To provide economic stimulus through emergency community development block grant assistance for the redevelopment of abandoned and foreclosed homes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Neighborhood Rescue and 
Stabilization Act of 2008''.

SEC. 2. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
              FORECLOSED HOMES.

    (a) Direct Appropriations.--There is authorized to be appropriated 
for fiscal year 2008, $10,000,000,000, to remain available until 
expended, for assistance to States, qualified metropolitan cities, and 
units of general local government for the redevelopment of abandoned 
and foreclosed homes.
    (b) Allocation of Appropriated Amounts.--
            (1) Allocation by hud for states.--Any amounts appropriated 
        or otherwise made available pursuant to this section shall be 
        allocated by the Secretary of Housing and Urban Development 
        among the States, and provided to the States, in amounts 
        determined according to the funding formula established 
        pursuant to paragraph (2).
            (2) Formula for allocation among states.--
                    (A) Establishment.--Not later than 60 days after 
                the date of the enactment of this Act, the Secretary 
                shall establish a funding formula under this paragraph.
                    (B) Criteria.--The funding formula under this 
                paragraph shall provide that, of the aggregate amount 
                appropriated or otherwise made available pursuant to 
                this section, the amount allocated for each State shall 
                be the amount that bears the same ratio to such 
                aggregate amount as the number of foreclosures on 
                mortgages for homes occurring in such State during the 
                most recently completed two calendar quarters for which 
                such information is available, as determined by the 
                Secretary, bears to the aggregate number of such 
                foreclosures occurring in all States during such 
                calendar quarters, as such amount is adjusted to 
                account for differences in the States in--
                            (i) the number and percentage of homes in a 
                        State that are financed by a subprime mortgage 
                        related loan;
                            (ii) the number and percentage of homes in 
                        a State in default or delinquency; and
                            (iii) the median home price in a State.
            (3) Distribution.--Amounts appropriated or otherwise made 
        available under this section shall be distributed to the States 
        according to the funding formula required under paragraph (2) 
        not later than 30 days after the establishment of such formula.
            (4) Allocation by states for qualified metropolitan 
        cities.--
                    (A) Requirement to allocate.--Of any amounts 
                allocated pursuant to this subsection for a State, such 
                State shall allocate for each qualified metropolitan 
                city located in such State an amount, as determined 
                according to the funding formula established pursuant 
                to subparagraph (B).
                    (B) Formula for allocation among states.--
                            (i) Establishment.--Not later than 60 days 
                        after the date of the enactment of this Act, 
                        the Secretary shall establish a funding formula 
                        under this subparagraph.
                            (ii) Criteria.--The funding formula under 
                        this subparagraph shall provide that, of the 
                        aggregate amount allocated pursuant to this 
                        subsection for a State, the amount allocated 
                        for a qualified metropolitan city located in 
                        the State shall be the amount that bears the 
                        same ratio to such aggregate amount as the 
                        number of foreclosures on mortgages for homes 
                        occurring in such qualified metropolitan city 
                        during the most recently completed two calendar 
                        quarters for which such information is 
                        available, as determined by the Secretary, 
                        bears to the aggregate number of such 
                        foreclosures occurring in such State during 
                        such calendar quarters, as such amount is 
                        adjusted to account for differences between the 
                        qualified metropolitan city in and State in--
                                    (I) the percentage of homes that 
                                are financed by a subprime mortgage 
                                related loan;
                                    (II) the percentage of homes in 
                                default or delinquency; and
                                    (III) the median home price.
            (5) Other amounts.--Any amounts allocated for a State that 
        are not allocated for a qualified metropolitan city pursuant to 
        paragraph (4) may be used for any units of general local 
        government in the State.
    (c) Use of Funds.--
            (1) In general.--Any State, qualified metropolitan city, or 
        unit of general local government that receives amounts pursuant 
        to this section shall, not later than 18 months after the 
        receipt of such amounts, use such amounts to redevelop 
        abandoned and foreclosed homes.
            (2) Priority.--Any State, qualified metropolitan city, or 
        unit of general local government that receives amounts pursuant 
        to this section shall in distributing such amounts give 
        priority emphasis and consideration to those metropolitan 
        areas, metropolitan cities, urban areas, rural areas, low- and 
        moderate-income areas, and other areas with the greatest need, 
        including those--
                    (A) with the greatest percentage of home 
                foreclosures;
                    (B) with the highest percentage of homes financed 
                by a subprime mortgage related loan; or
                    (C) identified by the State, qualified metropolitan 
                city, or unit of general local government as likely to 
                face a significant rise in the rate of home 
                foreclosures.
            (3) Eligible uses.--
                    (A) In general.--Amounts made available under this 
                section may be used only as follows:
                            (i) Financial assistance through 
                        institutions and organizations.--To make 
                        grants, loans, and other financing mechanisms 
                        to community development financial institutions 
                        (as such term is defined under section 103(5) 
                        of the Community Development Banking and 
                        Financial Institutions Act of 1994 (12 U.S.C. 
                        4702(5))), national intermediaries, and 
                        nonprofit housing or community development 
                        organizations and others to purchase and 
                        rehabilitate homes that have been abandoned or 
                        foreclosed upon, in order to sell, rent, or 
                        redevelop such homes.
                            (ii) Financing mechanisms for 
                        redevelopment.--To establish financing 
                        mechanisms for redevelopment of foreclosed upon 
                        homes, including such mechanisms as soft-
                        seconds, loan loss reserves, and shared-equity 
                        loans for low- and moderate-income homebuyers.
                            (iii) Purchase and rehabilitation for sale 
                        or rental.--To purchase and rehabilitate homes 
                        that have been abandoned or foreclosed upon, in 
                        order to sell, rent, or redevelop such homes.
                            (iv) Land banks.--To establish land banks 
                        for homes that have been foreclosed upon.
                            (v) Demolition.--To demolish blighted 
                        structures.
                            (vi) Project-based rental assistance.--To 
                        provide rental assistance for low- and 
                        moderate-income persons (as such term is 
                        defined in section 102 of the Housing and 
                        Community Development Act of 1974 (42 U.S.C. 
                        5302)) that is attached to single family and 
                        multifamily residences.
                            (vii) Project operating reserves.--To 
                        provide grants for use to cover the loss of 
                        rental assistance or in conjunction with a 
                        project loan that is attached to single family 
                        and multifamily residences.
                            (viii) Project operating subsidies.--To 
                        fund project operating accounts used to cover 
                        net operating income shortfalls for single and 
                        multifamily residences. Eligible operating 
                        costs shall include costs of management, taxes, 
                        handling, insurance, and other related costs.
                            (ix) CDBG-eligible activities.--To carry 
                        out any activities that, under section 105 of 
                        the Housing and Community Development Act of 
                        1974 (42 U.S.C. 5305), are eligible to be 
                        carried out with amounts provided under title I 
                        of such Act.
                    (B) Limitation.--Any funds used under this section 
                for the purchase of an abandoned or foreclosed upon 
                home shall be at a cost equal to or less than the 
                appraised value of the home based on the most up-to-
                date appraisal, as such appraisal is defined by the 
                Secretary.
    (d) Rule of Construction.--Amounts appropriated or otherwise made 
available to States, qualified metropolitan cities, and units of 
general local government under this section shall be treated as though 
such funds were community development block grant funds under title I 
of the Housing and Community Development Act of 1974.
    (e) Waiver Authority.--
            (1) In general.--In administering any amounts appropriated 
        or otherwise made available under this section, the Secretary 
        may waive, or specify alternative requirements for, any 
        provision of any statute or regulation that the Secretary 
        administers (but not including the requirements of this 
        section) in connection with the obligation by the Secretary or 
        the use by the recipient of such funds (except for requirements 
        related to fair housing, nondiscrimination, labor standards, 
        and the environment), in order to expedite or facilitate the 
        use of such funds.
            (2) Low and moderate income requirement.--Notwithstanding 
        the authority of the Secretary under paragraph (1)--
                    (A) all of the funds appropriated or otherwise made 
                available under this section shall be used with respect 
                to persons whose incomes do not exceed 120 percent of 
                area median income; and
                    (B) not less than 25 percent of the funds made 
                available under this section to any State, qualified 
                metropolitan city, or unit of general local government 
                shall be used with respect to persons whose incomes do 
                not exceed 30 percent of the area median income.
    (f) Definitions.--For purposes of this Act, the following 
definitions shall apply:
            (1) Qualified metropolitan city.--The term ``qualified 
        metropolitan city'' means a metropolitan city, as such term is 
        defined in section 102 of the Housing and Community Development 
        Act of 1974 (42 U.S.C. 5302), that has a population of not less 
        than 200,000, as determined by the 2000 decennial census.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (3) State; unit of general local government.--The terms 
        ``State'' and ``unit of general local government'' have the 
        meanings given such terms in section 102 of the Housing and 
        Community Development Act of 1974 (42 U.S.C. 5302).
    (g) Emergency Designation.--The amounts appropriated under this 
title are designated as an emergency requirement and necessary to meet 
emergency needs pursuant to section 204 of S . Con. Res. 21 (110th 
Congress), the concurrent resolution on the budget for fiscal year 
2008.

Summary: Neighborhood Rescue and Stabilization Act of 2008 - Authorizes for FY2008 appropriations for assistance to states and local governmental units for the redevelopment of abandoned and foreclosed homes. Requires the Secretary of Housing and Urban Development (HUD) to allocate the funds among the states according to a funding formula reflecting the ratio that home mortgage foreclosures occurring in a state bears to the aggregate number of such foreclosures occurring in all states. Requires states to allocate funds to qualified metropolitan cities according to a similar formula. Requires states and local governmental units to give priority to those metropolitan areas, metropolitan cities, urban areas, rural areas, low- and moderate-income areas, and other areas with the greatest need, including those: (1) with the greatest percentage of home foreclosures. (2) with the highest percentage of homes financed by a subprime mortgage related loan. Or (3) identified as likely to face a significant rise in the rate of home foreclosures. Cites eligible uses and redevelopment financing mechanisms. Sets forth low- and moderate-income requirements for the use of all funds made available under this Act.