I 
109TH CONGRESS 
2D SESSION 
H. R. 5561 
To provide housing assistance for very low-income veterans. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 8, 2006 
Mr. ANDREWS (for himself and Mr. RENZI) introduced the following bill; 
which was referred to the Committee on Financial Services, and in addi-
tion to the Committees on Veterans’ Affairs and Ways and Means, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To provide housing assistance for very low-income veterans. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Homes for Heroes 
Act’’. 
SEC. 2. SUPPORTIVE HOUSING FOR VERY LOW-INCOME 
VETERAN FAMILIES. 
(a) PURPOSE.—The purposes of this section are— 
(1) to expand the supply of permanent housing 
for very low-income veteran families; and 
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(2) to provide supportive services through such 
housing to support the needs of such veteran fami-
lies. 
(b) AUTHORITY.—The Secretary of Housing and 
Urban Development shall, to the extent amounts are made 
available for assistance under this section and the Sec-
retary receives approvable applications for such assistance, 
provide assistance to private nonprofit organizations and 
consumer cooperatives to expand the supply of supportive 
housing for very low-income veteran families. Such assist-
ance shall be available for use to plan for and finance the 
construction, reconstruction, or moderate or substantial 
rehabilitation of a structure or a portion of a structure, 
or the acquisition of a structure, to be used as supportive 
housing for very low-income veteran families in accordance 
with this section. Assistance may also cover the cost of 
real property acquisition, site improvement, conversion, 
demolition, relocation, and other expenses that the Sec-
retary determines are necessary to expand the supply of 
supportive housing for very low-income veteran families. 
(c) FORMS OF ASSISTANCE.—Assistance under this 
section shall be made available in the following forms: 
(1) PLANNING
GRANTS.—Assistance may be 
provided as a grant for costs of planning a project 
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to be used as supportive housing for very low-income 
veteran families. 
(2) CAPITAL
ADVANCES.—Assistance may be 
provided as capital advance under this paragraph for 
a project, which shall— 
(A) bear no interest; 
(B) not be required to be repaid so long as 
the housing remains available for occupancy by 
very low-income veteran families in accordance 
with this section; and 
(C) be in an amount calculated in accord-
ance with the development cost limitation estab-
lished pursuant to subsection (h). 
(3) PROJECT RENTAL ASSISTANCE.—Assistance 
may be provided as project rental assistance, under 
an annual contract that— 
(A) obligates the Secretary to make 
monthly payments to cover any part of the 
costs attributed to units occupied (or, as ap-
proved by the Secretary, held for occupancy) by 
very low-income veteran families that is not met 
from project income; 
(B) provides for the project not more than 
the sum of the initial annual project rentals for 
all units so occupied and any initial utility al-
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lowances for such units, as approved by the 
Secretary; 
(C) any contract amounts not used by a 
project in any year shall remain available to the 
project until the expiration of the contract; 
(D) provides that the Secretary shall, to 
the extent appropriations for such purpose are 
available, adjust the annual contract amount if 
the sum of the project income and the amount 
of assistance payments available under this 
paragraph are inadequate to provide for reason-
able project costs. 
(d) TENANT RENT CONTRIBUTION.—A very low-in-
come veteran family shall pay as rent for a dwelling unit 
assisted under this section the highest of the following 
amounts, rounded to the nearest dollar: 
(1) 30 percent of the veteran family’s adjusted 
monthly income. 
(2) 10 percent of the veteran family’s monthly 
income. 
(3) If the veteran family is receiving payments 
for welfare assistance from a public agency and a 
part of such payments, adjusted in accordance with 
the veteran family’s actual housing costs, is specifi-
cally designated by such agency to meet the veteran 
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family’s housing costs, the portion of such payments 
which is so designated. 
(e) TERM OF COMMITMENT.— 
(1) USE LIMITATIONS.—All units in housing as-
sisted under this section shall be made available for 
occupancy by very low-income veteran families for 
not less than 15 years. 
(2) CONTRACT TERMS.—The initial term of a 
contract entered into under subsection (c)(2) shall 
be 60 months. The Secretary shall, to the extent ap-
proved in appropriation Acts, extend any expiring 
contract for a term of not less than 12 months. In 
order to facilitate the orderly extension of expiring 
contracts, the Secretary may make commitments to 
extend expiring contracts during the year prior to 
the date of expiration. 
(f) APPLICATIONS.—Amounts made available under 
this section shall be allocated by the Secretary among ap-
provable applications submitted by private nonprofit orga-
nizations and consumer cooperatives. Applications for as-
sistance under this section shall be submitted by an appli-
cant in such form and in accordance with such procedures 
as the Secretary shall establish. Such applications shall 
contain— 
(1) a description of the proposed housing; 
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(2) a description of the assistance the applicant 
seeks under this section; 
(3) a description of (A) the supportive services 
to be provided to the persons occupying such hous-
ing; (B) the manner in which such services will be 
provided to such persons, including, in the case of 
frail elderly persons (as such term is defined in sec-
tion 202 of the Housing Act of 1959 (12 U.S.C. 
1701q)), evidence of such residential supervision as 
the Secretary determines is necessary to facilitate 
the adequate provision of such services; and (C) the 
public or private sources of assistance that can rea-
sonably be expected to fund or provide such services; 
(4) a certification from the public official re-
sponsible for submitting a housing strategy for the 
jurisdiction to be served in accordance with section 
105 of the Cranston-Gonzalez National Affordable 
Housing Act that the proposed project is consistent 
with the approved housing strategy; and 
(5) such other information or certifications that 
the Secretary determines to be necessary or appro-
priate to achieve the purposes of this section. 
The Secretary shall not reject an application on technical 
grounds without giving notice of that rejection and the 
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basis therefor to the applicant and affording the applicant 
an opportunity to respond. 
(g) SELECTION CRITERIA.—The Secretary shall es-
tablish selection criteria for assistance under this section, 
which shall include— 
(1) criteria based upon— 
(A) the ability of the applicant to develop 
and operate the proposed housing; 
(B) the need for supportive housing for 
very low-income veteran families in the area to 
be served; 
(C) the extent to which the proposed size 
and unit mix of the housing will enable the ap-
plicant to manage and operate the housing effi-
ciently and ensure that the provision of sup-
portive services will be accomplished in an eco-
nomical fashion; 
(D) the extent to which the proposed de-
sign of the housing will meet the physical needs 
of very low-income veteran families; 
(E) the extent to which the applicant has 
demonstrated that the supportive services iden-
tified pursuant to subsection (f)(4) will be pro-
vided on a consistent, long-term basis; 
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(F) the extent to which the proposed de-
sign of the housing will accommodate the provi-
sion of supportive services that are expected to 
be needed, either initially or over the useful life 
of the housing, by the very low-income veterans 
the housing is intended to serve; and 
(G) such other factors as the Secretary de-
termines to be appropriate to ensure that funds 
made available under this section are used ef-
fectively; 
(2) a preference in such selection for applica-
tions proposing housing to be reserved for occupancy 
by very low-income veteran families who are home-
less (as such term is defined in section 103 of the 
McKinney-Vento Homeless Assistance Act (42 
U.S.C. 11302); and 
(3) criteria appropriate to consider the need for 
supportive housing for very low-income veteran fami-
lies in nonmetropolitan areas and by Indian tribes. 
(h) PROVISION OF SUPPORTIVE SERVICES TO VET-
ERAN FAMILIES.— 
(1) IN GENERAL.—In carrying out the provi-
sions of this section, the Secretary shall ensure that 
housing assisted under this section provides a range 
of services tailored to the needs of the very low-in-
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come veteran families occupying such housing, which 
may include services for— 
(A) outreach; 
(B) health (including counseling, mental 
health, substance abuse, and post-traumatic 
stress disorder) diagnosis and treatment; 
(C) habilitation and rehabilitation; 
(D) case management; 
(E) daily living; 
(F) personal financial planning; 
(G) transportation; 
(H) vocation; 
(I) employment and training; 
(J) education; 
(K) assistance in obtaining veterans bene-
fits and public benefits, including health and 
medical care provided by the Department of 
Veterans Affairs; 
(L) assistance in obtaining income support; 
(M) assistance in obtaining health insur-
ance; 
(N) fiduciary and representative payee; 
(O) legal aid; 
(P) child care; 
(Q) housing counseling; 
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(R) service coordination; and 
(S) other services necessary for maintain-
ing independent living. 
(2) LOCAL COORDINATION OF SERVICES.—The 
Secretary shall ensure that owners of housing as-
sisted under this section have the managerial capac-
ity to— 
(A) assess on an ongoing basis the service 
needs of residents; 
(B) coordinate the provision of supportive 
services and tailor such services to the indi-
vidual needs of residents; and 
(C) seek on a continuous basis new sources 
of assistance to ensure the long-term provision 
of supportive services. 
Any cost associated with this subsection shall be an 
eligible cost under subsections (c)(3) and (i). 
(i) FINANCIAL ASSISTANCE FOR SERVICES.— 
(1) IN GENERAL.—The Secretary of Veterans 
Affairs shall, to the extent amounts are available for 
assistance under this subsection pursuant to sub-
section (o)(2), provide financial assistance for the 
provision of supportive services, and for coordinating 
the provision of such services, to very low-income 
veteran families occupying housing assisted under 
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this section. Such assistance shall be made through 
payments to owners of such housing for each resi-
dent of the housing based on the formula established 
under paragraph (2). 
(2) FORMULA.—The Secretary of Veterans Af-
fairs shall establish a formula to determine the rate 
of the payments to be provided under this sub-
section. The formula shall determine a rate for each 
resident of the housing assisted under this section 
(which shall be adjusted not less than annually to 
take into consideration changes in the cost of living). 
(j) DEVELOPMENT COST LIMITATIONS.— 
(1) IN GENERAL.—The Secretary shall periodi-
cally establish development cost limitations by mar-
ket area for various types and sizes of supportive 
housing for very low-income veteran families by pub-
lishing a notice of the cost limitations in the Federal 
Register. The cost limitations shall reflect— 
(A) the cost of construction, reconstruc-
tion, or moderate or substantial rehabilitation 
of supportive housing for very low-income vet-
eran families that meets applicable State and 
local housing and building codes; 
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(B) the cost of movables necessary to the 
basic operation of the housing, as determined 
by the Secretary; 
(C) the cost of special design features nec-
essary to make the housing accessible to very 
low-income veteran families; 
(D) the cost of congregate space necessary 
to accommodate the provision of supportive 
services to veteran families; 
(E) if the housing is newly constructed, the 
cost of meeting the energy efficiency standards 
promulgated by the Secretary in accordance 
with section 109 of the Cranston-Gonzalez Na-
tional Affordable Housing Act; and 
(F) the cost of land, including necessary 
site improvement. 
In establishing development cost limitations for a 
given market area under this subsection, the Sec-
retary shall use data that reflect currently prevailing 
costs of construction, reconstruction, or moderate or 
substantial rehabilitation, and land acquisition in the 
area. For purposes of this paragraph, the term 
‘‘congregate space’’ shall include space for cafeterias 
or dining halls, community rooms or buildings, child 
care centers, workshops, adult day health facilities, 
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or other outpatient health facilities, or other essen-
tial service facilities. Neither this section nor any 
other provision of law may be construed as prohib-
iting or preventing the location and operation, in a 
project assisted under this section, of commercial fa-
cilities for the benefit of residents of the project and 
the community in which the project is located, ex-
cept that assistance made available under this sec-
tion may not be used to subsidize any such commer-
cial facility. 
(2) ACQUISITION.—In the case of existing hous-
ing and related facilities to be acquired, the cost lim-
itations shall include— 
(A) the cost of acquiring such housing, 
(B) the cost of rehabilitation, alteration, 
conversion, or improvement, including the mod-
erate or substantial rehabilitation thereof, and 
(C) the cost of the land on which the hous-
ing and related facilities are located. 
(3) ANNUAL
ADJUSTMENTS.—The Secretary 
shall adjust the cost limitation not less than annu-
ally to reflect changes in the general level of con-
struction, reconstruction, and moderate and substan-
tial rehabilitation costs. 
(4) INCENTIVES FOR SAVINGS.— 
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(A) SPECIAL
HOUSING
ACCOUNT.—The 
Secretary shall use the development cost limita-
tions established under paragraph (1) or (2) to 
calculate the amount of financing to be made 
available to individual owners. Owners which 
incur actual development costs that are less 
than the amount of financing shall be entitled 
to retain 50 percent of the savings in a special 
housing account. Such percentage shall be in-
creased to 75 percent for owners which add en-
ergy efficiency features which— 
(i) exceed the energy efficiency stand-
ards promulgated by the Secretary in ac-
cordance with section 109 of the Cranston- 
Gonzalez National Affordable Housing Act; 
(ii) substantially reduce the life-cycle 
cost of the housing; 
(iii) reduce gross rent requirements; 
and 
(iv) enhance tenant comfort and con-
venience. 
(B) USES.—The special housing account 
established under subparagraph (A) may be 
used (i) to provide services to residents of the 
housing or funds set aside for replacement re-
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serves, or (ii) for such other purposes as deter-
mined by the Secretary. 
(5) DESIGN FLEXIBILITY.—The Secretary shall, 
to the extent practicable, give owners the flexibility 
to design housing appropriate to their location and 
proposed resident population within broadly defined 
parameters. 
(6) USE OF FUNDS FROM OTHER SOURCES.— 
An owner shall be permitted voluntarily to provide 
funds from sources other than this section for amen-
ities and other features of appropriate design and 
construction suitable for supportive housing under 
this section if the cost of such amenities is (A) not 
financed with the advance, and (B) is not taken into 
account in determining the amount of Federal as-
sistance or of the rent contribution of tenants. Not-
withstanding any other provision of law, assistance 
amounts provided under this section may be treated 
as amounts not derived from a Federal grant. 
(k) TENANT SELECTION.— 
(1) IN GENERAL.—An owner shall adopt writ-
ten tenant selection procedures that are satisfactory 
to the Secretary as (A) consistent with the purpose 
of improving housing opportunities for very low-in-
come veteran families; and (B) reasonably related to 
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program eligibility and an applicant’s ability to per-
form the obligations of the lease. Such tenant selec-
tion procedures shall comply with subtitle C of title 
VI of the Housing and Community Development Act 
of 1992 and any regulations issued under such sub-
title. Owners shall promptly notify in writing any re-
jected applicant of the grounds for any rejection. 
(2) INFORMATION REGARDING HOUSING.—The 
Secretary shall provide, to the Secretary of Veterans 
Affairs and the Secretary of Labor, information re-
garding the availability of the housing assisted under 
this section. Within 30 days of receipt of the infor-
mation, the Secretary of Veterans Affairs and Sec-
retary of Labor shall provide such information to 
agencies in the area of the housing that receive as-
sistance from the Department of Veterans Affairs 
and the Department of Labor for providing medical 
care, housing, supportive services or employment 
and training services to homeless veterans. 
(l) MISCELLANEOUS PROVISIONS.— 
(1) TECHNICAL
ASSISTANCE.—The Secretary 
shall make available appropriate technical assistance 
to ensure that prospective applicants and owners are 
able to participate more fully in the program carried 
out under this section. 
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(2) CIVIL RIGHTS COMPLIANCE.—Each owner 
shall certify, to the satisfaction of the Secretary, 
that assistance made available under this section will 
be conducted and administered in conformity with 
title VI of the Civil Rights Act of 1964, the Fair 
Housing Act, and other Federal, State, and local 
laws prohibiting discrimination and promoting equal 
opportunity. 
(3) OWNER DEPOSIT.— 
(A) IN GENERAL.—The Secretary shall re-
quire an owner of housing assisted under this 
section to deposit an amount not to exceed 
$15,000 in a special escrow account to ensure 
the owner’s commitment to the housing. 
(B) REDUCTION OF REQUIREMENT.—The 
Secretary may reduce or waive the owner de-
posit specified under paragraph (3) for indi-
vidual applicants if the Secretary finds that 
such waiver or reduction is necessary to achieve 
the purposes of this section and the applicant 
demonstrates to the satisfaction of the Sec-
retary that it has the capacity to manage and 
maintain the housing in accordance with this 
section. The Secretary shall reduce or waive the 
requirement of the owner deposit under para-
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graph (3) in the case of a nonprofit applicant 
that is not affiliated with a national sponsor, as 
determined by the Secretary. 
(4) NOTICE OF APPEAL.—The Secretary shall 
notify an owner not less than 30 days prior to can-
celing any reservation of assistance provided under 
this section. During the 30-day period following the 
receipt of a notice under the preceding sentence, an 
owner may appeal the proposed cancellation. Such 
appeal, including review by the Secretary, shall be 
completed not later than 45 days after the appeal is 
filed. 
(5) LABOR.— 
(A) IN
GENERAL.—The Secretary shall 
take such action as may be necessary to ensure 
that all laborers and mechanics employed by 
contractors and subcontractors in the construc-
tion of housing with 12 or more units assisted 
under this section shall be paid wages at rates 
not less than the rates prevailing in the locality 
involved for the corresponding classes of labor-
ers and mechanics employed on construction of 
a similar character, as determined by the Sec-
retary of Labor in accordance with subchapter 
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IV of chapter 31 of title 40, United States 
Code. 
(B) EXEMPTION.—Subparagraph (A) shall 
not apply to any individual who— 
(i) performs services for which the in-
dividual volunteered; 
(ii)(I) does not receive compensation 
for such services; or 
(II) is paid expenses, reasonable bene-
fits, or a nominal fee for such services; and 
(iii) is not otherwise employed at any 
time in the construction work. 
(6) ACCESS TO RESIDUAL RECEIPTS.—The Sec-
retary shall authorize the owner of a housing project 
assisted under this section to use any residual re-
ceipts held for the project in excess of $500 per unit 
(or in excess of such other amount prescribed by the 
Secretary based on the needs of the project) for ac-
tivities to retrofit and renovate the project described 
under section 802(d)(3) of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 
8011(d)(3)) or to provide supportive services to resi-
dents of the project. Any owner that uses residual 
receipts under this paragraph shall submit to the 
Secretary a report, not less than annually, describ-
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ing the uses of the residual receipts. In determining 
the amount of project rental assistance to be pro-
vided to a project under subsection (c)(3) of this sec-
tion, the Secretary may take into consideration the 
residual receipts held for the project only if, and to 
the extent that, excess residual receipts are not used 
under this paragraph. 
(7) OCCUPANCY
STANDARDS
AND
OBLIGA-
TIONS.—Each owner shall operate housing assisted 
under this section in compliance with subtitle C of 
title VI of the Housing and Community Develop-
ment Act of 1992 (relating to standards and obliga-
tions of residency) and any regulations issued under 
such subtitle. 
(8) USE OF PROJECT RESERVES.—Amounts for 
project reserves for a project assisted under this sec-
tion may be used for costs, subject to reasonable 
limitations as the Secretary determines appropriate, 
for reducing the number of dwelling units in the 
project. Such use shall be subject to the approval of 
the Secretary to ensure that the use is designed to 
retrofit units that are currently obsolete or unmar-
ketable. 
(m) DEFINITIONS.— 
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(1) CONSUMER COOPERATIVE.—The term ‘‘con-
sumer cooperative’’ has the same meaning given 
such term for purposes of the supportive housing for 
the elderly program under section 202 of the Hous-
ing Act of 1959 (12 U.S.C. 1701q). 
(2) VERY LOW-INCOME VETERAN FAMILY.—The 
term ‘‘very low-income veteran family’’ means a vet-
eran family whose income does not exceed 50 per-
cent of the median income for the area, as deter-
mined by the Secretary with adjustments for smaller 
and larger families, except that the Secretary may 
establish income ceiling higher or lower than 50 per-
cent of the median for the area on the basis of the 
Secretary’s findings that such variations are nec-
essary because of prevailing levels of construction 
costs or fair market rents (as determined under sec-
tion 8 of the United States Housing Act of 1937 (42 
U.S.C. 1437f), or unusually high or low family in-
comes. 
(3) OWNER.—The term ‘‘owner’’ means a pri-
vate nonprofit organization or consumer cooperative 
that receives assistance under this section to develop 
and operate supportive housing for very low-income 
veteran families. 
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(4) PRIVATE NONPROFIT ORGANIZATION.—The 
term ‘‘private nonprofit organization’’ means— 
(A) any incorporated private institution or 
foundation— 
(i) no part of the net earnings of 
which inures to the benefit of any member, 
founder, contributor, or individual; 
(ii) which has a governing board that 
is responsible for the operation of the 
housing assisted under this section; and 
(iii) which is approved by the Sec-
retary as to financial responsibility; 
(B) a for-profit limited partnership the 
sole general partner of which is an organization 
meeting the requirements under clauses (i), (ii), 
and (iii) of subparagraph (A); 
(C) a corporation wholly owned and con-
trolled by an organization meeting the require-
ments under clauses (i), (ii), and (iii) of sub-
paragraph (A); and 
(D) a tribally designated housing entity, as 
such term is defined in section 4 of the Native 
American Housing Assistance and Self-Deter-
mination Act of 1996 (25 U.S.C. 4103). 
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