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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1691 Referred in Senate (RFS)]

  1st Session
                                H. R. 1691

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            October 31, 1995

Received; read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 AN ACT

 
To provide for innovative approaches for homeownership opportunity and 
    provide for the temporary extension of the rural rental housing 
                    program, and for other purposes.

    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 ``Homesteading and Neighborhood 
Restoration Act of 1995''.

SEC. 2. ASSISTANCE FOR HABITAT FOR HUMANITY AND OTHER SELF-HELP HOUSING 
              PROVIDERS.

    (a) Grant Authority.--The Secretary of Housing and Urban 
Development shall, to the extent amounts are available to carry out 
this section and the requirements of this section are met, make grants 
for use in accordance with this section to--
            (1) Habitat for Humanity International, whose 
        organizational headquarters are located in Americus, Georgia; 
        and
            (2) other national or regional organizations or consortia 
        that have experience in providing or facilitating self-help 
        housing homeownership opportunities.
    (b) Goals and Accountability.--In making grants under this section, 
the Secretary shall take such actions as may be necessary to ensure 
that--
            (1) assistance provided under this section is used to 
        facilitate and encourage innovative homeownership opportunities 
        through the provision of self-help housing, under which the 
        homeowner contributes a significant amount of sweat equity 
        toward the construction of the new dwelling;
            (2) assistance provided under this section for land 
        acquisition and infrastructure development results in the 
        development of not less than 5,000 new dwellings;
            (3) the dwellings constructed in connection with assistance 
        provided under this section are quality dwellings that comply 
        with local building and safety codes and standards and are 
        available at prices below the prevailing market prices;
            (4) the provision of assistance under this section 
        establishes and fosters a partnership between the Federal 
        Government and Habitat for Humanity International, its 
        affiliates, and other organizations and consortia, resulting in 
        efficient development of affordable housing with minimal 
        Governmental intervention, limited Governmental regulation, and 
        significant involvement by private entities;
            (5) activities to develop housing assisted pursuant to this 
        section involve community participation similar to the 
        homeownership program carried out by Habitat for Humanity 
        International, in which volunteers assist in the construction 
        of dwellings; and
            (6) dwellings are developed in connection with assistance 
        under this section on a geographically diverse basis, which 
        includes areas having high housing costs, rural areas, and 
        areas underserved by other homeownership opportunities that are 
        populated by low-income families unable to otherwise afford 
        housing.
If, at any time, the Secretary determines that the goals under this 
subsection cannot be met by providing assistance in accordance with the 
terms of this section, the Secretary shall immediately notify the 
applicable Committees in writing of such determination and any proposed 
changes for such goals or this section.
    (c) Allocation.--Of any amounts available for grants under this 
section--
            (1) 50 percent shall be used for a grant to the 
        organization specified in subsection (a)(1); and
            (2) 50 percent shall be used for grants to organizations 
        and consortia under subsection (a)(2).
    (d) Use.--
            (1) Purpose.--Amounts from grants made under this section 
        shall be used only for eligible expenses in connection with 
        developing new decent, safe, and sanitary nonluxury dwellings 
        in the United States for families and persons who otherwise 
        would be unable to afford to purchase a dwelling.
            (2) Eligible expenses.--For purposes of paragraph (1), the 
        term ``eligible expenses'' means costs only for the following 
        activities:
                    (A) Land acquisition.--Acquiring land (including 
                financing and closing costs).
                    (B) Infrastructure improvement.--Installing, 
                extending, constructing, rehabilitating, or otherwise 
                improving utilities and other infrastructure.
        Such term does not include any costs for the rehabilitation, 
        improvement, or construction of dwellings.
    (e) Establishment of Grant Fund.--
            (1) In general.--Any amounts from any grant made under this 
        section shall be deposited by the grantee organization or 
        consortium in a fund that is established by such organization 
        or consortium for such amounts, administered by such 
        organization or consortium, and available for use only for the 
        purposes under subsection (d). Any interest, fees, or other 
        earnings of the fund shall be deposited in the fund and shall 
        be considered grant amounts for purposes of this section.
            (2) Assistance to habitat for humanity affiliates.--Habitat 
        for Humanity International may use amounts in the fund 
        established for such organization pursuant to paragraph (1) for 
        the purposes under subsection (d) by providing assistance from 
        the fund to local affiliates of such organization.
    (f) Requirements for Assistance to Other Organizations.--The 
Secretary may make a grant to an organization or consortium under 
subsection (a)(2) only pursuant to--
            (1) an expression of interest by such organization or 
        consortia to the Secretary for a grant for such purposes;
            (2) a determination by the Secretary that the organization 
        or consortia has the capability and has obtained financial 
        commitments (or has the capacity to obtain financial 
        commitments) necessary to--
                    (A) develop not less than 30 dwellings in 
                connection with the grant amounts; and
                    (B) otherwise comply with a grant agreement under 
                subsection (i); and
            (3) a grant agreement entered into under subsection (i).
    (g) Treatment of Unused Amounts.--Upon the expiration of the 6-
month period beginning upon the Secretary first providing notice of the 
availability of amounts for grants under subsection (a)(2), the 
Secretary shall determine whether the amount remaining from the 
aggregate amount reserved under subsection (c)(2) exceeds the amount 
needed to provide funding in connection with any expressions of 
interest under subsection (f)(1) made by such date that are likely to 
result in grant agreements under subsection (i). If the Secretary 
determines that such excess amounts remain, the Secretary shall provide 
the excess amounts to Habitat for Humanity International by making a 
grant to such organization in accordance with this section.
    (h) Geographical Diversity.--In using grant amounts provided under 
subsection (a)(1), Habitat for Humanity International shall ensure that 
the amounts are used in a manner that results in national geographic 
diversity among housing developed using such amounts. In making grants 
under subsection (a)(2), the Secretary shall ensure that grants are 
provided and grant amounts are used in a manner that results in 
national geographic diversity among housing developed using grant 
amounts under this section.
    (i) Grant Agreement.--A grant under this section shall be made only 
pursuant to a grant agreement entered into by the Secretary and the 
organization or consortia receiving the grant, which shall--
            (1) require such organization or consortia to use grant 
        amounts only as provided in this section;
            (2) provide for the organization or consortia to develop a 
        specific and reasonable number of dwellings using the grant 
        amounts, which number shall be established taking into 
        consideration costs and economic conditions in the areas in 
        which the dwellings will be developed, but in no case shall be 
        less than 30;
            (3) require the organization or consortia to use the grant 
        amounts in a manner that leverages other sources of funding 
        (other than grants under this section), including private or 
        public funds, in developing the dwellings;
            (4) require the organization or consortia to comply with 
        the other provisions of this section;
            (5) provide that if the organization or consortia has not 
        used any grant amounts within 24 months after such amounts are 
        first disbursed to the organization or consortia, the Secretary 
        shall recapture such unused amounts; and
            (6) contain such other terms as the Secretary may require 
        to provide for compliance with subsection (b) and the 
        requirements of this section.
    (j) Grant Payments.--
            (1) 1-step disbursement.--With respect to any grant under 
        subsection (a)(2) in an amount less than $8,000,000, the 
        Secretary shall make the total amount of the grant available to 
        the grantee organization or consortia upon entering into the 
        grant agreement under subsection (i) and providing notice under 
        paragraph (3).
            (2) 2-step disbursement.--With respect to the grant under 
        subsection (a)(1) and any grant under subsection (a)(2) in an 
        amount equal to or exceeding $8,000,000, the Secretary shall 
        disburse the grant amounts in 2 equal payments, as follows:
                    (A) Initial payment.--The first payment shall be 
                made available to the grantee organization or consortia 
                upon entering into the grant agreement under subsection 
                (i) and providing notice under paragraph (3).
                    (B) Final payment.--The second payment shall be 
                made available to the organization or consortia subject 
                to the following requirements:
                            (i) Notice.--The amounts may not be made 
                        available until 30 days after the Secretary 
                        certifies to the applicable Committees that the 
                        grant amounts provided under subparagraph (A) 
                        to the organization or consortia have been used 
                        in accordance with this section to develop the 
                        new dwellings required under the grant 
                        agreement.
                            (ii) Fulfillment of grant agreement.--If 
                        the Secretary determines that the organization 
                        or consortia has not, within 24 months after 
                        amounts are first made available under 
                        subparagraph (A) to the organization or 
                        consortia, substantially fulfilled the 
                        obligations under the grant agreement, 
                        including development of the appropriate number 
                        of dwellings under the agreement, the Secretary 
                        shall use any such undisbursed amounts 
                        remaining from such grant for other grants in 
                        accordance with this section.
            (3) Notification to congress.--Notification under this 
        paragraph is written notification to the applicable Committees 
        of a grant, the amount of the grant, and the terms of the grant 
        agreement.
            (4) Failure to report.--If at any time the Secretary fails 
        to report to the applicable Committees as required in this 
        subsection, the Secretary may not subsequently make any grant 
        under this section and may not subsequently disburse any 
        amounts under any grant previously made.
    (k) Records and Audits.--During the period beginning upon the 
making of a grant under this section and ending upon close-out of the 
grant under subsection (l)--
            (1) the organization awarded the grant under subsection 
        (a)(1) or (a)(2) shall keep such records and adopt such 
        administrative practices as the Secretary may require to ensure 
        compliance with the provisions of this section and the grant 
        agreement; and
            (2) the Secretary and the Comptroller General of the United 
        States, and any of their duly authorized representatives, shall 
        have access for the purpose of audit and examination to any 
        books, documents, papers, and records of the grantee 
        organization or consortia and its affiliates that are pertinent 
        to the grant made under this section.
    (l) Close-Out.--
            (1) In general.--The Secretary shall close out a grant made 
        under this section upon determining that the aggregate amount 
        of any assistance provided from the fund established under 
        subsection (e)(1) by the grantee organization or consortium 
        exceeds the amount of the grant. For purposes of this 
        paragraph, any interest, fees, and other earnings of the fund 
        shall be excluded from the amount of the grant.
            (2) Effect.--After such close-out, no grantee organization 
        or consortia, or its affiliates, may be required to comply with 
        any provision of this section or the grant agreement or to 
        account to the Secretary for use of grant amounts.
    (m) Environmental Review.--A grant under this section shall be 
considered to be funds for a special project for purposes of section 
305(c) of the Multifamily Housing Property Disposition Reform Act of 
1994.
    (n) Report to Congress.--Not later than 90 days after close-out of 
all grants under this section is completed, the Secretary shall submit 
a report to the applicable Committees describing the grants made under 
this section, the grantees, the housing developed in connection with 
the grant amounts, and the purposes for which the grant amounts were 
used.
    (o) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Applicable committees.--The term ``applicable 
        Committees'' means the Committee on Banking and Financial 
        Services of the House of Representatives and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (3) United states.--The term ``United States'' includes 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.
    (p) Funding.--Of any amounts previously made available for annual 
contributions for assisted housing, $50,000,000 shall be used by the 
Secretary to carry out this section, subject to existing laws and rules 
governing reprogramming of amounts. Any such amounts shall remain 
available for such purposes until expended.
    (q) Regulations.--The Secretary shall issue any final regulations 
necessary to carry out this section not later than 30 days after the 
date of the enactment of this Act. The regulations shall take effect 
upon issuance and may not exceed, in length, 5 full pages in the 
Federal Register.

SEC. 3. EXTENSION OF MULTIFAMILY RURAL HOUSING LOAN PROGRAM.

    (a) Authority To Make Loans.--Section 515(b)(4) of the Housing Act 
of 1949 (42 U.S.C. 1485(b)(4)) is amended by striking ``September 30, 
1994'' and inserting ``September 30, 1996''.
    (b) Set-Aside for Nonprofit Entities.--The first sentence of 
section 515(w)(1) of the Housing Act of 1949 is amended by striking 
``fiscal years 1993 and 1994'' and inserting ``fiscal year 1996''.

SEC. 4. REFORMS FOR MULTIFAMILY RURAL HOUSING LOAN PROGRAM.

    (a) Limitation on Project Transfers.--Section 515 of the Housing 
Act of 1949 (42 U.S.C. 1485) is amended by inserting after subsection 
(g) the following new subsection:
    ``(h) Project Transfers.--After the date of the enactment of the 
Homesteading and Neighborhood Restoration Act of 1995, any interest in 
the ownership of a project for which a loan is made or insured under 
this section may be transferred only if the Secretary determines that 
such transfer would be in the best interests of the tenants of the 
housing for which the loan was made or insured and of the Federal 
Government.''.
    (b) Equity Loans.--Section 515(t) of the Housing Act of 1949 is 
amended--
            (1) by striking paragraphs (4) and (5); and
            (2) by redesignating paragraphs (6) through (8) as 
        paragraphs (4) through (6), respectively.
    (c) Repeal of Prohibitions.--Section 515 of the Housing Act of 1949 
is amended by striking subsection (z).
    (d) Location of Projects.--Section 532 of the Housing Act of 1949 
(42 U.S.C. 1490l) is amended--
            (1) in subsection (a), by inserting ``other than assistance 
        under section 515'' after ``in making assistance''; and
            (2) by adding at the end the following new subsection:
    ``(c) Allocation of Section 515 Loans.--
            ``(1) Procedure.--The Secretary shall make assistance under 
        section 515 available pursuant to an objective procedure 
        established by the Secretary, under which the Secretary shall 
        identify counties and communities having the greatest need for 
        such assistance and designate such counties and communities to 
        receive such assistance. Under such procedure, the Secretary 
        shall use objective measures to determine the need for rental 
        housing assistance, which may include the incidence of poverty, 
        substandard housing, lack of mortgage credit, lack or 
        insufficient amount of affordable housing, and other factors 
        demonstrating a need for affordable housing.
            ``(2) Information.--The Secretary shall use information 
        from the decennial censuses of the United States, relevant 
        comprehensive affordable housing strategies under section 105 
        of the Cranston-Gonzalez National Affordable Housing Act, and 
        other reliable sources obtained by the Secretary which 
        demonstrate the need for affordable rental housing in rural 
        areas.
            ``(3) Designation.--A designation under paragraph (1) shall 
        not be effective for a period of more than 3 years, but may be 
        renewed by the Secretary under the procedure under paragraph 
        (1). The Secretary shall cause to be published in the Federal 
        Register a list of areas designated under paragraph (1) and a 
        reasonable timetable for submission of preapplications. The 
        Secretary shall take such other reasonable actions as the 
        Secretary considers appropriate to notify the public of such 
        designations.''.
    (e) Equity Takeout Loans To Extend Low-Income Use.--
            (1) Authority and limitation.--Section 502(c)(4)(B)(iv) of 
        the Housing Act of 1949 (42 U.S.C. 1472(c)(4)(B)(iv)) is 
        amended by inserting before the period at the end the 
        following: ``or under paragraphs (1) and (2) of section 514(j), 
        except that an equity loan referred to in this clause may not 
        be made available after the date of the enactment of the 
        Homesteading and Neighborhood Restoration Act of 1995 unless 
        the Secretary determines that the other incentives available 
        under this subparagraph are not adequate to provide a fair 
        return on the investment of the borrower, to prevent prepayment 
        of the loan insured under section 514 or 515, or to prevent the 
        displacement of tenants of the housing for which the loan was 
        made''.
            (2) Approval of assistance.--Subparagraph (C) of section 
        502(c)(4) of the Housing Act of 1949 is amended by striking the 
        matter preceding clause (i) and inserting the following:
    ``(C) Approval of Assistance.--The Secretary may approve assistance 
under subparagraph (B) for assisted housing only if the restrictive 
period has expired for any loan for the housing made or insured under 
section 514 or 515 pursuant to a contract entered into after December 
21, 1979, but before the date of the enactment of the Department of 
Housing and Urban Development Reform Act of 1989, and the Secretary 
determines that the combination of assistance provided--''.
            (3) Technical correction.--Section 515(c)(1) of the Housing 
        Act of 1949 (42 U.S.C. 1485(c)(1)) is amended by striking 
        ``December 21, 1979'' and inserting ``December 15, 1989''.

SEC. 5. LOAN GUARANTEES FOR MULTIFAMILY RENTAL HOUSING IN RURAL AREAS.

    (a) In General.--Title V of the Housing Act of 1949 (42 U.S.C. 1471 
et seq.) is amended by inserting after section 537 the following new 
section:

``SEC. 538. LOAN GUARANTEES FOR MULTIFAMILY RENTAL HOUSING IN RURAL 
              AREAS.

    ``(a) Authority.--The Secretary may make commitments to guarantee 
eligible loans for the development costs of eligible housing and 
related facilities, and may guarantee such eligible loans, in 
accordance with this section.
    ``(b) Extent of Guarantee.--A guarantee made under this section 
shall guarantee repayment of an amount not exceeding the total of the 
amount of the unpaid principal and interest of the loan for which the 
guarantee is made. The liability of the United States under any 
guarantee under this section shall decrease or increase pro rata with 
any decrease or increase of the amount of the unpaid portion of the 
obligation.
    ``(c) Eligible Borrowers.--A loan guaranteed under this section may 
be made to a nonprofit organization, an agency or body of any State 
government or political subdivision thereof, or a private entity.
    ``(d) Eligible Housing.--A loan may be guaranteed under this 
section only if the loan is used for the development costs of housing 
and related facilities (as such terms are defined in section 515(e)) 
that--
            ``(1) consists of 5 or more adequate dwellings;
            ``(2) is available for occupancy only by low or moderate 
        income families or persons, whose incomes at the time of 
        initial occupancy do not exceed 115 percent of the median 
        income of the area, as determined by the Secretary;
            ``(3) will remain available as provided in paragraph (2), 
        according to such binding commitments as the Secretary may 
        require, for the period of the original term of the loan 
        guaranteed, unless the housing is acquired by foreclosure (or 
        instrument in lieu of foreclosure) or the Secretary waives the 
        applicability of such requirement for the loan only after 
        determining, based on objective information, that--
                    ``(A) there is no longer a need for low- and 
                moderate-income housing in the market area in which the 
                housing is located;
                    ``(B) housing opportunities for low-income 
                households and minorities will not be reduced as a 
                result of the waiver; and
                    ``(C) additional Federal assistance will not be 
                necessary as a result of the waiver; and
            ``(4) is located in a rural area.
    ``(e) Eligible Lenders.--
            ``(1) Requirement.--A loan may be guaranteed under this 
        section only if the loan is made by a lender that the Secretary 
        determines--
                    ``(A) meets the qualifications, and has been 
                approved by the Secretary of Housing and Urban 
                Development, to make loans for multifamily housing that 
                are to be insured under the National Housing Act;
                    ``(B) meets the qualifications, and has been 
                approved by the Federal National Mortgage Association 
                and the Federal Home Loan Mortgage Corporation, to make 
                loans for multifamily housing that are to be sold to 
                such corporations; or
                    ``(C) meets any qualifications that the Secretary 
                may, by regulation, establish for participation of 
                lenders in the loan guarantee program under this 
                section.
            ``(2) Eligibility list and annual audit.--The Secretary 
        shall establish a list of eligible lenders and shall annually 
        conduct an audit of each lender included in the list for 
        purposes of determining whether such lender continues to be an 
        eligible lender.
    ``(f) Loan Terms.--Each loan guaranteed pursuant to this section 
shall--
            ``(1) provide for complete amortization by periodic 
        payments to be made for a term not to exceed 40 years;
            ``(2) involve a rate of interest agreed upon by the 
        borrower and the lender that does not exceed the maximum 
        allowable rate established by the Secretary for purposes of 
        this section and is fixed over the term of the loan;
            ``(3) involve a principal obligation (including initial 
        service charges, appraisal, inspection, and other fees as the 
        Secretary may approve) not to exceed--
                    ``(A) in the case of a borrower that is a nonprofit 
                organization or an agency or body of any State or local 
                government, 97 percent of the development costs of the 
                housing and related facilities or the value of the 
                housing and facilities, whichever is less;
                    ``(B) in the case of a borrower that is a for-
                profit entity not referred to in subparagraph (A), 90 
                percent of the development costs of the housing and 
                related facilities or the value of the housing and 
                facilities, whichever is less; and
                    ``(C) in the case of any borrower, for such part of 
                the property as may be attributable to dwelling use, 
                the applicable maximum per unit dollar amount 
                limitations under section 207(c) of the National 
                Housing Act;
            ``(4) be secured by a first mortgage on the housing and 
        related facilities for which the loan is made, or otherwise, as 
        the Secretary may determine necessary to ensure repayment of 
        the obligation; and
            ``(5) for at least 20 percent of the loans made under this 
        section, the Secretary shall provide the borrower with 
        assistance in the form of credits pursuant to section 
        521(a)(1)(B) to the extent necessary to reduce the rate of 
        interest under paragraph (2) to the applicable Federal rate, as 
        such term is used in section 42(i)(2)(D) of the Internal 
        Revenue Code of 1986.
    ``(g) Guarantee Fee.--At the time of issuance of a loan guaranteed 
under this section, the Secretary may collect from the lender a fee 
equal to not more than 1 percent of the principal obligation of the 
loan.
    ``(h) Authority for Lenders To Issue Certificates of Guarantee.--
The Secretary may authorize certain eligible lenders to determine 
whether a loan meets the requirements for guarantee under this section 
and, subject to the availability of authority to enter into guarantees 
under this section, execute a firm commitment for a guarantee binding 
upon the Secretary and issue a certificate of guarantee evidencing a 
guarantee, without review and approval by the Secretary of the specific 
loan. The Secretary may establish standards for approving eligible 
lenders for a delegation of authority under this subsection.
    ``(i) Payment Under Guarantee.--
            ``(1) Notice of default.--In the event of default by the 
        borrower on a loan guaranteed under this section, the holder of 
        the guarantee certificate for the loan shall provide written 
        notice of the default to the Secretary.
            ``(2) Foreclosure.--After receiving notice under paragraph 
        (1) and providing written notice of action under this paragraph 
        to the Secretary, the holder of the guarantee certificate for 
        the loan may initiate foreclosure proceedings for the loan in a 
        court of competent jurisdiction, in accordance with regulations 
        issued by the Secretary, to obtain possession of the security 
        property. After the court issues a final order authorizing 
        foreclosure on the property, the holder of the certificate 
        shall be entitled to payment by the Secretary under the 
        guarantee (in the amount provided under subsection (b)) upon 
        (A) conveyance to the Secretary of title to the security 
        property, (B) submission to the Secretary of a claim for 
        payment under the guarantee, and (C) assignment to the 
        Secretary of all the claims of the holder of the guarantee 
        against the borrower or others arising out of the loan 
        transaction or foreclosure proceedings, except claims released 
        with the consent of the Secretary.
            ``(3) Assignment by secretary.--After receiving notice 
        under paragraph (1), the Secretary may accept assignment of the 
        loan if the Secretary determines that the assignment is in the 
        best interests of the United States. Assignment of a loan under 
        this paragraph shall include conveyance to the Secretary of 
        title to the security property, assignment to the Secretary of 
        all rights and interests arising under the loan, and assignment 
        to the Secretary of all claims against the borrower or others 
        arising out of the loan transaction. Upon assignment of a loan 
        under this paragraph, the holder of a guarantee certificate for 
        the loan shall be entitled to payment by the Secretary under 
        the guarantee (in the amount provided under subsection (b)).
            ``(4) Requirements.--Before any payment under a guarantee 
        is made under paragraph (2) or (3), the holder of the guarantee 
        certificate shall exhaust all reasonable possibilities of 
        collection on the loan guaranteed. Upon payment, in whole or in 
        part, to the holder, the note or judgment evidencing the debt 
        shall be assigned to the United States and the holder shall 
        have no further claim against the borrower or the United 
        States. The Secretary shall then take such action to collect as 
        the Secretary determines appropriate.
    ``(j) Violation of Guarantee Requirements by Lenders Issuing 
Guarantees.--
            ``(1) Indemnification.--If the Secretary determines that a 
        loan guaranteed by an eligible lender pursuant to delegation of 
        authority under subsection (h) was not originated in accordance 
        with the requirements under this section and the Secretary pays 
        a claim under the guarantee for the loan, the Secretary may 
        require the eligible lender authorized under subsection (h) to 
        issue the guarantee certificate for the loan--
                    ``(A) to indemnify the Secretary for the loss, if 
                the payment under the guarantee was made within a 
                reasonable period specified by the Secretary; or
                    ``(B) to indemnify the Secretary for the loss 
                regardless of when payment under the guarantee was 
                made, if the Secretary determines that fraud or 
                misrepresentation was involved in connection with the 
                origination of the loan.
            ``(2) Termination of authority to issue guarantees.--The 
        Secretary may cancel a delegation of authority under subsection 
        (h) to an eligible lender if the Secretary determines that the 
        lender has violated the requirements and procedures for 
        guaranteed loans under this section or for other good cause. 
        Any such cancellation shall be made by giving notice to the 
        eligible lender and shall take effect upon receipt of the 
        notice by the mortgagee or at a later date, as the Secretary 
        may provide. A decision by the Secretary to cancel a delegation 
        shall be final and conclusive and shall not be subject to 
judicial review.
    ``(k) Refinancing.--Any loan guaranteed under this section may be 
refinanced and extended in accordance with terms and conditions that 
the Secretary shall prescribe, but in no event for an additional amount 
or term that exceeds the limitations under subsection (f).
    ``(l) Nonassumption.--The borrower under a loan that is guaranteed 
under this section and under which any portion of the principal 
obligation or interest remains outstanding may not be relieved of 
liability with respect to the loan, notwithstanding the transfer of 
property for which the loan was made.
    ``(m) Geographical Targeting.--
            ``(1) Study.--The Secretary shall provide for an 
        independent entity to conduct a study to determine the extent 
        to which borrowers in the United States will utilize loan 
        guarantees under this section, the rural areas in the United 
        States in which borrowers can best utilize and most need loans 
        guaranteed under this section, and the rural areas in the 
        United States in which housing of the type eligible for a loan 
        guarantee under this section is most needed by low- and 
        moderate-income families. The Secretary shall require the 
        independent entity conducting the study to submit a report to 
        the Secretary and to the Congress describing the results of the 
        study not later than the expiration of the 90-day period 
        beginning on the date of the enactment of the Homesteading and 
        Neighborhood Restoration Act of 1995.
            ``(2) Targeting.--In providing loan guarantees under this 
        section, the Secretary shall establish standards to target and 
        give priority to rural areas in which borrowers can best 
        utilize and most need loans guaranteed under this section, as 
        determined by the Secretary based on the results of the study 
        under paragraph (1) and any other information the Secretary 
        considers appropriate.
    ``(n) Inapplicability of Credit-Elsewhere Test.--Section 501(c) 
shall not apply to guarantees, or loans guaranteed, under this section.
    ``(o) Tenant Protections.--The Secretary shall establish standards 
for the treatment of tenants of housing developed using amounts from a 
loan guaranteed under this section, which shall incorporate, to the 
extent applicable, existing standards applicable to tenants of housing 
developed with loans made under section 515. Such standards shall 
include standards for fair housing and equal opportunity, lease and 
grievance procedures, and tenant appeals of adverse actions.
    ``(p) Housing Standards.--The standards established under section 
515(m) for housing and related facilities assisted under section 515 
shall apply to housing and related facilities the development costs of 
which are financed in whole or in part with a loan guaranteed under 
this section.
    ``(q) Limitation on Commitments To Guarantee Loans.--
            ``(1) Requirement of appropriations for cost subsidy.--The 
        authority of the Secretary to enter into commitments to 
        guarantee loans under this section, and to guarantee loans, 
        shall be effective for each fiscal year only to the extent that 
        appropriations of budget authority to cover the costs (as such 
        term is defined in section 502 of the Congressional Budget Act 
        of 1974) of the guarantees are made in advance for such fiscal 
        year.
            ``(2) Annual limitation on amount of loan guarantees.--In 
        fiscal year 1996, the Secretary may enter into commitments to 
        guarantee loans under this section only to the extent that the 
        costs of the guarantees entered into in such fiscal year do not 
        exceed $1,000,000.
    ``(r) Report.--
            ``(1) In general.--The Secretary shall submit a report to 
        the Congress, not later than the expiration of the 2-year 
        period beginning on the date of the enactment of the 
        Homesteading and Neighborhood Restoration Act of 1995, 
        describing the program under this section for guaranteeing 
        loans.
            ``(2) Contents.--The report shall--
                    ``(A) describe the types of borrowers providing 
                housing with loans guaranteed under this section, the 
                areas served by the housing provided and the 
                geographical distribution of the housing, the levels of 
                income of the residents of the housing, the number of 
                dwelling units provided, the extent to which borrowers 
                under such loans have obtained other financial 
                assistance for development costs of housing provided 
                with the loans, and the extent to which borrowers under 
                such loans have used low-income housing tax credits 
                provided under section 42 of the Internal Revenue Code 
                of 1986 in connection with the housing provided with 
                the loans;
                    ``(B) analyze the financial viability of the 
                housing provided with loans guaranteed under this 
                section and the need for project-based rental 
                assistance for such housing;
                    ``(C) include any recommendations of the Secretary 
                for expanding or improving the program under this 
                section for guaranteeing loans; and
                    ``(D) include any other information regarding the 
                program for guaranteeing loans under this section that 
                the Secretary considers appropriate.
    ``(s) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) The term `development cost' has the meaning given the 
        term in section 515(e).
            ``(2) The term `eligible lender' means a lender determined 
        by the Secretary to meet the requirements of subparagraph (A), 
        (B), (C), or (D) of subsection (e)(1).
            ``(3) The terms `housing' and `related facilities' have the 
        meanings given such terms in section 515(e).
    ``(t) Authorization of Appropriations.--There is authorized to be 
appropriated for fiscal year 1996 $1,000,000 for costs (as such term is 
defined in section 502 of the Congressional Budget Act of 1974) of loan 
guarantees made under this section.
    ``(u) Termination Date.--A loan may not be guaranteed under this 
section after September 30, 1996.''.
    (b) Effect of Authorizing Legislation.--The enactment of this 
section shall be considered the enactment of authorizing legislation 
referred to in the 3d undesignated paragraph under the head ``Rural 
Housing and Community Development Service--rural housing insurance fund 
program account'' in title III of the Agriculture, Rural Development, 
Food and Drug Administration, and Related Agencies Appropriations Act, 
1996 (Public Law 104-37; 109 Stat. 299 et seq.; approved October 21, 
1995).

            Passed the House of Representatives October 30, 1995.

            Attest:

                                                ROBIN H. CARLE,

                                                                 Clerk.
```