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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4218 Introduced in House (IH)]

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. Romero-Barcelo, Ms. Ros-
 Lehtinen, Mr. Serrano, Mr. Tejeda, Mr. Torres, Mr. Underwood, and Ms. 
  Velazquez) 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Low-Income Housing Incentive Act''.

SEC. 2. GAO STUDY REGARDING PUBLIC HOUSING DEMOLITION AND DISPOSITION 
              AND NEED FOR LARGER PUBLIC HOUSING DWELLING UNITS.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study of public housing in various areas and public housing 
agencies throughout the United States, under which the Comptroller 
General shall--
            (1) determine whether the existing requirements regarding 
        demolition and disposition of public housing dwelling units 
        prevent or inhibit public housing agencies from effectively 
        replacing severely distressed public housing dwelling units or 
        result in the continued operation or funding of severely 
        distressed public housing that should be replaced;
            (2) develop a realistic plan that provides an expedited 
        waiver of the existing rules regarding replacement of public 
        housing dwelling units demolished or disposed of in any case 
        involving severely distressed public housing in which the 
        public housing agency provides--
                    (A) an additional number of affordable dwelling 
                units comparable to the number demolished or disposed 
                of;
                    (B) services for the families in such new dwelling 
                units comparable to the services provided for families 
                in the public housing demolished or disposed of; and
                    (C) protections sufficient to ensure assistance for 
                any family displaced because of the demolition or 
                disposition;
            (3) determine--
                    (A) the legal and practical impediments to, and the 
                effectiveness of, allowing State and local governments 
                to provide financial assistance to public housing 
                agencies for the development or acquisition of public 
                housing dwelling units to comply with the existing 
                requirements regarding the replacement of public 
                housing dwelling units demolished or disposed of; and
                    (B) the appropriateness of allowing title or 
                control of such housing to revert to the State or local 
                government after a specified period of time, and, if 
                appropriate, the appropriate period of time before such 
                reversion;
            (4) the demand, among families eligible for occupancy in 
        dwelling units in public housing and families residing in 
        public housing, for dwelling units consisting of more than 1 
        bedroom; and
            (5) whether existing public housing projects have an 
        appropriate number of such dwelling units, taking into 
        consideration the demand for such units.
The Comptroller General shall submit a report describing the findings 
of the study conducted under this section not later than the expiration 
of the 12-month period beginning upon the date of the enactment of this 
Act.
    (b) Definitions.--For purposes of this section, the terms ``public 
housing'', ``public housing agencies'', and ``project'' have the 
meanings given such terms in section 3(b) of the United States Housing 
Act of 1937.

SEC. 3. DEMONSTRATION PROGRAM OF ASSISTANCE TO STATE HOUSING AGENCIES 
              FOR DEVELOPMENT OF AFFORDABLE RENTAL HOUSING.

    (a) Authority.--The Secretary of Housing and Urban Development 
shall carry out a program under this section to demonstrate the 
effectiveness of providing assistance to qualified State housing 
agencies to carry out affordable housing incentive loan programs in 
accordance with the requirements of this section.
    (b) Assistance.--Under the demonstration program, the Secretary 
shall provide assistance, to the extent amounts are provided in 
appropriation Acts for such assistance, to qualified State housing 
agencies. Any assistance provided under the demonstration program be 
used by the qualified State housing agency to carry out an affordable 
housing incentive loan program that meets the requirements of 
subsection (d).
    (c) Scope and Amount.--Under the demonstration program, the 
Secretary--
            (1) may provide assistance to not more than 5 qualified 
        State housing agencies;
            (2) may not provide more than $5,000,000 to any single 
        qualified State housing agency in any single fiscal year; and
            (3) may not provide assistance to more than 1 qualified 
        State housing agency for any single State.
    (d) Affordable Housing Incentive Loan Programs.--The Secretary may 
provide assistance under the demonstration program to a qualified State 
housing agency only if the agency is carrying out, or provides 
assurances to the Secretary (as the Secretary considers necessary) that 
the agency will carry out, an affordable housing incentive loan program 
that meets the following requirements:
            (1) Purpose.--Under the loan program, the qualified State 
        housing agency shall provide first, second, or other 
        subordinate mortgage loans to sponsors, and provide guarantees 
        for such loans made to sponsors, only for the new construction 
        or acquisition and substantial rehabilitation of rental housing 
        projects consisting of 4 or more affordable, safe, and sanitary 
        dwelling units.
            (2) Diversity of size of population.--The loan program 
        shall ensure that, in each fiscal year in which loans and loan 
        guarantees are available under the program, loans and 
        guarantees shall be made available for providing housing in 
        areas of varying sizes of population, including rural areas, 
        small towns, small cities, and major metropolitan areas, in 
        accordance with the need in the State for such housing in each 
        such type of area.
            (3) Housing purposes.--The loan program shall ensure that, 
        in each fiscal year in which loans and loan guarantees are 
        available under the program, loans and guarantees are made 
        available for providing housing for farmworkers, for families, 
        and for elderly families, in accordance with the need in the 
        State for each type of housing.
            (4) Low-income use.--The loan program shall require the 
        sponsor of the housing for which a loan or guarantee is made 
        under the program to enter into a contract with the qualified 
        State housing agency that provides that, for the term of the 
        loan or 12 years, whichever is longer--
                    (A) if the housing is financed by a first mortgage 
                loan provided using any obligation the interest on 
                which is excluded from gross income for purposes of the 
                Internal Revenue Code of 1986--
                            (i) not less than 20 percent of the 
                        dwelling units in the project shall be 
                        available for occupancy only by low-income 
                        families; and
                            (ii) the rent charged for such units does 
                        not exceed 30 percent of the adjusted income of 
                        a family whose income is equal to 80 percent of 
                        the median income for the area, as determined 
                        by the Secretary, with adjustment for the 
                        number of bedrooms in the unit;
                    (B) if the housing is financed by a first mortgage 
                loan that is not provided using any obligation the 
                interest on which is excluded from gross income for 
                purposes of the Internal Revenue Code of 1986--
                            (i) not less than 20 percent of the 
                        dwelling units in the project shall be 
                        available for occupancy only by very low-income 
                        families; and
                            (ii) the rent charged for such units does 
                        not exceed 30 percent of the adjusted income of 
                        a family whose income is equal to 50 percent of 
                        the median income for the area, as determined 
                        by the Secretary, with adjustment for the 
                        number of bedrooms in the unit; and
                    (C) if the sponsor uses a low-income housing tax 
                credit under section 42 of the Internal Revenue Code of 
                1986, the housing complies with the requirements under 
                such section regarding tenant income eligibility.
            (5) First mortgage loans.--Under the loan program, first 
        mortgage loans and guarantees of first mortgage loans shall be 
        available only to sponsors that are nonprofit organizations and 
        public agencies that have binding commitments for financial or 
        land contributions from sources other than the loan program.
            (6) Loan amount.--Except as provided in paragraph (7), a 
        loan made or guaranteed under the loan program may not be in an 
        amount exceeding the lesser of--
                    (A) 25 percent of the total cost of the housing 
                project; or
                    (B) the minimum amount necessary to make the 
                project economically feasible.
            (7) Loan amount for low-interest loans.--In the case of a 
        sponsor of a project eligible for a loan at the interest rate 
        under paragraph (10)(A) or a sponsor eligible for a first 
        mortgage loan or guarantee, a loan made or guaranteed under the 
        program may be in an amount exceeding 25 percent of the total 
        cost of the project, but may not exceed the minimum amount 
        necessary to make the project economically feasible.
            (8) Total amount of financing.--The loan program shall 
        provide that the aggregate amount of the loan made or 
        guaranteed under the loan program and any other loan for the 
        project to which the loan under the program is subordinate may 
        not exceed the value of the project (not taking into 
        consideration low-income use requirement under paragraph (4)).
            (9) Loan term.--The program shall provide that a loan made 
        or guaranteed under the program shall have a term not exceeding 
        15 years, except that--
                    (A) in the case of a loan for a project for which a 
                low-income housing tax credit under section 42 of the 
                Internal Revenue Code of 1986 is to be used to assist 
                the housing, the term may be established by the 
                qualified State housing agency at a duration 
                commensurate with the investment requirements 
                associated with the tax credit syndication;
                    (B) in the case of a loan for the purpose of making 
                safety, building preservation, health, sanitation, or 
                security-related repairs or improvements to a housing 
                project for elderly families that are required under 
                Federal, State, or local law, the term may not exceed 
                10 years and the sponsor shall enter into a binding 
                commitment to provide an amount equal to not less than 
                25 percent of the amount of the loan for the costs of 
                such repairs or improvements; and
                    (C) the term may be extended for the purpose of 
                extending the term of the low-income use requirements 
                under paragraph (4) applicable to the housing for which 
                the loan was made; and
            (10) Interest rate.--The interest rate for a loan made or 
        guaranteed under the program may be variable or fixed, but 
        shall be--
                    (A) not more than 3 percent per annum for loans 
                made for--
                            (i) housing for which the sponsor enters 
                        into a binding agreement with the qualified 
                        State housing agency that not less than 80 
                        percent of the dwelling units shall be 
                        available for occupancy only by farmworkers; or
                            (ii) the purpose under paragraph (9)(B); 
                        and
                    (B) not less than 3 percent per annum and not more 
                than 9 percent per annum, for loans for other types of 
                housing.
            (11) Selection of projects.--The loan program shall provide 
        a competitive process for selecting among sponsors of housing 
        projects applying for loans under the program, which shall be 
        based on criteria that include the extent to which--
                    (A) the project achieves the objectives under the 
                loan program regarding income and demographic 
                characteristics of tenants;
                    (B) the project achieves the objectives under the 
                loan program regarding distribution of available loan 
                amounts among urban, rural, and other areas;
                    (C) dwelling units in the housing project are 
                reserved for occupancy only by low- or very low-income 
                families and rented at amounts not exceeding the amount 
                provided under paragraph (4), for a duration longer 
                than required under paragraph (4) or any other 
                applicable Federal law;
                    (D) the number of dwelling units in the housing 
                project that are reserved for occupancy only by low- or 
                very low-income families and rented at amounts not 
                exceeding the applicable amount under paragraph (4) 
                exceeds the number of units required under paragraph 
                (4);
                    (E) counseling is provided for tenants of the 
                housing;
                    (F) tenants of the housing are permitted to use 
                rental assistance vouchers or certificates provided 
                pursuant to Federal or State law to pay for rental of 
                units in the project;
                    (G) the ratio of the total cost of the project to 
                the amount of the loan made under the loan program for 
                the project exceeds such ratio for other projects for 
                which applications are made;
                    (H) contributions for the project, or commitments 
                to make such contributions, have been made by units of 
                general local government;
                    (I) the project is feasible and economically 
                viable;
                    (J) a commitment for first mortgage financing for 
                the project has been made; and
                    (K) the sponsor has experience in providing 
                affordable housing and the ability to complete the 
                project.
            (12) Use of rental certificates.--The loan program shall 
        require that, if any voucher or certificate for rental 
        assistance provided pursuant to Federal or State law is used 
        for rental of any dwelling unit reserved for occupancy pursuant 
        to paragraph (4), the benefit of the voucher or certificate 
        shall be equally divided between the fund established under 
        paragraph (16) and the sponsor of the housing.
            (13) Loan transfer.--A loan made or guaranteed under the 
        program shall be subject to sale, transfer, or refinancing, 
        except that all requirements and conditions of the loan shall 
        apply after such sale, transfer or refinancing.
            (14) Rent controls.--The loan program shall provide that 
        housing provided with a loan under the program shall not be 
        subject to any State or local law, regulation, or ordinance 
        that regulates, limits, or controls rents.
            (15) Annual income certification.--The loan program shall 
        require sponsors of housing financed with loans made or 
        guaranteed under the program to annually certify to the 
        qualified State housing agency the income of tenants of the 
        housing for purposes of ensuring compliance with the low-income 
        occupancy requirements under paragraph (4).
            (16) Trust fund.--The loan program shall establish a 
        revolving fund, which shall--
                    (A) be administered by the qualified State housing 
                agency;
                    (B) be credited with (i) the amount of any 
                assistance provided under the demonstration program for 
                the loan program, (ii) any other amounts received to 
                carry out the loan program, (iii) any proceeds derived 
                from the use of such amounts, (iv) any repayments of 
                loans made under the loan program (together with 
                interest on loan amounts), (v) any proceeds from any 
                property sold, transferred, conveyed, or leased under 
                the loan program, and (vi) any other amounts received 
                pursuant to activities under the loan program; and
                    (C) be available only for making and guaranteeing 
                loans under the loan program and other costs of the 
                loan program.
            (17) Powers of shfa.--The qualified State housing agency 
        shall have the power, under the loan program--
                    (A) in the event of a default on a loan made or 
                guaranteed under the program, to foreclose on any 
                mortgage or security interest or commence any legal 
                action to protect the interest of the agency or fund 
                established under paragraph (16) and recover the amount 
                of the unpaid principal, accrued interest, and fees on 
                behalf of such fund;
                    (B) to acquire real and personal property and 
                interests therein when such acquisition is appropriate 
                to protect any loan;
                    (C) to sell, transfer, or convey any such property, 
                and in the event that a sale, transfer, or conveyance 
                can not be made within a reasonable time, to lease such 
                property for occupancy by eligible families;
                    (D) to negotiate with units of general local 
                government within the State for contributions for 
                housing provided with a loan made or guaranteed under 
                the loan program; and
                    (E) to inspect the books, records, accounts, files, 
                and papers of sponsors of housing provided with a loan 
                made or guaranteed under the loan program, to the 
                extent necessary to make, guarantee, and service loans 
                under the loan program.
    (e) Reports.--
            (1) To secretary.--Each qualified State housing agency that 
        receives assistance under the demonstration program under this 
        section in a fiscal year shall submit a report to the Secretary 
        regarding the activities under the loan program carried out by 
        the agency during such fiscal year. The report shall be 
        submitted not later than the expiration of the 3-month period 
        beginning upon the end of the fiscal year for which the report 
        is made and shall contain such information as the Secretary 
        shall require.
            (2) To congress.--The Secretary shall submit a report to 
        the Congress for each fiscal year in which the Secretary 
        provides assistance under the demonstration program under this 
        section to qualified State housing agencies. The report shall 
        be submitted not later than the expiration of the 3-month 
        period beginning upon the end of the fiscal year for which the 
        report is made and shall describe the demonstration program 
        under this section, the amount of assistance provided under the 
        program and the affordable housing incentive loan programs 
        assisted, and the housing assisted by such programs with 
        amounts under this section.
    (f) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) The term ``demonstration program'' means the 
        demonstration program for assistance carried out under this 
        section by the Secretary.
            (2) The term ``elderly family'' means a family whose head 
        (or their spouse), or whose sole member, is a person who is at 
        least 62 years of age. The term includes 2 or more persons of 
        such age living together, and 1 or more persons of such age 
        living with 1 or more persons determined to be essential to 
        their care or well-being.
            (3) The term ``farmer'' means a person (and the family of 
        such person) who receives a substantial portion of his or her 
        income from primary production of agricultural or aquacultural 
        commodities or the handling of such commodities in the 
        unprocessed stage, and includes any person (and the family of 
        such person) who is retired or disabled, but was a farmworker 
        at the time of retirement or becoming disabled.
            (4) The term ``first mortgage'' means such classes of first 
        liens or interests in property as are commonly given to secure 
        advances on, or the unpaid purchase price of, real estate under 
        the laws of the State in which the real estate is located, 
        together with the credit instrument, if any, secured thereby.
            (5) The terms ``income'' and ``adjusted income'' have the 
        meanings given the terms in section 3(b) of the United States 
        Housing Act of 1937.
            (6) The term ``loan program'' means an affordable housing 
        incentive loan program carried out by a qualified State housing 
        agency.
            (7) The terms ``low-income families'' and ``very low-income 
        families'' have the meanings given such terms in section 3(b) 
        of the United States Housing Act of 1937.
            (8) The term ``mortgage'' means a first or subordinate 
        mortgage on real estate, in fee simple, or on a leasehold (A) 
        under a lease for not less than 99 years which is renewable, or 
        (B) under a lease having a period of not less than 10 years to 
        run beyond the maturity date of the mortgage.
            (9) The term ``nonprofit organization'' means a private 
        organization--
                    (A) no part of the net earnings of which inures to 
                the benefit of any member, shareholder, founder, 
                contributor, or individual; and
                    (B) that is approved by the qualified State housing 
                agency involved as to financial responsibility.
            (10) The term ``qualified State housing agency'' means 
        any--
                    (A) public body or agency, publicly sponsored 
                corporation, or instrumentality of one or more States 
                that is designated by the chief executive officer of 
                the State or States for purposes of section 802 of the 
                Housing and Community Development Act of 1974; or
                    (B) any other agency of a State authorized to carry 
                out activities under this section that the Secretary 
                determines is capable of participating in the 
                demonstration program.
            (11) The term ``Secretary'' means the Secretary of Housing 
        and Urban Development.
            (12) The term ``sponsor'' includes nonprofit and for-profit 
        organizations and entities and public agencies and entities.
            (13) The term ``State'' means the States of the United 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Commonwealth of the Northern Mariana Islands, Guam, 
        the Virgin Islands, American Samoa, and any other territory or 
        possession of the United States.
            (14) The term ``substantial rehabilitation'' means repair 
        or rehabilitation of a dwelling unit the cost of which exceeds 
        40 percent of the value of the dwelling unit before such 
        rehabilitation.
            (15) The term ``unit of general local government'' means 
        any city, town, township, county, parish, village, or other 
        general purpose political subdivision of a State.
    (g) Regulations.--The Secretary shall issue any regulations 
necessary to carry out the demonstration program under this section.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $20,000,000 for fiscal year 1995 
and $20,000,000 for fiscal year 1996.
    (i) Termination of Demonstration.--The Secretary may not provide 
assistance under the demonstration program under this section after the 
conclusion of the 5th fiscal year that begins after the date of the 
enactment of this Act.

SEC. 4. MERGER OF SECTION 8 CERTIFICATE AND VOUCHER PROGRAMS.

    (a) In General.--Section 8 of the United States Housing Act of 1937 
(42 U.S.C. 1437f) is amended to read as follows:

          ``rental housing assistance for low-income families

    ``Sec. 8. (a) Authority and Purpose.--
            ``(1) In general.--For the purposes of aiding low-income 
        families in obtaining a decent place to live and promoting 
        economically mixed housing, the Secretary may provide 
        assistance payments with respect to existing housing in 
        accordance with the provisions of this section.
            ``(2) Elderly housing.--Notwithstanding any other provision 
        of this Act, assistance payments under this section may be 
        provided, in accordance with regulations prescribed by the 
        Secretary, with respect to some or all of the units in any 
        project approved pursuant to section 202 of the Housing Act of 
        1959 (as in effect before October 1, 1991).
    ``(b) Annual Contributions Contracts for Rental Assistance.--
            ``(1) In general.--The Secretary may enter into annual 
        contributions contracts under this subsection with public 
        housing agencies to provide rental housing assistance under 
        this section for low-income families. The Secretary shall enter 
        into a separate annual contributions contract with each public 
        housing agency to obligate the authority approved each year. 
        Each such annual contributions contract shall bind the 
        Secretary to make such authority, and any amendments increasing 
        such authority, available to the public housing agency for a 
        specified period.
            ``(2) Secretary acting as pha.--In areas where no public 
        housing agency has been organized or where the Secretary 
        determines that a public housing agency is unable to implement 
        the provisions of this section, the Secretary may enter into 
        such contracts and perform the other functions assigned to a 
        public housing agency by this section.
            ``(3) Treatment of assistance for supportive housing for 
        the disabled.--The Secretary may not consider the receipt by a 
        public housing agency of assistance under section 811(b)(1) of 
        the Cranston-Gonzalez National Affordable Housing Act, or the 
        amount received, in approving assistance under this section for 
        the agency or in determining the amount of such assistance to 
        be provided to the agency.
    ``(c) Assistance Contracts.--
            ``(1) In general.--Each public housing agency that receives 
        amounts under an annual contributions contract may enter into 
        assistance contracts to make rental assistance payments to 
        owners of existing dwelling units in accordance with the 
        provisions of this section.
            ``(2) PHA acting as owner.--A public housing agency may 
        contract to make rental assistance payments under this section 
        to itself (or any agency or instrumentality thereof) as the 
        owner of dwelling units, and the agency shall be subject to the 
        same program requirements as are applied to other owners. In 
        such cases, the Secretary may establish initial rents within 
        applicable limits.
            ``(3) Inapplicable provisions.--Sections 5(e) and 6 and any 
        other provisions of this Act that are inconsistent with the 
        provisions of this section shall not apply to assistance 
        contracts entered into pursuant to this section.
    ``(d) Maximum Monthly Rent.--
            ``(1) In general.--Each assistance contract entered into 
        pursuant to this section shall establish the maximum monthly 
        rent (including utilities and all maintenance and management 
        charges) that the owner is entitled to receive for each 
        dwelling unit for which rental assistance payments are to be 
        made under the contract. Except as provided in paragraph (2), 
        the maximum monthly rent shall not exceed by more than 10 
        percent the fair market rental under subsection (e) for the 
        market area in which the dwelling unit is located. If units 
        assisted under this section are exempt from local rent control 
        while they are so assisted or otherwise, the maximum monthly 
        rent for such units shall be reasonable in comparison with 
        other units in the market area that are exempt from local rent 
        control.
            ``(2) Exception.--The maximum monthly rent may exceed the 
        fair market rental by more than 10 but not more than 20 
        percent, but only if the Secretary determines that special 
        circumstances warrant such higher maximum rent or that such 
        higher rent is necessary to the implementation of a 
        comprehensive housing affordability strategy under section 105 
        of the Cranston-Gonzalez National Affordable Housing Act.
            ``(3) Annual adjustments.--Each assistance contract shall 
        provide for adjustment in the maximum monthly rents for units 
        covered by the contract not less than annually to reflect 
        changes in the fair market rentals established under subsection 
        (e) for the housing area for similar types and sizes of 
        dwelling units or, if the Secretary determines, on the basis of 
        a reasonable formula.
            ``(4) Adjustments due to expenses.--Each assistance 
        contract shall further provide for the Secretary to make 
        additional adjustments in the maximum monthly rent for units 
        assisted under the contract to the extent the Secretary 
        determines such adjustments are necessary to reflect increases 
        in the actual and necessary expenses of owning and maintaining 
        the units that have resulted from substantial general increases 
        in real property taxes, utility rates, or similar costs that 
        are not adequately compensated for by the adjustment in the 
        maximum monthly rent authorized by paragraph (3). The Secretary 
        shall make additional adjustments in the maximum monthly rent 
        for units under contract (subject to the availability of 
        appropriations for contract amendments) to the extent the 
        Secretary determines such adjustments are necessary to reflect 
        increases in the actual and necessary expenses of owning and 
        maintaining the units that have resulted from the expiration of 
        a real property tax exemption.
            ``(5) Adjustments due to criminal activity.--If the 
        Secretary determines that a project assisted under this section 
        is located in a community where criminal activity is generally 
        prevalent and the operating, maintenance, and capital repair 
        expenses for the project have been substantially increased 
        primarily as a result of the prevalence of such activity, the 
        Secretary may (at the discretion of the Secretary and subject 
        to the availability of appropriations for contract amendments 
        for this purpose), on a project-by-project basis, provide 
        adjustments to the maximum monthly rents, to a level not 
        exceeding 120 percent of the project rents, to cover the costs 
        of maintenance, security, capital repairs, and reserves 
        required for the owner to carry out a strategy acceptable to 
        the Secretary for addressing the problem of criminal activity. 
        The Secretary may waive the applicability of any rent 
        comparability standard required under this subsection to 
        implement this paragraph.
            ``(6) Adjustments due to lead-based paint reduction for 
        housing receiving project-based assistance.--The Secretary may 
        (at the discretion of the Secretary and subject to the 
        availability of appropriations for contract amendments), on a 
        project-by-project basis for projects receiving project-based 
        assistance, provide adjustments to the maximum monthly rents to 
        cover the costs of evaluating and reducing lead-based paint 
        hazards, as defined in section 1004 of the Residential Lead-
        Based Paint Hazard Reduction Act of 1992.
            ``(7) Limitations on adjustments.--
                    ``(A) General comparability rule.--Adjustments in 
                the maximum rents under paragraphs (3) through (6) 
                shall not result in material differences between the 
                rents charged for assisted units and unassisted units 
                of similar quality, type, and age in the same market 
                area, as determined by the Secretary.
                    ``(B) Comparability studies.--
                            ``(i) To carry out subparagraph (A), the 
                        Secretary shall issue regulations to provide 
                        for conducting comparability studies for 
                        projects where the Secretary has reason to 
                        believe that the application of the formula 
                        adjustments under paragraph (3) would result in 
                        such material differences.
                        The Secretary shall conduct such studies upon 
                        the request of any owner of any project, or as 
                        the Secretary determines to be appropriate by 
                        establishing, to the extent practicable, a 
                        modified annual adjustment factor for such 
                        market area, as the Secretary shall designate, 
                        that is geographically smaller than the 
                        applicable housing area used for the 
                        establishment of the annual adjustment factor 
                        under paragraph (3). The Secretary shall 
                        establish such modified annual adjustment 
                        factor on the basis of the results of a study 
                        conducted by the Secretary of the rents 
                        charged, and any change in such rents over the 
                        previous year, for assisted units and 
                        unassisted units of similar quality, type, and 
                        age in the smaller market area. Where the 
                        Secretary determines that such modified annual 
                        adjustment factor cannot be established or that 
                        such factor when applied to a particular 
                        project would result in material differences 
                        between the rents charged for assisted units 
                        and unassisted units of similar quality, type, 
                        and age in the same market area, the Secretary 
                        may apply an alternative methodology for 
                        conducting comparability studies in order to 
                        establish rents that are not materially 
                        different from rents charged for comparable 
                        unassisted units.
                            ``(ii) If the Secretary or appropriate 
                        State agency does not complete and submit to 
                        the project owner a comparability study not 
                        later than 60 days before the anniversary date 
                        of the assistance contract under this section, 
                        the automatic annual adjustment factor shall be 
                        applied. The Secretary may not reduce the 
                        contract rents in effect on or after April 15, 
                        1987, for newly constructed, substantially 
                        rehabilitated, or moderately rehabilitated 
                        projects assisted under this section (including 
                        projects assisted under this section as in 
                        effect prior to November 30, 1983), unless the 
                        project has been refinanced in a manner that 
                        reduces the periodic payments of the owner. Any 
                        maximum monthly rent that has been reduced by 
                        the Secretary after April 14, 1987, and prior 
                        to November 7, 1988, shall be restored to the 
                        maximum monthly rent in effect on April 15, 
                        1987.
                            ``(iii) For any project which has had its 
                        maximum monthly rents reduced after April 14, 
                        1987, the Secretary shall make assistance 
                        payments (from amounts reserved for the 
                        original contract) to the owner of such project 
                        in an amount equal to the difference between 
                        the maximum monthly rents in effect on April 
                        15, 1987, and the reduced maximum monthly 
                        rents, multiplied by the number of months that 
                        the reduced maximum monthly rents were in 
                        effect.
    ``(e) Fair Market Rentals.--
            ``(1) In general.--The Secretary shall establish fair 
        market rentals under this subsection periodically, but not less 
        than annually, for existing rental dwelling units suitable for 
        occupancy by low-income families assisted under this section. 
        The Secretary shall establish the fair market rental by market 
        area for various sizes and types of dwelling units.
            ``(2) Effectiveness and adjustment.--The Secretary shall 
        publish proposed fair market rentals for each area in the 
        Federal Register with reasonable time for public comment, and 
        such fair market rentals shall become effective upon the date 
        of publication in final form in the Federal Register. Each fair 
        market rental in effect under this subsection shall be adjusted 
        to be effective on October 1 of each year to reflect changes, 
        based on the most recent available data trended so the rentals 
        will be current for the year to which they apply, of rents for 
        existing rental dwelling units, as the case may be, of various 
        sizes and types in the market area suitable for occupancy by 
        families assisted under this section.
            ``(3) Certain areas.--The Secretary shall establish 
        separate fair market rentals under this subsection for 
        Westchester County in the State of New York. The Secretary 
        shall also establish separate fair market rentals under this 
        paragraph for Monroe County in the Commonwealth of 
        Pennsylvania. In establishing fair market rentals for the 
        remaining portion of the market areas in which Monroe County is 
        located, the Secretary shall establish the fair market rentals 
        as if such portion included Monroe County.
    ``(f) Amount of Monthly Assistance Payment.--
            ``(1) In general.--The amount of the monthly assistance 
        payment under this section with respect to any dwelling unit 
        shall be the difference between the maximum monthly rent that 
        the contract provides that the owner is to receive for the unit 
        and the rent the family is required to pay under section 3(a).
            ``(2) Increases in assistance payments.--The Secretary 
        shall take any action necessary, including making contracts for 
        assistance payments in amounts exceeding the amounts required 
        upon the initial renting of dwelling units, reserving annual 
        contributions authority for the purpose of amending assistance 
        contracts, or allocating a portion of new authorizations for 
        the purpose of amending assistance contracts, to ensure that 
        assistance payments are increased on a timely basis to cover 
        increases in maximum monthly rents or decreases in family 
        incomes.
            ``(3) Reviews of family incomes.--
                    ``(A) In general.--Reviews of family incomes for 
                purposes of this section shall be made annually and 
                shall be subject to the provisions of section 904(e) of 
                the Stewart B. McKinney Homeless Assistance Amendments 
                Act of 1988. Any other reviews of family incomes under 
                this paragraph may be used only for the purpose of 
                ensuring that a family does not pay as rent for a 
                dwelling unit assisted under this section more than the 
                amount required under section 3(a).
                    ``(B) Procedures.--The Secretary shall establish 
                procedures that are appropriate and necessary to ensure 
                that income data provided to public housing agencies 
                and owners by families applying for or receiving 
                assistance under this section is complete and accurate. 
                In establishing such procedures, the Secretary shall 
                annually select a random sample of families to 
                authorize the Secretary to obtain information on the 
                families for the purpose of income verification, or to 
                allow the families to provide such information 
                themselves. Such information may include data 
                concerning unemployment compensation and Federal income 
                taxation and data relating to benefits made available 
                under the Social Security Act, the Food Stamp Act of 
                1977, or title 38, United States Code.
                    ``(C) Confidentiality.--Any income information 
                received pursuant to this paragraph shall remain 
                confidential and shall be used only for the purpose of 
                verifying incomes in order to determine eligibility of 
                families for benefits (and the amount of such benefits, 
                if any) under this section.
    ``(g) Eligibility of Units for Assistance.--Each assistance 
contract shall provide that assistance payments may be made only with 
respect to the following dwelling units:
            ``(1) Occupied units.--A dwelling unit under lease for 
        occupancy by a family determined to be a low-income family at 
        the time it initially occupies the dwelling unit or by a family 
        that qualifies to receive assistance under this section 
        pursuant to section 223 or 226 of the Low-Income Housing 
        Preservation and Resident Homeownership Act of 1990.
            ``(2) Unoccupied units.--An unoccupied dwelling unit, but 
        only if--
                    ``(A)(i) a family vacates the dwelling unit before 
                the expiration date of the lease for occupancy, or (ii) 
                a good faith effort is being made to fill the 
                unoccupied unit; and
                    ``(B) the costs of such vacancy are not charged to 
                or paid by the family vacating the dwelling unit.
        Payments for units referred to in this paragraph may be made 
        only for a period not exceeding 60 days, except that such 
        payments may be made, in the case of a newly constructed or 
        substantially rehabilitated project, after the expiration of 
        such 60-day period in an amount equal to the debt service 
        attributable to such an unoccupied dwelling unit for a period 
        not to exceed one year, if a good faith effort is being made to 
        fill the unit and the unit provides decent, safe, and sanitary 
        housing. No such payment may be made after the expiration of 
        such 60-day period if the Secretary determines that the 
        dwelling unit is in a project which provides the owner with 
        revenues exceeding the costs incurred by such owner with 
        respect to such project.
    ``(h) Other Provisions of Assistance Contracts.--Contracts to make 
assistance payments entered into by any public housing agency (or by 
the Secretary) with an owner of existing housing units shall meet the 
following requirements:
            ``(1) Contract term.--Each assistance contract shall have a 
        term of not less than one month nor more than 180 months. The 
        Secretary shall permit public housing agencies to enter into 
        assistance contracts having terms of less than 12 months to the 
        extent necessary to avoid disruption in assistance to eligible 
        families if the annual contributions contract for the agency 
        under subsection (b) will expire within 1 year.
            ``(2) Preferences.--Each assistance contract shall provide 
        that, in making assistance available pursuant to the contract--
                    ``(A) for not less than 70 percent of the families 
                who initially receive project-based assistance, and
                    ``(B) for not less than 90 percent of the families 
                who initially receive tenant-based assistance in any 1-
                year period,
        preference shall be given to families that (i) occupy 
        substandard housing (including families that are homeless or 
        living in a shelter for homeless families), (ii) are paying 
        more than 50 percent of family income for rent, (iii) are 
        involuntarily displaced (including displacement because of 
        disposition of a multifamily housing project under section 203 
        of the Housing and Community Development Amendments of 1978) at 
        the time they are seeking assistance under this section, or 
        (iv) are residing in public housing.
            ``(3) Secondary preferences.--Each assistance contract 
        shall provide that, for any assistance remaining in any 1-year 
        period after assistance is made available pursuant to paragraph 
        (2), preference for such assistance shall be given to families 
        who qualify under a system of local preferences established by 
        the public housing agency in writing and after public hearing 
        to respond to local housing needs and priorities, which may 
        include--
                    ``(A) assisting very low-income families who either 
                reside in transitional housing assisted under title IV 
                of the Stewart B. McKinney Homeless Assistance Act or 
                participate in a program designed to provide public 
                assistance recipients with greater access to employment 
                and educational opportunities;
                    ``(B) assisting families in accordance with 
                subsection (q)(1)(B);
                    ``(C) assisting families identified by local public 
                agencies involved in providing for the welfare of 
                children as having a lack of adequate housing that is a 
                primary factor in the imminent placement of a child in 
                foster care, or in preventing the discharge of a child 
                from foster care and reunification with his or her 
                family;
                    ``(D) assisting youth, upon discharge from foster 
                care, in cases in which return to the family or 
                extended family or adoption is not available;
                    ``(E) assisting veterans who are eligible and have 
                applied for assistance, will use the assistance for a 
                dwelling unit designed for the handicapped, and, upon 
                discharge or eligibility for discharge from a hospital 
                or nursing home, have physical disability which, 
                because of the configuration of their homes, prevents 
                them from access to or use of their homes; and
                    ``(F) achieving other objectives of national 
                housing policy as established by law.
            ``(4) Tenant selection.--Each assistance contract shall 
        provide that the selection of tenants for such dwelling units 
        shall be the function of the owner, subject to any provisions 
        of the annual contributions contract between the Secretary and 
        the agency. The owner shall use tenant selection criteria, 
        which shall provide as follows:
                    ``(A) Prohibition of persons engaged in drug 
                activity.--The criteria shall prohibit any individual 
                or family evicted from housing assisted under this Act 
                by reason of drug-related criminal activity from having 
                a preference under any provision of this paragraph for 
                3 years unless the evicted tenant successfully 
                completes a rehabilitation program approved by the 
                agency or owner. The agency or the owner may waive the 
                application of the preceding sentence under standards 
                established by the Secretary, which shall provide for 
                such waiver for any member of a family of an individual 
                prohibited from tenancy under this subparagraph who the 
                agency or owner determines clearly did not participate 
                in and had no knowledge of such criminal activity or 
                when circumstances leading to eviction no longer exist.
                    ``(B) Other requirements for project-based 
                assistance.--With respect only to project-based 
                assistance, the criteria shall--
                            ``(i) be consistent with the purpose of 
                        improving housing opportunities for very low-
                        income families;
                            ``(ii) be reasonably related to program 
                        eligibility and an applicant's ability to 
                        perform the obligations of the assisted lease;
                            ``(iii) be established in writing; and
                            ``(iv) provide for the owner to promptly 
                        provide to any rejected applicant (I) written 
                        notice of the grounds for the rejection, and 
                        (II) an opportunity to meet with the decision 
                        maker to evaluate the validity of the reasons 
                        for rejection and rectify any erroneous 
                        decisions.
            ``(5) Lease provisions.--Each assistance contract shall 
        provide that the lease between the tenant of any unit and the 
        owner shall be for at least one year or the term of such 
        assistance contract, whichever is shorter, and that the lease 
        shall contain other terms and conditions specified by the 
        Secretary, including provisions meeting the requirements of 
        paragraphs (6), (7), and (8).
            ``(6) General grounds for termination of tenancy.--Each 
        assistance contract shall provide that the owner shall not 
        terminate the tenancy of the tenant of any unit except for 
        serious or repeated violation of the terms and conditions of 
        the lease, for violation of applicable Federal, State, or local 
        law, or for other good cause.
            ``(7) Termination for criminal activity.--Each assistance 
        contract shall provide that any criminal activity that 
        threatens the health, safety, or right to peaceful enjoyment of 
        the premises by other tenants, any criminal activity that 
        threatens the health, safety, or right to peaceful enjoyment of 
        their residences by persons residing in the immediate vicinity 
        of the premises, or any drug-related criminal activity on or 
        near such premises, engaged in by a tenant of any unit, any 
        member of the tenant's household, or any guest or other person 
        under the tenant's control, shall be cause for termination of 
        tenancy.
            ``(8) Notice of termination of tenancy.--Each assistance 
        contract shall provide that before terminating the tenancy of 
        any tenant, the owner shall provide written notice to the 
        tenant specifying the legal and factual grounds for such 
        action. Such notice shall be provided to the tenant not less 
        than 30 days before termination, except that in cases of 
        termination for nonpayment of rent such notice shall be 
        provided not less than 14 days before termination.
            ``(9) Maintenance and replacement.--Each assistance 
        contract shall provide that maintenance and replacement 
        (including redecoration) shall be performed in accordance with 
        the standard practice for the building concerned as established 
        by the owner and agreed to by the agency (or the Secretary). 
        With the approval of the Secretary, the public housing agency 
        administering a contract under this section with respect to 
        existing housing units may exercise all management and 
        maintenance responsibilities with respect to the units pursuant 
        to a contract between such agency and the owner of such units. 
        Each assistance contract shall also provide that, if the agency 
        (or the Secretary) determines that a unit assisted under this 
        section fails to comply in any material respect with standards 
        for housing quality for units so assisted, the agency (or the 
        Secretary) may withhold some or all of the assistance amounts 
        under this section with respect to such unit and promptly--
                    ``(A) use such amounts to make necessary repairs or 
                contract to have such repairs made;
                    ``(B) release any withheld amounts to the owner 
                after repairs are made by the owner, in an amount not 
                exceeding the cost of the repairs;
                    ``(C) release any withheld amounts to the 
                applicable State or local housing agency after repairs 
                are made by such agency, in an amount not exceeding the 
                cost of the repairs; or
                    ``(D) upon the request of the tenant, release any 
                withheld amounts to--
                            ``(i) the tenant to reimburse the tenant 
                        for the reasonable cost of any necessary 
                        repairs performed or paid for by the tenant; or
                            ``(ii) such person secured by the tenant 
                        and approved by the agency (or the Secretary) 
                        to make such necessary repairs.
        If an agency (or the Secretary) withholds any assistance 
        amounts pursuant to the preceding sentence, the agency (or the 
        Secretary) may not terminate the assistance contract unless and 
        until the tenant has relocated to decent, safe, and sanitary 
        housing.
            ``(10) Standards and obligations of residency in housing 
        receiving project-based assistance.--Each assistance contract 
        for project-based assistance under subsection (i) shall provide 
        that the owner shall ensure and maintain compliance with 
        subtitle C of title VI of the Housing and Community Development 
        Act of 1992 and any regulations issued under such subtitle.
            ``(11) Other.--Each assistance contract shall provide that 
        the agency and the owner shall carry out such other appropriate 
        terms and conditions as may be mutually agreed to by the agency 
        and owner.
    ``(i) Project-Based Assistance.--
            ``(1) Authority.--Pursuant to an annual contributions 
        contract entered into under subsection (b), a public housing 
        agency may enter into a assistance contract providing for 
        assistance payments under this section that are attached to a 
        structure.
            ``(2) Requirements.--Any public housing agency may approve 
        project-based assistance under this subsection with respect to 
        any or all of the assistance provided by the public housing 
        agency if--
                    ``(A) the owner agrees to rehabilitate the 
                structure other than with assistance under this Act and 
                the owner otherwise complies with the requirements of 
                this section; and
                    ``(B) in the case of any newly constructed 
                structure, the owner or prospective owner agrees to 
                construct the structure other than with assistance 
                under this Act and otherwise complies with the 
                requirements of this section.
            ``(3) Long-term affordability.--
                    ``(A) In general.--In the case of an assistance 
                contract for project-based assistance under this 
                subsection, a public housing agency shall enter into a 
                contract with an owner, contingent upon the future 
                availability of appropriations for the purpose of 
                renewing expiring contracts for assistance payments as 
                provided in appropriations Acts, to extend the term of 
                the underlying assistance contract for such period or 
                periods as the Secretary determines to be appropriate 
                to achieve long-term affordability of the housing. The 
                contract shall obligate the owner to have the 
                extensions of the assistance contract accepted by the 
                owner and the owner's successors in interest.
                    ``(B) Term of assistance for low-income housing 
                preservation.--The contract for assistance may, at the 
                option of the public housing agency, have an initial 
                term not exceeding 15 years for any assistance that is 
                attached--
                            ``(i) to projects assisted under a State 
                        program that permits the owner of the projects 
                        to prepay a State assisted or subsidized 
                        mortgage on the structure; and
                            ``(ii) for the purpose of providing 
                        incentives to owners to preserve such projects 
                        for occupancy by low- and moderate-income 
                        families (for the period that assistance under 
                        this subparagraph is available) and assisting 
                        low-income tenants to afford any increases in 
                        rent that may be required to induce the owner 
                        to maintain occupancy in the project by low- 
                        and moderate-income tenants.
                Any assistance provided to low-income tenants in the 
                manner described in this subparagraph shall not be 
                considered for purposes of the limitation under 
                subsection (h)(2) regarding the percentage of families 
                that may receive assistance under this section who do 
                not qualify for preferences under such subsection.
            ``(4) Service coordinators.--In determining the amount of 
        assistance provided under an assistance contract for project-
        based assistance under this paragraph or a contract for 
        assistance for housing constructed or substantially 
        rehabilitated pursuant to assistance provided under section 
        8(b)(2) of this Act (as such section existed before October 1, 
        1983), the Secretary may, to the extent amounts are provided 
        under section 5(c), increase the amount annually provided with 
        respect to such project to provide for the costs of employing 
        or otherwise retaining the services of one or more service 
        coordinators under section 671 of the Housing and Community 
        Development Act of 1992 to coordinate the provision of any 
        services within the project for residents of the project who 
        are elderly or disabled families.
    ``(j) Termination of Assistance Contracts.--
            ``(1) Notice by owner.--Any owner terminating any 
        assistance contract shall provide written notice to the 
        Secretary and the tenants involved of the proposed termination 
        not less than one year before the termination of the contract 
        (but not less than 90 days in the case of tenant-based 
        assistance). The notice shall specify the date of the 
        termination and the reasons for the termination, with detail 
        sufficient to enable the Secretary to evaluate whether the 
        termination is lawful and whether additional actions can be 
        taken by the Secretary to avoid the termination. The notice 
        shall include a statement that the owner and the Secretary may 
        agree to a renewal of the contract, thus avoiding the 
        termination.
            ``(2) Review of notice by secretary.--The Secretary shall 
        review the notice, shall consider whether additional actions 
        can be taken by the Secretary to avoid the termination, and 
        shall ensure a proper adjustment of the contract rents for the 
        project in compliance with the requirements of subsection (d) 
        and paragraph (3) of this subsection. The Secretary shall issue 
        a written finding of the legality of the termination and the 
        reasons for the termination, including the actions considered 
        or taken to avoid the termination. Within 30 days after 
        issuance of the findings, the owner shall provide written 
        notice to each tenant of the decision, together with the 
        written findings of the Secretary regarding the termination. In 
        the case of project-based assistance, the Secretary and the 
        owner shall complete the actions under this paragraph not later 
        than the expiration of the 9-month period beginning upon the 
        date that the owner provides written notice of termination 
        under paragraph (1).
            ``(3) Adjustment of contract rent.--If an owner provides 
        notice of proposed termination under paragraph (1) and the 
        contract rent is less than the maximum monthly rent for units 
        assisted under this section, the Secretary shall adjust the 
        contract rent based on the maximum monthly rent for units 
        assisted under this section and the value of the low-income 
        housing.
            ``(4) Notice of rent increases.--Each assistance contract 
        for project-based assistance under this section shall require 
        the owner to notify tenants at least 90 days before the 
        expiration of the contract of any rent increase which may occur 
        as a result of the expiration of such contract.
            ``(5) Definition of termination.--For purposes of this 
        subsection, the term `termination' means the expiration of the 
        assistance contract or the refusal of the owner to renew an 
        assistance contract, which shall include the termination of 
        tenancy by an owner for business reasons.
    ``(k) Rental Assistance for Manufactured Housing.--
            ``(1) In general.--The Secretary may enter into contracts 
        to make assistance payments under this subsection to assist 
        low-income families by making rental assistance payments on 
        behalf of any such family that utilizes a manufactured home as 
        its principal place of residence. In carrying out this 
        subsection, the Secretary may--
                    ``(A) enter into annual contributions contracts 
                with public housing agencies pursuant to which such 
                agencies may enter into assistance contracts to make 
                such assistance payments to the owners of such real 
                property; or
                    ``(B) enter into such contracts directly with the 
                owners of such real property.
            ``(2) Use of assistance.--Rental assistance payments under 
        this subsection may be made with respect to the rental of the 
        real property on which is located a manufactured home that is 
        owned by a low-income family or with respect to the rental by 
        such a family of a manufactured home and the real property on 
        which it is located.
            ``(3) Assistance for rental of manufactured home site.--
                    ``(A) Maximum monthly rent.--A contract entered 
                into pursuant to this paragraph shall establish the 
                maximum monthly rent (including maintenance and 
                management charges) that the owner is entitled to 
                receive for the space on which a manufactured home is 
                located and with respect to which assistance payments 
                are to be made. The maximum monthly rent shall not 
                exceed by more than 10 percent the fair market rental 
                established by the Secretary periodically (but not less 
                than annually) with respect to the market area for the 
                rental of real property suitable for occupancy by 
                families assisted under this paragraph.
                    ``(B) Amount of monthly assistance payment.--The 
                amount of any monthly assistance payment with respect 
                to any family that rents real property that is assisted 
                under this paragraph, and on which is located a 
                manufactured home that is owned by such family shall be 
                the difference between the rent the family is required 
                to pay under section 3(a) and the sum of--
                            ``(i) the monthly payment made by such 
                        family to amortize the cost of purchasing the 
                        manufactured home;
                            ``(ii) the monthly utility payments made by 
                        such family, subject to reasonable limitations 
                        prescribed by the Secretary; and
                            ``(iii) the maximum monthly rent permitted 
                        with respect to the real property which is 
                        rented by such family for the purpose of 
                        locating its manufactured home;
                except that in no case may such assistance exceed the 
                total amount of such maximum monthly rent.
            ``(4) Assistance for rental of manufactured home and 
        site.--
                    ``(A) Maximum monthly rent.--Contracts entered into 
                pursuant to this paragraph shall establish the maximum 
                monthly rent permitted with respect to the manufactured 
                home and the real property on which it is located and 
                with respect to which assistance payments are to be 
                made. The maximum monthly rent shall not exceed by more 
                than 10 percent the fair market rental established by 
                the Secretary periodically (but not less than annually) 
                with respect to the market area for the rental of a 
                manufactured home and the real property on which it is 
                located suitable for occupancy by families assisted 
                under this paragraph; except that the maximum monthly 
                rent may exceed the fair market rental by more than 10 
                but not more than 20 percent if the Secretary 
                determines that special circumstances warrant such 
                higher maximum rent.
                    ``(B) Amount of monthly assistance payment.--The 
                amount of any monthly assistance payment with respect 
                to any family that rents a manufactured home and the 
                real property on which it is located and that is 
                assisted under this paragraph shall be the difference 
                between the rent the family is required to pay under 
                section 3(a) and the sum of--
                            ``(i) the monthly utility payments made by 
                        such family, subject to reasonable limitations 
                        prescribed by the Secretary; and
                            ``(ii) the maximum monthly rent permitted 
                        with respect to the manufactured home and real 
                        property on which it is located.
            ``(5) Adjustment of maximum monthly rents.--The provisions 
        of paragraphs (3) through (7) of subsection (d) shall apply to 
        the adjustments of maximum monthly rents under this subsection.
            ``(6) Contract term.--Each contract entered into under the 
        subsection shall be for a term of not less than one month and 
        not more than 180 months; except that in any case in which the 
        manufactured home park is substantially rehabilitated or newly 
        constructed, such term may not be less than 240 months, nor 
        more than the maximum term for a manufactured home loan 
        permitted under section 2(b) of the National Housing Act.
            ``(7) Applicability.--The Secretary may carry out this 
        subsection without regard to whether the manufactured home park 
        is existing, substantially rehabilitated, or newly constructed.
            ``(8) Limitation on substantially rehabilitated and newly 
        constructed manufactured home parks.--In the case of any 
        substantially rehabilitated or newly constructed manufactured 
        home park containing spaces with respect to which assistance is 
        made under this subsection, the principal amount of the 
        mortgage attributable to the rental spaces within the park may 
        not exceed an amount established by the Secretary which is 
        equal to or less than the limitation for manufactured home 
        parks described in section 207(c)(3) of the National Housing 
        Act, and the Secretary may increase such limitation in high 
        cost areas in the manner described in such section.
            ``(9) Other requirements.--The Secretary may prescribe 
        other terms and conditions necessary for the purpose of 
        carrying out this subsection and that are consistent with the 
        purposes of this subsection.
    ``(l) Single Room Occupancy Facilities.--
            ``(1) Authority.--In making assistance available under this 
        section and assistance under section 441 and part V of subtitle 
        F of title IV of the Stewart B. McKinney Homeless Assistance 
        Act, the Secretary may provide assistance with respect to 
        residential properties in which some or all of the dwelling 
        units do not contain bathroom or kitchen facilities, if--
                    ``(A) the property is located in an area in which 
                there is a significant demand for such units, as 
                determined by the Secretary;
                    ``(B) the unit of general local government in which 
                the property is located and the local public housing 
                agency approve of such units being utilized for such 
                purpose; and
                    ``(C) the unit of general local government in which 
                the property is located and the local public housing 
                agency certify to the Secretary that the property 
                complies with local health and safety standards.
            ``(2) Waiver of limitations on assistance for single 
        persons.--The Secretary may waive, in appropriate cases, the 
        limitation and preference in section 3(b)(3)(A) with respect to 
        the assistance made available under this subsection.
    ``(m) Housing for Elderly and Disabled Families.--
            ``(1) Shared housing.--To assist elderly families and 
        disabled families (as defined in section 3(b)) who elect to 
        live in a shared housing arrangement in which they benefit as a 
        result of sharing the facilities of a dwelling with others in a 
        manner that effectively and efficiently meets their housing 
        needs and thereby reduces their costs of housing, the Secretary 
        shall permit assistance provided under this section to be used 
        by such families in such arrangements. In carrying out this 
        subsection, the Secretary shall issue minimum habitability 
        standards for the purpose of ensuring decent, safe, and 
        sanitary housing for such families while taking into account 
        the special circumstances of shared housing.
            ``(2) Priority for nonelderly disabled families.--In 
        allocating assistance under this section, a public housing 
        agency that serves more than one unit of general local 
        government may, at the discretion of the agency, give priority 
        to disabled families that are not elderly families.
            ``(3) Authority to provide preferences for the elderly and 
        reserve units for the disabled.--Notwithstanding subsection 
        (h)(2) or (3), an owner of a covered section 8 housing project 
        (as such term is defined in section 659 of the Housing and 
        Community Development Act of 1992) may give preference for 
        occupancy of dwelling units in the project, and reserve units 
        for occupancy, in accordance with subtitle D of title VI of the 
        Housing and Community Development Act of 1992.
    ``(n) Administrative Fees.--
            ``(1) Basic fee for tenant-based rental program.--The 
        Secretary shall establish a fee for the costs incurred by a 
        public housing agency in administering the program for rental 
        assistance under this section, which shall be, together with 
        other fees authorized under this subsection, included in any 
        amounts provided to the public housing agency under the annual 
        contributions contract for the agency. The amount of the fee 
        for each month for which a dwelling unit is covered by an 
        assistance contract shall be 8.2 percent of the fair market 
        rental established under subsection (e) for a 2-bedroom 
        existing rental dwelling unit in the market area of the public 
        housing agency. The Secretary may increase the fee if necessary 
        to reflect the higher costs of administering small programs and 
        programs operating over large geographic areas.
            ``(2) Other fees.--The Secretary shall also establish 
        reasonable fees (as determined by the Secretary) for--
                    ``(A) the costs of preliminary expenses that a 
                public housing agency documents it has incurred in 
                connection with new allocations of assistance under the 
                program for rental assistance under this section, which 
                shall not exceed $275 per unit assisted;
                    ``(B) the costs incurred in assisting families who 
                experience difficulty (as determined by the Secretary) 
                in obtaining appropriate housing under the program;
                    ``(C) the costs incurred in administering the 
                provision of rental assistance under this section 
                through the self-sufficiency program under section 23; 
                and
                    ``(D) extraordinary costs approved by the 
                Secretary.
            ``(3) Authority to include costs of service coordinators in 
        fees.--
                    ``(A) In general.--Fees under this subsection may 
                be used for the costs of employing or otherwise 
                retaining the services of one or more service 
                coordinators under section 671 of the Housing and 
                Community Development Act of 1992 to coordinate the 
                provision of supportive services for elderly families 
                and disabled families on whose behalf tenant-based 
                assistance is provided under this section or section 
                811(b)(1). Such service coordinators shall have the 
                same responsibilities with respect to such families as 
                service coordinators of covered federally assisted 
                housing projects have under section 671 of such Act 
                with respect to residents of such projects.
                    ``(B) Requirement.--To the extent amounts are 
                provided in appropriation Acts under section 5(c) for 
                use under this paragraph, the Secretary shall increase 
                fees under this subsection to provide for the costs of 
                such service coordinators for public housing agencies.
            ``(4) Budget compliance.--The Secretary may establish or 
        increase a fee in accordance with this subsection only to such 
        extent or in such amounts as are provided in appropriation 
        Acts.
            ``(5) Fees for 1995 and 1996.--Notwithstanding any other 
        provision of this subsection, the fee for the costs incurred by 
        a public housing agency in administering the program for rental 
        assistance under this section during fiscal years 1995 and 1996 
        shall be equal to the fee determined for fiscal year 1994 under 
        section 11(a) of the HUD Demonstration Act of 1993.
    ``(o) Portability of Assistance.--
            ``(1) Authority.--Except as provided in paragraph (3), any 
        family on behalf of whom is provided tenant-based rental 
        assistance under this section and who moves to an eligible 
        dwelling unit located within the same State, or the same or a 
        contiguous metropolitan statistical area, as the metropolitan 
        statistical area within which is located the area of 
        jurisdiction of the public housing agency approving the 
        assistance for the family, may use such assistance to rent such 
        eligible dwelling unit.
            ``(2) Administration.--The public housing agency having 
        authority with respect to the dwelling unit to which a family 
        moves under this subsection shall have the responsibility of 
        carrying out the provisions of this section with respect to the 
        family. If no public housing agency has authority with respect 
        to the dwelling unit to which a family moves under this 
        subsection, the public housing agency approving the assistance 
        shall have such responsibility.
            ``(3) Local option to ensure minimum area residency.--
                    ``(A) Authority.--At the discretion of a public 
                housing agency and to the extent provided in 
                subparagraph (B), the agency may provide that a family 
                may use tenant-based rental assistance under this 
                section to rent an eligible dwelling unit that is not 
                located within the area of jurisdiction of the agency 
                approving the assistance only if, before such use, the 
                family has rented and occupied an eligible dwelling 
                unit within such jurisdiction for not less than 12 
                consecutive months using assistance provided by such 
                agency.
                    ``(B) Limitation.--If a public housing agency 
                elects to restrict the use of tenant-based rental 
                assistance pursuant to subparagraph (A) and provides 
                such assistance on behalf of more than 300 families, 
                the agency may not restrict the use of such assistance 
                with respect to assistance provided on behalf of 10 
                percent of the number of families receiving such 
                assistance that exceeds 300.
            ``(4) Provision of rental assistance for portability 
        purposes.--
                    ``(A) Amount.--To the extent budget authority for 
                use under this paragraph is made available in 
                appropriation Acts, the Secretary shall provide rental 
                assistance under this section in accordance with this 
                paragraph.
                    ``(B) Use.--Amounts provided for use under this 
                paragraph shall be used only to provide a public 
                housing agency with additional amounts (as determined 
                under subparagraph (D)) to provide assistance for 
                families on behalf of whom assistance is provided under 
                this section by another public housing agency and who 
                move into an eligible dwelling unit located within the 
                area of jurisdiction of the agency to receive 
                assistance under this paragraph.
                    ``(C) Requirement.--Amounts provided for use under 
                this paragraph may be made available to a public 
                housing agency only if the agency has provided 
                assistance pursuant to the first sentence of paragraph 
                (2) on behalf of families who have moved into eligible 
                dwelling units located within the area of jurisdiction 
                of the agency in an amount not less than the lesser of 
                (i) 5 percent of the total amount received by the 
                agency for assistance under this section for the fiscal 
                year, or (ii) the amount necessary to assist 25 percent 
                of average annual number of families previously 
                assisted by the agency who relinquish such assistance 
                in a year (based on the preceding 3 calendar years).
    ``(p) Prohibition of Discrimination.--
            ``(1) Based on residency in public housing.--In selecting 
        families for the provision of assistance under this section, a 
        public housing agency may not exclude or penalize a family 
        solely because the family resides in a public housing project.
            ``(2) Based on receipt of assistance.--An owner who has 
        entered into an assistance contract under this section on 
        behalf of any tenant in a multifamily housing project shall not 
        refuse to lease any available dwelling unit in any multifamily 
        housing project of such owner that rents for an amount not 
        greater than the fair market rental for a comparable unit (as 
        determined by the Secretary under subsection (e)) to a family 
        who has been approved by a public housing agency for rental 
        assistance under this section and is in possession of evidence 
        of such approval, a proximate cause of which is the status of 
        such prospective tenant as such an assisted family, and to 
        enter into an assistance contract respecting such unit.
            ``(3) Definition.--For purposes of this subsection, the 
        term `multifamily housing project' means a residential building 
        containing more than 4 dwelling units.
    ``(q) Special Uses of Rental Assistance.--
            ``(1) Assistance for residents of rehabilitated projects.--
        In the case of low-income families living in rental projects 
        rehabilitated under section 17 of this Act or section 533 of 
        the Housing Act of 1949 before rehabilitation--
                    ``(A) tenant-based rental assistance under this 
                section shall be provided for families who are required 
                to move out of their dwelling units because of the 
                physical rehabilitation activities or because of 
                overcrowding;
                    ``(B) at the discretion of each public housing 
                agency, tenant-based rental assistance under this 
                section may be provided for families who would have to 
                pay more than 30 percent of their adjusted income for 
                rent after rehabilitation whether they choose to remain 
                in, or to move from, the project; and
                    ``(C) the Secretary shall allocate tenant-based 
                rental assistance provided under this section to ensure 
                that sufficient resources are available to address the 
                physical or economic displacement, or potential 
                economic displacement, of existing tenants pursuant to 
                subparagraphs (A) and (B).
            ``(2) Loan management assistance.--
                    ``(A) In general.--The Secretary may provide 
                assistance under this section through a loan management 
                program to assist financially troubled multifamily 
                residential housing projects (i) subject to mortgages 
                that are insured under the National Housing Act or 
                mortgages that have been assigned to the Secretary, 
                (ii) that were held by the Secretary and have been 
                sold, and (iii) that were assisted under section 202 of 
                the Housing Act of 1959.
                    ``(B) Eligibility.--The eligibility of a 
                multifamily residential project for loan management 
                assistance under this paragraph shall be determined 
                without regard to whether the project is subsidized or 
                unsubsidized.
                    ``(C) Extension of contract.--The Secretary shall 
                extend any expiring contract entered into under this 
                section for loan management assistance or execute a new 
                contract for project-based loan management assistance, 
                if the owner agrees to continue providing housing for 
                low-income families during the term of the contract.
            ``(3) Assistance for family unification.--
                    ``(A) In general.--The Secretary may provide 
                assistance under this section to be used only in 
                connection with tenant-based assistance under this 
                section on behalf of any family (i) who is otherwise 
                eligible for such assistance, and (ii) who the public 
                child welfare agency for the jurisdiction has certified 
                is a family for whom the lack of adequate housing is a 
                primary factor in the imminent placement of the 
                family's child or children in out-of-home care or the 
                delayed discharge of a child or children to the family 
                from out-of-home care.
                    ``(B) Allocation.--Any amounts made available under 
                this paragraph shall be allocated by the Secretary 
                through a national competition among applicants based 
                on demonstrated need for assistance under this 
                paragraph. To be considered for assistance, an 
                applicant shall submit to the Secretary a written 
                proposal containing a report from the public child 
                welfare agency serving the jurisdiction of the 
                applicant that describes how a lack of adequate housing 
                in the jurisdiction is resulting in the initial or 
                prolonged separation of children from their families, 
                and how the applicant will coordinate with the public 
                child welfare agency to identify eligible families and 
                provide the families with assistance under this 
                paragraph.
                    ``(C) Definitions.--For purposes of this paragraph:
                            ``(i) Applicant.--The term `applicant' 
                        means a public housing agency.
                            ``(ii) Public child welfare agency.--The 
                        term `public child welfare agency' means the 
                        public agency responsible under applicable 
                        State law for determining that a child is at 
                        imminent risk of placement in out-of-home care 
                        or that a child in out-of-home care under the 
                        supervision of the public agency may be 
                        returned to his or her family.
    ``(r) Renewal of Expiring Contracts.--Not later than 30 days after 
the beginning of each fiscal year, the Secretary shall publish in the 
Federal Register a plan for reducing, to the extent feasible, year-to-
year fluctuations in the levels of budget authority that will be 
required over the succeeding 5-year period to renew expiring assistance 
contracts entered into under this section after the enactment of the 
Housing and Community Development Act of 1974. To the extent necessary 
to carry out such plan and to the extent approved in appropriations 
Acts, the Secretary is authorized to enter into annual contributions 
contracts with terms of less than 60 months.
    ``(s) General Provisions.--
            ``(1) Prohibition of high-rise projects for families with 
        children.--Notwithstanding any other provision of this section, 
        after the date of enactment of the Housing and Community 
        Development Act of 1977, the Secretary shall prohibit high-rise 
        elevator projects for families with children unless the 
        Secretary determines that there is no practical alternative.
            ``(2) Pledging assistance contracts as security.--An owner 
        may pledge, or offer as security for any loan or obligation, an 
        assistance contract entered into pursuant to this section, but 
        only if such security is in connection with a project 
        constructed or rehabilitated pursuant to authority under this 
        section and the terms of the financing or any refinancing have 
        been approved by the Secretary.
            ``(3) Assistance in finding units.--Each public housing 
        agency that provides rental housing assistance under this 
        section on behalf of low-income families shall make available, 
        to such families, counseling and assistance regarding housing 
        opportunities in the area of jurisdiction of the agency, 
        including assistance in obtaining new rental residences.
    ``(t) Homeownership Option.--
            ``(1) Use of assistance for homeownership.--A family 
        receiving tenant-based assistance under this section may 
        receive assistance for occupancy of a dwelling owned by one or 
        more members of the family if the family--
                    ``(A) is a first-time homeowner;
                    ``(B)(i) participates in the family self-
                sufficiency program under section 23 of the public 
                housing agency providing the assistance; or
                    ``(ii) demonstrates that the family has income from 
                employment or other sources (other than public 
                assistance), as determined in accordance with 
                requirements of the Secretary, that is not less than 
                twice the payment standard established by the public 
                housing agency (or such other amount as may be 
                established by the Secretary);
                    ``(C) except as provided by the Secretary, 
                demonstrates at the time the family initially receives 
                tenant-based assistance under this subsection that one 
                or more adult members of the family have achieved 
                employment for the period as the Secretary shall 
                require;
                    ``(D) participates in a homeownership and housing 
                counseling program provided by the agency; and
                    ``(E) meets any other initial or continuing 
                requirements established by the public housing agency 
                in accordance with requirements established by the 
                Secretary.
            ``(2) Monthly assistance payment.--
                    ``(A) In general.--Notwithstanding any other 
                provisions of this section governing determination of 
                the amount of assistance payments under this section on 
                behalf of a family, the monthly assistance payment for 
                any family assisted under this subsection shall be the 
                amount by which the fair market rental for the area 
                established under subsection (e)(1) exceeds 30 percent 
                of the family's monthly adjusted income; except that 
                the monthly assistance payment shall not exceed the 
                amount by which the monthly homeownership expenses, as 
                determined in accordance with requirements established 
                by the Secretary, exceeds 10 percent of the family's 
                monthly income.
                    ``(B) Exclusion of equity from income.--For 
                purposes of determining the monthly assistance payment 
                for a family, the Secretary shall not include in family 
                income an amount imputed from the equity of the family 
                in a dwelling occupied by the family with assistance 
                under this subsection.
            ``(3) Recapture of certain amounts.--Upon sale of the 
        dwelling by the family, the Secretary shall recapture from any 
        net proceeds the amount of additional assistance (as determined 
        in accordance with requirements established by the Secretary) 
        paid to or on behalf of the eligible family as a result of 
        paragraph (2)(B).
            ``(4) Downpayment requirement.--Each public housing agency 
        providing assistance under this subsection shall ensure that 
        each family assisted shall provide from its own resources not 
        less than 80 percent of any downpayment in connection with a 
        loan made for the purchase of a dwelling. Such resources may 
        include amounts from any escrow account for the family 
        established under section 23(d). Not more than 20 percent of 
        the downpayment may be provided from other sources, such as 
        from nonprofit entities and programs of States and units of 
        general local government.
            ``(5) Ineligibility under other programs.--A family may not 
        receive assistance under this subsection during any period when 
        assistance is being provided for the family under other Federal 
        homeownership assistance programs, as determined by the 
        Secretary, which shall include assistance under the HOME 
        Investment Partnerships Act, the Homeownership and Opportunity 
        Through HOPE Act, title II of the Housing and Community 
        Development Act of 1987, and section 502 of the Housing Act of 
        1949.
            ``(6) Inapplicability of certain provisions.--Assistance 
        under this subsection shall not be subject to the requirements 
        of the following provisions:
                    ``(A) Subsection (h)(3) of this section.
                    ``(B) Any other provisions of this section 
                governing maximum amounts payable to owners and amounts 
                payable by assisted families.
                    ``(C) Any other provisions of this section 
                concerning contracts between public housing agencies 
                and owners.
                    ``(D) Any other provisions of this Act that are 
                inconsistent with the provisions of this subsection.
            ``(7) Reversion to rental status.--
                    ``(A) FHA-insured mortgages.--If a family receiving 
                assistance under this subsection for occupancy of a 
                dwelling defaults under a mortgage for the dwelling 
                insured by the Secretary under the National Housing 
                Act, the family may not continue to receive rental 
                assistance under this section unless the family (i) 
                transfers to the Secretary marketable title to the 
                dwelling, (ii) moves from the dwelling within the 
                period established or approved by the Secretary, and 
                (iii) agrees that any amounts the family is required to 
                pay to reimburse the escrow account under section 
                23(d)(3) may be deducted by the public housing agency 
                from the assistance payment otherwise payable on behalf 
                of the family.
                    ``(B) Other mortgages.--If a family receiving 
                assistance under this subsection defaults under a 
                mortgage not insured under the National Housing Act, 
                the family may not continue to receive rental 
                assistance under this section unless it complies with 
                requirements established by the Secretary.
                    ``(C) All mortgages.--A family receiving assistance 
                under this subsection that defaults under a mortgage 
                may not receive assistance under this subsection for 
                occupancy of another dwelling owned by one or more 
                members of the family.
            ``(8) Definition of first-time homeowner.--For purposes of 
        this subsection, the term `first-time homeowner' means--
                    ``(A) a family, no member of which has had a 
                present ownership interest in a principal residence 
                during the 3 years preceding the date on which the 
                family initially receives assistance for homeownership 
                under this subsection; and
                    ``(B) any other family, as the Secretary may 
                prescribe.
    ``(u) Definitions.--For purposes of this section:
            ``(1) Annual contributions contract.--The term `annual 
        contributions contract' means a contract under subsection (b) 
        between the Secretary and a public housing agency to provide 
        amounts for rental assistance payments under this section to 
        the public housing agency.
            ``(2) Assistance contract.--The term `assistance contract' 
        means a contract under subsection (c) between a public housing 
        agency (or the Secretary) and an owner to make rental 
        assistance payments under this section to the owner.
            ``(3) Debt service.--The term `debt service' means the 
        required payments for principal and interest made with respect 
        to a mortgage secured by housing assisted under this Act.
            ``(4) Drug-related criminal activity.--The term `drug-
        related criminal activity' means the illegal manufacture, sale, 
        distribution, use, or possession with intent to manufacture, 
        sell, distribute, or use, of a controlled substance (as such 
        term is defined in section 102 of the Controlled Substances 
        Act).
            ``(5) Owner.--The term `owner' means any private person or 
        entity, including a cooperative, an agency of the Federal 
        Government, or a public housing agency, having the legal right 
        to lease or sublease dwelling units, and such term shall 
        include any principals, general partners, primary shareholders, 
        and other similar participants in any entity owning a 
        multifamily housing project (as such term is defined in 
        subsection (p)(3)), as well as the entity itself.
            ``(6) Participating jurisdiction.--The term `participating 
        jurisdiction' means a State or unit of general local government 
        designated by the Secretary to be a participating jurisdiction 
        under title II of the Cranston-Gonzalez National Affordable 
        Housing Act.
            ``(7) Project-based assistance.--The term `project-based 
        assistance' means rental assistance under this section that is 
        attached to a structure pursuant to subsection (i).
            ``(8) Rent.--The terms `rent' and `rental' include, with 
        respect to members of a cooperative, the charges under the 
        occupancy agreements between such members and the cooperative.
            ``(9) Rental assistance.--The term `rental assistance' 
        means assistance provided under this section on behalf of low-
        income families for the rental of a dwelling unit.
            ``(10) Tenant-based assistance.--The term `tenant-based 
        assistance' means rental assistance under this section that is 
        not project-based assistance.''.
    (b) Transition.--
            (1) Applicability.--The amendment made by subsection (a) 
        shall apply only to assistance under section 8 of the United 
        States Housing Act of 1937 provided pursuant to an assistance 
        contract entered into or renewed during fiscal year 1995 or 
        thereafter. Any such assistance provided pursuant to an 
        assistance contract entered into before the commencement of 
        fiscal year 1995 shall be subject to the provisions of such 
        section 8 as in effect immediately before the enactment of this 
        Act or otherwise applicable to such assistance.
            (2) Continuation of assistance.--The Secretary of Housing 
        and Urban Development shall take any action necessary to ensure 
        that the provision of assistance under section 8 of the United 
        States Housing Act of 1937 to families receiving assistance 
        under such section on the date of the enactment of this Act is 
        not interrupted because of the amendment made by subsection 
        (a).
    (c) Conforming Amendments.--
            (1) United states housing act of 1937.--The United States 
        Housing Act of 1937 is amended--
                    (A) in section 3(a)(1) (42 U.S.C. 1437a(a)(1)), by 
                striking ``(other than a family assisted under section 
                8(o) or (y) or paying rent under section 8(c)(3)(B))'' 
                and inserting ``(other than a family assisted under 
                section 8(t))'';
                    (B) in section 5 (42 U.S.C. 1737c)--
                            (i) in subsection (c)(7)(C), by striking 
                        ``section 8(b)(1)'' each place it appears and 
                        inserting ``section 8'';
                            (ii) in subsection (j)(1)(B)(i), by 
                        striking ``section 8(o)(6)'' and inserting 
                        ``section 8''; and
                            (iii) in subsection (j)(1)(D), by striking 
                        ``subsection (b) or (o) of'';
                    (C) in section 6(p)(1)(B) (42 U.S.C. 
                1437d(p)(1)(B)), by striking ``holding certificates and 
                vouchers'' and inserting ``eligible and approved for 
                assistance'';
                    (D) in section 18(b)(3) (42 U.S.C. 1437p(b)(3))--
                            (i) in subparagraph (A)(iv), by striking 
                        ``section 8(b)(1)'' and inserting ``section 
                        8'';
                            (ii) in subparagraph (A)(v), by striking 
                        ``(excluding vouchers under section 8(o))'' 
                        each place it appears;
                            (iii) in subparagraph (B)--
                                    (I) in the matter preceding clause 
                                (i), by striking ``(notwithstanding the 
                                limitation under section 8(d)(2)(A) on 
                                the amount of project-based assistance 
                                provided by an agency)''; and
                                    (II) in clause (ii), by striking 
                                ``(excluding vouchers under section 
                                8(o))''; and
                            (iv) in subparagraph (C), by striking 
                        ``certificates and vouchers available'' and 
                        inserting ``families receiving tenant-based 
                        assistance'';
                    (E) in section 21(b)(3)--
                            (i) by striking ``a certificate under 
                        section 8(b)(1) or a housing voucher under 
                        section 8(o)'' and inserting ``tenant-based 
                        assistance under section 8''; and
                            (ii) by striking ``such certificate'' and 
                        inserting ``such assistance'';
                    (F) in section 23--
                            (i) in subsection (a), by striking 
                        ``assistance under the certificate and voucher 
                        programs'' and inserting ``tenant-based 
                        assistance'';
                            (ii) in subsection (b)--
                                    (I) in paragraph (1), by striking 
                                ``assistance under subsection (b) or 
                                (o) of'' and inserting ``tenant-based 
                                assistance under'';
                                    (II) in paragraph (3)(A), by 
                                striking ``Certificate and voucher 
                                assistance under section 8(b) and (o)'' 
                                and inserting ``Tenant-based assistance 
                                under section 8''; and
                                    (III) in paragraph (4), by striking 
                                ``Assistance under the certificate or 
                                voucher programs'' and inserting 
                                ``Tenant-based assistance'';
                            (iii) in subsection (c)(1), by striking 
                        ``assistance under the certificate and voucher 
                        programs of'' and inserting ``tenant-based 
                        assistance from'';
                            (iv) in subsection (d)(3) (as added by 
                        section 185(b) of the Housing and Community 
                        Development Act of 1992 (Public Law 102-550; 
                        106 Stat. 3747)), by striking ``section 8(y)'' 
                        and inserting ``section 8(t)''; and
                            (v) in subsection (h)(1)--
                                    (I) by striking ``section 8(q) for 
                                the costs incurred in administering the 
                                provision of certificate and voucher'' 
                                and inserting ``section 8(n) for the 
                                costs incurred in administering the 
                                provision of tenant-based''; and
                                    (II) by striking ``section 
                                8(q)(2)(A)(i)'' and inserting ``section 
                                8(n)(2)(A)''; and
                    (G) in section 304(g)(3) (42 U.S.C. 1437aaa-
                3(g)(3)), by striking ``section 8(b)(2) and section 
                8(o)(9)'' and inserting ``section 8''.
            (2) Elderly independence.--Section 803 of the Cranston-
        Gonzalez National Affordable Housing Act (42 U.S.C. 8012) is 
        amended--
                    (A) in subsection (a), by striking ``housing 
                certificates and vouchers'' and inserting ``assistance 
                under section 8 of the United States Housing Act of 
                1937''; and
                    (B) in subsection (b)--
                            (i) in the 1st sentence, by striking ``not 
                        more than 1500 incremental vouchers and 
                        certificates under sections 8(b) and 8(o) of 
                        the United States Housing Act of 1937'' and 
                        inserting ``incremental assistance under 
                        section 8 of the United States Housing Act of 
                        1937 on behalf of not more than 1,500 frail 
                        elderly persons'';
                            (ii) in the 3rd sentence, by striking ``the 
                        housing certificate or voucher program of the 
                        agency'' and inserting ``the agency's program 
                        for assistance under such section 8''; and
                            (iii) in the last sentence, by striking 
                        ``sections 8(b) and 8(o)'' and inserting 
                        ``section 8''.
            (3) McKinney act.--Section 441(b) of the Stewart B. 
        McKinney Homeless Assistance Act (42 U.S.C. 11401(b)) is 
        amended--
                    (A) by striking ``section 8(n)'' and inserting 
                ``section 8(l)''; and
                    (B) by adding at the end the following new 
                sentence: ``Moderate rehabilitation under this section 
                shall be carried out in the manner provided under the 
                provisions of section 8(e) of the United States Housing 
                Act of 1937, as such section was in effect immediately 
                before the enactment of the Housing and Community 
                Development Act of 1994.''.
            (4) National housing act.--Section 203(v) of the National 
        Housing Act (12 U.S.C. 1709(v)), as added by section 
        185(c)(1)(B) of the Housing and Community Development Act of 
        1992, is amended by striking ``section 8(y)'' and inserting 
        ``section 8(t)''.

SEC. 5. PUBLIC HOUSING RENT AND INCOME ELIGIBILITY REFORM.

    (a) Exclusion From Adjusted Income for Rent Calculation.--Section 
3(b)(5) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(b)(5)) is amended--
            (1) in subparagraph (F), by striking ``and'' at the end;
            (2) by redesignating subparagraph (G) as subparagraph (H); 
        and
            (3) by inserting after subparagraph (F) the following new 
        subparagraphs:
            ``(G) the amount of any increase in the earned income of 
        the family that results from the employment of a previously 
        unemployed member of the family, except that such increase in 
        earned income may be excluded only during the 18-month period 
        beginning upon the employment of the family member; and''.
    (b) Income Eligibility.--Section 3(b)(4) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(b)(2)) is amended by inserting at 
the end the following new sentence: ``For purposes of eligibility of a 
family for residence in public housing, income of the family shall not 
include (A) only in the case of a family that has more than 2 members 
contributing to the earned income of the family and has an income (as 
determined under the preceding sentence) not exceeding 65 percent of 
the median income for the area, 50 percent of the amount of any earned 
income of the family contributed by members of the family who are not 
the 2 members of the family contributing the greatest amounts to the 
family's earned income, and (B) the amount of any increase in the 
earned income of the family that results from the employment of a 
previously unemployed member of the family, except that such increase 
in earned income may be excluded only during the 18-month period 
beginning upon the employment of the family member .''.
    (c) Budget Compliance.--To the extent that the amendments made by 
subsections (a) and (b) result in additional costs under the United 
States Housing Act of 1937, the provisions inserted by such amendments 
shall be effective only to the extent that amounts to cover such 
additional costs are provided in advance in appropriations Acts.

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