I

105TH CONGRESS

2D SESSION H. R. 4838

To authorize the Secretary of Housing and Urban Development to make

grants to States to supplement State assistance for the preservation

of affordable housing for low-income families.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 14, 1998

Mr. VENTO introduced the following bill; which was referred to the Committee

on Banking and Financial Services

A BILL

To authorize the Secretary of Housing and Urban Development to make grants to States to supplement State

assistance for the preservation of affordable housing for

low-income families.

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 ‘‘Housing Preservation

5 Matching Grant Act of 1998’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—The Congress finds that—
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1 (1) more than 55,300 affordable housing dwell2 ing units in the United States have been lost

3 through termination of low income affordability re4 quirements, which usually involves the prepayment

5 of the outstanding principal balance under the mort6 gage on the project in which such units are located;

7 (2) more than 265,000 affordable housing

8 dwelling units in the United States are currently at

9 risk of prepayment;

10 (3) the loss of the privately owned, federally as11 sisted affordable housing, which is occurring during

12 a period when rents for unassisted housing are in13 creasing and few units of additional affordable hous14 ing are being developed, will cause unacceptable

15 harm on current tenants of affordable housing and

16 will precipitate a national crisis in the supply of

17 housing for low-income households;

18 (4) the demand for affordable housing far ex19 ceeds the supply of such housing, as evidenced by

20 studies in 1998 that found that—

21 (A) 5,300,000 households (one-seventh of

22 all renters in the Nation) have worst-case hous23 ing needs; and

24 (B) the number of families with at least

25 one full-time worker and having worst-case
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1 housing needs increased from 1991 to 1995 by

2 265,000 (24 percent) to almost 1,400,000;

3 (5) the shortage of affordable housing in the

4 United States reached a record high in 1995, when

5 the number of low-income households exceeded the

6 number of low-cost rental dwelling units by

7 4,400,000;

8 (6) between 1990 and 1995, the shortage of af9 fordable housing in the United States increased by

10 1,000,000 dwelling units, as the supply of low-cost

11 units decreased by 100,000 and the number of low12 income renter households increased by 900,000;

13 (7) there are nearly 2 low-income renters in the

14 United States for every low-cost rental dwelling unit;

15 (8) 2 of every 3 low-income renters receive no

16 housing assistance and about 2,000,000 low-income

17 households remain on waiting lists for affordable

18 housing;

19 (9) the shortage of affordable housing dwelling

20 units results in low-income households that are not

21 able to acquire low-cost rental units paying large

22 proportions of their incomes for rent; and

23 (10) in 1995, 82 percent of low-income renter

24 households were paying more than 30 percent of

25 their incomes for rent and utilities.
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1 (b) PURPOSE.—It is the purpose of this Act—

2 (1) to promote the preservation of affordable

3 housing units by providing matching grants to

4 States that have developed and funded programs for

5 the preservation of privately owned housing that is

6 affordable to low-income families and persons and

7 was produced for such purpose with Federal assist8 ance;

9 (2) to minimize the involuntary displacement of

10 tenants who are currently residing in such housing,

11 many of whom are elderly or disabled persons; and

12 (3) to continue the partnerships among the

13 Federal Government, State and local governments,

14 and the private sector in operating and assisting

15 housing that is affordable to low-income Americans.

16 SEC. 3. AUTHORITY.

17 The Secretary of Housing and Urban Development

18 shall, to the extent amounts are made available pursuant

19 to section 11, make grants under this Act to States for

20 low-income housing preservation.

21 SEC. 4. USE OF GRANTS.

22 (a) IN GENERAL.—Amounts from grants under this

23 Act may be used only for assistance for acquisition, pres24 ervation incentives, operating costs, and capital expendi-
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1 tures for a housing project that meets the requirements

2 under subsection (b), (c), or (d).

3 (b) PROJECTS WITH HUD-INSURED MORTGAGES.—

4 A project meets the requirements under this subsection

5 only if—

6 (1) the project is financed by a loan or mort7 gage that is—

8 (A) insured or held by the Secretary under

9 section 221(d)(3) of the National Housing Act

10 and receiving loan management assistance

11 under section 8 of the United States Housing

12 Act of 1937 due to a conversion from section

13 101 of the Housing and Urban Development

14 Act of 1965;

15 (B) insured or held by the Secretary and

16 bears interest at a rate determined under the

17 proviso of section 221(d)(5) of the National

18 Housing Act;

19 (C) insured, assisted, or held by the Sec20 retary or a State or State agency under section

21 236 of the National Housing Act; or

22 (D) held by the Secretary and formerly in23 sured under a program referred to in subpara24 graph (A), (B), or (C);
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1 (2) the project is subject to an unconditional

2 waiver of, with respect to the mortgage referred to

3 in paragraph (1)—

4 (A) all rights to any prepayment of the

5 mortgage; and

6 (B) all rights to any voluntary termination

7 of the mortgage insurance contract for the

8 mortgage; and

9 (3) the owner of the project has entered into

10 binding commitments (applicable to any subsequent

11 owner) to extend all low-income affordability restric12 tions for the project, including any such restrictions

13 imposed because of any contract for project-based

14 assistance for the project.

15 (c) PROJECTS WITH SECTION 8 PROJECT-BASED AS16 SISTANCE.—A project meets the requirements under this

17 subsection only if—

18 (1) the project is subject to a contract for

19 project-based assistance; and

20 (2) the owner of the project has entered into

21 binding commitments (applicable to any subsequent

22 owner) to extend such assistance for the maximum

23 period allowable under law (subject to the availabil24 ity of amounts for such purpose) and to extend any
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1 low-income affordability restrictions applicable to the

2 project in connection with such assistance.

3 (d) PROJECTS PURCHASED BY RESIDENTS.—A

4 project meets the requirements under this subsection only

5 if the project—

6 (1) is or was eligible low-income housing (as

7 such term is defined in section 229 of the Low-In8 come Housing Preservation and Resident Home9 ownership Act of 1990 (42 U.S.C. 4119); and

10 (2) has been purchased by a resident council for

11 the housing or is approved by the Secretary for such

12 purchase, for conversion to homeownership housing

13 under a resident homeownership program meeting

14 the requirements under section 226 of such Act (12

15 U.S.C. 4116).

16 (e) COMBINATION OF ASSISTANCE.—Notwithstand17 ing subsection (a), any project that is otherwise eligible

18 for assistance with grant amounts provided under this Act

19 because the project meets the requirements under sub20 section (b) or (c) and that also meets the requirements

21 under paragraph (1) of the other of such subsections, shall

22 be eligible for such assistance only if the project complies

23 with all of the requirements under such other subsection.
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1 SEC. 5. GRANT AMOUNT LIMITATION.

2 The Secretary shall limit the portion of the aggregate

3 amount of grants under this Act made available for any

4 fiscal year that may be provided to a single State based

5 upon the proportion of such State’s need (as determined

6 by the Secretary) for such assistance to the aggregate

7 need among all States approved for such assistance for

8 such fiscal year.

9 SEC. 6. MATCHING REQUIREMENT.

10 (a) IN GENERAL.—The Secretary may not make a

11 grant under this Act to any State for any fiscal year in

12 an amount that exceeds twice the amount that the State

13 certifies, as the Secretary shall require, that the State will

14 contribute for such fiscal year, or has contributed since

15 January 1, 1998, from non-Federal sources for the pur16 poses under section 4(a).

17 (b) TREATMENT OF PREVIOUS CONTRIBUTIONS.—

18 Any portion of amounts contributed after January 1,

19 1998, that are counted for purposes of meeting the re20 quirement under subsection (a) for a fiscal year may not

21 be counted for such purposes for any subsequent fiscal

22 year.

23 (c) TREATMENT OF TAX CREDITS.—Tax credits pro24 vided under section 42 of the Internal Revenue Code of

25 1986 and proceeds from the sale of tax-exempt bonds by
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1 any state or local government entity shall not be consid2 ered non-Federal sources for purposes of this section.

3 SEC. 7. TREATMENT OF SUBSIDY LAYERING REQUIRE4 MENTS.

5 Neither section 6 nor any other provision of this Act

6 may be construed to prevent the use of tax credits pro7 vided under section 42 of the Internal Revenue Code of

8 1986 in connection with housing assisted with grant

9 amounts provided under this Act, to the extent that such

10 use is in accordance with section 102(d) of the Depart11 ment of Housing and Urban Development Reform Act of

12 1989 (42 U.S.C. 3545(d)) and section 911 of the Housing

13 and Community Development Act of 1992 (42 U.S.C.

14 3545 note).

15 SEC. 8. APPLICATIONS.

16 The Secretary shall provide for States (through ap17 propriate State agencies) to submit applications for grants

18 under this Act. The Secretary shall require the applica19 tions to contain any information and certifications nec20 essary for the Secretary to determine whether the State

21 is eligible to receive such a grant.

22 SEC. 9. DEFINITIONS.

23 For purposes of this Act, the following definitions

24 shall apply:
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1 (1) LOW-INCOME AFFORDABILITY RESTRIC2 TIONS.—The term ‘‘low-income affordability restric3 tions’’ means, with respect to a housing project, any

4 limitations imposed by regulation or regulatory

5 agreement on rents for tenants of the project, rent

6 contributions for tenants of the project, or income7 eligibility for occupancy in the project.

8 (2) PROJECT-BASED ASSISTANCE.—The term

9 ‘‘project-based assistance’’ has the meaning given

10 such term in section 16(c) of the United States

11 Housing Act of 1937 (42 U.S.C. 1437n(c)), except

12 that such term includes assistance under any succes13 sor programs to the programs referred to in such

14 section.

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

16 the Secretary of Housing and Urban Development.

17 (4) STATE.—The term ‘‘State’’ means the

18 States of the United States, the District of Colum19 bia, the Commonwealth of Puerto Rico, the Com20 monwealth of the Northern Mariana Islands, Guam,

21 the Virgin Islands, American Samoa, and any other

22 territory or possession of the United States.

23 SEC. 10. REGULATIONS.

24 The Secretary may issue any regulations necessary

25 to carry out this Act.
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1 SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

2 There is authorized to be appropriated for grants

3 under this title $500,000,000 for each of fiscal years

4 1999, 2000, 2001, 2002 and 2003.

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