I

103D CONGRESS

2D SESSION H. R. 4218

To reform certain housing programs administered by the Secretary of Housing

and Urban Development.

IN THE HOUSE OF REPRESENTATIVES

APRIL 14, 1994

Mr. DIAZ-BALART (for himself, Ms. ROYBAL-ALLARD, Mr. BECERRA, Mr.

BONILLA, Mr. DE LA GARZA, Mr. GUTIERREZ, Mr. DE LUGO, Mr.

MENENDEZ, Mr. ORTIZ, Mr. PASTOR, Mr. RICHARDSON, Mr. ROMEROBARCELO ́, Ms. ROS-LEHTINEN, Mr. SERRANO, Mr. TEJEDA, Mr.

TORRES, Mr. UNDERWOOD, and Ms. VELA ́ZQUEZ) introduced the following bill; which was referred to the Committee on Banking, Finance and

Urban Affairs

A BILL

To reform certain housing programs administered by the

Secretary of Housing and Urban Development.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Low-Income Housing

5 Incentive Act’’.
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1 SEC. 2. GAO STUDY REGARDING PUBLIC HOUSING DEMOLI2 TION AND DISPOSITION AND NEED FOR

3 LARGER PUBLIC HOUSING DWELLING UNITS.

4 (a) IN GENERAL.—The Comptroller General of the

5 United States shall conduct a study of public housing in

6 various areas and public housing agencies throughout the

7 United States, under which the Comptroller General

8 shall—

9 (1) determine whether the existing requirements

10 regarding demolition and disposition of public hous11 ing dwelling units prevent or inhibit public housing

12 agencies from effectively replacing severely dis13 tressed public housing dwelling units or result in the

14 continued operation or funding of severely distressed

15 public housing that should be replaced;

16 (2) develop a realistic plan that provides an ex17 pedited waiver of the existing rules regarding re18 placement of public housing dwelling units demol19 ished or disposed of in any case involving severely

20 distressed public housing in which the public housing

21 agency provides—

22 (A) an additional number of affordable

23 dwelling units comparable to the number demol24 ished or disposed of;

25 (B) services for the families in such new

26 dwelling units comparable to the services pro-
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1 vided for families in the public housing demol2 ished or disposed of; and

3 (C) protections sufficient to ensure assist4 ance for any family displaced because of the

5 demolition or disposition;

6 (3) determine—

7 (A) the legal and practical impediments to,

8 and the effectiveness of, allowing State and

9 local governments to provide financial assist10 ance to public housing agencies for the develop11 ment or acquisition of public housing dwelling

12 units to comply with the existing requirements

13 regarding the replacement of public housing

14 dwelling units demolished or disposed of; and

15 (B) the appropriateness of allowing title or

16 control of such housing to revert to the State

17 or local government after a specified period of

18 time, and, if appropriate, the appropriate period

19 of time before such reversion;

20 (4) the demand, among families eligible for oc21 cupancy in dwelling units in public housing and fam22 ilies residing in public housing, for dwelling units

23 consisting of more than 1 bedroom; and
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1 (5) whether existing public housing projects

2 have an appropriate number of such dwelling units,

3 taking into consideration the demand for such units.

4 The Comptroller General shall submit a report describing

5 the findings of the study conducted under this section not

6 later than the expiration of the 12-month period beginning

7 upon the date of the enactment of this Act.

8 (b) DEFINITIONS.—For purposes of this section, the

9 terms ‘‘public housing’’, ‘‘public housing agencies’’, and

10 ‘‘project’’ have the meanings given such terms in section

11 3(b) of the United States Housing Act of 1937.

12 SEC. 3. DEMONSTRATION PROGRAM OF ASSISTANCE TO

13 STATE HOUSING AGENCIES FOR DEVELOP14 MENT OF AFFORDABLE RENTAL HOUSING.

15 (a) AUTHORITY.—The Secretary of Housing and

16 Urban Development shall carry out a program under this

17 section to demonstrate the effectiveness of providing as18 sistance to qualified State housing agencies to carry out

19 affordable housing incentive loan programs in accordance

20 with the requirements of this section.

21 (b) ASSISTANCE.—Under the demonstration pro22 gram, the Secretary shall provide assistance, to the extent

23 amounts are provided in appropriation Acts for such as24 sistance, to qualified State housing agencies. Any assist25 ance provided under the demonstration program be used
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1 by the qualified State housing agency to carry out an af2 fordable housing incentive loan program that meets the

3 requirements of subsection (d).

4 (c) SCOPE AND AMOUNT.—Under the demonstration

5 program, the Secretary—

6 (1) may provide assistance to not more than 5

7 qualified State housing agencies;

8 (2) may not provide more than $5,000,000 to

9 any single qualified State housing agency in any sin10 gle fiscal year; and

11 (3) may not provide assistance to more than 1

12 qualified State housing agency for any single State.

13 (d) AFFORDABLE HOUSING INCENTIVE LOAN PRO14 GRAMS.—The Secretary may provide assistance under the

15 demonstration program to a qualified State housing agen16 cy only if the agency is carrying out, or provides assur17 ances to the Secretary (as the Secretary considers nec18 essary) that the agency will carry out, an affordable hous19 ing incentive loan program that meets the following re20 quirements:

21 (1) PURPOSE.—Under the loan program, the

22 qualified State housing agency shall provide first,

23 second, or other subordinate mortgage loans to spon24 sors, and provide guarantees for such loans made to

25 sponsors, only for the new construction or acquisi-
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1 tion and substantial rehabilitation of rental housing

2 projects consisting of 4 or more affordable, safe, and

3 sanitary dwelling units.

4 (2) DIVERSITY OF SIZE OF POPULATION.—The

5 loan program shall ensure that, in each fiscal year

6 in which loans and loan guarantees are available

7 under the program, loans and guarantees shall be

8 made available for providing housing in areas of

9 varying sizes of population, including rural areas,

10 small towns, small cities, and major metropolitan

11 areas, in accordance with the need in the State for

12 such housing in each such type of area.

13 (3) HOUSING PURPOSES.—The loan program

14 shall ensure that, in each fiscal year in which loans

15 and loan guarantees are available under the pro16 gram, loans and guarantees are made available for

17 providing housing for farmworkers, for families, and

18 for elderly families, in accordance with the need in

19 the State for each type of housing.

20 (4) LOW-INCOME USE.—The loan program shall

21 require the sponsor of the housing for which a loan

22 or guarantee is made under the program to enter

23 into a contract with the qualified State housing

24 agency that provides that, for the term of the loan

25 or 12 years, whichever is longer—
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1 (A) if the housing is financed by a first

2 mortgage loan provided using any obligation the

3 interest on which is excluded from gross income

4 for purposes of the Internal Revenue Code of

5 1986—

6 (i) not less than 20 percent of the

7 dwelling units in the project shall be avail8 able for occupancy only by low-income fam9 ilies; and

10 (ii) the rent charged for such units

11 does not exceed 30 percent of the adjusted

12 income of a family whose income is equal

13 to 80 percent of the median income for the

14 area, as determined by the Secretary, with

15 adjustment for the number of bedrooms in

16 the unit;

17 (B) if the housing is financed by a first

18 mortgage loan that is not provided using any

19 obligation the interest on which is excluded

20 from gross income for purposes of the Internal

21 Revenue Code of 1986—

22 (i) not less than 20 percent of the

23 dwelling units in the project shall be avail24 able for occupancy only by very low-income

25 families; and
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1 (ii) the rent charged for such units

2 does not exceed 30 percent of the adjusted

3 income of a family whose income is equal

4 to 50 percent of the median income for the

5 area, as determined by the Secretary, with

6 adjustment for the number of bedrooms in

7 the unit; and

8 (C) if the sponsor uses a low-income hous9 ing tax credit under section 42 of the Internal

10 Revenue Code of 1986, the housing complies

11 with the requirements under such section re12 garding tenant income eligibility.

13 (5) FIRST MORTGAGE LOANS.—Under the loan

14 program, first mortgage loans and guarantees of

15 first mortgage loans shall be available only to spon16 sors that are nonprofit organizations and public

17 agencies that have binding commitments for finan18 cial or land contributions from sources other than

19 the loan program.

20 (6) LOAN AMOUNT.—Except as provided in

21 paragraph (7), a loan made or guaranteed under the

22 loan program may not be in an amount exceeding

23 the lesser of—

24 (A) 25 percent of the total cost of the

25 housing project; or
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1 (B) the minimum amount necessary to

2 make the project economically feasible.

3 (7) LOAN AMOUNT FOR LOW-INTEREST

4 LOANS.—In the case of a sponsor of a project eligi5 ble for a loan at the interest rate under paragraph

6 (10)(A) or a sponsor eligible for a first mortgage

7 loan or guarantee, a loan made or guaranteed under

8 the program may be in an amount exceeding 25 per9 cent of the total cost of the project, but may not ex10 ceed the minimum amount necessary to make the

11 project economically feasible.

12 (8) TOTAL AMOUNT OF FINANCING.—The loan

13 program shall provide that the aggregate amount of

14 the loan made or guaranteed under the loan pro15 gram and any other loan for the project to which the

16 loan under the program is subordinate may not ex17 ceed the value of the project (not taking into consid18 eration low-income use requirement under paragraph

19 (4)).

20 (9) LOAN TERM.—The program shall provide

21 that a loan made or guaranteed under the program

22 shall have a term not exceeding 15 years, except

23 that—

24 (A) in the case of a loan for a project for

25 which a low-income housing tax credit under
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1 section 42 of the Internal Revenue Code of

2 1986 is to be used to assist the housing, the

3 term may be established by the qualified State

4 housing agency at a duration commensurate

5 with the investment requirements associated

6 with the tax credit syndication;

7 (B) in the case of a loan for the purpose

8 of making safety, building preservation, health,

9 sanitation, or security-related repairs or im10 provements to a housing project for elderly

11 families that are required under Federal, State,

12 or local law, the term may not exceed 10 years

13 and the sponsor shall enter into a binding com14 mitment to provide an amount equal to not less

15 than 25 percent of the amount of the loan for

16 the costs of such repairs or improvements; and

17 (C) the term may be extended for the pur18 pose of extending the term of the low-income

19 use requirements under paragraph (4) applica20 ble to the housing for which the loan was made;

21 and

22 (10) INTEREST RATE.—The interest rate for a

23 loan made or guaranteed under the program may be

24 variable or fixed, but shall be—
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1 (A) not more than 3 percent per annum

2 for loans made for—

3 (i) housing for which the sponsor en4 ters into a binding agreement with the

5 qualified State housing agency that not

6 less than 80 percent of the dwelling units

7 shall be available for occupancy only by

8 farmworkers; or

9 (ii) the purpose under paragraph

10 (9)(B); and

11 (B) not less than 3 percent per annum and

12 not more than 9 percent per annum, for loans

13 for other types of housing.

14 (11) SELECTION OF PROJECTS.—The loan pro15 gram shall provide a competitive process for select16 ing among sponsors of housing projects applying for

17 loans under the program, which shall be based on

18 criteria that include the extent to which—

19 (A) the project achieves the objectives

20 under the loan program regarding income and

21 demographic characteristics of tenants;

22 (B) the project achieves the objectives

23 under the loan program regarding distribution

24 of available loan amounts among urban, rural,

25 and other areas;
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1 (C) dwelling units in the housing project

2 are reserved for occupancy only by low- or very

3 low-income families and rented at amounts not

4 exceeding the amount provided under para5 graph (4), for a duration longer than required

6 under paragraph (4) or any other applicable

7 Federal law;

8 (D) the number of dwelling units in the

9 housing project that are reserved for occupancy

10 only by low- or very low-income families and

11 rented at amounts not exceeding the applicable

12 amount under paragraph (4) exceeds the num13 ber of units required under paragraph (4);

14 (E) counseling is provided for tenants of

15 the housing;

16 (F) tenants of the housing are permitted

17 to use rental assistance vouchers or certificates

18 provided pursuant to Federal or State law to

19 pay for rental of units in the project;

20 (G) the ratio of the total cost of the

21 project to the amount of the loan made under

22 the loan program for the project exceeds such

23 ratio for other projects for which applications

24 are made;
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1 (H) contributions for the project, or com2 mitments to make such contributions, have been

3 made by units of general local government;

4 (I) the project is feasible and economically

5 viable;

6 (J) a commitment for first mortgage fi7 nancing for the project has been made; and

8 (K) the sponsor has experience in provid9 ing affordable housing and the ability to com10 plete the project.

11 (12) USE OF RENTAL CERTIFICATES.—The

12 loan program shall require that, if any voucher or

13 certificate for rental assistance provided pursuant to

14 Federal or State law is used for rental of any dwell15 ing unit reserved for occupancy pursuant to para16 graph (4), the benefit of the voucher or certificate

17 shall be equally divided between the fund established

18 under paragraph (16) and the sponsor of the hous19 ing.

20 (13) LOAN TRANSFER.—A loan made or guar21 anteed under the program shall be subject to sale,

22 transfer, or refinancing, except that all requirements

23 and conditions of the loan shall apply after such

24 sale, transfer or refinancing.
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1 (14) RENT CONTROLS.—The loan program

2 shall provide that housing provided with a loan

3 under the program shall not be subject to any State

4 or local law, regulation, or ordinance that regulates,

5 limits, or controls rents.

6 (15) ANNUAL INCOME CERTIFICATION.—The

7 loan program shall require sponsors of housing fi8 nanced with loans made or guaranteed under the

9 program to annually certify to the qualified State

10 housing agency the income of tenants of the housing

11 for purposes of ensuring compliance with the low-in12 come occupancy requirements under paragraph (4).

13 (16) TRUST FUND.—The loan program shall es14 tablish a revolving fund, which shall—

15 (A) be administered by the qualified State

16 housing agency;

17 (B) be credited with (i) the amount of any

18 assistance provided under the demonstration

19 program for the loan program, (ii) any other

20 amounts received to carry out the loan pro21 gram, (iii) any proceeds derived from the use of

22 such amounts, (iv) any repayments of loans

23 made under the loan program (together with in24 terest on loan amounts), (v) any proceeds from

25 any property sold, transferred, conveyed, or
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1 leased under the loan program, and (vi) any

2 other amounts received pursuant to activities

3 under the loan program; and

4 (C) be available only for making and guar5 anteeing loans under the loan program and

6 other costs of the loan program.

7 (17) POWERS OF SHFA.—The qualified State

8 housing agency shall have the power, under the loan

9 program—

10 (A) in the event of a default on a loan

11 made or guaranteed under the program, to

12 foreclose on any mortgage or security interest

13 or commence any legal action to protect the in14 terest of the agency or fund established under

15 paragraph (16) and recover the amount of the

16 unpaid principal, accrued interest, and fees on

17 behalf of such fund;

18 (B) to acquire real and personal property

19 and interests therein when such acquisition is

20 appropriate to protect any loan;

21 (C) to sell, transfer, or convey any such

22 property, and in the event that a sale, transfer,

23 or conveyance can not be made within a reason24 able time, to lease such property for occupancy

25 by eligible families;
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1 (D) to negotiate with units of general local

2 government within the State for contributions

3 for housing provided with a loan made or guar4 anteed under the loan program; and

5 (E) to inspect the books, records, accounts,

6 files, and papers of sponsors of housing pro7 vided with a loan made or guaranteed under the

8 loan program, to the extent necessary to make,

9 guarantee, and service loans under the loan

10 program.

11 (e) REPORTS.—

12 (1) TO SECRETARY.—Each qualified State

13 housing agency that receives assistance under the

14 demonstration program under this section in a fiscal

15 year shall submit a report to the Secretary regarding

16 the activities under the loan program carried out by

17 the agency during such fiscal year. The report shall

18 be submitted not later than the expiration of the 3-

19 month period beginning upon the end of the fiscal

20 year for which the report is made and shall contain

21 such information as the Secretary shall require.

22 (2) TO CONGRESS.—The Secretary shall submit

23 a report to the Congress for each fiscal year in

24 which the Secretary provides assistance under the

25 demonstration program under this section to quali-
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1 fied State housing agencies. The report shall be sub2 mitted not later than the expiration of the 3-month

3 period beginning upon the end of the fiscal year for

4 which the report is made and shall describe the dem5 onstration program under this section, the amount

6 of assistance provided under the program and the

7 affordable housing incentive loan programs assisted,

8 and the housing assisted by such programs with

9 amounts under this section.

10 (f) DEFINITIONS.—For purposes of this section, the

11 following definitions shall apply:

12 (1) The term ‘‘demonstration program’’ means

13 the demonstration program for assistance carried

14 out under this section by the Secretary.

15 (2) The term ‘‘elderly family’’ means a family

16 whose head (or their spouse), or whose sole member,

17 is a person who is at least 62 years of age. The term

18 includes 2 or more persons of such age living to19 gether, and 1 or more persons of such age living

20 with 1 or more persons determined to be essential to

21 their care or well-being.

22 (3) The term ‘‘farmer’’ means a person (and

23 the family of such person) who receives a substantial

24 portion of his or her income from primary produc25 tion of agricultural or aquacultural commodities or
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1 the handling of such commodities in the unprocessed

2 stage, and includes any person (and the family of

3 such person) who is retired or disabled, but was a

4 farmworker at the time of retirement or becoming

5 disabled.

6 (4) The term ‘‘first mortgage’’ means such

7 classes of first liens or interests in property as are

8 commonly given to secure advances on, or the un9 paid purchase price of, real estate under the laws of

10 the State in which the real estate is located, together

11 with the credit instrument, if any, secured thereby.

12 (5) The terms ‘‘income’’ and ‘‘adjusted income’’

13 have the meanings given the terms in section 3(b)

14 of the United States Housing Act of 1937.

15 (6) The term ‘‘loan program’’ means an afford16 able housing incentive loan program carried out by

17 a qualified State housing agency.

18 (7) The terms ‘‘low-income families’’ and ‘‘very

19 low-income families’’ have the meanings given such

20 terms in section 3(b) of the United States Housing

21 Act of 1937.

22 (8) The term ‘‘mortgage’’ means a first or sub23 ordinate mortgage on real estate, in fee simple, or

24 on a leasehold (A) under a lease for not less than

25 99 years which is renewable, or (B) under a lease
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1 having a period of not less than 10 years to run be2 yond the maturity date of the mortgage.

3 (9) The term ‘‘nonprofit organization’’ means a

4 private organization—

5 (A) no part of the net earnings of which

6 inures to the benefit of any member, share7 holder, founder, contributor, or individual; and

8 (B) that is approved by the qualified State

9 housing agency involved as to financial respon10 sibility.

11 (10) The term ‘‘qualified State housing agency’’

12 means any—

13 (A) public body or agency, publicly spon14 sored corporation, or instrumentality of one or

15 more States that is designated by the chief ex16 ecutive officer of the State or States for pur17 poses of section 802 of the Housing and Com18 munity Development Act of 1974; or

19 (B) any other agency of a State authorized

20 to carry out activities under this section that

21 the Secretary determines is capable of partici22 pating in the demonstration program.

23 (11) The term ‘‘Secretary’’ means the Secretary

24 of Housing and Urban Development.
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1 (12) The term ‘‘sponsor’’ includes nonprofit

2 and for-profit organizations and entities and public

3 agencies and entities.

4 (13) The term ‘‘State’’ means the States of the

5 United States, the District of Columbia, the Com6 monwealth of Puerto Rico, the Commonwealth of the

7 Northern Mariana Islands, Guam, the Virgin Is8 lands, American Samoa, and any other territory or

9 possession of the United States.

10 (14) The term ‘‘substantial rehabilitation’’

11 means repair or rehabilitation of a dwelling unit the

12 cost of which exceeds 40 percent of the value of the

13 dwelling unit before such rehabilitation.

14 (15) The term ‘‘unit of general local govern15 ment’’ means any city, town, township, county, par16 ish, village, or other general purpose political sub17 division of a State.

18 (g) REGULATIONS.—The Secretary shall issue any

19 regulations necessary to carry out the demonstration pro20 gram under this section.

21 (h) AUTHORIZATION OF APPROPRIATIONS.—There is

22 authorized to be appropriated to carry out this section

23 $20,000,000 for fiscal year 1995 and $20,000,000 for fis24 cal year 1996.
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1 (i) TERMINATION OF DEMONSTRATION.—The Sec2 retary may not provide assistance under the demonstra3 tion program under this section after the conclusion of the

4 5th fiscal year that begins after the date of the enactment

5 of this Act.

6 SEC. 4. MERGER OF SECTION 8 CERTIFICATE AND VOUCH7 ER PROGRAMS.

8 (a) IN GENERAL.—Section 8 of the United States

9 Housing Act of 1937 (42 U.S.C. 1437f) is amended to

10 read as follows:

11 ‘‘RENTAL HOUSING ASSISTANCE FOR LOW-INCOME

12 FAMILIES

13 ‘‘SEC. 8. (a) AUTHORITY AND PURPOSE.—

14 ‘‘(1) IN GENERAL.—For the purposes of aiding

15 low-income families in obtaining a decent place to

16 live and promoting economically mixed housing, the

17 Secretary may provide assistance payments with re18 spect to existing housing in accordance with the pro19 visions of this section.

20 ‘‘(2) ELDERLY HOUSING.—Notwithstanding any

21 other provision of this Act, assistance payments

22 under this section may be provided, in accordance

23 with regulations prescribed by the Secretary, with

24 respect to some or all of the units in any project ap25 proved pursuant to section 202 of the Housing Act

26 of 1959 (as in effect before October 1, 1991).
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1 ‘‘(b) ANNUAL CONTRIBUTIONS CONTRACTS FOR

2 RENTAL ASSISTANCE.—

3 ‘‘(1) IN GENERAL.—The Secretary may enter

4 into annual contributions contracts under this sub5 section with public housing agencies to provide rent6 al housing assistance under this section for low-in7 come families. The Secretary shall enter into a sepa8 rate annual contributions contract with each public

9 housing agency to obligate the authority approved

10 each year. Each such annual contributions contract

11 shall bind the Secretary to make such authority, and

12 any amendments increasing such authority, available

13 to the public housing agency for a specified period.

14 ‘‘(2) SECRETARY ACTING AS PHA.—In areas

15 where no public housing agency has been organized

16 or where the Secretary determines that a public

17 housing agency is unable to implement the provi18 sions of this section, the Secretary may enter into

19 such contracts and perform the other functions as20 signed to a public housing agency by this section.

21 ‘‘(3) TREATMENT OF ASSISTANCE FOR SUP22 PORTIVE HOUSING FOR THE DISABLED.—The Sec23 retary may not consider the receipt by a public hous24 ing agency of assistance under section 811(b)(1) of

25 the Cranston-Gonzalez National Affordable Housing
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1 Act, or the amount received, in approving assistance

2 under this section for the agency or in determining

3 the amount of such assistance to be provided to the

4 agency.

5 ‘‘(c) ASSISTANCE CONTRACTS.—

6 ‘‘(1) IN GENERAL.—Each public housing agen7 cy that receives amounts under an annual contribu8 tions contract may enter into assistance contracts to

9 make rental assistance payments to owners of exist10 ing dwelling units in accordance with the provisions

11 of this section.

12 ‘‘(2) PHA ACTING AS OWNER.—A public hous13 ing agency may contract to make rental assistance

14 payments under this section to itself (or any agency

15 or instrumentality thereof) as the owner of dwelling

16 units, and the agency shall be subject to the same

17 program requirements as are applied to other own18 ers. In such cases, the Secretary may establish ini19 tial rents within applicable limits.

20 ‘‘(3) INAPPLICABLE PROVISIONS.—Sections 5(e)

21 and 6 and any other provisions of this Act that are

22 inconsistent with the provisions of this section shall

23 not apply to assistance contracts entered into pursu24 ant to this section.

25 ‘‘(d) MAXIMUM MONTHLY RENT.—
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1 ‘‘(1) IN GENERAL.—Each assistance contract

2 entered into pursuant to this section shall establish

3 the maximum monthly rent (including utilities and

4 all maintenance and management charges) that the

5 owner is entitled to receive for each dwelling unit for

6 which rental assistance payments are to be made

7 under the contract. Except as provided in paragraph

8 (2), the maximum monthly rent shall not exceed by

9 more than 10 percent the fair market rental under

10 subsection (e) for the market area in which the

11 dwelling unit is located. If units assisted under this

12 section are exempt from local rent control while they

13 are so assisted or otherwise, the maximum monthly

14 rent for such units shall be reasonable in comparison

15 with other units in the market area that are exempt

16 from local rent control.

17 ‘‘(2) EXCEPTION.—The maximum monthly rent

18 may exceed the fair market rental by more than 10

19 but not more than 20 percent, but only if the Sec20 retary determines that special circumstances warrant

21 such higher maximum rent or that such higher rent

22 is necessary to the implementation of a comprehen23 sive housing affordability strategy under section 105

24 of the Cranston-Gonzalez National Affordable Hous25 ing Act.
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1 ‘‘(3) ANNUAL ADJUSTMENTS.—Each assistance

2 contract shall provide for adjustment in the maxi3 mum monthly rents for units covered by the contract

4 not less than annually to reflect changes in the fair

5 market rentals established under subsection (e) for

6 the housing area for similar types and sizes of dwell7 ing units or, if the Secretary determines, on the

8 basis of a reasonable formula.

9 ‘‘(4) ADJUSTMENTS DUE TO EXPENSES.—Each

10 assistance contract shall further provide for the Sec11 retary to make additional adjustments in the maxi12 mum monthly rent for units assisted under the con13 tract to the extent the Secretary determines such ad14 justments are necessary to reflect increases in the

15 actual and necessary expenses of owning and main16 taining the units that have resulted from substantial

17 general increases in real property taxes, utility rates,

18 or similar costs that are not adequately compensated

19 for by the adjustment in the maximum monthly rent

20 authorized by paragraph (3). The Secretary shall

21 make additional adjustments in the maximum

22 monthly rent for units under contract (subject to the

23 availability of appropriations for contract amend24 ments) to the extent the Secretary determines such

25 adjustments are necessary to reflect increases in the
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1 actual and necessary expenses of owning and main2 taining the units that have resulted from the expira3 tion of a real property tax exemption.

4 ‘‘(5) ADJUSTMENTS DUE TO CRIMINAL ACTIV5 ITY.—If the Secretary determines that a project as6 sisted under this section is located in a community

7 where criminal activity is generally prevalent and the

8 operating, maintenance, and capital repair expenses

9 for the project have been substantially increased pri10 marily as a result of the prevalence of such activity,

11 the Secretary may (at the discretion of the Secretary

12 and subject to the availability of appropriations for

13 contract amendments for this purpose), on a project14 by-project basis, provide adjustments to the maxi15 mum monthly rents, to a level not exceeding 120

16 percent of the project rents, to cover the costs of

17 maintenance, security, capital repairs, and reserves

18 required for the owner to carry out a strategy ac19 ceptable to the Secretary for addressing the problem

20 of criminal activity. The Secretary may waive the

21 applicability of any rent comparability standard re22 quired under this subsection to implement this para23 graph.

24 ‘‘(6) ADJUSTMENTS DUE TO LEAD-BASED

25 PAINT REDUCTION FOR HOUSING RECEIVING
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1 PROJECT-BASED ASSISTANCE.—The Secretary may

2 (at the discretion of the Secretary and subject to the

3 availability of appropriations for contract amend4 ments), on a project-by-project basis for projects re5 ceiving project-based assistance, provide adjustments

6 to the maximum monthly rents to cover the costs of

7 evaluating and reducing lead-based paint hazards, as

8 defined in section 1004 of the Residential Lead9 Based Paint Hazard Reduction Act of 1992.

10 ‘‘(7) LIMITATIONS ON ADJUSTMENTS.—

11 ‘‘(A) GENERAL COMPARABILITY RULE.—

12 Adjustments in the maximum rents under para13 graphs (3) through (6) shall not result in mate14 rial differences between the rents charged for

15 assisted units and unassisted units of similar

16 quality, type, and age in the same market area,

17 as determined by the Secretary.

18 ‘‘(B) COMPARABILITY STUDIES.—

19 ‘‘(i) To carry out subparagraph (A),

20 the Secretary shall issue regulations to

21 provide for conducting comparability stud22 ies for projects where the Secretary has

23 reason to believe that the application of the

24 formula adjustments under paragraph (3)

25 would result in such material differences.
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1 The Secretary shall conduct such studies

2 upon the request of any owner of any

3 project, or as the Secretary determines to

4 be appropriate by establishing, to the ex5 tent practicable, a modified annual adjust6 ment factor for such market area, as the

7 Secretary shall designate, that is geo8 graphically smaller than the applicable

9 housing area used for the establishment of

10 the annual adjustment factor under para11 graph (3). The Secretary shall establish

12 such modified annual adjustment factor on

13 the basis of the results of a study con14 ducted by the Secretary of the rents

15 charged, and any change in such rents

16 over the previous year, for assisted units

17 and unassisted units of similar quality,

18 type, and age in the smaller market area.

19 Where the Secretary determines that such

20 modified annual adjustment factor cannot

21 be established or that such factor when ap22 plied to a particular project would result in

23 material differences between the rents

24 charged for assisted units and unassisted

25 units of similar quality, type, and age in
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1 the same market area, the Secretary may

2 apply an alternative methodology for con3 ducting comparability studies in order to

4 establish rents that are not materially dif5 ferent from rents charged for comparable

6 unassisted units.

7 ‘‘(ii) If the Secretary or appropriate

8 State agency does not complete and submit

9 to the project owner a comparability study

10 not later than 60 days before the anniver11 sary date of the assistance contract under

12 this section, the automatic annual adjust13 ment factor shall be applied. The Secretary

14 may not reduce the contract rents in effect

15 on or after April 15, 1987, for newly con16 structed, substantially rehabilitated, or

17 moderately rehabilitated projects assisted

18 under this section (including projects as19 sisted under this section as in effect prior

20 to November 30, 1983), unless the project

21 has been refinanced in a manner that re22 duces the periodic payments of the owner.

23 Any maximum monthly rent that has been

24 reduced by the Secretary after April 14,

25 1987, and prior to November 7, 1988,
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1 shall be restored to the maximum monthly

2 rent in effect on April 15, 1987.

3 ‘‘(iii) For any project which has had

4 its maximum monthly rents reduced after

5 April 14, 1987, the Secretary shall make

6 assistance payments (from amounts re7 served for the original contract) to the

8 owner of such project in an amount equal

9 to the difference between the maximum

10 monthly rents in effect on April 15, 1987,

11 and the reduced maximum monthly rents,

12 multiplied by the number of months that

13 the reduced maximum monthly rents were

14 in effect.

15 ‘‘(e) FAIR MARKET RENTALS.—

16 ‘‘(1) IN GENERAL.—The Secretary shall estab17 lish fair market rentals under this subsection peri18 odically, but not less than annually, for existing

19 rental dwelling units suitable for occupancy by low20 income families assisted under this section. The Sec21 retary shall establish the fair market rental by mar22 ket area for various sizes and types of dwelling

23 units.

24 ‘‘(2) EFFECTIVENESS AND ADJUSTMENT.—The

25 Secretary shall publish proposed fair market rentals
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•HR 4218 IH

1 for each area in the Federal Register with reason2 able time for public comment, and such fair market

3 rentals shall become effective upon the date of publi4 cation in final form in the Federal Register. Each

5 fair market rental in effect under this subsection

6 shall be adjusted to be effective on October 1 of each

7 year to reflect changes, based on the most recent

8 available data trended so the rentals will be current

9 for the year to which they apply, of rents for exist10 ing rental dwelling units, as the case may be, of var11 ious sizes and types in the market area suitable for

12 occupancy by families assisted under this section.

13 ‘‘(3) CERTAIN AREAS.—The Secretary shall es14 tablish separate fair market rentals under this sub15 section for Westchester County in the State of New

16 York. The Secretary shall also establish separate fair

17 market rentals under this paragraph for Monroe

18 County in the Commonwealth of Pennsylvania. In

19 establishing fair market rentals for the remaining

20 portion of the market areas in which Monroe County

21 is located, the Secretary shall establish the fair mar22 ket rentals as if such portion included Monroe

23 County.

24 ‘‘(f) AMOUNT OF MONTHLY ASSISTANCE PAY25 MENT.—
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•HR 4218 IH

1 ‘‘(1) IN GENERAL.—The amount of the monthly

2 assistance payment under this section with respect

3 to any dwelling unit shall be the difference between

4 the maximum monthly rent that the contract pro5 vides that the owner is to receive for the unit and

6 the rent the family is required to pay under section

7 3(a).

8 ‘‘(2) INCREASES IN ASSISTANCE PAYMENTS.—

9 The Secretary shall take any action necessary, in10 cluding making contracts for assistance payments in

11 amounts exceeding the amounts required upon the

12 initial renting of dwelling units, reserving annual

13 contributions authority for the purpose of amending

14 assistance contracts, or allocating a portion of new

15 authorizations for the purpose of amending assist16 ance contracts, to ensure that assistance payments

17 are increased on a timely basis to cover increases in

18 maximum monthly rents or decreases in family in19 comes.

20 ‘‘(3) REVIEWS OF FAMILY INCOMES.—

21 ‘‘(A) IN GENERAL.—Reviews of family in22 comes for purposes of this section shall be made

23 annually and shall be subject to the provisions

24 of section 904(e) of the Stewart B. McKinney

25 Homeless Assistance Amendments Act of 1988.
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•HR 4218 IH

1 Any other reviews of family incomes under this

2 paragraph may be used only for the purpose of

3 ensuring that a family does not pay as rent for

4 a dwelling unit assisted under this section more

5 than the amount required under section 3(a).

6 ‘‘(B) PROCEDURES.—The Secretary shall

7 establish procedures that are appropriate and

8 necessary to ensure that income data provided

9 to public housing agencies and owners by fami10 lies applying for or receiving assistance under

11 this section is complete and accurate. In estab12 lishing such procedures, the Secretary shall an13 nually select a random sample of families to au14 thorize the Secretary to obtain information on

15 the families for the purpose of income verifica16 tion, or to allow the families to provide such in17 formation themselves. Such information may in18 clude data concerning unemployment compensa19 tion and Federal income taxation and data re20 lating to benefits made available under the So21 cial Security Act, the Food Stamp Act of 1977,

22 or title 38, United States Code.

23 ‘‘(C) CONFIDENTIALITY.—Any income in24 formation received pursuant to this paragraph

25 shall remain confidential and shall be used only
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1 for the purpose of verifying incomes in order to

2 determine eligibility of families for benefits (and

3 the amount of such benefits, if any) under this

4 section.

5 ‘‘(g) ELIGIBILITY OF UNITS FOR ASSISTANCE.—

6 Each assistance contract shall provide that assistance pay7 ments may be made only with respect to the following

8 dwelling units:

9 ‘‘(1) OCCUPIED UNITS.—A dwelling unit under

10 lease for occupancy by a family determined to be a

11 low-income family at the time it initially occupies the

12 dwelling unit or by a family that qualifies to receive

13 assistance under this section pursuant to section 223

14 or 226 of the Low-Income Housing Preservation and

15 Resident Homeownership Act of 1990.

16 ‘‘(2) UNOCCUPIED UNITS.—An unoccupied

17 dwelling unit, but only if—

18 ‘‘(A)(i) a family vacates the dwelling unit

19 before the expiration date of the lease for occu20 pancy, or (ii) a good faith effort is being made

21 to fill the unoccupied unit; and

22 ‘‘(B) the costs of such vacancy are not

23 charged to or paid by the family vacating the

24 dwelling unit.
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•HR 4218 IH

1 Payments for units referred to in this paragraph

2 may be made only for a period not exceeding 60

3 days, except that such payments may be made, in

4 the case of a newly constructed or substantially re5 habilitated project, after the expiration of such 60-

6 day period in an amount equal to the debt service

7 attributable to such an unoccupied dwelling unit for

8 a period not to exceed one year, if a good faith effort

9 is being made to fill the unit and the unit provides

10 decent, safe, and sanitary housing. No such payment

11 may be made after the expiration of such 60-day pe12 riod if the Secretary determines that the dwelling

13 unit is in a project which provides the owner with

14 revenues exceeding the costs incurred by such owner

15 with respect to such project.

16 ‘‘(h) OTHER PROVISIONS OF ASSISTANCE CON17 TRACTS.—Contracts to make assistance payments entered

18 into by any public housing agency (or by the Secretary)

19 with an owner of existing housing units shall meet the

20 following requirements:

21 ‘‘(1) CONTRACT TERM.—Each assistance con22 tract shall have a term of not less than one month

23 nor more than 180 months. The Secretary shall per24 mit public housing agencies to enter into assistance

25 contracts having terms of less than 12 months to the
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•HR 4218 IH

1 extent necessary to avoid disruption in assistance to

2 eligible families if the annual contributions contract

3 for the agency under subsection (b) will expire with4 in 1 year.

5 ‘‘(2) PREFERENCES.—Each assistance contract

6 shall provide that, in making assistance available

7 pursuant to the contract—

8 ‘‘(A) for not less than 70 percent of the

9 families who initially receive project-based as10 sistance, and

11 ‘‘(B) for not less than 90 percent of the

12 families who initially receive tenant-based as13 sistance in any 1-year period,

14 preference shall be given to families that (i) occupy

15 substandard housing (including families that are

16 homeless or living in a shelter for homeless families),

17 (ii) are paying more than 50 percent of family in18 come for rent, (iii) are involuntarily displaced (in19 cluding displacement because of disposition of a mul20 tifamily housing project under section 203 of the

21 Housing and Community Development Amendments

22 of 1978) at the time they are seeking assistance

23 under this section, or (iv) are residing in public

24 housing.
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•HR 4218 IH

1 ‘‘(3) SECONDARY PREFERENCES.—Each assist2 ance contract shall provide that, for any assistance

3 remaining in any 1-year period after assistance is

4 made available pursuant to paragraph (2), pref5 erence for such assistance shall be given to families

6 who qualify under a system of local preferences es7 tablished by the public housing agency in writing

8 and after public hearing to respond to local housing

9 needs and priorities, which may include—

10 ‘‘(A) assisting very low-income families

11 who either reside in transitional housing as12 sisted under title IV of the Stewart B. McKin13 ney Homeless Assistance Act or participate in

14 a program designed to provide public assistance

15 recipients with greater access to employment

16 and educational opportunities;

17 ‘‘(B) assisting families in accordance with

18 subsection (q)(1)(B);

19 ‘‘(C) assisting families identified by local

20 public agencies involved in providing for the

21 welfare of children as having a lack of adequate

22 housing that is a primary factor in the immi23 nent placement of a child in foster care, or in

24 preventing the discharge of a child from foster

25 care and reunification with his or her family;
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•HR 4218 IH

1 ‘‘(D) assisting youth, upon discharge from

2 foster care, in cases in which return to the fam3 ily or extended family or adoption is not avail4 able;

5 ‘‘(E) assisting veterans who are eligible

6 and have applied for assistance, will use the as7 sistance for a dwelling unit designed for the

8 handicapped, and, upon discharge or eligibility

9 for discharge from a hospital or nursing home,

10 have physical disability which, because of the

11 configuration of their homes, prevents them

12 from access to or use of their homes; and

13 ‘‘(F) achieving other objectives of national

14 housing policy as established by law.

15 ‘‘(4) TENANT SELECTION.—Each assistance

16 contract shall provide that the selection of tenants

17 for such dwelling units shall be the function of the

18 owner, subject to any provisions of the annual con19 tributions contract between the Secretary and the

20 agency. The owner shall use tenant selection criteria,

21 which shall provide as follows:

22 ‘‘(A) PROHIBITION OF PERSONS ENGAGED

23 IN DRUG ACTIVITY.—The criteria shall prohibit

24 any individual or family evicted from housing

25 assisted under this Act by reason of drug-relat-
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•HR 4218 IH

1 ed criminal activity from having a preference

2 under any provision of this paragraph for 3

3 years unless the evicted tenant successfully

4 completes a rehabilitation program approved by

5 the agency or owner. The agency or the owner

6 may waive the application of the preceding sen7 tence under standards established by the Sec8 retary, which shall provide for such waiver for

9 any member of a family of an individual prohib10 ited from tenancy under this subparagraph who

11 the agency or owner determines clearly did not

12 participate in and had no knowledge of such

13 criminal activity or when circumstances leading

14 to eviction no longer exist.

15 ‘‘(B) OTHER REQUIREMENTS FOR

16 PROJECT-BASED ASSISTANCE.—With respect

17 only to project-based assistance, the criteria

18 shall—

19 ‘‘(i) be consistent with the purpose of

20 improving housing opportunities for very

21 low-income families;

22 ‘‘(ii) be reasonably related to program

23 eligibility and an applicant’s ability to per24 form the obligations of the assisted lease;

25 ‘‘(iii) be established in writing; and
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•HR 4218 IH

1 ‘‘(iv) provide for the owner to prompt2 ly provide to any rejected applicant (I)

3 written notice of the grounds for the rejec4 tion, and (II) an opportunity to meet with

5 the decision maker to evaluate the validity

6 of the reasons for rejection and rectify any

7 erroneous decisions.

8 ‘‘(5) LEASE PROVISIONS.—Each assistance con9 tract shall provide that the lease between the tenant

10 of any unit and the owner shall be for at least one

11 year or the term of such assistance contract, which12 ever is shorter, and that the lease shall contain other

13 terms and conditions specified by the Secretary, in14 cluding provisions meeting the requirements of para15 graphs (6), (7), and (8).

16 ‘‘(6) GENERAL GROUNDS FOR TERMINATION OF

17 TENANCY.—Each assistance contract shall provide

18 that the owner shall not terminate the tenancy of

19 the tenant of any unit except for serious or repeated

20 violation of the terms and conditions of the lease, for

21 violation of applicable Federal, State, or local law, or

22 for other good cause.

23 ‘‘(7) TERMINATION FOR CRIMINAL ACTIVITY.—

24 Each assistance contract shall provide that any

25 criminal activity that threatens the health, safety, or
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•HR 4218 IH

1 right to peaceful enjoyment of the premises by other

2 tenants, any criminal activity that threatens the

3 health, safety, or right to peaceful enjoyment of

4 their residences by persons residing in the immediate

5 vicinity of the premises, or any drug-related criminal

6 activity on or near such premises, engaged in by a

7 tenant of any unit, any member of the tenant’s

8 household, or any guest or other person under the

9 tenant’s control, shall be cause for termination of

10 tenancy.

11 ‘‘(8) NOTICE OF TERMINATION OF TENANCY.—

12 Each assistance contract shall provide that before

13 terminating the tenancy of any tenant, the owner

14 shall provide written notice to the tenant specifying

15 the legal and factual grounds for such action. Such

16 notice shall be provided to the tenant not less than

17 30 days before termination, except that in cases of

18 termination for nonpayment of rent such notice shall

19 be provided not less than 14 days before termi20 nation.

21 ‘‘(9) MAINTENANCE AND REPLACEMENT.—

22 Each assistance contract shall provide that mainte23 nance and replacement (including redecoration) shall

24 be performed in accordance with the standard prac25 tice for the building concerned as established by the
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•HR 4218 IH

1 owner and agreed to by the agency (or the Sec2 retary). With the approval of the Secretary, the pub3 lic housing agency administering a contract under

4 this section with respect to existing housing units

5 may exercise all management and maintenance re6 sponsibilities with respect to the units pursuant to a

7 contract between such agency and the owner of such

8 units. Each assistance contract shall also provide

9 that, if the agency (or the Secretary) determines

10 that a unit assisted under this section fails to com11 ply in any material respect with standards for hous12 ing quality for units so assisted, the agency (or the

13 Secretary) may withhold some or all of the assist14 ance amounts under this section with respect to such

15 unit and promptly—

16 ‘‘(A) use such amounts to make necessary

17 repairs or contract to have such repairs made;

18 ‘‘(B) release any withheld amounts to the

19 owner after repairs are made by the owner, in

20 an amount not exceeding the cost of the re21 pairs;

22 ‘‘(C) release any withheld amounts to the

23 applicable State or local housing agency after

24 repairs are made by such agency, in an amount

25 not exceeding the cost of the repairs; or
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•HR 4218 IH

1 ‘‘(D) upon the request of the tenant, re2 lease any withheld amounts to—

3 ‘‘(i) the tenant to reimburse the ten4 ant for the reasonable cost of any nec5 essary repairs performed or paid for by the

6 tenant; or

7 ‘‘(ii) such person secured by the ten8 ant and approved by the agency (or the

9 Secretary) to make such necessary repairs.

10 If an agency (or the Secretary) withholds any assist11 ance amounts pursuant to the preceding sentence,

12 the agency (or the Secretary) may not terminate the

13 assistance contract unless and until the tenant has

14 relocated to decent, safe, and sanitary housing.

15 ‘‘(10) STANDARDS AND OBLIGATIONS OF RESI16 DENCY IN HOUSING RECEIVING PROJECT-BASED AS17 SISTANCE.—Each assistance contract for project18 based assistance under subsection (i) shall provide

19 that the owner shall ensure and maintain compliance

20 with subtitle C of title VI of the Housing and Com21 munity Development Act of 1992 and any regula22 tions issued under such subtitle.

23 ‘‘(11) OTHER.—Each assistance contract shall

24 provide that the agency and the owner shall carry
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1 out such other appropriate terms and conditions as

2 may be mutually agreed to by the agency and owner.

3 ‘‘(i) PROJECT-BASED ASSISTANCE.—

4 ‘‘(1) AUTHORITY.—Pursuant to an annual con5 tributions contract entered into under subsection

6 (b), a public housing agency may enter into a assist7 ance contract providing for assistance payments

8 under this section that are attached to a structure.

9 ‘‘(2) REQUIREMENTS.—Any public housing

10 agency may approve project-based assistance under

11 this subsection with respect to any or all of the as12 sistance provided by the public housing agency if—

13 ‘‘(A) the owner agrees to rehabilitate the

14 structure other than with assistance under this

15 Act and the owner otherwise complies with the

16 requirements of this section; and

17 ‘‘(B) in the case of any newly constructed

18 structure, the owner or prospective owner

19 agrees to construct the structure other than

20 with assistance under this Act and otherwise

21 complies with the requirements of this section.

22 ‘‘(3) LONG-TERM AFFORDABILITY.—

23 ‘‘(A) IN GENERAL.—In the case of an as24 sistance contract for project-based assistance

25 under this subsection, a public housing agency
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1 shall enter into a contract with an owner, con2 tingent upon the future availability of appro3 priations for the purpose of renewing expiring

4 contracts for assistance payments as provided

5 in appropriations Acts, to extend the term of

6 the underlying assistance contract for such pe7 riod or periods as the Secretary determines to

8 be appropriate to achieve long-term afford9 ability of the housing. The contract shall obli10 gate the owner to have the extensions of the as11 sistance contract accepted by the owner and the

12 owner’s successors in interest.

13 ‘‘(B) TERM OF ASSISTANCE FOR LOW-IN14 COME HOUSING PRESERVATION.—The contract

15 for assistance may, at the option of the public

16 housing agency, have an initial term not exceed17 ing 15 years for any assistance that is at18 tached—

19 ‘‘(i) to projects assisted under a State

20 program that permits the owner of the

21 projects to prepay a State assisted or sub22 sidized mortgage on the structure; and

23 ‘‘(ii) for the purpose of providing in24 centives to owners to preserve such

25 projects for occupancy by low- and mod-
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•HR 4218 IH

1 erate-income families (for the period that

2 assistance under this subparagraph is

3 available) and assisting low-income tenants

4 to afford any increases in rent that may be

5 required to induce the owner to maintain

6 occupancy in the project by low- and mod7 erate-income tenants.

8 Any assistance provided to low-income tenants

9 in the manner described in this subparagraph

10 shall not be considered for purposes of the limi11 tation under subsection (h)(2) regarding the

12 percentage of families that may receive assist13 ance under this section who do not qualify for

14 preferences under such subsection.

15 ‘‘(4) SERVICE COORDINATORS.—In determining

16 the amount of assistance provided under an assist17 ance contract for project-based assistance under this

18 paragraph or a contract for assistance for housing

19 constructed or substantially rehabilitated pursuant

20 to assistance provided under section 8(b)(2) of this

21 Act (as such section existed before October 1, 1983),

22 the Secretary may, to the extent amounts are pro23 vided under section 5(c), increase the amount annu24 ally provided with respect to such project to provide

25 for the costs of employing or otherwise retaining the
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1 services of one or more service coordinators under

2 section 671 of the Housing and Community Devel3 opment Act of 1992 to coordinate the provision of

4 any services within the project for residents of the

5 project who are elderly or disabled families.

6 ‘‘(j) TERMINATION OF ASSISTANCE CONTRACTS.—

7 ‘‘(1) NOTICE BY OWNER.—Any owner terminat8 ing any assistance contract shall provide written no9 tice to the Secretary and the tenants involved of the

10 proposed termination not less than one year before

11 the termination of the contract (but not less than 90

12 days in the case of tenant-based assistance). The no13 tice shall specify the date of the termination and the

14 reasons for the termination, with detail sufficient to

15 enable the Secretary to evaluate whether the termi16 nation is lawful and whether additional actions can

17 be taken by the Secretary to avoid the termination.

18 The notice shall include a statement that the owner

19 and the Secretary may agree to a renewal of the

20 contract, thus avoiding the termination.

21 ‘‘(2) REVIEW OF NOTICE BY SECRETARY.—The

22 Secretary shall review the notice, shall consider

23 whether additional actions can be taken by the Sec24 retary to avoid the termination, and shall ensure a

25 proper adjustment of the contract rents for the
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1 project in compliance with the requirements of sub2 section (d) and paragraph (3) of this subsection.

3 The Secretary shall issue a written finding of the le4 gality of the termination and the reasons for the ter5 mination, including the actions considered or taken

6 to avoid the termination. Within 30 days after issu7 ance of the findings, the owner shall provide written

8 notice to each tenant of the decision, together with

9 the written findings of the Secretary regarding the

10 termination. In the case of project-based assistance,

11 the Secretary and the owner shall complete the ac12 tions under this paragraph not later than the expira13 tion of the 9-month period beginning upon the date

14 that the owner provides written notice of termination

15 under paragraph (1).

16 ‘‘(3) ADJUSTMENT OF CONTRACT RENT.—If an

17 owner provides notice of proposed termination under

18 paragraph (1) and the contract rent is less than the

19 maximum monthly rent for units assisted under this

20 section, the Secretary shall adjust the contract rent

21 based on the maximum monthly rent for units as22 sisted under this section and the value of the low23 income housing.

24 ‘‘(4) NOTICE OF RENT INCREASES.—Each as25 sistance contract for project-based assistance under
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1 this section shall require the owner to notify tenants

2 at least 90 days before the expiration of the contract

3 of any rent increase which may occur as a result of

4 the expiration of such contract.

5 ‘‘(5) DEFINITION OF TERMINATION.—For pur6 poses of this subsection, the term ‘termination’

7 means the expiration of the assistance contract or

8 the refusal of the owner to renew an assistance con9 tract, which shall include the termination of tenancy

10 by an owner for business reasons.

11 ‘‘(k) RENTAL ASSISTANCE FOR MANUFACTURED

12 HOUSING.—

13 ‘‘(1) IN GENERAL.—The Secretary may enter

14 into contracts to make assistance payments under

15 this subsection to assist low-income families by mak16 ing rental assistance payments on behalf of any such

17 family that utilizes a manufactured home as its prin18 cipal place of residence. In carrying out this sub19 section, the Secretary may—

20 ‘‘(A) enter into annual contributions con21 tracts with public housing agencies pursuant to

22 which such agencies may enter into assistance

23 contracts to make such assistance payments to

24 the owners of such real property; or
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1 ‘‘(B) enter into such contracts directly

2 with the owners of such real property.

3 ‘‘(2) USE OF ASSISTANCE.—Rental assistance

4 payments under this subsection may be made with

5 respect to the rental of the real property on which

6 is located a manufactured home that is owned by a

7 low-income family or with respect to the rental by

8 such a family of a manufactured home and the real

9 property on which it is located.

10 ‘‘(3) ASSISTANCE FOR RENTAL OF MANUFAC11 TURED HOME SITE.—

12 ‘‘(A) MAXIMUM MONTHLY RENT.—A con13 tract entered into pursuant to this paragraph

14 shall establish the maximum monthly rent (in15 cluding maintenance and management charges)

16 that the owner is entitled to receive for the

17 space on which a manufactured home is located

18 and with respect to which assistance payments

19 are to be made. The maximum monthly rent

20 shall not exceed by more than 10 percent the

21 fair market rental established by the Secretary

22 periodically (but not less than annually) with

23 respect to the market area for the rental of real

24 property suitable for occupancy by families as25 sisted under this paragraph.
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1 ‘‘(B) AMOUNT OF MONTHLY ASSISTANCE

2 PAYMENT.—The amount of any monthly assist3 ance payment with respect to any family that

4 rents real property that is assisted under this

5 paragraph, and on which is located a manufac6 tured home that is owned by such family shall

7 be the difference between the rent the family is

8 required to pay under section 3(a) and the sum

9 of—

10 ‘‘(i) the monthly payment made by

11 such family to amortize the cost of pur12 chasing the manufactured home;

13 ‘‘(ii) the monthly utility payments

14 made by such family, subject to reasonable

15 limitations prescribed by the Secretary;

16 and

17 ‘‘(iii) the maximum monthly rent per18 mitted with respect to the real property

19 which is rented by such family for the pur20 pose of locating its manufactured home;

21 except that in no case may such assistance ex22 ceed the total amount of such maximum month23 ly rent.

24 ‘‘(4) ASSISTANCE FOR RENTAL OF MANUFAC25 TURED HOME AND SITE.—
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1 ‘‘(A) MAXIMUM MONTHLY RENT.—Con2 tracts entered into pursuant to this paragraph

3 shall establish the maximum monthly rent per4 mitted with respect to the manufactured home

5 and the real property on which it is located and

6 with respect to which assistance payments are

7 to be made. The maximum monthly rent shall

8 not exceed by more than 10 percent the fair

9 market rental established by the Secretary peri10 odically (but not less than annually) with re11 spect to the market area for the rental of a

12 manufactured home and the real property on

13 which it is located suitable for occupancy by

14 families assisted under this paragraph; except

15 that the maximum monthly rent may exceed the

16 fair market rental by more than 10 but not

17 more than 20 percent if the Secretary deter18 mines that special circumstances warrant such

19 higher maximum rent.

20 ‘‘(B) AMOUNT OF MONTHLY ASSISTANCE

21 PAYMENT.—The amount of any monthly assist22 ance payment with respect to any family that

23 rents a manufactured home and the real prop24 erty on which it is located and that is assisted

25 under this paragraph shall be the difference be-
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1 tween the rent the family is required to pay

2 under section 3(a) and the sum of—

3 ‘‘(i) the monthly utility payments

4 made by such family, subject to reasonable

5 limitations prescribed by the Secretary;

6 and

7 ‘‘(ii) the maximum monthly rent per8 mitted with respect to the manufactured

9 home and real property on which it is lo10 cated.

11 ‘‘(5) ADJUSTMENT OF MAXIMUM MONTHLY

12 RENTS.—The provisions of paragraphs (3) through

13 (7) of subsection (d) shall apply to the adjustments

14 of maximum monthly rents under this subsection.

15 ‘‘(6) CONTRACT TERM.—Each contract entered

16 into under the subsection shall be for a term of not

17 less than one month and not more than 180 months;

18 except that in any case in which the manufactured

19 home park is substantially rehabilitated or newly

20 constructed, such term may not be less than 240

21 months, nor more than the maximum term for a

22 manufactured home loan permitted under section

23 2(b) of the National Housing Act.

24 ‘‘(7) APPLICABILITY.—The Secretary may carry

25 out this subsection without regard to whether the
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1 manufactured home park is existing, substantially

2 rehabilitated, or newly constructed.

3 ‘‘(8) LIMITATION ON SUBSTANTIALLY REHA4 BILITATED AND NEWLY CONSTRUCTED MANUFAC5 TURED HOME PARKS.—In the case of any substan6 tially rehabilitated or newly constructed manufac7 tured home park containing spaces with respect to

8 which assistance is made under this subsection, the

9 principal amount of the mortgage attributable to the

10 rental spaces within the park may not exceed an

11 amount established by the Secretary which is equal

12 to or less than the limitation for manufactured home

13 parks described in section 207(c)(3) of the National

14 Housing Act, and the Secretary may increase such

15 limitation in high cost areas in the manner described

16 in such section.

17 ‘‘(9) OTHER REQUIREMENTS.—The Secretary

18 may prescribe other terms and conditions necessary

19 for the purpose of carrying out this subsection and

20 that are consistent with the purposes of this sub21 section.

22 ‘‘(l) SINGLE ROOM OCCUPANCY FACILITIES.—

23 ‘‘(1) AUTHORITY.—In making assistance avail24 able under this section and assistance under section

25 441 and part V of subtitle F of title IV of the Stew-
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•HR 4218 IH

1 art B. McKinney Homeless Assistance Act, the Sec2 retary may provide assistance with respect to resi3 dential properties in which some or all of the dwell4 ing units do not contain bathroom or kitchen facili5 ties, if—

6 ‘‘(A) the property is located in an area in

7 which there is a significant demand for such

8 units, as determined by the Secretary;

9 ‘‘(B) the unit of general local government

10 in which the property is located and the local

11 public housing agency approve of such units

12 being utilized for such purpose; and

13 ‘‘(C) the unit of general local government

14 in which the property is located and the local

15 public housing agency certify to the Secretary

16 that the property complies with local health and

17 safety standards.

18 ‘‘(2) WAIVER OF LIMITATIONS ON ASSISTANCE

19 FOR SINGLE PERSONS.—The Secretary may waive,

20 in appropriate cases, the limitation and preference in

21 section 3(b)(3)(A) with respect to the assistance

22 made available under this subsection.

23 ‘‘(m) HOUSING FOR ELDERLY AND DISABLED FAMI24 LIES.—
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•HR 4218 IH

1 ‘‘(1) SHARED HOUSING.—To assist elderly fam2 ilies and disabled families (as defined in section

3 3(b)) who elect to live in a shared housing arrange4 ment in which they benefit as a result of sharing the

5 facilities of a dwelling with others in a manner that

6 effectively and efficiently meets their housing needs

7 and thereby reduces their costs of housing, the Sec8 retary shall permit assistance provided under this

9 section to be used by such families in such arrange10 ments. In carrying out this subsection, the Secretary

11 shall issue minimum habitability standards for the

12 purpose of ensuring decent, safe, and sanitary hous13 ing for such families while taking into account the

14 special circumstances of shared housing.

15 ‘‘(2) PRIORITY FOR NONELDERLY DISABLED

16 FAMILIES.—In allocating assistance under this sec17 tion, a public housing agency that serves more than

18 one unit of general local government may, at the dis19 cretion of the agency, give priority to disabled fami20 lies that are not elderly families.

21 ‘‘(3) AUTHORITY TO PROVIDE PREFERENCES

22 FOR THE ELDERLY AND RESERVE UNITS FOR THE

23 DISABLED.—Notwithstanding subsection (h)(2) or

24 (3), an owner of a covered section 8 housing project

25 (as such term is defined in section 659 of the Hous-
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•HR 4218 IH

1 ing and Community Development Act of 1992) may

2 give preference for occupancy of dwelling units in

3 the project, and reserve units for occupancy, in ac4 cordance with subtitle D of title VI of the Housing

5 and Community Development Act of 1992.

6 ‘‘(n) ADMINISTRATIVE FEES.—

7 ‘‘(1) BASIC FEE FOR TENANT-BASED RENTAL

8 PROGRAM.—The Secretary shall establish a fee for

9 the costs incurred by a public housing agency in ad10 ministering the program for rental assistance under

11 this section, which shall be, together with other fees

12 authorized under this subsection, included in any

13 amounts provided to the public housing agency

14 under the annual contributions contract for the

15 agency. The amount of the fee for each month for

16 which a dwelling unit is covered by an assistance

17 contract shall be 8.2 percent of the fair market rent18 al established under subsection (e) for a 2-bedroom

19 existing rental dwelling unit in the market area of

20 the public housing agency. The Secretary may in21 crease the fee if necessary to reflect the higher costs

22 of administering small programs and programs oper23 ating over large geographic areas.
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•HR 4218 IH

1 ‘‘(2) OTHER FEES.—The Secretary shall also

2 establish reasonable fees (as determined by the Sec3 retary) for—

4 ‘‘(A) the costs of preliminary expenses that

5 a public housing agency documents it has in6 curred in connection with new allocations of as7 sistance under the program for rental assist8 ance under this section, which shall not exceed

9 $275 per unit assisted;

10 ‘‘(B) the costs incurred in assisting fami11 lies who experience difficulty (as determined by

12 the Secretary) in obtaining appropriate housing

13 under the program;

14 ‘‘(C) the costs incurred in administering

15 the provision of rental assistance under this

16 section through the self-sufficiency program

17 under section 23; and

18 ‘‘(D) extraordinary costs approved by the

19 Secretary.

20 ‘‘(3) AUTHORITY TO INCLUDE COSTS OF SERV21 ICE COORDINATORS IN FEES.—

22 ‘‘(A) IN GENERAL.—Fees under this sub23 section may be used for the costs of employing

24 or otherwise retaining the services of one or

25 more service coordinators under section 671 of
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•HR 4218 IH

1 the Housing and Community Development Act

2 of 1992 to coordinate the provision of support3 ive services for elderly families and disabled

4 families on whose behalf tenant-based assist5 ance is provided under this section or section

6 811(b)(1). Such service coordinators shall have

7 the same responsibilities with respect to such

8 families as service coordinators of covered fed9 erally assisted housing projects have under sec10 tion 671 of such Act with respect to residents

11 of such projects.

12 ‘‘(B) REQUIREMENT.—To the extent

13 amounts are provided in appropriation Acts

14 under section 5(c) for use under this para15 graph, the Secretary shall increase fees under

16 this subsection to provide for the costs of such

17 service coordinators for public housing agencies.

18 ‘‘(4) BUDGET COMPLIANCE.—The Secretary

19 may establish or increase a fee in accordance with

20 this subsection only to such extent or in such

21 amounts as are provided in appropriation Acts.

22 ‘‘(5) FEES FOR 1995 AND 1996.—Notwithstand23 ing any other provision of this subsection, the fee for

24 the costs incurred by a public housing agency in ad25 ministering the program for rental assistance under
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•HR 4218 IH

1 this section during fiscal years 1995 and 1996 shall

2 be equal to the fee determined for fiscal year 1994

3 under section 11(a) of the HUD Demonstration Act

4 of 1993.

5 ‘‘(o) PORTABILITY OF ASSISTANCE.—

6 ‘‘(1) AUTHORITY.—Except as provided in para7 graph (3), any family on behalf of whom is provided

8 tenant-based rental assistance under this section and

9 who moves to an eligible dwelling unit located within

10 the same State, or the same or a contiguous metro11 politan statistical area, as the metropolitan statis12 tical area within which is located the area of juris13 diction of the public housing agency approving the

14 assistance for the family, may use such assistance to

15 rent such eligible dwelling unit.

16 ‘‘(2) ADMINISTRATION.—The public housing

17 agency having authority with respect to the dwelling

18 unit to which a family moves under this subsection

19 shall have the responsibility of carrying out the pro20 visions of this section with respect to the family. If

21 no public housing agency has authority with respect

22 to the dwelling unit to which a family moves under

23 this subsection, the public housing agency approving

24 the assistance shall have such responsibility.
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•HR 4218 IH

1 ‘‘(3) LOCAL OPTION TO ENSURE MINIMUM AREA

2 RESIDENCY.—

3 ‘‘(A) AUTHORITY.—At the discretion of a

4 public housing agency and to the extent pro5 vided in subparagraph (B), the agency may pro6 vide that a family may use tenant-based rental

7 assistance under this section to rent an eligible

8 dwelling unit that is not located within the area

9 of jurisdiction of the agency approving the as10 sistance only if, before such use, the family has

11 rented and occupied an eligible dwelling unit

12 within such jurisdiction for not less than 12

13 consecutive months using assistance provided

14 by such agency.

15 ‘‘(B) LIMITATION.—If a public housing

16 agency elects to restrict the use of tenant-based

17 rental assistance pursuant to subparagraph (A)

18 and provides such assistance on behalf of more

19 than 300 families, the agency may not restrict

20 the use of such assistance with respect to as21 sistance provided on behalf of 10 percent of the

22 number of families receiving such assistance

23 that exceeds 300.

24 ‘‘(4) PROVISION OF RENTAL ASSISTANCE FOR

25 PORTABILITY PURPOSES.—
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•HR 4218 IH

1 ‘‘(A) AMOUNT.—To the extent budget au2 thority for use under this paragraph is made

3 available in appropriation Acts, the Secretary

4 shall provide rental assistance under this sec5 tion in accordance with this paragraph.

6 ‘‘(B) USE.—Amounts provided for use

7 under this paragraph shall be used only to pro8 vide a public housing agency with additional

9 amounts (as determined under subparagraph

10 (D)) to provide assistance for families on behalf

11 of whom assistance is provided under this sec12 tion by another public housing agency and who

13 move into an eligible dwelling unit located with14 in the area of jurisdiction of the agency to re15 ceive assistance under this paragraph.

16 ‘‘(C) REQUIREMENT.—Amounts provided

17 for use under this paragraph may be made

18 available to a public housing agency only if the

19 agency has provided assistance pursuant to the

20 first sentence of paragraph (2) on behalf of

21 families who have moved into eligible dwelling

22 units located within the area of jurisdiction of

23 the agency in an amount not less than the less24 er of (i) 5 percent of the total amount received

25 by the agency for assistance under this section
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•HR 4218 IH

1 for the fiscal year, or (ii) the amount necessary

2 to assist 25 percent of average annual number

3 of families previously assisted by the agency

4 who relinquish such assistance in a year (based

5 on the preceding 3 calendar years).

6 ‘‘(p) PROHIBITION OF DISCRIMINATION.—

7 ‘‘(1) BASED ON RESIDENCY IN PUBLIC HOUS8 ING.—In selecting families for the provision of as9 sistance under this section, a public housing agency

10 may not exclude or penalize a family solely because

11 the family resides in a public housing project.

12 ‘‘(2) BASED ON RECEIPT OF ASSISTANCE.—An

13 owner who has entered into an assistance contract

14 under this section on behalf of any tenant in a mul15 tifamily housing project shall not refuse to lease any

16 available dwelling unit in any multifamily housing

17 project of such owner that rents for an amount not

18 greater than the fair market rental for a comparable

19 unit (as determined by the Secretary under sub20 section (e)) to a family who has been approved by

21 a public housing agency for rental assistance under

22 this section and is in possession of evidence of such

23 approval, a proximate cause of which is the status

24 of such prospective tenant as such an assisted fam-
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•HR 4218 IH

1 ily, and to enter into an assistance contract respect2 ing such unit.

3 ‘‘(3) DEFINITION.—For purposes of this sub4 section, the term ‘multifamily housing project’

5 means a residential building containing more than 4

6 dwelling units.

7 ‘‘(q) SPECIAL USES OF RENTAL ASSISTANCE.—

8 ‘‘(1) ASSISTANCE FOR RESIDENTS OF REHA9 BILITATED PROJECTS.—In the case of low-income

10 families living in rental projects rehabilitated under

11 section 17 of this Act or section 533 of the Housing

12 Act of 1949 before rehabilitation—

13 ‘‘(A) tenant-based rental assistance under

14 this section shall be provided for families who

15 are required to move out of their dwelling units

16 because of the physical rehabilitation activities

17 or because of overcrowding;

18 ‘‘(B) at the discretion of each public hous19 ing agency, tenant-based rental assistance

20 under this section may be provided for families

21 who would have to pay more than 30 percent of

22 their adjusted income for rent after rehabilita23 tion whether they choose to remain in, or to

24 move from, the project; and
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•HR 4218 IH

1 ‘‘(C) the Secretary shall allocate tenant2 based rental assistance provided under this sec3 tion to ensure that sufficient resources are

4 available to address the physical or economic

5 displacement, or potential economic displace6 ment, of existing tenants pursuant to subpara7 graphs (A) and (B).

8 ‘‘(2) LOAN MANAGEMENT ASSISTANCE.—

9 ‘‘(A) IN GENERAL.—The Secretary may

10 provide assistance under this section through a

11 loan management program to assist financially

12 troubled multifamily residential housing

13 projects (i) subject to mortgages that are in14 sured under the National Housing Act or mort15 gages that have been assigned to the Secretary,

16 (ii) that were held by the Secretary and have

17 been sold, and (iii) that were assisted under

18 section 202 of the Housing Act of 1959.

19 ‘‘(B) ELIGIBILITY.—The eligibility of a

20 multifamily residential project for loan manage21 ment assistance under this paragraph shall be

22 determined without regard to whether the

23 project is subsidized or unsubsidized.

24 ‘‘(C) EXTENSION OF CONTRACT.—The

25 Secretary shall extend any expiring contract en-
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•HR 4218 IH

1 tered into under this section for loan manage2 ment assistance or execute a new contract for

3 project-based loan management assistance, if

4 the owner agrees to continue providing housing

5 for low-income families during the term of the

6 contract.

7 ‘‘(3) ASSISTANCE FOR FAMILY UNIFICATION.—

8 ‘‘(A) IN GENERAL.—The Secretary may

9 provide assistance under this section to be used

10 only in connection with tenant-based assistance

11 under this section on behalf of any family (i)

12 who is otherwise eligible for such assistance,

13 and (ii) who the public child welfare agency for

14 the jurisdiction has certified is a family for

15 whom the lack of adequate housing is a primary

16 factor in the imminent placement of the fami17 ly’s child or children in out-of-home care or the

18 delayed discharge of a child or children to the

19 family from out-of-home care.

20 ‘‘(B) ALLOCATION.—Any amounts made

21 available under this paragraph shall be allo22 cated by the Secretary through a national com23 petition among applicants based on dem24 onstrated need for assistance under this para25 graph. To be considered for assistance, an ap-
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•HR 4218 IH

1 plicant shall submit to the Secretary a written

2 proposal containing a report from the public

3 child welfare agency serving the jurisdiction of

4 the applicant that describes how a lack of ade5 quate housing in the jurisdiction is resulting in

6 the initial or prolonged separation of children

7 from their families, and how the applicant will

8 coordinate with the public child welfare agency

9 to identify eligible families and provide the fam10 ilies with assistance under this paragraph.

11 ‘‘(C) DEFINITIONS.—For purposes of this

12 paragraph:

13 ‘‘(i) APPLICANT.—The term ‘appli14 cant’ means a public housing agency.

15 ‘‘(ii) PUBLIC CHILD WELFARE AGEN16 CY.—The term ‘public child welfare agen17 cy’ means the public agency responsible

18 under applicable State law for determining

19 that a child is at imminent risk of place20 ment in out-of-home care or that a child in

21 out-of-home care under the supervision of

22 the public agency may be returned to his

23 or her family.

24 ‘‘(r) RENEWAL OF EXPIRING CONTRACTS.—Not later

25 than 30 days after the beginning of each fiscal year, the
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•HR 4218 IH

1 Secretary shall publish in the Federal Register a plan for

2 reducing, to the extent feasible, year-to-year fluctuations

3 in the levels of budget authority that will be required over

4 the succeeding 5-year period to renew expiring assistance

5 contracts entered into under this section after the enact6 ment of the Housing and Community Development Act

7 of 1974. To the extent necessary to carry out such plan

8 and to the extent approved in appropriations Acts, the

9 Secretary is authorized to enter into annual contributions

10 contracts with terms of less than 60 months.

11 ‘‘(s) GENERAL PROVISIONS.—

12 ‘‘(1) PROHIBITION OF HIGH-RISE PROJECTS

13 FOR FAMILIES WITH CHILDREN.—Notwithstanding

14 any other provision of this section, after the date of

15 enactment of the Housing and Community Develop16 ment Act of 1977, the Secretary shall prohibit high17 rise elevator projects for families with children un18 less the Secretary determines that there is no prac19 tical alternative.

20 ‘‘(2) PLEDGING ASSISTANCE CONTRACTS AS SE21 CURITY.—An owner may pledge, or offer as security

22 for any loan or obligation, an assistance contract en23 tered into pursuant to this section, but only if such

24 security is in connection with a project constructed

25 or rehabilitated pursuant to authority under this
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•HR 4218 IH

1 section and the terms of the financing or any refi2 nancing have been approved by the Secretary.

3 ‘‘(3) ASSISTANCE IN FINDING UNITS.—Each

4 public housing agency that provides rental housing

5 assistance under this section on behalf of low-income

6 families shall make available, to such families, coun7 seling and assistance regarding housing opportuni8 ties in the area of jurisdiction of the agency, includ9 ing assistance in obtaining new rental residences.

10 ‘‘(t) HOMEOWNERSHIP OPTION.—

11 ‘‘(1) USE OF ASSISTANCE FOR HOMEOWNER12 SHIP.—A family receiving tenant-based assistance

13 under this section may receive assistance for occu14 pancy of a dwelling owned by one or more members

15 of the family if the family—

16 ‘‘(A) is a first-time homeowner;

17 ‘‘(B)(i) participates in the family self-suffi18 ciency program under section 23 of the public

19 housing agency providing the assistance; or

20 ‘‘(ii) demonstrates that the family has in21 come from employment or other sources (other

22 than public assistance), as determined in ac23 cordance with requirements of the Secretary,

24 that is not less than twice the payment stand25 ard established by the public housing agency
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•HR 4218 IH

1 (or such other amount as may be established by

2 the Secretary);

3 ‘‘(C) except as provided by the Secretary,

4 demonstrates at the time the family initially re5 ceives tenant-based assistance under this sub6 section that one or more adult members of the

7 family have achieved employment for the period

8 as the Secretary shall require;

9 ‘‘(D) participates in a homeownership and

10 housing counseling program provided by the

11 agency; and

12 ‘‘(E) meets any other initial or continuing

13 requirements established by the public housing

14 agency in accordance with requirements estab15 lished by the Secretary.

16 ‘‘(2) MONTHLY ASSISTANCE PAYMENT.—

17 ‘‘(A) IN GENERAL.—Notwithstanding any

18 other provisions of this section governing deter19 mination of the amount of assistance payments

20 under this section on behalf of a family, the

21 monthly assistance payment for any family as22 sisted under this subsection shall be the amount

23 by which the fair market rental for the area es24 tablished under subsection (e)(1) exceeds 30

25 percent of the family’s monthly adjusted in-
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•HR 4218 IH

1 come; except that the monthly assistance pay2 ment shall not exceed the amount by which the

3 monthly homeownership expenses, as deter4 mined in accordance with requirements estab5 lished by the Secretary, exceeds 10 percent of

6 the family’s monthly income.

7 ‘‘(B) EXCLUSION OF EQUITY FROM IN8 COME.—For purposes of determining the

9 monthly assistance payment for a family, the

10 Secretary shall not include in family income an

11 amount imputed from the equity of the family

12 in a dwelling occupied by the family with assist13 ance under this subsection.

14 ‘‘(3) RECAPTURE OF CERTAIN AMOUNTS.—

15 Upon sale of the dwelling by the family, the Sec16 retary shall recapture from any net proceeds the

17 amount of additional assistance (as determined in

18 accordance with requirements established by the

19 Secretary) paid to or on behalf of the eligible family

20 as a result of paragraph (2)(B).

21 ‘‘(4) DOWNPAYMENT REQUIREMENT.—Each

22 public housing agency providing assistance under

23 this subsection shall ensure that each family assisted

24 shall provide from its own resources not less than 80

25 percent of any downpayment in connection with a
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•HR 4218 IH

1 loan made for the purchase of a dwelling. Such re2 sources may include amounts from any escrow ac3 count for the family established under section 23(d).

4 Not more than 20 percent of the downpayment may

5 be provided from other sources, such as from non6 profit entities and programs of States and units of

7 general local government.

8 ‘‘(5) INELIGIBILITY UNDER OTHER PRO9 GRAMS.—A family may not receive assistance under

10 this subsection during any period when assistance is

11 being provided for the family under other Federal

12 homeownership assistance programs, as determined

13 by the Secretary, which shall include assistance

14 under the HOME Investment Partnerships Act, the

15 Homeownership and Opportunity Through HOPE

16 Act, title II of the Housing and Community Devel17 opment Act of 1987, and section 502 of the Housing

18 Act of 1949.

19 ‘‘(6) INAPPLICABILITY OF CERTAIN PROVI20 SIONS.—Assistance under this subsection shall not

21 be subject to the requirements of the following provi22 sions:

23 ‘‘(A) Subsection (h)(3) of this section.
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•HR 4218 IH

1 ‘‘(B) Any other provisions of this section

2 governing maximum amounts payable to owners

3 and amounts payable by assisted families.

4 ‘‘(C) Any other provisions of this section

5 concerning contracts between public housing

6 agencies and owners.

7 ‘‘(D) Any other provisions of this Act

8 that are inconsistent with the provisions of this

9 subsection.

10 ‘‘(7) REVERSION TO RENTAL STATUS.—

11 ‘‘(A) FHA-INSURED MORTGAGES.—If a

12 family receiving assistance under this sub13 section for occupancy of a dwelling defaults

14 under a mortgage for the dwelling insured by

15 the Secretary under the National Housing Act,

16 the family may not continue to receive rental

17 assistance under this section unless the family

18 (i) transfers to the Secretary marketable title to

19 the dwelling, (ii) moves from the dwelling with20 in the period established or approved by the

21 Secretary, and (iii) agrees that any amounts

22 the family is required to pay to reimburse the

23 escrow account under section 23(d)(3) may be

24 deducted by the public housing agency from the
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•HR 4218 IH

1 assistance payment otherwise payable on behalf

2 of the family.

3 ‘‘(B) OTHER MORTGAGES.—If a family re4 ceiving assistance under this subsection defaults

5 under a mortgage not insured under the Na6 tional Housing Act, the family may not con7 tinue to receive rental assistance under this sec8 tion unless it complies with requirements estab9 lished by the Secretary.

10 ‘‘(C) ALL MORTGAGES.—A family receiving

11 assistance under this subsection that defaults

12 under a mortgage may not receive assistance

13 under this subsection for occupancy of another

14 dwelling owned by one or more members of the

15 family.

16 ‘‘(8) DEFINITION OF FIRST-TIME HOME17 OWNER.—For purposes of this subsection, the term

18 ‘first-time homeowner’ means—

19 ‘‘(A) a family, no member of which has

20 had a present ownership interest in a principal

21 residence during the 3 years preceding the date

22 on which the family initially receives assistance

23 for homeownership under this subsection; and

24 ‘‘(B) any other family, as the Secretary

25 may prescribe.
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•HR 4218 IH

1 ‘‘(u) DEFINITIONS.—For purposes of this section:

2 ‘‘(1) ANNUAL CONTRIBUTIONS CONTRACT.—

3 The term ‘annual contributions contract’ means a

4 contract under subsection (b) between the Secretary

5 and a public housing agency to provide amounts for

6 rental assistance payments under this section to the

7 public housing agency.

8 ‘‘(2) ASSISTANCE CONTRACT.—The term ‘as9 sistance contract’ means a contract under subsection

10 (c) between a public housing agency (or the Sec11 retary) and an owner to make rental assistance pay12 ments under this section to the owner.

13 ‘‘(3) DEBT SERVICE.—The term ‘debt service’

14 means the required payments for principal and in15 terest made with respect to a mortgage secured by

16 housing assisted under this Act.

17 ‘‘(4) DRUG-RELATED CRIMINAL ACTIVITY.—The

18 term ‘drug-related criminal activity’ means the ille19 gal manufacture, sale, distribution, use, or posses20 sion with intent to manufacture, sell, distribute, or

21 use, of a controlled substance (as such term is de22 fined in section 102 of the Controlled Substances

23 Act).

24 ‘‘(5) OWNER.—The term ‘owner’ means any

25 private person or entity, including a cooperative, an
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•HR 4218 IH

1 agency of the Federal Government, or a public hous2 ing agency, having the legal right to lease or sub3 lease dwelling units, and such term shall include any

4 principals, general partners, primary shareholders,

5 and other similar participants in any entity owning

6 a multifamily housing project (as such term is de7 fined in subsection (p)(3)), as well as the entity it8 self.

9 ‘‘(6) PARTICIPATING JURISDICTION.—The term

10 ‘participating jurisdiction’ means a State or unit of

11 general local government designated by the Sec12 retary to be a participating jurisdiction under title

13 II of the Cranston-Gonzalez National Affordable

14 Housing Act.

15 ‘‘(7) PROJECT-BASED ASSISTANCE.—The term

16 ‘project-based assistance’ means rental assistance

17 under this section that is attached to a structure

18 pursuant to subsection (i).

19 ‘‘(8) RENT.—The terms ‘rent’ and ‘rental’ in20 clude, with respect to members of a cooperative, the

21 charges under the occupancy agreements between

22 such members and the cooperative.

23 ‘‘(9) RENTAL ASSISTANCE.—The term ‘rental

24 assistance’ means assistance provided under this sec-
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•HR 4218 IH

1 tion on behalf of low-income families for the rental

2 of a dwelling unit.

3 ‘‘(10) TENANT-BASED ASSISTANCE.—The term

4 ‘tenant-based assistance’ means rental assistance

5 under this section that is not project-based assist6 ance.’’.

7 (b) TRANSITION.—

8 (1) APPLICABILITY.—The amendment made by

9 subsection (a) shall apply only to assistance under

10 section 8 of the United States Housing Act of 1937

11 provided pursuant to an assistance contract entered

12 into or renewed during fiscal year 1995 or there13 after. Any such assistance provided pursuant to an

14 assistance contract entered into before the com15 mencement of fiscal year 1995 shall be subject to

16 the provisions of such section 8 as in effect imme17 diately before the enactment of this Act or otherwise

18 applicable to such assistance.

19 (2) CONTINUATION OF ASSISTANCE.—The Sec20 retary of Housing and Urban Development shall

21 take any action necessary to ensure that the provi22 sion of assistance under section 8 of the United

23 States Housing Act of 1937 to families receiving as24 sistance under such section on the date of the enact-
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1 ment of this Act is not interrupted because of the

2 amendment made by subsection (a).

3 (c) CONFORMING AMENDMENTS.—

4 (1) UNITED STATES HOUSING ACT OF 1937.—

5 The United States Housing Act of 1937 is amend6 ed—

7 (A) in section 3(a)(1) (42 U.S.C.

8 1437a(a)(1)), by striking ‘‘(other than a family

9 assisted under section 8(o) or (y) or paying rent

10 under section 8(c)(3)(B))’’ and inserting

11 ‘‘(other than a family assisted under section

12 8(t))’’;

13 (B) in section 5 (42 U.S.C. 1737c)—

14 (i) in subsection (c)(7)(C), by striking

15 ‘‘section 8(b)(1)’’ each place it appears and

16 inserting ‘‘section 8’’;

17 (ii) in subsection (j)(1)(B)(i), by strik18 ing ‘‘section 8(o)(6)’’ and inserting ‘‘sec19 tion 8’’; and

20 (iii) in subsection (j)(1)(D), by strik21 ing ‘‘subsection (b) or (o) of’’;

22 (C) in section 6(p)(1)(B) (42 U.S.C.

23 1437d(p)(1)(B)), by striking ‘‘holding certifi24 cates and vouchers’’ and inserting ‘‘eligible and

25 approved for assistance’’;
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1 (D) in section 18(b)(3) (42 U.S.C.

2 1437p(b)(3))—

3 (i) in subparagraph (A)(iv), by strik4 ing ‘‘section 8(b)(1)’’ and inserting ‘‘sec5 tion 8’’;

6 (ii) in subparagraph (A)(v), by strik7 ing ‘‘(excluding vouchers under section

8 8(o))’’ each place it appears;

9 (iii) in subparagraph (B)—

10 (I) in the matter preceding clause

11 (i), by striking ‘‘(notwithstanding the

12 limitation under section 8(d)(2)(A) on

13 the amount of project-based assist14 ance provided by an agency)’’; and

15 (II) in clause (ii), by striking

16 ‘‘(excluding vouchers under section

17 8(o))’’; and

18 (iv) in subparagraph (C), by striking

19 ‘‘certificates and vouchers available’’ and

20 inserting ‘‘families receiving tenant-based

21 assistance’’;

22 (E) in section 21(b)(3)—

23 (i) by striking ‘‘a certificate under

24 section 8(b)(1) or a housing voucher under
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1 section 8(o)’’ and inserting ‘‘tenant-based

2 assistance under section 8’’; and

3 (ii) by striking ‘‘such certificate’’ and

4 inserting ‘‘such assistance’’;

5 (F) in section 23—

6 (i) in subsection (a), by striking ‘‘as7 sistance under the certificate and voucher

8 programs’’ and inserting ‘‘tenant-based as9 sistance’’;

10 (ii) in subsection (b)—

11 (I) in paragraph (1), by striking

12 ‘‘assistance under subsection (b) or

13 (o) of’’ and inserting ‘‘tenant-based

14 assistance under’’;

15 (II) in paragraph (3)(A), by

16 striking ‘‘Certificate and voucher as17 sistance under section 8(b) and (o)’’

18 and inserting ‘‘Tenant-based assist19 ance under section 8’’; and

20 (III) in paragraph (4), by strik21 ing ‘‘Assistance under the certificate

22 or voucher programs’’ and inserting

23 ‘‘Tenant-based assistance’’;

24 (iii) in subsection (c)(1), by striking

25 ‘‘assistance under the certificate and
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1 voucher programs of’’ and inserting ‘‘ten2 ant-based assistance from’’;

3 (iv) in subsection (d)(3) (as added by

4 section 185(b) of the Housing and Com5 munity Development Act of 1992 (Public

6 Law 102–550; 106 Stat. 3747)), by strik7 ing ‘‘section 8(y)’’ and inserting ‘‘section

8 8(t)’’; and

9 (v) in subsection (h)(1)—

10 (I) by striking ‘‘section 8(q) for

11 the costs incurred in administering

12 the provision of certificate and vouch13 er’’ and inserting ‘‘section 8(n) for the

14 costs incurred in administering the

15 provision of tenant-based’’; and

16 (II) by striking ‘‘section

17 8(q)(2)(A)(i)’’ and inserting ‘‘section

18 8(n)(2)(A)’’; and

19 (G) in section 304(g)(3) (42 U.S.C.

20 1437aaa–3(g)(3)), by striking ‘‘section 8(b)(2)

21 and section 8(o)(9)’’ and inserting ‘‘section 8’’.

22 (2) ELDERLY INDEPENDENCE.—Section 803 of

23 the Cranston-Gonzalez National Affordable Housing

24 Act (42 U.S.C. 8012) is amended—
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1 (A) in subsection (a), by striking ‘‘housing

2 certificates and vouchers’’ and inserting ‘‘assist3 ance under section 8 of the United States

4 Housing Act of 1937’’; and

5 (B) in subsection (b)—

6 (i) in the 1st sentence, by striking

7 ‘‘not more than 1500 incremental vouchers

8 and certificates under sections 8(b) and

9 8(o) of the United States Housing Act of

10 1937’’ and inserting ‘‘incremental assist11 ance under section 8 of the United States

12 Housing Act of 1937 on behalf of not more

13 than 1,500 frail elderly persons’’;

14 (ii) in the 3rd sentence, by striking

15 ‘‘the housing certificate or voucher pro16 gram of the agency’’ and inserting ‘‘the

17 agency’s program for assistance under

18 such section 8’’; and

19 (iii) in the last sentence, by striking

20 ‘‘sections 8(b) and 8(o)’’ and inserting

21 ‘‘section 8’’.

22 (3) MCKINNEY ACT.—Section 441(b) of the

23 Stewart B. McKinney Homeless Assistance Act (42

24 U.S.C. 11401(b)) is amended—
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1 (A) by striking ‘‘section 8(n)’’ and insert2 ing ‘‘section 8(l)’’; and

3 (B) by adding at the end the following new

4 sentence: ‘‘Moderate rehabilitation under this

5 section shall be carried out in the manner pro6 vided under the provisions of section 8(e) of the

7 United States Housing Act of 1937, as such

8 section was in effect immediately before the en9 actment of the Housing and Community Devel10 opment Act of 1994.’’.

11 (4) NATIONAL HOUSING ACT.—Section 203(v)

12 of the National Housing Act (12 U.S.C. 1709(v)), as

13 added by section 185(c)(1)(B) of the Housing and

14 Community Development Act of 1992, is amended

15 by striking ‘‘section 8(y)’’ and inserting ‘‘section

16 8(t)’’.

17 SEC. 5. PUBLIC HOUSING RENT AND INCOME ELIGIBILITY

18 REFORM.

19 (a) EXCLUSION FROM ADJUSTED INCOME FOR RENT

20 CALCULATION.—Section 3(b)(5) of the United States

21 Housing Act of 1937 (42 U.S.C. 1437a(b)(5)) is amend22 ed—

23 (1) in subparagraph (F), by striking ‘‘and’’ at

24 the end;
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1 (2) by redesignating subparagraph (G) as sub2 paragraph (H); and

3 (3) by inserting after subparagraph (F) the fol4 lowing new subparagraphs:

5 ‘‘(G) the amount of any increase in the earned

6 income of the family that results from the employ7 ment of a previously unemployed member of the

8 family, except that such increase in earned income

9 may be excluded only during the 18-month period

10 beginning upon the employment of the family mem11 ber; and’’.

12 (b) INCOME ELIGIBILITY.—Section 3(b)(4) of the

13 United States Housing Act of 1937 (42 U.S.C.

14 1437a(b)(2)) is amended by inserting at the end the fol15 lowing new sentence: ‘‘For purposes of eligibility of a fam16 ily for residence in public housing, income of the family

17 shall not include (A) only in the case of a family that has

18 more than 2 members contributing to the earned income

19 of the family and has an income (as determined under the

20 preceding sentence) not exceeding 65 percent of the me21 dian income for the area, 50 percent of the amount of

22 any earned income of the family contributed by members

23 of the family who are not the 2 members of the family

24 contributing the greatest amounts to the family’s earned

25 income, and (B) the amount of any increase in the earned
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1 income of the family that results from the employment of

2 a previously unemployed member of the family, except that

3 such increase in earned income may be excluded only dur4 ing the 18-month period beginning upon the employment

5 of the family member .’’.

6 (c) BUDGET COMPLIANCE.—To the extent that the

7 amendments made by subsections (a) and (b) result in ad8 ditional costs under the United States Housing Act of

9 1937, the provisions inserted by such amendments shall

10 be effective only to the extent that amounts to cover such

11 additional costs are provided in advance in appropriations

12 Acts.

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