I 

117TH CONGRESS 

1ST SESSION H. R. 2851 

To require the Secretary of Housing and Urban Development to carry out 

a demonstration program to evaluate the effectiveness of the Department 

assisting nonprofit organizations to develop, acquire, rehabilitate, convert, 

or preserve affordable housing that is governed by the residents of 

such housing, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 26, 2021 

Ms. OMAR (for herself and Mrs. CAROLYN B. MALONEY of New York) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To require the Secretary of Housing and Urban Development 

to carry out a demonstration program to evaluate the 

effectiveness of the Department assisting nonprofit organizations to develop, acquire, rehabilitate, convert, or preserve affordable housing that is governed by the residents 

of such housing, and for other purposes. 

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 Housing 

5 Preservation Act of 2021’’. 


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1 SEC. 2. RESIDENT-CONTROLLED HOUSING DEMONSTRA2 TION PROGRAM. 

3 (a) PURPOSE.—The purposes of this section are— 

4 (1) to establish a demonstration program to 

5 evaluate the effectiveness of assisting nonprofit orga6 nizations, that may have nonprofit, for-profit, gov7 ernment, or intergovernmental partners, to acquire, 

8 rehabilitate, construct, convert, or preserve limited9 or zero-equity resident-controlled corporations, in10 cluding manufactured home communities, as afford11 able housing that is governed by a majority of the 

12 residents of such housing; 

13 (2) to provide alternative homeownership oppor14 tunities to those in the private market, which in15 crease access to homeownership for households at 

16 lower income levels; 

17 (3) to prevent displacement of existing residents 

18 through converting to limited- or zero-equity resi19 dent-controlled corporations or through preserving 

20 existing limited- or zero-equity resident-controlled 

21 corporations; 

22 (4) to create or preserve mixed-income housing 

23 corporations to advance economic and racial diver24 sity and inclusion; and 

25 (5) to evaluate the efficacy and promote the ex26 pansion of limited- or zero-equity resident-controlled 


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1 corporations throughout the Nation that are 

2 stewarded and monitored by nonprofit organizations 

3 to ensure compliance, sustainability of corporations, 

4 resident governance, and that the affordability of the 

5 resident-controlled housing lasts over time to serve 

6 current and future income-eligible households. 

7 (b) ELIGIBLE ENTITIES.— 

8 (1) IN GENERAL.—Eligibility to participate in 

9 the program under this section and for financial as10 sistance under such program shall be limited to only 

11 nonprofit organizations that— 

12 (A) have such experience as the Secretary 

13 shall require in developing, preserving, man14 aging, financing, or monitoring limited- or zero15 equity resident-controlled corporations; and 

16 (B) have submitted to the Secretary such 

17 information and assurances as the Secretary 

18 shall require to ensure that the organization 

19 will comply with the purposes and requirements 

20 of this section and will use assistance to ad21 dress the local needs of communities. 

22 (2) PARTNERSHIPS.—Eligible entities may 

23 partner with, and seek consultation from, for-profit, 

24 nonprofit, public, or quasi-governmental entities on 

25 projects under the program. 


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1 (c) FINANCIAL ASSISTANCE.— 

2 (1) MORTGAGE INSURANCE.—Under the pro3 gram under this section, the Secretary of Housing 

4 and Urban Development may insure, pursuant to 

5 section 213, 223(f), or 232 of the National Housing 

6 Act (12 U.S.C. 1715e, 1715n(f), 1715w), a mort7 gage for the development, acquisition, rehabilitation, 

8 or preservation of eligible housing held by an eligible 

9 entity, except that the Secretary may for purposes of 

10 the demonstration program under this section waive, 

11 or specify alternative requirements for, any provision 

12 of any statute or regulation that the Secretary ad13 ministers in connection with the mortgage insurance 

14 programs under such sections if the Secretary deter15 mines that such waiver or alternative requirement 

16 advances the demonstration program. 

17 (2) GRANTS.—Under the program under this 

18 section, the Secretary may provide a grant to an eli19 gible entity participating in the program for use for 

20 the following purposes: 

21 (A) PRE-DEVELOPMENT AND OTHER

22 COSTS.—For up-front and pre-development 

23 costs, including fees and expenses to obtain fi24 nancing, or for other costs during development, 


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1 such as capital required before shares to resi2 dents are sold. 

3 (B) STEWARD MONITORING FEE RE4 SERVE.—For pre-funding a monitoring fee re5 serve under the program that is paid by the 

6 limited- or zero-equity resident-controlled cor7 porations to the nonprofit organization to fund 

8 costs of compliance monitoring, which shall be 

9 held in reserve in an amount sufficient to cover 

10 at least three years of such monitoring costs. 

11 (C) TECHNICAL ASSISTANCE.—For non12 profit organizations to provide technical assist13 ance and training to— 

14 (i) nonprofit organizations developing 

15 the capacity to develop, convert, or pre16 serve limited- or zero-equity resident-con17 trolled corporations; and 

18 (ii) limited- or zero-equity resident19 controlled corporations that are forming or 

20 already established. 

21 (D) GAP FUNDING.—For covering gap 

22 funding to ensure limited- or zero-equity resi23 dent-controlled corporations are affordable to 

24 below the targeted income level. 


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1 (E) INTERMEDIARY FINANCING.—For 

2 community development financial institutions 

3 that are certified by the Secretary of the Treas4 ury, have demonstrated expertise in financing 

5 limited- or zero-equity resident-controlled cor6 porations, and are qualified to finance, provide 

7 training and technical assistance, and ensure 

8 compliance with the program under this section, 

9 for providing below market-rate loans and re10 coverable grants to projects under the program. 

11 (d) APPLICABILITY OF CDBG PROGRAM REQUIRE12 MENTS.— 

13 (1) IN GENERAL.—Except as provided in para14 graph (2), any housing developed, acquired, con15 verted, or preserve with assistance under subsection 

16 (c) shall comply with the requirements applicable 

17 under the community development block grant pro18 gram under title I of the Housing and Community 

19 Development Act of 1974 (42 U.S.C. 5301 et seq.) 

20 to housing that is assisted under such title. 

21 (2) WAIVERS.—In administering the program 

22 under this section, the Secretary may waive, or 

23 specify alternative requirements for, any provision of 

24 the community development block grant program 

25 (except for requirements related to fair housing, 


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1 nondiscrimination, labor standards, and the environ2 ment), if the Secretary finds that good cause exists 

3 for the waiver or alternative requirement and such 

4 waiver or alternative requirement would not be in5 consistent with the overall purpose of this section. 

6 (e) GOVERNANCE.—Except in cases of noncompliance 

7 with any requirements under the demonstration program 

8 under this section, any housing developed, acquired, con9 structed, or preserved with assistance under subsection (c) 

10 shall be governed by a board of directors elected by the 

11 members of the limited- or zero-equity resident-controlled 

12 corporation with voting structured equitably among all 

13 members and as the eligible entity shall establish. 

14 (f) ROLE OF ELIGIBLE ENTITY.—During a period 

15 not shorter than 30 years that begins upon initial occu16 pancy of any housing developed, acquired, constructed, 

17 converted, or preserved under the program under this sec18 tion, the eligible entity that developed, acquired, con19 structed, or preserved such housing, or its consulting part20 ner, shall take such actions as the Secretary shall re21 quire— 

22 (1) to ensure compliance with this section and 

23 the regulations issued under this section; 


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1 (2) to assist with elections of board of directors 

2 of the limited- or zero-equity resident-controlled cor3 poration; 

4 (3) to assist in preparing annual budgets for 

5 the housing and other financial planning; 

6 (4) to establish a regulatory process for unit or 

7 share sales and resales to ensure compliance; and 

8 (5) to perform such other functions as the Sec9 retary shall provide. 

10 (g) SALE.—A limited- or zero-equity resident-con11 trolled corporation may sell corporate shares in housing 

12 assisted under the program under this section to an eligi13 ble household only for a purchase price that ensures dwell14 ing units in the housing will remain affordable for at least 

15 30 years to households having incomes that are less than 

16 the maximum income eligibility. 

17 (h) APPLICATIONS; PRIORITY.— 

18 (1) APPLICATIONS.—To apply to participate in 

19 the program under this section, an eligible entity 

20 shall submit to the Secretary an application at such 

21 time, in such manner, and containing such informa22 tion as the Secretary may require. 

23 (2) PRIORITY.—In selecting eligible entities to 

24 participate in the program under this section and re25 ceive financial assistance under such program, the 


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1 Secretary give priority based on the extent to which 

2 an eligible entity— 

3 (A) will promote mixed-income develop4 ment to prevent the displacement of existing 

5 residents or enable renters to become share6 holders or members of the limited-equity or 

7 zero-equity resident-controlled housing corpora8 tion; 

9 (B) will maximize the number of shares or 

10 membership in the limited-equity or zero-equity 

11 resident-controlled housing corporation that are 

12 affordable to households whose initial incomes 

13 do not exceed 80 percent of the median income 

14 of the area in which the housing is located; 

15 (C) demonstrates that the entity and any 

16 partners, if applicable, have the capacity to de17 velop, preserve, manage, finance, and monitor 

18 limited- or zero-equity resident-controlled hous19 ing corporations; and 

20 (D) demonstrates the feasibility of the 

21 projects to be assisted under the program given 

22 local market conditions. 

23 (i) RESTRICTIONS ON SCREENING.— 

24 (1) PROHIBITION.—A household applying to 

25 purchase a share or membership in a limited- or 


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1 zero-equity resident-controlled housing corporation, 

2 which conveys a right to occupy a specific dwelling 

3 unit assisted under the program under this section, 

4 may not be denied such purchase or admission based 

5 on veteran status of any member of the household 

6 or any status as any other protected class under the 

7 Fair Housing Act. 

8 (2) CONSIDERATION OF CRIMINAL AND EVIC9 TION HISTORY.—A resident-controlled housing cor10 poration shall not unreasonably exclude applicants 

11 having a criminal history or eviction history from oc12 cupancy in dwelling units assisted under the pro13 gram under this section. 

14 (j) REPORTING.—The Secretary shall submit a report 

15 annually to the Congress regarding the activities con16 ducted and the populations being served under the dem17 onstration program under this section, disaggregated by 

18 race/ethnicity and income, and shall make each such re19 port publicly available on a website of the Department. 

20 (k) EVALUATIONS.— 

21 (1) IN GENERAL.—The Secretary shall conduct 

22 evaluations of the demonstration program under this 

23 section and report to the Congress regarding such 

24 evaluations, as follows: 


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1 (A) INTERIM.—Not later than the expira2 tion of the 4-year period beginning on the date 

3 of the enactment of this Act, the Secretary shall 

4 complete an interim evaluation of the program 

5 and submit a report regarding such evaluation 

6 to the Congress. 

7 (B) FINAL.—Not later than the expiration 

8 of the 8-year period beginning on the date of 

9 the enactment of this Act, the Secretary shall 

10 complete a final evaluation of the program and 

11 submit a report regarding such evaluation to 

12 the Congress. 

13 (2) REQUIREMENTS.—Each evaluation con14 ducted pursuant to this subsection shall be con15 ducted in a robust manner and involve rigorous re16 search, shall identify the populations served by the 

17 demonstration, and shall assess the effects of the 

18 demonstration on such populations, including how 

19 affordable housing was maintained in moderate- to 

20 low-income areas. The final evaluation under para21 graph (1)(B) shall include an independent analysis 

22 and recommendations by the Department of Hous23 ing and Urban Development regarding whether the 

24 program could and should be expanded and estab25 lished as a permanent program and, if so, shall idenVerDate Sep 11 2014 05:50 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2851.IH H2851

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1 tify any actions, including statutory and administra2 tive actions, necessary to do so. 

3 (3) PUBLIC AVAILABILITY.—The Secretary 

4 shall make each report required under paragraph (1) 

5 publicly available on a website of the Department. 

6 (l) IMPLEMENTATION.—The Secretary shall, by no7 tice, implement the demonstration program under this sec8 tion, including its terms, procedures, requirements, and 

9 conditions, subject only to the availability of appropria10 tions pursuant to subsection (n). 

11 (m) DEFINITIONS.—For purposes of this section, the 

12 following definitions shall apply: 

13 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti14 ty’’ means an entity eligible under subsection (b) for 

15 participation in the demonstration program under 

16 this section. 

17 (2) ELIGIBLE HOUSING.—The term ‘‘eligible 

18 housing’’ means housing that complies with the re19 quirements under subsection (d). 

20 (3) LIMITED- OR ZERO-EQUITY RESIDENT-CON21 TROLLED CORPORATION.—The term ‘‘limited- or 

22 zero-equity resident-controlled corporation’’ means a 

23 cooperative-like corporation, association, or con24 sumer cooperative that, in a manner acceptable to 

25 the Secretary, restricts the initial and resale price of 


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1 the shares of stock or membership interests in the 

2 resident entity, which may include a manufactured 

3 home community, so that the shares or interests re4 main fixed or resale-restricted to remain affordable 

5 to families of designated incomes. The corporation 

6 may or may not own the land or improvements. 

7 (4) MANUFACTURED HOME COMMUNITY.—The 

8 term ‘manufactured home community’ means a com9 munity comprised primarily of manufactured homes 

10 (as such term is defined in section 603 of the Na11 tional Manufactured Housing Construction and 

12 Safety Standards Act of 1974 (42 U.S.C. 5402)) 

13 that are used primarily for residential purposes. 

14 (5) SECRETARY.—The term ‘‘Secretary’’ means 

15 the Secretary of Housing and Urban Development. 

16 (n) AUTHORIZATION OF APPROPRIATIONS FOR

17 GRANTS.—There is authorized to be appropriated 

18 $200,000,000 for fiscal year 2022 for grants under sub19 section (c)(2), which shall remain available through the 

20 end of fiscal year 2025. 

21 (o) REGULATIONS.—The Secretary may issue any 

22 regulations necessary to carry out the program under this 

23 section. 

Æ 


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