H. R. 2099—34
(i) maintaining existing housing stock in a decent,
safe, and sanitary condition;
(ii) minimizing the involuntary displacement of
tenants;
(iii) restructuring the mortgages of such projects
in a manner that is consistent with local housing mar-
ket conditions;
(iv) supporting fair housing strategies;
(v) minimizing any adverse income tax impact on
property owners; and
(vi) minimizing any adverse impact on residential
neighborhoods.
In determining the manner in which a mortgage is to be restruc-
tured or the subsidy reduced, the Secretary may balance
competing goals relating to individual projects in a manner
that will further the purposes of this section.
(2) DEMONSTRATION
APPROACHES.—In carrying out the
demonstration programs, subject to the appropriation in sub-
section (f), the Secretary may use one or more of the following
approaches:
(A) Joint venture arrangements with third parties,
under which the Secretary may provide for the assumption
by the third parties (by delegation, contract, or otherwise)
of some or all of the functions, obligations, and benefits
of the Secretary.
(B) Subsidization of the debt service of the project
to a level that can be paid by an owner receiving an
unsubsidized market rent.
(C) Renewal of existing project-based assistance con-
tracts where the Secretary shall approve proposed initial
rent levels that do not exceed the greater of 120 percent
of fair market rents or comparable market rents for the
relevant metropolitan market area or at rent levels under
a budget-based approach.
(D) Nonrenewal of expiring existing project-based
assistance contracts and providing tenant-based assistance
to previously assisted households.
(b) For purposes of carrying out demonstration programs under
subsection (a)—
(1) the Secretary may manage and dispose of multifamily
properties owned by the Secretary as of October 1, 1995 and
multifamily mortgages held by the Secretary as of October
1, 1995 for properties assisted under section 8 with rents above
110 percent of fair market rents without regard to any other
provision of law; and
(2) the Secretary may delegate to one or more entities
the authority to carry out some or all of the functions and
responsibilities of the Secretary in connection with the fore-
closure of mortgages held by the Secretary under the National
Housing Act.
(c) For purposes of carrying out demonstration programs under
subsection (a), subject to such third party consents (if any) as
are necessary including but not limited to (i) consent by the Govern-
ment National Mortgage Association where it owns a mortgage
insured by the Secretary; (ii) consent by an issuer under the mort-
gage-backed securities program of the Association, subject to the
responsibilities of the issuer to its security holders and the Associa-
H. R. 2099—35
tion under such program; and (iii) parties to any contractual agree-
ment which the Secretary proposes to modify or discontinue, and
subject to the appropriation in subsection (c), the Secretary or
one or more third parties designated by the Secretary may take
the following actions:
(1) Notwithstanding any other provision of law, and subject
to the agreement of the project owner, the Secretary or third
party may remove, relinquish, extinguish, modify, or agree
to the removal of any mortgage, regulatory agreement, project-
based assistance contract, use agreement, or restriction that
had been imposed or required by the Secretary, including
restrictions on distributions of income which the Secretary or
third party determines would interfere with the ability of the
project to operate without above market rents. The Secretary
or third party may require an owner of a property assisted
under the section 8 new construction/substantial rehabilitation
program to apply any accumulated residual receipts toward
effecting the purposes of this section.
(2) Notwithstanding any other provision of law, the Sec-
retary of Housing and Urban Development may enter into
contracts to purchase reinsurance, or enter into participations
or otherwise transfer economic interest in contracts of insurance
or in the premiums paid, or due to be paid, on such insurance
to third parties, on such terms and conditions as the Secretary
may determine.
(3) The Secretary may offer project-based assistance with
rents at or below fair market rents for the locality in which
the project is located and may negotiate such other terms
as are acceptable to the Secretary and the project owner.
(4) The Secretary may offer to pay all or a portion of
the project’s debt service, including payments monthly from
the appropriate Insurance Fund, for the full remaining term
of the insured mortgage.
(5) Notwithstanding any other provision of law, the Sec-
retary may forgive and cancel any FHA-insured mortgage debt
that a demonstration program property cannot carry at market
rents while bearing full operating costs.
(6) For demonstration program properties that cannot carry
full operating costs (excluding debt service) at market rents,
the Secretary may approve project-based rents sufficient to
carry such full operating costs and may offer to pay the full
debt service in the manner provided in paragraph (4).
(d) COMMUNITY AND TENANT INPUT.—In carrying out this sec-
tion, the Secretary shall develop procedures to provide appropriate
and timely notice to officials of the unit of general local government
affected, the community in which the project is situated, and the
tenants of the project.
(e) LIMITATION ON DEMONSTRATION AUTHORITY.—The Secretary
may carry out demonstration programs under this section with
respect to mortgages not to exceed 15,000 units. The demonstration
authorized under this section shall not be expanded until the reports
required under subsection (g) are submitted to the Congress.
(f) APPROPRIATION.—For the cost of modifying loans held or
guaranteed by the Federal Housing Administration, as authorized
by this subsection (a)(2) and subsection (c), $30,000,000, to remain
available until September 30, 1997: Provided, That such costs shall
H. R. 2099—36
be as defined in section 502 of the Congressional Budget Act of
1974, as amended.
(g) REPORT TO CONGRESS.—The Secretary shall submit to the
Congress every six months after the date of enactment of this
Act a report describing and assessing the programs carried out
under the demonstrations. The Secretary shall also submit a final
report to the Congress not later than six months after the end
of the demonstrations. The reports shall include findings and rec-
ommendations for any legislative action appropriate. The reports
shall also include a description of the status of each multifamily
housing project selected for the demonstrations under this section.
The final report may include—
(1) the size of the projects;
(2) the geographic locations of the projects, by State and
region;
(3) the physical and financial condition of the projects;
(4) the occupancy profile of the projects, including the
income, family size, race, and ethnic origin of current tenants,
and the rents paid by such tenants;
(5) a description of actions undertaken pursuant to this
section, including a description of the effectiveness of such
actions and any impediments to the transfer or sale of multi-
family housing projects;
(6) a description of the extent to which the demonstrations
under this section have displaced tenants of multifamily hous-
ing projects;
(7) a description of any of the functions performed in
connection with this section that are transferred or contracted
out to public or private entities or to States;
(8) a description of the impact to which the demonstrations
under this section have affected the localities and communities
where the selected multifamily housing projects are located;
and
(9) a description of the extent to which the demonstrations
under this section have affected the owners of multifamily
housing projects.
SECTION 8 CONTRACT RENEWALS
SEC. 214. (a) For fiscal year 1996 and henceforth, the Secretary
of Housing and Urban Development may use amounts available
for the renewal of assistance under section 8 of the United States
Housing Act of 1937, upon termination or expiration of a contract
for assistance under section 8 of such Act of 1937 (other than
a contract for tenant-based assistance and notwithstanding section
8(v) of such Act for loan management assistance), to provide assist-
ance under section 8 of such Act, subject to the Section 8 Existing
Fair Market Rents, for the eligible families assisted under the
contracts at expiration or termination, which assistance shall be
in accordance with terms and conditions prescribed by the Sec-
retary.
(b) Notwithstanding subsection (a) and except for projects
assisted under section 8(e)(2) of the United States Housing Act
of 1937 (as it existed immediately prior to October 1, 1991), at
the request of the owner, the Secretary shall renew for a period
of one year contracts for assistance under section 8 that expire
or terminate during fiscal year 1996 at the current rent levels.
H. R. 2099—37
(c) Section 8(v) of the United States Housing Act of 1937 is
amended to read as follows: ‘‘The Secretary may extend expiring
contracts entered into under this section for project-based loan
management assistance to the extent necessary to prevent displace-
ment of low-income families receiving such assistance as of Septem-
ber 30, 1996.’’.
(d) Section 236(f) of the National Housing Act (12 U.S.C. 1715z–
1(f)) is amended:
(1) by striking the second sentence in paragraph (1) and
inserting in lieu thereof the following: ‘‘The rental charge for
each dwelling unit shall be at the basic rental charge or such
greater amount, not exceeding the lower of (i) the fair market
rental charge determined pursuant to this paragraph, or (ii)
the fair market rental established under section 8(c) of the
United States Housing Act of 1937 for the market area in
which the housing is located, as represents 30 per centum
of the tenant’s adjusted income.’’; and
(2) by striking paragraph (6).’’.
EXTENSION OF HOME EQUITY CONVERSION MORTGAGE PROGRAM
SEC. 215. Section 255(g) of the National Housing Act (12 U.S.C.
1715z–20(g)) is amended—
(1) in the first sentence, by striking ‘‘September 30, 1995’’
and inserting ‘‘September 30, 1996’’; and
(2) in the second sentence, by striking ‘‘25,000’’ and insert-
ing ‘‘30,000’’.
ASSESSMENT COLLECTION DATES FOR OFFICE OF FEDERAL HOUSING
ENTERPRISE OVERSIGHT
SEC. 216. Section 1316(b) of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4516(b)) is amended by striking
paragraph (2) and inserting the following new paragraph:
‘‘(2) TIMING
OF
PAYMENT.—The annual assessment shall be
payable semiannually for each fiscal year, on October 1 and April
1.’’.
MERGER LANGUAGE FOR ASSISTANCE FOR THE RENEWAL OF EXPIRING
SECTION 8 SUBSIDY CONTRACTS AND ANNUAL CONTRIBUTIONS FOR
ASSISTED HOUSING
SEC. 217. All remaining obligated and unobligated balances
in the Renewal of Expiring Section 8 Subsidy Contracts account
on September 30, 1995, shall immediately thereafter be transferred
to and merged with the obligated and unobligated balances, respec-
tively, of the Annual Contributions for Assisted Housing account.
DEBT FORGIVENESS
SEC. 218. (a) The Secretary of Housing and Urban Development
shall cancel the indebtedness of the Hubbard Hospital Authority
of Hubbard, Texas, relating to the public facilities loan for Project
Number PFL–TEX–215, issued under title II of the Housing Amend-
ments of 1955. Such hospital authority is relieved of all liability
to the Government for the outstanding principal balance on such
loan, for the amount of accrued interest on such loan, and for
any fees and charges payable in connection with such loan.