IB 
Union Calendar No. 383 
110TH CONGRESS 
2D SESSION 
H. R. 5818 
[Report No. 110–616] 
To authorize the Secretary of Housing and Urban Development to make 
loans to States to acquire foreclosed housing and to make grants to 
States for related costs. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 16, 2008 
Ms. WATERS (for herself, Mr. FRANK of Massachusetts, Mrs. MALONEY of 
New York, Mr. WATT, Mr. MAHONEY of Florida, Ms. VELA´ZQUEZ, Mr. 
AL GREEN of Texas, Mr. GUTIERREZ, Mr. LYNCH, Mr. CARSON, Mr. 
ELLISON, and Mr. CLAY) introduced the following bill; which was referred 
to the Committee on Financial Services 
MAY 1, 2008 
Additional sponsors: Ms. CLARKE, Ms. MOORE of Wisconsin, Mr. WILSON of 
Ohio, Ms. TSONGAS, Mr. SHERMAN, Mr. MORAN of Virginia, Mr. HIG-
GINS, Mr. MCGOVERN, Mr. SIRES, Ms. BERKLEY, Mr. CAPUANO, Mr. 
PASTOR, Mr. MEEK of Florida, Mr. COHEN, Ms. LEE, and Ms. MCCOL-
LUM of Minnesota 
MAY 1, 2008 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on April 16, 2008] 
A BILL 
To authorize the Secretary of Housing and Urban Develop-
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6652
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
ment to make loans to States to acquire foreclosed hous-
ing and to make grants to States for related costs. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Neighborhood Stabilization Act of 2008’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. Congressional purposes. 
Sec. 3. Loans and grants to States. 
Sec. 4. Qualified plans. 
Sec. 5. Allocation of amounts. 
Sec. 6. Loans. 
Sec. 7. Grants. 
Sec. 8. Eligible housing stimulus activities. 
Sec. 9. Shared appreciation agreement. 
Sec. 10. Spending requirements. 
Sec. 11. Servicer contact. 
Sec. 12. Accountability. 
Sec. 13. Definitions. 
Sec. 14. Funding. 
Sec. 15. Regulations and implementation. 
SEC. 2. CONGRESSIONAL PURPOSES. 
The purposes of this Act are— 
(1) to establish a loan and grant program ad-
ministered by the Department of Housing and Urban 
Development to help States, metropolitan cities, and 
urban counties purchase and rehabilitate owner-va-
cated, foreclosed homes with the goal of stabilizing 
and occupying them as soon as possible, either 
through resale or rental to qualified families; 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
(2) to distribute these loans and grants to areas 
with the highest levels of foreclosure and delinquent 
subprime mortgages; 
(3) to provide incentives for States, metropolitan 
cities, and urban counties to use the funds to stabilize 
as many properties as possible; and 
(4) to provide housing for low- and moderate-in-
come families, especially those that have lost homes to 
foreclosure. 
SEC. 3. LOANS AND GRANTS TO STATES. 
The Secretary of Housing and Urban Development 
shall, subject to the availability of amounts under section 
14, make grants under section 5(a) to qualified States and 
make loans under section 6 in accordance with the approved 
plans of qualified States, for use to carry out eligible hous-
ing stimulus activities under section 8. 
SEC. 4. QUALIFIED PLANS. 
(a) IN GENERAL.—The Secretary may make a grant 
under this Act only to a State, and may allocate a loan 
authority amount under this Act only for a State, that has 
submitted to the Secretary a plan that meets the require-
ments under this section and has been approved under this 
section. A State shall reallocate amounts under subsection 
(f) or (g) of section 5 only to a qualified metropolitan city 
or qualified urban county, respectively, that has submitted 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
to the Secretary a plan that meets the requirements under 
this section and has been approved under this section. 
(b) CONTENTS.—A plan under this section for an allo-
cation recipient shall— 
(1) designate a housing finance agency of the al-
location recipient, or other agency, department, or en-
tity of the allocation recipient, or any other designee, 
as the allocation recipient administrator to act on be-
half of the allocation recipient for purposes of this 
Act; 
(2) describe the housing stimulus activities under 
section 8 to be carried out with assistance under this 
Act for the allocation recipient by the entity identi-
fied pursuant to paragraph (1) of this subsection; 
(3) prioritize the allocation of funds to low- and 
moderate-income neighborhoods with high concentra-
tions of foreclosures and describe how such activities 
will help restore or improve the viability of such 
neighborhoods by providing for purchase or occu-
pancy of qualified foreclosed properties as soon as 
practicable and in a manner that will facilitate re-
payment of the loans provided under this Act for car-
rying out such activities; 
(4) set forth the procedures that the allocation re-
cipient will use to allocate grant and loan amounts 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
and monitor for compliance with the requirements of 
section 8; 
(5) provide that grant and loan amounts pro-
vided under this Act for the allocation recipient will 
be used only for eligible housing stimulus activities 
under section 8 that are eligible under such section 
for assistance with grant or loan amounts, as appli-
cable; 
(6) contain such assurances as the Secretary 
shall require that the housing stimulus activities to be 
carried out with assistance under this Act shall not 
result in a significant net loss in rental housing in 
an area in which such activities are undertaken; 
(7) give priority emphasis and consideration to 
metropolitan areas, metropolitan cities, urban areas, 
rural areas, low- and moderate-income areas, census 
tracts and other areas having the greatest need, in-
cluding those— 
(A) with the greatest percentage of home 
foreclosures; 
(B) with the highest percentage of homes fi-
nanced by subprime mortgage loans over 90 days 
delinquent; or 
(C) identified by the State, qualified metro-
politan city, or unit of general local government 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
as likely to face a significant rise in the rate of 
home foreclosures. 
(8) provide preference for activities that serve the 
lowest income families, who otherwise meet the income 
requirements under section 8, for the longest period 
and homeowners, who otherwise meet such income re-
quirements, whose mortgages have been foreclosed; 
(9) provide preference for use of grant and loan 
amounts in connection with acquisition of qualified 
foreclosed properties that are acquired no earlier than 
60 days after the owner of the property described in 
section 13(7)(B) acquired such ownership; 
(10) describe any other preferences the allocation 
recipient may establish, such as housing for first re-
sponders, for veterans, for nurses serving underserved 
areas or homeless persons, or for homeless persons in 
accordance with the 10-year plan of the State to end 
homelessness, or providing housing for public school 
teachers or workforce who are employed by the city or 
locality in which the housing is located; 
(11) provide for obligation and outlay of grant 
amounts, and for loan commitments and disburse-
ment, in accordance with the requirements under sec-
tion 10; and 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
(12) in the case of any grant or loan amounts 
that will be invested with the possibility of a return 
on investment, provide for use of any return on such 
investment only for one or more eligible housing stim-
ulus activities under section 8. 
(c) SUBMISSION.— 
(1) IN GENERAL.—The Secretary shall provide 
for allocation recipients to submit plans under this 
section to the Secretary and shall establish require-
ments for the contents and form of such plans. Except 
in the case of plan resubmitted pursuant to subsection 
(d)(3), the Secretary may not accept or consider a 
plan unless the plan is submitted to the Secretary be-
fore the expiration of the 30-day period beginning 
upon the date of the enactment of this Act. 
(2) PUBLIC APPROVAL.—An allocation recipient 
may not submit a plan to the Secretary unless the 
plan is approved by the chief executive officer of the 
allocation recipient after a public hearing on the plan 
held pursuant to reasonable public notice. 
(d) REVIEW AND APPROVAL.— 
(1) TIMING.—The Secretary shall review, and 
approve or disapprove, each plan submitted or resub-
mitted pursuant to paragraph (3) in compliance with 
the requirements established under this section before 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
the expiration of the 30-day period beginning upon 
the submission of the plan. If the Secretary does not 
approve or disapprove a plan that is submitted or re-
submitted in accordance with the requirements under 
this section before the expiration of such 30-day pe-
riod and notify the allocation recipient of such ap-
proval or disapproval, the plan shall be considered 
approved for purposes of this section. 
(2) STANDARD
FOR
DISAPPROVAL.—The Sec-
retary may disapprove a plan only if the plan fails 
to comply with the requirements of this Act. 
(3) 
RESUBMISSION.—If 
the 
Secretary 
dis-
approves the plan of an allocation recipient, the Sec-
retary shall submit to the allocation recipient the rea-
sons for the disapproval, and the allocation recipient 
may, during the 15-day period that begins upon noti-
fication of such disapproval and the reasons for such 
disapproval, submit to the Secretary a revised plan 
for review and approval in accordance with this sub-
section. 
SEC. 5. ALLOCATION OF AMOUNTS. 
(a) GRANTS.—From the total amount made available 
under section 14(a) for grants under this Act, the Secretary 
shall make a grant to each qualified State in the grant 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
amount determined under subsection (c) of this section for 
the qualified State. 
(b) LOANS.—From the aggregate amount of authority 
for the outstanding principal balance of loans made under 
this Act pursuant to section 14(b)(1), the Secretary shall 
allocate such authority for loans under this Act for each 
qualified State in the loan authority amount determined 
under subsection (c) of this section for the qualified State. 
(c) 
GRANT
AMOUNTS
AND
LOAN
AUTHORITY 
AMOUNTS.— 
(1) IN GENERAL.—The grant amount or loan au-
thority amount for a qualified State shall be the fore-
closure grant share or foreclosure loan share, respec-
tively, for the State determined under subsection (d), 
as such share is adjusted in accordance with an index 
established or selected by the Secretary to account for 
differences between qualified States in the median 
price of single family housing in such States. 
(2) LIMITATION ON ADJUSTMENT.—If such ad-
justment would result in a grant amount or loan au-
thority amount for any State that exceeds 125 percent 
of the foreclosure grant share or foreclosure loan 
share, respectively, for the State, the grant amount or 
loan authority amount for the State shall be 125 per-
cent of foreclosure grant share or foreclosure loan 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
share, respectively, for the State and the Secretary 
shall increase the grant amounts or loan authority 
amounts for all other States on a pro rata basis, ex-
cept as provided in paragraph (3), by the amount 
necessary to account for the aggregate of any such de-
creases in grant amounts or loan authority amounts 
for States to comply with the 125 percent limitation. 
(3) LIMITATION ON REALLOCATION.—No increase 
in the grant amount or loan authority amount for 
any State from amounts reallocated pursuant to 
paragraph (2) shall result in the grant amount or 
loan authority amount for any State exceeding 125 
percent of the foreclosure grant share or foreclosure 
loan share for the State, respectively. 
(4) 
PRIORITY
PREFERENCE
FOR
UNUSED 
AMOUNTS.—States which have their grant or loan 
amounts reduced under paragraph (2) shall be grant-
ed a priority preference for any loans or grants which 
may be reallocated under subsection (i) (relating to 
reallocation of funds). 
(d) FORECLOSURE SHARES.—For purposes of this sec-
tion: 
(1) GRANT SHARE.—The foreclosure grant share 
for a qualified State shall be the amount that bears 
the same ratio to the total amount made available 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
under section 14(a) as the number of foreclosures on 
mortgages for single family housing and subprime 
mortgage loans for single family housing that are over 
90 days delinquent, occurring in such State during 
the most recently completed four calendar quarters for 
which such information is available, as determined by 
the Secretary, bears to the aggregate number of such 
foreclosures and such delinquent subprime mortgage 
loans occurring in all qualified States during such 
calendar quarters. 
(2) LOAN SHARE.—The foreclosure loan share for 
a qualified State shall be the amount that bears the 
same ratio to the aggregate amount of the principal 
balance of loans that may be outstanding at any time 
under this Act pursuant to section 14(b)(1) as the 
number of foreclosures on mortgages for single family 
housing and subprime mortgage loans for single fam-
ily housing that are over 90 days delinquent, occur-
ring in such State during the most recently completed 
four calendar quarters for which such information is 
available, as determined by the Secretary, bears to the 
aggregate number of such foreclosures and such delin-
quent subprime mortgage loans occurring in all 
qualified States during such calendar quarters. 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
(e) DISTRIBUTION OF FULL AMOUNT.—The Secretary 
shall establish the index referred to in subsection (c) and 
the grant and loan authority amounts for the qualified 
States in a manner that provides that— 
(1) the aggregate of the grant amounts for all 
qualified States is equal to the total amount made 
available under section 14(a); and 
(2) the aggregate of the loan authority amounts 
for all qualified States is equal to the aggregate 
amount of authority for the outstanding principal 
balance of all loans made under this Act pursuant to 
section 14(b)(1). 
(f) REQUIREMENT TO ALLOCATE TO QUALIFIED MET-
ROPOLITAN CITIES.—Of any grant amounts and loan au-
thority amounts allocated pursuant to this section for a 
State, such State shall allocate for each qualified metropoli-
tan city located in such State a portion of such grant 
amounts and such loan authority amounts that bears the 
same ratio to such grant amounts and loan authority 
amounts, respectively, allocated for the State as the number 
of foreclosures on mortgages for single family housing and 
subprime mortgage loans for single family housing that are 
over 90 days delinquent, occurring in such qualified metro-
politan city during the most recently completed four cal-
endar quarters for which such information is available, as 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
(h) ALLOCATION EXCEPTION.—If the aggregate grant 
and loan authority amount to be allocated pursuant to sub-
section (f) or (g) to a qualified metropolitan city or quali-
fied urban county is less than $10,000,000, a State may, 
but is not required to, allocate such grant and loan author-
ity amount to such qualified metropolitan city or qualified 
urban county, and the allocation for such State shall be in-
creased by the grant and loan authority amount not allo-
cated to such qualified metropolitan city or qualified urban 
county. 
(i) REALLOCATION OF UNUSED AMOUNTS.—The Sec-
retary shall recapture any grant amounts and loan author-
ity amounts allocated to a State that are not used in a 
timely fashion in accordance with section 10, as the Sec-
retary shall prescribe, and shall reallocate such amounts 
among all other qualified States in accordance with the pro-
visions of this Act for allocation of grant amounts and loan 
authority amounts. 
SEC. 6. LOANS. 
(a) REQUIREMENT OF LOAN AUTHORITY AMOUNT.— 
The Secretary may make a loan under this Act for use in 
the area of an allocation recipient only to the extent and 
in such amounts that loan authority amounts for such allo-
cation recipient are available. 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
(2) disburse the loan amount in accordance with 
such terms, subject only to the absence of sufficient 
loan authority amount for such State, such qualified 
metropolitan city, or such qualified urban county; 
(3) monitor such loans; and 
(4) collect and transmit to the Secretary any 
loan repayments. 
(f) ELIGIBILITY
FOR REPEAT LENDING.—A loan 
under this Act may be made to an entity that has pre-
viously borrowed amounts under a loan under this Act only 
if such entity has repaid 90 percent or more of the amounts 
due under all previous such loans. The Secretary may waive 
such requirement upon a request by an allocation recipient 
if the borrower has demonstrated satisfactory progress in 
utilizing outstanding loans and sufficient capacity to uti-
lize additional loan amounts effectively. 
(g) SUNSET.—The Secretary may not enter into any 
commitment to make a loan under this Act, or make any 
such loan, after the expiration of the 48-month period begin-
ning on the date of the enactment of this Act. 
SEC. 7. GRANTS. 
The grant amount of an allocation recipient may be 
used under section 8(b) by the allocation recipient, a unit 
of local government or a local governmental entity, or a 
nonprofit organization. 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
SEC. 8. ELIGIBLE HOUSING STIMULUS ACTIVITIES. 
(a) LOAN AMOUNTS.—Amounts provided under a loan 
under this Act for an allocation recipient shall be used, in 
accordance with the approved plan of such allocation re-
cipient, only for the following activities: 
(1) HOMEOWNERSHIP HOUSING PROVISION.—To 
purchase or finance the purchase of qualified fore-
closed housing for resale as housing for homeowner-
ship to families having incomes that do not exceed 
140 percent of the median income for the area in 
which the housing is located. 
(2) RENTAL HOUSING PROVISION.—To purchase 
or finance the purchase of qualified foreclosed housing 
for use as rental, lease-purchase, or rent-to-own hous-
ing, subject to the following requirements: 
(A) QUALIFIED
TENANTS.—All dwelling 
units in the housing purchased or financed using 
any loan amounts shall be available for rental 
only by families whose incomes do not exceed 
100 percent of the median income for the area in 
which the housing is located. 
(B) RENTS.—Rents for each dwelling unit 
in the housing purchased or financed using any 
loan amounts shall be established at amounts 
that do not exceed market rents for comparable 
dwelling units located in the area in which the 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
housing is located and in accordance with such 
requirements as the Secretary shall establish to 
ensure that rents are established in a fair, objec-
tive, and arms-length manner. 
(3) HOUSING REHABILITATION.—To rehabilitate 
qualified foreclosed housing acquired with assistance 
provided pursuant to this subsection, to the extent 
necessary to comply with applicable laws, codes, and 
other requirements relating to housing safety, quality, 
and habitability, or to make improvements to the 
housing to increase the energy efficiency or conserva-
tion of the housing or provide a renewable energy 
source or sources for the housing, for the purpose of 
reselling the housing, to the extent possible, during the 
3-month period that begins upon completion of reha-
bilitation and at a price that is as close as possible 
to the acquisition price of the housing. 
(b) GRANT
AMOUNTS.—Grant amounts provided 
under this Act to an allocation recipient shall be used, in 
accordance with the approved plan of such allocation re-
cipient, only for the following activities: 
(1) OPERATING AND HOLDING COSTS.—For costs 
of holding and operating qualified foreclosed housing 
acquired pursuant to subsection (a), including costs of 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
management, taxes, handling, insurance, and other 
related costs. 
(2) COSTS
RELATING
TO
PROPERTY
ACQUISI-
TION.—For incidental costs involved in acquiring 
qualified foreclosed housing pursuant to subsection 
(a), including reasonable closing costs, except that 
grant amounts may not be used to pay any portion 
of the purchase price for the housing under section 
13(7)(C). 
(3) ADMINISTRATIVE COSTS.—For costs of the al-
location recipient in administering loan authority 
amounts and grant amounts under this Act, except 
that the amount of grant amounts provided under 
this Act to an allocation recipient that may be used 
under this paragraph shall not exceed the amount 
equal to 8 percent of the sum of the grant amounts 
provided to the allocation recipient pursuant to sub-
section (a), (f), or (g) of section 5, as applicable, and 
the loan authority amount allocated to the allocation 
recipient pursuant to subsection (b), (f), or (g) of sec-
tion 5, as applicable. 
(4) PLANNING COSTS.—For planning costs of the 
State in connection with this Act, except that the 
amount of grant amounts provided under this Act to 
an allocation recipient that may be used under this 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
paragraph shall not exceed the amount equal to 2 per-
cent of the sum of the grant amounts provided to the 
allocation recipient pursuant to subsection (a), (f), or 
(g) of section 5, as applicable, and the loan authority 
amount allocated to the State pursuant to subsection 
(b), (f), or (g) of section 5, as applicable. 
(5) HOUSING
REHABILITATION.—For activities 
set forth in subsection (a)(3), except that an alloca-
tion recipient shall not use more than 20 percent of 
a grant amount allocation for such activities. 
(6) DEMOLITION.—For costs of demolishing 
qualified foreclosed housing that is deteriorated or un-
safe, but amounts may be used under this paragraph 
only if the Secretary determines that the neighborhood 
or other area in which the housing is located has a 
high incidence of vacant and abandoned housing (or 
other vacant and abandoned structures) and is expe-
riencing a significant decline in population. 
Notwithstanding any other provision of this subsection, 
grant amounts provided under this Act may not be used 
to provide assistance of any kind (including grants, loans, 
and closing cost financing) to provide amounts for 
downpayments for any homebuyers of single family hous-
ing. 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
(c) PROHIBITED USES.—The Secretary shall, by regu-
lation, set forth prohibited uses of grant or loan amounts 
under this Act, which shall include use for— 
(1) political activities; 
(2) advocacy; 
(3) lobbying, whether directly or through other 
parties; 
(4) counseling services; 
(5) travel expenses; and 
(6) preparing or providing advice on tax re-
turns. 
(d) INCOME TARGETING REQUIREMENT.— 
(1) VERY LOW-INCOME FAMILIES.—Not less than 
50 percent of the total grant amounts an allocation 
recipient makes available under this Act shall be used 
for activities under subsection (b) in connection with 
providing housing for families whose incomes do not 
exceed 50 percent of the median income for the area 
in which the housing is located. 
(2) EXTREMELY
LOW-INCOME
FAMILIES.—Not 
less than 50 percent of the total grant amounts an al-
location recipient makes available under paragraph 
(1) shall be used for activities under subsection (b) in 
connection with providing housing for families whose 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
into consideration the housing needs in the area 
of such allocation recipient of families whose in-
comes do not exceed 30 percent of area median 
income. 
(e) USE FOR RURAL AREAS.—An allocation recipient 
receiving any grant or loan amounts under this Act that 
includes any rural areas shall use a portion of its grant 
and loan authority amount for eligible activities located in 
rural areas that is proportionate to the identified need for 
such activities in such rural areas. 
(f) SECURITY.—A qualified State, or at its election, 
a qualified metropolitan city or qualified urban county, 
shall record a lien in the name of the Secretary on any 
qualified foreclosed housing purchased or financed with a 
loan under this section in the amount of the principal obli-
gation under the loan and interest due under the loan. 
(g) QUALIFIED HOMEOWNERS.—This Act may not be 
construed to prevent the resale of qualified foreclosed hous-
ing to a prior owner or occupant of such housing who meets 
the income requirements of this Act. 
(h) VOUCHER NONDISCRIMINATION.— 
(1) PROSPECTIVE
TENANTS.—A recipient of 
amounts from a loan or grant under this Act may not 
refuse to lease a dwelling unit in housing assisted 
with any such loan or grant amounts to a holder of 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
a voucher or certificate of eligibility under section 8 
of the United States Housing Act of 1937 (42 U.S.C. 
1437f) because of the status of the prospective tenant 
as such a holder. 
(2) CURRENT
TENANTS.—In the case of any 
qualified foreclosed housing for which funds made 
available under the Act are used and in which a re-
cipient of assistance under section 8(o) of the U.S. 
Housing Act of 1937 resides at the time of acquisition 
or financing, the owner and any successor in interest 
shall be subject to the lease and to the housing assist-
ance payments contract for the occupied unit. 
Vacating the property prior to sale shall not con-
stitute good cause for termination of the tenancy un-
less the property is unmarketable while occupied or 
unless the owner or subsequent purchaser desires the 
unit for personal or family use. This paragraph shall 
not preempt any State or local law that provides 
more protection for tenants. 
(i) EFFECT
OF
FORECLOSURE
ON
PREEXISTING 
LEASE.— 
(1) IN GENERAL.—In the case of any foreclosure 
on any dwelling or residential real property acquired 
with any amounts made available under this Act, 
any successor in interest in such property pursuant 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
to the foreclosure shall assume such interest subject 
to— 
(A) the provision, by the successor in inter-
est, of a notice to vacate to any bona fide tenant 
at least 90 days before the effective date of the 
notice to vacate; and 
(B) the rights of any bona fide tenant, as 
of the date of such notice of foreclosure— 
(i) under any bona fide lease entered 
into before the notice of foreclosure to oc-
cupy the premises until the end of the re-
maining term of the lease or the end of the 
6-month period beginning on the date of the 
notice of foreclosure, whichever occurs first, 
subject to the receipt by the tenant of the 
90-day notice under subparagraph (A); or 
(ii) without a lease or with a lease ter-
minable at will under State law, subject to 
the receipt by the tenant of the 90-day no-
tice under subparagraph (A), except that 
nothing under this subparagraph shall af-
fect the requirements for termination of any 
federally subsidized tenancy. 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
(2) BONA FIDE LEASE OR TENANCY.—For pur-
poses of this subsection, a lease or tenancy shall be 
considered bona fide only if— 
(A) the mortgagor under the contract is not 
the tenant; 
(B) the lease or tenancy was the result of an 
arms-length transaction; or 
(C) the lease or tenancy requires the receipt 
of rent that is not substantially less than fair 
market rent for the property. 
(j) PROHIBITION OF DEMOLITION OF PUBLIC HOUS-
ING.—Notwithstanding any other provision of this Act, 
amounts from a grant or loan under this Act may not be 
used to demolish any public housing (as such term is de-
fined in section 3 of the United States Housing Act of 1937 
(42 U.S.C. 1437a)). 
SEC. 9. SHARED APPRECIATION AGREEMENT. 
Notwithstanding any other provision of this Act, no 
amounts from a loan or grant under this Act may be used 
under section 8 for any qualified foreclosed housing unless 
such binding agreements are entered into, in accordance 
with such requirements as the Secretary shall establish, that 
ensure that the Federal Government shall, upon any sale 
or disposition of the qualified foreclosed housing by the 
owner who acquires the housing pursuant to assistance 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS
under this Act, receive an amount equal to 20 percent of 
the difference between the net proceeds from such sale or 
disposition and the cost of such acquisition of the housing 
pursuant to assistance under this Act, after deductions for 
expenditures paid or incurred after the date of such acquisi-
tion that are properly chargeable to capital account (within 
the meaning of section 1016 of the Internal Revenue Code 
of 1986) with respect to such housing. In the case of a for- 
profit owner, this section shall be applied by substituting 
‘‘50 percent’’ for ‘‘20 percent’’. 
SEC. 10. SPENDING REQUIREMENTS. 
(a) IN GENERAL.—Each allocation recipient that re-
ceives a grant under this Act or is allocated loan authority 
amounts under this Act pursuant to section 5(b) shall— 
(1) commence obligation of such grant amounts 
and commitment of such loan authority amounts not 
later than the expiration of the 120-day period that 
begins upon approval of the approved plan of alloca-
tion recipient; 
(2) obligate all such grant amounts and enter 
into commitments for all such loan authority 
amounts not later than the expiration of the 180-day 
period beginning upon such approval; and 
(3) except as provided in subsection (b) of this 
section, outlay all such grant amounts and disburse 
VerDate Aug 31 2005 
23:00 May 01, 2008
Jkt 069200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6203
E:\BILLS\H5818.RH
H5818
pwalker on PROD1PC71 with BILLS