(c)(2)(B)’ and ‘low- and moderate-income
homebuyers’ for ‘paragraph (2)’ and ‘low-
income homebuyers’, respectively; and
‘‘(B) units made available for purchase
only by families who qualify as low-income fam-
ilies at the time of purchase shall have an ini-
tial purchase price that complies with the re-
quirements of subsection (b)(1).
‘‘(2) In the case of housing that is for rental,
the housing—
‘‘(A) complies with subparagraphs (D)
through (F) of subsection (a)(1);
‘‘(B)(i) has not less than 75 percent of the
units occupied by households that qualify as
low-income families and is occupied only by
households that qualify as moderate-income
families; or
‘‘(ii) temporarily fails to comply with
clause (i) only because of increases in the in-
comes of existing tenants and actions satisfac-
tory to the Secretary are being taken to ensure
that all vacancies in the housing are being filled
in accordance with clause (i) until such non-
compliance is corrected; and
‘‘(C) bears rents, in the case of units made
available for occupancy only by households that
qualify as low-income families, that comply with
the requirements of subsection (a)(1)(A).
Paragraphs (4) and (5) of subsection (a) shall apply
to housing that is subject to this subsection.’’.
(2) DEFINITION.—Section 104 of the Cranston-
Gonzalez National Affordable Housing Act (42
U.S.C. 12704) is amended—
(A) by redesignating paragraph (25) as
paragraph (26);
(B) by redesignating paragraph (24) (re-
lating to the definition of energy efficient mort-
gage) as paragraph (25);
(C) by redesignating paragraphs (11)
through (21) as paragraphs (12) through (22),
respectively; and
(D) by inserting after paragraph (10) the
following new paragraph:
‘‘(11) The term ‘moderate income families’
means families whose incomes do not exceed the me-
dian income for the area, as determined by the Sec-
retary with adjustments for smaller and larger fami-
lies, except that the Secretary may establish income
ceilings higher or lower than the median income for
the area on the basis of the Secretary’s findings that
such variations are necessary because of prevailing
levels of construction costs or fair market rents, or
unusually high or low family incomes.’’.
SEC. 505. LOAN GUARANTEES.
Subtitle A of title II of the Cranston-Gonzalez Na-
tional Affordable Housing Act (42 U.S.C. 12741 et seq.)
is amended by adding at the end the following new section:
‘‘SEC. 227. LOAN GUARANTEES.
‘‘(a) AUTHORITY.—The Secretary may, upon such
terms and conditions as the Secretary may prescribe,
guarantee and make commitments to guarantee, only to
such extent or in such amounts as provided in appropria-
tions Acts, the notes or other obligations issued by eligible
participating jurisdictions or by public agencies designated
by and acting on behalf of eligible participating jurisdic-
tions for purposes of financing (including credit enhance-
ments and debt service reserves) the acquisition, new con-
struction, reconstruction, or moderate or substantial reha-
bilitation of affordable housing (including real property ac-
quisition, site improvement, conversion, and demolition),
and other related expenses (including financing costs and
relocation expenses of any displaced persons, families,
businesses, or organizations). Housing funded under this
section shall meet the requirements of this subtitle.
‘‘(b) REQUIREMENTS.—Notes or other obligations
guaranteed under this section shall be in such form and
denominations, have such maturities, and be subject to
such conditions as may be prescribed by the Secretary.
The Secretary may not deny a guarantee under this sec-
tion on the basis of the proposed repayment period for
the note or other obligation, unless the period is more than
20 years or the Secretary determines that the period oth-
erwise causes the guarantee to constitute an unacceptable
financial risk.
‘‘(c) LIMITATION ON TOTAL NOTES AND OBLIGA-
TIONS.—The Secretary may not guarantee or make a com-
mitment to guarantee any note or other obligation if the
total outstanding notes or obligations guaranteed under
this section on behalf of the participating jurisdiction
issuing the note or obligation (excluding any amount
defeased under a contract entered into under subsection
(e)(1)) would thereby exceed an amount equal to 5 times
the amount of the participating jurisdiction’s latest alloca-
tion under section 217.
‘‘(d) USE OF PROGRAM FUNDS.—Notwithstanding
any other provision of this subtitle, funds allocated to the
participating jurisdiction under this subtitle (including
program income derived therefrom) are authorized for use
in the payment of principal and interest due on the notes
or other obligations guaranteed pursuant to this section
and the payment of such servicing, underwriting, or other
issuance or collection charges as may be specified by the
Secretary.
‘‘(e) SECURITY.—To assure the full repayment of
notes or other obligations guaranteed under this section,
and payment of the issuance or collection charges specified
by the Secretary under subsection (d), and as a prior con-
dition for receiving such guarantees, the Secretary shall
require the participating jurisdiction (and its designated
public agency issuer, if any) to—
‘‘(1) enter into a contract, in a form acceptable
to the Secretary, for repayment of such notes or
other obligations and the other specified charges;
‘‘(2) pledge as security for such repayment any
allocation for which the participating jurisdiction
may become eligible under this subtitle; and
‘‘(3) furnish, at the discretion of the Secretary,
such other security as may be deemed appropriate
by the Secretary in making such guarantees, which
may include increments in local tax receipts gen-
erated by the housing assisted under this section or
disposition proceeds from the sale of land or hous-
ing.
‘‘(f) REPAYMENT AUTHORITY.—The Secretary may,
notwithstanding any other provision of this subtitle or any
other Federal, State, or local law, apply allocations
pledged pursuant to subsection (e) to any repayments due
the United States as a result of such guarantees.
‘‘(g) FULL FAITH AND CREDIT.—The full faith and
credit of the United States is pledged to the payment of
all guarantees made under this section. Any such guaran-
tee made by the Secretary shall be conclusive evidence of
the eligibility of the notes or other obligations for such
guarantee with respect to principal and interest, and the
validity of any such guarantee so made shall be incontest-
able in the hands of a holder of the guaranteed obligations.
‘‘(h) TAX STATUS.—With respect to any obligation
guaranteed pursuant to this section, the interest paid on
such obligation shall be included in gross income for pur-
poses of the Internal Revenue Code of 1986.
‘‘(i) MONITORING.—The Secretary shall monitor the
use of guarantees under this section by eligible participat-
ing jurisdictions. If the Secretary finds that 50 percent
of the aggregate guarantee authority for any fiscal year
has been committed, the Secretary may impose limitations
on the amount of guarantees any 1 participating jurisdic-
tion may receive during that fiscal year.
‘‘(j) GUARANTEE OF TRUST CERTIFICATES.—
‘‘(1) AUTHORITY.—The Secretary may, upon
such terms and conditions as the Secretary deems
appropriate, guarantee the timely payment of the
principal of and interest on such trust certificates or
other obligations as may—
‘‘(A) be offered by the Secretary or by any
other offeror approved for purposes of this sub-
section by the Secretary; and
‘‘(B) be based on and backed by a trust or
pool composed of notes or other obligations
guaranteed or eligible for guarantee by the Sec-
retary under this section.
‘‘(2) FULL FAITH AND CREDIT.—To the same
extent as provided in subsection (g), the full faith
and credit of the United States is pledged to the
payment of all amounts which may be required to be
paid under any guarantee by the Secretary under
this subsection.
‘‘(3) SUBROGATION.—In the event the Sec-
retary pays a claim under a guarantee issued under
this section, the Secretary shall be subrogated fully
to the rights satisfied by such payment.
‘‘(4) OTHER POWERS AND RIGHTS.—No State
or local law, and no Federal law, shall preclude or
limit the exercise by the Secretary of—
‘‘(A) the power to contract with respect to
public offerings and other sales of notes, trust
certificates, and other obligations guaranteed
under this section, upon such terms and condi-
tions as the Secretary deems appropriate;
‘‘(B) the right to enforce, by any means
deemed appropriate by the Secretary, any such
contract; and
‘‘(C) the Secretary’s ownership rights, as
applicable, in notes, certificates or other obliga-
tions guaranteed under this section, or con-
stituting the trust or pool against which trust
certificates or other obligations guaranteed
under this section are offered.
‘‘(k) AGGREGATE LIMITATION.—The total amount of
outstanding obligations guaranteed on a cumulative basis
by the Secretary under this section shall not at any time
exceed $2,000,000,000.’’.
TITLE VI—LOCAL
HOMEOWNERSHIP INITIATIVES
SEC. 601. REAUTHORIZATION OF NEIGHBORHOOD REIN-
VESTMENT CORPORATION.
Section 608(a)(1) of the Neighborhood Reinvestment
Corporation Act (42 U.S.C. 8107(a)(1)) is amended by
striking the first sentence and inserting the following:
‘‘There are authorized to be appropriated to the corpora-
tion to carry out this title $90,000,000 for each of fiscal
years 1999 through 2003. Of any amounts made available
pursuant to this subsection for fiscal year 1999,
$25,000,000 shall be for a pilot homeownership initiative,
including an evaluation by an independent third party to
determine its effectiveness.’’.
SEC. 602. INCOME ELIGIBILITY UNDER CDBG TO FACILI-
TATE 
HOMEOWNERSHIP 
IN 
HIGH-COST
AREAS.
Section 102(a)(20) of the Housing and Community
Development Act of 1974 (42 U.S.C. 5302(a)(20)) is
amended by striking subparagraph (B) and inserting the
following new subparagraph:
‘‘(B) The Secretary may—
‘‘(i) with respect to any reference in sub-
paragraph (A) to 50 percent of the median in-
come of the area involved, establish percentages
of median income for any area that are higher
or lower than 50 percent if the Secretary finds
such variations to be necessary because of un-
usually high or low family incomes in such area;
and
‘‘(ii) with respect to any reference in sub-
paragraph (A) to 80 percent of the median in-
come of the area involved, establish a percent-
age of median income for any area that is high-
er than 80 percent if the Secretary finds such
variation to be necessary because of unusually
low family incomes in such area.’’.
SEC. 603. HOMEOWNERSHIP ZONES.
Section 186 of the Housing and Community Develop-
ment Act of 1992 (42 U.S.C. 12898a) is amended to read
as follows:
‘‘SEC. 186. HOMEOWNERSHIP ZONE GRANTS.
‘‘(a) AUTHORITY.—The Secretary of Housing and
Urban Development may make grants to units of general
local government to assist homeownership zones. Home-
ownership zones are contiguous, geographically defined
areas, primarily residential in nature, in which large-scale
development projects are designed to reclaim distressed
neighborhoods by creating homeownership opportunities
for low- and moderate-income families. Projects in home-
ownership zones are intended to serve as a catalyst for
private investment, business creation, and neighborhood
revitalization.
‘‘(b) ELIGIBLE ACTIVITIES.—Amounts made avail-
able under this section may be used for projects that in-
clude any of the following activities in the homeownership
zone:
‘‘(1) Acquisition, construction, and rehabilita-
tion of housing.
‘‘(2) Site acquisition and preparation, including
demolition, construction, reconstruction, or installa-
tion of public and other site improvements and utili-
ties directly related to the homeownership zone.
‘‘(3) Direct financial assistance to homebuyers.
‘‘(4) Homeownership counseling.
‘‘(5) Relocation assistance.
‘‘(6) Marketing costs, including affirmative
marketing activities.
‘‘(7) Other project-related costs.
‘‘(8) Reasonable administrative costs (up to 5
percent of the grant amount).
‘‘(9) Other housing-related activities proposed
by the applicant as essential to the success of the
homeownership zone and approved by the Secretary.
‘‘(c) APPLICATION.—To be eligible for a grant under
this section, a unit of general local government shall sub-
mit an application for a homeownership zone grant in such
form and in accordance with such procedures as the Sec-
retary shall establish.
‘‘(d) SELECTION CRITERIA.—The Secretary shall se-
lect applications for funding under this section through
a national competition, using selection criteria established
by the Secretary, which shall include—
‘‘(1) the degree to which the proposed activities
will result in the improvement of the economic, so-
cial, and physical aspects of the neighborhood and
the lives of its residents through the creation of new
homeownership opportunities;
‘‘(2) the levels of distress in the homeownership
zone as a whole, and in the immediate neighborhood
of the project for which assistance is requested;
‘‘(3) the financial soundness of the plan for fi-
nancing homeownership zone activities;
‘‘(4) the leveraging of other resources; and
‘‘(5) the capacity to successfully carry out the
plan.
‘‘(e) GRANT APPROVAL AMOUNTS.—The Secretary
may establish a maximum amount for any grant for any
funding round under this section. A grant may not be
made in an amount that exceeds the amount that the Sec-
retary determines is necessary to fund the project for
which the application is made.
‘‘(f) PROGRAM REQUIREMENTS.—A homeownership
zone proposal shall—
‘‘(1) provide for a significant number of new
homeownership opportunities that will make a visible
improvement in an immediate neighborhood;
‘‘(2) not be inconsistent with such planning and
design principles as may be prescribed by the Sec-
retary;
‘‘(3) be designed to stimulate additional invest-
ment in that area;
‘‘(4) provide for partnerships with persons or
entities in the private and nonprofit sectors;
‘‘(5) incorporate a comprehensive approach to
revitalization of the neighborhood;
‘‘(6) establish a detailed time-line for com-
mencement and completion of construction activities;
and
‘‘(7) provide for affirmatively furthering fair
housing.
‘‘(g) INCOME TARGETING.—At least 51 percent of
the homebuyers assisted with funds under this section
shall have household incomes at or below 80 percent of
median income for the area, as determined by the Sec-
retary.
‘‘(h) ENVIRONMENTAL REVIEW.—For purposes of
environmental review, decisionmaking, and action pursu-
ant to the National Environmental Policy Act of 1969 and
other provisions of law that further the purposes of such
Act, a grant under this section shall be treated as assist-
ance under the HOME Investment Partnerships Act and
shall be subject to the regulations issued by the Secretary
to implement section 288 of such Act.
‘‘(i) REVIEW, AUDIT, AND REPORTING.—The Sec-
retary shall make such reviews and audits and establish
such reporting requirements as may be necessary or ap-
propriate to determine whether the grantee has carried out
its activities in a timely manner and in accordance with
the requirements of this section. The Secretary may ad-
just, reduce, or withdraw amounts made available, or take
other action as appropriate, in accordance with the Sec-
retary’s performance reviews and audits under this sec-
tion.
‘‘(j) AUTHORIZATION.—There are authorized to be
appropriated to carry out this section $25,000,000 for fis-
cal year 1999 and such sums as may be necessary for fis-
cal year 2000, to remain available until expended.’’.
SEC. 604. LEASE-TO-OWN.
(a) SENSE OF CONGRESS.—It is the sense of the Con-
gress that residential tenancies under lease-to-own provi-
sions can facilitate homeownership by low- and moderate-
income families and provide opportunities for homeowner-
ship for such families who might not otherwise be able
to afford homeownership.
(b) REPORT.—Not later than the expiration of the
3-month period beginning on the date of the enactment
of this Act, the Secretary of Housing and Urban Develop-
ment shall submit a report to the Congress—
(1) analyzing whether lease-to-own provisions
can be effectively incorporated within the HOME in-
vestment partnerships program, the public housing
program, the tenant-based rental assistance program
under section 8 of the United States Housing Act of
1937, or any other programs of the Department to
facilitate homeownership by low- or moderate-income
families;
(2) any legislative or administrative changes
necessary to alter or amend such programs to allow
the use of lease-to-own options to provide home-
ownership opportunities.
SEC. 605. HOUSING COUNSELING.
(a) EXTENSION OF EMERGENCY HOMEOWNERSHIP
COUNSELING.—Section 106(c)(9) of the Housing and
Urban Development Act of 1968 (12 U.S.C. 1701x(c)(9))
is amended by striking ‘‘September 30, 1994’’ and insert-
ing ‘‘September 30, 2003’’.
(b) EXTENSION
OF
PREPURCHASE
AND
FORE-
CLOSURE PREVENTION COUNSELING DEMONSTRATION.—
Section 106(d)(13) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(d)(12)) is amended
by striking ‘‘fiscal year 1994’’ and inserting ‘‘fiscal year
2003’’.
(c) NOTIFICATION OF DELINQUENCY ON VETERANS
HOME LOANS.—Subparagraph (C) of section 106(c)(5) of
the Housing and Urban Development Act of 1968 is
amended to read as follows:
‘‘(C) NOTIFICATION.—Notification under
subparagraph (A) shall not be required with re-
spect to any loan for which the eligible home-
owner pays the amount overdue before the expi-
ration of the 45-day period under subparagraph
(B)(ii).’’.
SEC. 606. LOCAL CAPACITY BUILDING.
Section 4 of the HUD Demonstration Act of 1993
(42 U.S.C. 9816 note) is amended—
(1) in subsection (a), by inserting ‘‘National
Association of Housing Partnerships,’’ after ‘‘Hu-
manity,’’; and
(2) in subsection (e), by striking ‘‘$25,000,000’’
and all that follows and inserting ‘‘, for each fiscal
year, such sums as may be necessary to carry out
this section.’’.
TITLE VII—MANUFACTURED
HOUSING IMPROVEMENT
SEC. 701. SHORT TITLE AND REFERENCES.
(a) SHORT TITLE.—This title may be cited as the
‘‘Manufactured Housing Improvement Act’’.
(b) REFERENCES.—Whenever in this title an amend-
ment is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be con-
sidered to be made to that section or other provision of
the National Manufactured Housing Construction and
Safety Standards Act of 1974 (42 U.S.C. 5401 et seq.).
SEC. 702. FINDINGS AND PURPOSES.
Section 602 (42 U.S.C. 5401) is amended to read as
follows:
‘‘FINDINGS AND PURPOSES
‘‘SEC. 602. (a) FINDINGS.—The Congress finds
that—
‘‘(1) manufactured housing plays a vital role in
meeting the housing needs of the Nation; and
‘‘(2) manufactured homes provide a significant
resource for affordable homeownership and rental
housing accessible to all Americans.
‘‘(b) PURPOSES.—The purposes of this title are—
‘‘(1) to promote the quality, durability, safety,
and affordability of manufactured housing;
‘‘(2) to promote the availability of affordable
manufactured homes and to increase homeownership
for all Americans;
‘‘(3) to provide for the establishment of prac-
tical, uniform, and, to the extent possible, perform-
ance-based Federal construction standards;
‘‘(4) to encourage innovative and cost-effective
construction techniques;
‘‘(5) to protect owners of manufactured homes
from unreasonable risk of personal injury and prop-
erty damage;
‘‘(6) to establish a balanced consensus process
for the development, revision, and interpretation of
Federal construction and safety standards for manu-
factured homes and related regulations for the en-
forcement of such standards;
‘‘(7) to ensure uniform and effective enforce-
ment of Federal construction and safety standards
for manufactured homes; and
‘‘(8) to ensure that the public interest in, and
need for, affordable manufactured housing is duly
considered in all determinations relating to the Fed-
eral standards and their enforcement.’’.
SEC. 703. DEFINITIONS.
(a) IN GENERAL.—Section 603 (42 U.S.C. 5402) is
amended—
(1) in paragraph (2), by striking ‘‘dealer’’ and
inserting ‘‘retailer’’;
(2) in paragraph (12), by striking ‘‘and’’ at the
end;
(3) in paragraph (13), by striking the period at
the end and inserting a semicolon; and
(4) by adding at the end the following new
paragraphs:
‘‘(14) ‘administering organization’ means the
qualified technical or building code organization that
administers the consensus development process,
which—
‘‘(A) with respect to the period during
which 
the 
agreement 
under 
section
604(a)(2)(A) is in force, shall be the Council of
American Building Officials; and
‘‘(B) with respect to the period during
which a competitively procured contract under
section 604(a)(2)(B) is in force, shall be the or-
ganization selected by the Secretary;
‘‘(15) ‘consensus committee’ means the commit-
tee established under section 604(a)(3);
‘‘(16) ‘consensus standards development proc-
ess’ means the process by which additions, revisions,
and interpretations to the Federal manufactured
home construction and safety standards and enforce-
ment regulations shall be developed and rec-
ommended to the Secretary by the consensus com-
mittee;
‘‘(17) ‘primary inspection agency’ means a
State agency or private organization that has been
approved by the Secretary to act as a design ap-
proval primary inspection agency or a production in-
spection primary inspection agency, or both;
‘‘(18) ‘design approval primary inspection agen-
cy’ means a State agency or private organization
that has been approved by the Secretary to evaluate
and either approve or disapprove manufactured
home designs and quality control procedures;
‘‘(19) ‘production inspection primary inspection
agency’ means a State agency or private organiza-
tion that has been approved by the Secretary to
evaluate the ability of manufactured home manufac-
turing plants to comply with approved quality con-
trol procedures and with the Federal manufactured
home construction and safety standards promulgated
hereunder; and
‘‘(20) ‘monitoring’ means the process of peri-
odic review of the primary inspection agencies, by
the Secretary or by a State agency under an ap-
proved State plan pursuant to section 623, in ac-
cordance with regulations adopted by the consensus
committee and promulgated in accordance with sec-
tion 604(a)(4)(B). Such monitoring shall be for the
purpose of ensuring that the primary inspection
agencies are discharging their duties as defined
herein.’’.
(b) CONFORMING
AMENDMENTS.—The National
Manufactured Housing Construction and Safety Stand-
ards Act of 1974 is amended—
(1) in section 613 (42 U.S.C. 5412), by striking
‘‘dealer’’ each place it appears and inserting ‘‘re-
tailer’’;
(2) in section 614(f) (42 U.S.C. 5413(f)), by
striking ‘‘dealer’’ each place it appears and inserting
‘‘retailer’’;
(3) in section 615 (42 U.S.C. 5414)—
(A) in subsection (b)(1), by striking ‘‘deal-
er’’ and inserting ‘‘retailer’’;
(B) in subsection (b)(3), by striking ‘‘deal-
er or dealers’’ and inserting ‘‘retailer or retail-
ers’’; and
(C) in subsections (d) and (f), by striking
‘‘dealers’’ each place it appears and inserting
‘‘retailers’’;
(4) in section 616 (42 U.S.C. 5415), by striking
‘‘dealer’’ and inserting ‘‘retailer’’; and
(5) in section 623(c)(9), by striking ‘‘dealers’’
and inserting ‘‘retailers’’.
SEC. 704. FEDERAL MANUFACTURED HOME CONSTRUC-
TION AND SAFETY STANDARDS.
Section 604 (42 U.S.C. 5304) is amended—
(1) by striking subsections (a) and (b) and in-
serting the following new subsections:
‘‘(a) ESTABLISHMENT.—
‘‘(1) AUTHORITY.—The Secretary shall estab-
lish, by order, appropriate Federal manufactured
home construction and safety standards, each of
which—
‘‘(A) shall—
‘‘(i) be reasonable and practical;
‘‘(ii) meet high standards of protec-
tion consistent with the enumerated pur-
poses of this title; and
‘‘(iii) where appropriate, be perform-
ance-based and stated objectively; and
‘‘(B) except as provided in subsection (b),
shall be established in accordance with the con-
sensus standards development process.
‘‘(2) CONSENSUS
STANDARDS
AND
REGU-
LATORY DEVELOPMENT PROCESS.—
‘‘(A) INITIAL
AGREEMENT.—Not later
than 180 days after the date of enactment of
the Manufactured Housing Improvement Act,
the Secretary shall request the Council of
American Building Officials (or the successor
organization to such Council) to, and if such or-
ganization consents, enter into an agreement,
which shall—
‘‘(i) terminate on the date on which a
contract is entered into under subpara-
graph (B); and
‘‘(ii) require the Council of American
Building Officials to—
‘‘(I) appoint the initial members
of the consensus committee under
paragraph (3);
‘‘(II) administer the consensus
standards development process until
the termination of that agreement;
and
‘‘(III) administer the consensus
development and interpretation proc-
ess for procedural and enforcement
regulations and regulations specifying
the permissible scope and conduct of
monitoring until the termination of
that agreement.
If the Council of American Building Officials
(or the successor organization to such Council)
declines to enter into the agreement as provided
in this subparagraph, the Secretary shall enter
into the agreement under this subparagraph
with an organization described in subparagraph
(B).
‘‘(B) COMPETITIVELY
PROCURED
CON-
TRACT.—Upon the expiration of the 4-year pe-
riod beginning on the date on which all mem-
bers of the consensus committee are appointed
under paragraph (3), the Secretary shall, using
competitive procedures (as such term is defined
in section 4 of the Office of Federal Procure-
ment Policy Act), enter into a competitively
awarded contract with a qualified technical or
building code organization (which may be the
Council of American Building Officials) under