103D CONGRESS

2D SESSION S. 1299

AMENDMENTS
In the House of Representatives, U. S.,

March 22, 1994.

Resolved, That the bill from the Senate (S. 1299) entitled ‘‘An Act to reform requirements for the disposition of

multifamily property owned by the Secretary of Housing and

Urban Development, enhance program flexibility, authorize a

program to combat crime, and for other purposes’’, do pass

with the following

AMENDMENTS:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

3 ‘‘Multifamily Housing Property Disposition Reform Act of

4 1994’’.

5 (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. Repeal of State agency multifamily property disposition demonstration.

Sec. 103. Preventing mortgage defaults on multifamily housing projects.

Sec. 104. Interest rates on assigned mortgages.

Sec. 105. Authorization of appropriations.

TITLE II—OTHER PROGRAM REFORMS

Subtitle A—Home Investment Partnerships Program

Sec. 201. Participation by State agencies or instrumentalities.

Sec. 202. Simplification of program-wide income targeting for rental housing.

Sec. 203. Homeownership units.

Sec. 204. Simplification of matching requirements.

Sec. 205. Repeal of separate audit requirement.

Sec. 206. Environmental review requirements.

Sec. 207. Use of CDBG funds for HOME program expenses.
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Sec. 208. Flexibility of HOME program for disaster areas.

Sec. 209. 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. Economic development grants.

Sec. 233. Guarantee of obligations backed by section 108 loans.

Sec. 234. 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. Correction of FHA multifamily mortgage limits.

Sec. 307. Amendments to FHA multifamily risk-sharing and housing finance

agency pilot programs.

Sec. 308. Subsidy layering review.

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 projects

12 owned by the Secretary has more than quadrupled

13 since 1989, and, by the end of 1994, may exceed

14 69,000 units;
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1 (3) the cost to the Federal Government of owning

2 and maintaining multifamily housing projects esca3 lated to $288,000,000 in fiscal year 1993;

4 (4) the inventory of multifamily housing projects

5 subject to mortgages held by the Secretary has in6 creased dramatically, to more than 2,400 mortgages,

7 and approximately half of these mortgages, with ap8 proximately 219,000 units, are delinquent;

9 (5) the inventory of insured and formerly in10 sured multifamily housing projects is deteriorating,

11 potentially endangering tenants and neighborhoods;

12 and

13 (6) the current statutory framework governing

14 the disposition of multifamily housing projects effec15 tively impedes the Government’s ability to dispose of

16 properties, protect tenants, and ensure that projects

17 are maintained over time.

18 (b) MANAGEMENT AND DISPOSITION OF MULTIFAMILY

19 HOUSING PROJECTS.—Section 203 of the Housing and

20 Community Development Amendments of 1978 (12 U.S.C.

21 1701z–11) is amended to read as follows:

22 ‘‘SEC. 203. MANAGEMENT AND DISPOSITION OF MULTIFAM23 ILY HOUSING PROJECTS.

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

25 Development shall manage or dispose of multifamily hous-
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1 ing projects that are owned by the Secretary or that are

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

3 that—

4 ‘‘(1) is consistent with the National Housing Act

5 and this section;

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

7 Federal Government; and

8 ‘‘(3) will, in the least costly fashion among rea9 sonable available alternatives, address the goals of—

10 ‘‘(A) preserving certain housing so that it

11 can remain available to and affordable by low12 income persons;

13 ‘‘(B) preserving and revitalizing residential

14 neighborhoods;

15 ‘‘(C) maintaining existing housing stock in

16 a decent, safe, and sanitary condition;

17 ‘‘(D) minimizing the involuntary displace18 ment of tenants;

19 ‘‘(E) maintaining housing for the purpose

20 of providing rental housing, cooperative housing,

21 and homeownership opportunities for low-income

22 persons;

23 ‘‘(F) minimizing the need to demolish mul24 tifamily housing projects;

25 ‘‘(G) supporting fair housing strategies; and
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1 ‘‘(H) disposing of such projects in a manner

2 consistent with local housing market conditions.

3 In determining the manner in which a project is to be man4 aged or disposed of, the Secretary may balance competing

5 goals relating to individual projects in a manner that will

6 further the purposes of this section.

7 ‘‘(b) DEFINITIONS.—For purposes of this section:

8 ‘‘(1) MULTIFAMILY HOUSING PROJECT.—The

9 term ‘multifamily housing project’ means any multi10 family rental housing project which is, or prior to ac11 quisition by the Secretary was, assisted or insured

12 under the National Housing Act, or was subject to a

13 loan under section 202 of the Housing Act of 1959.

14 ‘‘(2) SUBSIDIZED PROJECT.—The term ‘sub15 sidized project’ means a multifamily housing project

16 that, immediately prior to the assignment of the

17 mortgage on such project to, or the acquisition of such

18 mortgage by, the Secretary, was receiving any of the

19 following types of assistance:

20 ‘‘(A) Below market interest rate mortgage

21 insurance under the proviso of section 221(d)(5)

22 of the National Housing Act.

23 ‘‘(B) Interest reduction payments made in

24 connection with mortgages insured under section

25 236 of the National Housing Act.
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1 ‘‘(C) Direct loans made under section 202 of

2 the Housing Act of 1959.

3 ‘‘(D) Assistance in the form of—

4 ‘‘(i) rent supplement payments under

5 section 101 of the Housing and Urban De6 velopment Act of 1965,

7 ‘‘(ii) additional assistance payments

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

9 Housing Act,

10 ‘‘(iii) housing assistance payments

11 made under section 23 of the United States

12 Housing Act of 1937 (as in effect before

13 January 1, 1975), or

14 ‘‘(iv) housing assistance payments

15 made under section 8 of the United States

16 Housing Act of 1937 (excluding payments

17 made for tenant-based assistance under sec18 tion 8),

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

20 Housing and Community Development Act of

21 1987) such assistance payments are made to

22 more than 50 percent of the units in the project.

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

24 term ‘formerly subsidized project’ means a multifam25 ily housing project owned by the Secretary that was
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1 a subsidized project immediately prior to its acquisi2 tion by the Secretary.

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

4 ‘unsubsidized project’ means a multifamily housing

5 project owned by the Secretary that is not a sub6 sidized project or a formerly subsidized project.

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

8 affordable if—

9 ‘‘(A) for units occupied—

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

11 rent does not exceed 30 percent of 50 per12 cent of the area median income, as deter13 mined by the Secretary, with adjustments

14 for smaller and larger families; and

15 ‘‘(ii) by low-income families other than

16 very low-income families, the rent does not

17 exceed 30 percent of 80 percent of the area

18 median income, as determined by the Sec19 retary, with adjustments for smaller and

20 larger families; or

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

22 unit, is receiving assistance under section 8 of

23 the United States Housing Act of 1937.

24 ‘‘(6) LOW-INCOME FAMILIES AND VERY LOW-IN25 COME FAMILIES.—The terms ‘low-income families’
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1 and ‘very low-income families’ shall have the mean2 ings given the terms in section 3(b) of the United

3 States Housing Act of 1937.

4 ‘‘(7) PREEXISTING TENANT.—The term ‘preexist5 ing tenant’ means, with respect to a multifamily

6 housing project acquired pursuant to this section by

7 a purchaser other than the Secretary at foreclosure or

8 after sale by the Secretary, a family that resides in

9 a unit in the project immediately before the acquisi10 tion of the project by the purchaser.

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

12 means a market area determined by the Secretary.

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

14 the Secretary of Housing and Urban Development.

15 ‘‘(c) DISPOSITION OF PROPERTY.—

16 ‘‘(1) DISPOSITION TO PURCHASERS.—In carry17 ing out this section, the Secretary may dispose of a

18 multifamily housing project owned by the Secretary

19 on a negotiated, competitive bid, or other basis, on

20 such terms as the Secretary deems appropriate con21 sidering the low-income character of the project and

22 consistent with the goals in subsection (a), only to a

23 purchaser determined by the Secretary to be capable

24 of—
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1 ‘‘(A) satisfying the conditions of the disposi2 tion plan developed under paragraph (2) for the

3 project;

4 ‘‘(B) implementing a sound financial and

5 physical management program that is designed

6 to enable the project to meet anticipated operat7 ing and repair expenses to ensure that the

8 project will remain in decent, safe, and sanitary

9 condition and in compliance with any standards

10 under applicable State or local laws, rules, ordi11 nances, or regulations relating to the physical

12 condition of the housing and any such standards

13 established by the Secretary;

14 ‘‘(C) responding to the needs of the tenants

15 and working cooperatively with tenant organiza16 tions;

17 ‘‘(D) providing adequate organizational,

18 staff, and financial resources to the project; and

19 ‘‘(E) meeting such other requirements as the

20 Secretary may determine.

21 ‘‘(2) DISPOSITION PLAN.—

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

23 multifamily housing project that is owned by the

24 Secretary, the Secretary shall develop an initial

25 disposition plan for the project that specifies the
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1 minimum terms and conditions of the Secretary

2 for disposition of the project, the initial sales

3 price that is acceptable to the Secretary, and the

4 assistance that the Secretary plans to make

5 available to a prospective purchaser in accord6 ance with this section.

7 ‘‘(B) MARKET-WIDE PLANS.—In developing

8 the initial disposition plan under this subsection

9 for a multifamily housing project located in a

10 market area in which at least 1 other multifam11 ily housing project owned by the Secretary is lo12 cated, the Secretary may coordinate the disposi13 tion of all such multifamily housing projects lo14 cated within the same market area to the extent

15 and in such manner as the Secretary determines

16 appropriate to carry out the goals under sub17 section (a).

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

19 shall be reasonably related to the intended use of

20 the project after sale, any rehabilitation require21 ments for the project, the rents for units in the

22 project that can be supported by the market, the

23 amount of rental assistance available for the

24 project under section 8 of the United States

25 Housing Act of 1937, the occupancy profile of the
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1 project (including family size and income levels

2 for tenant families), and any other factors that

3 the Secretary considers appropriate.

4 ‘‘(D) COMMUNITY AND TENANT INPUT.—In

5 carrying out this section, the Secretary shall de6 velop procedures—

7 ‘‘(i) to obtain appropriate and timely

8 input into disposition plans from officials

9 of the unit of general local government af10 fected, the community in which the project

11 is situated, and the tenants of the project;

12 and

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

14 appropriate, the sale of multifamily housing

15 projects to existing tenant organizations

16 with demonstrated capacity, to public or

17 nonprofit entities that represent or are af18 filiated with existing tenant organizations,

19 or to other public or nonprofit entities.

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

21 out the procedures developed under subparagraph

22 (D), the Secretary may provide technical assist23 ance, directly or indirectly, and may use

24 amounts available for technical assistance under

25 the Emergency Low Income Housing Preserva-
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1 tion Act of 1987, subtitle C of the Low-Income

2 Housing Preservation and Resident Homeowner3 ship Act of 1990, subtitle B of title IV of the

4 Cranston-Gonzalez National Affordable Housing

5 Act, or this section, for the provision of technical

6 assistance under this paragraph. Recipients of

7 technical assistance funding under the provisions

8 referred to in this subparagraph shall be per9 mitted to provide technical assistance to the ex10 tent of such funding under any of such provi11 sions or under this subparagraph, notwithstand12 ing the source of the funding.

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

14 section, the Secretary shall—

15 ‘‘(A) prior to foreclosing on any mortgage

16 held by the Secretary on any multifamily hous17 ing project, notify both the unit of general local

18 government in which the property is located and

19 the tenants of the property of the proposed fore20 closure sale; and

21 ‘‘(B) dispose of a multifamily housing

22 project through a foreclosure sale only to a pur23 chaser that the Secretary determines is capable

24 of implementing a sound financial and physical

25 management program that is designed to enable
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1 the project to meet anticipated operating and re2 pair expenses to ensure that the project will re3 main in decent, safe, and sanitary condition and

4 in compliance with any standards under appli5 cable State or local laws, rules, ordinances, or

6 regulations relating to the physical condition of

7 the housing and any such standards established

8 by the Secretary.

9 ‘‘(d) MANAGEMENT AND MAINTENANCE OF PROP10 ERTIES.—

11 ‘‘(1) CONTRACTING FOR MANAGEMENT SERV12 ICES.—In carrying out this section, the Secretary

13 may—

14 ‘‘(A) contract for management services for a

15 multifamily housing project that is owned by the

16 Secretary (or for which the Secretary is mortga17 gee in possession) with for-profit and nonprofit

18 entities and public agencies (including public

19 housing authorities) on a negotiated, competitive

20 bid, or other basis at a price determined by the

21 Secretary to be reasonable, with a manager the

22 Secretary has determined is capable of—

23 ‘‘(i) implementing a sound financial

24 and physical management program that is

25 designed to enable the project to meet an-
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1 ticipated operating and maintenance ex2 penses to ensure that the project will remain

3 in decent, safe, and sanitary condition and

4 in compliance with any standards under

5 applicable State or local laws, rules, ordi6 nances, or regulations relating to the phys7 ical condition of the project and any such

8 standards established by the Secretary;

9 ‘‘(ii) responding to the needs of the ten10 ants and working cooperatively with tenant

11 organizations;

12 ‘‘(iii) providing adequate organiza13 tional, staff, and financial resources to the

14 project; and

15 ‘‘(iv) meeting such other requirements

16 as the Secretary may determine; and

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

18 housing project that is subject to a mortgage held

19 by the Secretary to contract for management

20 services for the project in the manner described

21 in subparagraph (A).

22 ‘‘(2) MAINTENANCE OF PROJECTS OWNED BY

23 SECRETARY.—In the case of multifamily housing

24 projects that are owned by the Secretary (or for which
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1 the Secretary is mortgagee in possession), the Sec2 retary shall—

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

5 and sanitary condition and in compliance with

6 any standards under applicable State or local

7 laws, rules, ordinances, or regulations relating to

8 the physical condition of the housing and any

9 such 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 purposes

13 of providing rental or cooperative housing.

14 ‘‘(3) PROJECTS SUBJECT TO A MORTGAGE HELD

15 BY SECRETARY.—In the case of any multifamily

16 housing project that is subject to a mortgage held by

17 the Secretary, the Secretary shall require the owner of

18 the project to carry out the requirements of paragraph

19 (2).

20 ‘‘(e) REQUIRED ASSISTANCE.—In disposing of multi21 family housing property under this section, consistent with

22 the goal of section 203(a)(3)(A), the Secretary shall take,

23 separately or in combination with other actions under this

24 subsection or subsection (f), one or more of the following

25 actions:
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1 ‘‘(1) CONTRACT WITH OWNER FOR PROJECT2 BASED ASSISTANCE.—In the case of multifamily hous3 ing projects that are acquired by a purchaser other

4 than the Secretary at foreclosure or after sale by the

5 Secretary, the Secretary may enter into contracts

6 under section 8 of the United States Housing Act of

7 1937 (to the extent budget authority is available) with

8 owners of the projects, subject to the following require9 ments:

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

13 or formerly subsidized project referred to in sub14 paragraphs (A) through (C) of subsection

15 (b)(2)—

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

17 assist at least all units covered by an assist18 ance contract under any of the authorities

19 referred to in subsection (b)(2)(D) before ac20 quisition or foreclosure, unless the Secretary

21 acts pursuant to the provisions of subpara22 graph (C);

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

24 when a vacancy occurs in any unit in the

25 project requiring project-based rental assist-
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1 ance pursuant to this subparagraph that is

2 occupied by a family who is not eligible for

3 assistance under such section 8, the owner

4 shall lease the available unit to a family eli5 gible for assistance under such section 8;

6 and

7 ‘‘(iii) the Secretary shall take actions

8 to ensure that any unit in any such project

9 that does not otherwise receive project-based

10 assistance under this subparagraph remains

11 available and affordable for the remaining

12 useful life of the project, as defined by the

13 Secretary; to carry out this clause, the Sec14 retary may require purchasers to establish

15 use or rent restrictions maintaining the af16 fordability 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 be-
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1 fore 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 Sec5 retary acts pursuant to provisions of sub6 paragraph (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 assist10 ance pursuant to this subparagraph that is

11 occupied by a family who is not eligible for

12 assistance under such section 8, the owner

13 shall lease the available unit to a family eli14 gible for assistance under such section 8.

15 ‘‘(C) EXCEPTIONS.—

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

17 project-based assistance under section 8 of

18 the United States Housing Act of 1937 in

19 accordance with subparagraph (A)(i) or

20 (B)(i) for a project, the Secretary may, for

21 certain units in unsubsidized projects lo22 cated within the same market area as the

23 project otherwise required to be assisted

24 with such project-based assistance—
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1 ‘‘(I) require use and rent restric2 tions providing that such units shall be

3 available to and affordable by very

4 low-income families for the remaining

5 useful life of the project (as defined by

6 the Secretary), or

7 ‘‘(II) provide project-based assist8 ance under section 8 for such units to

9 be occupied by only very low-income

10 persons,

11 but only if the requirements under clause

12 (ii) are met.

13 ‘‘(ii) REQUIREMENTS.—The require14 ments under this clause are that—

15 ‘‘(I) upon the disposition of the

16 project otherwise required to be assisted

17 with project-based assistance under

18 subparagraph (A)(i) or (B)(i), the Sec19 retary shall make available tenant20 based assistance under section 8 to

21 low-income families residing in units

22 otherwise required to be assisted with

23 such project-based assistance; 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 section 8

5 in accordance with subparagraph

6 (A)(i) or (B)(i).

7 ‘‘(D) UNSUBSIDIZED PROJECTS.—Notwith8 standing actions taken pursuant to subpara9 graph (C), in the case of unsubsidized projects,

10 the contract shall be sufficient to provide—

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

12 all units that are covered, or were covered

13 immediately before foreclosure or acquisi14 tion, by an assistance contract under—

15 ‘‘(I) the new construction and

16 substantial rehabilitation program

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

18 States Housing Act of 1937 (as in ef19 fect before October 1, 1983);

20 ‘‘(II) the property disposition pro21 gram under section 8(b) of such Act;

22 ‘‘(III) the project-based certificate

23 program under section 8 of such 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 in

5 effect before January 1, 1975);

6 ‘‘(VI) the rent supplement pro7 gram under section 101 of the Housing

8 and Urban Development Act of 1965;

9 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 sec16 tion 8 of the United States Housing Act of

17 1937 for families that are preexisting ten18 ants of the project in units that, imme19 diately before foreclosure or acquisition of

20 the project by the Secretary, were covered by

21 an assistance contract under the loan man22 agement set-aside program under section

23 8(b) of the United States Housing Act of

24 1937.
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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 after

5 sale by the Secretary, the Secretary may enter into

6 annual contribution contracts with public housing

7 agencies to provide tenant-based assistance under sec8 tion 8 of the United States Housing Act of 1937 on

9 behalf of all low-income families who are otherwise el10 igible for assistance in accordance with subparagraph

11 (A), (B), or (D) of paragraph (1) on the date that the

12 project is acquired by the purchaser, subject to the fol13 lowing requirements:

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

16 may not take action under this paragraph unless

17 the Secretary determines that there is available

18 in the area an adequate supply of habitable, af19 fordable housing for very low-income families

20 and other low-income families using tenant21 based 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 such

3 projects disposed of by the Secretary in any fis4 cal year.

5 ‘‘(3) OTHER ASSISTANCE.—

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

7 authority provided under the National Housing

8 Act, the Secretary may provide other assistance

9 pursuant to subsection (f) to the owners of multi10 family housing projects that are acquired by a

11 purchaser other than the Secretary at foreclosure,

12 or after sale by the Secretary, on terms that en13 sure 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 a

25 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 otherwise

3 required (pursuant to subparagraph (A), (B), or

4 (D) of paragraph (1)) to receive project-based as5 sistance under section 8 of the United States

6 Housing Act of 1937 exceed the amount payable

7 as rent under section 3(a) of the United States

8 Housing Act of 1937, the Secretary shall provide

9 tenant-based assistance under section 8 of such

10 Act to such families.

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

12 actions required under subsection (e) for a subsidized, for13 merly subsidized, or unsubsidized multifamily housing

14 project, the Secretary may, pursuant to the disposition plan

15 and the goals in subsection (a), take one or more of the

16 following actions:

17 ‘‘(1) DISCOUNTED SALES PRICE.—In accordance

18 with the authority provided under the National Hous19 ing Act, the Secretary may reduce the selling price of

20 the project. Such reduced sales price shall be reason21 ably related to the intended use of the property after

22 sale, any rehabilitation requirements for the project,

23 the rents for units in the project that can be sup24 ported by the market, the amount of rental assistance

25 available for the project under section 8 of the United
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1 States Housing Act of 1937, the occupancy profile of

2 the project (including family size and income levels

3 for tenant families), and any other factors that the

4 Secretary considers appropriate.

5 ‘‘(2) USE AND RENT RESTRICTIONS.—The Sec6 retary may require certain units in a project to be

7 subject to use or rent restrictions providing that such

8 units will be available to and affordable by low- and

9 very low-income persons for the remaining useful life

10 of the property, as defined by the Secretary.

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

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

13 multifamily housing project if—

14 ‘‘(A) authority for such loans is provided in

15 advance in an appropriation Act;

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

17 5 years;

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

19 documentation provided to the Secretary, that

20 the borrower has obtained a commitment of per21 manent financing to replace the short-term loan

22 from a lender who meets standards established by

23 the Secretary; and

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

25 with prevailing practices in the marketplace or
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1 the provision of such loan results in no cost to

2 the Government, as defined in section 502 of the

3 Congressional Budget Act of 1974.

4 ‘‘(4) UP-FRONT GRANTS.—If the Secretary deter5 mines that action under this paragraph is more cost6 effective than establishing rents pursuant to sub7 section (h)(2), the Secretary may utilize the budget

8 authority provided for contracts issued under this sec9 tion for project-based assistance under section 8 of the

10 United States Housing Act of 1937 to (in addition to

11 providing project-based section 8 rental assistance)

12 provide up-front grants for the necessary cost of reha13 bilitation and other related development costs.

14 ‘‘(5) TENANT-BASED ASSISTANCE.—The Sec15 retary may make available tenant-based assistance

16 under section 8 of the United States Housing Act of

17 1937 to families residing in a multifamily housing

18 project that do not otherwise qualify for project-based

19 assistance.

20 ‘‘(6) ALTERNATIVE USES.—

21 ‘‘(A) IN GENERAL.—Notwithstanding any

22 other provision of law, after providing notice to

23 and an opportunity for comment by preexisting

24 tenants, the Secretary may allow not more

25 than—
27

•S 1299 EAH

1 ‘‘(i) 10 percent of the total number of

2 units in multifamily housing projects that

3 are disposed of by the Secretary during any

4 fiscal year to be made available for uses

5 other than rental or cooperative uses, in6 cluding low-income homeownership oppor7 tunities, or in any particular project, com8 munity space, office space for tenant or

9 housing-related service providers or security

10 programs, or small business uses, if such

11 uses benefit the tenants of the project; and

12 ‘‘(ii) 5 percent of the total number of

13 units in multifamily housing projects that

14 are disposed of by the Secretary during any

15 fiscal year to be used in any manner, if the

16 Secretary and the unit of general local gov17 ernment or area-wide governing body deter18 mine that such use will further fair hous19 ing, community development, or neighbor20 hood revitalization goals.

21 ‘‘(B) DISPLACEMENT PROTECTION.—The

22 Secretary may take actions under subparagraph

23 (A) only if—

24 ‘‘(i) tenant-based rental assistance

25 under section 8 of the United States Hous-
28

•S 1299 EAH

1 ing Act of 1937 is made available to each

2 eligible family residing in the project that is

3 displaced as a result of such actions; and

4 ‘‘(ii) the Secretary determines that suf5 ficient habitable, affordable rental housing

6 is available in the market area in which the

7 project is located to ensure use of such as8 sistance.

9 ‘‘(7) TRANSFER FOR USE UNDER OTHER PRO10 GRAMS OF SECRETARY.—

11 ‘‘(A) IN GENERAL.—Notwithstanding the

12 provisions of subsection (e), the Secretary may,

13 pursuant to an agreement under subparagraph

14 (B), 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—
29

•S 1299 EAH

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

2 and limitations as the Secretary determines

3 appropriate, including requirements to en4 sure use of the project as public housing,

5 supportive housing under section 202 of the

6 Housing Act of 1959, or supportive housing

7 under section 811 of the Cranston-Gonzalez

8 National Affordable Housing Act, as appli9 cable; 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 of

15 1937, the Secretary may provide project-based assist16 ance in accordance with subsection (e) of this section

17 to support the rebuilding of a multifamily housing

18 project rebuilt or to be rebuilt (in whole or in part

19 and on-site, off-site, or in a combination of both) in

20 connection with disposition under this section, if the

21 Secretary determines that—

22 ‘‘(A) the project is not being maintained in

23 a decent, safe, and sanitary condition;

24 ‘‘(B) rebuilding the project would be less ex25 pensive than substantial rehabilitation;
30

•S 1299 EAH

1 ‘‘(C) the unit of general local government in

2 which the project is located approves the rebuild3 ing and makes a financial contribution or other

4 commitment to the project; and

5 ‘‘(D) the rebuilding is a part of a local

6 neighborhood revitalization plan approved by the

7 unit of general local government.

8 The provisions of subsection (j)(2) shall apply to any

9 tenants of the project who are displaced.

10 ‘‘(9) EMERGENCY ASSISTANCE FUNDS.—The Sec11 retary may make arrangements with State agencies

12 and units of general local government of States receiv13 ing emergency assistance under part A of title IV of

14 the Social Security Act for the provision of assistance

15 under such Act on behalf of eligible families who

16 would reside in any multifamily housing projects.

17 ‘‘(g) PROTECTION FOR UNASSISTED VERY LOW-IN18 COME TENANTS.—For each multifamily housing project

19 disposed of under this section, the Secretary shall require

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

21 tenant of the project who (upon disposition) would be re22 quired to pay rent in an amount in excess of 30 percent

23 of the adjusted income (as such term is defined in section

24 3(b) of the United States Housing Act of 1937) of the fam25 ily—
31

•S 1299 EAH

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

2 date of the acquisition of the project by the purchaser

3 under such disposition, the rent for the unit occupied

4 by the family may not be increased above the rent

5 charged immediately before acquisition;

6 ‘‘(2) such family shall be considered displaced for

7 purposes of the preferences for assistance under sec8 tions 6(c)(4)(A)(i), 8(d)(1)(A)(i), and 8(o)(3)(B) of

9 the United States Housing Act of 1937; and

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

11 later than the date of the acquisition of the project by

12 the purchaser—

13 ‘‘(A) of the requirements under paragraphs

14 (1) and (2); and

15 ‘‘(B) that, after the expiration of the period

16 under paragraph (1), the rent for the unit occu17 pied by the family may be increased.

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

19 project-based rental assistance under section 8 of the United

20 States Housing Act of 1937 provided pursuant to this sec21 tion shall be subject to the following requirements:

22 ‘‘(1) CONTRACT TERM.—The contract shall have

23 a term of 15 years, except that the term may be less

24 than 15 years—
32

•S 1299 EAH

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

2 that, based on the rental charges and financing

3 for the multifamily housing project to which the

4 contract relates, the financial viability of the

5 project can be maintained under a contract hav6 ing such a term; except that the Secretary shall

7 require that the amount of rent payable by ten8 ants of the project for units assisted under such

9 contract shall not exceed the amount payable for

10 rent under section 3(a) of the United States

11 Housing Act of 1937 for a period of at least 15

12 years; or

13 ‘‘(B) if such assistance is provided—

14 ‘‘(i) under a contract authorized under

15 section 6 of the HUD Demonstration Act of

16 1993; and

17 ‘‘(ii) pursuant to a disposition plan

18 under this section for a project that is deter19 mined by the Secretary to be otherwise in

20 compliance with this section.

21 ‘‘(2) CONTRACT RENT.—The Secretary shall es22 tablish the contract rents under such contracts at lev23 els that, together with other resources available to the

24 purchasers, provide sufficient amounts for the nec25 essary costs of rehabilitating and operating the multi-
33

•S 1299 EAH

1 family housing project and do not exceed the percent2 age of the existing housing fair market rentals for the

3 market area in which the project assisted under the

4 contract is located as determined by the Secretary

5 under section 8(c) of the United States Housing Act

6 of 1937.

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

8 STATE GOVERNMENT AGENCIES.—

9 ‘‘(1) NOTIFICATION.—Not later than 30 days

10 after the Secretary acquires title to a multifamily

11 housing project, the Secretary shall notify the appro12 priate unit of general local government (including

13 public housing agencies) and State agency or agencies

14 designated by the chief executive officer of the State

15 in which the project is located of such acquisition of

16 title and that, for a period beginning upon such noti17 fication that does not exceed 90 days, such unit of

18 general local government and agency or agencies shall

19 have the exclusive right under this subsection to make

20 bona fide offers to purchase the project.

21 ‘‘(2) RIGHT OF FIRST REFUSAL.—During the 90-

22 day period, the Secretary may not sell or offer to sell

23 the multifamily housing project other than to a party

24 notified under paragraph (1), unless the unit of gen25 eral local government and the designated State agency
34

•S 1299 EAH

1 or agencies notify the Secretary that they will not

2 make an offer to purchase the project. The Secretary

3 shall accept a bona fide offer to purchase the project

4 made during such period if it complies with the terms

5 and conditions of the disposition plan for the project

6 or is otherwise acceptable to the Secretary.

7 ‘‘(3) PROCEDURE.—The Secretary shall establish

8 any procedures necessary to carry out this subsection.

9 ‘‘(j) DISPLACEMENT OF TENANTS AND RELOCATION

10 ASSISTANCE.—

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

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

13 or conversion in the use of, a multifamily housing

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

15 the Secretary is mortgagee in possession), the Sec16 retary shall identify tenants who will be displaced,

17 and shall notify all such tenants of their pending dis18 placement and of any relocation assistance that may

19 be available. In the case of a multifamily housing

20 project that is subject to a mortgage held by the Sec21 retary, the Secretary shall require the owner of the

22 project to carry out the requirements of this para23 graph, if the Secretary has authorized the demolition

24 of, repairs to, or conversion in the use of such multi25 family housing project.
35

•S 1299 EAH

1 ‘‘(2) RIGHTS OF DISPLACED TENANTS.—The Sec2 retary shall ensure for any such tenant (who contin3 ues to meet applicable qualification standards) the

4 right—

5 ‘‘(A) to return, whenever possible, to a re6 paired or rebuilt unit;

7 ‘‘(B) to occupy a unit in another multifam8 ily housing project owned by the Secretary;

9 ‘‘(C) to obtain housing assistance under the

10 United States Housing Act of 1937; or

11 ‘‘(D) to receive any other available similar

12 relocation assistance as the Secretary determines

13 to be appropriate.

14 ‘‘(k) MORTGAGE AND PROJECT SALES.—

15 ‘‘(1) IN GENERAL.—The Secretary may not ap16 prove the sale of any loan or mortgage held by the

17 Secretary (including any loan or mortgage owned by

18 the Government National Mortgage Association) on

19 any subsidized project or formerly subsidized project,

20 unless such sale is made as part of a transaction that

21 will ensure that such project will continue to operate

22 at least until the maturity date of such loan or mort23 gage, in a manner that will provide rental housing on

24 terms at least as advantageous to existing and future

25 tenants as the terms required by the program under
36

•S 1299 EAH

1 which the loan or mortgage was made or insured

2 prior to the assignment of the loan or mortgage on

3 such project to the Secretary.

4 ‘‘(2) SALE OF CERTAIN PROJECTS.—The Sec5 retary may not approve the sale of any subsidized

6 project—

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

8 the Secretary, or

9 ‘‘(B) if the sale transaction involves the pro10 vision of any additional subsidy funds by the

11 Secretary or a recasting of the mortgage,

12 unless such sale is made as part of a transaction that

13 will ensure that the project will continue to operate,

14 at least until the maturity date of the loan or mort15 gage, in a manner that will provide rental housing on

16 terms at least as advantageous to existing and future

17 tenants as the terms required by the program under

18 which the loan or mortgage was made or insured

19 prior to the proposed sale of the project.

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

21 GOVERNMENTS.—Notwithstanding any provision of

22 law that requires competitive sales or bidding, the

23 Secretary may carry out negotiated sales of mortgages

24 held by the Secretary, without the competitive selec25 tion of purchasers or intermediaries, to units of gen-
37

•S 1299 EAH

1 eral local government or State agencies, or groups of

2 investors that include at least one such unit of general

3 local government or State agency, if the negotiations

4 are conducted with such agencies, except that—

5 ‘‘(A) the terms of any such sale shall in6 clude the agreement of the purchasing agency or

7 unit of local government or State agency to act

8 as mortgagee or owner of a beneficial interest in

9 such mortgages, in a manner consistent with

10 maintaining the projects that are subject to such

11 mortgages for occupancy by the general tenant

12 group intended to be served by the applicable

13 mortgage insurance program, including, to the

14 extent the Secretary determines appropriate, au15 thorizing such unit of local government or State

16 agency to enforce the provisions of any regu17 latory agreement or other program requirements

18 applicable to the related projects; and

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

20 shall be, in the determination of the Secretary,

21 the best prices that may be obtained for such

22 mortgages from a unit of general local govern23 ment or State agency, consistent with the expec24 tation and intention that the projects financed

25 will be retained for use under the applicable
38

•S 1299 EAH

1 mortgage insurance program for the life of the

2 initial mortgage insurance contract.

3 ‘‘(4) SALE OF MORTGAGES COVERING

4 UNSUBSIDIZED PROJECTS.—Notwithstanding any

5 other provision of law, the Secretary may sell mort6 gages held on projects that are not subsidized or for7 merly subsidized projects on such terms and condi8 tions as the Secretary may prescribe.

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

10 Secretary may carry out a demonstration to test the

11 feasibility of restructuring and disposing of troubled

12 multifamily mortgages held by the Secretary through

13 the establishment of partnerships with public, private,

14 and nonprofit entities.

15 ‘‘(6) PROJECT SALE DEMONSTRATION.—The Sec16 retary may carry out a demonstration to test the fea17 sibility of disposing of troubled multifamily housing

18 projects that are owned by the Secretary through the

19 establishment of partnerships with public, private,

20 and nonprofit entities.

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

22 of each year, the Secretary shall submit to the Congress a

23 report describing the status of multifamily housing projects

24 owned by or subject to mortgages held by the Secretary, on

25 an aggregate basis, which highlights the differences, if any,
39

•S 1299 EAH

1 between the subsidized and the unsubsidized inventory. The

2 report shall include—

3 ‘‘(1) the average and median size of the projects;

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

5 State and region;

6 ‘‘(3) the years during which projects were as7 signed to the Department, and the average and me8 dian length of time that projects remain in the HUD9 held inventory;

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

11 ‘‘(5) the physical condition of the HUD-held and

12 HUD-owned inventory;

13 ‘‘(6) the occupancy profile of the projects, includ14 ing the income, family size, race, and ethnic origin

15 of current tenants, and the rents paid by such ten16 ants;

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

18 ‘‘(8) the number of projects for which the Sec19 retary is mortgagee in possession;

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

21 sales;

22 ‘‘(10) the number of HUD-owned projects sold;

23 ‘‘(11) a description of actions undertaken pursu24 ant to this section, including a description of the ef25 fectiveness of such actions and any impediments to
40

•S 1299 EAH

1 the disposition or management of multifamily hous2 ing projects;

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

4 provisions of this section and actions taken under this

5 section have displaced tenants of multifamily housing

6 projects;

7 ‘‘(13) a description of any of the functions per8 formed in connection with this section that are con9 tracted out to public or private entities or to States;

10 and

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

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

13 (c) CLARIFICATION OF FEDERAL PREFERENCES.—

14 (1) PUBLIC HOUSING TENANCY.—Section

15 6(c)(4)(A)(i) of the United States Housing Act of

16 1937 (42 U.S.C. 1437d(c)(4)(A)(i)) is amended by in17 serting after ‘‘displaced’’ the following: ‘‘(including

18 displacement because of disposition of a multifamily

19 housing project under section 203 of the Housing and

20 Community Development Amendments of 1978)’’.

21 (2) SECTION 8 ASSISTANCE.—Section

22 8(d)(1)(A)(i) of the United States Housing Act of

23 1937 (42 U.S.C. 1437f(d)(1)(A)(i)) is amended by in24 serting after ‘‘displaced’’ the following: ‘‘(including

25 displacement because of disposition of a multifamily
41

•S 1299 EAH

1 housing project under section 203 of the Housing and

2 Community Development Amendments of 1978)’’.

3 (3) VOUCHER ASSISTANCE.—The first sentence of

4 section 8(o)(3)(B) of the United States Housing Act

5 of 1937 (42 U.S.C. 1437f(o)(3)(B)) is amended by in6 serting after ‘‘displaced’’ the following: ‘‘(including

7 displacement because of disposition of a multifamily

8 housing project under section 203 of the Housing and

9 Community Development Amendments of 1978)’’.

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

11 United States Housing Act of 1937 (42 U.S.C. 1437f(f)(1))

12 is amended by inserting ‘‘an agency of the Federal Govern13 ment,’’ after ‘‘cooperative,’’.

14 (e) AMENDMENT TO NATIONAL HOUSING ACT.—Title

15 V of the National Housing Act (12 U.S.C. 1731a et seq.)

16 is amended by adding at the end the following new section:

17 ‘‘PARTIAL PAYMENT OF CLAIMS ON MULTIFAMILY HOUSING

18 PROJECTS

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

20 other provision of law, if the Secretary is requested to accept

21 assignment of a mortgage insured by the Secretary that cov22 ers a multifamily housing project (as such term is defined

23 in section 203(b) of the Housing and Community Develop24 ment Amendments of 1978) and the Secretary determines

25 that partial payment would be less costly to the Federal

26 Government than other reasonable alternatives for main-
42

•S 1299 EAH

1 taining the low-income character of the project, the Sec2 retary may request the mortgagee, in lieu of assignment,

3 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 Secretary

13 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 days

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

18 regulations shall take effect upon issuance and invite public

19 comment on the interim regulations. The Secretary shall

20 issue final regulations to implement such amendments after

21 opportunity for such public comment, but not later than

22 12 months after the date of issuance of such interim regula23 tions.
43

•S 1299 EAH

1 SEC. 102. REPEAL OF STATE AGENCY MULTIFAMILY PROP2 ERTY DISPOSITION DEMONSTRATION.

3 Section 184 of the Housing and Community Develop4 ment Act of 1987 (12 U.S.C. 1701z–11 note) is hereby re5 pealed.

6 SEC. 103. PREVENTING MORTGAGE DEFAULTS ON MULTI7 FAMILY HOUSING PROJECTS.

8 (a) MULTIFAMILY HOUSING PLANNING AND INVEST9 MENT STRATEGIES.—

10 (1) PREPARATION OF ASSESSMENTS FOR INDE11 PENDENT ENTITIES.—Section 402(a) of the Housing

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

13 1715–1a note) is amended by adding at the end the

14 following new sentence: ‘‘The assessment shall be pre15 pared by an entity that does not have an identity of

16 interest with the owner.’’.

17 (2) TIMING OF SUBMISSION OF NEEDS ASSESS18 MENTS.—Section 402(b) of the Housing and Commu19 nity Development Act of 1992 (12 U.S.C. 1715z–1a

20 note) is amended to read as follows:

21 ‘‘(b) TIMING.—To ensure that assessments for all cov22 ered multifamily housing properties will be submitted on

23 or before the conclusion of fiscal year 1997, the Secretary

24 shall require the owners of such properties, including cov25 ered multifamily housing properties for the elderly, to sub-
44

•S 1299 EAH

1 mit the assessments for the properties in accordance with

2 the following schedule:

3 ‘‘(1) For fiscal year 1994, 10 percent of the ag4 gregate number of such properties.

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

6 1997, an additional 30 percent of the aggregate num7 ber of such properties.’’.

8 (3) REVIEW OF COMPREHENSIVE NEEDS ASSESS9 MENTS.—Section 404(d) of the Housing and Commu10 nity Development Act of 1992 (12 U.S.C. 1715–1a

11 note) is amended to read as follows:

12 ‘‘(d) REVIEW.—

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

14 each comprehensive needs assessment for completeness

15 and adequacy before the expiration of the 90-day pe16 riod beginning on the receipt of the assessment and

17 shall notify the owner of the property for which the

18 assessment was submitted of the findings of such re19 view.

20 ‘‘(2) INCOMPLETE OR INADEQUATE ASSESS21 MENTS.—If the Secretary determines that the assess22 ment is substantially incomplete or inadequate, the

23 Secretary shall—
45

•S 1299 EAH

1 ‘‘(A) notify the owner of the portion or por2 tions of the assessment requiring completion or

3 other revision; and

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

5 amended assessment to the Secretary not later

6 than 30 days after such notification.’’.

7 (4) REPEAL OF NOTICE PROVISION.—Section 404

8 of the Housing and Community Development Act of

9 1992 (12 U.S.C. 1715–1a note) is amended by strik10 ing subsection (f).

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

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

13 1715z–1a note), as amended by paragraph (4) of this

14 subsection, is further amended by inserting after sub15 section (e) the following new subsection:

16 ‘‘(f) PUBLICATION OF METHOD FOR RECEIVING CAP17 ITAL NEEDS ASSESSMENT.—The Secretary shall cause to

18 be published in the Federal Register the method by which

19 the Secretary determines which capital needs assessments

20 will be received each year in accordance with section 402(b)

21 and subsection (d) of this section.’’.

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

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

24 1715z–1a note) is amended by adding at the end the

25 following new section:
46

•S 1299 EAH

1 ‘‘SEC. 409. FUNDING.

2 ‘‘(a) ALLOCATION OF ASSISTANCE.—Based upon needs

3 identified in comprehensive needs assessments, and subject

4 to otherwise applicable program requirements, including se5 lection criteria, the Secretary may allocate the following as6 sistance to owners of covered multifamily housing projects

7 and may provide such assistance on a noncompetitive basis:

8 ‘‘(1) Operating assistance and capital improve9 ment assistance for troubled multifamily housing

10 projects pursuant to section 201 of the Housing and

11 Community Development Amendments of 1978, except

12 for assistance set aside under section 201(n)(1).

13 ‘‘(2) Loan management assistance available pur14 suant to section 8 of the United States Housing Act

15 of 1937.

16 ‘‘(b) OPERATING ASSISTANCE AND CAPITAL IMPROVE17 MENT ASSISTANCE.—In providing assistance under sub18 section (a) the Secretary shall use the selection criteria set

19 forth in section 201(n) of the Housing and Community De20 velopment Amendments of 1978.

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

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

23 capital needs assessment of an owner selected to receive as24 sistance under this section.’’.

25 (b) FLEXIBLE SUBSIDY PROGRAM.—
47

•S 1299 EAH

1 (1) DELETION OF UTILITY COST REQUIRE2 MENTS.—Section 201(i) of the Housing and Commu3 nity Development Amendments of 1978 (12 U.S.C.

4 1715z–1a(i)) is hereby repealed.

5 (2) REPEAL OF MANDATORY CONTRIBUTION

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

7 Community Development Amendments of 1978 (12

8 U.S.C. 1715z–1a(k)(2)) is amended by striking ‘‘, ex9 cept that’’ and all that follows and inserting a period.

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

11 and Community Development Amendments of 1978

12 (42 U.S.C. 1715z–1a(n)) is amended to read as

13 follows:

14 ‘‘(n) ALLOCATION OF ASSISTANCE.—

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

16 to provide, assistance for capital improvements under

17 this section, in each fiscal year the Secretary shall set

18 aside an amount, as determined by the Secretary, for

19 projects that are eligible for incentives under section

20 224(b) of the Emergency Low Income Housing Preser21 vation Act of 1987, as such section existed before the

22 date of enactment of the Cranston-Gonzalez National

23 Affordable Housing Act. The Secretary may make

24 such assistance available on a noncompetitive basis.
48

•S 1299 EAH

1 ‘‘(2) GENERAL RULES FOR ALLOCATION.—Except

2 as provided in paragraph (3), with respect to assist3 ance under this section not set aside for projects

4 under paragraph (1), the Secretary—

5 ‘‘(A) may award assistance on a non6 competitive basis; and

7 ‘‘(B) shall award assistance to eligible

8 projects on the basis of—

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

10 physically or financially troubled, as evi11 denced by the comprehensive needs assess12 ment submitted in accordance with title IV

13 of the Housing and Community Develop14 ment Act of 1992; and

15 ‘‘(ii) the extent to which such assist16 ance is necessary and reasonable to prevent

17 the default of federally insured mortgages.

18 ‘‘(3) EXCEPTIONS.—The Secretary may make ex19 ceptions to selection criteria set forth in paragraph

20 (2)(B) to permit the provision of assistance to eligible

21 projects based upon—

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

23 necessary to prevent the imminent foreclosure or

24 default of a project whose owner has not submit25 ted a comprehensive needs assessment pursuant
49

•S 1299 EAH

1 to title IV of the Housing and Community Devel2 opment Act of 1992;

3 ‘‘(B) the extent to which the project presents

4 an imminent threat to the life, health, and safety

5 of project residents; or

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

7 may specify by regulation or by notice printed

8 in the Federal Register.

9 ‘‘(4) CONSIDERATIONS.—In providing assistance

10 under this section, the Secretary shall take into con11 sideration—

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

13 that there will be significant opportunities for

14 residents (including a resident council or resi15 dent management corporation, as appropriate)

16 to be involved in the management of the project

17 (except that this paragraph shall have no appli18 cation to projects that are owned as coopera19 tives); and

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

21 that the project owner has provided competent

22 management and complied with all regulatory

23 and administrative requirements.’’.
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•S 1299 EAH

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

2 Community Development Amendments of 1978 (12

3 U.S.C. 1715z–1a) is amended—

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

5 (B) by redesignating subsection (p) as sub6 section (o).

7 (c) IMPLEMENTATION AND EFFECTIVE DATES FOR

8 SUBSECTIONS (a) AND (b).—

9 (1) IN GENERAL.—Except as provided in para10 graph (2), the amendments made by subsections (a)

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

12 available for fiscal year 1994 and fiscal years there13 after.

14 (2) EXCEPTION.—Section 201(n)(1) of the Hous15 ing and Community Development Amendments of

16 1978 (as added by the amendment made by subsection

17 (b)(3) of this section) shall take effect on the date of

18 enactment of this Act.

19 (3) NOTICE.—The Secretary shall, by notice pub20 lished in the Federal Register, establish any require21 ments necessary to implement the amendments made

22 by subsections (a) and (b). The notice shall invite

23 public comments and, not later than 12 months after

24 the date on which the notice is published, the Sec25 retary shall issue final regulations based on the ini-
51

•S 1299 EAH

1 tial notice, taking into consideration any public com2 ments received.

3 (d) STREAMLINED REFINANCING.—As soon as prac4 ticable, the Secretary shall implement a streamlined refi5 nancing program under the authority provided in section

6 223 of the National Housing Act to prevent the default of

7 mortgages insured by the FHA which cover multifamily

8 housing projects, as defined in section 203(b) of the Housing

9 and Community Development Amendments of 1978.

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

11 (1) IN GENERAL.—Not later than April 1, 1995,

12 the Comptroller General of the United States shall

13 submit to the Committee on Banking, Finance and

14 Urban Affairs of the House of Representatives and the

15 Committee on Banking, Housing, and Urban Affairs

16 of the Senate a report that evaluates the adequacy of

17 loan loss reserves in the General Insurance and Spe18 cial Risk Insurance Funds and presents recommenda19 tions for the Secretary to prevent losses from occur20 ring.

21 (2) CONTENTS.—The report submitted under

22 paragraph (1) shall—

23 (A) evaluate the factors considered in arriv24 ing at loss estimates and determine whether

25 other factors should be considered;
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1 (B) determine the relative benefit of creat2 ing a new, actuarially sound insurance fund for

3 all new multifamily housing insurance commit4 ments; and

5 (C) recommend alternatives to the Sec6 retary’s current procedures for preventing the fu7 ture default of multifamily housing project mort8 gages insured under title II of the National

9 Housing Act.

10 (f) GAO STUDY ON ACTUARIAL SOUNDNESS OF CER11 TAIN INSURANCE PROGRAMS.—

12 (1) IN GENERAL.—Not later than April 1, 1995,

13 the Comptroller General of the United States shall

14 submit to the Committee on Banking, Housing, and

15 Urban Affairs of the Senate and the Committee on

16 Banking, Finance and Urban Affairs of the House of

17 Representatives a report that evaluates, in connection

18 with the General Insurance Fund, the role and per19 formance of the nursing home, hospital, and retire20 ment service center insurance programs.

21 (2) CONTENTS.—The reports submitted under

22 paragraph (1) shall—

23 (A) evaluate the strategic importance of

24 these insurance programs to the mission of the

25 FHA;
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1 (B) evaluate the impact of these insurance

2 programs upon the financial performance of the

3 General Insurance Fund;

4 (C) assess the potential losses expected

5 under these programs through fiscal year 1999;

6 (D) evaluate the risk of these programs to

7 the General Insurance Fund in connection with

8 changes in national health care policy;

9 (E) assess the ability of the FHA to manage

10 these programs; and

11 (F) make recommendations for any nec12 essary changes.

13 (g) RISK ASSESSMENT.—

14 (1) SPECIAL RISK INSURANCE FUND.—Section

15 238(c) of the National Housing Act (12 U.S.C.

16 1715z–3(c)) is amended by adding at the end the fol17 lowing new paragraph:

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

19 assessment of the risks associated with each of the in20 surance programs comprising the Special Risk Insur21 ance Fund, and shall present findings from such re22 view to the Congress in the FHA Annual Manage23 ment Report.’’.

24 (2) GENERAL INSURANCE FUND.—Section 519 of

25 the National Housing Act (12 U.S.C. 1735c) is
54

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1 amended by adding at the end the following new sub2 section:

3 ‘‘(g) RISK ASSESSMENT.—The Secretary shall under4 take an annual assessment of the risks associated with each

5 of the insurance programs comprising the General Insur6 ance Fund, and shall present findings from such review to

7 the Congress in the FHA Annual Management Report.’’.

8 (h) ALTERNATIVE USES FOR PREVENTION OF DE9 FAULT.—

10 (1) IN GENERAL.—Subject to notice to and com11 ment by existing tenants, to prevent the imminent de12 fault of a multifamily housing project subject to a

13 mortgage insured under title II of the National Hous14 ing Act, the Secretary may authorize the mortgagor

15 to use the project for purposes not contemplated by or

16 permitted under the regulatory agreement, if—

17 (A) such other uses are acceptable to the

18 Secretary;

19 (B) such other uses would be otherwise in20 surable under title II of the National Housing

21 Act;

22 (C) the outstanding principal balance on

23 the mortgage covering such project is not in24 creased;
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1 (D) any financial benefit accruing to the

2 mortgagor shall, subject to the discretion of the

3 Secretary, be applied to project reserves or

4 project rehabilitation; and

5 (E) such other use serves a public purpose.

6 (2) DISPLACEMENT PROTECTION.—The Secretary

7 may take actions under paragraph (1) only if—

8 (A) tenant-based rental assistance under

9 section 8 of the United States Housing Act of

10 1937 is made available to each eligible family re11 siding in the project that is displaced as a result

12 of such actions; and

13 (B) the Secretary determines that sufficient

14 habitable, affordable (as such term is defined in

15 section 203(b) of the Housing and Community

16 Development Amendments of 1978) rental hous17 ing is available in the market area in which the

18 project is located to ensure use of such assistance.

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

20 notice published in the Federal Register, which shall

21 take effect upon publication, establish such require22 ments as may be necessary to implement the amend23 ments made by this subsection. The notice shall invite

24 public comments and, not later than 12 months after

25 the date on which the notice is published, the Sec-
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1 retary shall issue final regulations based on the ini2 tial notice, taking into account any public comments

3 received.

4 SEC. 104. INTEREST RATES ON ASSIGNED MORTGAGES.

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

6 Urban Development Act (42 U.S.C. 3535(i)(5)) is amended

7 by striking the first semicolon, and all that follows through

8 ‘‘as determined by the Secretary’’.

9 SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

10 (a) SPECIAL RISK INSURANCE FUND.—Section 238(b)

11 of the National Housing Act (12 U.S.C. 1715z–3(b)) is

12 amended by striking the fifth sentence.

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

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

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

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

17 section 103(g)(2) of this Act) as subsection (f).

18 (c) MULTIFAMILY INSURANCE FUND APPROPRIA19 TIONS.—Title V of the National Housing Act (12 U.S.C.

20 1731a et seq.) is amended by adding after section 541 (as

21 added by section 101(e) of this Act) the following new sec22 tion:
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1 ‘‘SEC. 542. AUTHORIZATION OF APPROPRIATIONS FOR GEN2 ERAL AND SPECIAL RISK INSURANCE FUNDS.

3 ‘‘There are authorized to be appropriated such sums

4 as may be necessary for each of fiscal years 1994 and 1995,

5 to be allocated in any manner that the Secretary determines

6 appropriate, for the following costs incurred in conjunction

7 with programs authorized under the General Insurance

8 Fund, as provided by section 519, and the Special Risk In9 surance Fund, as provided by section 238:

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

11 section 502 of the Congressional Budget Act, of new

12 insurance commitments.

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

14 section 502 of the Congressional Budget Act, of modi15 fications to existing loans, loan guarantees, or insur16 ance commitments.

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

18 section 502 of the Congressional Budget Act, of loans

19 provided under section 203(f) of the Housing and

20 Community Development Amendments of 1978.

21 ‘‘(4) The costs of the rehabilitation of multifam22 ily housing projects (as defined in section 203(b) of

23 the Housing and Community Development Amend24 ments of 1978) upon disposition by the Secretary.’’.
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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 Af8 fordable Housing Act (42 U.S.C. 12704(2)) is amended—

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

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

11 following: ‘‘, or any agency or instrumentality thereof

12 that is established pursuant to legislation and des13 ignated by the chief executive officer to act on behalf

14 of the State with regard to the provisions of this Act’’.

15 SEC. 202. SIMPLIFICATION OF PROGRAM-WIDE INCOME

16 TARGETING FOR RENTAL HOUSING.

17 Section 214(1) of the Cranston-Gonzalez National Af18 fordable Housing Act (42 U.S.C. 12744(1)) is amended—

19 (1) in subparagraph (A)—

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

21 with respect to dwelling units that are occupied

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

23 such rental assistance are’’; and

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

25 (ii) the dwelling units assisted with such funds
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1 are occupied by families having such incomes;

2 and’’; and

3 (2) in subparagraph (B)—

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

5 with respect to dwelling units that are occupied

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

7 such rental assistance are’’; and

8 (B) by inserting before the semicolon at the

9 end the following: ‘‘, or (ii) the dwelling units

10 assisted with such funds are occupied by such

11 households’’.

12 SEC. 203. HOMEOWNERSHIP UNITS.

13 (a) REMOVAL OF FIRST-TIME HOMEBUYER REQUIRE14 MENT.—Section 215(b) of the Cranston-Gonzalez National

15 Affordable Housing Act (42 U.S.C. 12745(b)) is amended—

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

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

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

19 (b) SIMPLIFICATION OF RESALE PROVISIONS.—Sec20 tion 215(b)(3)(B) of the Cranston-Gonzalez National Af21 fordable Housing Act (42 U.S.C. 12745(b)(3)(B)), as so re22 designated by subsection (a) of this section, is amended by

23 striking ‘‘subsection’’ and inserting ‘‘title’’.
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1 SEC. 204. SIMPLIFICATION OF MATCHING REQUIREMENTS.

2 Section 220(a) of the Cranston-Gonzalez National Af3 fordable Housing Act (42 U.S.C. 12750(a)) is amended to

4 read as follows:

5 ‘‘(a) CONTRIBUTION.—Each participating jurisdiction

6 shall make contributions to housing that qualifies as afford7 able housing under this title that total, throughout a fiscal

8 year, not less than 25 percent of the funds drawn from the

9 jurisdiction’s HOME Investment Trust Fund in such fiscal

10 year. Such contributions shall be in addition to any

11 amounts made available under section 216(3)(A)(ii).’’.

12 SEC. 205. REPEAL OF SEPARATE AUDIT REQUIREMENT.

13 Section 283 of the Cranston-Gonzalez National Afford14 able Housing Act (42 U.S.C. 12833) is amended—

15 (1) by striking the section designation and head16 ing and inserting the following:

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

18 (2) by striking subsection (a);

19 (3) in subsection (b)—

20 (A) by striking ‘‘(b) AUDITS BY THE COMP21 TROLLER GENERAL.—’’;

22 (B) by redesignating paragraphs (1) and

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

24 (C) by moving subsections (a) and (b), as so

25 redesignated by subparagraph (B), 2 ems to the
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1 left so that such subsections are flush with the

2 left margin; and

3 (4) in subsection (a), as so redesignated by para4 graph (3)(B), by striking the second sentence.

5 SEC. 206. ENVIRONMENTAL REVIEW REQUIREMENTS.

6 Section 288 of the Cranston-Gonzalez National Afford7 able Housing Act (42 U.S.C. 12838) is amended—

8 (1) in subsection (a)—

9 (A) in the first sentence, by striking ‘‘par10 ticipating jurisdictions’’ and inserting ‘‘jurisdic11 tions, Indian tribes, or insular areas’’; and

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

13 sentences: ‘‘The regulations shall provide—

14 ‘‘(1) for the monitoring of the environmental re15 views performed under this section;

16 ‘‘(2) in the discretion of the Secretary, to facili17 tate training for the performance of such reviews; and

18 ‘‘(3) for the suspension or termination of the as19 sumption under this section.

20 The Secretary’s duty under the preceding sentence shall not

21 be construed to limit or reduce any responsibility assumed

22 by a State or unit of general local government with respect

23 to any particular release of funds.’’;
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1 (2) in the first sentence of subsection (b), by

2 striking ‘‘participating jurisdiction’’ and inserting

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

4 (3) in subsection (c)(4)(B), by striking ‘‘partici5 pating jurisdiction’’ and inserting ‘‘jurisdiction, In6 dian tribe, or insular area’’; and

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

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

9 inserting the following: ‘‘ASSISTANCE TO UNITS OF

10 GENERAL LOCAL GOVERNMENT FROM A STATE.—In

11 the case of assistance to units of general local govern12 ment from a State’’.

13 SEC. 207. USE OF CDBG FUNDS FOR HOME PROGRAM EX14 PENSES.

15 (a) ADMINISTRATIVE EXPENSES.—Section 105(a)(13)

16 of the Housing and Community Development Act of 1974

17 (42 U.S.C. 5305(a)(13)) is amended by inserting after

18 ‘‘charges related to’’ the following: ‘‘(A) administering the

19 HOME program under title II of the Cranston-Gonzalez

20 National Affordable Housing Act; and (B)’’.

21 (b) PROJECT DELIVERY COSTS.—Section 105(a)(21)

22 of the Housing and Community Development Act of 1974

23 (42 U.S.C. 5305(a)(21)) is amended—

24 (1) by inserting ‘‘in connection with tenant25 based rental assistance and affordable housing
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1 projects assisted under title II of the Cranston-Gon2 zalez National Affordable Housing Act’’ after ‘‘hous3 ing counseling’’; and

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

5 through ‘‘any law’’ and inserting ‘‘assisted under title

6 II of the Cranston-Gonzalez National Affordable

7 Housing Act’’.

8 SEC. 208. FLEXIBILITY OF HOME PROGRAM FOR DISASTER

9 AREAS.

10 Title II of the Cranston-Gonzalez National Affordable

11 Housing Act (42 U.S.C. 12721 et seq.) is amended by add12 ing at the end the following new section:

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

14 AREAS.

15 ‘‘For funds designated under this title by a recipient

16 to address the damage in an area for which the President

17 has declared a disaster under title IV of the Robert T. Staf18 ford Disaster Relief and Emergency Assistance Act, the Sec19 retary may suspend all statutory requirements for purposes

20 of assistance under this title for that area, except for those

21 related to public notice of funding availability, non22 discrimination, fair housing, labor standards, environ23 mental standards, and low-income housing affordability.’’.
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1 SEC. 209. APPLICABILITY AND REGULATIONS.

2 The amendments made by this title shall apply with

3 respect to any amounts made available to carry out title

4 II of the Cranston-Gonzalez National Affordable Housing

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

6 amounts made available to carry out such title before such

7 date of enactment that remain uncommitted on such date.

8 The Secretary shall issue any regulations necessary to carry

9 out the amendments made by this title not later than the

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

11 the enactment of this Act.

12 Subtitle B—HOPE Homeownership

13 Program

14 SEC. 221. MATCHING REQUIREMENT UNDER HOPE FOR

15 HOMEOWNERSHIP OF SINGLE FAMILY HOMES

16 PROGRAM.

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

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

19 by striking ‘‘33 percent’’ and inserting ‘‘25 percent’’.

20 Subtitle C—Community

21 Development Block Grants

22 SEC. 231. SECTION 108 ELIGIBLE ACTIVITIES.

23 The first sentence of section 108(a) of the Housing and

24 Community Development Act of 1974 (42 U.S.C. 5308(a))

25 is amended—

26 (1) by striking ‘‘or’’ after ‘‘section 105(a);’’; and
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1 (2) by inserting before the period the following:

2 ‘‘; (5) the acquisition, construction, reconstruction, or

3 installation of public facilities (except for buildings

4 for the general conduct of government); or (6) in the

5 case of colonias (as such term is defined in section

6 916 of the Cranston-Gonzalez National Affordable

7 Housing Act), public works and site or other improve8 ments’’.

9 SEC. 232. ECONOMIC DEVELOPMENT GRANTS.

10 (a) GRANTS.—

11 (1) IN GENERAL.—Section 108 of the Housing

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

13 5308) is amended by adding at the end the following

14 new subsection:

15 ‘‘(q) ECONOMIC DEVELOPMENT GRANTS.—

16 ‘‘(1) AUTHORIZATION.—The Secretary may make

17 grants in connection with notes or other obligations

18 guaranteed under this section to eligible public enti19 ties for the purpose of enhancing the security of loans

20 guaranteed under this section or improving the via21 bility of projects financed with loans guaranteed

22 under this section.

23 ‘‘(2) ELIGIBLE ACTIVITIES.—Assistance under

24 this subsection may be used only for the purposes of
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1 and in conjunction with projects and activities as2 sisted under subsection (a).

3 ‘‘(3) APPLICATIONS.—Applications for assistance

4 under this subsection may be submitted only by eligi5 ble public entities, and shall be in the form and in

6 accordance with the procedures established by the Sec7 retary. Eligible public entities may apply for grants

8 only in conjunction with requests for guarantees

9 under subsection (a).

10 ‘‘(4) SELECTION CRITERIA.—The Secretary shall

11 establish criteria for awarding assistance under this

12 subsection. Such criteria shall include—

13 ‘‘(A) the extent of need for such assistance;

14 ‘‘(B) the level of distress in the community

15 to be served and in the jurisdiction applying for

16 assistance;

17 ‘‘(C) the quality of the plan proposed and

18 the capacity or potential capacity of the appli19 cant to successfully carry out the plan; and

20 ‘‘(D) such other factors as the Secretary de21 termines to be appropriate.’’.

22 (2) CONFORMING AMENDMENT.—Title I of the

23 Housing and Community Development Act of 1974

24 (42 U.S.C. 5301 et seq.) is amended—
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1 (A) in section 101(c) in the second sentence,

2 by inserting ‘‘or a grant’’ after ‘‘guarantee’’; and

3 (B) in section 104(b)(3), by inserting ‘‘or a

4 grant’’ after ‘‘guarantee’’.

5 (b) USE OF UDAG RECAPTURES.—Section 119(o) of

6 the Housing and Community Development Act of 1974 (42

7 U.S.C. 5318(o)) is amended by inserting before the period

8 the following: ‘‘, except that amounts available to the Sec9 retary for use under this subsection as of October 1, 1993,

10 and amounts released to the Secretary pursuant to sub11 section (t) may be used to provide grants under section

12 108(q).’’.

13 (c) UDAG RETENTION PROGRAM.—

14 (1) AMENDMENT.—Section 119 of the Housing

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

16 5318) is amended by adding at the end the following

17 new subsection:

18 ‘‘(t) UDAG RETENTION PROGRAM.—If a grant or a

19 portion of a grant under this section remains unexpended

20 upon the issuance of a notice implementing this subsection,

21 the grantee may enter into an agreement, as provided under

22 this subsection, with the Secretary to receive a percentage

23 of the grant amount and relinquish all claims to the balance

24 of the grant within 90 days of the issuance of notice imple25 menting this subsection (or such later date as the Secretary
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1 may approve). The Secretary shall not recapture any funds

2 obligated pursuant to this section during a period begin3 ning on the date of enactment of the Multifamily Housing

4 Property Disposition Reform Act of 1994 until 90 days

5 after the issuance of a notice implementing this subsection.

6 A grantee may receive as a grant under this subsection—

7 ‘‘(1) 33 percent of such unexpended amounts if—

8 ‘‘(A) the grantee agrees to expend not less

9 than one-half of the amount received for activi10 ties authorized pursuant to section 108(q) and to

11 expend such funds in conjunction with a loan

12 guarantee made under section 108 at least equal

13 to twice the amount of the funds received; and

14 ‘‘(B)(i) the remainder of the amount re15 ceived is used for economic development activi16 ties eligible under title I of this Act; and

17 ‘‘(ii) except when waived by the Secretary

18 in the case of a severely distressed jurisdiction,

19 not more than one-half of the costs of activities

20 under subparagraph (B) are derived from such

21 unexpended amounts; or

22 ‘‘(2) 25 percent of such unexpended amounts if—

23 ‘‘(A) the grantee agrees to expend such

24 funds for economic development activities eligible

25 under title I of this Act; and
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1 ‘‘(B) except when waived by the Secretary

2 in the case of a severely distressed jurisdiction,

3 not more than one-half of the costs of such activi4 ties are derived from such unexpended amount.’’.

5 (2) IMPLEMENTATION.—Not later than 10 days

6 after the date of enactment of this Act, the Secretary

7 shall, by notice published in the Federal Register,

8 which shall take effect upon publication, establish

9 such requirements as may be necessary to implement

10 the amendments made by this subsection.

11 SEC. 233. GUARANTEE OF OBLIGATIONS BACKED BY SEC12 TION 108 LOANS.

13 Section 108 of the Housing and Community Develop14 ment Act of 1974 (42 U.S.C. 5308) is amended by adding

15 after subsection (q) (as added by section 232(a)(1) of this

16 Act) the following new subsection:

17 ‘‘(r) GUARANTEE OF OBLIGATIONS BACKED BY

18 LOANS.—

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

20 such terms and conditions as the Secretary considers

21 appropriate, guarantee the timely payment of the

22 principal of and interest on such trust certificates or

23 other obligations as may—
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1 ‘‘(A) be offered by the Secretary or by any

2 other offeror approved for purposes of this sub3 section by the Secretary; and

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

5 pool composed of notes or other obligations guar6 anteed or eligible for guarantee by the Secretary

7 under this section.

8 ‘‘(2) FULL FAITH AND CREDIT.—To the same ex9 tent as provided in subsection (f), the full faith and

10 credit of the United States is pledged to the payment

11 of all amounts that may be required to be paid under

12 any guarantee made by the Secretary under this sub13 section.

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

15 claim under a guarantee made under this section, the

16 Secretary shall be subrogated for all the rights of the

17 holder of the guaranteed certificate or obligation with

18 respect to such certificate or obligation.

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

20 and no Federal law, shall preclude or limit the exer21 cise by the Secretary of—

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

23 public offerings and other sales of notes, trust

24 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 Secretary,

7 as applicable, in notes, certificates, or other obli8 gations guaranteed under this section, or con9 stituting the trust or pool against which trust

10 certificates, or other obligations guaranteed

11 under this section, are offered.’’.

12 SEC. 234. 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 adding

16 at the end the following new section:

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

18 AREAS.

19 ‘‘For funds designated under this title by a recipient

20 to address the damage in an area for which the President

21 has declared a disaster under title IV of the Robert T. Staf22 ford Disaster Relief and Emergency Assistance Act, the Sec23 retary may suspend all requirements for purposes of assist24 ance under section 106 for that area, except for those related

25 to public notice of funding availability, nondiscrimination,
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1 fair housing, labor standards, environmental standards,

2 and requirements that activities benefit persons of low- and

3 moderate-income.’’.

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)) is

9 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 preced18 ing 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)’’ and

17 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 striking

21 ‘‘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 1937

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

5 following new paragraph:

6 ‘‘(4) Adjustments to a public housing agency’s operat7 ing subsidy made by the Secretary under this section shall

8 reflect actual changes in rental income collections resulting

9 from the application of section 904 of the Stewart B.

10 McKinney Homeless Assistance Amendments Act of 1988.’’.

11 SEC. 305. ENVIRONMENTAL REVIEW PROVISIONS.

12 (a) LEAD-BASED PAINT HAZARD REDUCTION.—Sec13 tion 1011 of the Housing and Community Development Act

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

15 (1) by redesignating subsection (o) as subsection

16 (p); and

17 (2) by inserting after subsection (n) the following

18 new subsection:

19 ‘‘(o) ENVIRONMENTAL REVIEW.—

20 ‘‘(1) IN GENERAL.—For purposes of environ21 mental review, decisionmaking, and action pursuant

22 to the National Environmental Policy Act of 1969

23 and other provisions of law that further the purposes

24 of such Act, a grant under this section shall be treated

25 as assistance under the HOME Investment Partner26 ship Act, established under title II of the Cranston-
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1 Gonzalez National Affordable Housing Act, and shall

2 be subject to the regulations promulgated by the Sec3 retary to implement section 288 of such Act.

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

5 apply to—

6 ‘‘(A) grants awarded under this section; and

7 ‘‘(B) grants awarded to States and units of

8 general local government for the abatement of

9 significant lead-based paint and lead dust haz10 ards in low- and moderate-income owner-occu11 pied units and low-income privately owned rent12 al units pursuant to title II of the Departments

13 of Veterans Affairs and Housing and Urban De14 velopment, and Independent Agencies Appro15 priations Act, 1992 (Public Law 102–139, 105

16 Stat. 736).’’.

17 (b) PROGRAMS UNDER UNITED STATES HOUSING ACT

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

19 (42 U.S.C. 1437 et seq.) is amended by adding at the end

20 the following new section:

21 ‘‘SEC. 26. ENVIRONMENTAL REVIEWS.

22 ‘‘(a) IN GENERAL.—

23 ‘‘(1) RELEASE OF FUNDS.—In order to assure

24 that the policies of the National Environmental Pol25 icy Act of 1969 and other provisions of law which
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1 further the purposes of such Act (as specified in regu2 lations issued by the Secretary) are most effectively

3 implemented in connection with the expenditure of

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

5 undiminished protection of the environment, the Sec6 retary may, under such regulations, in lieu of the en7 vironmental protection procedures otherwise applica8 ble, provide for the release of funds for projects or ac9 tivities under this title, as specified by the Secretary

10 upon the request of a public housing agency (includ11 ing an Indian housing authority) under this section,

12 if the State or unit of general local government, as

13 designated by the Secretary in accordance with regu14 lations, assumes all of the responsibilities for environ15 mental review, decisionmaking, and action pursuant

16 to such Act, and such other provisions of law as the

17 regulations of the Secretary may specify, which would

18 otherwise apply to the Secretary with respect to the

19 release of funds.

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

21 consultation with the Council on Environmental

22 Quality, shall issue such regulations as may be nec23 essary to carry out this section. Such regulations shall

24 specify the programs to be covered.
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1 ‘‘(b) PROCEDURE.—The Secretary shall approve the

2 release of funds subject to the procedures authorized by this

3 section only if, not less than 15 days prior to such approval

4 and prior to any commitment of funds to such projects or

5 activities, the public housing agency (including an Indian

6 housing authority) has submitted to the Secretary a request

7 for such release accompanied by a certification of the State

8 or unit of general local government which meets the require9 ments of subsection (c). The Secretary’s approval of any

10 such certification shall be deemed to satisfy the Secretary’s

11 responsibilities under the National Environmental Policy

12 Act of 1969 and such other provisions of law as the regula13 tions of the Secretary specify insofar as those responsibil14 ities relate to the release of funds which are covered by such

15 certification.

16 ‘‘(c) CERTIFICATION.—A certification under the proce17 dures authorized by this section shall—

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

19 ‘‘(2) be executed by the chief executive officer or

20 other officer of the State or unit of general local gov21 ernment who qualifies under regulations of the Sec22 retary;

23 ‘‘(3) specify that the State or unit of general

24 local government under this section has fully carried
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1 out its responsibilities as described under subsection

2 (a); and

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

4 ‘‘(A) consents to assume the status of a re5 sponsible Federal official under the National En6 vironmental Policy Act of 1969 and each provi7 sion of law specified in regulations issued by the

8 Secretary insofar as the provisions of such Act or

9 other such provision of law apply pursuant to

10 subsection (a); and

11 ‘‘(B) is authorized and consents on behalf of

12 the State or unit of general local government and

13 himself or herself to accept the jurisdiction of the

14 Federal courts for the purpose of enforcement of

15 his or her responsibilities as such an official.

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

17 of general local government carries out the responsibilities

18 described in subsection (c), the Secretary may permit the

19 State to perform those actions of the Secretary described

20 in subsection (b) and the performance of such actions by

21 the State, where permitted by the Secretary, shall be deemed

22 to satisfy the Secretary’s responsibilities referred to in the

23 second sentence of subsection (b).’’.

24 (c) SPECIAL PROJECTS.—

25 (1) IN GENERAL.—
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1 (A) RELEASE OF FUNDS.—In order to as2 sure that the policies of the National Environ3 mental Policy Act of 1969 and other provisions

4 of law which further the purposes of such Act (as

5 specified in regulations issued by the Secretary)

6 are most effectively implemented in connection

7 with the expenditure of funds for special projects

8 appropriated under an appropriations Act for

9 the Department of Housing and Urban Develop10 ment, such as special projects under the head

11 ‘‘Annual Contributions for Assisted Housing’’ in

12 title II of the Departments of Veterans Affairs

13 and Housing and Urban Development, and Inde14 pendent Agencies Appropriations Act, 1993, and

15 to assure to the public undiminished protection

16 of the environment, the Secretary of Housing

17 and Urban Development may, under such regu18 lations, in lieu of the environmental protection

19 procedures otherwise applicable, provide for the

20 release of funds for particular special projects

21 upon the request of recipients of special projects

22 assistance, if the State or unit of general local

23 government, as designated by the Secretary in

24 accordance with regulations, assumes all of the

25 responsibilities for environmental review, deci-
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1 sionmaking, and action pursuant to such Act,

2 and such other provisions of law as the regula3 tions of the Secretary specify, that would other4 wise apply to the Secretary were the Secretary to

5 undertake such special projects as Federal

6 projects.

7 (B) IMPLEMENTATION.—The Secretary shall

8 issue regulations to carry out this subsection

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

11 (i) provide for monitoring of the per12 formance of environmental reviews under

13 this subsection;

14 (ii) in the discretion of the Secretary,

15 provide for the provision or facilitation of

16 training for such performance; and

17 (iii) subject to the discretion of the Sec18 retary, provide for suspension or termi19 nation by the Secretary of the assumption

20 under subparagraph (A).

21 (C) RESPONSIBILITIES OF STATE OR UNIT

22 OF GENERAL LOCAL GOVERNMENT.—The Sec23 retary’s duty under subparagraph (B) shall not

24 be construed to limit any responsibility assumed

25 by a State or unit of general local government
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1 with respect to any particular release of funds

2 under subparagraph (A).

3 (2) PROCEDURE.—The Secretary shall approve

4 the release of funds for projects subject to the proce5 dures authorized by this subsection only if, not less

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

7 commitment of funds to such projects, the recipient

8 submits to the Secretary a request for such release, ac9 companied by a certification of the State or unit of

10 general local government which meets the require11 ments of paragraph (3). The Secretary’s approval of

12 any such certification shall be deemed to satisfy the

13 Secretary’s responsibilities under the National Envi14 ronmental Policy Act of 1969 and such other provi15 sions of law as the regulations of the Secretary specify

16 insofar as those responsibilities relate to the releases

17 of funds for special projects to be carried out pursu18 ant thereto which are covered by such certification.

19 (3) CERTIFICATION.—A certification under the

20 procedures authorized by this subsection shall—

21 (A) be in a form acceptable to the secretary;

22 (B) be executed by the chief executive officer

23 or other officer of the State or unit of general

24 local government who qualifies under regulations

25 of the Secretary;
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1 (C) specify that the State or unit of general

2 local government under this subsection has fully

3 carried out its responsibilities as described under

4 paragraph (1); and

5 (D) specify that the certifying officer—

6 (i) consents to assume the status of a

7 responsible Federal official under the Na8 tional Environmental Policy Act of 1969

9 and each provision of law specified in regu10 lations issued by the Secretary insofar as

11 the provisions of such Act or other such pro12 vision of law apply pursuant to paragraph

13 (1); and

14 (ii) is authorized and consents on be15 half of the State or unit of general local

16 government and himself or herself to accept

17 the jurisdiction of the Federal courts for the

18 purpose of enforcement of the responsibil19 ities as such an official.

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

21 unit of general local government carries out the re22 sponsibilities described in paragraph (1), the Sec23 retary may permit the State to perform those actions

24 of the Secretary described in paragraph (2) and the

25 performance of such actions by the State, where per-
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1 mitted by the Secretary, shall be deemed to satisfy the

2 Secretary’s responsibilities referred to in the second

3 sentence of paragraph (2).

4 SEC. 306. CORRECTION OF FHA MULTIFAMILY MORTGAGE

5 LIMITS.

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

7 amended in sections 207(c)(3), 213(b)(2), 220(d)(3)(B)(iii),

8 and 234(e)(3) by striking ‘‘$59,160’’ each place it appears

9 and inserting ‘‘$56,160’’.

10 SEC. 307. AMENDMENTS TO FHA MULTIFAMILY RISK-SHAR11 ING AND HOUSING FINANCE AGENCY PILOT

12 PROGRAMS.

13 (a) RISK-SHARING PILOT PROGRAM.—Section 542(b)

14 of the Housing and Community Development Act of 1992

15 (12 U.S.C. 1707 note) is amended—

16 (1) by striking paragraphs (1) and (2) and in17 serting the following new paragraphs:

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

19 out a pilot program in conjunction with qualified

20 participating entities to determine the effectiveness of

21 Federal credit enhancement for loans for affordable

22 multifamily housing through a system of risk-sharing

23 agreements with such entities.

24 ‘‘(2) PROGRAM REQUIREMENTS.—
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1 ‘‘(A) IN GENERAL.—In carrying out the

2 pilot program under this subsection, the Sec3 retary shall enter into risk-sharing agreements

4 with qualified participating entities.

5 ‘‘(B) MORTGAGE INSURANCE AND REINSUR6 ANCE.—Agreements under subparagraph (A)

7 may provide for (i) mortgage insurance through

8 the Federal Housing Administration of loans for

9 affordable multifamily housing originated by or

10 through, or purchased by, qualified participating

11 entities, and (ii) reinsurance, including reinsur12 ance of pools of loans, on affordable multifamily

13 housing. In entering into risk-sharing agree14 ments under this subsection covering mortgages,

15 the Secretary may give preference to mortgages

16 that are not already in the portfolios of qualified

17 participating entities.

18 ‘‘(C) RISK APPORTIONMENT.—Agreements

19 entered into under this subsection between the

20 Secretary and a qualified participating entity

21 shall specify the percentage of loss that each of

22 the parties to the agreement will assume in the

23 event of default of the insured or reinsured mul24 tifamily mortgage. Such agreements shall specify

25 that the qualified participating entity and the
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1 Secretary shall share any loss in accordance

2 with the risk-sharing agreement.

3 ‘‘(D) REIMBURSEMENT CAPACITY.—Agree4 ments entered into under this subsection between

5 the Secretary and a qualified participating en6 tity shall provide evidence acceptable to the Sec7 retary of the capacity of such entity to fulfill

8 any reimbursement obligations made pursuant to

9 this subsection. Evidence of such capacity which

10 may be considered by the Secretary may in11 clude—

12 ‘‘(i) a pledge of the full faith and cred13 it of a qualified participating entity to ful14 fill any obligations entered into by the en15 tity;

16 ‘‘(ii) reserves pledged or otherwise re17 stricted by the qualified participating en18 tity in an amount equal to an agreed upon

19 percentage of the loss assumed by the entity

20 under subparagraph (C);

21 ‘‘(iii) funds pledged through a State or

22 local guarantee fund; or

23 ‘‘(iv) any other form of evidence mutu24 ally agreed upon by the Secretary and the

25 qualified participating entity.
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1 ‘‘(E) UNDERWRITING STANDARDS.—The

2 Secretary shall allow any qualified participating

3 entity to use its own underwriting standards

4 and loan terms and conditions for purposes of

5 underwriting loans to be insured under this sub6 section, except as provided in this section, with7 out further review by the Secretary, except that

8 the Secretary may impose additional underwrit9 ing criteria and loan terms and conditions for

10 contractual agreements where the Secretary re11 tains more than 50 percent of the risk of loss.

12 Any financing permitted on property insured

13 under this subsection other than the first mort14 gage shall be expressly subordinate to the insured

15 mortgage.

16 ‘‘(F) AUTHORITY OF SECRETARY.—The Sec17 retary, upon request of a qualified participating

18 entity, may insure or reinsure and make com19 mitments to insure or reinsure under this section

20 any mortgage, advance, loan, or pool of mort21 gages otherwise eligible under this section, pursu22 ant to a risk-sharing agreement providing that

23 the qualified participating entity will carry out

24 (under a delegation or otherwise, and with or

25 without compensation, but subject to audit, ex-
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1 ception, or review requirements) such credit ap2 proval, appraisal, inspection, issuance of com3 mitments, approval of insurance of advances,

4 cost certification, servicing, property disposition,

5 or other functions as the Secretary shall approve

6 as consistent with the purpose of this section. All

7 appraisals of property for mortgage insurance

8 under this section shall be completed by a Cer9 tified General Appraiser in accordance with the

10 Uniform Standards of Professional Appraisal

11 Practice.

12 ‘‘(G) DISCLOSURE OF RECORDS.—Qualified

13 participating entities shall make available to the

14 Secretary or the Secretary’s designee, at the Sec15 retary’s request, such financial and other records

16 as the Secretary deems necessary for purposes of

17 review and monitoring for the program under

18 this section.’’;

19 (2) in paragraph (4), by striking ‘‘financial in20 stitutions and entities to be eligible to enter into rein21 surance agreements’’ and inserting ‘‘eligibility under

22 this subsection of qualified participating entities’’;

23 (3) by striking paragraph (8) and inserting the

24 following new paragraph:
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1 ‘‘(11) IMPLEMENTATION.—The Secretary shall

2 take any administrative actions necessary to initiate

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

4 (4) by inserting after paragraph (7) the follow5 ing new paragraphs:

6 ‘‘(8) PROHIBITION ON GINNIE MAE

7 SECURITIZATION.—The Government National Mort8 gage Association shall not securitize any multifamily

9 loans insured or reinsured under this subsection.

10 ‘‘(9) QUALIFICATION AS AFFORDABLE HOUS11 ING.—Multifamily housing securing loans insured or

12 reinsured under this subsection shall qualify as af13 fordable only if the housing is occupied by families

14 and bears rents not greater than the gross rent for

15 rent-restricted residential units as determined under

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

17 ‘‘(10) CERTIFICATION OF SUBSIDY LAYERING

18 COMPLIANCE.—The requirements of section 102(d) of

19 the Department of Housing and Urban Development

20 Reform Act of 1989 may be satisfied in connection

21 with a commitment to insure a mortgage under this

22 subsection by a certification by a housing credit agen23 cy (including an entity established by a State that

24 provides mortgage insurance) to the Secretary that

25 the combination of assistance within the jurisdiction
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1 of the Secretary and other government assistance pro2 vided in connection with a property for which a

3 mortgage is to be insured shall not be any greater

4 than is necessary to provide affordable housing.’’.

5 (b) HOUSING FINANCE AGENCY PILOT PROGRAM.—

6 Section 542(c) of the Housing and Community Develop7 ment Act of 1992 (12 U.S.C. 1707 note) is amended—

8 (1) in paragraph (1), by inserting after ‘‘quali9 fied housing finance agencies’’ the following: ‘‘(includ10 ing entities established by States that provide mort11 gage insurance)’’;

12 (2) in paragraph (2)—

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

14 last sentence and inserting the following: ‘‘Such

15 agreements shall specify that the qualified hous16 ing finance agency and the Secretary shall share

17 any loss in accordance with the risk-sharing

18 agreement.’’; and

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

20 subparagraph:

21 ‘‘(F) DISCLOSURE OF RECORDS.—Qualified

22 housing finance agencies shall make available to

23 the Secretary such financial and other records as

24 the Secretary deems necessary for program re25 view and monitoring purposes.’’;
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1 (3) in paragraph (7)—

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

3 (B) by striking ‘‘(2)’’; and

4 (4) by adding at the end the following new para5 graphs:

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

7 ‘‘(A) ENVIRONMENTAL REVIEWS.—

8 ‘‘(i) IN GENERAL.—(I) In order to as9 sure that the policies of the National Envi10 ronmental Policy Act of 1969 and other

11 provisions of law which further the purposes

12 of such Act (as specified in regulations is13 sued by the Secretary) are most effectively

14 implemented in connection with the insur15 ance of mortgages under subsection (c)(2),

16 and to assure to the public undiminished

17 protection of the environment, the Secretary

18 may, under such regulations, in lieu of the

19 environmental protection procedures other20 wise applicable, provide for agreements to

21 endorse for insurance mortgages under sub22 section (c)(2) upon the request of qualified

23 housing finance agencies under this sub24 section, if the State or unit of general local

25 government, as designated by the Secretary
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1 in accordance with regulations, assumes all

2 of the responsibilities for environmental re3 view, decisionmaking, and action pursuant

4 to such Act, and such other provisions of

5 law as the regulations of the Secretary may

6 specify, that would otherwise apply to the

7 Secretary with respect to the insurance of

8 mortgages on particular properties.

9 ‘‘(II) The Secretary shall issue regula10 tions to carry out this subparagraph only

11 after consultation with the Council on En12 vironmental Quality. Such regulations

13 shall, among other matters, provide—

14 ‘‘(aa) for the monitoring of the

15 performance of environmental reviews

16 under this subparagraph;

17 ‘‘(bb) subject to the discretion of

18 the Secretary, for the provision or fa19 cilitation of training for such perform20 ance; and

21 ‘‘(cc) subject to the discretion of

22 the Secretary, for the suspension or ter23 mination by the Secretary of the quali24 fied housing finance agency’s respon25 sibilities under subclause (I).
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1 ‘‘(III) The Secretary’s duty under

2 subclause (II) shall not be construed to limit

3 any responsibility assumed by a State or

4 unit of general local government with re5 spect to any particular property under

6 subclause (I).

7 ‘‘(ii) PROCEDURE.—The Secretary

8 shall approve a mortgage for the provision

9 of mortgage insurance subject to the proce10 dures authorized by this paragraph only if,

11 not less than 15 days prior to such ap12 proval, prior to any approval, commitment,

13 or endorsement of mortgage insurance on

14 the property on behalf of the Secretary, and

15 prior to any commitment by the qualified

16 housing finance agency to provide financing

17 under the risk-sharing agreement with re18 spect to the property, the qualified housing

19 finance agency submits to the Secretary a

20 request for such approval, accompanied by

21 a certification of the State or unit of gen22 eral local government that meets the re23 quirements of clause (iii). The Secretary’s

24 approval of any such certification shall be

25 deemed to satisfy the Secretary’s respon-
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1 sibilities under the National Environmental

2 Policy Act of 1969 and such other provi3 sions of law as the regulations of the Sec4 retary specify insofar as those responsibil5 ities relate to the provision of mortgage in6 surance on the property that is covered by

7 such certification.

8 ‘‘(iii) CERTIFICATION.—A certification

9 under the procedures authorized by this

10 paragraph shall—

11 ‘‘(I) be in a form acceptable to the

12 Secretary;

13 ‘‘(II) be executed by the chief exec14 utive officer or other officer of the State

15 or unit of general local government

16 who qualifies under regulations of the

17 Secretary;

18 ‘‘(III) specify that the State or

19 unit of general local government under

20 this section has fully carried out its re21 sponsibilities as described under clause

22 (i); and

23 ‘‘(IV) specify that the certifying

24 officer consents to assume the status of

25 a responsible Federal official under the
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1 National Environmental Policy Act of

2 1969 and under each provision of law

3 specified in regulations issued by the

4 Secretary insofar as the provisions of

5 such Act or such other provisions of

6 law apply pursuant to clause (i), and

7 is authorized and consents on behalf of

8 the State or unit of general local gov9 ernment and himself or herself to ac10 cept the jurisdiction of the Federal

11 courts for the purpose of enforcement of

12 the responsibilities as such an official.

13 ‘‘(iv) APPROVAL BY STATES.—In cases

14 in which a unit of general local government

15 carries out the responsibilities described in

16 clause (i), the Secretary may permit the

17 State to perform those actions of the Sec18 retary described in clause (ii) and the per19 formance of such actions by the State, where

20 permitted by the Secretary, shall be deemed

21 to satisfy the Secretary’s responsibilities re22 ferred to in the second sentence of clause

23 (ii).

24 ‘‘(B) LEAD-BASED PAINT POISONING PRE25 VENTION.—In carrying out the requirements of
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1 section 302 of the Lead-Based Paint Poisoning

2 Prevention Act, the Secretary may provide by

3 regulation for the assumption of all or part of

4 the Secretary’s duties under such Act by quali5 fied housing finance agencies, for purposes of

6 this section.

7 ‘‘(C) CERTIFICATION OF SUBSIDY LAYERING

8 COMPLIANCE.—The requirements of section

9 102(d) of the Department of Housing and Urban

10 Development Reform Act of 1989 may be satis11 fied in connection with a commitment to insure

12 a mortgage under this subsection by a certifi13 cation by a housing credit agency (including an

14 entity established by a State that provides mort15 gage insurance) to the Secretary that the com16 bination of assistance within the jurisdiction of

17 the Secretary and other government assistance

18 provided in connection with a property for

19 which a mortgage is to be insured shall not be

20 any greater than is necessary to provide afford21 able housing.

22 ‘‘(10) DEFINITIONS.—For purposes of this sub23 section, the following definitions shall apply:

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

25 means a first mortgage on real estate that is—
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1 ‘‘(i) owned in fee simple; or

2 ‘‘(ii) subject to a leasehold interest

3 that—

4 ‘‘(I) has a term of not less than 99

5 years and is renewable; or

6 ‘‘(II) has a remaining term that

7 extends beyond the maturity of the

8 mortgage for a period of not less than

9 10 years.

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

11 mortgage’ means a single first lien given to se12 cure advances on, or the unpaid purchase price

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

14 which the real estate is located, together with the

15 credit instrument, if any, secured thereby. Any

16 other financing permitted on property insured

17 under this section must be expressly subordinate

18 to the insured mortgage.

19 ‘‘(C) UNIT OF GENERAL LOCAL GOVERN20 MENT; STATE.—The terms ‘unit of general local

21 government’ and ‘State’ have the same meanings

22 as in section 102(a) of the Housing and Commu23 nity Development Act of 1974.’’.
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1 (c) DEFINITIONS.—Section 544 of the Housing and

2 Community Development Act of 1992 (12 U.S.C. 1707 note)

3 is amended—

4 (1) by striking paragraph (1) and inserting the

5 following new paragraph:

6 ‘‘(1) The term ‘multifamily housing’ means hous7 ing accommodations on the mortgaged property that

8 are designed principally for residential use, conform

9 to standards satisfactory to the Secretary, and consist

10 of not less than 5 rental units on 1 site. These units

11 may be detached, semidetached, row house, or multi12 family structures.’’; and

13 (2) by adding at the end the following new para14 graph:

15 ‘‘(5) The term ‘qualified participating entity’

16 means an entity approved by the Secretary for par17 ticipation in the pilot program under this subsection,

18 which may include—

19 ‘‘(A) the Federal National Mortgage Asso20 ciation;

21 ‘‘(B) the Federal Home Loan Mortgage Cor22 poration;

23 ‘‘(C) State housing finance and mortgage

24 insurance agencies; and

25 ‘‘(D) the Federal Housing Finance Board.’’.
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1 SEC. 308. SUBSIDY LAYERING REVIEW.

2 Section 911 of the Housing and Community Develop3 ment Act of 1992 (42 U.S.C. 3545 note) is amended—

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

5 following new subsection:

6 ‘‘(a) CERTIFICATION OF SUBSIDY LAYERING COMPLI7 ANCE.—The requirements of section 102(d) of the Depart8 ment of Housing and Urban Development Reform Act of

9 1989 may be satisfied in connection with a project receiving

10 assistance under a program that is within the jurisdiction

11 of the Department of Housing and Urban Development and

12 under section 42 of the Internal Revenue Code of 1986 by

13 a certification by a housing credit agency to the Secretary,

14 submitted in accordance with guidelines established by the

15 Secretary, that the combination of assistance within the ju16 risdiction of the Secretary and other government assistance

17 provided in connection with a property for which assistance

18 is to be provided within the jurisdiction of the Department

19 of Housing and Urban Development and under section 42

20 of the Internal Revenue Code of 1986 shall not be any great21 er than is necessary to provide affordable housing.’’; and

22 (2) by striking subsection (c) and inserting the

23 following new subsection:

24 ‘‘(c) REVOCATION BY SECRETARY.—If the Secretary

25 determines that a housing credit agency has failed to com-
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1 ply with the guidelines established under subsection (a), the

2 Secretary—

3 ‘‘(1) may inform the housing credit agency that

4 the agency may no longer submit certification of sub5 sidy layering compliance under this section; and

6 ‘‘(2) shall carry out section 102(d) of the Depart7 ment of Housing and Urban Development Reform Act

8 of 1989 relating to affected projects allocated a low9 income housing tax credit pursuant to section 42 of

10 the Internal Revenue Code of 1986.’’.

Amend the title so as to read: ‘‘An Act 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.’’.

Attest:

Clerk.

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