I 

110TH CONGRESS 

2D SESSION H. R. 5678 

To provide economic stimulus through emergency community development 

block grant assistance for the redevelopment of abandoned and foreclosed 

homes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 2, 2008 

Ms. WATERS introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on the 

Budget, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To provide economic stimulus through emergency community 

development block grant assistance for the redevelopment 

of abandoned and foreclosed homes. 

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 ‘‘Neighborhood Rescue 

5 and Stabilization Act of 2008’’. 

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1 SEC. 2. EMERGENCY ASSISTANCE FOR THE REDEVELOP2 MENT OF ABANDONED AND FORECLOSED 

3 HOMES. 

4 (a) DIRECT APPROPRIATIONS.—There is authorized 

5 to be appropriated for fiscal year 2008, $10,000,000,000, 

6 to remain available until expended, for assistance to 

7 States, qualified metropolitan cities, and units of general 

8 local government for the redevelopment of abandoned and 

9 foreclosed homes. 

10 (b) ALLOCATION OF APPROPRIATED AMOUNTS.— 

11 (1) ALLOCATION BY HUD FOR STATES.—Any 

12 amounts appropriated or otherwise made available 

13 pursuant to this section shall be allocated by the 

14 Secretary of Housing and Urban Development 

15 among the States, and provided to the States, in 

16 amounts determined according to the funding for17 mula established pursuant to paragraph (2). 

18 (2) FORMULA FOR ALLOCATION AMONG

19 STATES.— 

20 (A) ESTABLISHMENT.—Not later than 60 

21 days after the date of the enactment of this 

22 Act, the Secretary shall establish a funding for23 mula under this paragraph. 

24 (B) CRITERIA.—The funding formula 

25 under this paragraph shall provide that, of the 

26 aggregate amount appropriated or otherwise 

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1 made available pursuant to this section, the 

2 amount allocated for each State shall be the 

3 amount that bears the same ratio to such ag4 gregate amount as the number of foreclosures 

5 on mortgages for homes occurring in such State 

6 during the most recently completed two cal7 endar quarters for which such information is 

8 available, as determined by the Secretary, bears 

9 to the aggregate number of such foreclosures 

10 occurring in all States during such calendar 

11 quarters, as such amount is adjusted to account 

12 for differences in the States in— 

13 (i) the number and percentage of 

14 homes in a State that are financed by a 

15 subprime mortgage related loan; 

16 (ii) the number and percentage of 

17 homes in a State in default or delinquency; 

18 and 

19 (iii) the median home price in a State. 

20 (3) DISTRIBUTION.—Amounts appropriated or 

21 otherwise made available under this section shall be 

22 distributed to the States according to the funding 

23 formula required under paragraph (2) not later than 

24 30 days after the establishment of such formula. 

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1 (4) ALLOCATION BY STATES FOR QUALIFIED

2 METROPOLITAN CITIES.— 

3 (A) REQUIREMENT TO ALLOCATE.—Of any 

4 amounts allocated pursuant to this subsection 

5 for a State, such State shall allocate for each 

6 qualified metropolitan city located in such State 

7 an amount, as determined according to the 

8 funding formula established pursuant to sub9 paragraph (B). 

10 (B) FORMULA FOR ALLOCATION AMONG

11 STATES.— 

12 (i) ESTABLISHMENT.—Not later than 

13 60 days after the date of the enactment of 

14 this Act, the Secretary shall establish a 

15 funding formula under this subparagraph. 

16 (ii) CRITERIA.—The funding formula 

17 under this subparagraph shall provide that, 

18 of the aggregate amount allocated pursu19 ant to this subsection for a State, the 

20 amount allocated for a qualified metropoli21 tan city located in the State shall be the 

22 amount that bears the same ratio to such 

23 aggregate amount as the number of fore24 closures on mortgages for homes occurring 

25 in such qualified metropolitan city during 

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1 the most recently completed two calendar 

2 quarters for which such information is 

3 available, as determined by the Secretary, 

4 bears to the aggregate number of such 

5 foreclosures occurring in such State during 

6 such calendar quarters, as such amount is 

7 adjusted to account for differences between 

8 the qualified metropolitan city in and State 

9 in— 

10 (I) the percentage of homes that 

11 are financed by a subprime mortgage 

12 related loan; 

13 (II) the percentage of homes in 

14 default or delinquency; and 

15 (III) the median home price. 

16 (5) OTHER AMOUNTS.—Any amounts allocated 

17 for a State that are not allocated for a qualified 

18 metropolitan city pursuant to paragraph (4) may be 

19 used for any units of general local government in the 

20 State. 

21 (c) USE OF FUNDS.— 

22 (1) IN GENERAL.—Any State, qualified metro23 politan city, or unit of general local government that 

24 receives amounts pursuant to this section shall, not 

25 later than 18 months after the receipt of such 

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1 amounts, use such amounts to redevelop abandoned 

2 and foreclosed homes. 

3 (2) PRIORITY.—Any State, qualified metropoli4 tan city, or unit of general local government that re5 ceives amounts pursuant to this section shall in dis6 tributing such amounts give priority emphasis and 

7 consideration to those metropolitan areas, metropoli8 tan cities, urban areas, rural areas, low- and mod9 erate-income areas, and other areas with the great10 est need, including those— 

11 (A) with the greatest percentage of home 

12 foreclosures; 

13 (B) with the highest percentage of homes 

14 financed by a subprime mortgage related loan; 

15 or 

16 (C) identified by the State, qualified met17 ropolitan city, or unit of general local govern18 ment as likely to face a significant rise in the 

19 rate of home foreclosures. 

20 (3) ELIGIBLE USES.— 

21 (A) IN GENERAL.—Amounts made avail22 able under this section may be used only as fol23 lows: 

24 (i) FINANCIAL ASSISTANCE THROUGH

25 INSTITUTIONS AND ORGANIZATIONS.—To 

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1 make grants, loans, and other financing 

2 mechanisms to community development fi3 nancial institutions (as such term is de4 fined under section 103(5) of the Commu5 nity Development Banking and Financial 

6 Institutions Act of 1994 (12 U.S.C. 

7 4702(5))), national intermediaries, and 

8 nonprofit housing or community develop9 ment organizations and others to purchase 

10 and rehabilitate homes that have been 

11 abandoned or foreclosed upon, in order to 

12 sell, rent, or redevelop such homes. 

13 (ii) FINANCING MECHANISMS FOR RE14 DEVELOPMENT.—To establish financing 

15 mechanisms for redevelopment of fore16 closed upon homes, including such mecha17 nisms as soft-seconds, loan loss reserves, 

18 and shared-equity loans for low- and mod19 erate-income homebuyers. 

20 (iii) PURCHASE AND REHABILITATION

21 FOR SALE OR RENTAL.—To purchase and 

22 rehabilitate homes that have been aban23 doned or foreclosed upon, in order to sell, 

24 rent, or redevelop such homes. 

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1 (iv) LAND BANKS.—To establish land 

2 banks for homes that have been foreclosed 

3 upon. 

4 (v) DEMOLITION.—To demolish 

5 blighted structures. 

6 (vi) PROJECT-BASED RENTAL ASSIST7 ANCE.—To provide rental assistance for 

8 low- and moderate-income persons (as such 

9 term is defined in section 102 of the Hous10 ing and Community Development Act of 

11 1974 (42 U.S.C. 5302)) that is attached to 

12 single family and multifamily residences. 

13 (vii) PROJECT OPERATING RE14 SERVES.—To provide grants for use to 

15 cover the loss of rental assistance or in 

16 conjunction with a project loan that is at17 tached to single family and multifamily 

18 residences. 

19 (viii) PROJECT OPERATING SUB20 SIDIES.—To fund project operating ac21 counts used to cover net operating income 

22 shortfalls for single and multifamily resi23 dences. Eligible operating costs shall in24 clude costs of management, taxes, han25 dling, insurance, and other related costs. 

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1 (ix) CDBG-ELIGIBLE ACTIVITIES.— 

2 To carry out any activities that, under sec3 tion 105 of the Housing and Community 

4 Development Act of 1974 (42 U.S.C. 

5 5305), are eligible to be carried out with 

6 amounts provided under title I of such Act. 

7 (B) LIMITATION.—Any funds used under 

8 this section for the purchase of an abandoned 

9 or foreclosed upon home shall be at a cost equal 

10 to or less than the appraised value of the home 

11 based on the most up-to-date appraisal, as such 

12 appraisal is defined by the Secretary. 

13 (d) RULE OF CONSTRUCTION.—Amounts appro14 priated or otherwise made available to States, qualified 

15 metropolitan cities, and units of general local government 

16 under this section shall be treated as though such funds 

17 were community development block grant funds under title 

18 I of the Housing and Community Development Act of 

19 1974. 

20 (e) WAIVER AUTHORITY.— 

21 (1) IN GENERAL.—In administering any 

22 amounts appropriated or otherwise made available 

23 under this section, the Secretary may waive, or 

24 specify alternative requirements for, any provision of 

25 any statute or regulation that the Secretary adminmstockstill on PROD1PC66 with BILLS

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1 isters (but not including the requirements of this 

2 section) in connection with the obligation by the Sec3 retary or the use by the recipient of such funds (ex4 cept for requirements related to fair housing, non5 discrimination, labor standards, and the environ6 ment), in order to expedite or facilitate the use of 

7 such funds. 

8 (2) LOW AND MODERATE INCOME REQUIRE9 MENT.—Notwithstanding the authority of the Sec10 retary under paragraph (1)— 

11 (A) all of the funds appropriated or other12 wise made available under this section shall be 

13 used with respect to persons whose incomes do 

14 not exceed 120 percent of area median income; 

15 and 

16 (B) not less than 25 percent of the funds 

17 made available under this section to any State, 

18 qualified metropolitan city, or unit of general 

19 local government shall be used with respect to 

20 persons whose incomes do not exceed 30 per21 cent of the area median income. 

22 (f) DEFINITIONS.—For purposes of this Act, the fol23 lowing definitions shall apply: 

24 (1) QUALIFIED METROPOLITAN CITY.—The 

25 term ‘‘qualified metropolitan city’’ means a metromstockstill on PROD1PC66 with BILLS

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1 politan city, as such term is defined in section 102 

2 of the Housing and Community Development Act of 

3 1974 (42 U.S.C. 5302), that has a population of not 

4 less than 200,000, as determined by the 2000 decen5 nial census. 

6 (2) SECRETARY.—The term ‘‘Secretary’’ means 

7 the Secretary of Housing and Urban Development. 

8 (3) STATE; UNIT OF GENERAL LOCAL GOVERN9 MENT.—The terms ‘‘State’’ and ‘‘unit of general 

10 local government’’ have the meanings given such 

11 terms in section 102 of the Housing and Community 

12 Development Act of 1974 (42 U.S.C. 5302). 

13 (g) EMERGENCY DESIGNATION.—The amounts ap14 propriated under this title are designated as an emergency 

15 requirement and necessary to meet emergency needs pur16 suant to section 204 of S . Con. Res. 21 (110th Congress), 

17 the concurrent resolution on the budget for fiscal year 

18 2008. 

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