IIB
106TH CONGRESS
2D SESSION
H. R. 1776
IN THE SENATE OF THE UNITED STATES
APRIL 7, 2000
Received; read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
AN ACT
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 and Economic Opportunity
Act of 2000’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
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Sec. 1. Short title and table of contents.
Sec. 2. Findings and purpose.
TITLE I—REMOVAL OF BARRIERS TO HOUSING AFFORDABILITY
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. Extension of loan term for manufactured home lots.
Sec. 202. Downpayment simplification.
Sec. 203. Reduced downpayment requirements for loans for teachers and uni-
formed municipal employees.
Sec. 204. Preventing fraud in rehabilitation loan program.
Sec. 205. Community partners next door program.
Sec. 206. Risk-sharing demonstration.
Sec. 207. Hybrid ARMs.
Sec. 208. Home equity conversion mortgages.
Sec. 209. Law enforcement officer homeownership pilot program.
Sec. 210. Study of mandatory inspection requirement under single family hous-
ing mortgage insurance program.
Sec. 211. Report on title I home improvement loan program.
Sec. 212. Sense of the Congress regarding making properties available for
homeownership programs.
Sec. 213. Property improvement loan limit for single-family homes.
TITLE III—SECTION 8 HOMEOWNERSHIP OPTION
Sec. 301. Downpayment assistance.
Sec. 302. Pilot program for homeownership assistance for disabled families.
Sec. 303. Funding for pilot programs.
TITLE IV—COMMUNITY DEVELOPMENT BLOCK GRANTS
Sec. 401. Reauthorization.
Sec. 402. Prohibition of set-asides.
Sec. 403. Public services cap.
Sec. 404. Homeownership for municipal employees.
Sec. 405. Technical amendment relating to brownfields.
Sec. 406. Income eligibility.
Sec. 407. Housing opportunities for persons with AIDS.
Sec. 408. Prohibition on use of amounts to acquire church property.
Sec. 409. CDBG special purpose grants.
TITLE V—HOME INVESTMENT PARTNERSHIPS PROGRAM
Sec. 501. Reauthorization.
Sec. 502. Eligibility of limited equity cooperatives and mutual housing associa-
tions.
Sec. 503. Administrative costs.
Sec. 504. Leveraging affordable housing investment through local loan pools.
Sec. 505. Homeownership for municipal employees.
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Sec. 506. Use of section 8 assistance by ‘‘grand-families’’ to rent dwelling units
in assisted projects.
Sec. 507. Loan guarantees.
Sec. 508. Downpayment assistance for 2- and 3-family residences.
TITLE VI—LOCAL HOMEOWNERSHIP INITIATIVES
Sec. 601. Reauthorization of Neighborhood Reinvestment Corporation.
Sec. 602. Homeownership zones.
Sec. 603. Lease-to-own.
Sec. 604. Local capacity building.
Sec. 605. Consolidated application and planning requirement and super-NOFA.
Sec. 606. Assistance for self-help housing providers.
Sec. 607. Housing counseling organizations.
Sec. 608. Community lead information centers and lead-safe housing.
Sec. 609. Grant eligibility of community organizations.
TITLE VII—NATIVE AMERICAN HOMEOWNERSHIP
Subtitle A—Native American Housing
Sec. 701. Lands title report commission.
Sec. 702. Loan guarantees.
Sec. 703. Native American housing assistance.
Subtitle B—Native Hawaiian Housing
Sec. 721. Short title.
Sec. 722. Findings.
Sec. 723. Housing assistance.
Sec. 724. Loan guarantees.
TITLE VIII—TRANSFER OF HUD-HELD HOUSING TO LOCAL
GOVERNMENTS AND NONPROFIT ORGANIZATIONS
Sec. 801. Transfer of unoccupied and substandard HUD-held housing to local
governments and community development corporations.
Sec. 802. Transfer of HUD assets in revitalization areas.
TITLE IX—PRIVATE MORTGAGE INSURANCE CANCELLATION AND
TERMINATION
Sec. 901. Short title.
Sec. 902. Changes in amortization schedule.
Sec. 903. Deletion of ambiguous references to residential mortgages.
Sec. 904. Cancellation rights after cancellation date.
Sec. 905. Clarification of cancellation and termination issues and lender paid
mortgage insurance disclosure requirements.
Sec. 906. Definitions.
TITLE X—RURAL HOUSING HOMEOWNERSHIP
Sec. 1001. Promissory note requirement under housing repair loan program.
Sec. 1002. Limited partnership eligibility for farm labor housing loans.
Sec. 1003. Project accounting records and practices.
Sec. 1004. Definition of rural area.
Sec. 1005. Operating assistance for migrant farmworkers projects.
Sec. 1006. Multifamily rental housing loan guarantee program.
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Sec. 1007. Enforcement provisions.
Sec. 1008. Amendments to title 18 of United States Code.
TITLE XI—MANUFACTURED HOUSING IMPROVEMENT
Sec. 1101. Short title and references.
Sec. 1102. Findings and purposes.
Sec. 1103. Definitions.
Sec. 1104. Federal manufactured home construction and safety standards.
Sec. 1105. Abolishment of National Manufactured Home Advisory Council;
manufactured home installation.
Sec. 1106. Public information.
Sec. 1107. Research, testing, development, and training.
Sec. 1108. Prohibited acts.
Sec. 1109. Dispute resolution.
Sec. 1110. Elimination of annual report requirement.
Sec. 1111. Effective date.
Sec. 1112. Savings provision.
TITLE XII—PUBLIC AND ASSISTED HOUSING DRUG ELIMINATION
PROGRAM
Sec. 1201. Eligible public housing agencies.
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;
(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; and
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(4) each consumer should be afforded every rea-
sonable opportunity to access mortgage credit, to ob-
tain the lowest cost mortgages for which the con-
sumer can qualify, to know the true cost of the
mortgage, to be free of regulatory burdens, and to
know what factors underlie a lender’s decision re-
garding the consumer’s mortgage.
(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 and
provide local governments with increased flexi-
bility under existing Federal programs to facili-
tate homeownership.
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TITLE 
I—REMOVAL 
OF 
BAR-
RIERS TO HOUSING AFFORD-
ABILITY
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Housing Affordability
Barrier Removal Act of 2000’’.
SEC. 102. HOUSING IMPACT ANALYSIS.
(a) APPLICABILITY.—Except as provided in sub-
section (b), the requirements of this section shall apply
with respect to—
(1) any proposed rule, unless the agency pro-
mulgating 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 housing
affordability; 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 agency promul-
gating the rule—
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(A) has certified that the rule will not, if
given force or effect, have a significant delete-
rious impact on housing affordability; 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) EXCEPTION FOR CERTAIN BANKING RULES.—
The requirements of this section shall not apply to any
proposed or final rule relating to—
(1) the operations, safety, or soundness of—
(A) federally insured depository institu-
tions or any affiliate of such an institution (as
such term is defined in section 2(k) of the Bank
Holding Company Act of 1956 (12 U.S.C.
1841(k));
(B) credit unions;
(C) the Federal home loan banks;
(D) the enterprises (as such term is de-
fined in section 1303 of the Housing and Com-
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munity Development Act of 1992 (12 U.S.C.
4502);
(E) a Farm Credit System institution; or
(F) foreign banks or their branches, agen-
cies, commercial lending companies, or rep-
resentative offices that operate in the United
States, or any affiliate of a foreign bank (as
such terms are defined in section 1 of the Inter-
national Banking Act of 1978 (12 U.S.C.
3101); or
(2) the payments system or the protection of
deposit insurance funds or the Farm Credit Insur-
ance Fund.
(c) STATEMENT
OF
PROPOSED
RULEMAKING.—
Whenever an agency publishes general notice of proposed
rulemaking for any proposed rule, unless the agency has
made a certification under subsection (a), 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 analyses, data,
views, and arguments, and any specific alter-
natives to the proposed rule that—
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(i) accomplish the stated objectives of
the applicable statutes, in a manner com-
parable to the proposed rule;
(ii) result in costs to the Federal Gov-
ernment equal to or less than the costs re-
sulting from the proposed rule; and
(iii) result in housing affordability
greater than the housing affordability re-
sulting from the proposed 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 (d).
(d) INITIAL HOUSING IMPACT ANALYSIS.—
(1) REQUIREMENTS.—Each initial housing im-
pact analysis shall describe the impact of the pro-
posed rule on housing affordability. The initial hous-
ing impact analysis or a summary shall be published
in the Federal Register at the same time as, and to-
gether with, the publication of general notice of pro-
posed rulemaking for the rule. The agency shall
transmit a copy of the initial housing impact anal-
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ysis to the Secretary of Housing and Urban Devel-
opment.
(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
contain—
(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 increase the cost or reduce the sup-
ply of housing or land for residential develop-
ment; and
(D) an identification, to the extent prac-
ticable, of all relevant Federal rules which may
duplicate, overlap, or conflict with the proposed
rule.
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(e) PROPOSAL OF LESS DELETERIOUS ALTERNATIVE
RULE.—
(1) ANALYSIS.—The agency publishing a gen-
eral notice of proposed rulemaking shall review any
specific analyses and alternatives to the proposed
rule which have been submitted to the agency pursu-
ant to subsection (c)(2) to determine whether any al-
ternative to the proposed rule—
(A) accomplishes the stated objectives of
the applicable statutes, in a manner comparable
to the proposed rule;
(B) results in costs to the Federal Govern-
ment equal to or less than the costs resulting
from the proposed rule; and
(C) results in housing affordability greater
than the housing affordability 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), unless the agency provides an explanation on
the record for the proposed rule as to why the alter-
native should not be implemented, the agency shall
incorporate the alternative into the final rule or, at
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the agency’s discretion, issue a new proposed rule
which incorporates the alternative.
(f) FINAL HOUSING IMPACT ANALYSIS.—
(1) REQUIREMENT.—Whenever an agency pro-
mulgates a final rule after publication of a general
notice of proposed rulemaking, unless the agency has
made the certification under subsection (a), the
agency shall prepare 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 housing af-
fordability or an explanation of why no such es-
timate is available.
(3) AVAILABILITY.—The agency shall make
copies of the final housing impact analysis available
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to members of the public and shall publish in the
Federal Register such analysis or a summary there-
of.
(g) AVOIDANCE OF DUPLICATIVE OR UNNECESSARY
ANALYSES.—
(1) DUPLICATION.—Any Federal agency may
perform the analyses required by subsections (d) and
(f) in conjunction with or as a part of any other
agenda or analysis required by any other law, execu-
tive order, directive, or rule if such other analysis
satisfies the provisions of such subsections.
(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 (d) and (f).
(h) PREPARATION OF ANALYSES.—In complying with
the provisions of subsections (d) and (f), 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.
(i) EFFECT ON OTHER LAW.—The requirements of
subsections (d) and (f) do not alter in any manner stand-
ards otherwise applicable by law to agency action.
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(j) 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 (d) 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 (f). An agency head may delay the comple-
tion of the requirements of subsection (f) for a pe-
riod of not more than 180 days after the date of
publication in the Federal Register of a final rule by
publishing in the Federal Register, not later than
such date of publication, a written finding, with rea-
sons therefor, that the final rule is being promul-
gated in response to an emergency that makes time-
ly compliance with the provisions of subsection (f)
impracticable. If the agency has not prepared a final
housing impact analysis pursuant to subsection (f)
within 180 days from the date of publication of the
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final rule, such rule shall lapse and have no force or
effect. Such rule shall not be repromulgated until a
final housing impact analysis has been completed by
the agency.
(k) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) 
HOUSING
AFFORDABILITY.—The 
term
‘‘housing affordability’’ means the quantity of hous-
ing that is affordable to families having incomes that
do not exceed 150 percent of the median income of
families in the area in which the housing is located,
with adjustments for smaller and larger families.
For purposes of this paragraph, area, median family
income for an area, and adjustments for family size
shall be determined in the same manner as such fac-
tors are determined for purposes of section 3(b)(2)
of the United States Housing Act of 1937.
(2) AGENCY.—The term ‘‘agency’’ means each
authority of the Government of the United States,
whether or not it is within or subject to review by
another agency, but does not include—
(A) the Congress;
(B) the courts of the United States;
(C) the governments of the territories or
possessions of the United States;
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(D) the government of the District of Co-
lumbia;
(E) agencies composed of representatives
of the parties or of representatives of organiza-
tions of the parties to the disputes determined
by them;
(F) courts-martial and military commis-
sions;
(G) military authority exercised in the field
in time of war or in occupied territory; or
(H) functions conferred by—
(i) sections 1738, 1739, 1743, and
1744 of title 12, United States Code;
(ii) chapter 2 of title 41, United
States Code;
(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
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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 increasing consumers’ cost of housing by
more than $100,000,000 per year.
(l) DEVELOPMENT.—Not later than 1 year after the
date of the enactment of this title, the Secretary of Hous-
ing and Urban Development shall develop model initial
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 define the pri-
mary elements of a housing impact analysis to instruct
other agencies on how to carry out and develop the anal-
yses required under subsections (a) and (d).
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(m) JUDICIAL REVIEW.—
(1) DETERMINATION BY AGENCY.—Except as
otherwise provided in paragraph (2), any determina-
tion by an agency concerning the applicability of any
of the provisions of this title to any action of the
agency shall not be subject to judicial review.
(2) OTHER ACTIONS BY AGENCY.—Any housing
impact analysis prepared under subsection (d) or (f)
and the compliance or noncompliance of the agency
with the provisions of this title shall not be subject
to judicial review. When an action for judicial review
of a rule is instituted, any housing impact analysis
for such rule shall constitute part of the whole
record of agency action in connection with the re-
view.
(3) EXCEPTION.—Nothing in this subsection
bars judicial review of any other impact statement or
similar analysis required by any other law if judicial
review of such statement or analysis is otherwise
provided by law.
SEC. 103. GRANTS FOR REGULATORY BARRIER REMOVAL
STRATEGIES.
(a) AUTHORIZATION
OF
APPROPRIATIONS.—Sub-
section (a) of section 1204 of the Housing and Community
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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 2001 and such sums as may
be necessary for each of fiscal years 2002, 2003, 2004,
and 2005.’’.
(b) 
CONSOLIDATION
OF
STATE
AND
LOCAL
GRANTS.—Subsection (b) of section 1204 of the Housing
and Community Development Act of 1992 (42 U.S.C.
12705c(b)) is amended—
(1) in the subsection heading, by striking
‘‘STATE GRANTS’’ and inserting ‘‘GRANT AUTHOR-
ITY’’;
(2) in the matter preceding paragraph (1), by
inserting after ‘‘States’’ the following: ‘‘and units of
general local government (including consortia of
such governments)’’;
(3) in paragraph (3), by striking ‘‘a State pro-
gram to reduce State and local’’ and inserting
‘‘State, local, or regional programs to reduce’’;
(4) in paragraph (4), by inserting ‘‘or local’’
after ‘‘State’’; and
(5) in paragraph (5), by striking ‘‘State’’.
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(c) REPEAL OF LOCAL GRANTS PROVISION.—Section
1204 of the Housing and Community Development Act
of 1992 (42 U.S.C. 12705c) is amended by striking sub-
section (c).
(d) 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—
(1) by striking ‘‘and for the selection of units
of general local government to receive grants under
subsection (f)(2)’’; and
(2) by inserting before the period at the end the
following: ‘‘and such criteria shall require that grant
amounts be used in a manner consistent with the
strategy contained in the comprehensive housing af-
fordability strategy for the jurisdiction pursuant to
section 105(b)(4) of the Cranston-Gonzalez National
Affordable Housing Act’’.
(e) SELECTION OF GRANTEES.—Subsection (f) of
section 1204 of the Housing and Community Development
Act of 1992 (42 U.S.C. 12705c(f)) is amended to read
as follows:
‘‘(f) SELECTION
OF GRANTEES.—To the extent
amounts are made available to carry out this section, the
Secretary shall provide grants on a competitive basis to
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eligible grantees based on the proposed uses of such
amounts, as provided in applications under subsection
(e).’’.
(f) 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.
(a) IN GENERAL.—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 govern-
ment to remove barriers to affordable housing’’.
(b) RULE
OF
CONSTRUCTION.—The amendment
made by subsection (a) may not be construed to create
any new private right of action.
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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)—
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(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-
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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 Housing Affordability
Barrier Removal Act of 2000) 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. EXTENSION OF LOAN TERM FOR MANUFACTURED
HOME LOTS.
Section 2(b)(3)(E) of the National Housing Act (12
U.S.C. 1703(b)(3)(E)) is amended by striking ‘‘fifteen’’
and inserting ‘‘twenty’’.
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SEC. 202. DOWNPAYMENT SIMPLIFICATION.
(a) IN GENERAL.—Section 203(b) of the National
Housing Act (12 U.S.C. 1709(b)) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A), by realigning the
matter that precedes clause (ii) an additional 2
ems from the left margin;
(B) in the matter that follows subpara-
graph (B)(iii)—
(i) by striking the sixth sentence (re-
lating to the increases for costs of solar en-
ergy systems) and all that follows through
the end of the penultimate undesignated
paragraph; and
(ii) by striking the second and third
sentences of such matter; and
(C) by striking subparagraph (B);
(2) by transferring and inserting subparagraph
(A) of paragraph (10) after subparagraph (A) of
paragraph (2) and amending such subparagraph by
striking all of the matter that precedes clause (i)
and inserting the following:
‘‘(B) not to exceed an amount equal to the
sum of—’’;
(3) by transferring and inserting the last undes-
ignated paragraph of paragraph (2) (relating to dis-
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closure notice) after subsection (e), realigning such
transferred paragraph so as to be flush with the left
margin, and amending such transferred paragraph
by inserting ‘‘(f) DISCLOSURE
OF OTHER MORT-
GAGE PRODUCTS.—’’ before ‘‘In conjunction’’;
(4) by transferring and inserting the sentence
that constitutes the text of paragraph (10)(B) after
the period at the end of the first sentence that fol-
lows subparagraph (B) (relating to the definition of
‘‘area’’); and
(5) by striking paragraph (10) (as amended by
the preceding provisions this section).
(b) CONFORMING AMENDMENTS.—Section 245 of the
National 
Housing 
Act 
(12 
U.S.C. 
1715z–10) 
is
amended—
(1) in subsection (a), by striking ‘‘, or if the
mortgagor’’ and all that follows through ‘‘case of
veterans’’; and
(2) in subsection (b)(3), by striking ‘‘, or, if
the’’ and all that follows through ‘‘for veterans,’’.
SEC. 203. REDUCED DOWNPAYMENT REQUIREMENTS FOR
LOANS FOR TEACHERS AND UNIFORMED MU-
NICIPAL EMPLOYEES.
(a) IN GENERAL.—Section 203(b) of the National
Housing Act (12 U.S.C. 1709(b)), as amended by section
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202 of this Act, is further amended by adding at the end
the following new paragraph:
‘‘(10) 
REDUCED
DOWNPAYMENT
REQUIRE-
MENTS FOR TEACHERS AND UNIFORMED MUNICIPAL
EMPLOYEES.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (2), in the case of a mortgage described
in subparagraph (B)—
‘‘(i) the mortgage shall involve a prin-
cipal obligation in an amount that does not
exceed the sum of 99 percent of the ap-
praised value of the property and the total
amount of initial service charges, ap-
praisal, inspection, and other fees (as the
Secretary shall approve) paid in connection
with the mortgage;
‘‘(ii) no other provision of this sub-
section limiting the principal obligation of
the mortgage based upon a percentage of
the appraised value of the property subject
to the mortgage shall apply; and
‘‘(iii) the matter in paragraph (9) that
precedes the first proviso shall not apply
and the mortgage shall be executed by a
mortgagor who shall have paid on account
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of the property at least 1 percent of the
cost of acquisition (as determined by the
Secretary) in cash or its equivalent.
‘‘(B) MORTGAGES COVERED.—A mortgage
described in this subparagraph is a mortgage—
‘‘(i) under which the mortgagor is an
individual who—
‘‘(I) is employed on a full-time
basis as: (aa) a teacher or adminis-
trator in a public or private school
that provides elementary or secondary
education, as determined under State
law, except that elementary education
shall include pre-Kindergarten edu-
cation, and except that secondary edu-
cation shall not include any education
beyond grade 12; or (bb) a public
safety officer (as such term is defined
in section 1204 of the Omnibus Crime
Control and Safe Streets Act of 1968
(42 U.S.C. 3796b), except that such
term shall not include any officer
serving a public agency of the Federal
Government); and
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‘‘(II) has not, during the 12-
month period ending upon the insur-
ance of the mortgage, had any present
ownership interest in a principal resi-
dence located in the jurisdiction de-
scribed in clause (ii); and
‘‘(ii) made for a property that is lo-
cated within the jurisdiction of—
‘‘(I) in the case of a mortgage of
a mortgagor described in clause
(i)(I)(aa), the local educational agency
(as such term is defined in section
14101 of the Elementary and Sec-
ondary Education Act of 1965 (20
U.S.C. 8801)) for the school in which
the mortgagor is employed (or, in the
case of a mortgagor employed in a
private school, the local educational
agency having jurisdiction for the area
in which the private school is located);
or
‘‘(II) in the case of a mortgage of
a mortgagor described in clause
(i)(I)(bb), the jurisdiction served by
the public law enforcement agency,
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firefighting agency, or rescue or am-
bulance agency that employs the
mortgagor.’’.
(b) DEFERRAL AND REDUCTION OF UP-FRONT PRE-
MIUM.—Section 203(c) of the National Housing Act (12
U.S.C. 1709(c)(2)) is amended—
(1) in paragraph (2), in the matter preceding
subparagraph (A), by striking ‘‘Notwithstanding’’
and inserting ‘‘Except as provided in paragraph (3)
and notwithstanding’’; and
(2) by adding at the end the following new
paragraph:
‘‘(3) DEFERRAL AND REDUCTION OF UP-FRONT PRE-
MIUM.—In the case of any mortgage described in sub-
section (b)(10)(B):
‘‘(A) Paragraph (2)(A) of this subsection (relat-
ing to collection of up-front premium payments)
shall not apply.
‘‘(B) If, at any time during the 5-year period
beginning on the date of the insurance of the mort-
gage, the mortgagor ceases to be employed as de-
scribed in subsection (b)(10)(B)(i)(I) or pays the
principal obligation of the mortgage in full, the Sec-
retary shall at such time collect a single premium
payment in an amount equal to the amount of the
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single premium payment that, but for this para-
graph, would have been required under paragraph
(2)(A) of this subsection with respect to the mort-
gage, as reduced by 20 percent of such amount for
each successive 12-month period completed during
such 5-year period before such cessation or prepay-
ment occurs.’’.
SEC. 204. PREVENTING FRAUD IN REHABILITATION LOAN
PROGRAM.
(a) IN GENERAL.—Section 203(k) of the National
Housing Act (12 U.S.C. 1709(k)) is amended by adding
at the end the following new paragraph:
‘‘(7) PREVENTION
OF
FRAUD.—To prevent fraud
under the program for loan insurance authorized under
this subsection, the Secretary shall, by regulation, take the
following actions:
‘‘(A) PROHIBITION
OF
IDENTITY
OF
INTER-
EST.—The Secretary shall prohibit any identity-of-
interest, as such term is defined by the Secretary,
between any of the following parties involved in a
loan insured under this subsection: the borrower (in-
cluding, in the case of a borrower that is a nonprofit
organization, any member of the board of directors
or the staff of the organization), the lender, any con-
sultant, any real estate agent, any property inspec-
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tor, and any appraiser. Nothing in this subpara-
graph may be construed to prohibit or restrict, or
authorize the Secretary to prohibit or restrict, the
functioning of a affiliated business arrangement that
complies with the requirements under section 8(c)(4)
of the Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2607(c)(4)).
‘‘(B) NONPROFIT
PARTICIPATION.—The Sec-
retary shall establish minimum standards for a non-
profit organization to participate in the program,
which shall include—
‘‘(i) requiring such an organization to dis-
close to the Secretary its taxpayer identification
number and evidence sufficient to indicate that
the organization is an organization described in
section 501(c) of the Internal Revenue Code of
1986 that is exempt from taxation under sub-
title A of such Code;
‘‘(ii) requiring that the board of directors
of such an organization be comprised only of in-
dividuals who do not receive any compensation
or other thing of value by reason of their serv-
ice on the board and who have no personal fi-
nancial interest in the rehabilitation project of
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the organization that is financed with the loan
insured under this subsection;
‘‘(iii) requiring such an organization to
submit to the Secretary financial statements of
the organization for the most recent 2 years,
which have been prepared by a party that is un-
affiliated with the organization and is qualified
to prepare financial statements;
‘‘(iv) limiting to 10 the number of loans
that are insured under this subsection, made to
any single such organization, and, at any one
time, have an outstanding balance of principal
or interest, except that the Secretary may in-
crease such numerical limitation on a case-by-
case basis for good cause shown; and
‘‘(v) requiring such an organization to have
been certified by the Secretary as meeting the
requirements under this subsection and other-
wise eligible to participate in the program not
more than 2 years before obtaining a loan in-
sured under this section.
‘‘(C) COMPLETION OF WORK.—The Secretary
shall prohibit any lender making a loan insured
under this subsection from disbursing the final pay-
ment of loan proceeds unless the lender has received
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affirmation, from the borrower under the loan, both
in writing and pursuant to an interview in person or
over the telephone, that the rehabilitation activities
financed by the loan have been satisfactorily com-
pleted.
‘‘(D) CONSULTANT
STANDARDS.—The Sec-
retary shall require that any consultant, as such
term is defined by the Secretary, who is involved in
a home inspection, site visit, or preparation of bids
with respect to any loan insured under this section
shall meet such standards established by the Sec-
retary to ensure accurate inspections and prepara-
tion of bids.
‘‘(E) CONTRACTOR QUALIFICATION.—The Sec-
retary shall require, in the case of any loan that is
insured under this subsection and involves rehabili-
tation with a cost of $25,000 or more, that the con-
tractor or other person performing or supervising
the rehabilitation activities financed by the loan
shall—
‘‘(i) be certified by a nationally recognized
organization as meeting industry standards for
quality of workmanship, training, and con-
tinuing education, including financial manage-
ment;
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‘‘(ii) be licensed to conduct such activities
by the State or unit of general local government
in which the rehabilitation activities are being
completed; or
‘‘(iii) be bonded or provide such equivalent
protection, as the Secretary may require.’’.
(b) REPORT ON ACTIVITY OF NONPROFIT ORGANIZA-
TIONS UNDER PROGRAM.—Not later than 60 days after
the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall submit a report
to the Congress regarding the participation of nonprofit
organizations under the rehabilitation loan program under
section 203(k) of the National Housing Act (12 U.S.C.
1709(k)). The report shall—
(1) determine and describe the extent of partici-
pation in the program by such organizations;
(2) identify and compare the default and claim
rates for loans made under the program to nonprofit
organizations and to owner-occupier participants;
(3) analyze the impact, on such organizations
and the program, of prohibiting such organizations
from participating in the program; and
(4) identify other opportunities for such organi-
zations to acquire financing or credit enhancement
for rehabilitation activities.
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(c) REGULATIONS.—The Secretary of Housing and
Urban Development shall issue final regulations and any
other administrative orders or notices necessary to carry
out the provisions of this section and the amendments
made by this section not later than 120 days after the
date of the enactment of this Act.
SEC. 205. COMMUNITY PARTNERS NEXT DOOR PROGRAM.
(a) SHORT TITLE.—This section may be cited as the
‘‘Community Partners Next Door Act’’.
(b) CONGRESSIONAL FINDINGS.—The Congress finds
that—
(1) teachers, law enforcement officers, fire
fighters, and rescue personnel help form the back-
bones of communities and are integral components
in the social capital of neighborhoods in the United
States; and
(2) providing a discounted purchase price on
HUD-owned properties for teachers, law enforce-
ment officers, fire fighters, and rescue personnel rec-
ognizes the intrinsic value of the services provided by
such employees to their communities and to family
life and encourages and rewards those who are dedi-
cated to providing public service in our most needy
communities.
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(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
AND PUBLIC SAFETY OFFICERS PURCHASING PROP-
ERTIES THAT ARE ELIGIBLE ASSETS.—
‘‘(A) DISCOUNT.—A property that is an el-
igible asset and is sold, during fiscal years 2000
through 2004, to a teacher or public safety offi-
cer 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 accordance with
paragraph (6)(B)). In the case of a property el-
igible for both a discount under this paragraph
and a discount under paragraph (6), the dis-
count 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
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3-year period beginning upon such sale, as the
primary residence of a teacher or public safety
officer.
‘‘(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 public safety of-
ficer; or
‘‘(ii) directly to a purchaser who is a
teacher or public safety officer.
‘‘(D) RESALE.—In the case of any pur-
chase by a unit of general local government or
nonprofit 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
general local government or nonprofit or-
ganization to provide the full benefit of the
discount to the teacher or public safety of-
ficer obtaining the property; and
‘‘(ii) in the case of a purchase involv-
ing multiple eligible assets, any of which is
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such an eligible property, designate the
specific eligible property or properties to be
subject to the requirements of subpara-
graph (B).
‘‘(E) MORTGAGE
DOWNPAYMENT
ASSIST-
ANCE.—If a teacher or public safety officer pur-
chases an eligible property pursuant to a dis-
counted sale price under this paragraph and fi-
nances such purchase through a mortgage in-
sured under this title, notwithstanding any pro-
vision 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 prop-
erties in violation of the requirement under sub-
paragraph (B).
‘‘(G) 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
Elementary and Secondary Education Act
of 1965 (20 U.S.C. 8801), except that, for
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purposes of this paragraph, elementary
education (as used in such section) shall
include pre-Kindergarten education.
‘‘(ii) The term ‘eligible property’
means an eligible asset described in para-
graph (2)(A) of this subsection.
‘‘(iii) The term ‘public safety officer’
means an individual who is employed on a
full-time basis as a public safety officer de-
scribed in section 203(b)(10)(B)(i)(I)(bb).
‘‘(iv) 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 or State-li-
censed classroom teacher or as an adminis-
trator.’’.
(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)’’.
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(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
section.
SEC. 206. 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 insert-
ing 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 inserting ‘‘and
insured community development financial insti-
tutions’’ after ‘‘private mortgage insurers’’; 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 enact-
ment of the American Homeownership and
Economic Opportunity Act of 2000’’;
(4) in subsection (b)—
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(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 inserting
‘‘or insured community development financial
institution’’ after ‘‘private mortgage insurance
company’’;
(6) in subsection (d), by inserting ‘‘or insured
community development financial institution’’ after
‘‘private mortgage insurance company’’; and
(7) by adding at the end the following new sub-
section:
‘‘(e) INSURED COMMUNITY DEVELOPMENT FINAN-
CIAL INSTITUTIONS.—For purposes of this section, the
term ‘insured community development financial institu-
tion’ means a community development financial institu-
tion, as such term is defined in section 103 of Reigle Com-
munity Development and Regulatory Improvement Act of
1994 (12 U.S.C. 4702) that is an insured depository insti-
tution (as such term is defined in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813)) or an insured
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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
Housing 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 prospec-
tive mortgagee for the mortgage shall, at the time of loan
application, make available to the prospective mortgagor
a written explanation of the features of an adjustable rate
mortgage consistent with the disclosure requirements ap-
plicable 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—
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‘‘(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 sub-
section (a) (relating to prohibiting annual in-
creases of more than 1 percent) only if the in-
terest rate remains fixed for 5 or fewer years;
and
‘‘(2) otherwise meets the requirements for in-
surance under subsection (a) that are not incon-
sistent 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 rule-
making.
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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
following 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 mort-
gagee of a mortgage insured under this subsection,
provide to the mortgagor, within an appropriate time
period and in a manner established in such regula-
tions, a good faith estimate of: (A) the total cost of
the refinancing; and (B) the increase in the mortga-
gor’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
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on the home equity conversion mortgage that is
being refinanced and insured under this subsection.
‘‘(3) 
WAIVER
OF
COUNSELING
REQUIRE-
MENT.—The mortgagor under a mortgage insured
under this subsection may waive the applicability,
with respect to such mortgage, of the requirements
under subsection (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 deter-
mined 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
refinancing mortgage insured under this sub-
section does not exceed 5 years.
‘‘(4) CREDIT FOR PREMIUMS PAID.—Notwith-
standing section 203(c)(2)(A), the Secretary may re-
duce the amount of the single premium payment
otherwise collected under such section at the time of
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the insurance of a mortgage refinanced and insured
under this subsection. The amount of the single pre-
mium for mortgages refinanced under this sub-
section shall be determined by the Secretary based
on the actuarial study required under paragraph (5).
‘‘(5) ACTUARIAL STUDY.—Not later than 180
days after the date of the enactment of the Amer-
ican Homeownership and Economic Opportunity Act
of 2000, the Secretary shall conduct an actuarial
analysis to determine the adequacy of the insurance
premiums collected under the program under this
subsection with respect to—
‘‘(A) a reduction in the single premium
payment collected at the time of the insurance
of a mortgage refinanced and insured under
this subsection;
‘‘(B) the establishment of a single national
limit on the benefits of insurance under sub-
section (g) (relating to limitation on insurance
authority); and
‘‘(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