during such prior year pursuant to clause (iii) 
or (iv) of paragraph (7)(A). 
‘‘(B) EARNED INCOME.—For purposes of 
this section, the earned income of a family for 
a year shall be the amount of earned income by 
the family in the prior year minus an amount 
equal to 10 percent of the lesser of such prior 
year’s earned income or $10,000, except that 
the income of a family for purposes of section 
16 (relating to eligibility for assisted housing 
and income mix) shall be determined without 
regard to any reduction under this subpara-
graph. 
‘‘(C) INFLATIONARY
ADJUSTMENT
FOR 
FIXED INCOME FAMILIES.—If, for any year, a 
public housing agency or owner determines the 
income for any family described in paragraph 
(7)(B)(ii), or the amount of fixed income of any 
other family, based on the prior year’s income 
or fixed income, respectively, pursuant to sub-
paragraph (A), such prior year’s income or 
fixed income, respectively, shall be adjusted by 
applying an inflationary factor as the Secretary 
shall, by regulation, establish.
‘‘(D) OTHER INCOME.—If, for any year, a 
public housing agency or owner determines the 
income for any family based on the prior year’s 
income, with respect to prior year calculations 
of types of income not subject to subparagraph 
(B), a public housing agency or owner may 
make other adjustments as it considers appro-
priate to reflect current income. 
‘‘(E) SAFE
HARBOR.—A public housing 
agency or owner may, to the extent such infor-
mation is available to the public housing agency 
or owner, determine the family’s income for 
purposes of this section based on timely income 
determinations made for purposes of other 
means-tested Federal public assistance pro-
grams (including the program for block grants 
to States for temporary assistance for needy 
families under part A of title IV of the Social 
Security Act, a program for medicaid assistance 
under a State plan approved under title XIX of 
the Social Security Act, and the food stamp 
program as defined in section 3(h) of the Food 
Stamp Act of 1977). The Secretary shall, in 
consultation with other appropriate Federal 
agencies, develop procedures to enable public
housing agencies and owners to have access to 
such income determinations made by other Fed-
eral programs. 
‘‘(F) PHA AND OWNER COMPLIANCE.—A 
public housing agency or owner may not be con-
sidered to fail to comply with this paragraph or 
paragraph (7) due solely to any de minimus er-
rors made by the agency or owner in calculating 
family incomes.’’; 
(2) by striking subsections (d) and (e); and 
(3) by redesignating subsection (f) as sub-
section (d). 
(b) INCOME.—Section 3(b) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(b)) is amended— 
(1) by striking paragraph (4) and inserting the 
following new paragraph: 
‘‘(4) INCOME.—The term ‘income’ means, with 
respect to a family, income received from all sources 
by each member of the household who is 18 years 
of age or older or is the head of household or spouse 
of the head of the household, plus unearned income 
by or on behalf of each dependent who is less than 
18 years of age, as determined in accordance with 
criteria prescribed by the Secretary, in consultation
with the Secretary of Agriculture, subject to the fol-
lowing requirements: 
‘‘(A) INCLUDED AMOUNTS.—Such term in-
cludes recurring gifts and receipts, actual in-
come from assets, and profit or loss from a 
business. 
‘‘(B) EXCLUDED
AMOUNTS.—Such term 
does not include— 
‘‘(i) any imputed return on assets; 
and 
‘‘(ii) any amounts that would be eligi-
ble for exclusion under section 1613(a)(7) 
of the Social Security Act (42 U.S.C. 
1382b(a)(7)). 
‘‘(C) EARNED
INCOME
OF
STUDENTS.— 
Such term does not include earned income of 
any dependent earned during any period that 
such dependent is attending school on a full- 
time basis or any grant-in-aid or scholarship 
amounts related to such attendance used for 
the cost of tuition or books. 
‘‘(D) EDUCATIONAL SAVINGS ACCOUNTS.— 
Income shall be determined without regard to 
any amounts in or from, or any benefits from, 
any Coverdell education savings account under
section 530 of the Internal Revenue Code of 
1986 or any qualified tuition program under 
section 529 of such Code. 
‘‘(E) OTHER
EXCLUSIONS.—Such term 
shall not include other exclusions from income 
as are established by the Secretary or any 
amount required by Federal law to be excluded 
from consideration as income. The Secretary 
may not require a public housing agency or 
owner to maintain records of any amounts ex-
cluded from income pursuant to this subpara-
graph.’’; and 
(2) by striking paragraph (5) and inserting the 
following new paragraph: 
‘‘(5) ADJUSTED INCOME.—The term ‘adjusted 
income’ means, with respect to a family, the amount 
(as determined by the public housing agency or 
owner) of the income of the members of the family 
residing in a dwelling unit or the persons on a lease, 
after any deductions from income as follows: 
‘‘(A) ELDERLY
AND
DISABLED
FAMI-
LIES.—$725 in the case of any family that is 
an elderly family or a disabled family.
‘‘(B) DEPENDENTS.—In the case of any 
family that includes a member or members 
who— 
‘‘(i) are less than 18 years of age or 
attending school or vocational training on 
a full-time basis; or 
‘‘(ii) is a person with disabilities who 
is 18 years of age or older and resides in 
the household, 
$500 for each such member. 
‘‘(C) HEALTH AND MEDICAL EXPENSES.— 
The amount, if any, by which 10 percent of an-
nual family income is exceeded by the sum of— 
‘‘(i) in the case of any elderly or dis-
abled family, any unreimbursed health and 
medical care expenses; and 
‘‘(ii) any unreimbursed reasonable at-
tendant care and auxiliary apparatus ex-
penses for each handicapped member of 
the family, to the extent necessary to en-
able any member of such family to be em-
ployed. 
‘‘(D) PERMISSIVE DEDUCTIONS.—Such ad-
ditional deductions as a public housing agency 
may, at its discretion, establish, except that the
Secretary shall establish procedures to ensure 
that such deductions do not increase Federal 
expenditures. 
The Secretary shall annually adjust the amounts of 
the exclusions under subparagraphs (A) and (B), as 
such amounts may have been previously adjusted, by 
applying an inflationary factor as the Secretary 
shall, by regulation, establish. If the dollar amount 
of any such exclusion determined for any year by ap-
plying such inflationary factor is not a multiple of 
$25, the Secretary shall round such amount to the 
next lowest multiple of $25.’’. 
(c) HOUSING CHOICE VOUCHER PROGRAM.—Para-
graph (5) of section 8(o) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f(o)(5)) is amended— 
(1) in the paragraph heading, by striking ‘‘AN-
NUAL REVIEW’’ and inserting ‘‘REVIEWS’’; 
(2) in subparagraph (A)— 
(A) by striking ‘‘the provisions of’’ and in-
serting ‘‘paragraphs (7) and (8) of section 3(a) 
and to’’; and 
(B) by striking ‘‘and shall be conducted 
upon the initial provision of housing assistance 
for the family and thereafter not less than an-
nually’’; and
(3) in subparagraph (B), by striking the second 
sentence. 
(d) 
ENHANCED
VOUCHER
PROGRAM.—Section 
8(t)(1)(D) of the United States Housing Act of 1937 (42 
U.S.C. 1437f(t)(1)(D)) is amended by striking ‘‘income’’ 
each place such term appears and inserting ‘‘annual ad-
justed income’’. 
(e) PROJECT-BASED HOUSING.—Paragraph (3) of 
section 8(c) of the United States Housing Act of 1937 
(42 U.S.C. 1437f(c)(3)) is amended by striking the last 
sentence. 
(f) IMPACT ON PUBLIC HOUSING REVENUES.— 
(1) INTERACTION
WITH
ASSET
MANAGEMENT 
RULE.—If the Secretary of Housing and Urban De-
velopment determines that the application of the 
amendments made by this section results in a reduc-
tion in the rental income of a public housing agency 
that is not de minimus during the period that the 
operating formula income is frozen at a level that 
does not fully reflect the changes made by such 
amendments, the Secretary shall make appropriate 
adjustments in the formula income of the agency. 
(2) HUD REPORTS ON PUBLIC HOUSING REV-
ENUE IMPACT.—For each of fiscal years 2008 and 
2009, the Secretary of Housing and Urban Develop-
ment shall submit a report to Congress identifying 
and calculating the impact of changes made by the 
amendments made by this section on the revenues 
and costs of operating public housing units. 
(g) EFFECTIVE
DATE
AND
TRANSITION.—The 
amendments made by this section shall apply with respect 
to fiscal year 2008 and fiscal years thereafter. 
SEC. 4. ELIGIBILITY FOR ASSISTANCE BASED ON ASSETS 
AND INCOME. 
(a) ASSETS.—Section 16 of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437n) is amended by insert-
ing after subsection (d) the following new subsection: 
‘‘(e) ELIGIBILITY FOR ASSISTANCE BASED ON AS-
SETS.— 
‘‘(1) LIMITATION ON ASSETS.—Subject to para-
graph (3) and notwithstanding any other provision 
of this Act, a dwelling unit assisted under this Act 
may not be rented and assistance under this Act 
may not be provided, either initially or at each recer-
tification of family income, to any family— 
‘‘(A) whose net family assets exceed 
$100,000, as such amount is adjusted annually 
by applying an inflationary factor as the Sec-
retary considers appropriate; or
‘‘(B) who has a present ownership interest 
in, and a legal right to reside in, real property 
that is suitable for occupancy as a residence, 
except that the prohibition under this subpara-
graph shall not apply to— 
‘‘(i) any property for which the family 
is receiving assistance under this Act; 
‘‘(ii) any person that is a victim of do-
mestic violence; or 
‘‘(iii) any family that is making a 
good faith effort to sell such property. 
‘‘(2) NET FAMILY ASSETS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘net family assets’ means, 
for all members of the household, the net cash 
value of all assets after deducting reasonable 
costs that would be incurred in disposing of real 
property, savings, stocks, bonds, and other 
forms of capital investment. Such term does not 
include interests in Indian trust land, equity ac-
counts in homeownership programs of the De-
partment of Housing and Urban Development, 
or Family Self Sufficiency accounts. 
‘‘(B) EXCLUSIONS.—Such term does not 
include—
‘‘(i) the value of personal property, ex-
cept for items of personal property of sig-
nificant value, as the public housing agen-
cy may determine; 
‘‘(ii) the value of any retirement ac-
count; 
‘‘(iii) any amounts recovered in any 
civil action or settlement based on a claim 
of malpractice, negligence, or other breach 
of duty owed to a member of the family 
and arising out of law, that resulted in a 
member of the family being disabled 
(under the meaning given such term in 
section 1614 of the Social Security Act (42 
U.S.C. 1382c)); and 
‘‘(iv) the value of any Coverdell edu-
cation savings account under section 530 
of the Internal Revenue Code of 1986 or 
any qualified tuition program under sec-
tion 529 of such Code. 
‘‘(C) TRUST
FUNDS.—In cases where a 
trust fund has been established and the trust is 
not revocable by, or under the control of, any 
member of the family or household, the value of 
the trust fund shall not be considered an asset
of a family if the fund continues to be held in 
trust. Any income distributed from the trust 
fund shall be considered income for purposes of 
section 3(b) and any calculations of annual 
family income, except in the case of medical ex-
penses for a minor. 
‘‘(D) 
SELF-CERTIFICATION.—A 
public 
housing agency or owner may determine the net 
assets of a family, for purposes of this section, 
based on the amounts reported by the family at 
the time the agency or owner reviews the fam-
ily’s income. 
‘‘(3) 
COMPLIANCE
FOR
PUBLIC
HOUSING 
DWELLING UNITS.—When recertifying family income 
with respect to families residing in public housing 
dwelling units, a public housing agency may, in the 
discretion of the agency and only pursuant to a pol-
icy that is set forth in the public housing agency 
plan under section 5A for the agency, choose not to 
enforce the limitation under paragraph (1). 
‘‘(4) AUTHORITY TO DELAY EVICTIONS.—In the 
case of a family residing in a dwelling unit assisted 
under this Act who does not comply with the limita-
tion under paragraph (1), the public housing agency 
or project owner may delay eviction or termination
of the family based on such noncompliance for a pe-
riod of not more than 6 months.’’. 
(b) INCOME.—The United States Housing Act of 
1937 is amended— 
(1) in section 3(a)(1) (42 U.S.C. 1437a(a)(1)), 
by striking the first sentence and inserting the fol-
lowing: ‘‘Dwelling units assisted under this Act may 
be rented, and assistance under this Act may be pro-
vided, whether initially or at time of recertification, 
only to families who are low-income families at the 
time such initial or continued assistance, respec-
tively, is provided, except that families residing in 
dwelling units as of the date of the enactment of the 
Section 8 Voucher Reform Act of 2007 that, under 
agreements in effect on such date of enactment, may 
have incomes up to 95 percent of local area median 
income shall continue to be eligible for assistance at 
recertification as long as they continue to comply 
with such income restrictions. When recertifying 
family income with respect to families residing in 
public housing dwelling units, a public housing agen-
cy may, in the discretion of the agency and only pur-
suant to a policy that is set forth in the public hous-
ing agency plan under section 5A for the agency, 
choose not to enforce the prohibition under the pre-
ceding sentence. When recertifying family income 
with respect to families residing in dwelling units for 
which project-based assistance is provided, a project 
owner may, in the owner’s discretion and only pur-
suant to a policy adopted by such owner, choose not 
to enforce such prohibition. In the case of a family 
residing in a dwelling unit assisted under this Act 
who does not comply with the prohibition under the 
first sentence of this paragraph, the public housing 
agency or project owner may delay eviction or termi-
nation of the family based on such noncompliance 
for a period of not more than 6 months.’’; 
(2) in section 8(o)(4) (42 U.S.C. 1437f(o)(4)), 
by striking the matter preceding subparagraph (A) 
and inserting the following: 
‘‘(4) ELIGIBLE
FAMILIES.—Assistance under 
this subsection may be provided, whether initially or 
at each recertification, only pursuant to subsection 
(t) to a family eligible for assistance under such sub-
section or to a family who at the time of such initial 
or continued assistance, respectively, is a low-income 
family that is—’’; and 
(3) in section 8(c)(4) (42 U.S.C. 1437f(c)(4)), 
by striking ‘‘at the time it initially occupied such
dwelling unit’’ and inserting ‘‘according to the re-
strictions under section 3(a)(1)’’. 
SEC. 5. TARGETING ASSISTANCE TO LOW-INCOME WORK-
ING FAMILIES. 
(a) VOUCHERS.—Section 16(b)(1) of the United 
States Housing Act of 1937 (42 U.S.C. 1437n(b)(1)) is 
amended— 
(1) by inserting after ‘‘do not exceed’’ the fol-
lowing: ‘‘the higher of (A) the poverty line (as such 
term is defined in section 673 of the Omnibus Budg-
et Reconciliation Act of 1981 (42 U.S.C. 9902), in-
cluding any revision required by such section) appli-
cable to a family of the size involved, or (B)’’; and 
(2) by inserting before the period at the end the 
following: ‘‘; and except that clause (A) of this sen-
tence shall not apply in the case of families residing 
in Puerto Rico or any other territory or possession 
of the United States’’. 
(b) PUBLIC HOUSING.—Section 16(a)(2)(A) of the 
United States Housing Act of 1937 (42 U.S.C. 
1437n(a)(2)(A)) is amended— 
(1) by inserting after ‘‘do not exceed’’ the fol-
lowing: ‘‘the higher of (i) the poverty line (as such 
term is defined in section 673 of the Omnibus Budg-
et Reconciliation Act of 1981 (42 U.S.C. 9902), in-
cluding any revision required by such section) appli-
cable to a family of the size involved, or (ii)’’; and 
(2) by inserting before the period at the end the 
following: ‘‘; and except that clause (i) of this sen-
tence shall not apply in the case of families residing 
in Puerto Rico or any other territory or possession 
of the United States’’. 
(c) PROJECT-BASED SECTION 8 ASSISTANCE.—Sec-
tion 16(c)(3) of the United States Housing Act of 1937 
(42 U.S.C. 1437n(c)(3)) is amended— 
(1) by inserting after ‘‘do not exceed’’ the fol-
lowing: ‘‘the higher of (A) the poverty line (as such 
term is defined in section 673 of the Omnibus Budg-
et Reconciliation Act of 1981 (42 U.S.C. 9902), in-
cluding any revision required by such section) appli-
cable to a family of the size involved, or (B)’’; and 
(2) by inserting before the period at the end the 
following: ‘‘; and except that clause (A) of this sen-
tence shall not apply in the case of families residing 
in Puerto Rico or any other territory or possession 
of the United States’’. 
SEC. 6. VOUCHER RENEWAL FUNDING. 
(a) IN GENERAL.—Section 8 of the United States 
Housing Act of 1937 (42 U.S.C. 1437f) is amended by
striking subsection (dd) and inserting the following new 
subsection: 
‘‘(dd) TENANT-BASED VOUCHERS.— 
‘‘(1) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated, for each of 
fiscal years 2008 through 2012, such sums as may 
be necessary for tenant-based assistance under sub-
section (o) for the following purposes: 
‘‘(A) To renew all expiring annual con-
tributions contracts for tenant-based rental as-
sistance. 
‘‘(B) To provide tenant-based rental assist-
ance for— 
‘‘(i) relocation and replacement of 
housing units that are demolished or dis-
posed of pursuant to the Omnibus Consoli-
dated Rescissions and Appropriations Act 
of 1996 (Public Law 104–134); 
‘‘(ii) conversion of section 23 projects 
to assistance under this section; 
‘‘(iii) the family unification program 
under subsection (x) of this section; 
‘‘(iv) relocation of witnesses in con-
nection with efforts to combat crime in 
public and assisted housing pursuant to a
request from a law enforcement or pros-
ecution agency; 
‘‘(v) enhanced vouchers authorized 
under subsection (t) of this section; 
‘‘(vi) vouchers in connection with the 
HOPE VI program under section 24; 
‘‘(vii) demolition or disposition of pub-
lic housing units pursuant to section 18 of 
the United States Housing Act of 1937 
(42 U.S.C. 1437p); 
‘‘(viii) mandatory and voluntary con-
versions of public housing to vouchers, pur-
suant to sections 33 and 22 of the United 
States Housing Act of 1937, respectively 
(42 U.S.C. 1437z–5, 1437t); 
‘‘(ix) vouchers necessary to comply 
with a consent decree or court order; 
‘‘(x) vouchers to replace dwelling units 
that cease to receive project-based assist-
ance under subsection (b), (c), (d), (e), or 
(v) of this section; 
‘‘(xi) relocation and replacement of 
public housing units that are demolished or 
disposed of pursuant to eminent domain, 
pursuant to a homeownership program, or
in connection with a mixed finance devel-
opment method under section 35 or other-
wise; 
‘‘(xii) tenant protection assistance, in-
cluding replacement and relocation assist-
ance; and 
‘‘(xiii) emergency voucher assistance 
for the protection of victims of domestic vi-
olence, dating violence, sexual assault, or 
stalking. 
Subject only to the availability of sufficient 
amounts provided in appropriation Acts, the 
Secretary shall provide tenant-based rental as-
sistance to replace all dwelling units that cease 
to be available as assisted housing as a result 
of clause (i), (ii), (v), (vi), (vii), (viii), (x), or 
(xi). 
‘‘(2) ALLOCATION
OF
RENEWAL
FUNDING 
AMONG PUBLIC HOUSING AGENCIES.— 
‘‘(A) From amounts appropriated for each 
year pursuant to paragraph (1)(A), the Sec-
retary shall provide renewal funding for each 
public housing agency— 
‘‘(i) based on leasing and cost data 
from the preceding calendar year, as ad-
justed by an annual adjustment factor to 
be established by the Secretary, which shall 
be established using the smallest geo-
graphical areas for which data on changes 
in rental costs are annually available; 
‘‘(ii) by making any adjustments nec-
essary to provide for the first-time renewal 
of 
vouchers 
funded 
under 
paragraph 
(1)(B) and of any incremental vouchers 
funded in previous years; 
‘‘(iii) by making any adjustments nec-
essary for full year funding of vouchers 
ported in the prior calendar year under 
subsection (r)(2); and 
‘‘(iv) by making such other adjust-
ments as the Secretary considers appro-
priate, including adjustments necessary to 
address changes in voucher utilization 
rates and voucher costs related to natural 
and other major disasters. 
‘‘(B) LEASING AND COST DATA.—For pur-
poses of subparagraph (A)(i), leasing and cost 
data shall be calculated annually by using the 
average for the preceding calendar year. Such 
leasing and cost data shall be adjusted to in-
clude vouchers that were set aside under a com-
mitment to provide project-based assistance 
under subsection (o)(13) and to exclude 
amounts funded through advances under para-
graph (3). Such leasing and cost data shall not 
include funds not appropriated for tenant-based 
assistance under section 8(o), unless the agen-
cy’s funding was prorated in the prior year and 
the agency used other funds to maintain vouch-
ers in use. 
‘‘(C) OVERLEASING.—For the purpose of 
determining allocations under subsection (A)(i), 
the leasing rate calculated for the prior cal-
endar year may exceed an agency’s authorized 
voucher level, except that such calculation in 
2009 shall not include amounts resulting from 
a leasing rate in excess of 103 percent of an 
agency’s authorized vouchers in 2008 which re-
sults from the use of accumulated amounts, as 
referred to in paragraph (4)(A). 
‘‘(D) MOVING TO WORK; HOUSING INNOVA-
TION
PROGRAM.—Notwithstanding 
subpara-
graphs (A) and (B), each public housing agency 
participating at any time in the moving to work 
demonstration under section 204 of the Depart-
ments of Veterans Affairs and Housing and 
Urban Development, and Independent Agencies 
Appropriations Act, 1996 (42 U.S.C. 1437f 
note) or in the housing innovation program 
under section 36 of this Act shall be funded 
pursuant to its agreement under such program 
and shall be subject to any pro rata adjustment 
made under subparagraph (E)(i). 
‘‘(E) PRO RATA ALLOCATION.— 
‘‘(i) INSUFFICIENT
FUNDS.—To the 
extent that amounts made available for a 
fiscal year are not sufficient to provide 
each public housing agency with the full al-
location for the agency determined pursu-
ant to subparagraphs (A) and (D), the 
Secretary shall reduce such allocation for 
each agency on a pro rata basis, except 
that renewal funding of enhanced vouchers 
under section 8(t) shall not be subject to 
such proration. 
‘‘(ii) EXCESS FUNDS.—To the extent 
that amounts made available for a fiscal 
year exceed the amount necessary to pro-
vide each housing agency with the full allo-
cation for the agency determined pursuant
to subparagraphs (A) and (D), such excess 
amounts shall be used for the purposes 
specified in subparagraphs (B) and (C) of 
paragraph (4). 
‘‘(F) PROMPT
FUNDING
ALLOCATION.— 
The Secretary shall allocate all funds under this 
subsection for each year before the latter of (i) 
February 15, or (ii) the expiration of the 45- 
day period beginning upon the enactment of the 
appropriations Act funding such renewals. 
‘‘(3) ADVANCES.— 
‘‘(A) AUTHORITY.—During the last 3 
months of each calendar year, the Secretary 
shall provide amounts to any public housing 
agency, at the request of the agency, in an 
amount up to two percent of the allocation for 
the agency for such calendar year, subject to 
subparagraph (C). 
‘‘(B) USE.—Amounts advanced under sub-
paragraph (A) may be used to pay for addi-
tional voucher costs, including costs related to 
temporary overleasing. 
‘‘(C) USE
OF
PRIOR
YEAR
AMOUNTS.— 
During the last 3 months of a calendar year, if 
amounts previously provided to a public housing
agency for tenant-based assistance for such 
year or for previous years remain unobligated 
and available to the agency— 
‘‘(i) the agency shall exhaust such 
amounts to cover any additional voucher 
costs under subparagraph (B) before 
amounts advanced under subparagraph (A) 
may be so used; and 
‘‘(ii) the amount that may be ad-
vanced under subparagraph (A) to the 
agency shall be reduced by an amount 
equal to the total of such previously pro-
vided and unobligated amounts. 
‘‘(D) 
REPAYMENT.—Amounts 
advanced 
under subparagraph (A) in a calendar year 
shall be repaid to the Secretary in the subse-
quent calendar year by reducing the amounts 
made available for such agency for such subse-
quent calendar year pursuant to allocation 
under paragraph (2) by an amount equal to the 
amount so advanced to the agency. 
‘‘(4) RECAPTURE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
recapture, from amounts provided under the 
annual contributions contract for a public hous-
ing agency for a calendar year, all accumulated 
amounts allocated under paragraph (2) and 
from previous years that are unused by the 
agency at the end of each calendar year ex-
cept— 
‘‘(i) with respect to the recapture 
under this subparagraph at the end of 
2007, an amount equal to 12.5 percent of 
the amount allocated to the public housing 
agency for such year pursuant to para-
graph (2)(A); and 
‘‘(ii) with respect to the recapture 
under this subparagraph at the end of 
each of 2008, 2009, 2010, and 2011, an 
amount equal to 5 percent of such amount 
allocated to the agency for such year. Not-
withstanding any other provision of law, 
each public housing agency may retain all 
amounts not authorized to be recaptured 
under this subparagraph, and may use 
such amounts for all authorized purposes. 
‘‘(B) REALLOCATION.—Not later than May 
1 of each calendar year, the Secretary shall—
‘‘(i) calculate the aggregate unused 
amounts for the preceding year recaptured 
pursuant to subparagraph (A); 
‘‘(ii) set aside and make available 
such amounts as the Secretary considers 
appropriate to reimburse public housing 
agencies for increased costs related to port-
ability and family self-sufficiency activities 
during such year; and 
‘‘(iii) reallocate all remaining amounts 
among public housing agencies, with pri-
ority given based on the extent to which an 
agency has utilized the amount allocated 
under paragraph (2) for the agency to 
serve eligible families. 
‘‘(C) USE.—Amounts reallocated to a pub-
lic housing agency pursuant to subparagraph 
(B)(iii) may be used only to increase voucher 
leasing rates as provided under paragraph 
(2)(C).’’. 
(b) ABSORPTION OF VOUCHERS FROM OTHER AGEN-
CIES.—Section 8(r)(2) of the United States Housing Act 
of 1937 (42 U.S.C. 1437f(r)(2)) is amended by adding 
after the period at the end the following: ‘‘The agency 
shall absorb the family into its program for voucher assist-
ance under this section and shall have priority to receive 
additional funding from the Secretary for the housing as-
sistance provided for such family from amounts made 
available pursuant to subsection (dd)(4)(B).’’. 
(c) VOUCHERS FOR PERSONS WITH DISABILITIES.— 
The Secretary of Housing and Urban Development shall 
develop and issue, to public housing agencies that received 
voucher assistance under section 8(o) for non-elderly dis-
abled families pursuant to appropriations Acts for fiscal 
years 1997 through 2002, guidance to ensure that, to the 
maximum extent practicable, such vouchers continue to be 
provided upon turnover to qualified non-elderly disabled 
families. 
SEC. 7. ADMINISTRATIVE FEES. 
(a) IN GENERAL.—Section 8(q) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(q)) is amended— 
(1) in paragraph (1), by striking subparagraphs 
(B) and (C) and inserting the following new sub-
paragraphs: 
‘‘(B) CALCULATION.—The fee under this 
subsection shall— 
‘‘(i) be payable to each public housing 
agency for each month for which a dwell-
ing unit is covered by an assistance con-
tract;
‘‘(ii) be based on the per-unit fee pay-
able to the agency in fiscal year 2003, up-
dated for each subsequent year as specified 
in subsection (iv); 
‘‘(iii) include an amount for the cost 
of issuing voucher to new participants; 
‘‘(iv) be updated each year using an 
index of changes in wage data or other ob-
jectively measurable data that reflect the 
costs of administering the program for 
such assistance, as determined by the Sec-
retary; and 
‘‘(v) include an amount for the cost of 
family self-sufficiency coordinators, as pro-
vided in section 23(h)(1). 
‘‘(C) PUBLICATION.—The Secretary shall 
cause to be published in the Federal Register 
the fee rate for each geographic area.’’; and 
(2) in paragraph (4), by striking ‘‘1999’’ and 
inserting ‘‘2007’’. 
(b) ADMINISTRATIVE FEES FOR FAMILY SELF-SUF-
FICIENCY PROGRAM COSTS.—Subsection (h) of section 23 
of the United States Housing Act of 1937 (42 U.S.C. 
1437u(h)) is amended by striking paragraph (1) and in-
serting the following new paragraph:
‘‘(1) SECTION 8 FEES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish a fee under section 8(q) for the costs 
incurred in administering the self-sufficiency 
program under this section to assist families re-
ceiving voucher assistance through section 8(o). 
‘‘(B) ELIGIBILITY FOR FEE.—The fee shall 
provide funding for family self-sufficiency coor-
dinators as follows: 
‘‘(i) BASE
FEE.—A public housing 
agency serving 25 or more participants in 
the family self-sufficiency program under 
this section shall receive a fee equal to the 
costs of employing one full-time family 
self-sufficiency coordinator. An agency 
serving fewer than 25 such participants 
shall receive a prorated fee. 
‘‘(ii) ADDITIONAL
FEE.—An agency 
that meets minimum performance stand-
ards shall receive an additional fee suffi-
cient to cover the costs of employing a sec-
ond family self-sufficiency coordinator if 
the agency has 75 or more participating 
families, and a third such coordinator if it 
has 125 or more participating families.
‘‘(iii) PREVIOUSLY
FUNDED
AGEN-
CIES.—An agency that received funding 
from the Department of Housing and 
Urban Development for more than three 
such coordinators in any of fiscal years 
1998 through 2007 shall receive funding 
for the highest number of coordinators 
funded in a single fiscal year during that 
period, provided they meet applicable size 
and performance standards. 
‘‘(iv) INITIAL
YEAR.—For the first 
year in which a public housing agency ex-
ercises its right to develop an family self- 
sufficiency program for its residents, it 
shall be entitled to funding to cover the 
costs of up to one family self-sufficiency 
coordinator, based on the size specified in 
its action plan for such program. 
‘‘(v) STATE
AND
REGIONAL
AGEN-
CIES.—For purposes of calculating the 
family self-sufficiency portion of the ad-
ministrative fee under this subparagraph, 
each administratively distinct part of a 
State or regional public housing agency 
shall be treated as a separate agency.
‘‘(vi) DETERMINATION
OF
NUMBER 
OF
COORDINATORS.—In 
determining 
whether a public housing agency meets a 
specific threshold for funding pursuant to 
this paragraph, the number of participants 
being served by the agency in its family 
self-sufficiency program shall be considered 
to be the average number of families en-
rolled in such agency’s program during the 
course of the most recent fiscal year for 
which the Department of Housing and 
Urban Development has data. 
‘‘(C) PRORATION.—If insufficient funds 
are available in any fiscal year to fund all of the 
coordinators authorized under this section, the 
first priority shall be given to funding one coor-
dinator at each agency with an existing family 
self-sufficiency program. The remaining funds 
shall be prorated based on the number of re-
maining coordinators to which each agency is 
entitled under this subparagraph. 
‘‘(D) RECAPTURE.—Any fees allocated 
under this subparagraph by the Secretary in a 
fiscal year that have not been spent by the end 
of the subsequent fiscal year shall be recaptured
by the Secretary and shall be available for pro-
viding additional fees pursuant to subparagraph 
(B)(ii). 
‘‘(E) PERFORMANCE STANDARDS.—Within 
six months after the date of the enactment of 
this paragraph, the Secretary shall publish a 
proposed rule specifying the performance stand-
ards applicable to funding under clauses (ii) 
and (iii) of subparagraph (B). Such standards 
shall include requirements applicable to the 
leveraging of in-kind services and other re-
sources to support the goals of the family self- 
sufficiency program. 
‘‘(F) DATA COLLECTION.—Public housing 
agencies receiving funding under this paragraph 
shall collect and report to the Secretary, in such 
manner as the Secretary shall require, informa-
tion on the performance of their family self-suf-
ficiency programs. 
‘‘(G) EVALUATION.—The Secretary shall 
conduct a formal and scientific evaluation of 
the effectiveness of well-run family self-suffi-
ciency programs, using random assignment of 
participants to the extent practicable. Not later 
than the expiration of the 4-year period begin-
ning upon the enactment of this paragraph, the 
Secretary shall submit an interim evaluation re-
port to the Congress. Not later than the expira-
tion of the 8-year period beginning upon such 
enactment, the Secretary shall submit a final 
evaluation report to the Congress. There is au-
thorized to be appropriated $10,000,000 to 
carry out the evaluation under this subpara-
graph. 
‘‘(H) INCENTIVES FOR INNOVATION AND 
HIGH PERFORMANCE.—The Secretary may re-
serve up to 10 percent of the amounts made 
available for administrative fees under this 
paragraph to provide support to or reward fam-
ily self-sufficiency programs that are particu-
larly innovative or highly successful in achieving 
the goals of the program.’’. 
(c) REPEAL.—Section 202 of the Departments of 
Veterans Affairs and Housing and Urban Development, 
and Independent Agencies Appropriations Act, 1997 (42 
U.S.C. 1437f note; Public Law 104–204; 110 Stat. 2893) 
is hereby repealed. 
SEC. 8. HOMEOWNERSHIP. 
(a) SECTION 8 HOMEOWNERSHIP DOWNPAYMENT 
PROGRAM.—Section 8(y)(7) of the United States Housing
Act of 1937 (42 U.S.C. 1437f(y)(7)) is amended by strik-
ing subparagraphs (A) and (B) and inserting the following 
new subparagraphs: 
‘‘(A) IN GENERAL.—Subject to the provi-
sions of this paragraph, in the case of a family 
on whose behalf rental assistance under section 
8(o) has been provided for a period of not less 
than 12 months prior to the date of receipt of 
downpayment assistance under this paragraph, 
a public housing agency may, in lieu of pro-
viding monthly assistance payments under this 
subsection on behalf of a family eligible for 
such assistance and at the discretion of the 
agency, provide a downpayment assistance 
grant in accordance with subparagraph (B). 
‘‘(B) GRANT
REQUIREMENTS.—A down-
payment assistance grant under this para-
graph— 
‘‘(i) shall be used by the family only 
as a contribution toward the downpayment 
and reasonable and customary closing 
costs required in connection with the pur-
chase of a home; 
‘‘(ii) shall be in the form of a single 
one-time grant; and
‘‘(iii) may not exceed $10,000. 
‘‘(C) NO EFFECT ON OBTAINING OUTSIDE 
SOURCES
FOR
DOWNPAYMENT
ASSISTANCE.— 
This Act may not be construed to prohibit a 
public housing agency from providing downpay-
ment assistance to families from sources other 
than a grant provided under this Act, or as de-
termined by the public housing agency.’’. 
(b) USE OF VOUCHERS FOR MANUFACTURED HOUS-
ING.—Section 8(o)(12) of the United States Housing Act 
of 1937 (42 U.S.C. 1437f(o)(12) is amended— 
(1) in subparagraph (A), by striking the period 
at the end of the first sentence and all that follows 
through ‘‘of’’ in the second sentence and inserting 
‘‘and rents’’; and 
(2) in subparagraph (B)— 
(A) in clause (i), by striking ‘‘the rent’’ 
and all that follows and inserting the following: 
‘‘rent shall mean the sum of the monthly pay-
ments made by a family assisted under this 
paragraph to amortize the cost of purchasing 
the manufactured home, including any required 
insurance and property taxes, the monthly 
amount allowed for tenant-paid utilities, and 
the monthly rent charged for the real property
on which the manufactured home is located, in-
cluding monthly management and maintenance 
charges.’’; 
(B) by striking clause (ii); and 
(C) in clause (iii)— 
(i) by inserting after the period at the 
end the following: ‘‘If the amount of the 
monthly assistance payment for a family 
exceeds the monthly rent charged for the 
real property on which the manufactured 
home is located, including monthly man-
agement and maintenance charges, a pub-
lic housing agency may pay the remainder 
to the family, lender or utility company, or 
may choose to make a single payment to 
the family for the entire monthly assist-
ance amount.’’; and 
(ii) by redesignating such clause as 
clause (ii). 
SEC. 9. PHA REPORTING OF RENT PAYMENTS TO CREDIT 
REPORTING AGENCIES. 
(a) IN GENERAL.—Section 3 of the United States 
Housing Act of 1937 (42 U.S.C. 1437a), as amended by 
the preceding provisions of this Act, is further amended 
by adding at the end the following new subsection:
‘‘(e) PHA REPORTING
OF RENT PAYMENTS
TO 
CREDIT REPORTING AGENCIES.— 
‘‘(1) AUTHORITY.—To the extent that a family 
receiving tenant-based housing choice vouchers 
under section 8 by a public housing agency agrees 
in writing to reporting under this subsection, the 
public housing agency may submit to consumer re-
porting agencies described in section 603(p) of the 
Fair Credit Reporting Act (15 U.S.C. 1681a) infor-
mation regarding the past rent payment history of 
the family with respect to the dwelling unit for 
which such assistance is provided. 
‘‘(2) FORMAT.—The Secretary, after consulta-
tion with consumer reporting agencies referred in 
paragraph (1), shall establish a system and format 
to be used by public housing agencies for reporting 
of information under such paragraph that provides 
such information in a format and manner that is 
similar to other credit information submitted to such 
consumer reporting agencies and is usable by such 
agencies.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act.
SEC. 10. PERFORMANCE ASSESSMENTS. 
Section 8(o) of the United States Housing Act of 
1937 (42 U.S.C. 1437f(o)) is amended by adding at the 
end the following new paragraph: 
‘‘(21) PERFORMANCE ASSESSMENTS.— 
‘‘(A) 
ESTABLISHMENT.—The 
Secretary 
shall, by regulation, establish standards and 
procedures for assessing the performance of 
public housing agencies in carrying out the pro-
grams for tenant-based rental assistance under 
this subsection and for homeownership assist-
ance under subsection (y). 
‘‘(B) CONTENTS.—The standards and pro-
cedures under this paragraph shall provide for 
assessment of the performance of public hous-
ing agencies in the following areas: 
‘‘(i) Quality of dwelling units obtained 
using such assistance. 
‘‘(ii) Extent of utilization of assist-
ance amounts provided to the agency and 
of authorized vouchers. 
‘‘(iii) Timeliness and accuracy of re-
porting by the agency to the Secretary. 
‘‘(iv) Effectiveness in carrying out 
policies to achieve deconcentration of pov-
erty.
‘‘(v) Reasonableness of rent burdens, 
consistent with public housing agency re-
sponsibilities under section 8(o)(1)(E)(iii). 
‘‘(vi) Accurate rent calculations and 
subsidy payments. 
‘‘(vii) Effectiveness in carrying out 
family self-sufficiency activities. 
‘‘(viii) Timeliness of actions related to 
landlord participation. 
‘‘(ix) Such other areas as the Sec-
retary considers appropriate. 
‘‘(C) PERIODIC ASSESSMENT.—Using the 
standards and procedures established under this 
paragraph, the Secretary shall conduct an as-
sessment of the performance of each public 
housing agency carrying out a program referred 
to in subparagraph (A) and shall submit a re-
port to the Congress regarding the results of 
each such assessment.’’. 
SEC. 11. PHA PROJECT-BASED ASSISTANCE. 
Section 8(o)(13) of the United States Housing Act 
of 1937 (42 U.S.C. 1437f(o)(13)) is amended— 
(1) by striking subparagraph (B) and inserting 
the following new subparagraph: 
‘‘(B) PERCENTAGE LIMITATION.—
‘‘(i) IN GENERAL.—Subject to clause 
(ii), not more than 25 percent of the fund-
ing available for tenant-based assistance 
under this section that is administered by 
the agency may be attached to structures 
pursuant to this paragraph. 
‘‘(ii) EXCEPTION.—An agency may at-
tach up to an additional 5 percent of the 
funding available for tenant-based assist-
ance under this section to structures pur-
suant to this paragraph for dwelling units 
that house individuals and families that 
meet the definition of homeless under sec-
tion 103 of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11302).’’; 
(2) by striking subparagraph (D) and inserting 
the following new subparagraph: 
‘‘(D) INCOME MIXING REQUIREMENT.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), not more than the 
greater of 25 dwelling units or 25 percent 
of the dwelling units in any project may be 
assisted under a housing assistance pay-
ment contract for project-based assistance 
pursuant to this paragraph. For purposes
of this subparagraph, the term ‘project’ 
means a single building, multiple contig-
uous buildings, or multiple buildings on 
contiguous parcels of land. 
‘‘(ii) EXCEPTIONS.— 
‘‘(I) CERTAIN
HOUSING.—The 
limitation under clause (i) shall not 
apply in the case of assistance under 
a contract for housing consisting of 
single family properties, or for dwell-
ing units that are specifically made 
available for households comprised of 
elderly families, disabled families, and 
families receiving supportive services. 
For purposes of the preceding sen-
tence, the term ‘single family prop-
erties’ means buildings with no more 
than four dwelling units. 
‘‘(II) CERTAIN AREAS.—With re-
spect to areas in which fewer than 75 
percent of families issued vouchers be-
come participants in the program, the 
public housing agency has established 
the payment standard at 110 percent 
of the fair market rent for all census
tracts in the area for the previous six 
months, and the public housing agen-
cy grants an automatic extension of 
90 days (or longer) to families with 
vouchers who are attempting to find 
housing, clause (i) shall be applied by 
substituting ‘50 percent’ for ‘25 per-
cent’.’’; 
(3) in the first sentence of subparagraph (F), 
by striking ‘‘10 years’’ and inserting ‘‘15 years’’; 
(4) in subparagraph (G)— 
(A) by inserting after the period at the end 
of the first sentence the following: ‘‘Such con-
tract may, at the election of the public housing 
agency and the owner of the structure, specify 
that such contract shall be extended for renewal 
terms of up to 15 years each, if the agency 
makes the determination required by this sub-
paragraph and the owner is in compliance with 
the terms of the contract.’’; and 
(B) by adding at the end the following: ‘‘A 
public housing agency may agree to enter into 
such a contract at the time it enters into the 
initial agreement for a housing assistance pay-
ment contract or at any time thereafter that is
before the expiration of the housing assistance 
payment contract.’’; 
(5) in subparagraph (H), by inserting before 
the period at the end of the first sentence the fol-
lowing: ‘‘, except that in the case of a contract unit 
that has been allocated low-income housing tax cred-
its and for which the rent limitation pursuant to 
such section 42 is less than the amount that would 
otherwise be permitted under this subparagraph, the 
rent for such unit may, in the sole discretion of a 
public housing agency, be established at the higher 
section 8 rent, subject only to paragraph (10)(A)’’; 
(6) in subparagraph (I)(i), by inserting before 
the semicolon the following: ‘‘, except that the con-
tract may provide that the maximum rent permitted 
for a dwelling unit shall not be less than the initial 
rent for the dwelling unit under the initial housing 
assistance payments contract covering the unit’’; 
(7) in subparagraph (J)— 
(A) by striking the fifth and sixth sen-
tences and inserting the following: ‘‘A public 
housing agency may establish and utilize proce-
dures for maintaining site-based waiting lists 
under which applicants may apply directly at, 
or otherwise designate to the public housing
agency, the project or projects in which they 
seek to reside, except that all applicants on the 
waiting list of an agency for assistance under 
this subsection shall be permitted to place their 
names on such separate list. All such proce-
dures shall comply with title VI of the Civil 
Rights Act of 1964, the Fair Housing Act, and 
other applicable civil rights laws. The owner or 
manager of a structure assisted under this 
paragraph shall not admit any family to a 
dwelling unit assisted under a contract pursu-
ant to this paragraph other than a family re-
ferred by the public housing agency from its 
waiting list, or a family on a site-based waiting 
list that complies with the requirements of this 
subparagraph. A public housing agency shall 
fully disclose to each applicant each option in 
the selection of a project in which to reside that 
is available to the applicant.’’; and 
(B) by inserting after the third sentence 
the following new sentence: ‘‘Any family who re-
sides in a dwelling unit proposed to be assisted 
under this paragraph, or in a unit to be re-
placed by a proposed unit to be assisted under 
this paragraph shall be given an absolute pref-
erence for selection for placement in the pro-
posed unit, if the family is otherwise eligible for 
assistance under this subsection.’’; and 
(8) by adding at the end the following new sub-
paragraphs: 
‘‘(L) USE IN COOPERATIVE HOUSING AND 
ELEVATOR BUILDINGS.—A public housing agen-
cy may enter into a housing assistance pay-
ments contract under this paragraph with re-
spect to— 
‘‘(i) dwelling units in cooperative 
housing; 
‘‘(ii) notwithstanding subsection (c), 
dwelling units in a high-rise elevator 
project, including such a project that is oc-
cupied by families with children, without 
review and approval of the contract by the 
Secretary. 
‘‘(M) REVIEWS.— 
‘‘(i) SUBSIDY LAYERING.—A subsidy 
layering review in accordance with section 
102(d) of the Department of Housing and 
Urban Development Reform Act of 1989 
(42 U.S.C. 3545(d)) shall not be required 
for assistance under this subparagraph in
the case of a housing assistance payments 
contract for an existing structure, or if a 
subsidy layering review has been conducted 
by the applicable State or local agency. 
‘‘(ii) ENVIRONMENTAL
REVIEW.—A 
public housing agency shall not be required 
to undertake any environmental review be-
fore entering into a housing assistance 
payments contract under this paragraph 
for an existing structure, except to the ex-
tent such a review is otherwise required by 
law or regulation. 
‘‘(N) ADMINISTRATIVE FEE.—The admin-
istrative fee applicable to the administration of 
assistance under this paragraph shall be deter-
mined in the same manner as administrative 
fees applicable to other assistance administered 
under other provisions of this subsection. 
‘‘(O) LEASES AND TENANCY.—Assistance 
provided under this paragraph shall be subject 
to the provisions of paragraph (7), except that 
subparagraph (A) of such paragraph shall not 
apply.’’.
SEC. 12. RENT BURDENS. 
(a) REVIEWS.—Section 8(o)(1) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(o)(1)) is amended 
by striking subparagraph (E) and inserting the following 
new subparagraph: 
‘‘(E) REVIEWS.— 
‘‘(i) RENT BURDENS.—The Secretary 
shall monitor rent burdens and submit a 
report to the Congress annually on the 
percentage of families assisted under this 
subsection, occupying dwelling units of any 
size, that pay more than 30 percent of 
their adjusted incomes for rent and such 
percentage that pay more than 40 percent 
of their adjusted incomes for rent. Using 
information regularly reported by public 
housing agencies, the Secretary shall pro-
vide public housing agencies, on an annual 
basis, a report with the information de-
scribed in the first sentence of this clause, 
and may require a public housing agency 
to modify a payment standard that results 
in a significant percentage of families as-
sisted under this subsection, occupying 
dwelling units of any size, paying more
than 30 percent of their adjusted incomes 
for rent. 
‘‘(ii) CONCENTRATION OF POVERTY.— 
The Secretary shall submit a report to the 
Congress annually on the degree to which 
families assisted under this subsection in 
each metropolitan area are clustered in 
lower rent, higher poverty areas and how, 
and the extent to which, greater geo-
graphic distribution of such assisted fami-
lies could be achieved, including by increas-
ing payment standards for particular com-
munities within such metropolitan areas. 
‘‘(iii) PUBLIC HOUSING AGENCY RE-
SPONSIBILITIES.—Each 
public 
housing 
agency shall make publicly available the in-
formation on rent burdens provided by the 
Secretary pursuant to clause (i), and, for 
agencies located in metropolitan areas, the 
information on concentration provided by 
the Secretary pursuant to clause (ii). If the 
percentage of families paying more than 30 
percent or 40 percent of income exceeds 
the national average for either of such cat-
egories, as reported pursuant to clause (i),
the public housing agency shall adjust the 
payment standard to eliminate excessive 
rent burdens within a reasonable time pe-
riod or explain its reasons for not making 
such adjustment. The Secretary may not 
deny the request of a public housing agen-
cy to set a payment standard up to 120 
percent of the fair market rent to remedy 
rent burdens in excess of the national aver-
age or undue concentration of families as-
sisted under this subsection in lower rent, 
higher poverty sections of a metropolitan 
area except on the basis that an agency 
has not demonstrated that its request 
meets these criteria. If a request of a pub-
lic housing agency has not been denied or 
approved with 45 days after the request is 
made, the request shall be considered to 
have been approved.’’. 
(b) PUBLIC
HOUSING
AGENCY
PLAN.—Section 
5A(d)(4) of the United States Housing Act of 1937 (42 
U.S.C. 1437c–1(d)(4)) is amended by inserting before the 
period at the end the following: ‘‘, including the report 
with respect to the agency furnished by the Secretary pur-
suant to section 8(o)(1)(E) concerning rent burdens and,
if applicable, geographic concentration of voucher holders, 
any changes in rent or other policies the public housing 
agency is making to address excessive rent burdens or con-
centration, and if the public housing agency is not adjust-
ing its payment standard, its reasons for not doing so’’. 
(c) RENT BURDENS FOR PERSONS WITH DISABIL-
ITIES.—Subparagraph (D) of section 8(o)(1) is amended 
by inserting before the period at the end the following: 
‘‘, except that a public housing agency may establish a 
payment standard of not more than 120 percent of the 
fair market rent where necessary as a reasonable accom-
modation for a person with a disability, without approval 
of the Secretary. A public housing agency may seek ap-
proval of the Secretary to use a payment standard greater 
than 120 percent of the fair market rent as a reasonable 
accommodation for a person with a disability’’. 
SEC. 13. ESTABLISHMENT OF FAIR MARKET RENT. 
(a) IN GENERAL.—Paragraph (1) of section 8(c) of 
the United States Housing Act of 1937 (42 U.S.C. 
1437f(c)(1)) is amended— 
(1) by inserting ‘‘(A)’’ after the paragraph des-
ignation; 
(2) by striking the seventh, eighth, and ninth 
sentences; and 
(3) by adding at the end the following:
‘‘(B)(i) The Secretary shall endeavor to define mar-
ket areas for purposes of this paragraph in a manner that 
results in fair market rentals that are adequate to cover 
typical rental costs of units suitable for occupancy by per-
sons assisted under this section in as wide a range of com-
munities as is feasible, including communities with low 
poverty rates. 
‘‘(ii) The Secretary at a minimum shall define a sepa-
rate market area for each— 
‘‘(I) metropolitan city, as such term is defined 
in section 102(a) of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5302(a)), with 
more than 40,000 rental dwelling units; and 
‘‘(II) urban county or portion of an urban coun-
ty, as such term is defined in such section 102(a), 
located outside the boundaries of any metropolitan 
city specified in subclause (I). 
‘‘(iii) The Secretary shall, at the request of one or 
more public housing agencies, establish a separate market 
area for part or all of the area under the jurisdiction of 
such agencies, if— 
‘‘(I) the requested market area contains at least 
20,000 rental dwelling units;
‘‘(II) the areas contained in the requested mar-
ket area are geographically contiguous and share 
similar housing market characteristics; 
‘‘(III) adequate data are available to establish 
a reliable fair market rental for the requested mar-
ket area, and for the remainder of the market area 
in which it is currently located; and 
‘‘(IV) establishing the requested market area 
would raise or lower the fair market rental by 10 
percent or more at the time the requested market 
area is established. 
For purposes of subclause (III), data for an area shall 
be considered adequate if they are sufficient to establish 
from time to time a reliable benchmark fair market rental 
based primarily on data from that area, whether or not 
those data need to be supplemented with data from a larg-
er area for purposes of annual updates. 
‘‘(iv) The Secretary shall not reduce the fair market 
rental in a market area as a result of a change in the 
percentile of the distribution of market rents used to es-
tablish the fair market rental.’’. 
(b) PAYMENT STANDARD.—Subparagraph (B) of sec-
tion 8(o)(1) of the United States Housing Act of 1937 
(42 U.S.C. 1437f(o)(1)(B)) is amended by inserting be-
fore the period at the end the following: ‘‘, except that
no public housing agency shall be required as a result of 
a reduction in the fair market rental to reduce the pay-
ment standard applied to a family continuing to reside in 
a unit for which the family was receiving assistance under 
this section at the time the fair market rental was re-
duced’’. 
SEC. 14. SCREENING OF APPLICANTS. 
Subparagraph (B) of section 8(o)(6) of the United 
States Housing Act of 1937 (1437f(o)(6)(B)) is amended 
by inserting after the period at the end of the second sen-
tence the following: ‘‘A public housing agency’s elective 
screening shall be limited to criteria that are directly re-
lated to an applicant’s ability to fulfill the obligations of 
an assisted lease and shall consider mitigating cir-
cumstances related to such applicant. Any applicant or 
participant determined to be ineligible for admission or 
continued participation to the program shall be notified 
of the basis for such determination and provided, within 
a reasonable time after the determination, an opportunity 
for an informal hearing on such determination at which 
mitigating circumstances, including remedial conduct sub-
sequent to the notice, shall be considered.’’. 
SEC. 15. ENHANCED VOUCHERS. 
(a) TREATMENT OF UNIT AND FAMILY SIZE.—Sub-
paragraph (B) of section 8(t)(1) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(t)(1)(B)) is 
amended by inserting after ‘‘eligibility event for the 
project,’’ the following: ‘‘regardless of unit and family size 
standards normally used by the administering agency (ex-
cept that tenants may be required to move to units of ap-
propriate size if available on the premises),’’. 
(b) ELIGIBILITY OF CERTAIN PROJECTS.—Notwith-
standing any other provision of law— 
(1) the property known as The Heritage Apart-
ments (FHA No. 023-44804), in Malden, Massachu-
setts, shall be considered eligible low-income housing 
for purposes of the eligibility of residents of the 
property for enhanced voucher assistance under sec-
tion 8(t) of the United States Housing Act of 1937 
(42 U.S.C. 1437f(t)), pursuant to paragraph (2)(A) 
of section 223(f) of the Low-Income Housing Pres-
ervation and Resident Homeownership Act of 1990 
(12 U.S.C. 4113(f)(2)(A)); 
(2) such residents shall receive enhanced rental 
housing vouchers upon the prepayment of the mort-
gage loan for the property under section 236 of the 
National Housing Act (12 U.S.C. 1715z–1); and 
(3) the Secretary shall approve such prepay-
ment and subsequent transfer of the property with-
out any further condition, except that the property
shall be restricted for occupancy, until the original 
maturity date of the prepaid mortgage loan, only by 
families with incomes not exceeding 80 percent of 
the adjusted median income for the area in which 
the property is located, as published by the Sec-
retary. 
Amounts for the enhanced vouchers pursuant to this sub-
section shall be provided under amounts appropriated for 
tenant-based rental assistance otherwise authorized under 
section 8(t) of the United States Housing Act of 1937. 
SEC. 16. HOUSING INNOVATION PROGRAM. 
(a) ESTABLISHMENT OF PROGRAM.—Title I of the 
United States Housing Act of 1937 (42 U.S.C. 1437 et 
seq.) is amended by adding at the end the following new 
section: 
‘‘SEC. 36. HOUSING INNOVATION PROGRAM. 
‘‘(a) PURPOSE.—The purpose of the program under 
this section is to provide public housing agencies and the 
Secretary the flexibility to design and evaluate innovative 
approaches to providing housing assistance that— 
‘‘(1) increase housing opportunities for low-in-
come families, including preventing homelessness, re-
habilitate or replace housing at risk of physical dete-
rioration or obsolescence, and develop additional af-
fordable housing;
‘‘(2) leverage other Federal, State, and local 
funding sources, including the low-income housing 
tax credit program, to expand and preserve afford-
able housing opportunities, including public housing; 
‘‘(3) provide financial incentives and other sup-
port mechanisms to families to obtain employment 
and increase earned income; 
‘‘(4) test alternative rent-setting policies to de-
termine whether rent determinations can be sim-
plified and administrative cost savings can be real-
ized while protecting extremely low- and very low-in-
come families from increased rent burdens; 
‘‘(5) are subject to rigorous evaluation to test 
the effectiveness of such innovative approaches; and 
‘‘(6) are developed with the support of the local 
community and with the substantial participation of 
affected residents. 
‘‘(b) PROGRAM AUTHORITY.— 
‘‘(1) SCOPE.—The Secretary shall carry out a 
housing innovation program under this section under 
which the Secretary may designate not more than 60 
public housing agencies to participate, at any one 
time, in the housing innovation program, in accord-
ance with subsections (c) and (d), except that, in ad-
dition to such 60 agencies, the Secretary may des-
ignate an additional 20 agencies to participate in the 
program under the terms of subsection (h). 
‘‘(2) DURATION.—The Secretary may carry out 
the housing innovation program under this section 
only during the 10-year period beginning on the date 
of the enactment of the Section 8 Voucher Reform 
Act of 2007. 
‘‘(c) PARTICIPATION
OF EXISTING MTW AGEN-
CIES.— 
‘‘(1) EXISTING MTW AGENCIES.—Subject to the 
requirements of paragraph (2), all existing MTW 
agencies shall be designated to participate in the 
program. 
‘‘(2) CONDITIONS
OF
PARTICIPATION.—The 
Secretary shall approve and transfer into the hous-
ing innovation program under this section each ex-
isting MTW agency that the Secretary determines is 
not in default under such agreement and which the 
Secretary also determines is meeting the goals and 
objectives of its moving to work plan. Each such 
agency shall, within two years after the date of the 
enactment of the Section 8 Voucher Reform Act of 
2007, make changes to its policies that were imple-
mented before such date of enactment in order to 
comply with the requirements of this section.
‘‘(d) ADDITIONAL AGENCIES.— 
‘‘(1) PROPOSALS; SELECTION PROCESS.—In ad-
dition to agencies participating in the program pur-
suant to subsection (c), the Secretary shall, within 
18 months after such date of enactment, select pub-
lic housing agencies to participate in the program 
pursuant to a competitive process that meets the fol-
lowing requirements: 
‘‘(A) Any public housing agency may be se-
lected to participate in the program, except that 
not more than 5 agencies that are near-troubled 
under the public housing assessment system 
and/or section 8 management assessment pro-
gram may be selected, and except that any 
agency that is a troubled agency under either 
such assessment program or for which the Sec-
retary has hired an alternative management en-
tity for such agency or has taken possession of 
all or any part of such agency’s public housing 
program shall not be eligible for participation. 
Any near-troubled public housing agency par-
ticipating in the program shall remain subject 
to the requirements of this Act governing ten-
ant rent contributions, eligibility, and continued 
participation, and may not adopt policies de-
scribed in subsection (e)(4) (relating to rents 
and requirements for continued occupation and 
participation). 
‘‘(B) The process provides, to the extent 
possible based on eligible agencies submitting 
applications and taking into account existing 
MTW agencies participating pursuant to sub-
section (c), for representation among agencies 
selected of agencies having various characteris-
tics, including both large and small agencies, 
agencies serving urban, suburban, and rural 
areas, and agencies in various geographical re-
gions throughout the United States, and which 
may include the selection of agencies that only 
administer the voucher program under section 
8(o). 
‘‘(C) Any agency submitting a proposal 
under this paragraph shall have provided notice 
to residents and the local community, not later 
than 30 days before the first of the two public 
meetings required under subparagraph (D). 
‘‘(D) The agency submitting a proposal 
shall hold two public meetings to receive com-
ments on the agency’s proposed application, on
the implications of changes under the proposal, 
and the possible impact on residents. 
‘‘(E) The process includes criteria for se-
lection, as follows: 
‘‘(i) The extent to which the proposal 
generally identifies existing rules and regu-
lations that impede achievement of the 
goals and objectives of the proposal and an 
explanation of why participation in the 
program is necessary to achieve such goals 
and objectives. 
‘‘(ii) The extent of commitment and 
funding for carrying out the proposal by 
local government agencies and nonprofit 
organizations, including the provision of 
additional funding and other services, and 
the extent of support for the proposal by 
residents, resident advisory boards, and 
members of the local community. 
‘‘(iii) The extent to which the agency 
has a successful history of implementing 
strategies similar to those set forth in the 
agency’s proposal. 
‘‘(iv) Whether the proposal pursues a 
priority strategy as specified in paragraph
(2). In the case of any proposal utilizing a 
such a priority strategy, the proposal shall 
be evaluated based upon— 
‘‘(I) the extent to which the pro-
posal is likely to achieve the objectives 
of developing additional housing dwell-
ing units affordable to extremely low- 
, very low-, and low-income families, 
and preserving, rehabilitating, or mod-
ernizing existing public housing dwell-
ing units; or 
‘‘(II) the extent to which the pro-
posal is likely to achieve the purposes 
of moving families toward economic 
self-sufficiency and increasing employ-
ment rates and wages of families 
without imposing a significant rent 
burden on the lowest income families, 
as well as such of the additional pur-
poses as may be identified in the pro-
posal, which may include expanding 
housing choices utilizing coordinators 
for the family self-sufficiency program 
under section 23, making more effec-
tive use of program funds, and im-
proving program management. 
‘‘(v) Such other factors as the Sec-
retary may provide, in consultation with 
participating agencies, program stake-
holders, and any entity conducting evalua-
tions pursuant to subsection (f). 
‘‘(2) PRIORITY STRATEGIES.—For purposes of 
paragraph (1)(E)(iv), the following are priority 
strategies: 
‘‘(A) 
DEVELOPMENT, 
REHABILITATION, 
AND FINANCING.—A strategy of development of 
additional affordable housing dwelling units 
and/or a strategy for preservation and physical 
rehabilitation and modernization of existing 
public housing dwelling units. Such strategies 
may include innovative financing proposals, 
leveraging of non-public housing funds (includ-
ing the low-income housing tax credit program), 
and combining of funds for assistance under 
sections 8 and 9. Each such proposal shall in-
clude detailed information about the strategies 
expected to be employed, an explanation of why 
participation in the program is necessary to em-
ploy such strategies, and numerical goals re-
garding the number of dwelling units to be de-
veloped, preserved, or rehabilitated. 
‘‘(B) RENT REFORMS.—A strategy to im-
plement rent reforms, which shall be designed 
to help families increase their earned income 
through rent and other work incentives, and 
may also test the effectiveness of achieving ad-
ministrative cost savings without increased rent 
burdens for extremely low- and very low-income 
families. 
‘‘(3) CONTRACT AMENDMENT.—After selecting 
agencies under this subsection, the Secretary shall 
promptly amend the applicable annual contributions 
contracts of such agencies to provide that— 
‘‘(A) subject to subparagraph (B), such 
agencies may implement any policies and activi-
ties that are not inconsistent with this section 
without specifying such policies and activities in 
such amendment and without negotiating or en-
tering into any other agreements with the Sec-
retary specifying such policies and activities; 
and 
‘‘(B) the activities to be implemented by 
an agency under the program in a given year 
shall be described in and subject to the require-
ments of the annual plan under subsection 
(e)(8). Upon the enactment of this section, any 
agency which has participated in the Moving to 
Work demonstration may, at its option, be sub-
ject to the provisions of this paragraph in lieu 
of any other agreement required by the Sec-
retary for participation in the program. 
‘‘(4) MAINTAINING
PARTICIPATION
RATE.—If, 
at any time after the initial selection period under 
paragraph (1), the number of public housing agen-
cies participating in the program under this section 
is fewer than 40, the Secretary shall promptly solicit 
applications from and select public housing agencies 
to participate in the program under the terms and 
conditions for application and selection provided in 
this section to increase the number of agencies par-
ticipating in the program to 40. 
‘‘(e) PROGRAM REQUIREMENTS.— 
‘‘(1) PROGRAM FUNDS.— 
‘‘(A) IN GENERAL.—To carry out a hous-
ing innovation program under this section, the 
participating agency may use amounts provided 
to the agency from the Operating Fund under 
section 9(e), amounts provided to the agency 
from the Capital Fund under section 9(d), and
amounts provided to the agency for voucher as-
sistance under section 8(o). Such program 
funds may be used for any activities that are 
authorized by section 8(o) or 9, or for other ac-
tivities that are not inconsistent with this sec-
tion, which shall include, without limitation— 
‘‘(i) providing capital and operating 
assistance, and financing for housing pre-
viously developed or operated pursuant to 
a contract between the Secretary and such 
agency; 
‘‘(ii) the acquisition, new construction, 
rehabilitation, financing, and provision of 
capital or operating assistance for low-in-
come housing (including housing other 
than public housing) and related facilities, 
which may be for terms exceeding the term 
of the program under this section in order 
to secure other financing for such housing; 
‘‘(iii) costs of site acquisition and im-
provement, providing utility services, demo-
lition, planning, and administration of ac-
tivities under this paragraph; 
‘‘(iv) housing counseling for low-in-
come families in connection with rental or
homeownership assistance provided under 
the program; 
‘‘(v) safety, security, law enforcement, 
and anticrime activities appropriate to pro-
tect and support families assisted under 
the program; 
‘‘(vi) tenant-based rental assistance, 
which may include the project-basing of 
such assistance; and 
‘‘(vii) appropriate and reasonable fi-
nancial assistance that is required to pre-
serve low-income housing otherwise as-
sisted under programs administered by the 
Secretary or under State or local low-in-
come housing programs. 
‘‘(B) 
COMBINING
FUNDS.—Notwith-
standing any other provision of law, a partici-
pating agency may combine and use program 
funds for any activities authorized under this 
section, except that a participating agency may 
use funds provided for assistance under section 
8(o) for activities other than those authorized 
under section 8(o) only if (i) in the calendar 
year prior to its participation in the program, 
the agency utilized not less than 95 percent of