I
107TH CONGRESS
2D SESSION
H. R. 3995
To amend and extend certain laws relating to housing and community
opportunity, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 19, 2002
Mrs. ROUKEMA (for herself, Mr. GREEN of Wisconsin, Mr. OXLEY, Mr. AN-
DREWS, Mr. LUCAS of Kentucky, Mr. BEREUTER, Mr. BACHUS, Mr.
KING, Mr. NEY, Mr. BARR of Georgia, Mrs. KELLY, Mr. RILEY, Mr.
GARY G. MILLER of California, Mr. CANTOR, Mr. GRUCCI, Mr. ROGERS
of Michigan, Mr. TIBERI, Mr. LEACH, Mr. SHAYS, Mr. LATOURETTE,
Mr. JONES of North Carolina, Ms. HART, Mr. FERGUSON, and Mr. PICK-
ERING) introduced the following bill; which was referred to the Committee
on Financial Services, and in addition to the Committee on the Judiciary,
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
committee concerned
A BILL
To amend and extend certain laws relating to housing and
community opportunity, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Housing Affordability for America Act of 2002’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
TITLE I—HOME INVESTMENT PARTNERSHIPS PROGRAM
Sec. 101. Affordable housing production and preservation.
Sec. 102. Removal of fair market rents from rent level determinations.
Sec. 103. Median income for rent determinations.
Sec. 104. 3-year inspection cycle for tax credit projects.
Sec. 105. Repeal of limitations on program assistance as percentage of oper-
ating budget.
Sec. 106. Eligibility of room additions for use for grandparents and grand-
children.
Sec. 107. Program year for matching contributions.
Sec. 108. Membership of boards of eligible community housing development or-
ganizations.
Sec. 109. Monitoring of compliance.
Sec. 110. Funding eligibility for secular activities carried out by religious orga-
nizations.
TITLE II—FHA MORTGAGE INSURANCE
Subtitle A—Multifamily Housing and Health Care Facilities
Sec. 201. Indexing of multifamily mortgage limits.
Sec. 202. High-cost areas.
Sec. 203. Insurance for integrated service facilities mortgages.
Sec. 204. Insurance for mortgages for integrated service facilities owned in con-
nection with hospitals.
Sec. 205. Insurance for mortgages for refinancing debt of existing integrated
service facilities.
Sec. 206. Standards and need for health care facility mortgage insurance.
Subtitle B—Single Family Housing
Sec. 221. Downpayment simplification.
Sec. 222. Reduced downpayment requirements for loans for teachers and public
safety officers.
Sec. 223. Community partners next door program.
Sec. 224. Public safety officer home ownership in high-crime areas.
Sec. 225. Servicing of HUD-owned mortgages.
Sec. 226. Risk-based capital levels for Mutual Mortgage Insurance Fund.
Sec. 227. Hybrid adjustable rate mortgages.
Sec. 228. Uniform national loan limit for home equity conversion mortgages.
Sec. 229. Prohibition of investor and nonprofit owners under rehabilitation loan
program.
Sec. 230. Rehabilitation loan advances.
Sec. 231. Nonprofit purchasers under property disposition.
Sec. 232. Extension of holding period.
Sec. 233. Fraud in loan and credit applications.
TITLE III—SUPPORTIVE HOUSING FOR ELDERLY AND DISABLED
FAMILIES
Sec. 301. Modernization demonstration for section 236 elderly projects.
Sec. 302. Service coordinators for supportive housing for persons with disabil-
ities.
Sec. 303. Eligibility of religious organizations as project owners.
TITLE IV—SECTION 8 RENTAL HOUSING ASSISTANCE PROGRAM
Sec. 401. Thrifty production vouchers.
Sec. 402. Monthly rental amount.
Sec. 403. Flexibility to assist hard-to-house families.
Sec. 404. Prohibition on re-screening of tenants.
Sec. 405. PHA administrative fees.
Sec. 406. Ensuring ability to use enhanced vouchers.
Sec. 407. Extension of manufactured housing demonstration program.
Sec. 408. Extension of project-based section 8 contract renewals.
TITLE V—PUBLIC HOUSING
Subtitle A—General Provisions
Sec. 501. Waiver of resident commissioner requirement.
Sec. 502. PHA joint ventures.
Sec. 503. Third-party public housing assessment system.
Sec. 504. Public housing agency plans for small public housing agencies.
Sec. 505. Development-based subsidies.
Subtitle B—HOPE VI Revitalization Program
Sec. 521. Selection criteria.
Sec. 522. Authorization of appropriations.
Sec. 523. Extension of program.
TITLE VI—HOMELESS HOUSING PROGRAMS
Sec. 601. Interagency Council on the Homeless.
Sec. 602. Federal Emergency Management Agency food and shelter program.
Sec. 603. Emergency shelter grants program.
Sec. 604. Supportive housing program.
Sec. 605. Section 8 assistance for single room occupancy dwellings.
Sec. 606. Shelter plus care.
Sec. 607. Amendments to table of contents.
TITLE VII—NATIVE AMERICAN HOUSING
Sec. 701. Reauthorization of Native American Housing and Self-Determination
Act of 1996.
TITLE VIII—HOUSING IMPACT ANALYSIS
Sec. 801. Applicability.
Sec. 802. Exception for certain banking rules.
Sec. 803. Statement of proposed rulemaking.
Sec. 804. Initial housing impact analysis.
Sec. 805. Final housing impact analysis.
Sec. 806. Avoidance of duplicative or unnecessary analyses.
Sec. 807. Preparation of analyses.
Sec. 808. Effect on other law.
Sec. 809. Procedure for waiver or delay of completion.
Sec. 810. Definitions.
Sec. 811. Development.
Sec. 812. Judicial review.
TITLE IX—OTHER HOUSING PROGRAMS
Sec. 901. GNMA guarantee fee.
Sec. 902. Housing counseling programs.
Sec. 903. Assistance for self-help housing providers.
Sec. 904. Housing opportunities for persons with AIDS.
Sec. 905. CDBG funding eligibility for secular activities carried out by religious
organizations.
Sec. 906. Use of CDBG amounts for construction of tornado-safe shelter for
manufactured housing parks.
Sec. 907. Use of CDBG amounts to administer renewal communities.
Sec. 908. Subsidy layering review.
TITLE I—HOME INVESTMENT
PARTNERSHIPS PROGRAM
SEC. 101. AFFORDABLE HOUSING PRODUCTION AND PRES-
ERVATION.
(a) PURPOSE.—The purpose of this section is to dra-
matically increase the production and preservation of
mixed income rental housing affordable to extremely low-
income and very low-income families.
(b) DEFINITION.—Section 104 of the Cranston-Gon-
zalez National Affordable Housing Act (42 U.S.C. 12704)
is amended—
(1) by redesignating paragraph (25) as para-
graph (26);
(2) by redesignating paragraph (24) (as added
by Public Law 102–229; 105 Stat. 1709; relating to
insular areas) as paragraph (25);
(3) by redesignating paragraphs (9) through
(21) as paragraphs (10) through (22), respectively;
and
(4) by inserting after paragraph (8) the fol-
lowing new paragraph:
‘‘(9) The term ‘‘extremely low-income families’’
means very low-income families whose incomes do
not exceed 30 percent of the median income for the
area, as determined by the Secretary with adjust-
ments for smaller and larger families, except that
the Secretary may establish income ceilings higher
or lower than 30 percent of the median 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 unusu-
ally high or low family incomes.’’.
(c) ELIGIBLE USES.—Section 212(a) of the Cran-
ston-Gonzalez National Affordable Housing Act (42
U.S.C. 12742(a)) is amended—
(1) in paragraph (2), by adding at the end the
following new sentence: ‘‘This paragraph shall not
apply to any funds made available only for use
under paragraph (4).’’; and
(2) by inserting after paragraph (3) the fol-
lowing new paragraph:
‘‘(4) PRODUCTION AND PRESERVATION.—
‘‘(A) IN GENERAL.—Funds made available
for use under this paragraph shall be used by
the participating jurisdiction only for the pro-
duction of new, or the preservation of existing,
rental housing for extremely low- and very low-
income families that qualifies as affordable
housing in accordance with section 215(c).
‘‘(B) FORM
OF
ASSISTANCE.—Assistance
provided by a participating jurisdiction pursu-
ant to this paragraph may be provided in the
form of grants or loans (including grants and
loans made through State and local housing
trust funds) and may only be used for acquisi-
tion, new construction, reconstruction, or mod-
erate or substantial rehabilitation of affordable
housing described in subparagraph (A).
‘‘(C) INCOME TARGETING AND RENT.—
‘‘(i) VERY LOW-INCOME FAMILIES.—
All of the funds made available for use
under this paragraph to a participating ju-
risdiction shall be used for providing dwell-
ing units that may be occupied only by
very low-income families.
‘‘(ii) EXTREMELY LOW-INCOME FAMI-
LIES.—Not less than 50 percent of any
funds made available for use under this
paragraph to a participating jurisdiction
shall be used for providing dwelling units
that may be occupied only by extremely
low-income families.
‘‘(D) RENT.—Except as provided in sub-
paragraph (G), each family occupying a dwell-
ing unit provided using amounts made available
for use under this paragraph shall pay as a
contribution toward rent (excluding any Federal
or State rental subsidy provided on behalf of
the family) not more than 40 percent of the
family’s gross monthly income.
‘‘(E) REUSE.—Any funds made available
to a participating jurisdiction only for use
under this paragraph shall be placed under
binding commitment for use for production or
preservation of affordable rental housing in ac-
cordance with this paragraph within 18 months
after the last day of the month in which such
funds are deposited in the jurisdiction’s HOME
Investment Trust Fund, except that the Sec-
retary may extend such period by not more
than 6 months pursuant to a request by the
participating jurisdiction. Expiration of such
period (including any such extension, if applica-
ble) shall be considered, for purposes of section
218(g), to be expiration of the 24-month period
referred to in such section, except that any
funds made available for use under this para-
graph shall be reallocated only for use under
this paragraph.’’.
‘‘(F) QUALIFICATION
AS
AFFORDABLE
HOUSING.—Subparagraphs (A), (B), and (C) of
section 215(a)(1) shall not apply to housing
that is assisted with amounts made available
under this paragraph.
‘‘(G) INCREASES
IN
TENANT
INCOME.—
Housing that is assisted with amounts made
available under section 212(a)(4) shall qualify
as affordable housing despite a temporary non-
compliance with clause (i) or (ii) of subpara-
graph (C) if such noncompliance is caused by
increases in the incomes of existing tenants and
if actions satisfactory to the Secretary are being
taken to ensure that all vacancies are filled in
accordance with subparagraph (C) until such
noncompliance is corrected. Tenants who no
longer qualify as very low-income families shall
pay as rent the lesser of the amount payable by
the tenant under State or local law or 40 per-
cent of the family’s gross monthly income, as
recertified annually. The preceding sentence
shall not apply with respect to funds made
available under this Act for units that have
been allocated a low-income housing tax credit
by a housing credit agency pursuant to section
42 of the Internal Revenue Code 1986.’’.
(d) ALLOCATION.—Section 217 of the Cranston-Gon-
zalez National Affordable Housing Act (42 U.S.C. 12747)
is amended—
(1) in subsection (a), by inserting after ‘‘IN
GENERAL.—’’ the following: ‘‘Except with respect to
amounts subject to allocation under subsection (e)’’;
and
(2) by adding at the end the following new sub-
section:
‘‘(e) ALLOCATION OF AMOUNTS FOR PRODUCTION
AND PRESERVATION.—
‘‘(1) IN GENERAL.—Funds made available for
use only under section 212(a)(4) shall be allocated
in accordance with the formula established under
paragraph (2). Of such funds made available under
the preceding sentence, the Secretary shall allocate
60 percent among units of general local government
and 40 percent among States.
‘‘(2) FORMULA.—The Secretary shall establish
in regulation an allocation formula that reflects each
jurisdiction’s share of total need among participating
jurisdictions for an increased supply of affordable
housing for extremely low- and very low-income fam-
ilies, as identified by objective measures of inad-
equate housing supply, which shall include low va-
cancy rates, low turnover of units with rents below
fair market rents established under section 8 of the
United States Housing Act of 1937, a high propor-
tion of substandard housing, the cost of producing
housing, and other measures that the Secretary con-
siders appropriate.
‘‘(3) SOURCE OF DATA.—The data to be used
for formula allocation of funds under this subsection
within a fiscal year shall be data obtained from a
standard source that are available to the Secretary
90 days before the beginning of that fiscal year.
‘‘(4) CONSULTATION.—The Secretary shall de-
velop the formula under paragraph (2) in ongoing
consultation with (A) the Subcommittee on Housing
and Community Opportunity of the Committee on
Financial Services of the House of Representatives,
(B) the Subcommittee on Housing and Transpor-
tation of the Committee on Banking, Housing, and
Urban Affairs of the Senate, and (C) organizations
representing States and units of general local gov-
ernment. Not less than 60 days before publishing a
formula for comment, the Secretary shall submit a
copy of the formula the Secretary intends to propose
to the Committee on Financial Services of the House
of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate.’’.
(e) MATCHING REQUIREMENTS.—Section 220 of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12750) is amended by adding at the end the fol-
lowing new subsection:
‘‘(e) PRODUCTION AND PRESERVATION.—In the case
of affordable housing assisted under section 212(a)(4):
‘‘(1) SUBGRANTEE CONTRIBUTIONS.—Any con-
tributions to the housing made by subgrantees of the
participating jurisdiction using amounts made avail-
able under this title for such housing shall be consid-
ered contributions made by the participating juris-
diction, for purposes of this section.
‘‘(2) USE
OF
TAX
CREDITS
AND
CDBG
AMOUNTS.—In addition to contributions specified in
subsection (c), contributions for such housing may
be in the form of—
‘‘(A) any tax credits under State or Fed-
eral law; and
‘‘(B) notwithstanding subsection (c)(1),
any funds from a grant made under section 106
of the Housing and Community Development
Act of 1974.
‘‘(3) WAIVER FOR POOR AND RURAL COMMU-
NITIES.—The Secretary may reduce or waive the
matching requirement under subsection (a) with re-
spect to any participating jurisdiction that—
‘‘(A) is located in a rural area; or
‘‘(B) has certified that it is in fiscal dis-
tress or severe fiscal distress for purposes of
this section.’’.
(f) AUTHORIZATION OF APPROPRIATIONS.—Section
205 of the Cranston-Gonzalez National Affordable Hous-
ing Act (42 U.S.C. 12724) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘There are authorized’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) PRODUCTION AND PRESERVATION OF AFFORD-
ABLE HOUSING.—There are authorized to be appropriated
for allocation under section 217(e) for use only for produc-
tion and preservation of affordable rental housing under
section 212(4) any unobligated balances from amounts ap-
propriated for fiscal year 2004 or any fiscal year there-
after for assistance under section 8 of the United States
Housing Act of 1937 and that are recaptured.’’.
SEC. 102. REMOVAL OF FAIR MARKET RENTS FROM RENT
LEVEL DETERMINATIONS.
(a) DEFINITIONS.—Section 104 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C.
12704) is amended—
(1) in paragraph (9), by striking ‘‘or fair mar-
ket rents,’’; and
(2) in paragraph (10), by striking ‘‘or fair mar-
ket rents,’’.
(b) INCOME TARGETING.—Section 214(1)(A) of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12744(1)(A)) is amended by striking ‘‘or fair mar-
ket rent,’’.
(c) QUALIFICATION
AS AFFORDABLE HOUSING.—
Section 215(a)(1)(A) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12745(a)(1)(A)) is
amended—
(1) by striking ‘‘the lesser of (i) the existing
fair market rent for comparable units in the area as
established by the Secretary under section 8 of the
United States Housing Act of 1937, or (ii) a rent
that does not exceed’’ and inserting ‘‘the amount
that is equal to’’; and
(2) by striking ‘‘or fair market rents,’’.
SEC. 103. MEDIAN INCOME FOR RENT DETERMINATIONS.
Section 215(a)(1)(A) of the Cranston-Gonzalez Na-
tional 
Affordable 
Housing 
Act 
(42 
U.S.C.
12745(a)(1)(A)) is amended—
(1) by inserting ‘‘or State, whichever is great-
er’’ before the second comma; and
(2) by inserting ‘‘or State, whichever is great-
er,’’ before ‘‘on the basis’’.
SEC. 104. 3-YEAR INSPECTION CYCLE FOR TAX CREDIT
PROJECTS.
Subsection (b) of section 226 of the Cranston-Gon-
zalez National Affordable Housing Act (42 U.S.C. 12756)
is amended to read as follows:
‘‘(b) PERIODIC MONITORING.—
‘‘(1) REQUIREMENT.—Each participating juris-
diction shall review the activities of owners of afford-
able housing for rental that is assisted under this
title to assess compliance with the requirements of
this title. Such review shall be conducted in compli-
ance with the provisions of paragraph (2) (relating
to frequency) and shall include on-site inspection to
determine compliance with housing codes and other
applicable regulations.
‘‘(2) FREQUENCY.—The review required by
paragraph (1) shall be conducted not less frequently
than—
‘‘(A) except as provided in subparagraph
(B), annually; and
‘‘(B) in the case of affordable housing for
rental that has been allocated a low-income
housing tax credit by a housing credit agency
pursuant to section 42 of the Internal Revenue
Code 1986 and is not considered (under such
regulations as the Secretary shall prescribe) to
be high-risk housing, once every 3 years, or
more often as may be required under the regu-
lations issued pursuant to such section 42.
‘‘(3) INCLUSION IN PERFORMANCE REPORT.—
The results of each review of a participating juris-
diction shall be included in the performance report
of the jurisdiction that is submitted under section
108(a) for the year in which the review is conducted
and shall be made available to the public.’’.
habitation, with the low-income family occupying the
dwelling, of an elderly person who is a relative of the fam-
ily and to avoid placement of such relative in an institu-
tionalized setting, foster care, or other out-of-home set-
ting.’’.
SEC. 107. PROGRAM YEAR FOR MATCHING CONTRIBU-
TIONS.
Section 220 of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 12750) is amended—
(1) in subsection (a)—
(A) by striking ‘‘a fiscal year’’ and insert-
ing ‘‘a program year of the jurisdiction’’; and
(B) by striking ‘‘such fiscal year’’ and in-
serting ‘‘such program year’’; and
(2) in subsection (d)—
(A) in paragraph (1), by striking ‘‘fiscal
year’’ and inserting ‘‘program year of the juris-
diction’’;
(B) in paragraph (3), by striking ‘‘fiscal
year’’ each place such term appears and insert-
ing ‘‘program year’’; and
(C) in paragraph (5), by striking ‘‘fiscal
year’’ and inserting ‘‘program year of the juris-
diction’’.
SEC. 108. MEMBERSHIP OF BOARDS OF ELIGIBLE COMMU-
NITY HOUSING DEVELOPMENT ORGANIZA-
TIONS.
Section 104(6) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12704(6)) is amended
by adding at the end the following: ‘‘In establishing re-
quirements for an organization to be considered a commu-
nity housing development organization for purposes of this
Act, the Secretary may not prohibit, limit, or restrict
membership on the board by public employees who are not
elected or appointed or who do not exercise policy-making
or policy-determining functions.’’.
SEC. 109. MONITORING OF COMPLIANCE.
(a) AUTHORITY AND AGREEMENTS.—Section 226 of
the Cranston-Gonzalez National Affordable Housing Act
(42 U.S.C. 12756) is amended—
(1) in the second sentence of subsection (a)—
(A) by striking ‘‘and’’; and
(B) by inserting before the period at the
end the following: ‘‘, and (3) such fees as may
be established by the participating jurisdiction
pursuant to subsection (c)’’;
(2) by redesignating subsection (c) as sub-
section (d); and
(3) by inserting after subsection (b) the fol-
lowing new subsection:
‘‘(c) MONITORING FEES.—A participating jurisdic-
tion may establish and charge fees to affordable housing
projects assisted under this title for costs of monitoring
compliance with the provisions of this title.’’.
(b) USE OF INVESTMENT.—Section 212 of the Cran-
ston-Gonzalez National Affordable Housing Act (42
U.S.C. 12742(c)), as amended by the preceding provisions
of this Act, is further amended by adding at the end the
following new subsection:
‘‘(h) MONITORING FEES.—Monitoring fees under
section 226(c) for an affordable housing project may be
paid for from amounts made available under this subtitle
to the project, in accordance with an agreement pursuant
to section 226(a).’’.
SEC. 110. FUNDING ELIGIBILITY FOR SECULAR ACTIVITIES
CARRIED OUT BY RELIGIOUS ORGANIZA-
TIONS.
Title II of the Cranston-Gonzalez National Affordable
Housing Act is amended—
(1) in section 202(10) (42 U.S.C. 12721(10)),
by inserting ‘‘religious organizations,’’ after ‘‘trade
unions,’’; and
(2) in section 212 (42 U.S.C. 12742), as
amended by the preceding provisions of this Act, by
adding at the end the following new subsection:
‘‘(g) ELIGIBLE SUBRECIPIENTS.—Funds made avail-
able under this subtitle may be provided to religious orga-
nizations, or organizations having religious purposes, for
carrying out secular activities that qualify under this sec-
tion as eligible uses for such funds.’’.
TITLE II—FHA MORTGAGE
INSURANCE
Subtitle A—Multifamily Housing
and Health Care Facilities
SEC. 201. INDEXING OF MULTIFAMILY MORTGAGE LIMITS.
(a) SECTION 207 LIMITS.—Section 207(c)(3) of the
National Housing Act (12 U.S.C. 1713(c)(3)) is
amended—
(1) by striking ‘‘$11,250’’ and inserting
‘‘$17,460’’;
(2) by inserting before ‘‘; and except that’’ the
following: ‘‘; except that the Secretary shall adjust
each such dollar amount limitation set forth in this
paragraph (as such limitation may have been pre-
viously adjusted pursuant to this provision) effective
January 1 of each year (beginning in 2003) in ac-
cordance with the percentage increase, if any, during
the 12-month period ending with the preceding Oc-
tober, in the Annual Construction Cost Index of the
Bureau of the Census of the Department of Com-
merce’’; and
(3) by inserting after ‘‘foregoing dollar amount
limitations contained in this paragraph’’ the fol-
lowing: ‘‘(as such limitations may have been pre-
viously adjusted pursuant to this paragraph)’’.
(b) SECTION 213 LIMITS.—Section 213(b)(2) of the
National Housing Act (12 U.S.C. 1715e(b)(2)) is
amended—
(1) 
by 
striking 
‘‘$38,025’’, 
‘‘$42,120’’,
‘‘$50,310’’, ‘‘$62,010’’, and ‘‘$70,200’’, and insert-
ing ‘‘$41,207’’, ‘‘$47,511’’, ‘‘$57,300’’, ‘‘$73,343’’,
and ‘‘$81,708’’, respectively;
(2) 
by 
striking 
‘‘$49,140’’, 
‘‘$60,255’’,
‘‘$75,465’’, 
and 
‘‘$85,328’’, 
and 
inserting
‘‘$49,710’’, ‘‘$60,446’’, ‘‘$78,197’’, and ‘‘$85,836’’,
respectively;
(3) by inserting after the colon at the end of
the first proviso the following: ‘‘Provided further,
That the Secretary shall adjust each such dollar
amount limitation set forth in this paragraph (as
such limitation may have been previously adjusted
pursuant to this provision) effective January 1 of
each year (beginning in 2003) in accordance with
the percentage increase, if any, during the 12-month
period ending with the preceding October, in the An-
nual Construction Cost Index of the Bureau of the
Census of the Department of Commerce’’; and
(4) by inserting after ‘‘foregoing dollar amount
limitations contained in this paragraph’’ the fol-
lowing: ‘‘(as such limitations may have been pre-
viously adjusted pursuant to this paragraph)’’.
(c) SECTION 220 LIMITS.—Section 220(d)(3)(B)(iii)
of 
the 
National 
Housing 
Act 
(12 
U.S.C.
1715k(d)(3)(B)(iii)) is amended—
(1) by inserting after ‘‘foregoing dollar amount
limitations contained in this clause’’, the first place
such phrase appears, the following: ‘‘(as such limita-
tions may have been previously adjusted pursuant to
this clause)’’.
(2) by inserting after ‘‘Provided,’’ the following:
‘‘That the Secretary shall adjust each such dollar
amount limitation set forth in this clause (as such
limitation may have been previously adjusted pursu-
ant to this provision) effective January 1 of each
year (beginning in 2003) in accordance with the per-
centage increase, if any, during the 12-month period
ending with the preceding October, in the Annual
Construction Cost Index of the Bureau of the Cen-
‘‘(as such limitations may have been previously ad-
justed pursuant to this clause)’’.
(e) 
SECTION
221(d)(4) 
LIMITS.—Section
221(d)(4)(ii) of the National Housing Act (12 U.S.C.
1715l(d)(4)(ii)) is amended—
(1) by inserting before ‘‘; and except that’’ the
following: ‘‘; except that the Secretary shall adjust
each such dollar amount limitation set forth in this
clause (as such limitation may have been previously
adjusted pursuant to this provision) effective Janu-
ary 1 of each year (beginning in 2003) in accord-
ance with the percentage increase, if any, during the
12-month period ending with the preceding October,
in the Annual Construction Cost Index of the Bu-
reau of the Census of the Department of Com-
merce’’; and
(2) by inserting after ‘‘foregoing dollar amount
limitations contained in this clause’’ the following:
‘‘(as such limitations may have been previously ad-
justed pursuant to this clause)’’.
(f) SECTION 231 LIMITS.—Section 231(c)(2) of the
National Housing Act (12 U.S.C. 1715v(c)(2)) is
amended—
(1) by inserting before ‘‘; and except that’’ the
following: ‘‘; except that the Secretary shall adjust
nual Construction Cost Index of the Bureau of the
Census of the Department of Commerce’’;
(2) by inserting after ‘‘each of the foregoing
dollar amounts’’ the following: ‘‘(as such amounts
may have been previously adjusted pursuant to this
paragraph)’’; and
(3) by inserting after ‘‘foregoing dollar amount
limitations contained in this paragraph’’ the fol-
lowing: ‘‘(as such limitations may have been pre-
viously adjusted pursuant to this paragraph and in-
creased pursuant to the preceding clause)’’.
SEC. 202. HIGH-COST AREAS.
In the National Housing Act, sections 207(c)(3) (12
U.S.C. 1713(c)(3)), 213(b)(2) (12 U.S.C. 1715e(b)(2)),
220(d)(3)(B)(iii) 
(12 
U.S.C. 
1715k(d)(3)(B)(iii)),
221(d)(3)(ii) (12 U.S.C. 1715l(d)(3)(ii)), 221(d)(4)(ii)
(12 U.S.C. 1715l(d)(4)(ii)), 231(c)(2) (12 U.S.C.
1715v(c)(2)), and 234(e)(3) (12 U.S.C. 1715y(e)(3)) are
each amended—
(1) by striking ‘‘140 percent’’ and inserting
‘‘170 percent’’; and
(2) by striking ‘‘110 percent’’ and inserting
‘‘140 percent’’.
SEC. 203. INSURANCE FOR INTEGRATED SERVICE FACILI-
TIES MORTGAGES.
Section 232 of the National Housing Act (12 U.S.C.
1715w) is amended—
(1) in subsection (a)(2)—
(A) by striking ‘‘nevertheless’’; and
(B) by inserting after paragraph (3) the
following new paragraph:
‘‘(4) The development of integrated service fa-
cilities for the care and treatment of the elderly and
other persons in need of health care and related
services, but who do not require hospital care, and
the support of health care facilities which provide
such health care and related services (including
those that support hospitals (as defined in section
242(b))).’’;
(2) in subsection (b)—
(A) in paragraph (6)—
(i) by striking subparagraph (A) and
inserting the following new subparagraph:
‘‘(A) meets all applicable licensing and reg-
ulatory requirements of the State, or if there is
no State law providing for such licensing and
regulation by the State, meets all applicable li-
censing and regulatory requirements of the mu-
nicipality or other political subdivision in which
the facility is located, or, in the absence of any
such requirements, meets any underwriting re-
quirements of the Secretary for such pur-
poses;’’; and
(ii) in subparagraph (C), by striking
‘‘and’’ at the end;
(B) in paragraph (7), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following new
paragraph:
‘‘(8) the term ‘integrated service facility’ means
a facility that—
‘‘(A) provides integrated health care deliv-
ery services designed and operated to provide
medical, convalescent, skilled and intermediate
nursing, board and care services, assisted living,
rehabilitation, custodial, personal care services,
or any combination thereof, to sick, injured,
disabled, elderly, or infirm persons, or provides
services for the prevention of illness, or any
combination thereof;
‘‘(B) is designed, in whole or in part, to
provide a continuum of care, as determined by
the Secretary, for the sick, injured, disabled, el-
derly, or infirm;
‘‘(C) provides clinical services, outpatient
services, including community health services
and medical practice facilities and group prac-
tice facilities, to sick, injured, disabled, elderly,
or infirm persons not in need of the services
rendered in other facilities insurable under this
title, or for the prevention of illness, or any
combination thereof;
‘‘(D)(i) is designed, in whole or in part to
provide supportive or ancillary services to hos-
pitals (as defined in section 242(b)), which
services may include services provided by spe-
cial use health care facilities, professional office
buildings, laboratories, administrative offices,
and other facilities supportive or ancillary to
health care delivery by such hospitals; and
‘‘(ii) meets standards acceptable to the
Secretary, which may include standards gov-
erning licensure or State or local approval and
regulation of a mortgagor; or
‘‘(E) provides any combination of the serv-
ices under subparagraphs (A) through (D).’’;
(3) in subsection (d)—
(A) in the matter preceding paragraph
(1)—
(i) by inserting ‘‘board and care
home,’’ 
after 
‘‘rehabilitated 
nursing
home,’’;
(ii) by inserting ‘‘integrated service
facility,’’ after ‘‘assisted living facility,’’ the
first two places such term appears;
(iii) by inserting ‘‘board and care
home,’’ after ‘‘existing nursing home,’’;
and
(iv) by striking ‘‘or a board and care
home’’ and inserting ‘‘, board and care
home, or integrated service facility’’;
(B) in paragraph (2)
(i) in the matter preceding subpara-
graph (A), by inserting before the last
comma the following: ‘‘or a public body,
public agency, or public corporation eligible
under this section’’; and
(ii) in subparagraph (B), by striking
‘‘energy conservation measures’’ and all
that follows through ‘‘Public Law 95–
619)’’ and inserting ‘‘energy conserving
improvements 
(as 
defined 
in 
section
2(a))’’; and
(C) in paragraph (4)(C)(iii), by striking
‘‘the appropriate State’’ and inserting ‘‘any ap-
propriate’’; and
(4) in subsection (i)(1), by inserting ‘‘integrated
service facilities,’’ after ‘‘assisted living facilities,’’.
SEC. 204. INSURANCE FOR MORTGAGES FOR INTEGRATED
SERVICE FACILITIES OWNED IN CONNECTION
WITH HOSPITALS.
Section 242 of the National Housing Act (12 U.S.C.
1715z–7) is amended—
(1) in subsection (b)—
(A) in paragraph (1)—
(i) in subparagraph (A), by inserting
‘‘and’’ after the semicolon at the end;
(ii) by striking subparagraph (B); and
(iii) in subparagraph (C)—
(I) by striking ‘‘(C)’’ and insert-
ing ‘‘(B)’’; and
(II) by striking ‘‘and’’ at the
end’’; and
(B) by adding at the end the following new
paragraph:
‘‘(3) the term ‘integrated service facility’ has
the meaning given the term in section 232(b).’’;
(2) in subsection (c), by striking ‘‘title VII’’ and
inserting ‘‘title VI’’;
(3) in subsection (d)—
(A) in the matter preceding paragraph (1),
by inserting after ‘‘operation’’ the following: ‘‘or
that covers an integrated service facility owned
or to be owned by an applicant or proposed
mortgagor that also owns a hospital in the
same market area, including equipment to be
used in its operation,’’;
(B) in paragraph (1)—
(i) in the first sentence, by inserting
before the period the following: ‘‘and who,
in the case of a mortgage covering an inte-
grated service facility, is also the owner of
a hospital facility’’; and
(ii) by adding at the end the fol-
lowing: ‘‘A mortgage insured under this
section covering an integrated service facil-
ity may only cover the real and personal
property where the eligible facility will be
located.’’; and
(C) in paragraph (2)—
(i) in subparagraph (A), by inserting
‘‘or integrated service facility’’ before the
comma; and
(ii) in paragraph (2)(B), by striking
‘‘energy conservation measures’’ and all
that follows through ‘‘Public Law 95–
619)’’ and inserting ‘‘energy conserving
improvements 
(as 
defined 
in 
section
2(a))’’; and
(4) in subsection (f), by inserting ‘‘and public
integrated service facilities’’ after ‘‘public hospitals’’.
SEC. 205. INSURANCE FOR MORTGAGES FOR REFINANCING
DEBT OF EXISTING INTEGRATED SERVICE FA-
CILITIES.
Section 223(f) of the National Housing Act (12
U.S.C. 1715n(f)) is amended—
(1) in paragraph (1), by inserting ‘‘existing in-
tegrated service facility,’’ after ‘‘existing board and
care home,’’; and
(2) in paragraph (4)—
(A) by inserting ‘‘existing integrated serv-
ice facility,’’ after ‘‘board and care home,’’ each
place such term appears;
(B) in subparagraph (B), by inserting
after ‘‘indebtedness’’ the following: ‘‘, pay any
other costs including repairs, maintenance,
minor improvements, or additional equipment
that may be approved by the Secretary,’’; and
(C) in subparagraph (D)—
(i) by inserting ‘‘existing’’ before ‘‘in-
termediate care facility’’; and
(ii) by inserting ‘‘existing’’ before
‘‘board and care home’’.
SEC. 206. STANDARDS AND NEED FOR HEALTH CARE FACIL-
ITY MORTGAGE INSURANCE.
(a) HOSPITALS.—Paragraph (4) of section 242(d) of
the National Housing Act (12 U.S.C. 1715z–7) is amend-
ed to read as follows:
‘‘(4)(A) The Secretary, in conjunction with the
Secretary of Health and Human Services, shall re-
quire satisfactory evidence that the hospital will be
located in a State or political subdivision of a State
with reasonable minimum standards of licensure and
methods of operation for hospitals and satisfactory
assurance that such standards will be applied and
enforced with respect to the hospital.
‘‘(B) The Secretary shall establish the means
for determining need and feasibility for the hospital.
If the State has an official procedure for deter-
mining need for hospitals, the Secretary shall also
require that such procedure be followed before the
application for insurance is submitted, and the appli-
cation shall document that need has also been estab-
lished under that procedure.’’.
(b) NURSING HOMES, INTERMEDIATE CARE FACILI-
TIES, AND COMBINED FACILITIES.—Section 232(d)(4) of
the National Housing Act (12 U.S.C. 1715w(d)(4)) is
amended by striking the paragraph designation and all
that follows through the end of subparagraph (A) and in-
serting the following:
‘‘(4)(A)(i) The Secretary, in conjunction with
the Secretary of Health and Human Services, shall
require satisfactory evidence that a nursing home,
intermediate care facility, or combined nursing home
and intermediate care facility will be located in a
State or political subdivision of a State with reason-
able minimum standards of licensure and methods of
operation for such homes, facilities, or combined
homes and facilities. The Secretary shall also require
satisfactory assurance that such standards will be
applied and enforced with respect to the home, facil-
ity, or combined home or facility.
‘‘(ii) The Secretary shall establish the means
for determining need and feasibility for the home,
facility, or combined home and facility. If the State
has an official procedure for determining need for
such homes, facilities, or combined homes and facili-
ties, the Secretary shall also require that such proce-
dure be followed before the application for insurance
is submitted, and the application shall document
that need has also been established under that pro-
cedure.’’.
Subtitle B—Single Family Housing
SEC. 221. DOWNPAYMENT SIMPLIFICATION.
(a) IN GENERAL.—Section 203(b) of the National
Housing Act (12 U.S.C. 1709(b)) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A), by realigning the
matter that precedes clause (ii) an additional 2
ems from the left margin;
(B) in the matter that follows subpara-
graph (B)(iii)—
(i) by striking the seventh sentence of
such matter (relating to the maximum
amount of a principal obligation of a mort-
gage) and all that follows through the end
of the penultimate undesignated para-
graph; and
(ii) by striking the second and third
sentences of such matter; and
(C) by striking subparagraph (B);
(2) by transferring and inserting subparagraph
(A) of paragraph (10) after subparagraph (A) of
paragraph (2) and amending such subparagraph by
striking all of the matter that precedes clause (i)
and inserting the following:
‘‘(B) not to exceed an amount equal to the
sum of—’’;
(3) by transferring and inserting the last undes-
ignated paragraph of paragraph (2) (relating to dis-
closure notice) after subsection (e), realigning such
transferred paragraph so as to be flush with the left
margin, and amending such transferred paragraph
by inserting ‘‘(f) DISCLOSURE
OF OTHER MORT-
GAGE PRODUCTS.—’’ before ‘‘In conjunction’’;
(4) by transferring and inserting the sentence
that constitutes the text of paragraph (10)(B) after
the period at the end of the first sentence that fol-
lows subparagraph (B) (relating to the definition of
‘‘area’’) and amending such transferred sentence by
inserting ‘‘(2)’’ after ‘‘this paragraph’’; and
(5) by striking paragraph (10) (as amended by
the preceding provisions this section).
(b) CONFORMING AMENDMENTS.—Section 245 of the
National 
Housing 
Act 
(12 
U.S.C. 
1715z–10) 
is
amended—
(1) in subsection (a), by striking ‘‘, or if the
mortgagor’’ and all that follows through ‘‘case of
veterans’’; and
(2) in subsection (b)(3), by striking ‘‘, or, if
the’’ and all that follows through ‘‘for veterans,’’.
SEC. 222. REDUCED DOWNPAYMENT REQUIREMENTS FOR
LOANS FOR TEACHERS AND PUBLIC SAFETY
OFFICERS.
(a) IN GENERAL.—Section 203(b) of the National
Housing Act (12 U.S.C. 1709(b)) is amended by adding
at the end the following new paragraph:
‘‘(11) 
REDUCED
DOWNPAYMENT
REQUIRE-
MENTS FOR TEACHERS AND PUBLIC SAFETY OFFI-
CERS.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (2), in the case of a mortgage described
in subparagraph (B)—
‘‘(i) the mortgage shall involve a prin-
cipal obligation in an amount that does not
exceed the sum of 99 percent of the ap-
praised value of the property and the total
amount of initial service charges, ap-
praisal, inspection, and other fees (as the
Secretary shall approve) paid in connection
with the mortgage;
‘‘(ii) no other provision of this sub-
section limiting the principal obligation of
the mortgage based upon a percentage of
the appraised value of the property subject
to the mortgage shall apply; and
‘‘(iii) the matter in paragraph (9) that
precedes the first proviso shall not apply
and the mortgage shall be executed by a
mortgagor who shall have paid on account
of the property at least 1 percent of the
cost of acquisition (as determined by the
Secretary) in cash or its equivalent.
‘‘(B) MORTGAGES COVERED.—A mortgage
described in this subparagraph is a mortgage—
‘‘(i) under which the mortgagor is an
individual who—
‘‘(I) is (aa) a teacher, or (bb) a
public safety officer; and
‘‘(II) has not, during the 12-
month period ending upon the insur-
ance of the mortgage, had any present
ownership interest in a principal resi-
dence located in the jurisdiction de-
scribed in clause (ii); and
‘‘(ii) made for a property that is lo-
cated within the jurisdiction of—
‘‘(I) in the case of a mortgage of
a mortgagor described in clause
(i)(I)(aa), the local educational agency
for the school in which the mortgagor
is employed (or, in the case of a mort-
gagor employed in a private school,
the local educational agency having
jurisdiction for the area in which the
private school is located); or
‘‘(II) in the case of a mortgage of
a mortgagor described in clause
(i)(I)(bb), the jurisdiction served by
the public law enforcement agency,
firefighting agency, or rescue or am-
bulance agency that employs the
mortgagor.
‘‘(C) 
PROGRAM
INTEGRITY.—Notwith-
standing any other provision of this paragraph
and section 203(c)(3), the Secretary may sus-
pend the applicability of this paragraph and
such section for such period as the Secretary
considers appropriate if the Secretary deter-
mines such suspension is necessary because of
fraud or other issues regarding program integ-
rity.’’.
(b) DEFERRAL AND REDUCTION OF UP-FRONT PRE-
MIUM.—Section 203(c) of the National Housing Act (12
U.S.C. 1709(c)(2)) is amended—
(1) in paragraph (2), in the matter preceding
subparagraph (A), by striking ‘‘Notwithstanding’’
and inserting ‘‘Except as provided in paragraph (3)
and notwithstanding’’; and
(2) by adding at the end the following new
paragraph:
‘‘(3) DEFERRAL AND REDUCTION OF UP-FRONT PRE-
MIUM.—In the case of any mortgage described in sub-
section (b)(11)(B):
‘‘(A) Paragraph (2)(A) of this subsection (relat-
ing to collection of up-front premium payments)
shall not apply.
‘‘(B) If, at any time during the 5-year period
beginning on the date of the insurance of the mort-
gage, the mortgagor ceases to be a teacher or public
safety officer (as such terms are defined in section
201) or pays the principal obligation of the mort-
gage in full, the Secretary shall at such time collect
a single premium payment in an amount equal to
the amount of the single premium payment that, but
for this paragraph, would have been required under
paragraph (2)(A) of this subsection with respect to
the mortgage, as reduced by 20 percent of such
amount for each successive 12-month period com-
pleted during such 5-year period before such ces-
sation or prepayment occurs.’’.
(c) DEFINITIONS.—Section 201 of the National
Housing Act (12 U.S.C. 1707) is amended—
(1) by redesignating subsections (a) through (f)
as paragraphs (1) through (6), respectively;
(2) by realigning each paragraph 2 ems from
the left margin; and
(3) by adding at the end the following new
paragraphs:
‘‘(7) The term ‘public safety officer’ has the
meaning given such term in section 1204 of the Om-
nibus Crime Control and Safe Streets Act of 1968
(42 U.S.C. 3796b), except that such term shall not
include any officer serving a public agency of the
Federal Government.
‘‘(8) The term ‘teacher’ means an individual
who is employed on a part- or full-time basis as a
teacher or administrator in a public or private school
that provides elementary or secondary education, as
determined under State law, except that elementary
education shall include pre-Kindergarten education,
and except that secondary education shall not in-
clude any education beyond grade 12.
‘‘(9) The term ‘local educational agency’ has
the meaning given such term in section 14101 of the
Elementary and Secondary Education Act of 1965
(20 U.S.C. 8801)).’’.
(d) REGULATIONS.—Not later than 60 days after the
date of the enactment of this Act, the Secretary shall issue
regulations to implement the amendments made by this
section.
SEC. 223. COMMUNITY PARTNERS NEXT DOOR PROGRAM.
(a) DISCOUNT AND DOWNPAYMENT ASSISTANCE FOR
TEACHERS
AND PUBLIC SAFETY OFFICERS.—Section
204(h) of the National Housing Act (12 U.S.C. 1710(h))
is amended—
(1) by redesignating paragraphs (7) through
(10) as paragraphs (8) through (11), respectively;
and
(2) by inserting after paragraph (6) the fol-
lowing new paragraph:
‘‘(7) 50 PERCENT
DISCOUNT
FOR
TEACHERS
AND PUBLIC SAFETY OFFICERS PURCHASING PROP-
ERTIES THAT ARE ELIGIBLE ASSETS.—
‘‘(A) DISCOUNT.—A property that is an el-
igible asset and is sold, during fiscal years 2002
through 2006, to a teacher or public safety offi-
cer for use in accordance with subparagraph
(B) shall be sold at a price that is equal to 50
percent of the appraised value of the eligible
property (as determined in accordance with
paragraph (6)(B)). In the case of a property el-
igible for both a discount under this paragraph
and a discount under paragraph (6), the dis-
count under paragraph (6) shall not apply.
‘‘(B) PRIMARY
RESIDENCE.—An eligible
property sold pursuant to a discount under this
paragraph shall be used, for not less than the
3-year period beginning upon such sale, as the
primary residence of a teacher or public safety
officer.
‘‘(C) SALE METHODS.—The Secretary may
sell an eligible property pursuant to a discount
under this paragraph—
‘‘(i) to a unit of general local govern-
ment or nonprofit organization (pursuant
to paragraph (4) or otherwise), for resale
or transfer to a teacher or public safety of-
ficer; or
‘‘(ii) directly to a purchaser who is a
teacher or public safety officer.
‘‘(D) RESALE.—In the case of any pur-
chase by a unit of general local government or
nonprofit organization of an eligible property
sold at a discounted price under this paragraph,
the sale agreement under paragraph (8) shall—
‘‘(i) require the purchasing unit of
general local government or nonprofit or-
ganization to provide the full benefit of the
discount to the teacher or public safety of-
ficer obtaining the property; and
‘‘(ii) in the case of a purchase involv-
ing multiple eligible assets, any of which is
such an eligible property, designate the
specific eligible property or properties to be
subject to the requirements of subpara-
graph (B).
‘‘(E) MORTGAGE
DOWNPAYMENT
ASSIST-
ANCE.—If a teacher or public safety officer pur-
chases an eligible property pursuant to a dis-
counted sale price under this paragraph and fi-
nances such purchase through a mortgage in-
sured under this title, notwithstanding any pro-
vision of section 203 the downpayment on such
mortgage shall be $100.
‘‘(F) PREVENTION OF UNDUE PROFIT.—
The Secretary shall issue regulations to prevent
undue profit from the resale of eligible prop-
erties in violation of the requirement under sub-
paragraph (B).
‘‘(G) DEFINITIONS.—For the purposes of
this paragraph, the following definitions shall
apply:
‘‘(i) The term ‘eligible property’
means an eligible asset described in para-
graph (2)(A) of this subsection.
‘‘(ii) The terms ‘teacher’ and ‘public
safety officer’ have the meanings given
such terms in section 201.
‘‘(H) 
PROGRAM
INTEGRITY.—Notwith-
standing any other provision of this paragraph,
the Secretary may suspend the applicability of
this paragraph for such period as the Secretary
considers appropriate if the Secretary deter-
mines such suspension is necessary because of
fraud or other issues regarding program integ-
rity.’’.
(b) CONFORMING AMENDMENTS.—Section 204(h) of
the National Housing Act (12 U.S.C. 1710(h)) is
amended—
(1) in paragraph (4)(B)(ii), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraph (8)’’;
(2) in paragraph (5)(B)(i), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraph (8)’’; and
(3) in paragraph (6)(A), by striking ‘‘paragraph
(8)’’ and inserting ‘‘paragraph (9)’’.
(c) REGULATIONS.—Not later than 60 days after the
date of the enactment of this Act, the Secretary shall issue
regulations to implement the amendments made by this
section.
SEC. 224. PUBLIC SAFETY OFFICER HOME OWNERSHIP IN
HIGH-CRIME AREAS.
(a) PROGRAM AUTHORITY.—The Secretary of Hous-
ing and Urban Development shall carry out a pilot pro-
gram in accordance with this section to assist Federal,
State, and local public safety officers purchasing homes
in locally-designated high-crime areas.
(b) ELIGIBILITY.—To be eligible for assistance under
this section, a public safety officer shall agree, in writing,
to use the residence purchased with such assistance as the
primary residence of the public safety officer for not less
than 3 years after the date of purchase.
(c) MORTGAGE ASSISTANCE.—If a public safety offi-
cer purchases a home in locally-designated high-crime area
and finances such purchase through a mortgage insured
under title II of the National Housing Act (12 U.S.C.
1707 et seq.), notwithstanding any provision of section
203 or any other provision of the National Housing Act,
the following shall apply:
(1) DOWNPAYMENT.—
(A) IN
GENERAL.—There shall be no
downpayment required if the purchase price of
the property is not more than the reasonable
value of the property, as determined by the Sec-
retary.
(B) PURCHASE PRICE EXCEEDS VALUE.—
If the purchase price of the property exceeds
the reasonable value of the property, as deter-
mined by the Secretary, the required downpay-
ment shall be the difference between such rea-
sonable value and the purchase price.
(2) CLOSING
COSTS.—The closing costs and
origination fee for such mortgage may be included in
the loan amount.
(3) INSURANCE
PREMIUM
PAYMENT.—There
shall be one insurance premium payment due on the
mortgage. Such insurance premium payment—
(A) shall be equal to 1 percent of the loan
amount;
(B) shall be due and considered earned by
the Secretary at the time of the loan closing;
and
(C) may be included in the loan amount
and paid from the loan proceeds.
(d) LOCAL DESIGNATION OF HIGH-CRIME AREAS.—
(1) CRITERIA.—Any unit of local government
may request that the Secretary designate any area
within the jurisdiction of that unit of local govern-
ment as a locally-designated high-crime area for pur-
poses of this section if the proposed area—
(A) has a crime rate that is significantly
higher than the crime rate of the non-des-
ignated area that is within the jurisdiction of
the unit of local government; and
(B) has a population that is not more than
25 percent of the total population of area with-
in the jurisdiction of the unit of local govern-
ment.
(2) DEADLINE
FOR
CONSIDERATION
OF
RE-
QUEST.—Not later than 60 days after receiving a re-
quest under paragraph (1), the Secretary shall ap-
prove or disapprove the request.
(e) PUBLIC SAFETY OFFICER.—For purposes of this
section, the term ‘‘public safety officer’’ has the meaning
given such term in section 201 of the National Housing
Act (12 U.S.C. 1707) (as amended by section 222(c) of
this Act), except that such term includes any officer serv-
ing a public agency of the Federal Government.
(f) PROGRAM
INTEGRITY.—Notwithstanding any
other provision of this section, the Secretary may suspend
the applicability of this section for such period as the Sec-
retary considers appropriate if the Secretary determines
such suspension is necessary because of fraud or other
issues regarding program integrity.
(g) REGULATIONS.—Not later than 60 days after the
date of the enactment of this Act, the Secretary shall issue
regulations to implement the provisions of this section.
(h) SUNSET.—The Secretary shall not approve any
application for assistance under this section that is re-
ceived by the Secretary after the expiration of the 3-year
period beginning on the date that the Secretary first
makes available assistance under the pilot program under
this section.
SEC. 225. SERVICING OF HUD-OWNED MORTGAGES.
(a) HUD REQUIREMENT.—Section 204 of the Na-
tional Housing Act (12 U.S.C. 1710) is amended—
(1) in subsection (a), by redesignating para-
graphs (5) through (9) as paragraphs (4) through
(8), respectively; and
(2) by inserting after subsection (j) the fol-
lowing new subsection:
‘‘(k) SERVICING FUNCTIONS.—
‘‘(1) MERGER
WITH
RURAL
HOUSING
LOAN
PROGRAM SERVICING.—To provide for the servicing
of HUD-held single family mortgages with the same
level of performance, effectiveness, and efficiency
with which servicing is conducted for single family
loans made under section 502 of the Housing Act of
1949 (42 U.S.C. 1472), the Secretary of Housing
and Urban Development, in consultation and coordi-
nation with the Secretary of Agriculture, shall take
such action as may be necessary to combine and co-
ordinate the functions and personnel for servicing
HUD-held single family mortgages with the func-
tions and personnel for servicing loans made under
such section 502.
‘‘(2) HUD-HELD SINGLE FAMILY MORTGAGE.—
For purposes of this subsection, the term ‘HUD-held
single family mortgage’ means a mortgage that—
‘‘(A) is made with respect to housing de-
signed for occupancy by one to four families;
and
‘‘(B) is held by the Secretary of Housing
and Urban Development pursuant to payment
of insurance benefits under the National Hous-
ing Act.’’.
(b) DEPARTMENT
OF
AGRICULTURE
REQUIRE-
MENT.—Section 501 of the Housing Act of 1949 (42
U.S.C. 1471) is amended by adding at the end the fol-
lowing new subsection:
‘‘(k) SERVICING FUNCTIONS.—
‘‘(1) MERGER
WITH
RURAL
HOUSING
LOAN
PROGRAM SERVICING.—To provide for the servicing
of HUD-held single family mortgages (as such term
is defined in section 204(k)2) of the National Hous-
ing Act (12 U.S.C. 1710(k)(2)) with the same level
of performance, effectiveness, and efficiency with
which servicing is conducted for single family loans
made under section 502 of this Act, the Secretary
of Agriculture shall consult and coordinate with the
Secretary of Housing and Urban Development, and
shall take such other action, as may be necessary to
combine and coordinate the functions and personnel
for servicing HUD-held single family mortgages with
the functions and personnel for servicing loans made
under section 502.’’.
SEC. 226. RISK-BASED CAPITAL LEVELS FOR MUTUAL
MORTGAGE INSURANCE FUND.
(a) IN GENERAL.—Subsection (f) of section 205 of
the National Housing Act (12 U.S.C. 1711(f)) is amended
to read as follows:
‘‘(f) MINIMUM ADEQUATE CAPITAL LEVEL
FOR
MMIF.—
‘‘(1) IN GENERAL.—The Secretary shall ensure
that, at all times, the Mutual Mortgage Insurance
Fund maintains capital in an amount equal to or
greater than the minimum adequate capital level,
which shall be the amount equal to the sum of the
minimum basic capital ratio under paragraph (2)
and the minimum risk-based capital ratio under
paragraph (3).
‘‘(2) MINIMUM
BASIC
CAPITAL
RATIO.—The
minimum basic capital ratio under this paragraph is
the amount that is equal to one percent of the
unamortized insurance-in-force.
‘‘(3) MINIMUM RISK-BASED CAPITAL RATIO.—
‘‘(A) IN
GENERAL.—The minimum risk-
based capital ratio under this paragraph is the
amount, established pursuant to subparagraph
(B), that would permit the Mutual Mortgage
Insurance Fund to withstand mortgage defaults
and prepayments associated with a broad range
of adverse economic circumstances, which shall
include—
‘‘(i) circumstances derived from his-
torical regional and national experience in
which mortgages insured under this Act
experienced high rates of default and pre-
payment;
‘‘(ii) events that may plausibly occur
in the future, notwithstanding that such
events may not have occurred in the past,
and which could result in high rates of
mortgage defaults or prepayments, or both;
‘‘(iii) circumstances under which mul-
tiple such events occur simultaneously or
in rapid succession.
‘‘(B) 
CONSULTATION.—The 
Secretary,
jointly with the Director of the Office of Man-
agement and Budget, and in consultation with
the Director of the Congressional Budget Office
and the Comptroller General of the United
States, shall by regulation establish a formula
for determining the minimum risk-based capital
ratio.
‘‘(C) REVIEW
AND
MODIFICATION.—Not
less than once every 3 years, the Secretary shall
review and modify the set of adverse economic
circumstances used to establish the minimum
risk-based capital ratio.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) CAPITAL.—The term ‘capital’ means
the economic net worth of the Mutual Mortgage
Insurance Fund, as determined by the Sec-
retary under the annual audit required under
section 538.
‘‘(B) ECONOMIC NET WORTH.—The term
‘economic net worth’ means the current cash
available to the Mutual Mortgage Insurance
Fund, plus the net present value of all future
cash inflows and outflows expected to result
from the outstanding mortgages in such Fund.
‘‘(C) 
UNAMORTIZED
INSURANCE-IN-
FORCE.—The term ‘unamortized insurance-in-
force’ means the original insured amount of
outstanding mortgages which are insured under
the Mutual Mortgage Insurance Fund.’’.
(b) APPLICABILITY.—The amendment made by this
section is made on the date of the enactment of this Act,
but shall apply beginning on October 1, 2004. The provi-
sions of section 205(f) of the National Housing Act, as
in effect immediately before the date of the enactment of
this Act, shall continue to apply during the period begin-
ning on such date of enactment and ending at the end
of September 30, 2003.
(c) REGULATIONS.—Not later than 120 days after
the date of the enactment of this Act, the Secretary of
Housing and Urban Development, the Director of the
Congressional Budget Office, and the Director of the Of-
fice of Management and Budget shall issue the regulations
required under section 205(f)(3) of the National Housing
Act (as amended by this section) establishing the formula
for determining the minimum risk-based capital ratio.
SEC. 227. HYBRID ADJUSTABLE RATE MORTGAGES.
Section 251(d)(1)(C) of the National Housing Act
(12 U.S.C. 1715z–16(d)(1)(C)) is amended by striking
‘‘five or fewer years’’ and inserting ‘‘three or fewer years’’.
SEC. 228. UNIFORM NATIONAL LOAN LIMIT FOR HOME EQ-
UITY CONVERSION MORTGAGES.
Section 255(g) of the National Housing Act (12
U.S.C. 1715z–20(g)) is amended by striking ‘‘1-family
residences in the area in which the dwelling subject to the
mortgage under this section is located’’ and inserting ‘‘a
1-family residence’’.
SEC. 229. PROHIBITION OF INVESTOR AND NONPROFIT
OWNERS 
UNDER 
REHABILITATION 
LOAN
PROGRAM.
Section 203(g)(2) of the National Housing Act (12
U.S.C. 1709(g)(2)) is amended—
(1) by striking subparagraph (E);
(2) in subparagraph (D), by inserting ‘‘or’’
after the semicolon; and
(3) by redesignating subparagraph (F) as sub-
paragraph (E).
SEC. 230. REHABILITATION LOAN ADVANCES.
Section 203(k)(3) of the National Housing Act (12
U.S.C. 1709(k)(3)) is amended—
(1) by redesignating subparagraphs (C) and
(D) as subparagraphs (D) and (E), respectively; and
(2) by inserting after subparagraph (B) the fol-
lowing new paragraph:
‘‘(C) involve a loan agreement containing such
terms and conditions as the Secretary shall provide,
including terms and conditions that provide that the
mortgagee shall be responsible for choosing an in-
spector or consultant who shall be an agent of the
mortgagee and shall be responsible for approving ad-
vances under the loan;’’.
SEC. 231. NONPROFIT PURCHASERS UNDER PROPERTY DIS-
POSITION.
(a) IN GENERAL.—Section 204(g) of the National
Housing Act (12 U.S.C. 1710(g)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and
(2) by adding at the end the following new paragraph:
‘‘(2) The Secretary shall require, as a condition of
eligibility of any nonprofit organization for participation
in any program of the Secretary for disposition of 1- to
4-family properties acquired by the Secretary pursuant to
this Act, the Secretary shall require that such
organization—
‘‘(A) has nonprofit status as demonstrated by
approval under section 501(c)(3) of the Internal
Revenue Code of 1986 (26 U.S.C. 501(c)(3)) or
demonstrates that an application for such status is
currently pending approval; and
‘‘(B) provide the Secretary with a copy of the
application for such status;
‘‘(C) certify, on an annual basis, that the orga-
nization has been apprised of the applicable rules
and guidelines of the Department of Housing and
Urban Development and understands such rules and
guidelines; and
‘‘(D) comply with such other requirements as
the Secretary may establish.’’.
(b) ASSETS
IN REVITALIZATION AREAS.—Section
204(h)(8)(D) (12 U.S.C. 1710(h)(8)(D)) is amended—
(1) by striking clause (ii) and inserting the fol-
lowing new clause:
‘‘(ii)(I) has nonprofit status as dem-
onstrated 
by 
approval 
under 
section
501(c)(3) of the Internal Revenue Code of
1986 (26 U.S.C. 501(c)(3)) or dem-
onstrates that an application for such sta-
tus is currently pending approval; and
‘‘(II) provides the Secretary with a
copy of the application for such status;’’;
(2) in clause (iii), by striking the period at the
end and inserting ‘‘; and’’; and
(3) by adding at the end the following new
clause:
‘‘(iv) certifies, on an annual basis,
that the organization has been apprised of
the applicable rules and guidelines of the
Department of Housing and Urban Devel-
opment and understands such rules and
guidelines.’’.
SEC. 232. EXTENSION OF HOLDING PERIOD.
(a) IN GENERAL.—Section 912(1) of the Housing
and Urban Development Act of 1970 (12 U.S.C. 1709–
2(1)) is amended by striking ‘‘one year’’ and inserting ‘‘18
months’’.
(b) APPLICABILITY.—The amendment made by sub-
section (a) shall apply only to defaults described in section
912(1) of the Housing and Urban Development Act of
1970 that occur after the date of the enactment of this
Act.
SEC. 233. FRAUD IN LOAN AND CREDIT APPLICATIONS.
Section 1014 of title 18, United States Code, is
amended by inserting ‘‘the Department of Housing and
Urban Development,’’ after ‘‘the Rural Development Ad-
ministration or successor agency, ’’.
TITLE III—SUPPORTIVE HOUS-
ING FOR ELDERLY AND DIS-
ABLED FAMILIES
SEC. 301. MODERNIZATION DEMONSTRATION FOR SECTION
236 ELDERLY PROJECTS.
(a) IN GENERAL.—The Secretary of Housing and
Urban Development (in this section referred to as the
‘‘Secretary’’) shall carry out a program to demonstrate the
effectiveness of providing financial assistance for projects
for the elderly that are assisted under section 236 of the
National Housing Act for meeting the modernization
needs of such projects.
(b) 
ELIGIBLE
PROJECTS.—Assistance 
provided
under the demonstration program under this section may
be provided only for a project that—
(1)(A) is assisted, insured, or held by the Sec-
retary or a State or State agency under section 236
of the National Housing Act (12 U.S.C. 1715z–1);
or
(B) is held by the Secretary and formerly in-
sured under the program referred to in paragraph
(1); and
(2) is reserved primarily for occupancy by elder-
ly or handicapped families.
(c) USE OF ASSISTANCE.—Assistance provided under
the demonstration program under this section may be
used only for repair, rehabilitation, and modernization
needs of eligible projects under subsection (b), including—
(1) improvements necessary to comply with
health and safety codes;
(2) improvements necessary to comply with the
Fair Housing Act (42 U.S.C. 3601 et seq.); and
(3) such other activities as the Secretary con-
siders appropriate.
(d) APPLICATIONS AND SELECTION CRITERIA.—The
Secretary shall provide for owners of eligible projects
under subsection (b) to submit applications for assistance
under the demonstration program under this section. The
Secretary shall select applications for such assistance
based upon need for such assistance, as determined ac-
cording to selection criteria, which the Secretary shall es-
tablish.
(e) FUNDING.—Any amounts made available for a
fiscal year for grants under section 202b of the Housing
Act of 1959 (12 U.S.C. 1701q–2) that remain unobligated
as of September 30, 2002, shall be available for assistance
under the demonstration program under this section.
(f) TERMINATION.—No assistance may be provided
under this section after September 30, 2005.
SEC. 302. SERVICE COORDINATORS FOR SUPPORTIVE
HOUSING FOR PERSONS WITH DISABILITIES.
Section 683(2) of the Housing and Community De-
velopment Act of 1992 (42 U.S.C. 13641(2)) is
amended—
(1) in subparagraph (F), by striking ‘‘and’’ at
the end;
(2) in subparagraph (G), by striking the period
at the end and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(H) ‘‘housing that is assisted under sec-
tion 811 of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 8013).’’.
SEC. 303. ELIGIBILITY OF RELIGIOUS ORGANIZATIONS AS
PROJECT OWNERS.
(a) SUPPORTIVE HOUSING FOR THE ELDERLY.—Sec-
tion 202 of the Housing Act of 1959 (12 U.S.C. 1701q)
is amended—
(1) in subsection (f), by inserting after and
below paragraph (7) the following:
‘‘The selection criteria used by the Secretary shall specifi-
cally provide that religious organizations and organiza-
tions having religious purposes that qualify under sub-
section (k)(4) as private nonprofit organizations, may own
projects assisted under this section.’’;
(2) in subsection (j), by adding at the end the
following new paragraph:
‘‘(9) ELIGIBILITY
OF
RELIGIOUS
ORGANIZA-
TIONS AS PROJECT OWNERS.—The Secretary may
not prohibit religious organizations or organizations
having religious purposes that, under subsection
(k)(4) qualify as private nonprofit organizations,
from owning projects assisted under this section be-
cause of their status as such religious organiza-
tions.’’; and
(3) in subsection (k)(4), by inserting after the
period at the end the following: ‘‘Such term also in-
cludes a religious organization or an organization
having religious purposes, that meets the require-
ments of this paragraph, not including subparagraph
(B)(i).’’.
(b) SUPPORTIVE HOUSING FOR PERSONS WITH DIS-
ABILITIES.—Section 811 of the Cranston-Gonzalez Na-
tional Affordable Housing Act (42 U.S.C. 8013) is
amended—
(1) in subsection (f), by inserting after and
below paragraph (7) the following:
‘‘The selection criteria used by the Secretary shall specifi-
cally provide that religious organizations and organiza-
tions having religious purposes, that qualify under sub-
section (k)(6) as private nonprofit organizations may own
projects assisted under this section.’’;
(2) in subsection (j), by adding at the end the
following new paragraph:
‘‘(8) ELIGIBILITY
OF
RELIGIOUS
ORGANIZA-
TIONS AS PROJECT OWNERS.—The Secretary may
not prohibit religious organizations or organizations
having religious purposes that, under subsection
(k)(6) qualify as private nonprofit organizations,
from owning projects assisted under this section be-
cause of their status as such religious organiza-
tions.’’; and
(3) in subsection (k)(6), by inserting after and
below subparagraph (D) the following:
‘‘Such term includes a religious organization or an
organization having religious purposes, that meets
the requirements of this paragraph, not including
subparagraph (C).’’.
TITLE IV—SECTION 8 RENTAL
HOUSING ASSISTANCE PRO-
GRAM
SEC. 401. THRIFTY PRODUCTION VOUCHERS.
Section 8(o) of the United States Housing Act of
1937 (42 U.S.C. 1437f(o)) is amended by adding at the
end the following new paragraph:
‘‘(19) THRIFTY PRODUCTION VOUCHERS.—
‘‘(A) IN
GENERAL.—For the purpose of
encouraging the production of housing afford-
able to extremely low-income families, a public
housing agency may use amounts provided
under an annual contributions contract under
this subsection to enter into a housing assist-
ance payment contract for thrifty production
voucher assistance that is attached to a struc-
ture and complies with the requirements under
this paragraph.
‘‘(B) 
PROJECT-BASED
ASSISTANCE.—A
housing assistance payment contract under this
paragraph shall be subject to the same limita-
tions and requirements that such a contract
under paragraph (13) is subject to under sub-
paragraphs (A) through (K) of such paragraph,
except for subparagraphs (H) and (I) of such
paragraph and except as otherwise specified in
this paragraph.
‘‘(C) USE
FOR
NEW
PRODUCTION
AND
SUBSTANTIAL REHABILITATION ONLY.—Assist-
ance under this paragraph may only be at-
tached to a structure that is newly constructed
or a unit that is substantially rehabilitated.
‘‘(D) LOCATION.—Subject to other re-
quirements under applicable laws, a public
housing agency may attach assistance under
this paragraph to—
‘‘(i) a structure located outside of a
qualified census tract (as such term is de-
fined in section 42(d) of the Internal Rev-
enue Code of 1986 (26 U.S.C. 42(d))); or
‘‘(ii) a structure located in a qualified
census tract (as such term is defined in
such section 42(d)), but only if the agency
determines that the contract is consistent
with the goal of deconcentrating poverty
and expanding housing and economic op-
portunities or revitalizing a low-income
community, or will prevent the displace-
ment of extremely low-income families.
‘‘(E) CIVIL
RIGHTS
AND
FAIR
HOUSING
REQUIREMENTS.—Regardless of location, if the
dwelling units proposed to be provided assist-
ance under this paragraph are assisted with a
grant or loan under a Federal program pursu-
ant to which the Secretary (or a designee of the
Secretary) has determined, in accordance with
the regulations of the Secretary, that the site
location meets applicable civil rights and fair
housing requirements, the Secretary shall con-
sider the attachment of assistance under this
paragraph to the structure to comply with all
applicable civil rights and fair housing require-
ments.
‘‘(F) INCOME MIXING.—Subparagraph (D)
of paragraph (13) shall apply to a property lo-
cated outside of a qualified census tract (as
such term is defined in section 42(d) of the In-
ternal Revenue Code of 1986. If a property is
located in a qualified census tract (as such term
is defined in such section 42(d)), no more than
25 percent of the dwelling units in the property
may be assisted under this paragraph unless all
the dwelling units so assisted are specifically
made available only for households comprised of
elderly families or disabled families or are in
single family properties.
‘‘(G) 
CONTRACT
TERM
AND
EXTEN-
SIONS.—A housing assistance payment contract
pursuant to this paragraph between a public
housing agency and the owner of a structure
may have an initial term of up to 15 years, and
shall require the owner and any successors in
interest of the owner to accept any offered ex-
tension for up to a total of 40 years, subject to
the same conditions specified in subparagraphs
(F) and (G) of paragraph (13) with respect to
contracts under such paragraph.
‘‘(H) RENT CALCULATION.—
‘‘(i) IN GENERAL.—In the case of a
housing assistance payment contract pur-
suant to this paragraph for a property in
which not more than 25 percent of the
dwelling units are assisted under this sec-
tion, the contract shall establish the gross
rent for each dwelling unit assisted in an
amount equal to the sum of (I) the per
unit operating cost for the property, and
(II) any applicable utility allowances of the
public housing agency for tenant-paid utili-
ties.
‘‘(ii) PER UNIT OPERATING COST.—
For purposes of this subparagraph, the op-
erating cost for a dwelling unit shall be the
unit’s allocable share of the ordinary and
customary expenses incurred to operate the
property, include applicable owner-paid
utilities, contributions to replacement re-
serve, asset management fee, and a modest
cash flow allowance equal to 15 percent of
all other allocable operating costs. A public
housing agency shall require an owner to
demonstrate that the unit operating cost
for units assisted under this paragraph
does not exceed the operating cost of other
units in the property of similar size that
are not assisted under paragraph (13) and
shall establish policies to ensure that ex-
penses included in unit operating cost that
are paid to the owner or a related entity
are reasonable and consistent with pre-
vailing costs in the community. The agency
shall be responsible for determining wheth-
er an owner has sufficiently demonstrated
such unit operating cost.
‘‘(iii) ANNUAL
ADJUSTMENT.—The
public housing agency shall annually make
an appropriate adjustment in contract
rents, based on documented changes in
unit operating costs.
‘‘(iv) LIMITATIONS.—A public housing
agency shall not approve a rent for a
dwelling unit assisted under this paragraph
that exceeds 75 percent of the agency’s
payment standard for a dwelling unit of
the same size or the applicable fair market
rental, whichever is higher. The Secretary
may approve a higher cap if the permitted
maximum rent could not otherwise support
the reasonable operating cost of rental
housing.
‘‘(v) OTHER PROPERTIES.—For prop-
erties in which 25 percent or more of the
dwelling units are assisted under this para-
graph, the rent shall be determined based
on a formula to be established by the Sec-
retary.
‘‘(I) TENANT SELECTION.—The provisions
of subparagraph (J) of paragraph (13) applica-
ble to housing assisted under such paragraph
shall apply to a property assisted under this
paragraph, except as follows:
‘‘(i) EXTREMELY LOW-INCOME OCCU-
PANCY.—Tenants must qualify as ex-
tremely low-income families at the time of
commencement of occupancy of dwelling
units assisted under this paragraph.
‘‘(ii) 
SEPARATE
PHA
WAITING
LISTS.—A public housing agency may
maintain a separate waiting list for assist-
ance under this paragraph (or for each
property assisted under this paragraph, if
the agency provides such assistance to
more than one property) subject to the fol-
lowing:
‘‘(I) An agency that provides no-
tice of the opening of the waiting list
in the same manner required by the
Secretary for the provision of notice of
the opening of the waiting list for ten-
ant-based assistance under this sub-
section need not provide individual no-
tice to families on the agency’s ten-
ant-based waiting list of the oppor-
tunity to be placed on the waiting list
for a dwelling unit assisted under this
paragraph. Among families applying
at the equivalent time and date with
otherwise equivalent preference under
the public housing agency plan for the
agency approved under section 5A,
the agency shall give preference for
occupancy in dwelling units assisted
under this paragraph to families on
its tenant-based waiting list.
‘‘(II) Each agency shall notify ex-
tremely low-income families requesting
to apply for tenant-based assistance of
the opportunity to be listed on any
separate waiting lists for dwelling
units assisted under this paragraph.
‘‘(iii) OWNER WAITING LISTS.—
‘‘(I) A public housing agency
may, at the option of the agency,
allow an owner of a property assisted
under a contract under this paragraph
to maintain the waiting list for such
assisted units. The owner’s waiting
list shall be considered to be a waiting
list maintained by the agency under
this subsection for purposes of re-
quirements applicable to the agency’s
waiting list.
‘‘(II) Any family denied a dwell-
ing unit by an owner that maintains
the waiting list for units assisted
under this paragraph shall have the
same rights to informal review by the
agency as a family denied tenant-
based assistance by the agency. The
agency shall perform such review ex-
peditiously so as not to impede the
timely rental of units. The owner’s
waiting list policy and any applicable
preferences or selection criteria shall
be included in the public housing
agency plan for the agency approved
under section 5A.
‘‘(III) Each agency shall notify
extremely low-income families request-
ing to apply for tenant-based assist-
ance of the opportunity to be listed on
the owner’s waiting list, shall establish
a mechanism to transmit applications
submitted at its office to the owner
for placement on the waiting list, and
shall monitor at reasonable intervals
the compliance by the owner with laws
applicable to tenant selection and
waiting lists, including civil rights
laws and certifications required under
such laws.
‘‘(IV) The agency’s contract with
the owner shall require the owner
to—
‘‘(aa) provide notice of the
opening of the waiting list and
provide preference to families on
the agency’s tenant-based waiting
list in the same manner required
of the agency if the agency main-
tained the waiting list (unless the
agency agrees to provide such no-
tice for the owner);
‘‘(bb) place on its waiting
list families that apply at an of-
fice of the agency that accepts
applications for tenant-based as-
sistance;
‘‘(cc) cooperate with the
agency’s requests for information
concerning the waiting list and
the owner’s tenant selection deci-
sions; and
‘‘(dd) submit to the agency
for approval written tenant selec-
tion policies and criteria and
make the policies and criteria
available to the public.
‘‘(J) USE OF ASSISTANCE IN CONJUNCTION
WITH PUBLIC HOUSING CAPITAL FUNDS.—Not-
withstanding any other provision of this Act, a
public housing agency may attach assistance
under this paragraph to a unit that receives
amounts allocated to the agency under the Cap-
ital Fund established by section 9(d) or under
section 24. Any such unit receiving assistance
under this paragraph shall not be eligible for
assistance under the Operating Fund estab-
lished by section 9(e).
‘‘(K) RENEWAL
OF
ASSISTANCE.—The
Secretary shall increase the adjusted allocation
baseline for renewal of funding under sub-
section (d) for public housing agencies that at-
tach assistance to a structure under this para-
graph. The increase shall equal the number of
additional families that an agency can assist as
a result of the reduced payments permitted
under this paragraph.
‘‘(L) ALLOCATION
OF
INCREMENTAL
AS-
SISTANCE
FOR
USE
UNDER
THIS
SUBPARA-
GRAPH.—
‘‘(i) USE
OF
HOME
INVESTMENT
PARTNERSHIPS
PROGRAM
FORMULA.—In-
cremental assistance appropriated for use
under this paragraph shall be allocated in
accordance with the formula established by
the Secretary under section 217(b) of the
Cranston-Gonzalez 
National 
Affordable
Housing Act (42 U.S.C. 12747), and shall
not be subject to allocation under section
213(d) of the Housing and Community
Development Act of 1974 (42 U.S.C.
1439).
‘‘(ii) QUALIFIED
PUBLIC
HOUSING
AGENCIES.—Subject to the allocation as
provided in clause (i) and any additional
criteria that the Secretary may establish,
the Secretary shall award such incremental
assistance only to public housing agencies
that administer a program of tenant-based
assistance under this subsection and that
administer funds for the construction or
substantial rehabilitation of rental housing
other than public housing. A public hous-
ing agency may qualify to receive incre-
mental assistance for use under this para-
graph if the agency has an agreement with
an agency that administers funds for the
construction or substantial rehabilitation of
rental housing that will enable a prospec-
tive developer of such housing to submit a
single application for both types of funds.
‘‘(iii) TREATMENT
OF
PERCENTAGE
LIMITATION.—Incremental assistance re-
stricted for use under this paragraph shall
not be considered in determining an agen-
cy’s compliance with the limitation in sub-
paragraph (B) of paragraph (13).
‘‘(iv) INSUFFICIENT FUNDS FOR FOR-
MULA ALLOCATION.—If the Secretary de-
termines that the amounts appropriated
for incremental assistance for use under
this paragraph are not sufficient to allo-
cate to each State or to each eligible juris-
diction in accordance with the formula re-
ferred to in clause (i), the Secretary may
award such funds to qualified public hous-
ing agencies through a national competi-
tion.
‘‘(M) DEFINITIONS.—For purposes of this
paragraph, the following definitions shall apply:
‘‘(i) EXTREMELY LOW-INCOME FAMI-
LIES.—The term ‘extremely low-income
families’ means families (as such term is
defined in section 3(b)) whose incomes do
not exceed the higher of—
‘‘(I) 30 percent of the area me-
dian income, as determined by the
Secretary with adjustments for small-
er and larger families and for unusu-
ally high or low family incomes; or
‘‘(II) 30 percent of the national
non-metropolitan median income.
‘‘(ii) 
SUBSTANTIAL
REHABILITA-
TION.—The term ‘substantial rehabilita-
tion’ means rehabilitation expenditures
paid or incurred with respect to a dwelling
unit, including its prorated share of work
on common areas or systems, of $25,000
or more. The Secretary shall increase the
dollar amount under this clause annually
to reflect inflation, and shall cause notice
of any such increase to be published in the
Federal Register.’’.
SEC. 402. MONTHLY RENTAL AMOUNT.
Section 8(o)(3) of the United States Housing Act of
1937 (42 U.S.C. 1437f(o)(3)) is amended by striking
‘‘monthly adjusted income of the family’’ and inserting
‘‘gross income of the family without reduction for exclu-
sion or deductions’’.
SEC. 403. FLEXIBILITY TO ASSIST HARD-TO-HOUSE FAMI-
LIES.
Section 8(o) of the United States Housing Act of
1937 (42 U.S.C. 1437f(o)) is amended by adding at the
end the following new paragraph:
‘‘(19) FLEXIBILITY TO ASSIST HARD-TO-HOUSE
FAMILIES.—In any program year, a public housing
agency that is not designated as troubled pursuant
to the section 8 management assessment program,
or under such other program as may be used by the
Secretary to evaluate performance of public housing
agencies in administering rental assistance under
this section, may use up to 5 percent of any
amounts allocated to the agency for such year for
purposes that directly support the agency’s housing
choice voucher program, including housing coun-
seling, downpayment assistance under subsection
(y), rental security deposits for families receiving
voucher assistance, and other activities that assist
eligible families in gaining and maintaining occu-
pancy in suitable dwelling units.’’.
SEC. 404. PROHIBITION ON RE-SCREENING OF TENANTS.
Section 8(t)(1) of the United States Housing Act of
1937 (42 U.S.C. 1437f(t)(1)) is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at
the end;
(2) in subparagraph (D), by striking the period
at the end and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(E) a family may not be required, as a
condition of receiving such assistance, to re-
qualify under the selection standards of a public
housing agency.’’.
SEC. 405. PHA ADMINISTRATIVE FEES.
Section 8(q) of the United States Housing Act of
1937 (42 U.S.C. 1437f(q)) is amended—
(1) by redesignating paragraph (4) as para-
graph (5); and
(2) by inserting after paragraph (3) the fol-
lowing new paragraph:
‘‘(4) PERFORMANCE
INCENTIVE.—For fiscal
year 2003 and fiscal years thereafter, the Secretary
may pay an additional fee to any public housing
agency that succeeds in achieving high or substan-
tially improved performance on specified program re-
quirements or program goals, as established under
the management assessment program for the rental
assistance program under this section, or any suc-
cessor assessment program for such assistance, or
by regulation issued by the Secretary after notice
and opportunity for public comment pursuant to the
provisions of section 553 of title 5, United States
Code (notwithstanding subsections (a)(2), (b)(B),
and (d)(3) of such section). The Secretary shall es-
tablish limitations on the total amount of any such
additional fees paid to agencies for a fiscal year and
on the amount of any such fee paid to any single
agency for a fiscal year.’’.
SEC. 406. ENSURING ABILITY TO USE ENHANCED VOUCH-
ERS.
(a) IN GENERAL.—Section 8(t) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(t)) is amended—
(1) by redesignating paragraph (4) as para-
graph (5); and
(2) by inserting after paragraph (3) the fol-
lowing new paragraph:
‘‘(4) RIGHT TO USE.—The owner of a multi-
family housing project for which an eligibility event
(as such term is defined in paragraph (2)) has oc-
curred may not refuse—
‘‘(A) to lease, to a family who is residing
in project upon the occurrence of such eligibility
event and who is provided enhanced voucher as-
sistance under this subsection (including such
assistance provided under the authorities speci-
fied in paragraph (3)(B)), any available dwell-
ing unit in the project a proximate cause of
which is the status of such family as a recipient
of such assistance; or
‘‘(B) to enter into a housing assistance
payments contract for such a unit.’’.
(b) TREATMENT OF OVERHOUSED ASSISTED FAMI-
LIES.—Paragraph (6) of section 8(o) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(o)(6)) is amended
by adding at the end the following new subparagraph:
‘‘(D) RESIDENCY
IN
INAPPROPRIATELY
SIZED UNITS.—
‘‘(i) IN GENERAL.—If a public hous-
ing agency determines that a family as-
sisted under this subsection is residing in
a dwelling unit that, because of a reduction
in family size after such assistance was ini-
tially provided for such family, has more
bedrooms than is appropriate for a family
of such size, the agency may not terminate
the assistance for the family or require the
family to move to another dwelling unit
unless—
‘‘(I) the agency provides the fam-
ily with a dwelling unit that is located
in the same building or project as the
inappropriately sized dwelling unit
and is available for occupancy; or
‘‘(II) in the case of a family re-
siding in a dwelling unit in a building
or project that does not contain any
available dwelling unit having a num-
ber of bedrooms that is appropriate
for size of such family, the agency
provides the family with a dwelling
unit that is located within the same
neighborhood as the building con-
taining 
the 
inappropriately 
sized
dwelling unit.
‘‘(ii) DETERMINATION OF NEIGHBOR-
HOOD.—For purposes of clause (i)(II), the
term ‘neighborhood’ means the immediate
geographic area in which a building is lo-
cated, which—
‘‘(I) is characterized by all loca-
tions within the area having a similar
proximity to major roadways, mass
transit facilities, and other means of
transportation, schools, child care fa-
cilities, workplace centers, and grocery
stores and other retail and commercial
facilities; and
‘‘(II) shall be determined by the
public housing agency involved, in
consultation with the appropriate resi-
dent advisory board established pursu-
ant to section 5A(e).
‘‘(iii) TREATMENT
OF
STUDENTS.—
For purposes of clause (i), the absence of
a child or adult from a dwelling because of
temporary residence in another location for
the purpose of attending school on a full-
or part-time basis shall not be considered
in determining family size.’’.
SEC. 407. EXTENSION OF MANUFACTURED HOUSING DEM-
ONSTRATION PROGRAM.
Section 557 of the Quality Housing and Work Re-
sponsibility Act of 1998 (Public Law 105–276; 112 Stat.
2613) is amended—
(1) in subsection (a), by striking ‘‘1999, 2000,
and 2001’’ and inserting ‘‘2002, 2003, and 2004’’;
and
(2) in subsection (c)—
(A) by striking ‘‘REPORT’’ and inserting
‘‘REPORTS’’;
(B) by striking ‘‘a report’’ and inserting
‘‘an interim report’’;
(C) by striking ‘‘and evaluating’’ and in-
serting ‘‘the implementation and operation of’’;
and
(D) by adding at the end the following new
sentence: ‘‘Not later than March 31, 2005, the
Secretary shall submit a report to the Congress
describing and evaluating the demonstration
program under this section.’’.
SEC. 408. EXTENSION OF PROJECT-BASED SECTION 8 CON-
TRACT RENEWALS.
(a) RENEWAL OF EXPIRING PROJECT-BASED SEC-
TION 8 CONTRACTS.—Section 524 of the Multifamily As-
sisted Housing Reform and Affordability Act of 1997 (42
U.S.C. 1437f note) is amended—
(1) in subsection (a)(4)(A)(iv)—
(A) in subclause (I), by inserting ‘‘or’’
after the semicolon;
(B) by striking subclause (II); and
(C) by redesignating subclause (III) as
subclause (II); and
(2) by striking paragraph (3) of subsection (b).
(b) ADJUSTMENTS FOR COVERED PROJECTS.—
(1) RENT
DETERMINATION
AT
INITIAL
RE-
NEWAL AFTER ENACTMENT.—Upon the first request
for renewal of project-based assistance pursuant to
section 524 after the date of enactment of this Act
by an owner of a covered housing project—
(A) the rent levels at which assistance will
be provided pursuant to such renewal will be
determined as if such renewal were the initial
renewal of a contract for assistance under sec-
tion 524, as amended by subsection (a) of this
section; and
(B) solely for purposes of determining the
rent levels at which assistance will be provided
pursuant to such first renewal after the date of
enactment of this Act, in the case of a project
for which contract rents were reduced on a
prior renewal of an expiring contract pursuant
to subsection (b)(3) of section 524, as in effect
on the day before the date of enactment of this
Act, the contract rent levels in effect imme-
diately prior to such first renewal after the date
of enactment of this Act shall be considered to
be the deemed rent levels described in para-
graph (3)(C).
(2) RENT
ADJUSTMENTS
AFTER
INITIAL
RE-
NEWAL AFTER ENACTMENT.—After the first renewal
of a contract for assistance of a covered project after
the date of enactment of this Act in accordance with
paragraph (1) of this subsection, the Secretary shall
adjust rents in accordance with section 524(c).
(3) DEFINITIONS.—In this subsection—
(A) references to ‘‘section 524’’ or any
subdivision thereof are references to section 524
of the Multifamily Assisted Housing Reform
and Affordability Act of 1997 (42 U.S.C. 1437f
note);
(B) the term ‘‘covered housing project’’
means a project that receives project-based as-
sistance under section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f) which
was renewed prior to the date of enactment of
this Act pursuant to subsection (b)(3) of sec-
tion 524, as in effect on the day before the date
of enactment of this Act;
(C) the term ‘‘deemed rent levels’’ means
the contract rent levels in effect immediately
prior to the first renewal of assistance pursuant
to subsection (b)(3) of section 524, as in effect
on the day before the date of enactment of this
Act, upon which contract rent levels were re-
duced, as adjusted by the applicable operating
cost adjustment factor established by the Sec-
retary at the date of such renewal and at the
date of any subsequent renewal pursuant to
subsection (b)(3) of section 524 occurring be-
fore the date of enactment of this Act; and
(D) the term ‘‘Secretary’’ means the Sec-
retary of Housing and Urban Development.
TITLE V—PUBLIC HOUSING
Subtitle A—General Provisions
SEC. 501. WAIVER OF RESIDENT COMMISSIONER REQUIRE-
MENT.
Section 2(b) of the United States Housing Act of
1937 (42 U.S.C. 1437(b)) is amended—
(1) in paragraph (1), by striking ‘‘paragraph
(2)’’ and inserting ‘‘paragraphs (2) and (4)’’; and
(2) by adding at the end the following new
paragraph:
‘‘(4) WAIVER.—If the Secretary determines
that reasonable efforts have been made (whether or
not successful) or are being made to take such legis-
lative or regulatory action necessary to provide for
implementation of paragraph (1), the Secretary may
waive the applicability of such paragraph with re-
spect to all public housing agencies in such State
until such action has taken effect.’’.
SEC. 502. PHA JOINT VENTURES.
Section 13(b) of the United States Housing Act of
1937 (42 U.S.C. 1437k(b)) is amended by adding at the
end the following new paragraph:
‘‘(4) NON-FEDERAL FUNDS AND ACTIVITIES.—
This subsection shall not apply to any subsidiary,
joint venture, partnership, or business arrangement,
or any activity conducted by such an entity, that
does not involve holding or expending funds received
from the Federal Government or proceeds or income
derived from such funds.’’.
SEC. 503. THIRD-PARTY PUBLIC HOUSING ASSESSMENT
SYSTEM.
(a) ESTABLISHMENT.—The Secretary of Housing
and Urban Development shall provide for the development
of a third-party assessment system for evaluating the per-
formance of public housing agencies, in accordance with
this section.
(b) PURPOSES.—The assessment system developed
under this section shall—
(1) provide an objective assessment of the over-
all performance of public housing agencies in all
major areas of management operations and in dis-
charging their obligations under the United States
Housing Act of 1937;
(2) identify quantifiable areas of the manage-
ment and financial condition of public housing agen-
cies; and
(3) determine the physical condition of public
housing dwelling units to ensure that they are main-
tained in accordance with the requirements pursuant
to the United States Housing Act of 1937.
(c) TESTING AND PROTOTYPE.—
(1) IN
GENERAL.—Not later than 120 days
after the date of the enactment of this Act, to the
extent amounts are made available to carry out this
section, the Secretary of Housing and Urban Devel-
opment shall enter into a contract with a public enti-
ty or a private for-profit or nonprofit entity to de-
velop a system prototype for the third-party assess-
ment system required under this section and to test
such prototype. Such contract shall require such en-
tity to submit the prototype assessment system to
the Congress not later than the expiration of the 6-
month period beginning upon execution of the con-
tract and to complete such testing not later than the
expiration of the 12-month period beginning upon
execution of the contract.
(2) CONSULTATION.—In carrying out the test-
ing and prototype development under this sub-
section, the entity selected under this subsection
shall consult with individuals and organizations ex-
perienced in managing public housing and their rep-
resentatives, private real estate managers, represent-
atives from State and local governments, residents of
public housing, and the Secretary.
(d) REPORT.—Not later than the expiration of the
12-month period beginning upon execution of the contract
referred to in subsection (c)(1), the Secretary of Housing
and Urban Development shall submit to the Congress a
report describing the results and recommendations regard-
ing the testing of the prototype assessment system con-
ducted pursuant to this subsection, which shall include
any comments and recommendations of the persons and
entities consulted with pursuant to subsection (c)(2) and
any recommendations regarding the replacement of the
public housing management assessment system estab-
lished under section 6(j) of the United States Housing Act
of 1937 (42 U.S.C. 1437d(j)).
(e) RULE OF CONSTRUCTION.—This section may not
be construed to—
(1) provide for or require the implementation of
the third-party assessment system developed pursu-
ant to this section; or
(2) alter, affect, suspend, terminate, or delay
the effectiveness or applicability of the public hous-
ing assessment system under section 6(j) of the
United States Housing Act of 1937 (42 U.S.C.
1437d(j)) or any regulations issued, or to be issued,
pursuant to such section.
SEC. 504. PUBLIC HOUSING AGENCY PLANS FOR SMALL
PUBLIC HOUSING AGENCIES.
(a) IN GENERAL.—Section 5A(b) of the United
States Housing Act of 1937 (42 U.S.C. 1437c–1(b)) is
amended by adding at the end the following new para-
graph:
‘‘(3) SUSPENSION
OF
FILING
REQUIREMENT
FOR SMALL PHAS.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1) or any other provision of this Act—
‘‘(i) the requirement under paragraph
(1) shall not apply to any small public
housing agency for fiscal years 2003,
2004, or 2005; and
‘‘(ii) any reference in this section or
any other provision of law to a ‘public
housing agency’ shall not be considered to
refer to any small public housing agency
for such fiscal years, to the extent such
reference applies to the requirement to
submit a public housing agency plan under
subsection (b).
‘‘(B) DEFINITION.—For purposes of this
paragraph, the term ‘small public housing agen-
cy’ means a public housing agency that—
‘‘(i) administers 100 or fewer public
housing dwelling units; and
‘‘(ii) is not designated pursuant to
section 6(j)(2) as a troubled public housing
agency.’’.
(b) REPORT.—Not later than September 30, 2004,
the Comptroller General of the United States shall submit
a report to the Congress describing and analyzing the ad-
ministrative, financial, and other burdens to small public
housing agencies (as such term is defined in section
5A(b)(3) of the United States Housing Act of 1937, as
amended by subsection (a) of this section) of complying
with the requirements under section 5A(b)(1) of such Act.
SEC. 505. DEVELOPMENT-BASED SUBSIDIES.
(a) IN GENERAL.—Section 9 of the United States
Housing Act of 1937 (42 U.S.C. 1437g) is amended by
adding at the end the following new subsection:
‘‘(o) DEVELOPMENT-BASED SUBSIDIES.—
‘‘(1) IN GENERAL.—In order to facilitate the fi-
nancing of capital needs and development-based fi-
nancial management and accountability, the Sec-
retary may approve, on a project-by-project basis,
the conversion of a public housing project or a por-
tion of a public housing project to project-based
voucher assistance, which assistance may be on-site
or off-site: Provided, That the number of public
housing units converted under this subsection shall
be equal to the number of units receiving project-
based voucher assistance pursuant to this sub-
section, and that a commitment has first been ob-
tained from an approved lender for a mortgage loan
secured by the property to finance qualified nec-
essary capital improvements under terms established
by the Secretary.
‘‘(2) FUNDING OF VOUCHERS.—The initial year
of any contract for project-based voucher assistance
under this subsection may be funded with amounts
made available in an appropriations Act under the
headings making amounts available for the purposes
set forth in subsections (d) or (e) of this section, or
with any other amounts appropriated for this pur-
pose. Any renewal of such contracts shall be funded
with amounts made available under the heading
making amounts available for the renewal of assist-
ance under section 8.
‘‘(3) PROGRAM REQUIREMENTS.—Project-based
voucher assistance provided pursuant to this sub-
section shall be administered under section 8(o)(13),
except that—
‘‘(A) subparagraphs (C)(ii) and (D) of
such section shall not apply;
‘‘(B)(i) any units converted to project-
based voucher assistance under this subsection
shall be maintained as assisted housing and
provided project-based voucher assistance for
the same length of time as the housing would
have been required under subsection (d)(3) of
this section to be operated and maintained as
public housing absent such conversion, subject
to the availability of sufficient appropriated
funds for the purpose of renewing expiring con-
tracts for assistance payments, as provided in
appropriations Acts;
‘‘(D) any units converted to project-based
voucher assistance under this subsection shall
not be included as tenant-based assistance that
is attached to a structure for the purposes of
the 20 percent limitation set forth in section
8(o)(13)(B);
‘‘(E) the Secretary may set the rent level
for a unit converted to project-based voucher
assistance under this subsection at a level lower
than the level at which such rent would other-
wise be set pursuant to section 8(o)(13)(H),
provided such lower level is sufficient, in the de-
termination of the Secretary, to cover debt serv-
ice payments on obligations to finance the cost
of any necessary rehabilitation, contributions to
a capital reserve, amounts necessary for ade-
quate debt service coverage, the cost of the sub-
sequent operation of the housing as project-
based voucher assistance, and any other nec-
essary costs;
‘‘(F) where units converted to project-
based voucher assistance under this subsection
are owned by the public housing agency or an
entity controlled by such agency, the Secretary
may administer or make alternative arrange-
100
ments to administer the obligations otherwise
required of the public housing agency under the
annual contributions contract; and
‘‘(G) the Secretary may waive or make al-
ternative arrangements regarding any other
provision of law or regulation that the Secretary
finds to be inconsistent with accomplishing the
purposes of this subsection.
‘‘(4) TREATMENT OF CONVERSION.—The con-
version of a public housing project to project-based
voucher assistance under this subsection shall not be
considered a disposition under section 18 of this Act
as long as the public housing agency or an entity
controlled by the agency retains ownership of the
project.
‘‘(5) LOAN LOSS RESERVE ACCOUNT.—
‘‘(A) 
ESTABLISHMENT.—The 
Secretary
may establish a common loan loss reserve ac-
count to which public housing agencies con-
verting public housing units to project-based
voucher assistance under this subsection may
contribute a percentage of amounts available
for such conversion, which percentage shall be
specified by the Secretary. The Secretary may
establish the terms and conditions applicable to
101
this loan loss reserve account and any contribu-
tions to it, and may select an entity or entities
on a competitive or noncompetitive basis to de-
velop, maintain, and administer this account.
‘‘(B) 
AVAILABILITY
OF
AMOUNTS.—
Amounts contributed to the account established
under this paragraph shall be available without
fiscal year limitation to reimburse any mort-
gagor that provides financing to a public hous-
ing agency for necessary renovations to any
project converted pursuant to this subsection if
the public housing agency defaults on the re-
payment of such debt.’’.
(b) USE OF CAPITAL FUND AMOUNTS FOR CONVER-
SION.—Section 9(d)(1) of the United States Housing Act
of 1937 (42 U.S.C. 1437g(d)(1)) is amended—
(1) in subparagraph (I), by striking ‘‘and’’ at
the end;
(2) in subparagraph (J), by striking the period
and inserting ‘‘; and’’; and
(3) by inserting at the end the following new
subparagraph:
‘‘(K) assistance in the financing for nec-
essary renovations to, or other capital expenses
for, any project receiving project-based voucher
102
assistance pursuant to subsection (o) of this
section, including the making of upfront capital
contributions to such projects where needed to
make financing feasible and the purchase or
provision of letters of credit or other credit en-
hancements necessary to carry out such sub-
section, contributions to a common loan loss re-
serve account as established by subsection
(o)(5) of this section, and any contributions
that the Secretary may require for the initial
administration of such subsection (o) with re-
spect to such project.’’.
Subtitle B—HOPE VI
Revitalization Program
SEC. 521. SELECTION CRITERIA.
Section 24(e)(2) of the United States Housing Act
of 1937 (42 U.S.C. 1437v(e)(2)) is amended—
(1) in subparagraph (B), by striking ‘‘large-
scale redevelopment or modernization efforts’’ and
inserting ‘‘redevelopment or modernization efforts
that are large-scale in relation to the size of the
agency’’;
(2) in subparagraph (H), by striking ‘‘and’’ at
the end;
103
(3) by redesignating subparagraph (I) as sub-
paragraph (J); and
(4) by inserting after subparagraph (H) the fol-
lowing new subparagraph:
‘‘(I) the representativeness of the awards
with regard to agency size and geographic loca-
tion from year to year; and’’.
SEC. 522. AUTHORIZATION OF APPROPRIATIONS.
Paragraph (1) of section 24(m) of the United States
Housing Act of 1937 (42 U.S.C. 1437v(m)(1)) is amended
to read as follows:
‘‘(1) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated for grants
under this section such sums as may be necessary
for each of fiscal years 2003 and 2004.’’.
SEC. 523. EXTENSION OF PROGRAM.
Section 24(n) of the United States Housing Act of
1937 (42 U.S.C. 1437v(n)) is amended by striking ‘‘Sep-
tember 30, 2002’’ and inserting ‘‘September 30, 2004’’.
TITLE VI—HOMELESS HOUSING
PROGRAMS
SEC. 601. INTERAGENCY COUNCIL ON THE HOMELESS.
Section 208 of the McKinney-Vento Homeless Assist-
ance Act (42 U.S.C. 11318) is amended to read as follows:
104
‘‘SEC. 208. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
this title such sums as may be necessary for each of fiscal
years 2003 and 2004.’’.
SEC. 602. FEDERAL EMERGENCY MANAGEMENT AGENCY
FOOD AND SHELTER PROGRAM.
Section 322 of the McKinney-Vento Homeless Assist-
ance Act (42 U.S.C. 11352) is amended to read as follows:
‘‘SEC. 322. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
this title such sums as may be necessary for each of fiscal
years 2003 and 2004.’’.
SEC. 603. EMERGENCY SHELTER GRANTS PROGRAM.
Section 417 of the McKinney-Vento Homeless Assist-
ance Act (42 U.S.C. 11377) is amended to read as follows:
‘‘SEC. 417. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
this subtitle such sums as may be necessary for each of
fiscal years 2003 and 2004.’’.
SEC. 604. SUPPORTIVE HOUSING PROGRAM.
(a) AUTHORIZATION
OF
APPROPRIATIONS.—Sub-
section (a) of section 429 of the McKinney-Vento Home-
less Assistance Act (42 U.S.C. 11389(a)) is amended to
read as follows:
‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this subtitle
105
(not including activities funded pursuant to subsection (d)
of this section) such sums as may be necessary for each
of fiscal years 2003 and 2004.’’.
(b) FUNDING OF RENEWALS THROUGH HOUSING
CERTIFICATE FUND.—Section 429 of the McKinney-
Vento Homeless Assistance Act (42 U.S.C. 11389) is
amended by adding at the end the following new sub-
section:
‘‘(d) FUNDING OF RENEWALS.—
‘‘(1) IN GENERAL.—For fiscal year 2003 and
fiscal years thereafter, assistance under this subtitle
may be funded using amounts appropriated for sec-
tion 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f).
‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—In
addition to any amounts otherwise made available
for assistance under section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f), there are
authorized to be appropriated such sums as may be
necessary for each of fiscal years 2003 and 2004 for
the renewal of contracts for permanent housing ac-
tivities under this subtitle. Any such renewals shall
be made only for a term of one year.’’.
(c) SET-ASIDE.—Subtitle A of title IV of the McKin-
ney-Vento Homeless Assistance Act (42 U.S.C. 11361 et
106
seq.) is amended by adding at the end the following new
section:
‘‘SEC. 403. SET-ASIDE FOR PERMANENT HOUSING.
‘‘Notwithstanding any other provision of this title, of
the aggregate amount made available for assistance under
this title for any fiscal year, not less than 30 percent shall
be used only for permanent housing activities for homeless
persons. Amounts made available under section 429(d) or
463(c) for renewals of contracts for permanent housing
shall be disregarded for purposes of the preceding sen-
tence.’’.
(d) ELIMINATION OF CAP ON CAPITAL EXPENSES.—
Section 423(a) of the McKinney-Vento Homeless Assist-
ance Act (42 U.S.C. 11383(a)) is amended—
(1) in the first sentence of paragraph (1)—
(A) by striking ‘‘, in an amount not to ex-
ceed $200,000,’’; and
(B) by striking ‘‘; except that’’ and all that
follows through ‘‘rehabilitation costs’’; and
(2) in paragraph (2), by striking ‘‘, in an
amount not to exceed $400,000,’’.
107
SEC. 605. SECTION 8 ASSISTANCE FOR SINGLE ROOM OCCU-
PANCY DWELLINGS.
Subsection (a) of section 441 of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11401(a)) is amend-
ed to read as follows:
‘‘(a) INCREASE IN BUDGET AUTHORITY.—The budg-
et authority available under section 5(c) of the United
States Housing Act of 1937 for assistance under section
8(e)(2) of such Act (as in effect pursuant to section
289(b)(2) of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 12839(b)(2)) is authorized to be
increased by such sums as may be necessary on or after
each of October 1, 2002, and October 1, 2003.’’.
SEC. 606. SHELTER PLUS CARE.
(a) AUTHORIZATION OF APPROPRIATIONS.—The first
sentence of section 463(a) of the McKinney-Vento Home-
less Assistance Act (42 U.S.C. 11403h(a)) is amended to
read as follows: ‘‘For purposes of the housing programs
under this subtitle, there are authorized to be appro-
priated to carry out this subtitle (not including activities
funded pursuant to subsection (c) of this section) such
sums as may be necessary for each of fiscal years 2003
and 2004.’’.
(b) FUNDING OF RENEWALS THROUGH HOUSING
CERTIFICATE FUND.—Section 463 of the McKinney-
Vento Homeless Assistance Act (42 U.S.C. 11403h) is
108
amended by adding at the end the following new sub-
section:
‘‘(c) FUNDING OF RENEWALS.—
‘‘(1) IN GENERAL.—For fiscal year 2003 and
fiscal years thereafter, assistance under this subtitle
may be funded using amounts appropriated for sec-
tion 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f).
‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—In
addition to any amounts otherwise made available
for assistance under section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f), there are
authorized to be appropriated such sums as may be
necessary for each of fiscal years 2003 and 2004 for
the renewal of contracts under this subtitle. Any
such renewals shall be made only for a term of one
year.’’.
(c) CONDITIONS OF RENEWAL.—Section 456 of the
McKinney-Vento Homeless Assistance Act (42 U.S.C.
11403e) is amended—
(1) by inserting ‘‘(a) APPROVAL
OF ASSIST-
ANCE.—’’ before ‘‘The Secretary’’; and
(2) by adding at the end the following new sub-
section:
109
‘‘(b) CONDITIONS OF RENEWAL.—The Secretary may
not provide assistance under this subtitle for any housing
previously assisted under this subtitle unless the unit of
general local government in which such project is located
certifies that the housing complies with such housing safe-
ty and quality standards, as the Secretary shall establish
and the Secretary reviews and approves such certifi-
cation.’’.
SEC. 607. AMENDMENTS TO TABLE OF CONTENTS.
The table of contents in section 101(b) of the McKin-
ney-Vento Homeless Assistance Act (42 U.S.C. 11301
note) is amended—
(1) by striking the item relating to subtitle A
of title IV and inserting the following new item:
‘‘Subtitle A—General Provisions’’;
(2) by inserting after the item relating to sec-
tion 401 the following new items:
‘‘Sec. 402. Discharge coordination policy.
‘‘Sec. 403. Set-aside for permanent housing.
‘‘Sec. 404. Management information systems.’’;
and
(3) by striking the item relating to section 443
and inserting the following new item:
‘‘Sec. 443. Environmental review.’’.
110
TITLE VII—NATIVE AMERICAN
HOUSING
SEC. 701. REAUTHORIZATION OF NATIVE AMERICAN HOUS-
ING AND SELF-DETERMINATION ACT OF 1996.
(a) BLOCK GRANT ASSISTANCE.—Section 108 of the
Native American Housing and Self-Determination Act of
1996 (25 U.S.C. 4117) is amended to read as follows:
‘‘SEC. 108. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated for grants
under this title such sums as may be necessary for each
of fiscal years 2003, 2004, 2005, 2006, and 2007.’’.
(b) GUARANTEES FOR TRIBAL HOUSING ACTIVITIES
LOANS.—
(1) AGGREGATE
FISCAL
YEAR
LIMITATION.—
Section 605(a) of the Native American Housing and
Self-Determination Act of 1996 (25 U.S.C. 4195(a))
is amended by striking ‘‘1997, 1998, 1999, 2000,
and 2001’’ and inserting ‘‘2003, 2004, 2005, 2006,
and 2007.’’.
(2) AUTHORIZATION OF APPROPRIATIONS FOR
CREDIT
SUBSIDY.—Section 605(b) of the Native
American Housing and Self-Determination Act of
1996 (25 U.S.C. 4195(b)) is amended by striking
‘‘1997, 1998, 1999, 2000, and 2001’’ and inserting
‘‘2003, 2004, 2005, 2006, and 2007.’’.