I 
110TH CONGRESS 
2D SESSION 
H. R. 5678 
To provide economic stimulus through emergency community development 
block grant assistance for the redevelopment of abandoned and foreclosed 
homes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 2, 2008 
Ms. WATERS introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on the 
Budget, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To provide economic stimulus through emergency community 
development block grant assistance for the redevelopment 
of abandoned and foreclosed homes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Neighborhood Rescue 
and Stabilization Act of 2008’’. 
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SEC. 2. EMERGENCY ASSISTANCE FOR THE REDEVELOP-
MENT OF ABANDONED AND FORECLOSED 
HOMES. 
(a) DIRECT APPROPRIATIONS.—There is authorized 
to be appropriated for fiscal year 2008, $10,000,000,000, 
to remain available until expended, for assistance to 
States, qualified metropolitan cities, and units of general 
local government for the redevelopment of abandoned and 
foreclosed homes. 
(b) ALLOCATION OF APPROPRIATED AMOUNTS.— 
(1) ALLOCATION BY HUD FOR STATES.—Any 
amounts appropriated or otherwise made available 
pursuant to this section shall be allocated by the 
Secretary of Housing and Urban Development 
among the States, and provided to the States, in 
amounts determined according to the funding for-
mula established pursuant to paragraph (2). 
(2) 
FORMULA
FOR
ALLOCATION
AMONG 
STATES.— 
(A) ESTABLISHMENT.—Not later than 60 
days after the date of the enactment of this 
Act, the Secretary shall establish a funding for-
mula under this paragraph. 
(B) 
CRITERIA.—The 
funding 
formula 
under this paragraph shall provide that, of the 
aggregate amount appropriated or otherwise 
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made available pursuant to this section, the 
amount allocated for each State shall be the 
amount that bears the same ratio to such ag-
gregate amount as the number of foreclosures 
on mortgages for homes occurring in such State 
during the most recently completed two cal-
endar quarters for which such information is 
available, as determined by the Secretary, bears 
to the aggregate number of such foreclosures 
occurring in all States during such calendar 
quarters, as such amount is adjusted to account 
for differences in the States in— 
(i) the number and percentage of 
homes in a State that are financed by a 
subprime mortgage related loan; 
(ii) the number and percentage of 
homes in a State in default or delinquency; 
and 
(iii) the median home price in a State. 
(3) DISTRIBUTION.—Amounts appropriated or 
otherwise made available under this section shall be 
distributed to the States according to the funding 
formula required under paragraph (2) not later than 
30 days after the establishment of such formula. 
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(4) ALLOCATION
BY
STATES
FOR
QUALIFIED 
METROPOLITAN CITIES.— 
(A) REQUIREMENT TO ALLOCATE.—Of any 
amounts allocated pursuant to this subsection 
for a State, such State shall allocate for each 
qualified metropolitan city located in such State 
an amount, as determined according to the 
funding formula established pursuant to sub-
paragraph (B). 
(B) FORMULA
FOR
ALLOCATION
AMONG 
STATES.— 
(i) ESTABLISHMENT.—Not later than 
60 days after the date of the enactment of 
this Act, the Secretary shall establish a 
funding formula under this subparagraph. 
(ii) CRITERIA.—The funding formula 
under this subparagraph shall provide that, 
of the aggregate amount allocated pursu-
ant to this subsection for a State, the 
amount allocated for a qualified metropoli-
tan city located in the State shall be the 
amount that bears the same ratio to such 
aggregate amount as the number of fore-
closures on mortgages for homes occurring 
in such qualified metropolitan city during 
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the most recently completed two calendar 
quarters for which such information is 
available, as determined by the Secretary, 
bears to the aggregate number of such 
foreclosures occurring in such State during 
such calendar quarters, as such amount is 
adjusted to account for differences between 
the qualified metropolitan city in and State 
in— 
(I) the percentage of homes that 
are financed by a subprime mortgage 
related loan; 
(II) the percentage of homes in 
default or delinquency; and 
(III) the median home price. 
(5) OTHER AMOUNTS.—Any amounts allocated 
for a State that are not allocated for a qualified 
metropolitan city pursuant to paragraph (4) may be 
used for any units of general local government in the 
State. 
(c) USE OF FUNDS.— 
(1) IN GENERAL.—Any State, qualified metro-
politan city, or unit of general local government that 
receives amounts pursuant to this section shall, not 
later than 18 months after the receipt of such 
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amounts, use such amounts to redevelop abandoned 
and foreclosed homes. 
(2) PRIORITY.—Any State, qualified metropoli-
tan city, or unit of general local government that re-
ceives amounts pursuant to this section shall in dis-
tributing such amounts give priority emphasis and 
consideration to those metropolitan areas, metropoli-
tan cities, urban areas, rural areas, low- and mod-
erate-income areas, and other areas with the great-
est need, including those— 
(A) with the greatest percentage of home 
foreclosures; 
(B) with the highest percentage of homes 
financed by a subprime mortgage related loan; 
or 
(C) identified by the State, qualified met-
ropolitan city, or unit of general local govern-
ment as likely to face a significant rise in the 
rate of home foreclosures. 
(3) ELIGIBLE USES.— 
(A) IN GENERAL.—Amounts made avail-
able under this section may be used only as fol-
lows: 
(i) FINANCIAL ASSISTANCE THROUGH 
INSTITUTIONS
AND
ORGANIZATIONS.—To 
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make grants, loans, and other financing 
mechanisms to community development fi-
nancial institutions (as such term is de-
fined under section 103(5) of the Commu-
nity Development Banking and Financial 
Institutions Act of 1994 (12 U.S.C. 
4702(5))), national intermediaries, and 
nonprofit housing or community develop-
ment organizations and others to purchase 
and rehabilitate homes that have been 
abandoned or foreclosed upon, in order to 
sell, rent, or redevelop such homes. 
(ii) FINANCING MECHANISMS FOR RE-
DEVELOPMENT.—To establish financing 
mechanisms for redevelopment of fore-
closed upon homes, including such mecha-
nisms as soft-seconds, loan loss reserves, 
and shared-equity loans for low- and mod-
erate-income homebuyers. 
(iii) PURCHASE AND REHABILITATION 
FOR SALE OR RENTAL.—To purchase and 
rehabilitate homes that have been aban-
doned or foreclosed upon, in order to sell, 
rent, or redevelop such homes. 
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(iv) LAND BANKS.—To establish land 
banks for homes that have been foreclosed 
upon. 
(v) 
DEMOLITION.—To 
demolish 
blighted structures. 
(vi) PROJECT-BASED RENTAL ASSIST-
ANCE.—To provide rental assistance for 
low- and moderate-income persons (as such 
term is defined in section 102 of the Hous-
ing and Community Development Act of 
1974 (42 U.S.C. 5302)) that is attached to 
single family and multifamily residences. 
(vii) 
PROJECT
OPERATING
RE-
SERVES.—To provide grants for use to 
cover the loss of rental assistance or in 
conjunction with a project loan that is at-
tached to single family and multifamily 
residences. 
(viii) 
PROJECT
OPERATING
SUB-
SIDIES.—To fund project operating ac-
counts used to cover net operating income 
shortfalls for single and multifamily resi-
dences. Eligible operating costs shall in-
clude costs of management, taxes, han-
dling, insurance, and other related costs. 
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(ix) CDBG-ELIGIBLE
ACTIVITIES.— 
To carry out any activities that, under sec-
tion 105 of the Housing and Community 
Development Act of 1974 (42 U.S.C. 
5305), are eligible to be carried out with 
amounts provided under title I of such Act. 
(B) LIMITATION.—Any funds used under 
this section for the purchase of an abandoned 
or foreclosed upon home shall be at a cost equal 
to or less than the appraised value of the home 
based on the most up-to-date appraisal, as such 
appraisal is defined by the Secretary. 
(d) RULE
OF
CONSTRUCTION.—Amounts appro-
priated or otherwise made available to States, qualified 
metropolitan cities, and units of general local government 
under this section shall be treated as though such funds 
were community development block grant funds under title 
I of the Housing and Community Development Act of 
1974. 
(e) WAIVER AUTHORITY.— 
(1) 
IN
GENERAL.—In 
administering 
any 
amounts appropriated or otherwise made available 
under this section, the Secretary may waive, or 
specify alternative requirements for, any provision of 
any statute or regulation that the Secretary admin-
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isters (but not including the requirements of this 
section) in connection with the obligation by the Sec-
retary or the use by the recipient of such funds (ex-
cept for requirements related to fair housing, non-
discrimination, labor standards, and the environ-
ment), in order to expedite or facilitate the use of 
such funds. 
(2) LOW
AND
MODERATE
INCOME
REQUIRE-
MENT.—Notwithstanding the authority of the Sec-
retary under paragraph (1)— 
(A) all of the funds appropriated or other-
wise made available under this section shall be 
used with respect to persons whose incomes do 
not exceed 120 percent of area median income; 
and 
(B) not less than 25 percent of the funds 
made available under this section to any State, 
qualified metropolitan city, or unit of general 
local government shall be used with respect to 
persons whose incomes do not exceed 30 per-
cent of the area median income. 
(f) DEFINITIONS.—For purposes of this Act, the fol-
lowing definitions shall apply: 
(1) QUALIFIED
METROPOLITAN
CITY.—The 
term ‘‘qualified metropolitan city’’ means a metro-
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politan city, as such term is defined in section 102 
of the Housing and Community Development Act of 
1974 (42 U.S.C. 5302), that has a population of not 
less than 200,000, as determined by the 2000 decen-
nial census. 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(3) STATE; UNIT OF GENERAL LOCAL GOVERN-
MENT.—The terms ‘‘State’’ and ‘‘unit of general 
local government’’ have the meanings given such 
terms in section 102 of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5302). 
(g) EMERGENCY DESIGNATION.—The amounts ap-
propriated under this title are designated as an emergency 
requirement and necessary to meet emergency needs pur-
suant to section 204 of S . Con. Res. 21 (110th Congress), 
the concurrent resolution on the budget for fiscal year 
2008. 
Æ 
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