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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1299 Engrossed Amendment House (EAH)]

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:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Multifamily 
Housing Property Disposition Reform Act of 1994''.
    (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.
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.

            TITLE I--MULTIFAMILY PROPERTY DISPOSITION REFORM

SEC. 101. MULTIFAMILY PROPERTY DISPOSITION.

    (a) Findings.--The Congress finds that--
            (1) the portfolio of multifamily housing project mortgages 
        insured by the FHA is severely troubled and at risk of default, 
        requiring the Secretary to increase loss reserves from 
        $5,500,000,000 in 1991 to $11,900,000,000 in 1992 to cover 
        estimated future losses;
            (2) the inventory of multifamily housing projects owned by 
        the Secretary has more than quadrupled since 1989, and, by the 
        end of 1994, may exceed 69,000 units;
            (3) the cost to the Federal Government of owning and 
        maintaining multifamily housing projects escalated to 
        $288,000,000 in fiscal year 1993;
            (4) the inventory of multifamily housing projects subject 
        to mortgages held by the Secretary has increased dramatically, 
        to more than 2,400 mortgages, and approximately half of these 
        mortgages, with approximately 219,000 units, are delinquent;
            (5) the inventory of insured and formerly insured 
        multifamily housing projects is deteriorating, potentially 
        endangering tenants and neighborhoods; and
            (6) the current statutory framework governing the 
        disposition of multifamily housing projects effectively impedes 
        the Government's ability to dispose of properties, protect 
        tenants, and ensure that projects are maintained over time.
    (b) Management and Disposition of Multifamily Housing Projects.--
Section 203 of the Housing and Community Development Amendments of 1978 
(12 U.S.C. 1701z-11) is amended to read as follows:

``SEC. 203. MANAGEMENT AND DISPOSITION OF MULTIFAMILY HOUSING PROJECTS.

    ``(a) Goals.--The Secretary of Housing and Urban Development shall 
manage or dispose of multifamily housing projects that are owned by the 
Secretary or that are subject to a mortgage held by the Secretary in a 
manner that--
            ``(1) is consistent with the National Housing Act and this 
        section;
            ``(2) will protect the financial interests of the Federal 
        Government; and
            ``(3) will, in the least costly fashion among reasonable 
        available alternatives, address the goals of--
                    ``(A) preserving certain housing so that it can 
                remain available to and affordable by low-income 
                persons;
                    ``(B) preserving and revitalizing residential 
                neighborhoods;
                    ``(C) maintaining existing housing stock in a 
                decent, safe, and sanitary condition;
                    ``(D) minimizing the involuntary displacement of 
                tenants;
                    ``(E) maintaining housing for the purpose of 
                providing rental housing, cooperative housing, and 
                homeownership opportunities for low-income persons;
                    ``(F) minimizing the need to demolish multifamily 
                housing projects;
                    ``(G) supporting fair housing strategies; and
                    ``(H) disposing of such projects in a manner 
                consistent with local housing market conditions.
In determining the manner in which a project is to be managed or 
disposed of, the Secretary may balance competing goals relating to 
individual projects in a manner that will further the purposes of this 
section.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Multifamily housing project.--The term `multifamily 
        housing project' means any multifamily rental housing project 
        which is, or prior to acquisition by the Secretary was, 
        assisted or insured under the National Housing Act, or was 
        subject to a loan under section 202 of the Housing Act of 1959.
            ``(2) Subsidized project.--The term `subsidized project' 
        means a multifamily housing project that, immediately prior to 
        the assignment of the mortgage on such project to, or the 
        acquisition of such mortgage by, the Secretary, was receiving 
        any of the following types of assistance:
                    ``(A) Below market interest rate mortgage insurance 
                under the proviso of section 221(d)(5) of the National 
                Housing Act.
                    ``(B) Interest reduction payments made in 
                connection with mortgages insured under section 236 of 
                the National Housing Act.
                    ``(C) Direct loans made under section 202 of the 
                Housing Act of 1959.
                    ``(D) Assistance in the form of--
                            ``(i) rent supplement payments under 
                        section 101 of the Housing and Urban 
                        Development Act of 1965,
                            ``(ii) additional assistance payments under 
                        section 236(f)(2) of the National Housing Act,
                            ``(iii) housing assistance payments made 
                        under section 23 of the United States Housing 
                        Act of 1937 (as in effect before January 1, 
                        1975), or
                            ``(iv) housing assistance payments made 
                        under section 8 of the United States Housing 
                        Act of 1937 (excluding payments made for 
                        tenant-based assistance under section 8),
                if (except for purposes of section 183(c) of the 
                Housing and Community Development Act of 1987) such 
                assistance payments are made to more than 50 percent of 
                the units in the project.
            ``(3) Formerly subsidized project.--The term `formerly 
        subsidized project' means a multifamily housing project owned 
        by the Secretary that was a subsidized project immediately 
        prior to its acquisition by the Secretary.
            ``(4) Unsubsidized project.--The term `unsubsidized 
        project' means a multifamily housing project owned by the 
        Secretary that is not a subsidized project or a formerly 
        subsidized project.
            ``(5) Affordable.--A unit shall be considered affordable 
        if--
                    ``(A) for units occupied--
                            ``(i) by very low-income families, the rent 
                        does not exceed 30 percent of 50 percent of the 
                        area median income, as determined by the 
                        Secretary, with adjustments for smaller and 
                        larger families; and
                            ``(ii) by low-income families other than 
                        very low-income families, the rent does not 
                        exceed 30 percent of 80 percent of the area 
                        median income, as determined by the Secretary, 
                        with adjustments for smaller and larger 
                        families; or
                    ``(B) the unit, or the family residing in the unit, 
                is receiving assistance under section 8 of the United 
                States Housing Act of 1937.
            ``(6) Low-income families and very low-income families.--
        The terms `low-income families' and `very low-income families' 
        shall have the meanings given the terms in section 3(b) of the 
        United States Housing Act of 1937.
            ``(7) Preexisting tenant.--The term `preexisting tenant' 
        means, with respect to a multifamily housing project acquired 
        pursuant to this section by a purchaser other than the 
        Secretary at foreclosure or after sale by the Secretary, a 
        family that resides in a unit in the project immediately before 
        the acquisition of the project by the purchaser.
            ``(8) Market area.--The term `market area' means a market 
        area determined by the Secretary.
            ``(9) Secretary.--The term `Secretary' means the Secretary 
        of Housing and Urban Development.
    ``(c) Disposition of Property.--
            ``(1) Disposition to purchasers.--In carrying out this 
        section, the Secretary may dispose of a multifamily housing 
        project owned by the Secretary on a negotiated, competitive 
        bid, or other basis, on such terms as the Secretary deems 
        appropriate considering the low-income character of the project 
        and consistent with the goals in subsection (a), only to a 
        purchaser determined by the Secretary to be capable of--
                    ``(A) satisfying the conditions of the disposition 
                plan developed under paragraph (2) for the project;
                    ``(B) implementing a sound financial and physical 
                management program that is designed to enable the 
                project to meet anticipated operating and repair 
                expenses to ensure that the project will remain in 
                decent, safe, and sanitary condition and in compliance 
                with any standards under applicable State or local 
                laws, rules, ordinances, or regulations relating to the 
                physical condition of the housing and any such 
                standards established by the Secretary;
                    ``(C) responding to the needs of the tenants and 
                working cooperatively with tenant organizations;
                    ``(D) providing adequate organizational, staff, and 
                financial resources to the project; and
                    ``(E) meeting such other requirements as the 
                Secretary may determine.
    ``(2) Disposition plan.--
                    ``(A) In general.--Prior to the sale of a 
                multifamily housing project that is owned by the 
                Secretary, the Secretary shall develop an initial 
                disposition plan for the project that specifies the 
                minimum terms and conditions of the Secretary for 
                disposition of the project, the initial sales price 
                that is acceptable to the Secretary, and the assistance 
                that the Secretary plans to make available to a 
                prospective purchaser in accordance with this section.
                    ``(B) Market-wide plans.--In developing the initial 
                disposition plan under this subsection for a 
                multifamily housing project located in a market area in 
                which at least 1 other multifamily housing project 
                owned by the Secretary is located, the Secretary may 
                coordinate the disposition of all such multifamily 
                housing projects located within the same market area to 
                the extent and in such manner as the Secretary 
                determines appropriate to carry out the goals under 
                subsection (a).
                    ``(C) Sales price.--The initial sales price shall 
                be reasonably related to the intended use of the 
                project after sale, any rehabilitation requirements for 
                the project, the rents for units in the project that 
                can be supported by the market, the amount of rental 
                assistance available for the project under section 8 of 
                the United States Housing Act of 1937, the occupancy 
                profile of the project (including family size and 
                income levels for tenant families), and any other 
                factors that the Secretary considers appropriate.
                    ``(D) Community and tenant input.--In carrying out 
                this section, the Secretary shall develop procedures--
                            ``(i) to obtain appropriate and timely 
                        input into disposition plans from officials of 
                        the unit of general local government affected, 
                        the community in which the project is situated, 
                        and the tenants of the project; and
                            ``(ii) to facilitate, where feasible and 
                        appropriate, the sale of multifamily housing 
                        projects to existing tenant organizations with 
                        demonstrated capacity, to public or nonprofit 
                        entities that represent or are affiliated with 
                        existing tenant organizations, or to other 
                        public or nonprofit entities.
                    ``(E) Technical assistance.--To carry out the 
                procedures developed under subparagraph (D), the 
                Secretary may provide technical assistance, directly or 
                indirectly, and may use amounts available for technical 
                assistance under the Emergency Low Income Housing 
                Preservation Act of 1987, subtitle C of the Low-Income 
                Housing Preservation and Resident Homeownership Act of 
                1990, subtitle B of title IV of the Cranston-Gonzalez 
                National Affordable Housing Act, or this section, for 
                the provision of technical assistance under this 
                paragraph. Recipients of technical assistance funding 
                under the provisions referred to in this subparagraph 
                shall be permitted to provide technical assistance to 
                the extent of such funding under any of such provisions 
                or under this subparagraph, notwithstanding the source 
                of the funding.
            ``(3) Foreclosure sale.--In carrying out this section, the 
        Secretary shall--
                    ``(A) prior to foreclosing on any mortgage held by 
                the Secretary on any multifamily housing project, 
                notify both the unit of general local government in 
                which the property is located and the tenants of the 
                property of the proposed foreclosure sale; and
                    ``(B) dispose of a multifamily housing project 
                through a foreclosure sale only to a purchaser that the 
                Secretary determines is capable of implementing a sound 
                financial and physical management program that is 
                designed to enable the project to meet anticipated 
                operating and repair expenses to ensure that the 
                project will remain in decent, safe, and sanitary 
                condition and in compliance with any standards under 
                applicable State or local laws, rules, ordinances, or 
                regulations relating to the physical condition of the 
                housing and any such standards established by the 
                Secretary.
    ``(d) Management and Maintenance of Properties.--
            ``(1) Contracting for management services.--In carrying out 
        this section, the Secretary may--
                    ``(A) contract for management services for a 
                multifamily housing project that is owned by the 
                Secretary (or for which the Secretary is mortgagee in 
                possession) with for-profit and nonprofit entities and 
                public agencies (including public housing authorities) 
                on a negotiated, competitive bid, or other basis at a 
                price determined by the Secretary to be reasonable, 
                with a manager the Secretary has determined is capable 
                of--
                            ``(i) implementing a sound financial and 
                        physical management program that is designed to 
                        enable the project to meet anticipated 
                        operating and maintenance expenses to ensure 
                        that the project will remain in decent, safe, 
                        and sanitary condition and in compliance with 
                        any standards under applicable State or local 
                        laws, rules, ordinances, or regulations 
                        relating to the physical condition of the 
                        project and any such standards established by 
                        the Secretary;
                            ``(ii) responding to the needs of the 
                        tenants and working cooperatively with tenant 
                        organizations;
                            ``(iii) providing adequate organizational, 
                        staff, and financial resources to the project; 
                        and
                            ``(iv) meeting such other requirements as 
                        the Secretary may determine; and
                    ``(B) require the owner of a multifamily housing 
                project that is subject to a mortgage held by the 
                Secretary to contract for management services for the 
                project in the manner described in subparagraph (A).
            ``(2) Maintenance of projects owned by secretary.--In the 
        case of multifamily housing projects that are owned by the 
        Secretary (or for which the Secretary is mortgagee in 
        possession), the Secretary shall--
                    ``(A) to the greatest extent possible, maintain all 
                such occupied projects in a decent, safe, and sanitary 
                condition and in compliance with any standards under 
                applicable State or local laws, rules, ordinances, or 
                regulations relating to the physical condition of the 
                housing and any such standards established by the 
                Secretary;
                    ``(B) to the greatest extent possible, maintain 
                full occupancy in all such projects; and
                    ``(C) maintain all such projects for purposes of 
                providing rental or cooperative housing.
            ``(3) Projects subject to a mortgage held by secretary.--In 
        the case of any multifamily housing project that is subject to 
        a mortgage held by the Secretary, the Secretary shall require 
        the owner of the project to carry out the requirements of 
        paragraph (2).
    ``(e) Required Assistance.--In disposing of multifamily housing 
property under this section, consistent with the goal of section 
203(a)(3)(A), the Secretary shall take, separately or in combination 
with other actions under this subsection or subsection (f), one or more 
of the following actions:
            ``(1) Contract with owner for project-based assistance.--In 
        the case of multifamily housing projects that are acquired by a 
        purchaser other than the Secretary at foreclosure or after sale 
        by the Secretary, the Secretary may enter into contracts under 
        section 8 of the United States Housing Act of 1937 (to the 
        extent budget authority is available) with owners of the 
        projects, subject to the following requirements:
                    ``(A) Subsidized or formerly subsidized projects 
                receiving mortgage-related assistance.--In the case of 
                a subsidized or formerly subsidized project referred to 
                in subparagraphs (A) through (C) of subsection (b)(2)--
                            ``(i) the contract shall be sufficient to 
                        assist at least all units covered by an 
                        assistance contract under any of the 
                        authorities referred to in subsection (b)(2)(D) 
                        before acquisition or foreclosure, unless the 
                        Secretary acts pursuant to the provisions of 
                        subparagraph (C);
                            ``(ii) the contract shall provide that, 
                        when a vacancy occurs in any unit in the 
                        project requiring project-based rental 
                        assistance pursuant to this subparagraph that 
                        is occupied by a family who is not eligible for 
                        assistance under such section 8, the owner 
                        shall lease the available unit to a family 
                        eligible for assistance under such section 8; 
                        and
                            ``(iii) the Secretary shall take actions to 
                        ensure that any unit in any such project that 
                        does not otherwise receive project-based 
                        assistance under this subparagraph remains 
                        available and affordable for the remaining 
                        useful life of the project, as defined by the 
                        Secretary; to carry out this clause, the 
                        Secretary may require purchasers to establish 
                        use or rent restrictions maintaining the 
                        affordability of such units.
                    ``(B) Subsidized or formerly subsidized projects 
                receiving rental assistance.--In the case of a 
                subsidized or formerly subsidized project referred to 
                in subsection (b)(2)(D) that is not subject to 
                subparagraph (A)--
                            ``(i) the contract shall be sufficient to 
                        assist at least all units in the project that 
                        are covered, or were covered immediately before 
                        foreclosure on or acquisition of the project by 
                        the Secretary, by an assistance contract under 
                        any of the provisions referred to in such 
                        subsection, unless the Secretary acts pursuant 
                        to provisions of subparagraph (C); and
                            ``(ii) the contract shall provide that, 
                        when a vacancy occurs in any unit in the 
                        project requiring project-based rental 
                        assistance pursuant to this subparagraph that 
                        is occupied by a family who is not eligible for 
                        assistance under such section 8, the owner 
                        shall lease the available unit to a family 
                        eligible for assistance under such section 8.
                    ``(C) Exceptions.--
                            ``(i) Authority.--In lieu of providing 
                        project-based assistance under section 8 of the 
                        United States Housing Act of 1937 in accordance 
                        with subparagraph (A)(i) or (B)(i) for a 
                        project, the Secretary may, for certain units 
                        in unsubsidized projects located within the 
                        same market area as the project otherwise 
                        required to be assisted with such project-based 
                        assistance--
                                    ``(I) require use and rent 
                                restrictions providing that such units 
                                shall be available to and affordable by 
                                very low-income families for the 
                                remaining useful life of the project 
                                (as defined by the Secretary), or
                                    ``(II) provide project-based 
                                assistance under section 8 for such 
                                units to be occupied by only very low-
                                income persons,
                        but only if the requirements under clause (ii) 
                        are met.
                            ``(ii) Requirements.--The requirements 
                        under this clause are that--
                                    ``(I) upon the disposition of the 
                                project otherwise required to be 
                                assisted with project-based assistance 
                                under subparagraph (A)(i) or (B)(i), 
                                the Secretary shall make available 
                                tenant-based assistance under section 8 
                                to low-income families residing in 
                                units otherwise required to be assisted 
                                with such project-based assistance; and
                                    ``(II) the number of units subject 
                                to use restrictions or provided 
                                assistance under clause (i) shall be at 
                                least equivalent to the number of units 
                                otherwise required to be assisted with 
                                project-based assistance under section 
                                8 in accordance with subparagraph 
                                (A)(i) or (B)(i).
                    ``(D) Unsubsidized projects.--Notwithstanding 
                actions taken pursuant to subparagraph (C), in the case 
                of unsubsidized projects, the contract shall be 
                sufficient to provide--
                            ``(i) project-based rental assistance for 
                        all units that are covered, or were covered 
                        immediately before foreclosure or acquisition, 
                        by an assistance contract under--
                                    ``(I) the new construction and 
                                substantial rehabilitation program 
                                under section 8(b)(2) of the United 
                                States Housing Act of 1937 (as in 
                                effect before October 1, 1983);
                                    ``(II) the property disposition 
                                program under section 8(b) of such Act;
                                    ``(III) the project-based 
                                certificate program under section 8 of 
                                such Act;
                                    ``(IV) the moderate rehabilitation 
                                program under section 8(e)(2) of such 
                                Act;
                                    ``(V) section 23 of such Act (as in 
                                effect before January 1, 1975);
                                    ``(VI) the rent supplement program 
                                under section 101 of the Housing and 
                                Urban Development Act of 1965; or
                                    ``(VII) section 8 of the United 
                                States Housing Act of 1937, following 
                                conversion from assistance under 
                                section 101 of the Housing and Urban 
                                Development Act of 1965; and
                            ``(ii) tenant-based assistance under 
                        section 8 of the United States Housing Act of 
                        1937 for families that are preexisting tenants 
                        of the project in units that, immediately 
                        before foreclosure or acquisition of the 
                        project by the Secretary, were covered by an 
                        assistance contract under the loan management 
                        set-aside program under section 8(b) of the 
                        United States Housing Act of 1937.
            ``(2) Annual contribution contracts for tenant-based 
        assistance.--In the case of multifamily housing projects that 
        are acquired by a purchaser other than the Secretary at 
        foreclosure or after sale by the Secretary, the Secretary may 
        enter into annual contribution contracts with public housing 
        agencies to provide tenant-based assistance under section 8 of 
        the United States Housing Act of 1937 on behalf of all low-
        income families who are otherwise eligible for assistance in 
        accordance with subparagraph (A), (B), or (D) of paragraph (1) 
        on the date that the project is acquired by the purchaser, 
        subject to the following requirements:
                    ``(A) Requirement of sufficient affordable housing 
                in area.--The Secretary may not take action under this 
                paragraph unless the Secretary determines that there is 
                available in the area an adequate supply of habitable, 
                affordable housing for very low-income families and 
                other low-income families using tenant-based 
                assistance.
                    ``(B) Limitation for subsidized and formerly 
                subsidized projects.--The Secretary may not take 
                actions under this paragraph in connection with units 
                in subsidized or formerly subsidized projects for more 
                than 10 percent of the aggregate number of units in 
                such projects disposed of by the Secretary in any 
                fiscal year.
            ``(3) Other assistance.--
                    ``(A) In general.--In accordance with the authority 
                provided under the National Housing Act, the Secretary 
                may provide other assistance pursuant to subsection (f) 
                to the owners of multifamily housing projects that are 
                acquired by a purchaser other than the Secretary at 
                foreclosure, or after sale by the Secretary, on terms 
                that ensure that--
                            ``(i) at least the units in the project 
                        otherwise required to receive project-based 
                        assistance pursuant to subparagraphs (A), (B), 
                        or (D) of paragraph (1) are available to and 
                        affordable by low-income persons; and
                            ``(ii) for the remaining useful life of the 
                        project, as defined by the Secretary, there 
                        shall be in force such use or rent restrictions 
                        as the Secretary may prescribe.
                    ``(B) Very low-income tenants.--If, as a result of 
                actions taken pursuant to this paragraph, the rents 
                charged to any very low-income families residing in the 
                project who are otherwise required (pursuant to 
                subparagraph (A), (B), or (D) of paragraph (1)) to 
                receive project-based assistance under section 8 of the 
                United States Housing Act of 1937 exceed the amount 
                payable as rent under section 3(a) of the United States 
                Housing Act of 1937, the Secretary shall provide 
                tenant-based assistance under section 8 of such Act to 
                such families.
    ``(f) Discretionary Assistance.--In addition to the actions 
required under subsection (e) for a subsidized, formerly subsidized, or 
unsubsidized multifamily housing project, the Secretary may, pursuant 
to the disposition plan and the goals in subsection (a), take one or 
more of the following actions:
            ``(1) Discounted sales price.--In accordance with the 
        authority provided under the National Housing Act, the 
        Secretary may reduce the selling price of the project. Such 
        reduced sales price shall be reasonably related to the intended 
        use of the property after sale, any rehabilitation requirements 
        for the project, the rents for units in the project that can be 
        supported by the market, the amount of rental assistance 
        available for the project under section 8 of the United States 
        Housing Act of 1937, the occupancy profile of the project 
        (including family size and income levels for tenant families), 
        and any other factors that the Secretary considers appropriate.
            ``(2) Use and rent restrictions.--The Secretary may require 
        certain units in a project to be subject to use or rent 
        restrictions providing that such units will be available to and 
        affordable by low- and very low-income persons for the 
        remaining useful life of the property, as defined by the 
        Secretary.
            ``(3) Short-term loans.--The Secretary may provide short-
        term loans to facilitate the sale of a multifamily housing 
        project if--
                    ``(A) authority for such loans is provided in 
                advance in an appropriation Act;
                    ``(B) such loan has a term of not more than 5 
                years;
                    ``(C) the Secretary determines, based upon 
                documentation provided to the Secretary, that the 
                borrower has obtained a commitment of permanent 
                financing to replace the short-term loan from a lender 
                who meets standards established by the Secretary; and
                    ``(D) the terms of such loan are consistent with 
                prevailing practices in the marketplace or the 
                provision of such loan results in no cost to the 
                Government, as defined in section 502 of the 
                Congressional Budget Act of 1974.
            ``(4) Up-front grants.--If the Secretary determines that 
        action under this paragraph is more cost-effective than 
        establishing rents pursuant to subsection (h)(2), the Secretary 
        may utilize the budget authority provided for contracts issued 
        under this section for project-based assistance under section 8 
        of the United States Housing Act of 1937 to (in addition to 
        providing project-based section 8 rental assistance) provide 
        up-front grants for the necessary cost of rehabilitation and 
        other related development costs.
            ``(5) Tenant-based assistance.--The Secretary may make 
        available tenant-based assistance under section 8 of the United 
        States Housing Act of 1937 to families residing in a 
        multifamily housing project that do not otherwise qualify for 
        project-based assistance.
            ``(6) Alternative uses.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, after providing notice to and an 
                opportunity for comment by preexisting tenants, the 
                Secretary may allow not more than--
                            ``(i) 10 percent of the total number of 
                        units in multifamily housing projects that are 
                        disposed of by the Secretary during any fiscal 
                        year to be made available for uses other than 
                        rental or cooperative uses, including low-
                        income homeownership opportunities, or in any 
                        particular project, community space, office 
                        space for tenant or housing-related service 
                        providers or security programs, or small 
                        business uses, if such uses benefit the tenants 
                        of the project; and
                            ``(ii) 5 percent of the total number of 
                        units in multifamily housing projects that are 
                        disposed of by the Secretary during any fiscal 
                        year to be used in any manner, if the Secretary 
                        and the unit of general local government or 
                        area-wide governing body determine that such 
                        use will further fair housing, community 
                        development, or neighborhood revitalization 
                        goals.
                    ``(B) Displacement protection.--The Secretary may 
                take actions under subparagraph (A) only if--
                            ``(i) tenant-based rental assistance under 
                        section 8 of the United States Housing Act of 
                        1937 is made available to each eligible family 
                        residing in the project that is displaced as a 
                        result of such actions; and
                            ``(ii) the Secretary determines that 
                        sufficient habitable, affordable rental housing 
                        is available in the market area in which the 
                        project is located to ensure use of such 
                        assistance.
            ``(7) Transfer for use under other programs of secretary.--
                    ``(A) In general.--Notwithstanding the provisions 
                of subsection (e), the Secretary may, pursuant to an 
                agreement under subparagraph (B), transfer a 
                multifamily housing project--
                            ``(i) to a public housing agency for use of 
                        the project as public housing; or
                            ``(ii) to an entity eligible to own or 
                        operate housing assisted under section 202 of 
                        the Housing Act of 1959 or under section 811 of 
                        the Cranston-Gonzalez National Affordable 
                        Housing Act for use as supportive housing under 
                        either of such sections.
                    ``(B) Requirements for agreement.--An agreement 
                providing for the transfer of a project described in 
                subparagraph (A) shall--
                            ``(i) contain such terms, conditions, and 
                        limitations as the Secretary determines 
                        appropriate, including requirements to ensure 
                        use of the project as public housing, 
                        supportive housing under section 202 of the 
                        Housing Act of 1959, or supportive housing 
                        under section 811 of the Cranston-Gonzalez 
                        National Affordable Housing Act, as applicable; 
                        and
                            ``(ii) ensure that no tenant of the project 
                        will be displaced as a result of actions taken 
                        under this paragraph.
            ``(8) Rebuilding.--Notwithstanding any provision of section 
        8 of the United States Housing Act of 1937, the Secretary may 
        provide project-based assistance in accordance with subsection 
        (e) of this section to support the rebuilding of a multifamily 
        housing project rebuilt or to be rebuilt (in whole or in part 
        and on-site, off-site, or in a combination of both) in 
        connection with disposition under this section, if the 
        Secretary determines that--
                    ``(A) the project is not being maintained in a 
                decent, safe, and sanitary condition;
                    ``(B) rebuilding the project would be less 
                expensive than substantial rehabilitation;
                    ``(C) the unit of general local government in which 
                the project is located approves the rebuilding and 
                makes a financial contribution or other commitment to 
                the project; and
                    ``(D) the rebuilding is a part of a local 
                neighborhood revitalization plan approved by the unit 
                of general local government.
        The provisions of subsection (j)(2) shall apply to any tenants 
        of the project who are displaced.
            ``(9) Emergency assistance funds.--The Secretary may make 
        arrangements with State agencies and units of general local 
        government of States receiving emergency assistance under part 
        A of title IV of the Social Security Act for the provision of 
        assistance under such Act on behalf of eligible families who 
        would reside in any multifamily housing projects.
    ``(g) Protection for Unassisted Very Low-Income Tenants.--For each 
multifamily housing project disposed of under this section, the 
Secretary shall require that, for any very low-income family who is a 
preexisting tenant of the project who (upon disposition) would be 
required to pay rent in an amount in excess of 30 percent of the 
adjusted income (as such term is defined in section 3(b) of the United 
States Housing Act of 1937) of the family--
            ``(1) for a period of 2 years beginning upon the date of 
        the acquisition of the project by the purchaser under such 
        disposition, the rent for the unit occupied by the family may 
        not be increased above the rent charged immediately before 
        acquisition;
            ``(2) such family shall be considered displaced for 
        purposes of the preferences for assistance under sections 
        6(c)(4)(A)(i), 8(d)(1)(A)(i), and 8(o)(3)(B) of the United 
        States Housing Act of 1937; and
            ``(3) notice shall be provided to such family, not later 
        than the date of the acquisition of the project by the 
        purchaser--
                    ``(A) of the requirements under paragraphs (1) and 
                (2); and
                    ``(B) that, after the expiration of the period 
                under paragraph (1), the rent for the unit occupied by 
                the family may be increased.
    ``(h) Contract Requirements.--Contracts for project-based rental 
assistance under section 8 of the United States Housing Act of 1937 
provided pursuant to this section shall be subject to the following 
requirements:
            ``(1) Contract term.--The contract shall have a term of 15 
        years, except that the term may be less than 15 years--
                    ``(A) to the extent that the Secretary finds that, 
                based on the rental charges and financing for the 
                multifamily housing project to which the contract 
                relates, the financial viability of the project can be 
                maintained under a contract having such a term; except 
                that the Secretary shall require that the amount of 
                rent payable by tenants of the project for units 
                assisted under such contract shall not exceed the 
                amount payable for rent under section 3(a) of the 
                United States Housing Act of 1937 for a period of at 
                least 15 years; or
                    ``(B) if such assistance is provided--
                            ``(i) under a contract authorized under 
                        section 6 of the HUD Demonstration Act of 1993; 
                        and
                            ``(ii) pursuant to a disposition plan under 
                        this section for a project that is determined 
                        by the Secretary to be otherwise in compliance 
                        with this section.
            ``(2) Contract rent.--The Secretary shall establish the 
        contract rents under such contracts at levels that, together 
        with other resources available to the purchasers, provide 
        sufficient amounts for the necessary costs of rehabilitating 
        and operating the multifamily housing project and do not exceed 
        the percentage of the existing housing fair market rentals for 
        the market area in which the project assisted under the 
        contract is located as determined by the Secretary under 
        section 8(c) of the United States Housing Act of 1937.
    ``(i) Right of First Refusal for Local and State Government 
Agencies.--
            ``(1) Notification.--Not later than 30 days after the 
        Secretary acquires title to a multifamily housing project, the 
        Secretary shall notify the appropriate unit of general local 
        government (including public housing agencies) and State agency 
        or agencies designated by the chief executive officer of the 
        State in which the project is located of such acquisition of 
        title and that, for a period beginning upon such notification 
        that does not exceed 90 days, such unit of general local 
        government and agency or agencies shall have the exclusive 
        right under this subsection to make bona fide offers to 
        purchase the project.
            ``(2) Right of first refusal.--During the 90-day period, 
        the Secretary may not sell or offer to sell the multifamily 
        housing project other than to a party notified under paragraph 
        (1), unless the unit of general local government and the 
        designated State agency or agencies notify the Secretary that 
        they will not make an offer to purchase the project. The 
        Secretary shall accept a bona fide offer to purchase the 
        project made during such period if it complies with the terms 
        and conditions of the disposition plan for the project or is 
        otherwise acceptable to the Secretary.
            ``(3) Procedure.--The Secretary shall establish any 
        procedures necessary to carry out this subsection.
    ``(j) Displacement of Tenants and Relocation Assistance.--
            ``(1) In general.--Whenever tenants will be displaced as a 
        result of the demolition of, repairs to, or conversion in the 
        use of, a multifamily housing project that is owned by the 
        Secretary (or for which the Secretary is mortgagee in 
        possession), the Secretary shall identify tenants who will be 
        displaced, and shall notify all such tenants of their pending 
        displacement and of any relocation assistance that may be 
        available. In the case of a multifamily housing project that is 
        subject to a mortgage held by the Secretary, the Secretary 
        shall require the owner of the project to carry out the 
        requirements of this paragraph, if the Secretary has authorized 
        the demolition of, repairs to, or conversion in the use of such 
        multifamily housing project.
            ``(2) Rights of displaced tenants.--The Secretary shall 
        ensure for any such tenant (who continues to meet applicable 
        qualification standards) the right--
                    ``(A) to return, whenever possible, to a repaired 
                or rebuilt unit;
                    ``(B) to occupy a unit in another multifamily 
                housing project owned by the Secretary;
                    ``(C) to obtain housing assistance under the United 
                States Housing Act of 1937; or
                    ``(D) to receive any other available similar 
                relocation assistance as the Secretary determines to be 
                appropriate.
    ``(k) Mortgage and Project Sales.--
            ``(1) In general.--The Secretary may not approve the sale 
        of any loan or mortgage held by the Secretary (including any 
        loan or mortgage owned by the Government National Mortgage 
        Association) on any subsidized project or formerly subsidized 
        project, unless such sale is made as part of a transaction that 
        will ensure that such project will continue to operate at least 
        until the maturity date of such loan or mortgage, in a manner 
        that will provide rental housing on terms at least as 
        advantageous to existing and future tenants as the terms 
        required by the program under which the loan or mortgage was 
        made or insured prior to the assignment of the loan or mortgage 
        on such project to the Secretary.
            ``(2) Sale of certain projects.--The Secretary may not 
        approve the sale of any subsidized project--
                    ``(A) that is subject to a mortgage held by the 
                Secretary, or
                    ``(B) if the sale transaction involves the 
                provision of any additional subsidy funds by the 
                Secretary or a recasting of the mortgage,
        unless such sale is made as part of a transaction that will 
        ensure that the project will continue to operate, at least 
        until the maturity date of the loan or mortgage, in a manner 
        that will provide rental housing on terms at least as 
        advantageous to existing and future tenants as the terms 
        required by the program under which the loan or mortgage was 
        made or insured prior to the proposed sale of the project.
            ``(3) Mortgage sales to state and local governments.--
        Notwithstanding any provision of law that requires competitive 
        sales or bidding, the Secretary may carry out negotiated sales 
        of mortgages held by the Secretary, without the competitive 
        selection of purchasers or intermediaries, to units of general 
        local government or State agencies, or groups of investors that 
        include at least one such unit of general local government or 
        State agency, if the negotiations are conducted with such 
        agencies, except that--
                    ``(A) the terms of any such sale shall include the 
                agreement of the purchasing agency or unit of local 
                government or State agency to act as mortgagee or owner 
                of a beneficial interest in such mortgages, in a manner 
                consistent with maintaining the projects that are 
                subject to such mortgages for occupancy by the general 
                tenant group intended to be served by the applicable 
                mortgage insurance program, including, to the extent 
                the Secretary determines appropriate, authorizing such 
                unit of local government or State agency to enforce the 
                provisions of any regulatory agreement or other program 
                requirements applicable to the related projects; and
                    ``(B) the sales prices for such mortgages shall be, 
                in the determination of the Secretary, the best prices 
                that may be obtained for such mortgages from a unit of 
                general local government or State agency, consistent 
                with the expectation and intention that the projects 
                financed will be retained for use under the applicable 
                mortgage insurance program for the life of the initial 
                mortgage insurance contract.
            ``(4) Sale of mortgages covering unsubsidized projects.--
        Notwithstanding any other provision of law, the Secretary may 
        sell mortgages held on projects that are not subsidized or 
        formerly subsidized projects on such terms and conditions as 
        the Secretary may prescribe.
            ``(5) Mortgage sale demonstration.--The Secretary may carry 
        out a demonstration to test the feasibility of restructuring 
        and disposing of troubled multifamily mortgages held by the 
        Secretary through the establishment of partnerships with 
        public, private, and nonprofit entities.
            ``(6) Project sale demonstration.--The Secretary may carry 
        out a demonstration to test the feasibility of disposing of 
        troubled multifamily housing projects that are owned by the 
        Secretary through the establishment of partnerships with 
        public, private, and nonprofit entities.
    ``(l) Report to Congress.--Not later than June 1 of each year, the 
Secretary shall submit to the Congress a report describing the status 
of multifamily housing projects owned by or subject to mortgages held 
by the Secretary, on an aggregate basis, which highlights the 
differences, if any, between the subsidized and the unsubsidized 
inventory. The report shall include--
            ``(1) the average and median size of the projects;
            ``(2) the geographic locations of the projects, by State 
        and region;
            ``(3) the years during which projects were assigned to the 
        Department, and the average and median length of time that 
        projects remain in the HUD-held inventory;
            ``(4) the status of HUD-held mortgages;
            ``(5) the physical condition of the HUD-held and HUD-owned 
        inventory;
            ``(6) the occupancy profile of the projects, including the 
        income, family size, race, and ethnic origin of current 
        tenants, and the rents paid by such tenants;
            ``(7) the proportion of units that are vacant;
            ``(8) the number of projects for which the Secretary is 
        mortgagee in possession;
            ``(9) the number of projects sold in foreclosure sales;
            ``(10) the number of HUD-owned projects sold;
            ``(11) a description of actions undertaken pursuant to this 
        section, including a description of the effectiveness of such 
        actions and any impediments to the disposition or management of 
        multifamily housing projects;
            ``(12) a description of the extent to which the provisions 
        of this section and actions taken under this section have 
        displaced tenants of multifamily housing projects;
            ``(13) a description of any of the functions performed in 
        connection with this section that are contracted out to public 
        or private entities or to States; and
            ``(14) a description of the activities carried out under 
        subsection (i) during the preceding year.''.
    (c) Clarification of Federal Preferences.--
            (1) Public housing tenancy.--Section 6(c)(4)(A)(i) of the 
        United States Housing Act of 1937 (42 U.S.C. 1437d(c)(4)(A)(i)) 
        is amended by inserting after ``displaced'' the following: 
        ``(including displacement because of disposition of a 
        multifamily housing project under section 203 of the Housing 
        and Community Development Amendments of 1978)''.
            (2) Section 8 assistance.--Section 8(d)(1)(A)(i) of the 
        United States Housing Act of 1937 (42 U.S.C. 1437f(d)(1)(A)(i)) 
        is amended by inserting after ``displaced'' the following: 
        ``(including displacement because of disposition of a 
        multifamily housing project under section 203 of the Housing 
        and Community Development Amendments of 1978)''.
            (3) Voucher assistance.--The first sentence of section 
        8(o)(3)(B) of the United States Housing Act of 1937 (42 U.S.C. 
        1437f(o)(3)(B)) is amended by inserting after ``displaced'' the 
        following: ``(including displacement because of disposition of 
        a multifamily housing project under section 203 of the Housing 
        and Community Development Amendments of 1978)''.
    (d) Definition of Owner.--Section 8(f)(1) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(f)(1)) is amended by inserting 
``an agency of the Federal Government,'' after ``cooperative,''.
    (e) Amendment to National Housing Act.--Title V of the National 
Housing Act (12 U.S.C. 1731a et seq.) is amended by adding at the end 
the following new section:

      ``partial payment of claims on multifamily housing projects

    ``Sec. 541. (a) Authority.--Notwithstanding any other provision of 
law, if the Secretary is requested to accept assignment of a mortgage 
insured by the Secretary that covers a multifamily housing project (as 
such term is defined in section 203(b) of the Housing and Community 
Development Amendments of 1978) and the Secretary determines that 
partial payment would be less costly to the Federal Government than 
other reasonable alternatives for maintaining the low-income character 
of the project, the Secretary may request the mortgagee, in lieu of 
assignment, to--
            ``(1) accept partial payment of the claim under the 
        mortgage insurance contract; and
            ``(2) recast the mortgage, under such terms and conditions 
        as the Secretary may determine.
    ``(b) Repayment.--As a condition to a partial claim payment under 
this section, the mortgagor shall agree to repay to the Secretary the 
amount of such payment and such obligation shall be secured by a second 
mortgage on the property on such terms and conditions as the Secretary 
may determine.''.
    (f) Effective Date.--The Secretary shall issue interim regulations 
necessary to implement the amendments made by subsections (b) through 
(d) not later than 90 days after the date of the enactment of this Act. 
Such interim regulations shall take effect upon issuance and invite 
public comment on the interim regulations. The Secretary shall issue 
final regulations to implement such amendments after opportunity for 
such public comment, but not later than 12 months after the date of 
issuance of such interim regulations.

SEC. 102. REPEAL OF STATE AGENCY MULTIFAMILY PROPERTY DISPOSITION 
              DEMONSTRATION.

    Section 184 of the Housing and Community Development Act of 1987 
(12 U.S.C. 1701z-11 note) is hereby repealed.

SEC. 103. PREVENTING MORTGAGE DEFAULTS ON MULTIFAMILY HOUSING PROJECTS.

    (a) Multifamily Housing Planning and Investment Strategies.--
            (1) Preparation of assessments for independent entities.--
        Section 402(a) of the Housing and Community Development Act of 
        1992 (12 U.S.C. 1715-1a note) is amended by adding at the end 
        the following new sentence: ``The assessment shall be prepared 
        by an entity that does not have an identity of interest with 
        the owner.''.
            (2) Timing of submission of needs assessments.--Section 
        402(b) of the Housing and Community Development Act of 1992 (12 
        U.S.C. 1715z-1a note) is amended to read as follows:
    ``(b) Timing.--To ensure that assessments for all covered 
multifamily housing properties will be submitted on or before the 
conclusion of fiscal year 1997, the Secretary shall require the owners 
of such properties, including covered multifamily housing properties 
for the elderly, to submit the assessments for the properties in 
accordance with the following schedule:
            ``(1) For fiscal year 1994, 10 percent of the aggregate 
        number of such properties.
            ``(2) For each of fiscal years 1995, 1996, and 1997, an 
        additional 30 percent of the aggregate number of such 
        properties.''.
            (3) Review of comprehensive needs assessments.--Section 
        404(d) of the Housing and Community Development Act of 1992 (12 
        U.S.C. 1715-1a note) is amended to read as follows:
    ``(d) Review.--
            ``(1) In general.--The Secretary shall review each 
        comprehensive needs assessment for completeness and adequacy 
        before the expiration of the 90-day period beginning on the 
        receipt of the assessment and shall notify the owner of the 
        property for which the assessment was submitted of the findings 
        of such review.
            ``(2) Incomplete or inadequate assessments.--If the 
        Secretary determines that the assessment is substantially 
        incomplete or inadequate, the Secretary shall--
                    ``(A) notify the owner of the portion or portions 
                of the assessment requiring completion or other 
                revision; and
                    ``(B) require the owner to submit an amended 
                assessment to the Secretary not later than 30 days 
                after such notification.''.
            (4) Repeal of notice provision.--Section 404 of the Housing 
        and Community Development Act of 1992 (12 U.S.C. 1715-1a note) 
        is amended by striking subsection (f).
            (5) Publication.--Section 404 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 1715z-1a note), as amended 
        by paragraph (4) of this subsection, is further amended by 
        inserting after subsection (e) the following new subsection:
    ``(f) Publication of Method for Receiving Capital Needs 
Assessment.--The Secretary shall cause to be published in the Federal 
Register the method by which the Secretary determines which capital 
needs assessments will be received each year in accordance with section 
402(b) and subsection (d) of this section.''.
            (6) Funding.--Title IV of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 1715z-1a note) is amended by 
        adding at the end the following new section:

``SEC. 409. FUNDING.

    ``(a) Allocation of Assistance.--Based upon needs identified in 
comprehensive needs assessments, and subject to otherwise applicable 
program requirements, including selection criteria, the Secretary may 
allocate the following assistance to owners of covered multifamily 
housing projects and may provide such assistance on a noncompetitive 
basis:
            ``(1) Operating assistance and capital improvement 
        assistance for troubled multifamily housing projects pursuant 
        to section 201 of the Housing and Community Development 
        Amendments of 1978, except for assistance set aside under 
        section 201(n)(1).
            ``(2) Loan management assistance available pursuant to 
        section 8 of the United States Housing Act of 1937.
    ``(b) Operating Assistance and Capital Improvement Assistance.--In 
providing assistance under subsection (a) the Secretary shall use the 
selection criteria set forth in section 201(n) of the Housing and 
Community Development Amendments of 1978.
    ``(c) Amount of Assistance.--The Secretary may fund all or only a 
portion of the needs identified in the capital needs assessment of an 
owner selected to receive assistance under this section.''.
    (b) Flexible Subsidy Program.--
            (1) Deletion of utility cost requirements.--Section 201(i) 
        of the Housing and Community Development Amendments of 1978 (12 
        U.S.C. 1715z-1a(i)) is hereby repealed.
            (2) Repeal of mandatory contribution from owner.--Section 
        201(k)(2) of the Housing and Community Development Amendments 
        of 1978 (12 U.S.C. 1715z-1a(k)(2)) is amended by striking ``, 
        except that'' and all that follows and inserting a period.
            (3) Funding.--Section 201(n) of the Housing and Community 
        Development Amendments of 1978 (42 U.S.C. 1715z-1a(n)) is 
        amended to read as follows:
    ``(n) Allocation of Assistance.--
            ``(1) Set-aside.--In providing, and contracting to provide, 
        assistance for capital improvements under this section, in each 
        fiscal year the Secretary shall set aside an amount, as 
        determined by the Secretary, for projects that are eligible for 
        incentives under section 224(b) of the Emergency Low Income 
        Housing Preservation Act of 1987, as such section existed 
        before the date of enactment of the Cranston-Gonzalez National 
        Affordable Housing Act. The Secretary may make such assistance 
        available on a noncompetitive basis.
            ``(2) General rules for allocation.--Except as provided in 
        paragraph (3), with respect to assistance under this section 
        not set aside for projects under paragraph (1), the Secretary--
                    ``(A) may award assistance on a noncompetitive 
                basis; and
                    ``(B) shall award assistance to eligible projects 
                on the basis of--
                            ``(i) the extent to which the project is 
                        physically or financially troubled, as 
                        evidenced by the comprehensive needs assessment 
                        submitted in accordance with title IV of the 
                        Housing and Community Development Act of 1992; 
                        and
                            ``(ii) the extent to which such assistance 
                        is necessary and reasonable to prevent the 
                        default of federally insured mortgages.
            ``(3) Exceptions.--The Secretary may make exceptions to 
        selection criteria set forth in paragraph (2)(B) to permit the 
        provision of assistance to eligible projects based upon--
                    ``(A) the extent to which such assistance is 
                necessary to prevent the imminent foreclosure or 
                default of a project whose owner has not submitted a 
                comprehensive needs assessment pursuant to title IV of 
                the Housing and Community Development Act of 1992;
                    ``(B) the extent to which the project presents an 
                imminent threat to the life, health, and safety of 
                project residents; or
                    ``(C) such other criteria as the Secretary may 
                specify by regulation or by notice printed in the 
                Federal Register.
            ``(4) Considerations.--In providing assistance under this 
        section, the Secretary shall take into consideration--
                    ``(A) the extent to which there is evidence that 
                there will be significant opportunities for residents 
                (including a resident council or resident management 
                corporation, as appropriate) to be involved in the 
                management of the project (except that this paragraph 
                shall have no application to projects that are owned as 
                cooperatives); and
                    ``(B) the extent to which there is evidence that 
                the project owner has provided competent management and 
                complied with all regulatory and administrative 
                requirements.''.
            (4) Repeal.--Section 201 of the Housing and Community 
        Development Amendments of 1978 (12 U.S.C. 1715z-1a) is 
        amended--
                    (A) by striking subsection (o); and
                    (B) by redesignating subsection (p) as subsection 
                (o).
    (c) Implementation and Effective Dates for Subsections (a) and 
(b).--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by subsections (a) and (b) shall apply with 
        respect to amounts made available for fiscal year 1994 and 
        fiscal years thereafter.
            (2) Exception.--Section 201(n)(1) of the Housing and 
        Community Development Amendments of 1978 (as added by the 
        amendment made by subsection (b)(3) of this section) shall take 
        effect on the date of enactment of this Act.
            (3) Notice.--The Secretary shall, by notice published in 
        the Federal Register, establish any requirements necessary to 
        implement the amendments made by subsections (a) and (b). The 
        notice shall invite public comments and, not later than 12 
        months after the date on which the notice is published, the 
        Secretary shall issue final regulations based on the initial 
        notice, taking into consideration any public comments received.
    (d) Streamlined Refinancing.--As soon as practicable, the Secretary 
shall implement a streamlined refinancing program under the authority 
provided in section 223 of the National Housing Act to prevent the 
default of mortgages insured by the FHA which cover multifamily housing 
projects, as defined in section 203(b) of the Housing and Community 
Development Amendments of 1978.
    (e) GAO Study on Prevention of Default.--
            (1) In general.--Not later than April 1, 1995, the 
        Comptroller General of the United States shall submit to the 
        Committee on Banking, Finance and Urban Affairs of the House of 
        Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate a report that evaluates the 
        adequacy of loan loss reserves in the General Insurance and 
        Special Risk Insurance Funds and presents recommendations for 
        the Secretary to prevent losses from occurring.
            (2) Contents.--The report submitted under paragraph (1) 
        shall--
                    (A) evaluate the factors considered in arriving at 
                loss estimates and determine whether other factors 
                should be considered;
                    (B) determine the relative benefit of creating a 
                new, actuarially sound insurance fund for all new 
                multifamily housing insurance commitments; and
                    (C) recommend alternatives to the Secretary's 
                current procedures for preventing the future default of 
                multifamily housing project mortgages insured under 
                title II of the National Housing Act.
    (f) GAO Study on Actuarial Soundness of Certain Insurance 
Programs.--
            (1) In general.--Not later than April 1, 1995, the 
        Comptroller General of the United States shall submit to the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Banking, Finance and Urban Affairs of the 
        House of Representatives a report that evaluates, in connection 
        with the General Insurance Fund, the role and performance of 
        the nursing home, hospital, and retirement service center 
        insurance programs.
            (2) Contents.--The reports submitted under paragraph (1) 
        shall--
                    (A) evaluate the strategic importance of these 
                insurance programs to the mission of the FHA;
                    (B) evaluate the impact of these insurance programs 
                upon the financial performance of the General Insurance 
                Fund;
                    (C) assess the potential losses expected under 
                these programs through fiscal year 1999;
                    (D) evaluate the risk of these programs to the 
                General Insurance Fund in connection with changes in 
                national health care policy;
                    (E) assess the ability of the FHA to manage these 
                programs; and
                    (F) make recommendations for any necessary changes.
    (g) Risk Assessment.--
            (1) Special risk insurance fund.--Section 238(c) of the 
        National Housing Act (12 U.S.C. 1715z-3(c)) is amended by 
        adding at the end the following new paragraph:
            ``(3) The Secretary shall undertake an annual assessment of 
        the risks associated with each of the insurance programs 
        comprising the Special Risk Insurance Fund, and shall present 
        findings from such review to the Congress in the FHA Annual 
        Management Report.''.
            (2) General insurance fund.--Section 519 of the National 
        Housing Act (12 U.S.C. 1735c) is amended by adding at the end 
        the following new subsection:
    ``(g) Risk Assessment.--The Secretary shall undertake an annual 
assessment of the risks associated with each of the insurance programs 
comprising the General Insurance Fund, and shall present findings from 
such review to the Congress in the FHA Annual Management Report.''.
    (h) Alternative Uses for Prevention of Default.--
            (1) In general.--Subject to notice to and comment by 
        existing tenants, to prevent the imminent default of a 
        multifamily housing project subject to a mortgage insured under 
        title II of the National Housing Act, the Secretary may 
        authorize the mortgagor to use the project for purposes not 
        contemplated by or permitted under the regulatory agreement, 
        if--
                    (A) such other uses are acceptable to the 
                Secretary;
                    (B) such other uses would be otherwise insurable 
                under title II of the National Housing Act;
                    (C) the outstanding principal balance on the 
                mortgage covering such project is not increased;
                    (D) any financial benefit accruing to the mortgagor 
                shall, subject to the discretion of the Secretary, be 
                applied to project reserves or project rehabilitation; 
                and
                    (E) such other use serves a public purpose.
            (2) Displacement protection.--The Secretary may take 
        actions under paragraph (1) only if--
                    (A) tenant-based rental assistance under section 8 
                of the United States Housing Act of 1937 is made 
                available to each eligible family residing in the 
                project that is displaced as a result of such actions; 
                and
                    (B) the Secretary determines that sufficient 
                habitable, affordable (as such term is defined in 
                section 203(b) of the Housing and Community Development 
                Amendments of 1978) rental housing is available in the 
                market area in which the project is located to ensure 
                use of such assistance.
            (3) Implementation.--The Secretary shall, by notice 
        published in the Federal Register, which shall take effect upon 
        publication, establish such requirements as may be necessary to 
        implement the amendments made by this subsection. The notice 
        shall invite public comments and, not later than 12 months 
        after the date on which the notice is published, the Secretary 
        shall issue final regulations based on the initial notice, 
        taking into account any public comments received.

SEC. 104. INTEREST RATES ON ASSIGNED MORTGAGES.

    Section 7(i)(5) of the Department of Housing and Urban Development 
Act (42 U.S.C. 3535(i)(5)) is amended by striking the first semicolon, 
and all that follows through ``as determined by the Secretary''.

SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

    (a) Special Risk Insurance Fund.--Section 238(b) of the National 
Housing Act (12 U.S.C. 1715z-3(b)) is amended by striking the fifth 
sentence.
    (b) General Insurance Fund.--Section 519 of the National Housing 
Act (12 U.S.C. 1735c) is amended--
            (1) by striking subsection (f); and
            (2) by redesignating subsection (g) (as added by section 
        103(g)(2) of this Act) as subsection (f).
    (c) Multifamily Insurance Fund Appropriations.--Title V of the 
National Housing Act (12 U.S.C. 1731a et seq.) is amended by adding 
after section 541 (as added by section 101(e) of this Act) the 
following new section:

``SEC. 542. AUTHORIZATION OF APPROPRIATIONS FOR GENERAL AND SPECIAL 
              RISK INSURANCE FUNDS.

    ``There are authorized to be appropriated such sums as may be 
necessary for each of fiscal years 1994 and 1995, to be allocated in 
any manner that the Secretary determines appropriate, for the following 
costs incurred in conjunction with programs authorized under the 
General Insurance Fund, as provided by section 519, and the Special 
Risk Insurance Fund, as provided by section 238:
            ``(1) The cost to the Government, as defined in section 502 
        of the Congressional Budget Act, of new insurance commitments.
            ``(2) The cost to the Government, as defined in section 502 
        of the Congressional Budget Act, of modifications to existing 
        loans, loan guarantees, or insurance commitments.
            ``(3) The cost to the Government, as defined in section 502 
        of the Congressional Budget Act, of loans provided under 
        section 203(f) of the Housing and Community Development 
        Amendments of 1978.
            ``(4) The costs of the rehabilitation of multifamily 
        housing projects (as defined in section 203(b) of the Housing 
        and Community Development Amendments of 1978) upon disposition 
        by the Secretary.''.

                    TITLE II--OTHER PROGRAM REFORMS

            Subtitle A--Home Investment Partnerships Program

SEC. 201. PARTICIPATION BY STATE AGENCIES OR INSTRUMENTALITIES.

    Section 104(2) of the Cranston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12704(2)) is amended--
            (1) by striking ``and'' after ``Columbia,''; and
            (2) by inserting before the period at the end the 
        following: ``, or any agency or instrumentality thereof that is 
        established pursuant to legislation and designated by the chief 
        executive officer to act on behalf of the State with regard to 
        the provisions of this Act''.

SEC. 202. SIMPLIFICATION OF PROGRAM-WIDE INCOME TARGETING FOR RENTAL 
              HOUSING.

    Section 214(1) of the Cranston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12744(1)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``such funds are invested with 
                respect to dwelling units that are occupied by'' and 
                inserting ``(i) the families receiving such rental 
                assistance are''; and
                    (B) by striking ``, and'' and inserting ``, or (ii) 
                the dwelling units assisted with such funds are 
                occupied by families having such incomes; and''; and
            (2) in subparagraph (B)--
                    (A) by striking ``such funds are invested with 
                respect to dwelling units that are occupied by'' and 
                inserting ``(i) the families receiving such rental 
                assistance are''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``, or (ii) the dwelling units assisted 
                with such funds are occupied by such households''.

SEC. 203. HOMEOWNERSHIP UNITS.

    (a) Removal of First-Time Homebuyer Requirement.--Section 215(b) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12745(b)) is amended--
            (1) by striking paragraph (3); and
            (2) by redesignating paragraphs (4) and (5) as paragraphs 
        (3) and (4), respectively.
    (b) Simplification of Resale Provisions.--Section 215(b)(3)(B) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12745(b)(3)(B)), as so redesignated by subsection (a) of this section, 
is amended by striking ``subsection'' and inserting ``title''.

SEC. 204. SIMPLIFICATION OF MATCHING REQUIREMENTS.

    Section 220(a) of the Cranston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12750(a)) is amended to read as follows:
    ``(a) Contribution.--Each participating jurisdiction shall make 
contributions to housing that qualifies as affordable housing under 
this title that total, throughout a fiscal year, not less than 25 
percent of the funds drawn from the jurisdiction's HOME Investment 
Trust Fund in such fiscal year. Such contributions shall be in addition 
to any amounts made available under section 216(3)(A)(ii).''.

SEC. 205. REPEAL OF SEPARATE AUDIT REQUIREMENT.

    Section 283 of the Cranston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12833) is amended--
            (1) by striking the section designation and heading and 
        inserting the following:

``SEC. 283. AUDITS BY COMPTROLLER GENERAL.'';

            (2) by striking subsection (a);
            (3) in subsection (b)--
                    (A) by striking ``(b) Audits by the Comptroller 
                General.--'';
                    (B) by redesignating paragraphs (1) and (2) as 
                subsections (a) and (b), respectively; and
                    (C) by moving subsections (a) and (b), as so 
                redesignated by subparagraph (B), 2 ems to the left so 
                that such subsections are flush with the left margin; 
                and
            (4) in subsection (a), as so redesignated by paragraph 
        (3)(B), by striking the second sentence.

SEC. 206. ENVIRONMENTAL REVIEW REQUIREMENTS.

    Section 288 of the Cranston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12838) is amended--
            (1) in subsection (a)--
                    (A) in the first sentence, by striking 
                ``participating jurisdictions'' and inserting 
                ``jurisdictions, Indian tribes, or insular areas''; and
                    (B) by adding at the end the following new 
                sentences: ``The regulations shall provide--
            ``(1) for the monitoring of the environmental reviews 
        performed under this section;
            ``(2) in the discretion of the Secretary, to facilitate 
        training for the performance of such reviews; and
            ``(3) for the suspension or termination of the assumption 
        under this section.
The Secretary's duty under the preceding sentence shall not be 
construed to limit or reduce any responsibility assumed by a State or 
unit of general local government with respect to any particular release 
of funds.'';
            (2) in the first sentence of subsection (b), by striking 
        ``participating jurisdiction'' and inserting ``jurisdiction, 
        Indian tribe, or insular area'';
            (3) in subsection (c)(4)(B), by striking ``participating 
        jurisdiction'' and inserting ``jurisdiction, Indian tribe, or 
        insular area''; and
            (4) in subsection (d), by striking ``Assistance to a 
        State.--In the case of assistance to States'' and inserting the 
        following: ``Assistance to Units of General Local Government 
        From a State.--In the case of assistance to units of general 
        local government from a State''.

SEC. 207. USE OF CDBG FUNDS FOR HOME PROGRAM EXPENSES.

    (a) Administrative Expenses.--Section 105(a)(13) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5305(a)(13)) is amended by 
inserting after ``charges related to'' the following: ``(A) 
administering the HOME program under title II of the Cranston-Gonzalez 
National Affordable Housing Act; and (B)''.
    (b) Project Delivery Costs.--Section 105(a)(21) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5305(a)(21)) is amended--
            (1) by inserting ``in connection with tenant-based rental 
        assistance and affordable housing projects assisted under title 
        II of the Cranston-Gonzalez National Affordable Housing Act'' 
        after ``housing counseling''; and
            (2) by striking ``authorized'' and all that follows through 
        ``any law'' and inserting ``assisted under title II of the 
        Cranston-Gonzalez National Affordable Housing Act''.

SEC. 208. FLEXIBILITY OF HOME PROGRAM FOR DISASTER AREAS.

    Title II of the Cranston-Gonzalez National Affordable Housing Act 
(42 U.S.C. 12721 et seq.) is amended by adding at the end the following 
new section:

``SEC. 290. SUSPENSION OF REQUIREMENTS FOR DISASTER AREAS.

    ``For funds designated under this title by a recipient to address 
the damage in an area for which the President has declared a disaster 
under title IV of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, the Secretary may suspend all statutory requirements 
for purposes of assistance under this title for that area, except for 
those related to public notice of funding availability, 
nondiscrimination, fair housing, labor standards, environmental 
standards, and low-income housing affordability.''.

SEC. 209. APPLICABILITY AND REGULATIONS.

    The amendments made by this title shall apply with respect to any 
amounts made available to carry out title II of the Cranston-Gonzalez 
National Affordable Housing Act after the date of the enactment of this 
Act and any amounts made available to carry out such title before such 
date of enactment that remain uncommitted on such date. The Secretary 
shall issue any regulations necessary to carry out the amendments made 
by this title not later than the expiration of the 45-day period 
beginning on the date of the enactment of this Act.

                 Subtitle B--HOPE Homeownership Program

SEC. 221. MATCHING REQUIREMENT UNDER HOPE FOR HOMEOWNERSHIP OF SINGLE 
              FAMILY HOMES PROGRAM.

    Section 443(c)(1) of the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 12893(c)(1)) is amended by striking ``33 
percent'' and inserting ``25 percent''.

             Subtitle C--Community Development Block Grants

SEC. 231. SECTION 108 ELIGIBLE ACTIVITIES.

    The first sentence of section 108(a) of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5308(a)) is amended--
            (1) by striking ``or'' after ``section 105(a);''; and
            (2) by inserting before the period the following: ``; (5) 
        the acquisition, construction, reconstruction, or installation 
        of public facilities (except for buildings for the general 
        conduct of government); or (6) in the case of colonias (as such 
        term is defined in section 916 of the Cranston-Gonzalez 
        National Affordable Housing Act), public works and site or 
        other improvements''.

SEC. 232. ECONOMIC DEVELOPMENT GRANTS.

    (a) Grants.--
            (1) In general.--Section 108 of the Housing and Community 
        Development Act of 1974 (42 U.S.C. 5308) is amended by adding 
        at the end the following new subsection:
    ``(q) Economic Development Grants.--
            ``(1) Authorization.--The Secretary may make grants in 
        connection with notes or other obligations guaranteed under 
        this section to eligible public entities for the purpose of 
        enhancing the security of loans guaranteed under this section 
        or improving the viability of projects financed with loans 
        guaranteed under this section.
            ``(2) Eligible activities.--Assistance under this 
        subsection may be used only for the purposes of and in 
        conjunction with projects and activities assisted under 
        subsection (a).
            ``(3) Applications.--Applications for assistance under this 
        subsection may be submitted only by eligible public entities, 
        and shall be in the form and in accordance with the procedures 
        established by the Secretary. Eligible public entities may 
        apply for grants only in conjunction with requests for 
        guarantees under subsection (a).
            ``(4) Selection criteria.--The Secretary shall establish 
        criteria for awarding assistance under this subsection. Such 
        criteria shall include--
                    ``(A) the extent of need for such assistance;
                    ``(B) the level of distress in the community to be 
                served and in the jurisdiction applying for assistance;
                    ``(C) the quality of the plan proposed and the 
                capacity or potential capacity of the applicant to 
                successfully carry out the plan; and
                    ``(D) such other factors as the Secretary 
                determines to be appropriate.''.
            (2) Conforming amendment.--Title I of the Housing and 
        Community Development Act of 1974 (42 U.S.C. 5301 et seq.) is 
        amended--
                    (A) in section 101(c) in the second sentence, by 
                inserting ``or a grant'' after ``guarantee''; and
                    (B) in section 104(b)(3), by inserting ``or a 
                grant'' after ``guarantee''.
    (b) Use of UDAG Recaptures.--Section 119(o) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5318(o)) is amended by 
inserting before the period the following: ``, except that amounts 
available to the Secretary for use under this subsection as of October 
1, 1993, and amounts released to the Secretary pursuant to subsection 
(t) may be used to provide grants under section 108(q).''.
    (c) UDAG Retention Program.--
            (1) Amendment.--Section 119 of the Housing and Community 
        Development Act of 1974 (42 U.S.C. 5318) is amended by adding 
        at the end the following new subsection:
    ``(t) UDAG Retention Program.--If a grant or a portion of a grant 
under this section remains unexpended upon the issuance of a notice 
implementing this subsection, the grantee may enter into an agreement, 
as provided under this subsection, with the Secretary to receive a 
percentage of the grant amount and relinquish all claims to the balance 
of the grant within 90 days of the issuance of notice implementing this 
subsection (or such later date as the Secretary may approve). The 
Secretary shall not recapture any funds obligated pursuant to this 
section during a period beginning on the date of enactment of the 
Multifamily Housing Property Disposition Reform Act of 1994 until 90 
days after the issuance of a notice implementing this subsection. A 
grantee may receive as a grant under this subsection--
            ``(1) 33 percent of such unexpended amounts if--
                    ``(A) the grantee agrees to expend not less than 
                one-half of the amount received for activities 
                authorized pursuant to section 108(q) and to expend 
                such funds in conjunction with a loan guarantee made 
                under section 108 at least equal to twice the amount of 
                the funds received; and
                    ``(B)(i) the remainder of the amount received is 
                used for economic development activities eligible under 
                title I of this Act; and
                    ``(ii) except when waived by the Secretary in the 
                case of a severely distressed jurisdiction, not more 
                than one-half of the costs of activities under 
                subparagraph (B) are derived from such unexpended 
                amounts; or
            ``(2) 25 percent of such unexpended amounts if--
                    ``(A) the grantee agrees to expend such funds for 
                economic development activities eligible under title I 
                of this Act; and
                    ``(B) except when waived by the Secretary in the 
                case of a severely distressed jurisdiction, not more 
                than one-half of the costs of such activities are 
                derived from such unexpended amount.''.
            (2) Implementation.--Not later than 10 days after the date 
        of enactment of this Act, the Secretary shall, by notice 
        published in the Federal Register, which shall take effect upon 
        publication, establish such requirements as may be necessary to 
        implement the amendments made by this subsection.

SEC. 233. GUARANTEE OF OBLIGATIONS BACKED BY SECTION 108 LOANS.

    Section 108 of the Housing and Community Development Act of 1974 
(42 U.S.C. 5308) is amended by adding after subsection (q) (as added by 
section 232(a)(1) of this Act) the following new subsection:
    ``(r) Guarantee of Obligations Backed by Loans.--
            ``(1) Authority.--The Secretary may, upon such terms and 
        conditions as the Secretary considers appropriate, guarantee 
        the timely payment of the principal of and interest on such 
        trust certificates or other obligations as may--
                    ``(A) be offered by the Secretary or by any other 
                offeror approved for purposes of this subsection by the 
                Secretary; and
                    ``(B) be based on and backed by a trust or pool 
                composed of notes or other obligations guaranteed or 
                eligible for guarantee by the Secretary under this 
                section.
            ``(2) Full faith and credit.--To the same extent as 
        provided in subsection (f), the full faith and credit of the 
        United States is pledged to the payment of all amounts that may 
        be required to be paid under any guarantee made by the 
        Secretary under this subsection.
            ``(3) Subrogation.--If the Secretary pays a claim under a 
        guarantee made under this section, the Secretary shall be 
        subrogated for all the rights of the holder of the guaranteed 
        certificate or obligation with respect to such certificate or 
        obligation.
            ``(4) Effect of laws.--No State or local law, and no 
        Federal law, shall preclude or limit the exercise by the 
        Secretary of--
                    ``(A) the power to contract with respect to public 
                offerings and other sales of notes, trust certificates, 
                and other obligations guaranteed under this section 
                upon such terms and conditions as the Secretary deems 
                appropriate;
                    ``(B) the right to enforce any such contract by any 
                means deemed appropriate by the Secretary; and
                    ``(C) any ownership rights of the Secretary, as 
                applicable, in notes, certificates, or other 
                obligations guaranteed under this section, or 
                constituting the trust or pool against which trust 
                certificates, or other obligations guaranteed under 
                this section, are offered.''.

SEC. 234. FLEXIBILITY OF CDBG PROGRAM FOR DISASTER AREAS.

    Title I of the Housing and Community Development Act of 1974 (42 
U.S.C. 5301 et seq.) is amended by adding at the end the following new 
section:

``SEC. 122. SUSPENSION OF REQUIREMENTS FOR DISASTER AREAS.

    ``For funds designated under this title by a recipient to address 
the damage in an area for which the President has declared a disaster 
under title IV of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, the Secretary may suspend all requirements for purposes 
of assistance under section 106 for that area, except for those related 
to public notice of funding availability, nondiscrimination, fair 
housing, labor standards, environmental standards, and requirements 
that activities benefit persons of low- and moderate-income.''.

                    TITLE III--TECHNICAL AMENDMENTS

SEC. 301. DEFINITION OF ``FAMILIES''.

    The first sentence of section 3(b)(3)(B) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(b)(3)(B)) is amended by striking 
``means families with children'' and inserting ``includes families with 
children and''.

SEC. 302. ELIMINATION OF REQUIREMENT TO IDENTIFY CIAP REPLACEMENT 
              NEEDS.

    Section 14 of the United States Housing Act of 1937 (42 U.S.C. 
1437l) is amended--
            (1) in subsection (d)--
                    (A) by striking paragraph (2);
                    (B) in paragraph (4), in the matter preceding 
                subparagraph (A)--
                            (i) by striking ``and replacements,''; and
                            (ii) by striking ``(1), (2), and (3)'' and 
                        inserting ``(1) and (2)''; and
                    (C) by redesignating paragraphs (3) and (4) as 
                paragraphs (2) and (3), respectively; and
            (2) in subsection (f)(1)--
                    (A) in subparagraph (A), by striking ``(d)(4)(A)'' 
                and inserting ``(d)(3)(A)'';
                    (B) by striking subparagraph (B);
                    (C) in subparagraph (C), by striking ``(d)(4)'' and 
                inserting ``(d)(3)'';
                    (D) in subparagraph (D)--
                            (i) by striking ``(1), (2), and (3)'' and 
                        inserting ``(1) and (2)''; and
                            (ii) by striking ``(d)(4)'' and inserting 
                        ``(d)(3)''; and
                    (E) by redesignating subparagraphs (C) and (D), as 
                so amended, as subparagraphs (B) and (C), respectively;
            (3) in subsection (g), by striking ``(d)(4)'' and inserting 
        ``(d)(3)''; and
            (4) in subsection (h)(2), by striking ``(d)(4)'' and 
        inserting ``(d)(3)''.

SEC. 303. PROJECT-BASED ACCOUNTING.

    Section 6(c)(4)(E) of the United States Housing Act of 1937 (42 
U.S.C. 1437d(c)(4)(E)) is amended by striking ``250'' and inserting 
``500''.

SEC. 304. OPERATING SUBSIDY ADJUSTMENTS FOR ANTICIPATED FRAUD 
              RECOVERIES.

    Section 9(a) of the United States Housing Act of 1937 (42 U.S.C. 
1437g(a)) is amended by adding at the end the following new paragraph:
    ``(4) Adjustments to a public housing agency's operating subsidy 
made by the Secretary under this section shall reflect actual changes 
in rental income collections resulting from the application of section 
904 of the Stewart B. McKinney Homeless Assistance Amendments Act of 
1988.''.

SEC. 305. ENVIRONMENTAL REVIEW PROVISIONS.

    (a) Lead-Based Paint Hazard Reduction.--Section 1011 of the Housing 
and Community Development Act of 1992 (42 U.S.C. 4852) is amended--
            (1) by redesignating subsection (o) as subsection (p); and
            (2) by inserting after subsection (n) the following new 
        subsection:
    ``(o) Environmental Review.--
            ``(1) In general.--For purposes of environmental review, 
        decisionmaking, and action pursuant to the National 
        Environmental Policy Act of 1969 and other provisions of law 
        that further the purposes of such Act, a grant under this 
        section shall be treated as assistance under the HOME 
        Investment Partnership Act, established under title II of the 
        Cranston-Gonzalez National Affordable Housing Act, and shall be 
        subject to the regulations promulgated by the Secretary to 
        implement section 288 of such Act.
            ``(2) Applicability.--This subsection shall apply to--
                    ``(A) grants awarded under this section; and
                    ``(B) grants awarded to States and units of general 
                local government for the abatement of significant lead-
                based paint and lead dust hazards in low- and moderate-
                income owner-occupied units and low-income privately 
                owned rental units pursuant to title II of the 
                Departments of Veterans Affairs and Housing and Urban 
                Development, and Independent Agencies Appropriations 
                Act, 1992 (Public Law 102-139, 105 Stat. 736).''.
    (b) Programs Under United States Housing Act of 1937.--Title I of 
the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is 
amended by adding at the end the following new section:

``SEC. 26. ENVIRONMENTAL REVIEWS.

    ``(a) In General.--
            ``(1) Release of funds.--In order to assure that the 
        policies of the National Environmental Policy Act of 1969 and 
        other provisions of law which further the purposes of such Act 
        (as specified in regulations issued by the Secretary) are most 
        effectively implemented in connection with the expenditure of 
        funds under this title, and to assure to the public 
        undiminished protection of the environment, the Secretary may, 
        under such regulations, in lieu of the environmental protection 
        procedures otherwise applicable, provide for the release of 
        funds for projects or activities under this title, as specified 
        by the Secretary upon the request of a public housing agency 
        (including an Indian housing authority) under this section, if 
        the State or unit of general local government, as designated by 
        the Secretary in accordance with regulations, assumes all of 
        the responsibilities for environmental review, decisionmaking, 
        and action pursuant to such Act, and such other provisions of 
        law as the regulations of the Secretary may specify, which 
        would otherwise apply to the Secretary with respect to the 
        release of funds.
            ``(2) Implementation.--The Secretary, after consultation 
        with the Council on Environmental Quality, shall issue such 
        regulations as may be necessary to carry out this section. Such 
        regulations shall specify the programs to be covered.
    ``(b) Procedure.--The Secretary shall approve the release of funds 
subject to the procedures authorized by this section only if, not less 
than 15 days prior to such approval and prior to any commitment of 
funds to such projects or activities, the public housing agency 
(including an Indian housing authority) has submitted to the Secretary 
a request for such release accompanied by a certification of the State 
or unit of general local government which meets the requirements of 
subsection (c). The Secretary's approval of any such certification 
shall be deemed to satisfy the Secretary's responsibilities under the 
National Environmental Policy Act of 1969 and such other provisions of 
law as the regulations of the Secretary specify insofar as those 
responsibilities relate to the release of funds which are covered by 
such certification.
    ``(c) Certification.--A certification under the procedures 
authorized by this section shall--
            ``(1) be in a form acceptable to the Secretary;
            ``(2) be executed by the chief executive officer or other 
        officer of the State or unit of general local government who 
        qualifies under regulations of the Secretary;
            ``(3) specify that the State or unit of general local 
        government under this section has fully carried out its 
        responsibilities as described under subsection (a); and
            ``(4) specify that the certifying officer--
                    ``(A) consents to assume the status of a 
                responsible Federal official under the National 
                Environmental Policy Act of 1969 and each provision of 
                law specified in regulations issued by the Secretary 
                insofar as the provisions of such Act or other such 
                provision of law apply pursuant to subsection (a); and
                    ``(B) is authorized and consents on behalf of the 
                State or unit of general local government and himself 
                or herself to accept the jurisdiction of the Federal 
                courts for the purpose of enforcement of his or her 
                responsibilities as such an official.
    ``(d) Approval by States.--In cases in which a unit of general 
local government carries out the responsibilities described in 
subsection (c), the Secretary may permit the State to perform those 
actions of the Secretary described in subsection (b) and the 
performance of such actions by the State, where permitted by the 
Secretary, shall be deemed to satisfy the Secretary's responsibilities 
referred to in the second sentence of subsection (b).''.
    (c) Special Projects.--
            (1) In general.--
                    (A) Release of funds.--In order to assure that the 
                policies of the National Environmental Policy Act of 
                1969 and other provisions of law which further the 
                purposes of such Act (as specified in regulations 
                issued by the Secretary) are most effectively 
                implemented in connection with the expenditure of funds 
                for special projects appropriated under an 
                appropriations Act for the Department of Housing and 
                Urban Development, such as special projects under the 
                head ``Annual Contributions for Assisted Housing'' in 
                title II of the Departments of Veterans Affairs and 
                Housing and Urban Development, and Independent Agencies 
                Appropriations Act, 1993, and to assure to the public 
                undiminished protection of the environment, the 
                Secretary of Housing and Urban Development may, under 
                such regulations, in lieu of the environmental 
                protection procedures otherwise applicable, provide for 
                the release of funds for particular special projects 
                upon the request of recipients of special projects 
                assistance, if the State or unit of general local 
                government, as designated by the Secretary in 
                accordance with regulations, assumes all of the 
                responsibilities for environmental review, 
                decisionmaking, and action pursuant to such Act, and 
                such other provisions of law as the regulations of the 
                Secretary specify, that would otherwise apply to the 
                Secretary were the Secretary to undertake such special 
                projects as Federal projects.
                    (B) Implementation.--The Secretary shall issue 
                regulations to carry out this subsection only after 
                consultation with the Council on Environmental Quality. 
                Such regulations shall--
                            (i) provide for monitoring of the 
                        performance of environmental reviews under this 
                        subsection;
                            (ii) in the discretion of the Secretary, 
                        provide for the provision or facilitation of 
                        training for such performance; and
                            (iii) subject to the discretion of the 
                        Secretary, provide for suspension or 
                        termination by the Secretary of the assumption 
                        under subparagraph (A).
                    (C) Responsibilities of state or unit of general 
                local government.--The Secretary's duty under 
                subparagraph (B) shall not be construed to limit any 
                responsibility assumed by a State or unit of general 
                local government with respect to any particular release 
                of funds under subparagraph (A).
            (2) Procedure.--The Secretary shall approve the release of 
        funds for projects subject to the procedures authorized by this 
        subsection only if, not less than 15 days prior to such 
        approval and prior to any commitment of funds to such projects, 
        the recipient submits to the Secretary a request for such 
        release, accompanied by a certification of the State or unit of 
        general local government which meets the requirements of 
        paragraph (3). The Secretary's approval of any such 
        certification shall be deemed to satisfy the Secretary's 
        responsibilities under the National Environmental Policy Act of 
        1969 and such other provisions of law as the regulations of the 
        Secretary specify insofar as those responsibilities relate to 
        the releases of funds for special projects to be carried out 
        pursuant thereto which are covered by such certification.
            (3) Certification.--A certification under the procedures 
        authorized by this subsection shall--
                    (A) be in a form acceptable to the secretary;
                    (B) be executed by the chief executive officer or 
                other officer of the State or unit of general local 
                government who qualifies under regulations of the 
                Secretary;
                    (C) specify that the State or unit of general local 
                government under this subsection has fully carried out 
                its responsibilities as described under paragraph (1); 
                and
                    (D) specify that the certifying officer--
                            (i) consents to assume the status of a 
                        responsible Federal official under the National 
                        Environmental Policy Act of 1969 and each 
                        provision of law specified in regulations 
                        issued by the Secretary insofar as the 
                        provisions of such Act or other such provision 
                        of law apply pursuant to paragraph (1); and
                            (ii) is authorized and consents on behalf 
                        of the State or unit of general local 
                        government and himself or herself to accept the 
                        jurisdiction of the Federal courts for the 
                        purpose of enforcement of the responsibilities 
                        as such an official.
            (4) Approval by states.--In cases in which a unit of 
        general local government carries out the responsibilities 
        described in paragraph (1), the Secretary may permit the State 
        to perform those actions of the Secretary described in 
        paragraph (2) and the performance of such actions by the State, 
        where permitted by the Secretary, shall be deemed to satisfy 
        the Secretary's responsibilities referred to in the second 
        sentence of paragraph (2).

SEC. 306. CORRECTION OF FHA MULTIFAMILY MORTGAGE LIMITS.

    The National Housing Act (12 U.S.C. 1701 et seq.) is amended in 
sections 207(c)(3), 213(b)(2), 220(d)(3)(B)(iii), and 234(e)(3) by 
striking ``$59,160'' each place it appears and inserting ``$56,160''.

SEC. 307. AMENDMENTS TO FHA MULTIFAMILY RISK-SHARING AND HOUSING 
              FINANCE AGENCY PILOT PROGRAMS.

    (a) Risk-Sharing Pilot Program.--Section 542(b) of the Housing and 
Community Development Act of 1992 (12 U.S.C. 1707 note) is amended--
            (1) by striking paragraphs (1) and (2) and inserting the 
        following new paragraphs:
            ``(1) In general.--The Secretary shall carry out a pilot 
        program in conjunction with qualified participating entities to 
        determine the effectiveness of Federal credit enhancement for 
        loans for affordable multifamily housing through a system of 
        risk-sharing agreements with such entities.
            ``(2) Program requirements.--
                    ``(A) In general.--In carrying out the pilot 
                program under this subsection, the Secretary shall 
                enter into risk-sharing agreements with qualified 
                participating entities.
                    ``(B) Mortgage insurance and reinsurance.--
                Agreements under subparagraph (A) may provide for (i) 
                mortgage insurance through the Federal Housing 
                Administration of loans for affordable multifamily 
                housing originated by or through, or purchased by, 
                qualified participating entities, and (ii) reinsurance, 
                including reinsurance of pools of loans, on affordable 
                multifamily housing. In entering into risk-sharing 
                agreements under this subsection covering mortgages, 
                the Secretary may give preference to mortgages that are 
                not already in the portfolios of qualified 
                participating entities.
                    ``(C) Risk apportionment.--Agreements entered into 
                under this subsection between the Secretary and a 
                qualified participating entity shall specify the 
                percentage of loss that each of the parties to the 
                agreement will assume in the event of default of the 
                insured or reinsured multifamily mortgage. Such 
                agreements shall specify that the qualified 
                participating entity and the Secretary shall share any 
                loss in accordance with the risk-sharing agreement.
                    ``(D) Reimbursement capacity.--Agreements entered 
                into under this subsection between the Secretary and a 
                qualified participating entity shall provide evidence 
                acceptable to the Secretary of the capacity of such 
                entity to fulfill any reimbursement obligations made 
                pursuant to this subsection. Evidence of such capacity 
                which may be considered by the Secretary may include--
                            ``(i) a pledge of the full faith and credit 
                        of a qualified participating entity to fulfill 
                        any obligations entered into by the entity;
                            ``(ii) reserves pledged or otherwise 
                        restricted by the qualified participating 
                        entity in an amount equal to an agreed upon 
                        percentage of the loss assumed by the entity 
                        under subparagraph (C);
                            ``(iii) funds pledged through a State or 
                        local guarantee fund; or
                            ``(iv) any other form of evidence mutually 
                        agreed upon by the Secretary and the qualified 
                        participating entity.
                    ``(E) Underwriting standards.--The Secretary shall 
                allow any qualified participating entity to use its own 
                underwriting standards and loan terms and conditions 
                for purposes of underwriting loans to be insured under 
                this subsection, except as provided in this section, 
                without further review by the Secretary, except that 
                the Secretary may impose additional underwriting 
                criteria and loan terms and conditions for contractual 
                agreements where the Secretary retains more than 50 
                percent of the risk of loss. Any financing permitted on 
                property insured under this subsection other than the 
                first mortgage shall be expressly subordinate to the 
                insured mortgage.
                    ``(F) Authority of secretary.--The Secretary, upon 
                request of a qualified participating entity, may insure 
                or reinsure and make commitments to insure or reinsure 
                under this section any mortgage, advance, loan, or pool 
                of mortgages otherwise eligible under this section, 
                pursuant to a risk-sharing agreement providing that the 
                qualified participating entity will carry out (under a 
                delegation or otherwise, and with or without 
                compensation, but subject to audit, exception, or 
                review requirements) such credit approval, appraisal, 
                inspection, issuance of commitments, approval of 
                insurance of advances, cost certification, servicing, 
                property disposition, or other functions as the 
                Secretary shall approve as consistent with the purpose 
                of this section. All appraisals of property for 
                mortgage insurance under this section shall be 
                completed by a Certified General Appraiser in 
                accordance with the Uniform Standards of Professional 
                Appraisal Practice.
                    ``(G) Disclosure of records.--Qualified 
                participating entities shall make available to the 
                Secretary or the Secretary's designee, at the 
                Secretary's request, such financial and other records 
                as the Secretary deems necessary for purposes of review 
                and monitoring for the program under this section.'';
            (2) in paragraph (4), by striking ``financial institutions 
        and entities to be eligible to enter into reinsurance 
        agreements'' and inserting ``eligibility under this subsection 
        of qualified participating entities'';
            (3) by striking paragraph (8) and inserting the following 
        new paragraph:
            ``(11) Implementation.--The Secretary shall take any 
        administrative actions necessary to initiate the pilot program 
        under this subsection.''; and
            (4) by inserting after paragraph (7) the following new 
        paragraphs:
            ``(8) Prohibition on ginnie mae securitization.--The 
        Government National Mortgage Association shall not securitize 
        any multifamily loans insured or reinsured under this 
        subsection.
            ``(9) Qualification as affordable housing.--Multifamily 
        housing securing loans insured or reinsured under this 
        subsection shall qualify as affordable only if the housing is 
        occupied by families and bears rents not greater than the gross 
        rent for rent-restricted residential units as determined under 
        section 42(g) of the Internal Revenue Code of 1986.
            ``(10) Certification of subsidy layering compliance.--The 
        requirements of section 102(d) of the Department of Housing and 
        Urban Development Reform Act of 1989 may be satisfied in 
        connection with a commitment to insure a mortgage under this 
        subsection by a certification by a housing credit agency 
        (including an entity established by a State that provides 
        mortgage insurance) to the Secretary that the combination of 
        assistance within the jurisdiction of the Secretary and other 
        government assistance provided in connection with a property 
        for which a mortgage is to be insured shall not be any greater 
        than is necessary to provide affordable housing.''.
    (b) Housing Finance Agency Pilot Program.--Section 542(c) of the 
Housing and Community Development Act of 1992 (12 U.S.C. 1707 note) is 
amended--
            (1) in paragraph (1), by inserting after ``qualified 
        housing finance agencies'' the following: ``(including entities 
        established by States that provide mortgage insurance)'';
            (2) in paragraph (2)--
                    (A) in subparagraph (C), by striking the last 
                sentence and inserting the following: ``Such agreements 
                shall specify that the qualified housing finance agency 
                and the Secretary shall share any loss in accordance 
                with the risk-sharing agreement.''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(F) Disclosure of records.--Qualified housing 
                finance agencies shall make available to the Secretary 
                such financial and other records as the Secretary deems 
                necessary for program review and monitoring 
                purposes.'';
            (3) in paragraph (7)--
                    (A) by striking ``very low-income''; and
                    (B) by striking ``(2)''; and
            (4) by adding at the end the following new paragraphs:
            ``(9) Environmental and other reviews.--
                    ``(A) Environmental reviews.--
                            ``(i) In general.--(I) In order to assure 
                        that the policies of the National Environmental 
                        Policy Act of 1969 and other provisions of law 
                        which further the purposes of such Act (as 
                        specified in regulations issued by the 
                        Secretary) are most effectively implemented in 
                        connection with the insurance of mortgages 
                        under subsection (c)(2), and to assure to the 
                        public undiminished protection of the 
                        environment, the Secretary may, under such 
                        regulations, in lieu of the environmental 
                        protection procedures otherwise applicable, 
                        provide for agreements to endorse for insurance 
                        mortgages under subsection (c)(2) upon the 
                        request of qualified housing finance agencies 
                        under this subsection, if the State or unit of 
                        general local government, as designated by the 
                        Secretary in accordance with regulations, 
                        assumes all of the responsibilities for 
                        environmental review, decisionmaking, and 
                        action pursuant to such Act, and such other 
                        provisions of law as the regulations of the 
                        Secretary may specify, that would otherwise 
                        apply to the Secretary with respect to the 
                        insurance of mortgages on particular 
                        properties.
                            ``(II) The Secretary shall issue 
                        regulations to carry out this subparagraph only 
                        after consultation with the Council on 
                        Environmental Quality. Such regulations shall, 
                        among other matters, provide--
                                    ``(aa) for the monitoring of the 
                                performance of environmental reviews 
                                under this subparagraph;
                                    ``(bb) subject to the discretion of 
                                the Secretary, for the provision or 
                                facilitation of training for such 
                                performance; and
                                    ``(cc) subject to the discretion of 
                                the Secretary, for the suspension or 
                                termination by the Secretary of the 
                                qualified housing finance agency's 
                                responsibilities under subclause (I).
                            ``(III) The Secretary's duty under 
                        subclause (II) shall not be construed to limit 
                        any responsibility assumed by a State or unit 
                        of general local government with respect to any 
                        particular property under subclause (I).
                            ``(ii) Procedure.--The Secretary shall 
                        approve a mortgage for the provision of 
                        mortgage insurance subject to the procedures 
                        authorized by this paragraph only if, not less 
                        than 15 days prior to such approval, prior to 
                        any approval, commitment, or endorsement of 
                        mortgage insurance on the property on behalf of 
                        the Secretary, and prior to any commitment by 
                        the qualified housing finance agency to provide 
                        financing under the risk-sharing agreement with 
                        respect to the property, the qualified housing 
                        finance agency submits to the Secretary a 
                        request for such approval, accompanied by a 
                        certification of the State or unit of general 
                        local government that meets the requirements of 
                        clause (iii). The Secretary's approval of any 
                        such certification shall be deemed to satisfy 
                        the Secretary's responsibilities under the 
                        National Environmental Policy Act of 1969 and 
                        such other provisions of law as the regulations 
                        of the Secretary specify insofar as those 
                        responsibilities relate to the provision of 
                        mortgage insurance on the property that is 
                        covered by such certification.
                            ``(iii) Certification.--A certification 
                        under the procedures authorized by this 
                        paragraph shall--
                                    ``(I) be in a form acceptable to 
                                the Secretary;
                                    ``(II) be executed by the chief 
                                executive officer or other officer of 
                                the State or unit of general local 
                                government who qualifies under 
                                regulations of the Secretary;
                                    ``(III) specify that the State or 
                                unit of general local government under 
                                this section has fully carried out its 
                                responsibilities as described under 
                                clause (i); and
                                    ``(IV) specify that the certifying 
                                officer consents to assume the status 
                                of a responsible Federal official under 
                                the National Environmental Policy Act 
                                of 1969 and under each provision of law 
                                specified in regulations issued by the 
                                Secretary insofar as the provisions of 
                                such Act or such other provisions of 
                                law apply pursuant to clause (i), and 
                                is authorized and consents on behalf of 
                                the State or unit of general local 
                                government and himself or herself to 
                                accept the jurisdiction of the Federal 
                                courts for the purpose of enforcement 
                                of the responsibilities as such an 
                                official.
                            ``(iv) Approval by states.--In cases in 
                        which a unit of general local government 
                        carries out the responsibilities described in 
                        clause (i), the Secretary may permit the State 
                        to perform those actions of the Secretary 
                        described in clause (ii) and the performance of 
                        such actions by the State, where permitted by 
                        the Secretary, shall be deemed to satisfy the 
                        Secretary's responsibilities referred to in the 
                        second sentence of clause (ii).
                    ``(B) Lead-based paint poisoning prevention.--In 
                carrying out the requirements of section 302 of the 
                Lead-Based Paint Poisoning Prevention Act, the 
                Secretary may provide by regulation for the assumption 
                of all or part of the Secretary's duties under such Act 
                by qualified housing finance agencies, for purposes of 
                this section.
                    ``(C) Certification of subsidy layering 
                compliance.--The requirements of section 102(d) of the 
                Department of Housing and Urban Development Reform Act 
                of 1989 may be satisfied in connection with a 
                commitment to insure a mortgage under this subsection 
                by a certification by a housing credit agency 
                (including an entity established by a State that 
                provides mortgage insurance) to the Secretary that the 
                combination of assistance within the jurisdiction of 
                the Secretary and other government assistance provided 
                in connection with a property for which a mortgage is 
                to be insured shall not be any greater than is 
                necessary to provide affordable housing.
            ``(10) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Mortgage.--The term `mortgage' means a first 
                mortgage on real estate that is--
                            ``(i) owned in fee simple; or
                            ``(ii) subject to a leasehold interest 
                        that--
                                    ``(I) has a term of not less than 
                                99 years and is renewable; or
                                    ``(II) has a remaining term that 
                                extends beyond the maturity of the 
                                mortgage for a period of not less than 
                                10 years.
                    ``(B) First mortgage.--The term `first mortgage' 
                means a single first lien given to secure advances on, 
                or the unpaid purchase price of, real estate, under the 
                laws of the State in which the real estate is located, 
                together with the credit instrument, if any, secured 
                thereby. Any other financing permitted on property 
                insured under this section must be expressly 
                subordinate to the insured mortgage.
                    ``(C) Unit of general local government; state.--The 
                terms `unit of general local government' and `State' 
                have the same meanings as in section 102(a) of the 
                Housing and Community Development Act of 1974.''.
    (c) Definitions.--Section 544 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 1707 note) is amended--
            (1) by striking paragraph (1) and inserting the following 
        new paragraph:
            ``(1) The term `multifamily housing' means housing 
        accommodations on the mortgaged property that are designed 
        principally for residential use, conform to standards 
        satisfactory to the Secretary, and consist of not less than 5 
        rental units on 1 site. These units may be detached, 
        semidetached, row house, or multifamily structures.''; and
            (2) by adding at the end the following new paragraph:
            ``(5) The term `qualified participating entity' means an 
        entity approved by the Secretary for participation in the pilot 
        program under this subsection, which may include--
                    ``(A) the Federal National Mortgage Association;
                    ``(B) the Federal Home Loan Mortgage Corporation;
                    ``(C) State housing finance and mortgage insurance 
                agencies; and
                    ``(D) the Federal Housing Finance Board.''.

SEC. 308. SUBSIDY LAYERING REVIEW.

    Section 911 of the Housing and Community Development Act of 1992 
(42 U.S.C. 3545 note) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Certification of Subsidy Layering Compliance.--The 
requirements of section 102(d) of the Department of Housing and Urban 
Development Reform Act of 1989 may be satisfied in connection with a 
project receiving assistance under a program that is within the 
jurisdiction of the Department of Housing and Urban Development and 
under section 42 of the Internal Revenue Code of 1986 by a 
certification by a housing credit agency to the Secretary, submitted in 
accordance with guidelines established by the Secretary, that the 
combination of assistance within the jurisdiction of the Secretary and 
other government assistance provided in connection with a property for 
which assistance is to be provided within the jurisdiction of the 
Department of Housing and Urban Development and under section 42 of the 
Internal Revenue Code of 1986 shall not be any greater than is 
necessary to provide affordable housing.''; and
            (2) by striking subsection (c) and inserting the following 
        new subsection:
    ``(c) Revocation by Secretary.--If the Secretary determines that a 
housing credit agency has failed to comply with the guidelines 
established under subsection (a), the Secretary--
            ``(1) may inform the housing credit agency that the agency 
        may no longer submit certification of subsidy layering 
        compliance under this section; and
            ``(2) shall carry out section 102(d) of the Department of 
        Housing and Urban Development Reform Act of 1989 relating to 
        affected projects allocated a low-income housing tax credit 
        pursuant to section 42 of the Internal Revenue Code of 1986.''.
            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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