II

106TH CONGRESS

2D SESSION S. 2997

To establish a National Housing Trust Fund in the Treasury of the United

States to provide for the development of decent, safe, and affordable

housing for low-income families.

IN THE SENATE OF THE UNITED STATES

JULY 27, 2000

Mr. KERRY (for himself, Mr. JEFFORDS, Mr. SARBANES, Mr. LEAHY, Mr.

BRYAN, Mr. REED, Mr. L. CHAFEE, and Mr. WELLSTONE) introduced

the following bill; which was read twice and referred to the Committee

on Banking, Housing and Urban Affairs

A BILL

To establish a National Housing Trust Fund in the Treasury

of the United States to provide for the development

of decent, safe, and affordable housing for low-income

families.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘National Affordable

5 Housing Trust Fund Act of 2000’’.

6 SEC. 2. PURPOSES.

7 The purposes of this Act are to—
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1 (1) fill the growing gap in the national ability

2 to build affordable housing by using profits gen3 erated by Federal housing programs to fund addi4 tional housing activities, and not supplant existing

5 housing appropriations; and

6 (2) enable rental housing to be built for those

7 families with the greatest need in areas with the

8 greatest opportunities in mixed-income settings and

9 to promote homeownership for low-income families.

10 SEC. 3. NATIONAL HOUSING TRUST FUND.

11 (a) ESTABLISHMENT OF TRUST FUND.—There is es12 tablished in the Treasury of the United States a trust fund

13 to be known as the ‘‘National Affordable Housing Trust

14 Fund’’ (referred to in this Act as the ‘‘Trust Fund’’) for

15 the purposes of promoting the development of affordable

16 housing.

17 (b) DEPOSITS TO THE TRUST FUND.—For fiscal

18 year 2001 and each fiscal year thereafter, there is appro19 priated to the Trust Fund an amount equal to the sum

20 of—

21 (1) any revenue generated by the Mutual Mort22 gage Insurance Fund of the Federal Housing Ad23 ministration in excess of the amount necessary for

24 the Mutual Mortgage Insurance Fund to maintain a
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1 capital ratio of 3 percent for the preceding fiscal

2 year; and

3 (2) any revenue generated by the Government

4 National Mortgage Association in excess of the

5 amount necessary to pay the administrative costs

6 and expenses necessary to ensure the safety and

7 soundness of the Government National Mortgage As8 sociation for the preceding fiscal year, as determined

9 by the Secretary.

10 (c) EXPENDITURES FROM THE TRUST FUND.—For

11 fiscal year 2001 and each fiscal year thereafter, amounts

12 appropriated to the Trust Fund shall be available to the

13 Secretary of Housing and Urban Development for use in

14 accordance with section 4.

15 SEC. 4. ADMINISTRATION OF NATIONAL AFFORDABLE

16 HOUSING TRUST FUND.

17 (a) DEFINITIONS.—In this section:

18 (1) AFFORDABLE HOUSING.—The term ‘‘afford19 able housing’’ means housing for rental that bears

20 rents not greater than the lesser of—

21 (A) the existing fair market rent for com22 parable units in the area, as established by the

23 Secretary under section 8 of the United States

24 Housing Act of 1937 (42 U.S.C. 1437f); or
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1 (B) a rent that does not exceed 30 percent

2 of the adjusted income of a family whose in3 come equals 65 percent of the median income

4 for the area, as determined by the Secretary,

5 with adjustment for number of bedrooms in the

6 unit, except that the Secretary may establish

7 income ceilings higher or lower than 65 percent

8 of the median for the area on the basis of the

9 findings of the Secretary that such variations

10 are necessary because of prevailing levels of

11 construction costs or fair market rents, or un12 usually high or low family incomes.

13 (2) CONTINUED ASSISTANCE RENTAL SUBSIDY

14 PROGRAM.—The term ‘‘continued assistance rental

15 subsidy program’’ means a program under which—

16 (A) project-based assistance is provided for

17 not more than 3 years to a family in an afford18 able housing unit developed with assistance

19 made available under subsection (c) or (d) in a

20 project that partners with a public housing

21 agency, which agency agrees to provide the as22 sisted family with a priority for the receipt of

23 a voucher under section 8(o) of the United

24 States Housing Act of 1937 (42 U.S.C.

25 1437f(o)) if the family chooses to move after an
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1 initial year of occupancy and the public housing

2 agency agrees to refer eligible voucher holders

3 to the property when vacancies occur; and

4 (B) after 3 years, subject to appropria5 tions, continued assistance is provided under

6 section 8(o) of the United States Housing Act

7 of 1937 (42 U.S.C. 1437f(o)), notwithstanding

8 any provision to the contrary in that section, if

9 administered to provide families with the option

10 of continued assistance with tenant-based

11 vouchers, if such a family chooses to move after

12 an initial year of occupancy and the public

13 housing agency agrees to refer eligible voucher

14 holders to the property when vacancies occur.

15 (3) ELIGIBLE ACTIVITIES.—The term ‘‘eligible

16 activities’’ means activities relating to the develop17 ment of affordable housing, including—

18 (A) the construction of new housing;

19 (B) the acquisition of real property;

20 (C) site preparation and improvement, in21 cluding demolition;

22 (D) substantial rehabilitation of existing

23 housing; and
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1 (E) rental subsidy for not more than 3

2 years under a continued assistance rental sub3 sidy program.

4 (4) ELIGIBLE ENTITY.—The term ‘‘eligible enti5 ty’’ includes any public or private nonprofit or for6 profit entity, unit of local government, regional plan7 ning entity, and any other entity engaged in the de8 velopment of affordable housing, as determined by

9 the Secretary.

10 (5) ELIGIBLE INTERMEDIARY.—The term ‘‘eli11 gible intermediary’’ means—

12 (A) a nonprofit community development

13 corporation;

14 (B) a community development financial in15 stitution (as defined in section 103 of the Com16 munity Development Banking and Financial In17 stitutions Act of 1994 (12 U.S.C. 4702));

18 (C) a State or local trust fund;

19 (D) any entity eligible for assistance under

20 section 4 of the HUD Demonstration Act of

21 1993 (42 U.S.C. 9816 note);

22 (E) a national, regional, or statewide non23 profit organization; and

24 (F) any other appropriate nonprofit entity,

25 as determined by the Secretary.
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1 (6) EXTREMELY LOW-INCOME FAMILIES.—The

2 term ‘‘extremely low-income families’’ means very

3 low-income families (as defined in section 3(b) of the

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

5 1437a(b)) whose incomes do not exceed 30 percent

6 of the median family income for the area, as deter7 mined by the Secretary with adjustments for smaller

8 and larger families, except that the Secretary may

9 establish income ceilings higher or lower than 30

10 percent of the median for the area on the basis of

11 the Secretary’s findings that such variations are nec12 essary because of unusually high or low family in13 comes.

14 (7) LOW-INCOME FAMILIES.—The term ‘‘low-in15 come families’’ has the meaning given the term in

16 section 3(b) of the United States Housing Act of

17 1937 (42 U.S.C. 1437a(b)).

18 (8) SECRETARY.—The term ‘‘Secretary’’ means

19 the Secretary of Housing and Urban Development.

20 (9) STATE.—The term ‘‘State’’ has the mean21 ing given the term in section 3(b) of the United

22 States Housing Act of 1937 (42 U.S.C. 1437a(b)).

23 (b) ALLOCATION TO STATES AND ELIGIBLE INTER24 MEDIARIES.—For fiscal year 2001 and each fiscal year

25 thereafter, the total amount made available to the Sec-
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1 retary from the Trust Fund under section 3(c) shall be

2 allocated by the Secretary as follows:

3 (1) 75 percent shall be used to award grants to

4 States in accordance with subsection (c).

5 (2) 25 percent shall be used to award grants to

6 eligible intermediaries in accordance with subsection

7 (d).

8 (c) GRANTS TO STATES.—

9 (1) IN GENERAL.—Subject to paragraph (2),

10 from the amount made available for each fiscal year

11 under subsection (b)(1), the Secretary shall award

12 grants to States, in accordance with an allocation

13 formula established by the Secretary, based on the

14 pro rata share of each State of the total need among

15 all States for an increased supply of affordable hous16 ing, as determined on the basis of—

17 (A) the number and percentage of families

18 in the State that live in substandard housing;

19 (B) the number and percentage of families

20 in the State that pay more than 50 percent of

21 their annual income for housing costs;

22 (C) the number and percentage of persons

23 living at or below the poverty level in the State;
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1 (D) the cost of developing or carrying out

2 substantial rehabilitation of housing in the

3 State;

4 (E) the age of the multifamily housing

5 stock in the State; and

6 (F) such other factors as the Secretary de7 termines to be appropriate.

8 (2) GRANT AMOUNT.—

9 (A) IN GENERAL.—The amount of a grant

10 award to a State under this subsection shall be

11 equal to the lesser of—

12 (i) 4 times the amount of assistance

13 provided by the State from non-Federal

14 sources; and

15 (ii) the allocation determined in ac16 cordance with paragraph (1).

17 (B) NON-FEDERAL SOURCES.—The fol18 lowing shall be considered non-Federal sources

19 for purposes of this section:

20 (i) 50 percent of funds allocable to tax

21 credits allocated under section 42 of the

22 Internal Revenue Code of 1986.

23 (ii) 50 percent of revenue from mort24 gage revenue bonds issued under section

25 143 of such Code.
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1 (iii) 50 percent of proceeds from the

2 sale of tax exempt bonds.

3 (3) AWARD OF STATE ALLOCATION TO CERTAIN

4 ENTITIES.—

5 (A) IN GENERAL.—If the amount provided

6 by a State from non-Federal sources is less

7 than 25 percent of the amount that would be

8 awarded to the State under this subsection

9 based on the allocation formula described in

10 paragraph (1), not later than 60 days after the

11 date on which the Secretary determines that the

12 State is not eligible for the full allocation deter13 mined under paragraph (1), the Secretary shall

14 issue a notice regarding the availability of the

15 funds for which the State is ineligible.

16 (B) APPLICATIONS.—Not later than 9

17 months after publication of a notice of funding

18 availability under subparagraph (A), a non19 profit or public entity (or a consortium thereof,

20 which may include units of local government

21 working together on a regional basis) may sub22 mit to the Secretary an application for the

23 available assistance or a portion thereof, which

24 application shall include—
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1 (i) a certification that the applicant

2 will provide assistance in an amount equal

3 to 25 percent of the amount of assistance

4 made available to the applicant under this

5 paragraph; and

6 (ii) an allocation plan that meets the

7 requirements of paragraph (4)(B) for use

8 or distribution in the State of any assist9 ance made available to the applicant under

10 this paragraph and the assistance provided

11 by the applicant for purposes of clause (i).

12 (C) AWARD OF ASSISTANCE.—The Sec13 retary shall award the amount that is not

14 awarded to a State by operation of paragraph

15 (2) to 1 or more applicants that meet the re16 quirements of subparagraph (B) of this para17 graph that are selected by the Secretary based

18 on selection criteria, which shall be established

19 by the Secretary by regulation.

20 (4) DISTRIBUTION TO ELIGIBLE ENTITIES.—

21 (A) IN GENERAL.—Each State that re22 ceives a grant award under this subsection shall

23 distribute the amount made available under the

24 grant and the assistance provided by the State

25 from non-Federal sources for purposes of para-
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1 graph (2)(A) to eligible entities for the purpose

2 of assisting those entities in carrying out eligi3 ble activities in the State as follows:

4 (i) 75 percent shall be distributed to

5 eligible entities for eligible activities relat6 ing to the development of affordable hous7 ing for rental by extremely low-income

8 families in the State.

9 (ii) 25 percent shall be distributed to

10 eligible entities for eligible activities relat11 ing to the development of affordable hous12 ing for rental by low-income families in the

13 State, or for homeownership assistance for

14 low-income families in the State.

15 (B) ALLOCATION PLAN.—Each State shall,

16 after notice to the public, an opportunity for

17 public comment, and consideration of public

18 comments received, establish an allocation plan

19 for the distribution of assistance under this

20 paragraph, which shall be submitted to the Sec21 retary and shall be made available to the public

22 by the State, and which shall include—

23 (i) application requirements for eligi24 ble entities seeking to receive such assist-
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1 ance, including a requirement that each

2 application include—

3 (I) a certification by the appli4 cant that any housing developed with

5 assistance under this paragraph will

6 remain affordable for extremely low7 income families or low-income fami8 lies, as applicable, for not less than 40

9 years;

10 (II) a certification by the appli11 cant that the tenant contribution to12 wards rent for a family residing in a

13 unit developed with assistance under

14 this paragraph will not exceed 30 per15 cent of the adjusted income of that

16 family; and

17 (III) a certification by the appli18 cant that the owner of a project in

19 which any housing developed with as20 sistance under this paragraph is lo21 cated will make a percentage of units

22 in the project available to families as23 sisted under the voucher program

24 under section 8(o) of the United

25 States Housing Act of 1937 (42
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1 U.S.C. 1437f(o)) on the same basis as

2 other families eligible for the housing

3 (except that only the voucher holder’s

4 expected share of rent shall be consid5 ered), which percentage shall not be

6 less than the percentage of the total

7 cost of developing or rehabilitating the

8 project that is funded with assistance

9 under this paragraph; and

10 (ii) factors for consideration in select11 ing among applicants that meet such appli12 cation requirements, which shall give pref13 erence to applicants based on—

14 (I) the amount of assistance for

15 the eligible activities leveraged by the

16 applicant from private and other non17 Federal sources, including assistance

18 made available under section 8 of the

19 United States Housing Act of 1937

20 (42 U.S.C. 1437f) that is devoted to

21 the project in which the housing to be

22 developed with assistance under this

23 paragraph is located;
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1 (II) the extent of local assistance

2 that will be provided in carrying out

3 the eligible activities, including—

4 (aa) financial assistance;

5 and

6 (bb) the extent to which the

7 applicant has worked with the

8 unit of local government in which

9 the housing will be located to ad10 dress issues of siting and exclu11 sionary zoning or other policies

12 that are barriers to affordable

13 housing;

14 (III) the degree to which the de15 velopment in which the housing will

16 be located is mixed-income;

17 (IV) whether the housing will be

18 located in a census tract in which the

19 poverty rate is less than 20 percent or

20 in a community undergoing revitaliza21 tion;

22 (V) the extent of employment

23 and other opportunities for low-in24 come families in the area in which the

25 housing will be located; and
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1 (VI) the extent to which the ap2 plicant demonstrates the ability to

3 maintain units as affordable for ex4 tremely low-income or low-income

5 families, as applicable, through the

6 use of assistance made available under

7 this paragraph, assistance leveraged

8 from non-Federal sources, assistance

9 made available under section 8 of the

10 United States Housing Act of 1937

11 (42 U.S.C. 1437f), State or local as12 sistance, programs to increase tenant

13 income, cross-subsidization, and any

14 other resources.

15 (C) FORMS OF ASSISTANCE.—

16 (i) IN GENERAL.—Assistance distrib17 uted under this paragraph may be in the

18 form of capital grants, non-interest bearing

19 or low-interest loans or advances, deferred

20 payment loans, guarantees, and any other

21 forms of assistance approved by the Sec22 retary.

23 (ii) REPAYMENTS.—If a State awards

24 assistance under this paragraph in the

25 form of a loan or other mechanism by
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1 which funds are later repaid to the State,

2 any repayments received by the State shall

3 be distributed by the State in accordance

4 with the allocation plan described in sub5 paragraph (B) the following fiscal year.

6 (D) COORDINATION WITH OTHER ASSIST7 ANCE.—In distributing assistance under this

8 paragraph, each State shall, to the maximum

9 extent practicable, coordinate such distribution

10 with the provision of other affordable housing

11 assistance by the State, including—

12 (i) housing credit dollar amounts allo13 cated by the State under section 42(h) of

14 the Internal Revenue Code of 1986;

15 (ii) assistance made available under

16 the HOME Investment Partnerships Act

17 or the community development block grant

18 program; and

19 (iii) private activity bonds.

20 (d) NATIONAL COMPETITION.—

21 (1) IN GENERAL.—From the amount made

22 available for each fiscal year under subsection

23 (b)(2), the Secretary shall award grants on a com24 petitive basis to eligible intermediaries, which shall
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1 be used in accordance with paragraph (3) of this

2 subsection.

3 (2) APPLICATION REQUIREMENTS AND SELEC4 TION CRITERIA.—The Secretary by regulation shall

5 establish application requirements and selection cri6 teria for the award of competitive grants to eligible

7 intermediaries under this subsection, which criteria

8 shall include—

9 (A) the ability of the eligible intermediary

10 to meet housing needs of low-income families on

11 a national or regional scope;

12 (B) the capacity of the eligible inter13 mediary to use the grant award in accordance

14 with paragraph (3), based on the past perform15 ance and management of the applicant; and

16 (C) the extent to which the eligible inter17 mediary has leveraged funding from private and

18 other non-Federal sources for the eligible activi19 ties.

20 (3) USE OF GRANT AWARD.—

21 (A) IN GENERAL.—Except as provided in

22 subparagraph (B), each eligible intermediary

23 that receives a grant award under this sub24 section shall ensure that the amount made

25 available under the grant is used as follows:
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1 (i) 75 percent shall be used for eligi2 ble activities relating to the development of

3 affordable housing for rental by extremely

4 low-income families.

5 (ii) 25 percent shall be used for eligi6 ble activities relating to the development of

7 affordable housing for rental by low-income

8 families, or for homeownership assistance

9 for low-income families.

10 (B) EXCEPTION.—

11 (i) IN GENERAL.—If the amount

12 made available under a grant award under

13 this subsection is used for a project de14 scribed in clause (ii), an eligible inter15 mediary may use the amount made avail16 able under the grant for eligible activities

17 relating to the development of housing for

18 rental by families whose incomes are less

19 than 60 percent of the area median in20 come, and for homeownership activities for

21 families whose incomes are less than 80

22 percent of area median income.

23 (ii) PROJECT CONTRIBUTING TO A

24 CONCERTED COMMUNITY REVITALIZATION
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1 PLAN.—A project is described in this

2 clause if—

3 (I) it is located in a community

4 undergoing concerted revitalization

5 and is contributing to a community

6 revitalization plan; and

7 (II) it is located in a census tract

8 in which—

9 (aa) the median household

10 income is less than 60 percent of

11 the area median income; or

12 (bb) the rate of poverty is

13 greater than 20 percent.

14 (C) PLAN OF USE.—Each eligible inter15 mediary that receives a grant award under this

16 subsection shall establish a plan for the use or

17 distribution of the amount made available under

18 the grant, which shall be submitted to the Sec19 retary, and which shall include information re20 lating to the manner in which the eligible inter21 mediary will either use or distribute that

22 amount, including—

23 (i) a certification that assistance made

24 available under this subsection will be used

25 to supplement assistance leveraged from
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1 private and other non-Federal sources, in2 cluding assistance made available under

3 section 8 of the United States Housing Act

4 of 1937 (42 U.S.C. 1437f) that is devoted

5 to the project in which the housing to be

6 developed is located;

7 (ii) a certification that local assistance

8 will be provided in the carrying out the eli9 gible activities, which may include—

10 (I) financial assistance; and

11 (II) a good faith effort to work

12 with the unit of local government in

13 which the housing will be located to

14 address issues of siting and exclu15 sionary zoning or other policies that

16 are barriers to affordable housing;

17 (iii) a certification that any housing

18 developed with assistance under this sub19 section will remain affordable for extremely

20 low-income families or low-income families,

21 as applicable, for not less than 40 years;

22 (iv) a certification that any housing

23 developed by the applicant with assistance

24 under this subsection will be located—
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1 (I) in a mixed-income develop2 ment in a census tract having a pov3 erty rate of not more than 20 percent,

4 and near employment and other op5 portunities for low-income families; or

6 (II) in a community undergoing

7 revitalization;

8 (v) a certification that the tenant con9 tribution towards rent for a family residing

10 in a unit developed with assistance under

11 this paragraph will not exceed 30 percent

12 of the adjusted income of that family; and

13 (vi) a certification by the applicant

14 that the owner of a project in which any

15 housing developed with assistance under

16 this subsection is located will make a per17 centage of units in the project available to

18 families assisted under the voucher pro19 gram under section 8(o) of the United

20 States Housing Act of 1937 (42 U.S.C.

21 1437f(o)) on the same basis as other fami22 lies eligible for the housing (except that

23 only the voucher holder’s expected share of

24 rent shall be considered), which percentage

25 shall not be less than the percentage of the
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1 total cost of developing or rehabilitating

2 the project that is funded with assistance

3 under this subsection.

4 (D) FORMS OF ASSISTANCE.—

5 (i) IN GENERAL.—An eligible inter6 mediary may distribute the amount made

7 available under a grant under this sub8 section in the form of capital grants, non9 interest bearing or low-interest loans or

10 advances, deferred payment loans, guaran11 tees, and other forms of assistance.

12 (ii) REPAYMENTS.—If an eligible

13 intermediary awards assistance under this

14 subsection in the form of a loan or other

15 mechanism by which funds are later repaid

16 to the eligible intermediary, any repay17 ments received by the eligible intermediary

18 shall be distributed by the eligible inter19 mediary in accordance with the plan of use

20 described in subparagraph (C) the fol21 lowing fiscal year.
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1 SEC. 5. REGULATIONS.

2 Not later than 6 months after the date of enactment

3 of this Act, the Secretary of Housing and Urban Develop4 ment shall promulgate regulations to carry out this Act.

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