I

104TH CONGRESS

2D SESSION H. R. 4141

To ensure that purchasers of single family residential properties owned by

the Department of Housing and Urban Development are notified of

the penalties authorized for intentionally misrepresenting the purchaser’s

intent to occupy the properties after purchase and that purchasers indicating an intent to use such properties as their principal residences

use the properties in such manner.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 24, 1996

Mr. BARRETT of Wisconsin introduced the following bill; which was referred

to the Committee on Banking and Financial Services

A BILL

To ensure that purchasers of single family residential properties owned by the Department of Housing and Urban

Development are notified of the penalties authorized for

intentionally misrepresenting the purchaser’s intent to

occupy the properties after purchase and that purchasers

indicating an intent to use such properties as their principal residences use the properties in such manner.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•HR 4141 IH

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Department of Hous3 ing and Urban Development Owner-Occupancy Enforce4 ment Act’’.

5 SEC. 2. NOTICE OF PENALTY FOR FRAUD AND FALSE

6 STATEMENTS.

7 In disposing of any qualified property pursuant to

8 any sale (including any direct, bulk, or competitive sale,

9 or auction), the Secretary of Housing and Urban Develop10 ment shall—

11 (1) provide to the purchaser, upon notifying the

12 purchaser of acceptance of the offer to purchase,

13 written notice (separate from any sales contract)

14 that—

15 (A) sets forth the provisions of section

16 1010 of title 18, United States Code, and the

17 maximum fine and maximum term of imprison18 ment for violations of such section; and

19 (B) states that an intentionally false state20 ment made by a purchaser regarding the pur21 chaser’s intent to occupy a purchased qualified

22 property may be a violation of section 1010 of

23 title 18, United States Code; and

24 (2) before closing, obtain a written statement,

25 signed by the purchaser, that the purchaser has re26 ceived the notice required under paragraph (1).
3

•HR 4141 IH

1 SEC. 3. REQUIREMENTS RELATING TO OWNER-OCCUPANT

2 PURCHASERS.

3 (a) 1-YEAR RESIDENCY.—Except as provided in sub4 section (b), each owner-occupant purchaser of a qualified

5 property shall use the property as the principal residence

6 of the purchaser for the 1-year period beginning upon pur7 chase.

8 (b) EXCEPTIONS.—The Secretary may waive the re9 quirement under subsection (a) for an owner-occupant

10 purchaser of a qualified property who demonstrates to the

11 Secretary extenuating circumstances that prevent the pur12 chaser from reasonably maintaining principal residency at

13 the qualified property during the period referred to in such

14 subsection.

15 (c) ENFORCEMENT PROCEDURES.—The Secretary

16 shall, by regulation, establish procedures to monitor com17 pliance with the requirement under subsection (a) and to

18 provide for waivers under subsection (b). Such regulations

19 shall be issued not later than the expiration of the 6-

20 month period beginning on the date of the enactment of

21 this Act.

22 SEC. 4. PENALTY.

23 If the Secretary determines on the record after oppor24 tunity for a hearing that an owner-occupant purchaser of

25 a qualified property has violated the requirement under
4

•HR 4141 IH

1 section 3(a), the Secretary shall permanently bar such

2 purchaser—

3 (1) from doing business with the Department of

4 Housing and Urban Development;

5 (2) from participating in any program of the

6 Department of Housing and Urban Development;

7 and

8 (3) from receiving any assistance from the De9 partment of Housing and Urban Development.

10 Any penalty imposed under this section shall be in addi11 tion to any other penalties authorized under law that may

12 be imposed.

13 SEC. 5. DEFINITIONS.

14 For purposes of this Act, the following definitions

15 shall apply:

16 (1) OWNER-OCCUPANT PURCHASER.—The term

17 ‘‘owner-occupant purchaser’’ means a purchaser of a

18 qualified property who, in purchasing the property

19 (including any bidding procedure), indicates to the

20 Secretary an intent to use the property as his or her

21 principal residence.

22 (2) QUALIFIED PROPERTY.—The term ‘‘quali23 fied property’’ means any 1- to 4-family property ac24 quired by the Secretary pursuant to—
5

•HR 4141 IH

1 (A) foreclosure of a mortgage insured

2 under title II the National Housing Act;

3 (B) foreclosure of a rehabilitation loan

4 under section 312 of the Housing Act of 1964

5 (as in effect before October 1, 1991);

6 (C) foreclosure of a purchase money or as7 signed mortgage that is held by the Secretary;

8 (D) assignment by the Secretary of De9 fense, pursuant to acquisition of the property

10 under section 1013 of the Demonstration Cities

11 and Metropolitan Development Act of 1966; or

12 (E) foreclosure of a home improvement

13 loan insured under title I of the National Hous14 ing Act.

15 (3) SECRETARY.—The term ‘‘Secretary’’ means

16 the Secretary of Housing and Urban Development,

17 except when specifically provided otherwise.

Æ