I 

110TH CONGRESS 

2D SESSION H. R. 5487 

To establish the Affordable Homeownership Preservation Fund of the 

Neighborhood Reinvestment Corporation. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 25, 2008 

Ms. LORETTA SANCHEZ of California (for herself and Ms. CLARKE) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To establish the Affordable Homeownership Preservation 

Fund of the Neighborhood Reinvestment Corporation. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Affordable Home5 ownership Preservation Fund Act of 2008’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

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

8 (1) many communities in the United States are 

9 facing a loss of affordable housing options arising in 

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1 ing tightening of credit to low- and moderate-income 

2 families; 

3 (2) the restoration and maintenance of the 

4 economies of these communities will require support 

5 to preserve affordable workforce housing; 

6 (3) non-governmental business interests are fac7 ing increasing difficulties expanding operations due 

8 to the limited workforce available in regions with low 

9 inventories of affordable housing; and 

10 (4) community development organizations and 

11 affordable housing trust funds have proven their 

12 ability to identify and respond to community needs 

13 for equity investments, loans, and educational serv14 ices. 

15 (b) PURPOSE.—The purpose of this Act is to estab16 lish an Affordable Homeownership Preservation Fund of 

17 the Neighborhood Reinvestment Corporation that will pro18 tect the interests of low- and moderate-income homebuyers 

19 and ensure that non-governmental interests continue to 

20 have affordable housing for their workforces. 

21 SEC. 3. AFFORDABLE HOMEOWNERSHIP PRESERVATION 

22 FUND. 

23 The Neighborhood Reinvestment Corporation Act is 

24 amended— 


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1 (1) in section 606(b)(5) (42 U.S.C. 

2 8105(b)(5)), by striking ‘‘section 608(d))’’ and in3 serting ‘‘section 609(d)’’; 

4 (2) by redesignating sections 607 and 608 (12 

5 U.S.C. 8106, 8107) as sections 608 and 609, respec6 tively; and 

7 (3) by inserting after section 606 (12 U.S.C. 

8 8105) the following new section: 

9 ‘‘SEC. 607. AFFORDABLE HOMEOWNERSHIP PRESERVATION 

10 FUND. 

11 ‘‘(a) ESTABLISHMENT.—There is established a fund 

12 of the corporation to be known as the Affordable Home13 ownership Preservation Fund (in this section referred to 

14 as the ‘Fund’), which shall be administered by the cor15 poration. 

16 ‘‘(b) USE.—To the extent that amounts are made 

17 available pursuant to subsection (l), the corporation, doing 

18 business as NeighborWorks America, shall provide finan19 cial assistance from the Fund through grants to commu20 nity development organizations for use for eligible activi21 ties under subsection (d) to enhance the availability of af22 fordable housing. 

23 ‘‘(c) ELIGIBLE COMMUNITY DEVELOPMENT ORGANI24 ZATIONS.—Grants from the Fund may be made only to 

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1 able housing trust funds that are affiliated with the 

2 NeighborWorks America network established by the cor3 poration. 

4 ‘‘(d) ELIGIBLE ACTIVITIES.— 

5 ‘‘(1) IN GENERAL.—Amounts from a grant 

6 from the Fund for an eligible community develop7 ment organization may be used only for activities to 

8 improve and enhance the availability of affordable 

9 housing that— 

10 ‘‘(A) are carried out in accordance with the 

11 comprehensive strategic plan for the organiza12 tion submitted under subsection (f)(2)(B); 

13 ‘‘(B) are consistent with existing economic, 

14 community, and housing development plans 

15 adopted by or applicable to the area or targeted 

16 population served by the organization; and 

17 ‘‘(C) may include— 

18 ‘‘(i) assisting distressed homeowners 

19 with small low-interest or no-interest loans; 

20 ‘‘(ii) making mortgage loans to first21 time homebuyers; 

22 ‘‘(iii) purchasing, rehabilitating, and 

23 selling foreclosed properties for owner-oc24 cupancy; and 


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1 ‘‘(iv) such other activities as the cor2 poration considers appropriate. 

3 ‘‘(2) CAPACITY BUILDING.—Notwithstanding 

4 paragraph (1), a grantee may use not more than 10 

5 percent of the amounts of any grant from the Fund 

6 and of any matching amounts provided in accord7 ance with subsection (e) for costs of hiring and 

8 training personnel to carry out performance goals 

9 and the mortgage foreclosure mitigation counseling 

10 required by the item relating to ‘Neighborhood Rein11 vestment Corporation’ in title III of the Transpor12 tation, Housing and Urban Development, and Re13 lated Agencies Appropriations Act, 2008 (Division K 

14 of Public Law 110–161). 

15 ‘‘(e) MATCHING REQUIREMENTS.— 

16 ‘‘(1) IN GENERAL.—A grant under this section 

17 for an eligible community development organization 

18 may not be made in an amount that exceeds the 

19 amount that the organization declares to the cor20 poration have been or will be contributed from 

21 sources other than the Federal Government for use 

22 for eligible activities described in the application of 

23 the organization. Such matching funds shall be at 

24 least comparable in form and value to the assistance 

25 provided from the Fund for the organization. 


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1 ‘‘(2) REQUIREMENT OF FIRM COMMITMENT OF

2 MATCHING AMOUNTS.—The corporation may not 

3 provide any grant amounts for an eligible commu4 nity development organization before the organiza5 tion has secured firm commitments for the matching 

6 funds required by paragraph (1). 

7 ‘‘(3) EXCEPTION.—In the case of an applicant 

8 that the corporation determines is subject to severe 

9 constraints on available sources of matching funds, 

10 the corporation may permit the applicant to comply 

11 with the matching requirements of paragraph (1) 

12 by— 

13 ‘‘(A) reducing the amount required to be 

14 matched by such applicant by not more than 50 

15 percent; 

16 ‘‘(B) for not more than 60 percent of the 

17 amount required to be matched by such appli18 cant, allowing such applicant to use amounts 

19 made available pursuant to— 

20 ‘‘(i) section 106 of the Housing and 

21 Community Development Act of 1974 (42 

22 U.S.C. 5306); 

23 ‘‘(ii) section 623(c)(1) of the Commu24 nity Economic Development Act of 1981 

25 (42 U.S.C. 9812(c)); or 


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1 ‘‘(iii) section 310B(c) of the Consoli2 dated Farm and Rural Development Act (7 

3 U.S.C. 1932(c)); or 

4 ‘‘(C) permitting such applicant to provide 

5 matching funds in a form to be determined at 

6 the discretion of the corporation if such appli7 cant— 

8 ‘‘(i) has total assets of less than 

9 $100,000; 

10 ‘‘(ii) serves nonmetropolitan areas; 

11 and 

12 ‘‘(iii) is requesting a grant under this 

13 section of not more than $25,000. 

14 ‘‘(4) LIMITATION.—Not more than 25 percent 

15 of the total amount disbursed in any fiscal year from 

16 the Fund may be matched as provided in paragraph 

17 (3). 

18 ‘‘(f) APPLICATIONS FOR ASSISTANCE.— 

19 ‘‘(1) FORM AND PROCEDURES.—To be eligible 

20 to receive assistance from the Fund, an eligible com21 munity development organization shall submit to the 

22 corporation an application meeting the requirements 

23 under this subsection, in such form and in accord24 ance with such procedures as the corporation shall 

25 establish. 


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1 ‘‘(2) MINIMUM REQUIREMENTS.—The corpora2 tion shall require each application— 

3 ‘‘(A) to establish that the applicant is, or 

4 by the time a grant under this section is made 

5 to the organization will be, an eligible commu6 nity development organization; 

7 ‘‘(B) to include a comprehensive strategic 

8 plan for the organization that contains— 

9 ‘‘(i) a plan of not less than 5 years in 

10 duration that demonstrates that the appli11 cant will use amounts from a grant from 

12 the Fund only for eligible activities under 

13 subsection (d); 

14 ‘‘(ii) an analysis of the needs of the 

15 area or targeted population that the appli16 cant serves and a strategy for how the ap17 plicant will attempt to meet such needs; 

18 ‘‘(iii) a plan that coordinates use of 

19 assistance from the Fund with existing 

20 Federal, State, local, and tribal govern21 ment assistance programs, and private sec22 tor financial services; 

23 ‘‘(iv) an explanation of how the pro24 posed eligible activities to be carried out 

25 using amounts from the grant from the 


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1 Fund comply with the requirement under 

2 subsection (d)(1)(B); and 

3 ‘‘(v) a description of how the appli4 cant will coordinate with community orga5 nizations and financial institutions that 

6 will provide equity investments, loans, sec7 ondary markets, or other services to invest8 ment areas or targeted populations; 

9 ‘‘(C) to include a detailed description of 

10 how the applicant will comply with the match11 ing requirement under subsection (e) and the 

12 likely sources of funds for such compliance; 

13 ‘‘(D) in the case of an applicant that has 

14 previously received assistance from the Fund, to 

15 demonstrate that the applicant— 

16 ‘‘(i) has substantially met its perform17 ance goals established pursuant to sub18 section (h)(2)(B) and otherwise carried out 

19 its responsibilities under the assistance 

20 agreement for such assistance; and 

21 ‘‘(ii) will expand its operations into a 

22 new service area or to serve a new targeted 

23 population, offer more services, or increase 

24 the volume of its business; 


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1 ‘‘(E) in the case of an applicant with a 

2 prior history of serving investment areas or tar3 geted populations, to demonstrate that the ap4 plicant— 

5 ‘‘(i) has a record of success in serving 

6 service areas or targeted populations; and 

7 ‘‘(ii) will expand its operations into a 

8 new service area or to serve a new targeted 

9 population, offer more services, or increase 

10 the volume of its current business; and 

11 ‘‘(F) to include such other information as 

12 the corporation considers appropriate. 

13 ‘‘(3) PREAPPLICATION OUTREACH PROGRAM.— 

14 The corporation may operate an outreach program 

15 to identify and provide information to potential ap16 plicants for assistance under this section. 

17 ‘‘(g) SELECTION CRITERIA.—The corporation shall 

18 establish criteria for selection of applications for grants 

19 under this section, which shall include— 

20 ‘‘(1) the likelihood of success of the applicant in 

21 meeting the goals of its comprehensive strategic plan 

22 submitted under subsection (f)(2)(B); 

23 ‘‘(2) the experience and background of the pro24 posed team that will manage the grant; 


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1 ‘‘(3) the extent of need for affordable housing 

2 for the service area or targeted populations to be 

3 served under the grant; 

4 ‘‘(4) the extent to which the applicant will con5 centrate its activities on serving its service area or 

6 targeted populations; 

7 ‘‘(5) the amount for which firm commitments 

8 have been made for contributions to be used to meet 

9 or exceed the matching amount required under sub10 section (e) and the likely success of the plan for se11 curing any balance of the amounts required under 

12 such subsection; 

13 ‘‘(6) whether the applicant is located in a com14 munity that has experienced a sudden and signifi15 cant loss in homeownership as a result of an in16 crease in mortgage foreclosures; 

17 ‘‘(7) in the case of an applicant having a prior 

18 history with the corporation, the extent of success of 

19 the applicant in serving the service areas or targeted 

20 populations involved; and 

21 ‘‘(8) any other factors (such as the extent to 

22 which the applicant has strong ties to the commu23 nity that it will serve) that the corporation considers 

24 appropriate. 

25 ‘‘(h) GRANT TERMS AND CONDITIONS.— 


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1 ‘‘(1) SOUNDNESS OF ORGANIZATIONS.—The 

2 corporation shall— 

3 ‘‘(A) ensure, to the maximum extent prac4 ticable, that each community development orga5 nization that receives a grant under this section 

6 is financially and managerially sound and main7 tains appropriate internal controls; and 

8 ‘‘(B) require each community development 

9 organization that receives a grant under this 

10 section to submit to the corporation, not less 

11 than once during each 18-month period, a 

12 statement of financial condition audited by an 

13 independent certified public accountant as part 

14 of the report required by subsection (j)(1)(E). 

15 ‘‘(2) ASSISTANCE AGREEMENT.— 

16 ‘‘(A) IN GENERAL.—No grant amounts 

17 may be provided under this section to an eligi18 ble community development corporation before 

19 the corporation enters into an agreement with 

20 the organization that requires the organization 

21 to comply with performance goals established 

22 pursuant to subparagraph (B) and with all 

23 other terms and conditions of assistance re24 ceived under this section. 


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1 ‘‘(B) PERFORMANCE GOALS.—For each 

2 community development organization receiving 

3 assistance under this section, performance goals 

4 relating to the use of such assistance shall be 

5 established by negotiation between the corpora6 tion and the organization. Such goals shall be 

7 based upon the strategic plan of the organiza8 tion submitted pursuant to subsection (f)(2)(b). 

9 Such goals may be modified by consent of both 

10 parties, or as provided in subparagraph (C). 

11 ‘‘(C) SANCTIONS.—The agreement re12 quired under subparagraph (A) for each eligible 

13 community development corporation shall pro14 vide that, in the event of fraud, mismanage15 ment, noncompliance with this section, or non16 compliance with the terms of the agreement, 

17 the corporation may, in the discretion of the 

18 corporation, take one or more of the following 

19 actions: 

20 ‘‘(i) Revoke approval of the applica21 tion of the organization. 

22 ‘‘(ii) Terminate or reduce future as23 sistance under this section for the organi24 zation. 


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1 ‘‘(iii) Require repayment of assistance 

2 provided under this section to the organi3 zation. 

4 ‘‘(iv) Require changes to the perform5 ance goals established pursuant to sub6 paragraph (B) for the organization. 

7 ‘‘(v) Bar the organization from re8 applying for assistance from the Fund. 

9 ‘‘(vi) Require changes to the strategic 

10 plan of the organization submitted pursu11 ant to subsection (f)(2)(B). 

12 ‘‘(vii) Take such other actions as the 

13 corporation considers appropriate. 

14 ‘‘(i) ENCOURAGEMENT OF PRIVATE ENTITIES.—The 

15 corporation may facilitate the organization of corporations 

16 in which the Federal Government has no ownership inter17 est that will complement the activities of the corporation 

18 in carrying out the purpose of this section. The purpose 

19 of any such entity shall be to assist community develop20 ment organizations in a manner that is complementary to 

21 the activities of the corporation under this section. Any 

22 such entity shall be managed exclusively by persons not 

23 employed by the Federal Government or any agency or 

24 instrumentality thereof. 

25 ‘‘(j) RECORDKEEPING, REPORTS, AND AUDITS.— 


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1 ‘‘(1) RECORDKEEPING.— 

2 ‘‘(A) IN GENERAL.—Each community de3 velopment organization receiving assistance 

4 from the Fund shall keep such records, for such 

5 periods as may be prescribed, as may be nec6 essary to disclose the manner in which any as7 sistance under this section is used and to dem8 onstrate compliance with the requirements of 

9 this section. 

10 ‘‘(B) USER PROFILE INFORMATION.—The 

11 corporation shall require each community devel12 opment organization receiving assistance under 

13 this section to compile and maintain data on 

14 the gender, race, ethnicity, national origin, and 

15 other pertinent information concerning individ16 uals that utilize the services of the organization 

17 to ensure that targeted populations and low-in18 come residents of investment areas are ade19 quately served. 

20 ‘‘(C) ACCESS TO RECORDS.—The corpora21 tion shall have access on demand, for the pur22 pose of determining compliance with this sec23 tion, to any records of a community develop24 ment organization that receives assistance from 

25 the Fund. 


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1 ‘‘(D) REVIEW.—Not less than annually, 

2 the corporation shall review the progress of 

3 each community development organization re4 ceiving assistance under this section in carrying 

5 out its strategic plan, meeting its performance 

6 goals, and satisfying the terms and conditions 

7 of its assistance agreement. 

8 ‘‘(E) ANNUAL REPORTS.— 

9 ‘‘(i) REQUIREMENT.—The corporation 

10 shall require each community development 

11 organization receiving assistance under 

12 this section to submit to the corporation, 

13 in such form and manner as the corpora14 tion shall require, an annual report regard15 ing its activities, its financial condition, 

16 and its success in meeting performance 

17 goals, in satisfying the terms and condi18 tions of its assistance agreement, and in 

19 complying with other requirements of this 

20 section. 

21 ‘‘(ii) AVAILABILITY.—After deleting 

22 or redacting any material as appropriate to 

23 protect privacy or proprietary interests, the 

24 corporation shall make such reports avail25 able for public inspection. 


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1 ‘‘(2) ANNUAL REPORT BY CORPORATION.—The 

2 corporation shall conduct an annual evaluation of 

3 the activities of the Fund and the community devel4 opment organizations assisted under this section, 

5 and shall include in the annual report submitted 

6 pursuant to section 608(a) a report of its findings, 

7 together with financial statements audited in accord8 ance with paragraph (4). 

9 ‘‘(3) OPTIONAL STUDIES.—The corporation 

10 may conduct such studies as the corporation con11 siders necessary to further the purpose of this sec12 tion and to facilitate investment in distressed com13 munities. The findings of any studies conducted pur14 suant to this paragraph shall be included in the re15 port required by paragraph (2). 

16 ‘‘(4) EXAMINATION AND AUDIT.—The financial 

17 statements of the Fund for each fiscal year shall be 

18 audited by the Comptroller General of the United 

19 States under the authority provided in section 

20 608(c). 

21 ‘‘(k) DEFINITIONS.—For purposes of this section, the 

22 following definitions shall apply: 

23 ‘‘(1) COMMUNITY DEVELOPMENT ORGANIZA24 TION.—The term ‘community development organiza25 tion’ means a private, nonprofit organization that— 


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1 ‘‘(A) serves a specific area experiencing a 

2 limited supply of affordable housing relative to 

3 the needs of the local workforce, as determined 

4 by the corporation, or a targeted low- or mod5 erate-income population; 

6 ‘‘(B) maintains, through significant rep7 resentation on the organization’s board of direc8 tors or other governing body, accountability to 

9 the specific targeted area or population served 

10 by the organization; and 

11 ‘‘(C) whose primary purpose includes the 

12 provision of low-income housing or community 

13 economic development projects that primarily 

14 benefit low-income individuals or communities. 

15 ‘‘(2) ELIGIBLE COMMUNITY DEVELOPMENT OR16 GANIZATION.—The term ‘eligible community devel17 opment organization’ means a community develop18 ment organization that meets the requirements of 

19 subsection (c). 

20 ‘‘(3) NONPROFIT ORGANIZATION.—The term 

21 ‘nonprofit organization’ means an organization (in22 cluding a State or locally chartered organization) 

23 that— 

24 ‘‘(A) is organized under State or local 

25 laws; 


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1 ‘‘(B) has no part of its net earnings inur2 ing to the benefit of any member, founder, con3 tributor, or individual; and 

4 ‘‘(C) complies with standards of financial 

5 accountability acceptable to the corporation. 

6 ‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—In addi7 tion to any amounts authorized to be appropriated under 

8 section 609(a) or appropriated pursuant to such section, 

9 there are authorized to be appropriated to the Neighbor10 hood Reinvestment Corporation such sums as may be nec11 essary for assistance under this section.’’. 

Æ 


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