237
(E) by inserting at the end the following
new clauses:
‘‘(v) the provision of outreach activities designed
to improve the access of low- and moderate-income
households to homeownership and sources of mortgage
credit;
‘‘(vi) the provision of counseling to applicants
for and recipients of tenant-based assistance to enable
such families to move to areas of mixed incomes; and
‘‘(vii) counseling and advice to tenants and
homeowners regarding understanding financial prac-
tices, matters, and transactions commonly engaged in
by, or involving, tenants and homeowners, including
activities and services provided by banks and other fi-
nancial institutions, extension of credit, standard
lending practices, checking accounts and check cash-
ing, and savings accounts, which shall be made avail-
able in such manners and languages appropriate for
low-income and disadvantaged families residing in
the area in which the entity providing the counseling
and advice is located.’’;
(2) in paragraph (2)—
(A) by striking ‘‘The’’ and inserting ‘‘ELI-
GIBLE HOMEOWNERS.—The’’; and
238
(B) in the second sentence, by inserting ‘‘or
consortia of organizations’’ after ‘‘organiza-
tions’’; and
(3) by inserting after paragraph (2) the follow-
ing new paragraphs:
‘‘(3) HOMEOWNERSHIP COUNSELING.—The Secretary
of Housing and Urban Development may contract with na-
tional, State, or community-based entities, and consortia
of such entities, and local public or private organizations
(including public housing agencies), to carry out activities
under paragraph (1)(v). Contractors shall be selected on a
competitive basis, in accordance with selection criteria de-
termined by the Secretary. The contractors shall carry out
activities prescribed by the Secretary, including activities
such as—
‘‘(A) assisting homebuyers by working with
mortgage lending entities to make mortgage credit
available to low- and moderate-income homebuyers;
‘‘(B) leveraging Federal funds with other sources
of funding to support activities under its counseling
program, including leveraging private, community-
based resources for the purpose of assisting prospec-
tive mortgagors achieve homeownership;
‘‘(C) conducting outreach and marketing to pro-
spective homebuyers, particularly homebuyers in tar-
239
geted neighborhoods with a high proportion of low-
and moderate-income and minority renter households;
‘‘(D) coordinating a prepurchase homeownership
strategy that includes linking other counseling provid-
ers and community-based organizations approved by
the Secretary, assisting prospective homebuyers to re-
pair credit, educating potential homebuyers on the re-
quirements of homeownership, providing technical as-
sistance, assisting in the packaging of mortgage loan
applications, and matching a family’s resources with
appropriate government and private sector home-
ownership assistance programs; and
‘‘(E) creating post-purchase counseling programs
that include default- prevention counseling to assist
homebuyers to retain their homes.
‘‘(4) RENTAL COUNSELING.—The Secretary of Housing
and Urban Development may contract with national, State,
or community-based entities, and consortia of such entities,
and local public or private organizations (including public
housing agencies), to carry out activities under paragraph
(1)(vi). Contractors shall be selected on a competitive basis,
in accordance with selection criteria determined by the Sec-
retary. The contractors shall carry out activities prescribed
by the Secretary, including activities such as—
240
‘‘(A) advising families on strategies for obtaining
appropriate housing;
‘‘(B) providing transportation assistance and
other services to give families access to areas without
high concentrations of persons living in poverty;
‘‘(C) continuing advice and counseling to assist
families after moving to areas without high con-
centrations of persons living in poverty; and
‘‘(D) undertaking aggressive outreach to poten-
tial owners to expand the availability of housing in
areas without high concentrations of persons living in
poverty.
Each entity receiving assistance pursuant to this para-
graph shall make counseling and assistance under this
paragraph available to low-income families who are re-
ferred to the entity pursuant to section 8(s)(2) of the United
States Housing Act of 1937, including counseling and as-
sistance regarding housing opportunities in the area of ju-
risdiction of the public housing agency involved and assist-
ance in obtaining new rental residences in areas within
such jurisdiction not having high concentrations of persons
living in poverty.’’.
(d) NOTIFICATION.—Section 106(c)(5)(C) of the Hous-
ing and Urban Development Act of 1968 is amended by
adding at the end the following new flush sentence:
241
‘‘Except as provided in clauses (i) and (ii), this
subparagraph may not be construed to apply to
any other loan for which the borrower is a vet-
eran.’’.
Subtitle F—Other Programs
SEC. 181. COMMUNITY PARTNERSHIPS AGAINST CRIME.
(a) SHORT TITLE, PURPOSES, AND AUTHORITY TO
MAKE GRANTS.—Chapter 2 of subtitle C of title V of the
Anti-Drug Abuse Act of 1988 (42 U.S.C. 11901 et seq.) is
amended by striking the chapter heading and all that fol-
lows through section 5123 and inserting the following:
‘‘CHAPTER 2—COMMUNITY PARTNERSHIPS
AGAINST CRIME
‘‘SEC. 5121. SHORT TITLE.
‘‘This chapter may be cited as the ‘Community Part-
nerships Against Crime Act of 1994’.
‘‘SEC. 5122. PURPOSES.
‘‘The purposes of this chapter are to—
‘‘(1) improve the quality of life for the vast ma-
jority of law-abiding public housing residents by re-
ducing the levels of fear, violence, and crime in their
communities;
‘‘(2) substantially expand and enhance the Fed-
eral Government’s commitment to eliminating crime
242
in and around public housing and other federally as-
sisted low-income housing;
‘‘(3) broaden the scope of the Public and Assisted
Housing Drug Elimination Act of 1990 to apply to
all types of crime, and not simply crime that is drug-
related;
‘‘(4) encourage the involvement of a broad range
of community-based groups and residents of neighbor-
ing housing that is owned or assisted by the Secretary
in the development and implementation of anti-crime
plans;
‘‘(5) reduce crime and disorder in and around
public housing through the expansion of community-
oriented policing activities and problem solving;
‘‘(6) provide training, information services, and
other technical assistance to program participants;
and
‘‘(7) establish a standardized assessment system
to evaluate need among public housing agencies and
to measure progress in reaching crime reduction
goals.
‘‘SEC. 5123. AUTHORITY TO MAKE GRANTS.
‘‘The Secretary of Housing and Urban Development
may make grants in accordance with the provisions of this
chapter for use in eliminating crime in and around public
244
(E) by striking paragraph (7) and inserting
the following new paragraphs:
‘‘(7) providing funding to nonprofit public hous-
ing resident management corporations and resident
councils to develop security and crime prevention pro-
grams involving site residents;
‘‘(8) the employment or utilization of one or
more individuals, including law enforcement officers,
made available by contract or other cooperative ar-
rangement with State or local law enforcement agen-
cies, to engage in community- and problem-oriented
policing involving interaction with members of the
community in proactive crime control and prevention
activities;
‘‘(9) programs and activities for or involving
youth, including training, education, recreation and
sports, career planning, and entrepreneurship and
employment activities and after school and cultural
programs; and
‘‘(10) service programs for residents that address
the contributing factors of crime, including programs
for job training, education, drug and alcohol treat-
ment, and other appropriate social services.’’.
245
(2) 
OTHER
PHA-OWNED
HOUSING.—Section
5124(b) of the Anti-Drug Abuse Act of 1988 (42
U.S.C. 11903(b)) is amended—
(A) in the matter preceding paragraph
(1)—
(i) by striking ‘‘drug-related crime in’’
and inserting ‘‘crime in and around’’; and
(ii) 
by 
striking 
‘‘paragraphs 
(1)
through (7)’’ and inserting ‘‘paragraphs (1)
through (10)’’; and
(B) in paragraph (2), by striking ‘‘drug-re-
lated’’ and inserting ‘‘criminal’’.
(c) GRANT PROCEDURES.—Section 5125 of the Anti-
Drug Abuse Act of 1988 (42 U.S.C. 11904) is amended to
read as follows:
‘‘SEC. 5125. GRANT PROCEDURES.
‘‘(a) PHA’S WITH 250 OR MORE UNITS.—
‘‘(1) GRANTS.—In each fiscal year, the Secretary
shall make a grant under this chapter from any
amounts available under section 5131(b)(1) for the
fiscal year to each of the following public housing
agencies:
‘‘(A) NEW APPLICANTS.—Each public hous-
ing agency that owns or operates 250 or more
public housing dwelling units and has—
246
‘‘(i) submitted an application to the
Secretary for a grant for such fiscal year,
which includes a 5-year crime deterrence
and reduction plan under paragraph (2);
and
‘‘(ii) had such application and plan
approved by the Secretary.
‘‘(B) RENEWALS.—Each public housing
agency that owns or operates 250 or more public
housing dwelling units and for which—
‘‘(i) a grant was made under this
chapter for the preceding Federal fiscal
year;
‘‘(ii) the term of the 5-year crime de-
terrence and reduction plan applicable to
such grant includes the fiscal year for which
the grant under this subsection is to be
made; and
‘‘(iii) the Secretary has determined,
pursuant to a performance review under
paragraph (4), that during the preceding
fiscal year the agency has substantially ful-
filled the requirements under subparagraphs
(A) and (B) of paragraph (4).
247
‘‘(2) 5-YEAR CRIME DETERRENCE AND REDUC-
TION PLAN.—Each application for a grant under this
subsection shall contain a 5-year crime deterrence
and reduction plan. The plan shall describe, for the
public housing agency submitting the plan—
‘‘(A) the nature of the crime problem in
public housing owned or operated by the public
housing agency;
‘‘(B) the building or buildings of the public
housing agency affected by the crime problem;
‘‘(C) the impact of the crime problem on
residents of such building or buildings; and
‘‘(D) the actions to be taken during the term
of the plan to reduce and deter such crime, which
shall include actions involving residents, law en-
forcement, and service providers.
The term of a plan shall be the period consisting of
5 consecutive fiscal years, which begins with the first
fiscal year for which funding under this chapter is
provided to carry out the plan.
‘‘(3) AMOUNT.—In any fiscal year, the amount
of the grant for a public housing agency receiving a
grant pursuant to paragraph (1) shall be the amount
that bears the same ratio to the total amount made
available under section 5131(b)(1) as the total num-
248
ber of public dwelling units owned or operated by
such agency bears to the total number of dwelling
units owned or operated by all public housing agen-
cies that own or operate 250 or more public housing
dwelling units that are approved for such fiscal year.
‘‘(4) PERFORMANCE
REVIEW.—For each fiscal
year, the Secretary shall conduct a performance re-
view of the activities carried out by each public hous-
ing agency receiving a grant pursuant to this sub-
section to determine whether the agency—
‘‘(A) has carried out such activities in a
timely manner and in accordance with its 5-
year crime deterrence and reduction plan; and
‘‘(B) has a continuing capacity to carry out
such plan in a timely manner.
‘‘(5) SUBMISSION OF APPLICATIONS.—The Sec-
retary shall establish such deadlines and requirements
for submission of applications under this subsection
as the Secretary determines appropriate for timely
and orderly allocation and disbursement of amounts
made available for grants under this subsection.
‘‘(6) REVIEW
AND
DETERMINATION.—The Sec-
retary shall review each application submitted under
this subsection upon submission and shall approve the
application unless the application and the 5-year
249
crime deterrence and reduction plan are inconsistent
with the purposes of this chapter or any requirements
established by the Secretary or the information in the
application or plan is not substantially complete.
Upon approving or determining not to approve an
application and plan submitted under this subsection,
the Secretary shall notify the public housing agency
submitting the application and plan of such approval
or disapproval.
‘‘(7) DISAPPROVAL
OF
APPLICATIONS.—If the
Secretary notifies an agency that the application and
plan of the agency is not approved, not later than the
expiration of the 15-day period beginning upon such
notice of disapproval, the Secretary shall also notify
the agency, in writing, of the reasons for the dis-
approval, the actions that the agency could take to
comply with the criteria for approval, and the dead-
lines for such actions.
‘‘(8) FAILURE TO APPROVE OR DISAPPROVE.—If
the Secretary fails to notify an agency of approval or
disapproval of an application and plan submitted
under this subsection before the expiration of the 60-
day period beginning upon the submission of the plan
or fails to provide notice under paragraph (7) within
the 15-day period under such paragraph to an agency
250
whose application has been disapproved, the applica-
tion and plan shall be considered to have been ap-
proved for purposes of this section.
‘‘(b) PHA’S WITH FEWER THAN 250 UNITS AND OWN-
ERS OF FEDERALLY ASSISTED LOW-INCOME HOUSING.—
‘‘(1) APPLICATIONS AND PLANS.—To be eligible
to receive a grant under this chapter, a public hous-
ing agency that owns or operates fewer than 250 pub-
lic housing dwelling units or an owner of federally as-
sisted low-income housing shall submit an application
to the Secretary at such time, in such manner, and
accompanied by such additional information as the
Secretary may require. The application shall include
a plan for addressing the problem of crime in and
around the housing for which the application is sub-
mitted, describing in detail activities to be conducted
during the fiscal year for which the grant is re-
quested.
‘‘(2) GRANTS FOR PHA’S WITH FEWER THAN 250
UNITS.—In each fiscal year the Secretary may, to the
extent 
amounts 
are 
available 
under 
section
5131(b)(2), make grants under this chapter to public
housing agencies that own or operate fewer than 250
public housing dwelling units and have submitted ap-
plications under paragraph (1) that the Secretary has
251
approved pursuant to the criteria under paragraph
(4).
‘‘(3) GRANTS FOR FEDERALLY ASSISTED LOW-IN-
COME HOUSING.—In each fiscal year the Secretary
may, to the extent amounts are available under sec-
tion 5131(b)(3), make grants under this chapter to
owners of federally assisted low-income housing that
have submitted applications under paragraph (1)
that the Secretary has approved pursuant to the cri-
teria under paragraphs (4) and (5).
‘‘(4) CRITERIA
FOR
APPROVAL
OF
APPLICA-
TIONS.—The Secretary shall determine whether to ap-
prove each application under this subsection on the
basis of—
‘‘(A) the extent of the crime problem in and
around the housing for which the application is
made;
‘‘(B) the quality of the plan to address the
crime problem in the housing for which the ap-
plication is made;
‘‘(C) the capability of the applicant to carry
out the plan; and
‘‘(D) the extent to which the tenants of the
housing, the local government, local community-
based nonprofit organizations, local tenant orga-
252
nizations representing residents of neighboring
projects that are owned or assisted by the Sec-
retary, and the local community support and
participate in the design and implementation of
the activities proposed to be funded under the
application.
In each fiscal year, the Secretary may give preference
to applications under this subsection for housing
made by applicants who received a grant for such
housing for the preceding fiscal year under this sub-
section or under the provisions of this chapter as in
effect immediately before the date of the enactment of
the Housing and Community Development Act of
1994.
‘‘(5) ADDITIONAL CRITERIA FOR FEDERALLY AS-
SISTED LOW-INCOME HOUSING.—In addition to the
selection criteria under paragraph (4), the Secretary
may establish other criteria for evaluating applica-
tions submitted by owners of federally assisted low-in-
come housing, except that such additional criteria
shall be designed only to reflect—
‘‘(A) relevant differences between the finan-
cial resources and other characteristics of public
housing authorities and owners of federally as-
sisted low-income housing; or
253
‘‘(B) relevant differences between the prob-
lem of crime in public housing administered by
such public housing agencies and the problem of
crime in federally assisted low-income housing.’’.
(d) DEFINITIONS.—Section 5126 of the Anti-Drug
Abuse Act of 1988 (42 U.S.C. 11905) is amended—
(1) by striking paragraphs (1) and (2);
(2) in paragraph (4), by striking ‘‘section’’ be-
fore ‘‘221(d)(4)’’;
(3) by redesignating paragraphs (3) and (4) (as
so amended) as paragraphs (1) and (2), respectively;
and
(4) by adding at the end the following new para-
graph:
‘‘(3) PUBLIC HOUSING AGENCY.—The term ‘pub-
lic housing agency’ has the meaning given the term
in section 3(b) of the United States Housing Act of
1937.’’.
(e) IMPLEMENTATION.—Section 5127 of the Anti-Drug
Abuse Act of 1988 (42 U.S.C. 11906) is amended by striking
‘‘Cranston-Gonzalez National Affordable Housing Act’’ and
inserting ‘‘Housing and Community Development Act of
1994’’.
(f) REPORTS.—Section 5128 of the Anti-Drug Abuse
Act of 1988 (42 U.S.C. 11907) is amended—
254
(1) by striking ‘‘The Secretary’’ and inserting
the following:
‘‘(a) REPORTS BY GRANTEES.—The Secretary’’;
(2) by striking ‘‘drug-related crime in’’ and in-
serting ‘‘crime in and around’’;
(3) by striking ‘‘described in section 5125(a)’’
and inserting ‘‘for the grantee submitted under sub-
section (a) or (b) of section 5125, as applicable’’; and
(4) by adding at the end the following new sub-
section:
‘‘(b) REPORTS BY SECRETARY.—For each fiscal year
in which the Secretary makes grants under this chapter,
the Secretary shall submit a report to the Congress describ-
ing the progress achieved in crime deterrence and reduction
in the public housing and federally assisted low-income
housing for which such grant assistance has been provided.
The report shall include any recommendations of the Sec-
retary for changes in the program of assistance under this
chapter.’’.
(g) TECHNICAL ASSISTANCE AND FUNDING.—Chapter
2 of subtitle C of title V of the Anti-Drug Abuse Act of 1988
is amended by striking section 5130 (42 U.S.C. 11909) and
inserting the following new sections:
255
‘‘SEC. 5130. TECHNICAL ASSISTANCE.
‘‘(a) IN GENERAL.—To the extent amounts are made
available under section 5131(c), the Secretary may provide
training, information services, and other technical assist-
ance to public housing agencies and other entities with re-
spect to their participation in the program under this chap-
ter, which shall include activities under subsection (b) of
this section. Such technical assistance may be provided di-
rectly by the Secretary or indirectly pursuant to grants,
contracts, or cooperative agreements.
‘‘(b) USE.—The Secretary may use amounts available
for use under this section—
‘‘(1) to establish and operate the clearinghouse
on drug abuse in public housing and the regional
training program on drug abuse in public housing
under sections 5143 and 5144 of this Act;
‘‘(2) to obtain assistance in establishing and
managing assessment and evaluation criteria and
specifications and to obtain the opinions of experts in
relevant fields; and
‘‘(3) upon the request of a public housing agency,
to assist the agency in evaluating the extent of the
crime problem in any public housing administered by
the agency and preparing a 5-year crime deterrence
and reduction plan under section 5125(a) or an ap-
plication and plan under section 5125(b)(1), which
256
assistance may include providing personnel and fund-
ing to identify and secure local resources to assist in
deterring and reducing crime.
‘‘(c) PRIORITY.—In selecting entities to receive tech-
nical assistance under this section, the Secretary shall give
priority to public housing agencies that have submitted ap-
plications and plans under section 5125 that the Secretary
has determined do not meet the requirements for approval
for assistance under this chapter.
‘‘SEC. 5131. FUNDING.
‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this chapter
$300,000,000 for fiscal year 1995 and $325,000,000 for fis-
cal year 1996. Any amount appropriated under this sub-
section shall remain available until expended.
‘‘(b) ALLOCATION.—Of any amounts appropriated to
carry out this chapter in any fiscal year that remain after
reserving amounts for use under subsection (c)—
‘‘(1) 85 percent shall be available only for assist-
ance pursuant to section 5125(a) to public housing
agencies that own or operate 250 or more public hous-
ing dwelling units;
‘‘(2) 10 percent shall be available only for assist-
ance pursuant to section 5125(b)(2) to public housing
257
agencies that own or operate fewer than 250 public
housing dwelling units; and
‘‘(3) 5 percent shall be available only for assist-
ance to federally assisted low-income housing pursu-
ant to section 5125(b)(3).
‘‘(c) SET-ASIDE
FOR TECHNICAL ASSISTANCE.—Of
any amount made available in fiscal years 1994 and 1995
to carry out this chapter, the Secretary shall use not more
than $10,000,000 in each such fiscal year to provide tech-
nical assistance under section 5130.’’.
(h) CONFORMING AMENDMENTS.—The table of contents
in section 5001 of the Anti-Drug Abuse Act of 1988 (Public
Law 100–690; 102 Stat. 4295) is amended—
(1) by striking the item relating to the heading
for chapter 2 of subtitle C and inserting the following:
‘‘CHAPTER 2—COMMUNITY PARTNERSHIPS AGAINST CRIME’’;
(2) by striking the item relating to section 5122
and inserting the following new item:
‘‘Sec. 5122. Purposes.’’;
(3) by striking the item relating to section 5125
and inserting the following new item:
‘‘Sec. 5125. Grant procedures.’’;
and
(4) by striking the item relating to section 5130
and inserting the following new items:
‘‘Sec. 5130. Technical Assistance.
‘‘Sec. 5131. Funding.’’.
258
SEC. 182. LOW-INCOME HOUSING PRESERVATION.
(a) ASSISTANCE AND INCENTIVES.—Section 234 of the
Housing and Community Development Act of 1987 (12
U.S.C. 4124) is amended to read as follows:
‘‘SEC. 234. AUTHORIZATION OF APPROPRIATIONS.
‘‘(a) IN GENERAL.—There are authorized to be appro-
priated for assistance and incentives authorized under this
subtitle $400,000,000 for fiscal year 1995 and $450,000,000
for fiscal year 1996.
‘‘(b) GRANTS.—Subject to approval in appropriation
Acts, not more than $40,000,000 of the amounts made
available under subsection (a) for fiscal year 1995, and not
more than $40,000,000 of the amounts made available
under subsection (a) for fiscal year 1996, shall be available
for grants under section 221(d)(2).’’.
(b) TECHNICAL ASSISTANCE AND CAPACITY BUILD-
ING.—The first sentence of section 257 of the Housing and
Community Development Act of 1987 (12 U.S.C. 4147) is
amended to read as follows: ‘‘The Secretary shall use not
more than $20,000,000 of the amounts made available
under section 234(a) for fiscal year 1995, and not more
than $20,000,000 of the amounts made available under sec-
tion 234(a) for fiscal year 1996, to carry out this subtitle.’’.
(c) REPEAL OF RENT LIMITATIONS.—The National
Housing Act is amended—
259
(1) in section 221 (12 U.S.C. 1715l), by striking
subsection (l).
(2) in section 236(f) (12 U.S.C. 1715z–1(f)), by
striking paragraph (6).
(d) EQUITY LOANS.—Section 241(f)(2)(B)(ii) of the
National Housing Act (12 U.S.C. 1715z–6(f)(2)(B)(ii)) is
amended by inserting ‘‘(excluding the amount of rehabilita-
tion costs required by the plan of action and related
charges)’’ after ‘‘loan amount’’.
(e) TREATMENT
AS ELIGIBLE HOUSING.—Notwith-
standing section 229(1)(B) of the Housing and Community
Development Act of 1987, the Northwest Towers project, lo-
cated at 1170 West Erie, in Chicago, Illinois, shall be con-
sidered eligible low-income housing for purposes of title II
of such Act, except that—
(1) the Secretary of Housing and Urban Devel-
opment may approve a plan of action under such
title for the project only if the plan of action (A) pro-
vides for transfer of the ownership of the project (i)
in accordance with section 226 of such title to a resi-
dent council of the project, or (ii) in accordance with
section 220 of such title to a community-based non-
profit organization approved by the residents of the
project, and (B) otherwise complies with the require-
ments of such title; and
260
(2) the Secretary of Housing and Urban Devel-
opment shall reduce the aggregate amount of any in-
centives otherwise to be provided under such title for
the project by the amount of any outstanding indebt-
edness on the loan for the project under section 201
of the Housing and Community Development Amend-
ments of 1978.
SEC. 183. FLEXIBLE SUBSIDY PROGRAM.
(a) AUTHORIZATION
OF APPROPRIATIONS.—Section
201(j)(5) of the Housing and Community Development
Amendments of 1978 (12 U.S.C. 1715z–1a(j)(5)) is amend-
ed to read as follows:
‘‘(5) There are authorized to be appropriated for assist-
ance under the flexible subsidy fund not to exceed
$50,000,000 for fiscal year 1995 and $55,000,000 for fiscal
year 1996.’’.
(b) ALLOCATION.—Section 201(n)(2)(B)(ii) of the
Housing and Community Development Amendments of
1978 (12 U.S.C. 1715z–1a(n)(2)(B)(ii)) is amended by in-
serting ‘‘and federally assisted’’ before ‘‘mortgages’’.
(c) USE OF SECTION 236 RENTAL ASSISTANCE FUND
AMOUNTS.—Section 236(f)(3) of the National Housing Act
(12 U.S.C. 1715z–1(f)(3)) is amended by striking ‘‘Septem-
ber 30, 1994’’ and inserting ‘‘September 30, 1996’’.
261
SEC. 184. YOUTHBUILD PROGRAM.
(a) AUTHORIZATION
OF APPROPRIATIONS.—Section
402 of the Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12870), as amended by the preceding provi-
sions of this title, is amended by inserting after subsection
(a) the following new subsection:
‘‘(b) YOUTHBUILD PROGRAM.—There are authorized to
be appropriated for activities under subtitle D $50,000,000
for fiscal year 1995 and $50,000,000 for fiscal year 1996.
Any amounts appropriated pursuant to this subsection
shall remain available until expended.’’.
(b) ELIGIBLE ACTIVITIES.—Section 454(b) of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12899c(b)) is amended—
(1) in paragraph (2), by striking ‘‘Acquisition’’
and all that follows through ‘‘facilities’’ and inserting
‘‘Acquisition, rehabilitation, or acquisition and reha-
bilitation of housing and related facilities, or con-
struction of new housing and related facilities (in-
cluding community facilities designed to serve the
needs of low- and very low-income families),’’;
(2) by striking paragraph (6); and
(3) by redesignating paragraphs (7) and (8) as
paragraphs (6) and (7), respectively.
(c) PRIORITY
FOR
APPLICANTS
SUPPLEMENTING
GRANT AMOUNTS.—Section 454(e) of the Cranston-Gon-
262
zalez National Affordable Housing Act (42 U.S.C.
12899c(e)) is amended to read as follows:
‘‘(e) PRIORITY FOR APPLICANTS WHO OBTAIN PRO-
GRAM FUNDS FROM OTHER SOURCES.—The Secretary
shall give priority in the award of grants under this section
to applicants to the extent that they have obtained amounts
or in-kind contributions, or commitments to provide such
amounts or contributions, from Federal, State, local, or pri-
vate sources other than assistance under this subtitle in an
amount constituting not less than 10 percent of the total
budget of the applicant for the Youthbuild program, that
will be used for carrying out any aspect of the Youthbuild
program of the applicant.’’.
(d) 
RESIDENTIAL
RENTAL
HOUSING
REQUIRE-
MENTS.—Section 455(a) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12899d(a)) is amend-
ed—
(1) in the matter preceding paragraph (1), by
inserting after ‘‘subtitle’’ the following: ‘‘for costs such
as construction, rehabilitation, and acquisition’’; and
(2) in paragraph (1), by striking subparagraph
(A) and inserting the following new subparagraph:
‘‘(A) at least 80 percent of the units shall
be occupied, or available for occupancy, by indi-
viduals and families with incomes that do not
263
exceed 50 percent of the area median income, ad-
justed for family size; and’’.
(e) RESERVATION OF FUNDS.—Section 458(d) of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12899g(d)) is amended by inserting before the period
at the end the following: ‘‘and not more than 1 percent of
such available amounts to implement, pursuant to sub-
section (a) of this section, a management information sys-
tem to gather and analyze information necessary to assess
the quality and effects of the program under this subtitle
and to monitor Youthbuild programs funded under this sub-
title’’.
(f) PROGRAM NAME.—The heading for subtitle D of
title IV of the Cranston-Gonzalez National Affordable Hous-
ing Act (42 U.S.C. 12899 et seq.) is amended to read as
follows:
‘‘Subtitle D—Youthbuild’’.
SEC. 185. DISPOSITION OF HUD-OWNED MULTIFAMILY
HOUSING PROPERTIES.
Section 203(g) of the Housing and Community Devel-
opment Amendments of 1978 (12 U.S.C. 1701z–11(g)) is
amended—
(1) in paragraph (2), by striking ‘‘and’’ at the
end;
264
(2) in paragraph (3), by striking the period at
the end and inserting ‘‘; and’’;
(3) by redesignating paragraphs (2) and (3) (as
so amended) as paragraphs (3) and (4), respectively;
and
(4) by inserting after paragraph (1) the follow-
ing new paragraph:
‘‘(2) upon the conclusion of the first year of such
2-year period, the Secretary shall examine the income
and rent of the family and of other very low-income
families who are preexisting tenants of the project
and the rents charged for units in the project and for
similar units in the market area in which the project
is located, to determine whether upon the expiration
of such 2-year period the rent charged for the unit oc-
cupied by the family and for similar units in the
same market area will be significantly more than the
amount charged for the unit occupied by the family
during such 2-year period;’’; and
(5) by adding at the end the following new para-
graph:
‘‘(5) if the Secretary determines pursuant to
paragraph (2) that, upon the expiration of the 2-year
period, the family will not be able to rent a unit in
the project or a similar unit in the market area in
265
which the project is located without paying in rent
significantly more than the amount charged for the
unit occupied by the family during such 2-year pe-
riod, the Secretary shall, to the extent budget author-
ity is available, provide tenant-based assistance on
behalf of the family under a contract under section 8
of the United States Housing Act of 1937 having a
5-year term.’’.
SEC. 186. GUIDELINES FOR SCREENING, ADMISSION, AND
EVICTIONS IN PUBLIC AND ASSISTED HOUS-
ING.
Not later than December 31, 1994, the Secretary of
Housing and Urban Development shall issue guidelines for
owners and managers of public and assisted housing with
respect to screening applicants for occupancy in such hous-
ing, admissions to such housing, and evictions of residents
of such housing who are users or former users of illegal
drugs or who violate lease provisions because of alcohol use.
The Secretary shall issue such guidelines based on the report
to the Congress issued by the Public and Assisted Housing
Occupancy Task Force on April 7, 1994, pursuant to sec-
tion 643(a)(7) of the Housing and Community Development
Act of 1992.
266
SEC. 187. METROPOLITAN AREA-WIDE STRATEGY DEM-
ONSTRATION.
(a) IN GENERAL.—The Secretary of Housing and
Urban Development (in this section referred to as the ‘‘Sec-
retary’’) shall carry out, through consortia of units of gen-
eral local government, a demonstration program to make
assisted housing available in 3 metropolitan areas on a
metropolitan, area-wide basis.
(b) PURPOSE.—The demonstration program under
this section shall be designed to determine the most effective
manner to—
(1) affirmatively further fair housing and ad-
dress the problem of racial segregation in metropoli-
tan areas;
(2) achieve the goal of overcoming spatial sepa-
ration and segregation of families by race, which
shall include testing the effect of filling vacancies in
assisted housing by use of a consolidated waiting list;
(3) enlist cooperation of units of general local
government, public housing agencies, and private
owners of assisted housing in achieving such goals;
(4) make public housing facilitate social and eco-
nomic mobility;
(5) eliminate housing discrimination; and
(6) accomplish related objectives determined by
the Secretary.
267
(c) ELIGIBILITY OF CONSORTIA.—The Secretary shall
select the consortia of units of general local government to
participate in the demonstration program on a competitive
basis and make a grant to each consortia selected. The Sec-
retary may select only consortia that demonstrate to the
Secretary, as the Secretary shall require, that a sufficient
number of units of general local government, public housing
agencies, and private owners of assisted housing are com-
mitted to participate in the demonstration to make the dem-
onstration feasible, which shall include commitment to com-
ply with alternative program requirements specified by the
Secretary.
(d) DURATION.—The demonstration program shall be
carried out for a period of 3 years with respect to each site
selected.
(e) WAIVERS.—The Secretary may waive, or specify
alternative requirements for, any provision of any statute
or regulation that the Secretary administers if the Sec-
retary finds that the waiver or alternative requirement (1)
is necessary to facilitate the demonstration program, and
(2) would not be inconsistent with the overall purpose of
the statute or regulation affected. In no event may the Sec-
retary waive, or specify alternative requirements for, statu-
tory requirements related to nondiscrimination, fair hous-
ing, labor standards, or the environment, except that the
268
Secretary may waive affirmative marketing requirements
for participants in the demonstration program.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are
authorized to be appropriated for the costs related to re-
gional planning, housing counseling, development of a
model consolidated waiting list, and administration under
the demonstration established by this section, such sums as
may be necessary for each of fiscal years 1995 and 1996.
TITLE II—HOME INVESTMENT
PARTNERSHIPS
SEC. 201. AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL.—Section 205 of the Cranston-Gon-
zalez National Affordable Housing Act (42 U.S.C. 12724)
is amended to read as follows:
‘‘SEC. 205. AUTHORIZATION.
‘‘There are authorized to be appropriated to carry out
this title $1,775,000,000 for fiscal year 1995, and
$2,000,000,000 for fiscal year 1996, of which—
‘‘(1) not more than $25,000,000 for fiscal year
1995, and $25,000,000 for fiscal year 1996, shall be
for community housing partnership activities author-
ized under section 233; and
‘‘(2) not more than $22,000,000 for fiscal year
1995, and $22,000,000 for fiscal year 1996, shall be
269
for activities in support of State and local housing
strategies authorized under subtitle C.’’.
(b) NOTICE OF FUNDING AVAILABILITY.—For each of
fiscal years 1995 and 1996, the Secretary shall cause to be
published in the Federal Register notice of the availability
of any amounts made available under section 205(1) of the
Cranston-Gonzalez National Affordable Housing Act (as
amended by subsection (a)) that are available for commu-
nity housing partnership activities authorized under sec-
tion 233. Each such notice shall be published not later than
the expiration of the 90-day period beginning on the date
that amounts are appropriated for each of such fiscal years
to carry out the program under title II of the Cranston-
Gonzalez National Affordable Housing Act.
SEC. 202. ELIGIBLE USES OF INVESTMENT.
Section 212(a)(1) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12742(a)(1)) is amended
by striking ‘‘financing costs’’ and inserting ‘‘costs of financ-
ing (including credit enhancements, loan guarantees, and
debt service reserves)’’.
SEC. 203. QUALIFICATION AS AFFORDABLE RENTAL HOUS-
ING.
Section 215(a) of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 12742(a)) is amended—
270
(1) in paragraph (1)(A), by striking ‘‘bears rents
not greater than’’ and inserting ‘‘is occupied by ten-
ants who pay as rent’’;
(2) in paragraph (3), by inserting after the pe-
riod at the end of the first sentence the following new
sentence: ‘‘A tenant occupying a rental unit assisted
with amounts provided under this title shall be con-
sidered to be a very low-income family until the
household’s income increases to more than 140 percent
of the applicable income limitation under paragraph
(1)(B).’’; and
(3) by adding at the end the following new para-
graph:
‘‘(6) 
RENTAL
SUBSIDIES.—Notwithstanding
paragraph (1), housing shall not be considered to fail
to qualify as affordable housing under this title be-
cause it includes units for which—
‘‘(A) payments are made under section 8 of
the United States Housing Act of 1937 or any
comparable rental assistance program; and
‘‘(B) because of increases in the income of
tenants of the housing, the rent paid by the ten-
ants under the assistance program with respect
to such unit exceeds 30 percent of the adjusted
271
income of a family whose income equals 65 per-
cent of the median income for the area.’’.
SEC. 204. REPAYMENT OF INVESTMENT.
Section 219 of the Cranston-Gonzalez National Afford-
able Housing Act (42 U.S.C. 12749) is amended by adding
at the end the following new subsection:
‘‘(d) REPAYMENT OF MATCHING AMOUNTS.—Amounts
provided by a participating jurisdiction pursuant to sec-
tion 220 for housing not assisted under this title shall be
recognized for purposes of section 220(a), notwithstanding
that such amounts are not repaid to the jurisdiction’s
HOME Investment Trust Fund, if such amounts are drawn
from an affordable housing program operated by the juris-
diction, repaid to the program, and available for use only
for the program or for providing housing that qualifies as
affordable housing.’’.
SEC. 205. MATCHING REQUIREMENTS.
Section 220 of the Cranston-Gonzalez National Afford-
able Housing Act (42 U.S.C. 12750) is amended—
(1) in the first sentence of subsection (a), by in-
serting ‘‘the participating jurisdiction certifies’’ before
‘‘qualifies’’; and
(2) in subsection (b)(1)—
(A) in subparagraph (A), by striking ‘‘or’’;
272
(B) in subparagraph (B), by striking the
period at the end and inserting ‘‘; or’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(C) is made with respect to housing that is
substantially equivalent to housing that qualifies
as affordable housing under section 215.’’.
SEC. 206. SUPPORT FOR STATE AND LOCAL HOUSING
STRATEGIES.
Subtitle C of title II of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12781 et seq.) is amend-
ed by adding at the end the following new section:
‘‘SEC. 246. STRATEGIC PLANNING AND URBAN DESIGN.
‘‘The Secretary may use amounts available under this
subtitle to provide grants to States, units of general local
government, and metropolitan, non-metropolitan, and re-
gional planning agencies, for the following activities:
‘‘(1) Urban design and the development of public
amenities in low-income neighborhoods that serve as
a catalyst for the renewal of the neighborhood.
‘‘(2) Development and implementation of com-
prehensive plans that focus on local and metropolitan
strategies which create sustainable community devel-
opment at the neighborhood, city, and metropolitan
level.
273
‘‘(3) Expanding economic opportunities for low-
and moderate-income families through areawide plan-
ning approaches that provide educational and em-
ployment opportunities for such persons.
‘‘(4) Coordinated efforts that stimulate fair hous-
ing, further the deconcentration of the poor and mi-
norities, reduce the isolation of income groups within
communities, remove barriers to affordable housing
development, and expand housing opportunities for
low- and moderate-income families.
‘‘(5) The conservation of important historic, vis-
ual, and cultural features.
‘‘(6) The development and implementation of
comprehensive approaches that integrate poorer,
inner-city neighborhoods into the greater metropolitan
region.
‘‘(7) Any other activities the Secretary deter-
mines will further the purposes of this section.’’.
SEC. 207. LABOR REQUIREMENTS.
Section 286(b) of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 12836(b)) is amended by
adding at the end the following new sentence: ‘‘Subsection
(a) shall not apply in the case of housing for which a site
is acquired, but which is not constructed, using funds made
available under this subtitle.’’.
274
TITLE III—SUPPORTIVE
HOUSING PROGRAMS
SEC. 301. FUNDING FOR SUPPORTIVE HOUSING FOR THE
ELDERLY AND FOR PERSONS WITH DISABIL-
ITIES.
Section 601 of the Housing and Community Develop-
ment Act of 1992 (Public Law 102–550; 106 Stat. 3802)
is amended by striking subsection (a) and inserting the fol-
lowing new subsection:
‘‘(a) AGGREGATE FUNDING.—There are authorized to
be appropriated for the purpose of providing assistance in
accordance with section 202 of the Housing Act of 1959 and
section 811 of the Cranston-Gonzalez National Affordable
Housing Act, $1,948,000,000 for fiscal year 1995 and
$1,954,000,000 for fiscal year 1996.’’.
SEC. 302. SUPPORTIVE HOUSING FOR THE ELDERLY.
(a) ELDER
COTTAGE
HOUSING
UNITS.—Section
202(b) of the Housing Act of 1959 (12 U.S.C. 1701q(b))
is amended by inserting after the second sentence the follow-
ing new sentence: ‘‘Such assistance may also be used to fi-
nance the acquisition and installation of elder cottage hous-
ing units that are small, freestanding, barrier-free, energy
efficient, removable and designed to be installed adjacent
to existing 1- to 4-family dwellings and are used as sup-
275
portive housing for the elderly in accordance with this sec-
tion.’’.
(b) DEFINITION
OF
‘‘FRAIL
ELDERLY’’.—Section
202(k)(3) of the Housing Act of 1959 (12 U.S.C.
1701q(k)(3)) is amended by striking the first sentence and
inserting the following new sentences: ‘‘The term ‘frail elder-
ly’ means an elderly person whose level of functional dis-
ability jeopardizes her or his ability to continue to live
independently. The Secretary shall, to the extent possible,
develop assessment measures of functional disability that
are appropriate for purposes of this section and will provide
for effective use of the program under this section with other
programs providing supportive services.’’.
(c) REPEAL OF DEMONSTRATION.—Section 806 of the
Cranston-Gonzalez National Affordable Housing Act (12
U.S.C. 1701q note) is hereby repealed.
SEC. 303. SUPPORTIVE HOUSING FOR PERSONS WITH DIS-
ABILITIES.
(a) PHA’S AS ELIGIBLE SPONSORS.—Section 811 of
the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 8013) is amended—
(1) in the first sentence of subsection (f), by in-
serting ‘‘and public housing agencies’’ after ‘‘private
nonprofit organizations’’; and
(2) in subsection (k)—
276
(A) in paragraph (5), by striking ‘‘private
nonprofit organization’’ and inserting ‘‘eligible
sponsor’’; and
(B) by adding at the end the following new
paragraph:
‘‘(10) The term ‘eligible sponsor’ means—
‘‘(A) in the case of capital advances under
subsection (b)(2) and project rental assistance
under subsections (b)(2) and (3)—
‘‘(i) a private nonprofit organization;
and
‘‘(ii) a public housing agency, but only
in the case of a jurisdiction for which the
Secretary determines that, during the 3-
year period ending upon the date of the ap-
plication of the agency for assistance under
subsection (b)(2) or (3)—
‘‘(I) no private nonprofit organi-
zation has submitted an application
under subsection (f) for assistance for a
project located in such area; and
‘‘(II) no private nonprofit organi-
zation has had such an application ap-
proved for a project located in such
area; and
277
‘‘(B) in the case of tenant-based rental as-
sistance under subsection (b)(1)—
‘‘(i) a private nonprofit organization;
and
‘‘(ii) a public housing agency, but only
to the extent that such assistance is used for
providing assistance in accordance with an
allocation plan for the agency under section
7(f) of the United States Housing Act of
1937.’’.
(b) RENTAL ASSISTANCE FOR EXISTING BUILDINGS.—
Section 811 of the Cranston-Gonzalez National Affordable
Housing Act is amended—
(1) in subsection (d)(2), by adding at the end the
following new sentence: ‘‘The Secretary may enter
into contracts with private, nonprofit organizations
to provide project rental assistance for supportive
housing for persons with disabilities, regardless of
whether the housing is developed with capital ad-
vances under this section.’’;
(2) in subsection (e)(1), by inserting ‘‘with cap-
ital advances’’ after ‘‘assisted’’;
(3) by striking the first 2 sentences of subsection
(e)(2) and inserting the following new sentences: ‘‘The
initial term of a contract entered into under sub-
278
section (d)(2) shall be 240 months for housing devel-
oped with a capital advance, and shall be not more
than 60 months for housing not developed with a cap-
ital advance. The Secretary shall, to the extent ap-
proved in appropriation Acts, extend any expiring
contracts for a term of not less than 60 months.’’;
(4) in subsection (g)(1), by inserting ‘‘(if appli-
cable)’’ after ‘‘develop’’;
(5) in subsections (g)(3) and (g)(5), by inserting
‘‘design or’’ before ‘‘proposed’’ each place it appears;
(6) in subsection (j), by striking paragraph (3)
and inserting the following new paragraph:
‘‘(3) SITE CONTROL.—
‘‘(A) CAPITAL ADVANCES.—In the case of
housing to be assisted with capital advances
under this section, an applicant may obtain
ownership or control of a suitable site different
from the site specified in the initial application.
If an applicant fails to obtain ownership or con-
trol of the site within 1 year after notification
of an award for assistance, the assistance shall
be recaptured and reallocated.
‘‘(B) PROJECT
RENTAL
ASSISTANCE.—In
the case of housing to be assisted only with
project rental assistance, the applicant shall have
279
ownership or control of a suitable site at the
time of application. The Secretary may approve
a change in site at any time from the date the
application is submitted to the expiration date of
the rental assistance contract.’’;
(7) in subsection (j)(4), by striking ‘‘The’’ and
inserting the following: ‘‘In the case of housing as-
sisted with capital advances under this section, the’’;
(8) in the second sentence of subsection (k)(1), by
striking ‘‘the development of’’;
(9) in subsection (k)(5), by inserting before the
period at the end the following: ‘‘, or that receives
rental assistance under this section to operate a
project for supportive housing for persons with dis-
abilities’’; and
(10) in subsection (m)(3), by striking ‘‘(1)’’ and
inserting ‘‘(2)’’.
(c) AUTHORITY TO PROVIDE ASSISTANCE.—Section
811 of the Cranston-Gonzalez National Affordable Housing
Act is amended—
(1) by striking subsection (b) and inserting the
following new subsection:
‘‘(b) GENERAL AUTHORITY.—The Secretary may pro-
vide assistance to eligible sponsors to expand the supply of
280
supportive housing for persons with disabilities. Such as-
sistance shall be provided as—
‘‘(1) tenant-based rental assistance on behalf of
eligible persons with disabilities, in accordance with
subsection (d)(4);
‘‘(2) capital advances in accordance with sub-
section (d)(1), together with contracts for project rent-
al assistance in accordance with subsection (d)(2); or
‘‘(3) contracts for project rental assistance in ac-
cordance with subsection (d)(2).’’;
(2) in subsection (d)(1), by adding at the end the
following new sentences: ‘‘Capital advances may be
used to finance the acquisition, acquisition and mod-
erate rehabilitation, construction, reconstruction, or
moderate or substantial rehabilitation of housing, in-
cluding the acquisition from the Resolution Trust
Corporation, to be used as supportive housing for per-
sons with disabilities and may include real property
acquisition, site improvement, conversion, demolition,
relocation, and other expenses that the Secretary de-
termines are necessary to expand the supply of sup-
portive housing for persons with disabilities. Such as-
sistance may also be used to finance the acquisition
and installation of cottage housing units that are
small, freestanding, barrier-free, energy efficient, re-
281
movable and designed to be installed adjacent to exist-
ing 1- to 4-family dwellings and are used as support-
ive housing for the persons with disabilities in accord-
ance with this section.’’;
(3) in subsections (d)(3), (e)(1), and (f), by in-
serting ‘‘or (3)’’ after ‘‘subsection (b)(2)’’ each place
it appears; and
(4) by striking paragraph (4) of subsection (d)
and inserting the following new paragraph:
‘‘(4) TENANT-BASED RENTAL ASSISTANCE.—
‘‘(A) ADMINISTRATION.—Tenant-based rent-
al assistance that is provided under subsection
(b)(1) shall be administered under the same rules
governing rental assistance made available under
section 8 of the United States Housing Act of
1937.
‘‘(B) PUBLIC HOUSING AGENCIES.—A pub-
lic housing agency may provide tenant-based
rental assistance under subsection (b)(1) only if
the public housing agency has submitted, and
had approved, an allocation plan under section
7(f) of the United States Housing Act of 1937
and any such assistance made available to a
public housing agency shall be provided by the
agency in accordance with such allocation plan.
282
In determining the amount of assistance pro-
vided under subsection (b)(1) for a public hous-
ing agency, the Secretary shall consider the needs
of the agency as described in the allocation
plan.’’.
(d) TECHNICAL CHANGES.—Section 811(k)(6) of the
Cranston-Gonzalez National Affordable Housing Act is
amended by striking subparagraph (A) and inserting the
following new subparagraph:
‘‘(A) that has received tax-exempt status
under section 501(c)(3) or (4) of the Internal
Revenue Code of 1986;’’.
SEC. 304. REVISED CONGREGATE SERVICES.
(a) AUTHORIZATION
OF APPROPRIATIONS.—Section
802(n)(1) of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 8011(n)(1)) is amended by striking
the matter preceding subparagraph (A) and inserting the
following:
‘‘(1) AUTHORIZATION AND USE.—There are au-
thorized to be appropriated to carry out this section
$25,000,000 for fiscal year 1995, and $26,000,000 for
fiscal year 1996, of which not more than—’’.
(b) MEAL FEES AND MATCHING AMOUNTS.—Section
802 of the Cranston-Gonzalez National Affordable Hous-
ing Act (42 U.S.C. 8011) is amended—
283
(1) in subparagraph (A) of subsection (d)(7),
by striking ‘‘The fees for meals shall be in the fol-
lowing amounts:’’ and all that follows through the
end of the subparagraph; and
(2) in subsection (i)(1)—
(A) in subparagraph (A)(i), by striking
‘‘50 percent’’ and inserting ‘‘25 percent’’;
(B) in subparagraph (A)(ii), by striking
‘‘40 percent’’ and inserting ‘‘65 percent’’; and
(C) in subparagraph (C), by striking ‘‘10
percent’’ and inserting ‘‘25 percent’’.
(c) DEFINITION
OF ‘‘FRAIL ELDERLY’’.—Section
802(k)(8) of the Cranston-Gonzalez National Affordable
Housing Act is amended by striking the first sentence and
inserting the following new sentences: ‘‘The term ‘frail el-
derly’ means an elderly person whose level of functional
disability jeopardizes her or his ability to continue to live
independently. The Secretary shall, to the extent possible,
develop assessment measures of functional disability that
are appropriate for purposes of this section and will pro-
vide for effective use of the program under this section
with other programs providing supportive services.’’.
284
SEC. 305. SUPPORTIVE HOUSING ASSISTANCE FOR ELDER-
LY INDEPENDENCE.
(a) SECTION 8 ASSISTANCE.—The first sentence of sec-
tion 803(j) of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 8012(j)) is amended to read as fol-
lows: ‘‘The budget authority available under section 5(c) of
the United States Housing Act of 1937 for assistance under
section 8 of such Act is authorized to be increased by
$25,000,000 on or after October 1, 1994, and by
$25,000,000 on or after October 1, 1995.’’.
(b) SUPPORTIVE
SERVICES
AUTHORIZATION.—The
first sentence of section 803(k) of the Cranston-Gonzalez Na-
tional Affordable Housing Act (42 U.S.C. 8012(k)) is
amended to read as follows: ‘‘There are authorized to be ap-
propriated for the Secretary to carry out the responsibilities
for supportive services under the demonstrations under this
section $7,000,000 to become available in fiscal year 1995,
and $7,000,000 to become available in fiscal year 1996.’’.
(c) SUPPORTIVE SERVICES CONTRIBUTIONS.—Section
803(c)(1) of the Cranston-Gonzalez National Affordable
Housing Act is amended—
(1) in subparagraph (A), by striking ‘‘40 per-
cent’’ and inserting ‘‘65 percent’’; and
(2) in subparagraph (B), by striking ‘‘50 per-
cent’’ and inserting ‘‘25 percent’’.
285
(d) DEFINITION
OF
‘‘FRAIL
ELDERLY’’.—Section
803(g)(3) of the Cranston-Gonzalez National Affordable
Housing Act is amended by striking the first sentence and
inserting the following new sentences: ‘‘The term ‘frail elder-
ly person’ means an elderly person whose level of functional
disability jeopardizes her or his ability to continue to live
independently. The Secretary shall, to the extent possible,
develop assessment measures of functional disability that
are appropriate for purposes of this section and will provide
for effective use of the program under this section with other
programs providing supportive services.’’.
(e) AMENDMENT TO HEADING.—Section 803 of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 8012) is amended by striking the section designation
and heading and inserting the following:
‘‘SEC. 803. SUPPORTIVE HOUSING ASSISTANCE FOR ELDER-
LY INDEPENDENCE.’’.
SEC. 306. HOUSING OPPORTUNITIES FOR PERSONS WITH
AIDS.
(a) AUTHORIZATION
OF APPROPRIATIONS.—Section
863 of the Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12912) is amended to read as follows:
286
‘‘SEC. 863. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
this subtitle $212,000,000 for fiscal year 1995 and
$225,000,000 for fiscal year 1996.’’.
(b) TECHNICAL ASSISTANCE.—Section 854(c)(3) of the
Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12903(c)(3)) is amended—
(1) in subparagraph (A)—
(A) in clause (i), by striking ‘‘and’’ at the
end;
(B) in clause (ii), by striking the period at
the end and inserting ‘‘; and’’; and
(C) by adding at the end the following new
clause:
‘‘(iii) nonprofit organizations that pro-
vide technical assistance on a national, re-
gional, or State-wide basis to nonprofit or-
ganizations carrying out eligible activities
under section 855 for eligible persons, to
provide such technical assistance, except
that not more than 2 percent of the amounts
available in any fiscal year for allocation
under this paragraph shall be used as pro-
vided in this clause.’’; and
287
(2) in subparagraph (B), by striking ‘‘this para-
graph’’ and inserting ‘‘clauses (i) and (ii) of subpara-
graph (A)’’.
(c) COOPERATION.—
(1) IN GENERAL.—Section 856(c) of the Cran-
ston-Gonzalez National Affordable Housing Act (42
U.S.C. 12905(c)) is amended by striking ‘‘The recipi-
ent’’ and all that follows and inserting the following:
‘‘The recipient shall establish and implement a proc-
ess for ensuring coordination and community input
in planning for and providing services assisted with
amounts provided under this subtitle. The planning
process shall include consultation and coordination
with the agencies of the relevant State and local gov-
ernments responsible for services for eligible persons
in the area served by the applicant and with other
public and private organizations and agencies provid-
ing services for such eligible persons (including indi-
viduals with human immunodeficiency virus disease),
including community-based and AIDS service organi-
zations, providers of social services, providers of men-
tal health care, providers of substance abuse treatment
services, nonprofit providers of housing for eligible
persons, and affected communities.’’.
288
(2) APPLICATION.—Section 854(d) of the Cran-
ston-Gonzalez National Affordable Housing Act (42
U.S.C. 12903(d)) is amended—
(A) in paragraph (5), by striking ‘‘and’’ at
the end;
(B) by redesignating paragraph (6) as
paragraph (7); and
(C) by inserting after paragraph (5) the fol-
lowing new paragraph:
‘‘(6) a description of the activities to be under-
taken in fulfilling the requirements under section
856(c); and’’.
(d) ADMINISTRATIVE EXPENSES.—Section 856(g)(2)
of the Cranston-Gonzalez National Affordable Housing Act
(42 U.S.C. 12905(g)(2)) is amended—
(1) by striking ‘‘title’’ and inserting ‘‘subtitle’’;
and
(2) by striking ‘‘, including the costs of staff nec-
essary to carry out eligible activities’’.
SEC. 307. SERVICE COORDINATORS.
(a) PUBLIC HOUSING.—Section 9 of the United States
Housing Act of 1937 (42 U.S.C. 1437g) is amended in sub-
section (a)(1)(B)(ii)—
(1) in the 1st sentence, by striking ‘‘Annual’’
and all that follows through ‘‘such project,’’ and in-
289
serting ‘‘To the extent amounts are made available
pursuant to section 5(c) for carrying out this clause,
the Secretary may increase the annual contributions
provided under this section to any public housing
agency for any project to provide’’; and
(2) by striking the last 2 sentences.
(b) OTHER
FEDERALLY
ASSISTED
MULTIFAMILY
HOUSING.—Section 676(c) of the Housing and Community
Development Act of 1992 (42 U.S.C. 13632(c)) is amended
to read as follows:
‘‘(c) 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 1995
and 1996.’’.
TITLE 
IV—MORTGAGE 
INSUR-
ANCE AND SECONDARY MORT-
GAGE MARKET
Subtitle A—Mortgage Insurance
and Loan Guarantee Programs
SEC. 401. LIMITATION ON INSURANCE AUTHORITY.
Section 531(b) of the National Housing Act (12 U.S.C.
1735f–9(b)) is amended to read as follows:
‘‘(b) Notwithstanding any other provision of law and
subject only to the absence of qualified requests for insur-
ance, to the authority provided in this Act, and to the limi-
290
tation in subsection (a), the Secretary shall enter into com-
mitments to insure mortgages under this Act with an aggre-
gate principal amount of $105,000,000,000 during fiscal
year 1995 and $91,000,000,000 during fiscal year 1996.’’.
SEC. 402. FEDERAL HOUSING ADMINISTRATION ADVISORY
BOARD.
Section 202(b)(11) of the National Housing Act (12
U.S.C. 1708(b)(11)) is amended by striking ‘‘January 1,
1995.’’ and inserting ‘‘January 1, 1997.’’.
SEC. 403. MAXIMUM MORTGAGE AMOUNT CEILING FOR SIN-
GLE FAMILY MORTGAGES.
Subparagraph (A) of the first sentence of section
203(b)(2) of the National Housing Act (12 U.S.C.
1709(b)(2)(A)) is amended by striking clause (ii) and in-
serting the following new clause:
‘‘(ii) 85 percent of the dollar amount
limitation 
determined 
under 
section
305(a)(2) of the Federal Home Loan Mort-
gage Corporation Act (as adjusted annually
under such section) for a residence of the
applicable size;’’.
SEC. 404. MAXIMUM MORTGAGE AMOUNT FLOOR FOR SIN-
GLE FAMILY MORTGAGE INSURANCE.
Subparagraph (A) of the first sentence of section
203(b)(2) of the National Housing Act (12 U.S.C.
291
1709(b)(2)(A)) is amended by striking ‘‘the dollar amount
limitation in effect under this section for the area on May
12, 1992’’ and inserting the following: ‘‘50 percent of the
dollar amount limitation determined under section
305(a)(2) of the Federal Home Loan Mortgage Corporation
Act (as adjusted annually under such section) for a resi-
dence of the applicable size’’.
SEC. 405. ELIMINATION OF RESTRICTIONS REGARDING NEW
CONSTRUCTION.
(a) IN GENERAL.—Section 203(b)(2) of the National
Housing Act (12 U.S.C. 1709(b)(2)) is amended, in the
matter following subparagraph (B)—
(1) in the 1st undesignated paragraph, by strik-
ing ‘‘Notwithstanding any other provision of this sec-
tion,’’ and all that follows through ‘‘beginning of con-
struction.’’; and
(2) by striking the 2d undesignated paragraph
(relating to mortgage insurance amounts for resi-
dences having solar energy systems).
(b) REPEAL OF AUTHORITY TO EXPEND AMOUNTS
FROM INSURANCE FUND TO CORRECT SUBSTANTIAL DE-
FECTS.—Section 518 of the National Housing Act (12
U.S.C. 1735b) is hereby repealed.
292
SEC. 406. AUTHORITY TO USE AMOUNTS BORROWED FROM
FAMILY MEMBERS FOR DOWNPAYMENTS.
(a) IN GENERAL.—Section 203(b)(9) of the National
Housing Act (12 U.S.C. 1709(b)(9)) is amended by insert-
ing before the period at the end the following: ‘‘: Provided
further, That for purposes of this paragraph, the Secretary
shall consider as cash or its equivalent any amounts bor-
rowed from a family member (as such term is defined in
section 201), subject only to the requirements that, in any
case in which the repayment of such borrowed amounts is
secured by a lien against the property, such lien shall be
subordinate to the mortgage and the sum of the principal
obligation of the mortgage and the obligation secured by
such lien may not exceed 100 percent of the appraised value
of the property plus any initial service charges, appraisal,
inspection, and other fees in connection with the mortgage’’.
(b) DEFINITION OF FAMILY MEMBER.—Section 201 of
the National Housing Act (12 U.S.C. 1707) is amended by
adding at the end the following new subsections:
‘‘(e) The term ‘family member’ means, with respect to
a mortgagor under such section, a child, parent, or grand-
parent of the mortgagor (or the mortgagor’s spouse). In de-
termining whether any of the relationships referred to in
the preceding sentence exist, a legally adopted son or daugh-
ter of an individual (and a child who is a member of an
individual’s household, if placed with such individual by
293
an authorized placement agency for legal adoption by such
individual), and a foster child of an individual, shall be
treated as a child of such individual by blood.
‘‘(f) The term ‘child’ means, with respect to a mortga-
gor under such section, a son, stepson, daughter, or step-
daughter of such mortgagor.’’.
SEC. 407. INDEMNIFICATION FOR MULTIFAMILY HOUSING
PROJECT MANAGERS.
Section 207(l) of the National Housing Act (12 U.S.C.
1713(l)) is amended by inserting before the period at the
end the following: ‘‘: Provided further, That, for properties
acquired by the Secretary under this section and for prop-
erties secured by any mortgage assigned and transferred to
or held by the Secretary, the Secretary may indemnify
management contractors against claims by third persons for
death, bodily injury, or loss of or damage to property on
such terms as the Secretary determines appropriate’’.
SEC. 408. EXTENSION OF MULTIFAMILY HOUSING MORT-
GAGE AUCTION PROVISIONS.
The first sentence of section 221(g)(4)(C)(viii) of the
National Housing Act (12 U.S.C. 1715l(g)(4)(C)(viii)) is
amended by striking ‘‘September 30, 1995’’ and inserting
‘‘December 31, 2005’’.
294
SEC. 409. STREAMLINED REFINANCING FOR HUD-HELD
MORTGAGES.
(a) IN GENERAL.—Section 223(a) of the National
Housing Act (12 U.S.C. 1715n) is amended—
(1) in paragraph (7), by striking the colon pre-
ceding ‘‘Provided further,’’ and all that follows
through ‘‘and the mortgagee’’;
(2) by redesignating paragraph (8) as para-
graph (9);
(3) by inserting after paragraph (7) the follow-
ing new paragraph:
‘‘(8) given to refinance a mortgage held by the
Secretary, upon such terms and conditions as the Sec-
retary may prescribe, covering property on which
there is located a 1- to 4-family residence, or a 1-fam-
ily unit in a condominium project, which mortgage
was formerly insured under this Act and subsequently
assigned to the Secretary: Provided, That the mortga-
gor has not previously refinanced a mortgage pursu-
ant to this paragraph: Provided further, That the
mortgagor has made all payments due under the note
secured by the existing mortgage and all payments
due under the note for at least the previous 6 months,
or the mortgagor is under a forbearance agreement
and has made all payments due under the note se-
cured by the existing mortgage for at least the pre-
295
vious 6 months: Provided further, That the principal
amount of the refinancing mortgage may not exceed
the outstanding principal balance of the existing
mortgage by more than additional amounts owed by
the mortgagor due to the delinquency and to the re-
ceipt of assignment assistance under section 230: Pro-
vided further, That the monthly payment due under
the refinancing mortgage may not exceed the monthly
payment due under the existing mortgage: Provided
further, That the refinancing mortgage may have a
term not more than 12 years in excess of the
unexpired term of the assigned mortgage: Provided
further, That the refinancing mortgage may be in-
sured under section 203(b) or 221(d)(2) of this Act,
at the option of the mortgagee, or under section 234(c)
of this Act in the case of a condominium: Provided
further, That a refinancing mortgage insured under
section 221(d)(2) shall involve a principal obligation
in an amount not to exceed 50 percent of the applica-
ble dollar limitation for a 1- to 4-family residence
under section 203(b)(2): Provided further, That the
authority under this paragraph to refinance a mort-
gage shall terminate 30 months after the date of en-
actment of this Act: Provided further, That the total
296
number of mortgages refinanced under this paragraph
may not exceed 20,000; or’’; and
(4) by adding at the end the following new flush
material:
‘‘A mortgage of the character described in paragraphs (1)
through (6) of this subsection shall have a maturity and
a principal obligation not in excess of the maximums pre-
scribed under the applicable section or title of this Act, ex-
cept that in no case may the principal obligation of a mort-
gage referred to in paragraph (5) of this subsection exceed
90 percent of the appraised value of the mortgage property,
and shall bear interest at such rate as may be agreed upon
by the mortgagor and the mortgagee.’’.
(b) IMPLEMENTATION.—The Secretary of Housing and
Urban Development may implement the authority to refi-
nance a mortgage held by the Secretary under section
223(a)(8) of the National Housing Act, as added by the
amendment made by subsection (a)(3) of this section, by
notice published in the Federal Register setting forth such
requirements as may be necessary.
SEC. 410. HOME EQUITY CONVERSION MORTGAGES FOR EL-
DERLY HOMEOWNERS.
(a) EXTENSION OF PROGRAM.—The first sentence of
section 255(g) of the National Housing Act (12 U.S.C.
297
1715z–20(g)) is amended by striking ‘‘September 30, 1995’’
and inserting ‘‘September 30, 2000’’.
(b) ELIGIBLE RESIDENCES.—Section 255(d)(3) of the
National Housing Act (12 U.S.C. 1715z–20(d)(3)) is
amended to read as follows:
‘‘(3) be secured by a dwelling that is designed
principally for a 1- to 4-family residence in which
the mortgagor occupies 1 of the units;’’.
(c) EXPANSION OF PROGRAM.—The second sentence of
section 255(g) of the National Housing Act (12 U.S.C.
1715z–20(g)) is amended by striking ‘‘25,000’’ and insert-
ing ‘‘50,000’’.
(d) REPORTS.—Section 255(k) of the National Hous-
ing Act is amended by adding at the end the following new
sentences: ‘‘Each biennial report shall also include the re-
sults of a survey conducted during the period since the most
recent report under this subsection to determine (A) the fi-
nancial and other needs of elderly homeowners that cause
such homeowners to consider obtaining home equity conver-
sion mortgages, and (B) the extent of consumer satisfaction
regarding the program under this section and counseling
provided pursuant to the requirements of this section. In
conducting the survey, the Secretary shall consult a rep-
resentative sample of mortgagors of mortgages insured
under this section and of elderly homeowners who have ex-
298
pressed interest in obtaining, but did not obtain, such mort-
gages.’’.
(e) AVOIDANCE OF PREEMPTION OF STATE LAW.—Sec-
tion 255(b)(3) of the National Housing Act is amended—
(1) in clause (B), by striking ‘‘, notwithstanding
any State constitution, law, or regulation’’; and
(2) by adding at the end the following new sen-
tence: ‘‘Notwithstanding any other provision of this
section, the Secretary may not provide insurance for
a home equity conversion mortgage in the State of
Texas if under the State constitution, or a law or reg-
ulation of such State, such mortgages are prohibited
or foreclosure or forced sale of the property subject to
such a mortgage is prohibited.’’.
SEC. 411. SINGLE FAMILY RISK-SHARING MORTGAGE INSUR-
ANCE PROGRAM.
(a) IN GENERAL.—Title II of the National Housing
Act (12 U.S.C. 1707 et seq.) is amended by adding at the
end the following new section:
‘‘SINGLE FAMILY RISK-SHARING WITH STATE AND LOCAL
AGENCIES
‘‘SEC. 256. (a) PURPOSES.—The purposes of the pro-
gram under this section are (1) to increase the availability
of single family mortgage financing in areas where there
is need for mortgage insurance under this Act that cannot
be met due to particularly high average median house prices
299
in the area, and (2) to foster arrangements with State and
local agencies to share the risk of mortgage insurance.
‘‘(b) AUTHORITY.—Notwithstanding any other provi-
sion of this Act inconsistent with this section, the Secretary
may insure and make commitments to insure under this
section mortgages on single family properties under risk-
sharing mortgage insurance programs established with 1 or
more States or agencies. Under such programs, the Sec-
retary shall insure a portion of the mortgage, and the State
or local agency shall insure the remainder or (at the discre-
tion of the agency) a portion of the remainder and provide
for private mortgage insurance companies to insure any
portion of the remainder not insured by the agency. The
portion of the mortgage insured under this section by the
Secretary and the State or local agency, in the aggregate,
may not exceed 35 percent of the outstanding principal obli-
gation of the mortgage (and such fees, interest, and other
expenses determined by the Secretary to be appropriate).
‘‘(c) ELIGIBLE MORTGAGES.—The Secretary may in-
sure under this section, and make commitments to insure
under this section, only mortgages that—
‘‘(1) are executed—
‘‘(A) in connection with the acquisition of a
single family property; or
300
‘‘(B) for the refinancing of a mortgage that
was previously insured under this section; and
‘‘(2) involve a property located in an area—
‘‘(A) for which the amount under clause (ii)
of section 203(b)(2)(A) is less than the amount
determined under clause (i) of such section for a
residence of the applicable size; and
‘‘(B) that has a State agency that—
‘‘(i) is fully authorized under State
and local laws and is adequately capital-
ized, in the determination of the Secretary,
to carry out this section; and
‘‘(ii)(I) carries the designation of ‘top
tier’ or its equivalent, as evaluated by
Standard and Poors or any other nation-
ally recognized rating agency; or
‘‘(II) receives a rating of ‘A’ for its
general obligation bonds from a nationally
recognized rating agency.
‘‘(d) APPLICATIONS.—
‘‘(1) APPROVAL.—The Secretary may approve an
application submitted by a State or local agency to
establish a risk-sharing program under this section,
only if the Secretary determines that the State or
local agency has demonstrated that—
301
‘‘(A) it has the legal authority under State
law and, where applicable, local law, to partici-
pate in the program under this section;
‘‘(B) it has carried out, or has the potential
to carry out, a financially sound, efficient, and
effective mortgage insurance program; and
‘‘(C) it has the ongoing administrative and
financial capacity necessary to carry out a pro-
gram under this section.
‘‘(2) CANCELLATION
OF
APPROVAL.—The Sec-
retary may cancel approval of a State or local agency
under this section for a violation of requirements and
procedures under the risk-sharing agreement between
the State or local agency and the Secretary or for
other good cause, by giving notice to the State or local
agency. The cancellation shall be effective upon re-
ceipt of the notice by the agency or at a later date
specified by the Secretary. A decision by the Secretary
to cancel approval shall be final and conclusive and
shall not be subject to judicial review.
‘‘(e) DELEGATION
OF AUTHORITY TO INSURE
TO
STATE AND LOCAL AGENCIES.—Pursuant to a risk-sharing
agreement with a State or local agency, the Secretary shall
delegate the authority to insure and make commitments to
insure the portion of mortgages to be insured by the Sec-
302
retary under this section to the State or local agency. The
risk-sharing agreement shall contain such other matters as
the Secretary and the State or local agency agree.
‘‘(f) UNDERWRITING STANDARDS AND LOAN TERMS
AND CONDITIONS.—The State or local agency shall adopt
underwriting standards and loan terms and conditions for
purposes of underwriting loans to be insured under this sec-
tion. Such standards shall be at least as stringent as the
standards pursuant to this Act for mortgages insured under
section 203 and shall be subject to review and approval by
the Secretary.
‘‘(g) MORTGAGE INSURANCE PREMIUMS.—
‘‘(1) REQUIREMENT.—The State or local agency
shall require the payment of mortgage insurance pre-
miums by mortgagors.
‘‘(2) SHARES.—The Secretary shall establish
policies and procedures for the sharing of premiums
between the Secretary and the State or local agency,
based on the relative risk to, and administrative costs
of, the Secretary and the State or local agency. The
share paid to the Secretary shall not be less than an
amount necessary to cover the risk to, and adminis-
trative costs of, the Secretary.
‘‘(h) 
LIMITATIONS
ON
PRINCIPAL
MORTGAGE
AMOUNT.—
303
‘‘(1) INSURED
PORTION.—The portion of the
mortgage insured under this section by the Secretary
may not exceed an amount equal to the lesser of (A)
80 percent of the appraised value of the property, or
(B) the maximum amount the Secretary may insure
under section 203(b) of this Act for the area (but not
including any amount for a mortgage insurance pre-
mium).
‘‘(2) TOTAL
PRINCIPAL
AMOUNT.—The total
principal amount of a mortgage insured under this
section by the Secretary and the State or local agency
(A) shall exceed the maximum amount the Secretary
may insure under subparagraph (A) of the first sen-
tence of section 203(b)(2) for the area, and (B) may
not exceed the conforming loan limitation determined
under section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act for a residence of the ap-
plicable size, as adjusted annually.
‘‘(3) LOAN-TO-VALUE RATIO.—The principal ob-
ligation of a mortgage may not exceed an amount de-
termined in accordance with subparagraph (B) of the
first sentence of section 203(b)(2) plus the mortgage
insurance premium.
‘‘(4) REFINANCING MORTGAGES.—Notwithstand-
ing paragraph (2)(A) or (3), in the case of refinanc-
304
ing of an existing mortgage that was previously in-
sured under this section, the principal obligation of a
refinancing mortgage may not exceed the outstanding
principal balance of the existing mortgage plus any
mortgage insurance premium.
‘‘(i) INSURANCE CLAIMS.—
‘‘(1) PROCEDURE.—In the case of a default and
foreclosure of a mortgage insured under this section,
the mortgagee may file a claim with the State or local
agency for insurance benefits in accordance with re-
quirements established by the State or local agency
and approved by the Secretary. The agency shall pay
the full amount of the claim owed to the mortgagee.
If the loss on the insured mortgage exceeds the amount
of insurance by the agency, the Secretary shall reim-
burse the agency for the difference.
‘‘(2) MUTUAL
MORTGAGE
INSURANCE
FUND.—
The insurance of a mortgage under this section by the
Secretary shall be an obligation of the Mutual Mort-
gage Insurance Fund created pursuant to section 205.
‘‘(j) INAPPLICABILITY
OF
THE ASSIGNMENT PRO-
GRAM.—Section 230 shall not apply to mortgages insured
under the program authorized by this section.
305
‘‘(k) RESTRICTION ON GNMA SECURITIZATION.—The
Government National Mortgage Association shall not
securitize any loans insured under this section.
‘‘(l) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) The term ‘local agency’ means an agency of
a unit of general local government, as defined by the
Secretary, that has the authority to insure mortgages
and to participate with the Secretary in the single
family risk-sharing program under this section, or an
agency or instrumentality of a local agency if the
agency or instrumentality has such authority.
‘‘(2) The term ‘State agency’ means an agency of
a State that has the authority to insure mortgages
and to participate with the Secretary in the single
family risk-sharing program under this section, or an
agency or instrumentality of a State agency if the
agency or instrumentality has such authority.
‘‘(3) The term ‘single family property’ means a
property upon which there is located a dwelling de-
signed principally for occupancy by 1 family, and in-
cludes a condominium and a cooperative.
‘‘(4) The term ‘State’ means the several States,
the Commonwealth of Puerto Rico, the District of Co-
lumbia, Guam, the Commonwealth of the Northern
306
Mariana Islands, American Samoa, and the Virgin
Islands.’’.
(b) REGULATIONS.—The Secretary of Housing and
Urban Development shall issue any regulations necessary
to implement the amendment made by subsection (a).
SEC. 412. DELEGATION OF SINGLE FAMILY MORTGAGE IN-
SURING AUTHORITY TO DIRECT ENDORSE-
MENT MORTGAGEES.
Title II of the National Housing Act (12 U.S.C. 1707
et seq.), as amended by the preceding provisions of this Act,
is further amended by adding at the end the following new
section:
‘‘DELEGATION OF INSURING AUTHORITY TO DIRECT
ENDORSEMENT MORTGAGEES
‘‘SEC. 257. (a) AUTHORITY.—The Secretary may dele-
gate, to one or more mortgagees approved by the Secretary
under the direct endorsement program, the authority of the
Secretary under this Act to insure mortgages involving
property upon which there is located a dwelling designed
principally for occupancy by 1 to 4 families.
‘‘(b) CONSIDERATIONS.—In determining whether to
delegate authority to a mortgagee under this section, the
Secretary shall consider the experience and performance of
the mortgagee under the direct endorsement program, the
default rate of insured mortgages originated by the mortga-
gee compared to the default rate of all insured mortgages
307
in comparable markets, and such other factors as the Sec-
retary determines appropriate to minimize risk of loss to
the insurance funds under this Act.
‘‘(c) ENFORCEMENT OF INSURANCE REQUIREMENTS.—
‘‘(1) IN GENERAL.—If the Secretary determines
that a mortgage insured by a mortgagee pursuant to
delegation of authority under this section was not
originated in accordance with the requirements estab-
lished by the Secretary, and the Secretary pays an in-
surance claim with respect to the mortgage within a
reasonable period specified by the Secretary, the Sec-
retary may require the mortgagee approved under
this section to indemnify the Secretary for the loss.
‘‘(2) FRAUD OR MISREPRESENTATION.—If fraud
or misrepresentation was involved in connection with
the origination, the Secretary may require the mort-
gagee approved under this section to indemnify the
Secretary for the loss regardless of when an insurance
claim is paid.
‘‘(d) TERMINATION OF MORTGAGEE’S AUTHORITY.—If
a mortgagee to which the Secretary has made a delegation
under this section violates the requirements and procedures
established by the Secretary or the Secretary determines
that other good cause exists, the Secretary may cancel a
delegation of authority under this section to the mortgagee
308
by giving notice to the mortgagee. Such a cancellation shall
be effective upon receipt of the notice by the mortgagee or
at a later date specified by the Secretary. A decision by
the Secretary to cancel a delegation shall be final and con-
clusive and shall not be subject to judicial review.
‘‘(e) REQUIREMENTS AND PROCEDURES.—Before ap-
proving a delegation under this section, the Secretary shall
issue regulations establishing appropriate requirements and
procedures, including requirements and procedures govern-
ing the indemnification of the Secretary by the mortgagee.’’.
SEC. 413. ELIGIBILITY OF MORTGAGES ON HOMES ON
LEASED LAND OWNED BY COMMUNITY LAND
TRUSTS.
Title II of the National Housing Act (12 U.S.C. 1707
et seq.), as amended by the preceding provisions of this Act,
is further amended by adding at the end the following new
section:
‘‘ELIGIBILITY OF MORTGAGES ON HOMES ON LEASED LAND
OWNED BY COMMUNITY LAND TRUSTS
‘‘SEC. 258. (a) ELIGIBILITY FOR INSURANCE.—In pro-
viding mortgage insurance under any provision of this title
for a mortgage covering a 1- to 4-family residence, the Sec-
retary may insure a mortgage covering such a residence
which is located on property owned by a community land
trust without regard to the extent to which the resale price
309
of the residence is restricted or the manner in which such
price is established.
‘‘(b) LIMITATION ON RESTRICTIONS.—The Secretary
may not, as a condition of such insurance, establish any
requirements regarding the resale price of residences on
land owned by a community land trust, except that the Sec-
retary may require that a ground lease or other document
establishing legally enforceable restrictions or limitations
on the resale price provide that the restrictions or limita-
tions be cancelable in the event of foreclosure or delivery
of a deed in lieu of foreclosure (or assignment).
‘‘(c) DEFINITION OF ‘COMMUNITY LAND TRUST’.—For
purposes of this section, the term ‘community land trust’
has the meaning given the term in section 233 of the Cran-
ston-Gonzalez National Affordable Housing Act.’’.
SEC. 414. INSURANCE OF 2-STEP SINGLE FAMILY MORT-
GAGES.
Title II of the National Housing Act (12 U.S.C. 1701
et seq.), as amended by the preceding provisions of this Act,
is further amended by adding at the end the following new
section:
‘‘2-STEP SINGLE FAMILY MORTGAGES
‘‘SEC. 259. (a) AUTHORITY.—After making the finding
required under subsection (d), the Secretary may insure
under any provision of this title a mortgage involving prop-
erty upon which there is located a dwelling designed prin-
310
cipally for occupancy by 1 to 4 families, where the mortgage
provides that the effective rate of interest charged is—
‘‘(1) fixed for the duration of a specified period
that consists of not less than the first 5 years of the
mortgage term;
‘‘(2) adjusted by the mortgagee upon the expira-
tion of the specified period referred to in paragraph
(1) for the mortgage; and
‘‘(3) for the term of the mortgage remaining after
such adjustment—
‘‘(A) fixed at the adjusted rate established
pursuant to paragraph (2); or
‘‘(B) periodically adjusted by the mortgagee.
‘‘(b) REDETERMINATION OF RATE.—For each mort-
gage insured pursuant to this section, the adjustment of the
effective rate of interest pursuant to subsection (a)(2) may
be accomplished through adjustments in the monthly pay-
ment amount, the outstanding principal balance, or the
mortgage term, or a combination of such factors, except that
in no case may any extension of a mortgage term result
in a total term in excess of 40 years. The adjustment in
the effective rate of interest shall correspond to a specified
national interest rate index that is approved in regulations
issued by the Secretary and information on which is readily
311
accessible to the mortgagors from generally available pub-
lished sources.
‘‘(c) 
LIMITATIONS
ON
SECOND-STEP
PERIODIC
RATES.—For each mortgage insured pursuant to this sec-
tion for which the effective rate of interest charged pursuant
to subsection (a)(3) is periodically adjusted under subpara-
graph (B) of such subsection, such adjustments in the inter-
est rate—
‘‘(1) may be accomplished through adjustments
in the monthly payment amount, the outstanding
principal balance, or the mortgage term, or a com-
bination of such factors, except that in no case may
any extension of a mortgage term result in a total
term in excess of 40 years;
‘‘(2) shall correspond to a specified national in-
terest rate index that is approved in regulations is-
sued the Secretary and information on which is read-
ily accessible to the mortgagors from generally avail-
able published sources;
‘‘(3) shall be made on an annual basis;
‘‘(4) shall be limited, with respect to any single
interest rate increase, to no more than 1 percent on
the outstanding loan balance; and
312
‘‘(5) be limited to a maximum increase of 5 per-
centage points above the initial contract interest rate
over the term of the mortgage.
‘‘(d) CONDITIONS ON INSURING AUTHORITY.—The Sec-
retary may insure mortgages pursuant to this section only
after determining that the risk posed by such insurance to
the financial safety and soundness of the insurance fund
of which the mortgage insurance is an obligation does not
exceed such risk posed by insurance of mortgages of equiva-
lent terms having fixed interest rates over such terms.
‘‘(e) DESCRIPTION
OF FEATURES.—The Secretary
shall issue regulations requiring that the mortgagee make
available to the mortgagor, at the time of loan application,
a written explanation of the features of the 2-step mortgage
insured pursuant to this section.
‘‘(f) LIMITATION OF TOTAL NUMBER OF MORTGAGES
INSURED.—The aggregate number of mortgages and loans
insured pursuant to this section in any fiscal year may
not exceed 10 percent of the aggregate number of mortgages
and loans insured by the Secretary under this title during
the preceding fiscal year.’’.
313
SEC. 415. MORTGAGE LIMITS FOR MULTIFAMILY PROJECTS
IN HIGH-COST AREAS.
(a) IN GENERAL.—Each of the provisions under sub-
section (b) is amended by striking ‘‘140 percent’’ and in-
serting ‘‘152 percent’’.
(b) PROVISIONS AMENDED.—The provisions under this
subsection are the following sections of title II of the Na-
tional Housing Act (12 U.S.C. 1707 et seq.):
(1) Section 207(c)(3).
(2) Section 213(b)(2).
(3) Section 220(d)(3)(B)(iii).
(4) Section 221(d)(3)(ii).
(5) Section 221(d)(4)(ii).
(6) Section 231(c)(2).
(7) Section 234(e)(3).
SEC. 416. CALCULATION OF CREDIT SUBSIDY FOR FHA
REFINANCINGS AND OFFSET OF NEGATIVE
SUBSIDIES.
(a) REFINANCING.—Paragraph (2) of section 542 of
the National Housing Act (12 U.S.C. 1735f–20(2)) is
amended by adding at the end the following new sentence:
‘‘In the case of a mortgage insured under this Act that refi-
nances an existing insured mortgage, the cost to the Govern-
ment shall not exceed an amount that is determined by ap-
plying the subsidy rate used for the insurance authority
pursuant to which the refinanced mortgage was insured to
314
the amount of the refinancing mortgage which exceeds the
outstanding principal balance of the refinanced mortgage,
which amount may be adjusted, if necessary, by reason of
an extension in the remaining term of the refinanced mort-
gage.’’.
(b) OFFSETS.—Section 542 of the National Housing
Act is amended by adding at the end the following new flush
sentence:
‘‘The cost, as defined in section 502 of the Congressional
Budget Act of 1974, for any fiscal year of new insurance
commitments and of modifications to existing loans, loan
guarantees, or insurance commitments, shall be determined
by subtracting the aggregate amount of negative subsidies
from the aggregate amount of positive subsidies for the fiscal
year.’’.
SEC. 417. APPROVAL OF POINT-OF-USE PURIFICATION SYS-
TEMS AND TESTING OF SYSTEMS.
(a) IN GENERAL.—Section 424 of the Housing and
Community Development Act of 1987 (12 U.S.C. 1701z–
15) is amended—
(1) in subsection (a), by inserting after the pe-
riod at the end the following new sentence: ‘‘The Sec-
retary of Housing and Urban Development shall pro-
vide for the approval under subsection (c) of both
point-of-use and point-of-entry water treatment
315
equipment and water purification systems that meet
the standards established under this section.’’;
(2) in the first sentence of subsection (b), by
striking ‘‘general standards recognized by the Depart-
ment as modified for local or regional conditions’’
and inserting the following: ‘‘standards for testing
using (1) industry-accepted product testing protocols,
or (2) protocols that utilize technically valid meth-
odology using analytical testing methods of the Envi-
ronmental Protection Agency for drinking water qual-
ity and maximum contaminant levels or equivalent
methods’’;
(3) by redesignating subsection (b) (as amended
by paragraph (2) of this section) as subsection (c);
and
(4) by inserting after subsection (a) the following
new subsection:
‘‘(b) POINT-OF-USE EQUIPMENT.—For any property
in which the water treatment or purification system in op-
eration employs point-of-use equipment, the Secretary may
not require that a treatment or purification system be em-
ployed on any water supply source serving the property
that provides water that will not be used primarily for
human consumption.’’.
316
(b) REGULATIONS.—The Secretary of Housing and
Urban Development shall issue any regulations necessary
to carry out section 424 of the Housing and Community
Development Act of 1987, as amended by subsection (a) of
this section, not later than the expiration of the 6-month
period beginning on the date of the enactment of this Act.
SEC. 418. ENERGY EFFICIENT MORTGAGES PILOT PRO-
GRAM.
Section 106 of the Energy Policy Act of 1992 (42
U.S.C. 12712 note) is amended—
(1) in subsection (a)(2)—
(A) in subparagraph (A), by inserting
‘‘(which may be an adjustable rate mortgage in-
sured under section 251 of such Act and may be
a mortgage for a property that is not the prin-
cipal or secondary residence of the mortgagor to
the extent provided in section 203(g) of such
Act)’’ after ‘‘Act’’; and
(B) by adding at the end the following new
subparagraph:
‘‘(D) RATING AND INSTALLATION.—The pro-
gram shall provide that the person conducting
the home energy rating report under subsection
(c)(2) for the property subject to the energy effi-
cient mortgage may also, subject only to the ap-
317
proval of the mortgagee and mortgagor, install
the energy efficiency improvements.’’; and
(2) in subsection (c)—
(A) in paragraph (1), by inserting ‘‘(in-
cluding an adjustable rate mortgage loan eligible
for insurance under section 251 of such Act)’’
after ‘‘Act’’; and
(B) in the first sentence of paragraph (2),
by striking ‘‘the total present value cost’’ and all
that follows through the end of the sentence and
inserting the following: ‘‘energy improvements
that generate energy savings in the first year
after improvement that are greater than the in-
crease in the amount of the loan payment for
such first-year due to the energy improvements.
In the case of a base loan insured under section
251 of the National Housing Act, the interest
rate used to determine the amount of such in-
crease in the loan payment shall be the maxi-
mum allowable interest rate under the mort-
gage.’’.
SEC. 419. EXTENSION OF MULTIFAMILY MORTGAGE CREDIT
DEMONSTRATIONS.
Section 542 of the Housing and Community Develop-
ment Act of 1992 (12 U.S.C. 1707 note) is amended—
318
(1) in subsection (b)(5), by striking ‘‘1993 and
1994’’ and inserting ‘‘1995 and 1996’’; and
(2) in subsection (c)(4), by striking ‘‘1993, 1994,
and 1995’’ and inserting ‘‘1995, 1996, and 1997’’.
SEC. 420. INDIAN HOUSING LOAN GUARANTEES.
(a) LIMITATION ON OUTSTANDING AGGREGATE PRIN-
CIPAL AMOUNT.—Section 184(i)(5)(C) of the Housing and
Community Development Act of 1992 (12 U.S.C. 1515z–
13a(i)(5)(C)) is amended by striking ‘‘fiscal years 1993 and
1994’’ and inserting ‘‘fiscal years 1995 and 1996’’.
(b) AUTHORIZATION OF APPROPRIATIONS FOR GUAR-
ANTEE FUND.—Section 184(i)(7) of the Housing and Com-
munity Development Act of 1992 (12 U.S.C. 1515z–
13a(i)(7)) is amended to read as follows:
‘‘(7) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated to the Guar-
antee Fund to carry out this section $50,000,000 for
fiscal year 1995 and $50,000,000 for fiscal year
1996.’’.
SEC. 421. NATIONAL COMMISSION ON THE FUTURE OF THE
FEDERAL HOUSING ADMINISTRATION.
(a) PURPOSE.—The purpose of this section is to estab-
lish a national commission to develop recommendations re-
garding the appropriate future role of the Federal Govern-
ment in providing mortgage insurance, for modernizing
319
and improving the structure and operations of the Federal
Housing Administration, for protecting the safety and
soundness of the insurance funds of the FHA, and for serv-
ing families currently underserved by the mortgage finance
system.
(b) ESTABLISHMENT.—There is hereby established a
commission to be known as the National Commission on
the Future of the Federal Housing Administration.
(c) MEMBERSHIP.—
(1) IN GENERAL.—The Commission shall consist
of the Secretary of Housing and Urban Development
and 16 members appointed, not later than 60 days
after amounts to carry out this section are made
available under subsection (h), as follows:
(A) 4 members shall be appointed by the
Chairman of the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate and 4
members shall be appointed by the Ranking Mi-
nority Member of such Committee.
(B) 4 members shall be appointed by the
Chairman of the Committee on Banking, Fi-
nance and Urban Affairs of the House of Rep-
resentatives and 4 members shall be appointed
by the Ranking Minority Member of such Com-
mittee.
320
(2) QUALIFICATIONS.—The 8 members of the
Commission appointed under each of subparagraphs
(A) and (B) of paragraph (1) shall include—
(A) 1 individual who represents the mort-
gage finance industry;
(B) 1 individual with knowledge and expe-
rience from a secondary mortgage market entity;
(C) 1 individual with knowledge and expe-
rience concerning home sales or multifamily
housing management;
(D) 1 individual who represents the private
mortgage insurance industry;
(E) 1 individual with knowledge and expe-
rience concerning single family or multifamily
housing asset management;
(F) 1 individual who represents a State or
local housing agency active in single family or
multifamily housing activities;
(G) 1 individual who represents the inter-
ests of consumers or communities, in single fam-
ily or multifamily housing; and
(H) 1 individual who represents or resides
in an urban or rural neighborhood whose resi-
dents consist predominantly of members of mi-
norities.
321
(3) CHAIRPERSON.—The Commission shall elect
a chairperson from among members of the Commis-
sion.
(4) QUORUM.—A majority of the members of the
Commission shall constitute a quorum for the trans-
action of business.
(5) VOTING.—Each member of the Commission
shall be entitled to 1 vote, and all votes shall be given
equal weight.
(6) VACANCIES.—Any vacancy on the Commis-
sion shall not affect the powers of the Commission
and shall be filled in the manner in which the origi-
nal appointment was made.
(7) PROHIBITION ON ADDITIONAL PAY.—Members
of the Commission shall serve without compensation,
but shall be reimbursed for travel, subsistence, and
other necessary expenses incurred in the performance
of their duties as members of the Commission.
(d) SUBCOMMITTEES.—In carrying out its duties
under subsection (e), the Commission shall establish 2 sub-
committees, 1 of which shall carry out such duties with re-
spect to issues relating to mortgage insurance for multifam-
ily housing and 1 of which shall carry out such duties with
respect to issues relating to mortgage insurance for single
family housing.
322
(e) DUTIES.—
(1) IN GENERAL.—The Commission shall conduct
a study of the existing operations of the FHA and
shall make recommendations regarding the future
mission, organization, responsibilities, and function
of the FHA. In conducting the study and formulating
recommendations, the Commission shall—
(A) determine the most appropriate role for
the Federal Government in extending the avail-
ability of mortgage credit and review various al-
ternative mortgage products and, with regard to
the mission and functions of the FHA, the ap-
propriateness of the use of such products by the
FHA;
(B) determine whom FHA programs are in-
tended to serve;
(C) consider whether the FHA could func-
tion more effectively if organized as a govern-
ment corporation, a government-sponsored enter-
prise, or with any other organizational structure
different from the existing structure;
(D) consider whether the personnel, procure-
ment, budgeting, and other requirements gen-
erally applicable to the Federal agencies should
be modified in their applicability to the FHA;
323
(E) review the laws establishing and relat-
ing to the FHA and determine whether amend-
ments to such law would be appropriate to re-
structure the FHA, or to provide new authority
or increased flexibility for the operations of the
FHA;
(F) determine ways in which the FHA can
more effectively contribute to the revitalization of
inner cities and increase housing opportunities
for low-income families;
(G) determine ways to improve the manage-
ment and sale of assets owned by the FHA;
(H) determine ways to reduce the risk of fu-
ture insurance losses from the existing inventory
of outstanding mortgages insured by the FHA;
and
(I) determine ways to improve the private
management of multifamily properties insured
by the FHA.
(2) INTERIM REPORT.—Not later than the expi-
ration of the 10-month period beginning upon the ap-
pointment of all of the members of the Commission
under subsection (c), the Commission shall submit to
the Secretary of Housing and Urban Development
and to the Congress an interim report containing the
324
preliminary information and evaluations specified in
paragraph (1) and initial recommendations for legis-
lative and administrative actions to carry out the de-
terminations made pursuant to paragraph (1).
(3) REPORT.—Not later than the expiration of
the 18-month period beginning upon the appointment
of all of the members of the Commission under sub-
section (c), the Commission shall submit to the Sec-
retary of Housing and Urban Development and to the
Congress a report containing the information and
evaluations specified in paragraph (1) and specific
recommendations for legislative and administrative
actions to carry out the determinations made pursu-
ant to paragraph (1).
(f) POWERS.—
(1) HEARINGS.—The Commission may, for the
purpose of carrying out this section, hold such hear-
ings and sit and act at such times and places as the
Commission considers appropriate.
(2) RULES
AND
REGULATIONS.—The Commis-
sion may adopt such rules and regulations as may be
necessary to establish its procedures and to govern the
manner of its operations, organization, and person-
nel.
(3) ASSISTANCE FROM FEDERAL AGENCIES.—
325
(A) INFORMATION.—The Commission may
secure directly from any department or agency of
the United States such data and information as
the Commission may require for the purpose of
carrying out this section. Upon request of the
Commission, any such department or agency
shall furnish such data or information. The
Commission may acquire data or information
directly from such departments or agencies to the
same extent that the Secretary may acquire such
data or information.
(B) ADMINISTRATIVE SUPPORT.—The Gen-
eral Services Administration shall provide to the
Commission, on a reimbursable basis, adminis-
trative support services requested by the Commis-
sion.
(C) PERSONNEL
DETAILS.—Upon the re-
quest of the chairperson of the Commission, the
Secretary shall, to the extent possible and subject
to the discretion of the Secretary, detail any of
the personnel of the Department of Housing and
Urban Development, on a nonreimbursable basis,
to assist the Commission in carrying out its du-
ties under this section.
326
(4) MAILS.—The Commission may use the Unit-
ed States mails in the same manner and under the
same conditions as other Federal agencies.
(5) CONTRACTING.—The Commission may, to
such extent and in such amounts as are provided in
appropriations Acts, enter into contracts necessary to
carry out its duties under this section.
(6) ADVISORY
COMMITTEE.—The Commission
shall be considered an advisory committee within the
meaning of the Federal Advisory Committee Act.
(7) STAFF.—
(A) EXECUTIVE DIRECTOR.—The Commis-
sion shall appoint an executive director of the
Commission who shall be compensated at a rate
fixed by the Commission, but which may not ex-
ceed the rate established for level V of the Execu-
tive Schedule under title 5, United States Code.
(B) PERSONNEL.—In addition to the execu-
tive director, the Commission may appoint and
fix the compensation of such personnel as the
Commission considers appropriate, in accord-
ance with the provisions of title 5, United States
Code, governing appointments in the competitive
service, and the provisions of chapter 51 and
subchapter III of chapter 53 of such title, relat-
327
ing to classification and General Schedule pay
rates.
(C) LIMITATION.—This paragraph shall be
effective only to the extent amounts are made
available in appropriation Acts.
(g) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) The term ‘‘Commission’’ means the National
Commission on the Future of the Federal Housing
Administration.
(2) The term ‘‘FHA’’ means the Federal Housing
Administration of the Department of Housing and
Urban Development.
(3) The term ‘‘Secretary’’ means the Secretary of
Housing and Urban Development.
(h) FUNDING.—Of any amounts appropriated pursu-
ant to section 501 of the Housing and Urban Development
Act of 1970, the Secretary shall set aside to carry out this
section $1,000,000 for fiscal year 1995. Any amounts made
available pursuant to this subsection shall remain available
until expended.
(i) SUNSET.—The Commission shall terminate upon
the expiration of the 18-month period that begins upon the
appointment of all of the members of the Commission under
subsection (c).
328
SEC. 422. ACTION AND REPORT ON COOPERATIVE HOME-
OWNERSHIP FOR LOW- AND MODERATE-IN-
COME FAMILIES.
(a) REVIEW.—The Secretary of Housing and Urban
Development, acting through the Assistant Secretary who
is the Federal Housing Commissioner, shall review the re-
port of The Urban Institute, dated May 1994 and entitled
‘‘Performance of HUD Subsidized Loans: Does Cooperative
Housing Matter?’’.
(b) ACTION.—Not later than 9 months after the date
of the enactment of this Act, the Secretary shall implement
any recommendations made in the report referred to in sub-
section (a) that (1) the Secretary considers appropriate and
feasible, (2) are within the jurisdiction of the Assistant Sec-
retary referred to in subsection (a), and (3) the Secretary
has authority under law to implement.
(c) REPORT.—The Secretary shall submit a report to
the Congress not later than 9 months after the date of the
enactment of this Act, which shall—
(1) evaluate the report referred to in subsection
(a);
(2) describe any action taken under subsection
(b);
(3) identify and proposes the elimination of any
Federal housing policies or programs that, in the de-
termination of the Secretary, inhibit the development
329
of cooperative homeownership for low- and moderate-
income families; and
(4) recommend any legislative action necessary
to eliminate the policies or programs identified under
paragraph (3).
SEC. 423. STUDY OF ACTIVITY OF PRIVATE MORTGAGE
BANKERS AND INSURERS.
(a) STUDY.—The Secretary of Housing and Urban De-
velopment shall conduct a study to determine the patterns
of lending and insurance activity of private mortgage lend-
ers and private mortgage insurers, respectively. The study
shall be designed to determine—
(1) the geographical areas in which properties
are located for which loans are made by private mort-
gage lenders and the characteristics of such areas;
(2) the extent of lending activity by private
mortgage lenders, in terms of number of loans and
principal amount, in areas having a low median in-
come, a moderate median income, and other areas;
(3) the types of loans made by private mortgage
lenders, and the extent of lending activity, in each of
the areas described in paragraph (2), which shall in-
clude the types and extent of any lending activity
made in connection with economic development of
low- and moderate-income areas;
330
(4) the geographical areas in which properties
are located for which mortgage insurance is provided
by private mortgage insurers and the characteristics
of such areas;
(5) the extent of insurance activity by private
mortgage insurers, in terms of number of loans in-
sured and principal amount insured, in areas having
a low median income, a moderate median income,
and other areas; and
(6) the types of loans insured and extent of in-
surance activity by private mortgage insurers in each
of the areas described in paragraph (5), which shall
include the types and extent of any insurance activity
made in connection with mortgages or loans for eco-
nomic development activity in low- and moderate-in-
come areas.
(b) REPORT.—The Secretary shall submit a report to
the Congress describing the results of the study under this
section not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act.
(c) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘private mortgage insurer’’ means
a person who provides insurance against the
nonpayment of, or default on, a mortgage or loan for
residential or commercial property that is not insur-
331
ance made available under the National Housing Act,
title 38 of the United States Code, or title V of the
Housing Act of 1949; and
(2) the term ‘‘private mortgage lender’’ means
any lender that is not subject to the supervision, ap-
proval, regulation, or insuring of the Board of Gov-
ernors of the Federal Reserve System, the Federal De-
posit Insurance Corporation, the Comptroller of the
Currency, the Office of Thrift Supervision, the Na-
tional Credit Union Administration, or any other
Federal agency that regulates lending activity. The
term does not include institutions engage primarily
in the purchase of mortgage loans.
Subtitle B—Secondary Mortgage
Market Programs
SEC. 441. LIMITATION ON GNMA GUARANTEES OF MORT-
GAGE-BACKED SECURITIES.
Section 306(g)(2) of the Federal National Mortgage As-
sociation Charter Act (12 U.S.C. 1721(g)(2)) is amended
to read as follows:
‘‘(2) Notwithstanding any other provision of law and
subject only to the absence of qualified requests for guaran-
tees, to the authority provided in this subsection, and to
the extent of or in such amounts as any funding limitation
approved in appropriation Acts, the Association shall enter
332
into commitments to issue guarantees under this subsection
in an aggregate amount of $130,000,000,000 during fiscal
year 1995 and $130,000,000,000 during fiscal year 1996.
There are authorized to be appropriated to cover the costs
(as such term is defined in section 502 of the Congressional
Budget Act of 1974) of guarantees issued under this Act
by the Association such sums as may be necessary for each
of fiscal years 1995 and 1996.’’.
SEC. 442. ASSESSMENT COLLECTION DATES FOR OFFICE OF
FEDERAL HOUSING ENTERPRISE OVERSIGHT.
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 assess-
ment shall be payable semiannually for each fiscal
year, on October 1st and April 1st.’’.
Subtitle C—Emergency Mortgage
Relief
SEC. 461. AMENDMENTS TO EMERGENCY HOMEOWNERS’ RE-
LIEF ACT.
(a) FINDINGS.—Section 102(a) of the Emergency
Homeowners’ Relief Act (12 U.S.C. 2701(a)) is amended—
(1) by striking paragraph (1) and inserting the
following new paragraph:
333
‘‘(1) certain homeowners in the United States
are encountering severe economic hardships as a re-
sult of unemployment or a reduction in income;’’;
(2) in paragraph (2), by striking ‘‘adverse eco-
nomic conditions’’ and inserting ‘‘economic hard-
ships’’; and
(3) in paragraph (3), by striking ‘‘economic con-
ditions’’ and inserting ‘‘their economic conditions’’.
(b) MORTGAGES ELIGIBLE FOR ASSISTANCE.—Section
103 of the Emergency Homeowners’ Relief Act (12 U.S.C.
2702) is amended—
(1) in paragraph (5), by striking ‘‘and’’ at the
end;
(2) in paragraph (6)—
(A) by inserting ‘‘a 1- to 4-family residence
that is’’ after ‘‘is’’; and
(B) by striking the period at the end and
inserting ‘‘; and’’; and
(3) by adding at the end the following new para-
graph:
‘‘(7) the delinquency for which the holder of the
mortgage intends to foreclose commenced after the
date of the enactment of the Housing and Community
Development Act of 1994.’’.
334
(c) AUTHORIZATION
OF APPROPRIATIONS.—Section
109(a) of the Emergency Homeowners’ Relief Act (12
U.S.C. 2708(a)) is amended by striking ‘‘, except that’’ and
all that follows through ‘‘$500,000,000’’ and inserting ‘‘for
fiscal years 1995 and 1996’’.
(d) EXPIRATION DATE.—Section 109(b) of the Emer-
gency Homeowners’ Relief Act (12 U.S.C. 2708(b)) is
amended by striking ‘‘September 30, 1977’’ and inserting
‘‘September 30, 1996’’.
(e) NOTIFICATION.—Section 110 of the Emergency
Homeowners’ Relief Act (12 U.S.C. 2709) is amended—
(1) in paragraph (1) of the 1st sentence—
(A) by striking ‘‘October 1, 1977’’ and in-
serting ‘‘September 30, 1996’’; and
(B) by inserting ‘‘single family’’ before ‘‘res-
idential’’;
(2) in paragraph (2) of the 1st sentence, by strik-
ing ‘‘until one year from the date of the enactment of
this title’’ and inserting ‘‘during fiscal years 1995
and 1996’’; and
(3) in the 2d sentence, by striking ‘‘Federal
Home Loan Bank Board, the Federal Savings and
Loan Insurance Corporation’’ and inserting ‘‘Office of
Thrift Supervision’’.
335
(f) REPORTS.—Section 111 of the Emergency Home-
owners’ Relief Act (12 U.S.C. 2710) is amended—
(1) by striking ‘‘Within’’ and all that follows
through ‘‘Congress on’’ and inserting the following:
‘‘For fiscal year 1995 and each fiscal year thereafter
that begins before the date in section 109(b), the Sec-
retary shall submit a report under this section to the
Congress. The report for a fiscal year shall be submit-
ted not later than 60 days after the end of the fiscal
year and shall describe’’;
(2) by striking ‘‘purposes’’ and inserting ‘‘pur-
pose’’;
(3) by inserting ‘‘and’’ before ‘‘(4)’’; and
(4) by striking ‘‘; and (5)’’ and all that follows
and inserting a period.
Subtitle 
D—Nonjudicial 
Fore-
closure of Defaulted Single Fam-
ily Mortgages
SEC. 481. SHORT TITLE.
This subtitle may be cited as the ‘‘Single Family Mort-
gage Foreclosure Act of 1994’’.
SEC. 482. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds that—
(1) disparate State laws under which mortgages
are foreclosed on behalf of the Secretary of Housing
336
and Urban Development covering one- to four-family
residential properties burden certain programs ad-
ministered by the Secretary, increase the costs of col-
lecting these obligations, and cause detriment to the
community generally;
(2) long periods to complete the foreclosure of
these mortgages under certain State laws lead to dete-
rioration in the condition of the properties involved;
necessitate substantial Federal holding expenditures;
increase the risk of vandalism, fire loss, depreciation,
damage, and waste with respect to the properties; and
adversely affect the neighborhoods in which the prop-
erties are located;
(3) these conditions seriously impair the Sec-
retary’s ability to protect the Federal financial inter-
est in the affected properties and frustrate attainment
of the objectives of the underlying Federal program
authority;
(4) the availability of a uniform and more expe-
ditious procedure, with no right of redemption in the
mortgagor or others, for the foreclosure of these mort-
gages by the Secretary will tend to ameliorate these
conditions; and
(5) providing the Secretary with a nonjudicial
foreclosure procedure will reduce unnecessary litiga-
337
tion by removing many foreclosures from the courts
where they contribute to overcrowded calendars.
(b) PURPOSE.—The purpose of this subtitle is to create
a uniform Federal foreclosure remedy for single family
mortgages that (1) are held by the Secretary of Housing
and Urban Development pursuant to title I or title II of
the National Housing Act or (2) secure loans obligated by
the Secretary under section 312 of the Housing Act of 1964.
SEC. 483. DEFINITIONS.
As used in this subtitle—
(1) the term ‘‘bona fide purchaser’’ means a pur-
chaser for value in good faith and without notice of
any adverse claim, who will, therefore, acquire the se-
curity property free of any adverse claim;
(2) the term ‘‘mortgage’’ means a deed of trust,
mortgage, deed to secure debt, security agreement, or
any other form of instrument under which any inter-
est in property, real, personal or mixed, or any inter-
est in property including leaseholds, life estates, rever-
sionary interests, and any other estates under appli-
cable State law, is conveyed in trust, mortgaged, en-
cumbered, pledged, or otherwise rendered subject to a
lien for the purpose of securing the payment of money
or the performance of an obligation;
338
(3) the term ‘‘single family mortgage’’ means a
mortgage that covers property on which there is lo-
cated a one- to four-family residence, which mort-
gage—
(A) is held by the Secretary pursuant to
title I or title II of the National Housing Act,
or
(B) secures a loan obligated by the Sec-
retary under section 312 of the Housing Act of
1964, as it existed before its repeal by section
289 of the Cranston-Gonzalez National Afford-
able Housing Act (except that a mortgage secur-
ing such a loan that covers property containing
non-residential space and a one- to four-family
dwelling shall not be subject to this Act);
(4) the term ‘‘mortgage agreement’’ means the
note or debt instrument and the mortgage instrument,
deed of trust instrument, trust deed, or instrument or
instruments creating the mortgage, including any in-
strument incorporated by reference therein and any
instrument or agreement amending or modifying any
of the foregoing;
(5) the term ‘‘mortgagor’’ means the obligor,
grantor, or trustor named in the mortgage agreement
and, unless the context otherwise indicates, includes
339
the current owner of record of the security property
whether or not personally liable on the mortgage debt;
(6) the term ‘‘owner’’ means any person who has
an ownership interest in property and includes heirs,
devisees, executors, administrators, and other personal
representatives, and trustees of testamentary trusts if
the owner of record is deceased;
(7) the term ‘‘person’’ includes any individual,
group of individuals, association, partnership, cor-
poration, or organization;
(8) the terms ‘‘record’’ and ‘‘recorded’’ include
‘‘register’’ and ‘‘registered’’ in the instance of reg-
istered land;
(9) the term ‘‘security property’’ means the prop-
erty (real, personal or mixed) or an interest in prop-
erty (including leaseholds, life estates, reversionary
interests, and any other estates under applicable
State law), together with fixtures and other interests
subject to the lien of the mortgage under applicable
State law;
(10) the term ‘‘State’’ means the several States,
the District of Columbia, the Commonwealth of Puer-
to Rico, the United States Virgin Islands, Guam,
American Samoa, the Northern Mariana Islands, the
340
Trust Territory of the Pacific Islands, and Indian
tribes as defined by the Secretary;
(11) the term ‘‘county’’ means county as defined
in section 2 of title I, United States Code; and
(12) the term ‘‘Secretary’’ means the Secretary of
Housing and Urban Development.
SEC. 484. APPLICABILITY.
Single family mortgages encumbering real estate lo-
cated in any State may be foreclosed by the Secretary in
accordance with this subtitle, or pursuant to other fore-
closure procedures available, at the option of the Secretary.
SEC. 485. DESIGNATION OF FORECLOSURE COMMISSIONER.
A foreclosure commissioner or commissioners des-
ignated pursuant to this subtitle shall have a nonjudicial
power of sale as provided in this subtitle. Where the Sec-
retary wishes to foreclose upon a single family mortgage,
the Secretary may designate a foreclosure commissioner
and, with or without cause, may designate a substitute fore-
closure commissioner to replace a previously designated
foreclosure commissioner, by executing a duly acknowl-
edged, written designation stating the name and business
or residential address of the commissioner or substitute
commissioner. The designation shall be effective upon execu-
tion. The foreclosure commissioner, if a natural person,
shall be a resident of the State in which the security prop-
341
erty is located and, if not a natural person, the foreclosure
commissioner must be duly authorized to transact business
under the laws of the State in which the security property
is located. The foreclosure commissioner shall be a person
who is responsible, financially sound, and competent to con-
duct the foreclosure. More than one foreclosure commissioner
may be designated. If a natural person is designated as
foreclosure commissioner or substitute foreclosure commis-
sioner, such person shall be designated by name, except that
where such person is designated in his or her capacity as
an official or employee of a government or corporate entity,
such person may be designated by his or her unique title
or position instead of by name.
SEC. 486. PREREQUISITES TO FORECLOSURE.
Foreclosure by the Secretary under this subtitle of a
single family mortgage may be commenced, as provided in
section 488, upon the breach of a covenant or condition in
the mortgage agreement for which foreclosure is authorized
under the mortgage, except that no such foreclosure may
be commenced unless any previously pending proceeding,
judicial or nonjudicial, separately instituted by the Sec-
retary to foreclose the mortgage other than under this sub-
title has been withdrawn, dismissed, or otherwise termi-
nated. No such separately instituted foreclosure proceeding
on the mortgage shall be instituted by the Secretary during
342
the pendency of foreclosure pursuant to this subtitle. Noth-
ing in this subtitle shall preclude the Secretary from enforc-
ing any right, other than foreclosure, under applicable Fed-
eral or State law, including any right to obtain a monetary
judgment. Nothing in this subtitle shall preclude the Sec-
retary from foreclosing under this subtitle where the Sec-
retary has obtained or is seeking any other remedy avail-
able pursuant to Federal or State law or under the mort-
gage agreement, including, but not limited to, the appoint-
ment of a receiver, mortgagee-in-possession status, or relief
under an assignment of rents.
SEC. 487. NOTICE OF FORECLOSURE SALE.
The notice of foreclosure sale to be served in accordance
with this subtitle shall be subscribed with the name and
address of the foreclosure commissioner and the date on
which subscribed, and shall set forth the following informa-
tion:
(1) The names of the Secretary, the original
mortgagee (if other than the Secretary), and the origi-
nal mortgagor.
(2) The street address or a description of the lo-
cation of the security property, and a description of
the security property, sufficient to identify the prop-
erty to be sold.
343
(3) The date of the mortgage, the office in which
the mortgage is recorded, and the liber and folio or
other description of the location of recordation of the
mortgage.
(4) The failure to make payment, including the
due date of the earliest installment payment remain-
ing wholly unpaid as of the date the notice is sub-
scribed, or the description of other default or defaults
upon which foreclosure is based, and the acceleration
of the secured indebtedness.
(5) The date, time, and place of the foreclosure
sale.
(6) A statement that the foreclosure is being con-
ducted pursuant to this subtitle.
(7) The types of costs, if any, to be paid by the
purchaser upon transfer of title.
(8) The amount and method of deposit to be re-
quired at the foreclosure sale (except that no deposit
shall be required of the Secretary), the time and meth-
od of payment of the balance of the foreclosure pur-
chase price, and other appropriate terms of sale.
SEC. 488. COMMENCEMENT OF FORECLOSURE.
(a) REQUEST.—If the Secretary as holder of a single
family mortgage determines that the prerequisites to fore-
closure set forth in section 486 are satisfied, the Secretary
344
may request the foreclosure commissioner to commence fore-
closure of a single family mortgage. Upon such request, the
foreclosure commissioner shall commence foreclosure of the
mortgage, by commencing service of a notice of default and
foreclosure sale in accordance with section 489.
(b) SUBSTITUTE COMMISSIONER.—After commence-
ment of a foreclosure under this subtitle, the Secretary may
designate a substitute foreclosure commissioner at any time
before the time of foreclosure sale, and the foreclosure shall
continue without prejudice, unless the substitute commis-
sioner, in his or her sole discretion, finds that continuation
of the foreclosure sale will unfairly affect the interests of
the mortgagor. If the substitute commissioner makes such
a finding, the substitute commissioner shall cancel the fore-
closure sale, or adjourn such sale in the manner provided
in section 491(c). Upon designation of a substitute fore-
closure commissioner, a copy of the written notice of such
designation referred to in section 485 shall be served (1)
by mail, as provided in such section 489 (except that the
minimum time periods between mailing and the date of
foreclosure sale prescribed in such section shall not apply),
or (2) in any other manner which, in the substitute commis-
sioner’s sole discretion, is conducive to achieving timely no-
tice of such substitution.
345
SEC. 489. SERVICE OF NOTICE OF FORECLOSURE.
The foreclosure commissioner shall serve the notice of
foreclosure sale provided for in section 487 upon the follow-
ing persons and in the following manner, and no additional
notice shall be required to be served, notwithstanding any
notice requirements of any State or local law:
(1) TIMING.—At least 45 days prior to the date
of the foreclosure sale, the notice of foreclosure sale re-
quired by section 488 of this subtitle shall be filed in
the manner authorized for filing a notice of an action
concerning real property according to the law of the
State where the security property is located or, if
none, in the manner authorized by section 3201 of
title 28, United States Code.
(2) NOTICE BY MAIL.—The notice of foreclosure
sale shall be sent by certified or registered mail, post-
age prepaid and return receipt requested to the fol-
lowing:
(A) The current security property owner of
record, as the record exists 60 days before the
date originally set for foreclosure sale, whether or
not the notice describes a sale adjourned as pro-
vided in this subtitle.
(B) All mortgagors of record or other per-
sons who appear of record or in the mortgage
agreement to be liable for part or all of the mort-
346
gage debt, as the record exists 60 days before the
date originally set for foreclosure sale, whether or
not the notice describes a sale adjourned as pro-
vided in this subtitle, except any such mortga-
gors or persons who have been released.
(C) All dwelling units in the security prop-
erty, whether or not the notice describes a sale
adjourned as provided in this subtitle.
(D) All persons holding liens of record upon
the security property, as the record exists 60
days before the date originally set for foreclosure
sale, whether or not the notice describes a sale
adjourned as provided in this subtitle.
Notice under subparagraphs (A) and (B) of this para-
graph shall be mailed at least 45 days before the date
of foreclosure sale, and shall be mailed to the owner
or mortgagor at the last known address of the owner
or mortgagor, or, if none, to the address of the secu-
rity property, or, at the discretion of the foreclosure
commissioner, to any other address believed to be that
of such owner or mortgagor. Notice under subpara-
graph (C) of this paragraph shall be mailed at least
45 days before the date of foreclosure sale. If the
names of the occupants of the security property are
not known to the Secretary, or the security property
347
has more than one dwelling, the notice shall be posted
at the security property at least 45 days prior to the
foreclosure sale. Notice under subparagraph (D) of
this paragraph shall be mailed at least 45 days before
the date of foreclosure sale, and shall be mailed to
each such lienholder’s address as stated of record or,
at the discretion of the foreclosure commissioner, to
any other address believed to be that of such
lienholder. Notice by mail pursuant to this subsection
or section 488(b) shall be deemed duly given upon
mailing, whether or not received by the addressee and
whether or not a return receipt is received or the let-
ter is returned.
(3) PUBLICATION.—A copy of the notice of de-
fault and foreclosure sale shall be published, as pro-
vided herein, once a week during three successive cal-
endar weeks before the sale date. Such publication
shall be in a newspaper or newspapers having general
circulation in the county or counties in which the se-
curity property being sold is located. To the extent
practicable, the newspaper or newspapers chosen shall
be a newspaper or newspapers, if any is available,
having circulation conducive to achieving notice of
foreclosure by publication. A legal newspaper that is
accepted as a newspaper of legal record in the county
348
or counties in which the security property being sold
is located shall be considered a newspaper having gen-
eral circulation for the purposes of this paragraph.
Should there be no newspaper published at least week-
ly which has a general circulation in one of the coun-
ties in which the security property being sold is lo-
cated, copies of the notice of default and foreclosure
sale shall be posted at the courthouse of any county
or counties in which the security property is located
and at the place where the sale is to be held at least
21 days before the date of sale.
SEC. 490. PRESALE REINSTATEMENT.
(a) IN GENERAL.—Except as provided in sections
488(b) and 491(c), the foreclosure commissioner shall with-
draw the security property from foreclosure and cancel the
foreclosure sale only if—
(1) the Secretary so directs the commissioner
prior to or at the time of sale;
(2) the commissioner finds, upon application of
the mortgagor at least three days before the date of
sale, that the default or defaults upon which the fore-
closure is based did not exist at the time of service of
the notice of default and foreclosure sale; or
(3)(A) in the case of a foreclosure involving a
monetary default, there is tendered to the foreclosure
349
commissioner before public auction is completed the
entire amount of principal and interest which would
be due if payments under the mortgage had not been
accelerated;
(B) in the case of a foreclosure involving a
nonmonetary default, the foreclosure commissioner,
upon application of the mortgagor before the date of
foreclosure sale, finds that such default is cured; and
(C) there is tendered to the foreclosure commis-
sioner before public auction is completed all amounts
due under the mortgage agreement (excluding addi-
tional amounts which would have been due if mort-
gage payments had been accelerated), all amounts of
expenditures secured by the mortgage, and all costs of
foreclosure incurred for which payment from the pro-
ceeds of foreclosure is provided in section 492, except
that the Secretary shall have discretion to refuse to
cancel a foreclosure pursuant to this paragraph if the
current mortgagor or owner of record has on one or
more previous occasions caused a foreclosure of the
mortgage, commenced pursuant to this subtitle or oth-
erwise, to be canceled by curing a default.
(b) OPPORTUNITY TO SECRETARY.—Before withdraw-
ing the security property from foreclosure in the cir-
cumstances described in subsection (a)(2) or (a)(3), the fore-
350
closure commissioner shall afford the Secretary a reasonable
opportunity to demonstrate why the security property
should not be so withdrawn.
(c) EFFECT ON MORTGAGE.—In any case in which a
foreclosure commenced under this subtitle is canceled, the
mortgage shall continue in effect as though acceleration had
not occurred.
(d) EFFECT ON SUBSEQUENT FORECLOSURE.—If the
foreclosure commissioner cancels a foreclosure sale under
this subtitle a new foreclosure may be subsequently com-
menced as provided in this subtitle.
(e) NOTICE OF CANCELLATION.—The foreclosure com-
missioner shall file a notice of cancellation in the same
place and manner provided for filing the notice of fore-
closure sale in section 489.
SEC. 491. CONDUCT OF SALE AND ADJOURNMENT.
(a) TIME AND LOCATION.—Foreclosure sale pursuant
to this subtitle shall be at public auction, and shall be sched-
uled to begin between the hours of 9 a.m. and 4 p.m. local
time. The foreclosure sale shall be held at a location speci-
fied in the notice of default and foreclosure sale, which shall
be a location where foreclosure real estate auctions are cus-
tomarily held in the county or one of the counties in which
the property to be sold is located, or at a courthouse therein,
or at or on the property to be sold. Sale of security property
351
situated in two or more counties may be held in any one
of the counties in which any part of the security property
is situated. The foreclosure commissioner may designate the
order in which multiple tracts of security are sold.
(b) SALE PROCEDURES.—The foreclosure commis-
sioner shall conduct the foreclosure sale in accordance with
the provisions of this subtitle and in a manner fair to both
the mortgagor and the Secretary. Written one-price sealed
bids shall be accepted by the foreclosure commissioner from
the Secretary and other persons for entry by announcement
by the commissioner at the sale. The Secretary and any
other person may bid at the foreclosure sale, including the
Secretary or any other person who has submitted a written
one-price bid. The foreclosure commissioner or any relative,
related business entity, or employee of such commissioner
or entity shall not be permitted to bid in any manner on
the security property subject to foreclosure sale, except that
the foreclosure commissioner or an auctioneer may be di-
rected by the Secretary to enter a bid on the Secretary’s
behalf. The foreclosure commissioner may serve as auc-
tioneer, or, in accordance with regulations of the Secretary,
may employ an auctioneer to be paid from the commission
provided for in section 492(5).
(c) ADJOURNMENT
OR
CANCELLATION.—The fore-
closure commissioner shall have discretion, prior to or at
352
the time of sale to adjourn or cancel the foreclosure sale
if the commissioner determines, in the commissioner’s dis-
cretion, that circumstances are not conducive to a sale
which is fair to the mortgagor and the Secretary or that
additional time is necessary to determine whether the secu-
rity property should be withdrawn from foreclosure as pro-
vided in section 490. The foreclosure commissioner may ad-
journ a sale to a later hour the same day by announcing
or posting the new time and place of the foreclosure sale,
or may adjourn the foreclosure sale for not less than 9 nor
more than 31 days, in which case the commissioner shall
serve a notice of default and foreclosure sale revised to recite
that the foreclosure sale has been adjourned to a specified
date and to include any corrections the foreclosure commis-
sioner deems appropriate. Such notice shall be served by
publication and mailing in accordance with section 489,
except that publication may be made on any of 3 separate
days before the revised date of foreclosure sale, and mailing
may be made at any time at least 7 days before the date
to which the foreclosure sale has been adjourned.
(d) DEPOSIT.—The foreclosure commissioner may re-
quire a bidder to make a cash deposit in an amount or
percentage set by him and stated in the notice of foreclosure
sale before the bid is accepted. A successful bidder at the
foreclosure sale who fails to comply with the terms of the
353
sale may be required to forfeit the cash deposit or, at the
election of the foreclosure commissioner after consultation
with the Secretary, shall be liable to the agency for any
costs incurred by the agency as a result of such failure.
(e) PRESUMPTION.—Any foreclosure sale held in ac-
cordance with this subtitle shall be conclusively presumed
to have been conducted in a legal, fair, and reasonable man-
ner. The sale price shall be conclusively presumed to be rea-
sonable and equal to the fair market value of the property.
SEC. 492. FORECLOSURE COSTS.
The following foreclosure costs shall be paid from the
sale proceeds before satisfaction of any other claim to such
sale proceeds:
(1) Necessary advertising costs and postage in-
curred in giving notice pursuant to sections 489 and
491.
(2) Mileage for posting notices and for the fore-
closure commissioner’s or auctioneer’s attendance at
the sale as provided in section 1921 of title 28,
United States Code, for mileage by the most reason-
able road distance.
(3) Reasonable and necessary costs actually in-
curred in connection with any necessary search of
title and lien records.
354
(4) Necessary out-of-pocket costs incurred by the
foreclosure commissioner to record documents.
(5) A commission for the foreclosure commis-
sioner other than an employee of the United States for
the conduct of the foreclosure to the extent authorized
by the Secretary.
SEC. 493. DISPOSITION OF SALE PROCEEDS.
Money realized from a foreclosure sale shall be made
available for obligation and expenditure—
(1) first, to cover the costs of foreclosure provided
for in section 492;
(2) then, to pay valid tax liens or assessments if
required by the notice of foreclosure sale;
(3) then, to pay any liens recorded before the re-
cording of the mortgage which are required to be paid
in conformity with the terms of sale in the notice of
foreclosure sale;
(4) then, to service charges and advances for
taxes, assessments, and property insurance premiums;
(5) then, to the interest;
(6) then, to the principal balance secured by the
mortgage (including expenditures for the necessary
protection, preservation, and repair of the security
property as authorized under the mortgage agreement
355
and interest thereon if provided for in the mortgage
agreement); and
(7) then, to late charges.
Any surplus after payment of the foregoing shall be paid
to holders of liens recorded after the mortgage in the order
of priority under Federal law or the law of the State where
the security property is located and then to the appropriate
mortgagor. If the person to whom such surplus is to be paid
cannot be located, or if the surplus available is insufficient
to pay all claimants and the claimants cannot agree on
the allocation of the surplus, or if any person claiming an
interest in the mortgage proceeds does not agree that some
or all of the sale proceeds should be paid to a claimant as
provided in this section, that part of the sale proceeds in
question may be deposited by the foreclosure commissioner
with an appropriate official or court authorized under law
to receive disputed funds in such circumstances. If such a
procedure for the deposit of disputed funds is not available,
and the foreclosure commissioner files a bill of interpleader
or is sued as a stakeholder to determine entitlement to such
funds, the foreclosure commissioner’s necessary costs in tak-
ing or defending such action shall be deductible from the
disputed funds.
356
SEC. 494. TRANSFER OF TITLE AND POSSESSION.
(a) DELIVERY OF DEED.—The foreclosure commis-
sioner shall deliver a deed or deeds to the purchaser or pur-
chasers without warranty or covenants to the purchaser or
purchasers and obtain the balance of the purchase price in
accordance with the terms of sale provided in the notice of
default and foreclosure sale. Notwithstanding State law to
the contrary, the commissioner’s deed shall be a conveyance
of property, and no judicial proceeding shall be required
ancillary or supplementary to the procedures provided in
this subtitle to assure the validity of the conveyance or con-
firmation of such conveyance.
(b) POSSESSION.—A purchaser at a foreclosure sale
held pursuant to this subtitle shall be entitled to possession
upon passage of title to the mortgaged property, subject to
an interest or interests not barred under section 496. Any
person remaining in possession after the passage of title
shall be deemed a tenant at sufferance subject to eviction
under local law.
(c) DEATH OF PURCHASER.—If a purchaser dies before
execution and delivery of the deed conveying the property
to the purchaser, the foreclosure commissioner shall execute
and deliver the deed to the representative of the purchaser’s
estate upon payment of the purchase price in accordance
with the terms of sale. Such delivery to the representative
357
of the purchaser’s estate shall have the same effect as if ac-
complished during the lifetime of the purchaser.
(d) BONA FIDE PURCHASER.—The purchaser of prop-
erty under this subtitle shall be presumed to be a bona fide
purchaser without notice of defects, if any, in the title con-
veyed to said purchaser if the purchaser would have been
considered a bona fide purchaser without notice had the sale
been made voluntarily and in person by the debtor.
(e) NULLIFICATION
OF RIGHT
OF REDEMPTION.—
There shall be no right of redemption, or right of possession
based upon right of redemption, in the mortgagor or others
subsequent to a foreclosure pursuant to this subtitle. Section
204(l) of the National Housing Act and section 701 of the
Department of Housing and Urban Development Reform
Act of 1989 shall not apply to mortgages foreclosed under
this subtitle.
(f) TAX.—When conveyance is made to the Secretary,
no tax shall be imposed or collected with respect to the fore-
closure commissioner’s deed, whether as a tax upon the in-
strument or upon the privilege of conveying or transferring
title to the property. Failure to collect or pay a tax of the
type and under the circumstances stated in the preceding
sentence shall not be grounds for refusing to record such
a deed, for failing to recognize such recordation as impart-
358
ing notice, or for denying the enforcement of such a deed
and its provisions in any State or Federal court.
SEC. 495. RECORD OF FORECLOSURE AND SALE.
(a) RECORD.—To establish a sufficient record of fore-
closure and sale, the foreclosure commissioner shall include
in the recitals of the deed to the purchaser or prepare an
affidavit or addendum to the deed stating—
(1) the date, time and place of sale;
(2) that the mortgage was held by the Secretary,
the date of the mortgage, the office in which the mort-
gage was recorded, and the liber and folio or other de-
scription of the recordation of the mortgage;
(3) the particulars of the foreclosure commis-
sioner’s service of notice of default and foreclosure sale
in accordance with sections 489 and 491;
(4) the date and place of filing the notice of fore-
closure sale;
(5) that the foreclosure was conducted in accord-
ance with the provisions of this subtitle and with the
terms of the notice of default and foreclosure sale; and
(6) the sale amount.
(b) EFFECT
OF STATEMENTS.—The statements set
forth in subsection (a) shall be prima facie evidence of the
truth of such recitals and statement of facts in any Federal
or State court; and shall be a conclusive presumption in
359
favor of bona fide purchasers and encumbrancers for value
without notice. Encumbrancers for value include liens
placed by lenders who provide the purchaser with purchase
money in exchange for a security interest in the newly-con-
veyed property.
(c) RECORDATION.—The deed executed by the fore-
closure commissioner, the foreclosure commissioner’s affida-
vit and any other instruments submitted for recordation in
relation to the foreclosure of the security property under this
subtitle shall be accepted for recordation by the registrar
of deeds or other appropriate official of the county or coun-
ties in which the security property is located upon ten-
dering of payment of the usual recording fees for such in-
struments without regard to the compliance of those instru-
ments with local filing requirements.
SEC. 496. EFFECT OF SALE.
A sale, made and conducted as prescribed in this sub-
title to a bona fide purchaser, shall be an entire bar of all
claims upon, or with respect to, the property sold, of each
of the following persons:
(1) Any person to whom the notice of foreclosure
sale was mailed as provided in this subtitle, and the
heir, devisee, executor, administrator, successor or as-
signee claiming under any such person.
360
(2) Any person claiming any interest in the
property subordinate to that of the mortgage, if such
person had actual knowledge of the sale.
(3) Each person, claiming any interest in the
property, whose assignment, mortgage, or other con-
veyance was not duly recorded or filed in the proper
place for recording or filing, or whose judgment or de-
cree was not duly docketed or filed in the proper place
for docketing or filing, prior to the date on which the
notice of sale was first served by publication, as re-
quired by section 489(2); and the executor, adminis-
trator, or assignee of such a person.
(4) Every other person claiming under a statu-
tory lien or encumbrance created subsequent to the re-
cording or filing of the mortgage being foreclosed, at-
taching to the title or interest of any person des-
ignated in any of the foregoing subsections of this sec-
tion.
SEC. 497. COMPUTATION OF TIME.
Periods of time provided for in this subtitle shall be
calculated in consecutive calendar days including the day
or days on which the actions or events occur or are to occur
for which the period of time is provided and including the
day on which an event occurs or is to occur from which
the period is to be calculated.
361
SEC. 498. SEPARABILITY.
If any clause, sentence, paragraph, or part of this sub-
title shall, for any reason, be adjudged by a court of com-
petent jurisdiction to be invalid or invalid as applied to
a class of cases, such judgment shall not affect, impair, or
invalidate the remainder thereof and of this subtitle, but
shall be confined in its operation to the clause, sentence,
paragraph, or part thereof directly involved in the con-
troversy in which such judgment shall have been rendered.
SEC. 499. DEFICIENCY JUDGMENT.
(a) IN GENERAL.—If after deducting the disburse-
ments provided for in section 493 of this subtitle, the price
at which the security property is sold at a foreclosure sale
is less than the unpaid balance of the debt secured by the
security property, resulting in a deficiency, the Secretary
may refer the matter to the Attorney General who may com-
mence an action or actions against any or all debtors to
recover the deficiency, unless specifically prohibited by the
mortgage. The United States is also entitled to recover any
amount authorized by section 3011 of title 28, United
States Code, and costs of the action.
(b) LIMITATION.—Any action commenced to recover
the deficiency must be brought within 6 years of the last
sale of the security property.
362
TITLE V—RURAL HOUSING
SEC. 501. PROGRAM AUTHORIZATIONS.
(a) INSURANCE AND GUARANTEE AUTHORITY.—Sec-
tion 513(a) of the Housing Act of 1949 (42 U.S.C. 1483(a))
is amended to read as follows:
‘‘(a) INSURANCE AND GUARANTEE AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary may, to the
extent approved in appropriation Acts, insure and
guarantee loans under this title during fiscal years
1995 and 1996, in aggregate amounts not to exceed
$3,231,103,950 and $3,360,037,069, respectively, as
follows:
‘‘(A) For insured or guaranteed loans under
section 502 on behalf of low-income borrowers re-
ceiving assistance under section 521(a)(1),
$1,802,500,000 
for 
fiscal 
year 
1995 
and
$1,856,575,000 for fiscal year 1996.
‘‘(B) For guaranteed loans under section
502(h) on behalf of low- and moderate-income
borrowers, $772,500,000 for fiscal year 1995 and
$795,675,000 for fiscal year 1996.
‘‘(C) 
For 
loans 
under 
section 
504,
$36,050,000 for fiscal year 1995 and $37,131,500
for fiscal year 1996.
363
‘‘(D) For insured loans under section 514,
$18,053,950 for fiscal year 1995 and $18,595,569
for fiscal year 1996.
‘‘(E) For insured loans under section 515,
$600,000,000 
for 
fiscal 
year 
1995 
and
$650,000,000 for fiscal year 1996.
‘‘(F) For loans under section 523(b)(1)(B),
$1,000,000 for fiscal year 1995 and $1,030,000
for fiscal year 1996.
‘‘(G) For site loans under section 524,
$1,000,000 for fiscal year 1995 and $1,030,000
for fiscal year 1996.
‘‘(2) LIMITATION ON USE.—Notwithstanding any
other provision of law, insured or guaranteed loan
authority in this title for any fiscal year shall not be
transferred or used for any purpose not specified in
this title.’’.
(b) AUTHORIZATION
OF APPROPRIATIONS.—Section
513(b) of the Housing Act of 1949 (42 U.S.C. 1483(b)) is
amended to read as follows:
‘‘(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated for fiscal years 1995 and
1996, and to remain available until expended, the following
amounts:
364
‘‘(1) For grants under section 502(c)(5)(C)(i),
$10,000,000 for fiscal year 1995, and $10,000,000 for
fiscal year 1996.
‘‘(2) For grants under section 504, $31,000,000
for fiscal year 1995 and $31,930,000 for fiscal year
1996.
‘‘(3) For purposes of section 509(c), $1,000,000
for fiscal year 1995 and $1,030,000 for fiscal year
1996.
‘‘(4) For project preparation grants under sec-
tion 509(f)(6), $5,688,278 for fiscal year 1995 and
$5,858,926 for fiscal year 1996.
‘‘(5) In fiscal years 1995 and 1996, such sums
as may be necessary to meet payments on notes or
other obligations issued by the Secretary under section
511 equal to—
‘‘(A) the aggregate of the contributions
made by the Secretary in the form of credits on
principal due on loans made pursuant to section
503; and
‘‘(B) the interest due on a similar sum rep-
resented by notes or other obligations issued by
the Secretary.
365
‘‘(6) For grants for service coordinators under
section 515(y), $1,073,260 for fiscal year 1995 and
$1,105,458 for fiscal year 1996.
‘‘(7) For financial assistance under section
516—
‘‘(A) for low-rent housing and related facili-
ties for domestic farm labor under subsections
(a) through (j) of such section, $15,000,000 for
fiscal year 1995 and $18,000,000 for fiscal year
1996; and
‘‘(B) for housing for rural homeless and mi-
grant farmworkers under subsection (k) of such
section, $10,269,230 for fiscal year 1995 and
$11,407,307 for fiscal year 1996.
‘‘(8) 
For 
grants 
under 
section 
523(f),
$14,918,314 for fiscal year 1995 and $15,365,863 for
fiscal year 1996.
‘‘(9) For grants under section 533, $33,056,408
for fiscal year 1993 and $34,048,100 for fiscal year
1994.
‘‘(10) For grants under section 538, $10,000,000
for fiscal year 1995, which shall remain available
until the end of fiscal year 1997.
366
‘‘(11) 
For 
assistance 
under 
section 
539,
$10,000,000 for fiscal year 1995 and $12,000,000 for
fiscal year 1996.’’.
(c) RENTAL ASSISTANCE PAYMENT CONTRACTS.—Sec-
tion 513(c) of the Housing Act of 1949 (42 U.S.C.
1483(c)(1)) is amended by striking ‘‘(c)’’ and all that fol-
lows through the end of paragraph (1) and inserting the
following:
‘‘(c) RENTAL AND OPERATING ASSISTANCE.—(1) The
Secretary, to the extent approved in appropriations Acts
for fiscal years 1995 and 1996, may enter into rental assist-
ance payment contracts under section 521(a)(2)(A) and
contracts for operating assistance under section 521(a)(5),
aggregating $454,079,620 for fiscal year 1995 and
$467,702,009 for fiscal year 1996.’’.
(d) SUPPLEMENTAL RENTAL ASSISTANCE PAYMENT
CONTRACTS.—Section 513(d) of the Housing Act of 1949
(42 U.S.C. 1483(d)) is amended to read as follows:
‘‘(d) SUPPLEMENTAL
RENTAL
ASSISTANCE
CON-
TRACTS.—The Secretary, to the extent approved in appro-
priations Acts for fiscal years 1995 and 1996, may enter
into 5-year supplemental rental assistance contracts under
section 502(c)(5)(D) aggregating $13,070,160 for fiscal year
1995 and $13,462,265 for fiscal year 1996.’’.
367
(e) RURAL HOUSING VOUCHER AUTHORITY.—Section
513(e) of the Housing Act of 1949 (42 U.S.C. 1483(e)) is
amended to read as follows:
‘‘(e) RURAL HOUSING VOUCHERS.—There are author-
ized to be appropriated for rural housing vouchers under
section 542, $30,000,000 for fiscal year 1995 and
$40,000,000 for fiscal year 1996.’’.
(f) RENTAL HOUSING LOAN AUTHORITY.—Section
515(b) of the Housing Act of 1949 (42 U.S.C. 1485(b)) is
amended—
(1) by striking paragraph (4); and
(2) by redesignating paragraphs (5) and (6) as
paragraphs (4) and (5), respectively.
SEC. 502. ELIGIBILITY OF NATIVE AMERICANS FOR RURAL
HOUSING PROGRAMS.
Section 501(b)(6) of the Housing Act of 1949 (42
U.S.C. 1471(b)(6)) is amended by adding at the end the
following new sentence: ‘‘In any case in which assistance
made available under this title may be provided to a State
or State agency or in which a State or State agency is eligi-
ble to participate in a program or activity under this title,
such assistance may also be provided to Indian tribes and
tribal agencies and Indian tribes and tribal agencies shall
be eligible to participate, respectively.’’.
368
SEC. 503. ESCROW FUND.
Section 501(e) of the Housing Act of 1949 (42 U.S.C.
1471(e)) is amended by striking the third and fourth sen-
tences and inserting the following: ‘‘The Secretary may es-
tablish in the Treasury of the United States an escrow fund
for the deposit of such periodic payments. The Secretary
may direct the Secretary of the Treasury to invest and rein-
vest amounts in the escrow fund in public debt securities
with maturities suitable for the needs of the escrow fund
and bearing interest at rates determined by the Secretary
of the Treasury, taking into consideration the current aver-
age market yield on outstanding marketable obligations of
the United States of comparable maturities. Any interest
earned shall be credited to the escrow fund. The Secretary
shall disburse amounts at the appropriate time or times for
the purposes for which the amounts were escrowed in the
fund. The interest rate to be paid on escrowed amounts shall
be determined annually based on the interest earned less
an amount not to exceed 1 percent which shall be used for
expenses in carrying out the provisions of this title.’’.
SEC. 504. SECTION 502 HOMEOWNERSHIP LOANS.
(a) REMOTE RURAL AREAS.—Section 502(f) of the
Housing Act of 1949 (42 U.S.C. 1472(f)) is amended—
(1) by striking paragraph (1);
(2) by redesignating paragraph (2) as para-
graph (1); and
369
(3) by adding at the end the following new para-
graph:
‘‘(2) SECURITY.—In making a loan under this
section for housing located in a rural area that is a
remote rural area (which shall include tribal allotted
or Indian trust land) where the borrower resides or
is employed, the Secretary shall consider the actual
replacement cost of the property and structure for
which the loan is made as adequate security for the
loan required under subsection (b).’’.
(b) PERMANENT DEFERRED MORTGAGE PROGRAM.—
Section 502(g) of the Housing Act of 1949 (42 U.S.C.
1472(g)) is amended to read as follows:
‘‘(g) DEFERRED MORTGAGE PROGRAM.—With respect
to families or persons otherwise eligible for assistance under
subsection (d) but having incomes below the amount deter-
mined to qualify for a loan under this section, the Secretary
may defer mortgage payments beyond the amount afford-
able at 1 percent interest, taking into consideration income,
taxes and insurance. Deferred mortgage payments shall be
converted to payment status when the ability of the bor-
rower to repay improves.’’.
(c) REAMORTIZATION.—Section 505 of the Housing
Act of 1949 (42 U.S.C. 1475) is amended—
370
(1) in the section heading, by inserting ‘‘,
REAMORTIZATION,’’ after ‘‘MORATORIUM’’;
(2) in subsection (a), by inserting before the last
sentence the following: ‘‘The Secretary may not fore-
close such a mortgage securing such a loan upon
which a moratorium has been granted solely because
the borrower does not have the ability to repay the
loan. Upon the expiration of a moratorium, the Sec-
retary shall enter into an agreement with the bor-
rower providing to the borrower such assistance as the
Secretary is authorized to provide under this title and
may foreclose with respect to the loan only if the bor-
rower fails to make 3 monthly payments required
under such agreement.’’;
(3) by redesignating subsection (b) as subsection
(c); and
(4) by inserting after subsection (a) the following
new subsection:
‘‘(b) REAMORTIZATION.—
‘‘(1) AUTHORITY.—With respect to a loan made
under section 502, after a moratorium under sub-
section (a) of this section for the loan or at any other
time the Secretary considers appropriate, the Sec-
retary may reamortize the outstanding indebtedness,
including principal and interest, under the loan for
371
a period not to exceed 38 years from the date of the
making of the loan, subject to the provisions of para-
graph (2).
‘‘(2) GRADUATED REPAYMENT AGREEMENT.—In
reamortizing a loan pursuant to paragraph (1), the
Secretary may lower the interest rate to the existing
lending rate for loans under section 502 or establish
a schedule of payments under the loan that provides,
after the application of interest credit, for payments
in an amount less than the amount of the payments
originally provided for under the loan agreement for
a period not exceeding that required to amortize the
loan over its term, except that such period may not
exceed 3 years.’’.
(d) ELIGIBILITY OF AREA.—Section 502 of the Hous-
ing Act of 1949 (42 U.S.C. 1472) is amended by adding
at the end the following new subsection:
‘‘(i) Notwithstanding section 520, the Secretary may
make loans under this section for properties in the Pinewest
Subdivision, located in Gibsonville, North Carolina, in the
same manner as provided under this section for properties
in rural areas.’’.
SEC. 505. LOAN GUARANTEES.
Section 502(h)(11) of the Housing Act of 1949 (42
U.S.C. 1472(h)(11)) is amended by adding at the end the
372
following new sentence: ‘‘The Secretary may not pool or re-
allocate any authority to guarantee loans under this section
that was allocated for use in any State before August 1 of
the fiscal year in which such authority was allocated.’’.
SEC. 506. PREPAYMENT OF RURAL RENTAL HOUSING
LOANS.
(a) TECHNICAL ASSISTANCE GRANTS AND LOANS FOR
NONPROFIT AND PUBLIC AGENCY PURCHASERS OF PRE-
PAYMENT PROPERTIES.—Section 502(c)(5)(C)(i) of the
Housing Act of 1949 (42 U.S.C. 1472(c)(5)(C)(i)) is amend-
ed to read as follows:
‘‘(i) to the extent provided in appropriation
Acts, make a grant or predevelopment loan in an
amount not exceeding $50,000 to the nonprofit orga-
nization or public agency whose offer to purchase is
accepted under this paragraph to cover reasonable
costs, as determined by the Secretary and not includ-
ing the purchase price, incurred by the organization
or agency in purchasing and assuming responsibil-
ities for the housing and related facilities involved,
which may include costs for pursuing acquisition, ap-
praisals, financing fees, accounting, administration,
consultants, legal assistance, architectural assistance,
engineering assistance, application fees, overhead, and
other expenses;’’.
373
(b) EQUITY TAKEOUT LOANS.—
(1) 
AUTHORITY
AND
LIMITATION.—Section
502(c)(4)(B)(iv) of the Housing Act of 1949 (42
U.S.C. 1472(c)(4)(B)(iv)) is amended by inserting be-
fore the period at the end the following: ‘‘or under
paragraphs (1) and (2) of section 514(j), except that
an equity loan referred to in this clause may not be
made available after the date of the enactment of the
Housing and Community Development Act of 1994
unless the Secretary determines that the other incen-
tives available under this subparagraph are not ade-
quate to provide a fair return on the investment of
the borrower, to prevent prepayment of the loan in-
sured under section 514 or 515, or to prevent the dis-
placement of tenants of the housing for which the loan
was made’’.
(2) APPROVAL OF ASSISTANCE.—Subparagraph
(C) of section 502(c)(4) of the Housing Act of 1949
is amended by striking the matter preceding clause (i)
and inserting the following:
‘‘(C) APPROVAL OF ASSISTANCE.—The Secretary may
approve assistance under subparagraph (B) for assisted
housing only if the restrictive period has expired for any
loan for the housing made or insured under section 514 or
515 pursuant to a contract entered into after December 21,
374
1979, but before the date of the enactment of the Department
of Housing and Urban Development Reform Act of 1989,
and the Secretary determines that the combination of assist-
ance provided—’’.
(3) LOAN TERMS.—Section 514 of the Housing
Act of 1949 (42 U.S.C. 1484) is amended by adding
at the end the following new subsection:
‘‘(j) EQUITY TAKEOUT LOANS FOR PRESERVATION OF
LOW-INCOME HOUSING.—With respect to a loan insured
under subsection (a), the Secretary may—
‘‘(1) make or insure an equity loan in the form
of a supplemental loan for the purpose of equity take-
out to the owner of housing financed with a loan in-
sured under this section pursuant to a contract en-
tered into before December 15, 1989, for the purpose
of extending the affordability of the housing for low-
income families or persons and very low-income fami-
lies or persons for not less than 20 years, except that
such loan may not exceed 90 percent of the value of
the equity in the project as determined by the Sec-
retary;
‘‘(2) transfer and reamortize an existing loan in
connection with assistance provided under paragraph
(1); and
375
‘‘(3) make or insure a loan to enable a nonprofit
organization or public agency to make a purchase de-
scribed in section 502(c)(5).’’.
(4) TECHNICAL CORRECTION RELATING TO SEC-
TION 515 HOUSING.—Section 515(c)(1) of the Housing
Act of 1949 (42 U.S.C. 1485(c)(1)) is amended by
striking ‘‘December 21, 1979’’ and inserting ‘‘Decem-
ber 15, 1989’’.
(c) 
PHASE-IN
OF
RENT
INCREASES.—Section
502(c)(4)(B)(vi) of the Housing Act of 1949 (42 U.S.C.
1472(c)(4)(B)(vi)) is amended by inserting before the period
at the end the following: ‘‘, except that any such increase
in rents for current tenants (except for increases made nec-
essary by increases in operating costs) shall (I) be phased
in equally over a period of not less than 3 years, if such
increase is 30 percent or more, and (II) be limited to not
more than 10 percent per year if such increase is more than
10 percent but less than 30 percent’’.
(d) TREATMENT OF ACCELERATION UPON DEFAULT.—
Section 502 of the Housing Act of 1949 (42 U.S.C. 1472)
is amended—
(1) in subsection (b)(2), by inserting ‘‘or any
payment in the case of acceleration of the amount due
under such a loan pursuant to any default,’’ after
‘‘515’’; and
376
(2) in subsection (c)—
(A) in paragraph (1)(A), by inserting before
the 1st comma the following: ‘‘, accept any pay-
ment tendered in the case of acceleration of the
amount due pursuant to any default on’’;
(B) in paragraph (1)(B), by inserting be-
fore the 1st comma the following: ‘‘, accept any
payment tendered in the case of acceleration of
the amount due pursuant to any default on’’;
(C) in paragraph (2)—
(i) by inserting after ‘‘prepaid’’ the fol-
lowing: ‘‘, paid in full pursuant to accelera-
tion of the amount due resulting from de-
fault,’’; and
(ii) by inserting ‘‘, payment,’’ after
‘‘prepayment’’;
(D) in paragraph (4)(A), by inserting after
‘‘prepay,’’ the following: ‘‘accepting any pay-
ment tendered in the case of acceleration of the
amount due pursuant to any default on,’’; and
(E) in paragraph (5)—
(i) in subparagraph (A)(ii), by insert-
ing after ‘‘prepay,’’ the following: ‘‘accept
the payment tendered in the case of accel-
377
eration of the amount due pursuant to de-
fault on,’’;
(ii) in the 1st sentence of subparagraph
(F), by inserting after ‘‘prepay,’’ the follow-
ing: ‘‘accept payment tendered in the case of
acceleration of the amount due pursuant to
default on,’’;
(iii) in the 2d sentence of subpara-
graph (F), by inserting after ‘‘prepay,’’ the
following: ‘‘payment tendered in the case of
acceleration of the amount due pursuant to
default,’’;
(iv) in the last sentence of subpara-
graph (F), by striking ‘‘offers to prepay,’’
and inserting the following: ‘‘such offers to
prepay, payments in the case of acceleration
of the amount due pursuant to default,’’;
and
(v) in the matter in subparagraph (G)
that precedes clause (i), by inserting after
‘‘prepay,’’ the following: ‘‘any payment ten-
dered in the case of acceleration of the
amount due pursuant to default on,’’.
378
(e) TEST
FOR ALLOWABLE PREPAYMENT.—Section
502(c)(5)(G)(ii) of the Housing Act of 1949 (42 U.S.C.
1472(c)(5)(G)(ii)) is amended to read as follows:
‘‘(ii) the Secretary makes a written finding
that—
‘‘(I) prepayment, payment in the case of ac-
celeration, or refinancing will not (a) materially
increase economic hardship for current tenants,
and (b) involuntarily displace current tenants
(except for good cause), where comparable and
affordable housing is not readily available at the
time of displacement, determined without regard
to the availability of Federal housing assistance
that would address any such hardship or invol-
untary displacement; and
‘‘(II) the supply of vacant, comparable
housing is sufficient to ensure that such prepay-
ment will not materially affect (a) the availabil-
ity of decent, safe, and sanitary housing afford-
able to low-income and very low-income families
or persons in the area that the housing could
reasonably be expected to serve, (b) the ability of
low-income and very low-income families or per-
sons to find affordable, decent, safe, and sanitary
housing near employment opportunities, or (c)
379
the housing opportunities of minorities in the
community within which the housing is lo-
cated.’’.
SEC. 507. DESIGNATION OF UNDERSERVED AREAS AND RES-
ERVATION OF ASSISTANCE.
(a) REAUTHORIZATION
AND
SET-ASIDE.—Section
509(f)(4) of the Housing Act of 1949 (42 U.S.C. 1479(f)(4))
is amended—
(1) in subparagraph (A)—
(A) in the first sentence—
(i) by striking ‘‘5.0 percent in fiscal
years 1993 and 1994’’ and inserting ‘‘not
less than 5 percent or more than 10 percent
for each of fiscal years 1995 and 1996’’; and
(ii) by striking ‘‘514, 515, and 524’’
and inserting ‘‘and 515’’; and
(B) in the second sentence, by striking ‘‘sec-
tions 514 and 515’’ and inserting ‘‘section 515’’;
and
(2) in subparagraph (B)(ii), by striking ‘‘5 per-
cent’’ and inserting ‘‘10 percent’’.
(b) POVERTY
LEVEL
FOR
DESIGNATION.—Section
509(f)(1) of the Housing Act of 1949 is amended—
(1) in subparagraph (A), by striking ‘‘20 per-
cent’’ and inserting ‘‘15 percent’’; and
380
(2) in subparagraph (B), by striking ‘‘10 per-
cent’’ and inserting ‘‘5 percent’’.
(c) POVERTY
LEVEL
FOR
PREFERENCE.—Section
509(f)(2) of the Housing Act of 1949 is amended—
(1) in subparagraph (A), by striking ‘‘28 per-
cent’’ and inserting ‘‘20 percent’’; and
(2) in subparagraph (B), by striking ‘‘13 per-
cent’’ and inserting ‘‘7 percent’’.
(d) ADDITIONAL QUALIFICATION
AS UNDERSERVED
AREA.—Section 509(f)(1) of the Housing Act of 1949 is
amended by inserting after subparagraph (B) the following
new flush sentence:
‘‘The Secretary may also designate a county or com-
munity as a targeted underserved area if the Sec-
retary determines that the county or community has
severe unmet housing needs, including needs caused
by severe economic and social dislocation such as nat-
ural disasters, structural employment changes, or per-
sistent poverty, or has experienced long-term popu-
lation and job losses.’’.
(e) GEOGRAPHICAL DIVERSITY.—Section 509(f)(1) of
the Housing Act of 1949 is amended by adding at the end
the following: ‘‘In designating targeted underserved areas
under this paragraph for any fiscal year, the Secretary may
not designate more than 10 counties and communities lo-
381
cated in any single State or in the Commonwealth of Puerto
Rico. If more than 10 counties and communities in any
single State or the Commonwealth of Puerto Rico qualify
under this paragraph for designation as an underserved
area, the Secretary shall designate the counties and commu-
nities for which the sum of the percentages under subpara-
graphs (A) and (B) are the greatest.’’.
(f) 2-YEAR
AND
3-YEAR
DESIGNATIONS.—Section
509(f) of the Housing Act of 1949 (42 U.S.C. 1479(f)) is
amended—
(1) in paragraph (1)—
(A) in the 1st sentence, by striking ‘‘in each
fiscal year’’; and
(B) in the 2d sentence, by striking ‘‘year
in’’ and inserting ‘‘first year for’’;
(2) in paragraph (2)—
(A) in the first sentence, by striking ‘‘para-
graph (4)’’ and inserting ‘‘paragraph (5)’’; and
(B) by striking the last sentence;
(3) in paragraph (3)(B), by striking ‘‘paragraph
(2)’’ and inserting ‘‘paragraph (3)’’;
(4) in paragraph (4)(A), by striking ‘‘paragraph
(7)’’ and inserting ‘‘paragraph (8)’’;
(5) by redesignating paragraphs (2) through (8)
as paragraphs (3) through (9), respectively; and
382
(6) by inserting after paragraph (1) the follow-
ing new paragraph:
‘‘(2) TIMING
AND
DURATION
OF
DESIGNA-
TIONS.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the Secretary shall redesig-
nate the targeted underserved areas under this
subsection once every 2 fiscal years and such des-
ignations shall remain in effect for a period of
2 fiscal years. The first such 2-year designation
shall be made for fiscal years 1995 and 1996.
‘‘(B) DESIGNATIONS FOR INDIAN AREAS.—
The Secretary shall ensure that, at all times, not
less than 5 counties or communities that contain
tribal allotted or Indian trust land are included
among the 100 counties and communities des-
ignated as targeted underserved areas. The Sec-
retary shall redesignate the counties or commu-
nities designated as a targeted underserved area
in compliance with this subparagraph once every
3 fiscal years and such designations shall remain
in effect for 3 fiscal years. The first such 3-year
designation shall be made for fiscal years 1995
through 1997. Upon designation, the Secretary
383
shall specify any targeted underserved area des-
ignated in compliance with this subparagraph.’’.
SEC. 508. ADMINISTRATIVE APPEALS.
(a) APPEALS.—Section 510(g) of the Housing Act of
1949 (42 U.S.C. 1480(g)) is amended—
(1) by inserting after ‘‘termination and’’ the fol-
lowing: ‘‘, in the case of any eviction not related to
any drug-related or criminal activity, nonpayment of
rent, or activity that threatens the health, safety, or
right to peaceful enjoyment of the premises by other
residents,’’; and
(2) by inserting after ‘‘reverse the decision’’ the
following: ‘‘and is mutually selected within a reason-
able period of time by the person adversely affected by
the reduction or termination of assistance and the
person reducing or terminating assistance’’.
(b) ATTORNEYS.—Section 510(d)(1) of the Housing
Act of 1949 is amended—
(1) in the matter preceding subparagraph (A),
by inserting ‘‘or 515’’ after ‘‘502’’; and
(2) in subparagraph (C)(ii), by inserting ‘‘with
respect to litigation under section 502,’’ before ‘‘rep-
resentation’’.
384
SEC. 509. SECTION 515 RURAL RENTAL HOUSING.
(a) LOAN TERM.—Section 515(a)(2) of the Housing
Act of 1949 (42 U.S.C. 1485(a)(2)) is amended by inserting
before the semicolon the following: ‘‘, except that the Sec-
retary may also make loans for a period of up to 30 years
from the making of the loan’’.
(b) DEVELOPMENT COST.—Section 515(e)(4) of the
Housing Act of 1949 is amended by inserting ‘‘franchise
fees,’’ after ‘‘impact fees,’’.
(c) LIMITATION
ON PROJECT TRANSFERS.—Section
515 of the Housing Act of 1949 (42 U.S.C. 1485) is amend-
ed by inserting after subsection (g) the following new sub-
section:
‘‘(h) PROJECT TRANSFERS.—After the date of the en-
actment of the Housing and Community Development Act
of 1994, any interest in the ownership of a project for which
a loan is made or insured under this section may be trans-
ferred only if the Secretary determines that such transfer
would be in the best interests of the tenants of the housing
for which the loan was made or insured and of the Federal
Government.’’.
(d) EQUITY LOANS.—Section 515(t) of the Housing
Act of 1949 is amended—
(1) by striking paragraphs (4) and (5); and
(2) by redesignating paragraphs (6) through (8)
as paragraphs (4) through (6), respectively.
385
(e) SET-ASIDE FOR NONPROFIT ENTITIES.—The first
sentence of section 515(w)(1) of the Housing Act of 1949
(42 U.S.C. 1485(w)(1)) is amended by striking ‘‘fiscal years
1993 and 1994’’ and inserting ‘‘fiscal years 1995 and
1996’’.
(f) AUTHORITY FOR STREAMLINED MORTGAGE MODI-
FICATIONS.—Section 515 of the Housing Act of 1949 (42
U.S.C. 1485) is amended by adding at the end the following
new subsection:
‘‘(aa) MORTGAGE MODIFICATIONS.—
‘‘(1) PURPOSE AND AUTHORITY.—In order to re-
duce the amount of debt service payments and operat-
ing costs of borrowers under loans made or insured
under this section, reduce rents paid by residents of
housing financed with such loans, and reduce the
amount of rental assistance necessary for such hous-
ing, the Secretary may refinance the outstanding
principal obligation of a loan made under this sub-
section in accordance with the provisions applicable
(at the time of such refinancing) to loans made under
this section that the Secretary determines are appro-
priate for purposes of this subsection and the terms
and conditions of the original loan.
‘‘(2) USE OF HOUSING.—Any terms of the origi-
nal loan relating to use of the housing and related fa-
386
cilities for the purposes specified in this section shall
continue to apply to the housing in the same manner
as if the loan were not modified under this subsection.
‘‘(3) TREATMENT
OF
MODIFIED
MORTGAGE
UNDER
PREPAYMENT
RESTRICTIONS.—Any 
loan
modified under this subsection shall be considered a
loan originally made under this section, for purposes
of the limitations under subsection (c) on prepayment
and refinancing under subsection (b)(3). For purposes
of determining the financial status of the loan or the
housing securing the loan, the Secretary may consider
the terms of the refinancing.
‘‘(4) TERMS.—The Secretary shall, by regula-
tion, establish any requirements and conditions the
Secretary considers appropriate to provide for refi-
nancing under this subsection, including any limita-
tions on term of the refinancing loan.
‘‘(5) EXPEDITED
PROCEDURE.—The Secretary
shall establish an expedited procedure for providing
refinancing under this subsection, which—
‘‘(A) shall not require application under the
same procedures applicable to loans made under
subsection (a); and
‘‘(B) shall take into consideration any in-
formation obtained by the Secretary in making
387
and servicing the loan under subsection (a) for
which refinancing under this subsection is re-
quested.’’.
SEC. 510. OPTIONAL CONVERSION OF RENTAL ASSISTANCE
PAYMENTS TO OPERATING SUBSIDY FOR MI-
GRANT FARMWORKER PROJECTS.
(a) IN GENERAL.—Section 521(a) of the Housing Act
of 1949 (42 U.S.C. 1490a(a)) is amended by adding at the
end the following new paragraph:
‘‘(5) OPERATING ASSISTANCE FOR MIGRANT FARM-
WORKER PROJECTS.—
‘‘(A) AUTHORITY.—In the case of housing (and
related facilities) for migrant farmworkers provided
or assisted with a loan under section 514 or a grant
under section 516, the Secretary may, at the request
of the owner of the project, use amounts provided for
rental assistance payments under paragraph (2) to
provide assistance for the costs of operating the
project. Any project assisted under this paragraph
may not receive rental assistance under paragraph
(2).
‘‘(B) AMOUNT.—In any fiscal year, the assist-
ance provided under this paragraph for any project
shall not exceed an amount equal to 90 percent of the
operating costs for the project for the year, as deter-
388
mined by the Secretary. The amount of assistance to
be provided for a project under this paragraph shall
be an amount that makes units in the project avail-
able to migrant farmworkers in the area of the project
at rates generally not exceeding 30 percent of the
monthly adjusted incomes of such farmworkers, based
on the prevailing incomes of such farmworkers in the
area.
‘‘(C) SUBMISSION OF INFORMATION.—The owner
of a project assisted under this paragraph shall be re-
quired to provide to the Secretary, at least annually,
a budget of operating expenses and estimated rental
income, which the Secretary shall use to determine the
amount of assistance for the project.
‘‘(D) DEFINITIONS.—For purposes of this para-
graph, the following definitions shall apply:
‘‘(i) The term ‘migrant farmworker’ shall
have the same meaning given the term in section
516(k)(7).
‘‘(ii) The term ‘operating cost’ means ex-
penses incurred in operating a project, including
expenses for—
‘‘(I) administration, maintenance, re-
pair, and security of the project;
389
‘‘(II) utilities, fuel, furnishings, and
equipment for the project; and
‘‘(III) maintaining adequate reserve
funds for the project.’’.
(b) CONFORMING AMENDMENTS.—Title V of the Hous-
ing Act of 1949 (42 U.S.C. 1471 et seq.) is amended—
(1) in section 502—
(A) in subsection (c)(1)(A)(i), by striking
‘‘or (a)(2)’’ and inserting ‘‘, (a)(2), or (5)’’;
(B) in subsection (c)(4)(B)(ii), by inserting
before the period at the end the following: ‘‘, or
additional assistance or an increase in assist-
ance provided under section 521(a)(5)’’;
(C) in subsection (c)(4)(B)(iii), by inserting
before the period at the end the following: ‘‘, or
current tenants of projects not assisted under sec-
tion 521(a)(5)’’;
(D) in subsection (c)(5)(C)(iii)—
(i) by striking the 2d comma; and
(ii) by inserting ‘‘or any assistance
payments received under section 521(a)(5),’’
before ‘‘with respect’’;
(E) in subsection (c)(5)(D), by inserting be-
fore the period at the end the following: ‘‘or, in
the case of housing assisted under section
390
521(a)(5), does not exceed the rents established
for the project under such section’’;
(2) in the second sentence of section 509(f)(5) (as
redesignated by the preceding provisions of this title),
by striking ‘‘an amount of section 521 rental assist-
ance’’ and inserting ‘‘, from amounts available for as-
sistance under paragraphs (2) and (5) of section
521(a), an amount’’;
(3) in section 513(c)(2)—
(A) in the matter preceding subparagraph
(A), by inserting ‘‘or contracts for operating as-
sistance 
under 
section 
521(a)(5)’’ 
after
‘‘521(a)(2)(A)’’;
(B) in subparagraph (A), by inserting ‘‘or
operating assistance contracts’’ after ‘‘contracts’’;
(C) in subparagraph (B), by striking ‘‘rent-
al’’ each place it appears; and
(D) in subparagraph (C), by inserting ‘‘or
operating assistance contracts’’ after ‘‘contracts’’;
(4) in section 521(a)(2)(B)—
(A) by inserting ‘‘or paragraph (5)’’ after
‘‘this paragraph’’; and
(B) by striking ‘‘which shall’’ and all that
follows through the period at the end and insert-
ing the following: ‘‘. The budget (and the income,
391
in the case of a project assisted under this para-
graph) shall be used to determine the amount of
the assistance for each project.’’;
(5) in section 521(c), by striking ‘‘subsection
(a)(2)’’ and inserting ‘‘subsections (a)(2) and (a)(5)’’;
(6) in section 521(e), by inserting after ‘‘recipi-
ent’’ the following: ‘‘or any tenant in a project as-
sisted under subsection (a)(5)’’; and
(7) in section 530, by striking ‘‘rental assistance
payments with respect to such project under section
521(a)(2)(A)’’ and inserting ‘‘assistance payments
with 
respect 
to 
such 
project 
under 
section
521(a)(2)(A) or 521(a)(5)’’.
SEC. 511. DEFINITION OF RURAL AREA.
The last sentence of section 520 of the Housing Act
of 1949 (42 U.S.C. 1490) is amended by striking ‘‘city of’’
and inserting ‘‘cities of South Tucson, Arizona, and’’.
SEC. 512. ELIGIBILITY OF MANUFACTURED HOME PARKS
FOR BUILDING SITE LOANS FOR COOPERA-
TIVES.
The first sentence of section 524(a)(1) of the Housing
Act of 1949 (42 U.S.C. 1490d(a)(1)) is amended by insert-
ing before the period at the end the following: ‘‘, and for
the acquisition and development of manufactured home
392
parks owned by nonprofit organizations for future owner-
ship by low- and moderate-income residents of the park’’.
SEC. 513. RURAL HOUSING ASSISTANCE TARGETING RE-
PORT.
Section 532(a) of the Housing Act of 1949 (42 U.S.C.
1490l) is amended by adding at the end the following new
flush material:
‘‘The Secretary shall submit a report to the Congress for
each fiscal year describing the geographical distribution of
housing for which eligible loan applications for assistance
under this title are submitted in such year and for which
amounts are obligated in such year. The report shall de-
scribe the areas in which the housing to be assisted under
the applications is located, the number of eligible applica-
tions received for housing in such areas, the number of eligi-
ble applications for housing in such areas that were ap-
proved and funded and the amounts of such funding, the
extent of the rural character of such areas, and any actions
taken by the Secretary to comply with the requirement
under paragraph (3). The report for a fiscal year shall be
submitted not later than 180 days after the conclusion of
such fiscal year.’’.
393
SEC. 514. PRIORITY FOR RURAL HOUSING VOUCHER AS-
SISTANCE.
Section 542 of the Housing Act of 1949 (42 U.S.C.
1490r) is amended by adding at the end the following new
subsection:
‘‘(c) PRIORITY.—
‘‘(1) REQUIREMENT.—In providing assistance
under this section, the Secretary shall give preference
to providing assistance for rental housing that—
‘‘(A) is financed or assisted with a loan,
guarantee, insurance, or other assistance pro-
vided under this title; and
‘‘(B)(i) has a significant number of units,
as determined by the Secretary, that have been
vacant for extended periods; or
‘‘(ii) is occupied by a significant number of
families, as determined by the Secretary, who
pay as rent for a unit in the housing an amount
exceeding 30 percent of the family’s monthly ad-
justed income.
‘‘(2) PROJECT-BASED ASSISTANCE.—To provide
assistance according to the preference under para-
graph (1), the Secretary may enter into contracts
with owners of housing described in paragraph (1) to
provide voucher assistance payments that are at-
394
tached to such housing on behalf of very low-income
families who reside in such housing.’’.
SEC. 515. NATIVE AMERICAN RURAL HOUSING CAPACITY
DEMONSTRATION PROGRAM.
Title V of the Housing Act of 1949 is amended by in-
serting after section 537 (42 U.S.C. 1490p–1) the following
new section:
‘‘SEC. 538. RURAL HOUSING CAPACITY DEMONSTRATION
PROGRAM 
FOR 
NATIVE 
AMERICANS 
AND
ALASKAN NATIVES.
‘‘(a) AUTHORITY.—The Secretary shall carry out a
program under this section to demonstrate the effectiveness
of assisting Native Americans and Alaskan Natives in un-
derserved areas to apply for, obtain, and use housing assist-
ance under this title.
‘‘(b) GRANTS.—Under the demonstration under this
section, the Secretary shall make grants to technical assist-
ance providers selected under subsection (f) to carry out ac-
tivities under subsection (c) with respect to tribes selected
under subsection (e) (and members of the tribes) in the se-
lected areas. Of the amounts provided to a technical assist-
ance provider under a grant under this section, 40 percent
shall be disbursed to the technical assistance provider in
fiscal year 1995, 30 percent shall be so disbursed in fiscal
395
year 1996, and 30 percent shall be so disbursed in fiscal
year 1997.
‘‘(c) USE OF ASSISTANCE.—
‘‘(1) ELIGIBLE ACTIVITIES.—Any amounts pro-
vided to a technical assistance provider under a grant
under this section shall be used by the technical as-
sistance provider only—
‘‘(A) to train individuals for employment as
local project coordinators under paragraph (2),
which shall include training regarding the avail-
ability, application for, and use of housing as-
sistance under this title with respect to tribes
and members of tribes;
‘‘(B) to provide ongoing technical assistance
and training to local project coordinators;
‘‘(C) to provide assistance to the tribes se-
lected under subsection (e) in the selected areas,
or to Native American or Alaskan Native hous-
ing organizations serving such tribes, to employ
local project coordinators trained pursuant to
subparagraph (A); and
‘‘(D) to establish a revolving fund to pro-
vide loans to tribes and members of tribes for
customary and reasonable costs incurred in pre-
paring and submitting applications for housing
396
assistance under this title to be used in the se-
lected areas (including costs of credit reports),
except that not more than $1,500 may be pro-
vided for the purpose under this subparagraph to
any single tribe or Native American or Alaskan
Native housing organization.
‘‘(2) LOCAL PROJECT COORDINATOR.—For pur-
poses of this section, a local project coordinator shall
be an individual who—
‘‘(A) is employed by a tribe selected under
subsection (e) in, or Native American or Alaskan
Native housing organization serving, the selected
area;
‘‘(B) provides advice and assistance to the
tribe or the tribes served by the organization
(and members of such tribes), regarding the
availability, application for, and use of housing
assistance under this title;
‘‘(C) otherwise facilitates the use of such as-
sistance by the tribes and their members; and
‘‘(D) assists the tribes and their members in
obtaining loans from the revolving fund estab-
lished under paragraph (1)(D).
‘‘(d) TRIBAL CONTRIBUTIONS TO DEMONSTRATION
PROGRAM.—Each tribe selected under subsection (e) for
397
participation in the demonstration program under this sec-
tion shall enter into an agreement with the technical assist-
ance provider to provide in-kind or financial assistance, in
addition to amounts provided under this section, for activi-
ties under the demonstration program, in an amount deter-
mined by the tribe and the technical assistance provider.
The assistance provided pursuant to such agreement may
include assistance in the form of office space, equipment,
transportation, salary enhancement, and fringe benefits,
and other forms of assistance.
‘‘(e) SELECTION OF TRIBES AND AREAS.—
‘‘(1) ELIGIBILITY.—The Secretary shall provide
for the technical assistance providers receiving grants
under this section to select for participation in the
demonstration under this section not more than a
total of 15 tribes—
‘‘(A) that are located in counties or commu-
nities—
‘‘(i) that are eligible for designation as
targeted underserved areas under section
509(f); or
‘‘(ii) that include tribal allotted or In-
dian trust land; and
‘‘(B) that—
398
‘‘(i) have agreed to participate in the
demonstration under this section by des-
ignating individuals for training as local
project coordinators under subsection (c); or
‘‘(ii) are located in a county or com-
munity within which is located a Native
American or Alaskan Native housing orga-
nization that has so agreed to participate in
the demonstration under this section.
‘‘(2) CRITERIA FOR SELECTION.—Each technical
assistance provider selecting tribes pursuant to para-
graph (1) shall make such selections according to cri-
teria that include—
‘‘(A) the extent of substandard housing on
the reservation of the tribe;
‘‘(B) the extent of the waiting list for hous-
ing assistance under Federal housing programs
in the community or community under para-
graph (1)(A);
‘‘(C) the extent of interest in and willing-
ness to participate in the demonstration pro-
gram under this section for a 3-year period; and
‘‘(D) the extent of willingness to provide in-
kind or financial assistance in addition to
399
amounts provided under this section for activi-
ties under the demonstration program.
‘‘(3) TREATMENT AS TARGETED UNDERSERVED
AREAS.—Notwithstanding the designation of counties
and communities as targeted underserved areas under
section 509(f)(1) and the provisions of section 520,
any selected area under this section shall be consid-
ered a targeted underserved area for fiscal years 1995,
1996, and 1997, for purposes of eligibility for assist-
ance 
with 
amounts 
reserved 
under 
section
509(f)(4)(A).
‘‘(f) SELECTION OF TECHNICAL ASSISTANCE PROVID-
ERS.—
‘‘(1) ELIGIBILITY.—The Secretary may make a
grant under this section only to a nonprofit organiza-
tion having experience in providing training and
technical assistance regarding the use of housing as-
sistance under this title and in administering revolv-
ing loan funds for costs relating to housing assistance
programs under this title.
‘‘(2) APPLICATION.—The Secretary shall provide
for nonprofit organizations meeting the requirements
under paragraph (1) to submit applications for a
grant under this section during a period of not more
400
than 45 days that begins upon publication of the no-
tice of funding availability under subsection (i).
‘‘(3) SELECTION.—Not more than 30 days after
expiration of such period, the Secretary shall select, to
receive grants under this section, 1 or more nonprofit
organizations submitting applications that are—
‘‘(A) capable of carrying out the duties of
technical assistance providers under this section;
‘‘(B) knowledgeable and experienced regard-
ing housing needs and issues of Native Ameri-
cans and Alaskan Natives and housing assist-
ance programs under this title; and
‘‘(C) agree to comply with the provisions of
this section.
‘‘(g) REPORTS.—
‘‘(1) LOCAL
PROJECT
COORDINATORS.—Each
local project coordinator trained or assisted by a tech-
nical assistance provider with amounts from a grant
under this section shall submit a report to the tech-
nical assistance provider for each of fiscal years 1995
through 1997, regarding the activities of the coordina-
tor. The report shall be submitted not later than 30
days after the conclusion of the fiscal year for which
the report is made.
401
‘‘(2) TECHNICAL ASSISTANCE PROVIDERS.—Each
technical assistance provider receiving a grant under
this section shall submit a report to the Secretary for
each of fiscal years 1995 through 1997, summarizing
the information submitted under paragraph (1) for
the fiscal year and describing the activities of the
technical assistance provider under the demonstration
under this section during the fiscal year. The report
shall be submitted not later than 60 days after the
conclusion of the fiscal year for which the report is
made.
‘‘(3) SECRETARY.—The Secretary shall submit a
report to the Congress for each of fiscal years 1995
through 1997 describing the demonstration under this
section and the findings of the Secretary as a result
of the demonstration. The report shall be submitted
not later than 90 days after the conclusion of the fis-
cal year for which the report is made.
‘‘(h) DEFINITIONS.—For purposes of this section:
‘‘(1) ALASKAN
NATIVE
VILLAGE.—The term
‘Alaskan Native Village’ has the same meaning given
the term ‘Native village’ in section 3 of the Alaska
Native Claims Settlement Act.
‘‘(2) NATIVE
AMERICAN
OR
ALASKAN
NATIVE
HOUSING
ORGANIZATION.—The term ‘Native Amer-
402
ican or Alaskan Native housing organization’ means
a nonprofit organization that primarily serves a tribe
or tribes, and includes Indian housing authorities
and other housing entities of a tribe.
‘‘(3) 
NONPROFIT
ORGANIZATION.—The 
term
‘nonprofit organization’ means any private, nonprofit
organization that—
‘‘(A) is organized or chartered under State,
tribal, or local laws;
‘‘(B) has no part of its net earning inuring
to the benefit of any member, founder, contribu-
tor, or individual;
‘‘(C) complies with standards of financial
accountability acceptable to the Secretary; and
‘‘(D) through its articles of incorporation or
through resolution of the governing body of a
tribe, has among its purposes significant activi-
ties related to the provision of decent housing
that is affordable to low- and moderate-income
families.
‘‘(4) SELECTED AREA.—The term ‘selected area’
means, with respect to any tribe selected under sub-
section (e), the county or community meeting the re-
quirements of subsection (e)(1) in which the tribe se-
lected is located.
403
‘‘(5) TECHNICAL
ASSISTANCE
PROVIDER.—The
term ‘technical assistance provider’ means a nonprofit
organization (including a tribe and an Indian hous-
ing authority) that is selected under subsection (f) to
receive a grant under this section.
‘‘(6) TRIBE.—The term ‘tribe’ means any Indian
tribe, band, group, or nation, including Alaska Indi-
ans, Aleuts, and Eskimos, and any Alaskan Native
Village, of the United States, that is considered an el-
igible recipient under the Indian Self-Determination
and Education Assistance Act or was considered an
eligible recipient under chapter 67 of title 31, United
States Code, prior to the repeal of such chapter.
‘‘(i) NOTICE OF FUNDING AVAILABILITY.—
‘‘(1) PUBLICATION.—The Secretary shall cause to
be published in the Federal Register notice of the
availability of any amounts made available for
grants under this section. Such notice shall be pub-
lished not later than the expiration of the 90-day pe-
riod beginning on the date that amounts are appro-
priated to carry out this section.
‘‘(2) CONTENTS.—The notice referred to in para-
graph (1) shall—
404
‘‘(A) describe the requirements for eligibility
to receive a grant, the purposes of the grant, and
the permissible uses of grant amounts;
‘‘(B) contain an address to which requests
for additional information regarding the dem-
onstration under this section may be made; and
‘‘(C) state the deadline established by the
Secretary pursuant to subsection (f)(2) for the
submission of applications for a grant.’’.
SEC. 516. RURAL COMMUNITY DEVELOPMENT INITIATIVE.
Title V of the Housing Act of 1949 (42 U.S.C. 1471
et seq.) is amended by inserting after section 538 (as added
by the preceding provisions of this title) the following new
section:
‘‘SEC. 539. RURAL COMMUNITY DEVELOPMENT INITIATIVE.
‘‘(a) IN GENERAL.—The Secretary is authorized to
provide assistance to develop the capacity and ability of
community development corporations, community housing
development organizations, and other nonprofit organiza-
tions to undertake community development and affordable
housing projects and programs in rural areas.
‘‘(b) FORM OF ASSISTANCE.—Assistance under this
section may be used for—
‘‘(1) training, education, support, and advice to
enhance the technical and administrative capabilities
405
of community development corporations, community
housing development organizations, and nonprofit or-
ganizations in rural areas;
‘‘(2) loans, grants, or predevelopment assistance
to community development corporations, community
housing development organizations, and nonprofit or-
ganizations to carry out community development and
affordable housing activities that benefit low-income
families in rural areas; and
‘‘(3) such other activities for rural areas as may
be determined by the Secretary.
‘‘(c) MATCHING REQUIREMENT.—Assistance provided
under this section shall be matched from private sources in
an amount equal to 3 times the amount made available
under this section.
‘‘(d) IMPLEMENTATION.—The Secretary shall by notice
establish such requirements as may be necessary to carry
out the provisions of this section. The notice shall take effect
upon issuance.’’.
SEC. 517. LOAN GUARANTEES FOR MULTIFAMILY RENTAL
HOUSING IN RURAL AREAS.
Title V of the Housing Act of 1949 (42 U.S.C. 1471
et seq.) is amended by inserting after section 539 (as added
by the preceding provision of this title) the following new
section:
406
‘‘SEC. 540. LOAN GUARANTEES FOR MULTIFAMILY RENTAL
HOUSING IN RURAL AREAS.
‘‘(a) AUTHORITY.—The Secretary may make commit-
ments to guarantee eligible loans for the development costs
of eligible housing and related facilities, and may guarantee
such eligible loans, in accordance with this section.
‘‘(b) EXTENT
OF GUARANTEE.—A guarantee made
under this section shall guarantee repayment of an amount
not exceeding 90 percent of the amount of the unpaid prin-
cipal and interest of the loan for which the guarantee is
made. The liability of the United States under any guaran-
tee under this section shall decrease or increase pro rata
with any decrease or increase of the amount of the unpaid
portion of the obligation.
‘‘(c) ELIGIBLE
BORROWERS.—A loan guaranteed
under this section may be made to a nonprofit organization,
an agency or body of any State government or political sub-
division thereof, or a private entity.
‘‘(d) ELIGIBLE HOUSING.—A loan may be guaranteed
under this section only if the loan is used for the develop-
ment costs of housing and related facilities (as such terms
are defined in section 515(e)) that—
‘‘(1) consists of 5 or more adequate dwellings;
‘‘(2) is available for occupancy only by low or
moderate income families or persons, whose incomes
at the time of initial occupancy do not exceed 115
407
percent of the median income of the area, as deter-
mined by the Secretary;
‘‘(3) will remain available as provided in para-
graph (2), according to such binding commitments as
the Secretary may require, for the period of the origi-
nal term of the loan guaranteed, unless the Secretary
waives the applicability of such requirement for the
loan only after determining, based on objective infor-
mation, that—
‘‘(A) there is no longer a need for low- and
moderate-income housing in the market area in
which the housing is located;
‘‘(B) housing opportunities for low-income
households and minorities will not be reduced as
a result of the waiver; and
‘‘(C) additional Federal assistance will not
be necessary as a result of the waiver; and
‘‘(4) is located in a rural area.
‘‘(e) ELIGIBLE LENDERS.—
‘‘(1) REQUIREMENT.—A loan may be guaranteed
under this subsection only if the loan is made by a
lender that the Secretary determines—
‘‘(A) meets the qualifications, and has been
approved by the Secretary of Housing and
Urban Development, to make loans for multifam-
408
ily housing that are to be insured under the Na-
tional Housing Act;
‘‘(B) meets the qualifications, and has been
approved by the Federal National Mortgage As-
sociation and the Federal Home Loan Mortgage
Corporation, to make loans for multifamily
housing that are to be sold to such corporations;
or
‘‘(C) meets any qualifications that the Sec-
retary may, by regulation, establish for partici-
pation of lenders in the loan guarantee program
under this section.
‘‘(2) ELIGIBILITY LIST AND ANNUAL AUDIT.—The
Secretary shall establish a list of eligible lenders and
shall annually conduct an audit of each lender in-
cluded in the list for purposes of determining whether
such lender continues to be an eligible lender.
‘‘(f) LOAN TERMS.—Each loan guaranteed pursuant
to this subsection shall—
‘‘(1) provide for complete amortization by peri-
odic payments to be made for a term not to exceed
40 years;
‘‘(2) involve a rate of interest agreed upon by the
borrower and the lender that does not exceed the max-
imum allowable rate established by the Secretary for
409
purposes of this section and is fixed over the term of
the loan;
‘‘(3) involve a principal obligation (including
initial service charges, appraisal, inspection, and
other fees as the Secretary may approve) not to ex-
ceed—
‘‘(A) in the case of a borrower that is a
nonprofit organization or an agency or body of
any State or local government, 97 percent of the
development costs of the housing and related fa-
cilities or the value of the housing and facilities,
whichever is less;
‘‘(B) in the case of a borrower that is a for-
profit entity not referred to in subparagraph
(A), 90 percent of the development costs of the
housing and related facilities or the value of the
housing and facilities, whichever is less; and
‘‘(C) in the case of any borrower, for such
part of the property as may be attributable to
dwelling use, the applicable maximum per unit
dollar amount limitations under section 207(c)
of the National Housing Act;
‘‘(4) be secured by a first mortgage on the hous-
ing and related facilities for which the loan is made,
410
or otherwise, as the Secretary may determine nec-
essary to ensure repayment of the obligation; and
‘‘(5) for at least 20 percent of the loans made
under this section, the Secretary shall provide the bor-
rower with assistance in the form of credits pursuant
to section 521(a)(1)(B) to the extent necessary to re-
duce the rate of interest under paragraph (2) to the
applicable Federal rate, as such term is used in sec-
tion 42(i)(2)(D) of the Internal Revenue Code of
1986.
‘‘(g) GUARANTEE FEE.—At the time of issuance of a
loan guaranteed under this section, the Secretary may col-
lect from the lender a fee equal to not more than 1 percent
of the principal obligation of the loan.
‘‘(h) AUTHORITY FOR LENDERS TO ISSUE CERTIFI-
CATES OF GUARANTEE.—The Secretary may authorize cer-
tain eligible lenders to determine whether a loan meets the
requirements for guarantee under this section and, subject
to the availability of authority to enter into guarantees
under this section, execute a firm commitment for a guar-
antee binding upon the Secretary and issue a certificate
of guarantee evidencing a guarantee, without review and
approval by the Secretary of the specific loan. The Sec-
retary may establish standards for approving eligible lend-
ers for a delegation of authority under this subsection.