(3) by inserting after subparagraph (G) the fol-
lowing:
‘‘(H) for public housing, any other adjust-
ments to earned income established by the pub-
lic housing agency. If a public housing agency
adopts other adjustments to income pursuant to
subparagraph (H), the Secretary shall not take
into account any reduction of or increase in the
public housing agency’s per unit dwelling rental
income resulting from those adjustments when
calculating the contributions under section 9 for
the public housing agency for the operation of
the public housing.’’.
(d) REPEAL OF FEDERAL PREFERENCES.—
(1) PUBLIC
HOUSING.—Section 6(c)(4)(A) of
the United States Housing Act of 1937 (42 U.S.C.
1437d(c)(4)(A)) is amended to read as follows:
‘‘(A) the establishment, after public notice
and an opportunity for public comment, of a
written system of preferences for admission to
public housing, if any, that is not inconsistent
with the comprehensive housing affordability
strategy under title I of the Cranston-Gonzalez
National Affordable Housing Act;’’.
(2) SECTION 8 EXISTING AND MODERATE REHA-
BILITATION.—Section 8(d)(1)(A) of the United
States 
Housing 
Act 
of 
1937 
(42 
U.S.C.
1437f(d)(1)(A)) is amended to read as follows:
‘‘(A) the selection of tenants shall be the
function of the owner, subject to the provisions
of the annual contributions contract between
the Secretary and the agency, except that for
the certificate and moderate rehabilitation pro-
grams only, for the purpose of selecting families
to be assisted, the public housing agency may
establish, after public notice and an opportunity
for public comment, a written system of pref-
erences for selection that is not inconsistent
with the comprehensive housing affordability
strategy under title I of the Cranston-Gonzalez
National Affordable Housing Act;’’.
(3) SECTION
VOUCHER
PROGRAM.—Section
8(o)(3)(B) of the United States Housing Act of
1937 (42 U.S.C. 1437f(o)(3)(B)) is amended to read
as follows:
‘‘(B) For the purpose of selecting families
to be assisted under this subsection, the public
housing agency may establish, after public no-
tice and an opportunity for public comment, a
written system of preferences for selection that
is not inconsistent with the comprehensive
housing affordability strategy under title I of
the Cranston-Gonzalez National Affordable
Housing Act.’’.
(4) SECTION 8 NEW CONSTRUCTION AND SUB-
STANTIAL REHABILITATION.—
(A) REPEAL.—Section 545(c) of the Cran-
ston-Gonzalez National Affordable Housing Act
(42 U.S.C. 1437f note) is amended to read as
follows:
‘‘(c) [Reserved.]’’.
(B) PROHIBITION.—Notwithstanding any
other provision of law, no Federal tenant selec-
tion preferences under the United States Hous-
ing Act of 1937 shall apply with respect to—
(i) housing constructed or substan-
tially rehabilitated pursuant to assistance
provided under section 8(b)(2) of the Unit-
ed States Housing Act of 1937 (as such
section existed on the day before October
1, 1983); or
(ii) projects financed under section
202 of the Housing Act of 1959 (as such
section existed on the day before the date
of enactment of the Cranston-Gonzalez
National Affordable Housing Act).
(5) RENT
SUPPLEMENTS.—Section 101(k) of
the Housing and Urban Development Act of 1965
(12 U.S.C. 1701s(k)) is amended to read as follows:
‘‘(k) [Reserved.]’’.
(6) CONFORMING AMENDMENTS.—
(A) UNITED
STATES
HOUSING
ACT
OF
1937.—The United States Housing Act of 1937
(42 U.S.C. 1437 et seq.) is amended—
(i) in section 6(o), by striking ‘‘pref-
erence rules specified in’’ and inserting
‘‘written system of preferences for selection
established pursuant to’’;
(ii) in the second sentence of section
7(a)(2), by striking ‘‘according to the pref-
erences for occupancy under’’ and inserting
‘‘in accordance with the written system of
preferences for selection established pursu-
ant to’’;
(iii) in section 8(d)(2)(A), by striking
the last sentence;
(iv) in section 8(d)(2)(H), by striking
‘‘Notwithstanding subsection (d)(1)(A)(i),
an’’ and inserting ‘‘An’’;
(v) in section 16(c), in the second sen-
tence, by striking ‘‘the system of pref-
erences established by the agency pursuant
to section 6(c)(4)(A)(ii)’’ and inserting
‘‘the written system of preferences for se-
lection established by the public housing
agency pursuant to section 6(c)(4)(A)’’;
and
(vi) in section 24(e)—
(I) by striking ‘‘(e) EXCEP-
TIONS’’ and all that follows through
‘‘The Secretary may’’ and inserting
the following:
‘‘(e) EXCEPTION TO GENERAL PROGRAM REQUIRE-
MENTS.—The Secretary may’’; and
(II) by striking paragraph (2).
(B) CRANSTON-GONZALEZ
NATIONAL
AF-
FORDABLE
HOUSING
ACT.—Section
522(f)(6)(B) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12704 et
seq.) is amended by striking ‘‘any preferences
for such assistance under section 8(d)(1)(A)(i)’’
and inserting ‘‘the written system of pref-
erences for selection established pursuant to
section 8(d)(1)(A)’’.
(C) HOUSING AND COMMUNITY DEVELOP-
MENT ACT OF 1992.—Section 655 of the Hous-
ing and Community Development Act of 1992
(42 U.S.C. 13615) is amended by striking ‘‘the
preferences’’ and all that follows up to the pe-
riod at the end and inserting ‘‘any preferences’’.
(D) REFERENCES
IN
OTHER
LAW.—Any
reference in any Federal law other than any
provision of any law amended by paragraphs
(1) through (5) of this subsection to the pref-
erences 
for 
assistance 
under 
section
6(c)(4)(A)(i), 8(d)(1)(A)(i), or 8(o)(3)(B) of the
United States Housing Act of 1937 (as such
sections existed on the day before the date of
enactment of this Act) shall be considered to
refer to the written system of preferences for
selection 
established 
pursuant 
to 
section
6(c)(4)(A), 8(d)(1)(A), or 8(o)(3)(B), respec-
tively, of the United States Housing Act of
1937, as amended by this section.
(e) APPLICABILITY.—In accordance with section
201(b)(2) of the United States Housing Act of 1937, the
amendments made by subsections (a), (b), (c), (d), and
(f) of this section shall also apply to public housing devel-
oped or operated pursuant to a contract between the Sec-
retary of Housing and Urban Development and an Indian
housing authority.
(f) This section shall be effective upon the enactment
of this Act and only for fiscal year 1996.
SECTION 8 FAIR MARKET RENTALS, ADMINISTRATIVE
FEES, AND DELAY IN REISSUANCE
SEC. 403. (a) FAIR MARKET RENTALS.—The Sec-
retary shall establish fair market rentals for purposes of
section 8(c)(1) of the United States Housing Act of 1937,
as amended, that shall be effective for fiscal year 1996
and shall be based on the 40th percentile rent of rental
distributions of standard quality rental housing units. In
establishing such fair market rentals, the Secretary shall
consider only the rents for dwelling units occupied by re-
cent movers and may not consider the rents for public
housing dwelling units or newly constructed rental dwell-
ing units.
(b) ADMINISTRATIVE FEES.—Notwithstanding sec-
tions 8(q) (1) and (4) of the United States Housing Act
of 1937, for fiscal year 1996, the fee for each month for
which a dwelling unit is covered by an assistance contract
under the certificate, voucher, or moderate rehabilitation
program under section 8 of such Act shall be equal to the
monthly fee payable for fiscal year 1995: Provided, That
this subsection shall be applicable to all amounts made
avail-able for such fees during fiscal year 1996, as if in
effect on October 1, 1995.
(c) DELAY REISSUANCE OF VOUCHERS AND CERTIFI-
CATES.—Notwithstanding any other provision of law, a
public housing agency administering certificate or voucher
assistance provided under subsection (b) or (o) of section
8 of the United States Housing Act of 1937, as amended,
shall delay for 3 months, the use of any amounts of such
assistance (or the certificate or voucher representing as-
sistance amounts) made available by the termination dur-
ing fiscal year 1996 of such assistance on behalf of any
family for any reason, but not later than October 1, 1996;
with the exception of any certificates assigned or commit-
ted to project-based assistance as permitted otherwise by
the Act, accomplished prior to the effective date of this
Act.
REPEAL OF PROVISIONS REGARDING INCOME DISREGARDS
SEC. 404. (a) MAXIMUM ANNUAL LIMITATION ON
RENT INCREASES RESULTING FROM EMPLOYMENT.—
Section 957 of the Cranston-Gonzalez National Affordable
Housing Act is hereby repealed, retroactive to November
28, 1990, and shall be of no effect.
(b) ECONOMIC INDEPENDENCE.—Section 923 of the
Housing and Community Development Act of 1992 is
hereby repealed, retroactive to October 28, 1992, and shall
be of no effect.
SECTION 8 CONTRACT RENEWALS
SEC. 405. (a) For fiscal year 1996 and henceforth,
the Secretary of Housing and Urban Development may
use amounts available for the renewal of assistance under
section 8 of the United States Housing Act of 1937, upon
termination or expiration of a contract for assistance
under section 8 of such Act of 1937 (other than a contract
for tenant-based assistance and notwithstanding section
8(v) of such Act for loan management assistance), to pro-
vide assistance under section 8 of such Act, subject to the
Section 8 Existing Fair Market Rents, for the eligible
families assisted under the contracts at expiration or ter-
mination, which assistance shall be in accordance with
terms and conditions prescribed by the Secretary.
(b) Notwithstanding subsection (a) and except for
projects assisted under section 8(e)(2) of the United
States Housing Act of 1937 (as it existed immediately
prior to October 1, 1991), at the request of the owner,
the Secretary shall renew for a period of one year con-
tracts for assistance under section 8 that expire or termi-
nate during fiscal year 1996 at the current rent levels.
(c) Section 8(v) of the United States Housing Act
of 1937 is amended to read as follows: ‘‘The Secretary
may extend expiring contracts entered into under this sec-
tion for project-based loan management assistance to the
extent necessary to prevent displacement of low-income
families receiving such assistance as of September 30,
1996.’’.
(d) Section 236(f) of the National Housing Act (12
U.S.C. 1715z–1(f)) is amended:
(1) by striking the second sentence in para-
graph (1) and inserting in lieu thereof the following:
‘‘The rental charge for each dwelling unit shall be at
the basic rental charge or such greater amount, not
exceeding the lower of (i) the fair market rental
charge determined pursuant to this paragraph, or
(ii) the fair market rental established under section
8(c) of the United States Housing Act of 1937 for
the market area in which the housing is located, as
represents 30 per centum of the tenant’s adjusted
income.’’; and
(2) by striking paragraph (6).’’.
EXTENSION OF HOME EQUITY CONVERSION MORTGAGE
PROGRAM
SEC. 406. Section 255(g) of the National Housing
Act (12 U.S.C. 1715z–20(g)) is amended—
(1) in the first sentence, by striking ‘‘Septem-
ber 30, 1995’’ and inserting ‘‘September 30, 1996’’;
and
(2) in the second sentence, by striking
‘‘25,000’’ and inserting ‘‘30,000’’.
FHA SINGLE-FAMILY ASSIGNMENT PROGRAM REFORM
SEC. 407. (a) FORECLOSURE AVOIDANCE.—Except
as provided in subsection (e), the last sentence of section
204(a) of the National Housing Act (12 U.S.C. 1710(a))
is amended by inserting before the period the following:
‘‘:And provided further, That the Secretary may pay insur-
ance benefits to the mortgagee to recompense the mortga-
gee for its actions to provide an alternative to the fore-
closure of a mortgage that is in default, which actions may
include special foreclosure, loan modification, and deeds
in lieu of foreclosure, all upon terms and conditions as
the mortgagee shall determine in the mortgagee’s sole dis-
cretion, within guidelines provided by the Secretary, but
which may not include assignment of a mortgage to the
Secretary: And provided further, That for purposes of the
preceding proviso, no action authorized by the Secretary
and no action taken, nor any failure to act, by the Sec-
retary or the mortgagee shall be subject to judicial re-
view.’’.
(b) AUTHORITY TO ASSIST MORTGAGORS IN DE-
FAULT.—Except as provided in subsection (e), section 230
of the National Housing Act (12 U.S.C. 1715u) is amend-
ed to read as follows:
‘‘AUTHORITY TO ASSIST MORTGAGORS IN DEFAULT
‘‘SEC. 230. (a) PAYMENT OF PARTIAL CLAIM.—The
Secretary may establish a program for payment of a par-
tial claim to a mortgagee that agrees to apply the claim
amount to payment of a mortgage on a 1- to 4-family resi-
dence that is in default. Any such payment under such
program to the mortgagee shall be made in the sole discre-
tion of the Secretary and on terms and conditions accept-
able to the Secretary, except that—
‘‘(1) the amount of the payment shall be in an
amount determined by the Secretary, not to exceed
an amount equivalent to 12 of the monthly mortgage
payments and any costs related to the default that
are approved by the Secretary; and
‘‘(2) the mortgagor shall agree to repay the
amount of the insurance claim to the Secretary upon
terms and conditions acceptable to the Secretary.
The Secretary may pay the mortgagee, from the appro-
priate insurance fund, in connection with any activities
that the mortgagee is required to undertake concerning
repayment by the mortgagor of the amount owed to the
Secretary.
‘‘(b) ASSIGNMENT.—
‘‘(1) PROGRAM
AUTHORITY.—The Secretary
may establish a program for assignment to the Sec-
retary, upon request of the mortgagee, of a mort-
gage on a 1- to 4-family residence insured under this
Act.
‘‘(2) PROGRAM
REQUIREMENTS.—The Sec-
retary may accept assignment of a mortgage under
a program under this subsection only if—
‘‘(A) the mortgage was in default;
‘‘(B) the mortgagee has modified the mort-
gage to cure the default and provide for mort-
gage payments within the reasonable ability of
the mortgagor to pay, at interest rates not ex-
ceeding current market interest rates; and
‘‘(C) the Secretary arranges for servicing
of the assigned mortgage by a mortgagee
(which may include the assigning mortgagee)
through procedures that the Secretary has de-
termined to be in the best interests of the ap-
propriate insurance fund.
‘‘(3) PAYMENT
OF
INSURANCE
BENEFITS.—
Upon accepting assignment of a mortgage under a
program established under this subsection, the Sec-
retary may pay insurance benefits to the mortgagee
from the appropriate insurance fund, in an amount
that the Secretary determines to be appropriate, not
to exceed the amount necessary to compensate the
mortgagee for the assignment and any losses and ex-
penses resulting from the mortgage modification.
‘‘(c) PROHIBITION OF JUDICIAL REVIEW.—No deci-
sion by the Secretary to exercise or forego exercising any
authority under this section shall be subject to judicial re-
view.
‘‘(d) SAVINGS PROVISION.—Any mortgage for which
the mortgagor has applied to the Secretary, before the
date of enactment of the Departments of Veterans Affairs
and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1996, for assignment pursu-
ant to subsection (b) of this section as in effect before
such date of enactment shall continue to be governed by
the provisions of this section, as in effect immediately be-
fore such date of enactment.
‘‘(e) APPLICABILITY OF OTHER LAWS.—No provision
of this Act, or any other law, shall be construed to require
the Secretary to provide an alternative to foreclosure for
mortgagees with mortgages on 1- to 4-family residences
insured by the Secretary under this Act, or to accept as-
signments of such mortgages.’’.
(c) APPLICABILITY
OF AMENDMENTS.—Except as
provided in subsection (e), the amendments made by sub-
sections (a) and (b) shall apply only with respect to mort-
gages insured under the National Housing Act that are
originated before October 1, 1995.
(d) REGULATIONS.—Not later than 60 days after the
date of enactment of this Act, the Secretary of Housing
and Urban Development shall issue interim regulations to
implement this section and the amendments made by this
section.
(e) EFFECTIVENESS
AND APPLICABILITY.—If this
Act is enacted after the date of enactment of the Balanced
Budget Act of 1995—
(1) subsections (a), (b), (c), and (d) of this sec-
tion shall not take effect; and
(2) section 2052(c) of the Balanced Budget Act
of 1995 is amended by striking ‘‘that are originated
on or after October 1, 1995’’ and inserting in lieu
thereof ‘‘that are originated before, during, and after
fiscal year 1996.’’.
This Act may be cited as ‘‘The Balanced Budget
Downpayment Act, I’’.
Passed the House of Representatives January 25,
1996.
Attest:
Clerk.