IB 
Union Calendar No. 300 
114TH CONGRESS 
2D SESSION 
H. R. 3700 
[Report No. 114–397] 
To provide housing opportunities in the United States through modernization 
of various housing programs, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 7, 2015 
Mr. LUETKEMEYER introduced the following bill; which was referred to the 
Committee on Financial Services 
JANUARY 28, 2016 
Additional sponsors: Mr. CLEAVER, Mr. SHERMAN, Mr. PITTENGER, Mr. 
PEARCE, Mr. ROTHFUS, Mr. CAPUANO, Mr. BARR, Mr. POSEY, Mr. SES-
SIONS, Mr. RIBBLE, and Mr. MCHENRY 
JANUARY 28, 2016 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on October 7, 2015] 
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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 
‘‘Housing Opportunity Through Modernization Act of 
2015’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—SECTION 8 RENTAL ASSISTANCE AND PUBLIC HOUSING 
Sec. 101. Inspection of dwelling units. 
Sec. 102. Income reviews. 
Sec. 103. Limitation on public housing tenancy for over-income families. 
Sec. 104. Limitation on eligibility for assistance based on assets. 
Sec. 105. Units owned by public housing agencies. 
Sec. 106. PHA project-based assistance. 
Sec. 107. Establishment of fair market rent. 
Sec. 108. Collection of utility data. 
Sec. 109. Public housing Capital and Operating Funds. 
Sec. 110. Family unification program for children aging out of foster care. 
TITLE II—RURAL HOUSING 
Sec. 201. Delegation of guaranteed rural housing loan approval. 
TITLE III—FHA MORTGAGE INSURANCE FOR CONDOMINIUMS 
Sec. 301. Modification of FHA requirements for mortgage insurance for con-
dominiums. 
TITLE IV—HOUSING REFORMS FOR THE HOMELESS AND FOR 
VETERANS 
Sec. 401. Definition of geographic area for Continuum of Care Program. 
Sec. 402. Inclusion of public housing agencies and local redevelopment authorities 
in emergency solutions grants. 
Sec. 403. Special assistant for Veterans Affairs in the Department of Housing 
and Urban Development. 
Sec. 404. Annual supplemental report on veterans homelessness. 
TITLE V—MISCELLANEOUS 
Sec. 501. Inclusion of Disaster Housing Assistance Program in certain fraud and 
abuse prevention measures. 
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Sec. 502. Energy efficiency requirements under Self-Help Homeownership Oppor-
tunity program. 
Sec. 503. Data exchange standardization for improved interoperability. 
TITLE I—SECTION 8 RENTAL AS-
SISTANCE AND PUBLIC HOUS-
ING 
SEC. 101. INSPECTION OF DWELLING UNITS. 
(a) IN GENERAL.—Section 8(o)(8) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(o)(8)) is amended— 
(1) by striking subparagraph (A) and inserting 
the following new subparagraph: 
‘‘(A) INITIAL INSPECTION.— 
‘‘(i) IN GENERAL.—For each dwelling 
unit for which a housing assistance pay-
ment contract is established under this sub-
section, the public housing agency (or other 
entity pursuant to paragraph (11)) shall 
inspect the unit before any assistance pay-
ment is made to determine whether the 
dwelling unit meets the housing quality 
standards under subparagraph (B), except 
as provided in clause (ii) or (iii) of this 
subparagraph. 
‘‘(ii) 
CORRECTION
OF
NON-LIFE- 
THREATENING CONDITIONS.—In the case of 
any dwelling unit that is determined, pur-
suant to an inspection under clause (i), not 
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to meet the housing quality standards under 
subparagraph (B), assistance payments 
may be made for the unit notwithstanding 
subparagraph (C) if failure to meet such 
standards is a result only of non-life-threat-
ening conditions, as such conditions are es-
tablished by the Secretary. A public housing 
agency making assistance payments pursu-
ant to this clause for a dwelling unit shall, 
30 days after the beginning of the period for 
which such payments are made, withhold 
any assistance payments for the unit if any 
deficiency resulting in noncompliance with 
the housing quality standards has not been 
corrected by such time. The public housing 
agency shall recommence assistance pay-
ments when such deficiency has been cor-
rected, and may use any payments withheld 
to make assistance payments relating to the 
period during which payments were with-
held. 
‘‘(iii) USE OF ALTERNATIVE INSPEC-
TION
METHOD
FOR
INTERIM
PERIOD.—In 
the case of any property that within the 
previous 24 months has met the require-
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ments of an inspection that qualifies as an 
alternative inspection method pursuant to 
subparagraph (E), a public housing agency 
may authorize occupancy before the inspec-
tion under clause (i) has been completed, 
and may make assistance payments retro-
active to the beginning of the lease term 
after the unit has been determined pursuant 
to an inspection under clause (i) to meet the 
housing quality standards under subpara-
graph (B). This clause may not be con-
strued to exempt any dwelling unit from 
compliance with the requirements of sub-
paragraph (D).’’; 
(2) by redesignating subparagraph (G) as sub-
paragraph (H); and 
(3) by inserting after subparagraph (F) the fol-
lowing new subparagraph: 
‘‘(G) ENFORCEMENT OF HOUSING QUALITY 
STANDARDS.— 
‘‘(i) DETERMINATION OF NONCOMPLI-
ANCE.—A dwelling unit that is covered by 
a housing assistance payments contract 
under this subsection shall be considered, for 
purposes of subparagraphs (D) and (F), to 
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be in noncompliance with the housing qual-
ity standards under subparagraph (B) if— 
‘‘(I) the public housing agency or 
an inspector authorized by the State or 
unit of local government determines 
upon inspection of the unit that the 
unit fails to comply with such stand-
ards; 
‘‘(II) the agency or inspector noti-
fies the owner of the unit in writing of 
such failure to comply; and 
‘‘(III) the failure to comply is not 
corrected— 
‘‘(aa) in the case of any such 
failure that is a result of life- 
threatening conditions, within 24 
hours after such notice has been 
provided; and 
‘‘(bb) in the case of any such 
failure that is a result of non-life- 
threatening conditions, within 30 
days after such notice has been 
provided or such other reasonable 
longer period as the public hous-
ing agency may establish. 
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‘‘(ii) WITHHOLDING
OF
ASSISTANCE 
AMOUNTS DURING CORRECTION.—The pub-
lic housing agency may withhold assistance 
amounts under this subsection with respect 
to a dwelling unit for which a notice pursu-
ant to clause (i)(II), of failure to comply 
with housing quality standards under sub-
paragraph (B) as determined pursuant to 
an inspection conducted under subpara-
graph (D) or (F), has been provided. If the 
unit is brought into compliance with such 
housing quality standards during the peri-
ods referred to in clause (i)(III), the public 
housing agency shall recommence assistance 
payments and may use any amounts with-
held during the correction period to make 
assistance payments relating to the period 
during which payments were withheld. 
‘‘(iii) ABATEMENT
OF
ASSISTANCE 
AMOUNTS.—The public housing agency shall 
abate all of the assistance amounts under 
this subsection with respect to a dwelling 
unit that is determined, pursuant to clause 
(i) of this subparagraph, to be in non-
compliance with housing quality standards 
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cy may establish, the tenant will 
have to move; and 
‘‘(II) issue the tenant the nec-
essary forms to allow the tenant to 
move to another dwelling unit and 
transfer the rental assistance to that 
unit. 
‘‘(v) PROTECTION
OF
TENANTS.—An 
owner of a dwelling unit may not terminate 
the tenancy of any tenant because of the 
withholding or abatement of assistance pur-
suant to this subparagraph. During the pe-
riod that assistance is abated pursuant to 
this subparagraph, the tenant may termi-
nate the tenancy by notifying the owner. 
‘‘(vi) TERMINATION OF LEASE OR AS-
SISTANCE PAYMENTS CONTRACT.—If assist-
ance amounts under this section for a dwell-
ing unit are abated pursuant to clause (iii) 
and the owner does not correct the non-
compliance within 60 days after the effec-
tive date of the determination of noncompli-
ance under clause (i), or such other reason-
able longer period as the public housing 
agency may establish, the agency shall ter-
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minate the housing assistance payments 
contract for the dwelling unit. 
‘‘(vii) RELOCATION.— 
‘‘(I) LEASE OF NEW UNIT.—The 
agency shall provide the family resid-
ing in such a dwelling unit a period of 
90 days or such longer period as the 
public housing agency determines is 
reasonably necessary to lease a new 
unit, beginning upon termination of 
the contract, to lease a new residence 
with tenant-based rental assistance 
under this section. 
‘‘(II) AVAILABILITY
OF
PUBLIC 
HOUSING UNITS.—If the family is un-
able to lease such a new residence dur-
ing such period, the public housing 
agency shall, at the option of the fam-
ily, provide such family a preference 
for occupancy in a dwelling unit of 
public housing that is owned or oper-
ated by the agency that first becomes 
available for occupancy after the expi-
ration of such period. 
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‘‘(III) ASSISTANCE
IN
FINDING 
UNIT.—The public housing agency may 
provide assistance to the family in 
finding a new residence, including use 
of up to two months of any assistance 
amounts withheld or abated pursuant 
to clause (ii) or (iii), respectively, for 
costs directly associated with relocation 
of the family to a new residence, which 
shall include security deposits as nec-
essary and may include reimburse-
ments for reasonable moving expenses 
incurred by the household, as estab-
lished by the Secretary. The agency 
may require that a family receiving 
assistance for a security deposit shall 
remit, to the extent of such assistance, 
the amount of any security deposit re-
funds made by the owner of the dwell-
ing unit for which the lease was termi-
nated. 
‘‘(viii) TENANT-CAUSED DAMAGES.—If 
a public housing agency determines that 
any damage to a dwelling unit that results 
in a failure of the dwelling unit to comply 
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with housing quality standards under sub-
paragraph (B), other than any damage re-
sulting from ordinary use, was caused by 
the tenant, any member of the tenant’s 
household, or any guest or other person 
under the tenant’s control, the agency may 
waive the applicability of this subpara-
graph, except that this clause shall not ex-
onerate a tenant from any liability other-
wise existing under applicable law for dam-
ages to the premises caused by such tenant. 
‘‘(ix) APPLICABILITY.—This subpara-
graph shall apply to any dwelling unit for 
which a housing assistance payments con-
tract is entered into or renewed after the 
date of the effectiveness of the regulations 
implementing this subparagraph.’’. 
(b) EFFECTIVE DATE.—The Secretary of Housing and 
Urban Development shall issue notice or regulations to im-
plement subsection (a) of this section and such subsection 
shall take effect upon such issuance. 
SEC. 102. INCOME REVIEWS. 
(a) INCOME REVIEWS FOR PUBLIC HOUSING AND SEC-
TION 8 PROGRAMS.—Section 3 of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437a) is amended— 
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(1) in subsection (a)— 
(A) in the second sentence of paragraph (1), 
by striking ‘‘at least annually’’ and inserting 
‘‘pursuant to paragraph (6)’’; and 
(B) by adding at the end the following new 
paragraphs: 
‘‘(6) REVIEWS OF FAMILY INCOME.— 
‘‘(A) FREQUENCY.—Reviews of family in-
come for purposes of this section shall be made— 
‘‘(i) in the case of all families, upon 
the initial provision of housing assistance 
for the family; 
‘‘(ii) annually thereafter, except as 
provided in paragraph (1) with respect to 
fixed-income families; 
‘‘(iii) upon the request of the family, at 
any time the income or deductions (under 
subsection (b)(5)) of the family change by 
an amount that is estimated to result in a 
decrease of 10 percent (or such lower 
amount as the Secretary may, by notice, es-
tablish, or permit the public housing agency 
or owner to establish) or more in annual 
adjusted income; and 
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‘‘(iv) at any time the income or deduc-
tions (under subsection (b)(5)) of the family 
change by an amount that is estimated to 
result in an increase of 10 percent or more 
in annual adjusted income, or such other 
amount as the Secretary may by notice es-
tablish, except that any increase in the 
earned income of a family shall not be con-
sidered for purposes of this clause (except 
that earned income may be considered if the 
increase corresponds to previous decreases 
under clause (iii)), except that a public 
housing agency or owner may elect not to 
conduct such review in the last three months 
of a certification period. 
‘‘(B) IN GENERAL.—Reviews of family in-
come for purposes of this section shall be subject 
to the provisions of section 904 of the Stewart B. 
McKinney Homeless Assistance Amendments Act 
of 1988 (42 U.S.C. 3544). 
‘‘(7) CALCULATION OF INCOME.— 
‘‘(A) USE OF CURRENT YEAR INCOME.—In 
determining family income for initial occupancy 
or provision of housing assistance pursuant to 
clause (i) of paragraph (6)(A) or pursuant to re-
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the application of any deductions based on time-
ly 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 fami-
lies under part A of title IV of the Social Secu-
rity Act, a program for Medicaid assistance 
under a State plan approved under title XIX of 
the Social Security Act, and the supplemental 
nutrition assistance program (as such term is 
defined in section 3 of the Food and Nutrition 
Act of 2008 (7 U.S.C. 2012))). The Secretary 
shall, in consultation with other appropriate 
Federal agencies, develop procedures to enable 
public housing agencies and owners to have ac-
cess to such income determinations made by 
other means-tested Federal programs that the 
Secretary determines to have comparable reli-
ability. Exchanges of such information shall be 
subject to the same limitations and tenant pro-
tections provided under section 904 of the Stew-
art B. McKinney Homeless Assistance Act 
Amendments of 1988 (42 U.S.C. 3544) with re-
spect to information obtained under the require-
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ments of section 303(i) of the Social Security Act 
(42 U.S.C. 503(i)). 
‘‘(E) PHA AND
OWNER
COMPLIANCE.—A 
public housing agency or owner may not be con-
sidered to fail to comply with this paragraph or 
paragraph (6) due solely to any de minimis 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 subsection 
(d). 
(b) CERTIFICATION REGARDING HARDSHIP EXCEP-
TION TO MINIMUM MONTHLY RENT.—Not later than the ex-
piration of the 6-month period beginning on the date of the 
enactment of this Act, the Secretary of Housing and Urban 
Development shall submit to the Congress a certification 
that the hardship and tenant protection provisions in clause 
(i) of section 3(a)(3)(B) of the United States Housing Act 
of 1937 (42 U.S.C. 1437a(a)(3)(B)(i)) are being enforced 
at such time and that the Secretary will continue to provide 
due consideration to the hardship circumstances of persons 
assisted under relevant programs of this Act. 
(c) INCOME; ADJUSTED INCOME.—Section 3(b) of the 
United States Housing Act of 1937 (42 U.S.C. 1437a(b)) 
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is amended by striking paragraphs (4) and (5) and insert-
ing the following new paragraphs: 
‘‘(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 cri-
teria prescribed by the Secretary, in consultation with 
the Secretary of Agriculture, subject to the following 
requirements: 
‘‘(A) INCLUDED AMOUNTS.—Such term in-
cludes recurring gifts and receipts, actual income 
from assets, and profit or loss from a business. 
‘‘(B) EXCLUDED
AMOUNTS.—Such term 
does not include— 
‘‘(i) any imputed return on assets, ex-
cept to the extent that net family assets ex-
ceed $50,000, except that such amount (as it 
may have been previously adjusted) shall be 
adjusted for inflation annually by the Sec-
retary in accordance with an inflationary 
index selected by the Secretary; 
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‘‘(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)); 
‘‘(iii) deferred disability benefits from 
the Department of Veterans Affairs that are 
received in a lump sum amount or in pro-
spective monthly amounts; 
‘‘(iv) any expenses related to aid and 
attendance under section 1521 of title 38, 
United States Code, to veterans who are in 
need of regular aid and attendance; and 
‘‘(v) exclusions from income as estab-
lished by the Secretary by regulation or no-
tice, or any amount required by Federal 
law to be excluded from consideration as in-
come. 
‘‘(C) EARNED INCOME OF STUDENTS.—Such 
term does not include— 
‘‘(i) earned income, up to an amount 
as the Secretary may by regulation estab-
lish, of any dependent earned during any 
period that such dependent is attending 
school or vocational training on a full-time 
basis; or 
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‘‘(ii) any grant-in-aid or scholarship 
amounts related to such attendance used— 
‘‘(I) for the cost of tuition or 
books; or 
‘‘(II) in such amounts as the Sec-
retary may allow, for the cost of room 
and board. 
‘‘(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) 
RECORDKEEPING.—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. 
‘‘(5) ADJUSTED INCOME.—The term ‘adjusted in-
come’ 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: 
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