and is designed to encourage and reward teachers
that serve in our most needy communities.
(c) DISCOUNT AND DOWNPAYMENT ASSISTANCE FOR
TEACHERS.—Section 204(h) of the National Housing Act
(12 U.S.C. 1710(h)) is amended—
(1) by redesignating paragraphs (7) through (10)
as paragraphs (8) through (11), respectively; and
(2) by inserting after paragraph (6) the fol-
lowing new paragraph:
‘‘(7) 50 PERCENT DISCOUNT FOR TEACHERS PUR-
CHASING PROPERTIES THAT ARE ELIGIBLE ASSETS.—
‘‘(A) DISCOUNT.—A property that is an eli-
gible asset and is sold, during fiscal years 2000
through 2004, to a teacher for use in accordance
with subparagraph (B) shall be sold at a price
that is equal to 50 percent of the appraised value
of the eligible property (as determined in accord-
ance with paragraph (6)(B)). In the case of a
property eligible for both a discount under this
paragraph and a discount under paragraph (6),
the discount under paragraph (6) shall not
apply.
‘‘(B) PRIMARY
RESIDENCE.—An eligible
property sold pursuant to a discount under this
paragraph shall be used, for not less than the 3-
year period beginning upon such sale, as the pri-
mary residence of a teacher.
‘‘(C) SALE METHODS.—The Secretary may
sell an eligible property pursuant to a discount
under this paragraph—
‘‘(i) to a unit of general local govern-
ment or nonprofit organization (pursuant
to paragraph (4) or otherwise), for resale or
transfer to a teacher; or
‘‘(ii) directly to a purchaser who is a
teacher.
‘‘(D) RESALE.—In the case of any purchase
by a unit of general local government or non-
profit organization of an eligible property sold
at a discounted price under this paragraph, the
sale agreement under paragraph (8) shall—
‘‘(i) require the purchasing unit of gen-
eral local government or nonprofit organi-
zation to provide the full benefit of the dis-
count to the teacher obtaining the property;
and
‘‘(ii) in the case of a purchase involv-
ing multiple eligible assets, any of which is
such an eligible property, designate the spe-
cific eligible property or properties to be
subject to the requirements of subparagraph
(B).
‘‘(E) MORTGAGE
DOWNPAYMENT
ASSIST-
ANCE.—If a teacher purchases an eligible prop-
erty pursuant to a discounted sale price under
this paragraph and finances such purchase
through a mortgage insured under this title, not-
withstanding any provision of section 203 the
downpayment on such mortgage shall be $100.
‘‘(F) PREVENTION OF UNDUE PROFIT.—The
Secretary shall issue regulations to prevent
undue profit from the resale of eligible properties
in violation of the requirement under subpara-
graph (B).
‘‘(G) AWARENESS PROGRAM.—From funds
made available for salaries and expenses for the
Office of Policy Support of the Department of
Housing and Urban Development, each field of-
fice of the Department shall make available to el-
ementary schools and secondary schools within
the jurisdiction of the field office and to the
public—
‘‘(i) a list of eligible properties located
within the jurisdiction of the field office
that are available for purchase by teachers
under this paragraph; and
‘‘(ii) other information designed to
make such teachers and the public aware of
the discount and downpayment assistance
available under this paragraph.
‘‘(H) DEFINITIONS.—For the purposes of
this paragraph, the following definitions shall
apply:
‘‘(i) The terms ‘elementary school’ and
‘secondary school’ have the meanings given
such terms in section 14101 of the Elemen-
tary and Secondary Education Act of 1965
(20 U.S.C. 8801), except that, for purposes
of this paragraph, elementary education (as
used in such section) shall include pre-Kin-
dergarten education.
‘‘(ii) The term ‘eligible property’
means an eligible asset described in para-
graph (2)(A) of this subsection.
‘‘(iii) The term ‘teacher’ means an in-
dividual who is employed on a full-time
basis, in an elementary or secondary school,
as a State-certified classroom teacher or ad-
ministrator.’’.
(d) CONFORMING AMENDMENTS.—Section 204(h) of
the National Housing Act (12 U.S.C. 1710(h)) is
amended—
(1) in paragraph (4)(B)(ii), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraph (8)’’;
(2) in paragraph (5)(B)(i), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraph (8)’’; and
(3) in paragraph (6)(A), by striking ‘‘paragraph
(8)’’ and inserting ‘‘paragraph (9)’’.
(e) REGULATIONS.—Not later than 90 days after the
date of the enactment of this Act, the Secretary shall issue
regulations to implement the amendments made by this sec-
tion.
SEC. 206. COMMUNITY DEVELOPMENT FINANCIAL INSTITU-
TION RISK-SHARING DEMONSTRATION.
Section 249 of the National Housing Act (12 U.S.C.
1715z–14) is amended—
(1) by striking the section heading and inserting
the following:
‘‘RISK-SHARING DEMONSTRATION’’;
(2) by striking ‘‘reinsurance’’ each place such
term appears and insert ‘‘risk-sharing’’;
(3) in subsection (a)—
(A) in the first sentence, by striking ‘‘pri-
vate mortgage insurers’’ and inserting ‘‘insured
community development financial institutions’’;
and
(B) in the second sentence—
(i) by striking ‘‘two’’ and inserting
‘‘4’’; and
(ii) by striking ‘‘March 15, 1988’’ and
inserting ‘‘the expiration of the 5-year pe-
riod beginning on the date of the enactment
of the American Homeownership and Eco-
nomic Opportunity Act of 2000’’;
(4) in subsection (b)—
(A) by striking ‘‘private mortgage insurance
companies’’ each place such term appears and
inserting ‘‘insured community development fi-
nancial institutions’’;
(B) in the first sentence, by striking ‘‘which
have been determined to be qualified insurers
under section 302(b)(2)(C)’’;
(C) by striking paragraph (1) and inserting
the following new paragraph:
‘‘(1) assume the first loss on any mortgage in-
sured pursuant to section 203(b), 234, or 245 that
covers a one- to four-family dwelling and is included
in the program under this section, up to the percent-
age of loss that is set forth in the risk-sharing con-
tract;’’; and
(D) in paragraph (2)—
(i) by striking ‘‘carry out (under ap-
propriate delegation) such’’ and inserting
‘‘delegate underwriting,’’; and
(ii) by striking ‘‘function’’ and insert-
ing ‘‘functions’’;
(5) in subsection (c)—
(A) in the first sentence—
(i) by striking ‘‘of’’ the first place it
appears and insert ‘‘for’’;
(ii) by striking ‘‘insurance reserves’’
and inserting ‘‘loss reserves’’; and
(iii) by striking ‘‘such insurance’’ and
inserting ‘‘such reserves’’; and
(B) in the second sentence, by striking ‘‘pri-
vate mortgage insurance company’’ and insert-
ing ‘‘insured community development financial
institution’’;
(6) in subsection (d), by striking ‘‘private mort-
gage insurance company’’ and inserting ‘‘insured
community development financial institution’’; and
(7) by adding at the end the following new sub-
section:
‘‘(e) INSURED COMMUNITY DEVELOPMENT FINANCIAL
INSTITUTIONS.—For purposes of this section, the term ‘in-
sured community development financial institution’ means
a community development financial institution, as such
term is defined in section 103 of Reigle Community Devel-
opment and Regulatory Improvement Act of 1994 (12
U.S.C. 4702) that is an insured depository institution (as
such term is defined in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)) or an insured credit union
(as such term is defined in section 101 of the Federal Credit
Union Act (12 U.S.C. 1752)).’’.
SEC. 207. HYBRID ARMS.
(a) IN GENERAL.—Section 251 of the National Hous-
ing Act (12 U.S.C. 1715z–16) is amended—
(1) in subsection (a), by inserting ‘‘IN GEN-
ERAL.—’’ after ‘‘(a)’’;
(2) by striking subsection (b) and inserting the
following new subsection:
‘‘(b) DISCLOSURE.—In the case of any loan applica-
tion for a mortgage to be insured under any provision of
this section, the Secretary shall require that the prospective
mortgagee for the mortgage shall, at the time of loan appli-
cation, make available to the prospective mortgagor a writ-
ten explanation of the features of an adjustable rate mort-
gage consistent with the disclosure requirements applicable
to variable rate mortgages secured by a principal dwelling
under the Truth in Lending Act (15 U.S.C. 1601 et seq.).’’;
(3) in subsection (c), by inserting ‘‘LIMITATION
ON INSURANCE AUTHORITY.—’’ after ‘‘(c)’’; and
(4) by adding at the end the following new sub-
section:
‘‘(d) HYBRID ARMS.—The Secretary may insure
under this subsection a mortgage that—
‘‘(1) has an effective rate of interest that shall
be—
‘‘(A) fixed for a period of not less than the
first 3 years of the mortgage term;
‘‘(B) initially adjusted by the mortgagee
upon the expiration of such period and annually
thereafter; and
‘‘(C) in the case of the initial interest rate
adjustment, shall be subject to the limitation
under clause (2) of the last sentence of subsection
(a) (relating to prohibiting annual increases of
more than 1 percent) only if the interest rate re-
mains fixed for 5 or fewer years; and
‘‘(2) otherwise meets the requirements for insur-
ance under subsection (a) that are not inconsistent
with the requirements under paragraph (1) of this
subsection.’’.
(b) IMPLEMENTATION.—The Secretary of Housing and
Urban Development may implement section 251(d) of the
National Housing Act (12 U.S.C. 1715z–16(d)), as added
by subsection (a) of this section, in advance of rulemaking.
SEC. 208. HOME EQUITY CONVERSION MORTGAGES.
(a) INSURANCE FOR MORTGAGES TO REFINANCE EX-
ISTING HECMS.—
(1) IN GENERAL.—Section 255 of the National
Housing Act (12 U.S.C. 1715z–20) is amended—
(A) by redesignating subsection (k) as sub-
section (m); and
(B) by inserting after subsection (j) the fol-
lowing new subsection:
‘‘(k) INSURANCE AUTHORITY FOR REFINANCINGS.—
‘‘(1) IN
GENERAL.—The Secretary may, upon
application by a mortgagee, insure under this sub-
section any mortgage given to refinance an existing
home equity conversion mortgage insured under this
section.
‘‘(2) ANTI-CHURNING
DISCLOSURE.—The Sec-
retary shall, by regulation, require that the mortgagee
of a mortgage insured under this subsection, provide
to the mortgagor, within an appropriate time period
and in a manner established in such regulations, a
good faith estimate of: (A) the total cost of the refi-
nancing; and (B) the increase in the mortgagor’s
principal limit as measured by the estimated initial
principal limit on the mortgage to be insured under
this subsection less the current principal limit on the
home equity conversion mortgage that is being refi-
nanced and insured under this subsection.
‘‘(3) WAIVER OF COUNSELING REQUIREMENT.—
The mortgagor under a mortgage insured under this
subsection may waive the applicability, with respect
to such mortgage, of the requirements under sub-
section (d)(2)(B) (relating to third party counseling),
but only if—
‘‘(A) the mortgagor has received the disclo-
sure required under paragraph (2);
‘‘(B) the increase in the principal limit de-
scribed in paragraph (2) exceeds the amount of
the total cost of refinancing (as described in such
paragraph) by an amount to be determined by
the Secretary; and
‘‘(C) the time between the closing of the
original home equity conversion mortgage that is
refinanced through the mortgage insured under
this subsection and the application for a refi-
nancing mortgage insured under this subsection
does not exceed 5 years.
‘‘(C) the combined effect of reduced insur-
ance premiums and a single national limitation
on insurance authority.
‘‘(6) FEES.—The Secretary may establish a limit
on the origination fee that may be charged to a mort-
gagor under a mortgage insured under this sub-
section, except that such limitation shall provide that
the origination fee may be fully financed with the
mortgage and shall include any fees paid to cor-
respondent mortgagees approved by the Secretary. The
Secretary shall prohibit the charging of any broker
fees in connection with mortgages insured under this
subsection.’’.
(2) REGULATIONS.—The Secretary shall issue
any final regulations necessary to implement the
amendments made by paragraph (1) of this sub-
section, which shall take effect not later than the expi-
ration of the 180-day period beginning on the date of
the enactment of this Act. The regulations shall be
issued after notice and opportunity for public com-
ment in accordance with the procedure under section
553 of title 5, United States Code, applicable to sub-
stantive rules (notwithstanding subsections (a)(2),
(b)(B), and (d)(3) of such section).
(b) HOUSING COOPERATIVES.—Section 255(b) of the
National Housing Act (12 U.S.C. 1715z–20(b)) is
amended—
(1) in paragraph (2), by striking ‘‘ ‘mortgage’,’’;
and
(2) by adding at the end the following new para-
graphs:
‘‘(4) MORTGAGE.—The term ‘mortgage’ means a
first mortgage or first lien on real estate, in fee sim-
ple, on all stock allocated to a dwelling in a residen-
tial cooperative housing corporation, or on a
leasehold—
‘‘(A) under a lease for not less than 99
years that is renewable; or
‘‘(B) under a lease having a period of not
less than 10 years to run beyond the maturity
date of the mortgage.
‘‘(5) FIRST MORTGAGE.—The term ‘first mort-
gage’ means such classes of first liens as are com-
monly given to secure advances on, or the unpaid
purchase price of, real estate or all stock allocated to
a dwelling unit in a residential cooperative housing
corporation, under the laws of the State in which the
real estate or dwelling unit is located, together with
the credit instruments, if any, secured thereby.’’.
(c) WAIVER
OF UP-FRONT PREMIUMS
FOR MORT-
GAGES USED FOR COSTS OF LONG-TERM CARE INSURANCE
OR HEALTH CARE.—Section 255 of the National Housing
Act (12 U.S.C. 1715z–20) is amended by inserting after
subsection (k) (as added by subsection (a) of this section)
the following new subsection:
‘‘(l) WAIVER OF UP-FRONT PREMIUMS.—
‘‘(1) MORTGAGES TO FUND LONG-TERM CARE IN-
SURANCE.—In the case of any mortgage insured
under this section under which the total amount (ex-
cept as provided in paragraph (3)) of all future pay-
ments described in subsection (b)(3) will be used only
for costs of a qualified long-term care insurance con-
tract (as such term is defined in section 7702B of the
Internal Revenue Code of 1986 (26 U.S.C. 7702B))
that covers the mortgagor or members of the household
residing in the property that is subject to the mort-
gage, notwithstanding section 203(c)(2), the Secretary
shall not charge or collect the single premium pay-
ment otherwise required under subparagraph (A) of
such section to be paid at the time of insurance.
‘‘(2) MORTGAGES
TO
FUND
HEALTH
CARE
COSTS.—In the case of any mortgage insured under
this section under which the future payments de-
scribed in subsection (b)(3) will be used only for costs
for health care services (as such term is defined by the
Secretary) for the mortgagor or members of the house-
hold residing in the property that is subject to the
mortgage and comply with limitations on such pay-
ments, as shall be established by the Secretary and
based upon the purposes of this subsection and the ac-
cumulated equity of the mortgagor in the property,
notwithstanding section 203(c)(2), the Secretary shall
not charge or collect the single premium payment oth-
erwise required under subparagraph (A) of such sec-
tion to be paid at the time of insurance.
‘‘(3) AUTHORITY TO REFINANCE EXISTING MORT-
GAGE AND FINANCE CLOSING COSTS.—A mortgage de-
scribed in paragraphs (1) or (2) may provide financ-
ing of amounts that are used to satisfy outstanding
mortgage obligations (in accordance with such limita-
tions as the Secretary shall prescribe) any amounts
used for initial service charges, appraisal, inspection,
and other fees (as approved by the Secretary) in con-
nection with such mortgage, and the amount of future
payments described in subsection (b)(3) under the
mortgage shall be reduced accordingly.’’.
(d) STUDY OF SINGLE NATIONAL MORTGAGE LIMIT.—
The Secretary of Housing and Urban Development shall
conduct an actuarially based study of the effects of estab-
lishing, for mortgages insured under section 255 of the Na-
tional Housing Act (12 U.S.C. 1715z–20), a single max-
imum mortgage amount limitation in lieu of applicability
of section 203(b)(2) of such Act (12 U.S.C. 1709(b)(2)). The
study shall—
(1) examine the effects of establishing such limi-
tation at different dollar amounts; and
(2) examine the effects of such various limita-
tions on—
(A) the risks to the General Insurance Fund
established under section 519 of such Act;
(B) the mortgage insurance premiums that
would be required to be charged to mortgagors to
ensure actuarial soundness of such Fund; and
(C) take into consideration the various ap-
proaches to providing credit to borrowers who re-
finance home equity conversion mortgages in-
sured under section 255 of such Act.
Not later than 180 days after the date of the enactment of
this Act, the Secretary shall complete the study under this
subsection and submit a report describing the study and
the results of the study to the Committee on Banking and
Financial Services of the House of Representatives and to
the Committee on Banking, Housing, and Urban Affairs
of the Senate.
SEC. 209. LAW ENFORCEMENT OFFICER HOMEOWNERSHIP
PILOT PROGRAM.
(a) ASSISTANCE
FOR
LAW
ENFORCEMENT
OFFI-
CERS.—The Secretary of Housing and Urban Development
shall carry out a pilot program in accordance with this
section to assist Federal, State, and local law enforcement
officers purchasing homes in locally-designated high-crime
areas.
(b) ELIGIBILITY.—To be eligible for assistance under
this section, a law enforcement officer shall—
(1) have completed not less than 6 months of
service as a law enforcement officer as of the date that
the law enforcement officer applies for such assistance;
and
(2) agree, in writing, to use the residence pur-
chased with such assistance as the primary residence
of the law enforcement officer for not less than 3 years
after the date of purchase.
(c) MORTGAGE ASSISTANCE.—If a law enforcement of-
ficer purchases a home in locally-designated high-crime
area and finances such purchase through a mortgage in-
sured under title II of the National Housing Act (12 U.S.C.
1707 et seq.), notwithstanding any provision of section 203
or any other provision of the National Housing Act, the
following shall apply:
(1) DOWNPAYMENT.—
(A) IN GENERAL.—There shall be no down-
payment required if the purchase price of the
property is not more than the reasonable value
of the property, as determined by the Secretary.
(B) PURCHASE PRICE EXCEEDS VALUE.—If
the purchase price of the property exceeds the
reasonable value of the property, as determined
by the Secretary, the required downpayment
shall be the difference between such reasonable
value and the purchase price.
(2) CLOSING
COSTS.—The closing costs and
origination fee for such mortgage may be included in
the loan amount.
(3) INSURANCE PREMIUM PAYMENT.—There shall
be 1 insurance premium payment due on the mort-
gage. Such insurance premium payment—
(A) shall be equal to 1 percent of the loan
amount;
(B) shall be due and considered earned by
the Secretary at the time of the loan closing; and
(C) may be included in the loan amount
and paid from the loan proceeds.
(d) LOCALLY-DESIGNATED HIGH-CRIME AREA.—
(1) IN GENERAL.—Any unit of local government
may request that the Secretary designate any area
within the jurisdiction of that unit of local govern-
ment as a locally-designated high-crime area for pur-
poses of this section if the proposed area—
(A) has a crime rate that is significantly
higher than the crime rate of the non-designated
area that is within the jurisdiction of the unit
of local government; and
(B) has a population that is not more than
25 percent of the total population of area within
the jurisdiction of the unit of local government.
(2) DEADLINE
FOR
CONSIDERATION
OF
RE-
QUEST.—Not later than 60 days after receiving a re-
quest under paragraph (1), the Secretary shall ap-
prove or disapprove the request.
(e) LAW ENFORCEMENT OFFICER.—For purposes of
this section, the term ‘‘law enforcement officer’’ has such
meaning as the Secretary shall provide, except that such
term shall include any individual who is employed as an
officer in a correctional institution.
(f) SUNSET.—The Secretary shall not approve any ap-
plication for assistance under this section that is received
by the Secretary after the expiration of the 3-year period
beginning on the date that the Secretary first makes avail-
able assistance under the pilot program under this section.
SEC. 210. STUDY OF MANDATORY INSPECTION REQUIRE-
MENT 
UNDER 
SINGLE 
FAMILY 
HOUSING
MORTGAGE INSURANCE PROGRAM.
The Comptroller General of the United States shall
conduct a study regarding the inspection of properties pur-
chased with loans insured under section 203 of the National
Housing Act. The study shall evaluate the following issues:
(1) The feasibility of requiring inspections of all
properties purchased with loans insured under such
section.
(2) The level of financial losses or savings to the
Mutual Mortgage Insurance Fund that are likely to
occur if inspections are required on properties pur-
chased with loans insured under such section.
(3) The potential impact on the process of buy-
ing a home if inspections of properties purchased
with loans insured under such section are required,
including the process of buying a home in under-
served areas where losses to the Mutual Mortgage In-
surance Fund are greatest.
(4) The difference, if any, in the quality of
homes purchased with loans insured under such sec-
tion that are inspected before purchase and such
homes that are not inspected before purchase.
(5) The cost to homebuyers of requiring inspec-
tions before purchase of properties with loans insured
under such section.
(6) The extent, if any, to which requiring inspec-
tions of properties purchased with loans insured
under such section will result in adverse selection of
loans insured under such section.
(7) The extent of homebuyer knowledge regarding
property inspections and the extent to which such
knowledge affects the decision of homebuyers to opt for
or against having a property inspection before pur-
chasing a home.
(8) The impact of the Homebuyer Protection
Plan implemented by the Department of Housing and
Urban Development on the number of appraisers au-
thorized to appraise homes with mortgages insured
under section 203 of the National Housing Act.
(9) The cost to homebuyers incurred as a result
of the Homebuyer Protection plan, taking into consid-
eration, among other factors, an increase in appraisal
fees.
(10) The benefit or adverse impact of the Home-
buyer Protection Plan on minority homebuyers.
(11) The extent to which the appraisal require-
ments of the Homebuyer Protection Plan conflict with
State laws regarding appraisals and home inspec-
tions.
Not later than the expiration of the 1-year period be-
ginning on the date of the enactment of this Act, the Comp-
troller General shall submit to the Congress a report con-
taining the results of the study and any recommendations
with respect to the issues specified under this section.
SEC. 211. REPORT ON TITLE I HOME IMPROVEMENT LOAN
PROGRAM.
(a) IN GENERAL.—Not later than 1 year after the date
of the enactment of this Act, the Secretary of Housing and
Urban Development shall submit a report to the Congress
containing recommendations for improvements to the prop-
erty improvement loan insurance program under title I of
the National Housing Act, including improvements de-
signed to address problems relating to home improvement
contractors obtaining loans on behalf of homeowners.
(b) CONSULTATION.—In developing and determining
recommendations for inclusion in the report under this sec-
tion and in preparing the report, the Secretary shall consult
with interested persons, organizations, and entities, includ-
ing representatives of the lending industry, the home im-
provement industry, and consumer organizations.
TITLE III—SECTION 8
HOMEOWNERSHIP OPTION
SEC. 301. DOWNPAYMENT ASSISTANCE.
(a) AMENDMENTS.—Section 8(y) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(y)) is amended—
(1) by redesignating paragraph (7) as para-
graph (8); and
(2) by inserting after paragraph (6) the fol-
lowing new paragraph:
‘‘(7) DOWNPAYMENT ASSISTANCE.—
‘‘(A) AUTHORITY.—A public housing agency
may, in lieu of providing monthly assistance
payments under this subsection on behalf of a
family eligible for such assistance and at the dis-
cretion of the public housing agency, provide as-
sistance for the family in the form of a single
grant to be used only as a contribution toward
the downpayment required in connection with
the purchase of a dwelling for fiscal year 2000
and each fiscal year thereafter to the extent pro-
vided in advance in appropriations Acts.
‘‘(B) AMOUNT.—The amount of a downpay-
ment grant on behalf of an assisted family may
not exceed the amount that is equal to the sum
of the assistance payments that would be made
during the first year of assistance on behalf of
the family, based upon the income of the family
at the time the grant is to be made.’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect immediately after the amend-
ments made by section 555(c) of the Quality Housing and
Work Responsibility Act of 1998 take effect pursuant to
such section.
SEC. 302. PILOT PROGRAM FOR HOMEOWNERSHIP ASSIST-
ANCE FOR DISABLED FAMILIES.
(a) IN GENERAL.—A public housing agency providing
tenant-based assistance on behalf of an eligible family under
section 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f) may provide assistance for a disabled family
that purchases a dwelling unit (including a dwelling unit
under a lease-purchase agreement) that will be owned by
1 or more members of the disabled family and will be occu-
pied by the disabled family, if the disabled family—
(1) purchases the dwelling unit before the expira-
tion of the 3-year period beginning on the date that
the Secretary first implements the pilot program
under this section;
(2) demonstrates that the disabled family has in-
come from employment or other sources (including
public assistance), as determined in accordance with
requirements of the Secretary, that is not less than
twice the payment standard established by the public
housing agency (or such other amount as may be es-
tablished by the Secretary);
(3) except as provided by the Secretary, dem-
onstrates at the time the disabled family initially re-
ceives tenant-based assistance under this section that
one or more adult members of the disabled family
have achieved employment for the period as the Sec-
retary shall require;
(4) participates in a homeownership and hous-
ing counseling program provided by the agency; and
(5) meets any other initial or continuing re-
quirements established by the public housing agency
in accordance with requirements established by the
Secretary.
(b) DETERMINATION OF AMOUNT OF ASSISTANCE.—
(1) IN GENERAL.—
(A) MONTHLY EXPENSES NOT EXCEEDING
PAYMENT
STANDARD.—If the monthly home-
ownership expenses, as determined in accordance
with requirements established by the Secretary,
do not exceed the payment standard, the monthly
assistance payment shall be the amount by which
the homeownership expenses exceed the highest of
the following amounts, rounded to the nearest
dollar:
(i) 30 percent of the monthly adjusted
income of the disabled family.
(ii) 10 percent of the monthly income
of the disabled family.
(iii) If the disabled family is receiving
payments for welfare assistance from a pub-
lic agency, and a portion of those payments,
adjusted in accordance with the actual
housing costs of the disabled family, is spe-
cifically designated by that agency to meet
the housing costs of the disabled family, the
portion of those payments that is so des-
ignated.
(B) MONTHLY EXPENSES EXCEED PAYMENT
STANDARD.—If the monthly homeownership ex-
penses, as determined in accordance with re-
quirements established by the Secretary, exceed
the payment standard, the monthly assistance
payment shall be the amount by which the appli-
cable payment standard exceeds the highest of the
amounts under clauses (i), (ii), and (iii) of sub-
paragraph (A).
(2) CALCULATION OF AMOUNT.—
(A) LOW-INCOME
FAMILIES.—A disabled
family that is a low-income family shall be eligi-
ble to receive 100 percent of the amount cal-
culated under paragraph (1).
(B) INCOME BETWEEN 81 AND 89 PERCENT
OF MEDIAN.—A disabled family whose income is
between 81 and 89 percent of the median for the
area shall be eligible to receive 66 percent of the
amount calculated under paragraph (1).
(C) INCOME BETWEEN 90 AND 99 PERCENT
OF MEDIAN.—A disabled family whose income is
between 90 and 99 percent of the median for the
area shall be eligible to receive 33 percent of the
amount calculated under paragraph (1).
(D) INCOME MORE THAN 99 PERCENT OF
MEDIAN.—A disabled family whose income is
more than 99 percent of the median for the area
shall not be eligible to receive assistance under
this section.
(c) INSPECTIONS AND CONTRACT CONDITIONS.—
(1) IN GENERAL.—Each contract for the pur-
chase of a dwelling unit to be assisted under this sec-
tion shall—
(A) provide for pre-purchase inspection of
the dwelling unit by an independent profes-
sional; and
(B) require that any cost of necessary re-
pairs be paid by the seller.
(2) ANNUAL INSPECTIONS NOT REQUIRED.—The
requirement under subsection (o)(8)(A)(ii) of the
United States Housing Act of 1937 for annual inspec-
tions shall not apply to dwelling units assisted under
this section.
(d) OTHER AUTHORITY OF THE SECRETARY.—The
Secretary may—
(1) limit the term of assistance for a disabled
family assisted under this section;
(2) provide assistance for a disabled family for
the entire term of a mortgage for a dwelling unit if
the disabled family remains eligible for such assist-
ance for such term; and
(3) modify the requirements of this section as the
Secretary determines to be necessary to make appro-
priate adaptations for lease-purchase agreements.
(e) ASSISTANCE PAYMENTS SENT TO LENDER.—The
Secretary shall remit assistance payments under this sec-
tion directly to the mortgagee of the dwelling unit pur-
chased by the disabled family receiving such assistance pay-
ments.
(f) INAPPLICABILITY OF CERTAIN PROVISIONS.—As-
sistance under this section shall not be subject to the re-
quirements of the following provisions:
(1) Subsection (c)(3)(B) of section 8 of the
United States Housing Act of 1937.
(2) Subsection (d)(1)(B)(i) of section 8 of the
United States Housing Act of 1937.
(3) Any other provisions of section 8 of the
United States Housing Act of 1937 governing max-
imum amounts payable to owners and amounts pay-
able by assisted families.
(4) Any other provisions of section 8 of the
United States Housing Act of 1937 concerning con-
tracts between public housing agencies and owners.
(5) Any other provisions of the United States
Housing Act of 1937 that are inconsistent with the
provisions of this section.
(g) REVERSION TO RENTAL STATUS.—
(1) NON-FHA MORTGAGES.—If a disabled family
receiving assistance under this section defaults under
a mortgage not insured under the National Housing
Act, the disabled family may not continue to receive
rental assistance under section 8 of the United States
Housing Act of 1937 unless it complies with require-
ments established by the Secretary.
(2) ALL MORTGAGES.—A disabled family receiv-
ing assistance under this section that defaults under
a mortgage may not receive assistance under this sec-
tion for occupancy of another dwelling unit owned by
1 or more members of the disabled family.
(3) EXCEPTION.—This subsection shall not apply
if the Secretary determines that the disabled family
receiving assistance under this section defaulted under
a mortgage due to catastrophic medical reasons or
due to the impact of a federally declared major dis-
aster or emergency.
(h) REGULATIONS.—Not later than 90 days after the
date of the enactment of this Act, the Secretary shall issue
regulations to implement this section. Such regulations may
not prohibit any public housing agency providing tenant-
based assistance on behalf of an eligible family under sec-
tion 8 of the United States Housing Act of 1937 from par-
ticipating in the pilot program under this section.
(i) DEFINITION OF DISABLED FAMILY.—For the pur-
poses of this section, the term ‘‘disabled family’’ has the
meaning given the term ‘‘person with disabilities’’ in sec-
tion 811(k)(2) of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 8013(k)(2)).
SEC. 303. FUNDING FOR PILOT PROGRAMS.
(a) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated $2,000,000 for fiscal year
2001 for assistance in connection with the existing home-
ownership pilot programs carried out under the demonstra-
tion program authorized under to section 555(b) of the
Quality Housing and Work Responsibility Act of 1998
(Public Law 105–276; 112 Stat. 2613).
(b) USE.—Subject to subsection (c), amounts made
available pursuant to this section shall be used only through
such homeownership pilot programs to provide, on behalf
of families participating in such programs, amounts for
downpayments in connection with dwellings purchased by
such families using assistance made available under section
8(y) of the United States Housing Act of 1937 (42 U.S.C.
1437f(y)). No such downpayment grant may exceed 20 per-
cent of the appraised value of the dwelling purchased with
assistance under such section 8(y).
(c) MATCHING REQUIREMENT.—The amount of assist-
ance made available under this section for any existing
homeownership pilot program may not exceed twice the
amount donated from sources other than this section for use
under the program for assistance described in subsection
(b). Amounts donated from other sources may include
amounts from State housing finance agencies and Neighbor-
hood Housing Services of America.
TITLE IV—COMMUNITY
DEVELOPMENT BLOCK GRANTS
SEC. 401. REAUTHORIZATION.
(a) AUTHORIZATION OF APPROPRIATIONS.—The last
sentence of section 103 of the Housing and Community De-
velopment Act of 1974 (42 U.S.C. 5303) is amended to read
as follows: ‘‘For purposes of assistance under section 106,
there is authorized to be appropriated $4,900,000,000 for
fiscal year 2001 and such sums as may be necessary for
each of fiscal years 2002, 2003, 2004, and 2005.’’.
(b) ENTITLEMENT GRANTS.—
(1) IN GENERAL.—Section 102(a)(5)(B) of the
Housing and Community Development Act of 1974
(42 U.S.C. 5302(a)(5)(B)) is amended—
(A) by inserting ‘‘(I)’’ after ‘‘(iii)’’; and
(B) by inserting before the period at the end
the following: ‘‘, or (II) has a population in its
unincorporated areas of not less than 450,000,
except that a town or township which is des-
ignated as a city pursuant to this subclause shall
have only its unincorporated areas considered as
a city for purposes of this title’’.
(2) TREATMENT
AS
SEPARATE
FROM
URBAN
COUNTIES.—Section 102(d) of the Housing and Com-
munity Development Act of 1974 (42 U.S.C. 5302(d))
is amended—
(A) by inserting ‘‘(1)’’ after ‘‘(d)’’; and
(B) by adding at the end the following new
paragraph:
‘‘(2) Notwithstanding paragraph (1), a town or town-
ship that is classified as a city by reason of subclause (II)
of section 102(a)(5)(B)(iii) shall be treated, for purposes of
eligibility for a grant under section 106(b)(1) from amounts
made available for a fiscal year beginning after the date
of the enactment of the American Homeownership and Eco-
nomic Opportunity Act of 2000, as an entity separate from
the urban county in which it is located.’’.
(3) ELIGIBILITY
OF
CERTAIN
URBAN
COUN-
TIES.—Section 102(a)(6) of the Housing and Commu-
nity Development Act of 1974 (42 U.S.C. 5302(a)(6))
is amended—
(1) in subparagraph (D)—
(A) in clause (v), by striking ‘‘or’’ at the
end;
(B) in clause (vi), by striking the period at
the end and inserting ‘‘; or’’; and
(C) by adding at the end the following new
clause:
‘‘(vii)(I) has consolidated its government
with one or more municipal governments, such
that within the county boundaries there are no
unincorporated areas, (II) has a population of
not less than 650,000, over which the consoli-
dated government has the authority to undertake
essential community development and housing
assistance activities, (III) for more than 10
years, has been classified as an entitlement area
for purposes of allocating and distributing funds
under section 106, and (IV) as of the date of the
enactment of this clause, has over 90 percent of
the county’s population within the jurisdiction of
the consolidated government.’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(F) Notwithstanding any other provision of this
paragraph, any county that was classified as an
urban county pursuant to subparagraph (A) for fiscal
year 1999, includes 10 cities each having a popu-
lation of less than 50,000, and has a population in
its unincorporated areas of 190,000 or more but less
than 200,000, shall thereafter remain classified as an
urban county.’’.
SEC. 402. PROHIBITION OF SET-ASIDES.
Section 103 of the Housing and Community Develop-
ment Act of 1974 (42 U.S.C. 5303), as amended by section
401 of this Act, is further amended—
(1) by inserting after ‘‘SEC. 103.’’ the following:
‘‘(a) IN GENERAL.—’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) PROHIBITION OF SET-ASIDES.—Except as pro-
vided in paragraphs (1) and (2) of section 106(a) and sec-
tion 107, amounts appropriated pursuant to subsection (a)
of this section or otherwise to carry out this title (other than
section 108) shall be used only for formula-based grants al-
located pursuant to section 106 and may not be otherwise
used unless the provision of law providing for such other
use specifically refers to this subsection and specifically
states that such provision modifies or supersedes the provi-
sions of this subsection.’’.
SEC. 403. PUBLIC SERVICES CAP.
Section 105(a)(8) of the Housing and Community De-
velopment Act of 1974 (42 U.S.C. 5305(a)(8)) is amended
by striking ‘‘fiscal years 1993’’ and all that follows through
‘‘unit of general local government’’ and inserting the fol-
lowing: ‘‘fiscal years 1993 through 2006 to the City of Los
Angeles, the County of Los Angeles, or any other unit of
general local government located in the County of Los Ange-
les, such city, such county, or each such unit of general local
government, respectively,’’.
SEC. 404. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES.
(a) ELIGIBLE ACTIVITIES.—Section 105(a) of the
Housing and Community Development Act of 1974 (42
U.S.C. 5305(a)) is amended—
(1) in paragraph (22)(C), by striking ‘‘and’’ at
the end;
(2) in paragraph (23), by striking the period at
the end and inserting a semicolon; and
(3) by inserting after paragraph (23) the fol-
lowing new paragraph:
‘‘(24) provision of direct assistance to facilitate
and expand homeownership among uniformed em-
ployees (including policemen, firemen, and sanitation
and other maintenance workers) of, and teachers who
are employees of, the metropolitan city or urban
county (or an agency or school district serving such
city or county) receiving grant amounts under this
title pursuant to section 106(b) or the unit of general
local government (or an agency or school district serv-
ing such unit) receiving such grant amounts pursuant
to section 106(d), except that—
‘‘(A) such assistance may only be provided
on behalf of such employees who are first-time
homebuyers under the meaning given such term
in section 104(14) of the Cranston-Gonzalez Na-
tional Affordable Housing Act (42 U.S.C.
12704(14)), except that, for purposes of this
paragraph, such section shall be applied by sub-
stituting ‘section 105(a)(24) of the Housing and
Community Development Act of 1974’ for ‘title
II’;
‘‘(B) notwithstanding section 102(a)(20)(B)
or any other provision of this title, such assist-
ance may be provided on behalf of such employ-
ees whose family incomes do not exceed—
‘‘(i) 115 percent of the median income
of the area involved, as determined by the
Secretary with adjustments for smaller and
larger families; or
‘‘(ii) with respect only to areas that the
Secretary determines have high housing
costs, taking into consideration median
house prices and median family incomes for
the area, 150 percent of the median income
of the area involved, as determined by the
Secretary with adjustments for smaller and
larger families;
‘‘(C) such assistance shall be used only for
acquiring principal residences for such employ-
ees, in a manner that involves obligating
amounts with respect to any particular mortgage
over a period of one year or less, by—
‘‘(i) 
providing 
amounts 
for
downpayments on mortgages;
‘‘(ii) paying reasonable closing costs
normally associated with the purchase of a
residence;
‘‘(iii) obtaining pre- or post-purchase
counseling relating to the financial and
other obligations of homeownership; or
‘‘(iv) subsidizing mortgage interest
rates; and
‘‘(D) any residence purchased using assist-
ance provided under this paragraph shall be sub-
ject to restrictions on resale that are—
‘‘(i) established by the metropolitan
city, urban county, or unit of general local
government providing such assistance; and
‘‘(ii) determined by the Secretary to be
appropriate to comply with subparagraphs
(A) and (B) of section 215(b)(3) of the
Cranston-Gonzalez 
National 
Affordable
Housing Act (42 U.S.C. 12745(b)(3)), ex-
cept that, for purposes of this paragraph,
such subparagraphs shall be applied by sub-
stituting ‘section 105(a)(24) of the Housing
and Community Development Act of 1974’
for ‘this title’;’’.
(b) PRIMARY OBJECTIVES.—Section 105(c) of the
Housing and Community Development Act of 1974 (42
U.S.C. 5305(c)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(5) HOMEOWNERSHIP ASSISTANCE FOR MUNICIPAL
EMPLOYEES.—Notwithstanding any other provision of this
title, any assisted activity described in subsection (a)(24)
of this section shall be considered, for purposes of this title,
to benefit persons of low and moderate income and to be
directed toward the objective under section 101(c)(3).’’.
SEC. 
405. 
TECHNICAL 
AMENDMENT 
RELATING 
TO
BROWNFIELDS.
Section 105(a) of the Housing and Community Devel-
opment Act of 1974 (42 U.S.C. 5305(a)), as amended by
section 404 of this Act, is further amended—
(1) in paragraph (25), by striking the period
and inserting ‘‘; and’’; and
(2) by adding at the end the following new para-
graph:
‘‘(26) environmental cleanup and economic de-
velopment activities related to Brownfields projects in
conjunction with the appropriate environmental regu-
latory agencies.’’.
SEC. 406. INCOME ELIGIBILITY.
(a) IN GENERAL.—In addition to the exceptions grant-
ed pursuant to section 590 of the Quality Housing and
Work Responsibility Act of 1998 (42 U.S.C. 5301 note), the
Secretary of Housing and Urban Development shall, for not
less than 10 other jurisdictions that are metropolitan cities
or urban counties for purposes of title I of the Housing and
Community Development Act of 1974, grant exceptions not
later than 90 days after the date of the enactment of this
Act for such jurisdictions that provide that—
(1) for purposes of the HOME investment part-
nerships program under title II of the Cranston-Gon-
zalez National Affordable Housing Act, the limitation
based on percentage of median income that is appli-
cable 
under 
section 
104(10), 
214(1)(A), 
or
215(a)(1)(A) for any area of the jurisdiction shall be
the numerical percentage that is specified in such sec-
tion; and
(2) for purposes of the community development
block grant program under title I of the Housing and
Community Development Act of 1974, the limitation
based on percentage of median income that is appli-
cable pursuant to section 102(a)(20) for any area
within the State or unit of general local government
shall be the numerical percentage that is specified in
subparagraph (A) of such section.
(b) SELECTION.—In selecting the jurisdictions for
which to grant such exceptions, the Secretary shall consider
the relative median income of such jurisdictions and shall
give preference to jurisdictions with the highest housing
costs.
SEC. 407. HOUSING OPPORTUNITIES FOR PERSONS WITH
AIDS.
Section 863 of the Cranston-Gonzalez National Afford-
able Housing Act (42 U.S.C. 12912) is amended to read
as follows:
‘‘SEC. 863. AUTHORIZATION OF APPROPRIATIONS.
‘‘There is authorized to be appropriated to carry out
this subtitle $260,000,000 for fiscal year 2001 and such
sums as may be necessary for each of fiscal years 2002,
2003, 2004, and 2005.’’.
TITLE V—HOME INVESTMENT
PARTNERSHIPS PROGRAM
SEC. 501. REAUTHORIZATION.
(a) AUTHORIZATION
OF APPROPRIATIONS.—Section
205 of the Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12724) is amended to read as follows:
‘‘SEC. 205. AUTHORIZATION.
‘‘(a) IN GENERAL.—There is authorized to be appro-
priated to carry out this title $1,650,000,000 for fiscal year
2001 and such sums as may be necessary for each of fiscal
years 2002, 2003, 2004, and 2005, of which—
‘‘(1) not more than $25,000,000 in each such fis-
cal year shall be for community housing partnership
activities authorized under section 233; and
‘‘(2) not more than $15,000,000 in each such fis-
cal year shall be for activities in support of State and
local housing strategies authorized under subtitle C, of
which, in each of fiscal years 2001 and 2002,
$3,000,000 shall be for funding grants under section
246.
‘‘(b) PROHIBITION OF SET-ASIDES.—Except as pro-
vided in subsection (a) of this section and section 217(a)(3),
amounts appropriated pursuant to subsection (a) of this
section or otherwise to carry out this title shall be used only
for formula-based grants allocated pursuant to section 217
and may not be otherwise used unless the provision of law
providing for such other use specifically refers to this sub-
section and specifically states that such provision modifies
or supersedes the provisions of this subsection.’’.
(b) ALLOCATIONS OF AMOUNTS.—Section 104(19) of
the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12704(19)) is amended by adding at the end the fol-
lowing: ‘‘The term ‘city’ shall have the meaning given such
term in section 102(a)(5)(B) of such Act. A town or town-
ship that is classified as a city by reason of subclause (II)
of section 102(a)(5)(A)(B)(iii) of such Act shall be treated,
notwithstanding section 102(d)(1) of such Act, as an entity
separate from the urban county in which it is located for
purposes of allocation of amounts under section 217 of this
Act to units of general local government from amounts
made available for any fiscal year beginning after the date
of the enactment of the American Homeownership and Eco-
nomic Opportunity Act of 2000.’’.
(c) PILOT PROGRAM
FOR DEVELOPING REGIONAL
HOUSING STRATEGIES.—Subtitle C of title II of the Cran-
ston-Gonzalez National Affordable Housing Act (42 U.S.C.
12781 et seq.) is amended by adding at the end the following
new section:
‘‘SEC. 246. PILOT PROGRAM FOR DEVELOPING COMPREHEN-
SIVE REGIONAL HOUSING AFFORDABILITY
STRATEGIES.
‘‘(a) AUTHORITY.—The Secretary may, using any
amounts made available for grants under this section, make
not more than 3 grants for each of fiscal years 2001 and
2002 to consortia of units of general local government de-
scribed in subsection (b) for costs of developing and imple-
menting comprehensive housing affordability strategies on
a regional basis.
‘‘(b) ELIGIBLE CONSORTIA.—A consortium of units of
general local government described in this subsection is a
consortium that—
‘‘(1) is eligible under section 216(2) to be deemed
a unit of general local government for purposes of this
title; and
‘‘(2) consists of multiple units of general local
government; and
‘‘(3) contains only units of general local govern-
ment that are geographically contiguous.
‘‘(c) MULTI-STATE REQUIREMENT.—In each fiscal
year in which grants are made under this section, not less
than one of the consortia that receives a grant shall be a
consortium described in subsection (b) that includes units
of general local government from 2 or more States.’’.
SEC. 502. ELIGIBILITY OF LIMITED EQUITY COOPERATIVES
AND MUTUAL HOUSING ASSOCIATIONS.
(a) CONGRESSIONAL FINDINGS.—Section 202(10) of
the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12721(10)) is amended by inserting ‘‘mutual hous-
ing associations,’’ after ‘‘limited equity cooperatives,’’.
(b) DEFINITIONS.—Section 104 of the Cranston-Gon-
zalez National Affordable Housing Act (42 U.S.C. 12704)
is amended—
(1) by redesignating paragraph (23) as para-
graph (22);
(2) by redesignating paragraph (24) (relating to
the definition of ‘‘insular area’’) as paragraph (23);
and
(3) by adding at the end the following new para-
graphs:
‘‘(26) The term ‘limited equity cooperative’
means a cooperative housing corporation which, in a
manner determined by the Secretary to be acceptable,
restricts income eligibility of purchasers of member-
ship shares of stock in the cooperative corporation or
the initial and resale price of such shares, or both, so
that the shares remain available and affordable to
low-income families.
‘‘(27) The term ‘mutual housing association’
means a private entity that—
‘‘(A) is organized under State law;
‘‘(B) is described in section 501(c) of the In-
ternal Revenue Code of 1986 and exempt from
taxation under section 501(a) of such Code;
‘‘(C) owns, manages, and continuously de-
velops affordable housing by providing long-term
housing for low- and moderate-income families;
‘‘(D) provides that eligible families who
purchase membership interests in the association
shall have a right to residence in a dwelling unit
in the housing during the period that they hold
such membership interest; and
‘‘(E) provides for the residents of such hous-
ing to participate in the ongoing management of
the housing.’’.
(c) ELIGIBILITY.—Section 215 of the Cranston-Gon-
zalez National Affordable Housing Act (42 U.S.C. 12745)
is amended—
(1) in subsection (b), by adding after and below
paragraph (4) the following:
‘‘Housing that is owned by a limited equity cooperative or
a mutual housing association may be considered by a par-
ticipating jurisdiction to be housing for homeownership for
purposes of this title to the extent that ownership or mem-
bership in such a cooperative or association, respectively,
constitutes homeownership under State or local laws.’’; and
(2) in subsection (a), by adding at the end the
following new paragraph:
‘‘(6) LIMITED EQUITY COOPERATIVES AND MU-
TUAL
HOUSING
ASSOCIATIONS.—Housing that is
owned by a limited equity cooperative or a mutual
housing association may be considered by a partici-
pating jurisdiction to be rental housing for purposes
of this title to the extent that ownership or member-
ship in such a cooperative or association, respectively,
constitutes rental of a dwelling under State or local
laws.’’.
SEC. 503. ADMINISTRATIVE COSTS.
Section 212(c) of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 12742(c)) is amended by
adding at the end the following new sentence: ‘‘A partici-
pating jurisdiction may use amounts made available under
this subsection for a fiscal year for administrative and
planning costs by amortizing the costs of administration
and planning activities under this subtitle over the entire
duration of such activities.’’.
SEC. 504. LEVERAGING AFFORDABLE HOUSING INVEST-
MENT THROUGH LOCAL LOAN POOLS.
(a) ELIGIBLE INVESTMENTS.—Section 212(b) of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12742(b)) is amended by inserting after ‘‘interest
subsidies’’ the following: ‘‘, advances to provide reserves for
loan pools or to provide partial loan guarantees,’’.
(b) TIMELY INVESTMENT OF TRUST FUNDS.—Section
218(e) of the Cranston-Gonzalez National Affordable Hous-
ing Act (42 U.S.C. 12748) is amended to read as follows:
‘‘(e) INVESTMENT WITHIN 15 DAYS.—
‘‘(1) IN GENERAL.—The participating jurisdic-
tion shall, not later than 15 days after funds are
drawn from the jurisdiction’s HOME Investment
Trust Fund, invest such funds, together with any in-
terest earned thereon, in the affordable housing for
which the funds were withdrawn.
‘‘(2) LOAN
POOLS.—In the case of a partici-
pating jurisdiction that withdraws Trust Fund
amounts for investment in the form of an advance for
reserves or partial loan guarantees under a program
providing such credit enhancement for loans for af-
fordable housing, the amounts shall be considered to
be invested for purposes of paragraph (1) upon the
completion of both of the following actions:
‘‘(A) Control of the amounts is transferred
to the program.
‘‘(B) The jurisdiction and the entity oper-
ating the program enter into a written agree-
ment that—
‘‘(i) provides that such funds may be
used only in connection with such program;
‘‘(ii) defines the terms and conditions
of the loan pool reserve or partial loan
guarantees; and
‘‘(iii) provides that such entity shall
ensure that amounts from non-Federal
sources have been contributed, or are com-
mitted for contribution, to the pool avail-
able for loans for affordable housing that
will be backed by such reserves or loan
guarantees in an amount equal to 10 times
the amount invested from Trust Fund
amounts.’’.
(c) EXPIRATION OF RIGHT TO WITHDRAW FUNDS.—
Section 218(g) of the Cranston-Gonzalez National Afford-
able Housing Act (42 U.S.C. 12748(g)) is amended to read
as follows:
‘‘(g) EXPIRATION OF RIGHT TO DRAW FUNDS.—
‘‘(1) IN GENERAL.—If any funds becoming avail-
able to a participating jurisdiction under this title
are not placed under binding commitment to afford-
able housing within 24 months after the last day of
the month in which such funds are deposited in the
jurisdiction’s HOME Investment Trust Fund, the ju-
risdiction’s right to draw such funds from the HOME
Investment Trust Fund shall expire. The Secretary
shall reduce the line of credit in the participating ju-
risdiction’s HOME Investment Trust Fund by the ex-
piring amount and shall reallocate the funds by for-
mula in accordance with section 217(d).
‘‘(2) LOAN
POOLS.—In the case of a partici-
pating jurisdiction that withdraws Trust Fund
amounts for investment in the manner provided
under subsection (e)(2), the amounts shall be consid-
ered to be placed under binding commitment to af-
fordable housing for purposes of paragraph (1) of this
subsection at the time that the amounts are obligated
for use under, and are subject to, a written agreement
described in subsection (e)(2)(B).’’.
(d) TREATMENT OF MIXED INCOME LOAN POOLS AS
AFFORDABLE HOUSING.—
(1) IN GENERAL.—Section 215 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C.
12745) is amended by adding at the end the following
new subsection:
‘‘(c) LOAN POOLS.—Notwithstanding subsections (a)
and (b), housing financed using amounts invested as pro-
vided in section 218(e)(2) shall qualify as affordable hous-
ing only if the housing complies with the following require-
ments:
‘‘(1) In the case of housing that is for
homeownership—
‘‘(A) of the units financed with amounts so
invested—
‘‘(i) not less than 75 percent are prin-
cipal residences of owners whose families
qualify as low-income families—
‘‘(I) in the case of a contract to
purchase existing housing, at the time
of purchase;
‘‘(II) in the case of a lease-pur-
chase agreement for existing housing or
for housing to be constructed, at the
time the agreement is signed; or
‘‘(III) in the case of a contract to
purchase housing to be constructed, at
the time the contract is signed;
‘‘(ii) all are principal residences of
owners whose families qualify as moderate-
income families—
‘‘(I) in the case of a contract to
purchase existing housing, at the time
of purchase;
‘‘(II) in the case of a lease-pur-
chase agreement for existing housing or
for housing to be constructed, at the
time the agreement is signed; or
‘‘(III) in the case of a contract to
purchase housing to be constructed, at
the time the contract is signed; and
‘‘(iii) all comply with paragraphs (3)
and (4) of subsection (b), except that para-
graph (3) shall be applied for purposes of
this 
clause 
by 
substituting 
‘subsection
(c)(2)(B)’ and ‘low- and moderate-income
homebuyers’ for ‘paragraph (2)’ and ‘low-
income homebuyers’, respectively; and
‘‘(B) units made available for purchase only
by families who qualify as low-income families
shall have an initial purchase price that com-
plies with the requirements of subsection (b)(1).
‘‘(2) In the case of housing that is for rental, the
housing—
‘‘(A) complies with subparagraphs (D)
through (F) of subsection (a)(1);
‘‘(B)(i) has not less than 75 percent of the
units occupied by households that qualify as low-
income families and is occupied only by house-
holds that qualify as moderate-income families;
or
‘‘(ii) temporarily fails to comply with
clause (i) only because of increases in the in-
comes of existing tenants and actions satisfactory
to the Secretary are being taken to ensure that
all vacancies in the housing are being filled in
accordance with clause (i) until such noncompli-
ance is corrected; and
‘‘(C) bears rents, in the case of units made
available for occupancy only by households that
qualify as low-income families, that comply with
the requirements of subsection (a)(1)(A).
Paragraphs (4) and (5) of subsection (a) shall apply
to housing that is subject to this subsection.’’.
(2) DEFINITION.—Section 104 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C.
12704), as amended by section 502 of this Act, is fur-
ther amended by adding at the end the following new
paragraph:
‘‘(28) The term ‘moderate income families’
means families whose incomes do not exceed the me-
dian income for the area, as determined by the Sec-
retary with adjustments for smaller and larger fami-
lies, except that the Secretary may establish income
ceilings higher or lower than the median income for
the area on the basis of the Secretary’s findings that
such variations are necessary because of prevailing
levels of construction costs or fair market rents, or un-
usually high or low family incomes.’’.
SEC. 505. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES.
(a) ELIGIBLE ACTIVITIES.—Paragraph (2) of section
215(b) of the Cranston-Gonzalez National Affordable Hous-
ing Act (42 U.S.C. 12745(b)(2)) is amended to read as fol-
lows:
‘‘(2) is the principal residence of an owner
who—
‘‘(A) is a member of a family that qualifies
as a low-income family—
‘‘(i) in the case of a contract to pur-
chase existing housing, at the time of pur-
chase;
‘‘(ii) in the case of a lease-purchase
agreement for existing housing or for hous-
ing to be constructed, at the time the agree-
ment is signed; or
‘‘(iii) in the case of a contract to pur-
chase housing to be constructed, at the time
the contract is signed; or
‘‘(B)(i) is a uniformed employee (which
shall include policemen, firemen, and sanitation
and other maintenance workers) or a teacher
who is an employee, of the participating juris-
diction (or an agency or school district serving
such jurisdiction) that is investing funds made
available under this subtitle to support home-
ownership of the residence; and
‘‘(ii) is a member of a family whose income,
at the time referred to in clause (i), (ii), or (iii)
of subparagraph (A), as appropriate, and as de-
termined by the Secretary with adjustments for
smaller and larger families, does not exceed 115
percent of the median income of the area, except
that, with respect only to such areas that the
Secretary determines have high housing costs,
taking into consideration median house prices
and median family incomes for the area, such
income limitation shall be 150 percent of the me-
dian income of the area, as determined by the
Secretary with adjustments for smaller and larg-
er families;’’.
(b) INCOME TARGETING.—Section 214(2) of the Cran-
ston-Gonzalez National Affordable Housing Act (42 U.S.C.
12744(2)) is amended by inserting before the semicolon the
following: ‘‘or families described in section 215(b)(2)(B)’’.
(c) ELIGIBLE INVESTMENTS.—Section 212(b) of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12742(b)) is amended by adding at the end the fol-
lowing new sentence: ‘‘Notwithstanding the preceding sen-
tence, in the case of homeownership assistance for residences
of owners described in section 215(b)(2)(B), funds made
available under this subtitle may only be invested (A) to
provide amounts for downpayments on mortgages, (B) to
pay reasonable closing costs normally associated with the
purchase of a residence, (C) to obtain pre- or post-purchase
counseling relating to the financial and other obligations
of homeownership, or (D) to subsidize mortgage interest
rates.’’.
SEC. 506. USE OF SECTION 8 ASSISTANCE BY ‘‘GRAND-FAMI-
LIES’’ TO RENT DWELLING UNITS IN AS-
SISTED PROJECTS.
Section 215(a) of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 12745(a)), as amended by
the preceding provisions of this Act, is further amended by
adding at the end the following new paragraph:
‘‘(7) WAIVER OF QUALIFYING RENT.—
‘‘(A) IN GENERAL.—For the purpose of pro-
viding affordable housing appropriate for fami-
lies described in subparagraph (B), the Secretary
may, upon the application of the project owner,
waive the applicability of subparagraph (A) of
paragraph (1) with respect to a dwelling unit
if—
‘‘(i) the unit is occupied by such a
family, on whose behalf tenant-based assist-
ance is provided under section 8 of the
United States Housing Act of 1937 (42
U.S.C. 1437f);
‘‘(ii) the rent for the unit is not greater
than the existing fair market rent for com-
parable units in the area, as established by
the Secretary under section 8 of the United
States Housing Act of 1937; and
‘‘(iii) the Secretary determines that the
waiver, together with waivers under this
paragraph for other dwelling units in the
project, will result in the use of amounts de-
scribed in clause (iii) in an effective man-
ner that will improve the provision of af-
fordable housing for such families.
‘‘(B) ELIGIBLE
FAMILIES.—A family de-
scribed in this subparagraph is a family that
consists of at least one elderly person (who is the
head of household) and one or more of such per-
son’s grand children, great grandchildren, great
nieces, great nephews, or great great grand-
children (as defined by the Secretary), but does
not include any parent of such grandchildren,
great grandchildren, great nieces, great nephews,
or great great grandchildren. Such term includes
any such grandchildren, great grandchildren,
great nieces, great nephews, or great great grand-
children who have been legally adopted by such
elderly person.’’.
SEC. 507. LOAN GUARANTEES.
Subtitle A of title II of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12741 et seq.) is amend-
ed by adding at the end the following new section:
‘‘SEC. 227. LOAN GUARANTEES.
‘‘(a) AUTHORITY.—The Secretary may, upon such
terms and conditions as the Secretary may prescribe, guar-
antee and make commitments to guarantee, only to such
extent or in such amounts as provided in appropriations
Acts, the notes or other obligations issued by eligible partici-
pating jurisdictions or by public agencies designated by and
acting on behalf of eligible participating jurisdictions for
purposes of financing (including credit enhancements and
debt service reserves) the acquisition, new construction, re-
construction, or moderate or substantial rehabilitation of
affordable housing (including real property acquisition, site
improvement, conversion, and demolition), and other re-
lated expenses (including financing costs and relocation ex-
penses of any displaced persons, families, businesses, or or-
ganizations). Housing funded under this section shall meet
the requirements of this subtitle.
‘‘(b) REQUIREMENTS.—Notes or other obligations
guaranteed under this section shall be in such form and
denominations, have such maturities, and be subject to such
conditions as may be prescribed by the Secretary. The Sec-
retary may not deny a guarantee under this section on the
basis of the proposed repayment period for the note or other
obligation, unless the period is more than 20 years or the
Secretary determines that the period otherwise causes the
guarantee to constitute an unacceptable financial risk.
‘‘(c) LIMITATION
ON TOTAL NOTES
AND OBLIGA-
TIONS.—The Secretary may not guarantee or make a com-
mitment to guarantee any note or other obligation if the
total outstanding notes or obligations guaranteed under this
section on behalf of the participating jurisdiction issuing
the note or obligation (excluding any amount defeased
under a contract entered into under subsection (e)(1))
would thereby exceed an amount equal to 5 times the
amount of the participating jurisdiction’s latest allocation
under section 217.
‘‘(d) USE OF PROGRAM FUNDS.—Notwithstanding any
other provision of this subtitle, funds allocated to the par-
ticipating jurisdiction under this subtitle (including pro-
gram income derived therefrom) are authorized for use in
the payment of principal and interest due on the notes or
other obligations guaranteed pursuant to this section and
the payment of such servicing, underwriting, or other
issuance or collection charges as may be specified by the
Secretary.
‘‘(e) SECURITY.—To assure the full repayment of notes
or other obligations guaranteed under this section, and pay-
ment of the issuance or collection charges specified by the
Secretary under subsection (d), and as a prior condition
for receiving such guarantees, the Secretary shall require
the participating jurisdiction (and its designated public
agency issuer, if any) to—
‘‘(1) enter into a contract, in a form acceptable
to the Secretary, for repayment of such notes or other
obligations and the other specified charges;
‘‘(2) pledge as security for such repayment any
allocation for which the participating jurisdiction
may become eligible under this subtitle; and
‘‘(3) furnish, at the discretion of the Secretary,
such other security as may be deemed appropriate by
the Secretary in making such guarantees, which may
include increments in local tax receipts generated by
the housing assisted under this section or disposition
proceeds from the sale of land or housing.
‘‘(f) REPAYMENT AUTHORITY.—The Secretary may,
notwithstanding any other provision of this subtitle or any
other Federal, State, or local law, apply allocations pledged
pursuant to subsection (e) to any repayments due the
United States as a result of such guarantees.
‘‘(g) FULL FAITH AND CREDIT.—The full faith and
credit of the United States is pledged to the payment of
all guarantees made under this section. Any such guarantee
made by the Secretary shall be conclusive evidence of the
eligibility of the notes or other obligations for such guar-
antee with respect to principal and interest, and the valid-
ity of any such guarantee so made shall be incontestable
in the hands of a holder of the guaranteed obligations.
‘‘(h) TAX STATUS.—With respect to any obligation
guaranteed pursuant to this section, the guarantee and the
obligation shall be designed in a manner such that the in-
terest paid on such obligation shall be included in gross in-
come for purposes of the Internal Revenue Code of 1986.
‘‘(i) MONITORING.—The Secretary shall monitor the
use of guarantees under this section by eligible partici-
pating jurisdictions. If the Secretary finds that 50 percent
of the aggregate guarantee authority for any fiscal year has
been committed, the Secretary may impose limitations on
the amount of guarantees any 1 participating jurisdiction
may receive during that fiscal year.
‘‘(j) GUARANTEE OF TRUST CERTIFICATES.—
‘‘(1) AUTHORITY.—The Secretary may, upon
such terms and conditions as the Secretary deems ap-
propriate, guarantee the timely payment of the prin-
cipal of and interest on such trust certificates or other
obligations as may—
‘‘(A) be offered by the Secretary or by any
other offeror approved for purposes of this sub-
section by the Secretary; and
‘‘(B) be based on and backed by a trust or
pool composed of notes or other obligations guar-
100
anteed or eligible for guarantee by the Secretary
under this section.
‘‘(2) FULL FAITH AND CREDIT.—To the same ex-
tent as provided in subsection (g), the full faith and
credit of the United States is pledged to the payment
of all amounts which may be required to be paid
under any guarantee by the Secretary under this sub-
section.
‘‘(3) SUBROGATION.—In the event the Secretary
pays a claim under a guarantee issued under this sec-
tion, the Secretary shall be subrogated fully to the
rights satisfied by such payment.
‘‘(4) OTHER POWERS AND RIGHTS.—No State or
local law, and no Federal law, shall preclude or limit
the exercise by the Secretary of—
‘‘(A) the power to contract with respect to
public offerings and other sales of notes, trust
certificates, and other obligations guaranteed
under this section, upon such terms and condi-
tions as the Secretary deems appropriate;
‘‘(B) the right to enforce, by any means
deemed appropriate by the Secretary, any such
contract; and
‘‘(C) the Secretary’s ownership rights, as
applicable, in notes, certificates or other obliga-
101
tions guaranteed under this section, or consti-
tuting the trust or pool against which trust cer-
tificates or other obligations guaranteed under
this section are offered.
‘‘(k) AGGREGATE LIMITATION.—The total amount of
outstanding obligations guaranteed on a cumulative basis
by the Secretary under this section shall not at any time
exceed $2,000,000,000.’’.
SEC. 508. DOWNPAYMENT ASSISTANCE FOR 2- AND 3-FAMILY
RESIDENCES.
(a) AUTHORITY.—The Secretary of Housing and
Urban Development shall carry out a pilot program under
this section under which covered jurisdictions may use
amounts described in subsection (b) to make loans to eligible
homebuyers for use as downpayments on 2- and 3-family
residences.
(b) COVERED ASSISTANCE.—Notwithstanding section
105 of the Housing and Community Development Act of
1974 (42 U.S.C. 5305) and section 212 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C.
12742), a covered jurisdiction may use amounts provided
to the jurisdiction pursuant to section 106(b) of the Housing
and Community Development Act of 1974 (42 U.S.C.
5406(b)) and amounts in the HOME Investment Trust
Fund for the jurisdiction for downpayment loans meeting
102
the requirements of subsection (d) to homebuyers meeting
the requirements of subsection (c), but only to the extent
such jurisdictions agree to comply with the requirements
of this section, as the Secretary may require.
(c) ELIGIBLE HOMEBUYERS.—A homebuyer meets the
requirements of this subsection only if the homebuyer is an
individual or family—
(1) whose income does not exceed 80 percent of
the median family income for the area within which
the residence to be purchased with the downpayment
loan under subsection (d) is located; except that the
Secretary may, pursuant to a request by a covered ju-
risdiction demonstrating that the jurisdiction has
high housing costs (taking into consideration median
home prices and median family incomes for the area),
increase the percentage limitation under this para-
graph to not more than 110 percent of the median
family income for the area;
(2) who has successfully completed a program re-
garding the responsibilities and financial manage-
ment involved in homeownership and ownership of
rental property that is approved by the Secretary;
(3) has a satisfactory credit history and record
as a tenant of rental housing; and
103
(4) who, if such individual or family has an in-
come that exceeds 80 percent of the median income for
the area, enters into a binding agreement to comply
with the requirements under subsection (e) (relating
to affordability of other dwelling units in the resi-
dence).
(d) NO-INTEREST DOWNPAYMENT LOANS.—A loan
meets the requirements of this subsection only if—
(1) the principal obligation of the loan—
(A) may be used only for a downpayment
for acquisition of a 2- or 3-family residence and
for closing costs and other costs payable at the
time of closing, as the Secretary shall provide;
and
(B) does not exceed the amount that is equal
to the sum of (i) 7 percent of the purchase price
of the residence, and (ii) such closing and other
costs;
(2) the borrower under the loan is paying, for
acquisition of the residence, at least 3 percent of the
cost of acquisition of the residence in cash or its
equivalent;
(3) the borrower under the loan will occupy a
dwelling unit in the residence purchased using the
loan as the principal residence of the borrower;
104
(4) the loan terms—
(A) do not require the borrower to be pre-
qualified for a loan that finances the remainder
of the purchase price of a residence described in
paragraph (1)(A); and
(B) provide that the proceeds of the loan are
available for use (as provided in paragraph (1))
only during the 4-month period beginning upon
the making of the loan to the borrower and that
such proceeds shall revert to the covered jurisdic-
tion upon the conclusion of such period if the
borrower has not entered into a contract for pur-
chase of a residence meeting the requirements of
such paragraph before such conclusion, except
that the Secretary shall provide that covered ju-
risdictions may extend such 4-month period
under such circumstances as the Secretary shall
prescribe;
(5) the loan terms provide for repayment of the
principal obligation of the loan, without interest, at
such time as the covered jurisdiction may provide, ex-
cept that the principal obligation shall be imme-
diately repayable at the time that the borrower—
(A) transfers or sells the borrower’s owner-
ship interest in such residence or ceases to use
105
the residence purchased with the loan proceeds as
his or her principal residence; or
(B) obtains a subsequent loan secured by
such residence or any equity of the borrower in
such residence, the proceeds of which are not used
to prepay or pay off the entire balance due on
the existing loan secured by such residence; or
(6) the loan terms provide that, upon sale of the
residence purchased with the proceeds of the loan, the
borrower shall repay to the covered jurisdiction (to-
gether with the principal obligation of the loan repay-
able pursuant to paragraph (5)(A)) an additional
amount that bears the same ratio to any increase in
the price of the residence upon such sale (compared
to the price paid for the residence upon purchase
using such loan) as the amount of the loan bears to
the purchase price paid for the residence in the pur-
chase using such loan; and
(7) the loan complies with such other require-
ments as the Secretary may prescribe.
(e) AFFORDABILITY OF RENTAL UNITS.—Any dwelling
units in the residence purchased using a loan provided pur-
suant to the authority under this section to a borrower de-
scribed in subsection (c)(4) of this section shall be used only
as rental dwelling units and shall be made available for
106
rental only at a monthly rental price that does not exceed
the fair market rent under section 8(c)(2)(A) of the United
States Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)), as
periodically adjusted, for a unit of the applicable size lo-
cated in the area in which the residence is located. Compli-
ance with this subsection shall be monitored and enforced
by the covered jurisdiction providing the amounts for the
downpayment loan under this section for the purchase of
such residence.
(f) DEFINITIONS.—For purposes of this section, the fol-
lowing definitions shall apply:
(1) COVERED JURISDICTION.—The term ‘‘covered
jurisdiction’’ means, with respect to a fiscal year—
(A) a metropolitan city or urban county
that receives a grant for such fiscal year pursu-
ant to section 106(b) of the Housing and Com-
munity Development Act of 1974 (42 U.S.C.
5306(b)); or
(B) a jurisdiction that is a participating
jurisdiction for such fiscal year for purposes of
the HOME Investment Partnerships Act (42
U.S.C. 12721 et seq.).
(2) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Housing and Urban Development.
107
TITLE VI—LOCAL
HOMEOWNERSHIP INITIATIVES
SEC. 601. REAUTHORIZATION OF NEIGHBORHOOD REIN-
VESTMENT CORPORATION.
Section 608(a)(1) of the Neighborhood Reinvestment
Corporation Act (42 U.S.C. 8107(a)(1)) is amended by
striking the first sentence and inserting the following:
‘‘There is authorized to be appropriated to the corporation
to carry out this title $95,000,000 for fiscal year 2001 and
such sums as may be necessary for each of fiscal years 2002
through 2005. Of the amounts appropriated to the corpora-
tion for fiscal year 2001, $5,000,000 shall be available only
for the corporation to provide assistance under duplex
homeownership programs established before the date of the
enactment of the American Homeownership and Economic
Opportunity Act of 2000 through Neighborworks Home-
ownership Center pilot projects established before such date
of enactment.’’.
SEC. 602. HOMEOWNERSHIP ZONES.
Section 186 of the Housing and Community Develop-
ment Act of 1992 (42 U.S.C. 12898a) is amended to read
as follows:
‘‘SEC. 186. HOMEOWNERSHIP ZONE GRANTS.
‘‘(a) AUTHORITY.—The Secretary of Housing and
Urban Development may make grants to units of general
108
local government to assist homeownership zones. Home-
ownership zones are contiguous, geographically defined
areas, primarily residential in nature, in which large-scale
development projects are designed to reclaim distressed
neighborhoods by creating homeownership opportunities for
low- and moderate-income families. Projects in homeowner-
ship zones are intended to serve as a catalyst for private
investment, business creation, and neighborhood revitaliza-
tion.
‘‘(b) ELIGIBLE ACTIVITIES.—Amounts made available
under this section may be used for projects that include any
of the following activities in the homeownership zone:
‘‘(1) Acquisition, construction, and rehabilita-
tion of housing.
‘‘(2) Site acquisition and preparation, including
demolition, construction, reconstruction, or installa-
tion of public and other site improvements and utili-
ties directly related to the homeownership zone.
‘‘(3) Direct financial assistance to homebuyers.
‘‘(4) Homeownership counseling.
‘‘(5) Relocation assistance.
‘‘(6) Marketing costs, including affirmative mar-
keting activities.
‘‘(7) Other project-related costs.
109
‘‘(8) Reasonable administrative costs (up to 5
percent of the grant amount).
‘‘(9) Other housing-related activities proposed by
the applicant as essential to the success of the home-
ownership zone and approved by the Secretary.
‘‘(c) APPLICATION.—To be eligible for a grant under
this section, a unit of general local government shall submit
an application for a homeownership zone grant in such
form and in accordance with such procedures as the Sec-
retary shall establish.
‘‘(d) SELECTION CRITERIA.—The Secretary shall select
applications for funding under this section through a na-
tional competition, using selection criteria established by
the Secretary, which shall include—
‘‘(1) the degree to which the proposed activities
will result in the improvement of the economic, social,
and physical aspects of the neighborhood and the lives
of its residents through the creation of new home-
ownership opportunities;
‘‘(2) the levels of distress in the homeownership
zone as a whole, and in the immediate neighborhood
of the project for which assistance is requested;
‘‘(3) the financial soundness of the plan for fi-
nancing homeownership zone activities;
‘‘(4) the leveraging of other resources; and
110
‘‘(5) the capacity to successfully carry out the
plan.
‘‘(e) GRANT APPROVAL AMOUNTS.—The Secretary may
establish a maximum amount for any grant for any fund-
ing round under this section. A grant may not be made
in an amount that exceeds the amount that the Secretary
determines is necessary to fund the project for which the
application is made.
‘‘(f) PROGRAM REQUIREMENTS.—A homeownership
zone proposal shall—
‘‘(1) provide for a significant number of new
homeownership opportunities that will make a visible
improvement in an immediate neighborhood;
‘‘(2) not be inconsistent with such planning and
design principles as may be prescribed by the Sec-
retary;
‘‘(3) be designed to stimulate additional invest-
ment in that area;
‘‘(4) provide for partnerships with persons or en-
tities in the private and nonprofit sectors;
‘‘(5) incorporate a comprehensive approach to re-
vitalization of the neighborhood;
‘‘(6) establish a detailed time-line for commence-
ment and completion of construction activities; and
111
‘‘(7) provide for affirmatively furthering fair
housing.
‘‘(g) INCOME TARGETING.—At least 51 percent of the
homebuyers assisted with funds under this section shall have
household incomes at or below 80 percent of median income
for the area, as determined by the Secretary.
‘‘(h) ENVIRONMENTAL REVIEW.—For purposes of envi-
ronmental review, decisionmaking, and action pursuant to
the National Environmental Policy Act of 1969 and other
provisions of law that further the purposes of such Act, a
grant under this section shall be treated as assistance under
the HOME Investment Partnerships Act and shall be sub-
ject to the regulations issued by the Secretary to implement
section 288 of such Act.
‘‘(i) REVIEW, AUDIT, AND REPORTING.—The Secretary
shall make such reviews and audits and establish such re-
porting requirements as may be necessary or appropriate
to determine whether the grantee has carried out its activi-
ties in a timely manner and in accordance with the require-
ments of this section. The Secretary may adjust, reduce, or
withdraw amounts made available, or take other action as
appropriate, in accordance with the Secretary’s perform-
ance reviews and audits under this section.
‘‘(j) AUTHORIZATION.—There is authorized to be ap-
propriated to carry out this section $25,000,000 for fiscal
112
year 2001 and such sums as may be necessary for fiscal
year 2002, to remain available until expended.’’.
SEC. 603. LEASE-TO-OWN.
(a) SENSE OF CONGRESS.—It is the sense of the Con-
gress that residential tenancies under lease-to-own provi-
sions can facilitate homeownership by low- and moderate-
income families and provide opportunities for homeowner-
ship for such families who might not otherwise be able to
afford homeownership.
(b) REPORT.—Not later than the expiration of the 3-
month period beginning on the date of the enactment of this
Act, the Secretary of Housing and Urban Development shall
submit a report to the Congress—
(1) analyzing whether lease-to-own provisions
can be effectively incorporated within the HOME in-
vestment partnerships program, the public housing
program, the tenant-based rental assistance program
under section 8 of the United States Housing Act of
1937, or any other programs of the Department to fa-
cilitate homeownership by low- or moderate-income
families; and
(2) any legislative or administrative changes
necessary to alter or amend such programs to allow
the use of lease-to-own options to provide homeowner-
ship opportunities.
113
SEC. 604. LOCAL CAPACITY BUILDING.
Section 4 of the HUD Demonstration Act of 1993 (42
U.S.C. 9816 note) is amended—
(1) in subsection (a), by inserting ‘‘National As-
sociation of Housing Partnerships,’’ after ‘‘Human-
ity,’’; and
(2) in subsection (e), by striking ‘‘$25,000,000’’
and all that follows and inserting ‘‘, for each fiscal
year, such sums as may be necessary to carry out this
section.’’.
SEC. 605. CONSOLIDATED APPLICATION AND PLANNING RE-
QUIREMENT AND SUPER-NOFA.
(a) CONSOLIDATED APPLICATION.—Section 106 of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12706) is amended to read as follows:
‘‘SEC. 106. CONSOLIDATED APPLICATION FOR COMMUNITY
PLANNING AND DEVELOPMENT PROGRAMS.
‘‘(a) REQUIREMENT.—The Secretary shall, by regula-
tion, provide for jurisdictions to comply with the planning
and application requirements under the covered programs
under subsection (b) by submitting to the Secretary, for a
program year, a single consolidated submission under this
section that complies with the requirements for planning
and application submissions under the laws relating to the
covered programs and shall serve, for the jurisdiction, as
114
the planning document and an application for funding
under the covered programs.
‘‘(b) COVERED
PROGRAMS.—The covered programs
under this subsection are the following programs:
‘‘(1) The HOME investment partnerships pro-
gram under title II of this Act (42 U.S.C. 12721 et
seq.).
‘‘(2) The community development block grant
program under title I of the Housing and Community
Development Act of 1974 (42 U.S.C. 5301 et seq.).
‘‘(3) The economic development initiative pro-
gram under section 108(q) of the Housing and Com-
munity Development Act of 1974 (42 U.S.C. 5308(q)).
‘‘(4) The emergency shelter grants program
under subtitle B of title IV of the Stewart B. McKin-
ney Homeless Assistance Act (42 U.S.C. 11371 et
seq.).
‘‘(5) The housing opportunities for persons with
AIDS program under subtitle D of title VIII of the
Cranston-Gonzalez National Affordable Housing Act
(42 U.S.C. 12901 et seq.).
‘‘(c) PROGRAM YEAR.—In establishing requirements
for a consolidated submission under this section, the Sec-
retary shall provide for a consolidated program year, which
115
shall comply with the various application and review dead-
lines under the covered programs.
‘‘(d) ADEQUACY
OF EXISTING REGULATIONS.—The
regulations of the Secretary relating to consolidated submis-
sions for community planning and development programs,
part 91 of title 24, Code of Federal Regulations, as in effect
on March 1, 1999, shall be considered to be sufficient to
comply with this section, except to the extent that the pro-
gram referred to in paragraph (3) of subsection (b) is not
covered by such regulations.
‘‘(e) CONSISTENCY.—The Secretary shall, by regula-
tion or otherwise, as deemed by the Secretary to be appro-
priate, require any application for housing assistance
under title II of this Act, assistance under the Housing and
Community Development Act of 1974, or assistance under
the Stewart B. McKinney Homeless Assistance Act, to con-
tain or be accompanied by a certification by an appro-
priate State or local public official that the proposed hous-
ing activities are consistent with the housing strategy of the
jurisdiction to be served.’’.
(b) SUPER-NOFA.—The Department of Housing and
Urban Development Act is amended by inserting after sec-
tion 12 (42 U.S.C. 3537a) the following new section:
116
‘‘SEC. 13. NOTICE OF FUNDING AVAILABILITY.
‘‘(a) REQUIREMENT.—In making amounts for a fiscal
year under the covered programs under subsection (b) avail-
able to applicants, the Secretary shall issue a consolidated
notice of funding availability that—
‘‘(1) applies to as many of the covered programs
as the Secretary determines is practicable;
‘‘(2) simplifies the application process for fund-
ing under such programs by providing for applica-
tion under various covered programs through a single,
unified application;
‘‘(3) promotes comprehensive approaches to hous-
ing and community development by providing for ap-
plicants to identify coordination of efforts under var-
ious covered programs; and
‘‘(4) clearly informs prospective applicants of the
general and specific requirements under law for ap-
plying for funding under such programs.
‘‘(b) COVERED PROGRAMS.—The covered programs
under this subsection are the programs that are adminis-
tered by the Secretary and identified by the Secretary for
purposes of this section, in the following areas:
‘‘(1) Housing and community development pro-
grams.
‘‘(2) Economic development and empowerment
programs.
117
‘‘(3) Targeted housing assistance and homeless
assistance programs.’’.
SEC. 606. ASSISTANCE FOR SELF-HELP HOUSING PRO-
VIDERS.
(a) REAUTHORIZATION.—Subsection (p) of section 11
of the Housing Opportunity Program Extension Act of
1996 (42 U.S.C. 12805 note) is amended to read as follows:
‘‘(p) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section
$25,000,000 for fiscal year 2001 and such sums as may be
necessary for each of fiscal years 2002 and 2003.’’.
(b) ELIGIBLE EXPENSES.—Section 11(d)(2)(A) of the
Housing Opportunity Program Extension Act of 1996 (42
U.S.C. 12805 note) is amended by inserting before the pe-
riod at the end the following: ‘‘, which may include reim-
bursing an organization, consortium, or affiliate, upon ap-
proval of any required environmental review, for nongrant
amounts of the organization, consortium, or affiliate ad-
vanced before such review to acquire land’’.
(c) DEADLINE FOR RECAPTURE OF FUNDS.—Section
11 of the Housing Opportunity Program Extension Act of
1996 (42 U.S.C. 12805 note) is amended—
(1) in subsection (i)(5)—
(A) by striking ‘‘if the organization or con-
sortia has not used any grant amounts’’ and in-
118
serting ‘‘the Secretary shall recapture any grant
amounts provided to the organization or con-
sortia that are not used’’;
(B) by striking ‘‘(or,’’ and inserting ‘‘, ex-
cept that such period shall be 36 months’’; and
(C) by striking ‘‘within 36 months), the
Secretary shall recapture such unused amounts’’
and inserting ‘‘and in the case of a grant
amounts provided to a local affiliate of the orga-
nization or consortia that is developing 5 or
more dwellings in connection with such grant
amounts’’; and
(2) in subsection (j), by inserting after ‘‘carry
out this section’’ the following: ‘‘and grant amounts
provided to a local affiliate of the organization or
consortia that is developing 5 or more dwellings in
connection with such grant amounts’’.
(d) TECHNICAL CORRECTIONS.—Section 11 of the
Housing Opportunity Program Extension Act of 1996 (42
U.S.C. 12805 note) is amended—
(1) in subsection (b)(4), by striking ‘‘Habitat for
Humanity International, its affiliates, and other’’;
and
(2) in subsection (e)(2), by striking ‘‘consoria’’
and inserting ‘‘consortia’’.
119
SEC. 607. HOUSING COUNSELING ORGANIZATIONS.
Section 106 of the Housing and Urban Development
Act of 1968 (12 U.S.C. 1701x) is amended—
(1) in subsection (a)(1)(ii), by inserting ‘‘and co-
operative housing’’ before the semicolon at the end;
and
(2) in subsection (c)—
(A) in paragraph (1)—
(i) in subparagraph (A), by striking
‘‘and’’ at the end;
(ii) in subparagraph (B), by striking
the period at the end and inserting a semi-
colon; and
(iii) by adding at the end the following
new subparagraph:
‘‘(C) to the National Cooperative Bank De-
velopment Corporation—
‘‘(i) to provide homeownership coun-
seling to eligible homeowners that is specifi-
cally designed to relate to ownership under
cooperative housing arrangements; and
‘‘(ii) to assist in the establishment and
operation of well-managed and viable coop-
erative housing boards.’’;
(B) in paragraph (4)(A), by inserting before
the semicolon at the end the following: ‘‘or, in the
120
case of a home loan made to finance the purchase
of stock or membership in a cooperative owner-
ship housing corporation, by the stock or mem-
bership interest’’; and
(C) in paragraph (6)(C), by adding before
the period at the end the following: ‘‘and in-
cludes a loan that is secured by a first lien given
in accordance with the laws of the State where
the property is located and that is made to fi-
nance the purchase of stock or membership in a
cooperative ownership housing corporation the
permanent occupancy of dwelling units of which
is restricted to members of such corporation,
where the purchase of such stock or membership
will entitle the purchaser to the permanent occu-
pancy of 1 of such units’’.
SEC. 608. COMMUNITY LEAD INFORMATION CENTERS AND
LEAD-SAFE HOUSING.
Section 1011(e) of the Residential Lead-Based Paint
Hazard Reduction Act of 1992 (42 U.S.C. 4852(e)) is
amended—
(1) in paragraph (7), by inserting ‘‘, which may
include leasing of lead-safe temporary housing’’ before
the semicolon at the end;
121
(2) in paragraph (9), by striking ‘‘and’’ at the
end;
(3) by redesignating paragraph (10) as para-
graph (11); and
(4) by inserting after paragraph (9) the fol-
lowing new paragraph:
‘‘(10) provide accessible information through cen-
tralized locations that provide a variety of residential
lead-based paint poisoning prevention services to the
community that such services are intended to benefit;
and’’.
TITLE VII—NATIVE AMERICAN
HOUSING HOMEOWNERSHIP
SEC. 701. LANDS TITLE REPORT COMMISSION.
(a) ESTABLISHMENT.—Subject to sums being provided
in advance in appropriations Acts, there is established a
Commission to be known as the Lands Title Report Com-
mission (hereafter in this section referred to as the ‘‘Com-
mission’’) to facilitate home loan mortgages on Indian trust
lands. The Commission will be subject to oversight by the
Committee on Banking and Financial Services of the House
of Representatives and the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate.
(b) MEMBERSHIP.—
122
(1) APPOINTMENT.—The Commission shall be
composed of 12 members, appointed not later than 90
days after the date of the enactment of this Act as fol-
lows:
(A) 4 members shall be appointed by the
President.
(B) 4 members shall be appointed by the
Chairperson of the Committee on Banking and
Financial Services of the House of Representa-
tives.
(C) 4 members shall be appointed by the
Chairperson of the Committee on Banking,
Housing, and Urban Affairs of the Senate.
(2) QUALIFICATIONS.—
(A) MEMBERS OF TRIBES.—At all times,
not less than 8 of the members of the Commission
shall be members of federally recognized Indian
tribes.
(B) EXPERIENCE
IN
LAND
TITLE
MAT-
TERS.—All members of the Commission shall
have experience in and knowledge of land title
matters relating to Indian trust lands.
(3) CHAIRPERSON.—The Chairperson of the
Commission shall be one of the members of the Com-
123
mission appointed under paragraph (1)(C), as elected
by the members of the Commission.
(4) VACANCIES.—Any vacancy on the Commis-
sion shall not affect its powers, but shall be filled in
the manner in which the original appointment was
made.
(5) TRAVEL EXPENSES.—Members of the Com-
mission shall serve without pay, but each member
shall receive travel expenses, including per diem in
lieu of subsistence, in accordance with sections 5702
and 5703 of title 5, United States Code.
(c) INITIAL MEETING.—The Chairperson of the Com-
mission shall call the initial meeting of the Commission.
Such meeting shall be held within 30 days after the Chair-
person of the Commission determines that sums sufficient
for the Commission to carry out its duties under this Act
have been appropriated for such purpose.
(d) DUTIES.—The Commission shall analyze the sys-
tem of the Bureau of Indian Affairs of the Department of
the Interior for maintaining land ownership records and
title documents and issuing certified title status reports re-
lating to Indian trust lands and, pursuant to such analysis,
determine how best to improve or replace the system—
(1) to ensure prompt and accurate responses to
requests for title status reports;
124
(2) to eliminate any backlog of requests for title
status reports; and
(3) to ensure that the administration of the sys-
tem will not in any way impair or restrict the ability
of Native Americans to obtain conventional loans for
purchase of residences located on Indian trust lands,
including any actions necessary to ensure that the
system will promptly be able to meet future demands
for certified title status reports, taking into account
the anticipated complexity and volume of such re-
quests.
(e) REPORT.—Not later than the date of the termi-
nation of the Commission under subsection (h), the Com-
mission shall submit a report to the Committee on Banking
and Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs
of the Senate describing the analysis and determinations
made pursuant to subsection (d).
(f) POWERS.—
(1) HEARINGS AND SESSIONS.—The Commission
may, for the purpose of carrying out this section, hold
hearings, sit and act at times and places, take testi-
mony, and receive evidence as the Commission con-
siders appropriate.
125
(2) STAFF OF FEDERAL AGENCIES.—Upon re-
quest of the Commission, the head of any Federal de-
partment or agency may detail, on a reimbursable
basis, any of the personnel of that department or
agency to the Commission to assist it in carrying out
its duties under this section.
(3) OBTAINING OFFICIAL DATA.—The Commis-
sion may secure directly from any department or
agency of the United States information necessary to
enable it to carry out this section. Upon request of the
Chairperson of the Commission, the head of that de-
partment or agency shall furnish that information to
the Commission.
(4) MAILS.—The Commission may use the
United States mails in the same manner and under
the same conditions as other departments and agen-
cies of the United States.
(5) ADMINISTRATIVE SUPPORT SERVICES.—Upon
the request of the Commission, the Administrator of
General Services shall provide to the Commission, on
a reimbursable basis, the administrative support serv-
ices necessary for the Commission to carry out its du-
ties under this section.
(6) STAFF.—The Commission may appoint per-
sonnel as it considers appropriate, subject to the pro-
126
visions of title 5, United States Code, governing ap-
pointments in the competitive service, and shall pay
such personnel in accordance with the provisions of
chapter 51 and subchapter III of chapter 53 of that
title relating to classification and General Schedule
pay rates.
(g) AUTHORIZATION OF APPROPRIATIONS.—To carry
out this section, there is authorized to be appropriated
$500,000. Such sums shall remain available until expended.
(h) TERMINATION.—The Commission shall terminate
1 year after the date of the initial meeting of the Commis-
sion.
SEC. 702. LOAN GUARANTEES.
Section 184(i) of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 1715z–13a(i)) is amended—
(1) in paragraph (5), by striking subparagraph
(C) and inserting the following new subparagraph:
‘‘(C) LIMITATION ON OUTSTANDING AGGRE-
GATE PRINCIPAL AMOUNT.—Subject to the limi-
tations in subparagraphs (A) and (B), the Sec-
retary may enter into commitments to guarantee
loans under this section in each fiscal year with
an aggregate outstanding principal amount not
exceeding such amount as may be provided in
appropriation Acts for such fiscal year.’’; and
127
(2) in paragraph (7), by striking ‘‘each of fiscal
years 1997, 1998, 1999, 2000, and 2001’’ and insert-
ing ‘‘each fiscal year’’.
SEC. 703. NATIVE AMERICAN HOUSING ASSISTANCE.
(a) RESTRICTION ON WAIVER AUTHORITY.—
(1) IN GENERAL.—Section 101(b)(2) of the Na-
tive American Housing Assistance and Self-Deter-
mination Act of 1996 (25 U.S.C. 4111(b)(2)) is
amended by striking ‘‘if the Secretary’’ and all that
follows through the period at the end and inserting
the following: ‘‘for a period of not more than 90 days,
if the Secretary determines that an Indian tribe has
not complied with, or is unable to comply with, those
requirements due to exigent circumstances beyond the
control of the Indian tribe.’’.
(2) LOCAL COOPERATION AGREEMENT.—Section
101(c) of the Native American Housing Assistance
and Self-Determination Act of 1996 (25 U.S.C.
4111(c)) is amended by adding at the end the fol-
lowing: ‘‘The Secretary may waive the requirements
of this subsection and subsection (d) if the recipient
has made a good faith effort to fulfill the requirements
of this subsection and subsection (d) and agrees to
make payments in lieu of taxes to the appropriate
taxing authority in an amount consistent with the re-
128
quirements of subsection (d)(2) until such time as the
matter of making such payments has been resolved in
accordance with subsection (d).’’.
(b) ASSISTANCE TO FAMILIES THAT ARE NOT LOW-
INCOME.—Section 102(c) of the Native American Housing
Assistance and Self-Determination Act of 1996 (25 U.S.C.
4112(c)) is amended by adding at the end the following:
‘‘(6) CERTAIN FAMILIES.—With respect to assist-
ance provided under section 201(b)(2) by a recipient
to Indian families that are not low-income families,
evidence that there is a need for housing for each such
family during that period that cannot reasonably be
met without such assistance.’’.
(c) ELIMINATION OF WAIVER AUTHORITY FOR SMALL
TRIBES.—Section 102 of the Native American Housing As-
sistance and Self-Determination Act of 1996 (25 U.S.C.
4112) is amended—
(1) by striking subsection (f); and
(2) by redesignating subsection (g) as subsection
(f).
(d) ENVIRONMENTAL COMPLIANCE.—Section 105 of
the Native American Housing Assistance and Self-Deter-
mination Act of 1996 (25 U.S.C. 4115) is amended by add-
ing at the end the following:
129
‘‘(d) ENVIRONMENTAL COMPLIANCE.—The Secretary
may waive the requirements under this section if the Sec-
retary determines that a failure on the part of a recipient
to comply with provisions of this section—
‘‘(1) will not frustrate the goals of the National
Environmental Policy Act of 1969 (42 U.S.C. 4331 et
seq.) or any other provision of law that furthers the
goals of that Act;
‘‘(2) does not threaten the health or safety of the
community involved by posing an immediate or long-
term hazard to residents of that community;
‘‘(3) is a result of inadvertent error, including
an incorrect or incomplete certification provided
under subsection (c)(1); and
‘‘(4) may be corrected through the sole action of
the recipient.’’.
(e) ELIGIBILITY OF LAW ENFORCEMENT OFFICERS
FOR HOUSING ASSISTANCE.—Section 201(b) of the Native
American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4131(b)) is amended—
(1) in paragraph (1), by striking ‘‘paragraph
(2)’’ and inserting ‘‘paragraphs (2) and (4)’’;
(2) by redesignating paragraphs (4) and (5) as
paragraphs (5) and (6), respectively; and
130
(3) by inserting after paragraph (3) the fol-
lowing new paragraph:
‘‘(4) LAW ENFORCEMENT OFFICERS.—A recipient
may provide housing or housing assistance provided
through affordable housing activities assisted with
grant amounts under this Act for a law enforcement
officer on an Indian reservation or other Indian area,
if—
‘‘(A) the officer—
‘‘(i) is employed on a full-time basis by
the Federal Government or a State, county,
or tribal government; and
‘‘(ii) in implementing such full-time
employment, is sworn to uphold, and make
arrests for, violations of Federal, State,
county, or tribal law; and
‘‘(B) the recipient determines that the pres-
ence of the law enforcement officer on the Indian
reservation or other Indian area may deter
crime.’’.
(f) OVERSIGHT.—
(1) REPAYMENT.—Section 209 of the Native
American Housing Assistance and Self-Determination
Act of 1996 (25 U.S.C. 4139) is amended to read as
follows:
131
‘‘SEC. 209. NONCOMPLIANCE WITH AFFORDABLE HOUSING
REQUIREMENT.
‘‘If a recipient uses grant amounts to provide afford-
able housing under this title, and at any time during the
useful life of the housing the recipient does not comply with
the requirement under section 205(a)(2), the Secretary shall
take appropriate action under section 401(a).’’.
(2) AUDITS AND REVIEWS.—Section 405 of the
Native American Housing Assistance and Self-Deter-
mination Act of 1996 (25 U.S.C. 4165) is amended
to read as follows:
‘‘SEC. 405. REVIEW AND AUDIT BY SECRETARY.
‘‘(a) REQUIREMENTS UNDER CHAPTER 75 OF TITLE
31, UNITED STATES CODE.—An entity designated by an
Indian tribe as a housing entity shall be treated, for pur-
poses of chapter 75 of title 31, United States Code, as a
non-Federal entity that is subject to the audit requirements
that apply to non-Federal entities under that chapter.
‘‘(b) ADDITIONAL REVIEWS AND AUDITS.—
‘‘(1) IN GENERAL.—In addition to any audit or
review under subsection (a), to the extent the Sec-
retary determines such action to be appropriate, the
Secretary may conduct an audit or review of a re-
cipient in order to—
‘‘(A) determine whether the recipient—
‘‘(i) has carried out—
132
‘‘(I) eligible activities in a timely
manner; and
‘‘(II) eligible activities and certifi-
cation in accordance with this Act and
other applicable law;
‘‘(ii) has a continuing capacity to
carry out eligible activities in a timely
manner; and
‘‘(iii) is in compliance with the Indian
housing plan of the recipient; and
‘‘(B) verify the accuracy of information
contained in any performance report submitted
by the recipient under section 404.
‘‘(2) ON-SITE VISITS.—To the extent practicable,
the reviews and audits conducted under this sub-
section shall include on-site visits by the appropriate
official of the Department of Housing and Urban De-
velopment.
‘‘(c) REVIEW OF REPORTS.—
‘‘(1) IN GENERAL.—The Secretary shall provide
each recipient that is the subject of a report made by
the Secretary under this section notice that the recipi-
ent may review and comment on the report during a
period of not less than 30 days after the date on
which notice is issued under this paragraph.
133
‘‘(2) PUBLIC AVAILABILITY.—After taking into
consideration any comments of the recipient under
paragraph (1), the Secretary—
‘‘(A) may revise the report; and
‘‘(B) not later than 30 days after the date
on which those comments are received, shall
make the comments and the report (with any re-
visions made under subparagraph (A)) readily
available to the public.
‘‘(d) EFFECT OF REVIEWS.—Subject to section 401(a),
after reviewing the reports and audits relating to a recipi-
ent that are submitted to the Secretary under this section,
the Secretary may adjust the amount of a grant made to
a recipient under this Act in accordance with the findings
of the Secretary with respect to those reports and audits.’’.
(g) ALLOCATION FORMULA.—Section 302(d)(1) of the
Native American Housing Assistance and Self-Determina-
tion Act of 1996 (25 U.S.C. 4152(d)(1)) is amended—
(1) by striking ‘‘The formula,’’ and inserting the
following:
‘‘(A) IN GENERAL.—Except with respect to
an Indian tribe described in subparagraph (B),
the formula’’; and
(2) by adding at the end the following:
134
‘‘(B) CERTAIN
INDIAN
TRIBES.—With re-
spect to fiscal year 2001 and each fiscal year
thereafter, for any Indian tribe with an Indian
housing authority that owns or operates fewer
than 250 public housing units, the formula shall
provide that if the amount provided for a fiscal
year in which the total amount made available
for assistance under this Act is equal to or great-
er than the amount made available for fiscal
year 1996 for assistance for the operation and
modernization of the public housing referred to
in subparagraph (A), then the amount provided
to that Indian tribe as modernization assistance
shall be equal to the average annual amount of
funds provided to the Indian tribe (other than
funds provided as emergency assistance) under
the assistance program under section 14 of the
United States Housing Act of 1937 (42 U.S.C.
1437l) for the period beginning with fiscal year
1992 and ending with fiscal year 1997.’’.
(h) HEARING REQUIREMENT.—Section 401(a) of the
Native American Housing Assistance and Self-Determina-
tion Act of 1996 (25 U.S.C. 4161(a)) is amended—
(1) by redesignating paragraphs (1) through (4)
as subparagraphs (A) through (D), respectively, and
135
realigning such subparagraphs (as so redesignated) so
as to be indented 4 ems from the left margin;
(2) by striking ‘‘Except as provided’’ and insert-
ing the following:
‘‘(1) IN GENERAL.—Except as provided’’;
(3) by striking ‘‘If the Secretary takes an action
under paragraph (1), (2), or (3)’’ and inserting the
following:
‘‘(2) CONTINUANCE
OF
ACTIONS.—If the Sec-
retary takes an action under subparagraph (A), (B),
or (C) of paragraph (1)’’; and
(4) by adding at the end the following:
‘‘(3) EXCEPTION FOR CERTAIN ACTIONS.—
‘‘(A) IN
GENERAL.—Notwithstanding any
other provision of this subsection, if the Sec-
retary makes a determination that the failure of
a recipient of assistance under this Act to com-
ply substantially with any material provision
(as that term is defined by the Secretary) of this
Act is resulting, and would continue to result, in
a continuing expenditure of Federal funds in a
manner that is not authorized by law, the Sec-
retary may take an action described in para-
graph (1)(C) before conducting a hearing.
136
‘‘(B) PROCEDURAL REQUIREMENT.—If the
Secretary takes an action described in subpara-
graph (A), the Secretary shall—
‘‘(i) provide notice to the recipient at
the time that the Secretary takes that ac-
tion; and
‘‘(ii) conduct a hearing not later than
60 days after the date on which the Sec-
retary provides notice under clause (i).
‘‘(C) DETERMINATION.—Upon completion of
a hearing under this paragraph, the Secretary
shall make a determination regarding whether to
continue taking the action that is the subject of
the hearing, or take another action under this
subsection.’’.
(i) PERFORMANCE AGREEMENT TIME LIMIT.—Section
401(b) of the Native American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C. 4161(b)) is
amended—
(1) by striking ‘‘If the Secretary’’ and inserting
the following:
‘‘(1) IN GENERAL.—If the Secretary’’;
(2) by striking ‘‘(1) is not’’ and inserting the fol-
lowing:
‘‘(A) is not’’;
137
(3) by striking ‘‘(2) is a result’’ and inserting
the following:
‘‘(B) is a result’’;
(4) in the flush material following paragraph
(1)(B), as redesignated by paragraph (3) of this
subsection—
(A) by realigning such material so as to be
indented 2 ems from the left margin; and
(B) by inserting before the period at the end
the following: ‘‘, if the recipient enters into a
performance agreement with the Secretary that
specifies the compliance objectives that the recipi-
ent will be required to achieve by the termi-
nation date of the performance agreement’’; and
(5) by adding at the end the following:
‘‘(2) PERFORMANCE AGREEMENT.—The period of
a performance agreement described in paragraph (1)
shall be for 1 year.
‘‘(3) REVIEW.—Upon the termination of a per-
formance agreement entered into under paragraph
(1), the Secretary shall review the performance of the
recipient that is a party to the agreement.
‘‘(4) EFFECT OF REVIEW.—If, on the basis of a
review under paragraph (3), the Secretary determines
that the recipient—
138
‘‘(A) has made a good faith effort to meet
the compliance objectives specified in the agree-
ment, the Secretary may enter into an addi-
tional performance agreement for the period
specified in paragraph (2); and
‘‘(B) has failed to make a good faith effort
to meet applicable compliance objectives, the Sec-
retary shall determine the recipient to have
failed to comply substantially with this Act, and
the recipient shall be subject to an action under
subsection (a).’’.
(j) REFERENCE.—Section 104(b)(1) of the Native
American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4114(b)(1)) is amended by striking
‘‘Davis-Bacon Act (40 U.S.C. 276a–276a–5)’’ and inserting
‘‘Act of March 3, 1931 (commonly known as the Davis-
Bacon Act; chapter 411; 46 Stat. 1494; 40 U.S.C 276a et
seq.)’’.
(k) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) TABLE OF CONTENTS.—Section 1(b) of the
Native American Housing Assistance and Self-Deter-
mination Act of 1996 (25 U.S.C. 4101 note) is
amended in the table of contents—
(A) by striking the item relating to section
206; and
139
(B) by striking the item relating to section
209 and inserting the following:
‘‘209. Noncompliance with affordable housing requirement.’’.
(2) CERTIFICATION OF COMPLIANCE WITH SUB-
SIDY LAYERING REQUIREMENTS.—Section 206 of the
Native American Housing Assistance and Self-Deter-
mination Act of 1996 (25 U.S.C. 4136) is repealed.
(3) TERMINATIONS.—Section 502(a) of the Na-
tive American Housing Assistance and Self-Deter-
mination Act of 1996 (25 U.S.C. 4181(a)) is amended
by adding at the end the following: ‘‘Any housing that
is the subject of a contract for tenant-based assistance
between the Secretary and an Indian housing author-
ity that is terminated under this section shall, for the
following fiscal year and each fiscal year thereafter,
be considered to be a dwelling unit under section
302(b)(1).’’.
140
TITLE VIII—TRANSFER OF HUD-
HELD 
HOUSING 
TO 
LOCAL
GOVERNMENTS 
AND 
NON-
PROFIT ORGANIZATIONS
SEC. 801. TRANSFER OF UNOCCUPIED AND SUBSTANDARD
HUD-HELD HOUSING TO LOCAL GOVERN-
MENTS 
AND 
COMMUNITY 
DEVELOPMENT
CORPORATIONS.
Section 204 of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agen-
cies Appropriations Act, 1997 (12 U.S.C. 1715z–11a) is
amended—
(1) by striking ‘‘FLEXIBLE AUTHORITY.—’’ and
inserting ‘‘DISPOSITION
OF
HUD-OWNED
PROP-
ERTIES. (a) FLEXIBLE AUTHORITY FOR MULTIFAMILY
PROJECTS.—’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) TRANSFER OF UNOCCUPIED AND SUBSTANDARD
HOUSING TO LOCAL GOVERNMENTS AND COMMUNITY DE-
VELOPMENT CORPORATIONS.—
‘‘(1) TRANSFER
AUTHORITY.—Notwithstanding
the authority under subsection (a) and the last sen-
tence of section 204(g) of the National Housing Act
(12 U.S.C. 1710(g)), the Secretary of Housing and
141
Urban Development shall transfer ownership of any
qualified HUD property, subject to the requirements
of this section, to a unit of general local government
having jurisdiction for the area in which the property
is located or to a community development corporation
which operates within such a unit of general local
government in accordance with this subsection, but
only to the extent that units of general local govern-
ment and community development corporations con-
sent to transfer and the Secretary determines that
such transfer is practicable.
‘‘(2) QUALIFIED
HUD
PROPERTIES.—For pur-
poses of this subsection, the term ‘qualified HUD
property’ means any property for which, as of the
date that notification of the property is first made
under paragraph (3)(B), not less than 6 months have
elapsed since the later of the date that the property
was acquired by the Secretary or the date that the
property was determined to be unoccupied or sub-
standard, that is owned by the Secretary and is—
‘‘(A) an unoccupied multifamily housing
project;
‘‘(B) a substandard multifamily housing
project; or
142
‘‘(C) an unoccupied single family property
that—
‘‘(i) has been determined by the Sec-
retary not to be an eligible asset under sec-
tion 204(h) of the National Housing Act (12
U.S.C. 1710(h)); or
‘‘(ii) is an eligible asset under such sec-
tion 204(h), but—
‘‘(I) is not subject to a specific
sale agreement under such section; and
‘‘(II) has been determined by the
Secretary to be inappropriate for con-
tinued inclusion in the program under
such section 204(h) pursuant to para-
graph (10) of such section.
‘‘(3) TIMING.—The Secretary shall establish pro-
cedures that provide for—
‘‘(A) time deadlines for transfers under this
subsection;
‘‘(B) notification to units of general local
government and community development cor-
porations of qualified HUD properties in their
jurisdictions;
143
‘‘(C) such units and corporations to express
interest in the transfer under this subsection of
such properties;
‘‘(D) a right of first refusal for transfer of
qualified HUD properties to units of general
local government and community development
corporations, under which—
‘‘(i) the Secretary shall establish a pe-
riod during which the Secretary may not
transfer such properties except to such units
and corporations;
‘‘(ii) the Secretary shall offer qualified
HUD properties that are single family
properties for purchase by units of general
local government at a cost of $1 for each
property, but only to the extent that the
costs to the Federal Government of disposal
at such price do not exceed the costs to the
Federal Government of disposing of prop-
erty subject to the procedures for single fam-
ily property established by the Secretary
pursuant to the authority under the last
sentence of section 204(g) of the National
Housing Act (12 U.S.C. 1710(g));
144
‘‘(iii) the Secretary may accept an
offer to purchase a property made by a
community development corporation only if
the offer provides for purchase on a cost re-
covery basis; and
‘‘(iv) the Secretary shall accept an
offer to purchase such a property that is
made during such period by such a unit or
corporation and that complies with the re-
quirements of this paragraph;
‘‘(E) a written explanation, to any unit of
general local government or community develop-
ment corporation making an offer to purchase a
qualified HUD property under this subsection
that is not accepted, of the reason that such offer
was not acceptable.
‘‘(4) OTHER DISPOSITION.—With respect to any
qualified HUD property, if the Secretary does not re-
ceive an acceptable offer to purchase the property pur-
suant to the procedure established under paragraph
(3), the Secretary shall dispose of the property to the
unit of general local government in which property is
located or to community development corporations lo-
cated in such unit of general local government on a
145
negotiated, competitive bid, or other basis, on such
terms as the Secretary deems appropriate.
‘‘(5) SATISFACTION OF INDEBTEDNESS.—Before
transferring ownership of any qualified HUD prop-
erty pursuant to this subsection, the Secretary shall
satisfy any indebtedness incurred in connection with
the property to be transferred, by canceling the in-
debtedness.
‘‘(6) DETERMINATION
OF
STATUS
OF
PROP-
ERTIES.—To ensure compliance with the requirements
of this subsection, the Secretary shall take the fol-
lowing actions:
‘‘(A) UPON ENACTMENT.—Upon the enact-
ment of the American Homeownership and Eco-
nomic Opportunity Act of 2000, the Secretary
shall promptly assess each residential property
owned by the Secretary to determine whether
such property is a qualified HUD property.
‘‘(B) UPON ACQUISITION.—Upon acquiring
any residential property, the Secretary shall
promptly determine whether the property is a
qualified HUD property.
‘‘(C) UPDATES.—The Secretary shall peri-
odically reassess the residential properties owned
by the Secretary to determine whether any such
146
properties have become qualified HUD prop-
erties.
‘‘(7) TENANT LEASES.—This subsection shall not
affect the terms or the enforceability of any contract
or lease entered into with respect to any residential
property before the date that such property becomes a
qualified HUD property.
‘‘(8) USE OF PROPERTY.—Property transferred
under this subsection shall be used only for appro-
priate neighborhood revitalization efforts, including
homeownership, rental units, commercial space, and
parks, consistent with local zoning regulations, local
building codes, and subdivision regulations and re-
strictions of record.
‘‘(9) INAPPLICABILITY
TO
PROPERTIES
MADE
AVAILABLE
FOR
HOMELESS.—Notwithstanding any
other provision of this subsection, this subsection shall
not apply to any properties that the Secretary deter-
mines are to be made available for use by the home-
less pursuant to subpart E of part 291 of title 24,
Code of Federal Regulations, during the period that
the properties are so available.
‘‘(10) PROTECTION OF EXISTING CONTRACTS.—
This subsection may not be construed to alter, affect,
or annul any legally binding obligations entered into
147
with respect to a qualified HUD property before the
property becomes a qualified HUD property.
‘‘(11) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) COMMUNITY DEVELOPMENT CORPORA-
TION.—The term ‘community development cor-
poration’ means a nonprofit organization whose
primary purpose is to promote community devel-
opment by providing housing opportunities for
low-income families.
‘‘(B) COST
RECOVERY
BASIS.—The term
‘cost recovery basis’ means, with respect to any
sale of a residential property by the Secretary,
that the purchase price paid by the purchaser is
equal to or greater than the sum of (i) the ap-
praised value of the property, as determined in
accordance with such requirements as the Sec-
retary shall establish, and (ii) the costs incurred
by the Secretary in connection with such prop-
erty during the period beginning on the date on
which the Secretary acquires title to the property
and ending on the date on which the sale is con-
summated.
‘‘(C) MULTIFAMILY
HOUSING
PROJECT.—
The term ‘multifamily housing project’ has the
148
meaning given the term in section 203 of the
Housing and Community Development Amend-
ments of 1978.
‘‘(D) RESIDENTIAL
PROPERTY.—The term
‘residential property’ means a property that is a
multifamily housing project or a single family
property.
‘‘(E) SECRETARY.—The term ‘Secretary’
means the Secretary of Housing and Urban De-
velopment.
‘‘(F) SEVERE
PHYSICAL
PROBLEMS.—The
term ‘severe physical problems’ means, with re-
spect to a dwelling unit, that the unit—
‘‘(i) lacks hot or cold piped water, a
flush toilet, or both a bathtub and a shower
in the unit, for the exclusive use of that
unit;
‘‘(ii) on not less than 3 separate occa-
sions during the preceding winter months,
was uncomfortably cold for a period of more
than 6 consecutive hours due to a malfunc-
tion of the heating system for the unit;
‘‘(iii) has no functioning electrical
service, exposed wiring, any room in which
there is not a functioning electrical outlet,
149
or has experienced 3 or more blown fuses or
tripped circuit breakers during the pre-
ceding 90-day period;
‘‘(iv) is accessible through a public
hallway in which there are no working light
fixtures, loose or missing steps or railings,
and no elevator; or
‘‘(v) has severe maintenance problems,
including water leaks involving the roof,
windows, doors, basement, or pipes or
plumbing fixtures, holes or open cracks in
walls or ceilings, severe paint peeling or
broken plaster, and signs of rodent infesta-
tion.
‘‘(G) SINGLE FAMILY PROPERTY.—The term
‘single family property’ means a 1- to 4-family
residence.
‘‘(H) 
SUBSTANDARD.—The 
term 
‘sub-
standard’ means, with respect to a multifamily
housing project, that 25 percent or more of the
dwelling units in the project have severe physical
problems.
‘‘(I) UNIT
OF
GENERAL
LOCAL
GOVERN-
MENT.—The term ‘unit of general local govern-
ment’ has the meaning given such term in sec-
150
tion 102(a) of the Housing and Community De-
velopment Act of 1974.
‘‘(J) UNOCCUPIED.—The term ‘unoccupied’
means, with respect to a residential property,
that the unit of general local government having
jurisdiction over the area in which the project is
located has certified in writing that the property
is not inhabited.
‘‘(12) REGULATIONS.—
‘‘(A) INTERIM.—Not later than 30 days
after the date of the enactment of the American
Homeownership and Economic Opportunity Act
of 2000, the Secretary shall issue such interim
regulations as are necessary to carry out this
subsection.
‘‘(B) FINAL.—Not later than 60 days after
the date of the enactment of the American Home-
ownership and Economic Opportunity Act of
2000, the Secretary shall issue such final regula-
tions as are necessary to carry out this sub-
section.’’.
SEC. 802. TRANSFER OF HUD ASSETS IN REVITALIZATION
AREAS.
In carrying out the program under section 204(h) of
the National Housing Act (12 U.S.C. 1710(h)), upon the
151
request of the chief executive officer of a county or the gov-
ernment of appropriate jurisdiction and not later than 60
days after such request is made, the Secretary of Housing
and Urban Development shall designate as a revitalization
area all portions of such county that meet the criteria for
such designation under paragraph (3) of such section.
TITLE IX—PRIVATE MORTGAGE
INSURANCE 
CANCELLATION
AND TERMINATION
SECTION 901. SHORT TITLE.
This title may be cited as the ‘‘Private Mortgage Insur-
ance Technical Corrections and Clarification Act’’.
SEC. 902. CHANGES IN AMORTIZATION SCHEDULE.
(a) TREATMENT
OF
ADJUSTABLE
RATE
MORT-
GAGES.—The Homeowners Protection Act of 1998 (12
U.S.C. 4901 et seq.) is amended—
(1) in section 2—
(A) in paragraph (2)(B)(i), by striking
‘‘amortization schedules’’ and inserting ‘‘the am-
ortization schedule then in effect’’;
(B) in paragraph (16)(B), by striking ‘‘am-
ortization schedules’’ and inserting ‘‘the amorti-
zation schedule then in effect’’;
(C) 
by 
redesignating 
paragraphs 
(6)
through (16) (as amended by the preceding pro-
152
visions of this paragraph) as paragraphs (8)
through (18), respectively; and
(D) by inserting after paragraph (5) the fol-
lowing new paragraph:
‘‘(6) AMORTIZATION
SCHEDULE
THEN
IN
EF-
FECT.—The term ‘amortization schedule then in ef-
fect’ means, with respect to an adjustable rate mort-
gage, a schedule established at the time at which the
residential mortgage transaction is consummated or,
if such schedule has been changed or recalculated, is
the most recent schedule under the terms of the note
or mortgage, which shows—
‘‘(A) the amount of principal and interest
that is due at regular intervals to retire the
principal balance and accrued interest over the
remaining amortization period of the loan; and
‘‘(B) the unpaid balance of the loan after
each such scheduled payment is made.’’; and
(2) in section 3(f)(1)(B)(ii), by striking ‘‘amorti-
zation schedules’’ and inserting ‘‘the amortization
schedule then in effect’’.
(b) TREATMENT
OF BALLOON MORTGAGES.—Para-
graph (1) of section 2 of the Homeowners Protection Act
of 1998 (12 U.S.C. 4901(1)) is amended by adding at the
end the following new sentence: ‘‘A residential mortgage
153
that (A) does not fully amortize over the term of the obliga-
tion, and (B) contains a conditional right to refinance or
modify the unamortized principal at the maturity date of
the term, shall be considered to be an adjustable rate mort-
gage for purposes of this Act.’’.
(c) TREATMENT OF LOAN MODIFICATIONS.—
(1) IN GENERAL.—Section 3 of the Homeowners
Protection Act of 1998 (12 U.S.C. 4902) is
amended—
(A) by redesignating subsections (d) through
(f) as subsections (e) through (g), respectively;
and
(B) by inserting after subsection (c) the fol-
lowing new subsection:
‘‘(d) TREATMENT
OF LOAN MODIFICATIONS.—If a
mortgagor and mortgagee (or holder of the mortgage) agree
to a modification of the terms or conditions of a loan pursu-
ant to a residential mortgage transaction, the cancellation
date, termination date, or final termination shall be recal-
culated to reflect the modified terms and conditions of such
loan.’’.
(2) CONFORMING AMENDMENTS.—Section 4(a) of
the Homeowners Protection Act of 1998 (12 U.S.C.
4903(a)) is amended—
(A) in paragraph (1)—
154
(i) in the matter preceding subpara-
graph (A), by striking ‘‘section 3(f)(1)’’ and
inserting ‘‘section 3(g)(1)’’;
(ii) in subparagraph (A)(ii)(IV), by
striking ‘‘section 3(f)’’ and inserting ‘‘sec-
tion 3(g)’’; and
(iii) in subparagraph (B)(iii), by
striking ‘‘section 3(f)’’ and inserting ‘‘sec-
tion 3(g)’’; and
(B) in paragraph (2), by striking ‘‘section
3(f)(1)’’ and inserting ‘‘section 3(g)(1)’’.
SEC. 903. DELETION OF AMBIGUOUS REFERENCES TO RESI-
DENTIAL MORTGAGES.
(a) TERMINATION
OF PRIVATE MORTGAGE INSUR-
ANCE.—Section 3 of the Homeowners Protection Act of 1998
(12 U.S.C. 4902) is amended—
(1) in subsection (c), by inserting ‘‘on residential
mortgage transactions’’ after ‘‘imposed’’; and
(2) in subsection (g) (as so redesignated by sec-
tion 902(c)(1)(A) of this title)—
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by striking ‘‘mortgage
or’’;
(B) in paragraph (2), by striking ‘‘mort-
gage or’’; and
155
(C) in paragraph (3), by striking ‘‘mort-
gage or’’ and inserting ‘‘residential mortgage or
residential’’.
(b) DISCLOSURE REQUIREMENTS.—Section 4 of the
Homeowners Protection Act of 1998 (12 U.S.C. 4903(a))
is amended—
(1) in subsection (a)—
(A) in paragraph (1)—
(i) by striking ‘‘mortgage or’’ the first
place it appears; and
(ii) by striking ‘‘mortgage or’’ the sec-
ond place it appears and inserting ‘‘resi-
dential’’; and
(B) in paragraph (2), by striking ‘‘mort-
gage or’’ and inserting ‘‘residential’’;
(2) in subsection (c), by striking ‘‘paragraphs
(1)(B) and (3) of subsection (a)’’ and inserting ‘‘sub-
section (a)(3)’’; and
(3) in subsection (d), by inserting before the pe-
riod at the end the following: ‘‘, which disclosures
shall relate to the mortgagor’s rights under this Act’’.
(c) DISCLOSURE REQUIREMENTS FOR LENDER-PAID
MORTGAGE INSURANCE.—Section 6 of the Homeowners
Protection Act of 1998 (12 U.S.C. 4905) is amended—
(1) in subsection (c)—
156
(A) in the matter preceding paragraph (1),
by striking ‘‘a residential mortgage or’’; and
(B) in paragraph (2), by inserting ‘‘trans-
action’’ after ‘‘residential mortgage’’; and
(2) in subsection (d), by inserting ‘‘transaction’’
after ‘‘residential mortgage’’.
SEC. 904. CANCELLATION RIGHTS AFTER CANCELLATION
DATE.
Section 3 of the Homeowners Protection Act of 1998
(12 U.S.C. 4902) is amended—
(1) in subsection (a)—
(A) in the matter preceding paragraph (1),
by inserting after ‘‘cancellation date’’ the fol-
lowing: ‘‘or any later date that the mortgagor
fulfills all of the requirements under paragraphs
(1) through (4)’’;
(B) in paragraph (2), by striking ‘‘and’’ at
the end;
(C) by redesignating paragraph (3) as
paragraph (4); and
(D) by inserting after paragraph (2) the fol-
lowing new paragraph:
‘‘(3) is current on the payments required by the
terms of the residential mortgage transaction; and’’;
and
157
(2) in subsection (e)(1)(B) (as so redesignated by
section 902(c)(1)(A) of this title), by striking ‘‘sub-
section (a)(3)’’ and inserting ‘‘subsection (a)(4)’’.
SEC. 905. CLARIFICATION OF CANCELLATION AND TERMI-
NATION ISSUES AND LENDER PAID MORT-
GAGE 
INSURANCE 
DISCLOSURE 
REQUIRE-
MENTS.
(a) GOOD PAYMENT HISTORY.—Section 2(4) of the
Homeowners Protection Act of 1998 (12 U.S.C. 4901(4))
is amended—
(1) in subparagraph (A)—
(A) by inserting ‘‘the later of (i)’’ before
‘‘the date’’; and
(ii) by inserting ‘‘, or (ii) the date that
the mortgagor submits a request for can-
cellation under section 3(a)(1)’’ before the
semicolon; and
(B) in subparagraph (B)—
(i) by inserting ‘‘the later of (i)’’ before
‘‘the date’’; and
(ii) by inserting ‘‘, or (ii) the date that
the mortgagor submits a request for can-
cellation under section 3(a)(1)’’ before the
period at the end.
158
(b) AUTOMATIC TERMINATION.—Paragraph (2) of sec-
tion 3(b) of the Homeowners Protection Act of 1998 (12
U.S.C. 4902(b)(2)) is amended to read as follows:
‘‘(2) if the mortgagor is not current on the termi-
nation date, on the first day of the first month begin-
ning after the date that the mortgagor becomes cur-
rent on the payments required by the terms of the res-
idential mortgage transaction.’’
(c) PREMIUM PAYMENTS.—Section 3 of the Home-
owners Protection Act of 1998 (12 U.S.C. 4902) is amended
by adding at the end the following new subsection:
‘‘(h) ACCRUED
OBLIGATION
FOR
PREMIUM
PAY-
MENTS.—The cancellation or termination under this section
of the private mortgage insurance of a mortgagor shall not
affect the rights of any mortgagee, servicer, or mortgage in-
surer to enforce any obligation of such mortgagor for pre-
mium payments accrued prior to the date on which such
cancellation or termination occurred.’’.
SEC. 906. DEFINITIONS.
(a) REFINANCED.—Section 6(c)(1)(B)(ii) of the Home-
owners Protection Act of 1998 (12 U.S.C. 4905(c)(1)(B)(ii))
is amended by inserting after ‘‘refinanced’’ the following:
‘‘(under the meaning given such term in the regulations
issued by the Board of Governors of the Federal Reserve
159
System to carry out the Truth in Lending Act (15 U.S.C.
1601 et seq.))’’.
(b) MIDPOINT OF THE AMORTIZATION PERIOD.—Sec-
tion 2 of the Homeowners Protection Act of 1998 (12 U.S.C.
4901) is amended by inserting after paragraph (6) (as
added by section 902(a)(1)(D) of this Act) the following new
paragraph:
‘‘(7) MIDPOINT
OF
THE
AMORTIZATION
PE-
RIOD.—The term ‘midpoint of the amortization pe-
riod’ means, with respect to a residential mortgage
transaction, the point in time that is halfway through
the period that begins upon the first day of the amor-
tization period established at the time a residential
mortgage transaction is consummated and ends upon
the completion of the entire period over which the
mortgage is scheduled to be amortized.’’.
(c) ORIGINAL VALUE.—Section 2(12) of the Home-
owners Protection Act of 1998 (12 U.S.C. 4901(10)) (as so
redesignated by section 902(a)(1)(C) of this Act) is
amended—
(1) by inserting ‘‘transaction’’ after ‘‘a residen-
tial mortgage’’; and
(2) by adding at the end the following new sen-
tence: ‘‘In the case of a residential mortgage trans-
action for refinancing the principal residence of the
160
mortgagor, such term means only the appraised value
relied upon by the mortgagee to approve the refinance
transaction.’’.
(d) PRINCIPAL RESIDENCE.—Section 2 of the Home-
owners Protection Act of 1998 (12 U.S.C. 4901) is
amended—
(1) in paragraph (14) (as so redesignated by sec-
tion 902(a)(1)(C) of this Act) by striking ‘‘primary’’
and inserting ‘‘principal’’; and
(2) in paragraph (15) (as so redesignated by sec-
tion 902(a)(1)(C) of this Act) by striking ‘‘primary’’
and inserting ‘‘principal’’;
TITLE X—RURAL HOUSING
HOMEOWNERSHIP
SEC. 
1001. 
PROMISSORY 
NOTE 
REQUIREMENT 
UNDER
HOUSING REPAIR LOAN PROGRAM.
The fourth sentence of section 504(a) of the Housing
Act of 1949 (42 U.S.C. 1474(a)) is amended by striking
‘‘$2,500’’ and inserting ‘‘$7,500’’.
SEC. 1002. LIMITED PARTNERSHIP ELIGIBILITY FOR FARM
LABOR HOUSING LOANS.
The first sentence of section 514(a) of the Housing Act
of 1949 (42 U.S.C. 1484(a)) is amended by striking ‘‘non-
profit limited partnership’’ and inserting ‘‘limited partner-
ship’’.
161
SEC. 1003. PROJECT ACCOUNTING RECORDS AND PRAC-
TICES.
Section 515 of the Housing Act of 1949 (42 U.S.C.
1485) is amended by striking subsection (z) and inserting
the following new subsections:
‘‘(z) ACCOUNTING
AND RECORDKEEPING REQUIRE-
MENTS.—
‘‘(1) ACCOUNTING
STANDARDS.—The Secretary
shall require that borrowers in programs authorized
by this section maintain accounting records in ac-
cordance with generally accepted accounting prin-
ciples for all projects that receive funds from loans
made or guaranteed by the Secretary under this sec-
tion.
‘‘(2) RECORD RETENTION REQUIREMENTS.—The
Secretary shall require that borrowers in programs
authorized by this section retain for a period of not
less than 6 years and make available to the Secretary
in a manner determined by the Secretary, all records
required to be maintained under this subsection and
other records identified by the Secretary in applicable
regulations.
‘‘(aa) DOUBLE DAMAGES FOR UNAUTHORIZED USE OF
HOUSING PROJECTS ASSETS AND INCOME.—
‘‘(1) ACTION TO RECOVER ASSETS OR INCOME.—
162
‘‘(A) IN GENERAL.—The Secretary may re-
quest the Attorney General to bring an action in
a United States district court to recover any as-
sets or income used by any person in violation
of the provisions of a loan made or guaranteed
by the Secretary under this section or in viola-
tion of any applicable statute or regulation.
‘‘(B) 
IMPROPER
DOCUMENTATION.—For
purposes of this subsection, a use of assets or in-
come in violation of the applicable loan, loan
guarantee, statute, or regulation shall include
any use for which the documentation in the
books and accounts does not establish that the use
was made for a reasonable operating expense or
necessary repair of the project or for which the
documentation has not been maintained in ac-
cordance with the requirements of the Secretary
and in reasonable condition for proper audit.
‘‘(C) DEFINITION.—For the purposes of this
subsection, the term ‘person’ means—
‘‘(i) any individual or entity that bor-
rows funds in accordance with programs
authorized by this section;
‘‘(ii) any individual or entity holding
25 percent or more interest of any entity
163
that borrows funds in accordance with pro-
grams authorized by this section; and
‘‘(iii) any officer, director, or partner
of an entity that borrows funds in accord-
ance with programs authorized by this sec-
tion.
‘‘(2) AMOUNT RECOVERABLE.—
‘‘(A) IN GENERAL.—In any judgment favor-
able to the United States entered under this sub-
section, the Attorney General may recover double
the value of the assets and income of the project
that the court determines to have been used in
violation of the provisions of a loan made or
guaranteed by the Secretary under this section or
any applicable statute or regulation, plus all
costs related to the action, including reasonable
attorney and auditing fees.
‘‘(B) 
APPLICATION
OF
RECOVERED
FUNDS.—Notwithstanding any other provision of
law, the Secretary may use amounts recovered
under this subsection for activities authorized
under this section and such funds shall remain
available for such use until expended.
‘‘(3) TIME
LIMITATION.—Notwithstanding any
other provision of law, an action under this sub-
164
section may be commenced at any time during the 6-
year period beginning on the date that the Secretary
discovered or should have discovered the violation of
the provisions of this section or any related statutes
or regulations.
‘‘(4) CONTINUED AVAILABILITY OF OTHER REM-
EDIES.—The remedy provided in this subsection is in
addition to and not in substitution of any other rem-
edies available to the Secretary or the United
States.’’.
SEC. 1004. DEFINITION OF RURAL AREA.
The second sentence of section 520 of the Housing Act
of 1949 (42 U.S.C. 1490) is amended by striking ‘‘year
2000’’ and inserting ‘‘year 2010’’.
SEC. 1005. OPERATING ASSISTANCE FOR MIGRANT FARM-
WORKERS PROJECTS.
The last sentence of section 521(a)(5)(A) of the Hous-
ing Act of 1949 (42 U.S.C. 1490a(a)(5)(A)) is amended by
striking ‘‘project’’ and inserting ‘‘tenant or unit’’.
SEC. 1006. MULTIFAMILY RENTAL HOUSING LOAN GUAR-
ANTEE PROGRAM.
Section 538 of the Housing Act of 1949 (42 U.S.C.
1490p–2) is amended—
(1) in subsection (c), by inserting ‘‘an Indian or-
ganization,’’ after ‘‘thereof,’’;
177
‘‘(A) means the process of periodic review of
the primary inspection agencies, by the Sec-
retary or by a State agency under an approved
State plan pursuant to section 623, in accord-
ance with regulations recommended by the con-
sensus committee and promulgated in accordance
with section 604(b), which process shall be for
the purpose of ensuring that the primary inspec-
tion agencies are discharging their duties under
this title; and
‘‘(B) may include the periodic inspection of
retail locations for transit damage, label tam-
pering, and retailer compliance with this title.’’.
(b) 
CONFORMING
AMENDMENTS.—The 
Act 
is
amended—
(1) in section 613 (42 U.S.C. 5412), by striking
‘‘dealer’’ each place it appears and inserting ‘‘re-
tailer’’;
(2) in section 614(f) (42 U.S.C. 5413(f)), by
striking ‘‘dealer’’ each place it appears and inserting
‘‘retailer’’;
(3) in section 615 (42 U.S.C. 5414)—
(A) in subsection (b)(1), by striking ‘‘deal-
er’’ and inserting ‘‘retailer’’;