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and have little or no means of paying additional rent
from personal income, putting at risk what have
been their homes for almost a quarter of a century;
and
(7) the Federal Government should continue to
work to ensure that those least able to provide for
themselves enjoy the protection and welfare of the
people of the United States.
(b) PURPOSE.—The purpose of this title is to protect
seniors, persons with disabilities, and other vulnerable
residents of affordable housing and to help provide those
residents with peace of mind and security for living—
(1) by providing greater rental assistance flexi-
bility to ensure that vulnerable populations are not
forced to move from their homes when rent levels
rise; and
(2) where appropriate, by encouraging private
owners of affordable housing developments to con-
tinue serving low-income families by providing ap-
propriate levels of Federal resources, by allowing
greater flexibility for refinancing, and by ensuring
more effective administration by the Federal Govern-
ment of rental assistance contract renegotiations.
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SEC. 402. RENEWAL OF EXPIRING CONTRACTS AND EN-
HANCED VOUCHERS FOR PROJECT RESI-
DENTS.
(a) IN GENERAL.—Section 524 of the Multifamily
Assisted Housing Reform and Affordability Act of 1997
(42 U.S.C. 1437f note) is amended to read as follows:
‘‘SEC. 524. RENEWAL OF EXPIRING PROJECT-BASED SEC-
TION 8 CONTRACTS.
‘‘(a) IN GENERAL.—
‘‘(1) RENEWAL.—Subject to paragraph (2),
upon termination or expiration of a contract for
project-based assistance under section 8 for a multi-
family housing project (and notwithstanding section
8(v) of the United States Housing Act of 1937 for
loan management assistance), the Secretary shall, at
the request of the owner of the project and to the
extent sufficient amounts are made available in ap-
propriation Acts, use amounts available for the re-
newal of assistance under section 8 of such Act to
provide such assistance for the project. The assist-
ance shall be provided under a contract having such
terms and conditions as the Secretary considers ap-
propriate, subject to the requirements of this sec-
tion. This section shall not require contract renewal
for a project that is eligible under this subtitle for
a mortgage restructuring and rental assistance suffi-
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ciency plan, if there is no approved plan for the
project and the Secretary determines that such an
approved plan is necessary.
‘‘(2) PROHIBITION
ON
RENEWAL.—Notwith-
standing part 24 of title 24 of the Code of Federal
Regulations, the Secretary may elect not to renew
assistance for a project otherwise required to be re-
newed under paragraph (1) or provide comparable
benefits under paragraph (1) or (2) of subsection (e)
for a project described in either such paragraph, if
the Secretary determines that a violation under
paragraph (1) through (4) of section 516(a) has oc-
curred with respect to the project. For purposes of
such a determination, the provisions of section 516
shall apply to a project under this section in the
same manner and to the same extent that the provi-
sions of such section apply to eligible multifamily
housing projects, except that the Secretary shall
make the determination under section 516(a)(4).
‘‘(3) CONTRACT TERM FOR MARK-UP-TO-MAR-
KET CONTRACTS.—In the case of an expiring or ter-
minating contract that has rent levels less than com-
parable market rents for the market area, if the rent
levels under the renewal contract under this section
are equal to comparable market rents for the market
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area, the contract shall have a term of not less than
5 years, subject to the availability of sufficient
amounts in appropriation Acts.
‘‘(4) RENEWAL RENTS.—Except as provided in
subsection (b), the contract for assistance shall pro-
vide assistance at the following rent levels:
‘‘(A) MARKET RENTS.—At the request of
the owner of the project, at rent levels equal to
the lesser of comparable market rents for the
market area or 150 percent of the fair market
rents, in the case only of a project that—
‘‘(i) has rent levels under the expiring
or terminating contract that do not exceed
such comparable market rents;
‘‘(ii) does not have a low- and mod-
erate-income use restriction that can not
be eliminated by unilateral action by the
owner;
‘‘(iii) is decent, safe, and sanitary
housing, as determined by the Secretary;
‘‘(iv) is not—
‘‘(I) owned by a nonprofit entity;
‘‘(II) subject to a contract for
moderate 
rehabilitation 
assistance
under section 8(e)(2) of the United
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States Housing Act of 1937, as in ef-
fect before October 1, 1991; or
‘‘(III) a project for which the
public housing agency provided vouch-
er assistance to one or more of the
tenants after the owner has provided
notice of termination of the contract
covering the tenant’s unit; and
‘‘(v) has units assisted under the con-
tract for which the comparable market rent
exceeds 110 percent of the fair market
rent.
The Secretary may adjust the percentages of
fair market rent (as specified in the matter pre-
ceding clause (i) and in clause (v)), but only
upon a determination and written notification
to the Congress within 10 days of making such
determination, that such adjustment is nec-
essary to ensure that this subparagraph covers
projects with a high risk of nonrenewal of expir-
ing contracts for project-based assistance.
‘‘(B) REDUCTION TO MARKET RENTS.—In
the case of a project that has rent levels under
the expiring or terminating contract that exceed
comparable market rents for the market area,
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at rent levels equal to such comparable market
rents.
‘‘(C) RENTS
NOT
EXCEEDING
MARKET
RENTS.—In the case of a project that is not
subject to subparagraph (A) or (B), at rent lev-
els that—
‘‘(i) are not less than the existing
rents under the terminated or expiring
contract, as adjusted by an operating cost
adjustment factor established by the Sec-
retary (which shall not result in a negative
adjustment), if such adjusted rents do not
exceed comparable market rents for the
market area; and
‘‘(ii) do not exceed comparable market
rents for the market area.
In determining the rent level for a contract
under this subparagraph, the Secretary shall
approve rents sufficient to cover budget-based
cost increases and shall give greater consider-
ation to providing rent at a level up to com-
parable market rents for the market area based
on the number of the criteria under clauses (i)
through (iv) of subparagraph (D) that the
project meets.
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‘‘(D) WAIVER
OF
150
PERCENT
LIMITA-
TION.—Notwithstanding subparagraph (A), at
rent levels up to comparable market rents for
the market area, in the case of a project that
meets the requirements under clauses (i)
through (v) of subparagraph (A) and—
‘‘(i) has residents who are a particu-
larly 
vulnerable 
population, 
as 
dem-
onstrated by a high percentage of units
being rented to elderly families, disabled
families, or large families;
‘‘(ii) is located in an area in which
tenant-based assistance would be difficult
to use, as demonstrated by a low vacancy
rate 
for 
affordable 
housing, 
a 
high
turnback rate for vouchers, or a lack of
comparable rental housing;
‘‘(iii) is a high priority for the local
community, as demonstrated by a con-
tribution of State or local funds to the
property; or
‘‘(iv) is primarily occupied by elderly
or disabled families.
In determining the rent level for a contract
under this subparagraph, the Secretary shall
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approve rents sufficient to cover budget-based
cost increases and shall give greater consider-
ation to providing rent at a level up to com-
parable market rents for the market area based
on the number of the criteria under clauses (i)
through (iv) that the project meets.
‘‘(5) COMPARABLE MARKET RENTS AND COM-
PARISON
WITH
FAIR
MARKET
RENTS.—The Sec-
retary shall prescribe the method for determining
comparable market rent by comparison with rents
charged for comparable properties (as such term is
defined in section 512), which may include appro-
priate adjustments for utility allowances and adjust-
ments to reflect the value of any subsidy (other than
section 8 assistance) provided by the Department of
Housing and Urban Development.
‘‘(b) EXCEPTION RENTS.—
‘‘(1) RENEWAL.—In the case of a multifamily
housing project described in paragraph (2), pursuant
to the request of the owner of the project, the con-
tract for assistance for the project pursuant to sub-
section (a) shall provide assistance at the lesser of
following rent levels:
‘‘(A) ADJUSTED
EXISTING
RENTS.—The
existing rents under the expiring contract, as
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adjusted by an operating cost adjustment factor
established by the Secretary (which shall not re-
sult in a negative adjustment).
‘‘(B) BUDGET-BASED RENTS.—Subject to
a determination by the Secretary that a rent
level under this subparagraph is appropriate for
a project, a rent level that provides income suf-
ficient to support a budget-based rent (includ-
ing a budget-based rent adjustment if justified
by reasonable and expected operating expenses).
‘‘(2) 
PROJECTS
COVERED.—A 
multifamily
housing project described in this paragraph is an
multifamily housing project that—
‘‘(A) is not an eligible multifamily housing
project under section 512(2); or
‘‘(B) is exempt from mortgage restruc-
turing under this subtitle pursuant to section
514(h).
‘‘(c) RENT ADJUSTMENTS AFTER RENEWAL OF CON-
TRACT.—
‘‘(1) REQUIRED.—After the initial renewal of a
contract for assistance under section 8 of the United
States Housing Act of 1937 pursuant to subsection
(a), (b), or (e)(2), the Secretary shall annually ad-
just the rents using an operating cost adjustment
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factor established by the Secretary (which shall not
result in a negative adjustment) or, upon the request
of the owner and subject to approval of the Sec-
retary, on a budget basis. In the case of projects
with contracts renewed pursuant to subsection (a) or
pursuant to subsection (e)(2) at rent levels equal to
comparable market rents for the market area, at the
expiration of each 5-year period, the Secretary shall
compare existing rents with comparable market
rents for the market area and may make any adjust-
ments in the rent necessary to maintain the contract
rents at a level not greater than comparable market
rents or to increase rents to comparable market
rents.
‘‘(2) DISCRETIONARY.—In addition to review
and adjustment required under paragraph (1), in the
case of projects with contracts renewed pursuant to
subsection (a) or pursuant to subsection (e)(2) at
rent levels equal to comparable market rents for the
market area, the Secretary may, at the discretion of
the Secretary but only once within each 5-year pe-
riod referred to in paragraph (1), conduct a com-
parison of rents for a project and adjust the rents
accordingly to maintain the contract rents at a level
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not greater than comparable market rents or to in-
crease rents to comparable market rents.
‘‘(d) ENHANCED VOUCHERS UPON CONTRACT EXPI-
RATION.—
‘‘(1) IN GENERAL.—In the case of a contract
for project-based assistance under section 8 for a
covered project that is not renewed under subsection
(a) or (b) of this section (or any other authority),
to the extent that amounts for assistance under this
subsection are provided in advance in appropriation
Acts, upon the date of the expiration of such con-
tract the Secretary shall make enhanced voucher as-
sistance under this subsection available on behalf of
each low-income family who, upon the date of such
expiration, is residing in an assisted dwelling unit in
the covered project.
‘‘(2) 
ENHANCED
ASSISTANCE.—Enhanced
voucher assistance under this subsection for a family
shall be voucher assistance under section 8(o) of the
United States Housing Act of 1937 (42 U.S.C.
1437f(o)), except that under such enhanced voucher
assistance—
‘‘(A) during any period that the assisted
family continues residing in the covered project
in which the family was residing on the date of
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the expiration of such contract and the rent for
the dwelling unit of the family in such project
exceeds the applicable payment standard estab-
lished pursuant to section 8(o) for the unit, the
amount of rental assistance provided on behalf
of the family shall be determined using a pay-
ment standard that is equal to the rent for the
dwelling unit (as such rent may be increased
from time to time), subject to paragraph
(10)(A) of such section 8(o); and
‘‘(B) subparagraph (A) of this paragraph
shall not apply and the payment standard for
the dwelling unit occupied by the family shall be
determined in accordance with section 8(o) if—
‘‘(i) the assisted family moves, at any
time, from such covered project; or
‘‘(ii) the voucher is made available for
use by any family other than the original
family on behalf of whom the voucher was
provided pursuant to paragraph (1).
‘‘(3) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) ASSISTED
DWELLING
UNIT.—The
term ‘assisted dwelling unit’ means a dwelling
unit that—
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‘‘(i) is in a covered project; and
‘‘(ii) is covered by rental assistance
provided under the contract for project-
based assistance for the covered project.
‘‘(B) COVERED PROJECT.—The term ‘cov-
ered project’ means any housing that—
‘‘(i) consists of more than four dwell-
ing units;
‘‘(ii) is covered in whole or in part by
a contract for project-based assistance
under—
‘‘(I) the new construction or sub-
stantial rehabilitation program under
section 8(b)(2) of the United States
Housing Act of 1937 (as in effect be-
fore October 1, 1983);
‘‘(II) the property disposition
program under section 8(b) of the
United States Housing Act of 1937;
‘‘(III) the moderate rehabilitation
program under section 8(e)(2) of the
United States Housing Act of 1937
(as in effect before October 1, 1991);
‘‘(IV) the loan management as-
sistance program under section 8 of
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the United States Housing Act of
1937;
‘‘(V) section 23 of the United
States Housing Act of 1937 (as in ef-
fect before January 1, 1975);
‘‘(VI) the rent supplement pro-
gram under section 101 of the Hous-
ing and Urban Development Act of
1965; or
‘‘(VII) section 8 of the United
States Housing Act of 1937, following
conversion from assistance under sec-
tion 101 of the Housing and Urban
Development Act of 1965,
which contract will (under its own terms)
expire during the period consisting of fiscal
years 2000 through 2004; and
‘‘(iii) is not housing for which resi-
dents are eligible for enhanced voucher as-
sistance as provided, pursuant to the ‘Pre-
serving Existing Housing Investment’ ac-
count in the Departments of Veterans Af-
fairs and Housing and Urban Develop-
ment, and Independent Agencies Appro-
priations Act, 1997 (Public Law 104–204;
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110 Stat. 2884) or any other subsequently
enacted provision of law, in lieu of any
benefits under section 223 of the Low-In-
come Housing Preservation and Resident
Homeownership Act of 1990 (12 U.S.C.
4113).
‘‘(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated for each of
fiscal years 2000, 2001, 2002, 2003, and 2004 such
sums as may be necessary for enhanced voucher as-
sistance under this subsection.
‘‘(e) CONTRACTUAL COMMITMENTS UNDER PRESER-
VATION LAWS.—Except as provided in subsection (a)(2)
and notwithstanding any other provision of this subtitle,
the following shall apply:
‘‘(1) PRESERVATION PROJECTS.—Upon expira-
tion of a contract for assistance under section 8 for
a project that is subject to an approved plan of ac-
tion under the Emergency Low Income Housing
Preservation Act of 1987 (12 U.S.C. 1715l note) or
the Low-Income Housing Preservation and Resident
Homeownership Act of 1990 (12 U.S.C. 4101 et
seq.), to the extent sufficient amounts are made
available in appropriation Acts, the Secretary shall
provide to the owner benefits comparable to those
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provided under such plan of action, including dis-
tributions, rent increase procedures, and duration of
low-income affordability restrictions. This paragraph
shall apply to projects with contracts expiring be-
fore, on, or after the date of the enactment of this
section.
‘‘(2) DEMONSTRATION PROJECTS.—
‘‘(A) IN GENERAL.—Upon expiration of a
contract for assistance under section 8 for a
project entered into pursuant to any authority
specified in subparagraph (B) for which the
Secretary determines that debt restructuring is
inappropriate, the Secretary shall, at the re-
quest of the owner of the project and to the ex-
tent sufficient amounts are made available in
appropriation Acts, provide benefits to the
owner comparable to those provided under such
contract, including annual distributions, rent
increase procedures, and duration of low-income
affordability restrictions. This paragraph shall
apply to projects with contracts expiring before,
on, or after the date of the enactment of this
section.
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‘‘(B) DEMONSTRATION
PROGRAMS.—The
authority specified in this subparagraph is the
authority under—
‘‘(i) section 210 of the Departments
of Veterans Affairs and Housing and
Urban 
Development, 
and 
Independent
Agencies Appropriations Act, 1996 (Public
Law 104–134; 110 Stat. 1321–285; 42
U.S.C. 1437f note);
‘‘(ii) section 212 of the Departments
of Veterans Affairs and Housing and
Urban 
Development, 
and 
Independent
Agencies Appropriations Act, 1997 (Public
Law 104–204; 110 Stat. 2897; 42 U.S.C.
1437f note); and
‘‘(iii) either of such sections, pursuant
to any provision of this title.
‘‘(f) PREEMPTION
OF CONFLICTING STATE LAWS
LIMITING DISTRIBUTIONS.—No State or political subdivi-
sion of a State may establish, continue in effect, or enforce
any law or regulation that limits or restricts, to an amount
that is less than the amount provided for under the regula-
tions of the Secretary establishing allowable project dis-
tributions to provide a return on investment, the amount
of surplus funds accruing after the date of the enactment
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shall apply to projects with contracts expiring before, on,
or after the date of the enactment of this section.
‘‘(h) APPLICABILITY.—Except to the extent otherwise
specifically provided in this section, this section shall apply
with respect to any multifamily housing project having a
contract for project-based assistance under section 8 that
terminates or expires during fiscal year 2000 or there-
after.’’.
(b) DEFINITION OF ELIGIBLE MULTIFAMILY HOUS-
ING PROJECT.—Section 512(2) of the Multifamily As-
sisted Housing Reform and Affordability Act of 1997 (42
U.S.C. 1437f note) is amended by inserting after and
below subparagraph (C) the following:
‘‘Such term does not include any project with an ex-
piring contract described in paragraph (1) or (2) of
section 524(e).’’.
(c) PROJECTS EXEMPTED FROM RESTRUCTURING
AGREEMENTS.—Section 514(h) of the Multifamily As-
sisted Housing Reform and Affordability Act of 1997 (42
U.S.C. 1437f note) is amended by inserting before the
semicolon at the end the following: ‘‘and the financing in-
volves mortgage insurance under the National Housing
Act, such that the implementation of a mortgage restruc-
turing and rental assistance sufficiency plan under this
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subtitle is in conflict with applicable law or agreements
governing such financing’’.
(d) CONFORMING AMENDMENTS.—Section 8 of the
United States Housing Act of 1937 (42 U.S.C. 1437f) is
amended—
(1) by designating as subsection (v) the sen-
tence added by section 405(c) of The Balanced
Budget Downpayment Act, I (Public Law 104–99;
110 Stat. 44); and
(2) by striking subsection (w).
SEC. 403. SECTION 236 ASSISTANCE.
(a) CONTINUED RECEIPT OF SUBSIDIES UPON REFI-
NANCING.—Section 236(e) of the National Housing Act
(12 U.S.C. 1715z–1(e)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) A project for which interest reduction payments
are made under this section and for which the mortgage
on the project has been refinanced shall continue to receive
the interest reduction payments under this section under
the terms of the contract for such payments, but only if
the project owner enters into such binding commitments
as the Secretary may require (which shall be applicable
to any subsequent owner) to ensure that the owner will
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continue to operate the project in accordance with all low-
income affordability restrictions for the project in connec-
tion with the Federal assistance for the project for a pe-
riod having a duration that is not less than the term for
which such interest reduction payments are made.’’.
(b) RETENTION
OF
EXCESS
INCOME.—Section
236(g) of the National Housing Act (12 U.S.C. 1715z–
1(g)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’;
(2) by striking the last sentence; and
(3) by adding at the end the following new
paragraphs:
‘‘(2) Subject to paragraph (3) and notwithstanding
any other requirements of this subsection, a project owner
may retain some or all of such excess charges for project
use if authorized by the Secretary. Such use shall be for
project use and upon terms and conditions established by
the Secretary.
‘‘(3) The authority under paragraph (2) to retain and
use excess charges shall apply—
‘‘(A) during fiscal year 2000, to all project
owners collecting such excess charges; and
‘‘(B) 
during 
fiscal 
year 
2001 
and
thereafter—
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‘‘(i) to any owner of project with a
mortgage insured under this section, or a
project previously assisted under sub-
section (b) but without a mortgage insured
under this section if the project was in-
sured under section 207 of this Act before
July 30, 1998, pursuant to section 223(f)
of this Act and assisted under subsection
(b); and
‘‘(ii) to other project owners not re-
ferred to in clause (i) who collect such ex-
cess charges, but only to the extent that
such retention and use is approved in ad-
vance in an appropriation Act.’’.
(c) PREVIOUSLY OWED EXCESS INCOME.—Section
236(g) of the National Housing Act (12 U.S.C. 1715z–
1(g)), as amended by subsection (b) of this section, is fur-
ther amended by adding at the end the following new para-
graph:
‘‘(4) The Secretary shall not withhold approval of the
retention by the owner of such excess charges because of
the existence of unpaid excess charges if such unpaid
amount is being remitted to the Secretary over a period
of time in accordance with a workout agreement with the
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Secretary, unless the Secretary determines that the owner
is in violation of the workout agreement.’’.
(d) FLEXIBILITY REGARDING BASIC RENTS
AND
MARKET RENTS.—Section 236(f) of the National Housing
Act (12 U.S.C. 1715z–1(f)(1)) is amended by striking the
subsection designation and all that follows through the
end of paragraph (1) and inserting the following:
‘‘(f)(1)(A)(i) For each dwelling unit there shall be es-
tablished, with the approval of the Secretary, a basic rent-
al charge and fair market rental charge.
‘‘(ii) The basic rental charge shall be—
‘‘(I) the amount needed to operate the project
with payments of principal and interest due under a
mortgage bearing interest at the rate of 1 percent
per annum; or
‘‘(II) an amount greater than that determined
under clause (ii)(I), but not greater than the market
rent for a comparable unassisted unit, reduced by
the value of the interest reduction payments subsidy.
‘‘(iii) The fair market rental charge shall be—
‘‘(I) the amount needed to operate the project
with payments of principal, interest, and mortgage
insurance premium which the mortgagor is obligated
to pay under the mortgage covering the project; or
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‘‘(II) an amount greater than that determined
under clause (iii)(I), but not greater than the mar-
ket rent for a comparable unassisted unit.
‘‘(iv) The Secretary may approve a basic rental
charge and fair market rental charge for a unit that ex-
ceeds the minimum amounts permitted by this subpara-
graph for such charges only if—
‘‘(I) the approved basic rental charge and fair
market rental charges each exceed the applicable
minimum charge by the same amount; and
‘‘(II) the project owner agrees to restrictions on
project use or mortgage prepayment that are accept-
able to the Secretary.
‘‘(v) The Secretary may approve a basic rental charge
and fair market rental charge under this paragraph for
a unit with assistance under section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f) that differs from
the basic rental charge and fair market rental charge for
a unit in the same project that is similar in size and amen-
ities but without such assistance, as needed to ensure equi-
table treatment of tenants in units without such assist-
ance.
‘‘(B)(i) The rental charge for each dwelling unit shall
be at the basic rental charge or such greater amount, not
exceeding the fair market rental charge determined pursu-
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ant to subparagraph (A), as represents 30 percent of the
tenant’s adjusted income, except as otherwise provided in
this subparagraph.
‘‘(ii) In the case of a project which contains more
than 5000 units, is subject to an interest reduction pay-
ments contract, and is financed under a State or local
project, the Secretary may reduce the rental charge ceil-
ing, but in no case shall the rental charge be below the
basic rental charge set forth in subparagraph (A)(ii)(I).
‘‘(iii) For plans of action approved for capital grants
under the Low-Income Housing Preservation and Resi-
dent Homeownership Act of 1990 or the Emergency Low
Income Housing Preservation Act of 1987, the rental
charge for each dwelling unit shall be at the minimum
basic rental charge set forth in subparagraph (A)(ii)(I) or
such greater amount, not exceeding the lower of (I) the
fair market rental charge set forth in subparagraph
(A)(iii)(I), or (II) the actual rent paid for a comparable
unit in comparable unassisted housing in the market area
in which the housing assisted under this section is located,
as represents 30 percent of the tenant’s adjusted income.
‘‘(C) With respect to those projects which the Sec-
retary determines have separate utility metering paid by
the tenants for some or all dwelling units, the Secretary
may—
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‘‘(i) permit the basic rental charge and the fair
market rental charge to be determined on the basis
of operating the project without the payment of the
cost of utility services used by such dwelling units;
and
‘‘(ii) permit the charging of a rental for such
dwelling units at such an amount less than 30 per-
cent of a tenant’s adjusted income as the Secretary
determines represents a proportionate decrease for
the utility charges to be paid by such tenant, but in
no case shall rental be lower than 25 percent of a
tenant’s adjusted income.’’.
(e) EFFECTIVE DATE OF 1998 PROVISIONS.—Sec-
tion 236(g) of the National Housing Act (12 U.S.C.
1715z–1(g)), as amended by section 227 of the Depart-
ments of Veterans Affairs and Housing and Urban Devel-
opment, and Independent Agencies Appropriations Act,
1999 (Public Law 105–276; 112 Stat. 2490) shall be ef-
fective on the date of the enactment of such Public Law
105–276, and any excess rental charges referred to in
such section that have been collected since such date of
enactment with respect to projects with mortgages insured
under section 207 of the National Housing Act (12 U.S.C.
1713) may be retained by the project owner unless the
Secretary of Housing and Urban Development specifically
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provides otherwise. The Secretary may return any excess
charges remitted to the Secretary since such date of the
enactment.
(f) EFFECTIVE DATE.—This section shall take effect,
and the amendments made by this section are made and
shall apply, on the date of the enactment of this Act.
SEC. 404. MATCHING GRANT PROGRAM FOR AFFORDABLE
HOUSING PRESERVATION.
(a) AMENDMENT TO LOW-INCOME HOUSING PRES-
ERVATION
AND RESIDENT HOMEOWNERSHIP ACT
OF
1990.—Title II of the Housing and Community Develop-
ment Act of 1987 (12 U.S.C. 4101 et seq.) is amended—
(1) by striking subtitles C and D (as enacted by
Public Law 100–242; 101 Stat. 1886); and
(2) by adding at the end the following new sub-
title:
‘‘Subtitle D—Matching Grants for
States
‘‘SEC. 261. AUTHORITY.
‘‘The Secretary of Housing and Urban Development
shall, to the extent amounts are made available pursuant
to section 269, make grants under this subtitle to States
and qualified units of general local government for low-
income housing preservation.
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‘‘SEC. 262. USE OF GRANTS.
‘‘(a) IN GENERAL.—Amounts from grants under this
subtitle may be used only for assistance for acquisition,
preservation incentives, operating costs, and capital ex-
penditures for a housing project that—
‘‘(1) is at risk of loss for use as affordable
housing;
‘‘(2)(A) is primarily occupied by elderly or dis-
abled families;
‘‘(B) contains one or more dwelling units with
three or more bedrooms that are occupied by large
families;
‘‘(C) is located in a rural area with an inad-
equate supply of comparable housing, as determined
by the Secretary; or
‘‘(D) is located in a neighborhood or area—
‘‘(i) that is geographically smaller
than a market area; and
‘‘(ii) within which, in the determina-
tion of the Secretary, rental assistance
vouchers would be difficult to use, as dem-
onstrated by a low vacancy rate for afford-
able housing, a high turnback rate for such
vouchers, or a lack of comparable rental
housing;
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‘‘(3) meets the requirements under subsection
(b), (c), or (d); and
‘‘(4) is subject to such binding commitments as
the Secretary shall require (which shall be applicable
to any subsequent owner) to ensure that the low-in-
come affordability restrictions for the project in con-
nection with Federal assistance for the project have
been extended for the full period applicable under
the terms of assistance for the project, but in no
case for a period shorter than 5 years.
‘‘(b) PROJECTS WITH FEDERALLY ASSISTED MORT-
GAGES.—A project meets the requirements under this sub-
section only if—
‘‘(1) the project is financed by a loan or mort-
gage that is—
‘‘(A) insured or held by the Secretary
under section 221(d)(3) of the National Hous-
ing Act and receiving loan management assist-
ance under section 8 of the United States
Housing Act of 1937 due to a conversion from
section 101 of the Housing and Urban Develop-
ment Act of 1965;
‘‘(B) insured or held by the Secretary and
bears interest at a rate determined under the
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proviso of section 221(d)(5) of the National
Housing Act;
‘‘(C) insured, assisted, or held by the Sec-
retary or a State or State agency under section
236 of the National Housing Act;
‘‘(D) held by the Secretary and formerly
insured under a program referred to in sub-
paragraph (A), (B), or (C); or
‘‘(E) insured or held by the Secretary of
Agriculture under section 514 or 515 of the
Housing Act of 1949; and
‘‘(2) the project is subject to an unconditional
waiver of, with respect to the remaining term of the
mortgage referred to in paragraph (1)—
‘‘(A) all rights to any prepayment of the
mortgage; and
‘‘(B) all rights to any voluntary termi-
nation of the mortgage insurance contract for
the mortgage or the interest reduction pay-
ments contract, as applicable,
except that such requirement shall not apply in the
case of a project that is subject to a binding agree-
ment that ensures that the project will continue to
operate, at least until the maturity date of the loan
or mortgage, in a manner that will provide rental
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housing on terms at least as advantageous to exist-
ing and future tenants as the terms required by the
program under which the loan or mortgage was
made or insured prior to the proposed prepayment
or termination.
‘‘(c) PROJECTS WITH SECTION 8 PROJECT-BASED
ASSISTANCE.—A project meets the requirements under
this subsection only if—
‘‘(1) the project is subject to a contract for
project-based assistance; and
‘‘(2) the owner of the project has entered into
binding commitments (applicable to any subsequent
owner) to extend such assistance (subject to the
availability of amounts for such purpose) for a min-
imum of 5 years, or longer, as the Secretary may
prescribe under this section.
‘‘(d) PROJECTS PURCHASED BY RESIDENTS.—A
project meets the requirements under this subsection only
if the project—
‘‘(1) is or was eligible low-income housing (as
such term is defined in section 229 (42 U.S.C.
4119)); and
‘‘(2) has been purchased by a resident council
for the housing or is approved by the Secretary for
such purchase, for conversion to homeownership
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housing under a resident homeownership program
meeting the requirements under section 226 (12
U.S.C. 4116).
‘‘(e) 
COMBINATION
OF
ASSISTANCE.—Notwith-
standing subsection (a), any project that is otherwise eligi-
ble for assistance with grant amounts provided under this
subtitle because the project meets the requirements under
subsection (b) or (c) and that also meets the requirements
under paragraph (1) of the other of such subsections, shall
be eligible for such assistance only if the project complies
with all of the requirements under such other subsection.
‘‘SEC. 263. GRANT AMOUNT LIMITATION.
‘‘The Secretary shall limit the portion of the aggre-
gate amount of grants under this subtitle made available
for any fiscal year that may be provided to a single State
or qualified unit of general local government based upon
the proportion of such State’s or unit’s need (as deter-
mined by the Secretary) for such assistance to the aggre-
gate need among all States and qualified units of general
local government approved for such assistance for such fis-
cal year.
‘‘SEC. 264. MATCHING REQUIREMENT.
‘‘(a) IN GENERAL.—The Secretary may not make a
grant under this subtitle to any State or qualified unit
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‘‘SEC. 265. TREATMENT OF SUBSIDY LAYERING REQUIRE-
MENTS.
‘‘Neither section 264 nor any other provision of this
subtitle may be construed to prevent the use of tax credits
provided under section 42 of the Internal Revenue Code
of 1986 in connection with housing assisted with grant
amounts provided under this subtitle, to the extent that
such use is in accordance with section 102(d) of the De-
partment of Housing and Urban Development Reform Act
of 1989 (42 U.S.C. 3545(d)) and section 911 of the Hous-
ing and Community Development Act of 1992 (42 U.S.C.
3545 note).
‘‘SEC. 266. APPLICATIONS AND PREFERENCE.
‘‘(a) APPLICATIONS.—The Secretary shall provide for
States and units of general local government (through ap-
propriate State and local government agencies, including
State and local housing finance agencies) to submit appli-
cations for grants under this subtitle. The Secretary shall
require the applications to contain any information and
certifications necessary for the Secretary to determine
whether the State or unit of general local government is
eligible to receive such a grant.
‘‘(b) PREFERENCE.—In making grants under this
subtitle during fiscal years 2001 and thereafter, the Sec-
retary shall give preference—
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‘‘(1) among applications otherwise having equal
merit for funding under this subtitle, to funding ap-
plications for eligible States, and qualified units of
general local government located in States, that have
not previously received a grant under this subtitle;
and
‘‘(2) to grants for eligible housing projects that
are subject to such binding commitments as the Sec-
retary may require to ensure that the project will be
sold or transferred to an owner that is a nonprofit
organization.
‘‘SEC. 267. DEFINITIONS.
‘‘For purposes of this subtitle, the following defini-
tions shall apply:
‘‘(1) LOW-INCOME
AFFORDABILITY
RESTRIC-
TIONS.—The term ‘low-income affordability restric-
tions’ has the meaning given such term in section
229.
‘‘(2) PROJECT-BASED ASSISTANCE.—The term
‘project-based assistance’ has the meaning given
such term in section 16(c) of the United States
Housing Act of 1937 (42 U.S.C. 1437n(c)), except
that such term includes assistance under any suc-
cessor programs to the programs referred to in such
section.
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‘‘(3) QUALIFIED UNIT OF GENERAL LOCAL GOV-
ERNMENT.—The term ‘qualified unit of general local
government’ means, with respect to a fiscal year, a
unit of general local government that is located with-
in a State that—
‘‘(A) has not applied, and has indicated (in
accordance with such requirements as the Sec-
retary shall establish) that it will not apply, to
the Secretary for a grant under this subtitle for
the fiscal year; or
‘‘(B) has been determined by the Secretary
not to be eligible for a grant under this subtitle
for the fiscal year.
‘‘(4) SECRETARY.—The term ‘Secretary’ means
the Secretary of Housing and Urban Development.
‘‘(5) STATE.—The term ‘State’ means the
States of the United States, the District of Colum-
bia, the Commonwealth of Puerto Rico, the Com-
monwealth of the Northern Mariana Islands, Guam,
the Virgin Islands, American Samoa, and any other
territory or possession of the United States.
‘‘(6) UNIT
OF
GENERAL
LOCAL
GOVERN-
MENT.—The term ‘unit of general local government’
has the meaning given such term in section 102 of
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the Housing and Community Development Act of
1974 (42 U.S.C. 5302).
‘‘SEC. 268. REGULATIONS.
‘‘The Secretary may issue any regulations necessary
to carry out this subtitle.
‘‘SEC. 269. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated for grants
under this subtitle such sums as may be necessary for each
of fiscal years, 2000, 2001, and 2002.’’.
(b) RULE
OF
CONSTRUCTION.—The amendment
made by subsection (a)(1) of this section (relating to strik-
ing subtitles C and D of title II of the Housing and Com-
munity Development Act of 1987) may not be construed
to repeal or otherwise affect any provision of law that was
amended by such subtitles.
SEC. 405. REHABILITATION OF ASSISTED HOUSING.
(a) REHABILITATION LOANS FROM RECAPTURED
IRP AMOUNTS.—Section 236(s) of the National Housing
Act (12 U.S.C. 1715z–1) is amended—
(1) by striking the subsection designation and
heading and inserting the following:
‘‘(s) GRANTS AND LOANS FOR REHABILITATION OF
MULTIFAMILY PROJECTS.—’’;
(2) in paragraph (1), by inserting ‘‘and loans’’
after ‘‘grants’’;
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(3) in paragraph (2)—
(A) in the matter preceding subparagraph
(A), by striking ‘‘capital grant assistance under
this subsection’’ and inserting ‘‘capital assist-
ance under this subsection under a grant or
loan only’’; and
(B) in subparagraph (D)(i), by striking
‘‘capital grant assistance’’ and inserting ‘‘cap-
ital assistance under this subsection from a
grant or loan (as appropriate)’’;
(4) in paragraph (3), by striking all of the mat-
ter that precedes subparagraph (A) and inserting
the following:
‘‘(3) ELIGIBLE USES.—Amounts from a grant
or loan under this subsection may be used only for
projects eligible under paragraph (2) for the pur-
poses of—’’;
(5) in paragraph (4)—
(A) by striking the paragraph heading and
inserting ‘‘GRANT
AND
LOAN
AGREEMENTS’’;
and
(B) by inserting ‘‘or loan’’ after ‘‘grant’’,
each place it appears;
(6) in paragraph (5), by inserting ‘‘or loan’’
after ‘‘grant’’, each place it appears;
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(7) in paragraph (6), as amended by the pre-
ceding provisions of this Act, by adding at the end
the following new subparagraph:
‘‘(D) LOANS.—In making loans under this
subsection using the amounts that the Sec-
retary has recaptured from contracts for inter-
est reduction payments pursuant to clause (i)
or (ii) of paragraph (7)(A)—
‘‘(i) the Secretary may use such re-
captured amounts for costs (as such term
is defined in section 502 of the Congres-
sional Budget Act of 1974) of such loans;
‘‘(ii) the Secretary may make loans in
any fiscal year only to the extent or in
such amounts that amounts are used
under clause (i) to cover costs of such
loans; and
‘‘(iii) the authority of the Secretary to
enter into commitments to make such
loans shall be effective for any fiscal year
only to the extent that: (I) there is enacted
in advance, in an appropriations Act, a
maximum limitation on the aggregate prin-
cipal amount of such commitments for
such fiscal year; and (II) the aggregate
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principal amount of such commitments en-
tered into by the Secretary does not exceed
such maximum amount.’’;
(8) by redesignating paragraphs (5) and (6) (as
amended by the preceding provisions of this sub-
section) as paragraphs (6) and (7); and
(9) by inserting after paragraph (4) the fol-
lowing new paragraph:
‘‘(5) 
LOAN
TERMS.—A 
loan 
under 
this
subsection—
‘‘(A) shall provide amounts for the eligible
uses under paragraph (3) in a single loan dis-
bursement of loan principal;
‘‘(B) shall be repaid, as to principal and
interest, on behalf of the borrower using
amounts recaptured from contracts for interest
reduction payments pursuant to clause (i) or
(ii) of paragraph (7)(A);
‘‘(C) shall have a term to maturity of a du-
ration not shorter than the remaining period for
which the interest reduction payments for the
insured mortgage or mortgages that fund re-
payment of the loan would have continued after
extinguishment or writedown of the mortgage
(in accordance with the terms of such mortgage
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in effect immediately before such extinguish-
ment or writedown);
‘‘(D) shall bear interest at a rate, as deter-
mined by the Secretary of the Treasury, that is
based upon the current market yields on out-
standing marketable obligations of the United
States having comparable maturities; and
‘‘(E) shall involve a principal obligation of
an amount not exceeding the amount that can
be repaid using amounts described in subpara-
graph (B) over the term determined in accord-
ance with subparagraph (C), with interest at
the rate determined under subparagraph (D).’’.
(b) ELIGIBILITY OF NONINSURED PROJECTS FOR
IRP CAPITAL GRANTS.—Section 236(s)(2) of the Na-
tional Housing Act (12 U.S.C. 1715z–1(s)(2)(A)) is
amended by striking subparagraph (A) and inserting the
following new subparagraph:
‘‘(A) if the project is federally assisted
housing described in subparagraph (B), (C),
(D), (E), (F) or (G) of section 683(2) of the
Housing and Community Development Act of
1992 (42 U.S.C. 13641(2));’’.
(c) IRP CAPITAL GRANTS REQUIREMENT FOR EX-
TENSION
OF LOW-INCOME AFFORDABILITY REQUIRE-
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MENTS.—Section 236(s) of the National Housing Act (12
U.S.C. 1715z–1(s)) is amended—
(1) in paragraph (2)—
(A) by redesignating subparagraphs (C)
and (D), as amended by the preceding provi-
sions of this section, as subparagraphs (D) and
(E), respectively; and
(B) by inserting after subparagraph (B)
the following new subparagraph:
‘‘(C) the project owner enters into such
binding commitments as the Secretary may re-
quire (which shall be applicable to any subse-
quent owner) to ensure that the owner will con-
tinue to operate the project in accordance with
all low-income affordability restrictions for the
project in connection with the Federal assist-
ance for the project for a period having a dura-
tion that is not less than the period referred to
in paragraph (5)(C);’’; and
(2) in paragraph (4)(B), by inserting ‘‘and con-
sistent with paragraph (2)(C)’’ before the period at
the end.
SEC. 406. TECHNICAL ASSISTANCE.
Section 514(f)(3) of the Multifamily Assisted Hous-
ing Reform and Affordability Act of 1997 (42 U.S.C.
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1437f note) is amended by inserting after ‘‘new owners)’’
the following: ‘‘, for technical assistance for preservation
of low-income housing for which project-based rental as-
sistance is provided at below market rent levels and may
not be renewed (including transfer of developments to ten-
ant groups, nonprofit organizations, and public entities),’’.
SEC. 407. TERMINATION OF SECTION 8 CONTRACT AND DU-
RATION OF RENEWAL CONTRACT.
Section 8(c)(8) of the United States Housing Act of
1937 (42 U.S.C. 1437f(c)(8)) is amended—
(1) in subparagraph (A)—
(A) by striking ‘‘terminating’’ and insert-
ing ‘‘termination of’’; and
(B) by striking the third comma of the
first sentence and all that follows through the
end of the subparagraph and inserting the fol-
lowing: ‘‘. The notice shall also include a state-
ment that, if the Congress makes funds avail-
able, the owner and the Secretary may agree to
a renewal of the contract, thus avoiding termi-
nation, and that in the event of termination the
Department of Housing and Urban Develop-
ment will provide tenant-based rental assistance
to all eligible residents, enabling them to choose
the place they wish to rent, which is likely to
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include the dwelling unit in which they cur-
rently reside. Any contract covered by this
paragraph that is renewed may be renewed for
a period of up to one year or any number or
years, with payments subject to the availability
of appropriations for any year.’’;
(2) by striking subparagraph (B);
(3) in subparagraph (C)—
(A) by striking the first sentence;
(B) by striking ‘‘in the immediately pre-
ceding sentence’’;
(C) by striking ‘‘180-day’’ each place it ap-
pears;
(D) by striking ‘‘such period’’ and insert-
ing ‘‘one year’’; and
(E) by striking ‘‘180 days’’ and inserting
‘‘one year’’; and
(4) by redesignating subparagraphs (C), (D),
and (E), as amended by the preceding provisions of
this subsection, as subparagraphs (B), (C), and (D),
respectively.
SEC. 408. ENHANCED VOUCHER ELIGIBILITY AND BENE-
FITS.
(a) ELIGIBILITY OF RESIDENTS OF FLEXIBLE SUB-
SIDY PROJECTS.—Section 201 of the Housing and Com-
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munity Development Amendments of 1978 (12 U.S.C.
1715z–1a) is amended by adding at the end the following
new subsection:
‘‘(p) ENHANCED VOUCHER ELIGIBILITY.—Notwith-
standing any other provision of law, any project that re-
ceives or has received assistance under this section and
which is the subject of a transaction under which the
project is preserved as affordable housing, as determined
by the Secretary, shall be considered eligible low-income
housing under section 229 of the Low-Income Housing
Preservation and Resident Homeownership Act of 1990
(12 U.S.C. 4119) for purposes of eligibility of residents
of such project for enhanced voucher assistance provided
in accordance with the ‘Preserving Existing Housing In-
vestment’ account in the Departments of Veterans Affairs
and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1997 (Public Law 104–204;
110 Stat. 2884) and pursuant to such provision or any
other subsequently enacted provision of law.’’.
(b) EFFECT OF RENTAL INCREASES ON OTHER EN-
HANCED VOUCHERS.—To the extent that amounts are
provided in advance in appropriations Acts for enhanced
vouchers (including amendments and renewals) pursuant
to the authority under the heading ‘‘Preserving Existing
Housing Investment’’ in the Departments of Veterans Af-
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fairs and Housing and Urban Development, and Inde-
pendent Agencies Appropriations Act, 1997 (Public Law
104–204; 110 Stat. 2884), each family receiving such en-
hanced voucher assistance after the date of prepayment
or voluntary termination which continues to reside in the
housing occupied on the date of prepayment or voluntary
termination and the rent of which, absent enhanced vouch-
er assistance, would exceed the greater of 30 percent of
adjusted income or the rent paid by the family on such
date, may continue to receive such enhanced voucher as-
sistance indefinitely, subject to other requirements of that
authority, as amended: Provided, That rent resulting from
rent increases occurring later than 1 year after the date
of prepayment or voluntary termination may be used to
increase the applicable payment standard: Provided fur-
ther, That the rent for the dwelling unit is reasonable in
comparison to the rent charged for comparable dwelling
units in the private, unassisted local market.
SEC. 409. ENHANCED DISPOSITION AUTHORITY.
Section 204 of the Departments of Veterans Affairs
and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1997 (12 U.S.C. 1715z–
11a) is amended—
(1) by striking ‘‘and 1999’’ and inserting
‘‘1999, and 2000’’; and
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(2) by striking ‘‘or demolition’’ and inserting ‘‘,
demolition, or construction on the properties (which
shall be eligible whether vacant or occupied)’’.
SEC. 410. ASSISTANCE FOR NONPROFIT PURCHASERS PRE-
SERVING AFFORDABLE HOUSING.
(a) CONGRESSIONAL FINDINGS.—The Congress finds
that—
(1) a substantial number of existing federally
assisted or federally insured multifamily properties
are at risk of being lost from the affordable housing
inventory of the Nation through market rate conver-
sion, deterioration, or demolition;
(2) it is in the interests of the Nation to en-
courage transfer of control of such properties to
competent national, regional, and local nonprofit en-
tities and intermediaries whose missions involve
maintaining the affordability of such properties;
(3) such transfers may be inhibited by a short-
age of such entities that are appropriately capital-
ized; and
(4) the Nation would be well served by pro-
viding assistance to such entities to aid in accom-
plishing this purpose.
(b) GRANTS.—The Secretary of Housing and Urban
Development may make grants, to the extent amounts are
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made available for such grants, to eligible entities under
subsection (c) for use only for operational, working cap-
ital, and organizational expenses of such entities and ac-
tivities by such entities to acquire eligible affordable hous-
ing for the purpose of ensuring that the housing will re-
main affordable, as the Secretary considers appropriate,
for low-income or very low-income families (including el-
derly persons).
(c) ELIGIBLE ENTITIES.—The Secretary shall estab-
lish standards for eligible entities under this subsection,
which shall include requirements that to be considered an
eligible entity for purposes of this section an entity shall—
(1) be a nonprofit organization (as such term is
defined in 104 of the Cranston-Gonzalez National
Affordable Housing Act);
(2) have among its purposes maintaining the
affordability to low-income or very low-income fami-
lies of multifamily properties that are at risk of loss
from the inventory of housing that is affordable to
low-income or very low-income families; and
(3) demonstrate need for assistance under this
section for the purposes under subsection (b), expe-
rience in carrying out activities referred to in such
subsection, and capability to carry out such activi-
ties.
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(d) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) ELIGIBLE
AFFORDABLE
HOUSING.—The
term ‘‘eligible affordable housing’’ means housing
that—
(A) consists of more than four dwelling
units;
(B) is insured or assisted under a program
of the Department of Housing and Urban De-
velopment or the Department of Agriculture
under which the property is subject to limita-
tions on tenant rents, rent contributions, or in-
comes; and
(C) is at risk, as determined by the Sec-
retary, of termination of any of the limitations
referred to in subparagraph (B).
(2) LOW-INCOME FAMILIES; VERY LOW-INCOME
FAMILIES.—The terms ‘‘low-income families’’ and
very low-income families’’ have the meanings given
such terms in section 3(b) of the United States
Housing Act of 1937.
(e) 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 2000, 2001, and 2002.
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TITLE 
V—MORTGAGE 
INSUR-
ANCE FOR HEALTH CARE FA-
CILITIES AND HOME EQUITY
CONVERSION MORTGAGES
SEC. 501. REHABILITATION OF EXISTING HOSPITALS, NURS-
ING HOMES, AND OTHER FACILITIES.
Section 223(f) of the National Housing Act (12
U.S.C. 1715n(f)) is amended—
(1) in paragraph (1), by inserting ‘‘existing
health care facility,’’ after ‘‘existing board and care
home,’’; and
(2) in paragraph (4)—
(A) by inserting ‘‘existing health care facil-
ity,’’ after ‘‘board and care home,’’ each place
it appears;
(B) in subparagraph (A), by inserting be-
fore the semicolon at the end the following: ‘‘,
which refinancing, in the case of a loan on a
hospital, home, or facility that is within 5 years
of maturity, shall include a mortgage made to
prepay such loan;’’;
(C) in subparagraph (B), by inserting after
‘‘indebtedness’’ the following: ‘‘, pay the costs
of any repairs, maintenance, improvements, or
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additional equipment which may be approved by
the Secretary,’’; and
(D) in subparagraph (D)—
(i) by inserting ‘‘existing’’ before ‘‘in-
termediate care facility’’; and
(ii) by inserting ‘‘existing’’ before
‘‘board and care home’’.
SEC. 502. NEW HEALTH CARE FACILITIES.
Section 232 of the National Housing Act (12 U.S.C.
1715w) is amended—
(1) in subsection (a), by adding at the end the
following new paragraph:
‘‘(4) The development of health care facilities
for the care and treatment of the elderly and other
persons in need of health care and related services,
but who are not acutely ill and do not require hos-
pital care, and the support of health care facilities
which provide such health care and related services
(including those which support hospitals, as defined
in section 242(b)).’’;
(2) in subsection (b)—
(A) in paragraph (4), by inserting after
the first period the following new sentence:
‘‘Such term includes a parity first mortgage or
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parity first deed of trust, subject to such terms
and conditions as the Secretary may provide.’’;
(B) in paragraph (6)—
(i) by striking subparagraph (A) and
inserting the following new subparagraph:
‘‘(A) meets all licensing and regulatory re-
quirements of the State, or if there is no State
law providing for such licensing and regulation
by the State, meets all licensing and regulatory
requirements of the municipality or other polit-
ical subdivision in which the facility is located,
or, in the absence of any such requirements,
meets any requirements of the Secretary for
such purposes;’’; and
(ii) in subparagraph (C), by striking
‘‘and’’ at the end;
(C) in paragraph (7), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(D) by adding at the end the following new
paragraph:
‘‘(8) the term ‘health care facility’ means a
facility—
‘‘(A) providing integrated health care deliv-
ery services designed and operated to provide
medical, convalescent, skilled and intermediate
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nursing, board and care services, assisted living,
rehabilitation, custodial, personal care services,
or any combination thereof;
‘‘(B) designed, in whole or in part, to pro-
vide a continuum of care, as determined by the
Secretary;
‘‘(C) providing clinical services, out patient
services, including community health services
and medical practice facilities and group prac-
tice facilities to persons not in need of the serv-
ices rendered in other facilities insurable under
this title; or
‘‘(D)(i) designed, in whole or in part—
‘‘(I) to provide health care services
which are not acute care in nature to per-
sons (including the elderly and infirm); or
‘‘(II) to provide supportive or ancil-
lary services to hospitals (as defined in sec-
tion 242(b)), which services may include
services provided by special use health care
facilities, professional office buildings, lab-
oratories, administrative offices, and other
facilities supportive or ancillary to health
care delivery; and
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‘‘(ii) that meet standards acceptable to the
Secretary, which may include standards gov-
erning licensure or State or local approval and
regulation of a mortgagor; or
‘‘(E) that provides any combination of the
services 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 ‘‘health care facility,’’
after ‘‘assisted living facility,’’ the first two
places it 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 health care facility’’;
(B) in paragraph (2), in the matter pre-
ceding subparagraph (A), by inserting after
‘‘including’’ the following: ‘‘or a public body,
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public agency, or public corporation eligible
under this section’’;
(C) in paragraph (4)(A)—
(i) in the first sentence—
(I) by inserting ‘‘, and health
care facilities which include such
nursing home and intermediate care
facilities,’’ before ‘‘, the Secretary’’;
(II) by inserting ‘‘or the portion
of a health care facility providing such
services’’ before ‘‘covered by the mort-
gage,’’; and
(III) by inserting ‘‘or for such
nursing or intermediate care services
within a health care facility’’ before ‘‘,
and (ii)’’;
(ii) in the second sentence, by insert-
ing ‘‘(which may be within a health care
facility)’’ after ‘‘home and facility’’; and
(iii) in the third sentence—
(I) by striking ‘‘mortgage under
this section’’ and all that follows
through ‘‘feasibility’’ and inserting the
following: ‘‘such mortgage under this
section unless (i) the proposed mort-
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gagor or applicant for the mortgage
insurance for the home or facility or
combined home or facility, or the
health care facility containing such
services, has commissioned and paid
for the preparation of an independent
study of market need for the project’’;
(II) in clause (i)(II), by striking
‘‘and its relationship to, other health
care facilities and’’ and inserting ‘‘or
such facilities within a health care fa-
cility, and its relationship to, other fa-
cilities providing health care’’;
(III) in clause (i)(IV), by striking
‘‘in the event the State does not pre-
pare the study,’’; and
(IV) in clause (i)(IV), by striking
‘‘the State or’’;
(iv) by striking the penultimate sen-
tence and inserting the following new sen-
tences: ‘‘A study commissioned or under-
taken by the State in which the facility will
be located shall be considered to satisfy
such market study requirement. The pro-
posed mortgagor or applicant may reim-
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burse the State for the cost of an inde-
pendent study referred to in the preceding
sentence.’’; and
(v) in the last sentence—
(I) by inserting ‘‘the proposed
mortgagor or applicant for mortgage
insurance may obtain from’’ after ‘‘10
individuals,’’;
(II) by striking ‘‘may’’ and in-
serting ‘‘and’’; and
(III) by inserting a comma before
‘‘written support’’; and
(D) in paragraph (4)(C)(iii), by striking
‘‘the appropriate State’’ and inserting ‘‘any ap-
propriate’’; and
(4) in subsection (i)(1) by inserting ‘‘health
care facilities,’’ after ‘‘assisted living facilities,’’.
SEC. 503. HOSPITALS AND HOSPITAL-BASED HEALTH CARE
FACILITIES.
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;
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(ii) by striking subparagraph (B);
(iii) in subparagraph (C), by striking
the period at the end and inserting ‘‘;
and’’; and
(iv) by redesignating subparagraph
(C) as subparagraph (B);
(B) in paragraph (2), by striking ‘‘respect-
fully’’ and all that follows and inserting ‘‘given
such terms in section 207(a), except that the
term ‘mortgage’ shall include a parity first
mortgage or parity first deed of trust, subject
to such terms and conditions as the Secretary
may provide.’; and
(C) by adding at the end the following new
paragraph:
‘‘(3) the term ‘health care facility’ has the
meaning given such term in section 232(b).’’;
(2) in subsection (d)—
(A) in the matter preceding paragraph (1),
by inserting after ‘‘operation,’’ the following:
‘‘or which covers a health care facility owned or
to be owned by an applicant or proposed mort-
gagor which also owns a hospital, including
equipment to be used in its operation,’’;
(B) in paragraph (1)—
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(i) in the first sentence, by inserting
before the period at the end the following:
‘‘and who, in the case of a mortgage cov-
ering a health care facility, is also the
owner of a hospital facility’’; and
(ii) by adding at the end the following
new sentence: ‘‘A mortgage covering a
health care facility may only cover the
property on which the eligible facility will
be located.’’;
(C) in paragraph (2)(A) by inserting ‘‘or
health care facility’’ before the comma; and
(D) in paragraph (4)—
(i) in the first sentence, by inserting
‘‘for a hospital’’ after ‘‘any mortgage’’;
(ii) by striking the third sentence and
inserting the following: ‘‘If no such State
agency exists, or if the State agency exists
but is not empowered to provide a certifi-
cation that there is a need for the hospital
as set forth in clause (A) of the first sen-
tence, the Secretary shall not insure any
such mortgage under this section unless:
(A) the proposed mortgagor or applicant
for the hospital has commissioned and paid
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for the preparation of an independent
study of market need for the proposed
project that: (i) is prepared in accordance
with the principles established by the Sec-
retary, in consultation with the Secretary
of Health and Human Services (to the ex-
tent the Secretary of Housing and Urban
Development considers appropriate); (ii)
assesses, on a marketwide basis, the im-
pact of the proposed hospital on, and its
relationship to, other facilities providing
health care services, the percentage of ex-
cess beds, demographic projections, alter-
native health care delivery systems, and
the reimbursement structure of the hos-
pital; (iii) is addressed to and is acceptable
to the Secretary in form and substance;
and (iv) is prepared by a financial consult-
ant selected by the proposed mortgagor or
applicant and approved by the Secretary;
and (B) the State complies with the other
provisions of this paragraph that would
otherwise be required to be met by a State
agency designated in accordance with sec-
tion 604(a)(1) or section 1521 of the Pub-
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lic Health Service Act. A study commis-
sioned or undertaken by the State in which
the hospital will be located shall be consid-
ered to satisfy such market study require-
ment.’’; and
(iii) in the last sentence, by striking
‘‘feasibility’’; and
(3) in subsection (f), by inserting ‘‘and public
health care facilities’’ after ‘‘public hospitals’’.
SEC. 504. HOME EQUITY CONVERSION MORTGAGES.
(a) INSURANCE FOR MORTGAGES TO REFINANCE EX-
ISTING HECMS.—
(1) IN GENERAL.—Section 255 of the National
Housing Act (12 U.S.C. 1715z–20) is amended—
(A) by redesignating subsection (k) as sub-
section (l); and
(B) by inserting after subsection (j) the
following new subsection:
‘‘(k) INSURANCE AUTHORITY FOR REFINANCINGS.—
‘‘(1) IN GENERAL.—The Secretary may, upon
application by a mortgagee, insure under this sub-
section any mortgage given to refinance an existing
home equity conversion mortgage insured under this
section.
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‘‘(2) ANTI-CHURNING DISCLOSURE.—The Sec-
retary shall, by regulation, require that the mort-
gagee of a mortgage insured under this subsection,
provide to the mortgagor, within an appropriate time
period and in a manner established in such regula-
tions, a good faith estimate of: (A) the total cost of
the refinancing; and (B) the increase in the mortga-
gor’s principal limit as measured by the estimated
initial principal limit on the mortgage to be insured
under this subsection less the current principal limit
on the home equity conversion mortgage that is
being refinanced and insured under this subsection.
‘‘(3) 
WAIVER
OF
COUNSELING
REQUIRE-
MENT.—The mortgagor under a mortgage insured
under this subsection may waive the applicability,
with respect to such mortgage, of the requirements
under subsection (d)(2)(B) (relating to third party
counseling), but only if—
‘‘(A) the mortgagor has received the disclo-
sure required under paragraph (2);
‘‘(B) the increase in the principal limit de-
scribed in paragraph (2) exceeds the amount of
the total cost of refinancing (as described in
such paragraph) by an amount to be deter-
mined by the Secretary; and
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‘‘(C) the time between the closing of the
original home equity conversion mortgage that
is refinanced through the mortgage insured
under this subsection and the application for a
refinancing mortgage insured under this sub-
section does not exceed 5 years.
‘‘(4) CREDIT FOR PREMIUMS PAID.—Notwith-
standing section 203(c)(2)(A), the Secretary may re-
duce the amount of the single premium payment
otherwise collected under such section at the time of
the insurance of a mortgage refinanced and insured
under this subsection. The amount of the single pre-
mium for mortgages refinanced under this sub-
section shall be determined by the Secretary based
on the actuarial study required under paragraph (5).
‘‘(5) ACTUARIAL STUDY.—Not later than 180
days after the date of the enactment of this sub-
section, the Secretary shall conduct an actuarial
analysis to determine the adequacy of the insurance
premiums collected under the program under this
subsection with respect to—
‘‘(A) a reduction in the single premium
payment collected at the time of the insurance
of a mortgage refinanced and insured under
this subsection;
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‘‘(B) the establishment of a single national
limit on the benefits of insurance under sub-
section (g) (relating to limitation on insurance
authority); and
‘‘(C) the combined effect of reduced insur-
ance premiums and a single national limitation
on insurance authority.
‘‘(6) FEES.—The Secretary may establish a
limit on the origination fee that may be charged to
a mortgagor under a mortgage insured under this
subsection, except that such limitation shall provide
that the origination fee may be fully financed with
the mortgage and shall include any fees paid to cor-
respondent mortgagees approved by the Secretary.
The Secretary shall prohibit the charging of any
broker fees in connection with mortgages insured
under this subsection.’’.
(2) REGULATIONS.—Notwithstanding sections 2
and 3 of the Preserving Affordable Housing for Sen-
ior Citizens and Families into the 21st Century Act,
the Secretary shall issue any final regulations nec-
essary to implement the amendments made by para-
graph (1) of this subsection, which shall take effect
not later than the expiration of the 180-day period
beginning on the date of the enactment of this Act.
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The regulations shall be issued after notice and op-
portunity for public comment in accordance with the
procedure under section 553 of title 5, United States
Code, applicable to substantive rules (notwith-
standing subsections (a)(2), (b)(B), and (d)(3) of
such section).
(b) STUDY
OF
SINGLE
NATIONAL
MORTGAGE
LIMIT.—The Secretary of Housing and Urban Develop-
ment shall conduct an actuarially based study of the ef-
fects of establishing, for mortgages insured under section
255 of the National Housing Act (12 U.S.C. 1715z–20),
a single maximum mortgage amount limitation in lieu of
applicability of section 203(b)(2) of such Act (12 U.S.C.
1709(b)(2)). The study shall—
(1) examine the effects of establishing such lim-
itation at different dollar amounts; and
(2) examine the effects of such various limita-
tions on—
(A) the risks to the General Insurance
Fund established under section 519 of such
Act;
(B) the mortgage insurance premiums that
would be required to be charged to mortgagors
to ensure actuarial soundness of such Fund;
and
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(C) take into consideration the various ap-
proaches to providing credit to borrowers who
refinance home equity conversion mortgages in-
sured under section 255 of such Act.
Not later than 180 days after the date of the enactment
of this Act, the Secretary shall complete the study under
this subsection and submit a report describing the study
and the results of the study to the Committee on Banking
and Financial Services of the House of Representatives
and to the Committee on Banking, Housing, and Urban
Affairs of the Senate.
Passed the House of Representatives September 27,
1999.
Attest:
JEFF TRANDAHL,
Clerk.