Housing Act of 1937 resides at the time of acquisi-
tion or financing, the owner and any successor in in-
terest shall be subject to the lease and to the hous-
ing assistance payments contract for the occupied 
unit. Vacating the property prior to sale shall not 
constitute good cause for termination of the tenancy 
unless the property is unmarketable while occupied 
or unless the owner or subsequent purchaser desires 
the unit for personal or family use. This paragraph 
shall not preempt any State or local law that pro-
vides more protection for tenants. 
(i) EFFECT
OF FORECLOSURE
ON PREEXISTING 
LEASE.— 
(1) IN
GENERAL.—In the case of any fore-
closure on any dwelling or residential real property 
acquired with any amounts made available under 
this Act, any successor in interest in such property 
pursuant to the foreclosure shall assume such inter-
est subject to— 
(A) the provision, by the successor in inter-
est, of a notice to vacate to any bona fide ten-
ant at least 90 days before the effective date of 
the notice to vacate; and 
(B) the rights of any bona fide tenant, as 
of the date of such notice of foreclosure—
(i) under any bona fide lease entered 
into before the notice of foreclosure to oc-
cupy the premises until the end of the re-
maining term of the lease or the end of the 
6-month period beginning on the date of 
the notice of foreclosure, whichever occurs 
first, subject to the receipt by the tenant 
of the 90-day notice under subparagraph 
(A); or 
(ii) without a lease or with a lease ter-
minable at will under State law, subject to 
the receipt by the tenant of the 90-day no-
tice under subparagraph (A), except that 
nothing under this subparagraph shall af-
fect the requirements for termination of 
any federally subsidized tenancy. 
(2) BONA FIDE LEASE OR TENANCY.—For pur-
poses of this subsection, a lease or tenancy shall be 
considered bona fide only if— 
(A) the mortgagor under the contract is 
not the tenant; 
(B) the lease or tenancy was the result of 
an arms-length transaction; or
(C) the lease or tenancy requires the re-
ceipt of rent that is not substantially less than 
fair market rent for the property. 
(j) PROHIBITION OF DEMOLITION OF PUBLIC HOUS-
ING.—Notwithstanding any other provision of this Act, 
amounts from a grant or loan under this Act may not be 
used to demolish any public housing (as such term is de-
fined in section 3 of the United States Housing Act of 
1937 (42 U.S.C. 1437a)). 
SEC. 9. SHARED APPRECIATION AGREEMENT. 
Notwithstanding any other provision of this Act, no 
amounts from a loan or grant under this Act may be used 
under section 8 for any qualified foreclosed housing unless 
such binding agreements are entered into, in accordance 
with such requirements as the Secretary shall establish, 
that ensure that the Federal Government shall, upon any 
sale or disposition of the qualified foreclosed housing by 
the owner who acquires the housing pursuant to assistance 
under this Act, receive an amount equal to 20 percent of 
the difference between the net proceeds from such sale or 
disposition and the cost of such acquisition of the housing 
pursuant to assistance under this Act, after deductions for 
expenditures paid or incurred after the date of such acqui-
sition that are properly chargeable to capital account 
(within the meaning of section 1016 of the Internal Rev-
enue Code of 1986) with respect to such housing. In the 
case of a for-profit owner, this section shall be applied by 
substituting ‘‘50 percent’’ for ‘‘20 percent’’. 
SEC. 10. SPENDING REQUIREMENTS. 
(a) IN GENERAL.—Each allocation recipient that re-
ceives a grant under this Act or is allocated loan authority 
amounts under this Act pursuant to section 5(b) shall— 
(1) commence obligation of such grant amounts 
and commitment of such loan authority amounts not 
later than the expiration of the 120-day period that 
begins upon approval of the approved plan of alloca-
tion recipient; 
(2) obligate all such grant amounts and enter 
into commitments for all such loan authority 
amounts not later than the expiration of the 180-day 
period beginning upon such approval; and 
(3) except as provided in subsection (b) of this 
section, outlay all such grant amounts and disburse 
all such loan authority amounts not later than the 
24-month period that begins upon such approval. 
This subsection shall not apply to loan authority amounts 
of an allocation recipient attributable, pursuant to section 
6(b)(2), to repayment of principal amounts of loans under 
this Act.
(b) EXCEPTION TO SPENDING REQUIREMENT.—If an 
allocation recipient in good faith makes a request, in the 
plan submitted to the Secretary pursuant to section 4 or 
otherwise after approval of such plan, for extension of the 
period referred to in paragraph (1), (2), or (3) of sub-
section (a) of this section, the Secretary may extend the 
period for not more than 5 months. 
SEC. 11. SERVICER CONTACT. 
The servicer of a federally related mortgage loan (as 
such term is defined in section 3 of the Real Estate Settle-
ment Procedures Act of 1974 (12 U.S.C. 2602)) shall no-
tify the unit of general local government in which the 
property securing the mortgage is located upon becoming 
responsible for a qualified foreclosed property and provide 
such unit of general local government with the name and 
24-hour contact information of a representative authorized 
to negotiate purchases. 
SEC. 12. ACCOUNTABILITY. 
(a) REPORTING.—Each allocation recipient that re-
ceives a grant or allocation of loan authority amount 
under this Act shall submit a report to the Secretary, not 
later than the expiration of the 12-month period beginning 
upon the approval of the qualified plan by the Secretary, 
regarding use of such amounts which shall contain such 
information, including information about the location and
type of assisted properties and the income of families pur-
chasing or renting housing assisted under this Act, as the 
Secretary shall require. 
(b) MISUSE OF AMOUNTS.—If the Secretary deter-
mines that any amounts from a grant or loan under this 
Act for an allocation recipient or other recipient of grant 
or loans funds has been used in a manner that is in viola-
tion of this Act, any regulations issued under this Act, 
or any requirements or conditions under which such 
amounts were provided, the Secretary shall require the al-
location recipient or other recipient of grant or loans funds 
to reimburse the Treasury of the United States in the 
amount of any such misused funds. 
(c) HOLD HARMLESS.—Notwithstanding subsection 
(b), a State shall not be required to reimburse the Treas-
ury of the United States for any misused funds such State 
is required to allocate to a qualified metropolitan city or 
qualified urban county under subsection (f) or (g) of sec-
tion 5, respectively. 
SEC. 13. DEFINITIONS. 
For purposes of this Act, the following definitions 
shall apply: 
(1) ALLOCATION RECIPIENT.—The term ‘‘allo-
cation recipient’’ means— 
(A) a qualified State;
such term in section 104 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 
12704). 
(7) QUALIFIED
FORECLOSED
HOUSING.—The 
term ‘‘qualified foreclosed housing’’ means housing 
that— 
(A)(i) is single family housing that is not 
occupied by an owner, pursuant to foreclosure 
or assignment of the mortgage on the housing 
or forfeiture of the housing; or 
(ii) is covered multifamily housing; 
(B) is owned by a lender, mortgage com-
pany, investor, financial institution, or other 
such entity, or any government entity, pursuant 
to foreclosure or assignment of the mortgage on 
the housing or forfeiture of the housing; and 
(C) has a purchase price— 
(i) in the case of single family hous-
ing, that does not exceed the lesser of— 
(I) 110 percent of the average 
purchase price for single family hous-
ing in the area in which the housing 
is located, as determined by the Sec-
retary; or
(II) the current appraised value 
of the property; 
except that in the case of any such housing 
that has an appraised value that is less 
than 110 percent of the average purchase 
price for single family housing in the area 
in which the housing is located, an alloca-
tion recipient may appeal such appraisal to 
the Secretary and the Secretary may deter-
mine that the average purchase price shall 
operate as the cap on the purchase price; 
and 
(ii) in the case of covered multifamily 
housing, that does not exceed the dollar 
amount limitation, for housing of the ap-
plicable size located in the area in which 
the housing is located, on the amount of a 
principal obligation of a mortgage eligible 
for insurance under section 207 of the Na-
tional Housing Act (12 U.S.C. 1713), as in 
effect on the date of the enactment of this 
Act pursuant to such section 207(c)(3)(A) 
and section 206A of such Act (12 U.S.C. 
1712a).
(8) QUALIFIED
METROPOLITAN
CITY.—The 
term ‘‘qualified metropolitan city’’ means an incor-
porated place, for which there is an improved plan, 
that— 
(A) is among the 100 most populous incor-
porated places in the United States, as deter-
mined according to data from the most recent 
decennial census that is published before the 
date of the enactment of this Act; or 
(B)(i) has a minimum population of 
50,000, as determined according to data from 
the most recent decennial census that is pub-
lished before the date of the enactment of this 
Act; and 
(ii) has a foreclosure rate that exceeds 125 
percent of the foreclosure rate for the entire 
State. 
(9) QUALIFIED
STATE.—The term ‘‘qualified 
State’’ means a State for which there is an approved 
plan. 
(10) QUALIFIED
URBAN
COUNTY.—The term 
‘‘qualified urban county’’ means an urban county (as 
such term is defined in section 102 of the Housing 
and Community Development Act of 1974 (42 
U.S.C. 5302)), for which there is an approved plan,
that is among the 50 most populous urban counties 
in the United States, as determined— 
(A) according to data from the most recent 
decennial census; and 
(B) excluding the population of any quali-
fied metropolitan city within such urban county, 
unless such metropolitan city has agreed to 
have its population included with the population 
of the county for the purposes of this Act. 
(11) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Housing and Urban Develop-
ment. 
(12) SINGLE
FAMILY
HOUSING.—The term 
‘‘single family housing’’ means a residential struc-
ture consisting of from one to four dwelling units. 
(13) STATE.—The term ‘‘State’’ means any 
State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Common-
wealth of the Northern Mariana Islands, Guam, the 
Virgin Islands, American Samoa, and other territory 
or possession of the United States. 
SEC. 14. FUNDING. 
(a) GRANTS.—There is authorized to be appropriated 
to the Secretary of the Treasury $7,500,000,000 for 
grants under this Act.