I

103D CONGRESS

2D SESSION H. R. 4067

To amend section 203 of the Housing and Community Development Amendments of 1978 to provide for the disposition of multifamily properties

owned by the Secretary of Housing and Urban Development, to provide

for other reforms in programs administered by the Secretary, and to

make certain technical amendments, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 17, 1994

Mr. GONZALEZ introduced the following bill; which was referred to the

Committee on Banking, Finance and Urban Affairs

A BILL

To amend section 203 of the Housing and Community Development Amendments of 1978 to provide for the disposition of multifamily properties owned by the Secretary

of Housing and Urban Development, to provide for other

reforms in programs administered by the Secretary, and

to make certain technical amendments, 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 AND TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Multifamily Property Disposition Reform Act of 1994’’.
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1 (b) TABLE OF CONTENTS.—

Sec. 1. Short title and table of contents.

TITLE I—MULTIFAMILY PROPERTY DISPOSITION REFORM

Sec. 101. Multifamily property disposition.

Sec. 102. Use of emergency assistance funds for residency in multifamily housing disposition projects.

Sec. 103. Repeal of State agency multifamily property disposition demonstration.

Sec. 104. Preventing mortgage defaults on multifamily housing projects.

Sec. 105. Interest rates on assigned mortgages.

Sec. 106. Authorization of appropriations.

TITLE II—OTHER PROGRAM REFORMS

Subtitle A—HOME Investment Partnerships Program

Sec. 201. Participation by State agencies or instrumentalities.

Sec. 203. Simplification of program-wide income targeting for rental housing.

Sec. 204. Homeownership units.

Sec. 205. Simplification of matching requirements.

Sec. 206. Repeal of separate audit requirement.

Sec. 207. Environmental review requirements.

Sec. 208. Use of CDBG funds for HOME program expenses.

Sec. 209. Flexibility of HOME program for disaster areas.

Sec. 210. Applicability and regulations.

Subtitle B—HOPE Homeownership Program

Sec. 221. Matching requirement under HOPE for homeownership of single

family homes program.

Subtitle C—Community Development Block Grants

Sec. 231. Section 108 eligible activities.

Sec. 232. Guarantee of obligations backed by section 108 loans.

Sec. 233. Flexibility of CDBG program for disaster areas.

TITLE III—TECHNICAL AMENDMENTS

Sec. 301. Definition of ‘‘families’’.

Sec. 302. Elimination of requirement to identify CIAP replacement needs.

Sec. 303. Project-based accounting.

Sec. 304. Operating subsidy adjustments for anticipated fraud recoveries.

Sec. 305. Environmental review provisions.

Sec. 306. Contract renewal for section 23 conversion projects.

Sec. 307. Correction of FHA multifamily mortgage limits.

Sec. 308. Amendments to FHA multifamily risk-sharing and housing finance

agency pilot programs.

Sec. 309. Subsidy layering review.
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1 TITLE I—MULTIFAMILY PROP2 ERTY DISPOSITION REFORM

3 SEC. 101. MULTIFAMILY PROPERTY DISPOSITION.

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

5 (1) the portfolio of multifamily housing project

6 mortgages insured by the FHA is severely troubled

7 and at risk of default, requiring the Secretary to in8 crease loss reserves from $5,500,000,000 in 1991 to

9 $11,900,000,000 in 1992 to cover estimated future

10 losses;

11 (2) the inventory of multifamily housing

12 projects owned by the Secretary has more than

13 quadrupled since 1989, and, by the end of 1994,

14 may exceed 69,000 units;

15 (3) the cost to the Federal Government of own16 ing and maintaining multifamily housing projects es17 calated to $288,000,000 in fiscal year 1993;

18 (4) the inventory of multifamily housing

19 projects subject to mortgages held by the Secretary

20 has increased dramatically, to more than 2,400

21 mortgages, and approximately half of these mort22 gages, with approximately 219,000 units, are delin23 quent;

24 (5) the inventory of insured and formerly in25 sured multifamily housing projects is deteriorating,
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1 potentially endangering tenants and neighborhoods;

2 and

3 (6) the current statutory framework governing

4 the disposition of multifamily housing projects effec5 tively impedes the Government’s ability to dispose of

6 properties, protect tenants, and ensure that projects

7 are maintained over time.

8 (b) MANAGEMENT AND DISPOSITION OF MULTIFAM9 ILY HOUSING PROJECTS.—Section 203 of the Housing

10 and Community Development Amendments of 1978 (12

11 U.S.C. 1701z–11) is amended to read as follows:

12 ‘‘SEC. 203. MANAGEMENT AND DISPOSITION OF MULTIFAM13 ILY HOUSING PROJECTS.

14 ‘‘(a) GOALS.—The Secretary of Housing and Urban

15 Development shall manage or dispose of multifamily hous16 ing projects that are owned by the Secretary or that are

17 subject to a mortgage held by the Secretary in a manner

18 that—

19 ‘‘(1) is consistent with the National Housing

20 Act and this section;

21 ‘‘(2) will protect the financial interests of the

22 Federal Government; and

23 ‘‘(3) will, in the least costly fashion among rea24 sonable available alternatives, address the goals of—
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1 ‘‘(A) preserving certain housing so that it

2 can remain available to and affordable by low3 income persons;

4 ‘‘(B) preserving and revitalizing residential

5 neighborhoods;

6 ‘‘(C) maintaining existing housing stock in

7 a decent, safe, and sanitary condition;

8 ‘‘(D) minimizing the involuntary displace9 ment of tenants;

10 ‘‘(E) maintaining housing for the purpose

11 of providing rental housing, cooperative hous12 ing, and homeownership opportunities for low13 income persons;

14 ‘‘(F) minimizing the need to demolish mul15 tifamily housing projects;

16 ‘‘(G) supporting local fair housing strate17 gies; and

18 ‘‘(H) disposing of such projects in a man19 ner consistent with local housing market condi20 tions.

21 The Secretary, in determining the manner in which a

22 project is to be managed or disposed of, may balance com23 peting goals relating to individual projects in a manner

24 that will further the purposes of this section.

25 ‘‘(b) DEFINITIONS.—For purposes of this section:
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1 ‘‘(1) MULTIFAMILY HOUSING PROJECT.—The

2 term ‘multifamily housing project’ means any multi3 family rental housing project which is, or prior to

4 acquisition by the Secretary was, assisted or insured

5 under the National Housing Act, or was subject to

6 a loan under section 202 of the Housing Act of

7 1959.

8 ‘‘(2) SUBSIDIZED PROJECT.—The term ‘sub9 sidized project’ means a multifamily housing project

10 that, immediately prior to the assignment of the

11 mortgage on such project to, or the acquisition of

12 such mortgage by, the Secretary, was receiving any

13 of the following types of assistance:

14 ‘‘(A) Below market interest rate mortgage

15 insurance under the proviso of section

16 221(d)(5) of the National Housing Act.

17 ‘‘(B) Interest reduction payments made in

18 connection with mortgages insured under sec19 tion 236 of the National Housing Act.

20 ‘‘(C) Direct loans made under section 202

21 of the Housing Act of 1959.

22 ‘‘(D) Assistance in the form of—

23 ‘‘(i) rent supplement payments under

24 section 101 of the Housing and Urban De25 velopment Act of 1965,
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1 ‘‘(ii) additional assistance payments

2 under section 236(f)(2) of the National

3 Housing Act,

4 ‘‘(iii) housing assistance payments

5 made under section 23 of the United

6 States Housing Act of 1937 (as in effect

7 before January 1, 1975), or

8 ‘‘(iv) housing assistance payments

9 made under section 8 of the United States

10 Housing Act of 1937 (excluding payments

11 made for tenant-based assistance under

12 section 8),

13 if (except for purposes of section 183(c) of the

14 Housing and Community Development Act of

15 1987) such assistance payments are made to

16 more than 50 percent of the units in the

17 project.

18 ‘‘(3) FORMERLY SUBSIDIZED PROJECT.—The

19 term ‘formerly subsidized project’ means a multi20 family housing project owned by the Secretary that

21 was a subsidized project immediately prior to its

22 acquisition by the Secretary.

23 ‘‘(4) UNSUBSIDIZED PROJECT.—The term

24 ‘unsubsidized project’ means a multifamily housing
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1 project owned by the Secretary that is not a sub2 sidized project or a formerly subsidized project.

3 ‘‘(5) AFFORDABLE.—A unit shall be considered

4 affordable if—

5 ‘‘(A) for units occupied—

6 ‘‘(i) by very low-income families, the

7 rent does not exceed 30 percent of 50 per8 cent of the area median income, as deter9 mined by the Secretary, with adjustments

10 for smaller and larger families; and

11 ‘‘(ii) by low-income families other

12 than very low-income families, the rent

13 does not exceed 30 percent of 80 percent

14 of the area median income, as determined

15 by the Secretary, with adjustments for

16 smaller and larger families; or

17 ‘‘(B) the unit, or the family residing in the

18 unit, is receiving assistance under section 8 of

19 the United States Housing Act of 1937.

20 ‘‘(6) LOW-INCOME FAMILIES AND VERY LOW-IN21 COME FAMILIES.—The terms ‘low-income families’

22 and ‘very low-income families’ shall have the mean23 ings given the terms in section 3(b) of the United

24 States Housing Act of 1937.
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1 ‘‘(7) PREEXISTING TENANT.—The term ‘pre2 existing tenant’ means, with respect to a multifamily

3 housing project acquired pursuant to this section by

4 a purchaser other than the Secretary at foreclosure

5 or after sale by the Secretary, a family that resides

6 in a unit in the project immediately before the acqui7 sition of the project by the purchaser.

8 ‘‘(8) MARKET AREA.—The term ‘market area’

9 means a market area determined by the Secretary.

10 ‘‘(9) SECRETARY.—The term ‘Secretary’ means

11 the Secretary of Housing and Urban Development.

12 ‘‘(c) DISPOSITION OF PROPERTY.—

13 ‘‘(1) DISPOSITION TO PURCHASERS.—The Sec14 retary may, in carrying out this section, dispose of

15 a multifamily housing project owned by the Sec16 retary on a negotiated, competitive bid, or other

17 basis, on such terms as the Secretary deems appro18 priate considering the low-income character of the

19 project and consistent with the goals in subsection

20 (a), only to a purchaser determined by the Secretary

21 to be capable of—

22 ‘‘(A) satisfying the conditions of the dis23 position plan developed under paragraph (2) for

24 the project;
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1 ‘‘(B) implementing a sound financial and

2 physical management program that is designed

3 to enable the project to meet anticipated oper4 ating and repair expenses to ensure that the

5 project will remain in decent, safe, and sanitary

6 condition in compliance with any standards

7 under applicable State or local laws, rules, ordi8 nances, or regulations relating to the physical

9 condition of the housing and any such stand10 ards established by the Secretary;

11 ‘‘(C) responding to the needs of the ten12 ants and working cooperatively with tenant or13 ganizations;

14 ‘‘(D) providing adequate organizational,

15 staff, and financial resources to the project; and

16 ‘‘(E) meeting such other requirements as

17 the Secretary may determine.

18 ‘‘(2) DISPOSITION PLAN.—

19 ‘‘(A) IN GENERAL.—Prior to the sale of a

20 multifamily housing project that is owned by

21 the Secretary, the Secretary shall develop an

22 initial disposition plan for the project that

23 specifies the minimum terms and conditions of

24 the Secretary for disposition of the project, the

25 initial sales price that is acceptable to the Sec-
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1 retary, and the assistance that the Secretary

2 plans to make available to a prospective pur3 chaser in accordance with this section.

4 ‘‘(B) MARKET-WIDE PLANS.—In develop5 ing the initial disposition plan under this sub6 section for a multifamily housing project lo7 cated in a market area in which is located at

8 least 1 other multifamily housing project owned

9 by the Secretary, the Secretary shall coordinate

10 the disposition of all such multifamily housing

11 projects located within the same market area to

12 the extent and in such manner as the Secretary

13 determines appropriate to carry out the goals

14 under subsection (a).

15 ‘‘(C) SALES PRICE.—The initial sales price

16 shall be reasonably related to the intended use

17 of the property after sale, any rehabilitation re18 quirements for the project, the rents for units

19 in the project that can be supported by the

20 market, the amount of rental assistance avail21 able for the project under section 8 of the Unit22 ed States Housing Act of 1937, and the occu23 pancy profile of the project (including family

24 size and income levels for tenant families).
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1 ‘‘(D) COMMUNITY AND TENANT INPUT.—

2 In carrying out this section, the Secretary shall

3 develop procedures—

4 ‘‘(i) to obtain appropriate and timely

5 input into disposition plans from officials

6 of the unit of general local government af7 fected, the community in which the project

8 is situated, and the tenants of the project;

9 and

10 ‘‘(ii) to facilitate, where feasible and

11 appropriate, the sale of multifamily hous12 ing projects to existing tenant organiza13 tions with demonstrated capacity, to public

14 or nonprofit entities that represent or are

15 affiliated with existing tenant organiza16 tions, or to other public or nonprofit enti17 ties.

18 ‘‘(E) TECHNICAL ASSISTANCE.—To carry

19 out the procedures developed under subpara20 graph (D), the Secretary may provide technical

21 assistance, directly or indirectly, and may use

22 amounts available for technical assistance under

23 the Emergency Low Income Housing Preserva24 tion Act of 1987, subtitle C of the Low-Income

25 Housing Preservation and Resident Home-
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1 ownership Act of 1990, subtitle B of title IV of

2 the Cranston-Gonzalez National Affordable

3 Housing Act, or this section, for the provision

4 of technical assistance under this paragraph.

5 Recipients of technical assistance funding under

6 the provisions referred to in this paragraph

7 shall be permitted to provide technical assist8 ance to the extent of such funding under any of

9 such provisions or under this paragraph, not10 withstanding the source of the funding.

11 ‘‘(3) FORECLOSURE SALE.—In carrying out this

12 section, the Secretary shall—

13 ‘‘(A) prior to foreclosing on any multifam14 ily housing project held by the Secretary, notify

15 both the unit of general local government in

16 which the property is located and the tenants of

17 the property of the proposed foreclosure sale;

18 and

19 ‘‘(B) dispose of a multifamily housing

20 project through a foreclosure sale only to a pur21 chaser that the Secretary determines is capable

22 of implementing a sound financial and physical

23 management program that is designed to enable

24 the project to meet anticipated operating and

25 repair expenses to ensure that the project will
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1 remain in decent, safe, and sanitary condition

2 in compliance with any standards under appli3 cable State or local laws, rules, ordinances, or

4 regulations relating to the physical condition of

5 the housing and any such standards established

6 by the Secretary;.

7 ‘‘(d) MANAGEMENT AND MAINTENANCE OF PROP8 ERTIES.—

9 ‘‘(1) CONTRACTING FOR MANAGEMENT SERV10 ICES.—The Secretary may, in carrying out this sec11 tion—

12 ‘‘(A) contract for management services for

13 a multifamily housing project that is owned by

14 the Secretary (or for which the Secretary is

15 mortgagee in possession) with for-profit and

16 nonprofit organizations and public agencies (in17 cluding public housing authorities) on a nego18 tiated, competitive bid, or other basis at a price

19 determined by the Secretary to be reasonable,

20 with a manager the Secretary has determined is

21 capable of—

22 ‘‘(i) implementing a sound financial

23 and physical management program that is

24 designed to enable the project to meet an25 ticipated operating and maintenance ex-
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1 penses to ensure that the project will re2 main in decent, safe, and sanitary condi3 tion in compliance with any standards

4 under applicable State or local laws, rules,

5 ordinances, or regulations relating to the

6 physical condition of the housing and any

7 such standards established by the Sec8 retary;

9 ‘‘(ii) responding to the needs of the

10 tenants and working cooperatively with

11 tenant organizations;

12 ‘‘(iii) providing adequate organiza13 tional, staff, and other resources to imple14 ment a management program determined

15 by the Secretary; and

16 ‘‘(iv) meeting such other requirements

17 as the Secretary may determine; and

18 ‘‘(B) require the owner of a multifamily

19 housing project that is subject to a mortgage

20 held by the Secretary to contract for manage21 ment services for the project in the manner de22 scribed in subparagraph (A).

23 ‘‘(2) MAINTENANCE OF PROJECTS OWNED BY

24 THE SECRETARY.—In the case of multifamily hous25 ing projects that are owned by the Secretary (or for
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1 which the Secretary is mortgagee in possession), the

2 Secretary shall—

3 ‘‘(A) to the greatest extent possible, main4 tain all such occupied projects in a decent, safe,

5 and sanitary condition in compliance with any

6 standards under applicable State or local laws,

7 rules, ordinances, or regulations relating to the

8 physical condition of the housing and any such

9 standards established by the Secretary;

10 ‘‘(B) to the greatest extent possible, main11 tain full occupancy in all such projects; and

12 ‘‘(C) maintain all such projects for pur13 poses of providing rental or cooperative hous14 ing.

15 ‘‘(3) PROJECTS SUBJECT TO A MORTGAGE

16 HELD BY SECRETARY.—In the case of any multifam17 ily housing project that is subject to a mortgage held

18 by the Secretary, the Secretary shall require the

19 owner of the project to carry out the requirements

20 of paragraph (2).

21 ‘‘(e) REQUIRED ASSISTANCE.—In disposing of any

22 multifamily housing property under this section, the Sec23 retary shall take, separately or in combination with actions

24 under subsection (f), one or more of the following actions:
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1 ‘‘(1) CONTRACT WITH OWNER FOR PROJECT2 BASED ASSISTANCE.—In the case of multifamily

3 housing projects that are acquired by a purchaser

4 other than the Secretary at foreclosure or after sale

5 by the Secretary, the Secretary may enter into con6 tracts under section 8 of the United States Housing

7 Act of 1937 (to the extent budget authority is avail8 able) with owners of the projects, subject to the

9 following requirements:

10 ‘‘(A) SUBSIDIZED OR FORMERLY SUB11 SIDIZED PROJECTS RECEIVING MORTGAGE-RE12 LATED ASSISTANCE.—In the case of a sub13 sidized or formerly subsidized project referred

14 to in subparagraphs (A) through (C) of sub15 section (b)(2)—

16 ‘‘(i) the contract shall be sufficient to

17 assist at least all units covered by an as18 sistance contract under any of the authori19 ties referred to in subsection (b)(2)(D) be20 fore acquisition or foreclosure, unless the

21 Secretary acts pursuant to the provisions

22 of subparagraph (C);

23 ‘‘(ii) the contract shall provide that,

24 when a vacancy occurs in any unit in the

25 project requiring project-based rental as-
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1 sistance pursuant to this subparagraph

2 that is occupied by a family who is not eli3 gible for assistance under such section 8,

4 the owner shall lease the available unit to

5 a family eligible for assistance under such

6 section 8; and

7 ‘‘(iii) the Secretary shall take actions

8 to ensure that any unit in any such project

9 that does not otherwise receive project10 based assistance under this subparagraph

11 remains available and affordable for the re12 maining useful life of the project, as de13 fined by the Secretary; to carry out this

14 clause, the Secretary may require pur15 chasers to establish use or rent restrictions

16 maintaining the affordability of such units.

17 ‘‘(B) SUBSIDIZED OR FORMERLY SUB18 SIDIZED PROJECTS RECEIVING RENTAL ASSIST19 ANCE.—In the case of a subsidized or formerly

20 subsidized project referred to in subsection

21 (b)(2)(D) that is not subject to subparagraph

22 (A)—

23 ‘‘(i) the contract shall be sufficient to

24 assist at least all units in the project that

25 are covered, or were covered immediately
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1 before foreclosure on or acquisition of the

2 project by the Secretary, by an assistance

3 contract under any of the provisions re4 ferred to in such subsection, unless the

5 Secretary acts pursuant to provisions of

6 subparagraph (C); and

7 ‘‘(ii) the contract shall provide that,

8 when a vacancy occurs in any unit in the

9 project requiring project-based rental as10 sistance pursuant to this subparagraph

11 that is occupied by a family who is not eli12 gible for assistance under such section 8,

13 the owner shall lease the available unit to

14 a family eligible for assistance under such

15 section 8.

16 ‘‘(C) EXCEPTIONS.—

17 ‘‘(i) AUTHORITY.—In lieu of providing

18 project-based assistance under subpara19 graph (A)(i) or (B)(i) for a project, the

20 Secretary may, for certain units in

21 unsubsidized projects located within the

22 same market area as the project otherwise

23 required to be assisted with such project24 based assistance—
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1 ‘‘(I) require use restrictions pro2 viding that such units shall be avail3 able to and affordable by very low-in4 come families for the remaining useful

5 life of the project (as defined by the

6 Secretary), or

7 ‘‘(II) provide project-based assist8 ance for units occupied by only very

9 low-income persons,

10 but only if the requirements under clause

11 (ii) are met.

12 ‘‘(ii) REQUIREMENTS.—The require13 ments under this clause are that—

14 ‘‘(I) upon the disposition of the

15 project otherwise required to be as16 sisted with project based assistance

17 under subparagraph (A)(i) or (B)(i),

18 low-income families residing in units

19 otherwise required to be assisted with

20 such project-based assistance shall be

21 provided tenant-based assistance

22 under section 8 of the United States

23 Housing Act of 1937; and

24 ‘‘(II) the number of units subject

25 to use restrictions or provided assist-
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1 ance under clause (i) shall be at least

2 equivalent to the number of units oth3 erwise required to be assisted with

4 project-based assistance under sub5 paragraph (A)(i) or (B)(i).

6 ‘‘(D) UNSUBSIDIZED PROJECTS.—Notwith7 standing actions taken pursuant to subpara8 graph (C), in the case of unsubsidized projects,

9 the contract shall be sufficient to provide—

10 ‘‘(i) project-based rental assistance for

11 all units that are covered, or were covered

12 immediately before foreclosure or acquisi13 tion, by an assistance contract under—

14 ‘‘(I) the new construction and

15 substantial rehabilitation program

16 under section 8(b)(2) of the United

17 States Housing Act of 1937 (as in ef18 fect before October 1, 1983);

19 ‘‘(II) the property disposition

20 program under section 8(b) of such

21 Act;

22 ‘‘(III) the project-based certifi23 cate program under section 8 of such

24 Act;
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1 ‘‘(IV) the moderate rehabilitation

2 program under section 8(e)(2) of such

3 Act;

4 ‘‘(V) section 23 of such Act (as

5 in effect before January 1, 1975);

6 ‘‘(VI) the rent supplement pro7 gram under section 101 of the Hous8 ing and Urban Development Act of

9 1965; or

10 ‘‘(VII) section 8 of the United

11 States Housing Act of 1937, following

12 conversion from assistance under sec13 tion 101 of the Housing and Urban

14 Development Act of 1965; and

15 ‘‘(ii) tenant-based assistance under

16 section 8 of the United States Housing Act

17 of 1937 for families that are preexisting

18 tenants of the project in units that, imme19 diately before foreclosure or acquisition of

20 the project by the Secretary, were covered

21 by an assistance contract under the loan

22 management set-aside program under sec23 tion 8(b) of the United States Housing Act

24 of 1937 at such time.
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1 ‘‘(2) ANNUAL CONTRIBUTION CONTRACTS FOR

2 TENANT-BASED ASSISTANCE.—In the case of multi3 family housing projects that are acquired by a pur4 chaser other than the Secretary at foreclosure or

5 after sale by the Secretary, the Secretary may enter

6 into annual contribution contracts with public hous7 ing agencies to provide tenant-based assistance

8 under section 8 of the United States Housing Act of

9 1937 on behalf of all low-income families who are

10 otherwise eligible for assistance in accordance with

11 subparagraph (A), (B), or (D) of paragraph (1) on

12 the date that the project is acquired by the pur13 chaser, subject to the following requirements:

14 ‘‘(A) REQUIREMENT OF SUFFICIENT AF15 FORDABLE HOUSING IN AREA.—The Secretary

16 may not take action under this paragraph un17 less the Secretary determines that there is

18 available in the area an adequate supply of hab19 itable, affordable housing for very low-income

20 families and other low-income families using

21 such assistance.

22 ‘‘(B) LIMITATION FOR SUBSIDIZED AND

23 FORMERLY SUBSIDIZED PROJECTS.—The Sec24 retary may not take actions under this para25 graph in connection with units in subsidized or
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1 formerly subsidized projects for more than 10

2 percent of the aggregate number of units in

3 such projects disposed of by the Secretary in

4 any fiscal year.

5 ‘‘(3) OTHER ASSISTANCE.—

6 ‘‘(A) IN GENERAL.—In accordance with

7 the authority provided under the National

8 Housing Act, the Secretary may provide other

9 assistance pursuant to subsection (f) to the

10 owners of multifamily housing projects that are

11 acquired by a purchaser other than the Sec12 retary at foreclosure, or after sale by the Sec13 retary, on terms that ensure that—

14 ‘‘(i) at least the units in the project

15 otherwise required to receive project-based

16 assistance pursuant to subparagraphs (A),

17 (B), or (D) of paragraph (1) are available

18 to and affordable by low-income persons;

19 and

20 ‘‘(ii) for the remaining useful life of

21 the project, as defined by the Secretary,

22 there shall be in force such use or rent re23 strictions as the Secretary may prescribe.

24 ‘‘(B) VERY LOW-INCOME TENANTS.—If, as

25 a result of actions taken pursuant to this para-
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1 graph, the rents charged to any very low-income

2 families residing in the project who are other3 wise required (pursuant to subparagraph (A),

4 (B), or (D) of paragraph (1)) to receive project5 based assistance under section 8 of the United

6 States Housing Act of 1937 exceed the amount

7 payable as rent under section 3(a) of the Unit8 ed States Housing Act of 1937, the Secretary

9 shall provide assistance under section 8 of such

10 Act to such families.

11 ‘‘(f) DISCRETIONARY ASSISTANCE.—In addition to

12 the actions required under subsection (e) for a subsidized,

13 formerly subsidized, or unsubsidized multifamily housing

14 project, the Secretary may, pursuant to the disposition

15 plan and the goals in subsection (a), take any of the fol16 lowing actions, separately or in combination:

17 ‘‘(1) DISCOUNTED SALES PRICE.—In accord18 ance with the authority provided under the National

19 Housing Act, the Secretary may reduce the selling

20 price of the project. Such reduced sales price shall

21 be reasonably related to the intended use of the

22 property after sale, any rehabilitation requirements

23 for the project, the rents for units in the project that

24 can be supported by the market, the amount of rent25 al assistance available for the project under section
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1 8 of the United States Housing Act of 1937, and

2 the occupancy profile of the project.

3 ‘‘(2) USE AND RENT RESTRICTIONS.—The Sec4 retary may require certain units in a project to be

5 subject to use or rent restrictions providing that

6 such units will be available to and affordable by low7 and very low-income persons for the remaining use8 ful life of the property, as defined by the Secretary.

9 ‘‘(3) SHORT-TERM LOANS.—The Secretary may

10 provide short-term loans to facilitate the sale of a

11 multifamily housing project if—

12 ‘‘(A) authority for such loans is provided

13 in advance in an appropriation Act;

14 ‘‘(B) such loan has a term of not more

15 than 5 years;

16 ‘‘(C) the Secretary determines, based upon

17 documentation provided to the Secretary, that

18 the borrower has obtained a commitment of

19 permanent financing to replace the short-term

20 loan from a lender who meets standards estab21 lished by the Secretary; and

22 ‘‘(D) the terms of such loan are consistent

23 with prevailing practices in the marketplace or

24 the provision of such loan results in no cost to
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1 the Government, as defined in section 502 of

2 the Congressional Budget Act of 1974.

3 ‘‘(4) UP-FRONT GRANTS.—If the Secretary de4 termines that action under this paragraph is more

5 cost-effective, the Secretary may utilize the budget

6 authority provided for contracts issued under this

7 section for project-based assistance under section 8

8 of the United States Housing Act of 1937 to (in ad9 dition to providing project-based section 8 rental

10 assistance)—

11 ‘‘(A) provide up-front grants for the nec12 essary cost of rehabilitation and other related

13 development costs; or

14 ‘‘(B) pay any cost to the Government, as

15 defined in section 502 of the Congressional

16 Budget Act of 1974, for loans made pursuant

17 to paragraph (3).

18 ‘‘(5) TENANT-BASED ASSISTANCE.—The Sec19 retary may make available tenant-based assistance

20 under section 8 of the United States Housing Act of

21 1937 to very low-income families residing in a multi22 family housing project that do not otherwise qualify

23 for project-based assistance.

24 ‘‘(6) ALTERNATIVE USES.—
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1 ‘‘(A) IN GENERAL.—Notwithstanding any

2 other provision of law, after providing notice to

3 and an opportunity to comment by preexisting

4 tenants, the Secretary may allow not more than

5 10 percent of the total number of units in mul6 tifamily housing projects that are disposed of

7 by the Secretary during any single fiscal year to

8 be made available for—

9 ‘‘(i) uses (other than rental or cooper10 ative uses) that benefit the tenants of the

11 project, including low-income homeowner12 ship opportunities, or in any particular

13 project, community space, office space for

14 tenant or housing-related service providers

15 or security programs, or small business

16 uses; or

17 ‘‘(ii) any other uses, if the Secretary

18 and the unit of general local government or

19 area-wide governing body determine that

20 such use will further fair housing, commu21 nity development, or neighborhood revital22 ization goals.

23 ‘‘(B) DISPLACEMENT PROTECTION.—The

24 Secretary may take actions under subparagraph

25 (A) only if—
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•HR 4067 IH

1 ‘‘(i) tenant-based rental assistance

2 under section 8 of the United States Hous3 ing Act of 1937 is made available to each

4 eligible family residing in the project that

5 is displaced as a result of such actions; and

6 ‘‘(ii) the Secretary determines that

7 sufficient habitable, affordable rental hous8 ing is available in the market area in which

9 the project is located to ensure use of such

10 assistance.

11 ‘‘(7) TRANSFER FOR USE UNDER OTHER PRO12 GRAMS OF SECRETARY.—

13 ‘‘(A) IN GENERAL.—The Secretary may

14 transfer a multifamily housing project—

15 ‘‘(i) to a public housing agency for use

16 of the project as public housing; or

17 ‘‘(ii) to an entity eligible to own or op18 erate housing assisted under section 202 of

19 the Housing Act of 1959 or under section

20 811 of the Cranston-Gonzalez National Af21 fordable Housing Act for use as supportive

22 housing under either of such sections.

23 ‘‘(B) REQUIREMENTS FOR AGREEMENT.—

24 An agreement providing for the transfer of a

25 project described in subparagraph (A) shall—
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•HR 4067 IH

1 ‘‘(i) contain such terms, conditions,

2 and limitations as the Secretary deter3 mines appropriate, including requirements

4 to ensure use of the project as public hous5 ing, supportive housing under section 202

6 of the Housing Act of 1959, or supportive

7 housing under section 811 of the Cran8 ston-Gonzalez National Affordable Housing

9 Act, as applicable; and

10 ‘‘(ii) ensure that no tenant of the

11 project will be displaced as a result of ac12 tions taken under this paragraph.

13 ‘‘(8) REBUILDING.—Notwithstanding any provi14 sion of section 8 of the United States Housing Act

15 of 1937 (42 U.S.C. 1437f), the Secretary may pro16 vide project-based assistance under such section for

17 a multifamily housing project rebuilt or to be rebuilt

18 (on-site, off-site, or in a combination of both) in con19 nection with disposition under this section, if the

20 Secretary determines—

21 ‘‘(A) the project does not provide adequate

22 services;

23 ‘‘(B) rebuilding the project is less expen24 sive than substantial rehabilitation of the

25 project or substantial rehabilitation would not
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•HR 4067 IH

1 produce as long a physical life of the project as

2 would rebuilding;

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

4 in which the project is located approves the re5 building and makes a financial contribution or

6 other commitment to the project;

7 ‘‘(D) the rebuilding promotes racial and

8 low-income geographical deconcentration; and

9 ‘‘(E) the rebuilding is a part of a local

10 neighborhood revitalization plan approved by

11 the unit of general local government.

12 ‘‘(g) PROTECTION FOR UNASSISTED VERY LOW-IN13 COME TENANTS.—For each multifamily housing project

14 disposed of under this section, the Secretary shall require

15 that, for any very low-income family who is a preexisting

16 tenant of the project and for whom the rent (after disposi17 tion) for the unit occupied by the family is not afford18 able—

19 ‘‘(1) for a period of 2 years beginning upon the

20 date of the acquisition of the project by the pur21 chaser under such disposition, the rent for the unit

22 occupied by the family may not be increased above

23 the rent charged immediately before acquisition;

24 ‘‘(2) such family shall be considered displaced

25 for purposes of the preferences for assistance under
32

•HR 4067 IH

1 sections 6(c)(4)(A)(i), 8(d)(1)(A)(i), and 8(o)(3)(B)

2 of the United States Housing Act of 1937; and

3 ‘‘(3) notice shall be provided to such family, not

4 later than the date of the acquisition of the project

5 by the purchaser—

6 ‘‘(A) of the requirements under paragraphs

7 (1) and (2); and

8 ‘‘(B) that, after the expiration of the pe9 riod under paragraph (1), the rent for the unit

10 occupied by the family may be increased.

11 ‘‘(h) CONTRACT REQUIREMENTS.—Contracts for

12 project-based rental assistance under section 8 of the

13 United States Housing Act of 1937 provided pursuant to

14 this section shall be subject to the following requirements:

15 ‘‘(1) CONTRACT TERM.—The contract shall

16 have a term of 15 years, except that the term may

17 be less than 15 years—

18 ‘‘(A) to the extent that the Secretary finds

19 that, based on the rental charges and financing

20 for the multifamily housing project to which the

21 contract relates, the financial viability of the

22 project can be maintained under a contract hav23 ing such a term; or

24 ‘‘(B) if such assistance is provided—
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•HR 4067 IH

1 ‘‘(i) under a contract authorized

2 under section 6 of the HUD Demonstra3 tion Act of 1993; and

4 ‘‘(ii) pursuant to a disposition plan

5 under this section for a project that is de6 termined by the Secretary to be otherwise

7 in compliance with this section.

8 To the extent that units receive project-based assist9 ance for a contract term of less than 15 years, the

10 Secretary shall require that the amount of rent pay11 able by tenants of the project for such units shall

12 not exceed the amount payable for rent under sec13 tion 3(a) of the United States Housing Act of 1937

14 for a period of at least 15 years.

15 ‘‘(2) CONTRACT RENT.—The Secretary shall es16 tablish the contract rents under such contracts at

17 levels that provide sufficient amounts for the nec18 essary costs of rehabilitating and operating the mul19 tifamily housing project and do not exceed the per20 centage of the existing housing fair market rentals

21 for the market area in which the project assisted

22 under the contract is located (as determined by the

23 Secretary under section 8(c) of the United States

24 Housing Act of 1937) as the Secretary may pre25 scribe.
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•HR 4067 IH

1 ‘‘(i) RIGHT OF FIRST REFUSAL FOR LOCAL AND

2 STATE GOVERNMENT AGENCIES.—During the period be3 ginning upon the Secretary acquiring title to a multifamily

4 housing project and ending 90 days after the Secretary

5 provides notice of such acquisition to the unit of general

6 local government for the area in which the project is lo7 cated (including any public housing agency for such area)

8 or an agency designated by the Governor of the State in

9 which the project is located, the Secretary may offer to

10 sell, make a commitment to sell, or sell the project only

11 to such unit of general local government (including any

12 such public housing agency) or such designated agency.

13 The Secretary shall establish any procedures necessary to

14 carry out this subsection.

15 ‘‘(j) DISPLACEMENT OF TENANTS AND RELOCATION

16 ASSISTANCE.—

17 ‘‘(1) IN GENERAL.—Whenever tenants will be

18 displaced as a result of the demolition of, repairs to,

19 or conversion in the use of, a multifamily housing

20 project that is owned by the Secretary (or for which

21 the Secretary is mortgagee in possession), the Sec22 retary shall identify tenants who will be displaced,

23 and shall notify all such tenants of their pending

24 displacement and of any relocation assistance that

25 may be available. In the case of a multifamily hous-
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•HR 4067 IH

1 ing project that is subject to a mortgage held by the

2 Secretary, the Secretary shall require the owner of

3 the project to carry out the requirements of this

4 paragraph, if the Secretary has authorized the dem5 olition of, repairs to, or conversion in the use of such

6 multifamily housing project.

7 ‘‘(2) RIGHTS OF DISPLACED TENANTS.—The

8 Secretary shall ensure for any such tenant (who con9 tinues to meet applicable qualification standards)

10 the right—

11 ‘‘(A) to return, whenever possible, to a re12 paired unit;

13 ‘‘(B) to occupy a unit in another multifam14 ily housing project owned by the Secretary;

15 ‘‘(C) to obtain housing assistance under

16 the United States Housing Act of 1937; or

17 ‘‘(D) to receive any other available reloca18 tion assistance as the Secretary determines to

19 be appropriate.

20 ‘‘(k) MORTGAGE AND PROJECT SALES.—

21 ‘‘(1) IN GENERAL.—The Secretary may not ap22 prove the sale of any loan or mortgage held by the

23 Secretary (including any loan or mortgage owned by

24 the Government National Mortgage Association) on

25 any subsidized project or formerly subsidized
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•HR 4067 IH

1 project, unless such sale is made as part of a trans2 action that will ensure that such project will con3 tinue to operate at least until the maturity date of

4 such loan or mortgage, in a manner that will provide

5 rental housing on terms at least as advantageous to

6 existing and future tenants as the terms required by

7 the program under which the loan or mortgage was

8 made or insured prior to the assignment of the loan

9 or mortgage on such project to the Secretary.

10 ‘‘(2) SALE OF CERTAIN PROJECTS.—The Sec11 retary may not approve the sale of any subsidized

12 project—

13 ‘‘(A) that is subject to a mortgage held by

14 the Secretary, or

15 ‘‘(B) if the sale transaction involves the

16 provision of any additional subsidy funds by the

17 Secretary or a recasting of the mortgage,

18 unless such sale is made as part of a transaction

19 that will ensure that the project will continue to op20 erate, at least until the maturity date of the loan or

21 mortgage, in a manner that will provide rental hous22 ing on terms at least as advantageous to existing

23 and future tenants as the terms required by the pro24 gram under which the loan or mortgage was made

25 or insured prior to the proposed sale of the project.
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•HR 4067 IH

1 ‘‘(3) MORTGAGE SALES TO STATE AND LOCAL

2 GOVERNMENTS.—Notwithstanding any provision of

3 law that requires competitive sales or bidding, the

4 Secretary may carry out negotiated sales of mort5 gages held by the Secretary, without the competitive

6 selection of purchasers or intermediaries, to units of

7 general local government or State agencies, or

8 groups of investors that include at least one such

9 unit of general local government or State agency, if

10 the negotiations are conducted with such agencies,

11 except that—

12 ‘‘(A) the terms of any such sale shall in13 clude the agreement of the purchasing agency

14 or unit of local government or State agency to

15 act as mortgagee or owner of a beneficial inter16 est in such mortgages, in a manner consistent

17 with maintaining the projects that are subject

18 to such mortgages for occupancy by the general

19 tenant group intended to be served by the appli20 cable mortgage insurance program, including,

21 to the extent the Secretary determines appro22 priate, authorizing such unit of local govern23 ment or State agency to enforce the provisions

24 of any regulatory agreement or other program
38

•HR 4067 IH

1 requirements applicable to the related projects;

2 and

3 ‘‘(B) the sales prices for such mortgages

4 shall be, in the determination of the Secretary,

5 the best prices that may be obtained for such

6 mortgages from a unit of general local govern7 ment or State agency, consistent with the ex8 pectation and intention that the projects fi9 nanced will be retained for use under the appli10 cable mortgage insurance program for the life

11 of the initial mortgage insurance contract.

12 ‘‘(4) SALE OF MORTGAGES COVERING

13 UNSUBSIDIZED PROJECTS.—Notwithstanding any

14 other provision of law, the Secretary may sell mort15 gages held on unsubsidized projects on such terms

16 and conditions as the Secretary may prescribe.

17 ‘‘(5) MORTGAGE SALE DEMONSTRATION.—The

18 Secretary may carry out a demonstration to test the

19 feasibility of restructuring and disposing of troubled

20 multifamily mortgages held by the Secretary through

21 the establishment of partnerships between public,

22 private, and nonprofit entities.

23 ‘‘(l) REPORT TO CONGRESS.—Not later than June 1

24 of each year, the Secretary shall submit to the Congress

25 a report describing the status of multifamily housing
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•HR 4067 IH

1 projects owned by or subject to mortgages held by the Sec2 retary, on an aggregate basis, which highlights the dif3 ferences, if any, between the subsidized and the

4 unsubsidized inventory. The report shall include—

5 ‘‘(1) the average and median size of the

6 projects;

7 ‘‘(2) the geographic locations of the projects, by

8 State and region;

9 ‘‘(3) the years during which projects were as10 signed to the Department, and the average and me11 dian length of time that projects remain in the

12 HUD-held inventory;

13 ‘‘(4) the status of HUD-held mortgages;

14 ‘‘(5) the physical condition of the HUD-held

15 and HUD-owned inventory;

16 ‘‘(6) the occupancy profile of the projects, in17 cluding the income, family size, race, and ethnic ori18 gin of current tenants, and the rents paid by such

19 tenants;

20 ‘‘(7) the proportion of units that are vacant;

21 ‘‘(8) the number of projects for which the Sec22 retary is mortgagee in possession;

23 ‘‘(9) the number of projects sold in foreclosure

24 sales;

25 ‘‘(10) the number of HUD-owned projects sold;
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1 ‘‘(11) a description of actions undertaken pur2 suant to this section, including a description of the

3 effectiveness of such actions and any impediments to

4 the disposition or management of multifamily hous5 ing projects;

6 ‘‘(12) a description of the extent to which the

7 provisions of this section and actions taken under

8 this section have displaced tenants of multifamily

9 housing projects;

10 ‘‘(13) a description of any of the functions per11 formed in connection with this section that are con12 tracted out to public or private entities or to States;

13 and

14 ‘‘(14) a description of the activities carried out

15 under subsection (i) during the preceding year.’’.

16 (c) CLARIFICATION OF FEDERAL PREFERENCES.—

17 (1) PUBLIC HOUSING TENANCY.—Section

18 6(c)(4)(A)(i) of the United States Housing Act of

19 1937 (42 U.S.C. 1437d(c)(4)(A)(i)) is amended by

20 inserting after ‘‘displaced’’ the following: ‘‘(including

21 displacement because of disposition of a multifamily

22 housing project under section 203 of the Housing

23 and Community Development Amendments of

24 1978)’’.
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1 (2) SECTION 8 ASSISTANCE.—Section

2 8(d)(1)(A)(i) of the United States Housing Act of

3 1937 (42 U.S.C. 1437f(d)(1)(A)(i)) is amended by

4 inserting after ‘‘displaced’’ the following: ‘‘(including

5 displacement because of disposition of a multifamily

6 housing project under section 203 of the Housing

7 and Community Development Amendments of

8 1978)’’.

9 (d) DEFINITION OF OWNER.—Section 8(f)(1) of the

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

11 1437f(f)(1)) is amended by inserting ‘‘an agency of the

12 Federal Government,’’ after ‘‘cooperative,’’.

13 (e) AMENDMENT TO NATIONAL HOUSING ACT.—

14 Title V of the National Housing Act (12 U.S.C. 1731a

15 et seq.) is amended by adding at the end the following

16 new section:

17 ‘‘PARTIAL PAYMENT OF CLAIMS ON MULTIFAMILY

18 HOUSING PROJECTS

19 ‘‘SEC. 541. (a) AUTHORITY.—Notwithstanding any

20 other provision of law, if the Secretary is requested to ac21 cept assignment of a mortgage insured by the Secretary

22 that covers a multifamily housing project (as such term

23 is defined in section 203(b) of the Housing and Commu24 nity Development Amendments of 1978) and the Sec25 retary determines that partial payment would be less cost26 ly to the Federal Government than other reasonable alter-
42

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1 natives for maintaining the low-income character of the

2 project, the Secretary may request the mortgagee, in lieu

3 of assignment, to—

4 ‘‘(1) accept partial payment of the claim under

5 the mortgage insurance contract; and

6 ‘‘(2) recast the mortgage, under such terms and

7 conditions as the Secretary may determine.

8 ‘‘(b) REPAYMENT.—As a condition to a partial claim

9 payment under this section, the mortgagor shall agree to

10 repay to the Secretary the amount of such payment and

11 such obligation shall be secured by a second mortgage on

12 the property on such terms and conditions as the Sec13 retary may determine.’’.

14 (f) EFFECTIVE DATE.—The Secretary shall issue in15 terim regulations necessary to implement the amendments

16 made by subsections (b) through (d) not later than 90

17 days after the date of the enactment of this Act. Such

18 interim regulations shall take effect upon issuance and in19 vite public comment on the interim regulations. The Sec20 retary shall issue final regulations to implement such

21 amendments after opportunity for such public comment,

22 but not later than 12 months after the date of issuance

23 of such interim regulations.
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1 SEC. 102. USE OF EMERGENCY ASSISTANCE FUNDS FOR

2 RESIDENCY IN MULTIFAMILY HOUSING DIS3 POSITION PROJECTS.

4 Section 203(f) of the Housing and Community Devel5 opment Amendments of 1978 (12 U.S.C. 1701z–11), as

6 amended by section 101 of this Act, is further amended

7 by adding at the end the following new paragraph:

8 ‘‘(9) EMERGENCY ASSISTANCE FUNDS.—The

9 Secretary may make arrangements with State agen10 cies and units of general local government of States

11 receiving emergency assistance under part A of title

12 IV of the Social Security Act for the provision of as13 sistance under such Act on behalf of eligible families

14 who would reside in any multifamily housing

15 projects.’’.

16 SEC. 103. REPEAL OF STATE AGENCY MULTIFAMILY PROP17 ERTY DISPOSITION DEMONSTRATION.

18 Section 184 of the Housing and Community Develop19 ment Act of 1987 (12 U.S.C. 1701z–11 note) is hereby

20 repealed.

21 SEC. 104. PREVENTING MORTGAGE DEFAULTS ON MULTI22 FAMILY HOUSING PROJECTS.

23 (a) MULTIFAMILY HOUSING PLANNING AND INVEST24 MENT STRATEGIES.—

25 (1) PREPARATION OF ASSESSMENTS FOR INDE26 PENDENT ENTITIES.—Section 402(a) of the Housing
44

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1 and Community Development Act of 1992 (12

2 U.S.C. 1715–1a note) is amended by adding at the

3 end the following new sentence: ‘‘The assessment

4 shall be prepared by an entity that does not have an

5 identity of interest with the owner.’’.

6 (2) TIMING OF SUBMISSION OF NEEDS ASSESS7 MENTS.—Section 402(b) of the Housing and Com8 munity Development Act of 1992 (12 U.S.C. 17152–

9 1a note) is amended to read as follows:

10 ‘‘(b) TIMING.—To ensure that assessments for all

11 covered multifamily housing properties will be submitted

12 on or before the conclusion of fiscal year 1997, the Sec13 retary shall require the owners of such properties, includ14 ing covered multifamily housing properties for the elderly,

15 to submit the assessments for the properties in accordance

16 with the following schedule:

17 ‘‘(1) For fiscal year 1994, 10 percent of the ag18 gregate number of such properties.

19 ‘‘(2) For each of fiscal years 1995, 1996, and

20 1997, an additional 30 percent of the aggregate

21 number of such properties.’’.

22 (3) REVIEW OF COMPREHENSIVE NEEDS AS23 SESSMENTS.—Section 404(d) of the Housing and

24 Community Development Act of 1992 (12 U.S.C.

25 1715–1a note) is amended to read as follows:
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1 ‘‘(d) REVIEW.—

2 ‘‘(1) IN GENERAL.—The Secretary shall review

3 each comprehensive needs assessment for complete4 ness and adequacy before the expiration of the 90-

5 day period beginning on the receipt of the assess6 ment and shall notify the owner of the property for

7 which the assessment was submitted of the findings

8 of such review.

9 ‘‘(2) INCOMPLETE OR INADEQUATE ASSESS10 MENTS.—If the Secretary determines that the as11 sessment is substantially incomplete or inadequate,

12 the Secretary shall—

13 ‘‘(A) notify the owner of the portion or

14 portions of the assessment requiring completion

15 or other revision; and

16 ‘‘(B) require the owner to submit an

17 amended assessment to the Secretary not later

18 than 30 days after such notification.’’.

19 (4) REPEAL OF NOTICE PROVISION.—Section

20 404 of the Housing and Community Development

21 Act of 1992 (12 U.S.C. 1715–1a note) is amended

22 by striking subsection (f).

23 (5) PUBLICATION.—Section 404 of the Housing

24 and Community Development Act of 1992 (12
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1 U.S.C. 1715z–1a note) is amended by inserting after

2 subsection (e) the following new subsection:

3 ‘‘(f) PUBLICATION OF METHOD FOR RECEIVING CAP4 ITAL NEEDS ASSESSMENT.—The Secretary shall cause to

5 be published in the Federal Register the method by which

6 the Secretary determines which capital needs assessments

7 will be received each year in accordance with section

8 402(b) and subsection (d) of this section.’’.

9 (6) FUNDING.—Title IV of the Housing and

10 Community Development Act of 1992 (12 U.S.C.

11 1715z–1a note) is amended by adding at the end the

12 following new section:

13 ‘‘SEC. 409. FUNDING.

14 ‘‘(a) ALLOCATION OF ASSISTANCE.—Based upon

15 needs identified in comprehensive needs assessments, and

16 subject to otherwise applicable program requirements, in17 cluding selection criteria, the Secretary may allocate the

18 following assistance to owners of covered multifamily

19 housing projects and may provide such assistance on a

20 noncompetitive basis:

21 ‘‘(1) Operating assistance and capital improve22 ment assistance for troubled multifamily housing

23 projects pursuant to section 201 of the Housing and

24 Community Development Amendments of 1978, ex25 cept for assistance set aside under section 201(n)(1).
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1 ‘‘(2) Loan management assistance available

2 pursuant to section 8 of the United States Housing

3 Act of 1937.

4 ‘‘(b) OPERATING ASSISTANCE AND CAPITAL IM5 PROVEMENT ASSISTANCE.—In providing assistance under

6 subsection (a) the Secretary shall use the selection criteria

7 set forth in section 201(n) of the Housing and Community

8 Development Amendments of 1978.

9 ‘‘(c) AMOUNT OF ASSISTANCE.—The Secretary may

10 fund all or only a portion of the needs identified in the

11 capital needs assessment of an owner selected to receive

12 assistance under this section.’’.

13 (b) FLEXIBLE SUBSIDY PROGRAM.—

14 (1) DELETION OF UTILITY COST REQUIRE15 MENTS.—Section 201(i) of the Housing and Com16 munity Development Amendments of 1978 (12

17 U.S.C. 1715z–1a(i)) is hereby repealed.

18 (2) REPEAL OF MANDATORY CONTRIBUTION

19 FROM OWNER.—Section 201(k)(2) of the Housing

20 and Community Development Amendments of 1978

21 (12 U.S.C. 1715z–1a(k)(2)) is amended by striking

22 ‘‘, except that’’ and all that follows and inserting a

23 period.

24 (3) FUNDING.—Section 201(n) of the Housing

25 and Community Development Amendments of 1978
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1 (42 U.S.C. 1715z–1a(n)) is amended to read as

2 follows:

3 ‘‘(n) ALLOCATION OF ASSISTANCE.—

4 ‘‘(1) SET-ASIDE.—In providing, and contracting

5 to provide, assistance for capital improvements

6 under this section, in each fiscal year the Secretary

7 shall set aside an amount, as determined by the Sec8 retary, for projects that are eligible for incentives

9 under section 224(b) of the Emergency Low Income

10 Housing Preservation Act of 1987, as such section

11 existed before the date of enactment of the Cran12 ston-Gonzalez National Affordable Housing Act. The

13 Secretary may make such assistance available on a

14 noncompetitive basis.

15 ‘‘(2) GENERAL RULES FOR ALLOCATION.—Ex16 cept as provided in paragraph (3), with respect to

17 assistance under this section not set aside for

18 projects under paragraph (1), the Secretary—

19 ‘‘(A) may award assistance on a non20 competitive basis; and

21 ‘‘(B) shall award assistance to eligible

22 projects on the basis of—

23 ‘‘(i) the extent to which the project is

24 physically or financially troubled, as evi25 denced by the comprehensive needs assess-
49

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1 ment submitted in accordance with title IV

2 of the Housing and Community Develop3 ment Act of 1992; and

4 ‘‘(ii) the extent to which such assist5 ance is necessary and reasonable to pre6 vent the default of federally insured mort7 gages.

8 ‘‘(3) EXCEPTIONS.—The Secretary may make

9 exceptions to selection criteria set forth in paragraph

10 (2) to permit the provision of assistance to eligible

11 projects based upon—

12 ‘‘(A) the extent to which such assistance is

13 necessary to prevent the imminent foreclosure

14 or default of a project whose owner has not

15 submitted a comprehensive needs assessment

16 pursuant to title IV of the Housing and Com17 munity Development Act of 1992;

18 ‘‘(B) the extent to which the project pre19 sents an imminent threat to the life, health,

20 and safety of project residents; or

21 ‘‘(C) such other criteria as the Secretary

22 may specify by regulation or by notice printed

23 in the Federal Register.
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1 ‘‘(4) CONSIDERATIONS.—In providing assist2 ance under this section, the Secretary shall take into

3 consideration—

4 ‘‘(A) the extent to which there is evidence

5 that there will be significant opportunities for

6 residents (including a resident council or resi7 dent management corporation, as appropriate)

8 to be involved in the management of the project

9 (except that this paragraph shall have no appli10 cation to projects that are owned as coopera11 tives); and

12 ‘‘(B) the extent to which there is evidence

13 that the project owner has provided competent

14 management and complied with all regulatory

15 and administrative handbooks (including such

16 handbooks with respect to the comprehensive

17 servicing of multifamily projects as the Sec18 retary may issue).’’.

19 (4) REPEAL.—Section 201 of the Housing and

20 Community Development Amendments of 1978 (12

21 U.S.C. 1715z–1a) is amended—

22 (A) by striking subsection (o); and

23 (B) by redesignating subsection (p) as sub24 section (o).
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1 (c) IMPLEMENTATION AND EFFECTIVE DATES FOR

2 SUBSECTIONS (a) AND (b).—

3 (1) IN GENERAL.—Except as provided in para4 graph (2), the amendments made by subsections (a)

5 and (b) shall apply with respect to amounts made

6 available for fiscal year 1995 and fiscal years there7 after.

8 (2) EXCEPTION.—Section 201(n)(1) of the

9 Housing and Community Development Amendments

10 of 1978 (as added by the amendment made by sub11 section (b)(3) of this section) shall take effect on the

12 date of enactment of this Act.

13 (3) NOTICE.—The Secretary shall, by notice

14 published in the Federal Register, establish any re15 quirements necessary to implement the amendments

16 made by subsections (a) and (b). The notice shall in17 vite public comments and, not later than 12 months

18 after the date on which the notice is published, the

19 Secretary shall issue final regulations based on the

20 initial notice, taking into consideration any public

21 comments received.

22 (d) STREAMLINED REFINANCING.—As soon as prac23 ticable, the Secretary shall implement a streamlined refi24 nancing program under the authority provided in section

25 223 of the National Housing Act to prevent the default
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1 of mortgages insured by the FHA which cover multifamily

2 housing projects, as defined in section 203(b) of the Hous3 ing and Community Development Amendments of 1978.

4 (e) GAO STUDY ON PREVENTION OF DEFAULT.—

5 (1) IN GENERAL.—Not later than September 1,

6 1995, the Comptroller General of the United States

7 shall submit to the Committee on Banking, Finance

8 and Urban Affairs of the House of Representatives

9 and the Committee on Banking, Housing, and

10 Urban Affairs of the Senate a report that evaluates

11 the adequacy of loan loss reserves in the General In12 surance and Special Risk Insurance Funds and pre13 sents recommendations for the Secretary to prevent

14 losses from occurring.

15 (2) CONTENTS.—The report submitted under

16 paragraph (1) shall—

17 (A) evaluate the factors considered in ar18 riving at loss estimates and determine whether

19 other factors should be considered;

20 (B) determine the relative benefit of creat21 ing a new, actuarially sound insurance fund for

22 all new multifamily housing insurance commit23 ments; and

24 (C) recommend alternatives to the Sec25 retary’s current procedures for preventing the
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1 future default of multifamily housing project

2 mortgages insured under title II of the National

3 Housing Act.

4 (f) GAO STUDY ON ACTUARIAL SOUNDNESS OF CER5 TAIN INSURANCE PROGRAMS.—

6 (1) IN GENERAL.—Not later than April 1,

7 1995, the Comptroller General of the United States

8 shall submit to the Committee on Banking, Housing,

9 and Urban Affairs of the Senate and the Committee

10 on Banking, Finance and Urban Affairs of the

11 House of Representatives a report that evaluates, in

12 connection with the General Insurance Fund, the

13 role and performance of the nursing home, hospital,

14 and retirement service center insurance programs.

15 (2) CONTENTS.—The reports submitted under

16 paragraph (1) shall—

17 (A) evaluate the strategic importance of

18 these insurance programs to the mission of the

19 FHA;

20 (B) evaluate the impact of these insurance

21 programs upon the financial performance of the

22 General Insurance Fund;

23 (C) assess the potential losses expected

24 under these programs through fiscal year 1999;
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1 (D) evaluate the risk of these programs to

2 the General Insurance Fund in connection with

3 changes in national health care policy;

4 (E) assess the ability of the FHA to man5 age these programs; and

6 (F) make recommendations for any nec7 essary changes.

8 (g) RISK ASSESSMENT.—

9 (1) SPECIAL RISK INSURANCE FUND.—Section

10 238(c) of the National Housing Act (12 U.S.C.

11 1715z–3(c)) is amended by adding at the end the

12 following new paragraph:

13 ‘‘(3) The Secretary shall undertake an annual

14 assessment of the risks associated with each of the

15 insurance programs comprising the Special Risk In16 surance Fund, and shall present findings from such

17 review to the Congress in the FHA Annual Manage18 ment Report.’’.

19 (2) GENERAL INSURANCE FUND.—Section 519

20 of the National Housing Act (12 U.S.C. 1735c) is

21 amended by adding at the end the following new

22 subsection:

23 ‘‘(g) RISK ASSESSMENT.—The Secretary shall under24 take an annual assessment of the risks associated with

25 each of the insurance programs comprising the General
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1 Insurance Fund, and shall present findings from such re2 view to the Congress in the FHA Annual Management Re3 port.’’.

4 (h) ALTERNATIVE USES FOR PREVENTION OF DE5 FAULT.—

6 (1) IN GENERAL.—Subject to notice and com7 ment from existing tenants, to prevent the imminent

8 default of a multifamily housing project subject to a

9 mortgage insured under title II of the National

10 Housing Act, the Secretary may authorize the mort11 gagor to use the project for purposes not con12 templated by or permitted under the regulatory

13 agreement, if—

14 (A) such other uses are acceptable to the

15 Secretary;

16 (B) such other uses would be otherwise in17 surable under title II of the National Housing

18 Act;

19 (C) the outstanding principal balance on

20 the mortgage covering such project is not in21 creased;

22 (D) any financial benefit accruing to the

23 mortgagor shall, subject to the discretion of the

24 Secretary, be applied to project reserves or

25 project rehabilitation; and
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1 (E) such other use serves a public purpose.

2 (2) DISPLACEMENT PROTECTION.—The Sec3 retary may take actions under paragraph (1) only

4 if—

5 (A) tenant-based rental assistance under

6 section 8 of the United States Housing Act of

7 1937 is made available to each eligible family

8 residing in the project that is displaced as a re9 sult of such actions; and

10 (B) the Secretary determines that suffi11 cient habitable, affordable (as such term is de12 fined in section 203(b) of the Housing and

13 Community Development Amendments of 1978)

14 rental housing is available in the market area in

15 which the project is located to ensure use of

16 such assistance.

17 (3) IMPLEMENTATION.—The Secretary shall, by

18 notice published in the Federal Register, which shall

19 take effect upon publication, establish such require20 ments as may be necessary to implement the amend21 ments made by this subsection. The notice shall in22 vite public comments and, not later than 12 months

23 after the date on which the notice is published, the

24 Secretary shall issue final regulations based on the
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1 initial notice, taking into account any public com2 ments received.

3 SEC. 105. INTEREST RATES ON ASSIGNED MORTGAGES.

4 Section 7(i)(5) of the Department of Housing and

5 Urban Development Act (42 U.S.C. 3535(i)(5)) is amend6 ed by striking the first semicolon, and all that follows

7 through ‘‘as determined by the Secretary’’.

8 SEC. 106. AUTHORIZATION OF APPROPRIATIONS.

9 (a) SPECIAL RISK INSURANCE FUND.—Section

10 238(b) of the National Housing Act (12 U.S.C. 1715z–

11 3(b)) is amended by striking the fifth sentence.

12 (b) GENERAL INSURANCE FUND.—Section 519 of the

13 National Housing Act (12 U.S.C. 1735c) is amended—

14 (1) by striking subsection (f); and

15 (2) by redesignating subsection (g) (as added

16 by section 104(g)(2) of this Act) as subsection (f).

17 (c) MULTIFAMILY INSURANCE FUND APPROPRIA18 TIONS.—Title V of the National Housing Act (12 U.S.C.

19 1731a et seq.) is amended by adding at the end the follow20 ing new section:

21 ‘‘SEC. 541. AUTHORIZATION OF APPROPRIATIONS FOR GEN22 ERAL AND SPECIAL RISK INSURANCE FUNDS.

23 ‘‘There are authorized to be appropriated such sums

24 as may be necessary for each of fiscal years 1994 and

25 1995, to be allocated in any manner that the Secretary
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1 determines appropriate, for the following costs incurred in

2 conjunction with programs authorized under the General

3 Insurance Fund, as provided by section 519, and the Spe4 cial Risk Insurance Fund, as provided by section 238:

5 ‘‘(1) The cost to the Government, as defined in

6 section 502 of the Congressional Budget Act, of new

7 insurance commitments.

8 ‘‘(2) The cost to the Government, as defined in

9 section 502 of the Congressional Budget Act, of

10 modifications to existing loans, loan guarantees, or

11 insurance commitments.

12 ‘‘(3) The cost to the Government, as defined in

13 section 502 of the Congressional Budget Act, of

14 loans provided under section 203(f) of the Housing

15 and Community Development Amendments of 1978.

16 ‘‘(4) The costs of the rehabilitation of multi17 family housing projects (as defined in section 203(b)

18 of the Housing and Community Development

19 Amendments of 1978) upon disposition by the Sec20 retary.’’.
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1 TITLE II—OTHER PROGRAM

2 REFORMS

3 Subtitle A—Home Investment

4 Partnerships Program

5 SEC. 201. PARTICIPATION BY STATE AGENCIES OR INSTRU6 MENTALITIES.

7 Section 104(2) of the Cranston-Gonzalez National

8 Affordable Housing Act (42 U.S.C. 12704(2)) is amend9 ed—

10 (1) by striking ‘‘and’’ after ‘‘Columbia,’’; and

11 (2) by inserting before the period at the end the

12 following: ‘‘, and any agency or instrumentality

13 thereof that is established pursuant to legislation

14 and designated by the chief executive to act on be15 half of the State with regard to the provisions of

16 this Act’’.

17 SEC. 203. SIMPLIFICATION OF PROGRAM-WIDE INCOME

18 TARGETING FOR RENTAL HOUSING.

19 Section 214(1) of the Cranston-Gonzalez National

20 Affordable Housing Act (42 U.S.C. 12744(1)) is amend21 ed—

22 (1) in subparagraph (A)—

23 (A) by striking ‘‘such funds are invested

24 with respect to dwelling units that are occupied
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1 by’’ and inserting ‘‘(i) the families receiving

2 such rental assistance are’’; and

3 (B) by striking ‘‘, and’’ and inserting ‘‘, or

4 (ii) the dwelling units assisted with such funds

5 are occupied by families having such incomes;

6 and’’; and

7 (2) in subparagraph (B)—

8 (A) by striking ‘‘such funds are invested

9 with respect to dwelling units that are occupied

10 by’’ and inserting ‘‘(i) the families receiving

11 such rental assistance are’’; and

12 (B) by inserting before the semicolon at

13 the end the following: ‘‘, or (ii) the dwelling

14 units assisted with such funds are occupied by

15 such households’’.

16 SEC. 204. HOMEOWNERSHIP UNITS.

17 (a) REMOVAL OF FIRST-TIME HOMEBUYER RE18 QUIREMENT.—Section 215(b) of the Cranston-Gonzalez

19 National Affordable Housing Act (42 U.S.C. 12745(b)) is

20 amended—

21 (1) by striking paragraph (3); and

22 (2) by redesignating paragraphs (4) and (5) as

23 paragraphs (3) and (4), respectively.

24 (b) SIMPLIFICATION OF RESALE PROVISIONS.—Sec25 tion 215(b)(3)(B) of the Cranston-Gonzalez National Af-
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1 fordable Housing Act (42 U.S.C. 12745(b)(3)(B)), as so

2 redesignated by subsection (a) of this section, is amended

3 by striking ‘‘subsection’’ and inserting ‘‘title’’.

4 SEC. 205. SIMPLIFICATION OF MATCHING REQUIREMENTS.

5 Section 220(a) of the Cranston-Gonzalez National

6 Affordable Housing Act (42 U.S.C. 12750(a)) is amended

7 to read as follows:

8 ‘‘(a) CONTRIBUTION.—Each participating jurisdic9 tion shall make contributions to housing that qualifies as

10 affordable housing under this title that total, throughout

11 a fiscal year, not less than 25 percent of the funds drawn

12 from the jurisdiction’s HOME Investment Trust Fund in

13 such fiscal year. Such contributions shall be in addition

14 to any amounts made available under section

15 216(3)(A)(ii).’’.

16 SEC. 206. REPEAL OF SEPARATE AUDIT REQUIREMENT.

17 Section 283 of the Cranston-Gonzalez National Af18 fordable Housing Act (42 U.S.C. 12833) is amended—

19 (1) by striking the section designation and

20 heading and inserting the following:

21 ‘‘SEC. 283. AUDITS BY COMPTROLLER GENERAL.’’;

22 (2) by striking subsection (a);

23 (3) in subsection (b)—

24 (A) by striking ‘‘(b) AUDITS BY THE

25 COMPTROLLER GENERAL.—’’;
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1 (B) by redesignating paragraphs (1) and

2 (2) as subsections (a) and (b), respectively; and

3 (C) by moving subsections (a) and (b), as

4 redesignated by subparagraph (B), 2 ems to the

5 left so that such subsections are flush with the

6 left margin; and

7 (4) in subsection (a), as redesignated by para8 graph (3)(B), by striking the second sentence.

9 SEC. 207. ENVIRONMENTAL REVIEW REQUIREMENTS.

10 Section 288 of the Cranston-Gonzalez National Af11 fordable Housing Act (42 U.S.C. 12838) is amended—

12 (1) in subsection (a)—

13 (A) in the first sentence, by striking ‘‘par14 ticipating jurisdictions’’ and inserting ‘‘jurisdic15 tions, Indian tribes, or insular areas’’; and

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

17 sentences: ‘‘The regulations shall provide—

18 ‘‘(1) for the monitoring of the performance of

19 environmental reviews under this section;

20 ‘‘(2) in the discretion of the Secretary, for the

21 provision or facilitation of training for the perform22 ance of such reviews; and

23 ‘‘(3) for the suspension or termination of the

24 assumption under this section.
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1 The Secretary’s duty under the preceding sentence shall

2 not be construed to limit or reduce any responsibility as3 sumed by a State or unit of general local government with

4 respect to any particular release of funds.’’;

5 (2) in the first sentence of subsection (b), by

6 striking ‘‘participating jurisdiction’’ and inserting

7 ‘‘jurisdiction, Indian tribe, or insular area’’;

8 (3) in subsection (c)(4)(B), by striking ‘‘partici9 pating jurisdiction’’ and inserting ‘‘jurisdiction, In10 dian tribe, or insular area’’; and

11 (4) in subsection (d), by striking ‘‘ASSISTANCE

12 TO A STATE.—In the case of assistance to States’’

13 and inserting the following: ‘‘ASSISTANCE TO UNITS

14 OF GENERAL LOCAL GOVERNMENT FROM A

15 STATE.—In the case of assistance to units of gen16 eral local government from a State’’.

17 SEC. 208. USE OF CDBG FUNDS FOR HOME PROGRAM EX18 PENSES.

19 (a) ADMINISTRATIVE EXPENSES.—Section

20 105(a)(13) of the Housing and Community Development

21 Act of 1974 (42 U.S.C. 5305(a)(13)) is amended by in22 serting after ‘‘charges related to’’ the following: ‘‘(A) ad23 ministering the HOME program under title II of the

24 Cranston-Gonzalez National Affordable Housing Act; and

25 (B)’’.
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1 (b) PROJECT DELIVERY COSTS.—Section 105(a)(21)

2 of the Housing and Community Development Act of 1974

3 (42 U.S.C. 5305(a)(21)) is amended—

4 (1) by inserting ‘‘in connection with tenant5 based rental assistance and affordable housing

6 projects assisted under title II of the Cranston-Gon7 zalez National Affordable Housing Act’’ after ‘‘hous8 ing counseling’’; and

9 (2) by striking ‘‘authorized’’ and all that follows

10 through ‘‘any law’’ and inserting ‘‘assisted under

11 title II of the Cranston-Gonzalez National Afford12 able Housing Act’’.

13 SEC. 209. FLEXIBILITY OF HOME PROGRAM FOR DISASTER

14 AREAS.

15 Title II of the Cranston-Gonzalez National Affordable

16 Housing Act (42 U.S.C. 12721 et seq.) is amended by

17 adding at the end the following new section:

18 ‘‘SEC. 290. SUSPENSION OF REQUIREMENTS FOR DISASTER

19 AREAS.

20 ‘‘For the duration of time during which an area has

21 been declared a disaster area by the President under title

22 IV of the Robert T. Stafford Disaster Relief and Emer23 gency Assistance Act, the Secretary may suspend all re24 quirements for purposes of assistance under this title for

25 that area, except for those related to public notice of fund-
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1 ing availability, nondiscrimination, fair housing, labor

2 standards, environmental standards, and low-income hous3 ing affordability.’’.

4 SEC. 210. APPLICABILITY AND REGULATIONS.

5 The amendments made by this title shall apply with

6 respect to any amounts made available to carry out title

7 II of the Cranston-Gonzalez National Affordable Housing

8 Act after the date of the enactment of this Act and any

9 amounts made available to carry out such title before such

10 date of enactment that remain unobligated on such date.

11 The Secretary shall issue any regulations necessary to

12 carry out the amendments made by this title not later than

13 the expiration of the 45-day period beginning on the date

14 of the enactment of this Act.

15 Subtitle B—HOPE Homeownership

16 Program

17 SEC. 221. MATCHING REQUIREMENT UNDER HOPE FOR

18 HOMEOWNERSHIP OF SINGLE FAMILY HOMES

19 PROGRAM.

20 Section 443(c)(1) of the Cranston-Gonzalez National

21 Affordable Housing Act (42 U.S.C. 12893(c)(1)) is

22 amended by striking ‘‘33 percent’’ and inserting ‘‘25 per23 cent’’.
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1 Subtitle C—Community

2 Development Block Grants

3 SEC. 231. SECTION 108 ELIGIBLE ACTIVITIES.

4 The first sentence of section 108(a) of the Housing

5 and Community Development Act of 1974 (42 U.S.C.

6 5308(a)) is amended—

7 (1) by striking ‘‘or’’ after ‘‘section 105(a);’’;

8 and

9 (2) by inserting before the period the following:

10 ‘‘; (5) the acquisition, construction, reconstruction,

11 or installation of public facilities (except for build12 ings for the general conduct of government); or (6)

13 in the case of colonias, public works and site or

14 other improvements’’.

15 SEC. 232. GUARANTEE OF OBLIGATIONS BACKED BY SEC16 TION 108 LOANS.

17 Section 108 of the Housing and Community Develop18 ment Act of 1974 (42 U.S.C. 5308) is amended by adding

19 at the end the following new subsection:

20 ‘‘(q) GUARANTEE OF OBLIGATIONS BACKED BY

21 LOANS.—

22 ‘‘(1) AUTHORITY.—The Secretary may, upon

23 such terms and conditions as the Secretary considers

24 appropriate, guarantee the timely payment of the
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1 principal of and interest on such trust certificates or

2 other obligations as may—

3 ‘‘(A) be offered by the Secretary or by any

4 other offeror approved for purposes of this sub5 section by the Secretary; and

6 ‘‘(B) be based on and backed by a trust or

7 pool composed of notes or other obligations

8 guaranteed or eligible for guarantee by the Sec9 retary under this section.

10 ‘‘(2) FULL FAITH AND CREDIT.—To the same

11 extent as provided in subsection (f), the full faith

12 and credit of the United States is pledged to the

13 payment of all amounts that may be required to be

14 paid under any guarantee made by the Secretary

15 under this subsection.

16 ‘‘(3) SUBROGATION.—If the Secretary pays a

17 claim under a guarantee made under this section,

18 the Secretary shall be subrogated fully to the rights

19 satisfied by such payment.

20 ‘‘(4) EFFECT OF LAWS.—No State or local law,

21 and no Federal law, shall preclude or limit the exer22 cise by the Secretary of—

23 ‘‘(A) the power to contract with respect to

24 public offerings and other sales of notes, trust

25 certificates, and other obligations guaranteed
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1 under this section upon such terms and condi2 tions as the Secretary deems appropriate;

3 ‘‘(B) the right to enforce any such contract

4 by any means deemed appropriate by the Sec5 retary; and

6 ‘‘(C) any ownership rights of the Sec7 retary, as applicable, in notes, certificates, or

8 other obligations guaranteed under this section,

9 or constituting the trust or pool against which

10 trust certificates, or other obligations guaran11 teed under this section, are offered.’’.

12 SEC. 233. FLEXIBILITY OF CDBG PROGRAM FOR DISASTER

13 AREAS.

14 Title I of the Housing and Community Development

15 Act of 1974 (42 U.S.C. 5301 et seq.) is amended by add16 ing at the end the following new section:

17 ‘‘SEC. 122. SUSPENSION OF REQUIREMENTS FOR DISASTER

18 AREAS.

19 ‘‘For the duration of time during which an area has

20 been declared a disaster area by the President under title

21 IV of the Robert T. Stafford Disaster Relief and Emer22 gency Assistance Act, the Secretary may suspend all re23 quirements for purposes of assistance under section 106

24 for that area, except for those related to public notice of

25 funding availability, nondiscrimination, fair housing, labor
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1 standards, environmental standards, and requirements

2 that activities benefit persons of low- and moderate-in3 come.’’.

4 TITLE III—TECHNICAL

5 AMENDMENTS

6 SEC. 301. DEFINITION OF ‘‘FAMILIES’’.

7 The first sentence of section 3(b)(3)(B) of the United

8 States Housing Act of 1937 (42 U.S.C. 1437a(b)(3)(B))

9 is amended by striking ‘‘means families with children’’ and

10 inserting ‘‘includes families with children and’’.

11 SEC. 302. ELIMINATION OF REQUIREMENT TO IDENTIFY

12 CIAP REPLACEMENT NEEDS.

13 Section 14 of the United States Housing Act of 1937

14 (42 U.S.C. 1437l) is amended—

15 (1) in subsection (d)—

16 (A) by striking paragraph (2);

17 (B) in paragraph (4), in the matter pre18 ceding subparagraph (A)—

19 (i) by striking ‘‘and replacements,’’;

20 and

21 (ii) by striking ‘‘(1), (2), and (3)’’ and

22 inserting ‘‘(1) and (2)’’; and

23 (C) by redesignating paragraphs (3) and

24 (4) as paragraphs (2) and (3), respectively; and

25 (2) in subsection (f)(1)—
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1 (A) in subparagraph (A), by striking

2 ‘‘(d)(4)(A)’’ and inserting ‘‘(d)(3)(A)’’;

3 (B) by striking subparagraph (B);

4 (C) in subparagraph (C), by striking

5 ‘‘(d)(4)’’ and inserting ‘‘(d)(3)’’;

6 (D) in subparagraph (D)—

7 (i) by striking ‘‘(1), (2), and (3)’’ and

8 inserting ‘‘(1) and (2)’’; and

9 (ii) by striking ‘‘(d)(4)’’ and inserting

10 ‘‘(d)(3)’’; and

11 (E) by redesignating subparagraphs (C)

12 and (D), as so amended, as subparagraphs (B)

13 and (C), respectively;

14 (3) in subsection (g), by striking ‘‘(d)(4)’’ and

15 inserting ‘‘(d)(3)’’; and

16 (4) in subsection (h)(2), by striking ‘‘(d)(4)’’

17 and inserting ‘‘(d)(3)’’.

18 SEC. 303. PROJECT-BASED ACCOUNTING.

19 Section 6(c)(4)(E) of the United States Housing Act

20 of 1937 (42 U.S.C. 1437d(c)(4)(E)) is amended by strik21 ing ‘‘250’’ and inserting ‘‘500’’.
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1 SEC. 304. OPERATING SUBSIDY ADJUSTMENTS FOR ANTICI2 PATED FRAUD RECOVERIES.

3 Section 9(a) of the United States Housing Act of

4 1937 (42 U.S.C. 1437g(a)) is amended by adding at the

5 end the following new paragraph:

6 ‘‘(4) Adjustments to a public housing agency’s oper7 ating subsidy made by the Secretary under this section

8 shall reflect actual changes in rental income collections re9 sulting from the application of section 904 of the Stewart

10 B. McKinney Homeless Assistance Amendments Act of

11 1988.’’.

12 SEC. 305. ENVIRONMENTAL REVIEW PROVISIONS.

13 (a) LEAD-BASED PAINT HAZARD REDUCTION.—Sec14 tion 1011 of the Housing and Community Development

15 Act of 1992 (42 U.S.C. 4852) is amended—

16 (1) by redesignating subsection (o) as sub17 section (p); and

18 (2) by inserting after subsection (n) the follow19 ing new subsection:

20 ‘‘(o) ENVIRONMENTAL REVIEW.—

21 ‘‘(1) IN GENERAL.—For purposes of environ22 mental review, decisionmaking, and action pursuant

23 to the National Environmental Policy Act of 1960

24 and other provisions of law that further the purposes

25 of such Act, a grant under this section shall be

26 treated as assistance under the HOME Investment
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1 Partnership Act, established under title II of the

2 Cranston-Gonzalez National Affordable Housing

3 Act, and shall be subject to the regulations promul4 gated by the Secretary to implement section 288 of

5 such Act.

6 ‘‘(2) APPLICABILITY.—This subsection shall

7 apply to—

8 ‘‘(A) grants awarded under this section;

9 and

10 ‘‘(B) grants awarded to States and units

11 of general local government for the abatement

12 of significant lead-based paint and lead dust

13 hazards in low- and moderate-income owner-oc14 cupied units and low-income privately owned

15 rental units pursuant to title II of the Depart16 ments of Veterans Affairs and Housing and

17 Urban Development, and Independent Agencies

18 Appropriations Act, 1992 (Public Law 102–

19 139, 105 Stat. 736).’’.

20 (b) PROGRAMS UNDER UNITED STATES HOUSING

21 ACT OF 1937.—Title I of the United States Housing Act

22 of 1937 (42 U.S.C. 1437 et seq.) is amended by adding

23 at the end the following new section:

24 ‘‘SEC. 26. ENVIRONMENTAL REVIEWS.

25 ‘‘(a) IN GENERAL.—
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1 ‘‘(1) RELEASE OF FUNDS.—In order to assure

2 that the policies of the National Environmental Pol3 icy Act of 1969 and other provisions of law which

4 further the purposes of such Act (as specified in reg5 ulations issued by the Secretary) are most effectively

6 implemented in connection with the expenditure of

7 funds under this title, and to assure to the public

8 undiminished protection of the environment, the Sec9 retary may, under such regulations, in lieu of the en10 vironmental protection procedures otherwise applica11 ble, provide for the release of funds for projects or

12 activities under this title, as specified by the Sec13 retary upon the request of a public housing agency

14 under this section, if the State or unit of general

15 local government, as designated by the Secretary in

16 accordance with regulations, assumes all of the re17 sponsibilities for environmental review, decisionmak18 ing, and action pursuant to such Act, and such other

19 provisions of law as the regulations of the Secretary

20 may specify, which would otherwise apply to the Sec21 retary with respect to the release of funds.

22 ‘‘(2) IMPLEMENTATION.—The Secretary, after

23 consultation with the Council on Environmental

24 Quality, shall issue such regulations as may be nec-
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1 essary to carry out this section. Such regulations

2 shall specify the programs to be covered.

3 ‘‘(b) PROCEDURE.—The Secretary shall approve the

4 release of funds subject to the procedures authorized by

5 this section only if, not less than 15 days prior to such

6 approval and prior to any commitment of funds to such

7 projects or activities, the public housing agency has sub8 mitted to the Secretary a request for such release accom9 panied by a certification of the State or unit of general

10 local government which meets the requirements of sub11 section (c). The Secretary’s approval of any such certifi12 cation shall be deemed to satisfy the Secretary’s respon13 sibilities under the National Environmental Policy Act of

14 1969 and such other provisions of law as the regulations

15 of the Secretary specify insofar as those responsibilities

16 relate to the release of funds which are covered by such

17 certification.

18 ‘‘(c) CERTIFICATION.—A certification under the pro19 cedures authorized by this section shall—

20 ‘‘(1) be in a form acceptable to the Secretary;

21 ‘‘(2) be executed by the chief executive officer

22 or other officer of the State or unit of general local

23 government who qualifies under regulations of the

24 Secretary;
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1 ‘‘(3) specify that the State or unit of general

2 local government under this section has fully carried

3 out its responsibilities as described under subsection

4 (a); and

5 ‘‘(4) specify that the certifying officer—

6 ‘‘(A) consents to assume the status of a re7 sponsible Federal official under the National

8 Environmental Policy Act of 1969 and agrees

9 to comply with each provision of law specified

10 in regulations issued by the Secretary insofar as

11 the provisions of such Act or other such provi12 sion of law apply pursuant to subsection (a);

13 and

14 ‘‘(B) is authorized and consents on behalf

15 of the State or unit of general local government

16 and himself or herself to accept the jurisdiction

17 of the Federal courts for the purpose of en18 forcement of his or her responsibilities as such

19 an official.

20 ‘‘(d) APPROVAL BY STATES.—In cases in which a

21 unit of general local government carries out the respon22 sibilities described in subsection (c), the Secretary may

23 permit the State to perform those actions of the Secretary

24 described in subsection (b) and the performance of such

25 actions by the State, where permitted by the Secretary,
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1 shall be deemed to satisfy the Secretary’s responsibilities

2 referred to in the second sentence of subsection (b).’’.

3 (c) SPECIAL PROJECTS.—

4 (1) IN GENERAL.—

5 (A) RELEASE OF FUNDS.—In order to as6 sure that the policies of the National Environ7 mental Policy Act of 1969 and other provisions

8 of law which further the purposes of such Act

9 (as specified in regulations issued by the Sec10 retary) are most effectively implemented in con11 nection with the expenditure of funds for spe12 cial projects appropriated under an appropria13 tions Act for the Department of Housing and

14 Urban Development, such as special projects

15 under the head ‘‘Annual Contributions for As16 sisted Housing’’ in title II of the Departments

17 of Veterans Affairs and Housing and Urban

18 Development, and Independent Agencies Appro19 priations Act, 1993, and to assure to the public

20 undiminished protection of the environment, the

21 Secretary of Housing and Urban Development

22 may, under such regulations, in lieu of the envi23 ronmental protection procedures otherwise ap24 plicable, provide for the release of funds for

25 particular special projects upon the request of
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1 recipients of special projects assistance, if the

2 State or unit of general local government, as

3 designated by the Secretary in accordance with

4 regulations, assumes all of the responsibilities

5 for environmental review, decisionmaking, and

6 action pursuant to such Act, and such other

7 provisions of law as the regulations of the Sec8 retary specify, that would otherwise apply to

9 the Secretary were the Secretary to undertake

10 such special projects as Federal projects.

11 (B) IMPLEMENTATION.—The Secretary

12 shall issue regulations to carry out this sub13 section only after consultation with the Council

14 on Environmental Quality. Such regulations

15 shall—

16 (i) provide for monitoring of the per17 formance of environmental reviews under

18 this subsection;

19 (ii) in the discretion of the Secretary,

20 provide for the provision or facilitation of

21 training for such performance; and

22 (iii) subject to the discretion of the

23 Secretary, provide for suspension or termi24 nation by the Secretary of the assumption

25 under subparagraph (A).
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1 (C) RESPONSIBILITIES OF STATE OR UNIT

2 OF GENERAL LOCAL GOVERNMENT.—The Sec3 retary’s duty under subparagraph (B) shall not

4 be construed to limit any responsibility assumed

5 by a State or unit of general local government

6 with respect to any particular release of funds

7 under subparagraph (A).

8 (2) PROCEDURE.—The Secretary shall approve

9 the release of funds for projects subject to the proce10 dures authorized by this subsection only if, not less

11 than 15 days prior to such approval and prior to any

12 commitment of funds to such projects, the recipient

13 submits to the Secretary a request for such release,

14 accompanied by a certification of the State or unit

15 of general local government which meets the require16 ments of paragraph (3). The Secretary’s approval of

17 any such certification shall be deemed to satisfy the

18 Secretary’s responsibilities under the National Envi19 ronmental Policy Act of 1969 and such other provi20 sions of law as the regulations of the Secretary

21 specify insofar as those responsibilities relate to the

22 releases of funds for special projects to be carried

23 out pursuant thereto which are covered by such cer24 tification.
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1 (3) CERTIFICATION.—A certification under the

2 procedures authorized by this subsection shall—

3 (A) be in a form acceptable to the sec4 retary;

5 (B) be executed by the chief executive offi6 cer or other officer of the State or unit of gen7 eral local government who qualifies under regu8 lations of the Secretary;

9 (C) specify that the State or unit of gen10 eral local government under this subsection has

11 fully carried out its responsibilities as described

12 under paragraph (1); and

13 (D) specify that the certifying officer—

14 (i) consents to assume the status of a

15 responsible Federal official under the Na16 tional Environmental Policy Act of 1969

17 and agrees to comply with each provision

18 of law specified in regulations issued by

19 the Secretary insofar as the provisions of

20 such Act or other such provision of law

21 apply pursuant to paragraph (1); and

22 (ii) is authorized and consents on be23 half of the State or unit of general local

24 government and himself or herself to ac25 cept the jurisdiction of the Federal courts
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1 for the purpose of enforcement of the re2 sponsibilities as such an official.

3 (4) APPROVAL BY STATES.—In cases in which

4 a unit of general local government carries out the re5 sponsibilities described in paragraph (1), the Sec6 retary may permit the State to perform those ac7 tions of the Secretary described in paragraph (2)

8 and the performance of such actions by the State,

9 where permitted by the Secretary, shall be deemed

10 to satisfy the Secretary’s responsibilities referred to

11 in the second sentence of paragraph (2).

12 SEC. 306. CONTRACT RENEWAL FOR SECTION 23 CONVER13 SION PROJECTS.

14 (a) IN GENERAL.—Leased housing contracts under

15 section 23 of the United States Housing Act of 1937, as

16 such section existed before the date of enactment of the

17 Housing and Community Development Act of 1974,

18 that—

19 (1) were converted to section 8 contracts on

20 terms similar to or the same as the terms of the sec21 tion 8 new construction program, and

22 (2) expire during fiscal year 1994 or 1995,

23 shall be extended for a period not to exceed 5 years as

24 if the rents on such projects were established under the

25 section 8 new construction program, except that section
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1 8(c)(2)(C) of the United States Housing Act of 1937 shall

2 not apply to such contracts.

3 (b) BUDGET COMPLIANCE.—To the extent that sub4 section (a) results in additional costs under this section,

5 such paragraph shall be effective only to the extent that

6 amounts to cover such additional costs are provided in ad7 vance in appropriation Acts.

8 SEC. 307. CORRECTION OF FHA MULTIFAMILY MORTGAGE

9 LIMITS.

10 The National Housing Act (12 U.S.C. 1701 et seq.)

11 is amended in sections 207(c)(3), 213(b)(2),

12 220(d)(3)(B)(iii), and 234(e)(3) by striking ‘‘$59,160’’

13 each place it appears and inserting ‘‘$56,160’’.

14 SEC. 308. AMENDMENTS TO FHA MULTIFAMILY RISK-SHAR15 ING AND HOUSING FINANCE AGENCY PILOT

16 PROGRAMS.

17 (a) RISK-SHARING PILOT PROGRAM.—Section

18 542(b) of the Housing and Community Development Act

19 of 1992 (12 U.S.C. 1707 note) is amended—

20 (1) by striking paragraphs (1) and (2) and in21 serting the following new paragraphs:

22 ‘‘(1) IN GENERAL.—The Secretary shall carry

23 out a pilot program in conjunction with qualified

24 participating entities to determine the effectiveness

25 of Federal credit enhancement for loans for afford-
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1 able multifamily housing through a system of risk2 sharing agreements with such entities.

3 ‘‘(2) PROGRAM REQUIREMENTS.—

4 ‘‘(A) IN GENERAL.—In carrying out the

5 pilot program under this subsection, the Sec6 retary shall enter into risk-sharing agreements

7 with qualified participating entities.

8 ‘‘(B) MORTGAGE INSURANCE AND REIN9 SURANCE.—Agreements under subparagraph

10 (A) may provide for (i) insurance through the

11 Federal Housing Administration of loans for af12 fordable multifamily housing originated by or

13 through, or purchased by, qualified participat14 ing entities, and (ii) reinsurance, including rein15 surance of pools of loans, on affordable multi16 family housing. In entering into risk-sharing

17 agreements under this subsection covering

18 mortgages, the Secretary may give preference to

19 mortgages that are not already in the portfolios

20 of qualified participating entities.

21 ‘‘(C) RISK APPORTIONMENT.—Agreements

22 entered into under this subsection between the

23 Secretary and a qualified participating entity

24 shall specify the percentage of loss that each of

25 the parties to the agreement will assume in the
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1 event of default of the insured or reinsured

2 multifamily mortgage. Such agreements shall

3 specify that the qualified participating entity

4 and the Secretary shall share any loss in ac5 cordance with the risk-sharing agreement.

6 ‘‘(D) REIMBURSEMENT CAPACITY.—Agree7 ments entered into under this subsection be8 tween the Secretary and a qualified participat9 ing entity shall provide evidence acceptable to

10 the Secretary of the capacity of such entity to

11 fulfill any reimbursement obligations made pur12 suant to this subsection. Evidence of such ca13 pacity which may be considered by the Sec14 retary may include—

15 ‘‘(i) a pledge of the full faith and

16 credit of a qualified participating entity to

17 fulfill any obligations entered into by the

18 entity;

19 ‘‘(ii) reserves pledged or otherwise re20 stricted by the qualified participating en21 tity in an amount equal to an agreed upon

22 percentage of the loss assumed by the en23 tity under subparagraph (C);

24 ‘‘(iii) funds pledged through a State

25 or local guarantee fund; or
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1 ‘‘(iv) any other form of evidence mu2 tually agreed upon by the Secretary and

3 the qualified participating entity.

4 ‘‘(E) UNDERWRITING STANDARDS.—The

5 Secretary shall allow any qualified participating

6 entity to use its own underwriting standards

7 and loan terms and conditions for purposes of

8 underwriting loans to be insured under this

9 subsection, except as provided in this section,

10 without further review by the Secretary, except

11 that the Secretary may impose additional un12 derwriting criteria and loan terms and condi13 tions for contractual agreements where the Sec14 retary retains more than 50 percent of the risk

15 of loss. Any financing permitted on property in16 sured under this subsection other than the first

17 mortgage shall be expressly subordinate to the

18 insured mortgage.

19 ‘‘(F) AUTHORITY OF SECRETARY.—The

20 Secretary, upon request of a qualified partici21 pating entity, may insure or reinsure and make

22 commitments to insure or reinsure under this

23 section any mortgage, advance, loan, or pool of

24 mortgages otherwise eligible under this section,

25 pursuant to a risk-sharing agreement providing
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1 that the qualified participating entity will carry

2 out (under a delegation or otherwise, and with

3 or without compensation, but subject to audit,

4 exception, or review requirements) such credit

5 approval, appraisal, inspection, issuance of com6 mitments, approval of insurance of advances,

7 cost certification, servicing, property disposi8 tion, or other functions as the Secretary shall

9 approve as consistent with the purpose of this

10 section. All appraisals of property for mortgage

11 insurance under this section shall be completed

12 by a Certified General Appraiser in accordance

13 with the Uniform Standards of Professional Ap14 praisal Practice.

15 ‘‘(G) DISCLOSURE OF RECORDS.—Quali16 fied participating entities shall make available

17 to the Secretary or the Secretary’s designee, at

18 the Secretary’s request, such financial and

19 other records as the Secretary deems necessary

20 for purposes of review and monitoring for the

21 program under this section.

22 ‘‘(H) INELIGIBILITY OF HOUSING FOR

23 TRANSIENT OR HOTEL PURPOSES.—Notwith24 standing any other provision of this section, no

25 new, existing, or rehabilitated multifamily hous-
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1 ing with respect to which a mortgage is insured

2 or reinsured under this subsection shall be op3 erated for transient or hotel purposes. For pur4 poses of this paragraph, the term ‘rental for

5 transient or hotel purposes’ shall have such

6 meaning as prescribed by the Secretary, except

7 that rental for any period less than 30 days

8 shall constitute rental for such purposes.’’;

9 (2) in paragraph (4), by striking ‘‘financial in10 stitutions and entities to be eligible to enter into re11 insurance agreements’’ and inserting ‘‘eligibility

12 under this subsection of qualified participating enti13 ties’’;

14 (3) in the first sentence of paragraph (5), by

15 striking ‘‘1993 and 1994’’ and inserting ‘‘1995 and

16 1996’’;

17 (4) by striking paragraph (8) and inserting the

18 following new paragraph:

19 ‘‘(11) IMPLEMENTATION.—The Secretary shall

20 take any administrative actions necessary to initiate

21 the pilot program under this subsection.’’; and

22 (5) by inserting after paragraph (7) the follow23 ing new paragraphs:

24 ‘‘(8) PROHIBITION ON GINNIE MAE

25 SECURITIZATION.—The Government National Mort-
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1 gage Association shall not securitize any multifamily

2 loans insured or reinsured under this subsection.

3 ‘‘(9) QUALIFICATION AS AFFORDABLE HOUS4 ING.—Multifamily housing securing loans insured or

5 reinsured under this subsection shall qualify as af6 fordable only if the housing is occupied by families

7 and bears rents not greater than the gross rent for

8 rent-restricted residential units as determined under

9 section 42(g) of the Internal Revenue Code of 1986.

10 ‘‘(10) CERTIFICATION OF SUBSIDY LAYERING

11 COMPLIANCE.—In the case of projects allocated a

12 low-income housing tax credit pursuant to section 42

13 of the Internal Revenue Code of 1986, the require14 ments of section 102(d) of the Department of Hous15 ing and Urban Development Reform Act of 1989

16 may be satisfied in connection with a commitment to

17 insure a mortgage under this subsection by a certifi18 cation by a housing credit agency (including an en19 tity established by a State that provides mortgage

20 insurance) to the Secretary that the combination of

21 assistance within the jurisdiction of the Secretary

22 and other government assistance provided in connec23 tion with a property for which a mortgage is to be

24 insured shall not be any greater than is necessary to

25 provide affordable housing.’’.
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1 (b) HOUSING FINANCE AGENCY PILOT PROGRAM.—

2 Section 542(c) of the Housing and Community Develop3 ment Act of 1992 (12 U.S.C. 1707 note) is amended—

4 (1) in paragraph (1), by inserting after ‘‘quali5 fied housing finance agencies’’ the following: ‘‘(in6 cluding entities established by States that provide

7 mortgage insurance)’’;

8 (2) in paragraph (2)—

9 (A) in subparagraph (C), by striking the

10 last sentence and inserting the following: ‘‘Such

11 agreements shall specify that the qualified

12 housing finance agency and the Secretary shall

13 share any loss in accordance with the risk-shar14 ing agreement.’’; and

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

16 subparagraph:

17 ‘‘(F) DISCLOSURE OF RECORDS.—Quali18 fied housing finance agencies shall make avail19 able to the Secretary such financial and other

20 records as the Secretary deems necessary for

21 program review and monitoring purposes.’’;

22 (3) in paragraph (7)—

23 (A) by striking ‘‘very low-income’’; and

24 (B) by striking ‘‘(2)’’; and
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1 (4) by adding at the end the following new

2 paragraphs:

3 ‘‘(9) ENVIRONMENTAL AND OTHER REVIEWS.—

4 ‘‘(A) ENVIRONMENTAL REVIEWS.—

5 ‘‘(i) IN GENERAL.—(I) In order to as6 sure that the policies of the National Envi7 ronmental Policy Act of 1969 and other

8 provisions of law which further the pur9 poses of such Act (as specified in regula10 tions issued by the Secretary) are most ef11 fectively implemented in connection with

12 the insurance of mortgages under sub13 section (c)(2), and to assure to the public

14 undiminished protection of the environ15 ment, the Secretary may, under such regu16 lations, in lieu of the environmental protec17 tion procedures otherwise applicable, pro18 vide for agreements to endorse for insur19 ance mortgages under subsection (c)(2)

20 upon the request of qualified housing fi21 nance agencies under this subsection, if the

22 State or unit of general local government,

23 as designated by the Secretary in accord24 ance with regulations, assumes all of the

25 responsibilities for environmental review,
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1 decisionmaking, and action pursuant to

2 such Act, and such other provisions of law

3 as the regulations of the Secretary may

4 specify, that would otherwise apply to the

5 Secretary with respect to the insurance of

6 mortgages on particular properties.

7 ‘‘(II) The Secretary shall issue regula8 tions to carry out this subparagraph only

9 after consultation with the Council on En10 vironmental Quality. Such regulations

11 shall, among other matters, provide—

12 ‘‘(aa) for the monitoring of the

13 performance of environmental reviews

14 under this subparagraph;

15 ‘‘(bb) subject to the discretion of

16 the Secretary, for the provision or fa17 cilitation of training for such perform18 ance; and

19 ‘‘(cc) subject to the discretion of

20 the Secretary, for the suspension or

21 termination by the Secretary of the

22 qualified housing finance agency’s re23 sponsibilities under subclause (I).

24 ‘‘(III) The Secretary’s duty under

25 subclause (II) shall not be construed to
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1 limit any responsibility assumed by a State

2 or unit of general local government with

3 respect to any particular property under

4 subclause (I).

5 ‘‘(ii) PROCEDURE.—The Secretary

6 shall approve a mortgage for the provision

7 of mortgage insurance subject to the proce8 dures authorized by this paragraph only if,

9 not less than 15 days prior to such ap10 proval, prior to any approval, commitment,

11 or endorsement of mortgage insurance on

12 the property on behalf of the Secretary,

13 and prior to any commitment by the quali14 fied housing finance agency to provide fi15 nancing under the risk-sharing agreement

16 with respect to the property, the qualified

17 housing finance agency submits to the Sec18 retary a request for such approval, accom19 panied by a certification of the State or

20 unit of general local government that

21 meets the requirements of clause (iii). The

22 Secretary’s approval of any such certifi23 cation shall be deemed to satisfy the Sec24 retary’s responsibilities under the National

25 Environmental Policy Act of 1969 and
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1 such other provisions of law as the regula2 tions of the Secretary specify insofar as

3 those responsibilities relate to the provision

4 of mortgage insurance on the property that

5 is covered by such certification.

6 ‘‘(iii) CERTIFICATION.—A certification

7 under the procedures authorized by this

8 paragraph shall—

9 ‘‘(I) be in a form acceptable to

10 the Secretary;

11 ‘‘(II) be executed by the chief ex12 ecutive officer or other officer of the

13 State or unit of general local govern14 ment who qualifies under regulations

15 of the Secretary;

16 ‘‘(III) specify that the State or

17 unit of general local government

18 under this section has fully carried

19 out its responsibilities as described

20 under clause (i); and

21 ‘‘(IV) specify that the certifying

22 officer consents to assume the status

23 of a responsible Federal official under

24 the National Environmental Policy

25 Act of 1969 and under each provision
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1 of law specified in regulations issued

2 by the Secretary insofar as the provi3 sions of such Act or such other provi4 sions of law apply pursuant to clause

5 (i), and is authorized and consents on

6 behalf of the State or unit of general

7 local government and himself or her8 self to accept the jurisdiction of the

9 Federal courts for the purpose of en10 forcement of the responsibilities as

11 such an official.

12 ‘‘(iv) APPROVAL BY STATES.—In

13 cases in which a unit of general local gov14 ernment carries out the responsibilities de15 scribed in clause (i), the Secretary may

16 permit the State to perform those actions

17 of the Secretary described in clause (ii)

18 and the performance of such actions by the

19 State, where permitted by the Secretary,

20 shall be deemed to satisfy the Secretary’s

21 responsibilities referred to in the second

22 sentence of clause (ii).

23 ‘‘(B) LEAD-BASED PAINT POISONING PRE24 VENTION.—In carrying out the requirements of

25 section 302 of the Lead-Based Paint Poisoning
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1 Prevention Act, the Secretary may provide by

2 regulation for the assumption of all or part of

3 the Secretary’s duties under such Act by quali4 fied housing finance agencies, for purposes of

5 this section.

6 ‘‘(C) CERTIFICATION OF SUBSIDY

7 LAYERING COMPLIANCE.—The requirements of

8 section 102(d) of the Department of Housing

9 and Urban Development Reform Act of 1989

10 may be satisfied in connection with a commit11 ment to insure a mortgage under this sub12 section by a certification by a housing credit

13 agency (including an entity established by a

14 State that provides mortgage insurance) to the

15 Secretary that the combination of assistance

16 within the jurisdiction of the Secretary and

17 other government assistance provided in connec18 tion with a property for which a mortgage is to

19 be insured shall not be any greater than is nec20 essary to provide affordable housing.

21 ‘‘(10) DEFINITIONS.—For purposes of this sub22 section, the following definitions shall apply:

23 ‘‘(A) MORTGAGE.—The term ‘mortgage’

24 means a first mortgage on real estate that is—

25 ‘‘(i) owned in fee simple; or
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1 ‘‘(ii) subject to a leasehold interest

2 that—

3 ‘‘(I) has a term of not less than

4 99 years and is renewable; or

5 ‘‘(II) has a remaining term that

6 extends beyond the maturity of the

7 mortgage for a period of not less than

8 10 years.

9 ‘‘(B) FIRST MORTGAGE.—The term ‘first

10 mortgage’ means a single first lien given to se11 cure advances on, or the unpaid purchase price

12 of, real estate, under the laws of the State in

13 which the real estate is located, together with

14 the credit instrument, if any, secured thereby.

15 Any other financing permitted on property in16 sured under this section must be expressly sub17 ordinate to the insured mortgage.

18 ‘‘(C) UNIT OF GENERAL LOCAL GOVERN19 MENT; STATE.—The terms ‘unit of general local

20 government’ and ‘State’ have the same mean21 ings as in section 102(a) of the Housing and

22 Community Development Act of 1974.’’.

23 (c) DEFINITION OF ‘‘MULTIFAMILY HOUSING’’.—

24 Section 544(1) of the Housing and Community Develop-
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1 ment Act of 1992 (12 U.S.C. 1707 note) is amended to

2 read as follows:

3 ‘‘(1) The term ‘multifamily housing’ means

4 housing accommodations on the mortgaged property

5 that are designed principally for residential use, con6 form to standards satisfactory to the Secretary, and

7 consist of not less than 5 rental units on 1 site.

8 These units may be detached, semidetached, row

9 house, or multifamily structures.’’.

10 SEC. 309. SUBSIDY LAYERING REVIEW.

11 Section 911 of the Housing and Community Develop12 ment Act of 1992 (42 U.S.C. 3545 note) is amended—

13 (1) by striking subsection (a) and inserting the

14 following new subsection:

15 ‘‘(a) CERTIFICATION OF SUBSIDY LAYERING COM16 PLIANCE.—The requirements of section 102(d) of the De17 partment of Housing and Urban Development Reform Act

18 of 1989 may be satisfied in connection with a project re19 ceiving assistance under a program that is within the ju20 risdiction of the Department of Housing and Urban Devel21 opment and under section 42 of the Internal Revenue

22 Code of 1986 by a certification by a housing credit agency

23 to the Secretary, submitted in accordance with guidelines

24 established by the Secretary, that the combination of as25 sistance within the jurisdiction of the Secretary and other
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1 government assistance provided in connection with a prop2 erty for which assistance is to be provided within the juris3 diction of the Department of Housing and Urban Develop4 ment and under section 42 of the Internal Revenue Code

5 of 1986 shall not be any greater than is necessary to pro6 vide affordable housing.’’; and

7 (2) by striking subsection (c) and inserting the

8 following new subsection:

9 ‘‘(c) REVOCATION BY SECRETARY.—If the Secretary

10 determines that a housing credit agency has failed to com11 ply with the guidelines established under subsection (a),

12 the Secretary—

13 ‘‘(1) may inform the housing credit agency that

14 the agency may no longer submit certification of

15 subsidy layering compliance under this section; and

16 ‘‘(2) shall carry out section 102(d) of the Hous17 ing and Urban Development Reform Act relating to

18 affected projects allocated a low-income housing tax

19 credit pursuant to section 42 of the Internal Reve20 nue Code of 1986.’’.

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