I
105TH CONGRESS
2D SESSION
H. R. 3899
To expand homeownership in the United States.
IN THE HOUSE OF REPRESENTATIVES
MAY 19, 1998
Mr. LAZIO of New York (for himself, Mr. LEACH, Mr. BAKER, Mr. CAMP-
BELL, Mrs. KELLY, Mr. NEY, Mr. FOX of Pennsylvania, Mr. REDMOND,
Mr. RYUN, Mr. SHAYS, Mr. NUSSLE, and Mr. METCALF) introduced the
following bill; which was referred to the Committee on Banking and Fi-
nancial Services
A BILL
To expand homeownership in the United States.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘American Homeownership Act of 1998’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title.
Sec. 2. Findings and purpose.
TITLE I—REMOVAL OF BARRIERS TO AFFORDABLE HOUSING
Sec. 101. Short title.
Sec. 102. Housing impact analysis.
Sec. 103. Grants for regulatory barrier removal strategies.
Sec. 104. Eligibility for community development block grants.
Sec. 105. Regulatory barriers clearinghouse.
TITLE II—HOMEOWNERSHIP THROUGH MORTGAGE INSURANCE
AND LOAN GUARANTEES
Sec. 201. Adjustable rate mortgages.
Sec. 202. Home equity conversion mortgages.
Sec. 203. Inspections under single family housing mortgage insurance program.
Sec. 204. Definition of area.
Sec. 205. Rural housing guaranteed loans.
TITLE III—ASSISTANCE FOR SELF-HELP HOUSING PROVIDERS
Sec. 301. Extended period of use of funds.
Sec. 302. Authorization of appropriations.
TITLE IV—SECTION 8 HOMEOWNERSHIP OPTION
Sec. 401. Program flexibility.
Sec. 402. Downpayment assistance.
TITLE V—HOME INVESTMENT PARTNERSHIPS PROGRAM
Sec. 501. Reauthorization.
Sec. 502. Income eligibility to facilitate homeownership in high cost areas.
Sec. 503. Eligibility of limited equity cooperatives and mutual housing associa-
tions.
Sec. 504. Leveraging affordable housing investment through local loan pools.
Sec. 505. Loan guarantees.
TITLE VI—LOCAL HOMEOWNERSHIP INITIATIVES
Sec. 601. Reauthorization of Neighborhood Reinvestment Corporation.
Sec. 602. Income eligibility under CDBG to facilitate homeownership in high-
cost areas.
Sec. 603. Homeownership zones.
Sec. 604. Lease-to-own.
Sec. 605. Housing counseling.
Sec. 606. Local capacity building.
TITLE VII—MANUFACTURED HOUSING IMPROVEMENT
Sec. 701. Short title and references.
Sec. 702. Findings and purposes.
Sec. 703. Definitions.
Sec. 704. Federal manufactured home construction and safety standards.
Sec. 705. Abolishment of National Manufactured Home Advisory Council.
Sec. 706. Public information.
Sec. 707. Fees.
Sec. 708. Elimination of annual report requirement.
Sec. 709. Effective date.
Sec. 710. Savings provision.
TITLE VIII—INDIAN HOUSING HOMEOWNERSHIP
Sec. 801. Indian Lands Status Commission.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds that—
(1) the priorities of our Nation should include
expanding homeownership opportunities by providing
access to affordable housing that is safe, clean, and
healthy;
(2) our Nation has an abundance of conven-
tional capital sources available for homeownership fi-
nancing; and
(3) experience with local homeownership pro-
grams has shown that if flexible capital sources are
available, communities possess ample will and cre-
ativity to provide opportunities uniquely designed to
assist their citizens in realizing the American dream
of homeownership.
(b) PURPOSE.—It is the purpose of this Act—
(1) to encourage and facilitate homeownership
by families in the United States who are not other-
wise able to afford homeownership; and
(2) to expand homeownership through policies
that—
(A) promote the ability of the private sec-
tor to produce affordable housing without exces-
sive government regulation;
(B) encourage tax incentives, such as the
mortgage interest deduction, at all levels of gov-
ernment; and
(C) facilitate the availability of flexible
capital for homeownership opportunities.
TITLE 
I—REMOVAL 
OF 
BAR-
RIERS 
TO 
AFFORDABLE
HOUSING
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Affordable Housing
Barrier Removal Act of 1998’’.
SEC. 102. HOUSING IMPACT ANALYSIS.
(a) APPLICABILITY.—The requirements of this sec-
tion shall apply with respect to—
(1) any proposed rule, unless the head of the
agency promulgating the rule—
(A) has certified that the proposed rule
will not, if given force or effect as a final rule,
have a significant deleterious impact on the
availability of affordable housing; and
(B) has caused such certification to be
published in the Federal Register at the time of
publication of general notice of proposed rule-
making for the rule, together with a statement
providing the factual basis for the certification;
and
(2) any final rule, unless the head of the agency
promulgating the rule—
(A) has certified that the rule will not, if
given force or effect, have a significant delete-
rious impact on the availability of affordable
housing; and
(B) has caused such certification to be
published in the Federal Register at the time of
publication of the final rule, together with a
statement providing the factual basis for the
certification.
Any agency making a certification under this subsection
shall provide a copy of such certification and the state-
ment providing the factual basis for the certification to
the Secretary of Housing and Urban Development.
(b) STATEMENT
OF
PROPOSED
RULEMAKING.—
Whenever an agency publishes general notice of proposed
rulemaking for any proposed rule, the agency shall—
(1) in the notice of proposed rulemaking—
(A) state with particularity the text of the
proposed rule; and
(B) request any interested persons to sub-
mit to the agency any written data, views, and
arguments, and any specific alternatives to the
proposed rule that—
(i) accomplish the stated objectives of
the applicable statutes;
(ii) result in costs to the Federal Gov-
ernment not more than 5 percent higher
than such costs resulting from the pro-
posed rule; and
(iii) result in a quantity of affordable
housing that is 5 or more percent greater
than the quantity resulting from the pro-
posed rule;
(2) provide an opportunity for interested per-
sons to take the actions specified under paragraph
(1)(B) before promulgation of the final rule; and
(3) prepare and make available for public com-
ment an initial housing impact analysis in accord-
ance with the requirements of subsection (c).
(c) INITIAL HOUSING IMPACT ANALYSIS.—
(1) REQUIREMENTS.—Each initial housing im-
pact analysis shall describe the impact of the pro-
posed rule on the availability of affordable housing.
The initial housing impact analysis or a summary
shall be published in the Federal Register at the
same time as, and together with, the publication of
general notice of proposed rulemaking for the rule.
The agency shall transmit a copy of the initial hous-
ing impact analysis to the Secretary of Housing and
Urban Development.
(2) MONTHLY
HUD
LISTING.—On a monthly
basis, the Secretary of Housing and Urban Develop-
ment shall cause to be published in the Federal Reg-
ister, and shall make available through a World
Wide Web site of the Department, a listing of all
proposed rules for which an initial housing impact
analysis was prepared during the preceding month.
(3) CONTENTS.—Each initial housing impact
analysis required under this subsection shall con-
tain—
(A) a description of the reasons why action
by the agency is being considered;
(B) a succinct statement of the objectives
of, and legal basis for, the proposed rule;
(C) a description of and, where feasible, an
estimate of the extent to which the proposed
rule would impact the cost or supply of housing
or land; and
(D) an identification, to the extent prac-
ticable, of all relevant Federal rules which may
duplicate, overlap, or conflict with the proposed
rule.
(d) PROPOSAL OF LESS DELETERIOUS ALTERNATIVE
RULE.—
(1) ANALYSIS.—The agency publishing a gen-
eral notice of proposed rulemaking shall analyze any
specific alternatives to the proposed rule which have
been submitted to the agency pursuant to subsection
(b)(2) to determine whether any alternative to the
proposed rule—
(A) accomplishes the stated objectives of
the applicable statutes;
(B) results in costs to the Federal Govern-
ment not more than 5 percent higher than such
costs resulting from the proposed rule; and
(C) results in a quantity of affordable
housing that is 5 or more percent greater than
the quantity resulting from the proposed rule.
(2) 
NEW
NOTICE
OF
PROPOSED
RULE-
MAKING.—If the agency determines that an alter-
native to the proposed rule meets the requirements
under subparagraphs (A) through (C) of paragraph
(1), the agency shall publish a general notice of pro-
posed rulemaking for a proposed rule that accom-
plishes the stated objectives of the applicable stat-
utes, the text of which is based upon such alter-
native to the original proposed rule. In any case in
which the agency determines that more than one al-
ternative to the proposed rule meet such require-
ments, the new proposed rule contained in the gen-
eral notice of proposed rulemaking shall be based
upon the alternative that the agency determines is
most appropriate after considering the costs, effects
on affordable housing, and effectiveness in accom-
plishing the objective of the rule, of each such alter-
native. The rulemaking for the new proposed rule
shall be subject to the requirements under sub-
section (b).
(e) FINAL HOUSING IMPACT ANALYSIS.—
(1) REQUIREMENT.—Whenever an agency pro-
mulgates a final rule after publication of a general
notice of proposed rulemaking, the agency shall pre-
pare a final housing impact analysis.
(2) CONTENTS.—Each final housing impact
analysis shall contain—
(A) a succinct statement of the need for,
and objectives of, the rule;
(B) a summary of the significant issues
raised during the public comment period in re-
sponse to the initial housing impact analysis, a
summary of the assessment of the agency of
such issues, and a statement of any changes
made in the proposed rule as a result of such
comments; and
(C) a description of and an estimate of the
extent to which the rule will impact the avail-
ability of affordable housing or an explanation
of why no such estimate is available.
(3) AVAILABILITY.—The agency shall make
copies of the final housing impact analysis available
to members of the public and shall publish in the
Federal Register such analysis or a summary there-
of.
(f) AVOIDANCE OF DUPLICATIVE OR UNNECESSARY
ANALYSES.—
(1) DUPLICATION.—Any Federal agency may
perform the analyses required by subsections (c) and
(e) in conjunction with or as a part of any other
agenda or analysis required by any other law if such
other analysis satisfies the provisions of such sub-
sections.
(2) JOINDER.—In order to avoid duplicative ac-
tion, an agency may consider a series of closely re-
lated rules as one rule for the purposes of sub-
sections (c) and (e).
(g) PREPARATION OF ANALYSES.—In complying with
the provisions of subsections (c) and (e), an agency may
provide either a quantifiable or numerical description of
the effects of a proposed rule or alternatives to the pro-
posed rule, or more general descriptive statements if quan-
tification is not practicable or reliable.
(h) EFFECT ON OTHER LAW.—The requirements of
subsections (c) and (e) do not alter in any manner stand-
ards otherwise applicable by law to agency action.
(i) PROCEDURE FOR WAIVER OR DELAY OF COMPLE-
TION.—
(1) INITIAL HOUSING IMPACT ANALYSIS.—An
agency head may waive or delay the completion of
some or all of the requirements of subsection (c) by
publishing in the Federal Register, not later than
the date of publication of the final rule, a written
finding, with reasons therefor, that the final rule is
being promulgated in response to an emergency that
makes compliance or timely compliance with the pro-
visions of subsection (a) impracticable.
(2) FINAL
HOUSING
IMPACT
ANALYSIS.—An
agency head may not waive the requirements of sub-
section (e). An agency head may delay the comple-
tion of the requirements of subsection (e) for a pe-
riod of not more than 180 days after the date of
(iii) subchapter II of chapter 471 of
title 49, United States Code; or
(iv) sections 1884, 1891–1902, and
former section 1641(b)(2), of title 50, ap-
pendix, United States Code.
(3) FAMILIES.—The term ‘‘families’’ has the
meaning given such term in section 3 of the United
States Housing Act of 1937.
(4) RULE.—The term ‘‘rule’’ means any rule
for which the agency publishes a general notice of
proposed rulemaking pursuant to section 553(b) of
title 5, United States Code, or any other law, includ-
ing any rule of general applicability governing grants
by an agency to State and local governments for
which the agency provides an opportunity for notice
and public comment; except that such term does not
include a rule of particular applicability relating to
rates, wages, corporate or financial structures or re-
organizations thereof, prices, facilities, appliances,
services, or allowances therefor or to valuations,
costs or accounting, or practices relating to such
rates, wages, structures, prices, appliances, services,
or allowances.
(5) 
SIGNIFICANT.—The 
term 
‘‘significant’’
means, with respect to an impact on the availability
of affordable housing, a difference in quantity of 5
percent or more.
(k) DEVELOPMENT.—Not later than 120 days after
the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall develop model ini-
tial and final housing impact analyses under this section
and shall cause such model analyses to be published in
the Federal Register. The model analyses shall be de-
signed to provide examples to other agencies of how to
carry out and develop the analyses required under sub-
sections (a) and (c).
SEC. 103. GRANTS FOR REGULATORY BARRIER REMOVAL
STRATEGIES.
(a) AUTHORIZATION
OF
APPROPRIATIONS.—Sub-
section (a) of section 1204 of the Housing and Community
Development Act of 1992 (42 U.S.C. 12705c(a)) is
amended to read as follows:
‘‘(a) FUNDING.—There is authorized to be appro-
priated for grants under subsections (b) and (c)
$15,000,000 for fiscal year 1999 and each fiscal year
thereafter through fiscal year 2003.’’.
(b) APPLICATION AND SELECTION.—The last sen-
tence of section 1204(e) of the Housing and Community
Development Act of 1992 (42 U.S.C. 12705c(e)) is
amended by inserting before the period at the end the fol-
lowing: ‘‘and such criteria shall require that grant
amounts be used in a manner consistent with the strategy
contained in the comprehensive housing affordability
strategy for the jurisdiction pursuant to section 105(b)(4)
of the Cranston-Gonzalez National Affordable Housing
Act’’.
(c) TECHNICAL AMENDMENTS.—Section 107(a)(1) of
the Housing and Community Development Act of 1974
(42 U.S.C. 5307(a)(1)) is amended—
(1) in subparagraph (G), by inserting ‘‘and’’
after the semicolon at the end;
(2) by striking subparagraph (H); and
(3) by redesignating subparagraph (I) as sub-
paragraph (H).
SEC. 104. ELIGIBILITY FOR COMMUNITY DEVELOPMENT
BLOCK GRANTS.
Section 104(c)(1) of the Housing and Community
Development Act of 1974 (42 U.S.C. 5304(c)(1)) is
amended by inserting before the comma the following:
‘‘, which shall include making a good faith effort to carry
out the strategy established under section 105(b)(4) of
such Act by the unit of general local government to remove
barriers to affordable housing’’.
SEC. 105. REGULATORY BARRIERS CLEARINGHOUSE.
Section 1205 of the Housing and Community Devel-
opment Act of 1992 (42 U.S.C. 12705d) is amended—
(1) in subsection (a)—
(A) in the matter preceding paragraph (1),
by striking ‘‘receive, collect, process, and assem-
ble’’ and inserting ‘‘serve as a national reposi-
tory to receive, collect, process, assemble, and
disseminate’’;
(B) in paragraph (1)—
(i) by striking ‘‘, including’’ and in-
serting ‘‘(including’’; and
(ii) by inserting before the semicolon
at the end the following: ‘‘), and the preva-
lence and effects on affordable housing of
such laws, regulations, and policies’’;
(C) in paragraph (2), by inserting before
the semicolon the following: ‘‘, including par-
ticularly innovative or successful activities,
strategies, and plans’’; and
(D) in paragraph (3), by inserting before
the period at the end the following: ‘‘, including
particularly innovative or successful strategies,
activities, and plans’’;
(2) in subsection (b)—
(A) in paragraph (1), by striking ‘‘and’’ at
the end;
(B) in paragraph (2), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following new
paragraph:
‘‘(3) by making available through a World Wide
Web site of the Department, by electronic mail, or
otherwise, provide to each housing agency of a unit
of general local government that serves an area hav-
ing a population greater than 100,000, an index of
all State and local strategies and plans submitted
under subsection (a) to the clearinghouse, which—
‘‘(A) shall describe the types of barriers to
affordable housing that the strategy or plan
was designed to ameliorate or remove; and
‘‘(B) shall, not later than 30 days after
submission to the clearinghouse of any new
strategy or plan, be updated to include the new
strategy or plan submitted.’’; and
(3) by adding at the end the following new sub-
sections:
‘‘(c) ORGANIZATION.—The clearinghouse under this
section shall be established within the Office of Policy De-
velopment of the Department of Housing and Urban De-
velopment and shall be under the direction of the Assist-
ant Secretary for Policy Development and Research.
‘‘(d) TIMING.—The clearinghouse under this section
(as amended by section 105 of the Affordable Housing
Barrier Removal Act of 1998) shall be established and
commence carrying out the functions of the clearinghouse
under this section not later than 1 year after the date of
the enactment of such Act. The Secretary of Housing and
Urban Development may comply with the requirements
under this section by reestablishing the clearinghouse that
was originally established to comply with this section and
updating and improving such clearinghouse to the extent
necessary to comply with the requirements of this section
as in effect pursuant to the enactment of such Act.’’.
TITLE 
II—HOMEOWNERSHIP
THROUGH MORTGAGE INSUR-
ANCE AND LOAN GUARAN-
TEES
SEC. 201. ADJUSTABLE RATE MORTGAGES.
Section 251(c) of the National Housing Act (12
U.S.C. 1715z–16(c)) is amended—
(1) by striking ‘‘(c) The’’ and inserting ‘‘(c)(1)
Except as provided in paragraph (2), the’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2)(A) The Secretary may, upon submitting to the
Congress a written finding under subparagraph (B), in-
sure under this section in the fiscal year for which the
finding is submitted an aggregate number of mortgages
and loans not exceeding 40 percent of the aggregate num-
ber of mortgages and loans insured by the Secretary under
this title during the preceding fiscal year.
‘‘(B) A finding under this subparagraph is a finding
that the limitation under paragraph (1) on authority to
insure mortgages and loans during a fiscal year will be
reached before the end of that fiscal year and that an in-
crease in such limitation is necessary to meet the demand
for insurance under this section during the fiscal year.
‘‘(C) Notwithstanding any other provision of this Act,
the Secretary shall increase the mortgage insurance pre-
miums otherwise chargeable under this Act for mortgages
and loans insured pursuant to the authority under sub-
paragraph (A) by the amount that the Secretary deter-
mines is necessary to cover any additional risk involved
in providing such insurance.’’.
SEC. 202. HOME EQUITY CONVERSION MORTGAGES.
(a) PERMANENT MORTGAGE INSURANCE AUTHOR-
ITY.—Section 255(g) of the National Housing Act (12
U.S.C. 1715z–20(g)) is amended by striking the first 2
sentences.
(b) DOLLAR AMOUNT LIMITATION FOR INSURANCE
AUTHORITY.—Section 255(g) of the National Housing
Act (12 U.S.C. 1715z–20(g)), as amended by subsection
(a), is amended by inserting before the first sentence the
following new sentence: ‘‘The aggregate principal balance
of all mortgages insured under this section and outstand-
ing at any one time shall not exceed $5,000,000,000.’’.
(c) OTHER
APPROACHES
TO
CONSUMER
EDU-
CATION.—The Secretary of Housing and Urban Develop-
ment shall consult with consumer groups, industry rep-
resentatives, representatives of counseling organizations,
and other interested parties to identify alternative ap-
proaches to providing consumer information required by
section 255(f) of the National Housing Act that may be
feasible and desirable for home equity conversion mort-
gages insured under such section 255 and other types of
reverse mortgages. The Secretary may, in lieu of providing
the consumer education required by such section 255(f),
adopt alternative approaches to consumer education that
may be developed as a result of such consultations, but
only if the alternative approaches provide all of the infor-
mation specified in section 255(f).
(d) FUNDING
FOR COUNSELING
AND CONSUMER
EDUCATION
AND OUTREACH.—Of any amounts made
available for any of fiscal years 1999 through 2003 for
housing counseling under section 106 of the Housing and
Urban Development Act of 1968, up to a total of
$1,000,000 shall be available to the Secretary in each such
fiscal year, in such amounts as the Secretary determines
appropriate, for the following purposes in connection with
home equity conversion mortgages insured under section
255 of the National Housing Act:
(1) For housing counseling authorized by sec-
tion 106 of the Housing and Urban Development
Act of 1968.
(2) For transfer to the departmental salaries
and expenses account for consumer education and
outreach activities.
(e) CONFORMING AMENDMENTS.—Section 255 of the
National Housing Act (12 U.S.C. 1715z–20) is amend-
ed—
(1) in the section heading, by striking ‘‘DEM-
ONSTRATION PROGRAM OF’’;
(2) in subsections (a) and (i)(1) by striking
‘‘demonstration’’ each place it appears;
(3) in subsection (a)—
(A) in paragraph (1), by inserting ‘‘and’’
after the semicolon at the end;
(B) in paragraph (2), by striking ‘‘; and’’
at the end and inserting a period; and
(C) by striking paragraph (3); and
(4) by striking subsection (k).
(f) DISCLOSURE REQUIREMENTS AND PROHIBITION
OF FUNDING OF UNNECESSARY OR EXCESSIVE COSTS.—
(1) IN GENERAL.—Section 255(d) of the Na-
tional Housing Act (12 U.S.C. 1715z–20(d)) is
amended—
(A) in paragraph (2)—
(i) in subparagraph (B), by striking
‘‘and’’ at the end;
(ii) by redesignating subparagraph
(C) as subparagraph (D); and
(iii) by inserting after subparagraph
(B) the following:
‘‘(C) has received full disclosure of all costs
to the mortgagor for obtaining the mortgage,
including any costs of estate planning, financial
advice, or other related services; and’’;
(B) in paragraph (9)(F), by striking
‘‘and’’;
(C) in paragraph (10), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(D) by adding at the end the following:
‘‘(11) have been made with such restrictions as
the Secretary determines to be appropriate to ensure
that the mortgagor does not fund any unnecessary
or excessive costs for obtaining the mortgage, includ-
ing any costs of estate planning, financial advice, or
other related services.’’.
(2) IMPLEMENTATION.—
(A) NOTICE.—The Secretary of Housing
and Urban Development shall, by interim no-
tice, implement the amendments made by para-
graph (1) in an expeditious manner, as deter-
mined by the Secretary. Such notice shall not
be effective after the date of the effectiveness of
the final regulations issued under subparagraph
(B) of this paragraph.
(B) REGULATIONS.—The Secretary shall,
not later than the expiration of the 90-day pe-
riod beginning on the date of the enactment of
this Act, issue final regulations to implement
the amendments made by paragraph (1). Such
regulations shall be issued only after notice and
opportunity for public comment pursuant to the
provisions of section 553 of title 5, United
States Code (notwithstanding subsections (a)(2)
and (b)(3)(B) of such section).
SEC. 203. INSPECTIONS UNDER SINGLE FAMILY HOUSING
MORTGAGE INSURANCE PROGRAM.
(a) INSPECTION REQUIREMENT.—Section 203 of the
National Housing Act (12 U.S.C. 1709) is amended by
inserting after subsection (k) the following new subsection:
‘‘(l) INSPECTIONS AND REPAIRS.—
‘‘(1) IN
GENERAL.—The Secretary may not,
under any provision of this section, insure or enter
into any commitment to insure a mortgage covering
a 1- to 4-family residence that was constructed more
than 1 year before the date of the application for
mortgage insurance unless the Secretary determines
that—
‘‘(A) the prospective mortgagor has ob-
tained a property inspection of the property
that will be subject to the mortgage, in accord-
ance with paragraph (2);
‘‘(B) the contract providing for sale or
transfer of the property created, on the part of
the prospective mortgagor, a unilateral right to
rescind the contract or condition the sale or
offer upon the completion of repairs to the
property, for a period of not less than 72 hours
beginning upon the completion of the inspec-
tion; and
‘‘(C) the rights referred to in subpara-
graph (B) were not waived, limited, or other-
wise impaired in any manner before the comple-
tion of the period referred to in such subpara-
graph.
‘‘(2) PROPERTY INSPECTION.—A property in-
spection in accordance with this subsection for a res-
idence is an inspection that—
‘‘(A) examines the condition of the physical
structure and systems of the residence, includ-
ing any heating, air conditioning, and interior
plumbing electrical systems, the roof, attic, vis-
ual insulation, walls, ceilings, floors, windows,
doors, foundation, basement, and other visible
structure;
‘‘(B) provides to the prospective mortgagor
a written report that describes the results of
the examination; and
‘‘(C) is conducted in accordance with the
guidelines established under paragraph (3) by
an inspector who is selected by the prospective
mortgagor from among inspectors certified in
accordance with such guidelines as qualified to
conduct such inspections.
‘‘(3) GUIDELINES.—The Secretary shall issue
guidelines providing for conducting of inspections
under this subsection, which shall provide—
‘‘(A) that inspections shall be performed in
accordance with the Standards of Practice and
Code of Ethics of the American Society of
Home Inspectors or such other generally ac-
cepted standards for home inspections that the
Secretary determines provide equivalent or
greater assurance to the homebuyer that the in-
spections will be performed thoroughly and im-
partially; and
‘‘(B) for the Secretary to certify inspectors
as qualified to conduct inspections under this
subsection based upon demonstrated com-
petence and periodic reviews of professional
conduct, and to make widely publicly available
(including through posting on the World Wide
Web site of the Department) lists of certified
inspectors.’’.
(b) FINANCING INSPECTION COSTS.—
(1) The National Housing Act is amended by
inserting ‘‘, except that the amount included because
of a property inspection pursuant to subsection (l)
may not exceed the maximum amount (not to exceed
$300), which shall be established by the Secretary’’
in each of the following places:
(A) In section 203 (12 U.S.C. 1709)—
(i) in subsection (b)(2), in the matter
preceding subparagraph (A), after ‘‘ap-
prove’’;
(ii) in subsection (b)(2), in the first
sentence of the penultimate undesignated
paragraph, after ‘‘approve’’;
(iii) in subsection (b)(2), in the first
sentence of the last undesignated para-
graph, after ‘‘approve’’; and
(iv) in subsection (k)(3)(A), after ‘‘ap-
prove’’.
(B) In section 220(d)(3)(A)(i) (12 U.S.C.
1715k(d)(3)(A)(i)), after ‘‘approve’’.
(C) In section 221(d)(2) (12 U.S.C.
1715l(d)(2)), after ‘‘approve’’.
(D) In section 221(i)(2)(A)(ii) (12 U.S.C.
1715l(i)(2)(A)(ii)), after ‘‘approve’’.
(E) In section 237(c)(2) (12 U.S.C.
1715z–2(c)(2)), after ‘‘approve’’.
(2) The last sentence of the penultimate undes-
ignated paragraph of section 203(b)(2) of the Na-
tional Housing Act (12 U.S.C. 1709(b)(2)) is
amended by inserting ‘‘, except to the extent that
this section specifically provides for limitation by
percentage or amount’’ before the period at the end.
(3) Section 203(b)(10)(B) of the National
Housing Act (12 U.S.C. 1709(b)(10)(B)) is amend-
ed by inserting after ‘‘approve’’ the following: ‘‘, ex-
cept that the amount approved for property inspec-
tion pursuant to subsection (l) shall be the maxi-
mum amount (not to exceed $300) for such inspec-
tion as established by the Secretary’’.
(c) INSPECTION REQUIREMENT UNDER VARIOUS
SINGLE FAMILY PROGRAMS.—The National Housing Act
is amended—
(1) 
in 
section 
222(b)(1) 
(12 
U.S.C.
1715m(b)(1)), by inserting before the semicolon the
following: ‘‘, and meet the requirements of section
203(l)’’;
(2) in section 234(c) (12 U.S.C. 1715y(c)), by
inserting before ‘‘and (2)’’ the following: ‘‘, and
meets the requirements of section 203(l)’’; and
(3) in section 809(c) (12 U.S.C. 1748h–1(c)),
by striking ‘‘section 203(b)’’ and inserting the fol-
lowing: ‘‘subsections (b) and (l) of section 203’’.
SEC. 204. DEFINITION OF AREA.
Section 203(b)(2) of the National Housing Act (12
U.S.C. 1709(b)(2)) is amended, in the first sentence after
subparagraph (B), by inserting before the period the fol-
lowing: ‘‘; except that the Secretary may provide that any
county or statistical area, together with any counties con-
tiguous or proximate to such county or statistical area,
be treated as a single area for purposes of the preceding
sentence’’.
SEC. 205. RURAL HOUSING GUARANTEED LOANS.
Section 502(h)(6)(C) of the Housing Act of 1949 (42
U.S.C. 1472(h)(6)(C)) is amended by striking ‘‘, subject
to the maximum dollar amount limitation of section
203(b)(2) of the National Housing Act’’ each place it ap-
pears.
TITLE 
III—ASSISTANCE 
FOR
SELF-HELP HOUSING PROVID-
ERS
SEC. 301. EXTENDED PERIOD OF USE OF FUNDS.
Section 11 of the Housing Opportunity Program Ex-
tension Act of 1996 (42 U.S.C. 12805 note) is amended
by inserting ‘‘(or, in the case of grant amounts from
amounts made available for fiscal year 1996 to carry out
this section, within 36 months)’’ in each of the following
places:
(1) In subsection (i)(5), before the comma.
(2) In subsection (j), before the second comma.
SEC. 302. AUTHORIZATION OF APPROPRIATIONS.
Section 11 of the Housing Opportunity Program Ex-
tension Act of 1996 (42 U.S.C. 12805 note) is amended
by adding at the end the following new subsection:
‘‘(q) AUTHORIZATION
OF
APPROPRIATIONS.—To
carry out this section, there are authorized to be appro-
priated for fiscal year 1999 such sums as may be nec-
essary.’’.
TITLE IV—SECTION 8
HOMEOWNERSHIP OPTION
SEC. 401. PROGRAM FLEXIBILITY.
Section 8(y) of the United States Housing Act of
1937 (42 U.S.C. 1437f(y)) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘A family receiving’’ and
all that follows through ‘‘if the family’’ and in-
serting the following: ‘‘A public housing agency
providing tenant-based assistance on behalf of
an eligible family under this section may pro-
vide assistance for an eligible family that pur-
chases a dwelling unit (including a unit under
a lease-purchase agreement) that will be owned
by 1 or more members of the family, and will
be occupied by the family, if the family’’;
(B) in subparagraph (A), by inserting be-
fore the semicolon ‘‘, or owns or is acquiring
shares in a cooperative’’; and
(C) in subparagraph (B)—
(i) by striking ‘‘(i) participates’’ and
all that follows through ‘‘(ii)’’; and
(ii) by inserting ‘‘, except that the
Secretary may provide for the consider-
ation of public assistance in the case of an
elderly family or a disabled family’’ after
‘‘other than public assistance’’;
(2) by striking paragraphs (2), (3), and (4) and
inserting the following new paragraphs:
‘‘(2) DETERMINATION OF AMOUNT OF ASSIST-
ANCE.—
‘‘(A) MONTHLY
EXPENSES
DO
NOT
EX-
CEED
PAYMENT
STANDARD.—If the monthly
homeownership expenses, as determined in ac-
cordance 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 ad-
justed income of the family.
‘‘(ii) 10 percent of the monthly in-
come of the family.
‘‘(iii) If the family is receiving pay-
ments for welfare assistance from a public
agency, and a portion of those payments,
adjusted in accordance with the actual
housing costs of the family, is specifically
designated by that agency to meet the
housing costs of the family, the portion of
those payments that is so designated.
‘‘(B) MONTHLY EXPENSES EXCEED PAY-
MENT STANDARD.—If the monthly homeowner-
ship expenses, as determined in accordance with
requirements established by the Secretary, ex-
ceed the payment standard, the monthly assist-
ance payment shall be the amount by which the
applicable payment standard exceeds the high-
est of the 3 amounts, rounded to the nearest
dollar, under clauses (i), (ii), and (iii) of sub-
paragraph (A).
‘‘(3) INSPECTIONS
AND
CONTRACT
CONDI-
TIONS.—
‘‘(A) IN GENERAL.—Each contract for the
purchase of a unit to be assisted under this sec-
tion shall—
‘‘(i) provide for pre-purchase inspec-
tion of the unit by an independent profes-
sional; and
‘‘(ii) require that any cost of nec-
essary repairs be paid by the seller.
‘‘(B) ANNUAL
INSPECTIONS
NOT
RE-
QUIRED.—The requirement under subsection
(o)(5)(B) for annual inspections shall not apply
to units assisted under this section.
‘‘(4) OTHER AUTHORITY OF THE SECRETARY.—
The Secretary may—
‘‘(A) limit the term of assistance for a
family assisted under this subsection; and
‘‘(B) modify the requirements of this sub-
section as the Secretary determines to be nec-
essary to make appropriate adaptations for
lease-purchase agreements.’’;
(3) by striking paragraph (5); and
(4) by redesignating paragraphs (6) and (7) as
paragraphs (5) and (6), respectively.
SEC. 402. DOWNPAYMENT ASSISTANCE.
Section 8(y) of the United States Housing Act of
1937 (42 U.S.C. 1437f(y)), as amended by section 401
of this Act, is amended by inserting after paragraph (6)
the following new paragraph:
‘‘(7) DOWNPAYMENT ASSISTANCE.—
‘‘(A) AUTHORITY.—A public housing agen-
cy may, in lieu of providing monthly assistance
payments under this subsection on behalf of a
family eligible for such assistance and at the
discretion of the public housing agency, provide
assistance 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.
‘‘(B) AMOUNT.—The amount of a down-
payment grant on behalf of an assisted family
may not exceed the amount that is equal to 3
times the sum of the assistance payments that
would be made during the first year of assist-
ance on behalf of the family, based upon the in-
come of the family at the time the grant is to
be made.’’.
TITLE V—HOME INVESTMENT
PARTNERSHIPS PROGRAM
SEC. 501. REAUTHORIZATION.
Section 205 of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 12724) is amended to
read as follows:
‘‘SEC. 205. AUTHORIZATION.
‘‘(a) IN GENERAL.—There are authorized to be ap-
propriated to carry out this title $1,500,000,000 for each
of fiscal years 1999 through 2003, of which—
‘‘(1) not more than $25,000,000 in each such
fiscal year shall be for community housing partner-
ship activities authorized under section 233; and
‘‘(2) not more than $15,000,000 in each such
fiscal year shall be for activities in support of State
and local housing strategies authorized under sub-
title C.
‘‘(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) 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.’’.
SEC. 502. INCOME ELIGIBILITY TO FACILITATE HOME-
OWNERSHIP IN HIGH COST AREAS.
(a) HOME INVESTMENT PARTNERSHIPS.—The Cran-
ston-Gonzalez National Affordable Housing Act is amend-
ed as follows:
(1) DEFINITIONS.—In section 104(10) (42
U.S.C. 12704(10))—
(A) by striking ‘‘income ceilings higher or
lower’’ and inserting ‘‘an income ceiling high-
er’’;
(B) by striking ‘‘variations are’’ and in-
serting ‘‘variation is’’; and
(C) by striking ‘‘high or’’.
(2) INCOME TARGETING.—In section 214(1)(A)
(42 U.S.C. 12744(1)(A))—
(A) by striking ‘‘income ceilings higher or
lower’’ and inserting ‘‘an income ceiling high-
er’’;
(B) by striking ‘‘variations are’’ and in-
serting ‘‘variation is’’; and
(C) by striking ‘‘high or’’.
(3) LIMITATIONS.—In section 215(a)(1)(A) (42
U.S.C. 12745(a)(1)(A))—
able, restricts income eligibility of purchasers of
membership shares of stock in the cooperative cor-
poration 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
Internal 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; and
‘‘(D) provides that eligible families who
purchase membership interests in the associa-
tion 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
housing to participate in the ongoing manage-
ment 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
participating jurisdiction to be housing for homeownership
for purposes of this title to the extent that ownership or
membership in such a cooperative or association, respec-
tively, 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, respec-
tively, constitutes rental of a dwelling under State or
local laws.’’.
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.—Sec-
tion 218(e) of the Cranston-Gonzalez National Affordable
Housing 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 participat-
ing jurisdiction that withdraws Trust Fund amounts
for investment in the form of an advance for re-
serves 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
available to a participating jurisdiction under this
title are not placed under binding commitment to af-
fordable 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 jurisdiction’s right to draw such funds from the
HOME Investment Trust Fund shall expire. The
Secretary shall reduce the line of credit in the par-
ticipating jurisdiction’s HOME Investment Trust
Fund by the expiring amount and shall reallocate
the funds by formula in accordance with section
217(d).
‘‘(2) LOAN POOLS.—In the case of a participat-
ing jurisdiction that withdraws Trust Fund amounts
for investment in the manner provided under sub-
section (e)(2), the amounts shall be considered to be
placed under binding commitment to affordable
housing for purposes of paragraph (1) of this sub-
section at the time that the amounts are obligated
for use under, and are subject to, a written agree-
ment described in subsection (e)(2)(B).’’.
(d) TREATMENT OF MIXED INCOME LOAN POOLS AS
AFFORDABLE HOUSING.—
(1) IN GENERAL.—Section 215 of the Cran-
ston-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 subsection (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 home-
ownership—
‘‘(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 at the time
of purchase;
‘‘(ii) all are principal residences of
owners whose families qualify as moderate-
income families at the time of purchase;
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