162
SEC. 582. REFORM OF HUD MULTIFAMILY PROPERTY DIS-
POSITION.
(a) FINDINGS.—The Congress finds that—
(1) the portfolio of multifamily housing project
mortgages insured by the FHA is severely troubled
and at risk of default, requiring the Secretary to in-
crease loss reserves from $5,500,000,000 in 1991 to
$11,900,000,000 in 1992 to cover estimated future
losses;
(2) the inventory of multifamily housing
projects owned by the Secretary has more than tri-
pled since 1989, and, by the end of 1993, may ex-
ceed 75,000 units;
(3) the cost to the Federal Government of own-
ing and maintaining multifamily housing projects es-
calated to approximately $250,000,000 in fiscal year
1992;
(4) the inventory of multifamily housing
projects subject to mortgages held by the Secretary
has increased dramatically, to more than 2,400
mortgages, and approximately half of these mort-
gages, with over 230,000 units, are delinquent;
(5) the inventory of insured and formerly in-
sured multifamily housing projects is rapidly deterio-
rating, endangering tenants and neighborhoods;
163
(6) over 5 million families today have a critical
need for housing that is affordable and habitable;
and
(7) the current statutory framework governing
the disposition of multifamily housing projects effec-
tively impedes the Government’s ability to dispose of
properties, protect tenants, and ensure that projects
are maintained over time.
(b) MANAGEMENT AND DISPOSITION OF MULTIFAM-
ILY HOUSING PROJECTS.—Section 203 of the Housing
and Community Development Amendments of 1978 (12
U.S.C. 1701z–11) is amended to read as follows:
‘‘SEC. 203. MANAGEMENT AND DISPOSITION OF MULTIFAM-
ILY HOUSING PROJECTS.
‘‘(a) GOALS.—The Secretary of Housing and Urban
Development (in this section referred to as the ‘Secretary’)
shall manage or dispose of multifamily housing projects
that are owned by the Secretary or that are subject to
a mortgage held by the Secretary in a manner that—
‘‘(1) is consistent with the National Housing
Act and this section;
‘‘(2) will protect the financial interests of the
Federal Government; and
‘‘(3) will, in the least costly fashion among rea-
sonable available alternatives, further the goals of—
164
‘‘(A) preserving housing so that it can re-
main available to and affordable by low-income
persons;
‘‘(B) preserving and revitalizing residential
neighborhoods;
‘‘(C) maintaining existing housing stock in
a decent, safe, and sanitary condition;
‘‘(D) minimizing the involuntary displace-
ment of tenants;
‘‘(E) maintaining housing for the purpose
of providing rental housing, cooperative hous-
ing, and homeownership opportunities for low-
income persons; and
‘‘(F) minimizing the need to demolish mul-
tifamily housing projects.
The Secretary, in determining the manner in which a
project is to be managed or disposed of, may balance com-
peting goals relating to individual projects in a manner
that will further the purposes of this section.
‘‘(b) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) MULTIFAMILY
HOUSING
PROJECT.—The
term ‘multifamily housing project’ means any multi-
family rental housing project which is, or prior to
acquisition by the Secretary was, assisted or insured
165
under the National Housing Act, or was subject to
a loan under section 202 of the Housing Act of
1959.
‘‘(2) SUBSIDIZED
PROJECT.—The term ‘sub-
sidized project’ means a multifamily housing project
receiving any of the following types of assistance im-
mediately prior to the assignment of the mortgage
on such project to, or the acquisition of such mort-
gage by, the Secretary:
‘‘(A) Below market interest rate mortgage
insurance 
under 
the 
proviso 
of 
section
221(d)(5) of the National Housing Act.
‘‘(B) Interest reduction payments made in
connection with mortgages insured under sec-
tion 236 of the National Housing Act.
‘‘(C) Direct loans made under section 202
of the Housing Act of 1959.
‘‘(D) Assistance in the form of—
‘‘(i) rent supplement payments under
section 101 of the Housing and Urban De-
velopment Act of 1965;
‘‘(ii) housing assistance payments
made under section 23 of the United
States Housing Act of 1937 (as in effect
before January 1, 1975); or
166
‘‘(iii) housing assistance payments
made under section 8 of the United States
Housing Act of 1937 (excluding payments
made for tenant-based assistance under
section 8),
if (except for purposes of section 183(c) of the
Housing and Community Development Act of
1987) such assistance payments are made to
more than 50 percent of the units in the
project.
‘‘(3) FORMERLY
SUBSIDIZED
PROJECT.—The
term ‘formerly subsidized project’ means a multi-
family housing project owned by the Secretary that
was a subsidized project immediately prior to its ac-
quisition by the Secretary.
‘‘(4) 
UNSUBSIDIZED
PROJECT.—The 
term
‘unsubsidized project’ means a multifamily housing
project owned by the Secretary that is not a sub-
sidized project or a formerly subsidized project.
‘‘(c) MANAGEMENT
OR
DISPOSITION
OF
PROP-
ERTY.—
‘‘(1) DISPOSITION TO PURCHASERS.—The Sec-
retary is authorized, in carrying out this section, to
dispose of a multifamily housing project owned by
the Secretary on a negotiated, competitive bid, or
167
other basis, on such terms as the Secretary deems
appropriate considering the low-income character of
the project and the requirements of subsection (a),
to a purchaser determined by the Secretary to be ca-
pable of—
‘‘(A) satisfying the conditions of the dis-
position;
‘‘(B) implementing a sound financial and
physical management program that is designed
to enable the project to meet anticipated oper-
ating and repair expenses to ensure that the
project will remain in decent, safe, and sanitary
condition;
‘‘(C) responding to the needs of the ten-
ants and working cooperatively with tenant or-
ganizations;
‘‘(D) providing adequate organizational
staff and financial resources to the project; and
‘‘(E) meeting such other requirements as
the Secretary may determine.
‘‘(2) CONTRACTING
FOR
MANAGEMENT
SERV-
ICES.—The Secretary is authorized, in carrying out
this section—
‘‘(A) to contract for management services
for a multifamily housing project that is owned
168
by the Secretary (or for which the Secretary is
mortgagee in possession), on a negotiated, com-
petitive bid, or other basis at a price deter-
mined by the Secretary to be reasonable, with
a manager the Secretary has determined is ca-
pable of—
‘‘(i) implementing a sound financial
and physical management program that is
designed to enable the project to meet an-
ticipated operating and maintenance ex-
penses to ensure that the project will re-
main in decent, safe, and sanitary condi-
tion;
‘‘(ii) responding to the needs of the
tenants and working cooperatively with
tenant organizations;
‘‘(iii) providing adequate organiza-
tional, staff, and other resources to imple-
ment a management program determined
by the Secretary; and
‘‘(iv) meeting such other requirements
as the Secretary may determine;
‘‘(B) to require the owner of a multifamily
housing project that is subject to a mortgage
held by the Secretary to contract for manage-
169
ment services for the project in the manner de-
scribed in subparagraph (A).
‘‘(d) MAINTENANCE OF HOUSING PROJECTS.—
‘‘(1) HOUSING PROJECTS OWNED BY THE SEC-
RETARY.—In the case of multifamily housing
projects that are owned by the Secretary (or for
which the Secretary is mortgagee in possession), the
Secretary shall—
‘‘(A) to the greatest extent possible, main-
tain all such occupied projects in a decent, safe,
and sanitary condition;
‘‘(B) to the greatest extent possible, main-
tain full occupancy in all such projects; and
‘‘(C) maintain all such projects for pur-
poses of providing rental or cooperative hous-
ing.
‘‘(2) HOUSING PROJECTS SUBJECT TO A MORT-
GAGE HELD BY THE SECRETARY.—In the case of
any multifamily housing project that is subject to a
mortgage held by the Secretary, the Secretary shall
require the owner of the project to carry out the re-
quirements of paragraph (1).
‘‘(e) REQUIRED ASSISTANCE.—In carrying out the
goal specified in subsection (a)(3)(A), the Secretary shall
take not less than one of the following actions:
170
‘‘(1) CONTRACT WITH OWNER.—Enter into con-
tracts under section 8 of the United States Housing
Act of 1937, to the extent budget authority is avail-
able, with owners of multifamily housing projects
that are acquired by a purchaser other than the Sec-
retary at foreclosure or after sale by the Secretary:
‘‘(A) SUBSIDIZED
OR
FORMERLY
SUB-
SIDIZED PROJECTS RECEIVING CERTAIN ASSIST-
ANCE.—In the case of a subsidized or formerly
subsidized project referred to in subparagraphs
(A) through (C) of subsection (b)(2)—
‘‘(i) the contract shall be sufficient to
assist at least all units covered by an as-
sistance contract under any of the authori-
ties referred to in subsection (b)(2)(D) be-
fore acquisition, unless the Secretary acts
pursuant to the provisions of subparagraph
(C);
‘‘(ii) in the case of units requiring
project-based rental assistance pursuant to
this paragraph that are occupied by fami-
lies who are not eligible for assistance
under section 8, a contract under this sub-
paragraph shall also provide that when a
vacancy occurs, the owner shall lease the
171
available unit to a family eligible for assist-
ance under section 8; and
‘‘(iii) the Secretary shall take actions
to ensure the availability and affordability,
as defined in paragraph (3)(B), for the re-
maining useful life of the project, as de-
fined by the Secretary, of any unit located
in any project referred to in subparagraphs
(A) through (C) of subsection (b)(2) that
does not otherwise receive project-based as-
sistance under this subparagraph. To carry
out this clause, the Secretary may require
purchasers to establish use or rent restric-
tions maintaining affordability, as defined
in paragraph (3)(B).
‘‘(B) SUBSIDIZED
OR
FORMERLY
SUB-
SIDIZED PROJECTS RECEIVING OTHER ASSIST-
ANCE.—In the case of a subsidized or formerly
subsidized project referred to in subsection
(b)(2)(D)—
‘‘(i) the contract shall be sufficient to
assist at least all units in the project that
are covered, or were covered immediately
before foreclosure on or acquisition of the
project by the Secretary, by an assistance
172
contract under any of the authorities re-
ferred to in such subsection, unless the
Secretary acts pursuant to provisions of
subparagraph (C); and
‘‘(ii) in the case of units requiring
project-based rental assistance pursuant to
this paragraph that are occupied by fami-
lies who are not eligible for assistance
under section 8, a contract under this
paragraph shall also provide that when a
vacancy occurs, the owner shall lease the
available unit to a family eligible for assist-
ance under section 8.
‘‘(C) EXCEPTIONS TO SUBPARAGRAPHS (A)
AND (B).—In lieu of providing project-based as-
sistance under subparagraph (A) or (B), the
Secretary 
may 
require 
certain 
units 
in
unsubsidized projects to contain use restrictions
providing that such units will be available to
and affordable by very low-income families for
the remaining useful life of the project, as de-
fined by the Secretary, if—
‘‘(i) the Secretary matches any reduc-
tion in units otherwise required to be as-
sisted with project-based assistance under
173
subparagraph (A) or (B) with at least an
equivalent increase in units made afford-
able to very low-income persons within
unsubsidized projects;
‘‘(ii) low-income tenants residing in
units otherwise requiring project-based as-
sistance under subparagraph (A) or (B)
upon disposition receive section 8 tenant-
based assistance; and
‘‘(iii) the units described in clause (i)
are located within the same market area.
‘‘(D) 
CONTRACT
REQUIREMENTS
FOR
UNSUBSIDIZED
PROJECTS.—Notwithstanding
actions taken pursuant to subparagraph (C), in
unsubsidized projects, the contract shall at least
be sufficient to provide—
‘‘(i) project-based rental assistance for
all units that are covered or were covered
immediately before foreclosure or acquisi-
tion by an assistance contract under—
‘‘(I) section 8(b)(2) of the United
States Housing Act of 1937 (as such
section existed before October 1,
1983) (new construction and substan-
tial rehabilitation); section 8(b) of
174
such Act (property disposition); sec-
tion 8(d)(2) of such Act (project-
based certificates); section 8(e)(2) of
such Act (moderate rehabilitation);
section 23 of such Act (as in effect
before January 1, 1975); or section
101 of the Housing and Urban Devel-
opment Act of 1965 (rent supple-
ments); or
‘‘(II) section 8 of the United
States Housing Act of 1937, following
conversion from section 101 of the
Housing and Urban Development Act
of 1965; and
‘‘(ii) tenant-based assistance under
section 8 of the United States Housing Act
of 1937 for tenants currently residing in
units that were covered by an assistance
contract under the Loan Management Set-
Aside program under section 8(b) of the
United States Housing Act of 1937 imme-
diately before foreclosure or acquisition of
the project by the Secretary.
‘‘(2) ANNUAL CONTRIBUTION CONTRACTS.—In
the case of multifamily housing projects that are ac-
175
quired by a purchaser other than the Secretary at
foreclosure or after sale by the Secretary, enter into
annual contribution contracts with public housing
agencies to provide tenant-based assistance under
section 8 of the United States Housing Act of 1937
to all low-income families who are eligible for such
assistance on the date that the project is acquired
by the purchaser. The Secretary shall take action
under this paragraph only after making a deter-
mination that there is available in the area an ade-
quate supply of habitable affordable housing for low-
income families. Actions taken pursuant to this
paragraph may be taken in connection with not
more than 10 percent of the aggregate number of
units in subsidized or formerly subsidized projects
disposed of by the Secretary annually.
‘‘(3) OTHER ASSISTANCE.—
‘‘(A) IN
GENERAL.—In accordance with
the authority provided under the National
Housing Act, reduce the selling price, apply use
or rent restrictions on certain units, or provide
other financial assistance to the owners of mul-
tifamily housing projects that are acquired by a
purchaser other than the Secretary at fore-
176
closure, or after sale by the Secretary, on terms
which will ensure that—
‘‘(i) at least those units otherwise re-
quired to receive project-based section 8
assistance pursuant to subparagraphs (A),
(B), or (D) of paragraph (1) are available
to and affordable by low-income persons;
and
‘‘(ii) for the remaining useful life of
the project, as defined by the Secretary,
there shall be in force such use or rent re-
strictions as the Secretary may prescribe.
‘‘(B) DEFINITION.—A unit shall be consid-
ered affordable under this paragraph if—
‘‘(i) for very low-income tenants, the
rent for such unit does not exceed 30 per-
cent of 50 percent of the area median in-
come, as determined by the Secretary, with
adjustments for family size; and
‘‘(ii) for low-income tenants other
than very low-income tenants, the rent for
such unit does not exceed 30 percent of 80
percent of the area median income, as de-
termined by the Secretary, with adjust-
ments for family size.
177
‘‘(C) VERY
LOW-INCOME
TENANTS.—The
Secretary shall provide assistance under section
8 of the United States Housing Act of 1937 to
any very low-income tenant currently residing
in a unit otherwise required to receive project-
based assistance under section 8, pursuant to
subparagraph (A), (B), or (D) of paragraph
(1), if the rents charged such tenants as a re-
sult of actions taken pursuant to this para-
graph exceed the amount payable as rent under
section 3(a) of the United States Housing Act
of 1937.
‘‘(4) TRANSFER FOR USE UNDER OTHER PRO-
GRAMS OF THE SECRETARY.—
‘‘(A) IN GENERAL.—Enter into an agree-
ment providing for the transfer of a multifamily
housing project—
‘‘(i) to a public housing agency for use
of the project as public housing; or
‘‘(ii) to an owner or another appro-
priate entity for use of the project under
section 202 of the Housing Act of 1959 or
under section 811 of the Cranston-Gon-
zalez National Affordable Housing Act.
178
‘‘(B) REQUIREMENTS FOR AGREEMENT.—
The agreement described in subparagraph (A)
shall—
‘‘(i) contain such terms, conditions,
and limitations as the Secretary deter-
mines appropriate, including requirements
to assure use of the project under the pub-
lic housing, section 202, and section 811
programs; and
‘‘(ii) ensure that no current tenant
will be displaced as a result of actions
taken under this paragraph.
‘‘(f) OTHER ASSISTANCE.—In addition to the actions
authorized by subsection (e), the Secretary may take any
of the following actions:
‘‘(1) SHORT-TERM LOANS.—Provide short-term
loans to facilitate the sale of multifamily housing
projects to nonprofit organizations or to public agen-
cies if—
‘‘(A) authority for such loans is provided
in advance in an appropriations Act;
‘‘(B) such loans are for a term of not more
than 5 years;
‘‘(C) the Secretary is presented with satis-
factory documentation, evidencing a commit-
179
ment of permanent financing to replace such
short-term loan, from a lender who meets
standards set forth by the Secretary; and
‘‘(D) the terms of such loans are consist-
ent with prevailing practices in the marketplace
or the provision of such loans results in no cost
to the Government, as defined in section 502 of
the Congressional Budget Act.
‘‘(2) TENANT-BASED ASSISTANCE.—In connec-
tion with projects referred to in subsection (e), make
available tenant-based assistance under section 8 of
the United States Housing Act of 1937 to very low-
income families (as defined in section 3(b)(2) of the
United States Housing Act of 1937) that do not
otherwise qualify for project-based assistance.
‘‘(3) ALTERNATIVE USES.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of law, and subject to notice to
and comment from existing tenants, allow not
more than—
‘‘(i) 5 percent of the total number of
units in multifamily housing projects that
are disposed of by the Secretary during
any 1-year period to be made available for
uses other than rental or cooperative uses,
180
including low-income homeownership op-
portunities, or in any particular project,
community space, office space for tenant
or housing-related service providers or se-
curity programs, or small business uses, if
such uses benefit the tenants of the
project; and
‘‘(ii) 5 percent of the total number of
units in multifamily housing projects that
are disposed of by the Secretary during
any 1-year period to be used in any man-
ner, if the Secretary and the unit of gen-
eral local government or area-wide govern-
ing body determine that such use will fur-
ther fair housing, community development,
or neighborhood revitalization goals.
‘‘(B) DISPLACEMENT
PROTECTION.—The
Secretary shall make available tenant-based
rental assistance under section 8 of the United
States Housing Act of 1937 to any tenant dis-
placed as a result of actions taken by the Sec-
retary pursuant to subparagraph (A), and the
Secretary shall take such actions as the Sec-
retary determines necessary to ensure the suc-
cessful use of any tenant-based assistance.
181
‘‘(g) AUTHORIZATION OF USE OR RENT RESTRIC-
TIONS IN UNSUBSIDIZED PROJECTS.—In carrying out the
goals specified in subsection (a), the Secretary may re-
quire certain units in unsubsidized projects to contain use
or rent restrictions providing that such units will be avail-
able to and affordable by very low-income persons for the
remaining useful life of the property, as defined by the
Secretary.
‘‘(h) CONTRACT REQUIREMENTS.—
‘‘(1) CONTRACT TERM.—
‘‘(A) IN GENERAL.—Contracts for project-
based rental assistance under section 8 of the
United States Housing Act of 1937 provided
pursuant to this section shall be for a term of
not more than 15 years; and
‘‘(B) CONTRACT TERM OF LESS THAN 15
YEARS.—Notwithstanding subparagraph (A), to
the extent that units receive project-based as-
sistance for a contract term of less than 15
years, the Secretary shall require that rents
charged to tenants for such units not exceed
the amount payable for rent under section 3(a)
of the United States Housing Act of 1937 for
a period of at least 15 years.
‘‘(2) CONTRACT RENT.—
182
‘‘(A) IN
GENERAL.—The Secretary shall
set contract rents for section 8 project-based
rental contracts issued under this section at lev-
els that, in conjunction with other resources
available to the purchaser, provide for the nec-
essary costs of rehabilitation of such project
and do not exceed the percentage of the existing
housing fair market rents for the area (as de-
termined by the Secretary under section 8(c) of
the United States Housing Act of 1937) as the
Secretary may prescribe.
‘‘(B) UP-FRONT GRANTS AND LOANS.—If
such an approach is determined to be more
cost-effective, the Secretary may utilize the
budget authority provided for project-based sec-
tion 8 contracts issued under this section to—
‘‘(i) provide project-based section 8
rental assistance; and
‘‘(ii)(I) provide up-front grants for the
necessary cost of rehabilitation; or
‘‘(II) pay for any cost to the Govern-
ment, as defined in section 502 of the Con-
gressional Budget Act, for loans made pur-
suant to subsection (f)(1).
‘‘(i) DISPOSITION PLAN.—
183
‘‘(1) IN GENERAL.—Prior to the sale of a mul-
tifamily housing project that is owned by the Sec-
retary, the Secretary shall develop a disposition plan
for the project that specifies the minimum terms
and conditions of the Secretary for disposition of the
project, the initial sales price that is acceptable to
the Secretary, and the assistance that the Secretary
plans to make available to a prospective purchaser
in accordance with this section. The initial sales
price shall reflect the intended use of the property
after sale.
‘‘(2) COMMUNITY
AND
TENANT
INPUT
INTO
DISPOSITION PLANS AND SALES.—
‘‘(A) IN GENERAL.—In carrying out this
section, the Secretary shall develop procedures
to obtain appropriate and timely input into dis-
position plans from officials of the unit of gen-
eral local government affected, the community
in which the project is situated, and the tenants
of the project.
‘‘(B) TENANT ORGANIZATIONS.—The Sec-
retary shall develop procedures to facilitate,
where feasible and appropriate, the sale of mul-
tifamily housing projects to existing tenant or-
ganizations with demonstrated capacity or to
184
public or nonprofit entities which represent or
are affiliated with existing tenant organizations.
‘‘(C) TECHNICAL ASSISTANCE.—
‘‘(i) USE OF FUNDS.—To carry out
the procedures developed under subpara-
graphs (A) and (B), the Secretary is au-
thorized to provide technical assistance, di-
rectly or indirectly, and to use amounts ap-
propriated for technical assistance under
the Emergency Low Income Housing Pres-
ervation Act of 1987, the Low-Income
Housing Preservation and Resident Home-
ownership Act of 1990, subtitle B of title
IV of the Cranston-Gonzalez National Af-
fordable Housing Act, or under this section
for the provision of technical assistance
under this section.
‘‘(ii) SOURCE OF FUNDS.—Recipients
of technical assistance funding under the
Emergency Low Income Housing Preserva-
tion Act of 1987, the Low-Income Housing
Preservation and Resident Homeownership
Act of 1990, subtitle B of title IV of the
Cranston-Gonzalez 
National 
Affordable
Housing Act, or under this section shall be
185
permitted to provide technical assistance to
the extent of such funding under any of
such programs or under this section, not-
withstanding the source of funding.
‘‘(j) RIGHT OF FIRST REFUSAL.—
‘‘(1) PROCEDURE.—
‘‘(A) NOTIFICATION
BY
SECRETARY
OF
THE ACQUISITION OF TITLE.—Not later than
30 days after acquiring title to a project, the
Secretary shall notify the unit of general local
government and the State agency or agencies
designated by the Governor of the acquisition of
such title.
‘‘(B) EXPRESSION
OF
INTEREST.—Not
later than 45 days after receiving notification
from the Secretary under subparagraph (A),
the unit of general local government or des-
ignated State agency may submit to the Sec-
retary a preliminary expression of interest in
the project. The Secretary may take such ac-
tions as may be necessary to require the unit of
general local government or designated State
agency to substantiate such interest.
‘‘(C) TIMELY
EXPRESSION
OF
INTER-
EST.—If the unit of general local government or
186
designated State agency has expressed interest
in the project before the expiration of the 45-
day period referred to in subparagraph (B), and
has substantiated such interest if requested, the
Secretary, upon approval of a disposition plan
for a project, shall notify the unit of general
local government and designated State agency
of the terms and conditions of the disposition
plan and give the unit of general local govern-
ment or designated State agency not more than
90 days after the date of such notification to
make an offer to purchase the project.
‘‘(D) NO TIMELY EXPRESSION OF INTER-
EST.—If the unit of general local government or
designated State agency does not express inter-
est before the expiration of the 45-day period
referred to in subparagraph (B), or does not
substantiate an expressed interest if requested,
the Secretary, upon approval of a disposition
plan, may offer the project for sale to any inter-
ested person or entity.
‘‘(2) ACCEPTANCE
OF
OFFERS.—Where the
Secretary has given the unit of general local govern-
ment or designated State agency 90 days to make
an offer to purchase the project, the Secretary shall
187
accept an offer that complies with the terms and
conditions of the disposition plan. The Secretary
may accept an offer that does not comply with the
terms and conditions of the disposition plan if the
Secretary determines that the offer will further the
goals specified in subsection (a) by actions that in-
clude extension of the duration of low-income afford-
ability restrictions or otherwise restructuring the
transaction in a manner that enhances the long-term
affordability for low-income persons. The Secretary
shall, in particular, have discretion to reduce the ini-
tial sales price in exchange for the extension of low-
income affordability restrictions beyond the period of
assistance contemplated by the attachment of assist-
ance pursuant to subsection (e). If the Secretary and
the unit of general local government or designated
State agency cannot reach agreement within 90
days, the Secretary may offer the project for sale to
the general public.
‘‘(3) PURCHASE BY UNIT OF GENERAL LOCAL
GOVERNMENT
OR
DESIGNATED
STATE
AGENCY.—
Notwithstanding any other provision of law, a unit
of general local government (including a public hous-
ing agency) or designated State agency may pur-
188
chase a subsidized or formerly subsidized project in
accordance with this subsection.
‘‘(4) APPLICABILITY.—This subsection shall
apply to projects that are acquired on or after the
effective date of this subsection. With respect to
projects acquired before such effective date, the Sec-
retary may apply—
‘‘(A) the requirements of paragraphs (2)
and (3) of section 203(e) as such paragraphs
existed immediately before the effective date of
this subsection; or
‘‘(B) the requirements of paragraphs (1)
and (2) of this subsection, if the Secretary gives
the unit of general local government or des-
ignated State agency—
‘‘(i) 45 days to express interest in the
project; and
‘‘(ii) if the unit of general local gov-
ernment or designated State agency ex-
presses interest in the project before the
expiration of the 45-day period, and sub-
stantiates such interest if requested, 90
days from the date of notification of the
terms and conditions of the disposition
189
plan to make an offer to purchase the
project.
‘‘(k) DISPLACEMENT OF TENANTS AND RELOCATION
ASSISTANCE.—
‘‘(1) IN GENERAL.—Whenever tenants will be
displaced as a result of the disposition of, or repairs
to, a multifamily housing project that is owned by
the Secretary (or for which the Secretary is mortga-
gee in possession), the Secretary shall identify ten-
ants who will be displaced, and shall notify all such
tenants of their pending displacement and of any re-
location assistance which may be available. In the
case of a multifamily housing project that is not
owned by the Secretary (and for which the Secretary
is not mortgagee in possession), the Secretary shall
require the owner of the project to carry out the re-
quirements of this paragraph.
‘‘(2) RIGHTS
OF
DISPLACED
TENANTS.—The
Secretary shall assure for any such tenant (who con-
tinues to meet applicable qualification standards)
the right—
‘‘(A) to return, whenever possible, to a re-
paired unit;
‘‘(B) to occupy a unit in another multifam-
ily housing project owned by the Secretary;
190
‘‘(C) to obtain housing assistance under
the United States Housing Act of 1937; or
‘‘(D) to receive any other available reloca-
tion assistance as the Secretary determines to
be appropriate.
‘‘(l) MORTGAGE AND PROJECT SALES.—
‘‘(1) IN GENERAL.—The Secretary may not ap-
prove the sale of any loan or mortgage held by the
Secretary (including any loan or mortgage owned by
the Government National Mortgage Association) on
any subsidized project or formerly subsidized
project, unless such sale is made as part of a trans-
action that will ensure that such project will con-
tinue to operate at least until the maturity date of
such loan or mortgage, in a manner that will provide
rental housing on terms at least as advantageous to
existing and future tenants as the terms required by
the program under which the loan or mortgage was
made or insured prior to the assignment of the loan
or mortgage on such project to the Secretary.
‘‘(2) SALE OF CERTAIN PROJECTS.—The Sec-
retary may not approve the sale of any subsidized
project—
‘‘(A) that is subject to a mortgage held by
the Secretary; or
191
‘‘(B) if the sale transaction involves the
provision of any additional subsidy funds by the
Secretary or a recasting of the mortgage, unless
such sale is made as part of a transaction that
will ensure that such project will continue to
operate at least until the maturity date of the
loan or mortgage, in a manner that will provide
rental housing on terms at least as advan-
tageous to existing and future tenants as the
terms required by the program under which the
loan or mortgage was made or insured prior to
the proposed sale of the project.
‘‘(3) MORTGAGE SALES TO STATE AND LOCAL
GOVERNMENTS.—Notwithstanding any provision of
law that may require competitive sales or bidding,
the Secretary may carry out negotiated sales of sub-
sidized or formerly subsidized mortgages held by the
Secretary, without the competitive selection of pur-
chasers or intermediaries, to units of general local
government or State agencies, or groups of investors
that include at least one such unit of general local
government or State agency, if the negotiations are
conducted with such agencies, except that—
‘‘(A) the terms of any such sale shall in-
clude the agreement of the purchasing agency
192
or unit of local government or State agency to
act as mortgagee or owner of a beneficial inter-
est in such mortgages, in a manner consistent
with maintaining the projects that are subject
to such mortgages for occupancy by the general
tenant group intended to be served by the appli-
cable mortgage insurance program, including,
to the extent the Secretary determines appro-
priate, authorizing such unit of local govern-
ment or State agency to enforce the provisions
of any regulatory agreement or other program
requirements applicable to the related projects;
and
‘‘(B) the sale prices for such mortgages
shall be, in the determination of the Secretary,
the best prices that may be obtained for such
mortgages from a unit of general local govern-
ment or State agency, consistent with the ex-
pectation and intention that the projects fi-
nanced will be retained for use under the appli-
cable mortgage insurance program for the life
of the initial mortgage insurance contract.
‘‘(4) 
SALE
OF
MORTGAGES
COVERING
UNSUBSIDIZED
PROJECTS.—Notwithstanding 
any
other provision of law, the Secretary may sell mort-
196
management of multifamily housing projects that
are owned by the Secretary (or for which the Sec-
retary is mortgagee in possession) as well as the
steps that the Secretary has taken or plans to take
to improve the management performance of the De-
partment.’’.
(c) EFFECTIVE DATE.—The Secretary shall, by no-
tice published in the Federal Register, which shall take
effect upon publication, establish such requirements as
may be necessary to implement the amendments made by
this section. The notice shall invite public comments, and
the Secretary shall issue final regulations based on the ini-
tial notice, taking into account any public comments re-
ceived.
SEC. 583. TERMINATION OF ANNUAL DIRECT GRANT AS-
SISTANCE
(a) TERMINATION.—Pursuant to section 704(d) of
the Covenant to Establish a Commonwealth of the North-
ern Mariana Islands in Political Union with the United
States of America (48 U.S.C. 1681 note), the annual pay-
ments under section 702 of the Covenant shall terminate
as of September 30, 1993.
(b) REPEAL.—Sections 3 and 4 of the Act of March
24, 1976 (Public Law 94–241; 48 U.S.C. 1681 note), as
amended, are repealed, effective October 1, 1993.
197
Subtitle E—Social Services and
Retirement
SEC. 591. INCREASE IN RETIREMENT AGE UNDER FERS TO
65.
(a) IN GENERAL.—Chapter 84 of title 5, United
States Code, is amended by adding at the end the follow-
ing:
‘‘SUBCHAPTER VIII—SPECIAL RULES FOR CER-
TAIN POST-1993 NEW EMPLOYEES AND
MEMBERS
‘‘§ 8481. Applicability
‘‘(a) This subchapter sets forth special rules in con-
formance with which this chapter shall be applied with re-
spect to any employee who first becomes an employee sub-
ject to this chapter, or who is first elected as a Member,
after December 31, 1993.
‘‘(b) Nothing in this subchapter shall be considered
to apply with respect to any employee or Member not de-
scribed in subsection (a) or to have any effect except for
the purpose referred to in such subsection.
‘‘§ 8482. Immediate retirement
‘‘Deem section 8412 to be amended as follows:
‘‘(1) Subsection (c) is amended by striking ‘62’
and inserting ‘65’.
198
‘‘(2) Subsections (a), (b), (f), and (g) are re-
pealed.
‘‘§ 8483. Deferred retirement
‘‘Deem section 8413 to be amended as follows:
‘‘(1) Subsection (a) is amended by striking ‘62’
and inserting ‘65’.
‘‘(2) Subsection (b) is repealed.
‘‘§ 8484. References to age 62
‘‘(a) Deem section 8415 to be amended as follows:
‘‘(1) Subsection (f) is repealed.
‘‘(2) Subsection (g)(2)(B) is amended by strik-
ing ‘is at least 62 years of age and’.
‘‘(b) Deem section 8442 to be amended in subsections
(c)(2)(B) and (g)(2)(B) by striking ‘62’ each place it ap-
pears and inserting ‘65’.
‘‘(c) Deem section 8452(b)(1) to be amended by
striking ‘sixty-second’ and inserting ‘sixty-fifth’.’’.
(b) CHAPTER ANALYSIS.—The analysis for chapter
84 of title 5, United States Code, is amended by adding
at the end the following:
‘‘SPECIAL RULES FOR CERTAIN POST-1993 NEW EMPLOYEES AND MEMBERS
‘‘8481. Applicability.
‘‘8482. Immediate retirement.
‘‘8483. Deferred retirement.
‘‘8484. References to age 62.’’.
199
SEC. 592. PROVISION RELATING TO GOVERNMENT CON-
TRIBUTIONS TO THE THRIFT SAVINGS PLAN.
Section 8432(c)(2)(B) of title 5, United States Code,
is amended by adding at the end the following:
‘‘Clause (ii) shall not apply with respect to any employee
or Member described in section 8481(a).’’.
SEC. 593. DEFERRAL UNTIL AGE 62 OF COST-OF-LIVING AD-
JUSTMENTS FOR MILITARY RETIREES WHO
FIRST ENTERED MILITARY SERVICE ON OR
AFTER JANUARY 1, 1994.
Section 1401a(b)(1) of title 10, United States Code,
is amended by adding at the end the following new sen-
tence: ‘‘In the case of a member or former member under
age 62 (other than a member retired under chapter 61
of this title) who first became a member on or after Janu-
ary 1, 1994, such increase shall not become payable as
part of the retired pay of the member or former member
until the month in which the member or former member
becomes 62 years of age.’’.
SEC. 594. CONSOLIDATION OF CERTAIN SOCIAL SERVICES
PROGRAMS INTO A SINGLE BLOCK GRANT
PROGRAM.
(a) AT-RISK CHILD CARE PROGRAM MERGED INTO
PROGRAM OF BLOCK GRANTS TO STATES FOR SOCIAL
SERVICES.—
200
(1) CONSOLIDATION
OF
SERVICES.—Section
2002(a)(2)(A) of the Social Security Act (42 U.S.C.
1397a(a)(2)(A)) is amended by inserting ‘‘(including
services that could have been provided under section
402(i), as in effect immediately before the effective
date of section 504 of the Common Cents Deficit
Reduction Act of 1993)’’ after ‘‘child care services’’.
(2) CONSOLIDATION
OF
FUNDING.—Section
2003(c) of such Act (42 U.S.C. 1397b(c)) is amend-
ed—
(A) in paragraph (4), by striking ‘‘and’’;
(B) in paragraph (5), by striking ‘‘each
fiscal year after fiscal year 1989.’’ and inserting
‘‘the fiscal years 1990, 1991, 1992, 1993, and
1994; and’’; and
(C) by adding at the end the following:
‘‘(6) $2,976,000,000 for each of the fiscal years
1995, 1996, 1997, and 1998.’’.
(b) CERTAIN
DISCRETIONARY
SOCIAL
SERVICES
PROGRAMS MERGED INTO PROGRAM OF BLOCK GRANTS
TO STATES FOR SOCIAL SERVICES BUT LEFT DISCRE-
TIONARY.—
(1) CONSOLIDATION
OF
SERVICES.—Section
2002 of such Act (42 U.S.C. 1397a) is amended—
201
(A) in subsection (a), by adding at the end
the following:
‘‘(3) In addition to payments pursuant to paragraph
(1), the Secretary may make payments to a State under
this title for a fiscal year in an amount equal to its addi-
tional allotment for such fiscal year, to be used by such
State for services directed at the goals set forth in section
2001, subject to the requirements of this title.
‘‘(4) For purposes of paragraph (3)—
‘‘(A) services which are directed at the goals set
forth in section 2001 include services that could
have been provided under—
‘‘(i) the Community Services Block Grant
Act;
‘‘(ii) the Child Care and Development
Block Grant Act of 1990;
‘‘(iii) title III or VII of the Older Ameri-
cans Act of 1965; or
‘‘(iv) the State Dependent Care Develop-
ment Grants Act,
as in effect immediately before the effective date of
section 504 of the Common Cents Deficit Reduction
Act of 1993; and
‘‘(B) expenditures for such services may include
expenditures described in paragraph (2)(B).’’; and
202
(B) in each of subsections (b), (c), and (d),
by inserting ‘‘or additional allotment’’ after ‘‘al-
lotment’’ each place such term appears.
(2) CONSOLIDATION
OF
FUNDING.—Section
2003 of such Act (42 U.S.C. 1397b) is amended by
adding at the end the following:
‘‘(d) The additional allotment for any fiscal year to
each State shall be determined in the same manner in
which the allotment for the fiscal year is determined for
the State under the preceding subsections of this section,
except that, in making such determination the following
amounts shall be used in lieu of the amount specified in
subsection (c):
‘‘(1) $2,301,000,000 for the fiscal year 1995.
‘‘(2) $2,359,000,000 for the fiscal year 1996.
‘‘(3) $2,419,000,000 for the fiscal year 1997.
‘‘(4) $2,478,000,000 for the fiscal year 1998.’’.
(c) CONFORMING AMENDMENTS AND REPEALS.—
(1) 
COMMUNITY
SERVICES
BLOCK
GRANT
ACT.—The Community Services Block Grant Act
(42 U.S.C. 9901 et seq.) is hereby repealed.
(2) CHILD
CARE
AND
DEVELOPMENT
BLOCK
GRANT ACT OF 1990.—The Child Care and Develop-
ment Block Grant Act of 1990 (42 U.S.C. 9858 et
seq.) is hereby repealed.
203
(3) OLDER
AMERICANS
ACT
OF
1965.—The
Older Americans Act of 1965 (42 U.S.C. 3001 et
seq.) is amended by striking titles III and VII.
(4) STATE
DEPENDENT
CARE
DEVELOPMENT
GRANTS ACT.—The State Dependent Care Develop-
ment Grants Act (42 U.S.C. 9871 et seq.) is hereby
repealed.
(5) AT-RISK CHILD CARE PROGRAM.—
(A) PROGRAM
AUTHORITY.—Section 402
of the Social Security Act (42 U.S.C. 602) is
amended—
(i) in subsection (g)(7), by striking
‘‘and subsection (i)’’; and
(ii) by striking subsection (i).
(B) FUNDING
PROVISIONS.—Section 403
of the Social Security Act (42 U.S.C. 603) is
amended by striking subsection (n).
(d) EFFECTIVE DATE.—The amendments and re-
peals made by this section shall take effect on October
1, 1994.
SEC. 595. AWARDS OF PELL GRANTS TO PRISONERS PRO-
HIBITED.
(a) IN GENERAL.—Section 401(b)(8) the Higher
Education Act of 1965 (20 U.S.C. 1070a(b)(8)) is amend-
ed to read as follows:
204
‘‘(8) No basic grant shall be awarded under this sub-
part to any individual who is incarcerated in any Federal
or State penal institution.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply with respect to periods of enroll-
ment beginning on or after the date of enactment of this
Act.
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