99–006

107TH CONGRESS REPT. 107–640 " HOUSE OF REPRESENTATIVES ! 2d Session Part 2

HOUSING AFFORDABILITY FOR AMERICA ACT OF 2002

SEPTEMBER 17, 2002.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. OXLEY, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 3995] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Financial Services, to whom was referred the 

bill (H.R. 3995) to amend and extend certain laws relating to housing and community opportunity, and for other purposes, having 

considered the same, report favorably thereon with an amendment 

and recommend that the bill as amended do pass. 

CONTENTS 

Page 

Amendment .............................................................................................................. 2

Purpose and Summary ............................................................................................ 50

Background and Need for Legislation .................................................................... 51

Hearings ................................................................................................................... 56

Committee Consideration ........................................................................................ 58

Committee Votes ...................................................................................................... 58

Committee Oversight Findings ............................................................................... 63

Performance Goals and Objectives ......................................................................... 63

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 64

Committee Cost Estimate ....................................................................................... 64

Congressional Budget Office Estimate ................................................................... 64

Federal Mandates Statement ................................................................................. 78

Advisory Committee Statement .............................................................................. 78

Constitutional Authority Statement ...................................................................... 79

Applicability to Legislative Branch ........................................................................ 79

Section-by-Section Analysis of the Legislation ...................................................... 79

Changes in Existing Law Made by the Bill, as Reported ..................................... 102

Dissenting Views ..................................................................................................... 179

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AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Housing Affordability for America Act of 2002’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as follows:

Sec. 1. Short title and table of contents. 

TITLE I—HOME INVESTMENT PARTNERSHIPS PROGRAM 

Sec. 101. Matching grants for State and local affordable housing trust funds. 

Sec. 102. 3-year on-site inspection cycle for tax credit projects. 

Sec. 103. Repeal of limitations on program assistance as percentage of operating budget. 

Sec. 104. Eligibility of room additions for use for grandparents and grandchildren. 

Sec. 105. Program year for matching contributions. 

Sec. 106. Membership of boards of eligible community housing development organizations. 

Sec. 107. Monitoring of compliance. 

Sec. 108. Downpayment assistance initiative. 

Sec. 109. Homeownership for municipal employees. 

TITLE II—FHA MORTGAGE INSURANCE 

Subtitle A—Multifamily Housing and Health Care Facilities 

Sec. 201. Indexing of multifamily mortgage limits. 

Sec. 202. High-cost areas. 

Sec. 203. Standards and need for health care facility mortgage insurance. 

Sec. 204. Hospital mortgage insurance loss mitigation demonstration program. 

Subtitle B—Single Family Housing 

Sec. 221. Downpayment simplification. 

Sec. 222. Reduced downpayment requirements for loans for teachers and public safety officers. 

Sec. 223. Community partners next door program. 

Sec. 224. Public safety officer home ownership in at-risk areas. 

Sec. 225. Hybrid adjustable rate mortgages. 

Sec. 226. Uniform national loan limit for home equity conversion mortgages. 

Sec. 227. Prohibition of investor and nonprofit owners under rehabilitation loan program. 

Sec. 228. Rehabilitation loan advances. 

Sec. 229. Nonprofit purchasers under property disposition. 

Sec. 230. Extension of holding period. 

Sec. 231. Pilot program for mandatory first-time homebuyer counseling for properties in high foreclosure neighborhoods. 

Sec. 232. Disposition of assets in revitalization areas. 

TITLE III—SUPPORTIVE HOUSING FOR ELDERLY AND DISABLED FAMILIES 

Sec. 301. Authorization of appropriations for grants for repairs to federally assisted housing for the elderly. 

Sec. 302. Service coordinators for supportive housing for persons with disabilities. 

Sec. 303. Demonstration program for elderly housing for intergenerational families. 

Sec. 304. Treatment of projects subject to foreclosure. 

TITLE IV—SECTION 8 RENTAL HOUSING ASSISTANCE PROGRAM 

Sec. 401. Housing voucher demonstration. 

Sec. 402. Flexibility to assist hard-to-house families. 

Sec. 403. Clarification on prohibition of re-screening of tenants. 

Sec. 404. PHA administrative fees. 

Sec. 405. Ensuring ability to use enhanced vouchers. 

Sec. 406. Treatment of overhoused assisted families. 

Sec. 407. Extension of manufactured housing demonstration program. 

Sec. 408. Extension of project-based section 8 contract renewals. 

Sec. 409. Inspection of units. 

Sec. 410. Escrow of tenant rent in cases of owner failure to maintain unit. 

Sec. 411. Project-based vouchers modifications. 

Sec. 412. Expanded use of enhanced vouchers. 

Sec. 413. Demonstration program for rental assistance for grandparent-headed or relative-headed families. 

Sec. 414. Eligibility of grandparent-headed and relative-headed families for family unification assistance. 

Sec. 415. Increased payment standard. 

Sec. 416. Protection of innocent tenants. 

TITLE V—PUBLIC HOUSING 

Subtitle A—General Provisions 

Sec. 501. PHA joint ventures. 

Sec. 502. Third-party public housing assessment system. 

Sec. 503. Public housing agency plans for certain small public housing agencies. 

Sec. 504. Affordable assisted living facilities demonstration program. 

Sec. 505. Protection of innocent tenants. 

Subtitle B—HOPE VI Revitalization Program 

Sec. 521. Selection criteria. 

Sec. 522. Authorization of appropriations. 

Sec. 523. Extension of program. 

Sec. 524. HOPE VI grants for assisting affordable housing through Main Street projects. 

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TITLE VI—HOMELESS HOUSING PROGRAMS 

Sec. 601. United States Interagency Council on Homelessness. 

Sec. 602. Federal Emergency Management Agency food and shelter program. 

Sec. 603. Emergency shelter grants program. 

Sec. 604. Supportive housing program. 

Sec. 605. Section 8 assistance for single room occupancy dwellings. 

Sec. 606. Shelter plus care. 

Sec. 607. Housing for domestic violence and sexual assault victims. 

Sec. 608. National goal of ending homelessness. 

Sec. 609. Clerical amendments. 

TITLE VII—NATIVE AMERICAN HOUSING 

Sec. 701. Reauthorization of Native American Housing and Self-Determination Act of 1996. 

Sec. 702. Comprehensive planning under Native American housing block grant program. 

Sec. 703. Lands Title Report Commission. 

TITLE VIII—HOUSING IMPACT ANALYSIS 

Sec. 801. Applicability. 

Sec. 802. Exception for certain banking rules. 

Sec. 803. Statement of proposed rulemaking. 

Sec. 804. Initial housing impact analysis. 

Sec. 805. Final housing impact analysis. 

Sec. 806. Avoidance of duplicative or unnecessary analyses. 

Sec. 807. Preparation of analyses. 

Sec. 808. Effect on other law. 

Sec. 809. Procedure for waiver or delay of completion. 

Sec. 810. Definitions. 

Sec. 811. Development. 

Sec. 812. Judicial review. 

TITLE IX—OTHER HOUSING PROGRAMS 

Sec. 901. GNMA guarantee fee. 

Sec. 902. Housing counseling programs. 

Sec. 903. Assistance for self-help housing providers. 

Sec. 904. Housing opportunities for persons with AIDS. 

Sec. 905. Use of CDBG amounts for construction of tornado-safe shelter for manufactured housing parks. 

Sec. 906. Use of CDBG amounts to administer renewal communities. 

Sec. 907. Subsidy layering review. 

Sec. 908. Study of community renewal program. 

Sec. 909. Correction of inequities in the second round of empowerment zones. 

Sec. 910. Employment opportunities in public and Indian housing agencies. 

Sec. 911. Assistance for nonprofit purchasers preserving affordable housing. 

Sec. 912. Homeownership for municipal employees. 

Sec. 913. Sense of Congress regarding HUD Office of Disability Policy. 

Sec. 914. Transfer of rural multifamily rental housing projects to nonprofits and local housing authorities. 

Sec. 915. Sense of Congress regarding consumer protection and home warranties. 

Sec. 916. Demonstration program for affordable housing database. 

Sec. 917. HUD study regarding Main Street partnership. 

Sec. 918. Contractual commitments for rural multifamily rental housing.

TITLE I—HOME INVESTMENT PARTNERSHIPS 

PROGRAM

SEC. 101. MATCHING GRANTS FOR STATE AND LOCAL AFFORDABLE HOUSING TRUST FUNDS. 

(a) IN GENERAL.—Title II of the Cranston-Gonzalez National Affordable Housing 

Act (42 U.S.C. 12721 et seq.) is amended by adding at the end the following new 

subtitle: 

‘‘Subtitle G—Matching Grants for State and Local 

Affordable Housing Trust Funds 

‘‘SEC. 292. MATCHING GRANT PROGRAM. 

‘‘(a) FINDINGS.—The Congress finds the following: 

‘‘(1) There are more than 280 housing trust funds in the United States. 36 

States have created housing trust funds and the remainder were created by cities and counties. 

‘‘(2) More than $500,000,000 is spent for affordable housing through these 

trust funds every year and this amount is increasing. On average, for every dollar committed to a housing project by a housing trust fund, another $5 to $10 

is leveraged in other public and private resources. 

‘‘(3) Hundreds of thousands of housing units have been supported through 

housing trust funds. 

‘‘(4) Housing trust funds support a variety of housing activities for low- and 

very low-income households, including new construction, preservation of existing housing, emergency repairs, homeless shelters, housing-related services, and 

capacity building for nonprofit organizations. 

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‘‘(5) At any given time, as many as 50 additional jurisdictions are considering 

the creation of a housing trust fund. ‘‘(6) These unique funds are a fundamental aspect of emerging housing policy 

in the United States. ‘‘(7) Housing trust funds have demonstrated that when government makes a 

commitment to address critical housing needs, the on-going dedicated source of 

revenue allows for more intelligent planning to address housing needs and for 

improved proposals submitted by the housing industry in an effort to effectively 

use existing resources. ‘‘(8) Housing trust funds enable jurisdictions to elevate funding for their critical housing needs by committing resources to a process that treats affordable 

housing as an essential component of maintaining healthy communities. ‘‘(9) Jurisdictions have documented increased jobs, growing sales taxes, higher 

property tax revenues, and many other economic benefits from the operation of 

their housing trust funds. ‘‘(10) Providing federal incentives to encourage the establishment of more 

State and local housing trust funds, and providing Federal funds for the more 

than 280 existing housing trust funds, would be a positive action in addressing 

the affordable housing crisis. ‘‘(b) IN GENERAL.—The Secretary of Housing and Urban Development may make 

grants under this section to affordable housing trust funds that are distinct funds, 

established by States and units of general local government, that use public revenue 

to support the production, preservation, and rehabilitation of affordable housing, as 

determined by the Secretary. 

‘‘(c) ALLOCATIONS FOR STATES AND UNITS OF GENERAL LOCAL GOVERNMENT.—The 

Secretary shall use the total amount made available for grants under this section 

for each fiscal year to provide such grants to affordable housing trust funds of 

States and units of general local government. Of such total amount, the Secretary 

shall allocate 40 percent for grants for affordable housing trust funds of States and 

60 percent for grants for affordable housing trust funds of units of general local government. Each State affordable housing trust fund shall receive at least 1 percent 

of the amount allocated for the States. 

‘‘(d) MATCHING REQUIREMENT.—The Secretary may not make a grant under this 

section for any fiscal year to any affordable housing trust fund in an amount in excess of the amount that the State or local government administering the trust fund 

certifies, as the Secretary shall require, that will be contributed from non-Federal 

sources during such fiscal year to the trust fund for use only for production, preservation, and rehabilitation of affordable housing. 

‘‘(e) USE REQUIREMENTS.—Amounts provided from a grant under this section shall 

be subject to the following requirements: 

‘‘(1) DISTRIBUTION TO ELIGIBLE ENTITIES.—Grant amounts under this section 

(excluding any amounts used under paragraph (2)) shall be distributed to eligible entities for use by such entities only for eligible activities in the jurisdiction 

served by the affordable housing trust fund, as follows: 

‘‘(A) USE FOR RENTAL HOUSING FOR EXTREMELY LOW-INCOME FAMILIES.—

75 percent of such amounts shall be distributed for use only for eligible activities relating to qualified affordable housing that is available for rental 

by extremely low-income families in the jurisdiction served by the affordable housing trust fund. Such rental housing shall include limited equity 

cooperative housing, as such term is defined in section 143(k) of the Internal Revenue Code of 1986 (26 U.S.C 143(k)). 

‘‘(B) USE FOR RENTAL HOUSING OR HOMEOWNERSHIP FOR LOW-INCOME FAMILIES.—25 percent of such amounts shall be distributed for use only for eligible activities relating to qualified affordable housing that is available for 

rental by low-income families in the jurisdiction served by the affordable 

housing trust fund, or for homeownership assistance for low-income families 

in such jurisdiction. Such rental housing and homes for homeownership 

shall include housing of a cooperative housing corporation, as such term as 

defined in section 216(b) of the Internal Revenue Code of 1986 (26 U.S.C. 

216(b)). 

‘‘(2) OPERATING ASSISTANCE FOR NONPROFIT HOUSING DEVELOPMENT ORGANIZATIONS.—An affordable housing trust fund that receives a grant under this section may use not more than 5 percent of such grant amounts to provide assistance to nonprofit organizations involved in the development, rehabilitation, or 

preservation of affordable rental housing for payment of operating costs of such 

organizations. Such nonprofit organizations shall include community housing 

development organizations (as such term is defined in section 104 of this Act, 

community development financial institutions (as such term is defined in section 103 of the Community Development Banking and Financial Institutions 

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Act of 1994 (12 U.S.C. 4702)), community development corporations (as such 

term is defined in section 31131 of the National Community Economic Partnership Act of 1994 (42 U.S.C. 13851)), and community-based development organizations. 

‘‘(3) COST LIMITS.—The Secretary shall establish limitations on the amount of 

grant amounts that may be used, on a per unit basis, for eligible activities. Such 

limitations shall be the same as the per unit cost limits established pursuant 

to section 212(e), as adjusted annually, and established by number of bedrooms, 

market area, and eligible activity. 

‘‘(f) ALLOCATION PLAN.—

‘‘(1) REQUIREMENT.—With respect to a fiscal year, an affordable housing trust 

fund shall be eligible to receive a grant under this section for such fiscal year 

only if the trust fund has established an allocation plan that has been submitted to the Secretary and reviewed and approved by the Secretary as in accordance with this subsection. The Secretary may disapprove an allocation plan 

only if the plan fails to comply with requirements set forth in this section. 

‘‘(2) ESTABLISHMENT.—An allocation plan in accordance with this subsection 

is a plan, established by an affordable housing trust fund for a fiscal year, for 

the distribution of grant amounts provided under this section to the trust fund 

for such fiscal year. 

‘‘(3) NOTICE.—In establishing an allocation plan, the affordable housing trust 

fund shall notify the public of the establishment of the plan, provide an opportunity for public comments regarding the plan, consider any public comments 

received, and make the completed plan available to the public. 

‘‘(4) CONTENTS.—An allocation plan of an affordable housing trust fund shall 

include the following information: 

‘‘(A) APPLICATION REQUIREMENTS FOR ELIGIBLE ENTITIES AND SUBRECIPIENTS.—The allocation plan shall set forth the requirements for eligible entities and eligible subrecipients to apply to receive assistance from grant 

amounts under this section, including a requirement that each such application include—

‘‘(i) a description of the eligible activities to be conducted using such 

assistance; and 

‘‘(ii) a certification by the applicant that any housing units assisted 

with such assistance will comply with the requirements under—

‘‘(I) subsection (k)(9)(A) (relating to rents charged); 

‘‘(II) subsection (k)(9)(B) (relating to tenant rent contribution); 

‘‘(III) subsection (k)(9)(C) (relating to availability of units for 

voucher holders); and 

‘‘(IV) subsection (k)(9)(E) (relating to use as qualified affordable 

housing for 40 years). 

‘‘(B) SELECTION AND PREFERENCE CRITERIA FOR ELIGIBLE ENTITIES AND

SUBRECIPIENTS.—The allocation plan shall set forth the factors for consideration in selecting among applicants that meet the application requirements 

set forth pursuant to subparagraph (A), which shall give preference to applicants based on—

‘‘(i) the amount of assistance leveraged by the applicant from private 

and other non-Federal sources for carrying out the eligible activities to 

be funded with assistance from grant amounts under this section, including assistance made available under section 8 of the United States 

Housing Act of 1937 (42 U.S.C. 1437f) that is devoted to the project 

that contains the qualified affordable housing to be assisted with such 

assistance; 

‘‘(ii) the extent of local assistance that will be provided in carrying 

out the eligible activities, including—

‘‘(I) financial assistance; 

‘‘(II) the extent to which the applicant has worked to address 

issues of siting and exclusionary zoning or other policies that are 

barriers to affordable housing with the unit of general local government in which the housing to be assisted with such assistance will 

be located; and 

‘‘(III) the extent to which the applicant has worked with the unit 

of general local government to reduce the barriers to affordable 

housing; 

‘‘(iii) the degree to which the project in which the qualified affordable 

housing will be located will have residents of various incomes; 

‘‘(iv) the extent of employment and other economic opportunities for 

low-income families in the area in which the housing will be located; 

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‘‘(v) the extent to which the applicant demonstrates the ability to 

maintain dwelling units as qualified affordable housing through the use 

of assistance made available under this section, assistance leveraged 

from non-Federal sources, assistance made available under section 8 of 

the United States Housing Act of 1937 (42 U.S.C. 1437f), State or local 

assistance, programs to increase tenant income, cross-subsidization, 

and any other resources; ‘‘(vi) the extent to which the applicant demonstrates that the county 

in which the housing is to be located is experiencing an extremely low 

vacancy rate; ‘‘(vii) the extent to which the percentage of the housing located in 

such county that is extremely old housing exceeds 35 percent; ‘‘(viii) whether the applicant has provided that— ‘‘(I) 75 percent of the grant amounts will be used for eligible activities relating to housing located in census tracts in which the 

number of families having incomes less than the poverty line is 

less than 20 percent or in communities undergoing revitalization; 

and ‘‘(II) 25 percent of the grant amounts will be used for eligible activities relating to housing that is located in census tracts in which 

the number of families having incomes less than the poverty line 

is greater than 20 percent and is not located in a community undergoing revitalization; and 

‘‘(ix) whether the applicant has provided that—

‘‘(I) not less than 45 percent of the grant amounts will be used 

for eligible activities relating to housing that is affordable to families having incomes less than 30 percent of the greater of (aa) the 

median income for the area in which the housing is located, or (bb) 

the median income for the State in which the housing is located; 

‘‘(II) not less than 30 percent of the grant amounts will be used 

for eligible activities relating to housing that is affordable to families having incomes not exceeding the amount earned by a family 

having one individual (or 1.5 individuals in the case of a family 

consisting of 3 or more individuals), who is employed on a full-time 

basis in a position paying the higher of (aa) the Federal minimum 

wage under section 6(a)(1) of the Fair Labor Standards Act of 1938 

(29 U.S.C. 206(a)(1)), or (bb) the minimum wage under State law 

of the State in which the housing is located; and 

‘‘(III) not more than 25 percent of the grant amounts will be used 

for eligible activities relating to housing for families having incomes that (aa) are greater than the incomes referred to in subclauses (I) and (II) of this clause, but (bb) do not exceed the higher 

of the median income for the State in which the housing is located 

or 80 percent of the median income for the area in which the housing is located. 

‘‘(5) CONSOLIDATED PLAN.—The Secretary shall provide that a State or unit 

of general local government administering an affordable housing trust fund may 

comply with the requirements under this subsection for submission of an allocation plan through the inclusion of any appropriate information in a single consolidated submission used for purposes of applying for other community planning and development and housing assistance programs administered by the 

Secretary. 

‘‘(g) FORMS OF ASSISTANCE.—

‘‘(1) IN GENERAL.—Assistance from grant amounts under this section may be 

distributed in the form of capital grants, noninterest bearing or low-interest 

loans or advances, deferred payment loans, guarantees, and any other forms of 

assistance approved by the Secretary. 

‘‘(2) REPAYMENTS.—If an affordable housing trust fund awards assistance 

from grant amounts under this section in the form of a loan or other mechanism 

by which funds are later repaid to the trust fund, any repayments received by 

the trust fund shall be distributed by the trust fund in accordance with the allocation plan under subsection (f) for the trust fund for the fiscal year in which 

such repayments are made. 

‘‘(h) COORDINATION WITH OTHER ASSISTANCE.—In distributing assistance from 

grant amounts under this section, each affordable housing trust fund shall, to the 

maximum extent practicable, coordinate such distribution with the provision of 

other affordable housing assistance by the trust fund, including—

‘‘(1) in the case of any State, housing credit dollar amounts allocated by the 

State under section 42(h) of the Internal Revenue Code of 1986; 

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‘‘(2) assistance otherwise made available under this title or the community development block grant program under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.); and ‘‘(3) private activity bonds. ‘‘(i) ADMINISTRATION OF PROGRAM BY SUBRECIPIENT.—At the discretion of the affordable housing trust fund, the trust fund may select an eligible subrecipient to 

carry out all or a portion of the trust fund’s responsibilities under this section, in 

accordance with this section. ‘‘(j) LABOR STANDARDS.—Each affordable housing trust fund receiving grant 

amounts under this section shall ensure that contracts for eligible activities assisted 

with such amounts comply with the same requirements under section 286 that are 

applicable to contracts for construction of affordable housing assisted under such 

Act. ‘‘(k) DEFINITIONS.—For purposes of this section, the following definitions shall 

apply: ‘‘(1) ELIGIBLE ACTIVITIES.—The term ‘eligible activities’ means activities relating to the providing qualified affordable housing, including— ‘‘(A) the construction of new housing; 

‘‘(B) the acquisition of real property; 

‘‘(C) site preparation and improvement, including demolition; 

‘‘(D) rehabilitation of existing housing; and 

‘‘(E) providing incentives to maintain existing housing as qualified affordable housing and to establish or extend any low-income affordability restrictions for such housing, including covering capital expenditures and operating costs. 

‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible entity’ includes any public or private 

nonprofit or for-profit entity, unit of general local government, regional planning entity, and any other entity engaged in the development, rehabilitation, or 

preservation of qualified affordable housing, as determined by the Secretary. 

‘‘(3) ELIGIBLE SUBRECIPIENT.—The term ‘eligible subrecipient’ means a public 

agency or a nonprofit organization, including a community development corporation, a community development financial institution, a State or local housing trust fund, and any other intermediary selected by an affordable housing 

trust fund to administer all or a portion of the trust fund’s responsibilities 

under this section. The term does not include any public agency or nonprofit 

organization that receives money from an affordable housing trust fund solely 

as a developer or owner of housing. 

‘‘(4) EXTREMELY LOW-INCOME FAMILIES.—The term ‘extremely low-income families’ means families (as such term is defined in section 3(b) of the United States 

Housing Act of 1937 (42 U.S.C. 1437a(b))) whose incomes do not exceed 30 percent of the median family income for the area, as determined by the Secretary 

with adjustments for smaller and larger families, except that the Secretary may 

establish income ceilings higher or lower than 30 percent of the median for the 

area on the basis of the Secretary’s findings that such variations are necessary 

because of unusually high or low family incomes. 

‘‘(5) EXTREMELY LOW VACANCY RATE.—The term ‘extremely low vacancy rate’

means a housing or rental vacancy rate of 2 percent or less. 

‘‘(6) EXTREMELY OLD HOUSING.—The term ‘extremely old housing’ means housing that is 45 years old or older. 

‘‘(7) LOW-INCOME FAMILIES.—The term ‘low-income families’ has the meaning 

given such term in section 3(b) of the United States Housing Act of 1937 (42 

U.S.C. 1437a(b)). 

‘‘(8) POVERTY LINE.—The term ‘poverty line’ has the meaning given such term 

in section 673(2) of the Omnibus Budget Reconciliation Act of 1981, including 

any revision required by such section. 

‘‘(9) QUALIFIED AFFORDABLE HOUSING.—The term ‘qualified affordable housing’

means a rental dwelling unit that is subject to legally binding commitments 

that ensure that the dwelling unit meets all of the following requirements: 

‘‘(A) RENTS.—The dwelling unit bears a rent not greater than the lesser 

of—

‘‘(i) the existing fair market rental established by the Secretary under 

section 8(c) of the United States Housing Act of 1937 (42 U.S.C. 

1437f(c)) for a dwelling unit of the same size in the same market area; 

and 

‘‘(ii) a rent that does not exceed 30 percent of the adjusted income 

of a family whose income equals 65 percent of the median income for 

the area, as determined by the Secretary, with adjustment for number 

of bedrooms in the unit, except that the Secretary may establish income 

ceilings higher or lower than 65 percent of the median for the area on 

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the basis of the findings of the Secretary that such variations are necessary because of prevailing levels of construction costs or fair market 

rents, or unusually high or low family incomes. ‘‘(B) TENANT RENT CONTRIBUTION.—The contribution toward rent by the 

family residing in the dwelling unit will not exceed 30 percent of the adjusted income of such family. ‘‘(C) AVAILABILITY OF UNITS FOR VOUCHER HOLDERS.—The dwelling unit— ‘‘(i) is located in a project within which a percentage of units are 

made available only for occupancy by families assisted under the 

voucher program under section 8(o) of the United States Housing Act 

of 1937 (42 U.S.C. 1437f(o)) (including project-based assistance under 

section 8(o)(13)) on the same basis as other families eligible for occupancy of the project (except that only the voucher holder’s expected 

share of rent shall be considered), which percentage shall not be less 

than the percentage of the total cost of developing, rehabilitating, or 

preserving the project that is funded with assistance under this section; 

and ‘‘(ii) is one of the units that is subject to such occupancy requirements. ‘‘(D) NON-DISCRIMINATION AGAINST VOUCHER HOLDERS.—The dwelling unit 

is located in a project in which all dwelling units are subject to enforceable 

restrictions that provide that a unit may not be refused for leasing to a 

holder of a voucher of eligibility under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) because of the status of the prospective 

tenant as a holder of such voucher. ‘‘(E) DURATION OF USE.—The dwelling unit will continue to be subject to 

the requirements under this paragraph for not less than 40 years. ‘‘(10) SECRETARY.—The term ‘Secretary’ means the Secretary of Housing and 

Urban Development. ‘‘(l) AUTHORIZATIONS OF APPROPRIATIONS.—There are authorized to be appropriated such sums as may be necessary for fiscal year 2003 and each fiscal year 

thereafter for grants under this section. Amounts made available for the HOME Investment Partnerships Act shall not be available for assistance under this subtitle. 

‘‘(m) INAPPLICABILITY OF HOME PROVISIONS.—Except as specifically provided in 

this subtitle, no requirement under, or provision of, title I or subtitles A through 

F of this title shall apply to assistance provided under this subtitle.’’. 

(b) CONFORMING AMENDMENT.—Section 201 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701 note) is amended by striking ‘‘This title’’ and 

inserting ‘‘Subtitles A through F of this title’’. 

SEC. 102. 3-YEAR ON-SITE INSPECTION CYCLE FOR TAX CREDIT PROJECTS. 

Subsection (b) of section 226 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12756) is amended to read as follows: 

‘‘(b) PERIODIC MONITORING.—

‘‘(1) REQUIREMENT.—Each participating jurisdiction shall review the activities 

of owners of affordable housing for rental that is assisted under this title to assess compliance with the requirements of this title. Such review shall be conducted in compliance with the provisions of paragraph (2) (relating to frequency) and shall include on-site inspection to determine compliance with housing codes and other applicable regulations. 

‘‘(2) FREQUENCY.—The review required by paragraph (1) shall be conducted 

not less frequently than annually, except that, in the case of affordable housing 

for rental that has been allocated a low-income housing tax credit by a housing 

credit agency pursuant to section 42 of the Internal Revenue Code 1986 and is 

not considered (under such regulations as the Secretary shall prescribe) to be 

high-risk housing, the on-site inspection referred to in paragraph (1) shall be 

conducted once every 3 years, or more often as may be required under the regulations issued pursuant to such section 42. 

‘‘(3) INCLUSION IN PERFORMANCE REPORT.—The results of each review of a participating jurisdiction shall be included in the performance report of the jurisdiction that is submitted under section 108(a) for the year in which the review 

is conducted and shall be made available to the public.’’. 

SEC. 103. REPEAL OF LIMITATIONS ON PROGRAM ASSISTANCE AS PERCENTAGE OF OPERATING BUDGET. 

(a) HOUSING EDUCATION AND ORGANIZATIONAL SUPPORT.—Section 233(d) of the 

Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12773(d)) is amended—

(1) by striking ‘‘may not—’’ and all that follows through ‘‘(1)’’ and inserting 

‘‘may not’’; and 

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(2) by striking ‘‘; or’’ at the end of paragraph (1) and all that follows through 

the end of paragraph (2) and inserting a period. 

(b) OTHER SUPPORT FOR STATE AND LOCAL HOUSING STRATEGIES.—The first sentence of section 243(b) of the Cranston-Gonzalez National Affordable Housing Act 

(42 U.S.C. 12783(b)) is amended by striking ‘‘and shall provide not more than 20 

percent of the operating budget of the contracting organization in any one year’’. 

SEC. 104. ELIGIBILITY OF ROOM ADDITIONS FOR USE FOR GRANDPARENTS AND GRANDCHILDREN. 

Section 104(8) of the Cranston-Gonzalez National Affordable Housing Act (42 

U.S.C. 12704(8)) is amended by adding at the end the following new sentence: ‘‘Such 

term also includes an additional room in, or a cottage housing opportunity unit installed adjacent to, an existing 1- to 4-family dwelling, that is necessary to permit 

the habitation, with the low-income family occupying the dwelling, of an elderly person who is a relative of the family and to avoid placement of such relative in an 

institutionalized setting, foster care, or other out-of-home setting.’’. 

SEC. 105. PROGRAM YEAR FOR MATCHING CONTRIBUTIONS. 

Section 220 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 

12750) is amended—

(1) in subsection (a)—

(A) by striking ‘‘a fiscal year’’ and inserting ‘‘a program year of the jurisdiction’’; and 

(B) by striking ‘‘such fiscal year’’ and inserting ‘‘such program year’’; and 

(2) in subsection (d)—

(A) in paragraph (1), by striking ‘‘fiscal year’’ and inserting ‘‘program year 

of the jurisdiction’’; 

(B) in paragraph (3), by striking ‘‘fiscal year’’ each place such term appears and inserting ‘‘program year’’; and 

(C) in paragraph (5), by striking ‘‘fiscal year’’ and inserting ‘‘program year 

of the jurisdiction’’. 

SEC. 106. MEMBERSHIP OF BOARDS OF ELIGIBLE COMMUNITY HOUSING DEVELOPMENT ORGANIZATIONS. 

Section 104(6) of the Cranston-Gonzalez National Affordable Housing Act (42 

U.S.C. 12704(6)) is amended by adding at the end the following: ‘‘In establishing requirements for an organization to be considered a community housing development 

organization for purposes of this Act, the Secretary may not prohibit, limit, or restrict membership on the board by public employees who are not elected or appointed or who do not exercise policy-making or policy-determining functions.’’. 

SEC. 107. MONITORING OF COMPLIANCE. 

(a) AUTHORITY AND AGREEMENTS.—Section 226 of the Cranston-Gonzalez National 

Affordable Housing Act (42 U.S.C. 12756) is amended—

(1) in the second sentence of subsection (a)—

(A) by striking ‘‘and’’; and 

(B) by inserting before the period at the end the following: ‘‘, and (3) such 

fees as may be established by the participating jurisdiction pursuant to subsection (c)’’; 

(2) by redesignating subsection (c) as subsection (d); and 

(3) by inserting after subsection (b) the following new subsection: 

‘‘(c) MONITORING FEES.—A participating jurisdiction may establish and charge 

reasonable fees to affordable housing projects assisted under this title for costs of 

monitoring compliance with the provisions of this title.’’. 

(b) USE OF INVESTMENT.—Section 212 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12742), as amended by the preceding provisions of this 

Act, is further amended by adding at the end the following new subsection: 

‘‘(h) MONITORING FEES.—Monitoring fees under section 226(c) for an affordable 

housing project may be paid for from amounts made available under this subtitle 

to the project, in accordance with an agreement pursuant to section 226(a).’’. 

SEC. 108. DOWNPAYMENT ASSISTANCE INITIATIVE. 

(a) DOWNPAYMENT ASSISTANCE INITIATIVE.—Subtitle E of title II of the CranstonGonzalez National Affordable Housing Act (42 U.S.C. 12821) is amended to read as 

follows: 

10

‘‘Subtitle E—Other Assistance 

‘‘SEC. 271. DOWNPAYMENT ASSISTANCE INITIATIVE. 

‘‘(a) GRANT AUTHORITY.—The Secretary may make grants to participating jurisdictions to assist low-income families to achieve homeownership, in accordance with 

this section. ‘‘(b) ELIGIBLE ACTIVITIES.—Amounts made available under this section may be 

used only for downpayment assistance toward the purchase of single family housing 

by low-income families who are first-time homebuyers. For purposes of this title, the 

term ‘downpayment assistance’ means assistance to help a family acquire a principal residence. ‘‘(c) HOUSING STRATEGY.—To be eligible to receive a grant under this section for 

a fiscal year, a participating jurisdiction shall include in its comprehensive housing 

affordability strategy under section 105 for such year a description of the use of the 

grant amounts. ‘‘(d) FORMULA ALLOCATION.—For each fiscal year, the Secretary shall allocate any 

amounts made available for assistance under this section for the fiscal year in accordance with a formula, which shall be established by the Secretary, that considers 

a participating jurisdiction’s need for and prior commitment to assistance to homebuyers. The formula may include minimum and maximum allocation amounts. ‘‘(e) REALLOCATION.—If any amounts allocated to a participating jurisdiction 

under this section become available for reallocation, the amounts shall be reallocated to other participating jurisdictions in accordance with the formula established 

pursuant to subsection (c), except that if a local participating jurisdiction failed to 

receive amounts allocated under this section and is located in a State that is a participating jurisdiction, the funds shall be reallocated to the State. 

‘‘(f) APPLICABILITY OF OTHER PROVISIONS.—

‘‘(1) IN GENERAL.—Except as otherwise provided in this section, grants under 

this section shall not be subject to the provisions of this title. 

‘‘(2) APPLICABLE PROVISIONS.—In addition to the requirements of this section, 

grants under this section shall be subject to the provisions of title I, sections 

215(b), 218, 219, 221, 223, 224, and 226(a) of subtitle A of this title, and subtitle 

F of this title. 

‘‘(3) REFERENCES.—In applying the requirements of subtitle A referred to in 

paragraph (2)—

‘‘(A) any references to funds under subtitle A shall be considered to refer 

to amounts made available for assistance under this section; and 

‘‘(B) any references to funds allocated or reallocated under section 217 or 

217(d) shall be considered to refer to amounts allocated or reallocated under 

subsection (d) or (e) of this section, respectively. 

‘‘(g) ADMINISTRATIVE COSTS.—Notwithstanding section 212(c), a participating jurisdiction may use funds under subtitle A for administrative and planning costs of 

the jurisdiction in carrying out this section, and the limitation in section 212(c) shall 

be based on the total amount of funds available under subtitle A and this section. 

‘‘(h) FUNDING.—There are authorized to be appropriated such sums as may be necessary to carry out this section for each of fiscal years 2003 and 2004.’’. 

(b) RELOCATION ASSISTANCE AND DOWNPAYMENT ASSISTANCE.—Subtitle F of title 

II of the Cranston-Gonzalez National Affordable Housing Act is amended by inserting after section 290 (42 U.S.C. 12840) the following new section: 

‘‘SEC. 291. RELOCATION ASSISTANCE AND DOWNPAYMENT ASSISTANCE. 

‘‘The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 

1970 shall not apply to downpayment assistance under this title.’’.

SEC. 109. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES. 

(a) ELIGIBLE ACTIVITIES.—Paragraph (2) of section 215(b) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12745(b)(2)) is amended to read 

as follows: 

‘‘(2) is the principal residence of an owner who—

‘‘(A) is a member of a family that qualifies as a low-income family—

‘‘(i) in the case of a contract to purchase existing housing, at the time 

of purchase; 

‘‘(ii) in the case of a lease-purchase agreement for existing housing 

or for housing to be constructed, at the time the agreement is signed; 

or 

‘‘(iii) in the case of a contract to purchase housing to be constructed, 

at the time the contract is signed; or 

‘‘(B)(i) is a uniformed employee (which shall include policemen, firemen, 

and sanitation and other maintenance workers) or a teacher who is an emVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6621 E:\HR\OC\HR640P2.107 HR640P2
11

ployee, of the participating jurisdiction (or an agency or school district serving such jurisdiction) that is investing funds made available under this subtitle to support homeownership of the residence; and 

‘‘(ii) is a member of a family whose income, at the time referred to in 

clause (i), (ii), or (iii) of subparagraph (A), as appropriate, and as determined by the Secretary with adjustments for smaller and larger families, 

does not exceed 115 percent of the median income of the area, except that, 

with respect only to such areas that the Secretary determines have high 

housing costs, taking into consideration median house prices and median 

family incomes for the area, such income limitation shall be 150 percent of 

the median income of the area, as determined by the Secretary with adjustments for smaller and larger families;’’. 

(b) INCOME TARGETING.—Section 214(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12744(2)) is amended by inserting before the semicolon 

the following: ‘‘or families described in section 215(b)(2)(B)’’. 

(c) ELIGIBLE INVESTMENTS.—Section 212(b) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12742(b)) is amended by adding at the end the following new sentence: ‘‘Notwithstanding the preceding sentence, in the case of homeownership assistance for residences of owners described in section 215(b)(2)(B), 

funds made available under this subtitle may only be invested (1) to provide 

amounts for downpayments on mortgages, (2) to pay reasonable closing costs normally associated with the purchase of a residence, (3) to obtain pre- or post-purchase counseling relating to the financial and other obligations of homeownership, 

or (4) to subsidize mortgage interest rates.’’.

TITLE II—FHA MORTGAGE INSURANCE 

Subtitle A—Multifamily Housing and Health Care 

Facilities 

SEC. 201. INDEXING OF MULTIFAMILY MORTGAGE LIMITS. 

(a) SECTION 207 LIMITS.—Section 207(c)(3) of the National Housing Act (12 U.S.C. 

1713(c)(3)) is amended—

(1) by striking ‘‘$11,250’’ and inserting ‘‘$17,460’’; 

(2) by inserting before ‘‘; and except that’’ the following: ‘‘; except that the Secretary shall adjust each such dollar amount limitation set forth in this paragraph (as such limitation may have been previously adjusted pursuant to this 

provision) effective January 1 of each year (beginning in 2003) in accordance 

with the percentage increase, if any, during the 12-month period ending with 

the preceding October, in the Annual Construction Cost Index of the Bureau of 

the Census of the Department of Commerce’’; and 

(3) by inserting after ‘‘foregoing dollar amount limitations contained in this 

paragraph’’ the following: ‘‘(as such limitations may have been previously adjusted pursuant to this paragraph)’’. 

(b) SECTION 213 LIMITS.—Section 213(b)(2) of the National Housing Act (12 U.S.C. 

1715e(b)(2)) is amended—

(1) by striking ‘‘$38,025’’, ‘‘$42,120’’, ‘‘$50,310’’, ‘‘$62,010’’, and ‘‘$70,200’’, and 

inserting ‘‘$41,207’’, ‘‘$47,511’’, ‘‘$57,300’’, ‘‘$73,343’’, and ‘‘$81,708’’, respectively; 

(2) by striking ‘‘$49,140’’, ‘‘$60,255’’, ‘‘$75,465’’, and ‘‘$85,328’’, and inserting 

‘‘$49,710’’, ‘‘$60,446’’, ‘‘$78,197’’, and ‘‘$85,836’’, respectively; 

(3) by inserting after the colon at the end of the first proviso the following: 

‘‘Provided further, That the Secretary shall adjust each such dollar amount limitation set forth in this paragraph (as such limitation may have been previously 

adjusted pursuant to this provision) effective January 1 of each year (beginning 

in 2003) in accordance with the percentage increase, if any, during the 12-

month period ending with the preceding October, in the Annual Construction 

Cost Index of the Bureau of the Census of the Department of Commerce:’’; and 

(4) by inserting after ‘‘foregoing dollar amount limitations contained in this 

paragraph’’ the following: ‘‘(as such limitations may have been previously adjusted pursuant to this paragraph)’’. 

(c) SECTION 220 LIMITS.—Section 220(d)(3)(B)(iii) of the National Housing Act (12 

U.S.C. 1715k(d)(3)(B)(iii)) is amended—

(1) by inserting after ‘‘foregoing dollar amount limitations contained in this 

clause’’, the first place such phrase appears, the following: ‘‘(as such limitations 

may have been previously adjusted pursuant to this clause)’’. 

12

(2) by inserting after ‘‘Provided,’’ the following: ‘‘That the Secretary shall adjust each such dollar amount limitation set forth in this clause (as such limitation may have been previously adjusted pursuant to this provision) effective 

January 1 of each year (beginning in 2003) in accordance with the percentage 

increase, if any, during the 12-month period ending with the preceding October, 

in the Annual Construction Cost Index of the Bureau of the Census of the Department of Commerce: Provided further,’’; and 

(3) by striking ‘‘(as determined after the application of the preceding proviso)’’

and inserting ‘‘(as such limitations may have been previously adjusted pursuant 

to the preceding proviso and as determined after application of any percentage 

increase authorized in this clause relating to units with two, three, or four or 

more bedrooms)’’. 

(d) SECTION 221(d)(3) LIMITS.—Section 221(d)(3)(ii) of the National Housing Act 

(12 U.S.C. 1715l(d)(3)(ii)) is amended—

(1) by inserting before ‘‘; and except that’’ the following: ‘‘; except that the Secretary shall adjust each such dollar amount limitation set forth in this clause 

(as such limitation may have been previously adjusted pursuant to this provision) effective January 1 of each year (beginning in 2003) in accordance with 

the percentage increase, if any, during the 12-month period ending with the 

preceding October, in the Annual Construction Cost Index of the Bureau of the 

Census of the Department of Commerce’’; and 

(2) by inserting after ‘‘foregoing dollar amount limitations contained in this 

clause’’ the following: ‘‘(as such limitations may have been previously adjusted 

pursuant to this clause)’’. 

(e) SECTION 221(d)(4) LIMITS.—Section 221(d)(4)(ii) of the National Housing Act 

(12 U.S.C. 1715l(d)(4)(ii)) is amended—

(1) by inserting before ‘‘; and except that’’ the following: ‘‘; except that the Secretary shall adjust each such dollar amount limitation set forth in this clause 

(as such limitation may have been previously adjusted pursuant to this provision) effective January 1 of each year (beginning in 2003) in accordance with 

the percentage increase, if any, during the 12-month period ending with the 

preceding October, in the Annual Construction Cost Index of the Bureau of the 

Census of the Department of Commerce’’; and 

(2) by inserting after ‘‘foregoing dollar amount limitations contained in this 

clause’’ the following: ‘‘(as such limitations may have been previously adjusted 

pursuant to this clause)’’. 

(f) SECTION 231 LIMITS.—Section 231(c)(2) of the National Housing Act (12 U.S.C. 

1715v(c)(2)) is amended—

(1) by inserting before ‘‘; and except that’’ the following: ‘‘; except that the Secretary shall adjust each such dollar amount limitation set forth in this paragraph (as such limitation may have been previously adjusted pursuant to this 

provision) effective January 1 of each year (beginning in 2003) in accordance 

with the percentage increase, if any, during the 12-month period ending with 

the preceding October, in the Annual Construction Cost Index of the Bureau of 

the Census of the Department of Commerce’’; and 

(2) by inserting after ‘‘foregoing dollar amount limitations contained in this 

paragraph’’ the following: ‘‘(as such limitations may have been previously adjusted pursuant to this paragraph)’’. 

(g) SECTION 234 LIMITS.—Section 234(e)(3) of the National Housing Act (12 U.S.C. 

1715y(e)(3)) is amended—

(1) by inserting before ‘‘; except that’’ the second place such phrase appears 

the following: ‘‘; except that the Secretary shall adjust each such dollar amount 

limitation set forth in this paragraph (as such limitation may have been previously adjusted pursuant to this provision) effective January 1 of each year (beginning in 2003) in accordance with the percentage increase, if any, during the 

12-month period ending with the preceding October, in the Annual Construction 

Cost Index of the Bureau of the Census of the Department of Commerce’’; 

(2) by inserting after ‘‘each of the foregoing dollar amounts’’ the following: ‘‘(as 

such amounts may have been previously adjusted pursuant to this paragraph)’’; 

and 

(3) by inserting after ‘‘foregoing dollar amount limitations contained in this 

paragraph’’ the following: ‘‘(as such limitations may have been previously adjusted pursuant to this paragraph and increased pursuant to the preceding 

clause)’’. 

SEC. 202. HIGH-COST AREAS. 

In the National Housing Act, sections 207(c)(3), 213(b)(2), 220(d)(3)(B)(iii), 

221(d)(3)(ii), 221(d)(4)(ii), 231(c)(2), and 234(e)(3) (12 U.S.C. 1713(c)(3), 1715e(b)(2), 

13

1715k(d)(3)(B)(iii), 1715l(d)(3)(ii), 1715l(d)(4)(ii), 1715v(c)(2)), and 1715y(e)(3)) are 

each amended—

(1) by striking ‘‘140 percent’’ and inserting ‘‘170 percent’’; and 

(2) by striking ‘‘110 percent’’ and inserting ‘‘140 percent’’. 

SEC. 203. STANDARDS AND NEED FOR HEALTH CARE FACILITY MORTGAGE INSURANCE. 

(a) HOSPITALS.—Paragraph (4) of section 242(d) of the National Housing Act (12 

U.S.C. 1715z–7) is amended to read as follows: 

‘‘(4)(A) The Secretary shall require satisfactory evidence that the hospital will 

be located in a State or political subdivision of a State with reasonable minimum standards of licensure and methods of operation for hospitals and satisfactory assurance that such standards will be applied and enforced with respect 

to the hospital. 

‘‘(B) The Secretary shall establish the means for determining need and feasibility for the hospital. If the State has an official procedure for determining 

need for hospitals, the Secretary shall also require that such procedure be followed before the application for insurance is submitted, and the application 

shall document that need has also been established under that procedure.’’. 

(b) NURSING HOMES, INTERMEDIATE CARE FACILITIES, AND COMBINED FACILITIES.—Section 232(d)(4) of the National Housing Act (12 U.S.C. 1715w(d)(4)) is 

amended by striking the paragraph designation and all that follows through the end 

of subparagraph (A) and inserting the following: 

‘‘(4)(A)(i) The Secretary shall require satisfactory evidence that a nursing 

home, intermediate care facility, or combined nursing home and intermediate 

care facility will be located in a State or political subdivision of a State with 

reasonable minimum standards of licensure and methods of operation for such 

homes, facilities, or combined homes and facilities. The Secretary shall also require satisfactory assurance that such standards will be applied and enforced 

with respect to the home, facility, or combined home or facility. 

‘‘(ii) The Secretary shall establish the means for determining need and feasibility for the home, facility, or combined home and facility. If the State has an 

official procedure for determining need for such homes, facilities, or combined 

homes and facilities, the Secretary shall also require that such procedure be followed before the application for insurance is submitted, and the application 

shall document that need has also been established under that procedure.’’.

SEC. 204. HOSPITAL MORTGAGE INSURANCE LOSS MITIGATION DEMONSTRATION PROGRAM. 

(a) IN GENERAL.—Section 242 of the National Housing Act (12 U.S.C. 1715z–7) is 

amended by adding at the end the following new subsection: 

‘‘(i) LOSS MITIGATION DEMONSTRATION PROGRAM.—

‘‘(1) IN GENERAL.—Only to the extent or in such amounts as are provided in 

advance in appropriation Acts to carry out this subsection, the Secretary may 

carry out a program to demonstrate the effectiveness of taking loss mitigation 

actions for hospitals with mortgages that are insured under this section to reduce the risk of, prevent, or cure defaults of financially troubled hospitals, to 

reduce claim or holding costs of loans that are assigned to the Secretary, or to 

maximize the recovery on loan assets. The demonstration program may be carried out only with respect to not more than 3 such hospitals. 

‘‘(2) LOSS MITIGATION ACTIONS.—Loss mitigation actions taken under the demonstration program under this subsection may include the following actions: 

‘‘(A) Partial payment of a claim under the contract for mortgage insurance under this section. 

‘‘(B) Temporary provision of operating assistance funds, including debt 

service. 

‘‘(C) Provision of financial assistance for maintenance, repair, alterations, 

or the cost of other capital improvements, including for conversion of excess 

capacity of hospitals to facilities providing health care and supportive housing for elderly persons and families, including assisted living facilities, 

nursing homes, and supportive housing for the elderly. 

‘‘(3) REQUIREMENTS FOR ASSISTANCE.—A hospital may be provided financial 

assistance under the demonstration program only if—

‘‘(A) the hospital has secured binding commitments for matching funds of 

not less than 10 percent of the cost of such assistance; and 

‘‘(B) the hospital has met the requirements of any applicable State certificate of need or other licensing requirement. 

‘‘(4) LIMITATIONS ON ASSISTANCE.—Any payments or financial assistance or relief under this subsection shall be made at the sole discretion of the Secretary 

and on terms acceptable to the Secretary except that—

14

‘‘(A) the total amount of payments and financial assistance and relief 

shall not exceed 30 percent of the outstanding project indebtedness insured 

by the Secretary; and ‘‘(B) the mortgagor shall agree to repay such total amount to the Secretary upon terms and conditions acceptable to the Secretary. ‘‘(5) FINAL DECISION.—A decision by the Secretary to exercise or forgo exercising any authority under this subsection shall not be subject to judicial review. ‘‘(6) APPLICATIONS.—The Secretary shall provide for hospitals to submit applications for participation in the demonstration program under this subsection, 

which shall include information sufficient to determine compliance with the requirements under paragraph (3). ‘‘(7) TERMINATION.—The demonstration program under this subsection shall 

terminate on December 31, 2004.’’. (b) REPORT.—Not later than September 30, 2005, the Secretary shall submit a report to the Congress analyzing the demonstration program under the amendment 

made by subsection (a) and the extent to which, if any, the assistance provided 

under such program reduced the net cost to the General Insurance Fund as calculated on a net present value basis. 

Subtitle B—Single Family Housing

SEC. 221. DOWNPAYMENT SIMPLIFICATION. 

(a) IN GENERAL.—Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)) 

is amended—

(1) in paragraph (2)—

(A) in subparagraph (A), by realigning the matter that precedes clause (ii) 

an additional 2 ems from the left margin; 

(B) in the matter that follows subparagraph (B)(iii)—

(i) by striking the seventh sentence of such matter (relating to the 

maximum amount of a principal obligation of a mortgage) and all that 

follows through the end of the penultimate undesignated paragraph; 

and 

(ii) by striking the second, third, and fifth sentences of such matter; 

and

(C) by striking subparagraph (B); 

(2) by transferring and inserting subparagraph (A) of paragraph (10) after 

subparagraph (A) of paragraph (2) and amending such transferred subparagraph—

(A) by striking all of the matter that precedes clause (i) and inserting the 

following: 

‘‘(B) not to exceed an amount equal to the sum of—’’; and 

(B) in clause (ii)(IV), by striking ‘‘an area of the’’ and inserting ‘‘a’’; 

(3) by transferring and inserting the last undesignated paragraph of paragraph (2) (relating to disclosure notice) after subsection (e), realigning such 

transferred paragraph so as to be flush with the left margin, and amending 

such transferred paragraph by inserting ‘‘(f) DISCLOSURE OF OTHER MORTGAGE

PRODUCTS.—’’ before ‘‘In conjunction’’; 

(4) by transferring and inserting the sentence that constitutes the text of 

paragraph (10)(B) after the period at the end of the first sentence that follows 

subparagraph (B) (relating to the definition of ‘‘area’’) and amending such transferred sentence by inserting ‘‘(2)’’ after ‘‘this paragraph’’; and 

(5) by striking paragraph (10) (as amended by the preceding provisions this 

section). 

(b) CONFORMING AMENDMENTS.—Section 245 of the National Housing Act (12 

U.S.C. 1715z–10) is amended—

(1) in subsection (a), by striking ‘‘, or if the mortgagor’’ and all that follows 

through ‘‘case of veterans’’; and 

(2) in subsection (b)(3), by striking ‘‘, or, if the’’ and all that follows through 

‘‘for veterans,’’. 

SEC. 222. REDUCED DOWNPAYMENT REQUIREMENTS FOR LOANS FOR TEACHERS AND PUBLIC SAFETY OFFICERS. 

(a) IN GENERAL.—Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)), 

as amended by the preceding provisions of this Act, is further amended by adding 

at the end the following new paragraph: 

‘‘(10) REDUCED DOWNPAYMENT REQUIREMENTS FOR TEACHERS AND PUBLIC

SAFETY OFFICERS.—

15

‘‘(A) IN GENERAL.—Notwithstanding paragraph (2), in the case of a mortgage described in subparagraph (B)— ‘‘(i) the mortgage shall involve a principal obligation in an amount 

that does not exceed the sum of 99 percent of the appraised value of 

the property and the total amount of initial service charges, appraisal, 

inspection, and other fees (as the Secretary shall approve) paid in connection with the mortgage; ‘‘(ii) no other provision of this subsection limiting the principal obligation of the mortgage based upon a percentage of the appraised value 

of the property subject to the mortgage shall apply; and ‘‘(iii) the matter in paragraph (9) that precedes the first proviso shall 

not apply and the mortgage shall be executed by a mortgagor who shall 

have paid on account of the property at least 1 percent of the cost of 

acquisition (as determined by the Secretary) in cash or its equivalent. ‘‘(B) MORTGAGES COVERED.—A mortgage described in this subparagraph 

is a mortgage— ‘‘(i) under which the mortgagor is an individual who— ‘‘(I) is (aa) a teacher, or (bb) a public safety officer; and 

‘‘(II) has not, during the 12-month period ending upon the insurance of the mortgage, had any present ownership interest in a 

principal residence located in the jurisdiction described in clause 

(ii); and 

‘‘(ii) made for a property that is located within the jurisdiction of—

‘‘(I) in the case of a mortgage of a mortgagor described in clause 

(i)(I)(aa), the local educational agency for the school in which the 

mortgagor is employed (or, in the case of a mortgagor employed in 

a private school, the local educational agency having jurisdiction 

for the area in which the private school is located); or 

‘‘(II) in the case of a mortgage of a mortgagor described in clause 

(i)(I)(bb), the jurisdiction served by the public law enforcement 

agency, firefighting agency, or rescue or ambulance agency that 

employs the mortgagor. 

‘‘(C) PROGRAM INTEGRITY.—Notwithstanding any other provision of this 

paragraph and section 203(c)(3), the Secretary may suspend the applicability of this paragraph and such section for such period as the Secretary 

considers appropriate if the Secretary determines such suspension is necessary because of fraud or other issues regarding program integrity.’’. 

(b) DEFERRAL AND REDUCTION OF UP-FRONT PREMIUM.—Section 203(c) of the National Housing Act (12 U.S.C. 1709(c)) is amended—

(1) in paragraph (2), in the matter preceding subparagraph (A), by striking 

‘‘Notwithstanding’’ and inserting ‘‘Except as provided in paragraph (3) and notwithstanding’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(3) DEFERRAL AND REDUCTION OF UP-FRONT PREMIUM.—In the case of any mortgage described in subsection (b)(10)(B): 

‘‘(A) Paragraph (2)(A) of this subsection (relating to collection of up-front premium payments) shall not apply. 

‘‘(B) If, at any time during the 5-year period beginning on the date of the insurance of the mortgage, the mortgagor ceases to be a teacher or public safety 

officer (as such terms are defined in section 201) or pays the principal obligation 

of the mortgage in full, the Secretary shall at such time collect a single premium payment in an amount equal to the amount of the single premium payment that, but for this paragraph, would have been required under paragraph 

(2)(A) of this subsection with respect to the mortgage, as reduced by 20 percent 

of such amount for each successive 12-month period completed during such 5-

year period before such cessation or prepayment occurs.’’. 

(c) DEFINITIONS.—Section 201 of the National Housing Act (12 U.S.C. 1707) is 

amended—

(1) in subsection (a), by redesignating clauses (1) and (2) as clauses (A) and 

(B), respectively; 

(2) by redesignating subsections (a) through (f) as paragraphs (1) through (6), 

respectively; 

(3) by realigning each paragraph 2 ems from the left margin; and 

(4) by adding at the end the following new paragraphs: 

‘‘(7) The term ‘public safety officer’ has the meaning given such term in section 1204 of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 

3796b). 

‘‘(8) The term ‘teacher’ means an individual who is employed on a part- or 

full-time basis as a teacher, teacher assistant, or administrator in a public or 

16

private school that provides elementary or secondary education, as determined 

under State law, except that elementary education shall include pre-Kindergarten education, and except that secondary education shall not include any 

education beyond grade 12. 

‘‘(9) The term ‘local educational agency’ has the meaning given such term in 

section 14101 of the Elementary and Secondary Education Act of 1965 (20 

U.S.C. 8801).’’. 

(d) REGULATIONS.—Not later than 60 days after the date of the enactment of this 

Act, the Secretary shall issue regulations to implement the amendments made by 

this section. 

SEC. 223. COMMUNITY PARTNERS NEXT DOOR PROGRAM. 

(a) DISCOUNT AND DOWNPAYMENT ASSISTANCE FOR TEACHERS AND PUBLIC SAFETY

OFFICERS.—Section 204(h) of the National Housing Act (12 U.S.C. 1710(h)) is 

amended—

(1) by redesignating paragraphs (7) through (10) as paragraphs (8) through 

(11), respectively; and 

(2) by inserting after paragraph (6) the following new paragraph: 

‘‘(7) 50 PERCENT DISCOUNT FOR TEACHERS AND PUBLIC SAFETY OFFICERS PURCHASING PROPERTIES THAT ARE ELIGIBLE ASSETS.—

‘‘(A) DISCOUNT.—A property that is an eligible asset and is sold, during 

fiscal years 2002 through 2006, to a teacher or public safety officer for use 

in accordance with subparagraph (B) shall be sold at a price that is equal 

to 50 percent of the appraised value of the eligible property (as determined 

in accordance with paragraph (6)(B)). In the case of a property eligible for 

both a discount under this paragraph and a discount under paragraph (6), 

the discount under paragraph (6) shall not apply. 

‘‘(B) PRIMARY RESIDENCE.—An eligible property sold pursuant to a discount under this paragraph shall be used, for not less than the 3-year period beginning upon such sale, as the primary residence of a teacher or public safety officer. 

‘‘(C) SALE METHODS.—The Secretary may sell an eligible property pursuant to a discount under this paragraph—

‘‘(i) to a unit of general local government or nonprofit organization 

(pursuant to paragraph (4) or otherwise), for resale or transfer to a 

teacher or public safety officer; or 

‘‘(ii) directly to a purchaser who is a teacher or public safety officer. 

‘‘(D) RESALE.—In the case of any purchase by a unit of general local government or nonprofit organization of an eligible property sold at a discounted price under this paragraph, the sale agreement under paragraph 

(8) shall—

‘‘(i) require the purchasing unit of general local government or nonprofit organization to provide the full benefit of the discount to the 

teacher or public safety officer obtaining the property; and 

‘‘(ii) in the case of a purchase involving multiple eligible assets, any 

of which is such an eligible property, designate the specific eligible 

property or properties to be subject to the requirements of subparagraph (B). 

‘‘(E) MORTGAGE DOWNPAYMENT ASSISTANCE.—If a teacher or public safety 

officer purchases an eligible property pursuant to a discounted sale price 

under this paragraph and finances such purchase through a mortgage insured under this title, notwithstanding any provision of section 203 the 

downpayment on such mortgage shall be $100. 

‘‘(F) PREVENTION OF UNDUE PROFIT.—The Secretary shall issue regulations to prevent undue profit from the resale of eligible properties in violation of the requirement under subparagraph (B). 

‘‘(G) DEFINITIONS.—For the purposes of this paragraph, the following definitions shall apply: 

‘‘(i) The term ‘eligible property’ means an eligible asset described in 

paragraph (2)(A) of this subsection. 

‘‘(ii) The terms ‘teacher’ and ‘public safety officer’ have the meanings 

given such terms in section 201. 

‘‘(H) PROGRAM INTEGRITY.—Notwithstanding any other provision of this 

paragraph, the Secretary may suspend the applicability of this paragraph 

for such period as the Secretary considers appropriate if the Secretary determines such suspension is necessary because of fraud or other issues regarding program integrity.’’. 

(b) CONFORMING AMENDMENTS.—Section 204(h) of the National Housing Act (12 

U.S.C. 1710(h)) is amended—

17

(1) in paragraph (4)(B)(ii), by striking ‘‘paragraph (7)’’ and inserting ‘‘paragraph (8)’’; 

(2) in paragraph (5)(B)(i), by striking ‘‘paragraph (7)’’ and inserting ‘‘paragraph (8)’’; and 

(3) in paragraph (6)(A), by striking ‘‘paragraph (8)’’ and inserting ‘‘paragraph 

(9)’’. 

(c) REGULATIONS.—Not later than 60 days after the date of the enactment of this 

Act, the Secretary shall issue regulations to implement the amendments made by 

this section. 

SEC. 224. PUBLIC SAFETY OFFICER HOME OWNERSHIP IN AT-RISK AREAS. 

(a) PROGRAM AUTHORITY.—The Secretary of Housing and Urban Development 

shall carry out a pilot program in accordance with this section to assist Federal, 

State, and local public safety officers purchasing homes in locally-designated at-risk 

areas. 

(b) ELIGIBILITY.—To be eligible for assistance under this section, a public safety 

officer shall agree, in writing, to use the residence purchased with such assistance 

as the primary residence of the public safety officer for not less than 3 years after 

the date of purchase. 

(c) MORTGAGE ASSISTANCE.—If a public safety officer purchases a home in locallydesignated at-risk area and finances such purchase through a mortgage insured 

under title II of the National Housing Act (12 U.S.C. 1707 et seq.), notwithstanding 

any provision of section 203 or any other provision of the National Housing Act, the 

following shall apply: 

(1) DOWNPAYMENT.—

(A) IN GENERAL.—There shall be no downpayment required if the purchase price of the property is not more than the reasonable value of the 

property, as determined by the Secretary. 

(B) PURCHASE PRICE EXCEEDS VALUE.—If the purchase price of the property exceeds the reasonable value of the property, as determined by the Secretary, the required downpayment shall be the difference between such reasonable value and the purchase price. 

(2) CLOSING COSTS.—The closing costs and origination fee for such mortgage 

may be included in the loan amount.

(3) INSURANCE PREMIUM PAYMENT.—There shall be one insurance premium 

payment due on the mortgage. Such insurance premium payment—

(A) shall be equal to 1 percent of the loan amount; 

(B) shall be due and considered earned by the Secretary at the time of 

the loan closing; and 

(C) may be included in the loan amount and paid from the loan proceeds. 

(d) LOCAL DESIGNATION OF AT-RISK AREAS.—

(1) CRITERIA.—Any unit of local government may request that the Secretary 

designate any area within the jurisdiction of that unit of local government as 

a locally-designated at-risk area for purposes of this section if the proposed 

area—

(A) has a crime rate that is significantly higher than the crime rate of 

the non-designated area that is within the jurisdiction of the unit of local 

government; and 

(B) has a population that is not more than 25 percent of the total population of area within the jurisdiction of the unit of local government. 

(2) DEADLINE FOR CONSIDERATION OF REQUEST.—Not later than 60 days after 

receiving a request under paragraph (1), the Secretary shall approve or disapprove the request. 

(e) PUBLIC SAFETY OFFICER.—For purposes of this section, the term ‘‘public safety 

officer’’ has the meaning given such term in section 201 of the National Housing 

Act (12 U.S.C. 1707) (as amended by section 222(c) of this Act). 

(f) PROGRAM INTEGRITY.—Notwithstanding any other provision of this section, the 

Secretary may suspend the applicability of this section for such period as the Secretary considers appropriate if the Secretary determines such suspension is necessary because of fraud or other issues regarding program integrity. 

(g) REGULATIONS.—Not later than 60 days after the date of the enactment of this 

Act, the Secretary shall issue regulations to implement the provisions of this section. 

(h) SUNSET.—The Secretary shall not approve any application for assistance under 

this section that is received by the Secretary after the expiration of the 3-year period beginning on the date that the Secretary first makes available assistance under 

the pilot program under this section. 

18

SEC. 225. HYBRID ADJUSTABLE RATE MORTGAGES. 

Section 251(d)(1)(C) of the National Housing Act (12 U.S.C. 1715z–16(d)(1)(C)) is 

amended by striking ‘‘five or fewer years’’ and inserting ‘‘three or fewer years’’. 

SEC. 226. UNIFORM NATIONAL LOAN LIMIT FOR HOME EQUITY CONVERSION MORTGAGES. 

Section 255(g) of the National Housing Act (12 U.S.C. 1715z–20(g)) is amended 

by striking ‘‘1-family residences in the area in which the dwelling subject to the 

mortgage under this section is located’’ and inserting ‘‘a 1-family residence’’. 

SEC. 227. PROHIBITION OF INVESTOR AND NONPROFIT OWNERS UNDER REHABILITATION 

LOAN PROGRAM. 

Section 203(g)(2) of the National Housing Act (12 U.S.C. 1709(g)(2)) is amended—

(1) by striking subparagraph (E); 

(2) in subparagraph (D), by inserting ‘‘or’’ after the semicolon; and 

(3) by redesignating subparagraph (F) as subparagraph (E). 

SEC. 228. REHABILITATION LOAN ADVANCES. 

Section 203(k)(3) of the National Housing Act (12 U.S.C. 1709(k)(3)) is amended—

(1) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), 

respectively; and 

(2) by inserting after subparagraph (B) the following new subparagraph: 

‘‘(C) involve a loan agreement containing such terms and conditions as the 

Secretary shall provide, including terms and conditions that provide that the 

mortgagee shall be responsible for—

‘‘(i) choosing an inspector or consultant who shall—

‘‘(I) meet the standards as the Secretary shall establish; and 

‘‘(II) be an agent of the mortgagee; and 

‘‘(ii) approving advances under the loan;’’. 

SEC. 229. NONPROFIT PURCHASERS UNDER PROPERTY DISPOSITION. 

(a) IN GENERAL.—Section 204(g) of the National Housing Act (12 U.S.C. 1710(g)) 

is amended—

(1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(2) The Secretary shall require, as a condition of eligibility of any nonprofit organization for participation in any program of the Secretary for disposition of 1- to 4-

family properties acquired by the Secretary pursuant to this Act, the Secretary shall 

require that such organization—

‘‘(A) has nonprofit status as demonstrated by approval under section 501(c)(3) 

of the Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)) or demonstrates that 

an application for such status is currently pending approval; and 

‘‘(B) provide the Secretary with a copy of the application for such status; 

‘‘(C) certify, on an annual basis, that the organization has been apprised of 

the applicable rules and guidelines of the Department of Housing and Urban 

Development and understands such rules and guidelines; and 

‘‘(D) comply with such other requirements as the Secretary may establish.’’. 

(b) ASSETS IN REVITALIZATION AREAS.—Paragraph (9)(D) of section 204(h) of the 

National Housing Act (12 U.S.C. 1710(h)(9)(D)), as so redesignated by the preceding 

provisions of this Act, is amended—

(1) by striking clause (ii) and inserting the following new clause: 

‘‘(ii)(I) has nonprofit status as demonstrated by approval under section 501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)) 

or demonstrates that an application for such status is currently pending approval; and 

‘‘(II) provides the Secretary with a copy of the application for such 

status;’’; 

(2) in clause (iii), by striking the period at the end and inserting ‘‘; and’’; and 

(3) by adding at the end the following new clause: 

‘‘(iv) certifies, on an annual basis, that the organization has been apprised of the applicable rules and guidelines of the Department of 

Housing and Urban Development and understands such rules and 

guidelines.’’. 

SEC. 230. EXTENSION OF HOLDING PERIOD. 

(a) IN GENERAL.—Section 912(1) of the Housing and Urban Development Act of 

1970 (12 U.S.C. 1709–2(1)) is amended by striking ‘‘one year’’ and inserting ‘‘18 

months’’. 

(b) APPLICABILITY.—The amendment made by subsection (a) shall apply only to 

defaults described in section 912(1) of the Housing and Urban Development Act of 

1970 that occur after the date of the enactment of this Act.

19

SEC. 231. PILOT PROGRAM FOR MANDATORY FIRST-TIME HOMEBUYER COUNSELING FOR 

PROPERTIES IN HIGH FORECLOSURE NEIGHBORHOODS. 

(a) IN GENERAL.—The Secretary shall carry out a pilot program under this section 

to determine whether, and the extent to which, requiring completion of a program 

(that is approved by the Secretary) of counseling with respect to the responsibilities 

and financial management involved in homeownership by any first-time homebuyers 

purchasing properties located in high foreclosure neighborhoods with mortgages insured under section 203 of the National Housing Act (12 U.S.C. 1709) will help to 

prevent defaults and foreclosures on such mortgages. 

(b) REQUIREMENT.—Notwithstanding any provision of paragraph (2) of section 

203(b) of the National Housing Act (12 U.S.C. 1709(b)(2)), under the pilot program, 

during the 1-year period beginning not later than 6 months after the date of the 

enactment of this Act, as selected by the Secretary, the Secretary may not insure, 

or enter into a commitment to insure, a mortgage under such section 203 that is 

executed by a first-time homebuyer for a property that is located in the pilot program area unless the mortgagor has completed a program of counseling with respect 

to the responsibilities and financial management involved in homeownership that 

is approved by the Secretary. 

(c) PILOT PROGRAM AREA.—The Secretary shall select a pilot program area for 

purposes of this section, which shall be a single limited area, within the jurisdiction 

of a single unit of general local government, for which the rate of foreclosure on residences subject to mortgages insured under such section 203 exceeds the lesser of—

(1) 150 percent of the national early default claim rate for such residences; 

and 

(2) the national early default claim rate for such residences located within the 

area served by a field office of the Department of Housing and Urban Development in whose area the pilot program area is located. 

(d) REPORT.—Not later than 30 months after the date of the enactment of this Act, 

the Secretary of Housing and Urban Development shall submit a report describing 

the effect of the requirement under subsection (b) on mortgage defaults and foreclosures and any other effects of such requirement, and making any recommendations regarding implementation of the requirement on a nationwide basis.

SEC. 232. DISPOSITION OF ASSETS IN REVITALIZATION AREAS. 

The Secretary of Housing and Urban Development shall continue to administer 

the Disposition of Assets in Revitalization Areas program as provided in section 602 

of Public Law 105–276 and the Secretary shall renew all contracts and enter into 

new contracts with eligible participants in a manner consistent with the requirements of such section. 

TITLE III—SUPPORTIVE HOUSING FOR 

ELDERLY AND DISABLED FAMILIES

SEC. 301. AUTHORIZATION OF APPROPRIATIONS FOR GRANTS FOR REPAIRS TO FEDERALLY 

ASSISTED HOUSING FOR THE ELDERLY. 

Section 202b of the Housing Act of 1959 (12 U.S.C. 1701q–2) is amended by striking subsection (h) and inserting the following new subsection: 

‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated 

for grants for capital repair activities under subsection (a)(1) and for grants for conversion activities under subsection (a)(2) such sums as may be necessary for each 

of fiscal years 2003 and 2004.’’. 

SEC. 302. SERVICE COORDINATORS FOR SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES. 

Section 683(2) of the Housing and Community Development Act of 1992 (42 

U.S.C. 13641(2)) is amended—

(1) in subparagraph (F), by striking ‘‘and’’ at the end; 

(2) in subparagraph (G), by striking the period at the end and inserting ‘‘; 

and’’; and 

(3) by adding at the end the following new subparagraph: 

‘‘(H) housing that is assisted under section 811 of the Cranston-Gonzalez 

National Affordable Housing Act (42 U.S.C. 8013).’’.

SEC. 303. DEMONSTRATION PROGRAM FOR ELDERLY HOUSING FOR INTERGENERATIONAL 

FAMILIES. 

(a) IN GENERAL.—The Secretary of Housing and Urban Development shall carry 

out a demonstration program to determine the feasibility of providing 

intergenerational dwelling units for intergenerational families in connection with 

20

the supportive housing program under section 202 of the Housing Act of 1959 (12 

U.S.C. 1701q). 

(b) INTERGENERATIONAL DWELLING UNITS.—Under the demonstration program, 

the Secretary shall provide assistance under this section to private nonprofit organizations (as such term is defined in section 202(k) of the Housing Act of 1959 (12 

U.S.C. 1701q(k)) for use only for expanding the supply of intergenerational dwelling 

units, which units shall be provided—

(1) by designating and retrofitting, for use as intergenerational dwelling 

units, existing dwelling units that are located within a project assisted under 

such section 202; 

(2) through development of buildings or projects comprised solely of 

intergenerational dwelling units; or 

(3) through the development of an annex or addition to such an existing 

project assisted under such section 202, which contains intergenerational dwelling units, including through the development of elder cottage housing opportunity units that are small, freestanding, barrier-free, energy-efficient, removable dwelling units located adjacent to a larger project or dwelling. 

(c) PROGRAM TERMS.—Assistance provided pursuant to this section shall be subject to the provisions of section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), 

except that—

(1) notwithstanding subsection (d)(1) of such section or any provision of such 

section restricting occupancy to elderly persons, any intergenerational dwelling 

unit assisted under the demonstration program may be occupied as provided in 

subsection (e)(2) of this section; 

(2) subsections (e) and (f) of such section 202 (relating to applications and selection criteria) shall not apply; 

(3) in addition to the requirements under subsection (g) of such section 202, 

the Secretary of Housing and Urban Development shall ensure that occupants 

of dwelling units assisted under the demonstration program are provided a 

range of services tailored to the needs of elderly persons, children, and 

intergenerational families and shall coordinate with the heads of other Federal 

agencies as may be appropriate to ensure the provision of such services; and 

(4) the Secretary may waive or alter any other provision of such section 202 

necessary to provide for assistance under the demonstration program under this 

section. 

(d) SELECTION.—The Secretary of Housing and Urban Development shall provide 

for private nonprofit organizations to submit applications for assistance under this 

section and, during the period consisting of fiscal years 2003 through 2006 shall, 

to the extent amounts are available pursuant to subsection (g), select not less than 

2 and not more than 4 projects assisted under section 202 of the Housing Act of 

1959 for such assistance based on the ability of the applicant to develop and operate 

intergenerational dwelling units and national geographical diversity among projects 

funded. 

(e) DEFINITIONS.—For purposes of this section: 

(1) ELDERLY PERSON.—The term ‘‘elderly person’’ has the meaning given such 

term in section 202(k) of the Housing Act of 1959 (12 U.S.C. 1701q(k)). 

(2) INTERGENERATIONAL DWELLING UNIT.—The term ‘‘intergenerational dwelling unit’’ means a qualified dwelling unit (as such term is defined in section 

8(x)(4) of the United States Housing Act of 1937 (42 U.S.C. 1437f(x)(4))) that 

is reserved for occupancy only by an intergenerational family. 

(3) INTERGENERATIONAL FAMILY.—The term ‘‘intergenerational family’’ means 

a covered family (as such term is defined in section 8(x)(4) of the United States 

Housing Act of 1937 (42 U.S.C. 1437f(x)(4))) that has a head of household who 

is an elderly person. 

(f) REPORT.—Not later than 36 months after the date of the enactment of this Act, 

the Secretary of Housing and Urban Development shall submit a report to the Congress describing the demonstration program under this section and analyzing the 

effectiveness of the program. 

(g) FUNDING.—Of any amounts made available for assistance under section 202 

of the Housing Act of 1959 (12 U.S.C. 1701q) for each of fiscal years 2003 through 

2006, the Secretary of Housing and Urban Development shall reserve amounts in 

such fiscal years as may be necessary to fund the demonstration projects selected 

under subsection (d). Such amounts shall be available for use only for providing assistance under this section.

SEC. 304. TREATMENT OF PROJECTS SUBJECT TO FORECLOSURE. 

(a) IN GENERAL.—In the case of any project assisted with a loan under section 202 

of the Housing Act of 1959 (12 U.S.C. 1701q), as in effect before the enactment of 

the Cranston-Gonzalez National Affordable Housing Act, notwithstanding any foreVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00020 Fmt 6659 Sfmt 6621 E:\HR\OC\HR640P2.107 HR640P2
21

closure on the loan, any use restrictions applicable to the project regarding occupancy by elderly or handicapped families or the maximum income of families occupying dwelling units in the project shall continue to apply after such foreclosure 

until the expiration of the original term of such loan. 

(b) INCOME LIMITS.—Notwithstanding subsection (a), in the case of a project assisted with a loan described in such subsection, after foreclosure on such loan any 

maximum income limit for a families occupying dwelling units in the project may 

be increased to not more than 80 percent of the median income for the area if such 

action is necessary to ensure the financial soundness of the project. 

(c) TRANSFER TO QUALIFIED NON-PROFIT ORGANIZATIONS.—In the case of the sale 

or other disposition of a project assisted with a loan described in subsection (a) pursuant to foreclosure on such loan, the Secretary of Housing and Urban Development 

shall provide a reasonable period during which only qualified nonprofit organizations (as such term is defined by the Secretary) shall have a right of first refusal 

to purchase the property. 

(d) REGULATIONS.—The Secretary of Housing and Urban Development shall issue 

any regulations necessary to carry out this section. 

TITLE IV—SECTION 8 RENTAL HOUSING 

ASSISTANCE PROGRAM 

SEC. 401. HOUSING VOUCHER DEMONSTRATION. 

(a) IN GENERAL.—For fiscal years 2003 and 2004, there is authorized to be appropriated to provide incremental assistance for project-based vouchers under section 

8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) the amount necessary 

to provide a total of 5,000 such incremental vouchers. Vouchers provided pursuant 

to this section shall be used exclusively for extremely low-income families in connection with dwelling units in newly constructed or substantially rehabilitated housing. 

(b) EXTREMELY LOW-INCOME FAMILIES.—For purposes of this section, the term 

‘‘extremely low-income families’’ means families (as such term is defined in section 

3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b))) whose incomes 

do not exceed the higher of—

(1) 30 percent of the area median income, as determined by the Secretary 

with adjustments for smaller and larger families and for unusually high or low 

family incomes; or 

(2) 30 percent of the national non-metropolitan median income. 

SEC. 402. FLEXIBILITY TO ASSIST HARD-TO-HOUSE FAMILIES. 

(a) IN GENERAL.—Section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 

1437f(o)) is amended by adding at the end the following new paragraph: 

‘‘(19) FLEXIBILITY TO ASSIST HARD-TO-HOUSE FAMILIES.—In any program year, 

a public housing agency that is not designated as troubled pursuant to the section 8 management assessment program, or under such other program as may 

be used by the Secretary to evaluate performance of public housing agencies in 

administering rental assistance under this section, may use up to 2 percent of 

any amounts allocated to the agency for such year for purposes that directly 

support the agency’s housing choice voucher program, including housing counseling, downpayment assistance under subsection (y), rental security deposits 

for families receiving voucher assistance, and other activities that directly assist 

eligible families in gaining and maintaining occupancy in suitable dwelling 

units.’’. 

(b) APPLICABILITY.—The amendment made by subsection (a) shall apply only with 

respect to amounts appropriated for fiscal year 2003 or any fiscal year thereafter. 

SEC. 403. CLARIFICATION ON PROHIBITION OF RE-SCREENING OF TENANTS. 

Section 8(t)(1) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)(1)) is 

amended—

(1) in subparagraph (C), by striking ‘‘and’’ at the end; 

(2) in subparagraph (D), by striking the period and inserting ‘‘; and’’; and 

(3) by adding at the end the following new subparagraph: 

‘‘(E) a family’s eligibility to receive such assistance shall be determined 

pursuant to the provisions of law authorizing or requiring the provision of 

enhanced voucher assistance pursuant to the eligibility event that affected 

such family and a family may not be required, as a condition of receiving 

such assistance, to qualify under the selection standards of a public housing 

agency for voucher assistance under this section.’’. 

22

SEC. 404. PHA ADMINISTRATIVE FEES. 

Section 8(q) of the United States Housing Act of 1937 (42 U.S.C. 1437f(q)) is 

amended— (1) by redesignating paragraph (4) as paragraph (5); and 

(2) by inserting after paragraph (3) the following new paragraph: 

‘‘(4) PERFORMANCE INCENTIVE.—For fiscal year 2003 and fiscal years thereafter, the Secretary may pay an additional fee to any public housing agency 

that succeeds in achieving high or substantially improved performance on specified program requirements or program goals, as established under the management assessment program for the rental assistance program under this section, 

or any successor assessment program for such assistance, or by regulation 

issued by the Secretary after notice and opportunity for public comment pursuant to the provisions of section 553 of title 5, United States Code (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section). The Secretary 

shall establish limitations on the total amount of any such additional fees paid 

to agencies for a fiscal year and on the amount of any such fee paid to any single agency for a fiscal year.’’. 

SEC. 405. ENSURING ABILITY TO USE ENHANCED VOUCHERS. 

Section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)) is 

amended—

(1) by redesignating paragraph (4) as paragraph (6); and 

(2) by inserting after paragraph (3) the following new paragraph: 

‘‘(5) RIGHT TO USE.—The owner of a multifamily housing project for which an 

eligibility event (as such term is defined in paragraph (2)) has occurred may not 

refuse—

‘‘(A) to accept enhanced voucher assistance for lease of a dwelling unit in 

the same project on behalf of a family who was residing in the project upon 

the occurrence of such eligibility event; or 

‘‘(B) to enter into a housing assistance payments contract for such a 

unit.’’. 

SEC. 406. TREATMENT OF OVERHOUSED ASSISTED FAMILIES. 

Paragraph (6) of section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 

1437f(o)(6)) is amended by adding at the end the following new subparagraph: 

‘‘(D) RESIDENCY IN INAPPROPRIATELY SIZED UNITS.—

‘‘(i) IN GENERAL.—If a public housing agency determines that a family 

assisted under this subsection is residing in a dwelling unit that, because of a reduction in family size after such assistance was initially 

provided for such family, has more bedrooms than is appropriate for a 

family of such size, the agency may not terminate the assistance for the 

family or require the family to move to another dwelling unit unless—

‘‘(I) the agency provides the family with a dwelling unit that is 

located in the same building or project as the inappropriately sized 

dwelling unit and is available for occupancy; or 

‘‘(II) in the case of a family residing in a dwelling unit in a building or project that does not contain any available dwelling unit 

having a number of bedrooms that is appropriate for size of such 

family, the agency provides the family with a dwelling unit that is 

located within the same neighborhood as the building containing 

the inappropriately sized dwelling unit. 

‘‘(ii) DETERMINATION OF NEIGHBORHOOD.—For purposes of clause 

(i)(II), the term ‘neighborhood’ means the immediate geographic area in 

which a building is located, which—

‘‘(I) is characterized by all locations within the area having a 

similar proximity to major roadways, mass transit facilities, and 

other means of transportation, schools, child care facilities, workplace centers, and grocery stores and other retail and commercial 

facilities; and 

‘‘(II) shall be determined by the public housing agency involved, 

in consultation with the appropriate resident advisory board established pursuant to section 5A(e). 

‘‘(iii) TREATMENT OF STUDENTS.—For purposes of clause (i), the absence of a child or adult from a dwelling because of temporary residence in another location for the purpose of attending school on a fullor part-time basis shall not be considered in determining family size.’’. 

SEC. 407. EXTENSION OF MANUFACTURED HOUSING DEMONSTRATION PROGRAM. 

Section 557 of the Quality Housing and Work Responsibility Act of 1998 (Public 

Law 105–276; 112 Stat. 2613) is amended—

23

(1) in subsection (a), by striking ‘‘1999, 2000, and 2001’’ and inserting ‘‘2002, 

2003, and 2004’’; and 

(2) in subsection (c)— (A) by striking ‘‘REPORT’’ and inserting ‘‘REPORTS’’; 

(B) by striking ‘‘a report’’ and inserting ‘‘an interim report’’; 

(C) by striking ‘‘and evaluating’’ and inserting ‘‘the implementation and 

operation of’’; and 

(D) by adding at the end the following new sentence: ‘‘Not later than 

March 31, 2005, the Secretary shall submit a report to the Congress describing and evaluating the demonstration program under this section.’’. 

SEC. 408. EXTENSION OF PROJECT-BASED SECTION 8 CONTRACT RENEWALS. 

(a) RENEWAL OF EXPIRING PROJECT-BASED SECTION 8 CONTRACTS.—Section 524 of 

the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 

1437f note) is amended— (1) in subsection (a)(4)(A)(iv)— (A) in subclause (I), by inserting ‘‘or’’ after the semicolon; 

(B) by striking subclause (II); and 

(C) by redesignating subclause (III) as subclause (II); and 

(2) by striking paragraph (3) of subsection (b). 

(b) ADJUSTMENTS FOR COVERED PROJECTS.— (1) RENT DETERMINATION AT INITIAL RENEWAL AFTER ENACTMENT.—Upon the 

first request for renewal of project-based assistance pursuant to section 524 

after the date of enactment of this Act by an owner of a covered housing 

project—

(A) the rent levels at which assistance will be provided pursuant to such 

renewal will be determined as if such renewal were the initial renewal of 

a contract for assistance under section 524, as amended by subsection (a) 

of this section; and 

(B) solely for purposes of determining the rent levels at which assistance 

will be provided pursuant to such first renewal after the date of enactment 

of this Act, in the case of a project for which contract rents were reduced 

on a prior renewal of an expiring contract pursuant to subsection (b)(3) of 

section 524, as in effect on the day before the date of enactment of this Act, 

the contract rent levels in effect immediately prior to such first renewal 

after the date of enactment of this Act shall be considered to be the deemed 

rent levels described in paragraph (3)(C). 

(2) RENT ADJUSTMENTS AFTER INITIAL RENEWAL AFTER ENACTMENT.—After the 

first renewal of a contract for assistance of a covered project after the date of 

enactment of this Act in accordance with paragraph (1) of this subsection, the 

Secretary shall adjust rents in accordance with section 524(c). 

(3) DEFINITIONS.—In this subsection—

(A) references to ‘‘section 524’’ or any subdivision thereof are references 

to section 524 of the Multifamily Assisted Housing Reform and Affordability 

Act of 1997 (42 U.S.C. 1437f note); 

(B) the term ‘‘covered housing project’’ means a project that receives 

project-based assistance under section 8 of the United States Housing Act 

of 1937 (42 U.S.C. 1437f) which was renewed prior to the date of enactment 

of this Act pursuant to subsection (b)(3) of section 524, as in effect on the 

day before the date of enactment of this Act; 

(C) the term ‘‘deemed rent levels’’ means the contract rent levels in effect 

immediately prior to the first renewal of assistance pursuant to subsection 

(b)(3) of section 524, as in effect on the day before the date of enactment 

of this Act, upon which contract rent levels were reduced, as adjusted by 

the applicable operating cost adjustment factor established by the Secretary 

at the date of such renewal and at the date of any subsequent renewal pursuant to subsection (b)(3) of section 524 occurring before the date of enactment of this Act; and 

(D) the term ‘‘Secretary’’ means the Secretary of Housing and Urban Development. 

SEC. 409. INSPECTION OF UNITS. 

Section 8(o)(8) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(8)) 

is amended—

(1) in subparagraph (A)—

(A) by striking ‘‘(A) IN GENERAL.—Except as provided in paragraph (11),’’

and inserting the following: 

‘‘(A) GENERAL RULE.—

‘‘(i) IN GENERAL.—Except as provided in clause (ii) and paragraph 

(11),’’; and 

24

(B) by inserting at the end the following: 

‘‘(ii) EXCEPTION.—A public housing agency may commence payments 

to an owner, if the public housing agency—

‘‘(I) has conducted an inspection of the building, which includes 

an inspection of a reasonable number of units in the 6 months 

prior to the date on which payment is made to the owner, and that 

inspection and any subsequent unit inspections have not turned up 

major deficiencies; 

‘‘(II) conducts an inspection of the unit for which the payment is 

being made not later than 30 days after the date for which payment is made to the owner; and 

‘‘(III) has an agreement with the owner to correct any deficiencies and make any repairs in the unit not later than 30 days 

after the date on which the inspection was made under subclause 

(II).’’; and 

(2) in subparagraph (D)—

(A) by striking ‘‘(D) ANNUAL INSPECTIONS.—Each’’ and inserting the following: 

‘‘(D) ANNUAL INSPECTIONS.—

‘‘(i) IN GENERAL.—Except as provided in clause (ii), each’’; and 

(B) by adding at the end the following: 

‘‘(ii) EXCEPTION.—If a public housing agency has a large jurisdiction 

and is conducting inspections on a geographical basis, the public housing agency may comply with the annual inspection requirement by inspecting the unit within 9 to 15 months of the previous inspection.’’.

SEC. 410. ESCROW OF TENANT RENT IN CASES OF OWNER FAILURE TO MAINTAIN UNIT. 

Section 8(o)(8) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(8)) 

is amended by adding at the end the following new subparagraph: 

‘‘(F) ESCROW OF TENANT RENT IN CASES OF OWNER FAILURE TO MAINTAIN

UNIT.—Each housing assistance payment contract under this subsection 

shall provide as follows: 

‘‘(i) REQUIREMENT.—In any case in which a public housing agency 

suspends assistance payments under this subsection with respect to a 

dwelling unit because of a failure on the part of the owner of the unit 

to maintain the unit in compliance with the housing quality standards 

established pursuant to this paragraph, the agency shall—

‘‘(I) require the tenant to suspend payment to the owner of the 

tenant’s monthly contribution toward rent and require the tenant 

to pay such amount into an escrow account established by the 

agency; and 

‘‘(II) notify the tenant and the owner of the failure to maintain 

the unit in compliance with such housing quality standards and of 

the actions required under this subparagraph. 

‘‘(ii) CORRECTION OF NONCOMPLIANCE.—If the owner corrects the noncompliance within the period of time established by the agency for such 

purpose, the public housing agency shall release to the owner any tenant payments toward rent deposited in the escrow account. 

‘‘(iii) FAILURE TO CORRECT NONCOMPLIANCE.—If the owner fails to correct the noncompliance within the period of time established by the 

agency and the tenant moves from the dwelling unit because of such 

noncompliance, the public housing agency shall make the any tenant 

payments toward rent that are deposited in the escrow account available on behalf of the tenant upon such move for costs of the move and 

for rental of a new dwelling unit.’’. 

SEC. 411. PROJECT-BASED VOUCHERS MODIFICATIONS. 

(a) IN GENERAL.—Section 8(o)(13) of the United States Housing Act of 1937 (42 

U.S.C. 1437f(o)(13)) is amended—

(1) in subparagraph (C)(ii), by inserting before the period at the end the following: ‘‘, revitalizing a low-income community, or preventing the displacement 

of extremely low-income families’’; 

(2) in subparagraph (D)(ii), by striking ‘‘apply in the case of’’ and all that follows through the period and inserting the following: ‘‘apply—

‘‘(I) in the case of assistance under a contract for housing consisting of single family properties (buildings with 1 to 4 units); 

‘‘(II) for dwelling units that are specifically made available for 

households comprised of elderly families or disabled families; or 

25

‘‘(III) outside of a qualified census tract, for buildings with 5 to 

25 units or with dwelling units that are specifically made available 

for families receiving supportive services. 

For purposes of this clause, the term ‘qualified census tract’ has the 

same meaning given that term in section 42(d) of the Internal Revenue 

Code of 1986 (26 U.S.C. 42(d)). The Secretary may waive the limitations of this clause, consistent with the obligation to affirmatively further fair housing practices.’’; 

(3) in subparagraph (F), by striking ‘‘10 years’’ and inserting ‘‘15 years’’; 

(4) in subparagraph (J)—

(A) in the first sentence, by inserting before the period the following: ‘‘, 

or from 1 or more separate project-based waiting lists established and 

maintained in accordance with subparagraph (K). A public housing agency 

may permit an owner to select families from a waiting list for units assisted 

under this paragraph maintained by the owner in accordance with subparagraph (L). Regardless of whether a waiting list is maintained under this 

subparagraph or under subparagraph (K) or (L), families shall initially be 

selected from the public housing agency’s waiting list for assistance under 

this subsection for at least 1⁄2 of the vacant units in a building made available with assistance under this paragraph, unless the units are restricted, 

under the tenant selection preferences adopted under the annual plan submitted by the public housing agency to the Secretary pursuant to section 

5A(b), to occupancy by persons who are receiving intensive publicly funded 

services and who have a disability, as defined in section 3 of this Act or 

section 422 of the McKinney-Vento Homeless Assistance Act’’; 

(B) in the fifth sentence, by inserting before the period the following: ‘‘, 

unless the owner maintains a waiting list under subparagraph (L)’’; and 

(C) in the last sentence, by striking ‘‘and may maintain’’ and all that follows through ‘‘on the separate list’’; 

(5) by redesignating subparagraph (K) as subparagraph (M); and 

(6) by inserting after subparagraph (J) the following: 

‘‘(K) PUBLIC HOUSING AGENCY WAITING LIST.—

‘‘(i) IN GENERAL.—A public housing agency may select families for assistance—

‘‘(I) under subparagraph (J); 

‘‘(II) under this subparagraph for each property that receives assistance under this paragraph; or 

‘‘(III) under this subparagraph for similar properties that receive 

assistance under this paragraph. 

‘‘(ii) REQUIREMENTS.—A public housing agency that maintains a separate waiting list under this subparagraph—

‘‘(I) shall provide notice of the opening of the waiting list in the 

same manner required by the Secretary for the provision of notice 

of the opening of the waiting list for tenant-based assistance under 

this subsection, except that this subclause shall not apply to units 

assisted under this paragraph that are restricted, under tenant selection preferences adopted under the annual plan submitted by 

the public housing agency to the Secretary pursuant to section 

5A(b) to occupancy by persons who are receiving intensive publicly 

funded services and who have a disability, as defined in section 3 

of this Act or section 422 of the McKinney-Vento Homeless Assistance Act; 

‘‘(II) shall give preference to families on its tenant-based waiting 

list, if families are applying at the equivalent time and date with 

otherwise equivalent preference under the annual plan submitted 

by the public housing agency to the Secretary pursuant to section 

5A(b); and 

‘‘(III) shall notify families that are applying for tenant-based assistance of the opportunity to be listed on the waiting list maintained under this subparagraph. 

‘‘(L) OWNER WAITING LIST.—

‘‘(i) IN GENERAL.—A public housing agency may allow an owner of a 

structure with a contract for assistance under this paragraph to maintain a waiting list for units assisted under this paragraph. 

‘‘(ii) AGENCY PLAN.—The policy for a waiting list maintained under 

this subparagraph and any applicable preferences or selection criteria 

shall be included in the annual plan submitted by the public housing 

agency to the Secretary in accordance with section 5A(b). 

26

‘‘(iii) AGENCY RESPONSIBILITIES.—If a waiting list is maintained 

under this subparagraph, the public housing agency shall— ‘‘(I) provide notice of the opening of the waiting list in the same 

manner and to the same extent as is required of the agency under 

subparagraph (K)(ii)(I); ‘‘(II) notify families that apply for tenant-based assistance of the 

opportunity to be listed on that waiting list; ‘‘(III) establish a mechanism to transmit applications submitted 

at its office to the owner for placement on that waiting list; and ‘‘(IV) monitor, at reasonable intervals, the compliance by the 

owner with laws applicable to tenant selection and waiting lists, including civil rights laws, regulations, and certifications. ‘‘(iv) OWNER RESPONSIBILITIES.—If a waiting list is maintained under 

this subparagraph, the owner of the structure shall— ‘‘(I) provide notice of the opening of the waiting list (unless the 

public housing agency agrees to provide such notice for the owner, 

or notice is not required pursuant to clause (iii)(I)) and provide 

preference to families on the tenant-based waiting list of the public 

housing agency in the same manner as is required under subparagraph (K); ‘‘(II) place on its waiting list, families that apply at an office of 

the agency that accepts applications for tenant-based assistance; 

‘‘(III) cooperate with requests of the public housing agency for information concerning the waiting list and the tenant selection decisions of the owner; and 

‘‘(IV) submit written tenant selection policies and criteria to the 

public housing agency for approval, and make those policies and 

criteria available to the public. 

‘‘(v) RIGHT TO INFORMAL REVIEW.—A family that is denied a unit by 

an owner that maintains a waiting list under this subparagraph shall 

have the same rights to informal review by a public housing agency as 

a family that is denied tenant-based assistance by a public housing 

agency, and such review shall be performed expeditiously so as not to 

impede the timely rental of units. The public housing agency’s review 

at the informal hearing shall be limited to determining if the owner, 

if denying admission, followed applicable law and the procedures and 

criteria adopted by the owner and approved by the public housing agency for determining the eligibility of applicants for admission. 

‘‘(vi) APPLICABILITY.—Except as provided in this subparagraph, a 

waiting list maintained by an owner shall be considered to be a waiting 

list maintained by a public housing agency for assistance under this 

subsection. 

‘‘(vii) LIMITATION OF LIABILITY.—No right of action shall exist against 

a public housing agency with respect to an owner’s violation of any applicable law, unless the agency has actual knowledge that such violation has occurred or is occurring and—

‘‘(I) the agency has failed to take action to cause the owner to 

cease such violation; or 

‘‘(II) the public housing agency has failed to comply with its responsibilities under clause (iii).’’; and 

(7) by adding at the end the following: 

‘‘(N) FAIR HOUSING, SUBSIDY LAYERING, AND COMPETITIVE SELECTION REQUIREMENTS.—A public housing agency may attach assistance under this 

paragraph to units without specific approval by the Secretary of compliance 

with fair housing, subsidy layering, or competitive selection requirements, 

if—

‘‘(i) for fair housing compliance, the units proposed to receive assistance under this paragraph receive a grant or a loan under a Federal 

program pursuant to which the Secretary, or a designee of the Secretary, has determined in accordance with regulations that the site location would meet applicable civil rights and fair housing requirements; 

‘‘(ii) for compliance with subsidy layering requirements, consistent 

with the written policy of the Secretary, the public housing agency or 

another public agency has determined that addition of subsidies under 

this paragraph would not duplicate other public funding; or 

‘‘(iii) for compliance with competitive selection requirements, an advertisement for capital funds announced the potential for availability of 

assistance under this paragraph. 

27

‘‘(O) USE OF ASSISTANCE IN CONJUNCTION WITH PUBLIC HOUSING CAPITAL

FUNDS.—

‘‘(i) CAPITAL FUND AND HOPE VI.—Notwithstanding any provision to 

the contrary in this Act, a public housing agency may attach assistance 

under this paragraph to a structure or unit that receives assistance allocated to the public housing agency under the Capital Fund, established by section 9(d), or under section 24. 

‘‘(ii) OPERATING FUND.—A unit that receives assistance under this 

paragraph shall not be eligible for assistance under the Operating 

Fund established by section 9(e).’’. 

(b) EFFECTIVE DATE.—

(1) IN GENERAL.—This section and the amendments made by this section shall 

take effect upon the date of enactment of this Act (with such minor exceptions 

as the Secretary may specify). 

(2) RULES.—The Secretary shall promulgate rules, as may be necessary, to 

carry out section 8(o)(13) of the United States Housing Act of 1937 (42 U.S.C. 

1437f(o)(13)), as amended by this Act, and shall publish—

(A) proposed rules not later than 6 months after the date of enactment 

of this Act; and 

(B) final rules not later than 1 year after the date of enactment of this 

Act.

SEC. 412. EXPANDED USE OF ENHANCED VOUCHERS. 

(a) IN GENERAL.—Section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 

1437f(t)), as amended by the preceding provisions of this title, is further amended—

(1) in paragraph (1), in the matter preceding subparagraph (A), by striking 

‘‘Enhanced’’ and inserting ‘‘Except as provided in paragraph (2), enhanced’’; and 

(2) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and 

(3) by inserting after paragraph (1) the following new paragraph: 

‘‘(2) ENHANCED VOUCHERS FOR RESIDENTS OF UNITS NOT AVAILABLE FOR CONTINUED RENTAL.—

‘‘(A) VOUCHER ASSISTANCE.—In the case of a family who is eligible for enhanced voucher assistance under this subsection and who, on the date of 

the eligibility event resulting in such family’s eligibility, is residing in a 

dwelling unit that is unavailable for continued rental as provided in subparagraph (B) as a result of such event, enhanced voucher assistance under 

this subsection for the family shall be voucher assistance under subsection 

(o), except that under such enhanced voucher assistance—

‘‘(i) subject only to clause (iv), the assisted family shall pay as rent 

no less than the amount the family was paying on the date of the eligibility event for the project; 

‘‘(ii) the assisted family may elect to reside in any other dwelling unit 

that is located within the zip code in which is located the project in 

which the family was residing on the date of the eligibility event for 

the project or within a zip code contiguous to such zip code, and if, during any period after such election that the family continues to reside, 

the rent for the dwelling unit of the family exceeds the applicable payment standard established pursuant to subsection (o) for the unit, the 

amount of rental assistance provided on behalf of the family shall be 

determined using a payment standard that is equal to the rent for the 

dwelling unit (as such rent may be increased from time-to-time), except 

that—

‘‘(I) such rent shall be subject to paragraph (10)(A) of subsection 

(o); 

‘‘(II) such payment standard shall not exceed the greater of 150 

percent of the applicable fair market rents or 150 percent of the 

applicable payment standard for the market area; and 

‘‘(III) subject only to the limit in subclause (II), such payment 

standard shall not adversely affect such assisted families; 

‘‘(iii) clause (ii) of this subparagraph shall not apply and the payment 

standard for the dwelling unit occupied by the family shall be determined in accordance with subsection (o) if—

‘‘(I) the assisted family moves, at any time, to a dwelling unit 

that is not located within (aa) the zip code within which is located 

the project in which the family was residing on the date of the eligibility event for the project, or (bb) a zip code contiguous to such 

zip code; or 

28

‘‘(II) the voucher is made available for use by any family other 

than the original family on behalf of whom the voucher was provided; and 

‘‘(iv) if the income of the assisted family declines to a significant extent, the percentage of income paid by the family for rent shall not exceed the greater of 30 percent or the percentage of income paid at the 

time of the eligibility event for the project. 

‘‘(B) UNAVAILABILITY DUE TO CONVERSION.—A dwelling unit shall be considered to be unavailable for continued rental as provided in this subparagraph if the eligibility event for the project occurs in connection with a conversion of the unit to condominium, cooperative, or commercial use, after 

having obtained all necessary land use approvals.’’.

(b) APPLICABILITY.—No funds for enhanced vouchers under section 8(t)(2) of the 

United States Housing Act of 1937 (42 U.S.C. 1437f(t)(2)), as added by the amendments made by subsection (a) of this section, shall be provided from amounts appropriated for fiscal years prior to fiscal year 2003. 

(c) REGULATIONS.—Not later than 180 days after the date of the enactment of this 

Act, the Secretary shall issue regulations necessary to carry out the amendment 

made by subsection (a).

SEC. 413. DEMONSTRATION PROGRAM FOR RENTAL ASSISTANCE FOR GRANDPARENT-HEADED OR RELATIVE-HEADED FAMILIES. 

(a) IN GENERAL.—The Secretary of Housing and Urban Development shall carry 

out a demonstration program to determine the feasibility of providing rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) 

for the rental of suitable dwelling units by covered families. 

(b) ELIGIBLE UNITS.—Under the demonstration program, the Secretary shall make 

rental assistance amounts reserved pursuant to subsection (f) of this section available to public housing agencies selected to participate in the program for use only 

for assistance on behalf of covered families renting qualified dwelling units. Such 

a public housing agency may not initially provide voucher assistance under this section for any family after the end of fiscal year 2006. 

(c) SERVICES.—The Secretary of Housing and Urban Development shall require 

any public housing agency participating in the demonstration program under this 

section to ensure that families receiving rental assistance pursuant to this section 

are provided with supportive services that are tailored to the needs of children and 

covered families. The Secretary shall coordinate with the heads of other Federal 

agencies as may be appropriate to assist in ensuring the provision of such services. 

(d) SELECTION.—The Secretary of Housing and Urban Development shall provide 

for public housing agencies to apply to participate in the demonstration program 

under this section and, during the period consisting of fiscal years 2003 through 

2006 shall, to the extent amounts are available pursuant to subsection (f), select not 

less than two and not more than four agencies for such participation based on the 

ability of the applicant to provide assistance and services under the program and 

national geographical diversity among agencies participating in the program. 

(e) REPORT.—Not later than 18 months after the date of the enactment of this Act, 

the Secretary of Housing and Urban Development shall submit a report to the Congress describing the demonstration program under this section and analyzing the 

effectiveness of the program. 

(f) FUNDING.—Of any amounts made available for voucher assistance under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) for fiscal year 

2003 and fiscal years thereafter, the Secretary of Housing and Urban Development 

shall reserve such amounts in such fiscal years as may be necessary to provide 

voucher assistance for the agencies selected under subsection (d) for use only for 

providing assistance under this section. 

SEC. 414. ELIGIBILITY OF GRANDPARENT-HEADED AND RELATIVE-HEADED FAMILIES FOR 

FAMILY UNIFICATION ASSISTANCE. 

Section 8(x) of the United States Housing Act of 1937 (42 U.S.C. 1437f(x)) is 

amended—

(1) in paragraph (2)—

(A) by striking ‘‘section 8’’ and inserting ‘‘this section’’; 

(B) by striking ‘‘and’’ before ‘‘(B)’’ and inserting a comma; and 

(C) by inserting before the period at the end the following: ‘‘, or (C) a covered family, who is otherwise eligible for such assistance, for rental of a 

qualified dwelling unit’’; 

(2) in the second sentence of paragraph (3)—

(A) by inserting ‘‘, as appropriate (A)’’ after ‘‘containing’’; and 

29

(B) by inserting before the period at the end the following: ‘‘, or (B) a description of the need for assistance under this subsection for covered families’’; and 

(3) in paragraph (4), by adding at the end the following new subparagraphs: 

‘‘(C) CHILD.—The term ‘child’ means an individual who—

‘‘(i) is not attending school and is not more than 18 years of age; or 

‘‘(ii) is attending school and is not more than 19 years of age. 

‘‘(D) COVERED FAMILY.—The term ‘covered family’ means a family that—

‘‘(i) includes a child; and 

‘‘(ii) has a head of household who is—

‘‘(I) a grandparent of the child who is raising the child; or 

‘‘(II) a relative of the child who is raising the child. 

‘‘(E) GRANDPARENT.—The term ‘grandparent’ means, with respect to a 

child, an individual who is a grandparent or stepgrandparent of the child 

by blood or marriage, regardless of the age of such individual. In the case 

of a child who was adopted, the term includes an individual who, by blood 

or marriage, is a grandparent or stepgrandparent of the child as adopted. 

‘‘(F) QUALIFIED DWELLING UNIT.—The term ‘qualified dwelling unit’

means a dwelling unit that—

‘‘(i) has at least 2 separate bedrooms; 

‘‘(ii) is equipped with design features appropriate to meet the special 

physical needs of elderly persons, as needed; and 

‘‘(iii) is equipped with design features appropriate to meet the special 

physical needs of young children. 

‘‘(G) RAISING A CHILD.—The term ‘raising a child’ means, with respect to 

an individual, that the individual—

‘‘(i) resides with the child; and 

‘‘(ii) is the primary caregiver for the child—

‘‘(I) because the biological or adoptive parents of the child do not 

reside with the child or are unable or unwilling to serve as the primary caregiver for the child; and 

‘‘(II) regardless of whether the individual has a legal relationship 

to the child (such as guardianship or legal custody) or is caring for 

the child informally and has no such legal relationship with the 

child. 

‘‘(H) RELATIVE.—The term ‘relative’ means, with respect to a child, an individual who—

‘‘(i) is not a parent of the child by blood or marriage; and 

‘‘(ii) is a relative of the child by blood or marriage, regardless of the 

age of the individual. 

In the case of a child who was adopted, the term includes an individual 

who, by blood or marriage, is a relative of the family who adopted the 

child.’’.

SEC. 415. INCREASED PAYMENT STANDARD. 

Section 8(o)(1)(D) of the United States Housing Act of 1937 (42 U.S.C. 

1437f(o)(1)(D)) is amended—

(1) by striking ‘‘(D) APPROVAL.—The’’ and inserting the following: 

‘‘(D) EXCEPTION PAYMENT STANDARDS.—

‘‘(i) APPROVAL.—The’’; and 

(2) by adding at the end the following: 

‘‘(ii) INCREASED PAYMENT STANDARD.—A public housing agency may 

establish a payment standard for the same size dwelling unit in a market area or portion of a market area between 110 and 120 percent of 

the fair market rent, if the payment standard for the market area or 

portion of a market area has been set at 110 percent or above for the 

6 months prior to the establishment of the new payment standard and 

the public housing agency determines that it has—

‘‘(I) a voucher success rate (the proportion of families that are 

issued a voucher that succeed in leasing a unit within the timeframe provided by the public housing agency to search for housing) 

of not more than 80 percent or has provided an extended search 

time of not less than 90 days to a significant number of voucher 

recipients; or 

‘‘(II) problems with concentration of the voucher holders in high 

poverty areas. 

‘‘(iii) DISABILITY ACCOMMODATION.—A public housing agency may establish a payment standard of not more than 120 percent of the fair 

market rent where necessary as a reasonable accommodation for a perVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00029 Fmt 6659 Sfmt 6621 E:\HR\OC\HR640P2.107 HR640P2
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son with a disability, without approval of the Secretary. A public housing agency may seek approval of the Secretary to use a payment standard greater than 120 percent of the fair market rent as a reasonable 

accommodation for a person with a disability. ‘‘(iv) SECRETARY APPROVAL.—A public housing agency may establish 

a payment standard in accordance with clause (ii) without approval of 

the Secretary, if the public housing agency includes in its annual plan 

that is submitted to the Secretary pursuant to section 5A(b)— ‘‘(I) the reasons for the increase in the payment standard; 

‘‘(II) a description of how and why the public housing agency has 

determined that it meets the requirements of clause (ii); and ‘‘(III) a description of other steps the public housing agency is 

taking, in addition to increasing the payment standard, to address 

the problems of voucher utilization, voucher success rates (the proportion of families that are issued a voucher that succeed in leasing 

a unit within the timeframe provided by the public housing agency 

to search for housing), and concentration of voucher holders. ‘‘(v) APPLICABILITY.—Clauses (ii) through (iv) shall apply with respect 

only to amounts made available for rental assistance under this subsection for fiscal year 2004 and fiscal years thereafter.’’.

SEC. 416. PROTECTION OF INNOCENT TENANTS. 

Clause (iii) of section 8(d)(1)(B) of the United States Housing Act of 1937 (42 

U.S.C. 1437f(d)(1)(B)(iii)) is amended by inserting before the semicolon at the end 

the following: ‘‘; except that such criminal activity, engaged in by a member of a 

tenant’s household or any guest or other person under the tenant’s control, shall not 

be cause for termination of tenancy of the tenant if the tenant or immediate member of the tenant’s family is a victim of domestic violence or dating violence and, 

as a result, could not control or prevent the criminal activity relating to domestic 

violence or dating violence; and except that nothing in this clause may be construed 

to limit the authority of a public housing agency to evict individuals who engage 

in criminal acts of physical violence against family members or others, and in all 

cases, a public housing agency shall consider the safety, security, and continued 

maintenance of victims of domestic violence to be of paramount importance’’. 

TITLE V—PUBLIC HOUSING 

Subtitle A—General Provisions 

SEC. 501. PHA JOINT VENTURES. 

Section 13(b) of the United States Housing Act of 1937 (42 U.S.C. 1437k(b)) is 

amended by adding at the end the following new paragraph: ‘‘(4) NON-FEDERAL FUNDS AND ACTIVITIES.—This subsection shall not apply to 

any subsidiary, joint venture, partnership, or business arrangement, or any activity conducted by such an entity, that does not involve holding or expending 

funds received from the Federal Government or proceeds or income derived 

from such funds.’’. 

SEC. 502. THIRD-PARTY PUBLIC HOUSING ASSESSMENT SYSTEM. 

(a) ESTABLISHMENT.—The Secretary of Housing and Urban Development shall 

provide for the development of a third-party assessment system for evaluating the 

performance of public housing agencies, in accordance with this section. 

(b) PURPOSES.—The assessment system developed under this section shall— (1) provide an objective assessment of the overall performance of public housing agencies in all major areas of management operations and in discharging 

their obligations under the United States Housing Act of 1937; 

(2) identify quantifiable areas of the management and financial condition of 

public housing agencies; and 

(3) determine the physical condition of public housing dwelling units to ensure that they are maintained in accordance with the requirements pursuant 

to the United States Housing Act of 1937. 

(c) TESTING AND PROTOTYPE.— (1) IN GENERAL.—Not later than 120 days after the date of the enactment of 

this Act, to the extent amounts are made available to carry out this section, the 

Secretary of Housing and Urban Development shall enter into a contract with 

a public entity or a private for-profit or nonprofit entity to develop a system prototype for the third-party assessment system required under this section and to 

test such prototype. Such contract shall require such entity to submit the protoVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00030 Fmt 6659 Sfmt 6621 E:\HR\OC\HR640P2.107 HR640P2
31

type assessment system to the Congress not later than the expiration of the 6-

month period beginning upon execution of the contract and to complete such 

testing not later than the expiration of the 12-month period beginning upon execution of the contract. 

(2) CONSULTATION.—In carrying out the testing and prototype development 

under this subsection, the entity selected under this subsection shall consult 

with individuals and organizations experienced in managing public housing and 

their representatives, private real estate managers, representatives from State 

and local governments, residents of public housing, and the Secretary. 

(d) REPORT.—Not later than the expiration of the 12-month period beginning upon 

execution of the contract referred to in subsection (c)(1), the Secretary of Housing 

and Urban Development shall submit to the Congress a report describing the results 

and recommendations regarding the testing of the prototype assessment system conducted pursuant to this subsection, which shall include any comments and recommendations of the persons and entities consulted with pursuant to subsection 

(c)(2) and any recommendations regarding the replacement of the public housing 

management assessment system established under section 6(j) of the United States 

Housing Act of 1937 (42 U.S.C. 1437d(j)). 

(e) RULE OF CONSTRUCTION.—This section may not be construed to—

(1) provide for or require the implementation of the third-party assessment 

system developed pursuant to this section; or 

(2) alter, affect, suspend, terminate, or delay the effectiveness or applicability 

of the public housing assessment system under section 6(j) of the United States 

Housing Act of 1937 (42 U.S.C. 1437d(j)) or any regulations issued, or to be 

issued, pursuant to such section. 

SEC. 503. PUBLIC HOUSING AGENCY PLANS FOR CERTAIN SMALL PUBLIC HOUSING AGENCIES. 

(a) IN GENERAL.—Section 5A(b) of the United States Housing Act of 1937 (42 

U.S.C. 1437c–1(b)) is amended by adding at the end the following new paragraph: 

‘‘(3) SUSPENSION OF FILING REQUIREMENT FOR CERTAIN SMALL PHAS.—

‘‘(A) IN GENERAL.—Notwithstanding paragraph (1) or any other provision 

of this Act—

‘‘(i) the requirement under paragraph (1) shall not apply to any qualified small public housing agency for fiscal years 2003, 2004, or 2005; 

and 

‘‘(ii) any reference in this section or any other provision of law to a 

‘public housing agency’ shall not be considered to refer to any qualified 

small public housing agency for such fiscal years, to the extent such 

reference applies to the requirement to submit a public housing agency 

plan under subsection (b). 

‘‘(B) DEFINITION.—For purposes of this paragraph, the term ‘qualified 

small public housing agency’ means a public housing agency that meets all 

of the following requirements: 

‘‘(i) The sum of (I) the number of public housing dwelling units administered by the agency, and (II) the number of vouchers under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) 

administered by the agency, is 100 or fewer. 

‘‘(ii) The agency is not designated pursuant to section 6(j)(2) as a 

troubled public housing agency. 

‘‘(iii) The agency provides assurances satisfactory to the Secretary 

that, during fiscal years 2003, 2004, and 2005, notwithstanding the inapplicability of the requirements under section 5A relating to resident 

advisory boards and public hearings and notice, residents of public 

housing administered by the agency will have an adequate and comparable opportunity for participation and notice regarding establishment of the goals, objectives, and policies of the public housing agency.’’. 

(b) REPORT.—Not later than September 30, 2004, the Comptroller General of the 

United States shall submit a report to the Congress describing and analyzing the 

administrative, financial, and other burdens that would be imposed on public housing agencies described in section 5A(b)(3)(B)(i) of the United States Housing Act of 

1937 (42 U.S.C. 1437c–1(b)(3)(B)(i)), as amended by subsection (a) of this section, 

if such agencies were required to comply fully with the requirements under section 

5A(b)(1) of such Act.

SEC. 504. AFFORDABLE ASSISTED LIVING FACILITIES DEMONSTRATION PROGRAM. 

Title I of the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended by adding at the end the following new section: 

32

‘‘SEC. 36. DEMONSTRATION PROGRAM FOR GRANTS FOR CONVERSION OF PUBLIC HOUSING 

TO ASSISTED LIVING FACILITIES. 

‘‘(a) GRANT AUTHORITY.—To the extent only that amounts are appropriated in advance to carry out this section, the Secretary shall carry out a program, in accordance with this section, to demonstrate the effectiveness of making grants to public 

housing agencies for use for activities designed to convert dwelling units in eligible 

projects described in subsection (b) to assisted living facilities or other facilities that 

expand the availability of supportive services, to enhance the ability of elderly persons to maintain independent living. ‘‘(b) ELIGIBLE PROJECTS.—An eligible project described in this subsection is a public housing project (or a portion thereof) that is primarily occupied by elderly persons. ‘‘(c) APPLICATIONS.—Applications for grants under the demonstration program 

under this section shall be submitted to the Secretary in accordance with such procedures as the Secretary shall establish. Such applications shall contain— ‘‘(1) a description of the proposed conversion activities for which a grant under 

the program is requested; ‘‘(2) the amount of the grant requested; 

‘‘(3) a description of the resources that are expected to be made available, if 

any, in conjunction with the grant under the program; and ‘‘(4) such other information or certifications that the Secretary determines to 

be necessary or appropriate. ‘‘(d) FUNDING FOR SERVICES.—The Secretary may not make a grant under the 

demonstration program under this section unless the application contains sufficient 

evidence, in the determination of the Secretary, that there will be adequate funding 

for supportive services for residents of the facility converted with grant amounts. ‘‘(e) SERVICE COORDINATORS.—An application for a grant under the demonstration 

program under this section may include a request for, and the Secretary may provide funds under the grant for, amounts to provide service coordinators to assist in 

the provision of supportive services for residents of the facilities converted with 

grant amounts. ‘‘(f) SCOPE.—Grants under the demonstration program under this section may be 

made only with respect to three eligible projects. ‘‘(g) SELECTION CRITERIA.—The Secretary shall select applications for grants 

under the demonstration program under this section based upon selection criteria, 

which shall be established by the Secretary and shall include— ‘‘(1) the extent to which the conversion is likely to provide assisted living facilities or supportive services that are needed or are expected to be needed by 

the categories of elderly persons that the assisted living facility is intended to 

serve; ‘‘(2) the extent of financial need on the part of the applicant for funding to 

carry out the conversion activities proposed; ‘‘(3) the extent to which the agency has evidenced community support for the 

conversion, by such indicators as letters of support from the local community 

for the conversion and financial contributions from public and private sources; ‘‘(4) the extent to which the applicant demonstrates a strong commitment to 

promoting the autonomy and independence of the elderly persons that the assisted living facility or other supportive services facility is intended to serve; ‘‘(5) the quality, completeness, and managerial capability of providing services 

to elderly residents, especially in such areas as meals, 24-hour staffing, and onsite health care; and ‘‘(6) such other criteria as the Secretary determines to be appropriate to ensure that funds made available under the demonstration program under this 

section are used effectively. ‘‘(h) DEFINITION.—For the purposes of this section, the term ‘assisted living facility’ has the meaning given such term in section 232(b) of the National Housing Act 

(12 U.S.C. 1715w(b)). ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated 

for providing grants under the demonstration program under this section such sums 

as may be necessary for each of fiscal years 2003 and 2004.’’.

SEC. 505. PROTECTION OF INNOCENT TENANTS. 

Paragraph (6) of section 6(l) of the United States Housing Act of 1937 (42 U.S.C. 

1437d(l)(6)) is amended by inserting before the semicolon at the end the following: 

‘‘; except that such criminal activity, engaged in by a member of a tenant’s household or any guest or other person under the tenant’s control, shall not be cause for 

termination of tenancy of the tenant if the tenant or immediate member of the tenant’s family is a victim of domestic violence or dating violence and, as a result, could 

not control or prevent the criminal activity relating to domestic violence or dating 

violence; and except that nothing in this paragraph may be construed to limit the 

33

authority of a public housing agency to evict individuals who engage in criminal acts 

of physical violence against family members or others, and in all cases, a public 

housing agency shall consider the safety, security, and continued maintenance of 

victims of domestic violence to be of paramount importance’’. 

Subtitle B—HOPE VI Revitalization Program 

SEC. 521. SELECTION CRITERIA. 

Section 24(e)(2) of the United States Housing Act of 1937 (42 U.S.C. 1437v(e)(2)) 

is amended—

(1) by striking the matter preceding subparagraph (A) and inserting the following: 

‘‘(2) SELECTION CRITERIA.—The Secretary shall establish criteria for the award 

of grants under this section and shall include among the factors—’’; 

(2) in subparagraph (B), by striking ‘‘large-scale’’; 

(3) in subparagraph (D), by inserting ‘‘and ongoing implementation’’ after ‘‘development’’; 

(4) in subparagraph (H), by striking ‘‘and’’ at the end; 

(5) by redesignating subparagraph (I) as subparagraph (M); and 

(6) by inserting after subparagraph (H) the following new subparagraphs: 

‘‘(I) the extent to which the applicant can commence and complete the revitalization plan expeditiously; 

‘‘(J) the extent to which the plan minimizes temporary or permanent displacement of current residents of the public housing site who wish to remain in or return to the revitalized community; 

‘‘(K) the extent to which the plan sustains or creates more project-based 

housing units available to persons eligible for public housing in markets 

where there is demand for the maintenance or creation of such units; 

‘‘(L) the extent to which the plan gives to existing residents priority for 

occupancy in dwelling units in the revitalized community; and’’. 

SEC. 522. AUTHORIZATION OF APPROPRIATIONS. 

Paragraph (1) of section 24(m) of the United States Housing Act of 1937 (42 

U.S.C. 1437v(m)(1)) is amended to read as follows: 

‘‘(1) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated for grants under this section such sums as may be necessary for each 

of fiscal years 2003 and 2004.’’. 

SEC. 523. EXTENSION OF PROGRAM. 

Section 24(n) of the United States Housing Act of 1937 (42 U.S.C. 1437v(n)) is 

amended by striking ‘‘September 30, 2002’’ and inserting ‘‘September 30, 2004’’.

SEC. 524. HOPE VI GRANTS FOR ASSISTING AFFORDABLE HOUSING THROUGH MAIN STREET 

PROJECTS. 

(a) PURPOSES.—Section 24(a) of the United States Housing Act of 1937 (42 U.S.C. 

1437v(a)) is amended by adding after and below paragraph (4) the following: 

‘‘It is also the purpose of this section to provide assistance to smaller communities 

for the purpose of facilitating the development of affordable housing for low-income 

families that is undertaken in connection with a main street revitalization or redevelopment project in such communities.’’. 

(b) GRANTS FOR ASSISTING AFFORDABLE HOUSING DEVELOPED THROUGH MAIN

STREET PROJECTS IN SMALLER COMMUNITIES.—Section 24 of the United States 

Housing Act of 1937 (42 U.S.C. 1437v) is amended—

(1) by redesignating subsection (n) as subsection (o); and 

(2) by inserting after subsection (m) the following new subsection: 

‘‘(n) GRANTS FOR ASSISTING AFFORDABLE HOUSING DEVELOPED THROUGH MAIN

STREET PROJECTS IN SMALLER COMMUNITIES.—

‘‘(1) AUTHORITY AND USE OF GRANT AMOUNTS.—The Secretary may make 

grants under this subsection to smaller communities. Such grant amounts shall 

be used by smaller communities only to provide assistance to carry out eligible 

affordable housing activities under paragraph (3) in connection with an eligible 

project under paragraph (2). 

‘‘(2) ELIGIBLE PROJECT.—For purposes of this subsection, the term ‘eligible 

project’ means a project that—

‘‘(A) the Secretary determines, under the criteria established pursuant to 

paragraph (3), is a main street project; 

‘‘(B) is carried out within the jurisdiction of smaller community receiving 

the grant; and 

34

‘‘(C) involves the development of affordable housing that is located in the 

commercial area that is the subject of the project. ‘‘(3) MAIN STREET PROJECTS.—The Secretary shall establish requirements for 

a project to be consider a main street project for purposes of this section, which 

shall require that the project— ‘‘(A) has as its purpose the revitalization or redevelopment of a historic 

or traditional commercial area; ‘‘(B) involves investment, or other participation, by the government for, 

and private entities in, the community in which the project is carried out; 

and ‘‘(C) complies with such historic preservation guidelines or principles as 

the Secretary shall identify to preserve significant historic or traditional architectural and design features in the structures or area involved in the 

project. ‘‘(4) ELIGIBLE AFFORDABLE HOUSING ACTIVITIES.—For purposes of this subsection, the activities described in subsection (d)(1) shall be considered eligible 

affordable housing activities, except that— ‘‘(A) such activities shall be conducted with respect to affordable housing 

rather than with respect to severely distressed public housing projects; and ‘‘(B) eligible affordable housing activities under this subsection shall not 

include the activities described in subparagraphs (B) through (F) or (J) 

through (L) of subsection (d)(1). 

‘‘(5) MAXIMUM GRANT AMOUNT.—A grant under this subsection for a fiscal 

year for a single smaller community may not exceed $1,000,000. 

‘‘(6) CONTRIBUTION REQUIREMENT.—A smaller community applying for a grant 

under this subsection shall be considered an applicant for purposes of subsection (c) (relating to contributions by applicants), except that—

‘‘(A) such supplemental amounts shall be used only for carrying out eligible affordable housing activities; and 

‘‘(B) paragraphs (1)(B) and (3) shall not apply to grants under this subsection. 

‘‘(7) APPLICATIONS AND SELECTION.—

‘‘(A) APPLICATION.—Pursuant to subsection (e)(1), the Secretary shall provide for smaller communities to apply for grants under this subsection, except that the Secretary may establish such separate or additional criteria 

for applications for such grants as may be appropriate to carry out this subsection. 

‘‘(B) SELECTION CRITERIA.—The Secretary shall establish selection criteria 

for the award of grants under this subsection, which shall be based on the 

selection criteria established pursuant to subsection (e)(2), with such 

changes as may be appropriate to carry out the purposes of this subsection. 

‘‘(8) COST LIMITS.—The cost limits established pursuant to subsection (f) shall 

apply to eligible affordable housing activities assisted with grant amounts under 

this subsection. 

‘‘(9) INAPPLICABILITY OF OTHER PROVISIONS.—The provisions of subsections (g) 

(relating to disposition and replacement of severely distressed public housing), 

(h) (relating to administration of grants by other entities), and (i) (relating to 

withdrawal of funding) shall not apply to grants under this subsection. 

‘‘(10) REPORTING.—The Secretary shall require each smaller community receiving a grant under this subsection to submit a report regarding the use of 

all amounts provided under the grant. 

‘‘(11) DEFINITIONS.—For purposes of this subsection, the following definitions 

shall apply: 

‘‘(A) AFFORDABLE HOUSING.—The term ‘affordable housing’ means rental 

or homeownership dwelling units that—

‘‘(i) are made available for initial occupancy subject to the same rules 

regarding level of income and income mix as dwelling units in public 

housing projects assisted with a grant under this section; and 

‘‘(ii) are subject to the same rules regarding occupant contribution toward rent or purchase and terms of rental or purchase as dwelling 

units in public housing projects assisted with a grant under this section. 

‘‘(B) SMALLER COMMUNITY.—The term ‘smaller community’ means a unit 

of general local government (as such term is defined in section 102 of the 

Housing and Community Development Act of 1974 (42 U.S.C. 5302)) that—

‘‘(i) has a population of 30,000 or fewer; and 

‘‘(ii)(I) may not be not served by a public housing agency; or 

‘‘(II) is served by a single public housing agency, which agency administers 100 or fewer public housing dwelling units.’’. 

35

(c) ANNUAL REPORT.—Section 24(l) of the United States Housing Act of 1937 (42 

U.S.C. 1437v(l)) is amended—

(1) in paragraph (3), by striking ‘‘; and’’ and inserting ‘‘, including a specification of the amount and type of assistance provided under subsection (n);’’; 

(2) by redesignating paragraph (4) as paragraph (5); and 

(3) by inserting after paragraph (3) the following new paragraph: 

‘‘(4) the types of projects funded, and number of affordable housing dwelling 

units developed with, grants under subsection (n); and’’. 

(d) FUNDING.—Section 24(m) of the United States Housing Act of 1937 (42 U.S.C. 

1437v(m)) is amended by adding at the end the following new paragraph: 

‘‘(3) Of the amount appropriated pursuant to paragraph (1) for any fiscal year, 

the Secretary shall provide up to 5 percent for use only for grants under subsection (n).’’. 

TITLE VI—HOMELESS HOUSING PROGRAMS 

SEC. 601. UNITED STATES INTERAGENCY COUNCIL ON HOMELESSNESS. 

(a) AUTHORIZATION OF APPROPRIATIONS.—Section 208 of the McKinney-Vento 

Homeless Assistance Act (42 U.S.C. 11318) is amended to read as follows: 

‘‘SEC. 208. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated to carry out this title such sums as may 

be necessary for each of fiscal years 2003 and 2004.’’. 

(b) REDESIGNATION OF COUNCIL.—Title II of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11311 et seq.) is amended—

(1) by striking the title designation and heading and inserting the following: 

‘‘TITLE II—UNITED STATES INTERAGENCY 

COUNCIL ON HOMELESSNESS’’; 

(2) in section 201, by striking ‘‘Interagency Council on the Homeless’’ and inserting ‘‘United States Interagency Council on Homelessness’’; and 

(3) in section 207(1), by striking ‘‘Interagency Council on the Homeless’’ and 

inserting ‘‘United States Interagency Council on Homelessness’’. 

(c) CONFORMING AMENDMENTS.—The McKinney-Vento Homeless Assistance Act is 

amended—

(1) in section 102(b)(1) (42 U.S.C. 11301(b)(1)), by striking ‘‘an Interagency 

Council on the Homeless’’ and inserting ‘‘the United States Interagency Council 

on Homelessness’’; 

(2) in section 501 (42 U.S.C. 11411), in subsections (c)(2)(A) and (d)(3), by 

striking ‘‘Interagency Council on the Homeless’’ each place such term appears 

and inserting ‘‘United States Interagency Council on Homelessness’’; and 

(3) in the table of contents in section 101(b) (42 U.S.C. 11301 note), by striking the item relating to title II and inserting the following new item:

‘‘TITLE II—UNITED STATES INTERAGENCY COUNCIL ON HOMELESSNESS’’.

SEC. 602. FEDERAL EMERGENCY MANAGEMENT AGENCY FOOD AND SHELTER PROGRAM. 

Section 322 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11352) is 

amended to read as follows: 

‘‘SEC. 322. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated to carry out this title such sums as may 

be necessary for each of fiscal years 2003 and 2004.’’. 

SEC. 603. EMERGENCY SHELTER GRANTS PROGRAM. 

Section 417 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11377) is 

amended to read as follows: 

‘‘SEC. 417. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated to carry out this subtitle such sums as 

may be necessary for each of fiscal years 2003 and 2004.’’. 

SEC. 604. SUPPORTIVE HOUSING PROGRAM. 

(a) AUTHORIZATION OF APPROPRIATIONS.—Subsection (a) of section 429 of the 

McKinney-Vento Homeless Assistance Act (42 U.S.C. 11389(a)) is amended to read 

as follows: 

36

‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this subtitle (not including activities funded pursuant to subsection (d) of this section) such sums as may be necessary for each of fiscal years 

2003 and 2004.’’. (b) FUNDING OF RENEWALS THROUGH HOUSING CERTIFICATE FUND.—Section 429 

of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11389) is amended by 

adding at the end the following new subsection: ‘‘(d) FUNDING OF RENEWALS.— ‘‘(1) IN GENERAL.—For fiscal year 2003 and fiscal years thereafter, assistance 

under this subtitle may be funded using amounts appropriated for section 8 of 

the United States Housing Act of 1937 (42 U.S.C. 1437f). 

‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—In addition to any amounts otherwise made available for assistance under section 8 of the United States Housing 

Act of 1937 (42 U.S.C. 1437f), there are authorized to be appropriated such 

sums as may be necessary for each of fiscal years 2003 and 2004 for the renewal 

of contracts for permanent housing activities under this subtitle. Any such renewals shall be made only for a term of one year.’’. 

(c) SET-ASIDE.—Subtitle A of title IV of the McKinney-Vento Homeless Assistance 

Act (42 U.S.C. 11361 et seq.) is amended by adding at the end the following new 

section: 

‘‘SEC. 403. SET-ASIDE FOR PERMANENT HOUSING. 

‘‘Notwithstanding any other provision of this title, of the aggregate amount made 

available for assistance under this title for any fiscal year, not less than 30 percent 

shall be used only for permanent housing activities for homeless persons. Amounts 

made available under section 429(d) or 463(c) for renewals of contracts for permanent housing shall be disregarded for purposes of the preceding sentence. For purposes of this section, the term ‘permanent housing activities’ includes permanent 

housing designed primarily to serve homeless families with children.’’. 

(d) ELIMINATION OF CAP ON CAPITAL EXPENSES.—Section 423(a) of the McKinneyVento Homeless Assistance Act (42 U.S.C. 11383(a)) is amended—

(1) in the first sentence of paragraph (1)—

(A) by striking ‘‘, in an amount not to exceed $200,000,’’; and 

(B) by striking ‘‘; except that’’ and all that follows through ‘‘rehabilitation 

costs’’; and 

(2) in paragraph (2), by striking ‘‘, in an amount not to exceed $400,000,’’. 

SEC. 605. SECTION 8 ASSISTANCE FOR SINGLE ROOM OCCUPANCY DWELLINGS. 

Subsection (a) of section 441 of the McKinney-Vento Homeless Assistance Act (42 

U.S.C. 11401(a)) is amended to read as follows: 

‘‘(a) INCREASE IN BUDGET AUTHORITY.—The budget authority available under section 5(c) of the United States Housing Act of 1937 for assistance under section 

8(e)(2) of such Act (as in effect pursuant to section 289(b)(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12839(b)(2)) is authorized to be 

increased by such sums as may be necessary on or after each of October 1, 2002, 

and October 1, 2003.’’. 

SEC. 606. SHELTER PLUS CARE. 

(a) AUTHORIZATION OF APPROPRIATIONS.—The first sentence of section 463(a) of 

the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11403h(a)) is amended to 

read as follows: ‘‘For purposes of the housing programs under this subtitle, there 

are authorized to be appropriated to carry out this subtitle (not including activities 

funded pursuant to subsection (c) of this section) such sums as may be necessary 

for each of fiscal years 2003 and 2004.’’. 

(b) FUNDING OF RENEWALS THROUGH HOUSING CERTIFICATE FUND.—Section 463 

of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11403h) is amended by 

adding at the end the following new subsection: 

‘‘(c) FUNDING OF RENEWALS.—

‘‘(1) IN GENERAL.—For fiscal year 2003 and fiscal years thereafter, assistance 

under this subtitle may be funded using amounts appropriated for section 8 of 

the United States Housing Act of 1937 (42 U.S.C. 1437f). 

‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—In addition to any amounts otherwise made available for assistance under section 8 of the United States Housing 

Act of 1937 (42 U.S.C. 1437f), there are authorized to be appropriated such 

sums as may be necessary for each of fiscal years 2003 and 2004 for the renewal 

of contracts under this subtitle. Any such renewals shall be made only for a 

term of one year.’’. 

(c) CONDITIONS OF RENEWAL.—Section 456 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11403e) is amended—

(1) by inserting ‘‘(a) APPROVAL OF ASSISTANCE.—’’ before ‘‘The Secretary’’; and 

37

(2) by adding at the end the following new subsection: 

‘‘(b) CONDITIONS OF RENEWAL.—The Secretary may not provide assistance under 

this subtitle for any housing previously assisted under this subtitle unless the unit 

of general local government in which such project is located certifies that the housing complies with such housing safety and quality standards, as the Secretary shall 

establish and the Secretary reviews and approves such certification.’’.

SEC. 607. HOUSING FOR DOMESTIC VIOLENCE AND SEXUAL ASSAULT VICTIMS. 

(a) FUNDING.—There are authorized to be appropriated such sums as may be necessary for each of fiscal years 2003 through 2007 for assistance under this section. 

(b) HOUSING ASSISTANCE.—Any amounts made available pursuant to subsection 

(a) of this section shall be available to the Secretary only to provide assistance to 

qualified organizations for the purpose of providing, on behalf only of eligible individuals or families—

(1) supportive housing (as such term is defined in section 422 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11382)); 

(2) tenant-based rental assistance; 

(3) financial assistance for a security deposit, first month’s rent, or ongoing 

rental assistance; or 

(4) project-based transitional housing, except that such assistance may be 

used only to cover expenses of renovation, repair, conversion and operation of 

such housing. 

(c) ELIGIBLE INDIVIDUALS AND FAMILIES.—An eligible individual or family under 

this paragraph is an individual or family that meets both of the following requirements: 

(1) VICTIMS.—The individual has been victimized by domestic violence, stalking, or adult or child sexual assault or the family is a victimized family. 

(2) RELOCATION.—The qualified organization providing the housing assistance 

pursuant to subsection (b) for which the individual or family is applying has determined that the individual or member of the family who was a victim of the 

domestic violence, stalking, or adult or child sexual assault reasonably believes 

that relocation from such residence will assist in avoiding future domestic violence, stalking, or adult or child sexual assault against such individual or another member of the family. 

(d) MATCHING REQUIREMENT.—Each qualified organization receiving assistance 

under this section shall supplement such assistance with a 25 percent match of 

funds for supportive services (as such term is defined in section 422 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11382)) from sources other than this 

section. Each such organization shall certify to the Secretary its compliance with 

this section and shall include with the certification a description of the sources and 

amounts of such supplemental funds. 

(e) ALLOCATION.—

(1) COMPETITION.—Amounts made available pursuant to this section shall be 

allocated by the Secretary, among qualified organizations that submit applications to the Secretary, under a national competition based on demonstrated 

need for such assistance, including the extent of service provided to underserved 

populations (as such term is defined in section 2003 of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796gg–2)) and the ability to undertake and carry out a program under this section, as the Secretary shall determine. 

(2) SET ASIDE FOR INDIAN TRIBES.—Of the total funds made available pursuant to subsection (a) for any fiscal year, at least 10 percent shall be used for 

grants to Indian tribes or Indian tribal organizations that provide emergency 

shelter, transitional housing, or permanent housing or supportive services to individuals or families victimized by domestic violence, stalking, or adult or child 

sexual assault. Indian tribes or Indian tribal organizations that receive such 

grants may apply for and receive other grants from the total funds appropriated 

under this section. All other grants awarded shall go to qualified organizations. 

(f) APPLICATIONS.—The Secretary shall provide for qualified organizations to apply 

for assistance under this section and shall require that such an application shall—

(1) contain such certifications as the Secretary shall require to ensure that—

(A) the applicant organization, to the extent practicable, has entered into 

cooperative agreements or memoranda of understanding with homeless coalitions, public housing authorities, and community-based agencies that represent underserved populations to establish procedures for facilitating referrals to transitional housing and for implementing tenant-based housing assistance programs; and 

(B) any construction or physical improvements carried out with assistance amounts under this section will comply with any applicable housing, 

38

safety, and licensing codes, laws, or regulations of the State or local government in which the structure is located; and 

(2) describe how the services to be provided with assistance under this section 

will assist victims of domestic violence in obtaining permanent housing. 

(g) CONFIDENTIALITY.—A qualified organization may not be provided assistance 

under this section unless the organization agrees to ensure the confidentiality of— (1) the names of individuals and their dependents assisted with services or 

in facilities funded, in whole or in part, with such amounts; and 

(2) any other information regarding such individuals and dependents, 

except to the extent such information is otherwise required by law to be disclosed. 

(h) DEFINITIONS.—For purposes of this section:

(1) DOMESTIC VIOLENCE.—The term ‘‘domestic violence’’ includes acts or 

threats of violence or extreme cruelty (as such term is referred to in section 216 

of the Immigration and Nationality Act (8 U.S.C. 1186a)), not including acts of 

self-defense, committed by a current or former spouse of the victim, by a person 

with whom the victim has a child in common, by a person who is cohabiting 

with or has cohabited with the victim, by a person who is or has been in a continuing social relationship of a romantic or intimate nature with the victim, by 

a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction, or by any other person against a victim who 

is protected from that person’s acts under the domestic or family violence laws 

of the jurisdiction. 

(2) VICTIMIZED FAMILY.—

(A) IN GENERAL.—The term ‘‘victimized family’’ means a family or household that includes an individual who has been determined under subparagraph (B) to have been a victim of domestic violence, stalking, or adult or 

child sexual assault, but does not include any individual who committed the 

domestic violence, sexual assault, or adult or child sexual assault. The term 

includes any such family or household in which only a minor or minors are 

the individual or individuals who was or were a victim of domestic violence, 

stalking, or sexual assault only if such family or household also includes 

a parent, stepparent, legal guardian, or other responsible caretaker for the 

child. 

(B) DETERMINATION.—For purposes of subparagraph (A), a determination 

under this subparagraph is a determination that domestic violence, stalking, or adult or child sexual assault has been committed, which is made by 

any agency or official of a State, Indian tribe, tribal organization, or unit 

of general local government based upon any reliable evidence that domestic 

violence, stalking, or adult or child sexual assault has occurred. A victim’s 

statement that domestic violence, stalking, or adult or child sexual assault 

has occurred shall be sufficient unless the agency has an independent, reasonable basis to find the individual not credible. 

(3) INDIAN TRIBE.—The term ‘‘Indian Tribe’’ shall have the same meaning 

given the term in section 2003 of the Omnibus Crime Control and Safe Streets 

Act of 1968 (42 U.S.C. 3796gg–2). 

(4) QUALIFIED ORGANIZATION.—The term ‘‘qualified organization’’ means a private, nongovernmental organization that—

(A) is organized, or has as its primary purposes, to provide emergency 

shelter, transitional housing, or permanent housing for victims of domestic 

violence, stalking, or adult or child sexual assault or is a medical, legal, 

counseling, social, psychological, health, job training, educational, life skills 

development, or other social services program for victims of domestic violence, stalking, or adult or child sexual assault that undertakes a collaborative project with a qualified, nonprofit, nongovernmental organization 

that primarily provides emergency shelter, transitional housing, or permanent housing for low-income people; 

(B) is organized under State, tribal, or local laws; 

(C) has no part of its net earnings inuring to the benefit of any member, 

shareholder, founder, contributor, or individual; and 

(D) is approved by the Secretary as to financial responsibility. 

(5) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Housing and 

Urban Development. 

(6) SEXUAL ASSAULT.—The term ‘‘sexual assault’’ means any conduct proscribed by chapter 109A of title 18, United States Code, whether or not the conduct occurs in the special maritime and territorial jurisdiction of the United 

States, on an Indian reservation, or in a Federal prison and includes both assaults committed by offenders who are strangers to the victims and assaults 

committed by offenders who are known to the victims or related by blood or 

marriage to the victim.

39

(7) STALKING.—The term ‘‘stalking’’ means engaging in a course of conduct directed at a specific person that would cause a reasonable person to fear death, 

sexual assault, or bodily injury to himself or herself or a member of his or her 

immediate family, when the person engaging in such conduct has knowledge or 

should have knowledge that the specific person will be placed in reasonable fear 

of death, sexual assault, or bodily injury to himself or herself or a member of 

his or her immediate family and when the conduct induces fear in the specific 

person of death, sexual assault, or bodily injury to himself or herself or a member of his or her immediate family. 

(8) STATE.—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. 

(9) TRANSITIONAL HOUSING.—The term ‘‘transitional housing’’ includes shortterm housing and has the meaning given such term in section 424(b) of the 

McKinney-Vento Homeless Assistance Act (42 U.S.C. 11384(b)). 

(10) TRIBAL ORGANIZATION.—The term ‘‘tribal organization’’ means a private, 

nonprofit, nongovernmental, or tribally chartered organization—

(A) whose primary purpose is to provide emergency shelter, transitional 

housing, or permanent housing or supportive services to individuals or families victimized by domestic violence, stalking, or adult or child sexual assault; 

(B) that operates within the exterior boundaries of an Indian reservation; 

and 

(C) whose board of directors reflects the population served. 

(11) UNIT OF GENERAL LOCAL GOVERNMENT.—The term ‘‘unit of general local 

government’’ has the meaning given the term in section 102(a) of the Housing 

and Community Development Act of 1974 (42 U.S.C. 5302(a)).

SEC. 608. NATIONAL GOAL OF ENDING HOMELESSNESS. 

(a) IN GENERAL.—The McKinney-Vento Homeless Assistance Act (42 U.S.C. 11301 

et seq.) is amended by inserting before title I the following new section: 

‘‘SECTION 1. NATIONAL GOAL OF ENDING HOMELESSNESS. 

‘‘The Congress hereby declares that it is a national goal to end homelessness within 10 years after the enactment of the Housing Affordability for America Act of 

2002.’’. 

(b) AMENDMENT TO TABLE OF CONTENTS.—The table of contents in section 101(b) 

of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11301 note) is amended 

by inserting before the item relating to title I the following new item:

‘‘Sec. 1. National goal of ending homelessness.’’.

SEC. 609. CLERICAL AMENDMENTS. 

(a) AMENDMENT TO SUBTITLE HEADING.—The heading for subtitle A of title IV of 

the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11361 et seq.) is amended 

to read as follows: 

‘‘Subtitle A—General Provisions’’. 

(b) TABLE OF CONTENTS.—The table of contents in section 101(b) of the McKinneyVento Homeless Assistance Act (42 U.S.C. 11301 note) is amended—

(1) by striking the item relating to subtitle A of title IV and inserting the following new item:

‘‘Subtitle A—General Provisions’’;

(2) by inserting after the item relating to section 401 the following new items:

‘‘Sec. 402. Discharge coordination policy. 

‘‘Sec. 403. Set-aside for permanent housing.’’;

and 

(3) by striking the item relating to section 443 and inserting the following 

new item:

‘‘Sec. 443. Environmental review.’’.

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TITLE VII—NATIVE AMERICAN HOUSING 

SEC. 701. REAUTHORIZATION OF NATIVE AMERICAN HOUSING AND SELF-DETERMINATION 

ACT OF 1996. 

(a) BLOCK GRANT ASSISTANCE.—Section 108 of the Native American Housing and 

Self-Determination Act of 1996 (25 U.S.C. 4117) is amended to read as follows: 

‘‘SEC. 108. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated for grants under this title such sums as 

may be necessary for each of fiscal years 2003 and 2004.’’. (b) GUARANTEES FOR TRIBAL HOUSING ACTIVITIES LOANS.— (1) AGGREGATE FISCAL YEAR LIMITATION.—Section 605(a) of the Native American Housing and Self-Determination Act of 1996 (25 U.S.C. 4195(a)) is amended by striking ‘‘1997, 1998, 1999, 2000, and 2001’’ and inserting ‘‘2003 and 

2004’’. (2) AUTHORIZATION OF APPROPRIATIONS FOR CREDIT SUBSIDY.—Section 605(b) 

of the Native American Housing and Self-Determination Act of 1996 (25 U.S.C. 

4195(b)) is amended by striking ‘‘1997, 1998, 1999, 2000, and 2001’’ and inserting ‘‘2003 and 2004’’. (c) TRAINING AND TECHNICAL ASSISTANCE.—Section 703 of the Native American 

Housing and Self-Determination Act of 1996 (25 U.S.C. 4212) is amended by striking ‘‘1997, 1998, 1999, 2000, and 2001’’ and inserting ‘‘2003 and 2004’’. 

SEC. 702. COMPREHENSIVE PLANNING UNDER NATIVE AMERICAN HOUSING BLOCK GRANT 

PROGRAM. 

Section 101(h) of the Native American Housing Assistance and Self-Determination 

Act of 1996 (25 U.S.C. 4111(h)) is amended— (1) by inserting after ‘‘Act’’ the first place such term appears the following: ‘‘for comprehensive housing and community development planning activities 

and’’; and 

(2) in the subsection heading, by inserting ‘‘AND PLANNING’’ after ‘‘ADMINIS- TRATIVE’’. 

SEC. 703. LANDS TITLE REPORT COMMISSION. 

(a) ESTABLISHMENT.—Section 501(a) of the American Homeownership and Economic Opportunity Act of 2000 (25 U.S.C. 4043 note) is amended by striking ‘‘Subject to sums being provided in advance in appropriations Acts, there’’ and inserting ‘‘There’’. (b) APPOINTMENT OF MEMBERS.—Section 501(b)(1) of the American Homeownership and Economic Opportunity Act of 2000 (25 U.S.C. 4043 note) is amended by 

striking ‘‘this Act’’ and inserting ‘‘the American Indian Lands Title Report Commission Corrections Act’’. (c) INITIAL MEETING.—Section 501(c) of the American Homeownership and Economic Opportunity Act of 2000 (25 U.S.C. 4043 note) is amended by striking ‘‘the 

Chairperson of the Commission determines that sums sufficient for the Commission 

to carry out its duties under this Act have been appropriated for such purpose’’ and 

inserting ‘‘the completion of the appointment of the initial members pursuant to 

subsection (b)(1)’’. 

TITLE VIII—HOUSING IMPACT ANALYSIS 

SEC. 801. APPLICABILITY. 

Except as provided in section 802, the requirements of this title shall apply with 

respect to— (1) any proposed rule, unless the agency promulgating the rule— (A) has certified that the proposed rule will not, if given force or effect 

as a final rule, have a significant deleterious impact on housing affordability; and 

(B) has caused such certification to be published in the Federal Register 

at the time of publication of general notice of proposed rulemaking for the 

rule, together with a statement providing the factual basis for the certification; and 

(2) any final rule, unless the agency promulgating the rule—

(A) has certified that the rule will not, if given force or effect, have a significant deleterious impact on housing affordability; and 

(B) has caused such certification to be published in the Federal Register 

at the time of publication of the final rule, together with a statement providing the factual basis for the certification. 

41

Any agency making a certification under this section shall provide a copy of such 

certification and the statement providing the factual basis for the certification to the 

Secretary of Housing and Urban Development. 

SEC. 802. EXCEPTION FOR CERTAIN BANKING RULES. 

The requirements of this title shall not apply to any proposed or final rule relating to—

(1) the operations, safety, or soundness of—

(A) federally insured depository institutions or any affiliate of such an institution (as such term is defined in section 2(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(k))); 

(B) credit unions; 

(C) the Federal home loan banks; 

(D) the enterprises (as such term is defined in section 1303 of the Housing and Community Development Act of 1992 (12 U.S.C. 4502)); 

(E) a Farm Credit System institution; or 

(F) foreign banks or their branches, agencies, commercial lending companies, or representative offices that operate in the United States, or any affiliate of a foreign bank (as such terms are defined in section 1 of the International Banking Act of 1978 (12 U.S.C. 3101)); or 

(2) the payments system or the protection of deposit insurance funds or the 

Farm Credit Insurance Fund. 

SEC. 803. STATEMENT OF PROPOSED RULEMAKING. 

Whenever an agency publishes general notice of proposed rulemaking for any proposed rule, unless the agency has made a certification under section 801, the agency 

shall—

(1) in the notice of proposed rulemaking—

(A) state with particularity the text of the proposed rule; and 

(B) request any interested persons to submit to the agency any written 

analyses, data, views, and arguments, and any specific alternatives to the 

proposed rule; 

(2) provide an opportunity for interested persons to take the actions specified 

under paragraph (1)(B) before promulgation of the final rule; and 

(3) prepare and make available for public comment an initial housing impact 

analysis in accordance with the requirements of section 804. 

SEC. 804. INITIAL HOUSING IMPACT ANALYSIS. 

(a) REQUIREMENTS.—Each initial housing impact analysis shall describe the impact of the proposed rule on housing affordability. The initial housing impact analysis or a summary shall be published in the Federal Register at the same time as, 

and together with, the publication of general notice of proposed rulemaking for the 

rule. The agency shall transmit a copy of the initial housing impact analysis to the 

Secretary of Housing and Urban Development. 

(b) CONTENTS.—Each initial housing impact analysis required under this section 

shall contain—

(1) a description of the reasons why action by the agency is being considered; 

(2) a succinct statement of the objectives of, and legal basis for, the proposed 

rule; 

(3) a description of and, where feasible, an estimate of the extent to which 

the proposed rule would increase the cost or reduce the supply of housing or 

land for residential development; and 

(4) an identification, to the extent practicable, of all relevant Federal rules 

which may duplicate, overlap, or conflict with the proposed rule. 

SEC. 805. FINAL HOUSING IMPACT ANALYSIS. 

(a) REQUIREMENT.—Whenever an agency promulgates a final rule after publication of a general notice of proposed rulemaking, unless the agency has made the 

certification under section 801, the agency shall prepare a final housing impact 

analysis. 

(b) CONTENTS.—Each final housing impact analysis shall contain—

(1) a succinct statement of the need for, and objectives of, the rule; 

(2) a summary of the significant issues, analyses, and alternatives to the proposed rule raised during the public comment period in response to the proposed 

rule and initial housing impact analysis, a summary of the assessment of the 

agency of such issues, analyses, and alternatives, and a statement of any 

changes made in the proposed rule as a result of such comments; and 

(3) a description of and an estimate of the extent to which the rule will impact 

housing affordability or an explanation of why no such estimate is available. 

42

(c) AVAILABILITY.—The agency shall make copies of the final housing impact analysis available to members of the public and shall publish in the Federal Register 

such analysis or a summary thereof. 

SEC. 806. AVOIDANCE OF DUPLICATIVE OR UNNECESSARY ANALYSES. 

(a) DUPLICATION.—Any Federal agency may perform the analyses required by sections 804 and 805 in conjunction with or as a part of any other agenda or analysis 

required by any other law, executive order, directive, or rule if such other analysis 

satisfies the provisions of such sections. 

(b) JOINDER.—In order to avoid duplicative action, an agency may consider a series of closely related rules as one rule for the purposes of sections 804 and 805. 

SEC. 807. PREPARATION OF ANALYSES. 

In complying with the provisions of sections 804 and 805, an agency may provide 

either a quantifiable or numerical description of the effects of a proposed rule or alternatives to the proposed rule, or more general descriptive statements if quantification is not practicable or reliable.

SEC. 808. EFFECT ON OTHER LAW. 

The requirements of sections 804 and 805 do not alter in any manner standards 

otherwise applicable by law to agency action. 

SEC. 809. PROCEDURE FOR WAIVER OR DELAY OF COMPLETION. 

(a) INITIAL HOUSING IMPACT ANALYSIS.—An agency head may waive or delay the 

completion of some or all of the requirements of section 804 by publishing in the 

Federal Register, not later than the date of publication of the final rule, a written 

finding, with reasons therefor, that the final rule is being promulgated in response 

to an emergency that makes compliance or timely compliance with the provisions 

of section 801 impracticable. 

(b) FINAL HOUSING IMPACT ANALYSIS.—An agency head may not waive the requirements of section 805. An agency head may delay the completion of the requirements of section 805 for a period of not more than 180 days after the date of publication in the Federal Register of a final rule by publishing in the Federal Register, 

not later than such date of publication, a written finding, with reasons therefor, that 

the final rule is being promulgated in response to an emergency that makes timely 

compliance with the provisions of section 805 impracticable. If the agency has not 

prepared a final housing impact analysis pursuant to section 805 within 180 days 

from the date of publication of the final rule, such rule shall lapse and have no force 

or effect. Such rule shall not be repromulgated until a final housing impact analysis 

has been completed by the agency. 

SEC. 810. DEFINITIONS. 

For purposes of this title, the following definitions shall apply: 

(1) AGENCY.—The term ‘‘agency’’ means each authority of the Government of 

the United States, whether or not it is within or subject to review by another 

agency, but does not include—

(A) the Congress; 

(B) the courts of the United States; 

(C) the governments of the territories or possessions of the United States; 

(D) the government of the District of Columbia; 

(E) agencies composed of representatives of the parties or of representatives of organizations of the parties to the disputes determined by them; 

(F) courts-martial and military commissions; 

(G) military authority exercised in the field in time of war or in occupied 

territory; or 

(H) functions conferred by—

(i) sections 1738, 1739, 1743, and 1744 of title 12, United States 

Code; 

(ii) chapter 2 of title 41, United States Code;

(iii) subchapter II of chapter 471 of title 49, United States Code; or 

(iv) sections 1884, 1891–1902, and former section 1641(b)(2), of title 

50, appendix, United States Code. 

(2) FAMILIES.—The term ‘‘families’’ has the meaning given such term in section 3 of the United States Housing Act of 1937.

(3) HOUSING AFFORDABILITY.—The term ‘‘housing affordability’’ means the 

quantity of housing that is affordable to families having incomes that do not exceed 150 percent of the median income of families in the area in which the 

housing is located, with adjustments for smaller and larger families. For purposes of this paragraph, area, median family income for an area, and adjustments for family size shall be determined in the same manner as such factors 

43

are determined for purposes of section 3(b)(2) of the United States Housing Act 

of 1937. 

(4) RULE.—The term ‘‘rule’’ means any rule for which the agency publishes 

a general notice of proposed rulemaking pursuant to section 553(b) of title 5, 

United States Code, or any other law, including any rule of general applicability 

governing grants by an agency to State and local governments for which the 

agency provides an opportunity for notice and public comment; except that such 

term does not include a rule of particular applicability relating to rates, wages, 

corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services, or allowances therefor or to valuations, costs or accounting, 

or practices relating to such rates, wages, structures, prices, appliances, services, or allowances. 

(5) SIGNIFICANT.—The term ‘‘significant’’ means increasing consumers’ cost of 

housing by more than $100,000,000 per year. 

SEC. 811. DEVELOPMENT. 

Not later than 1 year after the date of the enactment of this Act, the Secretary 

of Housing and Urban Development shall develop model initial and final housing 

impact analyses under this title and shall cause such model analyses to be published in the Federal Register. The model analyses shall define the primary elements of a housing impact analysis to instruct other agencies on how to carry out 

and develop the analyses required under sections 804 and 805

SEC. 812. JUDICIAL REVIEW. 

(a) DETERMINATION BY AGENCY.—Except as otherwise provided in subsection (b), 

any determination by an agency concerning the applicability of any of the provisions 

of this title to any action of the agency shall not be subject to judicial review. 

(b) OTHER ACTIONS BY AGENCY.—Any housing impact analysis prepared under 

section 804 or 805 and the compliance or noncompliance of the agency with the provisions of this title shall not be subject to judicial review. When an action for judicial review of a rule is instituted, any housing impact analysis for such rule shall 

constitute part of the whole record of agency action in connection with the review. 

(c) EXCEPTION.—Nothing in this section bars judicial review of any other impact 

statement or similar analysis required by any other law if judicial review of such 

statement or analysis is otherwise provided by law. 

TITLE IX—OTHER HOUSING PROGRAMS 

SEC. 901. GNMA GUARANTEE FEE. 

Section 972 of the Higher Education Amendments of 1998 (Public Law 105–244; 

112 Stat. 1837) is hereby repealed. 

SEC. 902. HOUSING COUNSELING PROGRAMS. 

(a) DESIGNATION OF OFFICE RESPONSIBLE FOR HOUSING COUNSELING FUNC- TIONS.—Section 4 of the Department of Housing and Urban Development Act (42 

U.S.C. 3533) is amended by adding at the end the following new subsection: ‘‘(g)(1) The Secretary shall designate a single office of the Department in existence 

on the date of the enactment of the Housing Affordability for America Act of 2002 

to establish, coordinate, and administrate all individual program requirements, 

standards, and performance measures under programs and laws administered by 

the Department that relate to housing counseling, homeownership counseling, mortgage-related counseling, and rental housing counseling, including the requirements, 

standards, and performance measures relating to housing counseling pursuant to 

the provisions of law specified in paragraph (2). To the extent that the Secretary 

is authorized by law to provide housing counseling services, the Secretary, in such 

circumstances or under such programs as the Secretary considers appropriate, may 

authorize such office to provide such housing counseling services. 

‘‘(2) The provisions specified in this paragraph are as follows: 

‘‘(A) Section 105(a)(20) of the Housing and Community Development Act of 

1974 (42 U.S.C. 42 5305(a)(20)). 

‘‘(B) In the United States Housing Act of 1937—

‘‘(i) section 9(e) (42 U.S.C. 1437g(e)); 

‘‘(ii) section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D)); 

‘‘(iii) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D)); 

‘‘(iv) section 23(c)(4) (42 U.S.C. 1437u(c)(4)); 

‘‘(v) section 32(e)(4) (42 U.S.C. 1437z–4(e)(4)); 

‘‘(vi) section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); 

‘‘(vii) sections 302(b)(6) and 303(b)(7) (42 U.S.C. 1437aaa–1(b)(6), 

1437aaa–2(b)(7)); and 

44

‘‘(viii) section 304(c)(4) (42 U.S.C. 1437aaa–3(c)(4)). ‘‘(C) Section 302(a)(4) of the American Homeownership and Economic Opportunity Act of 2000 (42 U.S.C. 1437f note). ‘‘(D) Sections 233(b)(2) and 258(b) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12773(b)(2), 12808(b)). ‘‘(E) Sections 101(e) and 106 of the Housing and Urban Development Act of 

1968 (12 U.S.C. 1701w(e), 1701x). ‘‘(F) Section 220(d)(2)(G) of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4110(d)(2)(G)). ‘‘(G) Sections 422(b)(6), 423(b)(7), 424(c)(4), 442(b)(6), and 443(b)(6) of the 

Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12872(b)(6), 

12873(b)(7), 12874(c)(4), 12892(b)(6), and 12893(b)(6)). 

‘‘(H) Section 491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act 

(42 U.S.C. 11408(b)(1)(F)(iii)). 

‘‘(I) Sections 202(3) and 810(b)(2)(A) of the Native American Housing and SelfDetermination Act of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)). 

‘‘(J) In the National Housing Act—

‘‘(i) in section 203 (12 U.S.C. 1709), the penultimate undesignated paragraph of paragraph (2) of subsection (b), subsection (c)(2)(A), and subsection 

(r)(4); 

‘‘(ii) subsections (a) and (c)(3) of section 237 (12 U.S.C. 1715z–2); and 

‘‘(iii) subsections (d)(2)(B) and (m)(1) of section 255 (12 U.S.C. 1715z–20). 

‘‘(K) Section 502(h)(4)(B) of the Housing Act of 1949 (42 U.S.C. 1472(h)(4)(B)). 

‘‘(L) Section 508 of the Housing and Urban Development Act of 1970 (12 

U.S.C. 1701z–7).’’. 

(b) REPORT.—Not later than September 30, 2003, the Secretary of Housing and 

Urban Development shall submit a report to the Congress that—

(1) identifies the programs administered by the Department of Housing and 

Urban Development under which housing counseling is required, assisted, or 

made available; 

(2) describes the counseling offered or provided under each such program, including the provider of such counseling; and 

(3) specifies any amounts made available under law for technical assistance 

or similar functions which are used to provide housing counseling.

SEC. 903. ASSISTANCE FOR SELF-HELP HOUSING PROVIDERS. 

(a) LIMITATION ON ELIGIBLE EXPENSES.—Section 11(d) of the Housing Opportunity 

Program Extension Act of 1996 (42 U.S.C. 12805 note) is amended by adding at the 

end the following new paragraph: 

‘‘(3) LIMITATION ON ELIGIBLE EXPENSES.—The amount from grants under this 

section that is used for eligible expenses (as such term is defined under paragraph (2)) in connection with developing dwelling units described in paragraph 

(1) may not exceed an average of $15,000 per dwelling unit developed by the 

grantee organization or consortium, except that the Secretary may increase 

such $15,000 amount for any particular geographic region that the Secretary 

determines has elevated costs of land acquisition or infrastructure improvement.’’. 

(b) EXTENSION OF PERIOD FOR USE OF GRANTS.—Section 11 of the Housing Opportunity Program Extension Act of 1996 (42 U.S.C. 12805 note) is amended—

(1) in subsection (i)(5), by inserting before the semicolon the following: ‘‘, and 

except that the Secretary may extend such period for any organization or consortia to not more than 48 months in any case in which the Secretary determines, in the sole discretion of the Secretary, that extraordinary circumstances 

(including a national emergency) warrant such extension’’; and 

(2) in subsection (j), by adding at the end the following: ‘‘The Secretary may 

extend the period otherwise applicable under this subsection for any organization or consortia to not more than 48 months in any case in which the Secretary 

determines, in the sole discretion of the Secretary, that extraordinary circumstances (including a national emergency) warrant such extension.’’. 

(c) AUTHORIZATION OF APPROPRIATIONS.—Section 11(p) of the Housing Opportunity Program Extension Act of 1996 (42 U.S.C. 12805 note) is amended by striking 

‘‘fiscal year 2001’’ and inserting ‘‘each of fiscal years 2003 and 2004’’. 

SEC. 904. HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS. 

Section 863 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 

12912) is amended to read as follows:

‘‘SEC. 863. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated for grants under sections 860 and 861 

such sums as may be necessary for each of fiscal years 2003 and 2004.’’. 

45

SEC. 905. USE OF CDBG AMOUNTS FOR CONSTRUCTION OF TORNADO-SAFE SHELTER FOR 

MANUFACTURED HOUSING PARKS. 

(a) IN GENERAL.—Section 105(a) of the Housing and Community Development Act 

of 1974 (42 U.S.C. 5305(a)) is amended— (1) in paragraph (22), by striking ‘‘and’’ at the end; 

(2) in paragraph (23), by striking the period at the end and inserting a semicolon; 

(3) in paragraph (25), by striking the period at the end and inserting a semicolon; and 

(4) by inserting at the end the following new paragraph: 

‘‘(26) the construction or improvement of tornado- or storm-safe shelters for 

manufactured housing parks and residents of other manufactured housing, the 

acquisition of real property for sites for such shelters, and the provision of assistance (including loans and grants) to nonprofit or for-profit entities (including 

owners of such parks) for such construction, improvement, or acquisition, except 

that a shelter assisted with amounts made available pursuant to this paragraph 

shall be located in a neighborhood consisting predominantly of persons of low 

and moderate income, except that a shelter assisted with amounts made available pursuant to this paragraph may not be made available exclusively for use 

of the residents of a particular manufactured housing park or of other manufactured housing, but shall generally serve the residents of the area in which it 

is located; and’’. (b) AUTHORIZATION OF APPROPRIATIONS.—In addition to any amounts otherwise 

made available for grants under title I of the Housing and Community Development 

Act of 1974 (42 U.S.C. 5301 et seq.), there are authorized to be appropriated such 

sums as may be necessary for each of fiscal years 2003 and 2004 for assistance only 

for activities pursuant to section 105(a)(24) of such Act. 

SEC. 906. USE OF CDBG AMOUNTS TO ADMINISTER RENEWAL COMMUNITIES. 

Section 105(a)(13) of the Housing and Community Development Act of 1974 (42 

U.S.C. 5305(a)(13)) is amended by inserting ‘‘and renewal communities’’ after ‘‘enterprise zones’’. 

SEC. 907. SUBSIDY LAYERING REVIEW. 

Section 911 of the Housing and Community Development Act of 1992 (42 U.S.C. 

3545 note) is amended 

(1) in subsection (a)— (A) by striking ‘‘may’’ and inserting ‘‘shall’’; and 

(B) by striking ‘‘, submitted in accordance with’’ and all that follows 

through the end of the subsection and inserting the following: ‘‘that it has 

made the determination required by subsection (m)(2)(A) of such section 42 

upon the first occasion that such determination was required and that it 

will make such determination upon such additional occasions as are required by law or regulation.’’; 

(2) by striking subsections (b) and (c); and 

(3) by redesignating subsection (d) as subsection (b).

SEC. 908. STUDY OF COMMUNITY RENEWAL PROGRAM. 

(a) IN GENERAL.—The Secretary of Housing and Urban Development shall conduct 

a study to analyze the extent to which use of 1990 census data for purposes of determining eligibility of areas for designation as renewal communities for purposes of 

the community renewal program under subchapter X of chapter 1 of Internal Revenue Code of 1986 (26 U.S.C. 1400E et seq.), rather than data from the 2000 census, 

impairs the ability of communities to fully carry out the purposes of such program. 

(b) REPORT.—The Secretary of Housing and Urban Development shall submit a 

report to the Congress, not later September 30, 2004, setting forth the results of 

the study conducted pursuant to subsection (a).

SEC. 909. CORRECTION OF INEQUITIES IN THE SECOND ROUND OF EMPOWERMENT ZONES. 

(a) GRANT AUTHORITY.—There are authorized to be appropriated to the Secretary 

of Housing and Urban Development such sums as may be necessary to make grant 

awards to each of 15 urban empowerment zones designated pursuant to section 

1391(g) of the Internal Revenue Code of 1986, taking into account any amount made 

available pursuant to any prior appropriation made for such zones. 

(b) AUTHORITY TO USE FUNDS TO IMPLEMENT STRATEGIC PLAN.—Funds appropriated under Federal law for an empowerment zone referred to in subsection (a) 

may be used to implement the strategic plan for the zone, including—

(1) economic development; 

(2) infrastructure development; 

(3) workforce development; and 

(4) community development activities. 

46

(c) AUTHORITY TO USE FUNDS TO PAY NON-FEDERAL SHARE OF MATCHING

GRANTS.—Funds appropriated under any Federal law for an empowerment zone referred to in subsection (a) may be used to pay the non-Federal share required in 

connection with another Federal grant-in-aid program undertaken as part of activities assisted under this section. 

SEC. 910. EMPLOYMENT OPPORTUNITIES IN PUBLIC AND INDIAN HOUSING AGENCIES. 

Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) 

is amended— (1) by redesignating subsections (e), (f), and (g) as subsections (f), (g) and (h), 

respectively; 

(2) in subsection (f), as so redesignated, by inserting after paragraph (2) the 

following new paragraph: ‘‘(3) ONE-STOP DELIVERY SYSTEM.—The term ‘one-stop delivery system’ has the 

meaning given that term in section 134(c) of the Workforce Investment Act of 

1998 (29 U.S.C. 2864(c)).’’; and 

(3) by inserting after subsection (d) the following new subsection: ‘‘(e) REQUIREMENT FOR HIRING OF NEW EMPLOYEES.— ‘‘(1) THIRTY PERCENT REQUIREMENT.—It shall be a condition of any contract 

awarded by a public or Indian housing agency for work to be performed in connection with development assistance provided from the Capital Fund under section 9(d) of the United States Housing Act of 1937, or from the Operating Fund 

under section 9(e) of such Act, that, except as provided in paragraph 2(B), a 

minimum of 30 percent of all new employees hired by a contractor for work in 

connection with such contract will be low- or very low-income persons. ‘‘(2) COMPLIANCE.—As a condition of any contract awarded for the work described in paragraph (1), any contractor awarded such a contract shall— ‘‘(A)(i) immediately before beginning work under such contract, submit 

evidence to the satisfaction of the public or Indian housing agency showing 

that a minimum of 30 percent of all new employees hired for work in connection with such contract are low- or very low-income persons; and ‘‘(ii) submit evidence to the satisfaction of the public or Indian housing 

agency showing that a minimum of 30 percent of all subsequently hired 

new employees hired for work in connection with such contract are low- or 

very low-income persons; or ‘‘(B) if such contractor cannot meet the requirement imposed by paragraph (1)— ‘‘(i) submit evidence to the satisfaction of the public or Indian housing 

agency showing that such contractor has given notice of such contract 

to the one-stop delivery system for the area which the housing subject 

to the contract is located, including the particular skills and qualifications needed by potential new employees for work under such contract; 

and 

‘‘(ii) provide to the public or Indian housing agency evidence, as the 

Secretary shall by regulation require, sufficient to show that no newly 

hired employees who are not low- or very low-income persons are performing work in place of skilled low- or very low-income persons who 

were provided by either the public or Indian housing agency or by the 

one-stop delivery system. 

‘‘(3) TRAINING.—Any contractor awarded a contract for the work described in 

paragraph (1) may not provide on-the-job training to any new employee for work 

under such contract unless such new employee is a low- or very low-income person.’’.

SEC. 911. ASSISTANCE FOR NONPROFIT PURCHASERS PRESERVING AFFORDABLE HOUSING. 

(a) GRANTS.—The Secretary of Housing and Urban Development may make 

grants, to the extent amounts are made available for such grants, to eligible entities 

under subsection (b) for use only for operational, working capital, and organizational 

expenses of such entities and activities by such entities to acquire eligible affordable 

housing for the purpose of ensuring that the housing will remain affordable, as the 

Secretary considers appropriate, for low-income or very low-income families (including elderly persons). 

(b) ELIGIBLE ENTITIES.—The Secretary shall establish standards for entities to be 

considered eligible entities for purposes of this section, which shall include requirements that an entity shall—

(1) be a nonprofit organization (as such term is defined in section 104 of the 

Cranston-Gonzalez National Affordable Housing Act) that has a regional or national focus and has been in existence at least 3 years; 

(2) have among its purposes maintaining the affordability to low-income or 

very low-income families of multifamily properties that are at risk of loss from 

47

the inventory of housing that is affordable to low-income or very low-income 

families; 

(3) demonstrate need for assistance under this section for the purposes under 

subsection (a), experience in carrying out activities referred to in such subsection, and capability to carry out such activities; and 

(4) demonstrate financial resources, financial capability, and organizational 

outreach to make best use of scarce Federal resources by—

(A) levering effectively any funding under this section with private-sector 

capital; and 

(B) working in effective cooperation with other similar organizations. 

(c) DEFINITIONS.—For purposes of this section: 

(1) ELIGIBLE AFFORDABLE HOUSING.—The term ‘‘eligible affordable housing’’

means housing that—

(A) consists of more than 4 dwelling units; 

(B) serves exclusively or predominantly a tenancy of low-income families 

or very low-income families, or is insured or assisted under a program of 

the Department of Housing and Urban Development, the Department of 

Agriculture, or applicable State housing finance agency programs under 

which the property is subject to limitations on tenant rents, rent contributions, or incomes; and 

(C) is at risk, as determined by the Secretary, of having loss of affordability because of market rate conversion, deterioration, or demolition. 

(2) LOW-INCOME FAMILIES; VERY LOW-INCOME FAMILIES.—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. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

such sums as may be necessary for grants under this section.

SEC. 912. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES. 

(a) ELIGIBLE ACTIVITIES.—Section 105(a) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)), as amended by the preceding provisions of 

this Act, is further amended by adding at the end the following new paragraph: 

‘‘(27) provision of direct assistance to facilitate and expand homeownership 

among uniformed employees (including policemen, firemen, and sanitation and 

other maintenance workers) of, and teachers who are employees of, the metropolitan city or urban county (or an agency or school district serving such city 

or county) receiving grant amounts under this title pursuant to section 106(b) 

or the unit of general local government (or an agency or school district serving 

such unit) receiving such grant amounts pursuant to section 106(d), except 

that—

‘‘(A) such assistance may only be provided on behalf of such employees 

who are first-time homebuyers under the meaning given such term in section 104(14) of the Cranston-Gonzalez National Affordable Housing Act (42 

U.S.C. 12704(14)), except that, for purposes of this paragraph, such section 

shall be applied by substituting ‘section 105(a)(27) of the Housing and Community Development Act of 1974’ for ‘title II’; 

‘‘(B) notwithstanding section 102(a)(20)(B) or any other provision of this 

title, such assistance may be provided on behalf of such employees whose 

family incomes do not exceed—

‘‘(i) 115 percent of the median income of the area involved, as determined by the Secretary with adjustments for smaller and larger families; or 

‘‘(ii) with respect only to areas that the Secretary determines have 

high housing costs, taking into consideration median house prices and 

median family incomes for the area, 150 percent of the median income 

of the area involved, as determined by the Secretary with adjustments 

for smaller and larger families; 

‘‘(C) such assistance shall be used only for acquiring principal residences 

for such employees, in a manner that involves obligating amounts with respect to any particular mortgage over a period of 1 year or less, by—

‘‘(i) providing amounts for downpayments on mortgages; 

‘‘(ii) paying reasonable closing costs normally associated with the purchase of a residence; 

‘‘(iii) obtaining pre- or post-purchase counseling relating to the financial and other obligations of homeownership; or 

‘‘(iv) subsidizing mortgage interest rates; and 

‘‘(D) any residence purchased using assistance provided under this paragraph shall be subject to restrictions on resale that are—

48

‘‘(i) established by the metropolitan city, urban county, or unit of general local government providing such assistance; and ‘‘(ii) determined by the Secretary to be appropriate to comply with 

subparagraphs (A) and (B) of section 215(b)(3) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12745(b)(3)), except 

that, for purposes of this paragraph, such subparagraphs shall be applied by substituting ‘section 105(a)(27) of the Housing and Community 

Development Act of 1974’ for ‘this title’;’’. (b) PRIMARY OBJECTIVES.—Section 105(c) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(c)) is amended by adding at the end the following 

new paragraph: ‘‘(5) HOMEOWNERSHIP ASSISTANCE FOR MUNICIPAL EMPLOYEES.—Notwithstanding 

any other provision of this title, any assisted activity described in subsection (a)(27) 

of this section shall be considered, for purposes of this title, to benefit persons of 

low and moderate income and to be directed toward the objective under section 

101(c)(3).’’.

SEC. 913. SENSE OF CONGRESS REGARDING HUD OFFICE OF DISABILITY POLICY. 

(a) CONGRESSIONAL FINDINGS.—The Congress finds that— (1) 54,000,000 Americans have disabilities; 

(2) 1,300,000 disabled Americans have worst-case housing needs; 

(3) people with disabilities and their families face unique challenges in securing adequate housing; 

(4) it is the policy of the United States, as enshrined in the Fair Housing Act, 

the Rehabilitation Act of 1973 and the Americans With Disabilities Act of 1990, 

and other Federal laws, that the disabled have the same rights to housing as 

other Americans; 

(5) people with disabilities represent an important constituency of the Department of Housing and Urban Development and rely heavily on many of the Department’s programs for their housing needs; 

(6) people with disabilities need a single, one-stop source for help with their 

housing needs; 

(7) people with disabilities need an advocate within HUD; 

(8) HUD has designated a Deputy Assistant Secretary for Special Needs 

whose responsibilities includes many populations with housing challenges, but 

people with disabilities are not specifically cited as among those responsibilities; 

(9) HUD has, in the past, established special resource offices, such as the Veteran Resource Center (HUDVET), to provide information on HUD’s communitybased programs and services to specific HUD constituents and their families; 

(10) people with disabilities are overlooked in much of HUD’s administrative 

structure and ought to receive as much attention from the Federal Government’s housing agency as other groups with critical housing needs; and 

(11) HUD currently has an Office of Disability Policy, but there has not been 

a Director of that Office since January 2001. 

(b) SENSE OF CONGRESS.—It is the sense of the Congress that the Secretary of 

Housing and Urban Development should—

(1) immediately appoint a permanent Director of the Office of Disability Policy; 

(2) examine the role of the Department’s Office of Disability Policy, its relationship to the Office of Special Needs, and whether and what changes might 

be made to increase attention to people with disabilities within the Department’s programs and policies; and 

(3) establish a resource center for people with disabilities and their families 

within the Office of Disability Policy to serve as a portal into the Department’s 

community-based programs and services.

SEC. 914. TRANSFER OF RURAL MULTIFAMILY RENTAL HOUSING PROJECTS TO NONPROFITS 

AND LOCAL HOUSING AUTHORITIES. 

Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485(h)) is amended—

(1) by striking ‘‘(h) PROJECT TRANSFERS.—After’’ and inserting the following: 

‘‘(h) PROJECT TRANSFERS.—

‘‘(1) LIMITATION.—After’’; and 

(2) by inserting at the end the following new paragraph: 

‘‘(2) TRANSFER AND RENOVATION OF EXISTING PROJECTS.—

‘‘(A) TRANSFER.—In carrying out this Act, the Secretary should encourage 

the transfer of ownership or control of projects for which a loan is made 

or insured under this section to nonprofit organizations and local housing 

authorities (including public housing agencies). 

‘‘(B) RENOVATION.—In carrying out this Act, the Secretary should encourage, and give priority in funding, to the renovation of existing projects for 

49

which a loan is made or insured under this section, subsequent to transfer 

of such projects to nonprofit organizations and housing authorities.’’.

SEC. 915. SENSE OF CONGRESS REGARDING CONSUMER PROTECTION AND HOME WARRANTIES. 

(a) CONGRESSIONAL FINDINGS.—The Congress finds that—

(1) 30,000 newly constructed homes were insured under the National Housing 

Act in 2000 and a majority of those homes were purchased by first-time lowand moderate-income homebuyers; 

(2) approximately 90 percent of those homes are now protected by private sector insurance-backed warranties against structural damage for ten years, and 

an estimated 77 percent of structural damage takes place when a home is four 

years or older, with an average cost of $30,000 per incident of major structural 

damage; 

(3) Mortgagee Letter 2001-27, issued by the Department of Housing and 

Urban Development in October 2001 will have the effect of discouraging the use 

of ten-year insurance-backed warranties, leaving homeowners with a one-year 

builder warranty to protect the value of the home; and 

(4) major structural damage to a home will lead to homeowner defaults and, 

for homes with mortgages insured under the National Housing Act, the Secretary of Housing and Urban Development is liable for 100 percent of the unpaid balance of a mortgage when a homeowner defaults. 

(b) SENSE OF CONGRESS.—It is the sense of the Congress that the Secretary of 

Housing and Urban Development should implement a program to provide incentives 

to homebuilders to offer ten-year insurance-backed private sector warranties for 

newly constructed homes purchased with mortgages insured under the National 

Housing Act. 

SEC. 916. DEMONSTRATION PROGRAM FOR AFFORDABLE HOUSING DATABASE. 

(a) IN GENERAL.—The Secretary of Housing and Urban Development shall carry 

out a demonstration program to allow the development and creation of an electronic 

or otherwise readily available database that provides agencies, municipalities, and 

the general public access to information about available affordable housing and programs that pertain to the affordable housing continuum. The database shall include 

regularly updated lists of rental units that accept rental assistance vouchers under 

the program under section 8 of the United States Housing Act of 1937 (42 U.S.C. 

1437f) and shall contain information about the location of the rental units, the number of units of each bedroom size, and the accessibility of the units to public transportation. 

(b) SELECTION.—The Secretary of Housing and Urban Development shall establish 

the criteria for participation in the demonstration program under this section and, 

during the period consisting of fiscal years 2003 through 2004 shall, to the extent 

amounts are made available under subsection (d), select not more than three applicants for participation in this program. 

(c) REPORT.—Not later than February 1, 2005, the Secretary of Housing and 

Urban Development shall submit a report to the Congress describing the results of 

the demonstration program under this section, analyzing the effectiveness of the 

program, and including recommendations, if any, for continuation or replication. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

such sums as may be necessary for the demonstration program under this section.

SEC. 917. HUD STUDY REGARDING MAIN STREET PARTNERSHIP. 

(a) IN GENERAL.—The Secretary of Housing and Urban Development shall conduct 

a study to determine—

(1) the feasibility and effectiveness of establishing a Federal Main Street 

Partnership Fund to make grants to local communities to assist in making fasttrack changes to zoning and planning regulations that may inhibit the revitalization of downtown commercial areas for mixed-use affordable housing as well 

as commercial uses; 

(2) the extent to which local zoning and planning regulations inhibit the ability of developers to create affordable housing in traditional Main Street commercial districts where commercially zoned buildings have vacant and serviceable housing which cannot be used for housing due to such zoning; 

(3) whether fast-tracking zoning modifications and other related incentives 

would reduce the costs of redeveloping commercial buildings in traditional Main 

Street commercial districts for mixed-use affordable housing as well as commercial and retail uses; and 

(4) what eligible planning activities should receive funding under such a Federal Main Street Partnership Fund, such as salary of staff involved in fast-track 

re-zoning and surveying and mapping involved in the rezoning. 

50

(b) WORKING GROUP.—In conducting the study, the Secretary shall convene a 

working group and shall solicit views and recommendations from the members of 

the group. The group shall include representatives of local governments of varying 

sizes in various regions, developers, realtors, mortgage bankers, community bankers, local non-profit business membership organizations, such as Chambers of Commerce, community-based affordable housing advocacy organizations, and such other 

parties as the Secretary considers appropriate. 

(c) REPORT.—Not later than 180 days after the date of the enactment of this Act, 

the Secretary shall submit a report regarding the findings of the study, which shall 

include recommendations regarding the establishment of a Federal Main Street 

Partnership Fund, to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.

SEC. 918. CONTRACTUAL COMMITMENTS FOR RURAL MULTIFAMILY RENTAL HOUSING. 

(a) PREPAYMENT.—Notwithstanding any other provision of law and subject only to 

subsection (d) of this section, an owner of eligible low-income rural housing may prepay the loan on such housing made or insured under section 514 or 515 of the Housing Act of 1949 without restrictions at any time after the later of—

(1) 20 years from the date on which the loan was made; and 

(2) the date until which the owner has agreed with the Secretary of Agriculture, or the Secretary’s delegee, to maintain the low-income use of the housing. 

(b) ELIGIBLE LOW-INCOME RURAL HOUSING.—For purposes of this section, the 

term ‘‘eligible low-income rural housing’’ means housing that is financed by a loan 

made or insured under section 514 or 515 of the Housing Act of 1949 (42 U.S.C. 

1484, 1485) pursuant to a contract entered into prior to December 15, 1989. 

(c) TENANT PROTECTION.—

(1) PROVISION OF ENHANCED VOUCHER ASSISTANCE.—To the extent that 

amounts for assistance pursuant to this subsection are provided in advance in 

appropriation Acts, upon the prepayment of a loan pursuant to this section, enhanced voucher assistance under section 8(t) of the United States Housing Act 

of 1937 (42 U.S.C. 1437f(t)) shall be made available on behalf of each low-income family who is residing in the project on the date the loan is prepaid. 

(2) ENSURING ABILITY TO USE ENHANCED VOUCHER ASSISTANCE.—Each low-income family residing in the project on the date the loan is prepaid may elect 

to remain in the same project, subject to the terms of the lease for rental of 

the dwelling unit, and may use such enhanced voucher assistance for lease of 

such dwelling unit. The owner of the project may not refuse to accept enhanced 

voucher assistance made available on behalf of any such low-income family for 

lease of such a dwelling unit or to enter into a housing assistance payments 

contract for such a unit. 

(d) TENANT PROTECTION AND NOTICE REQUIREMENTS.—An owner of eligible lowincome rural housing may not, pursuant to subsection (a), prepay the loan on such 

housing made or insured under section 514 or 515 of the Housing Act of 1949 unless—

(1) amounts are provided in advance in appropriation Acts, and are obligated, 

for assistance pursuant to subsection (c) of this section on behalf of each lowincome family who is residing in the project on the date that the loan is prepaid; and 

(2) not less than 150 days before such prepayment, the owner of the project 

provides written notice of intent to prepay, in such form as the Secretary of Agriculture shall prescribe, to each tenant of the housing, the Secretary of Agriculture, the Secretary of Housing and Urban Development, and the chief executive officer of the appropriate State or local government for the jurisdiction 

within which the housing is located. 

(e) CONFORMING AMENDMENT.—Section 8(t)(2) of the United States Housing Act 

of 1937 (42 U.S.C. 1437f(t)(2)) is amended—

(1) by inserting ‘‘or loan’’ after ‘‘the prepayment of the mortgage’’; and 

(2) by inserting ‘‘section 914 of the Housing Affordability for America Act of 

2002,’’ after ‘‘(12 U.S.C. 4113(f)),’’.

PURPOSE AND SUMMARY

H.R. 3995, the Housing Affordability for America Act, will increase the availability of affordable housing and expand homeownership opportunities across the United States. This legislation 

reforms current housing programs recognizing the importance of 

51

homeownership as an opportunity to allow families to acquire and 

build wealth. Concurrently, H.R. 3995 recognizes that affordable 

rental housing is the first step in a process of moving working families to homeownership, strengthening communities, and improving 

quality of life. 

BACKGROUND AND NEED FOR LEGISLATION

Housing is the number one consumer product in America. While 

the homeownership rate stands at an impressive 68 percent, there 

are still some that are unable to share in that dream. With this 

bill, Congress has an opportunity to meet the housing needs of 

even more Americans. 

In addition to addressing this country’s critical housing needs, 

this bill will have the added benefit of providing additional stimulus to a recovering economy. The recession hit almost every industry hard—except for housing. In fact, the robust housing market 

was more than likely responsible for reducing the impact of the recession. 

The Subcommittee on Housing and Community Opportunity held 

13 hearings during the 107th Congress to explore housing issues 

including affordability and availability. In those hearings, the Committee heard from community activists, housing experts, local and 

Federal government officials and representatives from the home 

building, real estate and mortgage industries regarding the obstacles to home ownership and affordable rental housing across the 

country. H.R. 3995 is a product of those hearings. 

According to the Joint Center for Housing Studies of Harvard 

University’s 2001 annual report entitled ‘‘The State of the Nation’s 

Housing’’, more than 14 million Americans have critical housing 

needs, meaning that they spend more than half of their income on 

housing or live in substandard housing. Moreover, given the law of 

supply and demand, less supply means higher home sales prices as 

well as higher rental costs. Therefore, working families, such as 

public safety officers, tradesmen, or teachers, find it increasingly 

difficult to purchase or rent housing near the places they work. 

In the case of the working poor, elderly and disabled, the existing 

Federal rental assistance program provides tenant-based vouchers 

for use in the private sector. Under the best scenario, a voucher recipient could easily use a Federal rental voucher to select housing 

that best suits their family needs, including proximity to work, 

child care, educational facilities, and transportation centers. Under 

the worst scenario, a working family has a voucher they are unable 

to use because their community is either a high cost area or lacks 

available rental units. The Housing Subcommittee hearings revealed that the latter was more of the rule than the exception. 

In every aspect of housing, whether it be housing for elderly, disabled, low and moderate-income families, one thing was clear: new 

production of affordable single and multifamily housing is essential. Home ownership and affordable rental opportunities are the 

primary ingredients to the country’s mission of strengthening and 

building safe communities. Congress must continue to seek ways to 

remove the barriers that prevent certain segments of the population from realizing the American dream of homeownership. One 

way to do that is to provide opportunities that allow families to acquire and build wealth toward the goal of homeownership. 

52

There was considerable debate in Committee on how best to address the need for new production of affordable housing. H.R. 3995, 

as introduced, created a separate production/rehabilitation/preservation program within the existing HOME program targeted toward very low and extremely low income families. An alternative 

proposal to create a national housing trust fund was at the center 

of the debate.

In the end, the Committee approved a compromise proposal that 

would provide matching money for States and localities that already have their own trust funds for affordable housing. Of the 

total money available for matching funds, 40 percent would go to 

participating States and 60 percent to participating jurisdictions. 

These grants would be administered through the HOME investment partnership program. States and localities would be required 

to use these grants for the production, preservation or rehabilitation of affordable housing for very low and extremely low-income 

families. This bill does not preclude States and localities from creating new trust funds. In fact, it will act as an incentive for them 

to create their own trust funds so that they can have access to the 

funds. This grant program is to be funded through new appropriations and not taken out of the existing HOME appropriations. 

Rather than creating a new Federal housing trust fund, this money 

would go directly to State and local jurisdictions with existing trust 

funds. Clearly, States and localities are better equipped to know 

how best to meet the housing needs of their communities. 

In addition to increasing production, preservation and rehabilitation capabilities, Federal Housing Programs must also provide 

State and local government, housing authorities and community 

development organizations with more flexibility to administer the 

Federal housing programs so they can better meet the needs of 

their communities. With that in mind, H.R. 3995 makes changes to 

many of the programs under HUD’s jurisdiction. 

To improve the efficiency and effectiveness of the HOME program, H.R. 3995 makes changes to the HOME program. HOME is 

the largest Federal block grant to State and local governments designed exclusively to create affordable housing for low-income 

households. Each year it allocates more than $1.5 billion among the 

States and hundreds of localities nationwide. Through the formation of private public partnerships, HOME is meeting the critical 

needs of affordable housing. It is estimated that each HOME dollar 

generates or leverages about $4 in additional private-sector investment. 

H.R. 3995 seeks to provide new and more efficient ways to assist 

first-time homebuyers. Often the biggest obstacle for first-time 

homebuyers is the downpayment. This bill includes the President’s 

new initiative, the American Dream Downpayment Fund. This 

fund is designed to help first-time low-income homebuyers, who 

often struggle to meet downpayment and closing costs. 

The Committee is concerned that, when establishing a downpayment assistance allocation formula pursuant to the American 

Dream Downpayment program, the HUD Secretary will base a participating jurisdiction’s prior commitment to homebuyers solely on 

that jurisdiction’s use of HOME Investment Partnerships program 

funds for homebuyer activities. HOME program funds committed to 

homebuyer activities may not accurately reflect a jurisdiction’s 

53

total commitment to homebuyer activities, as there are other Federal, State, and local resources that jurisdictions use for such activities. 

Further, the Committee believes that a formula based solely on 

a jurisdiction’s use of HOME funds for homebuyer activities is contrary to Congress’ intent that participating jurisdictions have discretion in how to use HOME funds to meet locally determined 

housing needs. To the extent a formula bases future down payment 

assistance allocations on future HOME spending on homebuyer activities, that formula may unduly interfere with the flexible nature 

of the HOME program, which has been its greatest strength. The 

Committee intends to reward jurisdictions that support homeownership. 

The Committee will work with the Administration to resolve any 

issues that may have an unintended impact on cities and State’s 

flexibility to use HOME funds and provide downpayment assistance. Finally, the Committee intends for the American Dream 

Downpayment Fund to receive new appropriations and not to be 

funded with appropriations from the existing HOME program. 

H.R. 3995 also makes changes to the existing Federal Housing 

Administration (FHA) program. The FHA is one of the most effective programs in helping low-income buyers purchase their first 

home. It was originally designed to encourage lenders to make 

credit more readily available and at lower rates. Through the FHA 

program, HUD insures mortgages and loans made by HUD-approved lenders for a wide variety of purposes, including new construction, rehabilitation, property improvement, and refinancing in 

connection with a wide variety of types of property. FHA programs 

include all types of residential property (multifamily, single family, 

manufactured homes), nonresidential commercial property, hospitals and certain other healthcare facilities. 

In the FHA Multifamily Housing program, H.R. 3995 indexes 

FHA mortgage limits to the annual construction cost indexes of the 

Bureau of the Census of the Department of Commerce which reflect building, land, and impact fee cost increases in the future. The 

FY 2002 HUD–VA Appropriations Act provided for a 25 percent increase of the multifamily loan limits, the first such increase in approximately 8 years. The 25 percent increase in the loan limits reflects the increases in construction costs over the last ten years. 

The indexing will address future cost increases in a manner that 

keeps the index current and relevant to existing multi family housing costs. In addition, the bill increases the maximum high-cost 

percentage from 110 percent to 140 percent and provides discretion 

to the Secretary of HUD to increase the 140 percent to 170 percent 

on a case by case basis to allow for production in extremely expensive markets. 

This bill includes provisions to modernize the thirty-year old 

healthcare mortgage insurance programs of sections 232 and 242 of 

the National Housing Act to make them more consistent with today’s method of delivering healthcare and assisted living services 

for the elderly, sick, injured, and disabled. 

In the FHA Single Family Housing program, H.R. 3995 makes 

permanent the FHA downpayment simplification calculation. Currently, this program is scheduled to terminate on December 31, 

54

2002. This calculation simplifies the process of buying a home by 

making it easier to understand. 

The bill authorizes low down payment FHA mortgages for teachers, police, and firefighters buying a home in their local school district or employing jurisdiction. This will make it easier for these 

public servants to live in the area in which they serve. The bill also 

increases the flexibility of the cap on FHA adjustable-rate mortgages and establishes a uniform national loan limit for home equity 

conversion mortgages (HECM). Currently, HECM loans are subject 

to the county-by-county FHA loan limits for traditional mortgages. 

Seniors living in low-cost areas could be subject to disparate treatment. For example, a senior living in Des Moines with a home 

worth $175,000 can get an FHA reverse mortgage for only 

$144,336, which is the FHA mortgage limit in Des Moines. However, a senior living in Los Angeles with a home worth the same 

amount can get a reverse mortgage for the full $175,000 because 

the FHA mortgage limit in Los Angeles is $237,500. Setting a uniform loan limit for reverse mortgages will provide seniors a way to 

stay in their homes but can no longer afford the expenses associated with owning a home. Finally, H.R. 3995 makes changes to the 

FHA program to tighten requirement and administration of the 

203(k) FHA program. 

Further compounding the Nation’s critical housing needs is the 

growing numbers of seniors who are suffering from worst case 

housing needs. There are over 34 million Americans aged 65 years 

and older. By the year 2025, that number will increase to 62 million, or one in every six Americans. From 1991 to 1997, the number 

of senior low-income renters paying more than 50 percent of income 

toward rent rose 8 percent; at the same time, the number of senior 

low-income households receiving public rental assistance dropped 

13 percent. These factors could combine to create a crisis-level lack 

of affordable housing for senior citizens within the next decade. 

On July 17, 2001, the Housing and Community Opportunity Subcommittee heard testimony from a variety of experts regarding the 

difficult problems that elderly face not only in finding suitable, affordable housing, but also coordinating with the services that are 

urgently needed by the elderly. It is widely understood that it is 

more cost effective to provide services such as meals, transportation, personal care and health care to the elderly in their homes 

rather than moving them into costly nursing facilities. How best to 

accomplish that goal is unclear. In addition, much of our elderly 

stock is in need of repair, retrofitting or renovation. H.R. 3995 establishes a demonstration program for elderly housing for 

multigenerational families and for grandparent-headed households. 

The bill makes this an eligible activity but does not expect new appropriations specifically for this purpose. It also authorizes grants 

for the repair of Federally assisted housing for the elderly. 

During consideration of H.R. 3995, there was considerable discussion regarding the section 811 disabled housing tenant-based 

rental assistance program. The Committee recognizes that the program guidance policies for this program have not been fully developed. The Committee, therefore, strongly encourages HUD to develop program guidance and policies for the section 811 tenantbased rental assistance program to ensure that it expands supportive housing for people with severe disabilities most in need, 

55

promotes participation by non-profit disability organizations with 

the capacity to develop supportive housing, and allows for flexible 

use of section 811 funds for project-based and sponsor-based rental 

assistance as well as tenant-based assistance, when appropriate, to 

meet the supportive housing needs of people with disabilities. Additionally, the Committee plans to work with the Administration to 

develop a plan for ensuring long-term renewal of Section 811 tenant-based rental assistance where necessary. 

To better meet the housing needs of low-income families, States, 

Public Housing Authorities (PHAs) and tenants need greater flexibility within the section 8 Rental Housing Program and public 

housing programs. H.R. 3995 includes provisions to increases payment standards and to allow Public Housing Authorities to use up 

to 2 percent of funds for finding housing for ‘‘hard to house’’ families. In addition, H.R. 3995 includes several administrative changes 

to the public housing programs designed to improve the efficiency 

and success of public housing authorities (PHAs). 

The committee recognizes that there may be disparities between 

large and small PHAs. For this reason, the Committee temporarily 

suspended planning requirements for small PHAs. Small PHAs are 

defined as those that administer 100 or fewer public housing dwellings. In the Committee hearings, concerns were raised regarding 

the impact this provision would have on tenant participation. It is 

not the intention of this Committee to limit tenant participation or 

interaction between tenant organizations and PHAs. Rather, it is 

the expectation of the Committee that PHAs will continue the practice of interacting with duly elected tenant and resident organizations and will provide reasonable resources where appropriate. Additionally, under the existing plan requirements, PHAs are required to make available for public review documents that support 

their policies. This does not mean that PHAs must develop material from scratch just for the purpose of public review. Instead, 

these are documents that they must develop independent of annual 

plans to help develop policy. The documents include a PHA’s most 

recently approved operating budget. Having access to this information helps resident groups to make informed decisions about policy 

ideas. 

Through its hearings, the Committee examined many of HUD’s 

programs designed to promote public private partnerships, such as 

HOPE VI, Community Development Block Grants (CDBG), Empowerment Zones, and Renewal Communities. These programs represent some of the most cost-effective ways to meet our growing 

housing needs. With that in mind, H.R. 3995 makes changes in 

each one of these programs to make them more flexible, efficient 

and cost effective. 

The HOPE VI program is a good example of a public private 

partnership that has done much to revitalize many of the Nation’s 

severely distressed public housing developments. This program provides incentives for PHAs and private entities to form partnerships 

and create mixed-finance and mixed-income affordable housing. 

This housing is developed and operated very differently from traditional public housing. The activities permitted under HOPE VI include, but are not limited to: the capital cost of demolition, major 

reconstruction, rehabilitation and other physical improvements. 

H.R. 3995 reauthorizes and reforms the HOPE VI program to allow 

56

smaller communities to participate in the program and to make 

sure that recipients use the money in a timely and cost-effect manner. 

Regarding homelessness, H.R. 3995 reauthorizes HUD’s homeless programs through FY 2004 and funds renewals of contracts 

through the Housing Certificate Fund, for one year at a time, 

through 2004. In addition, the legislation sets a national goal to 

end homelessness within 10 years which is consistent with the 

President’s statements and goals. 

HOPWA (Housing Opportunities for Persons with AIDS) is a 

housing program designed specifically to assist individuals diagnosed with HIV/AIDs and their families. H.R. 3995 reauthorizes 

HOPWA through 2004. Pursuant to the debate during consideration of H.R. 3995, the Committee intends to hold additional hearings on HOPWA and may ask General Accounting Office (GAO) to 

conduct a report. 

The Native American Housing Assistance and Self-Determination 

Act of 1996 (NAHASDA) expires on September 30, 2001. 

NAHASDA authorized Indian Housing Block Grant programs 

(IHBG), which were established to provide housing assistance 

under a single block grant to eligible Indian Tribes or their tribally 

designated housing entities (TDHEs). Eligible tribes include both 

Federally recognized and, to a limited degree, certain State-recognized Indian tribes formerly eligible under the 1937 Act. The allocation is made under a needs-based formula. The tribe must submit for HUD review and approval both a one-year and a five-year 

Indian Housing plan containing goals, mission, and methodology by 

which the recipient will accomplish its objective during the grant 

period. The Tribal Housing Activities Guarantees can be used to finance eligibly affordable housing activities under the IHBG program. H.R. 3995 reauthorizes the IHBG, the Guarantees for Tribal 

Housing Activities; and Training and Technical Assistance. 

Needless regulation adds to the cost of housing. Currently, Federal agencies are required to conduct certain economic analyses 

when promulgating new rules. However, there is no such requirement that any analysis be done for a rule’s impact on housing affordability. Title VIII is designed to heighten public awareness of 

the costs to housing affordability of certain regulations when there 

is a significant adverse impact on housing affordability. By reducing the cost of regulation, the cost of homeownership can be lowered. That is why H.R. 3995 requires a housing impact analysis of 

any new rule of a Federal agency that has an economic impact of 

$100,000,000 or more. 

It is time for Congress to restore confidence and accountability 

to our nation’s housing programs and policies. This legislation will 

go a long way toward reaching that goal. 

HEARINGS

The Subcommittee on Housing and Community Opportunity held 

a hearing on April 10, 23, and 24, 2002 on H.R. 3995, the Housing 

Affordability for America Act of 2002. The following witnesses testified on day 1 of the hearing: The Honorable Bernard Sanders, 

M.C.; The Honorable Barbara Lee, M.C.; Mr. Javier Gonzales, 

Commissioner, Santa Fe County, New Mexico, appearing on behalf 

of the National Association of Counties, National Community DeVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00056 Fmt 6659 Sfmt 6602 E:\HR\OC\HR640P2.107 HR640P2
57

velopment Association, National Association for County Community 

and Economic Development, and National Association of Local 

Housing Finance Agencies; Ms. Mary E. Brooks, Housing Trust 

Fund Project/Center for Community Change; Mr. William Faith, 

Coalition on Housing and Homelessness in Ohio, appearing on behalf of the National Low Income Housing Coalition; Ms. Katherine 

(Kit) G. Hadley, Commissioner, Minnesota Housing Finance Agency, appearing on behalf of National Council of Housing Finance 

Agencies; Ms. Catherine Racer, Associate Director, Massachusetts 

Department of Housing and Community Development on behalf of 

the Council of State Community Development Agencies; Ms. Barbara Sard, Director of Housing Policy, Center on Budget and Policy 

Priorities; Mr. Benson Roberts, Local Initiatives Support Corporation; Mr. Robert Lawson, appearing on behalf of the National Association of Homebuilders; and Mr. Rodrigo Lopez, President, 

AmeriSphere Multifamily Finance, L.L.C., Omaha, NE and ViceChair of the Legislative Steering Committee of the Mortgage Banking Association. 

The following witnesses testified on day 2 of the hearing: Ms. 

Telissa Dowling, President of the Resident Advisory Board, New 

Jersey Department of Community Affairs on behalf of the National 

Low Income Housing Coalition; Ms. Joan Walker Frasier, President 

of the Atlantic City Residents Advisory Board, Atlantic City, New 

Jersey on behalf of Ed Williams, President of ENPHRONT (formerly Public Housing Residents National Organizing Campaign); 

Mr. Kevin E. Marchman, Executive Director, National Organization of African Americans in Housing, Washington, D.C.; Ms. Terri 

Hamilton Brown, Executive Director, Cuyahoga Metropolitan Housing Authority, Cleveland, Ohio; Mr. Hans Dekker, Baton Rouge 

Area Foundation, Baton Rouge, Louisiana; Mr. Harry A. Byrd, Jr., 

Principal, The Harkin Group, LLC, Huntersville, N.C.; Mr. Thomas 

Slemmer, President and CEO, National Church Residences, Columbus, Ohio on behalf of American Association of Homes and Services 

for the Aging; Mr. Andrew Sperling, Deputy Executive Director, 

National Alliance for the Mentally Ill, Arlington, VA and the Consortium for Citizens with Disabilities Housing Task Force; Ms. 

Maureen Friar, Executive Director, Supportive Housing Network of 

New York, in her capacity as Advisory Committee Member of the 

National Alliance to End Homelessness, Washington, D.C.; Mr. Roy 

Ziegler, former Director of New Jersey Department of Community 

Affairs, Section 8, on behalf of National Leased Housing Association, Washington, D.C.; and Mr. Gary Eisenman, Executive Vice 

President of Related Capital Company, on behalf of the National 

Multi-Housing Council, Washington, D.C. 

The following witnesses testified on day 3 of the hearing: The 

Honorable John C. Weicher, Assistant Secretary for Housing, Federal Housing Commissioner, Department of Housing and Urban 

Development; The Honorable Roy Bernardi, Assistant Secretary for 

Community Planning and Development, Department of Housing 

and Urban Development; The Honorable Michael Liu, Assistant 

Secretary for Public and Indian Housing, Department of Housing 

and Urban Development; Mr. Thomas J. McCool, Managing Director, Financial Markets and Community Investment, General Accounting Office; Mr. John Courson, President, Central Pacific Mortgage Company on behalf of the Mortgage Bankers Association of 

58

America; Mr. Martin Edwards, Jr., President, National 

Awssociation of Realtors; Mr. Kevin P. Kelly, Weiner & Associates, 

Wilmington, Delaware on behalf of the National Association of 

Home Builders; Mr. Edward L. Shapoff, Vice President, Goldman, 

Sachs & Co. on behalf of the Healthcare Financing Study Group; 

and Mr. Louis P. Cannon, President, Fraternal Order of Police, District of Columbia State Lodge. 

The Subcommittee also held 13 other oversight hearings used in 

the development of provisions of this legislation. 

COMMITTEE CONSIDERATION

The Subcommittee on Housing and Community Opportunity met 

in open session on June 18, 2002 and approved H.R. 3995 for full 

Committee consideration, as amended, by a voice vote. 

The Committee on Financial Services met in open session on 

June 20, 26, and July 10, 2002 and ordered H.R. 3995 reported to 

the House, with an amendment, by a voice vote. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Mr. 

Oxley to report the bill to the House with a favorable recommendation was agreed to by a voice vote. 

The following amendments were considered by a record vote:

59

An amendment offered by Mr. Sanders, No. 9, establishing a National Affordable Housing Trust Fund from 

FHA surplus, was agreed to by a record vote of 33 yeas 

and 28 nays (Record vote No. 44). 

YEAS NAYS 

Mr. Baker Mr. Oxley 

Mr. LaFalce Mr. Bereuter 

Mr. Frank Mr. Bachus 

Mr. Kanjorski Mr. Castle 

Ms. Waters Mr. King 

Mr. Sanders Mr. Royce 

Mrs. Maloney of New Mr. Lucas of Oklahoma 

York Mr. Ney 

Mr. Gutierrez Mrs. Kelly 

Ms. Vela ́zquez Mr. Paul 

Mr. Watt of North Mr. Gillmor 

Carolina Mr. Cox 

Mr. Bentsen Mr. Weldon of Florida 

Mr. Maloney of Mr. Ryun of Kansas 

Connecticut Mr. Riley 

Ms. Hooley of Oregon Mr. LaTourette 

Ms. Carson of Indiana Mr. Jones of North 

Mr. Sherman Carolina 

Mr. Sandlin Mrs. Biggert 

Mr. Meeks of New York Mr. Green of Wisconsin 

Mr. Lee Mr. Shadegg 

Mr. Mascara Mr. Fossella 

Mr. Inslee Mr. Gary G. Miller of 

Ms. Schakowsky California 

Mr. Moore Mr. Cantor 

Mr. Gonzalez Mr. Grucci 

Mrs. Jones of Ohio Ms. Hart 

Mr. Capuano Mr. Ferguson 

Mr. Ford Mr. Rogers of Michigan 

Mr. Hinojosa Mr. Tiberi 

Mr. Lucas of Kentucky 

Mr. Shows 

Mr. Crowley 

Mr. Clay 

Mr. Israel 

Mr. Ross

60

An amendment offered by Ms. Lee, No. 10, providing 

downpayment assistance and foreclosure prevention assistance the Downpayment Initiative, was not agreed to by a 

record vote of 29 yeas and 31 nays (Record vote No. 45). 

YEAS NAYS 

Mr. LaFalce Mr. Oxley 

Mr. Frank Mr. Bereuter 

Mr. Kanjorski Mr. Baker 

Ms. Waters Mr. Bachus 

Mr. Sanders Mr. Castle 

Mrs. Maloney of New Mr. King 

York Mr. Royce 

Mr. Gutierrez Mr. Lucas of Oklahoma 

Ms. Vela ́zquez Mr. Ney 

Mr. Watt of North Mrs. Kelly 

Carolina Mr. Gillmor 

Mr. Bentsen Mr. Cox 

Mr. Maloney of Mr. Weldon of Florida 

Connecticut Mr. Ryun of Kansas 

Ms. Hooley of Oregon Mr. Riley 

Ms. Carson of Indiana Mr. LaTourette 

Mr. Sherman Mr. Jones of North 

Mr. Sandlin Carolina 

Mr. Meeks of New York Mr. Ose 

Ms. Lee Mrs. Biggert 

Mr. Mascara Mr. Green of Wisconsin 

Ms. Schakowsky Mr. Toomey 

Mr. Moore Mr. Shadegg 

Mr. Gonzalez Mr. Fossella 

Mrs. Jones of Ohio Mr. Gary G. Miller of 

Mr. Capuano California 

Mr. Ford Mr. Cantor 

Mr. Hinojosa Mr. Grucci 

Mr. Lucas of Kentucky Ms. Hart 

Mr. Shows Mrs. Capito 

Mr. Crowley Mr. Ferguson 

Mr. Clay Mr. Rogers of Michigan 

Mr. Tiberi

61

An amendment by Mr. Sanders (as modified by unanimous consent) to the amendment offered by Mrs. Kelly, 

No. 16a, replacing initial Sanders amendment with language that would provide for a National Housing Trust 

Fund with funding through the appropriations process 

rather than FHA surplus, was not agreed to by a record 

vote of 34 yeas and 35 nays (Record vote No. 52). 

YEAS NAYS 

Mr. Shays Mr. Oxley 

Mr. LaFalce Mr. Leach 

Mr. Frank Mr. Bereuter 

Mr. Kanjorski Mr. Baker 

Ms. Waters Mr. Bachus 

Mr. Sanders Mr. Castle 

Mrs. Maloney of New Mr. King 

York Mr. Royce 

Mr. Gutierrez Mr. Lucas of Oklahoma 

Ms. Vela ́zquez Mr. Ney 

Mr. Watt of North Mr. Barr of Georgia 

Carolina Mrs. Kelly 

Mr. Ackerman Mr. Paul 

Mr. Bentsen Mr. Gillmor 

Mr. Maloney of Mr. Cox 

Connecticut Mr. Weldon of Florida 

Ms. Hooley of Oregon Mr. Ryun of Kansas 

Ms. Carson of Indiana Mr. Riley 

Mr. Sherman Mr. LaTourette 

Mr. Sandlin Mr. Manzullo 

Mr. Meeks of New York Mr. Jones of North 

Ms. Lee Carolina 

Mr. Mascara Mr. Ose 

Mr. Inslee Mrs. Biggert 

Ms. Schakowsky Mr. Green of Wisconsin 

Mr. Moore Mr. Toomey 

Mr. Gonzalez Mr. Shadegg 

Mrs. Jones of Ohio Mr. Fossella 

Mr. Capuano Mr. Gary G. Miller of 

Mr. Ford California 

Mr. Hinojosa Mr. Cantor 

Mr. Lucas of Kentucky Mr. Grucci 

Mr. Shows Ms. Hart 

Mr. Crowley Mrs. Capito 

Mr. Clay Mr. Ferguson 

Mr. Israel Mr. Rogers of Michigan 

Mr. Ross Mr. Tiberi

62

The following other amendments and motions were also considered by the Committee:

An amendment offered by Mr. Oxley, No. 1, requiring 

HUD to conduct a pilot program to determine the benefits 

of financial counseling to preventing foreclosures for first 

time homebuyers buying properties in high foreclosure 

neighborhoods and providing a transfer of rural multifamily rental housing projects to non-profit and local housing authorities, was agreed to by a voice vote. 

An amendment offered by Mr. LaFalce, No. 2, allowing 

the Secretary of Housing and Urban Development to continue to administer the Disposition of Assets in Revitalization Areas program, was agreed to by a voice vote.

An amendment offered by Mr. Gary G. Miller of California, No. 3, creating a maximum mortgage amendment 

for California, was withdrawn. 

An amendment offered by Mr. Leach (as modified by 

unanimous consent), No. 4, providing assistance to smaller 

communities through Hope VI grants for assisting affordable housing through main street projects, was agreed to 

by a voice vote. 

An amendment offered by Mrs. Jones of Ohio, No. 5, requiring that the Secretary of Housing and Urban Development conduct a study to assess the needs of community 

based economic development organizations, was withdrawn. 

An amendment offered by Mr. Tiberi, No. 6, modifying 

the term ‘‘public safety officer’’ to include Federal police officers, was agreed to, by a voice vote. 

An amendment offered by Ms. Hart, No. 7, expressing 

the Sense of Congress regarding consumer protection and 

home warranties, was agreed to by a voice vote. 

An amendment offered by Mr. Maloney of Connecticut, 

No. 8, providing HUD foreclosure guidance on section 202 

elderly housing developments, was agreed to by a voice 

vote. 

An amendment offered by Mr. Watt, No. 11, requiring 

the Secretary of Housing and Urban Development to create a national database with information about available 

affordable housing programs, an amendment offered by 

Mr. Capuano, No. 12, an amendment offered by Mr. Israel, 

No. 13, requiring the Department of Housing and Urban 

Affairs to review the feasibility and effectiveness of establishing a Federal Main Street Partnership Fund to make 

grants to local communities, were agreed to en bloc by 

unanimous consent. 

An amendment offered by Mr. Ney, No. 14, (as modified 

by unanimous consent) allowing owners of low-income 

rural housing to prepay the loan on such housing without 

penalties, was agreed to by a voice vote. 

An amendment by Mr. Bereuter to the amendment offered by Mrs. Kelly, No. 14a, providing that prepayment of 

low-income rural housing loans would not be allowed unless funds were appropriated for enhanced vouchers to protect tenants, was agreed to by a voice vote. 

63

An amendment offered by Mr. Watt, No. 15, increasing 

the payment standard to 120 percent of the fair market 

rent without HUD approval for section 8 rental subsidy, 

was agreed to by a voice vote. 

An amendment offered by Mrs. Kelly, No. 16, striking 

the Sanders trust fund language and establishing matching grants for states and localities that already have their 

own affordable housing trust funds, was agreed to, as 

amended by a voice vote. 

An amendment by Mr. Bereuter to the amendment offered by Mrs. Kelly, No. 16b, clarifying that of the total 

money available for matching funds, 40 percent would go 

to participating states and 60 percent to participating local 

jurisdictions, was agreed to by a voice vote. 

An amendment by Ms. Lee, No. 17, narrowing the onestrike policy used by the Department of Housing and 

Urban Development (HUD) to evict low-income tenants for 

drug-related crimes committed by their relatives or guests, 

was withdrawn. 

An amendment by Ms. Lee, No. 18, providing protection 

of domestic violence victims under the HUD one-strike policy, was agreed to by voice vote. 

An amendment by Ms. Lee, No. 19, reauthorizing the 

Public Housing Drug Elimination Program, was not agreed 

to, by a voice vote. 

An amendment by Mr. Weldon of Florida, No. 20, adding 

three requirements to the Housing for People with Aids 

program, was withdrawn. 

An amendment by Mr. Baker, No. 21, placing limitations 

on certain real estate brokerage and lending activities, was 

withdrawn. 

An amendment offered by Ms. Lee, No. 22, authorizing 

the transfer of unused section 8 funds to a local community’s HOME account or for use in the local public housing 

Capital Fund, was not agreed to by a voice vote.

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee held a hearing and made findings that are reflected in this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

The Department of Housing and Urban Development will improve the availability of low-income housing and increase opportunities for homeownership through the use of targeted incentives 

and grants and by increasing flexibility for State and local housing 

authorities. 

64

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that this legislation 

would result in no new budget authority, entitlement authority, or 

tax expenditures or revenues. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, September 10, 2002. 

Hon. MICHAEL G. OXLEY, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3995, the Housing Affordability for America Act of 2002. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Chad Chirico. 

Sincerely, 

BARRY B. ANDERSON

(For Dan L. Crippen, Director). 

Enclosure. 

H.R. 3995—Housing Affordability for America Act of 2002

Summary: H.R. 3995 would amend and extend certain laws relating to housing opportunity and community development. The bill 

would seek to increase the availability of affordable housing and 

expand homeownership opportunities across the country. H.R. 3995 

would authorize appropriations to fund both new initiatives and existing housing programs. 

CBO estimates that implementing this legislation would cost 

about $13.5 billion over the next five years, assuming appropriation 

of the necessary amounts. CBO estimates that enacting the bill 

would not affect direct spending or receipts; therefore, pay-as-yougo procedures would not apply. 

H.R. 3995 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 3995 is summarized in Table 1. The costs of 

this legislation would fall within budget functions 370 (mortgage 

65

and housing credit), 450 (community and regional development), 

and 600 (income security).

TABLE 1.—ESTIMATED BUDGETARY EFFECTS OF H.R. 3995

By fiscal year, in millions of dollars—

2002 2003 2004 2005 2006 2007

SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law: 

Estimated Authorization Level 1 .......................................... 17,888 17,826 18,682 19,317 19,917 20,508

Estimated Outlays ............................................................... 20,257 20,529 20,858 20,998 21,143 21,239

Proposed Changes: 

Estimated Authorization Level ............................................. 0 5,609 6,017 2,737 3,019 3,260

Estimated Outlays ............................................................... 0 625 2,018 3,140 3,764 3,941

Proposed Spending Under H.R. 3995: 

Estimated Authorization Level ............................................. 17,888 23,435 24,699 22,054 22,936 23,768

Estimated Outlays ............................................................... 20,257 21,154 22,876 24,138 24,907 25,180

1 The 2002 level is the amount appropriated for that year for the Certificate Fund, HOME Investment Partnership Program, Housing for Special Populations, HOPE VI, Homeless Assistance Grants, Housing Opportunities for Persons with AIDS, Assistance for Self-Help Housing Providers, Rural Housing Rental Assistance Program, and includes offsetting collections generated by the Federal Housing Administration’s singlefamily program and the Government National Mortgage Association’s single-family Mortgage-Backed Security program. The 2003–2007 levels 

are the 2002 amounts adjusted for inflation except for programs with expiring authorizations. 

Basis of estimate: For this estimate, CBO assumes that H.R. 

3995 will be enacted near the beginning of the fiscal year 2003 and 

that the amounts necessary to implement the bill will be appropriated for each fiscal year. The bill’s costs by provision are shown 

in Table 2, which is followed by a description of the estimated 

costs.

TABLE 2.—ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR H.R. 3995

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Title I

Matching Grants for State and Local Affordable Housing Trust Funds: 

Estimated Authorization Level ............................................................. 590 602 379 387 395

Estimated Outlays ................................................................................ 12 89 275 391 436

Eligibility of Room Additions for Use for Grandparents and Grandchildren: 

Estimated Authorization Level ............................................................. 1,002 1,224 1,436 1,618 1,775

Estimated Outlays ................................................................................ 100 423 811 1,260 1,461

Down-Payment Assistance Initiative: 

Estimated Authorization Level ............................................................. 200 204 0 0 0

Estimated Outlays ................................................................................ 20 120 182 82 0

Homeownership for Municipal Employees: 

Estimated Authorization Level ............................................................. 14 15 15 15 16

Estimated Outlays ................................................................................ 1 9 15 15 15

Title II

Loss Mitigation for Hospitals: 

Estimated Authorization Level ............................................................. 54 0 0 0 0

Estimated Outlays ................................................................................ 30 12 12 0 0

Down-Payment Simplification: 

Estimated Authorization Level ............................................................. 6 8 8 9 9

Estimated Outlays ................................................................................ 6 8 8 9 9

Reduced Down-Payment Requirements: 

Estimated Authorization Level ............................................................. ¥3 ¥10 ¥14 ¥17 ¥20

Estimated Outlays ................................................................................ ¥3 ¥10 ¥14 ¥17 ¥20

Title III

Grants for Repairs to Federally Assisted Housing for the Elderly: 

Estimated Authorization Level ............................................................. 200 204 0 0 0

Estimated Outlays ................................................................................ 3 50 117 108 74

66

TABLE 2.—ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR H.R. 3995—Continued

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007

Service Coordinators for Supportive Housing for Persons with Disabilities: 

Estimated Authorization Level ............................................................. 16 16 16 17 17

Estimated Outlays ................................................................................ 1 10 16 16 17

Demonstration Program for Elderly Housing for Intergenerational Families: 

Estimated Authorization Level ............................................................. 3 3 3 3 0

Estimated Outlays ................................................................................ * * 1 2 3

Title IV

Housing Voucher Demonstration: 

Estimated Authorization Level ............................................................. 13 14 0 2 8

Estimated Outlays ................................................................................ 0 * 2 7 13

Flexibility to Assist Hard-to-House Families: 

Estimated Authorization Level ............................................................. 255 266 276 287 297

Estimated Outlays ................................................................................ 64 226 235 244 253

PHA Administrative Fees: 

Estimated Authorization Level ............................................................. 11 12 13 13 14

Estimated Outlays ................................................................................ 9 12 12 13 14

Extension of Project-Based Section 8 Contract Renewals: 

Estimated Authorization Level ............................................................. 9 12 13 13 14

Estimated Outlays ................................................................................ 5 11 12 13 14

Project-Based Voucher Modifications: 

Estimated Authorization Level ............................................................. 0 0 0 0 0

Estimated Outlays ................................................................................ 0 * 4 16 34

Expanded Use of Enhanced Vouchers: 

Estimated Authorization Level ............................................................. 1 2 3 3 3

Estimated Outlays ................................................................................ 1 2 2 3 3

Demonstration Program for Rental Assistance for Grandparent-Headed 

Families: 

Estimated Authorization Level ............................................................. 6 0 3 6 6

Estimated Outlays ................................................................................ 0 3 4 4 5

Increased Payment Standard: 

Estimated Authorization Level ............................................................. 0 110 114 119 123

Estimated Outlays ................................................................................ 0 43 104 108 112

Title V

Third-Party Public Housing Assessment System: 

Estimated Authorization Level ............................................................. 1 0 0 0 0

Estimated Outlays ................................................................................ 1 0 0 0 0

Affordable Assisted Living Facilities Demonstration Program: 

Estimated Authorization Level ............................................................. 2 4 0 0 0

Estimated Outlays ................................................................................ 0 * * 1 2

HOPE VI Reauthorization: 

Estimated Authorization Level ............................................................. 585 597 0 0 0

Estimated Outlays ................................................................................ 0 12 88 195 236

HOPE VI Grants for Assisting Affordable Housing Through Main Street 

Projects: 

Estimated Authorization Level ............................................................. 29 30 0 0 0

Estimated Outlays ................................................................................ 0 1 4 10 12

Title VI

Interagency Council on the Homeless: 

Estimated Authorization Level ............................................................. 1 1 0 0 0

Estimated Outlays ................................................................................ 1 1 * 0 0

Federal Emergency Management Agency Food and Shelter Grant Program: 

Estimated Authorization Level ............................................................. 140 143 0 0 0

Estimated Outlays ................................................................................ 140 143 0 0 0

Emergency Shelter Grants: 

Estimated Authorization Level ............................................................. 155 158 0 0 0

Estimated Outlays ................................................................................ 5 23 46 55 59

Supportive Housing Program: 

Estimated Authorization Level ............................................................. 785 801 0 0 0

Estimated Outlays ................................................................................ 24 118 234 278 297

Section 8 Single-Room Occupancy: 

Estimated Authorization Level ............................................................. 16 16 0 0 0

Estimated Outlays ................................................................................ * 2 5 5 6

67

TABLE 2.—ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR H.R. 3995—Continued

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007

Shelter Plus Care: 

Estimated Authorization Level ............................................................. 180 184 0 0 0

Estimated Outlays ................................................................................ 13 69 114 72 30

Housing for Domestic Violence and Sexual Assault Victims: 

Estimated Authorization Level ............................................................. 199 203 208 212 216

Estimated Outlays ................................................................................ 20 120 202 206 210

Title VII

Native American Block Grant Reauthorization: 

Estimated Authorization Level ............................................................. 661 675 0 0 0

Estimated Outlays ................................................................................ 240 380 232 172 146

Title IX

GNMA Guarantee Fee: 

Estimated Authorization Level ............................................................. 0 0 56 58 59

Estimated Outlays ................................................................................ 0 0 56 58 59

Reauthorization of SHOP: 

Estimated Authorization Level ............................................................. 22 23 0 0 0

Estimated Outlays ................................................................................ * 8 17 13 5

HOPWA Reauthorization: 

Estimated Authorization Level ............................................................. 282 288 0 0 0

Estimated Outlays ................................................................................ 8 90 165 160 112

Use of CDBG Amounts for Tornado-Safe Shelters: 

Estimated Authorization Level ............................................................. 50 50 0 0 0

Estimated Outlays ................................................................................ 1 17 37 28 12

Correction of Inequities in the Second Round of Empowerment Zones: 

Estimated Authorization Level ............................................................. 167 167 167 167 167

Estimated Outlays ................................................................................ 3 57 127 150 167

Assistance for Nonprofit Purchasers Preserving Affordable Housing: 

Estimated Authorization Level ............................................................. 15 15 16 16 16

Estimated Outlays ................................................................................ 2 9 15 16 16

Demonstration Program for Affordable Housing Database: 

Estimated Authorization Level ............................................................. 2 0 0 0 0

Estimated Outlays ................................................................................ 1 1 0 0 0

Tenant Protection for Section 515 Properties: 

Estimated Authorization Level ............................................................. 41 83 127 157 172

Estimated Outlays ................................................................................ 20 60 102 137 158

Removal of Prepayment Restrictions for Section 515 Properties: 

Estimated Authorization Level ............................................................. ¥102 ¥102 ¥102 ¥65 ¥27

Estimated Outlays ................................................................................ ¥102 ¥102 ¥102 ¥65 ¥27

Total, Changes In Spending Subject to Appropriation: 

Estimated Authorization Level ............................................................. 5,609 6,017 2,737 3,019 3,260

Estimated Outlays ................................................................................ 625 2,018 3,140 3,764 3,941

Notes: 

* = Less than $500,000 per year. 

Numbers may not add up to totals because of rounding. 

PHA = Public Housing Authority; HOPE VI = Home Ownership and Opportunity for People Everywhere; GNMA = Government National Mort- gage Association; SHOP = Self-Help Housing Providers; HOPWA = Housing Opportunities for Persons with AIDS; CDBG = Community Develop- ment Block Grant. 

Title I: Home Investment Partnerships Program 

CBO estimates that implementing title I would cost $5.7 billion 

over the 2003–2007 period, assuming appropriation of the necessary amounts. 

Matching Grants for State and Local Affordable Housing Trust 

Funds. Section 101 would authorize such sums as may be necessary for grants to state and local trust funds to support the production, preservation, and rehabilitation of housing affordable to 

extremely low and low-income families. Families occupying units 

produced with this funding would be required to pay not more than 

30 percent of their adjusted monthly income toward rent.

68

CBO assumes that limiting tenant rent contributions to 30 percent of adjusted income would not provide sufficient revenue to 

cover operating expenses, including an adequate reserve, for the 

newly constructed or rehabilitated properties. Therefore, the number of new units that could be produced through this program 

would be limited by the availability of operating subsides. As discussed later in this cost estimate, CBO estimates that sections 401 

and 411 of this bill would provide enough project-based operating 

subsidy to support approximately 25,000 new or rehabilitated units 

(5,000 incremental project-based vouchers in 2003 and 2004 and attaching about 4,000 housing choice vouchers to the new units each 

year through 2007). Based on data provided by the Department of 

Housing and Urban Development (HUD), CBO assumes that units 

currently produced through the HOME program cost and average 

of $91,000. CBO estimates that implementing this provision would 

require the appropriation of $2.4 billion over the 2003–2007 period, with outlays of $1.2 billion over that period. 

Eligibility of Room Additions for Use for Grandparents and 

Grandchildren. Section 104 would allow participating local jurisdictions to provide HOME investment Partnership funds to low-income families to build an additional room or add a cottage to an 

existing dwelling for an elderly relative if it is necessary to avoid 

the relative’s placement in an institutionalized setting. Based on 

data published by the Centers for Disease Control and Prevention 

and the Agency for Healthcare Research and Quality, CBO assumes that nearly a million elderly individuals from families eligible to receive assistance under this provision are admitted into 

nursing home facilities each year. About one in six of these individuals require help with fewer than three of daily living (ADLs), 

which would make them suitable candidates for home care. 

Results from a 1991 survey conducted by the American Association of Retired Persons indicate that 44 percent of families would 

prefer to care for frail or disabled family members at home. Assuming appropriation of the necessary amounts. CBO estimates that 

this provision would allow about 72,000 of these elderly individuals 

to avoid placement in an institutionalized setting each year at a 

cost of approximately $10,000 per grant. CBO notes that this reduction in nursing home placement could result in Medicaid savings if the beds not used by this population are not filed by previously unmet demand. (Any such change in Medicaid spending can 

not be attributed to H.R. 3995, however, because the grants that 

might lead to the savings are contingent upon appropriation action.) 

In addition, based on data published by the National Alliance for 

Caregiving, CBO assumes that by 2007 roughly 10 percent of the 

1.4 billion low-income households that are involved in caregiving 

for frail elderly relatives requiring some help (individuals with one 

or two ADLs) also would receive funding through this provision. 

This estimate is highly uncertain because the legislative language 

would provide little guidance to HUD on how to limit eligibility. If 

HUD were to target funding to families with frail relatives most 

likely to be admitted to nursing homes, participation would be 

lower than the CBO estimate. However, given the lack of predictability of nursing home admissions, the regulations might become 

less restrictive than CBO assumes. In total, CBO estimates that 

69

section 106 would authorize the appropriation of about $7 billion 

over the 2003–2007 period, with estimated outlays of about $4 billion over that period. 

Down-Payment Assistance Initiative. Section 108 would authorize the appropriation of such sums as may be necessary through 

2004 to be used for down-payment assistance toward the purchase 

of single-family housing by low-income first-time homebuyers. 

Based on information from HUD, CBO assumes that the program 

would provide down-payment assistance to about 28,000 families 

each year. The average amount of down-payment assistance is assumed to be comparable with those currently provided through the 

HOME program or approximately $7,200. CBO estimates that implementing section 108 would cost $404 million over the 2003–2007 

period, assuming the appropriation of the necessary amounts. 

Homeownership for Municipal Employees. Section 109 would 

allow HOME funds to be used for homeownership assistance for 

public safety employees and teachers whose income does not exceed 

115 percent of median income (this may be increased by HUD to 

150 percent of median income if certain conditions are met). CBO 

estimates that demand for such assistance is somewhat limited because of the already high homeownership rate for this population 

(almost 10 percentage points higher than the national average) and 

competition from programs that provide similar assistance on both 

the federal and local level. CBO assumes that demand would be 

similar to HUD’s Officer/Teacher Next Door program which serves 

approximately 2,000 buyers each year. The average grant amount 

is assumed to be about $7,200, which is similar to the average 

down-payment assistance currently provided through the HOME 

program. CBO estimates that implementing section 109 would require the appropriation of $75 million over the 2003–2007 period, increasing outlays by $55 million over the same period. 

Title II: FHA Mortgage Insurance 

CBO estimates that implementing title II would have a net cost 

of $33 million in 2003 and $30 million over the 2003–2007 period. 

Loss Mitigation Demonstration for Hospitals. Section 204 would 

require the Federal Housing administration (FHA) to carryout a 

demonstration program that would provide various types of mortgage assistance for not more than three hospitals with existing 

FHA-insured loans. The mortgage assistance could include the payment of a portion of outstanding debt, as well as payment for the 

repairs and rehabilitation required for the conversion of the hospitals to facilities providing health care and housing to the elderly. 

Subject to the availability of appropriations, such assistance would 

be provided as a means to assist financially troubled hospitals, and 

it would be limited to 30 percent of a hospital’s unpaid mortgage 

balance. (According to FHA, the average unpaid mortgage balance 

per hospital loan is $60 million.) Based on information from FHA, 

CBO assumes that the demonstration would include three hospitals, that the maximum amount of assistance per hospital (i.e., 

30 percent of the unpaid balance on a loan) would be provided, and 

that there would be little likelihood that any assistance provided 

would be repaid by the borrower. As such, CBO estimates that an 

appropriation of $54 million in 2003 would be required to support 

the demonstration program. 

70

Simplification of Down Payment. Section 221 would permanently 

change the process FHA uses to determine the amount of a down 

payment that is necessary for mortgages on the single-family 

homes that it insures. Under current law, the down payment is calculated using a formula established in a 1996 pilot program. Under 

this formula, the maximum mortgage amount that FHA could insure would be determined as a fixed percentage of the home value. 

Authority to use this formula is scheduled to terminate on December 31, 2002, but section 221 would make its use permanent. 

Based on information from FHA, CBO estimates that continuing 

the use of the current down-payment formula would slightly increase the cost of guaranteeing FHA loans because it would lead 

to a small increase in the loan-to-value (LTV) ratios of about 15 

percent of the loans guaranteed each year after 2002. The LTV 

ratio indicates how much equity a borrower initially has in the 

home, and serves as a good predictor of the likelihood of default. 

On average, borrowers with less equity (that is, higher LTV ratios) 

have higher default rates than borrowers with more equity. We estimate that this provision would increase the cost of guaranteeing 

some loans, resulting in a cost of $6 million in 2003 and $40 million over the 2003–2007 period. The estimated changes in FHA’s 

loan subsidy costs—which are treated as discretionary spending—

would be recorded in each year as new loans are disbursed. 

Reduced Down-Payment Requirements. Section 222 would reduce 

the down-payment requirements for federally insured mortgages 

for teachers and public safety officers. Enacting this provision could 

enable certain teachers and public safety officers to purchase 

homes within their work regions with an FHA guarantee, by permitting a down payment as low as 1 percent of the mortgage 

amount instead of the 3 percent minimum down payment that is 

currently required. In addition, for each year that the loan is held 

and the borrower continues to work in the designated school district of public safety jurisdiction, FHA would defer 20 percent of 

the up-front cost of obtaining the loan. Normally, FHA charges a 

fee of 1.5 percent of the loan amount as the up-front cost of obtaining an FHA loan guarantee. 

The budgetary impact of this new loan program would depend on 

how many households would use this provision to help them become homeowners and how long these homeowners would remain 

in these homes. Based on information from associations, private investment firms, banks, FHA, and industry experts, CBO expects 

that about 10,000 loans (with a face value of about $1 billion) 

would be guaranteed after the program is fully implemented in 

2004. CBO expects that demand for this program would grow to almost 20,000 loans by 2007. CBO expects that this new program 

would be profitable (and thus generate negative subsidies), though 

not as profitable as the current single-family program where fees 

are not waived or reduced and default rates are slightly lower. We 

estimate that this new program would have a subsidy rate of about 

negative 0.75 percent, compared to a subsidy rate of negative 2.53 

percent for FHA’s single-family program in 2003 and negative 2.4 

percent in subsequent years. CBO estimates that implementing the 

program would result in additional offsetting collections of $2 million in 2003 and $41 million over the 2003–2007 period. 

71

In addition, because the majority of FHA-insured loans are eventually included in the Government National Mortgage Association 

(GNMA) Mortgage-Backed Securities (MBS) program, CBO estimates that implementing this provision would result in additional 

collections in GNMA of $1 million in 2003 and $23 million over the 

2003–2007 period. 

Title III: Supportive Housing for Elderly and Disabled Families 

CBO estimates that implementing title III would cost $418 million over the 2003–2007 period, assuming the appropriation of the 

necessary amounts. 

Authorization of Appropriations for Grants for Repairs to Federally Assisted Housing for the Elderly. Section 301 would authorize 

the appropriation of such sums as may be necessary through 2004 

to be used for grants for substantial capital repairs for elderly multifamily housing. Based on information provided by HUD and industry officials, CBO assumes that funding for approximately 

27,000 units per year would be provided in 2003 and 2004 at a cost 

of about $7,500 per unit. Thus, CBO estimates that implementing 

this section would require the appropriation of $404 million over 

the next two years, with outlays of $351 million over the 2003– 2007 period. 

Service Coordinators for Supportive Housing for Persons with 

Disabilities. Section 302 would add Section 811 Supportive Housing 

for the Disabled to the list of federally assisted housing programs 

that are eligible to receive grants to provide service coordinators. 

Service coordinators assist residents in obtaining needed supportive services from community agencies. In fiscal year 2002, 6.4 

percent of the total allocation for the Section 202 elderly housing 

program was earmarked for service coordinators. Assuming a similar ratio, CBO estimates that section 302 of H.R. 3995 would authorize $82 million for the 2003–2007 period, with outlays of $60 

million over that period. 

Demonstration Program for Elderly Housing for 

Intergenerational Families. Section 303 would require HUD to reserve from future appropriations for Section 202 elderly housing 

amounts necessary to fund a demonstration program to determine 

the feasibility of providing intergenerational dwelling units for 

households headed by an elderly person. The bill would require 

HUD to fund between two and four projects during the demonstration period of 2003–2006. 

In 1998, a similar program in Massachusetts developed a 26-unit 

intergenerational project at a cost of approximately $4 million. Assuming a comparable cost per project after adjustments for inflation and the regional cost of housing, CBO estimates that a fourproject demonstration program would require an appropriation of 

$13 million over the 2003–2007 period with resulting outlays of $7 

million over the same period. 

Title IV: Section 8 Rental Housing Assistance Program 

CBO estimates that implementing title IV would cost $1.6 billion 

over the 2003–2007 period, assuming appropriation of the necessary amounts. 

Housing Voucher Demonstration. Section 401 would authorize 

the appropriation of the amount necessary to provide a total of 

72

5,000 incremental project-based vouchers for fiscal years 2003 and 

2004. CBO assumes that these vouchers would be used in conjunction with the affordable housing production and preservation funding authorized in section 101 and that renewals would begin in the 

year following initial occupancy. Assuming an average projectbased voucher cost of $5,300, CBO estimates that the issuance and 

renewal of these vouchers would require an appropriation of $38 

million over the 2003–2007 period, with outlays of $23 million over 

the same period. 

Flexibility to Assist Hard-to-House Families. Section 402 would 

allow public housing authorities (PHAs) to use up to 2 percent of 

amounts allocated to the agency each year for purposes that directly support the agency’s housing choice voucher program (the 

program that provides tenant-based vouchers to low-income families). These funds could be used for housing counseling programs, 

down-payment assistance, rental security deposits, and other activities that assist eligible families in obtaining suitable dwelling 

units. Currently, many PHAs are not able to utilize their full allotments each year because some tenant-based vouchers cannot be 

placed. Assuming the appropriation of the necessary amounts; CBO 

estimates that this authority would cost $1 billion over the 2003– 2007 period. 

PHA Administrative Fees. Section 404 would authorize the Secretary of HUD to pay incentive fees to public housing agencies that 

succeed in achieving high or substantially improved performances 

on specified program requirements. Based on information provided 

by HUD, CBO assumes that one-third of all units are administered 

by public housing authorities that have been rated as ‘‘high performers’’ under the Section 8 Management Assessment Program 

and, therefore, would be likely recipients of the incentive fees. Assuming an administrative fee bonus of 3 percent, CBO estimates 

that this provision would require the appropriation of $63 million 

over the 2003–2007 period, with outlays of $60 million over that 

period. 

Extension of Project-Based Section 8 Contract Renewals. Section 

408 would amend the Multifamily Assisted Housing Reform and 

Affordability Act of 1997 to allow rents for properties subsidized 

through the moderate rehabilitation program to be renewed at 

market rates. Under current law, rents are renewed at the lesser 

of adjusted existing rents, fair market rents, or market rents. 

Based on data provided by HUD, state housing agencies, and 

public housing agencies, CBO estimates that almost half of the 

52,000 moderate rehabilitation units subsidized by HUD currently 

have contract rents that are below market for comparable units. 

Average monthly rents for such units are estimated to be approximately $50 below the market rate. CBO estimates that allowing 

contract rents on these units to be marked up to market upon contract expiration would require the appropriation of $61 million over 

the 2003–2007 period, with outlays of $54 million over that period. 

Project-Based Voucher Modifications. Section 411 would modify 

the rules that govern attaching housing choice voucher subsidies to 

structures rather than to individuals. Currently, no more than 25 

percent of the dwelling units in most buildings may be assisted in 

this manner. The modifications in this section would expand the 

exceptions to this rule to include properties of one to four units and 

73

buildings outside of qualified census tracts with five to 25 units. 

Assuming the availability of appropriations, CBO estimates that 

these modifications, when used in conjunction with the production 

funding authorized in section 101, would gradually increase voucher utilization by 20,000 units. This increased utilization would cost 

$54 million over the 2003–2007 period. 

Expanded Use of Enhanced Vouchers. Section 412 would allow 

families who are eligible for enhanced voucher assistance, but live 

in units that are unavailable for continued rental due to conversion 

to condominium, cooperative, or commercial use, to transfer the enhanced voucher to another unit within the same or contiguous zip 

code. The enhanced vouchers provided to these families would have 

payment standards of up to 150 percent of the applicable fair market rent. Based on information from HUD and industry officials, 

CBO estimates that such conversions are relatively rare, representing approximately 2 percent of the 28,000 opt-out units each 

year. This expanded use of enhanced vouchers would add, on average, about 36 percent to the cost of the tenant protection vouchers 

issued as a result. CBO estimates that this provision would require 

the appropriation of $12 million over the 2003–2007 period, with outlays of $10 million over that period. 

Demonstration Program for Rental Assistance for GrandparentHeaded or Relative-Headed Families. Section 413 would direct 

HUD to reserve amounts made available for tenant-based voucher 

assistance to be used for a demonstration program to determine the 

feasibility of providing rental assistance to families headed by a 

grandparent or relative. The section would require the demonstration to be conducted by not less than two and not more than four 

public housing agencies. CBO assumes that HUD would choose 

four housing authorities of various sizes for this demonstration and 

that it could be conducted with 1,000 vouchers (500 vouchers for 

a large PHA, 225 vouchers for two mid-sized PHAs, and 50 vouchers for a small PHA). Assuming that renewals would begin the year 

following initial occupancy, the issuance and renewal of these 

vouchers would require the appropriation of $21 million over the 

2003–2007 period, resulting in outlays of $17 million over that period. 

Increased Payment Standard. Section 415 would allow PHAs to 

use funds appropriated for fiscal year 2004 and future years to establish a payment standard of up to 120 percent of the Fair Market 

Rent (FMR) for units assisted by tenant-based vouchers without 

the approval of HUD. A PHA would be able to establish a payment 

standard at this level if it has had a payment standard of at least 

110 percent of the FMR for the previous six months and has a 

voucher success rate (the proportion of families that are issued a 

voucher that succeed in leasing a unit) of not more than 80 percent. Prior to increasing the payment standard, PHAs must include 

the reasons for the increase in their annual plan. 

Based on information provided by HUD, CBO estimates that approximately 12 percent of units are managed by PHAs that have 

set payment standards at or above 110 percent of the FMR and 

that an additional 13 percent would have payment standards at 

that level within one year after enactment. In addition, CBO estimates that 70 percent of units are managed by PHAs that meet the 

success rate requirement. CBO estimates that allowing PHAs to inVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00073 Fmt 6659 Sfmt 6602 E:\HR\OC\HR640P2.107 HR640P2
74

crease payment standards would require the appropriation of $466 

million over the 2003–2007 period, with outlays of $367 million 

over that period. 

Title V: Public Housing 

CBO estimates that implementing title V would cost $562 million 

over the 2003–2007 period, assuming appropriation of the necessary amounts. 

Third-Party Public Housing Assessment System. Section 503 

would give HUD the authority to develop a prototype of an alternative evaluation system for assessing the overall performance of 

housing authorities. The bill would require HUD to enter into a 

contract with an outside entity to develop the prototype assessment 

system. CBO estimates that this provision would cost approximately $1 million in fiscal year 2003. 

Affordable Assisted Living Facilities Demonstration Program. 

Section 504 would authorize such sums as may be necessary 

through 2004 to carry out a program to demonstrate the effectiveness of making grants to public housing agencies to convert elderly 

dwelling units to assisted living facilities. These facilities would be 

designed for elderly tenants who can live independently but require 

supportive services. The section would authorize appropriations for 

the conversion of three eligible properties. A similar conversion program for elderly housing assisted under section 202 of the Housing 

Act of 1959 has required an average of $1.8 million per project in 

2000 and 2001. Assuming a similar cost per project, CBO estimates 

that implementing section 504 would require the appropriation of 

$6 million over the next two years, with outlays of $3 million over 

the 2003–2007 period. 

HOPE VI Authorization of Appropriations. Section 522 would authorize the appropriation of such sums as necessary for the HOPE 

VI program through 2004. In 2002, $574 million was appropriated 

for this program. CBO estimates that implementing this section 

would cost $531 million through 2007, assuming appropriation of 

the necessary amounts. 

HOPE VI Grants for Assisting Affordable Housing Through Main 

Street Projects. Section 524 would authorize HUD to provide up to 

5 percent of the amount appropriated for the HOPE VI program for 

use by smaller communities (population below 30,000) for affordable housing activities in conjunction with the revitalization of a 

traditional commercial area. Assuming the appropriation of the 

necessary amounts, CBO estimates that implementing section 524 

would cost $27 million through 2007.

Title VI: Homeless Housing Programs 

CBO estimates that implementing title VI would cost about $2.5 

billion over the 2003–2007 period, assuming inflation-adjusted appropriations. 

Homelss Assistance Programs. Title VI would extend the authorizations for the following programs through 2004 for such sums as 

may be necessary: 

• Interagency Council on the Homeless (estimated outlays of 

$2 million over the 2003–2007 period); 

75

• Federal Emergency Management Agency food and shelter 

program (estimated outlays of $283 million over the 2003–2007 

period); 

• Emergency shelter grants program (estimated outlays of 

$188 million over the 2003–2007 period); 

• Supportive housing program (estimated outlays of $950 

million over the 2003–2007 period); 

• Section 8 assistance for single room occupancy dwellings 

(estimated outlays of $19 million over the 2003–2007 period); 

and 

• Shelter plus care (estimated outlays of $299 million over 

the 2003–2007 period). 

Housing for Domestic Violence and Sexual Assault Victims. Section 607 would authorize the appropriation of such sums as necessary for fiscal years 2003 through 2007 to carry out a program 

that provides grants to qualified organizations for providing housing assistance for the victims of domestic violence or sexual assault. Survey data provided by the National Coalition Against Domestic Violence indicate that approximately half of the 83,000 families that were either served by or turned away from domestic violence shelters in 2000 are in need of transitional housing services. 

Based on information provided by HUD, CBO assumes that the average cost to assist each family would be approximately $6,000 per 

year, 25 percent of which would be provided by the qualified organizations receiving assistance. CBO estimates that this section 

would authorize the appropriation of $1 billion over the 2003–2007 

period, and result in outlays of $759 million over that period. 

Title VII: Reauthorization of Native American Housing and Self-Determination Act 

Section 701 would authorize the appropriation of such sums as 

necessary through 2004 for Native American Housing Block 

Grants, title VI loan guarantees, and training and technical assistance. For 2002, $649 million was appropriated for these purposes. 

Assuming continued funding at that level and adjusting for inflation, CBO estimates that implementing this provision would cost 

$1.2 billion over the 2003–2007 period. 

Title IX: Other Housing Programs 

CBO estimates that implementing title IX would cost $1.5 billion 

over the 2003–2007 period, assuming appropriation of the necessary amounts. 

GNMA Guarantee Fee. GNMA is responsible for guaranteeing securities backed by pools of mortgages insured by the federal government. (These securities are known as mortgage-backed securities or MBS). For a fee charged to lenders or issuers of the securities, GNMA guarantees the timely payments of scheduled principal 

and interest due on the pooled mortgages that back their securities. 

Under current law, GNMA charges lenders or issuers an annual fee 

of 6 cents for every $100 (6 basis points) of guaranteed mortgagebacked securities backed by single-family loans. Furthermore, a fee 

increase to 9 basis points is scheduled to take effect on October 1, 

2004. Section 901 would repeal that fee increase. CBO estimates 

that eliminating the fee increase would increase the subsidy rate 

76

associated with the single-family MBS program and increase the 

demand for the program. 

Based on information from GNMA, CBO estimates that the collection of lower fees would reduce the subsidy for the single-family 

MBS program from negative 0.56 percent to negative 0.37 percent. 

(As with the FHA single-family program, GNMA guarantee fees for 

the mortgage-backed securities more than offset the costs of expected defaults, resulting in net collections from the MBS program.) CBO expects that by extending the lower fee of 6 basis 

points, however, GNMA would remain more competitive with other 

MBS programs and continue to guarantee more than $100 billion 

worth of mortgage-backed securities, as it does under the current 

fee structure. Thus, while repealing the fee increase would result 

in a less profitable program, this loss would be partially offset by 

additional receipts stemming from an expected increase in demand 

for GNMA services of about 25 percent. On balance, CBO estimates 

that implementing this provision would cost $56 million in 2005 

and $173 million over the 2005–2007 period. 

Assistance for Self-Help Housing Providers. Section 903 would authorize the appropriation of $22 million in 2003 and $23 million 

in 2004 for HUD to issue grants to facilitate self-help housing 

homeownership opportunities. Assuming the appropriation of the 

necessary amounts, CBO estimates that implementing this provision would cost $43 million over the 2003–2007 period. 

Housing Opportunities for Persons with AIDS: Section 904 would 

authorize the appropriation of such sums as necessary through 

2004 for the Housing Opportunities for Persons with Aids program. 

For 2002, $277 million was appropriated for this program. Assuming inflation-adjusted appropriations, CBO estimates that the bill 

would authorize the appropriation of $570 million for the 2003– 2004 period, with outlays of $535 million over the 2003–2007 period. 

Use of CDBG amounts for construction of tornado-safe shelter for 

manufactured housing parks. Section 905 would authorize HUD to 

make block grants to communities for the construction of stormsafe shelters for manufactured housing parks. Based on information from HUD, CBO estimates that implementing this section 

would cost $95 million for land acquisition, construction, and the 

maintenance cost of such shelters over the 2003–2007 period, assuming the appropriation of the necessary amounts. 

Correction of Inequities in the Second Round of Empowerment 

Zones. Section 909 would authorize the appropriation of such sums 

as are necessary to make grants to the 15 areas designated in the 

second round of urban empowerment zones. Based on information 

from HUD and the amount of past appropriations for the first 

round of urban empowerment zones, CBO estimates that each second round zone would receive $100 million for various economic development projects. The empowerment zone designation ends in 

2009. The 15 empowerment zones have received $330 million so 

far, and CBO estimates that this provision would cost $504 million 

over the 2003–2007 period. 

Assistance for Nonprofit Purchases Preserving Affordable Housing. Section 911 would authorize the appropriation of such sums as 

necessary to make grants to nonprofit organizations with a regional 

or national focus that work to acquire and preserve affordable 

77

housing. The grants would be intended to support the nonprofits’ operating, working capital, and organizational expenses. Based on 

information from industry representatives, CBO estimates that 

there are approximately 15 national and 60 regional nonprofit purchasers of affordable housing and that average annual operating 

expenses for these organizations range from $500,000 to $2 million. 

We estimate that HUD would provide these agencies with grants 

equal to about 25 percent of their annual operating expenses. CBO 

estimates that implementing this section would cost $57 million 

over the 2003–2007 period. 

Demonstration Program for Affordable Housing Database. Section 916 would give HUD the authority to conduct a demonstration 

program to develop an electronic database that provides agencies, 

municipalities, and the general public access to information about 

affordable housing. The provision would limit the demonstration to 

not more than three sites. CBO estimates that carrying out this 

provision would cost $2 million over the 2003–2004 period. 

Tenant Protection and Removal of Prepayment Restrictions for 

Section 515 Properties. Section 918 would remove all restrictions 

on the prepayment of certain Rural Housing Service (RHS) loans 

and would provide, subject to the availability of appropriations, enhanced vouchers to each low-income family who would be displaced 

by the prepayment of these loans. 

Beginning in the 1960s, the RHS made direct loans, generally for 

about 40 years, to builders for the construction of multifamily rental housing units in rural areas. Many of these properties (known 

as section 515 properties) receive project-based rental assistance, 

which is a type of housing subsidy that is tied to the unit, and thus 

the household can only benefit from the subsidy while living in the 

subsidized unit. Under current law, section 515 loans made before 

December 14, 1989, may not be prepaid after 20 years from the 

date of the loan unless certain conditions concerning the maintenance of the property are met. 

Based on information from the General Accounting Office and 

RHS, CBO estimates that this section would allow for the prepayment of mortgages associated with about 4,000 section 515 projects 

over the next eight years. The budgetary impact of this provision 

would be twofold. First, CBO estimates that 108,000 units would 

be eligible for enhanced vouchers and that the rents for these units 

would increase by approximately 45 percent. Over the 2003–2007 

period, we estimate that the funding of such vouchers would cost 

about $477 million above the subsidy payments currently provided 

to the families that live in these properties. 

Second, assuming appropriations language would specify the use 

of enhanced vouchers for this particular population, prepayments of 

section 515 properties would result in savings of about $102 million 

to the federal government in 2003 and $398 million over the 2003–

2007 period. (The average original loan amount for the section 515 

projects is $730,000.) Because the expected prepayments would 

change the cash flows associated with the section 515 loan program, this provision would be considered to be a modification of existing federal loans. The costs of a loan modification are estimated 

on a net present value basis in the year in which the modifications 

take place. CBO estimates that $398 million in savings from the 

more rapid repayment of the outstanding principal balance on 

78

about 4,000 section 515 loans would be recorded in the budget over 

the 2003–2007 period under this provision. Note, however, that 

those potential savings are contingent upon appropriation of the 

funds necessary to provide the additional enhanced use vouchers 

for section 515 properties (as estimated above). That is, the prepayments would not occur in the absence of such appropriations.

Pay-as-you-go considerations: None. 

Intergovernmental and private-sector impact: H.R. 3995 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. Any significant costs to state, local, or tribal governments 

would result from complying with conditions of federal aid. 

Previous CBO estimate; On August 21, 2002, CBO transmitted 

a cost estimate for H.R. 3995 as ordered reported by the House 

Committee on the Judiciary on July 23, 2002. That version of the 

bill included many provisions similar to those in this bill and had 

an estimated cost of about $12.6 billion over the next five years 

($1.3 billion lower than the Financial Services Committee’s 

version), assuming appropriation of the necessary amounts, as well 

as a $34 million increase in direct spending over the 2003–2008 period (in contrast to no direct spending for the version approved by 

the Financial Services Committee). 

The major differences in this version of H.R. 3995 are: 

• The creation of a matching grant provision for state and 

local affordable housing trust funds; 

• Modifications to the HOME program including the creation 

of a down-payment assistance program and a homeownership 

program for municipal employees; 

• The authorization of appropriations for grants to repair 

federally assisted housing for the elderly; 

• Modifications to the rules governing Section 8 housing 

vouchers; 

• The creation of a new transitional housing program for the 

victims of domestic violence and sexual assault; 

• The removal of prepayment restrictions for Section 515 

properties; and 

• The establishment of various demonstration programs. 

Estimate prepared by: Federal Costs: Housing Assistance Programs: Chad Chirico; FHA and GNMA Subsidies: Susanne S. 

Mehlman; and Community Development Programs; Lanette Walker. Impact on State, Local, and Tribal Governments: Greg Waring. 

Impact on the Private Sector: Cecil McPherson. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

79

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional 

Authority of Congress to enact this legislation is provided by Article 1, section 8, clause 1 (relating to the general welfare of the 

United States) and clause 3 (relating to the power to regulate interstate commerce). 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short Title and Table of Contents 

This section establishes the short title of the bill, the ‘‘Housing 

Affordability for America Act of 2002’’ and provides a table of contents. 

TITLE I—HOME INVESTMENT PARTNERSHIP PROGRAM

Section 101. Affordable Housing Production and Preservation 

HUD is currently authorized to make housing funds available to 

participating State and local jurisdictions through a previously established HOME Investment Trust Fund. Appropriated funds must 

be allocated by a formula based on factors reflecting need, with 1 

percent to Indian tribes, the remainder divided 60 percent among 

local governments and 40 percent to States, with minimums for 

each participating State and locality. HOME funds may be used for 

rehabilitation, new construction, or tenant-based assistance. The 

funds may not be used for administrative expenses, for public housing operating subsidies, for rental assistance for families displaced 

by demolition of public housing, for extension of section 8 contracts, 

or for preservation of assisted housing projects. Participating jurisdictions are required to provide matching funds of 25 cents for 

every dollar of HOME funds received. The matching funds must be 

from non-Federal sources. The eligibility of households for HOME 

assistance varies with the nature of the funded activity. For rental 

housing and rental assistance, at least 90 percent of families must 

have incomes that are no more than 60 percent of the HUD-adjusted median family income for the area. In rental projects with 

five or more assisted units, families with incomes that do not exceed 50 percent of the HUD-adjusted median income must occupy 

20 percent of the units. The incomes of households receiving HUD 

assistance may not exceed 80 percent of the median income for the 

area. 

H.R. 3995 amends HOME to establish a housing production program to increase the production and preservation of mixed income 

rental housing affordable to very low and extremely low-income 

families. The bill amends the HOME Investment Partnership Act 

to permit HUD to make grants to affordable housing trust funds 

established by States and localities. The bill requires that matching 

funds from non-Federal sources and the trust fund be used only for 

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the production, preservation, or rehabilitation of affordable housing. ‘‘Qualified Affordable Housing’’ is defined as rental housing 

subject to binding commitments to ensure that all the following requirements are met: (1) the rent not exceed the lesser of the section 

8 fair market rent or 30 percent of the adjusted income of a family 

whose income equals 65 percent of the area median income; (2) the 

family’s contribution towards rent not exceed 30 percent of the 

family’s adjusted income, (3) the housing unit must be one of the 

units subject to the requirement that a percentage of the units are 

available only for occupancy by families assisted under the section 

8 voucher program; (4) all units in the project must be subject to 

restrictions providing for non-discrimination against holders of 

vouchers; (5) the housing must be subject to the above requirements for at least 40 years. A trust fund would be permitted to use 

up to 5 percent of its grant amount towards payment of the operating costs of nonprofit housing development organizations. Of the 

remainder, 75 percent would have to be distributed for activities 

providing rental housing for extremely low-income families, and 25 

percent would have to be distributed for activities related to qualified affordable housing which would provide rental housing and 

homeownership assistance for low-income families. 

A trust fund receiving these grants needs a HUD-approved allocation plan describing how the grants would be distributed during 

the fiscal year. The plan includes a description of eligible activities 

to be conducted, and certification that any housing assistance 

would be in compliance with the definition for qualified affordable 

housing with respect to the rents charged, the tenant’s rent contribution, the availability of housing for voucher holders, and use 

of the property as affordable housing for 40 years. The plan notes 

the selection criteria for applicants and preference must be based 

on several criteria: (1) the amount of assistance leveraged from 

non-Federal sources; (2) the extent of local assistance, including financial, and the extent that zoning issues and other barriers to affordable housing were addressed; (3) the degree to which the 

project will have residents of varying incomes; (4) the extent of economic opportunity for low-income families in the area; (5) the demonstrated ability of the applicant to maintain the property as qualified affordable housing; (6) the extent to which the county is experiencing a rental vacancy rate of 2 percent or less; (7) the extent 

to which more than 35 percent of the housing in the county is 45 

years old or older; (8) whether the applicant has provided that 75 

percent of the grant amounts would be used in communities undergoing revitalization or in census tracts in which less than 20 percent of the families have incomes less than the poverty line, and 

25 percent of the grant amounts would be used in communities 

that are not undergoing revitalization and in census tracts in 

which more than 20 percent of the families have incomes less than 

the poverty line; and (9) whether the applicant has provided that 

at least 45 percent of the grant amounts would be used to assist 

families having median incomes less than 30 percent of the area 

or State median, at least 30 percent of the grant amounts would 

be used to assist families employed full time at the greater of the 

Federal or State minimum wage, and no more than 25 percent of 

the grant amounts would be used to assist families having incomes 

greater than that listed above but which would not exceed the 

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greater of the median income for the State or 80 percent of the median income for the area. Assistance from grant amounts would be 

in the form of capital grants, no interest and low-interest loans, deferred payment loans, guarantees, and other assistance as approved by HUD. 

Affordable housing trust funds will be directed to coordinate the 

distribution of these grants funds with the provision of other affordable housing assistance. Contracts involving the construction of 

12 or more units must provide for the payment of prevailing wages 

as determined by the Davis-Bacon Act. Such sums as necessary are 

authorized to be appropriated in FY 2003 and each fiscal year 

thereafter for grants under section 291. Amounts available for the 

HOME Investment Partnerships Act would not be available for section 291 grants. Except as provided in this subtitle, the provisions 

of the HOME program would not apply to section 291 grants. HUD 

would be directed to use the total amount made available under 

section 291 each fiscal year, and to allocate 40 percent of the funds 

to States, and to allocate 60 percent of the funds to participating 

local jurisdictions. Each State affordable housing trust fund would 

receive at least 1 percent of the amount allocated to the State. 

Section 102. 3-Year Inspection Cycle for Tax Credit Projects 

Under current law, participating jurisdictions must inspect rental housing produced under the HOME program to monitor compliance with HOME requirements: once every three years if the property has between one and four units, once every two years if the 

property has between five and 25 units, and annually if the property has 26 or more units. H.R. 3995 gives participating jurisdictions the ability to synchronize risk management techniques with 

Low Income Housing Tax Credit projects to determine when and 

how often they should conduct on-site monitoring of projects, as 

long as projects are monitored at least once every 3 years. Basing 

property monitoring on risk management techniques will allow participating jurisdictions to focus on those properties that they believe to be at highest risk. 

Section 103. Repeal of Limitation on Program Assistance as Percentage of Operating Budget 

At present, participating jurisdictions may enter into contracts 

with organizations that provide education to homeowners and tenants, organizational support, and other technical assistance in furtherance of the jurisdictions’ housing strategy. However, the contracts may not provide more than 20 percent of the annual operating budget of the contracting organization. This requirement unfairly penalizes small and local organizations devoted to training 

and technical assistance because they may not have the resources 

to raise enough private or philanthropic capital. Section 103 repeals this 20 percent provision. 

Section 104. Eligibility of Room Additions for Use by Grandparents 

and Grandchildren 

Under current law, the term ‘‘housing’’ (as used in the HOME 

program) is defined to include Elder Cottage Housing Opportunity 

(ECHO) units that are small, freestanding, barrier-free, energy-efficient, removable, and designed to be installed adjacent to existing 

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one- to four-family dwellings. Whereas current HOME funds can 

only be used for the initial purchase and placement costs of ECHO 

units, H.R. 3995 makes the addition of bedrooms an eligible activity under the ECHO program. This adaptation will enable elderly 

relatives to reside with their low-income families instead of being 

placed in nursing homes. In some cases, this will also allow grandparents to stay with their young grandchildren and will eliminate 

the need for foster care for their grandchildren. 

Section 105. Program Year for Matching Contributions 

Participating jurisdictions are currently required to provide 

matching funds of 25 cents for every dollar of HOME funds received during a fiscal year, and are required to report to HUD on 

their performance in meeting the matching contribution during the 

fiscal year. Some jurisdictions base their plan year on their own fiscal year or some other point in time, not necessarily the Federal 

fiscal year. Section 105 allows jurisdictions to report on the use of 

funds based on their program year thereby simplifying program administration. 

Section 106. Membership of Boards of Eligible Community Housing 

Development Organizations 

This provision prohibits the Secretary from barring any public 

employee who is in an unelected and non-decision-making role from 

membership on a local board of a community housing development 

organization. 

Section 107. Monitoring of Compliance 

This provision allows participating jurisdictions to charge compliance monitoring fees to cover compliance monitoring costs. HOME 

participating jurisdictions are required to monitor projects and enforce program compliance, but they are not allowed to charge monitoring fees. These jurisdictions can use administrative funds for 

monitoring, but administrative funds are insufficient to cover the 

increasing cost of monitoring as participating jurisdictions add 

more projects to their portfolio and have to monitor them for 15–

20 years, or more. States are permitted to charge monitoring fees 

for Low Income Housing Tax Credit properties. 

Section 108. American Dream Downpayment 

Subtitle E of the HOME legislation required that the General Accounting Office (GAO) carry out a study and report to Congress on 

the ways that HUD and other agencies could provide mortgage 

credit enhancement in ways that improve the availability of mortgage financing for affordable housing. The report was completed in 

October 1993. Under this section of H.R. 3995, subtitle E would be 

renamed ‘‘Other Assistance’’ and its current language would be replaced with language authorizing a downpayment assistance initiative under the HOME program. This new program within HOME 

will provide low-income families with downpayment assistance in 

order to achieve the goal of homeownership. The initiative requires 

a separate appropriation so that the funding for the downpayment 

program does not affect existing HOME program funding. 

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Section 109. Homeownership for Municipal Employees 

To qualify as affordable homeownership housing under the current HOME program, a property must be the principal residence 

of an owner whose family qualifies as low income at the time of 

purchase. The HOME program would here be amended to provide 

that property qualifies as affordable homeownership housing if (1) 

the property would be the principal residence of an owner whose 

family qualifies as low income at the time of purchase of existing 

housing, at signing of a lease-purchase agreement, or at the time 

of signing a contract for the construction of a home; or (2) the property is to be occupied by uniformed employees (including policemen, 

firemen, maintenance workers, and teachers) whose income does 

not exceed 115 percent (up to 150 percent in high cost areas) of the 

area median. Municipal employees would be eligible for downpayment assistance, assistance with closing costs, pre- or post-purchase counseling, or payments to subsidize the mortgage interest 

rate. 

TITLE II—FHA MORTGAGE INSURANCE

Subtitle A—Multifamily Housing and Health Care Facilities 

Section 201. Indexing of Multifamily Mortgage Limits 

Specific mortgage limits are currently set for the various multifamily housing programs and the limits only change when the National Housing Act is amended for that purpose. This section 

amends the National Housing Act and requires the Secretary of 

HUD to index the multifamily mortgage limits each year to the annual construction cost indexes of the Bureau of the Census of the 

Department of Commerce. The FY 2002 HUD–VA Appropriations 

Act provided for a 25 percent increase of the multifamily loan limits. This increase reflects the increases in construction costs over 

the last ten years. Indexing will address future cost increases. 

Section 202. High-Cost Areas 

By regulation, HUD may currently increase the statutory mortgage limits for multifamily housing loans by 110 percent in any geographic area where HUD finds that costs dictate such an increase. 

In addition, on a project-by-project basis HUD may increase the 

mortgage limits by up to 140 percent to account for higher costs. 

This section amends the National Housing Act to permit HUD to 

increase the multifamily mortgage limits by 140 percent in a geographic area, and by 170 percent on a project by project basis. 

Section 203. Standards and Need for Health Care Facility Mortgage 

Insurance 

Under Sections 232 and 242 of the National Housing Act, HUD 

may not currently insure any nursing home (section 232) or hospital (section 242) mortgage unless HUD has received State certification that (1) there is a need for such nursing home or hospital, 

and (2) there are reasonable State or local minimum standards of 

licensing and operating such nursing homes or hospitals. If no 

State agency exists, or if the State agency exists but is not empowered to provide a certification that there is a need for the nursing 

home or hospital, then HUD may not insure any mortgage under 

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these sections unless the State in which the institution is (or will 

be) located has conducted or commissioned the preparation of an 

independent study of the market need and feasibility of the proposed institution. 

This section updates existing provisions to address the fact that 

State laws have evolved over time, and assures that no health care 

facilities in any State will be automatically prevented from applying for FHA mortgage insurance. This section establishes an alternate method for the determination of project need and feasibility 

for States in which procedures do not exist. In addition, it directs 

the HUD Secretary, in conjunction with the Secretary of Health 

and Human Services, to require satisfactory evidence that the 

nursing home or hospital would be located in an area with reasonable minimum standards of licensure and methods of operation for 

these institutions, and would have to require satisfactory assurance 

that such standards would be applied and enforced with respect to 

the institution. HUD would have to establish the means for determining the need and feasibility for the institution. If the State has 

an official procedure for determining the need for institutions, then 

HUD would have to also require that such procedure be followed 

before the application is submitted, and the application would have 

to document that need has also been established under that procedure. 

Section 204. Hospital Mortgage Insurance Loss Mitigation Demonstration Program 

This section authorizes HUD to carry out a program to demonstrate the effectiveness of loss mitigation actions for up to 3 hospitals which are insured by FHA. Authorized loss mitigation activities include a partial claim payment, temporary provision of operating funds, and assistance for capital improvements, including 

conversion of excess hospital capacity to related use. To be eligible 

for assistance a hospital would have to have secured binding commitments of matching funds of at least 10 percent of the cost of the 

assistance and have met any applicable State certificate of need or 

licensing requirement. The total assistance would be limited to no 

more than 30 percent of a hospital’s outstanding indebtedness to 

HUD. The demonstration would terminate on December 31, 2004. 

HUD would be required to submit a report to Congress analyzing 

the program and showing the extent to which the assistance reduced the net cost to the FHA General Insurance Fund. 

Subtitle B—Single Family Housing 

Section 221. Downpayment Simplification 

In 1998, Congress enacted legislation that allows HUD to use a 

simplified formula for calculating the downpayment on FHA-insured one to four family properties. 

Section 222. Reduced Downpayment Requirements for Loans for 

Teachers and Public Safety Officers 

Currently, a borrower’s downpayment may range between 1.25 

percent and 2.85 percent of the value of the property. In addition, 

borrowers are required to pay an up front mortgage insurance premium (the actual amount is determined administratively). This secVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00084 Fmt 6659 Sfmt 6602 E:\HR\OC\HR640P2.107 HR640P2
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tion provides the HUD Secretary with authority to reduce downpayment requirements to at least one percent off the loan amount 

for FHA insured mortgages. Qualified borrowers are teachers or 

public safety officers. 

Teachers, teacher’s assistants, and public safety officers would be 

exempt from payment of the up front mortgage insurance premium. 

If the borrowers remained as teachers, teacher’s assistants, or public safety officers for less than 5 years, the borrowers would have 

to pay a prorated portion of the insurance premium that would 

have to be paid in the absence of the exemption. 

Section 223. Community Partners Next Door Program 

Under section 204(h) of the National Housing Act, areas that 

have very low income (less than 60 percent of median), high concentrations of defaults and foreclosures on FHA-insured single-family homes, or low homeownership rates relative to the metropolitan 

area, may be designated as revitalization areas. HUD is directed 

to dispose of HUD-owned foreclosed property in a manner that promotes the revitalization of such areas through expanded homeownership opportunities. Local governments and nonprofit organizations are preferred purchasers under the program and they must 

sign binding agreements that the homes will be used in conjunction 

with a home ownership plan for the area. Non-preferred purchasers 

must sign binding agreements to meet specified homeownership 

goals and agree to rehabilitate the property to comply with minimum occupancy standards. The foreclosed properties may be sold 

to preferred purchasers at a discount from the appraised value. 

This section provides the HUD Secretary with authority to discount HUD-held single family properties by 50 percent to qualified 

teachers and public safety officers. For a sale financed through an 

FHA-insured loan, the downpayment would be $100. The borrower 

would have to use the property as a primary residence for 3 years 

and HUD would have to issue regulations to prevent undue profit 

from the resale of the property in violation of this provision. HUD 

would have authority to suspend the program if needed because of 

fraud and other issues. 

Section 224. Public Safety Officer Home Ownership in High-Crime 

Areas 

This section authorizes the Secretary to establish a three year 

pilot program for no-downpayment FHA insured loans to qualified 

public safety officers who purchase homes in designated areas identified by the local government as high-crime activity areas. 

Section 225. Hybrid Adjustable Rate Mortgages 

Section 251(d) of the National Housing Act provides that, for adjustable rate mortgages under which the interest rate is fixed for 

the first 3 or more years, the initial interest rate adjustment is limited to 1 percentage point if the interest rate is fixed for the first 

5 or fewer years. 

This section eliminates the interest rate restrictions on 5/1 Hybrid FHA Adjustable Rate Mortgages (ARMs). Hybrid ARMs are 

mortgages that have an initial fixed interest rate for a period of 

three, five, seven, or ten years and then the interest rate adjusts 

annually thereafter. Congress capped the first interest rate adjustVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00085 Fmt 6659 Sfmt 6602 E:\HR\OC\HR640P2.107 HR640P2
86

ment for 5/1 hybrid ARMS at 1 percent. A maximum 1 percent increase in the interest rate at the time of the first rate adjustment 

for a 5/1 hybrid ARM does not offer sufficient interest rate flexibility for a lender to offer this type of hybrid ARM at a lower interest rate than a traditional 30-year fixed rate mortgage. 

Section 226. Uniform National Loan Limit For Home Equity Conversion Mortgages 

This section sets uniform national loan limits for reverse mortgages used by senior homeowners. Senior homeowners can convert 

equity in their home into monthly cash payments or a line of credit 

through the use of reverse mortgages. Currently home equity conversion mortgage loans are subject to the county-by-county FHA 

loan limits for traditional mortgages. Seniors living in low-cost 

areas could be subject to disparate treatment. For example, a senior living in Des Moines with a home worth $175,000 can get a 

FHA reverse mortgage for only $144,336, which is the FHA mortgage limit in Des Moines. However, a senior living in Los Angeles 

with a home worth the same amount can get a reverse mortgage 

for the full $175,000 because the FHA mortgage limit in Los Angeles is $237,500. 

Section 227. Prohibition of Investor and Nonprofit Owners under 

Rehabilitation Loan Program 

In general, FHA home loans insured under section 203 of the National Housing Act are currently limited to borrowers who will occupy the property as their principal residences. One of the exceptions to this policy is for borrowers who obtain section 203(k) loans 

to purchase and rehabilitate homes. As recommended by the HUD 

Inspector General, this provision would remove mortgagors and comortgagors from the exemption list and therefore require owner-occupancy of any FHA insured home under the 203(k) program. 

Section 228. Rehabilitation Loan Advances 

To be eligible for insurance under section 203(k) of the National 

Housing Act, a rehabilitation loan must meet four conditions: (1) 

the loan may not exceed the FHA loan limit for the area, (2) the 

borrower and lender must agree on the loan interest rate, (3) the 

loan must be an acceptable risk, and (4) and the loan must comply 

with other terms and conditions as prescribed by HUD. 

Under this section 203(k) of the National Housing Act, an eligible 

FHA insured loan would include (1) a principal loan amount equal 

to the rehabilitated value of the structure, (2) an agreed interest 

rate, (3) acceptable underwriting risk, and (4) compliance with 

other departmental terms. During the rehabilitation phase period, 

a consultant or inspector is responsible for reviewing and approving the work of the mortgagor’s contractors before making advance 

payments to the general contractor or borrower. As recommended 

by the HUD Inspector General, this provision would also require 

that the lender incorporate into the loan agreement its responsibility to select an inspector or consultant who would act as an 

agent for the lender in approving advances under the loan. 

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Section 229. Nonprofit Purchasers under Property Disposition 

Sections 204(g) and 204(h) of the National Housing Act authorize 

HUD to dispose of one- to four-family property that HUD acquires 

by default of borrowers. This provision would require that nonprofit 

organizations be approved organizations as required under section 

501(c)(3) of the Internal Revenue Code of 1986 and that the nonprofit organization certify annually that it has been apprised and 

understands the applicable rules and guidelines of HUD. 

Section 230. Extension of Holding Period 

Section 912 of the Housing and Urban Development Act of 1970 

was created in the 91st Congress to provide authority to fine or imprison a purchaser of 1 to 4 unit buildings if there was a pattern 

or practice of purchasing, insuring through FHA and then subjecting the loan to default within the first year of purchase. This 

provision, as recommended by the HUD Inspector General, would 

extend that one year period to eighteen months. 

Section 231. Mandatory First-Time Homebuyer Counseling for Properties in High Foreclosure Neighborhoods 

The National Housing Act provides that all lenders must provide 

notice of the availability of homeownership counseling to certain 

prospective first-time homebuyers and to certain homebuyers who 

are delinquent on their mortgage loans. This section amends the 

National Housing Act to require HUD to carry out a pilot program 

to determine whether defaults and foreclosures would be prevented 

in high foreclosure areas if first-time homebuyers were required to 

complete a homeownership counseling program prior to obtaining 

an FHA-insured loan. HUD is directed to select a pilot area where 

the rate of foreclosures on FHA-insured loans exceeds the lesser of 

150 percent of the national early default claim rate on such loans 

or the national early default claim rate on such loans in the area 

served by the HUD field office where the pilot area is located. During the 1-year period beginning within 6 months of enactment of 

this bill, a first-time homebuyer will not be able to obtain an FHAinsured loan within the pilot area unless the homebuyer had completed a HUD-approved homeownership counseling class regarding 

the responsibilities and financial management involved in homeownership. HUD is directed to submit a report describing the effect 

that the pilot program had on defaults and foreclosures and to 

make recommendations regarding implementing the program on a 

nationwide basis. 

Section 232. Disposition of Assets in Revitalization Areas 

Title VI of the FY 1999 HUD Appropriations Act (Public Law 

105–276) amended the National Housing Act to provide HUD with 

additional flexibility in disposing of its inventory of single family 

homes acquired through foreclosure. Section 602 of the National 

Housing Act requires HUD to designate certain areas as ‘‘revitalization areas’’ if they meet one of the following conditions: (1) the 

median household income of the area is less than 60 percent of median household income of the State (or of the metropolitan area if 

the area is located in a metropolitan area); (2) the area has a disproportionately high concentration of foreclosures on FHA-insured 

homes; or (3) the homeownership rate in the area is substantially 

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below the homeownership rate for the metropolitan area. HUD is 

required to carry out a program under which foreclosed properties 

in these areas are sold in a manner that expands homeownership 

opportunities and contributes to revitalization of the areas. Units 

of local government and nonprofit organizations that agree to use 

the property in conjunction with homeownership plans are preferred purchasers of the property and may purchase properties in 

bulk at a discount from market value. This section directs HUD to 

continue to administer the program, to renew all contracts, and to 

enter into new contracts. 

TITLE III—SUPPORTIVE HOUSING FOR THE ELDERLY AND DISABLED

FAMILIES

Section 301. Authorization of Appropriations for Grants for Repairs 

to Federally Assisted Housing for the Elderly 

Section 301 authorizes appropriations of such sums as may be 

necessary for FY 2003 and 2004 to make grants to non-profit owners of Federally assisted housing for the elderly which is being converted to assisted living facilities. These grants are to be made for 

needed capital repairs to rehabilitate, modernize, or retrofit aging 

structures, common areas, or individual dwelling units. 

Section 302. Service Coordinators for Supportive Housing for Persons with Disabilities 

Current law does not include section 811 projects in the definition of Federally-assisted projects requiring service coordinators. 

This section expands eligible projects to include section 811 

projects.

Section 303. Demonstration Program for Elderly Housing for 

Intergenerational Families 

This section authorizes HUD to set up a demonstration program 

to increase the supply of intergenerational housing, including elder 

cottage housing opportunity units, in connection with the section 

202 supportive housing program for the elderly. Intergenerational 

is defined as a family that has a head of household who is an elderly person (62 years or older). HUD is to see that families participating in the demonstration program receive needed services, 

which may be provided by other agencies. Grants are to be made 

competitively for a total of two to four intergenerational projects. 

The program is to be funded with section 202 appropriated funds 

set aside for the program as needed in FY 2003 through FY 2006. 

Grants are to be made competitively to nonprofits for a total of two 

to four intergenerational projects. 

Section 304. Treatment of Projects Subject to Foreclosure 

This section requires that occupancy by elderly and handicapped 

families of maximum set incomes continue in section 202 projects, 

which have undergone foreclosure. Occupancy is to continue until 

the expiration date of the original loan term. After foreclosure, the 

maximum income limit for families occupying units may be increased to 80 percent of area median income if that level is necessary for the financial soundness of the project. If a foreclosed 

property is to be sold or disposed of, HUD must give right of first 

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refusal to purchase the property to a qualified nonprofit organization. HUD is to issue regulations for this section. 

TITLE IV—SECTION 8 RENTAL HOUSING ASSISTANCE PROGRAM

Section 401. Housing Voucher Demonstration 

Authorizes appropriations for a housing voucher demonstration 

program to provide 5,000 incremental vouchers for FY 2003 and FY 

2004. These vouchers are to be used exclusively for extremely lowincome families, in newly constructed or substantially rehabilitated 

housing. Extremely low-income families are defined as those families whose incomes do not exceed 30 percent of the area median income, or 30 percent of the national non-metropolitan median income. This voucher could be combined with any capital subsidy 

program, such as Low Income Housing Tax Credits, HOME, or 

CDBG. 

Section 402. Flexibility to Assist Hard-to-House Families 

Beginning in 2003, authorizes Public Agencies (PHA’s) to use up 

to 2 percent of funds allocated to them in any given year to directly 

support their section 8 housing choice voucher program for counseling, downpayment assistance, rental security deposits, and other 

activities that assist families in finding suitable housing. 

Section 403. Clarification on Prohibition on Re-Screening of Tenants 

This section clarifies re-screening provisions for all tenants in 

Public Housing Authority (PHA) projects facing housing conversion 

including opt-outs and prepayments. Under this section, PHAs are 

prohibited from re-screening existing section 8 tenants under different criteria than were used to determine their eligibility for continued occupancy. In 1999, Congress passed unified authority requiring HUD to provide ‘‘enhanced vouchers’’ for all tenants facing 

housing conversion actions. Congress further clarified that tenants 

receiving these protections may elect to remain in their units. 

HUD’s section 8 Renewal Policy Guide requires owners to accept 

these enhanced vouchers. The tenant is provided this protection 

until the tenant violates his or her lease. 

Section 404. PHA Administration Fees 

Beginning in FY 2003, the Secretary of HUD may pay incentive 

fees to public housing agencies that succeed in achieving high or 

substantially improved performances on specified program requirements or program goals, as established in the section 8 Management Assessment Program or through any other assessment program or regulation issued by the Secretary. The Secretary may set 

limitations on the amount of the fees to be paid. 

Section 405. Ensuring Ability to Use Enhanced Vouchers 

In the case of an eligibility event such as a prepayment of the 

mortgage or if an owner opts out of participating in a housing program, that owner of a multifamily housing project is required to 

lease to a family residing in the project who is provided with an 

enhanced voucher. 

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Section 406. Treatment of Over Housed Assisted Families 

Amends section 8(o) of the United States Housing Act of 1937 to 

prohibit public housing agencies from moving tenants from a unit 

where the tenant has faced a significant live event, such as the 

death of a spouse or a child going to college, and the PHA believes 

that the unit is inappropriately sized, unless there is a suitable 

unit in the same building or in the immediate neighborhood. These 

provisions are designed to preclude causing major personal upheaval, particularly for elderly residents, whose spouse has died 

and their two-bedroom apartment can not be replaced in the same 

building or on that block. 

Section 407. Extension of Manufactured Housing Demonstration 

Program 

This provision extends the 1999 manufactured homes section 8 

demonstration program through FY 2004, and requires HUD to 

submit a report on the program to Congress by March 31, 2005. 

The program was due to terminate in FY 2001. Section 557 in Public Law No. 105–276 allowed owners of mobile homes who rent 

spaces in mobile home parks to receive section 8 vouchers directly 

if their landlord refused to accept section 8. 

Section 408. Extension of Project-Based Section 8 Contract Renewals 

Under current law, rental reimbursement levels for expiring section 8 moderate rehabilitation contracts that are being renewed are 

based on the lesser of comparable market rents in the area or the 

level of fair market rents. This section amends the Multifamily Assisted Housing Reform and Affordability Act of 1997 to revise the 

(rental) reimbursement levels for expiring project-based section 8 

contracts. Instead of basing rental levels on the lesser of adjusted 

existing, fair market rents, which may result in lower rent levels 

for renewed contracts, the provision would set rents for covered 

projects undergoing contract renewal at the current rent levels in 

effect for that project immediately prior to the renewal. After the 

initial renewal of a contract, the Secretary of HUD would annually 

adjust rent levels based on operating cost adjustment factors. 

Section 409. Inspection of Units 

This section permits a PHA to make assistance payments for a 

dwelling unit without first inspecting it, if a reasonable number of 

units in that building had been inspected within 6 months prior to 

the date on which payment is made, and no major deficiencies were 

found, and if the unit itself is inspected no later than 30 days after 

payment is made. This section would also permit a PHA with a 

large jurisdiction to conduct unit inspections on a geographical 

basis, nine to fifteen months after the previous inspection rather 

than annually. 

Section 410. Escrow of Tenant Rent in Cases of Owner Failure to 

Maintain Unit 

Section 410 permits section 8 tenants to suspend their rental 

payments to a landlord whose rental payments from a PHA have 

been suspended because of failure to maintain a property in compliance with section 8 standards. The tenant’s share is to be placed 

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in an escrow account to be released to the owner if he complies 

with standards within a given period of time. If the owner does not 

comply with standards, the escrow account would be released to 

the tenant to be used to move and for a rental deposit in another 

unit. 

Section 411. Project-Based Vouchers Modifications 

This section permits PHAs to expand the number of projectbased units that can occupy a building in a non-impacted area, and 

it allows them to increase the number of project-based section 8 

units in a project occupied primarily by elderly or disabled persons, 

projects with no more than 25 dwelling units, or assisted housing 

consisting of single-family properties. This provision also permits 

PHAs to use section 8 project-based vouchers for assistance in 

HOPE VI projects or projects assisted with public housing capital 

funds. A waiting list may be maintained by PHAs which includes 

families that are applying for tenant-based assistance in the same 

waiting lists as those for project-based housing. Preference may be 

given for occupancy in half of the vacant units in a building to 

those applying for tenant-based assistance unless preferences for 

occupancy were designated for persons with disabilities under the 

PHAs annual housing plan. 

Section 412. Expanded Use of Enhanced Vouchers 

Current law provides enhanced vouchers so tenants can remain 

in a building that has opted out of the section 8 program. This section provides enhanced section 8 vouchers (up to 150 percent of the 

Fair Market Rent (FMR) for tenants who are forced to move because their unit is no longer available for rental use due to condo 

or coop conversions. The resident would be able to use the enhanced voucher in the same or neighboring zip code. 

Section 413. Demonstration Program for Rental Assistance for 

Grandparent-Headed or Relative-Headed Families 

This section authorizes HUD to conduct a demonstration program to determine the feasibility of setting aside section 8 assistance to eligible families and supportive services tailored to their 

needs. The demonstration program is to provide voucher assistance 

to participating families under this program for FY 2003 through 

FY 2006. The program calls for two to four agencies to participate 

in the program, and they are to be selected based on their ability 

to provide services to the families as well as national geographical 

diversity. The demonstration program is to be funded by funds 

made available for voucher assistance in FY 2003 through FY 2006, 

through amounts reserved from the funding by HUD for this purpose. 

Section 414. Eligibility of Grandparent-Headed and Relative-Headed Families for Family Unification Assistance 

Under the family unification program, HUD is authorized to provide tenant-based assistance to a family when it is certified that 

lack of adequate housing is the primary factor in the placement of 

the family’s child or children in out-of-home care or is the primary 

factor in the delayed discharge from such care. The law would be 

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amended to define ‘‘covered family’’ to include a child or a grandparent or relative who is raising the child. 

Section 415. Increased Payment Standard 

Under current law, PHAs may increase payment standards up to 

110 percent of Fair Market Rent (FMR) without HUD approval. 

This section permits PHAs that have extended search times for 

voucher recipients for an additional 90 days and still have a voucher success rate under 80 percent, and PHAs that have concentrations of voucher holders in poverty areas, to increase the voucher 

standards for units in a market area to between 110 and 120 percent of the FMR for the area without first obtaining approval by 

HUD. To qualify for this increase in payment standards, the voucher payment standards must have already been set at 110 percent 

or higher for the units in the area for six months prior to setting 

the new standard. Also, a PHA may establish a payment standard 

of 120 percent of FMR for a unit to be occupied by a disabled person without first receiving approval by HUD. Finally, payment 

standards for the disabled could be increased to 150 percent with 

the approval of HUD. 

Section 416. Protection of Innocent Tenants 

Section 6(l)(c) of the United States Housing Act of 1937, known 

as ‘‘one strike and out,’’ calls for the eviction of any tenant in assisted housing if a tenant, member of the tenant’s household, guest 

of the tenant, or person in the tenant’s control engages in drug-related activity or criminal activity that threatens the health, safety, 

or right of peaceful enjoyment of the premise by other tenants. This 

section amends the ‘‘one strike and out’’ provision by including protections against eviction for tenants or members of tenants’ family 

who are victims of domestic violence or dating violence. This section does not prevent PHAs from evicting those who engage in acts 

of physical violence against family or household members. 

TITLE V—PUBLIC HOUSING

Subtitle A—General Provisions 

Section 501. Joint Ventures 

This section clarifies that the Federal government’s role in review and approval of Public Housing Agency activities does not extend to joint ventures, partnerships, or business arrangements of 

a PHA or its subsidiary if Federal funds or income derived from 

Federal funds are not used in these ventures. This provision would 

allow greater flexibility to the PHA to engage in revenue enhancement sources of income without undue regulation. 

Section 502. Third-Party Public Housing Assessment System 

This section grants HUD the authority to develop a prototype of 

an alternative evaluation system that assesses the overall performance of PHAs in all major areas of management operations and in 

meeting their obligations. If funds are available, HUD is to enter 

into contract with a public, private, or nonprofit entity to perform 

this assessment in consultation with public housing residents, organizations and individuals who are experienced in managing public housing, real estate managers, and State and local governments. 

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HUD is required to submit a report one year after the contract is 

made detailing their findings and recommendations. The thirdparty system would not replace, alter, or terminate the applicability of the public housing assessment system currently in operation. 

Section 503. Public Housing Agency Plans for Certain Small Public 

Housing Agencies 

PHAs receiving assistance under section 8 or Public Housing programs are required to submit annual agency plans to HUD each 

fiscal year. This section would exempt small Public Housing Authorities from submitting annual agency plans for FY 2003 through 

FY 2005 provided they have not been designated as troubled authorities, and the agency can assure HUD the resident advisory 

boards and tenants would be given ample opportunities to express 

their thoughts and be notified of goals, policies, and objectives of 

the agency between FY 2003 and FY 2005. Small PHAs are defined 

as those that administer 100 or fewer public housing dwellings. 

This section also requires a report by the Comptroller General by 

September 30, 2004 describing and analyzing the administration, 

financial, and other burdens to small housing agencies.

Section 504. Affordable Assisted Living Facilities Demonstration 

Program 

This provision authorizes HUD to carry out a demonstration program to make grants to public housing authorities for the capital 

cost of converting public housing to assisted living facilities, and to 

provide service coordinators for these facilities. The program is limited to three demonstration projects. Applicants must provide sufficient evidence that there will be adequate funding for services to 

be provided to tenants in the converted project. 

Section 505. Protection of innocent tenants 

Section 6(l)(1) of the United States Housing Act of 1937, known 

as ‘‘one strike and out,’’ calls for the eviction of any tenant in public 

housing if a tenant, member of the tenant’s household, guest of the 

tenant, or person in the tenant’s control engages in drug-related activity or criminal activity that threatens the health, safety, or right 

of peaceful enjoyment of the premise by other tenants. This section 

amends that section by including protections against eviction for 

tenants or members of tenants’ family who are victims of domestic 

violence or dating violence. This section does not prevent PHAs 

from evicting those who engage in acts of physical violence against 

family or household members. 

Subtitle B—Hope VI Revitalization Program 

Section 521. Selection Criteria 

This section expands the selection criteria for HOPE VI awards 

to ensure that smaller public housing agencies are eligible for 

large-scale rehabilitation awards by striking ‘‘large-scale developments’’ and adding additional criteria for selection including the 

ability to commence and complete a revitalization plan expeditiously; minimize temporary and permanent displacement of curVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00093 Fmt 6659 Sfmt 6602 E:\HR\OC\HR640P2.107 HR640P2
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rent residents, and create more project-based units available to 

persons eligible for public housing in markets where it is needed. 

Section 522. Authorization of Appropriations 

This section authorizes appropriations for the HOPE VI program 

through 2004. 

Section 523. Extension of Program 

HOPE VI is scheduled to sunset at the end of FY 2002. This section authorizes appropriations for the program through September 

30, 2004. 

Section 524. HOPE VI Grants for Assisting Affordable Housing 

through Main Street Projects 

This section amends current law by permitting PHAs to use 

HOPE VI grants to provide assistance to smaller communities in 

developing affordable rental and homeownership housing for occupancy by low-income families in connection with a Main Street revitalization or redevelopment project. Smaller communities are defined as communities with populations of 30,000 or less, or communities served by PHAs administering 100 or fewer units of assisted 

housing. Grants can only be made for assisting affordable housing 

located in a Main Street project or commercial area. Any redevelopment or revitalization must comply with historic preservation 

guidelines for the area. HUD is authorized to provide up to 5 percent of HOPE VI appropriations in any given fiscal year for grants 

under this section. The Secretary is to establish criteria for the 

awarding of grants, and cost limits for projects. However, maximum grants for the purpose expressed in this section in any given 

fiscal year may not exceed $1 million for any smaller community. 

TITLE VI—HOMELESS HOUSING PROGRAMS

Section 601. Interagency Council on the Homeless 

This provision extends the authorization for the Interagency 

Council on the Homeless through FY 2004, which coordinates work 

on homelessness among Federal agencies. The title designation is 

changed to ‘‘United States Interagency Council on Homelessness’’. 

Section 602. Federal Emergency Management Agency Food and 

Shelter Program 

This section extends the authorization for FEMA’s Emergency 

Food and Shelter Program through FY 2004, which functions as a 

homeless prevention program by quickly providing assistance to 

families in crisis. 

Section 603. Emergency Shelter Grants Program 

This section extends the authorization for HUD’s Emergency 

Shelter Grants Program through FY 2004, providing capital and 

operating expenses for emergency shelter. 

Section 604. Supportive Housing Program 

This provision extends the authorization for HUD’s Supportive 

Housing Program through FY 2004, providing flexible grants to 

State and local governments and faith-based and community orgaVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00094 Fmt 6659 Sfmt 6602 E:\HR\OC\HR640P2.107 HR640P2
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nizations for temporary and permanent housing and support services for homeless people. It also funds renewals of contracts for permanent housing through the Housing Certificate Fund, for one 

year at a time, through FY 2004. Current law requires applications 

for renewal funding to compete with other homelessness programs, 

continually putting housing stability at risk for extremely vulnerable tenants. It also adds a set-aside for permanent housing by requiring that not less than 30 percent of funds for homeless assistance (except for amounts used for contract renewals) must be used 

for permanent housing and provides that ‘‘permanent housing activities’’ includes permanent housing designed primarily to serve 

homeless families with children. Finally, this section eliminates the 

cap on capital expenses for supportive housing. 

Section 605. Section 8 Assistance for Single Room Occupancy (SRO) 

Dwellings 

This section extends the authorization for HUD’s section 8 Single 

Room Occupancy (SRO) Moderate Rehabilitation Program through 

FY 2004. 

Section 606. Shelter Plus Care 

This section extends the authorization for HUD’s Shelter Plus 

Care Program through FY 2004. From FY 2003 forward, Shelter 

Plus Care renewals could be funded through section 8 appropriations. In addition, renewals, for one year terms, would be authorized as necessary, through FY 2004. This section also requires that 

those renewals meet local housing safety and quality standards as 

reviewed and approved by HUD. 

Section 607. Housing for Domestic Violence and Sexual Assault Victims 

This section also authorizes the appropriation of such sums as 

necessary from FY 2003 through 2007 to provide housing assistance to victims of domestic violence, stalking, or sexual assault 

when it has been determined that relocation would assist in avoiding future incidents. The assistance would include supportive housing under the McKinney-Vento Homeless Assistance Act, tenantbased rental assistance, assistance with the security deposit or first 

month’s rent, or project-based transitional housing. Organizations 

receiving assistance would have to provide 25 percent matching 

funds from other sources. At least 10 percent of the funds available 

for these uses would be set aside for grants to Indian tribes or Indian tribal organizations. 

Section 608. National Goal of Ending Homelessness 

This section amends the McKinney-Vento Homeless Assistance 

Act to provide that Congress declares a National goal of ending 

homelessness within 10 years after enactment of H.R. 3995. 

Section 609. Amendments to Table of Contents 

This section makes clerical amendments to the table of contents 

of the McKinney-Vento Homeless Assistance Act. 

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TITLE VII—NATIVE AMERICAN HOUSING

Section 701. Reauthorization of Native American Housing and Self 

Determination Act of 1996

Section 108 of the Native American Housing Assistance and Self 

Determination Act of 1996 (NAHASDA) authorizes appropriations 

for grants through September 30, 2001. Section 605(a) authorizes 

commitment for loan guarantees through FY 2001, section 605(b) 

authorizes credit subsidy through FY 2001, and section 703 authorizes appropriations for training and technical assistance through 

FY 2001. This section amends NAHASDA to authorize appropriations for grants, loan guarantees, credit subsidy, and training and 

technical assistance for FY 2003 and FY 2004. 

Section 702. Comprehensive Planning Under Native American 

Housing Block Grant Program 

This section amends NAHASDA to permit recipients to use a 

percentage of their grant amounts for comprehensive housing and 

community development planning activities. 

Section 703. Lands Title Report Commission 

This section removes the requirement that establishment of the 

Lands Title Report Commission be subject to prior appropriation, 

permitting the Secretary to appoint the commissioners. 

TITLE VIII—HOUSING IMPACT ANALYSIS

Section 801. Applicability 

Under Executive Order 12866 of September 30, 1993, by the 

President, Regulatory Planning and Review, section 1, each Federal executive branch agency must submit its ‘‘regulatory plan’’ of 

the most ‘‘significant regulatory actions’’ it expects to issue in the 

coming fiscal year to the Office of Management and Budget for review. This section requires Federal agencies, with some exceptions, 

to certify (with documentation) in the Federal Register and to the 

HUD Secretary that any proposed or final rule would not have a 

significant negative impact on housing affordability. 

Section 802. Exception for Certain Banking Rules 

The current Executive Order does not apply to certain rules and 

regulations, for example, those pertaining to military or foreign affairs functions. This title would not apply to any proposed or final 

rule relating to the safety and soundness of a Federally insured depository institution, credit union, Federal home loan bank, government sponsored enterprise, a Farm Credit institution or foreign 

bank or their branches, agencies or their representative offices operating in the United States. 

Section 803. Statement of Proposed Rulemaking 

Currently, the regulatory plans submitted by agencies must show 

why the proposed actions are needed, provide estimates of the anticipated costs and benefits, and alternatives to be considered. Unless the agency has made certification, the agency shall publish a 

general notice of proposed rulemaking for any proposed rule. The 

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terested persons to submit to the agency any written analyses, 

views and any specific alternatives to the proposed rule. The agency must also provide an opportunity for interested persons to comment prior to promulgation of the final rule. In addition, the agency is required to prepare and make available an initial housing impact analysis in accordance with section 804. 

Section 804. Initial Housing Impact Analysis 

For each proposed rule, the initial housing impact analysis will 

consist of a description of the reasons an agency is taking that particular action, the objectives and legal basis for such rule, and a description where feasible of the estimate of the extent to which the 

rule would increase the cost or reduce the supply of housing or 

land for residential development. The initial analysis must also include a description of the relevant Federal rules, which may be duplicative or conflict with the proposed rule. 

Section 805. Final Housing Impact Analysis 

Whenever an agency promulgates a final rule after publication of 

a general notice of proposed rulemaking, the agency must prepare 

a final housing impact analysis. Each final housing impact analysis 

will contain a statement of the need for and objectives of the rule; 

a summary of the significant issues, analyses and alternatives to 

the proposed rule raised during the public comment period in response to the proposed rule and initial housing impact analysis; a 

description of and an estimate of the extent to which the rule will 

impact housing affordability or an explanation of why no such estimate is available. The agency is required to make copies of the 

final housing impact analysis available to members of the public 

and must publish the analysis in the Federal Register. 

Section 806. Avoidance of Duplicative or Unnecessary Analyses 

An agency may perform the analyses required by sections 804 

and 805 in conjunction with any other agenda or analyses required 

by any other law, executive order, or directive. In order to avoid 

unnecessary duplication, an agency may consider a series of closely 

related rules as one rule for purposes of section 804 and 805 requirements. 

Section 807. Preparation of Analyses 

Section 6 of Executive Order 12866 of September 30, 1993, requires ‘‘to the extent feasible’’ a quantification of the costs and benefits of the analysis. In complying with sections 804 and 805, an 

agency may use either a quantifiable or numerical description of 

the effects of a proposed rule or alternatives to the proposed rule, 

or more general descriptive statement if quantification is not practicable or reliable. 

Section 808. Effect on Other Law 

Under section 9 of Executive Order 12866, nothing in the Order 

is to be construed as displacing the agencies’ authority or responsibilities, as authorized by law. The requirements of sections 804 

and 805 do not alter in any way otherwise applicable law to agency 

action. 

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Section 809. Procedure for Waiver or Delay of Completion 

In section 8 of Executive Order 12866, an agency is prohibited 

from publishing or issuing any regulatory action that has not been 

approved or waived by the Office of Information and Regulatory Affairs of the Office of Management and Budget. Except for emergencies that make compliance with section 805 impractical if any 

agency has not prepared a final housing impact analysis within 180 

days from the date of publication of the final rule, the rule would 

lapse and have no force or effect. 

Section 810. Definitions 

This section defines certain terms used in this title.

Section 811. Development 

This section provides that not later than one year after enactment, the Secretary of Housing and Urban Development must develop model initial and final housing impact analyses under this 

title which will be published in the Federal Register. The model 

analyses shall define the primary elements of a housing impact 

analyses and instruct other agencies on how to carry out and develop the analyses required under sections 804 and 805. 

Section 812. Judicial Review 

This section provides that any agency findings under this title 

would not be subject to judicial review by reason of this title. 

TITLE IX—OTHER HOUSING PROGRAMS

Section 901. GNMA Guarantee Fee 

Currently, Ginnie Mae charges an annual fee of six basis points 

on each mortgage that it guarantees. In addition, the 1998 Higher 

Education Act Amendments (Public Law No. 105–244) included a 

provision which would prospectively increase by 50 percent (to 9 

basis points) the annual fee charged beginning in FY 2005. This 

section repeals the scheduled increase to nine basis points in the 

GNMA guaranty fee included in Public Law 105–244. 

Section 902. Housing Counseling Programs 

Section 902 designates a single office in the Department of HUD 

to establish, coordinate, and administer all requirements, standards, and performance measures that relate to housing counseling, 

homeownership counseling, mortgage-related counseling, and rental housing counseling. 

Section 903. Assistance for Self-Help Housing Providers 

Currently, SHOP grants are made to nonprofits to purchase and 

improve home sites for sweat equity and volunteer-based homeownership programs such as Habitat for Humanity. There is a 

limit of $10,000 in average assistance per home. The grants must 

be used within 24 months. This section authorizes SHOP through 

FY 2004. In addition, the allowed average assistance per unit 

would be increased to $15,000 to reflect increased land and infrastructure costs since the creation of the program in 1996. The HUD 

Secretary could extend the time limit for using the funds to 48 

months in extraordinary circumstances. 

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Section 904. Housing Opportunities for Persons With AIDS 

HOPWA, a housing program designed specifically to assist individuals diagnosed with HIV/AIDS and their families, is authorized 

under the Cranston-Gonzalez National Affordable Housing Act. The 

program’s authorization expired at the end of FY 1994. This section 

reauthorizes the program through 2004. 

Section 905. Use of CDBG Amounts for Construction of TornadoSafe Shelter for Manufactured Housing Parks 

Currently, under section 105(a) of the Housing and Community 

Development Act of 1974, there is a long list of eligible activities 

for which CDBG funds can currently be used, but ‘‘tornado-safe 

shelter for manufactured housing parks’’ is not mentioned specifically. This section makes construction of tornado-safe shelter for 

manufactured housing parks and eligible activity under CDBG. 

The parks must be located in a neighborhood consisting predominantly of persons of low and moderate incomes. 

Section 906. Use of CDBG Amounts to Administer Renewal Communities 

Under the Housing and Community Development Act of 1974, 

CDBG funds can be used to administer Empowerment Zones, but 

no mention is made of ‘‘Renewal Communities.’’ Renewal Communities, as authorized by Public law 106–554, are to benefit solely 

from tax incentives through their Tax Incentive Utilization Plans. 

This section amends section 105(a) of the Housing and Community 

Development Act of 1974 by adding Renewal Communities, created 

on December 21, 2000 (Public Law 106–554), to empowerment 

zones to allow community development block grant funds to be 

used to administer these designated communities. The 2000 law 

authorized 40 communities throughout the country to be selected 

in a competition, similar in scope and objectives of the existing Empowerment Zones. 

Section 907. Subsidy Layering Review 

Under current law, government entities are required to review 

the amount of subsidy an assisted housing property receives. In 

some cases, there is confusion when a property receives both a government subsidy coupled with a low-income housing tax credit. It 

can often trigger multiple duplicative reviews that are costly and 

time consuming. This can lead to delays. This amendment clarifies 

the responsibility for subsidy layering reviews, by having HUD accept the review and certification required by tax credit agencies for 

tax credit projects under section 42 of the tax code. This will eliminate the confusion and help smooth the approval process and completion of the project. 

Section 908. Study of Community Renewal Program 

Earlier this year, HUD used 1990 census data to determine the 

eligibility of census tracts for designation of 40 Renewal Communities. This section authorizes HUD to conduct a study to analyze 

the extent to which use of 1990 census data, rather than 2000 census data, impairs the ability of the Renewal Community Program 

to fully carry out the purposes of the program. HUD designated 40 

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Renewal Communities earlier this year, using eligibility for census 

tract qualification based on 1990 census data. 

Section 909. Correction of Inequities in the Second Round of Empowerment Zones 

First round Empowerment Zones (EZs) were provided Social 

Service Block Grant (SSBG) funding as part of the enabling legislation. Round II EZs did not receive SSBG funding. Partial funding 

for Round II EZs has been provided through annual appropriations 

bills. This section authorizes appropriations to fund Round II Empowerment Zones, taking into account any amounts made from 

prior appropriation. Also allows EZs to use CDBG funds as the 

non-Federal match for EZ activities. 

Section 910. Employment Opportunities in Public and Indian Housing Agencies 

The Housing and Urban Development Act of 1968 requires that 

public housing agencies ‘‘make their best efforts’’ to provide economic opportunities to low- and very low-income persons when 

awarding contracts. This section requires that contracts of 

$500,000 or more performed in connection with Public Housing 

Capital or Public Housing Operating programs, have a minimum of 

30 percent new employees that are low income or very low income. 

Section 911. Assistance for Nonprofit Purchasers Preserving Affordable Housing 

This section authorizes sums necessary for HUD to provide assistance for operational, working capital, and organizational expenses for non-profit organizations to acquire affordable housing 

for the purpose of maintaining its affordability. 

Section 912. Homeownership for Municipal Employees 

The Housing and Community Development Act of 1974 has 

homeownership assistance as an eligible activity for Community 

Development Block Grants, for households with incomes up to 80 

percent of area median income. This section expands income eligibility from 80 percent to 115 percent of the area median income 

and up to 150 percent in ‘‘high cost’’ markets, for CDBG homeownership programs for uniformed employees, including policemen, 

firemen, maintenance workers, and teachers. 

Section 913. Sense of Congress Regarding HUD Office Of Disability 

Policy 

Congress recognizes the importance of addressing the needs of 

people with disabilities and asks HUD to: Appoint a permanent director to the Office of Disability Policy; examine and recommend 

potential enhancements to the Office; and establish a one-stop resource center within HUD for people with disabilities. 

Section 914. Transfer of Rural Multifamily Rental Housing Projects 

to Nonprofits and Local Housing Authorities 

Since August 6, 1996, the Housing Act of 1949, as amended, provides that the ownership or control of rental housing financed 

under the section 515 program may only be transferred if the Secretary of Agriculture determines that the transfer would further 

101

the provision of housing for low-income families and that the transfer would be in the best interests of the residents and the Federal 

government. This section would amend section 515 of the Housing 

Act of 1949 to direct the Secretary to encourage the transfer of 

ownership or control of section 515 housing to nonprofit organizations and local housing authorities, and to encourage and give priority to the funding of the renovation of existing projects upon their 

transfer. 

Section 915. Sense of Congress Regarding Consumer Protection and 

Home Warranties 

The National Housing Act provides that, unless a property is approved for FHA mortgage insurance prior to the beginning of construction, an FHA-insured mortgage on the property may not exceed 90 percent of the property’s value unless (1) the property is 

covered by a warranty plan acceptable to HUD or (2) construction 

was completed more than one year prior to the application for the 

FHA-insured loan. In October 2001, HUD issued Mortgagee Letter 

2001–27 which expanded the definition of ‘‘pre-approval’’ by noting 

that it will accept the issuance of a building permit by a local jurisdiction as evidence of pre-approval. In such cases, a HUD-approved 

10-year warranty plan will not be required. Based on the findings 

that 77 percent of structural damage occurs when a home is 4 or 

more years old, and that major structural damage would lead to defaults on FHA-insured loans which are 100 percent insured by 

HUD, this section expresses the sense of Congress that HUD implement a program to provide incentives to homebuilders to offer 

10-year warranties for new homes purchased with FHA-insured 

loans. 

Section 916. Demonstration Program for Affordable Housing Database 

The Secretary is directed to create an electronic or otherwise 

readily available database of available affordable housing and 

available affordable housing programs. Under the provision, the 

databases would include regularly updated lists of rental units that 

accept section 8 vouchers. Information about the location of the 

rental units, the number of units of each bedroom size, and the accessibility of the units to public transportation are to be provided. 

The amendment authorizes appropriation of funds for three demonstration projects. 

Section 917. HUD Study Regarding Main Street Partnership 

This section requires that HUD conduct a study to determine the 

feasibility of establishing a ‘‘Federal Main Street Partnership 

Fund’’ to make grants to communities to make fast-track changes 

to zoning and planning regulations that may inhibit the revitalization of downtown commercial areas for mixed-use affordable housing as well as commercial uses. 

Section 918. Contractual Commitments for Rural Multifamily Rental Housing 

The Housing Act of 1949 provides that borrowers who wish to 

prepay section 514 and 515 loans must apply to USDA for approval 

of the prepayment. Within 30 days of receiving such an offer, 

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USDA must notify the tenants, interested nonprofit organizations, 

and appropriate State and local agencies. USDA is then required 

to make ‘‘reasonable’’ efforts to encourage the borrowers to agree to 

keep the property as low-income housing for an additional 20 

years. As inducements USDA may use several options: (1) Offer to 

increase the rate of return on the borrowers’ original investment, 

(2) offer to reduce the loan interest rate to as low as 1 percent, (3) 

offer additional rental assistance payments, (4) offer an equity loan 

for up to 90 percent of the borrowers’ equity in the property, (5) 

offer additional rental assistance to keep tenants’ rent from increasing if the borrower accepts option two or four, and (6) for 

projects that are receiving section 8 assistance, to defray the cost 

of long-term repair or maintenance of the projects USDA may permit the owners to receive rent in excess of the amount determined 

to be necessary. 

If the borrowers still wish to prepay, the property must first be 

offered for sale to a qualified nonprofit organization or public body. 

Qualified organizations are defined as those which USDA determines are capable of managing the property for its remaining useful life and who agree to maintain the property as affordable to 

low- and very-low-income families. If no bona fide purchase offer is 

received within 180 days, then USDA may accept the offer to prepay the loan. Prepayment will be accepted for no more than 5,000 

units of housing in a given fiscal year. This section would provide 

that, if advance appropriations of enhanced section 8 vouchers are 

available for all low-income residents of the projects, then owners 

of projects financed with section 514 and 515 loans may prepay the 

loans without restrictions after the later of (1) 20 years from the 

date on which the loan was made, and (2) the date which the 

owner and USDA have agreed to maintain the low-income use of 

the housing.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

CRANSTON-GONZALEZ NATIONAL AFFORDABLE 

HOUSING ACT 

* * * * * * *

TITLE I—GENERAL PROVISIONS AND 

POLICIES 

* * * * * * *

SEC. 104. DEFINITIONS. 

As used in this title and in title II: 

(1) * * *

* * * * * * *

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(6) The term ‘‘community housing development organization’’ means a nonprofit organization as defined in paragraph (5), 

that—(A) * * *

* * * * * * *

In the case of an organization serving more than one county, 

the Secretary may not require that such organization, to be 

considered a community housing development organization for 

purposes of this Act, include as members on the organization’s 

governing board low-income persons residing in each county 

served. In establishing requirements for an organization to be 

considered a community housing development organization for 

purposes of this Act, the Secretary may not prohibit, limit, or 

restrict membership on the board by public employees who are 

not elected or appointed or who do not exercise policy-making 

or policy-determining functions.

* * * * * * *

(8) The term ‘‘housing’’ includes manufactured housing and 

manufactured housing lots and elder cottage housing opportunity units that are small, free-standing, barrier-free, energyefficient, removable, and designed to be installed adjacent to 

existing 1- to 4-family dwellings. Such term also includes an 

additional room in, or a cottage housing opportunity unit installed adjacent to, an existing 1- to 4-family dwelling, that is 

necessary to permit the habitation, with the low-income family 

occupying the dwelling, of an elderly person who is a relative 

of the family and to avoid placement of such relative in an institutionalized setting, foster care, or other out-of-home setting.

* * * * * * *

TITLE II—INVESTMENT IN AFFORDABLE 

HOUSING 

SEC. 201. SHORT TITLE. 

øThis title¿ Subtitles A through F of this title may be cited as the 

‘‘HOME Investment Partnerships Act’’. 

* * * * * * *

Subtitle A—HOME Investment Partnerships 

* * * * * * *

SEC. 212. ELIGIBLE USES OF INVESTMENT. 

(a) * * *

(b) INVESTMENTS.—Participating jurisdictions shall have discretion to invest funds made available under this subtitle as equity investments, interest-bearing loans or advances, noninterest-bearing 

loans or advances, interest subsidies or other forms of assistance 

that the Secretary has determined to be consistent with the purposes of this title. Each participating jurisdiction shall have the 

right to establish the terms of assistance. Notwithstanding the preceding sentence, in the case of homeownership assistance for residences of owners described in section 215(b)(2)(B), funds made 

104

available under this subtitle may only be invested (1) to provide 

amounts for downpayments on mortgages, (2) to pay reasonable 

closing costs normally associated with the purchase of a residence, 

(3) to obtain pre- or post-purchase counseling relating to the financial and other obligations of homeownership, or (4) to subsidize 

mortgage interest rates.

* * * * * * *

(h) MONITORING FEES.—Monitoring fees under section 226(c) for 

an affordable housing project may be paid for from amounts made 

available under this subtitle to the project, in accordance with an 

agreement pursuant to section 226(a).

* * * * * * *

SEC. 214. INCOME TARGETING. 

Each participating jurisdiction shall invest funds made available 

under this subtitle within each fiscal year so that—

(1) * * *

(2) with respect to homeownership assistance, 100 percent of 

such funds are invested with respect to dwelling units that are 

occupied by households that qualify as low-income families or 

families described in section 215(b)(2)(B); and 

* * * * * * *

SEC. 215. QUALIFICATION AS AFFORDABLE HOUSING. 

(a) * * *

(b) HOMEOWNERSHIP.—Housing that is for homeownership shall 

qualify as affordable housing under this title only if the housing— (1) * * *

ø(2) is the principal residence of an owner whose family 

qualifies as a low-income family— ø(A) in the case of a contract to purchase existing housing, at the time of purchase; 

ø(B) in the case of a lease-purchase agreement for existing housing or for housing to be constructed, at the time 

the agreement is signed; or 

ø(C) in the case of a contract to purchase housing to be 

constructed, at the time the contract is signed;¿

(2) is the principal residence of an owner who—

(A) is a member of a family that qualifies as a low-income family—

(i) in the case of a contract to purchase existing housing, at the time of purchase; 

(ii) in the case of a lease-purchase agreement for existing housing or for housing to be constructed, at the 

time the agreement is signed; or 

(iii) in the case of a contract to purchase housing to 

be constructed, at the time the contract is signed; or 

(B)(i) is a uniformed employee (which shall include policemen, firemen, and sanitation and other maintenance 

workers) or a teacher who is an employee, of the participating jurisdiction (or an agency or school district serving 

such jurisdiction) that is investing funds made available 

under this subtitle to support homeownership of the residence; and 

105

(ii) is a member of a family whose income, at the time referred to in clause (i), (ii), or (iii) of subparagraph (A), as 

appropriate, and as determined by the Secretary with adjustments for smaller and larger families, does not exceed 

115 percent of the median income of the area, except that, 

with respect only to such areas that the Secretary determines have high housing costs, taking into consideration 

median house prices and median family incomes for the 

area, such income limitation shall be 150 percent of the median income of the area, as determined by the Secretary 

with adjustments for smaller and larger families;

* * * * * * *

SEC. 220. MATCHING REQUIREMENTS. 

(a) CONTRIBUTION.—Each participating jurisdiction shall make 

contributions to housing that qualifies as affordable housing under 

this title that total, throughout øa fiscal year¿ a program year of 

the jurisdiction, not less than 25 percent of the funds drawn from 

the jurisdiction’s HOME Investment Trust Fund in øsuch fiscal 

year¿ such program year. Such contributions shall be in addition 

to any amounts made available under section 216(3)(A)(ii). 

* * * * * * *

(d) REDUCTION OF REQUIREMENT.—

(1) IN GENERAL.—The Secretary shall reduce the matching 

requirement under subsection (a) with respect to any funds 

drawn from a jurisdiction’s HOME Investment Trust Fund Account during a øfiscal year¿ program year of the jurisdiction

by—

(A) * * *

* * * * * * *

(3) DISTRESS CRITERIA.—For purposes of a jurisdiction other 

than a State certifying that it is distressed, the following criteria shall apply: 

(A) POVERTY RATE.—The average poverty rate in the jurisdiction for the calendar year immediately preceding the 

year in which its øfiscal¿ program year begins was equal 

to or greater than 125 percent of the average national poverty rate during such calendar year (as determined according to information of the Bureau of the Census). 

(B) PER CAPITA INCOME.—The average per capita income 

in the jurisdiction for the calendar year immediately preceding the year in which its øfiscal¿ program year begins 

was less than 75 percent of the average national per capita 

income during such calendar year (as determined according to information of the Bureau of the Census). 

* * * * * * *

(5) WAIVER IN DISASTER AREAS.—If a participating jurisdiction is located in an area in which a declaration of a disaster 

pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act is in effect for any part of a øfiscal year¿

program year of the jurisdiction, the Secretary may reduce the 

matching requirement for that fiscal year under subsection (a) 

with respect to any funds drawn from a jurisdiction’s HOME 

106

Investment Trust Fund Account during that fiscal year by up 

to 100 percent. 

* * * * * * *

SEC. 226. MONITORING OF COMPLIANCE. 

(a) ENFORCEABLE AGREEMENTS.—Each participating jurisdiction, 

through binding contractual agreements with owners and otherwise, shall ensure long-term compliance with the provisions of this 

title. Such measures shall provide for (1) enforcement of the provisions of this title by the jurisdiction or by the intended beneficiaries, øand¿ (2) remedies for the breach of such provisions, and 

(3) such fees as may be established by the participating jurisdiction 

pursuant to subsection (c). 

ø(b) PERIODIC MONITORING.—Each participating jurisdiction, not 

less frequently than annually, shall review the activities of owners 

of affordable housing assisted under this title for rental to assess 

compliance with the requirements of this title. Such review shall 

include on-site inspection to determine compliance with housing 

codes and other applicable regulations. The results of each review 

shall be included in the jurisdiction’s performance report submitted 

to the Secretary under section 108(a) and made available to the 

public.¿

(b) PERIODIC MONITORING.—

(1) REQUIREMENT.—Each participating jurisdiction shall review the activities of owners of affordable housing for rental 

that is assisted under this title to assess compliance with the requirements of this title. Such review shall be conducted in compliance with the provisions of paragraph (2) (relating to frequency) and shall include on-site inspection to determine compliance with housing codes and other applicable regulations. 

(2) FREQUENCY.—The review required by paragraph (1) shall 

be conducted not less frequently than annually, except that, in 

the case of affordable housing for rental that has been allocated 

a low-income housing tax credit by a housing credit agency pursuant to section 42 of the Internal Revenue Code 1986 and is 

not considered (under such regulations as the Secretary shall 

prescribe) to be high-risk housing, the on-site inspection referred 

to in paragraph (1) shall be conducted once every 3 years, or 

more often as may be required under the regulations issued 

pursuant to such section 42. 

(3) INCLUSION IN PERFORMANCE REPORT.—The results of each 

review of a participating jurisdiction shall be included in the 

performance report of the jurisdiction that is submitted under 

section 108(a) for the year in which the review is conducted and 

shall be made available to the public. 

(c) MONITORING FEES.—A participating jurisdiction may establish 

and charge reasonable fees to affordable housing projects assisted 

under this title for costs of monitoring compliance with the provisions of this title.

ø(c)¿ (d) SPECIAL PROCEDURES FOR CERTAIN PROJECTS.—In the 

case of small-scale or scattered site housing, the Secretary may 

provide for such streamlined procedures for achieving the purposes 

of this section as the Secretary determines to be appropriate. 

* * * * * * *

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Subtitle B—Community Housing Partnership 

* * * * * * *

SEC. 233. HOUSING EDUCATION AND ORGANIZATIONAL SUPPORT. 

(a) * * *

* * * * * * *

(d) LIMITATIONS.—Contracts under this section with any one contractor for a fiscal year ømay not—

ø(1)¿ may not exceed 20 percent of the amount appropriated 

for this section for such fiscal yearø; or 

ø(2) provide more than 20 percent of the operating budget 

(which shall not include funds that are passed through to community housing development organizations) of the contracting 

organization for any one year.¿.

* * * * * * *

Subtitle C—Other Support for State and Local 

Housing Strategies 

* * * * * * *

SEC. 243. CONDITIONS OF CONTRACTS. 

(a) * * *

(b) CONTRACT TERMS.—Contracts under this subtitle shall be for 

not more than 3 years øand shall provide not more than 20 percent 

of the operating budget of the contracting organization in any one 

year¿. Within any fiscal year, contracts with any one organization 

may not be entered into for a total of more than 20 percent of the 

funds appropriated under this subtitle in that fiscal year. 

* * * * * * *

øSubtitle E—Mortgage Credit Enhancement 

øSEC. 271. REPORT ON CREDIT ENHANCEMENT. 

ø(a) IN GENERAL.—The Comptroller General of the United States 

shall carry out a study of ways in which financing for affordable 

housing may be made available to assist in the most efficient implementation of comprehensive housing affordability strategies of 

participating jurisdictions. In conducting the study, the Comptroller General shall draw upon the expertise of such representatives of State and local government, State and local housing finance agencies, agencies of the United States, government-sponsored mortgage finance corporations, for-profit and nonprofit housing developers, private financial institutions, and sources of

long-term mortgage investment, as the Comptroller General determines to be appropriate. 

ø(b) REPORT.—Not later than one year after the enactment of 

this Act, the Comptroller General shall submit to the Congress and 

the Secretary a report containing any recommendations for legislative or administrative actions needed to improve the availability of 

mortgage finance for affordable housing. The report shall include, 

but need not be limited to, an assessment of—

108

ø(1) the need for the Department of Housing and Urban Development or other agencies of the United States to provide 

partial credit enhancement to make financing for affordable 

housing available efficiently and at the lowest possible cost; 

and 

ø(2) alternative ways in which— ø(A) the Department could provide any needed credit enhancement on a one-stop basis for participating jurisdictions, in coordination with other forms of assistance under 

this subtitle; 

ø(B) the Department or other agencies of the Federal 

Government could assist government-sponsored mortgage 

finance corporations in the financing of mortgages on affordable housing through the development of mortgagebacked securities that are more standardized and readily 

traded in the capital markets; 

ø(C) the capacities of existing agencies of the United 

States could be used to provide mortgage finance more efficiently for affordable housing through government-sponsored mortgage finance corporations; and 

ø(D) the interests of the Federal Government could be 

protected and any risks of loss could be minimized through 

requirements for fees, mortgage insurance, risk-sharing, 

secure collateral, and guarantees by other parties, and 

through standards relating to minimum capital and prior 

experience with underwriting, origination and servicing.¿

Subtitle E—Other Assistance 

SEC. 271. DOWNPAYMENT ASSISTANCE INITIATIVE. 

(a) GRANT AUTHORITY.—The Secretary may make grants to participating jurisdictions to assist low-income families to achieve 

homeownership, in accordance with this section. 

(b) ELIGIBLE ACTIVITIES.—Amounts made available under this 

section may be used only for downpayment assistance toward the 

purchase of single family housing by low-income families who are 

first-time homebuyers. For purposes of this title, the term ‘‘downpayment assistance’’ means assistance to help a family acquire a principal residence. 

(c) HOUSING STRATEGY.—To be eligible to receive a grant under 

this section for a fiscal year, a participating jurisdiction shall include in its comprehensive housing affordability strategy under section 105 for such year a description of the use of the grant amounts. 

(d) FORMULA ALLOCATION.—For each fiscal year, the Secretary 

shall allocate any amounts made available for assistance under this 

section for the fiscal year in accordance with a formula, which shall 

be established by the Secretary, that considers a participating jurisdiction’s need for and prior commitment to assistance to homebuyers. The formula may include minimum and maximum allocation amounts. 

(e) REALLOCATION.—If any amounts allocated to a participating 

jurisdiction under this section become available for reallocation, the 

amounts shall be reallocated to other participating jurisdictions in 

accordance with the formula established pursuant to subsection (c), 

except that if a local participating jurisdiction failed to receive 

109

amounts allocated under this section and is located in a State that 

is a participating jurisdiction, the funds shall be reallocated to the 

State. 

(f) APPLICABILITY OF OTHER PROVISIONS.—

(1) IN GENERAL.—Except as otherwise provided in this section, grants under this section shall not be subject to the provisions of this title. 

(2) APPLICABLE PROVISIONS.—In addition to the requirements 

of this section, grants under this section shall be subject to the 

provisions of title I, sections 215(b), 218, 219, 221, 223, 224, 

and 226(a) of subtitle A of this title, and subtitle F of this title. 

(3) REFERENCES.—In applying the requirements of subtitle A 

referred to in paragraph (2)—

(A) any references to funds under subtitle A shall be considered to refer to amounts made available for assistance 

under this section; and 

(B) any references to funds allocated or reallocated under 

section 217 or 217(d) shall be considered to refer to 

amounts allocated or reallocated under subsection (d) or (e) 

of this section, respectively. 

(g) ADMINISTRATIVE COSTS.—Notwithstanding section 212(c), a 

participating jurisdiction may use funds under subtitle A for administrative and planning costs of the jurisdiction in carrying out 

this section, and the limitation in section 212(c) shall be based on 

the total amount of funds available under subtitle A and this section. 

(h) FUNDING.—There are authorized to be appropriated such sums 

as may be necessary to carry out this section for each of fiscal years 

2003 and 2004.

Subtitle F—General Provisions 

* * * * * * *

SEC. 291. RELOCATION ASSISTANCE AND DOWNPAYMENT ASSISTANCE. 

The Uniform Relocation Assistance and Real Property Acquisition 

Policies Act of 1970 shall not apply to downpayment assistance 

under this title. 

Subtitle G—Matching Grants for State and Local 

Affordable Housing Trust Funds 

SEC. 292. MATCHING GRANT PROGRAM. 

(a) FINDINGS.—The Congress finds the following: 

(1) There are more than 280 housing trust funds in the 

United States. 36 States have created housing trust funds and 

the remainder were created by cities and counties. 

(2) More than $500,000,000 is spent for affordable housing 

through these trust funds every year and this amount is increasing. On average, for every dollar committed to a housing 

project by a housing trust fund, another $5 to $10 is leveraged 

in other public and private resources. 

(3) Hundreds of thousands of housing units have been supported through housing trust funds. 

110

(4) Housing trust funds support a variety of housing activities 

for low- and very low-income households, including new construction, preservation of existing housing, emergency repairs, 

homeless shelters, housing-related services, and capacity building for nonprofit organizations. 

(5) At any given time, as many as 50 additional jurisdictions 

are considering the creation of a housing trust fund. 

(6) These unique funds are a fundamental aspect of emerging 

housing policy in the United States. 

(7) Housing trust funds have demonstrated that when government makes a commitment to address critical housing needs, 

the on-going dedicated source of revenue allows for more intelligent planning to address housing needs and for improved proposals submitted by the housing industry in an effort to effectively use existing resources. 

(8) Housing trust funds enable jurisdictions to elevate funding for their critical housing needs by committing resources to 

a process that treats affordable housing as an essential component of maintaining healthy communities. 

(9) Jurisdictions have documented increased jobs, growing 

sales taxes, higher property tax revenues, and many other economic benefits from the operation of their housing trust funds. 

(10) Providing federal incentives to encourage the establishment of more State and local housing trust funds, and providing Federal funds for the more than 280 existing housing 

trust funds, would be a positive action in addressing the affordable housing crisis. 

(b) IN GENERAL.—The Secretary of Housing and Urban Development may make grants under this section to affordable housing 

trust funds that are distinct funds, established by States and units 

of general local government, that use public revenue to support the 

production, preservation, and rehabilitation of affordable housing, 

as determined by the Secretary. 

(c) ALLOCATIONS FOR STATES AND UNITS OF GENERAL LOCAL

GOVERNMENT.—The Secretary shall use the total amount made 

available for grants under this section for each fiscal year to provide 

such grants to affordable housing trust funds of States and units 

of general local government. Of such total amount, the Secretary 

shall allocate 40 percent for grants for affordable housing trust 

funds of States and 60 percent for grants for affordable housing 

trust funds of units of general local government. Each State affordable housing trust fund shall receive at least 1 percent of the 

amount allocated for the States. 

(d) MATCHING REQUIREMENT.—The Secretary may not make a 

grant under this section for any fiscal year to any affordable housing trust fund in an amount in excess of the amount that the State 

or local government administering the trust fund certifies, as the 

Secretary shall require, that will be contributed from non-Federal 

sources during such fiscal year to the trust fund for use only for production, preservation, and rehabilitation of affordable housing. 

(e) USE REQUIREMENTS.—Amounts provided from a grant under 

this section shall be subject to the following requirements: 

(1) DISTRIBUTION TO ELIGIBLE ENTITIES.—Grant amounts 

under this section (excluding any amounts used under paragraph (2)) shall be distributed to eligible entities for use by such 

111

entities only for eligible activities in the jursidiction served by 

the affordable housing trust fund, as follows: 

(A) USE FOR RENTAL HOUSING FOR EXTREMELY LOW-IN- COME FAMILIES.—75 percent of such amounts shall be distributed for use only for eligible activities relating to qualified affordable housing that is available for rental by extremely low-income families in the jurisdiction served by 

the affordable housing trust fund. Such rental housing 

shall include limited equity cooperative housing, as such 

term is defined in section 143(k) of the Internal Revenue 

Code of 1986 (26 U.S.C 143(k)). 

(B) USE FOR RENTAL HOUSING OR HOMEOWNERSHIP FOR

LOW-INCOME FAMILIES.—25 percent of such amounts shall 

be distributed for use only for eligible activities relating to 

qualified affordable housing that is available for rental by 

low-income families in the jurisdiction served by the affordable housing trust fund, or for homeownership assistance 

for low-income families in such jurisdiction. Such rental 

housing and homes for homeownership shall include housing of a cooperative housing corporation, as such term as 

defined in section 216(b) of the Internal Revenue Code of 

1986 (26 U.S.C. 216(b)). 

(2) OPERATING ASSISTANCE FOR NONPROFIT HOUSING DEVEL- OPMENT ORGANIZATIONS.—An affordable housing trust fund 

that receives a grant under this section may use not more than 

5 percent of such grant amounts to provide assistance to nonprofit organizations involved in the development, rehabilitation, 

or preservation of affordable rental housing for payment of operating costs of such organizations. Such nonprofit organizations shall include community housing development organizations (as such term is defined in section 104 of this Act, community development financial institutions (as such term is defined 

in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702)), community 

development corporations (as such term is defined in section 

31131 of the National Community Economic Partnership Act of 

1994 (42 U.S.C. 13851)), and community-based development organizations. 

(3) COST LIMITS.—The Secretary shall establish limitations 

on the amount of grant amounts that may be used, on a per 

unit basis, for eligible activities. Such limitations shall be the 

same as the per unit cost limits established pursuant to section 

212(e), as adjusted annually, and established by number of bedrooms, market area, and eligible activity. 

(f) ALLOCATION PLAN.—

(1) REQUIREMENT.—With respect to a fiscal year, an affordable housing trust fund shall be eligible to receive a grant 

under this section for such fiscal year only if the trust fund has 

established an allocation plan that has been submitted to the 

Secretary and reviewed and approved by the Secretary as in accordance with this subsection. The Secretary may disapprove an 

allocation plan only if the plan fails to comply with requirements set forth in this section. 

(2) ESTABLISHMENT.—An allocation plan in accordance with 

this subsection is a plan, established by an affordable housing 

112

trust fund for a fiscal year, for the distribution of grant 

amounts provided under this section to the trust fund for such 

fiscal year. 

(3) NOTICE.—In establishing an allocation plan, the affordable housing trust fund shall notify the public of the establishment of the plan, provide an opportunity for public comments 

regarding the plan, consider any public comments received, and 

make the completed plan available to the public. 

(4) CONTENTS.—An allocation plan of an affordable housing 

trust fund shall include the following information: 

(A) APPLICATION REQUIREMENTS FOR ELIGIBLE ENTITIES

AND SUBRECIPIENTS.—The allocation plan shall set forth 

the requirements for eligible entities and eligible subrecipients to apply to receive assistance from grant amounts 

under this section, including a requirement that each such 

application include— (i) a description of the eligible activities to be conducted using such assistance; and 

(ii) a certification by the applicant that any housing 

units assisted with such assistance will comply with 

the requirements under— (I) subsection (k)(9)(A) (relating to rents 

charged); 

(II) subsection (k)(9)(B) (relating to tenant rent 

contribution); 

(III) subsection (k)(9)(C) (relating to availability 

of units for voucher holders); and 

(IV) subsection (k)(9)(E) (relating to use as qualified affordable housing for 40 years). 

(B) SELECTION AND PREFERENCE CRITERIA FOR ELIGIBLE

ENTITIES AND SUBRECIPIENTS.—The allocation plan shall 

set forth the factors for consideration in selecting among 

applicants that meet the application requirements set forth 

pursuant to subparagraph (A), which shall give preference 

to applicants based on—

(i) the amount of assistance leveraged by the applicant from private and other non-Federal sources for 

carrying out the eligible activities to be funded with assistance from grant amounts under this section, including assistance made available under section 8 of the 

United States Housing Act of 1937 (42 U.S.C. 1437f) 

that is devoted to the project that contains the qualified 

affordable housing to be assisted with such assistance; 

(ii) the extent of local assistance that will be provided 

in carrying out the eligible activities, including—

(I) financial assistance; 

(II) the extent to which the applicant has worked 

to address issues of siting and exclusionary zoning 

or other policies that are barriers to affordable 

housing with the unit of general local government 

in which the housing to be assisted with such assistance will be located; and 

(III) the extent to which the applicant has 

worked with the unit of general local government 

to reduce the barriers to affordable housing; 

113

(iii) the degree to which the project in which the 

qualified affordable housing will be located will have 

residents of various incomes; 

(iv) the extent of employment and other economic opportunities for low-income families in the area in 

which the housing will be located; 

(v) the extent to which the applicant demonstrates 

the ability to maintain dwelling units as qualified affordable housing through the use of assistance made 

available under this section, assistance leveraged from 

non-Federal sources, assistance made available under 

section 8 of the United States Housing Act of 1937 (42 

U.S.C. 1437f), State or local assistance, programs to 

increase tenant income, cross-subsidization, and any 

other resources; 

(vi) the extent to which the applicant demonstrates 

that the county in which the housing is to be located 

is experiencing an extremely low vacancy rate; 

(vii) the extent to which the percentage of the housing 

located in such county that is extremely old housing exceeds 35 percent; 

(viii) whether the applicant has provided that—

(I) 75 percent of the grant amounts will be used 

for eligible activities relating to housing located in 

census tracts in which the number of families having incomes less than the poverty line is less than 

20 percent or in communities undergoing revitalization; and 

(II) 25 percent of the grant amounts will be used 

for eligible activities relating to housing that is located in census tracts in which the number of families having incomes less than the poverty line is 

greater than 20 percent and is not located in a 

community undergoing revitalization; and 

(ix) whether the applicant has provided that—

(I) not less than 45 percent of the grant amounts 

will be used for eligible activities relating to housing that is affordable to families having incomes 

less than 30 percent of the greater of (aa) the median income for the area in which the housing is 

located, or (bb) the median income for the State in 

which the housing is located; 

(II) not less than 30 percent of the grant 

amounts will be used for eligible activities relating 

to housing that is affordable to families having incomes not exceeding the amount earned by a family having one individual (or 1.5 individuals in the 

case of a family consisting of 3 or more individuals), who is employed on a full-time basis in a position paying the higher of (aa) the Federal minimum wage under section 6(a)(1) of the Fair Labor 

Standards Act of 1938 (29 U.S.C. 206(a)(1)), or 

(bb) the minimum wage under State law of the 

State in which the housing is located; and 

114

(III) not more than 25 percent of the grant 

amounts will be used for eligible activities relating 

to housing for families having incomes that (aa) 

are greater than the incomes referred to in subclauses (I) and (II) of this clause, but (bb) do not 

exceed the higher of the median income for the 

State in which the housing is located or 80 percent 

of the median income for the area in which the 

housing is located. 

(5) CONSOLIDATED PLAN.—The Secretary shall provide that a 

State or unit of general local government administering an affordable housing trust fund may comply with the requirements 

under this subsection for submission of an allocation plan 

through the inclusion of any appropriate information in a single consolidated submission used for purposes of applying for 

other community planning and development and housing assistance programs administered by the Secretary. 

(g) FORMS OF ASSISTANCE.—

(1) IN GENERAL.—Assistance from grant amounts under this 

section may be distributed in the form of capital grants, noninterest bearing or low-interest loans or advances, deferred payment loans, guarantees, and any other forms of assistance approved by the Secretary. 

(2) REPAYMENTS.—If an affordable housing trust fund 

awards assistance from grant amounts under this section in the 

form of a loan or other mechanism by which funds are later repaid to the trust fund, any repayments received by the trust 

fund shall be distributed by the trust fund in accordance with 

the allocation plan under subsection (f) for the trust fund for 

the fiscal year in which such repayments are made. 

(h) COORDINATION WITH OTHER ASSISTANCE.—In distributing assistance from grant amounts under this section, each affordable 

housing trust fund shall, to the maximum extent practicable, coordinate such distribution with the provision of other affordable housing assistance by the trust fund, including—

(1) in the case of any State, housing credit dollar amounts allocated by the State under section 42(h) of the Internal Revenue 

Code of 1986; 

(2) assistance otherwise made available under this title or the 

community development block grant program under title I of 

the Housing and Community Development Act of 1974 (42 

U.S.C. 5301 et seq.); and 

(3) private activity bonds. 

(i) ADMINISTRATION OF PROGRAM BY SUBRECIPIENT.—At the discretion of the affordable housing trust fund, the trust fund may select an eligible subrecipient to carry out all or a portion of the trust 

fund’s responsibilities under this section, in accordance with this 

section. 

(j) LABOR STANDARDS.—Each affordable housing trust fund receiving grant amounts under this section shall ensure that contracts 

for eligible activities assisted with such amounts comply with the 

same requirements under section 286 that are applicable to contracts for construction of affordable housing assisted under such 

Act. 

115

(k) DEFINITIONS.—For purposes of this section, the following definitions shall apply: 

(1) ELIGIBLE ACTIVITIES.—The term ‘‘eligible activities’’ means 

activities relating to the providing qualified affordable housing, 

including— (A) the construction of new housing; 

(B) the acquisition of real property; 

(C) site preparation and improvement, including demolition; 

(D) rehabilitation of existing housing; and 

(E) providing incentives to maintain existing housing as 

qualified affordable housing and to establish or extend any 

low-income affordability restrictions for such housing, including covering capital expenditures and operating costs. 

(2) ELIGIBLE ENTITY.—The term ‘‘eligible entity’’ includes any 

public or private nonprofit or for-profit entity, unit of general 

local government, regional planning entity, and any other entity 

engaged in the development, rehabilitation, or preservation of 

qualified affordable housing, as determined by the Secretary. 

(3) ELIGIBLE SUBRECIPIENT.—The term ‘‘eligible subrecipient’’ means a public agency or a nonprofit organization, including a 

community development corporation, a community development 

financial institution, a State or local housing trust fund, and 

any other intermediary selected by an affordable housing trust 

fund to administer all or a portion of the trust fund’s responsibilities under this section. The term does not include any public agency or nonprofit organization that receives money from 

an affordable housing trust fund solely as a developer or owner 

of housing. 

(4) EXTREMELY LOW-INCOME FAMILIES.—The term ‘‘extremely 

low-income families’’ means families (as such term is defined in 

section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 

1437a(b))) whose incomes do not exceed 30 percent of the median family income for the area, as determined by the Secretary 

with adjustments for smaller and larger families, except that 

the Secretary may establish income ceilings higher or lower 

than 30 percent of the median for the area on the basis of the 

Secretary’s findings that such variations are necessary because 

of unusually high or low family incomes. 

(5) EXTREMELY LOW VACANCY RATE.—The term ‘‘extremely low 

vacancy rate’’ means a housing or rental vacancy rate of 2 percent or less. 

(6) EXTREMELY OLD HOUSING.—The term ‘‘extremely old housing’’ means housing that is 45 years old or older. 

(7) LOW-INCOME FAMILIES.—The term ‘‘low-income families’’

has the meaning given such term in section 3(b) of the United 

States Housing Act of 1937 (42 U.S.C. 1437a(b)). 

(8) POVERTY LINE.—The term ‘‘poverty line’’ has the meaning 

given such term in section 673(2) of the Omnibus Budget Reconciliation Act of 1981, including any revision required by such 

section. 

(9) QUALIFIED AFFORDABLE HOUSING.—The term ‘‘qualified 

affordable housing’’ means a rental dwelling unit that is subject 

to legally binding commitments that ensure that the dwelling 

unit meets all of the following requirements: 

116

(A) RENTS.—The dwelling unit bears a rent not greater 

than the lesser of—

(i) the existing fair market rental established by the 

Secretary under section 8(c) of the United States Housing Act of 1937 (42 U.S.C. 1437f(c)) for a dwelling unit 

of the same size in the same market area; and 

(ii) a rent that does not exceed 30 percent of the adjusted income of a family whose income equals 65 percent of the median income for the area, as determined 

by the Secretary, with adjustment for number of bedrooms in the unit, except that the Secretary may establish income ceilings higher or lower than 65 percent of 

the median for the area on the basis of the findings of 

the Secretary that such variations are necessary because of prevailing levels of construction costs or fair 

market rents, or unusually high or low family incomes. 

(B) TENANT RENT CONTRIBUTION.—The contribution toward rent by the family residing in the dwelling unit will 

not exceed 30 percent of the adjusted income of such family. 

(C) AVAILABILITY OF UNITS FOR VOUCHER HOLDERS.—The 

dwelling unit—

(i) is located in a project within which a percentage 

of units are made available only for occupancy by families assisted under the voucher program under section 

8(o) of the United States Housing Act of 1937 (42 

U.S.C. 1437f(o)) (including project-based assistance 

under section 8(o)(13)) on the same basis as other families eligible for occupancy of the project (except that 

only the voucher holder’s expected share of rent shall be 

considered), which percentage shall not be less than the 

percentage of the total cost of developing, rehabilitating, or preserving the project that is funded with assistance under this section; and 

(ii) is one of the units that is subject to such occupancy requirements. 

(D) NON-DISCRIMINATION AGAINST VOUCHER HOLDERS.—

The dwelling unit is located in a project in which all dwelling units are subject to enforceable restrictions that provide 

that a unit may not be refused for leasing to a holder of 

a voucher of eligibility under section 8 of the United States 

Housing Act of 1937 (42 U.S.C. 1437f) because of the status 

of the prospective tenant as a holder of such voucher. 

(E) DURATION OF USE.—The dwelling unit will continue 

to be subject to the requirements under this paragraph for 

not less than 40 years. 

(10) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Housing and Urban Development. 

(l) AUTHORIZATIONS OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as may be necessary for fiscal year 

2003 and each fiscal year thereafter for grants under this section. 

Amounts made available for the HOME Investment Partnerships 

Act shall not be available for assistance under this subtitle. 

(m) INAPPLICABILITY OF HOME PROVISIONS.—Except as specifically provided in this subtitle, no requirement under, or provision 

117

of, title I or subtitles A through F of this title shall apply to assistance provided under this subtitle.

* * * * * * *

TITLE VIII—HOUSING FOR PERSONS 

WITH SPECIAL NEEDS 

* * * * * * *

Subtitle D—Housing Opportunities for 

Persons With AIDS 

* * * * * * *

øSEC. 863. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated to carry out this sub- title $150,000,000 for fiscal year 1993 and $156,300,000 for fiscal 

year 1994.¿

SEC. 863. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated for grants under sections 

860 and 861 such sums as may be necessary for each of fiscal years 

2003 and 2004.

* * * * * * *

NATIONAL HOUSING ACT 

* * * * * * *

TITLE II—MORTGAGE INSURANCE 

DEFINITIONS

SEC. 201. As used in section 203 of this title—

ø(a)¿ (1) The term ‘‘mortgage’’ means a first mortgage on 

real estate, in fee simple, or on a leasehold ø(1)¿ (A) under a 

lease for not less than ninety-nine years which is renewable or 

ø(2)¿ (B) under a lease having a period of not less than ten 

years to run beyond the maturity date of the mortgage; and 

the term ‘‘first mortgage’’ means such classes of first liens 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. 

ø(b)¿ (2) The term ‘‘mortgagee’’ includes the original lender 

under a mortgage, and his successors and assigns approved by 

the Secretary; and the term ‘‘mortgagor’’ includes the original 

borrower under a mortgage and his successors and assigns. 

ø(c)¿ (3) The term ‘‘maturity date’’ means the date on which 

the mortgage indebtedness would be extinguished if paid in accordance with periodic payments provided for in the mortgage. 

ø(d)¿ (4) The term ‘‘State’’ includes the several States and 

Puerto Rico, the District of Columbia, Guam, the Trust TerriVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00117 Fmt 6659 Sfmt 6601 E:\HR\OC\HR640P2.107 HR640P2
118

tory of the Pacific Islands, American Samoa, and the Virgin Islands. 

ø(e)¿ (5) The term ‘‘family member’’ means, with respect to 

a mortgagor under such section, a child, parent, or grandparent of the mortgagor (or the mortgagor’s spouse). In determining whether any of the relationships referred to in the preceding sentence exist, a legally adopted son or daughter of an 

individual (and a child who is a member of an individual’s 

household, if placed with such individual by an authorized 

placement agency for legal adoption by such individual), and a 

foster child of an individual, shall be treated as a child of such 

individual by blood. 

ø(f)¿ (6) The term ‘‘child’’ means, with respect to a mortgagor 

under such section, a son, stepson, daughter, or stepdaughter 

of such mortgagor.

(7) The term ‘‘public safety officer’’ has the meaning given 

such term in section 1204 of the Omnibus Crime Control and 

Safe Streets Act of 1968 (42 U.S.C. 3796b). 

(8) The term ‘‘teacher’’ means an individual who is employed 

on a part- or full-time basis as a teacher, teacher assistant, or 

administrator in a public or private school that provides elementary or secondary education, as determined under State 

law, except that elementary education shall include pre-Kindergarten education, and except that secondary education shall not 

include any education beyond grade 12. 

(9) The term ‘‘local educational agency’’ has the meaning 

given such term in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801).

* * * * * * *

INSURANCE OF MORTGAGES

SEC. 203. (a)***

(b) To be eligible for insurance under this section a mortgage 

shall—

(1) * * *

(2) Involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve) in an amount—

(A) not to exceed the lesser of—

(i) in the case of a 1-family residence, 95 percent of 

the median 1-family house price in the area, as determined by the Secretary; in the case of a 2-family residence, 107 percent of such median price; in the case 

of a 3-family residence, 130 percent of such median 

price; or in the case of a 4-family residence, 150 percent of such median price; or 

(ii) 87 percent of the dollar amount limitation determined under section 305(a)(2) of the Federal Home 

Loan Mortgage Corporation Act for a residence of the 

applicable size; except that the dollar amount limitation in effect for any area under this subparagraph 

may not be less than the greater of the dollar amount 

limitation in effect under this section for the area on 

the date of the enactment of the Departments of VetVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00118 Fmt 6659 Sfmt 6601 E:\HR\OC\HR640P2.107 HR640P2
119

erans Affairs and Housing and Urban Development, 

and Independent Agencies Appropriations Act for Fiscal Year 1999 or 48 percent of the dollar limitation determined under section 305(a)(2) of the Federal Home 

Loan Mortgage Corporation Act for a residence of the 

applicable size; and 

ø(B) except as otherwise provided in this paragraph (2), 

not to exceed an amount equal to the sum of— ø(i) 97 percent of $25,000 of the appraised value of 

the property, as of the date the mortgage is accepted 

for insurance; 

ø(ii) 95 percent of such value in excess of $25,000 but not in excess of $125,000; and 

ø(iii) 90 percent of such value in excess of $125,000.¿

ø(A) IN GENERAL.—Notwithstanding any other provision 

of this subsection, with respect to a mortgage closed on or 

before December 31, 2002, involving a principal obligation 

not in excess of the sum of—¿ (B) not to exceed an amount 

equal to the sum of— (i) the amount of the mortgage insurance premium 

paid at the time the mortgage is insured; and 

(ii)(I)***

* * * * * * *

(IV) notwithstanding subclauses (II) and (III), in the 

case of a mortgage for a property with an appraised 

value in excess of $50,000 that is located in øan area 

of the¿ a State for which the average closing cost exceeds 2.10 percent of the average, for the State, of the 

sale price of properties located in the State for which 

mortgages have been executed, 97.75 percent of the 

appraised value of the property. 

For purposes of the preceding sentence, the term ‘‘area’’ means 

a metropolitan statistical area as established by the Office of 

Management and Budget; and the median 1-family house price 

for an area shall be equal to the median 1-family house price 

of the county within the area that has the highest such median 

price. øIf the mortgage to be insured under this section covers 

property on which there is located a one- to four-family residence, and the appraised value of the property, as of the date 

the mortgage is accepted for insurance, does not exceed 

$50,000, the principal obligation may be in an amount not to 

exceed 97 percent of such appraised value. If the mortgagor is 

a veteran and the mortgage to be insured under this section 

covers property upon which there is located a dwelling designed principally for a one-family residence, the principal obligation may be in an amount equal to the sum of (i) 100 per 

centum of $25,000 of the appraised value of the property as of 

the date the mortgage is accepted for insurance, and (ii) 95 per 

centum of such value in excess of $25,000.¿ For purposes of 

this paragraph (2), the term ‘‘average closing cost’’ means, with 

respect to a State, the average, for mortgages executed for 

properties that are located within the State, of the total 

amounts (as determined by the Secretary) of initial service 

charges, appraisal, inspection, and other fees (as the Secretary 

120

shall approve) that are paid in connection with such mortgages. Notwithstanding any other provision of this section, in 

any case where the dwelling is not approved for mortgage insurance prior to the beginning of construction, such mortgage 

shall not exceed 90 per centum of the entire appraised value 

of the property as of the date the mortgage is accepted for insurance, unless (i) the dwelling was completed more than one 

year prior to the application for mortgage insurance, or (ii) the 

dwelling was approved for guaranty, insurance, or a direct loan 

under chapter 37 of title 38, United States Code, prior to the 

beginning of construction, or (iii) the dwelling is covered by a 

consumer protection or warranty plan acceptable to the Secretary and satisfies all requirements which would have been 

applicable if such dwelling had been approved for mortgage insurance prior to the beginning of construction. øAs used herein, the term ‘‘veteran’’ means any person who served on active 

duty in the armed forces of the United States for a period of 

not less than 90 days (or as certified by the Secretary of Defense as having performed extra-hazardous service), and who 

was discharged or released therefrom under conditions other 

than dishonorable, except that persons enlisting in the armed 

forces after September 7, 1980, or entering active duty after 

October 16, 1981, shall have their eligibility determined in accordance with section 3103A(d) of title 38, United States 

Code.¿

Notwithstanding any other provision of this paragraph, the 

amount which may be insured under this section may be increased by up to 20 percent if such increase is necessary to account for the increased cost of the residence due to the installation of a solar energy system (as defined in subparagraph (3) 

of the last paragraph of section 2(a) of this Act) therein. 

øExcept with respect to mortgages executed by mortgagors 

who are veterans, a mortgage may not involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve) in excess 

of 98.75 percent of the appraised value of the property (97.75 

percent, in the case of a mortgage with an appraised value in 

excess of $50,000), plus the amount of the mortgage insurance 

premium paid at the time the mortgage is insured. For purposes of the preceding sentence, the term ‘‘appraised value’’

means the amount set forth in the written statement required 

under section 226, or a similar amount determined by the Secretary if section 226 does not apply. Notwithstanding the authority of the Secretary to establish the terms of insurance 

under this section and approve the initial service charges, appraisal, inspection, and other fees (and subject to any other 

limitations under this section on the amount of a principal obligation), the Secretary may not (by regulation or otherwise) 

limit the percentage or amount of any such approved charges 

and fees that may be included in the principal obligation of a 

mortgage. 

øNotwithstanding any other provision of this paragraph, the 

Secretary may not insure, or enter into a commitment to insure, a mortgage under this section that is executed by a firsttime homebuyer and that involves a principal obligation (inVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00120 Fmt 6659 Sfmt 6601 E:\HR\OC\HR640P2.107 HR640P2
121

cluding such initial service charges, appraisal, inspection, and 

other fees as the Secretary shall approve) in excess of 97 percent of the appraised value of the property unless the mortgagor has completed a program of counseling with respect to 

the responsibilities and financial management involved in 

homeownership that is approved by the Secretary; except that 

the Secretary may, in the discretion of the Secretary, waive the 

applicability of this requirement. 

øIn conjunction with any loan insured under this section, an 

original lender shall provide to each prospective borrower a 

disclosure notice that provides a one page analysis of mortgage 

products offered by that lender and for which the borrower 

would qualify. This notice shall include: (i) a generic analysis 

comparing the note rate (and associated interest payments), insurance premiums, and other costs and fees that would be due 

over the life of the loan for a loan insured by the Secretary 

under this subsection with the note rates, insurance premiums 

(if applicable), and other costs and fees that would be expected 

to be due if the mortgagor obtained instead other mortgage 

products offered by the lender and for which the borrower 

would qualify with a similar loan-to-value ratio in connection 

with a conventional mortgage (as that term is used in section 

305(a)(2) of the Federal Home Loan Mortgage Corporation Act 

(12 U.S.C. 1454(a)(2)) or section 302(b)(2) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)), 

as applicable), assuming prevailing interest rates; and (ii) a 

statement regarding when the mortgagor’s requirement to pay 

the mortgage insurance premiums for a mortgage insured 

under this section would terminate or a statement that the requirement will terminate only if the mortgage is refinanced, 

paid off, or otherwise terminated.¿

* * * * * * *

ø(10) CALCULATION OF DOWNPAYMENT.— ø(A) IN GENERAL.—Notwithstanding any other provision 

of this subsection, with respect to a mortgage closed on or 

before December 31, 2002, involving a principal obligation 

not in excess of the sum of— ø(i) the amount of the mortgage insurance premium 

paid at the time the mortgage is insured; and 

ø(ii)(I) in the case of a mortgage for a property with an appraised value equal to or less than $50,000, 

98.75 percent of the appraised value of the property; 

ø(II) in the case of a mortgage for a property with an appraised value in excess of $50,000 but not in excess of $125,000, 97.65 percent of the appraised value 

of the property; 

ø(III) in the case of a mortgage for a property with an appraised value in excess of $125,000, 97.15 percent of the appraised value of the property; or 

ø(IV) notwithstanding subclauses (II) and (III), in 

the case of a mortgage for a property with an appraised value in excess of $50,000 that is located in an 

area of the State for which the average closing cost exceeds 2.10 percent of the average, for the State, of the 

sale price of properties located in the State for which 

122

mortgages have been executed, 97.75 percent of the 

appraised value of the property. 

ø(B) AVERAGE CLOSING COST.—For purposes of this paragraph, the term ‘‘average closing cost’’ means, with respect 

to a State, the average, for mortgages executed for properties that are located within the State, of the total 

amounts (as determined by the Secretary) of initial service 

charges, appraisal, inspection, and other fees (as the Secretary shall approve) that are paid in connection with such 

mortgages.¿

(10) REDUCED DOWNPAYMENT REQUIREMENTS FOR TEACHERS

AND PUBLIC SAFETY OFFICERS.— (A) IN GENERAL.—Notwithstanding paragraph (2), in the 

case of a mortgage described in subparagraph (B)— (i) the mortgage shall involve a principal obligation 

in an amount that does not exceed the sum of 99 percent of the appraised value of the property and the 

total amount of initial service charges, appraisal, inspection, and other fees (as the Secretary shall approve) 

paid in connection with the mortgage; 

(ii) no other provision of this subsection limiting the 

principal obligation of the mortgage based upon a percentage of the appraised value of the property subject 

to the mortgage shall apply; and 

(iii) the matter in paragraph (9) that precedes the 

first proviso shall not apply and the mortgage shall be 

executed by a mortgagor who shall have paid on account of the property at least 1 percent of the cost of acquisition (as determined by the Secretary) in cash or its 

equivalent. 

(B) MORTGAGES COVERED.—A mortgage described in this 

subparagraph is a mortgage— (i) under which the mortgagor is an individual 

who—

(I) is (aa) a teacher, or (bb) a public safety officer; and 

(II) has not, during the 12-month period ending 

upon the insurance of the mortgage, had any 

present ownership interest in a principal residence 

located in the jurisdiction described in clause (ii); 

and 

(ii) made for a property that is located within the jurisdiction of—

(I) in the case of a mortgage of a mortgagor described in clause (i)(I)(aa), the local educational 

agency for the school in which the mortgagor is 

employed (or, in the case of a mortgagor employed 

in a private school, the local educational agency 

having jurisdiction for the area in which the private school is located); or 

(II) in the case of a mortgage of a mortgagor described in clause (i)(I)(bb), the jurisdiction served 

by the public law enforcement agency, firefighting 

agency, or rescue or ambulance agency that employs the mortgagor. 

123

(C) PROGRAM INTEGRITY.—Notwithstanding any other 

provision of this paragraph and section 203(c)(3), the Secretary may suspend the applicability of this paragraph and 

such section for such period as the Secretary considers appropriate if the Secretary determines such suspension is 

necessary because of fraud or other issues regarding program integrity.

(c)(1)***

(2) øNotwithstanding¿ Except as provided in paragraph (3) and 

notwithstanding any other provision of this section, each mortgage 

secured by a 1- to 4-family dwelling that is an obligation of the Mutual Mortgage Insurance Fund or of the General Insurance Fund 

pursuant to subsection (v) and each mortgage that is insured under 

subsection (k) or section 234(c),, shall be subject to the following requirements: 

(A) * * *

* * * * * * *

(3) DEFERRAL AND REDUCTION OF UP-FRONT PREMIUM.—In the 

case of any mortgage described in subsection (b)(10)(B): 

(A) Paragraph (2)(A) of this subsection (relating to collection 

of up-front premium payments) shall not apply. 

(B) If, at any time during the 5-year period beginning on the 

date of the insurance of the mortgage, the mortgagor ceases to 

be a teacher or public safety officer (as such terms are defined 

in section 201) or pays the principal obligation of the mortgage 

in full, the Secretary shall at such time collect a single premium payment in an amount equal to the amount of the single 

premium payment that, but for this paragraph, would have 

been required under paragraph (2)(A) of this subsection with respect to the mortgage, as reduced by 20 percent of such amount 

for each successive 12-month period completed during such 5-

year period before such cessation or prepayment occurs.

* * * * * * *

(f) DISCLOSURE OF OTHER MORTGAGE PRODUCTS.—In conjunction 

with any loan insured under this section, an original lender shall 

provide to each prospective borrower a disclosure notice that provides a one page analysis of mortgage products offered by that 

lender and for which the borrower would qualify. This notice shall 

include: (i) a generic analysis comparing the note rate (and associated interest payments), insurance premiums, and other costs and 

fees that would be due over the life of the loan for a loan insured 

by the Secretary under this subsection with the note rates, insurance premiums (if applicable), and other costs and fees that would 

be expected to be due if the mortgagor obtained instead other mortgage products offered by the lender and for which the borrower 

would qualify with a similar loan-to-value ratio in connection with 

a conventional mortgage (as that term is used in section 305(a)(2) 

of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 

1454(a)(2)) or section 302(b)(2) of the Federal National Mortgage 

Association Charter Act (12 U.S.C. 1717(b)(2)), as applicable), assuming prevailing interest rates; and (ii) a statement regarding 

when the mortgagor’s requirement to pay the mortgage insurance 

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124

nate or a statement that the requirement will terminate only if the 

mortgage is refinanced, paid off, or otherwise terminated. 

(g)(1)***

(2) The occupancy requirement established in paragraph (1) shall 

not apply to any mortgagor (or co-mortgagor, as appropriate) that 

is— (A) * * *

* * * * * * *

(D) a serviceperson who is unable to meet such requirement 

because of his or her duty assignment, as provided in section 

216 or subsection (b)(4) or (f) of section 222; or

ø(E) a mortgagor or co-mortgagor under subsection (k); or¿

ø(F)¿ (E) a mortgagor that, pursuant to section 223(a)(7), is 

refinancing an existing mortgage insured under this Act for not 

more than the outstanding balance of the existing mortgage, if 

the amount of the monthly payment due under the refinancing 

mortgage is less than the amount due under the existing mortgage for the month in which the refinancing mortgage is executed. 

* * * * * * *

(k)(1)***

* * * * * * *

(3) To be eligible for insurance under this subsection, a rehabilitation loan shall—

(A) * * *

* * * * * * *

(C) involve a loan agreement containing such terms and conditions as the Secretary shall provide, including terms and conditions that provide that the mortgagee shall be responsible 

for—

(i) choosing an inspector or consultant who shall—

(I) meet the standards as the Secretary shall establish; and 

(II) be an agent of the mortgagee; and 

(ii) approving advances under the loan;

ø(C)¿ (D) be an acceptable risk, as determined by the Secretary; and 

ø(D)¿ (E) comply with such other terms, conditions, and restrictions as the Secretary may prescribe. 

* * * * * * *

PAYMENT OF INSURANCE

SEC. 204. (a)***

* * * * * * *

(g)(1) Notwithstanding any other provision of law relating to the 

acquisition, handling, or disposal of real property by the United 

States, the Secretary shall have power to deal with, complete, rent, 

renovate, modernize, insure, or sell for cash or credit, in his discretion, any properties conveyed to him in exchange for debentures 

and certificates of claim as provided in this section; and notwithstanding any other provision of law, the Secretary shall also have 

125

power to pursue to final collection, by way of compromise or otherwise, all claims against mortgagors assigned by mortgagees to the 

Secretary as provided in this section: Provided, That section 3709 

of the Revised Statutes shall not be construed to apply to any contract for hazard insurance, or to any purchase or contract for services or supplies on account of such property if the amount thereof 

does not exceed $1,000. The Secretary shall, by regulation, carry 

out a program of sales of such properties and shall develop and implement appropriate credit terms and standards to be used in carrying out the program. The power to convey and to execute in the 

name of the Secretary deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real or personal property or any interest 

therein heretofore or hereafter acquired by the Secretary pursuant 

to the provisions of this Act, may be exercised by an officer appointed by him, without the execution of any express delegation of 

power or power of attorney: Provided, That nothing in this subsection shall be construed to prevent the Secretary from delegating 

such power by order or by power of attorney, in his discretion, to 

any officer, agent, or employee he may appoint: And provided further, That a conveyance or transfer of title to real or personal property or an interest therein to the Secretary of Housing and Urban 

Development, his successors and assigns, without identifying the 

Secretary therein, shall be deemed a proper conveyance or transfer 

to the same extent and of like effect as if the Secretary were personally named in such conveyance or transfer. The Secretary may 

sell real and personal property acquired by the Secretary pursuant 

to the provisions of this Act on such terms and conditions as the 

Secretary may prescribe.

(2) The Secretary shall require, as a condition of eligibility of any 

nonprofit organization for participation in any program of the Secretary for disposition of 1- to 4-family properties acquired by the 

Secretary pursuant to this Act, the Secretary shall require that such 

organization— (A) has nonprofit status as demonstrated by approval under 

section 501(c)(3) of the Internal Revenue Code of 1986 (26 

U.S.C. 501(c)(3)) or demonstrates that an application for such 

status is currently pending approval; and 

(B) provide the Secretary with a copy of the application for 

such status; 

(C) certify, on an annual basis, that the organization has 

been apprised of the applicable rules and guidelines of the Department of Housing and Urban Development and understands 

such rules and guidelines; and 

(D) comply with such other requirements as the Secretary 

may establish.

(h) DISPOSITION OF ASSETS IN REVITALIZATION AREAS.—

(1) * * *

* * * * * * *

(4) PREFERENCE FOR SALE TO PREFERRED PURCHASERS.—The 

Secretary shall provide a preference, among prospective purchasers of eligible assets, for sale of such assets to any purchaser who—

(A) * * *

126

(B) in making a purchase under the program under this 

subsection—

(i) * * *

(ii) purchases all interests of the Secretary in all assets of the Secretary that, at any time during the period which shall be set forth in the sale agreement required under paragraph ø(7)¿ (8)—

(I) are or become eligible assets; and 

(II) are located in the asset control area of the 

purchaser; and 

* * * * * * *

(5) AGREEMENTS REQUIRED FOR PURCHASE.—

(A) * * *

(B) NON-PREFERRED PURCHASERS.—Under the program 

under this subsection, the Secretary may sell an eligible 

asset to a purchaser who is not a preferred purchaser only 

pursuant to a binding agreement by the purchaser that 

complies with the following requirements: 

(i) The purchaser has agreed to meet specific performance goals established by the Secretary for home 

ownership of the asset properties for the eligible assets purchased by the purchaser, except that the Secretary may, by including a provision in the sale agreement required under paragraph ø(7)¿ (8), provide for 

a lower rate of home ownership in sales involving exceptional circumstances. 

* * * * * * *

(6) DISCOUNT FOR PREFERRED PURCHASERS.—

(A) IN GENERAL.—For the purpose of providing a public 

purpose discount for the bulk sales of eligible assets made 

under the program under this subsection by preferred purchasers, each eligible asset sold through the program 

under this subsection to a preferred purchaser shall be 

sold at a price that is discounted from the value of the 

asset, as based on the appraised value of the asset property (as such term is defined in paragraph ø(8)¿ (9)). 

* * * * * * *

(7) 50 PERCENT DISCOUNT FOR TEACHERS AND PUBLIC SAFETY

OFFICERS PURCHASING PROPERTIES THAT ARE ELIGIBLE ASSETS.—

(A) DISCOUNT.—A property that is an eligible asset and 

is sold, during fiscal years 2002 through 2006, to a teacher 

or public safety officer for use in accordance with subparagraph (B) shall be sold at a price that is equal to 50 percent 

of the appraised value of the eligible property (as determined in accordance with paragraph (6)(B)). In the case of 

a property eligible for both a discount under this paragraph and a discount under paragraph (6), the discount 

under paragraph (6) shall not apply. 

(B) PRIMARY RESIDENCE.—An eligible property sold pursuant to a discount under this paragraph shall be used, for 

not less than the 3-year period beginning upon such sale, 

127

as the primary residence of a teacher or public safety officer. 

(C) SALE METHODS.—The Secretary may sell an eligible 

property pursuant to a discount under this paragraph— (i) to a unit of general local government or nonprofit 

organization (pursuant to paragraph (4) or otherwise), 

for resale or transfer to a teacher or public safety officer; or 

(ii) directly to a purchaser who is a teacher or public 

safety officer. 

(D) RESALE.—In the case of any purchase by a unit of 

general local government or nonprofit organization of an eligible property sold at a discounted price under this paragraph, the sale agreement under paragraph (8) shall— (i) require the purchasing unit of general local government or nonprofit organization to provide the full 

benefit of the discount to the teacher or public safety officer obtaining the property; and 

(ii) in the case of a purchase involving multiple eligible assets, any of which is such an eligible property, 

designate the specific eligible property or properties to 

be subject to the requirements of subparagraph (B). 

(E) MORTGAGE DOWNPAYMENT ASSISTANCE.—If a teacher 

or public safety officer purchases an eligible property pursuant to a discounted sale price under this paragraph and 

finances such purchase through a mortgage insured under 

this title, notwithstanding any provision of section 203 the 

downpayment on such mortgage shall be $100. 

(F) PREVENTION OF UNDUE PROFIT.—The Secretary shall 

issue regulations to prevent undue profit from the resale of 

eligible properties in violation of the requirement under 

subparagraph (B). 

(G) DEFINITIONS.—For the purposes of this paragraph, 

the following definitions shall apply: 

(i) The term ‘‘eligible property’’ means an eligible 

asset described in paragraph (2)(A) of this subsection. 

(ii) The terms ‘‘teacher’’ and ‘‘public safety officer’’

have the meanings given such terms in section 201. 

(H) PROGRAM INTEGRITY.—Notwithstanding any other 

provision of this paragraph, the Secretary may suspend the 

applicability of this paragraph for such period as the Secretary considers appropriate if the Secretary determines 

such suspension is necessary because of fraud or other 

issues regarding program integrity.

ø(7)¿ (8) SALE AGREEMENT.—The Secretary may sell an eligible asset under this subsection only pursuant to a sale agreement entered into under this paragraph with the purchaser, 

which shall include the following provisions: 

(A) * * *

* * * * * * *

ø(8)¿ (9) DEFINITIONS.—For purposes of this subsection, the 

following definitions shall apply: 

(A) * * *

* * * * * * *

128

(D) NONPROFIT ORGANIZATION.—The term ‘‘nonprofit organization’’ means a private organization that— (i) is organized under State or local laws; 

ø(ii) has no part of its net earnings inuring to the 

benefit of any member, shareholder, founder, contributor, or individual; and¿

(ii)(I) has nonprofit status as demonstrated by approval under section 501(c)(3) of the Internal Revenue 

Code of 1986 (26 U.S.C. 501(c)(3)) or demonstrates that 

an application for such status is currently pending approval; and 

(II) provides the Secretary with a copy of the application for such status;

(iii) complies with standards of financial responsibility that the Secretary may requireø.¿; and

(iv) certifies, on an annual basis, that the organization has been apprised of the applicable rules and 

guidelines of the Department of Housing and Urban 

Development and understands such rules and guidelines.

* * * * * * *

ø(9)¿ (10) SECRETARY’S DISCRETION.—The Secretary shall 

have the authority to implement and administer the program 

under this subsection in such manner as the Secretary may determine. The Secretary may, in the sole discretion of the Secretary, enter into contracts to provide for the proper administration of the program with such public or nonprofit entities as 

the Secretary determines are qualified. 

ø(10)¿ (11) REGULATIONS.—The Secretary shall issue regulations to implement the program under this subsection through 

rulemaking in accordance with the procedures established 

under section 553 of title 5, United States Code, regarding substantive rules. Such regulations shall take effect not later than 

the expiration of the 2-year period beginning on the date of the 

enactment of the Departments of Veterans Affairs and Housing 

and Urban Development, and Independent Agencies Appropriations Act, 1999. 

* * * * * * *

RENTAL HOUSING INSURANCE

SEC. 207. (a)***

* * * * * * *

(c) To be eligible for insurance under this section a mortgage on 

any property or project shall involve a principal obligation in an 

amount—

(2) * * *

(3) not to exceed, for such part of the property or projects as 

may be attributable to dwelling use (excluding exterior and 

land improvements as defined by the Secretary), $38,025 per 

family unit without bedroom, $42,120 per family unit with one 

bedroom, $50,310 per family unit with two bedrooms, $62,010 

per family unit with three bedrooms, and $70,200 per family 

unit with four or more bedrooms, or not to exceed ø$11,250¿

129

$17,460 per space; except that as to projects to consist of elevator-type structures the Secretary may, in his discretion, increase the dollar amount limitations per family unit to not to 

exceed $43,875 per family unit without a bedroom, $49,140 per 

family unit with one bedroom, $60,255 per family unit with 

two bedrooms, $75,465 per family unit with three bedrooms, 

and $85,328 per family unit with four or more bedrooms, as 

the case may be, to compensate for the higher costs incident 

to the construction of elevator type structures of sound standards of construction and design; except that the Secretary shall 

adjust each such dollar amount limitation set forth in this 

paragraph (as such limitation may have been previously adjusted pursuant to this provision) effective January 1 of each 

year (beginning in 2003) in accordance with the percentage increase, if any, during the 12-month period ending with the preceding October, in the Annual Construction Cost Index of the 

Bureau of the Census of the Department of Commerce; and except that the Secretary may, by regulation, increase any of the 

foregoing dollar amount limitations contained in this paragraph (as such limitations may have been previously adjusted 

pursuant to this paragraph) by not to exceed ø110¿ 140 percent 

in any geographical area where the Secretary finds that cost 

levels so require and not to exceed ø140¿ 170 percent where 

the Secretary determines it necessary on a project-by-project 

basis, but in no case may any such increase exceed 90 percent 

where the Secretary determines that a mortgage purchased or 

to be purchased by the Government National Mortgage Association in implementing its special assistance functions under 

section 305 of this Act (as such section existed immediately before November 30, 1983) is involved. 

* * * * * * *

COOPERATIVE HOUSING INSURANCE

SEC. 213. (a)***

(b) To be eligible for insurance under this section a mortgage on 

any property or project of a corporation or trust of the character 

described in paragraph numbered (1) of subsection (a) of this section shall involve a principal obligation in an amount— (2) not to exceed, for such part of the property or project as 

may be attributable to dwelling use (excluding exterior land 

improvements as defined by the Secretary), ø$38,025¿ $41,207

per family unit without a bedroom, ø$42,120¿ $47,511 per family unit with one bedroom, ø$50,310¿ $57,300 per family unit 

with two bedrooms, ø$62,010¿ $73,343 per family unit with 

three bedrooms, and ø$70,200¿ $81,708 per family unit with 

four or more bedrooms, and not to exceed 98 per centum of the 

amount which the Secretary estimates will be the replacement 

cost of the property or project when the proposed physical improvements are completed: Provided, That as to projects to consist of elevator-type structures the Secretary may, in his discretion, increase the dollar amount limitations per family unit 

to not to exceed $43,875 per family unit without a bedroom, 

ø$49,140¿ $49,710 per family unit with one bedroom, 

ø$60,255¿ $60,446 per family unit with two bedrooms, 

130

ø$75,465¿ $78,197 per family unit with three bedrooms, and 

ø$85,328¿ $85,836 per family unit with four or more bedrooms, 

as the case may be, to compensate for the higher cost incident 

to the construction of elevator-type structures of sound standards of construction and design: Provided further, That the Secretary shall adjust each such dollar amount limitation set forth 

in this paragraph (as such limitation may have been previously 

adjusted pursuant to this provision) effective January 1 of each 

year (beginning in 2003) in accordance with the percentage increase, if any, during the 12-month period ending with the preceding October, in the Annual Construction Cost Index of the 

Bureau of the Census of the Department of Commerce: Provided 

further, That the Secretary may, by regulation, increase any of 

the foregoing dollar amount limitations contained in this paragraph (as such limitations may have been previously adjusted 

pursuant to this paragraph) by not to exceed ø110¿ 140 percent 

in any geographical area where the Secretary finds that cost 

levels so require and not to exceed ø140¿ 170 percent where 

the Secretary determines it necessary on a project-by-project 

basis, but in no case may any such increase exceed 90 percent 

where the Secretary determines that a mortgage purchased or 

to be purchased by the Government National Mortgage Association in implementing its special assistance functions under 

section 305 of this Act (as such section existed immediately before November 30, 1983) is involved: Provided further, That in 

the case of a mortgagor of the character described in paragraph (3) of subsection (a) the mortgage shall involve a principal obligation in an amount not to exceed 90 per centum of 

the amount which the Secretary estimates will be the replacement cost of the property or project when the proposed physical improvements are completed: And provided further, That 

upon the sale of a property or project by a mortgagor of the 

character described in paragraph (3) of subsection (a) to a nonprofit cooperative ownership housing corporation or trust within two years after the completion of such property or project 

the mortgage given to finance such sale shall involve a principal obligation in an amount not to exceed the maximum 

amount computed in accordance with this subsection without 

regard to the preceding proviso. 

* * * * * * *

REHABILITATION AND NEIGHBORHOOD CONSERVATION HOUSING

INSURANCE

SEC. 220. (a)***

* * * * * * *

(d) To be eligible for insurance under this section a mortgage 

shall meet the following conditions: 

(1) * * *

* * * * * * *

(3) The mortgage shall—

(A) * * *

(B)(ii)***

131

(iii) not to exceed, for such part of the property or project 

as may be attributable to dwelling use (excluding exterior 

land improvements as defined by the Secretary), $38,025 

per family unit without a bedroom, $42,120 per family unit 

with one bedroom, $50,310 per family unit with two bedrooms, $62,010 per family unit with three bedrooms, and 

$70,200 per family unit with four or more bedrooms, except that as to projects to consist of elevator-type structures the Secretary may, in his discretion, increase the dollar amount limitations per family unit not to exceed 

$43,875 per family unit without a bedroom, $49,140 per 

family unit with one bedroom, $60,255 per family unit 

with two bedrooms, $75,465 per family unit with three 

bedrooms, and $85,328 per family unit with four or more 

bedrooms, as the case may be, to compensate for the higher costs incident to the construction of elevator-type structures of sound standards of construction and design; and 

except that with respect to rehabilitation projects involving 

not more than five family units, the Secretary may by regulation increase by 25 per centum any of the foregoing dollar amount limitations contained in this clause (as such 

limitations may have been previously adjusted pursuant to 

this clause) which are applicable to units with two, three, 

or four or more bedrooms: Provided, That the Secretary 

shall adjust each such dollar amount limitation set forth in 

this clause (as such limitation may have been previously 

adjusted pursuant to this provision) effective January 1 of 

each year (beginning in 2003) in accordance with the percentage increase, if any, during the 12-month period ending 

with the preceding October, in the Annual Construction 

Cost Index of the Bureau of the Census of the Department 

of Commerce: Provided further, That the Secretary may, by 

regulation, increase any of the foregoing dollar amount 

limitations contained in this clause ø(as determined after 

the application of the preceding proviso)¿ (as such limitations may have been previously adjusted pursuant to the 

preceding proviso and as determined after application of 

any percentage increase authorized in this clause relating 

to units with two, three, or four or more bedrooms) by not 

to exceed ø110¿ 140 percent in any geographical area 

where the Secretary finds that cost levels so require and 

by not to exceed ø140¿ 170 percent where the Secretary 

determines it necessary on a project-by-project basis, but 

in no case may any such increase exceed 90 percent where 

the Secretary determines that a mortgage purchased or to 

be purchased by the Government National Mortgage Association in implementing its special assistance functions 

under section 305 of this Act (as such section existed immediately before November 30, 1983) is involved): Provided further, That nothing contained in this subparagraph shall preclude the insurance of mortgages covering 

existing multifamily dwellings to be rehabilitated or reconstructed for the purposes set forth in subsection (a) of this 

section: And provided further, That the Secretary may further increase any of the dollar amount limitations which 

132

would otherwise apply for the purpose of this clause by not 

to exceed 20 per centum if such increase is necessary to account for the increased cost of the project due to the installation therein of a solar energy system (as defined in subparagraph (3) of the last paragraph of section 2(a) of this 

Act) or residential energy conservation measures (as defined in section 210(11)(A) through (G) and (I) of Public 

Law 95–619) in cases where the Secretary determines that 

such measures are in addition to those required under the 

minimum property standards and will be cost-effective 

over the life of the measure; and 

* * * * * * *

HOUSING FOR MODERATE INCOME AND DISPLACED FAMILIES

SEC. 221. (a)***

* * * * * * *

(d) To be eligible for insurance under this section, a mortgage 

shall—

(1) * * *

* * * * * * *

(3) if executed by a mortgagor which is a public body or 

agency (and, except with respect to a project assisted or to be 

assisted pursuant to section 8 of the United States Housing 

Act of 1937, which certifies that it is not receiving financial assistance from the United States exclusively pursuant to such 

Act), a cooperative (including an investor-sponsor who meets 

such requirements as the Secretary may impose to assure that 

the consumer interest is protected), or a limited dividend corporation (as defined by the Secretary), or a private nonprofit 

corporation or association, or other mortgagor approved by the 

Secretary, and regulated or supervised under Federal or State 

laws or by political subdivisions of States, or agencies thereof, 

or by the Secretary under a regulatory agreement or otherwise, 

as to rents, charges, and methods of operation, in such form 

and in such manner as in the opinion of the Secretary will effectuate the purposes of this section—

(ii) not exceed, for such part of the property or project 

as may be attributable to dwelling use (excluding exterior 

land improvements as defined by the Secretary), $42,048 

per family unit without a bedroom, $48,481 per family unit 

with one bedroom, $58,469 per family unit with two bedrooms, $74,840 per family unit with three bedrooms, and 

$83,375 per family unit with four or more bedrooms; except that as to projects to consist of elevator-type structures the Secretary may, in his discretion, increase the dollar amount limitations per family unit to not to exceed 

$44,250 per family unit without a bedroom, $50,724 per 

family unit with one bedroom, $61,680 per family unit 

with two bedrooms, $79,793 per family unit with three 

bedrooms, and $87,588 per family unit with four or more 

bedrooms, as the case may be, to compensate for the higher costs incident to the construction of elevator-type structures of sound standards of construction and design; except 

133

that the Secretary shall adjust each such dollar amount 

limitation set forth in this clause (as such limitation may 

have been previously adjusted pursuant to this provision) 

effective January 1 of each year (beginning in 2003) in accordance with the percentage increase, if any, during the 

12-month period ending with the preceding October, in the 

Annual Construction Cost Index of the Bureau of the Census of the Department of Commerce; and except that the 

Secretary may, by regulation, increase any of the foregoing 

dollar amount limitations contained in this clause (as such 

limitations may have been previously adjusted pursuant to 

this clause) and by not to exceed ø110¿ 140 percent in any 

geographical area where the Secretary finds that cost levels so require and by not to exceed ø140¿ 170 percent 

where the Secretary determines it necessary on a projectby-project basis, but in no case may any such increase exceed 90 percent where the Secretary determines that a 

mortgage purchased or to be purchased by the Government 

National Mortgage Association in implementing its special 

assistance functions under section 305 of this Act (as such 

section existed immediately before November 30, 1983) is 

involved; and 

* * * * * * *

(4) if executed by a mortgagor and which is approved by the 

Secretary— (ii) not exceed, or such part of the property or project as 

may be attributable to dwelling use (excluding exterior 

land improvements as defined by the Secretary), $37,843 

per family unit without a bedroom, $42,954 per family unit 

with one bedroom, $51,920 per family unit with two bedrooms, $65,169 per family unit with three bedrooms, and 

$73,846 per family unit with four or more bedrooms; except that as to projects to consist of elevator-type structures the Secretary may, in his discretion, increase the dollar amount limitations per family unit to not to exceed 

$40,876 per family unit without a bedroom, $46,859 per 

family unit with one bedroom, $56,979 per family unit 

with two bedrooms, $73,710 per family unit with three 

bedrooms, and $80,913 per family unit with four or more 

bedrooms, as the case may be, to compensate for the higher costs incident to the construction of elevator-type structures of sound standards of construction and design; except 

that the Secretary shall adjust each such dollar amount 

limitation set forth in this clause (as such limitation may 

have been previously adjusted pursuant to this provision) 

effective January 1 of each year (beginning in 2003) in accordance with the percentage increase, if any, during the 

12-month period ending with the preceding October, in the 

Annual Construction Cost Index of the Bureau of the Census of the Department of Commerce; and except that the 

Secretary may, by regulation, increase any of the foregoing 

dollar amount limitations contained in this clause (as such 

limitations may have been previously adjusted pursuant to 

this clause) by not to exceed ø110¿ 140 percent in any geographical area where the Secretary finds that cost levels 

134

so require and by not to exceed ø140¿ 170 percent where 

the Secretary determines it necessary on a project-byproject basis, but in no case may any such increase exceed 

90 percent where the Secretary determines that a mortgage purchased or to be purchased by the Government National Mortgage Association in implementing its special assistance functions under section 305 of this Act (as such 

section existed immediately before November 30, 1983) is 

involved; 

* * * * * * *

HOUSING FOR ELDERLY PERSONS

SEC. 231. (a)***

* * * * * * *

(c) To be eligible for insurance under this section, a mortgage to 

provide housing for elderly persons shall— (2) not to exceed, for such part of the property or project as 

may be attributable to dwelling use (excluding exterior land 

improvement as defined by the Secretary), $35,978 per family 

unit without a bedroom, $40,220 per family unit with one bedroom, $48,029 per family unit with two bedrooms, $57,798 per 

family unit with three bedrooms, and $67,950 per family unit 

with four or more bedrooms; except that as to projects to consist of elevator-type structures the Secretary may, in his discretion, increase the dollar amount limitations per family unit 

to not to exceed $40,876 per family unit without a bedroom, 

$46,859 per family unit with one bedroom, $56,979 per family 

unit with two bedrooms, $73,710 per family unit with three 

bedrooms, and $80,913 per family unit with four or more bedrooms, as the case may be, to compensate for the higher costs 

incident to the construction of elevator-type structures of sound 

standards of construction and design; except that the Secretary 

shall adjust each such dollar amount limitation set forth in this 

paragraph (as such limitation may have been previously adjusted pursuant to this provision) effective January 1 of each 

year (beginning in 2003) in accordance with the percentage increase, if any, during the 12-month period ending with the preceding October, in the Annual Construction Cost Index of the 

Bureau of the Census of the Department of Commerce; and except that the Secretary may, by regulation, increase any of the 

foregoing dollar amount limitations contained in this paragraph (as such limitations may have been previously adjusted 

pursuant to this paragraph) by not to exceed ø110¿ 140 percent 

in any geographical area where the Secretary finds that cost 

levels so require and by not to exceed ø140¿ 170 percent where 

the Secretary determines it necessary on a project-by-project 

basis, but in no case may any such increase exceed 90 percent 

where the Secretary determines that a mortgage purchased or 

to be purchased by the Government National Mortgage Association in implementing its special assistance functions under 

section 305 of this Act (as such section existed immediately before November 30, 1983) is involved: Provided, That the Secretary may further increase the dollar amount limitations 

which would otherwise apply for the purpose of this section by 

135

not to exceed 20 per centum if such increase is necessary to account for the increased cost of the project due to the installation therein of a solar energy system (as defined in subparagraph (3) of the last paragraph of section 2(a) of this Act) or 

residential energy conservation measures (as defined in section 

210(11) (A) through (G) and (I) of Public Law 95–619) in cases 

where the Secretary determines that such measures are in addition to those required under the minimum property standards and will be cost-effective over the life of the measure; 

* * * * * * *

MORTGAGE INSURANCE FOR NURSING HOMES, INTERMEDIATE CARE

FACILITIES, AND BOARD AND CARE HOMES

SEC. 232. (a)***

* * * * * * *

(d) In order to carry out the purpose of this section, the Secretary 

is authorized to insure any mortgage which covers a new or rehabilitated nursing home, assisted living facility, or intermediate care 

facility, including a new addition to an existing nursing home, assisted living facility, or intermediate care facility and regardless of 

whether the existing home or facility is being rehabilitated, or any 

combination of nursing home, assisted living facility, and intermediate care facility or a board and care home including equipment 

to be used in its operation, subject to the following conditions: 

(1) * * *

* * * * * * *

ø(4)(A) With respect to nursing homes and intermediate care 

facilities and combined nursing home and intermediate care facilities, the Secretary shall not insure any mortgage under this 

section unless he has received, from the State agency designated in accordance with section 604(a)(1) or section 1521 of 

the Public Health Service Act for the State in which is located 

the nursing home or intermediate care facility or combined 

nursing home and intermediate care facility covered by the 

mortgage, a certification that (i) there is a need for such home 

or facility or combined home and facility, and (ii) there are in 

force in such State or in the municipality or other political subdivision of the State in which the proposed home or facility or 

combined home and facility is to be located reasonable minimum standards of licensure and methods of operation governing it. No such mortgage shall be insured under this section 

unless the Secretary has received such assurance as he may 

deem satisfactory from the State agency that such standards 

will be applied and enforced with respect to any home or facility or combined home and facility located in the State for 

which mortgage insurance is provided under this section. If no 

such State agency exists, or if the State agency exists but is 

not empowered to provide a certification that there is a need 

for the home or facility or combined home and facility as required in clause (i) of the first sentence, the Secretary shall not 

insure any mortgage under this section unless (i) the State in 

which the home or facility or combined home and facility is located has conducted or commissioned and paid for the preparaVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00135 Fmt 6659 Sfmt 6601 E:\HR\OC\HR640P2.107 HR640P2
136

tion of an independent study of market need and feasibility 

that (I) is prepared in accordance with the principles established by the American Institute of Certified Public Accountants; (II) assesses, on a marketwide basis, the impact of the 

proposed home or facility or combined home and facility on, 

and its relationship to, other health care facilities and services, 

the percentage of excess beds, demographic projections, alternative health care delivery systems, and the reimbursement 

structure of the home, facility, or combined home and facility; 

(III) is addressed to and is acceptable to the Secretary in form 

and substance; and (IV) in the event the State does not prepare the study, is prepared by a financial consultant who is selected by the State or the applicant for mortgage insurance and 

is approved by the Secretary; and (ii) the State complies with 

the other provisions of this subparagraph that would otherwise 

be required to be met by a State agency designated in accordance with section 604(a)(1) or section 1521 of the Public Health 

Service Act. The proposed mortgagor may reimburse the State 

for the cost of the independent feasibility study required in the 

preceding sentence. In the case of a small intermediate care facility for the mentally retarded or developmentally disabled, or 

a board and care home housing less than 10 individuals, the 

State program agency or agencies responsible for licensing, certifying, financing, or monitoring the facility or home may, in 

lieu of the requirements of clause (i) of the third sentence, provide the Secretary with written support identifying the need 

for the facility or home.¿

(4)(A)(i) The Secretary shall require satisfactory evidence that 

a nursing home, intermediate care facility, or combined nursing 

home and intermediate care facility will be located in a State 

or political subdivision of a State with reasonable minimum 

standards of licensure and methods of operation for such 

homes, facilities, or combined homes and facilities. The Secretary shall also require satisfactory assurance that such standards will be applied and enforced with respect to the home, facility, or combined home or facility. 

(ii) The Secretary shall establish the means for determining 

need and feasibility for the home, facility, or combined home 

and facility. If the State has an official procedure for determining need for such homes, facilities, or combined homes and 

facilities, the Secretary shall also require that such procedure 

be followed before the application for insurance is submitted, 

and the application shall document that need has also been established under that procedure.

* * * * * * *

MORTGAGE INSURANCE FOR CONDOMINIUMS

SEC. 234. (a)***

* * * * * * *

(e) To be eligible for insurance, a blanket mortgage on any multifamily project of a mortgagor of the character described in subsection (d) shall involve a principal obligation in an amount—

(2) * * *

137

(3) not to exceed, for such part of the project as may be attributable to dwelling use (excluding exterior land improvements as defined by the Secretary), $38,025 per family unit 

without a bedroom, $42,120 per family unit with one bedroom, 

$50,310 per family unit with two bedrooms, $62,010 per family 

unit with three bedrooms, and $70,200 per family unit with 

four or more bedrooms; except that as to projects to consist of 

elevator-type structures the Secretary may, in his discretion, 

increase the dollar amount limitations per family unit to not 

to exceed $43,875 per family unit without a bedroom, $49,140 

per family unit with one bedroom, $60,255 per family unit with 

two bedrooms, $75,465 per family unit with three bedrooms, 

and $85,328 per family unit with four or more bedrooms, as 

the case may be, to compensate for higher costs incident to the 

construction of elevator-type structures of sound standards of 

construction and design; except that the Secretary shall adjust 

each such dollar amount limitation set forth in this paragraph 

(as such limitation may have been previously adjusted pursuant 

to this provision) effective January 1 of each year (beginning in 

2003) in accordance with the percentage increase, if any, during 

the 12-month period ending with the preceding October, in the 

Annual Construction Cost Index of the Bureau of the Census of 

the Department of Commerce; except that each of the foregoing 

dollar amounts (as such amounts may have been previously adjusted pursuant to this paragraph) is increased to the amount 

established for a comparable unit in section 221(d)(3)(ii); and 

except that the Secretary may, by regulation, increase any of 

the foregoing dollar amount limitations contained in this paragraph (as such limitations may have been previously adjusted 

pursuant to this paragraph and increased pursuant to the preceding clause) and by not to exceed ø110¿ 140 percent in any 

geographical area where the Secretary finds that cost levels so 

require and by not to exceed ø140¿ 170 percent where the Secretary determines it necessary on a project-by-project basis, 

but in no case may any such increase exceed 90 percent where 

the Secretary determines that a mortgage purchased or to be 

purchased by the Government National Mortgage Association 

in implementing its special assistance functions under section 

305 of this Act (as such section existed immediately before November 30, 1983) is involved; and 

* * * * * * *

MORTGAGE INSURANCE FOR HOSPITALS

SEC. 242. (a)***

* * * * * * *

(d) In order to carry out the purpose of this section, the Secretary 

is authorized to insure any mortgage which covers a new or rehabilitated hospital, including equipment to be used in its operation, 

subject to the following conditions: 

(1) * * *

* * * * * * *

ø(4) The Secretary shall not insure any mortgage under this 

section unless he has received, from the State agency desVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00137 Fmt 6659 Sfmt 6601 E:\HR\OC\HR640P2.107 HR640P2
138

ignated in accordance with section 604(a)(1) or section 1521 of 

the Public Health Service Act for the State in which is located 

the hospital covered by the mortgage, a certification that (A) 

there is a need for such hospital, and (B) there are in force in 

such State or the political subdivision of the State in which the 

proposed hospital would be located reasonable minimum standards of licensure and methods of operation for hospitals. No 

such mortgage shall be insured under this section unless the 

Secretary has received such assurance as he may deem satisfactory from the State agency that such standards will be applied and enforced with respect to any hospital located in the 

State for which mortgage insurance is provided under this section. If no such State agency exists, or if the State agency exists but is not empowered to provide a certification that there 

is a need for the hospital as set forth in clause (A) of the first 

sentence, the Secretary shall not insure any mortgage under 

this section unless (A) the State in which the hospital is located has conducted or commissioned and paid for the preparation of an independent study of market need and feasibility 

that (i) is prepared in accordance with the principles established by the American Institute of Certified Public Accountants; (ii) assesses, on a marketwide basis, the impact of the 

proposed hospital on, and its relationship to, other health care 

facilities and services, the percentage of excess beds, demographic projections, alternative health care delivery systems, 

and the reimbursement structure of the hospital; (iii) is addressed to and is acceptable to the Secretary in form and substance; and (iv) in the event the State does not prepare the 

study, is prepared by a financial consultant selected by the 

State and approved by the Secretary; and (B) the State complies with the other provisions of this paragraph that would 

otherwise be required to be met by a State agency designated 

in accordance with section 604(a)(1) or section 1521 of the Public Health Service Act. The proposed mortgagor may reimburse 

the State for the cost of the independent feasibility study required in the preceding sentence.¿

(4)(A) The Secretary shall require satisfactory evidence that 

the hospital will be located in a State or political subdivision 

of a State with reasonable minimum standards of licensure and 

methods of operation for hospitals and satisfactory assurance 

that such standards will be applied and enforced with respect 

to the hospital. 

(B) The Secretary shall establish the means for determining 

need and feasibility for the hospital. If the State has an official 

procedure for determining need for hospitals, the Secretary 

shall also require that such procedure be followed before the application for insurance is submitted, and the application shall 

document that need has also been established under that procedure. 

* * * * * * *

(i) LOSS MITIGATION DEMONSTRATION PROGRAM.— (1) IN GENERAL.—Only to the extent or in such amounts as 

are provided in advance in appropriation Acts to carry out this 

subsection, the Secretary may carry out a program to demonstrate the effectiveness of taking loss mitigation actions for 

139

hospitals with mortgages that are insured under this section to 

reduce the risk of, prevent, or cure defaults of financially troubled hospitals, to reduce claim or holding costs of loans that are 

assigned to the Secretary, or to maximize the recovery on loan 

assets. The demonstration program may be carried out only 

with respect to not more than 3 such hospitals. 

(2) LOSS MITIGATION ACTIONS.—Loss mitigation actions taken 

under the demonstration program under this subsection may 

include the following actions: 

(A) Partial payment of a claim under the contract for 

mortgage insurance under this section. 

(B) Temporary provision of operating assistance funds, 

including debt service. 

(C) Provision of financial assistance for maintenance, repair, alterations, or the cost of other capital improvements, 

including for conversion of excess capacity of hospitals to 

facilities providing health care and supportive housing for 

elderly persons and families, including assisted living facilities, nursing homes, and supportive housing for the elderly. 

(3) REQUIREMENTS FOR ASSISTANCE.—A hospital may be provided financial assistance under the demonstration program 

only if—

(A) the hospital has secured binding commitments for 

matching funds of not less than 10 percent of the cost of 

such assistance; and 

(B) the hospital has met the requirements of any applicable State certificate of need or other licensing requirement. 

(4) LIMITATIONS ON ASSISTANCE.—Any payments or financial 

assistance or relief under this subsection shall be made at the 

sole discretion of the Secretary and on terms acceptable to the 

Secretary except that— (A) the total amount of payments and financial assistance and relief shall not exceed 30 percent of the outstanding project indebtedness insured by the Secretary; and 

(B) the mortgagor shall agree to repay such total amount 

to the Secretary upon terms and conditions acceptable to 

the Secretary. 

(5) FINAL DECISION.—A decision by the Secretary to exercise 

or forgo exercising any authority under this subsection shall not 

be subject to judicial review. 

(6) APPLICATIONS.—The Secretary shall provide for hospitals 

to submit applications for participation in the demonstration 

program under this subsection, which shall include information 

sufficient to determine compliance with the requirements under 

paragraph (3). 

(7) TERMINATION.—The demonstration program under this 

subsection shall terminate on December 31, 2004.

* * * * * * *

GRADUATED PAYMENT AND INDEXED MORTGAGES

SEC. 245. (a) The Secretary may insure under any provision of 

this title mortgages and loans with provisions of varying rates of 

amortization corresponding to anticipated variations in family inVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00139 Fmt 6659 Sfmt 6601 E:\HR\OC\HR640P2.107 HR640P2
140

come or with monthly payments and outstanding balances adjusted 

by a percentage change in a selected price index to the extent he 

determines such mortgages or loans (1) have promise for expanding 

housing opportunities or meet special needs, (2) can be developed 

to include any safeguards for mortgagors or purchasers that may 

be necessary to offset special risks of such mortgages, and (3) have 

a potential for acceptance in the private market. Notwithstanding 

any other provision of this title, except as provided in subsections 

(b) and (c) of this section, the principal obligation (including all interest to be deferred and added to principal) of a mortgage insured 

pursuant to this section may not exceed 97 per centum of the appraised value of the property covered by the mortgage as of the 

date the mortgage is accepted for insuranceø, or if the mortgagor 

is a veteran and the mortgage is to be insured in accordance with 

the provisions of section 203 of this title, such higher percentage 

of appraised value as is provided for purposes of determining the 

maximum mortgage amount eligible for insurance under section 

203(b)(2) in the case of veterans¿. (b) Notwithstanding the provisions of subsection (a), the Secretary may insure under any provision of this title a mortgage or 

loan which meets the requirements of the first sentence of subsection (a) and which has provisions for varying rates of amortization if the Secretary determines— (1) * * *

* * * * * * *

(3) the principal obligation of the mortgage or loan thereafter 

(including all interest to be deferred and added to principal) 

will not at any time be scheduled to exceed 97 per centumø, 

or, if the mortgagor is a veteran, such higher percentage as is 

provided under section 203(b)(2) for veterans,¿ of the projected 

value of the property; and 

* * * * * * *

ADJUSTABLE RATE SINGLE FAMILY MORTGAGES

SEC. 251. (a)***

* * * * * * *

(d)(1) The Secretary may insure under this subsection a mortgage that meets the requirements of subsection (a), except that the 

effective rate of interest— (A) * * *

* * * * * * *

(C) in the case of the initial interest rate adjustment, is subject to the 1 percent limitation only if the interest rate remained fixed for øfive or fewer years¿ three or fewer years. 

* * * * * * *

INSURANCE OF HOME EQUITY CONVERSION MORTGAGES FOR ELDERLY

HOMEOWNERS

SEC. 255. (a)***

* * * * * * *

141

(g) LIMITATION ON INSURANCE AUTHORITY.—The aggregate number of mortgages insured under this section may not exceed 

150,000. In no case may the benefits of insurance under this section exceed the maximum dollar amount established under section 

203(b)(2) for ø1-family residences in the area in which the dwelling 

subject to the mortgage under this section is located¿ a 1-family 

residence. 

* * * * * * *

SECTION 912 OF THE HOUSING AND URBAN 

DEVELOPMENT ACT OF 1970

EQUITY SKIMMING

SEC. 912. Whoever, with intent to defraud, willfully engages in 

a pattern or practice of—

(1) purchasing one- to four-family dwellings (including condominiums and cooperatives) which are subject to a loan in default at time of purchase or in default within øone year¿ 18 

months subsequent to the purchase and the loan is secured by 

a mortgage or deed of trust insured or held by the Secretary 

of Housing and Urban Development or guaranteed by the Department of Veterans Affairs, or the loan is made by the Department of Veterans Affairs, 

* * * * * * *

SECTION 202b OF THE HOUSING ACT OF 1959

SEC. 202b. GRANTS FOR CONVERSION OF ELDERLY HOUSING TO ASSISTED LIVING FACILITIES. 

(a) * * *

* * * * * * *

ø(h) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated for providing grants under this section such sums 

as may be necessary for fiscal year 2000.¿

(h) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated for grants for capital repair activities under subsection (a)(1) and for grants for conversion activities under subsection (a)(2) such sums as may be necessary for each of fiscal years 

2003 and 2004.

HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992

* * * * * * *

TITLE VI—HOUSING FOR ELDERLY PERSONS AND PERSONS WITH DISABILITIES 

* * * * * * *

142

Subtitle F—General Provisions 

* * * * * * *

SEC. 683. DEFINITIONS. 

For purposes of this title: 

(1) * * *

(2) FEDERALLY ASSISTED HOUSING.—The terms ‘‘federally assisted housing’’ and ‘‘project’’ mean— (A) * * *

* * * * * * *

(F) housing insured, assisted, or held by the Secretary or 

a State or State agency under section 236 of the National 

Housing Act; øand¿

(G) housing constructed or substantially rehabilitated 

pursuant to assistance provided under section 8(b)(2) of 

the United States Housing Act of 1937, as in effect before 

October 1, 1983, that is assisted under a contract for assistance under such sectionø.¿; and

(H) housing that is assisted under section 811 of the 

Cranston-Gonzalez National Affordable Housing Act (42 

U.S.C. 8013).

* * * * * * *

TITLE IX—REGULATORY AND 

MISCELLANEOUS PROGRAMS 

Subtitle A—Miscellaneous 

* * * * * * *

SEC. 911. SUBSIDY LAYERING REVIEW. 

(a) CERTIFICATION OF SUBSIDY LAYERING COMPLIANCE.—The requirements of section 102(d) of the Department of Housing and 

Urban Development Reform Act of 1989 ømay¿ shall be satisfied 

in connection with a project receiving assistance under a program 

that is within the jurisdiction of the Department of Housing and 

Urban Development and under section 42 of the Internal Revenue 

Code of 1986 by a certification by a housing credit agency to the 

Secretaryø, submitted in accordance with guidelines established by 

the Secretary, that the combination of assistance within the jurisdiction of the Secretary and other government assistance provided 

in connection with a property for which assistance is to be provided 

within the jurisdiction of the Department of Housing and Urban 

Development and under section 42 of the Internal Revenue Code of 

1986 shall not be any greater than is necessary to provide affordable housing.¿ that it has made the determination required by subsection (m)(2)(A) of such section 42 upon the first occasion that such 

determination was required and that it will make such determination upon such additional occasions as are required by law or regulation.

ø(b) IN PARTICULAR.—The guidelines established pursuant to 

subsection (a) shall—

143

ø(1) require that the amount of equity capital contributed by 

investors to a project partnership is not less than the amount 

generally contributed by investors in current market conditions, as determined by the housing credit agency; and 

ø(2) require that project costs, including developer fees, are 

within a reasonable range, taking into account project size, 

project characteristics, project location and project risk factors, 

as determined by the housing credit agency. 

ø(c) REVOCATION BY SECRETARY.—If the Secretary determines 

that a housing credit agency has failed to comply with the guidelines established under subsection (a), the Secretary— ø(1) may inform the housing credit agency that the agency 

may no longer submit certification of subsidy layering compliance under this section; and 

ø(2) shall carry out section 102(d) of the Department of 

Housing and Urban Development Reform Act of 1989 relating 

to affected projects allocated a low-income housing tax credit 

pursuant to section 42 of the Internal Revenue Code of 1986.¿

ø(d)¿ (b) APPLICABILITY.—Section 102(d) of the Department of 

Housing and Urban Development Reform Act of 1989 (42 U.S.C. 

3545(d)) shall apply only to projects for which an application for assistance or insurance was filed after the date of enactment of the 

Housing and Urban Development Reform Act. 

* * * * * * *

UNITED STATES HOUSING ACT OF 1937

* * * * * * *

TITLE I—GENERAL PROGRAM OF ASSISTED 

HOUSING 

* * * * * * *

SEC. 5A. PUBLIC HOUSING AGENCY PLANS. 

(a) * * *

(b) ANNUAL PLAN.—

(1) * * *

* * * * * * *

(3) SUSPENSION OF FILING REQUIREMENT FOR CERTAIN SMALL

PHAS.—

(A) IN GENERAL.—Notwithstanding paragraph (1) or any 

other provision of this Act—

(i) the requirement under paragraph (1) shall not 

apply to any qualified small public housing agency for 

fiscal years 2003, 2004, or 2005; and 

(ii) any reference in this section or any other provision of law to a ‘‘public housing agency’’ shall not be 

considered to refer to any qualified small public housing agency for such fiscal years, to the extent such reference applies to the requirement to submit a public 

housing agency plan under subsection (b). 

(B) DEFINITION.—For purposes of this paragraph, the 

term ‘‘qualified small public housing agency’’ means a pubVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00143 Fmt 6659 Sfmt 6603 E:\HR\OC\HR640P2.107 HR640P2
144

lic housing agency that meets all of the following requirements: 

(i) The sum of (I) the number of public housing 

dwelling units administered by the agency, and (II) the 

number of vouchers under section 8(o) of the United 

States Housing Act of 1937 (42 U.S.C. 1437f(o)) administered by the agency, is 100 or fewer. 

(ii) The agency is not designated pursuant to section 

6(j)(2) as a troubled public housing agency. 

(iii) The agency provides assurances satisfactory to 

the Secretary that, during fiscal years 2003, 2004, and 

2005, notwithstanding the inapplicability of the requirements under section 5A relating to resident advisory boards and public hearings and notice, residents 

of public housing administered by the agency will have 

an adequate and comparable opportunity for participation and notice regarding establishment of the goals, 

objectives, and policies of the public housing agency.

* * * * * * *

CONTRACT PROVISIONS AND REQUIREMENTS

SEC. 6. (a) * * *

* * * * * * *

(l) Each public housing agency shall utilize leases which—

(1) * * *

* * * * * * *

(6) provide that any criminal activity that threatens the 

health, safety, or right to peaceful enjoyment of the premises 

by other tenants or any drug-related criminal activity on or off 

such premises, engaged in by a public housing tenant, 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; except that such criminal activity, engaged in by a 

member of a tenant’s household or any guest or other person 

under the tenant’s control, shall not be cause for termination of 

tenancy of the tenant if the tenant or immediate member of the 

tenant’s family is a victim of domestic violence or dating violence and, as a result, could not control or prevent the criminal 

activity relating to domestic violence or dating violence; and except that nothing in this paragraph may be construed to limit 

the authority of a public housing agency to evict individuals 

who engage in criminal acts of physical violence against family 

members or others, and in all cases, a public housing agency 

shall consider the safety, security, and continued maintenance 

of victims of domestic violence to be of paramount importance; 

* * * * * * *

LOWER INCOME HOUSING ASSISTANCE

SEC. 8. (a) * * *

* * * * * * *

145

(d)(1) Contracts to make assistance payments entered into by a 

public housing agency with an owner of existing housing units 

shall provide (with respect to any unit) that— (A) * * *

(B)(i)***

* * * * * * *

(iii) during the term of the lease, 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; except that such criminal activity, engaged in by a 

member of a tenant’s household or any guest or other person 

under the tenant’s control, shall not be cause for termination of 

tenancy of the tenant if the tenant or immediate member of the 

tenant’s family is a victim of domestic violence or dating violence and, as a result, could not control or prevent the criminal 

activity relating to domestic violence or dating violence; and except that nothing in this clause may be construed to limit the 

authority of a public housing agency to evict individuals who 

engage in criminal acts of physical violence against family 

members or others, and in all cases, a public housing agency 

shall consider the safety, security, and continued maintenance 

of victims of domestic violence to be of paramount importance; 

* * * * * * *

(o) VOUCHER PROGRAM.— (1) AUTHORITY.— (A) * * *

* * * * * * *

ø(D) APPROVAL.—The¿

(D) EXCEPTION PAYMENT STANDARDS.—

(i) APPROVAL.—The Secretary may require a public 

housing agency to submit the payment standard of the 

public housing agency to the Secretary for approval, if 

the payment standard is less than 90 percent of the 

fair market rental or exceeds 110 percent of the fair 

market rental.

(ii) INCREASED PAYMENT STANDARD.—A public housing agency may establish a payment standard for the 

same size dwelling unit in a market area or portion of 

a market area between 110 and 120 percent of the fair 

market rent, if the payment standard for the market 

area or portion of a market area has been set at 110 

percent or above for the 6 months prior to the establishment of the new payment standard and the public 

housing agency determines that it has—

(I) a voucher success rate (the proportion of families that are issued a voucher that succeed in leasing a unit within the timeframe provided by the 

146

public housing agency to search for housing) of not 

more than 80 percent or has provided an extended 

search time of not less than 90 days to a significant number of voucher recipients; or 

(II) problems with concentration of the voucher 

holders in high poverty areas. 

(iii) DISABILITY ACCOMMODATION.—A public housing 

agency may establish a payment standard of not more 

than 120 percent of the fair market rent where necessary as a reasonable accommodation for a person 

with a disability, without approval of the Secretary. A 

public housing agency may seek approval of the Secretary to use a payment standard greater than 120 percent of the fair market rent as a reasonable accommodation for a person with a disability. 

(iv) SECRETARY APPROVAL.—A public housing agency 

may establish a payment standard in accordance with 

clause (ii) without approval of the Secretary, if the public housing agency includes in its annual plan that is 

submitted to the Secretary pursuant to section 5A(b)—

(I) the reasons for the increase in the payment 

standard; 

(II) a description of how and why the public 

housing agency has determined that it meets the 

requirements of clause (ii); and 

(III) a description of other steps the public housing agency is taking, in addition to increasing the 

payment standard, to address the problems of 

voucher utilization, voucher success rates (the proportion of families that are issued a voucher that 

succeed in leasing a unit within the timeframe provided by the public housing agency to search for 

housing), and concentration of voucher holders. 

(v) APPLICABILITY.—Clauses (ii) through (iv) shall 

apply with respect only to amounts made available for 

rental assistance under this subsection for fiscal year 

2004 and fiscal years thereafter.

* * * * * * *

(6) SELECTION OF FAMILIES AND DISAPPROVAL OF

OWNERS.—

(A) * * *

* * * * * * *

(D) RESIDENCY IN INAPPROPRIATELY SIZED UNITS.—

(i) IN GENERAL.—If a public housing agency determines that a family assisted under this subsection is 

residing in a dwelling unit that, because of a reduction 

in family size after such assistance was initially provided for such family, has more bedrooms than is appropriate for a family of such size, the agency may not 

terminate the assistance for the family or require the 

family to move to another dwelling unit unless—

(I) the agency provides the family with a dwelling unit that is located in the same building or 

147

project as the inappropriately sized dwelling unit 

and is available for occupancy; or 

(II) in the case of a family residing in a dwelling 

unit in a building or project that does not contain 

any available dwelling unit having a number of 

bedrooms that is appropriate for size of such family, the agency provides the family with a dwelling 

unit that is located within the same neighborhood 

as the building containing the inappropriately 

sized dwelling unit. 

(ii) DETERMINATION OF NEIGHBORHOOD.—For purposes of clause (i)(II), the term ‘‘neighborhood’’ means 

the immediate geographic area in which a building is 

located, which—

(I) is characterized by all locations within the 

area having a similar proximity to major roadways, mass transit facilities, and other means of 

transportation, schools, child care facilities, workplace centers, and grocery stores and other retail 

and commercial facilities; and 

(II) shall be determined by the public housing 

agency involved, in consultation with the appropriate resident advisory board established pursuant to section 5A(e). 

(iii) TREATMENT OF STUDENTS.—For purposes of 

clause (i), the absence of a child or adult from a dwelling because of temporary residence in another location 

for the purpose of attending school on a full- or parttime basis shall not be considered in determining family size.

* * * * * * *

(8) INSPECTION OF UNITS BY PHA’S.—

ø(A) IN GENERAL.—Except as provided in paragraph 

(11),¿

(A) GENERAL RULE.—

(i) IN GENERAL.—Except as provided in clause (ii) 

and paragraph (11), for each dwelling unit for which 

a housing assistance payment contract is established 

under this subsection, the public housing agency shall 

inspect the unit before any assistance payment is 

made to determine whether the dwelling unit meets 

the housing quality standards under subparagraph 

(B).

(ii) EXCEPTION.—A public housing agency may commence payments to an owner, if the public housing 

agency—

(I) has conducted an inspection of the building, 

which includes an inspection of a reasonable number of units in the 6 months prior to the date on 

which payment is made to the owner, and that inspection and any subsequent unit inspections have 

not turned up major deficiencies; 

(II) conducts an inspection of the unit for which 

the payment is being made not later than 30 days 

148

after the date for which payment is made to the 

owner; and 

(III) has an agreement with the owner to correct 

any deficiencies and make any repairs in the unit 

not later than 30 days after the date on which the 

inspection was made under subclause (II).

* * * * * * *

ø(D) ANNUAL INSPECTIONS.—Each¿

(D) ANNUAL INSPECTIONS.— (i) IN GENERAL.—Except as provided in clause (ii), 

each public housing agency providing assistance under 

this subsection (or other entity, as provided in paragraph (11)) shall make an annual inspection of each 

assisted dwelling unit during the term of the housing 

assistance payments contract for the unit to determine 

whether the unit is maintained in accordance with the 

requirements under subparagraph (A). The agency (or 

other entity) shall retain the records of the inspection 

for a reasonable time and shall make the records 

available upon request to the Secretary, the Inspector 

General for the Department of Housing and Urban Development, and any auditor conducting an audit under 

section 5(h).

(ii) EXCEPTION.—If a public housing agency has a 

large jurisdiction and is conducting inspections on a 

geographical basis, the public housing agency may 

comply with the annual inspection requirement by inspecting the unit within 9 to 15 months of the previous 

inspection. 

* * * * * * *

(F) ESCROW OF TENANT RENT IN CASES OF OWNER FAILURE TO MAINTAIN UNIT.—Each housing assistance payment 

contract under this subsection shall provide as follows: 

(i) REQUIREMENT.—In any case in which a public 

housing agency suspends assistance payments under 

this subsection with respect to a dwelling unit because 

of a failure on the part of the owner of the unit to 

maintain the unit in compliance with the housing 

quality standards established pursuant to this paragraph, the agency shall—

(I) require the tenant to suspend payment to the 

owner of the tenant’s monthly contribution toward 

rent and require the tenant to pay such amount 

into an escrow account established by the agency; 

and 

(II) notify the tenant and the owner of the failure 

to maintain the unit in compliance with such 

housing quality standards and of the actions required under this subparagraph. 

(ii) CORRECTION OF NONCOMPLIANCE.—If the owner 

corrects the noncompliance within the period of time 

established by the agency for such purpose, the public 

housing agency shall release to the owner any tenant 

payments toward rent deposited in the escrow account. 

149

(iii) FAILURE TO CORRECT NONCOMPLIANCE.—If the 

owner fails to correct the noncompliance within the period of time established by the agency and the tenant 

moves from the dwelling unit because of such noncompliance, the public housing agency shall make the 

any tenant payments toward rent that are deposited in 

the escrow account available on behalf of the tenant 

upon such move for costs of the move and for rental of 

a new dwelling unit.

* * * * * * *

(13) PHA PROJECT-BASED ASSISTANCE.—

(A) * * *

* * * * * * *

(C) CONSISTENCY WITH PHA PLAN AND OTHER GOALS.—A 

public housing agency may approve a housing assistance 

payment contract pursuant to this paragraph only if the 

contract is consistent with— (i) * * *

(ii) the goal of deconcentrating poverty and expanding housing and economic opportunities, revitalizing a 

low-income community, or preventing the displacement 

of extremely low-income families. (D) INCOME MIXING REQUIREMENT.— (i) * * *

(ii) EXCEPTIONS.—The limitation under clause (i) 

shall not øapply in the case of assistance under a contract for housing consisting of single family properties 

or for dwelling units that are specifically made available for households comprised of elderly families, disabled families, and families receiving supportive services.¿ apply—

(I) in the case of assistance under a contract for 

housing consisting of single family properties 

(buildings with 1 to 4 units); 

(II) for dwelling units that are specifically made 

available for households comprised of elderly families or disabled families; or 

(III) outside of a qualified census tract, for 

buildings with 5 to 25 units or with dwelling units 

that are specifically made available for families receiving supportive services. 

For purposes of this clause, the term ‘‘qualified census 

tract’’ has the same meaning given that term in section 

42(d) of the Internal Revenue Code of 1986 (26 U.S.C. 

42(d)). The Secretary may waive the limitations of this 

clause, consistent with the obligation to affirmatively 

further fair housing practices.

* * * * * * *

(F) CONTRACT TERM.—A housing assistance payment 

contract pursuant to this paragraph between a public 

housing agency and the owner of a structure may have a 

term of up to ø10¿ 15 years, subject to the availability of 

sufficient appropriated funds for the purpose of renewing 

150

expiring contracts for assistance payments, as provided in 

appropriations Acts and in the agency’s annual contributions contract with the Secretary, and to annual compliance with the inspection requirements under paragraph 

(8), except that the agency shall not be required to make 

annual inspections of each assisted unit in the development. The contract may specify additional conditions for 

its continuation. If the units covered by the contract are 

owned by the agency, the term of the contract shall be 

agreed upon by the agency and the unit of general local 

government or other entity approved by the Secretary in 

the manner provided under paragraph (11). 

* * * * * * *

(J) TENANT SELECTION.—A public housing agency shall 

select families to receive project-based assistance pursuant 

to this paragraph from its waiting list for assistance under 

this subsection, or from 1 or more separate project-based 

waiting lists established and maintained in accordance 

with subparagraph (K). A public housing agency may permit an owner to select families from a waiting list for units 

assisted under this paragraph maintained by the owner in 

accordance with subparagraph (L). Regardless of whether a 

waiting list is maintained under this subparagraph or 

under subparagraph (K) or (L), families shall initially be 

selected from the public housing agency’s waiting list for 

assistance under this subsection for at least 1⁄2 of the vacant units in a building made available with assistance 

under this paragraph, unless the units are restricted, under 

the tenant selection preferences adopted under the annual 

plan submitted by the public housing agency to the Secretary pursuant to section 5A(b), to occupancy by persons 

who are receiving intensive publicly funded services and 

who have a disability, as defined in section 3 of this Act or 

section 422 of the McKinney-Vento Homeless Assistance 

Act. Eligibility for such project-based assistance shall be 

subject to the provisions of section 16(b) that apply to tenant-based assistance. The agency may establish preferences or criteria for selection for a unit assisted under 

this paragraph that are consistent with the public housing 

agency plan for the agency approved under section 5A. 

Any family that rejects an offer of project-based assistance 

under this paragraph or that is rejected for admission to 

a structure by the owner or manager of a structure assisted under this paragraph shall retain its place on the 

waiting list as if the offer had not been made. The owner 

or manager of a structure assisted under this paragraph 

shall not admit any family to a dwelling unit assisted 

under a contract pursuant to this paragraph other than a 

family referred by the public housing agency from its waiting list, unless the owner maintains a waiting list under 

subparagraph (L). Subject to its waiting list policies and 

selection preferences, a public housing agency may place 

on its waiting list a family referred by the owner or manager of a structure øand may maintain a separate waiting 

list for assistance under this paragraph, but only if all 

151

families on the agency’s waiting list for assistance under 

this subsection are permitted to place their names on the 

separate list¿. (K) PUBLIC HOUSING AGENCY WAITING LIST.— (i) IN GENERAL.—A public housing agency may select 

families for assistance— (I) under subparagraph (J); 

(II) under this subparagraph for each property 

that receives assistance under this paragraph; or 

(III) under this subparagraph for similar properties that receive assistance under this paragraph. 

(ii) REQUIREMENTS.—A public housing agency that 

maintains a separate waiting list under this subparagraph—

(I) shall provide notice of the opening of the 

waiting list in the same manner required by the 

Secretary for the provision of notice of the opening 

of the waiting list for tenant-based assistance 

under this subsection, except that this subclause 

shall not apply to units assisted under this paragraph that are restricted, under tenant selection 

preferences adopted under the annual plan submitted by the public housing agency to the Secretary pursuant to section 5A(b) to occupancy by 

persons who are receiving intensive publicly funded services and who have a disability, as defined 

in section 3 of this Act or section 422 of the McKinney-Vento Homeless Assistance Act; 

(II) shall give preference to families on its tenant-based waiting list, if families are applying at 

the equivalent time and date with otherwise equivalent preference under the annual plan submitted 

by the public housing agency to the Secretary pursuant to section 5A(b); and 

(III) shall notify families that are applying for 

tenant-based assistance of the opportunity to be 

listed on the waiting list maintained under this 

subparagraph. 

(L) OWNER WAITING LIST.— (i) IN GENERAL.—A public housing agency may allow 

an owner of a structure with a contract for assistance 

under this paragraph to maintain a waiting list for 

units assisted under this paragraph. 

(ii) AGENCY PLAN.—The policy for a waiting list 

maintained under this subparagraph and any applicable preferences or selection criteria shall be included in 

the annual plan submitted by the public housing agency to the Secretary in accordance with section 5A(b). 

(iii) AGENCY RESPONSIBILITIES.—If a waiting list is 

maintained under this subparagraph, the public housing agency shall— (I) provide notice of the opening of the waiting 

list in the same manner and to the same extent as 

is required of the agency under subparagraph 

(K)(ii)(I); 

152

(II) notify families that apply for tenant-based 

assistance of the opportunity to be listed on that 

waiting list; 

(III) establish a mechanism to transmit applications submitted at its office to the owner for placement on that waiting list; and 

(IV) monitor, at reasonable intervals, the compliance by the owner with laws applicable to tenant 

selection and waiting lists, including civil rights 

laws, regulations, and certifications. 

(iv) OWNER RESPONSIBILITIES.—If a waiting list is 

maintained under this subparagraph, the owner of the 

structure shall—

(I) provide notice of the opening of the waiting 

list (unless the public housing agency agrees to 

provide such notice for the owner, or notice is not 

required pursuant to clause (iii)(I)) and provide 

preference to families on the tenant-based waiting 

list of the public housing agency in the same manner as is required under subparagraph (K); 

(II) place on its waiting list, families that apply 

at an office of the agency that accepts applications 

for tenant-based assistance; 

(III) cooperate with requests of the public housing agency for information concerning the waiting 

list and the tenant selection decisions of the owner; 

and 

(IV) submit written tenant selection policies and 

criteria to the public housing agency for approval, 

and make those policies and criteria available to 

the public. 

(v) RIGHT TO INFORMAL REVIEW.—A family that is 

denied a unit by an owner that maintains a waiting 

list under this subparagraph shall have the same 

rights to informal review by a public housing agency as 

a family that is denied tenant-based assistance by a 

public housing agency, and such review shall be performed expeditiously so as not to impede the timely 

rental of units. The public housing agency’s review at 

the informal hearing shall be limited to determining if 

the owner, if denying admission, followed applicable 

law and the procedures and criteria adopted by the 

owner and approved by the public housing agency for 

determining the eligibility of applicants for admission. 

(vi) APPLICABILITY.—Except as provided in this subparagraph, a waiting list maintained by an owner 

shall be considered to be a waiting list maintained by 

a public housing agency for assistance under this subsection. 

(vii) LIMITATION OF LIABILITY.—No right of action 

shall exist against a public housing agency with respect to an owner’s violation of any applicable law, unless the agency has actual knowledge that such violation has occurred or is occurring and—

153

(I) the agency has failed to take action to cause 

the owner to cease such violation; or 

(II) the public housing agency has failed to comply with its responsibilities under clause (iii).

ø(K)¿ (M) VACATED UNITS.—Notwithstanding paragraph 

(9), a housing assistance payment contract pursuant to 

this paragraph may provide as follows: 

(i) * * *

* * * * * * *

(N) FAIR HOUSING, SUBSIDY LAYERING, AND COMPETITIVE

SELECTION REQUIREMENTS.—A public housing agency may 

attach assistance under this paragraph to units without 

specific approval by the Secretary of compliance with fair 

housing, subsidy layering, or competitive selection requirements, if—(i) for fair housing compliance, the units proposed to 

receive assistance under this paragraph receive a grant 

or a loan under a Federal program pursuant to which 

the Secretary, or a designee of the Secretary, has determined in accordance with regulations that the site location would meet applicable civil rights and fair 

housing requirements; 

(ii) for compliance with subsidy layering requirements, consistent with the written policy of the Secretary, the public housing agency or another public 

agency has determined that addition of subsidies 

under this paragraph would not duplicate other public 

funding; or 

(iii) for compliance with competitive selection requirements, an advertisement for capital funds announced the potential for availability of assistance 

under this paragraph. 

(O) USE OF ASSISTANCE IN CONJUNCTION WITH PUBLIC

HOUSING CAPITAL FUNDS.—

(i) CAPITAL FUND AND HOPE VI.—Notwithstanding 

any provision to the contrary in this Act, a public housing agency may attach assistance under this paragraph 

to a structure or unit that receives assistance allocated 

to the public housing agency under the Capital Fund, 

established by section 9(d), or under section 24. 

(ii) OPERATING FUND.—A unit that receives assistance under this paragraph shall not be eligible for assistance under the Operating Fund established by section 9(e). 

* * * * * * *

(20) FLEXIBILITY TO ASSIST HARD-TO-HOUSE FAMILIES.—In 

any program year, a public housing agency that is not designated as troubled pursuant to the section 8 management assessment program, or under such other program as may be used 

by the Secretary to evaluate performance of public housing 

agencies in administering rental assistance under this section, 

may use up to 2 percent of any amounts allocated to the agency 

for such year for purposes that directly support the agency’s 

housing choice voucher program, including housing counseling, 

154

downpayment assistance under subsection (y), rental security 

deposits for families receiving voucher assistance, and other activities that directly assist eligible families in gaining and 

maintaining occupancy in suitable dwelling units.

* * * * * * *

(q) ADMINISTRATIVE FEES.— (1) * * *

* * * * * * *

(4) PERFORMANCE INCENTIVE.—For fiscal year 2003 and fiscal years thereafter, the Secretary may pay an additional fee to 

any public housing agency that succeeds in achieving high or 

substantially improved performance on specified program requirements or program goals, as established under the management assessment program for the rental assistance program 

under this section, or any successor assessment program for 

such assistance, or by regulation issued by the Secretary after 

notice and opportunity for public comment pursuant to the provisions of section 553 of title 5, United States Code (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section). 

The Secretary shall establish limitations on the total amount of 

any such additional fees paid to agencies for a fiscal year and 

on the amount of any such fee paid to any single agency for a 

fiscal year.

ø(4)¿ (5) APPLICABILITY.—This subsection shall apply to fiscal year 1999 and fiscal years thereafter. 

* * * * * * *

(t) ENHANCED VOUCHERS.— (1) IN GENERAL.—øEnhanced¿ Except as provided in paragraph (2), enhanced voucher assistance under this subsection 

for a family shall be voucher assistance under subsection (o), 

except that under such enhanced voucher assistance—

(A) * * *

* * * * * * *

(C) subparagraph (B) of this paragraph shall not apply 

and the payment standard for the dwelling unit occupied 

by the family shall be determined in accordance with subsection (o) if—

(i) * * *

(ii) the voucher is made available for use by any 

family other than the original family on behalf of 

whom the voucher was provided; øand¿

(D) if the income of the assisted family declines to a significant extent, the percentage of income paid by the family for rent shall not exceed the greater of 30 percent or 

the percentage of income paid at the time of the eligibility 

event for the projectø.¿; and

(E) a family’s eligibility to receive such assistance shall 

be determined pursuant to the provisions of law authorizing or requiring the provision of enhanced voucher assistance pursuant to the eligibility event that affected such 

family and a family may not be required, as a condition of 

receiving such assistance, to qualify under the selection 

155

standards of a public housing agency for voucher assistance under this section.

(2) ENHANCED VOUCHERS FOR RESIDENTS OF UNITS NOT

AVAILABLE FOR CONTINUED RENTAL.— (A) VOUCHER ASSISTANCE.—In the case of a family who 

is eligible for enhanced voucher assistance under this subsection and who, on the date of the eligibility event resulting in such family’s eligibility, is residing in a dwelling 

unit that is unavailable for continued rental as provided in 

subparagraph (B) as a result of such event, enhanced 

voucher assistance under this subsection for the family 

shall be voucher assistance under subsection (o), except that 

under such enhanced voucher assistance— (i) subject only to clause (iv), the assisted family 

shall pay as rent no less than the amount the family 

was paying on the date of the eligibility event for the 

project; 

(ii) the assisted family may elect to reside in any 

other dwelling unit that is located within the zip code 

in which is located the project in which the family was 

residing on the date of the eligibility event for the 

project or within a zip code contiguous to such zip 

code, and if, during any period after such election that 

the family continues to reside, the rent for the dwelling 

unit of the family exceeds the applicable payment 

standard established pursuant to subsection (o) for the 

unit, the amount of rental assistance provided on behalf of the family shall be determined using a payment 

standard that is equal to the rent for the dwelling unit 

(as such rent may be increased from time-to-time), except that—(I) such rent shall be subject to paragraph 

(10)(A) of subsection (o); 

(II) such payment standard shall not exceed the 

greater of 150 percent of the applicable fair market 

rents or 150 percent of the applicable payment 

standard for the market area; and 

(III) subject only to the limit in subclause (II), 

such payment standard shall not adversely affect 

such assisted families; 

(iii) clause (ii) of this subparagraph shall not apply 

and the payment standard for the dwelling unit occupied by the family shall be determined in accordance 

with subsection (o) if—

(I) the assisted family moves, at any time, to a 

dwelling unit that is not located within (aa) the 

zip code within which is located the project in 

which the family was residing on the date of the 

eligibility event for the project, or (bb) a zip code 

contiguous to such zip code; or 

(II) the voucher is made available for use by any 

family other than the original family on behalf of 

whom the voucher was provided; and 

(iv) if the income of the assisted family declines to a 

significant extent, the percentage of income paid by the 

156

family for rent shall not exceed the greater of 30 percent or the percentage of income paid at the time of the 

eligibility event for the project. 

(B) UNAVAILABILITY DUE TO CONVERSION.—A dwelling 

unit shall be considered to be unavailable for continued 

rental as provided in this subparagraph if the eligibility 

event for the project occurs in connection with a conversion 

of the unit to condominium, cooperative, or commercial use, 

after having obtained all necessary land use approvals.

ø(2)¿ (3) ELIGIBILITY EVENT.—For purposes of this subsection, the term ‘‘eligibility event’’ means, with respect to a 

multifamily housing project, the prepayment of the mortgage 

on such housing project, the voluntary termination of the insurance contract for the mortgage for such housing project (including any such mortgage prepayment during fiscal year 1996 

or a fiscal year thereafter or any insurance contract voluntary 

termination during fiscal year 1996 or a fiscal year thereafter), 

the termination or expiration of the contract for rental assistance under section 8 of the United States Housing Act of 1937 

for such housing project (including any such termination or expiration during fiscal years after fiscal year 1994 prior to the 

effective date of the Departments of Veterans Affairs and 

Housing and Urban Development, and Independent Agencies 

Appropriations Act, 2001), or the transaction under which the 

project is preserved as affordable housing, that, under paragraphs (3) and (4) of section 515(c), section 524(d) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 

(42 U.S.C. 1437f note), section 223(f ) of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 

U.S.C. 4113(f )), or section 201(p) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–

1a(p)), results in tenants in such housing project being eligible 

for enhanced voucher assistance under this subsection. 

ø(3)¿ (4) TREATMENT OF ENHANCED VOUCHERS PROVIDED

UNDER OTHER AUTHORITY.—

(A) * * *

* * * * * * *

(5) RIGHT TO USE.—The owner of a multifamily housing 

project for which an eligibility event (as such term is defined in 

paragraph (2)) has occurred may not refuse—

(A) to accept enhanced voucher assistance for lease of a 

dwelling unit in the same project on behalf of a family who 

was residing in the project upon the occurrence of such eligibility event; or 

(B) to enter into a housing assistance payments contract 

for such a unit.

ø(4)¿ (6) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated for each of fiscal years 2000, 2001, 

2002, 2003, and 2004 such sums as may be necessary for enhanced voucher assistance under this subsection. 

* * * * * * *

(x) FAMILY UNIFICATION.—

(1) * * *

157

(2) USE OF FUNDS.—The amounts made available under this 

subsection shall be used only in connection with tenant-based 

assistance under øsection 8¿ this section on behalf of (A) 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 øand¿, (B) 

for a period not to exceed 18 months, otherwise eligible youths 

who have attained at least 18 years of age and not more than 

21 years of age and who have left foster care at age 16 or older, 

or (C) a covered family, who is otherwise eligible for such assistance, for rental of a qualified dwelling unit. 

(3) ALLOCATION.—The amounts made available under this 

subsection shall be allocated by the Secretary through a national competition among applicants based on demonstrated 

need for assistance under this subsection. To be considered for 

assistance, an applicant shall submit to the Secretary a written proposal containing, as appropriate (A) 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 

subsection, or (B) a description of the need for assistance under 

this subsection for covered families. (4) DEFINITIONS.—For purposes of this subsection: 

(A) * * *

* * * * * * *

(C) CHILD.—The term ‘‘child’’ means an individual who—

(i) is not attending school and is not more than 18 

years of age; or 

(ii) is attending school and is not more than 19 years 

of age. 

(D) COVERED FAMILY.—The term ‘‘covered family’’ means 

a family that—

(i) includes a child; and 

(ii) has a head of household who is—

(I) a grandparent of the child who is raising the 

child; or 

(II) a relative of the child who is raising the 

child. 

(E) GRANDPARENT.—The term ‘‘grandparent’’ means, with 

respect to a child, an individual who is a grandparent or 

stepgrandparent of the child by blood or marriage, regardless of the age of such individual. In the case of a child who 

was adopted, the term includes an individual who, by 

blood or marriage, is a grandparent or stepgrandparent of 

the child as adopted. 

(F) QUALIFIED DWELLING UNIT.—The term ‘‘qualified 

dwelling unit’’ means a dwelling unit that—

(i) has at least 2 separate bedrooms; 

158

(ii) is equipped with design features appropriate to 

meet the special physical needs of elderly persons, as 

needed; and 

(iii) is equipped with design features appropriate to 

meet the special physical needs of young children. 

(G) RAISING A CHILD.—The term ‘‘raising a child’’ means, 

with respect to an individual, that the individual—

(i) resides with the child; and 

(ii) is the primary caregiver for the child—

(I) because the biological or adoptive parents of 

the child do not reside with the child or are unable 

or unwilling to serve as the primary caregiver for 

the child; and 

(II) regardless of whether the individual has a 

legal relationship to the child (such as guardianship or legal custody) or is caring for the child informally and has no such legal relationship with 

the child. 

(H) RELATIVE.—The term ‘‘relative’’ means, with respect 

to a child, an individual who—

(i) is not a parent of the child by blood or marriage; 

and 

(ii) is a relative of the child by blood or marriage, regardless of the age of the individual. 

In the case of a child who was adopted, the term includes 

an individual who, by blood or marriage, is a relative of 

the family who adopted the child.

* * * * * * *

SEC. 13. CONSORTIA, JOINT VENTURES, AFFILIATES, AND SUBSIDIARIES OF PUBLIC HOUSING AGENCIES. 

(a) * * *

(b) JOINT VENTURES.—

(1) * * *

* * * * * * *

(4) NON-FEDERAL FUNDS AND ACTIVITIES.—This subsection 

shall not apply to any subsidiary, joint venture, partnership, or 

business arrangement, or any activity conducted by such an entity, that does not involve holding or expending funds received 

from the Federal Government or proceeds or income derived 

from such funds.

* * * * * * *

SEC. 24. DEMOLITION, SITE REVITALIZATION, REPLACEMENT HOUSING, AND TENANT-BASED ASSISTANCE GRANTS FOR 

PROJECTS. 

(a) PURPOSES.—The purpose of this section is to provide assistance to public housing agencies for the purposes of— (1) 

* * * * * * *

It is also the purpose of this section to provide assistance to smaller 

communities for the purpose of facilitating the development of affordable housing for low-income families that is undertaken in conVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00158 Fmt 6659 Sfmt 6603 E:\HR\OC\HR640P2.107 HR640P2
159

nection with a main street revitalization or redevelopment project in 

such communities.

* * * * * * *

(e) APPLICATION AND SELECTION.—

(1) * * *

ø(2) SELECTION CRITERIA.—The Secretary shall establish selection criteria for the award of grants under this section and 

shall include such factors as—¿

(2) SELECTION CRITERIA.—The Secretary shall establish criteria for the award of grants under this section and shall include among the factors—

(A) * * *

(B) the capability and record of the applicant public 

housing agency, or any alternative management entity for 

the agency, for managing ølarge-scale¿ redevelopment or 

modernization projects, meeting construction timetables, 

and obligating amounts in a timely manner; 

* * * * * * *

(D) the extent of involvement of residents, State and 

local governments, private service providers, financing entities, and developers, in the development and ongoing implementation of a revitalization program for the project; 

* * * * * * *

(H) the extent of the need for, and the potential impact 

of, the revitalization program; øand¿

(I) the extent to which the applicant can commence and 

complete the revitalization plan expeditiously; 

(J) the extent to which the plan minimizes temporary or 

permanent displacement of current residents of the public 

housing site who wish to remain in or return to the revitalized community; 

(K) the extent to which the plan sustains or creates more 

project-based housing units available to persons eligible for 

public housing in markets where there is demand for the 

maintenance or creation of such units; 

(L) the extent to which the plan gives to existing residents 

priority for occupancy in dwelling units in the revitalized 

community; and

ø(I)¿ (M) such other factors as the Secretary considers 

appropriate. 

* * * * * * *

(l) ANNUAL REPORT.—The Secretary shall submit to the Congress 

an annual report setting forth—

(1) * * *

* * * * * * *

(3) the amount and type of financial assistance provided 

under and in conjunction with this sectionø; and¿, including a 

specification of the amount and type of assistance provided 

under subsection (n);

(4) the types of projects funded, and number of affordable 

housing dwelling units developed with, grants under subsection 

(n); and

160

ø(4)¿ (5) the recommendations of the Secretary for statutory 

and regulatory improvements to the program established by 

this section. 

(m) FUNDING.—

ø(1) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated for grants under this section 

$600,000,000 for fiscal year 1999 and such sums as may be 

necessary for each of fiscal years 2000, 2001, and 2002.¿

(1) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated for grants under this section such sums 

as may be necessary for each of fiscal years 2003 and 2004. 

* * * * * * *

(3) Of the amount appropriated pursuant to paragraph (1) for 

any fiscal year, the Secretary shall provide up to 5 percent for 

use only for grants under subsection (n). 

(n) GRANTS FOR ASSISTING AFFORDABLE HOUSING DEVELOPED

THROUGH MAIN STREET PROJECTS IN SMALLER COMMUNITIES.—

(1) AUTHORITY AND USE OF GRANT AMOUNTS.—The Secretary 

may make grants under this subsection to smaller communities. 

Such grant amounts shall be used by smaller communities only 

to provide assistance to carry out eligible affordable housing activities under paragraph (3) in connection with an eligible 

project under paragraph (2). 

(2) ELIGIBLE PROJECT.—For purposes of this subsection, the 

term ‘‘eligible project’’ means a project that—

(A) the Secretary determines, under the criteria established pursuant to paragraph (3), is a main street project; 

(B) is carried out within the jurisdiction of smaller community receiving the grant; and 

(C) involves the development of affordable housing that is 

located in the commercial area that is the subject of the 

project. 

(3) MAIN STREET PROJECTS.—The Secretary shall establish 

requirements for a project to be consider a main street project 

for purposes of this section, which shall require that the 

project—

(A) has as its purpose the revitalization or redevelopment 

of a historic or traditional commercial area; 

(B) involves investment, or other participation, by the 

government for, and private entities in, the community in 

which the project is carried out; and 

(C) complies with such historic preservation guidelines or 

principles as the Secretary shall identify to preserve significant historic or traditional architectural and design features in the structures or area involved in the project. 

(4) ELIGIBLE AFFORDABLE HOUSING ACTIVITIES.—For purposes 

of this subsection, the activities described in subsection (d)(1) 

shall be considered eligible affordable housing activities, except 

that—

(A) such activities shall be conducted with respect to affordable housing rather than with respect to severely distressed public housing projects; and 

(B) eligible affordable housing activities under this subsection shall not include the activities described in subVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00160 Fmt 6659 Sfmt 6603 E:\HR\OC\HR640P2.107 HR640P2
161

paragraphs (B) through (F) or (J) through (L) of subsection 

(d)(1). 

(5) MAXIMUM GRANT AMOUNT.—A grant under this subsection 

for a fiscal year for a single smaller community may not exceed 

$1,000,000. 

(6) CONTRIBUTION REQUIREMENT.—A smaller community applying for a grant under this subsection shall be considered an 

applicant for purposes of subsection (c) (relating to contributions by applicants), except that— (A) such supplemental amounts shall be used only for 

carrying out eligible affordable housing activities; and 

(B) paragraphs (1)(B) and (3) shall not apply to grants 

under this subsection. 

(7) APPLICATIONS AND SELECTION.— (A) APPLICATION.—Pursuant to subsection (e)(1), the Secretary shall provide for smaller communities to apply for 

grants under this subsection, except that the Secretary may 

establish such separate or additional criteria for applications for such grants as may be appropriate to carry out 

this subsection. 

(B) SELECTION CRITERIA.—The Secretary shall establish 

selection criteria for the award of grants under this subsection, which shall be based on the selection criteria established pursuant to subsection (e)(2), with such changes as 

may be appropriate to carry out the purposes of this subsection. 

(8) COST LIMITS.—The cost limits established pursuant to 

subsection (f) shall apply to eligible affordable housing activities assisted with grant amounts under this subsection. 

(9) INAPPLICABILITY OF OTHER PROVISIONS.—The provisions of 

subsections (g) (relating to disposition and replacement of severely distressed public housing), (h) (relating to administration 

of grants by other entities), and (i) (relating to withdrawal of 

funding) shall not apply to grants under this subsection. 

(10) REPORTING.—The Secretary shall require each smaller 

community receiving a grant under this subsection to submit a 

report regarding the use of all amounts provided under the 

grant. 

(11) DEFINITIONS.—For purposes of this subsection, the following definitions shall apply: 

(A) AFFORDABLE HOUSING.—The term ‘‘affordable housing’’ means rental or homeownership dwelling units that—

(i) are made available for initial occupancy subject to 

the same rules regarding level of income and income 

mix as dwelling units in public housing projects assisted with a grant under this section; and 

(ii) are subject to the same rules regarding occupant 

contribution toward rent or purchase and terms of 

rental or purchase as dwelling units in public housing 

projects assisted with a grant under this section. 

(B) SMALLER COMMUNITY.—The term ‘‘smaller community’’ means a unit of general local government (as such 

term is defined in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302)) that—

(i) has a population of 30,000 or fewer; and 

162

(ii)(I) may not be not served by a public housing 

agency; or 

(II) is served by a single public housing agency, 

which agency administers 100 or fewer public housing 

dwelling units.

ø(n)¿ (o) SUNSET.—No assistance may be provided under this section after September 30, ø2002¿ 2004. 

* * * * * * *

SEC. 36. DEMONSTRATION PROGRAM FOR GRANTS FOR CONVERSION 

OF PUBLIC HOUSING TO ASSISTED LIVING FACILITIES. 

(a) GRANT AUTHORITY.—To the extent only that amounts are appropriated in advance to carry out this section, the Secretary shall 

carry out a program, in accordance with this section, to demonstrate 

the effectiveness of making grants to public housing agencies for use 

for activities designed to convert dwelling units in eligible projects 

described in subsection (b) to assisted living facilities or other facilities that expand the availability of supportive services, to enhance 

the ability of elderly persons to maintain independent living. 

(b) ELIGIBLE PROJECTS.—An eligible project described in this subsection is a public housing project (or a portion thereof) that is primarily occupied by elderly persons. 

(c) APPLICATIONS.—Applications for grants under the demonstration program under this section shall be submitted to the Secretary 

in accordance with such procedures as the Secretary shall establish. 

Such applications shall contain— (1) a description of the proposed conversion activities for 

which a grant under the program is requested; 

(2) the amount of the grant requested; 

(3) a description of the resources that are expected to be made 

available, if any, in conjunction with the grant under the program; and 

(4) such other information or certifications that the Secretary 

determines to be necessary or appropriate. 

(d) FUNDING FOR SERVICES.—The Secretary may not make a 

grant under the demonstration program under this section unless 

the application contains sufficient evidence, in the determination of 

the Secretary, that there will be adequate funding for supportive 

services for residents of the facility converted with grant amounts. 

(e) SERVICE COORDINATORS.—An application for a grant under 

the demonstration program under this section may include a request for, and the Secretary may provide funds under the grant for, 

amounts to provide service coordinators to assist in the provision of 

supportive services for residents of the facilities converted with 

grant amounts. 

(f) SCOPE.—Grants under the demonstration program under this 

section may be made only with respect to three eligible projects. 

(g) SELECTION CRITERIA.—The Secretary shall select applications 

for grants under the demonstration program under this section 

based upon selection criteria, which shall be established by the Secretary and shall include—

(1) the extent to which the conversion is likely to provide assisted living facilities or supportive services that are needed or 

are expected to be needed by the categories of elderly persons 

that the assisted living facility is intended to serve; 

163

(2) the extent of financial need on the part of the applicant 

for funding to carry out the conversion activities proposed; 

(3) the extent to which the agency has evidenced community 

support for the conversion, by such indicators as letters of support from the local community for the conversion and financial 

contributions from public and private sources; 

(4) the extent to which the applicant demonstrates a strong 

commitment to promoting the autonomy and independence of 

the elderly persons that the assisted living facility or other supportive services facility is intended to serve; 

(5) the quality, completeness, and managerial capability of 

providing services to elderly residents, especially in such areas 

as meals, 24-hour staffing, and on-site health care; and 

(6) such other criteria as the Secretary determines to be appropriate to ensure that funds made available under the demonstration program under this section are used effectively. 

(h) DEFINITION.—For the purposes of this section, the term ‘‘assisted living facility’’ has the meaning given such term in section 

232(b) of the National Housing Act (12 U.S.C. 1715w(b)). 

(i) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated for providing grants under the demonstration program under this section such sums as may be necessary for each of 

fiscal years 2003 and 2004.

* * * * * * *

SECTION 557 OF THE QUALITY HOUSING AND WORK 

RESPONSIBILITY ACT OF 1998

SEC. 557. MANUFACTURED HOUSING DEMONSTRATION PROGRAM. 

(a) IN GENERAL.—The Secretary of Housing and Urban Development shall carry out a program during fiscal years ø1999, 2000, 

and 2001¿ 2002, 2003, and 2004 to demonstrate the effectiveness 

of providing, directly to eligible families that own manufactured 

homes and rent real property on which their homes are located, 

tenant-based assistance for the rental of such property that would 

otherwise be provided directly to the owners of such real property 

under section 8(o)(12) of the United States Housing Act of 1937. 

* * * * * * *

(c) øREPORT¿ REPORTS.—Not later than March 31, 2002, the Secretary shall submit øa report¿ an interim report to the Congress 

describing øand evaluating¿ the implementation and operation of

the demonstration program under this section. Not later than 

March 31, 2005, the Secretary shall submit a report to the Congress 

describing and evaluating the demonstration program under this 

section.

* * * * * * *

SECTION 524 OF THE MULTIFAMILY ASSISTED HOUSING 

REFORM AND AFFORDABILITY ACT OF 1997

SEC. 524. RENEWAL OF EXPIRING PROJECT-BASED SECTION 8 CONTRACTS. 

(a) IN GENERAL.—

164

(1) * * *

* * * * * * *

(4) RENEWAL RENTS.—Except as provided in subsection (b), 

the contract for assistance shall provide assistance at the following rent levels: 

(A) MARKET RENTS.—At the request of the owner of the 

project, at rent levels equal to the lesser of comparable 

market rents for the market area or 150 percent of the fair 

market rents, in the case only of a project that—

(i) * * *

* * * * * * *

(iv) is not—

(I) owned by a nonprofit entity; or

ø(II) subject to a contract for moderate rehabilitation assistance under section 8(e)(2) of the 

United States Housing Act of 1937, as in effect before October 1, 1991; or¿

ø(III)¿ (II) a project for which the public housing agency provided voucher assistance to one or 

more of the tenants after the owner has provided 

notice of termination of the contract covering the 

tenant’s unit; and 

* * * * * * *

(b) EXCEPTION RENTS.—

(1) * * *

* * * * * * *

ø(3) MODERATE REHABILITATION PROJECTS.—In the case of a 

project with a contract under the moderate rehabilitation program, other than a moderate rehabilitation contract under section 441 of the Stewart B. McKinney Homeless Assistance Act, 

pursuant to the request of the owner of the project, the contract for assistance for the project pursuant to subsection (a) 

shall provide assistance at the lesser of the following rent levels: 

ø(A) ADJUSTED EXISTING RENTS.—The existing rents 

under the expiring contract, as adjusted by an operating 

cost adjustment factor established by the Secretary (which 

shall not result in a negative adjustment). 

ø(B) FAIR MARKET RENTS.—Fair market rents (less any 

amounts allowed for tenant-purchased utilities). 

ø(C) MARKET RENTS.—Comparable market rents for the 

market area.¿

* * * * * * *

McKINNEY-VENTO HOMELESS ASSISTANCE ACT

SECTION 1. NATIONAL GOAL OF ENDING HOMELESSNESS. 

The Congress hereby declares that it is a national goal to end 

homelessness within 10 years after the enactment of the Housing Affordability for America Act of 2002.

165

TITLE I—GENERAL PROVISIONS 

SECTION 101. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘McKinney-Vento 

Homeless Assistance Act’’. 

(b) TABLE OF CONTENTS.—

Sec. 1. National goal of ending homelessness.

TITLE I—GENERAL PROVISIONS 

Sec. 101. Short title and table of contents. 

* * * * * * *

øTITLE II—INTERAGENCY COUNCIL ON THE HOMELESS¿

TITLE II—UNITED STATES INTERAGENCY COUNCIL ON HOMELESSNESS

Sec. 201. Establishment. 

* * * * * * *

TITLE IV—HOUSING ASSISTANCE 

øSubtitle A—Comprehensive Homeless Assistance Plan¿

Subtitle A—General Provisions

Sec. 401. Housing affordability strategy.

Sec. 402. Discharge coordination policy. 

Sec. 403. Set-aside for permanent housing.

* * * * * * *

Subtitle D—Safe Havens for Homeless Individuals Demonstration Program 

Sec. 431. Establishment of demonstration. 

* * * * * * *

øSec. 443. Administrative provisions.¿

Sec. 443. Environmental review.

* * * * * * *

SEC. 102. FINDINGS AND PURPOSE. 

(a) * * *

(b) PURPOSE.—It is the purpose of this Act— (1) to establish øan Interagency Council on the Homeless¿

the United States Interagency Council on Homelessness; 

* * * * * * *

øTITLE II—INTERAGENCY COUNCIL ON 

THE HOMELESS¿

TITLE II—UNITED STATES INTERAGENCY COUNCIL ON HOMELESSNESS

SEC. 201. ESTABLISHMENT. 

There is established in the executive branch an independent establishment to be known as the øInteragency Council on the Homeless¿ United States Interagency Council on Homelessness. 

* * * * * * *

SEC. 207. DEFINITIONS. 

For purposes of this title: 

166

(1) The term ‘‘Council’’ means the øInteragency Council on 

the Homeless¿ United States Interagency Council on Homelessness established in section 201. 

* * * * * * *

øSEC. 208. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated to carry out this title 

$1,500,000 for fiscal year 1993 and $1,563,000 for fiscal year 1994.¿

SEC. 208. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this title 

such sums as may be necessary for each of fiscal years 2003 and 

2004.

* * * * * * *

TITLE III—FEDERAL EMERGENCY MANAGEMENT FOOD AND SHELTER PROGRAM 

* * * * * * *

Subtitle C—General Provisions 

* * * * * * *

øSEC. 322. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated to carry out this title 

$180,000,000 for fiscal year 1993 and $187,560,000 for fiscal year 

1994.¿

SEC. 322. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this title 

such sums as may be necessary for each of fiscal years 2003 and 

2004.

* * * * * * *

TITLE IV—HOUSING ASSISTANCE 

øSubtitle A—Comprehensive Homeless Assistance 

Plan¿

Subtitle A—General Provisions

* * * * * * *

SEC. 403. SET-ASIDE FOR PERMANENT HOUSING. 

Notwithstanding any other provision of this title, of the aggregate 

amount made available for assistance under this title for any fiscal 

year, not less than 30 percent shall be used only for permanent 

housing activities for homeless persons. Amounts made available 

under section 429(d) or 463(c) for renewals of contracts for permanent housing shall be disregarded for purposes of the preceding sentence. For purposes of this section, the term ‘‘permanent housing acVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00166 Fmt 6659 Sfmt 6603 E:\HR\OC\HR640P2.107 HR640P2
167

tivities’’ includes permanent housing designed primarily to serve 

homeless families with children.

Subtitle B—Emergency Shelter Grants 

Program 

* * * * * * *

øSEC. 417. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated to carry out this subtitle $138,000,000 for fiscal year 1993 and $143,796,000 for fiscal 

year 1994.¿

SEC. 417. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this subtitle 

such sums as may be necessary for each of fiscal years 2003 and 

2004.

* * * * * * *

Subtitle C—Supportive Housing Program 

* * * * * * *

SEC. 423. ELIGIBLE ACTIVITIES. 

(a) IN GENERAL.—The Secretary may provide any project with 

one or more of the following types of assistance under this subtitle: 

(1) ACQUISITION AND REHABILITATION.—A grantø, in an 

amount not to exceed $200,000,¿ for the acquisition, rehabilitation, or acquisition and rehabilitation, of an existing structure 

(including a small commercial property or office space) to provide supportive housing other than emergency shelter or to 

provide supportive servicesø; except that the Secretary may increase the dollar limitation under this sentence to not more 

than $400,000 for areas that the Secretary finds have high acquisition and rehabilitation costs¿. The repayment of any outstanding debt owed on a loan made to purchase an existing 

structure shall be considered to be a cost of acquisition eligible 

for a grant under this paragraph if the structure was not used 

as supportive housing, or to provide supportive services, before 

the receipt of assistance. 

(2) NEW CONSTRUCTION.—A grantø, in an amount not to exceed $400,000,¿ for new construction of a structure to provide 

supportive housing. 

* * * * * * *

SEC. 429. AUTHORIZATION OF APPROPRIATIONS. 

ø(a) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to carry out this subtitle $204,000,000 for fiscal 

year 1993 and $212,568,000 for fiscal year 1994.¿

(a) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this subtitle (not including activities 

funded pursuant to subsection (d) of this section) such sums as may 

be necessary for each of fiscal years 2003 and 2004. 

* * * * * * *

168

(d) FUNDING OF RENEWALS.— (1) IN GENERAL.—For fiscal year 2003 and fiscal years thereafter, assistance under this subtitle may be funded using 

amounts appropriated for section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f). 

(2) AUTHORIZATION OF APPROPRIATIONS.—In addition to any 

amounts otherwise made available for assistance under section 

8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), 

there are authorized to be appropriated such sums as may be 

necessary for each of fiscal years 2003 and 2004 for the renewal 

of contracts for permanent housing activities under this subtitle. 

Any such renewals shall be made only for a term of one year.

* * * * * * *

Subtitle E—Miscellaneous Provisions 

SEC. 441. SECTION 8 ASSISTANCE FOR SINGLE ROOM OCCUPANCY 

DWELLINGS. 

ø(a) INCREASE IN BUDGET AUTHORITY.—The budget authority 

available under section 5(c) of the United States Housing Act of 

1937 for assistance under section 8(e)(2) of such Act is authorized 

to be increased by $105,000,000 on or after October 1, 1992, and 

by $109,410,000 on or after October 1, 1993.¿

(a) INCREASE IN BUDGET AUTHORITY.—The budget authority 

available under section 5(c) of the United States Housing Act of 

1937 for assistance under section 8(e)(2) of such Act (as in effect 

pursuant to section 289(b)(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12839(b)(2)) is authorized to be increased by such sums as may be necessary on or after each of October 1, 2002, and October 1, 2003.

* * * * * * *

Subtitle F—Shelter Plus Care Program 

PART I—GENERAL REQUIREMENTS

* * * * * * *

SEC. 456. REQUIRED AGREEMENTS. 

(a) APPROVAL OF ASSISTANCE.—The Secretary may not approve 

assistance under this subtitle unless the applicant agrees—

(1) * * *

* * * * * * *

(b) CONDITIONS OF RENEWAL.—The Secretary may not provide assistance under this subtitle for any housing previously assisted 

under this subtitle unless the unit of general local government in 

which such project is located certifies that the housing complies 

with such housing safety and quality standards, as the Secretary 

shall establish and the Secretary reviews and approves such certification.

* * * * * * *

169

SEC. 463. AUTHORIZATION OF APPROPRIATIONS. 

(a) IN GENERAL.—øFor purposes of the housing programs under this subtitle, there are authorized to be appropriated $266,550,000 

for fiscal year 1993 and $277,745,100 for fiscal year 1994.¿ For 

purposes of the housing programs under this subtitle, there are authorized to be appropriated to carry out this subtitle (not including 

activities funded pursuant to subsection (c) of this section) such 

sums as may be necessary for each of fiscal years 2003 and 2004.

Of any amount appropriated in any fiscal year to carry out this 

subtitle—

(1) * * *

* * * * * * *

(c) FUNDING OF RENEWALS.— (1) IN GENERAL.—For fiscal year 2003 and fiscal years thereafter, assistance under this subtitle may be funded using 

amounts appropriated for section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f). 

(2) AUTHORIZATION OF APPROPRIATIONS.—In addition to any 

amounts otherwise made available for assistance under section 

8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), 

there are authorized to be appropriated such sums as may be 

necessary for each of fiscal years 2003 and 2004 for the renewal 

of contracts under this subtitle. Any such renewals shall be 

made only for a term of one year.

* * * * * * *

TITLE V—IDENTIFICATION AND USE OF 

SURPLUS FEDERAL PROPERTY 

SEC. 501. USE OF UNUTILIZED AND UNDERUTILIZED PUBLIC BUILDINGS AND REAL PROPERTY TO ASSIST THE HOMELESS. 

(a) * * *

* * * * * * *

(c) PUBLICATION OF PROPERTIES.—(1) * * *

(2)(A) No later than 15 days after the last day of the 45-day period provided for under subsection (b)(1), the Secretary shall transmit a copy of the list of available properties published under paragraph (1)(A)(ii) to the øInteragency Council on the Homeless¿

United States Interagency Council on Homelessness. The Council 

shall immediately distribute to all State and regional homeless coordinators area-relevant portions of the list. 

* * * * * * *

(d) HOLDING PERIOD.—(1) * * *

* * * * * * *

(3) Property that is reviewed by the Secretary under subsection 

(a) and that is not identified by the Secretary as being suitable for 

use to assist the homeless may not be made available for any other 

purpose for 20 days after the determination of unsuitability to 

allow for review of the determination at the request of the representative of the homeless. The Secretary shall disseminate immediately this information to the regional offices of the Department 

of Housing and Urban Development and to the øInteragency CounVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00169 Fmt 6659 Sfmt 6601 E:\HR\OC\HR640P2.107 HR640P2
170

cil on the Homeless¿ United States Interagency Council on Homelessness. 

* * * * * * *

NATIVE AMERICAN HOUSING AND SELFDETERMINATION ACT OF 1996

* * * * * * *

TITLE I—BLOCK GRANTS AND GRANT 

REQUIREMENTS 

SEC. 101. BLOCK GRANTS. 

(a) * * *

* * * * * * *

(h) ADMINISTRATIVE AND PLANNING EXPENSES.—The Secretary 

shall, by regulation, authorize each recipient to use a percentage 

of any grant amounts received under this Act for comprehensive 

housing and community development planning activities and for 

any reasonable administrative and planning expenses of the recipient relating to carrying out this Act and activities assisted with 

such amounts, which may include costs for salaries of individuals 

engaged in administering and managing affordable housing activities assisted with grant amounts provided under this Act and expenses of preparing an Indian housing plan under section 102. 

* * * * * * *

øSEC. 108. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated for grants under this 

title such sums as may be necessary for each of fiscal years 1998, 

1999, 2000, and 2001. This section shall take effect on the date of 

the enactment of this Act.¿

SEC. 108. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated for grants under this title 

such sums as may be necessary for each of fiscal years 2003 and 

2004.

* * * * * * *

TITLE VI—FEDERAL GUARANTEES FOR 

FINANCING FOR TRIBAL HOUSING

ACTIVITIES 

* * * * * * *

SEC. 605. LIMITATIONS ON AMOUNT OF GUARANTEES. 

(a) AGGREGATE FISCAL YEAR LIMITATION.—Notwithstanding any 

other provision of law and subject only to the absence of qualified 

applicants or proposed activities and to the authority provided in 

this title, to the extent approved or provided in appropriations 

Acts, the Secretary may enter into commitments to

guarantee notes and obligations under this title with an aggregate 

171

principal amount not to exceed $400,000,000 for each of fiscal years 

ø1997, 1998, 1999, 2000, and 2001¿ 2003 and 2004. (b) AUTHORIZATION OF APPROPRIATIONS FOR CREDIT SUBSIDY.— There are authorized to be appropriated to cover the costs (as such 

term is defined in section 502 of the Congressional Budget Act of 

1974) of guarantees under this title such sums as may be necessary 

for each of fiscal years ø1997, 1998, 1999, 2000, and 2001¿ 2003 

and 2004. 

* * * * * * *

TITLE VII—OTHER HOUSING 

ASSISTANCE FOR NATIVE AMERICANS 

* * * * * * *

SEC. 703. TRAINING AND TECHNICAL ASSISTANCE. 

There are authorized to be appropriated for assistance for a national organization representing Native American housing interests 

for providing training and technical assistance to Indian housing 

authorities and tribally designated housing entities such sums as 

may be necessary for each of fiscal years ø1997, 1998, 1999, 2000, 

and 2001¿ 2003 and 2004. 

* * * * * * *

SECTION 501 OF THE AMERICAN HOMEOWNERSHIP AND 

ECONOMIC OPPORTUNITY ACT OF 2000

SEC. 501. LANDS TITLE REPORT COMMISSION. 

(a) ESTABLISHMENT.—øSubject to sums being provided in advance in appropriations Acts, there¿ There is established a Commission to be known as the Lands Title Report Commission (hereafter in this section referred to as the ‘‘Commission’’) to facilitate 

home loan mortgages on Indian trust lands. The Commission will 

be subject to oversight by the Committee on Banking and Financial 

Services of the House of Representatives and the Committee on 

Banking, Housing, and Urban Affairs of the Senate. 

(b) MEMBERSHIP.—

(1) APPOINTMENT.—The Commission shall be composed of 12 

members, appointed not later than 90 days after the date of 

the enactment of øthis Act¿ the American Indian Lands Title 

Report Commission Corrections Act as follows: 

(A) * * *

* * * * * * *

(c) INITIAL MEETING.—The Chairperson of the Commission shall 

call the initial meeting of the Commission. Such meeting shall be 

held within 30 days after øthe Chairperson of the Commission determines that sums sufficient for the Commission to carry out its 

duties under this Act have been appropriated for such purpose¿ the 

completion of the appointment of the initial members pursuant to 

subsection (b)(1). 

* * * * * * *

172

SECTION 972 OF THE HIGHER EDUCATION 

AMENDMENTS OF 1998

øSEC. 972. GNMA GUARANTEE FEE. 

ø(a) IN GENERAL.—Section 306(g)(3)(A) of the National Housing 

Act (12 U.S.C. 1721(g)(3)(A)) is amended by striking ‘‘No fee or 

charge’’ and all that follows through ‘‘States)’’ and inserting ‘‘The 

Association shall assess and collect a fee in an amount equal to 

nine basis points’’. 

ø(b) EFFECTIVE DATE.—The amendment made by this section 

shall take effect on October 1, 2004.¿

SECTION 4 OF THE DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT ACT 

UNDER SECRETARY AND OTHER OFFICERS AND OFFICES

SEC. 4. (a) * * *

* * * * * * *

(g)(1) The Secretary shall designate a single office of the Department in existence on the date of the enactment of the Housing Affordability for America Act of 2002 to establish, coordinate, and administrate all individual program requirements, standards, and 

performance measures under programs and laws administered by 

the Department that relate to housing counseling, homeownership 

counseling, mortgage-related counseling, and rental housing counseling, including the requirements, standards, and performance 

measures relating to housing counseling pursuant to the provisions 

of law specified in paragraph (2). To the extent that the Secretary 

is authorized by law to provide housing counseling services, the Secretary, in such circumstances or under such programs as the Secretary considers appropriate, may authorize such office to provide 

such housing counseling services. 

(2) The provisions specified in this paragraph are as follows: 

(A) Section 105(a)(20) of the Housing and Community Development Act of 1974 (42 U.S.C. 42 5305(a)(20)). 

(B) In the United States Housing Act of 1937—

(i) section 9(e) (42 U.S.C. 1437g(e)); 

(ii) section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D)); 

(iii) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D)); 

(iv) section 23(c)(4) (42 U.S.C. 1437u(c)(4)); 

(v) section 32(e)(4) (42 U.S.C. 1437z–4(e)(4)); 

(vi) section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); 

(vii) sections 302(b)(6) and 303(b)(7) (42 U.S.C. 1437aaa–

1(b)(6), 1437aaa–2(b)(7)); and 

(viii) section 304(c)(4) (42 U.S.C. 1437aaa–3(c)(4)). 

(C) Section 302(a)(4) of the American Homeownership and 

Economic Opportunity Act of 2000 (42 U.S.C. 1437f note). 

(D) Sections 233(b)(2) and 258(b) of the Cranston-Gonzalez 

National Affordable Housing Act (42 U.S.C. 12773(b)(2), 

12808(b)). 

(E) Sections 101(e) and 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701w(e), 1701x). 

173

(F) Section 220(d)(2)(G) of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 

4110(d)(2)(G)). 

(G) Sections 422(b)(6), 423(b)(7), 424(c)(4), 442(b)(6), and 

443(b)(6) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12872(b)(6), 12873(b)(7), 12874(c)(4), 

12892(b)(6), and 12893(b)(6)). 

(H) Section 491(b)(1)(F)(iii) of the McKinney-Vento Homeless 

Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii)). 

(I) Sections 202(3) and 810(b)(2)(A) of the Native American 

Housing and Self-Determination Act of 1996 (25 U.S.C. 

4132(3), 4229(b)(2)(A)). 

(J) In the National Housing Act— (i) in section 203 (12 U.S.C. 1709), the penultimate undesignated paragraph of paragraph (2) of subsection (b), 

subsection (c)(2)(A), and subsection (r)(4); 

(ii) subsections (a) and (c)(3) of section 237 (12 U.S.C. 

1715z–2); and 

(iii) subsections (d)(2)(B) and (m)(1) of section 255 (12 

U.S.C. 1715z–20). 

(K) Section 502(h)(4)(B) of the Housing Act of 1949 (42 U.S.C. 

1472(h)(4)(B)). 

(L) Section 508 of the Housing and Urban Development Act 

of 1970 (12 U.S.C. 1701z–7).

SECTION 11 OF THE HOUSING OPPORTUNITY PROGRAM 

EXTENSION ACT OF 1996

SEC. 11. ASSISTANCE FOR SELF-HELP HOUSING PROVIDERS. 

(a) * * *

* * * * * * *

(d) USE.— (1) * * *

* * * * * * *

(3) LIMITATION ON ELIGIBLE EXPENSES.—The amount from 

grants under this section that is used for eligible expenses (as 

such term is defined under paragraph (2)) in connection with 

developing dwelling units described in paragraph (1) may not 

exceed an average of $15,000 per dwelling unit developed by the 

grantee organization or consortium, except that the Secretary 

may increase such $15,000 amount for any particular geographic region that the Secretary determines has elevated costs 

of land acquisition or infrastructure improvement.

* * * * * * *

(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) * * *

* * * * * * *

(5) provide that the Secretary shall recapture any grant 

amounts provided to the organization or consortia that are not 

used within 24 months after such amounts are first disbursed 

to the organization or consortia, except that such period shall 

174

be 36 months in the case of grant amounts from amounts made 

available for fiscal year 1996 to carry out this section, and in 

the case of a grant amounts provided to a local affiliate of the 

organization or consortia that is developing five or more dwellings in connection with such grant amounts, and except that 

the Secretary may extend such period for any organization or 

consortia to not more than 48 months in any case in which the 

Secretary determines, in the sole discretion of the Secretary, 

that extraordinary circumstances (including a national emergency) warrant such extension; and 

* * * * * * *

(j) FULFILLMENT OF GRANT AGREEMENT.—If the Secretary determines that an organization or consortia awarded a grant under this 

section has not, within 24 months after grant amounts are first 

made available to the organization or consortia (or, in the case of 

grant amounts from amounts made available for fiscal year 1996 

to carry out this section and grant amounts provided to a local affiliate of the organization or consortia that is developing five or 

more dwellings in connection with such grant amounts, within 36 

months), 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. The Secretary may extend the period otherwise applicable under this subsection for any organization 

or consortia to not more than 48 months in any case in which the 

Secretary determines, in the sole discretion of the Secretary, that extraordinary circumstances (including a national emergency) warrant such extension.

* * * * * * *

(p) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this section such sums as may be necessary for øfiscal year 2001¿ each of fiscal years 2003 and 2004. 

* * * * * * *

SECTION 105 OF THE HOUSING COMMUNITY 

DEVELOPMENT ACT OF 1974

ELIGIBLE ACTIVITIES

SEC. 105. (a) Activities assisted under this title may include 

only—

(1) * * *

* * * * * * *

(13) payment of reasonable administrative costs related to 

establishing and administering federally approved enterprise 

zones and renewal communities and payment of reasonable administrative costs and carrying charges related to (A) administering the HOME program under title II of the CranstonGonzalez National Affordable Housing Act; and (B) the planning and execution of community development and housing activities, including the provision of information and resources to 

residents of areas in which community development and housVerDate Sep 04 2002 02:47 Sep 22, 2002 Jkt 099006 PO 00000 Frm 00174 Fmt 6659 Sfmt 6601 E:\HR\OC\HR640P2.107 HR640P2
175

ing activities are to be concentrated with respect to the planning and execution of such activities, and including the carrying out of activities as described in section 701(e) of the 

Housing Act of 1954 on the date prior to the date of enactment 

of the Housing and Community Development Amendments of 

1981; 

* * * * * * *

(22) provision of assistance to public and private organizations, agencies, and other entities (including nonprofit and forprofit entities) to enable such entities to facilitate economic development by— (A) * * *

* * * * * * *

(C) providing general support (such as peer support programs and counseling) to owners of microenterprises and 

persons developing microenterprises; øand¿

(23) activities necessary to make essential repairs and to pay 

operating expenses necessary to maintain the habitability of 

housing units acquired through tax foreclosure proceedings in 

order to prevent abandonment and deterioration of such housing in primarily low- and moderate-income neighborhoodsø.¿;

(25) lead-based paint hazard evaluation and reduction, as defined in section 1004 of the Residential Lead-Based Paint Hazard Reduction Act of 1992ø.¿;

(26) the construction or improvement of tornado- or stormsafe shelters for manufactured housing parks and residents of 

other manufactured housing, the acquisition of real property for 

sites for such shelters, and the provision of assistance (including loans and grants) to nonprofit or for-profit entities (including owners of such parks) for such construction, improvement, 

or acquisition, except that a shelter assisted with amounts made 

available pursuant to this paragraph shall be located in a 

neighborhood consisting predominantly of persons of low and 

moderate income, except that a shelter assisted with amounts 

made available pursuant to this paragraph may not be made 

available exclusively for use of the residents of a particular 

manufactured housing park or of other manufactured housing, 

but shall generally serve the residents of the area in which it 

is located; and 

(27) provision of direct assistance to facilitate and expand 

homeownership among uniformed employees (including policemen, firemen, and sanitation and other maintenance workers) 

of, and teachers who are employees of, the metropolitan city or 

urban county (or an agency or school district serving such city 

or county) receiving grant amounts under this title pursuant to 

section 106(b) or the unit of general local government (or an 

agency or school district serving such unit) receiving such grant 

amounts pursuant to section 106(d), except that—

(A) such assistance may only be provided on behalf of 

such employees who are first-time homebuyers under the 

meaning given such term in section 104(14) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 

12704(14)), except that, for purposes of this paragraph, 

such section shall be applied by substituting ‘‘section 

176

105(a)(27) of the Housing and Community Development Act 

of 1974’’ for ‘‘title II’’; 

(B) notwithstanding section 102(a)(20)(B) or any other 

provision of this title, such assistance may be provided on 

behalf of such employees whose family incomes do not exceed—

(i) 115 percent of the median income of the area involved, as determined by the Secretary with adjustments for smaller and larger families; or 

(ii) with respect only to areas that the Secretary determines have high housing costs, taking into consideration median house prices and median family incomes 

for the area, 150 percent of the median income of the 

area involved, as determined by the Secretary with adjustments for smaller and larger families; 

(C) such assistance shall be used only for acquiring principal residences for such employees, in a manner that involves obligating amounts with respect to any particular 

mortgage over a period of 1 year or less, by—

(i) providing amounts for downpayments on mortgages; 

(ii) paying reasonable closing costs normally associated with the purchase of a residence; 

(iii) obtaining pre- or post-purchase counseling relating to the financial and other obligations of homeownership; or 

(iv) subsidizing mortgage interest rates; and 

(D) any residence purchased using assistance provided 

under this paragraph shall be subject to restrictions on resale that are—

(i) established by the metropolitan city, urban county, or unit of general local government providing such 

assistance; and 

(ii) determined by the Secretary to be appropriate to 

comply with subparagraphs (A) and (B) of section 

215(b)(3) of the Cranston-Gonzalez National Affordable 

Housing Act (42 U.S.C. 12745(b)(3)), except that, for 

purposes of this paragraph, such subparagraphs shall 

be applied by substituting ‘‘section 105(a)(27) of the 

Housing and Community Development Act of 1974’’ for 

‘‘this title’’;

* * * * * * *

(c)(1)***

* * * * * * *

(5) HOMEOWNERSHIP ASSISTANCE FOR MUNICIPAL EMPLOYEES.—

Notwithstanding any other provision of this title, any assisted activity described in subsection (a)(27) of this section shall be considered, 

for purposes of this title, to benefit persons of low and moderate income and to be directed toward the objective under section 101(c)(3).

* * * * * * *

177

SECTION 3 OF THE HOUSING AND URBAN 

DEVELOPMENT ACT OF 1968

SEC. 3. ECONOMIC OPPORTUNITIES FOR LOW- AND VERY LOW-INCOME PERSONS. 

(a) * * *

* * * * * * *

(e) REQUIREMENT FOR HIRING OF NEW EMPLOYEES.— (1) THIRTY PERCENT REQUIREMENT.—It shall be a condition of 

any contract awarded by a public or Indian housing agency for 

work to be performed in connection with development assistance 

provided from the Capital Fund under section 9(d) of the 

United States Housing Act of 1937, or from the Operating Fund 

under section 9(e) of such Act, that, except as provided in paragraph 2(B), a minimum of 30 percent of all new employees 

hired by a contractor for work in connection with such contract 

will be low- or very low-income persons. 

(2) COMPLIANCE.—As a condition of any contract awarded for 

the work described in paragraph (1), any contractor awarded 

such a contract shall— (A)(i) immediately before beginning work under such contract, submit evidence to the satisfaction of the public or Indian housing agency showing that a minimum of 30 percent of all new employees hired for work in connection with 

such contract are low- or very low-income persons; and 

(ii) submit evidence to the satisfaction of the public or Indian housing agency showing that a minimum of 30 percent of all subsequently hired new employees hired for work 

in connection with such contract are low- or very low-income persons; or 

(B) if such contractor cannot meet the requirement imposed by paragraph (1)— (i) submit evidence to the satisfaction of the public or 

Indian housing agency showing that such contractor 

has given notice of such contract to the one-stop delivery system for the area which the housing subject to the 

contract is located, including the particular skills and 

qualifications needed by potential new employees for 

work under such contract; and 

(ii) provide to the public or Indian housing agency 

evidence, as the Secretary shall by regulation require, 

sufficient to show that no newly hired employees who 

are not low- or very low-income persons are performing 

work in place of skilled low- or very low-income persons who were provided by either the public or Indian 

housing agency or by the one-stop delivery system. 

(3) TRAINING.—Any contractor awarded a contract for the 

work described in paragraph (1) may not provide on-the-job 

training to any new employee for work under such contract unless such new employee is a low- or very low-income person.

ø(e)¿ (f) DEFINITIONS.—For the purposes of this section the following definitions shall apply: 

(1) * * *

* * * * * * *

178

(3) ONE-STOP DELIVERY SYSTEM.—The term ‘‘one-stop delivery 

system’’ has the meaning given that term in section 134(c) of the 

Workforce Investment Act of 1998 (29 U.S.C. 2864(c)).

ø(f)¿ (g) COORDINATION WITH OTHER FEDERAL AGENCIES.—The 

Secretary shall consult with the Secretary of Labor, the Secretary 

of Health and Human Services, the Secretary of Commerce, the Administrator of the Small Business Administration, and such other 

Federal agencies as the Secretary determines are necessary to 

carry out this section. 

ø(g)¿ (h) REGULATIONS.—Not later than 180 days after the date 

of enactment of the National Affordable Housing Act Amendments 

of 1992, the Secretary shall promulgate regulations to implement 

this section. 

SECTION 515 OF THE HOUSING ACT OF 1949

DIRECT AND INSURED LOANS TO PROVIDE HOUSING AND RELATED

FACILITIES FOR ELDERLY PERSONS AND FAMILIES IN RURAL AREAS

SEC. 515. (a)***

* * * * * * *

ø(h) PROJECT TRANSFERS.—After¿

(h) PROJECT TRANSFERS.— (1) LIMITATION.—After the date of the enactment of the Act 

entitled ‘‘An Act making appropriations for Agriculture, Rural 

Development, Food and Drug Administration, and Related 

Agencies programs for the fiscal year ending September 30, 

1997, and for other purposes’’, the ownership or control 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 further the provision of housing and related facilities for low-income families or persons and would be in the 

best interests of residents and the Federal Government.

(2) TRANSFER AND RENOVATION OF EXISTING PROJECTS.— (A) TRANSFER.—In carrying out this Act, the Secretary 

should encourage the transfer of ownership or control of 

projects for which a loan is made or insured under this section to nonprofit organizations and local housing authorities (including public housing agencies). 

(B) RENOVATION.—In carrying out this Act, the Secretary 

should encourage, and give priority in funding, to the renovation of existing projects for which a loan is made or insured under this section, subsequent to transfer of such 

projects to nonprofit organizations and housing authorities.

* * * * * * *

(179)

DISSENTING VIEWS 

H.R. 3995, the Housing Affordability for America Act exceeds, 

Congress’ constitutional boundaries and interferes with and distorts the operation of the frene market. Instead of expanding unconstitutional federal power, Congress should focus its energies on 

dismantling the federal housing bureaucracy so the American people can control housing resources and use the free market to meet 

their demands for affordable housing. 

The premise underlying H.R. 3995 is that the federal government 

is capable of determining the proper level of ‘‘affordable’’ housing. 

However, as the great economist Ludwig Von Mises pointed out, 

questions of the proper allocation of resources for housing and 

other goods should be determined by consumer preference in the 

free market. Resources removed from the market and distributed 

according to the preferences of government politicians and bureaucrats are not devoted to their highest-valued use. Thus, government interference in the economy results in a loss of economic efficiency and, more importantly, a lower standard of living for all citizens. 

H.R. 3995 takes resources away from private citizens, through 

confiscatory taxation, and uses them for politically-favored housing 

projects. Government subsidization of housing leads to an excessive 

allocation of resources to the housing market. Thus, thanks to government policy, resources that would have been devoted to education, transportation, or some other good desired by consumers, 

will instead be devoted to housing. Proponents of this bill ignore 

the socially-beneficial uses the monies devoted to housing might 

have been put to had those resources been left in the hands of private citizens. 

At the very least, federal housing programs should provide the 

maximum latitude for state and local governments to develop the 

type of housing programs best suited to their citizens’ unique 

needs. However, according to the National Council of State Housing Agencies and the National League of Cities, H.R. 3995 decreases state and local control over housing programs. This is because H.R. 3995 creates new mandates in block-grant programs 

thus reducing the ability of state and local authorities to use federal funds to meet their own unique needs. Forcing state and local 

officials to use housing funds to obey the dictates of DC-based politicians, who cannot know the unique conditions of every housing 

market in the country, does not seem like a sound housing policy. 

Finally, while I know this argument is unlikely to have much effect on my colleagues, I must point out that Congress has no constitutional authority to take money from one American and redistribute it to another. Legislation such as H.R. 3995, which takes 

tax money from some Americans to give to others whom Congress 

has determined are worthy, is thus blatantly unconstitutional. 

180

I hope no one confuses my opposition to this bill as opposition to 

any Congressional actions to ensure more Americans have access 

to affordable housing. After all, one reason many Americans lack 

affordable housing is because taxes and regulations have made it 

impossible for builders to provide housing at a price that could be 

afforded by many lower-income Americans. Therefore Congress 

should cut taxes and regulations. A good start would be generous 

housing tax credits. Congress should also consider tax credits and 

regulatory relief of developers who provide housing for those with 

low-incomes. 

H.R. 3995 distorts the economy, reduces state and local authority 

over housing programs and violates constitutional prohibitions on 

income redistribution. A better way of guaranteeing an efficient 

housing market where everyone could meet their own needs for 

housing is for Congress to repeal taxes and programs that burden 

the housing industry and allow housing needs to be met by the free 

market. Therefore, I urge my colleagues to reject this bill and instead develop housing policies consistent with constitutional principles, the laws of economics, and respect for individual rights.

RON PAUL.

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