC)
(Title VI of the Housing and Community Development Amendments of
1978.) $37,960,000 for FY 1993. Makes permanent the ability of
the NRC to use excess funds for expanded housing services
programs.

Sec. 833. Neighborhood development demonstration

Authorizes for the Neighborhood development demonstration
(Section 123 of Housing and Urban Recovery Act of 1983),
$2,080,000 for FY 1993. Makes the demonstration permanent and
renames it the John Heinz Neighborhood Development Program.
Requires the Secretary to submit a report to the Congress, not
later than 3 months after the end of each fiscal year in which
payments are made under this section, regarding this program. The
report must contain a summary of the activities carried out
during such fiscal year and any findings, conclusions, and
recommendations for legislation regarding the program.

Expands the definition of an eligible neighborhood development
organization to include any facility that provides small
entrepreneurial business with affordable shared support services
and business development services and an organization that
operates within an area that (1) meets the requirements for
Federal assistance under The Urban Development Action Grant
Program (section 119 of the Housing and Community Development Act
of 1974); (2) is designated as an enterprise zone under Federal
Law; (3) is designated as an enterprise zone under State law and
recognized by the Secretary for purposes of this section as a
State enterprise zone; (4) or is a qualified distressed community
within the meaning of section 233(b)(1) of the Bank Enterprise
Act of 1991.

Defines the term ``neighborhood development funding
organization'' to mean (A) a depository institution the accounts
of which are insured pursuant to the Federal Deposit Insurance
Act of the Federal Credit Union Act, and any subsidiary (as such
term is defined in section 3(w) of the Federal Deposit Insurance
Act) thereof; (B) a depository institution holding company and
any subsidiary thereof (as such term is defined in section 3(w)
of the Federal Deposit Insurance Act); or (C) a company at least
75 percent of the common stock of which is owned by one or more
insured depository institutions or depository institution holding
companies.

Adds as criteria for determining program feasibility, the extent
of cooperation with a neighborhood development funding
organization, except that an eligible neighborhood development
organization shall be deemed to have the full benefit of the
cooperation of the eligible neighborhood development funding
organization if it is located in an eligible area that does not
contain a neighborhood development funding organization or
demonstrates to the satisfaction of the Secretary that it has
been unable to obtain the cooperation of any neighborhood
development funding organization in such area despite having made
a good faith effort to obtain such cooperation.

Provides as an additional selection criteria to the extent of
participation in the proposed activities by a neighborhood
development funding organization that has a branch or office in
the neighborhood, except that an eligible neighborhood
development organization shall be deemed to have the full benefit
of the participation of a neighborhood development funding
organization if the eligible neighborhood development
organization (A) is located in a neighborhood that does not
contain a branch or office of a neighborhood development funding
organization; or (B) demonstrates to the satisfaction of the
Secretary that it has been unable to obtain the participation of
any neighborhood development funding organization that has a
branch or office in the neighborhood despite having made a good
faith effort to obtain such participation.

For fiscal year 1993 and thereafter, permits not more than 50
percent of grants to be multiyear grants.

Sec. 834. Study regarding housing technology research

Requires the Secretary, through the Assistant Secretary for
Policy Development and Research, to conduct a study of (1) the
extent of Federal, other public, and private basic research in
the United States in housing technology, including design and
construction techniques and methodology, smart building
technology, area and neighborhood planning, and other areas
relating to the preservation and production of affordable housing
and livable communities; (2) the extent of competitiveness of the
United States in the field of basic housing technology research
in comparison with other countries that are substantially
involved in trade with the United States, taking into
consideration the balance of trade, the degree of government
support of private research activities, and the degree of
fragmentation of research; and (3) the types of research projects
regarding basic housing technology conducted by such other
countries, the results of such research, and the extent of
success in applying and marketing such results. Requires the
Secretary to submit a report to the Congress describing the
results of the study not later than March 30, 1993.

Sec. 835. Designation of enterprise zones

Extends the time limitations within which the Secretary is
authorized to designate enterprise zones to the 24 months period
beginning on the 1st day of the 1st month following the month in
which the date of enactment of this Act occurs.

         TITLE IX-REGULATORY AND MISCELLANEOUS PROGRAMS

Sec. 901. HUD research and development

Authorizes for HUD research and development activities (Title V
of the Housing and Urban Development Act of 1970) $22,984,000 for
FY 1993.

Sec. 902. Administration of Department of Housing and Urban
Development

Creates at the Department a Special Assistant for Indian and
Alaska Native Programs who is responsible for (i) administering,
in coordination with the relevant office in the Department, the
provision of housing assistance to Indian tribes or Indian
housing authorities under each program of the Department that
provides for such assistance; (ii) administering the Community
Development Block Grant program for Indian tribes under title I
of Housing and Community Development act of 1974 and the
provision of assistance to Indian tribes under such Act; (iii)
directing, coordinating, and assisting in managing any regional
offices of the Department that administer Indian programs to the
extent of such programs; and (iv) coordinating all programs of
the Department relating to Indian and Alaska Native housing and
community development. Requires the Secretary, to the extent
practicable, in employing any staff for the office of the Special
Assistant for Indian and Alaska Native Programs and to conduct
activities of regional offices relating to Indian programs, to
give preference to individuals who are Indians. Requires the
Secretary to include in the annual report under section 8 a
description of the extent of the housing needs for Indian
families and community development needs of Indian tribes in the
United States and the activities of the Department, and extent of
such activities, in meeting such needs. Requires the Secretary to
transfer to the Special Assistant for Indian and Alaska Native
Programs with 180 days of enactment any appropriate functions and
duties. Requires the Secretary, within 1 year of enactment, to
transfer from offices within HUD to the office of the Special
Assistant for Indian and Alaska Native Programs such staff,
having experience and capacity to administer Indian housing and
community development programs, as necessary and appropriate to
assist the Special Assistant in carrying out its
responsibilities.

Requires the Secretary, subject to the availability of
appropriations, to implement his/her authority to reduce the
interest rate on any mortgage held by the Secretary to a rate not
less than the rate for recently issued marketable obligations of
the Treasury having a comparable maturity if (and to the extent
that) such a reduction, when taken together with other actions
authorized under NAHA, is necessary to avoid foreclosure on the
mortgage. Authorizes the Secretary to (not more than once for
each mortgage) increase the interest rate to a rate not exceeding
the prevailing market rate, as determined by the Secretary for
any mortgage for which the interest rate is reduced under this
authority, and if the Secretary determines that the income or
ability of the mortgagor to make interest payments has increased.

Requires the Secretary to develop regulations using the
negotiated rulemaking procedure provided for in P.L. 100-648 in
developing proposed regulations unless the Secretary determines
it is not in the public interest to do so.

Authorizes the HUD monitoring and evaluation (section 7(r) of the
Department of Housing and Urban Development Act) $30,000,000 for
FY 1993.

Sec. 903. Participant's consent to release of information

Amends the Stewart B. McKinney Homeless Assistance Amendments Act
of 1988 to prohibit an applicant or participant under any HUD
program from being required or requested to consent to the
release of information by third parties as a condition of initial
or continuing eligibility for participation in the program unless
(1) the request for consent is made, and the information secured
is maintained, in accordance with this section, section 5521 of
title 5, United States Code, and any applicable State and local
privacy law; and (2) the consent that is requested is
approximately limited, with respect to time and relevant and
necessary information.

Requires the Secretary to develop a release form that meets the
requirements of section 904 of the Stewart B. McKinney Homeless
Assistance Amendments Act of 1988, as amended by this section not
later than the expiration of the 90-day period beginning on the
date of the enactment of this Act. In developing the form, the
Secretary is required to consult with interested parties, which
must include not less than 2 representatives of public housing
agencies, 1 representative of a national tenant organization, 1
representative of a State tenant organization, and 1
representative of a legal group representing tenants. During the
period beginning upon the date of the enactment of this Act and
ending upon implementation of the use of this form, the benefits
provided to an applicant or participant under any program of the
Department, or eligibility for such benefits, may not be
terminated, denied, suspended, or reduced because of any failure
to sign any form authorizing the release of information from any
third party (including Form HUD-9886), if the applicant or
participant otherwise discloses all financial information
relating to the application or recertification.

Sec. 904. National Institute of Building Sciences

Makes technical corrections to the authorizing statute.

Sec. 905. Fair Housing initiatives program

Authorizes for the Fair Housing initiative program (section 561
of the Housing and Community Development Act of 1987) $6,552,000
for FY 1993 of which such sums as may be necessary shall be for
education and outreach activities. Extends program through
September 30, 1993.

Sec. 906. National Commission on Manufactured Housing

Authorizes for the National Commission on Manufactured Housing
(section 943 of NAHA) such sums as may be necessary for FY 1993.
Provides that, subject to appropriation, the Commission may hire
staff. Provides that the Commission shall terminate on October 1,
1993.

Sec. 907. Real Estate Settlement Procedures Act

Amends the Real Estate Settlement Procedures Act of 1974 to
include the making of a loan as a settlement service and to
include refinancing and second mortgages within the provisions of
the Act.

Sec. 908. Disclosures under the Home Mortgage Disclosure Act of
1975.

Amends the Home Mortgage Disclosure Act of 1975 to require that
covered lenders make available to the public, upon request, loan
application register information in a form prescribed by Board.
Provides that a reasonable charge for producing the information
may be imposed by a covered lender; provides for retention of
information by covered lenders for 3 years; requires the Board to
minimize costs in implementing this provision; requires
disclosure of statements by covered lenders, notice that data is
subject to correction after final review. Provides 6- and 9-month
maximum disclosure periods and encourages shorter periods after
1994.

Requires that these amendments are effective for any year which
ends after the date of enactment of this Act.

Sec. 909. Community Reinvestment Act of 1977

Provides that nonminority-owned and nonwomen-owned financial
institution will be given credit in its examination for Community
Reinvestment Act purposes for capital investment, loan
participation, and other ventures undertaken by the institution
in cooperation with minority- and women-owned financial
institutions and low-income credit unions that help meet the
credit needs of local communities.

Sec. 910. Temporary inapplicability of certification of
limitation of assistance for multifamily projects

Provides that the anti-subsidy layering certification requirement
of section 102 of the HUD Reform Act is suspended until the end
of FY 1994.

Sec. 911. Reestablishment of Solar Bank

Requires the Secretary to reestablish the Solar Energy and Energy
Conservation Bank. Provides for a board of directors, officers,
and advisory committees and requires the Secretary to issue
regulations within 180 days of enactment. Authorizes to be
appropriated to provide financial assistance for the purchase and
installation of residential and commercial energy conservation
improvements and solar energy systems such sums as may be
necessary for FY 1993.

Sec. 912. Technical and conforming amendments relating to labor
wage rates under housing programs

Requires the Secretary to ensure that all laborers and mechanics
employed by contractors and subcontractors in the construction of
housing with 12 or more units assisted under the Supportive
Housing for the Elderly Program and the Supportive Housing for
Persons with Disabilities Program be paid wages at rates not less
than the rates prevailing in the locality involved for the
corresponding classes of laborers and mechanics employed on
construction of a similar character. Provides exemption for this
requirement for any individual who (i) performs services for
which the individual volunteered; (ii)(I) does not receive
compensation for such services or (II) is paid expenses,
reasonable benefits, or a nominal fee for such services; and
(III) is not otherwise employed at any time in the construction
work.

Sec. 913. Energy efficient mortgages

Amends section 104 of the Cranston-Gonzalez National Affordable
Housing Act by defining the term ``energy efficient mortgage'' to
mean a mortgage that provides financial incentives for the
purchase of energy efficient homes, or that provides financial
incentives to make energy efficiency improvements in existing
homes by incorporating the cost of such improvements in the
mortgage. Amends section 946 of the Cranston-Gonzalez National
Affordable Housing Act to require the Uniform Mortgage Financing
Plan for Energy Efficiency Task Force to determine whether
notifying potential home purchasers of the availability of energy
efficient mortgages would promote energy efficiency in
residential buildings, and if so, to recommend appropriate
notification guidelines, and agencies and organizations referred
to in the preceding sentence are authorized to implement such
guidelines.

Sec. 914. Economic opportunities for low- and very low-income
persons

Provides findings. Establishes that the policy of the Congress is
to ensure that the employment and other economic opportunities
generated by Federal financial assistance for housing and
community development programs shall, to the greatest extent
feasible, be directed toward low- and very low-income persons,
particularly those who are recipients of government assistance
for housing.

Requires that public housing agencies and Indian housing
authorities, and their contractors and subcontractors, make their
best efforts, consistent with existing Federal, State, and local
laws and regulations, to give to low- and very low-income persons
the training and employment opportunities generated by
development assistance provided pursuant to public housing annual
contributions contracts, operating assistance, and modernization
grants. Provides that such efforts shall be directed in the
following order of priority: (i) to residents of the housing
developments for which the assistance is expended; (ii) to
residents of other developments managed by the public housing
agency or Indian housing authority that is expending the
assistance; (iii) to other low- and very low-income persons
residing within the metropolitan area (or nonmetropolitan county)
in which the assistance is expended.

Requires the Secretary to ensure that in other programs that
provide housing and community development assistance,
opportunities for training and employment arising in connection
with a housing rehabilitation (including reduction and abatement
of lead-based paint hazards), housing construction, or other
public construction projects are given to low- and very
low-income persons residing within the metropolitan area (or
nonmetropolitan country) in which the project is located.
Provides for priority to be given to low- and very low-income
persons residing within the service area of the project or the
neighborhood in which the project is located. Requires that
public housing agencies and Indian housing authorities, and their
contractors and subcontractors, make their best efforts to award
contracts for work to be performed in connection with development
assistance to business concerns that provide economic
opportunities for low- and very low-income persons. Provides the
following order of priority: (i) to business concerns that
provide economic opportunities for residents of the housing
development for which the assistance is provided; (ii) to
business concerns that provide economic opportunities for
residents of other housing developments operated by the public
housing agency and Indian housing authority that is providing the
assistance; (iii) to business concerns that provide economic
opportunities for low- and very low-income persons residing
within the metropolitan area (or nonmetropolitan county) in which
the assistance is provided.

Requires the Secretary to ensure that in providing housing and
community development assistance pursuant to other programs,
contracts awarded for work to be performed in connection with a
housing rehabilitation (including reduction and abatement of
lead-based paint hazards), housing construction, or other public
construction projects are given to business concerns that provide
economic opportunities for low- and very low-income persons
residing within the area in which the assistance is expended.
Provides for priority to be given to business concerns which
provide economic opportunities for low- and very low-income
persons residing within the service areas of the project or the
neighborhoods in which the project is located.

Provides definitions.

Requires the Secretary to consult with the Secretary of Labor,
the Secretary of Health and Human Services, the Secretary of
Commerce, the Administrator of the Small Business Administration,
and other relevant Federal agencies. Requires regulations not
later than 180 days after the date of enactment.

Requires the Secretary to submit to the Congress, not later than
1 year after the date of the enactment, a report describing the
Secretary's efforts to enforce this program; the barriers to full
implementation; the anticipated costs and benefits of full
implementation; and recommendations for legislative changes to
enhance the program's effectiveness.

Sec. 915. National American Indian Housing Council

Authorizes to be appropriated for assistance for the National
American Indian Housing Council such sums as may be necessary for
fiscal year 1993 for providing training and technical assistance
to Indian housing authorities.

Sec. 916. Study Regarding Foreclosure Alternatives

Requires the Secretary to conduct a study to review and analyze
alternatives to foreclosure for homeowners whose principal
residences are subject to federally-related mortgages under which
the homeowner is in default. Authorizes the Secretary to consult
with any appropriate Federal agencies that make, insure, or
guarantee mortgage loans relating to 1- to 4-family dwellings and
with the Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation, the Government National Mortgage
Association, and the Federal Agricultural Mortgage Corporation;
and requires the Secretary to review and assess the adequacy,
with respect to providing alternatives to foreclosure, of (A) the
temporary mortgage assistance payments program authorized under
section 230 of the National Housing Act; (B) the authority of the
Secretary to modify interest rates and other terms of mortgages
transferred to the Secretary under section 7(i) of the Department
of Housing and Urban Development Act; and (C) any authority
pursuant to the Debt Collection Act of 1982 to reduce interest
rates on outstanding debt to the borrowing rate for the Treasury
of the United States. Requires the Secretary to evaluate
alternatives to foreclosure based on fairness of the procedures
to the homeowner and reducing adverse effects on the mortgage
lending system.

Requires the Secretary to submit a report to Congress not later
than March 1, 1993, regarding the results of this study. The
report must contain a detailed description and assessment of each
alternative to foreclosure analyzed under the study and a
statement by the Secretary regarding the intent of the Secretary
to use any authority available to avoid foreclosure under
mortgages (and any reasons for not using such authority). The
report may also contain any recommendations of the Secretary for
administrative or legislative action to assist homeowners to
avoid foreclosure and any loss of equity in their mortgaged homes
that may result from foreclosure.

                 TITLE X-HOUSING PROGRAMS UNDER
          STEWART B. MCKINNEY HOMELESS ASSISTANCE ACT

Sec. 1001. Short title

Provides that this title may be cited as the ``Stewart B.
McKinney Homeless Assistance Amendments Act of 1992''.

Sec. 1002. Emergency Shelter Grants program

Authorizes for the Emergency Shelter Grants program (Title IV,
subtitle B) of the McKinney Act, $143,520,000 for FY 1993.

Amends the program to require that recipients will utilize, to
the maximum extent practicable, homeless individuals and families
in constructing, renovating, maintaining, and operating
facilities assisted under this program. Requires the
participation of not less than 1 homeless person or formerly
homeless person on the board of directors or other equivalent
policy making entity of the recipient.

Amends the program to require program recipients to establish a
formal process, which recognizes the due process rights of
individuals, in order to terminate assistance to individuals or
families who violate program requirements.

Sec. 1003. Supportive Housing Demonstration program

Creates a new program entitled, the Supportive Housing program,
which combines the existing Supportive Housing Demonstration
Program and Supplemental Assistance for Facilities to Assist the
Homeless (SAFAH) Program into one program. This consolidated
program maintains all activities formerly eligible under the
Supportive Housing Demonstration (including transitional housing
and permanent housing for handicapped homeless persons) program,
as well as those activities under the SAFAH program. Strikes from
existing law as they currently are authorized, the Supportive
Housing Demonstration program and the SAFAH program.

Establishes that the purpose of the program is to promote the
development of innovative approaches for providing supportive
housing and supportive services to assist homeless persons,
especially homeless families and homeless persons with
disabilities, in the transition from homelessness and to promote
supportive housing to homeless persons to enable them to live as
independently as possible.

Provides program definitions which are similar to those
established in the Supportive Housing Demonstration and SAFAH
programs; except that nonprofits are defined as including public
nonprofits.

Authorizes HUD to provide any project with one or more of the
following types of assistance under the program: (1) grants for
acquisition, rehabilitation, or acquisition and rehabilitation of
an existing structure (including a small commercial property or
office space) to provide supportive housing other than emergency
shelter or to provide supportive services (also allows the
repayment of any outstanding debt to purchase an existing
structure to be an eligible cost); (2) grants or advances for new
construction; (3) grants for leasing of an existing structure;
(4) annual payments for operating costs of supportive housing;
(5) grants for supportive services; and (6) technical assistance.

Requires the same use restrictions and repayment of assistance
and prevention of undue benefits provisions for assistance
provided as currently provided in existing law under the
Supportive Housing Demonstration program.

Requires that supportive housing under the program be: housing
that is safe and sanitary and meets applicable state and local
codes; transitional housing; permanent housing for homeless
persons with disabilities; or is, or is part, of a particularly
innovative project meeting the immediate and long-term needs of
homeless individuals and families. Defines transitional housing
as housing that is intended to facilitate and move homeless
individuals and families to independent living within 24 months;
however, stipulates that HUD may not deny program assistance
solely because the facility permits homeless individuals to
reside in the facility for more than 24 months. Authorizes
program funds to provide supportive housing or supportive
services in single room occupancy (SRO) dwellings.

Authorizes supportive services under the program to include
activities as: (1) establishing and operating a child care
services program; (2) establishing and operating an employment
assistance program; (3) providing outpatient health services,
food, and case management; (4) providing assistance in obtaining
permanent housing, employment counseling, and nutritional
counseling; (5) providing security arrangements necessary for the
protection of residents of supportive housing and for homeless
persons using the housing or project; (6) providing assistance in
obtaining other federal, state, and local assistance; and (7)
providing other appropriate services. Requires coordination with
the Department of Health and Human Services as it relates to
outpatient health services.

Provides program requirements including application procedures,
site control requirements, selection criteria, and required
agreements which must be followed by all recipients (these
provisions are similar to those in existing law under the
Supportive Housing Demonstration program).

Requires each recipient to supplement any program assistance with
an amount equal to not less than 10 percent of funds from other
sources.

Requires the participation of not less than 1 homeless person or
formerly homeless person on the board of directors or other
equivalent policy making entity of the recipient.

Requires program recipients to establish a formal process, which
recognizes the due process rights of individuals, in order to
terminate assistance to individuals or families who violate
program requirements.

Requires HUD to issue interim regulations within 90 days of the
enactment of this Act which shall take effect upon issuance and
requires HUD to issue final regulations after following a
negotiated rulemaking process.

Requires HUD to report to Congress within 4 months after the end
of each fiscal year.

Authorizes to be appropriated for the Supportive Housing program
in FY 1993, $187.2 million. Provides specific program funding
set-asides of not less than 25 percent for homeless families with
children, not less than 25 percent for homeless persons with
disabilities, and not less than 10 percent for supportive
services.

Sec. 1004. Safe Havens for Homeless Individuals Demonstration
program

Amends Title IV of the McKinney Act to establish a new Subtitle
D, ``Safe Havens for Homeless Individuals Demonstration
program.''

Authorizes HUD to demonstrate the desirability and feasibility of
providing low-cost housing for the homeless, to be known as safe
havens, for eligible persons who are at the time unable to
participate in mental health treatment programs or to receive
other supportive services.

Establishes the Safe Havens program to demonstrate: (1) whether
eligible persons choose to reside in safe havens; (2) the extent
to which, after a period of residence in a safe haven, residents
are willing to participate in mental health or other appropriate
treatment programs and to move toward a more traditional form of
permanent housing and whether such permanent housing and
treatment programs are available in the community; (3) whether
safe havens are cost-effective in comparison with other
alternatives for eligible persons; and (4) the various ways in
which safe havens can be arranged to provide accommodations and
supportive services for eligible persons.

Provides various program definitions, including as follows: (1)
``applicant'' means a nonprofit corporation, public nonprofit
organization, state, or unit of general local government; (2)
``eligible person'' means an individual who (A) is seriously
mentally ill or has chronic problems with drug or alcohol abuse
(or both), (B) resides primarily in a public or private place not
designed for, or ordinarily used as, a regular sleeping
accommodation for human beings, which may include occasional
residence in an emergency shelter, and (C) is at the time unable
to participate in mental health treatment programs or to receive
other supportive services; (3) ``facility'' means a structure or
a portion of a structure that is assisted; (4) ``nonprofit
organization'' means an organization (A) no part of the net
earnings of which inures to the benefit of any member, founder,
contributor, or individual, (B) that has a voluntary board, (C)
that has an accounting system, or has designated a fiscal agent,
and (D) that practices nondiscrimination in the provision of
assistance; (5) ``operating costs'' means expenses incurred by a
recipient operating a safe haven with respect to (A) the
operation of the facility, including the cost of a 24-hour
management, and maintenance, repair, and security, (B) utilities,
fuel, furnishings, and equipment for such housing, and (C) other
reasonable costs necessary to the operation of the facility; (6)
``recipient'' means an applicant that receives program
assistance; (7) ``safe haven'' means a facility that (A) provides
a 24-hour residence for an unspecified duration for eligible
persons, (B) provides private, semiprivate accommodations, (C)
may provide for the common use of dining rooms and bathrooms, and
(D) in which occupancy is limited to no more than 25 persons; (8)
``Secretary'' means the Secretary of Housing and Urban
Development; (9) ``seriously mentally ill'' means having a severe
and persistent mental or emotional impairment that seriously
limits a person's ability to live independently; (10) ``State''
means each of the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the United States Virgin Islands,
Guam, American Samoa, the Northern Mariana Islands, and Palau;
(11) ``supportive services'' means assistance that the Secretary
determines (A) addresses the special needs of eligible persons,
and (B) provides appropriate services, or assists such persons,
to obtain appropriate services, including health care, mental
health services, substance and alcohol abuse services, case
management services, counseling, supervision, education, job
training, and other services essential for achieving and
maintaining independent living (this term does not include acute
hospital care); (12) ``unit of general local government'' has the
meaning given the term in section 102(a) of the Housing and
Community Development Act of 1974.

Provides the following eligible program activities: (1) the
construction of a structure for use in providing a safe haven or
the acquisition, rehabilitation, or acquisition and
rehabilitation of an existing structure for use in providing a
safe haven; (2) the leasing of an existing structure for use in
providing a safe haven; (3) to cover the operating costs of a
safe haven; (4) to cover the costs of administering a safe haven
program, not to exceed 10 percent of the amounts for the other
activities listed above.

Provides program assistance for not more than a 5 year period,
except that HUD, upon the recipient's application, may extend
assistance for up to an additional 5-year period subject to HUD's
determination of the recipient's performance and the availability
of future appropriations.

Limits program assistance to not more than $400,000 in any 5-year
period and requires recipients to supplement program assistance
with an equal amount of funds from other sources. Provides that
in calculating the amount of supplemental funds, recipients may
include (1) State, local agency, and private funds, (2) the value
of any lease on a building, (3) any staff salary, and (4) the
value of the time and services contributed by volunteers.

Requires HUD to establish application procedures which shall
contain at a minimum: (1) a description of the proposed facility;
(2) a description of the number and characteristics of the
eligible persons expected to occupy the safe haven; (3) a plan
for identifying and selecting eligible persons to participate;
(4) a program plan, containing a description of the method (A) of
operation of the facility, including staffing plans and facility
rules, (B) by which the applicant will secure supportive services
residents, (C) by which the applicant will monitor the
willingness of residents to engage in treatment programs and
other supportive services, (D) by which access to supportive
services will be secured for residents willing to use them, (E)
by which access to permanent housing with appropriate services,
such as the Shelter Plus Care program, will be sought after
residents are stabilized, and (F) by which the applicant will
conduct outreach activities to facilitate the entrance of
eligible persons into the safe haven; (5) a plan to ensure that
adequate security precautions are taken to make the facility
safe; (6) an estimate of program costs; (7) a description of the
resources that are expected to be made available to match program
assistance; (8) assurances satisfactory to the Secretary that the
facility will have 24-hour management; (9) assurances
satisfactory to the Secretary that the facility will be operated
for the purpose specified in the application for each year in
which program assistance is provided; (10) a certification by the
public official responsible for submitting the comprehensive
housing affordability strategy under NAHA for the State or unit
of general local government within which the facility is located
that the proposed activities are consistent with the approved
housing strategy for such jurisdiction; (11) a certification that
the applicant will comply with the requirements of the Fair
Housing Act, Title VI of the Civil Rights Act of 1964, section
504 of the Rehabilitation Act of 1973, and the Age Discrimination
Act of 1975, and will affirmatively further fair housing; (12) a
plan for program evaluation based on information that is
collected on a periodic basis regarding the characteristics of
the residents, including their movement in and out of the safe
haven, their willingness to use supportive services, and their
movement toward a more traditional form of permanent housing
after a period of stabilization in the safe haven; and (13) such
other information as the Secretary may require.

Provides that the Secretary shall require that an applicant
furnish reasonable assurances that the applicant will have
control of a site for the proposed facility not later than 1 year
after notification of a program award and provides that if an
applicant fails to obtain control of the site within this period,
the grant shall be recaptured by HUD and reallocated for use
under the program.

Requires HUD to establish selection criteria for selecting
applicants to receive assistance pursuant to a national
competition, which shall include (1) the extent to which the
applicant demonstrates the ability to develop and operate a safe
haven; (2) the extent to which there is a need for a safe haven
in the jurisdiction in which the facility will be located; (3)
the extent to which the program will link eligible persons to
permanent housing and supportive services after stabilization in
a safe haven; (4) the cost-effectiveness of the proposed program;
(5) providing for geographical diversity among applicants
selected to receive assistance; (6) the extent to which the safe
haven will meet the need of the eligible persons proposed to be
served by the safe haven; and (7) such other factors as HUD
determines to be appropriate for purposes of carrying out the
program in an effective and efficient manner.

Prohibits program assistance unless the applicant agrees: (1) to
develop and operate the proposed facility as a safe haven; (2) to
ensure that the facility meets any standards of habitability
established by HUD; (3) to provide mental health services for the
residents of the safe haven; (4) to prohibit the use of illegal
drugs and alcohol in the facility; (5) to ensure that adequate
security precautions are taken to make the facility safe for the
residents; (6) not to establish limitations on the duration of
residency; (7) not to require participation in supportive
services as a condition of occupancy; (8) to monitor and report
to the Secretary on progress in carrying out the safe haven
program; (9) to utilize, to the maximum extent practicable,
eligible persons in constructing, renovating, maintaining, and
operating facilities assisted and in providing services assisted
under this subtitle; (10) to provide for the participation of not
less than 1 homeless person or former homeless individual on the
board of directors or other equivalent policy making entity or to
otherwise provide for the consultation and participation of such
an individual in considering and making such policies and
decisions; and (11) to comply with such other terms and
conditions as the Secretary may establish.

Requires that each eligible person who resides in an assisted
facility shall pay an occupancy charge not in excess of the
amount determined under section 3(a) of the 1937 Housing Act.
Provides that the recipient providing a facility may establish an
occupancy charge lower than such amount based on the type of
living accommodations provided.

Requires program recipients to establish a formal process, which
recognizes the due process rights of individuals, in order to
terminate assistance to individuals or families who violate
program requirements.

Requires HUD to conduct an evaluation of the safe haven
demonstration program and report to the Congress, not later than
December 31, 1994, which shall set forth HUD's findings as a
result of the evaluation.

Requires within the 90 days of the enactment of this bill to
issue interim regulations to carry out this program which shall
take effect upon issuance. Requires HUD to issue final
regulations to carry out this program pursuant to negotiated rule
making.

Authorizes $50 million for the safe havens program for FY 1993.

Sec. 1005. Section 8 Assistance for Single Room Occupancy (SRO)
Dwellings

Authorizes for section 8 assistance for single room occupancy
dwellings (sections 441 of the McKinney Act) $89,696,000 for FY
1993.

Amends to program to require that recipients will utilize, to the
maximum extent practicable, homeless individuals and families in
constructing, renovating, maintaining, and operating facilities
assisted under this program. Requires the participation of not
less than 1 homeless person or formerly homeless on the board of
directors or other equivalent policy making entity of the
recipient.

Amends the program to require program recipients to establish a
formal process, which recognizes the due process rights of
individuals, in order to terminate assistance to individuals or
families who violate program requirements.

Sec. 1006. Shelter plus care program

Authorizes $269,144,000 to be appropriated for the Shelter Plus
Care program for FY 1993. Merges the three components of the
Shelter Plus Care program in existing law into one program and
creates an additional type of activity which can be funded under
the program. Sets aside not less than 10 percent of program
funding for each of the following types of eligible program
activities: tenant-based rental assistance; project-based rental
assistance; sponsor-based rental assistance; and section 8
moderate rehabilitation assistance for single room occupancy
(SRO) dwellings.

Requires that the project-based rental assistance be provided
through contract between the recipient and an owner of an
existing structure. Requires that the contract shall provide that
rental assistance payments shall be made to the owner and that
the units in the structure shall be occupied by eligible persons
for not than the term of the contract. Requires that the contract
term shall be 5 years and gives the owner an option to renew the
assistance for an additional 5-year term, subject to the
availability to amounts profiled in appropriation Acts.

Authorizes 10-year contract assistance in the case that: (1)
there is an expenditure of at least $3,000 for each unit
(including a prorated share of work on common areas or systems);
(2) the owner makes the structure decent, safe, and sanitary; and
(3) the owner agrees to carry out the rehabilitation with
resources other than assistance under this program within 12
months of notification of grant approval.

Requires each contract to provide that the recipient shall
receive aggregate amounts not to exceed the appropriate existing
housing fair market rental under section 8(e) of the 1937 Housing
Act in effect at the time the application is approved and
authorizes that amounts not needed for a year may be used to
increase the amount available in subsequent years.

Amends the program to require that recipients will utilize, to
the maximum extent practicable, homeless individuals and families
in constructing, renovating, maintaining, and operating
facilities assisted under this program. Requires the
participation of not less than 1 homeless person or formerly
homeless on the board of directors or other equivalent policy
making entity of the recipient.

Amends the program to require program recipients to establish a
formal process, which recognizes the due process rights of
individual, in order to terminate assistance to individuals or
families who violate program requirements.

Makes public housing authorities (PHAs) eligible to apply for
each type of authorized activity under the program. Amends the
definition of nonprofit to include public nonprofits in order to
receive program assistance.

Sec. 1007. FHA single family property disposition

Provides that in disposing of HUD-inventory property for the
homeless, HUD shall only use properties that have been offered
for sale for 30 days (this provision changes the current
requirement of a 10-day marketing period to 30 days) and allow
for an exception to this requirement if HUD determines that there
will not be a sufficient quantity of decent, safe, and sanitary
affordable housing available for use under this program.

Sec. 1008. Rural homeless housing assistance

Disposition of Single Family Properties Acquired by FmHA-Requires
that the Secretary of Agriculture make available not less then
10% of the eligible single family properties held by the
Secretary in each fiscal year for lease with an option to
purchase, for lease, or for purchase, by qualified applicants
that provide assistance to the homeless. Requires that such
properties by used to provide housing for the homeless.

Requires that recipients will utilize, to the maximum extent
practicable, homeless individuals and families in constructing,
renovating, maintaining, and operating facilities assisted under
this program. Requires the participating of not less than 1
homeless person or formerly homeless on the board of directors or
other equivalent policy making entity of the recipient.

Defines ``eligible property'' as a property that is acquired by
FmHA, consists of 1 to 4 dwelling units, is vacant at the time it
is acquired, has been listed for sale by FmHA for not less than
30 days and is not subject to a sales contract and has not been
committed for use in any other program by FmHA. Defines
``qualified applicant'' as a State, metropolitan city, urban
county, governmental entity, tribe, or private non-nonprofit
organization that submits a written expression of interest in
eligible properties.

Requires FmHA to issue regulations to carry out this program
which are substantially similar to HUD's regulations for the HUD
program for disposition of single family properties.

Rural Homelessness Grant Program-Authorizes the Secretary of
Agriculture to establish a grant program, entitled the Rural
Homelessness Grant Program, which is authorized at such sums as
may be appropriated for FY 1993, in order to provide assistance
to the homeless or near homeless in rural areas through eligible
organizations.

Authorizes the Secretary to award grants to eligible
organizations in order to pay for the Federal share of the cost:
assisting programs providing direct emergency assistance to
homeless individuals and families; providing homelessness
prevention assistance to individuals and families at risk of
becoming homeless; and assisting individuals and families in
obtaining access to permanent housing and supportive services.

Authorizes the use of program funds in rural areas for: (1) rent,
mortgage, or utility assistance after 2 months of nonpayment in
order to prevent eviction, foreclosure, or loss of utility
service; (2) security deposits, rent for the first month of
residence at a new location, and relocation assistance; (3)
short-term emergency lodging in motels or shelters, either
directly or through vouchers; (4) transitional housing; (5)
rehabilitation and repairs such as insulation, window repair,
door repair, roof repair, and repairs that are necessary to make
the premises habitable; (6) housing services, including housing
counseling and moving services; (7) costs associated with making
use of Federal inventory property programs to house homeless
families, including the HUD and FmHA properties; and (8) other
supportive services as needed, which may include outreach, case
management, entitlement assistance, transportation, and health
and social services to prevent or alleviate homelessness.

Authorizes that not more than 20 percent of the program funds for
a fiscal year may be used by eligible organizations for capacity
building activities, including payment of operating costs and
staff retention.

Sets aside not less than 50 percent of the program funds for the
fiscal year for awarding grants to eligible organizations serving
communities that have populations of less than 20,000 and
requires that the Secretary shall give priority within this
setaside to eligible organizations serving communities with
populations of less than 10,000.

Requires that the Secretary shall give priority to eligible
organizations serving communities not currently receiving
significant Federal assistance under the Stewart B. McKinney
Homeless Assistance Act. Prohibits the Secretary from awarding
more than 5 percent of program funds to eligible organizations
within a State.

Requires applications, at a minimum, to include: (1) a
description of the target population and geographic area to be
served; (2) a description of the types of assistance to be
provided; (3) an assurance that assistance is closely related to
the identified needs of the target population; (4) a description
of the existing assistance available to the target population,
including Federal, State, and local programs, and a description
of the manner in which the organization will coordinate with and
expand existing assistance or provide assistance not available in
the immediate area; (5) an agreement by the organization that it
will collect data on its projects, including assistance provided,
number and characteristics of persons served and causes of
homelessness for persons served; and (6) an agreement by the
organization that it will utilize, to the maximum extent
practicable, homeless individuals and families in providing,
operating, and rehabilitating housing.

Provides as eligible organizations under this program, private
nonprofit entities, Indian tribes, and county and local
governments.

Requires that the Federal share of the costs of providing
assistance shall be 75 percent and provides that the non-Federal
share of the cost of providing assistance shall be in cash or in
kind, fairly evaluated, including plant, equipment, staff
services, or services delivered by volunteers.

Requires the participation of not less than 1 homeless person or
formerly homeless on the board of directors or other equivalent
policy making entity of the recipient.

Requires the Secretary to perform a program evaluation to
determine the effectiveness of the program in providing housing
and other assistance to homeless persons in the area served; and
determine the types of assistance needed to address homelessness
in rural areas.

Requires the Secretary to submit to Congress, not latter than 18
months after the date on which the Secretary first makes program
grants, the program evaluation, including recommendations for any
Federal administrative or legislative changes that may be
necessary to improve the ability of rural communities to prevent
and respond to homelessness.

Authorizes the Secretary to provide technical assistance to
eligible organizations in developing programs and in gaining
access to other Federal resources that may be used to assist
homeless persons in rural areas. Provides that such assistance
may be provided directly or through grants to, or contracts with,
nongovernmental entities.

Amends the program to require program recipients to establish a
formal process, which recognizes the due process rights of
individuals, in order to terminate assistance to individuals or
families who violate program requirements.

Provides program definitions.

Sec. 1009. Evaluations of programs by homeless

Requires that each jurisdiction receiving assistance under the
McKinney Act evaluate the effectiveness of each McKinney Act
program. Provides that such evaluation shall be determined by
surveying homeless persons.

Sec. 1010. Extension of original McKinney Act housing programs

Strikes the revised McKinney Act housing assistance provisions
and the transitional rule under Sections 821 and 823 of the
Crasnton-Gonzalez National Affordable Housing Act.

Sec. 1011. Consultation and report regarding use of National
Guard facilities as overnight shelters for homeless individuals

Requires HUD to report to Congress, within one year of the
enactment date, on the availability and use of National Guard
armories for overnight housing for homeless individuals.

Sec. 1012. Amendments to Table of Contents

Amends the table of contents to the Stewart B. McKinney Homeless
Assistance Act in order to conform to changes made in this Act.

TITLE XI-NEW TOWNS DEMONSTRATION PROGRAM FOR EMERGENCY RELIEF OF
LOS ANGELES

Sec. 1101. Authority

Requires the Secretary of Housing and Urban Development to make
any assistance authorized under this title available to units of
federal local government, governing boards, and eligible
mortgagors to provide for the revitalization and renewal of inner
city neighborhoods in the areas of Los Angeles, California, that
were damaged by the civil disturbances during April and May of
1992, and to demonstrate the effectiveness of new town
developments in revitalizing and restoring depressed and
underprivileged inner city neighborhoods.

Sec. 1102. New town plan

Authorizes the Secretary to make assistance available only in
connection with, and according to the provisions of a new town
plan developed and established by a governing board. In
developing such plans, the governing board is required to consult
with representatives of the units of general local government
within whose boundaries are located any portion of the new town
demonstration area.

Requires a new town plan to provide for carrying out a new town
development demonstration providing assistance within a new town
demonstration area, which must be a geographic area defined in
the new town plan-(1) that is one of pervasive poverty,
unemployment, and general distress; (2) that has an unemployment
rate of not less than 1.5 times the national unemployment rate
for the 2 years preceding approval of the new town plan; (3) that
has a poverty rate of not less than 20 percent for such 2-year
period; (4) for which not less than 70 percent of the households
living in the area have incomes below 80 percent of the median
income of households of the unit of general local government in
which they are located; (5) that has a shortage of adequate jobs
for residents; and (6) that is located-(a) in or near the city of
Los Angeles, in the State of California; and (b) within an area
of which the President, pursuant to title IV or V of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act,
declared that a major disaster or emergency existed for purposed
of such Act as a result of the civil disturbances involving acts
of violence occurring on or after April 29, 1992, and before May
6, 1992.

Requires new town plan to include the following information: (1)
Governing board-A description of the members and purposes of the
governing board that developed the plan, the manner in which
members of the governing board were selected, and the businesses,
agencies, interests, and community ties of each member of the
government; (2) New town demonstration area-A definition and
description of the new town demonstration and description of the
new town demonstration and description of the new town
demonstration area for the new town development demonstration;
(3) Target Community-A description of the economic, social,
racial, and ethnic characteristics of the population of the
neighborhood or area in which the new town demonstration area is
located; (4) Agreements-Agreements that the governing board will
carry out the new town demonstration program in accordance with
the requirements of the program; (5) Housing units-A description
of the number, size, location, cost, style, and characteristics
of rental and homeownership housing units to be developed under
the new town demonstration program, any financing for developing
such housing, and the amount of secondary soft mortgage financing
for developing the housing under the program; (6) Jobs-A
description of the number, types and duration of any new jobs
that will be created in the new town demonstration area and
surrounding areas as a result of the demonstration program, and
of any job training activities and apprenticeship programs to be
made available in connection with the program; (7) Social
services-A description of the social and supportive services to
be made available under the demonstration program to residents of
housing assisted under the demonstration program and to residents
of the new town demonstration area; (8) Supplemental resources-A
description of any funds, assistance, in-kind contributions, and
other resources to be made available in connection with the
demonstration program, including the sources and amounts of any
private capital resources and non-Federal funds required; (9)
Contractors and developers-A listing of contractors and
developers who will carry out any construction and rehabilitation
work for development of housing under the demonstration program
and the expected costs involved in hiring such contractors and
developers; (10) Financing for homebuyers-A description of any
mortgage lenders who have indicated that they will make financing
available to families purchasing housing developed under the
demonstration program through mortgages eligible for insurance
under this program and proposed terms of mortgages; (11)
Commitments-Evidence of any commitments entered into for making
any of the resources-jobs, social services, and other
resources-available in connection with the demonstration program;
(12) Community development activities-A description of the
community development activities to be carried out with
assistance under this program the amount of assistance necessary
for such activities, and of the projected uses of such
assistance.

Requires a governing board to submit a new town plan, within 6
months of enactment, to the chief executive officers of each unit
of general local government within whose boundaries is located
any portion of the new town demonstration area described under
the plan of the board.

Requires for a plan to be eligible for assistance that the chief
executive officer of all units of general local government to
whom the new town plan is submitted approve the plan after
review. Permits a governing board to resubmit for approval any
plan returned by any such chief executive officer to the
governing board, and permits such chief executive officer, upon
returning the plan, to indicate any modifications necessary for
approval. Does not allow a new town plan to be approved unless
such chief executive officers determine that the membership of
the governing board is capable of carrying out the plan.

Permits an approved new town plan for the demonstration program
developed by the governing board to be amended by the board by
obtaining approval of the amendment in the manner provided under
this program for approval of plans. If the chief executive
officer of the unit of general local government does not approve
or return the amended plan within 30 days of submission, the
amended plan shall be considered to be approved.

Sec. 1103. New town demonstration program requirements

Requires each of the 2 new town development demonstration
programs selected for assistance under this program to be carried
out by the governing board submitting the new town plan for the
demonstration program in accordance with such plan (and any
approved amendments of such plans).

With respect to any activities carried out under the
demonstration program, requires the program to give preference in
awarding contracts, purchasing materials, acquiring services, and
obtaining assistance or training, to contractors, businesses,
developers, professionals, and other establishments located or
having offices within the new town demonstration area.

Requires the demonstration program to construct or renovate not
less than 1500 dwelling units in the new town demonstration area,
of which not less than 60 percent must be units available for
purchases by the occupant.

Require units of varying sizes and costs to be designed and
developed under the demonstration program so that the program
provides housing affordable to families of varying incomes not
exceeding 120 percent of the median income for the area in which
the new town demonstration area is located, including very low-
and low-income families. Requires dwelling units developed under
the demonstration program for purchase by the occupant initially
to be sold at prices affordable to families eligible to purchase
such units. Requires such units to be available for purchase only
by families having incomes not exceeding the income guidelines
specified for the program. Requires demonstration to develop 2-,
3-, and 4-bedroom units for purchase, which shall not be smaller
than 1,400 square feet in size and not larger than 2,000 square
feet in size. Requires that dwelling units developed under the
demonstration program that are to be available for rental must
include family-type units and single bedroom and efficiency units
designed for elderly occupants. Such units must be available for
occupancy only by families who (upon initial occupancy) have
incomes of (A) less than 60 percent of the median income for the
area, or (B) less than $20,000. The units shall initially be
available for rental at prices of not less than $400 per month
and not more than $500 per month, except that an occupant family
shall pay not more than 30 percent of the family income for rent.

Requires the demonstration program to provide for appropriate
social and supportive services to be made available to residents
of housing assisted under the demonstration program and to other
residents of the new town demonstration area, which may include
rental and homeownership counseling, child care, job placement,
educational programs, recreational and health care facilities and
programs, and other appropriate services.

Requires the demonstration program to provide, to the extent
practicable, that activities in connection with the demonstration
program, including development of housing and community
development activities, must employ and provide job training
opportunities for residents of the housing assisted under the
demonstration program and other residents of the new town
demonstration area.

Requires the demonstration program to provide for coordination
with banks, credit unions, and other mortgage lenders to make
financing available to purchase of units developed under the
demonstration program through mortgages eligible for insurance
under this program, and must give preference to such mortgage
lenders who have offices located within or near the new town
demonstration area.

Requires demonstration program to encourage, and provide for
development of, appropriate support facilities to serve residents
in the housing developed under the program, including
infrastructure and commercial facilities.

Requires the governing board carrying out the demonstration
program to ensure that not less than 25 percent of the total
amounts used to carry out the demonstration program is provided
from non-Federal sources, including State or local government
funds, any salary paid to staff to carry out the demonstration
program, the value of any time, services, and material donated to
carry out the program, the value of any donated building, and the
value of any lease on a building.

Sec. 1104. Federal mortgage insurance

Requires the Secretary (to the extent authority is available) to
insure mortgages pursuant to title II and section 251 of the
National Housing Act under this program involving properties upon
which are located homeownership dwelling units that are developed
under the new town demonstration programs. Requires that
mortgages insured under this program provide for periodic
adjustments in the effective rate of interest charged, and have a
maturity of 35 years from the date of the beginning of the
amortization of the mortgage.

The Secretary may provide insurance under this program for a
mortgage only if the governing board for the demonstration
program for the new town demonstration area in which the property
subject to the mortgage is located has indicated to the Secretary
approval of the mortgage in connection with the demonstration
program.

Using any authority provided pursuant to section 531(b) of the
National Housing Act to enter into commitments to insure
mortgages in fiscal year 1993, the Secretary is required to enter
into commitments to insure loans and mortgages under this section
with an aggregate principal amount not exceeding such sums as may
be necessary to carry out the demonstration. Provides that
mortgages insured under this section not be considered for
purposes of the aggregate limitation on the number of mortgages
insured under section 251 of the National Housing Act.

Sec. 1105. Secondary soft mortgage financing for housing

Requires the Secretary, to the extent amounts are provided in
appropriation Acts, to provide assistance through the governing
boards carrying out the new town demonstration programs to assist
in the development of housing under the program. Provides that
any assistance provided can be only for costs in planning,
development, constructing, and rehabilitating housing under the
demonstration program available for rental or purchase by the
occupant. The governing board shall determine, according to the
new town plan for the demonstration program, the allocation of
amounts of assistance. Prohibits the Secretary from providing
assistance under this section for the development of housing
under a demonstration program in an amount exceeding $50,000 per
dwelling unit assisted. Requires assistance to be repaid in
accordance with program guidelines. Repayment of the amount of
any assistance provided with respect to any building containing
rental units or any dwelling unit available for purchase by the
occupant that is developed under a demonstration program must be
secured by a second mortgage held by the Secretary on the
property involved. During the period ending upon repayment of the
assistance, any building containing rental units that is provided
assistance must be used as rental housing. During the period
ending upon repayment of the assistance, any dwelling unit made
available for purchase by the occupant that is provided
assistance under this program may be sold only to a family having
an income not exceeding 120 percent of the area median income.
Requires any assistance for a building or dwelling unit to bear
interest at a rate equivalent to the rate for the most recently
marketable obligations issued by the United States Treasury have
terms of 10 years. The interest on such assistance must be repaid
only upon sale of the building. Requires that the assistance
provided for any building containing rental units or any dwelling
unit available for purchase by the occupant be considered to have
been repaid if the original purchaser of the building or the
dwelling unit pays to the Secretary an amount equal to 50 percent
of the amount of the assistance provided.

Authorizes to be appropriated for fiscal year 1993 such sums as
may be necessary.

Sec. 1106. Community development assistance

Requires the Secretary to provide assistance, to the extent
amounts are provided in appropriation Acts, to units of general
local governments to address vital unmet needs and to promote the
creation of jobs and economic development in connection with the
new town demonstration programs.

Authorizes assistance to be provided only to units of general
local government-(1) within whose boundaries are located any
portion of the new town demonstration areas described under the
new town demonstration plans for the demonstration programs; and
(2) that make certifications to the Secretary that the grantee
will comply with the provision of section 105(b) of the bill,
H.R. 4073, regarding reimbursement of administrative expenses and
will comply with a residential antidisplacement and relocation
assistance plan.

Authorizes activities assisted with amounts provided to include
only the following activities: (1) The acquisition of real
property (including air rights, water rights, and other interests
therein) that is located within the new town demonstration area
and is (a) blighted, deteriorated, undeveloped, or
inappropriately developed from the standpoint of sound community
development and growth; (b) appropriate for rehabilitation or
conservation activities; (c) appropriate for the preservation or
restoration of historic sites, the beautification of urban land,
the conservation of open spaces, natural resources, and scenic
areas, the provision of recreational opportunities, or the
guidance of urban development; (d) to be used for the provision
of public works, facilities, and improvements eligible for
assistance under this program; (e) to be used as a facility for
coordinating and providing activities and services for high risk
youth; (f) to be used for other public purposes; (2) The
acquisition, construction, rehabilitation, or installation of
public works or public facilities within the new town
demonstration area, including buildings for the general conduct
of government and facilities for coordination and providing
activities and services for high risk youth; (3) the clearance,
removal, and rehabilitation of buildings and improvements located
within the new town demonstration areas, including interim
assistance, assistance for facilities for coordinating and
providing activities and services for high risk youth and
assistance to privately owned buildings and improvements, and the
provision of public services within the new town demonstration
area that are concerned with job training and retraining, health
care and education, crime prevention, drug abuse treatment and
rehabilitation, child care, education, and recreation, which may
include the provision of public health and public safety
vehicles. The acquisition and rehabilitation of housing for low-
and moderate-income families within the new town demonstration
area, except that any grantee that uses amounts received under
this program for housing activities must make not less than 15
percent of the amount used for such housing activities available
only for nonprofit organizations. Not more than 25 percent of the
amount of any assistance provided (including program income) to
any unit of general local government may be used for such
activities assisted under this program; (5) Relocation payments
and assistance for individuals, families, business,
organizations, and farm operations that are displaced as a result
of activities assisted under this program; (6) payment of
reasonable administrative costs associated with activities
assisted under this program and any expenses of developing the
new town plan.

Prohibits the Secretary from providing more than 50 percent of
any amounts appropriated in connection with any one of the 2 new
town demonstration programs.

The provisions of subsections (f), (g), and (h) of section 104,
subsections (c) and (d) of section 105, section 107, 108, 109,
and 110 of the bill, H.R. 4073, 102nd Congress apply to grantees
receiving assistance. Authorizes to be appropriated for fiscal
year 1993 such sums as may be necessary.

Sec. 1107. Governing board

Requires a governing board to be a board organized for the
purpose of developing a new town plan and carrying out a new town
development demonstration. Requires each governing board to
consist of not less than 10 members, who must include-(1)
residents of the area in which the new town demonstration area
under the plan developed by the board is located; (2) owners of
business in such area; (3) leaders or participants in community
groups in such area; and (4) representatives of financial
institutions located or having offices in such area provides that
a governing board may organize itself and conduct business in the
manner that the board determines is appropriate to carry out the
new town development demonstration.

Sec. 1108. Reports

Requires each governing board carrying out a new town development
demonstration to submit to the Congress the following
information: (1) New town plan-Upon approval of the new town plan
of the governing board, a copy of the approved plan is required;
(2) Annual reports-For the 5-year period beginning upon the
approval of the new town plan, annual reports for each 12-month
period during such 5-year period, are required to be submitted
within 3 months after the expiration of the 12-month period. Each
report must include a description of any activities during such
period to carry out the demonstration program of the governing
board, the use during such period of any assistance provided, and
any amendments to the new town plan approved during such period.

Sec. 1109. Definitions

Provide definitions.

EXPLANATION OF H.R. 5334 AS REPORTED BY THE COMMITTEE ON BANKING,
 FINANCE AND URBAN AFFAIRS

Effective date

H.R. 5334, as reported by the Committee on Banking, Finance and
Urban Affairs, includes a provision providing that the Housing
and Community Development Act of 1992 (the short title of H.R.
5334) and the amendments made by such Act shall take effect upon
the date of enactment unless otherwise provided in the Act.

This provision also states that any authority to issue
regulations and any specific requirement to issue regulations by
a date certain will not affect the immediate effectiveness of a
provision of or amendment made by this act.

The Committee is aware that this provision is a restatement of
existing law; however, the Committee feels that this provision is
warranted by the continuing failure of the Department of Housing
and Urban Development (HUD or the Department) to issue timely
regulations and by HUD's refusal to implement enacted provisions.
For example, HUD has refused to allow public housing authorities
(PHAs) to use section 8 assistance in units owned by the PHA even
though section 548 of the Cranston-Gonzalez National Affordable
Housing Act (Public Law 101-625) (NAHA) explicitly gave PHAs such
authority. The Committee recognized this failure in section 143
of the reported bill when it made section 548 self-executing. The
Committee firmly believes that HUD's actions are unwarranted and
are legally incorrect.

Another example of delay in implementing regulations is HUD's
inaction in the area of energy efficiency standards. In sections
109, 944, 945, 946, and 961 of NAHA, Congress directed HUD to
undertake several actions that would increase HUD's commitment to
energy efficient housing, including issuing energy efficiency
standards for newly constructed HUD-assisted and FHA-insured
housing; preparing a report assessing the activities undertaken
by HUD to increase energy efficiency in housing; establishing a
standard measure by which changes in energy conservation over
time may be compared; and establishing a five year plan for
policies and activities to be undertaken by HUD to provide for,
encourage and improve energy efficiency in newly constructed,
rehabilitated and existing housing. HUD has not yet complied with
a single one of the statutory obligations listed above. This
inaction on the part of HUD flies in the face of specific
statutory deadlines furthering important policies.

Additionally, HUD has not issued regulations implementing section
322 of NAHA. This section allows mortgages approved for the FHA
direct endorsement program to contract with an appraiser,
including partnerships or sole proprietorships organized as
corporations, to conduct an appraisal so long as such appraisals
are consistent with standards and qualifications established by
the Secretary. The authority contained in section 322 is strongly
desired by the private sector as a way to expedite and make
cost-efficient the home loan underwriting process.

In light of HUD's inaction, the Committee believes that it is
both necessary and appropriate for the Committee to make clear
that once enacted a provision is effective, despite the
Department's desires. In adopting this provision, the Committee
does not intend to cast doubt on the viability of the general
rule of statutory construction that an enacted provision is
effective upon enactment.
In addition to adopting the provision ensuring that the Act is
effective upon enactment, the Committee bill contains language
throughout the bill requiring that implementing regulations be
issued for provisions of law that HUD has refused to act on.
Further, to avoid arguments over the need for and timing of
regulations to implement the provisions of and amendments made by
the Committee bill; the Committee has included provisions
requiring that final regulations implementing most provisions of
the bill be issued within 180 days of enactment and that such
regulations be issued only after notice and public comment. The
Committee wishes to express strong concern with the Department's
desire to amend its regulations at 24 C.F.R. Part 10 to reduce
the necessity for regulatory rulemaking. The Committee believes
that there are only rare exceptions when notice and comment
rulemaking should not be used to implement enacted programs and
changes to existing programs.

                   TITLE I-HOUSING ASSISTANCE

                 Subtitle A-General Provisions

Low-income housing authorizations

H.R. 5334, as reported by the Committee, reauthorizes the public
housing and section 8 programs contained in the subsidized
housing account under the United States Housing Act of 1937 (the
1937 Act) for fiscal year (FY) 1993. In general, the total
funding levels authorized for these subsidized housing programs
represent an approximate 4 percent increase above the levels
authorized for these programs for FY 1992.

In many cases, the bill as reported by the Subcommittee on
Housing and Community Development contained much higher funding
levels for these subsidized housing programs; however, these
levels were reduced by the Full Committee resulting in the levels
in the reported bill.

The Committee bill authorizes approximately $15.2 billion for the
public housing and section 8 programs under the subsidized
housing account authorized under section 5(c) of the 1937 Act. Of
the $15.2 billion, approximately 61 percent, or $9.2 billion, is
authorized to continue existing section 8 assistance ($7.3
billion for section 8 expiring contracts and $1.9 billion for
section 8 contract amendments). These funding levels are the same
as those proposed by the Administration in its FY 1993 Budget
Request. Because these amounts for section 8 expiring contract
renewals and contract amendments are for existing assistance,
they do not represent any net new units in the existing
subsidized housing stock. However, the Committee believes that
all expiring contracts should be renewed in order to retain the
existing level of subsidized housing and avoid the displacement
of millions of persons who currently reside in subsidized
housing. In addition, while the preservation and replacement of
existing subsidized housing units are important, the Committee
strongly believes that the country must also continue to develop
and build many more subsidized housing units in order to assist
the millions of homeless and low-income Americans who are in dire
need of affordable housing.

The Committee is concerned because the nation is losing
substantial ground in providing additional, incremental
subsidized housing units for low-income Americans. For instance,
under the Reagan and Bush Administrations, the subsidized housing
account has been reduced by 82 percent, from $26.7 billion in FY
1980 to $8.4 billion in FY 1992 (the percentage reduction was
calculated by converting the 1980 dollars into 1992 dollars). The
Committee believes that the public housing program has
successfully housed millions of low-income Americans since its
creation and believes that public housing is a viable and much
needed program throughout the United States. The problem of
affordable housing in this country is not simply one of money. In
many of our large cities and rural areas, there is a far too
limited supply of housing affordable to very low-income families
even with rental assistance; the housing needs of these families
can only be met through programs that provide deep subsidies,
such as the public housing program.

Given that there are over 1.5 million families on public housing
and assisted housing waiting lists, the Committee believes that
the development of additional public housing is critical. For
that reason, the Committee bill authorizes $579.5 million for the
development of new public housing and $247.3 million for the
development of new Indian public housing.

The Committee bill authorizes approximately $2.3 billion for the
modernization and rehabilitation of the existing public housing
stock through the comprehensive modernization grant program under
section 14 of the 1937 Act as amended by NAHA. The Committee
believes that sufficient funding for public housing
rehabilitation and modernization must be authorized given that a
1988 study prepared for the Department, at the request of
Congress, projected that over $20 billion is needed to
rehabilitate the existing public housing stock. ``Study of the
Modernization Needs of the Public and Indian Housing
Stock-National, Regional and Field Office Estimates, Backlog of
Modernization Needs.'' From this comprehensive grant program
authorization, the Committee directs that at least $50 million
will be used in the abatement of lead-based paint in public
housing.

The Committee is concerned that in many cases the recent formula
allocations to PHAs under the comprehensive grant program were
significantly reduced below HUD's December 1991 preliminary
estimate. The Committee is concerned that PHAs may have received
much more of a reduction in their formula allocations than can be
attributed to the 4.5 percent reduction in FY 1992 appropriations
which HUD continues to cite as the reason for the modernization
fund reduction. The Committee is concerned that reductions in a
PHA's modernization allocation could lead to further
deterioration of public housing units, and the Committee urges
HUD to reallocate modernization funding based on its December
1991 presumptive estimates taking into account the reduction in
total modernization funds provided in Appropriations Acts.

The Committee bill authorizes $85.8 million for FY 1993 for the
replacement of those public housing units which have been
proposed by PHAs and approved by HUD for demolition or
disposition. The Committee authorizes this funding for
one-for-one replacement through the creation of additional public
housing units or through the provision of 15-year project-based
section 8 units. The Committee reaffirms the principle that there
must be one-for-one replacement for public housing units proposed
for demolition or disposition and believes that this one-for-one
replacement principle must be adhered to so that assisted units
will be available to low-income persons in future years. Further,
the Committee bill specifically authorizes approximately $32
million, from the $85.8 million total, for replacement activities
through the provision of 15-year section 8 project-based
certificates. The Committee would again urge that the
Appropriations Committee heed this authorization and specifically
provide for 15-year project-based assistance as replacement
units.

The Committee bill authorizes approximately $2 billion for
incremental section 8 rental assistance in FY 1993. The Committee
bill merges the existing primary forms of tenant-based section 8
assistance-certificates and vouchers-into one program, the
section 8 tenant-based rental assistance program. The Committee
bill provides from the $2 billion total, such sums as may be
necessary for 15-year project-based section 8 assistance for a
multi-cultural tenant empowerment and homeownership project in
the District of Columbia. The Committee believes that this
set-aside will assist low-income persons in the District of
Columbia in achieving viable housing opportunities through such
housing forms as low-income tenant cooperatives. This
authorization is the direct result of the Committee's hearing on
civil disturbances and housing needs in the District of Columbia
which was held on September 6, 1991, following the outbreak of
civil disturbances in the Mount Pleasant-Adams Morgan area. The
Committee both held the hearing and personally toured the
neighborhood to review the housing and community development
needs in that area.

The Committee bill authorizes for FY 1993 approximately $455.6
million for the section 8 property disposition program and $173.6
million for the section 8 loan management program. The Committee
believes that each of these programs is vital in helping to
preserve the continued availability of the federally subsidized
housing stock for low-income Americans.

Extension of ceiling rents

The Committee bill contains a number of amendments to existing
law designed to encourage an economic mix within public housing
projects and to give flexibility to PHAs in tenant selection
procedures, particularly procedures relating to tenant selection
based on locally developed preferences. While the Committee bill
makes these changes, the Committee wishes to emphasize that all
applicants on the public housing waiting lists are in need of
housing, and all efforts should be made by PHAs to place
applicants on a non-discriminatory basis in housing units without
regard to their income status.

In the absence of an adequate supply of decent, affordable
housing for low- and very low-income families, a tragic dilemma
has developed: The need for an economic and social mix in public
housing to assure a viable living environment for these families
is pitted against the goal of assuring that families in need of
housing be given preference without discrimination. This is the
unfortunate outcome of inadequate funds to meet the demand for
housing. The Committee is concerned that as the quality of life
in many public housing projects deteriorates because, among other
factors, such projects have become the only shelter resource of
the poorest of poor, many of whom have multiple problems
including ill health, drug or alcohol addiction, lack of
education, unemployment and other severe misfortunes, the current
characterization of certain public housing projects as
``failures'', ``disasters'', ``detestable housing for people''
will become a self-fulfilling prophecy. The Committee, therefore,
believes that some reasonable compromise must be made in resident
selection policies to stabilize projects for the benefit of the
families that occupy them. Public housing families should not be
deprived of the diversity that is characteristic of non-public
housing neighborhoods. The Committee believes the policy of non-
discriminatory public housing tenant selection and the goal of
assuring a socially viable environment in the nation's public
housing can be balanced, and the Committee bill in this and other
sections strikes the necessary balance.

The Committee bill recognizes that the short-term provision for
ceiling rents in the Housing and Community Development Act of
1987 (P.L. 100-242) (1987 Housing Act) has helped to achieve
stability in the public housing projects. Consequently, the
Committee bill removes the five-year limitation currently in
existing law on the application of ceiling rents and permanently
extends ceiling rents in effect prior to December 15, 1989. The
Committee has made these amendments to existing law because the
Committee recognizes that one way of encouraging relatively
higher income tenants to remain in public housing is to allow
their rent to be capped at an amount agreed to by the PHA and
HUD.

The Committee recognized in the 1987 Housing Act that the
rent-to-income ratio method of setting public housing rents (i.e.
rent equal to 30 percent of a tenant's adjusted income) is often
inequitable for struggling working families, particularly as they
improve their incomes, because the PHA automatically takes
one-third of such tenant's income. The Committee believes that
without ceiling rents, PHAs could lose important economic and
social diversity within public housing projects.

In addition, the Committee bill clarifies existing law by
referring to ``actual'' rather than ``imputed'' debt on a project
as part of the calculation of minimum ceiling rents. The
Committee believes that this change is necessary in order to
prevent HUD from ``imputing'' debt service to a debt-free project
as is currently done by the Department by regulation. The
Committee believes that only debt that actually exists should be
used to calculate ceiling rents.

Income eligibility for assisted housing

The Committee bill amends existing law in section 16 of the 1937
Act to allow PHAs to select the working poor (i.e. those persons
with incomes between 50 percent-80 percent of area median income
as opposed to those below 50 percent) for tenancy regardless of
their position on the public housing waiting list. Section 16
currently prohibits PHAs from selecting families for residence in
an order different from the order on which persons appear on the
waiting list for the purpose of selecting relatively higher
income families for residence. This provision is often referred
to as the ``anti-skipping'' provision. This Committee first
expressed its concern about PHAs skipping families on the waiting
list in the Conference Report to the 1987 Housing Act.
Eventually, this anti-skipping provision was enacted in the
Stewart B. Mckinney Housing Assistance Amendments Act of 1988
(P.L. 100-628).

The bill, however, only waives the anti-skipping prohibition of
section 16 for the 30 percent of tenants selected under local
preferences. The Committee believes that this provision will
assist in creating a greater economic mix within public housing
projects by allowing PHAs to select tenants to maintain or
achieve an income mix within projects. The Committee also intends
that this provision be administered in compliance with all other
HUD administrative requirements concerning local preferences,
income targeting, and economic mix.

Family self-sufficiency program

The Committee bill makes several changes to the family
self-sufficiency program (FSS), section 23 of the 1937 Act as
added by section 554 of NAHA, which are intended to make the
program more workable and effective. These changes are based on
actual experience during the voluntary phase of the program and
the interim GAO report on the program required by NAHA in section
554(b). This program links housing assistance to supportive
services, including job training and child care, in order to
promote self-sufficiency and economic independence. It was a
voluntary program for PHAs and Indian housing authorities (IHA)
during fiscal years 1991 and 1992; however, PHAs and IHAs will be
required to implement self-sufficiency programs in conformance
with HUD's regulations starting in FY 1993, unless the Secretary
waives participation. The Committee has been concerned that the
program as implemented would be unable to meet its stated
purposes, and would be an administrative nightmare for the PHAs,
the IHAs, and the participating families.

Although the Committee strongly endorses the concept of
self-sufficiency and supportive services for public housing and
section 8 tenants, the Committee continues to be concerned about
a mandatory program in which housing authorities really have no
control over the availability or funding of supportive services
or future jobs. This lack of resources is particularly acute
because the program requires that each PHA have a number of
participants in its family self-sufficiency program equal to the
number of all incremental housing assistance made available to
the PHA.

Purpose.-The Committee bill clarifies the purposes of the family
self-sufficiency program to include improving education and
employment status, as well as achieving a greater measure of
economic independence and self-sufficiency. The Committee adopted
this clarifying language because the Committee was concerned that
the original purpose of the program was unclear because it did
not define what self-sufficiency was or when it would be
achieved. The Committee intends that improvements in education or
employment be considered as measures of economic self-sufficiency
and that the success of the program be determined based on the
relative achievements of the individual not on the achievement of
some arbitrary criteria.

Exception to required establishment of the program.-The Committee
recognizes that even with the best of intentions, many PHAs will
be unable to obtain the services that participants in family
self-sufficiency need, including job training. The GAO, in an
April, 1992, report which was issued pursuant to section 554(b)
of NAHA and assessed the linkages between housing and supportive
services in promoting self-sufficiency, found that it is
increasingly difficult to obtain services for FSS participants as
a result of budgetary cutbacks at all levels of governments. The
Committee bill expands the exceptions for mandatory participation
by PHAs specifically to include lack of JTPA or JOBS funding and
prohibits the Secretary from withholding assistance or in any way
penalizing PHAs that have received a waiver from participating in
the FSS program.

The Committee is concerned that the Secretary's well meaning
dedication to family self-sufficiency may force housing
authorities which are in no position to carry out an FSS program
for a variety of reasons to spend time and energy implementing
FSS where it cannot succeed. Further, the Committee intends to
provide some protection for PHAs and IHAs that reasonably cannot
be expected to carry out FSS. However, the Committee believes
that because the bill limits the size of the program that must be
maintained by any given PHA, fewer PHAs will need a waiver under
the FSS program as amended by the bill than under current law.

Scope of program.-The Committee is concerned that by requiring
that a PHA operate a FSS program equal in size to the amount of
incremental assistance received by the PHA, the required program
would encompass units not really available for the program. The
FSS regulations place no limitations on the definition of
incremental assistance which must be available to FSS
participants. Under current law, conceivably, the Secretary could
include vacant units returned to occupancy, units added under a
demolition/dispostion program, and units designated for elderly
or disabled families. Not every family who applied for or resides
in public housing or receives section 8 assistance will be able
to participate and not every section 8 unit is operated by the
public housing authority or should be included under FSS.
Therefore, the Committee bill places limitations on the scope of
the program.

The bill clarifies that only 50 percent of the incremental
assistance is required to be dedicated to family self-sufficiency
participants. One reason for reducing to 50 percent the number of
incremental units that will be governed by the FSS rules, is to
ensure that disabled, handicapped, elderly and other families who
cannot be expected to participate in the program will not be
bypassed by PHAs as they select tenants from their waiting list
in order to house those applicants who are willing and able to
participate. Nor does the Committee expect the PHAs to bar
participation by handicapped individuals who may be capable of
holding a job with the proper training.

Limitation on portability.-The Committee is concerned that some
residents may agree to participate in family self-sufficiency
simply in order to receive housing assistance with which the
resident would be able to move to another jurisdiction. To
prevent this occurrence, the Committee bill requires section 8
assistance provided under family self-sufficiency to remain in
the jurisdiction carrying out the family self-sufficiency
program.

Contract of participation.-The Committee recognizes that one of
the drawbacks to the family self-sufficiency program is that
there are no clear standards for successful participation in the
program or equitable procedures for terminating assistance in the
event of a family's non-compliance with the contract of
participation. The Committee bill provides that each contract of
participation must include interim and final goals by which to
measure performance under the program. It also prohibits HUD from
requiring a family to refuse housing assistance as a condition of
withdrawing funds from established escrow accounts.

The Committee bill provides that housing authorities may
terminate or withhold assistance under section 8 only if the PHA
determines through an administrative grievance procedure, which
protects the rights of the family, that the family has failed to
comply with the requirements of the contract without good cause.
There can and will be many instances where the tenant will have
good cause not to participate or to meet established goals,
including loss of child care, pregnancy, illness among family
members, or disability during he term of the contract. Some
long-term unemployed persons who choose to participate may
require a broad range of services that are not available for
them. The Committee intends that only if tenants willfully abuse
the program should they lose their hosing subsidy.

Incentives for participation and action plans.-The Committee bill
requires PHAs to establish an incentive program to encourage
families to participate in the program. The incentives are to be
outlined in an action plan prepared by the PHA and approved by
the Secretary. While the establishment of an escrow savings
account is no longer mandatory for every participating family, it
is not the intent of the Committee to discourage the
establishment of such accounts. Because of the ability of a PHA
to hold a family's rent constant as income increases is permitted
only in conjunction with an escrow savings account, it is the
Committee's belief that these accounts will be a positive
incentive for families' to participate in the program. The
Committee, therefore, encourages PHAs to establish escrow savings
accounts for participating families, as well as use other
incentives, locally developed and defined in a PHA's action plan.

Amounts held in escrow accounts are to be made available to
families upon completion of the final goals established in the
contract of participation. In certain instances, early withdrawal
of a portion of the escrow may be warranted to enable a family to
continue its self-sufficiency plan. For example, a family might
need funds to pay for higher education costs, specialized job
related training, child care, or transportation costs.
Consequently, the Committee bill allows a PHA, under the action
plan approved by the Secretary, to make a portion of the escrow
available to families based on compliance with and completion of
interim goals as set out in the contract of participation,
provided that any such amounts are used by the participating
families for purposes consistent with their self-sufficiency
contract.

Applicability to Indian housing authorities.-The Committee is
concerned that the mandatory provisions of the self-sufficiency
program are particularly onerous to most Indian housing
authorities which have little access to services and to
employment. However, the Committee is aware that certain features
of the program, including the escrow accounts, rent limitations,
or any other incentives to families to participate in a
self-sufficiency program, can be important tools for IHAs.
Therefore, the Committee bill permits IHAs to participate in the
family self-sufficiency program at their discretion.

              Subtitle B-Public and Indian Housing

Major reconstruction of obsolete projects

Many public housing projects and some public housing agencies are
in trouble. Crime and substandard living conditions plague many
tenants and thousands of public housing units stand vacant. The
causes of these problems are numerous and inexorably linked to
the problems of our society as a whole. Lack of funding for
housing and other support services such as education and social
services, the rise of drug use in the inner cities especially the
use of crack cocaine, poorly designed or placed projects, and the
lack of local support for public housing and other forms of
affordable rental housing are just a few of the reasons that
public housing projects become troubled. In addition, the
Committee is aware that public housing agencies are, like any
other business, subject to fraud and mismanagement and that this
mismanagement can lead to improper or inefficient use of funds
and a lack of maintenance in public housing projects.

However, the Committee also recognizes that these troubled
projects and agencies do not present a complete picture of public
housing. Thousands of units and hundreds of agencies are well run
and provide decent, desirable housing.

Although the problems of troubled agencies and projects are
complicated, the Committee is committed to developing the
programs and providing the funding necessary to address these
problems. The Committee, however, has rejected the
Administration's proposed solutions to these problems, known as
Perestroika. The Perestroika programs provide for a change in
management or ownership in the projects of the most troubled
public housing agencies. The majority of the Committee rejected
this program because at best it is duplicative, and at worst it
is an attempt to hide years of neglect at the federal level
behind a veneer of tenant empowerment. The central problem with
Perestroika is its failure to recognize that the root of most
problems in public housing projects is not the character of the
management or the identity of the owners, it is money. Lack of
funds to rebuild or replace public housing that is too dense,
poorly sited, or in dire need of repair results in substandard
living conditions or vacant units. Burdensome regulatory
requirements and delays in the distribution of funds result in
appropriated funds going unspent. Perestroika would supply no new
funds for public housing; it would simply repackage existing
programs for tenant management and ownership in a new package
with a new name.

The Committee supports the concept and practice of tenant
participation in the management of public housing. Such
cooperation between tenants and public housing agencies is to the
benefit of both parties, and the Committee believes that this is
a practice encouraged by most public housing agencies. Further,
the Congress developed in NAHA a program specifically designed to
allow public housing residents to own their units, HOPE I, HOPE
for Public and Indian Housing Homeownership.

Because Perestroika does not address the most basic problems of
troubled public housing, the Committee chose to rely on and
strengthen the programs in existing law. In this regard, the
Committee has authorized funds for HOPE I, the section 14
comprehensive modernization program, public housing development,
the section 14 vacancy reduction program, public housing
demolition/disposition and public housing resident management.
Further, the Committee is authorizing a new program, the major
reconstruction of obsolete projects program. The Committee
believes that if the Department acts properly and promptly to
implement these programs and focuses its efforts on utilizing
these programs to address the problems in public housing, that
with the help of tenants, the Department will be able to replace
troubled projects with livable, affordable housing.

The Committee is especially concerned about the failure of the
Department to implement the vacancy reduction program in existing
law. That program was specifically designed to address the
problems of vacant public housing, and the Committee sees no
reason to authorize additional vacancy reduction programs until
the Department undertakes the reviews and planning provided for
in existing law.

The Committee also intends that the Department devote the
resources necessary to monitor public housing authorities. In
case of clear mismanagement or incompetent management, the
Department should not be hesitant to have a receiver appointed.

The Committee bill for the first time authorizes the major
reconstruction of obsolete projects (MROP) program as a complete
program and requires regulations to implement the program. MROP
was first created in 1985 through the appropriations process.
While the program has received an appropriation each year since
it was created, HUD has never issued rules to implement a formal
program. Program guidelines are provided every year in a Notice
of Funding Availability (NOFA), and consequently, the
requirements of the program change from year to year. The
Committee strongly believes that the MROP program must be
statutorily authorized to provide clear legislative intent and
policy on the purpose and criteria for the programs.

Since its creation, MROP has been funded through a set-aside of
approximately 20 percent of public housing development funds. The
Committee agrees with this approach and authorizes a permanent 20
percent set-aside from public housing development funds for MROP.
The Committee has included the MROP program as a set-aside under
the public housing development program because reconstructions
often have comparable costs to new projects.

The Committee notes that excessively dense public housing
projects continue to be successfully reconstructed throughout the
United States. Such reconstructions, while at times more
expensive than new construction or acquisition with substantial
rehabilitation, often prove to be a more feasible alternative
because the location for projects undergoing such reconstruction
are already available, whereas the placement of new projects,
whether newly constructed or acquired for public housing
purposes, may encounter opposition.

The Committee has defined eligible projects with the aim of
giving public housing agencies broad discretion in selecting
those projects which warrant reconstruction as distinguished from
modernization and which meet the criteria established in the
Committee bill. However, the Committee intends that MROP and
section 14 modernization program be mutually exclusive; the
choice of using MROP funds in a building or project precludes the
use of modernization funds in the same building or project. The
Committee intends that this prohibition prevents modernization
funds from being used simultaneously with the use of MROP funds.
In addition, the Committee intends that if a building or project
has been substantially rehabilitated with either section 14 or
MROP funds at any time during the three years preceding an MROP
application, the application be denied. Finally, the Committee
intends that only emergency modernization funds be used for the
three years after an MROP-funded reconstruction. However, the
Committee does not intend to preclude modernization funds being
used in one building of a project and modernization funds in
another. The prohibition extends only to the use of such funds in
the building, or project in the case of a project-wide MROP
application, covered by the MROP application.

In establishing cost limits for this program, the Committee
intends that the Secretary recognize that reconstruction may in
some cases be more expensive than new development because of
unknown factors such as the existence of asbestos or lead-based
paint in a project undergoing reconstruction. In providing for
the higher cost limits, the Committee intends that the Secretary
approve an MROP application if the statutory criteria are met and
funds are available; the Secretary may not use lower development
costs as an excuse to deny an MROP application.

The Committee bill specifically authorizes the uses of MROP funds
for the costs of improving the management and operation of
projects undergoing redesign, reconstruction, or redevelopment in
order to maintain the physical improvements resulting from such
reconstruction. The Committee believes that both the physical and
management needs of a project must be addressed through the use
of MROP funds to ensure the continued success of the project.

The Committee intends that MROP be used only where the long-term
viability of projects can be assured. Hence, the Committee
provided that the life of the project be considered in selecting
applications and prohibited the demolition or disposition of
projects with MROP-funded rehabilitation for 10 years after such
rehabilitation, except in extraordinary circumstances such as in
the case of fire or other natural disasters.

Public housing tenant preferences

The Committee bill amends existing law to allow PHAs, in the case
of those projects with 25 units or more, to increase the local
preference from 30 percent to 50 percent of the units that become
available for occupancy in any one year. As with other provisions
mentioned above, the Committee believes that PHAs should have the
flexibility to achieve a greater economic mix within public
housing projects. The Committee bill gives some relief from the
federal preferences by changing the 70 percent federal, 30
percent local preferences requirement in existing law to a 50
percent-50 percent preference for those buildings with 25 or more
units.

Public housing operating subsidies

The Committee bill authorizes $2.169 billion for FY 1993 for
public housing operating subsidies and such sums as may be
necessary to provide each PHA with all funds in excess of those
appropriated in FY 1993, which the PHA is eligible to receive
under the performance funding system without adjustments for
estimated or unrealized savings. The Committee intends that PHAs
receive, subject to the appropriation of adequate sums, their
full amount of operating subsidies without regard to any
particular savings that may occur by a PHA.

The Committee bill also authorizes such sums as may be necessary
to provide for the cost of adjustments to income made in section
573 of NAHA relating to: 1) income not received by the family; 2)
the increase from $480 to $550 for each dependent; 3) the
allowance for medical expenses; and 4) the allowances for working
families and child support and alimony payments. The Committee
authorizes such sums for these adjustments to income in
recognition of their importance in providing true tenant
empowerment. When rent is tied to income as in the public housing
program, an accurate measure of income must be used. The
Committee believes that these small adjustments funded here will
aid in making the determination of the income of the tenant fair
and accurate. The Committee urges the appropriation of funds to
cover these adjustments.

In this regard, the Committee is aware of a practice of the
Department that is troublesome. When tenants receive lump sum
payments, for example lump sum payments from contested Social
Security or disability cases, the Department requires that
one-third of the amount received be paid by the tenant to the PHA
or the owner in the case of section 8 assistance. The PHA's or
the owner's request often comes after the time when the tenant is
required to spend or invest the funds, leaving the tenant with a
large bill and no money to pay it. In addition, such policy fails
to recognize that often the tenant has incurred expenses,
including litigation expenses, to obtain the payment. The
Committee would urge the Department to review its policy in this
matter and amend its regulations to exclude such lump sum
payments from the calculations of income.

The Committee also has learned that the Department is not
properly calculating assets of persons residing in assisted
housing. Where a family has net family assets in excess of
$5,000, annual income is supposed to include the greater of the
actual income or a percentage of the value of such assets based
on the current passbook savings rate as determined by the
Secretary. The Committee intends that the Secretary promptly and
at least annually revise this rate to reflect current banking
practices and economic conditions.

The Committee bill requires HUD to use the procedures providing
in the Negotiated Rulemaking Act of 1990 (P.L. 101-648) if it
seeks to amend the performance funding system to account for
vacant units. The Committee strongly supports the use of
negotiated rulemaking by HUD whenever possible and believes that
this subject is appropriate for negotiated rulemaking because of
the limited number of interested parties. The Committee continues
to be concerned about the Department's efforts to penalize PHAs
for the vacancies. The Committee strongly objects to the
Department's previous efforts to reduce operating subsidies for
vacancies because it was done without the consent of Congress
through regulatory fiat and the Committee supports the
Appropriations Committee action in disapproving the proposed
regulations published at 56 Fed. Reg. 45814 (September 6, 1991).
The Committee intends that any regulation in this area use the
negotiated rulemaking procedure to develop a proposed regulation
and that such a proposed regulation be subject to notice and
comment rulemaking before it is published as a final rule.

Public housing vacancy reduction

The Committee bill authorizes 9 percent of public housing
modernization funds for the public housing vacancy reduction
program which was created in section 510 of NAHA. This program
requires PHAs which have been designated as troubled or which
have twice the average vacancy rate among all PHAs to submit
vacancy reduction plans to HUD. The provision also requires HUD
to provide on-site assessment teams to work with PHAs to assess
the vacancy problems and management issues.

This program has not yet been implemented by HUD because it
believes that the program must receive an appropriation before it
can implement the program. The Committee does not agree with the
Department's position, and the Committee believes that HUD should
immediately work with PHAs to assess and deal with vacancy
problems as outlined under existing law. Further, the Committee
bill contains a 9 percent set-aside of modernization funding for
this program, instead of an authorization of specific funding, in
order for the vacancy reduction to be automatically funded from
amounts provided for the public housing modernization program. In
light of the Department's professed concern with the magnitude of
the vacancy problem, the Committee directs the Secretary to
implement the program in order to reduce the number of vacancies
in public housing projects.

Public housing demolition and disposition

The Committee bill amends the public housing demolition and
disposition requirements of section 18 of the 1937 Act to clarify
that PHAs must consult with the tenants or tenant councils of the
project or portion of a project covered by the demolition or
disposition application. The Committee has added this provision
to make clear the consultation requirement applies only to the
tenants of the subject project (or portion thereof) proposed for
demolition or disposition and not to all tenants occupying any
public housing owned by the PHA proposing the demolition or
disposition.

Public housing resident management

The Committee bill authorizes such sums as may be necessary for
FY 1993 for the public housing resident management program. This
authorization is a freestanding authorization and is not a
set-aside, as in previous years, out of the public housing
modernization program. The Committee does not believe that public
housing modernization funds should be siphoned off for such
public housing resident management initiatives. Rather, the
Committee believes that resident management should be separately
funded, as provided in the Committee bill. In authorizing such
sums for the program, the Committee fully expects that any
appropriation for the program will not exceed the $5 million
funding level which the program has received previously.

The Committee bill also requires HUD to develop and publish
indicators and procedures to assess and evaluate the management
performance of resident management corporations (RMC). The
Committee bill requires that such indicators and procedures be
based on those indicators and procedures established in existing
law for public housing authorities under section 6(j) of the 1937
Act. The Committee intends that, to the extent practicable, RMCs
should be evaluated on the same basis that PHAs including on such
factors as the number and percentage of vacancies, modernization
funds obligated, the percentage of vacancies, modernization funds
obligated, the percentage of rents uncollected, and the
timeliness of repairs and the turn-around of vacant units.

The Committee added this provision because of recent reports of
mismanagement by some RMCs. While the Committee believes that the
majority of RMCs, like the majority of public housing agencies,
are well run and managed, the Committee intends that when the
management of projects is turned over to such entities, the RMC
be accountable in the same manner as the PHA.

The Committee is also concerned about another problem concerning
RMCs, or any resident group: accountability to other tenants. The
usefulness of resident management lies in the connection between
management and tenants. When that connection is broken because
tenants feel the RMC is no longer accountable to them, the RMC
becomes in the tenant's eyes just another landlord and the
benefits of tenant management are lost. The Committee urges the
Department to ensure that any resident management group holds
regular meetings to solicit the views of residents and that there
is a selection process that allows for a change in the leadership
of the RMC when necessary.

Public housing family investment centers, public housing early
childhood development services, and public housing one-stop
perinatal services demonstration

The Committee bill contains the following authorizations for FY
1993 in order to assist families in public housing to achieve
better access to educational and employment opportunities, for
child care services, and to assist pregnant women in public
housing: $27.1 million for family investment centers, $21.7
million for early childhood development services, and such sums
as may be necessary for perinatal services.

National Commission on Distressed Public Housing

The Committee bill extends the National Commission on Distressed
Public Housing until September 30, 1992. The Committee is
currently reviewing the report recently released by the
Commission relating to distressed public housing. The Committee
believes that the extension of this Commission will assist it in
performing perfunctory housekeeping duties which are necessary to
terminate the Commission.

The Committee bill also requires that the General Accounting
Office (GAO) audit the funds received by the Commission through
the end of FY 1992. At that time, the Commission will have
received approximately $2.5 million, and the Committee is
interested in knowing how this money was spent.

National Commission on American Indian, Alaska Native, and Native
Hawaiian Housing

The Committee bill extends the National Commission on American
Indian, Alaska Native, and Native Hawaiian Housing through
October 1, 1993. The Committee currently is reviewing the
Commission's recently issued report, ``Building the Future: A
Blueprint for Change ``By Our Homes You Will Know Us'''' and
believes that the Commission needs some time to begin to develop
a strategy to follow up on the recommendations which are outlined
in the detailed report.

Public housing homeownership demonstration

The Committee bill establishes a 10-year public housing
homeownership demonstration for up to 20 percent of the total
number of public housing units administered by the Housing
Authority of Omaha, Nebraska. The Committee bill authorizes the
housing authority to establish criteria for the participation of
families based on factors that reasonably predict the
individual's ability to successfully complete the demonstration's
requirements including: (1) evidence of interest in
homeownership, (2) a steady, predictable income or employment,
and (3) the ability of adult family members to complete training
for long-term employment. The Committee bill also requires the
Housing Authority to ensure the availability of supportive
services to each participating family and requires HUD to submit
reports to Congress every two years and at the end of the
demonstration, which evaluate the effectiveness of the program.
Further, it is the intent of the Committee that the employees of
the Omaha Housing Authority and the family members of those
employees not be afforded special treatment as a result of this
program.

The Committee intends that this demonstration be limited to the
Omaha Housing Authority with the program requirements as set
forth in the Committee bill. The Committee is currently reviewing
all homeownership demonstrations and programs applying to public
housing, such as those programs which are already authorized in
existing law. These programs include the section 5(h) turnkey
homeownership program authorized under the 1937 Act, as well as
the HOPE I homeownership program. The Committee believes that
these existing public housing homeownership programs, as well as
the results of this homeownership demonstration program, must be
assessed to determine whether such approaches are viable
homeownership alternatives for public housing tenants and the
effect of such programs on the need for and supply of affordable
housing. With this in mind, the Committee authorizes this limited
demonstration program for the Omaha Housing Authority.

Sale of certain scattered-site housing

The Committee bill requires the Secretary to authorize the
Delaware State Housing Authority to sell scattered-site public
housing under section 5(h) of the 1937 Act and to use the
proceeds from such sale to replace the scattered-site units. The
bill also requires that the Secretary provide operating subsidies
for these replacement units. The Committee bill contains these
provisions because HUD apparently has decided that any
replacement units that are paid for with non-federal funds cannot
receive public housing operating subsidies. The Committee is
particularly troubled by this decision in light of HUD's prior
approval of the Housing Authority's homeownership program. The
Committee believes that HUD is interpreting the 1937 Act too
narrowly and in a way that will prevent innovative homeownership
programs.

                Subtitle C-Section 8 Assistance

Restatement and revision of section 8 Rental Assistance Program

The bill contains a complete restatement of section 8 of the 1937
Act. This section contains the authorization for the federal
rental assistance program.

The original section 8 program was enacted in 1974. As originally
conceived, the program provided for rental assistance for newly
constructed and substantially rehabilitated buildings and for
existing housing. This program developed from the Housing
Assistance Payments Program Demonstration. In 1983, the voucher
demonstration was begun.

Throughout the course of the program, as new housing programs
have developed, so have new uses for section 8 assistance, and
some uses have been discontinued. These changes were generally
incorporated into section 8 without rewriting the section;
consequently, the current section 8 is confusing to read and
difficult to understand. The Committee intends that, with the
exception of the changes discussed below, the restatement of
section 8 be just that; the restatement is intended in large part
to make section 8 easier to read and understand. Further, the
Committee intends that section 8 continue to apply to the range
of programs that it applied to prior to the restatement including
the section 8 new construction and substantial rehabilitation
programs.

The Committee bill makes one significant change in the section 8
program. The bill provides for a single tenant-based rental
assistance program to replace the existing section 8 certificate
and voucher programs. Under current law, the assistance contract
for the certificate and project-based section 8 programs is
required to establish a rent an owner is entitled to receive for
a unit. This rent cannot exceed by more than 10 percent the fair
market rent (FMR) for the area as established by the Secretary.
However, where circumstances warrant, the Secretary may approve a
rent that does not exceed 120 percent of the applicable fair
market rent. By law, the Secretary must revise fair market rents
annually. The amount of assistance provided by the certificate
program is the difference between the rent for a specific unit as
approved in the assistance contract and 30 percent of a tenant
family's adjusted income.

Under the voucher program, the PHA establishes a payment standard
based on fair market rents. The amount of the voucher assistance
is the difference between the payment standard and 30 percent of
the tenant family's adjusted income without regard for the actual
rent of the unit occupied by the tenant, except that there is a
requirement that such rent be reasonable and comparable to rents
in the area for similar units. There is no statutory requirement
that the payment standard be adjusted annually.

In response to testimony at reauthorization hearings held by the
Subcommittee on Housing and Community Development and concerns
voiced by providers of section 8 housing, the Committee
determined that the ideal tenant-based assistance program would
combine the best features of both vouchers and certificates in a
new merged program.

The new tenant-based rental assistance program would require that
the rent for an assisted unit not exceed the FMR as provided in
current law and would provide assistance equal to the difference
between the rent for the unit and 30 percent of the tenant's
income. The new tenant-based program would also provide that some
recipients of rental assistance are allowed to go above the
current 30 percent of income rent limit to 40 percent of income
for rent if the PHA determines that the additional rent
contributions are reasonable given the family circumstances.

The Committee is aware of the years of debate that have
surrounded the issue of whether section 8 housing assistance
should be run through two separate programs, vouchers and
certificates. While certificates protect the tenant from paying
an exorbitant percent of income for rent and assist the PHA by
allowing it to use actual rents, when calculating subsidies,
rather than a theoretical formula; vouchers provide greater
flexibility to tenants because the tenants can rent apartments
which exceed the FMR. Congress recognized the benefits this
flexibility can provide in NAHA when it amended the certification
program to allow some tenants to go above the 30 percent income
for rent limit.

The provision adopted by this Committee would maintain tenant
protections against excessive contributions of income for rent by
authorizing the establishment of fair market rents and maximum
monthly rents as under current law and requiring the annual
adjustment of such rents. However, to expand the universe of
housing options for tenants, the provision expressly creates an
exception whereby for up to 50 percent of the PHA's tenant-based
rental assistance, tenants can request to pay more than 30
percent of their income toward rent, and with PHA approval, can
pay up to 40 percent of adjusted income toward rent. The
Committee intends that this exception be used under limited
circumstances and primarily in situations where such increased
rental payments would allow a tenant to remain in place or move
to a location that provided better educational or employment
opportunities. In most cases, and especially in the case of large
families, the elderly, and the handicapped, the Committee intends
that the PHA use its authority to provide exception rents (rents
up to 110 percent of the FMR and up to 120 percent with HUD's
approval) before granting this exception.

The objective of the Committee is to reduce the paperwork burden
and confusion for renters, landlords, PHAs, and HUD. The merger
of the two programs should also simplify the accounting process
whereby HUD estimates contract renewal needs. Merger will
eliminate separate budgeting for each program and should
facilitate financial monitoring and oversight.

The Committee bill also includes in the rewrite of section 8
amendments to the portability provisions. The present portability
system, while pursuing a worthwhile goal, has been plagued with
administrative difficulties. An applicant receiving a certificate
or voucher, may move anywhere within a State or between any
contiguous standard metropolitan statistical areas. In addition,
some voucher holders may move anywhere in the country. Under the
current system, if an assisted family moves to another area the
agency that originated the assistance must continue that
assistance, but the agency administering section 8 assistance in
the new area must administer this assistance. Consequently, the
receiving agency must institute a procedure to bill the
originating PHA for the assistance which the family has just
taken to the area administered by the receiving agency. Often
there are delays of several months in transferring payments
between the agencies to the detriment of the receiving agency.

This system has also led to instances of waiting list shopping
where families that reside in areas with long waiting lists, shop
the waiting lists in surrounding areas. When they find a shorter
list, the family will place their name on the shorter list and
upon receiving assistance in this new area will use such
assistance in the jurisdiction where the family resides, without
ever living in the new area that supplies the assistance. This
waiting list shopping has resulted in some small agencies being
unable to assist local residents.

Another problem that has arisen from the provision of portable
assistance is the effect of the difference in fair market rents
between the originating area and the receiving area. In instances
where the fair market rent is higher in the receiving area, the
originating agency, which has to provide an amount of assistance
determined by the fair market rent in the area where the family
lives, loses more than one unit of assistance, further
undercutting the number of local families the originating agency
can serve.

The Committee has addressed the problems with portability in two
ways. First, the Committee bill allows a small agency to require
a person receiving tenant-based assistance to reside in the area
served by the agency 12 months before the assisted person can
move from such area and still take their tenant-based assistance
with them. In large agencies, those offering more than 300 units
of section 8 assistance, the agency could only limit portability
through a residency requirement for 90 percent of its units; the
other 10 percent would have to be fully portable. This residency
requirement is designed to reduce waiting list shopping.

The second major change made by the Committee in the portability
program is to create a national fund of section 8 assistance
equal to 5 percent of the annual amount appropriated for section
8. This reserve will be used to provide assistance to the
receiving agency to allow such agency to absorb assisted families
that move into the area served by the agency. Such agency would,
however, first be required to absorb such incoming families in an
amount equal to the lesser of 5 percent of its total section 8
allocation or 25 percent of its annual turnover in section 8
assistance. The purpose of this change is to reduce the paperwork
and administrative burden of billing between agencies for
portable section 8 assistance and to reduce the problems created
by the difference between fair market rents in different areas.

Another change made in the section 8 program in this restatement
is to add a provision to address the problem of landlords that do
not maintain units in accordance with section 8 housing quality
standards (HQS). The Committee is aware of disturbing incidents
where section 8 subsidies have been suspended or terminated
because of landlord failure to repair their apartments. In one
case, for example, tenants faced possible eviction because the
court held that section 8 landlords are obliged to comply with
federal housing quality standards. McNeill v. New York City
Housing Authority, 719 F. Supp. 233 (S.D.N.Y. 1989)
Non-compliance with HQS constituted grounds for the housing
authority to terminate section 8 subsidies for the landlords.
Fortunately, the court enjoined nine participating landlords who
breached this HQS obligation, and whose subsidies were terminated
by the local PHA, from evicting their section 8 tenants. Although
McNeill achieved partial relief for section 8 tenants in New York
City, thousands of tenants throughout the nation are faced with
the loss of housing subsidies due to their landlords' failure to
comply with HQS.

This situation where tenants may be faced with the loss of their
subsidies due to landlord noncompliance with HQS is an
intolerable occurrence which this Committee intends to stem with
this provision. This provision requires that section 8 contracts
between owners and the agency administering the section 8
assistance contain a provision allowing the agency to withhold
some or all of the section 8 assistance and use those amounts for
necessary repairs where a unit does not comply with HQS.

The Committee intends that agencies utilize these remedies to
withhold assistance and pay for necessary repairs whenever a
significant breach of the HQS occurs, which includes any
defective condition materially affecting the tenant's health and
safety. Agencies should abate payments promptly following their
being informed of these significant defects; but only after the
owner has been given a reasonable time to correct the conditions
and has failed to do so. While of course the tenant is not liable
for the full contract rent when the payments are abated by the
agency, and thus should never face eviction for nonpayment of the
contract rent in these circumstances, the Committee intends that
the agencies promptly elect one of the four approaches specified
in the bill within 30 days after abatement, sooner in situations
where the defective conditions pose an immediate threat to the
tenant's health and safety. In the rare event appropriate repairs
cannot be completed with the abated funds using one of the
specified alternatives, and termination of the contract becomes
necessary as a last resort, termination may not occur until the
tenant has been relocated to alternative housing meeting program
standards, and the PHA shall assist the tenant in locating and
securing such housing under the program.

If the owner makes the necessary repairs, the agency may release
any withheld amounts to the owner in an amount not exceeding the
cost of the repairs. Withheld amounts may also be released to the
tenant to reimburse the tenant for the reasonable cost of any
necessary repairs performed or paid for by the tenant upon
request of the tenant.

The Committee's intent in adopting these provisions is to prevent
the unnecessary homelessness of section 8 families and ensure
that families do not live under substandard conditions for an
extended period of time. The Committee is disturbed by
information that an agency may often terminate the section 8
contract with the intent of punishing the section 8 landlord. The
reality, however, is that the tenant suffers first from living in
substandard conditions, and then from facing eviction and
homelessness. The landlord, in contrast, often profits by
forgoing the collection of subsidy payments, evicting the tenant,
and rerenting to a new (non-section 8) tenant without having made
necessary repairs. The bad result is that the PHA's termination
of the contract rewards, rather than penalizes, the landlord.

The Committee in adopting this provision is also mindful of and
guided by the national interest in remedying the unsafe and
unsanitary housing conditions and the acute shortage of decent,
safe, and sanitary dwellings for families of lower income.
Without remedial legislation, the displacement of tenants without
repairs would exacerbate the shortage of housing and do nothing
to remedy unsafe conditions.

The Committee made another change by in the section 8 program
rewriting the preferences for section 8. The Committee has been
frustrated with HUD's failure to interpret the preference for
public housing residents adopted in NAHA correctly. The intent of
the provision was to allow public housing residents to obtain
section 8 tenant-based assistance to move out of public housing.
By giving public housing residents a federal preference for the
purposes of section 8 assistance, the Committee bill is intended
to ensure that public housing residents are treated as any other
federal preference holder. Agencies and owners administering the
preference should not rank holders of this public housing
preference lower than any other preference holder.

The Committee bill also clarifies section 262 of the 1987 Housing
Act to require owners to give section 8 existing housing tenants
90 days' notice when the owner terminates participation in the
program for reasons unrelated to the tenant's breach of the
lease. Although the provision is self-executing and effective
immediately, the Committee expects HUD to issue a notice to all
agencies within 30 days of enactment, requiring them to inform
owners submitting improper notices, and their tenants, of the
invalidity of those notices. In addition, the section 8 rewrite
includes amendments to section 8 to clarify when various
provisions apply to the tenant-based and project-based programs
and when the Secretary as opposed to the PHA is responsible for
project-based assistance.

Finally, the section 8 amendment expands on current law to allow
for the eviction of section 8 tenants for criminal activity that
affects residents living in the immediate vicinity of the
premises. It is the intent of the Committee that the term
``immediate vicinity of the premises'' be interpreted as the
substantial equivalent of ``on or near the premises''.
``Immediate vicinity of the premises'' should not be interpreted
so broadly as to lose a significant nexus between the housing
unit in question and the site of the criminal activity. Further,
the Committee does not intend that this provision provide the
basis for evicting tenants in publicly assisted housing for
non-criminal activities or to give residents living within the
area of the premises, or other affected parties (except for the
owner of the premises), a specific cause of action against the
tenant. The provision is intended solely to require the owner to
include in the lease with the tenant, in addition to the
provisions already required and allowed by the law, a stipulation
that criminal activity on the part of the tenant, or others
identified in the law, that affects the peaceful enjoyment of the
living environment of residents of the nearby vicinity, will be
grounds for eviction.

The Committee bill provides for a delayed effective date for the
section 8 rewrite and provides the Secretary with broad authority
to implement the section 8 rewrite. The Committee intends that
the changes to the section 8 program included in the rewrite be
implemented as assistance contracts are renewed or entered into;
no existing contract should be effected by the changes to the
section 8 program made in this bill. For instance, the Committee
intends that assistance which has been taken from one area to
another under the current portability rules be replaced as
provided in the portability changes made in the bill as such
assistance is renewed. The Committee provided the Secretary with
broad authority to implement the changes to section 8 contained
in this bill to ensure that no person currently receiving
assistance is denied assistance in the future as a result of the
changes contained in this bill.

The Committee, however, also intends that the delayed effective
date of the changes made in the section 8 rewrite and the
discretion given the Secretary to implement these changes does
not give the Secretary the authority to delay further the
implementation of duly enacted provisions that are in current
law. For example, as mentioned earlier the Secretary has failed
to implement to the provision in NAHA that allowed PHAs to use
section 8 assistance in units they own. In addition, the
Secretary has failed to implement many other recently enacted
section 8 changes. The Committee does not intend that the section
8 rewrite be used to further delay the implementation of
provisions enacted prior to this bill.

Nondiscrimination against section 8 assistance holders

This provision was inadvertently dropped from the conference
committee report on NAHA. This provision makes clear that parties
who control projects through partnerships, which is a fairly
common occurrence, cannot claim that they were not owners for
purposes of section 183(c) of the 1987 Housing Act.

Moving to opportunity for fair housing

The Committee bill contains in this section an Administration
proposed program called Moving to Opportunity for Fair Housing.
This program is designed to encourage and enable families to move
from areas of high concentration of poverty to areas of lower
concentration. This demonstration program is a continuation of a
demonstration program established in the FY 1992 HUD
Appropriations Act which in turn was adopted to replicate the
Gautreaux Demonstration in Chicago. Under the court-ordered
Gautreaux program, 4,500 African-American public housing families
have used section 8 certificates and housing counseling to move
to private housing, about half of it in predominantly white
suburban areas. The Committee is mindful that the court found
that HUD and the Chicago public housing authority had knowingly
and intentionally imposed segregation and discrimination upon the
African-American residents of public housing in Chicago and that
the Gautreaux mobility program was a remedy for that
unconstitutional conduct.

A study of the Gautreaux Demonstration indicates that when
very-low-income families move to areas without concentrations of
persons living in poverty, the families become more economically
independent through employment and the children of the families
do better in school and have more and wider opportunities for
post-secondary education. The effects are particularly pronounced
for children, who are much less likely to drop out of school,
much more likely to go to college, and much less likely to be
neither in school nor working.

To build upon the findings and initial success of the Gautreaux
Demonstration, the Committee has authorized the continuance of
the existing demonstration program and focused that program on
very low-income families residing in public housing in areas of
high concentrations of persons in poverty. The program authorized
by the bill will provide section 8 and housing counseling
assistance to such persons to enable them to move to areas with
low concentrations of persons in poverty. The Committee intends
that the rules established in this section govern the use of all
funds provided for this demonstration.

The Secretary is required to carry out this demonstration in five
cities having populations of over 350,000 and the City of Los
Angeles. The Committee is particularly interested in the results
of the Los Angeles City demonstration. Recently, one of the
largest civil disturbances in this century erupted in Los
Angeles. The violence tragically illustrated the effects of
long-term neglect and disinvestment in our minority communities.
Decades of discrimination, abandonment, urban flight and
joblessness has bred a dangerous social alienation that cannot go
unchecked.

It is the Committee's intent that the Notice of Funding
Availability for this demonstration program be issued on a timely
basis, particularly given the urgency of community needs in Los
Angeles. The Committee has been frustrated by the delayed
allocation of the Moving to Opportunity funds appropriated for
the current fiscal year.

                   Subtitle D-Other Programs

Public and assisted housing drug elimination

The Committee authorizes approximately $173.6 million for the
public and assisted housing drug elimination grant program which
was first established in the Anti-Drug Abuse Act of 1988 (P.L.
100-690). The Committee believes that this program will assist in
the removal of drugs and drug-activity in and around public
housing and assisted housing projects. The Committee notes that,
based on numerous hearings both in Washington and in the field,
drug activity does not necessarily emanate to any significant
extent from the residents of these assisted projects; rather
since the projects are often located in impacted areas with a
high rate of crime and drug usage, public and assisted projects
often get tainted by the neighborhood problems. The Committee
notes that this program has proven helpful in establishing
programs designed to reduce drug activities, such as organized
recreation activities, in and around projects.

The Committee notes that in many neighborhoods, non-federally
assisted PHA-owned housing projects which are similar in
character to public housing projects and may be located around
federally assisted projects can directly benefit from drug
elimination grant funded activities; however, under current law,
these projects cannot benefit from the program directly. The
Committee believes that in order to effectively deal with drug
elimination activity in the federally assisted projects, such
adjacent non-federally assisted PHA-owned projects must also be
eligible for drug elimination assistance. Consequently, the
Committee bill also authorizes the use of drug elimination grants
in housing owned by PHAs that is not federally assisted public
housing if such housing is located in a designated high intensity
drug trafficking area and the PHA demonstrates to HUD's
satisfaction that drug-related activity at such housing has a
detrimental effect on or near any public or other federally
assisted low-income housing.

Use of funds recaptured from refinancing State and local finance
projects

The Committee bill requires, subject to the availability of
amounts for this purpose, HUD to make available to state housing
finance agencies, local governments, or local housing agencies,
up to 50 percent of the amounts that are recaptured when these
entities refinance debt associated with federally assisted
affordable housing. This provision is very similar to the
provision originally included in the housing technical amendments
in the Stewart B. McKinney Homeless Assistance Amendments Act of
1988, except that the Committee makes the sharing of project
refinancing retroactive.

The 1988 amendments only allowed State housing finance agencies
to retain funds from the refinancing of their projects. The
Congress extended the sharing of recaptured funds from
refinancing to local housing agencies in P.L. 102-273; however,
the provisions apply only to projects for which settlement
occurred after January 1, 1992. The Committee bill makes the
sharing provision retroactive to allow the Secretary to share any
savings received from refinancing that occurred prior to the
enactment of this Act. The amount of such savings shall be
determined from the date of the original refinancing.

HOPE for Youth

The Committee bill includes a new program, HOPE for Youth, in an
effort to further the development of permanent and transitional
affordable housing for low-income families and the homeless and
the reconstruction of urban neighborhoods through the energies
and abilities of youth who have dropped out of high school or who
are at risk of dropping out of school. The Committee is aware
that there are approximately 4 million unemployed young people
who have little access to education and training that may be
useful to them in rebuilding their communities and their lives.

HOPE for Youth or ``Youthbuild'' is geared to attract young
people, ages 16 to 24 and provides academic and basic skills in
preparation for a high school equivalency diploma and
construction trades training. Under the program, the youth will
work for 50 percent of the hours of the program time and the
remaining 50 percent will be spent in the actual construction or
rehabilitation of affordable housing under the supervision of
trained and licensed construction workers. The Committee intends
that the program not be limited to young males, but include young
women who may be interested in such employment and training.

The Committee intends that, to the extent feasible, the program
be patterned after training and apprenticeship programs, such as
those sponsored by construction trade unions and in conjunction
with those offered by trade unions if available. Participants
will receive wages for work performed. At the end of the program,
the Committee believes, based on the experience of existing
Youthbuild Programs, that participants should be able to qualify
for construction jobs earning from $6 to $18 an hour.

The Committee is aware that this program was pioneered by the
Youth Action Program of the East Harlem Block Schools between
1978 and 1984 and that there are now 12 Youthbuild programs of
various sizes in operation in New York, Boston, Cleveland, San
Francisco, Tallahassee, Indianapolis, Milwaukee, St. Louis, and
Gadsen County, Florida.

The Committee bill provides funding for local community
development corporations, community-based organizations, and
community service corps based on the organization's track record
and community needs. Technical assistance would be provided, as
well as funding, for construction of affordable housing on a 90
percent-10 percent basis federal funds to non-federal funds.

The Committee further intends that owners not refuse to rent to
holders of section 8 tenant-based assistance solely because of
the status of the prospective tenant as a section 8 certificate
holder. Some of the Youthbuild units will not be affordable to
the poorest tenants in the absence of such a deep subsidy and the
Committee believes that the tenants who choose to utilize their
tenant-based assistance to live in Youthbuild developments should
not be prevented from doing so.

               Subtitle E-Homeownership Programs

HOPE I homeownership programs

The Committee authorizes for FY 1993 $100 million for HOPE I-HOPE
for Public and Indian Housing Homeownership; $100 million for
HOPE II-HOPE for Homeownership of Multifamily Units, and $200
million for HOPE III-HOPE for Homeownership of Single-Family
Homes. These amounts are less than those requested by the
Administration for three reasons: First, a majority of the
Committee believes that these programs are still experimental and
should not be expanded significantly unless they prove to be
viable sources of homeownership for low-income persons. To date
the Committee has no evidence that there has been any significant
interest in the programs beyond the capacity building and
technical assistance they provide. For instance, the Department
has failed to provide the Committee with hard data as to the
number and location of units that are involved in the ownership
phase of the HOPE I program. Second, the Committee believes that
in the case of HOPE I, the public housing component, the
expansion of this program without an equally large commitment to
public housing development will result in the loss of hard units
for the poorest in our nation at a time of dire need for such
housing. Third, there appear to be ample uncommitted funds
available from the past authorizations provided by the Congress
for these programs.

Grant selection for HOPE for public and indian housing.-The
Committee bill strikes the word ``appreciably'' from a
requirement that any application for HOPE I funding include an
analysis of whether units lost as a result of conversion to
homeownership will ``appreciably'' reduce rental housing
available to public housing residents or those eligible for
residency in public housing. The Committee intends to strengthen
a HOPE I applicant's responsibility for addressing in the
application the extent to which participation in the programs
will reduce rental housing.

Other HOPE provisions.-The Committee bill prohibits HUD from
approving a HOPE I sale application unless it provides for fair
market compensation to the PHA. The Committee has included this
provision in order to ensure that in enacting the HOPE I program
PHAs should receive just compensation for the units which are
proposed for sale under a HOPE I application as the Congress
intended. The Committee intends that such compensation to the
PHAs will, in turn, be used to provide additional affordable
housing to low-income families through the development of
additional public housing units.

The Committee bill also contains provisions amending the HOPE II
and III programs to allow mutual housing associations to
participate in the HOPE II program, to include in the HOPE II
program multifamily projects that are owned by PHAs but not
assisted by the federal government, and to provide a preference
in the HOPE III program for persons residing in public housing.

National homeownership trust demonstration

The Committee believes that the purchase of a home continues to
be beyond the reach of many working families as housing price
increases have outstripped the rise in real incomes. Even the
lower interest rates which the nation has recently been
experiencing are not making homeownership affordable for most of
these families. For these first-time homebuyers seeking to
achieve their dream of homeownership, the bill authorizes
approximately $542.2 million for FY 1993 in downpayment and
interest subsidies under the National Homeownership Trust.

The Committee is extremely concerned with the Department's
failure to request funds for and to implement this program. The
Secretary has, correctly, advocated for an expansion of
homeownership among first-time homebuyers. Further, the Secretary
has advocated tax incentives to aid these persons in the purchase
of their first home. The Committee believes that such
non-targeted assistance will not help many of those who are
priced just outside the market and may assist persons who would
be able to purchase a home without that assistance. The National
Association of Home Builders, in its recent testimony before the
Committee, stated that potential first-time homebuyers often
cannot buy a house because they lack the necessary downpayment.
The National Homeownership Trust could provide such
vitally-needed downpayment assistance and funds to cover
settlement costs. It is this latter type of assistance that is
necessary to ensure that those at the margins are able to
purchase a home. Consequently, the Committee bill requires the
implementation of this program in a timely manner.

The Committee bill also authorizes such sums as may be necessary
for the use of National Homeownership Trust funds with housing
financed with mortgage revenue bonds. The Committee believes that
this linkage of assistance will further assist first-time
homebuyers to achieve the dream of homeownership because it
directly links the Trust program assistance with a source of
permanent financing. The Committee bill authorizes the use of
Trust funds in connection with the existing mortgage revenue bond
program and is not intended to make any programmatic changes to
the existing MRB program.

Nehemiah housing opportunity grants

The Committee bill modifies the repayment provisions of the
Nehemiah Housing Opportunity Grant program for those Nehemiah
loans made to a family after July 1, 1990. The Committee bill
allows Nehemiah homeowners with such loans to recover their
downpayment and share in some of the equity appreciation of the
property.

The modification requires that remaining proceeds, upon the sale
or transfer of the property, be distributed as follows: 1) to
repay the first mortgage; and 2) to allow the seller to recover
the amount of any downpayment. Any remaining amounts are to be
shared equally between HUD and the seller until HUD has recovered
the amount of the Nehemiah loan. If the proceeds from the sale or
transfer are insufficient to reimburse HUD for the amount of the
loan, the second mortgage held by HUD would remain on the
property until the loan is paid in full.

The Committee believes that this provision will act as an
incentive to encourage the participation of homebuyers by
allowing them to recover their original downpayment. Under the
bill, if the property does not appreciate in value sufficiently
to cover the downpayment and the Nehemiah loan, the nonprofit
would be able to provide an incentive to the homeowner by
allowing them, if any proceeds from the sale remain after the
original mortgage is paid, to recover their original downpayment
before the Nehemiah loan is repaid.

Assistance under section 8 for homeownership

The Committee notes that existing law allows section 8 holders to
use assistance in cooperatives or mutual housing. The Committee
bill expands on this use of section 8 vouchers to permit eligible
section 8 recipients to use their assistance for homeownership.

The Committee bill allows families receiving tenant-based section
8 assistance to use their assistance to purchase a home and to
make their mortgage payments. The Committee bill limits this
program to up to 10,000 recipients at any one time participating
in the program. To participate, a section 8 family must (1) be a
first-time homeowner; (2) participate in the family
self-sufficiency program or have sufficient income; (3) have an
adequate employment history; and (4) participate in homeownership
counseling. The Committee bill requires that such families
provide at least 80 percent of their downpayment from their own
resources. The remaining 20 percent can come from nonprofits or
State or local government programs. The Committee bill also
authorizes FHA to insure such loans and because of the higher
default rate predicted such loans shall be obligations under the
General Insurance Fund not the Mutual Mortgage Insurance Fund.

Indian housing program

The Committee bill makes several changes to the Indian housing
program to improve its effectiveness and to foster increased
housing production.

Exclusions from income.-The Committee is aware that residents of
Indian public housing generally travel long distances for work or
for education because of the often remote locations of Indian
trust lands; Indians may also have child care expenses due in
part to this extended travel time. Current law provides that in
the case of residents of Indian housing, in determining adjusted
income, either child care expenses or excessive $25 of travel
expenses, not to exceed $25, would be excluded from an Indian
family's income. The Committee bill provides that both child care
expenses and travel expenses, not to exceed $25, necessary for
employment or education, may be excluded in order to determine
adjusted income for purposes of determining rent.

Indian housing childhood development services.-The Committee is
aware that the early childhood development services program is
not easily implemented on Indian reservations because of the
requirement that the program be operated by nonprofit
organizations. On many reservations, either the tribe or the
housing authority has most often provided child care and early
childhood education services, like HEAD Start. Few capable
nonprofit organizations such as those found in urban and suburban
settings are available in or near tribal lands. To make this
critically needed program work on Indian reservations, the
Committee expanded the definition of eligible grant recipients to
include Indian housing authorities and Indian tribes. The
Committee also authorized for appropriation $10 million for such
services.

Applicability of definitions to Indian housing.-In NAHA, the
Congress enacted provisions which changed the term ``lower'' to
``low'' income; expanded the definition of family to include
single persons; raised the dependent allowance to $550 from $480;
added limited allowances for medical and attendant care expenses,
earned income and child support or alimony payments; and counted
any child placed in foster care in determining family composition
and size. However, the Indian housing programs inadvertently were
not included in those changes. The Committee bill, therefore,
applies those same changes to the Indian housing program and
makes them effective as of the date of enactment of NAHA.

Exemption of Indian housing program from new construction
limitation.-The Committee is aware that under the public housing
development program, any new construction has to be justified as
less costly than acquisition or rehabilitation in the same
neighborhood before the Secretary can approve new construction.
The lack of housing stock that could be rehabilitated or acquired
on tribal lands precludes any such justification; nor are there
neighborhoods from which to draw the comparisons. The provision
simply has little relevance to Indian housing authorities and
instead impedes proposals for new construction. Therefore, the
Committee bill exempts the Indian housing program from this
requirement.

Loan guarantees for Indian housing.-The Committee is aware that
opportunities for homeownership are severely limited in Indian
country. Because of the unique status of trust lands which are
not freely alienable; because of the remoteness of much tribal
land; because of the perceived risk; and because of the poverty
and irregular incomes of Native Americans, most lenders shy away
from loans on trust lands. The Committee is concerned that
although section 248 of the National Housing Act, a FHA mortgage
insurance program for Indian housing, has been on the books since
1983 and available since 1986, only 5 loans have been made
nationwide. The recent report issued by the National Commission
on American Indian, Alaska Native and Native Hawaiian Housing
finds that little or no conventional lending is available to
Native Americans for housing despite desperate housing needs.

The Committee believes that the need for a targeted affordable
housing finance program is overwhelming. Therefore, the Committee
bill establishes a new single family loan guarantee program for
Indian families and Indian housing authorities in addition to
those already in law. The program provides the authority for the
Secretary to guarantee 100 percent of the unpaid principal and
interest due on loans made to eligible borrowers to purchase,
construct, or rehabilitate 1- to 4-family dwellings on trust land
or land located in an Indian or Alaska Native area. Approved
lenders include those approved by the Secretaries of HUD and
Agriculture or supervised, regulated, or insured by the federal
government or the Federal National Mortgage Association.

Loans are required to be for a term not to exceed 30 years, to
bear interest rates that the Secretary determines are reasonable
and comparable to those generally charged, and have a principal
obligation not exceeding the sum of 97 percent of the first
$25,000 of appraised value and 95 percent of the remaining
appraised value. The guarantee fee is 1 percent. Modelled after
the FmHA section 502 guaranteed loan program, the Indian
guaranteed loan program includes provisions for payments in the
event of defaults and protects against the alienation of trust
lands. The program requires that the housing meet specified
housing quality standards with regard to safety, soundness, and
general construction including specified heating, plumbing,
electric, energy performance, and square footage.

The Committee bill requires that HUD establish a new Indian
Housing Loan Guarantee Fund that is separate from the FHA mutual
mortgage insurance fund or the general insurance fund. The
Committee is aware that lending on Indian reservations will
require some unique approaches and underwriting which will not
fit standard FHA criteria and that traditional lending practices
and credit determinations may be inapplicable to loans on
reservations and trust lands. However, the Committee does not
believe that such differences make this federal loan guarantee
program too risky when weighed against the public policy need to
provide financing for Native Americans. The Committee intends
that this loan guarantee program provides Native American
families the same opportunity as is available to other citizens.

             TITLE II-HOME INVESTMENT PARTNERSHIPS

Title II reauthorizes the HOME Investments Partnerships program
for FY 1993 (HOME) and authorizes for appropriation $2.169
billion. Of that amount, $14 million is authorized for the
Housing Education and Organizational Support grants of the
Community Housing Partnerships program for community housing
development organizations (CHDO) and $11 million is authorized
for other state and local housing strategies for local and state
governments to develop alternative housing finance and
development arrangements.

Title II also makes a number of important changes to the HOME
program which the Committee recognizes are critical to the
efficient and effective implementation of the HOME program. The
HOME program funds have only recently been allocated to
participating jurisdictions, even though it was widely
anticipated that the HOME program was to be one of the primary
housing strategies of states and localities across the country.
While the Committee is aware that the funding delay is the result
in part of the vagaries of the appropriation process and the
normal startup process for a new program, the Committee is deeply
concerned that much of the delay is the result of needless
complexities and HUD's restrictive interpretation of the
statutory language.

The Committee intends that the HOME program be implemented as a
flexible tool of state and local governments to expand the supply
of affordable housing within the broad parameters of the program.
The Committee does not intend that every action and every
activity be approved and minutely managed by the Department of
Housing and Urban Development. Such ``over regulation'' inhibits
housing development at a time when affordable housing needs far
outstrip the availability of such housing.

The Joint Center for Housing Studies of Harvard University in
their report ``The State of the Nation's Housing 1991'' indicates
that ``the growing inequality in the income distribution-both
within and across different types of households-will continue to
raise the share of households unable to purchase homes or afford
even minimally adequate shelter.'' Further, the report indicates
that high costs of homeownership will limit first time
homebuyers' entry to the market and that unless there are
expanded and targeted housing subsidies, any increase in
multifamily rental housing production ``will do little to
alleviate the housing burdens of the nation's poor.''

The realities of the housing markets lead the Committee to
recognize that provisions in the HOME program must be modified to
encourage rather than discourage the expansion of the supply of
affordable housing to meet the needs that have been identified by
participating jurisdictions in the Comprehensive Housing
Affordability Strategies (CHAS).

Elimination of restrictions on new construction

The bill eliminates the restrictions on new construction under
the HOME program. While the preference for rehabilitation is
maintained, the Committee is aware that the participating
jurisdictions are in a better position to determine their
affordable housing needs through the development of the CHAS than
are the Congress and HUD through the new construction formula and
its specific exceptions for neighborhood revitalization areas and
special needs housing in current law.

The Committee recognizes that a formula allocation can never
determine which jurisdictions need new construction as accurately
as an individual jurisdiction can. The fact that for fiscal year
1992 HUD's formula designated only 32 percent of participating
jurisdictions, geographically concentrated along the coasts with
a few major cities in between, as eligible for new construction
highlights the weakness of such an approach. Virtually no rural
areas were included and 90 percent of the new construction set
aside was concentrated in six states.

According to the Center on Budget and Policy Priorities' report,
``A Place to Call Home,'' every region of the country is
experiencing a shortage of affordable housing and households
comprised of persons and families in poverty are more likely to
live in housing that is substandard or overcrowded than are non
poor households. The report also finds that poor families in
rural areas and in the South are more likely to live in
substandard housing while poor families in the urban areas and
the West live in overcrowded housing conditions. Although some
housing that would be affordable to low income families can be
rehabilitated, much is in such disrepair that to rehabilitate the
housing would be ``throwing good money after bad,'' particularly
in rural areas. The limitation on new construction places an
extraordinary burden on rural areas where demand for new housing,
both homeownership and rental, is overwhelming.

The most recent American Housing Survey reports that between 1983
and 1989 the number of low income renters increased while the
number of affordable housing units decreased, leaving 4.1 million
low income households seeking safe and affordable rental housing.
Since 1970, the gulf between low income families and available
housing units and assistance has widened. The report, ``A Place
to Call Home,'' places approximately 1.5 million households on
waiting lists for public and assisted housing and jurisdiction
after jurisdiction has had to close their waiting lists.
Households wait anywhere from three months in a few ``soft''
markets to twenty years in New York City for housing assistance.

The Committee is aware that the Department is concerned that
participating jurisdiction might choose to build new housing
rather than provide housing assistance through rehabilitation or
tenant-based assistance in the absence of the limitations on new
construction currently in law. However, the Committee recognizes
that states and localities which choose to become participating
jurisdictions under the HOME program are required to engage in
lengthy and detailed analyses, including public hearings, to
determine affordable housing needs identified in their CHAS. This
process insures that a jurisdiction's choice of housing options
will accurately reflect real need. The Committee does not feel
that it is necessary to constrain arbitrarily local choices.

The Committee intends that the HOME program be equally available
and useful to all participating communities depending on the
needs expressed in the CHAS and not on the limitations imposed by
law and therefore the Committee removed the limitations on new
construction.

Use of tenant-based rental assistance amounts for security
deposits

The Committee bill provides that loans or grants to low- and very
low-income families for security deposits are eligible as tenant
based rental assistance, even if such assistance is not used in
conjunction with a HOME funded rental assistance program.
Families could receive security deposit assistance, rental
assistance, or both under this provision and are not required to
have applied for section 8 assistance or to have received federal
preference for assistance.

Currently under HOME only certain broad categories of activities
are specifically listed as eligible uses of HOME funds. However,
the Committee is aware that HUD has interpreted the list of
activities as all inclusive and, in interpretative guidelines,
has provided Community Housing Development Organizations (CHDO)
from providing security deposits from HOME funds for formerly
homeless persons who are moving into permanent housing unless the
HOME project provides rental assistance as well.

Further, the Committee is aware that there are a number of other
activities that HUD has prohibited because of their very narrow
interpretation of the plain language of the statute, including
single family owner occupied rehabilitation under the auspices or
sponsorship of a CHDO program. The CHDO should not be required to
have an ownership interest in a property in order to provide
funds. In the case of a single family rehabilitation program, as
a sponsor, the CHDO should be required to identify the properties
and to design the criteria for such assistance, in the same way
as a CDBG agency designs and implements a rehabilitation program.
The Committee intends that HOME be a flexible tool for states and
localities for designing appropriate housing programs and
strategies.

McKinney Act activities for homeless persons as eligible use of
investment

The Committee bill amends the HOME program to allow HOME program
funds to be used to carry out McKinney homeless activities
pursuant to McKinney homeless program regulations. The Committee
intends to provide through this provision flexibility to those
communities which have identified within their CHAS the need to
address homelessness and to give such communities the ability to
use the HUD McKinney homeless program requirements under the HOME
program regulations.

Per unit cost limits

The Committee bill establishes a per unit cost limit equal to the
section 221(d)(3) cost limits, as adjusted annually, for rental
housing assisted under the HOME program. It further provides for
adjustments up to 140 percent of the per unit limit where costs
exceed the national average of construction costs. The bill also
disapproves the regulations published at 92.250 of Title 24 CFR
in the Federal Register of December 16, 1991 (56 Fed. Reg. 65353)
which established different per unit cost limits. The regulation
limited per units costs to 67 percent of the section 221(d)(3)
limits and required a dollar for dollar reduction of subsidy
where HOME funds were combined with low income housing tax
credits. The Committee never intended such limitation and
reduction in subsidy.

The Committee believes that HUD's approach to fulfilling the
statutory requirement for cost limits is particularly restrictive
in high cost areas and has rendered some projects infeasible. In
theory the combination of the HOME subsidy, the required match
and tax credit proceeds per unit would equal total development
costs in every participating jurisdiction. However, in practice,
wide gaps remain.

As an example, in San Francisco, using HUD's construct in current
regulation, for a substantial rehabilitation project of two
bedroom units, the cash required to complete each unit is more
than five times the match that would be required. For a
hypothetical $100,000 unit, if HOME funds were $12,856 as would
be required under HUD's current regulation, tax credit equity
would be $45,000, $20,000 would be first mortgage debt, and an
additional $22,144 would be required, of which only $4,242 would
have been required as match.

In New York, the per unit cost limit formula raises additional
questions. Typically, all FHA project cost limits are raised 100
percent above the cost limit, with an additional discretionary
increase up to 140 percent of the cost limits. Even that increase
may not be sufficient for non luxury apartments in New York.
However, under the HOME program, HUD has indicated that no
discretionary increase will be granted. This provision
establishing specific cost limits with automatic increases and
overturning the regulations imposed by HUD will clarify the
Committee's intent that HUD set realistic cost limits for
workable projects.

Administrative costs as eligible use of investment

The Committee bill provides that up to 10 percent of HOME funds
can be used for administrative purposes by participating
jurisdictions and eliminates the provision in existing law that
allowed jurisdictions to recognize 7 percent of any CDBG funds
contributed for administrative costs as eligible match. The
Committee is keenly aware that the HOME program places
extraordinary administrative burdens on participating
jurisdictions first to develop the CHAS and then to administer
and monitor HOME funds and projects day to day, particularly as
revenues decrease and demands for services increase.

Althouth may participating jurisdictions have allocated CDBG
funds to prepare the CHAS, jurisdictions are pushing up against
their administrative cap in the CDBG program and many still will
require additional funds to administer the HOME program in
addition to the 10 percent that will be available under this
provision. The Committee recognizes that participating
jurisdictions may continue to allocate CDBG funds to the HOME
program when necessary even though such expenditures will not be
counted as match. The Committee expects that participating
jurisdictions may allocate administrative monies to CHDOs from
the jurisdictions' administrative monies if requested, so that
the CHDO set-aside funds can be used for direct housing costs in
the main.

Qualification as affordable rental housing

The Committee recognizes that the definition of qualified rental
housing under the HOME program conflicts with the definition of
affordable rental housing using the low income housing tax
credit. The variances as to income eligibility and rent increases
preclude the combination of HOME assistance and the low income
housing tax credit. It was the intent of the Congress when the
HOME program was enacted that the two programs work together. The
Committee is concerned that although tax credit projects may be
feasible without HOME subsidies, it is less likely that HOME
rental projects will be feasible without equity funds contributed
by the tax credit proceeds. The Committee intended that the HOME
funds would be provided to fill gaps in financing packages and
that in many cases would be the glue that made a subsidized
rental project hold together. To ensure that the two forms of
assistance work together, the Committee bill provides that
housing assisted by the low income housing tax credit and
conforming to the requirements of the tax credit shall qualify as
affordable rental housing under the HOME program.

The Committee also is aware that there is a conflict between rent
rules under the HOME program and certain state and local laws,
including rent stabilization laws. In New York City, under the
HOME program, in certain circumstances, very low income residents
could be required to pay rents that are higher than those that
would be required under New York's rent control law. The
Committee bill makes an exception to the rent rules for state and
local laws, requiring families to pay the lesser of the rents
under the HOME program and those required under state or local
law.

The Committee bill further provides that qualified rental housing
can be defined as housing located in certain census tracts which
have not more than one third of the units occupied by families at
median income paying rents not exceeding 30 percent of the
adjusted income of a family earning 80 percent of median income.
To balance the one-third of median income families in any one
project and to assure mixed income projects, each project
qualifying under this provision must have not less than 10
percent of the project's families earning only 35 percent of
median income of less.

This definition of qualified rental housing will ensure that
mixed income projects can be built under the HOME program.

Resale of homeownership housing

The Committee bill revises the resale provisions related to
single family homeownership housing under the HOME program. The
Committee is concerned that the resale provisions, which restrict
subsequent purchases of HOME assisted single family homes, and
HUD's requirement of deed restrictions, will inhibit any use of
HOME funds for homeownership. Few lenders, including state
housing finance agencies, will agree to a mortgage with a deed
restriction which restricts future purchasers to first time
homebuyers who are low income.

The Committee is also concerned that such limitations will erode
the benefits traditionally associated with homeownership,
including equity appreciation. Homeowners not assisted under HOME
can sell their homes for as much as the market will bear and to
whichever buyer they choose, regardless of the financing or
subsidy. The Committee intends that homeowners assisted under the
HOME program receive the same benefits.

The Committee recognizes, however, that the HOME funds should
remain available for HOME related purposes. Therefore, the
Committee bill requires a lien to be placed on any homeownership
property assisted under HOME equal to the amount of HOME funds
attributable to the property. Upon sale, the lien will be
satisfied from the net proceeds of the sale, if any, and returned
to the participating jurisdiction for future HOME projects.

Matching requirements

The Committee bill establishes a flat matching requirement of 10
percent of the total funds drawn from the participating
jurisdiction's HOME Investment Trust Funds in any one fiscal
year; provides that publicly issued or borrowed debt and sweat
equity are eligible as match; and provides for a non
discretionary waiver based on objective criteria of match
requirements for particularly distressed jurisdictions.

The Committee has been concerned about the matching requirements
since the enactment of the HOME program and the publication of
the proposed regulations. Although HOME was intended to be
flexible, HUD's interpretation of match requirements in
regulation has instead placed rigid rules on participating
jurisdictions which neither reflect the original intent of
Congress, the jurisdiction's housing needs, the realities of
housing development, nor the realities of today's economy.

Establishing a flat match of ten percent addresses the
Committee's concern that the three tiered match of 25 percent, 33
percent and 50 percent, depending on the activity, clearly
disadvantages any jurisdiction which has new legitimate new
construction needs as defined in the CHAS. The Committee is aware
that at issue is what constitutes the appropriate level of match
to achieve a partnership between the federal government and
participating jurisdictions and whether the federal government
should favor one activity over another by setting differing match
levels, notwithstanding the housing needs expressed by
jurisdictions in their CHAS.

The Committee is concerned that requiring a match any higher than
10 percent would preclude many jurisdictions from participating
in the HOME program as they continue to struggle to meet even the
most routine and basic costs with ever shrinking revenues as
compared to increased demands. And requiring a tiered match which
favors tenant-based assistance over substantial rehabilitation
and new construction does little to encourage the expansion of
the supply of affordable housing in our communities which is the
intent of the HOME program as enacted.

The Committee also is concerned about the definition of eligible
match. The Committee is aware that under the current HOME
regulations, HUD has excluded, from its definition of eligible
match, any debt financing unless it is repaid to the HOME fund or
is backed by the full faith and credit of the jurisdiction for
HOME purposes. The regulations also exclude donated materials and
sweat equity. This effectively restricts jurisdictions with
active housing finance agencies, including state housing finance
agencies, from using their financing for affordable housing as
eligible match and precludes self help housing programs from
participation even though self help programs are considered model
programs.

The Committee bill provides that donated materials and sweat
equity and 100 percent of public debt financing that is provided
to HOME affordable housing regardless of source of repayment are
eligible as match. This will enable jurisdictions and their
housing development financing agencies to count as match in HOME
projects the debt borrowed or issued for HOME projects. The
Committee finds no justification in the argument that debt
financing issued or borrowed by a state, locality or their
instrumentalities including housing finance agencies, does not
represent a true match or commitment to affordable housing,
whatever the level.

Although the debt is retired by rental payments or mortgage
payments which are used to pay off bond holders and although the
repayments are not permanently contributed to the HOME fund,
these contributions are no less a match than cash, land,
improvements, or foregone taxes. The entities which borrow or
issue debt for affordable housing were created in many cases
years ago for the express purpose of financing affordable
housing.

State housing finance agencies (HFAs) are state chartered,
quasi-public institutions that act as instrumentalities of the
state with the implicit backing of the state government even
though the state is not directly liable to repay HFA borrowings.
The Committee intends that the definition of HFAs be broadly
interpreted to include agencies which are separate from state
governments governed by their own boards of directors; those that
are part of other state agencies, and those that issue debt on
behalf of the state such as the Nebraska Investment Finance
Authority.

The Committee is acutely aware of the fiscal distress gripping
our nation's states and localities. The Committee held field
hearings in San Antonio, Texas; Washington, D.C.; Bridgeport,
Connecticut; Baltimore, Maryland; Spartanburg, South Carolina;
Cleveland, Ohio; Los Angeles, California; and Milwaukee,
Wisconsin, and in each location local officials, city employees,
economists, and residents painted a picture in excruciating
detail about economic decline, fiscal distress, and insufficient
revenues to meet the every day obligations of people and
governments. Representatives of the League of Cities, the U.S.
Conference of Mayors, the National Governors Association, the
National Association of Counties, the National Council of State
Housing Agencies and the National Community Development
Association confirmed the portrait.

The deep and persistent recession has profoundly eroded state and
local fiscal capacity. The Appropriations Committee acknowledged
that fact when it waived all match requirements for participating
jurisdictions for FY 1992. Many who testified before the
Committee this year requested a waiver of match for FY 1993 or at
least until economic recovery takes hold.

While the law currently provides for a waiver of match
requirements at the Secretary's discretion, the Committee bill
provides for a non discretionary waiver of all match requirements
for participating jurisdictions that are not States, based on
objective economic criteria including unemployment greater than
150 percent of the national average; growth in the labor force
which is less than 75 percent of the nation's growth; a ratio of
tax revenue collected per capita in a jurisdiction and per capita
income which is equal to or greater than 150 percent of the
average of the same ratio for all participating jurisdictions;
poverty rate which is equal to or greater than 125 percent of the
national average; and average per capita income less than 75
percent of the average national per capita income.

Although States have raised taxes by $25 billion and cut spending
by $10.2 billion over the last two years, the Committee
recognizes that States have much greater capacity to provide
matching funds than do local communities from a variety of
sources not available to local communities, including taxes and
mortgage revenue bonds. States also have not evidenced quite the
same distress overall as have the cities; therefore the Committee
excluded States from the non discretionary waiver provisions.

The Committee intends that HUD waive the match requirement for a
participating jurisdiction requesting such a waiver if the
jurisdiction certifies that it meet three of the five criteria. A
waiver would be automatic for a jurisdiction making such a
certification. However, in the case of jurisdictions with poverty
rates which are 150 percent of the national average or with per
capita incomes which are only 50 percent of the national average,
the match automatically would be waived without regard to the
other five criteria. The Committee expects that participating
jurisdictions would request such waivers yearly, at the time that
either the CHAS is updated or at the time that a jurisdiction
submits to HUD its program description, which is required 45 days
after formula allocations are published.

The data sources for the five criteria are generally accepted and
readily available data sources for all participating
jurisdictions, from the Census, and the Bureau of Labor
statistics, among others. The Committee believes that these
criteria will provide an accurate measure of a jurisdiction's
fiscal distress and its inability to meet the match requirements
imposed by the HOME program. However, the Committee anticipates
that with the reduced match requirements and the broadened
definition of match provided in this bill, such waiver requests
will be few and far between. The Committee still intends that the
HOME program represent a partnership between the federal
government and participating jurisdictions; however, should match
waivers be necessary, they should be automatic. This match waiver
procedure will provide predictability and simplicity.

Assistance for insular areas

The Committee bill provides for a set-aside of HOME funds equal
to .2 percent of appropriated funds or $750,000, whichever is
greater, for the insular areas of four U.S. Territories,
including Guam, the Virgin Islands, American Samoa, and the
Northern Mariannas. Although the territories were defined as
participating jurisdictions, the combination of the formula
criteria, the minimum allocation requirement, and the level of
appropriations for Fiscal Year 1992 precluded any allocation to
the Territories. The Committee is aware that last year, at the
end of the first session, the Congress passed a bill under
suspension of the rules to provide HOME funds to the insular
areas. However, the bill that was enacted established a
cumbersome system for allocation of funds, requiring HUD to
develop a special formula for the insular areas. The Committee
bill is intended to provide predictable funding under a set-aside
of funds, like that which is available to Indian tribes, rather
than relying on a formula which may or may not guarantee HOME
funds to the four Territories which have a critical shortage of
affordable housing.

Community housing development organizations

The Committee recognizes that there are several roadblocks to
successful implementation of the Community Housing Partnerships
subtitle under the HOME program. First, the Committee is aware
that the definition of a community housing development
organization (CHDO) in the HOME regulations may restrict
participation in the nonprofit set-aside to a very few nonprofits
that are not largely representative of non profits active in
housing across the country. The regulations require that to meet
the test of significant representation, CHDOs must have at least
one third of their board membership comprised by residents of the
impacted neighborhood, low income families, or elected
representatives of the neighborhood. The Committee is aware that
this particular type of nonprofit can often be found in larger
urban settings, such as Boston, San Francisco, Los Angeles, or
New York, and in communities where national nonprofit
intermediaries operate, but not in many of the communities which
are participating jurisdictions or in States and the rural areas.

The Committee is concerned that many nonprofits which would
request set-aside funds, but for the restrictive definition, have
long and impressive track records in providing affordable
housing. If the numerical standard is designed to measure
accountability, it can be argued that most of these nonprofits
are indeed already accountable to the communities in which they
operate and do not need to recreate their boards, charters, or
501(c) status, in order to maintain their accountability to the
community. The Committee is concerned that the rigid criteria are
particularly inappropriate in rural, multi-county settings where
the regulations require representation from each county served.

Although the Committee intends that the CHDO set-aside funds be
provided to organizations which are accountable to their low
income constituencies, the Committee recognizes that a numerical
or percentage requirement for board membership is only one
criteria to measure accountability. The nonprofit's track record
and experience, evaluations by community residents, and history
of service to the community are just as valid indicators of
accountability to the low income community as board membership.
Therefore the Committee bill prohibits the Secretary from
limiting compliance with the definition of CHDO to a single
criterion based on the number or percentage of low income board
members and from requiring board membership from each county
served in the case of multi-county CHDOs.

The second roadblock to implementation is the fact that in many
participating jurisdictions there are very few, if any, CHDOs or
nonprofits which would be eligible to receive funds under the
set-aside, even under an expanded definition of accountability.
The Committee is concerned that funds not allocated to nonprofits
could be lost to those jurisdictions.

The Committee believes that if CHDOs are to become active
participants in the HOME program as is the intent of the CHDO set
aside, there needs to be a source of technical assistance and
capacity building funding for the creation of CHDOs. The
Committee bill provides that up to 5 percent of a jurisdiction's
HOME funds (one third of the CHDO set-aside) can be used for
technical assistance and capacity building to establish CHDOs. In
the event that CHDOs are established, the jurisdiction can retain
any unused CHDO set-aside funds for an additional 18 months for
CHDOs that were created to invest in affordable housing. In the
event that no CHDOs are established the remaining CHDO set-aside
of funds will be reallocated within the original 18 month time
frame.

Housing education and organizational support grants

The Committee bill expand the eligible entities and activities
for education and organizational support grants to include
community land trusts and organizations which support women in
homebuilding. The grants are intended to support CHDOs which
encourage new investments and strategies for the development of
affordable housing.

The Committee is aware that community land trusts provide a
promising alternative for providing affordable housing by
assembling land for the common good of a community and making it
available via a long term land lease for the construction of
affordable housing. Typically, the housing built on trust land
remains affordable as long as the trust exists as a result of a
limited appreciation resale mechanism.

The land trust model, initiated in rural Leesburg, Georgia in
1968, is now established in urban and rural areas of more than 20
states in every region of the country from California, to
Minnesota, to Appalachia, to New England. Vermont, alone, has 23
land trusts, including the statewide Vermont Land Trust and the
award winning Burlington Community Land Trust. The Institute for
Community Economics reports more than 50 requests for information
about community land trusts monthly from public officials and
private citizens interested in the concept as a means to provide
affordable housing.

What is missing are the resources to develop the concept further
and to capitalize the formation of community land trusts through
the acquisition of land. The Committee bill provides a set-aside
of at least 10 percent of the funds allocated to housing
education and support grants to be used by CHDOs and fledgling
community land trusts for start up costs and the preparation of
fund raising and capital formation plans to establish community
land trusts.

The grants for women in homebuilding will be used to provide
support for CHDOs which provide technical assistance and training
to contractors and construction firms to hire women in the
construction trades. The training will include both recruiting
and hiring of women in the non-traditional construction trades
and construction skills training. The Committee is aware of the
vast untapped resource among women interested in the construction
trades who may be available, if trained, to build affordable
housing. Further, it is aware of a number of organizations
including Barn Raisers, Inc. of Albany, New York; Hudson Housing
Services Corporation of Hudson, New York; Hard Hatted women of
Cleveland, Ohio; and the Toledo Old Towne Community Organization
and Unions and Neighbors Improving Ohio's Neighborhoods in
Toledo, Ohio; that could serve as models for programs or would be
eligible for funding under this new provision.

Land banks

The Committee is aware that in many participating jurisdictions,
particularly in the older and larger cities, the number of
neglected, abandoned homes and parcels, many which are tax
delinquent or subject to tax foreclosure sales, has skyrocketed.
These properties and parcels represent an opportunity for
jurisdictions to develop housing strategies to eliminate blight,
rebuild neighborhoods, and expand the supply of affordable
housing, as well as return revenues to the jurisdictions'
treasuries. One such strategy is the development of land bank
which takes title to vacant and abandoned homes and lots and
assembles usable parcels for redevelopment as affordable housing.

The Committee is aware of one such urban land bank that was
established in Cuyahoga County, Ohio which includes the city of
Cleveland. Since 1987 the city/county land bank has initiated 41
projects on multi-parcel sites that were assembled by the land
bank. The existing sites will accommodate some 1500 housing units
and place millions of dollars on the real estate tax rolls. The
development will also serve as a cornerstone of the
revitalization of some key downtown neighborhoods. The Committee
bill adds the development of land trusts as an eligible activity
under the other state and local housing strategies technical
assistance provision so that the model developed in Cleveland can
be duplicated elsewhere. The bill further provides that up to 5
percent of the funds appropriated for the technical assistance
grants to state and local governments shall be used as start up
funds for jurisdictions interested in establishing land banks.
Such grant funds can be used among other activities to determine
how to set up a land bank, to review the problems of tax
delinquencies, to plan for assembling properties and subsequent
projects, and to determine how to streamline foreclosure
procedures.

Eligibility of assistance and contents of strategies

The Committee is concerned that the CHAS document required by
participating jurisdictions under HOME lacks the means to define
clearly the jurisdiction's housing needs and goals with respect
to the homeless, displacement of residents, and efforts to reduce
poverty. Although the CHAS is to address homelessness, the
Committee is award that no tabular information and data is now
required as part of the CHAS. The Committee bill provides that
participating jurisdictions must submit tabular representation of
information on the homeless.

The Committee bill clarifies that participating jurisdictions
must certify that they have in effect an antidisplacement and
relocation plan that conforms in all respects to the
antidisplacement rules of the Community Development Block Grant
program at section 104(d) of the 1974 Act. These rules require
suitable replacement of units lost as a result of the expenditure
of federal funds. The Committee intends that states and
localities should use the HOME program to expand, not reduce, the
limited supply of affordable housing and that to the extent that
HOME funded projects result in displacement of families, such
families be provided suitable replacement housing.

The Committee bill also requires participating jurisdictions to
develop on anti-poverty strategy which would describe the
jurisdiction's goals, programs, and policies for the production
or preservation of affordable housing which could, in concert
with the programs of other agencies and organizations, reduce or
assist in reducing the number of households with incomes below
the poverty line. The Committee bill also provides that
participating jurisdictions develop plans and programs in the
CHAS for those activities which they control directly beginning
in fiscal year 1994.

The Committee intends that to the extend practicable the contents
of the anti-poverty strategy will be coordinated with the plans
and programs of supportive service agencies which traditionally
have been the agencies looked to for reducing poverty. The
Committee recognizes that affordable housing and social services
must work hand and glove in the overall effort to reduce poverty;
however, the Committee recognizes that adequate funds for social
services program levels sufficient to reduce poverty most likely
are not available and therefore the Committee does not intend
that cities and States be held accountable for reducing poverty
on the basis of this anti-poverty strategies in the CHAS.

          TITLE III-PRESERVATION OF LOW INCOME HOUSING

Since the passage of the Cranston-Gonzales National Affordable
Housing Act in 1990 and the enactment of a permanent program to
preserve the affordable rental housing stock of projects eligible
to prepay their mortgages, the Committee has been deeply
concerned about the program's implementation. The program that
was enacted in NAHA provides a permanent solution to the
difficult issue of prepayment and preservation of HUD assisted
housing. It was the result of long and comes arduous debate and
compromise. In the end, however, it balances the public policy
goals of preserving the affordable rental housing stock for the
longest possible time and at the least possible cost to the
federal government, protecting tenants subject to displacement
and fairly compensating the owners.

The delays and the confusion surrounding the program and the
efforts by HUD to rewrite some key elements of the program in
regulation have not gone unnoticed by the Committee. The proposed
regulations which were issued in May of 1991 provoked more than
250 critical comments including comments from members of this
Committee and prompted HUD to revise substantially the interim
regulations which are finally issued in March of this year,
nearly a year after the mandated deadline.

The Committee is aware that finally, nearly two years after
enactment, the first notice of intent have just recently been
filed. The Committee is concerned, however, that the progress has
begun under regulations, though revised, which still do not
comply fully with Congressional intent and may in the end lead to
prepayment, loss of the affordable housing stock, or long an
protracted court battles. The Committee bill therefore includes
provisions which clarify the original intent of the Congress in
adopting the permanent program in 1990.

Residual receipts and reserve for replacement accounts

The Committee intends that the preservation program be structured
to provide fair return to owners whether they sell the properties
subject to prepayment or they receive incentives to extend low
income affordability restrictions for the remaining useful life
of the property. The Committee bill clarifies that the value of
the residual receipts will be included in, not deducted from, the
determination of value and return on equity notwithstanding
release of such amounts as an incentive. It also provides that
the reserve for replacements account be included in the appraised
value of the property.

The Committee is aware that including these two accounts in the
appraised value of preservation projects may raise the cost of
the preservation program and may raise the compensation to the
owners. However, the Committee is concerned that not including
these accounts which are the rightful property of the owner
diminishes the likelihood that owners will receive just
compensation and increases the potential for expensive, time
consuming, and needless litigation.

Submission of information to tenants

One of the primary emphases in the permanent preservation program
is the involvement of tenants in the review of notices of intent
and plans of action. However, the Committee is concerned that
tenants only are receiving ``edited'' versions of notices and
plans of action under both the 1987 Emergency Low Income Housing
Preservation Act and the 1990 Act. While tenant groups should not
have access to information of a proprietary nature, including an
owner's financial statement, the Committee intends that tenants,
in order to participate in the preservation process, have access
to information about the physical and financial condition of the
property, including rent rolls, appraisals, and any information
provided by HUD. The Committee bill, therefore, requires that
tenants receive a copy of the plan of action and any supporting
information sufficient to prepare a plan and bid for the housing.

Approval of plan of action

In order for the Secretary to approve a plan of action for a
prepayment of a mortgage, the Secretary is required to issue a
finding that there is a sufficient supply of comparable,
affordable housing for the displaced tenants and that the tenants
will not be adversely affected by prepayment. The Committee is
concerned that the standards and procedures for issuing such a
finding, which is central to the preservation program, are not
well defined and are not implemented in a consistent manner by
HUD field offices. HUD's implementing regulation merely restates
the legislative language so that owners have no idea what data
may be required or used to support a plan of action for a
prepayment, and the availability of data from field office to
field office may vary. The Committee also is aware of a
prepayment approved in Madison, Wisconsin, in which no clear
standards were applied, over the serious objections of state and
local housing agencies. The Committee bill requires the Secretary
to base the finding on evidence which is documented and verified
and requires the Secretary to develop a procedure, by regulation,
for determining the finding.

Receipt of incentives to extend low-income use

The preservation program is intended to balance the rights of the
tenants, owners, and the federal government in preserving the
existing affordable housing stock at the least possible cost to
the federal government and the taxpayer. However, the Committee
is concerned that the efforts to reduce the cost of the
preservation program which the Committee recognizes will be high
and may have the unintended effect of denying just compensation
to owners. The Congress was careful to establish a reasonable
return on equity of 8 percent and expects that the return for
both for profit and nonprofit owners, along with the incentives
that are approved as part of the plan of action, shall be
available for each year after the approval of the plan, not
phased in over time as described in the regulations.

The Committee is also concerned that the incentives that are
available to owners filing plans of action under the 1987 law be
consistent, regardless of the date of filing. The Committee is
aware that the Department has approved certain incentives for
properties in California with plans of action filed prior to July
16, 1991 and then limited incentives which are authorized in law
for plans filed after July 16, 1991. HUD's policy to treat owners
of assisted housing filing under the 1987 Act differently
depending on the date of filing a plan of action is inequitable
and has no basis in law.

Elimination of windfall profits test

The Committee bill eliminates the windfall profits test. Although
the test was enacted to prevent owners from reaping big profits,
the Committee is concerned that any kind of arbitrary test
designed to distinguish between communities and properties with
future value and eligible to receive incentives and those without
value is imprecise, unfair, and unnecessary. The preservation
program includes an elaborate appraisal system to determine fair
value and it should be sufficient to determine if (and the level
of) incentives should be made available to property owners and
purchasers. Further, application of the test may cut off regions
of the country where there are ``soft markets'' and inadvertently
cause abandonments and prepayments. The Committee expects that
the appraisals and the review of plans of action will protect
against owners receiving windfall profits.

Homeownership

The Committee bill amends the resident homeownership provisions
in the preservation program to prohibit the Secretary from
requiring prepayment of the mortgage and termination of the low
income affordability restrictions on projects involving
homeownership. The Committee intends that during the transition
period from rental housing to homeownership by individual
families, the families be protected by the low income
restrictions that were available prior to the purchase for
homeownership. The Committee anticipates that resident
homeownership programs will represent only a small percentage of
the preservation program. However, the Committee intends that
even that small number should be available to low income families
even in homeownership. Should the plans for homeownership
programs not be fulfilled, the Congress intends that the tenants
should remain protected.

Insurance for second mortgage financing and supplemental loans

The Committee bill makes several statutory changes to the FHA
section 241 loan programs in order to clarify Congressional
intent for purposes of the preservation program. The Committee is
aware than under the 1987 Act section 241 loans for acquisition
and rehabilitations by non-profit sponsors and for equity had
terms of 40 years. Yet in the interim regulations, the Department
has provided that section 241 loans will have terms of only 20
years. The Committee is concerned that limiting the loan term
will require raising rents and in high cost areas, particularly,
will force projects above the federal cost limits. For priority
purchasers, the shortened loan term will seriously impact the
feasibility of transactions. In the end, the 20 year loan term
will force prepayments and contravene the intent of Congress to
preserve the affordable rental stock. The Committee bill
therefore establishes a 40 year loan term for section 241 loans
under the preservation program.

The Committee bill also requires rather than permits the
Secretary to combine acquisition and rehabilitation loans and
provides insurance for 100 percent of the replacement cost for
priority purchasers under the preservation program. Although
there will be grant funds and incentives made available to
priority purchasers subject to appropriations and the
determination of the Secretary, the committee recognizes that the
additional insurance is necessary to provide a further credit
enhancement for what will be very complicated and risky ventures,
notwithstanding the public policy which encourages the
participation of nonprofits in preserving the rental housing
stock.

Delegated responsibility to State agencies

The Committee is aware that the state housing finance agencies
have been at the forefront of providing financing for affordable
multifamily rental housing and are anxious to become partners in
implementing the preservation program. The Committee recognizes
that state agencies have developed a strong capacity to review
plans of action and underwrite rental housing transactions. In
the 1990 Act, the Congress carved out a special role for state
agencies with regard to the preservation program to act as
delegated processors to review plans of action, transfer
proposals, and incentive packages, and to provide risk sharing
arrangements under the section 241 loan program.

The Committee is concerned that the Department has not issued
clear guidance to implement these provisions and has virtually
ignored such a valuable resource, particularly in light of the
increased demands on the Department. Several of the larger state
agencies, such as the Massachusetts Housing Finance Agency, have
already established preservation offices. Massachusetts expects
about 30,000 units to be eligible to prepay and to file notices
of intent and plans of actions over the next ten years and the
agency is more than prepared to process preservation projects'
plans of actions. State agencies are also prepared to enter into
risk sharing arrangements with FHA which would reduce the
potential risks and costs to the federal government in the event
of assignments or defaults. The Committee bill requires the
Secretary to issue regulations to implement both the state
delegation and risk sharing provisions.

Study of projects assisted under flexible subsidy program

The Committee is concerned that projects which have received or
are receiving assistance under the flexible subsidy program that
might otherwise be subject to the provisions of the Low-Income
Housing Preservation Act of 1990 are not eligible for incentives
to extend low income affordability restrictions under the
preservation program. The HUD regulations have excluded their
participation because under the terms of the flexible subsidy
program, such properties are locked in as assisted housing for
the remaining term of the mortgage. Under such restriction and
the regulations, the properties can not be appraised as anything
other than assisted housing and would have no additional
preservation value on which to base incentives. The Committee is
aware that flexible subsidy projects were never included in the
cost estimates of the preservation program. Nor were partially
assisted section 236 projects, many that were assisted by State
housing finance agencies. The Committee is concerned that many of
these properties may not be preserved, even with flexible
subsidy, for lack of necessary additional funding.

The Committee bill, therefore, includes a provision which
requires HUD to submit a report to Congress within a year of
enactment of this bill which describes and analyzes the cost of
providing incentives to flexible subsidy projects and partially
assisted section 236 projects. The Committee expects the report
to include any recommendations which the Committee can consider
for ways to make these projects eligible for the preservation
program, including in the case of flexible subsidy projects
repayment of the flexible subsidy assistance prior to filing a
plan of action.

TITLE IV-MULTIFAMILY HOUSING PLANNING AND INVESTMENT STRATEGIES

The Committee is aware that the HUD assisted multifamily housing
stock that is not subject to the provisions of the permanent
prepayment/preservation program numbers more than one million
dwelling units-most built more than a decade ago. In the urban
settings in which many of these properties are located, costs to
maintain the housing as safe, decent, and affordable housing have
increased as the revenues have stagnated and the market demands
have escalated. With the passage of time, the capital repair
needs and financial needs of assisted multifamily properties will
grow. Each year, the HUD Inspector General's audit and the annual
financial statement of the FHA point to weaknesses in the
management, physical, and financial condition of assisted
multifamily properties and the losses or anticipated losses in
the FHA General Insurance Fund.

The Committee believes that there is no systematic or
comprehensive way of assessing the capital and financial
condition and needs of the assisted housing inventory. The
Committee is aware that the Department has implemented a
Comprehensive Multifamily Housing Loan Servicing Handbook which
places the onus on HUD field office staff to complete certain
required analyses of the physical and fiscal condition of each
and every property with HUD insurance. While the goal is
commendable, the Committee is concerned that the system may be
used to put more and more properties into technical default,
simply adding to problems in the FHA General Insurance Fund.

In the long run, these reviews by forcing more properties into
foreclosure may end up costing the federal government even more
than providing financial assistance and workout assistance
necessary to maintain the viability of the properties. HUD's
policies and practices with regard to privately owned assisted

housing can be traced in part to real instances of owner and
management agent abuse and fraud. However, in those instances,
the Committee intends that the Department debar or prosecute the
offender and not undermine the operations and management of the
non-offending private owners and managing agents through the
regulation process. The Committee also is concerned that HUD
through its budget requests and regulations or guidelines is
trying to clamp down on private owners or to convert properties
into tenant management or ownership unnecessarily.

The Committee bill includes provisions to establish the
comprehensive physical and fiscal assessment and planning process
that will be necessary to preserve the assisted affordable
housing stock. It is to be completed by the owners with resident
review and the review of state housing finance agencies, if
applicable. One third of the covered multifamily properties is to
complete an assessment and plan each year so that by the end of
fiscal year 1995, all covered multifamily properties will have an
approved strategy for preservation. The Secretary will determine
the format of the assessment and will have 90 days to approve
such assessments. The cost of preparing the strategy will be
considered an eligible project expense, not to exceed $5000 per
project. The Committee bill also provides that tenant rents
cannot be raised to pay for the strategy.

The Committee intends that the owners update their strategies on
a regular basis and that every five years the assessment be
reviewed in its entirety. The Committee further intends that the
Secretary consider the assessments, if they are completed, when
reviewing applications for flexible subsidy, capital improvement
loans, section 241 loans, and loan management set aside funds,
but that such assistance not be restrictive to applicants which
have completed the comprehensive strategies.

The Committee bill also provides specific requirements for
assessments to be completed in properties for the elderly under
the section 202 of the Housing Act of 1959 and sections,
221(d)(3) and 236 of the National Housing Act and for reports to
Congress based on the findings of the assessments. Such
assessments should review supportive services and design needs
for the elderly in addition to the fiscal and physical needs of
the property.

By adding requirements with respect to multifamily housing for
the elderly, the Committee intends that the sponsors and HUD plan
more effectively for the ``aging in place'' of older residents.
Knowledge about the ``aging in place'' of elderly residents is
essential for planning for the capital, modernization, and
management costs that will be necessary to forestall
institutionalization of elderly residents in assisted housing.
Periodic reviews are crucial to adapting facilities over time to
address changing resident needs.

TITLE v-MORTGAGE INSURANCE AND SECONDARY MORTGAGE MARKET

Subtitle A-FHA Mortgage Insurance Program

Maximum mortgage amount

The bill amends the maximum mortgage amount that may be insured
by FHA to eliminate the current cap of $124,850 and to provide
that a mortgage may be insured by FHA if it does not exceed the
lesser of 95 percent of the median area house price or 75 percent
of the dollar amount limitation in effect for the Federal Home
Loan Mortgage Corporation (FHLMC). A provision ensuring that no
area experiences a reduction, by virtue of this amendment, in its
maximum mortgage amount applicable as of May 12, 1992, is also
included.

The Committee believes that the increase in the maximum mortgage
amount in the FHA single family insurance program will maintain
the mandate of the FHA program to help moderate income homebuyers
as well as first-time homebuyers become homeowners. In many
areas, even a median priced home is far beyond the means of many
families under the terms of the conventional market, and because
of the low loan limit, FHA has been unavailable to help such
families become homeowners. The Committee is aware that there are
significant disparities in cost among the regions and areas of
the nation. Therefore, the bill provides for FHA loan limits
which reflect the market conditions for each individual area
based on 95 percent of the area median home price. The Committee
intends that adjustments for each area will occur on an annual
basis to reflect changes in the area median home prices. This
change will ensure that the FHA program continues to assist the
low and moderate income homebuyers it was created to serve.

The Committee also believes that increasing the loan limit will
result in a more stable and more financially viable FHA fund
because evidence from actual historical FHA experience indicates
that higher loan amounts have lower default rates than lower loan
amounts. However, to further ensure that the FHA fund is not
exposed to unnecessary risk, down payment requirements have also
been amended to require an increased down payment of 10 percent
on any FHA insured loan over $125,000.

The bill makes these changes effective beginning January 1, 1993.
Since this change is tied to adjustments in the FHLMC mortgage
limit, the Committee believes that this will provide sufficient
time for the Department to make adjustments utilizing information
which the Federal Housing Finance Board gathers to determine the
mortgage limit for FHLMC each year based on national market
surveys conducted in October.

Study of home warranty protection plans

The Committee bill requires HUD to study the use of home warranty
protection plans in the FHA program. Existing law places higher
loan-to-value (LTV) requirements on newly constructed homes
except where prior FHA approval has been obtained or if there is
a home warranty protection plan in place for the home.

The purpose of the prior approval requirement is to ensure that
FHA's Mutual Mortgage Insurance (MMI) fund is not exposed
unnecessarily to risks from faulty construction. The requirement
for prior approval results in FHA inspections of homes during the
construction process, including footing and framing inspections.
The exception for homes subject to home warranties assumed that
either the insurer would perform the same inspection process as
FHA or that the insurance coverage would reduce the potential for
losses by FHA due to defectively built homes. In theory this
exception could work; in practice, however, it has failed in a
number of instances as shown by the testimony before the
Committee.

The study provided for in the bill will address some of the
concerns that have arisen over the use of home warranty
protection plans in the FHA program. On October 22, 1991, the
Subcommittee on Housing and Community Development held a hearing
on this issue. Testimony provided at the hearing documented
disturbing tales from homeowners of defective FHA insured homes
which were not repaired under the warranty agreement and which
were abandoned by owners, thus causing losses to the FHA. The
hearing also revealed an arbitration process that leaves
homeowners confused and often unable to settle their claims. The
study is expected to investigate whether it is in the best
interests of homeowners and FHA to continue with the current
policy of permitting the use of these warranties in lieu of
direct FHA inspections. While the warranty should provide
homeowners with protection to cover any costs to repair
structural defects that occur-whether or not the builder remains
in business-the Committee has found that when a builder does go
out of business, homeowners whose homes experience such defects
have even greater difficulty in obtaining compensation for needed
repairs. Of particular interest to the Committee in this regard
is the cost to FHA associated with the inspection process, the
inspection process provided by the home warranty companies, and
any benefits to the FHA fund and homebuyers that would result
from eliminating or retaining the exception.

Veteran exemption

Congress acted in NAHA to reform the FHA single family mortgage
insurance program to ensure the ongoing actuarial soundness of
the program and homeownership affordability. In doing so, the
provision in current law which permits lower down payments for
veterans was inadvertently eliminated. The provision contained in
the Committee bill restores the exemption for such lower
downpayment requirements.

Prohibition on limitation of closing costs financed

The Committee bill includes a provision that would prohibit the
Secretary from imposing any percentage or amount limitation on
the amount of closing costs that can be financed into the
FHA-insured mortgage. This provision eliminates an unnecessary
limitation adopted by the Secretary. The Committee is concerned
that adverse selection is occurring as a result of this
regulatory limitation, weakening the actuarial soundness of the
Mutual Mortgage Insurance (MMI) fund.

In NAHA Congress acted to ensure the MMI fund's actuarial
soundness and maintain FHA's traditional public purpose of
providing homeownership opportunities to low and moderate income
homebuyers. The enacted reforms include: (1) requiring minimum
equity from homebuyers of 1.25 percent for loans below $50,000
and 2.25 percent for loans above $50,000; (2) requiring a capital
ratio of 1.25 percent in the FHA MMI fund within 24 months of
enactment of NAHA and establishing a long-term goal of a capital
ratio of 2 percent; and (3) changing the insurance premium
structure over time from a one-time up-front insurance premium of
3.8 percent, to an up-front premium of 2.25 percent and an annual
risk-based insurance premium of 0.50 percent for a varying number
of years, based on the borrower's loan-to-value ratio.

The enacted FHA reforms did not provide explicit authority for
the Secretary to limit closing costs. Since lack of homeowner
equity is generally agreed to be the biggest determinant of
default, the higher minimum equity requirement ensures that new
borrowers have adequate equity to prevent defaults and the
Committee believes that the additional limitation upon closing
costs included by the Secretary is unnecessary to protect the
MMI.

In implementing these NAHA reforms, HUD also imposed, by
regulation, a limitation of 57 percent on the amount of closing
costs that could be financed. This additional requirement means
that a homeowner has to provide additional cash at closing for
the closing costs that could not be financed. The majority of the
Committee believes that this HUD-imposed regulatory requirement
was not part of the reform package included in NAHA and is
unnecessary to ensure the actuarial soundness of the MMI fund.
The NAHA reforms have ensured that future FHA borrowers will have
sufficient equity in their homes to prevent defaults.

Prepurchase counseling requirement

The Committee, as part of its ongoing efforts to ensure the
long-term stability of the FHA MMI fund, has included in Titles I
and V of the bill provisions to require any FHA-insured purchaser
seeking a mortgage with a loan-to-value ratio of equal to or
greater than 97 percent to complete an approved housing
counseling program before FHA mortgage insurance is executed.

The Committee believes that this housing counseling requirement
will significantly reduce the number of claims against the FHA
single family insurance fund. Historical claim data from FHA
indicates higher claim rates for loans with high loan-to-value
ratios. The Committee intends that the required housing
counseling provide the potential FHA insured purchaser
information on financial management and the responsibilities
involved in homeownership, fair housing laws and requirements,
the maximum mortgage amount that the homebuyer can afford, and
the options, programs, and actions available to the homebuyers in
the event of actual or potential delinquency or default. This
information will better prepare the homebuyer for the
responsibilities of homeownership and decrease the likelihood of
a default and subsequent claim against FHA insurance.

The Committee bill provides the Secretary with discretion to
waive this housing counseling requirement. The Committee intends
that such discretion will be exercised in at least two
circumstances. First, the Secretary may waive the requirement for
purchasers who do not have access to an approved housing
counseling program. While the Committee expects HUD to make every
effort to make approved housing counseling programs available for
all the 97 percent or greater LTV purchasers, it is likely that
such services may not be available to all such homebuyers.
Second, where a purchaser is required to complete a housing
counseling program but does not wish to do so, the Committee
intends that while the direct endorsement lender could not
process the loan, HUD at its option could review such a loan and,
if circumstances warrant, grant a waiver loan.

To ensure that the required housing counseling will be available,
the Committee recognized that an increase in appropriations and
technical changes to the housing counseling provisions of section
106 of the Housing and Urban Development Act of 1968 (P.L.
90-448) would be necessary. These changes are contained in Title
I. Due to budgetary constraints the funding levels for section
106 are less than desirable, but the Committee will continue to
work to ensure that this cost effective program is fully
implemented.

The Committee bill amends the list of priorities of section 106
to include those agencies which serve areas that have a history
of a high incidence of 97 percent LTV FHA-insured mortgages. This
change ensures that these critical housing counseling funds are
directed to areas of highest need.

The Committee bill also amends the requirement in section 106 for
a toll-free housing counseling number to require that the
information regarding the availability of housing counseling be
updated at least annually. This update will ensure that timely
information sufficient to meet the housing counseling requirement
for 97 percent LTV FHA borrowers and the ongoing needs of housing
counseling clients is provided on the toll-free telephone line.
The Committee believes that the operating and maintenance costs
of the toll-free housing counseling information line are
significantly lower than the original start-up costs and,
therefore, has reduced its authorization to $379,600 to reflect
these lower costs.

Authority to decrease premium charges

The Committee bill includes an amendment that ensures that FHA
retains authority to charge lower insurance premiums than those
specified in statute. Historically, FHA has allowed insured
borrowers with shorter term mortgages to pay a lower insurance
premium than that paid by borrowers with a standard 30 year
mortgage. The Committee believes that a lower insurance premium
makes sense for mortgages of less than 30 year terms because the
risk to the FHA fund is lower than for standard mortgages. When
the 1990 FHA reforms were enacted, authority to charge lower
insurance premiums than those specified in statute was unclear.
This technical amendment clarifies that FHA retains such
authority.

Statute of limitations for distributive shares

Borrowers who pay off their FHA insured mortgage are able to
apply to FHA for any distributive share that they may be eligible
for, regardless of how long a period may have lapsed since they
paid off their mortgage. This has put an undue burden on the
Department, which must then track down the records of the
borrower, sometimes over a decade after the borrower has left the
FHA program. The provision contained in the Committee bill would
provide a 10-year statute of limitations for a borrower to apply
for any distributive share that he or she may be eligible for.
This provides sufficient time for the borrower to apply without
imposing an undue burden on the Department to maintain records
indefinitely. The Committee recognizes that until the MMI fund
becomes actuarially sound, distributive shares have been
suspended.

Multifamily mortgage limits

The Committee bill increases by 20 percent the mortgage limits in
several FHA multifamily programs. Multifamily mortgage limits
have not been changed since 1987. The high costs of building and
developing multifamily housing have increasingly made such
development almost non-existent, particularly in areas such as
New York City. The increases stipulated in the Committee bill are
indexed to the Consumer Price Index for annual adjustments which
assures that the mortgage limits will continue to assist high
cost areas in providing much needed multifamily housing.

FHA operating loss loan

The Committee bill contains a provision to revise the current HUD
policy on the calculation of operating loss loans under section
223(d) of the National Housing Act. Section 223(d) provides that
certain projects may obtain FHA insurance for a loan to cover
operating losses that occur in the first two years of the
project. The purpose of the operating loss loan program is to
return to project owners any capital contributions, made in the
first year or two of project operation, to cover the deficit
between project income and project expenses. The operating loss
loan is made only if, and to the extent that, HUD finds that
project income can now or in the near future support the
increased debt service resulting from the loan. The program also
is used sometimes by HUD to prop up a temporarily troubled
project, where owner contributions have been exhausted but the
project is expected to become viable, in order to avoid
assignment of the mortgage to HUD.

In August 1989, HUD began informally communicating to some of its
field offices a change in its longstanding policy of calculating
an operating loss loan based on the full amount of a project's
operating loss during the first two years of a project's life
without regard for any contributions made by the owner to cover
such losses. Under the new policy, HUD subtracts from the
operating loss the amount of any initial operating deficit
reserve established by the owner and required by HUD at the time
the mortgage was insured. The provision in the Committee bill
would restore HUD's prior interpretation of the calculation of
operating losses in accordance with the original legislative
intent.

This amendment does not change HUD underwriting requirements for
an operating loss loan. HUD still must determine that the loan
can be repaid out of project income. It does restore fairness and
stability to the multifamily programs and reaffirms a prudent
congressional and administrative policy of two decades that
encourages the contribution of capital by owners to projects in
their troubled early years and avoids unnecessary mortgage
assignments and claims on the insurance funds.

Eligibility of assisted living facilities for mortgage insurance

The Committee recognizes that assisted living facilities are
rapidly coming into widespread use to serve the needs of frail
elderly persons. To support these efforts, the Committee bill
includes a provision that defines and makes eligible for mortgage
insurance under section 232 of the National Housing Act (P.L.
73-479), assisted living facilities. This provision complements
the current law in section 232 which provides mortgage insurance
for nursing homes, intermediate care facilities, and board and
care homes.

Multifamily housing mortgage insurance field office staff

The Committee bill authorizes $100 million to be used by HUD for
staff in HUD's regional, area, or field offices. The Committee is
concerned about the current lack of staff available at the
Department to review, process, approve and monitor multifamily
insured projects. The Committee believes that this proposed staff
increase should enable HUD and FHA multifamily staff to process
an additional 107,000 units of affordable rental housing which
would generate approximately $8.6 billion in construction
activity and an estimated 170,036 jobs. The Committee believes
that the lack of staff and staff expertise at HUD in its FHA
offices around the country has hamstrung multifamily housing
activity, both new construction, rehabilitation, preservation and
management. This provision would provide HUD with approximately
2,000 full time employees in the field.

Expediting insurance for acquisition of RTC property

The Committee has been frustrated by the delays experienced by
those attempting to obtain FHA multifamily mortgage insurance. It
has been particularly difficult for potential purchasers of RTC
properties. Part of the decision of who wins the bid on an RTC
auctioned property is based on how quickly the deal can be
closed. Since the FHA multifamily insurance processing takes so
long, purchasers who would require FHA underwriting are often
denied winning bids on RTC properties. These purchasers are often
nonprofit developers who intend to use the properties to serve
low income persons. This provision would require FHA to establish
an expedited procedure for considering such applications.

Energy efficient mortgage pilot program

The Committee is convinced that substantial increases in energy
efficiency can be achieved in the housing constructed in this
country, that lending programs must be structured to make it
easier to finance energy efficient improvements to housing and
that greater energy efficiency will make housing more affordable
for homeowners and renters.

The energy efficient mortgage pilot program contained in the
Committee bill is designed to provide the Department with 2 years
of experience implementing this program on a limited basis (in 5
states) before full implementation nationwide occurs. This pilot
program permits FHA to exceed its maximum loan amount by the
amount of the energy efficient improvements. Cost effective
energy efficiency improvements are improvements that do not
exceed the greater of 5 percent of the value of the dwelling (not
to exceed $8,000) or $4,000. The provision requires mortgagees
and lenders to notify FHA homebuyers of the availability and
benefits of the pilot program. All FHA insurance applicants must
sign a statement stating that they have been informed of the
program and understand its benefits and procedures. The Secretary
is required to submit to Congress within 18 months of enactment,
a report describing the effectiveness and implementation of this
pilot program, including an assessment of the potential for
expanding the pilot program nationwide. The Committee intends
that this pilot program will be expanded nationwide unless the
Secretary finds cause to recommend otherwise.

This initiative is in addition to previous energy efficiency
initiatives that Congress has directed HUD to implement which
will contribute to our efforts to reduce a family's annual
heating and cooling costs and to make their total housing costs
more affordable.

In particular, section 109 of NAHA requires HUD to incorporate
standards that meet or exceed the CABO Model Energy Code
requirements into construction standards applicable to HUD
assisted and FHA insured housing. The CABO-MEC requirements were
developed through a voluntary consensus process involving the
private and public sectors and are usable immediately. In
addition, research has shown that adoption of the 1989 CABO-MEC
is cost effective for consumers. HUD should implement these
requirements-and the new energy efficient mortgage pilot
program-without further delay.

Title I manufactured home loan insurance limits

The Committee bill links increases in the maximum mortgage
amounts for manufactured homes to the levels allowable under the
section 203(b) single family FHA mortgage insurance program.
Because the Committee bill indexes the section 203(b) program
loan limits to the flexible, annually adjusted index, the Federal
Home Loan Mortgage Corporation loan limits, this linkage ensures
that the manufactured home loan insurance limits will be adjusted
to reflect changing market conditions.

         Subtitle B-Secondary Mortgage Market Programs

Ginnie Mae interest payments

The Committee bill authorizes, but does not require, the
Government National Mortgage Association (GNMA) to absorb the
costs of reduced interest payments for persons in the military
that have their interest rate on their mortgage reduced under the
provisions of the Soldiers and Sailors Relief Act. Currently, the
law only requires that the payments of interest by an active
military person be reduced, but does not specify who or what
entity must absorb the reduction. When the Desert Storm military
conflict arose and the interest reduction was in effect for
active military personnel, the Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation announced
that they would absorb such interest reduction costs. Apparently,
GNMA did not believe that it had the authority to do likewise.
This provision provides such authority.

   TITLE VI-HOUSING FOR ELDERLY PERSONS, HANDICAPPED PERSONS,
                 AND PERSONS WITH DISABILITIES

             Subtitle A-Supportive Housing Programs

In this subtitle, the Committee reauthorizes existing housing
programs for the elderly, the handicapped and the disabled
including the section 202 supportive housing for the elderly, the
section 811 supportive housing for persons with disabilities, the
Congregate Housing Services Program, and HOPE for Elderly
Independence and the AIDS housing program. it also makes
necessary program changes.

Supportive housing for the elderly

The Committee bill authorizes for appropriation $685.4 million
for capital advances and $765.7 million for project rental
assistance for FY 1993 for supportive housing for the elderly. It
also reinstates a loan reservation for a project sponsored by the
Torrington, Wyoming, Volunteers of America for the purposes of
conversion of such project to the capital grants program under
the supportive housing for the elderly program, the new section
202 program. The Committee believes that this project had been
unfairly cancelled and denied the right to convert from the old
section 202 program to the new program.

In enacting the new section 202 program, the Congress recognized
the need to coordinate supportive services with housing for the
elderly, particularly since many elderly residents will ``age in
place.'' The Committee is aware that similar needs exist in the
properties developed under the old section 202 program and that
sponsors have access to funds to provide such supportive services
through residual receipts accounts, if it were permissible. Many
of the old section 202 projects have built up considerable
residual receipts which could be used to fund service
coordinators, supportive services, and retrofitting as is
eligible under the congregate housing services program. As the
elderly ``age in place,'' these needs become critical. Therefore
the Committee bill authorizes the Secretary to provide housing
sponsors access to residual receipts in excess of $500 per unit
to cover the cost of supportive services, coordinators, and
retrofitting.

The Committee expects the Secretary to scrutinize carefully any
expenditures under this provision through the sponsor's annual
project financial statements. The Committee expects the Secretary
to encourage sponsors to expend excess residual receipts for
these purposes, to the extent practicable and necessary. Further
the Committee intends that to the extent that sponsors do not
expend excess residual receipts for these purposes, the Secretary
may adjust rental assistance for projects accordingly.

Elder cottage housing opportunities demonstration (ECHO)

The Committee is aware that the Cranston-Gonzalez National
Affordable Housing Act (NAHA) authorized the Secretary to carry
out a demonstration of ECHO housing under the section 202 program
which the Department has steadfastly refused to implement.
Instead, the Secretary has suggested that the units can be
purchased and put on sites under the FHA manufactured housing
insurance program. The Committee continues to believe that ECHO
units can be used successfully particularly in rural areas where
non profits could assemble ECHO units and set them up on lots for
elderly and disabled to be close to or in the back yards of their
families.

The Committee bill builds on the ECHO demonstration program
provided in section 806 of NAHA and authorizes a demonstration of
200 units, 100 under the section 202 program, Supportive Housing
for the Elderly, and 100 under the section 811 program,
Supportive Housing for Persons with Disabilities, with such sums
as may be necessary for capital grants and operating assistance
to carry out the demonstration. The demonstration should be
structured to determine the feasibility of including as eligible
development costs under the two programs the costs of purchasing
and installing ECHO units and whether or not ECHO units are
durable enough to last over the initial 20 year period of
affordability required under the programs.

The Committee intends that the demonstration determine what the
necessary level of reserves for replacement of ECHO units should
be based on the useful life cycle of ECHO units. The Committee
expects that the demonstration would suggest the appropriate line
items of the capital grant development budget for ECHO units and
that the budget would be substantially different from a typical
capital grants budget. The Committee is aware that it may include
such items as installation costs, building of pads, transporting
of ECHO units as well as replacement units which may reduce the
ECHO units that are provided initially to eligible seniors or
persons with disabilities under the demonstration.

Supportive housing for persons with disabilities

The Committee bill authorizes for appropriation $281.8 million
for capital advances and $325 million for project rental
assistance in fiscal year 1993 for the supportive housing for
persons with disabilities program.

Revised congregate housing services program

The Committee bill authorizes for appropriation $27 million for
revised congregate housing services program, including funds for
the continuation of grants under the old congregate housing
services program. The Committee is aware that the Secretaries of
HUD and Agriculture have yet to issue regulations to implement
this new and expanded congregate housing services program and in
fact the Secretary of HUD has asked the Congress to rescind funds
appropriated for the new program the last two years. Congress has
denied the rescission requests.

The Committee expects the Secretaries to implement this program,
rather than fail to do so by refusing to promulgate regulations.
The Committee bill requires the Secretaries to issue interim
regulations for effect within 45 days of enactment, including a
15 day prepublication review period for the Congress. It further
requires issuance of final regulations 90 days after publication
of the interim regulations and provides for a 60 day public
comment period.

The Committee is aware that this timeframe for regulations is
short; however, the departments already have had nearly two years
to write regulations for a program which this Committee believes
can be critical to preventing the premature institutionalization
of frail elderly residents of public and assisted housing who are
aging in place.

HOPE for independence of elderly persons and persons with
disabilities

In the Cranston-Gonzalez National Affordable Housing Act, the
Congress established a demonstration program, HOPE for elderly
independence, which provides community based continuing care for
frail elderly residents with tenant-based housing assistance.
Administered by the public housing agencies, this program
provides section 8 rental assistance and supportive services to
frail elderly residents in their own homes, which are typically
scattered throughout a community. The Committee bill authorizes
for appropriation separate section 8 assistance of $36,920,000
and funding for supportive services of $10,816,000 to carry out
this demonstration. The bill also ensures that any demonstration
that is initiated will be carried out over a full five year
period.

The Committee recognizes that this demonstration could be
successfully adapted for persons with disabilities and that such
an adaptation could provide alternative living arrangements for
persons with disabilities to public and assisted housing for the
elderly. Persons with disabilities and their representatives have
long advocated for ``mainstreaming'', providing housing
throughout the community rather than in segregated facilities. At
the same time the advocates have lobbied for supportive services
for persons with disabilities to protect against
institutionalization and promote independent living. The
Committee intends that the benefits of this HOPE program be
extended to persons with disabilities. The bill therefore makes
persons with disabilities eligible to participate along with the
frail elderly and renames the program as HOPE for Independence of
Elderly Persons and Persons with Disabilities.

Housing opportunities for persons with AIDS

Authorizations.-The Committee has learned that since the Housing
Opportunities for Persons with AIDS provision was first enacted
under Title VIII, Subtitle D of NAHA, the number of cases of
people with AIDS has doubled. The lack of affordable and
appropriate housing for persons with AIDS and their families has
become an acute crisis within the overall AIDS crisis. The
Committee notes that the housing problems for persons with AIDS
arise in a number of ways. Despite federal and state
anti-discrimination laws, many people with AIDS face eviction
from their homes when it is discovered they have AIDS. Many
others lose their housing when, as a result of illness and lost
wages, they become unable to pay rent or mortgage payment. Some
persons with AIDS had no homes to begin with and lived on the
streets; once ill, they shuttle back and forth between acute care
hospitals and shelters, at an enormous cost to their health and
to the taxpayers. Children with HIV may spend their short lives
in acute care hospitals because there is no adequate housing for
them and their families. Women with AIDS, especially those who
have children, often find themselves barred from the few AIDS
residential programs that do exist.

The Committee finds that the need for the housing opportunities
provided by the AIDS Housing Opportunities Act is critical.
Therefore, the Committee has amended section 863 of NAHA to
authorize $162.8 million for FY 1993 for the AIDS housing
program.

The Committee has also made numerous programmatic, clarifying and
technical amendments to the AIDS housing program created in 1990
in order to make it better serve those persons with AIDS. These
amendments are discussed below.

Definitions.-The Committee bill amends the definition in section
853 of NAHA to clarify how grants are to be awarded and
distributed under this Act. The Committee believes that it was
unclear from the statutory definitions of the terms
``recipient'', ``applicants'', and ``grantees'', and from the use
of these terms throughout the statute, who should receive and
distribute grant funds and who should actually use the grant
funds to implement eligible program activities. The Committee
bill also adds definitions of ``city'', ``eligible person'',
``nonprofit organization'', and ``project sponsor'' to this
section to provide necessary clarification for the implementation
of the housing activities provided under the AIDS housing
program.

The Committee bill amends the definition of ``applicant'' in
section 853(2) of NAHA to clarify that nonprofit organizations
eligible to receive assistance under the program may also be
applicants for grants under the program. The Committee believes
that it is essential that the critically needed housing
opportunities provided by this program be implemented, and thus,
the Committee encourages nonprofit organizations to apply for
funds under this program if the governmental jurisdictions
otherwise eligible to apply for funds are unable or unwilling to
do so.

Grant eligibility and allocation.-The Committee bill amends
section 854 of NAHA to clarify that units of local government and
nonprofit organizations are eligible for grants under this
program. The Committee bill adds Section 854(b) to clarify how
eligible activities under this program shall be implemented by
specifying that grantees shall carry out eligible activities
through contracts with project sponsors. The Committee bill
further adds a new definition of ``project sponsor'' as
referenced above to section 853 to provide that a ``project
sponsor'' is a nonprofit organization or housing agency of a
State or unit of general local government.

The Committee believes that this provision will make it clear
that grant checks are to be disbursed by HUD to the chief elected
official in an eligible city, who will then be responsible for
seeing that funds are distributed to project sponsors to
implement the grant activities. The committee believes that this
change will make grant disbursement administratively easier. The
Committee notes, however, that entities receiving program funds
should collaborate with the relevant State and local service
agencies in the jurisdiction and with other public and private
organizations and agencies that provide services to people with
AIDS to ensure that grant funds are used in the most appropriate,
effective and efficient manner to provide housing opportunities
for people with AIDS.

The Committee bill, similarly, adds a new section 854(f) to
clarify that while formula grants to eligible cities in a
metropolitan statistical area are to be made to the city itself,
the Secretary must ensure that the grant amounts will be
allocated among eligible activities in a manner that addresses
the needs of the entire metropolitan statistical area, not just
the needs of the city receiving the grant check.

The Committee bill further amends section 854(c)(1) to require
HUD, in making its determination of which cities and States are
eligible for grants under the formula allocation, to reference
the number of cases of acquired immune deficiency syndrome (AIDS)
reported to and confirmed by the Director of Centers for Disease
Control of the Public Health Service as of March 31 of the fiscal
year immediately preceding the fiscal year for which the amounts
are appropriated and allocated.

The Committee bill amends section 854(c)(3) to clarify that 10
percent of program funds are not to be distributed through the
formula but rather are to be allocated among cities and States
that are ineligible to receive grants under the formula because
the number of reported AIDS cases in these jurisdictions do not
meet the threshold set out in the formula. The Committee
reiterates its intent that HUD under this 10 percent set-aside is
to fund special projects of national significance to States,
units of general local government, and nonprofit organizations.

Limitations on spending for activities.-The Committee bill amends
section 855(6) of NAHA to clarify that program funding for any
additional activities other than those contemplated in section
855 (1) through (5) should be developed and carried out by HUD in
cooperation with eligible States and localities under this
program and shall be provided solely through the 10 percent
non-formula allocation.

Prohibition of fees.-The Committee bill amends section 856(d) to
clarify that program recipients of grant funds shall agree that
no fees other than those expressly required under the program
shall be charged to any eligible person for any housing or
services funded with grant amounts.

Administrative expenses.-The Committee bill amends section 856(g)
of NAHA to address administrative costs by limiting grantees to
not more than 3 percent of grant funds for administrative costs
related to administering grant amounts and by limiting project
sponsors to not more than 7 percent of grant funds for
administrative costs related to carrying out eligible activities,
including the costs of staff.

Short-term supportive housing and services.-The Committee bill
amends section 858 of NAHA to clarify that supportive services
may include technical assistance to enable eligible persons to
access benefits and services for the homeless provided by
federal, state and local governmental agencies and programs.

The Committee bill further clarifies that grant amounts may be
used for operating costs such as the costs of security,
operation, insurance, utilities, furnishings, equipment and
supplies. The Committee believes that allowing grant funds to be
spent on operating costs will ensure that persons with AIDS have
continuous access to permanent housing.

The Committee bill clarifies that HUD may only waive the time
limits otherwise applicable to residency in short-term housing if
the project sponsor demonstrates that it has made a good faith
effort to acquire permanent housing and has been unable to do so.
The Committee intent is to clarify that the provision of
short-term housing is not meant to replace the establishment and
provision of permanent housing for eligible persons.

The Committee notes that current law under section 858(b)(2)(A)
prohibits the housing of more than 50 families or individuals in
any short-term supportive housing facility assisted with amounts
from a grant under this Act. The Committee created this
restriction as an absolute ceiling on the number of residents in
such a facility. This ceiling amount is set to encompass
short-term housing facilities in the largest cities that may be
receiving funds under this act. The Committee, however, believes
that it would not be appropriate to house this many people in a
short-term facility in a smaller city. The Committee expects that
both HUD and grantees will recognize that it would violate the
intent of this Act to use grant funds to create overcrowded
short-term facilities to ware-house people with AIDS.

Rental assistance.-The Committee bill strikes the term
``short-term'' from the title of section 859 of NAHA to clarify
that grants under this section are for rental assistance related
to permanent housing. While this Act does provide for short-term
housing opportunities, the Committee establishes the goal of the
Act an increase in level of permanent housing available to people
with AIDS and their families.

Community residences and services.-The Committee bill amends
section 861(c) of NAHA to clarify that grants for community
residences and services may be used for community outreach and
educational activities regarding AIDS and related diseases. The
Committee believes that this provision is necessary because
prejudice, fear and stigma around AIDS have led to discrimination
against persons with AIDS in housing. For example in a recent
case in Connecticut, the Stewart B. McKinney Foundation was
forced to file suit against zoning officials in the town of
Fairfield, who had required a ``special exception'' to zoning
requirements to establish a residence for up to seven homeless
AIDS persons. The zoning officials and the town residents
expressed hostility to the proposed residence. A federal court
issued an injunction preventing the zoning commission from
requiring the ``special exception'' finding by stating that
`` i t is clear to the court that it was the HIV status of the
prospective tenants that motivated much of the opposition to the
home'' and that ``given the extreme fear the HIV virus engenders
and the misconceptions held by so many, to allow the Town to
impose a requirement that has the effect of holding handicapped
people up to public scrutiny in a way that non-handicapped people
are not is to violate the purpose of the Fair Housing Act.''

Eligibility of families.-The Committee bill amends the definition
of persons eligible for assistance in order to clarify that
persons eligible for housing under this program include not only
persons with AIDS and related diseases, but their families as
well. The Committee believes that persons with AIDS and related
diseases should not have to be separated from their loved ones in
order to get program assistance.

Regulations.-The Committee bill requires HUD to submit to
Congress a copy of proposed interim regulations that implement
the provisions under Subtitle D, Housing Opportunities for
Persons with AIDS, of NAHA within 30 days of the enactment of the
Committee bill and requires HUD to publish these interim
regulations within 45 days from the enactment date with the
regulations to take effect upon publication. The Committee is
pleased that HUD recently released the proposed interim
regulations for the AIDS program and now wishes that the
Department fund AIDS housing projects as quickly as possible. The
Committee bill also requires HUD to issue final program
regulations within 90 days after the publication of the interim
regulations.

Nevertheless, the Committee is extremely concerned that
regulations implementing this Act were still not issued by the
date that the Committee considered this housing reauthorization
bill, almost three years after the AIDS program was originally
enacted in NAHA. The Committee believes that HUD's delay in
issuing regulations necessary to implement this program has
prevented persons with AIDS and their families from receiving the
housing opportunities that Congress intended them to receive when
it passed NAHA in 1990. The Committee finds that the delay in
implementing the program is unacceptable. Thus, it is necessary
to require HUD to act with all due speed in ensuring that
regulations are issued and funds dispersed to meet the critical
housing needs of persons with AIDS and their families.

SUBTITLE B-AUTHORITY FOR PUBLIC HOUSING AGENCIES TO PROVIDE
DESIGNATED PUBLIC HOUSING AND ASSISTANCE FOR HANDICAPPED AND
DISABLED FAMILIES

The Committee is aware that with the increase in early
deinstitutionalization, the increasing numbers of mentally
disabled who are not entering hospitals, the broadened definition
of disability to include alcohol and drug abusers, and the lack
of affordable housing, the number of younger disabled persons in
public and assisted housing which once housed only the elderly
has grown significantly. Some of the elderly residents and
elderly advocacy groups are expressing fear of such ``mixed''
populations and advocating ``elderly only'' housing where elderly
residents can live among peers with similar lifestyles. The PHAs
say the mixed populations can be disruptive and difficult to
manage without resources and services. At the same time, the
advocacy groups for the disabled fear that any change in current
housing policy unfairly will deny persons with disabilities
decent, affordable housing opportunities or result in
resegregating persons with disabilities.

The Committee recognizes the urgency in providing an equitable
and realistic public policy with regard to the mixing of elderly
and non elderly disabled in public housing. As early as 1988, the
Appropriations Committee requested that HUD complete a study
about the issue by May, 1989. This Committee joined with the
Appropriations Committee in prodding HUD to complete the study
during consideration of the housing bill in 1990. HUD's report
was finally released in January of last year. Pursuant to a
Senate Appropriations Committee request, the GAO has issued a
draft report on the same topic. The Committee is concerned that
neither study provides concrete recommendations for changes in
the law or in the regulations and both were based on incomplete,
outdated, and anecdotal evidence.

The Committee believes that the problems derive in part from the
legal definition of elderly which includes the disabled, and are
complicated by the Fair Housing Amendments of 1988, section 504
of the 1973 Rehabilitation Act, and the Age Discrimination Act.
Because elderly and disabled are defined together and because of
the federal preferences for public housing, the Committee
recognizes that HUD occupancy guidelines require housing
authorities to provide housing to elderly and disabled families
in the same projects, typically the high rise buildings that were
originally developed for elderly residents. The Committee is
aware that practical considerations also effect decisions to
provide mixed housing that most one bedroom units occur in
housing for the elderly, not family housing.

The Committee has conducted legislative hearings in Washington,
D.C., and in Milwaukee, Wisconsin, to receive testimony from
interest groups, public housing authorities, assisted housing
managers, advocates for the elderly and persons with
disabilities, and residents of public housing in an effort to
consider all the issues surrounding mixed populations. The
Committee is aware that problems arising from mixed populations
have been particularly acute in Milwaukee and in Boston, where
many of the buildings that were designated from the elderly are
now housing large numbers of non elderly persons with
disabilities and the waiting lists are comprised of many disabled
among fewer and fewer elderly. According to the GAO draft report,
although the non elderly disabled now comprise only 8 to 10
percent of public housing for the elderly, they make up 50
percent of the new admissions to public housing.

The Committee has received testimony which reflect a wide range
of positions on the issue from segregating the two populations to
total ``mainstreaming'' which is currently the case in may PHAs
for fear of violating fair housing laws. Those who advocate
designated, separate housing also advocate funding to provide
alternative living arrangements for persons with disabilities. In
between are those who say that with appropriate services and
service coordinators, particularly to make sure that non elderly
disabled residents continue prescribed medication and outpatient
treatment, and appropriate screening and eviction policies, the
non elderly disabled can be well integrated into any housing
setting. The Committee bill balances the various positions to
provide a comprehensive approach to the issue of mixed
populations in public housing.

Definitions.-The Committee recognizes that the first step in
eliminating the confusion about whether housing authorities can
or cannot provide designated or separate housing opportunities
for elderly residents and non elderly disabled residents is to
change the definition of ``elderly families'' in section 3 of the
1937 Act. The Committee bill strikes the current definition which
combines elderly and disabled families in one term and defines
families as single persons who are either elderly, disabled,
handicapped, displaced, the remaining member of a tenant family,
or any other single person. The new definition retains the
prohibition against providing any other single person a housing
unit of 2 or more bedrooms, and gives preference to single
persons who are elderly, disabled, handicapped, or displaced
before any other single person.

The Committee bill defines families in the case of elderly,
near-elderly, disabled, or handicapped families as families whose
heads or spouses, or sole members are elderly, near-elderly,
disabled, or handicapped and includes 2 or more elderly, near
elderly, disabled, or handicapped individuals living together or
on such individual living with a caregiver. The bill retains the
definition of elderly person as a person who is at lest 62 years
of age; the definition of a person with disabilities; the
definition of handicapped person; the definition of displaced
person; and the definition of near-elderly person as a person
between 50 years of age and 62 years of age.

Authority

Designation-The Committee recognizes that the second step in
addressing the dilemma posed by mixed populations is to permit a
PHA to designate housing for separate or mixed populations within
certain limitations that ensure that no resident of or applicant
for public housing is discriminated against or disadvantaged in
any way. The Committee bill authorizes PHAs to designate housing
for certain populations as long as the needs of all eligible
populations are addressed to the extent practicable in an
allocation plan. Within the types of families for which housing
is designated, the Committee requires that federal preferences
for occupancy are observed.

Near-elderly.-The Committee bill retains eligibility for
near-elderly families, those between 50 and 62 years of age, in
the event that there are insufficient elderly residents to occupy
a project or portion thereof that has been designated for
occupancy by elderly families only. The Committee continues to
believe that mixing elderly and near-elderly populations provides
a supportive environment for both groups.

Vacancy.-In providing authority to designate projects, the
Committee does not intend to encourage or permit extended
vacancies simply to achieve or maintain designations. However,
the Committee is aware that designating projects or portions
thereof for the elderly, handicapped or disabled may create
temporary vacancies. The Committee bill permits PHAs to leave
units vacant for a maximum of 60 days before admitting for
occupancy families who are not of the type for whom the project
is reserved. The Committee expects that this requirement apply to
units that are ready for occupancy, not to those that are badly
damaged or in need of modernization, otherwise uninhabitable, or
unable to be readied for occupancy in less than 60 days. In such
cases, the 60-day period should run from the time the unit is
available for occupancy.

The Committee is aware that, in many cities, the fact that
housing that was once considered housing for the elderly is now
occupied by both the elderly and the non-elderly disabled has
discouraged elderly residents from even applying for public
housing. Waiting lists are dominated in many instances by non
elderly disabled or currently homeless individuals. The Committee
recognizes that it may be necessary to restore confidence,
particularly among the elderly, that the buildings will be
reserved for the elderly to live out their years in relative
peace and quiet. The same can be said for the handicapped and
disabled; designations may necessitate voluntary transfers,
relocations, or marketing strategies that may increase vacancies
for a time.

Therefore, the Committee bill provides an exception from the
60-day vacancy rule for a two year period following the initial
designation of a project. Under the transition rule, a PHA may
maintain a vacancy rate of 10 percent for 60 days before filling
vacancies with any eligible family from the waiting list.

The Committee does not expect that the Department will penalize
housing authorities in any way, including under the Public
Housing Management Assessment Program (PHMAP), as to operating
subsidies or modernization funds, for complying with these
vacancy rules for designating housing. Further, the Committee
does not intend that this provision supersede other methods of
addressing public housing vacancies, such as a marketing plan or
comprehensive occupancy plan, as provided for under current law.

Availability of housing.-The Committee intends that this
provision offer choices to residents and would-be residents of
public housing to live in projects designated for either elderly,
disabled, or handicapped; to continue to live in mixed settings;
or to choose section 8 assistance. The Committee expects PHAs
only to offer appropriate housing choices including a designated
project, mixed project, or section 8 assistance to families
whether they are elderly, disabled, or handicapped and to offer
occupancy only in units of appropriate size. To further tenant
choice, the Committee bill provides that the decision of any
family to refuse occupancy in an appropriate project or to refuse
assistance offered will not automatically remove a family from
the top of the waiting list. However, the Committee does not
intend that this provision offer carte blanche to families to
reject particular units in particular buildings on particular
floors until the ``right'' unit is offered. The Committee is
aware that such freedom to wait at the top of the waiting list
would create an administrative nightmare for PHAs, given their
long standing procedures for filling vacant units and offering
housing to families on waiting lists. Further, the Committee does
not intend that a family's choice be determined by discriminatory
decisions. The bill does not provide waiting list protection for
any family which bases its acceptance or rejection of housing
assistance on race, color, religion, sex, familial status, or
national origin of occupants or the neighborhood. The Committee
expects that PHAs should take care that decisions are not based
on the nature of disabilities as well, although not a protected
class under the Fair Housing Amendments.

Prohibition of evictions.-The Committee bill strictly prohibits a
housing authority from evicting tenants, for other than good
cause, to achieve designated housing. The Committee is
particularly concerned about preventing evictions of non elderly
disabled residents in order to establish elderly only buildings.
The Committee is aware that such evictions may be tempting where
there has been demonstrable disruption and complaints about mixed
housing and where waiting lists are precariously tilted away from
elderly applicants.

However, the Committee bill does permit transfers upon the
request of the tenant and does not preclude incentives for moving
to achieve designations. If housing authorities do offer
incentives to non elderly or to elderly tenants to move, they
must ensure that the tenants' decisions are wholly voluntary and
that no coercion is either used or perceived. The Committee
expects, therefore, that each housing authority will develop
written procedures and instructions to achieve voluntary housing
transfers.

Accommodation of housing and service needs.-The Committee
believes that a complete public policy addressing mixed
populations has at its core both the ability to designate housing
and the expansion of affordable housing options with appropriate
supportive services, particularly for non elderly persons with
handicaps or disabilities. The Committee bill, therefore,
provides that housing authorities may develop, rehabilitate, or
acquire housing in which supportive services are provided,
facilitated, or coordinated as shared housing, group homes,
family housing, congregate housing, or mixed housing settings;
may carry out major reconstruction of obsolete public housing and
reconfiguration of existing public housing; and may provide
section 8 assistance to expand the housing available particularly
to handicapped and disabled families.

While the Committee expects PHAs to continue to house elderly and
non elderly disabled and handicapped applicants together in
buildings that contain appropriately sized units, the Committee
encourages housing authorities to locate or develop alternate
housing in the community designated for persons with
disabilities. However, in so doing the Committee intends that
PHAs not foster or promote in any way the re-institutionalization
of persons with handicaps or disabilities. The alternative
housing provided should be carefully selected after consultation
with relevant local groups representing the disabled and
handicapped and adapted to provide appropriate services in
appropriately scaled settings to foster independence where
possible.

Allocation plans.-The Committee strongly believes that each
housing authority wishing to designate buildings for certain
populations must do so only with a clear understanding of the
impact of such designations on the availability of public housing
on current and future public housing residents. Further the
Committee expects that designations will not result in
discrimination or in denying housing assistance to persons with
disabilities.

The Committee bill, therefore, requires housing authorities to
develop an allocation plan which analyzes in detail current
residents, current housing inventory, current waiting lists,
future demand for particular types of housing, such as identified
in the jurisdiction's CHAS, vacancies and vacancy trends. The
plan also should provide strategies for designating housing and
transfers to achieve designations and for meeting the needs
particularly of non elderly persons with disabilities and
handicaps through section 8 assistance, major reconstruction of
obsolete projects, and new development money for acquisition or
development. In analyzing waiting lists, the Committee expects
data that will reflect the length of time the different groups of
tenants spend on waiting lists, before and after designations to
be provided to be certain that all future residents are treated
fairly.

The Committee also intends that in addition to analyzing housing
needs and strategies to meet those needs, the overriding purpose
of the plan is to ensure, to the extent practicable, that the
public housing agency provides at least as much assistance for
non elderly disabled and handicapped persons as was provided
prior to the designations, depending on housing needs and waiting
lists. The Committee does not intend that this requirement be
construed as a requirement for one-for-one replacement of housing
assistance, only that persons with disabilities not be
underserved by the designation of housing for the elderly.

The PHAs may want to include an analysis of alternate housing
serving persons with disabilities along with verifiable
documentation such as written commitments from alternate housing
providers detailing the number of vacant units that they have
available to house non elderly people with disabilities in order
to comply with this provision. The Committee expects the
Secretary to add such requirements as are necessary to fulfill
the Department's responsibility to further the provisions of the
Fair Housing Act and Amendments.

Development.-The Committee bill requires that PHAs consult with
applicable states and units of general local government and hold
one or more public hearings in developing their allocation plans.
The Committee expects PHAs to announce the date, time, and
location of such hearings in advance in order to attract any
appropriate parties that may have an interest in the plan. The
purpose of these hearings and consultations is to provide housing
authorities with the data they need in order to make reasoned
judgments about whether or not to designate buildings or portions
of buildings, such as whether alternate housing is available,
whether appropriate supportive services are available, and
whether solutions other than designating buildings would better
serve all tenants.

Approval.-The Committee bill requires that the Secretary review
the allocation plans and approve the plans if the information and
strategies are complete, accurate, and reasonable; and the plan
will not lead either to excessive vacancies or to reducing
significantly the availability of housing for persons with
handicaps and disabilities. If the review is not completed in 45
days and no letter of deficiency is provided within 45 days, the
plan is deemed approved. The same requirements apply to biannual
updates which should be submitted as local needs and resources
change.

By permitting the allocation plans to be approved automatically
if the Secretary does not act within 45 days, the Committee
expects the Secretary to establish a process that will be
responsive in less than 45 days. The Committee intends that HUD
take an active role in reviewing the allocation plans and expects
the Secretary to report to the Committee should implementation of
this or any other portion of this bill become administratively
difficult.

Section 8 assistance for handicapped and disabled families

The Committee believes that one key to making this comprehensive
approach work is the availability of section 8 assistance,
particularly for handicapped and disabled families. The Committee
bill requires a PHA which has designated housing to apply for
section 8 assistance, both tenant-based and project-based,
sufficient to meet the needs of handicapped and disabled families
as identified in a PHA's allocation plan. The strategy for
providing and requesting section 8 assistance is to be clearly
defined for a two year period in the allocation plan. The
Committee recognizes that there is insufficient section 8
assistance to meet all the defined needs in a short period of
time; however the Committee expects a PHA to propose a reasonable
section 8 strategy to attain specified limited goals which are
attainable and realistically to provide housing assistance for as
many handicapped and disabled families as possible each year.

Such amounts are to be in addition to, and not a substitute for,
the section 8 rental assistance a PHA would apply for to meet
other equally important family needs within its jurisdiction,
including single mothers with small children. The Committee does
not intend that all section 8 assistance of appropriate size be
made available only to handicapped and disabled families.
Finally, it is the Committee's intent that a PHA would allocate
section 8 assistance that becomes available through turnover as
well to meet the needs of persons with disabilities or handicaps.

Development and reconstruction of housing for handicapped and
disabled families

The Committee believes that a second key to the success of this
comprehensive approach is the availability of funds for the
reconfiguration or reconstruction of existing public housing
units and buildings and new development or acquisition of public
housing for disabled and handicapped families. The Committee bill
therefore sets aside not less than 5 percent of any amounts made
available for reconfiguring existing public housing into units of
appropriate size and with appropriate amenities. The bill also
sets aside 5 percent of development funds not earmarked for MROP
for the new construction or acquisition of public housing
appropriate for handicapped and disabled families.

In both instances, funds shall only be made available on a
competitive basis to PHAs which have submitted allocation plans
and have designated occupancy for certain types of families. An
overriding criteria in providing funds under both set-asides
would be the need identified in the allocation plans. The
Committee bill also requires that the Secretary consider the
availability and commitment of appropriate supportive services
for handicapped and disabled families in selecting PHAs for
funding under the set-asides.

In approving proposals for reconstructing, building, or acquiring
public housing for persons with disabilities, the Committee
expects the Secretary to employ the most current information
about the housing needs of handicapped and disabled families.
Such information is available from the Community Support Program
of the National Institute of Mental Health, the Housing Task
Force of the Consortium of Citizens with Disabilities, the
Housing Center at the University of Maryland School of Medicine,
and the Center for Community Change through Housing and Support
at the University of Vermont, among others.

            SUBTITLE C-STANDARDS AND OBLIGATIONS OF
            RESIDENCY IN FEDERALLY ASSISTED HOUSING

The Committee is aware that good management of federally assisted
housing plays an important role in making any living situation,
especially mixed or population specific housing, work for the
residents. Part of good management is applying consistent, fair,
and reasonable occupancy standards, selection criteria, and
eviction procedures to all current and future residents. The
Committee recognizes that many housing managers of public and
assisted housing have been given mixed signals and inconsistent
information regarding what can and cannot be asked of applicants
for housing assistance and what is and is not just cause for
eviction. Therefore, public housing authorities and assisted
housing managers may sometimes accept for residency residents who
should not have been admitted or fail to evict residents when
good cause for an eviction exists. The Committee is aware that
part of the conflicting information comes from application of a
number of laws including the Fair Housing Act, section 504 of the
1973 Rehabilitation Act, the Age Discrimination Act, and the
American with Disabilities Act as well as the various housing
acts.

The Committee believes that this lack of good screening and
eviction procedures or at least the confusion certainly has
contributed to the dilemma caused by mixed populations which
these provisions address. Therefore, the Committee bill requires
that the Secretary establish a task force, comprised of
individuals who represent public housing authorities, owners and
managers of federally assisted housing, tenant advocacy groups,
advocates for the elderly, disabled, and homeless, and social and
mental health service providers, to systematically review all
laws, regulations, handbooks, policies, and court cases to
develop recommended criteria for occupancy and regulations based
on the criteria.

In developing their recommendations, the Task Force is required
to hold public hearings and receive written comments. Ultimately,
these criteria will form the basis for regulations that are to be
applied by PHAs and owners to all tenants of public and assisted
housing as a condition of federal assistance. The Committee
expects the Department to cooperate and support fully the work of
the Task Force.

The Committee intends that the Task Force's recommendations and
the Department's regulations ensure that all residents of public
and assisted housing will enjoy peaceful, safe and living
arrangements. Further, the Committee intends that the Task
Force's recommendations and the Secretary's regulations, provide
guidance that is additional to and consistent with the
Department's existing Fair Housing Act Amendments Act
regulations, issued in January 1989, and the existing federal
lease and grievance procedures. The Committee encourages the Task
Force to review the model screening and occupancy package
promulgated in 1991 by the Council of Large Public Housing
Authorities, as well as the procedures developed in connection
with Cason v. Rochester Housing Authority, 748 F.S. 1002
(W.D.N.Y. 1990).

The Committee bill places tight time frames on the issuance of
the Task Force's report with the final report due 6 months after
the Task Force convenes. Similarly there are tight time frames on
subsequent rulemaking, with the proposed rule required within 90
days of the final report of the Task Force and the final
regulations within 120 days. The Committee strongly believes that
the difficulty and the urgency of the issue dictate speedy
responses.

The Committee also is concerned that many management ``problems''
could have been avoided if PHAs and assisted housing managers had
accepted co-applications from handicapped or disabled families
and service providers or relatives who could be called in any
emergency situation. The Committee is aware that in Milwaukee one
service provider had offered to sign on the dotted line,
providing a contact, with a client seeking public housing as
insurance against any future problems, but the offer was denied.
The Committee bill provides for an assisted application where a
care giver, family member, friend or advocate would provide
pertinent information so that they could be contacted to provide
special care or to assist in resolving problems.

SUBTITLE D-AUTHORITY TO PROVIDE PREFERENCES FOR ELDERLY RESIDENTS
AND UNITS FOR HANDICAPPED AND DISABLED RESIDENTS IN FEDERALLY
ASSISTED HOUSING

The Committee is aware that the issue of mixed populations
extends to other federally assisted housing, including project
based section 8 built in the seventies and early eighties,
section 236 housing, section 221(d)(3) housing, and section 202
housing for the elderly, thought to a lesser degree. In many
cases these developments were built primarily for occupancy by
elderly families; the section 202 program is known as the section
202 housing program for the elderly. But over time as in public
housing, and because of section 8 assistance requirements, either
project based or loan management set-aside, there has been a
significant increase in application by non elderly disabled and
handicapped families. As in public housing, the mixing has
produced clashes in lifestyles, fear, dissatisfaction, and
resentment among the different populations. The Committee is
aware that the problem is particularly severe in section 8 new
construction and substantial rehabilitation developments.

However, unlike public housing, which can provide choices and
housing options, the owners of assisted housing have no such
flexibility. The Committee bill therefore provides a different
solution. The Committee bill permits owners of assisted housing
which was designed primarily for occupancy by elderly families to
provide a preference for elderly families, those over the age of
62. If there are insufficient elderly families, the owner may
give a secondary preference to near-elderly families, between the
ages of 50 and 62, who are disabled or handicapped. In the event
that there are insufficient elderly families or near-elderly
handicapped or disabled families to fill vacancies that occur,
then the owner is required to provide housing to any family
applying who is eligible for assistance.

If owners choose to provide preferences in conformance with these
provisions, the Committee bill requires owners to reserve for
disabled and handicapped families that are not elderly or
near-elderly, the lesser of (1) 10 percent of the units, or (2)
the higher of the percent which is occupied by such handicapped
or disabled families as of the date of enactment or January 1,
1992. The Committee does not intend that the 10 percent reserve
be considered a ceiling, should the waiting list reflect a
greater need or should the owner be able to provide appropriate
housing with supportive services to a greater number of persons
or families with disabilities or handicaps.

Nor does the Committee intend that owners or managing agents
change their marketing strategies in order to increase the
numbers of non-elderly disabled and handicapped residents in
their developments. If the projects currently (or as of January
1, 1992) have less than 10 percent occupancy by non elderly
handicapped or disabled families, the Committee does not require
that those numbers be raised. The Committee does not expect,
however, that all assisted housing that may serve persons with
disabilities and handicaps be registered or included in any
clearinghouse that is established. Further the Committee expects
that no applicant be dissuaded or refused a place on a waiting
list because of a disability or handicap or because the reserve
requirement is met or exceeded.

For the units reserved for non elderly disabled and handicapped
families, should there be insufficient disabled and handicapped
residents to fill any vacancies that arise, the Committee bill
provides that near-elderly handicapped and disabled families be
offered assistance, then elderly families. As in public housing,
no family can be evicted without good cause to achieve the
occupancy under the reservation or preferences. The Committee
bill further requires that federal preferences apply where
applicable within the separate groups of applicants.

The Committee intends that the provisions apply only to projects
developed primarily for occupancy by elderly families. In other
words, the housing developer must have expressed his or her
intent to create housing for elderly tenants at the time he or
she negotiated with HUD for federal financial assistance. The
Committee expects the Secretary to issue regulations to that
effect.

The Committee intends that these provisions apply only to
projects whose owners elect to establish preferences pursuant to
the provisions of the bill. The Committee is aware that many
owners, particularly owners of section 202 developments, are
simply not effected by the problems associated with mixed
populations. The Committee intends that those projects which do
not elect to be covered by the provisions of this bill may
continue to provide housing for the elderly without incurring any
obligation beyond that currently mandated by their specific
authorizing statutes to provide housing for both the elderly and
the non-elderly handicapped and disabled. The Committee is aware
that under the section 202/section 8 program, projects developed
for the elderly include 10 percent of the units which are
designed and designated for physically handicapped persons whose
handicap results in a functional limitation in access to and use
of the building. Owners are required to admit eligible
non-elderly as well as elderly physically handicapped persons to
such units. However, non-elderly physically handicapped persons
may only be admitted if the special features of the unit are
necessary based on the nature of the person's disability. As an
example, a non-elderly person with a mobility impairment
requiring a wheelchair or a walker would be eligible for such a
unit because of the need for the accessibility features of the
unit. A non-elderly person whose only disability is chronic
mental illness would not be eligible. Only persons or families
headed by a person 62 years of age or older would be eligible for
the other 90 percent of the units in a project for the elderly.
The Committee expects that these distinctions will be maintained.

Subtitle E-Service Coordinators for Elderly, Handicapped, and
Disabled Residents of Federally Assisted Housing

The Committee believes that another element of housing management
that may ameliorate some of the thorny and difficult problems of
mixed populations is the availability of service coordinators. In
NAHA, the Congress recognized the need for service coordinators
to assist managers of housing for the elderly in helping frail
elderly residents ``age in place'' and to preserve their
independence and the Committee bill extends service coordinators
to housing with mixed populations or with persons with
disabilities or handicaps and provides sources of funding for
those coordinators. The coordinators can be part of the
management staff or can be provided under contract to a service
agency, including a mental health council or alliance.

While the Committee bill provides funding for service
coordinators, the Committee is well aware that the full-time
presence of a responsible individual on site would also help
considerably in managing these properties. However, the Committee
also is aware of the funding limitations. By providing funding
for service coordinators, the Committee does not intend to
preclude tenants as members of tenant councils from serving as a
responsible full-time presence to respond in crisis situations.

The Committee bill also provides that in developing a services
coordination program, the housing authority should consult with
the tenants, tenant groups, and on site managers.

The Committee is aware that many managers of public and assisted
housing and advocates and service providers for the elderly and
disabled and handicapped families have stated that supportive
services and service coordinators could prevent problems that
might arise from mixed populations. The most frequent complaint
about persons with disabilities and handicaps residing in
buildings along with the elderly is that they simply forget to
take their prescribed medication or out-patient counselling and
become disruptive. A service coordinator could provide the case
management services necessary to prevent or at least quickly
resolve such disruptions.

To assist housing authorities in fulfilling their
responsibilities to secure supportive services for their tenants,
the Committee expects the Secretary to circulate copies of model
collaborative agreements between service providers, such as
mental health agencies or case management agencies, and housing
authorities. The Committee is aware that several housing
authorities have already successfully entered into such
agreements.

Finally, the Committee intends that the service coordinators and
services provided conform to the extent applicable with the
revised congregate housing services program adopted by the
Congress in NAHA. The Committee expects that these programs would
be adapted to address the specific needs of the special
populations served.

                 Subtitle F-General Provisions

Comprehensive housing affordability strategies

The Committee intends that this comprehensive approach to the
issue of mixed housing will result in an expansion of the
affordable housing stock for both elderly residents and disabled
and handicapped residents. Therefore, the Committee bill amends
the requirements of the comprehensive housing affordability
strategy (CHAS) which was adopted as part of NAHA and the HOME
program to require that the CHAS describe in detail the nature
and extent of housing and special needs of elderly, handicapped,
and disabled families. The Committee believes that including
these needs in the CHAS will enable communities to better plan
for meeting the needs of such families through the HOME program
and through public housing or housing developed with the low
income housing tax credit even though the latter two programs are
not covered by the CHAS. The Committee expects that the CHAS will
be integral to the development of a PHA's allocation plan as
well. Further the Committee urges the Committee on Ways and Means
with jurisdiction over the low income housing tax credit to
consider requiring states to set aside a portion of the credit
allocation or, at a minimum, to require states to consider the
need for low-income housing for the handicapped and disabled in
establishing state allocation plans required for the low-income
housing tax credit.

Clearinghouses

The Committee bill requires that the Secretary enter into
agreements with agencies, including local and state housing
agencies, tax credit allocating agencies, service providers, or
local Area Agencies on Aging which can accumulate data and
disseminate information regarding the availability of affordable
and appropriate housing for elderly, disabled, and handicapped
families. The clearinghouse would also be able to refer families
to owners of affordable housing.

The Committee expects that the clearinghouses would establish
collaborative relationships with all low-income housing advocates
and providers in the community, including shelters, nonprofit
advocacy agencies, and government offices to ensure that it
maintains current and usable data for housing providers and for
persons seeking housing. The Committee is aware that there is
evidence that federally-assisted multifamily housing for families
contains a large number (10 to 15 percent or more) of efficiency
and one bedroom units for which persons with handicaps and
disabilities do not apply. In some instances, it may be that
handicapped and disabled families are unaware that they are
eligible for such housing. The Committee expects that the
clearinghouses will make all affordable housing opportunities
known to all prospective residents.

                    TITLE VII-RURAL HOUSING

Program authorizations for fiscal year 1993

Title VI reauthorizes for FY 1993 the rural housing programs
administered by the Farmers Home Administration (FmHA), including
the section 502 direct and guaranteed single family program, the
section 504 home repair loan and grant program, section 514/516
farm labor housing loans and grants (including the migrant and
homeless program), the section 515 rural rental housing program,
and the section 533 rural housing preservation grant program.
Also reauthorized are provisions established in the NAHA
including the deferred mortgage program, and security grant
program, the underserved areas program which includes colonias
and the nonprofit set-aside. Insured and guaranteed loans under
this title are authorized in an aggregate amount of $2.305
billion, with $695.6 million authorized for the costs of such
loans. Grant programs and rental assistance are authorized in the
aggregate at $545.6 million.

The Committee continues to be concerned that rural areas of this
nation suffer from a critical shortage of decent, safe, and
sanitary affordable housing in both single family and rental
housing. The more remote the area, the greater the shortage.
While the urban areas are plagued by overcrowding and to a lesser
degree, substandard housing, the rural areas are plagued by
physically deficient or substandard housing. According to the
report, ``A Place to Call Home,'' 22 percent of the poor families
in rural areas occupied substandard housing, typically without
indoor, safe and potable water and sewer facilities, as compared
with 19 percent of poor families in the central cities and 13
percent in the suburbs. Housing deficiencies in the rural areas
are more likely to cause health problems and are more costly to
repair than in urban settings.

Although the Committee bill does not include significant
increases in funding for the FmHA housing programs because of
overall budgetary constraints, the Committee bill makes a number
of improvements in existing programs to ensure that the programs
are well targeted and that the funds can be spent expeditiously
and effectively.

Community land trusts

The Committee bill codifies provisions for financing single
family homes under the section 502 program on community land
trusts and codifies the recapture provisions for housing on
community land trusts. The Committee is aware that there has been
some confusion and lack of consistency for homebuyers on
community land trusts. While there has never been any doubt that
homes on trust lands could be purchased, there have been delays
simply because the eligibility of such homes has not been in
statute. Implementation of the recapture provisions has been on a
case by case basis, with no explicit method of calculating the
amounts to be recaptured. The Committee bill provides that FmHA
shall calculate appreciation of properties on trust land
according to the agreements between the borrowers and the land
trust. The Committee intends that low and moderate income
families who purchase homes on community trust land are treated
similarly to those who do not.

Maximum income of borrowers under guaranteed loans

The Committee bill raises the income limit under the section 502
guaranteed loan program to 115 percent of median income. Current
law sets the income limit at 100 percent of median income for the
area. The guaranteed loan program is predominately a moderate
income housing program which relies upon conventional lenders.
The Committee is concerned that restricting the income limit for
eligible borrowers to the median income of the area will clearly
inhibit the success of the program. A wide range of witnesses
including families, lenders and builders involved in the program,
expressed similar concerns. Their testimony further indicated
that few low- and very low-income families can either qualify for
a guaranteed loan or can find homes which are affordable at their
incomes in rural areas. The Committee believes that this income
restriction is one reason for the minimal usage of the guaranteed
loan funds as of April 30 of this year (only 13.5 percent of the
funds have been obligated).

The Committee intends that the guaranteed loan program serve
moderate income families, those between 100 percent of median and
115 percent of median, and that the direct loan program continue
to serve the low- and very low-income families whose housing
needs cannot be met in the conventional market, with or without a
guarantee.

Remote rural areas

The Committee bill adds Indian trust land or tribal allotted land
to the definition of remote rural areas for the purpose of
eligibility for grants that provide the difference between
appraised value and the cost of construction. It also adds Indian
trust land or tribal allotted land to the definition of areas in
which FmHA may not refuse to make loans on the basis of remote
location. The Committee is aware that FmHA has provided little,
if any, financing for single family homes on Indian trust land or
tribal allotted land. In NAHA, Congress removed a major obstacle
to financing homes on trust lands by providing special provisions
for disposition of security interests in trust land in the event
of default. The remote location of tribal land often presents a
second obstacle because FmHA often finds that homes in Indian
country will not provide security for the FmHA loan because of
the home's remote location. The Committee intends to encourage
FmHA participation on trust or tribal allotted land with this
provision.

Designation of underserved areas and reservation of assistance

The Committee bill reauthorizes the underserved areas program and
assistance, providing an amount equal to 5 percent from the
appropriations for specified housing programs for FY 1993.
Although the Committee is aware that many counties which include
tribal allotted or Indian trust lands already are eligible for
assistance under the underserved areas program, the Committee
bill provides that in each fiscal year not less than 5 counties
or communities that contain tribal allotted or Indian trust land
must be on the list of 100 underserved areas. The Committee is
concerned that FmHA assistance in Indian country is too limited,
particularly when the lack of decent affordable housing in such
areas is reaching crisis proportions.

The Committee also is aware that the definition of colonias that
was included in the underserved areas provisions is too
restrictive. States that do not designate colonias can deny
assistance to areas that otherwise would be eligible simply by
refusing to designate the areas as colonias. Therefore, the
Committee bill strikes the requirement that states must designate
colonias for such areas to be eligible for assistance.

Rural housing voucher demonstration

The Committee bill extends the 7500 unit rural housing voucher
demonstration for FY 1993 and strikes the restriction that it
operate in only five states. The Committee is aware that the
Administration proposed a permanent voucher program to replace
the demonstration, which was in place during fiscal years 1988
and 1989. The Committee is aware that HUD and FmHA developed and
executed a successful rural housing voucher initiative in 13
states using section 8 housing vouchers. The Committee also is
aware that FmHA proposes the permanent program to be used in
states where there are so called ``soft markets'', i.e. where the
issue is affordability not availability of housing and where
there are vacancies in section 515 projects. However, the
Committee continues to be concerned that those communities are
few and far between and that rural vouchers as a permanent
program hold little promise for meeting the considerable
affordable housing needs in rural America. The Committee does not
intend for a rural voucher program to become a substitute for the
section 515 rural rental housing program.

Rental housing loans

The Committee bill extends the loan authority under the section
515 rural rental housing program through September 30, 1993, and
makes a number of important changes to the program to improve its
operation.

Development Costs.-The Committee is concerned that as state and
local governments seek additional revenue to provide
infrastructure, improvements, and services, more and more
communities have imposed fees and charges on developers to cover
those costs that previously were covered by real estate and other
taxes, individual assessments, and federal payments. These impact
fees which are essential to any housing development include such
items as school assessments, transportation taxes, environmental
permits, and road fees. The Committee is aware that rural housing
development in California is particularly hard hit by the
imposition of fees and charges that were not considered when the
rural rental housing program was enacted. Therefore, the
Committee has expanded the definition of development costs under
the mortgage to include such fees and charges that are essential
for development and building permits and that are imposed by the
local or state governments.

However, the Committee does not intend that charges and fees
imposed by low-income housing tax credit allocating agencies be
included as development costs. Unlike the full appraised value of
land and buildings which are essential to development and
therefore are eligible development costs, such fees are imposed
only if the sponsor applies for the tax credit and are not
integral to the development process.

The Committee is aware that the FmHA has recently proposed a
regulation which limits the value of land contributed as equity
to only three percent of the development cost regardless of its
appraised value. The Committee recognizes that such a limitation
is an effort, where possible, to increase the equity requirement
imposed by law on limited profit sponsors. If the Committee
intended that limited profit sponsors contribute equity in excess
of three percent of the development cost, the Committee would
have provided for additional equity in statute. The Committee
expects that the full appraised value of land be considered as an
eligible development cost.

Coordination of loans and rental assistance payments.-The
Committee bill also addresses the lack of coordination of rental
assistance with the obligation of funds for rural rental housing
developments. The Committee is concerned that section 515
sponsors are never certain of how much and when rental assistance
will be available to projects that are proposed. The bill
provides surety that rental assistance needs and market demand
will be considered when FmHA reviews applications for loans and
that rental assistance contracts will be coordinated with loan
obligations, subject to appropriations. In many cases rental
assistance is crucial to the feasibility of rental projects and
without some certainty that rental assistance needs have been
reviewed and that rental assistance will be available, sponsors
are not likely to submit applications for rental housing.

Low income housing tax credit.-The Committee recognizes that the
low-income housing tax credit also is critical to the feasibility
of rural rental housing projects and that without it many strong
and capable developers would simply not participate in the
program. In the Housing and Community Development Act of 1987,
the Congress added section 515(p)(4) to the Housing Act of 1949
to encourage and facilitate the use of the low-income housing tax
credit with rural rental housing projects. At the same time, the
Congress recognized that in certain rare situations to protect
the security interests of FmHA, the Secretary of Agriculture
should be able to require that ``over income'' tenants be
provided housing where vacancies exist for more that six months
and the project is financially troubled.

However, this provision was not intended to stand as a roadblock
to tax credit deals. The Committee is aware that on November 5,
1991, FmHA issued a notice that suggested that any loan with tax
credit covenants which require occupancy by income eligible
tenants include an addendum which gives the FmHA the authority to
require occupancy by non income eligible tenants if there are
vacancies for six months which ``threaten the financial viability
of the project'', notwithstanding any other covenants or
provisions in law. Such an addendum virtually negates the
requirements of the tax credit allocating agencies and the
Internal Revenue Service and disregards the clear intent of the
Congress in section 515(p)(4) of the Housing Act of 1949, as
amended in 1987. It simply uses the discretionary exception in
law as an excuse to nullify required tax credit covenants and
reject tax credit closings.

The Committee is aware that in the FY 1992 Agriculture and
Related Agencies Appropriations Act, Congress, to counteract the
FmHA notice, reaffirmed its intent to encourage the use of tax
credits with section 515 loans. However, the Committee is
concerned that the reaffirmation will not be sufficient to
forestall any future attempts to effectively curtail the use of
the low-income housing tax credits in conjunction with section
515 rural rental housing loans. The Committee recognizes that
such efforts will have a chilling effect on the production of
affordable renal housing in rural areas. Therefore, the Committee
bill strikes the exception clause in section 515(p)(4) to prevent
this section from being use to thwart the clear Congressional
intent to encourage the coordination of the rural rental housing
program and the low income housing tax credit.

Use of set-aside funds.-The Committee bill extends the nonprofit
set-aside of section 515 funds for FY 1993. It also strikes the
prohibition against nonprofit combining set-aside funds with
low-income housing tax credits and provides that nonprofits that
have been allocated tax credits under the tax credit set-aside
can combine section 515 set-aside funds with tax credits. The
Committee intends that the nonprofits that make use of these
combined funds be true nonprofits. They should not be shell
corporation wholly or partially owned or controlled by for profit
entities. The Committee expects the nonprofits to be the general
partners of any limited partnerships that may be created and
requires nonprofits which combine funds with tax credits to
provide the 2 percent initial operating capital from tax credit
proceeds. Nonprofit sponsored projects which do not use tax
credits should continue to be eligible for 102 percent mortgages
including the initial operating capital as currently eligible
under FmHA regulations. The Committee is well aware that
nonprofits have few sources of working capital and administrative
expenses and that tax credit proceeds can provide the revenue for
those necessary expenses.

Grants for costs of providing service coordinators.-The Committee
is aware that many of the section 515 developments have been
designed for occupancy by elderly tenants. As these tenants ``age
in place'', as many already have, the tenants may become more
frail and may require supportive services that are available
within the rural communities. The Committee bill provides for a
grant program funded at such sums as may be appropriated to cover
the cost of a service coordinator on site or retaining a service
coordinator from existing service providers. The Committee is
aware that area agencies on aging may be a resource for services
or service coordinators in rural areas.

Prohibitions regarding consideration in making loans.-The
Committee also is aware that current and proposed FmHA
regulations for the section 515 program appear to be
schizophrenic with regard to assistance in remote rural areas. On
the one hand, FmHA rarely makes loans in remote areas because of
perceived lack of sufficient security; yet in a proposed
regulation, FmHA would give preference points to projects 75 or
more miles from metropolitan areas. The Committee recognizes that
current regulatory selection criteria give preference points to
projects that are located 20 or more miles from urban areas.

That same proposed regulation also would give preference points
to projects located in areas where there are essential services,
such as schools, groceries, post offices, health services and
drugstores, which typically are not in remote rural areas.
Current regulations require that housing sites be located in
communities with essential services either within or within close
proximity to the housing site; however, no preference points are
given.

To avoid this apparent conflict, the Committee bill prohibits the
Secretary from denying assistance to projects solely because they
are located in excessively rural or remote locations; from
providing preference for assistance based on the availability of
particular essential services; and from making loan decisions
based on the geographic location of a project, except that
preference can be given for projects 20 miles or more from an
urban area. The Committee intends that FmHA develop selection
criteria which encourage housing developments in more rural areas
to the extent practicable; however, the Committee recognizes that
the selection of projects should be determined primarily on the
basis of market demand, not on arbitrary mileage or service
availability criteria. For this reason, the Committee believes
that the selection of projects should depend primarily on the
analyses afforded by the market studies.

Housing preservation grants for replacement of housing

The Committee is aware that in many very rural areas some housing
is simply not suitable for rehabilitation. It would be wiser and
more feasible to demolish the dilapidated housing and start over.
Many of the residents living in such structures do not have
sufficient income to start over on their own or to qualify for
the section 502 direct single family loan program. In such
limited instances, the Committee recognizes that the housing
preservation grant program, which has been used successfully to
provide creative financing mechanisms to rehabilitate housing,
should be made available for replacement housing. The Committee
bill provides that preservation grants, not to exceed $15,000,
can be used to replace housing that cannot be cost effectively
rehabilitated for owners whose incomes are too limited to qualify
for section 502 loans. The Committee expects that this
replacement housing option will provide assistance to families
who would otherwise continue to live in substandard housing
without this assistance, perhaps jeopardizing their health,
safety, and well being. The Committee does not expect that the
replacement housing grant will cover the total cost of
replacement, but that it can leverage other funds either from
FmHA, local lenders, or state housing finance agencies for the
balance of the cost.

                TITLE VIII-COMMUNITY DEVELOPMENT

Community Development Act Authorizations

The Committee bill provides a grant to the City of Bridgeport,
Connecticut to fund the redevelopment and expansion of its
economic base through the rebuilding of its waterfront. The
Bridgeport economy has suffered significantly in recent years,
culminating in the city's bankruptcy filing. The city has a vast
industrial corridor adjacent to its waterfront that is aged and
in need of major repairs for its revitalization. Neither the
state nor the City of Bridgeport can afford the cost of such
revitalization on their own. The Committee bill provides funding
for this revitalization effort but requires that the City of
Bridgeport and the State of Connecticut provide matching funds to
ensure local commitment to this much needed revitalization.

Unit of general local government

The Committee bill eliminates from current law the requirement
that the Department must approved multijurisdictional agreements
when two or more localities band together to submit a single
application for CDBG funds to states through the non-entitlement
part of the CDBG program. While the Department does have the
authority to approve the concept of using multijurisdictional
agreements as reflected in a state's final statement, the
Committee understands that a subsequent approval of specific
multijurisdictional agreements has usually been pro forma and has
not reflected a substantive review of the specific
multijurisdictional agreements. Apparently, HUD has felt, and the
Committee concurs, that such a review has not been necessary
because of interlocal cooperation agreement statutes at the state
level that govern these multijurisdictional agreements. The
Committee believes that review of specific multijurisdictional
agreements by HUD is unnecessary and that the authority and
responsibility to approve such specific multijurisdictional
agreements should rest with states operating within the framework
of the CDBG statute.

Retention of program income

The Committee bill changes the guidelines for the use of CDBG
program income to require that whenever program income is
generated by the use of CDBG funds, it must be used for CDBG
eligible activities. Currently, the use of such funds is only
restricted during the period the unit of general local government
is participating in a CDBG program. Once such participation ends,
under current law any program income received is no longer
subject to CDBG program requirements. The Committee believes that
requiring these funds to be used for CDBG purposes in perpetuity
best protects the Federal government's investment and best
ensures that low- and moderate-income persons will benefit from
these resources. The Committee bill also authorizes the Secretary
to exclude from consideration as program income any amounts
determined to be so small that compliance with the program income
guidelines would present an unreasonable administrative burden on
the entity responsible for enforcement of this provision.

State community development plan and report

NAHA established a requirement that requires all CDBG recipients
to have prepared and submitted to the Secretary a description of
its nonhousing community development needs and strategies for
meeting those needs. The Committee bill clarifies and expands on
this community development plan by requiring each State that
receives a grant from HUD to implement a computerized data base,
and to submit a report containing a summary of the community
development and infrastructure needs within the State and the
strategies to be used by the State to meet such needs in an
efficient and coordinated matter. Currently, the information
required under the community development plan established in NAHA
is submitted both to the recipient's respective state government
and to the Secretary.

To ensure that this information does not simply lie dormant at
HUD, the Committee bill requires the Secretary to submit in its
annual report to Congress that uses information submitted in the
community development plans to describe the community development
and infrastructure needs in the United States, the strategies to
be used by the States to meet such needs in an efficient and
coordinated manner, and a strategy for the federal government to
assist States in meeting such needs.

The Committee believes that CDBG recipients should only be
required to submit plans and reports as necessary to achieve the
purposes of the CDBG program, and no more. Therefore, the
Committee intends that the completion of a community development
plan as established in NAHA and amended here, is sufficient to
meet the requirements that a grantee must certify that it has
developed a community development plan to receive a CDBG grant as
required in section 104(b)(4) of the Housing and Community
Development Act of 1974 (P.L. 93-383).

Eligible activity

The Committee bill raises the 15 percent CDBG public services cap
to 25 percent for fiscal years 1993 through 1997 for the City of
Los Angeles and the County of Los Angeles. This change will
provide the City and County with critically needed funds to
address both the immediate social service needs resulting from
the civil unrest that occurred in April, 1992, as well as the
pervasive and underlying causes of such unrest. These funds will
help fill the gaps created in program funding of various federal
programs.

Waiving the 15 percent cap for both the city and county of Los
Angeles will have no effect on the overall funding of the CDBG
program, and no new mandates are placed on other entitlement or
nonentitlement cities and counties.

The Committee believes that microenterprises may be an effective
tool to foster economic development in both urban cities and
rural communities. Microenterprise activities will employ five
people or less, one of which is the owner. Typically, a
microenterprise requires small, short-term working capital loans
for start-up money. Unfortunately, such lending can be
unattractive to commercial banks because the loan transaction
costs are high relative to the interest and fees received from a
small loan. Further, the microenterprise borrower generally has
few assets that can serve as collateral and often has no credit
history. Because of these obstacles, the Committee believes that
a stronger commitment to supporting such ventures is necessary.
The Committee intends that, by making microenterprises an
eligible activity within the CDBG program, the Department and its
grantees will become more familiar with microenterprises and will
be better able to offer support to such ventures.

The Committee bill makes the provision of assistance to
universities or colleges carrying out activities otherwise
eligible under the CDBG program, eligible activities. Such
activities are also included in the section 107 special purpose
grants. Many states and communities simply do not realize that
sources of expertise may be found in the colleges and
universities located in their jurisdictions. The Committee
intends that these provisions will foster the creation of
partnerships between state and local governments and universities
and colleges.

Direct homeownership activities

In the 1990 housing legislation, the Committee made direct
homeownership activities eligible under the CDBG program. This
change recognized the fact that the newly created HOME program,
which would be the most direct route for such assistance, would
not be fully implemented in the first couple years of its
existence. Since HOME is still not fully operational, the
Committee extends the authority to conduct homeownership
activities under the CDBG program for an additional year.

Special purpose grants

The Committee bill provides that, in fiscal years 1993-1998, any
unit of general local government affected by the proposed or
actual closure of a military installation, by the cancellation of
a Defense contract, or by a publicly-announced planned major
reduction in Defense spending that would directly and adversely
impact the community and will result in the loss or 1,000 or more
full-time Defense employee positions over a five year period
would be eligible to receive a special purpose grant for any CDBG
eligible activities. While these communities may not qualify
under typical measures of distress, the Committee believes that
it is important to recognize the unique distress that such
communities will face as Defense reductions are implemented and
to take measures to aid in the transition from Defense dependent
to more economically diverse communities. The Committee bill
provides an opportunity for such impacted areas to plan for
economic diversification and adjustment activities.

Assistance for Colonias

The Committee bill expands the types of activities eligible under
the Colonias set-aside created in the NAHA and changes the
procedure for designating areas as colonias. The experience of
the Committee since the creation of this set-aside in 1990 is
that States and counties have been reluctant or unable to
identify and designate colonias for the purposes of this program.
Therefore, the Committee changes the designation process so that
a colonia can be qualified for this program without regard to a
State or county action. Further, to ensure that real improvements
can be made in these communities, eligible activities have been
expanded to include and limited to the acquisition, construction,
reconstruction, rehabilitation or installation of public water or
sewer projects necessary to furnish water and sewage services to
persons of low- or moderate-income. Previously, only planning
activities could be undertaken with the assistance provided by
this set-aside. The provision in the Committee bill ensures that
the planning activities that are funded and undertaken will be
implemented.

        Subtitle B-Other Community Development Programs

Community development plans and computerized database

Due to competing federal priorities, the nation's cities and
infrastructure have been neglected by the federal government for
the past decade. The resulting decline is evident in collapsing
bridges, crumbling roads, inadequate housing, and other community
development problems. As the Committee endeavors to authorize
programs which will address these needs, it becomes increasingly
important that the magnitude of these needs are known. As
indicated above, NAHA established a requirement that requires all
CDBG recipients to have prepared and submitted to the Secretary a
description of its nonhousing community development needs and
strategies for meeting those needs. To assist in the compilation
and coordination of this critical community development
information, the Committee bill includes a program to establish a
computerized database of community development needs. Under the
program, the Secretary is required to develop a computer software
program to utilize computer technology to inventory community
development needs, and to coordinate strategies for meeting such
needs within and among states. This system will be available to
the states upon request. Once in use, this database will serve as
a planning tool not only for states and localities, but also for
Congress and the federal government to identify existing
community development needs.

Neighborhood development program

The Neighborhood Development Demonstration program was created to
increase neighborhood involvement in community development and to
raise local funds for such activities. This demonstration program
has proven that nonprofit groups can raise private matching funds
from within their neighborhood as well as conduct successful
projects that provide significant benefits to low- and
moderate-income persons. The success of this capacity building
demonstration program is all the more significant in light of the
fact that most grantees have only 3-5 staff and are located in
very poor neighborhoods. The Committee concurs with HUD's final
evaluation of this program which states that the objectives of
the program have been realized. Therefore, the Committee has made
this demonstration into a permanent program. In recognition of
the role that the late Senator John Heinz played in initiating
this program, it has been named in his honor.

In keeping with the growing recognition that banking activity is
key to neighborhood revitalization, the Committee has adopted an
important change: neighborhood groups working closely with
financial institutions will receive a preference for funding.
This coordinates the Neighborhood Development Program with the
Bank Enterprise Act, authorized in the 1991 omnibus bank bill,
which emphasized the need for community groups and banks to work
closely together.

The Committee emphasizes that this policy change does not effect
this program's current policy on where neighborhood groups
receive their neighborhood-based funding.

The Committee believes that the ability of neighborhood groups to
raise funds from all sources in the community is critical and
that no one source is better than any other source. Indeed,
raising money from a variety of local businesses, organizations
and residents ensures broad-based support for the project being
undertaken and increases the likelihood of long-term commitment
by the community to such activities. However, this statutory
change recognizes the view that neighborhood groups working with
banks will be more effective in redeveloping a neighborhood than
those groups that do not work with banks.

Study regarding housing technology research

The Committee recognizes that federal, private and public
involvement in the development of housing technology research
offers significant benefits by providing more affordable housing
and in the creation of jobs due to better U.S. competition in
this field as compared with other nations. The Committee feels
that current public and private investment in this field is
smaller in comparison to federal research dollars in other areas,
and as a result, substantial economic and social gains are being
lost. The Committee believes that it is important for the federal
government to acquire greater understanding and research in this
field; therefore, the Committee bill requires the Department to
conduct a review of all resources currently applied to basic
research in housing technology and to assess how that investment
stacks up against what other countries are providing .

Enterprise zones

The Committee bill contains a provision that renews the
designation process for Enterprise Zones contained in Title VII
of the Housing and Community Development Act of 1987. The bill
renews the Banking Committee's commitment to enterprise zones and
issues affecting economically distressed areas, in keeping with
the Committee's legislative responsibility for all HUD programs.

         TITLE IX-REGULATORY AND MISCELLANEOUS PROGRAMS

Adminstration of Department of Housing and Urban Development

Special assistant for Indian and Alaskan Native programs-The
Committee bill includes a provision that specifies duties and
functions for the Special Assistant for Indian and Alaska Native
Programs. The Committee is aware that the Special Assistant
position has been in the law since 2989; however, at this time
the Indian housing programs are administered through an office
under the Assistant Secretary of Public and Indian Housing and
the Indian CDBG program is administered by the Assistant
Secretary for Community Planning and Development in Washington,
DC. In the regional offices, the two programs are combined in a
division of Indian programs which has served Indian areas well.

The Committee bill provides for the same centralization of
administration at HUD headquarters, so that the Indian housing
program, the Indian portion of HOME, the resident initiatives
programs for Indians, the Indian CDBG program, and any other
programs that are specifically designed for Indian areas can be
coordinated in one office. The responsibilities include
administering and coordinating all Indian housing and community
development programs for Indian housing authorities and tribes,
and directing, coordinating and managing any regional HUD offices
that administer Indian programs. The Committee bill also requires
the Secretary to include a description of the extent of housing
needs and community development needs of Indian families and
tribes and the activities of the office and the Department in
meeting those needs in HUD's annual report.

The Committee does not intend that new staff be hired to assume
these functions and duties. The Committee expects staffing for
the office to be transferred from other offices in HUD no later
than one year after enactment and, to the extent possible,
preference be given to individuals who are Indians. The Committee
believes that this position should provide greater coordination
effectiveness, and clarity to Indian housing and community
development programs.

Interest rate reductions for HUD-held assigned mortgages-The
Committee bill requires the Secretary to reduce interest rates on
HUD-held assigned mortgages when necessary to prevent
foreclosure. This authority has long been available to the
Secretary but has remained unutilized. A HUD Inspector General
audit on October 30, 1989, entitled, ``Management of HUD's
Assigned Single Family Inventory,'' found that HUD required
thousands of mortgagors in HUD's Mortgage Assignment Program to
pay more than the current market rate. The audit stated that ``by
lowering the mortgage rates to a more reasonable level, these
mortgagors would have an increased chance to eventually pay off
accrued delinquencies and mortgage principal.'' The difference
between a 13% interest rate and a 10% interest rate on a $50,000
mortgage is nearly $100 on each monthly mortgage payment. The
reduction in such payments will in most cases forestall
foreclosure. The provision in the Committee bill will compel the
Department to make such adjustments. The Committee bill permits
the Department to make an adjustment to the interest rate if the
borrower's circumstances change and the borrower becomes able to
afford higher monthly payments. However, to ensure payment
stability for the borrower, the Committee bill only permits the
Secretary to exercise this interest rate adjustment once.

Negotiated Rulemaking-While the Committee recognizes that many of
the programs administered by the Department are not statutorily
subject to the formal rulemaking requirements of the
Administrative Procedures Act (APA) because they are grant or
loan programs, both the Department and Congress have generally
relied on the procedures for rulemaking provided for in the APA
in developing such programs. The Department explicitly provides
for such procedures at 24 CFR part 10. This reliance grows from a
basic sense that the open and consultative nature of the APA
procedures provides the best forum in which to develop the
complicated and important programs administered by HUD.

The Committee recognizes that the development of a proposed rule
can provide an additional point at which this open and
consultative process can take place. To this end, the bill
provides that the Department must whenever possible use the
Negotiated Rulemaking Act of 1990 (P.O. 101-648) to develop
proposed regulations.

This Act was enacted in part to reduce the adversarial nature of
the rulemaking process and thereby reduce the expense and time
associated with rulemaking. The Act provides for the
establishment of a committee composed of interested parties that
would meet to develop a proposed rule. Any proposed rule
developed by such a committee is then considered by the agency
convening the committee for purposes of publication in the
Federal Register as a proposed rule. The Committee believes that
the Negotiated Rulemaking Act is particularly appropriate in
circumstances involving the management and funding of public
housing and could be of use in implementing the section 8 merger
and technical rewrite provided for in Title I of this bill. The
Committee urges the Department to use this mechanism whenever
possible and feasible.

The Committee notes that in several places in this bill specific
use of negotiated rulemaking procedures are required and that in
other provisions specific rulemaking requirements are dictated.
The failure of the rulemaking requirements to mention negotiated
rulemaking procedures is not meant by the Committee to preclude
the use of such procedures to develop the proposed rules required
by the specific rulemaking requirements.

Participant's consent to release of information

This amendment prevents the Department from requiring the release
of information by third parties as a condition of receiving
housing assistance unless the requested consent for information
is appropriately limited as to time, relevance and necessity and
such request is in compliance with the Privacy Act of 1974. The
Committee was alerted in March that the Department had developed
an Authorization Form for the Release of Information, HUD-9886,
which must be signed by section 8 applicants. Without a
signature, housing assistance could be denied or terminated.

Several tenants in a Minnesota Housing Finance Agency complex
refused to sign Form HUD-9886 because of their concerns that the
form violated the Privacy Act by allowing managers of HUD housing
programs to request any information at any time of any person or
organization on every tenant without their knowledge. The
management responded by notifying the tenants that their housing
assistance would be terminated.

This form is the result of a provision contained in section 904
of the Stewart B. McKinney Homeless Assistance Amendments Act of
1988 (P.O. 100-628). This section allows the Secretary, a PHA, or
an owner responsible for ensuring eligibility under a HUD program
to obtain a participant's consent to obtain salary and wage
information from third-parties. The provision also allows HUD and
PHAs to seek wage and unemployment benefit information from the
State agencies that administer unemployment benefits.

The Committee is concerned with the validity of Form HUD-9886 in
that the information requested may go beyond the intent of the
McKinney Act Amendments and may be in violation of the Privacy
Act. In adopting this provision, the Committee intends to suspend
all adverse actions, including tenant evictions, that could
result from a failure to sign Form HUD-9886.

The Committee intends that the Department develop a new form
pursuant to Section 904 and consistent with the Privacy Act. The
form itself should give tenants and applicants a clear statement
of their rights relative to any information obtained and the
consent obtained should be effective for no more than a year.
Tenants and applicants should also be permitted to review any
files maintained by the PHA or owner and to request that any
errors in the file be corrected. Nothing in this provision
prohibits PHAs or owners from obtaining relevant financial
information directly from applicants or existing tenants.

Fair housing initiatives program

The Committee held hearings in May, 1992, to review the
disturbing findings of a Federal Reserve study on the 1990 Home
Mortgage Disclosure Act (HMDA) data. Although the this data
indicated that racial minorities are rejected for mortgage loans
more than twice as often as whites, and that a poor white
applicant is more likely to be granted a mortgage than a wealthy
black applicant, the four banking regulatory agencies
collectively could come up with only one single example of a fair
lending violation they had referred to the U.S. Department of
Justice for prosecution.

While the Committee is sadly aware of the prevalence of race
discrimination in rental housing and believes that efforts to
root out such behavior should be redoubled, the Committee is
equally concerned about mortgage discrimination suggested by the
recent HMDA data. Sanctioned by the federal courts, the use of
testers in mortgage lending is one of the more promising tools
for detecting and remedying mortgage discrimination. The
Committee is aware that using testers in rental housing has
proven eminently successful in prosecuting racial discrimination
and is pleased that the Department has recently issued a Notice
of Funding Availability to conduct a major testing project on
mortgage lending practices under the Private Enforcement
Initiative of the Fair Housing Initiatives Program.

The Committee has increased funding for FHIP to $6.5 million for
FY 1993 and $6.3 million in FY 1992. This increased support for
FHIP is especially appropriate given the recent HMDA data and the
lackluster enforcement of regulatory agencies at the federal
level. The Committee's intent is that any increased funding will
build upon the promising use of racial testing in mortgage
lending in exposing discrimination. The Committee is particularly
interested in testing programs and activities where credit and
net worth criteria have been isolated as non-controlling in the
denial of mortgage applications.

National Commission on Manufactured Housing

The National Commission of Manufactured Housing was established
in section 943 of NAHA to develop recommendations for modernizing
the National Manufactured Housing Construction and Safety
Standards Act of 1974 (P.L. 93-383). The Committee bill includes
several changes to the Commission's authorizing provisions to
ensure that the Commission will be able to properly carry out its
important public charge. First, the bill authorizes for FY 1993
such sums as may be necessary for the operation of the
Commission. The Committee intends the Commission should have
adequate funds, not to exceed $1 million, to carry out its
function. Second, the Commission has been given a firm
termination date of October 1, 1993, to eliminate and possible
confusion as to the life of the Commission. Under current law,
the Commission would expire after 9 months following the
appointment of all the members but it was unclear whether a
Commission's interim resignation would delay the full appointment
date for purposes of the 9 month expiration date. Third, the
Commission has been given the clear authority to hire staff
without having to abide by a cumbersome contracting process set
up in existing law.

The Committee has been frustrated by the inability of the
Commission to hold an organizational meeting and begin its
long-delayed work. The Committee's firm intent is that the
Commission begin its work with all deliberate speed and that the
Department and the General Services Administration provide
whatever resources or assistance may be necessary without delay.
The Committee is particularly disturbed that, for whatever
reason, the Commission has been prevented from using duly
authorized and appropriated money in this fiscal year.
Consequently, the Committee bill provides that any amounts
appropriated for the Commission shall remain available until
expended.

Real Estate Settlement Procedures Act of 1974

The Committee bill amends the Real Estate Settlement Procedures
Act (RESPA) of 1974 (P.L. 93-533) to make clear that for purposes
of RESPA, a settlement service includes the origination of a
loan. The bill would also make clear that RESPA applies to second
mortgages and mortgage refinancings.

This mortgage origination issue is before the Committee because
of the Graham decision. United States v. Graham Mortgage Corp.,
740 F.2d 414 (6th Cir. 1984). In that case, Graham Mortgage
Corporation was accused of violating the anti-kickback provisions
of section 8(a) of RESPA by charging a developer fewer ``points''
on mortgage loans than it customarily charged in exchange for the
developer's referral to GMC of other mortgage loan customers.
Although the Sixth Circuit rejected the government's argument by
reasoning that the statutory definition of settlement services
did not clearly extend to mortgage lending procedures, the
Committee believes that mortgage lending must be included as a
settlement service to preserve the effectiveness of RESPA as a
consumer protection statute.

The Committee bill applies the provisions of RESPA, including the
disclosure and the anti-kickback rules, to second mortgages and
to refinancings of mortgages. The Committee included second
mortgages within RESPA because of the unfortunate potential for
fraud and abuse among the elderly and inner-city homeowners. The
Committee heard disturbing testimony at a May, 1991, hearing in
Boston that indicated some secondary mortgage lenders,
home-repair specialists and banks had allegedly taken advantage
of elderly and minority homeowners by making loans with rates as
high as 25% with balloon payments due in three to five years of
the unpaid principal plus interest. The Committee believes that
some homeowners might have been spared foreclosure and bankruptcy
if comprehensive RESPA disclosures had been required during the
negotiation process and if the anti-kickback provisions had been
in place.

Finally, the Committee is concerned that the recent surge in
refinancing of existing mortgages may also trap unsuspecting
consumers with unexpected closing fees not adequately disclosed
during negotiations. The practical effect of the lack of
disclosure according to consumer experts and some mortgage
industry executives is to allow unscrupulous lenders or brokers
to lure consumers desiring to refinance their application with
low rate quotes and verbal estimates of credit fees only to
require significantly higher fees at the settlement table. The
Committee is aware that in some cases these higher fees can cause
a homebuyer refinancing a mortgage to pay $1,000 or more in
additional fees at closing.

Disclosures under the Home Mortgage Disclosure Act of 1973

On May 7, and May 14, 1992, the Subcommittee on Housing and
Community Development and the Subcommittee on Consumer Affairs
and Coinage held joint hearings on the implications of the Home
Mortgage Disclosure Act (HMDA) data released in the Fall of 1991.
Among other issues, the hearing examined the disparities between
the percentage of home loans granted to minorities and
non-minorities as revealed by the HMDA data. The data indicated
that minorities were rejected more than twice as often as
non-minorities. Also examined was the usefulness of such data in
assessing and enforcing lenders' obligations under several
anti-discrimination and fair lending statutes. The data indicated
that the biggest problem areas were large money center banks and
regional `super' banks. Furthermore, the hearings highlighted
problems associated with the late release of the HMDA data to the
public and the format used to disseminate it. The Committee bill
makes a number of changes to HMDA to ensure that the public
receives useful and timely information regarding the lending
records of financial institution. The Committee believes this
will assist in efforts to enforce fair lending laws.

This section requires financial institutions to make available to
the public, upon request, their loan application registers
(LARs). Certain information would be removed from the LAR for
privacy purposes. Furthermore, this section allows for the LAR
information to be presented by depository institutions without
editing or compilation and in a format presently used by the
institution. While not mandated by this provision, the public
availability of LARs by census tract order would significantly
add to their utility as a research tool, as well as enhance their
usefulness to institutions maintaining such information. It is
the sense of the Committee that the Federal Financial
Institutions Examination Council (FFIEC) should take the
necessary steps to facilitate the availability of LARs by census
tract order.

In addition, disclosure statements for individual institutions,
which are compiled by the FFIEC, must be available by depository
institutions to the public, upon request, within three business
days of receipt from the FFIEC. Statutory language requires that
each institution provide a clear and conspicuous notice to
accompany the data indicating that it is still subject to a
30-day final review period by the institution.

The intent of this section is to encourage the relevant federal
agencies to expedite the processing, analysis and dissemination
of the HMDA data and make it available to the public at the
earliest possible time. It is the Committee's intent that, in
meeting the new timetables as outlined in this section, the
federal agencies not compromise the quality of the data. The
FFIEC should make every effort to speed the processing of HMDA
data, consistent with the need for accurate and reliable data.

Temporary inapplicability of certification of limitation of
assistance for multifamily projects

The Committee is troubled that application of HUD's anti-subsidy
layering guidelines has literally curtailed multifamily
production. These guidelines were developed pursuant to section
102(d) of the HUD Reform Act of 1989 to prevent future windfalls
and abuses under the HUD assisted programs. Congress was
concerned that developers and sponsors of multifamily housing
projects were combining section 8 assistance, FHA insurance, the
low-income housing tax credit, and other federal, state, and
local assistance in projects in amounts that far exceeded the
amounts necessary for financial feasibility and an appropriate
return.

The Committee is concerned that HUD in promulgating the
guidelines has effectively established a system which duplicates,
in the case of low-income housing tax credit projects, the
analysis conducted by the tax credit allocating agencies as
required by the Internal Revenue Service. The Committee believes
that the guidelines also provide rigid standards and benchmarks
which do not take into account the variations among project
types, locations, and risks and therefore threaten the viability
of projects. The net effect of the application of these
guidelines is to reduce subsidies and mortgage amounts to the
point that many projects are no longer feasible and are simply
not worth the risk to developers.

Further, the Committee is concerned that there are interminable
delays in HUD's central office processing which have a similar
effect. The Committee believes that HUD's fervor in avoiding
scandal and abuse is simply killing any development at all.

The Committee is aware that HUD's own consultant has recommended
that the guidelines be revised to simplify the review process and
to make the standards conform to the tax credit allocator and the
IRS; however, HUD initially rejected that advice. And
consequently, the Committee bill includes a provision which
waives applicability of the guidelines through fiscal year 1994
so that HUD can be persuaded to act more reasonably and
responsibly with their guidelines. The waiver applies to any
development of five or more units with FHA insurance, HOME
assistance, McKinney Act assistance, and section 8 assistance for
which an application for assistance has been submitted to the
Secretary prior to September 30, 1994. The Committee understands
that HUD may be moving to change its policies and guidelines in
this area. The Committee is encouraged by this movement and will
be monitoring HUD's actions closely.

The Committee does not intend that HUD ever apply their
guidelines retroactively to projects that had received their firm
commitments and initial endorsements prior to passage of the HUD
Reform Act. Nor does the Committee intend that the Department
require participating jurisdictions under the HOME program to
apply HUD's rigid guidelines to HOME projects, although the
Committee does expect jurisdictions to provide only that
assistance which is necessary for each HOME project.

Reestablishment of solar bank

The Committee bill reestablishes the Solar Energy and Energy
Conservation Bank and authorizes such sums as may be necessary to
provide for the purchase and installation of residential and
commercial energy conservation improvements and solar energy
systems. The Solar Energy and Energy Conservation Bank was never
fully supported under the Reagan Administration and received only
one appropriation during those years. With this change, the
Committee establishes a renewed commitment to advancing solar
energy initiatives and reverses the neglect of the past
Administration.

Energy efficient mortgages

The 1990 housing legislation established an interagency Task
Force to create a uniform plan to make housing more affordable
through mortgage financing incentives for energy efficiency. The
Committee bill expands the scope of the Task Force to require
that it also determine whether notifying potential home
purchasers of the availability of energy efficient mortgages
would promote energy efficiency in residential buildings, and if
so, to recommend appropriate notification guidelines.

Economic opportunities for low- and very low-income persons

Federal housing and community development programs provide states
and local governments with a substantial amount of financial
assistance which in turn produces significant employment and
other economic opportunities. The Committee believes it is
imperative that such broad economic influence be wielded to
benefit low- and very low-income persons, particularly those who
are recipients of government assistance. The Committee bill
therefore requires that any entity receiving federal housing and
community development funds, directly or indirectly, make their
best efforts, consistent with existing federal, state, and local
laws and regulations, to give such low- and very low-income
persons, the opportunity to participate in any training and
employment activities generated by any development assistance
provided and to give priority in the awarding of contracts to
businesses that provide economic opportunities for low- and very
low-income persons. With this provision, the Committee renews its
commitment to ensuring that such economic opportunities are
provided to low- and very low-income persons.

In doing so, however, the Committee does not intend to mandate
quotas or specific goals. Rather, the Committee intends that this
provision serves as a guide and a reminder for policymakers and
program administrators who implement federal housing and
community development programs that they must consistently use
their best efforts to ensure that these scarce federal resources
are directed to those most in need.

National American Indian Housing Council

The Committee bill authorizes such sums as may be appropriated
for the National American Indian Housing Council (NAIHC) for
training and technical assistance activities for Indian housing
authorities. The Committee is aware that last year in report
language accompanying the HUD-VA appropriations legislation, the
Congress directed HUD to provide $500,000 to NAIHC for carrying
out training and technical assistance with regard to management
and development for Indian housing authorities. Despite that
directive, HUD has only released $375,000 to NAIHC, starting in
April of this year. The Committee believes that this organization
has provided invaluable assistance to IHAs in establishing and
carrying out the Indian housing programs and a lack of a reliable
source of funding places them in jeopardy from year to year and
hampers their ability to provide critical services to IHAs.

The Committee believes that this organization has provided
invaluable assistance to IHAs in establishing and carrying out
the Indian housing programs and a lack of a reliable source of
funding places them in jeopardy from year to year and hampers
their ability to provide critical services to IHAs.

Study regarding foreclosure alternatives

The Committee recognizes that there were over 400,000 residential
foreclosures last year. The Committee is concerned about this
large number of foreclosures and in this study directs the
Secretary to evaluate alternatives to foreclosure.

The Committee intends that the report contain a detailed
description and assessment of each alternative to foreclosure. It
should also contain a statement regarding the intent of the
Secretary to use any authority available under the provisions of
section 230 of NAHA and section 7(i) of the Department of Housing
and Urban Development Act of 1982. The report should also contain
any recommendations of the Secretary for administrative or
legislative action to assist homeowners to avoid foreclosure and
any loss of equity in their homes that may result from
foreclosure.
In addition to the areas required by section (a)(2), the
Committee requests the Secretary to revise and analyze additional
mechanisms, if any, that could be applied at the federal level to
provide adequate safeguards to a mortgagor's equity in a property
when such property is secured by a federally-related mortgage.
Among the areas of interest to the Committee are the feasibility
of a one-time forbearance period on principal payments to
borrowers whose loan is three months or more in default; the
feasibility of requiring an appraisal of a homeowner's property
during the forbearance period to determine the fair market value
of the property as the basis for any deficiency judgment; and the
feasibility of achieving a fair market sale through foreclosure
by requiring that the property be professionally marketed,
including the appropriate advertising of the property and the use
of multiple listing and public auctions conducted by professional
private sector auction market specialists.

                 TITLE X-HOUSING PROGRAMS UNDER
          STEWART B. MCKINNEY HOMELESS ASSISTANCE ACT

Title X of the Committee bill contains the reauthorization of the
homeless programs under the Stewart B., McKinney Homeless
Assistance Act which are administered by the Department of
Housing and Urban Development (HUD). The Committee bill also
merges several existing HUD homeless programs into one Supportive
Housing program, creates a new demonstration program entitled
Safe Havens for Homeless Individuals and creates a new Rural
Homelessness Grant program to assist the homeless in rural areas.

The Committee bill represents the third reauthorization of the
HUD McKinney homeless programs since the Stewart B. McKinney
Homeless Assistance Act (P.L. 100-77) was first created in July
1987. The Committee also strongly believes that the HUD homeless
programs must continue to be reauthorized in order to assist with
the emergency needs of homeless persons throughout the United
States. The Committee also strongly believes that the McKinney
homeless program must be fully funded in order to address the
emergency housing and services needs of homeless Americans. The
Committee, however, maintains that these McKinney programs are a
band-aid approach to addressing the needs of the homeless because
these programs primarily are aimed at addressing emergency and
transitional housing needs and do not provide permanent housing
opportunities for the homeless. The Committee is concerned that
the reauthorization of the McKinney Act programs since their
introduction are viewed as the primary manner in which Congress
and the Administration seek to assist the homeless. The Committee
emphasizes that it does not view the McKinney homeless programs
as a panacea to assist the homeless, rather these programs assist
the homeless in an emergency fashion and do not address the
rudimentary cause of homelessness-the lack of permanent shelter.

The Committee bill authorizes a total of approximately $735.4
million for fiscal year 1993 for the HUD McKinney homeless
programs and such sums may be necessary for the new Rural
Homeless Grant program which will be administered by the
Department of Agriculture's Farmers Home Administration (FmHA).
The Committee bill contains the following funding authorizations:
$143.5 million for the Emergency Shelter Grants program; $187.2
million for the Supportive Housing program; $50 million for the
new Safe Havens for the Homeless Individuals Demonstration
program; $85.7 million for the Section 8 Assistance for Single
Room Occupancy (SRO) Dwellings program; and $268.9 million for
the Shelter Plus Care program.

Participation of homeless persons in McKinney homeless programs

The Committee bill amends each HUD McKinney housing program to
provide that project sponsors will utilize, to the maximum extent
practicable, homeless individuals and families in constructing,
renovating, maintaining, and operating facilities and in
providing services to the homeless under each of the HUD homeless
programs. The Committee bill also requires the participation of
homeless persons by authorizing HUD to require each program
recipient, that is not a state, to provide for the participation
of not less than one homeless individual or formerly homeless
individual on the board of directors or other equivalent
policymaking entity to the extent that these entities consider
policies and make decisions regarding facilities, services, or
other assistance of HUD-assisted recipients.

The Committee bill amends the following HUD homeless programs to
include these two provisions: the Emergency Shelter Grants
program; the Supportive Housing program; the Safe Havens for
Homeless Individuals Demonstration program; the Section 8
Assistance for SRO Dwellings program; and the Shelter Plus Care
program. The Committee also included these requirements in the
rural homeless housing assistance programs authorized in the
bill.

The Committee bill contains these two provisions to encourage
homeless and formerly homeless persons to participate in both the
development and operation of projects funded by HUD McKinney Act
programs and the policy making processes which govern these
projects. These provisions stem from the Committee's belief that
programs intended to serve homeless persons can benefit from the
advance and experience gained from people who have experienced
homelessness and who have a unique perspective on how to make
programs more responsive to the needs of homeless persons. The
Committee feels that these provisions will not only improve
federally assisted programs that assist the homeless, but will
play an important role in empowering homeless people.

The Committee intends that homeless and formerly homeless persons
employed through this provision will be paid comparable wages and
provided the same benefits as all other persons employed by a
given program.

The Committee has included as a program requirement that grant
recipients be required to provide for the participation of
homeless and formerly homeless persons on their decision making
boards. Should this prove to be overly burdensome, the Committee
intends that the recipient may request that the Secretary waive
this requirement and provide for participation through another
mechanism. However, if the waiver is granted, the Committee
intends that the recipient consult with homeless and formerly
homeless individuals in developing each program to assist the
homeless in order to obtain input from the homeless.

The Committee does not intend that the provision which requires
homeless or formerly homeless to participate in the recipient's
decision making process to mean that public housing authorities
(PHAs) must have on their commissions or boards, a homeless or
formerly homeless person. Rather, the Committee intends that the
PHA consult with homeless or formerly homeless persons in
developing applications under each of programs for which a PHA
would be an eligible recipient.

Termination of assistance

The Committee bill requires that a program recipient must provide
a due process procedure that recognizes the rights of individuals
and is established by the recipient if a homeless individual or
family violates program requirements and the recipient wishes to
terminate program assistance. The Committee bill authorizes this
due process requirement for the following programs: the Emergency
Shelter Grants Program; the Supportive Housing Program; the Safe
Havens for Homeless Individuals Demonstration Program; the
Section 8 Assistance for SRO Dwellings program; and the Rural
Homelessness Grant program. The Committee notes that this same
provision is currently in existing law for another homeless
program, the Shelter Plus Care program, which was created in the
Cranston-Gonzalez National Affordable Housing Act.

The Committee bill provides this protection for residents of
McKinney assisted programs because the Committee has learned of
instances where families with children and individuals have been
removed from federally assisted homeless facilities with as
little as 24 hours notice; thus, the Committee believes that
minimum standards are necessary to protect homeless people and
prevent future abuses. The Committee believes that in all these
programs there must be a fair procedure to determine whether
alleged violations have in fact occurred, who is responsible for
them, and whether complete termination of assistance or lesser
sanctions are appropriate. The Committee intends that recipients
be permitted to terminate assistance only in accordance with a
formal process that recognizes the rights of individuals to due
process of law.

Emergency shelter grants program

The Committee believes that there is a continued need to provide
funding for the creation and support of emergency shelters to
assist the homeless throughout the United States. The Committee
bill authorizes $143.5 million for the establishment of emergency
shelters throughout the country. The Committee notes that there
is still a great demand for emergency shelter assistance by the
homeless; there are approximately 3 million persons who are
homeless in the United States. While the Committee strongly
believes in the need to establish permanent housing for all
homeless Americans, the need for additional emergency shelter
assistance also continues.

The Committee finds that emergency requests for homeless
assistance are in fact increasing. For instance, the 1991 U.S.
Conference of Mayors' Annual Survey of Hunger and Homelessness
found that requests for emergency assistance continue to rise-an
average increase of 13 percent for shelter requests across the
country. Another recent survey of recipients under the FEMA
Emergency Food and Shelter program clearly showed that emergency
needs are increasing. This survey advised that ninety percent of
the local boards and recipient organizations surveyed found that
their demand for services had increased by more than 30 percent
since August 1991.

Supportive housing program

The Committee bill creates a new measure, entitled the Supportive
Housing program, which combines the existing Supportive Housing
Demonstration and Supplemental Assistance for Facilities to
Assist the Homeless (SAFAH) programs into one program. The
Committee intends, through this merger, to preserve the current
flexibility which is a characteristic of the SAFAH program while
simplifying the process of applying for federal homelessness
assistance.

This consolidated program maintains all activities formerly
eligible under the Supportive Housing Demonstration (including
transitional housing and permanent housing for handicapped
homeless persons) Program, as well as those activities under the
SAFAH program. The Committee believes that the flexibility of the
SAFAH program to assist the homeless must be maintained within
this new Supportive Housing program and for that reason has
included statutory language throughout the text that emphasizes
innovative approaches to assist the homeless and a requirement
that not less than 10 percent of program funds be used to fund
supportive services for the homeless. The Supportive Housing
program provides for the development of comprehensive
transitional housing programs for homeless families and
individuals, permanent supportive housing for homeless persons
with disabilities, and a flexible array of supportive services,
such as child care and employment counseling, among others, that
help people in the transition to permanent housing.

The Committee does not intend that this Supportive Housing
program be viewed as a block grant approach to assist the
homeless. The Committee believes that there continues to be a
pattern of underfunding of the federal programs that assist the
homeless. Thus, given this pattern, the Committee believes that
the appropriate level of funding would not be available to fund a
block grant program to assist the homeless. Instead, the
Committee continues to reauthorize the various homeless programs
authorized in existing law in order to meet the needs of homeless
persons.

The Committee bill makes several changes to the provisions in the
existing law version of the Supportive Housing program that will
better assist program recipients in providing housing and
supportive services to the homeless. These changes include: (1)
reducing the one-for-one match of program assistance by
recipients to a 10 percent match; (2) adding as an eligible
activity the development of SRO Dwellings or the provision of
supportive services within SRO dwellings; (3) specific funding
set-asides of not less than 25 percent for homeless families with
children, not less than 25 percent for homeless persons with
disabilities, and not less than 10 percent for supportive
services (the Supportive Housing Demonstration program currently
does not provide these set-asides); (4) removing the limitation
of $200,000 and $400,000 respectively, on the grant amounts for
acquisition and rehabilitation, and new construction which are in
existing law; (5) adding the participation of homeless and
formerly homeless in the rehabilitation and construction of
assisted projects, and in the decisionmaking process of project
recipients (these provisions are not currently in existing law)
(6) adding a due process procedure for termination of assistance
by recipients (this provision currently applies to the Shelter
Plus Care program only); (7) prohibiting HUD from denying program
assistance to recipients solely because the facility permits the
homeless to reside for more than 24 months (generally existing
law only allows transitional housing residents to reside in
assisted facilities for up to 24 months); and (8) creating
transition provisions by allowing Supportive Housing
Demonstration and SAFAH programs to continue to operate until
program regulations become effective for this Supportive Housing
program.

The Committee intends that this Supportive Housing program allow
grantees to apply directly to HUD to receive funds for the
provision of supportive services to assist the homeless. The
Committee intends that recipients can be able to receive program
funds solely to provide supportive services to the homeless.
Funding for the receipt of supportive services is not to be
conditioned on the receipt of program funds for housing under
this program. For example, funds could be used to provide child
care services at a family shelter or to provide services during
the day, on a drop-in basis, at an emergency shelter, or could be
used in conjunction with foreclosed properties or the utilization
of public buildings for the homeless. The Committee intends that
at least 10 percent of the funding for the Supportive Housing
program be dedicated to projects which provide this kind of
flexible service assistance.

The Committee bill requires grant recipients to supplement
assistance provided by the Supportive Housing program with an
amount equal to not less than 10 percent of the federal funds
provided. This match requirement is a significant reduction from
the one-for-one matching requirements in the current Supportive
Housing Demonstration program. The Committee believes that such a
reduction is necessary given the fact that it has become
increasingly difficult for project sponsors to match federal
funds because of the long term economic recession.

Safe havens for homeless individuals demonstration program

The Committee bill creates a new demonstration program, Safe
Havens for Homeless Individuals, based on a recommendation by the
Federal Task Force on Homelessness and Severe Mental Illness.
Safe Havens fills a gap in existing McKinney Act programs for
homeless persons with mental illness, substance abuse problems,
or dual diagnosis, who are currently unable to use available
shelter, mental health, or substance abuse services. The program
creates small, private or semi-private, 24-hour accommodations
designed to provide safe and stable housing for a segment of the
homeless population that is often distrustful of the service
system or unable to abide by the strict program rules required in
many emergency shelters. The Committee creates the program in
order to determine whether Safe Havens are successful in
encouraging eligible individuals to enter treatment and more
traditional forms of housing after a period of stabilization in a
Safe Haven facility.

The Committee bill provides grantees the option of providing
supportive services-such as mental health and substance abuse
treatment, employment counseling, and housing search
assistance-on the premises or allowing them to assist Safe Havens
residents to obtain them elsewhere. Although supportive services
will be made available to participants if they choose to use
them, Safe Havens residents will not be forced to participate in
services until they are ready.

The Committee directs HUD to insure regulations that place as few
requirements or restrictions on the Safe Havens residents as
necessary to ensure the safety and health of each resident with
the programs purpose.

The Committee has worked in a bipartisan manner in creating this
Safe Havens demonstration program. The Committee notes that the
Safe Havens program was originally proposed by the
Administration. The Committee bill contains most of the
provisions of the Safe Havens program as originally proposed by
the Administration; however, there have been several changes and
refinements made to the proposed program. The Committee bill
contains the following major changes to the Administration's
proposed program: (1) the bill allows program assistance to be
used to assist all eligible persons who are ``unable'' to
participate in mental health treatment programs instead of those
persons who are ``unwilling or unable'' to participate in mental
health programs as originally proposed by the Administration; (2)
the bill adds new construction as an eligible activity under the
demonstration program; (3) the bill does not preempt state or
local laws regarding the removal of tenants from an assisted
project as proposed by the Administration. The Committee finds
the position of the Administration to preempt state and local
laws unacceptable. In fact, the Committee bill contains a
provision that requires program recipients to establish due
process procedure for the termination of assistance to eligible
individuals.

Section 8 assistance for single room occupancy (SRO) dwellings

The Committee bill reauthorizes the section 8 Assistance for SRO
Dwellings program at $89.7 million for FY 1993. The Committee
strongly believes that this program effectively serves homeless
persons through a long-term permanent housing approach. The
Committee notes that the program is vitally-needed given the
great demand for permanent housing opportunities for the
homeless. The Committee notes that this SRO program remains one
of the few programs within the scope of the McKinney Act which
offers permanent housing. The Committee, throughout the year, has
received testimony on the effectiveness of the SRO assistance
program and remains quite concerned that the Administration did
not propose any new funding for the program in its FY 1993 Budget
Request to Congress.

Shelter plus care program

The Committee bill reauthorizes the Shelter Plus Care program at
$269.1 million for FY 1993. The Committee bill merges the three
components of the program in existing law into one program and
creates an additional type of activity which can be funded under
the program. The Committee bill sets aside not less than 10
percent of program funding for each of the following types of
eligible program activities: tenant-based rental assistance;
project-based rental assistance; sponsor-based rental assistance;
and section 8 moderate rehabilitation assistance for single room
occupancy (SRO) dwellings.

The Committee consolidates the three components of the existing
Shelter Plus Care programs and a new eligible activity into one
integrated program which is aimed at simplifying the
administration and implementation of the program. The Committee
believes that this consolidated approach will greatly simplify
the program by causing less administrative burdens for program
applicants which under this new approach will be able to interact
directly with one unified Shelter Plus Care administrative
structure under the Department. The Committee notes that program
applicants are now required to become familiar with three sets of
regulations, contracts, and methods of payments which results in
excessive amounts of time and effort by applicants on
administrative matters.

The Committee bill creates a fourth eligible activity,
project-based rental assistance, which was first proposed by the
Administration. The Committee notes that this new activity is
intended to be additional to the section 8 SRO assistance
activity which is currently authorized in existing law and is in
no manner intended to replace it as originally proposed by the
Administration. The Committee believes that the SRO eligible
activity continues to play a valuable role in sheltering homeless
persons and the Committee does not wish to eliminate it from the
eligible activities under the Shelter Plus Care program.
Likewise, the Committee believes that public housing authorities,
which administer the SRO assistance, play a valuable role in
providing housing assistance, and thus, the Committee bill
authorizes PHAs as eligible entities to participate under the
other Shelter Plus Care program activities.

The Committee bill also clarifies that nonprofit organizations
which are public nonprofits are eligible to receive program
assistance. The Committee makes this change in order to assist
community mental health organizations in states, such as Texas,
which have been precluded from receiving program assistance
because they are public nonprofits. The same change has been made
to the Supportive Housing program in order to make public
nonprofits eligible for the program. Existing law currently
limits assistance to private nonprofit organizations.

FHA single family property disposition

The Committee bill requires a 30-day marketing period for
HUD-acquired single family properties before they are made
available for use to house the homeless. This provision changes
the current requirement that properties must be offered for 10
days for use to assist the homeless before the property can be
marketed generally.

The Committee emphasizes that it continues to strongly believe
that HUD-held foreclosed property should be made available to
house the homeless and this action by the Committee is not
intended to dissuade HUD from using its inventory to assist
homeless persons. Thus, the Committee bill also includes a
provision which requires HUD to reserve for disposition not more
than 10 percent of the total eligible properties and not subject
these properties to the 30-day marketing requirement for those
areas that HUD determines do not have a sufficient quantity of
decent, safe, and sanitary affordable housing available under
this homeless disposition program.

Rural homeless housing assistance

The Committee bill includes two provisions designed to address
the growing problem of homelessness in rural areas. In a hearing
on HUD homeless program, the Committee heard testimony about the
need for federal attention to address the special needs of rural
communities in addressing homelessness. The Committee notes that
little is known about the largely hidden problem of homelessness
in rural America or about how to best design assistance programs
to meet rural needs. In many cases, existing McKinney Act
programs are often not suitable for communities with small and
diverse homeless populations that have a need for comprehensive,
flexible programs rather than programs that provide a specific
service to a limited segment of the homeless population.

To address these issues, the Committee bill establishes a rural
homelessness demonstration program in FmHA intended to increase
the capacity of rural communities to prevent and respond to
homelessness, to collect information on the extent and
characteristics of homelessness in these areas, and to develop
and demonstrate successful models of delivering emergency,
prevention and permanent assistance in rural settings that can be
replicated on a national scale. The Committee has designed this
program to provide flexible funds to public and private
nonprofits serving rural areas so that they may provide housing
and supportive service assistance to families and individuals who
are homeless (including homeless migrant farmworkers) and persons
at-risk of homelessness.

The Committee also continues to strongly believe that the migrant
homeless program authorized under section 516 in the Committee
bill at $14.5 million for fiscal year 1993 must be funded. The
Committee believes that both the new rural homelessness grant
program created in the Committee bill as well as the migrant
program authorized in existing law must both be adequately funded
in order to assist the homeless in rural areas. The Committee
bill authorizes such sums as may be necessary for fiscal year
1993 for the new rural homelessness grant program, and the
Committee encourages the Appropriations Committee to fund this
program at a minimum level of $40 million in order to effectively
deal with the issue of homelessness in rural areas.

The bill also amends rules governing the Farmers Home
Administration single family home property disposition program to
expand the use of these properties as transitional and permanent
housing to homeless families and individuals. The Committee
intends for the Farmers Home Administration to engage in
aggressive outreach to inform eligible agencies about this
program and the availability of such properties on a regular and
timely basis.

Evaluations of programs by homeless

The Committee bill requires each participating jurisdiction under
the HOME Investment Partnership program to submit an evaluation
of the effectiveness of each HUD McKinney housing program within
its annual report by surveying homeless individuals and families
which are assisted under these programs within the community.
Current law requires each participating jurisdiction under the
HOME program to annually review and report its progress in
carrying out its housing strategy identified in the Comprehensive
Housing Affordability Strategy submitted to HUD.

The Committee bill adds this requirement on surveying homeless
recipients under McKinney programs to a participating
jurisdiction's annual report to HUD. The Committee believes that
it is important to receive responses on the effectiveness of
assisting homeless persons through the McKinney Act programs
directly from the homeless which are assisted under these
programs.

Extension of original McKinney Act housing programs

The Committee bill strikes the revised McKinney Act housing
assistance provisions, sections 821 and 823 of NAHA. The
Committee believes that those provisions are not necessary and
proves overly burdensome to the Department. Section 823 of the
McKinney Act, which is repealed in the Committee bill, requires
HUD to conduct a feasibility study on the allocation of homeless
assistance through alternative formulas. The Committee believes
that this requirement is unnecessarily burdensome to the
Department and thus, the Committee eliminates this provision from
existing law.

The Committee is quite concerned that there is a tendency in
developing formula methods to distribute homeless assistance for
some analysts to use the data collected by the Census on the
homeless in the 1990 decennial census. The Committee is quite
concerned that the data collected by the S-Night (March 20, 1990)
Count of homeless persons is an incomplete count of the
population of homeless persons in the United States. Thus, the
Committee believes that the enumeration of the S-Night Count
should not be used by Federal, State, local, or any other
governmental unit, for the allocation of assistance to homeless
persons.

Consultation and report regarding use of National Guard
facilities as overnight shelters for homeless individuals

The Committee bill requires HUD to consult with the chief
executive officers of the States and the Secretary of Defense to
determine the availability of space at National Guard facilities
for use by homeless organizations in providing overnight shelter.
The Committee bill also requires HUD to submit to Congress a
report within one year of the enactment date regarding the
consultations and determinations made by HUD on the use of the
National Guard facilities. This provisions was previously
accepted in conference between the House and Senate on the
Cranston-Gonzalez National Affordable Housing Act; but was
mistakenly not included as part of the conference report to the
Act.

                TITLE XI-NEW TOWNS DEMONSTRATION

The Committee is extremely troubled by the civil disturbances
that occurred in Los Angeles in April, 1992. The Committee
believes that these disturbances were the inevitable result of
more than a decade of neglect and disinvestment in our nation's
inner cities. The lack of affordable and decent housing, jobs and
economic development, and adequate social supports have left Los
Angeles and many other of the nation's cities without the
resources to build and maintain safe and vibrant neighborhoods.

The Committee bill establishes a New Towns Demonstration program
to provide for the revitalization and renewal of inner city
neighborhoods and to demonstrate the effectiveness of new town
developments in revitalizing and restoring depressed and
underprivileged inner city neighborhoods.

The Secretary is to select from the areas of the city of Los
Angeles that were declared a disaster or emergency area as a
result of the April civil disturbances, two demonstration areas
based on the respective levels poverty and unemployment in such
areas.

The demonstration requires that a governing board consisting of
community leaders, residents, local business owners and lenders
develop a new town plan that lays out the activities and services
that will be provided. The Committee intends that this
requirement for local involvement be used to ensure that the plan
is reflective of and sensitive to the community's needs. The new
town plan must describe the needs and the resources necessary to
address in an integrated fashion the needs of the community. This
new town plan must then be reviewed and approved by the chief
executive officer(s) of all units of general local government
that may be affected by the plan. This review and approval should
help foster the partnership that must be created between units of
general local government to ensure that the plan is feasible and
that there is a commitment to providing the necessary resources.

The new town plan must address not only the housing, employment
and social service needs of the community, it must also describe
how such needs will be met in terms of financial, physical and
labor resources. These requirements are intended to encourage a
comprehensive approach to revitalizing the distressed areas in
which the new town demonstration program occurs. Preference in
awarding contracts, purchasing materials, acquiring services, and
obtaining assistance or training must be given to contractors,
business owners, developers and other providers that are located
within the new town demonstration area. The plan must provide for
at least 1,500 dwelling units to be constructed or renovated, of
which 60 percent must be for homeownership. In addition, the
units must be of varying sizes and costs so that the program
provides affordable housing to families at 120 percent of area
median income and below. Appropriate social and supportive
services must be provided to residents of housing assisted under
this demonstration program and to residents in the new town
demonstration area. Such services include rental and
homeownership counseling, child care, job placement, educational
programs, and recreational and health care facilities. The
Committee bill requires that, to the extent practicable, any
activities shall employ and provide job training opportunities
for residents of the area. The Committee bill requires that at
least 25 percent of the total amounts used to carry out the
demonstration program come from non-federal sources to encourage
a federal-local partnership. The Committee believes that the
partnerships between federal and local governments and between
public and private entities will provide the foundation for a
strong, long-term commitment to these distressed areas.

To ensure that sufficient funds are available for the
construction and rehabilitation of housing as specified in the
new town demonstration program plan, the Committee bill provides
insurance authority and special mortgage terms to FHA mortgages
insured pursuant to this demonstration program. The Committee
bill also provides for repayable advances for the construction or
rehabilitation of rental housing, in an amount not to exceed
$50,000 per unit.

To address vital unmet needs and to promote the creation of jobs
and economic development, the Committee bill authorizes
assistance to units of general local government that are located
in part or in whole in any new town demonstration area to carry
out eligible activities. These activities include acquisition of
real property to address blight, to foster historic preservation,
to provide public works, and to coordinate activities and
services for high risk youth. Other eligible activities include:
(1) construction of public works and facilities, (2) clearance
and rehabilitation of buildings including facilities for high
risk youth and privately owned buildings and improvements, and
(3) provision of public services and housing (limited to 25
percent of total assistance), of which at least 15 percent of
housing funds must be available only to nonprofit organizations.
Relocation assistance and payment of administrative expenses are
also provided. Neither of the two new town demonstration programs
can receive more than 50 percent of any amount appropriated.

The Committee believes that this program will demonstrate the
necessity and effectiveness of a comprehensive approach to
community revitalization. Each link-jobs, housing,
infrastructure, education, health care, focus on youth-must be
addressed in order to secure a safe, decent, affordable and
thriving neighborhood. The nation's cities have been neglected
for too long; the Los Angeles civil disturbances drew pointed
attention to this fact. The Committee intends that a renewed
commitment to the nation's cities will emerge from this turmoil.

         STATEMENTS MADE IN ACCORDANCE WITH HOUSE RULES

In accordance with clauses 2(l)(2)(B), 2(l)(3) and 2(l)(4) of
rule XI of the Rules of the House of Representatives, the
following statements are made.

                         COMMITTEE VOTE

                  (Rule XI, clause 2(l)(2)(B))

The Committee on Banking, Finance and Urban Affairs, with a
quorum present, ordered H.R. 5334, as amended, favorably reported
by a voice vote at its markup on June 16, 1992.

             OVERSIGHT FINDINGS AND RECOMMENDATIONS

(Rule XI, clauses 2(l)(3) (A) and (D), and rule X, clauses
2(b)(1) and (2) and 4(c)(2))

The Subcommittee on Housing and Community Development held six
days of hearings in March and April on the reauthorization of all
housing and community development programs within the
subcommittee's jurisdiction. In addition, the subcommittee, in
conjunction with the Committee on Banking, Finance and Urban
Affairs, held a series of field hearings in January, February and
March around the country to investigate the State of the nation's
economy and its impact on housing and community development
programs. Accordingly, the Committee recommends that the House
pass H.R. 5334, as amended. The bill addresses the needs and
accomplishes the objectives reflected in these hearings.

                  AVISORY COMMITTEE STATEMENT

(Section 5(b) of the Federal Advisory Committee Act)

The Committee bill establishes a task force to review the
standards and obligations of residency in federally assisted
housing for the explicit purpose of providing assistance to the
Secretary of HUD in developing consistent, fair and reasonable
occupancy standards, selection criteria, and eviction procedures
for current and future residents of such housing. The task force
will perform necessary functions that are not duplicated by any
other task force, committee, or agency already in existence. It
has a clearly defined purpose; a balanced and independent
membership comprised of housing authorities, owners, tenants,
advocacy groups, and service providers; a provision for support
and cooperation by HUD; and a defined timetable for submitting
findings and recommendations to the Congress and to HUD for
appropriate future action. The bill also reauthorizes the
National Commission on Distressed Public Housing, the National
Commission on American Indian, Alaska Native, and Native Hawaiian
Housing, and the National Commission on Manufactured Housing in
order that these commissions be given time to complete their
missions.

                   INFLATION IMPACT STATEMENT

                   (Rule XI, clause 2(l)(4))

The Committee finds that the bill will not have any impact on any
inflationary trends in the national economy.

Cost Estimate of the Congressional Budget Office Pursuant to
Section 403 of the Congressional Budget Act of 1974

(Rule XI, clause 2(l)(3)(C))

U.S. Congress,

Congressional Budget Office,
 Washington, DC, July 30, 1992.
 Hon. Henry B. Gonzalez,
 Chairman, Committee on Banking, Finance and Urban Affairs,
 House of Representatives, Washington, DC

Dear Mr. Chairman: The Congressional Budget Office has prepared
the attached cost estimate for H.R. 5334, the Housing and
Community Development Act of 1992.

Enactment of H.R. 5334 would affect direct spending. Therefore,
the bill would be subject to pay-as-you-go procedures under
section 252 of the Balanced Budget and Emergency Deficit Control
Act of 1985. as a result, the estimate required under clause 8 of
House Rule XXI is attached.

If you wish further details on this estimate, we will be pleased
to provide them.

Sincerely,

James L. Blum

(For Robert D. Reischauer, Director).

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

1. Bill number: H.R. 5334.

2. Bill title: Housing and Community Development Act of 1992.

3. Bill status: As ordered reported by the House Committee on
Banking, Finance and Urban Affairs on June 16, 1992.

4. Bill purpose: H.R. 5334 would amend various laws relating to,
and authorize funding for, the federal government's housing and
community development programs. Section 8 of the United States
Housing Act of 1937, the principle means by which low-income
housing assistance is provided, would be completely rewritten.
The bill would establish several new programs relating to the
delivery of assistance to low-income households and would
authorize appropriations of these programs.

5. Estimated cost to the Federal Government:
* * * TABLE START * * *

 By fiscal year, in millions of dollars   1993 1994 1995 1996
1997

Direct Spending:

Estimated budget authority .......  43 .......  43 .......  41
.......  41 .......  41

Estimated outlays .......  43 .......  43 .......  41 .......  41
.......  41

Authorization of appropriations:

Estimated authorization level .......  30,299 .......  20 .......
24 .......  21 .......  21

Estimated outlays .......  2,792 .......  5,994 .......  5,825
.......  4,303 .......  3,602
* * * TABLE END * * *

CBO does not have sufficient information to estimate the costs of
the following programs or activities, which are therefore not
included in the above table: sharing certain savings associated
with bond refinancing authorized in Title I, certain service
coordinators authorized in Title VI, and the homeless assistance
grants in Title X.

The costs of this bill fall within budget functions 370, 450,
600, and 750.

Basic of estimate: CBO assumes that this bill will be enacted and
that the full amounts authorized will be appropriated by the
beginning of fiscal year 1993. Outlays are estimated based on
historical spending rates for the various programs.

Title I-Housing assistance

Rental assistance and public housing programs.-Title I would
authorize the appropriation of $15.2 billion for the Department
of housing and Urban Development's (HUD's) rental assistance and
public housing programs in 1993. Almost half of this amount $7.3
billion, would be used to renew 223,300 section 8 assistance
contracts that will expire in 1993, and another $1.9 billion
would be set aside to amend currently underfunded contracts.
About $3 billion would provide aid for an estimated 66,600
previously unassisted unit-56,000 section 8 units and 10,600
public and Indian housing units. Another $2.3 billion would be
used for the public housing modernization program. Capital
financing and rental assistance for the elderly and disabled are
authorized separately in Title VI.

Section 141 of the bill contains revision of HUD's section 8
rental subsidy program. Although completely rewritten, the
amended section 8 would provide the same assistance to very low
and low-income households in much the same fashion as under
current law. HUD would continue to pay the difference between the
rent charge for occupancy and 30 percent of the tenants' adjusted
income; the per-unit subsidy costs would not change. The bill
would, however, eliminate vouchers, that are one of the means by
which this assistance is currently provided. The means that would
be authorized closely resembles section 8 certificates. While
this would not affect federal expenditures, the number of units
supported by a given amount of budget authority could change,
because there is a significant difference between certificates
and vouchers in the amount of budget authority required. The 1993
budget resolution baseline assumes budget authority for a 5-year
certificate of $36,600 and budget authority for a 5-year voucher
of $32,160. The estimated number of units that would be assisted
by the section 8 authority authorized by this bill (discussed
above) is based on the assumption that per-unit budget authority
would be calculated in the same manner as certificates.

Public housing operating subsidies.-The bill would authorize $2.2
billion for public housing operating subsidies. In addition, the
bill would authorize such sums as may be necessary to offset the
funding reduction proposed in HUD's budget submission to reflect
certain cost savings anticipated by the Administration. CBO has
included the department's fiscal year 1993 budget estimate for
this amount, $128 million, in this cost estimate. A similar
provision would authorize the appropriation of amounts necessary
to cover the costs of the public housing tenant income
adjustments included in the Cranston-Gonzales National Affordable
Housing Act (NAHA). These adjustments would lower tenant rent
contributions and thus increase federal expenses. NAHA requires
approval in appropriation acts before these provisions would be
implemented. CBO estimates that these tenant income changes would
reduce collections from public housing residents by $160 million
in 1993. This estimate is based on a projection of the number of
households that would be involved and their incomes. An
additional authorization of such sums as may be necessary is
included for technical assistance to encourage resident
management efforts in public housing projects. CBO has included
$5 million for this purpose, based on the amount appropriated in
1992.

Moving to opportunity program.-Title I would establish in
permanent law a demonstration program for very low-income
families with children living in public housing units located in
concentrated poverty areas. The program would provide section 8
rental subsidies and other assistance to help the families
involved move out of such areas. A similar program was funded in
the 1992 HUD appropriations act (Public Law 102-139). That act
provides section 8 authority totalling $20 million to be used in
five unspecified, large cities in 1992. These cities have yet to
be selected. H.R. 5334 would limit the program in 1993 to the
same five cities plus Los Angeles, California, and would
authorize the appropriation of such sums as may be necessary for
the year. The amount included in this cost estimate, $25 million,
is based on the 1992 appropriations adjusted for inflation and
the addition of another city. No special provision was made in
the CBO estimate to account for the size of Los Angeles.

Flexible subsidy program.-The bill would authorize the
appropriation of $54 million for HUD's flexible subsidy program.
In addition, section 236(f)(3) of the National Housing Act would
be amended to allow the use in 1993 of amounts in the Rental
Housing Assistance Fund. The fund was established to receive
rents paid by certain tenants in section 236 housing projects
that are in excess of amounts due project owners. Use of these
funds requires appropriation action. The CBO baseline includes
estimated excess rent collections of $70 million, and for the
purposes of this estimate, this amount has been added to the
authorized amount for the program, making a total of 124 million.

Refinancing savings.-Public Law 102-273, enacted on April 21,
1992, allows local housing agencies to keep half of rental
assistance savings that occur in HUD's section 8 rental
assistance program when certain outstanding tax-exempt bonds are
refinanced. These bonds were issued to finance low-income housing
during a period of high interest rates. Bond issuing agencies
were provided special financial adjustments under section 8 to
help cover financing costs. H.R. 5334 would authorize the
appropriation of the sums necessary to pay local authorities half
the saving realized from refinancing that occurred prior to the
beginning of 1992, the date set by Public Law 102-273. Based on
information from HUD, CBO estimates that $26 million would be
necessary for this purpose in 1993, including $9 million for
refinancing savings that would accrue in 1993. This provision
would cost $9 million per year for about the next 10 years
because, under current law, all savings now revert to the federal
government. Sharing past and future savings with the refinancing
jurisdictions would require approval in appropriation acts. These
prior refinancing activities involve principal amounts totaling
about $430 million and began in 1989, with most taking place in
1990 and 1991.

Other high interest rate bonds were issued by state and local
housing finance agencies that did not receive the special
financial adjustment assistance mentioned above. The bill would,
however, authorize the same 50 percent sharing of past and future
savings stemming from the refinancing of certain of these other
bonds. Currently CBO does not have sufficient information to
estimate the costs of this provision.

Youthbuild.-If enacted, H.R. 5334 would establish a new federal
assistance program under which the abilities of economically
disadvantaged youth would be used to increase the supply of
affordable housing for low- and very low-income families and the
homeless. The young participants would be paid and would receive
training and other educational benefits. Participants would be
required to spend 50 percent of their time devoted to these
educational activities. Funds provided would be used to cover the
costs of employing and training the participants as well as other
expenses relating to the acquisition, rehabilitation, or
construction of low-income housing. The bill would authorize for
1993 the appropriation of such sums as may be necessary for this
program. CBO has no way of estimating the funding required to
achieve the purposes of this new program because the bill does
not specify either the number of units or the number of youth
involved. It has been estimated by an organization involved in
such projects that the costs would average about $40,000 per
housing unit.

Homeownership trust.-Section 182 of the bill would authorize
appropriations for use in 1993 by the National Homeownership
Trust. The trust was created as part of NAHA to fund aid to
certain first-time homebuyers. The program would not make direct
first mortgage loans, but it could provide interest reduction
payments and closing cost assistance that would require secondary
liens on the property in favor of the government. These advances
would not require interest payments and would be repaid only if
borrower incomes increased sufficiently or proceeds from the sale
of the property were adequate. The program would be targeted to
low- and moderate-income families and to housing financed with
loans that do not exceed amounts that could be insured under the
National Housing Act. In addition to specifying a program level
of $542 million for 1993, the bill would authorize the amounts
necessary to cover the costs of loan subsidies inherent in the
program. It is the subsidy costs that are included in this
estimate. CBO estimates that the cost of subsidizing the
Homeownership Trusts activities would amount to about 40 percent
of the assistance extended. We expect that most of the funds
advanced would be repaid but that most of these payments would
likely occur several years after aid is provided. Since the
advances would not require interest payments, the length of time
they remain outstanding would largely determine the cost to the
government. For this estimate, CBO assumed that most repayments
would result from the sale of property, probably around the
eighth year after the advance are made.

Loan guarantees for Indian housing.-This title also would
establish a new program to guarantee loans made to Indian
families or Indian housing authorities to construct, acquire, or
rehabilitate one-to four-family dwellings. The bill specifies the
basic requirements for the new program, including a maximum
guarantee fee of one percent of the principal obligation of the
loan, to be paid when the guarantee is issued. Further, it would
authorize appropriations in an indefinite amount to cover the
cost of the program in fiscal years 1993 through 1995. In
accordance with credit reform scorekeeping procedures established
by the Budget Enforcement Act of 1990 the cost of this program
would be measured in terms of credit subsidies, estimated on a
present value basis. CBO's estimate of this cost-$1 million to $2
million per year-assumes that loan guarantee commitments would
range from $25 million in fiscal year 1993 to $50 million in
fiscal years 1994 and 1995 and that the subsidy would equal 5
percent of the loan principal guaranteed. Because this is a new
program, the subsidy rate is very difficult to predict with any
precision, as is the volume of loans that would be guaranteed.

Other authorizations.-The bill authorizes appropriations for
several other existing programs, including public housing family
investment centers and early childhood development services,
rental assistance for family unification and moving to
opportunity, drug elimination grants for subsidized housing,
counseling assistance, and the HOPE home ownership program.

The following table details the estimated budgetary impact of
Title I.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE I

 By fiscal year, in millions of dollars   1993 1994 1995 1996
1997

Low-income housing:

Authorization level .......  15,159 .......   .......   .......
.......

Estimated outlays .......  451 .......  1,569 .......  2,511
.......  2,444 .......  2,329

Public housing operating subsidies:

Estimated authorization level .......  2,458 .......   .......
.......   .......

Estimated outlays.......  1,130 .......  1,278 .......  49
.......   .......

Moving to opportunity:

Estimated authorization level .......  25 .......   .......
.......   .......

Estimated outlays.......  1 .......  3 .......  4 .......  4
.......  4

Flexible subsidy program:

Estimated authorization level .......  124 .......   .......
.......   .......

Estimated outlays.......  0 .......  30 .......  27 .......  20
.......  14

Refinanced housing finance agency bonds:

Estimated authorization level .......  26 .......  9 .......  9
.......  9 .......  9

Estimated outlays.......  26 .......  9 .......  9 .......  9
.......  9

Homeownership trust:

Estimated authorization level .......  225 .......   .......
.......   .......

Estimated outlays.......  0 .......  131 .......  30 .......  8
.......  8

Loan guarantees for Indian housing:

Estimated authorization level .......  1 .......  3 .......  3
.......   .......

Estimated outlays.......  1 .......  2 .......  2 .......  2
.......

Public housing resident management:

Estimated authorization level .......  5 .......   .......
.......   .......

Estimated outlays.......  2 .......  3 .......   .......
.......

Public housing family investment centers:

Authorization level .......  27 .......   .......   .......
.......

Estimated outlays.......  0 .......  7 .......  7 .......  13
.......

Public housing childhood development services:

Authorization level .......  22 .......   .......   .......
.......

Estimated outlays.......  1 .......  11 .......  10 .......
.......

Family unification assistance:

Authorization level .......  36 .......   .......   .......
.......

Estimated outlays.......  0 .......  4 .......  6 .......  6
.......  6

Drug elimination grants:

Authorization level .......  174 .......   .......   .......
.......

Estimated outlays.......  26 .......  87 .......  61 .......
.......

Housing counseling:

Authorization level .......  12 .......   .......   .......
.......

Estimated outlays.......  8 .......  3 .......  1 .......
.......

HOPE ownership grants:

Authorization level .......  400 .......   .......   .......
.......

Estimated outlays.......  16 .......  128 .......  100 .......
68 .......  44

Title I Total:

Estimated authorization level .......  18,694 .......  12 .......
12 .......  9 .......  9

Estimated outlays.......  1,662 .......  3,265 .......  2,817
.......  2,574 .......  2,404
* * * TABLE END * * *

Title II-Home investment partnerships

This title would authorize 1993 appropriations of $2.2 billion to
fund HUD's Home Investment Partnerships program. This money would
be used by participating jurisdictions to assist families to
obtain decent, affordable housing and to increase the supply of
such housing. This program is part of NAHA and was first funded
in the 1992 appropriations act. The outlays shown in the table
below are based on spending rates used in the 1993 budget
resolution baseline.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE II

 By fiscal year, in millions of dollars  19931994199519961997

Home investment partnerships:

Authorization level.......  2,169.......  .......  .......
.......

Estimated outlays.......  44.......  371.......  821.......
606.......  324
* * * TABLE END * * *

Title III-Preservation of low-income housing

Title III would authorize $892 million for implementing the
provisions of the Low Income Housing Preservation and Resident
Homeownership Act. This statute authorizes incentives to prevent
the loss of certain projects from the federally assisted housing
stock because owners might opt to leave the programs when their
mortgages become eligible for prepayment. An estimated 46,000
units could be preserved under current law for low-income use
with the amount authorized. The estimate of outlays is based on
the assumption that HUD would approve the units that would
receive this funding over a 3-year period, and that once
approved, they would receive assistance for 5 years.

Several provisions of Title III would, however, increase the
per-unit federal cost of preserving these projects by effectively
increasing the rents. Because tenant contributions would be
unaffected, the higher rents would necessitate an increase in the
per-unit federal subsidy to tenants in these projects. Therefore,
fewer units could be preserved with a given amount of budget
authority, but CBO has no basis for estimating by how much the
number of units preserved would decrease. In particular, section
313 would increase the allowable amount for federally insured
repair loans from 90 percent to 100 percent of the cost of
repairs. Besides increasing the projects' rents, this provision
would increase the risk to the Federal Housing Administration
(FHA) insurance fund. Section 303 would increase the value of
projects, if sold to qualified purchasers, by adding to the
allowed sales price amounts in the reserve-for-replacement
account or by not subtracting from the allowed sales price
amounts in residual receipts accounts. Thus, acquirers' purchase
costs would be increased and rents would be correspondingly
higher.

Section 312 would decrease the per-unit annual federal costs in
the short run but would increase long-term federal costs of
preservation compared with current regulations. It would increase
from 20 years to 40 years the term of federally insured second
mortgages for the purposes of taking out equity or acquiring or
rehabilitating projects, thereby reducing monthly mortgage
payments but doubling the period over which these payments are
made. Although rents and thus federal rent subsidies would
therefore be reduced during the first 20 years, this reduction
would be more than offset by increased subsidies in the last 20
years.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE III

 By fiscal year, in millions of dollars  19931994199519961997

Authorization level .......  892 .......   .......   .......
.......

Estimated outlays .......  5 .......  110 .......  170 .......
175 .......  185
* * * TABLE END * * *

Title IV-Multifamily housing planning and investment strategies

Title IV would mandate that owners of certain federally assisted
or insured multifamily housing projects, including all assisted
projects for the elderly, submit to HUD comprehensive assessments
of the present and future needs for assistance to maintain the
projects' livability and financial viability and, for elderly
projects, to provide supportive services. Up to $5,000 of the
cost of the assessment would be allowed as a project expense. No
federal costs are associated with this provision because it would
prohibit rent increases to cover these costs. For some projects,
this provision could displace expenditures for project repairs,
however. This would be the case if a project's excess reserves
were insufficient to pay for the allowable cost of the assessment
and its replacement reserves had to be tapped.

Title V-Mortgage insurance secondary mortgage market

Direct spending.-Amendments with a direct impact on federal
spending include changes to the single family mortgage insurance
programs of FHA's Mutual Mortgage Insurance Fund (MMI). One would
increase the maximum amount for mortgages insured in high-cost
areas from $124,875 to 75 percent of the Federal Home Loan
Mortgage Corporation conforming loan limit (currently $202,300).
Another would increase the effective maximum loan-to-value ratio
for insured mortgages by prohibiting HUD from limiting the
percentage or amount of closing costs that may be included as
part of the ``value'' of a home when applying statutory
loan-to-value ratios. Current HUD regulations, which include such
a limitation, would be overturned. By lowering the base to which
statutory ratios are applied, the current regulation effectively
lowers the maximum allowable mortgage amount for a given
property.

In accordance with credit reform scorekeeping procedures
established by the Budget Enforcement Act of 1990, the costs (or
savings) associated with these changes are measured in terms of
credit subsidies. Subsidy amount are estimated on a present value
basis. Under current law, we estimate that the subsidy for the
MMI fund mortgage insurance program is negative-program receipts
exceed costs. As a result, no subsidy appropriation is required
for this program. The impact of these changes is reflected as a
change in that negative subsidy, equivalent to a change in
federal receipts, and is considered direct spending.

The provision increasing the maximum mortgage amount in high-cost
areas would increase federal receipts by increasing the volume of
these mortgages insured by FHA. While the magnitude of this
increase is very difficult to predict, CBO estimates that FHA
would insure additional mortgages with a principal value over $2
billion, resulting in savings to the federal government, on a
present value basis, of $44 million in fiscal year 1993 and $57
million to $58 million in each of fiscal years 1994 through 1997.

The amendment increasing loan-to-value ratios of FHA-insured
homes would increase the likelihood of default of these
mortgages, resulting in increased claim payments and a reduction
in the negative subsidy generated by this program. We estimate
that the present value cost of these increased claims would be
about $12 million in fiscal year 1993 and $15 million to $16
million in each of fiscal years 1994 through 1997. Most of this
cost would be offset in the first year, when we estimate that a
slight increase in the volume of mortgages insured (still at a
negative subsidy rate) would generate additional receipts.
Because buyers would need less cash to purchase a home, some
probably would respond by accelerating their purchase.
Specifically, we assume that about 5,000 additional mortgages
would be insured by FHA in fiscal year 1993, resulting in savings
to the federal government of about $11 million. As a result, the
net cost of this amendment in that year would be $1 million.
Again, this estimate is highly uncertain because both the
magnitude of increased defaults and the change in volume are very
difficult to predict.

Authorization of appropriations.-Title V would authorize fiscal
year 1993 appropriations of $631.8 million to cover the costs of
FHA mortgage insurance programs, and would limit loan guarantee
commitments in that year to $66.2 billion. In addition, the bill
would authorize $100 million for fiscal year 1992 for field
office staff to administer FHA's multifamily mortgage insurance
programs. CBO assumes that the amounts authorized for fiscal year
1993 would be appropriated prior to the start of that fiscal
year. Estimated outlays are based on historical spending
patterns. We assume that no additional amounts would be
appropriated for the current fiscal year, because we assume that
H.R. 5334 would not be enacted until very late in the year.

Other.-Title V includes a number of other provisions that amend
various FHA programs, but we estimate that none of these would
have a significant budgetary impact. Included is an amendment
that would give the Secretary of HUD the discretion to lower
premiums charged under the MMI single family mortgage insurance
program. CBO does not expect the Secretary to take advantage of
this authority in the next five years. Another provision would
establish an Energy Efficient Mortgage Pilot Program as an
adjunct to the MMI fund program. Again, CBO does not expect this
program to have a significant budgetary impact.

Title V also would authorize the Government National Mortgage
Association (GNMA) to compensate the issuers of GNMA
mortgage-backed securities for losses that would occur when
federal law requires that interest rates be lowered on mortgages
backing these securities. During the recent conflict in the
Persian Gulf, such a reduction of interest rates took place. The
Soldiers and Sailors Civil Relief Act requires that when such a
conflict occurs interest rates on the outstanding debt of those
involved be lowered to 6 percent. A preliminary estimate by GNMA
indicates that, had this rate reduction been covered, between $10
million and $20 million would have been paid from the GNMA
reserves. No cost for this provision has been included in this
cost estimate, because there is no basis for projecting when
similar events may occur.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE V

 By fiscal year, in millions of dollars  1993 1994 1995 1996 1997

Direct spending:

Estimated budget authority.......  43.......  43.......
41.......  41.......  41

Estimated outlays.......  43.......  43.......  41.......
41.......  41

Authorization of Appropriations:

Authorization level.......  632.......  .......  .......  .......

Estimated outlays.......  473.......  142.......  .......
.......
* * * TABLE END * * *

Title VI-Housing for elderly persons, handicapped persons, and
persons with disabilities

This title would authorize the appropriation of over $2 billion
to assist low-income elderly and disabled individuals. The
specific items are shown in the table below. We estimate that the
funds authorized for elderly and disabled housing would support
some 16,500 units. The outlay rates used for this estimate are
based on recent experience and are those assumed for the 1993
budget resolution baseline. In addition, $163 million would be
authorized to provide housing assistance for those afflicted with
acquired immunodeficiency syndrome (AIDS)

Subtitle E would require public housing agencies and owners of
section 8 assisted housing to retain the services of individuals
to coordinate the provision of certain services required by
residents of this housing. These services could include, among
others, health-related assistance, meals, transportation
assistance, and personal care. The services could come from the
federal government or other public or private sources. The
appropriation of $50 million would be authorized by the bill.
Appropriations of such sums as might be necessary would be
authorized to cover service coordinators in other types of
housing specified in the bill, CBO does not have sufficient
information to provide a precise estimate of this cost, but it is
not likely to exceed the $30 million authorized for public
housing.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE VI

 By fiscal year, in millions of dollars   1993 1994 1995 1996
1997

Elderly and disabled capital grants:

Authorization level.......  967.......  .......  .......  .......

Estimated outlays.......  0.......  0.......  251.......
251.......  464

Elderly and disabled rental assistance:

Authorization level.......  1,091.......  .......  .......
.......

Estimated outlays.......  0.......  0.......  1.......  9.......
15

Congregate and other elderly services:

Authorization level.......  75.......  .......  .......  .......

Estimated outlays.......  14.......  19.......  8.......
8.......  9

AIDS housing assistance:

Authorization level.......  163.......  .......  .......  .......

Estimated outlays.......  3.......  50.......  47.......
20.......  20

Service coordinators:

Authorization level.......  50.......  .......  .......  .......

Estimated outlays.......  23.......  26.......  1.......  .......

Total title VI:

Authorization level.......  2,346.......  .......  .......
.......

Estimated outlays.......  40.......  95.......  308.......
288.......  508
* * * TABLE END * * *

Title VII-Rural housing

This title would authorize 1993 appropriations to cover $2.3
billion of mortgage loans made or guaranteed by the Farmers Home
Administration (FmHA). Of this amount, $1.5 billion would assist
low-income home buyers and about $0.8 billion would finance
low-income rental housing. Much smaller sums would be available
for several other of FmHA's direct loan programs. Appropriations
of $0.7 billion would be authorized to cover the subsidy cost of
these loans. The bill also would authorize that an indefinite
portion of the $1.5 billion allocated for single-family loans be
used to guarantee unsubsidized private lending. Based on the 1992
appropriations act (Public Law 102-142), CBO estimates that about
0.1 billion would be used for this purpose. Since this type of
guaranteed loan involves much smaller federal costs, not all of
the subsidy authority would be used before the $1.5 billion loan
limit is reached.

The bill would authorize $0.1 billion for eight of FmHA's housing
grant programs, $436 million for rural rental assistance, and an
indefinite amount for a new program to provide funding for
service coordinators similar to those authorized in Title VI.
Based on information from FmHA, CBO estimates that $25 million
would be necessary in 1993. FmHA has provided financing for about
400,000 residential units in 16,000 projects. Almost 50 percent
of these units are occupied by elderly households. We assume that
about half of these would qualify and would ask for assistance.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE VII

 by fiscal year, in millions of dollars   1993 1994 1995 1996
1997

Loan subsidy costs:

Authorization level.......  696.......  .......  .......  .......

Estimated outlays.......  275.......  317.......  54.......
17.......  8

Rural support grants:

Authorization level.......  109.......  .......  .......  .......

Estimated outlays.......  28.......  35.......  26.......
8.......  9

Rental assistance:

Authorization level.......  436.......  .......  .......  .......

Estimated outlays.......  9.......  49.......  59.......
63.......  65

Service coordinator grants:

Authorization level.......  25.......  .......  .......  .......

Estimated outlays.......  0.......  21.......  4.......  .......

Total title VII:

Authorization level.......  1,266.......  .......  .......
.......

Estimated outlays.......  313.......  422.......  143.......
87.......  82
* * * TABLE END * * *

Title VIII-Community development

Title VIII would authorize about $3.4 billion for the community
development block grant (CDBG) program and other community
development activities for fiscal year 1993. Most of the funding
would be authorized for the CDBG program. Based on historical
spending rates in the CDBG program, CBO estimates that these
funds would be spent over four years. The bill also would
establish a limitation on CDBG guaranteed loans of $312 million
for fiscal year 1993. CBO estimates that these loans would have
no subsidy cost associated with them because, assuming the
authorized CDBG grant amount, these loans are made at no cost to
the federal government.

In addition, the bill would authorize funding for and make
changes in other community development programs. The bill would
require HUD to develop an integrated database system and mapping
tool for a new program to assist states and units of general
local government in developing new methods to monitor community
development and infrastructure needs and would authorize such
sums as necessary to fund the program and to make grants to
states for capital costs relating to the installation and use of
the database developed by HUD. Based on information from other
agencies and private sector organizations that administer
database information systems, CBO estimates that establishing and
maintaining the database would cost HUD at least $2 million
annually. CBO estimates that only a small number of grants to
states would be made in the first two years after authorization,
but that after the program is established, HUD may make about $10
million in grants annually. These costs could vary significantly
depending on the complexity of the database HUD establishes, the
type of access it installs, the amount of staff time and
equipment HUD devotes to the project, as well as the equipment
and systems already available in states.

H.R. 5334 would authorize $38 million for the Neighborhood
Reinvestment Corporation and $2 million for a neighborhood
development demonstration project. The bill also would provide
for certain set-asides, revise several definitions regarding
community development programs, require HUD to produce reports
and studies and issue new regulations, add to the list of
activities eligible for funding under the CDBG program, and add
requirements regarding neighborhood development funding
organizations and enterprise zones. CBO estimates that these
requirements would result in costs to the federal government of
about $2 million over the 1993-1997 period.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE VIII

 By fiscal year, in millions of dollars  19931994199519961997

Estimated authorization level.......  3,448.......  8.......
12.......  12.......  12

Estimated outlays.......  172.......  1,403.......  1,405.......
487.......  12
* * * TABLE END * * *

Title IX-Regulatory and miscellaneous provisions

Title IX would authorize $80 million for miscellaneous HUD
programs and would revise a number of administrative and
regulatory provisions. The authorizations include $23 million for
HUD research and development, $7 million for the fair housing
initiatives program, and such sums as necessary for HUD program
monitoring and evaluation, the National Commission on
Manufactured Housing, the solar bank, and providing assistance
for the National American Indian Housing Council for fiscal year
1993.

Based on information from agencies, current funding levels, or
past funding for currently discontinued programs, CBO has
estimated funding levels of about $50 million in fiscal year 1993
for those programs that received authorization for such sums as
necessary. Funding for all of these programs could be as small or
large as the Congress deems appropriate for the activities
authorized.

Title IX would change several HUD administrative provisions,
establish an office of the Special Assistant for Indian and
Alaska Native Programs, and require HUD to issue new regulations
and produce several studies and reports. CBO estimates that these
activities would result in costs of about $1.5 million in fiscal
year 1993.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE IX

 By fiscal year, in millions of dollars  19931994199519961997

Estimated authorization level.......  80.......  -.......
-.......  -.......  -

Estimated outlays.......  43.......  22.......  15.......
-.......  -
* * * TABLE END * * *

Title X-Housing program under Stewart B. McKinney Homeless
Assistance Act

This title would amend certain provisions of the Stewart B.
McKinney Homeless Assistance Act and would authorize the
appropriation of $740 million for 1993. Two of the McKinney Act
programs, supportive housing and supplemental assistance, would
be combined to form a new supportive housing program. The new
program would provide the same types of assistance currently
provided. These include housing and supportive services for the
homeless, particularly families and disabled persons. Section
1003 would authorize $187 million for the new, combined program
and would require that at least 10 percent be allocated to
supportive services. A 10 percent match from non-program sources
would be required of participants.

Section 1004 of the bill would establish a new program called
``Safe Haven'' to benefit certain homeless individuals. Those
assisted would include the seriously mentally ill, chronic
substance abusers, and others not receiving mental health care or
other supportive services that may be needed. Funds could be used
to build or acquire and renovate structures and to cover
operating and administrative expenses. The bill would authorize
appropriations of $50 million for the safe haven program.

Section 1008 would establish two new programs intended to assist
homeless individuals and families in rural areas. The first would
make available certain 1- to 4-family dwelling units acquired by
FmHA for housing the homeless. Given the limited number of units
meeting the specifications in the bill, the cost of this
provision is not expected to be great. The second new grant
program would provide assistance on behalf of the rural homeless
or those who risk becoming homeless. CBO does not have sufficient
information to provide an estimate of the potential cost of this
provision.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE X

 By fiscal year, in millions of dollars  19931944199519961997

Emergency shelter grants:

Authorization level.......  144.......  .......  .......  .......

Estimated outlays.......  22.......  86.......  36.......
.......

Supportive housing:

Authorization level.......  187.......  .......  .......  .......

Estimated outlays.......  4.......  28.......  50.......
25.......  25

Safe havens:

Authorization level.......  50.......  .......  .......  .......

Estimated outlays.......  10.......  18.......  8.......
8.......  8

McKinney single-room occupancy:

Estimated authorization level.......  90.......  .......  .......
.......

Estimated outlays.......  0.......  4.......  6.......  8.......
8

Shelter plus care:

Estimated authorization level.......  269.......  .......
.......  .......

Estimated outlays.......  2.......  23.......  37.......
39.......  40

Total title X:

Estimated authorization level.......  740.......  .......
.......  .......

Estimated outlays.......  37.......  158.......  136.......
80.......  81
* * * TABLE END * * *

Title XI-New towns demonstration program for emergency relief of
Los Angeles

Title XI would authorize such sums as necessary for a ``new
town'' demonstration program for certain areas of Los Angeles
affected by the civil disturbances in April and May of 1992. The
bill would establish criteria for the demonstration areas and
authorize funding for a number of assistance activities, such as
the construction and renovation of housing, the creation of jobs
and job training programs, the provision of social and supportive
services, and other community development activities.

As part of these programs, HUD would provide assistance in the
development of housing under the demonstration program. The bill
specifies a minimum number of units to be constructed with
assistance and requires that a portion of the assistance be
repaid. CBO estimates that such a program would cost about $32
million in 1993, assuming the minimum level of activity required
by the bill.

In addition, the bill would authorize such sums as necessary for
community development activities in the specified areas of Los
Angeles. CBO has no basis for a precise estimate of the cost of
this program. Funding for both of these programs could be as
small or large as the Congress deems appropriate for the
activities authorized.
* * * TABLE START * * *

ESTIMATED BUDGETARY IMPACT OF TITLE XI

 By fiscal year, in millions of dollars
                              1993 1994 1995 1996 1997

Estimated authorization level..32..........................

Estimated outlays.............  3... 6...10... 6....6

6. Pay-as-you-go considerations: The Budget Enforcement Act of
1990 sets up pay-as-you-go procedures for legislation affecting
direct spending or receipts through 1995. CBO estimates that the
provisions in Title V affecting loan subsidies of the Mutual
Mortgage Insurance Fund would affect direct spending. Therefore,
pay-as-you-go procedures would apply to this bill. CBO estimates
that the bill would result in a reduction in direct spending of
$43 million in 1993, $43 million in 1994, and $41 million in
1995.

7. Estimated cost to State and local governments: CBO estimates
that Title XI would result in costs to state and local
governments of about $11 million in fiscal year 1993. The title
would require that not less than 25 percent of the total amounts
used to carry out the new towns demonstration program be provided
by non-federal sources. While some of the nonfederal funding
could be provided through donations from private organizations,
CBO estimates that these amounts would not be significant and
that the majority of the funding would be provided by state and
local governments.

8. Estimate comparison: None.

9. Previous CBO estimate: None.

10. Estimate prepared by: Patricia Conroy, Marjorie Miller and
Brent Shipp and Carla Pedone.

11. Estimate approved by: C. G. Nuckols, Assistant Director for
Budget Analysis.

Congressional Budget Office Estimate\1\

The(FOOTNOTE) applicable cost estimate of this act for all
purposes of sections 252 and 253 of the Balanced Budget and
Emergency Deficit Control Act of 1985 shall be as follows:

(FOOTNOTE)\1\An estimate of H.R. 5334 as ordered reported by the
House Committee on Banking, Finance and Urban Affairs on June 16,
1992. This estimate was transmitted by the Congressional Budget
Office on July 30, 1992.
* * * TABLE START * * *

 By fiscal year, in millions of dollars
                         1992      1993      1994      1995

Changes in outlays.......  0.......43........43........41

Change in receipts.......(\1\).....(\1\).....(\1\).....(\1\)

FOOTNOTE: Not applicable.