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 Develop-
ment to make grants to States to supplement State
assistance for the preservation of affordable housing for
low-income families.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Housing Preservation
Matching Grant Act of 1998’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds that—
(1) more than 55,300 affordable housing dwell-
ing units in the United States have been lost
through termination of low income affordability re-
quirements, which usually involves the prepayment
of the outstanding principal balance under the mort-
gage on the project in which such units are located;
(2) more than 265,000 affordable housing
dwelling units in the United States are currently at
risk of prepayment;
(3) the loss of the privately owned, federally as-
sisted affordable housing, which is occurring during
a period when rents for unassisted housing are in-
creasing and few units of additional affordable hous-
ing are being developed, will cause unacceptable
harm on current tenants of affordable housing and
will precipitate a national crisis in the supply of
housing for low-income households;
(4) the demand for affordable housing far ex-
ceeds the supply of such housing, as evidenced by
studies in 1998 that found that—
(A) 5,300,000 households (one-seventh of
all renters in the Nation) have worst-case hous-
ing needs; and
(B) the number of families with at least
one full-time worker and having worst-case
housing needs increased from 1991 to 1995 by
265,000 (24 percent) to almost 1,400,000;
(5) the shortage of affordable housing in the
United States reached a record high in 1995, when
the number of low-income households exceeded the
number of low-cost rental dwelling units by
4,400,000;
(6) between 1990 and 1995, the shortage of af-
fordable housing in the United States increased by
1,000,000 dwelling units, as the supply of low-cost
units decreased by 100,000 and the number of low-
income renter households increased by 900,000;
(7) there are nearly 2 low-income renters in the
United States for every low-cost rental dwelling unit;
(8) 2 of every 3 low-income renters receive no
housing assistance and about 2,000,000 low-income
households remain on waiting lists for affordable
housing;
(9) the shortage of affordable housing dwelling
units results in low-income households that are not
able to acquire low-cost rental units paying large
proportions of their incomes for rent; and
(10) in 1995, 82 percent of low-income renter
households were paying more than 30 percent of
their incomes for rent and utilities.
(b) PURPOSE.—It is the purpose of this Act—
(1) to promote the preservation of affordable
housing units by providing matching grants to
States that have developed and funded programs for
the preservation of privately owned housing that is
affordable to low-income families and persons and
was produced for such purpose with Federal assist-
ance;
(2) to minimize the involuntary displacement of
tenants who are currently residing in such housing,
many of whom are elderly or disabled persons; and
(3) to continue the partnerships among the
Federal Government, State and local governments,
and the private sector in operating and assisting
housing that is affordable to low-income Americans.
SEC. 3. AUTHORITY.
The Secretary of Housing and Urban Development
shall, to the extent amounts are made available pursuant
to section 11, make grants under this Act to States for
low-income housing preservation.
SEC. 4. USE OF GRANTS.
(a) IN GENERAL.—Amounts from grants under this
Act may be used only for assistance for acquisition, pres-
ervation incentives, operating costs, and capital expendi-
tures for a housing project that meets the requirements
under subsection (b), (c), or (d).
(b) PROJECTS WITH HUD-INSURED MORTGAGES.—
A project meets the requirements under this subsection
only if—
(1) the project is financed by a loan or mort-
gage that is—
(A) insured or held by the Secretary under
section 221(d)(3) of the National Housing Act
and receiving loan management assistance
under section 8 of the United States Housing
Act of 1937 due to a conversion from section
101 of the Housing and Urban Development
Act of 1965;
(B) insured or held by the Secretary and
bears interest at a rate determined under the
proviso of section 221(d)(5) of the National
Housing Act;
(C) insured, assisted, or held by the Sec-
retary or a State or State agency under section
236 of the National Housing Act; or
(D) held by the Secretary and formerly in-
sured under a program referred to in subpara-
graph (A), (B), or (C);
(2) the project is subject to an unconditional
waiver of, with respect to the mortgage referred to
in paragraph (1)—
(A) all rights to any prepayment of the
mortgage; and
(B) all rights to any voluntary termination
of the mortgage insurance contract for the
mortgage; and
(3) the owner of the project has entered into
binding commitments (applicable to any subsequent
owner) to extend all low-income affordability restric-
tions for the project, including any such restrictions
imposed because of any contract for project-based
assistance for the project.
(c) PROJECTS WITH SECTION 8 PROJECT-BASED AS-
SISTANCE.—A project meets the requirements under this
subsection only if—
(1) the project is subject to a contract for
project-based assistance; and
(2) the owner of the project has entered into
binding commitments (applicable to any subsequent
owner) to extend such assistance for the maximum
period allowable under law (subject to the availabil-
ity of amounts for such purpose) and to extend any
low-income affordability restrictions applicable to the
project in connection with such assistance.
(d) PROJECTS
PURCHASED
BY
RESIDENTS.—A
project meets the requirements under this subsection only
if the project—
(1) is or was eligible low-income housing (as
such term is defined in section 229 of the Low-In-
come Housing Preservation and Resident Home-
ownership Act of 1990 (42 U.S.C. 4119); and
(2) has been purchased by a resident council for
the housing or is approved by the Secretary for such
purchase, for conversion to homeownership housing
under a resident homeownership program meeting
the requirements under section 226 of such Act (12
U.S.C. 4116).
(e) COMBINATION OF ASSISTANCE.—Notwithstand-
ing subsection (a), any project that is otherwise eligible
for assistance with grant amounts provided under this Act
because the project meets the requirements under sub-
section (b) or (c) and that also meets the requirements
under paragraph (1) of the other of such subsections, shall
be eligible for such assistance only if the project complies
with all of the requirements under such other subsection.
any state or local government entity shall not be consid-
ered non-Federal sources for purposes of this section.
SEC. 7. TREATMENT OF SUBSIDY LAYERING REQUIRE-
MENTS.
Neither section 6 nor any other provision of this Act
may be construed to prevent the use of tax credits pro-
vided under section 42 of the Internal Revenue Code of
1986 in connection with housing assisted with grant
amounts provided under this Act, to the extent that such
use is in accordance with section 102(d) of the Depart-
ment of Housing and Urban Development Reform Act of
1989 (42 U.S.C. 3545(d)) and section 911 of the Housing
and Community Development Act of 1992 (42 U.S.C.
3545 note).
SEC. 8. APPLICATIONS.
The Secretary shall provide for States (through ap-
propriate State agencies) to submit applications for grants
under this Act. The Secretary shall require the applica-
tions to contain any information and certifications nec-
essary for the Secretary to determine whether the State
is eligible to receive such a grant.
SEC. 9. DEFINITIONS.
For purposes of this Act, the following definitions
shall apply:
(1) LOW-INCOME
AFFORDABILITY
RESTRIC-
TIONS.—The term ‘‘low-income affordability restric-
tions’’ means, with respect to a housing project, any
limitations imposed by regulation or regulatory
agreement on rents for tenants of the project, rent
contributions for tenants of the project, or income-
eligibility for occupancy in the project.
(2) PROJECT-BASED
ASSISTANCE.—The term
‘‘project-based assistance’’ has the meaning given
such term in section 16(c) of the United States
Housing Act of 1937 (42 U.S.C. 1437n(c)), except
that such term includes assistance under any succes-
sor programs to the programs referred to in such
section.
(3) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Housing and Urban Development.
(4) STATE.—The term ‘‘State’’ means the
States of the United States, the District of Colum-
bia, the Commonwealth of Puerto Rico, the Com-
monwealth of the Northern Mariana Islands, Guam,
the Virgin Islands, American Samoa, and any other
territory or possession of the United States.
SEC. 10. REGULATIONS.
The Secretary may issue any regulations necessary
to carry out this Act.
SEC. 11. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated for grants
under this title $500,000,000 for each of fiscal years
1999, 2000, 2001, 2002 and 2003.
Æ