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103D CONGRESS

1ST SESSION H. R. 2914

To provide for the emergency disposition of multifamily housing projects

acquired by the Secretary of Housing and Urban Development, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 6, 1993

Mr. BAKER of Louisiana introduced the following bill; which was referred to

the Committee on Banking, Finance and Urban Affairs

A BILL

To provide for the emergency disposition of multifamily housing projects acquired by the Secretary of Housing and

Urban Development, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘FHA Multifamily

5 Housing Emergency Disposition Act of 1993’’.

6 SEC. 2. FINDINGS AND PURPOSE.

7 (a) FINDINGS.—The Congress finds that—

8 (1) the Department of Housing and Urban De9 velopment has a large and growing inventory of mul-
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1 tifamily housing projects owned by the Department

2 and multifamily housing projects subject to mort3 gages in foreclosure that are held by the Depart4 ment;

5 (2) the total number of such housing projects in

6 the inventory of the Department at the beginning of

7 fiscal year 1993 was 444 and is likely to increase to

8 742 by the end of fiscal year 1998;

9 (3) the Secretary of Housing and Urban Devel10 opment has estimated that the Department will lose

11 as much as $11,900,000,000 as a result of mortgage

12 foreclosures on multifamily housing projects insured

13 by the Department, which is equivalent to 25 per14 cent of the value of all mortgages insured under the

15 General Insurance Fund;

16 (4) the Department is not prepared to manage

17 an inventory of multifamily housing projects as large

18 as the inventory expected by the end of fiscal year

19 1993, resulting in increased holding and disposition

20 costs for such projects; and

21 (5) existing laws would require the attachment

22 of $7,000,000,000 of rental assistance in the form

23 of 15-year contracts under section 8 of the United

24 States Housing Act of 1937 to eliminate the backlog
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1 of multifamily housing projects in the inventory of

2 the Department.

3 (b) PURPOSE.—The purpose of this Act, therefore,

4 is—

5 (1) to declare that an emergency exists with re6 spect to the disposition of multifamily housing

7 projects in the inventory of the Department;

8 (2) to provide for flexibility in disposing of such

9 projects by removing some of the statutory require10 ments that impede the sale of such projects;

11 (3) to encourage assistance for residents of

12 such projects through means other than rental as13 sistance under section 8 of the United States Hous14 ing Act of 1937; and

15 (4) to maintain, to the maximum extent pos16 sible, the low-income character of such projects while

17 disposing of such projects in an economical and ex18 peditious manner.

19 SEC. 3. EMERGENCY PROVISIONS.

20 (a) AUTHORITY.—During the period in which the

21 property disposition emergency under this Act is in effect

22 pursuant to section 4, the Secretary of Housing and

23 Urban Development may dispose of any multifamily hous24 ing project in accordance with the provisions this Act.
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1 (b) APPLICABILITY OF SECTION 203 REQUIRE2 MENTS.—The provisions of section 203 of the Housing

3 and Community Development Amendments of 1978 shall

4 apply to the disposition of multifamily housing projects

5 under this Act, except to the extent that—

6 (1) any such provision is waived pursuant to

7 section 5 of this Act; or

8 (2) any such provision is inconsistent with any

9 provision of this Act, and then only to the extent of

10 such inconsistency.

11 The Secretary may determine whether inconsistencies re12 ferred to in paragraph (2) exist.

13 (c) REQUIREMENTS.—In disposing of any subsidized

14 or formerly subsidized multifamily housing project under

15 this Act, the Secretary shall, to the extent that budget

16 authority is available—

17 (1) enter into—

18 (A) a nonrenewable contract under section

19 8 of the United States Housing Act of 1937

20 having a term of not less than 60 months and

21 not more than 180 months that provides

22 project-based assistance for units in the project;

23 or

24 (B) annual contributions contracts with

25 the appropriate public housing agency to pro-
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1 vide tenant-based rental assistance under sec2 tion 8 of the United States Housing Act of

3 1937 for a total term, including renewals, of

4 not more than 180 months; and

5 (2) provide the assistance under paragraph (1)

6 on behalf of all of the very low-income families occu7 pying the project on the date the project is sold by

8 the Secretary (or such other prior date as the Sec9 retary may determine appropriate), except that the

10 Secretary may in addition provide such assistance to

11 other eligible low-income families occupying such a

12 project on such date if the Secretary determines that

13 such assistance is appropriate under market condi14 tions in the area in which the project is located.

15 (d) ALTERNATIVE REQUIREMENTS.—In lieu of, or in

16 addition to, the actions required under subsection (c), the

17 Secretary shall—

18 (1) seek to ensure, through means other than

19 assistance under such section 8, that rent charges

20 for units in the project remain affordable (as such

21 term is defined by the Secretary) for a reasonable

22 period of time determined by the Secretary;

23 (2) encourage the provision of assistance from

24 non-Federal sources to maintain the affordability of

25 rent charges for units in the project; and
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1 (3) encourage the sale of the project to a local

2 nonprofit organization.

3 (e) UNSUBSIDIZED PROJECTS.—In connection with

4 the disposition under this Act of a multifamily housing

5 project that is not a subsidized or formerly subsidized

6 project, the Secretary is not required to provide assistance

7 under section 8 of the United States Housing Act of 1937,

8 but the Secretary may take any of the actions specified

9 in subsection (d).

10 (f) ADDITIONAL ASSISTANCE.—In order to facilitate

11 the disposition of a multifamily housing project under this

12 Act, the Secretary may provide project-based assistance

13 under section 8 of the United States Housing Act of 1937

14 with respect to units for which such assistance is not re15 quired by this Act.

16 (g) NONRENTAL USES OF PROJECTS.—In disposing

17 of any multifamily housing project under this Act, the Sec18 retary may make the project or units in project available—

19 (1) for uses related to low-income housing other

20 than rental or cooperative use, such as low-income

21 homeownership opportunities, shelters for the home22 less, and office space for resident or housing-related

23 social services providers; and

24 (2) for any other use, if the Secretary, in con25 sultation with the local area-wide governing body,
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1 determines that such use will assist efforts to reduce

2 the geographic concentration of low-income housing

3 opportunities.

4 SEC. 4. DURATION OF EMERGENCY.

5 A property disposition emergency under this Act shall

6 be in effect during the period that—

7 (1) begins upon the enactment of this Act; and

8 (2) ends upon the conclusion of the third fiscal

9 year that begins after the date of the enactment of

10 this Act.

11 SEC. 5. WAIVER OF DISPOSITION PLAN REQUIREMENTS.

12 The Secretary may waive any of the provisions of sec13 tion 203(e) of the Housing and Community Development

14 Amendments of 1978 with respect to the disposition of

15 any multifamily housing project under this Act, as the

16 Secretary determines appropriate to expedite such disposi17 tion of multifamily housing projects.

18 SEC. 6. DEFINITIONS.

19 For purposes of this Act:

20 (1) MULTIFAMILY HOUSING PROJECT.—The

21 term ‘‘multifamily housing project’’ has the meaning

22 given the term in section 203(i) of the Housing and

23 Community Development Amendments of 1978.

24 (2) SUBSIDIZED PROJECT AND FORMERLY SUB25 SIDIZED PROJECT.—The terms ‘‘subsidized project’’
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1 and ‘‘formerly subsidized project’’ have the meanings

2 given the terms in section 203(i)(2) of the Housing

3 and Community Development Amendments of 1978,

4 except that, notwithstanding subparagraph (E) of

5 such section, such terms include multifamily housing

6 projects receiving project-based housing assistance

7 payments under section 8 of the United States

8 Housing Act of 1937 or under section 23 of the

9 United States Housing Act of 1937 (as in effect be10 fore January 1, 1975) for 50 percent or fewer of the

11 units in the project immediately prior to the assign12 ment of the mortgage on such project to, or acquisi13 tion of such mortgage by, the Secretary.

14 (3) LOW-INCOME AND VERY LOW-INCOME.—

15 The terms ‘‘low-income’’ and ‘‘very low-income’’

16 have the meanings given such terms in section 3(b)

17 of the United States Housing Act of 1937.

18 SEC. 7. CONFORMING AMENDMENT.

19 Section 203(i)(2)(E) of the Housing and Community

20 Development Amendments of 1978 (12 U.S.C. 1701z–

21 11(i)(2)(E)) is amended by inserting ‘‘tenant-based’’ be22 fore ‘‘certificates’’.

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