able to acquire low-cost rental units paying large
proportions of their incomes for rent; and
(10) in 1995, 82 percent of low-income renter
households were paying more than 30 percent of
their incomes for rent and utilities.
(b) PURPOSE.—It is the purpose of this Act—
(1) to promote the preservation of affordable
housing units by providing matching grants to
States that have developed and funded programs for
the preservation of privately owned housing that is
affordable to low-income families and persons and
was produced for such purpose with Federal assist-
ance;
(2) to minimize the involuntary displacement of
tenants who are currently residing in such housing,
many of whom are elderly or disabled persons; and
(3) to continue the partnerships among the
Federal Government, State and local governments,
and the private sector in operating and assisting
housing that is affordable to low-income Americans.
SEC. 3. AUTHORITY.
The Secretary of Housing and Urban Development
shall, to the extent amounts are made available pursuant
to section 11, make grants under this Act to States for
low-income housing preservation.
SEC. 4. USE OF GRANTS.
(a) IN GENERAL.—Amounts from grants under this
Act may be used only for assistance for acquisition, pres-
ervation incentives, operating costs, and capital expendi-
tures for a housing project that meets the requirements
under subsection (b), (c), or (d).
(b) PROJECTS WITH HUD-INSURED MORTGAGES.—
A project meets the requirements under this subsection
only if—
(1) the project is financed by a loan or mort-
gage that is—
(A) insured or held by the Secretary under
section 221(d)(3) of the National Housing Act
and receiving loan management assistance
under section 8 of the United States Housing
Act of 1937 due to a conversion from section
101 of the Housing and Urban Development
Act of 1965;
(B) insured or held by the Secretary and
bears interest at a rate determined under the
proviso of section 221(d)(5) of the National
Housing Act;
(C) insured, assisted, or held by the Sec-
retary or a State or State agency under section
236 of the National Housing Act; or
(D) held by the Secretary and formerly in-
sured under a program referred to in subpara-
graph (A), (B), or (C);
(2) the project is subject to an unconditional
waiver of, with respect to the mortgage referred to
in paragraph (1)—
(A) all rights to any prepayment of the
mortgage; and
(B) all rights to any voluntary termination
of the mortgage insurance contract for the
mortgage; and
(3) the owner of the project has entered into
binding commitments (applicable to any subsequent
owner) to extend all low-income affordability restric-
tions for the project, including any such restrictions
imposed because of any contract for project-based
assistance for the project.
(c) PROJECTS WITH SECTION 8 PROJECT-BASED AS-
SISTANCE.—A project meets the requirements under this
subsection only if—
(1) the project is subject to a contract for
project-based assistance; and
(2) the owner of the project has entered into
binding commitments (applicable to any subsequent
owner) to extend such assistance for the maximum
period allowable under law (subject to the avail-
ability of amounts for such purpose) and to extend
any low-income affordability restrictions applicable
to the project in connection with such assistance.
(d) PROJECTS
PURCHASED
BY
RESIDENTS.—A
project meets the requirements under this subsection only
if the project—
(1) is or was eligible low-income housing (as
such term is defined in section 229 of the Low-In-
come Housing Preservation and Resident Home-
ownership Act of 1990 (42 U.S.C. 4119); and
(2) has been purchased by a resident council for
the housing or is approved by the Secretary for such
purchase, for conversion to homeownership housing
under a resident homeownership program meeting
the requirements under section 226 of such Act (12
U.S.C. 4116).
(e) 
COMBINATION
OF
ASSISTANCE.—Notwith-
standing subsection (a), any project that is otherwise eligi-
ble for assistance with grant amounts provided under this
Act because the project meets the requirements under sub-
section (b) or (c) and that also meets the requirements
under paragraph (1) of the other of such subsections, shall
be eligible for such assistance only if the project complies
with all of the requirements under such other subsection.
SEC. 5. GRANT AMOUNT LIMITATION.
The Secretary shall limit the portion of the aggregate
amount of grants under this Act made available for any
fiscal year that may be provided to a single State based
upon the proportion of such State’s need (as determined
by the Secretary) for such assistance to the aggregate
need among all States approved for such assistance for
such fiscal year.
SEC. 6. MATCHING REQUIREMENT.
(a) IN GENERAL.—The Secretary may not make a
grant under this Act to any State for any fiscal year in
an amount that exceeds twice the amount that the State
certifies, as the Secretary shall require, that the State will
contribute for such fiscal year, or has contributed since
January 1, 2001, from non-Federal sources for the pur-
poses under section 4(a).
(b) TREATMENT OF PREVIOUS CONTRIBUTIONS.—
Any portion of amounts contributed after January 1,
2001, that are counted for purposes of meeting the re-
quirement under subsection (a) for a fiscal year may not
be counted for such purposes for any subsequent fiscal
year.
(c) TREATMENT OF TAX CREDITS.—Tax credits pro-
vided under section 42 of the Internal Revenue Code of
1986 and proceeds from the sale of tax-exempt bonds by